HNI : Fourth Quarter 2024 Earnings Press Release
HNI
HNI Corporation 600 East Second Street, Muscatine, Iowa 52761, Tel 563 272 7400, Fax 563 272 7347, hnicorp.com
News Release
HNI CORPORATION REPORTS FOURTH QUARTER AND FISCAL YEAR 2024 RESULTS
Full-year EPS grew double-digits for the third consecutive year
MUSCATINE, Iowa (February 20, 2025) - HNI Corporation (NYSE: HNI) today announced net sales of $2.526 billion and net income of $139.5 million for the full year ended December 28, 2024. Fourth quarter net sales and net income were $642.5 million and $38.3 million, respectively.
Highlights
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maintaining its longstanding quarterly dividend. For the year, gross buybacks and dividends paid totaled $129 million.
"Our strong full-year results, in both segments, demonstrate the strength of our strategies and customer-first business model. Our members delivered another year of excellent operational and financial performance. Full- year non-GAAP EPS grew more than 15 percent year-over-year, our third straight year of double-digit earnings growth. Our earnings per share reached a new record in 2024.
"In the Workplace Furnishings segment, our profit transformation plan and recognition of KII synergies delivered 44 percent full-year segment non-GAAP operating profit growth. Segment non-GAAP operating profit margin of 9.5 percent expanded to the highest annual level since 2007. While our fourth quarter profitability was impacted by lower year-on-year net sales, pre-order metrics continue to show improvement, backlog levels are up, and return-to-office plans are gaining momentum, all pointing to a return of net sales growth in 2025. And we are increasingly focusing our investments on driving growth in this segment.
"In Residential Building Products, we expanded segment non-GAAP operating profit margin 50 basis points for the full year, despite a challenging housing market that impacted net sales in the fourth quarter and fiscal year. Our results demonstrate the dedication of our members and strength of our business model. We believe in 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 accordingly.
"Again in 2024, we demonstrated our ability to manage through all parts of the economic cycle. And we expect continued strong results going forward, driven largely by our margin expansion efforts. However, ongoing economic volatility-tied to tariff uncertainty and rising inflation expectations, still-elevated interest rates, and weaker consumer sentiment-points to ongoing demand volatility in 2025," stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.
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HNI Corporation - Fourth Quarter Results
HNI Corporation - Fourth Quarter Financial Performance
(Dollars in millions, except per share data)
Three Months Ended
December 28,
December 30,
2024
2023
Change
GAAP
Net Sales
$642.5
$679.8
(5.5%)
Gross Profit %
40.5%
40.2%
30 bps
SG&A %
31.6%
31.0%
60 bps
Restructuring and Impairment Charges %
0.4%
4.6%
-420 bps
Operating Income
$54.6
$30.7
78.0%
Operating Income %
8.5%
4.5%
400 bps
Effective Tax Rate
22.5%
0.0%
Net Income %
6.0%
3.3%
270 bps
EPS - diluted
$0.79
$0.48
64.6%
Non-GAAP
Gross Profit %
40.9%
40.2%
70 bps
Operating Income
$59.7
$66.1
(9.7%)
Operating Income %
9.3%
9.7%
-40 bps
Effective Tax Rate
22.5%
19.5%
EPS - diluted
$0.87
$0.98
(11.2%)
HNI Corporation - Fourth Quarter Summary Comments
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HNI Corporation - Full-Year Results
HNI Corporation - Full-Year Financial Performance
(Dollars in millions, except per share data)
Twelve Months Ended
December 28,
December 30,
2024
2023
Change
GAAP
Net Sales
$2,526.4
$2,434.0
3.8%
Gross Profit %
40.9%
39.0%
190 bps
SG&A %
32.5%
33.4%
-90 bps
Restructuring and Impairment Charges %
0.2%
1.8%
-160 bps
Operating Income
$206.5
$90.3
129%
Operating Income %
8.2%
3.7%
450 bps
Effective Tax Rate
22.2%
24.1%
Net Income %
5.5%
2.0%
350 bps
EPS - diluted
$2.88
$1.09
164%
Non-GAAP
Gross Profit %
41.1%
39.0%
210 bps
Operating Income
$217.8
$178.1
22.3%
Operating Income %
8.6%
7.3%
130 bps
Effective Tax Rate
22.2%
21.3%
EPS - diluted
$3.06
$2.65
15.5%
The following table presents results for (1) the Corporation's legacy business, excluding the impacts of KII ("Legacy HNI") and (2) KII. Please refer to non-GAAP reconciliations, which follow the financial statements in this release for further information on the adjustments made to calculate non-GAAP performance.
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HNI Corporation - Full-Year Impact of Kimball International Acquisition
(Dollars in millions, except per share data)
Twelve Months Ended
December 28, 2024
December 30, 2023
Legacy
Consolidated
Legacy
Consolidated
GAAP
HNI
KII
HNI
HNI
KII*
HNI*
Net Sales
$1,932.0
$594.4
$2,526.4
$2,072.6
$361.4
$2,434.0
Gross Profit
$791.1
$242.3
$1,033.4
$798.6
$149.6
$948.3
Gross Profit %
40.9%
40.8%
40.9%
38.5%
41.4%
39.0%
Restructuring and Impairment
$5.9
$0.3
$6.2
$35.8
$9.0
$44.8
Operating Income
$138.6
$67.9
$206.5
$78.9
$11.3
$90.3
Operating Income %
7.2%
11.4%
8.2%
3.8%
3.1%
3.7%
EPS - diluted
$2.88
$1.09
Non-GAAP
Gross Profit
$795.4
$243.0
$1,038.4
$799.5
$149.6
$949.2
Gross Profit %
41.2%
40.9%
41.1%
38.6%
41.4%
39.0%
Operating Income
$148.9
$68.9
$217.8
$145.3
$32.8
$178.1
Operating Income %
7.7%
11.6%
8.6%
7.0%
9.1%
7.3%
EPS - diluted
$2.55
$3.06
$2.50
$2.65
*2023 fiscal year results reflect seven months of KII and approximately three and a half months of KII's Poppin business that was divested in the third quarter of 2023.
HNI Corporation - Full-Year Summary Comments
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productivity, favorable price-cost, and the net benefit of the Kimball International acquisition, partially offset by lower organic net sales volume.
Workplace Furnishings - Fourth Quarter and Full-Year Results
Workplace Furnishings - Financial Performance
(Dollars in millions)
Three Months Ended
Twelve Months Ended
December 28,
December 30,
December 28,
December 30,
2024
2023
Change
2024
2023
Change
GAAP
Net Sales
$462.9
$490.7
(5.7%)
$1,888.0
$1,740.3
8.5%
Operating Income
$30.7
$9.5
225%
$169.1
$68.6
146%
Operating Income %
6.6%
1.9%
470 bps
9.0%
3.9%
510 bps
Non-GAAP
Operating Income
$35.7
$40.4
(11.4%)
$179.2
$124.5
44.0%
Operating Income %
7.7%
8.2%
-50 bps
9.5%
7.2 %
230 bps
The following tables present results for (1) the Corporation's legacy workplace furnishings business, excluding the impacts of KII ("Legacy Workplace") and (2) KII. Please refer to non-GAAP reconciliations, which follow the financial statements in this release for further information on the adjustments made to calculate non-GAAP performance.
Workplace Furnishings - Full-Year Impact of Kimball International Acquisition
(Dollars in millions)
Twelve Months Ended
December 28, 2024
December 30, 2023
Legacy
Total
Legacy
Total
GAAP
Workplace
KII
Workplace
Workplace
KII*
Workplace*
Net Sales
$1,293.6
$594.4
$1,888.0
$1,378.8
$361.4
$1,740.3
Operating Income
$101.2
$67.9
$169.1
57.3
11.3
$68.6
Operating Income %
7.8%
11.4%
9.0%
4.2%
3.1%
3.9%
Non-GAAP
Operating Income
$110.3
$68.9
$179.2
$91.6
$32.8
$124.5
Operating Income %
8.5%
11.6%
9.5%
6.6%
9.1%
7.2%
*2023 fiscal year results reflect seven months of KII and approximately three and a half months of KII's Poppin business that was divested in the third quarter of 2023.
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Workplace Furnishings - Fourth Quarter Summary Comments
Workplace Furnishings - Full-Year Summary Comments
Residential Building Products - Fourth Quarter and Full-Year Results
Residential Building Products - Financial Performance
(Dollars in millions)
Three Months Ended
Twelve Months Ended
December 28,
December 30,
December 28,
December 30,
2024
2023
Change
2024
2023
Change
GAAP
Net Sales
$179.6
$189.1
(5.0%)
$638.4
$693.7
(8.0%)
Operating Income
$39.8
$42.1
(5.5%)
$110.8
$116.6
(5.0%)
Operating Income %
22.2%
22.3%
-10 bps
17.4%
16.8%
60 bps
Non-GAAP
Operating Income
$39.8
$42.1
(5.5%)
$111.9
$117.8
(5.0%)
Operating Income %
22.2%
22.3%
-10 bps
17.5%
17.0%
50 bps
Residential Building Products - Fourth Quarter Summary Comments
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Residential Building Products - Full-Year Summary Comments
Fourth Quarter Orders
Outlook
8
Concluding Remarks
"Over the last three years, our strategies and the dedication of our members have driven non-GAAP EPS growth of nearly 90 percent and expanded consolidated operating margin by 400 basis points despite an unstable macroeconomic environment. In Workplace Furnishings, our profit transformation initiatives and the addition of Kimball International have expanded operating margin more than 800 basis points, and segment operating profit has grown $165 million from 2021 levels. Our ongoing profit transformation initiatives and expectations of improving net sales growth point to continued year-over-year profit and margin improvement.
"In Residential Building Products, we have effectively managed our cost structure to navigate housing market volatility caused by elevated interest rates and affordability pressures. Despite these challenges, our non-GAAP operating profit margin in 2024 expanded 50 basis points, while we continued to invest in long-term growth initiatives, enhancing customer connectivity, and building leading brands. As demand trends recover, we are uniquely positioned to drive high-margin growth in this business.
"Our balance sheet is in great shape and our cash flow remains consistent and strong. Our members remain focused on expanding margins in Workplace Furnishings and driving long-term high-margin net sales growth in Residential Building Products.
"As we enter 2025, despite ongoing macroeconomic uncertainty and demand volatility, we maintain elevated earnings visibility through 2026 and have a renewed focus on driving net sales growth," concluded Mr. Lorenger.
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Conference Call
HNI Corporation will host a conference call on Thursday, February 20, 2025 at 10:00 a.m. (Central) to discuss fourth quarter and fiscal year 2024 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) 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 the Corporation's expectations for net sales and EPS, future levels of demand, anticipated macroeconomic conditions, expected differences in seasonality and its results 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, 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; 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 and additional risks can be found in the Corporation's annual and quarterly reports filed with the Securities
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Disclaimer
HNI Corporation published this content on March 03, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 03, 2025 at 17:15:54.243.