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Herman Miller profit falls 28% but demand returning to normal

Thursday 17 December 2009

Herman Miller Inc.\'s fiscal second-quarter profit fell 28%, but the office-furniture maker said it saw a return to normal demand trends during the quarter.
\"The relative strength of orders within our retail, health-care, and international entities was particularly encouraging. While we still have a long way to go, this order pacing is a welcomed indicator that market conditions are showing signs of improvement,\" Chief Financial Officer Greg Bylsma said, although he added that pricing pressure increased.
Demand for office furniture has slumped as businesses cut spending during the recession, but Herman Miller has seen signs of the market stabilizing. The company has consolidated manufacturing and repurchased higher-yield debt to improve its bottom line. It also moved into the health-care furniture business by acquiring Nemschoff Inc. in June.
For the quarter ended November 28, Herman Miller reported a profit of $9.6 million, or 17 cents a share, down from $32.6 million, or 60 cents a share, a year earlier. Excluding restructuring charges, per-share earnings were 20 cents in the latest period.
Revenue dropped 28% to $343.7 million.
Analysts estimated adjusted earnings of 20 cents on revenue of $334.5 million, according to a poll by Thomson Reuters.
Gross margin ticked down to 32.2% from 32.6%.
Orders dropped 19% from a year ago but were up 7.3% sequentially. Backlog was down 17% from a year earlier.
Herman Miller\'s shares were unchanged from the Wednesday close of $16.78. The stock has more than doubled in value from a 13-year low in March.

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