18.12.2003: Meldung: Herman Miller announces financial results

Herman Miller, Inc., today announced results for the second quarter ended November 29, 2003. Net earnings were $9.1 million, or $.12 per share. The results included approximately $4.4 million in pre-tax restructuring charges, or $.04 per share net of tax, related to previously announced actions. Orders and ending backlog showed strong growth over the previous quarter, with orders up 10.5 per cent and ending backlog up 14.6 per cent. Sales for the quarter were $330.3 million, down 7.6 per cent from the year-ago period, but up 1.8 per cent sequentially. Operating expenses continued their year-over-year improvement as a result of the major restructuring efforts and also included a $5.2 million benefit resulting from the favorable outcome of a lawsuit that had been previously reserved. The ending cash balance was $207.3 million.

Financial Highlights (Dollars in million, except per share data) Three Months Ended Six Months Ended 11/29/03 11/30/02 Percent 11/29/03 11/30/02 Percent Change Change Net Sales $330.3 $357.3 (7.6)% $654.8 $704.2 (7.0)% Gross Margin 102.0 113.7 (10.3)% 203.6 222.9 (8.7)% Operating Expenses 80.8 92.8 (12.9)% 166.3 183.4 (9.3)% Restructuring Expenses 4.4 - N/A 8.3 0.3 2666.7% Operating Earnings 16.8 20.9 (19.6)% 29.0 39.2 (26.0)% Net Earnings 9.1 11.8 (22.9)% 15.2 21.6 (29.6)% Earnings per share - diluted 0.12 0.16 (25.0)% 0.21 0.29 (27.6)% Orders 357.8 352.2 1.6% 681.6 698.0 (2.3)% Backlog 215.7 194.4 11.0%

The company""s consolidated sales for the quarter were $330.3 million, down 7.6% from the year ago period but representing the third consecutive quarter of sequential sales growth. Orders for the quarter were $357.8 million, increasing 1.6% from the prior year and up 10.5% from the previous quarter. Ending backlog was $215.7 million, up $21.3 million or 11.0% from the prior year, and $27.5 million or 14.6% from the previous quarter. Those results represent the highest order levels in the past six quarters, and the highest backlog recorded in the past nine quarters.

Beth Nickels, Chief Financial Officer, stated, "We are optimistic about our business outlook given the increased rate of orders during the quarter and our stronger ending backlog position. We discussed the pick up in our weekly order rate at the beginning of the quarter and we""re pleased to report it continued throughout the entire period. We knew we would be reporting a year- over-year decline in sales, given the false start in the economic recovery we experienced last year, but the good news is that the momentum gained earlier in the year has continued through this quarter."

Gross margin was 30.9% for the quarter, versus 31.8% for the same quarter last year. The decline was primarily the result of the lower volumes, expected inefficiencies caused by the Canton operations relocation, and continued pricing pressure.

Operating expenses for the quarter, including restructuring charges, totaled $85.2 million, compared to $92.8 million for the same period in fiscal 2003. Included in the current quarter amounts are restructuring charges of $4.4 million. In addition, the current quarter includes a $5.2 million benefit from the favorable outcome of a lawsuit previously reserved. Excluding the restructuring charges and favorable legal outcome, operating expenses were down 7.3% from the year earlier period, the majority of which is due to the continued benefits of prior cost-reduction actions.

The $4.4 million of restructuring charges for the quarter were associated with the relocations of the Canton and Formcoat operations, and other previously announced actions. The Formcoat facility relocation has been completed and the Canton move is on schedule to be completed in the next two quarters. Included in the restructuring charges is a $0.8 million benefit associated with the sale of the Holland, Michigan, chair plant facility at a price in excess of its carrying value.

Ms. Nickels added, "We are pleased with the continuing gains we are realizing in our cost structure. Our operating expense levels reflect our commitment to continuously manage our spending. We did anticipate our gross margins would be lower this quarter as a result of the Canton move, and expect it will continue to impact us next quarter. By our fourth quarter the move should begin generating cost savings of over $10 million annually, and enhancing future cash flows."

The company""s ending cash position was a strong $207.3 million. Cash flow from operations for the quarter totaled $3.3 million compared to $30.6 million for the same period last year. The decrease was driven primarily by an increase in working capital requirements for accounts receivable and inventories. Capital spending for the quarter was $9.3 million. The company received proceeds of $6.0 million from the sale of its Holland chair plant. The company also repurchased approximately 348,240 shares of its stock for $8.0 million, at an average price of $23.12 per share during the quarter.

Michael A. Volkema, Chairman and CEO, stated, "We are encouraged by the strong economic trends that are having a positive impact on our business. This truly is a season of hope. Typically, we would expect a decline in sales during our third quarter, due to the reduced business activity around the holidays. This year, because of the emerging recovery, we expect third quarter revenues to be near second quarter levels and look forward to even greater opportunity in the future."

Looking forward, the company expects sales for the third quarter of fiscal 2004 to be in a range of $320 million to $335 million. It estimates earnings per share of between $.05 to $.11, which includes restructuring charges of approximately $.03 per share.

The company has announced a live webcast to discuss the results of the fiscal 2004 second quarter on Thursday, December 18, 2003, at 9:30 a.m. EST. The company encourages all interested parties to log in to the website to obtain presentation materials, which will augment the verbal presentation. To ensure your access to the webcast, you should allow extra time to visit our website at http://www.hermanmiller.com/ to download the streaming software necessary to participate. An online archive of the presentation will be available on the website later that day.

Herman Miller, Inc.
855 East Main Ave.
PO Box 302
Zeeland, Michigan 49464-0302

Source: Herman Miller Inc.
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