DWR Results of Operations | |||
(In millions) | July 28, 2014 - May 30, 2015 | ||
DWR Net sales | $ | 217.0 | |
Intercompany sales elimination | (22.7 | ) | |
Net sales impact to Herman Miller, Inc. | $ | 194.3 |
(In millions) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
Balance, June 1, 2013 | 227.0 | 62.3 | 289.3 | |||||||||
Foreign currency translation adjustments | 0.6 | — | 0.6 | |||||||||
Sale of owned dealers | (0.4 | ) | — | (0.4 | ) | |||||||
China manufacturing and distribution acquisition | 1.0 | — | 1.0 | |||||||||
Impairment charges | — | (21.4 | ) | (21.4 | ) | |||||||
Balance, May 31, 2014 | $ | 228.2 | $ | 40.9 | $ | 269.1 | ||||||
Foreign currency translation adjustments | (0.7 | ) | — | (0.7 | ) | |||||||
DWR acquisition | 75.6 | 55.1 | 130.7 | |||||||||
Impairment charges | — | (10.8 | ) | (10.8 | ) | |||||||
Balance, May 30, 2015 | 303.1 | 85.2 | 388.3 |
2015 | 2014 | 2013 | |||||||
Options | — | — | — | ||||||
Shares of common stock | 13,752 | 12,358 | 15,746 | ||||||
Shares through the deferred compensation program | — | 2,317 | 2,779 |
Asset Category | Targeted Asset Allocation Percentage | Percentage of Plan Assets at Year End | ||||||||||
2015 | 2014 | |||||||||||
Equities | — | 2 | — | |||||||||
Fixed Income | 20 | 23 | 26 | |||||||||
Common collective trusts | 80 | 75 | 74 | |||||||||
Total | 100 | 100 | ||||||||||
(In millions) | International Plan as of May 31, 2015 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 1.8 | $ | 1.8 | ||||||||
Foreign government obligations | — | 21.3 | 21.3 | |||||||||
Common collective trusts-balanced | — | 68.9 | 68.9 | |||||||||
Total | $ | 1.8 | $ | 90.2 | $ | 92.0 | ||||||
(In millions) | International Plan as of May 31, 2014 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | ||||||
Common collective trusts-balanced | — | 70.1 | 70.1 | |||||||||
Foreign government obligations | 24.5 | 24.5 | ||||||||||
Total | $ | 0.2 | $ | 94.6 | $ | 94.8 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
(In millions) | Domestic | International | Domestic | International | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 1.1 | $ | 105.4 | $ | 314.7 | $ | 91.2 | $ | 7.5 | $ | 9.0 | |||||||||||
Service cost | — | — | — | — | — | — | |||||||||||||||||
Interest cost | — | 4.3 | 5.2 | 4.2 | 0.2 | 0.3 | |||||||||||||||||
Curtailments | — | — | — | — | — | — | |||||||||||||||||
Plan settlements | — | — | (331.1 | ) | — | — | — | ||||||||||||||||
Foreign exchange impact | — | (9.8 | ) | — | 9.6 | — | — | ||||||||||||||||
Actuarial (gain)/loss | — | 15.0 | 16.8 | 2.3 | 0.8 | (1.0 | ) | ||||||||||||||||
Employee contributions | — | — | — | — | — | — | |||||||||||||||||
Expenses paid | — | — | (0.4 | ) | — | — | — | ||||||||||||||||
Benefits paid | — | (2.9 | ) | (4.1 | ) | (1.9 | ) | (0.8 | ) | (0.8 | ) | ||||||||||||
Benefit obligation at end of year | $ | 1.1 | $ | 112.0 | $ | 1.1 | $ | 105.4 | $ | 7.7 | $ | 7.5 | |||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | 94.8 | $ | 290.0 | $ | 84.2 | $ | — | $ | — | |||||||||||
Actual return on plan assets | — | 8.0 | (2.3 | ) | 2.4 | — | — | ||||||||||||||||
Foreign exchange impact | — | (8.5 | ) | — | 8.6 | — | — | ||||||||||||||||
Employer contributions | — | 0.6 | 48.8 | 1.5 | 0.8 | 0.8 | |||||||||||||||||
Employee contributions | — | — | — | — | — | — | |||||||||||||||||
Plan settlements | — | — | (331.1 | ) | — | — | — | ||||||||||||||||
Expenses paid | — | — | (0.4 | ) | — | — | — | ||||||||||||||||
Benefits paid | — | (2.9 | ) | (4.1 | ) | (1.9 | ) | (0.8 | ) | (0.8 | ) | ||||||||||||
Transfers out to 401(k) plan | — | — | (0.9 | ) | — | — | — | ||||||||||||||||
Fair value of plan assets at end of year | $ | — | $ | 92.0 | $ | — | $ | 94.8 | $ | — | $ | — | |||||||||||
Funded status: | |||||||||||||||||||||||
Under funded status at end of year | $ | (1.1 | ) | $ | (20.0 | ) | $ | (1.1 | ) | $ | (10.6 | ) | $ | (7.7 | ) | $ | (7.5 | ) | |||||
Components of the amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Current liabilities | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | $ | — | $ | (0.9 | ) | $ | (0.9 | ) | |||||||
Non-current liabilities | $ | (1.0 | ) | $ | (20.0 | ) | $ | (1.0 | ) | $ | (10.6 | ) | $ | (6.8 | ) | $ | (6.6 | ) | |||||
Components of the amounts recognized in accumulated other comprehensive loss before the effect of income taxes: | |||||||||||||||||||||||
Unrecognized net actuarial loss | $ | 0.3 | $ | 41.6 | $ | 0.4 | $ | 34.3 | $ | 1.1 | $ | 0.3 | |||||||||||
Unrecognized prior service cost (credit) | — | — | — | — | — | — | |||||||||||||||||
Accumulated other comprehensive loss | $ | 0.3 | $ | 41.6 | $ | 0.4 | $ | 34.3 | $ | 1.1 | $ | 0.3 |
(In millions) | Retention Level (per occurrence) | |||
General liability and auto liability/physical damage | $ | 1.00 | ||
Workers' compensation and property | $ | 0.75 |
(In millions) | May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||||
Interest and penalty expense | $ | 0.4 | $ | 0.2 | $ | — | |||||
Liability for interest and penalties | $ | 0.9 | $ | 0.6 |
(In millions) | Retention Level (per occurrence) | |||
General liability and auto liability/physical damage | $ | 1.00 | ||
Workers' compensation and property | $ | 0.75 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Depreciation expense | $ | 44.2 | $ | 37.8 | $ | 34.4 | ||||||
Amortization expense | 5.6 | 4.6 | 3.1 | |||||||||
Provision for losses on accounts receivable and notes receivable | 1.8 | 1.0 | 0.6 | |||||||||
(Gain) Loss on sales of property and dealers | — | (1.7 | ) | 0.8 | ||||||||
Deferred income tax expense (benefit) | (8.8 | ) | (52.8 | ) | (16.6 | ) | ||||||
Pension expense | 0.8 | 115.4 | 31.9 | |||||||||
Restructuring and impairment expenses | 12.7 | 26.5 | 1.2 | |||||||||
Stock-based compensation | 10.0 | 11.0 | 8.1 | |||||||||
Excess tax benefits from stock-based compensation | (0.7 | ) | (1.1 | ) | (0.3 | ) | ||||||
Other changes in long-term liabilities | (1.2 | ) | (8.5 | ) | (9.2 | ) | ||||||
Other | 1.7 | 1.2 | (2.9 | ) | ||||||||
Changes in current assets and liabilities: | ||||||||||||
Decrease (increase) in assets: | ||||||||||||
Accounts receivable | 7.8 | (26.7 | ) | (7.7 | ) | |||||||
Inventories | (9.0 | ) | (2.2 | ) | (4.6 | ) | ||||||
Prepaid expenses and other | (2.5 | ) | (3.2 | ) | 9.3 | |||||||
Increase (decrease) in liabilities: | ||||||||||||
Accounts payable | 1.1 | 2.6 | 6.0 | |||||||||
Accrued liabilities | 6.1 | 8.3 | 14.2 | |||||||||
Total changes in current assets and liabilities | 3.5 | (21.2 | ) | 17.2 | ||||||||
Total adjustments | $ | 69.6 | $ | 112.2 | $ | 68.3 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Accrual balance, beginning | $ | 25.2 | $ | 24.8 | $ | 22.2 | ||||||
Accrual for warranty matters | 25.0 | 20.2 | 23.3 | |||||||||
Settlements | (23.4 | ) | (19.8 | ) | (20.7 | ) | ||||||
Accrual balance, ending | $ | 26.8 | $ | 25.2 | $ | 24.8 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
(In millions) | Domestic | International | Domestic | International | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 1.1 | $ | 105.4 | $ | 314.7 | $ | 91.2 | $ | 7.5 | $ | 9.0 | |||||||||||
Service cost | — | — | — | — | — | — | |||||||||||||||||
Interest cost | — | 4.3 | 5.2 | 4.2 | 0.2 | 0.3 | |||||||||||||||||
Curtailments | — | — | — | — | — | — | |||||||||||||||||
Plan settlements | — | — | (331.1 | ) | — | — | — | ||||||||||||||||
Foreign exchange impact | — | (9.8 | ) | — | 9.6 | — | — | ||||||||||||||||
Actuarial (gain)/loss | — | 15.0 | 16.8 | 2.3 | 0.8 | (1.0 | ) | ||||||||||||||||
Employee contributions | — | — | — | — | — | — | |||||||||||||||||
Expenses paid | — | — | (0.4 | ) | — | — | — | ||||||||||||||||
Benefits paid | — | (2.9 | ) | (4.1 | ) | (1.9 | ) | (0.8 | ) | (0.8 | ) | ||||||||||||
Benefit obligation at end of year | $ | 1.1 | $ | 112.0 | $ | 1.1 | $ | 105.4 | $ | 7.7 | $ | 7.5 | |||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | 94.8 | $ | 290.0 | $ | 84.2 | $ | — | $ | — | |||||||||||
Actual return on plan assets | — | 8.0 | (2.3 | ) | 2.4 | — | — | ||||||||||||||||
Foreign exchange impact | — | (8.5 | ) | — | 8.6 | — | — | ||||||||||||||||
Employer contributions | — | 0.6 | 48.8 | 1.5 | 0.8 | 0.8 | |||||||||||||||||
Employee contributions | — | — | — | — | — | — | |||||||||||||||||
Plan settlements | — | — | (331.1 | ) | — | — | — | ||||||||||||||||
Expenses paid | — | — | (0.4 | ) | — | — | — | ||||||||||||||||
Benefits paid | — | (2.9 | ) | (4.1 | ) | (1.9 | ) | (0.8 | ) | (0.8 | ) | ||||||||||||
Transfers out to 401(k) plan | — | — | (0.9 | ) | — | — | — | ||||||||||||||||
Fair value of plan assets at end of year | $ | — | $ | 92.0 | $ | — | $ | 94.8 | $ | — | $ | — | |||||||||||
Funded status: | |||||||||||||||||||||||
Under funded status at end of year | $ | (1.1 | ) | $ | (20.0 | ) | $ | (1.1 | ) | $ | (10.6 | ) | $ | (7.7 | ) | $ | (7.5 | ) | |||||
Components of the amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Current liabilities | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | $ | — | $ | (0.9 | ) | $ | (0.9 | ) | |||||||
Non-current liabilities | $ | (1.0 | ) | $ | (20.0 | ) | $ | (1.0 | ) | $ | (10.6 | ) | $ | (6.8 | ) | $ | (6.6 | ) | |||||
Components of the amounts recognized in accumulated other comprehensive loss before the effect of income taxes: | |||||||||||||||||||||||
Unrecognized net actuarial loss | $ | 0.3 | $ | 41.6 | $ | 0.4 | $ | 34.3 | $ | 1.1 | $ | 0.3 | |||||||||||
Unrecognized prior service cost (credit) | — | — | — | — | — | — | |||||||||||||||||
Accumulated other comprehensive loss | $ | 0.3 | $ | 41.6 | $ | 0.4 | $ | 34.3 | $ | 1.1 | $ | 0.3 |
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income: | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
(In millions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||
Domestic: | |||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 1.9 | $ | — | $ | — | $ | — | |||||||||||
Interest cost | — | 5.2 | 10.9 | 0.2 | 0.3 | 0.3 | |||||||||||||||||
Expected return on plan assets | — | (3.6 | ) | (12.1 | ) | — | — | — | |||||||||||||||
Net amortization | — | 4.7 | 11.8 | — | — | 0.1 | |||||||||||||||||
Curtailment (gain) | — | — | — | — | — | — | |||||||||||||||||
Settlement Loss | — | 158.2 | 18.8 | — | — | — | |||||||||||||||||
Net periodic benefit cost | $ | — | $ | 164.5 | $ | 31.3 | $ | 0.2 | $ | 0.3 | $ | 0.4 | |||||||||||
International: | |||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 4.3 | 4.2 | 3.7 | ||||||||||||||||||||
Expected return on plan assets | (5.5 | ) | (5.2 | ) | (4.9 | ) | |||||||||||||||||
Net amortization | 1.8 | 1.8 | 1.4 | ||||||||||||||||||||
Net periodic benefit cost | $ | 0.6 | $ | 0.8 | $ | 0.2 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income): | |||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||
(In millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Domestic: | |||||||||||||||
Net actuarial (gain) loss | $ | — | $ | 22.9 | $ | 0.8 | $ | (1.0 | ) | ||||||
Net amortization, curtailment, and settlements | — | (163.0 | ) | — | — | ||||||||||
Total recognized in other comprehensive (income) loss | $ | — | $ | (140.1 | ) | $ | 0.8 | $ | (1.0 | ) | |||||
International: | |||||||||||||||
Net actuarial (gain) loss | $ | 12.4 | $ | 5.2 | |||||||||||
Effect of exchange rates on amounts included in accumulated other comprehensive income | (0.6 | ) | 3.0 | ||||||||||||
Net amortization | (1.8 | ) | (1.8 | ) | |||||||||||
Total recognized in other comprehensive (income) loss | $ | 10.0 | $ | 6.4 | |||||||||||
The weighted-average used in the determination of net periodic benefit cost: | |||||||||||
2015 | 2014 | 2013 | |||||||||
(Percentages) | Domestic | International | Domestic | International | Domestic | International | |||||
Discount rate | 3.44 | 4.40 | 3.43 | 4.40 | 3.34 | 4.20 | |||||
Compensation increase rate | n/a | 3.35 | n/a | 3.50 | 3.00 | 3.00 | |||||
Expected return on plan assets | n/a | 6.10 | n/a | 6.00 | 4.20 | 6.00 | |||||
The weighted-average used in the determination of the projected benefit obligations: | |||||||||||
Discount rate | 3.41 | 3.50 | 3.44 | 4.40 | 3.43 | 4.40 | |||||
Compensation increase rate | n/a | 3.20 | n/a | 3.35 | n/a | 3.50 |
(In millions) | 1 Percent Increase | 1 Percent Decrease | |||||
Effect on total fiscal 2015 service and interest cost components | $ | — | $ | — | |||
Effect on post-retirement benefit obligation at May 30, 2015 | $ | 0.3 | $ | (0.2 | ) |
Asset Category | Targeted Asset Allocation Percentage | Percentage of Plan Assets at Year End | ||||||||||
2015 | 2014 | |||||||||||
Equities | — | 2 | — | |||||||||
Fixed Income | 20 | 23 | 26 | |||||||||
Common collective trusts | 80 | 75 | 74 | |||||||||
Total | 100 | 100 | ||||||||||
(In millions) | International Plan as of May 31, 2015 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 1.8 | $ | 1.8 | ||||||||
Foreign government obligations | — | 21.3 | 21.3 | |||||||||
Common collective trusts-balanced | — | 68.9 | 68.9 | |||||||||
Total | $ | 1.8 | $ | 90.2 | $ | 92.0 | ||||||
(In millions) | International Plan as of May 31, 2014 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | ||||||
Common collective trusts-balanced | — | 70.1 | 70.1 | |||||||||
Foreign government obligations | 24.5 | 24.5 | ||||||||||
Total | $ | 0.2 | $ | 94.6 | $ | 94.8 |
(In millions) | Pension Benefits Domestic | Pension Benefits International | Post-Retirement Benefits | ||||||||
2016 | $ | 0.1 | $ | 2.2 | $ | 0.9 | |||||
2017 | $ | 0.1 | $ | 2.5 | $ | 0.9 | |||||
2018 | $ | 0.1 | $ | 2.7 | $ | 0.8 | |||||
2019 | $ | 0.1 | $ | 2.7 | $ | 0.8 | |||||
2020 | $ | 0.1 | $ | 2.8 | $ | 0.7 | |||||
2021-2025 | $ | 0.4 | $ | 16.6 | $ | 2.8 |
Year Ended | |||||||||
(In millions) | May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||
Cumulative translation adjustments at beginning of period | (11.1 | ) | (14.0 | ) | (13.0 | ) | |||
Translation adjustments (net of tax of ($0.3, $ - and $ - ) | (9.7 | ) | 2.9 | (1.0 | ) | ||||
Balance at end of period | (20.8 | ) | (11.1 | ) | (14.0 | ) | |||
Pension and other post-retirement benefit plans at beginning of period | (26.8 | ) | (110.3 | ) | (127.6 | ) | |||
Adjustments to pension and other post-retirement benefit plans (net of tax of ($2.6, $ - and $ - ) | (10.0 | ) | (3.1 | ) | 0.5 | ||||
Reclassification to earnings - cost of sales (net of tax $ - , $(15.8), $(1.0)) | — | 27.6 | 1.8 | ||||||
Reclassification to earnings - operating expenses (net of tax $(0.4), $(35.1), $(7.8)) | 1.4 | 59.0 | 15.0 | ||||||
Balance at end of period | (35.4 | ) | (26.8 | ) | (110.3 | ) | |||
Total accumulated other comprehensive loss | (56.2 | ) | (37.9 | ) | (124.3 | ) |
(In millions) | May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Employee stock purchase program | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||
Stock option plans | 2.6 | 2.3 | 3.6 | |||||||||
Restricted stock grants | 0.1 | 0.2 | 0.3 | |||||||||
Restricted stock units | 3.7 | 5.2 | 3.2 | |||||||||
Performance share units | 3.3 | 3.0 | 0.7 | |||||||||
Total | $ | 10.0 | $ | 11.0 | $ | 8.1 | ||||||
Tax benefit | $ | 3.6 | $ | 4.0 | $ | 2.9 |
2015 | 2014 | 2013 | ||||||||||
Risk-free interest rates (1) | 1.46 | % | 1.62 | % | 0.77 | % | ||||||
Expected term of options (2) | 4.0 years | 5.5 years | 5.5 years | |||||||||
Expected volatility (3) | 36 | % | 46 | % | 47 | % | ||||||
Dividend yield (4) | 1.85 | % | 1.74 | % | 1.98 | % | ||||||
Weighted-average grant-date fair value of stock options: | ||||||||||||
Granted with exercise prices equal to the fair market value of the stock on the date of grant | $ | 7.74 | $ | 10.68 | $ | 6.52 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 31, 2014 | 1,596,984 | $ | 25.47 | 4.7 | $ | 9.9 | |||||||
Granted at market | 75,954 | $ | 30.22 | ||||||||||
Exercised | (264,850 | ) | $ | 21.78 | |||||||||
Forfeited or expired | (105,465 | ) | $ | 30.99 | |||||||||
Outstanding at May 30, 2015 | 1,302,623 | $ | 26.05 | 4.0 | $ | 4.7 | |||||||
Ending vested + expected to vest | 1,298,463 | $ | 26.04 | 4.0 | $ | 4.7 | |||||||
Exercisable at end of period | 1,044,419 | $ | 26.81 | 3.0 | $ | 3.3 |
2015 | |||||||
Shares | Weighted Average Grant-Date Fair Value | ||||||
Outstanding, at beginning of year | 62,034 | $ | 20.66 | ||||
Granted | — | $ | — | ||||
Vested | (8,211 | ) | $ | 18.42 | |||
Forfeited or expired | (3,500 | ) | $ | 23.90 | |||
Outstanding, at end of year | 50,323 | $ | 20.80 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 31, 2014 | 566,106 | $ | 23.31 | |||||||||
Granted | 116,485 | $ | 30.38 | |||||||||
Forfeited | (13,410 | ) | $ | 25.35 | ||||||||
Released | (163,709 | ) | $ | 24.95 | ||||||||
Outstanding at May 31, 2015 | 505,472 | $ | 24.21 | $ | 13.5 | 1.2 | ||||||
Ending vested + expected to vest | 495,523 | $ | 12.9 | 1.2 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 31, 2014 | 210,196 | $ | 26.64 | $ | 6.6 | 1.8 | ||||||
Granted | 151,785 | $ | 32.71 | |||||||||
Forfeited | (5,075 | ) | $ | 32.22 | ||||||||
Outstanding at May 30, 2015 | 356,906 | $ | 29.17 | $ | 9.9 | 1.3 | ||||||
Ending vested + expected to vest | 349,664 | $ | 9.7 | 1.3 |
2015 | ||||
Risk-free interest rates (1) | 0.99 | % | ||
Expected term of options (2) | 3.2 years | |||
Expected volatility (3) | 35 | % | ||
Dividend yield | not applicable | |||
Strike price | $ | 24.39 | ||
Per share value (4) | $ | 8.71 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 31, 2014 | — | ||||||||||||
Granted | 606,301 | $ | 21.66 | ||||||||||
Exercised | (87,232 | ) | $ | 8.16 | |||||||||
Forfeited or expired | (14,400 | ) | $ | 24.39 | |||||||||
Outstanding at May 30, 2015 | 504,669 | 4.2 | $ | 2.1 | |||||||||
Exercisable at end of period | 13,583 | $ | 6.79 |
2015 | 2014 | 2013 | |||||||
Options | — | — | — | ||||||
Shares of common stock | 13,752 | 12,358 | 15,746 | ||||||
Shares through the deferred compensation program | — | 2,317 | 2,779 |
(In millions, except shares) | 2015 | 2014 | 2013 | ||||||||
Numerator: | |||||||||||
Numerator for both basic and diluted EPS, net earnings (loss) | $ | 97.5 | $ | (22.1 | ) | $ | 68.2 | ||||
Denominator: | |||||||||||
Denominator for basic EPS, weighted-average common shares outstanding | 59,475,297 | 58,955,487 | 58,425,522 | ||||||||
Potentially dilutive shares resulting from stock plans | 649,069 | — | 418,992 | ||||||||
Denominator for diluted EPS | 60,124,366 | 58,955,487 | 58,844,514 |
Ownership Interest | May 30, 2015 | May 31, 2014 |
Kvadrat Maharam Arabia DMCC | 50.0% | 50.0% |
Kvadrat Maharam Pty Limited | 50.0% | 50.0% |
Kvadrat Maharam Turkey JSC | 50.0% | 50.0% |
Danskina B.V. | 50.0% | 50.0% |
Ownership Interest | May 30, 2015 | May 31, 2014 |
Kvadrat Maharam Arabia DMCC | 50.0% | 50.0% |
Kvadrat Maharam Pty Limited | 50.0% | 50.0% |
Kvadrat Maharam Turkey JSC | 50.0% | 50.0% |
Danskina B.V. | 50.0% | 50.0% |
(In millions) | Fair Value Measurements | ||||||
May 30, 2015 | May 31, 2014 | ||||||
Financial Assets | Quoted Prices With Other Observable Inputs (Level 2) | Quoted Prices With Other Observable Inputs (Level 2) | |||||
Available-for-sale marketable securities: | |||||||
Asset-backed securities | $ | 0.2 | $ | 0.4 | |||
Corporate debt securities | 0.6 | 1.2 | |||||
Government obligations | 0.5 | 7.9 | |||||
Mortgage-backed securities | 4.4 | 1.6 | |||||
Foreign currency forward contracts | 0.7 | 0.2 | |||||
Deferred compensation plan | 7.9 | 6.3 | |||||
Total | $ | 14.3 | $ | 17.6 | |||
Financial Liabilities | |||||||
Foreign currency forward contracts | $ | 0.2 | $ | 0.1 | |||
Total | $ | 0.2 | $ | 0.1 |
(In millions) | May 30, 2015 | May 31, 2014 | ||||||
Carrying value | $ | 290.0 | $ | 250.0 | ||||
Fair value | $ | 315.1 | $ | 279.2 |
(In millions) | May 30, 2015 | May 31, 2014 | ||||||
Carrying value | $ | 290.0 | $ | 250.0 | ||||
Fair value | $ | 315.1 | $ | 279.2 |
(In millions) | Fair Value Measurements | ||||||
May 30, 2015 | May 31, 2014 | ||||||
Financial Assets | Quoted Prices With Other Observable Inputs (Level 2) | Quoted Prices With Other Observable Inputs (Level 2) | |||||
Available-for-sale marketable securities: | |||||||
Asset-backed securities | $ | 0.2 | $ | 0.4 | |||
Corporate debt securities | 0.6 | 1.2 | |||||
Government obligations | 0.5 | 7.9 | |||||
Mortgage-backed securities | 4.4 | 1.6 | |||||
Foreign currency forward contracts | 0.7 | 0.2 | |||||
Deferred compensation plan | 7.9 | 6.3 | |||||
Total | $ | 14.3 | $ | 17.6 | |||
Financial Liabilities | |||||||
Foreign currency forward contracts | $ | 0.2 | $ | 0.1 | |||
Total | $ | 0.2 | $ | 0.1 |
May 30, 2015 | ||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | ||||||||||||
Asset-backed securities | $ | 0.2 | $ | — | $ | — | $ | 0.2 | ||||||||
Corporate debt securities | 0.6 | — | — | 0.6 | ||||||||||||
Government obligations | 0.5 | — | — | 0.5 | ||||||||||||
Mortgage-backed securities | 4.4 | — | — | 4.4 | ||||||||||||
Total | $ | 5.7 | $ | — | $ | — | $ | 5.7 | ||||||||
May 31, 2014 | ||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | ||||||||||||
Asset-backed securities | $ | 0.4 | $ | — | $ | — | $ | 0.4 | ||||||||
Corporate debt securities | 1.2 | — | — | 1.2 | ||||||||||||
Government obligations | 7.9 | — | — | 7.9 | ||||||||||||
Mortgage-backed securities | 1.6 | — | — | 1.6 | ||||||||||||
Total | $ | 11.1 | $ | — | $ | — | $ | 11.1 |
(In millions) | Cost | Market Value | ||||||
Due within one year | $ | 3.1 | $ | 3.1 | ||||
Due after one year through five years | 2.5 | 2.5 | ||||||
Due after five years | 0.1 | 0.1 | ||||||
Total | $ | 5.7 | $ | 5.7 |
• | Level 1 — Financial instruments with unadjusted, quoted prices listed on active market exchanges. |
• | Level 2 — Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. Financial instrument values are determined using prices for recently traded financial instruments with similar underlying terms and direct or indirect observational inputs, such as interest rates and yield curves at commonly quoted intervals. |
• | Level 3 — Financial instruments not actively traded on a market exchange and there is little, if any, market activity. Values are determined using significant unobservable inputs or valuation techniques. |
Intangible Assets Acquired from the DWR Acquisition | ||||
(In millions) | Fair Value | Useful Life | ||
Trade Names and Trademarks | $ | 55.1 | Indefinite | |
Exclusive Distribution Agreements | 0.2 | 1.5 years | ||
Customer Relationships | 12.0 | 10 - 16 years | ||
Product Development Designs | 1.2 | 7 years | ||
Total Intangible Assets Acquired | $ | 68.5 |
(In millions) | 2015 | 2014 | 2013 | ||||||||
Domestic | $ | 142.5 | $ | (45.1 | ) | $ | 89.9 | ||||
Foreign | 2.7 | 1.7 | 7.3 | ||||||||
Total | $ | 145.2 | $ | (43.4 | ) | $ | 97.2 |
(In millions) | 2015 | 2014 | 2013 | ||||||||
Current: Domestic - Federal | $ | 43.6 | $ | 22.2 | $ | 36.4 | |||||
Domestic - State | 6.3 | 4.6 | 5.2 | ||||||||
Foreign | 6.1 | 4.8 | 3.9 | ||||||||
56.0 | 31.6 | 45.5 | |||||||||
Deferred: Domestic - Federal | (5.9 | ) | (43.6 | ) | (14.9 | ) | |||||
Domestic - State | (0.6 | ) | (5.6 | ) | (1.4 | ) | |||||
Foreign | (2.3 | ) | (3.6 | ) | (0.3 | ) | |||||
(8.8 | ) | (52.8 | ) | (16.6 | ) | ||||||
Total income tax provision | $ | 47.2 | $ | (21.2 | ) | $ | 28.9 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Income taxes computed at the United States Statutory rate of 35% | $ | 50.8 | $ | (15.2 | ) | $ | 34.0 | |||||
Increase (decrease) in taxes resulting from: | ||||||||||||
Change in unrecognized tax benefits | — | 0.4 | 0.1 | |||||||||
Foreign statutory rate differences | (1.0 | ) | (0.9 | ) | (1.9 | ) | ||||||
Manufacturing deduction under the American Jobs Creation Act of 2004 | (4.8 | ) | (3.9 | ) | (4.0 | ) | ||||||
State taxes | 4.2 | (0.9 | ) | 2.5 | ||||||||
Federal permanent true-ups | (0.9 | ) | 1.6 | (2.1 | ) | |||||||
Tax on undistributed foreign earnings | (3.9 | ) | — | (0.2 | ) | |||||||
Other, net | 2.8 | (2.3 | ) | 0.5 | ||||||||
Income tax expense (benefit) | $ | 47.2 | $ | (21.2 | ) | $ | 28.9 | |||||
Effective tax rate | 32.6 | % | 48.9 | % | 29.8 | % |
(In millions) | 2015 | 2014 | ||||||
Deferred tax assets: | ||||||||
Compensation-related accruals | $ | 21.9 | $ | 19.5 | ||||
Accrued pension and post-retirement benefit obligations | 11.0 | 9.7 | ||||||
Deferred revenue | 2.9 | 3.0 | ||||||
Inventory related | 6.4 | 3.7 | ||||||
Reserves for uncollectible accounts and notes receivable | 1.4 | 1.5 | ||||||
Other reserves and accruals | 3.6 | 3.5 | ||||||
Warranty | 9.3 | 8.5 | ||||||
State and local tax net operating loss carryforwards | 5.5 | 3.2 | ||||||
Federal net operating loss carryforward | 12.2 | 0.1 | ||||||
State credits | 0.2 | 0.2 | ||||||
Foreign tax net operating loss carryforwards | 9.9 | 9.9 | ||||||
Foreign tax credits | 0.1 | 0.1 | ||||||
Foreign capital loss carryforward | — | 0.1 | ||||||
Undistributed foreign earnings | 4.5 | — | ||||||
Financing costs | 0.8 | 1.2 | ||||||
Other | 3.6 | 1.5 | ||||||
Subtotal | 93.3 | 65.7 | ||||||
Valuation allowance | (11.1 | ) | (8.5 | ) | ||||
Total | $ | 82.2 | $ | 57.2 | ||||
Deferred tax liabilities: | ||||||||
Book basis in property in excess of tax basis | $ | (16.7 | ) | $ | (14.7 | ) | ||
Intangible assets | (44.5 | ) | (18.1 | ) | ||||
Other | (3.6 | ) | (2.4 | ) | ||||
Total | $ | (64.8 | ) | $ | (35.2 | ) |
(In millions) | ||||
Balance at June 1, 2013 | $ | 1.4 | ||
Increases related to current year income tax positions | 0.5 | |||
Increases related to prior year income tax positions | — | |||
Decreases related to prior year income tax positions | — | |||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | — | |||
Balance at May 31, 2014 | 1.8 | |||
Increases related to current year income tax positions | 0.4 | |||
Increases related to prior year income tax positions | 0.1 | |||
Decreases related to prior year income tax positions | (0.4 | ) | ||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | — | |||
Balance at May 30, 2015 | $ | 1.8 |
(In millions) | May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||||
Interest and penalty expense | $ | 0.4 | $ | 0.2 | $ | — | |||||
Liability for interest and penalties | $ | 0.9 | $ | 0.6 |
May 30, 2015 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 18.8 | $ | 55.3 | $ | 5.0 | $ | 79.1 | |||||||
Accumulated amortization | 11.7 | 12.0 | 3.1 | 26.8 | |||||||||||
Net | $ | 7.1 | $ | 43.3 | $ | 1.9 | $ | 52.3 | |||||||
May 31, 2014 | |||||||||||||||
Patent and Trademarks | Customer Relationships | Other | Total | ||||||||||||
Gross carrying value | $ | 19.2 | $ | 43.6 | $ | 4.8 | $ | 67.6 | |||||||
Accumulated amortization | 12.7 | 8.3 | 2.4 | 23.4 | |||||||||||
Net | $ | 6.5 | $ | 35.3 | $ | 2.4 | $ | 44.2 |
(In millions) | May 30, 2015 | May 31, 2014 | ||||||
Finished goods and work in process | $ | 106.5 | $ | 58.2 | ||||
Raw materials | 23.1 | 20.2 | ||||||
Total | $ | 129.6 | $ | 78.4 |
(In millions) | Cost | Market Value | ||||||
Due within one year | $ | 3.1 | $ | 3.1 | ||||
Due after one year through five years | 2.5 | 2.5 | ||||||
Due after five years | 0.1 | 0.1 | ||||||
Total | $ | 5.7 | $ | 5.7 |
(In millions) | |||
2016 | $ | 36.6 | |
2017 | $ | 30.9 | |
2018 | $ | 28.3 | |
2019 | $ | 26.5 | |
2020 | $ | 23.6 | |
Thereafter | $ | 107.8 |
(In millions) | May 30, 2015 | May 31, 2014 | ||||||
Series A senior notes, 5.94%, due January 3, 2015 | $ | — | $ | 50.0 | ||||
Series B senior notes, 6.42%, due January 3, 2018 | 150.0 | 150.0 | ||||||
Debt securities, 6.0%, due March 1, 2021 | 50.0 | 50.0 | ||||||
Syndicated Revolving Line of Credit, due July 2019 | 90.0 | — | ||||||
Total | $ | 290.0 | $ | 250.0 |
(In millions) | |||
2016 | $ | — | |
2017 | $ | — | |
2018 | $ | 150.0 | |
2019 | $ | — | |
2020 | $ | 90.0 | |
Thereafter | $ | 50.0 |
Assets Acquired and Liabilities Assumed on July 28, 2014 | |||||||||
(In millions) | At acquisition date - reported as of August 30, 2014 | Measurement Period Adjustments | At acquisition date - reported as of May 30, 2015 | ||||||
Purchase price | $ | 155.0 | $ | 0.2 | $ | 155.2 | |||
Fair value of the assets acquired: | |||||||||
Cash | 1.2 | — | 1.2 | ||||||
Accounts receivable | 2.4 | (0.2 | ) | 2.2 | |||||
Inventory | 47.4 | — | 47.4 | ||||||
Current deferred tax asset | — | 1.5 | 1.5 | ||||||
Other current assets | 5.5 | — | 5.5 | ||||||
Long term deferred tax asset | 3.7 | (3.7 | ) | — | |||||
Goodwill | 74.4 | 1.2 | 75.6 | ||||||
Other intangible assets | 69.6 | (1.1 | ) | 68.5 | |||||
Property | 32.0 | — | 32.0 | ||||||
Other long term assets | 2.4 | — | 2.4 | ||||||
Total assets acquired | 238.6 | (2.3 | ) | 236.3 | |||||
Fair value of liabilities assumed: | |||||||||
Accounts payable | 20.8 | — | 20.8 | ||||||
Current deferred tax liabilities | 0.6 | (0.6 | ) | — | |||||
Accrued compensation and benefits | 1.6 | — | 1.6 | ||||||
Other accrued liabilities | 12.3 | — | 12.3 | ||||||
Long term deferred tax liability | 16.4 | (1.9 | ) | 14.5 | |||||
Other long term liabilities | 0.4 | — | 0.4 | ||||||
Total liabilities assumed | 52.1 | (2.5 | ) | 49.6 | |||||
Redeemable noncontrolling interests | 25.7 | — | 25.7 | ||||||
Noncontrolling interests | 5.8 | — | 5.8 | ||||||
Net assets acquired | $ | 155.0 | $ | 0.2 | $ | 155.2 |
Intangible Assets Acquired from the DWR Acquisition | ||||
(In millions) | Fair Value | Useful Life | ||
Trade Names and Trademarks | $ | 55.1 | Indefinite | |
Exclusive Distribution Agreements | 0.2 | 1.5 years | ||
Customer Relationships | 12.0 | 10 - 16 years | ||
Product Development Designs | 1.2 | 7 years | ||
Total Intangible Assets Acquired | $ | 68.5 |
DWR Results of Operations | |||
(In millions) | July 28, 2014 - May 30, 2015 | ||
DWR Net sales | $ | 217.0 | |
Intercompany sales elimination | (22.7 | ) | |
Net sales impact to Herman Miller, Inc. | $ | 194.3 |
(In millions) | ||||
Balance at May 31, 2014 | $ | — | ||
Increase due to business combinations | 25.7 | |||
Net income attributable to redeemable noncontrolling interests | 0.5 | |||
Exercised options | 0.7 | |||
Contributions by noncontrolling interests | 0.2 | |||
Redemption value adjustment | 3.3 | |||
Balance at May 30, 2015 | $ | 30.4 |
(In millions, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2015 | Net sales | $ | 509.7 | $ | 565.4 | $ | 516.4 | $ | 550.7 | |||||||
Gross margin | 185.6 | 205.7 | 190.5 | 209.6 | ||||||||||||
Net earnings (loss) attributable to Herman Miller, Inc. (1) | 25.2 | 27.8 | 21.0 | 23.4 | ||||||||||||
Earnings (loss) per share-basic | 0.43 | 0.47 | 0.35 | 0.39 | ||||||||||||
Earnings (loss) per share-diluted | 0.42 | 0.46 | 0.35 | 0.39 | ||||||||||||
2014 | Net sales | $ | 468.1 | $ | 470.5 | $ | 455.9 | $ | 487.5 | |||||||
Gross Margin (1) | 170.0 | 118.9 | 162.9 | 179.1 | ||||||||||||
Net earnings (loss) attributable to Herman Miller, Inc. | 22.5 | (80.6 | ) | 19.4 | 16.6 | |||||||||||
Earnings per share-basic (1) | 0.38 | (1.37 | ) | 0.33 | 0.28 | |||||||||||
Earnings per share-diluted (1) | 0.38 | (1.37 | ) | 0.33 | 0.28 | |||||||||||
2013 | Net sales (1) | $ | 449.7 | $ | 441.8 | $ | 423.5 | $ | 460.0 | |||||||
Gross margin | 149.7 | 148.5 | 144.4 | 162.6 | ||||||||||||
Net earnings (loss) attributable to Herman Miller, Inc. (1) | 20.0 | 8.4 | 16.5 | 23.4 | ||||||||||||
Earnings per share-basic (1) | 0.34 | 0.14 | 0.28 | 0.40 | ||||||||||||
Earnings per share-diluted | 0.34 | 0.14 | 0.28 | 0.40 |
(In millions) | ||||
Balance at May 31, 2014 | $ | — | ||
Increase due to business combinations | 25.7 | |||
Net income attributable to redeemable noncontrolling interests | 0.5 | |||
Exercised options | 0.7 | |||
Contributions by noncontrolling interests | 0.2 | |||
Redemption value adjustment | 3.3 | |||
Balance at May 30, 2015 | $ | 30.4 |
Year Ended | |||||||||
(In millions) | May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||
Cumulative translation adjustments at beginning of period | (11.1 | ) | (14.0 | ) | (13.0 | ) | |||
Translation adjustments (net of tax of ($0.3, $ - and $ - ) | (9.7 | ) | 2.9 | (1.0 | ) | ||||
Balance at end of period | (20.8 | ) | (11.1 | ) | (14.0 | ) | |||
Pension and other post-retirement benefit plans at beginning of period | (26.8 | ) | (110.3 | ) | (127.6 | ) | |||
Adjustments to pension and other post-retirement benefit plans (net of tax of ($2.6, $ - and $ - ) | (10.0 | ) | (3.1 | ) | 0.5 | ||||
Reclassification to earnings - cost of sales (net of tax $ - , $(15.8), $(1.0)) | — | 27.6 | 1.8 | ||||||
Reclassification to earnings - operating expenses (net of tax $(0.4), $(35.1), $(7.8)) | 1.4 | 59.0 | 15.0 | ||||||
Balance at end of period | (35.4 | ) | (26.8 | ) | (110.3 | ) | |||
Total accumulated other comprehensive loss | (56.2 | ) | (37.9 | ) | (124.3 | ) |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income): | |||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||
(In millions) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Domestic: | |||||||||||||||
Net actuarial (gain) loss | $ | — | $ | 22.9 | $ | 0.8 | $ | (1.0 | ) | ||||||
Net amortization, curtailment, and settlements | — | (163.0 | ) | — | — | ||||||||||
Total recognized in other comprehensive (income) loss | $ | — | $ | (140.1 | ) | $ | 0.8 | $ | (1.0 | ) | |||||
International: | |||||||||||||||
Net actuarial (gain) loss | $ | 12.4 | $ | 5.2 | |||||||||||
Effect of exchange rates on amounts included in accumulated other comprehensive income | (0.6 | ) | 3.0 | ||||||||||||
Net amortization | (1.8 | ) | (1.8 | ) | |||||||||||
Total recognized in other comprehensive (income) loss | $ | 10.0 | $ | 6.4 | |||||||||||
The weighted-average used in the determination of net periodic benefit cost: | |||||||||||
2015 | 2014 | 2013 | |||||||||
(Percentages) | Domestic | International | Domestic | International | Domestic | International | |||||
Discount rate | 3.44 | 4.40 | 3.43 | 4.40 | 3.34 | 4.20 | |||||
Compensation increase rate | n/a | 3.35 | n/a | 3.50 | 3.00 | 3.00 | |||||
Expected return on plan assets | n/a | 6.10 | n/a | 6.00 | 4.20 | 6.00 | |||||
The weighted-average used in the determination of the projected benefit obligations: | |||||||||||
Discount rate | 3.41 | 3.50 | 3.44 | 4.40 | 3.43 | 4.40 | |||||
Compensation increase rate | n/a | 3.20 | n/a | 3.35 | n/a | 3.50 |
Assets Acquired and Liabilities Assumed on July 28, 2014 | |||||||||
(In millions) | At acquisition date - reported as of August 30, 2014 | Measurement Period Adjustments | At acquisition date - reported as of May 30, 2015 | ||||||
Purchase price | $ | 155.0 | $ | 0.2 | $ | 155.2 | |||
Fair value of the assets acquired: | |||||||||
Cash | 1.2 | — | 1.2 | ||||||
Accounts receivable | 2.4 | (0.2 | ) | 2.2 | |||||
Inventory | 47.4 | — | 47.4 | ||||||
Current deferred tax asset | — | 1.5 | 1.5 | ||||||
Other current assets | 5.5 | — | 5.5 | ||||||
Long term deferred tax asset | 3.7 | (3.7 | ) | — | |||||
Goodwill | 74.4 | 1.2 | 75.6 | ||||||
Other intangible assets | 69.6 | (1.1 | ) | 68.5 | |||||
Property | 32.0 | — | 32.0 | ||||||
Other long term assets | 2.4 | — | 2.4 | ||||||
Total assets acquired | 238.6 | (2.3 | ) | 236.3 | |||||
Fair value of liabilities assumed: | |||||||||
Accounts payable | 20.8 | — | 20.8 | ||||||
Current deferred tax liabilities | 0.6 | (0.6 | ) | — | |||||
Accrued compensation and benefits | 1.6 | — | 1.6 | ||||||
Other accrued liabilities | 12.3 | — | 12.3 | ||||||
Long term deferred tax liability | 16.4 | (1.9 | ) | 14.5 | |||||
Other long term liabilities | 0.4 | — | 0.4 | ||||||
Total liabilities assumed | 52.1 | (2.5 | ) | 49.6 | |||||
Redeemable noncontrolling interests | 25.7 | — | 25.7 | ||||||
Noncontrolling interests | 5.8 | — | 5.8 | ||||||
Net assets acquired | $ | 155.0 | $ | 0.2 | $ | 155.2 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Depreciation expense | $ | 44.2 | $ | 37.8 | $ | 34.4 | ||||||
Amortization expense | 5.6 | 4.6 | 3.1 | |||||||||
Provision for losses on accounts receivable and notes receivable | 1.8 | 1.0 | 0.6 | |||||||||
(Gain) Loss on sales of property and dealers | — | (1.7 | ) | 0.8 | ||||||||
Deferred income tax expense (benefit) | (8.8 | ) | (52.8 | ) | (16.6 | ) | ||||||
Pension expense | 0.8 | 115.4 | 31.9 | |||||||||
Restructuring and impairment expenses | 12.7 | 26.5 | 1.2 | |||||||||
Stock-based compensation | 10.0 | 11.0 | 8.1 | |||||||||
Excess tax benefits from stock-based compensation | (0.7 | ) | (1.1 | ) | (0.3 | ) | ||||||
Other changes in long-term liabilities | (1.2 | ) | (8.5 | ) | (9.2 | ) | ||||||
Other | 1.7 | 1.2 | (2.9 | ) | ||||||||
Changes in current assets and liabilities: | ||||||||||||
Decrease (increase) in assets: | ||||||||||||
Accounts receivable | 7.8 | (26.7 | ) | (7.7 | ) | |||||||
Inventories | (9.0 | ) | (2.2 | ) | (4.6 | ) | ||||||
Prepaid expenses and other | (2.5 | ) | (3.2 | ) | 9.3 | |||||||
Increase (decrease) in liabilities: | ||||||||||||
Accounts payable | 1.1 | 2.6 | 6.0 | |||||||||
Accrued liabilities | 6.1 | 8.3 | 14.2 | |||||||||
Total changes in current assets and liabilities | 3.5 | (21.2 | ) | 17.2 | ||||||||
Total adjustments | $ | 69.6 | $ | 112.2 | $ | 68.3 |
(In millions) | May 30, 2015 | May 31, 2014 | June 1, 2013 | |||||||||
Employee stock purchase program | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||
Stock option plans | 2.6 | 2.3 | 3.6 | |||||||||
Restricted stock grants | 0.1 | 0.2 | 0.3 | |||||||||
Restricted stock units | 3.7 | 5.2 | 3.2 | |||||||||
Performance share units | 3.3 | 3.0 | 0.7 | |||||||||
Total | $ | 10.0 | $ | 11.0 | $ | 8.1 | ||||||
Tax benefit | $ | 3.6 | $ | 4.0 | $ | 2.9 |
(In millions) | 2015 | 2014 | 2013 | ||||||||
Current: Domestic - Federal | $ | 43.6 | $ | 22.2 | $ | 36.4 | |||||
Domestic - State | 6.3 | 4.6 | 5.2 | ||||||||
Foreign | 6.1 | 4.8 | 3.9 | ||||||||
56.0 | 31.6 | 45.5 | |||||||||
Deferred: Domestic - Federal | (5.9 | ) | (43.6 | ) | (14.9 | ) | |||||
Domestic - State | (0.6 | ) | (5.6 | ) | (1.4 | ) | |||||
Foreign | (2.3 | ) | (3.6 | ) | (0.3 | ) | |||||
(8.8 | ) | (52.8 | ) | (16.6 | ) | ||||||
Total income tax provision | $ | 47.2 | $ | (21.2 | ) | $ | 28.9 |
(In millions) | May 30, 2015 | May 31, 2014 | ||||||
Series A senior notes, 5.94%, due January 3, 2015 | $ | — | $ | 50.0 | ||||
Series B senior notes, 6.42%, due January 3, 2018 | 150.0 | 150.0 | ||||||
Debt securities, 6.0%, due March 1, 2021 | 50.0 | 50.0 | ||||||
Syndicated Revolving Line of Credit, due July 2019 | 90.0 | — | ||||||
Total | $ | 290.0 | $ | 250.0 |
(In millions) | 2015 | 2014 | ||||||
Deferred tax assets: | ||||||||
Compensation-related accruals | $ | 21.9 | $ | 19.5 | ||||
Accrued pension and post-retirement benefit obligations | 11.0 | 9.7 | ||||||
Deferred revenue | 2.9 | 3.0 | ||||||
Inventory related | 6.4 | 3.7 | ||||||
Reserves for uncollectible accounts and notes receivable | 1.4 | 1.5 | ||||||
Other reserves and accruals | 3.6 | 3.5 | ||||||
Warranty | 9.3 | 8.5 | ||||||
State and local tax net operating loss carryforwards | 5.5 | 3.2 | ||||||
Federal net operating loss carryforward | 12.2 | 0.1 | ||||||
State credits | 0.2 | 0.2 | ||||||
Foreign tax net operating loss carryforwards | 9.9 | 9.9 | ||||||
Foreign tax credits | 0.1 | 0.1 | ||||||
Foreign capital loss carryforward | — | 0.1 | ||||||
Undistributed foreign earnings | 4.5 | — | ||||||
Financing costs | 0.8 | 1.2 | ||||||
Other | 3.6 | 1.5 | ||||||
Subtotal | 93.3 | 65.7 | ||||||
Valuation allowance | (11.1 | ) | (8.5 | ) | ||||
Total | $ | 82.2 | $ | 57.2 | ||||
Deferred tax liabilities: | ||||||||
Book basis in property in excess of tax basis | $ | (16.7 | ) | $ | (14.7 | ) | ||
Intangible assets | (44.5 | ) | (18.1 | ) | ||||
Other | (3.6 | ) | (2.4 | ) | ||||
Total | $ | (64.8 | ) | $ | (35.2 | ) |
(In millions) | Fiscal Year | ||||||||||||
Recognized Income on Derivative (Gain) Loss Location | May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||||||
Foreign currency forward contracts | Other expenses (income): Other, net | $ | (2.1 | ) | $ | (0.1 | ) | $ | — |
(In millions) | Fiscal Year | ||||||||
Balance Sheet Location | May 30, 2015 | May 31, 2014 | |||||||
Foreign currency forward contracts not designated as hedges | Current Assets: Other | $ | 0.7 | $ | 0.2 | ||||
Foreign currency forward contracts not designated as hedges | Current Liabilities: Other Accrued Liabilities | $ | 0.2 | $ | 0.1 |
(In millions, except shares) | 2015 | 2014 | 2013 | ||||||||
Numerator: | |||||||||||
Numerator for both basic and diluted EPS, net earnings (loss) | $ | 97.5 | $ | (22.1 | ) | $ | 68.2 | ||||
Denominator: | |||||||||||
Denominator for basic EPS, weighted-average common shares outstanding | 59,475,297 | 58,955,487 | 58,425,522 | ||||||||
Potentially dilutive shares resulting from stock plans | 649,069 | — | 418,992 | ||||||||
Denominator for diluted EPS | 60,124,366 | 58,955,487 | 58,844,514 |
(In millions) | 1 Percent Increase | 1 Percent Decrease | |||||
Effect on total fiscal 2015 service and interest cost components | $ | — | $ | — | |||
Effect on post-retirement benefit obligation at May 30, 2015 | $ | 0.3 | $ | (0.2 | ) |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Income taxes computed at the United States Statutory rate of 35% | $ | 50.8 | $ | (15.2 | ) | $ | 34.0 | |||||
Increase (decrease) in taxes resulting from: | ||||||||||||
Change in unrecognized tax benefits | — | 0.4 | 0.1 | |||||||||
Foreign statutory rate differences | (1.0 | ) | (0.9 | ) | (1.9 | ) | ||||||
Manufacturing deduction under the American Jobs Creation Act of 2004 | (4.8 | ) | (3.9 | ) | (4.0 | ) | ||||||
State taxes | 4.2 | (0.9 | ) | 2.5 | ||||||||
Federal permanent true-ups | (0.9 | ) | 1.6 | (2.1 | ) | |||||||
Tax on undistributed foreign earnings | (3.9 | ) | — | (0.2 | ) | |||||||
Other, net | 2.8 | (2.3 | ) | 0.5 | ||||||||
Income tax expense (benefit) | $ | 47.2 | $ | (21.2 | ) | $ | 28.9 | |||||
Effective tax rate | 32.6 | % | 48.9 | % | 29.8 | % |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Long-lived assets: | ||||||||||||
United States | $ | 224.2 | $ | 177.0 | $ | 169.2 | ||||||
International | 53.8 | 35.4 | 29.8 | |||||||||
Total | $ | 278.0 | $ | 212.4 | $ | 199.0 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Net Sales: | ||||||||||||
Systems | $ | 563.4 | $ | 571.6 | $ | 572.9 | ||||||
Seating | 805.5 | 658.2 | 609.8 | |||||||||
Freestanding and storage | 484.1 | 386.4 | 395.0 | |||||||||
Other (1) | 289.2 | 265.8 | 197.2 | |||||||||
Total | $ | 2,142.2 | $ | 1,882.0 | $ | 1,774.9 |
(In millions) | Pension Benefits Domestic | Pension Benefits International | Post-Retirement Benefits | ||||||||
2016 | $ | 0.1 | $ | 2.2 | $ | 0.9 | |||||
2017 | $ | 0.1 | $ | 2.5 | $ | 0.9 | |||||
2018 | $ | 0.1 | $ | 2.7 | $ | 0.8 | |||||
2019 | $ | 0.1 | $ | 2.7 | $ | 0.8 | |||||
2020 | $ | 0.1 | $ | 2.8 | $ | 0.7 | |||||
2021-2025 | $ | 0.4 | $ | 16.6 | $ | 2.8 |
May 30, 2015 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 18.8 | $ | 55.3 | $ | 5.0 | $ | 79.1 | |||||||
Accumulated amortization | 11.7 | 12.0 | 3.1 | 26.8 | |||||||||||
Net | $ | 7.1 | $ | 43.3 | $ | 1.9 | $ | 52.3 | |||||||
May 31, 2014 | |||||||||||||||
Patent and Trademarks | Customer Relationships | Other | Total | ||||||||||||
Gross carrying value | $ | 19.2 | $ | 43.6 | $ | 4.8 | $ | 67.6 | |||||||
Accumulated amortization | 12.7 | 8.3 | 2.4 | 23.4 | |||||||||||
Net | $ | 6.5 | $ | 35.3 | $ | 2.4 | $ | 44.2 |
(In millions) | |||
2016 | $ | 36.6 | |
2017 | $ | 30.9 | |
2018 | $ | 28.3 | |
2019 | $ | 26.5 | |
2020 | $ | 23.6 | |
Thereafter | $ | 107.8 |
(In millions) | 2015 | 2014 | 2013 | ||||||||
Domestic | $ | 142.5 | $ | (45.1 | ) | $ | 89.9 | ||||
Foreign | 2.7 | 1.7 | 7.3 | ||||||||
Total | $ | 145.2 | $ | (43.4 | ) | $ | 97.2 |
(In millions) | May 30, 2015 | May 31, 2014 | ||||||
Finished goods and work in process | $ | 106.5 | $ | 58.2 | ||||
Raw materials | 23.1 | 20.2 | ||||||
Total | $ | 129.6 | $ | 78.4 |
(In millions) | |||
2016 | $ | — | |
2017 | $ | — | |
2018 | $ | 150.0 | |
2019 | $ | — | |
2020 | $ | 90.0 | |
Thereafter | $ | 50.0 |
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income: | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
(In millions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||||||
Domestic: | |||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 1.9 | $ | — | $ | — | $ | — | |||||||||||
Interest cost | — | 5.2 | 10.9 | 0.2 | 0.3 | 0.3 | |||||||||||||||||
Expected return on plan assets | — | (3.6 | ) | (12.1 | ) | — | — | — | |||||||||||||||
Net amortization | — | 4.7 | 11.8 | — | — | 0.1 | |||||||||||||||||
Curtailment (gain) | — | — | — | — | — | — | |||||||||||||||||
Settlement Loss | — | 158.2 | 18.8 | — | — | — | |||||||||||||||||
Net periodic benefit cost | $ | — | $ | 164.5 | $ | 31.3 | $ | 0.2 | $ | 0.3 | $ | 0.4 | |||||||||||
International: | |||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | — | |||||||||||||||||
Interest cost | 4.3 | 4.2 | 3.7 | ||||||||||||||||||||
Expected return on plan assets | (5.5 | ) | (5.2 | ) | (4.9 | ) | |||||||||||||||||
Net amortization | 1.8 | 1.8 | 1.4 | ||||||||||||||||||||
Net periodic benefit cost | $ | 0.6 | $ | 0.8 | $ | 0.2 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 31, 2014 | 210,196 | $ | 26.64 | $ | 6.6 | 1.8 | ||||||
Granted | 151,785 | $ | 32.71 | |||||||||
Forfeited | (5,075 | ) | $ | 32.22 | ||||||||
Outstanding at May 30, 2015 | 356,906 | $ | 29.17 | $ | 9.9 | 1.3 | ||||||
Ending vested + expected to vest | 349,664 | $ | 9.7 | 1.3 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Accrual balance, beginning | $ | 25.2 | $ | 24.8 | $ | 22.2 | ||||||
Accrual for warranty matters | 25.0 | 20.2 | 23.3 | |||||||||
Settlements | (23.4 | ) | (19.8 | ) | (20.7 | ) | ||||||
Accrual balance, ending | $ | 26.8 | $ | 25.2 | $ | 24.8 |
(In millions, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2015 | Net sales | $ | 509.7 | $ | 565.4 | $ | 516.4 | $ | 550.7 | |||||||
Gross margin | 185.6 | 205.7 | 190.5 | 209.6 | ||||||||||||
Net earnings (loss) attributable to Herman Miller, Inc. (1) | 25.2 | 27.8 | 21.0 | 23.4 | ||||||||||||
Earnings (loss) per share-basic | 0.43 | 0.47 | 0.35 | 0.39 | ||||||||||||
Earnings (loss) per share-diluted | 0.42 | 0.46 | 0.35 | 0.39 | ||||||||||||
2014 | Net sales | $ | 468.1 | $ | 470.5 | $ | 455.9 | $ | 487.5 | |||||||
Gross Margin (1) | 170.0 | 118.9 | 162.9 | 179.1 | ||||||||||||
Net earnings (loss) attributable to Herman Miller, Inc. | 22.5 | (80.6 | ) | 19.4 | 16.6 | |||||||||||
Earnings per share-basic (1) | 0.38 | (1.37 | ) | 0.33 | 0.28 | |||||||||||
Earnings per share-diluted (1) | 0.38 | (1.37 | ) | 0.33 | 0.28 | |||||||||||
2013 | Net sales (1) | $ | 449.7 | $ | 441.8 | $ | 423.5 | $ | 460.0 | |||||||
Gross margin | 149.7 | 148.5 | 144.4 | 162.6 | ||||||||||||
Net earnings (loss) attributable to Herman Miller, Inc. (1) | 20.0 | 8.4 | 16.5 | 23.4 | ||||||||||||
Earnings per share-basic (1) | 0.34 | 0.14 | 0.28 | 0.40 | ||||||||||||
Earnings per share-diluted | 0.34 | 0.14 | 0.28 | 0.40 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Net Sales: | ||||||||||||
United States | $ | 1,640.6 | $ | 1,406.3 | $ | 1,291.5 | ||||||
International | 501.6 | 475.7 | 483.4 | |||||||||
Total | $ | 2,142.2 | $ | 1,882.0 | $ | 1,774.9 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Net Sales: | ||||||||||||
North American Furniture Solutions | $ | 1,241.9 | $ | 1,216.3 | $ | 1,221.9 | ||||||
ELA Furniture Solutions | 409.9 | 392.2 | 377.3 | |||||||||
Specialty | 219.9 | 205.8 | 111.7 | |||||||||
Consumer | 270.5 | 67.7 | 64.0 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 2,142.2 | $ | 1,882.0 | $ | 1,774.9 | ||||||
Depreciation and Amortization: | ||||||||||||
North American Furniture Solutions | $ | 26.5 | $ | 26.8 | $ | 28.0 | ||||||
ELA Furniture Solutions | 8.2 | 7.6 | 6.6 | |||||||||
Specialty | 7.4 | 6.8 | 2.1 | |||||||||
Consumer | 7.3 | 1.2 | 0.8 | |||||||||
Corporate | 0.4 | — | — | |||||||||
Total | $ | 49.8 | $ | 42.4 | $ | 37.5 | ||||||
Operating Earnings (Losses): | ||||||||||||
North American Furniture Solutions | $ | 125.2 | $ | (27.0 | ) | $ | 76.6 | |||||
ELA Furniture Solutions | 25.9 | 23.1 | 24.7 | |||||||||
Specialty | 13.5 | (5.3 | ) | 1.8 | ||||||||
Consumer | 14.7 | 9.9 | 13.6 | |||||||||
Corporate | (15.9 | ) | (26.4 | ) | (1.8 | ) | ||||||
Total | $ | 163.4 | $ | (25.7 | ) | $ | 114.9 | |||||
Capital Expenditures: | ||||||||||||
North American Furniture Solutions | $ | 31.7 | $ | 28.9 | $ | 33.6 | ||||||
ELA Furniture Solutions | 20.3 | 6.4 | 15.9 | |||||||||
Specialty | 3.7 | 5.5 | 0.7 | |||||||||
Consumer | 7.9 | — | — | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 63.6 | $ | 40.8 | $ | 50.2 | ||||||
Total Assets: | ||||||||||||
North American Furniture Solutions | $ | 500.0 | $ | 457.0 | $ | 427.8 | ||||||
ELA Furniture Solutions | 235.4 | 244.8 | 250.9 | |||||||||
Specialty | 151.6 | 157.7 | 158.0 | |||||||||
Consumer | 231.8 | 18.8 | 16.3 | |||||||||
Corporate | 69.4 | 112.6 | 93.5 | |||||||||
Total | $ | 1,188.2 | $ | 990.9 | $ | 946.5 | ||||||
Goodwill: | ||||||||||||
North American Furniture Solutions | $ | 135.8 | $ | 135.8 | $ | 136.1 | ||||||
ELA Furniture Solutions | 41.9 | 42.6 | 41.1 | |||||||||
Specialty | 49.8 | 49.8 | 49.8 | |||||||||
Consumer | 75.6 | — | — | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 303.1 | $ | 228.2 | $ | 227.0 |
2015 | |||||||
Shares | Weighted Average Grant-Date Fair Value | ||||||
Outstanding, at beginning of year | 62,034 | $ | 20.66 | ||||
Granted | — | $ | — | ||||
Vested | (8,211 | ) | $ | 18.42 | |||
Forfeited or expired | (3,500 | ) | $ | 23.90 | |||
Outstanding, at end of year | 50,323 | $ | 20.80 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 31, 2014 | 1,596,984 | $ | 25.47 | 4.7 | $ | 9.9 | |||||||
Granted at market | 75,954 | $ | 30.22 | ||||||||||
Exercised | (264,850 | ) | $ | 21.78 | |||||||||
Forfeited or expired | (105,465 | ) | $ | 30.99 | |||||||||
Outstanding at May 30, 2015 | 1,302,623 | $ | 26.05 | 4.0 | $ | 4.7 | |||||||
Ending vested + expected to vest | 1,298,463 | $ | 26.04 | 4.0 | $ | 4.7 | |||||||
Exercisable at end of period | 1,044,419 | $ | 26.81 | 3.0 | $ | 3.3 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 31, 2014 | — | ||||||||||||
Granted | 606,301 | $ | 21.66 | ||||||||||
Exercised | (87,232 | ) | $ | 8.16 | |||||||||
Forfeited or expired | (14,400 | ) | $ | 24.39 | |||||||||
Outstanding at May 30, 2015 | 504,669 | 4.2 | $ | 2.1 | |||||||||
Exercisable at end of period | 13,583 | $ | 6.79 |
2015 | ||||
Risk-free interest rates (1) | 0.99 | % | ||
Expected term of options (2) | 3.2 years | |||
Expected volatility (3) | 35 | % | ||
Dividend yield | not applicable | |||
Strike price | $ | 24.39 | ||
Per share value (4) | $ | 8.71 |
2015 | 2014 | 2013 | ||||||||||
Risk-free interest rates (1) | 1.46 | % | 1.62 | % | 0.77 | % | ||||||
Expected term of options (2) | 4.0 years | 5.5 years | 5.5 years | |||||||||
Expected volatility (3) | 36 | % | 46 | % | 47 | % | ||||||
Dividend yield (4) | 1.85 | % | 1.74 | % | 1.98 | % | ||||||
Weighted-average grant-date fair value of stock options: | ||||||||||||
Granted with exercise prices equal to the fair market value of the stock on the date of grant | $ | 7.74 | $ | 10.68 | $ | 6.52 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 31, 2014 | 566,106 | $ | 23.31 | |||||||||
Granted | 116,485 | $ | 30.38 | |||||||||
Forfeited | (13,410 | ) | $ | 25.35 | ||||||||
Released | (163,709 | ) | $ | 24.95 | ||||||||
Outstanding at May 31, 2015 | 505,472 | $ | 24.21 | $ | 13.5 | 1.2 | ||||||
Ending vested + expected to vest | 495,523 | $ | 12.9 | 1.2 |
(In millions) | ||||
Balance at June 1, 2013 | $ | 1.4 | ||
Increases related to current year income tax positions | 0.5 | |||
Increases related to prior year income tax positions | — | |||
Decreases related to prior year income tax positions | — | |||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | — | |||
Balance at May 31, 2014 | 1.8 | |||
Increases related to current year income tax positions | 0.4 | |||
Increases related to prior year income tax positions | 0.1 | |||
Decreases related to prior year income tax positions | (0.4 | ) | ||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | — | |||
Balance at May 30, 2015 | $ | 1.8 |
Column A | Column B | Column C | Column D | Column E | |||||||||||
Description | Balance at beginning of period | Charges to expenses or net sales | Deductions (3) | Balance at end of period | |||||||||||
Year ended May 30, 2015: | |||||||||||||||
Accounts receivable allowances — uncollectible accounts(1) | $ | 3.4 | $ | 0.9 | $ | (1.9 | ) | $ | 2.4 | ||||||
Accounts receivable allowances — credit memo(2) | $ | 0.6 | $ | — | $ | (0.2 | ) | $ | 0.4 | ||||||
Allowance for possible losses on notes receivable | $ | 0.1 | $ | 0.9 | $ | — | $ | 1.0 | |||||||
Valuation allowance for deferred tax asset | $ | 8.5 | $ | (0.6 | ) | $ | 3.2 | $ | 11.1 | ||||||
Year ended May 31, 2014: | |||||||||||||||
Accounts receivable allowances — uncollectible accounts(1) | $ | 3.9 | $ | 1.0 | $ | (1.5 | ) | $ | 3.4 | ||||||
Accounts Receivable allowances — credit memo(2) | $ | 0.5 | $ | 0.1 | $ | — | $ | 0.6 | |||||||
Allowance for possible losses on notes receivable | $ | 0.2 | $ | — | $ | (0.1 | ) | $ | 0.1 | ||||||
Valuation allowance for deferred tax asset | $ | 9.9 | $ | (1.8 | ) | $ | 0.4 | $ | 8.5 | ||||||
Year ended June 1, 2013: | |||||||||||||||
Accounts receivable allowances — uncollectible accounts(1) | $ | 4.1 | $ | 0.4 | $ | (0.6 | ) | $ | 3.9 | ||||||
Accounts receivable allowances — credit memo (2) | $ | 0.3 | $ | 0.2 | $ | — | $ | 0.5 | |||||||
Allowance for possible losses on notes receivable | $ | 0.2 | $ | — | $ | — | $ | 0.2 | |||||||
Valuation allowance for deferred tax asset | $ | 10.3 | $ | (0.5 | ) | $ | 0.1 | $ | 9.9 |
(In millions) | |||
2016 | $ | 5.9 | |
2017 | $ | 5.8 | |
2018 | $ | 5.8 | |
2019 | $ | 5.2 | |
2020 | $ | 5.2 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Net Sales: | ||||||||||||
North American Furniture Solutions | $ | 1,241.9 | $ | 1,216.3 | $ | 1,221.9 | ||||||
ELA Furniture Solutions | 409.9 | 392.2 | 377.3 | |||||||||
Specialty | 219.9 | 205.8 | 111.7 | |||||||||
Consumer | 270.5 | 67.7 | 64.0 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 2,142.2 | $ | 1,882.0 | $ | 1,774.9 | ||||||
Depreciation and Amortization: | ||||||||||||
North American Furniture Solutions | $ | 26.5 | $ | 26.8 | $ | 28.0 | ||||||
ELA Furniture Solutions | 8.2 | 7.6 | 6.6 | |||||||||
Specialty | 7.4 | 6.8 | 2.1 | |||||||||
Consumer | 7.3 | 1.2 | 0.8 | |||||||||
Corporate | 0.4 | — | — | |||||||||
Total | $ | 49.8 | $ | 42.4 | $ | 37.5 | ||||||
Operating Earnings (Losses): | ||||||||||||
North American Furniture Solutions | $ | 125.2 | $ | (27.0 | ) | $ | 76.6 | |||||
ELA Furniture Solutions | 25.9 | 23.1 | 24.7 | |||||||||
Specialty | 13.5 | (5.3 | ) | 1.8 | ||||||||
Consumer | 14.7 | 9.9 | 13.6 | |||||||||
Corporate | (15.9 | ) | (26.4 | ) | (1.8 | ) | ||||||
Total | $ | 163.4 | $ | (25.7 | ) | $ | 114.9 | |||||
Capital Expenditures: | ||||||||||||
North American Furniture Solutions | $ | 31.7 | $ | 28.9 | $ | 33.6 | ||||||
ELA Furniture Solutions | 20.3 | 6.4 | 15.9 | |||||||||
Specialty | 3.7 | 5.5 | 0.7 | |||||||||
Consumer | 7.9 | — | — | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 63.6 | $ | 40.8 | $ | 50.2 | ||||||
Total Assets: | ||||||||||||
North American Furniture Solutions | $ | 500.0 | $ | 457.0 | $ | 427.8 | ||||||
ELA Furniture Solutions | 235.4 | 244.8 | 250.9 | |||||||||
Specialty | 151.6 | 157.7 | 158.0 | |||||||||
Consumer | 231.8 | 18.8 | 16.3 | |||||||||
Corporate | 69.4 | 112.6 | 93.5 | |||||||||
Total | $ | 1,188.2 | $ | 990.9 | $ | 946.5 | ||||||
Goodwill: | ||||||||||||
North American Furniture Solutions | $ | 135.8 | $ | 135.8 | $ | 136.1 | ||||||
ELA Furniture Solutions | 41.9 | 42.6 | 41.1 | |||||||||
Specialty | 49.8 | 49.8 | 49.8 | |||||||||
Consumer | 75.6 | — | — | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 303.1 | $ | 228.2 | $ | 227.0 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Net Sales: | ||||||||||||
Systems | $ | 563.4 | $ | 571.6 | $ | 572.9 | ||||||
Seating | 805.5 | 658.2 | 609.8 | |||||||||
Freestanding and storage | 484.1 | 386.4 | 395.0 | |||||||||
Other (1) | 289.2 | 265.8 | 197.2 | |||||||||
Total | $ | 2,142.2 | $ | 1,882.0 | $ | 1,774.9 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Net Sales: | ||||||||||||
United States | $ | 1,640.6 | $ | 1,406.3 | $ | 1,291.5 | ||||||
International | 501.6 | 475.7 | 483.4 | |||||||||
Total | $ | 2,142.2 | $ | 1,882.0 | $ | 1,774.9 |
(In millions) | 2015 | 2014 | 2013 | |||||||||
Long-lived assets: | ||||||||||||
United States | $ | 224.2 | $ | 177.0 | $ | 169.2 | ||||||
International | 53.8 | 35.4 | 29.8 | |||||||||
Total | $ | 278.0 | $ | 212.4 | $ | 199.0 |
(In millions) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
Balance, June 1, 2013 | 227.0 | 62.3 | 289.3 | |||||||||
Foreign currency translation adjustments | 0.6 | — | 0.6 | |||||||||
Sale of owned dealers | (0.4 | ) | — | (0.4 | ) | |||||||
China manufacturing and distribution acquisition | 1.0 | — | 1.0 | |||||||||
Impairment charges | — | (21.4 | ) | (21.4 | ) | |||||||
Balance, May 31, 2014 | $ | 228.2 | $ | 40.9 | $ | 269.1 | ||||||
Foreign currency translation adjustments | (0.7 | ) | — | (0.7 | ) | |||||||
DWR acquisition | 75.6 | 55.1 | 130.7 | |||||||||
Impairment charges | — | (10.8 | ) | (10.8 | ) | |||||||
Balance, May 30, 2015 | 303.1 | 85.2 | 388.3 |
May 30, 2015 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 18.8 | $ | 55.3 | $ | 5.0 | $ | 79.1 | |||||||
Accumulated amortization | 11.7 | 12.0 | 3.1 | 26.8 | |||||||||||
Net | $ | 7.1 | $ | 43.3 | $ | 1.9 | $ | 52.3 | |||||||
May 31, 2014 | |||||||||||||||
Patent and Trademarks | Customer Relationships | Other | Total | ||||||||||||
Gross carrying value | $ | 19.2 | $ | 43.6 | $ | 4.8 | $ | 67.6 | |||||||
Accumulated amortization | 12.7 | 8.3 | 2.4 | 23.4 | |||||||||||
Net | $ | 6.5 | $ | 35.3 | $ | 2.4 | $ | 44.2 |
(In millions) | |||
2016 | $ | 5.9 | |
2017 | $ | 5.8 | |
2018 | $ | 5.8 | |
2019 | $ | 5.2 | |
2020 | $ | 5.2 |
(In millions) | Retention Level (per occurrence) | |||
General liability and auto liability/physical damage | $ | 1.00 | ||
Workers' compensation and property | $ | 0.75 |
• | Level 1 — Financial instruments with unadjusted, quoted prices listed on active market exchanges. |
• | Level 2 — Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. Financial instrument values are determined using prices for recently traded financial instruments with similar underlying terms and direct or indirect observational inputs, such as interest rates and yield curves at commonly quoted intervals. |
• | Level 3 — Financial instruments not actively traded on a market exchange and there is little, if any, market activity. Values are determined using significant unobservable inputs or valuation techniques. |
(In millions) | Fiscal Year | ||||||||
Balance Sheet Location | May 30, 2015 | May 31, 2014 | |||||||
Foreign currency forward contracts not designated as hedges | Current Assets: Other | $ | 0.7 | $ | 0.2 | ||||
Foreign currency forward contracts not designated as hedges | Current Liabilities: Other Accrued Liabilities | $ | 0.2 | $ | 0.1 |
(In millions) | Fiscal Year | ||||||||||||
Recognized Income on Derivative (Gain) Loss Location | May 30, 2015 | May 31, 2014 | June 1, 2013 | ||||||||||
Foreign currency forward contracts | Other expenses (income): Other, net | $ | (2.1 | ) | $ | (0.1 | ) | $ | — |
May 30, 2015 | ||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | ||||||||||||
Asset-backed securities | $ | 0.2 | $ | — | $ | — | $ | 0.2 | ||||||||
Corporate debt securities | 0.6 | — | — | 0.6 | ||||||||||||
Government obligations | 0.5 | — | — | 0.5 | ||||||||||||
Mortgage-backed securities | 4.4 | — | — | 4.4 | ||||||||||||
Total | $ | 5.7 | $ | — | $ | — | $ | 5.7 | ||||||||
May 31, 2014 | ||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | ||||||||||||
Asset-backed securities | $ | 0.4 | $ | — | $ | — | $ | 0.4 | ||||||||
Corporate debt securities | 1.2 | — | — | 1.2 | ||||||||||||
Government obligations | 7.9 | — | — | 7.9 | ||||||||||||
Mortgage-backed securities | 1.6 | — | — | 1.6 | ||||||||||||
Total | $ | 11.1 | $ | — | $ | — | $ | 11.1 |