Hni Corporation · NYSE:HNI
Hni — Q4 2021 Earnings Presentation
18 slides from Hni's earnings presentation, Feb 28, 2022
Slide 1: Fourth Quarter Fiscal 2021 Results
Fourth Quarter Fiscal 2021 Results February 28th, 2022
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: Q4 2021 Conference Call Agenda
Q4 2021 Conference Call Agenda I. Strategic Review II. Q4 2021 highlights III. 2022 outlook IV. Q&A 3
Slide 4: Profitable Growth Strategic Framework
Profitable Growth Strategic Framework HNI’s unique Member Owner culture provides our foundation, and our corporate-wide focus and members’ efforts are centered on three pillars: 4
Slide 5: Q4 2021 Highlights
Q4 2021 Highlights 1. Multiple actions to improve long-term profitability in Workplace Furnishings. --Business simplification moves --Addressing price-cost pressures --Expanding capacity 2. High-teens operating profit in Residential Building Products. Despite persistent macro pressures, the segment
Slide 6: 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 grow revenue, expand margins, and drive shareholder value. Workplace Furnish
Slide 7: Q4 2021 Review
Q4 2021 Review • Total revenue +4% YoY organically • Residential Building Products revenue +3% YoY organically --New construction +11% YoY organically --Remodel/retrofit -4% YoY organically • Workplace Furnishings revenue +5% YoY organically Workplace Furnishings Revenue/Organic Growth Residential B
Slide 8: Q4 2021 Review (cont.)
Q4 2021 Review (cont.) • Non-GAAP gross margin expanded 20 bps sequentially and compressed 360 bps year-over-year to 33.5% • Non-GAAP operating income decreased 1.5% sequentially and 35% year- over-year • Non-GAAP operating margin compressed 20 bps sequentially and 270 bps year-over-year to 4.3% • R
Slide 9: Cash Flow and Liquidity
Cash Flow and Liquidity • Quarter-ending debt levels: $178 million • Quarter-ending gross leverage ratio: 1.0x TTM EBITDA* • Existing lending agreements gross leverage covenant: 3.5x TTM EBITDA* • Quarter-ending liquidity (cash plus borrowing availability): $427 million* Gross Debt/Gross Leverage Mi
Slide 10: 2022 Outlook
2022 Outlook Sales and profit outlook: Although we expect a slow start, capacity additions and benefits from pricing actions are expected to drive strong revenue growth and profit improvement as 2022 progresses. 1. Workplace Furnishings revenue growth in the high-teens to low-twenties percent range
Slide 11: Appendix
Appendix 11
Slide 12: Q4 2021 Details – Segments
Q4 2021 Details – Segments $ change % change Segment Breakdown 4Q21 4Q20 F/(U) Basis Pt Change Sales (1) Workplace Furnishings $394.0 $365.9 $28.1 7.7% Residential Building Products (2) $209.0 $196.3 $12.7 6.5% Total $602.9 $562.1 $40.8 7.3% Operating Profit (Loss) Workplace Furnishings ($10.1) $3.6
Slide 13: Q4 2021 Details
Q4 2021 Details $ change % change Income Statement 4Q21 4Q20 F/(U) Basis Pt Change Net Sales $602.9 $562.1 $40.8 7.3% GAAP Gross Profit 194.2 208.6 (14.5) (6.9%) % of Net Sales (1) 32.2% 37.1% -490 Freight & Distribution 55.7 48.4 (7.3) 15.0% % of Net Sales 9.2% 8.6% 60 Other SG&A (excluding F&D) 12
Slide 14: 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 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended 1/1/2022 Three Months Ended 1/2/2021 Residential Residential Workplace Building Workplace Building (Dollars in millions) Furnishings Products Total Furnishings Products Total Sales as reported (GAAP) $394.0 $209.0 $602.9 $365.9 $196.3 $562.1 % change from
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended 1/1/2022 Gross Operating Net Diluted (Dollars in millions, except per share data) Profit Income Tax Income EPS As reported (GAAP) $194.2 $11.9 $2.0 $8.2 $0.19 % of net sales 32.2% 2.0% 1.4% Tax % 19.4% Restructuring charges 7.6 8.2 1.9 6.3 0.14 Impairment
Slide 17: 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 Q4 As reported (GAAP) $ 3.7 $ 23.2 $ 60.7 $ 63.8 $ (23.7) $ 14.8 $ 38.8 $ 31.5 $ 22.6 $ 24.7 $ 26.2 $ 11.9 Restru
Slide 18: 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 Q4 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 $ 209.