HNI Corporation Announces Plant Consolidation

HNI Corporation (NYSE: HNI) announced today it will close its Hickory, North Carolina, manufacturing plant during the first half of 2025 and consolidate production into its other North American facilities.

HNI expects the consolidation to improve productivity and strengthen operations, without sacrificing capacity or creating disruption. Customers and trade partners will benefit from production efficiencies, coordinated delivery logistics, and rigorous quality assurance.

HNI will maintain a commercial presence in Hickory with its HBF brand of workplace furnishings and textile products. HBF’s brand headquarters will remain in Hickory as will its marketing, customer experience, product development, and product engineering members (employees).

“Closing a facility is a difficult decision and is not a reflection on the hard work and effort of the Hickory operations team. We are grateful for their dedication and will work to assist them through this transition.

“This is a strategic decision to optimize our operational footprint and improve business performance. We are announcing this several months in advance as part of our commitment to make the transition as smooth as possible. We will continue to grow our premium HBF business with our talented brand team in Hickory. This move will improve the customer experience for our trade partners and end-users, and more efficiently deliver on our commitments to safety, quality, lead-times, and reliability,” said Jeff Lorenger, HNI’s Chairman, President, and Chief Executive Officer.

Estimated Financial Impacts

• Cost savings. HNI estimates the consolidation will save approximately $11 million annually once fully mature in 2026. Savings realized in 2025 are expected to be $8 to $9 million.
• Savings are incremental to previously announced cost synergies from the acquisition of Kimball International, Inc. (“KII”). Moving Hickory production to HNI’s manufacturing centers of excellence was partially enabled by the strategic integration of KII, which HNI acquired in June 2023. Total cost synergies associated with the integration of KII now total an estimated $50 million, reflecting the previously announced $35 million, $11 million associated with the Hickory consolidation, and approximately $4 million of new cost synergies related to ongoing procurement efforts. In addition to these cost synergies, KII continues to be highly complementary from a product, market, and cultural perspective. KII’s brands strengthen HNI’s exposure to several important trends and markets, including ancillary products, secondary geographies, healthcare, and hospitality.
• Resulting charges. HNI anticipates charges resulting from the consolidation will impact pre-tax earnings by an estimated $10.3 million in 2024 and 2025, including $1.5 million of non-cash charges. The following table lists the estimated composition and timing of these charges:

(Dollars in millions)