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Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>HNI reported 3Q25 ongoing EPS of $1.10 versus $1.03 in 3Q24, up 6.8%, which was ahead of our $1.06 estimate, which was also consensus</li><li>Sales grew 1.7% in the quarter to $683.8MM, slightly below our forecast for 2.2% growth and consensus of 2.5% growth.</li><li>Excluding the HNI India divesture, organic sales growth was 2.6% in the quarter.</li></ul>

HNI reported 3Q25 ongoing EPS of $1.10 versus $1.03 in 3Q24, up 6.8%, which was ahead of our $1.06 estimate, which was also consensusSales grew 1.7% in the quarter to $683.8MM, slightly below our forecast for 2.2% growth and consensus of 2.5% growth.Excluding the HNI India divesture, organic sales growth was 2.6% in the quarter.

HNI: 3Q25 EPS Upside; Workplace Leading Indicators Firming

<ul><li>Announces agreement to acquire Steelcase. Please note with this report we are assuming coverage of HNI Corporation.</li><li>Earlier this week, HNI announced a definitive agreement to acquire Steelcase, Inc. (SCS; $15.96; $1.83 billion market cap) for $7.20 in cash and 0.2192 shares of HNI stock.</li><li>At HNI’s current stock price of $44.14, the implied per share purchase price is $16.88, which calculates to a 5.35x multiple of the combination of TTM EBITDA for SCS of $266 million plus HNI’s expectation of total run-rate cost synergies of $120 million.</li></ul>

Announces agreement to acquire Steelcase. Please note with this report we are assuming coverage of HNI Corporation.Earlier this week, HNI announced a definitive agreement to acquire Steelcase, Inc. (SCS; $15.96; $1.83 billion market cap) for $7.20 in cash and 0.2192 shares of HNI stock.At HNI’s current stock price of $44.14, the implied per share purchase price is $16.88, which calculates to a 5.35x multiple of the combination of TTM EBITDA for SCS of $266 million plus HNI’s expectation of total run-rate cost synergies of $120 million.

HNI Corporation: SCS Acquisition Should Extend Double-Digit EPS Growth Run

<ul><li>2Q25 adjusted EPS of $1.11 came in significantly ahead of our estimate of $0.87 on solid growth in both segments despite ongoing macro headwinds and continued margin expansion even as tariff headwinds and investment in growth made themselves felt.</li><li>HNI posted growth in both segments (WF and RBP), with the growth in contract within WF particularly notable.</li><li>WF organic revenue was up 8%. While some of the 2Q gains were attributable to demand pull-forward in the face of tariffs (about $18 million or $0.10-0.12 in EPS), the 15% gains in contract and the positive leading indicators speak to a general uptick in demand within contract that we have seen over the past several quarters as return-to-office continues to gain traction.</li></ul>

2Q25 adjusted EPS of $1.11 came in significantly ahead of our estimate of $0.87 on solid growth in both segments despite ongoing macro headwinds and continued margin expansion even as tariff headwinds and investment in growth made themselves felt.HNI posted growth in both segments (WF and RBP), with the growth in contract within WF particularly notable.WF organic revenue was up 8%. While some of the 2Q gains were attributable to demand pull-forward in the face of tariffs (about $18 million or $0.10-0.12 in EPS), the 15% gains in contract and the positive leading indicators speak to a general uptick in demand within contract that we have seen over the past several quarters as return-to-office continues to gain traction.

HNI Corporation: 2Q25 Adj. EPS of $1.11 Benefited from Margin Expansion, Growth

<ul><li>1QFY25 Adj EPS of $0.44 beat our estimate of $0.35 on better-than-expected revenues in both segments and continued margin strength.</li><li>HNI saw growth on the contract side of Workplace Furnishings, with revenue up 4% Y/Y, and in the renovation/retrofit side of Residential Building Products, with sales up 13% Y/Y.</li><li>These gains offset relative weakness in the traditionally more volatile SMB component of Workplace Furnishings, down 5% Y/Y, and in the new construction component of Residential Building Products, which was only up 3% Y/Y. </li></ul>

1QFY25 Adj EPS of $0.44 beat our estimate of $0.35 on better-than-expected revenues in both segments and continued margin strength.HNI saw growth on the contract side of Workplace Furnishings, with revenue up 4% Y/Y, and in the renovation/retrofit side of Residential Building Products, with sales up 13% Y/Y.These gains offset relative weakness in the traditionally more volatile SMB component of Workplace Furnishings, down 5% Y/Y, and in the new construction component of Residential Building Products, which was only up 3% Y/Y. 

HNI Corporation - Strong 1Q25; Productivity Gains; Strength in Contract

<ul><li>HNI reported strong 4Q24 margins despite continued revenue headwinds in both Workplace Furnishings (WF) and Residential Building Products (RBP), with adjusted EPS of $0.87 beating our estimate of $0.78 and consensus even as revenue came in lighter than our expectations in both segments.</li><li>See (1) for our summary of the quarter and our variance analysis below.</li><li>EPS should continue to grow through FY26, even on flat revenue, on the basis of (1) continued margin strength, and (2) KII and Mexico synergies delivering $0.70-0.80 EPS growth over the next two years.</li></ul>

HNI reported strong 4Q24 margins despite continued revenue headwinds in both Workplace Furnishings (WF) and Residential Building Products (RBP), with adjusted EPS of $0.87 beating our estimate of $0.78 and consensus even as revenue came in lighter than our expectations in both segments.See (1) for our summary of the quarter and our variance analysis below.EPS should continue to grow through FY26, even on flat revenue, on the basis of (1) continued margin strength, and (2) KII and Mexico synergies delivering $0.70-0.80 EPS growth over the next two years.

HNI Corporation - New Revenue, EPS Estimates...

United States

HNI Corporation manufactures and markets office furniture as well as hearth products. The Company's products are sold primarily through dealers, wholesalers, and retail superstores. HNI has operations in the United States and Canada.

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HNI Corp (HNI US)

HNI: 3Q25 EPS Upside; Workplace Leading Indicators Firming

HNI reported 3Q25 ongoing EPS of $1.10 versus $1.03 in 3Q24, up 6.8%, which was ahead of our $1.06 estimate, which was also consensus

Water Tower Research

HNI Corporation: SCS Acquisition Should Extend Double-Digit EPS Growth Run

Earlier this week, HNI announced a definitive agreement to acquire Steelcase, Inc. (SCS; $15.96; $1.83 billion market cap) for $7.20 in cash and...

Water Tower Research

HNI Corporation: 2Q25 Adj. EPS of $1.11 Benefited from Margin Expansion, Growth

2Q25 adjusted EPS of $1.11 came in significantly ahead of our estimate of $0.87 on solid growth in both segments despite ongoing macro headwinds...

Water Tower Research

HNI Corporation - Strong 1Q25; Productivity Gains; Strength in Contract

1QFY25 Adj EPS of $0.44 beat our estimate of $0.35 on better-than-expected revenues in both segments and continued margin strength.

Water Tower Research

HNI Corporation - New Revenue, EPS Estimates...

HNI reported strong 4Q24 margins despite continued revenue headwinds in both Workplace Furnishings (WF) and Residential Building Products (RBP)

Water Tower Research

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