COVER PAGE
COVER PAGE | 6 Months Ended |
Jul. 03, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jul. 3, 2021 |
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 | 43,875,200 |
Entity Central Index Key | 0000048287 |
Amendment Flag | false |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q2 |
Current Fiscal Year End Date | --01-01 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 510,455 | $ 417,456 | $ 994,748 | $ 886,161 |
Cost of sales | 322,593 | 266,551 | 626,940 | 559,238 |
Gross profit | 187,862 | 150,905 | 367,808 | 326,923 |
Selling and administrative expenses | 163,175 | 136,063 | 320,521 | 303,148 |
Impairment charges | 0 | 0 | 0 | 32,661 |
Operating income (loss) | 24,687 | 14,842 | 47,287 | (8,886) |
Interest expense, net | 1,857 | 1,943 | 3,612 | 3,754 |
Income (loss) before income taxes | 22,830 | 12,899 | 43,675 | (12,640) |
Income taxes | 5,418 | 345 | 11,245 | (1,299) |
Net income (loss) | 17,412 | 12,554 | 32,430 | (11,341) |
Less: Net loss attributable to non-controlling interest | (2) | (2) | (3) | (2) |
Net income (loss) attributable to HNI Corporation | $ 17,414 | $ 12,556 | $ 32,433 | $ (11,339) |
Average number of common shares outstanding – basic (in shares) | 43,776 | 42,640 | 43,469 | 42,634 |
Net income (loss) attributable to HNI Corporation per common share – basic (in dollars per share) | $ 0.40 | $ 0.29 | $ 0.75 | $ (0.27) |
Average number of common shares outstanding – diluted (in shares) | 44,481 | 42,929 | 43,986 | 42,634 |
Net income (loss) attributable to HNI Corporation per common share – diluted (in dollars per share) | $ 0.39 | $ 0.29 | $ 0.74 | $ (0.27) |
Foreign currency translation adjustments | $ 194 | $ 45 | $ 62 | $ (555) |
Change in unrealized gains (losses) on marketable securities, net of tax | (25) | 244 | (125) | 302 |
Change in derivative financial instruments, net of tax | 143 | (283) | 406 | (2,499) |
Other comprehensive income (loss), net of tax | 312 | 6 | 343 | (2,752) |
Comprehensive income (loss) | 17,724 | 12,560 | 32,773 | (14,093) |
Less: Comprehensive loss attributable to non-controlling interest | (2) | (2) | (3) | (2) |
Comprehensive income (loss) attributable to HNI Corporation | $ 17,726 | $ 12,562 | $ 32,776 | $ (14,091) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 118,498 | $ 116,120 |
Short-term investments | 102 | 1,687 |
Receivables | 213,925 | 207,971 |
Allowance for doubtful accounts | (4,365) | (5,514) |
Inventories | 187,467 | 137,811 |
Prepaid expenses and other current assets | 47,571 | 37,660 |
Total Current Assets | 563,198 | 495,735 |
Property, Plant, and Equipment: | ||
Land and land improvements | 29,974 | 29,691 |
Buildings | 293,842 | 293,708 |
Machinery and equipment | 580,730 | 578,643 |
Construction in progress | 24,310 | 17,750 |
Property plant and equipment, at cost | 928,856 | 919,792 |
Less accumulated depreciation | 568,551 | 553,835 |
Net Property, Plant, and Equipment | 360,305 | 365,957 |
Right-of-use Finance Leases | 9,671 | 6,095 |
Right-of-use Operating Leases | 66,254 | 70,219 |
Goodwill and Other Intangible Assets | 451,624 | 458,896 |
Other Assets | 26,136 | 21,130 |
Total Assets | 1,477,188 | 1,418,032 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 420,706 | 413,638 |
Current maturities of long-term debt | 3,955 | 841 |
Current maturities of other long-term obligations | 4,119 | 2,990 |
Current lease obligations - finance | 2,439 | 1,589 |
Current lease obligations - operating | 19,680 | 19,970 |
Total Current Liabilities | 450,899 | 439,028 |
Long-Term Debt | 174,566 | 174,524 |
Long-Term Lease Obligations - Finance | 7,193 | 4,516 |
Long-Term Lease Obligations - Operating | 50,710 | 53,249 |
Other Long-Term Liabilities | 85,710 | 81,264 |
Deferred Income Taxes | 73,327 | 74,706 |
Total Liabilities | 842,405 | 827,287 |
Equity: | ||
HNI Corporation shareholders' equity | 634,460 | 590,419 |
Non-controlling interest | 323 | 326 |
Total Equity | 634,783 | 590,745 |
Total Liabilities and Equity | $ 1,477,188 | $ 1,418,032 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period Of Adoption, Adjustment | Dividend Declared | Dividend Paid | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative Effect, Period Of Adoption, Adjustment | Retained EarningsDividend Declared | Retained EarningsDividend Paid | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest |
Beginning balance at Dec. 28, 2019 | $ 584,368 | $ (131) | $ 42,595 | $ 19,799 | $ 529,723 | $ (131) | $ (8,073) | $ 324 | ||||
Comprehensive income: | ||||||||||||
Net income (loss) | (11,341) | (11,339) | (2) | |||||||||
Other comprehensive income (loss), net of tax | (2,752) | (2,752) | ||||||||||
Dividends | $ (116) | $ (26,040) | $ (116) | $ (26,040) | ||||||||
Common shares – treasury: | ||||||||||||
Shares purchased | (6,390) | (214) | (4,988) | (1,188) | ||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 15,471 | 294 | 15,177 | |||||||||
Ending balance at Jun. 27, 2020 | 553,069 | 42,675 | 29,988 | 490,909 | (10,825) | 322 | ||||||
Beginning balance at Mar. 28, 2020 | 551,655 | 42,647 | 28,086 | 491,429 | (10,830) | 323 | ||||||
Comprehensive income: | ||||||||||||
Net income (loss) | 12,554 | 12,556 | (2) | |||||||||
Other comprehensive income (loss), net of tax | 6 | 6 | ||||||||||
Dividends | (70) | (13,006) | (70) | (13,006) | ||||||||
Common shares – treasury: | ||||||||||||
Shares purchased | (650) | (28) | (622) | |||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 2,580 | 56 | 2,524 | |||||||||
Ending balance at Jun. 27, 2020 | 553,069 | 42,675 | 29,988 | 490,909 | (10,825) | 322 | ||||||
Beginning balance at Jan. 02, 2021 | 590,745 | 42,919 | 38,659 | 517,994 | (9,153) | 326 | ||||||
Comprehensive income: | ||||||||||||
Net income (loss) | 32,430 | 32,433 | (3) | |||||||||
Other comprehensive income (loss), net of tax | 343 | 343 | ||||||||||
Dividends | (527) | (26,780) | (527) | (26,780) | ||||||||
Common shares – treasury: | ||||||||||||
Shares purchased | (6,718) | (156) | (6,562) | |||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 45,290 | 1,112 | 44,178 | |||||||||
Ending balance at Jul. 03, 2021 | 634,783 | 43,875 | 76,275 | 523,120 | (8,810) | 323 | ||||||
Beginning balance at Apr. 03, 2021 | 617,761 | 43,552 | 63,447 | 519,559 | (9,122) | 325 | ||||||
Comprehensive income: | ||||||||||||
Net income (loss) | 17,412 | 17,414 | (2) | |||||||||
Other comprehensive income (loss), net of tax | 312 | 312 | ||||||||||
Dividends | $ (246) | $ (13,607) | $ (246) | $ (13,607) | ||||||||
Common shares – treasury: | ||||||||||||
Shares purchased | (6,718) | (156) | (6,562) | |||||||||
Shares issued under Members' Stock Purchase Plan and stock awards, net of tax | 19,869 | 479 | 19,390 | |||||||||
Ending balance at Jul. 03, 2021 | $ 634,783 | $ 43,875 | $ 76,275 | $ 523,120 | $ (8,810) | $ 323 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends (in dollars per share) | $ 0.310 | $ 0.305 | $ 0.615 | $ 0.610 |
Cash dividends (in dollars per share) | $ 0.310 | $ 0.305 | $ 0.615 | $ 0.610 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Net Cash Flows From (To) Operating Activities: | ||
Net income (loss) | $ 32,430 | $ (11,341) |
Non-cash items included in net income: | ||
Depreciation and amortization | 41,139 | 38,605 |
Other post-retirement and post-employment benefits | 664 | 736 |
Stock-based compensation | 7,788 | 5,659 |
Reduction in carrying amount of right-of-use assets | 13,081 | 11,342 |
Deferred income taxes | (1,430) | 1,092 |
Impairment of goodwill and intangible assets | 0 | 32,661 |
Other – net | 3,211 | (284) |
Net increase (decrease) in cash from operating assets and liabilities | (62,905) | (49,631) |
Increase (decrease) in other liabilities | 3,305 | (1,019) |
Net cash flows from (to) operating activities | 37,283 | 27,820 |
Net Cash Flows From (To) Investing Activities: | ||
Capital expenditures | (26,215) | (15,739) |
Proceeds from sale of property, plant, and equipment | 151 | 69 |
Capitalized software | (6,078) | (5,037) |
Acquisition spending, net of cash acquired | (1,529) | (10,857) |
Purchase of investments | (2,375) | (1,631) |
Sales or maturities of investments | 2,393 | 1,043 |
Net cash flows from (to) investing activities | (33,653) | (32,152) |
Net Cash Flows From (To) Financing Activities: | ||
Payments of long-term debt | (648) | (73,828) |
Proceeds from long-term debt | 3,785 | 82,129 |
Dividends paid | (26,841) | (26,040) |
Purchase of HNI Corporation common stock | (6,543) | (6,764) |
Proceeds from sales of HNI Corporation common stock | 29,320 | 1,294 |
Other – net | (325) | 1,672 |
Net cash flows from (to) financing activities | (1,252) | (21,537) |
Net increase (decrease) in cash and cash equivalents | 2,378 | (25,869) |
Cash and cash equivalents at beginning of period | 116,120 | 52,073 |
Cash and cash equivalents at end of period | $ 118,498 | $ 26,204 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jul. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThe 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 January 2, 2021, 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 six-month period ended July 3, 2021, are not necessarily indicative of the results expected for the fiscal year ending January 1, 2022. 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 January 2, 2021. 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 | 6 Months Ended |
Jul. 03, 2021 | |
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 product category is as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Systems and storage $ 200,733 $ 167,007 $ 383,537 $ 371,028 Seating 116,887 114,772 217,241 230,644 Other 26,517 26,302 46,107 44,795 Total workplace furnishings 344,137 308,081 646,885 646,467 Residential building products 166,318 109,375 347,863 239,694 Net sales $ 510,455 $ 417,456 $ 994,748 $ 886,161 Sales by product category are subject to similar economic factors and market conditions. See “Note 15. 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 workplace furnishings 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. For contracts with a duration of less than one year, the Corporation has elected the practical expedient to recognize incremental costs to obtain a contract as an expense when incurred. 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): July 3, January 2, Trade receivables (1) $ 213,925 $ 207,971 Contract assets (current) (2) $ 761 $ 761 Contract assets (long-term) (3) $ 1,980 $ 2,486 Contract liabilities (4) $ 57,481 $ 53,070 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" 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 contract liability balance related to customer deposits was $21.1 million as of January 2, 2021, all of which was recognized as revenue in the first quarter of 2021. Performance Obligations The Corporation recognizes revenue for sales of workplace furnishings and residential building 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 cancellable 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 period end. The backlog is typically fulfilled within a few months. 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. |
Acquisitions
Acquisitions | 6 Months Ended |
Jul. 03, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions During the first quarter of 2021, the Corporation acquired the assets of a residential building products distributor in an all-cash deal. The aggregate purchase price was approximately $1.6 million, and includes $1.2 million of tax deductible goodwill. The purchase accounting is complete, and the remaining assets and liabilities acquired were not material. On December 31, 2020, the Corporation acquired Design Public Group ("DPG"), a leading e-Commerce distributor of high-design furniture and accessories for the office and home. This transaction, which was structured as an asset acquisition and consummated entirely in cash of approximately $50 million, aligns with the Corporation's long-term strategies related to digital and e-Commerce initiatives. DPG's assets and liabilities are included in the Corporation's workplace furnishings segment, and goodwill, which is expected to be tax-deductible, is assigned to its own reporting unit. The provisional DPG purchase price allocation and estimated amortization periods of identified intangible assets as of the date of acquisition is as follows (dollars in thousands): Fair Value Weighted Average Amortization Period Inventories $ 971 Receivables 4 Prepaid expenses and other current assets 597 Accounts payable and accrued expenses (8,035) Goodwill 34,084 Customer lists 11,500 11 years Software 5,500 5 years Trade names 5,200 10 years Other intangible assets 300 3 years Total net assets $ 50,121 The provisional purchase accounting remains open with respect to the valuation of intangible assets and goodwill. The valuation analysis requires the use of complex management estimates and assumptions such as future cash flows, discount rates, royalty rates, long-term growth rates, and technology build costs. As a result of further review and refinement of certain valuation assumptions, measurement period adjustments were recorded in the second quarter of 2021 that increased working capital by $0.3 million, customer lists by $1.8 million, software by $1.7 million, trade names by $1.8 million, and other intangible assets by $0.1 million; goodwill was decreased by $5.7 million. The portions of the allocation that are provisional may be adjusted to reflect the finally determined amounts. The Corporation expects to finalize the purchase price allocation later in 2021. All transactions disclosed above were deemed to be acquisitions of businesses, and were accounted for using the acquisition method pursuant to ASC 805, with goodwill being recorded as a result of future cash flows and related fair value exceeding the fair value of the identified assets and liabilities. |
Inventories
Inventories | 6 Months Ended |
Jul. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The Corporation values its inventory at the lower of cost or net realizable value. Inventories included in the Condensed Consolidated Balance Sheets consisted of the following (in thousands): July 3, January 2, Finished products $ 143,921 $ 98,527 Materials and work in process 74,526 70,264 Last-in, first-out ("LIFO") allowance (30,980) (30,980) Total inventories $ 187,467 $ 137,811 Inventory valued by the LIFO costing method 75 % 75 % |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jul. 03, 2021 | |
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): July 3, January 2, Goodwill $ 287,938 $ 292,434 Definite-lived intangible assets 137,107 139,863 Indefinite-lived intangible assets 26,579 26,599 Total goodwill and other intangible assets $ 451,624 $ 458,896 Goodwill The changes in the carrying amount of goodwill, by reporting segment, are as follows (in thousands): Workplace Furnishings Residential Building Products Total Balance as of January 2, 2021 Goodwill $ 168,477 $ 196,976 $ 365,453 Accumulated impairment losses (72,876) (143) (73,019) Net goodwill balance as of January 2, 2021 95,601 196,833 292,434 Goodwill acquired / measurement period adjustments (5,716) 1,220 (4,496) Balance as of July 3, 2021 Goodwill 162,761 198,196 360,957 Accumulated impairment losses (72,876) (143) (73,019) Net goodwill balance as of July 3, 2021 $ 89,885 $ 198,053 $ 287,938 See "Note 3. Acquisitions" for additional information regarding goodwill acquired and related adjustments in the year-to-date period. 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): July 3, 2021 January 2, 2021 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Software $ 190,355 $ 90,046 $ 100,309 $ 182,127 $ 78,619 $ 103,508 Trademarks and trade names 11,764 4,073 7,691 9,964 3,546 6,418 Customer lists and other 92,847 63,740 29,107 91,002 61,065 29,937 Net definite-lived intangible assets $ 294,966 $ 157,859 $ 137,107 $ 283,093 $ 143,230 $ 139,863 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 Six Months Ended July 3, June 27, July 3, June 27, Capitalized software $ 5,804 $ 4,828 $ 11,427 $ 9,378 Other definite-lived intangibles $ 1,630 $ 1,152 $ 3,255 $ 2,675 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 years is as follows (in millions): 2021 2022 2023 2024 2025 Amortization expense $ 29.4 $ 26.3 $ 22.2 $ 18.4 $ 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): July 3, January 2, Trademarks and trade names $ 26,579 $ 26,599 The immaterial change in the indefinite-lived intangible assets balances shown above is related to foreign currency translation impacts. Impairment Analysis |
Product Warranties
Product Warranties | 6 Months Ended |
Jul. 03, 2021 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | Product Warranties The Corporation issues certain warranty policies on its workplace furnishings and residential building 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 claims expected to be incurred based on historical claims 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): Six Months Ended July 3, June 27, Balance at beginning of period $ 16,109 $ 15,865 Accruals for warranties issued during period 4,471 4,626 Adjustments related to pre-existing warranties — (272) Settlements made during the period (4,029) (5,076) Balance at end of period $ 16,551 $ 15,143 The current and long-term portions of the allowance for estimated settlements are included 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 settlements are expected to be paid (in thousands): July 3, January 2, Current - in the next twelve months $ 5,953 $ 5,918 Long-term - beyond one year 10,598 10,191 Total $ 16,551 $ 16,109 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt is as follows (in thousands): July 3, January 2, Revolving credit facility with interest at a variable rate (July 3, 2021 - 1.1%; January 2, 2021 - 1.2%) $ 75,000 $ 75,000 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 3,955 841 Deferred debt issuance costs (434) (476) Total debt 178,521 175,365 Less: Current maturities of long-term debt 3,955 841 Long-term debt $ 174,566 $ 174,524 The carrying value of the Corporation's outstanding variable-rate, long-term debt obligations at July 3, 2021, was $75 million, which approximated fair value. The fair value of the fixed rate notes was estimated based on a discounted cash flow method (Level 2) to be $116 million at July 3, 2021. As of July 3, 2021, 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 $0.3 million is reflected in "Other Assets" in the Condensed Consolidated Balance Sheets. As of July 3, 2021, there was $75 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 $375 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, 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 July 3, 2021, the debt issuance costs balance of $0.4 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 July 3, 2021, 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 | 6 Months Ended |
Jul. 03, 2021 | |
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 Six Months Ended July 3, June 27, July 3, June 27, Income (loss) before income taxes $ 22,830 $ 12,899 $ 43,675 $ (12,640) Income taxes $ 5,418 $ 345 $ 11,245 $ (1,299) Effective tax rate 23.7 % 2.7 % 25.7 % 10.3 % The Corporation's effective tax rate was higher in the three and six months ended July 3, 2021, compared to the same periods last year. The variance was driven by higher income and an improved full year 2021 income outlook, relative to the prior-year performance and full year outlook which was adversely impacted by the onset of the COVID-19 pandemic, resulting in asset impairment charges and other one-time costs recorded in the U.S. jurisdictions. These factors drove a greater rate benefit from tax credits in the prior-year periods. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 6 Months Ended |
Jul. 03, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Financial Instruments | Fair Value Measurements of Financial InstrumentsFor recognition purposes, on a recurring basis, the Corporation is required to measure at fair value its marketable securities, derivative financial instruments, 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 Significant other observable inputs Significant unobservable inputs Balance as of July 3, 2021 Cash and cash equivalents (including money market funds) (1) $ 118,498 $ 118,498 $ — $ — Government securities (2) $ 5,573 $ — $ 5,573 $ — Corporate bonds (2) $ 7,844 $ — $ 7,844 $ — Derivative financial instruments - liability (3) $ 1,766 $ — $ 1,766 $ — Deferred stock-based compensation (4) $ 8,204 $ — $ 8,204 $ — Balance as of January 2, 2021 Cash and cash equivalents (including money market funds) (1) $ 116,120 $ 116,120 $ — $ — Government securities (2) $ 6,371 $ — $ 6,371 $ — Corporate bonds (2) $ 7,228 $ — $ 7,228 $ — Derivative financial instruments - liability (3) $ 2,328 $ — $ 2,328 $ — Deferred stock-based compensation (4) $ 7,207 $ — $ 7,207 $ — 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 - "Accounts payable and accrued expenses"; Long-term portion - "Other Long-Term Liabilities" (4) 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 | 6 Months Ended |
Jul. 03, 2021 | |
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 Debt Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of January 2, 2021 $ (1,071) $ 360 $ (6,682) $ (1,760) $ (9,153) Other comprehensive income (loss) before reclassifications 62 (158) — 68 (28) Tax (expense) or benefit — 33 — (16) 17 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — 354 354 Balance as of July 3, 2021 $ (1,009) $ 235 $ (6,682) $ (1,354) $ (8,810) Amounts in parentheses indicate reductions to equity. Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Debt Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of December 28, 2019 $ (2,912) $ 95 $ (5,762) $ 506 $ (8,073) Other comprehensive income (loss) before reclassifications (555) 382 — (3,229) (3,402) Tax (expense) or benefit — (80) — 759 679 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — (29) (29) Balance as of June 27, 2020 $ (3,467) $ 397 $ (5,762) $ (1,993) $ (10,825) Amounts in parentheses indicate reductions to equity. Interest Rate Swap In 2019, the Corporation entered into an 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 April 2023. As of July 3, 2021, the fair value of the Corporation's interest rate swap liability was $1.8 million. The unrecognized change in value of the interest rate swap is reported net of tax as $(1.4) 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 Six Months Ended Details about Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Statement Where Net Income is Presented July 3, June 27, July 3, June 27, Derivative financial instruments Interest rate swap Interest expense, net $ (249) $ (74) $ (463) $ 40 Income taxes 59 (5) 109 (11) Net of tax $ (190) $ (79) $ (354) $ 29 Amounts in parentheses indicate reductions to profit. Dividend The Corporation declared and paid cash dividends per common share as follows (in dollars): Six Months Ended July 3, June 27, Dividends per common share $ 0.615 $ 0.610 Stock Repurchase The following table summarizes shares repurchased and settled by the Corporation (in thousands, except share and per share data): Six Months Ended July 3, June 27, Shares repurchased 155,914 214,200 Average price per share $ 43.09 $ 29.83 Cash purchase price $ (6,718) $ (6,390) Purchases unsettled as of quarter end 175 — Prior year purchases settled in current year — (374) Shares repurchased per cash flow $ (6,543) $ (6,764) As of July 3, 2021, approximately $151.6 million of the Corporation's Board of Directors' ("Board") current repurchase authorization remained unspent. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jul. 03, 2021 | |
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 Six Months Ended July 3, June 27, July 3, June 27, Numerator: Numerator for both basic and diluted EPS attributable to HNI Corporation net income (loss) $ 17,414 $ 12,556 $ 32,433 $ (11,339) Denominators: Denominator for basic EPS weighted-average common shares outstanding 43,776 42,640 43,469 42,634 Potentially dilutive shares from stock-based compensation plans 705 289 517 — Denominator for diluted EPS 44,481 42,929 43,986 42,634 Earnings per share – basic $ 0.40 $ 0.29 $ 0.75 $ (0.27) Earnings per share – diluted $ 0.39 $ 0.29 $ 0.74 $ (0.27) 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 (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Common stock equivalents excluded because their inclusion would be anti-dilutive 1,027 3,320 1,350 3,428 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jul. 03, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based CompensationThe Corporation measures stock-based compensation expense at grant date, based on the fair value of the award. Forms of awards issued under shareholder approved plans include stock options, restricted stock units based on a service condition ("restricted stock units"), restricted stock units based on both performance and service conditions ("performance stock units"), and shares issued under member stock purchase plans. Stock-based compensation expense related to stock options, restricted stock units, and performance stock units is recognized over the employees' requisite service periods, adjusted for an estimated forfeiture rate for those shares not expected to vest. Additionally, expense related to performance stock units is adjusted for the probability that the Corporation will perform within an established target range of cumulative profitability over a multi-year period. The following table summarizes expense associated with these plans (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Compensation cost $ 2,568 $ 1,301 $ 7,788 $ 5,659 The units granted by the Corporation had fair values as follows (in thousands): Six Months Ended July 3, June 27, Restricted stock units $ 15,817 $ 5,852 Performance stock units $ 6,013 $ 5,852 The following table summarizes unrecognized compensation expense and the weighted-average remaining service period for non-vested stock options and stock units as of July 3, 2021: Unrecognized Compensation Expense Weighted-Average Remaining Non-vested stock options $ 876 0.8 Non-vested restricted stock units $ 9,173 1.2 Non-vested performance stock units $ 6,222 1.3 |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 6 Months Ended |
Jul. 03, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes . This update simplifies various aspects related to accounting for income taxes, removes certain exceptions to the general principles in ASC 740, and clarifies and amends existing guidance to improve consistent application. The Corporation adopted ASC 740 in the first quarter of fiscal 2021, with no material effect on the Condensed Consolidated Financial Statements and related footnote disclosures. |
Guarantees, Commitments and Con
Guarantees, Commitments and Contingencies | 6 Months Ended |
Jul. 03, 2021 | |
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 $31 million to back certain insurance policies and payment obligations. Additionally, the Corporation periodically utilizes trade letters of credit and banker's acceptances to guarantee certain payments to overseas suppliers; as of July 3, 2021, there were no outstanding amounts related to these types of guarantees. 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 | 6 Months Ended |
Jul. 03, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segment Information | Reportable Segment InformationManagement views the Corporation as being in two reportable segments based on industries: workplace furnishings and residential building products. The aggregated workplace furnishings segment manufactures and markets a broad line of commercial and home office furniture which includes panel-based and freestanding furniture systems, seating, storage, tables, and architectural products. The residential building products segment manufactures and markets a full array of gas, wood, electric, and pellet fueled fireplaces, inserts, stoves, facings, and accessories. 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 Six Months Ended July 3, June 27, July 3, June 27, Net Sales: Workplace furnishings $ 344,137 $ 308,081 $ 646,885 $ 646,467 Residential building products 166,318 109,375 347,863 239,694 Total $ 510,455 $ 417,456 $ 994,748 $ 886,161 Income (Loss) Before Income Taxes: Workplace furnishings $ 8,756 $ 7,785 $ 5,685 $ (25,446) Residential building products 30,525 14,365 70,374 35,036 General corporate (14,594) (7,308) (28,772) (18,476) Operating income (loss) 24,687 14,842 47,287 (8,886) Interest expense, net 1,857 1,943 3,612 3,754 Total $ 22,830 $ 12,899 $ 43,675 $ (12,640) Depreciation and Amortization Expense: Workplace furnishings $ 12,051 $ 10,782 $ 24,035 $ 22,113 Residential building products 2,448 2,318 4,858 4,624 General corporate 6,177 6,019 12,246 11,868 Total $ 20,676 $ 19,119 $ 41,139 $ 38,605 Capital Expenditures (including capitalized software): Workplace furnishings $ 7,017 $ 4,293 $ 17,504 $ 11,394 Residential building products 1,947 206 6,657 3,179 General corporate 4,365 3,118 8,132 6,203 Total $ 13,329 $ 7,617 $ 32,293 $ 20,776 As of As of Identifiable Assets: Workplace furnishings $ 784,880 $ 762,780 Residential building products 408,333 381,550 General corporate 283,975 273,702 Total $ 1,477,188 $ 1,418,032 |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards (Policies) | 6 Months Ended |
Jul. 03, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
Revenue | Performance Obligations The Corporation recognizes revenue for sales of workplace furnishings and residential building 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 cancellable 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 period end. The backlog is typically fulfilled within a few months. 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. |
Goodwill and Other Intangible Assets | Impairment AnalysisThe 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. The Corporation also evaluates long-lived assets (which include definite-lived intangible assets) for impairment if indicators exist. |
Product Warranties | The Corporation issues certain warranty policies on its workplace furnishings and residential building 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 claims expected to be incurred based on historical claims experience. Actual costs incurred could differ from the original estimates, requiring adjustments to the allowance. |
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, 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 | The Corporation measures stock-based compensation expense at grant date, based on the fair value of the award. Forms of awards issued under shareholder approved plans include stock options, restricted stock units based on a service condition ("restricted stock units"), restricted stock units based on both performance and service conditions ("performance stock units"), and shares issued under member stock purchase plans. Stock-based compensation expense related to stock options, restricted stock units, and performance stock units is recognized over the employees' requisite service periods, adjusted for an estimated forfeiture rate for those shares not expected to vest. Additionally, expense related to performance stock units is adjusted for the probability that the Corporation will perform within an established target range of cumulative profitability over a multi-year period. |
Business Segment Information | Management views the Corporation as being in two reportable segments based on industries: workplace furnishings and residential building products. The aggregated workplace furnishings segment manufactures and markets a broad line of commercial and home office furniture which includes panel-based and freestanding furniture systems, seating, storage, tables, and architectural products. The residential building products segment manufactures and markets a full array of gas, wood, electric, and pellet fueled fireplaces, inserts, stoves, facings, and accessories. 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) | 6 Months Ended |
Jul. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue from contracts with customers disaggregated by product category is as follows (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Systems and storage $ 200,733 $ 167,007 $ 383,537 $ 371,028 Seating 116,887 114,772 217,241 230,644 Other 26,517 26,302 46,107 44,795 Total workplace furnishings 344,137 308,081 646,885 646,467 Residential building products 166,318 109,375 347,863 239,694 Net sales $ 510,455 $ 417,456 $ 994,748 $ 886,161 |
Contract with Customer, Asset and Liability | Contract assets and contract liabilities were as follows (in thousands): July 3, January 2, Trade receivables (1) $ 213,925 $ 207,971 Contract assets (current) (2) $ 761 $ 761 Contract assets (long-term) (3) $ 1,980 $ 2,486 Contract liabilities (4) $ 57,481 $ 53,070 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" |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Asset Acquisition | The provisional DPG purchase price allocation and estimated amortization periods of identified intangible assets as of the date of acquisition is as follows (dollars in thousands): Fair Value Weighted Average Amortization Period Inventories $ 971 Receivables 4 Prepaid expenses and other current assets 597 Accounts payable and accrued expenses (8,035) Goodwill 34,084 Customer lists 11,500 11 years Software 5,500 5 years Trade names 5,200 10 years Other intangible assets 300 3 years Total net assets $ 50,121 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories included in the Condensed Consolidated Balance Sheets consisted of the following (in thousands): July 3, January 2, Finished products $ 143,921 $ 98,527 Materials and work in process 74,526 70,264 Last-in, first-out ("LIFO") allowance (30,980) (30,980) Total inventories $ 187,467 $ 137,811 Inventory valued by the LIFO costing method 75 % 75 % |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
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): July 3, January 2, Goodwill $ 287,938 $ 292,434 Definite-lived intangible assets 137,107 139,863 Indefinite-lived intangible assets 26,579 26,599 Total goodwill and other intangible assets $ 451,624 $ 458,896 |
Schedule of Goodwill | The changes in the carrying amount of goodwill, by reporting segment, are as follows (in thousands): Workplace Furnishings Residential Building Products Total Balance as of January 2, 2021 Goodwill $ 168,477 $ 196,976 $ 365,453 Accumulated impairment losses (72,876) (143) (73,019) Net goodwill balance as of January 2, 2021 95,601 196,833 292,434 Goodwill acquired / measurement period adjustments (5,716) 1,220 (4,496) Balance as of July 3, 2021 Goodwill 162,761 198,196 360,957 Accumulated impairment losses (72,876) (143) (73,019) Net goodwill balance as of July 3, 2021 $ 89,885 $ 198,053 $ 287,938 |
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): July 3, 2021 January 2, 2021 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Software $ 190,355 $ 90,046 $ 100,309 $ 182,127 $ 78,619 $ 103,508 Trademarks and trade names 11,764 4,073 7,691 9,964 3,546 6,418 Customer lists and other 92,847 63,740 29,107 91,002 61,065 29,937 Net definite-lived intangible assets $ 294,966 $ 157,859 $ 137,107 $ 283,093 $ 143,230 $ 139,863 |
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 Six Months Ended July 3, June 27, July 3, June 27, Capitalized software $ 5,804 $ 4,828 $ 11,427 $ 9,378 Other definite-lived intangibles $ 1,630 $ 1,152 $ 3,255 $ 2,675 |
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 years is as follows (in millions): 2021 2022 2023 2024 2025 Amortization expense $ 29.4 $ 26.3 $ 22.2 $ 18.4 $ 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): July 3, January 2, Trademarks and trade names $ 26,579 $ 26,599 |
Product Warranties (Tables)
Product Warranties (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Product Warranties Disclosures [Abstract] | |
Activity Associated with Warranty Obligations | Activity associated with warranty obligations was as follows (in thousands): Six Months Ended July 3, June 27, Balance at beginning of period $ 16,109 $ 15,865 Accruals for warranties issued during period 4,471 4,626 Adjustments related to pre-existing warranties — (272) Settlements made during the period (4,029) (5,076) Balance at end of period $ 16,551 $ 15,143 July 3, January 2, Current - in the next twelve months $ 5,953 $ 5,918 Long-term - beyond one year 10,598 10,191 Total $ 16,551 $ 16,109 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt is as follows (in thousands): July 3, January 2, Revolving credit facility with interest at a variable rate (July 3, 2021 - 1.1%; January 2, 2021 - 1.2%) $ 75,000 $ 75,000 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 3,955 841 Deferred debt issuance costs (434) (476) Total debt 178,521 175,365 Less: Current maturities of long-term debt 3,955 841 Long-term debt $ 174,566 $ 174,524 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
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 Six Months Ended July 3, June 27, July 3, June 27, Income (loss) before income taxes $ 22,830 $ 12,899 $ 43,675 $ (12,640) Income taxes $ 5,418 $ 345 $ 11,245 $ (1,299) Effective tax rate 23.7 % 2.7 % 25.7 % 10.3 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
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 Significant other observable inputs Significant unobservable inputs Balance as of July 3, 2021 Cash and cash equivalents (including money market funds) (1) $ 118,498 $ 118,498 $ — $ — Government securities (2) $ 5,573 $ — $ 5,573 $ — Corporate bonds (2) $ 7,844 $ — $ 7,844 $ — Derivative financial instruments - liability (3) $ 1,766 $ — $ 1,766 $ — Deferred stock-based compensation (4) $ 8,204 $ — $ 8,204 $ — Balance as of January 2, 2021 Cash and cash equivalents (including money market funds) (1) $ 116,120 $ 116,120 $ — $ — Government securities (2) $ 6,371 $ — $ 6,371 $ — Corporate bonds (2) $ 7,228 $ — $ 7,228 $ — Derivative financial instruments - liability (3) $ 2,328 $ — $ 2,328 $ — Deferred stock-based compensation (4) $ 7,207 $ — $ 7,207 $ — 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 - "Accounts payable and accrued expenses"; Long-term portion - "Other Long-Term Liabilities" (4) 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) | 6 Months Ended |
Jul. 03, 2021 | |
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 Debt Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of January 2, 2021 $ (1,071) $ 360 $ (6,682) $ (1,760) $ (9,153) Other comprehensive income (loss) before reclassifications 62 (158) — 68 (28) Tax (expense) or benefit — 33 — (16) 17 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — 354 354 Balance as of July 3, 2021 $ (1,009) $ 235 $ (6,682) $ (1,354) $ (8,810) Amounts in parentheses indicate reductions to equity. Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Debt Securities Pension and Post-retirement Liabilities Derivative Financial Instruments Accumulated Other Comprehensive Income (Loss) Balance as of December 28, 2019 $ (2,912) $ 95 $ (5,762) $ 506 $ (8,073) Other comprehensive income (loss) before reclassifications (555) 382 — (3,229) (3,402) Tax (expense) or benefit — (80) — 759 679 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — (29) (29) Balance as of June 27, 2020 $ (3,467) $ 397 $ (5,762) $ (1,993) $ (10,825) 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 Six Months Ended Details about Accumulated Other Comprehensive Income (Loss) Components Affected Line Item in the Statement Where Net Income is Presented July 3, June 27, July 3, June 27, Derivative financial instruments Interest rate swap Interest expense, net $ (249) $ (74) $ (463) $ 40 Income taxes 59 (5) 109 (11) Net of tax $ (190) $ (79) $ (354) $ 29 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): Six Months Ended July 3, June 27, Dividends per common share $ 0.615 $ 0.610 |
Schedule of Share Repurchases | The following table summarizes shares repurchased and settled by the Corporation (in thousands, except share and per share data): Six Months Ended July 3, June 27, Shares repurchased 155,914 214,200 Average price per share $ 43.09 $ 29.83 Cash purchase price $ (6,718) $ (6,390) Purchases unsettled as of quarter end 175 — Prior year purchases settled in current year — (374) Shares repurchased per cash flow $ (6,543) $ (6,764) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
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 Six Months Ended July 3, June 27, July 3, June 27, Numerator: Numerator for both basic and diluted EPS attributable to HNI Corporation net income (loss) $ 17,414 $ 12,556 $ 32,433 $ (11,339) Denominators: Denominator for basic EPS weighted-average common shares outstanding 43,776 42,640 43,469 42,634 Potentially dilutive shares from stock-based compensation plans 705 289 517 — Denominator for diluted EPS 44,481 42,929 43,986 42,634 Earnings per share – basic $ 0.40 $ 0.29 $ 0.75 $ (0.27) Earnings per share – diluted $ 0.39 $ 0.29 $ 0.74 $ (0.27) |
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 (in thousands): Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Common stock equivalents excluded because their inclusion would be anti-dilutive 1,027 3,320 1,350 3,428 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
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 Six Months Ended July 3, June 27, July 3, June 27, Compensation cost $ 2,568 $ 1,301 $ 7,788 $ 5,659 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period | The units granted by the Corporation had fair values as follows (in thousands): Six Months Ended July 3, June 27, Restricted stock units $ 15,817 $ 5,852 Performance stock units $ 6,013 $ 5,852 |
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 stock units as of July 3, 2021: Unrecognized Compensation Expense Weighted-Average Remaining Non-vested stock options $ 876 0.8 Non-vested restricted stock units $ 9,173 1.2 Non-vested performance stock units $ 6,222 1.3 |
Reportable Segment Information
Reportable Segment Information (Tables) | 6 Months Ended |
Jul. 03, 2021 | |
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 Six Months Ended July 3, June 27, July 3, June 27, Net Sales: Workplace furnishings $ 344,137 $ 308,081 $ 646,885 $ 646,467 Residential building products 166,318 109,375 347,863 239,694 Total $ 510,455 $ 417,456 $ 994,748 $ 886,161 Income (Loss) Before Income Taxes: Workplace furnishings $ 8,756 $ 7,785 $ 5,685 $ (25,446) Residential building products 30,525 14,365 70,374 35,036 General corporate (14,594) (7,308) (28,772) (18,476) Operating income (loss) 24,687 14,842 47,287 (8,886) Interest expense, net 1,857 1,943 3,612 3,754 Total $ 22,830 $ 12,899 $ 43,675 $ (12,640) Depreciation and Amortization Expense: Workplace furnishings $ 12,051 $ 10,782 $ 24,035 $ 22,113 Residential building products 2,448 2,318 4,858 4,624 General corporate 6,177 6,019 12,246 11,868 Total $ 20,676 $ 19,119 $ 41,139 $ 38,605 Capital Expenditures (including capitalized software): Workplace furnishings $ 7,017 $ 4,293 $ 17,504 $ 11,394 Residential building products 1,947 206 6,657 3,179 General corporate 4,365 3,118 8,132 6,203 Total $ 13,329 $ 7,617 $ 32,293 $ 20,776 As of As of Identifiable Assets: Workplace furnishings $ 784,880 $ 762,780 Residential building products 408,333 381,550 General corporate 283,975 273,702 Total $ 1,477,188 $ 1,418,032 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 510,455 | $ 417,456 | $ 994,748 | $ 886,161 |
Workplace furnishings | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 344,137 | 308,081 | 646,885 | 646,467 |
Workplace furnishings | Systems and storage | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 200,733 | 167,007 | 383,537 | 371,028 |
Workplace furnishings | Seating | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 116,887 | 114,772 | 217,241 | 230,644 |
Workplace furnishings | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 26,517 | 26,302 | 46,107 | 44,795 |
Residential building products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 166,318 | $ 109,375 | $ 347,863 | $ 239,694 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Trade receivables | $ 213,925 | $ 207,971 |
Contract assets (current) | 761 | 761 |
Contract assets (long-term) | 1,980 | 2,486 |
Contract liabilities | $ 57,481 | $ 53,070 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Apr. 03, 2021 | Jul. 03, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized | $ 21.1 | |
Payment terms | 30 days |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jul. 03, 2021 | Jul. 03, 2021 | Jan. 02, 2021 |
Schedule Of Asset Acquisition [Line Items] | ||||
Goodwill | $ 287,938 | $ 287,938 | $ 292,434 | |
Increase in working capital | 300 | |||
Assets of Residential Building Products Companies | ||||
Schedule Of Asset Acquisition [Line Items] | ||||
Payments for asset acquisitions | 1,600 | |||
Goodwill | 1,200 | $ 1,200 | ||
Design Public Group | ||||
Schedule Of Asset Acquisition [Line Items] | ||||
Payments for asset acquisitions | $ 50,121 | |||
Goodwill | $ 34,084 | |||
Goodwill adjustment | 5,700 | |||
Design Public Group | Customer lists | ||||
Schedule Of Asset Acquisition [Line Items] | ||||
Intangible assets adjustment | 1,800 | |||
Design Public Group | Software | ||||
Schedule Of Asset Acquisition [Line Items] | ||||
Intangible assets adjustment | 1,700 | |||
Design Public Group | Trade names | ||||
Schedule Of Asset Acquisition [Line Items] | ||||
Intangible assets adjustment | 1,800 | |||
Design Public Group | Other intangible assets | ||||
Schedule Of Asset Acquisition [Line Items] | ||||
Intangible assets adjustment | $ 100 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation and Estimated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jul. 03, 2021 | Jan. 02, 2021 |
Schedule Of Asset Acquisition [Line Items] | |||
Goodwill | $ 287,938 | $ 292,434 | |
Design Public Group | |||
Schedule Of Asset Acquisition [Line Items] | |||
Inventories | $ 971 | ||
Receivables | 4 | ||
Prepaid expenses and other current assets | 597 | ||
Accounts payable and accrued expenses | (8,035) | ||
Goodwill | 34,084 | ||
Total net assets | 50,121 | ||
Design Public Group | Customer lists | |||
Schedule Of Asset Acquisition [Line Items] | |||
Intangible assets | $ 11,500 | ||
Weighted Average Amortization Period | 11 years | ||
Design Public Group | Software | |||
Schedule Of Asset Acquisition [Line Items] | |||
Intangible assets | $ 5,500 | ||
Weighted Average Amortization Period | 5 years | ||
Design Public Group | Trade names | |||
Schedule Of Asset Acquisition [Line Items] | |||
Intangible assets | $ 5,200 | ||
Weighted Average Amortization Period | 10 years | ||
Design Public Group | Other intangible assets | |||
Schedule Of Asset Acquisition [Line Items] | |||
Intangible assets | $ 300 | ||
Weighted Average Amortization Period | 3 years |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Inventories | ||
Finished products | $ 143,921 | $ 98,527 |
Materials and work in process | 74,526 | 70,264 |
Last-in, first-out ("LIFO") allowance | (30,980) | (30,980) |
Total inventories | $ 187,467 | $ 137,811 |
Inventory valued by the LIFO costing method | 75.00% | 75.00% |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 287,938 | $ 292,434 |
Definite-lived intangible assets | 137,107 | 139,863 |
Indefinite-lived intangible assets | 26,579 | 26,599 |
Goodwill and Other Intangible Assets | $ 451,624 | $ 458,896 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jul. 03, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | $ 365,453 |
Accumulated impairment losses, beginning balance | (73,019) |
Goodwill, net, beginning balance | 292,434 |
Goodwill acquired / measurement period adjustments | (4,496) |
Goodwill, gross, ending balance | 360,957 |
Accumulated impairment losses, ending balance | (73,019) |
Goodwill, net, ending balance | 287,938 |
Workplace furnishings | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 168,477 |
Accumulated impairment losses, beginning balance | (72,876) |
Goodwill, net, beginning balance | 95,601 |
Goodwill acquired / measurement period adjustments | (5,716) |
Goodwill, gross, ending balance | 162,761 |
Accumulated impairment losses, ending balance | (72,876) |
Goodwill, net, ending balance | 89,885 |
Residential building products | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning balance | 196,976 |
Accumulated impairment losses, beginning balance | (143) |
Goodwill, net, beginning balance | 196,833 |
Goodwill acquired / measurement period adjustments | 1,220 |
Goodwill, gross, ending balance | 198,196 |
Accumulated impairment losses, ending balance | (143) |
Goodwill, net, ending balance | $ 198,053 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 294,966 | $ 283,093 |
Accumulated Amortization | 157,859 | 143,230 |
Net | 137,107 | 139,863 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 190,355 | 182,127 |
Accumulated Amortization | 90,046 | 78,619 |
Net | 100,309 | 103,508 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 11,764 | 9,964 |
Accumulated Amortization | 4,073 | 3,546 |
Net | 7,691 | 6,418 |
Customer lists and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 92,847 | 91,002 |
Accumulated Amortization | 63,740 | 61,065 |
Net | $ 29,107 | $ 29,937 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Capitalized software | $ 5,804 | $ 4,828 | $ 11,427 | $ 9,378 |
Other definite-lived intangibles | $ 1,630 | $ 1,152 | $ 3,255 | $ 2,675 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Future Amortization Expense (Details) $ in Millions | Jul. 03, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 29.4 |
2022 | 26.3 |
2023 | 22.2 |
2024 | 18.4 |
2025 | $ 17.2 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets - Indefinite Lived Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 26,579 | $ 26,599 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 26,579 | $ 26,599 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 16,109 | $ 15,865 |
Accruals for warranties issued during period | 4,471 | 4,626 |
Adjustments related to pre-existing warranties | 0 | (272) |
Settlements made during the period | (4,029) | (5,076) |
Balance at end of period | $ 16,551 | $ 15,143 |
Product Warranties - Current an
Product Warranties - Current and Long Term Warranty (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 | Dec. 28, 2019 |
Product Warranties Disclosures [Abstract] | ||||
Current - in the next twelve months | $ 5,953 | $ 5,918 | ||
Long-term - beyond one year | 10,598 | 10,191 | ||
Total | $ 16,551 | $ 16,109 | $ 15,143 | $ 15,865 |
Long-Term Debt Schedule of Long
Long-Term Debt Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 | May 31, 2018 |
Debt Instrument [Line Items] | |||
Total debt | $ 178,521 | $ 175,365 | |
Deferred debt issuance costs | (434) | (476) | |
Current maturities of long-term debt | 3,955 | 841 | |
Long-term debt | $ 174,566 | $ 174,524 | |
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% | |
Revolving credit facility with interest at a variable rate (July 3, 2021 - 1.1%; January 2, 2021 - 1.2%) | |||
Debt Instrument [Line Items] | |||
Interest rate | 1.10% | 1.20% | |
Total debt | $ 75,000 | $ 75,000 | |
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 | $ 3,955 | $ 841 |
Long-Term Debt Narrative (Detai
Long-Term Debt Narrative (Details) - USD ($) | May 31, 2018 | Jul. 03, 2021 | Jan. 02, 2021 |
Debt Instrument [Line Items] | |||
Long-term debt obligations | $ 178,521,000 | $ 175,365,000 | |
Deferred debt issuance costs, current | 400,000 | ||
Deferred debt issuance costs, noncurrent | 300,000 | ||
Revolving credit facility with interest at a variable rate (July 3, 2021 - 1.1%; January 2, 2021 - 1.2%) | |||
Debt Instrument [Line Items] | |||
Long-term line of credit outstanding | 75,000,000 | ||
Line of credit maximum borrowing capacity | 450,000,000 | ||
Line of credit remaining borrowing capacity | $ 375,000,000 | ||
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 | ||
Notes Payable to Banks | |||
Debt Instrument [Line Items] | |||
Long-term debt obligations | $ 75,000,000 | ||
Private Placement | |||
Debt Instrument [Line Items] | |||
Fair value of debt obligations | 116,000,000 | ||
Deferred debt issuance costs, noncurrent | $ 400,000 | ||
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 | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before income taxes | $ 22,830 | $ 12,899 | $ 43,675 | $ (12,640) |
Income taxes | $ 5,418 | $ 345 | $ 11,245 | $ (1,299) |
Effective tax rate | 23.70% | 2.70% | 25.70% | 10.30% |
Fair Value Measurements - Asset
Fair Value Measurements - Assets (Details) - USD ($) $ in Thousands | Jul. 03, 2021 | Jan. 02, 2021 |
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents (including money market funds) | $ 118,498 | $ 116,120 |
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) | 118,498 | 116,120 |
Derivative financial instruments - liability | 1,766 | 2,328 |
Deferred stock-based compensation | 8,204 | 7,207 |
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) | 118,498 | 116,120 |
Derivative financial instruments - liability | 0 | 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 - liability | 1,766 | 2,328 |
Deferred stock-based compensation | 8,204 | 7,207 |
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 - liability | 0 | 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 | 5,573 | 6,371 |
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 | 5,573 | 6,371 |
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 | 7,844 | 7,228 |
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 | 7,844 | 7,228 |
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 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity - Components (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 590,745 | $ 584,368 |
Ending balance | 634,783 | 553,069 |
Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (1,071) | (2,912) |
Other comprehensive income (loss) before reclassifications | 62 | (555) |
Tax (expense) or benefit | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | (1,009) | (3,467) |
Unrealized Gains (Losses) on Debt Securities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 360 | 95 |
Other comprehensive income (loss) before reclassifications | (158) | 382 |
Tax (expense) or benefit | 33 | (80) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | 235 | 397 |
Pension and Post-retirement Liabilities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (6,682) | (5,762) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Tax (expense) or benefit | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 |
Ending balance | (6,682) | (5,762) |
Derivative Financial Instruments | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (1,760) | 506 |
Other comprehensive income (loss) before reclassifications | 68 | (3,229) |
Tax (expense) or benefit | (16) | 759 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 354 | (29) |
Ending balance | (1,354) | (1,993) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (9,153) | (8,073) |
Other comprehensive income (loss) before reclassifications | (28) | (3,402) |
Tax (expense) or benefit | 17 | 679 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 354 | (29) |
Ending balance | $ (8,810) | $ (10,825) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity - Narrative (Details) - USD ($) | Jul. 03, 2021 | Dec. 28, 2019 |
Common Stock | ||
Class of Stock [Line Items] | ||
Remaining authorized repurchase amount | $ 151,600,000 | |
Interest rate swap | ||
Class of Stock [Line Items] | ||
Derivative, notional amount | $ 75,000,000 | |
Derivative, fixed interest rate | 1.42% | |
Derivative liability | 1,800,000 | |
Accumulated other comprehensive income (loss) | $ (1,400,000) |
Accumulated Other Comprehensi_5
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity - Reclassification (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense, net | $ (1,857) | $ (1,943) | $ (3,612) | $ (3,754) |
Income taxes | (5,418) | (345) | (11,245) | 1,299 |
Net of tax | 17,414 | 12,556 | 32,433 | (11,339) |
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, net | (249) | (74) | (463) | 40 |
Income taxes | 59 | (5) | 109 | (11) |
Net of tax | $ (190) | $ (79) | $ (354) | $ 29 |
Accumulated Other Comprehensi_6
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity - Dividend (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Equity [Abstract] | ||||
Dividends per common share (in dollars per share) | $ 0.310 | $ 0.305 | $ 0.615 | $ 0.610 |
Dividends per common share (in dollars per share) | $ 0.310 | $ 0.305 | $ 0.615 | $ 0.610 |
Accumulated Other Comprehensi_7
Accumulated Other Comprehensive Income (Loss) and Shareholders' Equity (Stock Repurchases) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jul. 03, 2021 | Jun. 27, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Average price per share (in dollars per share) | $ 43.09 | $ 29.83 |
Shares repurchased per cash flow | $ (6,543) | $ (6,764) |
Common Stock | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Shares repurchased (in shares) | 155,914 | 214,200 |
Cash purchase price | $ (6,718) | $ (6,390) |
Purchases unsettled as of quarter end | 175 | 0 |
Prior year purchases settled in current year | 0 | (374) |
Shares repurchased per cash flow | $ (6,543) | $ (6,764) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Numerator: | ||||
Numerator for both basic and diluted EPS attributable to HNI Corporation net income (loss) | $ 17,414 | $ 12,556 | $ 32,433 | $ (11,339) |
Denominators: | ||||
Denominator for basic EPS weighted-average common shares outstanding (in shares) | 43,776 | 42,640 | 43,469 | 42,634 |
Potentially dilutive shares from stock-based compensation plans (in shares) | 705 | 289 | 517 | 0 |
Denominator for diluted EPS (in shares) | 44,481 | 42,929 | 43,986 | 42,634 |
Earnings per share - basic (in dollars per share) | $ 0.40 | $ 0.29 | $ 0.75 | $ (0.27) |
Earnings per share - diluted (in dollars per share) | $ 0.39 | $ 0.29 | $ 0.74 | $ (0.27) |
Earnings Per Share Antidilutive
Earnings Per Share Antidilutive Securities Excluded from Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Common stock equivalents excluded because their inclusion would be anti-dilutive | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock equivalents excluded because their inclusion would be anti-dilutive (in shares) | 1,027 | 3,320 | 1,350 | 3,428 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost | $ 2,568 | $ 1,301 | $ 7,788 | $ 5,659 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized Compensation Expense | 876 | $ 876 | ||
Weighted-Average Remaining Service Period (years) | 9 months 18 days | |||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 15,817 | 5,852 | ||
Unrecognized Compensation Expense | 9,173 | $ 9,173 | ||
Weighted-Average Remaining Service Period (years) | 1 year 2 months 12 days | |||
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value | $ 6,013 | $ 5,852 | ||
Unrecognized Compensation Expense | $ 6,222 | $ 6,222 | ||
Weighted-Average Remaining Service Period (years) | 1 year 3 months 18 days |
Guarantees, Commitments and C_2
Guarantees, Commitments and Contingencies (Details) | Jul. 03, 2021USD ($) |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Letters of credit | $ 31,000,000 |
Trade Letters Of Credit And Bankers Acceptances | |
Line of Credit Facility [Line Items] | |
Letters of credit | $ 0 |
Reportable Segment Informatio_2
Reportable Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 03, 2021USD ($) | Jun. 27, 2020USD ($) | Jul. 03, 2021USD ($)segment | Jun. 27, 2020USD ($) | Jan. 02, 2021USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Net sales | $ 510,455 | $ 417,456 | $ 994,748 | $ 886,161 | |
Income (loss) before income taxes | 24,687 | 14,842 | 47,287 | (8,886) | |
Interest expense, net | 1,857 | 1,943 | 3,612 | 3,754 | |
Income (loss) before income taxes | 22,830 | 12,899 | 43,675 | (12,640) | |
Depreciation and amortization expense | 20,676 | 19,119 | 41,139 | 38,605 | |
Capital expenditures (including capitalized software) | 13,329 | 7,617 | 32,293 | 20,776 | |
Identifiable assets | 1,477,188 | 1,477,188 | $ 1,418,032 | ||
Workplace furnishings | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 344,137 | 308,081 | 646,885 | 646,467 | |
Residential building products | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 166,318 | 109,375 | 347,863 | 239,694 | |
Operating segments | Workplace furnishings | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 344,137 | 308,081 | 646,885 | 646,467 | |
Income (loss) before income taxes | 8,756 | 7,785 | 5,685 | (25,446) | |
Depreciation and amortization expense | 12,051 | 10,782 | 24,035 | 22,113 | |
Capital expenditures (including capitalized software) | 7,017 | 4,293 | 17,504 | 11,394 | |
Identifiable assets | 784,880 | 784,880 | 762,780 | ||
Operating segments | Residential building products | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 166,318 | 109,375 | 347,863 | 239,694 | |
Income (loss) before income taxes | 30,525 | 14,365 | 70,374 | 35,036 | |
Depreciation and amortization expense | 2,448 | 2,318 | 4,858 | 4,624 | |
Capital expenditures (including capitalized software) | 1,947 | 206 | 6,657 | 3,179 | |
Identifiable assets | 408,333 | 408,333 | 381,550 | ||
General corporate | |||||
Segment Reporting Information [Line Items] | |||||
Income (loss) before income taxes | (14,594) | (7,308) | (28,772) | (18,476) | |
Depreciation and amortization expense | 6,177 | 6,019 | 12,246 | 11,868 | |
Capital expenditures (including capitalized software) | 4,365 | $ 3,118 | 8,132 | $ 6,203 | |
Identifiable assets | $ 283,975 | $ 283,975 | $ 273,702 |
Uncategorized Items - hni-20210
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |