HNI Corporation is an Iowa corporation incorporated in 1944. The Corporation
is a provider of office furniture and hearth products. Office furniture products
include panel-based and freestanding furniture systems and complementary products
such as 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.
Nine operating units, marketing under various brand names, participate in the
office furniture industry. These operating units include: The HON Company LLC
("HON"), Allsteel Inc., Maxon Furniture Inc., The Gunlocke Company
L.L.C., Paoli LLC, Hickory Business Furniture, LLC (“HBF”), Artco-Bell
Corporation ("Artcobell"), HNI Hong Kong Limited (“Lamex”)
and BP Ergo Limited ("BP Ergo"). Each of these operating units provides
products which are sold through various channels of distribution and segments
of the industry. HNI International Inc. (“HNI International”) sells
office furniture products manufactured by the Corporation’s operating
units in select markets outside the United States and Canada.
The operating unit Hearth & Home Technologies LLC (“Hearth &
Home”) participates in the hearth products industry. The retail and distribution
brand for this operating unit is Fireside Hearth & Home.
The Corporation has been committed to systematically eliminating waste through
its process improvement approach known as Rapid Continuous Improvement (“RCI”),
which focuses on streamlining design, manufacturing and administrative processes.
The Corporations RCI program has contributed to increased productivity, lower
costs, improved product quality and enhanced workplace safety. In addition,
the Corporations RCI efforts enable it to offer short average lead times, from
receipt of order to delivery and installation, for most products.
The Corporations product development efforts are focused on developing and
providing relevant and differentiated solutions delivering quality, aesthetics
and style.
An important element of the Corporations success has been its member-owner
culture, which has enabled it to attract, develop, retain and motivate skilled,
experienced and efficient members (i.e., employees). Each of the Corporations
eligible members has the opportunity to own stock in the Corporation through
a number of stock-based plans, including a member stock purchase plan and a
profit-sharing retirement plan, which drives a unique level of commitment to
the Corporation’s success throughout the workforce.
The U.S. office furniture market consists of two primary channels—the
contract channel and the supplies-driven channel. The contract channel has traditionally
been characterized by sales of office furniture and services to large corporations,
primarily for new office facilities, relocations or department or office redesigns,
which are frequently customized to meet specific client and designer preferences.
Contract furniture is generally purchased through office furniture dealers who
typically prepare a custom-designed office layout emphasizing image and design.
The selling process is complex and lengthy and generally has several manufacturers
competing for the same projects.
The supplies-driven channel of the market, in which the Corporation is a leader,
primarily represents smaller orders of office furniture purchased by small/medium
businesses on the basis of price, quality, selection and speed and reliability
of delivery. Office products dealers, wholesalers and national office product
distributors are the primary distribution channels in this market. Office furniture
and products dealers publish content on the internet and periodic catalogs displaying
office furniture and products from various manufacturers.
The Corporation also competes in the hearth products industry, where it is
a market leader. Hearth products are typically purchased by builders during
the construction of new homes and homeowners during the renovation of existing
homes. Both types of purchases involve seasonality with remodel/retrofit activity
being concentrated in the September to December time-frame. Distribution is
primarily through independent dealers, who may buy direct from the manufacturer
or from an intermediate distributor.
The Corporations strategy is to build on its position as a leading manufacturer
of office furniture and hearth products in North America and pursue select global
markets where opportunities exist to create shareholder value. The components
of this growth strategy are to introduce new products, build brand equity, provide
outstanding customer satisfaction by focusing on the end-user, strengthen the
distribution network, respond to global competition, pursue complementary strategic
acquisitions, enter markets not currently served and continually reduce costs.
The Corporation’s strategy has a dual focus: working continuously to
extract new growth from its core markets while identifying and developing new,
adjacent potential areas of growth. The Corporation focuses on extracting new
growth from each of its existing businesses by deepening its understanding of
end-users, using new insights gained to refine branding, selling and marketing
and developing new products to serve them better. The Corporation also pursues
opportunities in potential growth drivers related to its core business, such
as vertical markets or new distribution models