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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (14709)	12/19/2001 7:35:45 PM
From: Sully-	Read Replies (1) \| Respond to of 99280

Office furniture makers suffer in soft US economy NEW YORK, Dec 19 (Reuters) - Office furniture makers Steelcase Inc. (NYSE:SCS - news) and Herman Miller Inc. (NasdaqNM:MLHR - news) both reported sharply lower quarterly results on Wednesday amid continued cutbacks in business spending as sales slumped in the soft U.S. economy. Office furniture makers are facing the worst slump in demand in 30 years, industry watchers said. ``The companies are working hard to position themselves through cost-cutting actions to lessen the financial impact over this period and move into renewed profitability as quickly as they can,'' said Carey Callaghan, an analyst at Goldman Sachs. The possibility of further consolidation and job cuts still looms, he said. Steelcase, the No. 1 U.S. office furniture maker, which has cut more than 5,000 hourly, temporary and salaried positions over the last 12 months, said it plans to consolidate its work force and facilities in Europe. The company, with a current work force of 20,000, said it will take significant one-time charges as a result of the moves and now expects to report a net loss in the fiscal 2002 fourth quarter. Grand Rapids, Michigan-based Steelcase also said it now sees its results for the second half of fiscal 2002 excluding one-time charges at the lower end of its previous guidance of 10 cents to 15 cents a share. Steelcase reported net income for its third quarter ended Nov. 23 of $4.9 million, or 3 cents per share, compared with $51.7 million, or 35 cents per share, a year earlier. Excluding an after-tax charge associated with work force reductions announced last quarter and a gain on the sale of a nonoperating asset, net income was $7.2 million, or 5 cents per share. Analysts' earnings estimates ranged from a loss of 1 cent to a profit of 7 cents per share, with a mean profit of 4 cents per share, according to research firm Thomson Financial/First Call. Herman Miller, based in Zeeland, Michigan, reported a loss after special charges for its second quarter ended Dec. 1 and said it sees a net loss before charges for its fiscal third quarter. ``The contract office furniture industry is experiencing its worst downturn in 30 years, with shipments forecasted to decline 17.8 percent for calendar 2001,'' Herman Miller Chairman and Chief Executive Officer Michael Volkema said in a statement. Herman Miller reported a net loss of $22.7 million, or 30 cents per share, after a profit of $42.3 million, or 54 cents per diluted share, a year earlier. Excluding restructuring charges, Herman Miller earned $1.7 million, or 2 cents per share, in the period ended Dec. 1. Analysts polled by Thomson Financial/First Call had expected second quarter earnings of 2 cents to 6 cents per share, with a consensus of 4 cents. Herman Miller forecast third quarter sales of $335 million to $355 million and a loss per share of 6 cents to 10 cents before special charges. The company has so far taken $48.4 million in restructuring charges, out of expected charges of $50 million to $65 million. ``Our expectation is that by the middle of next year things ought to turn around and get better'' for the industry, Goldman's Callaghan said. In the meantime, however, ``there could be further cost reductions,'' he said. But the turnaround in demand for office furniture may not be felt by until late 2002. According to a report released by the Business and Institutional Furniture Manufacturer's Association, office furniture shipments are expected to fall 17.8 percent to $10.9 billion in 2001 and to fall 8.8 percent to $9.95 billion in 2002. A ``modest recovery'' in industry shipments beginning in late 2002 should continue through 2003, the association said, assuming the U.S. recessionary period is ``mild and brief.'' Shares of Herman Miller closed up 41 cents, or 1.8 percent at $23.62, in Wednesday trading on the Nasdaq. The stock has fallen about 18 percent since the beginning of the year. Steelcase ended up 19 cents, or 1.4 percent, at $13.39 on the New York Stock Exchange. The stock has fallen about 16 percent since July 31, when it hit a 52-week high of $16. biz.yahoo.com