HNI Corporation (HNI): Business Model Canvas [Dec-2025 Updated]

You're digging into HNI Corporation (HNI) right now, trying to map out exactly how this furniture and hearth giant is positioning itself for the next few years, and honestly, the current model is all about aggressive integration and scale. The story isn't just about office furniture anymore; it's a complex pivot centered on capturing value from the Kimball International integration and setting the stage for the pending Steelcase acquisition. We see a business balancing its established $340.0 million TTM Non-GAAP EBITDA (as of Q3 2025) from its dual segments-Workplace Furnishings and Residential Building Products-while aggressively optimizing its footprint, like ramping up that new Mexico facility for cost savings. If you want to see the nine building blocks that define HNI Corporation (HNI)'s strategy-from their dealer network to the expected synergy benefits-dive into the canvas breakdown below.

HNI Corporation (HNI) - Canvas Business Model: Key Partnerships

You're looking at the structure HNI Corporation is building for late 2025, especially with the major integration underway. The Key Partnerships block is about who HNI relies on to deliver value, and right now, that's heavily defined by the pending acquisition of Steelcase Inc.

The integration of Steelcase is set to dramatically reshape the scale of HNI Corporation's distribution and supplier relationships.

Independent office furniture dealers and distributors

The existing network is being augmented by the acquired footprint. Steelcase, before the merger, had dealers and retailers in 790 locations across the Americas, EMEA, and Asia Pacific. This complements HNI's current structure, allowing the combined entity to serve small- and medium-sized businesses and larger corporates, plus the healthcare and education end markets.

Trade partners for Residential Building Products segment

Specific data on the Residential Building Products trade partners isn't public, but the segment's orders showed patterns supporting the full-year outlook for volume growth in 2025. The Q1 2025 Residential Building Products orders showed improvement through Q2 2025 as pull-forward activity abated.

Strategic suppliers for raw materials and components

The expected annual run-rate synergies of $120 million post-acquisition will certainly involve streamlining and optimizing relationships with strategic suppliers for raw materials and components across both organizations. HNI continues to realize savings from the Kimball International ("KII") acquisition synergies and the ramp-up of its Mexico facility, which also impacts component sourcing.

Technology partners for digital and e-commerce platforms

The combination aims to scale Steelcase's digital workplace tools, such as real-time collaboration platforms, using HNI's manufacturing capabilities. This suggests a deepening reliance on technology partners to support tech-integrated furniture development.

Steelcase Inc. (pending acquisition, valued at US$2.2 billion)

This transaction is the most significant partnership element as of late 2025. The deal is valued at approximately US$2.2 billion and was expected to close before the end of calendar 2025. Here are the hard numbers defining this key future relationship:

Metric	Value/Term
Total Transaction Value	Approximately US$2.2 billion
Cash Component per Steelcase Share	$7.20
Stock Component per Steelcase Share	0.2192 HNI common stock shares
Implied Value per Steelcase Share	About $18.30
Projected Annual Run-Rate Synergies	$120 million
Pro Forma Combined Annual Revenue	About $5.8 billion
Post-Merger HNI Shareholder Ownership	About 64%
Post-Merger Steelcase Shareholder Ownership	About 36%

The integration of Steelcase's dealer network and geographic footprint is a core component of the strategic rationale. You can see the scale difference when looking at Steelcase's 2024 performance metrics:

• Steelcase 2024 Annual Revenue: $3.2 billion
• Steelcase 2024 Net Income: $81.1 million
• HNI Q3 2025 Net Sales: $683.8 million

The combined entity is structured to realize significant cost savings. The expected contribution to diluted non-GAAP EPS from KII synergies and the Mexico facility ramp-up, which will be shared with the new combined operations, is projected to be $0.75 to $0.80 in 2025-2026.

Finance: draft 13-week cash view by Friday.

HNI Corporation (HNI) - Canvas Business Model: Key Activities

You're looking at the core engine room of HNI Corporation (HNI) as of late 2025, focusing on the actions management is taking to drive margin expansion and earnings visibility through 2026. It's all about execution on the factory floor and integration milestones right now.

Manufacturing optimization and supply chain management

Core productivity gains are a major driver here, showing up directly in the margins. For the third quarter ended September 27, 2025, HNI Corporation reported that the consolidated gross profit margin expanded by 60 basis points compared to the prior-year quarter, directly attributed to improved net productivity. This focus on efficiency is also evident in the Workplace Furnishings segment, where the GAAP operating profit margin reached 12.1 percent in Q3 2025, expanding by 70 basis points versus the prior-year quarter, again citing improved net productivity as a key factor. The company is investing capital to support this; HNI Corporation anticipates capital expenditures for 2025 to be between $75 million and $85 million, aimed at machinery, equipment, and technology. This operational focus is happening while the company navigates the pending acquisition of Steelcase Inc., which is expected to close before the end of calendar 2025.

Capturing cost synergies from Kimball International (KII) integration

The integration of Kimball International (KII) is a central activity, with synergy realization exceeding initial expectations. Total synergies from the KII acquisition are now expected to reach $60 million by the end of 2026, which is more than double the initial projection from when the deal was announced in mid-2023. These synergy benefits, combined with the Mexico facility ramp, are a major source of earnings visibility. The Corporation expects these two initiatives combined to contribute a total of $0.75 to $0.80 to diluted non-GAAP Earnings Per Share (EPS) across 2025-2026. For the first half of 2025 specifically, these two initiatives contributed approximately $0.24 of EPS benefit. The overall savings target from KII synergies and the Mexico ramp-up is estimated to reach $80-$85 million compared to 2022 levels.

Operating the vertically-integrated Residential Building Products distribution

This segment is focused on navigating housing market dynamics through its distribution network. For the third quarter of 2025, Residential Building Products segment net sales were $166.9 million, which was described as roughly unchanged year-over-year. Looking back to the second quarter ended June 28, 2025, net sales for this segment were $151.1 million, marking a 5.3 percent increase year-over-year, with remodel-retrofit sales growing over 7 percent. Margin performance in Q3 2025 saw the segment's GAAP operating profit margin at 18.0 percent, an expansion of 10 basis points year-over-year. However, the non-GAAP segment operating profit margin was also 18.0 percent, contracting by 60 basis points year-over-year.

Here are the segment sales figures for the most recently reported quarters:

Metric	Q3 2025 (Ended 9/27/25)	Q2 2025 (Ended 6/28/25)
Residential Building Products Net Sales	$166.9 million	$151.1 million
Workplace Furnishings Net Sales	$516.9 million	$516.0 million
Total Net Sales	$683.8 million	$667.1 million

Product design, engineering, and continuous improvement (RCI)

Continuous improvement is embedded in the profit transformation initiatives that HNI Corporation is executing. These efforts, alongside synergy benefits, are what drove the consolidated non-GAAP operating margin to 10.8 percent in Q3 2025, which was the highest third quarter level reported. The company is actively managing its product portfolio, evidenced by the divestiture of HNI India, which decreased year-over-year net sales by $5.6 million in Q3 2025. The focus on design and engineering is supporting the Workplace Furnishings segment, which saw orders up 2 percent year-over-year in Q3 2025 (excluding certain hospitality and tariff-related orders).

Ramping up production at the new Mexico facility for cost savings

The ramp-up of the new manufacturing facility in Mexico is a critical activity for future cost reduction. This initiative, alongside KII synergies, is expected to deliver significant savings. The total net savings expected from the Mexico facility ramp are projected to reach $20-$25 million by the end of 2026. This cost-saving effort is part of the larger plan that management believes provides strong earnings visibility over the next two years. The company is also completing a manufacturing optimization initiative that involves consolidating its Hickory, North Carolina, facility, which is expected to contribute $11 million in savings by the end of 2026, folded into the KII synergy total.

Key expected contributions from these two major operational activities are:

• Total expected savings (KII + Mexico) compared to 2022: $80-$85 million.
• Expected EPS benefit from both initiatives in 2025-2026: $0.75 to $0.80.
• Benefit realized in the first half of 2025: approximately $0.24 per share.

Finance: draft 13-week cash view by Friday.

HNI Corporation (HNI) - Canvas Business Model: Key Resources

You're looking at the core assets HNI Corporation uses to deliver its value propositions. These aren't just things on a balance sheet; they are the engines driving their market position, especially as they finalize the Steelcase acquisition before the end of calendar year 2025.

Global Manufacturing and Distribution Footprint

HNI Corporation maintains a significant physical presence to support its dual-segment strategy across workplace furnishings and residential building products. While the exact number of global facilities isn't explicitly detailed in the latest reports, the operational scale is evident through its financial performance and strategic moves.

The company's operational strength is supported by initiatives like the ramp-up of its Mexico facility, which, along with Kimball International synergies, is expected to contribute between $0.75 to $0.80 to diluted non-GAAP Earnings Per Share in 2025-2026. Furthermore, the Residential Building Products segment shows vertical integration, with approximately one quarter of its building products revenue coming from products and services sold through its owned installing distributors.

Here's a snapshot of the scale as of Q3 2025:

Metric	Value (as of Q3 2025)	Context
TTM Net Sales	$2.6 billion	Trailing Twelve Months sales supporting the footprint.
Net Debt	$304 million	Modest financial leverage supporting operations.
Q3 Net Sales	$683.8 million	Quarterly revenue generated by the footprint.

Strong Portfolio of Industry-Leading Brands

The breadth of HNI Corporation's brand portfolio is a massive intangible asset, allowing it to serve diverse customer needs from commercial offices to residential hearths. You have 26 industry-leading brands under the corporate umbrella. This portfolio includes well-recognized names like HON, Allsteel, and Kimball, which contribute to the Workplace Furnishings segment's revenue.

The strength of these brands is reflected in the Q3 2025 organic growth, where Workplace Furnishings organic net sales increased 3.5 percent year-over-year, fueled by growth across all major brands. The Residential Building Products segment is the clear leader in the U.S. hearth industry, holding the number one share position.

Member-Owner Culture and Rapid Continuous Improvement (RCI) System

HNI Corporation's culture is a foundational resource, evidenced by its long-standing commitment to its workforce, referred to as members. The company has 7,100 Members Worldwide. This culture is intrinsically linked to its operational excellence system.

The commitment to continuous improvement is a key driver of financial outperformance. Productivity gains and operating expense control were central to achieving a record third quarter non-GAAP operating margin of 10.8 percent in Q3 2025. This focus on efficiency is also seen in environmental goals, with ten sites achieving zero waste to landfill.

• 7,100 Members Worldwide
• 69 Continuous Years of Dividend Payments
• Non-GAAP operating margin expansion driven by productivity

Financial Strength

Financial health provides the capital to invest in R&D, acquisitions, and maintain operations through economic cycles. As of Q3 2025, the Trailing Twelve Months (TTM) Non-GAAP EBITDA stood at $340.0 million. This financial underpinning is strong enough that management reaffirmed its expectation for a fourth consecutive year of double-digit non-GAAP EPS growth for the full year 2025.

The balance sheet is actively managed. In Q3 2025 alone, HNI Corporation reduced debt by $120 million, bringing the gross debt leverage down to 0.9x ahead of the Steelcase acquisition. The company's market valuation as of late October 2025 was a Market Cap of $1.9 billion and an Enterprise Value of $2.2 billion.

Intellectual Property in Furniture Design and Hearth Technology

The value embedded in HNI Corporation's designs and proprietary technology is realized through segment profitability and strategic integration. The Residential Building Products segment consistently delivers high margins, which is a testament to its leading technology in hearth products, including gas, electric, wood, and pellet-burning fireplaces, inserts, and stoves.

In the Workplace Furnishings segment, the realization of synergies from the Kimball International acquisition is a key resource, driving margin expansion. Furthermore, HNI Corporation is actively future-proofing its IP by eliminating expanded polystyrene foam packaging and making significant progress toward evaluating 100% of materials for human and environmental health, which positions its designs as premium choices for environmentally conscious buyers.

Key IP-related operational metrics include:

• Gross Profit Margin expanded 60 basis points year-over-year in Q3 2025 due to improved net productivity.
• Achieved a reduction of 79 percent in absolute combined Scope 1 and 2 greenhouse gas emissions, reflecting process innovation.
• Advanced chemical transparency via publication of Health Product Declarations and Declare labels.

Finance: draft 13-week cash view by Friday.

HNI Corporation (HNI) - Canvas Business Model: Value Propositions

You're looking at HNI Corporation's value proposition as of late 2025, and the story is about leveraging strategic integration and operational discipline to deliver value across distinct business lines. It's not just about making things; it's about making the right things more efficiently.

Broad product offering across multiple price points and channels

HNI Corporation serves two main areas: Workplace Furnishings and Residential Building Products. The breadth means they capture demand whether you are furnishing a large commercial campus or upgrading a home fireplace. For instance, in Q3 2025, the Workplace Furnishings segment pulled in net sales of $516.9 million, a 2.3% increase year-over-year, showing consistent demand across their commercial channels. The Residential Building Products segment, which handles the hearth side, posted net sales of $166.9 million in the same quarter. Looking ahead, the company guided for Q4 2025 net sales to increase at a high single-digit rate in both segments compared to Q4 2024, suggesting consistent channel strength.

The product diversity is clear when you look at the segment performance in the second quarter of 2025:

Metric	Workplace Furnishings (Q2 2025)	Residential Building Products (Q2 2025)
Net Sales (Millions USD)	$516.0	$151.1
Net Sales Growth YoY	7.4%	5.3%
Organic Net Sales Growth YoY	8.5%	N/A
Operating Profit Margin (Non-GAAP)	13.1%	15.7%

Market leadership in U.S. residential hearth products (fireplaces, stoves)

The Residential Building Products segment holds the title as the nation's leading manufacturer and marketer of hearth products, covering gas, electric, wood, and pellet-burning options. This leadership is proving valuable in the current housing climate. In Q2 2025, this segment saw its net sales grow over 5 percent year-over-year. What's interesting is the split: remodel/retrofit business grew over 7 percent, while new construction only grew more than 4 percent. This indicates that HNI Corporation's value proposition is strong in the existing home market, where homeowners are investing in their current spaces. This focus helped drive the segment operating profit margin to 15.7 percent in Q2 2025, a 190 basis point expansion year-over-year.

Comprehensive solutions for high-growth markets like healthcare and hospitality

While the Workplace Furnishings segment serves the broad commercial market, the data shows specific attention to key sectors. For example, in Q1 2025, contract orders for Workplace Furnishings were up 15 percent year-over-year, but management specifically excluded hospitality from that figure, suggesting it's a distinct, tracked vertical. The segment's overall value proposition is to support work environments from the home office all the way up to the large commercial campus. The company's commitment to social responsibility, including significant community donations, also speaks to a value proposition centered on being a responsible corporate citizen in the communities where its customers operate.

Superior value through operational efficiency and pragmatic design

You see the payoff of efficiency in the margin expansion HNI Corporation achieved through 2025. The company's non-GAAP operating margin hit 11.0% in Q2 2025, marking the highest Q2 level on record. Even in Q3 2025, the non-GAAP operating margin reached 10.8%, its highest third quarter level. This wasn't accidental; Q3 results were driven by productivity and operating expense control. The focus on pragmatic design and efficiency is also reflected in sustainability metrics:

• Achieved a reduction of 79% in absolute combined Scope 1 and 2 greenhouse gas emissions.
• Ten sites achieved zero waste to landfill status.
• Eliminated expanded polystyrene foam packaging across the Kimball International and Residential Building Products portfolios.

The company expects this discipline to translate directly to shareholder returns, maintaining an outlook for mid-teens percent diluted non-GAAP EPS growth for the full year 2025.

Enhanced product portfolio from KII in ancillary products and secondary geographies

The integration of Kimball International (KII), acquired in 2023, is a core value driver. Total cost synergies from the KII integration are estimated at $50 million. These synergies, combined with the ramp-up of the Mexico facility, are expected to contribute $0.75 to $0.80 to diluted non-GAAP EPS across 2025 and 2026. Specifically, the Hickory plant consolidation, enabled by the KII integration, is expected to save approximately $11 million annually once fully mature in 2026, with savings realized in 2025 expected to be $8 to $9 million. Furthermore, the portfolio is being refined, as evidenced by the divestiture of HNI India, which reduced Q3 2025 Workplace Furnishings sales by $5.6 million year-over-year. This suggests a strategic focus on core, high-value ancillary products and geographies over secondary ones.

Finance: draft 13-week cash view by Friday.

HNI Corporation (HNI) - Canvas Business Model: Customer Relationships

You're looking at how HNI Corporation manages its connections with the people and businesses buying their products as of late 2025. It's a mix of direct contract work and supporting a wide network of dealers, which is key to their diversified revenue streams.

Dedicated sales teams and account management for contract customers are clearly driving significant top-line momentum in the Workplace Furnishings segment. For instance, in the first quarter of 2025, Workplace Furnishings contract orders were up 15 percent year-over-year, excluding hospitality. While contract order growth moderated in the second quarter to five percent year-over-year, the segment still saw contract brands revenue up nearly 15% year-over-year in Q2 2025. By the third quarter of 2025, Workplace Furnishings orders were up two percent year-over-year, after adjusting for tariff-related pre-orders and hospitality. This shows a focus on securing larger, committed business.

The relationships with home builders and remodel-retrofit contractors are vital for the Residential Building Products (RBP) segment. You saw solid order growth here in the first quarter of 2025, with RBP orders growing eight percent compared to the prior year. In the second quarter of 2025, the remodel-retrofit business grew over seven percent year-over-year, while new construction grew more than four percent. This strength in the remodel-retrofit channel continued into the third quarter, where RBP orders increased two percent year-over-year. The second quarter RBP net sales reached $158.7 million, an increase of 7.1 percent from the prior-year quarter, with remodel-retrofit sales increasing at a higher rate than new construction.

HNI Corporation's customer-first mindset shows up in their operational focus and investment choices. The company is actively investing for the future, which impacts near-term expense ratios. In Q1 2025, selling and administrative expenses as a percentage of net sales increased 10 basis points due to wage inflation and investments. However, by Q2 2025, selling, general, and administrative expenses as a percentage of net sales decreased 70 basis points compared to the prior-year quarter, helped by higher net sales. The third quarter results specifically cited operating expense control as a driver for margin expansion.

Regarding digital engagement, the company's portfolio strategy has shifted; HNI Corporation divested its Poppin business in the third quarter of 2023. While specific e-commerce figures for HNI's remaining brands in 2025 aren't immediately clear, the overall strategy is supported by brand diversity to target specific niches.

Support for the independent dealer network is managed through a focus on overall customer base diversification and strategic segment performance. For the full fiscal year 2024, HNI Corporation noted that its five largest customers accounted for approximately 15 percent of consolidated net sales, and no single customer represented 10 percent or more. This suggests a reliance on a broad base, including dealers. In Q2 2025, brands focused on small- and medium-sized businesses (SMBs) returned to growth, with revenue slightly up year-over-year. Furthermore, the pending acquisition of Steelcase Inc. for $2.1 billion, expected to close before the end of calendar 2025, is noted to bring together highly complementary capabilities, including dealer networks.

Here's a snapshot of the segment performance that reflects these relationship channels through the first three quarters of 2025:

Metric	Time Period	Value	Segment/Context
Contract Orders Growth (YoY)	Q1 2025	15 percent	Workplace Furnishings (Excluding Hospitality)
Remodel-Retrofit Sales Growth (YoY)	Q2 2025	Over 7 percent	Residential Building Products
RBP Net Sales	Q2 2025	$158.7 million	Residential Building Products
Total Net Sales	Q3 2025	$683.8 million	Consolidated
Workplace Furnishings Net Sales	Q3 2025	$516.9 million	Workplace Furnishings
Largest Customer Concentration	Fiscal Year 2024	15 percent	Top five customers of consolidated net sales

The company's focus on productivity and synergy realization, such as the expected $0.75 to $0.80 contribution to diluted non-GAAP EPS in 2025-2026 from Kimball International synergies and the Mexico facility ramp-up, supports the ability to maintain competitive pricing or service levels for these customer groups.

You should review the integration plan for the Steelcase acquisition, as that will fundamentally reshape the dealer network support structure by the end of 2025. Finance: draft 13-week cash view by Friday.

HNI Corporation (HNI) - Canvas Business Model: Channels

You're looking at how HNI Corporation gets its products-from office furniture to fireplaces-into the hands of customers as of late 2025. The channel strategy is clearly segmented by business line, which makes sense given the different customer bases.

Independent dealer network for Workplace Furnishings

The Workplace Furnishings segment relies heavily on its network of independent dealers, distributors, wholesalers, and retail outlets to move product. For contract customers, which represent a key channel, revenue saw a 4% year-over-year increase in the first quarter of 2025. By the second quarter of 2025, contract brands showed even stronger performance, with revenue up nearly 15% year-over-year. Still, shipments to small and medium-sized businesses (SMBs) saw a 5% year-over-year decline in Q1 2025, though this channel returned to slight year-over-year growth in Q2 2025. The segment's Q3 2025 net sales were $516.9 million.

Vertically-integrated installing distributors for Residential Building Products (approx. 20-25% of new home business)

HNI Corporation uses a dual approach in Residential Building Products (RBP). A significant portion of their new home business flows through their own operations. Specifically, approximately 20-25% of new home business moves through their vertically-integrated installing distribution model. This structure gives HNI Corporation an unmatched ability to service builders. The RBP segment posted net sales of $166.9 million in the third quarter of 2025. Channel performance within RBP shows distinct trends:

• New construction revenue increased 3% year-over-year in Q1 2025, growing more than 4% year-over-year in Q2 2025.
• The remodel-retrofit business showed strong growth, increasing 13% year-over-year in Q1 2025 and over 7% year-over-year in Q2 2025.

Direct sales to large contract customers and government

While the dealer network handles much of the volume, direct sales channels are critical for large-scale Workplace Furnishings orders, which are captured in the contract customer revenue figures mentioned above. The company does not explicitly break out a separate revenue line for government sales, but these large accounts are typically serviced through specialized contract channels. The total TTM (Trailing Twelve Months) net sales for HNI Corporation, as of September 30, 2025, stood at $2.59 billion.

E-commerce and digital marketplaces

HNI Corporation's products are sold through eCommerce retailers, alongside the traditional channels. While specific revenue contribution from pure e-commerce or digital marketplaces isn't itemized separately from the broader dealer/distributor/retail outlet categories, the overall strategy incorporates these digital points of sale. The company has 7,800 total employees supporting its operations across these varied routes to market.

Regional distribution infrastructure for hearth products

HNI Corporation is the clear leader in the U.S. hearth industry, selling a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. Their regional distribution infrastructure is designed to offer high-level customer service and attract trade partners. This infrastructure supports the RBP segment, which saw its operating profit margin expand by 130 basis points year-over-year in Q1 2025, reflecting strong pricing, channel reach, and operational agility.

Here's a quick look at the segment sales performance that these channels drove in the first three quarters of 2025:

Metric	Workplace Furnishings	Residential Building Products	Consolidated Total
Net Sales (Q3 2025)	$516.9 million	$166.9 million	$683.8 million
Net Sales Growth (Q3 2025 YoY)	2.3% increase	Essentially flat	1.7% increase
Contract Order Growth (Q2 2025 YoY)	5% increase	N/A	N/A
Remodel-Retrofit Sales Growth (Q1 2025 YoY)	N/A	13% increase	N/A

The company's strategy emphasizes channel strength, whether through the independent dealer network for office furniture or the vertically-integrated model for building products. Finance: draft 13-week cash view by Friday.

HNI Corporation (HNI) - Canvas Business Model: Customer Segments

HNI Corporation serves customers across two primary segments: Workplace Furnishings and Residential Building Products. The Trailing Twelve Month (TTM) Net Sales as of the third quarter of 2025 reached $2.59B.

The customer base is segmented based on the application of the products, which include commercial furnishings and hearth products.

Customer Segment Group	Primary HNI Segment	Relevant 2025 Financial/Statistical Data Point
Commercial and government offices	Workplace Furnishings	Workplace Furnishings net sales were $516.9 million in Q3 2025.
Healthcare and hospitality sectors	Workplace Furnishings (Hospitality)	Workplace Furnishings contract orders were up 15% year-over-year in Q1 2025, excluding hospitality.
Home builders and new residential construction market	Residential Building Products	New construction grew over 4% year-over-year in Q2 2025.
Homeowners in the remodel/retrofit market for hearth products	Residential Building Products	Remodel-retrofit grew over 7% year-over-year in Q2 2025.
Small and medium-sized businesses (SMB)	Workplace Furnishings	Return to growth noted across brands focused on SMB in Q2 2025.

The Workplace Furnishings segment saw its organic net sales increase 3.5% year-over-year in the third quarter of 2025, with the quarter-ending backlog up 7% versus the same period of 2024.

The customer base for Workplace Furnishings is served through multiple unique brands and includes:

• Commercial and government offices, which drive the core contract business.
• Small and medium-sized businesses (SMB) for whom brands saw a return to growth in Q2 2025.
• The hospitality sector, which is noted as sometimes being lumpy in order flow.
• Customers benefiting from Kimball International (KII) acquisition synergies, expected to contribute $0.75 to $0.80 to diluted non-GAAP EPS in 2025-2026.

The Residential Building Products segment targets the residential market with its hearth products, which include gas, wood, electric, and pellet-fueled fireplaces, inserts, stoves, facings, and accessories. The segment's net sales in Q3 2025 were approximately $166.9 million (calculated as $683.8 million total net sales minus $516.9 million Workplace Furnishings net sales).

Key customer activity within Residential Building Products as of mid-2025 included:

• Home builders and new residential construction showing growth exceeding 4% year-over-year in Q2 2025.
• Homeowners in the remodel/retrofit market showing growth exceeding 7% year-over-year in Q2 2025.

Products across both segments are distributed through various channels, including independent dealers, distributors, eCommerce retailers, wholesalers, and retail outlets.

HNI Corporation (HNI) - Canvas Business Model: Cost Structure

You're looking at the cost side of HNI Corporation's operations as of late 2025, right after the big Steelcase announcement. The numbers tell a story of heavy investment in production and integration, which is where the real money goes.

Significant Cost of Goods Sold (COGS) from manufacturing and raw materials is the largest component, as expected for a manufacturer. For the three months ended September 27, 2025, the Cost of Sales totaled $395.7 million. Looking at the longer trend, the Cost of Sales for the nine months ended September 27, 2025, reached $1,138.0 million. This reflects the cost of materials, labor, and overhead tied directly to producing both workplace furnishings and residential building products.

The overhead, or operating expenses, shows the impact of recent strategic moves. Selling, General, and Administrative Expenses for the third quarter of 2025 were $222.7 million, up from $208.4 million in the third quarter of 2024. This increase captures ongoing investment in go-to-market functions and support. You can see the tail of the prior Kimball International (KII) acquisition in the 2024 Selling and Administrative Expenses, which included $41.2 million in KII acquisition-related expenses.

The focus on manufacturing network optimization is clear in the Capital Expenditures. For the nine months ended September 27, 2025, total Capital Expenditures were $50.8 million, with $19.6 million spent in the third quarter alone. This spending supports the ramp-up of the Mexico facility, which, alongside KII synergies, is expected to contribute $0.75 to $0.80 to diluted non-GAAP EPS in the 2025-2026 period. The massive pending Steelcase acquisition, valued at approximately $2.2 billion, carries a projected annual run-rate cost synergy target of $120 million when fully mature, which will impact future cost structures.

Labor costs are tied to the global workforce. As of late 2025, the employee count is reported around 7,800 members worldwide, though the prompt referenced a prior figure of 7,100. The total labor component is embedded within the Cost of Sales and the Selling, General, and Administrative Expenses.

HNI Corporation maintains a global footprint, with operations, manufacturing plants, and distribution centers primarily in the United States, India, and Mexico. While direct logistics costs aren't isolated, the distribution network supports a business where the five largest customers represented about 15 percent of consolidated net sales in fiscal 2024.

Here's a snapshot of the key financial figures impacting the Cost Structure for the latest reported periods (in millions of USD, unless otherwise noted):

Cost Component/Metric	Q3 2025 (Period Ended Sep 27, 2025)	Nine Months Ended Sep 27, 2025	FY 2024 (Full Year Ended Dec 28, 2024)
Total Cost of Sales (COGS)	$395.7	$1,138.0	Not explicitly provided for full year 2024 Cost of Sales
Total Selling, General, and Admin Expenses (SG&A)	$222.7	$645.7	SG&A as % of sales decreased 90 basis points vs 2023
Capital Expenditures (Total)	$19.6	$50.8	Total Capex was $43.2 million
Employee Count (Latest Reported)	N/A	N/A	7,600 (Dec 28, 2024) or 7,800 (Oct 14, 2025)
Projected Annual Cost Synergies (Steelcase)	N/A	N/A	$120 million (when fully mature)

The cost structure is also influenced by specific, non-recurring items. For instance, Restructuring, Impairment, and Loss on Divestiture costs in Q3 2025 were $0.8 million. For the nine months ended September 27, 2025, these costs totaled $9.7 million. These costs often relate to the factory consolidation initiatives in Workplace Furnishings and reorganization efforts in Residential Building Products.

You should note the financing cost associated with the pending acquisition, as J.P. Morgan and Wells Fargo provided $1.1 billion of committed debt financing via a 364-day Senior Unsecured Bridge Facility to cover the cash consideration.

The overall cost management strategy is highlighted by the fact that full-year operating income margin (GAAP and non-GAAP) reached its highest level since 2005 for the full year 2024.

HNI Corporation (HNI) - Canvas Business Model: Revenue Streams

You're looking at how HNI Corporation brings in the cash, which is really the core of any business model. For HNI Corporation, the revenue streams are clearly split between their two main operational segments, plus some forward-looking synergy benefits that are becoming a key part of the earnings picture.

The bulk of the revenue comes from selling physical goods, but don't forget the service component in the Residential segment, which is a nice vertical integration play.

Here's a look at the latest figures we have for the revenue streams, primarily based on the third quarter of 2025 results:

Revenue Stream Component	Latest Reported Amount (Q3 2025)	Context/Estimate
Net sales from Workplace Furnishings	$516.9 million	Q3 2025 net sales
Net sales from Residential Building Products	$166.9 million	Q3 2025 net sales
Full-year 2025 Consensus Revenue	US$2.64 billion	Analyst consensus estimate
Full-year 2025 Revenue (Alternative Estimate)	$2,593,200,000	WallStreetZen forecast for 2025 revenue

The Workplace Furnishings segment is the larger revenue driver, though the Residential Building Products segment is noted as generating more than half of annual profits in some analyses.

When we look at the expected future financial impact from internal improvements, the synergy realization is a critical, quantifiable revenue-adjacent stream impacting the bottom line:

• Expected incremental EPS benefit from Kimball International synergies and Mexico facility ramp-up over 2025-2026 is projected to be between $0.70 to $0.80 per diluted non-GAAP share.

Regarding the service revenue component within the Residential segment, HNI Corporation has a vertically-integrated model that includes direct sales channels:

The Residential Building Products segment generates revenue through a national system of independent dealers and distributors, but also through Corporation-owned channels. Specifically, approximately one quarter of the Residential Building Products revenue comes from products and services sold through their owned installing distributors.

Finance: draft 13-week cash view by Friday, incorporating the $45 million to $50 million synergy benefit into the 2025-2026 forecast.