HON INDUSTRIES Inc. (NYSE: HNI) today announced record results for the 14th consecutive quarter. The company
reported quarterly record net sales of $419.7 million for the second quarter ending July 3, 1999.
"HON INDUSTRIES' sales growth is driven by the strong relationship with our office furniture and hearth products customers and their reaction to our new products and continued focus on service," HON INDUSTRIES' Chairman, President and CEO, Jack D. Michaels, said. "We have grown faster than our
industries, are encouraged by positive economic indicators, and continue to see a gain in sales momentum."
For second quarter 1999, consolidated net sales increased 4.6 percent to $419.7 million, up from $401.4 million for the same quarter last year. Net income reached $22.5 million, compared to $23.4 million for second quarter 1998. Net income per share for second quarter 1999 was $0.37 per diluted share, meeting analyst consensus expectations, compared to $0.38 per share in
second quarter 1998.
For the first six months of 1999, consolidated net sales increased to $844.2 million, up 3.0 percent from $819.7 million in 1998. Net income was $46.6 million, or $0.76 per share, excluding an after-tax charge of $12.5 million, or $0.20 per share, taken in first quarter 1999 for the closing of three plants, a cost savings initiative to increase long-term profitability. Earnings per share before the non-recurring charge were up 2.7 percent from $0.74 for the same period a year ago. Net income after the plant closing provision was $34.1 million, or $0.56 per share.
"Historically, HON INDUSTRIES has achieved strong net income growth," Michaels said. "In order to better serve our customers, through shorter lead times, improved complete and on-time deliveries, and reduced transportation damage, we have implemented a number of internal initiatives which have resulted in increased freight expenses, and in turn, increased S.G.& A.," Michaels added. "As an investment for the future, we have also increased capacity, which we believe is essential to support our long-term growth objectives. However, modest revenue growth during the first two quarters of 1999 has not allowed us to adequately absorb the increased fixed costs, adversely impacting our gross profits."
The Business and Institutional Furniture Manufacturer's Association (BIFMA) reported orders have declined one percent in the first five months of 1999, compared to the same period a year ago. BIFMA recently reduced its annual growth forecast for 1999 to a range of one to three percent.
"HON INDUSTRIES' growth in incoming office furniture orders was 7.9 percent for the quarter and 6.4 percent year-to-date," Michaels said. "We expect to continue to exceed industry growth for the balance of the year.
"Our commitment at HON INDUSTRIES is to grow the company through increased sales and to leverage those sales to deliver strong bottom line results," Michaels said. "We are focused on growing our leading position in the markets we serve, exceeding the expectations of our end-user and distributor partner
customers, and continuously increasing our productivity through lean manufacturing."
HON INDUSTRIES Inc. is the nation's largest producer of value-oriented office furniture and the third largest manufacturer and marketer of office furniture in North American sales. It is also the nation's largest manufacturer and marketer of gas- and wood-burning fireplaces under its Hearth Technologies operating company. HON INDUSTRIES' common stock is traded on the
New York Stock Exchange under the symbol HNI.
