USA - HNI Corporation, a leading global provider and designer of office furniture and the leading manufacturer and marketer of hearth products, announced sales for the full year ended December 29, 2018 of USD 2,257.9 million.
On an organic basis, sales increased 6.6 percent. The net impact of closing and divesting small office furniture companies decreased sales USD 57.6 million compared to the prior year.
Net income in FY 2018 reached USD 93 million. Gross profit margin increased 100 basis points compared to the prior year. Input cost inflation partially offset by improved price realization, productivity and cost savings drove a decline of 20 basis points. This decline was more than offset by a 120 basis point increase due to lower restructuring and transition costs.
“Our teams performed well in the fourth quarter – delivering significant earnings growth and margin expansion. We are managing through multiple challenges, including continued inflationary pressures, tariff impacts, and choppy demand. Our organization is responding well, and I am optimistic about what we can accomplish in the future,” said Jeff Lorenger, HNI Corporation, President and Chief Executive Officer.
Full year office furniture net sales increased USD 45.4 million or 2.7 percent from the prior year to USD 1,706.1 million. On an organic basis, sales increased 6.4 percent driven by increases in the supplies and contract businesses. The net impact of closing and divesting small office furniture companies decreased sales USD 57.6 million compared to the prior year.
Full year office furniture operating profit margin increased 160 basis points. Input cost inflation, amortization and implementation costs from the Business Systems Transformation initiative, and strategic investments were partially offset by improved price realization, productivity and cost savings, and the impact of closing and divesting small office furniture companies, driving a decline of 40 basis points. This decline was more than offset by a 200 basis point increase due to lower nonrecurring items, which include restructuring and impairment charges, and transition costs.
“Looking to 2019, we see a dynamic environment with pockets of uncertainty. Late in the fourth quarter and early this year, market activity generally slowed. We expect demand will start slowly and improve throughout 2019. We continue to see pressure from inflation and tariff impacts. Despite these pressures, we expect to grow profits through productivity and cost saving efforts while continuing to invest in new capabilities. I remain excited about our members, opportunities, and market position,” said Mr. Lorenger.
The Corporation estimates full year 2019 organic sales to be up 3 to 7 percent. Including the impacts of closing and divesting small office furniture companies, full year sales are expected to be up 2 to 6 percent.
