herman miller investor relations presentation - q2 fy2017...q1 fy17 q2 fy17 q2 ending cash and...
TRANSCRIPT
Q2 net sales and orders decreased 0.5% and 4.2%, respectively, from the prior year; on an organic basis, sales increased 1.1% and orders decreased 2.7% over prior year
Gross margin in Q2 declined 100 bps from the prior year due to higher commodity costs and discounting levels, offset by operational improvements.
EPS in Q2 totaled $0.53 per share; $0.54 per share on an adjusted basis.
$164 $169 $174 $167
$50
$70
$90
$110
$130
$150
$170
$190
Q3 FY16
Q4 FY16
Q1 FY17
Q2 FY17
$200
$300
$400
$500
$600
$700
Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17
$537$583 $599
$578
$509
$606 $596 $576
Quarterly Net Sales + Orders($ millions)
Quarterly Operating Expenses($ millions)
Net Sales Orders
38.7% 38.7% 38.4% 37.7%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
Gross Margin %Adjusted Operating Income %
Gross Margin and Adjusted Operating Margin(% net sales)
8.3% 8.7% 9.4% 8.8%
Q3 FY16 Q2 FY17Q1 FY17Q4 FY16
Q2 ending cash and equivalents totaled $68 million.
LT Debt maturity schedule:
– PPN ($150M) due 2018– Revolver ($20M) due 2021– PPN ($50M) due 2021
Availability of $372 million on the revolving line of credit at the end of Q2.
CAPEX totaled $25 million in Q2. Expect $85 - $95 million for fiscal 2017.
Q2 dividends paid totaled $10 million and share repurchases of $5 million.
Quarterly Cash Flow from Operations($ millions)
Q3 FY16
Q4 FY16
Q1 FY17
Q2 FY17
$53
$85
$30
$60
$0$10$20$30$40$50$60$70$80$90
Q3 FY16
Q4 FY16
Q1 FY17
Q2 FY17
Rolling 4 Qtr Coverage Ratio(EBITDA(1) to Interest)
Rolling 4 Qtr Leverage Ratio(Debt to EBITDA)(1)
(1) Represents a Non-GAAP Measure, see Appendix for reconciliation.
17.3 18.0 18.3 17.9
0.02.04.06.08.0
10.012.014.016.018.020.0
Bank Covenant > 4.0
0.9 0.8 0.9 0.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0 Bank Covenant < 3.5
Q3 FY16
Q4 FY16
Q1 FY17
Q2 FY17
Q3 Fiscal 2017
Net Sales $520 to $540 million
Gross Margin % 37.0% to 38.0%
Operating Expenses $164 to $168 million
Effective Tax Rate 31% to 33%
Earnings Per Share, Diluted $0.31 to $0.35
Guidance as provided in December 21, 2016 earnings press release:
Adjusted Operating EarningsQ2 FY17
Net Sales 577.5$
Operating Earnings (GAAP) 49.6$ Operating Earnings (%) 8.6%Add: Restructuring and Impairment Expenses 1.0
Adj. Operating Earnings (non-GAAP) 50.6$ Adj. Operating Earnings (%) 8.8%
Adjusted Earnings per ShareQ2 FY17
Earnings per Share - Diluted 0.53$ Add: Restructuring Expenses 0.01$ Adjusted Earnings per Share - Diluted 0.54$
Adjusted EBITDA (Bank) RatiosTrailing 4-Quarter Period EndedQ3 FY16 Q4 FY16 Q1 FY17 Q2 FY17
Earnings Before Income Taxes (EBT) 176.3 196.6 199.1 192.4 Add: Depreciation 45.0 47.0 47.1 47.7 Amortization 6.1 6.0 6.0 6.0 Interest 15.3 15.4 15.2 15.3 Other Adjustments (1) 21.9 11.9 11.4 11.9 Adjusted EBITDA - Bank 264.6$ 276.9$ 278.8$ 273.3$
Total Debt, End of Trailing Period (includes outstanding LC's) 249.6$ 231.2$ 242.8$ 228.5$
Rolling 4-Quarter Debt-to-Adj. EBITDA 0.9 0.8 0.9 0.8
Rolling 4-Quarter Adj. EBITDA-to-Interest 17.3 18.0 18.3 17.9
(1) "Other Adjustments" include, as applicable in the period, charges associated w ith business restructuring actions, non-cash stock-based compensation, as described in lending agreements.