HNI CORP

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During the nine months ended September 27, 2025, there have been no material changes to the risk factors discussed in the 2024 Annual Report other than the risk factors set forth below relating to the merger transactions (the "Mergers") described elsewhere in this report pursuant to which the Corporation will acquire Steelcase Inc. ("Steelcase") in accordance with the terms and subject to the conditions set forth in the Agreement and Plan of Merger (as amended from time to time, the "Merger Agreement"), dated as of August 3, 2025, by and among the Corporation, Geranium Merger Sub I, Inc., Geranium Merger Sub II, LLC and Steelcase, and under which holders of Steelcase common stock will receive, at their election, merger consideration consisting of cash, shares of HNI common stock, or a combination of cash and shares of HNI common stock. Additional information regarding the transactions contemplated by the Merger Agreement and risks related to the Mergers and to the Corporation after completion of the Mergers is contained in the Corporation's Registration Statement on Form S-4 filed with the Securities and Exchange Commission on September 12, 2025, as that document may be amended from time to time.

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Risks Related to the Mergers

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The Mergers are subject to conditions, some or all of which may not be satisfied or may not be completed on a timely basis, if at all. Failure to complete the Mergers on a timely basis or at all could have adverse effects on HNI.

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The completion of the Mergers is subject to a number of conditions. If the Mergers are not completed, HNI's ongoing business, financial condition, financial results and stock price could be materially adversely affected, and HNI would forgo any benefit of completing the Mergers. In that event, HNI would be subject to a number of risks, including the following:

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•the market price of HNI common stock could be reduced to the extent that the current market price reflects a market assumption that the transaction will be completed;

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•HNI could owe Steelcase a termination fee of $71 million or $134 million, as applicable, if the Merger Agreement were terminated under specified circumstances;

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•HNI could experience negative reactions from the financial markets or from its customers, dealers, suppliers or employees; and

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•HNI could become involved in litigation related to any failure to complete the Mergers or related to any proceeding commenced against HNI to perform its obligations pursuant to the Merger Agreement.

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HNI is subject to business uncertainties and contractual restrictions while the proposed transaction is pending, which could adversely affect its business and operations.

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In connection with the pendency of the Mergers, it is possible that some customers, dealers, suppliers and other persons with which HNI has business relationships may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with HNI, as a result of the Mergers or otherwise. Under the terms of the Merger Agreement, HNI is subject to restrictions on the conduct of its business prior to completing the Mergers, which may adversely affect HNI's ability to acquire assets. Each of these risks may be exacerbated by delays or other adverse developments with respect to the completion of the Mergers.

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HNI's shareholders will be diluted by the Mergers.

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The Mergers will dilute the ownership position of HNI's current shareholders. Based on the fully diluted shares of HNI and Steelcase as of the date of the Merger Agreement, HNI estimates that holders of Steelcase common stock immediately prior to the effective time of the first Merger will own approximately 36% of the common stock of HNI immediately following the completion of the Mergers and holders of HNI common stock immediately prior to the effective time of the first Merger will own approximately 64% of the common stock of HNI immediately following the completion of the Mergers.

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The Mergers will involve substantial costs for HNI.

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HNI has incurred, and expects to continue to incur, a number of non-recurring costs associated with the Mergers, a substantial majority of which will consist of transaction and regulatory costs.

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To facilitate the financing of the cash portion of the merger consideration, HNI has entered into a credit agreement subject to certain conditions which, if not satisfied, could delay or prevent completion of the Mergers.

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On September 5, 2025, HNI and certain of its U.S. subsidiaries entered into a credit agreement with the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto (the "lenders") and Wells Fargo Bank, National Association, as administrative agent (the "Credit Agreement"). The disbursement of funds under the Credit Agreement, which are to be used by HNI to, among other things, (i) satisfy a portion of its monetary obligations with respect to the consummation of the transactions contemplated by the Merger Agreement and (ii) refinance its existing indebtedness, is subject to certain limited conditions set forth in the Credit Agreement. If such conditions are not satisfied, HNI may be unable to meet its monetary obligations with respect to the transactions contemplated by the Merger Agreement and the refinancing of its existing indebtedness.

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In the event that the debt financing contemplated by the Credit Agreement is not available, there is a risk that other financing may not be available on acceptable terms, in a timely manner or at all. Although HNI's obligation to consummate the Mergers is not conditioned upon consummation of any debt financing, if HNI is unable to obtain the debt financing contemplated by the Credit Agreement, the Mergers could be delayed or not completed, in which case HNI could be in breach of its obligations under the Merger Agreement.

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Risks Related to HNI After Completion of the Mergers

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HNI may not achieve the intended benefits of the Mergers, and the Mergers may disrupt its current plans or operations.

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HNI may not be able to successfully integrate Steelcase's assets or otherwise realize the expected benefits of the Mergers (including operating and other cost synergies). Difficulties in integrating Steelcase into HNI may result in HNI performing differently than expected, in operational challenges, in the failure to realize anticipated run-rate cost synergies and efficiencies in the expected time frame or at all, or in the difficulty or failure of utilizing available U.S. tax attributes, in which case the Mergers may not be accretive to earnings per share, may not improve HNI's balance sheet position, and may not enhance HNI's ability to deliver or generate additional free cash flow due to reduced cash tax payments. The integration of HNI and Steelcase may result in material challenges, including the diversion of management's attention from ongoing business concerns; difficulty in retaining key management and other employees; challenges in retaining or attracting business opportunities and establishing or maintaining business relationships; the possibility of faulty assumptions underlying expectations regarding the integration process and associated expenses; difficulty in consolidating corporate and administrative infrastructures and eliminating duplicative operations; challenges in coordinating geographically separate organizations; unanticipated issues in integrating information technology, communications and other systems; discovery of previously unknown liabilities; unforeseen expenses relating to integration; or delays associated with the Mergers.

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The results of HNI after the completion of the Mergers may be adversely impacted if HNI does not effectively manage its expanded operations following the completion of the Mergers.

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Following the completion of the Mergers, the size of HNI's business will be significantly larger than the current size of either HNI's or Steelcase's respective businesses. HNI's ability to successfully manage this expanded business will depend, in part, upon management's ability to design and implement strategic initiatives that address not only the integration of two independent stand-alone companies, but also the increased scale and scope of the combined business with its associated increased costs and complexity. The combined company may not be successful or realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the Mergers.

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The combined company is expected to incur substantial expenses related to the completion of the Mergers and the integration of HNI and Steelcase.

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The combined company is expected to incur substantial expenses in connection with the completion of the Mergers and the integration of HNI and Steelcase, some of which may be incurred even if the Mergers are not completed. The expectation of substantial integration expenses reflects in part the many processes, policies, procedures, operations, technologies and systems that must be integrated, potentially including purchasing, accounting and finance, sales, payroll, pricing, revenue management, marketing and benefits. The substantial majority of the expenses of the Mergers and the integration of HNI and Steelcase will be non-recurring expenses related to the Mergers (including financing of the Mergers) and to facilities and systems consolidation. HNI may incur additional costs to maintain employee morale and to attract, motivate or retain management personnel and other key employees. HNI and Steelcase will also incur transaction fees and costs related to formulating integration plans for the combined business, and the execution of these plans may lead to additional unanticipated costs. In addition, as a result of the Mergers, HNI's financing costs, including costs in connection with the financing of the Mergers, may increase. These incremental merger-related costs may exceed the savings the combined company expects to achieve from the elimination of duplicative costs and the realization of other efficiencies related to the integration of the businesses, particularly in the near term and in the event there are material unanticipated costs.

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The combined company will have significantly more indebtedness than the indebtedness of HNI prior to the Mergers.

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Upon completion of the Mergers, HNI expects to incur approximately $1.25 billion in additional indebtedness and to have consolidated indebtedness of approximately $1.55 billion, which is greater than the current indebtedness of HNI. The increased indebtedness of the combined company in comparison to that of HNI on a historical basis may have the effect of, among other impacts, reducing the flexibility of HNI to respond to changing business and economic conditions and increasing HNI's borrowing costs.

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The financing arrangements that HNI will enter into in connection with the Mergers will contain restrictions and limitations that may, under certain circumstances, significantly impact HNI's ability to operate its business.

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HNI is incurring significant new indebtedness in connection with the Mergers. The agreements governing the indebtedness that HNI will incur in connection with the Mergers, including, but not limited to, the credit agreement entered into to facilitate the financing of the cash portion of the Merger consideration, may, under certain circumstances, impose significant operating and financial restrictions on HNI. After the completion of the Mergers, these restrictions may affect HNI's ability to operate its business and may limit HNI's ability to take advantage of potential business opportunities.

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In addition, the agreements governing such indebtedness will require HNI to comply with a consolidated leverage ratio financial covenant and consolidated interest coverage ratio financial covenant in certain circumstances. To the extent HNI is or becomes subject to these covenants, HNI's ability to comply with such covenants will depend on its financial and operating performance, which in turn will be subject to economic conditions and to financial, market and competitive factors, many of which are beyond HNI's control. HNI's ability to comply with these covenants will also depend upon HNI's ability to successfully implement its overall business strategy and realize the anticipated benefits of the Mergers, including synergies, cost savings, innovation and operational efficiencies.

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Various risks, uncertainties and events beyond HNI's control could affect its ability to comply with the covenants contained in its financing agreements. Failure to comply with any of the covenants in its existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity of the debt under these agreements. Under those circumstances, HNI might not have sufficient funds or other resources to satisfy all of its obligations. In addition, the limitations imposed by financing agreements on HNI's ability to incur additional debt and to take other actions might significantly impair its ability to obtain other financing.

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If HNI incurs additional indebtedness following the Mergers, the risks related to the substantial indebtedness of HNI after the completion of the Mergers may intensify.

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The market price of HNI common stock after the Mergers may be affected by factors different from those affecting the market price of HNI common stock before the Mergers.

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As the businesses of HNI and Steelcase are different, the results of operations of the combined company and the market price of HNI common stock following the Mergers may be affected by factors different from those factors affecting HNI as an independent stand-alone company before the Mergers. Following the Mergers, HNI will face additional risks and uncertainties to which HNI may currently not be exposed as an independent stand-alone company.

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The market price of HNI common stock may decline as a result of the Mergers.

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The market price of HNI common stock may decline as a result of the Mergers, and HNI shareholders could lose the value of their investment in HNI common stock if, among other things, after completion of the Mergers, HNI is unable to achieve the expected growth in earnings, or if the anticipated benefits, including synergies, cost savings, innovation and operational efficiencies, from the Mergers are not realized, or if the transaction costs related to the Mergers are greater than expected, or if the Mergers are not completed within the anticipated time frame. The market price of HNI common stock also may decline if HNI does not achieve the perceived benefits and expected synergies of the transaction as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the Mergers on HNI's financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.

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The issuance of shares of HNI common stock in the Mergers could on its own have the effect of depressing the market price of HNI common stock. In addition, many Steelcase shareholders may decide not to hold the shares of HNI common stock they receive as a result of the Mergers. Other Steelcase shareholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of HNI common stock they receive as a result of the Mergers. Any such sales of HNI common stock could have the effect of depressing the market price of HNI common stock.

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General fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, HNI common stock, regardless of the operating performance of HNI after the completion of the Mergers.

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The Mergers may result in a loss of customers, distributors, suppliers, vendors, landlords and other business partners and may result in the termination of existing contracts.

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Following the Mergers, some of the customers, distributors, dealers, suppliers, vendors, landlords and other business partners of Steelcase may terminate or scale back their current or prospective business relationships with HNI. Some customers may not wish to source a larger percentage of their needs from a single company or may believe that HNI is too closely allied with one of their competitors. In addition, Steelcase has contracts with customers, distributors, dealers, suppliers, vendors, landlords and other business partners that may require it to obtain consents from these other parties in connection with the Mergers, which may not be obtained on favorable terms or at all. If relationships with customers, distributors, dealers, suppliers, vendors, landlords and other business partners are adversely affected by the Mergers, or if HNI, following the Mergers, loses the benefits of the contracts of Steelcase, HNI's business and financial performance could suffer.

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The following is a summary of share repurchase activity during the third quarter of fiscal 2025: