"First and foremost, our focus during this crisis is on the well-being of our members. To protect our teams, we have implemented workplace measures consistent with guidelines from the Centers for Disease Control and Prevention. While the situation is dynamic, at this point we continue to operate at our primary manufacturing locations," stated Jeff Lorenger, HNI Corporation, Chairman, President, and Chief Executive Officer. "We entered this crisis in a position of strength. We have low debt levels and possess liquidity equivalent to more than two years of free cash flow. While the ultimate impact of the outbreak is uncertain, we are confident in our ability to effectively weather this crisis."

Liquidity Position
At the end of the first quarter 2020, the Corporation had $233 million in total debt, representing a gross leverage ratio of 1.0x as calculated under the Corporation’s lending agreements, which is well below the 3.5x gross leverage covenant in the existing agreements with the Corporation’s lenders. Liquidity, as measured by the combination of cash and available capacity on the Corporation’s lending facilities, totaled nearly $350 million. Of the total debt outstanding, $100 million is private placement notes (half matures in 2025 and half in 2028), with the remainder of funds drawn on the $450MM revolving credit facility (matures in 2023). "Our liquidity position is strong, and we are taking actions to ensure the long-term health of our organization. Accordingly, we are reducing operating costs, lowering capital expenditures, and temporarily suspending our share repurchase activity to support free cash flow," said Mr. Lorenger.

Suspending Guidance
The Corporation is suspending its fiscal 2020 sales and earnings forecast due to the uncertainty caused by the coronavirus pandemic. "The economic volatility from this crisis is challenging our sales visibility and ability to provide earnings guidance. That said, we remain confident in our long-term strategic direction," Mr. Lorenger concluded.

Upcoming Communication
The Corporation’s first quarter for fiscal 2020 ended on March 28th. Results for the quarter and further updates on the Corporation’s response to this pandemic will be disclosed with the earnings release in late April.