MLHR - Earnings call transcript Q3 2020

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Operator

Good evening, and welcome to Herman Miller’s Third 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 evening, everyone.

Joining me today on our third quarter earnings call are Andi Owen, our President and Chief Executive Officer; Jeff Stutz, our Chief Financial Officer; and Greg Bylsma our President of North American and Global Operations.

press our today’s at Relations posted hermanmiller.com. have release Investor on website We

figures today non-GAAP we’ll a of also that Some the the on cover supplemental that We’ve website. the be accessed a non-GAAP reconciled are GAAP in to amounts file can basis. on presented

that begin our everyone I include will will remarks, we call forward-looking Before remind prepared this statements.

as could please our differ materially release forward-looking statements, refer For filings. the forward to as and Any information from annual results looking well a on quarterly make obligation today we on information based SEC to this cause actual are events. of factors press no to result of date that earnings statements that future undertake as we assumptions or as statements new update these these and

will of Q&A minutes. conclusion our a call scheduled we remarks, prepared for have is the XX Today’s session. At

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

Andi Owen

spoke our quarter, have evening, in and the with Since thank you our progress. quarter our for an spread has as market globe. results the I'll volatility us. on the joining associated across With last with we by begin clearly overview remarks financial coronavirus outbreak for and Good today you environment, the accelerated of our on everyone mind, strategic update and an current that followed perspective uncertainty

also coronavirus results, but turn we're managing I Business, how who Bylsma, Greg not share situation. financial our further it American more only Operation our Contract will Before over our on on to for Jeff Global Kevin the information details leads North Manufacturing and oversees

families far been the out hearts first environment, that directly impacted and have to thus the our have to Moving on world our the and individuals the perspective go by coronavirus. around current foremost

and is taking right priority Herman at healthy, precaution and employees top Our community every to safe and so. to keep do we're Miller our now

we that we fluid on can business manage are this situation, we As control. our focused through the factors

contingency detailed have around plans. our the global developed We clock footprint are monitoring and

some our consolidated Given the which impacted third India, our Dongguan, X% there. on background The Asia quarter outbreak sales. China manufacturing served is me Asia in region Pacific, operations were and our results approximately footprint represent began in Infinity, China; of most provide by in let Pacific

XX% globe from sold XX% goods are the sourced of China. Across our to

mitigate As new world our nearly in region shipping of this key the capacity number suppliers Dongguan we're decline, efforts regions all applying in products producing time, that of proactively world. America China exposure are Europe. and and our operations cases team's the to North in the of the our learning and China full our are for At same in efforts manufacturing and our leveraging to

report the to the this backdrop, demand was contributed the higher HAY quarter. period last and year the Sales naughtone were picture brands as mixed the during X% of consolidation Against in than growth.

the slightly organic an below basis, On were year. last same quarter sales

X% Reported Our mandated sales higher impacted from while virus shipments on organic basis. than quarter the our an last North outbreak. China following government America based shutdowns while this unfavorably last retail businesses and than were lower the growth, broad delivered by order X% modest year, were facilities levels organic year

we the job overall costs managing relative teams Despite experienced line, top we're very on encouraged of softness by our did a and level we our profitability quarter. great in the the generated

our to business. continue in growth year-over-year margin improvement We drive

efforts of were expansion growth lower the over realization, year. primary and margin last drivers our commodity price Favorable costs improvement profitability

quarter delivered last increase expansion, over year. adjusted we another quarter the same XXX an operating of result, a basis As points margin of with

reflected in XX% basis GAAP other the while a on increase year. adjusted the excluded EPS, share quarter. of quarter the totaled were last per $X.XX, an This same charges special impact and of over which $X.XX Earnings restructuring

toward momentum our delivering on quarter, the to our earnings we positive for drove addition strategic commitment In priorities.

highlights. the share me of Let some

we’ve front, and in in recent Logitech, innovation gear. high performance industry an partnerships complexity organization the leader leveraged gaming gaming by on seating with our leadership e-Sports establishing First,

in these represent how can audiences to e-Sports research the they and be deep applied While rapidly margin our are market. the to early and an ergonomic days, partnerships arena opportunity highlight expertise bring to new our growing

Creating are aimed our is customer digital solutions that top one our priorities. at of experience improving

effort, As part of journey significant to our that E-commerce we progress made our platform. on refresh

as next designs have for page plans year. quarter the of DWR.com to re-launch our New completed first been part in DWR.com of

Miller.com North and Herman customer and in we also team communicate of which video improvements to HAY.com. We financing on our number launched chat care functionalities on with option deployed a e-commerce a America, our and platforms including generation next

experience, and a rate. result functionality new translate will believe designs upgrades which in to will customer These we conversion much improved higher

we're merchandising have bottom number With we marketing to last listening top an upcoming on More more spent around us of board to mentioned hitting in as team like global developing join growth the her about Debbie Debbie time our on business. January broadly ground is a and retail are learning. and deep to line us retail joined running. streams and retail and Propst expect that brand progress. her lead she in share initially quarter, a the of background brand, already work the business, the business lot excited assortment for drive areas She She and will across her call her to and

in pillars quarter led its Through exclusive female one firm out year. the the our line by business Collective, higher top is to margin this winning designs. a of the the partnership three award designers, [inaudible] like with of since our with already growth retail second sofa Ag to launch launch selling also joining designers highlight One, leading call accelerating profitable for our from is quarter. I’d in

deliver at established that North $XX continues work to goal improvement finished of this exceeded this our when in American profitability $XX which initiative means million began of we the savings that have we And finally, benefits to our bottom million to I'm We to years a our of line. rate pleased report million ago. two run quarter, benefit quarter $XX

has pricing our sourcing and learning our other to strategic in been be effort our efforts this particularly parts meaningful and business. analysis will into and leveraging of successes Our

for plants upcoming we the coronavirus Herman our long term quarterly demand. term will Navigating require changing sustainable environment in not the term for difficulties near an confident estimating given growth objectives fourth of remain flexibility, following the guidance quarter, given balance challenges we're providing coronavirus, of and situation we for rapidly practice the long our to with While surrounding typical ability the our Miller, face today. resilience

on With update on the that, operations. global to over Greg the let to an turn impact of call me coronavirus our provide the

Greg Bylsma

are our efforts around safety heart that of like Thanks at the Andi. reiterate and to I wellness would their coronavirus. our people and

number for increasing in a now to some significant have frequency scope of we place cleaning, our actions We taken, periods the include break allow operation with work across an of have changing and facility to work and the structure the increase initiatives distancing our cells. an in and the staggering teams right of the organization, of manufacturing in between time for social shifts

providing home, choice. face help Additionally, and symptoms if our stay understand guidance stay we well, they employees in not them barriers the and well to to they making may feeling encourage removing to that are health are look for,

driven situation this Pacific mentioned, returning the the delays we New region, by from Year. the past quarter government of felt Andi the Chinese in mandated impact As coronavirus initial Asia

an Our week, international net reduced full in $X by delay factories which shipments, sales caused for which the a in million segment. the Dongguan additional period for region in business were estimated an closed the

we manufacturing As working full region production. the to nearing few have those key our are past suppliers are over workers the of and capacity, returning been weeks, up operations our missed catch on and in

help meet region. Our manufacturing facility to in a in able been customer portion India demand the of has also the

coronavirus a ensure supply and support have in place address of has customers, disruption key maintain our markets, global As put critical across product spread plans our potential and contingency to suppliers. we we lines

issues meeting this As moving to are chains, we within well are situation, assess a to our risk or as fast ensure plans regularly supply fully implemented. new manufacturing remains mitigation any

With I’ll third details to response, financial to from our over that the background on call cover now Jeff the turn quarter. a

Jeff Stutz

good and Greg everyone. Thanks evening

the the were quarter ahead third last and prior million year organic year below Consolidated year of reported the an below net on a orders million of X% year slightly period basis $XXX.X last X% basis, on basis. reported above last of organically. X% Reporter same a quarter in on in and $XXX sales were the

increase our an from North GAAP basis quarter, of Within contract nearly year American a on the of segment, sales representing X% $XXX X%. million were organic an in improvement last and

and X% a up X% New than orders in of basis reported the quarter $XXX organically. year million last were higher on

financial services. growth energy project offset this segment reflected From to small saw larger patterns a partially we standpoint S. medium Federal activity in was demand in Government, growth while by lower the in U. sectors, project and sizes, sector Order lower. order healthcare in

third reflect orders Our approximately impact our a of Reported increase $XXX results in acquisitions international net the million quarter, sales contract orders in quarter. consolidation naughtone. entities year. the of million step segment HAY our sales to the last above $XXX or reported XX% contributed recent Collectively million $XX sales in new the our these of in same XX% to and quarter of the of

points in On an segment rate in China and organic from basis, year. at the growth quarter Dongguan, unfavorable in quarter. of decreased shut these the down acquisitions, X% international impact from impact our the XX% approximately sales in the factory respectively last percentage X mandated international net third of The the which by order excludes the facilities reduced

In basis, XX%. of year, X.X%. growth faced posted addition of the sales this to same this two In international organic organic quarter business growth for quarter. the particularly challenging year the business has last comparisons averaged growth the pressure, a sales On order segment

Given organic for Japan order Europe broad in during higher Mainland order based, period. fairly the the declines except difficult levels and comparison, were

of reported $XX quarter the the which sales business last flat in retail to year. Our same compared quarter were segment million,

of New down basis. $XX were on year-over-year orders the for period a X% million

days Miller comparison to significantly clarify this was in year this of timing by product calendar, the last It's order same promotion included difference, approximately specifically important difference ago. quarter Herman X% quarter for this been that as Normalizing our was shifted last to third timing year. that this year our retail would estimate a quarter and timing sale impacted a than fewer our result, a have did year the it lower six we

includes the initial purchase accounting Consolidated was quarter related and to adjustments HAY. XX.X% of margin gross certain the in

realization, profit lower year. points our price costs Excluding gross margin XXX efforts, steel expansion. and than these gross to ongoing margin items, of last all improvement XX.X% adjusted contributed basis Favorable was higher

current consolidating to third the year-over-year million and in in same items, of a HAY million the these million operating quarter HAY third $XXX Exclusive million expenses related we expenses $XXX and By quarter The recorded million of charges of transaction with accounting of Operating purchase last special quarter primarily year adjustments totaling of resulted associated of compared to and $X ago. increase quarter included naughtone. the the comparison $XX $X.X naughtone. in charges mainly fiscal from in impact year. the expenses special

actions basis charges third quarter initiatives. year $X.X improvement profit our earnings ago in a million compared quarter operating million reported period. the Restructuring $XX we earnings the related totaled of associated this of operating and to $XX to On with in GAAP million

special other X.X% of of or third and quarter in sales restructuring operating the were of reported million we and $XX comparison adjusted $XX operating Excluding sales year. earnings quarter or charges, income X% of by last adjusted this million

to The diluted quarter rate totaled net quarter per million or same $XX adjusted the $X.XX last an on adjusted third finally total third or last a the earnings an share On to this share earnings of earnings in $X.XX $X.XX XX.X% million per year. share per compared basis quarter the year. $XX effective in was and tax in compared per basis $X.XX quarter share

will call sheet. who flow Kevin turn that, With us I'll cash and give to update the our balance on an over

Kevin Veltman

investment at the ended related lower equivalents quarter. was million, $XX We quarter the of million of million the than cash the last HAY cash Jeff. to quarter, the beginning Thanks and $XX $XXX cash-on-hand total with which primarily in

prepaid of over Cash capital third quarter operations key primarily the increase last cash year. levels. flows working same expense an was of driver operating due higher to from and $XX in reflecting inventory the Lower million, flows, decreased the were XX% quarter of

end $XXX at $XX in quarter quarter. in repurchased Cash stood all quarter credit the gross our million to debt the capacity Capital $XX available We $XX of million million, ratio in at was were paid the end remain approximately of X.X:X. quarter. shares expenditures compliance totaled EBITDA for as the were bank and on covenants debt million facility our the dividends quarter. while The with

moving Given cash near total from to forward. our capacity, remain flow business positioned well ongoing the financing needs borrowing current cash we term volatility weather balance, the and and market meet the of operations

Jeff. back that, With the over turn call I'll to

Jeff Stutz

Kevin. you thank Okay,

the the mentioned our changing term situation impact make around Andi it business. surrounding rapidly difficult near efforts estimate COVID As on XX too global to mitigation

sales guidance following there for such, few But our are practice that are quarter. the and offering typical a of can said, fourth share. that As points we we not being with earnings data

enter from last backlog we quarter of with million, year. X% up a begin, $XXX approximately fourth which To the consolidated is

As a we weeks general six of rule, our approximately shipments backlog period. a head new represents typically into reporting as

To-date To the X% sales our the to X%. the U.S. from consolidated expect would first both customers we levels, timing while from provide shipments, requests through scheduled dealers up a fourth have of adjust activity weeks quarter, we approximately though sense current down last new orders were to in received closer of minimal of were and this year, the to and increase. abroad, two

majority cancellations fourth the of meaningful any experienced we and ship would quarter. backlog not However, expected to the our to-date within have order

with operator we'll take now back questions. commentary, I'll turn additional to and So the call that your the over

Operator

[Operator The Ruben Our question Instructions] Gardner Company. you. Benchmark Thank from comes first with

now is line Your open.

Ruben Gardner

Good Thank everybody. you. afternoon

Andi Owen

Rubin. Hi

Ruben Gardner

So, been awhile we actions us like – start this. the just we core how to remind environment enter maybe any since guess softening of on if to before growth? a margins, can think were had volume take detrimental I you business about it's you period we've Can an

Jeff Stutz

Yeah. think like know, I we've is, is with I our do in of I'll is I’d recessionary lot experience this back Ruben, stab environment a history. dealing Jeff. emphasize an don't this, seen going we and what periods but have this take

to a two thing manage about down So way our a into how or know period. do we

So based with actions, emphasized that’s start key. let you before – me now on –

time Our even higher on of China bursts XX% short XX% up contribution maybe somewhere short bursts, in little small increments lever margin and we've a incremental business, and between said in always can perspective, lever time. changes a down revenue in in

that taking both structure variable cost its can as But XX times make downturns, is we years the we’ve we've is action last bold the in and had two around reduction significant business cost a build it. naturally,

last And is the what not so that couple of level of in downturns. de-leveraging experienced we

it's XXX I basis we I'll go play move way, recession best I'm And So probably are the give between a that back operating same general rule, not XX% you. as but XXX in the probably exact saw with out going reference it’s my suggesting margins the somewhere things reference to can last revenue to a point. movement best and points.

rule. general So as a

kind So if moves of times if on. it it it XX%, and moves two so would that be XX%,

Ruben Gardner

improvement get Thanks any see point that got does environment mean, to there so interruptions. Jeff, that’s off closures. on you initiatives some that very to helpful. Are How with can temporary have environment we And that then I be before? this are you've anticipated assuming dealt about just never an you put I'm we've could might be savings the thinking an going have in this there now. know you've as at this a lot risks year, when you of profit right given that

Andi Owen

think I – Andi. Ruben, this is know, You

by learned through optimization through I I muscle this that. and I continue anticipate we've do a a and this around help Anything, going what best. we of built us do and going would in that we downturn if efficiencies would lot for process how anticipate prepare process we what think to we we've will think

Jeff Stutz

Jeff. is Yeah, and this

some way, and Greg front I is of was add on lot actions on taken America, he call think center individual today and he too. the we've North the so in the us the look thoughts work – as a by you here at with might and

know discounting thing one been has when that impact be what balanced you a historically. in off, I downturn levels price find the would to you past around drop factor and about volumes The say is,

seen have had flow have XX as that certainly we months. that, past through this Now entire the last we quarter margin good not we for

I one So you out. that add a thing, I want if don’t forth, Greg to and make work lot price we've see no predictions, plays but have the increases anything. around know how that is done so we’ll and of would to

Greg Bylsma

to just the about would comment muscle. add I maybe on Yeah, Andi’s

things. way a do and way we While project, into work out we the it the started as turned it

do improvement of of get So expect the anything ‘oh! going or in what would been say, doing necessarily wise.’ way I don't to front profit in that That’s we’ve to

Ruben Gardner

Got to I on the and me And from hate harp it. then one it. last

cash quarter. about this cash think puts versus of it continue congrats how How the generate period? the obviously given are balance environment, cash we the and positive sheet. on on Just through you do assuming what and building think flow, you about up How uses you guys sheet? you guys about do flow the to strong Thanks balance a and do takes have think

Andi Owen

I'll few this. on Ruben. thanks thoughts a Yeah, give you

can going you I category. and puts to directly by as I’m imagine and that don't to takes So know get

You to given the in our scenarios. In can structured historically, amount now, imagine recessionary right at are of see our actively terms nature just business. looking of range fair the of early the a part are period of inflow, cash how we tend we a

a kind So have of points we expectation. data build of least couple at an to as do that historically just

But do know the course of the at back been to everything looking about important we but term fund you near super year capabilities new from which at think in we've capital building need the strategic we’re period, how along a the so, we some investments potentially balancing spending, for path down on were that are towards. or ways last down that pull talking

we're know tighten to to to belt what try protect can. you that’s we going our So and where try

out. currently scenario mentioned cash worth on prepared lots sheet. Kevin his remarks, good balance the happening it’s I a of of is think And amount pointing as in got modeling that got We and we’ve

we've thereabout fairly a year little credit of ago. which turn a borrowing a the debt capacity we on of over $XXX year ago We've got $XXX ratio, upsized got have low one cash-on-hand; do the leverage line a million. lots position under just or net of we and know You our with million

to period into the credit a challenging was enter at the turns. to we as as we leverage we we pension that into as three probably ever that last point, above and through leverage had I’d U.S. and over plan, and way ratio that and had as feel So it that we one evident we going a our to the X.X underfunded sorry, – a maybe crisis well go got positioned have significantly was managed never about ratio downturn

So you’re as a this us I to what other going manage not side. you it from certainly no in are means critical get to our we come investments but near through out on the positioned to that we way protect the get think prediction predicting, to one the term, need well and

Operator

Thank Instructions] Greg you. Company. next Our Burns & [Operator Sidoti from question with comes

Your line is now open.

Greg Burns

that Yes, what business, about maybe the recession. around? know history the time different in how Maybe time that given this performs you around impacts is I talk through how retail of operations. business a this guess that In

Jeff Stutz

is this Jeff. Greg,

the found to a HAY, as a you bit to that good know the I a with think much we is point perspective. I given that levered our product in that last as and it price downturn little contract space. tend given business little price But the You so half that’s that. be higher now bit It’s say answer. the qualify that about business, business We with I down our at, historically retail our which thing. that some difficult based points can’t focused give on, can changed is

out it was least then, that at it and proved much that impacted. felt less we So

the You was still it it but know moderated clearly down, overall.

felt sure heavily you. now know we well consolidated including all it moderated I planning, work decline are what in can the folks we described that the are would it all offer I overall if a group. scenario Had right and about have that as you segment be you’d That's that owned on Again, of don't and as I focused we that on our retail there's can add… then,

Andi Owen

to I would and Greg. Yeah, add that

making, that looking things way fact introduced customers that we there; have versus are things addition those we've we've of HAY at think and way to the I Debbie an in appointments. her online recession, have the the the the team and are our look updated didn't last platforms, you presence price we and If and certainly digital at appointments the for ways additions assortment virtual have point that are the in-person

we excuse an I little me than I know last bit having were think of unprecedented But – said our a input. that, kind in my – better is that those would this downturn. to in things have be be time, position but perhaps

Greg Burns

open? currently Okay, Have anything? and are all your pulled stores you

Andi Owen

step of retail selling the our on DWR, trade, or and stores, me like much typical and relationship through let by a so so bringing Yes, sales that not really at it's of take business back less is architects, of good little the a in because most the executives a talk portion so selling about dependent our who bit process a are driven clients traffic. designers, account are we're walk-in interior in business is a lot

stores, So in where obviously we've virtual the issues, our mandated which governments shut we we the in models. a gone and where area bay Jersey of have to shutdowns stores have is had remainder only appointment we've California, have curfews where New

closed essentially while walk-ins, executives are So available. to our account public we’re

As store. we where I people associate an can in actually connect online the mentioned platform a have with before,

selling don't we’ll as might as others don't anticipate see stores a in we same a but closed we So that have sales, that drop anticipate the see drop we do. we’ll actually model have

them from now, have Now of now. impact but closed much HAY more but a transaction from have based, it's right a still perspective, a expect we few we because we the don't stores, major

Greg Burns

seeing change a last but And so. thanks. of and the quantifying last in demand, to kind I change, everything's in business mean within color things, over is really what accelerated patterns, the you early really or just last on know order the qualitatively but seems a it week guess – it anything maybe week much couple in isn't you're it any really this too Have first so. there the the early you like too seen step or of you're great – Okay, know in not some weeks and shift seeing guess say quarter of then week I or I I

Andi Owen

surprised if if Surprisingly, change, I here retail anybody’s can guess we tell that, said to the business, sit and continued haven’t a the contract trends. in business, I that what think have we’re and see we no, I you think to know look see we all our expect at Having you of cancellations, of business in had the drop retail I today but we a in dramatic and day-to-day. seen side and our the we the see will haven't side

So you we know but Chuck mentioned things, all those of are now, as – of as planning planning right for earlier, we're no.

Greg Burns

don't last one the the know in crisis, you before I or delay around back ‘XX economy? then. it, What got by What the know, two was experience a time You ’XX, maybe time? know, a experience business was then; the how there was what on lead was impacted the what going or was saw really quarters the like it financial you

Greg Bylsma

come try I'll memory having had me back a lately. and Greg – to is This lot that to

provide I if can some Let color. see me maybe

back the in thing as increased in to timeframe late we and $XXX,XXX. the day-to-day it’s first time declined. time orders all October-November by was ‘XX back defined volatility calendar the off to started drop kind in as That pretty get of that. the as that market at and quick We ’XX, you what see you call so less remember, So seem than a ’XX, frame early business that where we saw

through is stay really construction. or the both decided either landlord also you the tenant. the tend are no project, lease Those have new new people project, to have if a you to through committed a to people and choice, to are but tend larger because who and/or complete have to just longer, they move What projects

day watch strong going as we're said, So this be and Andi to is through as the I day-to-day that thing still. the every seems that pretty

relatively that's given you're albeit You're are contract that have – demanded part that going it XX%, while you know probably maybe side on or saying, the hurry of you didn't So we up? is some who cases interesting small on. in three actually an ‘Can weeks We have ago.’ a the dynamic four getting business, people getting all healthcare

big the think is So what watch, I day-to-day indicator. that's we the

the about you're going I backlog, you committed know I talked the backlog, but the You that and the thinking committed what Jeff about who out you'll of long imagine are that think goes ’XX. who are like the planning farther people to projects backlog how question winter maybe maybe people this will is would have fall then about, know they is were see that or to and see, remain happens

Andi Owen

Yeah, to would add well. and I that as

with of maybe not that home, thought from well home work know they the be. seen we've number people up You folks that might a realization think as I set they sudden are are large to working from as

demand that as remote So related we are have working and seen an to well. increase in products

Greg Burns

Okay, is there else I’ll queue? not... if I’ll anyone in the or hop out keep on going

Jeff Stutz

ahead. Go

Andi Owen

ahead Greg, yeah. go You can

Greg Burns

Okay, alright.

into like this one So about, historical a going just downturn. perspective, maybe another

kind this recovery. slow is of industry The

terms this more maybe in that XXXX. buildup have time. Was like, you had ’XX or didn't ’XX of kind overcapacity it not of the But around. would maybe overall never this what the You a maybe last time would have than you access Like steeper this look seem or like in less frothy an in going year? does the industry even market of versus in case where decline you see what time

Jeff Stutz

Yeah. we just to that a is been steady as me I the that points actually, so a would Jeff, predicting been again, difficult has let trending been in. you hard, entire as months with we’ve one not that impossible several that agreeing It’s it’s me use factor for next is but or you’ve describe perhaps little over this but if it’s your did. by – couple Greg. start the recovery frothy make. I word, we This Maybe XX to would would the relatively liked, years have

investors three the early spaces crisis of of of But the these landlords, we we what capacity. or of we deal on big fill you, space That moved remember credit new was, yeah a moved that meeting two on kind the killer furniture. offices recovery, bought recall drove lot to floors we're the part from behavior I but Greg road out was we space in down part we levels factors lot felt with of town, desperate and maybe demand hear, moved reasons found into those of the early the early got floors, their a to I the the of coming lot I’ll days, that but came setback. together recovery. the and same if that our come out of you don't was in around, across make what and Rent time know of those no just this so the for being predictions, there we because a in will would we and down one we a

thing government as of other that then recovery, Government Federal was because of our the the the in businesses, off. I of Herman to expects revenue is or it got That related I probably it somewhere Federal for for recovery. spiked the business I years part the Miller between and think up was The the XX% out want forget base to XX% GSA high and many dropped but I and years X% ramp related ran those say, early Government then and of business percentage revenue year, spends. many, into coming that point kind for would of

– those only the to those often So things and stick are government times fed a softens. if even round, if The saw. that around comment is probably few even because tend broader observed economy just the worth projects we noting, last

stop I'll blabbing. So

Greg Burns

right, thanks. All

Jeff Stutz

Yeah.

Operator

you. Thank

Ramsey Group. with from question next Thompson Our comes Research Steven

line now is Your open.

Steven Ramsey

out a considering slightly. – was I slight million mean, you really about the of Good surprising kind that North or that up down and the or well level But and orders what’s guess of going in is $XXX of thinking America there. afternoon, there. is uncertainty good the just terms year-over-year. order this know uncertainty a does setback I surprise down sales on there out – evening. working are orders I I given

Jeff Stutz

want you that to take Greg, one.

Greg Bylsma

rollout was performance the isn't make actually a I the team know kind really would kind of of actually my You that it say quarter do I of forecast. when surprise;

of exactly causing at But have on. spot as anticipated. tends you a wasn’t of when we a and almost thought. We We within to couple revenue are pretty little kind had to orders, much bit exactly us million predict were – which variation orders we where of that a scheduling are and look we

plan watch team, but think I guess you order news so things too that happen the performance looked you quickly to the I the and this but much you they’re far us. the we've and ever process and the like more think difference don't at than they that, think say had have, only maybe making I But we and as the who for a think I right not run folks because news, with and pleased a stronger quarter. now, sales, a else, cooler a I watch have expect that top leader and at a has I at under looked I’m everybody would that’s region, team in the left that I I

Steven Ramsey

for impact is beyond, and from guess other is Great! maybe the what any back And less the guidance, half there hold that or factors? the exactly you cancelations, minimal first thinking on then the visibility visibility quarter the about, quarterly log making given off six order no guidance weeks the just I specific

Andi Owen

I in I is you in this anyone's in watching to weeks will position. and the just really know and puts what think biggest, you in flat we'll lot the of you unknown next would a couple curve the really really be China Europe but, think learn guess virus could that? happened difficult won’t and happen, add be will impact it curve, what to how know the it U.S., it’s flat the specific it's Jeff, in think I a what think the and I around factor

Jeff Stutz

time. to unprecedented it’s Greg uncertainty be but was, you hour we situation past the alkylating the No, feel don't range that see that you in we almost comfortable several around it – just described, point here's guided more just it this this a to simply think business transparent to as happen just making just know day know by we what with see, felt and quickly hour days, it day and data over I change you tell was that seems at can’t you

Steven Ramsey

in mean know kind past know profit delay term retail combined retail I in this you segment margins the uncertainty, you does you with reset or in the and on kind any margins. have the operating to guess And I long Great! just HAY the the journey of does that recent the the of factors bring thinking outlined then

Jeff Stutz

in impact Jeff. I Steven, I many the industry, know this in be don’t run. what believe some expect is careful which we how likely our us. is least a to say guess know described, because to yes, dislocation there's extent we this given at I industries this, – you would want going short delay we I simply across we answer the to because in

to revenue that’s our I flippant, that we am planet uncertainty. since exposure it’s and expect going is and XXX% am be just earth, to, but trying of certainly scale Yeah, to

you just get delay. the side once it’s a of lots know and hope of to likely I'm So you We will snap and have feel disruptive we back, this we’re for understand we some wrong how commentary, around potential that sure other we it after is. quick thing the

So is, answer some the honest I likely delay. think

right and of this, very those I strategic on going be in that exciting we're other of the are term most we're strategy are make side we some we make of are place so think term, working a and I and are protect of can once that down the on business on. they investments think work in know if us long stronger bullish the that we path we're we the going well we on capability highlighted now, around, compete Andi place And out that’s think digital to to much please, long the really those these sure parts some positioned. long to are to way you these Andi and building

Steven Ramsey

you. Thank Excellent!

Jeff Stutz

Yep.

Andi Owen

you. Thank

Operator

Thank I'm to remarks. Owen would back to questions you. call not closing Andi now I turn the showing any this further time. for over at like

Andi Owen

interest quarter will us really you on Miller you safe in of for look to and the guys join healthy. we a that really I please next lot. the We Herman meantime, your today. in your call appreciate continued Thanks joining Thank and keeping hope for community seeing staying us you all In again.

Operator

gentlemen, you conference today's for and Thank call. this Ladies concludes participating.

disconnect. may You now

MillerKnoll (MLKN) 18 Mar 202020 Q3 Earnings call transcript