HNI Corporation Reports Earnings for First Quarter Fiscal Year 2021

Rhea-AI Summary

HNI Corporation (NYSE: HNI) reported Q1 2021 sales of $484.3 million and net income of $15.0 million, translating to a GAAP net income per diluted share of $0.34, a strong recovery from $(0.56) the prior year. Non-GAAP earnings also improved to $0.36 from $0.21. The Residential Building Products segment saw a remarkable 39% revenue increase year-over-year, with operating profits rising over 90%. Workplace Furnishings revenue declined 12%, but this marked the lowest drop since the pandemic began. HNI’s cash position doubled to $94 million.

Positive

• 39% year-over-year revenue growth in Residential Building Products segment.
• Operating margin expanded 600 basis points, with segment operating profit at a record $39.8 million.
• Non-GAAP operating income increased 67% year-over-year to $23.3 million, achieving a 60% incremental operating margin.
• Cash position improved to $94 million, more than double compared to $35 million in Q1 2020.

Negative

• 12% decline in Workplace Furnishings revenue, although it was the lowest drop since the pandemic began.

HNI Corporation (NYSE: HNI) today announced sales for the first quarter ended April 3, 2021 of $484.3 million and net income of $15.0 million. GAAP net income (loss) per diluted share was $0.34, compared to $(0.56) in the prior year. Non-GAAP net income per diluted share was $0.36, compared to $0.21 in the prior year. GAAP to non-GAAP reconciliations follow the financial statements in this release.

First Quarter Highlights

• Strong results in Residential Building Products: First quarter 2021 revenue grew 39 percent on a year-over-year basis, and operating margin expanded 600 basis points from prior-year, pre-COVID levels. This fueled a greater than 90 percent year-over-year increase in segment operating profit to a first quarter record of $39.8 million.
• Signs of improvement in Workplace Furnishings: First quarter 2021 revenue was down approximately 12 percent from the first quarter of 2020, on an organic basis. This rate of decline was the lowest since the beginning of the pandemic.
• Strong incremental margins: Non-GAAP consolidated operating income increased 67 percent year-over-year (or $9.4 million) to $23.3 million on two percent organic revenue growth (or $6.8 million). This equated to a 60 percent incremental operating margin, which was primarily driven by volume leverage in the Residential Building Products segment and solid cost control in the Workplace Furnishings segment, as both segments benefited from the Corporation’s annual cost savings initiatives and cost actions taken last year to combat pandemic pressures.
• High-quality balance sheet: Quarter-ending debt levels were $176 million, essentially unchanged from last quarter and down from $230 million at the end of the first quarter of last year. The gross leverage ratio at the end of the first quarter of 2021 was approximately 0.9x, slightly improved from last quarter and last year. Cash totaled $94 million as of the end of the first quarter of 2021, more than double the $35 million reported in the first quarter of 2020.

“This quarter, our members again demonstrated much of what is unique about HNI. We delivered substantial profit improvement, highlighted by strong revenue growth and expanded profitability in Residential Building Products. Although the pandemic continues to negatively impact demand in Workplace Furnishings, particularly in the contract market, we benefited from our reset cost structure and improving top-line performance in our brands focused on small to mid-sized customers. Overall, the first quarter shows the power of our diversified revenue streams, our ability to react quickly to changing market dynamics, and our overall operational capability,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.

HNI Corporation – Financial Performance
(Dollars in millions, except per share data)
		Three Months Ended
		April 3, 2021			March 28, 2020			Change
GAAP
Net Sales		$484.3			$468.7			3.3

FAQ

What are HNI Corporation's Q1 2021 earnings results?

HNI Corporation reported net income of $15.0 million and a GAAP net income per diluted share of $0.34 in Q1 2021.

How did HNI's revenue perform in the first quarter of 2021?

HNI Corporation reported sales of $484.3 million for Q1 2021, reflecting a significant increase from the prior year.

What financial highlights did HNI Corporation announce for Q1 2021?

Key highlights include a 39% revenue growth in Residential Building Products and a cash position of $94 million.

What challenges did HNI face in its Workplace Furnishings segment during Q1 2021?

HNI's Workplace Furnishings segment experienced a 12% revenue decline, although this was the lowest drop since the pandemic began.