On Sept. 20, Herman Miller (NASDAQ:MLHR) released first-quarter earnings for the period ended Sept. 1.

  • Sales at Herman Miller rose 9.3% to $491.7 million, but weakness in the U.S. market led to a decline in the company's total orders and backlog.
  • Earnings improved by 26.8% to $33.5 million, or $0.54 per share, which was better than expected. However, the office furnishings specialist projected second-quarter results of $0.51 to $0.57 per share, which is below estimates of $0.59 per share.
  • The company plans to focus on increasing scale in high-growth areas while it waits out the slowdown in the U.S.
  • Folks over at the Motley Fool CAPS community have seen their scores slip as Herman Miller's stock keeps falling. They haven't lost faith yet, though, giving the stock a four-star rating (out of a possible five), while competitor Steelcase (NYSE:SCS) earns three stars.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2008

Q1 2007

Change

Sales

$491.7

$449.7

9.3%

Net Profit

$33.5

$28.5

17.5%

EPS

$0.54

$0.43

25.6%

Diluted Shares

62.2

65.6

(5.1%)

Get back to basics with the income statement.

Margin Checkup

Q1 2008

Q1 2007

Change*

Gross Margin

34.1%

33.9%

0.2

Operating Margin

10.9%

10.2%

0.8

Net Margin

6.8%

6.3%

0.5

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2008

Q1 2007

Change

Cash + ST Invest.

$81.4

$57.0

42.8%

Accounts Rec.*

$189.8

$179.0

6.0%

Inventory

$60.0

$58.2

3.1%

Liabilities

Q1 2008

Q1 2007

Change

Accounts Payable

$119.1

$116.3

2.4%

Long-Term Debt

$174.1

$176.4

(1.3%)

*Net of current portion.

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2008

Q1 2007

Change

Cash from Ops

$31.8

($6.4)

N/A

Capital Expenditures

$8.9

$7.6

17.1%

Free Cash Flow

$22.9

($14.0)

N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Mike Cianciolo held no position in any of the companies in this article. The Fool has a disclosure policy.