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HNI > SEC Filings for HNI > Form 8-K on 27-Jun-2014All Recent SEC Filings

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Form 8-K for HNI CORP


Costs Associated with Exit or Disposal Activities

Item 2.05 Costs Associated with Exit or Disposal Activities.

As part of on-going efforts to reduce structural costs, on June 25, 2014, HNI Corporation (the "Corporation") notified its members (i.e., employees) and the union representing the bargaining unit at its Midwest Folding Products business located in Chicago, Illinois of its tentative decision, pending negotiations and consultation with the union, to close the facility. The Corporation plans to consolidate the Chicago production into an existing education furniture manufacturing facility and anticipates the closure and consolidation to be substantially completed by the first quarter of 2015.

The Corporation estimates the realignment will save $2.3 million annually beginning in 2015. The Corporation anticipates charges related to the closure and consolidation will impact pre-tax earnings an estimated $4.9 million. The Corporation estimates cash restructuring and other costs associated with these actions will be approximately $3.4 million. The following table lists the estimated composition and timing of these charges:

(Dollars in Millions)
                                    Accelerated      Other Costs
 Time Period      Restructuring    Depreciation        (Cash/                 Total
                  Costs (Cash)      (Non-Cash)        Non-Cash)
Q2 2014                0.6               -               0.4                   1.0
Q3 2014                0.4              0.2              0.9                   1.5
Q4 2014                0.8              0.1              1.2                   2.1
                                                                  2014 Total   4.6
2015                   0.3               -                -                    0.3
                                                                  2015 Total   0.3
                                                                  Grand Total  4.9

The Corporation also expects additional charges will become estimable when the Corporation and the union conclude negotiations over the decision/effects of the facility closing, as required by the union contract. The Corporation expects to complete these negotiations, along with the details of the production phase-out during the third quarter of 2014.

The tentative decision to close the facility along with other market factors was identified as a triggering event for purposes of goodwill impairment testing. The Corporation is finalizing its valuation consistent with the requirements of ASC 350 and estimates a goodwill impairment of approximately $9 million will be recorded in its office furniture segment during the second quarter of 2014.

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