HNI Corporation (NYSE:HNI) Files An 8-K Costs Associated with Exit or Disposal Activities

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HNI Corporation (NYSE:HNI) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05

Costs Associated with Exit or Disposal Activities.

On December 6, 2017, HNI Corporation (the "Corporation") made the decision to discontinue the Paoli office furniture brand. The manufacturing of Paoli branded products will cease in the first quarter of 2018. The Corporation is making this decision as part of continued efforts to drive efficiency and simplification, delivering increased value to its shareholders. The Corporation will continue to effectively and efficiently serve Paoli’s market through product offerings within the broader family of HNI brands.

The Corporation estimates the discontinuation will generate a cash payback in less than one year and save $7.0 million annually beginning in the first quarter of 2018. Estimated cash restructuring and other cash costs associated with these actions total approximately $4.0 million, with $0.7 million related to workforce reductions and approximately $3.3 million related to costs associated with production ramp-down and brand discontinuation.

When considering both cash and non-cash costs, the Corporation anticipates charges related to the discontinuation will impact pre-tax earnings an estimated $25.4 million. The following table lists the estimated composition and timing of these charges:

(Dollars in Millions)

Time Period

Restructuring Costs (Cash)

Accelerated Depreciation (Non-Cash)

Other Costs (Non-Cash)

Other Costs (Cash)

Total

Q4 2017

$0.7

$0.2

$20.4

$0.7

$22.0

Q1 2018

0.8

1.0

1.8

Q2 2018

0.8

0.8

Q3 2018

0.5

0.5

Q4 2018

0.1

0.1

Thereafter

0.2

0.2

Grand Total

$0.7

$1.0

$20.4

$3.3

$25.4

Included in the estimated total cost of $25.4 million are the expected impairments of goodwill and other intangibles of approximately $16 million associated with this brand closure.

This Current Report on Form 8-K contains “forward-looking statements” regarding expectations about the Corporation’s consolidation and realignment actions, including expected charges, estimated cash and non-cash savings, expected profit improvement, costs, and timing. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “intend,” “believe,” “should,” “project,” or “plan,” or variations thereof or other similar terminology. These forward-looking statements involve risks and uncertainties, and actual results could differ materially from those predicted by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include current economic and other conditions in the global marketplace, changes in the market in which the Corporation operates, actions by retailers and consumers, competition, ability to successfully and timely implement closing, consolidation and logistical realignment initiatives, assumptions related to savings, profit improvements, charges and costs, and other factors described in the Corporation's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q. Such forward-looking statements speak only as of the date of this Current Report. The Corporation undertakes no obligation to update, amend, or clarifyforward-lookingstatements.

Item 2.06

Material Impairments.

The information set forth in Item 2.05 is incorporated herein by reference into this Item 2.06.


About HNI Corporation (NYSE:HNI)

HNI Corporation is a provider of office furniture and hearth products. The Company manufactures and markets gas and wood burning fireplaces. It operates through two segments: office furniture and hearth products. Its office furniture segment manufactures and markets a range of metal and wood commercial and home office furniture, which includes storage products, desks, credenzas, chairs, tables, bookcases, freestanding office partitions, and panel systems and other related products. Its hearth products segment manufactures and markets a range of gas, electric, wood and biomass burning fireplaces, inserts, stoves, facings and accessories, principally for the home. Its office furniture products are sold through dealers, wholesalers and office product distributors, and are also sold directly to end user customers, and federal, state and local governments. Its hearth products are sold through dealers and distributors, as well as through the Company-owned distribution and retail outlets.

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