HNI Corporation Q2 2026 Earnings Call

Good day. Thank you for standing by. Welcome to the HNI Corporation second quarter fiscal year 2026 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Matt McCall. Please go ahead. Good morning.

My name is Matt McCall. I am Vice President, Investor Relations and Corporate Development for HNI Corporation. Thank you for joining us to discuss our second quarter 2026 results. With me today are Jeff Lorenger, Chairman, President, and CEO, and VP Berger, Executive Vice President and CFO. Copies of our 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 risk. 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 Jeff Lorenger. Jeff? Good morning. Thank you for joining us.

Second quarter demonstrates the focus of our members, indicates an improving demand environment, and supports expectations of stronger 2026 earnings growth. Through focused cost management and the net benefits of price cost and productivity, we were able to deliver second quarter results that were in line with our expectations. Encouragingly, our internal leading indicators improved further in the quarter. The positive momentum of our strategies, both revenue and cost-focused, the benefits of our diversified revenue streams, the merits of our customer-first business model, and the integration of Steelcase are delivering significant shareholder value. We continue to expect a strong year in 2026, with a fifth straight year of double-digit earnings improvement and revenue growth in the low single digits in both segments. On today's call, I will break my comments into three sections. First, our quarterly results. Again, we delivered solid second quarter earnings with EPS in line with our expectations.

Second, our back half outlook. Our revenue backdrop strengthened in the second quarter, providing increased confidence in the full-year outlook. Third, our outlook beyond 2026. We have numerous sources of margin improvement and EPS visibility. We project double-digit EPS growth again next year. We have multiple years of elevated earnings growth visibility beyond 2027. Following my comments, VP will provide more details about the second quarter, our outlook, cash flow, and balance sheet. I will close with some additional commentary before we open the call to your questions. I will start with some highlights from the second quarter. We continued to effectively manage the middle of the income statement and were able to deliver solid second quarter results. Non-GAAP EPS was $1.27 and was up 14% year-over-year.

Versus the second quarter of 2025, the addition of Steelcase profit, price cost, including the net impact of tariffs, legacy network optimization savings, and productivity benefits combined to double operating profit on a year-over-year basis. Revenue was in line with our expectations in both segments, with Workplace up slightly and Building Products down slightly. Encouragingly, as we expected, second quarter orders strengthened. I will provide more color on the order patterns in a moment. In the legacy Workplace Furnishings businesses, second quarter net sales were up slightly year-over-year on an organic basis, consistent with commentary we provided last quarter. Growth was fueled by our businesses focused on small and medium-sized customers. Affirming industry backdrop became more apparent during the quarter.

In 2026, we expect stronger organic revenue growth in the back half and solid year-over-year margin expansion in legacy Workplace while we continue to invest to drive future growth. The integration of Steelcase is going well, and synergy capture and accretion are progressing as expected. A new leadership team is largely in place, and we expect the president to be on board in the second half. We continue to expect modest accretion in 2026 and now expect total synergies will reach at least $120 million when fully mature. In Residential Building Products, revenue decreased 1.6% versus the prior year period. This was consistent with our expectations communicated on the first quarter call. Revenue from the remodel retrofit business increased solidly but was more than offset by continued market-driven weakness in the new construction channel. In both markets, our members continued to deliver strong relative performance.

Second quarter segment operating margin expanded 470 basis points year-over-year, including net benefits of tariffs, reaching a strong 20.4%. Our unique operating model continues to deliver strong profit margins. Despite expectations of ongoing housing uncertainty, we remain encouraged about opportunities tied to the broader markets. We continue to invest to grow our operating model and revenue streams. In summary, the strength of our strategies and our ability to manage daily uncertainty through varying macroeconomic conditions, all while remaining focused on investing for the future, was evident in the second quarter results. That leads to my comments on our outlook for the second half of 2026. Our revenue backdrop strengthened in the second quarter, providing increased confidence for the remainder of the year.

In addition to improving organic revenue growth rates, the Steelcase acquisition and operational productivity gains are expected to continue driving strong results in the second half. From a segment perspective, beginning in our legacy workplace businesses, we expect volume growth to return in the third quarter, driving mid-to-high single-digit net sales growth in the second half. Our segment outlook is supported by external industry metrics and by internal pipeline data. Specifically, in addition to strengthening orders in the quarter, pre-order metrics all remain highly active, including project funnel, bid quotes, and design requests. For Steelcase, after a market soft patch to start the year, we saw pre-order activity and order momentum accelerate in late Q1 and continue in the second quarter. We expect second half revenue to increase solidly year-over-year. We project Steelcase will be modestly accretive in the second half and for the full year.

In Residential Building Products, our structural changes to organize around the customer, 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 profit perspective, we project both our legacy Workplace Furnishings and our Residential Building Products segments will solidly expand margins in 2026. Moving on to my third point, our outlook beyond 2026. We have multiple sources of margin improvement and EPS growth visibility. We project double-digit EPS growth again next year, driven primarily by expected synergies from Steelcase and legacy network optimization projects. Beyond 2027, we have numerous years of elevated earnings visibility driven by multiple factors. During the quarter, we continued to smartly manage costs across all our businesses as we continue to navigate ongoing geopolitical and macro dynamics.

Benefits associated with these cost management actions are in addition to the previously announced $30 million of legacy Workplace Furnishings network optimization savings and the synergies associated with the integration of Steelcase, which, as I stated earlier, are on track and now expected to be at least $120 million. The combination of our disciplined cost management, Steelcase synergies, and ongoing legacy network optimization projects continue to support our earnings visibility story. Of note, additional items may provide incremental benefits. For context, our current synergy projections are focused on the Steelcase Americas business only, and we are assuming no benefits from revenue synergies. In addition, our outlook for double-digit EPS growth next year does not rely on improved volume from current levels. Now I will turn the call over to VP. VP? Thanks, Jeff. I'll start with some additional comments about the second quarter.

GAAP diluted EPS for the second quarter was $0.70. On a non-GAAP basis, diluted EPS totaled $1.27, which was ahead of our internal expectations. The net tariff impact on operating margin in the quarter was about 150 basis points, and we expect approximately 40 basis points of benefit for the full year. From an EPS perspective, the net tariff benefit in the second quarter was approximately $0.25. Organic volume in the quarter was negatively impacted by geopolitical pressures to begin the year, especially in the Workplace Furnishings segment. However, the addition of Steelcase profit, price cost benefits, including the net impact of tariffs, expense control, and productivity savings offset the volume softness and continued investments in initiatives aiming to drive future growth. Total net sales in the quarter increased 121% overall.

From an organic standpoint, net sales were up slightly on a year-over-year basis. Moving to Q2 orders and backlog. In the Workplace Furnishings segment, organic orders in the second quarter increased 5% compared to the prior year period. Legacy order growth rates from small to medium-sized customers and from contract customers were comparable in the quarter. Legacy Workplace Furnishings backlog also ended the quarter 5% higher than the year ago period. Steelcase order growth was slightly better than legacy Workplace Furnishings trends. Over the most recent five-week period, the year-over-year segment order growth rate accelerated above the 5% average in the second quarter. Orders in the Residential Building Products segment were mostly unchanged compared to the second quarter of 2025. Solid remodel retrofit order growth essentially offset modest declines from the new construction channel. However, both segments continue to outperform the respective markets.

Over the most recent five-week period, segment orders grew at a low single-digit pace on a year-over-year basis. For the third quarter of 2026, we expect net sales in legacy Workplace to increase to a high single-digit rate year-over-year. Including Steelcase, total Workplace Furnishings net sales are expected to increase approximately 175%-180% versus the prior year period. In Residential Building Products, third quarter 2026 net sales are expected to be roughly unchanged versus same period in 2025. Non-GAAP diluted earnings per share in the third quarter of 2026 are expected to increase at a rate in the mid to high 20% range from the third quarter 2025 levels. Steelcase accretion, productivity savings, volume growth, and price costs are expected to fuel the EPS increase.

Our new outlook for 2026 full-year earnings reflects expectations of 20%-25% non-GAAP EPS growth from 2025 full-year of $3.46, with accelerating double-digit earnings growth in the second half of the year. As we look at the second half, we now expect non-GAAP diluted earnings per share in the third quarter to be approximately 15% above the fourth quarter. This is primarily tied to the expected timing of revenue and investments. As Jeff mentioned, we expect double-digit diluted non-GAAP EPS growth again next year, and we have multiple years of elevated earnings growth visibility beyond 2027. The combination of Steelcase synergies, cost management actions, and legacy Workplace network optimization initiatives are expected to yield a total cumulative savings exceeding $70 million in 2027 and more than $150 million when fully mature. A few additional items to assist you in your 2026 modeling.

Combined depreciation and amortization are expected to be approximately $170 million-$180 million, excluding purchase accounting impact of approximately $100 million. Net interest expense is expected to total about $80 million, and our tax rate should be approximately 25%-26%. Finally, from a cash flow and balance sheet perspective, our balance sheet is strong, and we remain committed to maintaining significant financial flexibility to fund ongoing business investments to drive growth and payment of our longstanding dividend. Free cash flow was used to reduce net debt levels by approximately $100 million during the quarter as we continue to decrease leverage following the Steelcase acquisition. Quarter-ending debt leverage was at 2.4 times, down from 2.5 times last quarter. We continue to expect leverage to move back to pre-Steelcase acquisition levels within 18-24 months of the closing of the deal in December of 2025.

Leverage is expected to trend lower as the year progresses. I will now turn the call back over to Jeff for some long-term thoughts and closing comments. Jeff? Thanks, VP. Our members continue to manage our businesses well, we delivered another solid quarter.

Order patterns showed noticeable improvement during the quarter as expected, especially in Workplace. As we look forward to the remainder of 2026, we expect year-over-year volume growth in Workplace Furnishings, while Building Products volume pressure is expected to moderate. More specifically, our updated outlook calls for accelerating revenue and operating profit growth in the Workplace Furnishings segment. This view is supported by both external macro and industry demand metrics, internal pre-order, order, and backlog data, and multiple cost and expense initiatives. In Residential Building Products, we anticipate revenue to be flat year-over-year in the second half, we expect both of our segments to solidly expand margins in 2026.

While we remain focused, conservative, and ready to adjust as required, our new outlook demonstrates our growing confidence in revenue growth, our ongoing visibility story, and our proven ability to manage through dynamic economic conditions. From a demand indicator perspective, the Workplace Furnishings SPAC pattern we have discussed the last few quarters is unchanged, we remain bullish about the segment's demand environment. Return to office continues to be a positive driver. Office leasing activity grew for the fourth straight quarter in Q2, with trailing four-quarter leasing activity now up 27% year-over-year. Net absorption of office space, which has historically been a good leading indicator of future industry demand, was positive for the fourth straight quarter, with more than 11 million square feet absorbed in Q2. This brings the trailing four-quarter total to nearly 31 million square feet absorbed, the highest level since 2019.

Finally, sublease activity has returned to pre-COVID levels, another indication of the improving health of the office market. While supply of new office space will remain a headwind, we see multiple cyclical drivers of growth outside of new construction. As I mentioned earlier, these encouraging industry drivers are consistent with recent order patterns and internal pre-order metrics in both Workplace, legacy Workplace, and Steelcase. Our funnel continues to expand with second quarter bid quotes up solidly year-over-year, the number of large dollar projects continues to increase. Customer visits, RFPs, and design requests were all strong during the second quarter. We are competing well, win rates are improving as market momentum continues to accelerate. 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.

As a result, we expect continued new construction weakness in 2026. However, new single-family permits surprised to the upside in June and were up 4% year-over-year, with each region either flat or up. Our 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. We also expect to continue to outperform the market in our R&R business. Importantly, we expect ongoing margin and cash flow consistency from the Residential Building Products segment. In conclusion, post the acquisition of Steelcase, we are a transformed and fundamentally stronger organization. The benefits of the Steelcase acquisition, the strength of our strategies, and our financial discipline are expected to continue to drive strong free cash flow and allow us to maintain a 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 members for their continued focus and commitment. Thank you again for joining us. We will now open the call to your questions.

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Reuben Garner of Benchmark. Your line is open. Thank you.

Good morning, everyone. Morning. The subtle tweak to the language on the Steelcase synergies, I think there was something similar several quarters after the Kimball acquisition.

Can you just talk about why the tweak and what you're seeing there so far in the integration process, and then I guess any potential upside to that figure as we move forward?

Sure, Reuben. I think that there's two parts to it. We went in with a target of $120 million that we've said we've been confident in. That was pure analytics. That was before we even got in and started working with the teams, and that was based on KI's history, as well as taking the Steelcase EBITDA business to the legacy targets. They were just over 8%, and we were driving over 13.5%. Our confidence was high. What's happened in the last seven months is we've put the integrated management office teams together. Their bottom-up project lists have started in SG&A, logistics, procurement, network optimization, and we now have a view of a list of projects that are larger than $120 million, which is very consistent to Kimball.

Now what we'll do, which is why you heard Jeff say, "At least," now what we'll do over the next 60 days is put project timelines on those and finalize our confidence level. With that, we'll come back to a new adjusted target. I think you called it well. It's similar to what we did with Kimball, I'd say we're on track and we're encouraged that the number's going to be higher than $120 million.

Okay, then a little help on the gross margin line. I think you guys, your accounting may be a little bit different than the way Steelcase accounted gross versus SG&A or cost of goods versus SG&A expenses. Can you just talk about, on a like-to-like basis, what gross margins have been doing and what you expect for the balance of the year kind of embedded in your guide?

Yeah. The way you would've looked at the Steelcase margin would not mirror against the legacy Workplace because of what's in there in freight and distribution. To answer your question on what to expect, on the Workplace side, we still have high confidence of 150 basis point increase this year from 10.5% to 12% before the tariff refund that happened. Those projects, Jeff talked about improving margins in both the businesses. Those projects are in place, we still have high confidence there. On the Residential side, on margins, we feel the same. There's a 90 basis point plan for incremental improvement this year, that's before the tariff refund.

if you look at actual Steelcase and you follow the P&L throughout the year, you'll see that it's now aligning with the way we did with Legacy, you'll start to see the benefits of the synergies. We will have synergies hit in the third and fourth quarter that will start to improve those margins, that ultimately, analytically, the $120 million, that will incrementally improve margins for Steelcase and overall Workplace each quarter for the next several years.

Okay, I'm going to sneak one more in. The mid-single digit order growth, the five-week comment about it accelerating, just to clarify, I don't know if that was the last five weeks of the quarter or if that was essentially the month of July. Either way, what mid-single digit kind of growth rate last quarter in orders your outlook is for high single digit revenue growth for the balance of the year in that segment? What gives you the confidence that that acceleration is on the come?

There's three parts to that, Reuben. Yeah, it's a good catch. There's three parts. First, backlog at 5% going into a quarter, order growth rates at 5% coming out of the quarter support it. The second thing is the order acceleration that happened after the quarter. You heard Jeff mention that orders accelerated. That was at a much higher percentage than 5%, specifically on the contract side of our business. That was a lot stronger, that supports the high single digits. The third thing is the weighted funnel. The mention of pre-order metrics, we can see what's out in front of us that's actually going to come in in the quarter, we have a good feel because our customers order based on our lead times. Those three things give us confidence in the high single digits.

Third quarter. For the third quarter.

Great. Thank you guys. Congrats on the results and good luck going forward.

Thanks, Reuben. Thank you. Our next question comes from Greg Burns of Sidoti.

Your line is open. Greg, your line is open. We'll go to our next question. Our next question comes from Steven Ramsey of Thompson Research Group. Your line is open. Hi, good morning.

Wanted to continue the thoughts on Workplace strength. You talked about win rates improving. Maybe you can put into context the drivers of better win rates, dissect where it's coming from, if it's legacy and/or Steelcase, and if the marketplace around you is being rational as we see the backdrop improve.

Yeah, it's a good question. I think, Steven, it's kind of across the board, both Legacy and Steelcase. Teams are competing well. It's a lot of project business, small, medium, and large, kind of across the board by business. There's not a standout. It's kind of universal, and I think it kind of goes to these macro drivers, I believe, that are happening, and with the leasing activity and the absorption, and the dealer surveys are trending positive. That's the bottom line. The marketplace seems to be rational at this point. I know we've all been through our periods, if we've been in this space long enough. Right now, there's nothing that pops as being unusual relative to how the market's behaving or how our customers and our sales teams are addressing those behaviors.

Okay. That's helpful. On the resi side of things, want to make sure I understand this. The pricing-driven revenue growth in the second half, is there an implication that volumes are negative in the second half? Maybe you can talk to mix in that picture.

Yeah, Steven, the volume in the second half in the residential is low single digits negative, so there's a little bit of pressure. The price is going to offset that to make it relatively flattish for the second half or low single digits. The point is, even in a challenging housing market, we're going to hold revenue flat.

Yeah, Steven, I think I would add, and I kind of made the comment, we believe we're outperforming the markets we're in, given kind of the macro and the cyclical and the headwinds that we are seeing. I think we're pretty happy with that performance relative to our specific investments. We've done a lot with focusing on builders specifically, the service model that we've continued to build out and work on our RDC and our service model and our lean process with the vertical integration. All that is being ramped with some more new product development, because like I said, we're bullish on this space long term. We're taking this time to make investments when the market does turn. In the meantime, kind of outperform while the markets are flattish or slightly down.

Excellent. Thank you both. Thank you.

Thank you. Our next question comes from Greg Burns of Sidoti.

Greg, your line is open.

Hi, can you hear me now?

Can hear you now. We can, Greg.

Okay. All right, great. A lot of the focus on the Steelcase acquisition has been on the cost side of the equation. I just maybe wanted to get your thoughts on the longer term, maybe revenue synergy opportunities, any early indications of how the brands are working together across your dealer network, and maybe any plans on putting specific programs in place to maybe accelerate any of that activity that you might be seeing in the network?

Yeah, it's a great question, Greg. I think that, as you well know, none of that was programmed in to our thinking going in, we're kind of watching that. I would tell you some of that is occurring naturally in the ecosystem. There was a lot of excitement at Design Days this year. A lot of customers and dealers visiting all the spaces, going to the HON space, going to the Kimball space, what have you. I think that's been really positive. I think the teams are excited about the opportunities. We have focused a lot, the sales force. We're going to continue to invest in selling. That's a critical element as we build this potential revenue synergy out. I will say we haven't forced it at this point because, this first year in these kind of transactions, we're very pleased with where we're at.

There's a lot of moving parts, we kind of want to get through the transition year. You are right. There are opportunities that we have kind of studied relative to how we're seeing the natural ecosystem respond and where we could program in some benefits in order to help that to happen. The other thing I've said in the past, too, is the whole price mixing and blending of the floor plate in a lot of these opportunities. That's the way the market is kind of developing over time. This all goes to how we can configure the network in order to take advantage of not only our assets, but to meet the market where the market is headed anyway.

All right, great. Thank you.

Thank you. Our next question comes from David MacGregor of Longbow Research. Your line is open. Yes.

Good morning, congratulations on the progress.

Thanks. Yeah. I guess on your third quarter outlook, can you just talk in greater detail about what you're seeing in the presale indicators?

Obviously, it's giving you a lot of confidence in the outlook.

Yeah. David, I think us sharing more about pre-order activity and pre-sale indicators, we're seeing all of them increase. We're seeing RFPs increase. A little bit about the question earlier about win rate. Some of the investments that we made over the last few years when volume wasn't helped in the front, and more salespeople on the street allowed us to sophisticate some of these systems to see it. You think of not just win rates, the amount of bids and size of bids, all of those are what's given us confidence to lean into the third quarter. Then I think the last is the point on the weighted funnel. We can actually see in working with our clients that this pre-order metric of won but not ordered is going to get ordered.

I think as this evolves, we'll just get more confidence to how that weighted funnel plays inside the quarter.

Yep. That's obviously our internal.

Certainly, Jeff mentioned a lot of the macro items, specifically absorption, leasing activities. All of those are green, and it's not accelerating as well. Market health plus our sales management systems give us confidence there.

Got it. The third quarter adjusted EPS guidance of up mid to high 20s, how much of that is the improving demand fundamentals versus how much is acceleration in cost synergies execution versus maybe how much is just pushed forward from the January, February pause in purchase orders?

Yeah. A lot of it, if I talk dollars at the highest level, David, the Steelcase profit is going to drive a lot of it. Our productivity is increasing. Everything we just talked about on volume, we're back to volume growth. We haven't talked about that in a few quarters, and that's obviously a significant driver. Actually the one that we're probably most excited about because that's the better indication of what the market's doing and it's getting momentum.

Right. Then you noted the double-digit EPS growth you expect in 2027. How much of that is kind of the strong pattern of growth you're seeing in new orders versus Steelcase cost synergies?

Very minimal. Yeah, minimal, David. We've been conservative on that approach. Our visibility story for 2027 of the $70 million is Steelcase and the network optimization. Those numbers have been consistent. Those projects are in place, and we're building them. Growth on top of that is not in the economics, and certainly, that would be upside.

I just want to be clear, VP, you've got synergies in there, obviously. You just mentioned that. You probably have some pricing in there as well, price cost, but you just don't have any volume there. I just want to make sure I'm clear on that.

Price cost is assumed neutral, and there's minimal volume in there, David. That would be upside. Okay.

There's quite a bit of upside here if the strength you're seeing in the market right now should continue.

Yes. Okay. Can you just talk about how the mix of business you're seeing is changing with the Steelcase acquisition?

Given they have typically played in a space where, I guess, the project sizes are typically larger than what the legacy HNI was used to seeing. What are you learning from that in terms of how you reinvest back in the business going forward?

Yeah. It's a good question. This first year, the year of, I would say, transition, there's a lot of moving parts. Their exposure, obviously, is to larger opportunities than we typically have been operating, kind of the standard deviation. It makes it a little lumpier, I would say. We're kind of getting our arms around predictability. That's kind of why we're talking a lot about the funnel and the activities, because that's kind of a precursor. The pace of some of these from won to order and kind of in the funnel is we're working with the Steelcase team to make sure we can predict that more accurately. That's the beauty of this, though. It's exposure to pieces of the market we didn't have before. Steelcase does a great job. Their sales team does a great job.

They're really connected in with their customer base. This has gone well. I would say the team's responded well. That we will probably look to reinvest more in the NPD. As you recall, last quarter, we talked about one of the surprises we had was this, they had a BT project, and we kind of came in and made a fairly good, deep assessment that we needed to stop that. We thought there was another way to do that, was kind of holding back some other areas of the business. The team's responded well. We're diverting those resources and some of this into actions in product development, supporting the sales force, all to kind of what I call win at the point of attack in the market.

I think we get through that, and we've got that kind of re-triggered going into the back half now. That's, you really like where we're positioned as we look out into 2027 with those moves.

Yeah, you talk about the investment. One of the things that we picked up in our dealer checks this quarter was just a lot of dealers investing in their showrooms right now. I guess we should interpret that as an indication of confidence.

Yeah, I think so. I think the dealers are bullish. We're spending a lot of time there, and they're investing, we're investing. That's the beauty. I think that's what it's going to take to win the race long term. That, again, goes to the transaction in general. Look, it's only seven months in, but couldn't be more pleased with how everyone's responded relative to that, kind of the Steelcase ecosystem, super excited. People have been great. We're hitting at the right time with some of the macro drivers.

I guess just, you were referencing earlier a little bit about NeoCon this year. Just what did you take away from the NeoCon experience in terms of the commercial synergy potential?

I took away that there's a lot of opportunity. It's a get-to-know-you. It's a exploration. That's why some of this will happen naturally. There's early adopters, there's other people that are comfortable with where they're at. You got to kind of look at the whole network. The bottom line takeaway is there's a lot of opportunity as our businesses cover the entire floor plate, like we've said. The mixing and matching that's potentially available to some of our dealer partners is starting to be recognized. It's early days, but it's starting to be recognized, and all it takes is one or two experiences to win a job. You also got to understand, you just don't snap your fingers. I mean, we have sales forces. We have people getting to know each other.

Some of this is just natural matriculation of the system, at the right time, we can then, I got the question earlier, you can then kind of program in some of that. You want to make sure you do that when people are ready and understand the program.

Right. Do you think you're making progress with the international Steelcase business and how you can better sort of leverage that asset?

The international, it's early days there. I've got more visibility. I did a trip over there's opportunities to uncover there, the fresh eyes. Look, I mean, the international piece is, there's two segments for us. We got the EMEA and the APAC. Those even operate a little differently. Yeah, there clearly is opportunities there, to configure that network to maybe even be more potent than it is. They have nice coverage. EMEA, obviously, they got some headwinds with the local economics, and the war impact, that too shall pass. We got good teams over there and people that are eager to contribute. That's all you can ask for in the early days.

Great. Last question from me. You mentioned the Steelcase hiring of a president in the second half. I guess I'm just curious, how does that second half hire impact the synergies cadence? Do we see an acceleration shortly thereafter, or how are you thinking about that?

I don't think so, David. I think we've got, as VP mentioned and we mentioned, we got the IMO structure. We've pretty much tipped that up and it's operating without a president. I think the president will spend more time in the market with dealers, with the sales force, winning business and getting to know the ecosystem well, because we kind of have the IMO kind of locked down. They'll be involved, but we want to kind of focus on the front and focus on selling to start with.

Got it. Thanks very much.

Appreciate it. Thank you. This concludes our question and answer session.

I'd like to turn it back to Mr. Loranger for closing remarks.

Well, great. Thanks for taking the time today. I know it's always a busy time of year, so I really appreciate everybody joining us for the summer call, so to speak. Thanks so much. This concludes today's conference call.

Thank you for participating, and you may now disconnect.