Post Earnings Coverage as Herman Miller’s Sales and EPS Declined

Upcoming AWS Coverage on Essendant Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 4, 2017 / Active Wall St. announces its post-earnings coverage on Herman Miller, Inc. (NASDAQ: MLHR). The Company announced its third quarter results on March 22, 2017. The furniture manufacturer’s orders and backlog increased 6.8% and 5.8%, respectively. Register with us now for your free membership at:

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One of Herman Miller’s competitors within the Business Equipment space, Essendant Inc. (NASDAQ: ESND), reported on February 27, 2017, its financial results for Q4 and year ended December 31, 2016. AWS will be initiating a research report on Essendant in the coming days.

Today, AWS is promoting its earnings coverage on MLHR; touching on ESND. Get our free coverage by signing up to:

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Earnings Reviewed

For its third quarter ended March 04, 2017, Herman Miller, reported net sales of $524.9 million, down 2.2% compared to sales of $536.5 million in Q3 FY16. New orders in Q3 FY17 of $543.2 million were 6.8% above the prior year’s level.

Herman Miller estimates that its most recent price increase, which became effective on February 06, 2017, had the effect of accelerating approximately $21 million of orders that would have otherwise been entered in Q4 FY17. On an organic basis, which adjusts for this order acceleration as well as foreign currency translation and dealer divestitures, net sales had increased by 0.1% and orders increased by 4.8% on a y-o-y basis in Q3 FY17.

Consolidated gross margin in Q3 FY17 totaled 37.2%, representing a 150 basis point decrease from the level reported in the same quarter of last fiscal year due to comparatively higher levels of price discounting and pressure from commodity costs.

Herman Miller reported net earnings of $0.37 per share on a diluted basis for Q3 FY17 compared to diluted earnings per share of $0.46 in Q3 FY16. Excluding the impact of certain restructuring charges and a gain from a dealer divestiture recognized in the period, adjusted earnings per share in the reported quarter totaled $0.39.

Segment Results

Within Herman Miller’s North American segment, sales were $310 million in Q3 FY17, representing a decrease of 1% from the same quarter a year ago. New orders in this segment were $333 million for the reported quarter, reflecting an increase of 12% from last year.

On an organic basis, adjusting for the Philadelphia dealer sale and foreign-exchange translation, revenue was slightly below the same quarter last year, while orders were 7% higher. Orders from project sizes below $1 million were higher compared to last year, while projects above $1 million in size for slightly down year-on-year.

For Q3 FY17, Herman Miller’s ELA segment reported sales of $88 million, down 11% on a y-o-y basis. The Company’s new orders totaled $86 million, an amount 10% lower than the same quarter a year ago. Organically, excluding the impact of dealer divestiture and foreign-currency translation, segment sales were 1% below last year, while on the same measure new orders decreased approximately 2%.

Sales in Q3 FY17 within Herman Miller’s specialty segment were $54 million, down 1% from the same quarter last year. New orders for the reported quarter of $52 million were 3% lower than the year-ago comparable period and, excluding the impact of the price increase on order entry, organic order demand was 5% lower than last year.

Herman Miller’s consumer business reported sales in Q3 FY17 of $73 million, an increase of approximately 4% on a y-o-y basis. New orders for the reported quarter totaled $73 million and were 13% ahead compared to the year earlier corresponding quarter.

Balance Sheet

Herman Miller ended Q3 FY17 with total cash and cash equivalents of $78.4 million. Cash flow generated from operations in the reported quarter was $27.8 million compared to $52.7 million in the year ago same period, primarily due to changes in working capital.

Guidance

Herman Miller expects net sales in Q4 FY17 to be in the range of $575 million to $595 million. On an organic basis, adjusted for the impact of dealer divestitures and foreign currency translation, this forecast implies organic sales growth of 4.2% on a y-o-y basis at the mid-point of the range. Diluted earnings per share for the upcoming quarter are expected to range from $0.53 to $0.57 per share.

Stock Performance

At the closing bell, on Monday, April 03, 2017, Herman Miller’s stock declined 1.27%, ending the trading session at $31.15. A total volume of 337.50 thousand shares were traded at the end of the day. In the last month and previous twelve months, shares of the Company have advanced 2.30% and 6.60%, respectively. The Company’s shares are trading at a PE ratio of 14.39 and have a dividend yield of 2.18%. At Monday’s closing price, the stock’s net capitalization stands at $1.86 billion.

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