HON INDUSTRIES Announces Results for First Quarter - Fiscal 2002.Business Editors MUSCATINE Muscatine (mŭskətēn`), city (1990 pop. 22,881), seat of Muscatine co., SE Iowa, on the Mississippi River; inc. 1851. An early center of river traffic and lumbering, Muscatine is the shipping and processing center of a rich agricultural , Iowa--(BUSINESS WIRE)--April 16, 2002 HON INDUSTRIES Inc. (NYSE NYSE See: New York Stock Exchange :HNI HNI Heinz Nixdorf Institut (Germany) HNI HealthNet International HNI Hajime No Ippo (anime) HNI High Networth Individual HNI Home Network Identity HNI Havelock North Intermediate School ) today announced sales of $399.1 million for the first quarter ending March 30, 2002, and net income of $15.9 million. Due to the continued softness in the office furniture industry, consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the first quarter decreased 13.6 percent to $399.1 million, compared to $462.0 million for the same quarter last year. Net income was $15.9 million, a decrease of 13.0 percent from $18.3 million over the same period in 2001. Net income per share was $0.27 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $0.31 per share in first quarter 2001. As a percent of sales, gross margins for the first quarter increased to 35.0 percent from 32.5 percent for the same quarter last year. "We are pleased that we continue to see improvement in gross margins in both segments of our business due to new product introductions and our continued cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. and business simplification initiatives," said Jack Michaels Jack Michael is a researcher, professor and author in the field of the experimental analysis of behavior best known for his elucidations of the motivating operation(MO), comprised of Establishing Operation (EO) and Abolishing Operations (AO). , HON INDUSTRIES' Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Actual selling and administrative dollars for the quarter decreased 4.0 percent or $4.7 million. However, selling and administrative expenses for the quarter as a percent of sales increased to 28.6 percent, compared with 25.8 percent in first quarter 2001 due to lower overall sales volume. Included in selling and administrative expenses in 2002 are $3.9 million or $0.04 per share of costs due to the shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of an office furniture facility in Jackson, Tennessee Jackson is a city in Madison County, Tennessee, United States. The population was 59,643 at the 2000 census. It is the principal city of and is included in the Jackson, Tennessee Metropolitan Statistical Area, which is included in the Jackson-Humboldt, Tennessee Combined . The Company expects to realize savings during 2002 equal to the costs incurred in closing the facility. First quarter 2001 included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.5 million or $0.03 per share of goodwill amortization that is not included in 2002 due to a change in accounting standards. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the first three months was a negative $4.4 million due to the annual payment of marketing programs and the funding of the defined contribution retirement plan in first quarter 2002. Capital expenditures decreased to $5.3 million, compared to $12.7 million in 2001. There is approximately $78.6 million of the Board's current repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. authorization The right or permission to use a system resource; the process of granting access. See access control. remaining to purchase common stock. The Company did not repurchase any of its common stock during first quarter 2002. Office Furniture For the quarter, sales for HON INDUSTRIES' office furniture segment were down over 18 percent to $300.2 million from $366.5 while operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. from this segment was down over 25 percent. This decline in sales occurred in the retail, commercial, and performance contract sectors. The Business and Institutional Furniture Manufacturer's Association (BIFMA BIFMA Business and Institutional Furniture Manufacturer's Association ) reported shipments down 30 percent for the first two months of 2002. "While we are disappointed in our current sales levels, we are encouraged that we are outperforming the industry and realizing increased gross margins," stated Mr. Michaels This article is about the U.S. crafts retail chain. For the bidding convention in the card game of Bridge, see Michaels cuebid. For the same-sex couple in Canada, see The Michaels. Michaels is the largest arts and crafts retail chain in the United States. . "We feel that our value proposition is helping us to gain market share." Hearth Products Net sales in the first quarter for the hearth products segment increased almost 4 percent to $98.9 million, compared to $95.5 million in the first quarter of last year. Operating profit as a percent of net sales increased to 6.6 percent of net sales versus 3.4 percent for 2001. First quarter 2001 included approximately $2.0 million of goodwill amortization expense. 2002 Outlook The Company anticipates the second quarter to be challenging due to the continued slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the office furniture industry. DRI-WEFA, BIFMA's forecasting consultant, is projecting the office furniture industry to be down over 15 percent in the second quarter of 2002 compared to the same quarter last year. "We are continuing our focus on long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. shareholder value by streamlining our processes and operations through simplification and rapid continuous improvement (RCI RCI Royal Caribbean International RCI Radio Canada International RCI Rehabilitation Council of India RCI Residential Communities Initiative RCI Roof Consultants Institute RCI Remote Control Interface RCI Residential, Commercial, Industrial ), aggressively building our market-leading brands, developing exciting new products such as Allsteel's recently introduced #19 chair, focusing on end-users, and reducing our cost structure," stated Mr. Michaels. "Our continued success is due to the ongoing commitment of our dedicated member-owners to these core strategies." Conference Call HON INDUSTRIES will host a conference call on Tuesday Tuesday: see week. , April 16, 2002, at 10:00 a.m. to discuss the first quarter fiscal 2002 results. To participate, call the conference call line at 888-273-9890. A replay of the conference call will be available until Tuesday, April 23, 2002. To access this replay, dial 800-475-6701, access code 634528. A line to the simultaneous webcast can be found on the company's website at www.honi Honi may refer to:
HON INDUSTRIES Inc. is the nation's largest producer of middle-market The term middle-market may refer to either a type of newspaper or a type of company. A middle-market newspaper is one that attempts to cater to readers who want some entertainment value from their newspaper as well as adequate serious coverage of significant news office furniture and the third largest office furniture manufacturer in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . HON INDUSTRIES is also the nation's leading manufacturer and marketer of gas- and wood-burning Adj. 1. wood-burning - fueled by wood; "a wood-burning stove' wood-fired fueled - heated, driven, or produced by burning fuel fireplaces. HON INDUSTRIES is well positioned, with strong brand names, in fast growing segments of the core businesses in which it competes. The company provides its customers a broad selection of quality office products, with quick delivery, at attractive prices. HON INDUSTRIES has a strong commitment to customer satisfaction and to enhancing shareholder value. HON INDUSTRIES was named one of the 400 Best Big Companies in America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. by Forbes' Magazine in 2002, and one of the World's Top 100 Best-Managed Companies by IndustryWeek IndustryWeek (IW) IndustryWeek is a trade publication and web site owned by Penton Media. It is a business-to-business (B2B) magazine brand that produces print, e-media, research and in-person products. for 2001. HON INDUSTRIES' common stock is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol HNI. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements in this news release that are not strictly historical, including statements as to plans, objectives, and future financial performance, are "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements involve known and unknown risks, which may cause the Company's actual results in the future to differ materially from expected results, particularly those with respect to expected earnings for the remainder of the fiscal year. These risks include, among others: the Company's ability (a) to realize financial benefits from its cost containment and business simplification initiatives, (b) to realize the savings from the closing of the Jackson, Tennessee, facility, (c) to achieve expected financial benefit from its contract sector strategy, (d) to introduce and obtain sales at improved gross margins from new products; and (e) other factors described in the Company's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q.
HON INDUSTRIES
Unaudited Condensed Consolidated Statement of Operations
(Dollars in thousands, except per share Three Months Ended
data) Mar. 30, 2002 Mar. 31, 2001
----------------------------------------------------------------------
Net sales $399,139 $461,997
Cost of products sold 259,398 311,711
----------------------------------------------------------------------
Gross profit 139,741 150,286
Selling and administrative expenses 114,325 119,050
----------------------------------------------------------------------
Operating income 25,416 31,236
Interest income 635 222
Interest expense 1,215 2,922
----------------------------------------------------------------------
Income before income taxes 24,836 28,536
Income taxes 8,941 10,273
----------------------------------------------------------------------
Net income $15,895 $18,263
----------------------------------------------------------------------
Net income per common share $0.27 $0.31
----------------------------------------------------------------------
Average number of common shares
outstanding 58,776,955 59,448,220
----------------------------------------------------------------------
Unaudited Condensed Consolidated Balance Sheet
Assets
As of
Mar. 30, Dec. 29,
(Dollars in thousands) 2002 2001
---------------------------------------------------------------
Cash and cash equivalents $69,589 $78,838
Receivables 159,582 161,390
Inventories 53,293 50,140
Deferred income taxes 15,376 14,940
Prepaid expenses and
other current assets 12,144 14,349
---------------------------------------------------------------
Current assets $309,984 $319,657
Property and equipment - net 390,034 404,971
Goodwill 214,518 214,337
Other assets 20,773 22,926
---------------------------------------------------------------
Total assets $935,309 $961,891
---------------------------------------------------------------
Liabilities and Shareholders' Equity
As of
Mar. 30, Dec. 29,
2002 2001
---------------------------------------------------------------
Current liabilities $241,427 $230,443
Long-term debt 26,107 79,570
Capital lease obligations 820 1,260
Other long-term liabilities 19,310 18,306
Deferred income taxes 40,351 39,632
---------------------------------------------------------------
Total liabilities 328,015 369,211
Capital stock 58,910 58,673
Paid-in capital 7,111 891
Retained earnings 541,090 532,555
Accumulated other
comprehensive income 183 561
---------------------------------------------------------------
Total shareholders' equity 607,294 592,680
---------------------------------------------------------------
Total liabilities and
shareholders' equity $935,309 $961,891
---------------------------------------------------------------
Unaudited Condensed Consolidated Statement of Cash Flows
Three Months Ended
(Dollars in thousands) Mar. 30, 2002 Mar. 31, 2001
----------------------------------------------------------------------
Net cash flows from (to) operating
activities ($4,376) $19,663
----------------------------------------------------------------------
Net cash flows from (to) investing
activities:
Capital expenditures (5,266) (12,720)
Other 2,199 (6,744)
----------------------------------------------------------------------
Net cash flows from (to) financing
activities (1,806) 15,195
----------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents (9,249) 15,394
Cash and cash equivalents at beginning of
period 78,838 3,181
----------------------------------------------------------------------
Cash and cash equivalents at end of
period $69,589 $18,575
----------------------------------------------------------------------
Unaudited Business Segment Data
Three Months Ended
(Dollars in thousands) Mar. 30, 2002 Mar. 31, 2001
--------------------------------------------------------------------
Net sales:
Office furniture $300,221 $366,509
Hearth products 98,918 95,488
--------------------------------------------------------------------
$399,139 $461,997
--------------------------------------------------------------------
Operating Profit:
Office furniture $24,248 $32,524
Hearth products 6,505 3,238
--------------------------------------------------------------------
Total operating profit 30,753 35,762
Unallocated corporate expense (5,917) (7,226)
--------------------------------------------------------------------
Income before income taxes $24,836 $28,536
--------------------------------------------------------------------
Identifiable Assets:
Office furniture $512,194 $590,319
Hearth products 308,734 340,380
General corporate 114,381 66,203
--------------------------------------------------------------------
$935,309 $996,902
--------------------------------------------------------------------
Depreciation & Amortization Expense:
Office furniture $12,291 $14,877
Hearth products 3,309 5,126
General corporate 1,548 580
--------------------------------------------------------------------
$17,148 $20,583
--------------------------------------------------------------------
Capital Expenditure - Net
Office furniture $4,152 $9,716
Hearth products 920 2,922
General corporate 194 82
--------------------------------------------------------------------
$5,266 $12,720
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