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) |
Dated: | March 21, 2018 | HERMAN MILLER, INC. | ||
(Registrant) | ||||
By: | /s/ Kevin J. Veltman Kevin J. Veltman | |||
Vice President of Investor Relations & Treasurer (Duly Authorized Signatory for Registrant) |
• | Year-over-year sales growth of 10.2%; broad-based across all segments |
• | 32% increase in reported EPS (adjusted EPS growth of 28%) |
• | 580 basis point improvement in Consumer operating margins over last year |
Release | Immediate |
Date | March 21, 2018 |
Contact | Kevin Veltman (616) 654-3973 or kevin_veltman@hermanmiller.com |
Jeff Stutz (616) 654-8538 or jeff_stutz@hermanmiller.com | |
Media (616) 654-5977 or media_relations@hermanmiller.com | |
Address | Herman Miller, Inc., 855 East Main Avenue, PO Box 302, Zeeland, MI 49464-0302 |
Internet | www.hermanmiller.com |
FINANCIAL HIGHLIGHTS | ||||||||||||||||
(Dollars in millions, except per share data) | (Unaudited) | (Unaudited) | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
3/3/2018 | 3/4/2017 | % Chg. | 3/3/2018 | 3/4/2017 | % Chg. | |||||||||||
(13 weeks) | (13 weeks) | (39 weeks) | (40 weeks) | |||||||||||||
Net Sales | $ | 578.4 | $ | 524.9 | 10.2 | % | $ | 1,763.2 | $ | 1,701.0 | 3.7 | % | ||||
Gross Margin % | 35.6 | % | 37.2 | % | N/A | 36.6 | % | 37.8 | % | N/A | ||||||
Operating Expenses | $ | 167.5 | $ | 157.8 | 6.1 | % | $ | 505.4 | $ | 498.7 | 1.3 | % | ||||
Restructuring Expenses | $ | — | $ | 2.7 | (100.0 | )% | $ | 1.9 | $ | 3.7 | (48.6 | )% | ||||
Operating Earnings % | 6.6 | % | 6.7 | % | N/A | 7.8 | % | 8.3 | % | N/A | ||||||
Adjusted Operating Earnings %* | 7.3 | % | 7.0 | % | N/A | 8.2 | % | 8.5 | % | N/A | ||||||
Adjusted EBITDA* | $ | 61.6 | $ | 52.6 | 17.1 | % | $ | 199.5 | $ | 188.0 | 6.1 | % | ||||
Net Earnings Attributable to Herman Miller, Inc. | $ | 29.8 | $ | 22.5 | 32.4 | % | $ | 96.3 | $ | 90.5 | 6.4 | % | ||||
Earnings Per Share – Diluted | $ | 0.49 | $ | 0.37 | 32.4 | % | $ | 1.60 | $ | 1.50 | 6.7 | % | ||||
Adjusted Earnings Per Share – Diluted* | $ | 0.50 | $ | 0.39 | 28.2 | % | $ | 1.64 | $ | 1.52 | 7.9 | % | ||||
Orders | $ | 563.2 | $ | 543.2 | 3.7 | % | $ | 1,787.4 | $ | 1,714.7 | 4.2 | % | ||||
Backlog | $ | 341.7 | $ | 331.6 | 3.0 | % | ||||||||||
*Items indicated represent Non-GAAP measurements; see the reconciliations of Non-GAAP financial measures and related explanations in the supplemental data file available for download at http://www.hermanmiller.com/about-us/investors.html. A copy of this supplemental data file has also been included with the earnings press release filed on Form 8-K with the Securities and Exchange Commission. |
Organic Sales Growth (Decline) by Segment * | ||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Total | North America | ELA | Specialty | Consumer | Total | |||||||||||||||||||||
Net Sales, as reported | $ | 316.4 | $ | 102.6 | $ | 72.6 | $ | 86.8 | $ | 578.4 | $ | 294.5 | $ | 88.0 | $ | 69.3 | $ | 73.1 | $ | 524.9 | ||||||||||
% change from PY | 7.4 | % | 16.6 | % | 4.8 | % | 18.7 | % | 10.2 | % | ||||||||||||||||||||
Proforma Adjustments | ||||||||||||||||||||||||||||||
Dealer Divestitures | — | — | — | — | — | (2.6 | ) | — | — | — | (2.6 | ) | ||||||||||||||||||
Currency Translation Effects (1) | (1.1 | ) | (5.0 | ) | — | (0.1 | ) | (6.2 | ) | — | — | — | — | — | ||||||||||||||||
Net Sales, organic | $ | 315.3 | $ | 97.6 | $ | 72.6 | $ | 86.7 | $ | 572.2 | $ | 291.9 | $ | 88.0 | $ | 69.3 | $ | 73.1 | $ | 522.3 | ||||||||||
% change from PY | 8.0 | % | 10.9 | % | 4.8 | % | 18.6 | % | 9.6 | % |
Organic Order Growth (Decline) by Segment * | ||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Total | North America | ELA | Specialty | Consumer | Total | |||||||||||||||||||||
Orders, as reported | $ | 294.7 | $ | 113.9 | $ | 71.2 | $ | 83.4 | $ | 563.2 | $ | 318.3 | $ | 85.5 | $ | 66.3 | $ | 73.1 | $ | 543.2 | ||||||||||
% change from PY | (7.4 | )% | 33.2 | % | 7.4 | % | 14.1 | % | 3.7 | % | ||||||||||||||||||||
Proforma Adjustments | ||||||||||||||||||||||||||||||
Dealer Divestitures | — | — | — | — | — | (6.9 | ) | — | — | — | (6.9 | ) | ||||||||||||||||||
Currency Translation Effects (1) | (1.1 | ) | (5.1 | ) | — | (0.1 | ) | (6.3 | ) | — | — | — | — | — | ||||||||||||||||
Orders, proforma | $ | 293.6 | $ | 108.8 | $ | 71.2 | $ | 83.3 | $ | 556.9 | $ | 311.4 | $ | 85.5 | $ | 66.3 | $ | 73.1 | $ | 536.3 | ||||||||||
% change from PY | (5.7 | )% | 27.3 | % | 7.4 | % | 14.0 | % | 3.8 | % | ||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||
* Items represent Non-GAAP measurements; see the reconciliations of Non-GAAP financial measures and related explanations in the supplemental data file available for download at http://www.hermanmiller.com/about-us/investors.html. A copy of this supplemental data file has also been included with the earnings press release filed on Form 8-K with the Securities and Exchange Commission. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
March 3, 2018 | March 4, 2017 | March 3, 2018 | March 4, 2017 | ||||||||||||||||||
(13 weeks) | (13 weeks) | (39 weeks) | (40 weeks) | ||||||||||||||||||
Net Sales | $ | 578.4 | 100.0 | % | $ | 524.9 | 100.0 | % | $ | 1,763.2 | 100.0 | % | $ | 1,701.0 | 100.0 | % | |||||
Cost of Sales | 372.6 | 64.4 | % | 329.4 | 62.8 | % | 1,118.5 | 63.4 | % | 1,057.6 | 62.2 | % | |||||||||
Gross Margin | 205.8 | 35.6 | % | 195.5 | 37.2 | % | 644.7 | 36.6 | % | 643.4 | 37.8 | % | |||||||||
Operating Expenses | 167.5 | 29.0 | % | 157.8 | 30.1 | % | 505.4 | 28.7 | % | 498.7 | 29.3 | % | |||||||||
Restructuring Expenses | — | — | % | 2.7 | 0.5 | % | 1.9 | 0.1 | % | 3.7 | 0.2 | % | |||||||||
Operating Earnings | 38.3 | 6.6 | % | 35.0 | 6.7 | % | 137.4 | 7.8 | % | 141.0 | 8.3 | % | |||||||||
Other Expenses, net | 2.1 | 0.4 | % | 3.0 | 0.6 | % | 7.7 | 0.4 | % | 10.4 | 0.6 | % | |||||||||
Earnings Before Income Taxes and Equity Income | 36.2 | 6.3 | % | 32.0 | 6.1 | % | 129.7 | 7.4 | % | 130.6 | 7.7 | % | |||||||||
Income Tax Expense | 6.9 | 1.2 | % | 9.5 | 1.8 | % | 35.4 | 2.0 | % | 41.1 | 2.4 | % | |||||||||
Equity Income, net of tax | 0.7 | 0.1 | % | — | — | % | 2.2 | 0.1 | % | 1.1 | 0.1 | % | |||||||||
Net Earnings | 30.0 | 5.2 | % | 22.5 | 4.3 | % | 96.5 | 5.5 | % | 90.6 | 5.3 | % | |||||||||
Net Earnings Attributable to Noncontrolling Interests | 0.2 | — | % | — | — | % | 0.2 | — | % | 0.1 | — | % | |||||||||
Net Earnings Attributable to Herman Miller, Inc. | $ | 29.8 | 5.2 | % | $ | 22.5 | 4.3 | % | $ | 96.3 | 5.5 | % | $ | 90.5 | 5.3 | % | |||||
Amounts per Common Share Attributable to Herman Miller, Inc. | |||||||||||||||||||||
Earnings Per Share – Basic | $0.50 | $0.38 | $1.61 | $1.51 | |||||||||||||||||
Weighted Average Basic Common Shares | 59,691,709 | 59,846,034 | 59,753,271 | 59,910,844 | |||||||||||||||||
Earnings Per Share – Diluted | $0.49 | $0.37 | $1.60 | $1.50 | |||||||||||||||||
Weighted Average Diluted Common Shares | 60,362,084 | 60,383,186 | 60,296,728 | 60,421,978 |
Nine Months Ended | ||||||
March 3, 2018 | March 4, 2017 | |||||
(39 weeks) | (40 weeks) | |||||
Net Earnings | $ | 96.5 | $ | 90.6 | ||
Cash Flows provided by Operating Activities | 110.7 | 122.1 | ||||
Cash Flows used for Investing Activities | (42.5 | ) | (99.0 | ) | ||
Cash Flows provided by / (used for) Financing Activities | 28.3 | (29.6 | ) | |||
Effect of Exchange Rates | 0.3 | 0.0 | ||||
Change in Cash | 96.8 | (6.5 | ) | |||
Cash, Beginning of Period | 96.2 | 84.9 | ||||
Cash, End of Period | $ | 193.0 | $ | 78.4 |
March 3, 2018 | June 3, 2017 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and Cash Equivalents | $ | 193.0 | $ | 96.2 | ||
Marketable Securities | 8.4 | 8.6 | ||||
Accounts and Notes Receivable, net | 195.1 | 186.6 | ||||
Inventories, net | 169.4 | 152.4 | ||||
Prepaid Expenses and Other | 44.4 | 48.1 | ||||
Total Current Assets | 610.3 | 491.9 | ||||
Net Property and Equipment | 330.0 | 314.6 | ||||
Other Assets | 503.0 | 499.8 | ||||
Total Assets | $ | 1,443.3 | $ | 1,306.3 | ||
LIABILITIES & STOCKHOLDERS' EQUITY | ||||||
Current Liabilities: | ||||||
Accounts Payable | 162.5 | 148.4 | ||||
Accrued Liabilities | 222.4 | 237.3 | ||||
Total Current Liabilities | 384.9 | 385.7 | ||||
Long-term Debt | 275.0 | 199.9 | ||||
Other Liabilities | 101.8 | 108.4 | ||||
Total Liabilities | 761.7 | 694.0 | ||||
Redeemable Noncontrolling Interests | 24.3 | 24.6 | ||||
Herman Miller, Inc. Stockholders' Equity | 657.1 | 587.5 | ||||
Noncontrolling Interests | 0.2 | 0.2 | ||||
Total Stockholders' Equity | 657.3 | 587.7 | ||||
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity | $ | 1,443.3 | $ | 1,306.3 |
Herman Miller, Inc. (together with its consolidated subsidiaries, the "company", "we", "our" or "us") provides this supplement to assist investors in evaluating the company's financial and operating results and metrics. We suggest that the narratives to each of the tables included in this supplement be read in conjunction with the financial tables. The financial information included in this supplement contains certain non-GAAP financial measures, as explained in more detail in Section II below. |
Three Months Ended | Nine Months Ended | |||||||||||||||
Net Sales | 3/3/2018 | 3/4/2017 | % change | 3/3/2018 | 3/4/2017 | % change | ||||||||||
North America | $ | 316.4 | $ | 294.5 | 7.4 | % | $ | 975.3 | $ | 955.6 | 2.1 | % | ||||
ELA | 102.6 | 88.0 | 16.6 | % | 309.0 | 292.9 | 5.5 | % | ||||||||
Specialty | 72.6 | 69.3 | 4.8 | % | 222.2 | 224.4 | (1.0 | )% | ||||||||
Consumer | 86.8 | 73.1 | 18.7 | % | 256.7 | 228.1 | 12.5 | % | ||||||||
Total | $ | 578.4 | $ | 524.9 | 10.2 | % | $ | 1,763.2 | $ | 1,701.0 | 3.7 | % | ||||
Gross Margin | ||||||||||||||||
North America | $ | 105.8 | $ | 105.6 | 0.2 | % | $ | 341.3 | $ | 348.6 | (2.1 | )% | ||||
ELA | 33.2 | 29.2 | 13.7 | % | 103.3 | 100.3 | 3.0 | % | ||||||||
Specialty | 26.9 | 28.1 | (4.3 | )% | 85.1 | 92.3 | (7.8 | )% | ||||||||
Consumer | 39.9 | 32.6 | 22.4 | % | 115.0 | 102.2 | 12.5 | % | ||||||||
Total | $ | 205.8 | $ | 195.5 | 5.3 | % | $ | 644.7 | $ | 643.4 | 0.2 | % | ||||
Gross Margin % Net Sales | ||||||||||||||||
North America | 33.4 | % | 35.9 | % | 35.0 | % | 36.5 | % | ||||||||
ELA | 32.4 | % | 33.2 | % | 33.4 | % | 34.2 | % | ||||||||
Specialty | 37.1 | % | 40.5 | % | 38.3 | % | 41.1 | % | ||||||||
Consumer | 46.0 | % | 44.6 | % | 44.8 | % | 44.8 | % | ||||||||
Total | 35.6 | % | 37.2 | % | 36.6 | % | 37.8 | % | ||||||||
Operating Earnings (Loss) | ||||||||||||||||
North America | $ | 37.8 | $ | 35.9 | 5.3 | % | $ | 131.6 | $ | 125.7 | 4.7 | % | ||||
ELA | 7.2 | 6.5 | 10.8 | % | 26.1 | 27.1 | (3.7 | )% | ||||||||
Specialty | 2.0 | 1.3 | 53.8 | % | 5.7 | 12.2 | (53.3 | )% | ||||||||
Consumer | 4.2 | (0.7 | ) | n/m | 5.5 | 1.9 | 189.5 | % | ||||||||
Corporate Unallocated Expenses | (12.9 | ) | (8.0 | ) | 61.3 | % | (31.5 | ) | (25.9 | ) | 21.6 | % | ||||
Total | $ | 38.3 | $ | 35.0 | 9.4 | % | $ | 137.4 | $ | 141.0 | (2.6 | )% | ||||
Operating Earnings % Net Sales | ||||||||||||||||
North America | 11.9 | % | 12.2 | % | 13.5 | % | 13.2 | % | ||||||||
ELA | 7.0 | % | 7.4 | % | 8.4 | % | 9.3 | % | ||||||||
Specialty | 2.8 | % | 1.9 | % | 2.6 | % | 5.4 | % | ||||||||
Consumer | 4.8 | % | (1.0 | )% | 2.1 | % | 0.8 | % | ||||||||
Total | 6.6 | % | 6.7 | % | 7.8 | % | 8.3 | % |
Three Months Ended | Nine Months Ended | |||||||||||
3/3/2018 | 3/4/2017 | 3/3/2018 | 3/4/2017 | |||||||||
Earnings per Share - Diluted | $ | 0.49 | $ | 0.37 | $ | 1.60 | $ | 1.50 | ||||
Less: One-time impact of adopting U.S. Tax Cuts and Jobs Act | (0.04 | ) | — | (0.04 | ) | — | ||||||
Less: Gain on sale of dealer | — | (0.01 | ) | — | (0.01 | ) | ||||||
Add: Special charges | 0.05 | — | 0.06 | — | ||||||||
Add: Restructuring expense | — | 0.03 | 0.02 | 0.03 | ||||||||
Adjusted Earnings per Share - Diluted | $ | 0.50 | $ | 0.39 | $ | 1.64 | $ | 1.52 | ||||
Weighted Average Shares Outstanding (used for Calculating Adjusted Earnings per Share) – Diluted | 60,362,084 | 60,383,186 | 60,296,728 | 60,421,978 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Corporate | Total | North America | ELA | Specialty | Consumer | Corporate | Total | |||||||||||||||||||||||||
Operating Earnings (Loss) | $ | 37.8 | $ | 7.2 | $ | 2.0 | $ | 4.2 | $ | (12.9 | ) | $ | 38.3 | $ | 35.9 | $ | 6.5 | $ | 1.3 | $ | (0.7 | ) | $ | (8.0 | ) | $ | 35.0 | |||||||||
% Net Sales | 11.9 | % | 7.0 | % | 2.8 | % | 4.8 | % | n/a | 6.6 | % | 12.2 | % | 7.4 | % | 1.9 | % | (1.0 | )% | n/a | 6.7 | % | ||||||||||||||
Less: Gain on sale of dealer | — | — | — | — | — | — | (0.7 | ) | — | — | — | — | (0.7 | ) | ||||||||||||||||||||||
Add: Special charges | — | 0.3 | — | — | 3.6 | 3.9 | — | — | — | — | — | — | ||||||||||||||||||||||||
Add: Restructuring expenses | — | — | — | — | — | — | 1.5 | 0.7 | 0.5 | — | — | 2.7 | ||||||||||||||||||||||||
Adjusted Operating Earnings (Loss) | $ | 37.8 | $ | 7.5 | $ | 2.0 | $ | 4.2 | $ | (9.3 | ) | $ | 42.2 | $ | 36.7 | $ | 7.2 | $ | 1.8 | $ | (0.7 | ) | $ | (8.0 | ) | $ | 37.0 | |||||||||
% Net Sales | 11.9 | % | 7.3 | % | 2.8 | % | 4.8 | % | n/a | 7.3 | % | 12.5 | % | 8.2 | % | 2.6 | % | (1.0 | )% | n/a | 7.0 | % | ||||||||||||||
Other Income (Expense), net | — | — | — | — | 1.1 | 1.1 | — | — | — | — | 0.8 | 0.8 | ||||||||||||||||||||||||
Equity Income, net of tax | 0.3 | 0.3 | 0.1 | — | — | 0.7 | 0.1 | 0.1 | (0.2 | ) | — | — | — | |||||||||||||||||||||||
Add: Depreciation and Amortization | 9.0 | 2.7 | 2.6 | 3.2 | 0.1 | 17.6 | 7.1 | 2.3 | 2.3 | 2.7 | 0.4 | 14.8 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 47.1 | $ | 10.5 | $ | 4.7 | $ | 7.4 | $ | (8.1 | ) | $ | 61.6 | $ | 43.9 | $ | 9.6 | $ | 3.9 | $ | 2.0 | $ | (6.8 | ) | $ | 52.6 | ||||||||||
% Net Sales | 14.9 | % | 10.2 | % | 6.5 | % | 8.5 | % | n/a | 10.7 | % | 14.9 | % | 10.9 | % | 5.6 | % | 2.7 | % | n/a | 10.0 | % |
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Corporate | Total | North America | ELA | Specialty | Consumer | Corporate | Total | |||||||||||||||||||||||||
Operating Earnings (Loss) | $ | 131.6 | $ | 26.1 | $ | 5.7 | $ | 5.5 | $ | (31.5 | ) | $ | 137.4 | $ | 125.7 | $ | 27.1 | $ | 12.2 | $ | 1.9 | $ | (25.9 | ) | $ | 141.0 | ||||||||||
% Net Sales | 13.5 | % | 8.4 | % | 2.6 | % | 2.1 | % | n/a | 7.8 | % | 13.2 | % | 9.3 | % | 5.4 | % | 0.8 | % | n/a | 8.3 | % | ||||||||||||||
Less: Gain on sale of dealer | — | — | — | — | — | — | (0.7 | ) | — | — | — | — | (0.7 | ) | ||||||||||||||||||||||
Add: Special charges | 0.3 | 5.5 | 5.8 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Add: Restructuring expenses | 1.9 | — | — | — | — | 1.9 | 2.2 | 0.9 | 0.6 | — | — | 3.7 | ||||||||||||||||||||||||
Adjusted Operating Earnings (Loss) | $ | 133.5 | $ | 26.4 | $ | 5.7 | $ | 11.0 | $ | (31.5 | ) | $ | 145.1 | $ | 127.2 | $ | 28.0 | $ | 12.8 | $ | 1.9 | $ | (25.9 | ) | $ | 144.0 | ||||||||||
% Net Sales | 13.7 | % | 8.5 | % | 2.6 | % | 4.3 | % | n/a | 8.2 | % | 13.3 | % | 9.6 | % | 5.7 | % | 0.8 | % | n/a | 8.5 | % | ||||||||||||||
Other Income (Expense), net | — | — | — | — | 2.9 | 2.9 | — | — | — | — | 1.0 | 1.0 | ||||||||||||||||||||||||
Equity Income, net of tax | 0.9 | 1.0 | 0.5 | — | (0.2 | ) | 2.2 | 0.5 | 0.5 | 0.4 | — | (0.3 | ) | 1.1 | ||||||||||||||||||||||
Add: Depreciation and Amortization | 24.6 | 7.7 | 7.5 | 9.0 | 0.5 | 49.3 | 20.4 | 7.2 | 6.8 | 7.5 | 1.1 | 43.0 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 159.0 | $ | 35.1 | $ | 13.7 | $ | 20.0 | $ | (28.3 | ) | $ | 199.5 | $ | 148.1 | $ | 35.7 | $ | 20.0 | $ | 9.4 | $ | (24.1 | ) | $ | 189.1 | ||||||||||
% Net Sales | 16.3 | % | 11.4 | % | 6.2 | % | 7.8 | % | n/a | 11.3 | % | 15.5 | % | 12.2 | % | 8.9 | % | 4.1 | % | n/a | 11.1 | % |
Three Months Ended | Nine Months Ended | |||||||||||
3/3/18 | 3/4/17 | 3/3/18 | 3/4/17 | |||||||||
Net Earnings | $ | 30.0 | $ | 22.5 | $ | 96.5 | $ | 90.6 | ||||
Add: Interest expense | 3.2 | 3.8 | 10.6 | 11.4 | ||||||||
Add: Income tax expense | 6.9 | 9.5 | 35.4 | 41.1 | ||||||||
Add: Amortization and Depreciation | 17.6 | 14.8 | 49.3 | 43.0 | ||||||||
Add: Special charges | 3.9 | — | 5.8 | — | ||||||||
Add: Restructuring expenses | — | 2.7 | 1.9 | 3.7 | ||||||||
Less: Gain on sale of dealer | — | (0.7 | ) | — | (0.7 | ) | ||||||
Adjusted EBITDA | $ | 61.6 | $ | 52.6 | $ | 199.5 | $ | 189.1 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Total | North America | ELA | Specialty | Consumer | Total | |||||||||||||||||||||
Net Sales, as reported | $ | 316.4 | $ | 102.6 | $ | 72.6 | $ | 86.8 | $ | 578.4 | $ | 294.5 | $ | 88.0 | $ | 69.3 | $ | 73.1 | $ | 524.9 | ||||||||||
% change from PY | 7.4 | % | 16.6 | % | 4.8 | % | 18.7 | % | 10.2 | % | ||||||||||||||||||||
Proforma Adjustments | ||||||||||||||||||||||||||||||
Dealer Divestitures | — | — | — | — | — | (2.6 | ) | — | — | — | (2.6 | ) | ||||||||||||||||||
Currency Translation Effects (1) | (1.1 | ) | (5.0 | ) | — | (0.1 | ) | (6.2 | ) | — | — | — | — | — | ||||||||||||||||
Net Sales, organic | $ | 315.3 | $ | 97.6 | $ | 72.6 | $ | 86.7 | $ | 572.2 | $ | 291.9 | $ | 88.0 | $ | 69.3 | $ | 73.1 | $ | 522.3 | ||||||||||
% change from PY | 8.0 | % | 10.9 | % | 4.8 | % | 18.6 | % | 9.6 | % |
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Total | North America | ELA | Specialty | Consumer | Total | |||||||||||||||||||||
Net Sales, as reported | $ | 975.3 | $ | 309.0 | $ | 222.2 | $ | 256.7 | $ | 1,763.2 | $ | 955.6 | $ | 292.9 | $ | 224.4 | $ | 228.1 | $ | 1,701.0 | ||||||||||
% change from PY | 2.1 | % | 5.5 | % | (1.0 | )% | 12.5 | % | 3.7 | % | ||||||||||||||||||||
Proforma Adjustments | ||||||||||||||||||||||||||||||
Dealer Divestitures | — | — | — | — | — | (21.4 | ) | — | — | — | (21.4 | ) | ||||||||||||||||||
Currency Translation Effects (1) | (2.7 | ) | (7.4 | ) | (0.1 | ) | (0.2 | ) | (10.4 | ) | — | — | — | — | — | |||||||||||||||
Impact of Extra Week in FY17 | — | — | — | — | — | (21.7 | ) | (6.3 | ) | (4.3 | ) | (4.7 | ) | (37.0 | ) | |||||||||||||||
Impact of Change in DWR Shipping Terms | — | — | — | (5.0 | ) | (5.0 | ) | — | — | — | — | — | ||||||||||||||||||
Net sales, organic | $ | 972.6 | $ | 301.6 | $ | 222.1 | $ | 251.5 | $ | 1,747.8 | $ | 912.5 | $ | 286.6 | $ | 220.1 | $ | 223.4 | $ | 1,642.6 | ||||||||||
% change from PY | 6.6 | % | 5.2 | % | 0.9 | % | 12.6 | % | 6.4 | % | ||||||||||||||||||||
(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 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Total | North America | ELA | Specialty | Consumer | Total | |||||||||||||||||||||
Orders, as reported | $ | 294.7 | $ | 113.9 | $ | 71.2 | $ | 83.4 | $ | 563.2 | $ | 318.3 | $ | 85.5 | $ | 66.3 | $ | 73.1 | $ | 543.2 | ||||||||||
% change from PY | (7.4 | )% | 33.2 | % | 7.4 | % | 14.1 | % | 3.7 | % | ||||||||||||||||||||
Proforma Adjustments | ||||||||||||||||||||||||||||||
Dealer Divestitures | — | — | — | — | — | (6.9 | ) | — | — | — | (6.9 | ) | ||||||||||||||||||
Currency Translation Effects (1) | (1.1 | ) | (5.1 | ) | — | (0.1 | ) | (6.3 | ) | — | — | — | — | — | ||||||||||||||||
Orders, organic | $ | 293.6 | $ | 108.8 | $ | 71.2 | $ | 83.3 | $ | 556.9 | $ | 311.4 | $ | 85.5 | $ | 66.3 | $ | 73.1 | $ | 536.3 | ||||||||||
% change from PY | (5.7 | )% | 27.3 | % | 7.4 | % | 14.0 | % | 3.8 | % |
Nine Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
3/3/18 | 3/4/17 | |||||||||||||||||||||||||||||
North America | ELA | Specialty | Consumer | Total | North America | ELA | Specialty | Consumer | Total | |||||||||||||||||||||
Orders, as reported | $ | 970.5 | $ | 340.4 | $ | 223.7 | $ | 252.8 | $ | 1,787.4 | $ | 973.8 | $ | 295.0 | $ | 218.4 | $ | 227.5 | $ | 1,714.7 | ||||||||||
% change from PY | (0.3 | )% | 15.4 | % | 2.4 | % | 11.1 | % | 4.2 | % | ||||||||||||||||||||
Proforma Adjustments | ||||||||||||||||||||||||||||||
Dealer Divestitures | — | — | — | — | — | (22.4 | ) | — | — | — | (22.4 | ) | ||||||||||||||||||
Currency Translation Effects (1) | (2.4 | ) | (7.6 | ) | (0.1 | ) | (0.2 | ) | (10.3 | ) | — | — | — | — | — | |||||||||||||||
Impact of Extra Week in FY17 | — | — | — | — | — | (20.0 | ) | (8.1 | ) | (4.8 | ) | (4.0 | ) | (36.9 | ) | |||||||||||||||
Orders, organic | $ | 968.1 | $ | 332.8 | $ | 223.6 | $ | 252.6 | $ | 1,777.1 | $ | 931.4 | $ | 286.9 | $ | 213.6 | $ | 223.5 | $ | 1,655.4 | ||||||||||
% change from PY | 3.9 | % | 16.0 | % | 4.7 | % | 13.0 | % | 7.4 | % | ||||||||||||||||||||
(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 |
Studio Count | Studio Selling Square Footage | |||||||||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Nine Months Ended | |||||||||||||
3/3/18 | 3/4/17 | 3/3/18 | 3/4/17 | 3/3/18 | 3/4/17 | 3/3/18 | 3/4/17 | |||||||||
Beginning of Period | 32 | 32 | 31 | 29 | 357,387 | 291,674 | 317,456 | 246,481 | ||||||||
Studio Openings | — | 2 | 3 | 7 | — | 33,000 | 43,579 | 87,284 | ||||||||
Studio Expansions | — | — | — | — | — | — | 4,500 | — | ||||||||
Studio Closings | — | (3 | ) | (2 | ) | (5 | ) | — | (16,485 | ) | (8,148 | ) | (25,576 | ) | ||
End of Period | 32 | 31 | 32 | 31 | 357,387 | 308,189 | 357,387 | 308,189 | ||||||||
Comparable Studios, End of Period | 24 | 24 | 21 | 22 | ||||||||||||
Non-Comparable Studios, End of Period | 8 | 7 | 11 | 7 |
Studio Revenue Metrics | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
3/3/18 | 3/4/17 | 3/3/18 | 3/4/17 | |||||||||
Average Studio Square Footage | 357,387 | 299,392 | 337,422 | 277,335 | ||||||||
Annualized Net Sales per Square Foot, All Studios | $ | 514 | $ | 552 | $ | 531 | $ | 590 | ||||
DWR Comparable Brand Sales* | 13.7 | % | 2.9 | % | 10.7 | % | 5.8 | % | ||||
Annualized Net Sales per Square Foot, Comparable Studios | $ | 609 | $ | 627 | $ | 640 | $ | 646 | ||||
*Fiscal 2017 figures are presented on a pro forma basis using a 39-week average to normalize results for the impact of an extra week of operations in the first quarter of fiscal 2017. DWR comparable brand sales reflects the year-over-year change in net sales across the multiple channels that DWR serves, including studios, outlets, contract, catalog, phone and e-commerce. |
F. Sales and Earnings Guidance - Upcoming Quarter | Company Guidance | |
Q4 Fiscal 2018 | ||
Net Sales | $590 million to $610 million | |
Gross Margin % | 36.25% - 37.25% | |
Adjusted Operating Expenses | $169 million to $173 million | |
Special charges | $2 million to $2.5 million | |
Restructuring expenses | $4 million to $4.5 million | |
Effective Tax Rate | 23% - 25% | |
GAAP Earnings Per Share, Diluted | $0.49 to $0.53 | |
Adjusted Earnings Per Share, Diluted | $0.56 to $0.60 |
G. Reconciliation of Reported to Adjusted Effective Tax Rate | Three Months Ended | |
3/3/18 | ||
Effective Tax Rate, Reported | 19.0 | % |
Year-to-date U.S. tax rate true-up | 8.3 | % |
Re-measurement of net deferred tax liability | 23.3 | % |
Re-measurement of taxes payable | 0.7 | % |
Tax expense from deemed repatriation of foreign earnings | (25.5 | )% |
Effective Tax Rate, Adjusted | 25.8 | % |
This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the office furniture industry, the economy, and the company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. These risks include, without limitation, the success of our growth strategy, employment and general economic conditions, the pace of economic recovery in the U.S and in our International markets, the increase in white-collar employment, the willingness of customers to undertake capital expenditures, the types of products purchased by customers, competitive-pricing pressures, the availability and pricing of raw materials, our reliance on a limited number of suppliers, our ability to expand globally given the risks associated with regulatory and legal compliance challenges and accompanying currency fluctuations, the ability to increase prices to absorb the additional costs of raw materials, the financial strength of our dealers and the financial strength of our customers, our ability to locate new DWR studios, negotiate favorable lease terms for new and existing locations and the implementation of our studio portfolio transformation, our ability to attract and retain key executives and other qualified employees, our ability to continue to make product innovations, the success of newly-introduced products, our ability to serve all of our markets, possible acquisitions, divestitures or alliances, the pace and level of government procurement, the outcome of pending litigation or governmental audits or investigations, political risk in the markets we serve, and other risks identified in our filings with the Securities and Exchange Commission. Therefore, actual results and outcomes may materially differ from what we express or forecast. Furthermore, Herman Miller, Inc., undertakes no obligation to update, amend or clarify forward-looking statements. |