Revenue during the quarter dropped 4.66 percent to $477.67 million from $501.04 million in the previous year period. Gross margin for the quarter contracted 70 basis points over the previous year period to 36.37 percent. Total expenses were 98.34 percent of quarterly revenues, up from 96.10 percent for the same period last year. That has resulted in a contraction of 223 basis points in operating margin to 1.66 percent.

Operating income for the quarter was $7.93 million, compared with $19.52 million in the previous year period.

However, the adjusted operating income for the quarter stood at $18.10 million compared to $22.40 million in the prior year period. At the same time, adjusted operating margin contracted 68 basis points in the quarter to 3.79 percent from 4.47 percent in the last year period.

"First quarter results were better than expected. Our businesses continue to compete well and generated sales at the high end of our anticipated range. As expected, the demand environment started slowly and improved throughout the quarter. We are pleased with the positive customer response to our recent investments and remain committed to driving long-term shareholder value," said Stan Askren, HNI Corporation chairman, president and chief executive officer.

For financial year 2017, HNI Corporation forecasts diluted earnings per share to be in the range of $2.80 to $3.10 on adjusted basis. Sales are expected to be up 2 percent to down 1 percent for the same period.

For the second-quarter, HNI Corporation forecasts diluted earnings per share to be in the range of $0.65 to $0.72 on adjusted basis. Total sales are expected to be flat to up 3 percent for the same period.

The company has spent $31.12 million cash to meet investing activities during the quarter as against cash outgo of $60.93 million in the last year period.

Cash flow from financing activities was $60.08 million for the quarter, down 34.11 percent or $31.10 million, when compared with the last year period.

Cash and cash equivalents stood at $29.13 million as on Apr. 01, 2017, down 24.47 percent or $9.44 million from $38.57 million on Apr. 02, 2016.

Working capital remains negative
Working capital of HNI Corporation was negative $47.97 million on Apr. 01, 2017 compared with negative $15.71 million on Apr. 02, 2016. Current ratio was at 0.90 as on Apr. 01, 2017, down from 0.97 on Apr. 02, 2016.

Days sales outstanding were almost stable at 41 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 22 days for the quarter compared with 39 days for the previous year period.