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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>After Monday’s market close, HNI announced an intended plant consolidation in which it will close its Hickory, NC furniture manufacturing plant (HBF is part of its Workplace Furnishings [WF] segment) during 1H25 and transfer production to other North American facilities.</li><li>Management avows that the initiative will improve productivity and strengthen operations but, importantly, will not sacrifice capacity or create disruption to customers who will benefit ultimately from better delivery and logistics coordination.</li><li>During the balance of 2024 and 2025, HNI will book ~$10.3MM in restructuring, accelerated depreciation, and other charges ($1.5MM non-cash). </li></ul>

After Monday’s market close, HNI announced an intended plant consolidation in which it will close its Hickory, NC furniture manufacturing plant (HBF is part of its Workplace Furnishings [WF] segment) during 1H25 and transfer production to other North American facilities.Management avows that the initiative will improve productivity and strengthen operations but, importantly, will not sacrifice capacity or create disruption to customers who will benefit ultimately from better delivery and logistics coordination.During the balance of 2024 and 2025, HNI will book ~$10.3MM in restructuring, accelerated depreciation, and other charges ($1.5MM non-cash). 

HNI Corporation - Announces $10.3MM HBF Restructuring

<ul><li>Before the open, HNI reported 4Q23 results, beating on adjusted EPS and roughly in line on the consolidated revenue line.</li><li>Adjusted EPS was $0.98, well ahead of our estimate of $0.84 and consensus of $0.83.</li><li>The adjusted number excluded ~$0.50 of restructuring asset impairment and acquisition-related costs.</li></ul>

Before the open, HNI reported 4Q23 results, beating on adjusted EPS and roughly in line on the consolidated revenue line.Adjusted EPS was $0.98, well ahead of our estimate of $0.84 and consensus of $0.83.The adjusted number excluded ~$0.50 of restructuring asset impairment and acquisition-related costs.

HNI Corporation - HNI Margins Drive Adjusted EPS Beat

<ul><li>We are expecting EPS of $0.84 on revenue of $681 million. Consensus EPS is $0.83, with a range of $0.80- 0.84 among four analysts.</li><li>Consensus revenue is $685 million. A year ago, HNI reported EPS of $0.63 on revenue of $569 million.</li><li>We expect the adjusted operating margin to expand 250 bps to 8.8%, partially offset by higher interest expense due to the debt incurred for the KII acquisition.</li></ul>

We are expecting EPS of $0.84 on revenue of $681 million. Consensus EPS is $0.83, with a range of $0.80- 0.84 among four analysts.Consensus revenue is $685 million. A year ago, HNI reported EPS of $0.63 on revenue of $569 million.We expect the adjusted operating margin to expand 250 bps to 8.8%, partially offset by higher interest expense due to the debt incurred for the KII acquisition.

HNI Corporation - 4Q Preview: Watching Order Trends in Office Furniture

<ul><li>We are publishing this note to introduce a new HNI financial model inclusive of the acquisition of Kimball International.</li><li>We expect this new model will be more user-friendly for investors who want to see how we arrive at our estimates or tinker with the assumptions.</li><li>Per our discipline, our model is available on request or visible through our partners.</li></ul>

We are publishing this note to introduce a new HNI financial model inclusive of the acquisition of Kimball International.We expect this new model will be more user-friendly for investors who want to see how we arrive at our estimates or tinker with the assumptions.Per our discipline, our model is available on request or visible through our partners.

HNI Corporation - Introducing User-Friendly Model

<ul><li>This note corrects the version that was published on November 2. Due to errors in our model, the full-year estimate for 2024 was not calculated properly.</li><li>The correct full-year 2024 EPS estimate is $2.65.</li><li>We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.</li></ul>

This note corrects the version that was published on November 2. Due to errors in our model, the full-year estimate for 2024 was not calculated properly.The correct full-year 2024 EPS estimate is $2.65.We are raising our non-GAAP (adjusted) EPS estimates for 4Q23 and 2024 following HNI’s strong 3Q23 earnings report on Tuesday, October 31, 2023.

HNI Corporation - Raising Estimates Following Strong 3Q Earnings Report - Correction

United States

HNI Corporation manufactures and markets office furniture as well as hearth products. The Company's products are sold primarily through dealers, wholesalers, and retail superstores. HNI has operations in the United States and Canada.

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HNI Corp (HNI US)

HNI Corporation - Announces $10.3MM HBF Restructuring

During the balance of 2024 and 2025, HNI will book ~$10.3MM in restructuring, accelerated depreciation, and other charges ($1.5MM non-cash).

Water Tower Research

HNI Corporation - HNI Margins Drive Adjusted EPS Beat

Before the open, HNI reported 4Q23 results, beating on adjusted EPS and roughly in line on the consolidated revenue line.

Water Tower Research

HNI Corporation - 4Q Preview: Watching Order Trends in Office Furniture

We are expecting EPS of $0.84 on revenue of $681 million. Consensus EPS is $0.83, with a range of $0.80- 0.84 among four analysts.

Water Tower Research

HNI Corporation - Introducing User-Friendly Model

We are publishing this note to introduce a new HNI financial model inclusive of the acquisition of Kimball International.

Water Tower Research

HNI Corporation - Raising Estimates Following Strong 3Q Earnings Report - Correction

This note corrects the version that was published on November 2. Due to errors in our model, the full-year estimate for 2024 was not calculated...

Water Tower Research

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