COVER PAGE
COVER PAGE | 9 Months Ended |
Sep. 28, 2019shares | |
Cover page. | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 28, 2019 |
Document Transition Report | false |
Entity File Number | 1-14225 |
Entity Registrant Name | HNI Corporation |
Entity Incorporation, State or Country Code | IA |
Entity Tax Identification Number | 42-0617510 |
Entity Address, Address Line One | 600 East Second Street |
Entity Address, Address Line Two | P.O. Box 1109 |
Entity Address, City or Town | Muscatine |
Entity Address, State or Province | IA |
Entity Address, Postal Zip Code | 52761-0071 |
City Area Code | 563 |
Local Phone Number | 272-7400 |
Title of 12(b) Security | Common Stock |
Trading Symbol | HNI |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 42,823,501 |
Entity Central Index Key | 0000048287 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --12-28 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 625,386 | $ 611,120 | $ 1,630,868 | $ 1,659,803 |
Cost of sales | 387,715 | 377,789 | 1,030,993 | 1,048,683 |
Gross profit | 237,671 | 233,331 | 599,875 | 611,120 |
Selling and administrative expenses | 176,731 | 179,577 | 511,080 | 524,445 |
Restructuring and impairment charges | 284 | 128 | 1,214 | 2,303 |
Operating income | 60,656 | 53,626 | 87,581 | 84,372 |
Interest expense, net | 2,205 | 2,522 | 6,795 | 7,375 |
Income before income taxes | 58,451 | 51,104 | 80,786 | 76,997 |
Income taxes | 12,375 | 11,197 | 17,878 | 16,033 |
Net income | 46,076 | 39,907 | 62,908 | 60,964 |
Less: Net loss attributable to non-controlling interest | (2) | 0 | (2) | (50) |
Net income attributable to HNI Corporation | $ 46,078 | $ 39,907 | $ 62,910 | $ 61,014 |
Average number of common shares outstanding – basic (in shares) | 42,899 | 43,823 | 43,217 | 43,616 |
Net income attributable to HNI Corporation per common share – basic (in dollars per share) | $ 1.07 | $ 0.91 | $ 1.46 | $ 1.40 |
Average number of common shares outstanding – diluted (in shares) | 43,186 | 44,679 | 43,620 | 44,349 |
Net income attributable to HNI Corporation per common share – diluted (in dollars per share) | $ 1.07 | $ 0.89 | $ 1.44 | $ 1.38 |
Foreign currency translation adjustments | $ (1,035) | $ (817) | $ (406) | $ (1,944) |
Change in unrealized gains (losses) on marketable securities, net of tax | 36 | (6) | 252 | (99) |
Change in pension and post-retirement liability, net of tax | 0 | 0 | (1,185) | 0 |
Change in derivative financial instruments, net of tax | (477) | (2,112) | ||
Change in derivative financial instruments, net of tax | 106 | 1,459 | ||
Other comprehensive loss, net of tax | (1,476) | (717) | (3,451) | (584) |
Comprehensive income | 44,600 | 39,190 | 59,457 | 60,380 |
Less: Comprehensive loss attributable to non-controlling interest | (2) | 0 | (2) | (50) |
Comprehensive income attributable to HNI Corporation | $ 44,602 | $ 39,190 | $ 59,459 | $ 60,430 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 53,013 | $ 76,819 |
Short-term investments | 848 | 1,327 |
Receivables | 271,960 | 255,207 |
Inventories | 181,922 | 157,178 |
Prepaid expenses and other current assets | 36,824 | 41,352 |
Total Current Assets | 544,567 | 531,883 |
Property, Plant, and Equipment: | ||
Land and land improvements | 29,306 | 28,377 |
Buildings | 292,902 | 290,263 |
Machinery and equipment | 574,130 | 565,884 |
Construction in progress | 22,046 | 28,443 |
Property plant and equipment, at cost | 918,384 | 912,967 |
Less accumulated depreciation | 538,303 | 528,034 |
Net Property, Plant, and Equipment | 380,081 | 384,933 |
Right-of-use Operating / Finance Leases | 74,244 | |
Goodwill and Other Intangible Assets | 449,288 | 463,290 |
Deferred Income Taxes | 286 | 1,569 |
Other Assets | 22,010 | 20,169 |
Total Assets | 1,470,476 | 1,401,844 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 435,103 | 428,865 |
Current maturities of long-term debt | 1,440 | 679 |
Current maturities of other long-term obligations | 1,876 | 4,764 |
Current lease obligations - operating / finance | 21,007 | |
Total Current Liabilities | 459,426 | 434,308 |
Long-Term Debt | 239,418 | 249,355 |
Long-Term Lease Obligations - Operating / Finance | 61,143 | |
Other Long-Term Liabilities | 64,356 | 72,767 |
Deferred Income Taxes | 85,788 | 82,155 |
Capital Stock: | ||
Preferred stock - $1 par value, authorized 2,000 shares, no shares outstanding | 0 | 0 |
Common stock - $1 par value, authorized 200,000 shares, outstanding 42,875 shares at September 28, 2019 and 43,582 shares at December 29, 2018 | 42,824 | 43,582 |
Additional paid-in capital | 18,534 | 18,041 |
Retained earnings | 505,714 | 504,909 |
Accumulated other comprehensive income (loss) | (7,050) | (3,599) |
Total HNI Corporation shareholders' equity | 560,022 | 562,933 |
Non-controlling interest | 323 | 326 |
Total Equity | 560,345 | 563,259 |
Total Liabilities and Equity | $ 1,470,476 | $ 1,401,844 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 28, 2019 | Dec. 29, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares outstanding (in shares) | 42,824,000 | 43,582,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest |
Beginning balance at Dec. 30, 2017 | $ 514,577 | $ 43,354 | $ 7,029 | $ 467,296 | $ (3,611) | $ 509 |
Comprehensive income: | ||||||
Net income (loss) | 60,964 | 61,014 | (50) | |||
Other comprehensive income (loss), net of tax | (584) | (584) | ||||
Change in ownership of non-controlling interest | (41) | 41 | ||||
Cash dividends | (38,201) | (38,201) | ||||
Common shares – treasury: | ||||||
Shares purchased | (14,884) | (369) | (9,879) | (4,636) | ||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 31,202 | 835 | 30,367 | |||
Ending balance at Sep. 29, 2018 | 553,074 | 43,820 | 27,517 | 485,432 | (4,195) | 500 |
Beginning balance at Jun. 30, 2018 | 525,294 | 43,736 | 26,077 | 458,458 | (3,477) | 500 |
Comprehensive income: | ||||||
Net income (loss) | 39,907 | 39,907 | 0 | |||
Other comprehensive income (loss), net of tax | (717) | (717) | ||||
Cash dividends | (12,933) | (12,933) | ||||
Common shares – treasury: | ||||||
Shares purchased | (6,921) | (163) | (6,758) | |||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 8,445 | 247 | 8,198 | |||
Ending balance at Sep. 29, 2018 | 553,074 | 43,820 | 27,517 | 485,432 | (4,195) | 500 |
Beginning balance at Dec. 29, 2018 | 563,259 | 43,582 | 18,041 | 504,909 | (3,599) | 326 |
Comprehensive income: | ||||||
Net income (loss) | 62,908 | 62,910 | (2) | |||
Other comprehensive income (loss), net of tax | (2,712) | (2,712) | ||||
Reclassification of Stranded Tax Effects (ASU 2018-02) | 0 | 739 | (739) | |||
Cash dividends | (39,164) | (39,164) | ||||
Common shares – treasury: | ||||||
Shares purchased | (64,877) | (1,797) | (36,401) | (26,679) | ||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 37,932 | 1,039 | 36,893 | |||
Ending balance at Sep. 28, 2019 | 560,345 | 42,824 | 18,534 | 505,714 | (7,050) | 323 |
Beginning balance at Jun. 29, 2019 | 529,509 | 42,875 | 17,364 | 474,519 | (5,574) | 325 |
Comprehensive income: | ||||||
Net income (loss) | 46,076 | 46,078 | (2) | |||
Other comprehensive income (loss), net of tax | (1,476) | (1,476) | ||||
Cash dividends | (13,088) | (13,088) | ||||
Common shares – treasury: | ||||||
Shares purchased | (7,191) | (221) | (5,175) | (1,795) | ||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 6,515 | 170 | 6,345 | |||
Ending balance at Sep. 28, 2019 | $ 560,345 | $ 42,824 | $ 18,534 | $ 505,714 | $ (7,050) | $ 323 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends (in dollars per share) | $ 0.305 | $ 0.295 | $ 0.905 | $ 0.875 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Net Cash Flows From (To) Operating Activities: | ||
Net income | $ 62,908 | $ 60,964 |
Non-cash items included in net income: | ||
Depreciation and amortization | 57,838 | 55,887 |
Other post-retirement and post-employment benefits | 1,106 | 1,325 |
Stock-based compensation | 5,408 | 6,215 |
Operating / finance lease interest and amortization | 17,252 | |
Deferred income taxes | 4,798 | 2,733 |
Loss on sale and retirement of long-lived assets, net | 1,609 | 1,283 |
Other – net | 2,864 | 2,314 |
Net decrease in operating assets and liabilities, net of divestitures | (28,359) | (16,533) |
Increase (decrease) in other liabilities | (9,802) | 849 |
Net cash flows from (to) operating activities | 115,622 | 115,037 |
Net Cash Flows From (To) Investing Activities: | ||
Capital expenditures | (46,093) | (39,887) |
Proceeds from sale of property, plant, and equipment | 247 | 22,686 |
Capitalized software | (4,098) | (7,092) |
Acquisition spending, net of cash acquired | 0 | (2,850) |
Purchase of investments | (6,140) | (2,471) |
Sales or maturities of investments | 3,889 | 2,375 |
Other – net | 2,327 | 1,135 |
Net cash flows from (to) investing activities | (49,868) | (26,104) |
Net Cash Flows From (To) Financing Activities: | ||
Payments of long-term debt | (125,039) | (352,795) |
Proceeds from long-term debt | 115,775 | 322,755 |
Dividends paid | (39,164) | (38,201) |
Purchase of HNI Corporation common stock | (65,106) | (16,043) |
Proceeds from sales of HNI Corporation common stock | 22,338 | 15,896 |
Other – net | 1,636 | (155) |
Net cash flows from (to) financing activities | (89,560) | (68,543) |
Net increase (decrease) in cash and cash equivalents | (23,806) | 20,390 |
Cash and cash equivalents at beginning of period | 76,819 | 23,348 |
Cash and cash equivalents at end of period | $ 53,013 | $ 43,738 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The December 29, 2018 consolidated balance sheet included in this Form 10-Q was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the nine -month period ended September 28, 2019 are not necessarily indicative of the results expected for the fiscal year ending December 28, 2019 . For further information, refer to the consolidated financial statements and accompanying notes included in HNI Corporation's (the "Corporation") Annual Report on Form 10-K for the fiscal year ended December 29, 2018 . Certain reclassifications have been made within the interim financial information to conform to the current presentation. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Disaggregation of Revenue Revenue from contracts with customers disaggregated by sales channel and by segment is as follows (in thousands): Three Months Ended Nine Months Ended Segment September 28, September 29, September 28, September 29, Supplies-driven channel Office furniture $ 260,359 $ 265,971 $ 649,380 $ 680,656 Contract channel Office furniture 224,396 205,716 598,398 595,824 Hearth Hearth products 140,631 139,433 383,090 383,323 Net sales $ 625,386 $ 611,120 $ 1,630,868 $ 1,659,803 The majority of revenue presented as "Net sales" in the Condensed Consolidated Statements of Comprehensive Income is the result of contracts with customers. All other sources of revenue are not material to the Corporation's results of operations. Sales by channel type are subject to similar economic factors and market conditions regardless of the channel under which the product is sold. See “Note 18. Reportable Segment Information” in the Notes to Condensed Consolidated Financial Statements for further information about operating segments. Contract Assets and Contract Liabilities In addition to trade receivables, the Corporation has contract assets consisting of funds paid to certain office furniture dealers in exchange for their multi-year commitment to market and sell the Corporation’s products. These contract assets are amortized over the term of the contracts and recognized as a reduction of revenue. The Corporation has contract liabilities consisting of customer deposits and rebate and marketing program liabilities. Contract assets and contract liabilities were as follows (in thousands): September 28, December 29, Trade receivables (1) $ 275,738 $ 259,075 Other contract assets (current) (2) $ 837 $ 529 Other contract assets (long-term) (3) $ 2,865 $ 2,188 Contract liabilities (4) $ 44,463 $ 44,858 The index below indicates the line item in the Condensed Consolidated Balance Sheets where contract assets and contract liabilities are reported: (1) "Receivables" (2) "Prepaid expenses and other current assets" (3) "Other Assets" (4) "Accounts payable and accrued expenses" Changes in other contract asset and contract liability balances during the nine months ended September 28, 2019 were as follows (in thousands): Contract assets increase (decrease) Contract liabilities (increase) decrease Contract assets recognized $ 1,313 $ — Reclassification of contract assets to contra revenue (328 ) — Contract liabilities recognized and recorded to contra revenue as a result of performance obligations satisfied — (110,789 ) Contract liabilities paid — 109,592 Cash received in advance and not recognized as revenue — (49,962 ) Reclassification of cash received in advance to revenue as a result of performance obligations satisfied — 51,554 Net change $ 985 $ 395 Contract liabilities for customer deposits paid to the Corporation prior to the satisfaction of performance obligations are recognized as revenue upon completion of the performance obligations. The amount of revenue recognized during the three and nine months ended September 28, 2019 that was included in the December 29, 2018 contract liabilities balance was $0.0 million and $8.3 million , respectively. Performance Obligations The Corporation recognizes revenue for sales of office furniture and hearth products at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment of the product. In certain circumstances, transfer of control to the customer does not occur until the goods are received by the customer or upon installation and/or customer acceptance, depending on the terms of the underlying contracts. Contracts typically have a duration of less than one year and normally do not include a significant financing component. Generally, payment is due within 30 days of invoicing. The Corporation's backlog orders are typically cancelable for a period of time and almost all contracts have an original duration of one year or less. As a result, the Corporation has elected the practical expedient permitted in the revenue accounting standard not to disclose the unsatisfied performance obligation as of September 28, 2019. The backlog is typically fulfilled within a quarter. Significant Judgments The amount of consideration the Corporation receives and revenue recognized varies with changes in rebate and marketing program incentives, as well as early pay discounts, offered to customers. The Corporation uses significant judgment throughout the year in estimating the reduction in net sales driven by variable consideration for rebate and marketing programs. Judgments made include expected sales levels and utilization of funds. However, this judgment factor is significantly reduced at the end of each year when sales volumes and the impact to rebate and marketing programs are known and recorded as the programs typically end near the Corporation's fiscal year end. |
Restructuring and Impairment Ch
Restructuring and Impairment Charges | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Impairment Charges | Restructuring and Impairment Charges Restructuring costs recorded in the Condensed Consolidated Statements of Comprehensive Income are as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Restructuring and impairment charges $ 284 $ 128 $ 1,214 $ 2,303 Restructuring costs in 2019 related to a structural realignment in the office furniture segment and were primarily comprised of severance costs. Restructuring and impairment costs in 2018 were primarily incurred as part of the previously announced closure of the hearth manufacturing facility in Paris, Kentucky and the office furniture manufacturing facility in Orleans, Indiana. The accrued restructuring expenses are expected to be paid in the next twelve months and are reflected in "Accounts payable and accrued expenses" in the Condensed Consolidated Balance Sheets. The following is a summary of changes in restructuring accruals (in thousands): Severance Costs Facility Exit Costs & Other Total Restructuring allowance as of December 29, 2018 $ 136 $ 150 $ 286 Restructuring charges 899 315 1,214 Cash payments (640 ) (99 ) (739 ) Restructuring allowance as of September 28, 2019 $ 395 $ 366 $ 761 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 28, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures As part of the Corporation's ongoing business strategy, it continues to acquire and divest small office furniture dealerships, for which the impact is not material to the Corporation's financial statements. |
Inventories
Inventories | 9 Months Ended |
Sep. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The Corporation values its inventory at the lower of cost or net realizable value with approximately 73 percent valued by the last-in, first-out ("LIFO") costing method. Inventories included in the Condensed Consolidated Balance Sheets consisted of the following (in thousands): September 28, December 29, Finished products $ 138,767 $ 97,398 Materials and work in process 77,269 94,161 LIFO allowance (34,114 ) (34,381 ) Total inventories $ 181,922 $ 157,178 |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases | Leases The Corporation implemented ASU No. 2016-02, Leases (Topic 842) , at the beginning of fiscal 2019 using the modified-retrospective transition approach. The new standard requires lessees to recognize most leases, including operating leases, on-balance sheet via a right of use ("ROU") asset and lease liability. The Corporation selected a technology tool to assist with the accounting and disclosure requirements of the new standard. All necessary changes required by the new standard, including those to the Corporation's accounting policies, business process, systems, controls, and disclosures, were identified and implemented as of the first quarter 2019. Implementation of ASU No. 2016-02 increased retained earnings by $3.0 million . This included an increase of $3.3 million driven by the recognition of the remaining deferred gain on a 2018 sale-leaseback directly into retained earnings. An offsetting decrease of $0.3 million was driven by the calculation of beginning ROU assets and lease liabilities. The Corporation recognized $73.8 million in ROU assets and $82.0 million in lease liabilities as a result of the implementation of this standard. The Corporation leases certain showrooms, office space, manufacturing facilities, distribution centers, retail stores and equipment and determines if an arrangement is a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets; expense for these leases is recognized on a straight-line basis over the lease term. As the rates implicit in its leases cannot be readily determined, the Corporation uses a secured incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Corporation uses separate discount rates for its U.S. operations and overseas operations. Certain real estate leases include one or more options to renew with renewal terms that can extend the lease term from one to ten years . The exercise of lease renewal options is at the Corporation's sole discretion. Certain real estate leases include an option to terminate the lease term earlier than the specified lease term for a fee. These options are not included as part of the lease term unless they are reasonably certain to be exercised. Many of the Corporation's real estate lease agreements include periods of rent holidays and payments that escalate over the lease term by specified amounts. While not significant, certain equipment leases have variable lease payments based on machine hours and certain real estate leases have rate changes based on the Consumer Price Index. The Corporation's lease agreements do not contain any material residual value guarantees. The Corporation has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. On occasion, the Corporation rents or subleases certain real estate to third parties. This sublease portfolio consists mainly of operating leases for office furniture showrooms and is not significant. Leases included in the Condensed Consolidated Balance Sheet consisted of the following (in thousands): Classification September 28, Assets Right-of-use operating leases $ 72,087 Right-of-use finance leases 2,157 Total Right-of-use operating / finance leases $ 74,244 Liabilities Current lease obligations - operating $ 20,506 Current lease obligations - finance 501 Total Current lease obligations - operating / finance 21,007 Long-term lease obligations - operating 59,474 Long-term lease obligations - finance 1,669 Total Long-term lease obligations - operating / finance 61,143 Total lease obligations - operating / finance $ 82,150 Approximately 85 percent of the value of the leased assets is for real estate. The remaining 15 percent of the value of the leased assets is for equipment. Lease costs included in the Condensed Consolidated Statements of Comprehensive Income consisted of the following (in thousands): Three Months Ended Nine Months Ended Classification September 28, September 28, Operating lease costs Fixed Cost of sales $ 438 $ 1,366 Selling and administrative expenses 5,913 18,212 Short-term / variable Cost of sales 317 635 Selling and administrative expenses 385 807 Finance lease costs Amortization Cost of sales, selling and administrative, and interest expense 154 307 Less: Sublease income 48 133 Total lease costs $ 7,159 $ 21,194 Maturity of lease liabilities as of September 28, 2019 is as follows (in thousands): Operating Leases (a) Finance Leases (a) Total 2019 (remaining portion of year) $ 6,590 $ 143 $ 6,733 2020 23,521 593 24,114 2021 16,792 564 17,356 2022 11,332 488 11,820 2023 9,388 436 9,824 Thereafter 22,531 112 22,643 Total lease payments 90,154 2,336 92,490 Less: Interest 10,177 163 10,340 Present value of lease liabilities $ 79,977 $ 2,173 $ 82,150 (a) At this time there are no operating or finance lease options to extend lease terms that are reasonably certain of being exercised, no r are there any legally binding minimum lease payments for operating or finance leases signed, but not yet commenced. The following table summarizes the weighted-average discount rates and weighted-average remaining lease terms for operating and finance leases as of September 28, 2019 : Weighted-Average Discount Rate (percent) Weighted-Average Remaining Lease Term (years) Operating leases 4.2 % 5.5 Finance leases 3.6 % 4.3 The following table summarizes cash paid for amounts included in the measurements of lease liabilities and the leased assets obtained in exchange for new operating and finance lease liabilities (in thousands): Nine Months Ended September 28, Cash paid for amounts included in the measurements of lease liabilities: Operating cash flows from operating / finance leases $ 20,072 Financing cash flows from finance leases $ 262 Leased assets obtained in exchange for new operating / finance lease liabilities $ 18,387 Accounting Policies and Practical Expedients Elected The Corporation elected to use the modified-retrospective method of adopting ASU 2016-02. It has been applied to all leases active on or after December 30, 2018, the start of the Corporation's fiscal year. The Corporation elected the following practical expedients as a result of adopting ASU 2016-02: • The Corporation has made an accounting election by class of underlying assets to not separate non-lease components of a contract from the lease components to which they relate for all classes of assets except for embedded leases. • The Corporation has elected not to restate prior period financial statements for the effects of the new standard. Required ASC 840 disclosures for periods prior to 2019 have been provided. • The Corporation has elected not to use hindsight in determining the lease term and in assessing the likelihood that a lessee purchase option will be exercised. • The Corporation has elected for all asset classes to not recognize ROU assets and lease liabilities for leases that at the acquisition date have a remaining lease term of twelve months or less. Presented below are the final disclosures utilizing ASC 840 treatment which was provided in the Corporation's Annual Report on Form 10-K for the fiscal year ended December 29, 2018 : Commitments for minimum rentals under non-cancelable leases were as follows (in thousands): Operating Leases 2019 $ 24,387 2020 18,250 2021 13,324 2022 9,082 2023 6,228 Thereafter 10,469 Total minimum lease payments $ 81,740 There were no capitalized leases as of December 29, 2018 and December 30, 2017 . Rent expense under ASC 840 was as follows (in thousands): 2018 2017 2016 Rent expense $ 31,027 $ 32,158 $ 35,288 There was no contingent rent expense under operating leases for the years 2018 , 2017 , and 2016 . As part of the Corporation's continued efforts to drive efficiency and simplification, the Corporation entered into a sale-leaseback transaction in the first quarter of 2018, selling a manufacturing facility and subsequently leasing back a portion of the facility for a term of 10 years . The net proceeds from the sale of the facility of $16.9 million were reflected in "Proceeds from sale and license of property, plant, equipment, and intangibles" in the Consolidated Statements of Cash Flows in 2018. In accordance with ASC 840, the $5.1 million gain on the sale of the facility was deferred and was being amortized as a reduction to rent expense evenly over the term of the lease. In accordance with the ASU No. 2016-02 adoption, the remaining unamortized deferred gain related to the sale-leaseback as of December 29, 2018 was recognized directly in "Retained earnings" in the Condensed Consolidated Balance Sheets in the first quarter of 2019 as a cumulative-effect adjustment as the Corporation transferred control of the asset. |
Leases | Leases The Corporation implemented ASU No. 2016-02, Leases (Topic 842) , at the beginning of fiscal 2019 using the modified-retrospective transition approach. The new standard requires lessees to recognize most leases, including operating leases, on-balance sheet via a right of use ("ROU") asset and lease liability. The Corporation selected a technology tool to assist with the accounting and disclosure requirements of the new standard. All necessary changes required by the new standard, including those to the Corporation's accounting policies, business process, systems, controls, and disclosures, were identified and implemented as of the first quarter 2019. Implementation of ASU No. 2016-02 increased retained earnings by $3.0 million . This included an increase of $3.3 million driven by the recognition of the remaining deferred gain on a 2018 sale-leaseback directly into retained earnings. An offsetting decrease of $0.3 million was driven by the calculation of beginning ROU assets and lease liabilities. The Corporation recognized $73.8 million in ROU assets and $82.0 million in lease liabilities as a result of the implementation of this standard. The Corporation leases certain showrooms, office space, manufacturing facilities, distribution centers, retail stores and equipment and determines if an arrangement is a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets; expense for these leases is recognized on a straight-line basis over the lease term. As the rates implicit in its leases cannot be readily determined, the Corporation uses a secured incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Corporation uses separate discount rates for its U.S. operations and overseas operations. Certain real estate leases include one or more options to renew with renewal terms that can extend the lease term from one to ten years . The exercise of lease renewal options is at the Corporation's sole discretion. Certain real estate leases include an option to terminate the lease term earlier than the specified lease term for a fee. These options are not included as part of the lease term unless they are reasonably certain to be exercised. Many of the Corporation's real estate lease agreements include periods of rent holidays and payments that escalate over the lease term by specified amounts. While not significant, certain equipment leases have variable lease payments based on machine hours and certain real estate leases have rate changes based on the Consumer Price Index. The Corporation's lease agreements do not contain any material residual value guarantees. The Corporation has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. On occasion, the Corporation rents or subleases certain real estate to third parties. This sublease portfolio consists mainly of operating leases for office furniture showrooms and is not significant. Leases included in the Condensed Consolidated Balance Sheet consisted of the following (in thousands): Classification September 28, Assets Right-of-use operating leases $ 72,087 Right-of-use finance leases 2,157 Total Right-of-use operating / finance leases $ 74,244 Liabilities Current lease obligations - operating $ 20,506 Current lease obligations - finance 501 Total Current lease obligations - operating / finance 21,007 Long-term lease obligations - operating 59,474 Long-term lease obligations - finance 1,669 Total Long-term lease obligations - operating / finance 61,143 Total lease obligations - operating / finance $ 82,150 Approximately 85 percent of the value of the leased assets is for real estate. The remaining 15 percent of the value of the leased assets is for equipment. Lease costs included in the Condensed Consolidated Statements of Comprehensive Income consisted of the following (in thousands): Three Months Ended Nine Months Ended Classification September 28, September 28, Operating lease costs Fixed Cost of sales $ 438 $ 1,366 Selling and administrative expenses 5,913 18,212 Short-term / variable Cost of sales 317 635 Selling and administrative expenses 385 807 Finance lease costs Amortization Cost of sales, selling and administrative, and interest expense 154 307 Less: Sublease income 48 133 Total lease costs $ 7,159 $ 21,194 Maturity of lease liabilities as of September 28, 2019 is as follows (in thousands): Operating Leases (a) Finance Leases (a) Total 2019 (remaining portion of year) $ 6,590 $ 143 $ 6,733 2020 23,521 593 24,114 2021 16,792 564 17,356 2022 11,332 488 11,820 2023 9,388 436 9,824 Thereafter 22,531 112 22,643 Total lease payments 90,154 2,336 92,490 Less: Interest 10,177 163 10,340 Present value of lease liabilities $ 79,977 $ 2,173 $ 82,150 (a) At this time there are no operating or finance lease options to extend lease terms that are reasonably certain of being exercised, no r are there any legally binding minimum lease payments for operating or finance leases signed, but not yet commenced. The following table summarizes the weighted-average discount rates and weighted-average remaining lease terms for operating and finance leases as of September 28, 2019 : Weighted-Average Discount Rate (percent) Weighted-Average Remaining Lease Term (years) Operating leases 4.2 % 5.5 Finance leases 3.6 % 4.3 The following table summarizes cash paid for amounts included in the measurements of lease liabilities and the leased assets obtained in exchange for new operating and finance lease liabilities (in thousands): Nine Months Ended September 28, Cash paid for amounts included in the measurements of lease liabilities: Operating cash flows from operating / finance leases $ 20,072 Financing cash flows from finance leases $ 262 Leased assets obtained in exchange for new operating / finance lease liabilities $ 18,387 Accounting Policies and Practical Expedients Elected The Corporation elected to use the modified-retrospective method of adopting ASU 2016-02. It has been applied to all leases active on or after December 30, 2018, the start of the Corporation's fiscal year. The Corporation elected the following practical expedients as a result of adopting ASU 2016-02: • The Corporation has made an accounting election by class of underlying assets to not separate non-lease components of a contract from the lease components to which they relate for all classes of assets except for embedded leases. • The Corporation has elected not to restate prior period financial statements for the effects of the new standard. Required ASC 840 disclosures for periods prior to 2019 have been provided. • The Corporation has elected not to use hindsight in determining the lease term and in assessing the likelihood that a lessee purchase option will be exercised. • The Corporation has elected for all asset classes to not recognize ROU assets and lease liabilities for leases that at the acquisition date have a remaining lease term of twelve months or less. Presented below are the final disclosures utilizing ASC 840 treatment which was provided in the Corporation's Annual Report on Form 10-K for the fiscal year ended December 29, 2018 : Commitments for minimum rentals under non-cancelable leases were as follows (in thousands): Operating Leases 2019 $ 24,387 2020 18,250 2021 13,324 2022 9,082 2023 6,228 Thereafter 10,469 Total minimum lease payments $ 81,740 There were no capitalized leases as of December 29, 2018 and December 30, 2017 . Rent expense under ASC 840 was as follows (in thousands): 2018 2017 2016 Rent expense $ 31,027 $ 32,158 $ 35,288 There was no contingent rent expense under operating leases for the years 2018 , 2017 , and 2016 . As part of the Corporation's continued efforts to drive efficiency and simplification, the Corporation entered into a sale-leaseback transaction in the first quarter of 2018, selling a manufacturing facility and subsequently leasing back a portion of the facility for a term of 10 years . The net proceeds from the sale of the facility of $16.9 million were reflected in "Proceeds from sale and license of property, plant, equipment, and intangibles" in the Consolidated Statements of Cash Flows in 2018. In accordance with ASC 840, the $5.1 million gain on the sale of the facility was deferred and was being amortized as a reduction to rent expense evenly over the term of the lease. In accordance with the ASU No. 2016-02 adoption, the remaining unamortized deferred gain related to the sale-leaseback as of December 29, 2018 was recognized directly in "Retained earnings" in the Condensed Consolidated Balance Sheets in the first quarter of 2019 as a cumulative-effect adjustment as the Corporation transferred control of the asset. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and other intangible assets included in the Condensed Consolidated Balance Sheets consisted of the following (in thousands): September 28, December 29, Goodwill $ 270,781 $ 270,788 Definite-lived intangible assets 149,732 163,714 Indefinite-lived intangible assets 28,775 28,788 Total goodwill and other intangible assets $ 449,288 $ 463,290 Goodwill The changes in the carrying amount of goodwill, by reporting segment, are as follows (in thousands): Office Furniture Hearth Products Total Balance as of December 29, 2018 Goodwill $ 128,645 $ 186,662 $ 315,307 Accumulated impairment losses (44,376 ) (143 ) (44,519 ) Net goodwill balance as of December 29, 2018 84,269 186,519 270,788 Foreign currency translation adjustment (7 ) — (7 ) Balance as of September 28, 2019 Goodwill 128,638 186,662 315,300 Accumulated impairment losses (44,376 ) (143 ) (44,519 ) Net goodwill balance as of September 28, 2019 $ 84,262 $ 186,519 $ 270,781 Definite-lived intangible assets The table below summarizes amortizable definite-lived intangible assets, which are reflected in "Goodwill and Other Intangible Assets" in the Condensed Consolidated Balance Sheets (in thousands): September 28, 2019 December 29, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Patents $ 40 $ 40 $ — $ 40 $ 34 $ 6 Software 174,550 63,097 111,453 170,274 49,561 120,713 Trademarks and trade names 7,564 3,216 4,348 7,564 2,721 4,843 Customer lists and other 103,803 69,872 33,931 103,840 65,688 38,152 Net definite-lived intangible assets $ 285,957 $ 136,225 $ 149,732 $ 281,718 $ 118,004 $ 163,714 Amortization expense is reflected in "Selling and administrative expenses" in the Condensed Consolidated Statements of Comprehensive Income and was as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Capitalized software $ 4,479 $ 4,290 $ 13,686 $ 12,734 Other definite-lived intangibles $ 1,571 $ 1,642 $ 4,716 $ 4,972 The occurrence of events such as acquisitions, dispositions, or impairments may impact future amortization expense. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows (in millions): 2019 2020 2021 2022 2023 Amortization expense $ 24.4 $ 23.4 $ 22.3 $ 19.6 $ 17.2 Indefinite-lived intangible assets The Corporation also owns certain intangible assets, which are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely. These indefinite-lived intangible assets are reflected in "Goodwill and Other Intangible Assets" in the Condensed Consolidated Balance Sheets (in thousands): September 28, December 29, Trademarks and trade names $ 28,775 $ 28,788 The immaterial change in the indefinite-lived intangible assets balances shown above is related to foreign currency translation impacts. Impairment Analysis The Corporation evaluates its goodwill and indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter or whenever indicators of impairment exist. |
Product Warranties
Product Warranties | 9 Months Ended |
Sep. 28, 2019 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties The Corporation issues certain warranty policies on its office furniture and hearth products that provide for repair or replacement of any covered product or component that fails during normal use because of a defect in design, materials, or workmanship. Allowances have been established for the anticipated future costs associated with the Corporation's warranty programs. A warranty allowance is determined by recording a specific allowance for known warranty issues and an additional allowance for unknown issues expected to be incurred based on historical experience. Actual costs incurred could differ from the original estimates, requiring adjustments to the allowance. Activity associated with warranty obligations was as follows (in thousands): Nine Months Ended September 28, September 29, Balance at beginning of period $ 15,450 $ 15,388 Accruals for warranties issued during period 15,406 22,130 Adjustments related to pre-existing warranties 127 116 Warranty issues resolved during the period (15,377 ) (22,203 ) Balance at end of period $ 15,606 $ 15,431 The current and long-term portions of the allowance for estimated warranty issues are reflected within "Accounts payable and accrued expenses" and "Other Long-Term Liabilities", respectively, in the Condensed Consolidated Balance Sheets. The following table summarizes when these estimated warranty issues are expected to be paid (in thousands): September 28, December 29, Current - in the next twelve months $ 9,538 $ 9,455 Long-term - beyond one year 6,068 5,995 Total $ 15,606 $ 15,450 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt is as follows (in thousands): September 28, December 29, Revolving credit facility with interest at a variable rate (September 28, 2019 - 3.2%; December 29, 2018 - 3.5%) $ 140,000 $ 150,000 Fixed rate notes due in 2025 with an interest rate of 4.22% 50,000 50,000 Fixed rate notes due in 2028 with an interest rate of 4.40% 50,000 50,000 Other amounts 1,440 679 Deferred debt issuance costs (582 ) (645 ) Total debt 240,858 250,034 Less: Current maturities of long-term debt 1,440 679 Long-term debt $ 239,418 $ 249,355 As of September 28, 2019 , the Corporation’s revolving credit facility borrowings were under the credit agreement entered into on April 20, 2018 with a scheduled maturity of April 20, 2023. The Corporation deferred the debt issuance costs related to the credit agreement, which are classified as assets, and is amortizing them over the term of the credit agreement. The current portion of debt issuance costs of $0.4 million is the amount to be amortized over the next twelve months based on the current credit agreement and is reflected in "Prepaid expenses and other current assets" in the Condensed Consolidated Balance Sheets. The long-term portion of debt issuance costs of $1.1 million is reflected in "Other Assets" in the Condensed Consolidated Balance Sheets. As of September 28, 2019 , there was $140 million outstanding under the $450 million revolving credit facility. The entire amount drawn under the revolving credit facility is considered long-term as the Corporation assumes no obligation to repay any of the amounts borrowed in the next twelve months. Based on current earnings before interest, taxes, depreciation and amortization, the Corporation can access the full remaining $310 million of borrowing capacity available under the revolving credit facility and maintain compliance with applicable covenants. In addition to cash flows from operations, the revolving credit facility under the credit agreement is the primary source of daily operating capital for the Corporation and provides additional financial capacity for capital expenditures, repurchases of common stock, and strategic initiatives, such as acquisitions. In addition to the revolving credit facility, the Corporation also has $100 million of borrowings outstanding under private placement note agreements entered into on May 31, 2018. Under the agreements, the Corporation issued $50 million of seven -year fixed rate notes with an interest rate of 4.22 percent , due May 31, 2025, and $50 million of ten -year fixed rate notes with an interest rate of 4.40 percent , due May 31, 2028. The Corporation deferred the debt issuance costs related to the private placement note agreements, which are classified as a reduction of long-term debt in accordance with ASU No. 2015-03, and is amortizing them over the terms of the private placement note agreements. The deferred debt issuance costs do not reduce the amount owed by the Corporation under the terms of the private placement note agreements. As of September 28, 2019 the debt issuance costs balance of $0.6 million related to the private placement note agreements is reflected in "Long-Term Debt" in the Condensed Consolidated Balance Sheets. The credit agreement and private placement notes both contain financial and non-financial covenants. The covenants under both are substantially the same. Non-compliance with covenants under the agreements could prevent the Corporation from being able to access further borrowings, require immediate repayment of all amounts outstanding, and/or increase the cost of borrowing. Covenants require maintenance of financial ratios as of the end of any fiscal quarter, including: • a consolidated interest coverage ratio (as defined in the credit agreement) of not less than 4.0 to 1.0, based upon the ratio of (a) consolidated EBITDA for the last four fiscal quarters to (b) the sum of consolidated interest charges; and • a consolidated leverage ratio (as defined in the credit agreement) of not greater than 3.5 to 1.0, based upon the ratio of (a) the quarter-end consolidated funded indebtedness to (b) consolidated EBITDA for the last four fiscal quarters. The most restrictive of the financial covenants is the consolidated leverage ratio requirement of 3.5 to 1.0. Under the credit agreement, consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, and depreciation and amortization of intangibles, as well as non-cash items that increase or decrease net income. As of September 28, 2019 , the Corporation was below the maximum allowable ratio and was in compliance with all of the covenants and other restrictions in the credit agreement. The Corporation expects to remain in compliance with all of the covenants and other restrictions in the credit agreement over the next twelve months. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Corporation's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The following table summarizes the Corporation's income tax provision (dollars in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Income before income taxes $ 58,451 $ 51,104 $ 80,786 $ 76,997 Income taxes $ 12,375 $ 11,197 $ 17,878 $ 16,033 Effective tax rate 21.2 % 21.9 % 22.1 % 20.8 % The Corporation's effective tax rate was lower in the three months ended September 28, 2019 compared to the same period last year primarily due to reduced foreign taxes and the release of tax reserves due to statute of limitations in the current year. The effective tax rate was higher in the nine months ended September 28, 2019 compared to the same period last year primarily due to the release of a valuation allowance for certain foreign jurisdictions in 2018. On February 14, 2018 the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides entities an option to reclassify stranded tax effects related to the Tax Cuts and Jobs Act (the "Act") within accumulated other comprehensive income ("AOCI") to retained earnings for each period in which the effects of the Act is recorded. ASU 2018-02 does not modify the existing requirement to allocate the income tax effects of changes in tax laws or rates directly to continuing operations as a component of income tax expense (benefit). The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Corporation adopted in Q1 2019 and applied the portfolio approach of accounting related to releasing income tax effects from AOCI. During the three months ended March 30, 2019, the Corporation reclassified $0.7 million of federal income taxes that were stranded in AOCI due to the Act to retained earnings. No income tax effects were reclassified subsequent to Q1 2019. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Financial Instruments | Fair Value Measurements of Financial Instruments For recognition purposes, on a recurring basis, the Corporation is required to measure at fair value its marketable securities, derivative financial instruments, variable-rate and fixed-rate debt obligations, and deferred stock-based compensation. The marketable securities are comprised of money market funds, government securities, and corporate bonds. When available, the Corporation uses quoted market prices to determine fair value and classifies such measurements within Level 1. Where market prices are not available, the Corporation makes use of observable market-based inputs (prices or quotes from published exchanges and indexes) to calculate fair value using the market approach, in which case the measurements are classified within Level 2. Financial instruments measured at fair value were as follows (in thousands): Fair value as of measurement date Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance as of September 28, 2019 Cash and cash equivalents (including money market funds) (1) $ 53,013 $ 53,013 $ — $ — Government securities (2) $ 6,580 $ — $ 6,580 $ — Corporate bonds (2) $ 6,474 $ — $ 6,474 $ — Derivative financial instruments - asset (3) $ 166 $ — $ 166 $ — Derivative financial instruments - liability (4) $ 341 $ — $ 341 $ — Variable-rate debt obligations (5) $ 140,000 $ — $ 140,000 $ — Fixed-rate debt obligations (5) $ 100,000 $ — $ 100,000 $ — Deferred stock-based compensation (6) $ 7,057 $ — $ 7,057 $ — Balance as of December 29, 2018 Cash and cash equivalents (including money market funds) (1) $ 76,819 $ 76,819 $ — $ — Government securities (2) $ 7,384 $ — $ 7,384 $ — Corporate bonds (2) $ 4,620 $ — $ 4,620 $ — Derivative financial instruments (3) $ 3,797 $ — $ 3,797 $ — Variable-rate debt obligations (5) $ 150,000 $ — $ 150,000 $ — Fixed-rate debt obligations (5) $ 100,000 $ — $ 100,000 $ — Deferred stock-based compensation (6) $ 7,857 $ — $ 7,857 $ — The index below indicates the line item in the Condensed Consolidated Balance Sheets where the financial instruments are reported: (1) "Cash and cash equivalents" (2) Current portion - "Short-term investments"; Long-term portion - "Other Assets" (3) Current portion - "Prepaid expenses and other current assets"; Long-term portion - "Other Assets" (4) "Other Long-Term Liabilities" (5) Current portion - "Current maturities of long-term debt"; Long-term portion - "Long-Term Debt" (6) Current portion - "Current maturities of other long-term obligations"; Long-term portion - "Other Long-Term Liabilities" |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity | Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity The following tables summarize the components of accumulated other comprehensive income (loss) and the changes in accumulated other comprehensive income (loss), net of tax, as applicable (in thousands): Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of December 29, 2018 $ (2,973 ) $ (156 ) $ (2,929 ) $ 2,459 $ (3,599 ) Other comprehensive income (loss) before reclassifications (406 ) 319 — (2,272 ) (2,359 ) Tax (expense) or benefit — (67 ) — 661 594 Reclassification of stranded tax impact — — (1,185 ) 446 (739 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — (947 ) (947 ) Balance as of September 28, 2019 $ (3,379 ) $ 96 $ (4,114 ) $ 347 $ (7,050 ) Amounts in parentheses indicate reductions to equity. Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of December 30, 2017 $ 31 $ (132 ) $ (5,630 ) $ 2,120 $ (3,611 ) Other comprehensive income (loss) before reclassifications (1,944 ) (125 ) — 2,593 524 Tax (expense) or benefit — 26 — (635 ) (609 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — (499 ) (499 ) Balance as of September 29, 2018 $ (1,913 ) $ (231 ) $ (5,630 ) $ 3,579 $ (4,195 ) Amounts in parentheses indicate reductions to equity. Interest Rate Swap In March 2016, the Corporation entered into an interest rate swap transaction to hedge $150 million of outstanding variable rate revolver borrowings against future interest rate volatility. Under the terms of the interest rate swap, the Corporation paid a fixed rate of 1.29 percent and received one month LIBOR on a $150 million notional value. In August 2019, the agreement governing this interest rate swap was terminated, and the Corporation received cash proceeds of $0.5 million , the fair value of the interest rate swap on the termination date. The proceeds were recorded as cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. The $0.5 million gain from the termination of this interest rate swap agreement was recorded to "Accumulated other comprehensive income (loss)" and will be amortized to interest expense through January 2021, the remaining term of the original interest rate swap agreement. In August 2019, concurrent with the termination of the previous interest rate swap, the Corporation entered into a new interest rate swap transaction to hedge $75 million of outstanding variable rate revolver borrowings against future interest rate volatility. Under the terms of this interest rate swap, the Corporation pays a fixed rate of 1.42 percent and receives one month LIBOR on a $75 million notional value expiring August 2023. As of September 28, 2019 , the fair value of the Corporation's interest rate swap asset and liability was $0.2 million and $0.3 million , respectively. The unrecognized change in value of the interest rate swap is reported net of tax as $0.3 million in "Accumulated other comprehensive income (loss)" in the Condensed Consolidated Balance Sheets. The following table details the reclassifications from accumulated other comprehensive income (loss) (in thousands): Three Months Ended Nine Months Ended Details about Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Statement Where Net Income is Presented September 28, September 29, September 28, September 29, Derivative financial instruments Interest rate swap Interest (expense) or income $ 315 $ 305 $ 1,220 $ 661 Tax (expense) or benefit (60 ) (75 ) (273 ) (162 ) Net of tax $ 255 $ 230 $ 947 $ 499 Amounts in parentheses indicate reductions to profit. Dividend The Corporation declared and paid cash dividends per common share as follows (in dollars): Nine Months Ended September 28, September 29, Dividends per common share $ 0.905 $ 0.875 Stock Repurchase The following table summarizes shares repurchased and settled by the Corporation (in thousands, except per share data): Nine Months Ended September 28, September 29, Shares repurchased 1,797 369 Average price per share $ 36.09 $ 40.36 Cash purchase price $ (64,877 ) $ (14,884 ) Purchases unsettled as of quarter end 125 222 Prior year purchases settled in current year (354 ) (1,381 ) Shares repurchased per cash flow $ (65,106 ) $ (16,043 ) As of September 28, 2019 , approximately $183.7 million of the Corporation's Board of Directors' ("Board") current repurchase authorization remained unspent. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share ("EPS") (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Numerator: Numerator for both basic and diluted EPS attributable to HNI Corporation net income $ 46,078 $ 39,907 $ 62,910 $ 61,014 Denominators: Denominator for basic EPS weighted-average common shares outstanding 42,899 43,823 43,217 43,616 Potentially dilutive shares from stock-based compensation plans 287 856 403 733 Denominator for diluted EPS 43,186 44,679 43,620 44,349 Earnings per share – basic $ 1.07 $ 0.91 $ 1.46 $ 1.40 Earnings per share – diluted $ 1.07 $ 0.89 $ 1.44 $ 1.38 The weighted-average common stock equivalents presented above do not include the effect of the common stock equivalents in the table below because their inclusion would be anti-dilutive. Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Common stock equivalents excluded because their inclusion would be anti-dilutive (in thousands) 2,731 1,273 2,118 1,474 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Corporation measures stock-based compensation expense at grant date, based on the fair value of the award, and recognizes expense over the employees' requisite service periods. Stock-based compensation expense is the cost of stock options and time-based restricted stock units issued under the shareholder approved stock-based compensation plans and shares issued under the shareholder approved member stock purchase plans. The following table summarizes expense associated with these plans (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Compensation cost $ 1,336 $ 1,307 $ 5,408 $ 6,215 The options and units granted by the Corporation had fair values as follows (in thousands): Nine Months Ended September 28, September 29, Stock options $ 6,211 $ 7,200 Restricted stock units $ 361 $ 76 The following table summarizes unrecognized compensation expense and the weighted-average remaining service period for non-vested stock options and restricted stock units as of September 28, 2019 : Unrecognized Compensation Expense (in thousands) Weighted-Average Remaining Service Period (years) Non-vested stock options $ 4,237 1.1 Non-vested restricted stock units $ 516 1.1 |
Post-Retirement Health Care
Post-Retirement Health Care | 9 Months Ended |
Sep. 28, 2019 | |
Retirement Benefits [Abstract] | |
Post-Retirement Health Care | Post-Retirement Health Care The following table sets forth the components of net periodic benefit costs included in the Condensed Consolidated Statements of Comprehensive Income (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Service cost $ 170 $ 213 $ 510 $ 639 Interest cost 199 197 596 591 Amortization of net (gain) loss — 32 — 95 Net periodic post-retirement benefit cost $ 369 $ 442 $ 1,106 $ 1,325 |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard requires lessees to recognize most leases, including operating leases, on-balance sheet via a right of use asset and lease liability. The new standard became effective for the Corporation in fiscal 2019 and was implemented using a modified-retrospective transition approach. The Corporation selected a technology tool to assist with the accounting and disclosure requirements of the new standard. All necessary changes required by the new standard, including those to the Corporation's accounting policies, business process, systems, controls, and disclosures, were identified and implemented as of the first quarter 2019. See "Note 6. Leases" in the Notes to Condensed Consolidated Financial Statements for financial impacts, accounting elections, and further information. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The new standard allows entities to reclassify certain stranded tax effects from accumulated other comprehensive income to retained earnings resulting from the Tax Cuts and Jobs Act of 2017 (the "Act"). The standard also requires certain disclosures about stranded tax effects. The new standard became effective for the Corporation in fiscal 2019. See "Note 10. Income Taxes" in the Notes to Condensed Consolidated Financial Statements for further information. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities . The new standard improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The new standard became effective for the Corporation in fiscal 2019. The standard requires a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the fiscal year of adoption for the previously recorded ineffectiveness included in retained earnings related to existing net investment hedges as of the date of adoption. The Corporation did not record a cumulative effect adjustment to retained earnings as no net investment hedges existed as of the ASU adoption date. New hedging relationships entered after the adoption date have been presented in the financial statements using the guidance of the ASU. The standard did not have a material effect on consolidated financial statements and related disclosures. |
Guarantees, Commitments and Con
Guarantees, Commitments and Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees, Commitments and Contingencies | Guarantees, Commitments, and Contingencies The Corporation utilizes letters of credit and surety bonds in the amount of approximately $25 million to back certain insurance policies and payment obligations. The Corporation utilizes trade letters of credit and banker's acceptances in the amount of approximately $2 million to guarantee certain payments to overseas suppliers. The letters of credit, bonds, and banker's acceptances reflect fair value as a condition of their underlying purpose and are subject to competitively determined fees. The Corporation has contingent liabilities which have arisen in the ordinary course of its business, including liabilities relating to pending litigation, environmental remediation, taxes, and other claims. It is the Corporation's opinion, after consultation with legal counsel, that liabilities, if any, resulting from these matters are not expected to have a material adverse effect on the Corporation's financial condition, cash flows, or on the Corporation's quarterly or annual operating results when resolved in a future period. |
Reportable Segment Information
Reportable Segment Information | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Reportable Segment Information Management views the Corporation as being in two reportable segments based on industries: office furniture and hearth products, with the former being the principal segment. The aggregated office furniture segment manufactures and markets a broad line of commercial and home office furniture which includes storage products, desks, credenzas, chairs, tables, bookcases, freestanding office partitions and panel systems, and other related products. The hearth products segment manufactures and markets a broad line of gas, electric, wood, and biomass burning fireplaces, inserts, stoves, facings, and accessories, principally for the home. For purposes of segment reporting, intercompany sales between segments are not material, and operating profit is income before income taxes exclusive of certain unallocated general corporate expenses. These unallocated general corporate expenses include the net costs of the Corporation's corporate operations. Management views interest income and expense as corporate financing costs and not as a reportable segment cost. In addition, management applies an effective income tax rate to its consolidated income before income taxes so income taxes are not reported or viewed internally on a segment basis. Identifiable assets by segment are those assets applicable to the respective industry segments. Corporate assets consist principally of cash and cash equivalents, short-term investments, long-term investments, IT infrastructure, and corporate office real estate and related equipment. No geographic information for revenues from external customers or for long-lived assets is disclosed since the Corporation's primary market and capital investments are concentrated in the United States. Reportable segment data reconciled to the Corporation's condensed consolidated financial statements was as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Net Sales: Office furniture $ 484,755 $ 471,687 $ 1,247,778 $ 1,276,480 Hearth products 140,631 139,433 383,090 383,323 Total $ 625,386 $ 611,120 $ 1,630,868 $ 1,659,803 Income Before Income Taxes: Office furniture $ 51,162 $ 45,721 $ 68,180 $ 64,898 Hearth products 23,772 21,824 54,743 55,250 General corporate (14,278 ) (13,919 ) (35,342 ) (35,776 ) Operating income 60,656 53,626 87,581 84,372 Interest expense, net 2,205 2,522 6,795 7,375 Total $ 58,451 $ 51,104 $ 80,786 $ 76,997 Depreciation and Amortization Expense: Office furniture $ 11,232 $ 11,012 $ 33,540 $ 33,202 Hearth products 2,291 2,026 6,521 6,080 General corporate 5,863 5,569 17,777 16,605 Total $ 19,386 $ 18,607 $ 57,838 $ 55,887 Capital Expenditures (including capitalized software): Office furniture $ 6,524 $ 10,324 $ 29,190 $ 35,321 Hearth products 3,204 2,150 10,779 6,317 General corporate 2,856 2,181 10,222 5,341 Total $ 12,584 $ 14,655 $ 50,191 $ 46,979 As of As of Identifiable Assets: Office furniture $ 872,501 $ 797,574 Hearth products 379,534 352,060 General corporate 218,441 252,210 Total $ 1,470,476 $ 1,401,844 |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Revenue | Performance Obligations The Corporation recognizes revenue for sales of office furniture and hearth products at a point in time following the transfer of control of such products to the customer, which typically occurs upon shipment of the product. In certain circumstances, transfer of control to the customer does not occur until the goods are received by the customer or upon installation and/or customer acceptance, depending on the terms of the underlying contracts. Contracts typically have a duration of less than one year and normally do not include a significant financing component. Generally, payment is due within 30 days of invoicing. The Corporation's backlog orders are typically cancelable for a period of time and almost all contracts have an original duration of one year or less. As a result, the Corporation has elected the practical expedient permitted in the revenue accounting standard not to disclose the unsatisfied performance obligation as of September 28, 2019. The backlog is typically fulfilled within a quarter. Significant Judgments The amount of consideration the Corporation receives and revenue recognized varies with changes in rebate and marketing program incentives, as well as early pay discounts, offered to customers. The Corporation uses significant judgment throughout the year in estimating the reduction in net sales driven by variable consideration for rebate and marketing programs. Judgments made include expected sales levels and utilization of funds. However, this judgment factor is significantly reduced at the end of each year when sales volumes and the impact to rebate and marketing programs are known and recorded as the programs typically end near the Corporation's fiscal year end. |
Inventories | The Corporation values its inventory at the lower of cost or net realizable value with approximately 73 percent |
Leases | Accounting Policies and Practical Expedients Elected The Corporation elected to use the modified-retrospective method of adopting ASU 2016-02. It has been applied to all leases active on or after December 30, 2018, the start of the Corporation's fiscal year. The Corporation elected the following practical expedients as a result of adopting ASU 2016-02: • The Corporation has made an accounting election by class of underlying assets to not separate non-lease components of a contract from the lease components to which they relate for all classes of assets except for embedded leases. • The Corporation has elected not to restate prior period financial statements for the effects of the new standard. Required ASC 840 disclosures for periods prior to 2019 have been provided. • The Corporation has elected not to use hindsight in determining the lease term and in assessing the likelihood that a lessee purchase option will be exercised. • The Corporation has elected for all asset classes to not recognize ROU assets and lease liabilities for leases that at the acquisition date have a remaining lease term of twelve months or less. The Corporation leases certain showrooms, office space, manufacturing facilities, distribution centers, retail stores and equipment and determines if an arrangement is a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Leases with an initial term of twelve months or less are not recorded on the Condensed Consolidated Balance Sheets; expense for these leases is recognized on a straight-line basis over the lease term. As the rates implicit in its leases cannot be readily determined, the Corporation uses a secured incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Corporation uses separate discount rates for its U.S. operations and overseas operations. Certain real estate leases include one or more options to renew with renewal terms that can extend the lease term from one to ten years . The exercise of lease renewal options is at the Corporation's sole discretion. Certain real estate leases include an option to terminate the lease term earlier than the specified lease term for a fee. These options are not included as part of the lease term unless they are reasonably certain to be exercised. Many of the Corporation's real estate lease agreements include periods of rent holidays and payments that escalate over the lease term by specified amounts. While not significant, certain equipment leases have variable lease payments based on machine hours and certain real estate leases have rate changes based on the Consumer Price Index. The Corporation's lease agreements do not contain any material residual value guarantees. The Corporation has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. On occasion, the Corporation rents or subleases certain real estate to third parties. This sublease portfolio consists mainly of operating leases for office furniture showrooms and is not significant. |
Goodwill and Other Intangible Assets | Impairment Analysis The Corporation evaluates its goodwill and indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter or whenever indicators of impairment exist. |
Product Warranties | The Corporation issues certain warranty policies on its office furniture and hearth products that provide for repair or replacement of any covered product or component that fails during normal use because of a defect in design, materials, or workmanship. Allowances have been established for the anticipated future costs associated with the Corporation's warranty programs. |
Fair Value Measurements | For recognition purposes, on a recurring basis, the Corporation is required to measure at fair value its marketable securities, derivative financial instruments, variable-rate and fixed-rate debt obligations, and deferred stock-based compensation. The marketable securities are comprised of money market funds, government securities, and corporate bonds. When available, the Corporation uses quoted market prices to determine fair value and classifies such measurements within Level 1. Where market prices are not available, the Corporation makes use of observable market-based inputs (prices or quotes from published exchanges and indexes) to calculate fair value using the market approach, in which case the measurements are classified within Level 2. |
Share-based Compensation, Option and Incentive Plans | |
Recently Adopted Accounting Standards | In February 2016, the FASB issued ASU No. 2016-02, Leases . The new standard requires lessees to recognize most leases, including operating leases, on-balance sheet via a right of use asset and lease liability. The new standard became effective for the Corporation in fiscal 2019 and was implemented using a modified-retrospective transition approach. The Corporation selected a technology tool to assist with the accounting and disclosure requirements of the new standard. All necessary changes required by the new standard, including those to the Corporation's accounting policies, business process, systems, controls, and disclosures, were identified and implemented as of the first quarter 2019. See "Note 6. Leases" in the Notes to Condensed Consolidated Financial Statements for financial impacts, accounting elections, and further information. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The new standard allows entities to reclassify certain stranded tax effects from accumulated other comprehensive income to retained earnings resulting from the Tax Cuts and Jobs Act of 2017 (the "Act"). The standard also requires certain disclosures about stranded tax effects. The new standard became effective for the Corporation in fiscal 2019. See "Note 10. Income Taxes" in the Notes to Condensed Consolidated Financial Statements for further information. In August 2017, the FASB issued ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities . The new standard improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements and make certain targeted improvements to simplify the application of the hedge accounting guidance through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The new standard became effective for the Corporation in fiscal 2019. The standard requires a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the fiscal year of adoption for the previously recorded ineffectiveness included in retained earnings related to existing net investment hedges as of the date of adoption. The Corporation did not record a cumulative effect adjustment to retained earnings as no net investment hedges existed as of the ASU adoption date. New hedging relationships entered after the adoption date have been presented in the financial statements using the guidance of the ASU. The standard did not have a material effect on consolidated financial statements and related disclosures. |
Business Segment Information | Management views the Corporation as being in two reportable segments based on industries: office furniture and hearth products, with the former being the principal segment. The aggregated office furniture segment manufactures and markets a broad line of commercial and home office furniture which includes storage products, desks, credenzas, chairs, tables, bookcases, freestanding office partitions and panel systems, and other related products. The hearth products segment manufactures and markets a broad line of gas, electric, wood, and biomass burning fireplaces, inserts, stoves, facings, and accessories, principally for the home. For purposes of segment reporting, intercompany sales between segments are not material, and operating profit is income before income taxes exclusive of certain unallocated general corporate expenses. These unallocated general corporate expenses include the net costs of the Corporation's corporate operations. Management views interest income and expense as corporate financing costs and not as a reportable segment cost. In addition, management applies an effective income tax rate to its consolidated income before income taxes so income taxes are not reported or viewed internally on a segment basis. Identifiable assets by segment are those assets applicable to the respective industry segments. Corporate assets consist principally of cash and cash equivalents, short-term investments, long-term investments, IT infrastructure, and corporate office real estate and related equipment. No geographic information for revenues from external customers or for long-lived assets is disclosed since the Corporation's primary market and capital investments are concentrated in the United States. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue from contracts with customers disaggregated by sales channel and by segment is as follows (in thousands): Three Months Ended Nine Months Ended Segment September 28, September 29, September 28, September 29, Supplies-driven channel Office furniture $ 260,359 $ 265,971 $ 649,380 $ 680,656 Contract channel Office furniture 224,396 205,716 598,398 595,824 Hearth Hearth products 140,631 139,433 383,090 383,323 Net sales $ 625,386 $ 611,120 $ 1,630,868 $ 1,659,803 |
Contract with Customer, Asset and Liability | Contract assets and contract liabilities were as follows (in thousands): September 28, December 29, Trade receivables (1) $ 275,738 $ 259,075 Other contract assets (current) (2) $ 837 $ 529 Other contract assets (long-term) (3) $ 2,865 $ 2,188 Contract liabilities (4) $ 44,463 $ 44,858 The index below indicates the line item in the Condensed Consolidated Balance Sheets where contract assets and contract liabilities are reported: (1) "Receivables" (2) "Prepaid expenses and other current assets" (3) "Other Assets" (4) "Accounts payable and accrued expenses" Changes in other contract asset and contract liability balances during the nine months ended September 28, 2019 were as follows (in thousands): Contract assets increase (decrease) Contract liabilities (increase) decrease Contract assets recognized $ 1,313 $ — Reclassification of contract assets to contra revenue (328 ) — Contract liabilities recognized and recorded to contra revenue as a result of performance obligations satisfied — (110,789 ) Contract liabilities paid — 109,592 Cash received in advance and not recognized as revenue — (49,962 ) Reclassification of cash received in advance to revenue as a result of performance obligations satisfied — 51,554 Net change $ 985 $ 395 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Costs | Restructuring costs recorded in the Condensed Consolidated Statements of Comprehensive Income are as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Restructuring and impairment charges $ 284 $ 128 $ 1,214 $ 2,303 Severance Costs Facility Exit Costs & Other Total Restructuring allowance as of December 29, 2018 $ 136 $ 150 $ 286 Restructuring charges 899 315 1,214 Cash payments (640 ) (99 ) (739 ) Restructuring allowance as of September 28, 2019 $ 395 $ 366 $ 761 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories included in the Condensed Consolidated Balance Sheets consisted of the following (in thousands): September 28, December 29, Finished products $ 138,767 $ 97,398 Materials and work in process 77,269 94,161 LIFO allowance (34,114 ) (34,381 ) Total inventories $ 181,922 $ 157,178 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases included in the Condensed Consolidated Balance Sheets | Leases included in the Condensed Consolidated Balance Sheet consisted of the following (in thousands): Classification September 28, Assets Right-of-use operating leases $ 72,087 Right-of-use finance leases 2,157 Total Right-of-use operating / finance leases $ 74,244 Liabilities Current lease obligations - operating $ 20,506 Current lease obligations - finance 501 Total Current lease obligations - operating / finance 21,007 Long-term lease obligations - operating 59,474 Long-term lease obligations - finance 1,669 Total Long-term lease obligations - operating / finance 61,143 Total lease obligations - operating / finance $ 82,150 |
Lease Costs Included in the Condensed Consolidated Statements on Comprehensive Income | Lease costs included in the Condensed Consolidated Statements of Comprehensive Income consisted of the following (in thousands): Three Months Ended Nine Months Ended Classification September 28, September 28, Operating lease costs Fixed Cost of sales $ 438 $ 1,366 Selling and administrative expenses 5,913 18,212 Short-term / variable Cost of sales 317 635 Selling and administrative expenses 385 807 Finance lease costs Amortization Cost of sales, selling and administrative, and interest expense 154 307 Less: Sublease income 48 133 Total lease costs $ 7,159 $ 21,194 The following table summarizes cash paid for amounts included in the measurements of lease liabilities and the leased assets obtained in exchange for new operating and finance lease liabilities (in thousands): Nine Months Ended September 28, Cash paid for amounts included in the measurements of lease liabilities: Operating cash flows from operating / finance leases $ 20,072 Financing cash flows from finance leases $ 262 Leased assets obtained in exchange for new operating / finance lease liabilities $ 18,387 |
Maturities of Finance Lease Liabilities | Maturity of lease liabilities as of September 28, 2019 is as follows (in thousands): Operating Leases (a) Finance Leases (a) Total 2019 (remaining portion of year) $ 6,590 $ 143 $ 6,733 2020 23,521 593 24,114 2021 16,792 564 17,356 2022 11,332 488 11,820 2023 9,388 436 9,824 Thereafter 22,531 112 22,643 Total lease payments 90,154 2,336 92,490 Less: Interest 10,177 163 10,340 Present value of lease liabilities $ 79,977 $ 2,173 $ 82,150 (a) At this time there are no operating or finance lease options to extend lease terms that are reasonably certain of being exercised, no r are there any legally binding minimum lease payments for operating or finance leases signed, but not yet commenced. |
Maturities of Operating Lease Liabilities | Maturity of lease liabilities as of September 28, 2019 is as follows (in thousands): Operating Leases (a) Finance Leases (a) Total 2019 (remaining portion of year) $ 6,590 $ 143 $ 6,733 2020 23,521 593 24,114 2021 16,792 564 17,356 2022 11,332 488 11,820 2023 9,388 436 9,824 Thereafter 22,531 112 22,643 Total lease payments 90,154 2,336 92,490 Less: Interest 10,177 163 10,340 Present value of lease liabilities $ 79,977 $ 2,173 $ 82,150 (a) At this time there are no operating or finance lease options to extend lease terms that are reasonably certain of being exercised, no r are there any legally binding minimum lease payments for operating or finance leases signed, but not yet commenced. |
Weighted-average Remaining Lease Terms and Discount Rates | The following table summarizes the weighted-average discount rates and weighted-average remaining lease terms for operating and finance leases as of September 28, 2019 : Weighted-Average Discount Rate (percent) Weighted-Average Remaining Lease Term (years) Operating leases 4.2 % 5.5 Finance leases 3.6 % 4.3 |
Operating Leases | Rent expense under ASC 840 was as follows (in thousands): 2018 2017 2016 Rent expense $ 31,027 $ 32,158 $ 35,288 Commitments for minimum rentals under non-cancelable leases were as follows (in thousands): Operating Leases 2019 $ 24,387 2020 18,250 2021 13,324 2022 9,082 2023 6,228 Thereafter 10,469 Total minimum lease payments $ 81,740 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill and other intangible assets included in the Condensed Consolidated Balance Sheets consisted of the following (in thousands): September 28, December 29, Goodwill $ 270,781 $ 270,788 Definite-lived intangible assets 149,732 163,714 Indefinite-lived intangible assets 28,775 28,788 Total goodwill and other intangible assets $ 449,288 $ 463,290 |
Schedule of Goodwill | The changes in the carrying amount of goodwill, by reporting segment, are as follows (in thousands): Office Furniture Hearth Products Total Balance as of December 29, 2018 Goodwill $ 128,645 $ 186,662 $ 315,307 Accumulated impairment losses (44,376 ) (143 ) (44,519 ) Net goodwill balance as of December 29, 2018 84,269 186,519 270,788 Foreign currency translation adjustment (7 ) — (7 ) Balance as of September 28, 2019 Goodwill 128,638 186,662 315,300 Accumulated impairment losses (44,376 ) (143 ) (44,519 ) Net goodwill balance as of September 28, 2019 $ 84,262 $ 186,519 $ 270,781 |
Schedule of Finite-Lived Intangible Assets by Major Class | The table below summarizes amortizable definite-lived intangible assets, which are reflected in "Goodwill and Other Intangible Assets" in the Condensed Consolidated Balance Sheets (in thousands): September 28, 2019 December 29, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Patents $ 40 $ 40 $ — $ 40 $ 34 $ 6 Software 174,550 63,097 111,453 170,274 49,561 120,713 Trademarks and trade names 7,564 3,216 4,348 7,564 2,721 4,843 Customer lists and other 103,803 69,872 33,931 103,840 65,688 38,152 Net definite-lived intangible assets $ 285,957 $ 136,225 $ 149,732 $ 281,718 $ 118,004 $ 163,714 |
Finite-lived Intangible Assets Amortization Expense | Amortization expense is reflected in "Selling and administrative expenses" in the Condensed Consolidated Statements of Comprehensive Income and was as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Capitalized software $ 4,479 $ 4,290 $ 13,686 $ 12,734 Other definite-lived intangibles $ 1,571 $ 1,642 $ 4,716 $ 4,972 |
Schedule of Expected Amortization Expense Table | Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows (in millions): 2019 2020 2021 2022 2023 Amortization expense $ 24.4 $ 23.4 $ 22.3 $ 19.6 $ 17.2 |
Schedule of Indefinite Lived Intangible Assets and Goodwill | These indefinite-lived intangible assets are reflected in "Goodwill and Other Intangible Assets" in the Condensed Consolidated Balance Sheets (in thousands): September 28, December 29, Trademarks and trade names $ 28,775 $ 28,788 |
Product Warranties (Tables)
Product Warranties (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Product Warranties Disclosures [Abstract] | |
Activity Associated with Warranty Obligations | The following table summarizes when these estimated warranty issues are expected to be paid (in thousands): September 28, December 29, Current - in the next twelve months $ 9,538 $ 9,455 Long-term - beyond one year 6,068 5,995 Total $ 15,606 $ 15,450 Nine Months Ended September 28, September 29, Balance at beginning of period $ 15,450 $ 15,388 Accruals for warranties issued during period 15,406 22,130 Adjustments related to pre-existing warranties 127 116 Warranty issues resolved during the period (15,377 ) (22,203 ) Balance at end of period $ 15,606 $ 15,431 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt is as follows (in thousands): September 28, December 29, Revolving credit facility with interest at a variable rate (September 28, 2019 - 3.2%; December 29, 2018 - 3.5%) $ 140,000 $ 150,000 Fixed rate notes due in 2025 with an interest rate of 4.22% 50,000 50,000 Fixed rate notes due in 2028 with an interest rate of 4.40% 50,000 50,000 Other amounts 1,440 679 Deferred debt issuance costs (582 ) (645 ) Total debt 240,858 250,034 Less: Current maturities of long-term debt 1,440 679 Long-term debt $ 239,418 $ 249,355 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The following table summarizes the Corporation's income tax provision (dollars in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Income before income taxes $ 58,451 $ 51,104 $ 80,786 $ 76,997 Income taxes $ 12,375 $ 11,197 $ 17,878 $ 16,033 Effective tax rate 21.2 % 21.9 % 22.1 % 20.8 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value | Financial instruments measured at fair value were as follows (in thousands): Fair value as of measurement date Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Balance as of September 28, 2019 Cash and cash equivalents (including money market funds) (1) $ 53,013 $ 53,013 $ — $ — Government securities (2) $ 6,580 $ — $ 6,580 $ — Corporate bonds (2) $ 6,474 $ — $ 6,474 $ — Derivative financial instruments - asset (3) $ 166 $ — $ 166 $ — Derivative financial instruments - liability (4) $ 341 $ — $ 341 $ — Variable-rate debt obligations (5) $ 140,000 $ — $ 140,000 $ — Fixed-rate debt obligations (5) $ 100,000 $ — $ 100,000 $ — Deferred stock-based compensation (6) $ 7,057 $ — $ 7,057 $ — Balance as of December 29, 2018 Cash and cash equivalents (including money market funds) (1) $ 76,819 $ 76,819 $ — $ — Government securities (2) $ 7,384 $ — $ 7,384 $ — Corporate bonds (2) $ 4,620 $ — $ 4,620 $ — Derivative financial instruments (3) $ 3,797 $ — $ 3,797 $ — Variable-rate debt obligations (5) $ 150,000 $ — $ 150,000 $ — Fixed-rate debt obligations (5) $ 100,000 $ — $ 100,000 $ — Deferred stock-based compensation (6) $ 7,857 $ — $ 7,857 $ — The index below indicates the line item in the Condensed Consolidated Balance Sheets where the financial instruments are reported: (1) "Cash and cash equivalents" (2) Current portion - "Short-term investments"; Long-term portion - "Other Assets" (3) Current portion - "Prepaid expenses and other current assets"; Long-term portion - "Other Assets" (4) "Other Long-Term Liabilities" (5) Current portion - "Current maturities of long-term debt"; Long-term portion - "Long-Term Debt" (6) Current portion - "Current maturities of other long-term obligations"; Long-term portion - "Other Long-Term Liabilities" |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income and Changes in Accumulated Other Comprehensive Income, Net of Tax | The following tables summarize the components of accumulated other comprehensive income (loss) and the changes in accumulated other comprehensive income (loss), net of tax, as applicable (in thousands): Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of December 29, 2018 $ (2,973 ) $ (156 ) $ (2,929 ) $ 2,459 $ (3,599 ) Other comprehensive income (loss) before reclassifications (406 ) 319 — (2,272 ) (2,359 ) Tax (expense) or benefit — (67 ) — 661 594 Reclassification of stranded tax impact — — (1,185 ) 446 (739 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — (947 ) (947 ) Balance as of September 28, 2019 $ (3,379 ) $ 96 $ (4,114 ) $ 347 $ (7,050 ) Amounts in parentheses indicate reductions to equity. Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of December 30, 2017 $ 31 $ (132 ) $ (5,630 ) $ 2,120 $ (3,611 ) Other comprehensive income (loss) before reclassifications (1,944 ) (125 ) — 2,593 524 Tax (expense) or benefit — 26 — (635 ) (609 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — (499 ) (499 ) Balance as of September 29, 2018 $ (1,913 ) $ (231 ) $ (5,630 ) $ 3,579 $ (4,195 ) Amounts in parentheses indicate reductions to equity. |
Schedule of Reclassification from Accumulated Other Comprehensive Income | The following table details the reclassifications from accumulated other comprehensive income (loss) (in thousands): Three Months Ended Nine Months Ended Details about Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Statement Where Net Income is Presented September 28, September 29, September 28, September 29, Derivative financial instruments Interest rate swap Interest (expense) or income $ 315 $ 305 $ 1,220 $ 661 Tax (expense) or benefit (60 ) (75 ) (273 ) (162 ) Net of tax $ 255 $ 230 $ 947 $ 499 Amounts in parentheses indicate reductions to profit. |
Schedule of Dividends Declared and Paid Per Share | The Corporation declared and paid cash dividends per common share as follows (in dollars): Nine Months Ended September 28, September 29, Dividends per common share $ 0.905 $ 0.875 |
Schedule of Share Repurchases | The following table summarizes shares repurchased and settled by the Corporation (in thousands, except per share data): Nine Months Ended September 28, September 29, Shares repurchased 1,797 369 Average price per share $ 36.09 $ 40.36 Cash purchase price $ (64,877 ) $ (14,884 ) Purchases unsettled as of quarter end 125 222 Prior year purchases settled in current year (354 ) (1,381 ) Shares repurchased per cash flow $ (65,106 ) $ (16,043 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Basic and Diluted | The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share ("EPS") (in thousands, except per share data): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Numerator: Numerator for both basic and diluted EPS attributable to HNI Corporation net income $ 46,078 $ 39,907 $ 62,910 $ 61,014 Denominators: Denominator for basic EPS weighted-average common shares outstanding 42,899 43,823 43,217 43,616 Potentially dilutive shares from stock-based compensation plans 287 856 403 733 Denominator for diluted EPS 43,186 44,679 43,620 44,349 Earnings per share – basic $ 1.07 $ 0.91 $ 1.46 $ 1.40 Earnings per share – diluted $ 1.07 $ 0.89 $ 1.44 $ 1.38 |
Schedule of Weighted Average Number of Shares | The weighted-average common stock equivalents presented above do not include the effect of the common stock equivalents in the table below because their inclusion would be anti-dilutive. Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Common stock equivalents excluded because their inclusion would be anti-dilutive (in thousands) 2,731 1,273 2,118 1,474 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Based Compensation Expense | The following table summarizes expense associated with these plans (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Compensation cost $ 1,336 $ 1,307 $ 5,408 $ 6,215 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period | The options and units granted by the Corporation had fair values as follows (in thousands): Nine Months Ended September 28, September 29, Stock options $ 6,211 $ 7,200 Restricted stock units $ 361 $ 76 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | The following table summarizes unrecognized compensation expense and the weighted-average remaining service period for non-vested stock options and restricted stock units as of September 28, 2019 : Unrecognized Compensation Expense (in thousands) Weighted-Average Remaining Service Period (years) Non-vested stock options $ 4,237 1.1 Non-vested restricted stock units $ 516 1.1 |
Post-Retirement Health Care (Ta
Post-Retirement Health Care (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The following table sets forth the components of net periodic benefit costs included in the Condensed Consolidated Statements of Comprehensive Income (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Service cost $ 170 $ 213 $ 510 $ 639 Interest cost 199 197 596 591 Amortization of net (gain) loss — 32 — 95 Net periodic post-retirement benefit cost $ 369 $ 442 $ 1,106 $ 1,325 |
Reportable Segment Information
Reportable Segment Information (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segment Data | Reportable segment data reconciled to the Corporation's condensed consolidated financial statements was as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Net Sales: Office furniture $ 484,755 $ 471,687 $ 1,247,778 $ 1,276,480 Hearth products 140,631 139,433 383,090 383,323 Total $ 625,386 $ 611,120 $ 1,630,868 $ 1,659,803 Income Before Income Taxes: Office furniture $ 51,162 $ 45,721 $ 68,180 $ 64,898 Hearth products 23,772 21,824 54,743 55,250 General corporate (14,278 ) (13,919 ) (35,342 ) (35,776 ) Operating income 60,656 53,626 87,581 84,372 Interest expense, net 2,205 2,522 6,795 7,375 Total $ 58,451 $ 51,104 $ 80,786 $ 76,997 Depreciation and Amortization Expense: Office furniture $ 11,232 $ 11,012 $ 33,540 $ 33,202 Hearth products 2,291 2,026 6,521 6,080 General corporate 5,863 5,569 17,777 16,605 Total $ 19,386 $ 18,607 $ 57,838 $ 55,887 Capital Expenditures (including capitalized software): Office furniture $ 6,524 $ 10,324 $ 29,190 $ 35,321 Hearth products 3,204 2,150 10,779 6,317 General corporate 2,856 2,181 10,222 5,341 Total $ 12,584 $ 14,655 $ 50,191 $ 46,979 As of As of Identifiable Assets: Office furniture $ 872,501 $ 797,574 Hearth products 379,534 352,060 General corporate 218,441 252,210 Total $ 1,470,476 $ 1,401,844 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 625,386 | $ 611,120 | $ 1,630,868 | $ 1,659,803 |
Office Furniture | Supplies-driven channel | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 260,359 | 265,971 | 649,380 | 680,656 |
Office Furniture | Contract channel | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 224,396 | 205,716 | 598,398 | 595,824 |
Hearth Products | Hearth | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 140,631 | $ 139,433 | $ 383,090 | $ 383,323 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Trade receivables | $ 275,738 | $ 259,075 |
Contract assets (current) | 837 | 529 |
Contract assets (long-term) | 2,865 | 2,188 |
Contract liabilities | $ 44,463 | $ 44,858 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Change in Contract Assets and Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Contract assets increase (decrease) | |
Contract assets recognized | $ 1,313 |
Reclassification of contract assets to contra revenue | (328) |
Net change | 985 |
Contract liabilities (increase) decrease | |
Contract liabilities recognized and recorded to contra revenue as a result of performance obligations satisfied | (110,789) |
Contract liabilities paid | 109,592 |
Cash received in advance and not recognized as revenue | (49,962) |
Reclassification of cash received in advance to revenue as a result of performance obligations satisfied | 51,554 |
Net change | $ 395 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 0 | $ 8.3 |
Contract length | Contracts typically have a duration of less than one year and normally do not include a significant financing component. | |
Payment terms | 30 days |
Restructuring and Impairment _2
Restructuring and Impairment Charges - Restructuring Costs Expensed (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Realignment of Office Furniture Facilities and Exit of Business Line | Restructuring and impairment charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 284 | $ 128 | $ 1,214 | $ 2,303 |
Restructuring and Impairment _3
Restructuring and Impairment Charges - (Changes in Restructuring Accruals) (Details) - Realignment of Office Furniture Facilities and Exit of Business Line $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring allowance as of December 29, 2018 | $ 286 |
Restructuring charges | 1,214 |
Cash payments | (739) |
Restructuring allowance as of September 28, 2019 | 761 |
Severance Costs | |
Restructuring Reserve [Roll Forward] | |
Restructuring allowance as of December 29, 2018 | 136 |
Restructuring charges | 899 |
Cash payments | (640) |
Restructuring allowance as of September 28, 2019 | 395 |
Facility Exit Costs & Other | |
Restructuring Reserve [Roll Forward] | |
Restructuring allowance as of December 29, 2018 | 150 |
Restructuring charges | 315 |
Cash payments | (99) |
Restructuring allowance as of September 28, 2019 | $ 366 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Inventory Disclosure [Abstract] | ||
Percentage of LIFO Inventory | 73.00% | |
Inventories | ||
Finished products | $ 138,767 | $ 97,398 |
Materials and work in process | 77,269 | 94,161 |
LIFO allowance | (34,114) | (34,381) |
Total inventories | $ 181,922 | $ 157,178 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2018USD ($) | Sep. 28, 2019USD ($)lease_extension | Dec. 30, 2018USD ($) | Dec. 29, 2018USD ($) | |
Sale Leaseback Transaction [Line Items] | ||||
Retained earnings | $ 505,714 | $ 504,909 | ||
Right-of-use Operating / Finance Leases | 74,244 | |||
Lease liability | $ 82,150 | |||
Manufacturing Facility | ||||
Sale Leaseback Transaction [Line Items] | ||||
Deferred gain | $ 5,100 | |||
Term of lease | 10 years | |||
Net proceeds from sale of facility | $ 16,900 | |||
Real Estate | ||||
Sale Leaseback Transaction [Line Items] | ||||
Number of options to extend | lease_extension | 1 | |||
Real Estate | Leased Assets | ||||
Sale Leaseback Transaction [Line Items] | ||||
Lease concentration | 85.00% | |||
Equipment | Leased Assets | ||||
Sale Leaseback Transaction [Line Items] | ||||
Lease concentration | 15.00% | |||
Minimum | Real Estate | ||||
Sale Leaseback Transaction [Line Items] | ||||
Lease extension term | 1 year | |||
Maximum | Real Estate | ||||
Sale Leaseback Transaction [Line Items] | ||||
Lease extension term | 10 years | |||
Impact of Implementation of Lease Guidance | ||||
Sale Leaseback Transaction [Line Items] | ||||
Retained earnings | $ 3,000 | |||
Right-of-use asset and liability calculation offset | 300 | |||
Right-of-use Operating / Finance Leases | 73,800 | |||
Lease liability | 82,000 | |||
Impact of Implementation of Lease Guidance | Manufacturing Facility | ||||
Sale Leaseback Transaction [Line Items] | ||||
Deferred gain | $ 3,300 |
Leases - Leases included in th
Leases - Leases included in the Condensed Consolidated Balance Sheets (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Assets | |
Right-of-use operating leases | $ 72,087 |
Right-of-use finance leases | 2,157 |
Total Right-of-use operating / finance leases | 74,244 |
Current | |
Current lease obligations - operating | 20,506 |
Current lease obligations - finance | 501 |
Total Current lease obligations - operating / finance | 21,007 |
Non-current | |
Long-term lease obligations - operating | 59,474 |
Long-term lease obligations - finance | 1,669 |
Total Long-term lease obligations - operating / finance | 61,143 |
Present value of operating lease and finance lease liabilities | $ 82,150 |
Leases - Lease Costs included
Leases - Lease Costs included in the Condensed Consolidated Statements on Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Finance lease costs | ||
Sublease Income | $ 48 | $ 133 |
Total lease costs | 7,159 | 21,194 |
Cost of sales | ||
Lessee, Lease, Description [Line Items] | ||
Fixed | 438 | 1,366 |
Short-term / variable | 317 | 635 |
Finance lease costs | ||
Amortization | 154 | 307 |
Selling and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Fixed | 5,913 | 18,212 |
Short-term / variable | $ 385 | $ 807 |
Leases - Maturities of Lease L
Leases - Maturities of Lease Liabilities (Details) | Sep. 28, 2019USD ($) |
Operating Leases | |
2019 (remaining portion of year) | $ 6,590,000 |
2020 | 23,521,000 |
2021 | 16,792,000 |
2022 | 11,332,000 |
2023 | 9,388,000 |
Thereafter | 22,531,000 |
Total lease payments | 90,154,000 |
Less: Interest | 10,177,000 |
Present value of operating lease liabilities | 79,977,000 |
Finance Leases | |
2019 (remaining portion of year) | 143,000 |
2020 | 593,000 |
2021 | 564,000 |
2022 | 488,000 |
2023 | 436,000 |
Thereafter | 112,000 |
Total lease payments | 2,336,000 |
Less: Interest | 163,000 |
Present value of finance lease liabilities | 2,173,000 |
Total | |
2019 (remaining portion of year) | 6,733,000 |
2020 | 24,114,000 |
2021 | 17,356,000 |
2022 | 11,820,000 |
2023 | 9,824,000 |
Thereafter | 22,643,000 |
Total lease payments | 92,490,000 |
Less: Interest | 10,340,000 |
Present value of operating lease and finance lease liabilities | 82,150,000 |
Payments for leases with option to extend | 0 |
Operating lease payments related to leases not yet commenced | 0 |
Finance lease payments related to options to extend lease terms | 0 |
Minimum lease payments for leases signed but not yet commenced | $ 0 |
Leases - Weighted-Average Rema
Leases - Weighted-Average Remaining Lease Terms and Discount Rates for Operating and Finance Leases (Details) | Sep. 28, 2019 |
Weighted-Average Discount Rate | |
Operating leases | 4.20% |
Finance leases | 3.60% |
Weighted-Average Remaining Lease Term | |
Operating leases | 5 years 6 months |
Finance leases | 4 years 3 months 18 days |
Leases - Cash Paid for Amounts
Leases - Cash Paid for Amounts Included in the Measurements of Lease Liabilities and Leased Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Cash paid for amounts included in the measurements of lease liabilities: | |
Operating cash flows from operating / finance leases | $ 20,072 |
Financing cash flows from finance leases | 262 |
Leased assets obtained in exchange for new operating / finance lease liabilities | $ 18,387 |
Leases - Disclosures under Top
Leases - Disclosures under Topic 840 (Details) | 12 Months Ended | ||
Dec. 29, 2018USD ($)capital_lease | Dec. 30, 2017USD ($)capital_lease | Dec. 31, 2016USD ($) | |
Operating Leases | |||
2019 | $ 24,387,000 | ||
2020 | 18,250,000 | ||
2021 | 13,324,000 | ||
2022 | 9,082,000 | ||
2023 | 6,228,000 | ||
Thereafter | 10,469,000 | ||
Total minimum lease payments | $ 81,740,000 | ||
Number of capitalized leases | capital_lease | 0 | 0 | |
Rent expense | $ 31,027,000 | $ 32,158,000 | $ 35,288,000 |
Contingent rent expense under operating leases | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 270,781 | $ 270,788 |
Definite-lived intangible assets | 149,732 | 163,714 |
Indefinite-lived intangible assets | 28,775 | 28,788 |
Total goodwill and other intangible assets | $ 449,288 | $ 463,290 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Goodwill) (Details) $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | $ 315,307 |
Accumulated impairment losses, beginning balance | (44,519) |
Goodwill, net, beginning balance | 270,788 |
Foreign currency translation adjustments | (7) |
Goodwill, gross, ending balance | 315,300 |
Accumulated impairment losses, ending balance | (44,519) |
Goodwill, net, ending balance | 270,781 |
Office Furniture | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 128,645 |
Accumulated impairment losses, beginning balance | (44,376) |
Goodwill, net, beginning balance | 84,269 |
Foreign currency translation adjustments | (7) |
Goodwill, gross, ending balance | 128,638 |
Accumulated impairment losses, ending balance | (44,376) |
Goodwill, net, ending balance | 84,262 |
Hearth Products | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 186,662 |
Accumulated impairment losses, beginning balance | (143) |
Goodwill, net, beginning balance | 186,519 |
Foreign currency translation adjustments | 0 |
Goodwill, gross, ending balance | 186,662 |
Accumulated impairment losses, ending balance | (143) |
Goodwill, net, ending balance | $ 186,519 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 285,957 | $ 281,718 |
Accumulated Amortization | 136,225 | 118,004 |
Net | 149,732 | 163,714 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 40 | 40 |
Accumulated Amortization | 40 | 34 |
Net | 0 | 6 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 174,550 | 170,274 |
Accumulated Amortization | 63,097 | 49,561 |
Net | 111,453 | 120,713 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 7,564 | 7,564 |
Accumulated Amortization | 3,216 | 2,721 |
Net | 4,348 | 4,843 |
Customer lists and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 103,803 | 103,840 |
Accumulated Amortization | 69,872 | 65,688 |
Net | $ 33,931 | $ 38,152 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Capitalized software | $ 4,479 | $ 4,290 | $ 13,686 | $ 12,734 |
Other definite-lived intangibles | $ 1,571 | $ 1,642 | $ 4,716 | $ 4,972 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Millions | Sep. 28, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 24.4 |
2020 | 23.4 |
2021 | 22.3 |
2022 | 19.6 |
2023 | $ 17.2 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets (Indefinite Lived Intangible Assets) (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 28,775 | $ 28,788 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 28,775 | $ 28,788 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 15,450 | $ 15,388 |
Accruals for warranties issued during period | 15,406 | 22,130 |
Adjustments related to pre-existing warranties | 127 | 116 |
Warranty issues resolved during the period | (15,377) | (22,203) |
Balance at end of period | $ 15,606 | $ 15,431 |
Product Warranties - Current an
Product Warranties - Current and Long Term Warranty (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 | Sep. 29, 2018 | Dec. 30, 2017 |
Product Warranties Disclosures [Abstract] | ||||
Current - in the next twelve months | $ 9,538 | $ 9,455 | ||
Long-term - beyond one year | 6,068 | 5,995 | ||
Total | $ 15,606 | $ 15,450 | $ 15,431 | $ 15,388 |
Long-Term Debt Schedule of Long
Long-Term Debt Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 | May 31, 2018 |
Debt Instrument [Line Items] | |||
Total debt | $ 240,858 | $ 250,034 | |
Deferred debt issuance costs | (582) | (645) | |
Current maturities of long-term debt | 1,440 | 679 | |
Long-term debt | $ 239,418 | $ 249,355 | |
Revolving credit facility with interest at a variable rate (September 28, 2019 - 3.2%; December 29, 2018 - 3.5%) | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.20% | 3.50% | |
Total debt | $ 140,000 | $ 150,000 | |
Fixed rate notes due in 2025 with an interest rate of 4.22% | |||
Debt Instrument [Line Items] | |||
Total debt | 50,000 | 50,000 | |
Fixed rate notes due in 2028 with an interest rate of 4.40% | |||
Debt Instrument [Line Items] | |||
Total debt | 50,000 | 50,000 | |
Other amounts | |||
Debt Instrument [Line Items] | |||
Total debt | $ 1,440 | $ 679 | |
Fixed rate notes due in 2025 with an interest rate of 4.22% | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.22% | 4.22% | |
Fixed rate notes due in 2028 with an interest rate of 4.40% | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.40% | 4.40% |
Long-Term Debt Narrative (Detai
Long-Term Debt Narrative (Details) - USD ($) | May 31, 2018 | Sep. 28, 2019 |
Debt Instrument [Line Items] | ||
Deferred debt issuance costs, current | $ 400,000 | |
Deferred debt issuance costs, noncurrent | 1,100,000 | |
Revolving credit facility with interest at a variable rate (September 28, 2019 - 3.2%; December 29, 2018 - 3.5%) | ||
Debt Instrument [Line Items] | ||
Long-term line of credit outstanding | 140,000,000 | |
Line of credit maximum borrowing capacity | 450,000,000 | |
Line of credit remaining borrowing capacity | $ 310,000,000 | |
Ratio of interest coverage to earnings for the last four fiscal quarters | 4 | |
Ratio of leverage to earnings for the last four fiscal quarters | 3.5 | |
Private Placement | ||
Debt Instrument [Line Items] | ||
Deferred debt issuance costs, noncurrent | $ 600,000 | |
Borrowings | $ 100,000,000 | |
Fixed rate notes due in 2025 with an interest rate of 4.22% | ||
Debt Instrument [Line Items] | ||
Borrowings | $ 50,000,000 | |
Note term | 7 years | |
Interest rate | 4.22% | 4.22% |
Fixed rate notes due in 2028 with an interest rate of 4.40% | ||
Debt Instrument [Line Items] | ||
Borrowings | $ 50,000,000 | |
Note term | 10 years | |
Interest rate | 4.40% | 4.40% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 58,451 | $ 51,104 | $ 80,786 | $ 76,997 |
Income taxes | $ 12,375 | $ 11,197 | $ 17,878 | $ 16,033 |
Effective tax rate | 21.20% | 21.90% | 22.10% | 20.80% |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 30, 2019 | Sep. 28, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of Stranded Tax Effects (ASU 2018-02) | $ 0 | |
Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of Stranded Tax Effects (ASU 2018-02) | $ 700 | $ 739 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets) (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents (including money market funds) | $ 53,013 | $ 76,819 |
Fair value, measurements, recurring | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents (including money market funds) | 53,013 | 76,819 |
Derivative financial instruments - asset | 166 | |
Derivative financial instruments - liability | 341 | |
Derivative financial instruments | 3,797 | |
Deferred stock-based compensation | 7,057 | 7,857 |
Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents (including money market funds) | 53,013 | 76,819 |
Derivative financial instruments - asset | 0 | |
Derivative financial instruments - liability | 0 | |
Derivative financial instruments | 0 | |
Deferred stock-based compensation | 0 | 0 |
Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents (including money market funds) | 0 | 0 |
Derivative financial instruments - asset | 166 | |
Derivative financial instruments - liability | 341 | |
Derivative financial instruments | 3,797 | |
Deferred stock-based compensation | 7,057 | 7,857 |
Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents (including money market funds) | 0 | 0 |
Derivative financial instruments - asset | 0 | |
Derivative financial instruments - liability | 0 | |
Derivative financial instruments | 0 | |
Deferred stock-based compensation | 0 | 0 |
Fair value, measurements, recurring | Government securities | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 6,580 | 7,384 |
Fair value, measurements, recurring | Government securities | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | 0 |
Fair value, measurements, recurring | Government securities | Significant other observable inputs (Level 2) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 6,580 | 7,384 |
Fair value, measurements, recurring | Government securities | Significant unobservable inputs (Level 3) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | 0 |
Fair value, measurements, recurring | Corporate Bonds | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 6,474 | 4,620 |
Fair value, measurements, recurring | Corporate Bonds | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | 0 |
Fair value, measurements, recurring | Corporate Bonds | Significant other observable inputs (Level 2) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 6,474 | 4,620 |
Fair value, measurements, recurring | Corporate Bonds | Significant unobservable inputs (Level 3) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale debt securities | 0 | 0 |
Variable Rate Debt Obligation | Fair value, measurements, recurring | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 140,000 | 150,000 |
Variable Rate Debt Obligation | Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 0 | 0 |
Variable Rate Debt Obligation | Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 140,000 | 150,000 |
Variable Rate Debt Obligation | Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 0 | 0 |
Fixed Rate Debt Obligation | Fair value, measurements, recurring | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 100,000 | 100,000 |
Fixed Rate Debt Obligation | Fair value, measurements, recurring | Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 0 | 0 |
Fixed Rate Debt Obligation | Fair value, measurements, recurring | Significant other observable inputs (Level 2) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | 100,000 | 100,000 |
Fixed Rate Debt Obligation | Fair value, measurements, recurring | Significant unobservable inputs (Level 3) | ||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt obligations | $ 0 | $ 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity (Components) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 563,259 | $ 514,577 |
Other comprehensive income (loss) before reclassifications | (2,359) | 524 |
Tax (expense) or benefit | 594 | (609) |
Reclassification of stranded tax impact | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (947) | (499) |
Ending balance | 560,345 | 553,074 |
Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (2,973) | 31 |
Other comprehensive income (loss) before reclassifications | (406) | (1,944) |
Tax (expense) or benefit | 0 | 0 |
Reclassification of stranded tax impact | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | (3,379) | (1,913) |
Unrealized Gains (Losses) on Marketable Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (156) | (132) |
Other comprehensive income (loss) before reclassifications | 319 | (125) |
Tax (expense) or benefit | (67) | 26 |
Reclassification of stranded tax impact | 0 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | 96 | (231) |
Pension and Post-retirement Liabilities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (2,929) | (5,630) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Tax (expense) or benefit | 0 | 0 |
Reclassification of stranded tax impact | (1,185) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | (4,114) | (5,630) |
Derivative Financial Instruments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 2,459 | |
Other comprehensive income (loss) before reclassifications | (2,272) | |
Tax (expense) or benefit | 661 | |
Reclassification of stranded tax impact | 446 | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (947) | |
Ending balance | 347 | |
Derivative Financial Instruments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 2,120 | |
Other comprehensive income (loss) before reclassifications | 2,593 | |
Tax (expense) or benefit | (635) | |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (499) | |
Ending balance | 3,579 | |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (3,599) | (3,611) |
Reclassification of stranded tax impact | (739) | |
Ending balance | $ (7,050) | $ (4,195) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity (Narrative) (Details) - USD ($) | 1 Months Ended | |||
Aug. 31, 2019 | Sep. 28, 2019 | Dec. 29, 2018 | Mar. 31, 2016 | |
Class of Stock [Line Items] | ||||
Accumulated other comprehensive income (loss) | $ (7,050,000) | $ (3,599,000) | ||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Stock repurchase program, remaining authorized repurchase amount | 183,700,000 | |||
Interest rate swap | ||||
Class of Stock [Line Items] | ||||
Derivative, notional amount | $ 75,000,000 | $ 150,000,000 | ||
Derivative, fixed interest rate | 1.42% | 1.29% | ||
Proceeds from derivative instrument | $ 500,000 | |||
Gain from termination of interest rate swap | $ 500,000 | |||
Derivative asset | 200,000 | |||
Derivative liability | 300,000 | |||
Accumulated other comprehensive income (loss) | $ 300,000 |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity (Reclassification) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Tax (expense) or benefit | $ (12,375) | $ (11,197) | $ (17,878) | $ (16,033) |
Net of tax | 46,078 | 39,907 | 62,910 | 61,014 |
Interest rate swap | Reclassifications from accumulated other comprehensive income (loss) | Derivative Financial Instruments | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest (expense) or income | 315 | 305 | 1,220 | 661 |
Tax (expense) or benefit | (60) | (75) | (273) | (162) |
Net of tax | $ 255 | $ 230 | $ 947 | $ 499 |
Accumulated Other Comprehensi_6
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity - Dividends Declared (Details) - $ / shares | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Equity [Abstract] | ||
Cash dividends per common share (in dollars per share) | $ 0.905 | $ 0.875 |
Accumulated Other Comprehensi_7
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity (Stock Repurchases) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Average Price Per Share (in dollars per share) | $ 36.09 | $ 40.36 |
Shares repurchased per cash flow | $ (65,106) | $ (16,043) |
Common Stock | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Repurchased common stock (in shares) | 1,797,000 | 369,000 |
Cash purchase price | $ (64,877) | $ (14,884) |
Purchases unsettled as of quarter end | 125 | 222 |
Prior year purchases settled in current year | (354) | (1,381) |
Shares repurchased per cash flow | $ (65,106) | $ (16,043) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Numerator: | ||||
Numerator for both basic and diluted EPS attributable to HNI Corporation net income | $ 46,078 | $ 39,907 | $ 62,910 | $ 61,014 |
Denominators: | ||||
Denominator for basic EPS weighted-average common shares outstanding (in shares) | 42,899 | 43,823 | 43,217 | 43,616 |
Potentially dilutive shares from stock-based compensation plans (in shares) | 287 | 856 | 403 | 733 |
Denominator for diluted EPS (in shares) | 43,186 | 44,679 | 43,620 | 44,349 |
Earnings per share - basic (in dollars per share) | $ 1.07 | $ 0.91 | $ 1.46 | $ 1.40 |
Earnings per share - diluted (in dollars per share) | $ 1.07 | $ 0.89 | $ 1.44 | $ 1.38 |
Earnings Per Share Antidilutive
Earnings Per Share Antidilutive Securities Excluded from Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Common stock equivalents excluded because their inclusion would be anti-dilutive (in thousands) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,731 | 1,273 | 2,118 | 1,474 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | $ 1,336 | $ 1,307 | $ 5,408 | $ 6,215 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | 6,211 | 7,200 | ||
Unrecognized compensation cost | 4,237 | $ 4,237 | ||
Weighted-Average Remaining Service Period (years) | 1 year 1 month 6 days | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 361 | $ 76 | ||
Unrecognized compensation cost | $ 516 | $ 516 | ||
Weighted-Average Remaining Service Period (years) | 1 year 1 month 6 days |
Post-Retirement Health Care (De
Post-Retirement Health Care (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 170 | $ 213 | $ 510 | $ 639 |
Interest cost | 199 | 197 | 596 | 591 |
Amortization of net (gain) loss | 0 | 32 | 0 | 95 |
Net periodic post-retirement benefit cost | $ 369 | $ 442 | $ 1,106 | $ 1,325 |
Guarantees, Commitments and C_2
Guarantees, Commitments and Contingencies (Details) $ in Millions | Sep. 28, 2019USD ($) |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of credit | $ 25 |
Trade Letters Of Credit And Bankers Acceptances | |
Line of Credit Facility [Line Items] | |
Letters of credit | $ 2 |
Reportable Segment Informatio_2
Reportable Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019USD ($) | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)segment | Sep. 29, 2018USD ($) | Dec. 29, 2018USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Net sales | $ 625,386 | $ 611,120 | $ 1,630,868 | $ 1,659,803 | |
Operating income | 60,656 | 53,626 | 87,581 | 84,372 | |
Interest expense, net | 2,205 | 2,522 | 6,795 | 7,375 | |
Income before income taxes | 58,451 | 51,104 | 80,786 | 76,997 | |
Depreciation and amortization | 19,386 | 18,607 | 57,838 | 55,887 | |
Capital Expenditures (including capitalized software): | 12,584 | 14,655 | 50,191 | 46,979 | |
Identifiable Assets: | 1,470,476 | 1,470,476 | $ 1,401,844 | ||
Operating segments | Office Furniture | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 484,755 | 471,687 | 1,247,778 | 1,276,480 | |
Operating income | 51,162 | 45,721 | 68,180 | 64,898 | |
Depreciation and amortization | 11,232 | 11,012 | 33,540 | 33,202 | |
Capital Expenditures (including capitalized software): | 6,524 | 10,324 | 29,190 | 35,321 | |
Identifiable Assets: | 872,501 | 872,501 | 797,574 | ||
Operating segments | Hearth Products | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 140,631 | 139,433 | 383,090 | 383,323 | |
Operating income | 23,772 | 21,824 | 54,743 | 55,250 | |
Depreciation and amortization | 2,291 | 2,026 | 6,521 | 6,080 | |
Capital Expenditures (including capitalized software): | 3,204 | 2,150 | 10,779 | 6,317 | |
Identifiable Assets: | 379,534 | 379,534 | 352,060 | ||
General corporate | |||||
Segment Reporting Information [Line Items] | |||||
Operating income | (14,278) | (13,919) | (35,342) | (35,776) | |
Depreciation and amortization | 5,863 | 5,569 | 17,777 | 16,605 | |
Capital Expenditures (including capitalized software): | 2,856 | $ 2,181 | 10,222 | $ 5,341 | |
Identifiable Assets: | $ 218,441 | $ 218,441 | $ 252,210 |
Uncategorized Items - a10-qq320
Label | Element | Value |
Accounting Standards Update 2016-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,999,000 |
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,999,000 |