Financial Performance - HNI Corporation reported full-year net sales of $2.526 billion, a 3.8% increase from the previous year, with fourth-quarter net sales at $642.5 million, down 5.5% year-over-year[3][12][18]. - Full-year GAAP EPS reached $2.88, a 164% increase year-over-year, while non-GAAP EPS was $3.06, up 15.5% from the prior year[5][14][19]. - Operating cash flow exceeded $225 million in 2024, with a year-ending gross debt leverage ratio of 1.1x, indicating a strong balance sheet[5][6]. - Net income attributable to HNI Corporation for the twelve months ended December 28, 2024, was $139.5 million, compared to $49.2 million in 2023, marking a 183.5% increase[42]. - The company reported a net income of $38.3 million for the three months ended December 28, 2024, resulting in an earnings per share (EPS) of $0.79, compared to $0.63 in the same period last year[55]. - For the twelve months ended December 28, 2024, the consolidated net income was $139.5 million, with an EPS of $2.88, and a gross profit margin of 40.9%[60]. Segment Performance - The Workplace Furnishings segment saw an 8.5% increase in full-year net sales to $1.888 billion, with a significant operating income growth of 146%[20]. - Residential Building Products net sales decreased 8.0% year-over-year to $638.4 million, with remodel-retrofit sales declining at a higher rate than new construction[31]. - Operating income for Workplace Furnishings was $169.1 million, with an operating margin of 9.0%, an improvement of 510 basis points year-over-year[28]. - Operating profit margin for Residential Building Products increased 60 basis points to 17.4%, driven by improved net productivity and favorable price-cost dynamics[31]. - Non-GAAP operating income for Residential Building Products decreased by 5.0% to $111.9 million compared to $117.8 million for the previous year[67]. Cost Management and Efficiency - The consolidated operating income margin expanded by 450 basis points on a GAAP basis and 130 basis points on a non-GAAP basis compared to 2023, driven by profit transformation initiatives and synergy benefits[5][14]. - The gross profit margin for the full year improved by 190 basis points to 40.9%, driven by enhanced productivity and favorable price-cost dynamics[14][18]. - The company incurred restructuring and impairment charges of $2.5 million for the three months ended December 28, 2024, significantly lower than $31.4 million in the same period last year[50]. - Restructuring and impairment charges for the year totaled $6.2 million, significantly lower than the previous year's $44.8 million, reflecting improved operational efficiency[18]. - The company is focusing on cost reduction initiatives, with a noted impact of $0.1 million in the Legacy Workplace segment[67]. Future Outlook - The company anticipates a return to net sales growth in 2025, supported by encouraging order rates and backlog levels in both segments[5][12]. - The Corporation anticipates double-digit EPS growth in 2025, driven by synergies from the Kimball International acquisition and increased profits from net sales growth[31]. - The Corporation expects year-over-year net sales growth in the low-to-mid single digits for both segments in 2025, with improving growth rates as the year progresses[31]. - For Q1 2025, Workplace Furnishings net sales are expected to decrease at a low-to-mid single-digit rate year-over-year, while Residential Building Products are projected to increase mid-single digits[31]. Shareholder Returns - The company maintained its quarterly dividend while accelerating stock repurchase activity, with total buybacks and dividends paid amounting to $129 million for the year[5][6]. - The balance sheet remains strong, with low leverage and substantial capacity for capital deployment, focusing on reinvestment, dividends, share buybacks, and M&A opportunities[31].

Financial Data and Key Metrics Changes - Non-GAAP EPS for Q3 2024 was $1.03, exceeding internal expectations and representing an 11% increase year-over-year despite revenue pressure [5][6] - The company achieved more than double the EPS over the past three years without top-line support [6] - Full-year EPS is expected to increase, extending the streak of growing full-year EPS by 10% or more to three years [23][26] Business Line Data and Key Metrics Changes - In the Workplace Furnishings segment, non-GAAP operating profit margin reached a 20-year high [7] - Residential Building Products saw non-GAAP operating profit margin expand year-over-year, exceeding 18% for only the third time [7] - SMB orders declined 3% year-over-year in Q3, contrasting with a 6% growth in the same period last year [17] Market Data and Key Metrics Changes - The Housing Market Index fell to 39 in August, down from a peak of 51 earlier in the year, reflecting builder and homeowner sentiment impacted by economic factors [12] - The Small Business Optimism survey indicated record high uncertainty ahead of the US elections, affecting discretionary spending [10] Company Strategy and Development Direction - The company is optimistic about future profit growth, with initiatives in Mexico and KII synergies expected to deliver $0.70 to $0.80 of EPS growth in 2025 and 2026 [13][15] - The focus remains on expanding margins in Workplace Furnishings and driving long-term revenue growth in Residential Building Products [26] - Continued investment in product innovations and online capabilities is planned to enhance market position [21] Management's Comments on Operating Environment and Future Outlook - Management noted a near-term demand pause across businesses, expecting fourth-quarter profit to decline compared to the same period in 2023 [8][22] - Economic and election concerns are causing small business leaders to hesitate on discretionary spending, but this is viewed as a temporary pressure [10][11] - Long-term market fundamentals in Residential Building Products remain positive, with expectations for interest rate reductions to drive increased housing turnover [20] Other Important Information - The company improved its financial position, with gross leverage at 1.1 times, down from 1.5 times in the previous quarter [24] - Share repurchase activity accelerated, with over $11 million in buybacks during the quarter [25] - Marshall Bridges will step down as CFO, with VP Berger taking over at year-end [28] Q&A Session Summary Question: Can you elaborate on the near-term softness in Residential Building Products? - Management indicated that the softness is primarily in the stove business, which is part of the remodel/retrofit segment, and is experiencing slower normalization than expected [31][34] Question: Will this softness persist into early next year? - Management believes the current conditions will not change radically, and it is premature to project anything for 2025 [37] Question: How do transactional business trends relate to order growth? - The transactional business is sensitive to economic changes and is currently leading the short-cycle trends, which may indicate negative order growth in the fourth quarter [41][42] Question: What are the capital allocation priorities now that leverage is back down? - The company plans to reinvest in the business, maintain dividends, and assess share repurchase and M&A opportunities on a case-by-case basis [49] Question: What is the outlook for cash flow generation and working capital impact for 2025? - Working capital is normalized, and the company expects healthy free cash flow next year, with CapEx anticipated to increase slightly [59]

Core Insights - HNI reported quarterly earnings of $1.03 per share, exceeding the Zacks Consensus Estimate of $0.97 per share, and showing an increase from $0.93 per share a year ago, resulting in an earnings surprise of 6.19% [1] - The company posted revenues of $672.2 million for the quarter ended September 2024, which was below the Zacks Consensus Estimate by 6.38% and a decrease from $711.6 million year-over-year [2] - HNI has outperformed the S&P 500 with a year-to-date gain of approximately 23.9% compared to the S&P 500's 22.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.04 on revenues of $700 million, and for the current fiscal year, it is $3.17 on revenues of $2.63 billion [7] - The estimate revisions trend for HNI is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Business - Office Products industry, to which HNI belongs, is currently ranked in the top 13% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - The performance of HNI's stock may be influenced by the overall industry outlook, as empirical research indicates a strong correlation between near-term stock movements and earnings estimate revisions [5]

Financial Performance - Third quarter net sales decreased 5.5% year-over-year to $672.2 million, with organic sales down 4.5%[12] - Non-GAAP EPS for the third quarter increased 11% year-over-year to $1.03, while GAAP EPS rose 23% to $0.98[1] - Year-to-date EPS has grown 33%, with significant profit growth achieved despite challenging market conditions[26] - Net sales for the three months ended September 30, 2023, were $711.6 million, compared to $672.2 million for the same period in 2022, representing a 5.2% increase[37] - The company reported a net income of $47.5 million for the three months ended September 28, 2024, compared to $39.5 million in the prior year, representing a 20.3% increase[53] Operating Income and Margins - Consolidated operating margin expanded by 220 basis points on a GAAP basis and 150 basis points on a non-GAAP basis compared to the prior year[2] - The Workplace Furnishings segment achieved a non-GAAP operating profit margin of 11.9%, an improvement of 190 basis points year-over-year[19] - Operating income for the three months ended September 30, 2023, increased to $68.9 million from $56.8 million, marking a 21.8% rise[37] - Operating income as reported (GAAP) for the same period was $56.8 million, or 8.0% of net sales[55] - Non-GAAP operating income was $65.2 million, accounting for 9.2% of net sales[55] Segment Performance - The Residential Building Products segment's net sales decreased 4.4% to $167.1 million, with an operating profit margin of 17.9%[20] - Operating income for Workplace Furnishings increased by 22.1% to $57.7 million, representing 11.4% of net sales[57] - Operating income for Residential Building Products decreased by 3.1% to $29.9 million, with a margin of 17.9%[58] - Non-GAAP operating income for Residential Building Products was $31.0 million, or 18.6% of net sales[58] Future Outlook - The Corporation expects $45 to $50 million in savings from the Kimball International acquisition synergies and the ramp of its Mexico facility, contributing an additional $0.70 to $0.80 of EPS through 2026[3] - Fourth quarter net sales in the Workplace Furnishings segment are projected to decline at a low-to-mid single-digit rate year-over-year due to macroeconomic uncertainties[23] - Non-GAAP earnings per share for the full year are expected to increase by 10% or more for the third consecutive year, driven by margin expansion[24] - The company plans to continue focusing on market expansion and new product development to drive future growth[46] Cash Flow and Assets - Net cash flows from operating activities increased to $175.5 million for the nine months ended September 28, 2024, compared to $162.5 million for the same period last year, representing an 8.5% increase[42] - Total net sales for the nine months ended September 28, 2024, were $1,883.9 million, up from $1,754.2 million in the prior year, reflecting a growth of 7.4%[44] - Cash and cash equivalents at the end of the period increased to $34.3 million from $24.4 million year-over-year, marking a 40.5% increase[42] Liabilities and Equity - Total current assets as of September 28, 2024, were $561.7 million, an increase from $535.9 million as of December 30, 2023[39] - Total liabilities decreased to $1,066.4 million as of September 28, 2024, down from $1,167.0 million as of December 30, 2023[39] - HNI Corporation shareholders' equity increased to $846.6 million as of September 28, 2024, compared to $761.4 million as of December 30, 2023[39] Risks and Challenges - The company anticipates benefits and cost synergies from the acquisition of Kimball International, although specific future levels of demand remain uncertain due to macroeconomic conditions[35] - The corporation is facing risks including disruptions in the global supply chain and prolonged inflation, which may impact future performance[35] Capital Expenditures - Capital expenditures for the nine months were $43.2 million, down from $62.8 million in the prior year, indicating a reduction of 31.4%[44] Other Financial Metrics - Gross profit for the nine months ended September 30, 2023, was $773.0 million, up from $675.2 million in the prior year, reflecting a 14.5% increase[37] - Gross profit for the three months ended September 30, 2023, was $285.3 million, representing 40.1% of net sales[55] - The gross profit margin for the three months was 41.5%, slightly down from 42.5% in the previous year[53] - Payments of debt totaled $354.0 million for the nine months, compared to $304.3 million in the prior year, reflecting an increase of 16.3%[42]

Financial Performance - HNI Corporation reported net sales of $623.7 million for Q2 2024, a 10.7% increase from $563.5 million in Q2 2023[3][10][14]. - GAAP EPS for Q2 2024 was $0.75, a 44% increase year-over-year, while non-GAAP EPS reached a record $0.79, up 43.6% from $0.55[5][10][14]. - Operating income for Q2 2024 was $53.4 million, compared to a loss of $3.6 million in Q2 2023, marking a significant turnaround[10][14]. - Net income attributable to HNI Corporation for the three months ended June 29, 2024, was $36.0 million, compared to a net loss of $12.8 million for the same period in 2023[32]. - Net income for the six months ended June 29, 2024, was $53.7 million, compared to a loss of $11.3 million in the same period last year[37]. - Consolidated HNI reported a net income of $36.0 million for the three months ended June 29, 2024, with a diluted EPS of $0.75[48]. - For the three months ended July 1, 2023, Consolidated HNI reported a net loss of $12.8 million, with a diluted EPS of $(0.30)[50]. Segment Performance - Workplace Furnishings segment net sales increased 16.3% to $480.2 million, with operating income rising 242% to $54.3 million[15][19]. - Residential Building Products segment net sales decreased 4.6% to $143.5 million, but operating income increased 26.9% to $19.8 million[17][20]. - Workplace furnishings segment net sales increased by 16.3% to $920.0 million, while residential building products decreased by 11.5% to $291.7 million[40]. - The operating income for the Residential Building Products segment increased to $19.8 million for the three months ended June 29, 2024, up from $15.6 million in the prior year[53]. Growth Expectations - The company expects low-single digit revenue growth in Workplace Furnishings and mid-single digit growth in Residential Building Products for the second half of 2024[5][23]. - HNI Corporation anticipates record EPS for 2024, driven by profit transformation initiatives and synergies from the Kimball International acquisition[5][23]. - Full-year non-GAAP earnings per share are expected to increase strongly from 2023, reaching record levels, driven by margin expansion in both segments[26]. Cost Management and Savings - The gross profit margin expanded by 360 basis points to 41.9% in Q2 2024, attributed to improved productivity and the KII acquisition[10][14]. - The company has identified potential net savings of $70 to $75 million from ongoing initiatives, with $45 to $50 million expected to impact 2025 and 2026[5][23]. - The Corporation anticipates $70 to $75 million in savings from KII synergies and the ramp-up of its Mexico facility, with $45 to $50 million of these savings benefiting the 2025 to 2026 period[26]. Cash Flow and Assets - Net cash flows from operating activities were $47.0 million, an increase from $39.8 million in the previous year[37]. - The net cash flows from investing activities were $(26.9) million, a significant decrease from $(410.8) million in the prior year, indicating improved cash management[37]. - Total assets as of June 29, 2024, were $1,940.8 million, an increase from $1,928.8 million as of December 30, 2023[35]. - HNI Corporation's shareholders' equity increased to $787.8 million as of June 29, 2024, compared to $761.4 million as of December 30, 2023[35]. - The Corporation's total liabilities decreased to $1,152.7 million as of June 29, 2024, from $1,167.0 million as of December 30, 2023[35]. Capital Expenditures - Capital expenditures for the six months ended June 29, 2024, totaled $28.7 million, down from $41.2 million in the prior year[40]. - The company paid dividends of $32.1 million during the six months ended June 29, 2024, compared to $28.6 million in the same period last year[37]. Shareholder Information - The average number of common shares outstanding for the three months ended June 29, 2024, was 47.2 million, compared to 43.3 million for the same period in 2023[32]. - The average number of common shares outstanding (diluted) for Consolidated HNI was 48.2 million for the three months ended June 29, 2024[48].

Core Viewpoint - HNI has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive earnings outlook that could enhance its stock price [1][2]. Earnings Estimates and Business Outlook - The upgrade reflects an upward trend in earnings estimates, suggesting an improvement in HNI's underlying business [3][9]. - For the fiscal year ending December 2024, HNI is expected to earn $3.10 per share, representing a 17% increase from the previous year [9]. Zacks Rank System and Stock Performance - The Zacks Rank system effectively utilizes earnings estimate revisions to classify stocks, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - HNI's upgrade places it in the top 5% of Zacks-covered stocks based on estimate revisions, indicating potential for near-term stock price increases [5][10]. Institutional Investor Influence - Changes in earnings estimates significantly impact stock prices due to institutional investors using these estimates to calculate fair value, leading to buying or selling actions that affect stock movements [7].

What's Driving the Outperformance? For the current fiscal year, HNI is expected to post earnings of $3.10 per share on $2.65 billion in revenues. This represents a 16.98% change in EPS on an 8.92% change in revenues. For the next fiscal year, the company is expected to earn $3.62 per share on $2.75 billion in revenues. This represents a year-over-year change of 16.77% and 3.87%, respectively. HNI may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question ...

Based in Muscatine, HNI (HNI) is in the Business Services sector, and so far this year, shares have seen a price change of 12.65%. The maker of office furniture and fireplaces is currently shelling out a dividend of $0.33 per share, with a dividend yield of 2.8%. This compares to the Business - Office Products industry's yield of 3.05% and the S&P 500's yield of 1.57%. Looking at dividend growth, the company's current annualized dividend of $1.32 is up 3.1% from last year. Over the last 5 years, HNI has inc ...

Company Overview - HNI is headquartered in Muscatine and operates in the Business Services sector, specifically within the Business - Office Products industry [1] - The company has experienced a price change of 5.67% year-to-date and currently pays a dividend of $0.33 per share, resulting in a dividend yield of 2.99% [1] Dividend Analysis - HNI's current annualized dividend of $1.32 represents a 3.1% increase from the previous year [3] - Over the past five years, HNI has increased its dividend three times, averaging an annual increase of 1.40% [3] - The company's payout ratio stands at 45%, indicating that it distributes 45% of its trailing 12-month earnings per share as dividends [3] Investment Potential - HNI is recognized as an attractive dividend option and is rated with a Zacks Rank of 1 (Strong Buy), suggesting it is a compelling investment opportunity [4] - The Zacks Consensus Estimate for HNI's earnings in 2024 is projected at $3.10 per share, reflecting an expected earnings growth of 16.98% compared to the previous year [7]

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed b ...