Herman Miller Swings To Q2 Loss On Pension Charges

(RTTNews) - Office furniture maker Herman Miller Inc. (MLHR), Wednesday posted a loss for the second quarter, hurt largely by a hefty pension settlement charge. Nevertheless, adjusted earnings for the quarter improved from a year ago, and easily beat estimates, reflecting revenue growth.

Michigan-based Herman Miller reported a second-quarter loss of $80.6 million or $1.37 per share, compared to a profit of $8.4 million or $0.14 per share last year.

The company said it recorded a pre-tax legacy pension expenses of $161.3 million in the quarter.

Adjusted earnings for the quarter improved to $0.42 per share from $0.35 per share last year. On average, four analysts polled by Thomson Reuters expected earnings of $0.40 per share for the quarter. Analysts' estimates typically exclude special items.

Herman Miller's revenues for the three-month period grew 6.5 percent to $470.5 million from $441.8 million last year. Three analysts had a consensus revenue estimate of $466.97 million for the quarter.

North American segment sales, the biggest contributor to revenues, decreased 2.5 percent to $297.1 million. Sales at the non-North American division rose to 11.1 percent to $103.1 million, while specialty and consumer segment sales surged 58.7 percent to $70.3 million.

Chief Executive Brian Walker said, "We are very pleased with our operating results this quarter, particularly given declining federal government demand in the U.S. and mixed economic conditions in other markets around the world. While these areas of challenge have limited our sales growth through the first half of this fiscal year, we remain confident in the long-term outlook of the business."

Gross margin for the period dropped to 25.3 percent from 33.6 percent last year, hurt by legacy pension costs.

Looking forward to the third quarter, Herman Miller expect earnings in the range of $0.30 to $0.36 per share and sales of $445 million to $465 million. Analysts currently estimate earnings of $0.39 per share on revenues of $461.10 million for the quarter.

The company also boosted its quarterly dividend by 12 percent to $0.14 per share, payable in April 2014.

MLHR closed Wednesday's trading at $29.19, up $0.21 or 0.72%, on the Nasdaq.