1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
- --- OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 1, 1997 Commission File No. 0-5813
HERMAN MILLER, INC.
A Michigan Corporation ID No. 38-0837640
855 Main Avenue, PO Box 302, Zeeland, MI 49464-0302 Phone (616) 654 3000
Herman Miller, Inc.
(1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12
months
Yes X No
--- ---
(2) has been subject to such filing requirements for the past 90
days.
Yes X No
--- ---
Common Stock Outstanding at March 21, 1997-- 23,632,460 shares.
---------------
The Exhibit Index appears at page 18.
-1-
2
HERMAN MILLER, INC. FORM 10-Q
FOR THE QUARTER ENDED MARCH 1, 1997
INDEX
Page No.
Part I--Financial Information
Condensed Consolidated Balance Sheets--
March 1, 1997, and June 1,1996 3
Condensed Consolidated Statements of Income --
Three Months and Nine Months Ended March 1, 1997,
and March 2, 1996 4
Condensed Consolidated Statements of Cash Flows--
Nine Months Ended March 1, 1997,
and March 2, 1996 5
Notes to Condensed Consolidated Financial Statements 6-10
Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-14
Part II--Other Information
Exhibits and Reports on Form 8-K 15
Signatures 16
Exhibit Index 17
-2-
3
HERMAN MILLER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
March 1, June 1,
1997 1996
----------- --------
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $140,122 $ 57,053
Accounts receivable, net 158,844 170,116
Inventories--
Finished goods 22,901 24,787
Work in process 9,785 10,896
Raw materials 26,230 30,047
-------- --------
Total inventories 58,916 65,730
-------- --------
Prepaid expenses and current
deferred income taxes 42,223 42,006
-------- --------
Total current assets 400,105 334,905
-------- --------
PROPERTY AND EQUIPMENT, AT COST 553,415 536,108
Less-accumulated depreciation 286,296 267,343
-------- --------
Net property and equipment 267,119 268,765
-------- --------
OTHER ASSETS:
Notes receivable, net 37,200 39,212
Other noncurrent assets 47,232 52,029
-------- --------
Total assets $751,656 $694,911
======== ========
March 1, June 1,
1997 1996
----------- --------
(unaudited) (audited)
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Unfunded checks $ 19,024 $ 2,867
Current portion of long-term debt 163 317
Notes payable 21,992 21,148
Accounts payable 62,688 59,208
Accruals 170,656 135,487
-------- --------
Total current liabilities 274,523 219,027
-------- --------
LONG-TERM DEBT, less current portion 110,141 110,245
OTHER LIABILITIES 57,096 57,494
SHAREHOLDERS' EQUITY:
Common stock $.20 par value 4,726 4,934
Additional paid-in capital -- 14,468
Retained earnings 317,373 303,578
Cumulative translation adjustment (10,130) (11,633)
Key executive stock programs (2,073) (3,202)
-------- --------
Total shareholders' equity 309,896 308,145
-------- --------
Total liabilities and
shareholders' equity $751,656 $694,911
======== ========
See accompanying notes to condensed consolidated financial statements.
-3-
4
HERMAN MILLER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Nine Months Ended
-------------------- ---------------------
March 1, March 2, March 1, March 2,
1997 1996 1997 1996
--------- --------- ---------- ---------
NET SALES $365,060 $312,915 $1,084,681 $942,396
COST AND EXPENSES:
Cost of goods sold 233,127 209,500 700,176 623,449
Operating expenses 96,271 83,401 284,883 252,740
International restructuring charges (1) (2) 13,736 -- 19,236 --
Patent litigation settlements (3) -- -- -- 16,515
Interest expense 2,017 1,841 6,227 5,531
Other (income) expense, net (1,426) (472) (2,474) (1,908)
-------- -------- ---------- --------
343,725 294,270 1,008,048 896,327
-------- -------- ---------- --------
INCOME BEFORE TAXES ON INCOME 21,335 18,645 76,633 46,069
PROVISION FOR TAXES ON INCOME 7,800 6,745 29,660 17,200
-------- -------- ---------- --------
NET INCOME $ 13,535 $ 11,900 $ 46,973 $ 28,869
======== ======== ========== ========
NET INCOME PER SHARE $ .56 $ .47 $ 1.95 $ 1.15
======== ======== ========== ========
DIVIDENDS PER SHARE OF COMMON STOCK $ .13 $ .13 $ .39 $ .39
======== ======== ========== ========
See accompanying notes to condensed consolidated financial statements.
(1) Restructuring charges were taken in the third quarter ended March 1,
1997, in connection with our German subsidiary. These charges had the
effect of reducing net income by $5.4 million and earnings per share by
$.23.
(2) Intangible assets of our German subsidiary were written off in the
second quarter ended November 30, 1996. This write-off had the effect of
reducing net income by $4.5 million and earnings per share by $.19.
(3) Litigation settlement charges were taken in the second quarter ended
December 2, 1995. These charges had the effect of reducing net income by
$10.6 million and earnings per share by $.42.
-4-
5
HERMAN MILLER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Nine Months Ended
--------------------
March 1, March 2,
1997 1996
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 46,973 $ 28,869
Depreciation and amortization 35,848 34,121
Restructuring charges 19,236 --
Changes in current assets and liabilities 62,101 15,585
Other, net 7,968 8,081
-------- --------
Net cash provided by operating activities 172,126 86,656
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Notes receivable repayments 329,599 350,216
Notes receivable issued (328,979) (349,285)
Capital expenditures (44,041) (42,323)
Other, net (701) 363
-------- --------
Net cash used for investing activities (44,122) (41,029)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net long-term debt borrowings (repayments) (258) 13,287
Net short-term debt borrowings (repayments) 2,719 (51,000)
Dividends paid (9,389) (9,734)
Net common stock issued 6,926 9,542
Common stock purchased and retired (45,139) (4,493)
Other, net -- (138)
-------- --------
Net cash used for financing activities (45,141) (42,536)
-------- --------
EFFECT OF EXCHANGE RATE
CHANGES ON CASH 206 (881)
-------- --------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 83,069 2,210
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 57,053 16,488
-------- --------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $140,122 $ 18,698
======== ========
See accompanying notes to condensed consolidated financial statements.
-5-
6
HERMAN MILLER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOOTNOTE DISCLOSURES
The condensed consolidated financial statements have been prepared by the
company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The company believes that the disclosures made in this document
are adequate to make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the company's Annual Report
on Form 10-K for the year ended June 1, 1996.
During February 1997 the Financial Accounting Standards Board issued statements
of Financial Accounting Standards (FAS) Nos. 128 and 129, "Earnings Per Share"
and "Disclosure of Information about Capital Structure." Both standards are
effective for periods ending after December 15, 1997. The company will adopt
these standards in its third quarter of fiscal 1998. Following the guidance in
FAS No. 128, basic earnings per share for the three months ended March 1, 1997,
and March 2, 1996, would be $.57 and $.47, respectively, and $1.97 and $1.15
for the nine-month period.
FISCAL YEAR
The company's fiscal year ends on the Saturday closest to May 31. Accordingly,
the years ended June 1, 1996, and May 31, 1997, contain 52 weeks.
DOMESTIC RESTRUCTURING CHARGES
In the fiscal year ended June 3, 1995, the company recorded $31.9 million in
pretax restructuring charges, which reduced net income by $20.3 million, or
$.82 per share. A charge of $15.5 million was taken in the second quarter of
fiscal 1995, to account for the closure of certain of the company's
manufacturing and logistics facilities prior to the relocation of their
production activities to other U.S. Herman Miller facilities. In addition, the
charge also included the costs associated with the closure of and
discontinuance of wood casegoods manufacturing in the Sanford, North Carolina,
facility and the transfer of products produced there to Geiger International of
Atlanta, Georgia, a respected contract provider of quality wood casegoods.
The $16.4 million charge recorded in the fourth quarter of fiscal 1995 included
charges in the United States for reductions in employment and the
discontinuation of a product development program at the company's healthcare
subsidiary, Milcare.
-6-
7
The $31.9 million total pretax restructuring charge consisted of facilities and
equipment write-offs ($15.5 million), termination benefits ($14.1 million), and
other exit costs associated with the restructuring ($2.3 million).
Approximately 535 employees were terminated or took voluntary early retirement
as a result of the facility closings and job elimination process. The closure
of the manufacturing and logistics facilities was substantially complete at the
end of fiscal 1995. The job elimination process was completed in July 1995.
Amounts paid or charged against these reserves during the first nine months of
fiscal 1997 were as follows:
June 1, 1996 Costs Paid Ending
In Thousands Balance or Charged Balance
------------ ---------- -------
Facilities and equipment $5,330 $2,520 $2,810
Termination benefits 1,885 918 967
Other exit costs 278 198 80
------ ------ ------
$7,493 $3,636 $3,857
====== ====== ======
INTERNATIONAL RESTRUCTURING CHARGES
During the second quarter, declining sales and continuing losses at the
company's German subsidiary led management, according to the company's
accounting policies, to reevaluate the realizability of the subsidiary's
intangible assets. At that time, the intangible assets of the subsidiary were
determined to be impaired after comparing the undiscounted projected future
cash flows of the subsidiary to the carrying value of the intangible assets of
that subsidiary. The projected future cash flows were estimated based on
historical earnings, market conditions, and assumptions reflected in internal
operating plans and strategies. The carrying value of these intangible assets
were then measured against their fair value using the undiscounted cash flow
methodology. As a result, a pretax charge of $5.5 million was recorded for the
write-off of the goodwill and brand name assets of the subsidiary.
During the third quarter of fiscal 1997, management authorized and
committed the company to a plan to restructure the manufacturing component of
its German operations. The plan involves closing the manufacturing facility in
Germany and is expected to be completed in fiscal 1998. The company recorded a
pretax restructuring charge of $13.7 million ($5.4 million, or $.23 per share
after tax) in the third quarter of fiscal 1997. Of the $13.7 million
restructuring charge, approximately $6.7 million related to severance and
benefits for approximately 70 terminated employees, $3.9 million reflected the
assets being written down to liquidation value and $3.1 million related to
other exit costs. As of March 1, 1997, no costs have been charged against these
restructuring reserves.
-7-
8
SHAREHOLDER EQUITY
On March 18, 1997, the Board of Directors approved a 2-for-1 stock split
effected in the form of a dividend to shareholders of record on March 31, 1997.
The stock split is payable on April 15, 1997. The three- and nine-month
results were $.28 and $.97, respectively, after considering the stock split.
The Board of Directors also approved an increase in the cash dividend from
$.065 to $.0725 per share for shareholders of record on May 31, 1997, after
considering the stock split.
SUPPLEMENTAL CASH FLOW INFORMATION
Cash and cash equivalents include all highly liquid debt instruments purchased
as part of the company's cash management function. Due to the short maturities
of these items, the carrying amount approximates fair value.
Cash payments for income taxes and interest (in thousands) were as follows:
Nine Months Ended
------------------
March 1, March 2,
1997 1996
-------- --------
Interest paid $ 8,287 $ 5,615
Income taxes paid $42,199 $11,589
CONTINGENCIES
On January 7, 1992, Haworth, Inc. ("Haworth") filed a lawsuit against the
company, alleging that the electrical systems used in the creation of the
company's products infringed one or more of Haworth's patents. The lawsuit
against the company followed a lawsuit filed by Haworth in 1985 against
Steelcase, Inc., the industry's leader in market share, alleging violation of
the same two patents. In 1989, Steelcase was held to infringe the patents and
the matter was returned to private dispute resolution. The patents at issue
expired prior to December 1, 1994.
During the second quarter ended December 2, 1995, the company's Board of
Directors authorized management to engage in settlement discussions with
Haworth. In January 1996, the company and Haworth agreed to terms of a
settlement. The company continues to believe, based upon written opinion of
counsel, that its products do not infringe Haworth's patents and the company
would, more likely than not, have prevailed on the merits. However, based on
the mounting legal costs, distraction of management focus, and the uncertainty
present in any litigation, we concluded settlement was in the best interest of
our shareholders. The settlement included a one-time cash payment of $44.0
-8-
9
million in exchange for a complete release. The companies also exchanged
limited covenants not to sue with respect to certain existing and potential
patent designs.
The company simultaneously reached a settlement with one of its suppliers. The
supplier agreed to pay the company $11.0 million and, over the next seven
years, to rebate a percentage of its sales to Herman Miller which are in excess
of current levels.
The company recorded a net litigation settlement expense of $16.5 million after
applying previously recorded reserves and the settlement with the supplier.
The company, for a number of years, has sold various products to the United
States Government under General Services Administration (GSA) multiple award
schedule contracts. The GSA is permitted to audit the company's compliance with
the GSA contracts. As a result of its audits, the GSA has asserted a refund
claim under the 1982 contract for approximately $2.7 million and has other
contracts under audit review. Management has been notified that the GSA has
referred the 1988 contract to the Justice Department for consideration of a
potential civil False Claims Act case. Management disputes the audit result for
the 1982 contract and does not expect resolution of that matter to have a
material adverse effect on the company's consolidated financial statements.
Management does not have information which would indicate a substantive basis
for a civil False Claims Act under the 1988 contract.
The company is not aware of any other litigation or threatened litigation which
would have a material impact on the company's financial statements.
-9-
10
REPORT OF MANAGEMENT
In the opinion of the company, the accompanying unaudited condensed
consolidated financial statements taken as a whole contain all adjustments,
consisting of only a normal and recurring nature, necessary to present fairly
the financial position of the company as of March 1, 1997, and the results of
its operations and cash flows for the nine months then ended. Interim results
are not necessarily indicative of results for a full year.
-10-
11
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the company's financial condition and earnings
during the periods included in the accompanying condensed consolidated
financial statements.
A. Financial Summary
A summary of the period-to-period changes is shown below. It should be noted
that the nine months ended March 1, 1997, contained 39 weeks. All amounts are
increases (decreases) unless otherwise noted. Dollars are shown in
thousands.
Three Months Nine Months
---------------- -----------------
$ % $ %
------ -------- -------- -------
NET SALES 52,145 16.7% 142,285 15.1%
COST OF GOODS SOLD 23,627 11.3% 76,727 12.3%
OPERATING EXPENSES 12,870 15.4% 32,143 12.7%
RESTRUCTURING CHARGES 13,736 100% 19,236 100%
PATENT LITIGATION SETTLEMENTS -- -- (16,515) (100%)
INTEREST EXPENSE 176 9.6% 696 12.6%
OTHER INCOME* (954) (202.1%) (566) (29.7%)
INCOME BEFORE TAXES ON INCOME 2,690 14.4% 30,564 66.3%
PROVISION FOR TAXES ON INCOME 1,055 15.6% 12,460 72.4%
NET INCOME 1,635 13.7% 18,104 62.7%
*Represents an increase in other income.
-11-
12
B. Results of Operations
Third Quarter FY 1997 versus Third Quarter FY 1996
Net sales increased $52.1 million, or 16.7 percent, to a third quarter
record of $365.1 million for the three months ended March 1, 1997,
compared to $312.9 million a year ago. Net sales of $1,084.7 million were
recorded for the first nine months of fiscal 1997 compared with net sales
of $942.4 million in the same period of last year. The increase
primarily was due to strong demand for our products in both domestic and
international markets and acquisitions during the past year.
United States net sales were up 16.8 percent, or 13.8 percent excluding
the impact of acquisitions for the nine months ended March 1, 1997,
compared with the prior year. The Business and Institute Furniture
Manufacturers Association (BIFMA) estimates the U.S. market grew
approximately 8.8 percent for the period from June 1996 to January
1997. The company has experienced double-digit growth at HMNA, Meridian,
and Miller SQA during the nine-month period.
Net sales of international operations and export sales from the United
States totaled $175.3 million for the nine months ended March 1, 1997,
compared with $163.9 million last year. The increase was primarily due to
strong growth in the United Kingdom and Canada.
New orders increased 30.1 percent, to $358.6 million for the third
quarter and were the highest ever recorded in a third quarter. The
backlog of unfilled orders at March 1, 1997, was $200.2 million, compared
with $159.8 million a year earlier, and $156.6 million at June 1, 1996.
Gross margin increased to 36.1 percent during the third quarter of 1997,
compared to a gross margin of 33.0 percent in the third quarter of 1996.
This reflects improved leveraging of overhead and lower overhead spending
levels in our domestic operations, along with a realized price increase
at Meridian.
Operating expenses as a percent of sales decreased to 26.4
percent, excluding the restructure charges, compared with 26.7 percent in
the third quarter of last year. Total operating expenses increased $12.9
million from $83.4 million in the third quarter of last year to $96.3
million, excluding the restructuring charges. The increase in operating
expenses is attributable to acquisitions and new ventures, a 4.0 percent
year-over-year increase in compensation and benefits, and variable
compensation plans.
Interest expense increased $.2 million over third quarter fiscal 1996.
Total interest-bearing debt was $132.3 million at the end of the third
quarter of fiscal 1997, compared with $131.7 million at June 1, 1996, and
$107.3 million at March 2, 1996.
-12-
13
The effective tax rate for the nine-month period was 38.7 percent compared with
37.3 percent in the same period of last year. The higher rate reflects the tax
law change which reduced the benefit of the Corporate Owned Life Insurance
Program. During the third quarter, the company recorded a provision for the
potential cost of unwinding this program. The effective tax rate was
positively impacted by the German restructuring. Excluding this charge, the
effective tax rate for the three- and nine-month periods would have been 45.9
percent and 40.6 percent, respectively.
In aggregate, the profitability of our international operations and exports
from the United States has improved significantly over the past nine months.
However, we have continued to lose money in some markets. A primary objective of
the company in fiscal 1997 is to assess the competitive position of all
international operations and to develop a plan for improved performance.
During the first three quarters of fiscal 1997, our efforts were focused on our
operations in Mexico and Germany.
The company's Mexican operations have continued to experience losses in fiscal
1997; however, operational improvements, implemented in the fourth
quarter of fiscal 1996 and first quarter of fiscal 1997, have reduced the
losses and resulted in positive cash flows for the nine-month period ended
March 1, 1997. The devaluation of the peso since December 1994 has resulted in
the Mexican economy being declared highly inflationary. Beginning in the fourth
quarter of fiscal 1997, the company will account for our Mexican operations in
accordance with the highly inflationary provisions of FAS No. 52, "Foreign
Currency Translation." The company does not expect this change will have a
material effect on its financial statements.
The very difficult economic climate in Germany and an oversupply of office
furniture manufacturers has resulted in intense competition. These macro
factors, coupled with the relatively weak position of our General brand name,
has led to decreasing unit volumes and prices resulting in net operating losses.
During the second quarter of fiscal 1997, the management team began to
develop and analyze options for improving the company's operating results in
Germany. At the end of the second quarter, none of the options were developed
to the extent required to enable management to reach a decision and plan for
implementation. In accordance with the Company's accounting policies, we
reevaluated the realizability of the subsidiary's intangible assets subject to
each of the options under consideration. In all cases, the intangible assets
were determined to be impaired after comparing the undiscounted projected cash
flows of the subsidiary to the carrying value of the intangible assets of the
subsidiary. The intangible write-off resulted in a pretax charge of $5.5
million and an after-tax impact of $4.5 million, or $.19 per share.
After additional review in the third quarter, management concluded it was in
the best interest of all of its shareholders to elect the option of
discontinuing its manufacturing operations in Germany and, thus, authorized
and committed the company to this plan. At the conclusion of this action,
Herman Miller will maintain a small team to continue to serve existing
multinational client base in Germany, Eastern Europe, and the Netherlands. This
team will focus on the sale of Herman Miller brand products manufactured in the
United States, United Kingdom, and Italy. Management expects the new structure
to be operational at the end of the fourth quarter. While this action will have
a negative impact on international sales, management believes after-tax profits
will improve approximately $2-$3 million annually. The $13.7 million pretax
write-off recorded in the third quarter included provisions to write net assets
down to their net realizable value, the cost of employee severance and other
exit costs.
-13-
14
Management has engaged a consulting firm to assist in determining whether
the manufacturing operations in Germany could be transferred to another
owner or if a complete liquidation is the most viable option. Management
believes based on current information that a complete liquidation is most
likely. In either scenario, the after-tax restructuring charge recorded
in the third quarter of $5.4 million or $.23 per share should provide for
the loss on disposal.
The company's Italian operations have also continued to experience
losses. Although, management is encouraged by recent commercial successes
in Continental Europe which were made possible by the capabilities of the
Italian operation, they believe acceptable profitability will only be
possible if sales growth is combined with operational improvements.
During the fourth quarter a stringent review of the operational costs and
processes of the company's Italian operation will be undertaken.
Net loss from the company's international operations and export sales
from the United States for the nine months ended March 1, 1997, increased
$4.9 million to a $11.4 million loss, compared with net loss of $6.5
million for the same period last year. As discussed above, the current
year loss includes $9.9 million from the German restructuring and
intangible write-offs.
C. Financial Condition, Liquidity, and Capital Resources
Third Quarter FY 1997 versus Third Quarter FY 1996
1. Cash flow from operating activities increased to $172.1
million for the nine months ended March 1, 1997, versus a use of
$86.7 million in the same period a year ago. The $85.4 million
increase in cash provided by operating activities was due to the
improved profitability and a reduction in cash used for working
capital items.
2. Days sales in accounts receivable plus days sales in
inventory decreased to 62.3 days versus 79.2 days on March 2, 1996,
and 75.6 days on June 1, 1996.
3. Total interest-bearing debt decreased to $132.3 million
compared to $131.7 million at June 1, 1996. Debt-to-total capital
now stands at 29.9 percent. We expect total interest-bearing debt to
be in the range of $125 to $145 for the remainder of the year with a
debt-to-total-capital ratio of between 30 and 35 percent.
4. Capital expenditures for the first nine months were $40.3
million versus $42.3 million for the first nine months of 1996. The
expenditures were primarily for new facilities at our fastest
growing subsidiaries and new or improved internal processes. Capital
expenditures for the year are expected to be in the range of $60 to
$65 million.
5. The company repurchased 1,253,721 shares of common stock for
$45.1 million during the first nine months of fiscal 1997.
-14-
15
Part II
Item 6: Exhibits and Reports on Form 8-K
1. Exhibits
See Exhibit Index
2. Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended March 1,
1997.
-15-
16
SIGNATURES
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 hereto duly authorized.
HERMAN MILLER, INC.
March 27, 1997 \s\ Michael A. Volkema
-------------------------
Michael A. Volkema
(President and
Chief Executive Officer)
March 27, 1997 \s\ Brian C. Walker
-------------------------
Brian C. Walker
(Chief Financial Officer)
-16-
17
Exhibit Index
(11) Computations of earnings per common share.
(27) Financial Data Schedule (exhibit available upon request).
-17-
1
EXHIBIT 11
HERMAN MILLER, INC.
COMPUTATIONS OF EARNINGS PER COMMON SHARE
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended Nine Months Ended
------------------------ ------------------------------
March 1, March 2, March 1, March 2,
1997 1996 1997 1996(1)
----------- ----------- ----------- -----------
NET INCOME APPLICABLE
TO COMMON SHARES $ 13,535 $ 11,900 $ 46,973(1)(2) $ 28,869(3)
=========== =========== =========== ===========
Weighted Average Common
Shares Outstanding 23,587,882 25,220,460 23,790,447 25,053,721
Net Common Shares
Issuable Upon Exercise
of Certain Stock Options 464,297 175,003 337,451 119,983
----------- ----------- ----------- -----------
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING AS ADJUSTED 24,052,179 25,395,463 24,127,898 25,173,703
=========== =========== =========== ===========
NET INCOME PER SHARE $ .56 $ .47 $ 1.95 $ 1.15
=========== =========== =========== ===========
(1) Restructuring charges were taken in the third quarter ended March 1,
1997, in connection with our German subsidiary. These changes had the
effect of reducing net income by $5.4 million and earnings per share by
$.23.
(2) Intangible assets of our German subsidiary were written-off in the second
quarter ended November 30, 1996. This write-off had the affect of reducing
net income by $4.5 million and earnings per share by $.19.
(3) Litigation settlement charges were taken in the second quarter ended
December 2, 1995. These charges had the effect of reducing net income by
$10.6 million and earnings per share by $.42.
-18-
5
1,000
3-MOS
MAY-31-1997
DEC-01-1996
MAR-01-1997
140,122
0
170,807
11,963
58,916
400,105
553,415
286,296
751,656
274,523
0
0
0
4,726
305,170
751,656
1,084,681
1,084,681
700,176
700,176
298,279
3,366
6,227
76,633
29,660
46,973
0
0
0
46,973
1.95
1.95
