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Operating Segments
 12 Months Ended
May 28, 2022
Segment Reporting [Abstract]  
Operating Segments Operating Segments
Effective as of May 30, 2021, the beginning of fiscal year 2022, the Company implemented an organizational change that resulted in a change in the reportable segments. The Company has restated historical results to reflect this change. Below is a summary of the change in reportable segments.
•The activities related to the manufacture and sale of furniture products direct to consumers and to third-party retailers that previously resided within the International Contract segment moved to the Global Retail segment.
•The operations associated with the design, manufacture and sale of furniture products for work-related settings in Latin America moved from the International Contract segment to the North America Contract segment to form a new Americas Contract segment.
•Operations of the DWR Contract business, a division of DWR that sells design furnishings and accessories for use in work-related settings, moved into the Americas Contract segment.
The Company's reportable segments now consist of Americas Contract, International Contract, Global Retail, and Knoll. Intersegment sales are eliminated within each segment, with the exception of sales to and from the Knoll segment, which are presented as intersegment eliminations. Due to the change in reportable segments, the Company reviewed each of the new reporting units for impairment and concluded it to be more likely than not that their estimated fair values are greater than their respective carrying values.
The Americas Contract segment includes the operations associated with the design, manufacture and sale of furniture and textile products for work-related settings, including office, healthcare, and educational environments, throughout North America and South America. In addition to the Herman Miller brand and the DWR Contract business, this segment includes the operations associated with the design, manufacture and sale of high-craft furniture products and textiles including Geiger wood products, Maharam textiles, Herman Miller Healthcare, naughtone and Herman Miller Collection products.
The International Contract segment includes the operations associated with the design, manufacture and sale of furniture products, primarily for work-related settings in Europe, the Middle East and Africa ("EMEA") and Asia-Pacific.
The Global Retail segment includes operations associated with the sale of modern design furnishings and accessories to third party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, DWR studios and HAY stores.
The Knoll segment includes the global operations associated with the design, manufacture, and sale of furniture products within the Knoll constellation of brands.
The Company also reports a “Corporate” category consisting primarily of unallocated expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative and acquisition-related costs. Management regularly reviews corporate costs and believes disclosing such information provides more visibility and transparency regarding how the chief operating decision maker reviews results of the Company. The accounting policies of the operating segments are the same as those of the Company.
Subsequent to the end of fiscal 2022, the Company implemented an organizational change that will result in a change in our reportable segments. Beginning in the first quarter of fiscal 2023, the Company will recast the historical results in reflection of the change. Below is a summary of the change:
•The reportable segments will now consist of three segments: Americas Contract, International Contract & Specialty and Global Retail.
•The activities related to the manufacture and sale of furniture products direct to consumers and third-party retailers for the Knoll, Muuto and Fully brands that currently reside within the Knoll segment will move to the Global Retail segment.
•The activities related to the manufacture and sale of furniture products for work-related settings in the Americas for the Knoll, Muuto and Datesweiser brands that currently reside within the Knoll segment will move to the Americas Contract segment.
•The activities related to the manufacture and sale of furniture products for work-related settings in geographies other than the Americas for the Knoll and Muuto brands that currently reside within the Knoll segment will move to the International Contract & Specialty segment.
•The activities related to manufacture and sale of products for the Maharam brand will move from the Americas Contract segment to the International Contract & Specialty segment, along with the activities of the Holly Hunt, Spinneybeck, Knoll Textiles and Edelman brands, which currently reside within the Knoll segment.
The performance of the operating segments is evaluated by the Company's management using various financial measures. The following is a summary of certain key financial measures for the years indicated:
Year Ended
(In millions)May 28, 2022May 29, 2021May 30, 2020
Net sales:
Americas Contract$1,444.9  $1,301.3  $1,744.3 
International Contract483.2  399.5  345.9 
Global Retail856.8 764.3 396.4 
Knoll1,188.5 — — 
Intersegment Elimination(27.4)— — 
Total$3,946.0  $2,465.1  $2,486.6 
Depreciation and amortization:
Americas Contract$57.5  $56.4  $49.6 
International Contract13.2  11.2  10.4 
Global Retail16.7 19.6 18.8 
Knoll103.2  —  — 
Corporate— — 0.7 
Total$190.6  $87.2  $79.5 
Operating earnings (loss):
Americas Contract$44.5  $93.6  $162.6 
International Contract59.3  48.5  (0.4)
Global Retail96.2 143.0 (160.7)
Knoll(57.6)— — 
Corporate(102.6)(52.6)(39.4)
Total$39.8  $232.5  $(37.9)
Capital expenditures:
Americas Contract$43.3  $45.5  $55.2 
International Contract8.9  9.1  6.2 
Global Retail19.5 5.2 7.6 
Knoll23.0 — — 
Total$94.7  $59.8  $69.0 
Goodwill:
Americas Contract$191.7 $197.2 $191.5 
International Contract82.5 91.3 84.5 
Global Retail68.4 75.7 70.0 
Knoll883.6 — — 
Total$1,226.2 $364.2 $346.0 
Many of the Company's assets, including manufacturing, office and showroom facilities, support multiple segments. For that reason, it is impractical to disclose asset information on a segment basis.
The accounting policies of the operating segments are the same as those of the Company. Additionally, the Company employs a methodology for allocating corporate costs and assets with the underlying objective of this methodology being to allocate corporate costs according to the relative usage of the underlying resources and to allocate corporate assets according to the relative expected benefit. The majority of the allocations for corporate expenses are based on relative net sales. However, certain corporate costs, generally considered the result of isolated business decisions, are not subject to allocation and are evaluated separately from the rest of the regular ongoing business operations.
The Company's product offerings consist primarily of office furniture systems, seating, freestanding furniture, storage and casegoods. These product offerings are marketed, distributed and managed primarily as a group of similar products on an overall portfolio basis. The following is a summary of net sales estimated by product category for the years indicated:
Year Ended
(In millions)May 28, 2022May 29, 2021May 30, 2020
Net sales:
Workplace$1,484.4  $855.1  $1,135.8 
Performance Seating942.8  778.3  637.0 
Lifestyle1,314.0  696.2  546.6 
Other (1)
232.2 135.5 167.2 
Restructuring(27.4)—  — 
Total$3,946.0  $2,465.1  $2,486.6 
(1) “Other” primarily consists of uncategorized product sales and service sales.
In fiscal year 2022 certain products were reclassified primarily from the Performance Seating to the Lifestyle category, to align with a change in management’s internal reporting and management of the products. Prior year periods have been restated to reflect these changes, for comparability.
Sales by geographic area are based on the location of the customer. Long-lived assets consist of long-term assets of the Company, excluding financial instruments, deferred tax assets and long-term intangibles. The following is a summary of geographic information for the years indicated. Individual foreign country information is not provided as none of the individual foreign countries in which the Company operates are considered material for separate disclosure based on quantitative and qualitative considerations.
Year Ended
(In millions)May 28, 2022May 29, 2021May 30, 2020
Net sales:
United States$2,818.4  $1,728.9  $1,795.8 
International1,127.6  736.2  690.8 
Total$3,946.0  $2,465.1  $2,486.6 
Long-lived assets:
United States$531.2  $311.1  $306.7 
International144.9  70.6  59.6 
Total$676.1  $381.7  $366.3 
The Company approximates that no single dealer accounted for more than 2% of the Company's net sales in the fiscal year ended May 28, 2022. The Company estimates that the largest single end-user customer accounted for $114.4 million, $113 million and $122.9 million of the Company's net sales in fiscal 2022, 2021 and 2020, respectively. This represents approximately 3% of the Company's net sales in fiscal 2022 and 5% in 2021 and 2020. The Company's ten largest customers in the aggregate accounted for approximately 11% of net sales in fiscal 2022 and 17% of net sales in fiscal 2021 and 18% of net sales in fiscal 2020. Approximately 2% of the Company's employees are covered by collective bargaining agreements.