x | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
An Iowa Corporation | 600 East Second Street | IRS Employer No. 42-0617510 | ||
P. O. Box 1109 | ||||
Muscatine, IA 52761-0071 | ||||
563/272-7400 |
Title of each class | Name of each exchange on which registered | |
Common Stock, with par value of $1.00 per share. | New York Stock Exchange |
Large accelerated filer | T | Accelerated filer | o |
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o |
PART I | ||
Page | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
• | diversion of management’s attention, including significant management time devoted to integrating acquisitions; |
• | difficulties in assimilating the operations and products of an acquired business or in realizing projected efficiencies, cost savings and revenue synergies; |
• | potential loss of key employees or customers of the acquired businesses or adverse effects on existing business relationships with suppliers and customers; |
• | adverse impact on overall profitability if acquired businesses do not achieve the financial results projected in our valuation models; |
• | reallocation of amounts of capital from other operating initiatives or an increase in our leverage and debt service requirements to pay the acquisition purchase prices, which could in turn restrict our ability to access additional capital when needed or to pursue other important elements of our business strategy; |
• | inaccurate assessment of undisclosed, contingent or other liabilities or problems and unanticipated costs associated with the acquisition; and |
• | incorrect estimates made in accounting for acquisitions, incurrence of non-recurring charges and write-off of significant amounts of goodwill that could adversely affect our financial results. |
• | social and political turmoil, official corruption and civil and labor unrest; |
• | restrictive government actions, including the imposition of trade quotas and tariffs and restrictions on transfers of funds; |
• | changes in labor laws and regulations affecting our ability to hire, retain or dismiss employees; |
• | the need to comply with multiple and potentially conflicting laws and regulations, including environmental and corporate laws and regulations; |
• | the failure of our compliance programs and internal training to prevent violations of the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws; |
• | preference for locally branded products and laws and business practices favoring local competition; |
• | less effective protection of intellectual property and increased possibility of loss due to cyber-theft; |
• | unfavorable business conditions or economic instability in any particular country or region; |
• | infrastructure disruptions; |
• | potentially conflicting cultural and business practices; |
• | difficulty in obtaining distribution and support; and |
• | Ability to repatriate cash held overseas without paying substantial federal income tax. |
• | Changes to border taxes or other international tax reforms |
• | increasing our administrative, compliance, and other costs; |
• | increasing our tax obligations, including unfavorable outcomes from audits performed by various tax authorities; |
• | affecting cash management practices and repatriation efforts; |
• | forcing us to alter or restructure our relationships with dealers and customers; and |
• | requiring us to implement additional or different programs and systems |
Location | Approximate Square Feet | Owned or Leased | Description of Use |
Cedartown, Georgia | 550,000 | Owned | Manufacturing office furniture (1) |
Dongguan, China | 1,007,716 | Owned | Manufacturing office furniture (1) |
Hickory, North Carolina | 206,316 | Owned | Manufacturing office furniture |
Lake City, Minnesota | 241,500 | Owned | Manufacturing fireplaces |
Mechanicsburg, Pennsylvania | 400,000 | Leased | Warehousing office furniture |
Mt. Pleasant, Iowa | 288,006 | Owned | Manufacturing fireplaces (1) |
Muscatine, Iowa | 272,900 | Owned | Manufacturing office furniture |
Muscatine, Iowa | 578,284 | Owned | Manufacturing office furniture (1) |
Muscatine, Iowa | 236,100 | Owned | Manufacturing office furniture |
Muscatine, Iowa | 636,250 | Owned | Manufacturing office furniture (1) |
Muscatine, Iowa | 237,800 | Owned | Manufacturing office furniture |
Nagpur, India | 355,135 | Owned | Manufacturing office furniture |
Orleans, Indiana | 1,196,946 | Owned | Manufacturing office furniture (1) |
Wayland, New York | 716,484 | Owned | Manufacturing office furniture (1) |
(1) | Also includes a regional warehouse/distribution center |
Name | Age | Family Relationship | Position | Position Held Since | Other Business Experience During Past Five Years |
Julie M. Abramowski | 41 | None | Vice President, Corporate Controller | 2015 | Director, Financial Reporting (2014-2015); Director, Financial Planning and Analysis, Leveraged Furniture Operations (2013-2014); Corporate Controller, The HON Company (2007-2013) |
Stan A. Askren | 56 | None | Chairman of the Board Chief Executive Officer President Director | 2004 2004 2003 2003 | |
Vincent P. Berger | 44 | None | President, Hearth & Home Technologies Group | 2016 | Senior Vice President, Sales and Operations, Hearth & Home Technologies Group (2014-2016); Senior Vice President, Operations, Hearth & Home Technologies Group (2011-2014) |
Steven M. Bradford | 59 | None | Senior Vice President, General Counsel and Secretary | 2015 | Vice President, General Counsel and Secretary (2008-2015) |
Marshall H. Bridges | 47 | None | Vice President and Chief Financial Officer | 2017 | Vice President, Finance, HNI Contract Furniture Group (2014-2017); Vice President, Finance, Allsteel (2010-2014) |
Jerald K. Dittmer | 59 | None | Executive Vice President, HNI Corporation; President, The HON Company LLC | 2008 2008 | |
Jeffrey D. Lorenger | 51 | None | Executive Vice President; HNI Corporation; President, HNI Contract Furniture Group | 2010 2014 | President, Allsteel, Inc. (2008-2014) |
Donald T. Mead* | 57 | None | Executive Vice President; HNI Corporation President, The Gunlocke Company L.L.C. | 2011 2008 | |
Donna D. Meade | 51 | None | Vice President, Member Relations | 2014 | Vice President, Member and Community Relations, Allsteel Inc. (2009-14) |
Kurt A. Tjaden | 53 | None | President, HNI International; Senior Vice President, HNI Corporation | 2017 2015 | Senior Vice President and Chief Financial Officer (2015-2017) Vice President and Chief Financial Officer (2008-2015) |
Period | (a) Total Number of Shares (or Units) Purchased (1) | (b) Average Price Paid per Share or Unit | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs | ||||||||
10/02/16 - 10/29/16 | — | — | — | $162,315,178 | ||||||||
10/30/16 - 11/26/16 | 96,650 | $49.99 | 96,650 | $157,483,908 | ||||||||
11/27/16 - 12/31/16 | 377,788 | $54.50 | 377,788 | $136,895,702 | ||||||||
Total | 474,438 | 474,438 |
• | Plan announced November 9, 2007, providing share repurchase authorization of $200,000,000 with no specific expiration date, with increase announced November 7, 2014, providing additional share repurchase authorization of $200,000,000 with no specific expiration date. |
• | No repurchase plans expired or were terminated during the fourth quarter of fiscal 2016, nor do any plans exist under which the Corporation does not intend to make further purchases. |
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Operating Results (Thousands of Dollars) | |||||||||||||||||||
Net Sales | $2,203,489 | $2,304,419 | $2,222,695 | $2,059,964 | $2,004,003 | ||||||||||||||
Gross Profit as a Percentage of Net Sales | 37.9 | % | 36.8 | % | 35.3 | % | 34.7 | % | 34.4 | % | |||||||||
Net Income Attributable to HNI Corporation | $85,577 | $105,436 | $61,471 | $63,683 | $48,967 | ||||||||||||||
Net Income Attributable to HNI Corporation as a Percentage of Net Sales | 3.9 | % | 4.6 | % | 2.8 | % | 3.1 | % | 2.4 | % | |||||||||
Share and Per Share Data (Basic and Dilutive) | |||||||||||||||||||
Net Income Attributable to HNI Corporation – basic | $1.93 | $2.38 | $1.37 | $1.41 | $1.08 | ||||||||||||||
Net Income Attributable to HNI Corporation – diluted | $1.88 | $2.32 | $1.35 | $1.39 | $1.07 | ||||||||||||||
Cash Dividends | $1.09 | $1.045 | $0.99 | $0.96 | $0.95 | ||||||||||||||
Weighted-Average Shares Outstanding During Year – basic (in Thousands) | 44,414 | 44,285 | 44,760 | 45,251 | 45,211 | ||||||||||||||
Weighted-Average Shares Outstanding During Year – diluted (in Thousands) | 45,502 | 45,441 | 45,579 | 45,956 | 45,820 | ||||||||||||||
Financial Position (Thousands of Dollars) | |||||||||||||||||||
Current Assets | $433,041 | $438,370 | $455,559 | $433,228 | $402,375 | ||||||||||||||
Current Liabilities | $463,473 | $435,900 | $457,333 | $411,584 | $389,171 | ||||||||||||||
Working Capital | ($30,432 | ) | $2,470 | ($1,774 | ) | $21,644 | $13,204 | ||||||||||||
Total Assets | $1,330,234 | $1,263,925 | $1,239,334 | $1,134,705 | $1,077,066 | ||||||||||||||
% Return on Beginning Assets Employed | 10.6 | % | 13.2 | % | 9.9 | % | 9.8 | % | 8.3 | % | |||||||||
Long-Term Debt and Capital Lease Obligations | $180,000 | $185,000 | $197,736 | $150,197 | $150,372 | ||||||||||||||
Shareholders’ Equity | $500,603 | $476,954 | $414,587 | $436,328 | $420,359 | ||||||||||||||
Percent Return on Average Shareholders’ Equity | 17.5 | % | 23.7 | % | 14.4 | % | 14.9 | % | 11.7 | % |
Fiscal | 2016 | 2015 | 2014 | |||||
Net Sales | 100.0 | % | 100.0 | % | 100.0 | % | ||
Cost of products sold | 62.1 | 63.2 | 64.7 | |||||
Gross profit | 37.9 | 36.8 | 35.3 | |||||
Selling and administrative expenses | 30.3 | 29.2 | 29.2 | |||||
(Gain) loss on sale of assets | 1.0 | — | (0.5 | ) | ||||
Restructuring related charges | 0.5 | 0.5 | 1.5 | |||||
Operating income | 6.1 | 7.1 | 5.1 | |||||
Interest expense net | 0.2 | 0.3 | 0.4 | |||||
Income before income taxes | 5.9 | 6.8 | 4.7 | |||||
Income taxes | 2.0 | 2.2 | 2.0 | |||||
Net income attributable to the non-controlling interest | — | — | — | |||||
Net income attributable to HNI Corporation | 3.9 | % | 4.6 | % | 2.8 | % |
• | a consolidated interest coverage ratio of not less than 4.0 to 1.0, based upon the ratio of (a) consolidated EBITDA (as defined in the Credit Agreement) for the last four fiscal quarters to (b) the sum of consolidated interest charges; and |
• | a consolidated leverage ratio of not greater than 3.5 to 1.0, based upon the ratio of (a) the quarter-end consolidated funded indebtedness (as defined in the Credit Agreement) to (b) consolidated EBITDA for the last four fiscal quarters. |
Payments Due by Period | |||||||||||||||||||
(In thousands) | Total | Less than 1 Year | 1 – 3 Years | 3 – 5 Years | More than 5 Years | ||||||||||||||
Long-term debt obligations, including estimated interest (1) | $227,861 | $37,871 | $6,480 | $183,510 | — | ||||||||||||||
Operating lease obligations | 94,626 | 27,671 | 35,458 | 17,962 | $ | 13,535 | |||||||||||||
Purchase obligations (2) | 51,405 | 51,405 | — | — | — | ||||||||||||||
Other long-term obligations (3) | 46,197 | 5,444 | 9,468 | 4,529 | 26,756 | ||||||||||||||
Total | $420,089 | $122,391 | $51,406 | $206,001 | $40,291 |
(1) | Interest has been included for all debt at the fixed or variable rate in effect as of December 31, 2016, as applicable. See "Note 10 Long-Term Debt" in the Notes to Consolidated Financial Statements for further information. The Corporation has classified $34 million of long-term debt as current because the Corporation expects, but is not required, to repay this portion of debt in 2017. |
(2) | Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including the quantity to be purchased, the price to be paid and the timing of the purchase. |
(3) | Other long-term obligations represent payments due to members who are participants in the Corporation’s deferred and long-term incentive compensation programs, liability for unrecognized tax liabilities and contribution and benefit payments expected to be made pursuant to the Corporation’s post-retirement benefit plans. It should be noted the obligations related to post-retirement benefit plans are not contractual and the plans could be amended at the discretion of the Corporation. The disclosure of contributions and benefit payments has been limited to 10 years, as information beyond this time period was not available. Other long term obligations of $34.3 million, primarily insurance reserves and long term warranty, are not included in the table above due to the Corporation's inability to predict their timing. |
Page | |
(b) | Exhibits |
Exhibit | |||
(21 | ) | Subsidiaries of the Registrant | |
(23.1 | ) | Consent of Independent Registered Public Accounting Firm (KPMG) | |
(23.2 | ) | Consent of Independent Registered Public Accounting Firm (PwC) | |
(31.1 | ) | Certification of the CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
(31.2 | ) | Certification of the CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
(32.1 | ) | Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101 | The following materials from HNI Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Comprehensive Income; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; and (iv) Notes to Consolidated Financial Statements |
HNI Corporation | |||
Date: | March 2, 2017 | By: | /s/ Stan A. Askren |
Stan A. Askren | |||
Chairman, President and CEO |
Signature | Title | Date | |
/s/ Stan A. Askren | Chairman, President and CEO, | March 2, 2017 | |
Stan A. Askren | Principal Executive Officer, and Director | ||
/s/ Marshall H. Bridges | Vice President and Chief Financial | March 2, 2017 | |
Marshall H. Bridges | Officer, Principal Financial Officer and | ||
Principal Accounting Officer | |||
* | Director | March 2, 2017 | |
Mary A. Bell | |||
* | Director | March 2, 2017 | |
Miguel M. Calado | |||
* | Director | March 2, 2017 | |
Cheryl A. Francis | |||
* | Director | March 2, 2017 | |
Mary K. W. Jones | |||
* | Director | March 2, 2017 | |
John R. Hartnett | |||
* | Director | March 2, 2017 | |
Larry B. Porcellato | |||
* | Lead Director | March 2, 2017 | |
Abbie J. Smith | |||
* | Director | March 2, 2017 | |
Brian E. Stern | |||
* | Director | March 2, 2017 | |
Ronald V. Waters, III | |||
* By: /s/ Stan. A. Askren | |||
Stan A. Askren, as attorney in fact |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of HNI Corporation; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of HNI Corporation are being made only in accordance with authorizations of management and directors of HNI Corporation; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the consolidated financial statements. |
(Amounts in thousands, except for per share data) | |||||||||||
For the Years | 2016 | 2015 | 2014 | ||||||||
Net sales | $ | 2,203,489 | $ | 2,304,419 | $ | 2,222,695 | |||||
Cost of sales | 1,368,476 | 1,457,021 | 1,438,495 | ||||||||
Gross profit | 835,013 | 847,398 | 784,200 | ||||||||
Selling and administrative expenses | 667,744 | 672,125 | 649,055 | ||||||||
(Gain) loss on sale of assets | 22,572 | (195 | ) | (10,723 | ) | ||||||
Restructuring and impairment charges | 11,005 | 11,792 | 33,019 | ||||||||
Operating income | 133,692 | 163,676 | 112,849 | ||||||||
Interest income | 305 | 395 | 418 | ||||||||
Interest expense | 5,086 | 6,901 | 8,336 | ||||||||
Income before income taxes | 128,911 | 157,170 | 104,931 | ||||||||
Income taxes | 43,273 | 51,764 | 43,776 | ||||||||
Net income | 85,638 | 105,406 | 61,155 | ||||||||
Less: Net income (loss) attributable to the non-controlling interest | 61 | (30 | ) | (316 | ) | ||||||
Net income attributable to HNI Corporation | $ | 85,577 | $ | 105,436 | $ | 61,471 | |||||
Net income attributable to HNI Corporation per common share – basic | $1.93 | $2.38 | $1.37 | ||||||||
Weighted average shares outstanding – basic | 44,413,941 | 44,285,298 | 44,759,716 | ||||||||
Net income attributable to HNI Corporation per common share – diluted | $1.88 | $2.32 | $1.35 | ||||||||
Weighted average shares outstanding – diluted | 45,502,219 | 45,440,653 | 45,578,872 | ||||||||
Foreign currency translation adjustments | $ | (1,510 | ) | $ | (1,901 | ) | $ | (691 | ) | ||
Change in unrealized gains and (losses) on marketable securities (net of tax) | (103 | ) | (39 | ) | (44 | ) | |||||
Change in pension and post-retirement liability (net of tax) | 339 | 1,256 | (4,622 | ) | |||||||
Change in derivative financial instruments (net of tax) | 1,460 | 873 | (983 | ) | |||||||
Other comprehensive income (loss) (net of tax) | $ | 186 | $ | 189 | $ | (6,340 | ) | ||||
Comprehensive income | 85,824 | 105,595 | 54,815 | ||||||||
Less: Comprehensive (loss) attributable to non-controlling interest | 61 | (30 | ) | (316 | ) | ||||||
Comprehensive income attributable to HNI Corporation | $ | 85,763 | $ | 105,625 | $ | 55,131 |
HNI CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of dollars and shares except par value) | |||||||
December 31, 2016 | January 2, 2016 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 36,312 | $ | 28,548 | |||
Short-term investments | 2,252 | 4,252 | |||||
Receivables | 229,436 | 243,409 | |||||
Inventories | 118,438 | 125,228 | |||||
Prepaid expenses and other current assets | 46,603 | 36,933 | |||||
Total Current Assets | 433,041 | 438,370 | |||||
PROPERTY, PLANT, AND EQUIPMENT | |||||||
Land and land improvements | 27,403 | 28,801 | |||||
Buildings | 283,930 | 298,516 | |||||
Machinery and equipment | 528,099 | 515,131 | |||||
Construction in progress | 51,343 | 31,986 | |||||
890,775 | 874,434 | ||||||
Less accumulated depreciation | 534,330 | 533,275 | |||||
Net Property, Plant, and Equipment | 356,445 | 341,159 | |||||
GOODWILL | 290,699 | 277,650 | |||||
DEFERRED INCOME TAXES | 719 | — | |||||
OTHER ASSETS | 249,330 | 206,746 | |||||
Total Assets | $ | 1,330,234 | $ | 1,263,925 |
HNI CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of dollars and shares except par value) | |||||||
December 31, 2016 | January 2, 2016 | ||||||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 425,046 | $ | 424,405 | |||
Current maturities of long-term debt | 34,017 | 5,477 | |||||
Current maturities of other long-term obligations | 4,410 | 6,018 | |||||
Total Current Liabilities | 463,473 | 435,900 | |||||
LONG-TERM DEBT | 180,000 | 185,000 | |||||
OTHER LONG-TERM LIABILITIES | 75,044 | 76,792 | |||||
DEFERRED INCOME TAXES | 110,708 | 88,934 | |||||
EQUITY | |||||||
HNI Corporation shareholders' equity: | |||||||
Capital Stock: | |||||||
Preferred stock - $1 par value, authorized 2,000 shares, no shares outstanding | — | — | |||||
Common stock - $1 par value, 200,000 shares, outstanding: | |||||||
December 31, 2016 - 44,079; | |||||||
January 2, 2016 - 44,158 | 44,079 | 44,158 | |||||
Additional paid-in capital | — | 4,407 | |||||
Retained earnings | 461,524 | 433,575 | |||||
Accumulated other comprehensive loss | (5,000 | ) | (5,186 | ) | |||
Total HNI Corporation shareholders’ equity | 500,603 | 476,954 | |||||
Non-controlling interest | 406 | 345 | |||||
Total Equity | 501,009 | 477,299 | |||||
Total Liabilities and Equity | $ | 1,330,234 | $ | 1,263,925 |
Parent Company Shareholders’ Equity | |||||||||||||||||||||||
(In thousands except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Non- controlling Interest | Total Shareholders’ Equity | |||||||||||||||||
Balance, December 28, 2013 | $44,982 | $16,729 | $373,652 | $965 | $89 | $436,417 | |||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income (loss) | — | — | 61,471 | — | (316 | ) | 61,155 | ||||||||||||||||
Other comprehensive income (net of tax) | — | — | — | (6,340 | ) | — | (6,340 | ) | |||||||||||||||
Distributions to non-controlling interest | — | — | — | — | (5 | ) | (5 | ) | |||||||||||||||
Change in ownership of non-controlling interest | — | — | (146 | ) | — | 146 | — | ||||||||||||||||
Cash dividends; $0.99 per share | — | — | (44,328 | ) | — | — | (44,328 | ) | |||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||
Shares purchased | (1,666 | ) | (50,522 | ) | (15,720 | ) | — | — | (67,908 | ) | |||||||||||||
Shares issued under Members’ Stock Purchase Plan and stock awards (net of tax) | 850 | 34,660 | — | — | — | 35,510 | |||||||||||||||||
Balance, January 3, 2015 | $44,166 | $867 | $374,929 | ($5,375 | ) | ($86 | ) | $414,501 | |||||||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income (loss) | — | — | 105,436 | — | (30 | ) | 105,406 | ||||||||||||||||
Other comprehensive (loss) (net of tax) | — | — | — | 189 | — | 189 | |||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | — | |||||||||||||||||
Change in ownership of non-controlling interest | — | — | (461 | ) | — | 461 | — | ||||||||||||||||
Cash dividends; $1.045 per share | — | — | (46,329 | ) | — | — | (46,329 | ) | |||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||
Shares purchased | (550 | ) | (26,107 | ) | — | — | — | (26,657 | ) | ||||||||||||||
Shares issued under Members’ Stock Purchase Plan and stock awards (net of tax) | 542 | 29,647 | — | — | — | 30,189 | |||||||||||||||||
Balance, January 2, 2016 | $44,158 | $4,407 | $433,575 | ($5,186 | ) | $345 | $477,299 | ||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||
Net income (loss) | — | — | 85,577 | — | 61 | 85,638 | |||||||||||||||||
Other comprehensive (loss) (net of tax) | — | — | — | 186 | — | 186 | |||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | — | |||||||||||||||||
Change in ownership of non-controlling interest | — | — | (89 | ) | — | — | (89 | ) | |||||||||||||||
Cash dividends; $1.09 per share | — | — | (48,495 | ) | — | — | (48,495 | ) | |||||||||||||||
Common shares – treasury: | |||||||||||||||||||||||
Shares purchased | (1,082 | ) | (45,699 | ) | (9,044 | ) | — | — | (55,825 | ) | |||||||||||||
Shares issued under Members’ Stock Purchase Plan and stock awards (net of tax) | 1,003 | 41,292 | — | — | — | 42,295 | |||||||||||||||||
Balance, December 31, 2016 | $44,079 | — | $461,524 | ($5,000 | ) | $406 | $501,009 |
For the Years | 2016 | 2015 | 2014 | ||||||||
Net Cash Flows From (To) Operating Activities: | |||||||||||
Net income | $ | 85,638 | $ | 105,406 | $ | 61,155 | |||||
Noncash items included in net income: | |||||||||||
Depreciation and amortization | 68,947 | 57,564 | 56,722 | ||||||||
Other post-retirement and post-employment benefits | 1,643 | 1,856 | 1,239 | ||||||||
Stock-based compensation | 8,141 | 9,097 | 8,597 | ||||||||
Excess tax benefits from stock compensation | (2,713 | ) | (1,581 | ) | (2,161 | ) | |||||
Deferred income taxes | 20,495 | 15,257 | 14,655 | ||||||||
(Gain) loss on sale, retirement and impairment of long-lived assets and intangibles, net | 28,868 | 12,463 | 19,055 | ||||||||
Other – net | 4,523 | (1,216 | ) | 4,693 | |||||||
Net increase (decrease) in operating assets and liabilities, net of acquisitions and divestitures | 17,430 | (28,075 | ) | 2,322 | |||||||
Increase (decrease) in other liabilities | (9,610 | ) | 2,581 | 1,519 | |||||||
Net cash flows from (to) operating activities | 223,362 | 173,352 | 167,796 | ||||||||
Net Cash Flows From (To) Investing Activities: | |||||||||||
Capital expenditures | (93,425 | ) | (82,610 | ) | (74,323 | ) | |||||
Proceeds from sale of property, plant and equipment | 1,055 | 2,201 | 16,361 | ||||||||
Capitalized software | (26,159 | ) | (32,356 | ) | (38,390 | ) | |||||
Acquisition spending, net of cash acquired | (34,302 | ) | — | (61,823 | ) | ||||||
Purchase of investments | (8,724 | ) | (3,660 | ) | (3,801 | ) | |||||
Sales or maturities of investments | 8,619 | 3,550 | 7,770 | ||||||||
Other – net | (90 | ) | — | (4 | ) | ||||||
Net cash flows from (to) investing activities | (153,026 | ) | (112,875 | ) | (154,210 | ) | |||||
Net Cash Flows From (To) Financing Activities: | |||||||||||
Proceeds from sale of HNI Corporation common stock | 21,596 | 12,276 | 18,469 | ||||||||
Withholding related to net share settlements of equity based awards | — | (171 | ) | (79 | ) | ||||||
Purchase of HNI Corporation common stock | (55,825 | ) | (26,657 | ) | (67,908 | ) | |||||
Proceeds from note and long-term debt | 611,986 | 448,449 | 282,808 | ||||||||
Payments of note and long-term debt and other financing | (594,547 | ) | (455,222 | ) | (235,595 | ) | |||||
Excess tax benefits from stock compensation | 2,713 | 1,581 | 2,161 | ||||||||
Dividends paid | (48,495 | ) | (46,329 | ) | (44,328 | ) | |||||
Net cash flows from (to) financing activities | (62,572 | ) | (66,073 | ) | (44,472 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 7,764 | (5,596 | ) | (30,886 | ) | ||||||
Cash and cash equivalents at beginning of year | 28,548 | 34,144 | 65,030 | ||||||||
Cash and cash equivalents at end of year | $ | 36,312 | $ | 28,548 | $ | 34,144 |
Year-End 2016 (In thousands) | Cash and cash equivalents | Short-term investments | Long-term investments | ||||||||
Available-for-sale securities | |||||||||||
Debt securities | — | $2,252 | $10,033 | ||||||||
Cash and money market accounts | $36,312 | — | — | ||||||||
Total | $36,312 | $2,252 | $10,033 |
Year-End 2015 (In thousands) | Cash and cash equivalents | Short-term investments | Long-term investments | ||||||||
Held-to-maturity securities | |||||||||||
Certificates of deposit | $ | — | $ | 252 | $ | — | |||||
Available-for-sale securities | |||||||||||
Debt securities | — | 4,000 | 8,067 | ||||||||
Cash and money market accounts | 28,548 | — | — | ||||||||
Total | $ | 28,548 | $ | 4,252 | $ | 8,067 |
Allowance for doubtful accounts | Balance at beginning of period | Charged to costs and expenses | Amounts written off, net of recoveries and other adjustments | Divestitures | Balance at end of period | |||||||||||
Year ended December 31, 2016 | $4,287 | (357 | ) | 1,598 | 192 | $2,140 | ||||||||||
Year ended January 2, 2016 | $5,096 | 1,394 | 2,203 | — | $4,287 | |||||||||||
Year ended January 3, 2015 | $6,208 | 343 | 1,455 | — | $5,096 |
(In thousands) | 2016 | 2015 | 2014 | ||||||||
Balance at the beginning of the period | $16,227 | $16,719 | $13,840 | ||||||||
Accrual assumed from acquisition | — | — | 1,100 | ||||||||
Accrual settled from divestiture | (538 | ) | — | — | |||||||
Accruals for warranties issued during the period | 20,055 | 19,995 | 18,951 | ||||||||
Accrual (Recovery) related to pre-existing warranties | 604 | (334 | ) | 172 | |||||||
Settlements made during the period | (21,098 | ) | (20,153 | ) | (17,344 | ) | |||||
Balance at the end of the period | $15,250 | $16,227 | $16,719 |
(In thousands, except per share data) | 2016 | 2015 | 2014 | ||||||||
Numerators: | |||||||||||
Numerators for both basic and diluted EPS net income attributable to parent company | $85,577 | $105,436 | $ | 61,471 | |||||||
Denominators: | |||||||||||
Denominator for basic EPS weighted- average common shares outstanding | 44,414 | 44,285 | 44,760 | ||||||||
Potentially dilutive shares from stock option plans | 1,088 | 1,156 | 819 | ||||||||
Denominator for diluted EPS | 45,502 | 45,441 | 45,579 | ||||||||
Earnings per share – basic | $1.93 | $2.38 | $1.37 | ||||||||
Earnings per share – diluted | $1.88 | $2.32 | $1.35 |
(In thousands) | Severance Costs | Facility Termination & Other Costs | Total | ||||||||
Restructuring reserve at December 28, 2013 | $49 | $6 | $55 | ||||||||
Restructuring charges | 2,933 | 705 | 3,638 | ||||||||
Cash payments | (1,769 | ) | (711 | ) | (2,480 | ) | |||||
Restructuring reserve at January 3, 2015 | $1,213 | — | $1,213 | ||||||||
Restructuring charges | (750 | ) | 1,255 | 505 | |||||||
Cash payments | (257 | ) | (1,240 | ) | (1,497 | ) | |||||
Restructuring reserve at January 2, 2016 | $206 | 15 | $221 | ||||||||
Restructuring charges | 3,883 | 1,346 | 5,229 | ||||||||
Cash Payments | (1,385 | ) | (1,361 | ) | (2,746 | ) | |||||
Restructuring reserve at December 31, 2016 | $2,704 | — | $2,704 |
(In thousands) | 2016 | 2015 | 2014 | ||||||||
Cash paid for: | |||||||||||
Interest paid (net of capitalized interest) | $6,644 | $7,066 | $8,301 | ||||||||
Income taxes paid | 23,120 | 28,252 | 36,637 | ||||||||
Changes in accrued expenses due to: | |||||||||||
Purchases of property and equipment | 3,599 | (327 | ) | 3,873 | |||||||
Purchases of capitalized software | 603 | (2,806 | ) | 2,183 |
(In thousands) | 2016 | 2015 | |||||
Finished products | $71,223 | $68,478 | |||||
Materials and work in process | 71,375 | 81,860 | |||||
LIFO reserve | (24,160 | ) | (25,110 | ) | |||
$118,438 | $125,228 |
(In thousands) | 2016 | 2015 | |||||
Land and land improvements | $27,403 | $28,801 | |||||
Buildings | 283,930 | 298,516 | |||||
Machinery and equipment | 528,099 | 515,131 | |||||
Construction and equipment installation in progress | 51,343 | 31,986 | |||||
890,775 | 874,434 | ||||||
Less: accumulated depreciation | 534,330 | 533,275 | |||||
$356,445 | $341,159 |
December 31, 2016 | January 2, 2016 | |||||||||||||||||||||||
(In thousands) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
Patents | $18,645 | $18,623 | $22 | $18,645 | $18,615 | $30 | ||||||||||||||||||
Software | 149,587 | 25,792 | 123,795 | 122,892 | 21,193 | 101,699 | ||||||||||||||||||
Trademarks and trade names | 7,564 | 1,401 | 6,163 | 6,564 | 753 | 5,811 | ||||||||||||||||||
Customer lists and other | 117,789 | 65,103 | 52,686 | 105,586 | 60,063 | 45,523 | ||||||||||||||||||
Net definite lived intangible assets | $293,585 | $110,919 | $182,666 | $253,687 | $100,624 | $153,063 |
(in millions) | 2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||||||
Amortization expense | $16.7 | $21.5 | $20.5 | $19.7 | $19.6 |
(In thousands) | Office Furniture | Hearth Products | Total | ||||||||
Balance as of January 3, 2015 | |||||||||||
Goodwill | $ | 149,713 | $ | 181,901 | $ | 331,614 | |||||
Accumulated impairment losses | (52,161 | ) | (143 | ) | (52,304 | ) | |||||
97,552 | 181,758 | 279,310 | |||||||||
Goodwill acquired during the year | — | — | — | ||||||||
Impairment losses | (2,963 | ) | — | (2,963 | ) | ||||||
Final purchase price allocations/contingent payments from prior year acquisitions | — | 1,298 | 1,298 | ||||||||
Foreign currency translation adjustment | 5 | — | 5 | ||||||||
Balance as of January 2, 2016 | |||||||||||
Goodwill | 149,718 | 183,199 | 332,917 | ||||||||
Accumulated impairment losses | (55,124 | ) | (143 | ) | (55,267 | ) | |||||
94,594 | 183,056 | 277,650 | |||||||||
Goodwill acquired during the year | 15,928 | — | 15,928 | ||||||||
Impairment losses | (2,876 | ) | — | (2,876 | ) | ||||||
Foreign currency translation adjustment | (3 | ) | — | (3 | ) | ||||||
Balance as of December 31, 2016 | |||||||||||
Goodwill | 165,643 | 183,199 | 348,842 | ||||||||
Accumulated impairment losses | (58,000 | ) | (143 | ) | (58,143 | ) | |||||
$ | 107,643 | $ | 183,056 | $ | 290,699 |
(In thousands) | 2016 | 2015 | |||||
Trade accounts payable | $201,810 | $197,579 | |||||
Compensation | 47,280 | 43,380 | |||||
Profit sharing and retirement expense | 32,335 | 29,089 | |||||
Marketing expenses | 41,963 | 35,969 | |||||
Freight | 14,251 | 16,384 | |||||
Other accrued expenses | 87,407 | 102,004 | |||||
$425,046 | $424,405 |
(In thousands) | 2016 | 2015 | |||||
Note payable to bank, revolving credit facility with interest at a variable rate (2016 - 1.8%; 2015 - 1.5%) | $214,000 | $40,300 | |||||
Senior notes paid off April 2016 with interest at a fixed rate of 5.54% per annum. | — | 150,000 | |||||
Other notes and amounts | 17 | 177 | |||||
Total debt | 214,017 | 190,477 | |||||
Less: current portion | 34,017 | 5,477 | |||||
Long-term debt | $180,000 | $185,000 |
Aggregate maturities of long-term debt are as follows: | |||
(In thousands) | |||
2017 | $34,017 | ||
2018 | — | ||
2019 | — | ||
2020 | — | ||
2021 | 180,000 | ||
Thereafter | — |
• | a consolidated interest coverage ratio of not less than 4.0 to 1.0, based upon the ratio of (a) consolidated EBITDA (as defined in the Credit Agreement) for the last four fiscal quarters to (b) the sum of consolidated interest charges; and |
• | a consolidated leverage ratio of not greater than 3.5 to 1.0, based upon the ratio of (a) the quarter-end consolidated funded indebtedness (as defined in the Credit Agreement) to (b) consolidated EBITDA for the last four fiscal quarters. |
(In thousands) | 2016 | 2015 | 2014 | ||||||||
Current: | |||||||||||
Federal | $18,963 | $27,768 | $22,738 | ||||||||
State | 3,740 | 5,258 | 4,623 | ||||||||
Foreign | 1,450 | 1,713 | 972 | ||||||||
Current provision | 24,153 | 34,739 | 28,333 | ||||||||
Deferred: | |||||||||||
Federal | 18,167 | 15,348 | 13,692 | ||||||||
State | 2,533 | 2,217 | 2,013 | ||||||||
Foreign | (1,580 | ) | (540 | ) | (262 | ) | |||||
Deferred provision | 19,120 | 17,025 | 15,443 | ||||||||
Total income tax expense | $43,273 | $51,764 | $43,776 |
2016 | 2015 | 2014 | |||||||||
Federal statutory tax expense | $45,098 | $55,020 | $36,836 | ||||||||
State taxes, net of federal tax effect | 3,874 | 4,269 | 4,118 | ||||||||
Credit for increasing research activities | (3,808 | ) | (3,320 | ) | (2,569 | ) | |||||
Deduction related to domestic production activities | (2,243 | ) | (3,320 | ) | (1,751 | ) | |||||
Valuation allowance | 231 | 565 | 2,474 | ||||||||
Goodwill Impairment | — | — | 4,298 | ||||||||
Change in uncertain tax positions | 117 | (1,344 | ) | 1,099 | |||||||
Other – net | 4 | (106 | ) | (729 | ) | ||||||
Total income tax expense | $43,273 | $51,764 | $43,776 |
(In thousands) | 2016 | 2015 | |||||
Deferred Taxes | |||||||
Allowance for doubtful accounts | $495 | $1,089 | |||||
Compensation | 16,684 | 15,491 | |||||
Inventory differences | 3,977 | 4,497 | |||||
Marketing accrual | 1,458 | 1,355 | |||||
Stock-based compensation | 11,607 | 11,923 | |||||
Accrued post-retirement benefit obligations | 10,106 | 9,851 | |||||
Vacation accrual | 4,153 | 4,181 | |||||
Warranty accrual | 5,725 | 6,052 | |||||
Other – net | 13,044 | 12,167 | |||||
Total deferred tax assets | $67,249 | $66,606 | |||||
Deferred income | (5,716 | ) | (4,907 | ) | |||
Goodwill and other intangible assets | (87,146 | ) | (79,471 | ) | |||
Prepaids | (9,271 | ) | (7,876 | ) | |||
Tax over book depreciation | (70,946 | ) | (59,308 | ) | |||
Total deferred tax liabilities | ($173,079 | ) | ($151,562 | ) | |||
Valuation allowance | (4,159 | ) | (3,978 | ) | |||
Total net deferred tax liabilities | ($109,989 | ) | ($88,934 | ) | |||
Long term net deferred tax assets | 719 | — | |||||
Long term net deferred tax liabilities | (110,708 | ) | (88,934 | ) | |||
Total net deferred tax liabilities | ($109,989 | ) | ($88,934 | ) |
Valuation allowance for deferred tax asset (in thousands) | Balance at beginning of period | Charged to expenses | Adjustments to balance sheet | Balance at end of period | |||||||||||
Year ended December 31, 2016 | $3,978 | 231 | ($50 | ) | $4,159 | ||||||||||
Year ended January 2, 2016 | $3,413 | 565 | — | $3,978 | |||||||||||
Year ended January 3, 2015 | $1,579 | $2,474 | ($640 | ) | $3,413 |
(in thousands) | 2016 | 2015 | |||||
Unrecognized tax benefits, beginning of period | $2,858 | $4,250 | |||||
Increases in positions taken in a prior period | 86 | 82 | |||||
Decreases in positions taken in a prior period | — | (1,611 | ) | ||||
New positions taken in a current period | 792 | 793 | |||||
Decrease due to settlements | (560 | ) | — | ||||
Decrease due to lapse of statute of limitations | (133 | ) | (656 | ) | |||
Unrecognized tax benefits, end of period | $3,043 | $2,858 |
(in thousands) | Fair value as of measurement date | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||
Government securities | $6,268 | — | $6,268 | — | |||||||||
Corporate bonds | $6,017 | — | $6,017 | — | |||||||||
Derivative financial instruments | $2,309 | — | $2,309 | — |
(in thousands) | Fair value as of measurement date | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | |||||||||
Government securities | $9,663 | — | $9,663 | — | |||||||||
Corporate bonds | $2,405 | — | $2,405 | — | |||||||||
Derivative financial instruments | ($1,252 | ) | — | ($1,252 | ) | — |
2016 | 2015 | |||
Common Stock, $1 Par Value | ||||
Authorized | 200,000,000 | 200,000,000 | ||
Issued and outstanding | 44,078,782 | 44,158,256 | ||
Preferred Stock, $1 Par Value | ||||
Authorized | 2,000,000 | 2,000,000 | ||
Issued and outstanding | — | — |
(in thousands) | Foreign Currency Translation Adjustment | Unrealized Gains Losses) on Marketable Securities | Pension and Post-retirement Liabilities | Derivative Financial Instruments | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at December 28, 2013 | $2,913 | $81 | ($2,140 | ) | $111 | $965 | |||||||||||||
Other comprehensive income before reclassifications | (690 | ) | (67 | ) | (7,280 | ) | (1,728 | ) | (9,765 | ) | |||||||||
Tax (expense) or benefit | — | 23 | 2,657 | 631 | 3,311 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | — | — | — | 114 | 114 | ||||||||||||||
Balance at January 3, 2015 | 2,223 | 37 | (6,763 | ) | (872 | ) | (5,375 | ) | |||||||||||
Other comprehensive income before reclassifications | (1,901 | ) | (60 | ) | 1,975 | (1,188 | ) | (1,174 | ) | ||||||||||
Tax (expense) or benefit | — | 21 | (718 | ) | 433 | (264 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | — | — | — | 1,627 | 1,627 | ||||||||||||||
Balance at January 2, 2016 | 322 | (2 | ) | (5,506 | ) | — | (5,186 | ) | |||||||||||
Other comprehensive income before reclassifications | (1,510 | ) | (158 | ) | 499 | 1,317 | 148 | ||||||||||||
Tax (expense) or benefit | — | 55 | (160 | ) | (485 | ) | (590 | ) | |||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | — | — | — | 628 | 628 | ||||||||||||||
Balance at December 31, 2016 | ($1,188 | ) | ($105 | ) | ($5,167 | ) | $1,460 | ($5,000 | ) |
Details about Accumulated Other Comprehensive Income Components | Affected Line Item in the Statement Where Net Income is Presented | 2016 | 2015 | ||||||
Derivative financial instruments | |||||||||
Interest rate swap | Interest income or (expense) | ($993 | ) | — | |||||
Tax (expense) or benefit | 365 | — | |||||||
Net of Tax | ($628 | ) | — | ||||||
Diesel hedge | Selling and administrative expenses | — | ($2,562 | ) | |||||
Tax (expense) or benefit | — | 935 | |||||||
Net of tax | — | ($1,627 | ) | ||||||
Net | ($628 | ) | ($1,627 | ) |
(In dollars) | 2016 | 2015 | 2014 | ||||||
Common shares | $1.090 | $1.045 | $0.990 |
Year Ended Dec 31, 2016 | Year Ended Jan 2, 2016 | Year Ended Jan 3, 2015 | ||||||
Expected term | 6 years | 6 years | 5 years | |||||
Expected volatility: | ||||||||
Weighted-average | 38.96 | % | 43.54 | % | 42.49 | % | ||
Expected dividend yield: | ||||||||
Weighted-average | 3.30 | % | 1.94 | % | 2.76 | % | ||
Risk-free interest rate: | ||||||||
Range used | 1.41 | % | 1.69 | % | 1.54 | % |
Number of Shares | Weighted-Average Exercise Price | |||||
Outstanding at December 28, 2013 | 3,630,567 | $29.94 | ||||
Granted | 536,275 | 34.78 | ||||
Exercised | (542,837 | ) | 28.53 | |||
Forfeited or Expired | (288,560 | ) | 38.55 | |||
Outstanding at January 3, 2015 | 3,335,445 | $29.93 | ||||
Granted | 350,038 | 51.54 | ||||
Exercised | (302,635 | ) | 30.22 | |||
Forfeited or Expired | (24,525 | ) | 39.14 | |||
Outstanding at January 2, 2016 | 3,358,323 | $32.09 | ||||
Granted | 877,277 | 32.18 | ||||
Exercised | (609,663 | ) | 30.52 | |||
Forfeited or Expired | (121,602 | ) | 52.24 | |||
Outstanding at December 31, 2016 | 3,504,335 | $31.68 |
Non-vested Stock Options | Shares | Weighted-Average Grant-Date Fair Value | ||||
Non-vested at January 2, 2016 | 2,138,724 | $11.18 | ||||
Granted | 877,277 | 8.80 | ||||
Vested | (820,915 | ) | 8.78 | |||
Forfeited | (32,929 | ) | 11.74 | |||
Non-vested at December 31, 2016 | 2,162,157 | $11.12 |
Options | Number | Weighted-Average Exercise Price | Weighted-Average Remaining Life in Years | Aggregate Intrinsic Value ($000s) | ||||||||
Expected to vest | 2,049,938 | $35.48 | 7.7 | $41,893 | ||||||||
Exercisable | 1,342,178 | $25.50 | 4.0 | $40,827 |
(In thousands) | Dec. 31, 2016 | Jan. 2, 2016 | Jan. 3, 2015 | ||||||||
Total fair value of shares vested | $7,206 | $5,554 | $5,735 | ||||||||
Total intrinsic value of options exercised | 11,985 | 6,412 | 8,389 | ||||||||
Cash received from exercise of stock options | 18,609 | 9,145 | 15,489 | ||||||||
Tax benefit realized from exercise of stock options | 4,142 | 2,111 | 2,982 |
Number of Shares | Weighted-Average Grant Date Fair Value | |||||
Outstanding at December 28, 2013 | 24,526 | $23.01 | ||||
Granted | 15,500 | 32.23 | ||||
Vested | (14,000 | ) | 21.47 | |||
Forfeited | — | — | ||||
Outstanding at January 3, 2015 | 26,026 | $27.76 | ||||
Granted | 23,000 | 51.54 | ||||
Vested | (10,526 | ) | 21.19 | |||
Forfeited | — | — | ||||
Outstanding at January 2, 2016 | 38,500 | $43.77 | ||||
Granted | 25,000 | 32.06 | ||||
Vested | — | — | ||||
Forfeited | (3,000 | ) | 51.54 | |||
Outstanding at December 31, 2016 | 60,500 | $38.54 |
(In thousands) | 2016 | 2015 | |||||
Change in benefit obligation | |||||||
Benefit obligation at beginning of year | $20,884 | $21,972 | |||||
Service cost | 735 | 803 | |||||
Interest cost | 846 | 816 | |||||
Benefits paid | (1,017 | ) | (1,009 | ) | |||
Actuarial (gain)/loss | (295 | ) | (1,698 | ) | |||
Benefit obligation at end of year | $21,153 | $20,884 | |||||
Change in plan assets | |||||||
Fair value at beginning of year | — | — | |||||
Actual return on assets | — | — | |||||
Employer contribution | 1,017 | 1,009 | |||||
Transferred out | — | — | |||||
Benefits paid | (1,017 | ) | (1,009 | ) | |||
Fair value at end of year | — | — | |||||
Funded Status of Plan | ($21,153 | ) | ($20,884 | ) | |||
Amounts recognized in the Statement of Financial Position consist of: | |||||||
Current liabilities | $1,034 | $1,014 | |||||
Noncurrent liabilities | $20,119 | $19,870 | |||||
Amounts recognized in Accumulated Other Comprehensive Income (before tax) consist of: | |||||||
Actuarial (gain)/loss | $2,373 | $2,730 | |||||
Change in Accumulated Other Comprehensive Income (before tax): | |||||||
Amount disclosed at beginning of year | $2,730 | $4,665 | |||||
Actuarial (gain)/loss | (295 | ) | (1,698 | ) | |||
Amortization of transition amount | (62 | ) | (237 | ) | |||
Amount disclosed at end of year | $2,373 | $2,730 |
Estimated Future Benefit Payments (In thousands) | |||
Fiscal 2017 | $ | 1,034 | |
Fiscal 2018 | 1,025 | ||
Fiscal 2019 | 1,036 | ||
Fiscal 2020 | 1,060 | ||
Fiscal 2021 | 1,083 | ||
Fiscal 2022 – 2026 | 6,013 | ||
Expected Contributions During Fiscal 2017 | |||
Total | $ | 1,034 |
Components of Net Periodic Post-Retirement Benefit Cost (in thousands) | 2017 | ||
Service cost | $ | 742 | |
Interest cost | 825 | ||
Amortization of net (gain)/loss | 25 | ||
Net periodic post-retirement benefit cost/(income) | $ | 1,592 |
(In thousands) | Operating Leases | |||
2017 | $27,671 | |||
2018 | 20,678 | |||
2019 | 14,780 | |||
2020 | 10,149 | |||
2021 | 7,813 | |||
Thereafter | 13,535 | |||
Total minimum lease payments | $94,626 |
(In thousands) | 2016 | 2015 | 2014 | ||||||||
Net sales: | |||||||||||
Office furniture | $ | 1,703,885 | $ | 1,777,804 | $ | 1,739,049 | |||||
Hearth products | 499,604 | 526,615 | 483,646 | ||||||||
$ | 2,203,489 | $ | 2,304,419 | $ | 2,222,695 | ||||||
Operating profit: | |||||||||||
Office furniture (a) | $ | 117,397 | $ | 136,593 | $ | 87,053 | |||||
Hearth products (b) | 69,960 | 78,162 | 77,066 | ||||||||
Total operating profit | 187,357 | 214,755 | 164,119 | ||||||||
Unallocated corporate expenses | (58,446 | ) | (57,585 | ) | (59,188 | ) | |||||
Income (loss) before income taxes | $ | 128,911 | $ | 157,170 | $ | 104,931 | |||||
Depreciation and amortization expense: | |||||||||||
Office furniture | $ | 45,088 | $ | 42,415 | $ | 45,891 | |||||
Hearth products | 12,486 | 8,430 | 5,415 | ||||||||
General corporate | 11,373 | 6,719 | 5,416 | ||||||||
$ | 68,947 | $ | 57,564 | $ | 56,722 | ||||||
Capital expenditures (including capitalized software): | |||||||||||
Office furniture | $ | 65,944 | $ | 64,850 | $ | 62,696 | |||||
Hearth products | 11,217 | 11,078 | 6,342 | ||||||||
General corporate | 42,423 | 39,038 | 43,675 | ||||||||
$ | 119,584 | $ | 114,966 | $ | 112,713 | ||||||
Identifiable assets: | |||||||||||
Office furniture | $ | 749,145 | $ | 739,915 | $ | 724,293 | |||||
Hearth products | 340,494 | 341,813 | 341,315 | ||||||||
General corporate | 240,595 | 182,197 | 173,726 | ||||||||
$ | 1,330,234 | $ | 1,263,925 | $ | 1,239,334 |
(a) | Included in operating profit for the office furniture segment are pretax charges of $10.9 million, $11.6 million and $38.2 million, for closing of facilities and impairment charges in 2016, 2015 and 2014, respectively. |
(b) | Included in operating profit for the hearth products segment are pretax charges of $5.5 million for closing a facility in 2016 and $0.9 million related to exiting a line of business in 2015. |
(in thousands) | 2016 | 2015 | 2014 | ||||||||
Systems and storage | $904,748 | $1,140,369 | $1,156,170 | ||||||||
Seating | 707,609 | 561,392 | 498,389 | ||||||||
Other | 91,528 | 76,043 | 84,490 | ||||||||
Hearth products | 499,604 | 526,615 | 483,646 | ||||||||
$2,203,489 | $2,304,419 | $2,222,695 |
Year-End 2016: (In thousands, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Net sales | $ | 501,037 | $ | 536,538 | $ | 584,629 | $ | 581,285 | |||||||
Cost of products sold | 315,326 | 327,618 | 363,075 | 362,457 | |||||||||||
Gross profit | 185,711 | 208,920 | 221,554 | 218,828 | |||||||||||
Selling and administrative expenses | 165,106 | 162,320 | 169,535 | 170,783 | |||||||||||
(Gain) loss on sale of assets | — | (1 | ) | (40 | ) | 22,613 | |||||||||
Restructuring and impairment charges | 1,086 | 572 | 399 | 8,948 | |||||||||||
Operating income (loss) | 19,519 | 46,029 | 51,660 | 16,484 | |||||||||||
Interest income (expense) – net | (1,796 | ) | (1,068 | ) | (1,011 | ) | (906 | ) | |||||||
Income (loss) before income taxes | 17,723 | 44,961 | 50,649 | 15,578 | |||||||||||
Income taxes | 5,881 | 15,934 | 16,837 | 4,621 | |||||||||||
Net income (loss) | 11,842 | 29,027 | 33,812 | 10,957 | |||||||||||
Less: net income attributable to the non-controlling interest | (1 | ) | (2 | ) | (1 | ) | 65 | ||||||||
Net income (loss) attributable to HNI Corporation | $ | 11,843 | $ | 29,029 | $ | 33,813 | $ | 10,892 | |||||||
Net income (loss) attributable to HNI Corporation per common share – basic | $0.27 | $0.65 | $0.76 | $0.25 | |||||||||||
Weighted-average common shares outstanding – basic | 44,258 | 44,431 | 44,547 | 44,419 | |||||||||||
Net income (loss) attributable to HNI Corporation per common share – diluted | $0.26 | $0.64 | $0.74 | $0.24 | |||||||||||
Weighted-average common shares outstanding – diluted | 45,040 | 45,632 | 45,845 | 45,588 | |||||||||||
As a Percentage of Net Sales | |||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Gross profit | 37.1 | 38.9 | 37.9 | 37.6 | |||||||||||
Selling and administrative expenses | 33.0 | 30.3 | 29.0 | 29.4 | |||||||||||
(Gain) loss on sale of assets | — | — | — | 3.9 | |||||||||||
Restructuring and impairment charges | 0.2 | 0.1 | 0.1 | 1.5 | |||||||||||
Operating income (loss) | 3.9 | 8.6 | 8.8 | 2.8 | |||||||||||
Income taxes | 1.2 | 3.0 | 2.9 | 0.8 | |||||||||||
Net income (loss) attributable to HNI Corporation | 2.4 | 5.4 | 5.8 | 1.9 |
Year-End 2015: (In thousands, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Net sales | $ | 523,477 | $ | 568,226 | $ | 615,850 | $ | 596,866 | |||||||
Cost of products sold | 338,977 | 362,102 | 384,219 | 371,723 | |||||||||||
Gross profit | 184,500 | 206,124 | 231,631 | 225,143 | |||||||||||
Selling and administrative expenses | 168,704 | 167,278 | 170,371 | 165,772 | |||||||||||
(Gain) on sale of assets | — | — | — | (195 | ) | ||||||||||
Restructuring and impairment charges (income) | 377 | (560 | ) | 172 | 11,803 | ||||||||||
Operating income (loss) | 15,419 | 39,406 | 61,088 | 47,763 | |||||||||||
Interest income (expense) – net | (1,899 | ) | (1,849 | ) | (1,623 | ) | (1,135 | ) | |||||||
Income (loss) before income taxes | 13,520 | 37,557 | 59,465 | 46,628 | |||||||||||
Income taxes | 5,068 | 13,680 | 18,619 | 14,397 | |||||||||||
Net income (loss) | 8,452 | 23,877 | 40,846 | 32,231 | |||||||||||
Less: net income attributable to the non-controlling interest | (26 | ) | (2 | ) | (2 | ) | — | ||||||||
Net income (loss) attributable to HNI Corporation | $ | 8,478 | $ | 23,879 | $ | 40,848 | $ | 32,231 | |||||||
Net income (loss) attributable to HNI Corporation per common share – basic | $ | 0.19 | $ | 0.54 | $ | 0.92 | $ | 0.73 | |||||||
Weighted-average common shares outstanding – basic | 44,304 | 44,416 | 44,263 | 44,158 | |||||||||||
Net income (loss) attributable to HNI Corporation per common share – diluted | $ | 0.19 | $ | 0.52 | $ | 0.90 | $ | 0.71 | |||||||
Weighted-average common shares outstanding – diluted | 45,524 | 45,621 | 45,403 | 45,199 | |||||||||||
As a Percentage of Net Sales | |||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Gross profit | 35.2 | 36.3 | 37.6 | 37.7 | |||||||||||
Selling and administrative expenses | 32.2 | 29.4 | 27.7 | 27.8 | |||||||||||
(Gain) on sale of assets | — | — | — | — | |||||||||||
Restructuring and impairment charges | 0.1 | (0.1 | ) | — | 2.0 | ||||||||||
Operating income (loss) | 2.9 | 6.9 | 9.9 | 8.0 | |||||||||||
Income taxes | 1.0 | 2.4 | 3.0 | 2.4 | |||||||||||
Net income (loss) attributable to HNI Corporation | 1.6 | 4.2 | 6.6 | 5.4 |
2016 by Quarter | High | Low | Dividends per Share | ||||||||
1st | $39.59 | $29.84 | $0.265 | ||||||||
2nd | 48.50 | 38.30 | 0.275 | ||||||||
3rd | 56.96 | 39.30 | 0.275 | ||||||||
4th | 56.91 | 37.24 | 0.275 | ||||||||
Total Dividends Paid | $1.090 | ||||||||||
2015 by Quarter | High | Low | Dividends per Share | ||||||||
1st | $56.47 | $38.01 | $0.250 | ||||||||
2nd | 57.74 | 46.19 | 0.265 | ||||||||
3rd | 52.52 | 41.29 | 0.265 | ||||||||
4th | 47.68 | 35.53 | 0.265 | ||||||||
Total Dividends Paid | $1.045 | ||||||||||
2014 by Quarter | High | Low | Dividends per Share | ||||||||
1st | $39.42 | $31.00 | $0.240 | ||||||||
2nd | 39.29 | 31.61 | 0.250 | ||||||||
3rd | 40.43 | 34.62 | 0.250 | ||||||||
4th | 52.90 | 34.75 | 0.250 | ||||||||
Total Dividends Paid | $0.990 |
Market Price | Diluted Earnings per Share | Price/Earnings Ratio | |||||||||||
Year | High | Low | High | Low | |||||||||
2016 | $56.96 | $29.84 | $1.88 | 30 | 16 | ||||||||
2015 | 57.74 | 35.53 | 2.32 | 25 | 15 | ||||||||
2014 | 52.90 | 31.00 | 1.35 | 39 | 23 | ||||||||
2013 | 40.73 | 28.28 | 1.39 | 29 | 20 | ||||||||
2012 | 32.02 | 21.57 | 1.07 | 30 | 20 | ||||||||
Five-Year Average | 31 | 19 |
Exhibit Number | Description of Document | ||
(3.1 | ) | Articles of Incorporation of HNI Corporation, as amended, incorporated by reference to Exhibit 3.1 to the Registrant's Annual Report on Form 10-K for the year ended January 2, 2010 | |
(3.2 | ) | Amended and restated By-laws of HNI Corporation, as amended, incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on August 9, 2016 | |
(10.1 | ) | HNI Corporation 2007 Stock-Based Compensation Plan, as amended (incorporated by reference to Appendix A to the Corporation's Definitive Proxy Statement filed with the SEC March 23, 2015)* | |
(10.2 | ) | 2007 Equity Plan for Non-Employee Directors of HNI Corporation, as amended (incorporated by reference to Appendix D to the Corporation’s Definitive Proxy Statement filed with the SEC March 23, 2015)* | |
(10.3 | ) | Form of HNI Corporation Change In Control Employment Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 16, 2006* | |
(10.4 | ) | Form of HNI Corporation Amendment No. 1 to Change in Control Employment Agreement incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed August 10, 2007* | |
(10.5 | ) | Form of HNI Corporation Change In Control Employment Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed January 19, 2017* | |
(10.6 | ) | HNI Corporation Supplemental Income Plan (f/k/a HNI Corporation ERISA Supplemental Retirement Plan), as amended and restated, incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed February 22, 2010* | |
(10.7 | ) | Form of HNI Corporation Amended and Restated Indemnity Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 14, 2007* | |
(10.8 | ) | Form of 2007 Equity Plan For Non-Employee Directors of HNI Corporation Participation Agreement, incorporated by reference to Exhibit 10.26 to the Registrant's Annual Report on Form 10-K for the year ended January 2, 2010* | |
(10.9 | ) | Form of HNI Corporation 2007 Stock-Based Compensation Plan Stock Option Award Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 4, 2009* | |
(10.10 | ) | Second Amended and Restated Credit Agreement, including all schedules and exhibits, dated as of June 9, 2015, by and among HNI Corporation, as Borrower, certain domestic subsidiaries of HNI Corporation, as Guarantors, certain lenders party thereto and Wells Fargo Bank, National Association, as Administrative Agent, incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed June 12, 2015 | |
(10.11 | ) | First Amendment to Second Amended and Restated Credit Agreement, dated as of January 6, 2016, incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed January 11, 2016 | |
(10.12 | ) | HNI Corporation Long-Term Performance Plan, as amended (incorporated by reference to Appendix C to the Corporation’s Definitive Proxy Statement filed with the SEC March 23, 2015)* | |
(10.13 | ) | HNI Corporation Executive Deferred Compensation Plan, as amended, incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 4, 2015* | |
(10.14 | ) | HNI Corporation Directors Deferred Compensation Plan, as amended, incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended July 4, 2015* | |
(10.15 | ) | HNI Corporation Stock-Based Compensation Plan, as amended, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006* | |
(10.16 | ) | Form of HNI Corporation 2007 Stock-Based Compensation Plan Restricted Stock Unit Award Agreement, incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended April 4, 2009 (for restricted stock unit awards granted in 2009)* |
Exhibit Number | Description of Document | ||
(10.17 | ) | HNI Corporation Stock-Based Compensation Plan, as amended, incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006* | |
(10.18 | ) | Form of Exercise of Stock Option granted under the HNI Corporation Stock-Based Compensation Plan, incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2008* | |
(10.19 | ) | Form of HNI Corporation Stock-Based Compensation Plan Stock Option Award Agreement, incorporated by reference to Exhibit 99D to the Registrant’s Current Report on Form 8-K filed February 22, 2005* | |
(10.20 | ) | Form of HNI Corporation 2007 Stock-Based Compensation Plan Restricted Stock Unit Award Agreement, incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 3, 2010 (for restricted stock unit awards granted in 2010)* | |
(10.21 | ) | Form of HNI Corporation Executive Deferred Compensation Plan Deferral Election Agreement, incorporated by reference to Exhibit 10.25 to the Registrant's Annual Report on Form 10-K for the year ended January 2, 2010* | |
(10.22 | ) | Form of HNI Corporation Directors Deferred Compensation Plan Deferral Election Agreement, incorporated by reference to Exhibit 10.6 to the Registrant's Annual Report on Form 10-K for the year ended January 2, 2010* | |
(21 | ) | Subsidiaries of the Registrant+ | |
(23.1 | ) | Consent of Independent Registered Public Accounting Firm+ (KPMG) | |
(23.2 | ) | Consent of Independent Registered Public Accounting Firm+ (PwC) | |
(31.1 | ) | Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002+ | |
(31.2 | ) | Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002+ | |
(32.1 | ) | Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002+ | |
101 | The following materials from HNI Corporation's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Comprehensive Income; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements |
* | Indicates management contract or compensatory plan. |
+ | Filed herewith. |
Subsidiary | Country/State of Incorporation | Doing Business As |
Allsteel Inc. | Illinois | Allsteel Inc.; HNI One |
Maxon Furniture Inc. | Iowa | Maxon Furniture Inc. |
The Gunlocke Company L.L.C. | Iowa | The Gunlocke Company L.L.C. |
Hearth & Home Technologies LLC | Iowa | Hearth & Home Technologies |
HNI Asia L.L.C. | Iowa | HNI Asia L.L.C. |
HFM Partners | Iowa | HFM Partners |
HNI Services LLC | Iowa | HNI Services LLC |
The HON Company LLC | Iowa | The HON Company LLC |
HON INDUSTRIES (Canada) Inc. | Canada | HON INDUSTRIES (Canada) Inc. |
HNI International Inc. | Iowa | HNI International Inc. |
HNI International (Mexico) L.L.C. | Iowa | HNI International (Mexico) L.L.C. |
HNI Middle East DMCC | Dubai | HNI Middle East DMCC |
HNI Technologies Inc. | Iowa | HNI Technologies Inc. |
HNI Holdings Inc. | Iowa | HNI Holdings Inc. |
Pearl City Insurance Company | Vermont | Pearl City Insurance Company |
HON Internacional de Mexico S.de R.L.de C.V. | Mexico | HON Internacional de Mexico S.de R.L.de C.V. |
HON Internacional Servicios de Mexico, S.de R.L. de C.V. | Mexico | HON Internacional Servicios de Mexico, S.de R.L. de C.V. |
Paoli LLC | Iowa | Paoli LLC |
HHT L.L.C. | Washington | HHT L.L.C. |
HNI International (Puerto Rico) L.L.C. | Iowa | HNI International (Puerto Rico) L.L.C. |
Hickory Business Furniture, LLC | North Carolina | Hickory Business Furniture, LLC |
Commercial Office Interiors LLC | Delaware | Commercial Office Interiors LLC |
Contract Resource Group LLC | Delaware | Contract Resource Group LLC |
Wilson Office Interiors LLC | Delaware | Wilson Office Interiors LLC |
Connect People & Space LLC | Delaware | Connect People & Space LLC |
Subsidiary | Country/State of Incorporation | Doing Business As |
IAW LLC | Delaware | IAW LLC; Ivan Allen Workspace |
Amovo Workplace Environments Inc. | Canada | Amovo Workplace Environments Inc. |
HNI Asia Technology Services (Shenzhen) Limited | PRC | HNI Asia Technology Services (Shenzhen) Limited |
HNI Hong Kong Limited | Hong Kong | HNI Hong Kong Limited |
Dongguan Lamex Furniture Co. Ltd. | PRC | Dongguan Lamex Furniture Co. Ltd. |
Global Known Ltd. | Hong Kong | Global Known Ltd. |
Lamex Trading Co. Ltd. | Hong Kong | Lamex Trading Co. Ltd. |
Lamex China Investment Ltd. | Hong Kong | Lamex China Investment Ltd. |
Sagus International, Inc. | Delaware | Sagus International, Inc. |
ADMC, Inc. | Texas | ADMC, Inc. |
Midwest Folding Products Corp. | Delaware | Midwest Folding Products Corp. |
HBF Asia Pacific Limited | Hong Kong | HBF Asia Pacific Limited |
HNI Singapore Private Limited | Singapore | HNI Singapore Private Limited |
BP Ergo Limited | India | BP Ergo Limited |
Monessen Holding Company LLC | Delaware | Monessen Holding Company LLC |
Monessen Hearth Systems Company, LLC | Kentucky | Monessen Hearth Systems Company, LLC; Vermont Castings Group |
Monessen Hearth Canada, Inc. | Canada | Monessen Hearth Canada, Inc. |
OFM, LLC | Delaware | OFM, LLC; Essentials by OFM |
Delve Interiors, LLC | Delaware | Delve Interiors, LLC |
Interior Construction Services, LLC | Minnesota | Interior Construction Services, LLC |
Date: March 2, 2017 | By: | /s/ Stan A. Askren |
Name: Stan A. Askren | ||
Title: Chairman, President and Chief Executive Officer |
Date: March 2, 2017 | By: | /s/ Marshall H. Bridges |
Name: Marshall H. Bridges | ||
Title: Vice President and Chief Financial Officer |
By: | /s/ Stan A. Askren | ||
Name: Stan A. Askren | |||
Title: Chairman, President and Chief Executive Officer | |||
Date: March 2, 2017 |
By: | /s/ Marshall H. Bridges | ||
Name: Marshall H. Bridges | |||
Title: Vice President and Chief Financial Officer | |||
Date: March 2, 2017 |
Document and Entity Information Document - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Feb. 03, 2017 |
Jul. 02, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HNI CORP | ||
Entity Central Index Key | 0000048287 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Share Outstanding | 43,983,489 | ||
Trading Symbol | HNI | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,697,789,756 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (shares) | 2,000,000 | 2,000,000 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 |
Common stock, shares outstanding (shares) | 44,078,782 | 44,158,256 |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends per share (dollars per share) | $ 1.09 | $ 1.045 | $ 0.99 |
Nature of Operations |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations HNI Corporation with its subsidiaries (the “Corporation”) is a provider of office furniture and hearth products. Both industries are reportable segments; however, the Corporation’s office furniture business is its principal line of business. Refer to Reportable Segment Information for further information. Office furniture products include panel-based and freestanding furniture systems seating, storage and tables. These products are sold primarily through a national system of dealers, wholesalers and office product distributors but also directly to end-user customers and federal, state and local governments. Hearth products include a full array of gas, wood and pellet burning fireplaces, inserts, stoves, facings and accessories. These products are sold through a national system of dealers and distributors, as well as Corporation-owned distribution and retail outlets. The Corporation’s products are marketed predominantly in the United States and Canada. The Corporation exports select products through its export subsidiary to a limited number of markets outside North America, principally the Middle East, Mexico, Latin America and the Caribbean. The Corporation also manufactures and markets office furniture in Asia and India. Activities outside the United States and Canada, as a percent of sales, are insignificant. Fiscal year-end – The Corporation follows a 52/53-week fiscal year which ends on the Saturday nearest December 31. Fiscal year 2016 ended on December 31, 2016; 2015 ended on January 2, 2016; and 2014 ended on January 3, 2015. The financial statements for fiscal years 2016 and 2015 are on a 52-week basis. The financial statements for fiscal year 2014 are on a 53-week basis. A 53-week year occurs approximately every sixth year. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts and transactions of the Corporation and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Cash, Cash Equivalents and Investments Cash and cash equivalents generally consist of cash and money market accounts. The fair value approximates the carrying value due to the short duration of the securities. These securities have original maturity dates not exceeding three months. The Corporation has short-term investments with maturities of less than one year and also has investments with maturities greater than one year included in Other Assets on the Consolidated Balance Sheets. Management classifies investments in marketable securities at the time of purchase and reevaluates such classification at each balance sheet date. Debt securities including government and corporate bonds are classified as available-for-sale and stated at current market value with unrealized gains and losses included as a separate component of equity, net of any related tax effect. The specific identification method is used to determine realized gains and losses on the trade date. At December 31, 2016 and January 2, 2016, cash, cash equivalents and investments consisted of the following:
The amortized cost basis of the debt securities as of December 31, 2016 was $12.3 million. Immaterial unrealized gains and losses are recorded in accumulated other comprehensive income as of December 31, 2016 for these debt securities.
The amortized cost basis of the debt securities as of January 2, 2016 was $12.1 million. Immaterial unrealized gains and losses are recorded in accumulated other comprehensive income as of January 2, 2016 for these debt securities. Receivables Accounts receivable are presented net of allowance for doubtful accounts of $2.1 million and $4.3 million for 2016 and 2015, respectively. The allowance is developed based on several factors including overall customer credit quality, historical write-off experience, and specific account analyses projecting the ultimate collectability of the account. As such, these factors may change over time causing the reserve level to adjust accordingly.
Inventories The Corporation valued 79 percent and 78 percent of its inventory by the LIFO method at December 31, 2016 and January 2, 2016, respectively. During 2016 and 2014, inventory quantities were reduced at certain reporting units. This reduction resulted in a liquidation of LIFO inventory quantities carried at higher or lower costs prevailing in prior years as compared with the cost of current year purchases, the effect of which increased cost of goods sold by approximately $0.05 million in 2016 and decreased cost of goods sold by approximately $0.03 million in 2014. There was no similar LIFO decrement in 2015. If the FIFO method had been in use, inventories would have been $24.2 million and $25.1 million higher than reported at December 31, 2016 and January 2, 2016, respectively. Property, Plant and Equipment Property, plant and equipment are carried at cost. Expenditures for repairs and maintenance are expensed as incurred. Major improvements that materially extend the useful lives of the assets are capitalized. Depreciation has been computed using the straight-line method over estimated useful lives: land improvements, 10 – 20 years; buildings, 10 – 40 years; and machinery and equipment, 3 – 12 years. Long-Lived Assets Long-lived assets are reviewed for impairment as events or changes in circumstances occur indicating the amount of the asset reflected in the Corporation’s balance sheet may not be recoverable. An estimate of undiscounted cash flows produced by the asset, or the appropriate group of assets, is compared to the carrying value to determine whether impairment exists. The estimates of future cash flows involve considerable management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions. Asset impairment charges recorded in connection with the Corporation’s restructuring activities are discussed in Restructuring Related Charges. These assets include real estate, manufacturing equipment and certain other fixed assets. The Corporation’s continuous focus on improving the manufacturing process tends to increase the likelihood of assets being replaced; therefore, the Corporation is regularly evaluating the expected lives of its equipment and accelerating depreciation where appropriate. Goodwill and Other Intangible Assets See Goodwill and Other Intangible Assets note to consolidated financial statements. Product Warranties The Corporation issues certain warranty policies on its furniture and hearth products that provide for repair or replacement of any covered product or component failing during normal use because of a defect in design, materials or workmanship. Reserves have been established for the various costs associated with the Corporation's warranty programs. A warranty reserve is determined by recording a specific reserve for known warranty issues and an additional reserve for unknown claims expected to be incurred based on historical claims experience. Actual claims incurred could differ from the original estimates, requiring adjustments to the reserve. Activity associated with warranty obligations was as follows:
The portion of the reserve for estimated settlements expected to be paid in the next twelve months was $7.0 million and $8.2 million as of December 31, 2016 and January 2, 2016, respectively, and is included in "Accounts payable and accrued expenses" in the Consolidated Balance Sheets. The portion of the reserve for settlements expected to be paid beyond one year was $8.3 million and $8.0 million, as of December 31, 2016 and January 2, 2016, respectively, and is included in "Other Long-Term Liabilities" in the Consolidated Balance Sheets. Revenue Recognition Sales of office furniture and hearth products are generally recognized when title transfers and the risks and rewards of ownership have passed to customers. Typically title and risk of ownership transfer when the product is shipped. In certain circumstances, title and risk of ownership do not transfer until the goods are received by the customer or upon installation and customer acceptance. Revenue includes freight charged to customers; related costs are recorded in selling and administrative expense. Rebates, discounts and other marketing program expenses directly related to the sale are recorded as a reduction to net sales. Marketing program accruals require the use of management estimates and the consideration of contractual arrangements subject to interpretation. Customer sales that achieve or do not achieve certain award levels can affect the amount of such estimates and actual results could differ from these estimates. Product Development Costs Product development costs relating to development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. These costs include salaries, contractor fees, building costs, utilities and administrative fees. The amounts charged against income were $28.1 million in 2016, $31.1 million in 2015 and $29.7 million in 2014 and were recorded in "Selling and Administrative Expenses" on the Consolidated Statements of Income. Freight Expense The Corporation records freight expense on shipments to customers in "Selling and Administrative Expenses" on the Consolidated Statements of Income. Amounts recorded were $115.2 million in 2016, $133.4 million in 2015 and $131.0 million in 2014. Stock-Based Compensation The Corporation measures the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes cost over the requisite service period. See the Stock-Based Compensation note to consolidated financial statements for further information. Income Taxes The Corporation uses an asset and liability approach that takes into account guidance related to uncertain tax positions and requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Corporation’s financial statements or tax returns. Deferred income taxes are provided to reflect differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. The Corporation provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the United States, except for those earnings it considers to be permanently reinvested. There were approximately $32.4 million of accumulated earnings considered permanently reinvested in China, Hong Kong and India as of December 31, 2016. The Corporation believes the U.S. tax cost on unremitted foreign earnings would be approximately $9.6 million if the amounts were not considered permanently reinvested. See the Income Tax note to consolidated financial statements for further information. Earnings Per Share Basic earnings per share are based on the weighted-average number of common shares outstanding during the year. Shares potentially issuable under stock options, restricted stock units and common stock equivalents under the Corporation's deferred compensation plans have been considered outstanding for purposes of the diluted earnings per share calculation. The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share (EPS):
Certain exercisable and non-exercisable stock options were not included in the computation of diluted EPS for fiscal years 2016, 2015 and 2014 because inclusion would have been anti-dilutive. The number of stock options outstanding which met this criterion was 416,142; 493,202 and 500,058 for 2016, 2015 and 2014, respectively. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The more significant areas requiring use of management estimates relate to allowance for doubtful accounts, inventory reserves, marketing program accruals, warranty accruals, accruals for self-insured medical claims, workers’ compensation, legal contingencies, general liability and auto insurance claims, valuation of long-lived assets, and useful lives for depreciation and amortization. Actual results could differ from those estimates. Self-Insurance The Corporation is primarily self-insured for general, auto and product liability, workers’ compensation, and certain employee health benefits. The general, auto, product and workers’ compensation liabilities are managed using a wholly owned insurance captive and the related liabilities are included in the accompanying consolidated financial statements. As of December 31, 2016 and January 2, 2016, these liabilities totaled $26.5 million and $27.7 million, respectively. The Corporation’s policy is to accrue amounts in accordance with the actuarially determined liabilities. The actuarial valuations are based on historical information along with certain assumptions about future events. Changes in assumptions for such matters as legal actions, medical cost inflation and magnitude of change in actual experience development could cause these estimates to change in the future. Foreign Currency Translations Foreign currency financial statements of foreign operations where the local currency is the functional currency are translated using exchange rates in effect at period end for assets and liabilities and average exchange rates during the period for results of operations. Related translation adjustments are reported as a component of Shareholders’ Equity. Gains and losses on foreign currency transactions are included in the “Selling and administrative expenses” caption of the Consolidated Statements of Income. Reclassifications Certain reclassifications have been made within the financial statements to conform to the current year presentation. Recently Adopted Accounting Standards In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2015-05, Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The ASU applies to cloud computing arrangements including software as a service, platform as a service, infrastructure as a service and other similar hosting arrangements and was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The ASU provides guidance about whether the arrangement includes a software license. The core principle of the ASU is that if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance did not change U.S. generally accepted accounting principles for a customer’s accounting for service contracts. The Corporation adopted the guidance effective January 3, 2016, the beginning of the Corporation's 2016 fiscal year. The guidance did not have a material impact on the Corporation's financial statements. The FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying Presentation of Debt Issuance Costs in April 2015, which was further clarified by ASU No. 2015-15 in August 2015. The core principle of the ASUs is that an entity should present debt issuance costs as a direct deduction from the face amount of that debt in the balance sheet similar to the manner in which a debt discount or premium is presented, and not reflected as a deferred charge or deferred credit. The ASU requires additional disclosure about the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted and the effect of the change on the financial statement line item (that is, the debt issuance cost asset and the debt liability). Debt issuance costs related to line-of-credit arrangements can still be presented as assets and subsequently amortized. The Corporation adopted the guidance effective January 3, 2016, the beginning of the Corporation's 2016 fiscal year. The guidance did not have an impact on the Corporation's financial statements because all debt currently held is a line-of-credit arrangement. |
Restructuring and Impairment Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Related and Impairment Charges | Restructuring and Impairment Charges The Corporation recorded $10.5 million of restructuring costs in 2016 in connection with the previously announced closures of the Paris, Kentucky hearth manufacturing facility and the Orleans, Indiana office furniture manufacturing facility. Specific items incurred include severance and accelerated depreciation. Of these charges, $5.3 million were included in cost of sales. As of December 31, 2016, the estimated fair value of the Paris, Kentucky hearth manufacturing facility of $5.2 million was classified as held for sale and is included in "Prepaid expenses and other current assets" in the Consolidated Balance Sheets. The Corporation made the decision to exit a line of business within our hearth products segment during 2015. The Corporation incurred $0.9 million of restructuring charges as the result of this decision, of which $0.8 million were included in cost of sales. The Corporation also incurred $0.4 million of restructuring charges in 2015 related to office furniture closures announced in 2014 in the form of facility exit costs partially offset by lower than anticipated post employment costs. During 2014, the Corporation made decisions to close three office furniture manufacturing facilities located in Florence, Alabama; Chicago, Illinois; and Nalagarh, India and consolidate production into existing office furniture manufacturing facilities. In connection with these decisions, the Corporation recorded $8.8 million of pre-tax charges in 2014, which included $5.2 million of accelerated depreciation on machinery and equipment recorded in cost of sales and $3.6 million of severance and facility exit costs which were recorded as restructuring charges during the year. The restructuring accrual is classified as current in the Condensed Consolidated Balance Sheets as it is expected to be paid out within the next twelve months. The following table summarizes the restructuring accrual activity since the beginning of fiscal 2014.
The Corporation recorded $5.8 million, $11.2 million, and $29.4 million of goodwill and long-lived asset impairments in 2016, 2015, and 2014, respectively. These charges were included in the “Restructuring and Impairment Charges” line item on the Consolidated Statements of Income. See Goodwill and Other Intangible Assets note to consolidated financial statements for more information. |
Acquisitions and Divestitures |
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Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures On January 29, 2016, the Corporation acquired OFM, an office furniture company, with annual sales of approximately $30 million at a purchase price of $34.1 million, net of cash acquired, in an all cash transaction. The Corporation finalized the allocation of the purchase price during fourth quarter 2016. There were $15 million of intangible assets other than goodwill associated with this acquisition with estimated useful lives ranging from three to ten years with amortization recorded on a straight line basis based on the projected cash flow associated with the respective intangible assets. There was $14 million of goodwill associated with this acquisition. The goodwill is deductible for income tax purposes. As part of the Corporation's ongoing business strategy, it continues to acquire and divest small office furniture dealerships. Goodwill increased approximately $2 million in 2016 as a result of this activity. The Corporation completed the sale of Artcobell, a K-12 education furniture business, on December 31, 2016. A pre-tax non-cash charge of approximately $23 million and a $10 million long term note receivable, which is included on "Other Assets" in the Consolidated Balance Sheets, were recorded in relation to the sale. Artcobell had been included as part of the Corporation's office furniture segment. The Corporation completed the acquisition of Vermont Castings Group, a leading manufacturer of free-standing hearth stoves and fireplaces, as part of its hearth products segment on October 1, 2014 for a purchase price of $62.2 million in an all cash transaction. There were $24.9 million of intangible assets other than goodwill associated with this acquisition with estimated useful lives ranging from five to fifteen years with amortization recorded on a straight line basis based on the projected cash flow associated with the respective intangible assets' existing relationships. There was $17.0 million of goodwill associated with this acquisition assigned to the hearth products segment. The goodwill is not deductible for income tax purposes. |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information The Corporation's cash payments for interest and income taxes and non-cash investing and financing activities are as follows:
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Inventories |
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Inventories | Inventories
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Property, Plant, and Equipment |
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Property, Plant, and Equipment | Property, Plant, and Equipment
Total depreciation expense was $57.2 million, $46.5 million and $46.1 million in 2016, 2015 and 2014, respectively. |
Goodwill and Other Intangible Assets |
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets As a result of the required annual impairment assessment performed in the fourth quarter of 2016, the Corporation determined the fair value of a reporting unit within the office furniture segment was below its carrying value. The decline in the estimated fair value of this reporting unit was largely driven by lower than expected operating performance in 2016. The projections used in the impairment model reflected management's assumptions regarding revenue growth rates, economic and market trends, cost structure, investments required for operational transformation and other expectations about the anticipated short-term and long-term operating results of the reporting unit. The Corporation assumed a discount rate of 14 percent, near term growth rates ranging from negative 25 percent to positive 9 percent and a terminal growth rate of 3 percent. Based on the two-step analysis, the Corporation recorded a $2.9 million goodwill impairment charge in 2016. There was $6.3 million net goodwill remaining in the reporting unit as of December 31, 2016. Holding other assumptions constant, a 100 basis point increase in the discount rate would result in a $2.9 million decrease in the estimated fair value of the reporting unit and a 100 basis point decrease in the long-term growth rate would result in a $1.2 million decrease in the estimated fair value of the reporting unit. Additionally, and prior to the goodwill impairment assessment, the Corporation tested the recoverability of the long-lived assets in that reporting unit other than goodwill, and found no impairments. The Corporation recorded an impairment charge of $2.9 million related to an indefinite-lived trade name. There was an $8.3 million net indefinite-lived trade name remaining in the reporting unit as of December 31, 2016. The Corporation assumed a royalty rate of 3 percent, near term growth rates ranging from 1 percent to 9 percent and a terminal growth rate of 3 percent. Holding other assumptions constant, a 50 basis point decrease in the royalty rate would result in a $1.7 million decrease in the estimated fair value of the intangible and a 50 basis point decrease in the terminal growth rate would result in a $0.1 million decrease in the estimated fair value of the intangible. Based on the results of the annual impairment tests, the Corporation concluded that no other goodwill impairment existed apart from the impairment charges discussed above. For all other reporting units included in the annual two-step impairment test except the two noted below, the estimated fair value is significantly in excess of carrying value. For one of the office furniture reporting units that exceeded its carrying value by approximately 5 percent, the Corporation assumed a discount rate of 14 percent, near term growth rates ranging from 3 percent to 7 percent and a terminal growth rate of 3.0 percent. The fair value model assumes continued positive economic momentum and transformation of the reporting unit including sales and marketing initiatives, new product development and operational processes. Holding other assumptions constant, a 100 basis point increase in the discount rate would result in a $4.5 million decrease in the estimated fair value of the reporting unit and a 100 basis point decrease in the long-term growth rate would result in a $1.9 million decrease in the estimated fair value of the reporting unit. Both of these scenarios individually would result in the reporting unit failing step one. There is $24.5 million of goodwill associated with this reporting unit. For the other office furniture reporting unit that exceeded its carrying value by approximately 18 percent, the Corporation assumed a discount rate of 16 percent, near term growth rates ranging from 4 percent to 20 percent and a terminal growth rate of 3 percent. The fair value model assumes continued positive economic momentum of the reporting unit including investments in sales, marketing and distribution, market growth and expansion in other channels. Holding other assumptions constant, a 100 basis point increase in the discount rate would result in a $3.2 million decrease in the estimated fair value of the reporting unit and a 100 basis point decrease in the long-term growth rate would result in a $1.1 million decrease in the estimated fair value of the reporting unit. Neither of these scenarios individually would result in the reporting unit failing step one. There is $14.1 million of goodwill associated with this reporting unit. The Corporation also owns certain trademarks and trade names having a carrying value of $38.1 million as of December 31, 2016, and $41.0 million as of January 2, 2016. These trademarks and trade names are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely. As a result of the review performed in the fourth quarter of 2016, the Corporation recorded an impairment charge of $2.9 million to adjust the trade name associated with a small office furniture reporting unit to fair market value as discussed above. The table below summarizes amortizable definite-lived intangible assets, which are reflected in Other Assets in the Corporation’s Consolidated Balance Sheets:
Amortization expense for capitalized software for 2016, 2015 and 2014, was $4.7 million, $3.5 million and $3.3 million, respectively. Amortization expense for all other definite-lived intangibles for 2016, 2015 and 2014, was $7.1 million, $7.6 million and $7.2 million, respectively. All amortization expense was recorded in Selling and Administrative Expenses on the Consolidated Statements of Income. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows:
The occurrence of events such as acquisitions, dispositions or impairments in the future may result in changes to amounts. The changes in the carrying amount of goodwill since January 3, 2015, are as follows by reporting segment:
The goodwill increases relate to acquisitions completed. See the Acquisitions and Divestitures note. The decreases in goodwill in the office furniture segment in 2015 and 2016 were due to the impairment charges described above. |
Accounts Payable and Accrued Expenses |
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Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses
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Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt
The carrying value of the Corporation's outstanding variable-rate, long-term debt obligations at December 31, 2016 and January 2, 2016 was $214 million and $40 million, respectively, which approximated fair value. The Corporation paid off its outstanding fixed-rate, long-term debt obligation on April 6, 2016 with revolving credit facility borrowings. The value of these senior notes was estimated based on a discounted cash flow method (Level 2) to be $148 million at January 2, 2016 compared to the carrying value of $150 million. The Corporation, certain domestic subsidiaries of the Corporation, the lenders and Wells Fargo Bank, National Association, as administrative agent, entered into the First Amendment to Second Amended and Restated Credit Agreement (the "Credit Agreement") on January 6, 2016. The Credit Agreement amends the Second Amended and Restated Credit Agreement dated as of June 9, 2015. The Credit Agreement was amended to increase the revolving commitment of the lenders from $250 million to $400 million (while retaining the Corporation's option under the Credit Agreement to increase its borrowing capacity by an additional $150 million) in order to provide funding for the payoff of its maturing senior notes on April 6, 2016 and to extend the maturity date of the Credit Agreement from June 2020 to January 2021. The Corporation deferred the debt issuance costs related to the Credit Agreement, which were classified as assets, and is amortizing them over the term of the Credit Agreement. As of December 31, 2016, there was $214 million outstanding under the $400 million revolving credit facility of which $180 million was classified as long-term since the Corporation does not expect to repay the borrowings within a year. Because the Corporation expects, but is not required, to repay the remaining $34 million in 2017, it is classified as current. The revolving credit facility under the Credit Agreement is the primary source of committed funding from which the Corporation finances its planned capital expenditures and strategic initiatives, such as acquisitions, repurchases of common stock and certain working capital needs. Non-compliance with the various financial covenant ratios in the Credit Agreement could prevent the Corporation from being able to access further borrowings under the revolving credit facility, require immediate repayment of all amounts outstanding with respect to the revolving credit facility and/or increase the cost of borrowing. The Credit Agreement contains a number of covenants, including covenants requiring maintenance of the following financial ratios as of the end of any fiscal quarter:
The most restrictive of the financial covenants is the consolidated leverage ratio requirement of 3.5 to 1.0 included in the Credit Agreement. Under the Credit Agreement, consolidated EBITDA is defined as consolidated net income before interest expense, income taxes and depreciation and amortization of intangibles, as well as non-cash, nonrecurring charges and all non-cash items increasing net income. On December 31, 2016, the Corporation was well below the maximum allowable ratio and was in compliance with all of the covenants and other restrictions in the Credit Agreement. The Corporation expects to remain in compliance over the next twelve months. In March 2016, the Corporation entered in to an interest rate swap transaction to hedge $150 million of outstanding variable rate revolver borrowings against future interest rate volatility. Under the terms of the interest rate swap, the Corporation pays a fixed rate of 1.29 percent and receives one month LIBOR on a $150 million notational value expiring January 2021. As of December 31, 2016, the fair value of the Corporation's interest rate swap was a net asset of $2.3 million reported net of tax as $1.5 million in accumulated other comprehensive income. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Significant components of the provision for income taxes including those related to non-controlling interest are as follows:
The differences between the actual tax expense and tax expense computed at the statutory U.S. Federal tax rate are explained as follows:
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Corporation’s deferred tax liabilities and assets are as follows:
The valuation allowance for deferred tax assets is as follows:
At December 31, 2016, the Corporation has approximately $0.1 million of U.S. state tax net operating losses and $2.0 million of U.S. state tax credits which expire over the next twenty years. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The amount of unrecognized tax benefits which would impact the Corporation’s effective tax rate, if recognized, was $3.0 million at December 31, 2016 and $2.8 million at January 2, 2016. As of December 31, 2016, it is reasonably possible the amount of unrecognized tax benefits may increase or decrease within the twelve months following the reporting date. These increases or decreases in the unrecognized tax benefits would be due to new positions that may be taken on income tax returns, settlement of tax positions and the closing of statutes of limitation. It is not expected any of the changes will be material individually or in total to the results or financial position of the Corporation. The Corporation recognized interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses consistent with the recognition of these items in prior reporting. Interest and penalties recognized in the Consolidated Statements of Income amounted to a detriment of $0.1 million, a benefit of $0.1 million and $0.0 million in the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. The Corporation had recorded a liability for interest and penalties related to unrecognized tax benefits of $0.2 million and $0.1 million as of December 31, 2016 and January 2, 2016, respectively. Tax years 2013 through 2016 remain open for examination by the Internal Revenue Service ("IRS"). The Corporation is currently under examination for the 2014 federal tax return and in various state jurisdictions, of which years 2012 through 2016 remain open to examination. Deferred income taxes are provided to reflect differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. The Corporation provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the United States, except for those earnings it considers to be permanently reinvested. There were approximately $32.4 million of accumulated earnings considered permanently reinvested in Canada, China, and Hong Kong as of December 31, 2016. The Corporation believes the U.S tax cost on unremitted foreign earnings would be approximately $9.6 million if the amounts were not considered permanently reinvested. |
Fair Value Measurements of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements of Financial Instruments | Fair Value Measurements of Financial Instruments For recognition purposes, on a recurring basis, the Corporation is required to measure at fair value its marketable securities. The marketable securities are comprised of investments in government securities and corporate bonds. When available, the Corporation uses quoted market prices to determine fair value and classifies such measurements within Level 1. In some cases, where market prices are not available, the Corporation makes use of observable market based inputs (prices or quotes from published exchanges/indexes) to calculate fair value using the market approach, in which case the measurements are classified within Level 2. Assets measured at fair value for the year ended December 31, 2016 were as follows:
Assets measured at fair value for the year ended January 2, 2016 were as follows:
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Shareholders' Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity
The Corporation purchased 1,082,938, 550,000, and 1,665,850 shares of its common stock during 2016, 2015 and 2014, respectively. The par value method of accounting is used for common stock repurchases. The following table summarizes the components of accumulated other comprehensive income (loss) and the changes in accumulated other comprehensive income loss:
The following table details the reclassifications from accumulated other comprehensive income (loss) for the years ended January 2, 2016 and December 31, 2016 (in thousands):
The Corporation determined in fourth quarter 2015 that the qualifications for hedge accounting treatment on the diesel hedge derivative financial instruments were not met and reversed $1.3 million recorded in accumulated other comprehensive income as a reduction to net income. In May 2007, the Corporation registered 300,000 shares of its common stock under its 2007 Equity Plan for Non-Employee Directors of HNI Corporation, as amended (the “Director Plan”). The Director Plan permits the Corporation to issue to its non-employee directors options to purchase shares of Corporation common stock, restricted stock or restricted stock units of the Corporation and awards of Corporation common stock. The Director Plan also permits non-employee directors to elect to receive all or a portion of their annual retainers and other compensation in the form of shares of Corporation common stock. During 2016, 2015, and 2014, 24,352; 20,146; and 27,272 shares, respectively, of Corporation common stock were issued under the Director Plan. Cash dividends declared and paid per share for each year are:
During 2007, shareholders approved the 2002 Members’ Stock Purchase Plan (the "Purchase Plan"), as amended January 1, 2007. Under the plan, 800,000 shares of common stock were initially registered for issuance to participating members. On June 12, 2009, an additional 1,000,000 shares of common stock were registered for issuance to participating members. Beginning on June 30, 2002, rights to purchase stock are granted on a quarterly basis to all participating members who customarily work 20 hours or more per week and for five months or more in any calendar year. The price of the stock purchased under the Purchase Plan is 85 percent of the closing price on the exercise date. No member may purchase stock under the Purchase Plan in an amount which exceeds a maximum fair value of $25,000 in any calendar year. During 2016, 75,098 shares of common stock were issued under the Purchase Plan at an average price of $31.11. During 2015, 73,874 shares of common stock were issued under the plan at an average price of $32.18. During 2014, 84,065 shares of common stock were issued under the Purchase Plan at an average price of $27.92. An additional 298,170 shares were available for issuance under the Purchase Plan at December 31, 2016. The Corporation has entered into change in control employment agreements with certain officers. According to the agreements, a change in control occurs when a third person or entity becomes the beneficial owner of 20 percent or more of the Corporation’s common stock, when more than one-third of the Board is composed of persons not recommended by at least three-fourths of the incumbent Board, upon certain business combinations involving the Corporation or upon approval by the Corporation’s shareholders of a complete liquidation or dissolution. Upon a change in control, a key member is deemed to have a two-year employment agreement with the Corporation, and all of his or her benefits vest under the Corporation’s compensation plans. If, at any time within two years of the change in control, his or her employment is terminated by the Corporation for any reason other than cause or disability, or by the key member for good reason, as such terms are defined in the agreement, then the key member is entitled to receive, among other benefits, a severance payment equal to two times (three times for the Corporation’s Chairman, President and CEO) annual salary and the average of the prior two years’ bonuses. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Under the Corporation’s 2007 Stock-Based Compensation Plan (the “Plan”), effective May 8, 2007, as amended, the Corporation may award options to purchase shares of the Corporation’s common stock and grant other stock awards to executives, managers and key personnel. Upon shareholder approval of the Plan in May 2007, no future awards were granted under the Corporation’s 1995 Stock-Based Compensation Plan, but all outstanding awards previously granted under that plan shall remain outstanding in accordance with their terms. As of December 31, 2016, there were approximately 2.8 million shares available for future issuance under the Plan. The Plan is administered by the Human Resources and Compensation Committee of the Board. Restricted stock units awarded under the Plan are expensed ratably over the vesting period of the awards. Stock options awarded to members under the Plan must be at exercise prices equal to or exceeding the fair market value of the Corporation’s common stock on the date of grant. Stock options are generally subject to four-year cliff vesting and must be exercised within 10 years from the date of grant. The Corporation measures the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes cost over the requisite service period. Compensation cost charged against operations for the Plan and Purchase Plan described in Note 13 of the consolidated financial statements was $8.1 million, $9.1 million and $8.6 million for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was $2.8 million, $3.1 million and $3.1 million for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. The stock compensation expense for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions by grant year:
Expected volatilities were based on historical volatility as the Corporation does not feel that future volatility over the expected term of the options is likely to differ from the past. The Corporation used a calculation method based on daily frequency for the prior six years for 2016 and 2015 and a simple-average calculation method based on monthly frequency points for the prior five years for 2014. The Corporation used the current dividend yield in all years as there are no plans to substantially increase or decrease its dividends. The Corporation used historical exercise experience in all years to determine the expected term. The risk-free interest rate was selected based on yields from treasury securities as published by the Federal Reserve equal to the expected term of the options being valued for 2016 and 2015 and yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options being valued for 2014. The following table summarizes the changes in outstanding stock options since the beginning of fiscal 2014.
A summary of the Corporation’s non-vested stock options as of December 31, 2016 and changes during the year are presented below:
At December 31, 2016, there was $3.3 million of unrecognized compensation cost related to non-vested stock option awards, which the Corporation expects to recognize over a weighted-average period of 1.3 years. Information about stock options expected to vest or currently exercisable at December 31, 2016, is as follows:
The weighted-average grant-date fair value of options granted was $8.80, $18.45 and $10.48, for 2016, 2015 and 2014, respectively. Other information for the last three years is as follows:
The Corporation has occasionally issued restricted stock units (“RSUs”) to executives, managers and key personnel. The RSUs vest at the end of three years after the grant date. No dividends are accrued on the RSUs. The share-based compensation expense associated with the RSUs is based on the quoted market price of HNI Corporation shares on the date of grant less the discounted present value of dividends not received on the shares and is amortized using the straight-line method from the grant date through the vesting date. The following table summarizes the changes in outstanding RSUs since the beginning of fiscal 2014:
At December 31, 2016, there was $1.0 million of unrecognized compensation cost related to RSUs which the Corporation expects to recognize over a weighted-average period of 1.0 year. The total value of shares vested in 2016, 2015 and 2014 was $0.0 million, $0.2 million and $0.3 million, respectively. As of December 31, 2016 the Corporation had $16.0 million of deferred compensation of which $0.9 million was recorded in "Current maturities of other long-term obligations" and $15.1 million was recorded in "Other long-term liabilities" in the Consolidated Balance Sheets, with $10.6 million of the total fair-market valued based on the price increase or decrease of common stock on a quarterly basis. As of January 2, 2016 the Corporation had $13.2 million of deferred compensation of which $0.4 million was recorded in "Current maturities of other long-term obligations" and $12.8 million was recorded in "Other long-term liabilities" in the Consolidated Balance Sheets, with $9.1 million of the total fair-market valued based on the price increase or decrease of common stock on a quarterly basis. |
Retirement Benefits |
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Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefits | Retirement Benefits The Corporation has defined contribution profit-sharing plans covering substantially all employees who are not participants in certain defined benefit plans. The Corporation’s annual contribution to the defined contribution plans is based on employee eligible earnings and results of operations and amounted to $32.5 million, $29.1 million, and $26.8 million, in 2016, 2015, and 2014, respectively. A portion of the annual contribution is in the form of common stock of the Corporation. The amount of the stock contribution was $7.2 million, $6.8 million, and $6.4 million in 2016, 2015, and 2014, respectively. The Corporation sponsors a defined benefit plan which covers a limited number of former salaried and hourly members. The Corporation’s funding policy is generally to contribute annually the minimum actuarially computed amount. Net pension costs relating to these plans were $376,000, $281,000 and $167,000, in 2016, 2015 and 2014, respectively. The actuarial present value of obligations, less related plan assets at fair value, is not significant. |
Post-Retirement Health Care |
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Post-Retirement Health Care | Post-Retirement Health Care Guidance on employers’ accounting for other post-retirement plans requires recognition of the overfunded or underfunded status on the balance sheet. Under this guidance, gains and losses, prior services costs and credits and any remaining transition amounts under previous guidance not yet recognized through net periodic benefit cost are recognized in accumulated other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic benefit cost. Also, the measurement date – the date at which the benefit obligation and plan assets are measured – is required to be the Corporation’s fiscal year-end.
The discount rates at fiscal year-end 2016, 2015 and 2014, were 4.0 percent, 4.2 percent and 3.8 percent, respectively. The Corporation's payment for these benefits has reached the maximum amounts per the plan; therefore, healthcare trend rates have no impact on the Corporation’s cost. There were no funds designated as plan assets.
A discount rate of 4.0 percent was used to determine net periodic benefit cost for 2017. The discount rate is set at the measurement date to reflect the yield of a portfolio of high quality, fixed income debt instruments. There are no plan assets invested. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Corporation leases certain showrooms, office space, warehouse and plant facilities and equipment. Commitments for minimum rentals under non-cancelable leases at the end of 2016 are as follows:
There are no capitalized leases at December 31, 2016 and January 2, 2016. Rent expense for the years 2016, 2015 and 2014, amounted to approximately $33.5 million, $34.0 million and $48.0 million, respectively. There was no contingent rent expense under either capitalized or operating leases for the years 2016, 2015, and 2014. |
Guarantees, Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees, Commitments and Contingencies | Guarantees, Commitments and Contingencies The Corporation utilizes letters of credit in the amount of $9 million to back certain financing instruments, insurance policies and payment obligations. The Corporation utilizes trade letters of credit and bankers' acceptances in the amount of $4 million to guarantee certain payments to overseas suppliers. The letters of credit reflect fair value as a condition of their underlying purpose and are subject to fees competitively determined. Withdrawal Liability From Multi-employer Pension On February 2, 2017, the Corporation was notified of a withdrawal liability from a multi-employer pension fund associated with a business sold by the Corporation as a going concern in 2013. The business subsequently ceased operations, triggering the liability for which it was responsible. The trustee of the pension fund has asserted a claim against the Corporation as a prior indirect owner of the business. The Corporation has not recorded any liability associated with this claim because it believes the likelihood of an unfavorable outcome is neither probable nor remote. The Corporation believes it has strong legal and factual defenses, and intends to vigorously defend itself against this claim. Other Litigation The Corporation is involved in various kinds of disputes and legal proceedings that have arisen in the course of its business, including pending litigation, environmental remediation, taxes and other claims. It is the Corporation’s opinion, after consultation with legal counsel, that additional liabilities, if any, resulting from these matters are not expected to have a material adverse effect on the Corporation’s quarterly or annual operating results and cash flows when resolved in a future period. |
Reportable Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segment Information | Reportable Segment Information Management views the Corporation as being in two reportable segments based on industries: office furniture and hearth products, with the former being the principal segment. The aggregated office furniture segment manufactures and markets a broad line of metal and wood commercial and home office furniture which includes storage products, desks, credenzas, chairs, tables, bookcases, freestanding office partitions and panel systems and other related products. The hearth products segment manufactures and markets a broad line of gas, electric, wood and biomass burning fireplaces, inserts, stoves, facings and accessories, 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 costs of the Corporation’s corporate operations, interest income and interest expense. Management views interest income and expense as corporate financing costs and not as a reportable segment cost. In addition, management applies an effective income tax rate to its consolidated income before income taxes so income taxes are not reported or viewed internally on a segment basis. Identifiable assets by segment are those assets applicable to the respective industry segments. Corporate assets consist principally of cash and cash equivalents, short-term investments, long-term investments and corporate office real estate and related equipment. No geographic information for revenues from external customers or for long-lived assets is disclosed since the Corporation’s primary market and capital investments are concentrated in the United States. Reportable segment data reconciled to the consolidated financial statements for the years ended 2016, 2015, and 2014, is as follows for continuing operations:
The Corporation's net sales by product category were as follows for the years ended 2016, 2015 and 2014:
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 6, 2017, the Corporation announced the closure of its Colville, Washington hearth manufacturing facility as part of its continued efficiency and simplification activities to deliver consistent, flawless execution to customers and to reduce structural costs. The Corporation estimates the consolidation will save $2.8 million annually beginning in Q4 2017. The Corporation estimates pre-tax charges of $6.7 million related to the closure and consolidation. |
Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Fiscal Year End | The Corporation follows a 52/53-week fiscal year which ends on the Saturday nearest December 31. Fiscal year 2016 ended on December 31, 2016; 2015 ended on January 2, 2016; and 2014 ended on January 3, 2015. The financial statements for fiscal years 2016 and 2015 are on a 52-week basis. The financial statements for fiscal year 2014 are on a 53-week basis. A 53-week year occurs approximately every sixth year. |
Principles of Consolidation | The consolidated financial statements include the accounts and transactions of the Corporation and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Cash, Cash Equivalents and Investments | Cash and cash equivalents generally consist of cash and money market accounts. The fair value approximates the carrying value due to the short duration of the securities. These securities have original maturity dates not exceeding three months. The Corporation has short-term investments with maturities of less than one year and also has investments with maturities greater than one year included in Other Assets on the Consolidated Balance Sheets. Management classifies investments in marketable securities at the time of purchase and reevaluates such classification at each balance sheet date. Debt securities including government and corporate bonds are classified as available-for-sale and stated at current market value with unrealized gains and losses included as a separate component of equity, net of any related tax effect. The specific identification method is used to determine realized gains and losses on the trade date. |
Receivables | Accounts receivable are presented net of allowance for doubtful accounts of $2.1 million and $4.3 million for 2016 and 2015, respectively. The allowance is developed based on several factors including overall customer credit quality, historical write-off experience, and specific account analyses projecting the ultimate collectability of the account. As such, these factors may change over time causing the reserve level to adjust accordingly. |
Inventories | The Corporation valued 79 percent and 78 percent of its inventory by the LIFO method at December 31, 2016 and January 2, 2016, respectively. During 2016 and 2014, inventory quantities were reduced at certain reporting units. This reduction resulted in a liquidation of LIFO inventory quantities carried at higher or lower costs prevailing in prior years as compared with the cost of current year purchases, the effect of which increased cost of goods sold by approximately $0.05 million in 2016 and decreased cost of goods sold by approximately $0.03 million in 2014. There was no similar LIFO decrement in 2015. If the FIFO method had been in use, inventories would have been $24.2 million and $25.1 million higher than reported at December 31, 2016 and January 2, 2016, respectively. |
Property, Plant and Equipment | Property, plant and equipment are carried at cost. Expenditures for repairs and maintenance are expensed as incurred. Major improvements that materially extend the useful lives of the assets are capitalized. Depreciation has been computed using the straight-line method over estimated useful lives: land improvements, 10 – 20 years; buildings, 10 – 40 years; and machinery and equipment, 3 – 12 years. |
Long-Lived Assets | Long-lived assets are reviewed for impairment as events or changes in circumstances occur indicating the amount of the asset reflected in the Corporation’s balance sheet may not be recoverable. An estimate of undiscounted cash flows produced by the asset, or the appropriate group of assets, is compared to the carrying value to determine whether impairment exists. The estimates of future cash flows involve considerable management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management’s estimates due to changes in business conditions, operating performance and economic conditions. Asset impairment charges recorded in connection with the Corporation’s restructuring activities are discussed in Restructuring Related Charges. These assets include real estate, manufacturing equipment and certain other fixed assets. The Corporation’s continuous focus on improving the manufacturing process tends to increase the likelihood of assets being replaced; therefore, the Corporation is regularly evaluating the expected lives of its equipment and accelerating depreciation where appropriate. |
Product Warranties | The Corporation issues certain warranty policies on its furniture and hearth products that provide for repair or replacement of any covered product or component failing during normal use because of a defect in design, materials or workmanship. Reserves have been established for the various costs associated with the Corporation's warranty programs. A warranty reserve is determined by recording a specific reserve for known warranty issues and an additional reserve for unknown claims expected to be incurred based on historical claims experience. Actual claims incurred could differ from the original estimates, requiring adjustments to the reserve. |
Revenue Recognition | Sales of office furniture and hearth products are generally recognized when title transfers and the risks and rewards of ownership have passed to customers. Typically title and risk of ownership transfer when the product is shipped. In certain circumstances, title and risk of ownership do not transfer until the goods are received by the customer or upon installation and customer acceptance. Revenue includes freight charged to customers; related costs are recorded in selling and administrative expense. Rebates, discounts and other marketing program expenses directly related to the sale are recorded as a reduction to net sales. Marketing program accruals require the use of management estimates and the consideration of contractual arrangements subject to interpretation. Customer sales that achieve or do not achieve certain award levels can affect the amount of such estimates and actual results could differ from these estimates. |
Product Development Costs | Product development costs relating to development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. These costs include salaries, contractor fees, building costs, utilities and administrative fees. |
Freight Expense | The Corporation records freight expense on shipments to customers in "Selling and Administrative Expenses" on the Consolidated Statements of Income. |
Stock-Based Compensation | The Corporation measures the cost of employee services in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes cost over the requisite service period. |
Income Taxes | The Corporation uses an asset and liability approach that takes into account guidance related to uncertain tax positions and requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Corporation’s financial statements or tax returns. Deferred income taxes are provided to reflect differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. The Corporation provides for taxes that may be payable if undistributed earnings of overseas subsidiaries were to be remitted to the United States, except for those earnings it considers to be permanently reinvested. |
Earnings Per Share | Basic earnings per share are based on the weighted-average number of common shares outstanding during the year. Shares potentially issuable under stock options, restricted stock units and common stock equivalents under the Corporation's deferred compensation plans have been considered outstanding for purposes of the diluted earnings per share calculation. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The more significant areas requiring use of management estimates relate to allowance for doubtful accounts, inventory reserves, marketing program accruals, warranty accruals, accruals for self-insured medical claims, workers’ compensation, legal contingencies, general liability and auto insurance claims, valuation of long-lived assets, and useful lives for depreciation and amortization. Actual results could differ from those estimates. |
Self-Insurance | The Corporation is primarily self-insured for general, auto and product liability, workers’ compensation, and certain employee health benefits. The general, auto, product and workers’ compensation liabilities are managed using a wholly owned insurance captive and the related liabilities are included in the accompanying consolidated financial statements. As of December 31, 2016 and January 2, 2016, these liabilities totaled $26.5 million and $27.7 million, respectively. The Corporation’s policy is to accrue amounts in accordance with the actuarially determined liabilities. The actuarial valuations are based on historical information along with certain assumptions about future events. Changes in assumptions for such matters as legal actions, medical cost inflation and magnitude of change in actual experience development could cause these estimates to change in the future. |
Foreign Currency Translations | Foreign currency financial statements of foreign operations where the local currency is the functional currency are translated using exchange rates in effect at period end for assets and liabilities and average exchange rates during the period for results of operations. Related translation adjustments are reported as a component of Shareholders’ Equity. Gains and losses on foreign currency transactions are included in the “Selling and administrative expenses” caption of the Consolidated Statements of Income. |
Reclassifications | Certain reclassifications have been made within the financial statements to conform to the current year presentation. |
Recently Adopted Accounting Pronouncements | In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2015-05, Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. The ASU applies to cloud computing arrangements including software as a service, platform as a service, infrastructure as a service and other similar hosting arrangements and was issued to help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The ASU provides guidance about whether the arrangement includes a software license. The core principle of the ASU is that if a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance did not change U.S. generally accepted accounting principles for a customer’s accounting for service contracts. The Corporation adopted the guidance effective January 3, 2016, the beginning of the Corporation's 2016 fiscal year. The guidance did not have a material impact on the Corporation's financial statements. The FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30) - Simplifying Presentation of Debt Issuance Costs in April 2015, which was further clarified by ASU No. 2015-15 in August 2015. The core principle of the ASUs is that an entity should present debt issuance costs as a direct deduction from the face amount of that debt in the balance sheet similar to the manner in which a debt discount or premium is presented, and not reflected as a deferred charge or deferred credit. The ASU requires additional disclosure about the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted and the effect of the change on the financial statement line item (that is, the debt issuance cost asset and the debt liability). Debt issuance costs related to line-of-credit arrangements can still be presented as assets and subsequently amortized. The Corporation adopted the guidance effective January 3, 2016, the beginning of the Corporation's 2016 fiscal year. The guidance did not have an impact on the Corporation's financial statements because all debt currently held is a line-of-credit arrangement. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Investments |
At December 31, 2016 and January 2, 2016, cash, cash equivalents and investments consisted of the following:
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Schedule of Product Warranties | Activity associated with warranty obligations was as follows:
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Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles the numerators and denominators used in the calculation of basic and diluted earnings per share (EPS):
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Restructuring and Impairment Charges (Tables) |
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Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the restructuring accrual activity since the beginning of fiscal 2014.
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Supplemental Cash Flow Information (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow, Supplemental Disclosures | The Corporation's cash payments for interest and income taxes and non-cash investing and financing activities are as follows:
|
Inventories (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Inventory Current Table | Inventories
|
Property, Plant, and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | Property, Plant, and Equipment
|
Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets by Major Class | The table below summarizes amortizable definite-lived intangible assets, which are reflected in Other Assets in the Corporation’s Consolidated Balance Sheets:
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Schedule of Expected Amortization Expense Table | Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows:
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Schedule of Goodwill | The changes in the carrying amount of goodwill since January 3, 2015, are as follows by reporting segment:
|
Accounts Payable and Accrued Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Expenses
|
Long-Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt |
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Schedule of Maturities of Long-term Debt |
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | Significant components of the provision for income taxes including those related to non-controlling interest are as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The differences between the actual tax expense and tax expense computed at the statutory U.S. Federal tax rate are explained as follows:
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Schedule of Deferred Tax Assets and Liabilities | Significant components of the Corporation’s deferred tax liabilities and assets are as follows:
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Summary of Valuation Allowance | The valuation allowance for deferred tax assets is as follows:
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Summary of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Fair Value Measurements of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis Table | Assets measured at fair value for the year ended December 31, 2016 were as follows:
Assets measured at fair value for the year ended January 2, 2016 were as follows:
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock by Class |
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Schedule of Accumulated Other Comprehensive Income Loss Table | The following table summarizes the components of accumulated other comprehensive income (loss) and the changes in accumulated other comprehensive income loss:
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Reclassification out of Accumulated Other Comprehensive Income | The following table details the reclassifications from accumulated other comprehensive income (loss) for the years ended January 2, 2016 and December 31, 2016 (in thousands):
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Schedule of Dividends Declared and Paid Per Share | Cash dividends declared and paid per share for each year are:
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Valuation Assumptions | The stock compensation expense for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions by grant year:
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Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes the changes in outstanding stock options since the beginning of fiscal 2014.
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Schedule of Nonvested Restricted Stock Units Activity | A summary of the Corporation’s non-vested stock options as of December 31, 2016 and changes during the year are presented below:
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Stock Option Vested or Expected to Vest and are Exercisable | Information about stock options expected to vest or currently exercisable at December 31, 2016, is as follows:
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Schedule of Share-based Compensation Arrangement Other Information | Other information for the last three years is as follows:
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Schedule of Share-based Compensation, Restricted Stock Units Activity | The following table summarizes the changes in outstanding RSUs since the beginning of fiscal 2014:
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Post-Retirement Health Care (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Postretirement Benefit Cost |
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Schedule of Expected Benefit Payments |
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Schedule of Net Benefit Costs |
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Leases | Commitments for minimum rentals under non-cancelable leases at the end of 2016 are as follows:
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Reportable Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | Reportable segment data reconciled to the consolidated financial statements for the years ended 2016, 2015, and 2014, is as follows for continuing operations:
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Net Sales by Product Category | The Corporation's net sales by product category were as follows for the years ended 2016, 2015 and 2014:
|
Summary of Significant Accounting Policies (Cash, Cash Equivalents and Investments) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
Dec. 28, 2013 |
---|---|---|---|---|
Schedule of Investments [Line Items] | ||||
Cash and cash equivalents | $ 36,312 | $ 28,548 | $ 34,144 | $ 65,030 |
Short-term investments | 2,252 | 4,252 | ||
Long-term investments | 10,033 | 8,067 | ||
Certificates of deposit | ||||
Schedule of Investments [Line Items] | ||||
Cash and cash equivalents | 0 | |||
Short-term investments | 252 | |||
Long-term investments | 0 | |||
Debt securities | ||||
Schedule of Investments [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | ||
Short-term investments | 2,252 | 4,000 | ||
Long-term investments | 10,033 | 8,067 | ||
Cash and money market accounts | ||||
Schedule of Investments [Line Items] | ||||
Cash and cash equivalents | 36,312 | 28,548 | ||
Short-term investments | 0 | 0 | ||
Long-term investments | $ 0 | $ 0 |
Summary of Significant Accounting Policies (Allowance for doubtful accounts) (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 4,287 | $ 5,096 | $ 6,208 |
Charged to costs and expenses | (357) | 1,394 | 343 |
Amounts written off, net of recoveries and other adjustments | 1,598 | 2,203 | 1,455 |
Divestitures | 192 | 0 | 0 |
Balance at end of period | $ 2,140 | $ 4,287 | $ 5,096 |
Summary of Significant Accounting Policies (Product Warranties) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Product Warranty Accrual [Roll Forward] | |||
Balance at the beginning of the period | $ 16,227 | $ 16,719 | $ 13,840 |
Accrual assumed from acquisition | 0 | 0 | 1,100 |
Accrual settled from divestiture | (538) | 0 | 0 |
Accruals for warranties issued during the period | 20,055 | 19,995 | 18,951 |
Accrual (Recovery) related to pre-existing warranties | 604 | (334) | 172 |
Settlements made during the period | (21,098) | (20,153) | (17,344) |
Balance at the end of the period | $ 15,250 | $ 16,227 | $ 16,719 |
Summary of Significant Accounting Policies (Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Numerators: | |||
Numerators for both basic and diluted EPS net income attributable to parent company | $ 85,577 | $ 105,436 | $ 61,471 |
Denominators: | |||
Denominator for basic EPS weighted- average common shares outstanding | 44,413,941 | 44,285,298 | 44,759,716 |
Potentially dilutive shares from stock-based compensation plans (shares) | 1,088,000 | 1,156,000 | 819,000 |
Denominator for diluted EPS (shares) | 45,502,219 | 45,440,653 | 45,578,872 |
Earnings per share - basic (in dollars per share) | $ 1.93 | $ 2.38 | $ 1.37 |
Earnings per share - diluted (in dollars per share) | $ 1.88 | $ 2.32 | $ 1.35 |
Restructuring and Impairment Charges (Schedule of Restructuring Reserve by Type of Cost) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve at beginning of period | $ 221 | $ 1,213 | $ 55 |
Restructuring charges | 5,229 | 505 | 3,638 |
Cash payments | (2,746) | (1,497) | (2,480) |
Restructuring reserve at end of period | 2,704 | 221 | 1,213 |
Severance Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve at beginning of period | 206 | 1,213 | 49 |
Restructuring charges | 3,883 | (750) | 2,933 |
Cash payments | (1,385) | (257) | (1,769) |
Restructuring reserve at end of period | 2,704 | 206 | 1,213 |
Facility Termination & Other Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring reserve at beginning of period | 15 | 0 | 6 |
Restructuring charges | 1,346 | 1,255 | 705 |
Cash payments | (1,361) | (1,240) | (711) |
Restructuring reserve at end of period | $ 0 | $ 15 | $ 0 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Cash paid for: | |||
Interest paid (net of capitalized interest) | $ 6,644 | $ 7,066 | $ 8,301 |
Income taxes paid | 23,120 | 28,252 | 36,637 |
Changes in accrued expenses due to: | |||
Purchases of property and equipment | 3,599 | (327) | 3,873 |
Purchases of capitalized software | $ 603 | $ (2,806) | $ 2,183 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished products | $ 71,223 | $ 68,478 |
Materials and work in process | 71,375 | 81,860 |
LIFO reserve | (24,160) | (25,110) |
Inventories, net | $ 118,438 | $ 125,228 |
Property, Plant, and Equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 890,775 | $ 874,434 | |
Less accumulated depreciation | 534,330 | 533,275 | |
Net Property, Plant, and Equipment | 356,445 | 341,159 | |
Depreciation | 57,200 | 46,500 | $ 46,100 |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 27,403 | 28,801 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 283,930 | 298,516 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 528,099 | 515,131 | |
Construction and equipment installation in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 51,343 | $ 31,986 |
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Net definite lived intangible assets | ||
Gross | $ 293,585 | $ 253,687 |
Accumulated Amortization | 110,919 | 100,624 |
Net | 182,666 | 153,063 |
Amortization expense | ||
2017 | 16,700 | |
2018 | 21,500 | |
2019 | 20,500 | |
2020 | 19,700 | |
2021 | 19,600 | |
Patents | ||
Net definite lived intangible assets | ||
Gross | 18,645 | 18,645 |
Accumulated Amortization | 18,623 | 18,615 |
Net | 22 | 30 |
Software | ||
Net definite lived intangible assets | ||
Gross | 149,587 | 122,892 |
Accumulated Amortization | 25,792 | 21,193 |
Net | 123,795 | 101,699 |
Trademarks and trade names | ||
Net definite lived intangible assets | ||
Gross | 7,564 | 6,564 |
Accumulated Amortization | 1,401 | 753 |
Net | 6,163 | 5,811 |
Customer lists and other | ||
Net definite lived intangible assets | ||
Gross | 117,789 | 105,586 |
Accumulated Amortization | 65,103 | 60,063 |
Net | $ 52,686 | $ 45,523 |
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Trade accounts payable | $ 201,810 | $ 197,579 |
Compensation | 47,280 | 43,380 |
Profit sharing and retirement expense | 32,335 | 29,089 |
Marketing expenses | 41,963 | 35,969 |
Freight | 14,251 | 16,384 |
Other accrued expenses | 87,407 | 102,004 |
Accounts payable and accrued expenses | $ 425,046 | $ 424,405 |
Long-Term Debt Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt | $ 214,017 | $ 190,477 |
Less: current portion | 34,017 | 5,477 |
Long-term debt | 180,000 | 185,000 |
Note payable to bank, revolving credit facility with interest at a variable rate (2016 - 1.8%; 2015 - 1.5%) | ||
Debt Instrument [Line Items] | ||
Total debt | $ 214,000 | $ 40,300 |
Notes payable effective interest rate | 1.80% | 1.50% |
Senior notes paid off April 2016 with interest at a fixed rate of 5.54% per annum. | ||
Debt Instrument [Line Items] | ||
Total debt | $ 0 | $ 150,000 |
Senior notes state interest rate | 5.54% | |
Other notes and amounts | ||
Debt Instrument [Line Items] | ||
Total debt | $ 17 | $ 177 |
Long-Term Debt (Schedule of Maturities of Long-term Debt) (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2017 | $ 34,017 |
2018 | 0 |
2019 | 0 |
2020 | 0 |
2021 | 180,000 |
Thereafter | $ 0 |
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Current: | |||
Federal | $ 18,963 | $ 27,768 | $ 22,738 |
State | 3,740 | 5,258 | 4,623 |
Foreign | 1,450 | 1,713 | 972 |
Current provision | 24,153 | 34,739 | 28,333 |
Deferred: | |||
Federal | 18,167 | 15,348 | 13,692 |
State | 2,533 | 2,217 | 2,013 |
Foreign | (1,580) | (540) | (262) |
Deferred provision | 19,120 | 17,025 | 15,443 |
Total income tax expense | $ 43,273 | $ 51,764 | $ 43,776 |
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Federal statutory tax expense | $ 45,098 | $ 55,020 | $ 36,836 |
State taxes, net of federal tax effect | 3,874 | 4,269 | 4,118 |
Credit for increasing research activities | (3,808) | (3,320) | (2,569) |
Deduction related to domestic production activities | (2,243) | (3,320) | (1,751) |
Valuation allowance | 231 | 565 | 2,474 |
Goodwill Impairment | 0 | 0 | 4,298 |
Change in uncertain tax positions | 117 | (1,344) | 1,099 |
Other – net | 4 | (106) | (729) |
Total income tax expense | $ 43,273 | $ 51,764 | $ 43,776 |
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Allowance for doubtful accounts | $ 495 | $ 1,089 |
Compensation | 16,684 | 15,491 |
Inventory differences | 3,977 | 4,497 |
Marketing accrual | 1,458 | 1,355 |
Stock-based compensation | 11,607 | 11,923 |
Accrued post-retirement benefit obligations | 10,106 | 9,851 |
Vacation accrual | 4,153 | 4,181 |
Warranty accrual | 5,725 | 6,052 |
Other – net | 13,044 | 12,167 |
Total deferred tax assets | 67,249 | 66,606 |
Deferred income | (5,716) | (4,907) |
Goodwill and other intangible assets | (87,146) | (79,471) |
Prepaids | (9,271) | (7,876) |
Tax over book depreciation | (70,946) | (59,308) |
Total deferred tax liabilities | (173,079) | (151,562) |
Valuation allowance | (4,159) | (3,978) |
Total net deferred tax liabilities | 109,989 | 88,934 |
DEFERRED INCOME TAXES | 719 | 0 |
Total net deferred tax liabilities | $ (110,708) | $ (88,934) |
Income Taxes Income Taxes (Valuation Allowance for Deferred Tax Asset) (Details) - Valuation Allowance of Deferred Tax Assets - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
Dec. 28, 2013 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance at beginning of period | $ 4,159 | $ 3,978 | $ 3,413 | $ 1,579 |
Charged to expenses | 231 | 565 | 2,474 | |
Adjustments to balance sheet | (50) | 0 | (640) | |
Balance at end of period | $ 4,159 | $ 3,978 | $ 3,413 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefits that would impact effective tax rate | $ 3.0 | $ 2.8 | |
Interest and penalties | 0.1 | (0.1) | $ 0.0 |
Penalties and interest accrued | 0.2 | $ 0.1 | |
Accumulated foreign earnings considered permanently reinvested | 32.4 | ||
U.S tax cost on unremitted foreign earnings | 9.6 | ||
U.S. state | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 0.1 | ||
Tax credit carryforward, amount | $ 2.0 |
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
|
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | ||
Unrecognized tax benefits, beginning of period | $ 2,858 | $ 4,250 |
Increases in positions taken in a prior period | 86 | 82 |
Decreases in positions taken in a prior period | 0 | (1,611) |
New positions taken in a current period | 792 | 793 |
Decrease due to settlements | (560) | 0 |
Decrease due to lapse of statute of limitations | (133) | (656) |
Unrecognized tax benefits, end of period | $ 3,043 | $ 2,858 |
Shareholders' Equity (Common and Preferred Stocks) (Details) - $ / shares |
Dec. 31, 2016 |
Jan. 02, 2016 |
---|---|---|
Common Stock | ||
Par value (in dollars per share) | $ 1 | $ 1 |
Authorized (shares) | 200,000,000 | 200,000,000 |
Issued (shares) | 44,078,782 | 44,158,256 |
Outstanding (shares) | 44,078,782 | 44,158,256 |
Preferred Stock | ||
Par value (in dollars per share) | $ 1 | $ 1 |
Authorized (shares) | 2,000,000 | 2,000,000 |
Issued (shares) | 0 | 0 |
Outstanding (shares) | 0 | 0 |
Shareholders' Equity (Dividends Declared and Paid per Share) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Equity [Abstract] | |||
Common shares (in dollars per share) | $ 1.09 | $ 1.045 | $ 0.99 |
Stock-Based Compensation (Valuation Assumptions) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Expected term (years) | 6 years | 6 years | 5 years |
Expected volatility: | |||
Weighted-average (percent) | 38.96% | 43.54% | 42.49% |
Expected dividend yield: | |||
Weighted-average (percent) | 3.30% | 1.94% | 2.76% |
Risk-free interest rate: | |||
Range used (percent) | 1.41% | 1.69% | 1.54% |
Stock-Based Compensation (Outstanding Stock Option Activity) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Number of Shares | |||
Outstanding, Beginning Balance (shares) | 3,358,323 | 3,335,445 | 3,630,567 |
Granted (shares) | 877,277 | 350,038 | 536,275 |
Exercised (shares) | (609,663) | (302,635) | (542,837) |
Forfeited or Expired (shares) | (121,602) | (24,525) | (288,560) |
Outstanding, Ending Balance (shares) | 3,504,335 | 3,358,323 | 3,335,445 |
Weighted-Average Exercise Price | |||
Outstanding, Beginning Balance (in dollars per share) | $ 32.09 | $ 29.93 | $ 29.94 |
Granted (in dollars per share) | 32.18 | 51.54 | 34.78 |
Exercised (in dollars per share) | 30.52 | 30.22 | 28.53 |
Forfeited or Expired (in dollars per share) | 52.24 | 39.14 | 38.55 |
Outstanding, Ending Balance (in dollars per share) | $ 31.68 | $ 32.09 | $ 29.93 |
Stock-Based Compensation Stock-Based Compensation (Non-vested Stock Option Activity) (Details) - Non-vested Stock Options |
12 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
Number of Shares | |
Outstanding, Beginning Balance (shares) | shares | 2,138,724 |
Granted (shares) | shares | 877,277 |
Vested (shares) | shares | (820,915) |
Forfeited (shares) | shares | (32,929) |
Outstanding, Ending Balance (shares) | shares | 2,162,157 |
Weighted-Average Exercise Price | |
Outstanding, Beginning Balance (in dollars per share) | $ / shares | $ 11.18 |
Granted (in dollars per share) | $ / shares | 8.80 |
Vested (in dollars per share) | $ / shares | 8.78 |
Forfeited (in dollars per share) | $ / shares | 11.74 |
Outstanding, Ending Balance (in dollars per share) | $ / shares | $ 11.12 |
Stock-Based Compensation (Stock Option Vested or Expected to Vest and are Exercisable) (Details) $ / shares in Units, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
$ / shares
shares
| |
Expected to vest | |
Number (shares) | shares | 2,049,938 |
Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 35.48 |
Weighted-Average Remaining Life in Years | 7 years 8 months 12 days |
Aggregate Intrinsic Value ($000s) | $ | $ 41,893 |
Exercisable | |
Number (shares) | shares | 1,342,178 |
Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 25.50 |
Weighted-Average Remaining Life in Years | 4 years |
Aggregate Intrinsic Value ($000s) | $ | $ 40,827 |
Stock-Based Compensation (Other Information) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Total fair value of shares vested | $ 7,206 | $ 5,554 | $ 5,735 |
Total intrinsic value of options exercised | 11,985 | 6,412 | 8,389 |
Cash received from exercise of stock options | 18,609 | 9,145 | 15,489 |
Tax benefit realized from exercise of stock options | $ 4,142 | $ 2,111 | $ 2,982 |
Stock-Based Compensation (Outstanding RSU Activity) (Details) - RSUs - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Number of Shares | |||
Outstanding, Beginning Balance (shares) | 38,500 | 26,026 | 24,526 |
Granted (shares) | 25,000 | 23,000 | 15,500 |
Vested (shares) | 0 | (10,526) | (14,000) |
Forfeited (shares) | (3,000) | 0 | 0 |
Outstanding, Ending Balance (shares) | 60,500 | 38,500 | 26,026 |
Weighted-Average Exercise Price | |||
Outstanding, Beginning Balance (in dollars per share) | $ 43.77 | $ 27.76 | $ 23.01 |
Granted (in dollars per share) | 32.06 | 51.54 | 32.23 |
Vested (in dollars per share) | 0.00 | 21.19 | 21.47 |
Forfeited (in dollars per share) | 51.54 | 0.00 | 0.00 |
Outstanding, Ending Balance (in dollars per share) | $ 38.54 | $ 43.77 | $ 27.76 |
Retirement Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Annual contributions by employer | $ 32,500 | $ 29,100 | $ 26,800 |
Stock contributions by employer | 7,200 | 6,800 | 6,400 |
Defined benefit plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Pension expense | $ 376 | $ 281 | $ 167 |
Post-Retirement Health Care (Estimated Future Benefit Payments) (Details) - Other postretirement plans $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Defined Benefit Plan Disclosure [Line Items] | |
Fiscal 2017 | $ 1,034 |
Fiscal 2018 | 1,025 |
Fiscal 2019 | 1,036 |
Fiscal 2020 | 1,060 |
Fiscal 2021 | 1,083 |
Fiscal 2022 – 2026 | 6,013 |
Expected Contributions During Fiscal 2017 | $ 1,034 |
Post-Retirement Health Care (Narrative) (Details) - Other postretirement plans |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rates at fiscal year-end (percent) | 4.00% | 4.20% | 3.80% |
Discount rate, used to determine net periodic benefit cost (percent) | 4.00% |
Post-Retirement Health Care (Components of Net Periodic Post-retirement Benefit Cost) (Details) - Other postretirement plans $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Defined Benefit Plan Disclosure [Line Items] | |
Service cost | $ 742 |
Interest cost | 825 |
Amortization of net (gain)/loss | 25 |
Net periodic post-retirement benefit cost/(income) | $ 1,592 |
Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Operating Leases | |||
2017 | $ 27,671 | ||
2018 | 20,678 | ||
2019 | 14,780 | ||
2020 | 10,149 | ||
2021 | 7,813 | ||
Thereafter | 13,535 | ||
Total minimum lease payments | 94,626 | ||
Rent expense | $ 33,500 | $ 34,000 | $ 48,000 |
Guarantees, Commitments and Contingencies (Details) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Financing instruments, insurance policies and payment obligations | |
Guarantor Obligations [Line Items] | |
Letters of credit | $ 9 |
Trade letters of credit and bankers' acceptances | |
Guarantor Obligations [Line Items] | |
Letters of credit | $ 4 |
Reportable Segment Information (Net Sales By Product Category) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 02, 2016 |
Jan. 03, 2015 |
|
Revenue from External Customer [Line Items] | |||
Net sales | $ 2,203,489 | $ 2,304,419 | $ 2,222,695 |
Systems and storage | |||
Revenue from External Customer [Line Items] | |||
Net sales | 904,748 | 1,140,369 | 1,156,170 |
Seating | |||
Revenue from External Customer [Line Items] | |||
Net sales | 707,609 | 561,392 | 498,389 |
Other | |||
Revenue from External Customer [Line Items] | |||
Net sales | 91,528 | 76,043 | 84,490 |
Hearth Products | |||
Revenue from External Customer [Line Items] | |||
Net sales | $ 499,604 | $ 526,615 | $ 483,646 |
Subsequent Events (Details) - Subsequent event - Manufacturing Facility Closing - Colville, Washington $ in Millions |
Feb. 06, 2017
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Expected savings | $ 2.8 |
Estimated pre-tax charges | $ 6.7 |
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