[ X ]
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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[__]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For Fiscal Year Ended May 30, 2015
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Commission File No. 001-15141
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Michigan
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38-0837640
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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855 East Main Avenue
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PO Box 302
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Zeeland, Michigan
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49464-0302
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(Address of principal
executive offices)
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(Zip Code)
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Yes [ X ] No [__]
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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Yes [__] No [ X ]
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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Yes [ X ] No [__]
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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
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Yes [ X ] No [__]
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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Yes [__] No [ X ]
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Page No.
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Part I
|
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Item 1 Business
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Item 1A Risk Factors
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Item 1B Unresolved Staff Comments
|
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Item 2 Properties
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Item 3 Legal Proceedings
|
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Additional Item: Executive Officers of the Registrant
|
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Item 4 Mine Safety Disclosures
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Part II
|
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Item 5 Market for the Registrant's Common Equity, Related Stockholder Matters, and
|
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Issuer Purchases of Equity Securities
|
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Item 6 Selected Financial Data
|
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Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations
|
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Item 7A Quantitative and Qualitative Disclosures about Market Risk
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Item 8 Financial Statements and Supplementary Data
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Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
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Item 9A Controls and Procedures
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Item 9B Other Information
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Part III
|
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Item 10 Directors, Executive Officers, and Corporate Governance
|
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Item 11 Executive Compensation
|
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Item 12 Security Ownership of Certain Beneficial Owners and Management and Related
|
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Stockholder Matters
|
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Item 13 Certain Relationships and Related Transactions, and Director Independence
|
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Item 14 Principal Accountant Fees and Services
|
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Part IV
|
|
Item 15 Exhibits and Financial Statement Schedule
|
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Signatures
|
|
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule
|
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Schedule II Valuation and Qualifying Accounts
|
|
Exhibit Index
|
•
|
Political, social, and economic conditions
|
•
|
Legal and regulatory requirements
|
•
|
Labor and employment practices
|
•
|
Cultural practices and norms
|
•
|
Natural disasters
|
•
|
Security and health concerns
|
•
|
Protection of intellectual property
|
•
|
Changes in foreign currency exchange rates
|
•
|
General economic conditions
|
•
|
Identification and availability of suitable studio locations
|
•
|
Success in negotiating new leases and amending or terminating existing leases on acceptable terms
|
•
|
The success of other retailers in and around our retail locations
|
•
|
Ability to secure required governmental permits and approvals
|
•
|
Hiring and training skilled studio operating personnel
|
•
|
Landlord financial stability
|
Name
|
Age
|
Year Elected an Executive Officer
|
Position with the Company
|
Brian C. Walker
|
53
|
1996
|
President and Chief Executive Officer
|
Andrew J. Lock
|
61
|
2003
|
Executive Vice President, President, International
|
Donald D. Goeman
|
58
|
2005
|
Executive Vice President, Research, Design & Development
|
Gregory J. Bylsma
|
50
|
2009
|
Executive Vice President, Chief Operating Officer Herman Miller North America (Work and Learning)
|
Steven C. Gane
|
60
|
2009
|
Senior Vice President, President, Geiger & Specialty/Consumer
|
Jeffrey M. Stutz
|
44
|
2009
|
Executive Vice President, Chief Financial Officer
|
B. Ben Watson
|
50
|
2010
|
Executive Creative Director
|
Michael F. Ramirez
|
50
|
2011
|
Senior Vice President, People, Places and Administration
|
Louise McDonald
|
60
|
2013
|
Executive Vice President, President, Healthcare
|
H. Timothy Lopez
|
44
|
2014
|
Senior Vice President, Legal Services and Secretary
|
Jeffrey L. Kurburski
|
49
|
2014
|
Vice President, Information Technology
|
John Edelman
|
48
|
2015
|
Executive Vice President and Chief Executive Officer, Design Within Reach, Inc.
|
John McPhee
|
52
|
2015
|
Executive Vice President and President, Design Within Reach, Inc.
|
Kevin Veltman
|
40
|
2015
|
Vice President, Investor Relations and Treasurer
|
Malisa Bryant
|
48
|
2015
|
Senior Vice President of Sales and Distribution, Herman Miller North America (Work and Learning)
|
Per Share and Unaudited
|
Market
Price
High
(at close)
|
|
|
Market
Price
Low
(at close)
|
|
|
Market
Price
Close
|
|
|
Earnings (loss)
Per Share-
Diluted
(1)
|
|
|
Dividends
Declared Per
Share
|
|
|||||
Year ended May 30, 2015:
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter
|
$
|
32.26
|
|
|
$
|
28.69
|
|
|
$
|
29.72
|
|
|
$
|
0.42
|
|
|
$
|
0.140
|
|
Second quarter
|
32.12
|
|
|
28.44
|
|
|
30.39
|
|
|
0.46
|
|
|
0.140
|
|
|||||
Third quarter
|
31.89
|
|
|
27.69
|
|
|
30.97
|
|
|
0.35
|
|
|
0.140
|
|
|||||
Fourth quarter
|
31.20
|
|
|
27.12
|
|
|
27.70
|
|
|
0.39
|
|
|
0.140
|
|
|||||
Year
|
$
|
32.26
|
|
|
$
|
27.12
|
|
|
$
|
27.70
|
|
|
$
|
1.62
|
|
|
$
|
0.560
|
|
Year ended May 31, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter
|
$
|
29.13
|
|
|
$
|
25.47
|
|
|
$
|
25.47
|
|
|
$
|
0.38
|
|
|
$
|
0.125
|
|
Second quarter
|
31.91
|
|
|
25.56
|
|
|
31.91
|
|
|
(1.37
|
)
|
|
0.125
|
|
|||||
Third quarter
|
30.95
|
|
|
26.47
|
|
|
28.18
|
|
|
0.33
|
|
|
0.140
|
|
|||||
Fourth quarter
|
32.43
|
|
|
27.83
|
|
|
31.27
|
|
|
0.28
|
|
|
0.140
|
|
|||||
Year
|
$
|
32.43
|
|
|
$
|
25.47
|
|
|
$
|
31.27
|
|
|
$
|
(0.37
|
)
|
|
$
|
0.530
|
|
Period
|
(a) Total Number of
Shares (or Units) Purchased
|
|
|
(b) Average Price Paid
per Share or Unit
|
|
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
|
(d) Maximum Number (or
Approximate Dollar
Value) of Shares (or
Units) that May Yet be
Purchased Under the
Plans or Programs
(1)
|
|
|
3/1/15-3/28/15
|
850
|
|
|
28.06
|
|
|
850
|
|
|
$
|
146,949,608
|
|
3/29/15-4/25/15
|
1,478
|
|
|
28.50
|
|
|
1,478
|
|
|
$
|
146,907,485
|
|
4/26/15-5/30/15
|
12,467
|
|
|
28.11
|
|
|
12,467
|
|
|
$
|
146,557,022
|
|
Total
|
14,795
|
|
|
|
|
|
14,795
|
|
|
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
Herman Miller, Inc.
|
$
|
100
|
|
|
$
|
129
|
|
|
$
|
96
|
|
|
$
|
152
|
|
|
$
|
170
|
|
|
$
|
151
|
|
S&P 500 Index
|
$
|
100
|
|
|
$
|
122
|
|
|
$
|
117
|
|
|
$
|
150
|
|
|
$
|
177
|
|
|
$
|
193
|
|
NASD Non-Financial
|
$
|
100
|
|
|
$
|
127
|
|
|
$
|
128
|
|
|
$
|
158
|
|
|
$
|
197
|
|
|
$
|
238
|
|
Review of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions, except key ratios and per share data)
|
2015
|
|
2014
|
2013
|
|
2012
|
|
2011
|
|
||||||||||
Operating Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,142.2
|
|
|
$
|
1,882.0
|
|
$
|
1,774.9
|
|
|
$
|
1,724.1
|
|
|
$
|
1,649.2
|
|
|
Gross margin
|
791.4
|
|
|
631.0
|
|
605.2
|
|
|
590.6
|
|
|
538.1
|
|
|
|||||
Selling, general, and administrative
(8)
|
556.6
|
|
|
590.8
|
|
430.4
|
|
|
400.3
|
|
|
369.0
|
|
|
|||||
Design and research
|
71.4
|
|
|
65.9
|
|
59.9
|
|
|
52.7
|
|
|
45.8
|
|
|
|||||
Operating earnings (loss)
|
163.4
|
|
|
(25.7
|
)
|
114.9
|
|
|
137.6
|
|
|
123.3
|
|
|
|||||
Earnings (loss) before income taxes
|
145.2
|
|
|
(43.4
|
)
|
97.2
|
|
|
119.5
|
|
|
102.5
|
|
|
|||||
Net earnings (loss)
|
98.1
|
|
|
(22.1
|
)
|
68.2
|
|
|
75.2
|
|
|
70.8
|
|
|
|||||
Cash flow from operating activities
|
167.7
|
|
|
90.1
|
|
136.5
|
|
|
90.1
|
|
|
89.0
|
|
|
|||||
Cash flow used in investing activities
|
(213.6
|
)
|
|
(48.2
|
)
|
(209.7
|
)
|
|
(58.4
|
)
|
|
(31.4
|
)
|
|
|||||
Cash flow used in financing activities
|
6.8
|
|
|
(22.4
|
)
|
(16.0
|
)
|
|
(1.6
|
)
|
|
(50.2
|
)
|
|
|||||
Depreciation and amortization
|
49.8
|
|
|
42.4
|
|
37.5
|
|
|
37.2
|
|
|
39.1
|
|
|
|||||
Capital expenditures
|
63.6
|
|
|
40.8
|
|
50.2
|
|
|
28.5
|
|
|
30.5
|
|
|
|||||
Common stock repurchased plus cash dividends paid
|
37.1
|
|
|
43.0
|
|
22.7
|
|
|
7.9
|
|
|
6.0
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Key Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales growth
|
13.8
|
%
|
|
6.0
|
%
|
2.9
|
%
|
|
4.5
|
%
|
|
25.1
|
%
|
|
|||||
Gross margin
(1)
|
36.9
|
|
|
33.5
|
|
34.1
|
|
|
34.3
|
|
|
32.6
|
|
|
|||||
Selling, general, and administrative
(1) (8)
|
26.0
|
|
|
31.4
|
|
24.3
|
|
|
23.2
|
|
|
22.4
|
|
|
|||||
Design and research
(1)
|
3.3
|
|
|
3.5
|
|
3.4
|
|
|
3.1
|
|
|
2.8
|
|
|
|||||
Operating earnings
(1)
|
7.6
|
|
|
(1.4
|
)
|
6.5
|
|
|
8.0
|
|
|
7.5
|
|
|
|||||
Net earnings growth (decline)
|
543.9
|
|
|
(132.4
|
)
|
(9.3
|
)
|
|
6.2
|
|
|
150.2
|
|
|
|||||
After-tax return on net sales
(4)
|
4.6
|
|
|
(1.2
|
)
|
3.8
|
|
|
4.4
|
|
|
4.3
|
|
|
|||||
After-tax return on average assets
(5)
|
9.0
|
|
|
(2.3
|
)
|
7.6
|
|
|
9.1
|
|
|
9.0
|
|
|
|||||
After-tax return on average equity
(6)
|
24.5
|
%
|
|
(6.4
|
)%
|
24.0
|
%
|
|
33.2
|
%
|
|
49.7
|
%
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Share and Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per share-diluted
|
$
|
1.62
|
|
|
$
|
(0.37
|
)
|
$
|
1.16
|
|
|
$
|
1.29
|
|
|
$
|
1.06
|
|
|
Cash dividends declared per share
|
0.56
|
|
|
0.53
|
|
0.43
|
|
|
0.09
|
|
|
0.09
|
|
|
|||||
Book value per share at year end
|
7.18
|
|
|
6.27
|
|
5.44
|
|
|
4.25
|
|
|
3.53
|
|
|
|||||
Market price per share at year end
|
27.70
|
|
|
31.27
|
|
28.11
|
|
|
17.87
|
|
|
24.56
|
|
|
|||||
Weighted average shares outstanding-diluted
|
60.1
|
|
|
59.0
|
|
58.8
|
|
|
58.5
|
|
|
57.7
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Condition
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,188.2
|
|
|
$
|
990.9
|
|
$
|
946.5
|
|
|
$
|
839.1
|
|
|
$
|
808.0
|
|
|
Working capital
(3)
|
112.6
|
|
|
145.7
|
|
109.3
|
|
|
201.6
|
|
|
205.9
|
|
|
|||||
Current ratio
(2)
|
1.3
|
|
|
1.3
|
|
1.4
|
|
|
1.8
|
|
|
1.8
|
|
|
|||||
Interest-bearing debt and related swap agreements
|
290.0
|
|
|
250.0
|
|
250.0
|
|
|
250.0
|
|
|
250.0
|
|
|
|||||
Stockholders' equity
|
428.1
|
|
|
372.1
|
|
319.5
|
|
|
248.3
|
|
|
205.0
|
|
|
|||||
Total capital
(7)
|
718.1
|
|
|
622.1
|
|
569.5
|
|
|
498.3
|
|
|
455.0
|
|
|
Review of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions, except key ratios and per share data)
|
2010
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
||||||||||
Operating Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
1,318.8
|
|
$
|
1,630.0
|
|
|
$
|
2,012.1
|
|
|
$
|
1,918.9
|
|
|
$
|
1,737.2
|
|
|
Gross margin
|
428.5
|
|
527.7
|
|
|
698.7
|
|
|
645.9
|
|
|
574.8
|
|
|
|||||
Selling, general, and administrative
(8)
|
334.4
|
|
359.2
|
|
|
400.9
|
|
|
395.8
|
|
|
371.7
|
|
|
|||||
Design and research
|
40.5
|
|
45.7
|
|
|
51.2
|
|
|
52.0
|
|
|
45.4
|
|
|
|||||
Operating earnings
|
53.6
|
|
122.8
|
|
|
246.6
|
|
|
198.1
|
|
|
157.7
|
|
|
|||||
Earnings before income taxes
|
34.8
|
|
98.9
|
|
|
230.4
|
|
|
187.0
|
|
|
147.6
|
|
|
|||||
Net earnings
|
28.3
|
|
68.0
|
|
|
152.3
|
|
|
129.1
|
|
|
99.2
|
|
|
|||||
Cash flow from operating activities
|
98.7
|
|
91.7
|
|
|
213.6
|
|
|
137.7
|
|
|
150.4
|
|
|
|||||
Cash flow used in investing activities
|
(77.6
|
)
|
(29.5
|
)
|
|
(51.0
|
)
|
|
(37.4
|
)
|
|
(47.6
|
)
|
|
|||||
Cash flow used in financing activities
|
(78.9
|
)
|
(16.5
|
)
|
|
(86.5
|
)
|
|
(131.5
|
)
|
|
(151.4
|
)
|
|
|||||
Depreciation and amortization
|
42.6
|
|
41.7
|
|
|
43.2
|
|
|
41.2
|
|
|
41.6
|
|
|
|||||
Capital expenditures
|
22.3
|
|
25.3
|
|
|
40.5
|
|
|
41.3
|
|
|
50.8
|
|
|
|||||
Common stock repurchased plus cash dividends paid
|
5.7
|
|
19.5
|
|
|
287.9
|
|
|
185.6
|
|
|
175.4
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Key Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales growth (decline)
|
(19.1
|
)%
|
(19.0
|
)%
|
|
4.9
|
%
|
|
10.5
|
%
|
|
14.6
|
%
|
|
|||||
Gross margin
(1)
|
32.5
|
|
32.4
|
|
|
34.7
|
|
|
33.7
|
|
|
33.1
|
|
|
|||||
Selling, general, and administrative
(1) (8)
|
25.4
|
|
22.0
|
|
|
19.9
|
|
|
20.6
|
|
|
21.4
|
|
|
|||||
Design and research
(1)
|
3.1
|
|
2.8
|
|
|
2.5
|
|
|
2.7
|
|
|
2.6
|
|
|
|||||
Operating earnings
(1)
|
4.1
|
|
7.5
|
|
|
12.3
|
|
|
10.3
|
|
|
9.1
|
|
|
|||||
Net earnings growth (decline)
|
(58.4
|
)
|
(55.4
|
)
|
|
18.0
|
|
|
30.1
|
|
|
45.9
|
|
|
|||||
After-tax return on net sales
(4)
|
2.1
|
|
4.2
|
|
|
7.6
|
|
|
6.7
|
|
|
5.7
|
|
|
|||||
After-tax return on average assets
(5)
|
3.7
|
|
8.8
|
|
|
21.0
|
|
|
19.4
|
|
|
14.4
|
|
|
|||||
After-tax return on average equity
(6)
|
64.2
|
%
|
433.1
|
%
|
|
170.5
|
%
|
|
87.9
|
%
|
|
64.2
|
%
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Share and Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share-diluted
|
$
|
0.43
|
|
$
|
1.25
|
|
|
$
|
2.56
|
|
|
$
|
1.98
|
|
|
$
|
1.45
|
|
|
Cash dividends declared per share
|
0.09
|
|
0.29
|
|
|
0.35
|
|
|
0.33
|
|
|
0.31
|
|
|
|||||
Book value per share at year end
|
1.41
|
|
0.15
|
|
|
0.42
|
|
|
2.47
|
|
|
2.10
|
|
|
|||||
Market price per share at year end
|
19.23
|
|
14.23
|
|
|
24.80
|
|
|
36.53
|
|
|
30.34
|
|
|
|||||
Weighted average shares outstanding-diluted
|
57.5
|
|
54.5
|
|
|
59.6
|
|
|
65.1
|
|
|
68.5
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Condition
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
770.6
|
|
$
|
767.3
|
|
|
$
|
783.2
|
|
|
$
|
666.2
|
|
|
$
|
668.0
|
|
|
Working capital
(3)
|
182.9
|
|
243.7
|
|
|
182.7
|
|
|
103.2
|
|
|
93.8
|
|
|
|||||
Current ratio
(2)
|
1.3
|
|
1.6
|
|
|
1.6
|
|
|
1.4
|
|
|
1.3
|
|
|
|||||
Interest-bearing debt and related swap agreements
|
301.2
|
|
377.4
|
|
|
375.5
|
|
|
176.2
|
|
|
178.8
|
|
|
|||||
Stockholders' equity
|
80.1
|
|
8.0
|
|
|
23.4
|
|
|
155.3
|
|
|
138.4
|
|
|
|||||
Total capital
(7)
|
381.3
|
|
385.4
|
|
|
398.9
|
|
|
331.5
|
|
|
317.2
|
|
|
•
|
North American Furniture Solutions
— Includes the operations associated with the design, manufacture, and sale of furniture products for work-related settings, including office, education, and healthcare environments, throughout the United States and Canada. The North American Furniture Solutions reportable segment is the aggregation of two operating segments. In addition, the company has determined that both operating segments within the North American Furniture Solutions reportable segment represent reporting units.
|
•
|
ELA Furniture Solution
s — ELA Furniture Solutions includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in the EMEA, Latin America, and Asia-Pacific geographic regions.
|
•
|
Specialty
— Includes the operations associated with design, manufacture, and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles, and Herman Miller Collection products.
|
•
|
Consumer
— Includes the operations associated with the sale of modern design furnishings and accessories to third party retail distributors, as well as direct to consumer sales through eCommerce, direct mailing catalogs, and DWR studios.
|
•
|
Brands -
The Herman Miller brand is recognized by customers as a pioneer in design and sustainability, and as an advocate that supports their needs and interests. Within the industries the company operates, Herman Miller, DWR, Geiger, Maharam, POSH, Nemschoff and Colbrook Bosson Saunders (CBS) are acknowledged as leading brands that inspire architects and designers to create their best design solutions. Leveraging the company's brand equity across the lines of business to extend the company's reach to customers and consumers is an important element of the company's business strategy.
|
•
|
Problem-Solving Design and Innovation
- The company is committed to developing research-based functionality and aesthetically innovative new products and has a history of doing so, in collaboration with a global network of leading independent designers. The company believes its skills and experience in matching problem-solving design with the workplace needs of customers provides the company with a competitive advantage in the marketplace. An important component of the company's business strategy is to actively pursue a program of new product research, design, and development. The company accomplishes this through the use of an internal research and engineering staff that engages with third party design resources generally compensated on a royalty basis.
|
•
|
Operational Excellence
- The company was among the first in our industry to embrace the concepts of lean manufacturing. HMPS provides the foundation for all of our manufacturing operations. The company is committed to continuously improving both product quality and production and operational efficiency. The company has extended this lean process work to its non-manufacturing processes as well as externally to our manufacturing supply chain and distribution channel. The company believes these concepts hold significant promise for further gains in reliability, quality and efficiency.
|
•
|
Building and Leading Networks
- The company values relationships in all areas of the business. The company considers its network of innovative designers, owned and independent dealers, and suppliers to be among the most important competitive factors and vital to the long-term success of the business.
|
•
|
Independent and Owned Contract Furniture Dealers
- Most of the company's product sales are made to a network of independently owned and operated contract furniture dealerships doing business in many countries around the world. These dealers purchase the company's products and distribute them to end customers. The company recognizes revenue on product sales through this channel once products are shipped and title passes to the dealer. Many of these dealers also offer furniture-related services, including product installation.
|
•
|
Direct Customer Sales
- The company also sells products and services directly to end customers without an intermediary (e.g. sales to the U.S. federal government). In most of these instances, the company contracts separately with a dealership or third-party installation company to provide sales-related services. The company recognizes revenue on these sales once products are shipped and installation is substantially complete.
|
•
|
DWR Retail Studios
- At the end of fiscal 2015 DWR had 33 retail studio and two outlet locations located in metropolitan cities throughout the United States. Revenue on sales from these studios is recognized upon delivery to the end customer.
|
•
|
E-Commerce
- The company sells products through its online stores, in which products are available for sale via the company's website, hermanmiller.com as well as through the DWR online store, dwr.com. These sites complement our existing methods of distribution and extend the company's brand to new customers. The company recognizes revenue on these sales either upon shipment of the product, or for sales through the DWR online store, upon product delivery to the end customer.
|
•
|
DWR Direct-Mail Catalogs
- The company’s consumer business unit utilizes a direct-mail catalog program through its DWR subsidiary. A regular schedule of catalog mailings is maintained throughout the fiscal year and these serve as a key driver of sales across each of DWR’s channels, including retail studios and eCommerce websites. Revenue on sales transacted through this catalog program is recognized upon product delivery to the end customer.
|
•
|
Independent Retailers
- Certain products are sold to end customers through independent retail operations. Revenue is recognized on these sales once products are shipped and title passes to the independent retailer.
|
•
|
Globalization & Demographics
— Demographic shifts in the global workforce are significantly changing how and where value creation happens. Not only has the millennial generation overtaken the majority representation of the workforce, but economies that once relied on industrial production are increasingly becoming driven by knowledge work.
|
•
|
Inherently Global & Seamlessly Digital
— The ubiquity of technology allows people to connect with other people, content, work, businesses, and ideas wherever and whenever they want. This means the way people work is changing, where people work is changing, and how people work with each other is changing.
|
•
|
The Era of Ideas
— With the ongoing optimization of industrial production and information sharing, the demand for more innovative business solutions increases. The global focus of work is shifting to the successful generation and deployment of new ideas. As creativity and idea generation drive greater value - people, not process, provide the distinguishing capability. In this shift, workplaces are fundamentally changing from standardized and process-driven designs to diverse places that harness human capability, creativity, and relationships.
|
•
|
From Product Centric to Solutions
— The first strategic shift is to move from a product centric focus to one based upon delivering broader solutions to our customers. Herman Miller is retooling its core business to speak to customers with fresh insights, to spur new demand, and to change the game with unique solutions and services.
|
•
|
From North America Centric to Global
— The second shift in our strategy aims to transform the business into a truly global organization. Herman Miller has a solid existing customer base, but we see meaningful opportunity in emerging markets with supportive demographics. We’re positioning ourselves to take maximum advantage of these shifts.
|
•
|
From The Office to Everywhere
— We describe the third fundamental strategic shift as moving from the office to everywhere. Herman Miller envisions continued leadership and viability in the contract furniture industry, but also sees distinct targeted opportunities through focused market segmentation. We envision a total offering for customers to enable “a lifestyle of purpose.”
|
•
|
From Industry brand to Industry + Consumer brand
— The fourth shift in our strategy involves our ambition to expand the connection of our powerful brand more directly with the consumers of our products. With a legacy of decades of design leadership, Herman Miller is a brand that people desire and want to know. We envision a business that harnesses our brand vision to pull consumers to us.
|
•
|
We acquired Design Within Reach (DWR) and combined it with our existing eCommerce and wholesale consumer business in order to form a new consumer-focused business unit. This represented an important step in our strategy to extend the reach of our brand into the consumer and design trade markets. It also represented a step toward our goal of enhancing the awareness and connection of the Herman Miller brand to the users and specifiers of products sold within our core contract furniture business (an ambition we refer to as shifting from an “Industry” to “Industry+Consumer” focus).
|
•
|
We also invested in new products as we continued to implement and refine our Living Office initiative and continued to address strategic gaps in our product portfolio. During the year, we invested heavily in training for both our sales force and our dealers in this insight-led approach. Significant investments were also made in the product portfolio supporting Living Office, including the Mirra 2 chair, Locale, Public Office Landscape, Renew Sit-to-Stand tables, and Canvas Dock. These steps represent a move forward in establishing a leadership position in the new landscape of work, and we’ve been encouraged by the positive reaction from our customers, designers, and dealers. Our beliefs supporting the Living Office strategy and product offering were further confirmed by recognition that we received at the annual NeoCon trade show, which was held in June 2015 in Chicago. Our showroom and its demonstration of purposeful, real-world, Living Office applications was recognized by the International Interior Design Association (IIDA) and Contract magazine’s Showroom & Booth Design Competition as the best large showroom for the third consecutive year.
|
•
|
We also continued to expand our global manufacturing capabilities as we broke ground on our consolidated manufacturing and distribution site in the United Kingdom, which is expected to be operational in late summer 2015. We are also nearing completion on construction of a new leased manufacturing and assembly facility outside Bangalore, India, which we also expect to be operational this summer.
|
•
|
Expenses associated with restructuring actions taken to adjust our cost structure to the current business climate
|
•
|
Transition-related expenses, including amortization and settlement expenses, relating to defined benefit pension plans that we terminated during fiscal 2014
|
•
|
Expenses associated with acquisition-related inventory adjustments
|
•
|
Transaction expenses associated with recent acquisitions
|
•
|
Non-cash impairment expenses
|
•
|
Changes in contingent consideration, and
|
•
|
Impact of one-time tax items
|
|
Fiscal Year Ended
|
|||||
(Dollars in millions)
|
May 30, 2015
|
May 31, 2014
|
||||
Gross margin
|
$
|
791.4
|
|
$
|
631.0
|
|
Percentage of net sales
|
36.9
|
%
|
33.5
|
%
|
||
Add: Acquisition-related inventory adjustments
|
7.8
|
|
1.4
|
|
||
Add: Legacy pension expenses
|
—
|
|
51.3
|
|
||
Adjusted gross margin
|
$
|
799.2
|
|
$
|
683.7
|
|
|
|
|
||||
Adjusted gross margin as a percentage of net sales
|
37.3
|
%
|
36.3
|
%
|
|
Fiscal Year Ended
|
|||||
(Dollars in millions)
|
May 30, 2015
|
May 31, 2014
|
||||
Operating expenses
|
$
|
628.0
|
|
$
|
656.7
|
|
Percentage of net sales
|
29.3
|
%
|
34.9
|
%
|
||
Less: Restructuring and impairment expenses
|
(12.7
|
)
|
(26.5
|
)
|
||
Add: POSH contingent consideration
|
—
|
|
2.6
|
|
||
Less: Acquisition expenses
|
(2.2
|
)
|
—
|
|
||
Less: Legacy pension expenses
|
—
|
|
(113.1
|
)
|
||
Adjusted operating expenses
|
$
|
613.1
|
|
$
|
519.7
|
|
|
|
|
||||
Adjusted operating expenses as a percentage of net sales
|
28.6
|
%
|
27.6
|
%
|
|
Fiscal Year Ended
|
|||||
(Dollars In millions)
|
May 30, 2015
|
May 31, 2014
|
||||
Operating earnings (loss)
|
$
|
163.4
|
|
$
|
(25.7
|
)
|
Percentage of net sales
|
7.6
|
%
|
(1.4
|
)%
|
||
Add: Restructuring and impairment expense
|
12.7
|
|
26.5
|
|
||
Add: Acquisition-related inventory adjustments
|
7.8
|
|
1.4
|
|
||
Add: Acquisition expenses
|
2.2
|
|
—
|
|
||
Add: Legacy pension expenses
|
—
|
|
164.4
|
|
||
Less: POSH contingent consideration
|
—
|
|
(2.6
|
)
|
||
Adjusted operating earnings
|
$
|
186.1
|
|
$
|
164.0
|
|
Percentage of net sales
|
8.7
|
%
|
8.7
|
%
|
||
Other Income / (Expense), net
|
(0.7
|
)
|
(0.1
|
)
|
||
Add: Depreciation and amortization
|
49.8
|
|
42.4
|
|
||
Adjusted EBITDA
|
$
|
235.2
|
|
$
|
206.3
|
|
Percentage of net sales
|
11.0
|
%
|
11.0
|
%
|
|
Fiscal Year Ended
|
|||||
|
May 30, 2015
|
May 31, 2014
|
||||
Earnings (loss) per share – diluted
|
$
|
1.62
|
|
$
|
(0.37
|
)
|
Add: Restructuring and impairment expense
|
0.17
|
|
0.32
|
|
||
Add: Acquisition-related inventory adjustments
|
0.08
|
|
0.01
|
|
||
Add: Acquisition expenses
|
0.02
|
|
—
|
|
||
Add: Legacy pension expenses
|
—
|
|
1.76
|
|
||
Less: POSH contingent consideration
|
—
|
|
(0.04
|
)
|
||
Less: One-time tax impact
|
(0.07
|
)
|
—
|
|
||
Adjusted earnings per share – diluted
|
$
|
1.82
|
|
$
|
1.68
|
|
(Dollars In millions)
|
Fiscal 2015
|
|
% Change from 2014
|
|
Fiscal 2014
|
|
% Change from 2013
|
|
Fiscal 2013
|
||||||||
52 weeks
|
|
|
52 weeks
|
|
|
52 weeks
|
|||||||||||
Net sales
|
$
|
2,142.2
|
|
|
13.8
|
%
|
|
$
|
1,882.0
|
|
|
6.0
|
%
|
|
$
|
1,774.9
|
|
Cost of sales
|
1,350.8
|
|
|
8.0
|
%
|
|
1,251.0
|
|
|
7.0
|
%
|
|
1,169.7
|
|
|||
Gross margin
|
791.4
|
|
|
25.4
|
%
|
|
631.0
|
|
|
4.3
|
%
|
|
605.2
|
|
|||
Operating expenses
|
628.0
|
|
|
(4.4
|
)%
|
|
656.7
|
|
|
33.9
|
%
|
|
490.3
|
|
|||
Operating earnings (loss)
|
163.4
|
|
|
735.8
|
%
|
|
(25.7
|
)
|
|
(122.4
|
)%
|
|
114.9
|
|
|||
Net other expenses
|
18.2
|
|
|
2.8
|
%
|
|
17.7
|
|
|
—
|
%
|
|
17.7
|
|
|||
Earnings (loss) before income taxes
|
145.2
|
|
|
434.6
|
%
|
|
(43.4
|
)
|
|
(144.7
|
)%
|
|
97.2
|
|
|||
Income tax expense (benefit)
|
47.2
|
|
|
322.6
|
%
|
|
(21.2
|
)
|
|
(173.4
|
)%
|
|
28.9
|
|
|||
Equity income (loss) from nonconsolidated affiliates, net of tax
|
0.1
|
|
|
—
|
%
|
|
0.1
|
|
|
—
|
%
|
|
(0.1
|
)
|
|||
Net earnings (loss)
|
98.1
|
|
|
543.9
|
%
|
|
(22.1
|
)
|
|
(132.4
|
)%
|
|
68.2
|
|
|||
Net earnings attributable to noncontrolling interests
|
0.6
|
|
|
N/A
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|||
Net earnings (loss) attributable to Herman Miller, Inc.
|
$
|
97.5
|
|
|
541.2
|
%
|
|
$
|
(22.1
|
)
|
|
(132.4
|
)%
|
|
$
|
68.2
|
|
|
Fiscal 2015
|
|
Fiscal 2014
|
|
Fiscal 2013
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
63.1
|
|
|
66.5
|
|
|
65.9
|
|
Gross margin
|
36.9
|
|
|
33.5
|
|
|
34.1
|
|
Selling, general, and administrative expenses
|
25.4
|
|
|
30.0
|
|
|
24.2
|
|
Restructuring and impairment expenses
|
0.6
|
|
|
1.4
|
|
|
0.1
|
|
Design and research expenses
|
3.3
|
|
|
3.5
|
|
|
3.4
|
|
Total operating expenses
|
29.3
|
|
|
34.9
|
|
|
27.6
|
|
Operating earnings (loss)
|
7.6
|
|
|
(1.4
|
)
|
|
6.5
|
|
Net other expenses
|
0.8
|
|
|
0.9
|
|
|
1.0
|
|
Earnings (loss) before income taxes
|
6.8
|
|
|
(2.3
|
)
|
|
5.5
|
|
Income tax expense (benefit)
|
2.2
|
|
|
(1.1
|
)
|
|
1.6
|
|
Equity income (loss) from nonconsolidated affiliates, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
Net earnings (loss)
|
4.6
|
|
|
(1.2
|
)
|
|
3.8
|
|
Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
Net earnings (loss) attributable to Herman Miller, Inc.
|
4.6
|
|
|
(1.2
|
)
|
|
3.8
|
|
Fiscal Year Ended
|
May 30, 2015
|
|
May 31, 2014
|
|
Change
|
|||
Direct materials
|
41.9
|
%
|
|
41.3
|
%
|
|
0.6
|
%
|
Direct labor
|
5.8
|
|
|
6.4
|
|
|
(0.6
|
)
|
Manufacturing overhead
|
|
|
|
|
|
|||
Manufacturing overhead - excluding legacy pension
|
8.8
|
|
|
10.1
|
|
|
(1.3
|
)
|
Legacy pension impact on manufacturing overhead
|
—
|
|
|
2.7
|
|
|
(2.7
|
)
|
Total manufacturing overhead
|
8.8
|
|
|
12.8
|
|
|
(4.0
|
)
|
Freight and distribution
|
6.6
|
|
|
6.0
|
|
|
0.6
|
|
Cost of sales
|
63.1
|
%
|
|
66.5
|
%
|
|
(3.4
|
)%
|
Fiscal Year Ended
|
May 31, 2014
|
|
June 1, 2013
|
|
Change
|
|||
Direct materials
|
41.3
|
%
|
|
42.7
|
%
|
|
(1.4
|
)%
|
Direct labor
|
6.4
|
|
|
6.4
|
|
|
—
|
|
Manufacturing overhead
|
|
|
|
|
|
|
||
Manufacturing overhead - excluding legacy pension
|
10.1
|
|
|
10.6
|
|
|
(0.5
|
)
|
Legacy pension impact on manufacturing overhead
|
2.7
|
%
|
|
0.2
|
%
|
|
2.5
|
%
|
Total manufacturing overhead
|
12.8
|
%
|
|
10.8
|
%
|
|
2.0
|
%
|
Freight and distribution
|
6.0
|
%
|
|
6.0
|
%
|
|
—
|
%
|
Cost of sales
|
66.5
|
%
|
|
65.9
|
%
|
|
0.6
|
%
|
(In millions)
|
|
||
Fiscal 2014 Operating expenses
|
$
|
656.7
|
|
Selling, general & administrative change
|
|
||
Legacy pension expenses
|
(113.1
|
)
|
|
DWR Acquisition
|
81.5
|
|
|
Dealer divestitures
|
(3.6
|
)
|
|
Impact from foreign currency
|
(4.8
|
)
|
|
Warranty
|
4.8
|
|
|
Employee incentive costs
|
(4.0
|
)
|
|
Administrative expenses
|
2.9
|
|
|
Marketing and selling
|
(2.4
|
)
|
|
Acquisition expenses
|
2.2
|
|
|
Depreciation and amortization
|
1.9
|
|
|
Other
|
15.4
|
|
|
Restructuring and impairment change
|
(13.8
|
)
|
|
Design and research change
|
4.3
|
|
|
Fiscal 2015 Operating expenses
|
$
|
628.0
|
|
(In millions)
|
|
||
Fiscal 2013 Operating expenses
|
$
|
490.3
|
|
Selling, general & administrative change
|
|
||
Acquisitions and divestitures
|
|
||
Maharam acquisition
|
48.2
|
|
|
Dealer divestitures
|
(7.9
|
)
|
|
Contingent consideration change
|
(2.6
|
)
|
|
Legacy pension expenses
|
89.0
|
|
|
Warranty
|
(3.2
|
)
|
|
Marketing and selling
|
(0.3
|
)
|
|
Employee incentive costs
|
4.3
|
|
|
Impact from foreign currency
|
(2.3
|
)
|
|
Other
|
11.9
|
|
|
Restructuring and impairment change
|
25.3
|
|
|
Design and research change
|
4.0
|
|
|
Fiscal 2014 Operating expenses
|
$
|
656.7
|
|
◦
|
North American Furniture Solutions
— Includes the operations associated with the design, manufacture, and sale of furniture products for work-related settings, including office, education, and healthcare environments, throughout the United States and Canada. The North American Furniture Solutions reportable segment is the aggregation of two operating segments. In addition, the company has determined that both operating segments within the North American Furniture Solutions reportable segment each represent reporting units.
|
◦
|
ELA Furniture Solutions
— Includes EMEA, Latin America, and Asia-Pacific operations associated with the design, manufacture and sale of furniture products, primarily for work-related settings.
|
◦
|
Specialty
— Includes operations associated with the design, manufacture, and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles, and Herman Miller Collection products.
|
◦
|
Consumer
— Includes operations associated with the sale of modern design furnishings and accessories to third party retail distributors, as well as direct to consumer sales through eCommerce, direct mailing catalogs, and DWR retail studios.
|
|
Fiscal 2015
|
Fiscal 2014
|
||||||||||||||||||||||
|
North America
|
ELA
|
Specialty
|
Consumer
|
Corporate
|
Total
|
North America
|
ELA
|
Specialty
|
Consumer
|
Corporate
|
Total
|
||||||||||||
Net Sales, as reported
|
1,241.9
|
|
409.9
|
|
219.9
|
|
270.5
|
|
—
|
|
2,142.2
|
|
1,216.3
|
|
392.2
|
|
205.8
|
|
67.7
|
|
—
|
|
1,882.0
|
|
% change from PY
|
2.1
|
%
|
4.5
|
%
|
6.9
|
%
|
299.6
|
%
|
—
|
%
|
13.8
|
%
|
(0.5
|
)%
|
3.9
|
%
|
84.2
|
%
|
5.8
|
%
|
—
|
%
|
6.0
|
%
|
|
Fiscal 2015
|
Fiscal 2014
|
||||||||||||||||||||||||||||||||||
|
North America
|
ELA
|
Specialty
|
Consumer
|
Corporate
|
Total
|
North America
|
ELA
|
Specialty
|
Consumer
|
Corporate
|
Total
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Operating Earnings (Loss)
|
125.2
|
|
25.9
|
|
13.5
|
|
14.7
|
|
(15.9
|
)
|
$
|
163.4
|
|
(27.0
|
)
|
23.1
|
|
(5.3
|
)
|
9.9
|
|
(26.4
|
)
|
$
|
(25.7
|
)
|
||||||||||
Add: Restructuring / Impairment Expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
12.7
|
|
12.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
26.5
|
|
26.5
|
|
||||||||||||
Add: Acquisition-Related Inventory Adjustments
|
—
|
|
—
|
|
—
|
|
7.8
|
|
—
|
|
7.8
|
|
—
|
|
—
|
|
1.4
|
|
—
|
|
—
|
|
1.4
|
|
||||||||||||
Add: Legacy Pension Expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
147.0
|
|
—
|
|
12.2
|
|
5.2
|
|
—
|
|
164.4
|
|
||||||||||||
Add: POSH Cont. Consid. Reduction
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2.6
|
)
|
—
|
|
—
|
|
—
|
|
(2.6
|
)
|
||||||||||||
Acquisition Expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
2.2
|
|
2.2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||||
Adjusted Operating Earnings
|
125.2
|
|
25.9
|
|
13.5
|
|
22.5
|
|
(1.0
|
)
|
186.1
|
|
$
|
120.0
|
|
$
|
20.5
|
|
$
|
8.3
|
|
$
|
15.1
|
|
$
|
0.1
|
|
$
|
164.0
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Other Income / (Expense), net
|
|
|
|
|
(0.7
|
)
|
(0.7
|
)
|
|
|
|
|
(0.1
|
)
|
(0.1
|
)
|
||||||||||||||||||||
Add: Depreciation and Amortization
|
26.5
|
|
8.2
|
|
7.4
|
|
7.3
|
|
0.4
|
|
49.8
|
|
26.8
|
|
7.6
|
|
6.8
|
|
1.2
|
|
—
|
|
42.4
|
|
||||||||||||
Adjusted EBITDA
|
$
|
151.7
|
|
$
|
34.1
|
|
$
|
20.9
|
|
$
|
29.8
|
|
$
|
(1.3
|
)
|
$
|
235.2
|
|
$
|
146.8
|
|
$
|
28.1
|
|
$
|
15.1
|
|
$
|
16.3
|
|
$
|
—
|
|
$
|
206.3
|
|
|
Fiscal Year Ended
|
||||||||||
(In millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash and cash equivalents, end of period
|
$
|
63.7
|
|
|
$
|
101.5
|
|
|
$
|
82.7
|
|
Marketable securities, end of period
|
$
|
5.7
|
|
|
$
|
11.1
|
|
|
$
|
10.8
|
|
Cash provided by operating activities
|
$
|
167.7
|
|
|
$
|
90.1
|
|
|
$
|
136.5
|
|
Cash used for investing activities
|
$
|
(213.6
|
)
|
|
$
|
(48.2
|
)
|
|
$
|
(209.7
|
)
|
Cash provided by (used for) financing activities
|
$
|
6.8
|
|
|
$
|
(22.4
|
)
|
|
$
|
(16.0
|
)
|
Pension and post-retirement benefit plan contributions
(1)
|
$
|
(1.4
|
)
|
|
$
|
(50.2
|
)
|
|
(4.5
|
)
|
|
Capital expenditures
|
$
|
(63.6
|
)
|
|
$
|
(40.8
|
)
|
|
$
|
(50.2
|
)
|
Stock repurchased and retired
|
$
|
(3.7
|
)
|
|
$
|
(12.7
|
)
|
|
$
|
(3.6
|
)
|
Interest-bearing debt, end of period
(3)
|
$
|
290.0
|
|
|
$
|
250.0
|
|
|
250.0
|
|
|
Available unsecured credit facilities, end of period
(2) (3)
|
$
|
164.5
|
|
|
$
|
155.1
|
|
|
$
|
147.3
|
|
(In millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Design Within Reach (DWR)
|
$
|
154.0
|
|
|
|
|
|
||||
Certain Assets of Dongguan Sun Hing Steel Furniture Factory Ltd (DGSH)
|
|
|
$
|
6.7
|
|
|
|
||||
Maharam Fabric Corporation (Maharam)
|
|
|
|
|
$
|
155.8
|
|
||||
Sun Hing POSH Holdings Limited (POSH)
|
|
|
|
|
$
|
1.7
|
|
|
Fiscal Year Ended
|
||||||||||
(In millions, except share and per share data)
|
2015
|
|
2014
|
|
2013
|
||||||
Shares acquired
|
121,488
|
|
|
408,391
|
|
|
154,917
|
|
|||
Cost of shares acquired
|
$
|
3.7
|
|
|
$
|
12.7
|
|
|
$
|
3.6
|
|
Shares issued
|
501,277
|
|
|
1,040,255
|
|
|
461,944
|
|
|||
Average cash received per share issued
|
$
|
15.48
|
|
|
$
|
20.00
|
|
|
$
|
15.54
|
|
Cash dividends paid
|
$
|
33.3
|
|
|
$
|
30.3
|
|
|
$
|
19.1
|
|
(In millions, )
|
2015
|
|
2014
|
||||
Cash and cash equivalents
|
$
|
63.7
|
|
|
$
|
101.5
|
|
Marketable securities
|
$
|
5.7
|
|
|
$
|
11.1
|
|
Availability under India credit facility
|
2.8
|
|
|
—
|
|
||
Availability under South China credit facility
|
$
|
5.0
|
|
|
$
|
5.0
|
|
Availability under Ningbo, China credit facility
|
$
|
5.0
|
|
|
$
|
5.0
|
|
Availability under syndicated revolving line of credit
|
$
|
151.7
|
|
|
$
|
145.1
|
|
(In millions)
|
Payments due by fiscal year
|
||||||||||||||||||
|
Total
|
|
2016
|
|
2017-2018
|
|
2019-2020
|
|
Thereafter
|
||||||||||
Long-term debt
|
$
|
200.0
|
|
|
$
|
—
|
|
|
$
|
150.0
|
|
|
$
|
90.0
|
|
|
$
|
50.0
|
|
Estimated interest on debt obligations
(1)
|
46.1
|
|
|
13.6
|
|
|
23.2
|
|
|
7.0
|
|
|
2.3
|
|
|||||
Operating leases
|
253.7
|
|
|
36.6
|
|
|
59.2
|
|
|
50.1
|
|
|
107.8
|
|
|||||
Purchase obligations
(2)
|
42.0
|
|
|
35.8
|
|
|
6.0
|
|
|
0.2
|
|
|
—
|
|
|||||
Pension plan funding
(3)
|
1.3
|
|
|
0.5
|
|
|
0.2
|
|
|
0.2
|
|
|
0.4
|
|
|||||
Stockholder dividends
(4)
|
8.4
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
(5)
|
37.8
|
|
|
14.8
|
|
|
9.7
|
|
|
3.0
|
|
|
10.3
|
|
|||||
Total
|
$
|
589.3
|
|
|
$
|
109.7
|
|
|
$
|
248.3
|
|
|
$
|
150.5
|
|
|
$
|
170.8
|
|
(In millions)
|
|
Retention Level (per occurrence)
|
||
General liability and auto liability/physical damage
|
|
$
|
1.00
|
|
Workers' compensation and property
|
|
$
|
0.75
|
|
•
|
Discount Rate
— This assumption is established at the end of the fiscal year based on high-quality corporate bond yields. The company utilizes the services of an independent actuarial firm to assist in determining the rate. For the domestic pension and other post-retirement benefit plans, the actuary uses a “cash flow matching” technique, which compares the estimated future cash flows of the plan to a published discount curve showing the relationship between interest rates and duration for hypothetical zero-coupon fixed income investments. The discount rate is set for the international pension plan based on the yield level of a commonly used corporate bond index in that jurisdiction. The final discount rate takes into consideration the index yield and the difference in comparative durations.
|
•
|
Expected Long-Term Rate of Return
—
The
company bases this assumption on our long-term assumed rates of return for equities and fixed income securities, weighted by the allocation of the invested assets of the pension plan. The company considers likely returns and risk factors specific to the various classes of investments and advice from independent actuaries in establishing this rate. Changes in the investment allocation of plan assets would impact this assumption. A shift to a higher relative percentage of fixed income securities, for example, would result in a lower assumed rate.
|
•
|
Expected Volatility
— This represents a measure, expressed as a percentage, of the expected fluctuation in the market price of the company's common stock. As a point of reference, a high volatility percentage would assume a wider expected range of market returns for a particular security. All other assumptions held constant, this would yield a higher stock option valuation than a calculation using a lower measure of volatility. In measuring the fair value of stock options issued during
fiscal 2015
, we utilized an expected volatility of
36 percent
. For the Herman Miller Consumer Holdings (HMCH) Stock Option Plan, we utilized an expected volatility of
35 percent
.
|
•
|
Expected Term of Options
— This assumption represents the expected length of time between the grant date of a stock option and the date at which it is exercised (option life). The company assumed an average expected term of
4.0 years
in calculating the fair values of the majority of stock options issued during
fiscal 2015
. For the HMCH Stock Option Plan, we utilized an average expected term of
3.2 years
.
|
(In millions)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Long-Term Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50.0
|
|
|
$
|
200.0
|
|
Weighted average interest rate = 6.31%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Weighted average interest rate = 1.03%
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
90.0
|
|
|
$
|
—
|
|
|
$
|
90.0
|
|
|
Fiscal Years Ended
|
||||||||||
(In millions, except per share data)
|
May 30, 2015
|
|
May 31, 2014
|
|
June 1, 2013
|
||||||
Net sales
|
$
|
2,142.2
|
|
|
$
|
1,882.0
|
|
|
$
|
1,774.9
|
|
Cost of sales
|
1,350.8
|
|
|
1,251.0
|
|
|
1,169.7
|
|
|||
Gross margin
|
791.4
|
|
|
631.0
|
|
|
605.2
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
543.9
|
|
|
564.3
|
|
|
429.2
|
|
|||
Restructuring and impairment expenses
|
12.7
|
|
|
26.5
|
|
|
1.2
|
|
|||
Design and research
|
71.4
|
|
|
65.9
|
|
|
59.9
|
|
|||
Total operating expenses
|
628.0
|
|
|
656.7
|
|
|
490.3
|
|
|||
Operating earnings (loss)
|
163.4
|
|
|
(25.7
|
)
|
|
114.9
|
|
|||
Other expenses (income):
|
|
|
|
|
|
||||||
Interest expense
|
17.5
|
|
|
17.6
|
|
|
17.2
|
|
|||
Interest and other investment income
|
(0.6
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
|||
Other, net
|
1.3
|
|
|
0.5
|
|
|
0.9
|
|
|||
Net other expenses
|
18.2
|
|
|
17.7
|
|
|
17.7
|
|
|||
Earnings (loss) before income taxes
|
145.2
|
|
|
(43.4
|
)
|
|
97.2
|
|
|||
Income tax expense (benefit)
|
47.2
|
|
|
(21.2
|
)
|
|
28.9
|
|
|||
Equity earnings (loss) from nonconsolidated affiliates, net of tax
|
0.1
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Net earnings (loss)
|
98.1
|
|
|
(22.1
|
)
|
|
68.2
|
|
|||
Net earnings attributable to noncontrolling interests
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Net earnings (loss) attributable to Herman Miller, Inc.
|
$
|
97.5
|
|
|
$
|
(22.1
|
)
|
|
$
|
68.2
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share — basic
|
$
|
1.64
|
|
|
$
|
(0.37
|
)
|
|
$
|
1.17
|
|
Earnings (loss) per share — diluted
|
$
|
1.62
|
|
|
$
|
(0.37
|
)
|
|
$
|
1.16
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments (net of tax of $0.3, $ - , and $ - )
|
$
|
(9.7
|
)
|
|
$
|
2.9
|
|
|
$
|
(1.0
|
)
|
Pension and post-retirement liability adjustments (net of tax of $2.2, $(50.9) and $(8.8))
|
(8.6
|
)
|
|
83.5
|
|
|
17.3
|
|
|||
Total other comprehensive income (loss)
|
(18.3
|
)
|
|
86.4
|
|
|
16.3
|
|
|||
Comprehensive income
|
79.8
|
|
|
64.3
|
|
|
84.5
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income attributable to Herman Miller, Inc.
|
$
|
79.2
|
|
|
$
|
64.3
|
|
|
$
|
84.5
|
|
(In millions, except share and per share data)
|
May 30, 2015
|
|
May 31, 2014
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
63.7
|
|
|
$
|
101.5
|
|
Marketable securities
|
5.7
|
|
|
11.1
|
|
||
Accounts and notes receivable, less allowances of $3.4 in 2015 and $4.0 in 2014
|
189.6
|
|
|
204.3
|
|
||
Inventories, net
|
129.6
|
|
|
78.4
|
|
||
Deferred income taxes
|
32.0
|
|
|
23.9
|
|
||
Prepaid property and other taxes
|
10.0
|
|
|
12.7
|
|
||
Other
|
32.9
|
|
|
19.9
|
|
||
Total Current Assets
|
463.5
|
|
|
451.8
|
|
||
|
|
|
|
||||
Property and Equipment:
|
|
|
|
||||
Land and improvements
|
21.4
|
|
|
21.5
|
|
||
Buildings and improvements
|
188.9
|
|
|
161.1
|
|
||
Machinery and equipment
|
610.1
|
|
|
576.7
|
|
||
Construction in progress
|
48.2
|
|
|
29.9
|
|
||
Gross Property and Equipment
|
868.6
|
|
|
789.2
|
|
||
Less: Accumulated depreciation
|
(619.1
|
)
|
|
(594.0
|
)
|
||
Net Property and Equipment
|
249.5
|
|
|
195.2
|
|
||
Goodwill
|
303.1
|
|
|
228.2
|
|
||
Indefinite-lived intangibles
|
85.2
|
|
|
40.9
|
|
||
Other amortizable intangibles, net
|
52.3
|
|
|
44.2
|
|
||
Other assets
|
34.6
|
|
|
30.6
|
|
||
Total Assets
|
$
|
1,188.2
|
|
|
$
|
990.9
|
|
|
|
|
|
||||
Liabilities, Redeemable Noncontrolling Interests, and Stockholders' Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
—
|
|
|
$
|
50.0
|
|
Accounts payable
|
164.7
|
|
|
136.9
|
|
||
Accrued compensation and benefits
|
66.6
|
|
|
65.0
|
|
||
Accrued warranty
|
26.8
|
|
|
25.2
|
|
||
Unearned Revenue
|
32.0
|
|
|
17.3
|
|
||
Other accrued liabilities
|
60.8
|
|
|
61.7
|
|
||
Total Current Liabilities
|
350.9
|
|
|
356.1
|
|
||
|
|
|
|
||||
Long-term debt
|
290.0
|
|
|
200.0
|
|
||
Pension and post-retirement benefits
|
27.8
|
|
|
18.2
|
|
||
Other liabilities
|
61.0
|
|
|
44.5
|
|
||
Total Liabilities
|
729.7
|
|
|
618.8
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
30.4
|
|
|
—
|
|
||
Stockholders' Equity:
|
|
|
|
||||
Preferred stock, no par value (10,000,000 shares authorized, none issued)
|
—
|
|
|
—
|
|
||
Common stock, $0.20 par value (240,000,000 shares authorized, 59,694,611 and 59,314,822 shares issued and outstanding in 2015 and 2014, respectively)
|
11.9
|
|
|
11.9
|
|
||
Additional paid-in capital
|
135.1
|
|
|
122.4
|
|
||
Retained earnings
|
338.0
|
|
|
277.4
|
|
||
Accumulated other comprehensive loss
|
(56.2
|
)
|
|
(37.9
|
)
|
||
Key executive deferred compensation
|
(1.2
|
)
|
|
(1.7
|
)
|
||
Herman Miller, Inc. Stockholders' Equity
|
427.6
|
|
|
372.1
|
|
||
Noncontrolling interests
|
0.5
|
|
|
—
|
|
||
Total Stockholders' Equity
|
428.1
|
|
|
372.1
|
|
||
Total Liabilities, Redeemable Noncontrolling Interests, and Stockholders' Equity
|
$
|
1,188.2
|
|
|
$
|
990.9
|
|
|
Fiscal Years Ended
|
||||||||||
May 30, 2015
|
|
May 31, 2014
|
|
June 1, 2013
|
|||||||
Preferred Stock
|
|
|
|
|
|
||||||
Balance at beginning of year and end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common Stock
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
11.9
|
|
|
$
|
11.7
|
|
|
$
|
11.7
|
|
Exercise of stock options
|
—
|
|
|
0.2
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
11.9
|
|
|
$
|
11.9
|
|
|
$
|
11.7
|
|
Additional Paid-in Capital
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
122.4
|
|
|
$
|
102.9
|
|
|
$
|
90.9
|
|
Exercise of stock options
|
5.7
|
|
|
18.8
|
|
|
5.2
|
|
|||
Repurchase and retirement of common stock
|
(3.7
|
)
|
|
(12.7
|
)
|
|
(3.6
|
)
|
|||
Employee stock purchase plan
|
1.8
|
|
|
1.8
|
|
|
1.9
|
|
|||
Stock grant compensation expense
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|||
Stock option compensation expense
|
1.2
|
|
|
2.3
|
|
|
3.6
|
|
|||
Performance stock units compensation expense
|
3.3
|
|
|
3.0
|
|
|
0.7
|
|
|||
Excess tax benefit for stock-based compensation
|
0.4
|
|
|
0.5
|
|
|
0.3
|
|
|||
Restricted stock units released
|
4.0
|
|
|
5.4
|
|
|
3.2
|
|
|||
Deferred compensation plan
|
(0.5
|
)
|
|
(0.2
|
)
|
|
—
|
|
|||
Directors' fees
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|||
Balance at end of period
|
$
|
135.1
|
|
|
$
|
122.4
|
|
|
$
|
102.9
|
|
Retained Earnings
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
277.4
|
|
|
$
|
331.1
|
|
|
$
|
288.2
|
|
Net income attributable to Herman Miller, Inc.
|
97.5
|
|
|
(22.1
|
)
|
|
68.2
|
|
|||
Dividends declared on common stock (per share - 2015: $0.56; 2014: $0.53; 2013: $0.43)
|
(33.6
|
)
|
|
(31.6
|
)
|
|
(25.3
|
)
|
|||
Noncontrolling interests redemption value adjustment
|
(3.3
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
338.0
|
|
|
$
|
277.4
|
|
|
$
|
331.1
|
|
Accumulated Other Comprehensive Loss
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
(37.9
|
)
|
|
$
|
(124.3
|
)
|
|
$
|
(140.6
|
)
|
Other comprehensive income (loss)
|
(18.3
|
)
|
|
86.4
|
|
|
16.3
|
|
|||
Balance at end of period
|
$
|
(56.2
|
)
|
|
$
|
(37.9
|
)
|
|
$
|
(124.3
|
)
|
Key Executive Deferred Compensation
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
(1.7
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(1.9
|
)
|
Deferred compensation plan
|
0.5
|
|
|
0.2
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
(1.2
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
(1.9
|
)
|
Herman Miller, Inc. Stockholders' Equity
|
$
|
427.6
|
|
|
$
|
372.1
|
|
|
$
|
319.5
|
|
Noncontrolling Interests
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Initial origination of noncontrolling interests
|
6.0
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to noncontrolling interests
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
0.2
|
|
|
—
|
|
|
—
|
|
|||
Purchase of noncontrolling interests
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total Stockholders' Equity
|
$
|
428.1
|
|
|
$
|
372.1
|
|
|
$
|
319.5
|
|
|
Fiscal Years Ended
|
||||||||||
(In millions)
|
May 30, 2015
|
|
May 31, 2014
|
|
June 1, 2013
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net earnings (loss)
|
$
|
98.1
|
|
|
$
|
(22.1
|
)
|
|
$
|
68.2
|
|
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities
|
69.6
|
|
|
112.2
|
|
|
68.3
|
|
|||
Net Cash Provided by Operating Activities
|
167.7
|
|
|
90.1
|
|
|
136.5
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Marketable securities purchases
|
—
|
|
|
(5.2
|
)
|
|
(3.7
|
)
|
|||
Marketable securities sales
|
5.3
|
|
|
4.9
|
|
|
2.5
|
|
|||
Capital expenditures
|
(63.6
|
)
|
|
(40.8
|
)
|
|
(50.2
|
)
|
|||
Proceeds from sales of property and dealers
|
0.6
|
|
|
1.3
|
|
|
1.2
|
|
|||
Acquisitions, net of cash received
|
(154.0
|
)
|
|
(6.7
|
)
|
|
(157.5
|
)
|
|||
Other, net
|
(1.9
|
)
|
|
(1.7
|
)
|
|
(2.0
|
)
|
|||
Net Cash Used for Investing Activities
|
(213.6
|
)
|
|
(48.2
|
)
|
|
(209.7
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Notes payable payments
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|||
Proceeds from notes payable
|
—
|
|
|
—
|
|
|
2.4
|
|
|||
Proceeds from issuance of long-term debt
|
796.7
|
|
|
—
|
|
|
—
|
|
|||
Payments of long-term debt
|
(756.7
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(33.3
|
)
|
|
(30.3
|
)
|
|
(19.1
|
)
|
|||
Common stock issued
|
7.8
|
|
|
20.8
|
|
|
7.2
|
|
|||
Common stock repurchased and retired
|
(3.7
|
)
|
|
(12.7
|
)
|
|
(3.6
|
)
|
|||
Excess tax benefits from stock-based compensation
|
0.7
|
|
|
1.1
|
|
|
0.3
|
|
|||
Payment of contingent consideration obligation
|
—
|
|
|
(1.3
|
)
|
|
(0.8
|
)
|
|||
Purchase of noncontrolling interests
|
(5.8
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
1.1
|
|
|
—
|
|
|
—
|
|
|||
Net Cash Provided by (Used for) Financing Activities
|
6.8
|
|
|
(22.4
|
)
|
|
(16.0
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1.3
|
|
|
(0.7
|
)
|
|
(0.3
|
)
|
|||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(37.8
|
)
|
|
18.8
|
|
|
(89.5
|
)
|
|||
Cash and cash equivalents, Beginning of Year
|
101.5
|
|
|
82.7
|
|
|
172.2
|
|
|||
Cash and Cash Equivalents, End of Year
|
63.7
|
|
|
101.5
|
|
|
82.7
|
|
|||
|
|
|
|
|
|
||||||
Other Cash Flow Information
|
|
|
|
|
|
||||||
Interest paid
|
16.9
|
|
|
15.6
|
|
|
14.9
|
|
|||
Income taxes paid, net of cash received
|
$
|
48.5
|
|
|
$
|
34.5
|
|
|
$
|
37.7
|
|
Table of Contents
|
Page No.
|
|
|
||
|
Note 2 -
Acquisitions and Divestitures
|
|
|
Note 3 -
Inventories
|
|
|
||
|
Note 5 -
Long-Term Debt
|
|
|
Note 6 -
Operating Leases
|
|
|
Note 7 -
Employee Benefit Plans
|
|
|
||
|
Note 9 -
Stock-Based Compensation
|
|
|
Note 10 -
Income Taxes
|
|
|
Note 11 -
Fair Value of Financial Instruments
|
|
|
||
|
||
|
Note 14 -
Operating Segments
|
|
|
Note 15 -
Accumulated Other Comprehensive Loss
|
|
|
Note 16 -
Redeemable Noncontrolling Interests
|
|
|
Note 17 -
Restructuring and Impairment Activities
|
|
|
Note 18 -
Quarterly Financial Data (Unaudited)
|
(In millions)
|
|
Goodwill
|
|
Indefinite-lived Intangible Assets
|
|
Total Goodwill and Indefinite-lived Intangible Assets
|
||||||
Balance, June 1, 2013
|
|
227.0
|
|
|
62.3
|
|
|
289.3
|
|
|||
Foreign currency translation adjustments
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||
Sale of owned dealers
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||
China manufacturing and distribution acquisition
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|||
Impairment charges
|
|
—
|
|
|
(21.4
|
)
|
|
(21.4
|
)
|
|||
Balance, May 31, 2014
|
|
$
|
228.2
|
|
|
$
|
40.9
|
|
|
$
|
269.1
|
|
Foreign currency translation adjustments
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||
DWR acquisition
|
|
75.6
|
|
|
55.1
|
|
|
130.7
|
|
|||
Impairment charges
|
|
—
|
|
|
(10.8
|
)
|
|
(10.8
|
)
|
|||
Balance, May 30, 2015
|
|
303.1
|
|
|
85.2
|
|
|
388.3
|
|
|
May 30, 2015
|
||||||||||||||
(In millions)
|
Patent and Trademarks
|
|
Customer Relationships
|
|
Other
|
|
Total
|
||||||||
Gross carrying value
|
$
|
18.8
|
|
|
$
|
55.3
|
|
|
$
|
5.0
|
|
|
$
|
79.1
|
|
Accumulated amortization
|
11.7
|
|
|
12.0
|
|
|
3.1
|
|
|
26.8
|
|
||||
Net
|
$
|
7.1
|
|
|
$
|
43.3
|
|
|
$
|
1.9
|
|
|
$
|
52.3
|
|
|
|
|
|
|
|
|
|
||||||||
|
May 31, 2014
|
||||||||||||||
|
Patent and Trademarks
|
|
Customer Relationships
|
|
Other
|
|
Total
|
||||||||
Gross carrying value
|
$
|
19.2
|
|
|
$
|
43.6
|
|
|
$
|
4.8
|
|
|
$
|
67.6
|
|
Accumulated amortization
|
12.7
|
|
|
8.3
|
|
|
2.4
|
|
|
23.4
|
|
||||
Net
|
$
|
6.5
|
|
|
$
|
35.3
|
|
|
$
|
2.4
|
|
|
$
|
44.2
|
|
(In millions)
|
|
Retention Level (per occurrence)
|
||
General liability and auto liability/physical damage
|
|
$
|
1.00
|
|
Workers' compensation and property
|
|
$
|
0.75
|
|
•
|
Level 1 — Financial instruments with unadjusted, quoted prices listed on active market exchanges.
|
•
|
Level 2 — Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. Financial instrument values are determined using prices for recently traded financial instruments with similar underlying terms and direct or indirect observational inputs, such as interest rates and yield curves at commonly quoted intervals.
|
•
|
Level 3 — Financial instruments not actively traded on a market exchange and there is little, if any, market activity. Values are determined using significant unobservable inputs or valuation techniques.
|
(In millions)
|
|
|
Fiscal Year
|
||||||
|
Balance Sheet Location
|
|
May 30, 2015
|
|
May 31, 2014
|
||||
Foreign currency forward contracts not designated as hedges
|
Current Assets: Other
|
|
$
|
0.7
|
|
|
$
|
0.2
|
|
Foreign currency forward contracts not designated as hedges
|
Current Liabilities: Other Accrued Liabilities
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
(In millions)
|
|
|
Fiscal Year
|
||||||||||
|
Recognized Income on Derivative (Gain) Loss Location
|
|
May 30, 2015
|
|
May 31, 2014
|
|
June 1, 2013
|
||||||
Foreign currency forward contracts
|
Other expenses (income): Other, net
|
|
$
|
(2.1
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
Assets Acquired and Liabilities Assumed on July 28, 2014
|
|
|
|||||||
(In millions)
|
At acquisition date - reported as of August 30, 2014
|
Measurement Period Adjustments
|
At acquisition date - reported as of May 30, 2015
|
||||||
Purchase price
|
$
|
155.0
|
|
$
|
0.2
|
|
$
|
155.2
|
|
Fair value of the assets acquired:
|
|
|
|
||||||
Cash
|
1.2
|
|
—
|
|
1.2
|
|
|||
Accounts receivable
|
2.4
|
|
(0.2
|
)
|
2.2
|
|
|||
Inventory
|
47.4
|
|
—
|
|
47.4
|
|
|||
Current deferred tax asset
|
—
|
|
1.5
|
|
1.5
|
|
|||
Other current assets
|
5.5
|
|
—
|
|
5.5
|
|
|||
Long term deferred tax asset
|
3.7
|
|
(3.7
|
)
|
—
|
|
|||
Goodwill
|
74.4
|
|
1.2
|
|
75.6
|
|
|||
Other intangible assets
|
69.6
|
|
(1.1
|
)
|
68.5
|
|
|||
Property
|
32.0
|
|
—
|
|
32.0
|
|
|||
Other long term assets
|
2.4
|
|
—
|
|
2.4
|
|
|||
Total assets acquired
|
238.6
|
|
(2.3
|
)
|
236.3
|
|
|||
Fair value of liabilities assumed:
|
|
|
|
||||||
Accounts payable
|
20.8
|
|
—
|
|
20.8
|
|
|||
Current deferred tax liabilities
|
0.6
|
|
(0.6
|
)
|
—
|
|
|||
Accrued compensation and benefits
|
1.6
|
|
—
|
|
1.6
|
|
|||
Other accrued liabilities
|
12.3
|
|
—
|
|
12.3
|
|
|||
Long term deferred tax liability
|
16.4
|
|
(1.9
|
)
|
14.5
|
|
|||
Other long term liabilities
|
0.4
|
|
—
|
|
0.4
|
|
|||
Total liabilities assumed
|
52.1
|
|
(2.5
|
)
|
49.6
|
|
|||
Redeemable noncontrolling interests
|
25.7
|
|
—
|
|
25.7
|
|
|||
Noncontrolling interests
|
5.8
|
|
—
|
|
5.8
|
|
|||
Net assets acquired
|
$
|
155.0
|
|
$
|
0.2
|
|
$
|
155.2
|
|
DWR Results of Operations
|
|
||
|
|
||
(In millions)
|
July 28, 2014 - May 30, 2015
|
||
DWR Net sales
|
$
|
217.0
|
|
Intercompany sales elimination
|
(22.7
|
)
|
|
Net sales impact to Herman Miller, Inc.
|
$
|
194.3
|
|
(In millions)
|
|
May 30, 2015
|
|
May 31, 2014
|
||||
Finished goods and work in process
|
|
$
|
106.5
|
|
|
$
|
58.2
|
|
Raw materials
|
|
23.1
|
|
|
20.2
|
|
||
Total
|
|
$
|
129.6
|
|
|
$
|
78.4
|
|
Ownership Interest
|
May 30, 2015
|
May 31, 2014
|
Kvadrat Maharam Arabia DMCC
|
50.0%
|
50.0%
|
Kvadrat Maharam Pty Limited
|
50.0%
|
50.0%
|
Kvadrat Maharam Turkey JSC
|
50.0%
|
50.0%
|
Danskina B.V.
|
50.0%
|
50.0%
|
(In millions)
|
|
May 30, 2015
|
|
May 31, 2014
|
||||
Series A senior notes, 5.94%, due January 3, 2015
|
|
$
|
—
|
|
|
$
|
50.0
|
|
Series B senior notes, 6.42%, due January 3, 2018
|
|
150.0
|
|
|
150.0
|
|
||
Debt securities, 6.0%, due March 1, 2021
|
|
50.0
|
|
|
50.0
|
|
||
Syndicated Revolving Line of Credit, due July 2019
|
|
90.0
|
|
|
—
|
|
||
Total
|
|
$
|
290.0
|
|
|
$
|
250.0
|
|
The weighted-average used in the determination of net periodic benefit cost:
|
|||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
(Percentages)
|
Domestic
|
|
International
|
|
Domestic
|
|
International
|
|
Domestic
|
|
International
|
Discount rate
|
3.44
|
|
4.40
|
|
3.43
|
|
4.40
|
|
3.34
|
|
4.20
|
Compensation increase rate
|
n/a
|
|
3.35
|
|
n/a
|
|
3.50
|
|
3.00
|
|
3.00
|
Expected return on plan assets
|
n/a
|
|
6.10
|
|
n/a
|
|
6.00
|
|
4.20
|
|
6.00
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted-average used in the determination of the projected benefit obligations:
|
|||||||||||
Discount rate
|
3.41
|
|
3.50
|
|
3.44
|
|
4.40
|
|
3.43
|
|
4.40
|
Compensation increase rate
|
n/a
|
|
3.20
|
|
n/a
|
|
3.35
|
|
n/a
|
|
3.50
|
(In millions)
|
1 Percent Increase
|
|
1 Percent Decrease
|
||||
Effect on total fiscal 2015 service and interest cost components
|
$
|
—
|
|
|
$
|
—
|
|
Effect on post-retirement benefit obligation at May 30, 2015
|
$
|
0.3
|
|
|
$
|
(0.2
|
)
|
|
|
|
|
|
|
|
||||||
Asset Category
|
|
Targeted Asset Allocation Percentage
|
|
Percentage of Plan Assets
at Year End
|
||||||||
|
|
2015
|
|
2014
|
||||||||
Equities
|
|
—
|
|
2
|
|
—
|
||||||
Fixed Income
|
|
20
|
|
23
|
|
26
|
||||||
Common collective trusts
|
|
80
|
|
75
|
|
74
|
||||||
Total
|
|
|
|
100
|
|
100
|
||||||
|
|
|
|
|
|
|
||||||
(In millions)
|
|
International Plan as of May 31, 2015
|
||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and cash equivalents
|
|
$
|
1.8
|
|
|
|
|
|
$
|
1.8
|
|
|
Foreign government obligations
|
|
—
|
|
|
21.3
|
|
|
21.3
|
|
|||
Common collective trusts-balanced
|
|
—
|
|
|
68.9
|
|
|
68.9
|
|
|||
Total
|
|
$
|
1.8
|
|
|
$
|
90.2
|
|
|
$
|
92.0
|
|
|
|
|
|
|
|
|
||||||
(In millions)
|
|
International Plan as of May 31, 2014
|
||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and cash equivalents
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Common collective trusts-balanced
|
|
—
|
|
|
70.1
|
|
|
70.1
|
|
|||
Foreign government obligations
|
|
|
|
|
24.5
|
|
|
24.5
|
|
|||
Total
|
|
$
|
0.2
|
|
|
$
|
94.6
|
|
|
$
|
94.8
|
|
(In millions)
|
Pension Benefits Domestic
|
|
Pension Benefits International
|
|
Post-Retirement Benefits
|
||||||
2016
|
$
|
0.1
|
|
|
$
|
2.2
|
|
|
$
|
0.9
|
|
2017
|
$
|
0.1
|
|
|
$
|
2.5
|
|
|
$
|
0.9
|
|
2018
|
$
|
0.1
|
|
|
$
|
2.7
|
|
|
$
|
0.8
|
|
2019
|
$
|
0.1
|
|
|
$
|
2.7
|
|
|
$
|
0.8
|
|
2020
|
$
|
0.1
|
|
|
$
|
2.8
|
|
|
$
|
0.7
|
|
2021-2025
|
$
|
0.4
|
|
|
$
|
16.6
|
|
|
$
|
2.8
|
|
(In millions, except shares)
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Numerator for both basic and diluted EPS, net earnings (loss)
|
$
|
97.5
|
|
|
$
|
(22.1
|
)
|
|
$
|
68.2
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic EPS, weighted-average common shares outstanding
|
59,475,297
|
|
|
58,955,487
|
|
|
58,425,522
|
|
|||
Potentially dilutive shares resulting from stock plans
|
649,069
|
|
|
—
|
|
|
418,992
|
|
|||
Denominator for diluted EPS
|
60,124,366
|
|
|
58,955,487
|
|
|
58,844,514
|
|
(In millions)
|
|
May 30, 2015
|
|
|
May 31, 2014
|
|
|
June 1, 2013
|
|
|||
Employee stock purchase program
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Stock option plans
|
|
2.6
|
|
|
2.3
|
|
|
3.6
|
|
|||
Restricted stock grants
|
|
0.1
|
|
|
0.2
|
|
|
0.3
|
|
|||
Restricted stock units
|
|
3.7
|
|
|
5.2
|
|
|
3.2
|
|
|||
Performance share units
|
|
3.3
|
|
|
3.0
|
|
|
0.7
|
|
|||
Total
|
|
$
|
10.0
|
|
|
$
|
11.0
|
|
|
$
|
8.1
|
|
|
|
|
|
|
|
|
||||||
Tax benefit
|
|
$
|
3.6
|
|
|
$
|
4.0
|
|
|
$
|
2.9
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Risk-free interest rates
(1)
|
|
1.46
|
%
|
|
1.62
|
%
|
|
0.77
|
%
|
|||
Expected term of options
(2)
|
|
4.0 years
|
|
|
5.5 years
|
|
|
5.5 years
|
|
|||
Expected volatility
(3)
|
|
36
|
%
|
|
46
|
%
|
|
47
|
%
|
|||
Dividend yield
(4)
|
|
1.85
|
%
|
|
1.74
|
%
|
|
1.98
|
%
|
|||
Weighted-average grant-date fair value of stock options:
|
|
|
|
|
|
|
||||||
Granted with exercise prices equal to the fair market value of the stock on the date of grant
|
|
$
|
7.74
|
|
|
$
|
10.68
|
|
|
$
|
6.52
|
|
|
|
Shares Under Option
|
|
Weighted-Average Exercise Prices
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
(In millions)
|
|||||
Outstanding at May 31, 2014
|
|
1,596,984
|
|
|
$
|
25.47
|
|
|
4.7
|
|
$
|
9.9
|
|
Granted at market
|
|
75,954
|
|
|
$
|
30.22
|
|
|
|
|
|
||
Exercised
|
|
(264,850
|
)
|
|
$
|
21.78
|
|
|
|
|
|
||
Forfeited or expired
|
|
(105,465
|
)
|
|
$
|
30.99
|
|
|
|
|
|
||
Outstanding at May 30, 2015
|
|
1,302,623
|
|
|
$
|
26.05
|
|
|
4.0
|
|
$
|
4.7
|
|
Ending vested + expected to vest
|
|
1,298,463
|
|
|
$
|
26.04
|
|
|
4.0
|
|
$
|
4.7
|
|
Exercisable at end of period
|
|
1,044,419
|
|
|
$
|
26.81
|
|
|
3.0
|
|
$
|
3.3
|
|
|
|
2015
|
|||||
|
|
Shares
|
|
Weighted Average Grant-Date Fair Value
|
|||
Outstanding, at beginning of year
|
|
62,034
|
|
|
$
|
20.66
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
Vested
|
|
(8,211
|
)
|
|
$
|
18.42
|
|
Forfeited or expired
|
|
(3,500
|
)
|
|
$
|
23.90
|
|
Outstanding, at end of year
|
|
50,323
|
|
|
$
|
20.80
|
|
|
Share
Units
|
|
Weighted Average
Grant-Date
Fair Value
|
|
Aggregate Intrinsic Value in Millions
|
|
Weighted-Average
Remaining Contractual
Term (Years)
|
|||||
Outstanding at May 31, 2014
|
566,106
|
|
|
$
|
23.31
|
|
|
|
|
|
||
Granted
|
116,485
|
|
|
$
|
30.38
|
|
|
|
|
|
||
Forfeited
|
(13,410
|
)
|
|
$
|
25.35
|
|
|
|
|
|
||
Released
|
(163,709
|
)
|
|
$
|
24.95
|
|
|
|
|
|
||
Outstanding at May 31, 2015
|
505,472
|
|
|
$
|
24.21
|
|
|
$
|
13.5
|
|
|
1.2
|
Ending vested + expected to vest
|
495,523
|
|
|
|
|
$
|
12.9
|
|
|
1.2
|
|
Share
Units
|
|
Weighted Average Grant-Date Fair Value
|
|
Aggregate Intrinsic
Value in Millions
|
|
Weighted-Average
Remaining Contractual
Term (Years)
|
|||||
Outstanding at May 31, 2014
|
210,196
|
|
|
$
|
26.64
|
|
|
$
|
6.6
|
|
|
1.8
|
Granted
|
151,785
|
|
|
$
|
32.71
|
|
|
|
|
|
||
Forfeited
|
(5,075
|
)
|
|
$
|
32.22
|
|
|
|
|
|
||
Outstanding at May 30, 2015
|
356,906
|
|
|
$
|
29.17
|
|
|
$
|
9.9
|
|
|
1.3
|
Ending vested + expected to vest
|
349,664
|
|
|
|
|
$
|
9.7
|
|
|
1.3
|
|
|
2015
|
||
Risk-free interest rates
(1)
|
|
0.99
|
%
|
|
Expected term of options
(2)
|
|
3.2 years
|
|
|
Expected volatility
(3)
|
|
35
|
%
|
|
Dividend yield
|
|
not applicable
|
|
|
Strike price
|
|
$
|
24.39
|
|
Per share value
(4)
|
|
$
|
8.71
|
|
|
|
Shares Under Option
|
|
Weighted-Average Exercise Prices
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value
(In millions)
|
|||||
Outstanding at May 31, 2014
|
|
—
|
|
|
|
|
|
|
|
||||
Granted
|
|
606,301
|
|
|
$
|
21.66
|
|
|
|
|
|
||
Exercised
|
|
(87,232
|
)
|
|
$
|
8.16
|
|
|
|
|
|
||
Forfeited or expired
|
|
(14,400
|
)
|
|
$
|
24.39
|
|
|
|
|
|
||
Outstanding at May 30, 2015
|
|
504,669
|
|
|
|
|
4.2
|
|
$
|
2.1
|
|
||
Exercisable at end of period
|
|
13,583
|
|
|
$
|
6.79
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Options
|
|
—
|
|
|
—
|
|
|
—
|
|
Shares of common stock
|
|
13,752
|
|
|
12,358
|
|
|
15,746
|
|
Shares through the deferred compensation program
|
|
—
|
|
|
2,317
|
|
|
2,779
|
|
(In millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Domestic
|
$
|
142.5
|
|
|
$
|
(45.1
|
)
|
|
$
|
89.9
|
|
Foreign
|
2.7
|
|
|
1.7
|
|
|
7.3
|
|
|||
Total
|
$
|
145.2
|
|
|
$
|
(43.4
|
)
|
|
$
|
97.2
|
|
(In millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Current: Domestic - Federal
|
$
|
43.6
|
|
|
$
|
22.2
|
|
|
$
|
36.4
|
|
Domestic - State
|
6.3
|
|
|
4.6
|
|
|
5.2
|
|
|||
Foreign
|
6.1
|
|
|
4.8
|
|
|
3.9
|
|
|||
|
56.0
|
|
|
31.6
|
|
|
45.5
|
|
|||
Deferred: Domestic - Federal
|
(5.9
|
)
|
|
(43.6
|
)
|
|
(14.9
|
)
|
|||
Domestic - State
|
(0.6
|
)
|
|
(5.6
|
)
|
|
(1.4
|
)
|
|||
Foreign
|
(2.3
|
)
|
|
(3.6
|
)
|
|
(0.3
|
)
|
|||
|
(8.8
|
)
|
|
(52.8
|
)
|
|
(16.6
|
)
|
|||
Total income tax provision
|
$
|
47.2
|
|
|
$
|
(21.2
|
)
|
|
$
|
28.9
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income taxes computed at the United States Statutory rate of 35%
|
|
$
|
50.8
|
|
|
$
|
(15.2
|
)
|
|
$
|
34.0
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
|
||||||
Change in unrecognized tax benefits
|
|
—
|
|
|
0.4
|
|
|
0.1
|
|
|||
Foreign statutory rate differences
|
|
(1.0
|
)
|
|
(0.9
|
)
|
|
(1.9
|
)
|
|||
Manufacturing deduction under the American Jobs Creation Act of 2004
|
|
(4.8
|
)
|
|
(3.9
|
)
|
|
(4.0
|
)
|
|||
State taxes
|
|
4.2
|
|
|
(0.9
|
)
|
|
2.5
|
|
|||
Federal permanent true-ups
|
|
(0.9
|
)
|
|
1.6
|
|
|
(2.1
|
)
|
|||
Tax on undistributed foreign earnings
|
|
(3.9
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||
Other, net
|
|
2.8
|
|
|
(2.3
|
)
|
|
0.5
|
|
|||
Income tax expense (benefit)
|
|
$
|
47.2
|
|
|
$
|
(21.2
|
)
|
|
$
|
28.9
|
|
Effective tax rate
|
|
32.6
|
%
|
|
48.9
|
%
|
|
29.8
|
%
|
(In millions)
|
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Compensation-related accruals
|
|
$
|
21.9
|
|
|
$
|
19.5
|
|
Accrued pension and post-retirement benefit obligations
|
|
11.0
|
|
|
9.7
|
|
||
Deferred revenue
|
|
2.9
|
|
|
3.0
|
|
||
Inventory related
|
|
6.4
|
|
|
3.7
|
|
||
Reserves for uncollectible accounts and notes receivable
|
|
1.4
|
|
|
1.5
|
|
||
Other reserves and accruals
|
|
3.6
|
|
|
3.5
|
|
||
Warranty
|
|
9.3
|
|
|
8.5
|
|
||
State and local tax net operating loss carryforwards
|
|
5.5
|
|
|
3.2
|
|
||
Federal net operating loss carryforward
|
|
12.2
|
|
|
0.1
|
|
||
State credits
|
|
0.2
|
|
|
0.2
|
|
||
Foreign tax net operating loss carryforwards
|
|
9.9
|
|
|
9.9
|
|
||
Foreign tax credits
|
|
0.1
|
|
|
0.1
|
|
||
Foreign capital loss carryforward
|
|
—
|
|
|
0.1
|
|
||
Undistributed foreign earnings
|
|
4.5
|
|
|
—
|
|
||
Financing costs
|
|
0.8
|
|
|
1.2
|
|
||
Other
|
|
3.6
|
|
|
1.5
|
|
||
Subtotal
|
|
93.3
|
|
|
65.7
|
|
||
Valuation allowance
|
|
(11.1
|
)
|
|
(8.5
|
)
|
||
Total
|
|
$
|
82.2
|
|
|
$
|
57.2
|
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Book basis in property in excess of tax basis
|
|
$
|
(16.7
|
)
|
|
$
|
(14.7
|
)
|
Intangible assets
|
|
(44.5
|
)
|
|
(18.1
|
)
|
||
Other
|
|
(3.6
|
)
|
|
(2.4
|
)
|
||
Total
|
|
$
|
(64.8
|
)
|
|
$
|
(35.2
|
)
|
(In millions)
|
May 30, 2015
|
|
May 31, 2014
|
|
June 1, 2013
|
||||||
Interest and penalty expense
|
$
|
0.4
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Liability for interest and penalties
|
$
|
0.9
|
|
|
$
|
0.6
|
|
|
|
(In millions)
|
|
May 30, 2015
|
|
May 31, 2014
|
||||
Carrying value
|
|
$
|
290.0
|
|
|
$
|
250.0
|
|
Fair value
|
|
$
|
315.1
|
|
|
$
|
279.2
|
|
(In millions)
|
Fair Value Measurements
|
||||||
|
May 30, 2015
|
|
May 31, 2014
|
||||
Financial Assets
|
Quoted Prices With Other Observable Inputs
(Level 2)
|
|
Quoted Prices With Other Observable Inputs
(Level 2)
|
||||
Available-for-sale marketable securities:
|
|
|
|
||||
Asset-backed securities
|
$
|
0.2
|
|
|
$
|
0.4
|
|
Corporate debt securities
|
0.6
|
|
|
1.2
|
|
||
Government obligations
|
0.5
|
|
|
7.9
|
|
||
Mortgage-backed securities
|
4.4
|
|
|
1.6
|
|
||
Foreign currency forward contracts
|
0.7
|
|
|
0.2
|
|
||
Deferred compensation plan
|
7.9
|
|
|
6.3
|
|
||
Total
|
$
|
14.3
|
|
|
$
|
17.6
|
|
|
|
|
|
||||
Financial Liabilities
|
|
|
|
||||
Foreign currency forward contracts
|
$
|
0.2
|
|
|
$
|
0.1
|
|
Total
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
|
May 30, 2015
|
||||||||||||||
(In millions)
|
|
Cost
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Market Value
|
||||||||
Asset-backed securities
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Corporate debt securities
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
||||
Government obligations
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
||||
Mortgage-backed securities
|
|
4.4
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||
Total
|
|
$
|
5.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.7
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
May 31, 2014
|
||||||||||||||
(In millions)
|
|
Cost
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Market Value
|
|
|||||||
Asset-backed securities
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Corporate debt securities
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
||||
Government obligations
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
||||
Mortgage-backed securities
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
||||
Total
|
|
$
|
11.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11.1
|
|
(In millions)
|
|
Cost
|
|
Market
Value
|
||||
Due within one year
|
|
$
|
3.1
|
|
|
$
|
3.1
|
|
Due after one year through five years
|
|
2.5
|
|
|
2.5
|
|
||
Due after five years
|
|
0.1
|
|
|
0.1
|
|
||
Total
|
|
$
|
5.7
|
|
|
$
|
5.7
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Depreciation expense
|
|
$
|
44.2
|
|
|
$
|
37.8
|
|
|
$
|
34.4
|
|
Amortization expense
|
|
5.6
|
|
|
4.6
|
|
|
3.1
|
|
|||
Provision for losses on accounts receivable and notes receivable
|
|
1.8
|
|
|
1.0
|
|
|
0.6
|
|
|||
(Gain) Loss on sales of property and dealers
|
|
—
|
|
|
(1.7
|
)
|
|
0.8
|
|
|||
Deferred income tax expense (benefit)
|
|
(8.8
|
)
|
|
(52.8
|
)
|
|
(16.6
|
)
|
|||
Pension expense
|
|
0.8
|
|
|
115.4
|
|
|
31.9
|
|
|||
Restructuring and impairment expenses
|
|
12.7
|
|
|
26.5
|
|
|
1.2
|
|
|||
Stock-based compensation
|
|
10.0
|
|
|
11.0
|
|
|
8.1
|
|
|||
Excess tax benefits from stock-based compensation
|
|
(0.7
|
)
|
|
(1.1
|
)
|
|
(0.3
|
)
|
|||
Other changes in long-term liabilities
|
|
(1.2
|
)
|
|
(8.5
|
)
|
|
(9.2
|
)
|
|||
Other
|
|
1.7
|
|
|
1.2
|
|
|
(2.9
|
)
|
|||
Changes in current assets and liabilities:
|
|
|
|
|
|
|
||||||
Decrease (increase) in assets:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
7.8
|
|
|
(26.7
|
)
|
|
(7.7
|
)
|
|||
Inventories
|
|
(9.0
|
)
|
|
(2.2
|
)
|
|
(4.6
|
)
|
|||
Prepaid expenses and other
|
|
(2.5
|
)
|
|
(3.2
|
)
|
|
9.3
|
|
|||
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
1.1
|
|
|
2.6
|
|
|
6.0
|
|
|||
Accrued liabilities
|
|
6.1
|
|
|
8.3
|
|
|
14.2
|
|
|||
Total changes in current assets and liabilities
|
|
3.5
|
|
|
(21.2
|
)
|
|
17.2
|
|
|||
Total adjustments
|
|
$
|
69.6
|
|
|
$
|
112.2
|
|
|
$
|
68.3
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Accrual balance, beginning
|
|
$
|
25.2
|
|
|
$
|
24.8
|
|
|
$
|
22.2
|
|
Accrual for warranty matters
|
|
25.0
|
|
|
20.2
|
|
|
23.3
|
|
|||
Settlements
|
|
(23.4
|
)
|
|
(19.8
|
)
|
|
(20.7
|
)
|
|||
Accrual balance, ending
|
|
$
|
26.8
|
|
|
$
|
25.2
|
|
|
$
|
24.8
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
||||||
Net Sales:
|
|
|
|
|
|
|
||||||
North American Furniture Solutions
|
|
$
|
1,241.9
|
|
|
$
|
1,216.3
|
|
|
$
|
1,221.9
|
|
ELA Furniture Solutions
|
|
409.9
|
|
|
392.2
|
|
|
377.3
|
|
|||
Specialty
|
|
219.9
|
|
|
205.8
|
|
|
111.7
|
|
|||
Consumer
|
|
270.5
|
|
|
67.7
|
|
|
64.0
|
|
|||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
2,142.2
|
|
|
$
|
1,882.0
|
|
|
$
|
1,774.9
|
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization:
|
|
|
|
|
|
|
||||||
North American Furniture Solutions
|
|
$
|
26.5
|
|
|
$
|
26.8
|
|
|
$
|
28.0
|
|
ELA Furniture Solutions
|
|
8.2
|
|
|
7.6
|
|
|
6.6
|
|
|||
Specialty
|
|
7.4
|
|
|
6.8
|
|
|
2.1
|
|
|||
Consumer
|
|
7.3
|
|
|
1.2
|
|
|
0.8
|
|
|||
Corporate
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
49.8
|
|
|
$
|
42.4
|
|
|
$
|
37.5
|
|
|
|
|
|
|
|
|
||||||
Operating Earnings (Losses):
|
|
|
|
|
|
|
||||||
North American Furniture Solutions
|
|
$
|
125.2
|
|
|
$
|
(27.0
|
)
|
|
$
|
76.6
|
|
ELA Furniture Solutions
|
|
25.9
|
|
|
23.1
|
|
|
24.7
|
|
|||
Specialty
|
|
13.5
|
|
|
(5.3
|
)
|
|
1.8
|
|
|||
Consumer
|
|
14.7
|
|
|
9.9
|
|
|
13.6
|
|
|||
Corporate
|
|
(15.9
|
)
|
|
(26.4
|
)
|
|
(1.8
|
)
|
|||
Total
|
|
$
|
163.4
|
|
|
$
|
(25.7
|
)
|
|
$
|
114.9
|
|
|
|
|
|
|
|
|
||||||
Capital Expenditures:
|
|
|
|
|
|
|
||||||
North American Furniture Solutions
|
|
$
|
31.7
|
|
|
$
|
28.9
|
|
|
$
|
33.6
|
|
ELA Furniture Solutions
|
|
20.3
|
|
|
6.4
|
|
|
15.9
|
|
|||
Specialty
|
|
3.7
|
|
|
5.5
|
|
|
0.7
|
|
|||
Consumer
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
63.6
|
|
|
$
|
40.8
|
|
|
$
|
50.2
|
|
|
|
|
|
|
|
|
||||||
Total Assets:
|
|
|
|
|
|
|
||||||
North American Furniture Solutions
|
|
$
|
500.0
|
|
|
$
|
457.0
|
|
|
$
|
427.8
|
|
ELA Furniture Solutions
|
|
235.4
|
|
|
244.8
|
|
|
250.9
|
|
|||
Specialty
|
|
151.6
|
|
|
157.7
|
|
|
158.0
|
|
|||
Consumer
|
|
231.8
|
|
|
18.8
|
|
|
16.3
|
|
|||
Corporate
|
|
69.4
|
|
|
112.6
|
|
|
93.5
|
|
|||
Total
|
|
$
|
1,188.2
|
|
|
$
|
990.9
|
|
|
$
|
946.5
|
|
|
|
|
|
|
|
|
||||||
Goodwill:
|
|
|
|
|
|
|
||||||
North American Furniture Solutions
|
|
$
|
135.8
|
|
|
$
|
135.8
|
|
|
$
|
136.1
|
|
ELA Furniture Solutions
|
|
41.9
|
|
|
42.6
|
|
|
41.1
|
|
|||
Specialty
|
|
49.8
|
|
|
49.8
|
|
|
49.8
|
|
|||
Consumer
|
|
75.6
|
|
|
—
|
|
|
—
|
|
|||
Corporate
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
303.1
|
|
|
$
|
228.2
|
|
|
$
|
227.0
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Sales:
|
|
|
|
|
|
|
||||||
Systems
|
|
$
|
563.4
|
|
|
$
|
571.6
|
|
|
$
|
572.9
|
|
Seating
|
|
805.5
|
|
|
658.2
|
|
|
609.8
|
|
|||
Freestanding and storage
|
|
484.1
|
|
|
386.4
|
|
|
395.0
|
|
|||
Other
(1)
|
|
289.2
|
|
|
265.8
|
|
|
197.2
|
|
|||
Total
|
|
$
|
2,142.2
|
|
|
$
|
1,882.0
|
|
|
$
|
1,774.9
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Sales:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,640.6
|
|
|
$
|
1,406.3
|
|
|
$
|
1,291.5
|
|
International
|
|
501.6
|
|
|
475.7
|
|
|
483.4
|
|
|||
Total
|
|
$
|
2,142.2
|
|
|
$
|
1,882.0
|
|
|
$
|
1,774.9
|
|
(In millions)
|
|
2015
|
|
2014
|
|
2013
|
||||||
Long-lived assets:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
224.2
|
|
|
$
|
177.0
|
|
|
$
|
169.2
|
|
International
|
|
53.8
|
|
|
35.4
|
|
|
29.8
|
|
|||
Total
|
|
$
|
278.0
|
|
|
$
|
212.4
|
|
|
$
|
199.0
|
|
|
|
Year Ended
|
|||||||
(In millions)
|
|
May 30, 2015
|
|
May 31, 2014
|
|
June 1, 2013
|
|||
Cumulative translation adjustments at beginning of period
|
|
(11.1
|
)
|
|
(14.0
|
)
|
|
(13.0
|
)
|
Translation adjustments (net of tax of ($0.3, $ - and $ - )
|
|
(9.7
|
)
|
|
2.9
|
|
|
(1.0
|
)
|
Balance at end of period
|
|
(20.8
|
)
|
|
(11.1
|
)
|
|
(14.0
|
)
|
Pension and other post-retirement benefit plans at beginning of period
|
|
(26.8
|
)
|
|
(110.3
|
)
|
|
(127.6
|
)
|
Adjustments to pension and other post-retirement benefit plans (net of tax of ($2.6, $ - and $ - )
|
|
(10.0
|
)
|
|
(3.1
|
)
|
|
0.5
|
|
Reclassification to earnings - cost of sales (net of tax $ - , $(15.8), $(1.0))
|
|
—
|
|
|
27.6
|
|
|
1.8
|
|
Reclassification to earnings - operating expenses (net of tax $(0.4), $(35.1), $(7.8))
|
|
1.4
|
|
|
59.0
|
|
|
15.0
|
|
Balance at end of period
|
|
(35.4
|
)
|
|
(26.8
|
)
|
|
(110.3
|
)
|
Total accumulated other comprehensive loss
|
|
(56.2
|
)
|
|
(37.9
|
)
|
|
(124.3
|
)
|
(In millions, except per share data)
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|||||||||
2015
|
Net sales
|
$
|
509.7
|
|
|
$
|
565.4
|
|
|
$
|
516.4
|
|
|
$
|
550.7
|
|
|
Gross margin
|
185.6
|
|
|
205.7
|
|
|
190.5
|
|
|
209.6
|
|
||||
|
Net earnings (loss) attributable to Herman Miller, Inc.
(1)
|
25.2
|
|
|
27.8
|
|
|
21.0
|
|
|
23.4
|
|
||||
|
Earnings (loss) per share-basic
|
0.43
|
|
|
0.47
|
|
|
0.35
|
|
|
0.39
|
|
||||
|
Earnings (loss) per share-diluted
|
0.42
|
|
|
0.46
|
|
|
0.35
|
|
|
0.39
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2014
|
Net sales
|
$
|
468.1
|
|
|
$
|
470.5
|
|
|
$
|
455.9
|
|
|
$
|
487.5
|
|
|
Gross Margin
(1)
|
170.0
|
|
|
118.9
|
|
|
162.9
|
|
|
179.1
|
|
||||
|
Net earnings (loss) attributable to Herman Miller, Inc.
|
22.5
|
|
|
(80.6
|
)
|
|
19.4
|
|
|
16.6
|
|
||||
|
Earnings per share-basic
(1)
|
0.38
|
|
|
(1.37
|
)
|
|
0.33
|
|
|
0.28
|
|
||||
|
Earnings per share-diluted
(1)
|
0.38
|
|
|
(1.37
|
)
|
|
0.33
|
|
|
0.28
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2013
|
Net sales
(1)
|
$
|
449.7
|
|
|
$
|
441.8
|
|
|
$
|
423.5
|
|
|
$
|
460.0
|
|
|
Gross margin
|
149.7
|
|
|
148.5
|
|
|
144.4
|
|
|
162.6
|
|
||||
|
Net earnings (loss) attributable to Herman Miller, Inc.
(1)
|
20.0
|
|
|
8.4
|
|
|
16.5
|
|
|
23.4
|
|
||||
|
Earnings per share-basic
(1)
|
0.34
|
|
|
0.14
|
|
|
0.28
|
|
|
0.40
|
|
||||
|
Earnings per share-diluted
|
0.34
|
|
|
0.14
|
|
|
0.28
|
|
|
0.40
|
|
(a)
|
Disclosure Controls and Procedures.
Under the supervision and with the participation of management, the company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of May 31, 2014, and have concluded that as of that date, the company's disclosure controls and procedures were effective.
|
(b)
|
Management's Annual Report on Internal Control Over Financial Reporting and Attestation Report of the Independent Registered Public Accounting Firm.
Refer to Item 8 for “Management's Report on Internal Control Over Financial Reporting.” The effectiveness of the company's internal control over financial reporting has been audited by Ernst and Young LLP, an independent registered accounting firm, as stated in its report included in Item 8.
|
(c)
|
Changes in Internal Control Over Financial Reporting.
The company acquired DWR during the first quarter of fiscal 2015 (see Note 2 of the Notes to the Consolidated Financial Statements). As permitted by the Securities and Exchange Commission Staff interpretive guidance for newly acquired businesses, management excluded DWR from its evaluation of internal control over financial reporting as of May 30, 2015. The company is in the process of documenting and testing DWR's internal controls over financial reporting. The company will incorporate DWR into its annual report on internal control over financial reporting for fiscal year 2016. As of May 30, 2015 assets excluded from management's assessment totaled $96.1 million. For fiscal year 2015 net sales of $217.0 million and $2.9 million of net income were excluded from management's assessment.
|
HERMAN MILLER, INC.
|
|
|
|
|
||
|
/s/ Jeffrey M. Stutz
|
|
|
|
|
|
By
|
Jeffrey M. Stutz
Chief Financial Officer (Principal Accounting Officer and Duly Authorized Signatory for Registrant) |
|
|
|
|
|
|
/s/ Michael A. Volkema
|
|
/s/ Lisa Kro
|
|
|
Michael A. Volkema
(Chairman of the Board)
|
|
Lisa Kro
(Director)
|
|
|
|
|
|
|
|
/s/ David O. Ulrich
|
|
/s/ Mary Vermeer Andringa
|
|
|
David O. Ulrich
(Director)
|
|
Mary Vermeer Andringa
(Director)
|
|
|
|
|
|
|
|
/s/ Dorothy A. Terrell
|
|
/s/ John R. Hoke III
|
|
|
Dorothy A. Terrell
(Director)
|
|
John R. Hoke III
(Director)
|
|
|
|
|
|
|
|
/s/ David A. Brandon
|
|
/s/ J. Barry Griswell
|
|
|
David A. Brandon
(Director)
|
|
J. Barry Griswell
(Director)
|
|
|
|
|
|
|
|
/s/ Douglas D. French
|
|
/s/ Brian C. Walker
|
|
|
Douglas D. French
(Director)
|
|
Brian C. Walker
(President, Chief Executive Officer, and Director)
|
|
|
|
|
|
|
|
/s/ Heidi Manheimer
|
|
/s/ Jeffrey M. Stutz
|
|
|
Heidi Manheimer
(Director) |
|
Jeffrey M. Stutz
(Chief Financial Officer and Principal Accounting Officer)
|
|
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
Description
|
Balance at beginning of period
|
|
Charges to expenses or net sales
|
|
Deductions
(3)
|
|
Balance at end of period
|
||||||||
Year ended May 30, 2015:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — uncollectible accounts
(1)
|
$
|
3.4
|
|
|
$
|
0.9
|
|
|
$
|
(1.9
|
)
|
|
$
|
2.4
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — credit memo
(2)
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
(0.2
|
)
|
|
$
|
0.4
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for possible losses on notes receivable
|
$
|
0.1
|
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax asset
|
$
|
8.5
|
|
|
$
|
(0.6
|
)
|
|
$
|
3.2
|
|
|
$
|
11.1
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended May 31, 2014:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — uncollectible accounts
(1)
|
$
|
3.9
|
|
|
$
|
1.0
|
|
|
$
|
(1.5
|
)
|
|
$
|
3.4
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts Receivable allowances — credit memo
(2)
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for possible losses on notes receivable
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
0.1
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax asset
|
$
|
9.9
|
|
|
$
|
(1.8
|
)
|
|
$
|
0.4
|
|
|
$
|
8.5
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended June 1, 2013:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — uncollectible accounts
(1)
|
$
|
4.1
|
|
|
$
|
0.4
|
|
|
$
|
(0.6
|
)
|
|
$
|
3.9
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — credit memo
(2)
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for possible losses on notes receivable
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax asset
|
$
|
10.3
|
|
|
$
|
(0.5
|
)
|
|
$
|
0.1
|
|
|
$
|
9.9
|
|
|
(3)
|
Articles of Incorporation and Bylaws
|
|
|
|
|
|
|
|
(a)
|
Restated Articles of Incorporation, dated October 4, 2013, is incorporated by reference from Exhibit 3(a) of Registrant's 2014 Form 10-K Annual Report.
|
|
|
|
|
|
|
(b)
|
Amended and Restated Bylaws, dated July 13, 2015, is incorporated by reference from Exhibit 3 of the Registrant's Form 8-K dated July 17, 2015.
|
|
(4)
|
Instruments Defining the Rights of Security Holders
|
|
|
|
|
|
|
|
(a)
|
Specimen copy of Herman Miller, Inc., common stock is incorporated by reference from Exhibit 4(a) of Registrant's 1981 Form 10-K Annual Report.
|
|
|
|
|
|
|
(b)
|
Other instruments which define the rights of holders of long-term debt individually represent debt of less than 10% of total assets. In accordance with item 601(b)(4)(iii)(A) of regulation S-K, the Registrant agrees to furnish to the Commission copies of such agreements upon request.
|
|
|
|
|
|
|
(c)
|
Dividend Reinvestment Plan for Shareholders of Herman Miller, Inc., dated January 6, 1997, is incorporated by reference from Exhibit 4(d) of the Registrant's 1997 Form 10-K Annual Report.
|
|
(10)
|
Material Contracts
|
|
|
(a)
|
Herman Miller, Inc. 2011 Long-Term Incentive Plan is incorporated by reference from Appendix I of the Registrant's Definitive Proxy Statement dated August 26, 2014, as amended, filed with the Commission as of August 36, 2014.
(1)
|
|
|
|
|
|
|
(b)
|
Herman Miller, Inc. Amended and Restated Nonemployee Officer and Director Deferred Compensation Stock Purchase Plan, is incorporated by reference from Exhibit 10.3 of the Registrant's Form 10-Q Quarterly Report for the quarter ended September 3, 2011.
(1)
|
|
|
|
|
|
|
(c)
|
Form of Change in Control Agreement of the Registrant, is incorporated by reference from Exhibit 10.1 of the Registrant's Form 10-K dated July 26, 2011.
|
|
|
(d)
|
Herman Miller, Inc. Executive Equalization Retirement Plan.
(1)
|
|
|
|
|
|
|
(e)
|
Herman Miller, Inc. Executive Incentive Cash Bonus Plan dated April 24, 2006 is incorporated by reference from Exhibit 10.5 of the Registrant's Form 10-Q Quarterly Report for the quarter ended September 3, 2011.
(1)
|
|
|
(f)
|
Form of Herman Miller, Inc., Long-Term Incentive Plan Stock Option Agreement is incorporated by reference from Exhibit 99.1 of the Registrant's Form 8-K dated July 23, 2012.
(1)
|
|
|
|
|
|
|
(g)
|
Form of Herman Miller, Inc., Long-Term Incentive Restricted Stock Unit Award is incorporated by reference from Exhibit 99.2 of the Registrant's Form 8-K dated July 23, 2012.
(1)
|
|
|
|
|
|
|
(h)
|
Form of Herman Miller, Inc., Long-Term Incentive Performance Stock Unit EBITDA Award is incorporated by reference from Exhibit 99.3 of the Registrant's Form 8-K dated July 23, 2012.
(1)
|
|
|
|
|
|
|
(i)
|
Third Amended and Restated Credit agreement dated as of July 21, 2014 among Herman Miller, Inc. and various lenders is incorporated by reference from 10.1 of the Registrant's Form 8-K dated July 22, 2014.
|
|
|
|
|
|
|
(j)
|
Form of Herman Miller, Inc. 2011 Long-Term Incentive Plan Performance Share Unit Award is incorporated by reference from Exhibit 10(a) of the Registrant's Form 10-Q dated October 8, 2014.
(1)
|
|
|
|
|
|
|
(k)
|
Employment Agreement between John Edelman and Design Within Reach is incorporated by reference from Exhibit 10(b) of the Registrant's Form 10-Q dated October 8, 2014.
(1)
|
|
|
|
|
|
|
(l)
|
Employment Agreement between John McPhee and Design Within Reach is incorporated by reference from Exhibit 10(c) of the Registrant's Form 10-Q dated October 8, 2014.
(1)
|
|
|
|
|
|
|
(m)
|
Stockholders' Agreement between HM Springboard, Inc., Herman Miller, Inc., John Edelman, and John McPhee is incorporated by reference from Exhibit 10(d) of the Registrant's Form 10-Q dated October 8, 2014.
(1)(3)
|
|
|
|
|
|
|
(n)
|
HM Springboard, Inc. Stock Option Plan is incorporated by reference from Exhibit 10(e) of the Registrant's Form 10-Q dated October 8, 2014.
(1)(3)
|
|
|
|
|
|
|
(o)
|
Termination and Mutual Release Agreement between Curtis Pullen and Herman Miller, Inc., dated April 14, 2015.
(1)
|
|
|
|
|
|
|
(p)
|
Form of Herman Miller, Inc. 2011 Long-Term Incentive Plan Conditional Stock Option Award.
(1)
|
|
(21)
|
Subsidiaries
|
|
(23)(a)
|
Consent of Independent Registered Public Accounting Firm
|
|
(24)
|
Power of Attorney (Included in Item 15)
|
|
(31)(a)
|
Certificate of the Chief Executive Officer of Herman Miller, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
(31)(b)
|
Certificate of the Chief Financial Officer of Herman Miller, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
(32)(a)
|
Certificate of the Chief Executive Officer of Herman Miller, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(32)(b)
|
Certificate of the Chief Financial Officer of Herman Miller, Inc., pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101.INS
|
XBRL Instance Document
(2)
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
(2)
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
(2)
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
(2)
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
(2)
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
(2)
|
|
|
Page
|
|
ARTICLE I
|
PURPOSE
|
1
|
|
ARTICLE II
|
DEFINITIONS AND CONSTRUCTION
|
1
|
|
2.1
|
Definitions
|
1
|
|
2.2
|
Construction
|
4
|
|
ARTICLE III
|
PARTICIPATION
|
4
|
|
ARTICLE IV
|
CONTRIBUTION CREDITS
|
4
|
|
4.1
|
Contribution Credits
|
4
|
|
4.2
|
Retirement Savings Agreements
|
5
|
|
4.3
|
Reemployed Veterans
|
5
|
|
ARTICLE V
|
ALLOCATIONS TO PARTICIPANT ACCOUNTS
|
6
|
|
5.1
|
Individual Accounts
|
6
|
|
5.2
|
Account Adjustments
|
6
|
|
ARTICLE VI
|
PAYMENTS FROM PLAN
|
7
|
|
6.1
|
Election of Participant
|
8
|
|
6.2
|
Payment of amounts that are not Covered by Participant's Election
|
8
|
|
6.3
|
Payments Upon Death
|
8
|
|
6.4
|
Hardship Distributions
|
9
|
|
6.5
|
Distributions Pursuant to Domestic Relations Orders
|
9
|
|
6.6
|
Designation of Beneficiary
|
9
|
|
6.7
|
Payment Upon Change in Control
|
10
|
|
ARTICLE VII
|
DEFERRED COMPENSATION FUND
|
12
|
|
ARTICLE VIII
|
ADMINISTRATION
|
12
|
|
8.1
|
Administrator
|
12
|
|
8.2
|
Indemnification
|
12
|
|
8.3
|
Records and Reports
|
12
|
|
8.4
|
Appointments of Committee
|
12
|
|
8.5
|
Claims Procedures
|
13
|
|
8.6
|
Rules and Decisions
|
14
|
|
8.7
|
Committee Procedures
|
14
|
|
8.8
|
Authorization of Benefit Payments
|
14
|
|
8.9
|
Application and Forms for Benefits
|
14
|
|
8.10
|
Facility of Payment
|
15
|
|
ARTICLE IX
|
INDIVIDUAL INVESTMENT ACCOUNTS
|
15
|
|
9.1
|
Investment of Individual Accounts
|
15
|
|
9.2
|
Procedures for Investments
|
15
|
|
ARTICLE X
|
PAYMENT OF TAXES
|
15
|
|
ARTCILE XI
|
TERMINATION AND AMENDMENT
|
16
|
|
|
11.1
|
|
Amendments
|
16
|
|
11.2
|
|
Termination
|
16
|
|
ARTICLE XII
|
NONALIENATION OF BENEFITS AND DOMESTIC RELATIONS ORDERS
|
16
|
|
|
12.1
|
|
Nonalienation of Benefits
|
16
|
|
12.2
|
|
Procedure for Domestic Relations Orders
|
16
|
|
ARTCILE XIII
|
MISCELLAENOUS
|
17
|
|
|
13.1
|
|
Status of Participants
|
17
|
|
13.2
|
|
No Interest in Company Affairs
|
17
|
|
13.3
|
|
Litigation
|
17
|
|
13.4
|
|
Governing Law
|
18
|
|
13.5
|
|
Separability of Provisions
|
18
|
|
•
|
You will be placed on a paid personal Leave of Absence starting February 26, 2015. During this time you will not perform nor will you be responsible for duties related to your current role;
|
•
|
You will be available to advise me or others designated by me, relative to the transition of the North American business and be available to provide advice on other matters as requested.
|
•
|
The duration of your personal leave of absence will be 6 months from the date of this letter, at the end of which your employment with the company will terminate (“Termination Date”) and be eligible for the separation benefits outlined in the Agreement you were provided today;
|
•
|
As of February 26, 2015 you will no longer have access to HM systems, administrative support or expense reimbursement for expenses incurred after February 26th. However, Karen Fox will continue to be available as needed to effectively transition any issues or open items.
|
•
|
Your compensation beginning February 26, 2015 will be maintained at your current rate until the Termination Date and you will be eligible to receive all of the benefits available to full-time Herman Miller employees.
|
•
|
You will be considered as continuing your employment through the Termination Date for purposes of vesting in the exercise of any Long-Term Incentive Awards. You will not be eligible for any additional Long-Term Incentive Awards.
|
•
|
You will be eligible for the Executive Incentive Cash Bonus for fiscal year 2015. You will not be eligible to participate in the Executive Incentive Cash Bonus Plan after this fiscal year.
|
•
|
You will be entitled to use your bundled benefits through the Termination Date.
|
•
|
This arrangement is subject to your execution of a Termination and Mutual Release agreement in a form provided by HMI and your cooperation in assisting in the transition of your role due to the unique and continued employment relationship being offered to you through the personal leave of absence.
|
•
|
You will receive executive outplacement support.
|
1.
|
Confidential Information
. Employee understands that in the ordinary course of its business, HMI has developed various valuable trade secrets and confidential business information. Employee acknowledges that he has been exposed to such trade secrets and information and that the protection of such is of vital importance to HMI’s business. For purposes of this Agreement, confidential business information is information: (a) that is not known by the actual or potential competitors of HMI and is generally unavailable to the public, (b) that has been created, discovered, developed or otherwise become known to HMI or in which property rights have been assigned or otherwise conveyed to HMI from a third party, and (c) that has material economic value to HMI’s present or future business. Examples of such confidential information may include, but are not limited to, information as to any of HMI’s customers, prices, sales techniques, estimating and pricing systems, internal cost controls, production processes and methods, product planning and development programs, marketing plans, product information, inventions, blueprints, sketches and drawings, trade secrets, and technical and business concepts related to the business, whether devised or invented in whole or in part by Employee and whether or not reduced to practice.
|
2.
|
Nondisclosure
. Employee agrees he has not and will not, directly or indirectly, at any time disclose any trade secrets or confidential information of HMI, or the confidential information of actual or potential customers or vendors of HMI, to others which he has obtained in the course of his employment with HMI. Employee has not and shall not use any such trade secrets or confidential information for his own personal use or advantage, or make such secrets or information available for use by others. Violation of this provision shall entitle HMI to pursue all appropriate legal remedies. Nothing in this Agreement shall prevent Employee from using his general knowledge, skill, and experience in gainful employment by a third party after his employment with HMI terminates.
|
3.
|
Extended Employment
. While on Leave of Absence status, Employee will receive his current regular base salary less applicable withholdings, through his termination date. In addition, he will remain enrolled in and eligible for current benefit and bonus programs through the termination date. Employee will not be eligible for any additional Long Term Incentive awards. Current awards will continue to vest through the termination date.
|
4.
|
Early Termination
. In the event Employee breaches this agreement of secures alternate employment, the Extended Employment will stop. If employee secures alternate employment prior to August 28, 2015, Employee will inform HMI’s Senior Vice President of People Services in writing. Employee’s termination date will be adjusted to the last day of the payroll week immediately preceding Employee’s start date with a new employer or to the date of the breach of the Agreement and the Extended Employment will end. Payment under section 1 of Exhibit A will start at this time subject to the non-competition and non-solicitation provisions described in Exhibit A or if a breach negates HMI’s obligation to make such payments.
|
5.
|
Return of HMI Property
. Employee will immediately return to HMI all Company property including any and all sales aids, customer lists, catalogues, manuals, software programs, drawings, blueprints, notes, memoranda, and any and all other documents, computer files, and electronic information which are or have been in Employee’s possession or control and which contain any trade secrets or confidential information or which otherwise relate to HMI’s business, and any other Company property in his possession.
|
6.
|
Payment by HMI
. Employee acknowledges that all earned wages, bonuses, fringe benefits, vacation pay, commissions, and other obligations owed by HMI to the Employee have been paid by HMI or will be paid as detailed on Exhibit A and Exhibit C if otherwise not paid to Employee. No other payments are owed to the Employee other than claims for vested benefits under any retirement plans, stock option plans, or insurance benefits plans, which rights are controlled by the language in applicable plan documents.
|
7.
|
Mutual Release
. Except for the enforcement of the terms and covenants in this Agreement, Employee and HMI hereby release each other and their officers, directors, employees, agents, successors, and assigns from any and all claims and obligations arising under federal, state, or local law by statute, common law, public policy, or equity that each may have against the other arising out of the employment relationship to the fullest extent permitted by law. Employee specifically waives any claim for unlawful discrimination including, but not limited to claims for race, sex, age, religion, disability, or national origin discrimination. Employee further agrees to waive and release any rights he might have under the federal Age Discrimination in Employment Act of 1967, as amended (29 United States Code section 621
et
seq
.) (“ADEA”) against HMI, pursuant to the terms of the attached ADEA Waiver and Release. The release, however, does not prevent Employee from seeking a judicial determination regarding the validity of the attached ADEA Waiver and Release. This release covers claims and obligations even if they are unknown at this time. Employee waives any entitlement to any form of personal relief for claims arising out of the employment relationship; including monetary relief or damages, to the fullest extent permitted by law. HMI and Employee agree that this Agreement is a complete defense to any claim and obligation released and waived by this Agreement which may be subsequently asserted.
|
8.
|
Nondisparagement
.
Employee agrees that he will not, either directly or indirectly through any agent or surrogate, and whether orally or in writing, Disparage or Denigrate the Company or HMI, or the shareholders, members, directors, managers, officers, employees, attorneys, or agents of the Company or HMI. Employee also agrees that he will not, either directly or indirectly through any agent or surrogate, and whether orally or in writing, Disparage or Denigrate the business, products, equipment, operations, management, personnel, policies, or procedures of the Company or HMI. As used in this Agreement, to “Disparage or Denigrate” includes, but is not limited to, impugning the character, honesty, integrity, morality, business acumen, professional skill or judgment, abilities, qualities, or reliability of any person or entity.
|
9.
|
Severability
. In the event any term of this Agreement is unenforceable, then such unenforceable term, if possible, will be altered so as to be enforceable. Or, if that is not possible, then it will be deleted from this Agreement and the remaining part of the Agreement will remain in effect.
|
10.
|
Governing Law
. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Michigan (without regard to conflict of law provisions).
|
11.
|
Entire Agreement
. This Agreement and the attached ADEA Waiver contain the entire understanding of the parties and supersedes all previous oral and written agreements; there are no other agreements, representations, or understandings not set forth herein. Further, this Agreement can be modified only by a written agreement signed by Employee and HMI’s President.
|
12.
|
Binding Effect
.
This is a binding agreement. The term HMI includes all of Herman Miller, Inc.’s subsidiaries, officers, directors, and affiliates. The term Employee includes all of his heirs, administrators, successors, assigns, and those who could make a claim through him. This Agreement shall benefit and be binding upon HMI’s successors and assigns, and Employee’s executors, administrators, and representatives.
|
13.
|
Voluntary Execution
.
Employee acknowledges that he has read this Agreement, understands its terms and legal consequences, has been given an opportunity to consider this Agreement and its release of all claims, and it has been entered into by him voluntarily. Employee further acknowledges that he has been advised to consult with an attorney prior to executing this Agreement. Employee has not assigned any claims against HMI. Employee has been given an opportunity of up to 49 days to consider this Agreement and his release of all claims. In addition, Employee understands that he may revoke the ADEA Waiver and Release within seven (7) days after he signs it.
|
1.
|
You will receive current regular base salary and those benefits, less applicable withholdings, listed below for eighteen months following your termination date and the full execution of this Agreement, unless you receive other employment with a competitor as defined below, solicit the employees of Company as defined below, or otherwise breach this agreement. This amount will be paid on the standard payroll cycle. A lump sum payment is not available under this Agreement.
|
2.
|
You are eligible to continue to participate in the medical and dental plans as long as you receive base compensation from HMI under paragraph 1 of this severance program. In order to continue your participation in the medical and dental plans you must elect COBRA coverage. The continuation of medical and dental coverage will begin once you enroll in COBRA. The effective date will be retroactive to your termination date. You will continue to pay the regular employee rate (pretax payroll deduction) during the severance period. HMI will pay the balance of the COBRA premium during the severance period. Thereafter, you have the option to purchase medical and dental insurance under COBRA at your own expense. The COBRA coverage period will include the severance period. You will be provided a “Disposition of Benefits” letter to explain this process in more detail. If you become eligible for medical and dental insurance through another employer, your participation in the medical and dental plans will cease.
|
3.
|
Any accrued but unused vacation for fiscal year 2015/2016 will be paid to you within five weeks of August 28, 2015.
|
4.
|
You are eligible for the Executive Incentive Bonus earned for financial year 2014/2015 ending May 30, 2015, if HMI earns a bonus. You are not eligible for the Executive Incentive Bonus earned for financial year 2015/2016 if HMI earns a bonus.
|
5.
|
If you are enrolled in a Healthcare Reimbursement (flexible spending) Account, you have the option to continue your participation in this account through COBRA. The payments will be with after-tax dollars. You must elect COBRA coverage to continue your participation. If you choose not to continue participation in the Healthcare Reimbursement account under COBRA, all claims for services incurred up to your termination date must be submitted within 90 days of the date of your termination of employment. Any unused balances will be forfeited at that time.
|
6.
|
If you are enrolled in a Health Savings Account, you can continue to make contributions on an after-tax basis as long as you are enrolled in a High Deductible Health Plan.
|
7.
|
You are not eligible to participate in the Profit Sharing and 401(k) Plan after August 28, 2015. You will receive a final core contribution to your 401(k) account based on compensation earned in this fiscal quarter up to your termination date. This core contribution will be paid at the end of the current fiscal quarter. Employee and Company matching contributions to the 401(k) Plan will cease as of August 28, 2015. In addition, there will be no Profit Sharing contribution to the Plan for the year ending May 28, 2016, and there will be no Profit Sharing contributions thereafter. The balance of your quarterly payroll deductions relating to the employee stock purchase plan will be paid to you within thirty (30) days of your termination date.
|
8.
|
Any amount of income deferred by you pursuant to the Executive Equalization Plan are fully vested and will be distributed to you according to the terms of the Plan and your deferral elections.
|
9.
|
The restricted stock units granted to you on July 15, 2013, representing 4,349 shares are not vested, but under section 3(e) of the Restricted Stock Unit Award Agreement you are entitled to receive a portion of the shares equivalent to 25/36 of the award plus a prorated portion of the dividends, pursuant to the grant. The Performance Shares (HMVA) granted to you on July 15, 2013, representing 4,349 shares are not vested, but under section 3a(iii) of the HMVA Performance Share Unit Award Agreement you are entitled to receive
|
10.
|
Vested stock options granted to you under the HMI Long Term Incentive Plan will expire the earlier of the natural expiration of the option or 3 months after your separation date, as provided in the plan. Unvested stock options will be forfeited.
|
11.
|
The balance of any quarterly payroll deductions relating to the employee stock purchase plan will be paid to you within thirty (30) days of your separation date.
|
12.
|
You will receive executive outplacement support.
|
13.
|
You are responsible for returning your Corporate Visa card along with any keys, phone cards and/or access cards immediately. You should process a final expense report to cover the cost of any unreimbursed business-related travel through February 26, 2015. If you have an existing balance on your Corporate Visa card or your cellular phone service, you are required to pay off the balance within 10 days of this letter. Any remaining balances at that point will be deducted from your severance pay.
|
14.
|
Any balance owed to Herman Miller on your employee purchase account (product purchase) will be deducted from the total amount of severance pay or will be your responsibility in the event that severance will not cover the full amount due.
|
15.
|
You may keep your company provided laptop.
|
16.
|
You will be provided with four additional coaching sessions with the executive coach with whom you have been working, at the Company's expense. You will be responsible for the cost of any additional sessions.
|
17.
|
Your corporate cellular plan will be converted to a personal plan at the end of March 2015.
|
18.
|
Your corporate email account will remain active through the end of March 2015.
|
•
|
Steelcase
|
•
|
Haworth
|
•
|
Knoll
|
•
|
Teknion
|
•
|
HNI
|
•
|
Allsteel
|
•
|
KI
|
•
|
Kimball
|
•
|
Trendway
|
•
|
Artwright
|
•
|
Inscape
|
•
|
MACsys
|
•
|
Riviera
|
•
|
Humanscale
|
•
|
Izzydesign
|
•
|
Halcon
|
•
|
Vitra
|
•
|
Nucraft Furniture
|
•
|
UNICOR
|
•
|
Tayco
|
•
|
Tremain
|
•
|
Virco
|
•
|
Watson
|
•
|
Maxxon
|
•
|
Unifor
|
•
|
Bernhardt
|
•
|
DECCA
|
•
|
Touhy
|
•
|
Weiland
|
•
|
Lutron
|
Name
|
Ownership
|
Jurisdiction of Incorporation
|
Colebrook Bosson Saunders, Inc.
|
100% Company
|
Michigan
|
Colebrook Bosson Saunders, Ltd.
|
100% Company
|
England, U.K.
|
Colebrook Bosson Saunders, Pty. Ltd.
|
100% Company
|
Austrailia
|
Convia, Inc.
|
100% Company
|
Delaware
|
Coro Acquisition Corporation-California
|
100% Company
|
California
|
Geiger International, Inc.
|
100% Company
|
Delaware
|
Herman Miller Accessories, LLC
|
100% Company
|
Michigan
|
Herman Miller Asia (PTE.) Ltd.
|
100% Company
|
Singapore
|
Herman Miller (Australia) Pty., Ltd.
|
100% Company
|
Australia
|
Living Edge (Aust) Pty Ltd
|
75% Company
|
Australia
|
Herman Miller Canada
|
100% Company
|
Canada
|
Herman Miller Furniture (India) Pvt. Ltd.
|
100% Company
|
India
|
Herman Miller Global Customer Solutions, Inc.
|
100% Company
|
Michigan
|
Herman Miller Global Customer Solutions (Hong Kong), Inc.
|
100% Company
|
Hong Kong
|
Herman Miller Japan, Ltd.
|
100% Company
|
Japan
|
Herman Miller, Ltd.
|
100% Company
|
England, U.K.
|
Herman Miller Mexico S.A. de C.V.
|
100% Company
|
Mexico
|
Herman Miller (Ningbo) Furniture Co. Ltd.
|
100% Company
|
China
|
Herman Miller OP Spectrum Holdings Inc.
|
100% Company
|
Michigan
|
Integrated Metal Technologies, Inc.
|
100% Company
|
Michigan
|
Maharam Fabric Corporation
|
100% Company
|
New York
|
Meridian, Inc.
|
100% Company
|
Michigan
|
Milsure Insurance, Ltd.
|
100% Company
|
Barbados
|
Nemschoff Chairs, Inc.
|
100% Company
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Wisconsin
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Sun Hing POSH Holdings Limited
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100% Company
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Hong Kong
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Herman Miller Consumer Co. Holdings
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93% Company
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Delaware
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Design Within Reach, Inc.
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93% Company
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Delaware
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1.
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I have reviewed this annual report on Form 10-K for the period ended May 30, 2015, of Herman Miller, Inc;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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1.
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I have reviewed this annual report on Form 10-K for the period ended May 30, 2015, of Herman Miller, Inc;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrants' disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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(1)
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The Annual Report on Form 10-K for the period ended May 30, 2015, which this statement accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company.
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(1)
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The Annual Report on Form 10-K for the period ended May 30, 2015, which this statement accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company.
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