Hooray for Herman Miller

Disclosure: I own a position in Herman Miller (MLHR)

Herman Miller reported full year results yesterday that were pretty impressive. Given the weakness in the economy, here are some of the highlights:

• Revenues were up 5% from last year, crossing the $2 billion mark.
• Record earnings at $2.56/share, a 29% increase over last year
• Cash flow from operations increased 55%, resulting in an ending cash balance of over $155 million

These results were partly the result of:

• Gross Margins improved by 100 basis points to 34.7%
• Cost management program to reduce operating expenses by 80 basis points to 22.5%

The companies growth plans internationally continue to show strength:

• International Sales up 18% over last year, representing almost a quarter of the companies total revenue stream.

Herman Miller does face some major challenges going forward, but I picked up this stock on its strong product offering and attractive valuation (P/E of 9.9 and Return on Assets of 21%). Costs of doing business increased due to steel and fuel costs. These rising costs only affected them in the last quarter. I would consider this round 1 of a prolonged fight on input costs, with the company escaping with only a minor blow to the gut. I'll be digging into a more detailed analysis of the company's long term prospects, but in the mean time here are some things to chew on:

BNet has a number of good articles about office design:
Three new designs for optimizing collaboration
Office makeovers that boost the bottom line

While the company's PR engine is pushing the next CNBC:The Business of Innovation show that is coming up Monday where they will be featured.