Herman Miller Inc. has a market cap of $1.53 billion; its shares were traded at around $26.77 with a P/E ratio of 34.7 and P/S ratio of 1.1. The dividend yield of Herman Miller Inc. stocks is 0.3%. Herman Miller Inc. had an annual average earning growth of 23.4% over the past 10 years.MLHR is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Tom Russo of Gardner Russo & Gardner, Richard Aster Jr of Meridian Fund, Columbia Wanger of Columbia Wanger Asset Management.
Highlight of Business Operations:Operating earnings in the quarter were $31.5 million or 7.6% of sales, up $12.8 million from prior year and up $2.3 million sequentially from the prior quarter. Operating earnings for the six months ending November 27, 2010 were $60.7 million, up $27.9 million or 85.1% from prior year. Restructuring expenses were $2.1 million and $2.2 million in the second quarter for fiscal 2011 and 2010, respectively.
Second quarter total operating expenses were $104.3 million, or 25.3 percent of net sales, which is a decrease of 150 basis points, as a percent of net sales, and an increase of $12.2 million from the second quarter of fiscal 2010. Operating expense included $2.1 million of restructuring costs in the second quarter of fiscal 2011, a decrease of $0.1 million from the second quarter of fiscal 2010. Approximately $3.5 million of the increase relates to incremental operating expenses from the consolidation of Colebrook Bosson Saunders (CBS) and Living Edge - a furniture dealer based in Australia. These businesses were acquired by Herman Miller during the fourth quarter of fiscal 2010. Variable selling costs, development and marketing expenses associated with new product launches, and accruals for employee incentives contributed to the year-over-year growth in operating expenses. These expense increases were partially offset in the current quarter by favorable adjustments related to the contingency-based components of the Nemschoff purchase price. See Note 17 to the consolidated financial statements for further information on the Nemschoff contingent consideration. These adjustments reduced operating expenses in the period by $4.4 million. By comparison, the company recorded $0.5 million in unfavorable operating expense related to these purchase price liabilities in the prior year second quarter.
Changes in working capital balances for the quarter drove a source of cash totaling $1.6 million in the second quarter in fiscal 2011. The main factors impacting working capital were an increase in accounts receivable and inventory balances of $28.4 million and $10.6 million, respectively. These amounts were offset by increases in accounts payable, accrued bonus, and other accrued compensation of $18.7 million, $5.3 million, and $10.8 million, respectively. A decrease in prepaid assets of $4.2 million also impacted working capital for the current quarter. Additionally, during the quarter the company contributed $8.9 million in cash to its primary domestic pension plan.
Through the first six months of the year, changes in working capital balances drove a use of cash totaling $14.9 million. The main factors impacting working capital were an increase in accounts receivable and inventory balances of $46.8 million and $19.5 million, respectively. These amounts were partially offset by an increase in accounts payable, accrued bonus, other accrued compensation and accrued income taxes of $26.8 million, $8.9 million, $7.2 million, and $4.9 million, respectively.
The most significant cash outflow for investing activities relates to an investment in capital assets. We purchased $6.4 million in capital assets during the second quarter of fiscal 2011 and $12.2 million year-to-date. This compares to $5.6 million and $11.4 million, respectively in the prior year. At the end of the second quarter 2011, we had outstanding commitments for capital purchases of $5.7 million. We expect that full-year capital purchases to be approximately $30 million to $32 million. This compares to full-year capital spending of $22.3 million in fiscal 2010.
Cash outflows from financing activities were $0.8 million during the second quarter of fiscal 2011 and $2.4 million year-to-date. Cash outflows for dividend payments were $2.5 million or $0.044 per share during the first six months. This compares to $2.4 million in dividend payments in the prior year first six months. In the first quarter of fiscal 2010 the company retired $75 million of our 7.125 percent coupon bonds as part of a tender offer at 6.0 percent above par value.
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