HNI (US:HNI)2025-10-28 11:31Financial Performance - HNI Corporation reported net sales of $683.8 million for Q3 2025, a 1.7% increase year-over-year, with organic net sales up 2.6%[3][15] - GAAP diluted EPS was $0.88, down 10% YoY, while non-GAAP diluted EPS increased by 7% to $1.10[6][19] - The consolidated operating margin was 9.4% on a GAAP basis, contracting by 80 basis points, but expanded to 10.8% on a non-GAAP basis, reaching the highest level for a third quarter[6][12] - HNI Corporation reported net sales of $683.8 million for the three months ended September 27, 2025, an increase of 1.9% compared to $672.2 million for the same period in 2024[37] - Operating income decreased to $64.6 million for the three months ended September 27, 2025, down from $68.9 million in the same period last year, reflecting a decline of 4.9%[37] - Net income attributable to HNI Corporation for the three months ended September 27, 2025, was $41.2 million, a decrease of 13.9% from $47.5 million in the prior year[37] - Operating income for the three months ended September 27, 2025, was $64.6 million, down from $68.9 million in the previous year, indicating a decrease of 3.3%[44] - The company reported a net income of $41.2 million for the three months ended September 27, 2025, with an EPS of $0.88, compared to $47.5 million and $0.98 EPS in the prior year[50] Segment Performance - Workplace Furnishings segment net sales increased by 2.3% to $516.9 million, with organic net sales growth of 3.5%[20] - Residential Building Products segment net sales decreased by 0.1% to $166.9 million, with slight growth in remodel-retrofit sales offsetting declines in new construction[23] - Total operating income for Workplace Furnishings increased to $62.5 million, up 8.2% from $57.7 million year-over-year[51] - Non-GAAP operating income for Workplace Furnishings rose to $63.5 million, reflecting a 5.8% increase compared to $60.0 million in the previous year[51] - Operating income as reported (GAAP) for Residential Building Products was $30.0 million, a slight increase of 0.3% from $29.9 million year-over-year[51] - Non-GAAP operating income for Residential Building Products decreased to $30.0 million, down 3.3% from $31.0 million in the previous year[51] - The percentage of net sales for Workplace Furnishings operating income (GAAP) improved to 12.1% from 11.4% year-over-year[51] - The percentage of net sales for Residential Building Products operating income (GAAP) increased to 18.0% from 17.9% year-over-year[51] Cash Flow and Capital Expenditures - The company reported net cash flows from operating activities of $198.9 million for the nine months ended September 27, 2025, compared to $175.5 million for the same period in 2024[42] - HNI Corporation's capital expenditures for the nine months ended September 27, 2025, were $49.6 million, an increase from $41.2 million in the prior year[42] - Capital expenditures for the three months ended September 27, 2025, totaled $19.6 million, compared to $14.5 million in the prior year, marking a 35.2% increase[44] Debt and Financial Outlook - The corporation reduced debt by $120 million during the quarter, resulting in a gross debt leverage of 0.9x[11] - The outlook for 2025 reflects expectations for mid-teens percent diluted non-GAAP EPS growth, with elevated earnings growth visibility through 2026[23][25] - Significant savings from the Kimball International acquisition and ramp-up of the Mexico facility are projected to contribute $0.75 to $0.80 to diluted non-GAAP EPS in 2025-2026[6][23] Acquisitions and Restructuring - The Steelcase acquisition is anticipated to close before the end of 2025, expected to enhance capabilities and customer value[11][26] - The company is currently undergoing restructuring and has incurred $0.8 million in restructuring charges for the three months ended September 27, 2025[44] - Restructuring charges for Workplace Furnishings were $1.0 million, down from $2.3 million in the previous year[51] - Restructuring charges for Residential Building Products were $1.1 million in the previous year, with no charges reported this year[51] Assets and Liabilities - HNI Corporation's total assets decreased to $1,843.0 million as of September 27, 2025, down from $1,875.1 million as of December 28, 2024[39] - Total liabilities decreased to $1,007.1 million as of September 27, 2025, compared to $1,034.7 million as of December 28, 2024[39]