(in millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||
Equity earnings from nonconsolidated affiliates | $ | 3.0 | $ | 1.6 | $ | 0.4 |
(in millions) | June 2, 2018 | June 3, 2017 | ||||
Investments in nonconsolidated affiliates | $ | 16.8 | $ | 16.2 |
(In millions) | Retention Level (per occurrence) | |||
General liability | $ | 1.00 | ||
Auto liability | $ | 1.00 | ||
Workers' compensation | $ | 0.75 |
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||||
Interest and penalty expense (income) | $ | 0.1 | $ | 0.2 | $ | (0.1 | ) | ||||
Liability for interest and penalties | $ | 1.0 | $ | 0.8 |
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 2, 2018: | |||||||||||||||
Accounts receivable allowances — uncollectible accounts(1) | $ | 2.3 | $ | 0.6 | $ | (0.5 | ) | $ | 2.4 | ||||||
Accounts receivable allowances — credit memo(2) | $ | 0.4 | $ | 0.1 | $ | — | $ | 0.5 | |||||||
Allowance for possible losses on notes receivable | $ | 0.9 | $ | (0.5 | ) | $ | — | $ | 0.4 | ||||||
Valuation allowance for deferred tax asset | $ | 10.0 | $ | 0.5 | $ | (0.2 | ) | $ | 10.3 | ||||||
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 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Accrual balance, beginning | $ | 47.7 | $ | 43.9 | $ | 39.3 | |||||
Accrual for warranty matters | 22.1 | 22.8 | 25.5 | ||||||||
Settlements | (18.3 | ) | (19.0 | ) | (20.9 | ) | |||||
Accrual balance, ending | $ | 51.5 | $ | 47.7 | $ | 43.9 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
(In millions) | Domestic | International | Domestic | International | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 1.0 | $ | 113.8 | $ | 1.0 | $ | 104.4 | $ | 5.0 | $ | 5.9 | |||||||||||
Interest cost | 0.1 | 2.7 | 0.1 | 2.7 | 0.1 | 0.2 | |||||||||||||||||
Foreign exchange impact | — | 4.2 | — | (12.5 | ) | — | — | ||||||||||||||||
Actuarial (gain) loss | — | (12.2 | ) | — | 23.4 | (0.5 | ) | (0.4 | ) | ||||||||||||||
Benefits paid | (0.1 | ) | (2.6 | ) | (0.1 | ) | (4.2 | ) | (0.6 | ) | (0.7 | ) | |||||||||||
Benefit obligation at end of year | $ | 1.0 | $ | 105.9 | $ | 1.0 | $ | 113.8 | $ | 4.0 | $ | 5.0 | |||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | 80.5 | $ | — | $ | 85.0 | $ | — | $ | — | |||||||||||
Actual return on plan assets | — | 1.2 | — | 9.6 | — | — | |||||||||||||||||
Foreign exchange impact | — | 2.8 | — | (10.3 | ) | — | — | ||||||||||||||||
Employer contributions | 0.1 | 12.7 | 0.1 | 0.4 | 0.6 | 0.7 | |||||||||||||||||
Benefits paid | (0.1 | ) | (2.6 | ) | (0.1 | ) | (4.2 | ) | (0.6 | ) | (0.7 | ) | |||||||||||
Fair value of plan assets at end of year | $ | — | $ | 94.6 | $ | — | $ | 80.5 | $ | — | $ | — | |||||||||||
Funded status: | |||||||||||||||||||||||
Under funded status at end of year | $ | (1.0 | ) | $ | (11.3 | ) | $ | (1.0 | ) | $ | (33.3 | ) | $ | (4.0 | ) | $ | (5.0 | ) | |||||
Components of the amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Current liabilities | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | $ | — | $ | (0.6 | ) | $ | (0.7 | ) | |||||||
Non-current liabilities | $ | (0.9 | ) | $ | (11.3 | ) | $ | (0.9 | ) | $ | (33.3 | ) | $ | (3.4 | ) | $ | (4.3 | ) | |||||
Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes: | |||||||||||||||||||||||
Unrecognized net actuarial loss (gain) | $ | 0.3 | $ | 40.8 | $ | 0.3 | $ | 50.9 | $ | (1.1 | ) | $ | (0.6 | ) | |||||||||
Accumulated other comprehensive loss | $ | 0.3 | $ | 40.8 | $ | 0.3 | $ | 50.9 | $ | (1.1 | ) | $ | (0.6 | ) |
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets | |||||||
(In millions) | 2018 | 2017 | |||||
Projected benefit obligation | $ | 106.9 | $ | 114.8 | |||
Accumulated benefit obligation | $ | 103.1 | $ | 111.0 | |||
Fair value of plan assets | $ | 94.6 | $ | 80.5 |
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income: | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||
Domestic: | |||||||||||||||||||||||
Interest cost | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.2 | $ | 0.2 | |||||||||||
Net periodic benefit cost | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.2 | $ | 0.2 | |||||||||||
International: | |||||||||||||||||||||||
Interest cost | $ | 2.7 | $ | 2.7 | $ | 3.8 | |||||||||||||||||
Expected return on plan assets | (5.6 | ) | (4.7 | ) | (5.4 | ) | |||||||||||||||||
Net amortization | 4.2 | 2.2 | 2.8 | ||||||||||||||||||||
Net periodic benefit cost | $ | 1.3 | $ | 0.2 | $ | 1.2 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income): | |||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Domestic: | |||||||||||||||
Net actuarial gain | $ | — | $ | — | $ | (0.5 | ) | $ | (0.4 | ) | |||||
Total recognized in other comprehensive loss | $ | — | $ | — | $ | (0.5 | ) | $ | (0.4 | ) | |||||
International: | |||||||||||||||
Net actuarial (gain) loss | $ | (7.7 | ) | $ | 18.6 | ||||||||||
Net amortization | (4.2 | ) | (2.2 | ) | |||||||||||
Total recognized in other comprehensive loss | $ | (11.9 | ) | $ | 16.4 |
The weighted-average used in the determination of net periodic benefit cost: | |||||||||||
2018 | 2017 | 2016 | |||||||||
(Percentages) | Domestic | International | Domestic | International | Domestic | International | |||||
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 | |||||
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 | 3.99 | 2.87 | 3.53 | 2.49 | 3.51 | 3.43 | |||||
Compensation increase rate | n/a | 3.10 | n/a | 3.25 | n/a | 2.95 |
(In millions) | 1 Percent Increase | 1 Percent Decrease | |||||
Effect on total fiscal 2018 service and interest cost components | $ | — | $ | — | |||
Effect on post-retirement benefit obligation at June 2, 2018 | $ | 0.1 | $ | (0.1 | ) |
Asset Category | Targeted Asset Allocation Percentage | Percentage of Plan Assets at Year End | |||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Fixed income | 35 | 20 | 36 | 27 | |||||||||
Common collective trusts | 65 | 80 | 64 | 73 | |||||||||
Total | 100 | 100 | |||||||||||
(In millions) | International Plan as of June 2, 2018 | ||||||||||||
Asset Category | Level 1 | Level 2 | Total | ||||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | |||||||
Foreign government obligations | — | 33.4 | 33.4 | ||||||||||
Common collective trusts-balanced | — | 61.0 | 61.0 | ||||||||||
Total | $ | 0.2 | $ | 94.4 | $ | 94.6 | |||||||
(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) | Pension Benefits Domestic | Pension Benefits International | Post-Retirement Benefits | ||||||||
2019 | $ | 0.1 | $ | 2.0 | $ | 0.6 | |||||
2020 | $ | 0.1 | $ | 2.0 | $ | 0.5 | |||||
2021 | $ | 0.1 | $ | 2.1 | $ | 0.5 | |||||
2022 | $ | 0.1 | $ | 2.5 | $ | 0.4 | |||||
2023 | $ | 0.1 | $ | 2.4 | $ | 0.4 | |||||
2024-2028 | $ | 0.3 | $ | 16.5 | $ | 1.4 |
Year Ended | |||||||||||
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||||
Cumulative translation adjustments at beginning of period | $ | (36.8 | ) | $ | (29.6 | ) | $ | (20.8 | ) | ||
Other comprehensive income (loss) before reclassifications (net of tax of $- , $- and ($0.3)) | 2.7 | (7.2 | ) | (8.8 | ) | ||||||
Balance at end of period | (34.1 | ) | (36.8 | ) | (29.6 | ) | |||||
Pension and other post-retirement benefit plans at beginning of period | (47.6 | ) | (34.9 | ) | (35.4 | ) | |||||
Other comprehensive income (loss) before reclassifications (net of tax of ($2.9), $3.7 and ($0.7)) | 5.3 | (14.5 | ) | (2.0 | ) | ||||||
Reclassification from accumulated other comprehensive income - Selling, general and administrative | 4.2 | 2.2 | 3.2 | ||||||||
Tax benefit | 0.9 | (0.4 | ) | (0.7 | ) | ||||||
Net reclassifications | 5.1 | 1.8 | 2.5 | ||||||||
Net current period other comprehensive income | 10.4 | (12.7 | ) | 0.5 | |||||||
Balance at end of period | (37.2 | ) | (47.6 | ) | (34.9 | ) | |||||
Interest rate swap agreement at beginning of period | 2.1 | — | — | ||||||||
Other comprehensive income before reclassifications (net of tax of ($4.0), ($1.2) and $-) | 7.5 | 2.1 | — | ||||||||
Reclassification from accumulated other comprehensive income - Interest expense | 0.3 | — | — | ||||||||
Net reclassifications | 0.3 | — | — | ||||||||
Net current period other comprehensive income | 7.8 | 2.1 | — | ||||||||
Balance at end of period | 9.9 | 2.1 | — | ||||||||
Available-for-sale Securities at beginning of period | 0.1 | — | — | ||||||||
Other comprehensive income before reclassifications (net of tax of $- , $- and $-) | — | 0.1 | — | ||||||||
Balance at end of period | 0.1 | 0.1 | — | ||||||||
Total accumulated other comprehensive loss | $ | (61.3 | ) | $ | (82.2 | ) | $ | (64.5 | ) |
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | |||||||||
Employee stock purchase program | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||
Stock option plans | 2.6 | 2.0 | 1.9 | |||||||||
Restricted stock units | 3.9 | 3.6 | 3.2 | |||||||||
Performance share units | 0.9 | 2.8 | 6.5 | |||||||||
Total | $ | 7.7 | $ | 8.7 | $ | 11.9 | ||||||
Tax benefit | $ | 2.3 | $ | 3.1 | $ | 4.3 |
2018 | 2017 | 2016 | |||||||||
Risk-free interest rates (1) | 1.79 | % | 1.01 | % | 1.51 | % | |||||
Expected term of options (2) | 4.6 years | 4.0 years | 4.0 years | ||||||||
Expected volatility (3) | 26 | % | 26 | % | 33 | % | |||||
Dividend yield (4) | 2.23 | % | 2.13 | % | 2.03 | % | |||||
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 | $ | 6.39 | $ | 5.50 | $ | 6.73 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at June 3, 2017 | 1,329,702 | $ | 28.36 | 7.26 | $ | 5.8 | |||||||
Granted at market | 323,412 | $ | 33.75 | ||||||||||
Exercised | (538,259 | ) | $ | 27.28 | |||||||||
Forfeited or expired | (51,606 | ) | $ | 32.83 | |||||||||
Outstanding at June 2, 2018 | 1,063,249 | $ | 30.33 | 7.45 | $ | 2.9 | |||||||
Ending vested + expected to vest | 1,063,249 | $ | 30.33 | 7.45 | $ | 2.9 | |||||||
Exercisable at end of period | 265,519 | $ | 23.96 | 4.78 | $ | 2.4 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at June 3, 2017 | 384,952 | $ | 28.73 | $ | 12.6 | 1.14 | ||||||
Granted | 242,012 | $ | 35.28 | |||||||||
Forfeited | (19,233 | ) | $ | 30.86 | ||||||||
Released | (126,704 | ) | $ | 27.75 | ||||||||
Outstanding at June 2, 2018 | 481,027 | $ | 32.20 | $ | 15.8 | 1.28 | ||||||
Ending vested + expected to vest | 481,027 | 32.20 | $ | 15.8 | 1.28 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at June 3, 2017 | 417,947 | $ | 31.18 | $ | 13.7 | 1.03 | ||||||
Granted | 129,131 | $ | 31.28 | |||||||||
Forfeited | (42,339 | ) | $ | 34.27 | ||||||||
Released | (130,179 | ) | $ | 31.47 | ||||||||
Outstanding at June 2, 2018 | 374,560 | $ | 30.76 | $ | 12.3 | 1.01 | ||||||
Ending vested + expected to vest | 374,560 | $ | 30.76 | $ | 12.3 | 1.01 |
2018 | 2017 | ||||||
Risk-free interest rates (1) | 2.29 | % | 1.29 | % | |||
Expected term of options (2) | 1.1 years | 2.1 years | |||||
Expected volatility (3) | 35 | % | 35 | % | |||
Dividend yield | not applicable | not applicable | |||||
Strike price | $ | 30.64 | 24.39 | ||||
Per share value (4) | $ | 8.24 | 3.24 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at June 3, 2017 | 526,244 | $ | 24.20 | 2.20 | $ | 0.1 | |||||||
Granted | 28,810 | $ | 21.08 | ||||||||||
Forfeited | (10,928 | ) | $ | 24.39 | |||||||||
Outstanding at June 2, 2018 | 544,126 | $ | 24.04 | 1.20 | $ | 3.6 | |||||||
Exercisable at end of period | 75,568 | $ | 21.83 | 1.20 | $ | 0.6 |
2018 | 2017 | 2016 | |||||||
Shares of common stock | 8,828 | 9,982 | 21,988 | ||||||
Shares through the deferred compensation program | 2,207 | 2,582 | 3,118 |
(In millions, except shares) | 2018 | 2017 | 2016 | ||||||||
Numerator: | |||||||||||
Numerator for both basic and diluted EPS, Net earnings attributable to Herman Miller, Inc. | $ | 128.1 | $ | 123.9 | $ | 136.7 | |||||
Denominator: | |||||||||||
Denominator for basic EPS, weighted-average common shares outstanding | 59,681,268 | 59,871,805 | 59,844,540 | ||||||||
Potentially dilutive shares resulting from stock plans | 630,037 | 682,784 | 684,729 | ||||||||
Denominator for diluted EPS | 60,311,305 | 60,554,589 | 60,529,269 |
(in millions) | June 2, 2018 | June 3, 2017 | ||||
Investments in nonconsolidated affiliates | $ | 16.8 | $ | 16.2 |
(in millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||
Equity earnings from nonconsolidated affiliates | $ | 3.0 | $ | 1.6 | $ | 0.4 |
Ownership Interest | June 2, 2018 | June 3, 2017 |
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% | 50.0% |
(in millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||
Sales to nonconsolidated affiliates | $ | 4.3 | $ | 4.0 | $ | 2.5 | |||
Purchases from nonconsolidated affiliates | $ | 6.8 | $ | 4.2 | $ | 0.9 |
(in millions) | June 2, 2018 | June 3, 2017 | ||||
Receivables from nonconsolidated affiliates | $ | 0.9 | $ | 0.8 | ||
Payables to nonconsolidated affiliates | $ | 1.0 | $ | 0.5 |
Ownership Interest | June 2, 2018 | June 3, 2017 |
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% | 50.0% |
Fair Value Measurements | |||||||||||||
June 2, 2018 | June 3, 2017 | ||||||||||||
(In millions) 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) | |||||||||
Cash Equivalents | $ | 121.0 | $ | — | $ | — | $ | — | |||||
Available-for-sale securities: | |||||||||||||
Mutual funds - fixed income | 7.7 | — | 7.7 | — | |||||||||
Mutual funds - equity | 0.9 | — | 0.9 | — | |||||||||
Foreign currency forward contracts | 0.4 | — | 0.5 | — | |||||||||
Interest rate swap agreement | 15.0 | — | 3.3 | — | |||||||||
Deferred compensation plan | 15.1 | — | 12.8 | — | |||||||||
Total | $ | 160.1 | $ | — | $ | 25.2 | $ | — | |||||
Financial Liabilities | |||||||||||||
Foreign currency forward contracts | $ | 0.3 | $ | — | $ | 0.6 | $ | — | |||||
Contingent consideration | — | 0.5 | — | 0.5 | |||||||||
Total | $ | 0.3 | $ | 0.5 | $ | 0.6 | $ | 0.5 |
(In millions) | June 2, 2018 | June 3, 2017 | ||||||
Carrying value | $ | 285.8 | $ | 210.1 | ||||
Fair value | $ | 288.6 | $ | 223.2 |
(In millions) | June 2, 2018 | June 3, 2017 | ||||||
Carrying value | $ | 285.8 | $ | 210.1 | ||||
Fair value | $ | 288.6 | $ | 223.2 |
Fair Value Measurements | |||||||||||||
June 2, 2018 | June 3, 2017 | ||||||||||||
(In millions) 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) | |||||||||
Cash Equivalents | $ | 121.0 | $ | — | $ | — | $ | — | |||||
Available-for-sale securities: | |||||||||||||
Mutual funds - fixed income | 7.7 | — | 7.7 | — | |||||||||
Mutual funds - equity | 0.9 | — | 0.9 | — | |||||||||
Foreign currency forward contracts | 0.4 | — | 0.5 | — | |||||||||
Interest rate swap agreement | 15.0 | — | 3.3 | — | |||||||||
Deferred compensation plan | 15.1 | — | 12.8 | — | |||||||||
Total | $ | 160.1 | $ | — | $ | 25.2 | $ | — | |||||
Financial Liabilities | |||||||||||||
Foreign currency forward contracts | $ | 0.3 | $ | — | $ | 0.6 | $ | — | |||||
Contingent consideration | — | 0.5 | — | 0.5 | |||||||||
Total | $ | 0.3 | $ | 0.5 | $ | 0.6 | $ | 0.5 |
(In millions) | |||||||
Contingent Consideration | June 2, 2018 | June 3, 2017 | |||||
Beginning balance | $ | 0.5 | $ | 2.7 | |||
Net realized losses (gains) | 0.1 | (0.2 | ) | ||||
Settlements | (0.1 | ) | (2.0 | ) | |||
Ending balance | $ | 0.5 | $ | 0.5 |
June 2, 2018 | June 3, 2017 | ||||||||||||||||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | Cost | Unrealized Gain | Unrealized Loss | Market Value | |||||||||||||||||||||||
Mutual funds - fixed income | $ | 7.8 | $ | — | $ | 0.1 | $ | 7.7 | $ | 7.6 | $ | 0.1 | $ | — | $ | 7.7 | |||||||||||||||
Mutual funds - equity | 0.7 | 0.2 | — | 0.9 | 0.9 | — | — | 0.9 | |||||||||||||||||||||||
Total | $ | 8.5 | $ | 0.2 | $ | 0.1 | $ | 8.6 | $ | 8.5 | $ | 0.1 | $ | — | $ | 8.6 |
(In millions) | Balance Sheet Location | June 2, 2018 | June 3, 2017 | ||||||
Designated derivatives: | |||||||||
Interest rate swap | Long-term assets: Other assets | $ | 15.0 | $ | 3.3 | ||||
Non-designated derivatives: | |||||||||
Foreign currency forward contracts | Current assets: Other | $ | 0.4 | $ | 0.5 | ||||
Foreign currency forward contracts | Current liabilities: Other accrued liabilities | $ | 0.3 | $ | 0.6 |
Fiscal Year | |||||||||||||
(In millions) | Statement of Comprehensive Income Location | June 2, 2018 | June 3, 2017 | May 28, 2016 | |||||||||
Gain recognized on foreign currency forward contracts | Other expenses (income): Other, net | $ | 0.4 | $ | (1.2 | ) | $ | (0.7 | ) |
Fiscal Year | |||||||||||
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||||
Interest rate swap | $ | 7.5 | $ | 2.1 | $ | — |
(In millions) | |||||||
Contingent Consideration | June 2, 2018 | June 3, 2017 | |||||
Beginning balance | $ | 0.5 | $ | 2.7 | |||
Net realized losses (gains) | 0.1 | (0.2 | ) | ||||
Settlements | (0.1 | ) | (2.0 | ) | |||
Ending balance | $ | 0.5 | $ | 0.5 |
• | 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) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
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 | ||||||
Foreign currency translation adjustments | (0.1 | ) | — | (0.1 | ) | |||||||
Sale of owned dealer | (0.3 | ) | — | (0.3 | ) | |||||||
Balance, June 02, 2018 | $ | 304.1 | $ | 78.1 | $ | 382.2 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Domestic | $ | 121.6 | $ | 131.4 | $ | 154.9 | |||||
Foreign | 46.5 | 46.2 | 41.7 | ||||||||
Total | $ | 168.1 | $ | 177.6 | $ | 196.6 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Current: Domestic - Federal | $ | 30.2 | $ | 28.7 | $ | 36.4 | |||||
Domestic - State | 4.3 | 2.3 | 6.4 | ||||||||
Foreign | 10.7 | 11.1 | 6.3 | ||||||||
45.2 | 42.1 | 49.1 | |||||||||
Deferred: Domestic - Federal | (4.1 | ) | 9.2 | 7.5 | |||||||
Domestic - State | 0.1 | 2.8 | 0.2 | ||||||||
Foreign | 1.2 | 1.0 | 2.7 | ||||||||
(2.8 | ) | 13.0 | 10.4 | ||||||||
Total income tax provision | $ | 42.4 | $ | 55.1 | $ | 59.5 |
(In millions) | 2018 | 2017 | 2016 | |||||||||
Income taxes computed at the United States Statutory rate | $ | 49.0 | $ | 62.2 | $ | 68.8 | ||||||
Increase (decrease) in taxes resulting from: | ||||||||||||
Remeasurement of U.S. deferred tax assets and liabilities due to the Tax Act | (8.9 | ) | — | — | ||||||||
U.S. tax liability on undistributed foreign earnings due to the Tax Act | 9.0 | — | — | |||||||||
Foreign statutory rate differences | (4.0 | ) | (5.7 | ) | (4.3 | ) | ||||||
Manufacturing deduction under the American Jobs Creation Act of 2004 | (2.7 | ) | (3.4 | ) | (4.8 | ) | ||||||
State taxes | 3.3 | 3.8 | 5.2 | |||||||||
United Kingdom patent box deduction for research and development | (1.8 | ) | (2.6 | ) | (1.7 | ) | ||||||
Research and development credit | (2.4 | ) | (1.4 | ) | (1.4 | ) | ||||||
Sale of manufacturing facility in the United Kingdom | — | — | (1.6 | ) | ||||||||
Other, net | 0.9 | 2.2 | (0.7 | ) | ||||||||
Income tax expense | $ | 42.4 | $ | 55.1 | $ | 59.5 | ||||||
Effective tax rate | 25.2 | % | 31.1 | % | 30.3 | % |
(In millions) | 2018 | 2017 | ||||||
Deferred tax assets: | ||||||||
Compensation-related accruals | $ | 15.3 | $ | 22.7 | ||||
Accrued pension and post-retirement benefit obligations | 6.6 | 10.9 | ||||||
Deferred revenue | 5.6 | 5.3 | ||||||
Inventory related | 1.0 | 4.1 | ||||||
Reserves for uncollectible accounts and notes receivable | 0.6 | 1.0 | ||||||
Other reserves and accruals | 5.2 | 6.1 | ||||||
Warranty | 11.9 | 17.0 | ||||||
State and local tax net operating loss carryforwards and credits | 2.3 | 2.7 | ||||||
Federal net operating loss carryforward | 1.7 | 5.0 | ||||||
Foreign tax net operating loss carryforwards and credits | 10.0 | 10.0 | ||||||
Accrued step rent and tenant reimbursements | 3.8 | 4.7 | ||||||
Other | 3.9 | 4.2 | ||||||
Subtotal | 67.9 | 93.7 | ||||||
Valuation allowance | (10.3 | ) | (10.0 | ) | ||||
Total | $ | 57.6 | $ | 83.7 | ||||
Deferred tax liabilities: | ||||||||
Book basis in property in excess of tax basis | $ | (25.5 | ) | $ | (37.4 | ) | ||
Intangible assets | (32.3 | ) | (47.3 | ) | ||||
Other | (6.9 | ) | (3.2 | ) | ||||
Total | $ | (64.7 | ) | $ | (87.9 | ) |
(In millions) | ||||
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 | |||
Increases related to current year income tax positions | 0.3 | |||
Increases related to prior year income tax positions | 0.4 | |||
Decreases related to lapse of applicable statute of limitations | (0.3 | ) | ||
Balance at June 2, 2018 | $ | 3.2 |
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||||
Interest and penalty expense (income) | $ | 0.1 | $ | 0.2 | $ | (0.1 | ) | ||||
Liability for interest and penalties | $ | 1.0 | $ | 0.8 |
June 2, 2018 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 22.4 | $ | 55.3 | $ | 7.5 | $ | 85.2 | |||||||
Accumulated amortization | 14.7 | 23.5 | 5.7 | 43.9 | |||||||||||
Net | $ | 7.7 | $ | 31.8 | $ | 1.8 | $ | 41.3 | |||||||
June 3, 2017 | |||||||||||||||
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 |
(In millions) | June 2, 2018 | June 3, 2017 | ||||||
Finished goods and work in process | $ | 124.2 | $ | 119.0 | ||||
Raw materials | 38.2 | 33.4 | ||||||
Total | $ | 162.4 | $ | 152.4 |
(In millions) | |||
2019 | $ | 45.8 | |
2020 | $ | 42.8 | |
2021 | $ | 40.5 | |
2022 | $ | 43.1 | |
2023 | $ | 32.5 | |
Thereafter | $ | 123.8 |
(In millions) | June 2, 2018 | June 3, 2017 | |||||
Series B Senior Notes, 6.42%, due January 3, 2018 | $ | — | $ | 149.9 | |||
Debt securities, 6.0%, due March 1, 2021 | 50.0 | 50.0 | |||||
Syndicated Revolving Line of Credit, due September 2021 | 225.0 | — | |||||
Construction-Type Lease | 7.0 | 7.0 | |||||
Supplier financing program | 3.8 | 3.2 | |||||
Total debt | $ | 285.8 | $ | 210.1 | |||
Less: Current debt | (10.8 | ) | (10.2 | ) | |||
Long-term debt | $ | 275.0 | $ | 199.9 |
(In millions) | |||
2019 | $ | — | |
2020 | $ | — | |
2021 | $ | 50.0 | |
2022 | $ | 225.0 | |
2023 | $ | — | |
Thereafter | $ | — |
Year Ended | |||||||
(In millions) | June 2, 2018 | June 3, 2017 | |||||
Balance at beginning of period | $ | 24.6 | $ | 27.0 | |||
Purchase of redeemable noncontrolling interests | (1.0 | ) | (1.5 | ) | |||
Net income attributable to redeemable noncontrolling interests | 0.6 | 0.2 | |||||
Exercised options | 0.1 | — | |||||
Redemption value adjustment | 6.2 | (1.2 | ) | ||||
Other adjustments | — | 0.1 | |||||
Balance at end of period | $ | 30.5 | $ | 24.6 |
(In millions, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2018 | Net sales (1) | $ | 580.3 | $ | 604.6 | $ | 578.4 | $ | 618.0 | |||||||
Gross margin (1) | 216.9 | 222.1 | 205.8 | 228.3 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. (1) | 33.1 | 33.5 | 29.8 | 31.8 | ||||||||||||
Earnings per share-basic (1) | 0.55 | 0.56 | 0.50 | 0.53 | ||||||||||||
Earnings per share-diluted | 0.55 | 0.55 | 0.49 | 0.53 | ||||||||||||
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 |
Year Ended | |||||||
(In millions) | June 2, 2018 | June 3, 2017 | |||||
Balance at beginning of period | $ | 24.6 | $ | 27.0 | |||
Purchase of redeemable noncontrolling interests | (1.0 | ) | (1.5 | ) | |||
Net income attributable to redeemable noncontrolling interests | 0.6 | 0.2 | |||||
Exercised options | 0.1 | — | |||||
Redemption value adjustment | 6.2 | (1.2 | ) | ||||
Other adjustments | — | 0.1 | |||||
Balance at end of period | $ | 30.5 | $ | 24.6 |
June 2, 2018 | |||||||||
(In millions) | Severance and employee related expenses | Costs associated with exit and disposal activities | Total | ||||||
Beginning Balance | $ | — | $ | — | $ | — | |||
Restructuring expenses | 2.4 | 1.5 | 3.9 | ||||||
Payments | (2.4 | ) | (1.5 | ) | (3.9 | ) | |||
Ending Balance | $ | — | $ | — | $ | — |
June 2, 2018 | June 3, 2017 | ||||||
(In millions) | Severance and employee related expenses | Severance and employee related expenses | |||||
Beginning Balance | $ | 2.4 | $ | 0.4 | |||
Restructuring expenses | — | 5.4 | |||||
Payments | (2.4 | ) | (3.4 | ) | |||
Ending Balance | $ | — | $ | 2.4 |
Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets | |||||||
(In millions) | 2018 | 2017 | |||||
Projected benefit obligation | $ | 106.9 | $ | 114.8 | |||
Accumulated benefit obligation | $ | 103.1 | $ | 111.0 | |||
Fair value of plan assets | $ | 94.6 | $ | 80.5 |
Year Ended | |||||||||||
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||||
Cumulative translation adjustments at beginning of period | $ | (36.8 | ) | $ | (29.6 | ) | $ | (20.8 | ) | ||
Other comprehensive income (loss) before reclassifications (net of tax of $- , $- and ($0.3)) | 2.7 | (7.2 | ) | (8.8 | ) | ||||||
Balance at end of period | (34.1 | ) | (36.8 | ) | (29.6 | ) | |||||
Pension and other post-retirement benefit plans at beginning of period | (47.6 | ) | (34.9 | ) | (35.4 | ) | |||||
Other comprehensive income (loss) before reclassifications (net of tax of ($2.9), $3.7 and ($0.7)) | 5.3 | (14.5 | ) | (2.0 | ) | ||||||
Reclassification from accumulated other comprehensive income - Selling, general and administrative | 4.2 | 2.2 | 3.2 | ||||||||
Tax benefit | 0.9 | (0.4 | ) | (0.7 | ) | ||||||
Net reclassifications | 5.1 | 1.8 | 2.5 | ||||||||
Net current period other comprehensive income | 10.4 | (12.7 | ) | 0.5 | |||||||
Balance at end of period | (37.2 | ) | (47.6 | ) | (34.9 | ) | |||||
Interest rate swap agreement at beginning of period | 2.1 | — | — | ||||||||
Other comprehensive income before reclassifications (net of tax of ($4.0), ($1.2) and $-) | 7.5 | 2.1 | — | ||||||||
Reclassification from accumulated other comprehensive income - Interest expense | 0.3 | — | — | ||||||||
Net reclassifications | 0.3 | — | — | ||||||||
Net current period other comprehensive income | 7.8 | 2.1 | — | ||||||||
Balance at end of period | 9.9 | 2.1 | — | ||||||||
Available-for-sale Securities at beginning of period | 0.1 | — | — | ||||||||
Other comprehensive income before reclassifications (net of tax of $- , $- and $-) | — | 0.1 | — | ||||||||
Balance at end of period | 0.1 | 0.1 | — | ||||||||
Total accumulated other comprehensive loss | $ | (61.3 | ) | $ | (82.2 | ) | $ | (64.5 | ) |
Asset Category | Targeted Asset Allocation Percentage | Percentage of Plan Assets at Year End | |||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Fixed income | 35 | 20 | 36 | 27 | |||||||||
Common collective trusts | 65 | 80 | 64 | 73 | |||||||||
Total | 100 | 100 | |||||||||||
(In millions) | International Plan as of June 2, 2018 | ||||||||||||
Asset Category | Level 1 | Level 2 | Total | ||||||||||
Cash and cash equivalents | $ | 0.2 | $ | — | $ | 0.2 | |||||||
Foreign government obligations | — | 33.4 | 33.4 | ||||||||||
Common collective trusts-balanced | — | 61.0 | 61.0 | ||||||||||
Total | $ | 0.2 | $ | 94.4 | $ | 94.6 | |||||||
(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 |
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
(In millions) | Domestic | International | Domestic | International | |||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 1.0 | $ | 113.8 | $ | 1.0 | $ | 104.4 | $ | 5.0 | $ | 5.9 | |||||||||||
Interest cost | 0.1 | 2.7 | 0.1 | 2.7 | 0.1 | 0.2 | |||||||||||||||||
Foreign exchange impact | — | 4.2 | — | (12.5 | ) | — | — | ||||||||||||||||
Actuarial (gain) loss | — | (12.2 | ) | — | 23.4 | (0.5 | ) | (0.4 | ) | ||||||||||||||
Benefits paid | (0.1 | ) | (2.6 | ) | (0.1 | ) | (4.2 | ) | (0.6 | ) | (0.7 | ) | |||||||||||
Benefit obligation at end of year | $ | 1.0 | $ | 105.9 | $ | 1.0 | $ | 113.8 | $ | 4.0 | $ | 5.0 | |||||||||||
Change in plan assets: | |||||||||||||||||||||||
Fair value of plan assets at beginning of year | $ | — | $ | 80.5 | $ | — | $ | 85.0 | $ | — | $ | — | |||||||||||
Actual return on plan assets | — | 1.2 | — | 9.6 | — | — | |||||||||||||||||
Foreign exchange impact | — | 2.8 | — | (10.3 | ) | — | — | ||||||||||||||||
Employer contributions | 0.1 | 12.7 | 0.1 | 0.4 | 0.6 | 0.7 | |||||||||||||||||
Benefits paid | (0.1 | ) | (2.6 | ) | (0.1 | ) | (4.2 | ) | (0.6 | ) | (0.7 | ) | |||||||||||
Fair value of plan assets at end of year | $ | — | $ | 94.6 | $ | — | $ | 80.5 | $ | — | $ | — | |||||||||||
Funded status: | |||||||||||||||||||||||
Under funded status at end of year | $ | (1.0 | ) | $ | (11.3 | ) | $ | (1.0 | ) | $ | (33.3 | ) | $ | (4.0 | ) | $ | (5.0 | ) | |||||
Components of the amounts recognized in the Consolidated Balance Sheets: | |||||||||||||||||||||||
Current liabilities | $ | (0.1 | ) | $ | — | $ | (0.1 | ) | $ | — | $ | (0.6 | ) | $ | (0.7 | ) | |||||||
Non-current liabilities | $ | (0.9 | ) | $ | (11.3 | ) | $ | (0.9 | ) | $ | (33.3 | ) | $ | (3.4 | ) | $ | (4.3 | ) | |||||
Components of the amounts recognized in Accumulated other comprehensive loss before the effect of income taxes: | |||||||||||||||||||||||
Unrecognized net actuarial loss (gain) | $ | 0.3 | $ | 40.8 | $ | 0.3 | $ | 50.9 | $ | (1.1 | ) | $ | (0.6 | ) | |||||||||
Accumulated other comprehensive loss | $ | 0.3 | $ | 40.8 | $ | 0.3 | $ | 50.9 | $ | (1.1 | ) | $ | (0.6 | ) |
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive (Income): | |||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Domestic: | |||||||||||||||
Net actuarial gain | $ | — | $ | — | $ | (0.5 | ) | $ | (0.4 | ) | |||||
Total recognized in other comprehensive loss | $ | — | $ | — | $ | (0.5 | ) | $ | (0.4 | ) | |||||
International: | |||||||||||||||
Net actuarial (gain) loss | $ | (7.7 | ) | $ | 18.6 | ||||||||||
Net amortization | (4.2 | ) | (2.2 | ) | |||||||||||
Total recognized in other comprehensive loss | $ | (11.9 | ) | $ | 16.4 |
The weighted-average used in the determination of net periodic benefit cost: | |||||||||||
2018 | 2017 | 2016 | |||||||||
(Percentages) | Domestic | International | Domestic | International | Domestic | International | |||||
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 | |||||
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 | 3.99 | 2.87 | 3.53 | 2.49 | 3.51 | 3.43 | |||||
Compensation increase rate | n/a | 3.10 | n/a | 3.25 | n/a | 2.95 |
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | |||||||||
Employee stock purchase program | $ | 0.3 | $ | 0.3 | $ | 0.3 | ||||||
Stock option plans | 2.6 | 2.0 | 1.9 | |||||||||
Restricted stock units | 3.9 | 3.6 | 3.2 | |||||||||
Performance share units | 0.9 | 2.8 | 6.5 | |||||||||
Total | $ | 7.7 | $ | 8.7 | $ | 11.9 | ||||||
Tax benefit | $ | 2.3 | $ | 3.1 | $ | 4.3 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Current: Domestic - Federal | $ | 30.2 | $ | 28.7 | $ | 36.4 | |||||
Domestic - State | 4.3 | 2.3 | 6.4 | ||||||||
Foreign | 10.7 | 11.1 | 6.3 | ||||||||
45.2 | 42.1 | 49.1 | |||||||||
Deferred: Domestic - Federal | (4.1 | ) | 9.2 | 7.5 | |||||||
Domestic - State | 0.1 | 2.8 | 0.2 | ||||||||
Foreign | 1.2 | 1.0 | 2.7 | ||||||||
(2.8 | ) | 13.0 | 10.4 | ||||||||
Total income tax provision | $ | 42.4 | $ | 55.1 | $ | 59.5 |
(In millions) | June 2, 2018 | June 3, 2017 | |||||
Series B Senior Notes, 6.42%, due January 3, 2018 | $ | — | $ | 149.9 | |||
Debt securities, 6.0%, due March 1, 2021 | 50.0 | 50.0 | |||||
Syndicated Revolving Line of Credit, due September 2021 | 225.0 | — | |||||
Construction-Type Lease | 7.0 | 7.0 | |||||
Supplier financing program | 3.8 | 3.2 | |||||
Total debt | $ | 285.8 | $ | 210.1 | |||
Less: Current debt | (10.8 | ) | (10.2 | ) | |||
Long-term debt | $ | 275.0 | $ | 199.9 |
(In millions) | 2018 | 2017 | ||||||
Deferred tax assets: | ||||||||
Compensation-related accruals | $ | 15.3 | $ | 22.7 | ||||
Accrued pension and post-retirement benefit obligations | 6.6 | 10.9 | ||||||
Deferred revenue | 5.6 | 5.3 | ||||||
Inventory related | 1.0 | 4.1 | ||||||
Reserves for uncollectible accounts and notes receivable | 0.6 | 1.0 | ||||||
Other reserves and accruals | 5.2 | 6.1 | ||||||
Warranty | 11.9 | 17.0 | ||||||
State and local tax net operating loss carryforwards and credits | 2.3 | 2.7 | ||||||
Federal net operating loss carryforward | 1.7 | 5.0 | ||||||
Foreign tax net operating loss carryforwards and credits | 10.0 | 10.0 | ||||||
Accrued step rent and tenant reimbursements | 3.8 | 4.7 | ||||||
Other | 3.9 | 4.2 | ||||||
Subtotal | 67.9 | 93.7 | ||||||
Valuation allowance | (10.3 | ) | (10.0 | ) | ||||
Total | $ | 57.6 | $ | 83.7 | ||||
Deferred tax liabilities: | ||||||||
Book basis in property in excess of tax basis | $ | (25.5 | ) | $ | (37.4 | ) | ||
Intangible assets | (32.3 | ) | (47.3 | ) | ||||
Other | (6.9 | ) | (3.2 | ) | ||||
Total | $ | (64.7 | ) | $ | (87.9 | ) |
Fiscal Year | |||||||||||
(In millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||||
Interest rate swap | $ | 7.5 | $ | 2.1 | $ | — |
(In millions) | Balance Sheet Location | June 2, 2018 | June 3, 2017 | ||||||
Designated derivatives: | |||||||||
Interest rate swap | Long-term assets: Other assets | $ | 15.0 | $ | 3.3 | ||||
Non-designated derivatives: | |||||||||
Foreign currency forward contracts | Current assets: Other | $ | 0.4 | $ | 0.5 | ||||
Foreign currency forward contracts | Current liabilities: Other accrued liabilities | $ | 0.3 | $ | 0.6 |
Fiscal Year | |||||||||||||
(In millions) | Statement of Comprehensive Income Location | June 2, 2018 | June 3, 2017 | May 28, 2016 | |||||||||
Gain recognized on foreign currency forward contracts | Other expenses (income): Other, net | $ | 0.4 | $ | (1.2 | ) | $ | (0.7 | ) |
(In millions, except shares) | 2018 | 2017 | 2016 | ||||||||
Numerator: | |||||||||||
Numerator for both basic and diluted EPS, Net earnings attributable to Herman Miller, Inc. | $ | 128.1 | $ | 123.9 | $ | 136.7 | |||||
Denominator: | |||||||||||
Denominator for basic EPS, weighted-average common shares outstanding | 59,681,268 | 59,871,805 | 59,844,540 | ||||||||
Potentially dilutive shares resulting from stock plans | 630,037 | 682,784 | 684,729 | ||||||||
Denominator for diluted EPS | 60,311,305 | 60,554,589 | 60,529,269 |
(In millions) | 1 Percent Increase | 1 Percent Decrease | |||||
Effect on total fiscal 2018 service and interest cost components | $ | — | $ | — | |||
Effect on post-retirement benefit obligation at June 2, 2018 | $ | 0.1 | $ | (0.1 | ) |
(In millions) | 2018 | 2017 | 2016 | |||||||||
Income taxes computed at the United States Statutory rate | $ | 49.0 | $ | 62.2 | $ | 68.8 | ||||||
Increase (decrease) in taxes resulting from: | ||||||||||||
Remeasurement of U.S. deferred tax assets and liabilities due to the Tax Act | (8.9 | ) | — | — | ||||||||
U.S. tax liability on undistributed foreign earnings due to the Tax Act | 9.0 | — | — | |||||||||
Foreign statutory rate differences | (4.0 | ) | (5.7 | ) | (4.3 | ) | ||||||
Manufacturing deduction under the American Jobs Creation Act of 2004 | (2.7 | ) | (3.4 | ) | (4.8 | ) | ||||||
State taxes | 3.3 | 3.8 | 5.2 | |||||||||
United Kingdom patent box deduction for research and development | (1.8 | ) | (2.6 | ) | (1.7 | ) | ||||||
Research and development credit | (2.4 | ) | (1.4 | ) | (1.4 | ) | ||||||
Sale of manufacturing facility in the United Kingdom | — | — | (1.6 | ) | ||||||||
Other, net | 0.9 | 2.2 | (0.7 | ) | ||||||||
Income tax expense | $ | 42.4 | $ | 55.1 | $ | 59.5 | ||||||
Effective tax rate | 25.2 | % | 31.1 | % | 30.3 | % |
Long-lived assets: | |||||||||||
United States | $ | 349.3 | $ | 328.6 | $ | 254.8 | |||||
International | 50.5 | 45.3 | 48.1 | ||||||||
Total | $ | 399.8 | $ | 373.9 | $ | 302.9 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Net Sales: | |||||||||||
Systems | $ | 601.5 | $ | 639.0 | $ | 656.8 | |||||
Seating | 965.9 | 894.8 | 855.5 | ||||||||
Freestanding and storage | 465.1 | 428.8 | 456.9 | ||||||||
Textiles | 94.3 | 96.9 | 97.6 | ||||||||
Other (1) | 254.4 | 218.7 | 198.1 | ||||||||
Total | $ | 2,381.2 | $ | 2,278.2 | $ | 2,264.9 |
(In millions) | Pension Benefits Domestic | Pension Benefits International | Post-Retirement Benefits | ||||||||
2019 | $ | 0.1 | $ | 2.0 | $ | 0.6 | |||||
2020 | $ | 0.1 | $ | 2.0 | $ | 0.5 | |||||
2021 | $ | 0.1 | $ | 2.1 | $ | 0.5 | |||||
2022 | $ | 0.1 | $ | 2.5 | $ | 0.4 | |||||
2023 | $ | 0.1 | $ | 2.4 | $ | 0.4 | |||||
2024-2028 | $ | 0.3 | $ | 16.5 | $ | 1.4 |
June 2, 2018 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 22.4 | $ | 55.3 | $ | 7.5 | $ | 85.2 | |||||||
Accumulated amortization | 14.7 | 23.5 | 5.7 | 43.9 | |||||||||||
Net | $ | 7.7 | $ | 31.8 | $ | 1.8 | $ | 41.3 | |||||||
June 3, 2017 | |||||||||||||||
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 |
(In millions) | |||
2019 | $ | 45.8 | |
2020 | $ | 42.8 | |
2021 | $ | 40.5 | |
2022 | $ | 43.1 | |
2023 | $ | 32.5 | |
Thereafter | $ | 123.8 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Domestic | $ | 121.6 | $ | 131.4 | $ | 154.9 | |||||
Foreign | 46.5 | 46.2 | 41.7 | ||||||||
Total | $ | 168.1 | $ | 177.6 | $ | 196.6 |
(In millions) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
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 | ||||||
Foreign currency translation adjustments | (0.1 | ) | — | (0.1 | ) | |||||||
Sale of owned dealer | (0.3 | ) | — | (0.3 | ) | |||||||
Balance, June 02, 2018 | $ | 304.1 | $ | 78.1 | $ | 382.2 |
(In millions) | June 2, 2018 | June 3, 2017 | ||||||
Finished goods and work in process | $ | 124.2 | $ | 119.0 | ||||
Raw materials | 38.2 | 33.4 | ||||||
Total | $ | 162.4 | $ | 152.4 |
(In millions) | |||
2019 | $ | — | |
2020 | $ | — | |
2021 | $ | 50.0 | |
2022 | $ | 225.0 | |
2023 | $ | — | |
Thereafter | $ | — |
Components of Net Periodic Benefit Costs and Other Changes Recognized in Other Comprehensive Income: | |||||||||||||||||||||||
Pension Benefits | Post-Retirement Benefits | ||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||
Domestic: | |||||||||||||||||||||||
Interest cost | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.2 | $ | 0.2 | |||||||||||
Net periodic benefit cost | $ | 0.1 | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.2 | $ | 0.2 | |||||||||||
International: | |||||||||||||||||||||||
Interest cost | $ | 2.7 | $ | 2.7 | $ | 3.8 | |||||||||||||||||
Expected return on plan assets | (5.6 | ) | (4.7 | ) | (5.4 | ) | |||||||||||||||||
Net amortization | 4.2 | 2.2 | 2.8 | ||||||||||||||||||||
Net periodic benefit cost | $ | 1.3 | $ | 0.2 | $ | 1.2 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at June 3, 2017 | 417,947 | $ | 31.18 | $ | 13.7 | 1.03 | ||||||
Granted | 129,131 | $ | 31.28 | |||||||||
Forfeited | (42,339 | ) | $ | 34.27 | ||||||||
Released | (130,179 | ) | $ | 31.47 | ||||||||
Outstanding at June 2, 2018 | 374,560 | $ | 30.76 | $ | 12.3 | 1.01 | ||||||
Ending vested + expected to vest | 374,560 | $ | 30.76 | $ | 12.3 | 1.01 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Accrual balance, beginning | $ | 47.7 | $ | 43.9 | $ | 39.3 | |||||
Accrual for warranty matters | 22.1 | 22.8 | 25.5 | ||||||||
Settlements | (18.3 | ) | (19.0 | ) | (20.9 | ) | |||||
Accrual balance, ending | $ | 51.5 | $ | 47.7 | $ | 43.9 |
(In millions, except per share data) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
2018 | Net sales (1) | $ | 580.3 | $ | 604.6 | $ | 578.4 | $ | 618.0 | |||||||
Gross margin (1) | 216.9 | 222.1 | 205.8 | 228.3 | ||||||||||||
Net earnings attributable to Herman Miller, Inc. (1) | 33.1 | 33.5 | 29.8 | 31.8 | ||||||||||||
Earnings per share-basic (1) | 0.55 | 0.56 | 0.50 | 0.53 | ||||||||||||
Earnings per share-diluted | 0.55 | 0.55 | 0.49 | 0.53 | ||||||||||||
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 |
(in millions) | June 2, 2018 | June 3, 2017 | May 28, 2016 | ||||||
Sales to nonconsolidated affiliates | $ | 4.3 | $ | 4.0 | $ | 2.5 | |||
Purchases from nonconsolidated affiliates | $ | 6.8 | $ | 4.2 | $ | 0.9 |
(in millions) | June 2, 2018 | June 3, 2017 | ||||
Receivables from nonconsolidated affiliates | $ | 0.9 | $ | 0.8 | ||
Payables to nonconsolidated affiliates | $ | 1.0 | $ | 0.5 |
June 2, 2018 | |||||||||
(In millions) | Severance and employee related expenses | Costs associated with exit and disposal activities | Total | ||||||
Beginning Balance | $ | — | $ | — | $ | — | |||
Restructuring expenses | 2.4 | 1.5 | 3.9 | ||||||
Payments | (2.4 | ) | (1.5 | ) | (3.9 | ) | |||
Ending Balance | $ | — | $ | — | $ | — |
June 2, 2018 | June 3, 2017 | ||||||
(In millions) | Severance and employee related expenses | Severance and employee related expenses | |||||
Beginning Balance | $ | 2.4 | $ | 0.4 | |||
Restructuring expenses | — | 5.4 | |||||
Payments | (2.4 | ) | (3.4 | ) | |||
Ending Balance | $ | — | $ | 2.4 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Net Sales: | |||||||||||
United States | $ | 1,737.9 | $ | 1,690.1 | $ | 1,757.0 | |||||
International | 643.3 | 588.1 | 507.9 | ||||||||
Total | $ | 2,381.2 | $ | 2,278.2 | $ | 2,264.9 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Net Sales: | |||||||||||
North American Furniture Solutions | $ | 1,284.4 | $ | 1,276.6 | $ | 1,269.4 | |||||
ELA Furniture Solutions | 434.5 | 385.5 | 412.6 | ||||||||
Specialty | 305.4 | 298.0 | 294.2 | ||||||||
Consumer | 356.9 | 318.1 | 288.7 | ||||||||
Corporate | — | — | — | ||||||||
Total | $ | 2,381.2 | $ | 2,278.2 | $ | 2,264.9 | |||||
Depreciation and Amortization: | |||||||||||
North American Furniture Solutions | $ | 33.4 | $ | 28.3 | $ | 24.5 | |||||
ELA Furniture Solutions | 10.2 | 9.4 | 9.1 | ||||||||
Specialty | 10.5 | 9.4 | 9.4 | ||||||||
Consumer | 12.1 | 10.2 | 8.6 | ||||||||
Corporate | 0.7 | 1.6 | 1.4 | ||||||||
Total | $ | 66.9 | $ | 58.9 | $ | 53.0 | |||||
Operating Earnings (Losses): | |||||||||||
North American Furniture Solutions | $ | 166.3 | $ | 176.0 | $ | 187.6 | |||||
ELA Furniture Solutions | 35.5 | 35.9 | 40.2 | ||||||||
Specialty | 8.9 | 8.1 | 15.0 | ||||||||
Consumer | 13.9 | 4.8 | 8.1 | ||||||||
Corporate | (47.1 | ) | (34.0 | ) | (39.4 | ) | |||||
Total | $ | 177.5 | $ | 190.8 | $ | 211.5 | |||||
Capital Expenditures: | |||||||||||
North American Furniture Solutions | $ | 38.9 | $ | 46.2 | $ | 56.1 | |||||
ELA Furniture Solutions | 11.4 | 8.5 | 15.0 | ||||||||
Specialty | 7.1 | 10.6 | 3.8 | ||||||||
Consumer | 13.2 | 22.0 | 10.2 | ||||||||
Corporate | — | — | — | ||||||||
Total | $ | 70.6 | $ | 87.3 | $ | 85.1 | |||||
Total Assets: | |||||||||||
North American Furniture Solutions | $ | 488.7 | $ | 519.3 | $ | 503.4 | |||||
ELA Furniture Solutions | 283.4 | 230.3 | 218.4 | ||||||||
Specialty | 188.7 | 172.2 | 175.6 | ||||||||
Consumer | 291.2 | 276.4 | 245.3 | ||||||||
Corporate | 227.5 | 108.1 | 92.4 | ||||||||
Total | $ | 1,479.5 | $ | 1,306.3 | $ | 1,235.1 | |||||
Goodwill: | |||||||||||
North American Furniture Solutions | $ | 133.2 | $ | 133.5 | $ | 133.5 | |||||
ELA Furniture Solutions | 40.0 | 40.1 | 40.9 | ||||||||
Specialty | 52.1 | 52.1 | 52.1 | ||||||||
Consumer | 78.8 | 78.8 | 78.8 | ||||||||
Corporate | — | — | — | ||||||||
Total | $ | 304.1 | $ | 304.5 | $ | 305.3 |
2018 | 2017 | 2016 | |||||||
Shares of common stock | 8,828 | 9,982 | 21,988 | ||||||
Shares through the deferred compensation program | 2,207 | 2,582 | 3,118 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at June 3, 2017 | 1,329,702 | $ | 28.36 | 7.26 | $ | 5.8 | |||||||
Granted at market | 323,412 | $ | 33.75 | ||||||||||
Exercised | (538,259 | ) | $ | 27.28 | |||||||||
Forfeited or expired | (51,606 | ) | $ | 32.83 | |||||||||
Outstanding at June 2, 2018 | 1,063,249 | $ | 30.33 | 7.45 | $ | 2.9 | |||||||
Ending vested + expected to vest | 1,063,249 | $ | 30.33 | 7.45 | $ | 2.9 | |||||||
Exercisable at end of period | 265,519 | $ | 23.96 | 4.78 | $ | 2.4 |
Shares Under Option | Weighted-Average Exercise Prices | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (In millions) | ||||||||||
Outstanding at June 3, 2017 | 526,244 | $ | 24.20 | 2.20 | $ | 0.1 | |||||||
Granted | 28,810 | $ | 21.08 | ||||||||||
Forfeited | (10,928 | ) | $ | 24.39 | |||||||||
Outstanding at June 2, 2018 | 544,126 | $ | 24.04 | 1.20 | $ | 3.6 | |||||||
Exercisable at end of period | 75,568 | $ | 21.83 | 1.20 | $ | 0.6 |
2018 | 2017 | ||||||
Risk-free interest rates (1) | 2.29 | % | 1.29 | % | |||
Expected term of options (2) | 1.1 years | 2.1 years | |||||
Expected volatility (3) | 35 | % | 35 | % | |||
Dividend yield | not applicable | not applicable | |||||
Strike price | $ | 30.64 | 24.39 | ||||
Per share value (4) | $ | 8.24 | 3.24 |
2018 | 2017 | 2016 | |||||||||
Risk-free interest rates (1) | 1.79 | % | 1.01 | % | 1.51 | % | |||||
Expected term of options (2) | 4.6 years | 4.0 years | 4.0 years | ||||||||
Expected volatility (3) | 26 | % | 26 | % | 33 | % | |||||
Dividend yield (4) | 2.23 | % | 2.13 | % | 2.03 | % | |||||
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 | $ | 6.39 | $ | 5.50 | $ | 6.73 |
Share Units | Weighted Average Grant-Date Fair Value | Aggregate Intrinsic Value in Millions | Weighted-Average Remaining Contractual Term (Years) | |||||||||
Outstanding at June 3, 2017 | 384,952 | $ | 28.73 | $ | 12.6 | 1.14 | ||||||
Granted | 242,012 | $ | 35.28 | |||||||||
Forfeited | (19,233 | ) | $ | 30.86 | ||||||||
Released | (126,704 | ) | $ | 27.75 | ||||||||
Outstanding at June 2, 2018 | 481,027 | $ | 32.20 | $ | 15.8 | 1.28 | ||||||
Ending vested + expected to vest | 481,027 | 32.20 | $ | 15.8 | 1.28 |
(In millions) | ||||
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 | |||
Increases related to current year income tax positions | 0.3 | |||
Increases related to prior year income tax positions | 0.4 | |||
Decreases related to lapse of applicable statute of limitations | (0.3 | ) | ||
Balance at June 2, 2018 | $ | 3.2 |
(In millions) | |||
2019 | $ | 5.9 | |
2020 | $ | 5.6 | |
2021 | $ | 5.6 | |
2022 | $ | 5.6 | |
2023 | $ | 5.6 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Net Sales: | |||||||||||
North American Furniture Solutions | $ | 1,284.4 | $ | 1,276.6 | $ | 1,269.4 | |||||
ELA Furniture Solutions | 434.5 | 385.5 | 412.6 | ||||||||
Specialty | 305.4 | 298.0 | 294.2 | ||||||||
Consumer | 356.9 | 318.1 | 288.7 | ||||||||
Corporate | — | — | — | ||||||||
Total | $ | 2,381.2 | $ | 2,278.2 | $ | 2,264.9 | |||||
Depreciation and Amortization: | |||||||||||
North American Furniture Solutions | $ | 33.4 | $ | 28.3 | $ | 24.5 | |||||
ELA Furniture Solutions | 10.2 | 9.4 | 9.1 | ||||||||
Specialty | 10.5 | 9.4 | 9.4 | ||||||||
Consumer | 12.1 | 10.2 | 8.6 | ||||||||
Corporate | 0.7 | 1.6 | 1.4 | ||||||||
Total | $ | 66.9 | $ | 58.9 | $ | 53.0 | |||||
Operating Earnings (Losses): | |||||||||||
North American Furniture Solutions | $ | 166.3 | $ | 176.0 | $ | 187.6 | |||||
ELA Furniture Solutions | 35.5 | 35.9 | 40.2 | ||||||||
Specialty | 8.9 | 8.1 | 15.0 | ||||||||
Consumer | 13.9 | 4.8 | 8.1 | ||||||||
Corporate | (47.1 | ) | (34.0 | ) | (39.4 | ) | |||||
Total | $ | 177.5 | $ | 190.8 | $ | 211.5 | |||||
Capital Expenditures: | |||||||||||
North American Furniture Solutions | $ | 38.9 | $ | 46.2 | $ | 56.1 | |||||
ELA Furniture Solutions | 11.4 | 8.5 | 15.0 | ||||||||
Specialty | 7.1 | 10.6 | 3.8 | ||||||||
Consumer | 13.2 | 22.0 | 10.2 | ||||||||
Corporate | — | — | — | ||||||||
Total | $ | 70.6 | $ | 87.3 | $ | 85.1 | |||||
Total Assets: | |||||||||||
North American Furniture Solutions | $ | 488.7 | $ | 519.3 | $ | 503.4 | |||||
ELA Furniture Solutions | 283.4 | 230.3 | 218.4 | ||||||||
Specialty | 188.7 | 172.2 | 175.6 | ||||||||
Consumer | 291.2 | 276.4 | 245.3 | ||||||||
Corporate | 227.5 | 108.1 | 92.4 | ||||||||
Total | $ | 1,479.5 | $ | 1,306.3 | $ | 1,235.1 | |||||
Goodwill: | |||||||||||
North American Furniture Solutions | $ | 133.2 | $ | 133.5 | $ | 133.5 | |||||
ELA Furniture Solutions | 40.0 | 40.1 | 40.9 | ||||||||
Specialty | 52.1 | 52.1 | 52.1 | ||||||||
Consumer | 78.8 | 78.8 | 78.8 | ||||||||
Corporate | — | — | — | ||||||||
Total | $ | 304.1 | $ | 304.5 | $ | 305.3 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Net Sales: | |||||||||||
Systems | $ | 601.5 | $ | 639.0 | $ | 656.8 | |||||
Seating | 965.9 | 894.8 | 855.5 | ||||||||
Freestanding and storage | 465.1 | 428.8 | 456.9 | ||||||||
Textiles | 94.3 | 96.9 | 97.6 | ||||||||
Other (1) | 254.4 | 218.7 | 198.1 | ||||||||
Total | $ | 2,381.2 | $ | 2,278.2 | $ | 2,264.9 |
(In millions) | 2018 | 2017 | 2016 | ||||||||
Net Sales: | |||||||||||
United States | $ | 1,737.9 | $ | 1,690.1 | $ | 1,757.0 | |||||
International | 643.3 | 588.1 | 507.9 | ||||||||
Total | $ | 2,381.2 | $ | 2,278.2 | $ | 2,264.9 |
Long-lived assets: | |||||||||||
United States | $ | 349.3 | $ | 328.6 | $ | 254.8 | |||||
International | 50.5 | 45.3 | 48.1 | ||||||||
Total | $ | 399.8 | $ | 373.9 | $ | 302.9 |
(In millions) | Retention Level (per occurrence) | |||
General liability | $ | 1.00 | ||
Auto liability | $ | 1.00 | ||
Workers' compensation | $ | 0.75 |
(In millions) | Goodwill | Indefinite-lived Intangible Assets | Total Goodwill and Indefinite-lived Intangible Assets | |||||||||
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 | ||||||
Foreign currency translation adjustments | (0.1 | ) | — | (0.1 | ) | |||||||
Sale of owned dealer | (0.3 | ) | — | (0.3 | ) | |||||||
Balance, June 02, 2018 | $ | 304.1 | $ | 78.1 | $ | 382.2 |
June 2, 2018 | |||||||||||||||
(In millions) | Patent and Trademarks | Customer Relationships | Other | Total | |||||||||||
Gross carrying value | $ | 22.4 | $ | 55.3 | $ | 7.5 | $ | 85.2 | |||||||
Accumulated amortization | 14.7 | 23.5 | 5.7 | 43.9 | |||||||||||
Net | $ | 7.7 | $ | 31.8 | $ | 1.8 | $ | 41.3 | |||||||
June 3, 2017 | |||||||||||||||
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 |
(In millions) | |||
2019 | $ | 5.9 | |
2020 | $ | 5.6 | |
2021 | $ | 5.6 | |
2022 | $ | 5.6 | |
2023 | $ | 5.6 |
(In millions) | Retention Level (per occurrence) | |||
General liability | $ | 1.00 | ||
Auto liability | $ | 1.00 | ||
Workers' compensation | $ | 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 Adopted Accounting Standards | ||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
Improvements to Employee Share-Based Payment Accounting | Under the new guidance, all excess tax benefits/deficiencies should be recognized as income tax expense/benefit, entities may elect how to account for forfeitures and cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity on the cash flow. | June 4, 2017 | The company adopted the accounting standard in the first quarter of fiscal 2018. As a result, the company elected to change its policy from estimating forfeitures to recognizing forfeitures when they occur, which resulted in an increase in Retained earnings of $0.1 million, a decrease in Additional paid in capital of $0.3 million and an increase in Other noncurrent assets of $0.2 million in the Condensed Consolidated Balance Sheets. The other impacts resulting from adoption did not have a material impact on the company's Financial Statements. | |||
Recently Issued Accounting Standards Not Yet Adopted | ||||||
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 its review of the impact of the new standard and has identified changes in the determination of performance obligations around product and service revenue. For commercial contracts in which the company sells directly to end customers, in most cases, the company currently delays revenue recognition until the products are shipped and installed and records third-party installation and certain other fees net. However, under the new standard, in most cases, the company will recognize product revenue when title and risk of loss have transferred and will recognize service revenue as the services are performed. Additionally, the company will record certain product pricing elements related to its direct customer sales within Cost of Sales rather than net within revenue as is current practice. The company has determined that these elements relate to the product performance obligation which the company is considered to control under the new standard. The company has implemented changes to its business processes, systems and controls to support recognition and disclosure under the new standard. The company is adopting the standard in fiscal 2019 using the modified-retrospective approach and as a result expects to record an accumulative catch up adjustment of approximately $2 million increase to fiscal 2019 beginning retained earnings. | |||
Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | This standard changes the rules related to the income statement presentation of the components of net periodic benefit cost for defined benefit pension and other postretirement benefit plans. Under the new guidance, entities must present the service cost component of net periodic benefit cost in the same income statement line items as other employee compensation costs related to services rendered during the period. Other components of net periodic benefit cost will be presented separately from the line items that include the service cost. Early adoption is permitted. | June 3, 2018 | The standard is expected to impact the classification of certain costs within the company's Consolidated Statements of Comprehensive Income. No impact to the company's Consolidated Balance Sheets or Consolidated Statements of Cash Flow are expected as a result of the standard. | |||
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income | This update allows for the reclassification to retained earnings of the tax effects stranded in Accumulated Other Comprehensive Income resulting from The Tax Cuts and Jobs Act. Early adoption is permitted. | June 2, 2019 | The company is still evaluating these amendments and has not determined its accounting policy and whether or not an election will be made to reclassify the stranded effects. | |||
Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities | This update amends the hedge accounting recognition and presentation with the objectives of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities and simplifying the application of hedge accounting. The update expands the strategies eligible for hedge accounting, relaxes the timing requirements of hedge documentation and effectiveness assessments and permits the use of qualitative assessments on an ongoing basis to assess hedge effectiveness. The new guidance also requires new disclosures and presentation. | June 2, 2019 | The company is currently evaluating the impact of adopting this guidance. |
Recently Issued Accounting Standards Not Yet Adopted (continued) | ||||||
Standard | Description | Date of Adoption | Effect on the Financial Statements or Other Significant Matters | |||
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 2, 2018 | June 3, 2017 | ||||||||||||||||||||||||||||||
(In millions) | Cost | Unrealized Gain | Unrealized Loss | Market Value | Cost | Unrealized Gain | Unrealized Loss | Market Value | |||||||||||||||||||||||
Mutual funds - fixed income | $ | 7.8 | $ | — | $ | 0.1 | $ | 7.7 | $ | 7.6 | $ | 0.1 | $ | — | $ | 7.7 | |||||||||||||||
Mutual funds - equity | 0.7 | 0.2 | — | 0.9 | 0.9 | — | — | 0.9 | |||||||||||||||||||||||
Total | $ | 8.5 | $ | 0.2 | $ | 0.1 | $ | 8.6 | $ | 8.5 | $ | 0.1 | $ | — | $ | 8.6 |