Restructuring charges reduce HNI profit
Office furniture maker closing two plants
Restructuring charges related to closing two plants and consolidating manufacturing reduced HNI Corp.’s second-quarter net profit.
The Muscatine-based office furniture manufacturer posted net income of $9.7 million, or 21 cents per share for the quarter that ended June 28, down from 16 percent from $11.4 million, or 25 cents per share, in the same quarter last year. Net sales fell 0.3 percent to $509.1 million from $510.7 million in the second quarter of 2013.
During the second quarter, HNI announced plans to close an office furniture plant in Florence, Ala., and consolidate production into existing manufacturing facilities. The company also notified the union representing the bargaining unit at its office furniture facility in Chicago of its tentative decision to close the plant and consolidate production into an existing facility.
HNI recorded $4.8 million of restructuring and transition costs, of which $3.4 million were included in the cost of sales. The company estimated that the plant closings will save $8.1 million annually beginning in 2015.
HNI recognized pretax goodwill impairment expense of $8.9 million during the second quarter. It also recognized a $1.3 million gain on the sale of California air emission credits.
Excluding the restructuring, transition and goodwill impairment expenses, HNI’s had net income per share of 39 cents per share, a 39 percent improvement from the second quarter of 2013.
HNI Chairman and CEO Stan Askren said the company was pleased with its second-quarter financial results.
“Our office furniture businesses generated strong profit growth despite a sales decrease,” Askren said. “Our hearth business delivered significant sales and profit growth in both new construction and remodel and retrofit channels.”