HNI CORPHNI
HNI CORP Goodwill & Intangibles Disclosure
Goodwill and Other Intangible Assets
Goodwill and other intangible assets included in the Consolidated Balance Sheets consisted of the following:
| January 3, 2026 | December 28, 2024 | ||||||||||
| Goodwill, net | $ | 958.0 | $ | 442.1 | |||||||
| Definite-lived intangible assets, net | 425.5 | 133.1 | |||||||||
| Indefinite-lived intangible assets | 319.1 | 49.1 | |||||||||
| Total goodwill and other intangible assets, net | $ | 1,702.6 | $ | 624.3 | |||||||
Goodwill
The changes in the carrying amount of goodwill, by reportable segment, are as follows:
| Workplace Furnishings | Residential Building Products | Total | |||||||||||||||
| Balance as of December 30, 2023 | |||||||||||||||||
| Goodwill | $ | 297.2 | $ | 222.4 | $ | 519.6 | |||||||||||
| Accumulated impairment losses | (78.5) | (0.1) | (78.6) | ||||||||||||||
| Net goodwill balance as of December 30, 2023 | $ | 218.7 | $ | 222.3 | $ | 441.0 | |||||||||||
| Goodwill measurement period adjustments | 1.1 | — | 1.1 | ||||||||||||||
| Balance as of December 28, 2024 | |||||||||||||||||
| Goodwill | 298.3 | 222.4 | 520.7 | ||||||||||||||
| Accumulated impairment losses | (78.5) | (0.1) | (78.6) | ||||||||||||||
| Net goodwill balance as of December 28, 2024 | $ | 219.8 | $ | 222.3 | $ | 442.1 | |||||||||||
| Preliminary goodwill acquired | 515.9 | — | 515.9 | ||||||||||||||
| Goodwill disposed | (13.9) | — | (13.9) | ||||||||||||||
| Accumulated impairment losses disposed | 13.9 | — | 13.9 | ||||||||||||||
| Balance as of January 3, 2026 | |||||||||||||||||
| Goodwill | 800.3 | 222.4 | 1,022.7 | ||||||||||||||
| Accumulated impairment losses | (64.6) | (0.1) | (64.7) | ||||||||||||||
| Net goodwill balance as of January 3, 2026 | $ | 735.7 | $ | 222.3 | $ | 958.0 | |||||||||||
Current year preliminary goodwill acquired relates to the acquisition of Steelcase, and may change materially during the next year. Current year goodwill disposed and accumulated impairment losses disposed relate to the second quarter 2025 sale of HNI India. Prior year goodwill measurement period adjustments relate to the acquisition of Kimball International, as the measurement period was closed during the second quarter of 2024. See "Note 4. Acquisitions and Divestitures" for additional information.
Definite-lived intangible assets
The table below summarizes amortizable definite-lived intangible assets, which are reflected in "Goodwill and Other Intangible Assets, net" in the Consolidated Balance Sheets:
| January 3, 2026 | December 28, 2024 | |||||||||||||||||||||||||||||||||||||
| Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||
| Software | $ | 275.1 | $ | 244.7 | $ | 30.4 | $ | 189.3 | $ | 151.3 | $ | 38.0 | ||||||||||||||||||||||||||
| Trademarks and trade names | 15.6 | 9.5 | 6.2 | 17.9 | 8.3 | 9.5 | ||||||||||||||||||||||||||||||||
| Customer lists and other | 454.2 | 65.3 | 388.9 | 139.7 | 54.3 | 85.5 | ||||||||||||||||||||||||||||||||
| Net definite-lived intangible assets | $ | 745.0 | $ | 319.5 | $ | 425.5 | $ | 346.9 | $ | 213.9 | $ | 133.1 | ||||||||||||||||||||||||||
The increase in definite-lived intangible assets in the current year relate to the acquisition of Steelcase. Amounts related to Steelcase are preliminary and may change materially during the next year. See Impairment Analysis below for details on the impairment of definite-lived intangible assets in the current year.
Amortization expense is reflected in "Selling and administrative expenses" in the Consolidated Statements of Comprehensive Income and was as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Capitalized software | $ | 18.7 | $ | 20.4 | $ | 21.6 | |||||||||||
| Other definite-lived intangibles | $ | 12.2 | $ | 10.5 | $ | 8.5 | |||||||||||
The occurrence of events such as acquisitions, dispositions, or impairments may impact future amortization expense. Amortization based on the preliminary valuation of definite-lived intangibles acquired with Steelcase Inc. is included in the projection below. A decline in the next several years is primarily due to the completion of the amortization of the Corporation’s Business Systems Transformation investment. Based on the current amount of intangible assets subject to amortization, the estimated amortization expense for each of the following five fiscal years is as follows:
| 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||||||||||||
| Amortization expense | $ | 65.6 | $ | 51.7 | $ | 43.3 | $ | 43.0 | $ | 42.8 | |||||||||||||||||||
Indefinite-lived intangible assets
The Corporation also owns certain intangible assets, which are deemed to have indefinite useful lives because they are expected to generate cash flows indefinitely. The increase in indefinite-lived trade names in the current year relate to the acquisition of Steelcase. Amounts related to Steelcase are preliminary and may change materially over the next year. These indefinite-lived intangible assets are reflected in "Goodwill and Other Intangible Assets, net" in the Consolidated Balance Sheets:
| January 3, 2026 | December 28, 2024 | ||||||||||
| Trademarks and trade names | $ | 319.1 | $ | 49.1 | |||||||
Impairment Analysis
The Corporation evaluates its goodwill and indefinite-lived intangible assets for impairment on an annual basis during the fourth quarter (using a valuation date as of the start of the Corporation's fourth quarter), or whenever indicators of impairment exist. The Corporation also evaluates long-lived assets (which include definite-lived intangible assets) for impairment if indicators exist.
2025
The Corporation elected to perform a qualitative assessment for purposes of its annual goodwill and indefinite-lived trade name impairment testing in 2025. Based on these assessments, management concluded that for the majority of reporting units and trade names, it was more likely than not that the fair value was greater than carrying value and no quantitative testing was necessary.
For a small Workplace Furnishings reporting unit, management concluded that a triggering event occurred in the fourth quarter of 2025, resulting in quantitative impairment tests for goodwill and the long-lived asset group. This determination was made considering the reduced recent profitability projections of the reporting unit, driven by recent disruptions in global trade.
As a result of the testing, it was determined that the carrying value of the long-lived asset group was not fully recoverable based on an analysis of the undiscounted estimated future cash flows of the group. Consequently, the Corporation recorded charges of $2.2 million and $5.5 million to partially impair the carrying values of definite-lived trade names and a customer list, respectively, within this asset group and, as a result, the remaining value of these assets are immaterial. The fair value of the trade names are considered a Level 3 measurement which utilizes a relief-from-royalty discounted cash flows approach. Key inputs and assumptions involved include the estimated near-term revenue growth (10 percent), long-term growth rate (3 percent), royalty rate (0.5 percent), and discount rate (15 percent). The fair value of the customer-list is considered a Level 3 measurement which utilizes the multi-period excess earnings method. Key inputs and assumptions involved include the estimated near-term revenue growth (10 percent), long-term growth rate (3 percent), customer retention rate (99 percent), and marketing expense rate (3 percent) and discount rate (15 percent).
For the quantitative goodwill impairment testing, management utilized a combination of both a discounted cash flows approach and market approaches. The reporting unit was determined to have a fair value exceeding its carrying value, and no impairment was recorded.
2024
In 2024 the Corporation elected to perform a quantitative assessment for purposes of its annual goodwill and indefinite-lived trade name impairment testing. All reporting units and trade names tested were determined to have fair values that exceeded the respective carrying values, and thus no impairment charges were recorded.
2023
The Corporation elected to perform a qualitative assessment for purposes of its annual goodwill and indefinite-lived trade name impairment testing in 2023. Based on these assessments, management concluded that for the majority of reporting units and trade names, it was more likely than not that the fair value was greater than carrying value and no quantitative testing was necessary.
For a small workplace furnishings reporting unit, management concluded that a quantitative assessment was required. For the quantitative goodwill impairment testing, management utilized a combination of both a discounted cash flows approach and market approaches. As a result of the impairment testing in 2023, this reporting unit was determined to have a carrying value in excess of its fair value, resulting in a pretax of $27.6 million. This reporting unit has remaining goodwill of $6.0 million. The driver of the impairment was a reduction in the short-to mid-term financial forecast for this business as a result of softening market demand tied to macroeconomic conditions. Projections used in the impairment model reflected management’s assumptions, which are those of a market participant, regarding revenue growth rates, economic and market trends, cost structure, investments required in support of strategic initiatives, and other expectations about the anticipated short-term and long-term operating results of the reporting unit (Level 3 measurements). For this reporting unit, the Corporation assumed a discount rate of approximately 14 percent, near-term growth rates ranging from -13 percent to +10 percent, and a terminal growth rate of 3 percent.
For a small workplace furnishings business trade name, management concluded that a quantitative assessment was required. As a result of the quantitative impairment testing in 2023, management concluded that a pretax of $3.4 million was required related to this indefinite-lived intangible asset. The drivers of the impairment include a reduced sales outlook for this business and a decline in the estimated royalty rate. The valuation assessment of this trade name is considered a Level 3 measurement that utilized a relief-from-royalty discounted cash flows approach. Key inputs and assumptions involved in the quantitative testing included estimated near-term growth rates ranging from -2 percent to +5 percent, a long-term growth rate of 3 percent, a royalty rate of 1 percent, and a discount rate of 16 percent.
See "Note 16. Restructuring and Impairment" for more information regarding goodwill, intangible asset, and long-lived asset impairments in recent prior years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 3, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2022 | |
| 2021 | Mar 2, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 29, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.