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Herman Miller expects further revenue declines ahead

Thursday 26 March 2009

Brian Walker of Herman Miller Inc. expects business to continue falling off at least through midyear, following the industry trend nationwide.
While the Zeeland-based Herman Miller [Nasdaq: MLHR] opted once again not to offer guidance for when it reported sharply lower sales and a loss for the most recent quarter, President and CEO Brian Walker said he expects \"slightly lower\" revenues from one quarter to the next.

\"It remains difficult to predict demand with any level of certainty,\" Walker said during a conference call with brokerage analysts to discuss quarterly results. \"I will tell you though, we believe the recent decline in order levels may be here for some time and
we are planning for this probability.\"

While Herman Miller isn\'t offering guidance, analysts have predicted the company will post a similar year-to-year revenue decline with sales of $403 million for the present quarter that ends in May, compared to $519.1 million a year ago.

Analysts expect quarterly net income of 25 cents per share, versus 71 cents in the fourth quarter of the 2008 fiscal year.

Analysts expect a subsequent double-digit sales decline in the following quarter that runs through August.

Herman Miller last week reported sales for the third quarter of FY 2009 of $354.4 million, down 28.5 percent from the same period a year earlier.

The company posted a quarterly net loss of $52 million, or 18 cents per share, versus net income of $38.3 million, or 65 cents per share, a year earlier.

The loss included a $23.4 milion restructuring charge tied to cost-cutting efforts that eventually will trim operations by $110 million to $115 million annually.

Nine months through FY 2009, Herman Miller\'s sales totaled $1.31 billion, down 12.3 percent from the $1.49 billion through the third quarter of FY 2008.

Nine-month net income of $60.8 million, or $1.11 per share, was off 46.1 percent from the $112.8 million, or $186 per share, a year earlier.

Herman Miller\'s order rate for the quarter declined 38.5 percent and backlogged orders were off 32.7 percent.

The present office furniture industry outlook from BIFMA foresees a 19.3 decline in shipments in 2009, followed by a 1.1 percent decrease in 2010.

Industry leader Steelcase Inc. is scheduled to report its latest quarterly sales and earnings March 22.

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