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Debt | 9 Months Ended
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Sep. 27, 2025
Debt Disclosure [Abstract] |
Debt | Debt Debt is as follows:
| September 27, 2025 |  | December 28, 2024
Revolving credit facility with interest at a variable rate (September 27, 2025 - 5.7 %; December 28, 2024 - 6.4 %) | $ | 75.3 |  |  | $ | 45.7 |
Term loan with interest at a variable rate (September 27, 2025 - 5.7 %; December 28, 2024 - 5.9 %) | 200.0 |  |  | 200.0 |
Fixed-rate notes due in 2025 with an interest rate of 4.2 % | — |  |  | 50.0 |
Fixed-rate notes due in 2028 with an interest rate of 4.4 % | 50.0 |  |  | 50.0 |
Other amounts | — |  |  | 0.3 |
Deferred debt issuance costs | (1.1) |  |  | (1.4) |
Total debt | 324.2 |  |  | 344.6 |
Less: Current maturities of debt | — |  |  | 50.3 |
Long-term debt | $ | 324.2 |  |  | $ | 294.3 |
The aggregate carrying value of the Corporation’s variable-rate, long-term debt obligations under the revolving credit and term loan facilities at September 27, 2025 was $275 million, which approximated fair value. The fair value of the fixed-rate notes was estimated based on a discounted cash flow method (Level 2) to be $49 million at September 27, 2025. Revolving Credit Facility As of September 27, 2025, the Corporation’s revolving credit facility borrowings were drawn under the amended and restated credit agreement entered into on June 14, 2022, as further amended on March 14, 2023 and June 1, 2023, with a scheduled maturity of June 14, 2027. The Corporation deferred the related debt issuance costs, which are classified as assets, and is amortizing them over the term of the credit agreement. The current portion of debt issuance costs of $0.4 million is the amount to be amortized over the next twelve months, based on the current credit agreement and is reflected in "Prepaid expenses and other current assets" in the Condensed Consolidated Balance Sheets. The long-term portion of debt issuance costs of $0.3 million is reflected in "Other Assets" in the Condensed Consolidated Balance Sheets. As of September 27, 2025, $75 million of borrowings were outstanding under the $425 million revolving credit facility. The entire amount drawn under the revolving credit facility is considered long-term as the Corporation assumes no obligation to repay any of the amounts borrowed in the next twelve months. Based on consolidated EBITDA, as defined in the credit agreement, for the last four fiscal quarters, the Corporation can access the full $425 million of borrowing capacity available under the revolving credit facility, which includes $75 million of borrowings outstanding as of September 27, 2025, and maintain compliance with the financial covenants under the facility described below. In addition to cash flows from operations, the revolving credit facility under the credit agreement is the primary source of daily operating capital for the Corporation and provides additional financial capacity for capital expenditures, repurchases of common stock, and strategic initiatives, such as acquisitions. Term Loan As of September 27, 2025, the Corporation had $200 million principal amount of borrowings outstanding under a term loan agreement entered into on March 31, 2023, as amended on May 25, 2023. The initial $300 million of proceeds from the term loan were used to support funding of the Corporation's acquisition of Kimball International on June 1, 2023. In May 2024 and September 2024, the Corporation separately executed an aggregated $100 million of voluntary early repayments of the outstanding principal balance on the term loan. Borrowings under the revolving credit facility were used to finance the early repayments. The term loan is subject to principal amortization which began on June 30, 2024. As a result of the early repayments executed by the Corporation, all of the principal amortization requirements have been satisfied and no additional principal payments are required until maturity in March 2028. The Corporation deferred the debt issuance costs related to the agreement, which are classified as a reduction of long-term debt, and is amortizing such costs over the term of the agreement. The deferred debt issuance costs do not reduce the amount owed by the Corporation under the terms of the agreement. As of September 27, 2025, the deferred debt issuance costs balance of $1.0 million related to the agreement are reflected in "Long-Term Debt" in the Condensed Consolidated Balance Sheets. Fixed-Rate Notes As of September 27, 2025, the Corporation also had $50 million principal amount of borrowings outstanding under a private placement note agreement entered into on May 31, 2018. Under the agreement, the Corporation issued $50 million of ten-year fixed-rate notes with an interest rate of 4.4 percent, due May 31, 2028. The principal amount is classified as "Long-Term Debt" in the Condensed Consolidated Balance Sheets. The Corporation deferred the debt issuance costs related to the private placement note agreement, which are classified as reductions of long-term debt, and is amortizing such costs over the term of the private placement note agreement. The deferred debt issuance costs do not reduce the amount owed by the Corporation under the terms of the private placement note agreement. As of September 27, 2025, the remaining deferred debt issuance costs related to the private placement note agreements of $0.1 million are reflected in "Long-Term Debt" in the Condensed Consolidated Balance Sheets. As of September 27, 2025, due to current market rates, the Corporation would not owe material amounts to the note holders on early payment under a make-whole provision. As of May 31, 2025, the Corporation repaid the $50 million principal amount of matured seven-year fixed-rate notes with an interest rate of 4.2 percent issued under a private placement note agreement entered into on May 31, 2018. The repayment was financed through borrowings under the revolving credit facility. Debt Covenants The revolving credit facility, term loan credit facility, and private placement notes all contain financial and non-financial covenants. Non-compliance with covenants under the agreements governing this indebtedness could prevent the Corporation from being able to access further borrowings, require immediate repayment of all amounts outstanding, and/or increase the cost of borrowing. The covenants under all the agreements are substantially the same. In the event that the remaining $50 million principal amount of the 10-year private placement notes is repaid by the Corporation, certain fall-away provisions in the revolving credit facility and term loan credit facility will allow for modification of the covenant measures whereby the Corporation would have increased financial flexibility. In such an event, the definitions of consolidated EBITDA and the maximum leverage under the consolidated leverage ratio would adjust to become less restrictive, while the interest coverage ratio would no longer be an included measure. The Corporation is subject to financial covenants requiring it to maintain the following financial ratios as of the end of any fiscal quarter: •a consolidated interest coverage ratio (as defined in the credit agreements) of not less than 4.0 to 1.0, based upon the ratio of (a) consolidated EBITDA for the last four fiscal quarters to (b) the sum of consolidated interest charges; and •a consolidated leverage ratio (as defined in the credit agreements) of not greater than 3.5 to 1.0, based upon the ratio of (a) the quarter-end consolidated funded indebtedness to (b) consolidated EBITDA for the last four fiscal quarters. The more restrictive of the financial covenants is the consolidated leverage ratio requirement of 3.5 to 1.0. Under the credit agreements, consolidated EBITDA is defined as consolidated net income before interest expense, income taxes, depreciation, and amortization of intangibles, as well as non-cash items that increase or decrease net income. As of September 27, 2025, the Corporation was in compliance with the financial covenants. Credit Facilities for Merger Agreement Transactions On August 3, 2025, in connection with the Corporation’s entry into the Merger Agreement described in "Note 3. Acquisitions and Divestitures" relating to the Steelcase Acquisition, the Corporation entered into a debt financing commitment letter (the "Commitment Letter") with JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association and Wells Fargo Securities, LLC (the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide HNI with debt financing in an aggregate principal amount of $1.1 billion in the form of a senior unsecured 364-day bridge loan facility (the “Bridge Loan”). The Corporation deferred the related debt issuance costs, which are classified as assets, and is amortizing such costs over the term of the credit agreement described below. The current portion of debt issuance costs of $1.4 million will be amortized over the next twelve months, based on such credit agreement and is reflected in "Prepaid expenses and other current assets" in the Condensed Consolidated Balance Sheets. Pursuant to the Commitment Letter, on September 5, 2025 (the “Effective Date”), the Corporation entered into a Credit Agreement, by and among the Corporation, certain domestic subsidiaries of the Corporation, the lenders from time-to-time party thereto, Wells Fargo Bank, National Association, as administrative agent (the “Administrative Agent”), and other parties named therein (the “Credit Agreement”). The Credit Agreement establishes (i) a senior secured revolving credit facility in an aggregate principal amount of $425 million (the “Revolving Facility,” and the loans thereunder, the “Revolving Loans”) (which may be increased from time-to-time pursuant to, and subject to the limitations of, the Credit Agreement), (ii) a senior secured “term loan A” credit facility in an aggregate amount of up to $500 million (the “TLA Facility,” and the loans thereunder, the “Term A Loans”) (which may be increased from time-to-time pursuant to, and subject to the limitations of, the Credit Agreement) and (iii) a senior secured “term loan B” credit facility in an aggregate amount of $0 on the Effective Date and which, on the date of consummation of the Mergers (the “Closing Date”), is structured to be potentially drawn to an aggregate amount of up to $800 million (the “TLB Facility,” and the loans thereunder, the “Term B Loans”) (which may be increased from time to time pursuant to, and subject to the limitations of, the Credit Agreement). On the date of consummation of the Mergers (the "Closing Date"), the TLA Facility is expected to be drawn to an aggregate of $350 million and the TLB Facility is expected to be drawn to an aggregate amount of $500 million. Such amounts will be reduced from the maximum aggregate amounts as defined at the execution of the Credit Agreement after giving effect to successful exchange process related to $450 million of Steelcase private notes, as described later. Subject to the satisfaction of certain limited conditions, the Revolving Loans, Term A Loans and Term B Loans (collectively, the “Loans”) under the Credit Agreement may be borrowed and the proceeds used by the Corporation for the consummation of the Mergers, including payment of the Cash Consideration, the repayment of existing indebtedness of HNI and Steelcase, and the payment of fees, commissions and expenses in connection with the foregoing. The principal amount of the Revolving Loans and Term A Loans, together with accrued and unpaid interest thereon, will be due and payable on the earlier of the (a) fifth anniversary of the Closing Date (the “Revolving Maturity Date” or “TLA Maturity Date”) or (b) a customary springing maturity date. Commencing with the first full fiscal quarter ending after the Closing Date, the Corporation is required to repay the Term A Loans in quarterly installments equal to the following amounts per annum of the original principal amount of the Term A Loans: (i) during the first year following the Closing Date, 2.5%; (ii) during the second and third years following the Closing Date, 5.0%; (iii) during the fourth year following the Closing Date, 7.5%; and (iv) during the fifth year following the Closing Date, 10.0%, with the remaining principal amount and accrued and unpaid interest being due and payable on the fifth anniversary of the Closing Date. The principal amount of the Term B Loans, together with accrued and unpaid interest thereon, will be due and payable on the earlier of the (a) seventh anniversary of the Closing Date or (b) a customary springing maturity date. The TLB Facility will amortize on a quarterly basis in an amount equal to 0.25% per quarter, commencing with the first full fiscal quarter ending after the Closing Date, with the remaining principal amount and accrued and unpaid interest being due and payable on the seventh anniversary of the Closing Date. After the Closing Date, the Loans may be prepaid by the Corporation at any time in whole or in part, subject to certain minimum thresholds, subject to (i) a prepayment fee equal to 1.0% of the aggregate principal amount of such prepayment in connection with certain prepayments or amendments that have the primary purpose of decreasing the all-in yield applicable to the Term B Loans within the first six months following the Closing Date and (ii) customary breakage costs for certain types of loans. Borrowings under the Revolving Facility and TLA Facility will bear interest, at the Corporation's option, at either: (a) the alternate base rate, which is defined as a fluctuating rate per annum equal to the greatest of (i) the prime rate then in effect, (ii) the federal funds rate then in effect, plus 0.50% per annum, and (iii) the term SOFR rate determined on the basis of a one-month interest period, plus 1.00%, in each case, plus a margin of between 0.25% and 0.875%; and (b) the term SOFR rate (based on one, three or six month interest periods), plus a margin of between 1.25% and 1.875%. The term SOFR rate will be subject to a floor of 0% and the alternate base rate will be subject to a floor of 1.00%. The applicable margin in each case is determined based on the Corporation's net leverage ratio at such time. Interest is payable quarterly in arrears with respect to borrowings bearing interest at the alternate base rate or on the last day of an interest period, but at least every three months, with respect to borrowings bearing interest at the term SOFR rate. Borrowings under the TLB Facility will bear interest at a rate per annum to be determined based on market conditions. The Credit Agreement contains customary representations and warranties by the Corporation, which include customary materiality, material adverse effect and knowledge qualifiers. The Credit Agreement also contains customary affirmative and negative covenants including, among other requirements, limitations on indebtedness, liens, nature of business, mergers, sale of assets and indebtedness of subsidiaries, advances, investments and loans, transactions with affiliates, fiscal year, organizational documents, limitations restricted actions and negative pledges. The Credit Agreement contains financial covenants that require the maintenance of a maximum net leverage ratio and a minimum interest coverage ratio for periods after the Closing Date. The Corporation is required to maintain a maximum net leverage ratio (as defined in the Credit Agreement) as of the end of each fiscal quarter equal to (i) 4.25 to 1.00 as of the end of each of the first, second, third and fourth full fiscal quarters ending after the Closing Date, (ii) 4.00 to 1:00 as of the end of each of the fifth and sixth full fiscal quarters ending after the Closing Date and (iii) 3.50 to 1:00 as of the end of the seventh full fiscal quarter ending after the Closing Date and as of the end of each fiscal quarter thereafter. In addition, the Corporation is required to maintain a minimum interest coverage ratio (as defined in the Credit Agreement) as of the end of each fiscal quarter of greater than or equal to 3.50 to 1.00. Following the execution of the Credit Agreement, the Corporation retired $300 million of the committed financing under the Bridge Loan associated with the TLA Facility. On October 31, 2025, after the close of the Corporation's third quarter, an additional $300 million of committed financing under the Bridge Loan associated with the TLB Facility were retired. The $500 million of commitments remaining under the Bridge Loan are associated with the TLB Facility and are expected to be retired prior to the Closing Date. Note Exchange Offer for Merger Agreement Transactions Also in connection with the transactions contemplated by the Merger Agreement, contingent on the closing of those transactions, the Corporation has offered to exchange any and all outstanding 5.125% Notes due 2029 issued by Steelcase for up to $450 million aggregate principal amount of new notes to be issued by the Corporation that will have an interest rate and maturity date, as well as interest payment dates and optional redemption prices, identical to those of the tendered Steelcase notes. Upon a successful exchange, the Corporation expects to reduce the aggregate borrowings under the TLA Facility by one-third of the principal amount of the new HNI notes (up to $150 million) and the aggregate borrowings under the TLB Facility by two-thirds of the principal amount of the new HNI notes (up to $300 million).

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8A -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-8A Reference 2: http://www.xbrl.org/2003/role/disclosureRef 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