Herman Miller Inc. (MLHR, Financial) released its first-quarter fiscal 2021 results after the closing bell on Sept. 16. Owing to the coronavirus pandemic and the resulting lockdowns, the furniture maker's business operations were significantly impacted in North America, while retail and international segments were on the recovery path thanks to strong demand.
By the numbers
The Zeeland, Michigan-based company recorded an adjusted loss per share of $1.24. That compares with adjusted earnings per share of 84 cents reported in the year-ago quarter. Revenue of $626.8 million plunged 6.6% on a year-over-year basis. Barring the impact of acquisitions and foreign currency translations, net sales dropped 13%.
In North America, revenue amounted to $338.8 million, down from $458.4 million reported last year. In contrast, sales rose to $134.3 million in the retail segment, while the international segment's revenue increased to $153.7 million.
New orders plunged 17.8% to $556 million. The backlog amounted to $400 million, which was flat as compared to the year-ago quarter.
Response to the pandemic
Due to the pandemic, the company struggled to generate revenue during the quarter, although retail and international segments are recovering strongly. As a result, the company had to take few steps to offset the effect of lower demand. Herman Miller temporarily reduced salaries and lowered retirement contributions.
The company claims to have adequate liquidity and is confident that it will be able to navigate through the foreseeable future until the prevailing circumstances improve and recover. At quarter-end, the company had total liquidity (cash and debt) of $562.3 million. Cash generated from operations for the quarter came in at $115.9 million.
To further strengthen its liquidity, the company suspended its share repurchase program. The Board of Directors of the company announced a dividend of $0.1875 per share, which would be payable to shareholders on Jan. 15, 2021.
Herman Miller's Inside Access program
As more people are working from home, demand for home office furnishings and supplies are expected to rise. However, the company is likely to face stiff competition from the current as well as new players in the worldwide home office equipment market. To have an edge over the competition, the company would need to increase its research spending and identity the habits and preferences of the modern residential worker.
To help employees work from home efficiently during the global Covid-19 crisis, the company is expanding its Inside Access program. The program aims to provide home office products to the employees who are working away from office, at a remote place.
Guidance
Herman Miller pulled its financial forecast for the 2021 fiscal year.
Disclosure: I do not hold any positions in the stocks mentioned.
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