PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

See accompanying Notes to Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

HON INDUSTRIES Inc. and SUBSIDIARIES

NOTES OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 29, 2001March 30, 2002

Note A.  Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-monththree-month period ended September 29, 2001,March 30, 2002, are not necessarily indicative of the results that may be expected for the year ending December 29, 2001.28, 2002. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 30, 2000.29, 2001.

Note C. Plant Shutdown

During the quarter ended March 30, 2002, the Company recorded costs of $3.9 million or $0.04 per diluted share for the shutdown of an office furniture facility in Jackson, Tennessee. Included in the costs were $1.3 million for asset impairments, $.7 million for severance payments, $.3 million for other employee related costs and $1.6 million for certain other expenses associated with the closing of the facility. The Company expects to realize savings during 2002 equal to the costs incurred in closing the facility.

Note D. Restructuring and Impairment Charge

During the quarter ended June 30, 2001, the Company recorded a pretax charge of $24.0 million or $0.26 per diluted share for a restructuring plan that involvesinvolved consolidating physical facilities, discontinuing low volume product lines, and reductions of workforce. Included in this charge iswas the closedown of three of its office furniture facilities located in Williamsport, Pennsylvania, Tupelo, Mississippi, and Santa Ana, California. The charge includesincluded $16.2 million of asset impairments per Financial Accounting Standards Board Statement 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The remaining $7.8 million of restructuring expenses.

Approximately $5.8 million of pretax exit costs have been paid and charged against the charge is classified as restructuring expenses in accordance with EITF 94-3 of the Financial Accounting Standards Board and Staff Accounting Bulleting (SAB 100) of the Securities and Exchange Commission. Included in the $7.8 million is $3.1liability. This included $2.5 million for severance arising from the elimination of approximately 600for 493 plant member positions, $.8$0.5 million for other employeemember related costs and $3.9$2.8 million for certain other expenses associated with the closing of facilities.

During the nine month period ended September 29, 2001, $3.2 million of pretax exit The primary costs were paid and charged against the liability. It included $1.8 million for severance for 324 positions, $.2 million for other employee relatednot yet incurred relate to costs and $1.2 million for certain other expenses associated with the closing of facilities.

Note D. Business Combinations

The Company completedclosed buildings. Management believes the acquisitions of three small hearth product distributors during the nine-month period ending September 29, 2001, for a total purchase price of approximately $7.6 million.

During the first quarter of 2001, management finalized its integration plan related to the acquisition of its Hearth Services division. Costs related to severance and consolidation of facilities of approximately $2.4 million have been recorded and reflected as an adjustment to goodwill. Of this amount, $1.3 million has been utilized as of September 29, 2001. Management expects these activitiesremaining reserve to be completed within the year. Final estimates did not have a material effect on the original liabilities established in connection with the purchase.adequate to cover these obligations.

Note E. Comprehensive Income

The Company's comprehensive income consistsin 2001 consisted of an unrealized holding gain or loss on equity securities available-for-sale under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and nominal foreign currency adjustments. The Company sold the equity securities in first quarter 2002; therefore, comprehensive income in 2002 consists totally of foreign currency adjustments.

Note F. Goodwill - Adoption of Statement 142

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" on December 30, 2001, the beginning of its 2002 fiscal year. With the adoption of SFAS No. 142, goodwill is no longer subject to amortization over its estimated useful life. Rather, goodwill is assessed for impairment by applying a fair-value-based test. The Company is in the process of assessing the impairment and does not believe there is an impairment.

The following schedule reports the adjusted net income for the goodwill amortization impact:

Note G. New Accounting Standards

The Company adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," on December 30, 2001, the beginning of its 2002 fiscal year. The adoption did not have an impact on the Company's financial statements.

The Company will be required to adopt Statement No. 143, "Accounting for Asset Retirement Obligations," on December 29, 2002, the beginning of its 2003 fiscal year. The adoption of SFAS No. 143 is not expected to have a material impact on the Company's financial statements.

Note H. Business Segment Information

Management views the Company as being in two business segments: office furniture and hearth products with the former being the principal business segment.

The office furniture segment manufactures and markets a broad line of metal and wood commercial and home office furniture which includes file cabinets, desks, credenzas, chairs, storage cabinets, tables, bookcases, freestanding office partitions and panel systems, and other related products. The hearth product segment manufactures and markets a broad line of manufactured gas-, pellet- and wood-burning fireplaces and stoves, fireplace inserts, and chimney systems principally for the home.

For purposes of segment reporting, intercompany sales transfers between segments are not material and operating profit is income before income taxes exclusive of certain unallocated corporate expenses. These unallocated corporate expenses include the net cost of the Company's corporate operations, interest income, and interest expense. Management views interest income and expense as corporate financing costs and not as a business segment cost. In addition, management applies one effective tax rate to its consolidated income before income taxes so income taxes are not reported or viewed internally on a segment basis.

No geographic information for revenues from external customers or for long-lived assets is disclosed inasmuch as the Company's primary market and capital investments are concentrated in the United States.

Reportable segment data reconciled to the consolidated financial statements for the three-month and nine-month period ended September 29,March 30, 2002, and March 31, 2001, and September 30, 2000, is as follows:

Note G.  New Accounting Standards

The Financial Accounting Standards Board finalized Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations,"  and No. 142, "Goodwill and Other Intangible Assets," on June 30, 2001.  The Company will be required to adopt both statements on December 30, 2001, the beginning of its 2002 fiscal year.

SFAS No. 141 requires all business combinations initiated after June 30, 2001, to be accounted for using the purchase method of accounting.  With the adoption of SFAS No. 142, goodwill is no longer subject to amortization over its estimated useful life.  Rather, goodwill will be assessed for impairment by applying a fair-value-based test.  The Company does not anticipate recognizing any impairment of goodwill upon adoption.  The Company will stop recording, on an annual basis, approximately $9 million of goodwill amortization upon adoption.

The Financial Accounting Standards Board finalized SFAS No. 143, "Accounting for Asset Retirement Obligations," on August 15, 2001, and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," on October 3, 2001.  The Company will be required to adopt Statement No. 143 on December 29, 2002, the beginning of its 2003 fiscal year and Statement No. 144 on December 30, 2001, the beginning of its 2002 fiscal year.  The adoption of SFAS No. 143 and SFAS No. 144 is not expected to have a material impact on the Company's financial statements.

Item 2.Management's Discussion and Analysis of Financial Condition and Results of
             Operations Results of Operations

A summary of the period-to-period changes in the principal items included in the Condensed Consolidated Statements of Income is shown below:

Consolidated net sales for the thirdfirst quarter ending September 29, 2001,March 30, 2002, were $459.4$399.1 million, a 14.2%13.6% decrease from the $535.3$462.0 million in the thirdfirst quarter of 2000.2001 due to lower sales volume caused by the continued softness in the office furniture industry. Net income was $28.7$15.9 million, a decrease of 16.2% from $34.2compared to $18.3 million over the same period in 2000. Net income per share for the quarter was $0.48 per diluted share, a decrease of 15.8% from $0.57 per diluted share earned in third quarter 2000.

For the first nine months of 2001, consolidated net sales decreased 10.5% to $1.4 billion from $1.5 billion last year. Net income was $66.5 million or $1.12 per share, excluding an after-tax restructuring charge of $15.4 million or $0.26 per share, taken in second quarter 2001 to better align the Company's permanent cost structure. Earnings per share before the one-time charge were down 18.2% from $1.37 for the same period a year ago. Net income after the restructuring chargeper common share for first quarter 2002 was $51.1 million or $0.86$0.27 per share.diluted share, a 12.9% decrease from $0.31 per share in first quarter 2001.

For the thirdfirst quarter of 2001,2002, office furniture comprised 77%75% of consolidated net sales and hearth products comprised 23%25%. Net sales for office furniture were down 18.6%18.1%. Sales were down in all three office furniture sectors - - retail, commercial and contract. The Business and Institutional Furniture Manufacturer's Association (BIFMA) reported shipments down 30 percent for the first two months of 2002. Hearth products sales increased 4.8%3.6% for the quarter, compared to the same quarter a year ago. Office furniture contributed 77%79% of thirdfirst quarter 20012002 consolidated operating profit before unallocated corporate expenses and hearth products contributed 23%21%.

The consolidated gross profit margin for the thirdfirst quarter of 2001 increased to a new quarterly record of2002 was 35.0% compared to 33.8%32.5% for the same period in 2000. This increase2001. The improvement in margin wasgross profit margins is due to improvednew product introductions and the Company's continued cost containment, rapid continuous improvement (RCI), and business simplification.simplification initiatives. Both segments experienced improved margins.

Selling and administrative expenses for the thirdfirst quarter of 20012002 were 25.0%28.6% of net sales, compared to 23.2%25.8% in the comparable quarter of 2000. This increase was due to lower overall sales volume.2001. Actual selling and administrative dollars for the quarter decreased 7.6%4.0 percent or $9.4 million.

During$4.7 million compared to the same quarter ended June 30, 2001, the Company recorded a pretax charge of $24.0 million or $0.26 per diluted share for a restructuring plan that involves consolidating physical facilities, discontinuing low volume product lines, and reductions of workforce.last year. Included in this charge isselling and administrative expenses in 2002 were $3.9 million of costs due to the closedownshutdown of three of itsan office furniture facilities locatedfacility in Williamsport, Pennsylvania, Tupelo, Mississippi, and Santa Ana, California. The charge included $16.2Jackson, Tennessee. Included in the $3.9 million related towas $1.3 million for asset impairments, and $7.8 million was provided to cover restructuring expenses. Restructuring spending during the nine-month period included $1.8$.7 million for severance, for 324 positions, $.2$.3 million for other employee related costs, and $1.2$1.6 million for certain other expenses associated with the closing of facilities.the facility. The Company expects to realize savings during 2002 equal to the costs incurred in closing the facility. Selling and administrative expenses also included approximately $2 million of additional bad debt expense in first quarter 2002 due to the deterioration in the financial condition of a few customers. First quarter 2001 included approximately $2.5 million of goodwill amortization that is not included in 2002 due to the adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets," on December 30, 2001, the beginning of the Company's 2002 fiscal year.

Liquidity and Capital Resources

As of September 29, 2001,March 30, 2002, cash and short-term investments increaseddecreased to $40.9$69.6 million, compared to a $3.2$78.8 million balance at year-end 2000. Net cash flows from operations contributed to2001. The annual payment of marketing programs and the improvement.annual funding of the Company's retirement plan were the main causes of the decrease in cash. Cash flow and working capital management are major focuses of management to ensure the Company is poised for growth.

Net capital expenditures for the first nine monthsquarter of 20012002 were $32.2$5.3 million and primarily represent investment in new, more efficient machinery and equipment. These investments were funded by a combination of cash reserves, cash from operations andoperations.

On February 13, 2002, the Board approved a revolving credit agreement.

During4.2% increase in the first quarter of 2001, the Company completed the acquisition of three small hearth products distributors for a total purchase price of approximately $7.6 million.

The Board of Directors declared a regularcommon stock quarterly cash dividend offrom $0.12 per share to $0.125 per share. The dividend was paid on its common stock on August 6, 2001,March 1, 2002, to shareholders of record aton February 22, 2002. This was the close of business on August 16, 2001. It was paid on August 31, 2001, and represented the 186188^th consecutive quarterly dividend paid by the Company.

For the first nine months ended September 29, 2001, theThe Company repurchased 1,472,937 sharesdid not repurchase any of its common stock at a costduring the first quarter of approximately $35.1 million or an average price of $23.80 per share.2002. As of September 29, 2001,March 30, 2002, approximately $78.6 million of the Board's current repurchase authorization remained unspent.

Looking Ahead

The Company anticipates that the remainder of 2001 willsecond quarter to be challenging in both sales and profits due to the current economic and political environment. The Companycontinued slowdown in the office furniture industry. DRI-WEFA, BIFMA's forecasting consultant, is focused on optimizing their 2001 performance, while continuingprojecting the office furniture industry to follow their long-term value creation strategies.be down over 15 percent in the second quarter of 2002 compared to the same quarter last year.

Statements in this report 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 provisions of the Private Securities Litigation Reform Act 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. These risks include, among others: the Company's ability to realize financial benefits from simplifying its business and reducing its cost structure,containment and business simplification initiatives, to realize the savings from its closing of the Jackson, Tennessee, facility, to achieve expected financial benefit from its contract sector strategy, to introduce and obtain sales at improved gross margins from new products;products, 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.

PART II.     OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K

1. Exhibits. None
2. Reports on Form 8-K. No reports on Form 8-K were filed during the
   quarter for which this report is filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: November 8, 2001May 1, 2002                                                  HON INDUSTRIES Inc.

                                                                                By:    /s/ Jerald K. Dittmer

                                                                                        Jerald K. Dittmer
                                                                                        Vice President and CFO