Hni Corporation · NYSE:HNI
Hni — Q3 2021 Earnings Presentation
16 slides from Hni's earnings presentation, Oct 25, 2021
Slide 1: Third Quarter Fiscal 2021 Results
Third Quarter Fiscal 2021 Results October 25th, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains "forward-looking" statements based on current expectations regarding future plans, events, outlook, objectives, financial performance, expectations for sales growth, and earnings per diluted share (GAAP and non-GAAP), including statements regardi
Slide 3: Q3 2021 Conference Call Agenda
Q3 2021 Conference Call Agenda I. Q3 2021 highlights II. Q4 2021 outlook III. Q&A 3
Slide 4: Q3 2021 Highlights
Q3 2021 Highlights 1. Strong order growth continued in both segments. However, profit was negatively impacted by three ongoing constraints: labor availability, supply chain disruptions, and input cost inflation 2. Residential Building Products segment orders increased 35% and revenue increased 26% o
Slide 5: Secular Trends and HNI-Specific Opportunities
Secular Trends and HNI-Specific Opportunities Two differentiated business segments each well positioned with cyclical, secular, and HNI-specific growth drivers. We have diversified revenue streams and clear opportunities to drive revenue growth and shareholder value. Workplace Furnishings Residentia
Slide 6: Q3 2021 Review
Q3 2021 Review • Total revenue +14% YoY organically • Residential Building Products revenue +25% YoY organically --New construction +24% YoY organically --Remodel/retrofit +27% YoY • Workplace Furnishings revenue +9% YoY organically Workplace Furnishings Revenue/Organic Growth Residential Building P
Slide 7: Q3 2021 Review (cont.)
Q3 2021 Review (cont.) • Gross margin decreased 330 bps year-over-year to 33.3% • Operating income decreased 32% year-over-year • Operating margin contracted 310 bps year-over-year to 4.5% • Reported EPS of $0.43 compared to $0.71 in the prior-year Non-GAAP Net Income/Non-GAAP EPS Non-GAAP EBITDA/Ma
Slide 8: Cash Flow and Liquidity
Cash Flow and Liquidity • Quarter-ending debt levels: $178 million • Quarter-ending gross leverage ratio: 0.9x TTM EBITDA* • Existing lending agreements gross leverage covenant: 3.5x TTM EBITDA* • Quarter-ending liquidity (cash plus borrowing availability): ~$500 million Gross Debt/Gross Leverage Mi
Slide 9: Q4 2021 Outlook
Q4 2021 Outlook Sales and profit outlook: 1. Expect consolidated revenue to grow in the mid-to-high single-digit percent range compared to the prior-year quarter, including impact of acquisitions and headwinds from labor availability and supply chain constraints • Workplace Furnishings revenue growt
Slide 10: Appendix
Appendix 10
Slide 11: Q3 2021 Details – Segments
Q3 2021 Details – Segments $ change % change Segment Breakdown 3Q21 3Q20 F/(U) Basis Pt Change Sales Workplace Furnishings (1) $393.1 $353.4 $39.8 11.3% Residential Building Products (2) $193.6 $153.7 $39.9 26.0% Total $586.7 $507.1 $79.7 15.7% Operating Profit (Loss) Workplace Furnishings $3.9 $16.
Slide 12: Q3 2021 Details
Q3 2021 Details $ change % change Income Statement 3Q21 3Q20 F/(U) Basis Pt Change Net Sales $586.7 $507.1 $79.7 15.7% GAAP Gross Profit 195.4 185.5 9.8 5.3% % of Net Sales (1) 33.3% 36.6% -330 Freight & Distribution 55.5 45.0 (10.5) 23.4% % of Net Sales 9.5% 8.9% 60 Other SG&A (excluding F&D) 113.6
Slide 13: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to HNI’s financial statements as prepar
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended 10/2/2021 Three Months Ended 9/26/2020 Residential Residential Workplace Building Workplace Building (Dollars in millions) Furnishings Products Total Furnishings Products Total Sales as reported (GAAP) $393.1 $193.6 $586.7 $353.4 $153.7 $507.1 % change fro
Slide 15: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) HNI Corporation Reconciliation (Dollars in millions) Operating Income (Loss) (EBIT) 2019 2020 2021 (Dollars in millions) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 As reported (GAAP) $ 3.7 $ 23.2 $ 60.7 $ 63.8 $ (23.7) $ 14.8 $ 38.8 $ 31.5 $ 22.6 $ 24.7 $ 19.2 Restructuring an
Slide 16: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Segment Reconciliation (Dollars in millions) Residential Building Products Sales 2019 2020 2021 (Dollars in millions) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 As reported (GAAP) $ 125.9 $ 116.5 $ 140.6 $ 166.7 $ 130.3 $ 109.4 $ 153.7 $ 196.3 $ 181.5 $ 166.3 $ 193.6 Less: Imp