HON INDUSTRIES Announces Results for First Quarter - Fiscal 2003.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 22, 2003 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 ) announced today sales of $392.0 million and net income of $15.9 million for the first quarter ending March 29, 2003. Consolidated 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 1.8 percent to $392.0 million, compared to $399.1 million for the same quarter last year. Net income was $15.9 million and 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, which was the same as first quarter 2002. The economy and markets continue to experience softness due to economic and political uncertainty. As a percent of sales, gross margins for the first quarter increased to 35.5 percent from 35.0 percent for the same quarter last year. "The benefits from restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). initiatives implemented over the past few years plus our rapid continuous improvement programs and the hard work of our dedicated member-owners are enabling us to continue to improve our gross margins," 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 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. . Selling and administrative expenses for the quarter as a percent of sales increased to 29.2 percent, compared with 28.6 percent in first quarter 2002. The increase is due to lower overall sales volume and charges totaling $4.0 million that consisted of increased freight surcharges, a reserve for a preferential pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. payment claim and an additional impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge related to a facility that was closed in 2001. Included in 2002 selling and administrative expenses were $3.9 million 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 . 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 $7.9 million compared to $1.6 million last year. As is typical, a large outflow of cash was required in the first quarter for the annual payment of marketing programs and the funding of the defined contribution retirement plan. Capital expenditures increased from $5.3 million in 2002 to $14.5 million in 2003 which included funding for the purchase of a leased plant, information system improvements, new products, and productivity improvements. The Company's cash position remains strong and totaled $114.0 million, including short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, as of March 29, 2003. The Company repurchased 406,000 shares of its common stock at a price of approximately $10.8 million during the first quarter. There is $52.0 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. Office Furniture For the quarter, sales for the HON INDUSTRIES' office furniture segment were down 1.8 percent to $294.9 million from $300.2 million in 2002. 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. as a percent of net sales increased to 8.5 percent compared to 8.1 percent for 2002. The Business and Institutional Furniture Manufacturer's Association (BIFMA BIFMA Business and Institutional Furniture Manufacturer's Association ) reported shipments down 8 percent for the first two months of 2003. "We are encouraged that we are continuing to gain market share and improve 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. . Hearth Products Net sales in the first quarter for the hearth products segment decreased 1.8 percent to $97.1 million, compared to $98.9 million in the first quarter of last year. Operating profit as a percent of net sales decreased to 6.0 percent of net sales versus 6.6 percent for 2002 primarily due to continued investment in 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. growth opportunities. 2003 Outlook "We expect to continue to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. the industries in which we compete; however, we feel that the global economic and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. uncertainty will continue to challenge growth and profitability during the second quarter," stated Mr. Michaels. "We are continuing to implement our plan to increase long-term shareholder value by streamlining our processes and operations, understanding and responding to end-users, building brand power, and reducing our cost structure." Conference Call HON INDUSTRIES will host a conference call on Tuesday Tuesday: see week. , April 22, 2003, at 10:00 a.m. to discuss the first quarter fiscal 2003 results. To participate, call the conference call line at 888- 273-9890. A replay of the conference call will be available until Tuesday, April 29, 2003. To access this replay, dial 800-475-6701, access code 680242. A line to the simultaneous webcast can be found on the company's website at www.honi Honi may refer to:
HON INDUSTRIES Inc. provides products and solutions for the home and workplace environments and is 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 fireplaces. The Company's strong brands, including HON, Allsteel, Gunlocke, Heatilator and Heat-N-Glo, have leading positions in their markets. HON INDUSTRIES is committed to maintaining its long-standing corporate values of integrity, financial soundness and a culture of service and responsiveness. By doing so, the Company was recognized for the third consecutive year as one of the 400 Best Big Companies in America by Forbes magazine in 2003, and as America's Most Admired ad·mire v. ad·mired, ad·mir·ing, ad·mires v.tr. 1. To regard with pleasure, wonder, and approval. 2. To have a high opinion of; esteem or respect. 3. Company in the furniture industry by Fortune magazine in 2003. 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. More information can be found on the Company's website at www.honi.com. 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" 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 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, (b) to realize financial benefits from investments in new products, and (c) to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. the effects of
uncertain steel prices and supplies; lower than expected demand for the
Company's products due to uncertain political and economic
conditions; competitive pricing pressure from foreign and domestic
competitors; and 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
Three Months Ended
Mar. 29, Mar. 30,
(Dollars in thousands, except per share data) 2003 2002
----------------------------------------------------------------------
Net sales $391,971 $399,139
Cost of products sold 252,841 259,398
----------------------------------------------------------------------
Gross profit 139,130 139,741
Selling and administrative expenses 114,426 114,325
----------------------------------------------------------------------
Operating income 24,704 25,416
Interest income 821 635
Interest expense 1,086 1,215
----------------------------------------------------------------------
Income before income taxes 24,439 24,836
Income taxes 8,554 8,941
----------------------------------------------------------------------
Net income $15,885 $15,895
----------------------------------------------------------------------
Net income per common share $0.27 $0.27
----------------------------------------------------------------------
Average number of common shares outstanding 58,317,275 58,776,955
----------------------------------------------------------------------
Unaudited Condensed Consolidated Balance Sheet
Assets Liabilities and Shareholders' Equity
As of As of
(Dollars in Mar. 29, Dec. 28, Mar. 29, Dec. 28,
thousands) 2003 2002 2003 2002
----------------------------------------------------------------------
Cash and
cash Current
equivalents $99,542 $136,165 liabilities $219,039 $298,680
Short-term
investments 14,473 16,378
Receivables 148,449 181,096 Long-term debt 2,894 8,553
Capital lease
Inventories 46,306 46,823 obligations 1,259 1,284
Deferred
income Other long-term
taxes 11,129 10,101 liabilities 29,835 28,028
Prepaid Deferred income
expenses taxes
and
other
current
assets 8,514 11,491 39,345 37,114
----------------------------------------------------------------------
Current Total
assets $328,413 $405,054 liabilities $292,372 $373,659
Capital stock 58,162 58,374
Paid-in capital 526 549
Property and
equipment -
net 352,404 353,270 Retained
earnings 590,820 587,731
Goodwill 192,395 192,395 Accumulated other
comprehensive
Other assets 68,390 69,833 income 262 239
----------------------------------------------------------------------
Total
shareholders'
equity 649,770 646,893
------------------------------------
Total
liabilities and
Total shareholders'
assets $942,142 $1,020,552 equity $942,142 $1,020,552
----------------------------------------------------------------------
HON INDUSTRIES
Unaudited Condensed Consolidated Statement of Cash Flows
Three Months Ended
Mar. 29, Mar. 30,
(Dollars in thousands) 2003 2002
----------------------------------------------------------------------
Net cash flows from (to) operating activities $7,910 $1,581
Net cash flows from (to) investing activities:
Capital expenditures (14,463) (5,266)
Other (5,393) 2,199
Net cash flows from (to) financing activities (27,677) (7,763)
----------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (39,623) (9,249)
Cash and cash equivalents at beginning of period 139,165 78,838
----------------------------------------------------------------------
Cash and cash equivalents at end of period $99,542 $69,589
----------------------------------------------------------------------
Unaudited Business Segment Data
Three Months Ended
Mar. 29, Mar. 30,
(Dollars in thousands) 2003 2002
----------------------------------------------------------------------
Net sales:
Office furniture $294,867 $300,221
Hearth products 97,104 98,918
----------------------------------------------------------------------
$391,971 $399,139
----------------------------------------------------------------------
Operating Profit:
Office furniture $25,193 $24,248
Hearth products 5,814 6,505
----------------------------------------------------------------------
Total operating profit 31,007 30,753
Unallocated corporate expense (6,568) (5,917)
----------------------------------------------------------------------
Income before income taxes $24,439 $24,836
----------------------------------------------------------------------
Depreciation & Amortization Expense:
Office furniture $11,493 $12,291
Hearth products 3,646 3,309
General corporate 1,143 1,548
----------------------------------------------------------------------
$16,282 $17,148
----------------------------------------------------------------------
Capital Expenditure - Net
Office furniture $4,553 $4,152
Hearth products 6,521 920
General corporate 3,389 194
----------------------------------------------------------------------
$14,463 $5,266
----------------------------------------------------------------------
As of As of
Mar. 29, Mar. 30,
2003 2002
-------------------
Identifiable Assets:
Office furniture $456,321 $512,194
Hearth products 302,741 308,734
General corporate 183,080 114,381
----------------------------------------------------------------------
$942,142 $935,309
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