Herman Miller Investor Relations Presentation - Q2 …...Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 $29 $58 $33 $40 $0 $10 $20 $30 $40 $50 $60 Q3 Fiscal 2016 Net Sales $535 to $555 million Gross

36.9% 38.1% 38.3% 38.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Q2 net sales increased 3% from the prior year; orders were up 5%; on an organic basis, sales increased 5% and orders increased 7% over prior year

Gross margin in Q2 improved 150 bps from the prior year (adjusted for purchase accounting adjustments of $4.8 million) due to lower commodity costs, production volume leverage and operational improvements.

EPS in Q2 totaled $0.57 per share.

$151$162 $162

$169

$50

$70

$90

$110

$130

$150

$170

$190

Q3 FY15

Q4 FY15

Q1 FY16

Q2 FY16

$200

$300

$400

$500

$600

$700

Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16

$516$551 $565 $580

$501

$557 $563$601

Gross Margin %Adjusted Operating Income %

Gross Margin and Adjusted Operating Margin(% net sales)

Quarterly Net Sales + Orders($ millions)

Quarterly Operating Expenses($ millions)

Net Sales Orders

7.6% 8.7% 9.7% 9.6%

Q3 FY15 Q2 FY16Q1 FY16Q4 FY15

Q2 ending cash and equivalents totaled $55.0 million, up $3 million from Q1. LT Debt maturity schedule:

– PPN ($150M) due 2018– Revolver ($57M) due 2019– PPN ($50M) due 2021

Availability of $184 million on the revolving line of credit stands at the end of Q2.

CAPEX totaled $35 million through Q2. Expecting $70 - $80 million for fiscal 2016.

Dividends paid in Q2 totaled $8.8 million

Q3 FY15

Q4 FY15

Q1 FY16

Q2 FY16

Rolling 4 Qtr Coverage Ratio(EBITDA(1) to Interest)

Quarterly Cash Flow from Operations($ millions)

Rolling 4 Qtr Leverage Ratio(Debt to EBITDA)(1)

(1) Represents a Non-GAAP Measure, see Appendix for reconciliation.

12.9 13.415.0

0.02.04.06.08.0

10.012.014.016.0

Bank Covenant > 4.0

1.4 1.3 1.1 1.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0 Bank Covenant < 3.5

Q3 FY15

Q4 FY15

Q1 FY16

Q2 FY16

Q3 FY15

Q4 FY15

Q1 FY16

Q2 FY16

$29

$58

$33$40

$0

$10

$20

$30

$40

$50

$60

Q3 Fiscal 2016

Net Sales $535 to $555 million

Gross Margin % 38.0% to 38.5%

Operating Expenses $167 to $171 million

Effective Tax Rate 32% to 34%

Earnings Per Share, Diluted $0.37 to $0.41

Guidance as provided in December 16, 2015 earnings press release:

Herman Miller, Inc.Reconciliation of Non-GAAP MeasuresAdjusted EBITDA and Adjusted EBITDA Ratios - Bank($ in millions); (unaudited)

Adjusted EBITDA (Bank) RatiosTrailing 4-Quarter Period EndedQ3 FY15 Q4 FY15 Q1 FY16 Q2 FY16

Earnings Before Income Taxes (EBT) 133.6$ 145.2 158.5 168.5 Add: Depreciation 43.5 44.2 45.6 46.2 Amortization 5.2 5.6 5.9 6.0 Interest 18.1 17.5 16.7 16.0 Other Adjustments (1) 33.8 22.7 23.7 23.6 Adjusted EBITDA - Bank 234.2$ 235.2$ 250.4$ 260.3$

Total Debt, End of Trailing Period (includes outstanding LC's) 334.3$ 298.3$ 279.1$ 266.0$

Rolling 4-Quarter Debt-to-Adj. EBITDA 1.4 1.3 1.1 1.0

Rolling 4-Quarter Adj. EBITDA-to-Interest 12.9 13.4 15.0 16.3

(1) "Other Adjustments" include, as applicable in the period, charges associated w ith business restructuring actions, non-cash stock-based compensation, credits and expenses associated w ith the company's planned termination of its domestic defined benefit pension programs, as defined in lending agreements.