HM Experiences Soft Quarter

March 20, 2003
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HOLLAND — As they reported sales and earnings at the low end of expectations, Herman Miller Inc. executives said Wednesday they see little chance of any near-term improvement in business conditions.

While cost-cutting efforts did result in improved operating margins and earnings, economic uncertainty and the prospects during the quarter of war with Iraq caused continued softness in orders that pushed sales and orders down from year-ago levels.

“With the impending war in Iraq, we don’t believe it is prudent to anticipate a recovery in order entry rates at this time,” Chief Financial Officer Beth Nickels said in reporting Herman Miller’s sales and earnings Wednesday afternoon.

Herman Miller reported quarterly sales of $310.4 million, down 8.9 percent from the $340.7 million during the same period a year earlier. Year-to-date sales for the 2003 fiscal year totaled $1.01 billion, down 11.5 percent from the $1.14 billion in the first nine months of the previous fiscal year.

Quarterly net income was $3 million, or 4 cents per share, which compares with a net loss of $11.6 million, or 15 cents per share, a year ago. Year-to-date net income was $24.6 million, or 33 cents per share, which is in sharp contrast to the net loss of $37.2 million, or 49 cents per share, in the same period a year earlier.

For the fourth quarter that began March 1, Herman Miller expects sales in the range of $305 million to $325 million and net income of 1 cent to 6 cents per share. That would place annual sales at between $1.32 billion and $1.34 billion and net income for the year at 34 cents to 39 cents per share, excluding special charges.

“Like others, we had hoped the economy would be showing signs of recovery by now. While it has not, we did take the appropriate actions to lower our cost structure which positions us for strong cash flow and profitability, even at today’s revenue levels,” Chairman and CEO Mike Volkema said. “We have a strong, proven leadership team in place to see us through these turbulent times and we will continue to take prompt, appropriate action to further manage costs as necessary.”           

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