HNI (US:HNI)2025-05-07 11:32Financial Performance - HNI Corporation reported net sales of $599.8 million for Q1 2025, a 2.0% increase year-over-year[3]. - GAAP EPS for Q1 2025 was $0.29, down 22% from the previous year, while non-GAAP EPS increased by 19% to $0.44[5]. - The consolidated operating margin for Q1 2025 was 4.1% on a GAAP basis, a decrease of 90 basis points year-over-year, but non-GAAP operating margin improved to 5.3%, up 20 basis points[5]. - Net sales for the three months ended March 29, 2025, were $599.8 million, an increase of 2.9% compared to $588.0 million for the same period in 2024[32]. - Gross profit for the same period was $238.4 million, up from $232.8 million, reflecting a gross margin of approximately 39.7%[32]. - Operating income decreased to $24.4 million from $29.7 million, representing a decline of 17.7% year-over-year[32]. - Net income attributable to HNI Corporation was $13.9 million, down from $17.7 million, resulting in a diluted earnings per share of $0.29 compared to $0.37 in the prior year[32]. - Non-GAAP net income for the quarter was $21.1 million, resulting in an EPS of $0.44[44]. Segment Performance - Workplace Furnishings segment net sales increased slightly by 0.3% to $441.1 million, while operating income decreased by 31.4% to $18.0 million[15]. - Residential Building Products segment net sales grew by 7.1% to $158.7 million, with operating income rising by 16.9% to $25.0 million[17]. - The workplace furnishings segment reported net sales of $441.1 million, a slight increase from $439.8 million, while the residential building products segment saw a larger increase to $158.7 million from $148.2 million[39]. - Orders in the Workplace Furnishings segment were unchanged year-over-year, while Residential Building Products orders increased by 8%[23]. Future Outlook - The company anticipates mid-single digit net sales growth in Workplace Furnishings and low-to-mid single digit growth in Residential Building Products for 2025[23]. - HNI Corporation expects double-digit EPS growth for 2025, driven by synergies from the Kimball International acquisition and ramp-up of its Mexico facility[23]. Financial Position - The company reported a quarter-ending gross debt leverage of 1.3x, indicating a strong balance sheet[5]. - Total current assets increased slightly to $529.3 million from $524.5 million, with inventories rising to $205.0 million from $194.3 million[34]. - Long-term debt increased to $354.7 million from $294.3 million, indicating a rise in leverage[34]. - Capital expenditures for the three months ended March 29, 2025, were $16.3 million, compared to $11.2 million in the same period last year, reflecting increased investment in growth[39]. Restructuring and Charges - HNI Corporation incurred restructuring and impairment charges of $6.4 million in Q1 2025, primarily related to the HNI India business[13]. - Restructuring and impairment charges amounted to $6.4 million, significantly higher than $0.1 million in the prior year, impacting overall profitability[39]. - The company incurred restructuring charges of $1.5 million and impairment charges of $5.9 million during the current quarter[44]. Challenges and Risks - The company continues to face risks including supply chain disruptions and inflationary pressures, which may affect future performance[29]. - HNI Corporation's financial results reflect ongoing challenges in the Workplace Furnishings segment, particularly related to impairment and restructuring efforts[42].