☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Michigan
|
|
38-0837640
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock
|
MLHR
|
NASDAQ
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
Page No.
|
Part I — Financial Information
|
|
|
|
Item 1 Financial Statements (Unaudited)
|
|
|
Condensed Consolidated Statements of Comprehensive Income — Three and Nine Months Ended February 29, 2020 and March 2, 2019
|
|
|
Condensed Consolidated Balance Sheets — February 29, 2020 and June 1, 2019
|
|
|
Condensed Consolidated Statements of Cash Flows — Nine Months Ended February 29, 2020 and March 2, 2019
|
|
|
Condensed Consolidated Statements of Stockholders' Equity — Nine Months Ended February 29, 2020 and March 2, 2019
|
|
|
Notes to Condensed Consolidated Financial Statements
|
|
|
Note 1 - Basis of Presentation
|
|
|
Note 2 - Recently Issued Accounting Standards
|
|
|
||
|
Note 4 - Leases
|
|
|
Note 5 - Acquisitions
|
|
|
Note 6 - Inventories, net
|
|
|
||
|
Note 8 - Employee Benefit Plans
|
|
|
Note 9 - Earnings Per Share
|
|
|
Note 10 - Stock-Based Compensation
|
|
|
Note 11 - Income Taxes
|
|
|
Note 12 - Fair Value Measurements
|
|
|
Note 13 - Commitments and Contingencies
|
|
|
Note 14 - Debt
|
|
|
Note 15 - Accumulated Other Comprehensive Loss
|
|
|
Note 16 - Operating Segments
|
|
|
Note 17 - Restructuring Expense
|
|
|
Note 18 - Variable Interest Entities
|
|
|
Note 19 - Subsequent Event
|
|
|
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3 Quantitative and Qualitative Disclosures about Market Risk
|
|
|
Item 4 Controls and Procedures
|
|
Part II — Other Information
|
|
|
|
Item 1 Legal Proceedings
|
|
|
Item 1A Risk Factors
|
|
|
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Item 3 Defaults upon Senior Securities
|
|
|
Item 4 Mine Safety Disclosures
|
|
|
Item 5 Other Information
|
|
|
Item 6 Exhibits
|
|
|
Signatures
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Net sales
|
$
|
665.7
|
|
|
$
|
619.0
|
|
|
$
|
2,010.8
|
|
|
$
|
1,896.2
|
|
Cost of sales
|
422.4
|
|
|
398.0
|
|
|
1,265.9
|
|
|
1,214.5
|
|
||||
Gross margin
|
243.3
|
|
|
221.0
|
|
|
744.9
|
|
|
681.7
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
170.5
|
|
|
153.7
|
|
|
504.9
|
|
|
476.5
|
|
||||
Restructuring expense
|
3.5
|
|
|
0.3
|
|
|
9.6
|
|
|
1.7
|
|
||||
Design and research
|
18.9
|
|
|
19.2
|
|
|
57.4
|
|
|
56.6
|
|
||||
Total operating expenses
|
192.9
|
|
|
173.2
|
|
|
571.9
|
|
|
534.8
|
|
||||
Operating earnings
|
50.4
|
|
|
47.8
|
|
|
173.0
|
|
|
146.9
|
|
||||
Gain on consolidation of equity method investments
|
—
|
|
|
—
|
|
|
30.5
|
|
|
—
|
|
||||
Interest expense
|
2.9
|
|
|
3.0
|
|
|
8.9
|
|
|
9.1
|
|
||||
Interest and other investment income
|
0.6
|
|
|
0.5
|
|
|
2.0
|
|
|
1.4
|
|
||||
Other expense (income), net
|
0.5
|
|
|
(0.3
|
)
|
|
0.6
|
|
|
0.1
|
|
||||
Earnings before income taxes and equity income
|
47.6
|
|
|
45.6
|
|
|
196.0
|
|
|
139.1
|
|
||||
Income tax expense
|
10.6
|
|
|
7.3
|
|
|
35.8
|
|
|
27.3
|
|
||||
Equity income from nonconsolidated affiliates, net of tax
|
0.3
|
|
|
1.0
|
|
|
3.7
|
|
|
2.8
|
|
||||
Net earnings
|
37.3
|
|
|
39.3
|
|
|
163.9
|
|
|
114.6
|
|
||||
Net (loss) earnings attributable to redeemable noncontrolling interests
|
(0.4
|
)
|
|
0.1
|
|
|
(0.6
|
)
|
|
0.1
|
|
||||
Net earnings attributable to Herman Miller, Inc.
|
$
|
37.7
|
|
|
$
|
39.2
|
|
|
$
|
164.5
|
|
|
$
|
114.5
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share — basic
|
$
|
0.64
|
|
|
$
|
0.67
|
|
|
$
|
2.79
|
|
|
$
|
1.94
|
|
Earnings per share — diluted
|
$
|
0.64
|
|
|
$
|
0.66
|
|
|
$
|
2.78
|
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
$
|
(1.9
|
)
|
|
$
|
8.0
|
|
|
$
|
2.5
|
|
|
$
|
(4.4
|
)
|
Pension and post-retirement liability adjustments
|
0.7
|
|
|
0.6
|
|
|
2.1
|
|
|
1.7
|
|
||||
Unrealized losses on interest rate swap agreement
|
(6.6
|
)
|
|
(4.4
|
)
|
|
(11.9
|
)
|
|
(3.9
|
)
|
||||
Unrealized holding gain on available for sale securities
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive (loss) income, net of tax
|
(7.8
|
)
|
|
4.3
|
|
|
(7.3
|
)
|
|
(6.6
|
)
|
||||
Comprehensive income
|
29.5
|
|
|
43.6
|
|
|
156.6
|
|
|
108.0
|
|
||||
Comprehensive (loss) income attributable to redeemable noncontrolling interests
|
(0.4
|
)
|
|
0.1
|
|
|
(0.6
|
)
|
|
0.1
|
|
||||
Comprehensive income attributable to Herman Miller, Inc.
|
$
|
29.9
|
|
|
$
|
43.5
|
|
|
$
|
157.2
|
|
|
$
|
107.9
|
|
|
Nine Months Ended
|
||||||
February 29, 2020
|
|
March 2, 2019
|
|||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net earnings
|
$
|
163.9
|
|
|
$
|
114.6
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
59.7
|
|
|
55.3
|
|
||
Stock-based compensation
|
7.9
|
|
|
7.2
|
|
||
Earnings from nonconsolidated affiliates net of dividends received
|
(3.6
|
)
|
|
(0.8
|
)
|
||
Gain on consolidation of equity method investments
|
(30.5
|
)
|
|
—
|
|
||
Restructuring expense
|
9.6
|
|
|
1.7
|
|
||
Decrease (increase) in current assets
|
17.8
|
|
|
(55.3
|
)
|
||
(Decrease) increase in current liabilities
|
(36.7
|
)
|
|
7.5
|
|
||
Other, net
|
3.7
|
|
|
0.4
|
|
||
Net Cash Provided by Operating Activities
|
191.8
|
|
|
130.6
|
|
||
|
|
|
|
||||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures
|
(56.5
|
)
|
|
(63.0
|
)
|
||
Equity investment in non-controlled entities
|
(3.3
|
)
|
|
(71.6
|
)
|
||
Acquisitions, net of cash received
|
(111.2
|
)
|
|
—
|
|
||
Purchase of HAY licensing agreement
|
—
|
|
|
(4.8
|
)
|
||
Other, net
|
(0.3
|
)
|
|
(3.0
|
)
|
||
Net Cash Used in Investing Activities
|
(171.3
|
)
|
|
(142.4
|
)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
||||
Dividends paid
|
(36.4
|
)
|
|
(34.0
|
)
|
||
Common stock issued
|
15.1
|
|
|
11.1
|
|
||
Common stock repurchased and retired
|
(25.9
|
)
|
|
(43.4
|
)
|
||
Purchase of redeemable noncontrolling interests
|
(20.3
|
)
|
|
(10.1
|
)
|
||
Other, net
|
(2.3
|
)
|
|
(0.2
|
)
|
||
Net Cash Used in Financing Activities
|
(69.8
|
)
|
|
(76.6
|
)
|
||
|
|
|
|
||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents
|
0.7
|
|
|
(2.0
|
)
|
||
Net Decrease in Cash and Cash Equivalents
|
(48.6
|
)
|
|
(90.4
|
)
|
||
|
|
|
|
||||
Cash and Cash Equivalents, Beginning of Period
|
159.2
|
|
|
203.9
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
110.6
|
|
|
$
|
113.5
|
|
|
Nine Months Ended February 29, 2020
|
|||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Deferred Compensation Plan
|
|
Herman Miller, Inc. Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total
Stockholders' Equity
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
June 1, 2019
|
58,794,148
|
|
|
$
|
11.7
|
|
|
$
|
89.8
|
|
|
$
|
712.7
|
|
|
$
|
(94.2
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
719.2
|
|
|
$
|
—
|
|
|
$
|
719.2
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
48.2
|
|
|
—
|
|
|
—
|
|
|
48.2
|
|
|
(0.2
|
)
|
|
48.0
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.3
|
)
|
|
—
|
|
|
(17.3
|
)
|
|
—
|
|
|
(17.3
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
|
2.6
|
|
||||||||
Exercise of stock options
|
382,898
|
|
|
0.1
|
|
|
12.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.2
|
|
|
—
|
|
|
12.2
|
|
||||||||
Restricted and performance stock units released
|
45,105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Employee stock purchase plan issuances
|
14,750
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||||
Repurchase and retirement of common stock
|
(173,001
|
)
|
|
—
|
|
|
(7.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|
—
|
|
|
(7.6
|
)
|
||||||||
Deferred compensation plan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||||
Dividends declared ($0.21 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.5
|
)
|
|
—
|
|
|
—
|
|
|
(12.5
|
)
|
|
—
|
|
|
(12.5
|
)
|
||||||||
Redemption value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.2
|
|
|
—
|
|
||||||||
August 31, 2019
|
59,063,900
|
|
|
$
|
11.8
|
|
|
$
|
97.4
|
|
|
$
|
748.2
|
|
|
$
|
(111.5
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
745.3
|
|
|
$
|
—
|
|
|
$
|
745.3
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
78.6
|
|
|
—
|
|
|
—
|
|
|
78.6
|
|
|
—
|
|
|
78.6
|
|
||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.8
|
|
|
—
|
|
|
17.8
|
|
|
—
|
|
|
17.8
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
2.8
|
|
||||||||
Exercise of stock options
|
5,227
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||||
Restricted and performance stock units released
|
3,653
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Employee stock purchase plan issuances
|
12,467
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||||
Repurchase and retirement of common stock
|
(10,006
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
||||||||
Dividends declared ($0.21 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||||
November 30, 2019
|
59,075,241
|
|
|
$
|
11.8
|
|
|
$
|
100.4
|
|
|
$
|
826.7
|
|
|
$
|
(93.7
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
844.6
|
|
|
$
|
—
|
|
|
$
|
844.6
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
37.7
|
|
|
—
|
|
|
—
|
|
|
37.7
|
|
|
—
|
|
|
37.7
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
||||||||
Exercise of stock options
|
35,690
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
||||||||
Restricted and performance stock units released
|
87,461
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||||
Employee stock purchase plan issuances
|
20,021
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
||||||||
Repurchase and retirement of common stock
|
(440,954
|
)
|
|
—
|
|
|
(17.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.9
|
)
|
|
—
|
|
|
(17.9
|
)
|
||||||||
Directors' fees
|
7,769
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||||
Deferred compensation plan
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Dividends declared ($0.21 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
|
—
|
|
|
—
|
|
|
(24.5
|
)
|
|
—
|
|
|
(24.5
|
)
|
||||||||
February 29, 2020
|
58,785,228
|
|
|
$
|
11.8
|
|
|
$
|
86.9
|
|
|
$
|
839.9
|
|
|
$
|
(101.5
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
836.8
|
|
|
$
|
—
|
|
|
$
|
836.8
|
|
|
Nine Months Ended March 2, 2019
|
|||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Deferred Compensation Plan
|
|
Herman Miller, Inc. Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Stockholders' Equity
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
June 2, 2018
|
59,230,974
|
|
|
$
|
11.7
|
|
|
$
|
116.6
|
|
|
$
|
598.3
|
|
|
$
|
(61.3
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
664.6
|
|
|
$
|
0.2
|
|
|
$
|
664.8
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
35.8
|
|
|
—
|
|
|
—
|
|
|
35.8
|
|
|
—
|
|
|
35.8
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
||||||||
Exercise of stock options
|
265,739
|
|
|
0.2
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
|
—
|
|
|
8.1
|
|
||||||||
Restricted and performance stock units released
|
335,266
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||||
Employee stock purchase plan issuances
|
16,805
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||||
Repurchase and retirement of common stock
|
(545,866
|
)
|
|
(0.1
|
)
|
|
(20.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20.8
|
)
|
|
—
|
|
|
(20.8
|
)
|
||||||||
Dividends declared ($0.1975 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.6
|
)
|
|
—
|
|
|
—
|
|
|
(11.6
|
)
|
|
—
|
|
|
(11.6
|
)
|
||||||||
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
(0.1
|
)
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
||||||||
September 1, 2018
|
59,302,918
|
|
|
$
|
11.9
|
|
|
$
|
106.5
|
|
|
$
|
624.5
|
|
|
$
|
(69.2
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
673.0
|
|
|
$
|
0.2
|
|
|
$
|
673.2
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
39.3
|
|
|
—
|
|
|
—
|
|
|
39.3
|
|
|
—
|
|
|
39.3
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
|
—
|
|
|
(3.1
|
)
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
2.5
|
|
||||||||
Exercise of stock options
|
53,614
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||||||
Restricted and performance stock units released
|
7,511
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Employee stock purchase plan issuances
|
14,813
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||||
Repurchase and retirement of common stock
|
(476,854
|
)
|
|
(0.1
|
)
|
|
(16.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.6
|
)
|
|
—
|
|
|
(16.6
|
)
|
||||||||
Dividends declared ($0.1975 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.7
|
)
|
|
—
|
|
|
—
|
|
|
(11.7
|
)
|
|
—
|
|
|
(11.7
|
)
|
||||||||
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
December 1, 2018
|
58,902,002
|
|
|
$
|
11.8
|
|
|
$
|
94.3
|
|
|
$
|
650.6
|
|
|
$
|
(70.8
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
685.2
|
|
|
$
|
0.2
|
|
|
$
|
685.4
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
39.2
|
|
|
—
|
|
|
—
|
|
|
39.2
|
|
|
0.1
|
|
|
39.3
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|
(0.2
|
)
|
|
2.6
|
|
||||||||
Exercise of stock options
|
3,197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Restricted and performance stock units released
|
75,917
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||||||
Employee stock purchase plan issuances
|
16,253
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||||||
Repurchase and retirement of common stock
|
(183,737
|
)
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
||||||||
Directors' fees
|
10,185
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||||
Deferred compensation plan
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||||
Dividends declared ($0.1975 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.5
|
)
|
|
—
|
|
|
—
|
|
|
(11.5
|
)
|
|
—
|
|
|
(11.5
|
)
|
||||||||
March 2, 2019
|
58,823,817
|
|
|
$
|
11.8
|
|
|
$
|
92.0
|
|
|
$
|
678.3
|
|
|
$
|
(66.5
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
714.8
|
|
|
$
|
0.1
|
|
|
$
|
714.9
|
|
Standard
|
|
Description
|
|
Effective Date
|
|
|
|
|
|
|
|
2016-13
|
Financial Instruments - Credit Losses (Topic 326): 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
|
2018-13
|
Fair Value Measurement (Topic 820): 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.
|
|
May 31, 2020
|
2018-14
|
Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): 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 post-retirement plans. Early adoption is permitted.
|
|
May 30, 2021
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
||||||||
Single performance obligation
|
|
|
|
|
|
|
|
||||||||
Product revenue
|
$
|
561.1
|
|
|
$
|
524.5
|
|
|
$
|
1,699.9
|
|
|
$
|
1,599.0
|
|
Multiple performance obligations
|
|
|
|
|
|
|
|
||||||||
Product revenue
|
98.9
|
|
|
89.0
|
|
|
294.5
|
|
|
281.7
|
|
||||
Service revenue
|
2.5
|
|
|
2.8
|
|
|
7.8
|
|
|
8.7
|
|
||||
Other
|
3.2
|
|
|
2.7
|
|
|
8.6
|
|
|
6.8
|
|
||||
Total
|
$
|
665.7
|
|
|
$
|
619.0
|
|
|
$
|
2,010.8
|
|
|
$
|
1,896.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
North America Contract:
|
|
|
|
|
|
|
|
||||||||
Systems
|
$
|
132.3
|
|
|
$
|
128.7
|
|
|
$
|
424.6
|
|
|
$
|
420.2
|
|
Seating
|
120.4
|
|
|
122.7
|
|
|
380.3
|
|
|
375.2
|
|
||||
Freestanding and storage
|
96.8
|
|
|
91.4
|
|
|
317.7
|
|
|
282.3
|
|
||||
Textiles
|
27.2
|
|
|
26.5
|
|
|
86.8
|
|
|
84.8
|
|
||||
Other
|
36.7
|
|
|
27.7
|
|
|
113.1
|
|
|
90.3
|
|
||||
Total North America Contract
|
$
|
413.4
|
|
|
$
|
397.0
|
|
|
$
|
1,322.5
|
|
|
$
|
1,252.8
|
|
|
|
|
|
|
|
|
|
||||||||
International Contract:
|
|
|
|
|
|
|
|
||||||||
Systems
|
$
|
21.5
|
|
|
$
|
26.8
|
|
|
$
|
66.2
|
|
|
$
|
78.0
|
|
Seating
|
107.1
|
|
|
71.8
|
|
|
235.4
|
|
|
202.7
|
|
||||
Freestanding and storage
|
14.0
|
|
|
14.5
|
|
|
42.5
|
|
|
38.7
|
|
||||
Other
|
13.5
|
|
|
12.9
|
|
|
44.0
|
|
|
40.5
|
|
||||
Total International Contract
|
$
|
156.1
|
|
|
$
|
126.0
|
|
|
$
|
388.1
|
|
|
$
|
359.9
|
|
|
|
|
|
|
|
|
|
||||||||
Retail:
|
|
|
|
|
|
|
|
||||||||
Seating
|
$
|
68.7
|
|
|
$
|
59.2
|
|
|
$
|
197.9
|
|
|
$
|
171.0
|
|
Freestanding and storage
|
16.9
|
|
|
15.2
|
|
|
50.6
|
|
|
49.2
|
|
||||
Other
|
10.6
|
|
|
21.6
|
|
|
51.7
|
|
|
63.3
|
|
||||
Total Retail
|
$
|
96.2
|
|
|
$
|
96.0
|
|
|
$
|
300.2
|
|
|
$
|
283.5
|
|
|
|
|
|
|
|
|
|
||||||||
Total
|
$
|
665.7
|
|
|
$
|
619.0
|
|
|
$
|
2,010.8
|
|
|
$
|
1,896.2
|
|
•
|
The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases.
|
•
|
The Company elected to make the accounting policy election for short-term leases resulting in lease costs being recorded as an expense on a straight-line basis over the lease term.
|
•
|
The Company elected to not separate lease and non-lease components, for all leases.
|
•
|
The Company did not elect the hindsight practical expedient in determining the lease term and in assessing the likelihood that a lessee purchase option will be exercised, for all leases.
|
•
|
The Company did not elect the land easement practical expedient in determining whether land easements that were not previously accounted for as leases are or contain a lease.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(In millions)
|
February 29, 2020
|
|
February 29, 2020
|
||||
Operating lease costs
|
$
|
13.1
|
|
|
$
|
38.5
|
|
Short-term lease costs
|
0.7
|
|
|
1.9
|
|
||
Variable lease costs*
|
2.1
|
|
|
6.5
|
|
||
Total
|
$
|
15.9
|
|
|
$
|
46.9
|
|
(In millions)
|
|
||
2020
|
$
|
12.3
|
|
2021
|
47.7
|
|
|
2022
|
44.1
|
|
|
2023
|
39.7
|
|
|
2024
|
33.9
|
|
|
Thereafter
|
102.0
|
|
|
Total lease payments*
|
$
|
279.7
|
|
Less interest
|
28.1
|
|
|
Present value of lease liabilities
|
$
|
251.6
|
|
(In millions)
|
Valuation Method
|
|
Useful Life (years)
|
|
Fair Value
|
||
Inventory Step-up
|
Comparative Sales Approach
|
|
0.3
|
|
$
|
3.4
|
|
Backlog
|
Multi-Period Excess Earnings
|
|
0.3
|
|
3.4
|
|
|
Deferred Revenue
|
Adjusted Fulfillment Cost Method
|
|
0.1
|
|
(2.0
|
)
|
|
Tradename
|
Relief from Royalty
|
|
Indefinite
|
|
56.0
|
|
|
Product Development/Technology
|
Relief from Royalty
|
|
11.0
|
|
21.0
|
|
|
Customer Relationships
|
Multi-Period Excess Earnings
|
|
14.0
|
|
33.0
|
|
|
Total
|
|
|
|
|
$
|
114.8
|
|
(In millions)
|
Valuation Method
|
|
Useful Life (years)
|
|
Fair Value
|
||
Inventory Step-up
|
Comparative Sales Approach
|
|
0.3
|
|
$
|
0.2
|
|
Backlog
|
Multi-Period Excess Earnings
|
|
0.3
|
|
0.8
|
|
|
Tradename
|
Relief from Royalty
|
|
Indefinite
|
|
8.5
|
|
|
Customer Relationships
|
Multi-Period Excess Earnings
|
|
10.0
|
|
29.4
|
|
|
Total
|
|
|
|
|
$
|
38.9
|
|
|
Nine Months Ended
|
|
Year Ended
|
||||
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Net sales
|
$
|
2,104.8
|
|
|
$
|
2,757.3
|
|
Net earnings attributable to Herman Miller, Inc.
|
$
|
139.9
|
|
|
$
|
160.8
|
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Finished goods
|
$
|
155.3
|
|
|
$
|
139.1
|
|
Raw materials
|
45.2
|
|
|
45.1
|
|
||
Total
|
$
|
200.5
|
|
|
$
|
184.2
|
|
(In millions)
|
Goodwill
|
|
Indefinite-lived Intangible Assets
|
|
Total Goodwill and Indefinite-lived Intangible Assets
|
||||||
June 1, 2019
|
$
|
303.8
|
|
|
$
|
78.1
|
|
|
$
|
381.9
|
|
Foreign currency translation adjustments
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|||
Acquisition of HAY
|
104.8
|
|
|
56.0
|
|
|
160.8
|
|
|||
Acquisition of naughtone
|
57.5
|
|
|
8.5
|
|
|
66.0
|
|
|||
February 29, 2020
|
$
|
466.1
|
|
|
$
|
142.3
|
|
|
$
|
608.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Interest cost
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
1.8
|
|
|
$
|
2.0
|
|
Expected return on plan assets
|
(1.1
|
)
|
|
(1.1
|
)
|
|
(3.3
|
)
|
|
(3.3
|
)
|
||||
Net amortization loss
|
0.9
|
|
|
0.7
|
|
|
2.5
|
|
|
2.0
|
|
||||
Net periodic benefit cost
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
$
|
1.0
|
|
|
$
|
0.7
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Numerators:
|
|
|
|
|
|
|
|
||||||||
Numerator for both basic and diluted EPS, Net earnings attributable to Herman Miller, Inc. - in millions
|
$
|
37.7
|
|
|
$
|
39.2
|
|
|
$
|
164.5
|
|
|
$
|
114.5
|
|
|
|
|
|
|
|
|
|
||||||||
Denominators:
|
|
|
|
|
|
|
|
||||||||
Denominator for basic EPS, weighted-average common shares outstanding
|
58,940,060
|
|
|
58,838,958
|
|
|
58,970,264
|
|
|
59,087,899
|
|
||||
Potentially dilutive shares resulting from stock plans
|
278,041
|
|
|
288,300
|
|
|
296,665
|
|
|
360,395
|
|
||||
Denominator for diluted EPS
|
59,218,101
|
|
|
59,127,258
|
|
|
59,266,929
|
|
|
59,448,294
|
|
||||
Antidilutive equity awards not included in weighted-average common shares - diluted
|
164,443
|
|
|
401,811
|
|
|
74,932
|
|
|
211,097
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Stock-based compensation expense
|
$
|
2.5
|
|
|
$
|
2.2
|
|
|
$
|
7.9
|
|
|
$
|
7.2
|
|
Related income tax effect
|
0.6
|
|
|
0.5
|
|
|
1.8
|
|
|
1.6
|
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Liability for interest and penalties
|
$
|
0.9
|
|
|
$
|
0.7
|
|
Liability for uncertain tax positions, current
|
$
|
2.2
|
|
|
$
|
1.9
|
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Carrying value
|
$
|
277.5
|
|
|
$
|
285.0
|
|
Fair value
|
$
|
279.8
|
|
|
$
|
287.8
|
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||||||||||
Financial Assets
|
NAV
|
|
Quoted Prices with Other
Observable Inputs (Level 2)
|
|
NAV
|
|
Quoted Prices with Other
Observable Inputs (Level 2)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
14.7
|
|
|
$
|
—
|
|
|
$
|
69.5
|
|
|
$
|
—
|
|
Mutual funds - equity
|
—
|
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
||||
Deferred compensation plan
|
—
|
|
|
12.6
|
|
|
—
|
|
|
12.5
|
|
||||
Total
|
$
|
14.7
|
|
|
$
|
13.5
|
|
|
$
|
69.5
|
|
|
$
|
13.4
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
Total
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
(In millions)
|
February 29, 2020
|
June 1, 2019
|
|||||
Financial Assets
|
Quoted Prices with
Other Observable Inputs (Level 2)
|
|
Quoted Prices with
Other Observable Inputs (Level 2) |
||||
Mutual funds - fixed income
|
$
|
8.0
|
|
|
$
|
7.9
|
|
Interest rate swap agreement
|
—
|
|
|
1.0
|
|
||
Total
|
$
|
8.0
|
|
|
$
|
8.9
|
|
|
|
|
|
||||
Financial Liabilities
|
|
|
|
||||
Interest rate swap agreement
|
$
|
17.3
|
|
|
$
|
2.2
|
|
Total
|
$
|
17.3
|
|
|
$
|
2.2
|
|
|
February 29, 2020
|
|
June 1, 2019
|
||||||||||||||||||||
(In millions)
|
Cost
|
|
Unrealized
Gain/(Loss)
|
|
Market
Value
|
|
Cost
|
|
Unrealized
Gain/(Loss) |
|
Market
Value |
||||||||||||
Mutual funds - fixed income
|
$
|
8.0
|
|
|
$
|
—
|
|
|
$
|
8.0
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
Mutual funds - equity
|
0.7
|
|
|
0.2
|
|
|
0.9
|
|
|
0.8
|
|
|
0.1
|
|
|
0.9
|
|
||||||
Total
|
$
|
8.7
|
|
|
$
|
0.2
|
|
|
$
|
8.9
|
|
|
$
|
8.7
|
|
|
$
|
0.1
|
|
|
$
|
8.8
|
|
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
||||
Beginning Balance
|
$
|
20.6
|
|
|
$
|
30.5
|
|
Purchase of HMCH redeemable noncontrolling interests
|
(20.4
|
)
|
|
(10.1
|
)
|
||
Redemption value adjustment
|
(0.2
|
)
|
|
—
|
|
||
Exercised options
|
—
|
|
|
0.2
|
|
||
Net income attributable to redeemable noncontrolling interests
|
—
|
|
|
0.1
|
|
||
Ending Balance
|
$
|
—
|
|
|
$
|
20.7
|
|
(In millions)
|
February 29, 2020
|
||
Beginning Balance
|
$
|
—
|
|
Increase due to HAY acquisition
|
72.1
|
|
|
Net income attributable to redeemable noncontrolling interests
|
(0.4
|
)
|
|
Ending Balance
|
$
|
71.7
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Accrual Balance — beginning
|
$
|
54.6
|
|
|
$
|
52.4
|
|
|
$
|
53.1
|
|
|
$
|
51.5
|
|
Accrual for warranty matters
|
7.5
|
|
|
4.6
|
|
|
19.1
|
|
|
15.3
|
|
||||
Settlements and adjustments
|
(4.7
|
)
|
|
(4.5
|
)
|
|
(14.8
|
)
|
|
(14.3
|
)
|
||||
Accrual Balance — ending
|
$
|
57.4
|
|
|
$
|
52.5
|
|
|
$
|
57.4
|
|
|
$
|
52.5
|
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Debt securities, due March 1, 2021
|
$
|
50.0
|
|
|
$
|
50.0
|
|
Syndicated revolving line of credit, due August 2024
|
225.0
|
|
|
225.0
|
|
||
Construction-type lease
|
—
|
|
|
6.9
|
|
||
Supplier financing program
|
2.5
|
|
|
3.1
|
|
||
Total debt
|
$
|
277.5
|
|
|
$
|
285.0
|
|
Less: Current debt
|
(2.5
|
)
|
|
(3.1
|
)
|
||
Long-term debt
|
$
|
275.0
|
|
|
$
|
281.9
|
|
(In millions)
|
Cumulative Translation Adjustments
|
|
Pension and Other Post-retirement Benefit Plans
|
|
Unrealized
Gains on Available-for-sale Securities
|
|
Interest Rate Swap Agreement
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at June 1, 2019
|
$
|
(48.3
|
)
|
|
$
|
(45.0
|
)
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
(94.2
|
)
|
Other comprehensive income (loss), net of tax before reclassifications
|
2.5
|
|
|
—
|
|
|
—
|
|
|
(12.0
|
)
|
|
(9.5
|
)
|
|||||
Reclassification from accumulated other comprehensive loss - Other, net
|
—
|
|
|
2.5
|
|
|
—
|
|
|
0.1
|
|
|
2.6
|
|
|||||
Tax benefit
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|||||
Net reclassifications
|
—
|
|
|
2.1
|
|
|
—
|
|
|
0.1
|
|
|
2.2
|
|
|||||
Net current period other comprehensive income (loss)
|
2.5
|
|
|
2.1
|
|
|
—
|
|
|
(11.9
|
)
|
|
(7.3
|
)
|
|||||
Balance at February 29, 2020
|
$
|
(45.8
|
)
|
|
$
|
(42.9
|
)
|
|
$
|
—
|
|
|
$
|
(12.8
|
)
|
|
$
|
(101.5
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at June 2, 2018
|
$
|
(34.1
|
)
|
|
$
|
(37.2
|
)
|
|
$
|
0.1
|
|
|
$
|
9.9
|
|
|
$
|
(61.3
|
)
|
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
1.5
|
|
|
1.4
|
|
|||||
Other comprehensive loss, net of tax before reclassifications
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|
(8.6
|
)
|
|||||
Reclassification from accumulated other comprehensive loss - Other, net
|
—
|
|
|
2.0
|
|
|
—
|
|
|
0.3
|
|
|
2.3
|
|
|||||
Tax benefit
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||||
Net reclassifications
|
—
|
|
|
1.7
|
|
|
—
|
|
|
0.3
|
|
|
2.0
|
|
|||||
Net current period other comprehensive (loss) income
|
(4.4
|
)
|
|
1.7
|
|
|
—
|
|
|
(3.9
|
)
|
|
(6.6
|
)
|
|||||
Balance at March 2, 2019
|
$
|
(38.5
|
)
|
|
(35.5
|
)
|
|
$
|
—
|
|
|
$
|
7.5
|
|
|
$
|
(66.5
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||||||
Net Sales:
|
|
|
|
|
|
|
|
||||||||
North America Contract
|
$
|
413.4
|
|
|
$
|
397.0
|
|
|
$
|
1,322.5
|
|
|
$
|
1,252.8
|
|
International Contract
|
156.1
|
|
|
126.0
|
|
|
388.1
|
|
|
359.9
|
|
||||
Retail
|
96.2
|
|
|
96.0
|
|
|
300.2
|
|
|
283.5
|
|
||||
Total
|
$
|
665.7
|
|
|
$
|
619.0
|
|
|
$
|
2,010.8
|
|
|
$
|
1,896.2
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Earnings (Loss):
|
|
|
|
|
|
|
|
||||||||
North America Contract
|
$
|
51.2
|
|
|
$
|
40.2
|
|
|
$
|
176.4
|
|
|
$
|
139.5
|
|
International Contract
|
11.3
|
|
|
16.3
|
|
|
37.3
|
|
|
40.7
|
|
||||
Retail
|
(1.6
|
)
|
|
2.3
|
|
|
(6.4
|
)
|
|
6.3
|
|
||||
Corporate
|
(10.5
|
)
|
|
(11.0
|
)
|
|
(34.3
|
)
|
|
(39.6
|
)
|
||||
Total
|
$
|
50.4
|
|
|
$
|
47.8
|
|
|
$
|
173.0
|
|
|
$
|
146.9
|
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Total Assets:
|
|
|
|
||||
North America Contract
|
$
|
832.4
|
|
|
$
|
733.6
|
|
International Contract
|
557.6
|
|
|
356.8
|
|
||
Retail
|
476.3
|
|
|
310.0
|
|
||
Corporate
|
119.5
|
|
|
168.9
|
|
||
Total
|
$
|
1,985.8
|
|
|
$
|
1,569.3
|
|
(In millions)
|
Severance and Employee-Related
|
|
Exit or Disposal Activities
|
|
Total
|
||||||
Beginning Balance
|
$
|
6.7
|
|
|
$
|
1.0
|
|
|
$
|
7.7
|
|
Restructuring Costs
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|||
Amounts Paid
|
(7.9
|
)
|
|
(0.3
|
)
|
|
$
|
(8.2
|
)
|
||
Ending Balance
|
$
|
0.5
|
|
|
$
|
0.7
|
|
|
$
|
1.2
|
|
(In millions)
|
Severance and Employee-Related
|
|
Exit or Disposal Activities
|
|
Total
|
||||||
Beginning Balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring Costs
|
2.7
|
|
|
0.3
|
|
|
3.0
|
|
|||
Amounts Paid
|
(0.1
|
)
|
|
—
|
|
|
$
|
(0.1
|
)
|
||
Ending Balance
|
$
|
2.6
|
|
|
$
|
0.3
|
|
|
$
|
2.9
|
|
(In millions)
|
Severance and Employee-Related
|
|
Exit or Disposal Activities
|
|
Total
|
||||||
Beginning Balance
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
Restructuring Costs
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|||
Amounts Paid
|
(0.1
|
)
|
|
(0.7
|
)
|
|
(0.8
|
)
|
|||
Ending Balance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Net sales were $665.7 million and orders were $651.7 million, representing an increase of 7.5% and 6.3%, respectively, when compared to the same quarter of the prior year. The increase in net sales was driven primarily by the acquisitions of HAY and naughtone, as well as incremental list price increases. On an organic basis, net sales were $615.9 million(*) and orders were $604.1 million, representing a decrease of 0.5%(*) and 1.4%, respectively, when compared to the same quarter of the prior year.
|
•
|
Gross margin was 36.5% as compared to 35.7% for the same quarter of the prior year. In the current year, this included the impact of special charges totaling $1.4 million related to the initial purchase accounting effects of the Company's investment in HAY. The increase in gross margin was driven primarily by list price increases, lower steel costs, and profitability improvement efforts, partially offset by the acquisitions of HAY and naughtone.
|
•
|
Operating expenses increased by $19.7 million or 11.4% as compared to the same quarter of the prior year. Operating expenses included special charges, totaling $4.7 million, related to transaction costs and initial purchase accounting effects of the Company's investments in HAY and naughtone. Operating expenses also included restructuring expense of $3.5 million related primarily to restructuring actions associated with profit improvement initiatives.
|
•
|
The effective tax rate was 22.4% compared to 16.0% for the same quarter of the prior year. The rate in the prior year included the final adjustment related to recognizing the impact of the U.S. Tax Cuts and Jobs Act.
|
•
|
Diluted earnings per share decreased $0.02 to $0.64, a 3.0% decrease as compared to the prior year. Excluding restructuring expenses and other special charges, adjusted diluted earnings per share were $0.74(*), a 15.6% increase as compared to the prior year.
|
•
|
The Company declared cash dividends of $0.21 per share compared to $0.1975 per share in the same quarter of the prior year.
|
•
|
Strategic investment of approximately $79 million was made in acquiring an additional 34% of the outstanding equity of HAY.
|
•
|
Throughout most of the third quarter, our business in North America reflected a mixed macro-economic picture. Job growth and architectural billing activity reflect positive trends, while industry order trends as reported by the Business and Institutional Furniture Manufacturers Association ("BIFMA") have varied in recent months.
|
•
|
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 ("Brexit"). These negotiations create a level of uncertainty in key markets, particularly the U.K., continental Europe and China, which, if unresolved in the near term, will likely negatively impact customer demand.
|
•
|
The Company is also navigating the impact of global tariffs. The Company continues to believe, based upon existing circumstances, that pricing, strategic sourcing actions and profit optimization initiatives have fully offset the current level of tariffs imposed on imports from China.
|
•
|
The Company's Retail segment is facing continuing gross margin pressure from increasing customer expectations that the products they buy should come with free or discounted shipping. In response, the Company is continuing to evaluate a variety of strategies, including negotiating lower costs from third party freight providers, implementing actions aimed at improving the efficiency of its logistics processes and more closely reflecting the cost of delivery into the base price of its products.
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
|
2/29/20
|
3/2/19
|
2/29/20
|
3/2/19
|
||||||||
Earnings per Share - Diluted
|
$
|
0.64
|
|
$
|
0.66
|
|
$
|
2.78
|
|
$
|
1.92
|
|
|
|
|
|
|
||||||||
Less: Adjustments Related to Adoption of U.S. Tax Cuts and Jobs Act
|
—
|
|
(0.03
|
)
|
—
|
|
(0.02
|
)
|
||||
Add: Inventory step up on HAY equity method investment, after tax
|
—
|
|
—
|
|
—
|
|
0.01
|
|
||||
Less: Gain on consolidation of equity method investments
|
—
|
|
—
|
|
(0.51
|
)
|
—
|
|
||||
Add: Special charges, after tax
|
0.06
|
|
0.01
|
|
0.08
|
|
0.15
|
|
||||
Add: Restructuring expense, after tax
|
0.04
|
|
—
|
|
0.12
|
|
0.03
|
|
||||
Adjusted Earnings per Share - Diluted
|
$
|
0.74
|
|
$
|
0.64
|
|
$
|
2.47
|
|
$
|
2.09
|
|
|
|
|
|
|
||||||||
Weighted Average Shares Outstanding (used for Calculating Adjusted Earnings per Share) – Diluted
|
59,218,101
|
|
59,127,258
|
|
59,266,929
|
|
59,448,294
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||
(In millions, except per share data)
|
February 29, 2020
|
|
March 2, 2019
|
|
% Change
|
|
February 29, 2020
|
|
March 2, 2019
|
|
% Change
|
||||||||||
Net sales
|
$
|
665.7
|
|
|
$
|
619.0
|
|
|
7.5
|
%
|
|
$
|
2,010.8
|
|
|
$
|
1,896.2
|
|
|
6.0
|
%
|
Cost of sales
|
422.4
|
|
|
398.0
|
|
|
6.1
|
%
|
|
1,265.9
|
|
|
1,214.5
|
|
|
4.2
|
%
|
||||
Gross margin
|
243.3
|
|
|
221.0
|
|
|
10.1
|
%
|
|
744.9
|
|
|
681.7
|
|
|
9.3
|
%
|
||||
Operating expenses
|
192.9
|
|
|
173.2
|
|
|
11.4
|
%
|
|
571.9
|
|
|
534.8
|
|
|
6.9
|
%
|
||||
Operating earnings
|
50.4
|
|
|
47.8
|
|
|
5.4
|
%
|
|
173.0
|
|
|
146.9
|
|
|
17.8
|
%
|
||||
Gain on consolidation of equity method investments
|
—
|
|
|
—
|
|
|
n/a
|
|
30.5
|
|
|
—
|
|
|
n/a
|
||||||
Other expenses, net
|
2.8
|
|
|
2.2
|
|
|
27.3
|
%
|
|
7.5
|
|
|
7.8
|
|
|
(3.8
|
)%
|
||||
Earnings before income taxes and equity income
|
47.6
|
|
|
45.6
|
|
|
4.4
|
%
|
|
196.0
|
|
|
139.1
|
|
|
40.9
|
%
|
||||
Income tax expense
|
10.6
|
|
|
7.3
|
|
|
45.2
|
%
|
|
35.8
|
|
|
27.3
|
|
|
31.1
|
%
|
||||
Equity income from nonconsolidated affiliates, net of tax
|
0.3
|
|
|
1.0
|
|
|
(70.0
|
)%
|
|
3.7
|
|
|
2.8
|
|
|
32.1
|
%
|
||||
Net earnings
|
37.3
|
|
|
39.3
|
|
|
(5.1
|
)%
|
|
163.9
|
|
|
114.6
|
|
|
43.0
|
%
|
||||
Net (loss) earnings attributable to redeemable noncontrolling interests
|
(0.4
|
)
|
|
0.1
|
|
|
n/a
|
|
(0.6
|
)
|
|
0.1
|
|
|
n/a
|
||||||
Net earnings attributable to Herman Miller, Inc.
|
$
|
37.7
|
|
|
$
|
39.2
|
|
|
(3.8
|
)%
|
|
$
|
164.5
|
|
|
$
|
114.5
|
|
|
43.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share — diluted
|
$
|
0.64
|
|
|
$
|
0.66
|
|
|
(3.0
|
)%
|
|
$
|
2.78
|
|
|
$
|
1.92
|
|
|
44.8
|
%
|
Orders
|
$
|
651.7
|
|
|
$
|
612.8
|
|
|
6.3
|
%
|
|
$
|
2,003.3
|
|
|
$
|
1,950.4
|
|
|
2.7
|
%
|
Backlog
|
$
|
411.2
|
|
|
$
|
400.5
|
|
|
2.7
|
%
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
February 29, 2020
|
|
March 2, 2019
|
|
February 29, 2020
|
|
March 2, 2019
|
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
63.5
|
|
|
64.3
|
|
|
63.0
|
|
|
64.0
|
|
Gross margin
|
36.5
|
|
|
35.7
|
|
|
37.0
|
|
|
36.0
|
|
Operating expenses
|
29.0
|
|
|
28.0
|
|
|
28.4
|
|
|
28.2
|
|
Operating earnings
|
7.6
|
|
|
7.7
|
|
|
8.6
|
|
|
7.7
|
|
Gain on consolidation of equity method investments
|
—
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
Other expenses, net
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
|
0.4
|
|
Earnings before income taxes and equity income
|
7.2
|
|
|
7.4
|
|
|
9.7
|
|
|
7.3
|
|
Income tax expense
|
1.6
|
|
|
1.2
|
|
|
1.8
|
|
|
1.4
|
|
Equity income from nonconsolidated affiliates, net of tax
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
0.1
|
|
Net earnings
|
5.6
|
|
|
6.3
|
|
|
8.2
|
|
|
6.0
|
|
Net (loss) earnings attributable to redeemable noncontrolling interests
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Net earnings attributable to Herman Miller, Inc.
|
5.7
|
|
|
6.3
|
|
|
8.2
|
|
|
6.0
|
|
•
|
Approximately $50 million due to the acquisition of HAY and naughtone.
|
•
|
Incremental list price increases, net of contract price discounting, of approximately $11 million.
|
•
|
Decreased sales volumes within the International segment of approximately $14 million, of which approximately $6 million was due to the temporary closure of the Company's China manufacturing facility, stemming from the outbreak of COVID-19.
|
•
|
Approximately $54 million due to the acquisition of HAY and naughtone.
|
•
|
Incremental list price increases, net of contract price discounting, of approximately $34 million.
|
•
|
Increased sales volumes within the North America Contract segment of approximately $27 million due to increased demand within the core contract and Geiger businesses.
|
•
|
Increased sales volumes within the Retail segment of approximately $20 million which were driven primarily by growth across the Company's DWR studio, outlet and contract channels, which were partially offset by lower freight revenue.
|
•
|
Decreased sales volumes within the International segment of approximately $15 million, of which approximately $6 million was due to the temporary closure of the Company's China manufacturing facility, stemming from the outbreak of COVID-19.
|
•
|
Foreign currency translation had a negative impact on net sales of approximately $5 million.
|
•
|
Incremental list price increases, net of contract price discounting, increased gross margin by approximately 90 basis points.
|
•
|
Lower steel costs and ongoing profitability improvement efforts increased gross margin by approximately 110 basis points.
|
•
|
Lower volume leverage primarily within the North America Contract segment decreased gross margin by approximately 50 basis points.
|
•
|
Special charges related to the initial purchase accounting of HAY combined with unfavorable product mix associated with the business acquisitions decreased gross margin by approximately 70 basis points.
|
•
|
Incremental list price increases, net of contract price discounting, increased gross margin by approximately 110 basis points.
|
•
|
Lower steel costs increased gross margin by approximately 40 basis points.
|
•
|
Higher net freight expenses and cost inefficiencies driven partly by the move into a new Ohio–based distribution center within the Retail segment decreased gross margin by approximately 50 basis points.
|
•
|
The acquisition of HAY and naughtone increased Operating expenses by approximately $12 million.
|
•
|
Special charges increased by approximately $4 million, while restructuring expense increased by approximately $3 million.
|
•
|
Incremental warranty costs increased by approximately $3 million partially due to higher claim rates and a product recall.
|
•
|
Lower incentive compensation costs of approximately $2 million.
|
•
|
The acquisition of HAY and naughtone increased Operating expenses by approximately $15 million.
|
•
|
Incremental IT costs increased by approximately $6 million.
|
•
|
Incremental sales volume based costs, such as sales commissions and royalties, increased approximately $5 million.
|
•
|
Compensation and benefit costs increased approximately $5 million.
|
•
|
Incremental warranty costs increased by approximately $4 million partially due to higher claim rates and a product recall.
|
•
|
Restructuring expense increased approximately $7 million, while special charges decreased approximately $5 million.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
February 29, 2020
|
|
March 2, 2019
|
|
Change
|
|
February 29, 2020
|
|
March 2, 2019
|
|
Change
|
||||||||||||
Net sales
|
$
|
413.4
|
|
|
$
|
397.0
|
|
|
$
|
16.4
|
|
|
$
|
1,322.5
|
|
|
$
|
1,252.8
|
|
|
$
|
69.7
|
|
Gross margin
|
150.1
|
|
|
136.6
|
|
|
13.5
|
|
|
487.0
|
|
|
436.3
|
|
|
50.7
|
|
||||||
Gross margin %
|
36.3
|
%
|
|
34.4
|
%
|
|
1.9
|
%
|
|
36.8
|
%
|
|
34.8
|
%
|
|
2.0
|
%
|
||||||
Operating earnings
|
51.2
|
|
|
40.2
|
|
|
11.0
|
|
|
176.4
|
|
|
139.5
|
|
|
36.9
|
|
||||||
Operating earnings %
|
12.4
|
%
|
|
10.1
|
%
|
|
2.3
|
%
|
|
13.3
|
%
|
|
11.1
|
%
|
|
2.2
|
%
|
•
|
Incremental list price increases, net of contract price discounting, of approximately $9 million; and
|
•
|
Approximately $6 million due to the acquisition of naughtone.
|
•
|
Increased Gross margin of $13.5 million and increased gross margin percentage of 190 basis points due primarily to incremental list price increases, net of contract price discounting, and lower steel costs, partially offset by lower volume leverage; offset by
|
•
|
Increased Operating expenses of $2.5 million driven primarily by increased restructuring, warranty, and IT costs, partially offset by lower employee incentive compensation costs.
|
•
|
Increased sales volumes within the North America segment of approximately $27 million due to increased demand within the core contract and Geiger businesses;
|
•
|
Incremental list price increases, net of contract price discounting, of approximately $32 million; and
|
•
|
Approximately $9 million due to the acquisition of naughtone.
|
•
|
Increased Gross margin of $50.7 million and increased gross margin percentage of 200 basis points due primarily to incremental list price increases, net of contract price discounting, and lower steel costs; offset by
|
•
|
Increased Operating expenses of $13.8 million driven primarily by increased restructuring, warranty, and IT costs, partially offset by lower marketing costs.
|
•
|
Approximately $44 million due to the acquisition of HAY and naughtone; offset by
|
•
|
Decreased sales volumes within the International segment of approximately $14 million, of which approximately $6 million was due to the outbreak of COVID-19 in China during the current quarter and associated temporary closure of our China facility.
|
•
|
Increased Operating expenses of $13.7 million driven primarily by the acquisition of HAY and naughtone and special charges related to the initial purchase accounting effects of HAY and naughtone; offset by
|
•
|
Increased Gross margin of $8.7 million due to the increase in sales explained above, and decreased gross margin percentage of 90 basis points due primarily to special charges related to the initial purchase accounting effects of HAY. Gross margin during the current quarter was approximately $2 million lower due to the outbreak of COVID-19 as described above.
|
•
|
Approximately $45 million due to the acquisition of HAY and naughtone; offset by
|
•
|
Decreased sales volumes within the International segment of approximately $15 million, of which approximately $6 million was due to the temporary closure of the Company's China manufacturing facility, stemming from the outbreak of COVID-19; and
|
•
|
The impact of foreign currency translation which decreased sales by approximately $4 million.
|
•
|
Increased Operating expenses of $14.4 million, driven primarily by the acquisition of HAY and naughtone and special charges related to the initial purchase accounting effects of HAY and naughtone; offset by
|
•
|
Increased Gross margin of $11.0 million due to the increase in sales explained above, and increased gross margin percentage of 40 basis points due primarily to incremental list price increases, net of contract price discounting and restructuring cost savings, offset partially by special charges related to the initial purchase accounting effects of HAY. Gross margin during the current year was approximately $2 million lower due to the outbreak of COVID-19 as described above.
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||||||||
|
February 29, 2020
|
|
March 2, 2019
|
|
Change
|
|
February 29, 2020
|
|
March 2, 2019
|
|
Change
|
|||||||||||
Net sales
|
$
|
96.2
|
|
|
96.0
|
|
|
$
|
0.2
|
|
|
$
|
300.2
|
|
|
$
|
283.5
|
|
|
$
|
16.7
|
|
Gross margin
|
42.4
|
|
|
42.3
|
|
|
0.1
|
|
|
127.0
|
|
|
125.5
|
|
|
1.5
|
|
|||||
Gross margin %
|
44.1
|
%
|
|
44.1
|
%
|
|
—
|
%
|
|
42.3
|
%
|
|
44.3
|
%
|
|
(2.0
|
)%
|
|||||
Operating earnings
|
(1.6
|
)
|
|
2.3
|
|
|
(3.9
|
)
|
|
(6.4
|
)
|
|
6.3
|
|
|
(12.7
|
)
|
|||||
Operating earnings %
|
(1.7
|
)%
|
|
2.4
|
%
|
|
(4.1
|
)%
|
|
(2.1
|
)%
|
|
2.2
|
%
|
|
(4.3
|
)%
|
•
|
Increased Operating expenses of $4.0 million primarily due to restructuring costs, sales volume based costs, new DWR studios, and the launch of the HAY brand in North America.
|
•
|
Increased sales volumes within the Retail segment of approximately $20 million which were driven primarily by growth across the Company's DWR studio, outlet and contract channels, which were partially offset by lower freight revenue.
|
•
|
Increased Operating expenses of $14.2 million primarily due to restructuring costs, sales volume based costs, new DWR studios, and the launch of the HAY brand in North America; offset by
|
•
|
Increased Gross margin of $1.5 million and decreased gross margin percentage of 200 basis points due primarily to higher net freight expenses and cost inefficiencies associated with the move into a new Ohio–based distribution center, partially offset by product mix.
|
(In millions)
|
February 29, 2020
|
|
March 2, 2019
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
191.8
|
|
|
$
|
130.6
|
|
Investing activities
|
(171.3
|
)
|
|
(142.4
|
)
|
||
Financing activities
|
(69.8
|
)
|
|
(76.6
|
)
|
||
Effect of exchange rate changes
|
0.7
|
|
|
(2.0
|
)
|
||
Net change in cash and cash equivalents
|
$
|
(48.6
|
)
|
|
$
|
(90.4
|
)
|
•
|
An increase in net earnings, excluding the naughtone non-cash gain, of $18.8 million; and
|
•
|
A decrease in current assets in the current period of $17.8 million, driven by a decrease in accounts receivable. This compares to an increase in current assets of $55.3 million in the prior year period. The increase in the prior year period was driven primarily by an increase in inventory and unbilled accounts receivable; offset by
|
•
|
A decrease in current liabilities in the current period of $36.7 million, driven primarily by a decease in accounts payable and accrued liabilities. This compares to an increase in current liabilities of $7.5 million in the prior year period. The increase in the prior year period was driven primarily by an increase in accounts payable and accrued liabilities.
|
•
|
Current year cash outflows of $111.2 million for the additional investments in naughtone and HAY compared to prior year cash outflows of $71.6 million for equity investments in HAY and Maars, and $4.8 million for the purchase of the HAY licensing agreement.
|
•
|
Lower common stock repurchased of $25.9 million in the current year compared to $43.4 million in the prior year; offset by
|
•
|
The purchase of the remaining redeemable noncontrolling interests in the current year for $20.3 million as described in Note 12 of the Condensed Consolidated Financial Statements, compared to purchases of $10.1 million in the prior year.
|
(In millions)
|
February 29, 2020
|
|
June 1, 2019
|
||||
Cash and cash equivalents
|
$
|
110.6
|
|
|
$
|
159.2
|
|
Marketable securities
|
8.9
|
|
|
8.8
|
|
||
Availability under syndicated revolving line of credit
|
265.5
|
|
|
165.0
|
|
||
Total liquidity
|
$
|
385.0
|
|
|
$
|
333.0
|
|
Period
|
(a) Total Number of Shares (or Units)
Purchased
|
|
(b) Average price Paid per Share or Unit
|
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or Programs (in millions)
|
||||||
12/1/19 - 12/28/19
|
13,572
|
|
|
$
|
42.69
|
|
|
13,572
|
|
|
$
|
255,569,568
|
|
12/29/19 - 1/25/20
|
148,671
|
|
|
$
|
41.20
|
|
|
148,671
|
|
|
$
|
249,444,561
|
|
1/26/20 - 2/29/20
|
278,711
|
|
|
$
|
40.44
|
|
|
278,711
|
|
|
$
|
238,172,837
|
|
Total
|
440,954
|
|
|
|
|
440,954
|
|
|
|
Exhibit Number
|
Document
|
10.1*
|
10.2*
|
10.3*
|
31.1
|
31.2
|
32.1
|
32.2
|
101.INS
|
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
April 7, 2020
|
|
/s/ Andrea R. Owen
|
|
|
|
|
|
Andrea R. Owen
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Duly Authorized Signatory for Registrant)
|
|
|
|
|
|
|
April 7, 2020
|
|
/s/ Jeffrey M. Stutz
|
|
|
|
|
|
Jeffrey M. Stutz
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Duly Authorized Signatory for Registrant)
|
|
|
Herman Miller, Inc.
|
|
|
|
By:
|
|
|
|
|
Jeffrey M. Stutz
Chief Financial Officer
|
Relative TSR Ranking:
|
TSR Modifier Percentage:
|
75th percentile or above
|
125%
|
50th percentile (target performance)
|
100% (no modification)
|
25th percentile or below
|
75%
|
|
|
Herman Miller, Inc.
|
|
|
|
By:
|
|
|
|
|
Jeffrey M. Stutz
Chief Financial Officer
|
1.
|
Peer Group. The Peer Group shall consist of the following companies:
|
American Woodmark Corporation
|
Kimball International, Inc.
|
Steelcase, Inc.
|
Armstrong World Industries, Inc.
|
Knoll, Inc.
|
Tempur-Pedic International, Inc.
|
Ethan Allen Interiors, Inc.
|
La-Z-Boy, Inc.
|
Universal Forest Products, Inc.
|
Hill-Rom Holdings, Inc.
|
Leggett & Platt, Inc.
|
Williams-Sonoma, Inc.
|
HNI Corporation
|
Masonite International Corp
|
Wayfair, Inc.
|
Interface, Inc.
|
Restoration Hardware Holdings, Inc.
|
|
JELD-WEN Holdings, Inc.
|
Sleep Number Corporation
|
|
2.
|
Adjustments to the Peer Group. The Committee may decide to adjust, in its sole discretion, the Peer Group at any time during the Performance Period to reflect the occurrence of certain extraordinary events. The Committee will generally make the determination to adjust (or not adjust) the Peer Group in accordance with the following guidelines but reserves the right to make adjustments in addition to, or that conflict with, such guidelines if it determines such adjustments are equitable.
|
a.
|
If a Peer Group company becomes bankrupt, the bankrupt company will remain in the Peer Group and will positioned at one level below the lowest performing non-bankrupt Peer Group company. In the case of multiple bankruptcies, the bankrupt companies will be positioned below the non-bankrupt companies in reverse chronological order by bankruptcy date.
|
b.
|
If a Peer Group company is acquired by another company, the acquired company will be removed from the Peer Group for the entire Performance Period.
|
c.
|
If a Peer Group company sells, spins-off, or disposes of a portion of its business, the selling Peer Group company will remain in the Peer Group for the entire Performance Period unless such disposition(s) results in the disposition of more than 50% of the company’s total assets during the Performance Period, in which case the Peer Group company shall be removed from the Peer Group.
|
d.
|
If a Peer Group company acquires another company, the acquiring Peer Group company will remain in the Peer Group.
|
e.
|
If the price of a Peer Company’s common stock (or its equivalent) is not available on a consistent, reliable basis due to delisting on all major stock exchanges and over-the-counter markets, such delisted Peer Group company will be removed from the Peer Group for the entire Performance Period; provided, however, that if the company becomes bankrupt prior to the end of the Performance Period, it shall be treated as in (a) above.
|
f.
|
If the Company’s and/or any Peer Group company’s stock splits, then the Committee shall adjust such company’s performance in a manner that it deems equitable so as not to give an advantage or disadvantage to such Peer Group company by comparison to the other Peer Group companies.
|
Relative TSR Ranking:
|
TSR Modifier Percentage:
|
75th percentile or above
|
125%
|
50th percentile (target performance)
|
100% (no modification)
|
25th percentile or below
|
75%
|
|
|
Herman Miller, Inc.
|
|
|
|
By:
|
|
|
|
|
Jeffrey M. Stutz
Chief Financial Officer
|
1.
|
Peer Group. The Peer Group shall consist of the following companies:
|
American Woodmark Corporation
|
Kimball International, Inc.
|
Steelcase, Inc.
|
Armstrong World Industries, Inc.
|
Knoll, Inc.
|
Tempur-Pedic International, Inc.
|
Ethan Allen Interiors, Inc.
|
La-Z-Boy, Inc.
|
Universal Forest Products, Inc.
|
Hill-Rom Holdings, Inc.
|
Leggett & Platt, Inc.
|
Williams-Sonoma, Inc.
|
HNI Corporation
|
Masonite International Corp
|
Wayfair, Inc.
|
Interface, Inc.
|
Restoration Hardware Holdings, Inc.
|
|
JELD-WEN Holdings, Inc.
|
Sleep Number Corporation
|
|
2.
|
Adjustments to the Peer Group. The Committee may decide to adjust, in its sole discretion, the Peer Group at any time during the Performance Period to reflect the occurrence of certain extraordinary events. The Committee will generally make the determination to adjust (or not adjust) the Peer Group in accordance with the following guidelines but reserves the right to make adjustments in addition to, or that conflict with, such guidelines if it determines such adjustments are equitable.
|
a.
|
If a Peer Group company becomes bankrupt, the bankrupt company will remain in the Peer Group and will positioned at one level below the lowest performing non-bankrupt Peer Group company. In the case of multiple bankruptcies, the bankrupt companies will be positioned below the non-bankrupt companies in reverse chronological order by bankruptcy date.
|
b.
|
If a Peer Group company is acquired by another company, the acquired company will be removed from the Peer Group for the entire Performance Period.
|
c.
|
If a Peer Group company sells, spins-off, or disposes of a portion of its business, the selling Peer Group company will remain in the Peer Group for the entire Performance Period unless such disposition(s) results in the disposition of more than 50% of the company’s total assets during the Performance Period, in which case the Peer Group company shall be removed from the Peer Group.
|
d.
|
If a Peer Group company acquires another company, the acquiring Peer Group company will remain in the Peer Group.
|
e.
|
If the price of a Peer Company’s common stock (or its equivalent) is not available on a consistent, reliable basis due to delisting on all major stock exchanges and over-the-counter markets, such delisted Peer Group company will be removed from the Peer Group for the entire Performance Period; provided, however, that if the company becomes bankrupt prior to the end of the Performance Period, it shall be treated as in (a) above.
|
f.
|
If the Company’s and/or any Peer Group company’s stock splits, then the Committee shall adjust such company’s performance in a manner that it deems equitable so as not to give an advantage or disadvantage to such Peer Group company by comparison to the other Peer Group companies.
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended February 29, 2020, 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 registrant's 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 the 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 quarterly report on Form 10-Q for the period ended February 29, 2020, 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 registrant's 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 the 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 quarterly report on Form 10-Q for the period ended February 29, 2020, 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 this quarterly report on Form 10-Q for the quarterly period ended February 29, 2020, fairly presents, in all material respects, the financial condition and results of operations of the company
|
(1)
|
The quarterly report on Form 10-Q for the period ended February 29, 2020, 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 this quarterly report on Form 10-Q for the quarterly period ended February 29, 2020, fairly presents, in all material respects, the financial condition and results of operations of the company.
|