HOLLAND — Herman Miller Inc. will incur $1 million to $1.5 million in pre-tax charges this quarter that are related to the closing of a leased production plant and relocating the work to another facility in Zeeland.
Moving the work performed in space leased in the Formcoat facility on Zeeland’s north side to the company’s main production facility east of downtown will eventually result in total pre-tax charges totaling $3 million to $4 million, Herman Miller said Thursday in an SEC filing.
The move will not result in any job losses and is part of the company’s ongoing lean-manufacturing program to improve operations and generate costs savings, spokesman Mark Schurman said. The current business environment and continued office furniture industry downturn have heightened the push to consolidate facilities and reduce costs, he said.
Relocating the Formcoat production will enable Herman Miller to eliminate 100,000 square feet of manufacturing space while maintaining overall production capacity.
“Where we have a chance to consolidate and reduce the overhead cost and not impact capacity, that is good fiscal management at anytime,” Schurman said.
Herman Miller will complete the move and consolidation of the Formcoat operations, which coats work surfaces for office systems, by November.
For the fourth quarter that ends May 30, Herman Miller expects sales in the range of $305 million to $325 million, with earnings of 1 cent to 6 cents per share before charges.