HNI Corporation Reports First Quarter 2025 Results

About this update from Hni Corporation

Delivered year-over-year earnings and revenue growth; 2025 earnings outlook unchanged MUSCATINE, Iowa, May 07, 2025 --( BUSINESS WIRE )-- HNI Corporation (NYSE: HNI) today announced net sales of $599.8 million and net income of $13.9 million for the first quarter ended March 29, 2025. Highlights "Our members delivered an excellent start to 2025, despite tariff-driven volatility. Our first quarter results demonstrate the strength of our strategies, the benefits of our diversified revenue streams, and the merits of our customer-first business model. "In the Workplace Furnishings segment, net sales increased slightly year-over-year, led by improving demand in our contract businesses. Orders accelerated and backlog levels are up, while return-to-office plans gained momentum. Each of these drivers points to continued year-over-year revenue growth over the remainder of 2025. Our profit transformation efforts and recognition of KII synergies continued to benefit first quarter results. However, stronger volume from large projects and from state and local government customers, which tend to carry higher discounts, was dilutive to segment operating margin. As a result, segment GAAP and non-GAAP operating profit margin compressed year-over-year in the first quarter. Despite elevated near-term uncertainty, we expect margin expansion in 2025, while we remain focused on our investments aimed at driving growth in this segment. "In Residential Building Products, revenue growth returned, and segment operating profit margin expanded 130 basis points year-over-year in the quarter. While challenging housing market dynamics continued to pressure new construction demand, our remodel-retrofit business generated solid year-on-year revenue growth during the first quarter. Despite the current housing headwinds, we remain encouraged about the long-term opportunities tied to the broader housing market, and in the strength of our market-leading positions and profitable operating model. And, we continue to invest to drive future growth. "Our first quarter results demonstrate our ability to manage through varying macroeconomic conditions, while remaining focused on the future. And while we expect macro headwinds and demand volatility over the near-term, based on our leading indicators—both external and internal, we expect strong results to continue, driven by our margin expansion efforts and a return of volume growth," stated Jeff Lorenger, Chairman, President, and Chief Executive Officer. HNI Corporation — First Quarter Summary Comments Workplace Furnishings — First Quarter Summary Comments Residential Building Products — First Quarter Summary Comments First Quarter Order Rates Outlook Concluding Remarks "We delivered a strong start to 2025, with revenue growth returning—in both segments, and non-GAAP operating margin expanding to the strongest first quarter-level since 2007. As we look to the full year, our earnings outlook remains unchanged - demonstrating the benefits of our visibility story and our ability to manage through changing economic conditions. We expect solid mid-single digit revenue growth—in both segments, a mostly unchanged non-GAAP operating margin versus the year-ago period, and double-digit non-GAAP earnings per share growth for the fourth consecutive year. We had a strong start to the year and are optimistic about the remainder of 2025. While the macroeconomic environment remains dynamic, we remain prepared to manage through any demand challenges. "Our members remain focused on driving growth and expanding margins. Our balance sheet is in great shape and our cash flow remains consistent and strong. We will continue to invest for the future with confidence," concluded Mr. Lorenger. Conference Call HNI Corporation will host a conference call on Wednesday, May 7, 2025 at 10:00 a.m. (Central) to discuss first quarter fiscal year 2025 results. To participate, call 1-855-761-5600 – conference ID number 7175411. Both a live webcast and webcast replay will be available on HNI Corporation’s website at https://investors.hnicorp.com/events-and-presentations . About HNI Corporation HNI Corporation (NYSE: HNI) has been improving where people live, work, and gather for more than 75 years. HNI is a manufacturer of workplace furnishings and residential building products, operating under two segments. The Workplace Furnishings segment is a leading global designer and provider of commercial furnishings, going to market under multiple unique brands. The Residential Building Products segment is the nation’s leading manufacturer and marketer of hearth products, which include a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. More information can be found on the Corporation’s website at www.hnicorp.com . Forward-Looking Statements This release 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 regarding future levels of demand, tariff pressures, anticipated macroeconomic conditions, expected differences in seasonality and its effects on the Corporation’s results of operations, the anticipated benefits and cost synergies of the acquisition of Kimball International, and future levels of productivity. Forward-looking statements can be identified by words including "expect," "believe," "anticipate," "estimate," "may," "will," "would," "could," "confident", or other similar words, phrases, or expressions. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Corporation’s actual future results and performance to differ materially from expected results. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results due to the risks and uncertainties described elsewhere in this release and in the Corporation’s filings with the Securities and Exchange Commission, including but not limited to: the Corporation’s ultimate realization of the anticipated benefits of the acquisition of Kimball International; disruptions in the global supply chain; the effects of prolonged periods of inflation and rising interest rates; labor shortages; the levels of office furniture needs and housing starts; overall demand for the Corporation’s products; general economic and market conditions in the United States and internationally; industry and competitive conditions; the consolidation and concentration of the Corporation’s customers; the Corporation’s reliance on its network of independent dealers; change in trade policy, including with respect to tariff levels; changes in raw material, component, or commodity pricing; market acceptance and demand for the Corporation’s new products; changing legal, regulatory, environmental, and healthcare conditions; the risks associated with international operations; the potential impact of product defects; the various restrictions on the Corporation’s financing activities; an inability to protect the Corporation’s intellectual property; cybersecurity threats, including those posed by potential ransomware attacks; impacts of tax legislation; and force majeure events outside the Corporation’s control, including those that may result from the effects of climate change. A description of these risks uncertainties and additional risks and uncertainties can be found in the Corporation’s annual report on Form 10-K for the year ended December 28, 2024 and subsequent quarterly and periodic reports filed with the Securities and Exchange Commission on Forms 10-Q and 8-K. The Corporation assumes no obligation to update, amend, or clarify forward-looking statements, except as required by applicable law. Non-GAAP Financial Measures This earnings release includes certain non-GAAP financial measures as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of historical non-GAAP financial measures to the most directly comparable historical GAAP measures are included below. This information gives investors additional insights into HNI’s financial performance and operations. While HNI’s management believes the non-GAAP financial measures are useful in evaluating HNI’s operations, this information should be considered supplemental and not in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these measures may be different from similarly titled non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, this earnings release contains the following non-GAAP financial measures: non-GAAP gross profit, operating income, operating profit, income taxes, effective tax rate, net income, and net income per diluted share (i.e., EPS). These measures are adjusted from the comparable GAAP measures to exclude the impacts of the selected items as summarized in the tables below. Generally, non-GAAP EPS is calculated using HNI’s overall effective tax rate for the period, as this rate is reflective of the tax applicable to most non-GAAP adjustments. In the current-year quarter, the effective tax rate used to calculate non-GAAP EPS differs from the GAAP effective tax rate due to the impact of the impairment charge associated with HNI India. The transactions excluded for purposes of non-GAAP financial information included in this earnings release include: restructuring charges recorded to cost of sales comprised of accelerated depreciation, asset disposals, inventory valuation adjustments, and relocation and new facility setup costs in the Workplace Furnishings segment; costs associated with factory consolidation initiatives in the Workplace Furnishings segment; the gain on sale of a manufacturing facility in Workplace Furnishings; a charitable donation of land recorded at corporate; and a current-period impairment charge in the Workplace Furnishings segment related to HNI India. This earnings release refers to our expectations regarding non-GAAP EPS. The Corporation is unable to provide a reconciliation of this forward-looking non-GAAP measure to future EPS without unreasonable effort due to the uncertainty regarding, and to the potential variability of, many of the costs and expenses that could potentially impact EPS calculated on a GAAP basis. These items include, but are not limited to, impairments, financial impacts from changes in legal, regulatory, and tax requirements, charges related to actions taken to improve future profitability, and the impact of acquisitions and divestitures, if any. These items necessary to reconcile forward-looking non-GAAP EPS to EPS could be material and have a significant impact on the Corporation’s results computed in accordance with GAAP.   View source version on businesswire.com: https://www.businesswire.com/news/home/20250505321722/en/ Contacts For Information Contact: Vincent P. Berger, Executive Vice President and Chief Financial Officer (563) 272-7400 Matthew S. McCall, Vice President, Investor Relations and Corporate Development (563) 275-8898

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