EX-99.2 3 hmi062216ex992.htm EXHIBIT 99.2 Exhibit


Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)






Earnings Release Data Supplement
Herman Miller, Inc. (together with its consolidated subsidiaries, the "company", "we", "our" or "us") provides this supplement to assist investors in evaluating the company's financial and operating results and metrics. We suggest that the narratives to each of the tables included in this supplement be read in conjunction with the financial tables. The financial information included in this supplement contains certain non-GAAP financial measures, as explained in more detail in Section II.












Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)

I. Operating Segment Information
The table below summarizes select financial information, for the periods indicated, related to each of the company’s reportable operating segments. The North American Furniture Solutions segment includes the operations associated with the design, manufacture, and sale of furniture products for work-related settings, including office, education, and healthcare environments, throughout the United States and Canada. The business associated with the company's owned contract furniture dealers is also included in the North American Furniture Solutions segment. The ELA Furniture Solutions segment includes EMEA, Latin America, and Asia-Pacific. ELA includes the operations associated with the design, manufacture, and sale of furniture products, primarily for work-related settings, in these aforementioned geographic regions. The Specialty segment includes the operations associated with the design, manufacture, and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles and Herman Miller Collection products. The Consumer segment includes operations associated with the sale of modern design furnishings and accessories to third party retail distributors, as well as direct to consumer sales through eCommerce and Design Within Reach retail studios. The Corporate category consists primarily of unallocated corporate expenses including, if applicable to the periods shown, restructuring, acquisition-related costs, and other unallocated corporate costs.
 
 
Three Months Ended
Twelve Months Ended
Net Sales
 
May 28, 2016
May 30, 2015
May 28, 2016
May 30, 2015
North America
 
$
332.9

$
309.5

$
1,331.8

$
1,241.9

ELA
 
110.5

102.9

412.6

409.9

Specialty
 
61.6

59.4

231.8

219.9

Consumer
 
77.6

78.9

288.7

270.5

Corporate
 
—

—

—

—

Total
 
$
582.6

$
550.7

$
2,264.9

$
2,142.2

 
 
 
 
 
 
% Change in Net Sales
 
 
 
 
 
North America
 
7.6
 %
 
7.2
%
 
ELA
 
7.4
 %
 
0.7
%
 
Specialty
 
3.7
 %
 
5.4
%
 
Consumer
 
(1.6
)%
 
6.7
%
 
Corporate
 
n/a

 
n/a

 
Total
 
5.8
 %
 
5.7
%
 
 
 
 
 
 
 
Operating Earnings (Loss)
 
 
 
 
 
North America
 
$
39.2

$
30.0

$
152.0

$
125.2

ELA
 
14.6

6.2

35.3

25.9

Specialty
 
4.5

5.9

16.4

13.5

Consumer
 
(1.2
)
6.3

8.1

14.7

Corporate
 
(0.5
)
(11.3
)
(0.3
)
(15.9
)
Total
 
$
56.6

$
37.1

$
211.5

$
163.4

 
 
 
 
 
 
Operating Earnings (Loss) % Net Sales
 
 
 
 
 
North America
 
11.8
 %
9.7
%
11.4
%
10.1
%
ELA
 
13.2
 %
6.0
%
8.6
%
6.3
%
Specialty
 
7.3
 %
9.9
%
7.1
%
6.1
%
Consumer
 
(1.5
)%
8.0
%
2.8
%
5.4
%
Corporate
 
n/a

n/a

n/a

n/a

Total
 
9.7
 %
6.7
%
9.3
%
7.6
%





Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)

II. Non-GAAP Financial Measures
This presentation contains certain non-GAAP financial measures; including Adjusted Earnings per Share, Adjusted Operating Earnings, Adjusted EBITDA, and Organic Growth (Decline). Adjusted Earnings per Share and Adjusted Operating Earnings are calculated by excluding from Earnings per Share and Operating Earnings items that we believe are not indicative of our ongoing operating performance. For the periods covered by this release, such items consist of expenses associated with restructuring actions taken to adjust our cost structure to the current business climate, non-cash impairment expenses, expenses associated with acquisition-related inventory adjustments, transaction expenses associated with our acquisition of DWR, non-recurring gains, one-time tax impacts and certain tax planning benefits not attributed to the quarter. Adjusted EBITDA is calculated by excluding depreciation, amortization and other net income or expenses from Adjusted Operating Earnings. We present Adjusted Earnings per Share, Adjusted Operating Earnings, and Adjusted EBITDA because we consider them to be important supplemental measures of our performance and believe them to be useful in analyzing ongoing results from operations. Organic Growth (Decline) represents the change in revenue and orders, excluding currency translation effects as well as the impacts of acquisitions and divestitures.

Adjusted Earnings per Share, Adjusted Operating Earnings, Adjusted EBITDA and Organic Growth (Decline) are not measurements of our financial performance under GAAP and should not be considered an alternative to the related GAAP measurement. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results.
A. Reconciliation of Earnings per Share to Adjusted Earnings per Share
 
Three Months Ended
Twelve Months Ended
 
 
May 28, 2016
May 30, 2015
May 28, 2016
May 30, 2015
Earnings per Share - Diluted
 
$
0.67

$
0.39

$
2.26

$
1.62

Less: Non-recurring Gains
 
(0.09
)
—

(0.09
)
—

Less: One-Time Tax Impact
 
—

(0.07
)
—

(0.07
)
Less: Tax Planning Benefit not Attributable to Quarter
 
(0.02
)
—

—

—

Add: Acquisition-Related Inventory Adjustments
 
—

—

—

0.08

Add: Restructuring / Impairment Expenses
 
—

0.15

—

0.17

Add: Acquisition Expenses
 
—

—

—

0.02

Adjusted Earnings per Share – Diluted
 
$
0.56

$
0.47

$
2.17

$
1.82

 
 
 
 
 
 
Weighted Average Shares Outstanding used for Calculating Adjusted Earnings per Share – Diluted
 
60,623,047

60,253,733

60,529,269

60,126,101

 
 
 
 
 
 
B. Reconciliation of Operating Earnings to Adjusted Operating Earnings and Adjusted EBITDA
 
Three Months Ended
Twelve Months Ended
 
 
May 28, 2016
May 30, 2015
May 28, 2016
May 30, 2015
Operating Earnings
 
$
56.6

$
37.1

$
211.5

$
163.4

Less: Non-recurring Gains
 
(6.1
)
—

(6.1
)
—

Add: Acquisition-Related Inventory Adjustments
 
—

—

—

7.8

Add: Restructuring / Impairment Expenses
 
—

10.8

—

12.7

Add: Acquisition Expenses
 
—

—

—

2.2

Adjusted Operating Earnings
 
$
50.5

$
47.9

$
205.4

$
186.1

 
 
 
 
 
 
Other Income / (Expense), net
 
1.2

0.4

0.5

(0.7
)
Add: Depreciation and Amortization
 
13.1

11.2

53.0

49.8

Adjusted EBITDA
 
$
64.8

$
59.5

$
258.9

$
235.2





Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)
C. Reconciliation of Operating Earnings to Adjusted Operating Earnings and Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
Three Months Ended
 
May 28, 2016
May 30, 2015
 
North America
ELA
Specialty
Consumer
Corporate
Total
North America
ELA
Specialty
Consumer
Corporate
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss)
$
39.2

$
14.6

$
4.5

$
(1.2
)
$
(0.5
)
$
56.6

$
30.0

$
6.2

$
5.9

$
6.3

$
(11.3
)
$
37.1

% Net Sales
11.8
%
13.2
%
7.3
%
(1.5
)%
n/a

9.7
%
9.7
%
6.0
%
9.9
%
8.0
%
n/a

6.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: Non-recurring Gains
—

(6.1
)
—

—

—

(6.1
)
—

—

—

—

—

—

Add: Restructuring / Impairment Expenses
—

—

—

—

—

—

—

—

—

—

10.8

10.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Earnings (Loss)
$
39.2

$
8.5

$
4.5

$
(1.2
)
$
(0.5
)
$
50.5

$
30.0

$
6.2

$
5.9

$
6.3

$
(0.5
)
$
47.9

% Net Sales
11.8
%
7.7
%
7.3
%
(1.5
)%
n/a

8.7
%
9.7
%
6.0
%
9.9
%
8.0
%
n/a

8.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income / (Expense), net
 
 
 
 
1.2

1.2

 
 
 
 
0.4

0.4

Add: Depreciation and Amortization
6.9

2.0

1.9

2.1

0.2

13.1

5.1

1.9

2.0

2.0

0.2

11.2

Adjusted EBITDA
$
46.1

$
10.5

$
6.4

$
0.9

$
0.9

$
64.8

$
35.1

$
8.1

$
7.9

$
8.3

$
0.1

$
59.5

% Net Sales
13.8
%
9.5
%
10.4
%
1.2
 %
n/a

11.1
%
11.3
%
7.9
%
13.3
%
10.5
%
n/a

10.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
Twelve Months Ended
 
May 28, 2016
May 30, 2015
 
North America
ELA
Specialty
Consumer
Corporate
Total
North America
ELA
Specialty
Consumer
Corporate
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (Loss)
$
152.0

$
35.3

$
16.4

$
8.1

$
(0.3
)
$
211.5

$
125.2

$
25.9

$
13.5

$
14.7

$
(15.9
)
$
163.4

% Net Sales
11.4
%
8.6
%
7.1
%
2.8
 %
n/a

9.3
%
10.1
%
6.3
%
6.1
%
5.4
%
n/a

7.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: Non-recurring Gains
—

(6.1
)
—

—

—

(6.1
)
—

—

—

—

—

—

Add: Restructuring / Impairment Expenses
—

—

—

—

—

—

—

—

—

—

12.7

12.7

Add: Acquisition-Related Inventory Adjustments
—

—

—

—

—

—

—

—

—

7.8

—

7.8

Add: Acquisition Expenses
—

—

—

—

—

—

—

—

—

—

2.2

2.2

 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Operating Earnings (Loss)
$
152.0

$
29.2

$
16.4

$
8.1

$
(0.3
)
$
205.4

$
125.2

$
25.9

$
13.5

$
22.5

$
(1.0
)
$
186.1

% Net Sales
11.4
%
7.1
%
7.1
%
2.8
 %
n/a

9.1
%
10.1
%
6.3
%
6.1
%
8.3
%
n/a

8.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Income / (Expense), net
 
 
 
 
0.5

0.5

 
 
 
 
(0.7
)
(0.7
)
Add: Depreciation and Amortization
27.9

8.5

7.4

8.6

0.6

53.0

26.5

8.2

7.4

7.3

0.4

49.8

Adjusted EBITDA
$
179.9

$
37.7

$
23.8

$
16.7

$
0.8

$
258.9

$
151.7

$
34.1

$
20.9

$
29.8

$
(1.3
)
$
235.2

% Net Sales
13.5
%
9.1
%
10.3
%
5.8
 %
n/a

11.4
%
12.2
%
8.3
%
9.5
%
11.0
%
n/a

11.0
%
 




Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)
D. Organic Sales Growth (Decline) by Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
Three Months Ended
 
May 28, 2016
May 30, 2015
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Net Sales, as reported
$
332.9

$
110.5

$
61.6

$
77.6

$
582.6

$
309.5

$
102.9

$
59.4

$
78.9

$
550.7

% change from PY
7.6
%
7.4
%
3.7
%
(1.6
)%
5.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
1.1

1.8

0.1

0.1

3.1

—

—

—

—

—

Net sales, proforma
$
334.0

$
112.3

$
61.7

$
77.7

$
585.7

$
309.5

$
102.9

$
59.4

$
78.9

$
550.7

% change from PY
7.9
%
9.1
%
3.9
%
(1.5
)%
6.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
Twelve Months Ended
 
May 28, 2016
May 30, 2015
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Net Sales, as reported
$
1,331.8

$
412.6

$
231.8

$
288.7

$
2,264.9

$
1,241.9

$
409.9

$
219.9

$
270.5

$
2,142.2

% change from PY
7.2
%
0.7
%
5.4
%
6.7
 %
5.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
12.5

26.1

0.6

0.8

40.0

—

—

—

—

—

Acquisition
—

—

—

(35.4
)
(35.4
)
—

—

—

—

—

Acquisition Intercompany Elimination
—

—

—

5.2

5.2

—

—

—

—

—

Net sales, proforma
$
1,344.3

$
438.7

$
232.4

$
259.3

$
2,274.7

$
1,241.9

$
409.9

$
219.9

$
270.5

$
2,142.2

% change from PY
8.2
%
7.0
%
5.7
%
(4.1
)%
6.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period





Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)
E. Organic Order Growth (Decline) by Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
Three Months Ended
 
May 28, 2016
May 30, 2015
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Orders, as reported
$
358.6

$
101.7

$
61.7

$
84.2

$
606.2

$
321.5

$
93.4

$
57.9

$
84.1

$
556.9

% change from PY
11.5
%
8.9
 %
6.6
%
0.1
 %
8.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
1.0

1.0

0.1

0.1

2.2

—

—

—

—

—

Orders, proforma
$
359.6

$
102.7

$
61.8

$
84.3

$
608.4

$
321.5

$
93.4

$
57.9

$
84.1

$
556.9

% change from PY
11.9
%
10.0
 %
6.7
%
0.2
 %
9.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
Twelve Months Ended
 
May 28, 2016
May 30, 2015
 
North America
ELA
Specialty
Consumer
Total
North America
ELA
Specialty
Consumer
Total
Orders, as reported
$
1,336.1

$
417.0

$
234.8

$
291.7

$
2,279.6

$
1,235.8

$
417.6

$
221.4

$
271.7

$
2,146.5

% change from PY
8.1
%
(0.1
)%
6.1
%
7.4
 %
6.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proforma Adjustments
 
 
 
 
 
 
 
 
 
 
Currency Translation Effects (1)
10.9

26.5

0.5

0.8

38.7

—

—

—

—

—

Acquisition
—

—

—

(33.1
)
(33.1
)
—

—

—

—

—

Acquisition Intercompany Elimination
—

—

—

4.1

4.1

—

—

—

—

—

Orders, proforma
$
1,347.0

$
443.5

$
235.3

$
263.5

$
2,289.3

$
1,235.8

$
417.6

$
221.4

$
271.7

$
2,146.5

% change from PY
9.0
%
6.2
 %
6.3
%
(3.0
)%
6.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period






Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)


F. Design Within Reach (DWR) Metrics
 
 
 
 
 
Studio Count
 
Three Months Ended
Twelve Months Ended
 
May 28, 2016
May 30, 2015
May 28, 2016
May 30, 2015*
Beginning of Period
30

34

33

39

Studio Openings
1

1

2

4

Studio Closings
(2
)
(2
)
(6
)
(10
)
End of Period
29

33

29

33

 
 
 
 
 
 
Studio Selling Square Footage
 
Three Months Ended
Twelve Months Ended
 
May 28, 2016
May 30, 2015
May 28, 2016
May 30, 2015*
Beginning of Period
251,795

244,598

248,440

235,466

Studio Openings
4,050

13,790

19,165

50,776

Studio Expansions
—

—

3,906

2,681

Studio Closings
(9,364
)
(9,948
)
(25,030
)
(40,483
)
End of Period
246,481

248,440

246,481

248,440

 
 
 
 
 
 
Design Within Reach Metrics
 
Three Months Ended
Twelve Months Ended
 
May 28, 2016
May 30, 2015
May 28, 2016
May 30, 2015*
Average Studio Square Footage
249,138

246,519

247,461

241,953

Annualized Net Sales per Square Foot
$
709

$
765

$
655

$
730

DWR Comparable Brand Sales **
0.6
%
16.4
%
0.5
%
11.2
%

*Fiscal year 2015 figures are presented on a pro forma basis and represent DWR measures as of the beginning of the fiscal period

** DWR comparable brand sales reflects the year-over-year change in net sales across the multiple channels that DWR serves, including studios, outlets, contract, catalog, phone and e-commerce.

Note: Consumer segment sales also include sales through Herman Miller e-commerce and wholesale channels.






Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
(Unaudited) ($ in millions except per share data and square footage metrics)

G. Sales and Earnings Guidance - Upcoming Quarter
 
Company Guidance
 
 
Q1 Fiscal 2017
Net Sales
 
$600 million to $620 million
Gross Margin %
 
38% to 39%
Operating Expenses
 
$174 million to $177 million
Effective Tax Rate
 
32% to 33%
Earnings Per Share, Diluted
 
$0.60 to $0.64





Herman Miller Inc. Supplemental Financial Data
Three and Twelve Months Ended May 28, 2016
($ in millions except per share data)






Forward Looking Statements
This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the office furniture industry, the economy, and the company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements.These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. These risks include, without limitation, the success of our growth strategy, employment and general economic conditions, the pace of economic recovery in the U.S and in our International markets, the increase in white-collar employment, the willingness of customers to undertake capital expenditures, the types of products purchased by customers, competitive-pricing pressures, the availability and pricing of raw materials, our reliance on a limited number of suppliers, our ability to expand globally given the risks associated with regulatory and legal compliance challenges and accompanying currency fluctuations, the ability to increase prices to absorb the additional costs of raw materials, the financial strength of our dealers and the financial strength of our customers, our ability to locate new DWR studios, negotiate favorable lease terms for new and existing locations and the implementation of our studio portfolio transformation, our ability to attract and retain key executives and other qualified employees, our ability to continue to make product innovations, the success of newly-introduced products, our ability to serve all of our markets, possible acquisitions, divestitures or alliances, the pace and level of government procurement, the outcome of pending litigation or governmental audits or investigations, political risk in the markets we serve, and other risks identified in our filings with the Securities and Exchange Commission.Therefore, actual results and outcomes may materially differ from what we express or forecast. Furthermore, Herman Miller, Inc., undertakes no obligation to update, amend or clarify forward-looking statements.