Ladies and gentlemen, thank you for standing by and welcome to the HNI Corporation fourth quarter and year end results conference call. (Operator Instructions) I would now like to turn the conference over to our host, Mr. Kelly McGriff. Please go ahead.

Good morning and thank you for joining us today for the HNI Corporation conference call to discuss fourth quarter 2009 results, which were announced yesterday after the market closed. My name is Kelly McGriff, Treasurer and Vice President for HNI Corporation. If you have not received a copy of the financial news release, please call 563-272-7927 and we will send it to you. The release is also available at our website, www.hnicorp.com. We posted a presentation intended to accompany this call to our website. The presentation contains details of our financial performance including the non-GAAP to GAAP reconciliation. It can be found by accessing the webcast link under the Investor Information section of our website. We encourage you to review this presentation. Joining me on the line today from HNI Corporation are Kurt Tjaden, Vice President and Chief Financial Officer, and Stan Askren, Chairman, President and CEO. Stan and Kurt will review the results and then open the call for questions. Before we begin, please be advised that statements made by the corporation during this call that are not strictly historical facts are forward-looking statements. Forward-looking statements are subject to known and unknown risks. Actual results could differ materially from expected results. Additional information concerning factors that could affect actual results can be found in the conference call presentation posted to the HNI Corporation’s website. The Corporation assumes no obligation to update any forward-looking statements made during this call. I now have the pleasure of turning the call over to Stan Askren. Stan?

Thank you, Kelly. Good morning everyone. I’ll share a brief assessment of the fourth quarter and then turn the call over to Kurt, our Vice President and Chief Financial Officer, to review some of the specific financial details. Kurt and I will shuffle the comments back and forth here. He’ll provide more of the details, I’ll provide more of the outlook. And then Deanne will come back and open it up for your questions. Overall we had a solid quarter given the difficult market conditions. We continued to reset costs and fiercely manage cash, which allowed us to modestly exceed fourth quarter expectations. We improved non-GAAP operating profit margins in our Office Furniture segment over the prior year period and drove a sequential increase in our Hearth Business profitability. We continued to improve our financial flexibility and strengthen our balance sheet. We reduced debt $122 million during the year and ended with a cash balance of close to $90 million. Overall demand remained weak across our major channels with no significant change other than fourth quarter seasonality. Day-to-day order activity remained at subdued levels throughout our Office Furniture businesses, driven by the negative employment and negative small business confidence. Sales in the supplies driven channel of our Office Furniture business declined 37% and the remaining Office Furniture business was down 35%. In our Hearth Business, remodel retrofit sales including alternative fuel products were down 35%. Lower energy prices and a negative retail environment continue to pressure this channel. The new construction channel of our Hearth Business continues to be challenging. Sales were down 26% due to the depressed housing market. Demand remains at historically low levels, but we are encouraged by some improving market trends. Our operating results reflect our cost reset actions, continued investments in selling, marketing and product initiatives, and our nimble split and focus business model. We made tremendous progress throughout the year despite the challenging market environment. We ended the year a much stronger company, and I’d like to thank our members for their hard work and dedication during this very challenging time. I’ll come back and provide some more comments here later on the outlook, but now I’ll turn the call over to Kurt.

Thank you, Stan. For the fourth quarter 2009 consolidated net sales decreased 35.2% to $414 million. Sales for the Office Furniture segment decreased 36% to $328 million, which was driven by substantial weakness in both the supply driven and contract channels. Net sales for the Hearth Products segment decreased 31.9% to $85 million, which was driven by significant declines in both the new construction and remodel retrofit channels. Consolidated gross margins, which included restructuring and transition charges, were 36.3% compared to 33% in the prior year quarter. This 3.3 percentage point improvement was mainly due to cost reduction initiatives and lower material costs. Total selling and administrative expenses, including restructuring and impairment charges, decreased $32 million or 16.5% due to cost control initiatives, lower volume related costs and improved distribution efficiencies. These were offset by the increased restructuring and impairment charges and transition costs. Freight and distribution expense, which is included in SGA, totaled 9.1% of sales during the fourth quarter. This compares to 9.6% during the same period last year, and the decrease is primarily due to continued distribution efficiency improvements. Fourth quarter 2009 included $31.6 million of restructuring and impairment charges and transition costs, of which $2.2 million were included in cost of sales. These include goodwill and intangible pick impairment charges of $25 million, which were related to various Office Furniture reporting units; $2.8 million associated with the shutdown and consolidation of Office Furniture facilities; and $3.8 million related to the restructuring of Hearth operations. For fiscal 2009 cash flow from operations was $193 million compared to $174 million in the prior year. This increase was driven by strong working capital management, which was offset by lower earnings. That wraps up the financial comments. Now I’ll turn the call back over to Stan.

So if we look forward it’s a similar story to what we’ve communicated in the last call. The economic outlook remains uncertain, which greatly reduces our visibility and the ability to forecast. We anticipate volatility and low levels of demand will continue across the businesses; however, the rate of decline has lessened. We expect the Office Furniture segment to remain challenged by high unemployment and lack of small business confidence, and we anticipate day-to-day business to remain at low levels and competitive pricing pressure to continue. Although we are seeing signs of improvement in our Hearth business, we expect low levels of new housing starts and consumer spending to continue to negatively impact demand. So consistent with our actions since the beginning of this downturn we’ll continue to reset cost structure, we’ll continue to invest in new products and selling initiatives, and we’ll continue to improve operations. Back over to you, Kurt.

I’d like to reinforce our lack of visibility given the volatile and uncertain economic conditions. That said, what I’m about to cover reflects our best view at this time. For the first quarter 2010 we anticipate overall sales to be down 8 to 14%. Office Furniture sales are expected to decline 9 to 14%, driven by volume decline in all channels and decreased price realization due to higher discounting. Hearth sales are anticipated to decline 6 to 11%. Gross profit margin is expected to increase to approximately 1.1 to 1.7 percentage points versus the prior year GAAP results. This increase is driven by lower input costs and cost reduction initiatives which were implemented in 2009, offset partially by the lower volume and price realization; and $1.3 million of transition costs related to the shutdown of two Office Furniture facilities. Excluding restructuring and transition charges, SG&A as a percentage of sales is expected to increase 0.5 to 1.5 percentage points versus first quarter 2009 when it was 33.6%. We anticipate SG&A related restructuring and transition costs to be approximately $800,000 in the first quarter. And these charges relate to the shutdown of an Office Furniture facility. Net interest expense is projected to be $2.7 million and the effective tax rate is projected to be approximately 37% during the first quarter. For the year, we are expecting capital expenditures to be approximately $25 to $35 million and this will primarily be focused on new products. We project depreciation and amortization to be approximately $60 million for the year. So based on these projections, we are expecting a loss in the first quarter. I’d like to remind everyone that our first quarter has historically been our lowest quarter for revenue and profit. With that said, we do expect to be more profitable in 2010 than we were in fiscal year 2009. That summarizes our outlook. I’ll now turn the call back over to Stan for closing comments.

Well, I’ll just summarize here. Markets in the businesses continue to be challenging. Even so, I’m more optimistic about the future than ever. We have a proven track record in navigating challenging market conditions. We’ll continue to strengthen our business by investing in long-term growth initiatives, resetting cost structure and fiercely managing cash. Our business is financially strong and well positioned for future growth and we believe we’re taking the right actions to create long-term shareholder value. So with those comments complete, I’ll open it up for your question.

(Operator Instructions) Your first question comes from Budd Bugatch - Raymond James.

Just kind of refresh where we are on the cost resets physically. You’ve got a couple of Office Furniture facilities? Kind of go back down the list of what we have left in Office Furniture and where we are and what’s likely to persist after the first quarter.

I’ll start here and then I’ll turn it over to Kurt but I mean we continue to look at our overall structural costs. You know certainly the market has shifted dramatically and so we have everything on the table and continue to think through what’s the best sort of manufacturing logistics configuration going forward. And so as you talk about what’s in the future, we’ll continue to do what we’ve done in the past, which is take that structural cost out that we think is available. We do think there’s more opportunity. I’ll let Kurt sort of pick up where we’re at in that process.

Yes, and as a reminder, Budd, you know we took out three Office Furniture facilities last year, LA Southgate, Owensboro and Louisburg. What you see in the first quarter of 2010 is kind of the ending tale of cost related at Owensboro and Louisburg. And that’s about $2.2 million of restructuring costs in the quarter for those two facilities.

That’s between the accelerated depreciation and transition costs and the SG&A impact?

Absolutely.

Any other restructuring included in that? The SG&A portion is $800,000, the cost of goods sold portion is $1.3 million?

Correct.

And what about beyond that? I know you may not have announced it but how many facilities are left?

Yes, Budd, we’re going to be consistent with what we’ve done in the past which is we don’t pre-announce that we’ll, as that kind of comes online as we take those actions, we’ll lay out what the cost is and what the savings is going forward.

And Kurt will there be any lingering costs of the Owensboro and Louisburg facilities? Do you have ongoing maintenance that have to get called out?

No, nothing significant you’d expect to see called out, Budd.

So this is the last of it for at least these actions that have been taken?

Yes. There may be some minor costs in the second quarter but again I wouldn’t expect anything significant.

And nothing in Hearth right now, Stan?

No. I mean Hearth, Kurt didn’t mention it but we did take some action there around consolidating some of our distribution centers and adjusting the Mt. Pleasant facility. But nothing else to announce there at this point.

So now when we’re looking at this, how many Office Furniture facilities are left? What’s the census or the roster of that?

You know we don’t have that right here readily available but we’ve got a couple of main campuses now. We have a main campus in Cedartown, Georgia. We have a main campus in Muscatine, Iowa and then we have some feeder operations, a couple of plants into the HON Company. We have a significant Gunlocke facility and a significant Paoli facility and then we have the HBF facility in Office Furniture. Hearth has plants in Halifax, Pennsylvania; in Colville, Washington; in Mt. Pleasant, Iowa and in Lake City. And then we have a Maxon plant in Salisbury, North Carolina.

How are we looking at revenues? Just turning to that. You said you’re seeing nothing in Office that gives you any hope. It’s really employment related. How about between supplies you’ve driven and specified?

Well, let me clarify. I mean, saying there’s no hope is not where I want to leave the message at all.

Okay, good.

We do see the descent arresting, I guess. We see the descent flattening so we’re catching up year-over-year so last year first quarter was down 25 to 30%, something like that. You know this year we’re saying first quarter’s going to be down 8 to 14%. And I think as that goes forward that’s going to continue to get better. But you know, certainly until the economy shows some increased life, until we see small business confidence pick up and we see the consumer come back online and we see employment come back online, we’re not going to see any significant uptick in Office Furniture. I mean, we are driven by the same economics that everybody reads in the newspaper, business confidence and employment, really investing in the future.

And it looks like both sides of it performed about the same, down mid 30’s or 35 and 37. Any change in that during the quarter? Was there any movement significant or notable?

Nothing to call out, Budd.

And you were down more than the industry was down in the quarter. Industry ended at down about for the year about 30% and for December actually a little bit better in terms of orders.

Yes. Let me remind you on that point A, you know we’re much more tied to small business and BIFMA tends to be more heavily weighted on sort of the contract project segment, number one. Number two, our transaction business has significant inventory held by the channel partners and so last year we saw significant destocking of those individuals, which would account for we believe that difference. And so we feel good about our share. We feel good about our market position in the markets that we compete in.

But even in the non-supplies driven channel you were down more than the industry.

Yes, and again you come back and if you really break out those other guys and what’s kind of core Office Furniture versus fabric and accessories and those sorts of things, you know, how much exposure the other guys have in healthcare, how much is acquisitions, all that. I think if you kind of decouple all of that we feel good about our position in the contract segment or the non-transaction segment as well.

Last area for me is kind of costs. Any notable movement in costs?

Nothing significant, Budd. We’re not seeing heavy duty inflation pressure at this point.

And we’ve seen steel go up in the last six months, even though its flat year-over-year, and you know there was an article in this morning’s Journal about more steel coming. I’m not sure that that’s not just saber rattling but time will tell on that. You buy I think through distributors, if I remember right.

Budd, we buy direct from the mills more than through service centers. You know typically it’s in DAX and so there’s a lag effect to it and yes, I mean, you know often is the case as the steel industry there’ll be things in the press that really don’t hit the street and so we’ll just have to wait and see. It doesn’t feel like there’s any near term pressure in that area.

And energy giving you any problem or any issue there?

No. You know, energy for the year on year Budd was about flat, so we got a little bit of pressure on diesel fuel but we’re offsetting that with ongoing network efficiency improvement. So for the quarter, we’d expect to see about $7 million of material input cost favorability year on year.

On the tax rate, is it 37 for the year as well as for the quarter?

Yes, that’s a fair assumption.

Your next question comes from Josh Chan - Robert W. Baird.

On the pricing front, could you quantify how much benefit you got from kind of carrying through the price increase that you had in the prior year?

Yes, the fourth quarter, Josh, it was only about $3 million. We anniversaried a lot of our price increase at the end of Q3 so that benefit dropped significantly.

And then is there a way to kind of also quantify the impact of the competitive pricing environment that you’re facing in the quarter? I just want to get a sense of the degree of competitiveness out there.

You know certainly for the first quarter, we’re seeing pricing but it’s really more of a mix impact and Stan talked about that day-to-day business versus our project business, which is more competitive. So what we’re seeing certainly expecting going into the first quarter, because of that mix shift is some impact on our pricing. And that number’s somewhere around $7 million number.

And then jumping onto the Hearth sales forecast, I was a little surprised by it being down that much. You look at some of the housing indicators they’re starting to turn positive. Could you explain that a little bit?

Well it takes a while for all of that to work through, right? So permits get logged and then houses get started and then fireplace columns. So there is a lag. It also is a significant sort of improvement, it’s a de-acceleration of a negative rate, I guess, too, Josh. So it takes a while once the ship starts to turn for it to kind of come to bear in the Hearth business. I think our numbers reflect that.

Your next question comes from Matthew McCall - BB&T Capital Markets. Matthew McCall - BB&T Capital Markets: First, Kurt, I always like to clarify and make sure I’m looking at the right numbers, so when we’re looking at the guidance and you’re giving the guidance year-over-year give me the baseline we should be using from a gross margin perspective. I’ve got 30.7% in my model after restructuring last year. Is that correct?

That’s correct. Matthew McCall - BB&T Capital Markets: And the SG&A would be 33.6%?

Correct. Matthew McCall - BB&T Capital Markets: I think you referenced the destocking last year and said that accounted for some of the delta between you and the industry or can you quantify what you think that destocking pressure was, either in percent range or a dollar range?

Yes. We think it’s in the $40 to $50 million range for the year, Matt. We talked about $30 in the first half of the year and saw the rest of that through the second half of ’09. About $10 million in the fourth quarter. Matthew McCall - BB&T Capital Markets: So there was $10 more and has that trend continued in Q1 or have we kind of leveled out?

Well, we don’t really know quite yet in Q1 because it’s early. My guess is there’s been some. It should start to level out once the industry descent declines start to flatten out we should see less of the destocking. Matthew McCall - BB&T Capital Markets: You talked a lot about the day-to-day business being strong. Can you speak to the project trends, what the pipeline looks like? And also what the trends in the government sector specifically are looking like and have looked like this year?

Day-to-day, Matt, is weak so day-to-day is what’s really been the most challenging. And again that has to do with really sort of small business transactions. It’s the stuff that’s the easiest to turn on. The project business is still active. It’s at a lower rate, but there’s still big projects that are out there that our companies are competing to win and we anticipate that will continue. Part of it depends on what segment of the economy they’re operating in, some of that is just longer cycle sort of stuff driven by consolidation and other factors. I’m sorry, Matt, government. You know government was good for us last year, federal government in particular. We anticipate that again is going to be good this coming year. I think the question is going to be is how do state and local sort of handle the rather widespread budget crisis that the states are looking at. And I would anticipate that some of that is going to leak over to Office Furniture. How much yet to be determined. Matthew McCall - BB&T Capital Markets: And back to the day-to-day comments, Stan, when we’re talking about the breakdown of your business and I understand the supplies and contract mix, but when you talk about day-to-day specifically, what percent of your business is quote day-to-day?

We don’t break that out, Matt. Sorry. Matthew McCall - BB&T Capital Markets: What was the answer, Kurt, on the expectations of pricing pressures, that you’re going to have $7 million favorable from costs, but is that going to be offset by any discounting, so you have a net 4? Or what’s the expectation for Q1?

We have about $7 million of input favorability which is going to be fully offset by $7 million of pricing. Matthew McCall - BB&T Capital Markets: And then the outlook for the year, right now you carry the current pricing environment through. What does that look like net of your pricing expectations?

That’s anybody’s guess, Matt, at this point I guess. We would say that we would continue. The industry’s had a good track record of being able to offset material cost with price. And we would anticipate that would be a similar situation, but we’re really not clear at this point of what pricing’s going to be and what material costs are going to be for the year.

Your next question comes from Todd A. Schwartzman - Sidoti & Company, LLC. Todd A. Schwartzman - Sidoti & Company, LLC: On the gross margin guidance seems to imply sequentially from Q4 about a 4 to 5 percentage point haircut. You know if I’m doing the math correctly, how much of that, is that all volume related or what are the other puts and takes there?

Great question, Todd. We still think that kind of $0.30 to $0.40 range for de-leverage is the right guidance. You’re certainly going to see that quarter-to-quarter variability. So on top of what we’d say our normal de-leverage, what you’ve got is that pricing that Stan just talked about with Matt, about $7 million this trip and by mix and timing on projects. And then, you know, quarter-to-quarter we’re going to have some other small cost adjustments, so you think about fourth quarter 2009, we had some year end accounting and accrual adjustments that were favorable. And we’ll have some costs that are going to hit in the first quarter, but on the end of it it’s primarily volume driven. Todd A. Schwartzman - Sidoti & Company, LLC: And the net loss that you’re guiding to, what does that include in terms of restructuring charges?

That includes the $2.2 million that we talked about for Owensboro and Louisburg. Todd A. Schwartzman - Sidoti & Company, LLC: And nothing else?

Nothing else. Todd A. Schwartzman - Sidoti & Company, LLC: You mentioned new products a couple of times in the prepared remarks. Is there anything you’d care to highlight for the year ahead?

No, I don’t think so, Todd, not specifically. Each of the operating companies, and you know each of the operating companies has their own product development issues to meet each of their segments, all of them are working on a record number of new products. So we continue to invest in significant levels in new product and in selling initiatives and in marketing initiatives. Todd A. Schwartzman - Sidoti & Company, LLC: Will we hear anymore details before June?

You won’t hear any until they’re launched, which is [inaudible] typically. Todd A. Schwartzman - Sidoti & Company, LLC: On the Hearth side, what contributed to new construction being down for Q4 less than remodel-retrofit? Was it a small base? Was it the prior year comps or some combination there?

Well I think we saw new construction start to pick up a bit. It declined less than it had been declining and so as you see in the new construction data that permits and housing starts, etc., started to reach kind of a bottom and started to climb out a bit. Todd A. Schwartzman - Sidoti & Company, LLC: Was that driven mostly by the lower end builders?

Certainly if you watch what’s going on in new construction, the entry level housing is a higher mix now than the high end housing. Todd A. Schwartzman - Sidoti & Company, LLC: For full year 2010, what should we expect in the way of free cash flow?

You know you should expect to see the company continue to generate strong key free cash flow. Certainly, Todd, it’s not going to be at the levels we had last year given the significant working capital improvements, but I would expect something in the $80 to $100 million range as a reasonable estimate.

Your next question comes from Mark Rupe - Longbow Research.

Did you comment by chance on the incremental cost reduction benefit that you’ll see in 2010 versus 2009? I know there was a number out there on some prior calls but I’m not sure if you had mentioned that on this one as well.

Great question. We had not. If you think of cost reset, we were on a run rate versus 2008 of about $150 million of structural cost takeout, some which we recognized, approximately $120 million in 2009. So there’s an incremental $30 that we should see roll through in 2010. $20 to $25 of that, Mark, you should expect to see in the first quarter and the rest of that rolling in Q2, Q3.

And then on the freight and distribution line, how much more opportunity is there to manage that down?

Well, one of the things that we are always working on constantly is really our network efficiency. So do we have distribution in the right spot? We always are working on our liens and working on our negotiation with carriers. So we continue to believe that there’s opportunity under sort of the sphere of continuous improvement to improve those efficiencies.

On kind of the makeup of the downturn on the Office Furniture side has kind of flowed through, has there been any kind of different changes or any changes in the way it’s flowed on kind of the price segmentation relative to you guys, relative to maybe the past downturn?

I don’t think there’s anything that’s worthy of comment I guess, Mark.

Your next question comes from Budd Bugatch - Raymond James.

Just making sure I understand, when we’re comparing against last year’s restructuring we had no restructuring in cost of goods sold based on our model for last year. That is correct, Kurt?

That’s correct, Budd.

And just lastly, I guess if you think about it now we’ve got all these cost resets and we’re done and as studies state if we get past the second and third quarter when you have the last of that year-over-year cost takeout, can you comment on kind of a contribution margin going forward, looking down a little bit longer term? What do we look like segment wise contribution margins?

You know I think, Budd, overall we’d say that $0.30 to $0.40 on contribution leverage or de-leverage is still the right guidance.

So 30 to 40% of each incremental sales dollar?

Correct.

And when is it 30 and when is it 40? Just making sure I know.

Great question. It’s going to depend on mix, on channel, but that’s why you’ll hear us consistently use those numbers. But that’s the range you ought to use.

We are not done with our cost restructure reset as well. I think I want to be clear that we believe there’s still opportunity for us to take costs out of this business.

And which segment more than the other? We’ve got four facilities left in Hearth and more.

You know what I think it is? In Hearth and in Office Furniture as well. I mean, we’ve got a lot going on, a lot working. And as the market continues to develop, we find new opportunities.

And I hear that phrase from you being emphasized. That means that those announcements are sooner than later, if I read you properly.

I wouldn’t try and read me either way on that.

And we have no more questions in queue. Please continue.

Okay. Well, I want to thank everybody for joining us on this call. We appreciate your interest in HNI. We continue to charge forward with thinking about how do we create long term shareholder value. So on behalf of everybody, thank you very much.

Thank you. Ladies and gentlemen, this conference will be available for replay today after 12:00 PM Central Time through February 7th at midnight. You may access the AT&T Teleconference replay system at any time by dialing 1-800-475-6701 and entering the access code 142150. Those numbers once again are 1-800-475-6701, access code 142150. That does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference service. You may now disconnect.