When the economy grows businesses expand. For most businesses that means more infrastructure, more office space, and more office furniture. Even a company reorganizing is changing more than just the organizational chart. They're changing the company's look and the company's layout. That means new, more and different furniture. And that's where companies like Herman Miller excel.
Herman Miller, Inc. engages in the research, design, manufacture, and distribution of office furniture systems, seating products, other freestanding furniture elements, textiles, and related services in the United States and internationally. It provides modular systems under the Canvas Office Landscape, Locale, Metaform Portfolio, Public Office Landscape, Action Office, Ethospace, and Resolve names; seating products under the Embody, Aeron, Mirra2, Setu, Sayl, Celle, Equa, and Ergon names; and storage products under the Meridian and Tu names. The company also offers wooden casegoods under the Geiger name; freestanding furniture products under the Abak, Intent, Sense, and Envelop names; and healthcare products under the Palisade, Compass, Nala, and Nemschoff names, as well as provides Thrive portfolio of ergonomic solutions and textiles. Its products are used in institutional environments, including offices and related conference, lobby, and lounge areas, as well as general public areas, such as transportation terminals; health/science environments comprising hospitals, clinics, and other healthcare facilities; industrial and educational settings; and residential and other environments. The company markets its products through its sales staff, own dealer network, independent dealers and retailers, and independent contract office furniture dealers, as well as through Internet. Herman Miller, Inc. was founded in 1905 and is headquartered in Zeeland, Michigan.
(Summary) (Company) (Chart)
| 17 April 2016 Price $30.88 1yr Target $40.00 Analysts 1 Dividend $0.59 Payout Ratio 29.79% 1yr Cap Gain 29.53% Yield 1.91% 1yr Tot Return 31.44% P/E 15.57 PEG 0.92 Beta 1.46 | EPS (ttm) $1.98 EPS next yr $2.29 EPS next 5yr 17.00% 1yr Price Support $38.93 Market Cap $1.83 Bil Revenues $2.23 Bil Earnings $119.50 Mil Profit Margin 5.53% Quick Ratio 0.80 Current Ratio 1.20 Debt/Equity 0.00 | 1yr RevGR 13.81% 3yr RevGR 7.42% 5yr RevGR 10.19% 1yr EarnGR --- 3yr EarnGR 7.80% 5yr EarnGR 30.37% 1yr DivGR 5.66% 3yr DivGR 84.17% 5yr DivGR 44.79% ROA 10.00% ROE 26.00% |
Company Operations
The company's principal business consists of the research, design, manufacture, selling, and distribution of office furniture systems, seating products, other freestanding furniture elements, textiles, and related services. Most of these systems and products are designed to be used together.
The company's ingenuity and design excellence creates award-winning products and services, which has made them a leader in the design and development of furniture, furniture systems, and textiles. The company has created innovative designs associated with it modular furniture systems under the names Canvas Office Landscape, Locale, Metaform Portfolio, Public Office Landscape, Layout Studio, Action Office, Ethospace, Arras, and Resolve. The company also offers a broad array of seating designs under the names Embody, Aeron, Mirra2, Setu, Sayl, Celle, Equa, and Ergon office chairs, storage designs under the names Meridian and Tu, wooden caseloads under the names Geiger, freestanding furniture under the names Abak, Intent, Sense and Envelop, and healthcare products under the names Palisade, Compass, Nala, and Nemschoff.
The company's products are marketed worldwide by its own sales staff, independent dealers and retailers, its owned dealer network, and via its e-commerce website. Salespeople work with dealers, the architecture and design community, and directly with end-users. Independent dealerships concentrate on the sale of Herman Miller products. It is estimated that approximately 74 percent of the company's sales in the fiscal year ended May 30, 2015, were made to or through independent dealers. The remaining sales were made directly to end-users, including federal, state, and local governments, and several major corporations, by the company's own sales staff, its owned dealer network, DWR retail studios or independent retailers.
The company is a recognized leader within its industry for the use, development, and integration of customer-centered technologies that enhance the reliability, speed, and efficiency of our customers' operations. This includes proprietary sales tools, interior design and product specification software; order entry and manufacturing scheduling and production systems; and direct connectivity to the company's suppliers.
The company's furniture systems, seating, freestanding furniture, storage, casegood and textile products, and related services are used in (1) institutional environments including offices and related conference, lobby, and lounge areas, and general public areas including transportation terminals; (2) health/science environments including hospitals, clinics, and other healthcare facilities; (3) industrial and educational settings; and (4) residential and other environments.
Recent Developments
In July 2014, Herman Miller acquired Design Within Reach, Inc. (DWR) and formed a new consumer-focused business unit comprised of DWR and the company's existing eCommerce and retail wholesale business. This acquisition represents an important step in the company's strategy to extend the reach of its brand into the consumer and design trade markets. It also represents a step toward enhancing the awareness and connection of the Herman Miller brand to the users and specifiers of products sold within the company's core contract furniture business (an ambition the company refers to as shifting from an “Industry” to “Industry+Consumer” focus). DWR brings with it a powerful multi-channel distribution structure that integrates brick and mortar retail studios (33 locations as of May 30, 2015), a successful direct-mail catalog program, an eCommerce platform, and a focused business-to-business selling model aimed at serving contract customers in work and hospitality environments.
In July 2014, Herman Miller acquired Design Within Reach, Inc. (DWR) and formed a new consumer-focused business unit comprised of DWR and the company's existing eCommerce and retail wholesale business. This acquisition represents an important step in the company's strategy to extend the reach of its brand into the consumer and design trade markets. It also represents a step toward enhancing the awareness and connection of the Herman Miller brand to the users and specifiers of products sold within the company's core contract furniture business (an ambition the company refers to as shifting from an “Industry” to “Industry+Consumer” focus). DWR brings with it a powerful multi-channel distribution structure that integrates brick and mortar retail studios (33 locations as of May 30, 2015), a successful direct-mail catalog program, an eCommerce platform, and a focused business-to-business selling model aimed at serving contract customers in work and hospitality environments.
My Perspective
This entire industry of business furnishing is directly related to the healthiness of the economy and the overall business community. With the economy doing very well recently, this company, along with its competition, are doing very well. They are also estimated to continue to do well and that's why I'm interested in accumulating a position in this industry.
I'm already a shareholder of Steelcase Inc and I have been very pleased with the acquisition. Now I'm also interested in Steelcase's competition and that includes Herman Miller. Other significant competitors include Haworth, HNI Corporation, Kimball International, and Knoll. Of those I've already looked at HNI Corp. Another I'm interested in researching in the near future is Knoll Inc.
I expect to start a position in one or more of these companies in the near future. Once I lay them all out I'll compare their fundamentals and technicals to see which additional companies will make it into my portfolio. Based on the numbers above, Herman Miller has a great chance of being one of those companies.
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