Herman Miller Inc. (NASDAQ:MLHR) Q1 2020 Earnings Conference Call - Final Transcript

Sep 19, 2019 • 09:30 am ET


Herman Miller Inc. (NASDAQ:MLHR) Q1 2020 Earnings Conference Call - Final Transcript


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Good morning and welcome to the Herman Miller's First Quarter Earnings Conference Call. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Kevin Veltman, Vice President of Investor Relations and Treasurer.

Kevin Veltman

Good morning, everyone. Joining me today on our first quarter earnings call are Andi Owen, our President and Chief Executive Officer, Jeff Stutz, our Chief Financial Officer and John McPhee, President of our Retail Business. We have posted yesterday's press release on our investor relations website at hermanmiller.com. Some of the figures that we will cover today are presented on a non-GAAP basis. We reconcile the GAAP and non-GAAP amounts in a supplemental file that can also be accessed on the website.

Before we begin, our prepared remarks, I will remind everyone that this call will include forward-looking statements. For information on factors that could cause actual results to differ materially from these forward-looking statements, please refer to the earnings press release we issued last night as well as our annual and quarterly SEC filings.

At the conclusion of our prepared remarks, we will have a Q&A session. Today's call is scheduled for 60 minutes, and we ask that callers limit their questions to no more than three to allow time for all to participate.

With that, I'll now turn the call over to Andi.

Andrea (Andi) Owen

Good morning and thanks for joining us today. I'll begin the call with highlights of our quarterly results, followed by sharing progress that we've made on our strategic priorities. In the first quarter, we built on our momentum from last quarter by starting the fiscal year with strong growth in sales and orders led by our North America and retail businesses. Consolidated sales grew 8% organically over last year, while orders were up 7%. We were especially pleased to continue generating positive results in the face of the ongoing global trade tension impacting the broader geopolitical environment.

Looking ahead, we are also seeing healthy levels and project opportunities in the pipeline. We've been encouraged to have more and more discussions with our customers about how we can assist in their efforts around attracting and retaining talent and help them design flexible, high performing workspaces. These discussions often highlight the power of the entire Herman Miller group of brands to meet those needs. Complementing the growth in sales and orders, we posted improved gross margins this quarter, which were up 70 basis points over the same quarter last year.

At the same time, our teams continue to manage operating expenses very well. The combination of these factors helped drive another quarter of operating margin expansion with reported operating margins 160 basis points above the same quarter last year and adjusted operating margins that were higher by 90 basis points. We reported earnings per share on a GAAP basis of $0.81 during the quarter. On an adjusted basis earnings per share of $0.84 cents, reflected an increase of 22% over the same quarter last year.

On the