Herman Miller Posts Profitable Year

June 26, 2003
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HOLLAND — Herman Miller Inc. posted a $23 million profit for its 2003 fiscal year, the result of aggressive cost cutting that generated substantially improved margins.

The profit compares with a net loss of $56 million in the prior fiscal year and included a small loss for the fourth quarter.

The company on Wednesday afternoon reported a quarterly loss of $1.3 million, or 2 cents per share, which includes pre-tax charges of $15.9 million and compares with an $18.8 million, or 25 cents per share, net loss during the same period a year ago.

The $23 million, or 31 cents per share, net income for FY2003 compares with $56.6 million, or 74 cents per share, net loss in the prior fiscal year.

Sales on the year fell 9 percent, to $1.33 billion from $1.46 billion, although the fourth quarter brought some hope that the office furniture industry’s worst-ever downturn may have begun to ebb.

Quarterly sales were off only 0.2 percent, to $321.9 million from $322.6 in the same period a year earlier. The good news: Orders for the quarter were up sequentially a respectable 19.7 percent from the previous quarter, the company stated.

That strong quarter-to-quarter improvement in orders, combined with recent data showing the economy beginning to improve, provides some indication that the industry is headed toward recovery after more than two years of sharp declines, although Chairman and CEO Michael Volkema cautions that the rebound will come slowly and follow the course the industry traditionally experiences after an economic downturn.

“We are encouraged to see some of the positive trends in the economy and a sequential improvement in our order-entry rates,” Volkema said. “Corporate profitability and consumer confidence appear to be strengthening, and the stock market seems to be reflecting the positive impact of those trends. But we remain cautious about the near-term outlook because our industry performance normally lags the general economy by four to six months.”

For the first quarter of FY 2004 that began June 1, Herman Miller expects sales of $320 million to $340 million. Per-share earnings should reach 1 cent to 5 cents, including an anticipated charge of 5 cents per share.  

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