Title

Presentation

HNI Corporation beats earnings expectations. Reported EPS is $0.34, expectations were $0.31.

Operator: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the HNI Corporation First Quarter 2026 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Matthew S. McCall. Please go ahead.

Matthew S. McCall: Good morning. My name is Matthew S. McCall. I am Vice President, Investor Relations and Corporate Development for HNI Corporation. Thank you for joining us to discuss our first quarter 2026 results. With me today are Jeffrey D. Lorenger, Chairman, President and CEO, and Vincent Paul Berger, Executive Vice President and CFO. Copies of the financial news release and non-GAAP reconciliations are posted on our website. Statements made during this call that are not strictly historical facts are forward-looking statements, which are subject to known and unknown risks. Actual results could differ materially. The financial news release posted on our website includes additional factors that could affect actual results. The corporation assumes no obligation to update any forward-looking statements made during the call. I am now pleased to turn the call over to Jeffrey D. Lorenger. Jeff?

Jeffrey D. Lorenger: Thanks, Matt. Good morning, and thank you for joining us. Our members delivered solid first quarter results that exceeded our internal expectations in a difficult and dynamic environment. The momentum of our strategies, the benefits of our diversified revenue and profit streams, our ongoing focus on items within our control, and the merits of our customer-first business model continued to deliver strong shareholder value. The takeaway from today’s call is we expect a strong year in 2026, with a fifth straight year of double-digit earnings improvement and modest revenue growth in both segments. On today’s call, I will break my comments into three sections. First, our quarterly results. Again, we delivered solid results despite ongoing geopolitical and macro uncertainty.

Second, the remainder of 2026. Despite softer-than-anticipated revenue patterns to start the year, we expect net sales to grow in 2026, with another year of double-digit non-GAAP EPS growth anticipated. And third, our outlook beyond 2026. We project double-digit EPS growth again next year as we maintain multiple years of elevated earnings visibility beyond 2027. Following those comments, Vincent Paul Berger will provide more details about the first quarter, our outlook, and our cash flow and balance sheet. I will close with some additional color commentary before we open the call to your questions. I will start with some highlights from the first quarter. Our members continue to focus on controlling the controllables through focused cost management and benefits from price/cost.

This was despite demand softness to begin the year, especially in Workplace Furnishings, amid concerns related to the conflict in the Middle East, the U.S. economy broadly, and the impact of tariffs specifically. In our legacy Workplace Furnishings businesses, first quarter net sales were down about 5% year-over-year on an organic basis, with modest growth in our businesses focused on small and medium-sized customers. We saw weakness early in the quarter with large corporate customers as the impacts of global macro uncertainty were most prevalent during January and February. However, we saw organic segment orders turn positive in March with additional acceleration thus far in the second quarter. This supports our bullishness for the remainder of the year, which I will discuss more in a moment.

As we finish the quarter, it is important to note the integration of Steelcase is going well. Synergy capture and accretion are on track, and our cultures are melding nicely. Including Steelcase, Workplace Furnishings segment non-GAAP operating profit in the first quarter totaled almost $49 million, nearly double the prior-year level. We continue to expect modest accretion from Steelcase in 2026, and we remain confident in our projected total synergy-driven accretion of $1.20 when fully mature. In Residential Building Products, revenue increased more than 2% versus the prior-year period. These are strong results given the ongoing weakness in the new home market. Our growth investments are bearing fruit, and we are outperforming the market. Our new construction revenue was down mid-single digits year-on-year, which compares favorably to single-family permits, which declined in the high single digits.

Our remodel/retrofit revenue was up 13% on a year-over-year basis. First quarter segment operating profit margin expanded 190 basis points year-over-year, reaching 17.6%. Despite expectations of ongoing uncertainty, we remain encouraged by our opportunities, and we continue to invest to grow our operating model and revenue streams. In summary, HNI Corporation’s first quarter performance demonstrates the strength of our strategies, our ability to manage daily uncertainty through varying macroeconomic conditions, all while remaining focused on investing for the future. And we continue to expect strong results in the full year, driven by margin expansion and modest revenue growth. That leads me to my comments on our outlook for the remainder of 2026.

I will start with legacy Workplace Furnishings, where we expect segment revenue to increase at a low single-digit pace for the full year, with high single-digit growth in the back half. Additionally, for the Steelcase business, we expect full-year revenue to grow slightly. Our outlook is supported by external industry metrics and by our internal pipeline data. Specifically, in addition to strengthening orders over the past month and a half, our order funnel, bid quotes, and design activity all improved later in the quarter. From an earnings perspective, we expect Steelcase to be net neutral in the first half and turn modestly accretive in the second half and for the full year. In Residential Building Products, our structural changes—organizing around the customer and consumer—along with our growth investments are expected to drive continued market outperformance.

For 2026, we expect modest price-driven revenue growth in the second half despite expectations of ongoing housing market softness. From a profitability perspective, we expect both our Workplace Furnishings and our Residential Building Products businesses to expand margins in 2026. While we are optimistic about the year and expect another year of double-digit non-GAAP EPS growth, we will remain focused, conservative, and ready to adjust as required. Our earnings outlook is supported by the anticipated benefits of our ongoing visibility story and our proven ability to manage through changing economic conditions. Moving on to my third point, a few comments on our outlook beyond 2026. We project double-digit EPS growth again in 2027, driven primarily by expected synergies from Steelcase and legacy network optimization projects.

Further, we continue to have multiple years of elevated earnings growth visibility beyond 2027. During the first quarter, we made certain key decisions pertaining to Steelcase integration that will have positive longer-term implications. As an example, we terminated Steelcase’s multiyear ERP implementation project. This move is part of a broader effort at Steelcase to streamline priorities to focus on profitable growth, while also avoiding disruption, eliminating substantial future ERP investment, and redeploying resources back into the business toward customer-focused initiatives. Also during the quarter, we began smartly managing costs across all our businesses in response to a softer start to the year, driven by the current geopolitical backdrop.

These new actions are in addition to the previously announced $120 million of synergies associated with the integration of Steelcase, which, as I stated earlier, are on track. At the same time, our current synergy projections are focused on the Americas business only and assume no revenue synergies. Importantly, we remain laser-focused on minimizing any front-end disruption across our Workplace Furnishings businesses. Finally, as we discussed last quarter, we continue to expect an additional $30 million of savings from network optimization in our legacy Workplace Furnishings businesses over the next three years. The combination of our disciplined cost management, Steelcase synergies, and our ongoing legacy network optimization projects continue to strengthen our earnings visibility story.

Now I will turn the call over to Vincent Paul Berger to provide more details about the first quarter, our outlook, and our cash flow and balance sheet. I will then provide a longer-term perspective on the opportunities surrounding our businesses before we open the call to your questions. VP?

Vincent Paul Berger: Thanks, Jeff. I will start with some additional comments about the first quarter. GAAP diluted EPS totaled $0.55. On a non-GAAP basis, diluted EPS totaled $0.34, which was slightly ahead of our internal expectations. Our non-GAAP results exclude several items totaling $88 million, the majority of which was tied to the impact of purchase accounting associated with the Steelcase acquisition. While volume activity was negatively impacted by the geopolitical conditions, especially in the Workplace Furnishings segment, expense control, price/cost, and productivity benefits offset volume softness and continued investment in initiatives aimed at driving future growth. Total net sales in the quarter increased 125% overall, or were down 3% on an organic basis.

From a Q1 orders perspective in our Workplace Furnishings segment, orders from small- to medium-sized customers were up low single digits. Orders from contract customers, including both legacy Workplace and Steelcase, were down mid-single digits versus 2025 levels. As Jeff mentioned, we saw order patterns improve late in the quarter. Orders in the Residential Building Products segment increased 4% compared to 2025. Remodel/retrofit orders outperformed those from the new construction channel. The year-over-year average order growth rate over the final five weeks of the quarter was in line with the rate for the quarter overall. Looking ahead, we expect second quarter 2026 net sales in the legacy Workplace Furnishings to increase at a low single-digit rate year-over-year.

Including Steelcase, total Workplace Furnishings net sales are expected to grow approximately 155% to 160% versus the prior-year period. In Residential Building Products, second quarter 2026 net sales are expected to decrease at a low single-digit rate compared to the same period in 2025. The impact of the recent order strength includes increased long lead-time orders versus the prior year. These orders will ship in the fall and benefit the back-half results. Non-GAAP diluted earnings per share in the second quarter of 2026 are expected to decline modestly from 2025 levels. The addition of Steelcase is expected to be net neutral to modestly accretive to diluted non-GAAP earnings per share in the quarter. The year-over-year non-GAAP earnings pressure is expected to be driven by lower organic volume and continued investment.

Our outlook for 2026 full-year earnings reflects expectations for mid-teens percent non-GAAP EPS growth from 2025 full-year of $3.53, with accelerating double-digit earnings growth in the second half of the year. Given the timing of synergy recognition and cost management savings, we now expect non-GAAP diluted earnings per share to be roughly equal in the third and fourth quarters. Productivity, cost management, network optimization initiatives, Steelcase accretion, and price/cost benefits are expected to more than offset operating profit headwinds associated with volume pressure and continued investments. As we look to 2027 and beyond, as Jeff mentioned, we expect double-digit non-GAAP EPS growth again next year, and we have multiple years of elevated earnings growth visibility beyond 2027.

Steelcase accretion and legacy Workplace network optimization initiatives continue to support elevated levels of visibility. In total, these items are expected to yield savings exceeding $70 million in 2027 and more than $150 million when fully mature. These totals do not include the benefits of our new cost management saving efforts. Next, a few additional items to assist you in your 2026 modeling. Combined depreciation and amortization are expected to be approximately $150 million to $155 million, excluding purchase accounting impacts of approximately $105 million. Net interest expense is expected to total between $75 million and $80 million. Our tax rate should be approximately 25%. Finally, from a cash flow and balance sheet perspective, the benefits of the Steelcase acquisition, the strength of our strategies, and our financial discipline are expected to drive free cash flow, which will help us quickly deleverage our balance sheet over the next couple of years.

As a result, leverage is expected to return to pre-deal levels in the 1.0x to 1.5x range within two years of the deal closing. Finally, we remain committed to payment of our long-standing dividend and continuing to invest in the business to drive future growth. I will now turn the call back over to Jeff for some longer-term thoughts and closing comments.

Jeffrey D. Lorenger: Thanks, VP. In the first quarter, our members remained focused on our strategies. We managed our businesses well. We delivered a solid quarter that modestly exceeded our internal expectations. Looking forward, we remain focused on driving growth and expanding margins, and we will continue to invest for the future with confidence. As I mentioned, we saw a slower start to the year than we had anticipated, particularly in the Workplace segment, where demand activity was clearly impacted by the conflict in the Middle East and U.S. macro uncertainty. However, from a demand indicator perspective, the fact pattern we have discussed in the last couple of quarters is unchanged, and we remain bullish about the segment’s demand environment.

Return to office continues to be a positive driver of activity, with levels of remote work expected to fall further in 2026. Office leasing activity grew for the third straight quarter in Q1, with annual leasing activity up more than 7% year-over-year. Net absorption of office space, which has historically been a good leading indicator of future industry demand, was also positive for the third straight quarter, with nearly 3.5 million square feet absorbed. Thus, while supply of new office space will remain a headwind, we see multiple cyclical drivers of growth outside of new construction. These encouraging external industry drivers are consistent with our recent order patterns and internal pre-order metrics in both legacy Workplace and Steelcase.

Our funnel continues to expand, with quotes up year-over-year and with the number of large-dollar projects increasing versus the prior-year period. Design activity also strengthened during the first quarter, and jobs won but not yet ordered are up double digits as well. Customers remain engaged. Activity is robust with both dealers and end users, and our businesses are positioned to win. Moving on to housing, headlines continue to point to ongoing softness, especially in the new-build space. Interest rates remain relatively elevated. Prices remain high, and affordability concerns persist, and we expect continued new construction weakness in 2026. However, our structural go-to-market initiatives and growth investments will allow us to continue to outperform the market.

In remodel/retrofit, we are assuming modest market growth in 2026. This is consistent with LIRA projections. In addition, we expect continued market outperformance in our R&R business, and we expect ongoing margin and cash flow consistency from this segment. In conclusion, as we discussed in detail last quarter, we are a transformed and fundamentally stronger organization. Upon recognition of all targeted Steelcase synergies, network optimization savings, and cost management benefits, HNI Corporation will have substantially higher earnings, stronger margins, greater cash flow, and a continued strong balance sheet. This will enable us to continue to deliver exceptional value to our shareholders, customers, dealers, members, and communities. I want to thank all HNI Corporation members and specifically the Steelcase employees, as they have engaged enthusiastically to begin their HNI journey.

Thank you again for joining us. We will now open the call to your questions.

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Operator: At this time, I would like to remind everyone, in order to ask a question, press star then the number 1 on your telephone keypad. Your first question comes from the line of Reuben Garner with The Benchmark Company. Your line is open.

Reuben Garner: Thank you. Good morning, everyone.

Jeffrey D. Lorenger: Good morning.

Reuben Garner: Maybe to start, the change in the Workplace outlook for the full year, it sounds like things actually got better later in the quarter and to start the second quarter. Can you just walk through the progression of orders through Q1 and what you saw in April? And if things are improving of late, what kind of other internal indicators are making you take that outlook down? Or is it just the slower start that is going to be hard to catch up? Or is it conservatism? Any thoughts there would be helpful.

Vincent Paul Berger: Sounds good, Reuben. I will walk you through it. Jeff mentioned the actual order numbers. If we look at the first quarter overall, the legacy Workplace side was down 3%. The contract side was off a little bit more, both for Steelcase as well as the legacy HNI, closer to 5%. The important point is it was a slower start, which for sure is taking our full-year expectation down a little bit. But in March, it did pick up. As it continued to progress through the quarter, it actually got stronger. If I look at the last five weeks, that momentum has continued across the different segments. The way we are thinking about it, we are going to show this first quarter down about 5%, and then in the second quarter, we are going to pivot back to growth.

We have got low single digits pivoted for the second quarter, which is supported by our recent order trends as well as how we finished the first quarter. As we think about the full year, we have enough indicators—and Jeff will talk to the internal metrics and some of the other external metrics—that say the back half actually has strong high single-digit growth. We think we caught an air pocket, and the order trends that are coming in now are supporting growth for the second quarter as well as even stronger growth for the back half.

Jeffrey D. Lorenger: Yes, I think that is a good summary. The other thing, Reuben, with the Steelcase business, some of the larger projects are spaced out a little bit more. We are dialing in on when the revenue hits. I had mentioned that our order book is solid. Some of the ship dates are moving around. The other thing we noticed, once we got out of this air pocket, customers concluded they learned their lesson during COVID: they cannot wait. They have capital to deploy and want to get moving. That is really what we saw, but it definitely was a slower start to the year than we had anticipated. We think we are behind that now.

Reuben Garner: Okay. Embedded in your second quarter outlook, how much near-term price/cost noise is there from the quickly rising transportation and energy situation? How quickly can you offset? Can you talk about what pricing tactics you are using to offset those costs?

Vincent Paul Berger: Sure. Consistent with our goal, we aim to offset tariffs or general inflation over time. Specifically, there is about a $2 million headwind in Q2 that we will catch back up in Q3 and Q4 through price surcharges, similar to what we have done in the past. I know it is dynamic—things are changing. The AD/CVD piece came off, then we added the new Section 232s. Even with all that, we expect to offset it, and we will probably have a couple million dollars of headwind in Q2.

Reuben Garner: Okay. Last one for me. The comments about the cost management efforts tied to the slower environment—can you elaborate on some of the moves that you are making there? And then if I heard you correctly, I think you used the word “terminate” for Steelcase’s ERP project—that was not delayed. A little more detail on what is going on there, why that move, and what the benefits of the change will be to the organization.

Jeffrey D. Lorenger: I will hit the ERP, Reuben. A couple of things drove that. One, now that we are a combined entity, we wanted to step back and take a look at what the best program was going to be for the HNI network. Two, they had quite a ways to go in that project, and we felt like stepping back from that and resetting and reexamining was best for the business. Also, those take a lot of effort, and we have a lot in front of us where we can redeploy assets to grow the business, whether it be in product development or sales, or other network optimization across the network. We stepped back from that. We think it is going to be an unlock relative to being able to focus the business on customer-centric growth initiatives, and that is really without a lot of downside.

Vincent Paul Berger: On cost management, similar to what we have done in the past, we want to control the controllables. We got out of the gate slow with some revenue pressure. It was in all areas of the business, actually, Reuben. In all the business segments, we looked at open headcount, discretionary spend, and, with the termination of the business transformation going on with Steelcase, we had some headcount adjustments. It is never in one spot. The whole idea is to still protect our goal and target of double-digit EPS growth. If you delever what is happening—if you are pulling sales down from mid single digits that were forecast for Workplace to low single digits—we adjusted our cost structure to ensure that we can still have double-digit non-GAAP EPS growth over the prior year.

Reuben Garner: Thanks for the detail, guys, and good luck.

Operator: Your next question comes from the line of Gregory John Burns with Sidoti & Company. Your line is open.

Gregory John Burns: Was the impact from the war in the Middle East localized to that region, or did it create a more global impact for your office business? I want to better understand the commentary about how that impacted demand in the quarter.

Jeffrey D. Lorenger: Yes, I think it is a little of both, Greg. We are watching the international businesses closely and monitoring those impacts. I think it was more of a general feeling where customers hit pause. But all our channel checks now are consistent that we are back in the game, and the optimism is there. It is hard to pinpoint exactly where it hit, other than it was broad-based across all our businesses. We play in most markets. We play in all the verticals. We play small, medium, and large corporate. With the small business side continuing on, everything else took a step back in January and February. We believe it was a combination of the war and uncertainty. Then, as I stated earlier, in engaging with customers, they said the boss told them to slow down for a minute, and now he or she is saying, let us keep this moving. That is the bottom line. It was a broad-based macro slowdown that now seems to be behind us.

Gregory John Burns: Okay. Thank you.

Operator: Your next question comes from the line of David Sutherland MacGregor with Longbow Research. Your line is open.

David Sutherland MacGregor: Good morning, everyone, and thanks for taking my questions. During January and February, it seems like people, as you say, hit pause on releasing purchase orders. Can you talk about what you were seeing otherwise underneath that in the market? Was quoting activity continuing? Were people still doing mockups? Was it business as usual there that would give you a little more confidence in the longer-term view?

Jeffrey D. Lorenger: Yes, David, that is right on. It felt a little like what we first saw when we came out of COVID. People were still active. The difference this time is they have been through that now and were ready to go. It was more of a slight delay in placing the PO, but quoting was rolling. Activity was high at dealers. Activity was high in the sales force. Optimism remained. It never really muted; the order book just did not flow like we had anticipated. That is why we are pretty bullish based on all the indicators and what we are now seeing start to flow for the full year.

David Sutherland MacGregor: Right. Did you see any order cancellations? Was there much activity there?

Jeffrey D. Lorenger: No. We really did not. We monitor that as well. If anything, we saw just a general slowdown and then the normal project delays with construction and things like that, but no cancellations.

David Sutherland MacGregor: Okay. Great. Are you conducting any repricing of backlog orders?

Vincent Paul Berger: We are not. We confirm the orders and let them flow out. That creates a little bit of the headwind of a couple million dollars in the short term, but our process has it covered, and we catch it back up.

David Sutherland MacGregor: Okay. Are you far enough along now in terms of your thinking around Steelcase that you can talk about international and what actions you may be contemplating aimed at achieving higher levels of profitability from that business?

Vincent Paul Berger: David, we are getting more and more up to speed on that business every day. We understand their go-to-market now. We are locked in with how we forecast their business. Key there is what we talked about before: they had already started some pretty significant profit improvement plans, which included restructuring and transformation. They were in the late innings of that, and we feel good about the overall profit improvement year-over-year that that business is going to drive for shareholder value.

David Sutherland MacGregor: Okay. Thanks, VP. Last question for me is on the RBP business. Can you talk about the brand consolidation and how that is being received in the channels? Will there need to be any clearance of inventory? If so, how should we think about potential margin headwind in terms of magnitude and timing?

Jeffrey D. Lorenger: Are you speaking specifically on the stove side, David?

David Sutherland MacGregor: Yes, I am. Thanks.

Vincent Paul Berger: We are in a three-year journey, and it is actually going really well. It began about 18 months ago to put an overarching brand called “Forn & Flame” over top of all of our biomass products. That was more of a digital way to get to the consumer. We are now in the journey to talk about how we will badge those different brands and then use their names as technology. We do not see any downside with this. We already were the industry leader; now we are clearly the industry leader from a digital standpoint. It will take us probably another 18 months to get all the way through, and we are not going to strand inventory. We are taking our time with it. That business is performing very well. Year-over-year, we continue to take market share. It is where a lot of our initiatives are. I think you will see this play out behind the scenes.

Jeffrey D. Lorenger: Okay.

David Sutherland MacGregor: Great. Thank you very much, and good luck.

Jeffrey D. Lorenger: Thank you.

Operator: Your next question comes from the line of Catherine Thompson with Thompson Research Group. Good morning, and thank you for taking my questions today. Could you talk a little bit more about what you are seeing in terms of demand trends for non-office verticals in the quarter, and break it down by end market and by geography, U.S. versus Europe? How do you expect this to shape through the year? Are there any ways where you can benefit more specifically as we look at the broad reindustrialization trend in the U.S.?

Jeffrey D. Lorenger: In the office verticals, we are seeing positive trends in health and education. We are getting lots of higher-ed businesses that are leaning in to not only Steelcase but our Allsteel side. We are positioned well with the federal government on the Steelcase side and seeing positive trends there. As it relates to international, year-over-year, their orders are actually up, so they are hanging in there across both in-market/for-market as well as the global business accounts. The longer-term outlook is a little early to tell, but we are pretty disciplined in our thinking about where we shift resources. We have breadth and depth to cover all the verticals and core customers. We have geographies covered now and really strong distribution.

We are monitoring enterprise networks and where people are making investments. Manufacturing is doing pretty well right now. We have strong research and strong ability to pivot as those markets develop. Right now, we are playing all the bases and have not overweighted any of them, but we will when the hot hand appears—that has been our history. With the Steelcase adder to the HNI Corporation network, it gives us a lot more geographic coverage and diversity to do that.

Analyst: Following up on that, when you think about the different types of construction projects beyond traditional, we are seeing different types of players working creatively with builders and developers. Have you changed or thought about doing anything differently in terms of winning different types of business in this dynamic market?

Jeffrey D. Lorenger: One way we get at that is co-development. We have teams that engage with customers and businesses early. You are upstream of that when you talk construction, but that sometimes leads to how people are thinking about how they want their workspace to be branded. We are seeing a lot more engagement from customers the last couple of years. It is less cookie-cutter and more dynamic around what they need—whether to get employees back in the office, what they want their brand to be, or the new ways of working. We have shifted resources to more dynamic co-development and set up manufacturing flows to be more versatile and agile around making product that is nonstandard. That is how we are evolving our business model to be more dynamic and play these different elements as they appear, because they shift and move fairly quickly.

Analyst: That is helpful. Final question: Steelcase following up on their small/mid-sized business growth initiatives—can you compare how they are doing in that segment versus what core HNI Corporation is doing, and whether you are adjusting any Steelcase strategy to that end market?

Vincent Paul Berger: Very similar businesses. We definitely are not adjusting strategy related to the Steelcase SMB and the legacy SMB, and they are both performing very similar. The SMB business has been resilient in both Steelcase as well as the legacy HNI Corporation if you look over the last few quarters. They are going to continue to win on those smaller projects. The main difference in the Steelcase SMB is they play, in some cases, on seat counts that are more than our traditional SMB plays on. Other than that, they are very similar in how they go to market and how they are performing.

Jeffrey D. Lorenger: Long term, we will look for opportunities as we go. To clarify, their SMB metrics—size, type of job, order book, average order size—are a little bit higher than our traditional. They are both called SMB to start, but what it has done is stretch the coverage model so we have no gaps depending on how you define SMB. That is the benefit. That is why we are not making any sudden adjustments. We will see how it all flows and where there is leverage versus where it is simply nice new business that we did not have or that they did not have.

Analyst: Thanks so much, and best of luck.

Jeffrey D. Lorenger: Thank you.

Operator: Your next question comes from the line of David Sutherland MacGregor with Longbow Research. Your line is open.

David Sutherland MacGregor: Thank you for taking my follow-up questions. I want to think about the second half of this year. It seems as though there is going to be some push-forward benefit against some fairly stiff compares from last year, and that will help you. I am thinking about the government shutdown in 2025, and you should be comping against that. That should be a source of benefit as well. Is there any way to dimension that for us?

Vincent Paul Berger: Yes, David. I do not know if we have specifically thought about it that way. If we think about how volume will play out, you are right—we will have some comps that, if I get into the fourth quarter, could see mid single-digit volume year-over-year versus just price in the third and fourth quarter. Whether it is through government, SMB, or large global/corporate accounts, we believe that sets us up for a strong back half and supports what we are saying with a relatively flat first half and mid single digits in the second half.

David Sutherland MacGregor: That is helpful. Thank you for that, VP. Secondly, it is still early, but to what extent, if at all, are you seeing any cannibalization between Steelcase and Allsteel?

Jeffrey D. Lorenger: Good question. We really have not seen that, David. Our premise going in—and it seems to have been playing out—is they both are in the contract space, but Steelcase plays with a certain type of customer and has strength in markets where we have maybe not been as strong. They are stronger with large corporate, big customers, global customers with large networks, and Allsteel and some of our contract brands are maybe a click down from that. We have not really seen cannibalization. I am not saying there is none out there on a project here or there, but on a macro basis, it is complementary, and that was the pre-deal premise and what we have seen so far.

David Sutherland MacGregor: Great. Good to hear. Thanks very much, and good luck.

Vincent Paul Berger: Thanks.

Operator: I will now turn the call back over to Jeffrey D. Lorenger for closing remarks.

Jeffrey D. Lorenger: Thank you for joining us today. We look forward to speaking to you again in July. We appreciate your time. Thanks so much.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.

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