Post Earnings Coverage as Herman Miller North American Business Dragged Q2 Results

Upcoming AWS Coverage on Kewaunee Scientific Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 30, 2016 / Active Wall St. announces its post-earnings coverage on Herman Miller, Inc. (NASDAQ: MLHR). The Company posted its second quarter fiscal 2017 (Q2 FY17) results on December 22, 2016. The Zeeland, Michigan-based Company’s organic net sales reported a 1.1% y-o-y growth in the reported quarter. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Herman Miller’s competitors within the Business Equipment space, Kewaunee Scientific Corp. (NASDAQ: KEQU), reported on December 06, 2016, results for its second quarter of fiscal 2017, ended October 31, 2016. AWS will be initiating a research report on Kewaunee Scientific in the coming days.

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

http://www.activewallst.com/registration-3/?symbol=MLHR

http://www.activewallst.com/registration-3/?symbol=KEQU

Earnings Reviewed

In Q2 FY17, Herman Miller reported net sales of $577.5 million, which came in marginally below the $580.4 million in the year ago same period. Net sales numbers for the reported quarter lagged behind market consensus estimates by $16.45 million. The Company’s organic net sales for Q3 FY16 came in at $581.9 million, up 1.1% from $575.5 million recorded in the year ago comparable quarter. New orders in Q2 FY17 amounted to $575.9 million, which were 4.2% below the prior year’s level of $601.4 million.

The furniture maker posted net earnings attributed to Herman Miller of $31.7 million, or $0.53 per diluted share, in Q2 FY17, compared to $34.7 million, or $0.57 per diluted share, reported in Q2 FY16. The Company’s Q2 FY17 adjusted earnings attributed to Herman Miller was down to $0.54 per diluted share from $0.57 per diluted share in the prior year’s same quarter. However, adjusted earnings per diluted share met the Company’s expectations.

Operational Metrics

Due to comparatively higher levels of price discounting and pressure from commodity costs, the Company’s gross margin fell 100 basis points to 37.7% from 38.7% in the year ago same quarter. The Company’s operating expenses were down by 0.9% to $167.4 million in Q2 FY17 from $168.9 million in Q2 FY16. Operating earnings as a percentage of net sales was also down to 8.6% in Q2 FY17 from 9.6% in the last year comparable period. Furthermore, the Company’s adjusted operating earnings as a percentage of net sales came in at 8.8% in Q2 FY17, versus 9.6% in Q2 FY16.

Segment Results

During Q2 FY17, Herman Miller’s North America segment’s net sales fell 5.3% to $329.5 million from $348.1 million in Q2 FY16. The segment’s operating earnings declined to $31.0 million, or 9.4% of segment net sales, in Q2 FY17 from $41.4 million, or 11.9% of segment net sales, in the year ago corresponding quarter.

Meanwhile, net sales at ELA segment rose 6.9% to $107.6 million in Q2 FY17 from $100.7 million in Q2 FY16. Furthermore, the segment’s operating earnings also improved during Q2 FY17 to $10.8 million, or 10.0% of segment net sales, from $7.3 million, or 7.2% of segment net sales, in last year’s comparable quarter.

The Company’s Specialty segment reported net sales of $60.8 million in Q2 FY17, an increase of 5.4% from $57.7 million recorded in the prior year’s same quarter. Additionally, the segment’s operating earnings rose to $5.9 million, or 9.7% of segment net sales, in Q2 FY17 from $4.2 million, or 7.3% of segment net sales, in Q2 FY16.

Herman Miller’s Consumer segment’s net sales increased to $79.6 million during Q2 FY17 from $73.9 million in Q2 FY16. However, the segment’s operating earnings fell to $1.8 million, or 2.3% of segment net sales, in Q2 FY17 from $2.7 million, or 3.7% of segment net sales, in the prior year’s same period.

Cash Flow and Liquidity

For the quarter ended December 03, 2016, the Company generated $60.0 million in cash from operations compared to $39.9 million in the same quarter last fiscal year. Furthermore, the Company reported total cash and cash equivalents of $67.7 million as on December 03, 2016.

Dividend and Share Repurchase

On October 10, 2016, Herman Miller’s Board of Directors announced a quarterly cash dividend of $0.17 per share, which will be payable on January 15, 2017, to stockholders of record on December 03, 2016.

Outlook

In its guidance for Q3 FY17, Herman Miller is forecasting net sales in the range of $520 million and $540 million. The Company’s gross margin for Q3 FY17 is likely to be in the range of 37.0% to 38.0%. The Company expects operating expenses during the upcoming quarter to be between $164 million and $168 million. Furthermore, diluted earnings for Q3 FY17 are expected to be in the range of $0.31 per share to $0.35 per share.

Stock Performance

Herman Miller’s share price finished yesterday’s trading session at $34.60, climbing 1.76%. A total volume of 243.95 thousand shares exchanged hands. The stock has advanced 21.85% and 16.90% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have surged 23.04%. The stock is trading at a PE ratio of 15.36 and has a dividend yield of 1.97%.

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