| |
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
Mar. 4, |
|
Feb. 27, |
|
|
|
2000 |
|
1999 |
|
|
|
|
|
|
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income |
|
$ |
100,053 |
|
|
$ |
102,845 |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
61,399 |
|
|
|
46,409 |
|
|
|
|
|
|
|
Changes in current assets and liabilities |
|
|
(38,432 |
) |
|
|
(12,447 |
) |
|
|
|
|
|
|
Other, net |
|
|
4,370 |
|
|
|
3,117 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
127,390 |
|
|
|
139,924 |
|
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
Notes receivable repayments |
|
|
350,201 |
|
|
|
356,590 |
|
|
|
|
|
|
|
Notes receivable issued |
|
|
(356,312 |
) |
|
|
(358,445 |
) |
|
|
|
|
|
|
Capital expenditures |
|
|
(104,925 |
) |
|
|
(76,626 |
) |
|
|
|
|
|
|
Proceeds from sale of fixed assets |
|
|
296 |
|
|
|
28,717 |
|
|
|
|
|
|
|
Net cash paid for acquisitions |
|
|
(5,895 |
) |
|
|
(4,689 |
) |
|
|
|
|
|
|
Other, net |
|
|
(3,802 |
) |
|
|
(22,168 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used for investing activities |
|
|
(120,437 |
) |
|
|
(76,621 |
) |
|
|
|
|
|
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
Net short-term debt borrowings |
|
|
66,777 |
|
|
|
38,903 |
|
|
|
|
|
|
|
Net long-term debt repayments |
|
|
(7,636 |
) |
|
|
(10,084 |
) |
|
|
|
|
|
|
Dividends paid |
|
|
(8,690 |
) |
|
|
(9,355 |
) |
|
|
|
|
|
|
Net common stock issued |
|
|
5,598 |
|
|
|
14,039 |
|
|
|
|
|
|
|
Common stock purchased and retired |
|
|
(62,128 |
) |
|
|
(155,087 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used for financing activities |
|
|
(6,079 |
) |
|
|
(121,584 |
) |
|
|
|
|
|
|
|
|
|
| EFFECT OF EXCHANGE RATE |
|
|
|
|
|
|
CHANGES ON CASH |
|
|
702 |
|
|
|
(1,365 |
) |
|
|
|
|
|
|
|
|
|
| NET INCREASE (DECREASE) IN CASH AND |
|
|
|
|
|
|
CASH EQUIVALENTS |
|
|
1,576 |
|
|
|
(59,646 |
) |
|
|
|
|
|
| CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD |
|
|
79,952 |
|
|
|
115,316 |
|
|
|
|
|
|
|
|
|
|
| CASH AND CASH EQUIVALENTS,
AT END OF PERIOD |
|
$ |
81,528 |
|
|
$ |
55,670 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
5
HERMAN MILLER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The condensed consolidated financial statements have been prepared by the
company, without audit, in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. Management believes that the
disclosures made in this document are adequate to make the information presented
not misleading. Operating results for the nine-month period ended March 4, 2000,
are not necessarily indicative of the results that may be expected for the year
ending June 3, 2000. 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 May 29, 1999.
FISCAL YEAR
The company’s fiscal year ends on the Saturday closest to May 31. The year
ending June 3, 2000 will contain 53 weeks while the fiscal year ended May 29,
1999 contained 52 weeks. The first nine months of fiscal 2000 contained 40 weeks
while the first nine months of fiscal 1999 contained 39 weeks.
ACQUISITIONS
Effective July 30, 1999, the company acquired Geiger Group, Inc. (“Geiger
Brickel”), a manufacturer of high quality wood furnishings for the contract
furniture industry, including casegoods, freestanding furniture, and seating.
The acquisition was completed for $5.0 million in cash and the issuance of
1,312,187 shares of Herman Miller, Inc. stock to Geiger Brickel’s shareholders.
This acquisition was accounted for under the purchase method of accounting. The
excess of the purchase price over the estimated fair market value of net assets
acquired of approximately $24.4 million was recorded as goodwill and is being
amortized on a straight-line basis over 20 years. Additional purchase price may
be paid based on Geiger Brickel’s operating results over the three-year period
ending on July 18, 2002. The operating results of Geiger Brickel have been
included in the consolidated financial statements of the company since the date
of acquisition. If this purchase had been effective May 30, 1999, there would
have been no material effect on the company’s results from operations and
financial condition.
6
COMPREHENSIVE INCOME
Comprehensive income consists of net income and foreign currency translation
adjustments. Comprehensive income was approximately $31.5 million and $28.8
million for the three months ended March 4, 2000, and February 27, 1999,
respectively. During the nine months ended March 4, 2000, and February 27, 1999,
comprehensive income was approximately $100.2 million and $101.6 million,
respectively.
SHAREHOLDER RIGHTS PROTECTION AGREEMENT
On June 30, 1999, the Board of Directors of Herman Miller, Inc. announced the
adoption of a Shareholder Rights Plan and the declaration of a Rights dividend.
See Item 6 (2).
EARNINGS PER SHARE
The following table reconciles the numerators and denominators used in the
calculations of basic and diluted EPS:
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
|
|
|
Mar. 4, |
|
Feb. 27, |
|
Mar. 4, |
|
Feb. 27, |
|
|
2000 |
|
1999 |
|
2000 |
|
1999 |
|
|
|
|
|
|
|
|
|
| Numerators: |
|
|
|
|
|
| Numerator for both basic and diluted
EPS, net income (in thousands) |
|
$ |
31,837 |
|
|
$ |
29,927 |
|
|
$ |
100,053 |
|
|
$ |
102,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Denominators: |
|
|
|
|
|
| Denominator for basic EPS, weighted-
average common shares outstanding |
|
|
79,086,821 |
|
|
|
83,379,222 |
|
|
|
79,821,881 |
|
|
|
85,092,952 |
|
|
|
|
|
|
| Potentially dilutive shares resulting
from stock option plans |
|
|
813,840 |
|
|
|
946,471 |
|
|
|
1,003,844 |
|
|
|
1,164,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Denominator for diluted EPS |
|
|
79,900,661 |
|
|
|
84,325,693 |
|
|
|
80,825,725 |
|
|
|
86,257,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain exercisable stock options were not included in the computation of
diluted EPS because the option prices were greater than the average quarterly
market prices for the periods presented. The number of stock options outstanding
at the end of each quarter presented which were not included in the calculation
of diluted EPS and the ranges of exercise prices were: 3,587,185 at
$22.00-$32.50 for the nine months ended March 4, 2000; and 1,213,457 at
$28.41-$32.50 for the nine months ended February 27, 1999.
7
SUPPLEMENTAL CASH FLOW INFORMATION
Cash and cash equivalents include all highly liquid debt and equity securities
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 |
|
|
|
|
|
Mar. 4, |
|
Feb. 27, |
|
|
2000 |
|
1999 |
|
|
|
|
|
| Income taxes paid |
|
$ |
56,531 |
|
|
$ |
44,767 |
|
|
|
|
|
|
| Interest paid |
|
$ |
7,053 |
|
|
$ |
5,527 |
|
OPERATING SEGMENTS
In accordance with Statement of Financial Accounting Standards No. 131,
“Disclosures about Segments of an Enterprise and Related Information,”
management evaluates the company as one operating segment in the office
furniture industry. The company is engaged worldwide in the design, manufacture,
and sale of office furniture systems, products, and related services through its
wholly owned subsidiaries. Throughout the world the product offerings, the
production processes, the methods of distribution, and the customers serviced
are consistent. The product lines consist primarily of office furniture systems,
seating, storage solutions, and casegoods. The accounting policies of the
operating segment are the same as those described in the summary of significant
accounting policies in the company’s 10-K report for the year ended May 29,
1999.
RECLASSIFICATIONS
Certain prior year information has been reclassified to conform to the current
year presentation.
CONTINGENCIES
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. Under the terms of these contracts, the GSA is permitted to
audit the company’s compliance with the GSA contracts. At any point in time, a
number of GSA audits are either scheduled or in process. Management does not
expect resolution of the audits to have a material adverse effect on the
company’s consolidated financial statements. In 1996, the Justice Department
notified the company that the GSA referred an audit to the Justice Department
for consideration of a potential Civil False Claims Act case. In the second
quarter of fiscal 2000, the Justice Department informed the company that the
audit was returned to the GSA without the filing of a Civil False Claims Act
case.
8
The company is also involved in legal proceedings and litigation arising in the
ordinary course of business. In the opinion of management, the outcome of such
proceedings and litigation currently pending will not materially affect the
company’s consolidated financial statements.
REPORT OF MANAGEMENT
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements, taken as a whole, contain all adjustments, which are of a
normal recurring nature, necessary to present fairly the financial position of
the company as of March 4, 2000, and the results of its operations and cash
flows for the interim periods presented. Interim results are not necessarily
indicative of results for a full year.
9
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management’s discussion and analysis of certain significant
factors that 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. All amounts
are increases unless bracketed, which are decreases. Dollar amounts are
shown in thousands. |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
Nine Months |
|
|
|
|
|
|
|
$ |
|
% |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
| NET SALES |
|
|
56,627 |
|
|
|
13.4 |
|
|
|
81,243 |
|
|
|
6.1 |
|
|
|
|
|
|
| COST OF GOODS SOLD |
|
|
40,328 |
|
|
|
15.4 |
|
|
|
61,253 |
|
|
|
7.5 |
|
|
|
|
|
|
| OPERATING EXPENSES |
|
|
9,629 |
|
|
|
8.6 |
|
|
|
17,200 |
|
|
|
4.9 |
|
|
|
|
|
|
| INTEREST EXPENSE |
|
|
3,433 |
|
|
|
583.8 |
|
|
|
4,245 |
|
|
|
80.8 |
|
|
|
|
|
|
| OTHER EXPENSE (INCOME), NET* |
|
|
(227 |
) |
|
|
(149.3 |
) |
|
|
(7,887 |
) |
|
|
(77.4 |
) |
|
|
|
|
|
| INCOME BEFORE TAXES ON INCOME |
|
|
3,010 |
|
|
|
6.3 |
|
|
|
(9,342 |
) |
|
|
(5.6 |
) |
|
|
|
|
|
| PROVISION FOR TAXES ON INCOME |
|
|
1,100 |
|
|
|
6.3 |
|
|
|
(6,550 |
) |
|
|
(10.0 |
) |
|
|
|
|
|
| NET INCOME |
|
|
1,910 |
|
|
|
6.4 |
|
|
|
(2,792 |
) |
|
|
(2.7 |
) |
|
|
|
|
|
| *Represents a decline in other income |
10
B. Results of Operations
| |
|
Third Quarter, Fiscal Year 2000 versus Third Quarter, Fiscal Year 1999 |
| |
| |
|
Net sales increased $56.6 million, or 13.4 percent, to $478.2 million
for the three months ended March 4, 2000. Excluding the impact of
acquisitions net sales increased 8.5 percent. |
| |
| |
|
The first nine months of fiscal 2000 contained 40 weeks as compared to
39 weeks in the first nine months of fiscal 1999. |
| |
| |
|
For the first nine months of fiscal 2000, sales were $1,415.1 million
compared to sales of $1,333.9 million in the first nine months of last
year. This represents an increase of 6.1 percent. Our sales growth was
driven by two primary factors. First, acquired volume represented 4.5
percent of the increase. Secondly, the additional week provided an
increase of 2.5 percent. Net of both the extra week and acquisitions,
sales declined 0.9 percent. |
| |
| |
|
New orders for the third quarter increased 20.1 percent to $464.3
million compared to the same period last year. After adjusting for
acquisitions, new orders increased 15.3 percent. The strong
year-over-year growth was partially due to the general downturn in the
industry last year, which provided a more favorable comparative period. |
| |
| |
|
The third quarter is usually the slowest period of the fiscal year,
primarily due to the short weeks around the holidays. Historically,
weekly order rates drop off approximately 10 percent when compared to
the second quarter. This year, however, the decline in order entry on a
weekly basis was only 1.1 percent when compared to the first half of the
year. As was discussed in the second quarter, certain of our customers
delayed placing orders and accepting shipments until calendar 2000
began, partially due to concerns over Year 2000 issues. Those customers
have begun placing orders and accepting shipments again, which favorably
impacted the third quarter. |
| |
| |
|
For the first nine months of fiscal 2000, new orders were $1,439.4
million compared with new orders of $1,305.5 million in the first nine
months of last year. This was an increase of 10.3 percent. Acquisitions
generated 4.7 percent of the change, and the extra week drove another
2.7 percent. Net of both acquisitions and the extra week, new orders
increased 2.9 percent. |
| |
| |
|
The backlog of unfilled orders at March 4, 2000 increased 18.8 percent
to $256.7 million from the $216.0 million reported at May 29, 1999.
Excluding the impact of acquisitions, backlog increased 10.5 percent.
Backlog is stronger than anticipated; based on the backlog strength and
continuing improvements in activity levels, revenue growth for the year
is expected to be in the mid to upper single digits. |
11
| |
|
Domestic Operations |
| |
| |
|
Domestic sales for the third quarter increased 15.6 percent compared to
the same period last year. Net of acquisitions domestic sales for the
quarter rose 11.2 percent compared to last year |
| |
| |
|
Domestic sales increased 6.4 percent for the first nine months of fiscal
2000 when compared to the same period last year. Excluding both the
impacts of the extra week and acquisitions, domestic sales declined 0.9
percent in comparison to the prior year first nine months. |
| |
| |
|
As has been the case since their respective introductions, our more
recently developed products, including Aeron, Q System and Passage,
continue to grow at a faster rate than our overall sales. |
| |
| |
|
Domestic orders for the third quarter were 21.5 percent higher than the
same period last year. Net of acquisitions, orders for the third quarter
increased 16.6 percent compared to last year. Domestic orders increased
10.4 percent for the nine months ended March 4, 2000. Net of
acquisitions and the extra week, domestic orders were up 2.6 percent for
the nine months. |
| |
| |
|
The Business and Institutional Furniture Manufacturers Association
(BIFMA) has estimated U.S. shipments increased approximately 0.4 percent
for the eight-month period ended January 2000. Orders increased
approximately 2.8 percent for the same period. The current BIFMA revenue
forecast is for a growth of 4.0 to 6.0 percent in calendar 2000. |
| |
| |
|
International Operations |
| |
| |
|
Net sales of international operations and export sales from the United
States increased 2.2 percent for the quarter. Net of acquisitions, net
sales actually decreased 0.2 percent compared to the same period last
year. Net sales for the first nine months of fiscal 2000 increased 4.5
percent, to $206.4 million, compared with last year. Excluding
acquisitions and the extra week in fiscal 2000, the increase in sales
for the nine months is 0.6 percent. All of our regions showed growth for
the nine month period except Canada. The growth was most significant in
Asia Pacific and Europe. |
| |
| |
|
Orders for the third quarter of fiscal 2000 were up 11.8 percent
compared to last year. Excluding acquisitions, orders increased 9.0
percent for the quarter. |
| |
| |
|
For the first nine months of fiscal 2000 orders increased 9.6 percent
compared to the same period last year. Excluding the impact of
acquisitions and the extra week in fiscal 2000 the increase in orders
has been 5.0 percent. |
12
| |
|
We have continued to improve the profitability of our total
international business primarily through better cost containment and
higher margin projects in the current year. Year-to-date, net income
from international operations was $8.0 million compared with $3.3
million in the same period last year. |
| |
| |
|
The economic environment in Europe and Asia has continued to recover
during our current fiscal year, which is contributing to the improved
activity levels in these geographic areas. |
| |
| |
|
Gross Margin |
| |
| |
|
We have made a change in how we classify certain product distribution
costs on the income statement. This had the effect of reducing cost of
goods sold, and thereby increasing margin, by approximately 1.0 percent,
with the offset being an increase in operating expenses of the same
amount. To present accurate comparative information, the change in
classification has been reflected in the Condensed Consolidated
Statements of Income by restating the results for the quarter and nine
months ended February 27, 1999. This change was made to make our
presentation consistent internally and with BIFMA’s classification. |
| |
| |
|
Gross margin, as a percent of sales, for the quarter was 36.8 percent
compared to 37.9 percent last year. For the nine months ended March 4,
2000, gross margin was 37.9 percent compared to 38.7 percent in the same
period last year. The decline in gross margin is due primarily to deeper
discounting, product mix shifts and manufacturing inefficiencies. |
| |
| |
|
Increased discounting reduced gross margin by approximately $13.0
million year-to-date. As we have not changed list prices, the increased
discounts result in real price decreases. The majority of this pricing
deterioration occurred during the first half of the year, and the
overall pricing environment stabilized during the third quarter;
however, discounting for the quarter was approximately $3 million deeper
than last year’s third quarter. |
| |
| |
|
The continuing shifts in product mix to our newer product lines also
continues to impact margin. New products tend to have lower margins when
they are introduced, and improve as the manufacturing processes improve
and material prices per unit drop in response to increases in volume.
Product mix shifts also created capacity constraints and inefficiencies
in our North American operations. |
| |
| |
|
During the quarter, we focused on those areas of the operation where we
were experiencing production capacity or efficiency issues. Our primary
objectives were to improve reliability and reduce lead times. First, we
completed the move into our new location in Georgia, combining the
activities of two plants into one. Second, we made several improvements
to enhance capacity, which resulted in some additional costs, including
overtime, increased headcount, installation of new equipment and
realignment of our production facilities, and outsourcing of certain |
13
| |
|
production processes. As we improve our production processes we expect
these costs to decrease by minimizing overtime and reducing component
outsourcing. |
| |
| |
|
These unfavorable factors were partially offset by improvements in
certain material costs due to cost-saving initiatives and a reduction in
our incentive compensation payments. Combined, these items represented
1.8 percent of sales. |
| |
| |
|
For the remainder of fiscal 2000, we expect gross margins to be in the
range of 37.0 percent to 38.0 percent. A critical aspect of maintaining
our margin levels is our continued focus on improving our shipment
reliability and enhancing our throughput via increased productivity and
leveraging our fixed cost base. These improvements, however, could be
partially offset by the cost of new product introductions and the
current competitive pricing environment. |
| |
| |
|
Operating Expenses |
| |
| |
|
Operating expenses, as a percent of net sales, were 25.4 percent for the
quarter and 26.1 percent for the nine months ended March 4, 2000. This
compares with 26.5 percent and 26.4 percent in the prior year for the
quarter and nine months ended February 27, 1999, respectively. |
| |
| |
|
The improvement in our operating expense level is the result of
partially offsetting factors. Operating expenses have continued to
increase to support our core strategic initiatives. We are continuing to
develop our customer communication and interaction capabilities. This
effort is largely focused on greatly enhancing connectivity by using
newly developed platforms that allow customers to interact with our
systems directly, either using proprietary systems or the Internet. This
allows them to specify and place orders directly, at their convenience.
We are also continuing our information technology investments, and our
increased capital structure has driven up our depreciation and
amortization expenses. These investments, combined with developing and
launching new products, most significantly Resolve, represented
incremental spending of $17.0 million, or 1.2 percent of sales for the
year. |
| |
| |
|
As has been the case all year, lower bonus levels have reduced our
spending. Operating expenses were reduced by lower incentive
compensation payments that represented approximately 1.7 percent of
sales for the year. |
| |
| |
|
We were pleased with our operating expense ratio for the quarter,
especially with our ability to fund our critical investments to create
long-term competitive advantage and market value, while reducing the
overall percentage. We expect to be in the range of 25.5 percent to 26.5
percent for the current year. Improving this ratio next year will be
difficult, however, as we expect our incentive compensation costs to
increase. |
14
| |
|
Our long-term goal is to reduce operating expenses to 24.0 percent of
sales. While this will in part come from cost containment, we believe a
large portion will come from leveraging our cost base as our revenue
growth accelerates. |
| |
| |
|
Other Income/Expenses, Net Income and Earnings per Share
Interest expense for the first nine months increased $4.2 million to
$9.5 million compared to the first nine months of last year primarily as
a result of higher debt levels. |
| |
| |
|
Other income for the first nine months of fiscal 2000 decreased $7.9
million from fiscal 1999. Last year’s results included gains related to
the sales of our Grandville and Roswell facilities and excess land in
the United Kingdom. Net of other capital losses, these gains had the
after-tax effect of increasing year-to-date net income by $4.3 million
in 1999. |
| |
| |
|
The effective tax rate for the quarter and year-to-date was 37.0
percent, compared with 37.0 percent in the third quarter and 38.8
percent year-to-date last year. The lower tax rate for the year is due
primarily to lower state taxes and international tax benefits. We expect
the tax rate to remain in the 36.5 to 37.5 percent range. |
| |
| |
|
Net income decreased 2.7 percent to $100.1 million in the first nine
months of fiscal 2000, compared to $102.8 million for the same period
last year. |
| |
| |
|
Earnings per share (EPS) for the third quarter was $.40 versus $.35 in
the same period last year, an increase of 14.3 percent. Exclusive of the
gains on the sales of our Grandville and Roswell facilities and excess
land in the United Kingdom, which represented $.01 for the quarter, EPS
increased 17.6 percent for the quarter. Year-to-date, EPS increased 4.2
percent to $1.24 compared to $1.19 last year. The gains on the facility
sales contributed $.05 per share to last year’s results; exclusive of
the gain, year-to-date EPS has increased 8.8 percent. |
15
| |
|
C. Financial Condition, Liquidity, and Capital Resources |
| |
| |
|
Third Quarter FY 2000 versus Third Quarter FY 1999 |
| 1. |
|
Cash flow from operating activities was $127.4 million versus
$139.9 million in the first nine months of fiscal 1999. |
| |
| 2. |
|
Days sales in accounts receivable plus days sales in inventory
(DSO) of 56.4 remained the same as that on February 27, 1999 for
the quarter. When compared to 52.5 days at the end of the fourth
quarter of fiscal 1999, this represented an increase of 3.9 days.
The increase is primarily due to higher inventory levels as a
result of our efforts to improve reliability and efficiency in
North America. |
| |
| 3. |
|
Total interest-bearing debt increased to $233.0 million compared
to $147.6 million at May 29, 1999. Our EBITDA to interest expense
ratio was 24.2 for the first nine months of fiscal 2000. This is
one of the covenants under the terms of our debt agreements, and
it evaluates our ability to cover our debt service costs. Our
debt agreements require this ratio to be greater than 4.0. |
| |
| 4. |
|
Capital expenditures for the first nine months of fiscal 2000
were $104.9 million versus $76.6 million for the first nine
months of fiscal 1999. The majority of the expenditures were
related to the purchase of sales technology software, the
construction of the new plant in Georgia, continued development
and implementation of the electronic selling platform, new
product development, production equipment to enhance capacity,
and building improvements. We expect net capital expenditures for
the year to be in the range of $120 million to $140 million. |
| |
| 5. |
|
During the first nine months of fiscal 2000, the company
repurchased 2.6 million shares of common stock for $62.1 million. |
| |
| 6. |
|
We believe that cash on hand, cash generated from operations and
our available borrowing facility will provide adequate liquidity
to fund the operations and capital additions of the Company. |
| |
|
Safe Harbor Provision |
| |
| |
|
Certain statements in this filing are not historical facts but are
“forward-looking statements” as defined under the Private Securities
Litigation Reform Act of 1995. These statements are not guarantees of
future performance and involve certain risks, uncertainties, and
assumptions that are difficult to predict with regard to timing, extent,
likelihood, and degree of occurrence. Therefore, actual results and
outcomes may materially differ from what may be expressed or forecasted
in such forward-looking statements. Furthermore, Herman Miller, Inc.,
undertakes no obligation to update, amend, or clarify forward-looking
statements, whether as a result of new information, future events, or
otherwise. Forward-looking statements include, but are not limited to,
statements concerning the outcome of GSA audits, future gross margin
expectations and future tax rates. |
16
Part II—Other Information
Item 6: Exhibits and Reports on Form 8-K
| 1. |
|
Exhibits |
| |
|
See Exhibit Index. |
| 2. |
|
Reports on Form 8-K |
| |
|
A Form 8-K, under item 5, announcing the adoption of a Shareholder
Rights Protection Agreement by the board of directors on June 30, 1999,
and the declaration of the dividend of Rights under that agreement. |
17
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. |
| |
| April 17, 2000 |
|
\s\ Michael A. Volkema
Michael A. Volkema
(Chief Executive Officer) |
| |
| April 17, 2000 |
|
\s\ Elizabeth A. Nickels
Elizabeth A. Nickels
(Chief Financial Officer) |
18
Exhibit Index
(27) Financial Data Schedule
19
5
1,000
9-MOS
JUN-03-2000
MAY-30-1999
MAR-04-2000
81,528
0
241,315
16,671
54,517
410,746
767,141
380,222
926,529
434,669
0
0
0
15,714
262,068
926,529
1,415,114
1,415,114
879,487
879,487
365,045
2,280
9,499
158,803
58,750
100,053
0
0
0
100,053
1.25
1.24
