HNI Corporation is headquartered in Muscatine, Iowa, operates through two segments * Workplace Furnishings and Residential Building Products. The Workplace Furnishings segment offers a range of commercial and home office furniture, while the Residential Building Products segment provides various fireplaces, inserts, stoves, and accessories.
In 2023, HNI reported consolidated net sales of $2.434 billion, marking a 3.1% increase from the previous year. The Workplace Furnishings segment saw a substantial 17.1% year-over-year sales growth, driven by the acquisition of Kimball International, which contributed $361.4 million to the increase. However, the Residential Building Products segment experienced a 20.8% decrease in sales. HNI's net income for 2023 was $49.2 million, a decline from $123.9 million in 2022, primarily due to acquisition costs associated with the Kimball International transaction and impairment charges at small workplace furnishings business units.
The gross profit as a percentage of net sales increased by 360 basis points in 2023 compared to 2022, driven by favorable price-cost, improved net productivity, and the impact of the Kimball International acquisition. However, selling and administrative expenses as a percentage of net sales increased by 280 basis points in 2023 compared to 2022, primarily due to acquisition-related fees and expenses, lower volume in legacy HNI businesses, and higher variable compensation.
In the Workplace Furnishings segment, net sales increased by 17.1% in 2023, driven by the acquisition of Kimball International, while operating profit as a percentage of net sales increased by 370 basis points. In the Residential Building Products segment, net sales decreased by 20.8% in 2023, primarily due to lower volume in both the new construction and existing home channels, and operating profit as a percentage of net sales decreased by 130 basis points.
HNI Corporation's cash, cash equivalents, and short-term investments totaled $34.5 million at the end of 2023, compared to $19.5 million at the end of 2022. The company believes that these funds, along with cash flow from future operations and the ability to access capital markets, will be adequate to fund operations and satisfy cash flow needs for at least the next twelve months.
Following these announcements, the company's shares moved 0.7%, and are now trading at a price of $43.41. Check out the company's full 10-K submission here.
