HNI Corp (HNI)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	183,900	186,100	113,600	90,300	82,600	107,700	141,200	155,200	144,100	88,400	83,200	85,400	105,024	117,586	107,728	61,400	93,637	115,531	124,218	151,981
Interest expense (ttm)	US$ in thousands	27,700	32,000	30,400	25,500	19,900	12,900	9,500	8,786	8,175	7,628	7,385	7,154	7,184	6,848	6,934	6,990	7,104	7,792	8,611	9,267
Interest coverage		6.64	5.82	3.74	3.54	4.15	8.35	14.86	17.66	17.63	11.59	11.27	11.94	14.62	17.17	15.54	8.78	13.18	14.83	14.43	16.40

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $183,900K ÷ $27,700K
= 6.64

HNI Corp's interest coverage ratio fluctuated over the years based on the provided data. The interest coverage ratio indicates the company's ability to meet its interest obligations on outstanding debt.

From December 31, 2019, to June 30, 2021, the interest coverage remained relatively strong, ranging from around 14 to 17 times, suggesting that the company had ample earnings to cover its interest expenses comfortably.

However, from December 31, 2021, to December 31, 2024, the interest coverage ratio declined significantly, dropping to as low as 3.54 times by the end of December 2023. This downward trend may indicate that the company's ability to cover its interest expenses with its operating income weakened during this period.

The significant drop in the interest coverage ratio signals potential financial distress or constraints in generating enough earnings to cover interest costs efficiently. It's important for HNI Corp to closely monitor its interest coverage ratio and take appropriate actions to improve its financial stability and mitigate potential risks associated with debt obligations.