Revenue during the quarter went down marginally by 2.16 percent to $524.90 million from $536.50 million in the previous year period. Gross margin for the quarter contracted 149 basis points over the previous year period to 37.25 percent. Total expenses were 93.33 percent of quarterly revenues, up from 91.74 percent for the same period last year. That has resulted in a contraction of 159 basis points in operating margin to 6.67 percent.

Operating income for the quarter was $35 million, compared with $44.30 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $52.50 million compared with $56 million in the prior year period. At the same time, adjusted EBITDA margin contracted 44 basis points in the quarter to 10 percent from 10.44 percent in the last year period.

Brian Walker, Chief Executive Officer, stated "While demand patterns across our business remained mixed this quarter, we were particularly pleased to see a marked improvement in the level and pacing of new orders within our North American Contract and Consumer business segments, both of which posted strong growth over the third quarter of last year. Net sales and gross margins for the quarter were within the range we anticipated coming into the period, and our teams did an outstanding job controlling operating expenses. The combination of these factors helped drive net earnings above the expectations we established back in December."

For the fourth-quarter, Herman Miller, Inc. projects revenue to be in the range of $575 million to $595 million. The company forecasts diluted earnings per share to be in the range of $0.53 to $0.57.

The company has spent $99 million cash to meet investing activities during the nine month period as against cash outgo of $58 million in the last year period.

The company has spent $29.60 million cash to carry out financing activities during the nine month period as against cash outgo of $76.60 million in the last year period.

Cash and cash equivalents stood at $78.40 million as on Mar. 04, 2017, up 41.77 percent or $23.10 million from $55.30 million on Feb. 27, 2016.

Working capital increases sharply
Herman Miller, Inc. has recorded an increase in the working capital over the last year. It stood at $107.70 million as at Mar. 04, 2017, up 42.08 percent or $31.90 million from $75.80 million on Feb. 27, 2016. Current ratio was at 1.30 as on Mar. 04, 2017, up from 1.21 on Feb. 27, 2016.

Cash conversion cycle (CCC) has increased to 16 days for the quarter from 14 days for the last year period. Days sales outstanding were almost stable at 15 days for the quarter, when compared with the last year period.

Days inventory outstanding has increased to 22 days for the quarter compared with 19 days for the previous year period. At the same time, days payable outstanding was almost stable at 20 days for the quarter, when compared with the previous year period.