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Herman Miller's 3rd quarter profits hurt by slow down in government, health care orders

Thursday 22 March 2012

A slow down in orders from the Federal Government and health care sectors hurt Herman Miller's third quarter sales, the company reported on Wednesday.
Sales slipped 3.6 percent to $399.8 million for the quarter, ending March 3, compared with the same period last year.
Profits fell 24.9 percent to $14.9 million while earnings per share were down 10.2 percent to 26 cents per share, missing analysts expectations by one cent.
New orders were down 2.1 percent over last year, when the company owned more dealerships. When adjusted for that change, sales were up nearly 1 percent and orders up 3 percent in the third quarter.
While the office furniture maker's North American sales fell 9.8 percent to $280.2 million, international sales jumped 14.7 percent to $77.8 million, over the same period last year.
"Our financial results this quarter reflect the continued strength of our international business, particularly within Asia and Latin America," CEO Brian Walker said in a statement. "These emerging markets remain an important point of emphasis in our growth strategy."
Walker added that the company closed on its $50 million acquisition of the Hong Kong POSH Office Systems in Asia. The deal was announced a year ago.

Herman Miller forecasts fourth quarter earnings to range between 28 cents to 32 cents on sales of $415 million to $435 million, which are below analysts' current expectations.
The company is confident in future growth prospects because of solid year-over-year growth across North American customer groups, Walker said.
In the quarter, the company will begin shifting its employee retirement program from a defined benefit-based model to a defined contribution structure. The move will require spending up to $45 million to fund new retirement accounts, but will ultimately free up cash flow for strategic growth investments, Walker said.
Herman Miller's stock fell 49 cents, or 2.24 percent, to $21.41 on the Nasdaq in after hours trading.

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