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Herman Miller, Inc. (MLHR) reported record fiscal second-quarter earnings of 72 cents per share in mid-December, excluding restructuring expenses. The result was well above last year’s 56 cents and topped the consensus estimate by 22%.

The company issued an earnings per share outlook of 55 cents to 62 cents for its third quarter. Wall Street is in agreement. MLHR’s return on equity [ROE] stands at an impressive 91%, far above the industry’s average of 7%. The company also announced a definitive agreement to acquire Brandrud Furniture, Inc., a Seattle-based manufacturer of healthcare furnishings.

The company's award-winning products, complemented by furniture-management and strategic consulting services, generated $1.92 billion in revenue during fiscal 2007. Herman Miller is widely recognized both for its innovative products and business practices.

The company announced fiscal second-quarter results in mid-December. Herman Miller noted that increases in sales, orders, and gross margins, coupled with a decrease in operating expenses, resulted in the highest quarterly earnings per share ever recorded by the company. Earnings per share were 72 cents, excluding restructuring expenses. The result was well above last year’s 56 cents and topped the consensus estimate by 22%. Sales were up 1.4% on a year-over-year basis and orders climbed by 8.2%.

Brian Walker, Chief Executive Officer, stated,

We are pleased with this quarter's results and the superb performance of our employee-owners. We were able to increase earnings with a very modest increase in top-line performance. This is a testament to the organization's ability to manage costs and drive operational efficiencies while continuing to push our strategic growth initiatives forward. We made substantial progress this quarter in our previously outlined initiatives to improve underlying business performance, accelerate investment in our growth initiatives, and more effectively use our balance sheet to create long-term value.

The company issued an earnings per share outlook of 55 cents to 62 cents for its third quarter. Wall Street is in agreement. All three covering analysts increased third-quarter forecasts from 56 cents per share to 58 cents over the past 30 trading days. For the full year ending May of 2008, the three covering analysts upped earnings estimates from $2.27 per share to $2.44 over the same time period. The earnings per share total for MLHR is expected to grow by 15% over the next 3 – 5 years, which is better than the industry’s average of 13%.

The company’s return on equity [ROE] stands at an impressive 91%, far above the industry’s average of 7%. Herman Miller offers a dividend yield of about 1%.

In mid-December, the company also announced a definitive agreement to acquire Brandrud Furniture, Inc., a Seattle-based manufacturer of healthcare furnishings. MLHR noted that the transaction is expected to be completed in February 2008, pending the conclusion of due diligence.

This acquisition supports Herman Miller's strategy of accelerating investment in high-return growth initiatives," said Brian Walker, Chief Executive Officer. "Brandrud has been increasingly recognized for its high- quality and well-designed products, making it an excellent strategic fit with our company. The acquisition enables Herman Miller to gain access to a proven product portfolio that strengthens and expands our healthcare offering. The Company also has a strong management team and excellent workforce that share both our values and our growth ambitions.

Source: Herman Miller: Impressive Earnings, ROE