tailieunhanh - OFFICE FURNITURE MFG. (US Based)

In particular, the management is under an obligation to ensure the audit committee is kept properly informed, and should take the initiative in supplying information rather than waiting to be asked. The board should make it clear to all directors and staff that they must cooperate with the audit committee and provide it with any information it requires. In addition, executive board members will have regard to their common law duty to provide all directors, including those on the audit committee, with all the information they need to discharge their responsibilities as directors of the company | April 13 2012 Investment Recommendation UNDERWEIGHT Henry Fund Research The University of Iowa UIIUMia SCHOOL OF MANAGEMENT OFFICE FURNITURE MFG. US Based Ryan Jennings ryan-d-jennings@ Apr 14r 20LL - Apr 13 2012 s p 500 Source Google Finance Key Industry Statistics Averages Pure-play Public Companies 4 P E Ratio LTM P E Ratio FWD Growth Next 5 Years Beta 3 Year Monthly 1-Yr Change Constituents B Herman Miller MLHR HNI HNI Steelcase SCS Knoll KNL Primary Public Co. s qty. 4 Other Private2 qty. 3 693 N A Total N A INVESTMENT THESIS V - Overvalued relative to S P 500 The office furniture manufacturing industry is OVERVALUED relative to the S P 500. This is based on the industries lower growth rate higher beta and higher price to earnings P E ratio as compared to the S P 500. The current industry P E is versus the S P 500 s P E ratio of . V - Strong competitive forces The office furniture manufacturing industry is mature with low company concentration which puts pressure on pricing and profitability. Over 3000 manufacturers exist in this industry 70 of which have less than 20 employees and serve local communities. The top four public companies represent only 25 of the total revenue. We do not expect significant change to this landscape over the next 5 years. V - Negative historical revenue growth Industry revenues declined by per year over the last 9 years. US plants have been shut down or consolidated at a rate of per year over the last 5 years. V - Pressure from low-cost imports Less expensive imports from China have taken market share per year from US office furniture consumption over the last 15 years. This trend is expected to gradually weaken until 2018 when import s market share stabilizes due to higher Chinese wages. V Small but positive future growth We expect positive .