Herman Miller, Inc., Reports Fourth Quarter and Fiscal Year Results, Healthcare Acquisition,...

Herman Miller, Inc., Reports Fourth Quarter and Fiscal Year Results,
Healthcare Acquisition, and Changes to Capital Structure

Webcast to be held Thursday, June 25, 2009, at 9:30 AM EDT

ZEELAND, Mich., June 24 /PRNewswire-FirstCall/ -- Herman Miller, Inc.,
(Nasdaq: MLHR) today announced results for its fourth quarter and fiscal year
ended May 30, 2009, as well as additional actions to strategically grow its
presence in the healthcare market and to further strengthen its balance sheet.
The announcements include:

-- Q4 results of $319.9 million in consolidated net sales, reflecting a
decline of 38.4% from the same period last year and 9.7% from the
prior
quarter. Excluding restructuring charges, the adjusted operating
income
was 5.9% of sales and adjusted earnings per share were equal to $0.20
per share. Including restructuring charges of $4.6 million incurred
during the quarter, earnings per share were $0.14 per share compared
to
$0.71 per share during the same period last year. The company also
generated $27.3 million in cash flow from operations for the quarter,
further strengthening its cash balance to $192.9 million.

-- Fiscal Year 2009 results of $1,630.0 million in consolidated net
sales,
reflecting a decline of 19.0% from the prior year. Excluding
restructuring charges, the adjusted operating income was 9.3% of sales
and adjusted earnings per share were equal to $1.59 per share.
Including
restructuring charges of $28.4 million incurred during the year,
earnings per share were $1.25 per share compared to $2.56 per share
during the prior year.

-- The acquisition of Nemschoff, Inc. to expand its product offerings and
competitive position in the Healthcare Furnishings sector. Nemschoff
is
a manufacturer of market leading, design-driven solutions for patient
room furnishings. Nemschoff generated revenues of more than $90
million
in 2008. Additional details of the acquisition are contained in a
separate release and 8K filing.

-- A Tender Offer to retire up to $75 million aggregate principal amount
of
its outstanding 7.125% Notes due 2011, in accordance with the modified
Dutch Auction procedures set forth in the Offer to Purchase, dated
June
24, 2009, and outlined in a separate release. The tender offer
commenced
today and will expire on July 22, 2009.

-- Amendments to its Unsecured Revolving Credit Facility to provide
increased financial flexibility to allow the company to navigate
through
challenging market conditions while also enabling continued pursuit of
its strategic initiatives. Details of the amended debt agreement will
be
reported in a Form 8K filing with the Securities and Exchange
Commission. The significant changes include an increase in the
leverage
coverage to 3.5 times debt to EBITDA and a reduction in the size of
the
revolver to $150 million.

Brian Walker, Chief Executive Officer, stated, "Our results for the quarter
demonstrate our resolve to maintain profitability and a strong financial
position even in the face of challenging global market conditions and a
significant decline in revenues. The cost structure changes we have made are
not only allowing us to effectively manage through the current business
environment, they are also providing us the ability to aggressively grow into
the new and emerging markets we have previously identified. Earlier in the
quarter we announced the strategic alliance between our Convia business and
Legrand, in our ongoing drive to develop comprehensive energy management
solutions for commercial buildings. Today we are excited to announce the
addition of Nemschoff to Herman Miller Healthcare. Nemschoff's strong brand
and reputation in the A&D community for innovative patient care solutions
allows us to accelerate our healthcare strategy through the expansion of our
product portfolio."

FINANCIAL HIGHLIGHTS (Dollars in millions, except per share data)

Three Months Ended Fiscal Year Ended
------------------ -----------------
Percent Percent
5/30/09 5/31/08 Change 5/30/09 5/31/08 Change
------- ------- ------ ------- ------- -------
Net Sales $319.9 $519.1 (38.4%) $1,630.0 $2,012.1 (19.0%)
Gross Margin % 32.5% 34.9% 32.4% 34.7%
Operating
Expenses 85.0 115.0 (26.1%) 376.5 447.0 (15.8%)
Restructuring
Expense 4.6 0.0 n/a 28.4 5.1 456.9%
Operating
Earnings % 4.5% 12.7% 7.5% 12.3%
Adjusted
Operating
Earnings %* 5.9% 12.7% 9.3% 12.5%

Net Earnings 7.2 39.5 (81.8%) 68.0 152.3 (55.4%)
Earnings per
share -
diluted $0.14 $0.71 (80.3%) $1.25 $2.56 (51.2%)
Adjusted
Earnings per
Share -
diluted* $0.20 $0.71 (71.8%) $1.59 $2.61 (39.1%)
Orders 324.1 498.0 (34.9%) 1,564.7 2,008.5 (22.1%)

*These are Non-GAAP measurements, see "Reconciliation of Non-GAAP
Financial Measures" below.

Fourth Quarter 2009 Financial Results

North American sales were $268.3 million, a 35.1% decrease from the prior
year, while non-North American sales for the quarter were $44.1 million, a
53.4% decline from a year ago. The impact of foreign currency rates reduced
sales by $9.5 million for the quarter. Order rates while significantly lower
than the prior year, were stable through the quarter and in line with the
company's projections. Orders for the quarter were $324.1 million, a decrease
of 34.9% from a year ago, with North American orders declining 33.4% and
non-North American orders down 45.4% over the prior year. The impact of
foreign currency rates decreased orders by $11.0 million for the quarter. The
ending backlog of $207.8 million is a 27.4% decrease from the prior year
level.

Gross margin for the quarter decreased to 32.5% of sales from 34.9% in the
prior year period, although an improvement of 260 basis points from 29.9% in
the prior quarter. On a year-over-year basis, the benefits from lower
commodity prices and reduced overhead spending were more than offset by the
impact of lower volumes than in the prior year.

Operating expenses of $85.0 million declined by $30 million, or 26.1%, when
compared to the same period last year. This improvement is attributed to the
cost reduction activities taken by the company earlier in the year, and the
continuing focus on expense management. Sequentially, operating expenses were
relatively flat with the prior quarter.

Earnings per share were $0.14, or $0.20 on an adjusted basis. The effective
tax rate for the quarter was 1.3% primarily as a result of the utilization of
the foreign tax credit on the repatriation of $8.0 million in cash.

"Business levels this quarter reflect the economic slow down facing most
industries today," said Greg Bylsma, Chief Financial Officer. "Although on a
positive note, sequentially we did experience an increase in orders of almost
16% over the third quarter. In addition, our operating results demonstrate the
speed with which we took action to maintain a solid level of performance and
achieve an adjusted operating income of 5.9% of sales. The rate of demand
decline has clearly slowed--and there are signs demand has stabilized. We also
expect to see continued benefit from the additional cost reduction actions
announced this quarter."

The company's cash position at the end of the quarter was $192.9 million. Cash
flow from operations for the quarter totaled $27.3 million compared to $90.4
million for the same period last year. The year-to-year change in operating
cash flow was primarily due to lower net income in the current year. Capital
spending for the quarter was $5.0 million compared to $12.3 million for the
same period last year.

Mr. Bylsma added, "The capital structure changes we just announced reflect our
pro-active approach to preserving balance sheet flexibility. It's a prudent
and forward looking step, not compelled by a current financial need, and will
provide us with more runway in case the recession is more prolonged than
anticipated. This will also ensure we continue to have the flexibility to do
strategic acquisitions and not be reliant on the often short credit window
openings reflective of the choppy market we find ourselves in today."

Fiscal 2009 Financial Results

Looking back on the full year, sales declined 19.0% primarily in the second
half of the year due to the general economic climate. Fiscal year 2009 sales
totaled $1,630.0 million. Swift actions to realign the company's cost
structure resulted in adjusted operating income of 9.3% of sales for the year.
A consolidated 31.4% income tax rate and a lower share count resulted in
adjusted earnings per share of $1.59, a decline of 39.1% from the prior year.

Walker concluded, "We've just completed one of the most challenging years in
Herman Miller's history. The economy had an adverse impact on our top-line,
but the employee-owners of Herman Miller responded in exemplary form by
implementing adjustments to our cost structure and to our capital structure -
changes that allowed us to weather the storm and position Herman Miller for
future success. We know the current year will be just as difficult, but our
new additions of the Legrand alliance, the Nemschoff acquisition, and a long
list of new products that were launched at NeoCon last week have our team
optimistic and focused on our future."

The company announced a live webcast to discuss the results of the fiscal 2009
fourth quarter on Thursday, June 25, 2009, at 9:30 a.m. EDT. To ensure your
access to the webcast, you should allow extra time to visit our website at
www.hermanmiller.com to download the streaming software necessary to
participate. An online archive of the presentation will be available on the
website later that day.

Reconciliation of Non-GAAP Financial Measures

This release contains Adjusted Earnings Per Share and Adjusted Operating
Earnings measures, which are both Non-GAAP financial measures. Adjusted
Earnings Per Share and Adjusted Operating Earnings are calculated by excluding
from Earnings Per Share and Operating Earnings items that we believe to be
infrequent or not indicative of our operating performance. For the period
covered by this release such items consist of expenses associated with
restructuring actions taken to adjust our cost structure to the current
business climate. We present Adjusted Earnings Per Share and Adjusted
Operating Earnings because we consider them to be important supplemental
measures of our performance and believe them to be useful to show ongoing
results from operations distinct from items that are infrequent or not
indicative of our operating performance.

Adjusted Earnings Per Share and Adjusted Operating Earnings are not
measurements of our financial performance under GAAP and should not be
considered as an alternative to Earnings Per Share or Operating Earnings under
GAAP. Adjusted Earnings Per Share and Adjusted Operating Earnings 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. In
addition, in evaluating Adjusted Earnings Per Share and Adjusted Operating
Earnings, you should be aware that in the future we may incur expenses similar
to the adjustments in this presentation. Our presentation of Adjusted Earnings
Per Share and Adjusted Operating Earnings should not be construed as an
inference 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 and using Adjusted Earnings Per Share and Adjusted Operating
Earnings only as a supplement.

The following two tables reconcile Adjusted Earnings Per Share to Earnings Per
Share for the periods indicated.

Three Months Ended
------------------
5/30/09 5/31/08
------- -------
Earnings per Share - Diluted $0.14 $0.71
Add back: Restructuring charges 4.6 0.0
Adjusted Earnings per Share -
Diluted $0.20 $0.71

Fiscal Year Ended
-----------------
5/30/09 5/31/08
------- -------
Earnings per Share - Diluted $1.25 $2.56
Add back: Restructuring charges 28.4 5.1
Adjusted Earnings per Share -
Diluted $1.59 $2.61

The following two tables reconcile Adjusted Operating Earnings to
Operating Earnings for the periods indicated.

Three Months Ended
------------------
5/30/09 5/31/08
------- -------
Operating Earnings ($mm) $14.4 $66.0
Add back: Restructuring charges 4.6 0.0
Adjusted Operating Earnings $19.0 $66.0

Fiscal Year Ended
-----------------
5/30/09 5/31/08
------- -------
Operating Earnings ($mm) $122.8 $246.6
Add back: Restructuring charges 28.4 5.1
Adjusted Operating Earnings $151.2 $251.7

About Herman Miller

Herman Miller works for a better world around you - with inventive designs,
technologies and related services that improve the human experience wherever
people work, heal, learn, and live. Its curiosity, ingenuity, and design
excellence create award-winning products and services, resulting in more than
$1.6 billion in revenue in fiscal 2009. Innovative business practices and a
commitment to social responsibility have also established Herman Miller as a
recognized global company. In 2009, Herman Miller was again cited by FORTUNE
as both the "Most Admired" in its industry and among the "100 Best Companies
to Work For" in America, while FastCompany named Herman Miller among the
innovative "Companies to Watch." Herman Miller trades on the NASDAQ Global
Select Market under the symbol MLHR.

This press release 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,
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, 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, the mix of our products
purchased by customers, 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
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."

Financial highlights for the quarter ended May 30, 2009, follow:

Herman Miller, Inc.

Condensed Consolidated Statements of Operations
(Unaudited) (Dollars in millions, except per share data)

Three Months Ended
------------------
5/30/09 % 5/31/08 %
--------------------- --------------------
Net Sales $319.9 100.0% $519.1 100.0%
Cost of Goods
Sold 215.9 67.5% 338.1 65.1%
----- -----
Gross Margin 104.0 32.5% 181.0 34.9%
Operating
Expenses 85.0 26.6% 115.0 22.2%
Restructuring
Expense 4.6 1.4% 0.0 0.0%
--- ---
Operating
Earnings 14.4 4.5% 66.0 12.7%
Other Expense, net 7.1 2.2% 5.1 1.0%
--- ---
Earnings
Before Taxes 7.3 2.3% 60.9 11.7%
Income Taxes 0.2 0.1% 21.4 4.1%
--- ----
Earnings Before
Minority Interest 7.1 2.2% 39.5 7.6%
Minority Interest,
Net of Income
Taxes (0.1) 0.0% 0.0 0.0%
----- ---
Net Earnings $7.2 2.3% $39.5 7.6%
==== =====
Earnings Per
Share - Basic $0.14 $0.71
Weighted
Average
Basic Common
Shares 53,669,728 55,743,030
Earnings Per
Share -
Diluted $0.14 $0.71
Weighted
Average Diluted
Common
Shares 53,945,214 56,124,019

Herman Miller, Inc.

Condensed Consolidated Statements of Operations
(Unaudited) (Dollars in millions, except per share data)

Fiscal Year Ended
5/30/09 % 5/31/08 %
---------------------- ---------------------
Net Sales $1,630.0 100.0% $2,012.1 100.0%
Cost of
Goods Sold 1,102.3 67.6% 1,313.4 65.3%
------- -------
Gross Margin 527.7 32.4% 698.7 34.7%
Operating Expenses 376.5 23.1% 447.0 22.2%
Restructuring Expense 28.4 1.7% 5.1 0.3%
---- ---
Operating Earnings 122.8 7.5% 246.6 12.3%
Other Expense, net 23.9 1.5% 16.2 0.8%
---- ----
Earnings Before Taxes 98.9 6.1% 230.4 11.5%
Income Taxes 31.0 1.9% 78.2 3.9%
---- ----
Earnings Before
Minority Interest 67.9 4.2% 152.2 7.6%
Minority Interest,
Net of Income Taxes (0.1) 0.0% (0.1) 0.0%
----- -----
Net Earnings $68.0 4.2% $152.3 7.6%
===== ======
Earnings Per
Share - Basic $1.26 $2.58
Weighted Average
Basic Common
Shares 54,138,570 59,109,284
Earnings Per
Share - Diluted $1.25 $2.56
Weighted Average
Diluted Common
Shares 54,535,491 59,584,916

Herman Miller, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited) (Dollars in millions)

Fiscal Year Ended
-----------------
5/30/09 5/31/08
------- -------

Net Earnings $68.0 $152.3
===== ======
Cash Flows provided by Operating
Activities 91.7 213.6
Cash Flows used for Investing Activities (29.5) (51.0)
Cash Flows used for Financing Activities (16.5) (86.5)
Effect of Exchange Rates (8.2) 2.9
----- ---
Net Increase in Cash 37.5 79.0
Cash, Beginning of Year 155.4 76.4
----- ----
Cash, End of Period $192.9 $155.4
====== ======

Herman Miller, Inc.

Condensed Consolidated Balance Sheets
(Unaudited) (Dollars in millions)

5/30/09 5/31/08
------- -------
Assets
Current assets
Cash and equivalents $192.9 $155.4
Short-term investments 11.3 15.7
Accounts receivable (net) 148.9 209.0
Inventories (net) 37.3 55.1
Prepaid expenses and other 60.5 58.0
---- ----
Totals 450.9 493.2
Net property and equipment 179.2 196.3
Other assets 137.2 93.7
----- ----
Total Assets $767.3 $783.2
====== ======
Liabilities and Shareholders' Equity
Current liabilities
Unfunded checks 3.9 8.5
Accounts payable 79.1 117.9
Accrued liabilities 125.2 184.1
----- -----
Totals 208.2 310.5
Long-term debt 377.4 375.5
Other noncurrent liabilities 173.7 73.8
----- ----
Total Liabilities 759.3 759.8
Shareholders' equity 8.0 23.4
--- ----
Total Liabilities and Shareholders'
Equity $767.3 $783.2
====== ======

SOURCE Herman Miller, Inc.

Joe Nowicki, +1-616-654-5222, joe_nowicki@hermanmiller.com; Greg Bylsma,
+1-616-654-7578, greg_bylsma@hermanmiller.com; Media: Mark Schurman,
+1-616-654-5498, mark_schurman@hermanmiller.com, all of Herman Miller