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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>In a quarter where there are lot of moving pieces, it’s important to keep our eye on the big picture.</li><li>HNI margins should continue to be strong, and the company is well positioned for growth as demand rebounds.</li><li>There are several stories playing out in the current quarter, so let’s tackle each in turn. </li></ul>

In a quarter where there are lot of moving pieces, it’s important to keep our eye on the big picture.HNI margins should continue to be strong, and the company is well positioned for growth as demand rebounds.There are several stories playing out in the current quarter, so let’s tackle each in turn. 

HNI: Revising Estimates; Continued Margin Strength, Restructuring

<ul><li>HNI beat on EPS, posting 3QFY24 adjusted EPS of $1.03, $0.04 above our estimate and $0.10 better than 3QFY23, despite total revenue coming in $41.3 million lower than our estimate and -5.5% Y/Y, showcasing (once again) the company’s strong margins and operating discipline.</li><li>This is a company firing on all cylinders when it comes to margins.</li><li>Given the continued challenging macro/industry conditions confronting both segments (Workplace Furnishings [WF] and Residential Building Products [RBP]), the revenue shortfalls are not particularly unexpected.</li></ul>

HNI beat on EPS, posting 3QFY24 adjusted EPS of $1.03, $0.04 above our estimate and $0.10 better than 3QFY23, despite total revenue coming in $41.3 million lower than our estimate and -5.5% Y/Y, showcasing (once again) the company’s strong margins and operating discipline.This is a company firing on all cylinders when it comes to margins.Given the continued challenging macro/industry conditions confronting both segments (Workplace Furnishings [WF] and Residential Building Products [RBP]), the revenue shortfalls are not particularly unexpected.

HNI Corporation - 3QFY24 Adjusted EPS $1.03 Beats WTR Estimate...

<ul><li>HNI delivered excellent 2Q24 earnings despite continuing punk industry demand.</li><li>HNI reported strong 2Q24 results on Thursday, July 25, with adjusted EPS of $0.79, $0.17 better than our expectations and $0.18 ahead of consensus. </li><li>It posted operating margins in Workplace Furnishings (WF) much better than anticipated (11.85% versus our 9.4% estimate and 8.2% in 2Q23). </li></ul>

HNI delivered excellent 2Q24 earnings despite continuing punk industry demand.HNI reported strong 2Q24 results on Thursday, July 25, with adjusted EPS of $0.79, $0.17 better than our expectations and $0.18 ahead of consensus. It posted operating margins in Workplace Furnishings (WF) much better than anticipated (11.85% versus our 9.4% estimate and 8.2% in 2Q23). 

Hni - Revising Our Forward EPS Estimates to Reflect Continued Margin Expansion

<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

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: Revising Estimates; Continued Margin Strength, Restructuring

In a quarter where there are lot of moving pieces, it’s important to keep our eye on the big picture. HNI margins should continue to be strong, and...

Water Tower Research

HNI Corporation - 3QFY24 Adjusted EPS $1.03 Beats WTR Estimate...

HNI beat on EPS, posting 3QFY24 adjusted EPS of $1.03, $0.04 above our estimate and $0.10 better than 3QFY23, despite total revenue coming in $41.3...

Water Tower Research

Hni - Revising Our Forward EPS Estimates to Reflect Continued Margin Expansion

HNI reported strong 2Q24 results on Thursday, July 25, with adjusted EPS of $0.79, $0.17 better than our expectations and $0.18 ahead of consensus.

Water Tower Research

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

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