Facing what he described as an “investment year,” Herman Miller CEO Brian Walker was still optimistic about the Zeeland-based furniture giant’s financial success.
In a conference call with press and investors Thursday morning, Walker announced a goal of the company recording annual sales of $2.2 billion by fiscal year 2015.
In financial results reported by Herman Miller, Inc. on Thursday, net sales for fiscal year 2012 were $1.7 billion, reflecting a year-over-year increase of 4.5 percent. The company would have to record compounded annual growth rate of 8 percent from fiscal 2012 to 2015 in order to reach the goal, Walker said.
“His goal would be an all-time sales record,” said industry analyst Mike Dunlap. Herman Miller sales in fiscal year 2000 were just short of $2 billion, he said.
Even as the company reported healthy financial figures and an increase in its quarterly cash dividend for shareholders, Walker called the year an “investment year.” The company plans to build new production facilities in the UK and China, he said.
“It does not surprise me that Herman Miller is taking a growth strategy that involves a more international focus, such as was already accomplished by the (China-based company) Posh this year,” Dunlap said. Furniture manufacturers aren't moving overseas to outsource jobs as much as they are trying to sell in booming foreign economies such as China's.
Even domestically, there have been some reasons for optimism for furniture manufacturers.
“The forecasts that are out there for construction right now are actually quite strong,” Walker said. “Health care continues to be softer than we would have predicted at this point.”
The company announced an increase in its quarterly cash dividend to $0.09 per share payable in October 2012, more than a 300 percent increase from the current dividend payout of $0.022 per share.
The company reported net sales of $420.7 million during fourth fiscal quarter of 2012, a decrease of 4.7 percent from the fourth quarter in the previous fiscal year. New orders in the fourth quarter of fiscal year 2012 totaled $443.8 million, down 1 percent on a year-over-year basis, according to Herman Miller.
On a quarter-to-quarter basis, net sales and orders increased 5.2 percent and 23.1, respectively, according to the company