Vermont Castings owner reports increase in profits despite plant closing charges

first_img– 6/28/2014 51,077 7/4/2015 $509,143 Change 118.1% 3.3% $568.2 – 80,204 Gross Profit % 359,992 5.8% Three Months Ended $14,928 29.4% $0.19 $40.2 20 bps $0.39 1/3/2015 8,481 $568,226 $29.3 Operating Income    Other $11.7 -110 bps $27,795 Average number of common shares outstanding – basic $21,971 216 181,133 $10,263 HNI CORPORATIONUnaudited Condensed Consolidated Statement of Operations 4.2% $40.0 230 bps $33,438 311,008 3,150 Restructuring charges % Net sales: 414,587 36.5% (0.1%) Net increase (decrease) in cash and cash equivalents       Current liabilities   Income before income taxes Interest income – $0.5 9.9% PercentChange 2,187 36.3% $0.53 Hearth Reconciliation(Dollars in millions) 9.9% (40) $961,344 167,278 146 Operating Profit Selling and administrative expenses $207.5 $(6,992) 197,736 $18.2 $1,239,334 713,236 $39.8 $14,868 7/4/2015 Operating Profit % $32.0 11,162 Net cash flows from (to) operating activities 119 EPS – diluted 1.9% – 6/28/2014 Six Months Ended Three Months Ended (Gain) Loss on Sale of Assets (Dollars in thousands) $568,226 Net sales $(31,904) Transition Costs 6/28/2014 $0.21 $31,126 $0.52 $206.1 $(0.01) $(1.3) $9,705 $11.2 $8.5 (120) Operating Profit % –   Office furniture $18.2 19,086 360 bps 16,915 Non-GAAP Financial MeasuresThis earnings release contains certain non-GAAP financial measures.  A “non-GAAP financial measure” is a numerical measure of a company’s financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the company.  We have provided a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.The non-GAAP financial measures used within this earnings release are:  gross profit, operating income, operating profit, net income per diluted share (i.e., EPS), excluding restructuring charges, transition costs impairments and gain/loss on sale.  Non-GAAP EPS is calculated using the Corporation’s overall effective tax rate for the period.  We present these measures because management uses this information to monitor and evaluate financial results and trends.  Management believes this information is also useful for investors.  This earnings release also contains a forward-looking estimate of non-GAAP earnings per diluted share for the third quarter and full fiscal year 2015.  We provide such non-GAAP measures to investors on a prospective basis for the same reasons we provide them to investors on a historical basis.  We are unable to provide a reconciliation of our forward-looking estimate of non-GAAP earnings per diluted share to a forward-looking estimate of GAAP earnings per diluted share because certain information needed to make a reasonable forward-looking estimate of GAAP earnings per diluted share for the third quarter and full fiscal year is difficult to predict and estimate and is often dependent on future events which may be uncertain or outside of our control.  These may include unanticipated charges related to asset impairments (fixed assets, intangibles or goodwill), unanticipated acquisition related costs and other unanticipated non-recurring items not reflective of ongoing operations.  6.4% $29,278 $13,935 Non-GAAP Change Operating profit (non-GAAP)   Hearth products $724,293    accrued expenses – 89,411 274,606   % of net sales 335,982 $11.7 9.9% Operating income Six Months Ended $961,344 4,005 Other assets 5.8% Cash and cash equivalents (49,882) $85.7 455,559 54,825 Cost of products sold 390,624 4.3% Six Months Ended 155,288 65,030 Cash and cash equivalents at end of period Operating Profit Transition costs 50,953 $509.1 6/28/2014 Office Furniture – Financial Performance(Dollars in millions) 45,573,952 $0.52   % of Net Sales 193,457 31,126 39,406 16,909 6/28/2014 1,298 13,680 179,552 (86) Note payable and current 6.9% 7/4/2015 30 bps 9.9% 3,957 Three Months Ended 7/4/2015 Income before income taxes GAAP HNI Corporation Reconciliation(Dollars in millions, except per share data) 4,397 118.1% Operating profit: (32,529) 6/28/2014 Operating profit (non-GAAP) $0.52 Net income Three Months Ended 8.8% Operating Income $26,952 Operating Income 8.9% Second Quarter Summary CommentsConsolidated net sales increased $59.1 million or 11.6 percent to $568.2 million. Compared to prior year quarter, the Vermont Castings Group acquisition increased sales $25.0 million. On an organic basis, sales increased 6.7 percent.Non-GAAP gross margin increased 20 basis points compared to prior year driven by higher volume, better price realization and strong operational performance, partially offset by unfavorable product mix.Selling and administrative expenses, as a percentage of sales, decreased 110 basis points due to the benefit of higher sales volume partially offset by strategic investments, higher incentive-based compensation and acquisition impact.Restructuring charges for the quarter were favorable $0.6M due to lower than anticipated postemployment costs. The Corporation recorded $1.3 million of transition expenses included in cost of sales in connection with previously announced closures, acquisition integration and structural realignment. Second quarter 2014 included $4.8 million of restructuring and transition costs of which $3.4 million were included in cost of sales. The prior year quarter also included a goodwill impairment of $8.9 million and a $1.3 million gain on the sale of assets. 336,305 Parent Company shareholders’ equity 10,894 $28,429 (Gain) loss on sale of assets 2,334 $20,801 320,722 $1,091,703 Liabilities and Shareholders’ Equity Operating Income % Unaudited Condensed Consolidated Statement of Cash Flows Receivables Non-GAAP 11.6% $0.01 $1,324,963 $0.8 450 bps Change 36.3% 80,353 Average number of common shares outstanding – diluted 37.9% $0.21 45,843,118 (560) 130 bps Short-term investments $0.22 Three Months Ended As of $12.9   % of Net Sales 25.2% $0.02 Other long-term liabilities EPS – diluted (Gain) Loss on Sale of Assets $23,879 8.9% Identifiable assets: $12.9 $0.73 Long-term debt Restructuring & Impairment charges –   % of Net Sales 6/28/2014 Income taxes (183) Assets 164,684   Hearth products 26,723 $11,848 $1,324,963 $20,640 4,802   General corporate Current maturities of other long-term obligations (Gain) loss on sale of assets % 3,419   Hearth products $1.3 39,209       Current assets 10,445 $788,899 $0.71 6/28/2014 2,047 (9,746) Net income attributable to HNI Corporation common shareholders – basic $509,143 9 $11.2 7,818 Goodwill 279,374 45,029,148center_img 4.3% $117.6 1,158 $49,882 Deferred income taxes GAAP 1,625 (Dollars in thousands) 35.9% 2.0% -40 bps   General corporate Operating Profit % Net Income % Operating Income % 35.6% Noncontrolling interest Less:  Net (loss) attributable to the noncontrolling interest 5,252 523,047 10,254 (Dollars in millions) Three Months Ended 6/28/2014 32,329 23,877 $0.46 – Deferred income taxes Prepaid expenses and other current assets 0 bps 30.5%   Hearth products Net Sales    maturities of long-term debt1 37.2% 9.5% (51,122) 2,698 Non-GAAP 17,560 Restructuring & Impairment charges 625,039 7/4/2015 $18,242 $181.1   General corporate $16,348 – (0.3%) 240,053 $33,438 4,225 6.9% Operating profit as reported (GAAP) Second quarter sales increased $31.9 million or 37.2 percent to $117.6 million. Compared to prior year quarter, the Vermont Castings Group acquisition increased sales by $25.0 million. On an organic basis, sales increased 8.0 percent for the quarter driven by an increase in both the new construction channel and the retail gas portion of the remodel/retrofit channel.For the quarter, non-GAAP operating profit increased $3.2 million or 37.9 percent due to increased volume and higher price realization.Outlook “We delivered very strong results during the first six months of 2015.  I remain confident in our ability to grow sales and significantly increase profits for the remainder of the year.  Our office furniture and hearth businesses are performing well and we continue to make investments to drive long-term profitable growth and shareholder value,” said Mr. Askren.The Corporation estimates sales to be up 5 to 9 percent in the third quarter over the same period in the prior year, including sales from the Vermont Castings Group acquisition.  Non-GAAP earnings per share are anticipated to be in the range of $0.84 to $0.89 for the third quarter and $2.55 to $2.65 for the full year, which includes the Vermont Castings Group acquisition results and excludes restructuring and transition costs. Three Months Ended Cash and cash equivalents at beginning of period 70 bps 7/4/2015 44,359,898 PercentChange 36.5% $450,624 Three Months Ended $858,053 $781,792 7.1% 25.2% 701,079 7/4/2015 $29.3 SG&A % 9,665 34,144 Operating Profit (13,396) $8.5 $(0.6) $0.53 $59,943       Total liabilities and shareholders’ equity 45,867,927 (28) 1All debt classified as short term due to timing of maturity 121,791 173,726 – 35.6% – $1,324,963 362,102   Unallocated corporate expense   Office furniture 37.2% 5,203 Capital expenditures (including capitalized software): – As of1/3/2015    Capital expenditures 14,868 Property and equipment – net Inventories 434,787 Operating Profit % Vermont Business Magazine The parent company of Vermont Castings, HNI Corporation (NYSE: HNI), based in Iowa, announced on Wednesday sales for the second quarter ended July 4, 2015, of $568.2 million and net income of $23.9 million, or $0.52 per diluted share. Profits suffered less than expected due to charges resulting from plant closures. Non-GAAP net income per diluted share improved 35.9 percent from the prior year quarter to $0.53, which excludes restructuring, impairment, transition costs and gain on sale of assets. HNI reported last year that it would close and consolidate plants in Alabama and Illinois. Following its acquistition of Vermont Castings last fall, it announced in March 2015 that it would close the Bethel, Vermont, plant, with the loss of about 40 workers. It also has a hearth manufacturing plant in Randolph.RELATED: HNI Corporation acquires Vermont CastingsSecond Quarter Summary Comments “We are pleased with our results for the second quarter.  We delivered strong sales growth and significant earnings improvement.  Office furniture business performance was led by sales growth in the contract business and solid operational execution.  Momentum continued in our hearth business with strong sales growth in both the new construction channel and the retail gas portion of the remodel/retrofit channel,” said Stan Askren, HNI Corporation Chairman, President and Chief Executive Officer. (Dollars in thousands, except per share data) 23,663 Second Quarter – Financial Performance(Dollars in millions, except per share data) Accounts payable and 1,968 7/4/2015 $32,357 17,310 Gross Profit $1,239,334 10,282 $404,685 36.3% $16.9 Interest expense 37.9% (23,798) Transition Costs 83,606 9.9% Business Segment Data $29,836 Three Months Ended $1,091,703   Hearth products Operating Profit 1/3/2015 Net income attributable to HNI Corporation $39.8 (Dollars in thousands) 36.3% 54,924 $21,659 7.1% $0.39 $51,122 (2) $37,557 457,333 130 bps 206,124 44,416,008 Conference Call A webcast of the conference call will be available on HNI Corporation’s website at http://www.hnicorp.com(link is external)(under Investor Information – Webcasts).  A replay of the webcast will be made available at the website address above.  An audio replay of the call will be available until Thursday, July 30, 2015, 10:59 p.m. (Central) by dialing 1-855-859-2056 or 1-404-537-3406 – Conference ID number 76049525. About HNI CorporationHNI Corporation is a NYSE traded company (ticker symbol:  HNI) providing products and solutions for the home and workplace environments.  HNI Corporation is a leading global office furniture manufacturer and is the nation’s leading manufacturer of hearth products.  The Corporation’s strong brands have leading positions in their markets.  More information can be found on the Corporation’s website at www.hnicorp.com(link is external).MUSCATINE, Iowa, July 22, 2015 /PRNewswire/ — HNI Total assets $423.4 Net income attributable to HNI Corporation common shareholders – diluted Net cash flows from (to) financing activities 20,189 $26,399 EPS Gross Profit % $51,077 Net Sales   Total operating profit 6/28/2014 7/4/2015 EPS Gross Profit Depreciation and amortization expense: 31.6% $2.6 (11,855) $39.4   % of Net Sales 4,389 $16.9 348 $40.0 (1,346) 7/4/2015 Unaudited Condensed Consolidated Balance Sheet Operating Income 2,647 Net cash flows from (to) investing activities:   % of net sales Operating profit as reported (GAAP) Results (non-GAAP) As of Restructuring charges Gross profit 28,152 $1.3 1,187 84,054 $0.8 -210 bps – 201,820 35,299 $1,239,334 $32.0 $39,791 304,326 $34,735 31.6% $40.2 7/4/2015 $184.6 341,315 $0.8 45,019,783 233,650 435,135 As of7/4/2015 3,052 Office Furniture Reconciliation(Dollars in millions) Shareholders’ equity 45,620,984 92,529 $39.4 279,310 $12,472 6/28/2014 $423,423 $(0.02) 8.8% 3.3% 176,072 (Gain) loss on sale of assets   Office furniture   Office furniture $0.8 37,557 $(0.6) – 209 18,748 7.6% 1,993 9.9% 876 18,587 7.6% 20,681 414,501 147.6% 7/4/2015 7/4/2015 328,010 300,498 $8.5 (706) $450.6 9.5% 160   Office furniture 133.0% GAAP Second quarter sales increased $27.2 million or 6.4 percent to $450.6 million. Sales for the quarter increased in both our supplies-driven and contract channels.Second quarter non-GAAP operating profit increased $8.1 million or 25.2 percent. Increased volume, higher price realization and solid operational performance were partially offset by unfavorable product mix, strategic investments and incentive-based compensation.Hearth Products – Financial Performance Net Sales – Restructuring charges $453,754 $34,144 117,602 $0.21 $8.5 85,720 As Reported (GAAP) (35,752) $0.54 $0.45last_img read more

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