HNI Corporation Provides Pandemic Response Update

Health, safety, and community support

Earlier this month, the Corporation announced the implementation of workplace health and safety measures consistent with guidelines from the Centers for Disease Control and Prevention. The Corporation is taking strong measures to create social distancing and keep members safe. All members able to work remotely are currently doing so. In addition, the Corporation has reorganized production facilities to protect members and increased the frequency and depth of cleanings, among other measures.

To support local communities and health providers, the Corporation is producing, donating, and supporting the production of personal protective equipment (“PPE”) to first responders, healthcare systems, and hospitals utilizing HNI’s facilities in Iowa, New York, and North Carolina. These efforts include the manufacture of washable cloth facemasks, washable cloth facemask coverings, and washable and disposable protective gowns. Further, the Corporation is loaning equipment processing time to support local vendors’ PPE production efforts.

Cost savings and cash flow support

In its COVID-19 response update on April 6th, the Corporation provided details around its debt and liquidity levels and withdrew its fiscal 2020 sales and earnings guidance. The Corporation also announced plans to reduce operating costs, lower capital expenditures, and temporarily suspend share repurchase activity to support free cash flow. Since then, the Corporation has taken additional actions, including:

– Salaries reduced. Base salaries for salaried exempt members were reduced by 10 percent; executive salaries were reduced by 15 percent; and CEO Jeff Lorenger’s salary was reduced by 25 percent. These measures will be reassessed in six months.
– Board retainers reduced. The Corporation’s Board of Directors reduced its cash and equity retainers by 25 percent. This action will also be reassessed in six months.
– Members furloughed. Members have been furloughed to better match staffing levels with demand activity. The Corporation will pay all health insurance premiums for these members during furlough.
– Capital plan reduced. The Corporation reduced its capital expenditure budget for 2020 from approximately $65 million to $35 million.

“We are taking an aggressive, yet balanced approach to our pandemic response. Our primary focus is on the health and safety of our members, and we have implemented measures accordingly. Financially, we entered this crisis from a position of strength with modest debt levels, strong liquidity, and earnings momentum. To maintain that strength and ensure the long-term health of the organization, we are taking aggressive cost actions and other measures to support cash flow,” stated Jeff Lorenger, HNI Corporation, Chairman, President, and Chief Executive Officer.

About HNI Corporation

HNI Corporation is an NYSE traded company (ticker symbol: HNI) providing products and solutions for the home and workplace environments. HNI Corporation is a leading global office furniture manufacturer and is the nation’s leading manufacturer of hearth products. The Corporation’s strong brands have leading positions in their markets. More information can be found on the Corporation’s website at www.hnicorp.com.

Contact:

Marshall Bridges – Senior Vice President & CFO – (563) 272-7400

Source: HNI Corporation