[ X ]
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ANNUAL REPORT PURSUANT TO 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 the fiscal year ended June 1, 2019
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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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Registrant's telephone number, including area code: (616) 654 3000
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common stock
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MLHR
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NASDAQ-Global Select Market System
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Securities registered pursuant to Section 12(g) of the Act: None
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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 ]
|
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 [__]
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
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Yes [__] No [ X ]
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Page No.
|
Part I
|
|
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
|
|
Item 5 Market for the Registrant's Common Equity, Related Stockholder Matters, and 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 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
|
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Item 15 Exhibits and Financial Statement Schedule
|
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Item 16 Form 10-K Summary
|
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Exhibit Index
|
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Signatures
|
|
Schedule II Valuation and Qualifying Accounts
|
•
|
Political, social, and economic conditions
|
•
|
Global trade conflicts and trade policies
|
•
|
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
|
Owned Locations
|
Square
Footage
|
|
|
Use
|
Zeeland, Michigan
|
770,800
|
|
|
Manufacturing, Warehouse, Office
|
Spring Lake, Michigan
|
582,800
|
|
|
Manufacturing, Warehouse, Office
|
Holland, Michigan
|
357,400
|
|
|
Warehouse
|
Holland, Michigan
|
293,100
|
|
|
Manufacturing, Office
|
Dongguan, China*
|
269,000
|
|
|
Manufacturing, Office
|
Holland, Michigan
|
238,200
|
|
|
Office, Design
|
Sheboygan, Wisconsin
|
207,700
|
|
|
Manufacturing, Warehouse, Office
|
Melksham, United Kingdom
|
170,000
|
|
|
Manufacturing, Warehouse, Office
|
Hildebran, North Carolina
|
93,000
|
|
|
Manufacturing, Office
|
|
|
|
|
|
Leased Locations
|
Square
Footage
|
|
|
Use
|
Batavia, Ohio**
|
617,600
|
|
|
Warehouse
|
Dongguan, China*
|
429,300
|
|
|
Manufacturing, Office
|
Hebron, Kentucky**
|
423,700
|
|
|
Warehouse
|
Atlanta, Georgia
|
180,200
|
|
|
Manufacturing, Warehouse, Office
|
Bangalore, India
|
104,800
|
|
|
Manufacturing, Warehouse
|
Yaphank, New York
|
92,000
|
|
|
Warehouse, Office
|
New York City, New York
|
66,600
|
|
|
Office, Retail
|
Hong Kong, China
|
54,400
|
|
|
Warehouse
|
Brooklyn, New York
|
39,400
|
|
|
Warehouse, Retail
|
Stamford, Connecticut
|
35,300
|
|
|
Office, Retail
|
Name
|
Age
|
Year Elected an Executive Officer
|
Position with the Company
|
Andrea R. Owen
|
54
|
2018
|
President and Chief Executive Officer
|
Jeremy Hocking
|
58
|
2017
|
President, International Contract
|
Gregory J. Bylsma
|
54
|
2009
|
President, North America Contract
|
Jeffrey M. Stutz
|
48
|
2009
|
Chief Financial Officer
|
B. Ben Watson
|
54
|
2010
|
Chief Creative Officer
|
Jacqueline H. Rice
|
47
|
2019
|
General Counsel
|
John McPhee
|
56
|
2015
|
President, Retail
|
Kevin Veltman
|
44
|
2015
|
Vice President, Investor Relations & Treasurer
|
Jeffrey L. Kurburski
|
52
|
2018
|
Chief Technology Officer
|
Benjamin P.T. Groom
|
35
|
2019
|
Chief Digital Officer
|
Leander D. LeSure
|
53
|
2019
|
Chief Human Resource Officer
|
Megan Lyon
|
39
|
2019
|
Chief Strategy Officer
|
Per Share and Unaudited
|
Market
Price
High
(at close)
|
|
|
Market
Price
Low
(at close)
|
|
|
Market
Price
Close
|
|
|
Earnings
Per Share-
Diluted
|
|
|
Dividends
Declared Per
Share
|
|
|||||
Year ended June 1, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter
|
$
|
40.10
|
|
|
$
|
32.75
|
|
|
$
|
38.30
|
|
|
$
|
0.60
|
|
|
$
|
0.1975
|
|
Second quarter
|
40.65
|
|
|
31.38
|
|
|
33.86
|
|
|
0.66
|
|
|
0.1975
|
|
|||||
Third quarter
|
37.62
|
|
|
28.66
|
|
|
36.89
|
|
|
0.66
|
|
|
0.1975
|
|
|||||
Fourth quarter
|
39.70
|
|
|
33.94
|
|
|
35.49
|
|
|
0.78
|
|
|
0.1975
|
|
|||||
Year
|
$
|
40.65
|
|
|
$
|
28.66
|
|
|
$
|
35.49
|
|
|
$
|
2.70
|
|
|
$
|
0.7900
|
|
Year ended June 2, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
First quarter
|
$
|
35.30
|
|
|
$
|
29.25
|
|
|
$
|
34.00
|
|
|
$
|
0.55
|
|
|
$
|
0.1800
|
|
Second quarter
|
37.00
|
|
|
32.05
|
|
|
34.55
|
|
|
0.55
|
|
|
0.1800
|
|
|||||
Third quarter
|
41.84
|
|
|
33.65
|
|
|
36.75
|
|
|
0.49
|
|
|
0.1800
|
|
|||||
Fourth quarter
|
39.20
|
|
|
29.95
|
|
|
32.85
|
|
|
0.53
|
|
|
0.1800
|
|
|||||
Year
|
$
|
41.84
|
|
|
$
|
29.25
|
|
|
$
|
32.85
|
|
|
$
|
2.12
|
|
|
$
|
0.7200
|
|
Period
|
Total Number of
Shares (or Units) Purchased
|
|
|
Average Price Paid per Share or Unit
|
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs
(1)
|
|
|
3/3/19-3/30/19
|
11,253
|
|
|
34.95
|
|
|
11,253
|
|
|
$
|
268,232,481
|
|
3/31/19-4/27/19
|
60,815
|
|
|
36.61
|
|
|
60,815
|
|
|
$
|
266,006,033
|
|
4/28/19-6/1/19
|
47,498
|
|
|
37.56
|
|
|
47,498
|
|
|
$
|
264,222,017
|
|
Total
|
119,566
|
|
|
|
|
|
119,566
|
|
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
Herman Miller, Inc.
|
$
|
100
|
|
|
$
|
90
|
|
|
$
|
105
|
|
|
$
|
111
|
|
|
$
|
114
|
|
|
$
|
126
|
|
S&P 500 Index
|
$
|
100
|
|
|
$
|
110
|
|
|
$
|
109
|
|
|
$
|
127
|
|
|
$
|
142
|
|
|
$
|
143
|
|
NASD Non-Financial
|
$
|
100
|
|
|
$
|
121
|
|
|
$
|
119
|
|
|
$
|
159
|
|
|
$
|
187
|
|
|
$
|
186
|
|
Review of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
(In millions, except key ratios and per share data)
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Operating Results
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,567.2
|
|
|
$
|
2,381.2
|
|
|
$
|
2,278.2
|
|
|
$
|
2,264.9
|
|
|
$
|
2,142.2
|
|
Gross margin
|
929.9
|
|
|
873.0
|
|
|
864.2
|
|
|
874.2
|
|
|
791.4
|
|
|||||
Selling, general, and administrative
(1)
|
649.5
|
|
|
621.0
|
|
|
587.5
|
|
|
585.6
|
|
|
556.6
|
|
|||||
Design and research
|
76.9
|
|
|
73.1
|
|
|
73.1
|
|
|
77.1
|
|
|
71.4
|
|
|||||
Operating earnings
|
203.5
|
|
|
178.9
|
|
|
191.1
|
|
|
211.5
|
|
|
163.4
|
|
|||||
Earnings before income taxes
|
195.1
|
|
|
168.1
|
|
|
177.6
|
|
|
196.6
|
|
|
145.2
|
|
|||||
Net earnings
|
160.5
|
|
|
128.7
|
|
|
124.1
|
|
|
137.5
|
|
|
98.1
|
|
|||||
Net cash provided by operating activities
|
216.4
|
|
|
166.5
|
|
|
202.1
|
|
|
210.4
|
|
|
167.7
|
|
|||||
Net cash used in investing activities
|
(165.0
|
)
|
|
(62.7
|
)
|
|
(116.3
|
)
|
|
(80.8
|
)
|
|
(213.6
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(91.9
|
)
|
|
2.5
|
|
|
(74.6
|
)
|
|
(106.5
|
)
|
|
6.8
|
|
|||||
Depreciation and amortization
|
72.1
|
|
|
66.9
|
|
|
58.9
|
|
|
53.0
|
|
|
49.8
|
|
|||||
Capital expenditures
|
85.8
|
|
|
70.6
|
|
|
87.3
|
|
|
85.1
|
|
|
63.6
|
|
|||||
Common stock repurchased plus cash dividends paid
|
93.5
|
|
|
88.9
|
|
|
63.1
|
|
|
49.0
|
|
|
37.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Key Ratios
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales growth
|
7.8
|
%
|
|
4.5
|
%
|
|
0.6
|
%
|
|
5.7
|
%
|
|
13.8
|
%
|
|||||
Gross margin
(2)
|
36.2
|
|
|
36.7
|
|
|
37.9
|
|
|
38.6
|
|
|
36.9
|
|
|||||
Selling, general, and administrative
(1) (2)
|
25.3
|
|
|
26.1
|
|
|
25.8
|
|
|
25.9
|
|
|
26.0
|
|
|||||
Design and research
(2)
|
3.0
|
|
|
3.1
|
|
|
3.2
|
|
|
3.4
|
|
|
3.3
|
|
|||||
Operating earnings
(2)
|
7.9
|
|
|
7.5
|
|
|
8.4
|
|
|
9.3
|
|
|
7.6
|
|
|||||
Net earnings growth (decline)
|
24.7
|
|
|
3.7
|
|
|
(9.7
|
)
|
|
40.2
|
|
|
543.9
|
|
|||||
After-tax return on net sales
(3)
|
6.3
|
|
|
5.4
|
|
|
5.4
|
|
|
6.1
|
|
|
4.6
|
|
|||||
After-tax return on average assets
(4)
|
10.5
|
|
|
9.2
|
|
|
9.8
|
|
|
11.3
|
|
|
9.0
|
|
|||||
After-tax return on average equity
(5)
|
23.2
|
%
|
|
20.6
|
%
|
|
22.3
|
%
|
|
29.1
|
%
|
|
25.0
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Share and Per Share Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share-diluted
|
$
|
2.70
|
|
|
$
|
2.12
|
|
|
$
|
2.05
|
|
|
$
|
2.26
|
|
|
$
|
1.62
|
|
Cash dividends declared per share
|
0.79
|
|
|
0.72
|
|
|
0.68
|
|
|
0.59
|
|
|
0.56
|
|
|||||
Book value per share at year end
(6)
|
12.23
|
|
|
11.22
|
|
|
9.84
|
|
|
8.76
|
|
|
7.04
|
|
|||||
Market price per share at year end
|
35.49
|
|
|
32.85
|
|
|
32.70
|
|
|
31.64
|
|
|
27.70
|
|
|||||
Weighted average shares outstanding-diluted
|
59.4
|
|
|
60.3
|
|
|
60.6
|
|
|
60.5
|
|
|
60.1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Condition
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,569.3
|
|
|
$
|
1,479.5
|
|
|
$
|
1,306.3
|
|
|
$
|
1,235.2
|
|
|
$
|
1,192.7
|
|
Working capital
(7)
|
215.2
|
|
|
231.6
|
|
|
106.2
|
|
|
90.5
|
|
|
110.1
|
|
|||||
Current ratio
(8)
|
1.5
|
|
|
1.6
|
|
|
1.3
|
|
|
1.2
|
|
|
1.3
|
|
|||||
Interest-bearing debt and related swap agreements
(9)
|
282.8
|
|
|
265.1
|
|
|
197.8
|
|
|
221.9
|
|
|
290.0
|
|
|||||
Stockholders' equity
|
719.2
|
|
|
664.8
|
|
|
587.7
|
|
|
524.7
|
|
|
420.3
|
|
|||||
Total capital
(10)
|
1,002.0
|
|
|
929.9
|
|
|
785.5
|
|
|
746.6
|
|
|
710.3
|
|
•
|
North America Contract
— Includes the operations associated with the design, manufacture, and sale of furniture and textile products for work-related settings, including office, education and healthcare environments, throughout the United States and Canada. The business associated with the Company's owned contract furniture dealers is also included in the North America Contract segment. In addition to the Herman Miller brand, this segment includes the operations associated with the design, manufacture and sale of high-craft furniture products and textiles, including Geiger wood products, Maharam textiles, Nemschoff and Herman Miller Collection products.
|
•
|
International Contract
— Includes the operations associated with the design, manufacture and sale of furniture products, primarily for work-related settings, in the Europe, Middle East and Africa
(
EMEA), Latin America and Asia-Pacific geographic regions.
|
•
|
Retail
— 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 e-commerce, direct mailing catalogs and DWR and HAY studios.
|
•
|
Portfolio of Leading Brands and Products -
Herman Miller is a globally-recognized, authentic brand known for working with some of the most well known and respected designers in the world. Over the years, it has evolved into Herman Miller Group, a family of brands that collectively offers a variety of products for environments where people live, learn, work and heal. Within the industries in which the Company operates, Herman Miller, DWR, Geiger, Maharam, POSH, Nemschoff, Colbrook Bosson Saunders ("CBS"), HAY, Maars Livings Walls and Naughtone are acknowledged as leading brands that inspire architects and designers to create their best design solutions. This portfolio has enabled Herman Miller to connect with new audiences, channels, geographies and product categories. Leveraging the collective brand equity of the Herman Miller Group across the lines of business 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 provide 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 the industry to embrace the concepts of lean manufacturing. HMPS provides the foundation for all the Company's 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 its manufacturing supply chain and distribution channel. The Company believes these concepts hold significant promise for further gains in reliability, quality and efficiency.
|
•
|
Omni-Channel Reach
- The Company has built a multi-channel distribution capability that it considers unique. Through contract furniture dealers, direct customer sales, retail studios, e-Commerce, catalogs and independent retailers, the Company serves contract and residential customers across a range of channels and geographies.
|
•
|
Global Scale
- In addition to its global omni-channel distribution capability, the Company has a global network of designers, suppliers, manufacturing operations and research and development centers that position the Company to serve contract and residential customers globally. The Company believes that leveraging this global scale will be an important enabler to executing its strategy.
|
•
|
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. Many of these dealers also offer furniture-related services, including product installation.
|
•
|
Direct Contract 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.
|
•
|
Retail Studios
- At the end of
fiscal 2019
, the Retail business unit included 39 retail studios (including 36 operating under the DWR brand, 2 under the HAY brand and a Herman Miller Flagship store in New York City). This business also operates three outlet studios. The retail studios are located in metropolitan areas throughout North America.
|
•
|
E-Commerce
- The Company sells products through its online stores, in which products are available for sale via the Company's website, hermanmiller.com, global e-commerce platforms, as well as through the dwr.com and us.hay.com online stores. These sites complement our existing methods of distribution and extend the Company's brand to new customers.
|
•
|
Direct-Mail Catalogs
- The Company’s Retail 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 e-commerce websites.
|
•
|
Independent Retailers
- Certain products are sold to end customers through independent retail operations.
|
•
|
Andi Owen was elected as President and Chief Executive Officer of the Company effective on August 22, 2018, succeeding Brian Walker who retired from the Company in August 2018. Ms. Owen joins Herman Miller after a 25-year career at Gap Inc., where she most recently served as Global President of Banana Republic, leading 11,000 employees in over 600 stores across 27 countries.
|
•
|
Net sales were
$2,567.2 million
and orders were
$2,614.9 million
, representing an increase of
7.8%
and
8.6%
, respectively, when compared to the prior year. The increase in net sales was driven primarily by strong performance within the North America, International and Retail segments, as well as a reclassification related to the adoption of the new revenue recognition standard (ASC 606). On an organic basis, net sales were
$2,583.7 million
(*) and orders were
$2,628.6 million
, representing an increase of
7.1%
(*) and
7.7%
, respectively, when compared to the prior year.
|
•
|
Gross margin was
36.2%
as compared to
36.7%
in the prior year. The decrease in gross margin was driven primarily by the reclassification impact of adopting the new revenue recognition standard (ASC 606) at the beginning of fiscal 2019. Higher commodity costs and the impact of tariffs on Chinese imports also decreased gross margin, but were offset by lower material costs within the North America segment and lower costs within the International segment.
|
•
|
Operating expenses increased by
$32.3 million
or
4.7%
as compared to the prior year. Operating expenses included special charges, totaling
$13.1 million
, related mainly to costs associated with the CEO transition, certain business structure realignment costs and third party consulting costs attributable to the Company's profit enhancement initiatives. Operating expenses also included restructuring costs of
$10.2 million
related to actions involving facilities consolidation, targeted workforce reductions and costs associated with an early retirement program.
|
•
|
The effective tax rate was
20.3%
for fiscal 2019 compared to
25.2%
for the prior year. The decrease in the current year effective tax rate was driven primarily by the full year impact of the Tax Cuts and Jobs Act (the "Act") as compared to a partial year impact in fiscal 2018.
|
•
|
Diluted earnings per share increased
$0.58
to
$2.70
, a
27.4%
increase as compared to the prior year. Excluding the impact of restructuring expenses, other special charges, a gain associated with the fair value adjustment of an investment, an inventory step up on the HAY equity method investment and the final adjustment related to the adoption U.S. tax reform, adjusted diluted earnings per share were
$2.97
(*), a
29.1%
increase as compared to the prior year.
|
•
|
The Company declared cash dividends of
$0.79
per share compared to
$0.72
per share in the prior year.
|
•
|
Strategic investments of approximately $72 million were made in HAY and Maars Living Walls.
|
•
|
Effective in the fourth quarter of fiscal 2019, the Company revised its reportable segments to combine the Specialty reportable segment with the North American Furniture Solutions reportable segment. The newly combined segment is called "North America Contract".
|
•
|
North America remains generally conducive to continued growth due to recent positive industry order trends as reported by the Business and Institutional Furniture Manufacturers Association ("BIFMA"), GDP growth, service sector employment and architectural billings.
|
•
|
The Company is monitoring the resolution of various trade policy negotiations between the U.S. and key trading partners as well as the ongoing negotiations concerning the U.K. referendum to exit the European Union.
|
•
|
The Company is also navigating the impact of global tariffs. In May 2019, the U.S. enacted a 25% tariff rate on certain goods imported by the Company and its suppliers from China. The Company continues to believe that pricing, strategic sourcing actions, and profit optimization initiatives will fully offset the current level of tariffs imposed on imports from China.
|
|
June 1, 2019
|
June 2, 2018
|
||||||||||||||||||||||
|
North America
|
International
|
Retail
|
Total
|
North America
|
International
|
Retail
|
Total
|
||||||||||||||||
Net Sales, as reported
|
$
|
1,686.5
|
|
$
|
492.2
|
|
$
|
388.5
|
|
$
|
2,567.2
|
|
$
|
1,589.8
|
|
$
|
434.5
|
|
$
|
356.9
|
|
$
|
2,381.2
|
|
% change from PY
|
6.1
|
%
|
13.3
|
%
|
8.9
|
%
|
7.8
|
%
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
Proforma Adjustments
|
|
|
|
|
|
|
|
|
||||||||||||||||
Dealer Divestitures
|
—
|
|
—
|
|
—
|
|
—
|
|
(0.8
|
)
|
—
|
|
—
|
|
(0.8
|
)
|
||||||||
Currency Translation Effects
(1)
|
3.8
|
|
12.4
|
|
0.3
|
|
16.5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Impact of Reclassification Related to New Revenue Recognition Standard
|
—
|
|
—
|
|
—
|
|
—
|
|
23.9
|
|
12.3
|
|
—
|
|
36.2
|
|
||||||||
Impact of Change in DWR Shipping Terms
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5.0
|
)
|
(5.0
|
)
|
||||||||
Organic net sales
|
$
|
1,690.3
|
|
$
|
504.6
|
|
$
|
388.8
|
|
$
|
2,583.7
|
|
$
|
1,612.9
|
|
$
|
446.8
|
|
$
|
351.9
|
|
$
|
2,411.6
|
|
% change from PY
|
4.8
|
%
|
12.9
|
%
|
10.5
|
%
|
7.1
|
%
|
|
|
|
|
|
June 1, 2019
|
June 2, 2018
|
||||
Earnings per Share - Diluted
|
$
|
2.70
|
|
$
|
2.12
|
|
|
|
|
||||
Less: Adjustments Related to Adoption of U.S. Tax Cuts and Jobs Act
|
(0.02
|
)
|
(0.05
|
)
|
||
Less: Investment fair value adjustment, after tax
|
(0.03
|
)
|
—
|
|
||
Add: Special charges, after tax
|
0.18
|
|
0.16
|
|
||
Add: inventory step up on HAY equity method investment, after tax
|
0.01
|
|
—
|
|
||
Add: Restructuring expenses, after tax
|
0.13
|
|
0.07
|
|
||
Adjusted Earnings per Share - Diluted
|
$
|
2.97
|
|
$
|
2.30
|
|
|
|
|
||||
Weighted Average Shares Outstanding (used for Calculating Adjusted Earnings per Share) – Diluted
|
59,381,791
|
|
60,311,305
|
|
(Dollars in millions)
|
Fiscal 2019
|
|
Fiscal 2018
|
|
% Change
|
|||||
Net sales
|
$
|
2,567.2
|
|
|
$
|
2,381.2
|
|
|
7.8
|
%
|
Cost of sales
|
1,637.3
|
|
|
1,508.2
|
|
|
8.6
|
%
|
||
Gross margin
|
929.9
|
|
|
873.0
|
|
|
6.5
|
%
|
||
Operating expenses
|
726.4
|
|
|
694.1
|
|
|
4.7
|
%
|
||
Operating earnings
|
203.5
|
|
|
178.9
|
|
|
13.8
|
%
|
||
Net other expenses
|
8.4
|
|
|
10.8
|
|
|
(22.2
|
)%
|
||
Earnings before income taxes
|
195.1
|
|
|
168.1
|
|
|
16.1
|
%
|
||
Income tax expense
|
39.6
|
|
|
42.4
|
|
|
(6.6
|
)%
|
||
Equity income from nonconsolidated affiliates, net of tax
|
5.0
|
|
|
3.0
|
|
|
66.7
|
%
|
||
Net earnings
|
160.5
|
|
|
128.7
|
|
|
24.7
|
%
|
||
Net earnings attributable to noncontrolling interests
|
—
|
|
|
0.6
|
|
|
(100.0
|
)%
|
||
Net earnings attributable to Herman Miller, Inc.
|
$
|
160.5
|
|
|
$
|
128.1
|
|
|
25.3
|
%
|
|
Fiscal 2019
|
|
Fiscal 2018
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
63.8
|
|
|
63.3
|
|
Gross margin
|
36.2
|
|
|
36.7
|
|
Selling, general and administrative expenses
|
24.9
|
|
|
25.8
|
|
Restructuring and impairment expenses
|
0.4
|
|
|
0.2
|
|
Design and research expenses
|
3.0
|
|
|
3.1
|
|
Total operating expenses
|
28.3
|
|
|
29.1
|
|
Operating earnings
|
7.9
|
|
|
7.5
|
|
Net other expenses
|
0.3
|
|
|
0.5
|
|
Earnings before income taxes
|
7.6
|
|
|
7.1
|
|
Income tax expense
|
1.5
|
|
|
1.8
|
|
Equity income from nonconsolidated affiliates, net of tax
|
0.2
|
|
|
0.1
|
|
Net earnings
|
6.3
|
|
|
5.4
|
|
Net earnings attributable to noncontrolling interests
|
—
|
|
|
—
|
|
Net earnings attributable to Herman Miller, Inc.
|
6.3
|
|
|
5.4
|
|
•
|
Increased sales volumes within the North America segment of approximately $74 million due to increased demand within the Company's core contract furniture business.
|
•
|
Increased sales volumes within the International segment of approximately $57 million, which were driven by broad-based growth across the Asia Pacific and Latin America regions.
|
•
|
Adoption of ASC 606 - Revenue from Contracts with Customers at the beginning of fiscal 2019 led to the reclassification of certain pricing elements from Net sales to Cost of sales, which resulted in an increase in Net sales of $40.5 million compared to the prior year in which revenue was recorded under previous accounting rules.
|
•
|
Increased sales volumes within the Retail segment of approximately $29 million, which were driven primarily by the introduction of HAY products and growth across the Company's DWR studio, e-commerce and contract channels.
|
•
|
Incremental list price increases, net of deeper contract price discounting, of approximately $5 million.
|
•
|
Foreign currency translation had a negative impact on net sales of approximately $16 million.
|
•
|
Approximately 60 basis points of the year-over-year decrease in gross margin related to the adoption of the new revenue recognition standard (ASC 606) at the beginning of fiscal 2019. This adoption requires recording certain product pricing elements as expenses within cost of goods sold that were previously classified on a net basis within sales. This reclassification lowers gross margin percentage but has no impact on gross margin dollars.
|
•
|
Higher commodity costs and the impact of tariffs on Chinese imports drove an unfavorable impact of approximately 30 basis points relative to last fiscal year.
|
•
|
Higher freight and storage costs within the Retail segment decreased gross margin by approximately 30 basis points as compared to last fiscal year.
|
•
|
Lower material costs within the North America segment, due primarily to reduced outsourcing, and lower costs within the International segment, due primarily to volume leverage and product mix, increased gross margin by approximately 50 basis points as compared to last fiscal year.
|
•
|
Compensation and benefit costs increased by approximately $9 million due mainly to employee headcount and wage increases.
|
•
|
Incremental spend of approximately $5 million related to the marketing, e-commerce and studios associated with the launch of the HAY brand in North America.
|
•
|
Higher information technology related expenses of approximately $4 million.
|
•
|
Restructuring and special charges, primarily related to facilities consolidation and costs associated with an early retirement program increased operating expenses by approximately $4 million.
|
•
|
Sales volume based costs, such as sales commissions and royalties, drove an increase in operating expenses of approximately $4 million.
|
•
|
Marketing expenses increased by roughly $3 million due primarily to the sales initiatives within the North America and Retail segments.
|
•
|
Incremental costs related to the continued growth and expansion of DWR retail studios increased operating expenses by approximately $2 million.
|
•
|
Depreciation expense increased by approximately $2 million and was driven primarily by investment in facilities and information technology systems.
|
•
|
North America Contract
— Includes the operations associated with the design, manufacture, and sale of furniture and textile products for work-related settings, including office, education and healthcare environments, throughout the United States and Canada. The business associated with the Company's owned contract furniture dealers is also included in the North America Contract segment. In addition to the Herman Miller brand, this segment includes the operations associated with the design, manufacture and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles, Nemschoff and Herman Miller Collection products.
|
•
|
International Contract
— Includes the operations associated with the design, manufacture and sale of furniture products, primarily for work-related settings, in the Europe, Middle East and Africa
(
EMEA), Latin America and Asia-Pacific geographic regions.
|
•
|
Retail
— 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 e-commerce, direct mailing catalogs and DWR and HAY studios.
|
•
|
Corporate
—
C
onsists primarily of unallocated expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative and acquisition-related costs.
|
|
|
Fiscal 2019
|
|
Fiscal 2018
|
|
Change
|
||||||
Net sales
|
|
$
|
1,686.5
|
|
|
$
|
1,589.8
|
|
|
$
|
96.7
|
|
Gross margin
|
|
592.3
|
|
|
565.5
|
|
|
26.8
|
|
|||
Gross margin %
|
|
35.1
|
%
|
|
35.6
|
%
|
|
(0.5
|
)%
|
|||
Operating earnings
|
|
189.7
|
|
|
175.2
|
|
|
14.5
|
|
|||
Operating earnings %
|
|
11.2
|
%
|
|
11.0
|
%
|
|
0.2
|
%
|
•
|
Increased sales volumes within the North America segment of approximately $74 million due to increased demand within the Company's core contract furniture business; and
|
•
|
The adoption of ASC 606 - Revenue from Contracts with Customers at the beginning of fiscal 2019 which led to the reclassification of $27.0 million of certain pricing elements from net sales to cost of sales; partially offset by
|
•
|
The impact of foreign currency translation, which decreased sales by roughly $4 million.
|
•
|
Increased gross margin of
$26.8 million
due to increased sales volumes and decreased gross margin percentage of 50 basis points due mainly to the adoption of ASC 606 and higher commodity and tariff costs, partially offset by profit optimization initiatives and improved material performance; partially offset by
|
•
|
Increased operating expenses of
$12.3 million
driven primarily by greater restructuring expenses in the current year related to facilities consolidation and costs associated with an early retirement program. Increases in compensation and benefit costs also contributed to the increase in operating expenses from the comparative period.
|
|
|
Fiscal 2019
|
|
Fiscal 2018
|
|
Change
|
||||||
Net sales
|
|
$
|
492.2
|
|
|
$
|
434.5
|
|
|
$
|
57.7
|
|
Gross margin
|
|
166.9
|
|
|
144.2
|
|
|
22.7
|
|
|||
Gross margin %
|
|
33.9
|
%
|
|
33.2
|
%
|
|
0.7
|
%
|
|||
Operating earnings
|
|
57.8
|
|
|
36.9
|
|
|
20.9
|
|
|||
Operating earnings %
|
|
11.7
|
%
|
|
8.5
|
%
|
|
3.2
|
%
|
•
|
Increased sales volumes within the International segment of approximately $57 million which were driven by broad-based growth across the Asia Pacific and Latin America regions; and
|
•
|
The adoption of ASC 606 - Revenue from Contracts with Customers at the beginning of fiscal 2019 which led to the reclassification of $13.5 million of certain pricing elements from net sales to cost of sales; partially offset by
|
•
|
The impact of foreign currency translation which decreased sales by roughly $12 million.
|
•
|
Increased gross margin of
$22.7 million
due mainly to increased sales volumes; and
|
•
|
Increased gross margin of 70 basis points due mainly to lower overhead costs associated with the benefit from recent restructuring activities in China and lower material costs, driven primarily by volume leverage and product mix; partially offset by
|
•
|
Decreases to gross margin due to deeper discounting and the adoption of ASC 606.
|
|
|
Fiscal 2019
|
|
Fiscal 2018
|
|
Change
|
||||||
Net sales
|
|
$
|
388.5
|
|
|
$
|
356.9
|
|
|
$
|
31.6
|
|
Gross margin
|
|
170.7
|
|
|
163.3
|
|
|
7.4
|
|
|||
Gross margin %
|
|
43.9
|
%
|
|
45.8
|
%
|
|
(1.9
|
)%
|
|||
Operating earnings
|
|
5.3
|
|
|
13.9
|
|
|
(8.6
|
)
|
|||
Operating earnings %
|
|
1.4
|
%
|
|
3.9
|
%
|
|
(2.5
|
)%
|
•
|
Increased sales volumes within the Retail segment of approximately $29 million which were driven primarily by the introduction of HAY products and growth across the Company's DWR studio, e-commerce, and contract channels; and
|
•
|
Incremental list price increases, net of deeper discounting, which increased net sales by approximately $4 million.
|
•
|
Increased operating expenses of
$16.0 million
due to incremental marketing, compensation and depreciation expenses that were driven mainly by growth in the segment, new studios and the launch of the HAY brand in North America; offset by
|
•
|
Increased gross margin of
$7.4 million
on higher sales volumes but decreased gross margin percentage of 190 basis points due mainly to lower shipping revenue, higher freight and storage costs and a shift in product mix, partially offset by profit optimization initiatives.
|
|
Fiscal Year Ended
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Cash and cash equivalents, end of period
|
$
|
159.2
|
|
|
$
|
203.9
|
|
Marketable securities, end of period
|
$
|
8.8
|
|
|
$
|
8.6
|
|
Cash provided by operating activities
|
$
|
216.4
|
|
|
$
|
166.5
|
|
Cash used in investing activities
|
$
|
(165.0
|
)
|
|
$
|
(62.7
|
)
|
Cash (used in) provided by financing Activities
|
$
|
(91.9
|
)
|
|
$
|
2.5
|
|
Pension contributions
|
$
|
(0.9
|
)
|
|
$
|
(13.4
|
)
|
Capital expenditures
|
$
|
(85.8
|
)
|
|
$
|
(70.6
|
)
|
Common stock repurchased
|
$
|
(47.9
|
)
|
|
$
|
(46.5
|
)
|
Long-term debt, end of period
|
$
|
281.9
|
|
|
$
|
275.0
|
|
Available unsecured credit facilities, end of period
(1)
|
$
|
165.0
|
|
|
$
|
166.8
|
|
(In millions)
|
2019
|
|
2018
|
||||
Maars Holding, B.V
|
$
|
6.1
|
|
|
$
|
—
|
|
HAY A/S*
|
$
|
65.5
|
|
|
$
|
—
|
|
Naughtone Holdings Limited
|
$
|
2.0
|
|
|
$
|
—
|
|
Total Cash Outflow
|
$
|
73.6
|
|
|
$
|
—
|
|
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
||||
Cash and cash equivalents
|
$
|
159.2
|
|
|
$
|
203.9
|
|
Marketable securities
|
$
|
8.8
|
|
|
$
|
8.6
|
|
Availability under revolving lines of credit
|
$
|
165.0
|
|
|
$
|
166.8
|
|
|
Payments due by fiscal year
|
||||||||||||||||||
(In millions)
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Thereafter
|
||||||||||
Long-term debt
(1)
|
$
|
275.0
|
|
|
$
|
—
|
|
|
$
|
275.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Estimated interest on debt obligations
(1)
|
73.1
|
|
|
11.8
|
|
|
19.9
|
|
|
17.5
|
|
|
23.9
|
|
|||||
Operating leases
|
315.8
|
|
|
51.7
|
|
|
89.7
|
|
|
72.5
|
|
|
101.9
|
|
|||||
Purchase obligations
(2)
|
73.5
|
|
|
69.6
|
|
|
3.9
|
|
|
—
|
|
|
—
|
|
|||||
Pension and other post employment benefit plans funding
(3)
|
0.9
|
|
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|
0.3
|
|
|||||
Stockholder dividends
(4)
|
11.6
|
|
|
11.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
(5)
|
15.3
|
|
|
5.4
|
|
|
2.3
|
|
|
1.9
|
|
|
5.7
|
|
|||||
Total
|
$
|
765.2
|
|
|
$
|
150.5
|
|
|
$
|
390.9
|
|
|
$
|
92.0
|
|
|
$
|
131.8
|
|
•
|
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. Future expected actuarially determined cash flows for the Company's domestic pension, international pension and post-retirement medical plans are individually discounted at the spot rates under the Mercer Yield Curve to arrive at the plan’s obligations as of the measurement date.
|
•
|
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 the majority of stock options issued during
fiscal 2019
, we utilized an expected volatility of
27 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
4.4 years
in calculating the fair values of the majority of stock options issued during
fiscal 2019
.
|
|
Fiscal Years Ended
|
||||||||||
(In millions, except per share data)
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Net sales
|
$
|
2,567.2
|
|
|
$
|
2,381.2
|
|
|
$
|
2,278.2
|
|
Cost of sales
|
1,637.3
|
|
|
1,508.2
|
|
|
1,414.0
|
|
|||
Gross margin
|
929.9
|
|
|
873.0
|
|
|
864.2
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
639.3
|
|
|
615.3
|
|
|
587.5
|
|
|||
Restructuring and impairment expenses
|
10.2
|
|
|
5.7
|
|
|
12.5
|
|
|||
Design and research
|
76.9
|
|
|
73.1
|
|
|
73.1
|
|
|||
Total operating expenses
|
726.4
|
|
|
694.1
|
|
|
673.1
|
|
|||
Operating earnings
|
203.5
|
|
|
178.9
|
|
|
191.1
|
|
|||
Other expenses (income):
|
|
|
|
|
|
||||||
Interest expense
|
12.1
|
|
|
13.5
|
|
|
15.2
|
|
|||
Interest and other investment income
|
(2.1
|
)
|
|
(4.4
|
)
|
|
(2.2
|
)
|
|||
Other, net
|
(1.6
|
)
|
|
1.7
|
|
|
0.5
|
|
|||
Net other expenses
|
8.4
|
|
|
10.8
|
|
|
13.5
|
|
|||
Earnings before income taxes
|
195.1
|
|
|
168.1
|
|
|
177.6
|
|
|||
Income tax expense
|
39.6
|
|
|
42.4
|
|
|
55.1
|
|
|||
Equity earnings from nonconsolidated affiliates, net of tax
|
5.0
|
|
|
3.0
|
|
|
1.6
|
|
|||
Net earnings
|
160.5
|
|
|
128.7
|
|
|
124.1
|
|
|||
Net earnings attributable to noncontrolling interests
|
—
|
|
|
0.6
|
|
|
0.2
|
|
|||
Net earnings attributable to Herman Miller, Inc.
|
$
|
160.5
|
|
|
$
|
128.1
|
|
|
$
|
123.9
|
|
|
|
|
|
|
|
||||||
Earnings per share — basic
|
$
|
2.72
|
|
|
$
|
2.15
|
|
|
$
|
2.07
|
|
Earnings per share — diluted
|
$
|
2.70
|
|
|
$
|
2.12
|
|
|
$
|
2.05
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
$
|
(14.2
|
)
|
|
$
|
2.7
|
|
|
$
|
(7.2
|
)
|
Pension and post-retirement liability adjustments
|
(7.8
|
)
|
|
10.4
|
|
|
(12.7
|
)
|
|||
Unrealized (losses) gains on interest rate swap agreement
|
(12.3
|
)
|
|
7.8
|
|
|
2.1
|
|
|||
Unrealized holding gain on available for sale securities
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Total other comprehensive (loss) income
|
(34.3
|
)
|
|
20.9
|
|
|
(17.7
|
)
|
|||
Comprehensive income
|
126.2
|
|
|
149.6
|
|
|
106.4
|
|
|||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
0.6
|
|
|
0.2
|
|
|||
Comprehensive income attributable to Herman Miller, Inc.
|
$
|
126.2
|
|
|
$
|
149.0
|
|
|
$
|
106.2
|
|
(In millions, except share and per share data)
|
June 1, 2019
|
|
June 2, 2018
|
||||
Assets
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
159.2
|
|
|
$
|
203.9
|
|
Marketable securities
|
8.8
|
|
|
8.6
|
|
||
Accounts and notes receivable, less allowances of $3.8 in 2019 and $3.3 in 2018
|
218.0
|
|
|
217.4
|
|
||
Unbilled accounts receivable
|
34.3
|
|
|
1.9
|
|
||
Inventories, net
|
184.2
|
|
|
162.4
|
|
||
Prepaid taxes
|
9.2
|
|
|
9.9
|
|
||
Other
|
47.6
|
|
|
41.3
|
|
||
Total Current Assets
|
661.3
|
|
|
645.4
|
|
||
|
|
|
|
||||
Property and Equipment:
|
|
|
|
||||
Land and improvements
|
24.2
|
|
|
24.4
|
|
||
Buildings and improvements
|
267.6
|
|
|
238.6
|
|
||
Machinery and equipment
|
733.0
|
|
|
700.0
|
|
||
Construction in progress
|
59.9
|
|
|
57.8
|
|
||
Gross Property and Equipment
|
1,084.7
|
|
|
1,020.8
|
|
||
Less: Accumulated depreciation
|
(736.1
|
)
|
|
(689.4
|
)
|
||
Net Property and Equipment
|
348.6
|
|
|
331.4
|
|
||
Goodwill
|
303.8
|
|
|
304.1
|
|
||
Indefinite-lived intangibles
|
78.1
|
|
|
78.1
|
|
||
Other amortizable intangibles, net
|
41.1
|
|
|
41.3
|
|
||
Other assets
|
136.4
|
|
|
79.2
|
|
||
Total Assets
|
$
|
1,569.3
|
|
|
$
|
1,479.5
|
|
|
|
|
|
||||
Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
177.7
|
|
|
$
|
171.4
|
|
Accrued compensation and benefits
|
85.5
|
|
|
86.3
|
|
||
Accrued warranty
|
53.1
|
|
|
51.5
|
|
||
Customer deposits
|
30.7
|
|
|
27.6
|
|
||
Other accrued liabilities
|
99.1
|
|
|
77.0
|
|
||
Total Current Liabilities
|
446.1
|
|
|
413.8
|
|
||
|
|
|
|
||||
Long-term debt, less current portion
|
281.9
|
|
|
275.0
|
|
||
Pension and post-retirement benefits
|
24.5
|
|
|
15.6
|
|
||
Other liabilities
|
77.0
|
|
|
79.8
|
|
||
Total Liabilities
|
829.5
|
|
|
784.2
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
20.6
|
|
|
30.5
|
|
||
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,
58,794,148
and
59,230,974
shares issued and outstanding in 2019 and 2018, respectively)
|
11.7
|
|
|
11.7
|
|
||
Additional paid-in capital
|
89.8
|
|
|
116.6
|
|
||
Retained earnings
|
712.7
|
|
|
598.3
|
|
||
Accumulated other comprehensive loss
|
(94.2
|
)
|
|
(61.3
|
)
|
||
Key executive deferred compensation
|
(0.8
|
)
|
|
(0.7
|
)
|
||
Herman Miller, Inc. Stockholders' Equity
|
719.2
|
|
|
664.6
|
|
||
Noncontrolling interests
|
—
|
|
|
0.2
|
|
||
Total Stockholders' Equity
|
719.2
|
|
|
664.8
|
|
||
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity
|
$
|
1,569.3
|
|
|
$
|
1,479.5
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Key Executive Deferred Compensation
|
|
Herman Miller, Inc. Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Stockholders' Equity
|
|||||||||||||||||||||
(In millions, except share and per share data)
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
May 28, 2016
|
$
|
—
|
|
|
59,868,276
|
|
|
$
|
12.0
|
|
|
$
|
142.7
|
|
|
$
|
435.3
|
|
|
$
|
(64.5
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
524.4
|
|
|
$
|
0.3
|
|
|
$
|
524.7
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123.9
|
|
|
—
|
|
|
—
|
|
|
123.9
|
|
|
—
|
|
|
123.9
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.7
|
)
|
|
—
|
|
|
(17.7
|
)
|
|
—
|
|
|
(17.7
|
)
|
|||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.1
|
|
|
(0.1
|
)
|
|
9.0
|
|
|||||||||
Excess tax benefit for stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||||||||
Exercise of stock options
|
—
|
|
|
327,299
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
9.4
|
|
|||||||||
Restricted and performance stock units released
|
—
|
|
|
207,776
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||||||
Employee stock purchase plan issuances
|
—
|
|
|
68,047
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||||||
Repurchase and retirement of common stock
|
—
|
|
|
(765,556
|
)
|
|
(0.1
|
)
|
|
(23.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23.8
|
)
|
|
—
|
|
|
(23.8
|
)
|
|||||||||
Directors' fees
|
—
|
|
|
9,982
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||||||
Deferred compensation plan
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Dividends declared ($0.68 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40.9
|
)
|
|
—
|
|
|
—
|
|
|
(40.9
|
)
|
|
—
|
|
|
(40.9
|
)
|
|||||||||
Redemption value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|||||||||
June 3, 2017
|
$
|
—
|
|
|
59,715,824
|
|
|
$
|
11.9
|
|
|
$
|
139.3
|
|
|
$
|
519.5
|
|
|
$
|
(82.2
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
587.5
|
|
|
$
|
0.2
|
|
|
$
|
587.7
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128.1
|
|
|
—
|
|
|
—
|
|
|
128.1
|
|
|
—
|
|
|
128.1
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20.9
|
|
|
—
|
|
|
20.9
|
|
|
—
|
|
|
20.9
|
|
|||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.0
|
|
|
—
|
|
|
7.0
|
|
|||||||||
Exercise of stock options
|
—
|
|
|
538,259
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
|
14.6
|
|
|||||||||
Restricted and performance stock units released
|
—
|
|
|
256,884
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||||||
Employee stock purchase plan issuances
|
—
|
|
|
67,335
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||||||||
Repurchase and retirement of common stock
|
—
|
|
|
(1,356,156
|
)
|
|
(0.3
|
)
|
|
(46.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.5
|
)
|
|
—
|
|
|
(46.5
|
)
|
|||||||||
Directors' fees
|
—
|
|
|
8,828
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||||||||
Deferred compensation plan
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||||||||
Dividends declared ($0.72 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43.2
|
)
|
|
—
|
|
|
—
|
|
|
(43.2
|
)
|
|
—
|
|
|
(43.2
|
)
|
|||||||||
Redemption value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
—
|
|
|
(6.2
|
)
|
|
—
|
|
|
(6.2
|
)
|
|||||||||
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
|||||||||
June 2, 2018
|
$
|
—
|
|
|
59,230,974
|
|
|
$
|
11.7
|
|
|
$
|
116.6
|
|
|
$
|
598.3
|
|
|
$
|
(61.3
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
664.6
|
|
|
$
|
0.2
|
|
|
$
|
664.8
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
160.5
|
|
|
—
|
|
|
—
|
|
|
160.5
|
|
|
—
|
|
|
160.5
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34.3
|
)
|
|
—
|
|
|
(34.3
|
)
|
|
—
|
|
|
(34.3
|
)
|
|||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|
(0.2
|
)
|
|
8.2
|
|
|||||||||
Exercise of stock options
|
—
|
|
|
347,248
|
|
|
0.1
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
|
—
|
|
|
10.1
|
|
|||||||||
Restricted and performance stock units released
|
—
|
|
|
468,807
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||||||
Employee stock purchase plan issuances
|
—
|
|
|
62,957
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||||||
Repurchase and retirement of common stock
|
—
|
|
|
(1,326,023
|
)
|
|
(0.2
|
)
|
|
(47.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47.8
|
)
|
|
—
|
|
|
(47.8
|
)
|
|||||||||
Directors' fees
|
—
|
|
|
10,185
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|||||||||
Deferred compensation plan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||||||||
Dividends declared ($0.79 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|
—
|
|
|
—
|
|
|
(46.6
|
)
|
|
—
|
|
|
(46.6
|
)
|
|||||||||
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
1.4
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||||||
June 1, 2019
|
$
|
—
|
|
|
58,794,148
|
|
|
$
|
11.7
|
|
|
$
|
89.8
|
|
|
$
|
712.7
|
|
|
$
|
(94.2
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
719.2
|
|
|
$
|
—
|
|
|
$
|
719.2
|
|
|
Fiscal Years Ended
|
||||||||||
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net earnings
|
$
|
160.5
|
|
|
$
|
128.7
|
|
|
$
|
124.1
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
65.9
|
|
|
60.9
|
|
|
52.9
|
|
|||
Amortization expense
|
6.2
|
|
|
6.0
|
|
|
6.0
|
|
|||
Earnings from nonconsolidated affiliates net of dividends received
|
(2.1
|
)
|
|
(0.2
|
)
|
|
(1.5
|
)
|
|||
Investment fair value adjustment
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|||
Loss (gain) on sales of property and dealers
|
0.8
|
|
|
(0.5
|
)
|
|
—
|
|
|||
Deferred taxes
|
0.8
|
|
|
(0.8
|
)
|
|
14.8
|
|
|||
Pension contributions
|
(0.9
|
)
|
|
(13.4
|
)
|
|
(1.1
|
)
|
|||
Pension and post-retirement expenses
|
1.2
|
|
|
2.9
|
|
|
0.5
|
|
|||
Restructuring and impairment expenses
|
10.2
|
|
|
5.7
|
|
|
12.5
|
|
|||
Stock-based compensation
|
7.3
|
|
|
7.7
|
|
|
8.7
|
|
|||
Increase in long-term liabilities
|
1.6
|
|
|
3.4
|
|
|
6.2
|
|
|||
Changes in current assets and liabilities:
|
|
|
|
|
|
||||||
(Increase) decrease in accounts receivable & unbilled accounts receivable
|
(24.8
|
)
|
|
(33.1
|
)
|
|
17.3
|
|
|||
Increase in inventories
|
(31.9
|
)
|
|
(12.4
|
)
|
|
(29.9
|
)
|
|||
Increase in prepaid expenses and other
|
(0.6
|
)
|
|
(3.0
|
)
|
|
(0.5
|
)
|
|||
Increase (decrease) in accounts payable
|
0.5
|
|
|
16.0
|
|
|
(11.2
|
)
|
|||
(Decrease) increase in accrued liabilities
|
22.7
|
|
|
(0.3
|
)
|
|
0.8
|
|
|||
Other
|
1.1
|
|
|
(1.1
|
)
|
|
2.5
|
|
|||
Net Cash Provided by Operating Activities
|
216.4
|
|
|
166.5
|
|
|
202.1
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Net receipts (advances) from notes receivable
|
1.1
|
|
|
(1.1
|
)
|
|
2.4
|
|
|||
Marketable securities purchases
|
(1.9
|
)
|
|
(1.0
|
)
|
|
(2.0
|
)
|
|||
Marketable securities sales
|
1.7
|
|
|
1.0
|
|
|
0.9
|
|
|||
Capital expenditures
|
(85.8
|
)
|
|
(70.6
|
)
|
|
(87.3
|
)
|
|||
Proceeds from sales of property and dealers
|
0.5
|
|
|
2.1
|
|
|
—
|
|
|||
Payments of loans on cash surrender value of life insurance
|
—
|
|
|
—
|
|
|
(15.3
|
)
|
|||
Proceeds from life insurance policy
|
—
|
|
|
8.1
|
|
|
—
|
|
|||
Purchase of HAY licensing agreement
|
(4.8
|
)
|
|
—
|
|
|
—
|
|
|||
Equity investment in non-controlled entities
|
(73.6
|
)
|
|
—
|
|
|
(13.1
|
)
|
|||
Other, net
|
(2.2
|
)
|
|
(1.2
|
)
|
|
(1.9
|
)
|
|||
Net Cash Used in Investing Activities
|
(165.0
|
)
|
|
(62.7
|
)
|
|
(116.3
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Repayments of long-term debt
|
—
|
|
|
(150.0
|
)
|
|
—
|
|
|||
Proceeds from credit facility
|
—
|
|
|
340.4
|
|
|
794.4
|
|
|||
Repayments of credit facility
|
—
|
|
|
(115.4
|
)
|
|
(816.4
|
)
|
|||
Dividends paid
|
(45.6
|
)
|
|
(42.4
|
)
|
|
(39.4
|
)
|
|||
Common stock issued
|
12.3
|
|
|
17.0
|
|
|
11.7
|
|
|||
Common stock repurchased and retired
|
(47.9
|
)
|
|
(46.5
|
)
|
|
(23.7
|
)
|
|||
Purchase of noncontrolling interests
|
(10.1
|
)
|
|
(1.0
|
)
|
|
(1.5
|
)
|
|||
Other, net
|
(0.6
|
)
|
|
0.4
|
|
|
0.3
|
|
|||
Net Cash (Used in) Provided by Financing Activities
|
(91.9
|
)
|
|
2.5
|
|
|
(74.6
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(4.2
|
)
|
|
1.4
|
|
|
0.1
|
|
|||
Net Increase In Cash and Cash Equivalents
|
(44.7
|
)
|
|
107.7
|
|
|
11.3
|
|
|||
Cash and cash equivalents, Beginning of Year
|
203.9
|
|
|
96.2
|
|
|
84.9
|
|
|||
Cash and Cash Equivalents, End of Year
|
$
|
159.2
|
|
|
$
|
203.9
|
|
|
$
|
96.2
|
|
|
|
|
|
|
|
||||||
Other Cash Flow Information
|
|
|
|
|
|
||||||
Interest paid
|
$
|
11.5
|
|
|
$
|
16.4
|
|
|
$
|
13.4
|
|
Income taxes paid, net of cash received
|
$
|
41.0
|
|
|
$
|
34.2
|
|
|
$
|
35.6
|
|
|
Page No.
|
|
|
||
|
||
|
Note 3 -
Acquisitions and Divestitures
|
|
|
Note 4 -
Inventories
|
|
|
||
|
Note 6 -
Long-Term Debt
|
|
|
Note 7 -
Operating Leases
|
|
|
Note 8 -
Employee Benefit Plans
|
|
|
||
|
Note 10 -
Stock-Based Compensation
|
|
|
Note 11 -
Income Taxes
|
|
|
Note 12 -
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 -
Variable Interest Entities
|
|
|
Note 19 -
Quarterly Financial Data (Unaudited)
|
(In millions)
|
|
Goodwill
|
|
Indefinite-lived Intangible Assets
|
|
Total Goodwill and Indefinite-lived Intangible Assets
|
||||||
Balance, June 3, 2017
|
|
$
|
304.5
|
|
|
$
|
78.1
|
|
|
$
|
382.6
|
|
Foreign currency translation adjustments
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|||
Sale of owned dealer
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Balance, June 2, 2018
|
|
$
|
304.1
|
|
|
$
|
78.1
|
|
|
$
|
382.2
|
|
Foreign currency translation adjustments
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Balance, June 1, 2019
|
|
$
|
303.8
|
|
|
$
|
78.1
|
|
|
$
|
381.9
|
|
|
June 1, 2019
|
||||||||||||||
(In millions)
|
Patent and Trademarks
|
|
Customer Relationships
|
|
Other
|
|
Total
|
||||||||
Gross carrying value
|
$
|
20.1
|
|
|
$
|
55.2
|
|
|
$
|
12.0
|
|
|
$
|
87.3
|
|
Accumulated amortization
|
12.5
|
|
|
27.6
|
|
|
6.1
|
|
|
46.2
|
|
||||
Net
|
$
|
7.6
|
|
|
$
|
27.6
|
|
|
$
|
5.9
|
|
|
$
|
41.1
|
|
|
|
|
|
|
|
|
|
||||||||
|
June 2, 2018
|
||||||||||||||
|
Patent and Trademarks
|
|
Customer Relationships
|
|
Other
|
|
Total
|
||||||||
Gross carrying value
|
$
|
22.4
|
|
|
$
|
55.3
|
|
|
$
|
7.5
|
|
|
$
|
85.2
|
|
Accumulated amortization
|
14.7
|
|
|
23.5
|
|
|
5.7
|
|
|
43.9
|
|
||||
Net
|
$
|
7.7
|
|
|
$
|
31.8
|
|
|
$
|
1.8
|
|
|
$
|
41.3
|
|
(In millions)
|
|
||
2020
|
$
|
6.4
|
|
2021
|
$
|
6.3
|
|
2022
|
$
|
6.1
|
|
2023
|
$
|
5.4
|
|
2024
|
$
|
5.1
|
|
(In millions)
|
|
Retention Level (per occurrence)
|
||
General liability
|
|
$
|
1.00
|
|
Auto liability
|
|
$
|
1.00
|
|
Workers' compensation
|
|
$
|
0.75
|
|
Health benefit
|
|
$
|
0.50
|
|
•
|
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.
|
Recently Adopted Accounting Standards
|
||||||
Standard
|
|
Description
|
|
Date of Adoption
|
|
Effect on the Financial Statements or Other Significant Matters
|
|
|
|
|
|
|
|
Revenue from Contracts with Customers
|
|
The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. The standard allows for two adoption methods, a full retrospective or modified retrospective approach.
|
|
June 3, 2018
|
|
The Company adopted the standard effective June 3, 2018 using the modified retrospective method. Refer to Note 2 to the financial statements for further information regarding the adoption of the standard.
|
|
|
|
|
|
|
|
Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The standard provides guidance for the measurement, presentation and disclosure of financial assets and liabilities. The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any change in fair value in net income. The standard does not permit early adoption and at adoption a cumulative-effect adjustment to beginning retained earnings should be recorded.
|
|
June 3, 2018
|
|
The Company adopted the standard effective June 3, 2018 using the modified retrospective method. As a result, the Company reclassified $0.1 million of net gains on mutual fund equity securities, that were formerly classified as available for sale securities before the adoption of the new standard, from Accumulated other comprehensive loss to Retained earnings. The impact of adoption also resulted in certain disclosure changes. Refer to Note 12 of the financial statements for further information.
|
|
|
|
|
|
|
|
Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
|
|
This update aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Early adoption is permitted.
|
|
September 2, 2018
|
|
The Company early adopted the standard prospectively effective September 2, 2018. The impacts resulting from adoption did not have an impact on the Company’s Financial Statements.
|
|
|
|
|
|
|
|
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
|
This update allows for the reclassification to retained earnings of the tax effects stranded in Accumulated Other Comprehensive Income resulting from The Tax Cuts and Jobs Act. Early adoption is permitted.
|
|
September 2, 2018
|
|
The Company early adopted the standard effective September 2, 2018 and reclassified $1.5 million from Accumulated other comprehensive loss to Retained earnings related to the tax impact of the Company’s interest rate swap agreements.
|
|
|
|
|
|
|
|
Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
|
This standard changes the income statement presentation of the components of net periodic benefit cost for defined benefit pension and other postretirement benefit plans. Under the new guidance, entities must present the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs related to services rendered during the period. Other components of net periodic benefit cost will be presented separately from the line items that include the service cost. Early adoption is permitted.
|
|
June 3, 2018
|
|
The Company retrospectively adopted the standard effective June 3, 2018. Prior to adoption, the Company recorded net periodic benefit costs related to its defined benefit pension and post-retirement medical plans within Selling, general and administrative expenses. As a result of adoption, these costs are recorded within Other, net. The Company retrospectively reclassified these costs in the Condensed Consolidated Statements of Comprehensive Income for the fiscal years ended June 2, 2018 and June 3, 2017 from Selling, general and administrative to Other, net. Refer to Note 8 of the financial statements for further information.
|
Recently Issued Accounting Standards Not Yet Adopted
|
||||||
Standard
|
|
Description
|
|
Effective Date
|
|
Effect on the Financial Statements or Other Significant Matters
|
|
|
|
|
|
|
|
Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities
|
|
This update amends the hedge accounting recognition and presentation with the objectives of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities and simplifying the application of hedge accounting. The update expands the strategies eligible for hedge accounting, relaxes the timing requirements of hedge documentation and effectiveness assessments and permits the use of qualitative assessments on an ongoing basis to assess hedge effectiveness. The new guidance also requires new disclosures and presentation.
|
|
June 2, 2019
|
|
The Company is currently evaluating the impact of adopting this guidance.
|
|
|
|
|
|
|
|
Leases
|
|
Under the updated standard a lessee's rights and obligations under most leases, including existing and new arrangements, would be recognized as assets and liabilities, respectively, on the balance sheet. The standard must be adopted under a modified retrospective approach and early adoption is permitted.
|
|
June 2, 2019
|
|
The Company has assembled a project team and has made significant process towards implementation of the lease accounting standard. The Company will adopt the standard in fiscal 2020 using the modified-retrospective transition approach. The Company has substantially completed its identification of the global lease population and the data migration to a lease integration tool that will support the accounting and disclosure requirements under the standard. Also, the Company will elect the package of practical expedients. The Company is in the process of finalizing its accounting policies and internal control processes related to the new standard. Upon adoption, the Company expects to record lease liabilities and right-of-use assets in the range of $250 million to $300 million.
|
|
|
|
|
|
|
|
Measurement of Credit Losses on Financial Instruments
|
|
This guidance replaces the existing incurred loss impairment model with an expected loss model and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
|
|
May 31, 2020
|
|
The Company is currently evaluating the impact of adopting this guidance.
|
|
|
|
|
|
|
|
Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement
|
|
This update eliminates, adds and modifies certain disclosure requirements for fair value measurements. Early adoption is permitted, and an entity is also permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until their effective date.
|
|
May 31, 2020
|
|
The Company is currently evaluating the impact of adopting this guidance.
|
|
|
|
|
|
|
|
Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans
|
|
This update eliminates, adds and clarifies certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. Early adoption is permitted.
|
|
May 30, 2021
|
|
The Company is currently evaluating the impact of adopting this guidance.
|
|
Balance at
|
|
Adjustments due
|
|
Balance at
|
||||||
(In millions)
|
June 2, 2018
|
|
to ASC 606
|
|
June 3, 2018
|
||||||
Balance Sheet
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
||||||
Unbilled accounts receivable
|
$
|
1.9
|
|
|
$
|
11.1
|
|
|
$
|
13.0
|
|
Inventories, net
|
162.4
|
|
|
(7.1
|
)
|
|
155.3
|
|
|||
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Accrued compensation and benefits
|
86.3
|
|
|
0.2
|
|
|
86.5
|
|
|||
Other accrued liabilities
|
77.0
|
|
|
1.9
|
|
|
78.9
|
|
|||
|
|
|
|
|
|
||||||
Equity:
|
|
|
|
|
|
||||||
Retained earnings
|
598.3
|
|
|
1.9
|
|
|
600.2
|
|
|
Year Ended June 1, 2019
|
||||||||||||||
(In millions)
|
As reported
|
|
Performance Obligation Change
|
|
Gross vs. Net Change
|
|
Legacy GAAP
|
||||||||
Statement of Comprehensive Income
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
2,567.2
|
|
|
$
|
(21.5
|
)
|
|
$
|
(38.0
|
)
|
|
$
|
2,507.7
|
|
Cost of sales
|
1,637.3
|
|
|
(12.8
|
)
|
|
(38.0
|
)
|
|
1,586.5
|
|
||||
Gross margin
|
929.9
|
|
|
(8.7
|
)
|
|
|
|
921.2
|
|
|||||
Total operating expenses
|
726.4
|
|
|
(0.1
|
)
|
|
|
|
726.3
|
|
|||||
Operating earnings
|
203.5
|
|
|
(8.6
|
)
|
|
|
|
194.9
|
|
|||||
Income tax expense
|
39.6
|
|
|
(1.5
|
)
|
|
|
|
38.1
|
|
|||||
Net earnings
|
160.5
|
|
|
(7.1
|
)
|
|
|
|
153.4
|
|
|
As of June 1, 2019
|
||||||||||||
(In millions)
|
As reported
|
|
Performance Obligation Change
|
|
Gross vs. Net Change
|
|
Legacy GAAP
|
||||||
Balance Sheet
|
|
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
|
|
||||||
Unbilled accounts receivable
|
$
|
34.3
|
|
|
$
|
(32.6
|
)
|
|
|
|
$
|
1.7
|
|
Inventories, net
|
184.2
|
|
|
17.6
|
|
|
|
|
201.8
|
|
|||
|
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||
Accrued compensation and benefits
|
85.5
|
|
|
(0.4
|
)
|
|
|
|
85.1
|
|
|||
Other accrued liabilities
|
99.1
|
|
|
(5.6
|
)
|
|
|
|
93.5
|
|
|||
|
|
|
|
|
|
|
|
||||||
Equity:
|
|
|
|
|
|
|
|
||||||
Retained earnings
|
712.7
|
|
|
(8.9
|
)
|
|
|
|
703.8
|
|
–
|
Shipping and Handling Activities
- the Company accounts for shipping and handling activities as fulfillment activities and these costs are accrued within Cost of sales at the same time revenue is recognized.
|
–
|
Sales Taxes
- the Company does not record revenue for sales tax, value added tax or other taxes that are collected on behalf of government entities. The Company’s revenue is recorded net of these taxes as they are passed through to the relevant government entities.
|
–
|
Incremental Costs of Obtaining a Contract
- the Company has recognized incremental costs to obtain a contract as an expense when incurred as the amortization period is less than one year.
|
–
|
Significant Financing Component
- the Company has not adjusted the amount of consideration to be received for any significant financing components as the Company’s contracts have a duration of one year or less.
|
–
|
Single Performance Obligation
- these contracts are transacted with customers and include only the product performance obligation. Most commonly, these contracts represent master agreements with independent third-party dealers in which a purchase order represents the customer contract, point of sale transactions through the Retail reportable segment, as well as customer purchase orders for the Maharam subsidiary within the North America Contract reportable segment. For contracts that include a single performance obligation, the Company records revenue at the point in time when title and risk of loss has transferred to the customer.
|
–
|
Multiple Performance Obligations
- these contracts are transacted with customers and include more than one performance obligation; products, which are shipped to the customer by the Company and installation and other services, which are primarily fulfilled by independent third-party dealers. For contracts that include multiple performance obligations, the Company records revenue for the product performance obligation at the point in time when control transfers, generally upon transfer of title and risk of loss to the customer. In most cases, the Company has concluded that it is the agent for the installation services performance obligation and as such, the revenue and costs of these services are recorded net within Net sales in the Company’s Consolidated Statements of Comprehensive Income.
|
–
|
Other
- these contracts are comprised mainly of alliance fee arrangements, whereby the Company earns revenue for allowing other furniture sellers access to its dealer distribution channel, as well as other miscellaneous selling arrangements. Revenue from alliance contracts are recorded at the point in time in which the sale is made by other furniture sellers through the Company’s sales channel.
|
|
Year Ended
|
||
(In millions)
|
June 1, 2019
|
||
Net Sales:
|
|
||
Single performance obligation
|
|
||
Product revenue
|
$
|
2,155.0
|
|
Multiple performance obligations
|
|
||
Product revenue
|
390.0
|
|
|
Service revenue
|
12.6
|
|
|
Other
|
9.6
|
|
|
Total
|
$
|
2,567.2
|
|
|
Year Ended
|
||
(In millions)
|
June 1, 2019
|
||
North America Contract:
|
|
||
Systems
|
$
|
564.4
|
|
Seating
|
501.8
|
|
|
Freestanding and storage
|
384.9
|
|
|
Textiles
|
113.8
|
|
|
Other
|
121.6
|
|
|
Total North America Contract
|
$
|
1,686.5
|
|
|
|
||
International Contract:
|
|
||
Systems
|
$
|
103.6
|
|
Seating
|
276.1
|
|
|
Freestanding and storage
|
53.0
|
|
|
Other
|
59.5
|
|
|
Total International Contract
|
$
|
492.2
|
|
|
|
||
Retail:
|
|
||
Seating
|
$
|
235.6
|
|
Freestanding and storage
|
67.5
|
|
|
Other
|
85.4
|
|
|
Total Retail
|
$
|
388.5
|
|
|
|
||
Total
|
$
|
2,567.2
|
|
(In millions)
|
|
June 1, 2019
|
|
June 2, 2018
|
||||
Finished goods and work in process
|
|
$
|
139.1
|
|
|
$
|
124.2
|
|
Raw materials
|
|
45.1
|
|
|
38.2
|
|
||
Total
|
|
$
|
184.2
|
|
|
$
|
162.4
|
|
(in millions)
|
June 1, 2019
|
June 2, 2018
|
||||
Investments in nonconsolidated affiliates
|
$
|
89.0
|
|
$
|
16.8
|
|
(in millions)
|
June 1, 2019
|
June 2, 2018
|
June 3, 2017
|
||||||
Equity earnings from nonconsolidated affiliates
|
$
|
5.0
|
|
$
|
3.0
|
|
$
|
1.6
|
|
Ownership Interest
|
June 1, 2019
|
June 2, 2018
|
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%
|
Naughtone Holdings Limited*
|
52.5%
|
50.0%
|
Global Holdings Netherlands B.V.
|
48.2%
|
—%
|
HAY A/S
|
33.0%
|
—%
|
(in millions)
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Sales to nonconsolidated affiliates
|
$
|
3.9
|
|
|
$
|
4.3
|
|
|
$
|
4.0
|
|
Purchases from nonconsolidated affiliates
|
$
|
23.0
|
|
|
$
|
6.8
|
|
|
$
|
4.2
|
|
(in millions)
|
June 1, 2019
|
|
June 2, 2018
|
||||
Receivables from nonconsolidated affiliates
|
$
|
0.7
|
|
|
$
|
0.9
|
|
Payables to nonconsolidated affiliates
|
$
|
1.2
|
|
|
$
|
1.0
|
|
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
||||
Debt securities, 6.0%, due March 1, 2021
|
$
|
50.0
|
|
|
$
|
50.0
|
|
Syndicated Revolving Line of Credit, due September 2021
|
225.0
|
|
|
225.0
|
|
||
Construction-Type Lease
|
6.9
|
|
|
7.0
|
|
||
Supplier financing program
|
3.1
|
|
|
3.8
|
|
||
Total debt
|
$
|
285.0
|
|
|
$
|
285.8
|
|
Less: Current debt
|
(3.1
|
)
|
|
(10.8
|
)
|
||
Long-term debt
|
$
|
281.9
|
|
|
$
|
275.0
|
|
The weighted-average used in the determination of net periodic benefit cost:
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
(Percentages)
|
Domestic
|
|
International
|
|
Domestic
|
|
International
|
|
Domestic
|
|
International
|
Discount rate
|
3.99
|
|
2.87
|
|
3.53
|
|
2.49
|
|
3.51
|
|
3.43
|
Compensation increase rate
|
n/a
|
|
3.10
|
|
n/a
|
|
3.25
|
|
n/a
|
|
2.95
|
Expected return on plan assets
|
n/a
|
|
4.80
|
|
n/a
|
|
6.10
|
|
n/a
|
|
6.10
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted-average used in the determination of the projected benefit obligations:
|
|||||||||||
Discount rate
|
3.47
|
|
2.39
|
|
3.99
|
|
2.87
|
|
3.53
|
|
2.49
|
Compensation increase rate
|
n/a
|
|
3.20
|
|
n/a
|
|
3.10
|
|
n/a
|
|
3.25
|
Asset Category
|
Targeted Asset Allocation Percentage
|
|
Percentage of Plan Assets at Year End
|
||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||
Fixed income
|
35
|
|
35
|
|
33
|
|
|
36
|
|
||||
Common collective trusts
|
65
|
|
65
|
|
67
|
|
|
64
|
|
||||
Total
|
|
|
|
|
100
|
|
|
100
|
|
||||
|
|
|
|
|
|
|
|
||||||
(In millions)
|
|
|
International Plan as of June 1, 2019
|
||||||||||
Asset Category
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and cash equivalents
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign government obligations
|
|
|
—
|
|
|
29.3
|
|
|
29.3
|
|
|||
Common collective trusts-balanced
|
|
|
—
|
|
|
58.9
|
|
|
58.9
|
|
|||
Total
|
|
|
$
|
—
|
|
|
$
|
88.2
|
|
|
$
|
88.2
|
|
|
|
|
|
|
|
|
|
||||||
(In millions)
|
|
|
International Plan as of June 2, 2018
|
||||||||||
Asset Category
|
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and cash equivalents
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
Foreign government obligations
|
|
|
—
|
|
|
33.4
|
|
|
33.4
|
|
|||
Common collective trusts-balanced
|
|
|
—
|
|
|
61.0
|
|
|
61.0
|
|
|||
Total
|
|
|
$
|
0.2
|
|
|
$
|
94.4
|
|
|
$
|
94.6
|
|
(In millions)
|
Pension Benefits Domestic
|
|
Pension Benefits International
|
|
Post-Retirement Benefits
|
||||||
2020
|
$
|
0.1
|
|
|
$
|
1.8
|
|
|
$
|
0.5
|
|
2021
|
$
|
0.1
|
|
|
$
|
1.9
|
|
|
$
|
0.4
|
|
2022
|
$
|
0.1
|
|
|
$
|
2.3
|
|
|
$
|
0.4
|
|
2023
|
$
|
0.1
|
|
|
$
|
2.1
|
|
|
$
|
0.4
|
|
2024
|
$
|
0.1
|
|
|
$
|
2.3
|
|
|
$
|
0.3
|
|
2025-2029
|
$
|
0.3
|
|
|
$
|
16.7
|
|
|
$
|
1.1
|
|
(In millions, except shares)
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Numerator for both basic and diluted EPS, Net earnings attributable to Herman Miller, Inc.
|
$
|
160.5
|
|
|
$
|
128.1
|
|
|
$
|
123.9
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Denominator for basic EPS, weighted-average common shares outstanding
|
59,011,945
|
|
|
59,681,268
|
|
|
59,871,805
|
|
|||
Potentially dilutive shares resulting from stock plans
|
369,846
|
|
|
630,037
|
|
|
682,784
|
|
|||
Denominator for diluted EPS
|
59,381,791
|
|
|
60,311,305
|
|
|
60,554,589
|
|
(In millions)
|
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Employee stock purchase program
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
Stock option plans
|
|
(0.4
|
)
|
|
2.6
|
|
|
2.0
|
|
|||
Restricted stock units
|
|
4.6
|
|
|
3.9
|
|
|
3.6
|
|
|||
Performance share units
|
|
2.8
|
|
|
0.9
|
|
|
2.8
|
|
|||
Total
|
|
$
|
7.3
|
|
|
$
|
7.7
|
|
|
$
|
8.7
|
|
|
|
|
|
|
|
|
||||||
Tax benefit
|
|
$
|
1.6
|
|
|
$
|
2.3
|
|
|
$
|
3.1
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Risk-free interest rates
(1)
|
2.65-2.70%
|
|
|
1.79
|
%
|
|
1.01
|
%
|
|||
Expected term of options
(2)
|
4.4 years
|
|
|
4.6 years
|
|
|
4.0 years
|
|
|||
Expected volatility
(3)
|
27
|
%
|
|
26
|
%
|
|
26
|
%
|
|||
Dividend yield
(4)
|
2.18-2.33%
|
|
|
2.23
|
%
|
|
2.13
|
%
|
|||
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
|
$
|
8.05
|
|
|
$
|
6.39
|
|
|
$
|
5.50
|
|
|
Shares Under Option
|
|
Weighted-Average Exercise Prices
|
|
Aggregate Intrinsic Value
(in millions)
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|||||
Outstanding at June 2, 2018
|
1,063,249
|
|
|
$
|
30.33
|
|
|
$
|
2.9
|
|
|
7.45
|
Granted at market
|
156,008
|
|
|
$
|
38.23
|
|
|
|
|
|
||
Exercised
|
(347,248
|
)
|
|
$
|
28.84
|
|
|
|
|
|
||
Forfeited or expired
|
(81,950
|
)
|
|
$
|
33.94
|
|
|
|
|
|
||
Outstanding at June 1, 2019
|
790,059
|
|
|
$
|
32.17
|
|
|
$
|
3.0
|
|
|
5.81
|
Ending vested + expected to vest
|
790,059
|
|
|
$
|
32.17
|
|
|
$
|
3.0
|
|
|
5.81
|
Exercisable at end of period
|
282,985
|
|
|
$
|
28.51
|
|
|
$
|
2.0
|
|
|
4.42
|
|
Share
Units
|
|
Weighted Average
Grant-Date
Fair Value
|
|
Aggregate Intrinsic Value (in millions)
|
|
Weighted-Average
Remaining Contractual
Term (Years)
|
|||||
Outstanding at June 2, 2018
|
481,027
|
|
|
$
|
32.20
|
|
|
$
|
15.8
|
|
|
1.28
|
Granted
|
91,304
|
|
|
$
|
37.81
|
|
|
|
|
|
||
Forfeited
|
(31,922
|
)
|
|
$
|
35.94
|
|
|
|
|
|
||
Released
|
(229,128
|
)
|
|
$
|
31.40
|
|
|
|
|
|
||
Outstanding at June 1, 2019
|
311,281
|
|
|
$
|
33.93
|
|
|
$
|
11.0
|
|
|
1.10
|
Ending vested + expected to vest
|
311,281
|
|
|
$
|
33.93
|
|
|
$
|
11.0
|
|
|
1.10
|
|
Share
Units
|
|
Weighted Average Grant-Date Fair Value
|
|
Aggregate Intrinsic
Value (in millions)
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|||||
Outstanding at June 2, 2018
|
374,560
|
|
|
$
|
30.76
|
|
|
$
|
12.3
|
|
|
1.01
|
Granted
|
207,568
|
|
|
$
|
36.37
|
|
|
|
|
|
||
Forfeited
|
(19,093
|
)
|
|
$
|
35.90
|
|
|
|
|
|
||
Released
|
(239,679
|
)
|
|
$
|
31.55
|
|
|
|
|
|
||
Outstanding at June 1, 2019
|
323,356
|
|
|
$
|
33.48
|
|
|
$
|
11.5
|
|
|
1.13
|
Ending vested + expected to vest
|
323,356
|
|
|
$
|
33.48
|
|
|
$
|
11.5
|
|
|
1.13
|
|
|
2018
|
|
Risk-free interest rates
(1)
|
|
2.29
|
%
|
Expected term of options
(2)
|
|
1.1 years
|
|
Expected volatility
(3)
|
|
35
|
%
|
Dividend yield
|
|
not applicable
|
|
Strike price
|
|
30.64
|
|
Per share value
(4)
|
|
8.24
|
|
|
Shares Under Option
|
|
Weighted-Average Exercise Prices
|
|
Aggregate Intrinsic Value (in millions)
|
|
Weighted-Average Remaining Contractual Term (Years)
|
|||||
Outstanding at June 2, 2018
|
544,126
|
|
|
$
|
24.04
|
|
|
$
|
3.6
|
|
|
1.20
|
Exercised
|
(4,861
|
)
|
|
$
|
7.82
|
|
|
|
|
|
||
Forfeited
|
(468,558
|
)
|
|
$
|
24.39
|
|
|
|
|
|
||
Outstanding at June 1, 2019
|
70,707
|
|
|
$
|
22.80
|
|
|
$
|
0.5
|
|
|
0.20
|
Exercisable at end of period
|
70,707
|
|
|
$
|
22.80
|
|
|
$
|
0.5
|
|
|
0.20
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Shares of common stock
|
|
10,185
|
|
|
8,828
|
|
|
9,982
|
|
Shares through the deferred compensation program
|
|
7,619
|
|
|
2,207
|
|
|
2,582
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Domestic
|
$
|
136.2
|
|
|
$
|
121.6
|
|
|
$
|
131.4
|
|
Foreign
|
58.9
|
|
|
46.5
|
|
|
46.2
|
|
|||
Total
|
$
|
195.1
|
|
|
$
|
168.1
|
|
|
$
|
177.6
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Current: Domestic - Federal
|
$
|
19.0
|
|
|
$
|
30.2
|
|
|
$
|
28.7
|
|
Domestic - State
|
6.4
|
|
|
4.3
|
|
|
2.3
|
|
|||
Foreign
|
12.9
|
|
|
10.7
|
|
|
11.1
|
|
|||
|
38.3
|
|
|
45.2
|
|
|
42.1
|
|
|||
Deferred: Domestic - Federal
|
1.0
|
|
|
(4.1
|
)
|
|
9.2
|
|
|||
Domestic - State
|
(0.2
|
)
|
|
0.1
|
|
|
2.8
|
|
|||
Foreign
|
0.5
|
|
|
1.2
|
|
|
1.0
|
|
|||
|
1.3
|
|
|
(2.8
|
)
|
|
13.0
|
|
|||
Total income tax provision
|
$
|
39.6
|
|
|
$
|
42.4
|
|
|
$
|
55.1
|
|
(In millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Income taxes computed at the United States Statutory rate
|
|
$
|
41.0
|
|
|
$
|
49.0
|
|
|
$
|
62.2
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
|
||||||
Remeasurement of U.S. deferred tax assets and liabilities due to the Tax Act
|
|
(0.2
|
)
|
|
(8.9
|
)
|
|
—
|
|
|||
U.S. tax liability on undistributed foreign earnings due to the Tax Act
|
|
(2.6
|
)
|
|
9.0
|
|
|
—
|
|
|||
Foreign-derived intangible income
|
|
(3.1
|
)
|
|
—
|
|
|
—
|
|
|||
Global intangible low-taxed income
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|||
Foreign statutory rate differences
|
|
1.9
|
|
|
(4.0
|
)
|
|
(5.7
|
)
|
|||
Manufacturing deduction under the American Jobs Creation Act of 2004
|
|
—
|
|
|
(2.7
|
)
|
|
(3.4
|
)
|
|||
State taxes
|
|
4.9
|
|
|
3.3
|
|
|
3.8
|
|
|||
United Kingdom patent box deduction for research and development
|
|
(1.9
|
)
|
|
(1.8
|
)
|
|
(2.6
|
)
|
|||
Research and development credit
|
|
(3.4
|
)
|
|
(2.4
|
)
|
|
(1.4
|
)
|
|||
Foreign tax credit
|
|
(5.7
|
)
|
|
(2.4
|
)
|
|
(0.6
|
)
|
|||
Other, net
|
|
1.8
|
|
|
3.3
|
|
|
2.8
|
|
|||
Income tax expense
|
|
$
|
39.6
|
|
|
$
|
42.4
|
|
|
$
|
55.1
|
|
Effective tax rate
|
|
20.3
|
%
|
|
25.2
|
%
|
|
31.1
|
%
|
(In millions)
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Compensation-related accruals
|
|
$
|
13.1
|
|
|
$
|
15.3
|
|
Accrued pension and post-retirement benefit obligations
|
|
7.2
|
|
|
6.6
|
|
||
Deferred revenue
|
|
6.1
|
|
|
5.6
|
|
||
Inventory related
|
|
1.2
|
|
|
1.0
|
|
||
Reserves for uncollectible accounts and notes receivable
|
|
0.7
|
|
|
0.6
|
|
||
Other reserves and accruals
|
|
8.1
|
|
|
5.2
|
|
||
Warranty
|
|
12.3
|
|
|
11.9
|
|
||
State and local tax net operating loss carryforwards and credits
|
|
2.5
|
|
|
2.3
|
|
||
Federal net operating loss carryforward
|
|
1.4
|
|
|
1.7
|
|
||
Foreign tax net operating loss carryforwards and credits
|
|
9.1
|
|
|
10.0
|
|
||
Accrued step rent and tenant reimbursements
|
|
4.2
|
|
|
3.8
|
|
||
Other
|
|
4.0
|
|
|
3.9
|
|
||
Subtotal
|
|
69.9
|
|
|
67.9
|
|
||
Valuation allowance
|
|
(10.4
|
)
|
|
(10.3
|
)
|
||
Total
|
|
$
|
59.5
|
|
|
$
|
57.6
|
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
||||
Book basis in property in excess of tax basis
|
|
$
|
(26.6
|
)
|
|
$
|
(25.5
|
)
|
Intangible assets
|
|
(34.6
|
)
|
|
(32.3
|
)
|
||
Other
|
|
(2.1
|
)
|
|
(6.9
|
)
|
||
Total
|
|
$
|
(63.3
|
)
|
|
$
|
(64.7
|
)
|
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Interest and penalty expense (income)
|
$
|
(0.3
|
)
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
Liability for interest and penalties
|
$
|
0.7
|
|
|
$
|
1.0
|
|
|
|
(In millions)
|
|
June 1, 2019
|
|
June 2, 2018
|
||||
Carrying value
|
|
$
|
285.0
|
|
|
$
|
285.8
|
|
Fair value
|
|
$
|
287.8
|
|
|
$
|
288.6
|
|
|
Fair Value Measurements
|
||||||||||||||||||
|
June 1, 2019
|
|
June 2, 2018
|
||||||||||||||||
(In millions)
Financial Assets
|
NAV
|
Quoted Prices With Other Observable Inputs (Level 2)
|
Management Estimates (Level 3)
|
|
NAV
|
Quoted Prices With Other Observable Inputs (Level 2)
|
Management Estimates (Level 3)
|
||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
69.5
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
121.0
|
|
$
|
—
|
|
$
|
—
|
|
Mutual funds - equity
|
—
|
|
0.9
|
|
—
|
|
|
—
|
|
0.9
|
|
—
|
|
||||||
Foreign currency forward contracts
|
—
|
|
—
|
|
—
|
|
|
—
|
|
0.4
|
|
—
|
|
||||||
Deferred compensation plan
|
—
|
|
12.5
|
|
—
|
|
|
—
|
|
15.1
|
|
—
|
|
||||||
Total
|
$
|
69.5
|
|
$
|
13.4
|
|
$
|
—
|
|
|
$
|
121.0
|
|
$
|
16.4
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forward contracts
|
$
|
—
|
|
$
|
1.4
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
0.3
|
|
$
|
—
|
|
Contingent consideration
|
—
|
|
—
|
|
0.2
|
|
|
—
|
|
—
|
|
0.5
|
|
||||||
Total
|
$
|
—
|
|
$
|
1.4
|
|
$
|
0.2
|
|
|
$
|
—
|
|
$
|
0.3
|
|
$
|
0.5
|
|
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
||||||||||||
Financial Assets
|
Quoted Prices with
Other Observable Inputs (Level 2)
|
|
Management Estimate (Level 3)
|
|
Quoted Prices with
Other Observable Inputs (Level 2) |
|
Management Estimate (Level 3)
|
||||||||
Mutual funds - fixed income
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
7.7
|
|
|
$
|
—
|
|
Interest rate swap agreement
|
1.0
|
|
|
—
|
|
|
15.0
|
|
|
—
|
|
||||
Total
|
$
|
8.9
|
|
|
$
|
—
|
|
|
$
|
22.7
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreement
|
$
|
2.2
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
||
Total
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
June 1, 2019
|
|
June 2, 2018
|
||||||||||||||||||||
(In millions)
|
Cost
|
|
Unrealized Gain/(Loss)
|
|
Market Value
|
|
Cost
|
|
Unrealized Gain/(Loss)
|
|
Market Value
|
||||||||||||
Mutual funds - fixed income
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
7.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
7.7
|
|
Mutual funds - equity
|
0.8
|
|
|
0.1
|
|
|
0.9
|
|
|
0.7
|
|
|
0.2
|
|
|
0.9
|
|
||||||
Total
|
$
|
8.7
|
|
|
$
|
0.1
|
|
|
$
|
8.8
|
|
|
$
|
8.5
|
|
|
$
|
0.1
|
|
|
$
|
8.6
|
|
(In millions)
|
Balance Sheet Location
|
|
June 1, 2019
|
|
June 2, 2018
|
||||
Designated derivatives:
|
|
|
|
|
|
||||
Interest rate swap
|
Long-term assets: Other assets
|
|
$
|
1.0
|
|
|
$
|
15.0
|
|
Interest rate swap
|
Long-term liabilities: Other liabilities
|
|
$
|
2.2
|
|
|
$
|
—
|
|
Non-designated derivatives:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Current assets: Other
|
|
$
|
—
|
|
|
$
|
0.4
|
|
Foreign currency forward contracts
|
Current liabilities: Other accrued liabilities
|
|
$
|
1.4
|
|
|
$
|
0.3
|
|
|
|
|
Fiscal Year
|
||||||||||
(In millions)
|
Statement of Comprehensive Income Location
|
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Gain (loss) recognized on foreign currency forward contracts
|
Other expenses (income): Other, net
|
|
$
|
0.3
|
|
|
$
|
0.4
|
|
|
$
|
(1.2
|
)
|
|
Fiscal Year
|
||||||||||
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Interest rate swap
|
$
|
(12.8
|
)
|
|
$
|
7.5
|
|
|
$
|
2.1
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Accrual balance, beginning
|
$
|
51.5
|
|
|
$
|
47.7
|
|
|
$
|
43.9
|
|
Accrual for warranty matters
|
20.7
|
|
|
22.1
|
|
|
22.8
|
|
|||
Settlements
|
(19.1
|
)
|
|
(18.3
|
)
|
|
(19.0
|
)
|
|||
Accrual balance, ending
|
$
|
53.1
|
|
|
$
|
51.5
|
|
|
$
|
47.7
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales:
|
|
|
|
|
|
||||||
North America Contract
|
$
|
1,686.5
|
|
|
$
|
1,589.8
|
|
|
$
|
1,574.6
|
|
International Contract
|
492.2
|
|
|
434.5
|
|
|
385.5
|
|
|||
Retail
|
388.5
|
|
|
356.9
|
|
|
318.1
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
2,567.2
|
|
|
$
|
2,381.2
|
|
|
$
|
2,278.2
|
|
|
|
|
|
|
|
||||||
Depreciation and Amortization:
|
|
|
|
|
|
||||||
North America Contract
|
$
|
46.8
|
|
|
$
|
43.9
|
|
|
$
|
37.7
|
|
International Contract
|
10.5
|
|
|
10.2
|
|
|
9.4
|
|
|||
Retail
|
14.1
|
|
|
12.1
|
|
|
10.2
|
|
|||
Corporate
|
0.7
|
|
|
0.7
|
|
|
1.6
|
|
|||
Total
|
$
|
72.1
|
|
|
$
|
66.9
|
|
|
$
|
58.9
|
|
|
|
|
|
|
|
||||||
Operating Earnings (Losses):
|
|
|
|
|
|
||||||
North America Contract
|
$
|
189.7
|
|
|
$
|
175.2
|
|
|
$
|
184.1
|
|
International Contract
|
57.8
|
|
|
36.9
|
|
|
36.2
|
|
|||
Retail
|
5.3
|
|
|
13.9
|
|
|
4.8
|
|
|||
Corporate
|
(49.3
|
)
|
|
(47.1
|
)
|
|
(34.0
|
)
|
|||
Total
|
$
|
203.5
|
|
|
$
|
178.9
|
|
|
$
|
191.1
|
|
|
|
|
|
|
|
||||||
Capital Expenditures:
|
|
|
|
|
|
||||||
North America Contract
|
$
|
52.7
|
|
|
$
|
46.0
|
|
|
$
|
56.8
|
|
International Contract
|
16.6
|
|
|
11.4
|
|
|
8.5
|
|
|||
Retail
|
16.5
|
|
|
13.2
|
|
|
22.0
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
85.8
|
|
|
$
|
70.6
|
|
|
$
|
87.3
|
|
|
|
|
|
|
|
||||||
Total Assets:
|
|
|
|
|
|
||||||
North America Contract
|
$
|
733.6
|
|
|
$
|
677.4
|
|
|
$
|
691.5
|
|
International Contract
|
356.8
|
|
|
283.4
|
|
|
230.3
|
|
|||
Retail
|
310.0
|
|
|
291.2
|
|
|
276.4
|
|
|||
Corporate
|
168.9
|
|
|
227.5
|
|
|
108.1
|
|
|||
Total
|
$
|
1,569.3
|
|
|
$
|
1,479.5
|
|
|
$
|
1,306.3
|
|
|
|
|
|
|
|
||||||
Goodwill:
|
|
|
|
|
|
||||||
North America Contract
|
$
|
185.3
|
|
|
$
|
185.3
|
|
|
$
|
185.6
|
|
International Contract
|
39.7
|
|
|
40.0
|
|
|
40.1
|
|
|||
Retail
|
78.8
|
|
|
78.8
|
|
|
78.8
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
303.8
|
|
|
$
|
304.1
|
|
|
$
|
304.5
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales:
|
|
|
|
|
|
||||||
Systems
|
$
|
668.0
|
|
|
$
|
601.5
|
|
|
$
|
639.0
|
|
Seating
|
1,013.5
|
|
|
965.9
|
|
|
894.8
|
|
|||
Freestanding and storage
|
505.4
|
|
|
465.1
|
|
|
428.8
|
|
|||
Textiles
|
113.8
|
|
|
94.3
|
|
|
96.9
|
|
|||
Other
(1)
|
266.5
|
|
|
254.4
|
|
|
218.7
|
|
|||
Total
|
$
|
2,567.2
|
|
|
$
|
2,381.2
|
|
|
$
|
2,278.2
|
|
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net Sales:
|
|
|
|
|
|
||||||
United States
|
$
|
1,865.8
|
|
|
$
|
1,737.9
|
|
|
$
|
1,690.1
|
|
International
|
701.4
|
|
|
643.3
|
|
|
588.1
|
|
|||
Total
|
$
|
2,567.2
|
|
|
$
|
2,381.2
|
|
|
$
|
2,278.2
|
|
|
Year Ended
|
||||||||||
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
|
June 3, 2017
|
||||||
Cumulative translation adjustments at beginning of period
|
$
|
(34.1
|
)
|
|
$
|
(36.8
|
)
|
|
$
|
(29.6
|
)
|
Other comprehensive (loss) income before reclassifications
|
(14.2
|
)
|
|
2.7
|
|
|
(7.2
|
)
|
|||
Balance at end of period
|
(48.3
|
)
|
|
(34.1
|
)
|
|
(36.8
|
)
|
|||
|
|
|
|
|
|
||||||
Pension and other post-retirement benefit plans at beginning of period
|
(37.2
|
)
|
|
(47.6
|
)
|
|
(34.9
|
)
|
|||
Other comprehensive (loss) income before reclassifications (net of tax of $2.0, ($2.9), and $3.7)
|
(10.0
|
)
|
|
5.3
|
|
|
(14.5
|
)
|
|||
Reclassification from accumulated other comprehensive income - Other, net
|
2.6
|
|
|
4.2
|
|
|
2.2
|
|
|||
Tax (expense) benefit
|
(0.4
|
)
|
|
0.9
|
|
|
(0.4
|
)
|
|||
Net reclassifications
|
2.2
|
|
|
5.1
|
|
|
1.8
|
|
|||
Net current period other comprehensive (loss) income
|
(7.8
|
)
|
|
10.4
|
|
|
(12.7
|
)
|
|||
Balance at end of period
|
(45.0
|
)
|
|
(37.2
|
)
|
|
(47.6
|
)
|
|||
|
|
|
|
|
|
||||||
Interest rate swap agreement at beginning of period
|
9.9
|
|
|
2.1
|
|
|
—
|
|
|||
Cumulative effect of accounting change
|
1.5
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive (loss) income before reclassifications (net of tax of $5.3, ($4.0), and ($1.2))
|
(12.8
|
)
|
|
7.5
|
|
|
2.1
|
|
|||
Reclassification from accumulated other comprehensive income - Other, net
|
0.5
|
|
|
0.3
|
|
|
—
|
|
|||
Net reclassifications
|
0.5
|
|
|
0.3
|
|
|
—
|
|
|||
Net current period other comprehensive (loss) income
|
(12.3
|
)
|
|
7.8
|
|
|
2.1
|
|
|||
Balance at end of period
|
(0.9
|
)
|
|
9.9
|
|
|
2.1
|
|
|||
|
|
|
|
|
|
||||||
Unrealized Gains on Available-for-sale Securities at beginning of period
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Cumulative effect of accounting change
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
0.1
|
|
|||
Balance at end of period
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||
|
|
|
|
|
|
||||||
Total Accumulated other comprehensive loss
|
$
|
(94.2
|
)
|
|
$
|
(61.3
|
)
|
|
$
|
(82.2
|
)
|
|
Year Ended
|
||||||
(In millions)
|
June 1, 2019
|
|
June 2, 2018
|
||||
Balance at beginning of period
|
$
|
30.5
|
|
|
$
|
24.6
|
|
Purchase of redeemable noncontrolling interests
|
(10.1
|
)
|
|
(1.0
|
)
|
||
Net income attributable to redeemable noncontrolling interests
|
—
|
|
|
0.6
|
|
||
Exercised options
|
0.2
|
|
|
0.1
|
|
||
Redemption value adjustment
|
—
|
|
|
6.2
|
|
||
Other adjustments
|
—
|
|
|
—
|
|
||
Balance at end of period
|
$
|
20.6
|
|
|
$
|
30.5
|
|
|
June 1, 2019
|
||||||||
(In millions)
|
Severance and Employee-Related
|
Exit or Disposal Activities
|
Total
|
||||||
Beginning Balance
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Restructuring Costs
|
6.7
|
|
1.0
|
|
$
|
7.7
|
|
||
Ending Balance
|
$
|
6.7
|
|
$
|
1.0
|
|
$
|
7.7
|
|
(In millions)
|
Severance and Employee-Related
|
Impairment of Property and Equipment
|
Exit or Disposal Activities
|
Total
|
||||||||
June 3, 2017
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Restructuring Costs
|
2.4
|
|
—
|
|
1.5
|
|
$
|
3.9
|
|
|||
Amounts Paid
|
(2.4
|
)
|
—
|
|
(1.5
|
)
|
$
|
(3.9
|
)
|
|||
June 2, 2018
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Restructuring Costs
|
0.3
|
|
0.8
|
|
1.4
|
|
$
|
2.5
|
|
|||
Amounts Paid
|
(0.2
|
)
|
—
|
|
(1.3
|
)
|
$
|
(1.5
|
)
|
|||
Charges Against Assets
|
—
|
|
(0.8
|
)
|
—
|
|
$
|
(0.8
|
)
|
|||
June 1, 2019
|
$
|
0.1
|
|
$
|
—
|
|
$
|
0.1
|
|
$
|
0.2
|
|
(In millions, except per share data)
|
First
Quarter
(1)
|
|
Second
Quarter
(1)
|
|
Third
Quarter
(1)
|
|
Fourth
Quarter
(1)
|
|||||||||
2019
|
Net sales
|
$
|
624.6
|
|
|
$
|
652.6
|
|
|
$
|
619.0
|
|
|
$
|
671.0
|
|
|
Gross margin
|
225.1
|
|
|
235.6
|
|
|
221.0
|
|
|
248.2
|
|
||||
|
Net earnings attributable to Herman Miller, Inc.
|
35.8
|
|
|
39.3
|
|
|
39.2
|
|
|
46.2
|
|
||||
|
Earnings per share-basic
|
0.60
|
|
|
0.66
|
|
|
0.67
|
|
|
0.78
|
|
||||
|
Earnings per share-diluted
|
0.60
|
|
|
0.66
|
|
|
0.66
|
|
|
0.78
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2018
|
Net Sales
|
$
|
580.3
|
|
|
$
|
604.6
|
|
|
$
|
578.4
|
|
|
$
|
618.0
|
|
|
Gross margin
|
216.9
|
|
|
222.1
|
|
|
205.8
|
|
|
228.3
|
|
||||
|
Net earnings attributable to Herman Miller, Inc.
|
33.1
|
|
|
33.5
|
|
|
29.8
|
|
|
31.8
|
|
||||
|
Earnings per share-basic
|
0.55
|
|
|
0.56
|
|
|
0.50
|
|
|
0.53
|
|
||||
|
Earnings per share-diluted
|
0.55
|
|
|
0.55
|
|
|
0.49
|
|
|
0.53
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2017
|
Net sales
|
$
|
598.6
|
|
|
$
|
577.5
|
|
|
$
|
524.9
|
|
|
$
|
577.2
|
|
|
Gross margin
|
230.0
|
|
|
218.0
|
|
|
195.5
|
|
|
220.9
|
|
||||
|
Net earnings attributable to Herman Miller, Inc.
|
36.3
|
|
|
31.7
|
|
|
22.5
|
|
|
33.4
|
|
||||
|
Earnings per share-basic
|
0.61
|
|
|
0.53
|
|
|
0.38
|
|
|
0.56
|
|
||||
|
Earnings per share-diluted
|
0.60
|
|
|
0.53
|
|
|
0.37
|
|
|
0.55
|
|
(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 June 1, 2019 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.
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(c)
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Changes in Internal Control Over Financial Reporting. There were no changes in the Company's internal control over financial reporting during the fourth quarter ended June 1, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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(3)
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Articles of Incorporation and Bylaws
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(a)
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(b)
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(4)
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Instruments Defining the Rights of Security Holders
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(a)
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Specimen copy of Herman Miller, Inc., common stock is incorporated by reference to Exhibit 4(a) of Registrant's 1981 Form 10-K Annual Report (Commission File No. 001-15141).
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(b)
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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.
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(c)
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(d)
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(10)
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Material Contracts
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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(j)
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(k)
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(l)
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(m)
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(n)
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(o)
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(p)
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(q)
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(r)
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(s)
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(t)
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(21)
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
|
HERMAN MILLER, INC.
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||
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/s/ Jeffrey M. Stutz
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By
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Jeffrey M. Stutz
Chief Financial Officer (Principal Accounting Officer and Duly Authorized Signatory for Registrant) |
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/s/ Michael A. Volkema
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/s/ Lisa Kro
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Michael A. Volkema
(Chairman of the Board)
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Lisa Kro
(Director)
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/s/ David A. Brandon
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/s/ Mary Vermeer Andringa
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David A. Brandon
(Director) |
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Mary Vermeer Andringa
(Director)
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/s/ Douglas D. French
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/s/ John R. Hoke III
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Douglas D. French
(Director) |
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John R. Hoke III
(Director)
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/s/ Heidi Manheimer
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/s/ J. Barry Griswell
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Heidi Manheimer
(Director) |
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J. Barry Griswell
(Director)
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/s/ Mike Smith
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/s/ Andrea R. Owen
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Mike Smith
(Director)
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Andrea R. Owen
(President, Chief Executive Officer, and Director)
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/s/ Jeffrey M. Stutz
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Jeffrey M. Stutz
(Chief Financial Officer and Principal Accounting Officer)
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Column A
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Column B
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Column C
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Column D
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Column E
|
||||||||
Description
|
Balance at beginning of period
|
|
Charges to expenses or net sales
|
|
Deductions
(3)
|
|
Balance at end of period
|
||||||||
Year ended June 1, 2019:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — uncollectible accounts
(1)
|
$
|
2.4
|
|
|
$
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0.6
|
|
|
$
|
(0.1
|
)
|
|
$
|
2.9
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — credit memo
(2)
|
$
|
0.5
|
|
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$
|
—
|
|
|
$
|
0.1
|
|
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$
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0.6
|
|
|
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|
|
|
|
|
|
||||||||
Allowance for possible losses on notes receivable
|
$
|
0.4
|
|
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$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax asset
|
$
|
10.3
|
|
|
$
|
0.4
|
|
|
$
|
(0.3
|
)
|
|
$
|
10.4
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended June 2, 2018:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — uncollectible accounts
(1)
|
$
|
2.3
|
|
|
$
|
0.6
|
|
|
$
|
(0.5
|
)
|
|
$
|
2.4
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — credit memo
(2)
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for possible losses on notes receivable
|
$
|
0.9
|
|
|
$
|
(0.5
|
)
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax asset
|
$
|
10.0
|
|
|
$
|
0.5
|
|
|
$
|
(0.2
|
)
|
|
$
|
10.3
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended June 3, 2017:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — uncollectible accounts
(1)
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
(1.1
|
)
|
|
$
|
2.3
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable allowances — credit memo
(2)
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for possible losses on notes receivable
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax asset
|
$
|
10.6
|
|
|
$
|
(0.6
|
)
|
|
$
|
—
|
|
|
$
|
10.0
|
|
Name
|
Ownership
|
Jurisdiction of Incorporation
|
Colebrook Bosson & Saunders Products Limited
|
100% Company
|
England, U.K.
|
Colebrook Bosson Saunders, Pty. Ltd.
|
100% Company
|
Australia
|
Design Within Reach, Inc.
|
95% Company
|
Delaware
|
Geiger International, Inc.
|
100% Company
|
Delaware
|
Hemiri, S.A. de C.V.
|
100% Company
|
Mexico
|
Herman Miller Asia (Pte.) Ltd.
|
100% Company
|
Singapore
|
Herman Miller (Aust.) Proprietary Limited
|
100% Company
|
Australia
|
Herman Miller B.V.
|
100% Company
|
Netherlands
|
Herman Miller Canada, Inc.
|
100% Company
|
Canada
|
Herman Miller Consumer Co.
|
95% Company
|
Michigan
|
Herman Miller Consumer Corporation Canada
|
95% Company
|
Canada
|
Herman Miller Consumer Holdings, Inc.
|
95% Company
|
Michigan
|
Herman Miller do Brasil, Ltda.
|
100% Company
|
Brazil
|
Herman Miller (Dongguan) Furniture Co., Ltd.
|
100% Company
|
China
|
Herman Miller Finance Company (Hong Kong) LImited
|
100% Company
|
Hong Kong
|
Herman Miller Furniture (India) Pvt. Ltd.
|
100% Company
|
India
|
Herman Miller Global Customer Solutions (Hong Kong) Limited
|
100% Company
|
Hong Kong
|
Herman Miller Global Customer Solutions, Inc.
|
100% Company
|
Michigan
|
Herman Miller Global Holdings Luxembourg S.à r.l.
|
100% Company
|
Luxembourg
|
Herman Miller Holdings Limited
|
100% Company
|
England, U.K.
|
Herman Miller International Finance Luxembourg S.à r.l.
|
100% Company
|
Luxembourg
|
Herman Miller Japan, Ltd.
|
100% Company
|
Japan
|
Herman Miller Korea LLC
|
100% Company
|
Korea
|
Herman Miller Limited
|
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 Servicios S. de R.L. de C.V.
|
100% Company
|
Mexico
|
HM Delaware LLC
|
100% Company
|
Delaware
|
HMI Liquidating Company
|
100% Company
|
Michigan
|
Maharam Fabric Corporation
|
100% Company
|
New York
|
Meridian Incorporated
|
100% Company
|
Michigan
|
Milsure Insurance, Ltd.
|
100% Company
|
Barbados
|
Nemschoff, Inc.
|
100% Company
|
Wisconsin
|
POSH Office Systems (Hong Kong) Limited
|
100% Company
|
Hong Kong
|
Sun Hing POSH Holdings Limited
|
100% Company
|
Hong Kong
|
1.
|
I have reviewed this annual report on Form 10-K for the period ended June 1, 2019, of Herman Miller, Inc;
|
|
|
2.
|
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;
|
|
|
3.
|
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;
|
|
|
4.
|
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:
|
|
|
a)
|
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;
|
|
|
b)
|
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;
|
|
|
c)
|
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
|
|
|
d)
|
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
|
|
|
5.
|
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):
|
|
|
a)
|
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
|
|
|
b)
|
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.
|
1.
|
I have reviewed this annual report on Form 10-K for the period ended June 1, 2019, of Herman Miller, Inc;
|
|
|
2.
|
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;
|
|
|
3.
|
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;
|
|
|
4.
|
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:
|
|
|
a)
|
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;
|
|
|
b)
|
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;
|
|
|
c)
|
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
|
|
|
d)
|
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
|
|
|
5.
|
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):
|
|
|
a)
|
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
|
|
|
b)
|
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.
|
(1)
|
The Annual Report on Form 10-K for the period ended June 1, 2019, which this statement accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
|
(2)
|
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.
|
(1)
|
The Annual Report on Form 10-K for the period ended June 1, 2019, which this statement accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
|
(2)
|
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.
|