HNI CORPORATION ANNOUNCES RESULTS FOR FOURTH QUARTER AND YEAR-END – FISCAL 2008
MUSCATINE, Iowa (February 17, 2009) – HNI Corporation (NYSE: HNI) today announced sales of $637.9 million and net income of $8.5 million for the fourth quarter ending January 3, 2009. Net income per diluted share for the quarter was $0.19 or $0.45 on a non-GAAP basis when excluding restructuring and impairment charges and favorable adjustments to redeemable liabilities. For fiscal year 2008, the Corporation reported sales of $2.5 billion and net income of $45.5 million. Net income per diluted share for the year was $1.02 or $1.46 on a non-GAAP basis when excluding restructuring and impairment charges, transition costs, and favorable adjustments to redeemable liabilities.
Fourth Quarter and FY’08 Summary Comments
"We continued to take focused and strong actions during the quarter, adjusting our businesses to the harsh marketplace realities. Consistent with our actions throughout 2008, we attacked structural and day-to-day operating costs in every corner of the corporation. These actions along with declining freight costs and better price realization allowed us to partially offset weakening demand and exceed our fourth quarter expectations.
"We faced unprecedented challenges in 2008, and I would like to thank our members for their hard work, dedication, and sacrifice," said Stan Askren, HNI Corporation Chairman, President and Chief Executive Officer.
Fourth Quarter
| Dollars in millions | | Three Months Ended | | | Percent | |
| except per share data | | 1/03/2009 | | | 12/29/2007 | | | Change | |
| | | | | | | | | | |
| Net Sales | | $ | 637.9 | | | $ | 668.5 | | | | -4.6 | % |
| Gross Margin | | $ | 210.4 | | | $ | 243.2 | | | | -13.5 | % |
| Gross Margin % | | | 33.0 | % | | | 36.4 | % | | | | |
| SG&A | | $ | 194.6 | | | $ | 190.0 | | | | 2.4 | % |
| SG&A % | | | 30.5 | % | | | 28.4 | % | | | | |
| Operating Income | | $ | 15.8 | | | $ | 53.2 | | | | -70.2 | % |
| Operating Income % | | | 2.5 | % | | | 8.0 | % | | | | |
| Income from Continuing Operations | | $ | 8.5 | | | $ | 37.5 | | | | -77.3 | % |
| | | | | | | | | | | | | |
| Earnings per share from Continuing Operations – Diluted | | $ | 0.19 | | | $ | 0.82 | | | | -76.8 | % |
Fourth Quarter Results – Continuing Operations
| | · | Consolidated net sales decreased $30.5 million to $637.9 million or 4.6 percent. Acquisitions contributed approximately $30 million or 4.6 percentage points of sales. |
| | · | Gross margins were 3.4 percentage points lower than prior year primarily due to decreased volume and increased material costs partially offset by increased price realization. |
| | · | Total selling and administrative expenses, including restructuring charges, as a percent of sales, increased due to higher restructuring and impairment charges, non-volume related freight and distribution expenses and severance costs. These were partially offset by favorable adjustments to the current fair value of mandatorily redeemable liabilities from prior acquisitions, cost control initiatives and lower incentive-based compensation expense. |
| | · | The Corporation recorded $21.5 million of restructuring and impairment charges. These charges included goodwill and intangible impairment charges of $21.8 million related to various office furniture reporting units offset partially by a favorable adjustment of $0.3 million related to previously announced facility shutdowns. Included in 2007 were $4.9 million of restructuring and impairment charges and $1.3 million of transition costs not classified as restructuring costs related to transitioning production to other office furniture facilities. |
| | · | The annualized effective tax rate for 2008 was reduced during the fourth quarter compared to earlier in the year primarily due to reinstatement of the research tax credit. The annualized effective tax rate for 2007 was reduced during the fourth quarter of 2007 compared to earlier in that year primarily due to a reduction in state taxes and an increase in foreign excludable income. |
Fourth Quarter – Non-GAAP Financial Measures (Reconciled with Most Comparable GAAP Financial Measures) | |
Dollars in millions except per share data | | Three Months Ended 1/03/2009 | | | Three Months Ended 12/29/2007 | |
| | | SG&A | | | Operating Income | | | EPS | | | SG&A | | | Operating Income | | | EPS | |
| As Reported (GAAP) | | $ | 194.6 | | | $ | 15.8 | | | $ | 0.19 | | | $ | 190.0 | | | $ | 53.2 | | | $ | 0.82 | |
| % of Net Sales | | | 30.5 | % | | | 2.5 | % | | | | | | | 28.4 | % | | | 8.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Restructuring and impairment | | $ | (21.5 | ) | | $ | 21.5 | | | $ | 0.35 | | | $ | (4.9 | ) | | $ | 5.5 | | | $ | 0.09 | |
| Transition costs | | | - | | | | - | | | | - | | | $ | (1.3 | ) | | $ | 1.3 | | | $ | 0.02 | |
| Redeemable liability adjustments | | $ | 5.7 | | | $ | (5.7 | ) | | $ | (.09 | ) | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Results (non-GAAP) | | $ | 178.8 | | | $ | 31.6 | | | $ | 0.45 | | | $ | 183.8 | | | $ | 60.0 | | | $ | 0.93 | |
| % of Net Sales | | | 28.0 | % | | | 5.0 | % | | | | | | | 27.5 | % | | | 9.0 | % | | | | |
Full Year
| Dollars in millions | | Twelve Months Ended | | | Percent | |
| except per share data | | 1/03/2009 | | | 12/29/2007 | | | Change | |
| | | | | | | | | | |
| Net Sales | | $ | 2,477.6 | | | $ | 2,570.5 | | | | -3.6 | % |
| Gross Margin | | $ | 828.6 | | | $ | 905.8 | | | | -8.5 | % |
| Gross Margin % | | | 33.4 | % | | | 35.2 | % | | | | |
| SG&A | | $ | 743.7 | | | $ | 712.1 | | | | 4.4 | % |
| SG&A % | | | 30.0 | % | | | 27.7 | % | | | | |
| Operating Income | | $ | 84.9 | | | $ | 193.7 | | | | -56.2 | % |
| Operating Income % | | | 3.4 | % | | | 7.5 | % | | | | |
| Income from Continuing Operations | | $ | 45.5 | | | $ | 119.9 | | | | -62.1 | % |
| | | | | | | | | | | | | |
| Earnings per share from Continuing Operations – Diluted | | $ | 1.02 | | | $ | 2.55 | | | | -60.0 | % |
Full Year Results – Continuing Operations
| | · | Net sales decreased to $2.5 billion or 3.6 percent. Acquisitions contributed approximately $118 million or 4.6 percentage points of sales. |
| | · | Gross margins decreased 1.8 percentage points due to lower volume, higher material costs, and restructuring and transition costs partially offset by price increases. |
| | · | Total selling and administrative expenses, including restructuring charges, as a percent of sales, increased due to higher restructuring and impairment charges, non-volume related freight and distribution expenses and the impact of non-operating gains on prior year results. These were partially offset by favorable adjustments to the current fair value of mandatorily redeemable liabilities from prior acquisitions, cost control initiatives and lower incentive-based compensation expense. Included in 2008 were $25.9 million of restructuring and impairment charges compared to $9.8 million in 2007. |
| | · | The Corporation's effective tax rate for 2008 was 34.2% compared to 32.3% in 2007. |
| | · | Net income per share was positively impacted approximately $0.05 by the Corporation's share repurchase program reducing average shares outstanding by 2.5 million shares compared to 2007. |
Cash flow from operations for the year was $174.4 million compared to $291.2 million last year. The reduction was due to lower earnings and a less favorable working capital reduction in 2008. Capital expenditures were $71.5 million in 2008 compared to $58.9 million in 2007 primarily due to new product introductions and facility consolidations completed during 2008. Acquisition spending during the year totaled $75.5 million. The Corporation repurchased 1,004,700 shares of common stock at a cost of $28.6 million during 2008, compared to 3,581,707 shares at a cost of $147.7 million in 2007.
Full Year – Non-GAAP Financial Measures (Reconciled with Most Comparable GAAP Financial Measures) | |
Dollars in millions except per share data | | Twelve Months Ended 1/03/2009 | | | Twelve Months Ended 12/29/2007 | |
| | | Gross Profit | | | SG&A | | | Operating Income | | | EPS | | | Gross Profit | | | SG&A | | | Operating Income | | | EPS | |
| As Reported (GAAP) | | $ | 828.6 | | | $ | 743.7 | | | $ | 84.9 | | | $ | 1.02 | | | $ | 905.8 | | | $ | 712.1 | | | $ | 193.7 | | | $ | 2.57 | |
| % of Net Sales | | | 33.4 | % | | | 30.0 | % | | | 3.4 | % | | | | | | | 35.2 | % | | | 27.7 | % | | | 7.5 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Restructuring and impairment | | $ | 0.4 | | | $ | (25.9 | ) | | $ | 26.3 | | | $ | 0.39 | | | $ | 0.6 | | | $ | (9.8 | ) | | $ | 10.4 | | | $ | 0.15 | |
| Transition costs | | $ | 5.3 | | | $ | (3.5 | ) | | $ | 8.8 | | | $ | 0.13 | | | | - | | | $ | (1.3 | ) | | $ | 1.3 | | | $ | 0.02 | |
| Non-operating gains | | | - | | | | - | | | | - | | | | - | | | | - | | | $ | 5.0 | | | $ | (5.0 | ) | | $ | (0.07 | ) |
| Redeemable liability adjustments | | | - | | | $ | 5.7 | | | $ | (5.7 | ) | | $ | (.08 | ) | | | - | | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Results (non-GAAP) | | $ | 834.4 | | | $ | 720.1 | | | $ | 114.2 | | | $ | 1.46 | | | $ | 906.4 | | | $ | 706.0 | | | $ | 200.4 | | | $ | 2.66 | |
| % of Net Sales | | | 33.7 | % | | | 29.1 | % | | | 4.6 | % | | | | | | | 35.3 | % | | | 27.5 | % | | | 7.8 | % | | | | |
Discontinued Operations
The Corporation completed the sale of a previously announced small, non-core component of the office furniture segment during the second quarter of 2007. Revenues and expenses associated with this business's operations are presented as discontinued operations for all periods presented in the financial statements.
Office Furniture
| | Three Months Ended | | | | | | Twelve Months Ended | | | | |
| Dollars in millions | | 1/03/2009 | | | 12/29/2007 | | | Percent Change | | | 1/03/2009 | | | 12/29/2007 | | | Percent Change | |
| Sales | | $ | 512.8 | | | $ | 548.2 | | | | -6.5 | % | | $ | 2,054.0 | | | $ | 2,108.4 | | | | -2.6 | % |
| Operating Profit | | $ | 12.9 | | | $ | 52.9 | | | | -75.6 | % | | $ | 101.3 | | | $ | 194.7 | | | | -48.0 | % |
| Operating Profit % | | | 2.5 | % | | | 9.7 | % | | | | | | | 4.9 | % | | | 9.2 | % | | | | |
Non-GAAP Financial Measures (Reconciled with Most Comparable GAAP Measures) | |
| | | Three Months Ended | | | Percent Change | | | Twelve Months Ended | | | Percent Change | |
| Dollars in millions | | 1/03/2009 | | | 12/29/2007 | | | 1/03/2009 | | | 12/29/2007 | |
| Operating Profit as Reported (GAAP) | | $ | 12.9 | | | $ | 52.9 | | | | -75.6 | % | | $ | 101.3 | | | $ | 194.7 | | | | -48.0 | % |
| % of Net Sales | | | 2.5 | % | | | 9.7 | % | | | | | | | 4.9 | % | | | 9.2 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Restructuring and impairment | | $ | 21.6 | | | $ | 4.4 | | | | | | | $ | 26.0 | | | $ | 9.3 | | | | | |
| Transition costs | | $ | - | | | $ | 1.3 | | | | | | | $ | 8.8 | | | $ | 1.3 | | | | | |
| Non-operating gains | | $ | - | | | $ | - | | | | | | | $ | - | | | $ | (2.0 | ) | | | | |
| Redeemable liability adjustments | | $ | (5.7 | ) | | $ | - | | | | | | | $ | (5.7 | ) | | $ | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating profit (non-GAAP) | | $ | 28.8 | | | $ | 58.6 | | | | -50.9 | % | | $ | 130.3 | | | $ | 203.3 | | | | -35.9 | % |
| % of Net Sales | | | 5.6 | % | | | 10.7 | % | | | | | | | 6.3 | % | | | 9.6 | % | | | | |
| | · | Fourth quarter and full year sales for the office furniture segment decreased $35.4 million and $54.4 million, respectively. The decrease was driven by substantial weakness in the supplies driven channel of the office furniture industry. Acquisitions contributed $14 million or 2.6 percentage points in the fourth quarter and $61 million or 2.9 percentage points for the full year. |
| | · | Fourth quarter and full year operating profit decreased $40.0 million and $93.4 million, respectively. Operating profit was negatively impacted by increased restructuring and impairment expenses, lower volume and higher material costs. These were partially offset by price increases, gains related to the current fair value of mandatorily redeemable liabilities from prior acquisitions, contributions from acquisitions, cost control initiatives and lower incentive-based compensation expense. |
Hearth Products
| | | Three Months Ended | | | | | | Twelve Months Ended | | | | |
| Dollars in millions | | 1/03/2009 | | | 12/29/2007 | | | Percent Change | | | 1/03/2009 | | | 12/29/2007 | | | Percent Change | |
| Sales | | $ | 125.1 | | | $ | 120.3 | | | | 4.0 | % | | $ | 423.6 | | | $ | 462.0 | | | | -8.3 | % |
| Operating Profit | | $ | 9.3 | | | $ | 10.4 | | | | -10.0 | % | | $ | 11.8 | | | $ | 36.4 | | | | -67.7 | % |
| Operating Profit % | | | 7.4 | % | | | 8.6 | % | | | | | | | 2.8 | % | | | 7.9 | % | | | | |
| | · | Fourth quarter and full year sales for the hearth product segment increased $4.8 million and decreased $38.5 million, respectively. Acquisitions contributed $16 million or 13.4 percentage points in the fourth quarter and $57 million or 12.4 percentage points for the full year. |
| | · | Fourth quarter and full year operating profit decreased $1.1 million and $24.7 million, respectively. Operating profit was negatively impacted due to lower volume, higher material costs and increased mix of lower margin product partially offset by price increases, contributions from acquisitions, cost reduction initiatives and lower restructuring expenses. |
Outlook
"The economic outlook remains volatile and uncertain. Consistent with the ongoing and deepening recession, we anticipate weak demand across our businesses. We are responding to the conditions and adjusting our businesses accordingly. Despite the difficult environment, we are optimistic about the future because of the enhancements we're making to our cost structure, the investments we're making to improve our businesses, and the early cycle nature of our hearth business and office furniture supplies-driven channel," said Mr. Askren.
The Corporation remains focused on creating long-term shareholder value by growing its business through investment in building brands, product solutions and selling models, enhancing its strong member-owner culture, and remaining focused on its long-standing rapid continuous improvement programs to build best total cost and a lean enterprise.
Conference Call
HNI Corporation will host a conference call on Wednesday, February 18, 2009 at 10:00 a.m. (Central) to discuss fourth quarter and year-end 2008 results. To participate, call the conference call line at 1-800-230-1074. A replay of the conference call will be available until Wednesday, February 25, 2009, 11:59 p.m. (Central). To access this replay, dial 1-800-475-6701 – Access Code: 982540. A link to the simultaneous web cast can be found on the Corporation's website at www.hnicorp.com.
Non-GAAP Financial Measures
This earnings release contains certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the company. Pursuant to the requirements of Regulation G, the Corporation has provided a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure.
The non-GAAP financial measures used within this earnings release are: gross profit, selling and administrative expense, operating income, operating profit and net income per diluted share (i.e., EPS), excluding restructuring and impairment charges, transition costs, redeemable liability adjustments and non-operating gains. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Management believes this information is also useful for investors.
HNI Corporation is a NYSE traded company (ticker symbol: HNI) providing products and solutions for the home and workplace environments. HNI Corporation is the second largest office furniture manufacturer in the world and is also the nation’s leading manufacturer and marketer of gas- and wood-burning fireplaces. The Corporation's strong brands, including HON®, Allsteel®, Gunlocke®, Paoli®, Maxon®, Lamex®, HBF® , Heatilator®, Heat & GloTM, Quadra-Fire®, and Harman StoveTM have leading positions in their markets. HNI Corporation is committed to maintaining its long-standing corporate values of integrity, financial soundness and a culture of service and responsiveness. More information can be found on the Corporation's website at www.hnicorp.com.
Statements in this release that are not strictly historical, including statements as to plans, outlook, objectives, and future financial performance, are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "could," "confident," "estimate," "expect," "forecast," "hope," "intend," "likely," "may," "plan," "possible," "potential," "predict," "project," "should," "will," "would," and variations of such words and similar expressions identify forward-looking statements. Forward-looking statements involve known and unknown risks, which may cause the Corporation's actual results in the future to differ materially from expected results. These risks include, without limitation: the Corporation's ability to realize financial benefits from its (a) price increases, (b) cost containment and business simplification initiatives for the entire Corporation, (c) investments in strategic acquisitions, new products and brand building, (d) investments in distribution and rapid continuous improvement, (e) ability to maintain its effective tax rate, and (f) consolidation and logistical realignment initiatives; uncertainty related to the availability of cash and credit, and the terms and interest rates on which credit would be available,
to fund operations and future growth; lower than expected demand for the Corporation's products due to uncertain political and economic conditions, including the current credit crisis, slow or negative growth rates in global and domestic economies and the protracted decline in the domestic housing market; lower industry growth than expected; major disruptions at key facilities or in the supply of any key raw materials, components or finished goods; uncertainty related to disruptions of business by terrorism, military action, acts of God or other Force Majeure events; competitive pricing pressure from foreign and domestic competitors; higher than expected costs and lower than expected supplies of materials (including steel and petroleum based materials); higher than expected costs for energy and fuel; changes in the mix of products sold and of customers purchasing; relationships with distribution channel partners, including the financial viability of distributors and dealers; restrictions imposed by the terms of the Corporation's revolving credit facility, term loan credit agreement and note purchase agreement; currency fluctuations and other factors described in the Corporation's annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q. The Corporation undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.
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HNI CORPORATION
Condensed Consolidated Statement of Operations
| | | Three Months Ended | | | Twelve Months Ended | |
| (Dollars in thousands, except per share data) | | Jan. 3, 2009 | | | Dec. 29, 2007 | | | Jan. 3, 2009 | | | Dec. 29, 2007 | |
| Net sales | | $ | 637,949 | | | $ | 668,484 | | | $ | 2,477,587 | | | $ | 2,570,472 | |
| Cost of products sold | | | 427,536 | | | | 425,289 | | | | 1,648,975 | | | | 1,664,697 | |
| Gross profit | | | 210,413 | | | | 243,195 | | | | 828,612 | | | | 905,775 | |
| Selling and administrative expenses | | | 173,065 | | | | 185,052 | | | | 717,870 | | | | 702,329 | |
| Restructuring and impairment charges | | | 21,515 | | | | 4,932 | | | | 25,859 | | | | 9,788 | |
| Operating income | | | 15,833 | | | | 53,211 | | | | 84,883 | | | | 193,658 | |
| Interest income | | | 326 | | | | 455 | | | | 1,172 | | | | 1,229 | |
| Interest expense | | | 4,384 | | | | 4,284 | | | | 16,865 | | | | 18,161 | |
| Earnings from continued operations before income taxes and minority interest | | | 11,775 | | | | 49,382 | | | | 69,190 | | | | 176,726 | |
| Income taxes | | | 3,252 | | | | 12,032 | | | | 23,634 | | | | 57,141 | |
| Earnings from continuing operations before minority interest | | | 8,523 | | | | 37,350 | | | | 45,556 | | | | 119,585 | |
| Minority interest in earnings of subsidiary | | | 8 | | | | (163 | ) | | | 106 | | | | (279 | ) |
| Income from continuing operations | | | 8,515 | | | | 37,513 | | | | 45,450 | | | | 119,864 | |
| Discontinued operations, less applicable income taxes | | | - | | | | - | | | | - | | | | 514 | |
| Net income | | $ | 8,515 | | | $ | 37,513 | | | $ | 45,450 | | | $ | 120,378 | |
| Net income from continuing operations – basic | | $ | 0.19 | | | $ | 0.82 | | | $ | 1.03 | | | $ | 2.57 | |
| Net income from discontinued operations – basic | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.01 | |
| Net income per common share – basic | | $ | 0.19 | | | $ | 0.82 | | | $ | 1.03 | | | $ | 2.58 | |
| Average number of common shares outstanding – basic | | | 44,259,137 | | | | 45,550,436 | | | | 44,309,765 | | | | 46,684,774 | |
| Net income from continuing operations – diluted | | $ | 0.19 | | | $ | 0.82 | | | $ | 1.02 | | | $ | 2.55 | |
| Net income from discontinued operations – diluted | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.00 | | | $ | 0.02 | |
| Net income per common share – diluted | | $ | 0.19 | | | $ | 0.82 | | | $ | 1.02 | | | $ | 2.57 | |
| Average number of common shares outstanding - diluted | | | 44,386,092 | | | | 45,774,659 | | | | 44,433,945 | | | | 46,925,161 | |
Condensed Consolidated Balance Sheet
| Assets | | Liabilities and Shareholders' Equity | |
| | | As of | | | | As of | |
| | | Jan. 3, | | | Dec. 29, | | | | Jan. 3, | | | Dec. 29, | |
| (Dollars in thousands) | | 2009 | | | 2007 | | | | 2009 | | | 2007 | |
| Cash and cash equivalents | | $ | 39,538 | | | $ | 33,881 | | Accounts payable and | | | | | | |
| Short-term investments | | | 9,750 | | | | 9,900 | | accrued expenses | | $ | 313,431 | | | $ | 367,320 | |
| Receivables | | | 238,327 | | | | 288,777 | | Note payable and current | | | | | | | | |
| Inventories | | | 84,290 | | | | 108,541 | | maturities of long-term debt | | | 54,494 | | | | 14,715 | |
| Deferred income taxes | | | 17,512 | | | | 17,828 | | Current maturities of other | | | | | | | | |
| Prepaid expenses and | | | | | | | | | long-term obligations | | | 5,700 | | | | 2,426 | |
| other current assets | | | 32,344 | | | | 30,145 | | | | | | | | | | |
| Current assets | | | 421,761 | | | | 489,072 | | Current liabilities | | | 373,625 | | | | 384,461 | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Long-term debt | | | 267,300 | | | | 280,315 | |
| | | | | | | | | | Capital lease obligations | | | 43 | | | | 776 | |
| Property and equipment - net | | | 315,606 | | | | 305,431 | | Other long-term liabilities | | | 50,399 | | | | 55,843 | |
| Goodwill | | | 268,392 | | | | 256,834 | | Deferred income taxes | | | 29,191 | | | | 26,672 | |
| Other assets | | | 163,790 | | | | 155,639 | | | | | | | | | | |
| | | | | | | | | | Minority interest in subsidiary | | | 158 | | | | 1 | |
| | | | | | | | | | Shareholders' equity | | | 448,833 | | | | 458,908 | |
| | | | | | | | | | Total liabilities and | | | | | | | | |
| Total assets | | $ | 1,169,549 | | | $ | 1,206,976 | | shareholders' equity | | $ | 1,169,549 | | | $ | 1,206,976 | |
Condensed Consolidated Statement of Cash Flows
| | | Twelve Months Ended | |
| (Dollars in thousands) | | Jan. 3, 2009 | | | Dec. 29, 2007 | |
| Net cash flows from (to) operating activities | | $ | 174,369 | | | $ | 291,187 | |
| Net cash flows from (to) investing activities: | | | | | | | | |
| Capital expenditures | | | (71,496 | ) | | | (58,914 | ) |
| Acquisition spending | | | (75,479 | ) | | | (41,696 | ) |
| Other | | | 15,449 | | | | 8,588 | |
| Net cash flows from (to) financing activities | | | (37,186 | ) | | | (193,361 | ) |
| Net increase (decrease) in cash and cash equivalents | | | 5,657 | | | | 5,804 | |
| Cash and cash equivalents at beginning of period | | | 33,881 | | | | 28,077 | |
| Cash and cash equivalents at end of period | | $ | 39,538 | | | $ | 33,881 | |
Business Segment Data
| | | Three Months Ended | | | Twelve Months Ended | |
| (Dollars in thousands) | | Jan. 3, 2009 | | | Dec. 29, 2007 | | | Jan. 3, 2009 | | | Dec. 29, 2007 | |
| Net sales: | | | | | | | | | | | | |
| Office furniture | | $ | 512,830 | | | $ | 548,214 | | | $ | 2,054,037 | | | $ | 2,108,439 | |
| Hearth products | | | 125,119 | | | | 120,270 | | | | 423,550 | | | | 462,033 | |
| | | $ | 637,949 | | | $ | 668,484 | | | $ | 2,477,587 | | | $ | 2,570,472 | |
| | | | | | | | | | | | | | | | | |
| Operating profit: | | | | | | | | | | | | | | | | |
| Office furniture (1) | | | | | | | | | | | | | | | | |
| Operations before restructuring and impairment charges | | $ | 34,506 | | | $ | 56,769 | | | $ | 126,833 | | | $ | 203,378 | |
| Restructuring and impairment charges | | | (21,601 | ) | | | (3,830 | ) | | | (25,544 | ) | | | (8,686 | ) |
| Office furniture - net | | | 12,905 | | | | 52,939 | | | | 101,289 | | | | 194,692 | |
| Hearth products | | | | | | | | | | | | | | | | |
| Operations before restructuring and impairment charges | | | 9,231 | | | | 11,451 | | | | 12,074 | | | | 37,545 | |
| Restructuring and impairment charges | | | 86 | | | | (1,101 | ) | | | (315 | ) | | | (1,101 | ) |
| Hearth products - net | | | 9,317 | | | | 10,350 | | | | 11,759 | | | | 36,444 | |
| Total operating profit | | | 22,222 | | | | 63,289 | | | | 113,048 | | | | 231,136 | |
| Unallocated corporate expense | | | (10,454 | ) | | | (13,669 | ) | | | (44,016 | ) | | | (53,992 | ) |
| Income before income taxes | | $ | 11,768 | | | $ | 49,620 | | | $ | 69,032 | | | $ | 177,144 | |
| | | | | | | | | | | | | | | | | |
| Depreciation and amortization expense: | | | | | | | | | | | | | | | | |
| Office furniture | | $ | 12,928 | | | $ | 12,866 | | | $ | 50,511 | | | $ | 49,294 | |
| Hearth products | | | 3,733 | | | | 3,407 | | | | 15,212 | | | | 14,453 | |
| General corporate | | | 1,087 | | | | 1,084 | | | | 4,432 | | | | 4,426 | |
| | | $ | 17,748 | | | $ | 17,377 | | | $ | 70,155 | | | $ | 68,173 | |
| | | | | | | | | | | | | | | | | |
| Capital expenditures – net: | | | | | | | | | | | | | | | | |
| Office furniture | | $ | 14,128 | | | $ | 13,919 | | | $ | 59,101 | | | $ | 47,408 | |
| Hearth products | | | 2,180 | | | | 1,444 | | | | 10,530 | | | | 8,736 | |
| General corporate | | | 598 | | | | 1,804 | | | | 1,865 | | | | 2,770 | |
| | | $ | 16,906 | | | $ | 17,167 | | | $ | 71,496 | | | $ | 58,914 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | As of | | | As of | |
| | | | | | | | | | | Jan. 3, 2009 | | | Dec. 29, 2007 | |
| Identifiable assets: | | | | | | | | | | | | | | | | |
| Office furniture | | | | | | | | | | $ | 730,348 | | | $ | 724,447 | |
| Hearth products | | | | | | | | | | | 326,168 | | | | 356,273 | |
| General corporate | | | | | | | | | | | 113,033 | | | | 126,256 | |
| | | | | | | | | | | $ | 1,169,549 | | | $ | 1,206,976 | |
| (1) Includes minority interest | | | | | | | | | | | | | | | | |
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