Millerknoll, Inc. · NASDAQ:MLKN
Millerknoll — Miller Herman — Raymond James 36th Annual Institutional Investors Conference 2015
31 slides from Millerknoll's conference presentation, Mar 2, 2015
Slide 1: Raymond James 36th Annual Institutional Investors Conference
Herman Miller, Inc. NASDAQ: MLHR Raymond James 36th Annual Institutional Investors Conference March 4, 2015 1
Slide 2: Forward Looking Statements
Forward Looking Statements This information 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, estimate
Slide 3: Presentation Overview
Presentation Overview Our Strategic Ambition Segment Performance Near-term Focus
Slide 4: Our Ambition
Our Ambition 4 Work Home Learning Healing
Slide 5: Focus on Expanding Market Opportunity
Focus on Expanding Market Opportunity Priorities to Drive Shareholder Value Source: (1) The Business and Institutional Furniture Manufacturers Association; (2) 2013 CSIL Market Research; (3) Company estimate (4) ACT Financial Survey (5) Parthenon Group 5 N.A. Contract European Contract Emerging Mark
Slide 6: Global R+D Capability and Expanded Distribution
6 Global R+D Capability Product Innovation Regional Manufacturing Footprint Expanded Distribution EMEA, Latin America, Asia-Pacific (ELA) Furniture Solutions
Slide 7: EMEA, Latin America, Asia-Pacific (ELA) Furniture Solutions: Growth and Profitability
EMEA, Latin America, Asia-Pacific (ELA) Furniture Solutions 7 Growth and Profitability FY10–FY14 Revenue EBITDA(1) (1) Represents a Non-GAAP Measure, see appendix for reconciliation
Slide 8: Specialty
Specialty 8 Geiger Collection Maharam
Slide 9: Specialty Growth and Profitability FY10-FY14
Specialty 9 Growth and Profitability FY10–FY14 Revenue EBITDA(1) (1) Represents a Non-GAAP Measure, see appendix for reconciliation
Slide 10: Consumer Retail Stores and eCommerce
Consumer 10 Retail Stores and eCommerce 10
Slide 11: Consumer Growth and Profitability FY10-FY14
Consumer 11 Growth and Profitability FY10–FY14 Revenue EBITDA(1) (1) Represents a Non-GAAP Measure, see appendix for reconciliation
Slide 12: Design Within Reach Studio Transformation and Exclusive Products
Design Within Reach 12 Studio Transformation and Exclusive Products
Slide 13: Consumer Design Within Reach Value Drivers 2014-2017
Consumer 13 Design Within Reach Value Drivers 2014–2017 Studio Sales Number of Studios Sq Footage Sales/Sq Foot Mix Exclusive Product Mix 75% 100% FY14 TTM Jan 2015 50% 60% 62% (1) Represents goal outlined by the Company in July 2014 38 37 32 FY17 Plan (1) 228K 244K 260K FY17 Plan (1) $660 $727 $790
Slide 14: North American Furniture Solutions Areas of Focus
North American Furniture Solutions Areas of Focus Solution Based Selling Problem Solving Innovation Targeted Acquisitions Branding and Marketing 14
Slide 15: North American Furniture Solutions Growth and Profitability
North American Furniture Solutions 15 Growth and Profitability FY10–FY14 Revenue EBITDA(1) (1) Represents a Non-GAAP Measure, see appendix for reconciliation
Slide 16: North American Furniture Solutions Order Trends
North American Furniture Solutions Order Trends North America Order Trends BIFMA Order Growth % North America Segment Organic Order Growth % -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 16
Slide 17: Preliminary Q3 Results and Q4 Guidance
Herman Miller, Inc. Preliminary Q3 results and Q4 guidance 17
Slide 18: Operating Performance Highlights and Return Metrics
(1) Represents a Non-GAAP Measure, see Appendix for reconciliation; (2) Represents FY15 Q2 year to date 18 FY10 FY11 FY12 FY13 FY14 FY15 (2) Net Sales ($ millions) Adj Operating Margin (1) (% Net Sales) Operating Performance Highlights 20% 16% Total Shareholder Return Return on Invested Capital Retu
Slide 19: Q + A
19 Q + A
Slide 20: Slide 20
Slide 21: Appendix
Appendix 21
Slide 22: NA Contract Industry Drivers
Appendix NA Contract Industry Drivers 22 Category 2015 2016 Nonresidential Total +7.7% +8.2% Commercial +11.8% +10.4% Office +12.9% +12.0% 2 0 1 5 F o r e c a s tLeading economic indicators include: Corporate profitability Service sector employment levels Nonresidential construction activity Office
Slide 23: Debt and Dividend Trends
Debt and Dividend Trends (1) Defined as interest bearing debt and GAAP unfunded pension liabilities ; (2) Represents the most recently announced quarterly dividend rate annualized 23 Total Debt (1) ($ millions) Dividends Paid (% Net Sales) FY11 FY12 FY13 FY14 Q2 FY15 FY11 FY12 FY13 FY14 Current Rate
Slide 24: Recent Operating Performance
Appendix Recent Operating Performance Q2 net sales increased 20% from the prior year; orders were up 14%; on an organic basis, sales and orders increased 9% and 3%, respectively, over prior year Adjusted gross margin in Q2 improved 120 bps from the prior year and 20 bps sequentially from Q1 due prim
Slide 25: Debt + Liquidity Profile
Appendix Debt + Liquidity Profile Q2 ending cash and equivalents totaled $64.7 million, down $37 million from Q4 2014 due to the use of cash to fund a portion of the DWR aquisition. LT Debt maturity schedule: – PPN ($150M) due 2018 – PPN ($50M) due 2021 CAPEX totaled $18 million in Q2 and $27 millio
Slide 26: Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures This presentation contains Adjusted Operating Margin, Adjusted EBITDA, Adjusted EBITDA ratios, Adjusted Operating Expenses, Organic Sales and Order Growth and Adjusted Earnings per Share, all of which constitute non-GAAP financial measures. Each of these
Slide 27: Table I: Adjusted Operating Earnings %
Appendix Table I Herman Miller, Inc. Reconciliation of Non-GAAP Measures Adjusted Operating Earnings % ($ millions; percents represent % of net sales); (unaudited) FY10 FY11 FY12 FY13 FY14 Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 YTD FY15 Net Sales 1,318.8$ 1,649.2$ 1,724.1$ 1,774.9$ 1,882.0$ 455.9$ 487.5$ 5
Slide 28: Table II: Adjusted EBITDA and Adjusted EBITDA Ratios - Bank
Appendix Table II Herman Miller, Inc. Reconciliation of Non-GAAP Measures Adjusted EBITDA and Adjusted EBITDA Ratios - Bank ($ in millions); (unaudited) Net Sales Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Earnings Before Income Taxes (EBT) (34.5)$ (43.4)$ (40.5)$ 130.9$ Add: Depreciation 37.4 37.8 38.7 41.1 A
Slide 29: Table III: Operating Expenses - Adjusted; Table IV: Adjusted EPS
Appendix Table III Herman Miller, Inc. Reconciliation of Non-GAAP Measures Operating Expenses - Adjusted ($ millions); (unaudited) Q3 FY14 Q4 FY14 Q1 FY15 Q2 FY15 Operating Expenses (GAAP) 127.7$ 131.5$ 143.4$ 159.0$ Less: Acquisition-Related Expenses (2.0)$ (0.2)$ Plus: Contingent Consideration Red
Slide 30: Table V: Adjusted EBITDA by Reportable Segment
Appendix Table V Herman Miller, Inc. Reconciliation of Non-GAAP Measures Adjusted EBITDA by Reportable Segment ($ millions); (unaudited) NA ELA Specialty Consumer Corp. Consol. Segment Operating Earnings 75.8$ (0.2)$ (5.2)$ 10.6$ (27.5)$ 53.5$ Add: Allocated Depreciation & Amortization 33.6 5.9 2.3
Slide 31: Table VI: Organic Sales Growth by Reportable Segment
Appendix Table VI Herman Miller, Inc. Reconciliation of Non-GAAP Measures Organic Sales Growth (Decline) by Reportable Segment ($ millions); (unaudited) 2010 2014 2010 2014 2010 2014 2010 2014 2010 2014 2010 2014 Sales, As Reported 989.7$ 1,216.3$ 222.7$ 392.2$ 57.8$ 205.8$ 48.1$ 67.7$ 0.5$ -$ 1,318
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