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Form 8-K MILLER HERMAN INC For: Dec 16

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December 16, 2015 4:08 PM EST
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: December 16, 2015
(Date of earliest event reported)
HERMAN MILLER, INC.
(Exact name of registrant as specified in its charter)

Michigan
(State or Other Jurisdiction of
incorporation)
001-15141
(Commission File No.)
38-0837640 
(IRS Employer
Identification no.)
 
 
 
855 East Main Avenue
Zeeland, Michigan
(Address of Principal Executive Offices)
 
49464
(Zip Code)
 
(616) 654-3000
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[__]     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[__]     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[__]     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[__]     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02.     Results of Operations and Financial Condition
On December 16, 2015, Herman Miller, Inc. issued a press release announcing its financial results for the quarter ended November 28, 2015. A copy of the press release is attached as Exhibit 99.1. Also, a copy of the supplemental financial data for the quarter ended November 28, 2015 is attached as Exhibit 99.2.
The information in this Form 8-K and the attached Exhibits shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.
Exhibits.
99.1        Press release dated December 16, 2015.
99.2        Supplemental financial data for the quarter ended November 28, 2015.




SIGNATURE
        Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated:
December 16, 2015
HERMAN MILLER, INC.
 
 
 
 (Registrant)
 
 
 
By:
/s/ Kevin J. Veltman
 Kevin J. Veltman
 
 
 
 
Vice President of Investor Relations & Treasurer (Duly Authorized Signatory for Registrant)




















Herman Miller Reports Second Quarter Fiscal 2016 Results
•
Strong organic order growth, including a 10% increase in North America
•
Continued gross margin expansion
•
Earnings per share of $0.57 exceeded guidance

Webcast to be held Thursday, December 17, 2015, at 9:30 AM ET
Release
Immediate
Date
December 16, 2015
Contact
Kevin Veltman (616) 654 3973 or [email protected]
 
Jeff Stutz (616) 654 8538 or [email protected]
 
Media: (616) 654-5977 or [email protected]
Address
Herman Miller, Inc., 855 East Main Avenue, PO Box 302, Zeeland, MI 49464-0302
Internet
www.hermanmiller.com

NOTE: A data supplement with additional financial information relating to the periods covered by this press release is available for download from the company’s website at http://www.hermanmiller.com/about-us/investors.html.

Herman Miller, Inc. (NASDAQ: MLHR) today announced results for its second quarter ended November 28, 2015. Net sales in the quarter totaled $580.4 million, an increase of 2.7% from the same quarter last fiscal year. New orders in the second quarter of $601.4 million were 5.1% above the prior year level. On an organic basis, which adjusts for foreign currency translation, sales and orders in the second quarter increased 5.1% and 7.2%, respectively, from the same quarter last fiscal year.

Herman Miller reported net earnings of $0.57 per share on a diluted basis in the second quarter. This compares to diluted earnings per share of $0.46 in the same quarter last fiscal year. Adjusted diluted earnings were $0.51 per share in the second quarter of last year. The translation impact from year-over-year changes in currency exchange rates had an unfavorable impact on earnings per share of approximately $0.06 in the second quarter of fiscal 2016.

Brian Walker, Chief Executive Officer, stated “This quarter’s operating results reflect the progress we’re making as we execute our strategy and demonstrate the strength of our global multi-format distribution footprint, leading brands and innovative product solutions. Organic order growth was strong across the majority of our business, highlighted by double-digit increases within our North America and Specialty segments. This marks our fourth consecutive quarter of steadily improving order trends within our North American contract segment; a pattern that we believe validates the actions we’ve taken to improve the business are yielding results. We’ve achieved this while at the same time delivering consistent improvement in our consolidated gross margin performance, which this quarter was up both sequentially and relative to the second quarter of last fiscal year.”















-more-


Second Quarter Fiscal 2016 Financial Results

FINANCIAL HIGHLIGHTS (Dollars in millions, except per share data)
 
 
 
 
(Unaudited)
 
(Unaudited)
 
 
Three Months Ended
 
Six Months Ended
 
 
11/28/2015
11/29/2014
% Chg.
11/28/2015
11/29/2014
% Chg.
Net Sales
$
580.4

$
565.4

2.7
%
$
1,145.8

$
1,075.1

6.6
%
Gross Margin %
38.7
%
36.4
%
N/A

38.5
%
36.4
%
N/A

Operating Expenses
$
168.9

$
159.0

6.2
%
$
330.6

$
302.4

9.3
%
Operating Earnings %
9.6
%
8.3
%
N/A

9.7
%
8.3
%
N/A

Adjusted Operating Earnings % *
9.6
%
9.1
%
N/A

9.7
%
9.2
%
N/A

Adjusted EBITDA*
$
69.8

$
64.8

7.7
%
$
138.1

$
124.0

11.4
%
Net Earnings Attributable to Herman Miller, Inc.
$
34.7

$
27.8

24.8
%
$
68.2

$
53.0

28.7
%
Earnings Per Share – Diluted
$
0.57

$
0.46

23.9
%
$
1.13

$
0.88

28.4
%
Adj. Earnings Per Share – Diluted *
$
0.57

$
0.51

11.8
%
$
1.13

$
0.98

15.3
%
Orders
$
601.4

$
572.1

5.1
%
$
1,164.7

$
1,089.1

6.9
%
Backlog
$
341.1

$
332.5

2.6
%
 
 
 
*Items indicated, as well as other measures that are "adjusted", represent non-GAAP measurements; see the reconciliations of non-GAAP financial measures and related explanations in the supplemental data file available for download at http://www.hermanmiller.com/about-us/investors.html. A copy of this supplemental data file has also been included with the earnings press release furnished on Form 8-K with the Securities and Exchange Commission.

Herman Miller's consolidated gross margin in the second quarter of fiscal 2016 totaled 38.7% compared to 36.4% reported in the same quarter of last fiscal year. Adjusting for $4.8 million of acquisition-related expenses in the prior year second quarter, the company’s second quarter gross margin improved by 150 basis points from the same period last year.
Herman Miller reported operating expenses in the second quarter of $168.9 million compared to operating expenses of $159.0 million in the same quarter a year ago. Operating expenses in the second quarter increased by $9.9 million, the majority of which relates to spending on new product launch and marketing initiatives, higher incentive accruals and variability from higher net sales.
Herman Miller’s effective income tax rate in the second quarter was 33.0% compared to 33.8% in the same quarter last fiscal year.

The company ended the second quarter with total cash and cash equivalents of $54.7 million. Cash flow generated from operations in the second quarter was $39.9 million compared to $38.7 million in the same quarter last fiscal year.

Jeff Stutz, Chief Financial Officer, noted, "Lower commodity costs, production volume leverage, and continued focus on operational efficiencies helped drive a 150 basis-point improvement over last year’s adjusted gross margin percentage. Currency translation headwinds continued this quarter as expected, reducing our second quarter gross margin by an estimated 60 basis-points and pressuring earnings per share relative to Q2 of last year. Despite the challenging currency environment and lower than expected operating results in our Consumer segment, we delivered consolidated earnings above the range we guided coming into the quarter.”








-more-


Segment Results

North American Furniture Solutions
Net sales for the second quarter of fiscal 2016 within Herman Miller’s North American reportable segment were $348.1 million, an increase of 10.4% from the same quarter last fiscal year. On an organic basis, excluding the negative impact of changes in foreign currency translation, segment sales increased 12.0% on a year-over-year basis. New orders in the second quarter totaled $349.2 million, an increase of 9.4% from the year ago period. On an organic basis, adjusting for the year-over-year impact of currency translation, segment orders in the second quarter were 10.3% higher than last year.

ELA Furniture Solutions
Net sales within the ELA segment totaled $100.7 million in the second quarter of fiscal 2016. This represents an 11.9% decrease from the same quarter of last fiscal year. New orders in this segment totaled $112.7 million in the second quarter, representing a year-over-year increase of 0.3%.On a currency-neutral basis, segment sales decreased 4.5%, while orders were 7.7% higher than the second quarter of last year led by strong demand in the Middle East, China and Mexico.

Specialty
Net sales in the second quarter within Herman Miller’s Specialty segment totaled $57.7 million. This represents a 4.2% increase over sales in the same quarter last year. New orders in the quarter of $61.3 million increased 15.2% from the year ago period. Order growth was broad-based in the quarter across the three Specialty brands - Geiger, Maharam and the Herman Miller Collection.

Consumer
The Consumer segment reported net sales in the quarter of $73.9 million, which were 8.1% lower than last year. Orders in the second quarter of $78.2 million were 10.3% below the prior year. The year-over-year decreases in sales and orders were driven by three primary factors: 1) continued softness within the company's legacy retail distribution channel following actions taken earlier in the calendar year to reduce the number of independent retail distributors; 2) a reduction in the number of DWR studios; and 3) sales and operational disruptions associated with the implementation of a new Enterprise Resource Planning system at Design Within Reach. The ERP implementation went live at the start of the second quarter, and despite significant disruption to the business, was largely complete and stabilized by the close of the quarter.

Third Quarter Fiscal 2016 Guidance

Looking forward, Herman Miller expects net sales in the third quarter of fiscal 2016 to be in the range of $535 million to $555 million. On an organic basis, adjusted for the impact of foreign currency translation, this forecast implies sales growth of approximately 7% at the mid-point of the range. The year-over-year negative impact of foreign currency translation on net sales is expected to be approximately $7 million. Diluted earnings per share in the quarter are expected to range between $0.37 and $0.41. This guidance includes targeted increases in promotional and marketing initiatives in the third quarter within the Consumer segment, which are expected to reduce consolidated earnings per share by approximately $0.02 in the period.
Supplemental Information and Webcast

The company has created a supplemental data report which provides additional information relevant to its quarterly results. This document can be accessed via a link on the Investors section of the company's website at http://www.hermanmiller.com/about-us/investors.html.

The company will host a live webcast to discuss the results of the second quarter of fiscal 2016 on Thursday, December 17, 2015, at 9:30 a.m. ET. To ensure your access to the webcast, you should allow extra time to visit the company’s website at 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.




-more-


About Herman Miller
Herman Miller is a globally recognized provider of furnishings and related technologies and services. Headquartered in West Michigan, the global company has relied on innovative design for over 100 years to solve problems for people wherever they work, live, learn, and heal. Herman Miller’s designs are part of museum collections worldwide, and the company is a past recipient of the Smithsonian Institution's Cooper Hewitt National Design Award. Known and respected for its leadership in corporate social responsibility, Herman Miller has been included in the Dow Jones Sustainability World Index for the past 12 years, and has earned the Human Rights Campaign Foundation’s top rating in its Corporate Equality Index for the past nine years. In fiscal 2015, the company generated $2.14 billion in revenue and employed over 7,000 people worldwide. Herman Miller trades on the NASDAQ Global Select Market under the symbol MLHR.

This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the office furniture industry, the economy, and the company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” likely,” “plans,” “projects,” and “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. These risks include, without limitation, the success of our growth strategy, employment and general economic conditions, the pace of economic recovery in the U.S., and in our International markets, the increase in white-collar employment, the willingness of customers to undertake capital expenditures, the types of products purchased by customers, competitive-pricing pressures, the availability and pricing of raw materials, our reliance on a limited number of suppliers, our ability to expand globally given the risks associated with regulatory and legal compliance challenges and accompanying currency fluctuations, the ability to increase prices to absorb the additional costs of raw materials, the financial strength of our dealers and the financial strength of our customers, our ability to locate new DWR studios, negotiate favorable lease terms for new and existing locations and the implementation of our studio portfolio transformation, our ability to attract and retain key executives and other qualified employees, our ability to continue to make product innovations, the success of newly-introduced products, our ability to serve all of our markets, possible acquisitions, divestitures or alliances, the pace and level of government procurement, the outcome of pending litigation or governmental audits or investigations, political risk in the markets we serve, and other risks identified in our filings with the Securities and Exchange Commission. Therefore, actual results and outcomes may materially differ from what we express or forecast. Furthermore, Herman Miller, Inc., undertakes no obligation to update, amend or clarify forward-looking statements.



-more-


Financial highlights for the quarter ended November 28, 2015, follow:

Herman Miller, Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (Dollars in millions, except per share and common share data)


Three Months Ended
      
November 28, 2015
November 29, 2014
Net Sales
$
580.4

100.0
%
$
565.4

100.0
%
Cost of Sales
356.0

61.3
%
359.7

63.6
%
Gross Margin
224.4

38.7
%
205.7

36.4
%
Operating Expenses
168.9

29.1
%
159.0

28.1
%
Operating Earnings
55.5

9.6
%
46.7

8.3
%
Other Expenses, net
3.5

0.6
%
4.7

0.8
%
Earnings Before Income Taxes and Equity Income
52.0

9.0
%
42.0

7.4
%
Income Tax Expense
17.2

3.0
%
14.2

2.5
%
Equity Income, net of tax
0.1

—
%
—

—
%
Net Earnings
34.9

6.0
%
27.8

4.9
%
Net Earnings Attributable to Noncontrolling Interests
0.2

—
%
—

—
%
Net Earnings Attributable to Herman Miller, Inc.
$
34.7

6.0
%
$
27.8

4.9
%









Amounts per Common Share Attributable to Herman Miller, Inc.








Earnings Per Share – Basic

$0.58




$0.47



Weighted Average Basic Common Shares
59,891,876



59,445,577



Earnings Per Share – Diluted

$0.57




$0.46



Weighted Average Diluted Common Shares
60,411,540



60,024,518










-more-


Herman Miller, Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (Dollars in millions, except per share and common share data)

 
Six Months Ended
      
November 28, 2015
November 29, 2014
Net Sales
$
1,145.8

100.0
%
$
1,075.1

100.0
%
Cost of Sales
704.6

61.5
%
683.8

63.6
%
Gross Margin
441.2

38.5
%
391.3

36.4
%
Operating Expenses
330.6

28.9
%
302.4

28.1
%
Operating Earnings
110.6

9.7
%
88.9

8.3
%
Other Expenses, net
7.9

0.7
%
9.4

0.9
%
Earnings Before Income Taxes and Equity Income
102.7

9.0
%
79.5

7.4
%
Income Tax Expense
34.2

3.0
%
26.6

2.5
%
Equity Income, net of tax
0.2

—
%
0.1

—
%
Net Earnings
68.7

6.0
%
53.0

4.9
%
Net Earnings Attributable to Noncontrolling Interests
0.5

—
%
—

—
%
Net Earnings Attributable to Herman Miller, Inc.
$
68.2

6.0
%
$
53.0

4.9
%
 
 
 
 
 
Amounts per Common Share Attributable to Herman Miller, Inc.
 
 
 
 
Earnings Per Share – Basic

$1.14

 

$0.89

 
Weighted Average Basic Common Shares
59,812,900

 
59,370,718

 
Earnings Per Share – Diluted

$1.13

 

$0.88

 
Weighted Average Diluted Common Shares
60,349,259

 
59,952,634

 



-more-



Herman Miller, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (Dollars in millions, except per share and common share data)

 
Six Months Ended
      
November 28, 2015
November 29, 2014
Net Earnings
$
68.7

$
53.0

Cash Flows provided by Operating Activities
73.2

80.7

Cash Flows used for Investing Activities
(34.7
)
(176.5
)
Cash Flows (used for) from Financing Activities
(47.3
)
58.5

Effect of Exchange Rates
(0.2
)
0.5

Change in Cash
(9.0
)
(36.8
)
Cash, Beginning of Period
63.7

101.5

Cash, End of Period
$
54.7

$
64.7




-more-


Herman Miller, Inc.
Condensed Consolidated Balance Sheets
(Unaudited) (Dollars in millions)
 
November 28, 2015
May 30, 2015
ASSETS
 
 
Current Assets:
 
 
Cash and Cash Equivalents
$
54.7

$
63.7

Marketable Securities
5.4

5.7

Accounts and Notes Receivable, net
218.1

189.6

Inventories, net
131.7

129.6

Prepaid Expenses and Other
45.2

74.9

Total Current Assets
455.1

463.5

Net Property and Equipment
256.1

249.5

Other Assets
488.1

475.0

Total Assets
$
1,199.3

$
1,188.0

 
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
 
 
Current Liabilities:
 
 
Accounts Payable
155.2

164.7

Accrued Liabilities
202.7

186.2

Total Current Liabilities
357.9

350.9

Long-term Debt
256.8

289.8

Other Liabilities
69.6

88.8

Total Liabilities
684.3

729.5

Redeemable Noncontrolling Interests
31.2

30.4

Herman Miller, Inc. Stockholders' Equity
483.1

427.6

Noncontrolling Interests
0.7

0.5

Total Stockholders' Equity
483.8

428.1

Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity
$
1,199.3

$
1,188.0




-end-


Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)






Earnings Release Data Supplement
Herman Miller, Inc. (together with its consolidated subsidiaries, the "company", "we", "our" or "us") provides this supplement to assist investors in evaluating the company's financial and operating results and metrics. We suggest that the narratives to each of the tables included in this supplement be read in conjunction with the financial tables. The financial information included in this supplement contains certain non-GAAP financial measures, as explained in more detail in Section II below. The company intends to update this supplement on a quarterly basis.












Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)

I. Operating Segment Information

The table below summarizes select financial information, for the periods indicated, related to each of the company’s reportable operating segments. The North American Furniture Solutions segment includes the operations associated with the design, manufacture, and sale of furniture products for work-related settings, including office, education, and healthcare environments, throughout the United States and Canada. The business associated with the company's owned contract furniture dealers is also included in the North American Furniture Solutions segment. The ELA Furniture Solutions segment includes EMEA, Latin America, and Asia-Pacific. ELA includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in these aforementioned geographic regions. The Specialty segment includes the operations associated with the design, manufacture, and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles and Herman Miller Collection products. The Consumer segment includes operations associated with the sale of modern design furnishings and accessories to third party retail distributors, as well as direct to consumer sales through eCommerce and Design Within Reach retail studios. The Corporate category consists primarily of unallocated corporate expenses including, if applicable to the periods shown, acquisition-related costs, and other unallocated corporate costs.
 
 
Three Months Ended
Six Months Ended
Net Sales
 
11/28/2015
11/29/2014
11/28/2015
11/29/2014
North America
 
$
348.1

$
315.3

$
686.2

$
636.4

ELA
 
100.7

114.3

203.2

209.7

Specialty
 
57.7

55.4

115.5

110.0

Consumer
 
73.9

80.4

140.9

119.0

Corporate
 
—

—

—

—

Total
 
$
580.4

$
565.4

$
1,145.8

$
1,075.1

 
 
 
 
 
 
% Change in Net Sales
 
 
 
 
 
North America
 
10.4
 %
 
7.8
 %
 
ELA
 
(11.9
)%
 
(3.1
)%
 
Specialty
 
4.2
 %
 
5.0
 %
 
Consumer
 
(8.1
)%
 
18.4
 %
 
Corporate
 
n/a

 
n/a

 
Total
 
2.7
 %
 
6.6
 %
 
 
 
 
 
 
 
Operating Earnings (Loss)
 
 
 
 
 
North America
 
$
41.4

$
32.3

$
82.2

$
68.5

ELA
 
7.3

10.4

13.9

13.5

Specialty
 
4.2

2.8

8.5

5.7

Consumer
 
2.7

1.5

6.5

3.8

Corporate
 
(0.1
)
(0.3
)
(0.5
)
(2.6
)
Total
 
$
55.5

$
46.7

$
110.6

$
88.9

 
 
 
 
 
 
Operating Earnings % Net Sales
 
 
 
 
 
North America
 
11.9
 %
10.2
%
12.0
 %
10.8
%
ELA
 
7.2
 %
9.1
%
6.8
 %
6.4
%
Specialty
 
7.3
 %
5.1
%
7.4
 %
5.2
%
Consumer
 
3.7
 %
1.9
%
4.6
 %
3.2
%
Corporate
 
n/a

n/a

n/a

n/a

Total
 
9.6
 %
8.3
%
9.7
 %
8.3
%





Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)

II. Non-GAAP Financial Measures
This presentation contains certain non-GAAP financial measures; including Adjusted Earnings per Share, Adjusted Operating Earnings, Adjusted EBITDA, and Organic Growth (Decline). Adjusted Earnings per Share and Adjusted Operating Earnings are calculated by excluding from Earnings per Share and Operating Earnings items that we believe are not indicative of our ongoing operating performance. For the periods covered by this release, such items consist of expenses associated with acquisition-related inventory adjustments and transaction expenses associated with our acquisition of DWR. Adjusted EBITDA is calculated by excluding depreciation, amortization and other net income or expenses from Adjusted Operating Earnings. We present Adjusted Earnings per Share, Adjusted Operating Earnings, and Adjusted EBITDA because we consider them to be important supplemental measures of our performance and believe them to be useful in analyzing ongoing results from operations. Organic Growth (Decline) represents the change in revenue and orders, excluding currency translation effects and the impacts of acquisitions and divestitures.

Adjusted Earnings per Share, Adjusted Operating Earnings, Adjusted EBITDA and Organic Growth (Decline) are not measurements of our financial performance under GAAP and should not be considered an alternative to the related GAAP measurement. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results.
A. Reconciliation of Earnings per Share to Adjusted Earnings per Share
 
Three Months Ended
Six Months Ended
 
 
11/28/2015
11/29/2014
11/28/2015
11/29/2014
Earnings per Share - Diluted
 
$
0.57

$
0.46

$
1.13

$
0.88

Add: Acquisition-Related Inventory Adjustments
 
—

0.05

—

0.08

Add: Acquisition Expenses
 
—

—

—

0.02

Adjusted Earnings per Share – Diluted
 
$
0.57

$
0.51

$
1.13

$
0.98

 
 
 
 
 
 
Weighted Average Shares Outstanding (used for Calculating Adjusted Earnings per Share) – Diluted
 
60,411,540

60,024,518

60,349,259

59,952,634

 
 
 
 
 
 
B. Reconciliation of Operating Earnings to Adjusted Operating Earnings and Adjusted EBITDA
 
Three Months Ended
Six Months Ended
 
 
11/28/2015
11/29/2014
11/28/2015
11/29/2014
Operating Earnings
 
$
55.5

$
46.7

$
110.6

$
88.9

Add: Acquisition-Related Inventory Adjustments
 
—

4.8

—

7.8

Add: Acquisition Expenses
 
—

0.2

—

2.2

Adjusted Operating Earnings
 
$
55.5

$
51.7

$
110.6

$
98.9

 
 
 
 
 
 
Other Income (Expense), net
 
0.4

(0.1
)
(0.1
)
(0.1
)
Add: Depreciation and Amortization
 
13.9

13.2

27.6

25.2

Adjusted EBITDA
 
$
69.8

$
64.8

$
138.1

$
124.0

 
 
 
 
 
 




Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)
C. Reconciliation of Operating Earnings to Adjusted Operating Earnings and Adjusted EBITDA by Segment





















Three Months Ended
Three Months Ended

11/28/15
11/29/14

North America
ELA
Specialty
Consumer
Corporate
Total
North America
ELA
Specialty
Consumer
Corporate
Total














Operating Earnings (Loss)
$
41.4

$
7.3

$
4.2

$
2.7

$
(0.1
)
$
55.5

$
32.3

$
10.4

$
2.8

$
1.5

$
(0.3
)
$
46.7

% Net Sales
11.9
%
7.2
%
7.3
%
3.7
%
n/a

9.6
%
10.2
%
9.1
%
5.1
%
1.9
%
n/a

8.3
%

























Add: Acquisition-Related Inventory Adjustments
—

—

—

—

—

—

—

—

—

4.8

—

4.8

Acquisition Expenses
—

—

—

—

—

—

—

—

—

—

0.2

0.2


























Adjusted Operating Earnings (Loss)
$
41.4

$
7.3

$
4.2

$
2.7

$
(0.1
)
$
55.5

$
32.3

$
10.4

$
2.8

$
6.3

$
(0.1
)
$
51.7

% Net Sales
11.9
%
7.2
%
7.3
%
3.7
%
n/a

9.6
%
10.2
%
9.1
%
5.1
%
7.8
%
n/a

9.1
%













Other Income (Expense), net
—

—

—

—

0.4

0.4

—

—

—

—

(0.1
)
(0.1
)
Add: Depreciation and Amortization
7.2

2.3

2.0

2.3

0.1

13.9

7.0

2.2

1.8

2.1

0.1

13.2

Adjusted EBITDA
$
48.6

$
9.6

$
6.2

$
5.0

$
0.4

$
69.8

$
39.3

$
12.6

$
4.6

$
8.4

$
(0.1
)
$
64.8

% Net Sales
14.0
%
9.5
%
10.7
%
6.8
%
n/a

12.0
%
12.5
%
11.0
%
8.3
%
10.4
%
n/a

11.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 

Six Months Ended
Six Months Ended

11/28/15
11/29/14

North America
ELA
Specialty
Consumer
Corporate
Total
North America
ELA
Specialty
Consumer
Corporate
Total














Operating Earnings (Loss)
$
82.2

$
13.9

$
8.5

$
6.5

$
(0.5
)
$
110.6

$
68.5

$
13.5

$
5.7

$
3.8

$
(2.6
)
$
88.9

% Net Sales
12.0
%
6.8
%
7.4
%
4.6
%
n/a

9.7
%
10.8
%
6.4
%
5.2
%
3.2
%
n/a

8.3
%

























Add: Acquisition-Related Inventory Adjustments
—

—

—

—

—

—

—

—

—

7.8

—

7.8

Acquisition Expenses
—

—

—

—

—

—

—

—

—

—

2.2

2.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Earnings (Loss)
$
82.2

$
13.9

$
8.5

$
6.5

$
(0.5
)
$
110.6

$
68.5

$
13.5

$
5.7

$
11.6

$
(0.4
)
$
98.9

% Net Sales
12.0
%
6.8
%
7.4
%
4.6
%
n/a

9.7
%
10.8
%
6.4
%
5.2
%
9.7
%
n/a

9.2
%

























Other Income (Expense), net
—

—

—

—

(0.1
)
(0.1
)
—

—

—

—

(0.1
)
(0.1
)
Add: Depreciation and Amortization
14.9

4.4

3.8

4.3

0.2

27.6

14.2

4.4

3.5

3.0

0.1

25.2

Adjusted EBITDA
$
97.1

$
18.3

$
12.3

$
10.8

$
(0.4
)
$
138.1

$
82.7

$
17.9

$
9.2

$
14.6

$
(0.4
)
$
124.0

% Net Sales
14.2
%
9.0
%
10.6
%
7.7
%
n/a

12.1
%
13.0
%
8.5
%
8.4
%
12.3
%
n/a

11.5
%









Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)
D. Organic Sales Growth (Decline) by Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
Three Months Ended
 
11/28/15
11/29/14
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Net Sales, as reported
$
348.1

$
100.7

$
57.7

$
73.9

$
580.4

$
315.3

$
114.3

$
55.4

$
80.4

$
565.4

% change from PY
10.4
%
(11.9
)%
4.2
%
(8.1
)%
2.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
4.9

8.5

0.2

0.3

13.9

—

—

—

—

—

Net sales, proforma
$
353.0

$
109.2

$
57.9

$
74.2

$
594.3

$
315.3

$
114.3

$
55.4

$
80.4

$
565.4

% change from PY
12.0
%
(4.5
)%
4.5
%
(7.7
)%
5.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Six Months Ended
Six Months Ended
 
11/28/15
11/29/14
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Net Sales, as reported
$
686.2

$
203.2

$
115.5

$
140.9

$
1,145.8

$
636.4

$
209.7

$
110.0

$
119.0

$
1,075.1

% change from PY
7.8
%
(3.1
)%
5.0
%
18.4
 %
6.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
9.7

19.2

0.4

0.5

29.8

—

—

—

—

—

Acquisition
—

—

—

(35.4
)
(35.4
)
—

—

—

—

—

Acquisition Intercompany Elimination
—

—

—

5.2

5.2

—

—

—

—

—

Net sales, proforma
$
695.9

$
222.4

$
115.9

$
111.2

$
1,145.4

$
636.4

$
209.7

$
110.0

$
119.0

$
1,075.1

% change from PY
9.3
%
6.1
 %
5.4
%
(6.6
)%
6.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period





Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)
E. Organic Order Growth (Decline) by Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
Three Months Ended
 
11/28/15
11/29/14
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Orders, as reported
$
349.2

$
112.7

$
61.3

$
78.2

$
601.4

$
319.3

$
112.4

$
53.2

$
87.2

$
572.1

% change from PY
9.4
%
0.3
 %
15.2
%
(10.3
)%
5.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
2.9

8.4

0.2

0.2

11.7

—

—

—

—

—

Orders, proforma
$
352.1

$
121.1

$
61.5

$
78.4

$
613.1

$
319.3

$
112.4

$
53.2

$
87.2

$
572.1

% change from PY
10.3
%
7.7
 %
15.6
%
(10.1
)%
7.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
Six Months Ended
 
11/28/15
11/29/14
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Orders, as reported
$
681.1

$
220.9

$
119.7

$
143.0

$
1,164.7

$
632.0

$
224.2

$
110.3

$
122.6

$
1,089.1

% change from PY
7.8
%
(1.5
)%
8.5
%
16.6
 %
6.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
6.8

20.8

0.4

0.5

28.5

—

—

—

—

—

Acquisition
—

—

—

(33.1
)
(33.1
)
—

—

—

—

—

Acquisition Intercompany Elimination
—

—

—

4.1

4.1

—

—

—

—

—

Orders, proforma
$
687.9

$
241.7

$
120.1

$
114.5

$
1,164.2

$
632.0

$
224.2

$
110.3

$
122.6

$
1,089.1

% change from PY
8.8
%
7.8
 %
8.9
%
(6.6
)%
6.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period





Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)

F. Design Within Reach Studio Metrics
 
 
 
 
 
Studio Count
 
Three Months Ended
Six Months Ended
 
November 28, 2015
November 29, 2014
November 28, 2015
November 29, 2014*
Beginning of Period
32

38

33

39

Studio Openings
1

1

1

3

Studio Closings
(1
)
(2
)
(2
)
(5
)
End of Period
32

37

32

37

 
 
 
 
 
 
Studio Selling Square Footage
 
Three Months Ended
Six Months Ended
 
November 28, 2015
November 29, 2014
November 28, 2015
November 29, 2014*
Beginning of Period
246,440

245,233

248,440

235,466

Studio Openings
15,115

11,500

15,115

36,986

Studio Expansions
3,906

—

3,906

2,681

Studio Closings
(7,500
)
(5,535
)
(9,500
)
(23,935
)
End of Period
257,961

251,198

257,961

251,198

 
 
 
 
 
 
Studio Revenue Metrics
 
Three Months Ended
Six Months Ended
 
November 28, 2015
November 29, 2014
November 28, 2015
November 29, 2014*
Average Studio Square Footage
252,201

248,216

253,201

243,332

Annualized Net Sales per Square Foot
$
663

$
740

$
635

$
730

Comparable Studio Sales
(5.7
)%
(2.5
)%
(5.2
)%
(3.3
)%

*Fiscal year 2015 figures are presented on a pro forma basis and represent DWR measures as of the beginning of the fiscal period

Note: Consumer segment sales also include sales through eCommerce, two outlet stores, and wholesale channels.





Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)

G. New and Expanded Design Within Reach Locations

Berkeley Studio (Expanded)
 
Date Expanded: October 2015
Square Footage: 7,847
 

Scottsdale Studio
 
Date Opened: October 2015
Square Footage: 15,115
 





Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)

H. Sales and Earnings Guidance - Upcoming Quarter
 
Company Guidance
 
 
Q3 Fiscal 2016
Net Sales
 
$535 to $555
Gross Margin %
 
38.0% to 38.5%
Operating Expenses
 
$167 to $171
Effective Tax Rate
 
32% to 34%
Earnings Per Share, Diluted
 
$0.37 to $0.41






Herman Miller, Inc. Supplemental Financial Data
Six Months Ended 11/28/2015
(Unaudited) ($ in millions except per share data and square footage metrics)






Forward Looking Statements
This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the office furniture industry, the economy, and the company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements.These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. These risks include, without limitation, the success of our growth strategy, employment and general economic conditions, the pace of economic recovery in the U.S and in our International markets, the increase in white-collar employment, the willingness of customers to undertake capital expenditures, the types of products purchased by customers, competitive-pricing pressures, the availability and pricing of raw materials, our reliance on a limited number of suppliers, our ability to expand globally given the risks associated with regulatory and legal compliance challenges and accompanying currency fluctuations, the ability to increase prices to absorb the additional costs of raw materials, the financial strength of our dealers and the financial strength of our customers, our ability to locate new DWR studios, negotiate favorable lease terms for new and existing locations and the implementation of our studio portfolio transformation, our ability to attract and retain key executives and other qualified employees, our ability to continue to make product innovations, the success of newly-introduced products, our ability to serve all of our markets, possible acquisitions, divestitures or alliances, the pace and level of government procurement, the outcome of pending litigation or governmental audits or investigations, political risk in the markets we serve, and other risks identified in our filings with the Securities and Exchange Commission.Therefore, actual results and outcomes may materially differ from what we express or forecast. Furthermore, Herman Miller, Inc., undertakes no obligation to update, amend or clarify forward-looking statements.







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