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: March 27, 2017
(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 7.01 Regulation FD Disclosure
The Company will be hosting an investor event in New York on Monday, March 27, 2017 beginning at 9:15 a.m. ET. The presentation materials are attached as Exhibit 99.1 and will also be available on the investor relations page of the Company’s corporate website at www.hermanmiller.com.
The information in this Current Report on Form 8-K 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
Exhibit
99.1 Herman Miller, Inc.’s Slide Presentation for the March 27, 2017 New York investor event.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934 the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: | March 27, 2017 | HERMAN MILLER, INC. | ||
(Registrant) | ||||
By: | /s/ Kevin J. Veltman Kevin J. Veltman | |||
Vice President of Investor Relations & Treasurer (Duly Authorized Signatory for Registrant) | ||||
Delivering Growth
by Design
NASDAQ: MLHR
Investor Event at
New York Flagship
March 27, 2017
2
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, the mix
of our products purchased by 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.
Forward looking statements
3
Our Strategic Intent
Expand Addressable Market Build Multi-Channel Capability
4
Our Goals
*Measured as interest, dividends and share repurchase as a % of EBITDA on a trailing 3-year basis
30 35%
OF EBITDA
2 2.5x
THE RATE OF SALES GROWTH
3 6%TO
TO
TO
ORGANIC SALES GROWTH
OPERATING INCOME GROWTH
CASH RETURNS TO INVESTORS*
5
Areas of Focus
REALIZE
LIVING OFFICE
SCALE
CONSUMER
LEVERAGE DEALER
ECO-SYSTEM
DELIVER
INNOVATION
DRIVE COST
SAVINGS
6
Accelerating Strategic Execution
BRIAN WALKER
CEO
Joined 1989
JEREMY HOCKING
EVP, Strategy and Business Development
Joined 1984
JOHN EDELMAN
CEO, Herman Miller Consumer
Joined 2014
JEFF STUTZ
Chief Financial Officer
Joined 2001
GREG BYLSMA
President, North America Contract
Joined 2000
BEN WATSON
Chief Creative Officer
Joined 2010
ANDY LOCK
President, International
Joined 1990
KEVIN VELTMAN
VP, Investor Relations and Treasurer
Joined 2014
STEVE GANE
President, Specialty Brands
Joined 2007
7
North America Contract
Greg Bylsma
President, North America Contract
8
Design, manufacture and sale of furniture for office,
healthcare and education environments in US and Canada
OFFICE HEALTHCARE EDUCATION
North America Contract
9
Financial Metrics
North America Contract
NORTH AMERICA CONTRACT
$1,332M
5 YEAR REVENUE GROWTHFY16 REVENUE
FY16 ADJ.
EBITDA MARGIN
+
2%
(GAAP)
+
4%
(organic)
13.5% 59%
10
DEALER ECO-SYSTEM
North America Contract | Key Initiatives
11
SALES LEVERAGE
North America Contract | Key Initiatives
12
LIVING OFFICE 2.0
North America Contract | Key Initiatives
13
AUTOMATION
North America Contract | Key Initiatives
14
Consumer
John Edelman
CEO, Herman Miller Consumer
15
DESIGN WITHIN REACH | CAMBRIDGE, MA STUDIO HERMAN MILLER FLAGSHIP | NEW YORK CITY
Sale of modern design furnishings and accessories in North America through
brick and mortar studios, contract, eCommerce, catalog and wholesale channels
Consumer
16
CATALOG & ECOMMERCE
Consumer
17
Financial Metrics
Consumer
CONSUMER
$289M
5 YEAR REVENUE GROWTH
+
39%
(GAAP)
+
12%
(organic)
5.8%
FY16 ADJ.
EBITDA MARGIN
13%
FY16 REVENUE
18
REAL ESTATE TRANSFORMATION
Consumer | Key Initiatives
19
PROPRIETARY PRODUCT MIX
Consumer | Key Initiatives
20
DWR CONTRACT
Consumer | Key Initiatives
21
LOGISTICS OPTIMIZATION
Consumer | Key Initiatives
22
MOBILE / ONLINE EXPANSION
Consumer | Key Initiatives
23
ELA Furniture Solutions
Andy Lock
President, International
24
Design, manufacture and sale of furniture primarily for office
settings in EMEA, Latin America and Asia-Pacific
Financial Metrics
ELA Furniture Solutions
ELA FURNITURE SOLUTIONS
$413M
FY16 ADJ.
EBITDA MARGIN
9.1%
5 YEAR
REVENUE GROWTH
+7% 18%
FY16 REVENUE
25
PORTALMILL FACTORY | MELKSHAM, UK
ELA Furniture Solutions
26ELA Furniture Solutions
POSH FACTORY | DONGGUAN, CHINA
27ELA Furniture Solutions
BIDADI FACTORY | BANGALORE, INDIA
28ELA Furniture Solutions | Key Initiatives
DEALER SHARE | REGIONAL R&D
29
DEALER SHARE | COLLABORATIVE FURNITURE
ELA Furniture Solutions | Key Initiatives
30
INTERNATIONAL CONSUMER EXPANSION
ELA Furniture Solutions | Key Initiatives
31
Specialty Brands
Steve Gane
President, Specialty Brands
32
Design, manufacture and sale of high-craft furniture and
textiles focused on architect and design specifiers
GEIGER HERMAN MILLER COLLECTION MAHARAM
Specialty Brands
33
10%
33
Financial Metrics
Specialty Brands
5 YEAR REVENUE GROWTH
+
24%
(GAAP)
+
9%
(organic)
10.3%
FY16 ADJ.
EBITDA MARGINFY16 REVENUE
SPECIALTY BRANDS
$232M
34Specialty Brands | Key Initiatives
INNOVATIVE AND ROBUST PRODUCT DEVELOPMENT
35
Maharam Category Expansion
RESIDENTIAL RUGS LEATHER
Specialty Brands | Key Initiatives
36Specialty Brands | Key Initiatives
AUTOMATION AND LEAN ENTERPRISE
37Specialty Brands | Key Initiatives
ARCHITECT AND DESIGNER EXPERIENCE
38
Dealer Eco-System
Jeremy Hocking
EVP – Strategy and Business Development
39
EVOLVING FLOORPLATE
Dealer Eco-System
40
CREATED LIVING OFFICE FRAMEWORK
Dealer Eco-System
41
DEVELOPED RELEVANT NEW PRODUCTS
Dealer Eco-System
42
ACQUIRED INDUSTRY LEADING BRANDS
Dealer Eco-System
THE HERMAN MILLER GROUP
43
DIGITAL ECO-SYSTEM
Dealer Eco-System | Key Initiatives
44
DEALER EXCELLENCE PROGRAM
Dealer Eco-System | Key Initiatives
45
Innovation
Ben Watson
Chief Creative Officer
46
GLOBAL FAMILY OF BRANDS
Innovation
47
Global Product Creation Excellence
Innovation
48
Pipeline of Paradigm-Setting Products
Innovation
49
NEXT GENERATION OF LIVING OFFICE
Innovation
50
Outlook
Jeff Stutz
Chief Financial Officer
51
Organic revenue growth of 5% at a premium
to North America Contract industry growth of 2.8%,
and robust EBITDA growth over last 5 years
Compelling Financial Outlook
FY11 FY12 FY13 FY14 FY15 FY16
$1.9B
$2.1B
$1.8B$1.7B$1.6B
FY11 FY12 FY13 FY14 FY15 FY16
$206M $235M$182M$180M$165M
Revenue Adjusted EBITDA(1)
(1) Represents a non-GAAP measure; see Appendix for reconciliation
9%
CAGR
$2.3B
$259M
7%
CAGR
Opportunity for continued above-average revenue
performance over the next three to five years
Compelling Financial Outlook
Market Growth 1-3%
New Products and Initiatives 1-1.5%
Consumer Growth 1-1.5%
Estimated Annual Organic Revenue Growth 3-6%
Plus Targeted Acquisitions
Revenue
52
Compelling Financial Outlook 53
Cost Savings Initiatives
OPERATING
MARGIN OF:
$25 TO $35M
(BY FY20)
BUSINESS UNIT
SYNERGIES
LOGISTICS
OPTIMIZATION
FACILITIES
CONSOLIDATION
GENERAL COST
RATIONALIZATION
> 10%
OF SALES
(BY FY20)
54Compelling Financial Outlook
Capital Deployment Priorities
INTERNAL GROWTH INVESTMENTS
TARGETED ACQUISITIONS
DIVIDEND
SHARE REPURCHASE
55
Areas of Focus
56
Q&A
57
Appendix
58
This presentation contains Organic Sales Growth,
Adjusted EBITDA, Adjusted EBITDA ratios, Adjusted
Operating Earnings, and Adjusted Earnings Per Share,
all of which constitute non-GAAP financial measures.
Each of these financial measures is calculated by
excluding items the Company believes are not
indicative of its ongoing operating performance.
The Company presents these non-GAAP financial
measures because it considers them to be important
supplemental indicators of financial performance and
believes them to be useful in analyzing ongoing results
from operations.
These non-GAAP financial measures are not measures
of financial performance under GAAP and should not
be considered alternatives to GAAP. Non-GAAP financial
measures have limitations as analytical tools and should not
be considered in isolation or as a substitute for analysis of
the Company’s results as reported under GAAP. In addition,
you should be aware that in the future the Company may
incur expenses similar to the adjustments presented.
Appendix –Reconciliation of Non-GAAP Measures
59Appendix –Reconciliation of Non-GAAP Measures
Organic Sales Growth (Decline) by Reportable Segment ($ Millions); (unaudited)
Sales, as reported
Performance Adjustments
Dealer Divestitures
Cumulative foreign exchange
Acquisition-base year
Sales, pro forma
Compound Annual Growth Rate, as reported
Compound Annual Growth Rate, pro forma
$ 1,224.8
(99.6)
-
$ 1,125.2
$ 1,649.2
(99.6)
-
(13.0)
$ 1,536.6
$ 290.4
(13.0)
$ 277.4
$ 80.2
$ 80.2
$ 53.8
$ 53.8
$ 1,331.8
-
20.5
-
$ 1,352.3
1.7%
3.7%
$ 2,264.9
-
58.6
(366.2)
$ 1,957.3
6.6%
5.0%
$ 412.6
35.9
(64.4)
$ 384.1
7.3%
6.7%
$ 231.8
1.0
(107.5)
$ 125.3
23.6%
9.3%
$ 288.7
1.2
(194.3)
$ 95.6
39.9%
12.2%
North America ELA Specialty Consumer Total
2011 2011 2011 2011 20112016 2016 2016 2016 2016
60Appendix –Herman Miller Inc. Reconciliation of Non-GAAP Measures
Adjusted EBITDA by Reportable Segment ($ Millions) (unaudited)
Segment Operating Earnings
Add: Allocated Depreciation & Amortization
Add: Restructuring/Impairment Expenses
Adjusted EBITDA
Revenue by Segment
Adjusted EBITDA Margin
Segment Operating Earnings
Add: Allocated Depreciation & Amortization
Add: Acquisition-related Adjustments
Add: Legacy Pension Expenses
Add: Restructuring/Impairment Expenses
Less: POSH Contingent Consideration Reduction
Adjusted EBITDA
Revenue by Segment
Adjusted EBITDA Margin
Segment Operating Earnings
Add: Allocated Depreciation & Amortization
Add: Acquisition-related Adjustments
Add: Restructuring/Impairment Expenses
Less: Nonrecurring gains
Less: Other, net
Adjusted EBITDA
Revenue by Segment
Adjusted EBITDA Margin
$ 99.5
30.1
-
$ 129.6
$ 1,224.8
10.6%
$ 76.6
28.0
-
26.5
-
-
$ 131.1
$ 1,221.9
10.7%
$ 125.2
26.5
-
-
-
-
$ 151.7
$ 1,241.9
12.2%
$ 18.7
5.9
-
$ 24.6
$ 290.4
8.5%
$ 24.7
6.6
-
-
-
-
$ 31.3
$ 377.3
8.3%
$ 25.9
8.2
-
-
-
-
$ 34.1
$ 409.9
8.3%
$ (1.3)
2.3
-
$ 1.0
$ 80.2
1.3%
$ 1.8
2.4
-
1.7
-
-
$ 5.9
$ 111.7
5.3%
$ 13.5
7.4
-
--
-
$ 20.9
$ 219.9
9.5%
$ 12.1
0.8
-
$ 12.9
$ 53.8
23.9%
$ 13.6
0.6
-
-
-
-
$ 14.2
$ 64.0
22.2%
$ 14.7
7.3
7.8
-
-
-
$ 29.8
$ 270.5
11.0%
$ (5.7)
-
3.0
$ (2.7)
$ -
0.0%
$ (1.8)
-
-
-
1.2
-
$ (0.6)
$ -
0.0%
$ (15.9)
0.4
2.2
12.7
-
(0.7)
$ (1.3)
$ -
0.0%
$ 123.3
39.1
3.0
$ 165.4
$ 1,649.2
10.0%
$ 114.9
37.6
-
28.2
1.2
-
$ 181.9
$ 1,774.9
10.2%
$ 163.4
49.8
10.0
12.7
-
(0.7)
$ 235.2
$ 2,142.2
11.0%
$ 96.9
28.7
-
$ 125.6
$ 1,218.5
10.3%
$ (27.0)
26.8
-
147.0
-
-
$ 146.8
$ 1,216.3
12.1%
$152.0
27.9
-
-
-
-
$179.9
$1,331.8
13.5%
$ 32.1
5.7
-
$ 37.8
$ 347.3
10.9%
$ (23.1)
7.6
-
-
-
(2.6)
$ 28.1
$ 392.2
7.2%
$35.3
8.5
-
-
(6.1)
-
$37.7
$412.6
9.1%
$ 1.1
2.2
-
$3.3
$ 94.1
3.5%
$ (5.3)
6.8
1.4
12.2
-
-
$ 15.1
$ 205.8
7.3%
$16.4
7.4
-
-
-
-
$23.8
$231.8
10.3%
$ 14.1
0.7
-
$ 14.8
$ 64.2
23.1%
$ 9.9
1.2
-
5.2
-
-
$ 16.3
$ 67.7
24.1%
$8.1
8.6
-
-
-
-
$16.7
$288.7
5.8%
$ (6.6)
-
5.4
$ (1.2)
$ -
0.0%
$ (26.4)
-
-
-
26.5
-
$ 0.1
$ -
0.0%
$(0.3)
0.6
-
-
-
0.5
$0.8
$-
0.0%
$ 137.6
37.3
5.4
$ 180.3
$ 1,724.1
10.5%
$ (25.7)
42.4
1.4
164.4
26.5
(2.6)
$ 206.4
$ 1,882.0
11.0%
$211.5
53.0
-
-
(6.1)
0.5
$258.9
$2,264.9
11.4%
NA NAELA ELASpecialty Specialty
2011 Actual 2012 Actual
2013 Actual 2014 Actual
2015 Actual
Consumer ConsumerCorporate CorporateConsol. Consol.
2016 Actual
