HNI Corporation

Hello and thank you for standing by. My name is Bella and I will be your conference operator today. At this time, I would like to welcome everyone to HNI Corporation fourth quarter and fiscal year end 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star 1 again. I would now like to turn the conference over to Matt McCall. You may begin.

Good morning. My name is Matt McCall. I'm Vice President, Investor Relations and Corporate Development for H&I Corporation. Thank you for joining us to discuss our fourth quarter and fiscal year 2025 results. With me today are Jeff Loringer, Chairman, President, and CEO, and VP Berger, Executive Vice President and CFO. Copies of our financial news release and non-GAAP reconciliations are posted on our website. Statements made during this call that are not strictly historical facts are forward-looking statements, which are subject to known and unknown risk. Actual results could differ materially. The financial news release posted on our website includes additional factors that could affect actual results. The corporation assumes no obligation to update any forward-looking statements made during the call. I'm now pleased to turn the call over to Jeff Laundrie.

yeah good morning and thank you for joining us 2025 was a seminal year for h i corporation our members delivered excellent results as we reported a fourth straight year of double-digit non-gap eps growth despite persistent soft and uncertain macro conditions the positive momentum of our strategies the benefits of our diversified revenue streams our ongoing focus on items within our control and the merits of our customer-first business model continue to deliver strong shareholder value. And late in the year, we completed the acquisition of Steelcase. This combination will not only transform our company, but also the workplace furnishings industry. On today's call, we will review our fourth quarter and full year 2025 results and provide some commentary around our expectations for 2026 and beyond, including the benefits of the Steelcase acquisition. Before I discuss our recent performance, I want to reflect on the fundamental improvements we have driven at HNI. Our transformation has taken multiple steps and years. I will begin with workplace furnishings where margins have been reset. Three years ago, our legacy workplace furnishings business launched a profitability improvement initiative that was instrumental in expanding operating margin nearly 1000 basis points. In 2023, price cost recovery following the period of elevated inflation drove the first phase of expansion. Since then, multiple portfolio management moves, ongoing network optimization efforts, KII synergies, and the benefits of ramping our Mexico facility have supported consistent profitability improvement. Based on the initiatives already underway, including the recently announced plans to close our Wayland New York manufacturing facility, We have line of sight to continued operating margin expansion in the coming years. And our margin expansion story is increasingly supported by affirming macroeconomic picture in our workplace furnishings segment. I will provide more macro commentary later in the call. Shifting to our residential building product segment, our evolution started with the strategic shifts following the great financial crisis. Since then, we have adjusted our cost structure, fully embraced lean manufacturing, and continued to pursue a vertically integrated business model with the leading brands in all product categories. The result was more than 1,000 basis points of operating margin expansion over the decade post-2009. In addition, since 2019, the efficiency, nimbleness, and uniqueness of our building products business have supported consistently strong profitability with sustained operating margins in the mid to high teens. This consistency of both margins and cash flow are foundational elements to H&I's financial strength. We expect this profitability and cash generation to continue into 2026 and beyond. More recently, our focus in residential building products has shifted to the front end of the business and are driving top-line growth. Structural changes have been implemented to organize around the customer and ensure we have laser-focused go-to-market strategies to support our growth initiatives. These front end investments are paying off in the absence of cyclical support. In 2025, we reported segment revenue growth of 6% despite continued weakness in the new home market. We expect to outperform again in 2026. This historical context helps set the stage as we enter the next exciting chapter of the H&I story. The acquisition of Steelcase unites two industry leaders to meet the dynamic marketplace and evolving needs of the workplace, and accelerating in-office work trends. We have brought together two highly respected companies with shared values, talented teams, strong financial profiles, and highly complementary capabilities, innovation, thought leadership, and operational excellence chief among them. This strong foundation combined with expected synergies will accelerate our ability to invest in long-term operational enhancements, digital transformation, customer-centered buying experiences, and products to meet evolving customer needs. Our integration efforts are underway, and we are leveraging a disciplined and proven approach informed by recent experience, while continuing to build on the iconic brands for which both companies are widely respected. H&I will now have total revenue of more than $5.8 billion. Including all synergies, total adjusted EBITDA will be nearly $750 million, and annual free cash flow will approximately be $350 million. We are now the market leader in both of our industries, workplace furnishings and hearth products. I can report that the integration of the Steelcase acquisition is off to a strong start. Six months following the announcement, we're even more confident in our move to add Steelcase to the H&I family. The complimentary go-to-market nature of the two businesses from a capability, product, brand, customer, and cultural perspective has been reinforced as we have begun to work together. We also remain confident in our ability to deliver the targeted synergies of $120 million and drive margin expansion at Steelcase. Our current synergy projections are focused on the Americas business and do not include any revenue synergies. And importantly, we are laser focused on minimizing any front end disruption across our workplace furnishings businesses. As we have consistently stated, there are no plans to change dealer partnerships, sales forces, or brand distribution. And as I've been traveling and engaging with our teams, it is clear that this continuity is being received positively by customers, industry influencers, and our dealers. Now I would turn the call over to VP to provide some additional detail about 2025, discuss our outlook for the first quarter of 2026, and give some thoughts on how we see the full year playing out. I will then provide a longer-term perspective on the opportunities surrounding our businesses before we open the call to your questions. VP?