HNI Corp. returns to profit in 1st quarter

HNI Corp. returns to profit in 1st quarter on strength of hearth and hearth supplies revenue

Associated Press

MUSCATINE, Iowa (AP) -- HNI Corp., which makes home and workplace products such as office furniture and fireplaces, said Wednesday it returned to a profit in the first quarter as sales it its hearth and supplies-driven business offset weakness in other office furniture. The company's restructuring costs also wound down.

Office furniture companies were hit hard during the recession and during the prolonged housing slump as small businesses and consumers cut back on big ticket items. HNI has offset this by closing some factories and making acquisitions, including India-based BP Ergo Ltd. in August.

Net income for the three months ended March 30 totaled $1.41 million, or 3 cents per share. That compares with a loss of $141,000, or break even per share, in the prior-year quarter. Analysts expected a loss of 2 cents per share, according to FactSet.

Revenue edged down less than 1 percent to $442.3 million from $445.2 million last year. Analysts expected $438.3 million.

Office furniture sales fell due to lower federal government spending and project delays related to the economic uncertainty in the first quarter.

The company took $200,000 in restructuring charges related to shutting down and consolidating its manufacturing locations, compared with $1.2 million in the prior year quarter.

Looking forward, CEO Stan Askren said he is "encouraged" by gradual improvement in the company's markets and said HNI is entering the second quarter with "good momentum."

For the second quarter it expects income of 22 cents to 27 cents per share, excluding one-time costs, on revenue growth of 5 percent to 8 percent, implying revenue of $504.4 million to $518.8 million. Analysts expect income of 22 cents per share on revenue of $491.2 million.

For the year, HNI now expects adjusted income of $1.30 to $1.45 per share, compared with a prior range of $1.25 to $1.45 per share issued in February. Analysts expect income of $1.35 per share.

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