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Herman Miller Profit Down, Sees Weak Q3

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12/19/2012 5:44 PM ET

Office furniture maker Herman Miller Inc. (MLHR: Quote), Wednesday reported a decline in profit for the second quarter, hurt mainly by charges related to termination of a pension plan. Lower revenues at its North American division also impacted bottom line. Herman Miller's earnings and revenues for the quarter fell short of analysts' expectations.

Moving ahead, Herman Miller detailed an outlook for the third quarter, which is indicated to miss current estimates.

Herman Miller's North American segment sales, the biggest contributor to the top line, dropped 5.3 percent to $304.7 million, while new orders rose 7.3 percent.

Meanwhile, sales at the non-North American division, which is a smaller segment, rose 6.1 percent to $92.8 million. Sales for specialty and consumer segment improved 21.7 percent to $44.3 million, year-over-year.

Herman Miller's net sales for the quarter dropped 0.9 percent to $441.8 million from $445.6 million last year. Analysts polled by Thomson Reuters estimated revenues of $467.33 million for the quarter.

Chief Executive Brian Walker said, "A combination of factors contributed to lower than anticipated sales in the quarter, including long-leadtime orders, disruption caused by the East Coast storm, and further weakening of demand in Europe."

Gross margin declined to 33.6 percent from 34.1 percent, negatively impacted by legacy pension costs and changes in product and channel mix.

Michigan-based Herman Miller's second-quarter profit declined to $8.4 million or $0.14 per share from $23.7 million or $0.41 per share last year.

The company's earnings for the quarter includes aggregate non-cash charges of $0.21 per share related to its strategy to terminate domestic defined benefit pension plans and other restructuring actions.

Adjusted earnings for the quarter were $0.35 per share. Analysts expected earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.

Looking forward to the third quarter, Herman Miller expect earnings of $0.22 to $0.26 per share, adjusted earnings of $0.27 to $0.31 per share, and net sales of $430 million to $450 million. Analysts currently estimate earnings of $0.34 per share on revenues of $444.20 million.

MLHR closed Wednesday's trading at $21.38, up $0.26 or 1.23%, on the Nasdaq. In after-hours trade, the stock lost $0.23 or 1.09%.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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