Herman Miller (NASDAQ: MLHR) designs and manufactures interior furnishings for office, healthcare, educational and residential settings. Offerings include modular systems, filing and storage systems, wooden casegoods, executive task chairs and desk lamps. Products are manufactured in the U.S. and the U.K. for customers in North America, Europe, Asian and Australia.
The firm pleased investors late last month, when it reported fiscal Q4 EPS of 71 cents and revenues of $519.1 million. Analysts had been looking for 57 cents and $488.4 million. Management also guided Q1 EPS and revenues to ranges in-line with consensus Street views. In discussing the solid results, the company credited the effects of its international expansion program.
Human habitat designer Herman Miller, Inc. (Nasdaq: MLHR) recorded second quarter (2Q) fiscal year (FY) 2008 profits that beat the Street by $0.13 per share, enough to push the stock up to $32.96, up from a $28.42 close on December 19th. In short, all the incoming money numbers are up, and all the outgoing money numbers are down, just the way investors like it. Sales are up 1.4% to $505.9 million, while orders are up considerably more, 8.2% to $572.5 million. The backlog of orders also increased 7% to $346.5 million, so the company is looking towards at least several more highly profitable quarters based on current numbers.
Despite a rather soft economy in the U.S., orders increased 9%. International orders increased 12.7%. Herman Miller is still in the midst of a restructuring plan that, while obviously working, still entails significant expenditures: $5.2 million in 2Q FY2008. The company is very cognizant of the need to control costs and keep a lid on operating expenses, which declined almost 22% in 2Q. The only bump in the road is that the company took on $200 million in additional debt to pay for $200 million in stock repurchases.
Other big news is that Herman Miller recently agreed to acquire Brandrud Furniture Inc., a healthcare furnishing company. This move will allow Herman Miller to expand its healthcare products offerings. Management forecasts 3Q FY2008 sales to be in the $475-$500 million range, or EPS of $0.55-$0.62, surpassing the company's 2007 total revenue of $1.92 billion.
In an attempt to put "knock-off" imitators out of business, high-end furnishings designer Herman Miller Inc. (NASDAQ: MLHR) will unveil a number of its famous designs on Second Life. The designs will be available at no cost to consumers who were duped into purchasing knock-offs from unauthorized vendors, as long as the buyers agree to get rid of the unauthorized inventory. For other consumers, the designs will be available at a reduced price. Consumers can find Herman Miller's entire collection within Avalon Island in Second Life. Herman Miller intends to expand its virtual world presence in order to provide detailed depictions and descriptions of its designs.
Recently released 1Q FY 2008 earnings support Herman Miller's bold expansion into the virtual world. Sales for the quarter were up 9% to $492 million, net earnings increased 17.5% to $33.4 million and diluted EPS increased 25% to $0.54. Simply put, operating earnings are up while operating expenses are down. Herman Miller has posted 15 straight quarters of YoY sales growth, driven in large measure by a 17% sales increase in its international markets, primarily Asia and the UK. International orders are up 6%, which helps to counteract a 5% decline in North American orders. Perhaps Herman Miller's expanded virtual presence will inject some energy into the North American market.
Senior management expects 2Q FY 2008 sales of $475-$500 million, with diluted EPS of $0.51-$0.57. The company has already repurchased 1.9 million shares of its stock for $60.8 milion, and recently authorized repurchases of an additional $300 million. At under $30 per share, the stock could be worth a look. Certainly its virtual show room is.
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Nollenberger believes Big 5 Sporting Goods' (NASDAQ: BGFV) shares are fairly valued and would likely get more constructive near the $20 level and initiated shares with a Neutral rating.
ThinkEquity said Nutrition 21 (NASDAQ: NXXI) has a number of clinically proven nutritional supplements that target the rapidly growing obesity and diabetes markets, and initiated shares with a Buy rating.
SMH Capital initiated shares of Sonic Solutions (NASDQ: SNIC) with a Buy rating, on the belief that shares have been oversold.
ThinkEquity is positive on AeroGrow's (NASDAQ: AERO) proprietary aeroponic technology and recurring revenue model and initiated shares with a Buy rating.
Leerink Swann started shares of Sequenom (NASDAQ: SQNM) with an Outperform rating as MEDACorp researchers are positive regarding the company's MassARRAY system for genetic analysis, which is well-positioned for growth in follow-on SNP fine-mapping studies; Leerink anticipates in 2008, the company will launch iPLEX 3, which is currently in development, and reduce the cost of acquiring fine-mapping SNP data...
OTHER INITIATIONS:
Dover (NYSE: DOV) was initiated at Morgan Stanley with an Overweight rating.
Merrill started Akamai (NASDAQ: AKAM) with a Neutral rating.
Pacific Crest started Wipro Ltd (NYSE: WIT) with a Sector perform.
Susquehanna initiated Herman Miller (NASDAQ: MLHR) with a Positive rating.
RBC Capital initiated Warren Resources (NASDAQ: WRES) with an Outperform rating.
and manufactures interior furnishings for office, healthcare, educational and residential settings. Offerings include modular systems, filing and storage systems, wooden casegoods, executive task chairs and desk lamps. Products are manufactured in the U.S. and the U.K. for customers in North America, Europe, Asian and Australia.
In an attempt to put "knock-off" imitators out of business, high-end furnishings designer 
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