HNI Corporation (HNI) today announced sales for the first quarter ended April 2, 2016 of $501.0 million and net income of $11.8 million, or $0.26 per diluted share. Non-GAAP net income per diluted share, which excludes restructuring and transition costs, improved 48 percent from the prior year quarter to $0.31.

FirstQuarter Summary Comments
"We delivered very strong results which exceeded our expectations for the first quarter. Operating margins increased in both our office furniture and hearth products segments driven by strong operational execution. We continue to compete well in our markets and are focused on driving long-term shareholder value," said Stan Askren, HNI Corporation Chairman, President and Chief Executive Officer.

First Quarter Summary Comments

Consolidated net sales decreased $22.4 million or 4.3 percent to $501.0 million. Compared to prior year quarter, the acquisition of a small office furniture company increased sales $4.7 million. On an organic basis, sales decreased 5.2 percent.
Non-GAAP gross margin increased 190 basis points compared to prior year driven by strong operational performance, favorable material costs and price realization, partially offset by lower volume.
Selling and administrative expenses, as a percentage of sales, increased 80 basis points due to the impacts of lower volume and higher incentive based compensation partially offset by broad based cost reductions.
The Corporation recorded $2.9 million of restructuring and transition costs in connection with previously announced closures and structural realignment. First quarter 2015 included $1.5 million of restructuring and transition costs.
First quarter sales decreased $20.1 million or 4.9 percent to $387.3 million. Compared to prior year quarter, an acquisition increased sales $4.7 million. On an organic basis, sales decreased 6.1 percent. Sales for the quarter decreased in both our supplies-driven and contract channels.
First quarter non-GAAP operating profit increased $1.3 million or 6.1 percent. Strong operational performance, favorable material costs, price realization, and cost reductions were partially offset by lower volume and higher incentive based compensation.
First quarter sales decreased $2.4 million or 2.0 percent to $113.7 million. Growth in the new construction channel was offset by the continued decline in the retail pellet channel.
For the quarter, non-GAAP operating profit increased $1.3 million or 10.1 percent. Strong operational performance, favorable material costs, price realization, and cost reductions were partially offset by lower volume and higher incentive based compensation.

Outlook
"I am very pleased with our strong performance in the first quarter. We are seeing signs of modest market improvement. We continue to compete well. We are confident the investments we are making in our business will continue to generate strong returns for our shareholders. I am excited about our ability to deliver long-term profitable growth," said Mr. Askren.

The Corporation estimates sales to be down 4 to 7 percent in the second quarter over the same period in the prior year, including the impacts of acquisitions and divestitures. Non-GAAP earnings per share are anticipated to be in the range of $0.54 to $0.59 for the second quarter and $2.40 to $2.70 for the full year, which excludes restructuring and transition costs.