(in millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||
Equity earnings from nonconsolidated affiliates | $ | 1.6 | $ | 0.4 | $ | 0.1 |
(in millions) | June 3, 2017 | May 28, 2016 | ||||
Investments in nonconsolidated affiliates | $ | 16.2 | $ | 4.2 |
(In millions) | Retention Level (per occurrence) | |||
General liability and auto liability/physical damage | $ | 1.00 | ||
Workers' compensation and property | $ | 0.75 |
(In millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||
Interest and penalty expense (income) | $ | 0.2 | $ | (0.1 | ) | $ | 0.4 | ||||
Liability for interest and penalties | $ | 0.8 | $ | 0.7 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Accrual balance, beginning | $ | 43.9 | $ | 39.3 | $ | 37.7 | ||||||
Accrual for warranty matters | 22.8 | 25.5 | 25.0 | |||||||||
Settlements | (19.0 | ) | (20.9 | ) | (23.4 | ) | ||||||
Accrual balance, ending | $ | 47.7 | $ | 43.9 | $ | 39.3 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
(In millions) | Domestic | International | Domestic | International | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 1.0 | $ | 104.4 | $ | 1.1 | $ | 112.0 | $ | 5.9 | $ | 7.7 | |||||||||||
Interest cost | 0.1 | 2.7 | — | 3.8 | 0.2 | 0.2 | |||||||||||||||||
Foreign exchange impact | — | (12.5 | ) | — | (4.6 | ) | — | — | |||||||||||||||
Actuarial (gain) loss | — | 23.4 | — | (4.4 | ) | (0.4 | ) | (1.3 | ) | ||||||||||||||
Benefits paid | (0.1 | ) | (4.2 | ) | (0.1 | ) | (2.4 | ) | (0.7 | ) | (0.7 | ) | |||||||||||
Benefit obligation at end of year | $ | 1.0 | $ | 113.8 | $ | 1.0 | $ | 104.4 | $ | 5.0 | $ | 5.9 | |||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | 85.0 | $ | — | $ | 92.0 | $ | — | $ | — | |||||||||||
Actual return on plan assets | — | 9.6 | — | (1.3 | ) | — | — | ||||||||||||||||
Foreign exchange impact | — | (10.3 | ) | — | (3.7 | ) | — | — | |||||||||||||||
Employer contributions | 0.1 | 0.4 | 0.1 | 0.4 | 0.7 | 0.7 | |||||||||||||||||
Benefits paid | (0.1 | ) | (4.2 | ) | (0.1 | ) | (2.4 | ) | (0.7 | ) | (0.7 | ) | |||||||||||
Fair value of plan assets at end of year | $ | — | $ | 80.5 | $ | — | $ | 85.0 | $ | — | $ | — | |||||||||||
Funded status: | |||||||||||||||||||||||
Under funded status at end of year | $ | (1.0 | ) | $ | (33.3 | ) | $ | (1.0 | ) | $ | (19.4 | ) | $ | (5.0 | ) | $ | (5.9 | ) | |||||
Components of the amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Current liabilities | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | $ | — | $ | (0.7 | ) | $ | (0.7 | ) | |||||||
Non-current liabilities | $ | (0.9 | ) | $ | (33.3 | ) | $ | (0.9 | ) | $ | (19.4 | ) | $ | (4.3 | ) | $ | (5.2 | ) | |||||
Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes: | |||||||||||||||||||||||
Unrecognized net actuarial loss (gain) | $ | 0.3 | $ | 50.9 | $ | 0.3 | $ | 39.3 | $ | (0.6 | ) | $ | (0.2 | ) | |||||||||
Accumulated other comprehensive loss | $ | 0.3 | $ | 50.9 | $ | 0.3 | $ | 39.3 | $ | (0.6 | ) | $ | (0.2 | ) |
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets | |||||||
(In millions) | 2017 | 2016 | |||||
Projected benefit obligation | $ | 114.8 | $ | 105.4 | |||
Accumulated benefit obligation | $ | 111.0 | $ | 101.8 | |||
Fair value of plan assets | $ | 80.5 | $ | 85.0 |
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income: | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||||
Domestic: | |||||||||||||||||||||||
Interest cost | $ | 0.1 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | 0.2 | |||||||||||
Net periodic benefit cost | $ | 0.1 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | 0.2 | |||||||||||
International: | |||||||||||||||||||||||
Interest cost | $ | 2.7 | $ | 3.8 | $ | 4.3 | |||||||||||||||||
Expected return on plan assets | (4.7 | ) | (5.4 | ) | (5.5 | ) | |||||||||||||||||
Net amortization | 2.2 | 2.8 | 1.8 | ||||||||||||||||||||
Net periodic benefit cost | $ | 0.2 | $ | 1.2 | $ | 0.6 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income): | |||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Domestic: | |||||||||||||||
Net actuarial gain | $ | — | $ | — | $ | (0.4 | ) | $ | (1.3 | ) | |||||
Total recognized in other comprehensive loss | $ | — | $ | — | $ | (0.4 | ) | $ | (1.3 | ) | |||||
International: | |||||||||||||||
Net actuarial loss | $ | 18.6 | $ | 2.2 | |||||||||||
Net amortization | (2.2 | ) | (2.8 | ) | |||||||||||
Total recognized in other comprehensive loss | $ | 16.4 | $ | (0.6 | ) |
The weighted-average used in the determination of net periodic benefit cost: | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Percentages) | Domestic | International | Domestic | International | Domestic | International | |||||
Discount rate | 3.51 | 3.43 | 3.41 | 3.50 | 3.44 | 4.40 | |||||
Compensation increase rate | n/a | 2.95 | n/a | 3.20 | n/a | 3.35 | |||||
Expected return on plan assets | n/a | 6.10 | n/a | 6.10 | n/a | 6.10 | |||||
The weighted-average used in the determination of the projected benefit obligations: | |||||||||||
Discount rate | 3.53 | 2.49 | 3.51 | 3.43 | 3.41 | 3.50 | |||||
Compensation increase rate | n/a | 3.25 | n/a | 2.95 | n/a | 3.20 |
(In millions) | 1 Percent Increase | 1 Percent Decrease | |||||
Effect on total fiscal 2017 service and interest cost components | $ | — | $ | — | |||
Effect on post-retirement benefit obligation at June 3, 2017 | $ | 0.2 | $ | (0.2 | ) |
Asset Category | Targeted Asset Allocation Percentage | Percentage of Plan Assets at Year End | ||||||||||
2017 | 2016 | |||||||||||
Fixed income | 20 | 27 | 24 | |||||||||
Common collective trusts | 80 | 73 | 76 | |||||||||
Total | 100 | 100 | ||||||||||
(In millions) | International Plan as of June 3, 2017 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | ||||||
Foreign government obligations | — | 21.4 | 21.4 | |||||||||
Common collective trusts-balanced | — | 58.9 | 58.9 | |||||||||
Total | $ | 0.2 | $ | 80.3 | $ | 80.5 | ||||||
(In millions) | International Plan as of May 28, 2016 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | ||||||
Foreign government obligations | — | 20.5 | 20.5 | |||||||||
Common collective trusts-balanced | — | 64.3 | 64.3 | |||||||||
Total | $ | 0.2 | $ | 84.8 | $ | 85.0 |
(In millions) | Pension Benefits Domestic | Pension Benefits International | Post-Retirement Benefits | ||||||||
2018 | $ | 0.1 | $ | 1.7 | $ | 0.7 | |||||
2019 | $ | 0.1 | $ | 2.1 | $ | 0.6 | |||||
2020 | $ | 0.1 | $ | 2.1 | $ | 0.6 | |||||
2021 | $ | 0.1 | $ | 2.1 | $ | 0.5 | |||||
2022 | $ | 0.1 | $ | 2.6 | $ | 0.5 | |||||
2023-2027 | $ | 0.3 | $ | 15.5 | $ | 1.7 |
Year Ended | |||||||||||
(In millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||
Cumulative translation adjustments at beginning of period | $ | (29.6 | ) | $ | (20.8 | ) | $ | (11.1 | ) | ||
Translation adjustments (net of tax of $ - , ($0.3) and $0.3) | (7.2 | ) | (8.8 | ) | (9.7 | ) | |||||
Balance at end of period | (36.8 | ) | (29.6 | ) | (20.8 | ) | |||||
Pension and other post-retirement benefit plans at beginning of period | (34.9 | ) | (35.4 | ) | (26.8 | ) | |||||
Adjustments to pension and other post-retirement benefit plans (net of tax of $3.7, ($0.7) and $2.6) | (14.5 | ) | (2.0 | ) | (10.0 | ) | |||||
Reclassification to earnings - operating expenses (net of tax of ($0.4), ($0.7) and ($0.4)) | 1.8 | 2.5 | 1.4 | ||||||||
Balance at end of period | (47.6 | ) | (34.9 | ) | (35.4 | ) | |||||
Interest rate swap agreement at beginning of period | — | — | — | ||||||||
Valuation adjustments (net of tax of ($1.2), $ - and $ -) | 2.1 | — | — | ||||||||
Balance at end of period | 2.1 | — | — | ||||||||
Available-for-sale Securities at beginning of period | — | — | — | ||||||||
Unrealized holding gain (net of tax of $ - , $ - and $ -) | 0.1 | — | — | ||||||||
Balance at end of period | 0.1 | — | — | ||||||||
Total accumulated other comprehensive loss | $ | (82.2 | ) | $ | (64.5 | ) | $ | (56.2 | ) |
(In millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | |||||||||
Employee stock purchase program | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||
Stock option plans | 2.0 | 1.9 | 2.6 | |||||||||
Restricted stock grants | — | — | 0.1 | |||||||||
Restricted stock units | 3.6 | 3.2 | 3.7 | |||||||||
Performance share units | 2.8 | 6.5 | 3.3 | |||||||||
Total | $ | 8.7 | $ | 11.9 | $ | 10.0 | ||||||
Tax benefit | $ | 3.1 | $ | 4.3 | $ | 3.6 |
2017 | 2016 | 2015 | |||||||||
Risk-free interest rates (1) | 1.01 | % | 1.51 | % | 1.46 | % | |||||
Expected term of options (2) | 4.0 years | 4.0 years | 4.0 years | ||||||||
Expected volatility (3) | 26 | % | 33 | % | 36 | % | |||||
Dividend yield (4) | 2.13 | % | 2.03 | % | 1.85 | % | |||||
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 | $ | 5.50 | $ | 6.73 | $ | 7.74 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 28, 2016 | 921,380 | $ | 25.80 | 4.20 | $ | 5.5 | |||||||
Granted at market | 745,141 | $ | 31.86 | ||||||||||
Exercised | (327,299 | ) | $ | 28.84 | |||||||||
Forfeited or expired | (9,520 | ) | $ | 38.11 | |||||||||
Outstanding at June 3, 2017 | 1,329,702 | $ | 28.36 | 7.26 | $ | 5.8 | |||||||
Ending vested + expected to vest | 1,325,647 | $ | 28.35 | 7.25 | $ | 5.8 | |||||||
Exercisable at end of period | 498,522 | $ | 22.95 | 4.37 | $ | 4.9 |
2017 | |||||||
Shares | Weighted Average Grant-Date Fair Value | ||||||
Outstanding at May 28, 2016 | 20,823 | $ | 21.35 | ||||
Vested | (20,323 | ) | $ | 21.38 | |||
Forfeited | (500 | ) | $ | 20.17 | |||
Outstanding at June 3, 2017 | — | $ | — |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 28, 2016 | 377,861 | $ | 27.83 | $ | 12.0 | 1.40 | ||||||
Granted | 114,778 | $ | 31.83 | |||||||||
Forfeited | (12,951 | ) | $ | 29.25 | ||||||||
Released | (94,736 | ) | $ | 28.70 | ||||||||
Outstanding at June 3, 2017 | 384,952 | $ | 28.73 | $ | 12.6 | 1.14 | ||||||
Ending vested + expected to vest | 379,037 | 29.30 | $ | 12.4 | 1.13 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 28, 2016 | 433,714 | $ | 31.74 | $ | 13.7 | 1.20 | ||||||
Granted | 141,218 | $ | 29.40 | |||||||||
Forfeited | (43,945 | ) | $ | 35.75 | ||||||||
Released | (113,040 | ) | $ | 29.34 | ||||||||
Outstanding at June 3, 2017 | 417,947 | $ | 31.18 | $ | 13.7 | 1.03 | ||||||
Ending vested + expected to vest | 413,358 | $ | 31.23 | $ | 13.5 | 1.03 |
2017 | 2016 | ||||||
Risk-free interest rates (1) | 1.29 | % | 1.07 | % | |||
Expected term of options (2) | 2.1 years | 3.1 years | |||||
Expected volatility (3) | 35 | % | 35 | % | |||
Dividend yield | not applicable | not applicable | |||||
Strike price | $ | 24.39 | 24.39 | ||||
Per share value (4) | $ | 3.24 | 6.52 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 28, 2016 | 500,376 | $ | 24.07 | 3.20 | $ | 0.4 | |||||||
Granted | 40,425 | $ | 24.63 | ||||||||||
Exercised | (2,957 | ) | $ | 6.40 | |||||||||
Forfeited | (11,600 | ) | $ | 24.39 | |||||||||
Outstanding at June 3, 2017 | 526,244 | $ | 24.20 | 2.20 | $ | 0.1 | |||||||
Exercisable at end of period | 46,758 | $ | 22.30 | 2.20 | $ | 0.1 |
2017 | 2016 | 2015 | |||||||
Shares of common stock | 9,982 | 21,988 | 13,752 | ||||||
Shares through the deferred compensation program | 2,582 | 3,118 | — |
(In millions, except shares) | 2017 | 2016 | 2015 | ||||||||
Numerator: | |||||||||||
Numerator for both basic and diluted EPS, Net earnings attributable to Herman Miller, Inc. | $ | 123.9 | $ | 136.7 | $ | 97.5 | |||||
Denominator: | |||||||||||
Denominator for basic EPS, weighted-average common shares outstanding | 59,871,805 | 59,844,540 | 59,475,297 | ||||||||
Potentially dilutive shares resulting from stock plans | 682,784 | 684,729 | 649,069 | ||||||||
Denominator for diluted EPS | 60,554,589 | 60,529,269 | 60,124,366 |
(in millions) | June 3, 2017 | May 28, 2016 | ||||
Investments in nonconsolidated affiliates | $ | 16.2 | $ | 4.2 |
(in millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||
Equity earnings from nonconsolidated affiliates | $ | 1.6 | $ | 0.4 | $ | 0.1 |
Ownership Interest | June 3, 2017 | May 28, 2016 |
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% |
Naughtone Holdings Limited | 50.0% | —% |
(in millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||
Sales to nonconsolidated affiliates | $ | 4.0 | $ | 2.5 | $ | 2.5 | |||
Purchases from nonconsolidated affiliates | $ | 4.2 | $ | 0.9 | $ | 0.5 |
(in millions) | June 3, 2017 | May 28, 2016 | ||||
Receivables from nonconsolidated affiliates | $ | 0.8 | $ | 0.4 | ||
Payables to nonconsolidated affiliates | $ | 0.5 | $ | 0.1 |
Ownership Interest | June 3, 2017 | May 28, 2016 |
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% |
Naughtone Holdings Limited | 50.0% | —% |
(In millions) | Fair Value Measurements | ||||||||||||
June 3, 2017 | May 28, 2016 | ||||||||||||
Financial Assets | Quoted Prices With Other Observable Inputs (Level 2) | Management Estimates (Level 3) | Quoted Prices With Other Observable Inputs (Level 2) | Management Estimates (Level 3) | |||||||||
Available-for-sale securities: | |||||||||||||
Mutual funds - fixed income | $ | 7.7 | $ | — | $ | 6.4 | $ | — | |||||
Mutual funds - equity | 0.9 | — | 0.7 | — | |||||||||
Government obligations | — | — | 0.4 | — | |||||||||
Foreign currency forward contracts | 0.5 | — | 0.5 | — | |||||||||
Interest rate swap agreement | 3.3 | — | — | — | |||||||||
Deferred compensation plan | 12.8 | — | 7.9 | — | |||||||||
Total | $ | 25.2 | $ | — | $ | 15.9 | $ | — | |||||
Financial Liabilities | |||||||||||||
Foreign currency forward contracts | $ | 0.6 | $ | — | $ | 0.8 | $ | — | |||||
Contingent consideration | — | 0.5 | — | 2.7 | |||||||||
Total | $ | 0.6 | $ | 0.5 | $ | 0.8 | $ | 2.7 |
(In millions) | June 3, 2017 | May 28, 2016 | ||||||
Carrying value | $ | 199.9 | $ | 221.9 | ||||
Fair value | $ | 213.0 | $ | 241.7 |
(In millions) | June 3, 2017 | May 28, 2016 | ||||||
Carrying value | $ | 199.9 | $ | 221.9 | ||||
Fair value | $ | 213.0 | $ | 241.7 |
(In millions) | Fair Value Measurements | ||||||||||||
June 3, 2017 | May 28, 2016 | ||||||||||||
Financial Assets | Quoted Prices With Other Observable Inputs (Level 2) | Management Estimates (Level 3) | Quoted Prices With Other Observable Inputs (Level 2) | Management Estimates (Level 3) | |||||||||
Available-for-sale securities: | |||||||||||||
Mutual funds - fixed income | $ | 7.7 | $ | — | $ | 6.4 | $ | — | |||||
Mutual funds - equity | 0.9 | — | 0.7 | — | |||||||||
Government obligations | — | — | 0.4 | — | |||||||||
Foreign currency forward contracts | 0.5 | — | 0.5 | — | |||||||||
Interest rate swap agreement | 3.3 | — | — | — | |||||||||
Deferred compensation plan | 12.8 | — | 7.9 | — | |||||||||
Total | $ | 25.2 | $ | — | $ | 15.9 | $ | — | |||||
Financial Liabilities | |||||||||||||
Foreign currency forward contracts | $ | 0.6 | $ | — | $ | 0.8 | $ | — | |||||
Contingent consideration | — | 0.5 | — | 2.7 | |||||||||
Total | $ | 0.6 | $ | 0.5 | $ | 0.8 | $ | 2.7 |
(In millions) | ||||||||
Contingent Consideration | June 3, 2017 | May 28, 2016 | ||||||
Beginning balance | $ | 2.7 | $ | 2.6 | ||||
Net realized gains | (0.2 | ) | — | |||||
Foreign currency translation adjustments | — | (0.1 | ) | |||||
Settlements | (2.0 | ) | (2.5 | ) | ||||
Purchases or additions | — | 2.7 | ||||||
Ending balance | $ | 0.5 | $ | 2.7 |
June 3, 2017 | May 28, 2016 | ||||||||||||||||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | Cost | Unrealized Gain | Unrealized Loss | Market Value | |||||||||||||||||||||||
Mutual funds - fixed income | $ | 7.6 | $ | 0.1 | $ | — | $ | 7.7 | $ | 6.4 | $ | — | $ | — | $ | 6.4 | |||||||||||||||
Mutual funds - equity | 0.9 | — | — | 0.9 | 0.7 | — | — | 0.7 | |||||||||||||||||||||||
Government obligations | — | — | — | — | 0.4 | — | — | 0.4 | |||||||||||||||||||||||
Total | $ | 8.5 | $ | 0.1 | $ | — | $ | 8.6 | $ | 7.5 | $ | — | $ | — | $ | 7.5 |
(In millions) | Balance Sheet Location | June 3, 2017 | May 28, 2016 | ||||||
Designated derivatives: | |||||||||
Interest rate swap | Long-term assets: Other assets | $ | 3.3 | $ | — | ||||
Non-designated derivatives: | |||||||||
Foreign currency forward contracts | Current assets: Other | $ | 0.5 | $ | 0.5 | ||||
Foreign currency forward contracts | Current liabilities: Other accrued liabilities | $ | 0.6 | $ | 0.8 |
(In millions) | Fiscal Year | ||||||||||||
Statement of Comprehensive Income Location | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||||
Gain recognized on foreign currency forward contracts | Other expenses (income): Other, net | $ | (1.2 | ) | $ | (0.7 | ) | $ | (2.1 | ) |
(In millions) | Fiscal Year | |||||||||||
June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||||
Interest rate swap | $ | 2.1 | $ | — | $ | — |
(In millions) | ||||||||
Contingent Consideration | June 3, 2017 | May 28, 2016 | ||||||
Beginning balance | $ | 2.7 | $ | 2.6 | ||||
Net realized gains | (0.2 | ) | — | |||||
Foreign currency translation adjustments | — | (0.1 | ) | |||||
Settlements | (2.0 | ) | (2.5 | ) | ||||
Purchases or additions | — | 2.7 | ||||||
Ending balance | $ | 0.5 | $ | 2.7 |
• | 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) | 2017 | 2016 | 2015 | ||||||||
Domestic | $ | 131.4 | $ | 154.9 | $ | 142.5 | |||||
Foreign | 46.2 | 41.7 | 2.7 | ||||||||
Total | $ | 177.6 | $ | 196.6 | $ | 145.2 |
(In millions) | 2017 | 2016 | 2015 | ||||||||
Current: Domestic - Federal | $ | 28.7 | $ | 36.4 | $ | 43.6 | |||||
Domestic - State | 2.3 | 6.4 | 6.3 | ||||||||
Foreign | 11.1 | 6.3 | 6.1 | ||||||||
42.1 | 49.1 | 56.0 | |||||||||
Deferred: Domestic - Federal | 9.2 | 7.5 | (5.9 | ) | |||||||
Domestic - State | 2.8 | 0.2 | (0.6 | ) | |||||||
Foreign | 1.0 | 2.7 | (2.3 | ) | |||||||
13.0 | 10.4 | (8.8 | ) | ||||||||
Total income tax provision | $ | 55.1 | $ | 59.5 | $ | 47.2 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Income taxes computed at the United States Statutory rate of 35% | $ | 62.2 | $ | 68.8 | $ | 50.8 | ||||||
Increase (decrease) in taxes resulting from: | ||||||||||||
Foreign statutory rate differences | (5.7 | ) | (4.3 | ) | (1.0 | ) | ||||||
Manufacturing deduction under the American Jobs Creation Act of 2004 | (3.4 | ) | (4.8 | ) | (4.8 | ) | ||||||
State taxes | 3.8 | 5.2 | 4.2 | |||||||||
Tax on undistributed foreign earnings | — | — | (3.9 | ) | ||||||||
United Kingdom patent box deduction for research and development | (2.6 | ) | (1.7 | ) | (0.3 | ) | ||||||
Sale of manufacturing facility in the United Kingdom | — | (1.6 | ) | — | ||||||||
Other, net | 0.8 | (2.1 | ) | 2.2 | ||||||||
Income tax expense | $ | 55.1 | $ | 59.5 | $ | 47.2 | ||||||
Effective tax rate | 31.1 | % | 30.3 | % | 32.6 | % |
(In millions) | 2017 | 2016 | ||||||
Deferred tax assets: | ||||||||
Compensation-related accruals | $ | 22.7 | $ | 23.2 | ||||
Accrued pension and post-retirement benefit obligations | 10.9 | 9.2 | ||||||
Deferred revenue | 5.3 | 5.6 | ||||||
Inventory related | 4.1 | 3.8 | ||||||
Reserves for uncollectible accounts and notes receivable | 1.0 | 1.2 | ||||||
Other reserves and accruals | 6.1 | 3.0 | ||||||
Warranty | 17.0 | 15.7 | ||||||
State and local tax net operating loss carryforwards and credits | 2.7 | 5.7 | ||||||
Federal net operating loss carryforward | 5.0 | 7.1 | ||||||
Foreign tax net operating loss carryforwards and credits | 10.0 | 14.6 | ||||||
Accrued step rent and tenant reimbursements | 4.7 | 1.9 | ||||||
Other | 4.2 | 2.8 | ||||||
Subtotal | 93.7 | 93.8 | ||||||
Valuation allowance | (10.0 | ) | (10.6 | ) | ||||
Total | $ | 83.7 | $ | 83.2 | ||||
Deferred tax liabilities: | ||||||||
Book basis in property in excess of tax basis | $ | (37.4 | ) | $ | (24.8 | ) | ||
Intangible assets | (47.3 | ) | (47.4 | ) | ||||
Other | (3.2 | ) | (2.2 | ) | ||||
Total | $ | (87.9 | ) | $ | (74.4 | ) |
(In millions) | ||||
Balance at May 30, 2015 | $ | 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 | (0.1 | ) | ||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | (0.4 | ) | ||
Balance at May 28, 2016 | 1.7 | |||
Increases related to current year income tax positions | 0.3 | |||
Increases related to prior year income tax positions | 1.1 | |||
Decreases related to prior year income tax positions | (0.1 | ) | ||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | (0.1 | ) | ||
Balance at June 3, 2017 | $ | 2.8 |
(In millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||
Interest and penalty expense (income) | $ | 0.2 | $ | (0.1 | ) | $ | 0.4 | ||||
Liability for interest and penalties | $ | 0.8 | $ | 0.7 |
June 3, 2017 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 20.5 | $ | 55.3 | $ | 7.5 | $ | 83.3 | |||||||
Accumulated amortization | 13.3 | 19.7 | 4.9 | 37.9 | |||||||||||
Net | $ | 7.2 | $ | 35.6 | $ | 2.6 | $ | 45.4 | |||||||
May 28, 2016 | |||||||||||||||
Patent and Trademarks | Customer Relationships | Other | Total | ||||||||||||
Gross carrying value | $ | 19.8 | $ | 55.7 | $ | 7.5 | $ | 83.0 | |||||||
Accumulated amortization | 12.3 | 15.9 | 4.0 | 32.2 | |||||||||||
Net | $ | 7.5 | $ | 39.8 | $ | 3.5 | $ | 50.8 |
(In millions) | June 3, 2017 | May 28, 2016 | ||||||
Finished goods and work in process | $ | 119.0 | $ | 102.1 | ||||
Raw materials | 33.4 | 26.1 | ||||||
Total | $ | 152.4 | $ | 128.2 |
(In millions) | |||
2018 | $ | 47.0 | |
2019 | $ | 42.2 | |
2020 | $ | 35.3 | |
2021 | $ | 32.5 | |
2022 | $ | 30.7 | |
Thereafter | $ | 141.5 |
(In millions) | June 3, 2017 | May 28, 2016 | |||||
Series B Senior Notes, 6.42%, due January 3, 2018 | $ | 149.9 | $ | 149.9 | |||
Debt securities, 6.0%, due March 1, 2021 | 50.0 | 50.0 | |||||
Syndicated Revolving Line of Credit, due September 2021 | — | 22.0 | |||||
Total | $ | 199.9 | $ | 221.9 |
(In millions) | |||
2018 | $ | — | |
2019 | $ | — | |
2020 | $ | — | |
2021 | $ | 50.0 | |
2022 | $ | — | |
Thereafter | $ | 149.9 |
Assets Acquired and Liabilities Assumed on July 28, 2014 | |||
(In millions) | Fair Value | ||
Purchase price | $ | 155.2 | |
Fair value of the assets acquired: | |||
Cash | 1.2 | ||
Accounts receivable | 2.2 | ||
Inventory | 47.4 | ||
Current deferred tax asset | 1.5 | ||
Other current assets | 5.5 | ||
Goodwill | 75.6 | ||
Other intangible assets | 68.5 | ||
Property | 32.0 | ||
Other long term assets | 2.4 | ||
Total assets acquired | 236.3 | ||
Fair value of liabilities assumed: | |||
Accounts payable | 20.8 | ||
Accrued compensation and benefits | 1.6 | ||
Other accrued liabilities | 12.3 | ||
Long term deferred tax liability | 14.5 | ||
Other long term liabilities | 0.4 | ||
Total liabilities assumed | 49.6 | ||
Redeemable noncontrolling interests | 25.7 | ||
Noncontrolling interests | 5.8 | ||
Net assets acquired | $ | 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 |
Year Ended | ||||||||
(In millions) | June 3, 2017 | May 28, 2016 | ||||||
Balance at beginning of period | $ | 27.0 | $ | 30.4 | ||||
Purchase of redeemable noncontrolling interests | (1.5 | ) | — | |||||
Net income attributable to redeemable noncontrolling interests | 0.2 | 0.5 | ||||||
Redemption value adjustment | (1.2 | ) | (4.0 | ) | ||||
Other adjustments | 0.1 | 0.1 | ||||||
Balance at end of period | $ | 24.6 | $ | 27.0 |
(In millions, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2017 | Net sales | $ | 598.6 | $ | 577.5 | $ | 524.9 | $ | 577.2 | |||||||
Gross margin (1) | 230.0 | 218.0 | 195.5 | 220.9 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. | 36.3 | 31.7 | 22.5 | 33.4 | ||||||||||||
Earnings per share-basic (1) | 0.61 | 0.53 | 0.38 | 0.56 | ||||||||||||
Earnings per share-diluted | 0.60 | 0.53 | 0.37 | 0.55 | ||||||||||||
2016 | Net sales | $ | 565.4 | $ | 580.4 | $ | 536.5 | $ | 582.6 | |||||||
Gross Margin | 216.8 | 224.4 | 207.8 | 225.2 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. (1) | 33.5 | 34.7 | 27.9 | 40.7 | ||||||||||||
Earnings per share-basic | 0.56 | 0.58 | 0.46 | 0.68 | ||||||||||||
Earnings per share-diluted | 0.56 | 0.57 | 0.46 | 0.67 | ||||||||||||
2015 | Net sales | $ | 509.7 | $ | 565.4 | $ | 516.4 | $ | 550.7 | |||||||
Gross margin | 185.6 | 205.7 | 190.5 | 209.6 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. (1) | 25.2 | 27.8 | 21.0 | 23.4 | ||||||||||||
Earnings per share-basic | 0.43 | 0.47 | 0.35 | 0.39 | ||||||||||||
Earnings per share-diluted | 0.42 | 0.46 | 0.35 | 0.39 |
Year Ended | ||||||||
(In millions) | June 3, 2017 | May 28, 2016 | ||||||
Balance at beginning of period | $ | 27.0 | $ | 30.4 | ||||
Purchase of redeemable noncontrolling interests | (1.5 | ) | — | |||||
Net income attributable to redeemable noncontrolling interests | 0.2 | 0.5 | ||||||
Redemption value adjustment | (1.2 | ) | (4.0 | ) | ||||
Other adjustments | 0.1 | 0.1 | ||||||
Balance at end of period | $ | 24.6 | $ | 27.0 |
Year Ended | ||||
(In millions) | June 3, 2017 | |||
Beginning Balance | $ | 0.4 | ||
Restructuring expenses | 5.4 | |||
Payments | (3.4 | ) | ||
Ending Balance | $ | 2.4 |
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets | |||||||
(In millions) | 2017 | 2016 | |||||
Projected benefit obligation | $ | 114.8 | $ | 105.4 | |||
Accumulated benefit obligation | $ | 111.0 | $ | 101.8 | |||
Fair value of plan assets | $ | 80.5 | $ | 85.0 |
Year Ended | |||||||||||
(In millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||
Cumulative translation adjustments at beginning of period | $ | (29.6 | ) | $ | (20.8 | ) | $ | (11.1 | ) | ||
Translation adjustments (net of tax of $ - , ($0.3) and $0.3) | (7.2 | ) | (8.8 | ) | (9.7 | ) | |||||
Balance at end of period | (36.8 | ) | (29.6 | ) | (20.8 | ) | |||||
Pension and other post-retirement benefit plans at beginning of period | (34.9 | ) | (35.4 | ) | (26.8 | ) | |||||
Adjustments to pension and other post-retirement benefit plans (net of tax of $3.7, ($0.7) and $2.6) | (14.5 | ) | (2.0 | ) | (10.0 | ) | |||||
Reclassification to earnings - operating expenses (net of tax of ($0.4), ($0.7) and ($0.4)) | 1.8 | 2.5 | 1.4 | ||||||||
Balance at end of period | (47.6 | ) | (34.9 | ) | (35.4 | ) | |||||
Interest rate swap agreement at beginning of period | — | — | — | ||||||||
Valuation adjustments (net of tax of ($1.2), $ - and $ -) | 2.1 | — | — | ||||||||
Balance at end of period | 2.1 | — | — | ||||||||
Available-for-sale Securities at beginning of period | — | — | — | ||||||||
Unrealized holding gain (net of tax of $ - , $ - and $ -) | 0.1 | — | — | ||||||||
Balance at end of period | 0.1 | — | — | ||||||||
Total accumulated other comprehensive loss | $ | (82.2 | ) | $ | (64.5 | ) | $ | (56.2 | ) |
Asset Category | Targeted Asset Allocation Percentage | Percentage of Plan Assets at Year End | ||||||||||
2017 | 2016 | |||||||||||
Fixed income | 20 | 27 | 24 | |||||||||
Common collective trusts | 80 | 73 | 76 | |||||||||
Total | 100 | 100 | ||||||||||
(In millions) | International Plan as of June 3, 2017 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | ||||||
Foreign government obligations | — | 21.4 | 21.4 | |||||||||
Common collective trusts-balanced | — | 58.9 | 58.9 | |||||||||
Total | $ | 0.2 | $ | 80.3 | $ | 80.5 | ||||||
(In millions) | International Plan as of May 28, 2016 | |||||||||||
Asset Category | Level 1 | Level 2 | Total | |||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | ||||||
Foreign government obligations | — | 20.5 | 20.5 | |||||||||
Common collective trusts-balanced | — | 64.3 | 64.3 | |||||||||
Total | $ | 0.2 | $ | 84.8 | $ | 85.0 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
(In millions) | Domestic | International | Domestic | International | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 1.0 | $ | 104.4 | $ | 1.1 | $ | 112.0 | $ | 5.9 | $ | 7.7 | |||||||||||
Interest cost | 0.1 | 2.7 | — | 3.8 | 0.2 | 0.2 | |||||||||||||||||
Foreign exchange impact | — | (12.5 | ) | — | (4.6 | ) | — | — | |||||||||||||||
Actuarial (gain) loss | — | 23.4 | — | (4.4 | ) | (0.4 | ) | (1.3 | ) | ||||||||||||||
Benefits paid | (0.1 | ) | (4.2 | ) | (0.1 | ) | (2.4 | ) | (0.7 | ) | (0.7 | ) | |||||||||||
Benefit obligation at end of year | $ | 1.0 | $ | 113.8 | $ | 1.0 | $ | 104.4 | $ | 5.0 | $ | 5.9 | |||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | 85.0 | $ | — | $ | 92.0 | $ | — | $ | — | |||||||||||
Actual return on plan assets | — | 9.6 | — | (1.3 | ) | — | — | ||||||||||||||||
Foreign exchange impact | — | (10.3 | ) | — | (3.7 | ) | — | — | |||||||||||||||
Employer contributions | 0.1 | 0.4 | 0.1 | 0.4 | 0.7 | 0.7 | |||||||||||||||||
Benefits paid | (0.1 | ) | (4.2 | ) | (0.1 | ) | (2.4 | ) | (0.7 | ) | (0.7 | ) | |||||||||||
Fair value of plan assets at end of year | $ | — | $ | 80.5 | $ | — | $ | 85.0 | $ | — | $ | — | |||||||||||
Funded status: | |||||||||||||||||||||||
Under funded status at end of year | $ | (1.0 | ) | $ | (33.3 | ) | $ | (1.0 | ) | $ | (19.4 | ) | $ | (5.0 | ) | $ | (5.9 | ) | |||||
Components of the amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Current liabilities | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | $ | — | $ | (0.7 | ) | $ | (0.7 | ) | |||||||
Non-current liabilities | $ | (0.9 | ) | $ | (33.3 | ) | $ | (0.9 | ) | $ | (19.4 | ) | $ | (4.3 | ) | $ | (5.2 | ) | |||||
Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes: | |||||||||||||||||||||||
Unrecognized net actuarial loss (gain) | $ | 0.3 | $ | 50.9 | $ | 0.3 | $ | 39.3 | $ | (0.6 | ) | $ | (0.2 | ) | |||||||||
Accumulated other comprehensive loss | $ | 0.3 | $ | 50.9 | $ | 0.3 | $ | 39.3 | $ | (0.6 | ) | $ | (0.2 | ) |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income): | |||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||
(In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Domestic: | |||||||||||||||
Net actuarial gain | $ | — | $ | — | $ | (0.4 | ) | $ | (1.3 | ) | |||||
Total recognized in other comprehensive loss | $ | — | $ | — | $ | (0.4 | ) | $ | (1.3 | ) | |||||
International: | |||||||||||||||
Net actuarial loss | $ | 18.6 | $ | 2.2 | |||||||||||
Net amortization | (2.2 | ) | (2.8 | ) | |||||||||||
Total recognized in other comprehensive loss | $ | 16.4 | $ | (0.6 | ) |
The weighted-average used in the determination of net periodic benefit cost: | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Percentages) | Domestic | International | Domestic | International | Domestic | International | |||||
Discount rate | 3.51 | 3.43 | 3.41 | 3.50 | 3.44 | 4.40 | |||||
Compensation increase rate | n/a | 2.95 | n/a | 3.20 | n/a | 3.35 | |||||
Expected return on plan assets | n/a | 6.10 | n/a | 6.10 | n/a | 6.10 | |||||
The weighted-average used in the determination of the projected benefit obligations: | |||||||||||
Discount rate | 3.53 | 2.49 | 3.51 | 3.43 | 3.41 | 3.50 | |||||
Compensation increase rate | n/a | 3.25 | n/a | 2.95 | n/a | 3.20 |
Assets Acquired and Liabilities Assumed on July 28, 2014 | |||
(In millions) | Fair Value | ||
Purchase price | $ | 155.2 | |
Fair value of the assets acquired: | |||
Cash | 1.2 | ||
Accounts receivable | 2.2 | ||
Inventory | 47.4 | ||
Current deferred tax asset | 1.5 | ||
Other current assets | 5.5 | ||
Goodwill | 75.6 | ||
Other intangible assets | 68.5 | ||
Property | 32.0 | ||
Other long term assets | 2.4 | ||
Total assets acquired | 236.3 | ||
Fair value of liabilities assumed: | |||
Accounts payable | 20.8 | ||
Accrued compensation and benefits | 1.6 | ||
Other accrued liabilities | 12.3 | ||
Long term deferred tax liability | 14.5 | ||
Other long term liabilities | 0.4 | ||
Total liabilities assumed | 49.6 | ||
Redeemable noncontrolling interests | 25.7 | ||
Noncontrolling interests | 5.8 | ||
Net assets acquired | $ | 155.2 |
(In millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | |||||||||
Employee stock purchase program | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||
Stock option plans | 2.0 | 1.9 | 2.6 | |||||||||
Restricted stock grants | — | — | 0.1 | |||||||||
Restricted stock units | 3.6 | 3.2 | 3.7 | |||||||||
Performance share units | 2.8 | 6.5 | 3.3 | |||||||||
Total | $ | 8.7 | $ | 11.9 | $ | 10.0 | ||||||
Tax benefit | $ | 3.1 | $ | 4.3 | $ | 3.6 |
(In millions) | 2017 | 2016 | 2015 | ||||||||
Current: Domestic - Federal | $ | 28.7 | $ | 36.4 | $ | 43.6 | |||||
Domestic - State | 2.3 | 6.4 | 6.3 | ||||||||
Foreign | 11.1 | 6.3 | 6.1 | ||||||||
42.1 | 49.1 | 56.0 | |||||||||
Deferred: Domestic - Federal | 9.2 | 7.5 | (5.9 | ) | |||||||
Domestic - State | 2.8 | 0.2 | (0.6 | ) | |||||||
Foreign | 1.0 | 2.7 | (2.3 | ) | |||||||
13.0 | 10.4 | (8.8 | ) | ||||||||
Total income tax provision | $ | 55.1 | $ | 59.5 | $ | 47.2 |
(In millions) | June 3, 2017 | May 28, 2016 | |||||
Series B Senior Notes, 6.42%, due January 3, 2018 | $ | 149.9 | $ | 149.9 | |||
Debt securities, 6.0%, due March 1, 2021 | 50.0 | 50.0 | |||||
Syndicated Revolving Line of Credit, due September 2021 | — | 22.0 | |||||
Total | $ | 199.9 | $ | 221.9 |
(In millions) | 2017 | 2016 | ||||||
Deferred tax assets: | ||||||||
Compensation-related accruals | $ | 22.7 | $ | 23.2 | ||||
Accrued pension and post-retirement benefit obligations | 10.9 | 9.2 | ||||||
Deferred revenue | 5.3 | 5.6 | ||||||
Inventory related | 4.1 | 3.8 | ||||||
Reserves for uncollectible accounts and notes receivable | 1.0 | 1.2 | ||||||
Other reserves and accruals | 6.1 | 3.0 | ||||||
Warranty | 17.0 | 15.7 | ||||||
State and local tax net operating loss carryforwards and credits | 2.7 | 5.7 | ||||||
Federal net operating loss carryforward | 5.0 | 7.1 | ||||||
Foreign tax net operating loss carryforwards and credits | 10.0 | 14.6 | ||||||
Accrued step rent and tenant reimbursements | 4.7 | 1.9 | ||||||
Other | 4.2 | 2.8 | ||||||
Subtotal | 93.7 | 93.8 | ||||||
Valuation allowance | (10.0 | ) | (10.6 | ) | ||||
Total | $ | 83.7 | $ | 83.2 | ||||
Deferred tax liabilities: | ||||||||
Book basis in property in excess of tax basis | $ | (37.4 | ) | $ | (24.8 | ) | ||
Intangible assets | (47.3 | ) | (47.4 | ) | ||||
Other | (3.2 | ) | (2.2 | ) | ||||
Total | $ | (87.9 | ) | $ | (74.4 | ) |
(In millions) | Fiscal Year | |||||||||||
June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||||
Interest rate swap | $ | 2.1 | $ | — | $ | — |
(In millions) | Balance Sheet Location | June 3, 2017 | May 28, 2016 | ||||||
Designated derivatives: | |||||||||
Interest rate swap | Long-term assets: Other assets | $ | 3.3 | $ | — | ||||
Non-designated derivatives: | |||||||||
Foreign currency forward contracts | Current assets: Other | $ | 0.5 | $ | 0.5 | ||||
Foreign currency forward contracts | Current liabilities: Other accrued liabilities | $ | 0.6 | $ | 0.8 |
(In millions) | Fiscal Year | ||||||||||||
Statement of Comprehensive Income Location | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||||||
Gain recognized on foreign currency forward contracts | Other expenses (income): Other, net | $ | (1.2 | ) | $ | (0.7 | ) | $ | (2.1 | ) |
(In millions, except shares) | 2017 | 2016 | 2015 | ||||||||
Numerator: | |||||||||||
Numerator for both basic and diluted EPS, Net earnings attributable to Herman Miller, Inc. | $ | 123.9 | $ | 136.7 | $ | 97.5 | |||||
Denominator: | |||||||||||
Denominator for basic EPS, weighted-average common shares outstanding | 59,871,805 | 59,844,540 | 59,475,297 | ||||||||
Potentially dilutive shares resulting from stock plans | 682,784 | 684,729 | 649,069 | ||||||||
Denominator for diluted EPS | 60,554,589 | 60,529,269 | 60,124,366 |
(In millions) | 1 Percent Increase | 1 Percent Decrease | |||||
Effect on total fiscal 2017 service and interest cost components | $ | — | $ | — | |||
Effect on post-retirement benefit obligation at June 3, 2017 | $ | 0.2 | $ | (0.2 | ) |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Income taxes computed at the United States Statutory rate of 35% | $ | 62.2 | $ | 68.8 | $ | 50.8 | ||||||
Increase (decrease) in taxes resulting from: | ||||||||||||
Foreign statutory rate differences | (5.7 | ) | (4.3 | ) | (1.0 | ) | ||||||
Manufacturing deduction under the American Jobs Creation Act of 2004 | (3.4 | ) | (4.8 | ) | (4.8 | ) | ||||||
State taxes | 3.8 | 5.2 | 4.2 | |||||||||
Tax on undistributed foreign earnings | — | — | (3.9 | ) | ||||||||
United Kingdom patent box deduction for research and development | (2.6 | ) | (1.7 | ) | (0.3 | ) | ||||||
Sale of manufacturing facility in the United Kingdom | — | (1.6 | ) | — | ||||||||
Other, net | 0.8 | (2.1 | ) | 2.2 | ||||||||
Income tax expense | $ | 55.1 | $ | 59.5 | $ | 47.2 | ||||||
Effective tax rate | 31.1 | % | 30.3 | % | 32.6 | % |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Long-lived assets: | ||||||||||||
United States | $ | 328.6 | $ | 254.8 | $ | 224.2 | ||||||
International | 45.3 | 48.1 | 53.8 | |||||||||
Total | $ | 373.9 | $ | 302.9 | $ | 278.0 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Net Sales: | ||||||||||||
Systems | $ | 639.0 | $ | 656.8 | $ | 563.4 | ||||||
Seating | 894.8 | 855.5 | 805.5 | |||||||||
Freestanding and storage | 428.8 | 456.9 | 484.1 | |||||||||
Other (1) | 315.6 | 295.7 | 289.2 | |||||||||
Total | $ | 2,278.2 | $ | 2,264.9 | $ | 2,142.2 |
(In millions) | Pension Benefits Domestic | Pension Benefits International | Post-Retirement Benefits | ||||||||
2018 | $ | 0.1 | $ | 1.7 | $ | 0.7 | |||||
2019 | $ | 0.1 | $ | 2.1 | $ | 0.6 | |||||
2020 | $ | 0.1 | $ | 2.1 | $ | 0.6 | |||||
2021 | $ | 0.1 | $ | 2.1 | $ | 0.5 | |||||
2022 | $ | 0.1 | $ | 2.6 | $ | 0.5 | |||||
2023-2027 | $ | 0.3 | $ | 15.5 | $ | 1.7 |
June 3, 2017 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 20.5 | $ | 55.3 | $ | 7.5 | $ | 83.3 | |||||||
Accumulated amortization | 13.3 | 19.7 | 4.9 | 37.9 | |||||||||||
Net | $ | 7.2 | $ | 35.6 | $ | 2.6 | $ | 45.4 | |||||||
May 28, 2016 | |||||||||||||||
Patent and Trademarks | Customer Relationships | Other | Total | ||||||||||||
Gross carrying value | $ | 19.8 | $ | 55.7 | $ | 7.5 | $ | 83.0 | |||||||
Accumulated amortization | 12.3 | 15.9 | 4.0 | 32.2 | |||||||||||
Net | $ | 7.5 | $ | 39.8 | $ | 3.5 | $ | 50.8 |
(In millions) | |||
2018 | $ | 47.0 | |
2019 | $ | 42.2 | |
2020 | $ | 35.3 | |
2021 | $ | 32.5 | |
2022 | $ | 30.7 | |
Thereafter | $ | 141.5 |
(In millions) | 2017 | 2016 | 2015 | ||||||||
Domestic | $ | 131.4 | $ | 154.9 | $ | 142.5 | |||||
Foreign | 46.2 | 41.7 | 2.7 | ||||||||
Total | $ | 177.6 | $ | 196.6 | $ | 145.2 |
(In millions) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
Balance, May 30, 2015 | $ | 303.1 | $ | 85.2 | $ | 388.3 | ||||||
Foreign currency translation adjustments | (0.4 | ) | — | (0.4 | ) | |||||||
Acquisition of George Nelson Bubble Lamp product line | 3.2 | — | 3.2 | |||||||||
Sale of owned dealer | (0.6 | ) | — | (0.6 | ) | |||||||
Balance, May 28, 2016 | $ | 305.3 | $ | 85.2 | $ | 390.5 | ||||||
Foreign currency translation adjustments | (0.7 | ) | — | (0.7 | ) | |||||||
Sale of owned dealer | (0.1 | ) | — | (0.1 | ) | |||||||
Impairment charges | — | (7.1 | ) | (7.1 | ) | |||||||
Balance, June 03, 2017 | $ | 304.5 | $ | 78.1 | $ | 382.6 |
(In millions) | June 3, 2017 | May 28, 2016 | ||||||
Finished goods and work in process | $ | 119.0 | $ | 102.1 | ||||
Raw materials | 33.4 | 26.1 | ||||||
Total | $ | 152.4 | $ | 128.2 |
(In millions) | |||
2018 | $ | — | |
2019 | $ | — | |
2020 | $ | — | |
2021 | $ | 50.0 | |
2022 | $ | — | |
Thereafter | $ | 149.9 |
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income: | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
(In millions) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||||
Domestic: | |||||||||||||||||||||||
Interest cost | $ | 0.1 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | 0.2 | |||||||||||
Net periodic benefit cost | $ | 0.1 | $ | — | $ | — | $ | 0.2 | $ | 0.2 | $ | 0.2 | |||||||||||
International: | |||||||||||||||||||||||
Interest cost | $ | 2.7 | $ | 3.8 | $ | 4.3 | |||||||||||||||||
Expected return on plan assets | (4.7 | ) | (5.4 | ) | (5.5 | ) | |||||||||||||||||
Net amortization | 2.2 | 2.8 | 1.8 | ||||||||||||||||||||
Net periodic benefit cost | $ | 0.2 | $ | 1.2 | $ | 0.6 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 28, 2016 | 433,714 | $ | 31.74 | $ | 13.7 | 1.20 | ||||||
Granted | 141,218 | $ | 29.40 | |||||||||
Forfeited | (43,945 | ) | $ | 35.75 | ||||||||
Released | (113,040 | ) | $ | 29.34 | ||||||||
Outstanding at June 3, 2017 | 417,947 | $ | 31.18 | $ | 13.7 | 1.03 | ||||||
Ending vested + expected to vest | 413,358 | $ | 31.23 | $ | 13.5 | 1.03 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Accrual balance, beginning | $ | 43.9 | $ | 39.3 | $ | 37.7 | ||||||
Accrual for warranty matters | 22.8 | 25.5 | 25.0 | |||||||||
Settlements | (19.0 | ) | (20.9 | ) | (23.4 | ) | ||||||
Accrual balance, ending | $ | 47.7 | $ | 43.9 | $ | 39.3 |
(In millions, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2017 | Net sales | $ | 598.6 | $ | 577.5 | $ | 524.9 | $ | 577.2 | |||||||
Gross margin (1) | 230.0 | 218.0 | 195.5 | 220.9 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. | 36.3 | 31.7 | 22.5 | 33.4 | ||||||||||||
Earnings per share-basic (1) | 0.61 | 0.53 | 0.38 | 0.56 | ||||||||||||
Earnings per share-diluted | 0.60 | 0.53 | 0.37 | 0.55 | ||||||||||||
2016 | Net sales | $ | 565.4 | $ | 580.4 | $ | 536.5 | $ | 582.6 | |||||||
Gross Margin | 216.8 | 224.4 | 207.8 | 225.2 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. (1) | 33.5 | 34.7 | 27.9 | 40.7 | ||||||||||||
Earnings per share-basic | 0.56 | 0.58 | 0.46 | 0.68 | ||||||||||||
Earnings per share-diluted | 0.56 | 0.57 | 0.46 | 0.67 | ||||||||||||
2015 | Net sales | $ | 509.7 | $ | 565.4 | $ | 516.4 | $ | 550.7 | |||||||
Gross margin | 185.6 | 205.7 | 190.5 | 209.6 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. (1) | 25.2 | 27.8 | 21.0 | 23.4 | ||||||||||||
Earnings per share-basic | 0.43 | 0.47 | 0.35 | 0.39 | ||||||||||||
Earnings per share-diluted | 0.42 | 0.46 | 0.35 | 0.39 |
(in millions) | June 3, 2017 | May 28, 2016 | May 30, 2015 | ||||||
Sales to nonconsolidated affiliates | $ | 4.0 | $ | 2.5 | $ | 2.5 | |||
Purchases from nonconsolidated affiliates | $ | 4.2 | $ | 0.9 | $ | 0.5 |
(in millions) | June 3, 2017 | May 28, 2016 | ||||
Receivables from nonconsolidated affiliates | $ | 0.8 | $ | 0.4 | ||
Payables to nonconsolidated affiliates | $ | 0.5 | $ | 0.1 |
Year Ended | ||||
(In millions) | June 3, 2017 | |||
Beginning Balance | $ | 0.4 | ||
Restructuring expenses | 5.4 | |||
Payments | (3.4 | ) | ||
Ending Balance | $ | 2.4 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Net Sales: | ||||||||||||
United States | $ | 1,690.1 | $ | 1,757.0 | $ | 1,640.6 | ||||||
International | 588.1 | 507.9 | 501.6 | |||||||||
Total | $ | 2,278.2 | $ | 2,264.9 | $ | 2,142.2 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Net Sales: | ||||||||||||
North American Furniture Solutions | $ | 1,342.2 | $ | 1,331.8 | $ | 1,241.9 | ||||||
ELA Furniture Solutions | 385.5 | 412.6 | 409.9 | |||||||||
Specialty | 232.4 | 231.8 | 219.9 | |||||||||
Consumer | 318.1 | 288.7 | 270.5 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 2,278.2 | $ | 2,264.9 | $ | 2,142.2 | ||||||
Depreciation and Amortization: | ||||||||||||
North American Furniture Solutions | $ | 32.0 | $ | 27.9 | $ | 26.5 | ||||||
ELA Furniture Solutions | 8.8 | 8.5 | 8.2 | |||||||||
Specialty | 7.5 | 7.4 | 7.4 | |||||||||
Consumer | 10.2 | 8.6 | 7.3 | |||||||||
Corporate | 0.4 | 0.6 | 0.4 | |||||||||
Total | $ | 58.9 | $ | 53.0 | $ | 49.8 | ||||||
Operating Earnings (Losses): | ||||||||||||
North American Furniture Solutions | $ | 137.7 | $ | 152.0 | $ | 125.2 | ||||||
ELA Furniture Solutions | 30.8 | 35.3 | 25.9 | |||||||||
Specialty | 17.7 | 16.4 | 13.5 | |||||||||
Consumer | 5.3 | 8.1 | 14.7 | |||||||||
Corporate | (0.7 | ) | (0.3 | ) | (15.9 | ) | ||||||
Total | $ | 190.8 | $ | 211.5 | $ | 163.4 | ||||||
Capital Expenditures: | ||||||||||||
North American Furniture Solutions | $ | 47.1 | $ | 56.8 | $ | 31.7 | ||||||
ELA Furniture Solutions | 8.5 | 15.0 | 20.3 | |||||||||
Specialty | 9.7 | 3.1 | 3.7 | |||||||||
Consumer | 22.0 | 10.2 | 7.9 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 87.3 | $ | 85.1 | $ | 63.6 | ||||||
Total Assets: | ||||||||||||
North American Furniture Solutions | $ | 533.6 | $ | 531.7 | $ | 504.5 | ||||||
ELA Furniture Solutions | 230.3 | 218.4 | 235.4 | |||||||||
Specialty | 157.9 | 147.3 | 151.6 | |||||||||
Consumer | 276.4 | 245.3 | 231.8 | |||||||||
Corporate | 108.1 | 92.5 | 69.4 | |||||||||
Total | $ | 1,306.3 | $ | 1,235.2 | $ | 1,192.7 | ||||||
Goodwill: | ||||||||||||
North American Furniture Solutions | $ | 135.8 | $ | 135.8 | $ | 135.8 | ||||||
ELA Furniture Solutions | 40.1 | 40.9 | 41.9 | |||||||||
Specialty | 49.8 | 49.8 | 49.8 | |||||||||
Consumer | 78.8 | 78.8 | 75.6 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 304.5 | $ | 305.3 | $ | 303.1 |
2017 | 2016 | 2015 | |||||||
Shares of common stock | 9,982 | 21,988 | 13,752 | ||||||
Shares through the deferred compensation program | 2,582 | 3,118 | — |
2017 | |||||||
Shares | Weighted Average Grant-Date Fair Value | ||||||
Outstanding at May 28, 2016 | 20,823 | $ | 21.35 | ||||
Vested | (20,323 | ) | $ | 21.38 | |||
Forfeited | (500 | ) | $ | 20.17 | |||
Outstanding at June 3, 2017 | — | $ | — |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 28, 2016 | 500,376 | $ | 24.07 | 3.20 | $ | 0.4 | |||||||
Granted | 40,425 | $ | 24.63 | ||||||||||
Exercised | (2,957 | ) | $ | 6.40 | |||||||||
Forfeited | (11,600 | ) | $ | 24.39 | |||||||||
Outstanding at June 3, 2017 | 526,244 | $ | 24.20 | 2.20 | $ | 0.1 | |||||||
Exercisable at end of period | 46,758 | $ | 22.30 | 2.20 | $ | 0.1 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at May 28, 2016 | 921,380 | $ | 25.80 | 4.20 | $ | 5.5 | |||||||
Granted at market | 745,141 | $ | 31.86 | ||||||||||
Exercised | (327,299 | ) | $ | 28.84 | |||||||||
Forfeited or expired | (9,520 | ) | $ | 38.11 | |||||||||
Outstanding at June 3, 2017 | 1,329,702 | $ | 28.36 | 7.26 | $ | 5.8 | |||||||
Ending vested + expected to vest | 1,325,647 | $ | 28.35 | 7.25 | $ | 5.8 | |||||||
Exercisable at end of period | 498,522 | $ | 22.95 | 4.37 | $ | 4.9 |
2017 | 2016 | ||||||
Risk-free interest rates (1) | 1.29 | % | 1.07 | % | |||
Expected term of options (2) | 2.1 years | 3.1 years | |||||
Expected volatility (3) | 35 | % | 35 | % | |||
Dividend yield | not applicable | not applicable | |||||
Strike price | $ | 24.39 | 24.39 | ||||
Per share value (4) | $ | 3.24 | 6.52 |
2017 | 2016 | 2015 | |||||||||
Risk-free interest rates (1) | 1.01 | % | 1.51 | % | 1.46 | % | |||||
Expected term of options (2) | 4.0 years | 4.0 years | 4.0 years | ||||||||
Expected volatility (3) | 26 | % | 33 | % | 36 | % | |||||
Dividend yield (4) | 2.13 | % | 2.03 | % | 1.85 | % | |||||
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 | $ | 5.50 | $ | 6.73 | $ | 7.74 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at May 28, 2016 | 377,861 | $ | 27.83 | $ | 12.0 | 1.40 | ||||||
Granted | 114,778 | $ | 31.83 | |||||||||
Forfeited | (12,951 | ) | $ | 29.25 | ||||||||
Released | (94,736 | ) | $ | 28.70 | ||||||||
Outstanding at June 3, 2017 | 384,952 | $ | 28.73 | $ | 12.6 | 1.14 | ||||||
Ending vested + expected to vest | 379,037 | 29.30 | $ | 12.4 | 1.13 |
(In millions) | ||||
Balance at May 30, 2015 | $ | 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 | (0.1 | ) | ||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | (0.4 | ) | ||
Balance at May 28, 2016 | 1.7 | |||
Increases related to current year income tax positions | 0.3 | |||
Increases related to prior year income tax positions | 1.1 | |||
Decreases related to prior year income tax positions | (0.1 | ) | ||
Decreases related to lapse of applicable statute of limitations | (0.1 | ) | ||
Decreases related to settlements | (0.1 | ) | ||
Balance at June 3, 2017 | $ | 2.8 |
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 June 3, 2017: | |||||||||||||||
Accounts receivable allowances — uncollectible accounts(1) | $ | 3.4 | $ | — | $ | (1.1 | ) | $ | 2.3 | ||||||
Accounts receivable allowances — credit memo(2) | $ | 0.4 | $ | — | $ | — | $ | 0.4 | |||||||
Allowance for possible losses on notes receivable | $ | 0.9 | $ | — | $ | — | $ | 0.9 | |||||||
Valuation allowance for deferred tax asset | $ | 10.6 | $ | (0.6 | ) | $ | — | $ | 10.0 | ||||||
Year ended May 28, 2016: | |||||||||||||||
Accounts receivable allowances — uncollectible accounts(1) | $ | 2.4 | $ | 2.3 | $ | (1.3 | ) | $ | 3.4 | ||||||
Accounts receivable allowances — credit memo(2) | $ | 0.4 | $ | — | $ | — | $ | 0.4 | |||||||
Allowance for possible losses on notes receivable | $ | 1.0 | $ | (0.1 | ) | $ | — | $ | 0.9 | ||||||
Valuation allowance for deferred tax asset | $ | 11.1 | $ | (1.5 | ) | $ | 1.0 | $ | 10.6 | ||||||
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 |
(In millions) | |||
2018 | $ | 6.3 | |
2019 | $ | 5.8 | |
2020 | $ | 5.7 | |
2021 | $ | 5.7 | |
2022 | $ | 5.6 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Net Sales: | ||||||||||||
North American Furniture Solutions | $ | 1,342.2 | $ | 1,331.8 | $ | 1,241.9 | ||||||
ELA Furniture Solutions | 385.5 | 412.6 | 409.9 | |||||||||
Specialty | 232.4 | 231.8 | 219.9 | |||||||||
Consumer | 318.1 | 288.7 | 270.5 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 2,278.2 | $ | 2,264.9 | $ | 2,142.2 | ||||||
Depreciation and Amortization: | ||||||||||||
North American Furniture Solutions | $ | 32.0 | $ | 27.9 | $ | 26.5 | ||||||
ELA Furniture Solutions | 8.8 | 8.5 | 8.2 | |||||||||
Specialty | 7.5 | 7.4 | 7.4 | |||||||||
Consumer | 10.2 | 8.6 | 7.3 | |||||||||
Corporate | 0.4 | 0.6 | 0.4 | |||||||||
Total | $ | 58.9 | $ | 53.0 | $ | 49.8 | ||||||
Operating Earnings (Losses): | ||||||||||||
North American Furniture Solutions | $ | 137.7 | $ | 152.0 | $ | 125.2 | ||||||
ELA Furniture Solutions | 30.8 | 35.3 | 25.9 | |||||||||
Specialty | 17.7 | 16.4 | 13.5 | |||||||||
Consumer | 5.3 | 8.1 | 14.7 | |||||||||
Corporate | (0.7 | ) | (0.3 | ) | (15.9 | ) | ||||||
Total | $ | 190.8 | $ | 211.5 | $ | 163.4 | ||||||
Capital Expenditures: | ||||||||||||
North American Furniture Solutions | $ | 47.1 | $ | 56.8 | $ | 31.7 | ||||||
ELA Furniture Solutions | 8.5 | 15.0 | 20.3 | |||||||||
Specialty | 9.7 | 3.1 | 3.7 | |||||||||
Consumer | 22.0 | 10.2 | 7.9 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 87.3 | $ | 85.1 | $ | 63.6 | ||||||
Total Assets: | ||||||||||||
North American Furniture Solutions | $ | 533.6 | $ | 531.7 | $ | 504.5 | ||||||
ELA Furniture Solutions | 230.3 | 218.4 | 235.4 | |||||||||
Specialty | 157.9 | 147.3 | 151.6 | |||||||||
Consumer | 276.4 | 245.3 | 231.8 | |||||||||
Corporate | 108.1 | 92.5 | 69.4 | |||||||||
Total | $ | 1,306.3 | $ | 1,235.2 | $ | 1,192.7 | ||||||
Goodwill: | ||||||||||||
North American Furniture Solutions | $ | 135.8 | $ | 135.8 | $ | 135.8 | ||||||
ELA Furniture Solutions | 40.1 | 40.9 | 41.9 | |||||||||
Specialty | 49.8 | 49.8 | 49.8 | |||||||||
Consumer | 78.8 | 78.8 | 75.6 | |||||||||
Corporate | — | — | — | |||||||||
Total | $ | 304.5 | $ | 305.3 | $ | 303.1 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Net Sales: | ||||||||||||
Systems | $ | 639.0 | $ | 656.8 | $ | 563.4 | ||||||
Seating | 894.8 | 855.5 | 805.5 | |||||||||
Freestanding and storage | 428.8 | 456.9 | 484.1 | |||||||||
Other (1) | 315.6 | 295.7 | 289.2 | |||||||||
Total | $ | 2,278.2 | $ | 2,264.9 | $ | 2,142.2 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Net Sales: | ||||||||||||
United States | $ | 1,690.1 | $ | 1,757.0 | $ | 1,640.6 | ||||||
International | 588.1 | 507.9 | 501.6 | |||||||||
Total | $ | 2,278.2 | $ | 2,264.9 | $ | 2,142.2 |
(In millions) | 2017 | 2016 | 2015 | |||||||||
Long-lived assets: | ||||||||||||
United States | $ | 328.6 | $ | 254.8 | $ | 224.2 | ||||||
International | 45.3 | 48.1 | 53.8 | |||||||||
Total | $ | 373.9 | $ | 302.9 | $ | 278.0 |
(In millions) | Retention Level (per occurrence) | |||
General liability and auto liability/physical damage | $ | 1.00 | ||
Workers' compensation and property | $ | 0.75 |
(In millions) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
Balance, May 30, 2015 | $ | 303.1 | $ | 85.2 | $ | 388.3 | ||||||
Foreign currency translation adjustments | (0.4 | ) | — | (0.4 | ) | |||||||
Acquisition of George Nelson Bubble Lamp product line | 3.2 | — | 3.2 | |||||||||
Sale of owned dealer | (0.6 | ) | — | (0.6 | ) | |||||||
Balance, May 28, 2016 | $ | 305.3 | $ | 85.2 | $ | 390.5 | ||||||
Foreign currency translation adjustments | (0.7 | ) | — | (0.7 | ) | |||||||
Sale of owned dealer | (0.1 | ) | — | (0.1 | ) | |||||||
Impairment charges | — | (7.1 | ) | (7.1 | ) | |||||||
Balance, June 03, 2017 | $ | 304.5 | $ | 78.1 | $ | 382.6 |
June 3, 2017 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 20.5 | $ | 55.3 | $ | 7.5 | $ | 83.3 | |||||||
Accumulated amortization | 13.3 | 19.7 | 4.9 | 37.9 | |||||||||||
Net | $ | 7.2 | $ | 35.6 | $ | 2.6 | $ | 45.4 | |||||||
May 28, 2016 | |||||||||||||||
Patent and Trademarks | Customer Relationships | Other | Total | ||||||||||||
Gross carrying value | $ | 19.8 | $ | 55.7 | $ | 7.5 | $ | 83.0 | |||||||
Accumulated amortization | 12.3 | 15.9 | 4.0 | 32.2 | |||||||||||
Net | $ | 7.5 | $ | 39.8 | $ | 3.5 | $ | 50.8 |
(In millions) | |||
2018 | $ | 6.3 | |
2019 | $ | 5.8 | |
2020 | $ | 5.7 | |
2021 | $ | 5.7 | |
2022 | $ | 5.6 |
(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. |
Recently Issued Accounting Standards Not Yet Adopted | ||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
Simplifying the Measurement of Inventory | Under the updated standard, an entity should measure inventory that is measured using either the first-in, first-out (\"FIFO\") or average cost methods at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The updated standard should be applied prospectively. | June 4, 2017 | The company has evaluated the impact of the update and its expected to be immaterial. | |||
Improvements to Employee Share-Based Payment Accounting | The standard simplifies several aspects of the accounting for share-based payment awards to employees, including the accounting for income taxes, forfeitures, statutory tax withholding requirements and classification in the statement of cash flows. Different adoption methodologies exist (retrospectively, modified-retrospectively, or prospectively) for the various different features of the standard being updated. | June 4, 2017 | The company expects the most significant impact from the share-based compensation standard to be driven by the treatment of excess tax benefits/deficiencies and expects the other impacts from the standard to be nominal. The company intends to adopt an entity-wide accounting policy election to account for forfeitures in compensation cost when they occur. | |||
Recently Issued Accounting Standards Not Yet Adopted (continued) | ||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
Revenue from Contracts with Customers | The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. The standard allows for two adoption methods, a full retrospective or modified retrospective approach. | June 3, 2018 | The company has completed a preliminary review of the impact of the new standard and expects changes in how the company’s performance obligations around product and service revenue are accounted for. Additionally, the company expects changes in the way it recognizes certain pricing elements of its commercial contracts. These changes are not expected to be material to the financial statements. The company expects to adopt the standard in fiscal 2019 using the modified-retrospective approach. | |||
Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities | The standard provides guidance for the measurement, presentation and disclosure of financial assets and liabilities. The standard requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any change in fair value in net income. The standard does not permit early adoption and at adoption a cumulative-effect adjustment to beginning retained earnings should be recorded. | June 3, 2018 | The company is currently evaluating the impact of adopting this guidance. | |||
Leases | Under the updated standard a lessee's rights and obligations under most leases, including existing and new arrangements, would be recognized as assets and liabilities, respectively, on the balance sheet. The standard must be adopted under a modified retrospective approach and early adoption is permitted. | June 2, 2019 | The standard is expected to have a significant impact on our Consolidated Financial Statements, however the company is currently evaluating the impact. |
June 3, 2017 | May 28, 2016 | ||||||||||||||||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | Cost | Unrealized Gain | Unrealized Loss | Market Value | |||||||||||||||||||||||
Mutual funds - fixed income | $ | 7.6 | $ | 0.1 | $ | — | $ | 7.7 | $ | 6.4 | $ | — | $ | — | $ | 6.4 | |||||||||||||||
Mutual funds - equity | 0.9 | — | — | 0.9 | 0.7 | — | — | 0.7 | |||||||||||||||||||||||
Government obligations | — | — | — | — | 0.4 | — | — | 0.4 | |||||||||||||||||||||||
Total | $ | 8.5 | $ | 0.1 | $ | — | $ | 8.6 | $ | 7.5 | $ | — | $ | — | $ | 7.5 |