Herman Miller is engaged in the research, design, manufacture and distribution of office furniture systems, products and related services. Most of these systems and products are designed to be used together. The company’s primary products include furniture systems, seating, storage and material handling solutions, freestanding furniture and case goods. Herman Miller has manufacturing facilities in the U.S., China, Italy, and the U.K supported by a dealer network spanning across 40 countries.

The Michigan-based company posted a 7.0% year-over-year decrease in sales to $329.6 million as its North American segment’s sales dipped 8.9% to $269.5 million, while non-North American division’s revenues reduced by 9.5% to $46.9 million. However, the company witnessed some improvement in orders, which grew by 3.8% year-over-year to $290.0 million.

Herman Miller’s gross margin increased by 190 basis points (bps) to 31.8% primarily due to lower commodity costs coupled with management initiatives to control costs. Operating expenses, as a percentage of sales, increased 190 bps year-over-year to 26.0% mainly due to higher expenses related to the consolidation of healthcare furnisher Nemschoff Inc., which the company acquired in June last year. However, Herman Miller still swung to an operating income of $16.8 million, compared to an operating loss of $2.8 million in the year-ago period, primarily due to improved gross margin and lower expenses related to restructuring.

Herman Miller ended the quarter with cash and equivalents of $123.1 million, compared to $172.4 million in the year-ago quarter, mainly due to outflows related debt retirements and the Nemschoff acquisition. During the quarter, the company generated $8.4 million of cash from operating activities and deployed $3.9 million towards capital expenditure.

Meanwhile, the Zacks Consensus Estimate on Herman Miller’s earnings for the fiscal year ending May 2010 is currently pegged at 81 cents per share, which slipped by a penny in just the past week as 1 of 4 covering analysts lowered expectations. For fiscal 2011, the Zacks Consensus Estimate currently stands at $1.08 per share, which has remained steady over the past 2 months.