HNI Q4 2023 Earnings Report
Key Takeaways
HNI Corporation reported a 19 percent increase in fourth-quarter sales to $679.8 million and net income of $22.7 million. GAAP earnings per share were $0.48, and non-GAAP earnings per share were $0.98. The company saw margin expansion in Workplace Furnishings and Residential Building Products, with the Kimball International acquisition contributing positively to earnings.
GAAP earnings per share increased 23 percent year-over-year.
Workplace Furnishings segment GAAP operating margin expanded 410 basis points year-over-year.
Kimball International added approximately $16 million to fourth quarter operating profit and an estimated $0.07 to fourth quarter non-GAAP EPS.
Residential Building Products segment GAAP operating margin expanded 310 basis points year-over-year to 22.3 percent.
HNI
HNI
HNI Revenue by Segment
Forward Guidance
2024 non-GAAP earnings per share are expected to increase solidly year-over-year primarily driven by continued margin expansion in Workplace Furnishings and accretion from Kimball International.
Positive Outlook
- 2024 organic revenue to grow at a low-single-digit rate in both Workplace Furnishings and Residential Building Products.
- KII to add $215 to $225 million of incremental revenue to 2024 and be solidly accretive to earnings.
- Further reduce leverage and improve its already strong balance sheet during 2024 through modest debt reduction and continued EBITDA growth.
- Low leverage and consistent cash flow generation will provide the Corporation with substantial capacity for capital deployment.
- First quarter non-GAAP earnings per share are expected to increase year-over-year, with margin expansion and accretion from Kimball International more than offsetting macro-driven top line pressure.
Challenges Ahead
- For Workplace Furnishings, this outlook assumes demand conditions remain generally in-line with those experienced in the second-half 2023.
- In Residential Building Products, the Corporation expects growth in new construction to be partially offset by continued declines in remodel/retrofit.
- First quarter Workplace Furnishings organic revenue to be down in the low-single digits versus the same quarter of 2023.
- In Residential Building Products, the Corporation expects first quarter revenue to be down in the low- to mid-teens year-over-year.
- This primarily reflects the impact from unwinding the elevated remodel-retrofit backlog in the year-ago period, partially offset by forecasted growth in new construction.
Revenue & Expenses
Visualization of income flow from segment revenue to net income