ZEELAND, Mich., Sept. 16, 2020 /PRNewswire/ --
- Strong Retail performance and improving global trends help
offset near-term demand pressures in North America
- Robust gross margin of 39.9% reflects an increase of 320 basis
points from last year
- Quarterly cash dividend program re-established at $0.1875 per share
Webcast to be held Thursday, September 17, 2020, at
9:30AM ET
First Quarter Fiscal 2021 Financial Results
|
(Unaudited)
|
|
Three Months
Ended
|
(Dollars in
millions, except per share data)
|
August 29,
2020
|
August 31,
2019
|
% Chg.
|
Net Sales
|
$
|
626.8
|
|
$
|
670.9
|
|
(6.6)
|
%
|
Gross Margin
%
|
39.9
|
%
|
36.7
|
%
|
N/A
|
Operating
Expenses
|
$
|
155.8
|
|
$
|
184.2
|
|
(15.4)
|
%
|
Restructuring
Expenses
|
$
|
(1.2)
|
|
$
|
1.8
|
|
(166.7)
|
%
|
Operating Earnings
%
|
15.2
|
%
|
9.0
|
%
|
N/A
|
Adjusted Operating
Earnings %*
|
15.3
|
%
|
9.3
|
%
|
N/A
|
Net Earnings
Attributable to Herman Miller, Inc.
|
$
|
73.0
|
|
$
|
48.2
|
|
51.5
|
%
|
Earnings Per Share –
Diluted
|
$
|
1.24
|
|
$
|
0.81
|
|
53.1
|
%
|
Adjusted Earnings Per
Share – Diluted*
|
$
|
1.24
|
|
$
|
0.84
|
|
47.6
|
%
|
Orders
|
$
|
556.0
|
|
$
|
676.7
|
|
(17.8)
|
%
|
Backlog
|
$
|
400.0
|
|
$
|
399.9
|
|
—
|
%
|
*Items indicated
represent Non-GAAP measurements; see the reconciliations of
Non-GAAP financial measures and related explanations
below.
|
To our shareholders:
We have a rich and exciting story to share with you about Herman
Miller. Moving forward, we will bring you more of this narrative
through a quarterly letter, which will go beyond just a synopsis of
our financial performance to share the stories, successes, and
challenges we are facing as we strive to create value for all of
our stakeholders. We are excited to begin with this inaugural
letter.
Strong Financial Results
Our diversified business
model coupled with our ability to act quickly and decisively to
manage the business drove strong operating performance for the
quarter, once again proving our ability to deliver profitable
results even in these difficult times. Our strong performance this
quarter validates our strategy, as our multi-channel go-to-market
approach enabled us to serve customers where, and how, they needed
to be served. The investments we have made in people, technology,
and products positioned us to capitalize on emerging opportunities
as the needs of our customers quickly evolved due to the onset of
the COVID-19 crisis.
Consolidated net sales for the quarter were down by 7% compared
to last year and down 13% organically, which excludes the impacts
of acquisitions and foreign currency translation. Our net sales
this quarter benefited from the elevated backlog levels we reported
at the start of the period, which were driven in part by the impact
of manufacturing and project scheduling disruptions experienced
during the fourth quarter of last fiscal year. Orders in the
quarter were down 18% compared to the prior year on a reported
basis and down 24% organically.
Retail Segment
Our
Retail business led the way this quarter, with orders up an
impressive 40% over last year. Demand was led by the Home Office
category, which increased nearly 300% over last year. Consumers are
also investing in their broader home environments, which led to
positive year-on-year demand across multiple product categories,
notably Upholstery, Outdoor, and Accessories.
North America Contract
Segment
The North America
segment continued to feel the effects of COVID-19 on overall demand
levels, posting a year-over-year decline of 40%. With that said, we
were encouraged to see modest improvement in order trends within
this segment in the back half of the quarter.
International Contract
Segment
Our International segment saw a relatively improved
demand environment as regions such as Asia-Pacific and Europe are further ahead on the recovery path
from the effects of COVID-19. Orders were up 26% on a reported
basis and down 9% organically. Our recent HAY acquisition was a
particularly strong contributor within the International business
with order levels that were 3% higher than last year as HAY's mix
of consumer and contract business helped drive demand.
Operating margins for the quarter were 15.2%, reflecting a
meaningful improvement over 9.0% reported in the same quarter last
year. There were two primary drivers of these strong results. Gross
margins of 39.9%, which were 320 basis points higher than last
year, reflected strong channel and product mix and high
productivity from our manufacturing teams. At the same time, we
continued to take decisive actions to manage expense levels, with
operating expenses down $31.4 million
from last year.
As a result of our strong operating performance, we delivered
earnings per share of $1.24 on both a
reported and adjusted basis for the quarter, which reflected a
year-over-year increase of 53.1% on a reported basis and 47.6% on
an adjusted basis.
We also continued to maintain a strong and flexible balance
sheet, with combined liquidity from cash on hand and availability
on our revolving credit facility of $562.3 million at the end of the quarter.
This represented an increase of $107.7 million from the fourth quarter of
last fiscal year and was aided by robust cash flow from operations
during the quarter of $115.9 million.
At the same time, our gross-debt to EBITDA ratio of 1.1x is well
below the maximum level of 3.5x required by our bank covenants.
Re-Establishing Quarterly Dividend
Based on our
confidence in the strategic direction of the business, strong
liquidity position and operating performance this quarter, we are
re-establishing a quarterly cash dividend program. Indicating their
shared sense of confidence in our business, our Board of Directors
approved a $0.1875 per share dividend
that will be paid on January 15, 2021
to shareholders of record as of November 28,
2020.
Looking to the Future, Guided by Purpose
The global
pandemic validated what we already knew–we are better together, as
a comprehensive family of brands capable of meeting the needs of
customers wherever they live, work, learn, heal or play. Today, we
are more unified than at any point in our company history, with a
shared purpose that defines our reason for existing: "Design for
the good of humankind." Guided by this purpose, we enter this
next era in our history assured that Herman Miller Group will
continue to create places that matter for our customers while also
helping to build a better world.
To realize this purpose, our strategy centers around four key
pillars:
- Unlock the power of One Herman
Miller to fully leverage our portfolio of brands and
capabilities
- Build a customer-centric, digitally enabled business model in
both the Contract and Retail markets
- Accelerate profitable growth in each of our business
segments
- Reinforce our commitment to our people, places and
communities
Even as we navigate the challenges brought on by COVID-19, we
have not lost focus on these strategic priorities, and we made
important progress on many fronts during the first quarter of
fiscal year 2021, including:
A Digital Imperative
Nearly two years ago we set out
to design a technology infrastructure that would support our goal
of becoming a digitally enabled business capable of delivering
frictionless customer experiences. Our investments in this area
allowed us to pivot quickly and capitalize on a new set of
opportunities when our customers' purchasing behaviors changed
rapidly due to the global pandemic.
E-commerce drove a significant portion of our Retail growth in
the quarter, with overall web sales and orders up 248% and 257%,
respectively, across our Herman Miller, DWR, and HAY websites in
North America when compared to the
prior year. We introduced several new capabilities in the quarter
that further improve the customer experience and strengthen our
position as a digital retailer:
- We launched our reimagined Design Within Reach website in July,
which has delivered on one of our objectives of improving
conversion rates. The new platform will be the model for future
refreshes of both the Herman Miller and HAY websites.
- We created a Work from Home landing page on Herman Miller's
website to help customers more easily browse and select the home
office products that best meet their needs.
- We developed a Work from Home online assessment tool that has
been used by more than 12,000 customers to assess their needs. Data
from this tool will also inform future investments and strategies
for growing the home office furnishings category.
We have also made tremendous progress on improving our digital
capabilities and solutions in support of our Contract business.
Investments in this category are centered around reducing the
complexity of the digital tool sets our dealers utilize and driving
greater share of dealer spend to Herman Miller Group products and
solutions.
- Our new digital platform that helps Contract customers and
design partners visualize, search and select from products across
the dealer offerings has seen widespread adoption and is driving
increased specification of Herman Miller Group products and
solutions.
- Excitement continues to build around our proprietary generative
design technology that uses artificial intelligence to create
dynamic floor plans populated with Herman Miller Group product.
While still in beta testing, we believe this has the potential to
be one of the most disruptive technologies the industry has seen in
decades. A broader North America
release is planned for late in calendar year 2020.
The Office of the Future
In the future, hybrid working
models are expected to become the norm. Offices will become
destinations, and we are well-positioned to partner with our
customers to design innovative workplace solutions that serve as
collaboration centers and solve for the geographic dispersion of
the office footprint. At the same time, the demand for home office
products continues to expand our addressable market. Already, we
have been able to capitalize on the near-term needs of our
corporate customers by quickly expanding our Inside Access
program to provide home office solutions for their employees who
are now working remotely. Inside Access offers individuals
the opportunity to purchase product as part of their employer's
relationship with Herman Miller Group while leveraging our retail
fulfillment capabilities.
A Differentiated Retail Opportunity
The Retail
business delivered the best quarterly sales and profitability in
the history of this business. While a large portion of this
exceptional first quarter was fueled by demand for home office
solutions, our Retail business posted growth across several
important product categories as our strategy is clearly resonating
with consumers. Through the warm weather months, orders in the
Outdoor category grew 51% over the first quarter of last year.
Orders within our line of Accessories grew 34% as consumers looked
to make inexpensive upgrades to their homes, particularly in the
categories of kitchen and storage products. Lastly, the Upholstery
category grew 25% over last year, supported by increasing consumer
demand for furnishing upgrades that enhance the comfort and
functionality of their living spaces. The strength of our
e-commerce channels was a clear bright spot this quarter, but we
were also particularly pleased with the performance of our
full-price brick-and-mortar retail locations, where demand levels
were up approximately 4% compared to last year despite a decline in
overall traffic levels. We believe we have only scratched the
surface of the opportunity in this segment and we will continue to
invest in, grow, and transform our Retail business going
forward.
Our eagerly anticipated entry into the gaming market, in
partnership with Logitech G, came to reality in the quarter
(https://www.hermanmiller.com/products/gaming/). In the month
following launch, global demand for the Embody® Gaming Chair
significantly outpaced our expectations. Our strategy to engage
influencers and leverage social media generated more than 243
million social media impressions in just the first two days after
launch. We are still in the early days of reaching this new
audience, with a series of gaming specific product introductions
planned for the coming months, including the recently released
Matte Black Special Edition Aeron® Gaming Chair.
Gaming was one of the first ideas to emerge from our Innovation
Incubation team – a stand-alone function responsible for
identifying emergent and disruptive concepts that can further drive
growth across Herman Miller Group. While we are thrilled with the
early success of our entry into gaming, we are equally excited to
see what comes next from this innovation pipeline, including our
new performance seating and home office retail concept stores.
These stores will offer customers the opportunity to explore Herman
Miller's home office solutions firsthand, which we know from
customer research is a preference for these types of highly
considered purchases. We plan to open the first of these concept
stores later this fall.
Contributing to a Better World
Like many other
organizations, we are speaking out against the racism and
oppression that have persisted in the US–and around the world–for
generations. While we've long believed in the importance of
diversity and inclusion in our workplace, we are more committed
than ever to creating an equitable environment within our company,
across our industry, and everywhere we live and work. Andi Owen recently joined more than 1,200 CEOs
in signing the CEO Action for Diversity & Inclusion™ Pledge and
we have shared the details of our diversity, inclusion, and equity
commitments on the "Taking Action Toward Equity" page of our
website
(https://www.hermanmiller.com/our-values/inclusiveness-and-diversity/taking-action-toward-equity/).
Meaningful change begins at home and we will continue to hold
ourselves accountable in the pursuit of social justice.
Outlook
While encouraged by our strategic progress, we
are continuing to suspend sales and earnings guidance given the
uncertain demand environment in the face of the persisting global
pandemic. Despite not offering guidance, there are certain demand
indicators that we believe are relevant for investors developing
revenue estimates for our business in the upcoming quarter. Recent
demand patterns and backlog are the most relevant data points to
estimate near-term revenue opportunity. As noted earlier, orders in
the first quarter at the consolidated level were down 18% from the
same period last year and, through the first two weeks of the
second quarter, consolidated orders were down 10%. Backlog at the
end of the quarter was flat with last year. On the profitability
front, we continue to expect operating income deleverage in the
range of 25% to 30% over time. While this will not necessarily be
an even walk from quarter to quarter, we would expect this outcome
over time if we experience a recessionary period of similar depth
and duration to the past two recessions.
Commitment to Long-Term Value Creation
It is an
exciting time to be part of Herman Miller Group. We have the
research, knowledge, services and products to help our customers
solve the new problems brought on by COVID-19. With a global,
multi-channel distribution capability, we can reach customers
wherever and however they need to be served. Our strategy positions
us well to capitalize on a rapidly changing world, and we remain
focused on growing our business and creating long-term shareholder
value. Thank you for your continued investment in our company.
Andi
Owen
|
|
Jeff
Stutz
|
|
President and Chief
Executive Officer
|
|
Chief Financial
Officer
|
|
Financial highlights for the three months ended August 29,
2020 follow:
Herman Miller,
Inc.
Condensed Consolidated Statements of Operations
|
|
(Unaudited)
(Dollars in millions, except per share and common share
data)
|
Three Months
Ended
|
August 29,
2020
|
|
August 31,
2019
|
Net Sales
|
$
|
626.8
|
|
100.0
|
%
|
|
$
|
670.9
|
|
100.0
|
%
|
Cost of
Sales
|
376.8
|
|
60.1
|
%
|
|
424.8
|
|
63.3
|
%
|
Gross
Margin
|
250.0
|
|
39.9
|
%
|
|
246.1
|
|
36.7
|
%
|
Operating
Expenses
|
155.8
|
|
24.9
|
%
|
|
184.2
|
|
27.5
|
%
|
Restructuring
Expenses
|
(1.2)
|
|
(0.2)
|
%
|
|
1.8
|
|
0.3
|
%
|
Operating
Earnings
|
95.4
|
|
15.2
|
%
|
|
60.1
|
|
9.0
|
%
|
Other Expenses,
net
|
1.6
|
|
0.3
|
%
|
|
2.1
|
|
0.3
|
%
|
Earnings Before
Income Taxes and Equity Income
|
93.8
|
|
15.0
|
%
|
|
58.0
|
|
8.6
|
%
|
Income Tax
Expense
|
20.6
|
|
3.3
|
%
|
|
12.2
|
|
1.8
|
%
|
Equity Income, net of
tax
|
0.2
|
|
—
|
%
|
|
2.2
|
|
0.3
|
%
|
Net
Earnings
|
73.4
|
|
11.7
|
%
|
|
48.0
|
|
7.2
|
%
|
Net Earnings (Loss)
Attributable to Redeemable Noncontrolling Interests
|
0.4
|
|
0.1
|
%
|
|
(0.2)
|
|
—
|
%
|
Net Earnings
Attributable to Herman Miller, Inc.
|
$
|
73.0
|
|
11.6
|
%
|
|
$
|
48.2
|
|
7.2
|
%
|
|
|
|
|
|
|
Amounts per Common
Share Attributable to Herman Miller, Inc.
|
Earnings Per Share –
Basic
|
|
$1.24
|
|
|
$0.82
|
Weighted Average
Basic Common Shares
|
58,831,305
|
58,909,001
|
Earnings Per Share –
Diluted
|
|
$1.24
|
|
|
$0.81
|
Weighted Average
Diluted Common Shares
|
58,964,268
|
59,231,728
|
Herman Miller,
Inc.
Condensed Consolidated Statements of Cash Flows
|
|
|
Three Months
Ended
|
(Unaudited)
(Dollars in millions)
|
August 29,
2020
|
|
August 31,
2019
|
Cash provided by
(used in):
|
|
|
|
Operating
activities
|
$
|
115.9
|
|
|
$
|
54.7
|
|
Investing
activities
|
(5.1)
|
|
|
(24.0)
|
|
Financing
activities
|
(276.5)
|
|
|
(27.9)
|
|
Effect of exchange rate
changes
|
8.3
|
|
|
(2.5)
|
|
Net change in cash
and cash equivalents
|
(157.4)
|
|
|
0.3
|
|
Cash and cash
equivalents, beginning of period
|
454.0
|
|
|
159.2
|
|
Cash and cash
equivalents, end of period
|
$
|
296.6
|
|
|
$
|
159.5
|
|
Herman Miller,
Inc.
Condensed Consolidated Balance Sheets
|
|
(Unaudited)
(Dollars in millions)
|
August 29,
2020
|
|
May 30,
2020
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
296.6
|
|
|
$
|
454.0
|
|
Short-term
investments
|
7.0
|
|
|
7.0
|
|
Accounts and notes
receivable, net
|
195.3
|
|
|
180.0
|
|
Unbilled accounts
receivable
|
28.4
|
|
|
19.5
|
|
Inventories,
net
|
186.5
|
|
|
197.3
|
|
Prepaid expenses and
other
|
43.7
|
|
|
59.3
|
|
Total current
assets
|
757.5
|
|
|
917.1
|
|
Net property and
equipment
|
327.7
|
|
|
330.8
|
|
Right of use
assets
|
197.8
|
|
|
193.9
|
|
Other
assets
|
634.1
|
|
|
612.1
|
|
Total
Assets
|
$
|
1,917.1
|
|
|
$
|
2,053.9
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS'
EQUITY
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
159.5
|
|
|
$
|
128.8
|
|
Short-term borrowings
and current portion of long-term debt
|
52.4
|
|
|
51.4
|
|
Accrued
liabilities
|
265.6
|
|
|
290.0
|
|
Total current
liabilities
|
477.5
|
|
|
470.2
|
|
Long-term
debt
|
274.9
|
|
|
539.9
|
|
Lease
liabilities
|
178.7
|
|
|
178.8
|
|
Other
liabilities
|
182.4
|
|
|
171.6
|
|
Total
Liabilities
|
1,113.5
|
|
|
1,360.5
|
|
Redeemable
Noncontrolling Interests
|
58.4
|
|
|
50.4
|
|
Stockholders'
Equity
|
745.2
|
|
|
643.0
|
|
Total Liabilities,
Redeemable Noncontrolling Interests and Stockholders'
Equity
|
$
|
1,917.1
|
|
|
$
|
2,053.9
|
|
Non-GAAP Financial Measures and Other Supplemental
Data
This presentation contains certain non-GAAP financial
measures such as Adjusted Earnings per Share, Adjusted Operating
Earnings (Loss), Adjusted Gross Margin, and Organic Growth
(Decline). Adjusted Earnings per Share represents reported diluted
earnings per share excluding the impact from adjustments related to
restructuring expenses and other special charges or gains,
including related taxes. Adjusted Operating Earnings (Loss)
represents reported operating earnings plus restructuring expenses
and other special charges. Adjusted Gross Margin represents gross
margin plus other special charges. Restructuring expenses include
actions involving facilities consolidation and optimization,
targeted workforce reductions, and costs associated with an early
retirement program. Special charges include costs related to CEO
transition, acquisition-related costs, and certain costs arising as
a direct result of COVID-19. Organic Growth represents the change
in sales and orders, excluding currency translation effects and the
impact of acquisitions. The Company believes these non-GAAP
measures are useful for investors as they provide financial
information on a more comparative basis for the periods
presented.
Adjusted Earnings per Share, Adjusted Operating Earnings (Loss),
Adjusted Gross Margin, 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.
Certain tables below summarize select financial information, for
the periods indicated, related to each of the Company's reportable
segments. The North America Contract 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 dealer is also included in the
North America Contract segment. North America Contract also
includes the operations associated with the design, manufacture,
and sale of high-craft furniture products and textiles including
Geiger wood products, Maharam textiles, Nemschoff healthcare and
Herman Miller Collection products. The International Contract
segment includes the operations associated with the design,
manufacture, and sale of furniture products, primarily for
work-related settings, in the EMEA, Latin
America and Asia-Pacific
geographic regions. The Retail 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 e-commerce and Design Within Reach and
HAY retail stores and studios. Corporate costs represent
unallocated expenses related to general corporate functions,
including, but not limited to, certain legal, executive, corporate
finance, information technology, administrative and
acquisition-related costs.
A. Reconciliation
of Operating Earnings to Adjusted Operating Earnings by
Segment
|
|
|
Three Months
Ended
|
|
August 29,
2020
|
August 31,
2019
|
North America
Contract
|
|
|
|
|
Net Sales
|
$
|
338.8
|
|
100.0
|
%
|
$
|
458.4
|
|
100.0
|
%
|
Gross
Margin
|
129.0
|
|
38.1
|
%
|
167.7
|
|
36.6
|
%
|
Total Operating
Expenses
|
77.2
|
|
22.8
|
%
|
104.8
|
|
22.9
|
%
|
Operating
Earnings
|
51.8
|
|
15.3
|
%
|
62.9
|
|
13.7
|
%
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Special
Charges
|
0.2
|
|
0.1
|
%
|
—
|
|
—
|
%
|
Restructuring
|
1.6
|
|
0.5
|
%
|
1.6
|
|
0.3
|
%
|
Adjusted Operating
Earnings
|
$
|
53.6
|
|
15.8
|
%
|
$
|
64.5
|
|
14.1
|
%
|
|
|
|
|
|
International
Contract
|
|
|
|
|
Net Sales
|
$
|
153.7
|
|
100.0
|
%
|
$
|
113.9
|
|
100.0
|
%
|
Gross
Margin
|
55.0
|
|
35.8
|
%
|
39.8
|
|
34.9
|
%
|
Total Operating
Expenses
|
29.9
|
|
19.5
|
%
|
26.7
|
|
23.4
|
%
|
Operating
Earnings
|
25.1
|
|
16.3
|
%
|
13.1
|
|
11.5
|
%
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Special
Charges
|
1.0
|
|
0.7
|
%
|
—
|
|
—
|
%
|
Restructuring
|
(2.8)
|
|
(1.8)
|
%
|
0.2
|
|
0.2
|
%
|
Adjusted Operating
Earnings
|
$
|
23.3
|
|
15.2
|
%
|
$
|
13.3
|
|
11.7
|
%
|
|
|
|
|
|
Retail
|
|
|
|
|
Net Sales
|
$
|
134.3
|
|
100.0
|
%
|
$
|
98.6
|
|
100.0
|
%
|
Gross
Margin
|
66.0
|
|
49.1
|
%
|
38.6
|
|
39.1
|
%
|
Total Operating
Expenses
|
36.8
|
|
27.4
|
%
|
42.5
|
|
43.1
|
%
|
Operating Earnings
(Loss)
|
29.2
|
|
21.7
|
%
|
(3.9)
|
|
(4.0)
|
%
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Special
Charges
|
0.1
|
|
0.1
|
%
|
—
|
|
—
|
%
|
Adjusted Operating
(Loss) Earnings
|
$
|
29.3
|
|
21.8
|
%
|
$
|
(3.9)
|
|
(4.0)
|
%
|
|
|
|
|
|
Corporate
|
|
|
|
|
Operating
Loss
|
$
|
(10.7)
|
|
—
|
%
|
$
|
(12.0)
|
|
—
|
%
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Special
Charges
|
0.1
|
|
—
|
%
|
0.4
|
|
—
|
%
|
Adjusted Operating
Loss
|
$
|
(10.6)
|
|
—
|
%
|
$
|
(11.6)
|
|
—
|
%
|
|
|
|
|
|
Herman Miller,
Inc.
|
|
|
|
|
Net Sales
|
$
|
626.8
|
|
100.0
|
%
|
$
|
670.9
|
|
100.0
|
%
|
Gross
Margin
|
250.0
|
|
39.9
|
%
|
246.1
|
|
36.7
|
%
|
Total Operating
Expenses
|
154.6
|
|
24.7
|
%
|
186.0
|
|
27.7
|
%
|
Operating
Earnings
|
95.4
|
|
15.2
|
%
|
60.1
|
|
9.0
|
%
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Special
Charges
|
1.4
|
|
0.2
|
%
|
0.4
|
|
0.1
|
%
|
Restructuring
|
(1.2)
|
|
(0.2)
|
%
|
1.8
|
|
0.3
|
%
|
Adjusted Operating
Earnings
|
$
|
95.6
|
|
15.3
|
%
|
$
|
62.3
|
|
9.3
|
%
|
B. Reconciliation
of Earnings per Share to Adjusted Earnings per Share
|
|
|
Three Months
Ended
|
|
August 29,
2020
|
August 31,
2019
|
Earnings per Share -
Diluted
|
$
|
1.24
|
|
$
|
0.81
|
|
|
|
|
Add: Special charges,
after tax
|
0.01
|
|
0.01
|
|
Add: Restructuring
expenses, after tax
|
(0.01)
|
|
0.02
|
|
Adjusted Earnings
per Share - Diluted
|
$
|
1.24
|
|
$
|
0.84
|
|
|
|
|
Weighted Average
Shares Outstanding (used for Calculating Adjusted Earnings per
Share) – Diluted
|
58,964,268
|
|
59,231,728
|
|
Note: The adjustments
above are net of tax. For the three months ended August 29, 2020
and August 31, 2019, the tax impact of the adjustments were
immaterial.
|
C. Reconciliation
of Gross Margin to Adjusted Gross Margin
|
|
|
Three Months
Ended
|
|
August 29,
2020
|
August 31,
2019
|
Gross
Margin
|
$
|
250.0
|
|
39.9
|
%
|
$
|
246.1
|
|
36.7
|
%
|
Special
Charges
|
1.0
|
|
0.1
|
%
|
—
|
|
—
|
%
|
Adjusted Gross
Margin
|
$
|
251.0
|
|
40.0
|
%
|
$
|
246.1
|
|
36.7
|
%
|
D. Organic Sales
Growth by Segment
|
|
|
Three Months
Ended
|
Three Months
Ended
|
|
August 29,
2020
|
August 31,
2019
|
|
North
America
|
International
|
Retail
|
Total
|
North
America
|
International
|
Retail
|
Total
|
Net Sales, as
reported
|
$
|
338.8
|
|
$
|
153.7
|
|
$
|
134.3
|
|
$
|
626.8
|
|
$
|
458.4
|
|
$
|
113.9
|
|
$
|
98.6
|
|
$
|
670.9
|
|
% change from
PY
|
(26.1)
|
%
|
34.9
|
%
|
36.2
|
%
|
(6.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma
Adjustments
|
|
|
|
|
|
|
|
|
Acquisitions
|
(7.1)
|
|
(39.5)
|
|
—
|
|
(46.6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Currency Translation
Effects (1)
|
0.3
|
|
1.1
|
|
—
|
|
1.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Net Sales,
organic
|
$
|
332.0
|
|
$
|
115.3
|
|
$
|
134.3
|
|
$
|
581.6
|
|
$
|
458.4
|
|
$
|
113.9
|
|
$
|
98.6
|
|
$
|
670.9
|
|
% change from
PY
|
(27.6)
|
%
|
1.2
|
%
|
36.2
|
%
|
(13.3)
|
%
|
|
|
|
|
(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.
|
E. Organic Order
Growth by Segment
|
|
|
Three Months
Ended
|
Three Months
Ended
|
|
August 29,
2020
|
August 31,
2019
|
|
North
America
|
International
|
Retail
|
Total
|
North
America
|
International
|
Retail
|
Total
|
Orders, as
reported
|
$
|
280.8
|
|
$
|
146.9
|
|
$
|
128.3
|
|
$
|
556.0
|
|
$
|
468.2
|
|
$
|
116.7
|
|
$
|
91.8
|
|
$
|
676.7
|
|
% change from
PY
|
(40.0)
|
%
|
25.9
|
%
|
39.8
|
%
|
(17.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma
Adjustments
|
|
|
|
|
|
|
|
|
Acquisitions
|
(4.4)
|
|
(41.6)
|
|
—
|
|
(46.0)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Currency Translation
Effects (1)
|
0.3
|
|
1.1
|
|
—
|
|
1.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Orders,
organic
|
$
|
276.7
|
|
$
|
106.4
|
|
$
|
128.3
|
|
$
|
511.4
|
|
$
|
468.2
|
|
$
|
116.7
|
|
$
|
91.8
|
|
$
|
676.7
|
|
% change from
PY
|
(40.9)
|
%
|
(8.8)
|
%
|
39.8
|
%
|
(24.4)
|
%
|
|
|
|
|
(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
|
F. Design Within
Reach Studio Metrics
|
|
|
Studio
Count
|
Studio Selling
Square Footage
|
|
Three Months
Ended
|
Three Months
Ended
|
|
8/29/20
|
8/31/19
|
8/29/20
|
8/31/19
|
Beginning of
Period
|
35
|
|
36
|
|
382,752
|
|
389,247
|
|
Studio
Openings
|
—
|
|
1
|
|
—
|
|
8,730
|
|
Studio
Closings
|
—
|
|
(2)
|
|
—
|
|
(15,225)
|
|
End of
Period
|
35
|
|
35
|
|
382,752
|
|
382,752
|
|
Comparable Studios,
End of Period*
|
31
|
|
31
|
|
|
|
Non-Comparable
Studios, End of Period
|
4
|
|
4
|
|
|
|
|
Studio Revenue
Metrics
|
|
Three Months
Ended
|
|
8/29/20
|
8/31/19
|
Average Studio Square
Footage
|
382,752
|
|
386,000
|
|
Annualized Net Sales
per Square Foot, All Studios
|
$
|
433
|
|
$
|
482
|
|
DWR Comparable Brand
Sales*
|
(0.7)
|
%
|
3.0
|
%
|
Annualized Net Sales
per Square Foot, Comparable Studios*
|
$
|
438
|
|
$
|
496
|
|
*DWR comparable brand
sales reflect the year-over-year change in net sales across the
multiple channels that DWR serves, including studios, outlets,
contract, catalog, phone and e-commerce. Comparable studios reflect
studios that were fully operational for the applicable current and
prior year periods.
|
|
Note: Retail segment
sales also include sales through e-commerce, outlet store, call
center and wholesale channels.
|
Q&A Webcast
The Company will host a live question
and answer webcast to discuss the results of the first quarter of
fiscal 2021 on Thursday, September 17, 2020, at 9:30AM ET. To ensure your access to the webcast,
you should allow extra time to visit the Company's website at
http://investors.hermanmiller.com/events-and-presentations to
download the streaming software necessary to participate. An online
archive of the presentation will be available on the website later
that day.
About Herman Miller
Herman Miller is a globally
recognized leader in design. Since its inception in 1905, the
company's innovative, problem-solving designs and furnishings have
inspired the best in people wherever they live, work, learn, heal,
and play. In 2018, Herman Miller created Herman Miller Group, a
purposefully selected, complementary family of brands that includes
Colebrook Bosson Saunders, DWR, Geiger, HAY, Maars Living Walls,
Maharam, naughtone, and Nemschoff. Guided by a shared
purpose—design for the good of humankind—Herman Miller Group shapes
places that matter for customers while contributing to a more
equitable and sustainable future for all. For more information
visit www.hermanmiller.com/about-us.
This release 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, our success
in initiatives aimed at achieving long-term profit optimization
goals, 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, changes in future tax
legislation or interpretation of current tax legislation, the
ability to increase prices to absorb the additional costs of raw
materials, changes in global tariff regulations, the financial
strength of our dealers and the financial strength of our
customers, our ability to locate new retail studios, negotiate
favorable lease terms for new and existing locations and implement
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, our ability to
integrate and benefit from acquisitions and investments, the pace
and level of government procurement, the outcome of pending
litigation or governmental audits or investigations, political risk
in the markets we serve, natural disasters, public health crises,
disease outbreaks, 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.
View original
content:http://www.prnewswire.com/news-releases/herman-miller-reports-first-quarter-fiscal-2021-results-301132636.html
SOURCE Herman Miller, Inc.