hni-20210403

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM

10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

April 3, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:

1-14225

HNI Corporation

Iowa

42-0617510

(State of Incorporation)

(I.R.S. Employer No.)

600 East Second Street

P.O. Box 1109

Muscatine

Iowa

52761-0071

(

563

)

272-7400

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

HNI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Smaller reporting company

☐

Non-accelerated filer

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

Common Stock, $1 Par Value

Outstanding as of

April 3, 2021

43,552,458


HNI Corporation and Subsidiaries
Quarterly Report on Form 10-Q

Table of Contents

PART I. FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Statements of Comprehensive Income - Three Months Ended April 3, 2021 and March 28, 2020	3

	Condensed Consolidated Balance Sheets - April 3, 2021 and January 2, 2021	4

	Condensed Consolidated Statements of Equity - Three Months Ended April 3, 2021 and March 28, 2020	6

	Condensed Consolidated Statements of Cash Flows - Three Months Ended April 3, 2021 and March 28, 2020	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities - None	-

Item 4.	Mine Safety Disclosures - Not Applicable	-

Item 5.	Other Information - None	-

Item 6.	Exhibits	27

Signatures		28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


HNI Corporation and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (In thousands, except per share data)
(Unaudited)

	Three Months Ended
	April 3, 2021		March 28, 2020

Net sales	$	484,293	$	468,704
Cost of sales	304,347		292,686
Gross profit	179,946		176,018
Selling and administrative expenses	157,346		167,085

Impairment charges	—		32,661
Operating income (loss)	22,600		(23,728)
Interest expense, net	1,755		1,811
Income (loss) before income taxes	20,845		(25,539)
Income taxes	5,827		(1,643)
Net income (loss)	15,018		(23,896)
Less: Net loss attributable to non-controlling interest	(1)		(1)
Net income (loss) attributable to HNI Corporation	$	15,019	$	(23,895)

Average number of common shares outstanding – basic	43,163		42,628
Net income (loss) attributable to HNI Corporation per common share – basic	$	0.35	$	(0.56)
Average number of common shares outstanding – diluted	43,584		42,628
Net income (loss) attributable to HNI Corporation per common share – diluted	$	0.34	$	(0.56)


Foreign currency translation adjustments	$	(132)	$	(600)
Change in unrealized gains (losses) on marketable securities, net of tax	(100)		59

Change in derivative financial instruments, net of tax	263		(2,216)
Other comprehensive income (loss), net of tax	31		(2,757)
Comprehensive income (loss)	15,049		(26,653)
Less: Comprehensive loss attributable to non-controlling interest	(1)		(1)
Comprehensive income (loss) attributable to HNI Corporation	$	15,050	$	(26,652)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).


HNI Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In thousands)
(Unaudited)

	April 3, 2021		January 2, 2021
Assets
Current Assets:
Cash and cash equivalents	$	94,281	$	116,120
Short-term investments	1,776		1,687
Receivables	198,039		207,971
Allowance for doubtful accounts	(4,904)		(5,514)
Inventories	154,176		137,811

Prepaid expenses and other current assets	42,204		37,660
Total Current Assets	485,572		495,735

Property, Plant, and Equipment:
Land and land improvements	29,989		29,691
Buildings	294,760		293,708
Machinery and equipment	580,398		578,643
Construction in progress	20,460		17,750
	925,607		919,792
Less accumulated depreciation	562,717		553,835
Net Property, Plant, and Equipment	362,890		365,957

Right-of-use Finance Leases	10,119		6,095

Right-of-use Operating Leases	66,897		70,219

Goodwill and Other Intangible Assets	455,486		458,896

Other Assets	24,617		21,130

Total Assets	$	1,405,581	$	1,418,032

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).


HNI Corporation and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except par value)
(Unaudited)

	April 3, 2021		January 2, 2021
Liabilities and Equity
Current Liabilities:
Accounts payable and accrued expenses	$	367,072	$	413,638
Current maturities of long-term debt	1,261		841
Current maturities of other long-term obligations	3,731		2,990
Current lease obligations - finance	2,398		1,589
Current lease obligations - operating	20,195		19,970
Total Current Liabilities	394,657		439,028

Long-Term Debt	174,545		174,524



Long-Term Lease Obligations - Finance	7,677		4,516

Long-Term Lease Obligations - Operating	50,222		53,249

Other Long-Term Liabilities	84,895		81,264

Deferred Income Taxes	75,824		74,706

Equity:
HNI Corporation shareholders' equity:
Capital Stock:
Preferred stock - $1 par value, authorized 2,000 shares, no shares outstanding	—		—
Common stock - $1 par value, authorized 200,000 shares, outstanding:
April 3, 2021 – 43,552 shares; January 2, 2021 – 42,919 shares	43,552		42,919

Additional paid-in capital	63,447		38,659
Retained earnings