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Herman Miller 1st quarter profits up 13%

Thursday 19 September 2013

Herman Miller Inc.'s 1st quarter earnings rose 13% as results beat the office-furniture company's expectations helped by higher margins and 4.1% sales growth, particularly outside its core North American business.
For the current fiscal period, Herman Miller expects adjusted per-share earnings of 38 cents to 42 cents on revenue in the range of $460 million to $475 million, below recent estimates of earnings of 45 cents and revenue of $490 million from analysts polled by Thomson Reuters.
The company said it expects to complete the final phase of its legacy pension termination in its fiscal second quarter, with an expected $170 million in additional pre-tax expenses and $53 million in cash contributions to pensions. Due to the pension costs, the company said it expects to post a per-share unadjusted loss of $1.43 to $1.39 in the quarter.
Herman Miller has been focusing on growth in Asia and Latin America. Yet, the company has been pressured recently by weakness in US government and health-care markets as well international economic challenges.
The company, which helped spawn the cubicle craze more than 40 years ago, is now introducing new designs as companies adapt workspaces to changing needs. Such office layouts feature lower walls between desks, or even no walls.
"This quarter's performance reflects continued progress in the execution of our strategy, with a strong contribution from the higher margin growth categories and related channels where we have been steadily expanding our presence," Chief Executive Brian Walker said.
For the quarter ended Aug. 31, Herman Miller reported a profit of $22.5 million, or 38 cents a share, up from $20 million, or 34 cents a share, a year earlier. Excluding charges related to its legacy pension plan and other items, adjusted earnings were up at 43 cents from 37 cents. Revenue increased 4.1% to $468.1 million.
The company in June forecast adjusted earnings of 32 cents to 37 cents a share, below analysts' expectations at the time. The company also said it expected revenue of $430 million to $450 million. Gross margins widened to 36.3% from 33.3%.
North American sales fell 0.7% to $318.2 million. In its much smaller business outside North America, sales increased 14% to $81.6 million.
New orders were up 4.2% at $471.2 million from a year earlier. Backlog declined 1.6% to $275.7 million.
Shares were up five cents to $27.08 after hours. Through Wednesday's close, the stock is up 26% this year

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