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Water Tower Research

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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<div><div><div><div><ul style="list-style-type: disc;"><li><p>We are revising our recent estimates for HNI to correct a significant error in our understanding of guidance for the contribution to revenue and earnings from the Kimball International (KII) acquisition.</p></li><li><p>We misunderstood the guidance for 2H revenue for KII to be in the range of $340-370 million.</p></li><li><p>That number applies to the full-year contribution, including $52 million already reported. </p></li></ul></div></div></div></div>

We are revising our recent estimates for HNI to correct a significant error in our understanding of guidance for the contribution to revenue and earnings from the Kimball International (KII) acquisition.We misunderstood the guidance for 2H revenue for KII to be in the range of $340-370 million.That number applies to the full-year contribution, including $52 million already reported. 

HNI Corporation - Revising Estimate to Correct Modeling Error(S)

<div><div><div><div><ul style="list-style-type: disc;"><li><p>With this note, we are updating our estimates for FY23 and FY24 to reflect the surprisingly strong margin performance in legacy HNI Workplace Furnishings, the integration of Kimball International (KII), and promised margin improvement in Residential Building Products (Hearth).</p></li><li><p>One note on how we have modeled the next four quarters.</p></li><li><p>Through 2QFY24, we are modeling KII revenues and operating income independent of the legacy WF. </p></li></ul></div></div></div></div>

With this note, we are updating our estimates for FY23 and FY24 to reflect the surprisingly strong margin performance in legacy HNI Workplace Furnishings, the integration of Kimball International (KII), and promised margin improvement in Residential Building Products (Hearth).One note on how we have modeled the next four quarters.Through 2QFY24, we are modeling KII revenues and operating income independent of the legacy WF. 

HNI Corporation - Integrating KII and Updating Estimates

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Ahead of the HNI’s 2QFY23 earnings report on Tuesday, August 8, we are only adjusting our estimates for 2QFY23.</p></li><li><p>HNI completed its acquisition of Kimball International on June 1.</p></li><li><p>Our revised 2QFY23 estimate relies on our in-place HNI estimate plus an interpolation of our KBAL estimates for the time owned by HNI (the closing occurred after two months had passed).</p></li></ul></div></div></div></div>

Ahead of the HNI’s 2QFY23 earnings report on Tuesday, August 8, we are only adjusting our estimates for 2QFY23.HNI completed its acquisition of Kimball International on June 1.Our revised 2QFY23 estimate relies on our in-place HNI estimate plus an interpolation of our KBAL estimates for the time owned by HNI (the closing occurred after two months had passed).

HNI Corporation - 2Q Preview: Adjusting 2QFY23 Estimate for Kimball Closing

Thematic (Sector/Industry)

<ul><li>Office furniture manufacturers assembled in Chicago this week for an annual trade show.</li><li>NeoCon®, the legacy name of the show, is a registered trademark of Merchandise Mart Properties, Inc</li><li>It pertains only to Mart tenants. Several major players moved away from the Mart to Fulton Market and renamed their show Design Days.</li></ul>

Office furniture manufacturers assembled in Chicago this week for an annual trade show.NeoCon®, the legacy name of the show, is a registered trademark of Merchandise Mart Properties, IncIt pertains only to Mart tenants. Several major players moved away from the Mart to Fulton Market and renamed their show Design Days.

NeoCon/Design Days : Office Manufacturers Display Wares Amid Macro Uncertainty

<ul><li>This note addresses the Monthly Market Pulse (MMP) of incoming orders and sales for March 2023 issued by the Business Institutional Furniture Manufacturers Association (BIFMA).</li><li>About 50+ BIFMA member companies voluntarily submit monthly sales and orders to a national accounting firm that aggregates and reports composite data.</li><li>Neither BIFMA nor any individual member has access to the raw data. We show the monthly data from 2019 to March 2023 under Industry Statistics.</li></ul>

This note addresses the Monthly Market Pulse (MMP) of incoming orders and sales for March 2023 issued by the Business Institutional Furniture Manufacturers Association (BIFMA).About 50+ BIFMA member companies voluntarily submit monthly sales and orders to a national accounting firm that aggregates and reports composite data.Neither BIFMA nor any individual member has access to the raw data. We show the monthly data from 2019 to March 2023 under Industry Statistics.

Commercial/Contract Furniture/Consumer Hardlines : Orders Remain Lower Y/Y, but at Moderating Pace

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 - Revising Estimate to Correct Modeling Error(S)

We misunderstood the guidance for 2H revenue for KII to be in the range of $340-370 million. That number applies to the full-year contribution,...

Water Tower Research

HNI Corporation - Integrating KII and Updating Estimates

One note on how we have modeled the next four quarters. Through 2QFY24, we are modeling KII revenues and operating income independent of the legacy...

Water Tower Research

HNI Corporation - 2Q Preview: Adjusting 2QFY23 Estimate for Kimball Closing

Ahead of the HNI’s 2QFY23 earnings report on Tuesday, August 8, we are only adjusting our estimates for 2QFY23. HNI completed its acquisition of...

Water Tower Research

NeoCon/Design Days : Office Manufacturers Display Wares Amid Macro Uncertainty

Office furniture manufacturers assembled in Chicago this week for an annual trade show. NeoCon®, the legacy name of the show, is a registered...

Water Tower Research

Commercial/Contract Furniture/Consumer Hardlines : Orders Remain Lower Y/Y, but at Moderating Pace

This note addresses the Monthly Market Pulse (MMP) of incoming orders and sales for March 2023 issued by the Business Institutional Furniture...

Water Tower Research

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