HNI CORP (HNI) Business

Item 1.  Business

General

HNI Corporation has been improving where people live, work, and gather for more than 80 years. HNI is a manufacturer of workplace furnishings and residential building products. Within workplace furnishings, the Corporation is the thought leader in commercial furnishings and the preeminent global designer, innovator, and provider of workplace solutions going to market under unique brands serving multiple channels and customers from the largest multinational companies to small local businesses. Within residential building products, the Corporation is the nation's leading manufacturer and marketer of hearth products. The Corporation utilizes a multi-faceted go-to-market model to deliver value to customers via various brands and selling models. HNI is focused on growing its existing businesses while seeking out and developing new opportunities for expansion.

On December 10, 2025 the Corporation acquired by merger Steelcase Inc. ("Steelcase"), a global design and furniture company headquartered in Grand Rapids, Michigan, for total consideration of cash and HNI common stock valued at $1.9 billion. The highly complementary geographic footprints and dealer networks of HNI and Steelcase bolster the combined company's ability to serve more customers across diverse industry segments. The Corporation has included the financial results of Steelcase in the Consolidated Financial Statements starting as of the date of acquisition. References to "legacy" HNI businesses in this report exclude the acquisition of Steelcase and its impact on the Corporation's businesses.

The Corporation's two reportable segments are Workplace Furnishings and Residential Building Products.

The various Workplace Furnishings businesses sell similar products that include panel-based and freestanding furniture systems, seating, benching, tables, architectural products, storage, ancillary products, hospitality products and social collaborative items. These products are sold primarily through a system of independent dealers, company-owned dealers, and office product distributors, but also directly to end-user customers and federal, state, and local governments.

The Residential Building Products businesses manufacture and sell a full array of gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, outdoor fire pits and fire tables, and accessories. These products are sold through a national system of independent dealers and distributors, as well as Corporation-owned installing distribution and retail outlets.

In fiscal 2025, including Steelcase's financial results from the acquisition date, the Corporation had net sales of $2.8 billion, of which $2.2 billion or 76 percent was attributable to workplace furnishings sales and $0.7 billion or 24 percent was attributable to residential building products sales.

Incorporated in 1944, HNI maintains its corporate headquarters in Muscatine, Iowa. It is organized into operating units with offices, manufacturing plants, distribution centers, and sales showrooms primarily in North America, Asia and Europe. See "Item 2. Properties" for additional related discussion.

For further information with respect to acquisitions, divestitures, operating segment information, and the Corporation’s operations in general, refer to "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II of this report and the following sections in the Notes to Consolidated Financial Statements: "Note 1. Nature of Operations," "Note 4. Acquisitions and Divestitures," and "Note 15. Reportable Segment Information."

Markets

The Corporation competes in the workplace furnishings and residential building products markets principally by providing compelling solutions to customers. A multi-branded approach allows the Corporation to deliver a broad array of products and services to a large cross-section of customers. The Corporation provides value products designed to be among the best in their price range for product quality and performance, along with superior customer service and short lead-times. The Corporation also drives research-based insights into products, applications and experiences that help organizations around the world amplify the

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performance of their people, teams and enterprises. A focus on delivering innovative solutions and exceeding customer expectations is a competitive advantage and a reflection of the Corporation’s ongoing investment in its brands, research and development efforts, efficient manufacturing operations, and extensive distribution network.

Workplace Furnishings

The workplace furnishings market, in which the Corporation is the market leader, consists of two primary channels — the contract channel and the small and medium-sized business ("SMB") channel. End-users across both channels represent a mix of commercial, health care, government, and education customers. While the Corporation primarily competes in the United States, it also distributes products to other countries in regions throughout the globe including North America, Europe, the Middle East, Africa and Asia Pacific.

The contract channel has traditionally been characterized by sales of office furniture and services to large corporations and organizations, primarily for new office facilities, relocations, and office redesigns. Sales made through the contract channel are frequently customized to meet specific client and architect and designer preferences. End users generally purchase through independent office furniture dealers who prepare a custom-designed office layout emphasizing image and design. The selling process is complex, lengthy, and generally attracts several manufacturers competing for the same projects.

The SMB channel primarily represents smaller orders of office furniture that are less likely to involve an architect or designer. Sales in this channel are driven on the basis of price, product quality, selection, and the speed and reliability of delivery. Independent dealer and national office product distributors are the primary distribution channels in this market.

The workplace furnishings industry is characterized by intense competition, with a significant number of competitors offering similar products. The Corporation competes with large workplace furnishings manufacturers, which cover a substantial portion of the North America market share in the workplace furnishings market. These competitors include manufacturers such as MillerKnoll, Inc., Haworth, Inc., The Global Group, Krueger International, Inc., and Teknion Corporation, as well as global importers. The Corporation faces significant price competition from its competitors and may encounter competition from new market entrants.

Residential Building Products

The Corporation also competes in the residential building products industry, where it is the North American market leader in hearth products. 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 exhibit seasonal trends with remodel and retrofit activity being particularly concentrated in the September to December period. Distribution is primarily effected through independent and company-owned installing distributors and retail outlets.

The highly competitive hearth products market features products manufactured by a number of national and regional competitors. The Corporation competes against a broad range of manufacturers, including Travis Industries, Inc., Innovative Hearth Products, Wolf Steel Ltd. (Napoleon), and FPI Fireplace Products International Ltd. (Regency).

Strategy

The Corporation’s strategy is to build on its position as the leading manufacturer of workplace furnishings and residential building products in its markets.

The foundation of the Corporation’s strategy continues to be its distinct member culture, which has enabled HNI to attract, develop, retain, and motivate skilled, experienced, and efficient members who are its employees, and which drives a unique level of commitment to the Corporation’s success. The Corporation aims to leverage this culture to enable profitable growth by focusing members’ efforts on the following three pillars:

•Customer-First Mindset (focus on the customer) – The journeys customers take buying and using workplace furnishings and residential building products continue to rapidly evolve — presenting new opportunities to better serve them. The key to capitalizing on these changes is a deep understanding of customers and thought leadership about the evolving role of the office. To that end, the Corporation continues to broaden its involvement in and understanding of the entire customer journey, by investing in artificial intelligence ("AI"), data analytics, digital assets, branding, eCommerce capabilities, and market coverage. This customer-first mindset allows the Corporation to identify and take advantage of new and developing market dynamics.

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•Effortless Winning Experiences (simplify the buying process) – Customers continue to raise their expectations and demand more effortless experiences. Buying office furniture and hearth products can be complicated and time-consuming. The Corporation’s deep understanding of the customer buying journey incorporates AI, other technology and digital assets to help customers navigate the buying process more quickly and with reduced effort. The Corporation has scale, price point breadth, product depth, and resources to lead this change.

•Own Operational Excellence (leverage lean heritage) – All HNI members embrace the principles of lean manufacturing. Members utilize Rapid Continuous Improvement (RCI), which scrutinizes every facet of the business to identify areas of waste, and then refines and streamlines. RCI can be seen in action throughout the Corporation’s value chain from the manufacturing floor to the administrative offices to customer interactions, as members always look to find a better, more efficient, and more environmentally-friendly approach. This focus on RCI benefits stakeholders as the Corporation consistently seeks to deliver productivity and cost savings that allow it to grow earnings and invest in the future.

Management believes that the skillful execution of these strategic initiatives will position the Corporation for continued success by supporting strong organic sales growth, margin expansion, improved returns, and strong free cash flow.

Sales

Workplace Furnishings

The Corporation designs, manufactures, and markets a broad range of workplace furnishings. The Corporation offers a complete line of panel-based and freestanding office furniture systems, seating, benching, tables, architectural products, storage, ancillary products, hospitality products, and social collaborative items to meet the needs of a wide spectrum of organizations. Through its broad product offerings the Corporation is able to service business furniture needs in virtually any setting, including private office, open plan, conference rooms, training areas, cafes, lounges, collaborative spaces, health care, and hospitality spaces, among many others. The Corporation is well placed to serve the largest multinational customers to the smallest local business. The Corporation possesses significant expertise and vertical manufacturing capabilities that afford it the flexibility to innovate, design, and manufacture new products in-house to meet changing market needs.

To meet the demands of various markets, the Corporation’s products are sold primarily under the following widely recognized brands:

Allsteel®

AMQ®

Beyond®

Coalesse®

D’style®

David Edward®

Designtex®

Etc.®

Gunlocke®

HALCON™

HBF®

HBF Textiles®

HON®

Interwoven®

Kimball®

Kimball®Hospitality

National®

Orangebox®

Smith System®

Steelcase®

Viccarbe®

The Corporation sells its products through various distribution channels, including the following:

•Independent and company-owned office products dealers that specialize in the sale of office furniture and/or office products to commercial, government, education, and health care entities.

•Office product distributors that sell furniture and office supplies through a national network of dealerships and sales offices, as well as through online and retail office products stores.

•Direct sales of products to federal, state, and local government offices, or in certain circumstances a lead selling relationship with an end-user.

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The Corporation’s workplace furnishings sales force consists of sales managers and salespeople who collectively provide broad sales coverage. Sales managers and salespeople are compensated by a combination of salary and variable performance compensation.

The Corporation maintains marketing partnerships with a number of companies, including Arper, Audo North America, Carl Hansen & Son, Corral, EMU, Extremis, FLOS, the Frank Lloyd Wright Foundation, Grado, Kartell, Kwickscreen, Logitech, m.a.d., Mattiazzi, Microsoft, Moduform Inc, Moooi, Moooi Carpets, Normann Copenhagen, Segis, SnowSound, Spaceti, Tom Dixon, Unika Vaev, Vanerum, VergeSense, Wendelbo, West Elm, Zilenzio, and Zoom. These partnerships are intended to promote the marketing of additional products and services to the Corporation's dealers and customers that are complementary to the Corporation's products and services and to leverage the Corporation's scale. These partnerships take several forms, the most common of which involves purchasing and reselling the partner’s products to the Corporation's dealers and customers. Under other arrangements, the Corporation markets the partner’s products to its own dealers and customers and receives a fee from the partner. The Corporation may also transport and deliver these products to its own dealers and customers for a fee. In addition, the Corporation also maintains marketing partnerships through which it co-develops products with its partner that the Corporation manufactures or sources from third parties or through which the Corporation and the partner agree to co-market the Corporation's products and services to customers. Most of the Corporation's marketing partnerships are on a regional basis.

Residential Building Products

The Corporation’s residential building products businesses include the Hearth & Home Technologies LLC ("Hearth & Home") operating unit. Hearth & Home is North America’s largest manufacturer and marketer of prefabricated fireplaces, hearth stoves, and related products. These products are primarily for the home and are sold under the following widely recognized brands:

Forge & FlameTM

Harman®

Heat & Glo®

Heatilator®

Majestic®

Monessen®

PelPro®

Quadra-Fire®

SimpliFire®

StellarTM

The Outdoor GreatRoom Company®

Vermont Castings®

The Corporation’s line of hearth products includes a full array of gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, outdoor fire pits and fire tables, and accessories. Heat & Glo®, Heatilator®, Majestic®, Monessen®, SimpliFire® and StellarTM are brand leaders in the home fireplace market, consisting of gas, wood, and electric fireplaces. The Corporation is a leader in "direct vent" fireplaces, which replaces the chimney-venting system used in traditional fireplaces with a less expensive vent through the roof or an outer wall. In addition, the Corporation is a market leader in wood and pellet-burning stoves with its Forge & FlameTM, Harman®, ®PelPro®, Quadra-Fire®, and Vermont Castings® product lines, which provide home heating solutions using renewable fuels.

Hearth & Home sells its products through independent dealers, distributors, and Corporation-owned installing distribution and retail outlets. The distribution and retail brand of this operating unit is Fireside Hearth & Home. The business has a field sales organization of sales managers, salespeople, and independent manufacturers’ representatives.

Largest Customers

In fiscal 2025, the Corporation’s five largest customers accounted for approximately 13 percent of its consolidated net sales. No single customer or group of related customers accounted for 10 percent or more of the Corporation’s consolidated net sales in fiscal 2025, and management does not consider the Corporation’s operations or financial performance to be materially dependent on any individual customer. The substantial purchasing power exercised by large customers may adversely affect the prices at which the Corporation can offer its products.

Joint Ventures and Other Equity Investments

The Corporation may occasionally enter into joint ventures and other equity investments to expand or maintain its geographic presence, support its distribution network, or invest in new business ventures, complementary products or services. The Corporation's share of the earnings from these joint ventures is recorded in "Other non-operating income, net" in the Consolidated Statements of Comprehensive Income. See "Note 19. Investments in Unconsolidated Affiliates" in the Notes to the Consolidated Financial Statements for additional information.

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Resources

Manufacturing

As of January 3, 2026, the Corporation has manufacturing and distribution operations throughout North America (in the United States and Mexico), Europe (in the Czech Republic, France, Germany, Spain and the United Kingdom) and in Asia (in China, India and Malaysia).

The Corporation purchases raw materials, components, and finished goods from a variety of suppliers, most of which are generally available from multiple sources. Major raw materials and components include steel, aluminum, zinc, lumber, veneer, particleboard, textiles, paint, hardware, glass, plastic products, packaging, foam, and fiberglass.

Since its inception, the Corporation has focused on making its manufacturing facilities and processes more flexible while reducing cost, eliminating waste, and improving product quality. The Corporation applies the principles of RCI and a lean manufacturing philosophy to leverage the creativity of its members to reduce or eliminate costs. The application of RCI has increased productivity by reducing set-up, processing times, square footage, inventory levels, product costs, and delivery times, while improving quality and enhancing member safety. The Corporation’s RCI process involves members, customers, and suppliers. Manufacturing also plays a key role in the Corporation’s concurrent research and development process to design new products for ease of manufacturability.

Research and Development

The Corporation’s research and development efforts are primarily focused on developing relevant and differentiated end-user solutions emphasizing quality, aesthetics, style, sustainable design, and reduced manufacturing costs. The Corporation seeks to accomplish these objectives through improving existing products, extending product lines, applying ergonomic research, improving manufacturing processes, and leveraging alternative materials.

The Corporation's research has helped it develop social, spatial and informational insights into work effectiveness. The Corporation maintains collaborative relationships with external world-class innovators to expand and deepen its understanding of how people work. Understanding patterns of work enables the Corporation to identify and anticipate user needs globally. The Corporation's design teams explore and develop prototypical solutions to address these needs.

The Corporation's marketing team evaluates product concepts using several criteria, including financial return metrics, and chooses which products will be developed and launched. Designers then work closely with engineers and suppliers to co-develop products and processes that incorporate innovative user features with efficient manufacturing practices. Products are tested for performance, quality and compliance with applicable local standards and regulations.

The Corporation conducts its research and development efforts at both the corporate and operating unit levels. See "Note 2. Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements for amounts that the Corporation has invested in research and development.

Intellectual Property

The Corporation holds a significant number of patents in various countries related to its business operations. The Corporation applies for patent protection when it believes the expense of doing so is justified and the duration of its registered patents is adequate to protect these rights. While the acquisition of patents reflects the Corporation's position in the market as an innovation leader, the Corporation believes that no individual patent or group of related patents is material to the Corporation’s business as a whole. The Corporation also occasionally enters into license agreements to pay royalties to third parties for the use of patents on products, designs or process technology, none of which are considered material to its business.

The Corporation also holds a number of trademarks that are important to its identity and recognition in the marketplace and applies for trademark protection when it believes the expense of doing so is justified. The Corporation actively protects trademarks it believes have significant value. The Corporation believes that the AMQ®, Allsteel®, Coalesse®, Designtex®, Forge & Flame™, HALCON™, Heat & Glo®, Heatilator®, HON®, Kimball®, National®, Orangebox®, Smith System®, and Steelcase® trademarks are material to its business and that, other than with respect to those trademarks, neither the loss of any individual trademark or group of related trademarks would materially adversely affect the Corporation’s business as a whole.

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Environmental Regulation and Sustainability

The Corporation is subject to a variety of federal, state, local, and foreign environmental regulations, which it refers to as environmental laws, relating to the protection of the environment, including those governing the use of materials and substances in products, the management of wastes, the emission of pollutants from its operations, and the remediation of contamination associated with past releases of hazardous substances. The Corporation maintains a team of environmental, health, and safety professionals responsible for monitoring compliance with applicable regulations and managing environmental risks across its operations. These professionals work in coordination with facility leadership, legal counsel, and external advisors to support compliance activities, assess risk, and address environmental matters as they arise. The Corporation’s environmental objective is to reduce and, when practicable, eliminate the human and ecosystem impacts of materials and manufacturing processes.

Compliance with existing environmental laws has not had a material effect on the capital expenditures, earnings, or competitive position of the Corporation to date and is not expected to have a material effect in the near future. However, there is no assurance that environmental regulations will not change in future periods or that the Corporation will not incur material additional costs to comply with such regulations.

Under certain environmental laws, the Corporation could be held liable, without regard to fault, for remediation costs associated with environmental contamination related to its current or historical operations. The Corporation could also be subject to third-party property damage or personal injury claims or enforcement actions relating to alleged violations of environmental laws. The Corporation is a party to, or otherwise involved in, proceedings relating to several contaminated properties being investigated and remediated under environmental laws, including as a potentially responsible party in several Superfund site cleanups. Based on the Corporation's information regarding the nature and volume of wastes allegedly disposed of or released at these properties, the total estimated cleanup costs and other financially viable potentially responsible parties, the Corporation does not believe the costs to it associated with these properties will be material, either individually or in the aggregate. The Corporation has established environmental reserves that it believes are adequate to cover its estimated remediation obligations based on information currently available. Actual costs may differ from these estimates due to factors including changes in regulatory requirements or cleanup standards, discovery of additional contamination, the financial viability of other potentially responsible parties, or other unforeseen circumstances.

Beyond compliance with applicable laws and regulations, the Corporation considers environmental and sustainability-related factors in managing its operations and business processes as part of its overall approach to risk management and governance. For additional information regarding the Corporation’s voluntary sustainability initiatives, see the Corporate Responsibility report available on its website.

Government Regulation

As a federal and state contractor, the Corporation is subject to extensive and complex government regulations, compliance requirements, and oversight. These regulations include, but are not limited to, the Federal Acquisition Regulation (FAR), Defense Federal Acquisition Regulation Supplement (DFARS), cost accounting standards, cybersecurity requirements such as those mandated by the Cybersecurity Maturity Model Certification (CMMC), and state-specific regulations. The Corporation maintains a team of contract compliance and procurement professionals responsible for developing controls and monitoring compliance with applicable regulations across the Company’s operations. These professionals work in coordination with brand leadership, legal counsel, and external advisors to support compliance activities and address procurement matters as they arise.

Compliance with existing procurement laws has not had a material effect on the capital expenditures, earnings, or competitive position of the Corporation to date and is not expected to have a material effect in the near future. However, non-compliance with these regulatory requirements could result in significant consequences, including contract termination, suspension or debarment from future contracts, penalties, fines, or claims for damages and repayment. Additionally, changes in government regulations, policies, or priorities could adversely affect the timing, value, and scope of our federal contracts. Due to the constantly evolving regulatory environment and the potential for heightened government oversight in the public contracting arena, the Company’s business, financial condition, and results of operations could be materially and adversely affected.

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Human Capital

As of January 3, 2026, the Corporation employed approximately 19,500 persons, including approximately 1,000 temporary personnel. Approximately 2,500 of the Corporation's employees are covered by collective bargaining agreements, unions, or workers' councils, representing approximately 12% of the total workforce, including 30 in the United States.

The Corporation’s goal is for every member to always feel included and heard. The Corporation believes in:

•Unique perspectives. Diverse backgrounds bring unique perspectives, helping to drive innovation and growth.

•Fair and inclusive treatment. The Corporation seeks to treat all members with fairness and respect, ensuring all voices are heard, and allowing everyone to make meaningful contributions.

•Transparent communication. Members at every level have frequent opportunities to raise and address concerns with company leaders and attend meetings to learn and ask questions about the business.

For further information regarding its member culture, initiatives, and goals, see the Corporation’s Corporate Social Responsibility report available on its website.

Member Development

All members have the opportunity to achieve and succeed in their careers. The Corporation invests in apprenticeships, on-the-job training, robust performance and talent-management processes, and leadership development programs.

Member Compensation and Benefits

The Corporation’s compensation and benefits programs are competitive and equitable, designed to attract, retain, and motivate its members. This creates a strong culture of shared responsibility, empowered accountability for all outcomes, and an ongoing enthusiasm for improvement.

The Corporate Social Responsibility report does not form a part of and is not incorporated into this Annual Report on Form 10-K.

Available Information

The Corporation's website address is www.hnicorp.com. HNI's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports, are made available free of charge through its website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). The information on or accessible through HNI's website is not a part of, or incorporated by reference into, this report.

Forward-Looking Statements

Statements in this report to the extent they are not statements of historical or present fact, including statements as to plans, outlook, objectives, and future financial performance, are "forward-looking" statements, within the meaning of Section 21 of the Securities Exchange Act of 1934, and Section 27A of the Securities Act of 1933. Words such as "anticipate," "believe," "could," "confident," "estimate," "expect," "forecast," "hope," "intend," "likely," "may," "plan," "possible," "potential," "predict," "project," "should," "will," "would," and variations of such words and similar expressions identify forward-looking statements.

Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Corporation’s actual results in the future to differ materially from expected results. The most significant factors known to the Corporation that may adversely affect the Corporation’s business, operations, industries, financial position, or future financial performance are described later in this report under the heading "Item 1A. Risk Factors." The Corporation cautions readers not to place undue reliance on any forward-looking statement, which is based necessarily on assumptions made at the time the Corporation provides such statement, and to recognize that forward-looking statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results due to the risks and uncertainties described elsewhere in this report, including but not limited to: the Corporation’s ultimate realization of the anticipated benefits of the Steelcase acquisition; disruptions in the global supply chain; the effects of prolonged periods of inflation and rising interest rates; labor shortages; the levels of office furniture needs and housing starts; overall demand for the Corporation’s products; general economic and market conditions in the United States and internationally; industry

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and competitive conditions; the consolidation and concentration of the Corporation’s customers; the Corporation’s reliance on its network of independent dealers; changes in trade policy; changes in raw material, component, or commodity pricing; market acceptance and demand for the Corporation’s new products; changing legal, regulatory, environmental, and health care conditions; the risks associated with international operations; the potential impact of product defects; the various restrictions on the Corporation’s financing activities; an inability to protect the Corporation’s intellectual property; cybersecurity threats, including those posed by potential ransomware attacks; impacts of tax legislation; force majeure events outside the Corporation’s control, including those that may result from the effects of climate change; and other risks as described under the heading "Item 1A. Risk Factors," as well as others that the Corporation may consider not material or does not anticipate at this time. The risks and uncertainties described in this report, including those under the heading "Item 1A. Risk Factors," are not exclusive and further information concerning the Corporation, including factors that potentially could have a material effect on the Corporation’s financial results or condition, may emerge from time to time.

The Corporation assumes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. The Corporation advises you, however, to consult any further disclosures made on related subjects in future annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed with or furnished to the SEC.