ZEELAND, MI - Herman Miller Inc. reported a 10.6% improvement in net earnings for its third quarter ended March 2 compared to the third quarter of 2012, despite softened demand for federal government procurement.

The office and healthcare manufacturer's net sales in the quarter of $423.5 million, an increase of 5.9% from the same quarter last fiscal year. New orders of $382.2 million were 6.0% higher than Q3 2012.

Brian Walker, CEO of Herman Miller, said, “Our sales growth this quarter, combined with strong gross margins, helped drive a solid improvement in adjusted earnings from a year ago. While we are pleased with the overall results, net sales and orders fell short of our expectations. The shortfall was primarily driven by the difficult environment in key economies outside the U.S. and declines in business with the U.S. federal government, including within the healthcare sector.

"We did, however, offset these negative factors with year-over-year growth in the balance of our North American business. This improvement was complemented by double-digit sales growth within our Specialty and Consumer segment and growth in emerging markets driven by the acquisition of POSH. We are encouraged by the relative strength in the commercial sector of our North American business and in the overall progress we’re making in emerging markets and our Specialty and Consumer segment.”

Herman Miller's Q3 operating expenses were $117.0 compared to $108.9 million recorded in the same period last year. The company’s results in the third quarter include $4.0 million in expenses associated with the ongoing termination of its “legacy” defined benefit pension plans which are frozen and scheduled for future termination. Herman Miller plans to install a new defined contribution retirement program for its employees.