MillerKnoll, Inc. (MLKN) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Herman Miller, Inc. 2020 Annual Shareholders Meeting. Today's meeting is scheduled until 11:00 a.m. Eastern Time. This annual meeting is being recorded and will be available for replay on Herman Miller's website. The presentation and any remarks made today may include forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include those risk factors discussed in the company's reports on Form 10-K and 10-Q and other reports filed with the Securities and Exchange Commission. Hosting today's meeting is Mr. Michael Volkema, Chairman of the Board of Directors; and Ms. Andi Owen, President and Chief Executive Officer. Mr. Volkema and Ms. Owen are joined by Mr. Jeff Stutz, Chief Financial Officer; and Mr. Kevin Veltman, Vice President of Investor Relations and Treasurer. Mr. Volkema will open the meeting and conduct the formal business agenda, followed by a brief business overview presentation by Ms. Owen. Following Ms. Owen's remarks, there will also be an opportunity for questions submitted by shareholders. Please begin submitting those questions now using the webcast directions on your screen. As noted in the proxy statement, only questions that would be appropriate to raise in person and related to the purpose of this meeting will be accepted. Questions will be answered in the time available. Unanswered questions will receive a response using your shareholder registration information. Finally, at this time, Herman Miller also invites any late proxy vote submissions using the Vote Here button located on your screen. We'll begin today's meeting with Mr. Volkema. Please go ahead, sir.

Good morning, everyone. On behalf of our Board of Directors, I'd like to welcome you to Herman Miller's 2020 Annual Shareholders Meeting. We hope this meeting will offer you some valuable insights into our company. As already mentioned, I'm Mike Volkema, and it has been my privilege to serve as Chairman of the Board during this past year. In that capacity, I will now formally call this 2020 Herman Miller Annual Shareholders Meeting to order. I would also like to welcome the Herman Miller Board members attending by conference call, including Mary Andringa, Dave Brandon, Doug French, John Hoke, Lisa Kro, Heidi Manheimer, Candace Matthews and Mike Smith. We are also joined today by Andrea Rodbro from KPMG LLP, our independent registered public accounting firm. With that, I'd now like to return to the formal matters of business today. First, as Chairperson, I will waive the reading of last year's minutes in the interest of time. Next, I have received an affidavit of distribution, which certifies that all shareholders of record as of August 14, 2020, were provided access to a Notice of the Annual Meeting, along with access to the proxy statement, proxy card and annual report. At this time, I will declare the proxy polls now closed. In addition, I also wish to confirm that Jeff Stutz, our Chief Financial Officer; and Kevin Veltman, our Vice President of Investor Relations and Treasurer, have been appointed Inspectors of Election for the proxy vote. And I'd now like to turn it over to Kevin to review the results.

Thanks, Mike. I'm happy to report that we do have a quorum as approximately 89% or 52.3 million shares are represented at the meeting in-person or by proxy. And now for the results of the proxy vote. I am pleased to announce that all proposals, as recommended by the Board of Directors have been approved. Mary Andringa, Andi Owen and Candace Matthews have been elected as directors for a 3-year term, serving until the 2023 Annual Shareholders Meeting. Shareholders have also ratified the appointment of KPMG LLP as the company's independent registered public accounting firm for our fiscal year ending May 29, 2021. The Herman Miller, Inc. 2020 long-term incentive plan has been approved by shareholders. Lastly, the compensation of our named executive officers has been approved on an advisory basis. The final voting tally on each of these proposals will be filed with the SEC on a Form 8-K. After those results, let me turn the meeting back over to Mike.

Thanks, Kevin. With those matters concluded, that completes our required business agenda, and I'll declare this the end of our formal meeting. Andi Owen, Herman Miller's President and CEO, would now like to present a brief overview of the business. Following Andi's presentation, we will have an opportunity to take questions in the scheduled time remaining. If you have a question, please begin submitting those now using the directions on your computer screen. With that, Andi, I'll turn the meeting over to you.

Thank you, Mike, and good morning, everyone. Needless to say, our fiscal year 2020 was like nothing we've seen before. Pre-COVID, we were capitalizing on our positive momentum, executing well against our strategy and delivering strong financial results. As we moved into our fourth quarter, like so many others, our entire business was impacted by COVID-19. Most of our global manufacturing facilities, retail studios and stores were closed for several weeks. While our full year fiscal 2020 financial results reflected the fallout from the pandemic, our priority of maintaining a durable balance sheet served us well. Sales of $2.49 billion for fiscal 2020 were down 3% from the prior year. We reported a loss per share on a GAAP basis of $0.15 and delivered positive adjusted earnings per share of $2.61. We closed the year with $454 million of cash on hand to support our business moving forward. Herman Miller Group enters its new normal in a position of unique strength. We continue to believe strongly in the power of place to create culture and community. We have the expertise and solutions to guide our customers as they look to reimagine their spaces, and we have the channels to meet our customers wherever they work, heal, learn and live. Our physical and digital distribution capabilities around the globe are well positioned to serve both contracts and consumer audiences. The 4 pillars of our strategy continue to focus the efforts of our organization, and we advanced each of these priorities in meaningful ways in fiscal 2020. First, we are successfully unlocking the power of One Herman Miller to fully leverage our amazing portfolio of brands and global capabilities. We've aligned our products, operations and functional teams to new global structures that have improved our agility and speed, and we've deployed our sales teams to more effectively leverage the power of all of our brands. Second, we're building a customer-centric and digitally enabled business model in both the contract and retail markets. Our customer-first mindset led to the development of important digital solutions, including several meaningful announcements to our retail e-commerce platforms and a new tool called Scout that helps our contract customers and design partners visualize and select products from across our family of brands. Third, we are accelerating profitable growth in each of our business segments. The acquisition of majority interests in HAY and naughtone provided us with 2 growing design brands. We will continue to extend our reach into exciting new opportunities, such as supporting our customers' investments in their homes and our recent entry into the gaming category. At the same time, we continue to focus on a range of profitability improvement initiatives. Finally, we're reinforcing our commitment to our people, planet and communities in a more integrated and deliberate way than ever before. We are humbled by the recognition we continue to receive for our efforts in these areas. That said, our commitment here is not about awards and recognition. It's about inviting all voices to Herman Miller, speaking up for what we know is right and creating opportunities for people everywhere. I recently joined more than 1,200 CEOs in signing the CEO Action for Diversity & Inclusion Pledge. In addition, we're taking action and creating change as part of a movement toward equity within our company, in our industry and in our community. Today, we are more unified than at any point in our company history, with a shared understanding of why we exist as a family of brands. Our restated purpose, design for the good of human kind, is a simple statement that holds so much meaning. It reflects the ideals we hold closest in all that we do: including our unique approach to solving whatever problem we face, our commitment to continuous improvement, the high-quality and sustainable materials we use in our products, the reach we can have with the solutions we bring to market, and the inherent idea that we exist as a business for reasons greater than our products and solution. I am so proud of our employees who once again this year harnessed the creativity, spirit and dedication our company was founded on. We entered this next era in our history, assured that Herman Miller Group will continue to create places that matter to our customers and contribute to a better world. In fact, I'm even more confident now in in its business, our strategy and the potential ahead of us. Thank you for your continued investment in Herman Miller and for coming on this exciting journey with us. And with that, I'll turn it back over to Mike Volkema.

Thank you, Andi. At this time, seeing no questions, I'd like to close our meeting as where we began. Thank you for joining us. We hope you found this presentation useful and interesting and look forward to connecting with you again in the future.

Thank you for attending today's 2020 Herman Miller Annual Shareholders Meeting. Enjoy your day.