Kimball acquisition continues to bolster HNI’s earnings in Q1

Kimball acquisition continues to bolster HNI’s earnings in Q1

MUSCATINE, Iowa – Office and contract furniture giant HNI reported $588 million in first quarter sales, a 22.7% increase over the same period last year. Just like last quarter, however, it should be noted a bulk of this increase is due to HNI’s purchase of competing contract furniture giant Kimball in March of last year. When looking at organic sales without Kimball, sales fell 8.1%.

Gross profit for the quarter was $175.8 million, a 33.6% increase with Kimball and a 0.9% increase organically. Profit margin expanded 320 basis points from last quarter, which the company attributed to favorable price-cost, improved productivity and the impact of the Kimball acquisition.

Operating income for the quarter was $29.7 million, more than tripling last year’s $6.4 million.

“Our strong results continued to be fueled by our Workplace Furnishings profit transformation plan and the inclusion of Kimball International, which combined to deliver the highest first quarter Workplace Furnishings profit margin since 2016,” said Jeff Lorenger, CEO and president.

“In Residential Building Products, our recent cost actions helped support profitability despite ongoing market weakness. Longer-term we remain bullish about the prospects of the housing market, broadly, and our market-leading position, specifically.

“Overall, we started the year on a very strong note,” he continued. “Our results reflect the dedication of our member-owners, the strength of our business model, and our ability to manage through all parts of the economic cycle.”

Workplace furnishings sales increased 46.8% with Kimball and fell 2.5% without it. Operating margin for the segment improved 6%, while orders increased 2%. In the residential building products segment, net sales fell 17.4%.

The company expects a “solid” increase in second quarter earnings.

“Our teams continue to build upon the strong progress we have made over the past two years,” said Lorenger. “We delivered earnings that were nearly triple the prior-year period, with EPS and operating margin reaching first quarter levels not seen since 2007.”

See also:

  • Thanks to Kimball acquisition, HNI sees major sales gains in fourth quarter
  • Steelcase reports weaker Q4, but with growth coming from large corporations

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