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Herman Miller Q4 Profit Tumbles

Tuesday 23 June 2009

Herman Miller Inc. (MLHR: News ), Wednesday said its profit for the fourth quarter slumped from a year ago, hurt by a huge drop in quarterly sales reflecting weaker demand, amid the economic downturn. Orders were down 34.9% for the quarter, while North American sales declined 35.1%. The furniture maker, separately, said it completed the acquisition of Nemschoff, while tendering an offer to retire up to $75 million aggregate principal amount of its outstanding 7.125% Notes due 2011. The company also amended its Unsecured Revolving Credit Facility.

For the fourth quarter, net earnings of Herman Miller plummeted to $7.2 million or $0.14 per share from $39.5 million or $0.71 per share in the corresponding quarter last year.

Quarterly results reflect restructuring charges of $4.6 million on actions taken to adjust cost structure to the current business climate. Excluding restructuring charges, adjusted earnings were equal to $0.20 per share, compared to $0.71 per share in the year-earlier quarter.

On average, four analysts polled by Thomson Reuters expected earnings of $0.18 per share for the quarter. Analysts\' estimate typically excludes one-time items.

The Zeeland, Michigan-based company\'s net sales for the quarter plunged 38.4% to $319.9 million from $519.1 million in the same quarter a year ago, coming in below Street estimates of $339.03 million.

Greg Bylsma, Chief Financial Officer said, \"Business levels this quarter reflect the economic slow down facing most industries today.\"

In the sequentially preceding third quarter, Herman Miller reported a slip to loss of $5.2 million or $0.10 per share, as sales declined 28.5% to $354.4 million from the comparable quarter last year.

Among others in the industry, HNI Corp. (HNI) in April slipped to a loss of $11.89 million or $0.27 per share in the first quarter, as sales witnessed a 28% decline to $405.67 million. Another peer, Steelcase Inc. (SCS) reported a break-even net income for the first quarter of fiscal 2010. Net income for the quarter was $22.1 million or $0.16 per share, while revenue declined 33.1% to $545.6 million from the same quarter a year ago.

Herman Miller\'s North American sales for the quarter under review declined 35.1% to $268.3 million in the prior year, while non-North American sales were $44.1 million, a 53.4% decline from a year ago. Sales were also impacted by the foreign currency translation, reducing sales by $9.5 million.

Orders for the quarter were $324.1 million, down 34.9% from a year ago, with North American orders declining 33.4% and non-North American orders dropping 45.4% over the prior year.

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