HNI CORP
For the period ended Jan 3, 2026. Filed Mar 3, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Mar 3, 2026
HNI$47.26-2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-28; filed 2025-02-25.
0000048287-25-000084
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-01-03; filed 2026-03-03.
0000048287-26-000084
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 85 current paragraphs.
29 unchanged; 31 reworded; 24 added; 12 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
On December 10, 2025, the Corporation completed its acquisition of Steelcase Inc. ("Steelcase"), a global design and furniture company, in a cash and stock transaction valued at approximately $1.9 billion. See "Note 4. Acquisitions and Divestitures" in the Notes to Consolidated Financial Statements for more details on the Steelcase acquisition. Steelcase will be included in the Workplace Furnishings segment. The Corporation has included the financial results of Steelcase in the Consolidated Financial Statements starting as of the date of acquisition.
Current report
The acquisition of Steelcase unites two industry leaders to meet the dynamic marketplace and evolving needs of the workplace amid accelerating in-office work trends. The combination will not only transform the Corporation, but it will also be transformational for the workplace furnishings industry — as two highly respected companies with shared values, talented teams, strong financial profiles, and highly complementary capabilities have been brought together. This strong foundation, combined with expected synergies, will accelerate the Corporation's ability to invest in long-term operational enhancements, digital transformation, products to meet evolving customer needs, and customer-centered buying experiences. Integration efforts are underway, utilizing a disciplined and proven approach informed by recent experience, while continuing to build on the iconic brands for which both companies are widely respected.
Current report
The Corporation continues to realize significant savings from synergies associated with the 2023 acquisition of Kimball International and the ramp-up of its Mexico facility. In addition, synergies associated with the integration of Steelcase will increase earnings over the next five years, with modest accretion expected in 2026. In addition to eliminating redundant public company corporate costs, the synergies are associated with expected savings in the Americas and does not include any revenue synergies.
Current report
During 2025, in Workplace Furnishings, the strategic focus remains margin expansion. The ongoing integration of the Kimball International business and related synergies, expanded utilization of its manufacturing facility in Mexico, and network optimization initiatives are enabling the segment's profit transformation plan, while the divestiture of HNI India in the second quarter of 2025 allows the Corporation to focus on its core strategies. The Residential Building Products business remains focused on driving revenue growth over the long term. Currently, the business is navigating challenging housing market dynamics resulting from interest rate volatility and affordability issues. In addition, macroeconomic volatility and evolving government tariff policies continue to drive a heightened level of uncertainty in the Corporation's markets. Both the Workplace Furnishings segment and the Residential Building Products segment increased net sales year-over-year, while maintaining strong profitability.
Current report
Results of Operations
Current report
Gross profit as a percentage of net sales increased 50 basis points in 2025 compared to 2024, driven by improved net productivity. Gross profit contains $2.2 million of Steelcase purchase accounting adjustments for inventory step-up and additional depreciation for the preliminary valuation adjustment to property, plant and equipment.
Current report
Selling and administrative expenses as a percentage of net sales increased 50 basis points in 2025 compared to 2024. This increase was driven by wage inflation, the impacts from the acquisition of Steelcase, and higher core SG&A, partially offset by higher net sales in the legacy HNI businesses. Selling and administrative expenses includes $2.4 million of Steelcase purchase accounting adjustments related to amortization of intangibles and additional depreciation for the preliminary valuation.
Current report
Acquisition Costs
Current report
In the current year the Corporation recorded costs of $94.6 million associated with the Steelcase acquisition. Acquisition costs consist primarily of change in control compensation expenses, transaction success fees, and other professional services fees. See "Note 4. Acquisitions and Divestitures" in the Notes to the Consolidated Financial Statements for further information.
Current report
Restructuring, Impairment, and Divestitures
Current report
In the current year the Corporation recorded charges of $18.5 million primarily in connection with the impairment of intangible assets related to a small business unit in the Workplace Furnishings segment, the loss on divestiture of the HNI India business, and the Corporation's network optimization program. Prior-year restructuring and impairment charges of $6.2 million were primarily incurred in connection with the Corporation's network optimization program.
Current report
In 2025, operating margin decreased 380 basis points compared to 2024 driven by acquisition costs and restructuring, impairment and divestiture charges. Excluding these items, operating margin was flat year-over-year with higher net sales volume in the legacy HNI businesses and improved net productivity, offset by impacts from the acquisition of Steelcase and higher core SG&A.
Current report
Net sales in 2025 for the Workplace Furnishings segment increased 14.6 percent compared to 2024. The acquisition of Steelcase increased segment net sales by $187.5 million over the prior year, partially offset by a $16.2 million decrease in net sales from the divestiture of HNI India in the second quarter of 2025. Excluding the impact of this transaction, segment net sales were up 4.7 percent driven by improved volume and price across most channels, with the exception of Hospitality which saw decreases in both volume and price.
Current report
Operating income as a percentage of net sales compressed 50 basis points in 2025 compared to 2024. The decrease was driven by impacts from the acquisition of Steelcase, unfavorable price-cost, and higher core SG&A, partially offset by improved net productivity and higher net sales volume. Operating income includes $4.6 million of purchase accounting costs related to inventory step-up, intangible amortization and additional depreciation related to the preliminary valuation of Steelcase.
Current report
Net sales in 2025 for the Residential Building Products segment increased 5.7 percent compared to 2024. Remodel/retrofit net sales increased year-over-year, while new construction was flat.
Current report
Steelcase Acquisition Financing - As described in more detail in "Note 7. Debt" in the Notes to the Consolidated Financial Statements, in connection with the Steelcase acquisition, the Corporation entered into a Credit Agreement on September 5, 2025 (the “Effective Date”), establishing (i) a senior secured revolving credit facility, (ii) a senior secured TLA Facility, and (iii) a senior secured TLB Facility.
Current report
Upon the completion of the acquisition on December 10, 2025, the Corporation incurred borrowings under the Credit Agreement facilities described above to repay and retire previous credit facilities and to fund the completion of the Steelcase acquisition. The extinguishment of prior facilities included the retirement of the Corporation’s previous unsecured revolving credit facility, term loan A facility, and private placement notes outstanding.
Current report
As of January 3, 2026, the Corporation had the following borrowings outstanding related to the acquisition and ongoing financing of business operations: $15 million of borrowings under the $425 million revolving credit facility, $350 million of borrowings under the TLA Facility, and $500 million of borrowings under the TLB Facility.
Current report
Company Owned Life Insurance (“COLI”) - The Corporation holds certain investments in COLI assets. The COLI investments are intended to be held to maturity but are recorded at net current cash surrender value. The Corporation has the option to draw against the cash surrender value of the policies without forgoing the long-term maturity benefits of the investment or surrender the policies for their cash surrender value. During the fourth quarter of 2025, the Corporation borrowed $32 million against the COLI investments.
Current report
Business Combinations and Fair Value Measurements
Current report
The Company accounts for business combinations using the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recorded at their estimated values as of the acquisition date. Determining the fair value of acquired assets and assumed liabilities requires management to make significant estimates and assumptions, particularly with respect to the fair values of the acquired inventory, property, plant and equipment, lease assets and liabilities, investments in unconsolidated affiliates and intangible assets. Management may engage a third-party valuation specialist to assist in developing those estimates. Fair value measurements are based on information available at the acquisition date and involve the use of valuation techniques that require judgment, including the selection of assumptions related to future cash flows, revenue growth rates, customer attrition, royalty rates, discount rates, useful lives, comparable property transactions, and price per square foot as well as other market participant expectations.
Current report
In certain acquisitions, such as the Steelcase Inc. acquisition, due to the proximity of the acquisition closing date to the end of a reporting period, the Corporation may record preliminary purchase price allocations for acquired assets and assumed liabilities. In this circumstance, the valuation approach applied was a benchmarking analysis based on publicly disclosed comparable transactions and available market data to develop preliminary estimates of the fair value of the acquired assets such as inventory, property, plant and equipment, and intangible assets, when complete valuation inputs are not yet available. The Corporation uses the information from comparable transactions to derive preliminary allocation percentage assumptions to estimate the value of the acquired assets. These preliminary estimates will be refined as additional information becomes available during the measurement period, which may result in material adjustments to the recorded amounts of the acquired assets and liabilities, including goodwill, and could affect depreciation, amortization, and other accounts in future periods.
Current report
As discussed in "Note 6. Goodwill and Other Intangible Assets" in the Notes to Consolidated Financial Statements, management performed a qualitative goodwill impairment test in the fourth quarter of 2025 for the majority of the Corporation's reporting units. Goodwill associated with the Steelcase acquisition was not included in the testing due to the timing of the acquisition. Management was comfortable with a qualitative test in 2025 due to the quantitative testing completed in 2024. For a small workplace furnishing reporting unit, management concluded that a triggering event occurred in the fourth quarter of 2025, resulting in quantitative impairment tests for goodwill. This testing resulted in no goodwill impairment charges recorded.
Current report
In September 2025, the Financial Accounting Standards Board issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 modernizes internal-use software guidance, eliminating accounting consideration for software development stages, requiring cost capitalization when management has authorized and is committed to funding the project and it is probable the projected will be completed and the software used for its intended function. The ASU becomes effective beginning with the first fiscal quarter of 2028, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance to the Consolidated Financial Statements.
Removed paragraphs (12)
Previous report
The Corporation has two reportable segments: workplace furnishings and residential building products. In 2024, the Corporation maintained focus on its strategic priorities. In workplace furnishings, ongoing integration of the Kimball International business and related synergies, expanded utilization of the new factory in Mexico, and the previously announced manufacturing optimization initiative are enabling the segment's profit transformation plan. These actions drove strong growth in workplace furnishings operating margin for the year, despite demand variability driven by macroeconomic conditions and U.S. election ambiguity that particularly impacted the latter portion of the year. The residential business products business continued to navigate cyclical housing market softness and inconsistent demand trends resulting from interest rate volatility, cost inflation, and overall consumer affordability issues. In spite of market headwinds, the business remained solidly profitable and committed to investing in capabilities to support long-term growth.
Previous report
Gross profit as a percentage of net sales increased 190 basis points in 2024 compared to 2023, driven by improved net productivity and favorable price-cost, partially offset by lower volume in the legacy HNI businesses.
Previous report
Selling and administrative expenses as a percentage of net sales decreased 90 basis points in 2024 compared to 2023. The decrease was driven by $41.2 million of acquisition-related expenses incurred in the prior year and acquisition-related cost synergies in 2024, partially offset by lower sales volume in the legacy HNI businesses.
Previous report
Selling and administrative expenses include freight expense for shipments to customers, research and development costs, and amortization of intangible assets. Refer to "Note 2. Summary of Significant Accounting Policies" and "Note 6. Goodwill and Other Intangible Assets" in the Notes to Consolidated Financial Statements for further information regarding the comparative expense levels for these items.
Previous report
Restructuring and Impairment Charges
Previous report
In the current year the Corporation recorded restructuring charges of $6.2 million primarily in connection with factory consolidation initiatives in the workplace furnishings segment and reorganization efforts in the residential building products segment. Prior-year charges primarily consisted of $31.0 million of goodwill and intangible asset impairments at small business units in the workplace furnishings segment and $9.8 million of restructuring charges associated with the divestiture of Poppin. See "Note 6. Goodwill and Other Intangible Assets" and "Note 17. Restructuring and Impairment" in the Notes to Consolidated Financial Statements for further information regarding restructuring and impairment charges.
Previous report
For 2024, operating margin increased 450 basis points compared to 2023. The prior year included $41.2 million of acquisition costs associated with the Kimball International transaction and $31.0 million of goodwill and intangible asset impairment charges at small workplace furnishings business units. Excluding these items, operating margin increased year-over-year driven by improved net productivity, favorable price-cost, the benefit of a full year of ownership of Kimball International, and lower restructuring costs, partially offset by lower sales volume in the legacy HNI businesses.
Previous report
Net sales in 2024 for the workplace furnishings segment increased 8.5 percent compared to 2023. The full year of Kimball International sales in 2024 increased net sales by $228.0 million over the prior year, while the divestiture of Poppin in the third quarter of 2023 decreased net sales by $11.1 million year-over-year. Excluding the impact of these transactions, segment sales were down 4.0 percent driven by lower demand across most customer channels, partially offset by improved volume in the hospitality sector and price realization.
Previous report
Operating income as a percentage of net sales increased 510 basis points in 2024 compared to 2023. The prior year included $31.0 million in goodwill and intangible asset impairment charges at small workplace furnishings business units, $12.5 million in Kimball International acquisition-related expenses, and $9.0 million of restructuring costs in connection with the exit of Poppin. Excluding these items, operating income as a percentage of sales increased driven by improved net productivity, the benefit of a full year of Kimball International ownership in 2024, and favorable price-cost, partially offset by lower sales volume in the legacy HNI businesses.
Previous report
Net sales in 2024 for the residential building products segment decreased 8.0 percent compared to 2023. Remodel/retrofit sales volume decreased at a higher rate than new construction, with both channels adversely impacted by housing market weakness and broader macroeconomic volatility.
Previous report
Additionally, in the prior year, the Corporation borrowed $300 million in connection with a term loan agreement entered into on March 31, 2023, as further amended on May 25, 2023 to support funding of the acquisition of Kimball International. In 2024, the Corporation separately executed an aggregate $100 million of early repayments of the outstanding principal balance on this term loan. Borrowings under the revolving credit facility were used to finance the early repayments. As a result, no additional principal amortization is due prior to maturity of the facility in March 2028. See "Note 7. Debt" in the Notes to Consolidated Financial Statements for further information.
Previous report
In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 enhances transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and disaggregation of income taxes paid by jurisdiction. Additionally, the ASU requires disclosure of pretax income (or loss) and income tax (or benefit) disaggregated by domestic and foreign. Finally, the ASU removes the requirement of certain disclosures related to unrecognized tax benefits. The ASU becomes effective for the Corporation beginning with its annual period ending December 2025. The ASU will not impact the financial condition, results of operations, or cash flows of the Corporation. The Corporation is currently evaluating the impact to the notes to the consolidated financial statements, and expects additional disclosures will be required on adoption.
Reworded paragraphs (31)
Previous wording
The following discussion of the Corporation’s historical results of operations and of its liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements of the Corporation and related notes. All dollar amounts presented are in millions, except per share data or where otherwise indicated. Amounts may not sum due to rounding. Statements that are not historical are forward-looking and involve risks and uncertainties. See "Item 1A. Risk Factors" and the Forward-Looking Statements section within "Item 1. Business" for further information.
Current wording
The following discussion of the Corporation’s results of operations and of its liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements of the Corporation and related notes. All dollar amounts presented are in millions, except per share data or where otherwise indicated. Amounts may not sum due to rounding. Statements that are not historical are forward-looking and involve risks and uncertainties. See "Item 1A. Risk Factors" and the Forward-Looking Statements section within "Item 1. Business" for further information.
Previous wording
The Corporation follows a 52/53-week fiscal year, which ends on the Saturday nearest December 31. Fiscal year 2024 ended on December 28, 2024, fiscal year 2023 ended on December 30, 2023, and fiscal year 2022 ended on December 31, 2022. The financial statements for fiscal years 2024, 2023, and 2022 are on a 52-week basis. A 53-week year occurs approximately every sixth year.
Current wording
The Corporation follows a 52/53-week fiscal year, which ends on the Saturday nearest December 31. Fiscal year 2025 ended on January 3, 2026, fiscal year 2024 ended on December 28, 2024, and fiscal year 2023 ended on December 30, 2023. The financial statements for fiscal year 2025 are on a 53-week basis and 2024, and 2023 are on a 52-week basis. A 53-week year occurs approximately every sixth year.
Previous wording
To review discussion and analysis of the consolidated and segment-level results of operations for the fiscal year ended December 30, 2023 compared with the fiscal year ended December 31, 2022, refer to "Part II - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, as filed with the Securities and Exchange Commission on February 27, 2024.
Current wording
To review management's discussion and analysis of the consolidated and segment-level results of operations for the fiscal year ended December 28, 2024 compared with the fiscal year ended December 30, 2023, refer to "Part II - Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024, as filed with the Securities and Exchange Commission on February 25, 2025.
Previous wording
HNI Corporation is a leading global designer and provider of commercial furnishings, and a leading manufacturer and marketer of hearth products. The Corporation utilizes a multi-faceted go-to-market model to deliver value to customers via various brands and selling models. The Corporation is focused on growing its existing businesses while seeking out and developing new opportunities for expansion.
Current wording
HNI Corporation has been improving where people live, work, and gather for more than 80 years. HNI is a manufacturer of workplace furnishings and residential building products. Within workplace furnishings, the Corporation is the thought leader in commercial furnishings and the preeminent global designer, innovator, and provider of workplace solutions going to market under unique brands serving multiple channels and customers from the largest multinational companies to small local businesses. Within residential building products, the Corporation is the nation's leading manufacturer and marketer of hearth products. The Corporation utilizes a multi-faceted go-to-market model to deliver value to customers via various brands and selling models. HNI is focused on growing its existing businesses while seeking out and developing new opportunities for expansion. The Corporation's two reportable segments consist of Workplace Furnishings and Residential Building Products. Fiscal year 2025 included 53 weeks, with the extra week occurring in the fourth quarter, while fiscal year 2024 included 52 weeks.
Previous wording
Consolidated net sales for 2024 were $2.526 billion, an increase of 3.8 percent compared to net sales of $2.434 billion in the prior year. The change was driven by 8.5 percent year-over-year sales growth in the workplace furnishings segment, partially offset by an 8.0 percent decrease in the residential building products segment. The full year of Kimball International sales in 2024 increased year-over-year sales by $228.0 million. The divestiture of Poppin, Inc. ("Poppin") in 2023 reduced year-over-year sales by $11.1 million. Poppin had been acquired in the prior year as part of the Kimball International transaction and was a component of the workplace furnishings segment. See "Note 4. Acquisitions and Divestitures" in the Notes to Consolidated Financial Statements for more details on the Kimball International acquisition and the Poppin divestiture. These transactions affect the comparability of results between years. The references below to "legacy" HNI businesses refer to the Corporation's businesses excluding the acquisition and impact of Kimball International.
Current wording
Consolidated net sales for 2025 were $2.8 billion, an increase of 12.4 percent compared to net sales of $2.5 billion in the prior year. The change was driven by 14.6 percent year-over-year sales growth in the Workplace Furnishings segment, and an 5.7 percent increase in net sales in the Residential Building Products segment. Steelcase contributed $187.5 million in net sales since the acquisition date. The divestiture of HNI India in the second quarter of 2025 reduced year-over-year sales by $16.2 million. These transactions affect the comparability of results between years. The references below to "legacy" HNI businesses refer to the Corporation's businesses excluding the acquisition and impact of Steelcase.
Previous wording
Net income attributable to the Corporation in 2024 was $139.5 million compared to net income of $49.2 million in 2023. The prior year included $41.2 million of acquisition costs associated with the Kimball International transaction and $31.0 million of goodwill and intangible asset impairment charges at small workplace furnishings business units. Excluding these items, net income increased in the current year driven by improved net productivity, favorable price-cost, and the full year benefit of the Kimball International acquisition, partially offset by lower sales volume in the legacy HNI businesses.
Current wording
Net income attributable to the Corporation in 2025 was $54.2 million compared to net income of $139.5 million in 2024. The current year included $94.6 million of acquisition costs, $9.5 million of additional interest expense related to the Steelcase transaction, the $7.7 million impairment of intangible assets at a small Workplace Furnishings business, a loss of $6.5 million on the divestiture of HNI India, and $4.6 million of purchase accounting adjustments related to the Steelcase acquisition. Excluding these items, net income increased in the current year driven by higher net sales volume in the legacy HNI businesses and improved net productivity, partially offset by higher core Selling and administrative expenses ("SG&A").
Previous wording
Consolidated net sales for 2024 increased 3.8 percent compared to the prior year. The change was driven by $228.0 million of favorable impact from the full year of Kimball International sales in 2024 and price realization in both the residential building products and workplace furnishings segments. These factors were partially offset by lower volume in the legacy HNI businesses due to soft market conditions and an $11.1 million decrease in net sales from the divestiture of Poppin in the third quarter of 2023.
Current wording
Consolidated net sales for 2025 increased 12.4 percent compared to the prior year. The change was driven by $187.5 million of favorable impact from the acquisition of Steelcase in the current year along with volume growth and price realization in both the Residential Building Products and Workplace Furnishings segments. These factors were partially offset by a $16.2 million decrease in net sales from the divestiture of HNI India in the second quarter of 2025.
Previous wording
Interest expense, net was $27.2 million and $25.5 million in 2024 and 2023, respectively. The increase was driven by higher average outstanding borrowings resulting from indebtedness incurred to fund the acquisition of Kimball International.
Current wording
Interest expense, net was $35.6 million and $27.2 million in 2025 and 2024, respectively. The increase was driven by higher average outstanding borrowings incurred to fund the acquisition of Steelcase.
Previous wording
The income tax provision reflects a lower rate in 2024 compared to the prior year, primarily due to the impact of non-deductible transaction costs incurred in 2023 in connection with the acquisition of Kimball International. See "Note 8. Income Taxes" in the Notes to Consolidated Financial Statements for further information relating to income taxes.
Current wording
The income tax provision reflects a higher rate in 2025 compared to the prior year, primarily due to the impact of acquisition costs and parachute compensation payments for acquisition of Steelcase. See "Note 8. Income Taxes" in the Notes to Consolidated Financial Statements for further information relating to income taxes.
Previous wording
Net income attributable to the Corporation was $139.5 million or $2.88 per diluted share in 2024 compared to $49.2 million or $1.09 per diluted share in 2023.
Current wording
Net income attributable to the Corporation was $54.2 million or $1.11 per diluted share in 2025 compared to $139.5 million or $2.88 per diluted share in 2024.
Previous wording
Operating income as a percentage of net sales increased 60 basis points in 2024 compared to 2023. The increase was driven by improved net productivity, favorable price-cost, lower variable compensation, and favorable product mix, partially offset by lower sales volume.
Current wording
Operating income as a percentage of net sales increased 60 basis points in 2025 compared to 2024. The increase was driven by favorable price-cost, partially offset by higher variable compensation.
Previous wording
Cash, cash equivalents, and short-term investments totaled $28.9 million at the end of 2024, compared to $34.5 million at the end of 2023. These funds, coupled with cash flow from future operations, borrowing capacity expected to be available under the Corporation’s existing credit agreements, and the ability to access capital markets, are expected to be adequate to fund operations and satisfy the Corporation's cash flow needs for at least the next twelve months. As of December 28, 2024, the Corporation can access the full $425 million of borrowing capacity available under the revolving credit facility, which includes the $45.7 million outstanding as of that date, and maintain compliance with applicable covenants. As of the end of 2024, an immaterial amount of cash was held overseas and considered permanently reinvested.
Current wording
Cash, cash equivalents, and short-term investments totaled $215.7 million at the end of 2025, compared to $28.9 million at the end of 2024. These funds, coupled with cash flow from future operations, borrowing capacity expected to be available under the Corporation’s existing credit agreements, and the continued ability to access capital markets, are expected to be adequate to fund operations and satisfy the Corporation's cash flow needs for at least the next twelve months. As of January 3, 2026, the Corporation can access the full $425 million of borrowing capacity available under the revolving credit facility, which includes the $15.0 million of borrowings outstanding as of that date, and maintain compliance with financial covenants under its debt agreements. As of the end of 2025, $54 million of cash was held outside of the United States.
Previous wording
Operating cash flows were $226.7 million in 2024, compared to $267.5 million cash in 2023. The decrease was driven by higher usage of working capital in the current year. Working capital was a use of cash in 2024, compared to a source of cash in 2023. The current year working capital cash usage was consistent with normal historical patterns, while working capital activity in 2023 did not adhere to this pattern due to the impact and timing of the acquisition of Kimball International. Additionally, non-cash items adjusted from net income to reconcile to operating cash flows were lower in 2024 primarily as a result of the absence of asset impairment charges and an increase in non-cash deferred tax benefits. These factors were partially offset by higher net income in 2024 as described in the preceding "Results of Operations" section.
Current wording
Operating cash flows were $276.3 million in 2025, compared to $226.7 million in 2024. The increase was driven by favorable cash tax impacts including those resulting from the One Big Beautiful Bill Act (“OBBBA”). Working capital was a source of cash in 2025, compared to a use of cash in 2024. These factors were partially offset by lower net income in 2025 as described in the preceding "Results of Operations" section.
Previous wording
The Corporation places special emphasis on management and control of working capital, including accounts receivable and inventory. Management believes recorded trade receivable valuation allowances at the end of 2024 are adequate to cover the risk of potential bad debts. Allowances for non-collectible trade receivables, as a percent of gross trade receivables, totaled 0.8 percent and 1.4 percent at the end of 2024 and 2023, respectively. The Corporation’s inventory turns were 7.6 and 7.9 for 2024 and 2023, respectively.
Current wording
The Corporation places special emphasis on management and control of working capital, including accounts receivable and inventory. Management believes recorded trade receivable valuation allowances at the end of 2025 are adequate to cover the risk of potential bad debts. Allowances for non-collectible trade receivables, as a percent of gross trade receivables, totaled 0.2 percent and 0.8 percent at the end of 2025 and 2024, respectively. The decrease in allowances for non-collectible trade receivables as a percent of gross trade receivables was driven by the addition of Steelcase's receivables as a result of the acquisition. The Corporation’s inventory turns were 8.7 and 7.6 for 2025 and 2024, respectively. Inventory turns in the current year have been normalized for the impact of half a month of Steelcase activity.
Previous wording
Capital Expenditures - Capital expenditures, including capitalized software, were $52.9 million in 2024 and $79.1 million in 2023. In the prior year, the Corporation had higher expenditures related to a manufacturing facility expansion, which did not recur in the current year. The Corporation’s expenditures are primarily focused on machinery, equipment, and tooling required to support new products, continuous improvements, and cost savings initiatives in manufacturing processes. Additionally, in support of the Corporation’s long-term strategy to create effortless winning experiences for customers, the Corporation continues to invest in technology. The Corporation expects capital expenditures for 2025 to be in the range of $75 million to $85 million.
Current wording
Capital Expenditures - Capital expenditures, including capitalized software, were $67.8 million in 2025 and $52.9 million in 2024. The current-year capital expenditures were primarily applied to machinery, equipment, and tooling required to support continuing operations, continuous improvements, and cost savings initiatives in the manufacturing processes. Additionally, in support of the Corporation's long-term strategy to create effortless winning experiences for customers, the Corporation continues to invest in technology and digital capabilities. The Corporation expects capital expenditures for 2026 to be in the range of $140 million to $150 million.
Previous wording
Acquisitions and Divestitures - Investing activities in 2023 included expenditures of $369.7 million to acquire Kimball International, and $2.7 million received from the sale of Poppin (net of costs to sell). See "Note 4. Acquisitions and Divestitures" in the Notes to the Consolidated Financial Statements for further information.
Current wording
Acquisitions and Divestitures - Investing activities in 2025 included expenditures of $390.3 million to acquire Steelcase, net of cash acquired, including restricted cash classified as "Other Assets" in the Consolidated Balance Sheets, and $8.1 million received from the sale of HNI India (net of costs to sell). See "Note 4. Acquisitions and Divestitures" in the Notes to the Consolidated Financial Statements for further information.
Previous wording
The last quarterly dividend increase was from $0.32 to $0.33 per common share effective with the June 12, 2024 dividend payment for shareholders of record at the close of business on May 24, 2024. The average dividend payout percentage for the most recent three-year period has been 74 percent of prior-year earnings or 36 percent of prior-year cash flow from operating activities.
Current wording
The last quarterly dividend increase was from $0.33 to $0.34 per common share effective with the June 11, 2025 dividend payment for shareholders of record at the close of business on May 23, 2025. The average dividend payout percentage for the most recent three-year period has been 58 percent of prior-year earnings or 32 percent of prior-year cash flow from operating activities.
Previous wording
Stock Repurchase - The Corporation’s capital strategy related to stock repurchase is focused on offsetting the dilutive impact of issuances of common stock pursuant to equity awards granted for various compensation-related matters. The Corporation may elect to opportunistically purchase additional shares based on excess cash generation and/or share price considerations. In 2024, the Corporation spent $65.8 million to repurchase 1.3 million shares of its common stock. As of December 28, 2024, $167.6 million was authorized and available for repurchase of shares by the Corporation. See "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" in the Notes to Consolidated Financial Statements for further information.
Current wording
Stock Repurchase - The Corporation’s long-term strategy related to stock repurchases is focused on offsetting the dilutive impact of issuances of common stock pursuant to equity awards granted for various compensation-related matters. The Corporation may elect to opportunistically purchase additional shares based on excess cash generation and/or share price considerations. In 2025, the Corporation spent $83.6 million to repurchase 1.8 million shares of its common stock. As of January 3, 2026, $84.3 million was authorized and available for repurchase of shares by the Corporation. See "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" in the Notes to Consolidated Financial Statements for further information.
Previous wording
Sales of Stock - The Corporation records cash flows received from the sale of its common stock held in treasury, primarily in connection with stock option exercises and the HNI Corporation Members’ Stock Purchase Plan. The approximately $50 million increase in cash proceeds in the current year was due to a significant uptick in stock options exercised, driven by growth in the market value per share of the Corporation's common stock. See "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" and "Note 11. Stock-Based Compensation" in the Notes to Consolidated Financial Statements for further information.
Current wording
Sales of Stock - The Corporation records cash flows received from the sale of its common stock held in treasury, primarily in connection with stock option exercises and the HNI Corporation Members’ Stock Purchase Plan. The approximately $50 million decrease in cash proceeds in the current year was due to a significant uptick in stock options exercised in the prior year, driven by growth in the market value per share of the Corporation's common stock. See "Note 10. Accumulated Other Comprehensive Income (Loss) and Shareholders’ Equity" and "Note 11. Stock-Based Compensation" in the Notes to Consolidated Financial Statements for further information.
Previous wording
As of December 28, 2024, the Corporation has the following obligations and commitments to make future payments:
Current wording
As of January 3, 2026, the Corporation has the following principal obligations and commitments to make future payments:
Previous wording
Purchase Obligations - The Corporation’s purchase obligations include agreements to purchase goods or services that are enforceable, legally binding, and specify all significant terms, including the quantity to be purchased, the price to be paid, and the timing of the purchase. Estimated purchase obligations total $116 million during 2025 and $2 million thereafter.
Current wording
Purchase Obligations - The Corporation’s purchase obligations include agreements to purchase goods or services that are enforceable, legally binding, and specify all significant terms, including the quantity to be purchased, the price to be paid, and the timing of the purchase. Estimated purchase obligations total $154 million during 2026 and $41 million thereafter.
Previous wording
Debt - Debt principal obligations are approximately $50 million during 2025 and $296 million thereafter. Interest obligations from debt are estimated to be approximately $18 million during 2025 and $36 million thereafter. Refer to "Note 7. Debt" in the Notes to Consolidated Financial Statements for additional information.
Current wording
Debt - Debt principal obligations are approximately $16 million during 2026 and $1,301 million thereafter. Interest obligations from debt are estimated to be approximately $71 million during 2026 and $289 million thereafter. See "Note 7. Debt" in the Notes to Consolidated Financial Statements for additional information.
Previous wording
Deferred Compensation - Deferred compensation cash obligations related to legacy HNI plans are expected to be approximately $0.3 million during 2025 and $3.0 million thereafter. Refer to "Note 11. Stock-Based Compensation" in the Notes to Consolidated Financial Statements for additional information. Obligations related to the Kimball International supplemental employee retirement plan are expected to be $4 million during 2025 and $7 million thereafter. Refer to "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements for additional information.
Current wording
Employee Benefit Obligations - Deferred compensation cash obligations related to legacy HNI plans are expected to be approximately $0.3 million during 2026 and $3.9 million thereafter. For legacy HNI post-retirement benefit plans, payments are expected to be approximately $1 million during 2026 and $10 million in aggregate from 2027 through 2035. For legacy Steelcase employee benefit plans, payments are expected to be approximately $65 million during 2026 and $82 million in aggregate from 2027 through 2035. See "Note 12. Employee Benefit Plan Obligations" in the Notes to Consolidated Financial Statements for additional information on legacy HNI and legacy Steelcase plan obligations. Obligations related to the Kimball International supplemental employee retirement plan are expected to be $5 million during 2026 and $7 million thereafter. See "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements for additional information.
Previous wording
Operating and Finance Leases - Operating and finance lease obligations are expected to be approximately $41 million during 2025 and $152 million thereafter. There were no material commitments related to leases which had been signed but not commenced as of the end of 2024. Refer to "Note 14. Leases" in the Notes to Consolidated Financial Statements for additional information.
Current wording
Operating and Finance Leases - Operating and finance lease obligations are expected to be approximately $90 million during 2026 and $273 million thereafter. There were no material commitments related to leases which had been signed but not commenced as of the end of 2024. See "Note 13. Leases" in the Notes to Consolidated Financial Statements for additional information.
Previous wording
Other Obligations - Other long-term obligations of approximately $15 million are primarily comprised of a put option, uncertain tax liabilities, and dividends owed in connection with stock-based compensation awards. Additionally, in 2022 the Corporation entered into a long-term commitment to purchase solar energy from a local utility to satisfy a portion of the Corporation’s electricity demand in the Muscatine, Iowa area. The Corporation’s future commitment to the project totals approximately $13 million. The commencement of the project was initially estimated to be in 2025, but has been delayed. For the Corporation’s estimated future obligations related to product warranties and self-insured liabilities, refer to "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements.
Current wording
Other Obligations - Other long-term obligations of approximately $34 million are primarily comprised of statutory benefits for certain overseas workers, a put option, and uncertain tax liabilities. Additionally, in 2022 the Corporation entered into a long-term commitment to purchase solar energy from a local utility to satisfy a portion of the Corporation’s electricity demand in the Muscatine, Iowa area. The Corporation’s future commitment to the project totals approximately $13 million. The commencement of the project was initially estimated to be in 2025, but has been delayed. For the Corporation’s estimated future obligations related to product warranties and self-insured liabilities, see "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements.
Previous wording
The Corporation continues to navigate near-term uncertainty driven by macroeconomic conditions, including the recent dynamics around housing, cost inflation, and interest rates. However, management remains optimistic about the long-term prospects in the workplace furnishings and residential building products markets. Management believes the Kimball International acquisition will continue to generate new opportunities for growth, and the Corporation continues to compete well in its legacy business markets.
Current wording
The Corporation continues to navigate near-term uncertainty driven by macroeconomic conditions, including the recent dynamics around housing, cost inflation, and interest rates. However, management remains optimistic about the long-term prospects in the workplace furnishings and residential building products markets. Management believes the Steelcase Inc. acquisition will generate new opportunities for growth, and the Corporation continues to compete well in its legacy business markets.
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the Consolidated Financial Statements, prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection, and disclosure of these estimates with the Audit Committee of the Board. Actual results may differ from these estimates under different assumptions or conditions.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the Consolidated Financial Statements, prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Senior management has discussed the development, selection, and disclosure of these estimates with the Audit Committee of the Board of Directors. Actual results may differ from these estimates under different assumptions or conditions.
Previous wording
The Corporation reviews goodwill at the reporting unit level, which refers to components for which discrete financial information is available and regularly reviewed by segment management. The accounting standards for goodwill permit entities to first assess qualitative factors to determine whether it is more likely than not the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the quantitative test is required, the Corporation estimates the fair value of its reporting units based on a weighted average of the income approach and the market approach. This estimated fair value is compared to the carrying value of the reporting unit and an impairment is recorded if the estimate is less than the carrying value. In the income approach, the estimate of fair value of each reporting unit is based on management’s projection of revenues, gross margin, operating costs, and cash flows considering historical and estimated future results, general economic and market conditions, as well as the impact of planned business and operational strategies. The valuations employ present value techniques to measure fair value and consider market factors. In the market approach, the Corporation utilizes the guideline company method, which involves calculating valuation multiples based on operating data from guideline publicly-traded companies. These multiples are then applied to the operating data for the reporting units and adjusted for factors similar to those used in the discounted cash flow analysis. Management believes the assumptions used for the quantitative impairment test, if required, are consistent with those utilized by a market participant in performing similar valuations of its reporting units. Management bases its fair value estimates on assumptions they believe to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates.
Current wording
The Corporation reviews goodwill at the reporting unit level, which refers to components for which discrete financial information is available and regularly reviewed by segment management. The accounting standards for goodwill permit entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. If the quantitative test is required, the Corporation estimates the fair value of its reporting units based on a weighted average of the income approach and the market approach. This estimated fair value is compared to the carrying value of the reporting unit and an impairment is recorded if the estimate is less than the carrying value. In the income approach, the estimate of fair value of each reporting unit is based on management’s projection of revenues, gross margin, operating costs, and cash flows considering historical and estimated future results, general economic and market conditions, and the impact of planned business and operational strategies. The valuations employ present value techniques to measure fair value and consider market factors. In the market approach, the Corporation utilizes the guideline company method, which involves calculating valuation multiples based on operating data from guideline publicly-traded companies. These multiples are then applied to the operating data for the reporting units and adjusted for factors similar to those used in the discounted cash flow analysis. Management believes the assumptions used for the quantitative impairment test, if required, are consistent with those utilized by a market participant in performing similar valuations of its reporting units. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates.
Previous wording
The key to recoverability of goodwill is the forecast of economic conditions and its impact on future revenues, operating profit, and cash flows. Management’s projection for the United States office furniture and domestic hearth markets and global economic conditions is inherently subject to a number of uncertain factors, such as global economic improvement, the U.S. housing market, credit availability, borrowing rates, and overall consumer confidence. In the near term, as management monitors the above factors, it is possible it may change the revenue and cash flow projections of certain reporting units, which may require the recording of additional goodwill impairment charges.
Current wording
The key to recoverability of goodwill is the forecast of economic conditions and its impact on future revenues, operating profit, and cash flows. Management’s projection for the United States office furniture and domestic hearth markets and global economic conditions is inherently subject to a number of uncertain factors, such as global economic improvement, the United States housing market, credit availability, borrowing rates, and overall consumer confidence. In the near term, as management monitors the above factors, it is possible it may change the revenue and cash flow projections of certain reporting units, which may require the recording of additional goodwill impairment charges.
Previous wording
As described in "Note 4. Acquisitions and Divestitures" in the Notes to Consolidated Financial Statements, in 2023 the Corporation acquired Kimball International in a transaction valued at $504 million, resulting in the addition of $164 million of goodwill. Of this goodwill, $156 million was assigned to the new Kimball Workplace & Health reporting unit. Recently acquired goodwill assigned to a new reporting unit generally has a higher inherent valuation risk, relative to goodwill assigned to reporting units that historically have had a large excess of fair value over carrying value. As discussed in "Note 6. Goodwill and Other Intangible Assets" in the Notes to Consolidated Financial Statements, management performed a quantitative goodwill impairment test in the fourth quarter of 2024. This testing resulted in no goodwill impairment charges recorded related to the Kimball Workplace & Health reporting unit, nor any of the remaining reporting units of the Corporation, in 2024.
Current wording
As described in "Note 4. Acquisitions and Divestitures" in the Notes to Consolidated Financial Statements, in 2025 the Corporation acquired Steelcase Inc. in a transaction valued at $1.9 billion, resulting in the preliminary addition of $515.9 million of goodwill, all of which was assigned to the Workplace Furnishings segment. Recently acquired goodwill assigned to a new reporting unit generally has a higher inherent valuation risk, relative to goodwill assigned to reporting units that historically have had a large excess of fair value over carrying value.
Previous wording
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 aims to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of costs and expenses, including purchases of inventory, employee compensation, selling expenses, depreciation, and intangible asset amortization within commonly presented captions on the face of the income statement. Disclosures are required to be made on an annual and interim basis in a tabular format in the footnotes to the financial statements. The ASU becomes effective for the Corporation for its fiscal year ending December 2027, and for interim periods beginning with the first fiscal quarter of 2028, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance to the consolidated financial statements.
Current wording
In November 2024, the Financial Accounting Standards Board issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 aims to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of costs and expenses, including purchases of inventory, employee compensation, selling expenses, depreciation, and intangible asset amortization within commonly presented captions on the face of the income statement. Disclosures are required to be made on an annual and interim basis in a tabular format in the footnotes to the financial statements. The ASU becomes effective for the Corporation for its fiscal year ending December 2027, and for interim periods beginning with the first fiscal quarter of 2028, and may be applied either prospectively or retrospectively. Early adoption is permitted. The Corporation is currently evaluating the impact of adopting this guidance to the Consolidated Financial Statements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Post-Retirement Benefit Plan - Post-retirement benefit plan payments are expected to be approximately $1 million during 2025 and $11 million in aggregate from 2026 through 2034. Refer to "Note 13. Post-Retirement Health Care" in the Notes to Consolidated Financial Statements for additional information.