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

Sep 19, 2019 • 09:30 am ET

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

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Presentation
Executive
Andrea (Andi) Owen

strategy front, we remained focused on the four strategic priorities that we shared at our May investor event. Let me summarize them briefly for you. First, we're being very intentional about unlocking the power of one Herman Miller to help leverage our amazing portfolio of brands and global capabilities to their fullest. Second, we're building a customer oriented and digitally enabled business model aimed at reaching our aspirations in both the contract and retail spaces. Third, we have clear opportunities to accelerate profitable growth in each of our business segments. And finally, we believe now is the right time to reinforce our commitment to our people, our planet and to our communities in a more integrated and deliberate way than ever before.

I'd like to share a few highlights of our progress over the last quarter. Our new digital platform to help our North American contract dealers to digitalize our product offerings across all of our brands remains on an excellent adoption curve. Our dealer network users created over 50% more projects in last quarter with the new tool and have created over 3,500 projects since it was launched to support their selling efforts. As a next step in this rollout, we'll expand this capability to the EMEA region by the end of the fiscal year. This is just one of the ways that we are looking across our entire operation to ensure they're easy to do business with for our customers, our dealers and our architect and design partners.

Our profitability improvement initiative continues to gain traction as one of the key drivers in our aim to accelerate profitable growth. As we evaluate our progress to date, we're seeing greater potential for savings and are increasing our savings target. Our original aim for $30 million to $40 million of gross savings has been revised to a target of $40 million to $45 million. We expect to achieve this run rate by the end of fiscal 2020 and finish the first quarter with an annual run rate savings of $36 million. As a reminder, in addition to supporting bottom line improvements, these savings are also aimed at helping fund growth initiatives and offsetting inflationary pressures such as tariff.

We have a long history of seeking to create a positive societal impact for our people, planet and the communities that we serve while at the same time creating value for our customers and our shareholders. As a result, we were encouraged by the recent Business Roundtable statement on the purpose of corporations to lead their companies for the benefit of all stakeholders. We have a number of initiatives and working out around this priority. For example, we've been exploring the potential for a broader plan around reducing and ultimately eliminating our use of single-use plastics across our entire organization. As an initial step, we've largely eliminated single-use water bottles across our corporate offices.

As, Kevin mentioned John McPhee is joining us today to share more about our growth trajectory for the