Knoll, Inc. (NYSE: KNL), a leading designer and manufacturer of
furnishings, textiles and fine leathers for the workplace and home,
today announced results for the third quarter ended September 30,
2019.
"We delivered another strong quarter of top and
bottom line growth led by further share gain in the workplace from
both organic investments and past acquisitions like Muuto that have
strengthened our position in the fastest growing ancillary areas of
the office," noted Knoll Chairman and CEO, Andrew Cogan. "The
combination of favorable mix from the growth of our high margin
Lifestyle businesses coupled with progress on our lean initiatives
and continuous improvement work in our Office segment resulted in
the best gross margin performance in over 5 years and the strongest
adjusted EBITDA margins since the fourth quarter of 2016."
Third Quarter Results
Dollars in Millions, Except Per Share Data |
|
Three Months Ended September 30, |
|
|
|
|
2019 |
|
2018 |
|
Change |
Net Sales |
|
$ |
356.5 |
|
$ |
327.7 |
|
8.8% |
Gross Profit |
|
140.4 |
|
122.8 |
|
14.4% |
Gross Profit % |
|
39.4% |
|
37.5% |
|
190 bps |
Operating Profit |
|
36.7 |
|
32.9 |
|
11.4% |
Operating Profit % |
|
10.3% |
|
10.0% |
|
30 bps |
Adjusted Operating Profit (1) |
|
39.7 |
|
36.9 |
|
7.7% |
Adjusted Operating Profit % (1) |
|
11.1% |
|
11.3% |
|
(20) bps |
Net Earnings |
|
17.5 |
|
20.3 |
|
(13.9)% |
Net Earnings % |
|
4.9% |
|
6.2% |
|
(120) bps |
Adjusted Net Earnings (1) |
|
27.4 |
|
23.7 |
|
15.7% |
Adjusted EBITDA (1) |
|
52.4 |
|
47.2 |
|
11.1% |
Adjusted EBITDA % (1) |
|
14.7% |
|
14.4% |
|
30 bps |
Diluted EPS |
|
$ |
0.35 |
|
$ |
0.41 |
|
(14.6)% |
Adjusted Diluted EPS (1) |
|
$ |
0.55 |
|
$ |
0.48 |
|
14.6% |
(1) See Reconciliation of Non-GAAP Financial Measures below.
Net sales were $356.5 million for the third
quarter of 2019, an increase of 8.8%, from the third quarter of
2018. Net sales for the Office segment were $219.1 million during
the third quarter of 2019, an increase of $18.5 million, or 9.2%,
compared to the third quarter of 2018. The increase was driven
primarily by investments in expanding our height adjustable table
offerings and improved office system products, continued growth in
conference room solutions and the addition of Fully, a recently
completed acquisition. Net sales for the Lifestyle segment were
$137.4 million during the third quarter of 2019, an increase of
$10.3 million, or 8.2%, compared with the third quarter of 2018.
Sales growth was led by strong growth at Muuto and increased
crossover sales in commercial workplace settings.
Gross margin for the third quarter of 2019 was
39.4%, an increase of 190 basis points compared to 37.5% in the
prior year. The increase in gross margin was primarily the result
of increased volume, continuous improvement initiatives and price
realization, partially offset by year-over-year material inflation
and tariffs.
Operating expenses were $103.7 million for the
third quarter of 2019, or 29.1% of net sales, compared to $89.9
million, or 27.4% of net sales, for the third quarter of 2018.
Operating expenses in the third quarter of 2019 included
acquisition related amortization of acquired intangible assets of
$2.1 million and customary acquisition related expenses of $0.3
million. Operating expenses in the third quarter of 2019 also
included debt refinancing fees of $0.5 million and restructuring
charges of $0.1 million. Excluding these items, adjusted operating
expenses were $100.7 million for the third quarter of 2019, or
28.3% of net sales, compared to $85.9 million, or 26.2% of net
sales in the third quarter of 2018. The increase in adjusted
operating expenses was related primarily to higher commissions and
selling expenses from increased volume, and strategic investments
in information technology infrastructure, showrooms, and marketing
and product development initiatives.
During the third quarter of 2019, interest
expense was $5.5 million, an increase of $0.5 million compared to
the third quarter of 2018. In spite of the $35.0 million
incremental debt to fund the Fully acquisition, the Company reduced
leverage from 2.42x in the second quarter of 2019 to 2.33x in the
third quarter of 2019. In the third quarter, the Company
completed an amendment and extension of its credit facility. The
maturity date was extended to August 2024, and reduced the pricing
of borrowings under its term loan and revolving credit facility, as
well as unused capacity. All other terms remained consistent.
In connection with the amendment and extension, the Company
recognized a $0.4 million loss on extinguishment of debt.
Other expense was $7.3 million during third
quarter of 2019 compared to other expense of $0.4 million in the
prior year. During the third quarter of 2019, the Company initiated
payouts for the termination of the Company's pension plan for
bargaining unit employees. The termination resulted in a settlement
charge of $8.4 million as a result of the purchase of annuities to
liquidate the plan. In addition, the Company incurred a
settlement charge of $1.4 million in connection with cash payments
of lump sum elections. The Company intends to finalize the
termination of the bargaining unit plan and expects to realize
additional pension settlement charges during the fourth quarter of
2019. Pension settlement charges of $0.6 million in the third
quarter of 2018 resulted from cash payments of lump sum elections.
Excluding pension settlement charges, other income increased $2.3
million compared to the third quarter of 2018, due primarily to
foreign exchange gains driven by the appreciation of the US dollar
against the Danish Krone.
Net earnings for the third quarter of 2019 were
$17.5 million, or $0.35 per diluted share, compared to $20.3
million, or $0.41 per diluted share, for the third quarter of 2018.
Excluding the impact of acquisition related expenses, debt
refinancing fees, restructuring charges and pension settlement
charges, adjusted net earnings for the third quarter of 2019 were
$27.4 million, or $0.55 per adjusted diluted share, compared to
$23.7 million, or $0.48 per adjusted diluted share for the
third quarter of 2018.
The effective tax rate was 25.4% for the third
quarter of 2019, compared to 26.1% for the third quarter of 2018.
The mix of pretax income and the varying effective tax rates in the
countries and states in which we operate directly affects our
consolidated effective tax rate.
Capital expenditures for the third quarter of
2019 totaled $10.5 million compared to $5.3 million in the prior
year. The Company paid a quarterly dividend of $8.4 million, or
$0.17 per share in the third quarter of 2019 compared to a
quarterly dividend of $7.3 million, or $0.15 per share in the third
quarter of 2018.
Business Segment Results
The Company has two reportable segments: Office
and Lifestyle. The Office reportable segment is comprised of the
operations of the Office operating segment. The Lifestyle
reportable segment is an aggregation of the Lifestyle, Europe, and
Muuto operating segments. All unallocated expenses are included
within Corporate.
The Office segment includes a complete range of
workplace products that address diverse workplace planning
paradigms in North America and Europe. These products include:
systems furniture, seating, storage, tables, desks and accessories
as well as the international sales of our Office products. The
Office segment includes DatesWesier and Fully. DatesWeiser is known
for its sophisticated meeting and conference tables and credenzas,
sets a standard of design, quality and technology integration.
Fully is an ecommerce furniture brand selling height-adjustable
desks, ergonomic chairs and accessories principally for individual
home offices and small businesses.
The Lifestyle segment includes KnollStudio®,
HOLLY HUNT®, Muuto, KnollTextiles®, Spinneybeck® (including
Filzfelt®), and Edelman® Leather. KnollStudio products, which are
distributed in North America and Europe, include iconic seating,
lounge furniture, side, cafe and dining chairs as well as
conference, training and dining and occasional tables. HOLLY HUNT®
is known for high quality residential furniture, lighting, rugs,
textiles and leathers. The KnollTextiles®, Spinneybeck® (including
Filzfelt®), and Edelman® Leather businesses provide a wide range of
customers with high-quality fabrics, felt, leather and related
architectural products. Muuto rounds out the Lifestyle segment with
its ancillary products and affordable luxury furnishings to make
the Lifestyle segment an all-encompassing “resimercial”,
high-performance workplace, from uber-luxury living spaces to
affordable luxury residential living.
During the first quarter of 2019, the Company
changed the structure of its internal organization which caused the
composition of its reportable segments to change. As a result,
DatesWeiser is now a component of the Office operating segment as
opposed to the Lifestyle operating segment.
The tables below present the Company’s segment
information with Corporate costs excluded from operating segment
results. Prior year amounts have been recast to conform to the
current presentation.
|
|
Three Months Ended September 30, |
Net sales (in
millions) |
|
2019 |
|
|
2018 |
|
Office |
|
$ |
219.1 |
|
|
$ |
200.6 |
|
Lifestyle |
|
137.4 |
|
|
127.1 |
|
Total net sales |
|
$ |
356.5 |
|
|
$ |
327.7 |
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
Operating profit (in
millions) |
|
2019 |
|
|
2018 |
|
Office |
|
$ |
18.3 |
|
|
$ |
15.5 |
|
Lifestyle |
|
25.0 |
|
|
22.7 |
|
Corporate |
|
(6.6 |
) |
|
(5.3 |
) |
Total operating profit |
|
$ |
36.7 |
|
|
$ |
32.9 |
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
Adjusted EBITDA (in
millions)(1) |
|
2019 |
|
|
2018 |
|
Office |
|
$ |
26.3 |
|
|
$ |
23.3 |
|
Lifestyle |
|
30.0 |
|
|
27.7 |
|
Corporate |
|
(3.9 |
) |
|
(3.8 |
) |
Total adjusted EBITDA |
|
$ |
52.4 |
|
|
$ |
47.2 |
|
(1) See
Reconciliation of Non-GAAP Financial Measures below. |
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures
This press release contains certain non-GAAP
financial measures. A "non-GAAP financial measure" is a numerical
measure of a company's financial performance that excludes or
includes amounts so as to be different than the most directly
comparable measure calculated and presented in accordance with U.S.
generally accepted accounting principles ("GAAP") in the statements
of income, balance sheets, or statements of cash flow of the
company. Pursuant to applicable reporting requirements, the company
has provided reconciliations below of non-GAAP financial measures
to the most directly comparable GAAP measure.
The non-GAAP financial measures presented within
the Company's earnings release are Adjusted Operating Expense,
Adjusted Operating Profit, Adjusted Operating Profit Margin,
Adjusted Net Earnings, Adjusted EBITDA, Adjusted EBITDA
Margin, and Adjusted Diluted Earnings Per Share. These non-GAAP
measures are not indicators of our financial performance under GAAP
and should not be considered as an alternative to the applicable
GAAP measure. These non-GAAP measures have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of our results as reported under GAAP.
In addition, in evaluating these non-GAAP measures, you should be
aware that in the future we may incur expenses similar to the
adjustments in this press release. Our presentation of these
non-GAAP measures should not be construed as an inference that our
future results will be unaffected by unusual or infrequent items.
We compensate for these limitations by providing equal prominence
to our GAAP results and using non-GAAP measures only as
supplemental presentations.
The non-GAAP measures presented are utilized by
management to evaluate the Company's business performance and
profitability by excluding certain items that may not be indicative
of our recurring core business operating results. The Company
believes that these measures provide additional clarity for
investors by excluding specific expenses in an effort to show
comparable business operating results for the periods
presented.
The following table reconciles Knoll, Inc.
Operating Expenses to Adjusted Operating Expenses for the periods
indicated.
|
|
Three Months Ended September 30, |
|
|
2019 |
|
2018 |
|
|
($ in millions) |
|
|
|
|
|
Operating expenses |
|
$ |
103.7 |
|
$ |
89.9 |
Less: |
|
|
|
|
Acquisition related amortization |
|
2.1 |
|
2.1 |
Acquisition related expenses |
|
0.3 |
|
0.7 |
Restructuring charges |
|
0.1 |
|
1.2 |
Debt refinancing fees |
|
0.5 |
|
— |
Adjusted operating
expenses |
|
$ |
100.7 |
|
$ |
85.9 |
The following table reconciles Knoll, Inc.
Operating Profit and Operating Profit Margin to Adjusted Operating
Profit and Adjusted Operating Profit Margin for the periods
indicated.
|
|
Three Months Ended September 30, |
|
|
2019 |
|
2018 |
|
|
($ in millions) |
|
|
|
|
|
Operating profit |
|
$ |
36.7 |
|
$ |
32.9 |
Add back: |
|
|
|
|
Acquisition related amortization |
|
2.1 |
|
2.1 |
Acquisition related expenses |
|
0.3 |
|
0.7 |
Restructuring charges |
|
0.1 |
|
1.2 |
Debt refinancing fees |
|
0.5 |
|
— |
Adjusted operating profit |
|
$ |
39.7 |
|
$ |
36.9 |
Net Sales |
|
$ |
356.5 |
|
$ |
327.7 |
Operating Profit % |
|
10.3% |
|
10.0% |
Adjusted Operating Profit
% |
|
11.1% |
|
11.3% |
The following tables reconcile Operating Profit and Operating
Profit Margin to Adjusted EBITDA and Adjusted EBITDA Margin by
business segment for the periods indicated.
|
|
Three Months
Ended September 30, 2019 |
|
|
Office |
|
Lifestyle |
|
Corporate |
|
Knoll, Inc. |
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
Operating profit (loss) |
|
$ |
18.3 |
|
$ |
25.0 |
|
$ |
(6.6 |
) |
|
$ |
36.7 |
Add back: |
|
|
|
|
|
|
|
|
Acquisition related expenses(1) |
|
— |
|
— |
|
0.3 |
|
|
0.3 |
Restructuring charges |
|
0.1 |
|
— |
|
— |
|
|
0.1 |
Debt refinancing fees |
|
— |
|
— |
|
0.5 |
|
|
0.5 |
Depreciation and amortization |
|
6.3 |
|
3.4 |
|
0.1 |
|
|
9.8 |
Stock compensation |
|
0.6 |
|
1.1 |
|
1.4 |
|
|
3.1 |
Other income (expense) items |
|
1.0 |
|
0.5 |
|
0.4 |
|
|
1.9 |
Adjusted EBITDA (loss) |
|
$ |
26.3 |
|
$ |
30.0 |
|
$ |
(3.9 |
) |
|
$ |
52.4 |
Net sales |
|
$ |
219.1 |
|
$ |
137.4 |
|
— |
|
|
$ |
356.5 |
Operating profit % |
|
8.4% |
|
18.1% |
|
N/A |
|
|
10.3% |
Adjusted EBITDA % |
|
12.0% |
|
21.8% |
|
N/A |
|
|
14.7% |
(1) Acquisition related expenses included customary acquisition
related expenses in relation to the acquisition of Fully for the
three months ended September 30, 2019.
|
|
Three Months
Ended September 30, 2018 |
|
|
Office |
|
Lifestyle |
|
Corporate |
|
Knoll, Inc. |
|
|
($ in millions) |
|
|
|
|
|
|
|
|
|
Operating profit (loss) |
|
$ |
15.5 |
|
$ |
22.7 |
|
$ |
(5.3 |
) |
|
$ |
32.9 |
Add back: |
|
|
|
|
|
|
|
|
Acquisition related expenses(1) |
|
— |
|
0.9 |
|
(0.2 |
) |
|
0.7 |
Restructuring charges |
|
1.2 |
|
— |
|
— |
|
|
1.2 |
Depreciation and amortization |
|
5.0 |
|
3.4 |
|
0.1 |
|
|
8.5 |
Stock compensation |
|
0.5 |
|
0.6 |
|
1.2 |
|
|
2.3 |
Other income (expense) items |
|
1.1 |
|
0.1 |
|
0.4 |
|
|
1.6 |
Adjusted EBITDA (loss) |
|
$ |
23.3 |
|
$ |
27.7 |
|
$ |
(3.8 |
) |
|
$ |
47.2 |
Net sales |
|
$ |
200.6 |
|
$ |
127.1 |
|
— |
|
|
$ |
327.7 |
Operating profit % |
|
7.7% |
|
17.9% |
|
N/A |
|
|
10.0% |
Adjusted EBITDA % |
|
11.6% |
|
21.9% |
|
N/A |
|
|
14.4% |
(1) Acquisition related expenses included an acquisition related
inventory adjustment, retention agreements for key employees, and
customary acquisition related expenses for the three months ended
September 30, 2018.
The following table reconciles Knoll, Inc. Net Earnings and Net
Earnings Margin to Adjusted EBITDA and Adjusted EBITDA Margin for
the periods indicated.
|
|
Three Months
Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
($ in millions) |
|
|
|
|
|
Net earnings |
|
$ |
17.5 |
|
|
$ |
20.3 |
Add back: |
|
|
|
|
Income tax expense |
|
6.0 |
|
|
7.2 |
Interest expense(1) |
|
5.9 |
|
|
5.0 |
Depreciation and amortization |
|
9.8 |
|
|
8.5 |
Stock compensation |
|
3.1 |
|
|
2.3 |
Other non-cash items |
|
(0.6 |
) |
|
1.4 |
Acquisition related expenses |
|
0.3 |
|
|
0.7 |
Restructuring charges |
|
0.1 |
|
|
1.2 |
Debt refinancing fees |
|
0.5 |
|
|
— |
Pension settlement charge |
|
9.8 |
|
|
0.6 |
Adjusted EBITDA |
|
$ |
52.4 |
|
|
$ |
47.2 |
Net sales |
|
$ |
356.5 |
|
|
$ |
327.7 |
Net earnings % |
|
5.0% |
|
|
6.2% |
Adjusted EBITDA % |
|
14.7% |
|
|
14.4% |
(1)Interest
expense for the three months ended September 30, 2019 includes $0.4
million loss on extinguishment of debt. |
The following table reconciles Knoll, Inc. Net
Earnings to Adjusted Net Earnings for the periods indicated.
|
|
Three Months
Ended September 30, |
|
|
2019 |
|
2018 |
|
|
($ in millions) |
Knoll
Inc. |
|
|
|
|
Net earnings |
|
$ |
17.5 |
|
$ |
20.3 |
Add back: |
|
|
|
|
Acquisition related amortization |
|
2.1 |
|
2.1 |
Acquisition related expenses |
|
0.3 |
|
0.7 |
Restructuring charges |
|
0.1 |
|
1.2 |
Debt refinancing fees |
|
0.5 |
|
— |
Loss on extinguishment of debt |
|
0.4 |
|
— |
Pension settlement charge |
|
9.8 |
|
0.6 |
Less: |
|
|
|
|
Tax effect of non-GAAP adjustments(1) |
|
3.3 |
|
1.2 |
Adjusted net earnings |
|
$ |
27.4 |
|
$ |
23.7 |
(1) Tax effect of non-GAAP adjustments was calculated using the
Knoll, Inc. consolidated effective tax rate for the period.
The following table reconciles Knoll, Inc.
Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share
for the periods indicated.
|
|
Three Months Ended September 30, |
|
|
2019 |
|
2018 |
Diluted earnings per share |
|
$ |
0.35 |
|
$ |
0.41 |
Add back: |
|
|
|
|
Acquisition related amortization |
|
0.04 |
|
0.04 |
Acquisition related expenses |
|
0.01 |
|
0.02 |
Restructuring charges |
|
— |
|
0.02 |
Debt refinancing fees |
|
0.01 |
|
— |
Loss on extinguishment of debt |
|
0.01 |
|
— |
Pension settlement charge |
|
0.20 |
|
0.01 |
Less: |
|
|
|
|
Tax effect of non-GAAP adjustments(1) |
|
0.07 |
|
0.02 |
Adjusted diluted earnings per
share |
|
$ |
0.55 |
|
$ |
0.48 |
(1) Tax effect of non-GAAP adjustments was calculated using the
Knoll, Inc. consolidated effective tax rate for the period.
The following table illustrates the computation of our bank
leverage calculation in accordance with our Third Amended and
Restated Credit Agreement dated January 23, 2018, and amended on
August 26, 2019.
|
|
September 30, 2019 |
|
|
($ in millions) |
|
|
|
Debt Levels(1) |
|
$ |
458.9 |
|
|
|
LTM Net Earnings(2) |
|
$ |
81.9 |
|
|
|
LTM Adjustments |
|
|
Interest |
|
21.8 |
Taxes |
|
27.1 |
Depreciation and Amortization |
|
37.4 |
Non-cash Items and Other(3) |
|
28.4 |
LTM Adjusted EBITDA(4) |
|
$ |
196.6 |
Bank Leverage
Calculation(5) |
|
2.33 |
(1)Outstanding debt levels include outstanding letters of credit
and guarantee obligations. Per the terms of the credit facility
filed with the Securities and Exchange Commission on January 23,
2018, and amended on August 26, 2019, cash up to $15.0 million
reduces the outstanding debt.(2) LTM Net Earnings includes Fully
prior to acquisition, per terms of our credit facility.(3) Non-cash
Items and Other include, but are not limited to, acquisition
related expenses, restructuring charges, pension settlement
charges, stock-based compensation expenses, and unrealized gains
and losses on foreign exchange.(4) LTM Adjusted EBITDA includes
Fully prior to acquisition, per terms of our credit facility.(5)
Debt divided by LTM Adjusted EBITDA, as calculated in accordance
with our credit facility.
Cautionary Statement Regarding Forward-Looking
Information
This press release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements regarding Knoll, Inc.'s
expected future financial position, results of operations, revenue
and profit levels, cash flows, business strategy, budgets,
projected costs, capital expenditures, products, competitive
positions, growth opportunities, plans and objectives of management
for future operations, as well as statements that include words
such as “anticipate,” “if,” “believe,” “plan,” “goals,” “estimate,”
“expect,” “intend,” “may,” “could,” “should,” “will,” and other
similar expressions are forward-looking statements. This includes,
without limitation, our statements and expectations regarding our
publicly announced plans for increased capital and investment
spending to achieve our long-term revenue and profitability growth
goals, our integration of acquired businesses, and our expectations
with respect to leverage. Such forward-looking statements are
inherently uncertain, and readers must recognize that actual
results may differ materially from the expectations of Knoll
management. Knoll does not undertake a duty to update such
forward-looking statements. Factors that may cause actual results
to differ materially from those in the forward-looking statements
include corporate spending and service-sector employment, price
competition, acceptance of Knoll's new products, the pricing and
availability of raw materials and components, foreign currency
exchange, transportation costs, demand for high quality, well
designed furniture solutions, changes in the competitive
marketplace, changes in the trends in the market for furniture or
coverings, the financial strength and stability of our suppliers,
customers and dealers, access to capital, our success in designing
and implementing our new enterprise resource planning
system, our ability to successfully integrate acquired
businesses, our supply chain optimization initiatives and
other risks identified in Knoll's annual report on Form 10-K, and
other filings with the Securities and Exchange Commission. Many of
these factors are outside of Knoll's control.
Contacts
Investors:
Charles Rayfield Senior Vice President and Chief Financial
OfficerTel 215 679-1703crayfield@knoll.com
Media:
David E. BrightSenior Vice President,
CommunicationsTel 212 343-4135dbright@knoll.com
Conference Call Information
Knoll will host a conference call on Thursday,
October 24, 2019 at 10:00 a.m. ET to discuss its financial
results.
The call will include slides; participants are
encouraged to listen to and view the presentation via webcast at
http://www.knoll.com; go to “Discover Knoll” and click on “Investor
Relations.”
The conference call may also be accessed by
dialing:
North America |
(844) 778-4138 |
International |
(661) 378-9550 |
Conference ID |
846 1775 |
A replay of the webcast can be viewed by
visiting the Investor Relations section of the Knoll corporate
website. In addition, an audio replay of the conference call will
be available through October 31, 2019 by dialing (855) 859-2056.
International replay: (404) 537-3406 (Conference ID: 846 1775).
The Company also announced that it has partnered with Say, the
fintech startup reimagining shareholder communications. Say
directly verifies all shareholders and allows them to submit
questions to the Knoll management team, who will answer a selection
live on the call. With Say, Knoll expects to make its investor
Q&As more transparent and engaging.
Knoll shareholders can link their brokerages through Say’s
platform via say.com/qa/knoll, and securely verify their shares.
Click “sign up” and follow the guided steps to verify your
ownership, submit a question, and upvote other questions.
Shareholders can email hello@say.com for any support inquiries.
About Knoll
Knoll, Inc. is a constellation of design-driven
brands and people, working together with our clients to create
inspired modern interiors. Our internationally recognized portfolio
includes furniture, textiles, leathers, lighting, accessories, and
architectural and acoustical elements. Our brands — Knoll Office,
KnollStudio, KnollTextiles, KnollExtra, Spinneybeck | FilzFelt,
Edelman Leather, HOLLY HUNT, DatesWeiser, Muuto, and Fully —
reflect our commitment to modern design that meets the diverse
requirements of high performance workplaces and luxury interiors. A
recipient of the National Design Award for Corporate and
Institutional Achievement from the Smithsonian`s Cooper-Hewitt,
National Design Museum, Knoll, Inc. is aligned with the U.S. Green
Building Council and the Canadian Green Building Council and can
help organizations achieve the Leadership in Energy and
Environmental Design (LEED) workplace certification. Our products
can also help clients comply with the International Living Future
Institute to achieve Living Building Challenge Certification, and
with the International WELL Building Institute to attain WELL
Building Certification. Knoll, Inc. is the founding sponsor of the
World Monuments Fund Modernism at Risk program.
KNOLL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in millions, except per share
data)
(Unaudited)
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
356.5 |
|
|
$ |
327.7 |
|
|
$ |
1,056.6 |
|
|
$ |
947.6 |
|
Cost of sales |
|
216.1 |
|
|
204.9 |
|
|
651.7 |
|
|
597.8 |
|
Gross profit |
|
140.4 |
|
|
122.8 |
|
|
404.9 |
|
|
349.8 |
|
Selling, general, and
administrative expenses |
|
103.6 |
|
|
88.7 |
|
|
304.9 |
|
|
267.0 |
|
Restructuring charges |
|
0.1 |
|
|
1.2 |
|
|
0.2 |
|
|
2.6 |
|
Operating profit |
|
36.7 |
|
|
32.9 |
|
|
99.8 |
|
|
80.2 |
|
Loss on extinguishment of
debt |
|
0.4 |
|
|
— |
|
|
0.4 |
|
|
1.4 |
|
Pension settlement charge |
|
9.8 |
|
|
0.6 |
|
|
10.4 |
|
|
5.2 |
|
Interest expense |
|
5.5 |
|
|
5.0 |
|
|
16.2 |
|
|
14.4 |
|
Other income, net |
|
(2.5 |
) |
|
(0.2 |
) |
|
(4.1 |
) |
|
(7.0 |
) |
Income before income tax
expense |
|
23.5 |
|
|
27.5 |
|
|
76.9 |
|
|
66.2 |
|
Income tax expense |
|
6.0 |
|
|
7.2 |
|
|
19.8 |
|
|
17.5 |
|
Net earnings |
|
17.5 |
|
|
20.3 |
|
|
57.1 |
|
|
48.7 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.36 |
|
|
$ |
0.42 |
|
|
$ |
1.17 |
|
|
$ |
1.00 |
|
Diluted |
|
$ |
0.35 |
|
|
$ |
0.41 |
|
|
$ |
1.16 |
|
|
$ |
0.99 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
48,873,186 |
|
|
48,694,438 |
|
|
48,834,737 |
|
|
48,641,595 |
|
Diluted |
|
49,573,706 |
|
|
49,231,376 |
|
|
49,359,812 |
|
|
49,189,592 |
|
KNOLL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in millions)
|
|
September 30, 2019 |
|
December 31, 2018 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
8.3 |
|
$ |
1.6 |
Customer receivables, net |
|
111.2 |
|
120.2 |
Inventories, net |
|
192.6 |
|
170.5 |
Prepaid and other current
assets |
|
29.8 |
|
39.3 |
Total current assets |
|
341.9 |
|
331.6 |
Property, plant, and equipment,
net |
|
223.5 |
|
215.0 |
Goodwill and intangible assets,
net |
|
685.4 |
|
674.7 |
Right-of-use lease asset |
|
96.8 |
|
— |
Other non-current assets |
|
6.8 |
|
5.6 |
Total assets |
|
$ |
1,354.4 |
|
$ |
1,226.9 |
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Current maturities of long-term
debt |
|
$ |
17.0 |
|
$ |
17.2 |
Accounts payable |
|
122.1 |
|
126.7 |
Current portion of lease
liability |
|
23.2 |
|
— |
Other current liabilities |
|
132.5 |
|
128.9 |
Total current liabilities |
|
294.8 |
|
272.8 |
Long-term debt |
|
440.8 |
|
443.9 |
Lease liability |
|
87.3 |
|
— |
Other non-current
liabilities |
|
125.4 |
|
123.7 |
Total liabilities |
|
948.3 |
|
840.4 |
Total shareholders' equity |
|
406.1 |
|
386.5 |
Total liabilities and
shareholders' equity |
|
$ |
1,354.4 |
|
$ |
1,226.9 |
KNOLL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Dollars in millions)
(Unaudited)
|
|
Nine Months
Ended September 30, |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
Net earnings |
|
$ |
57.1 |
|
|
$ |
48.7 |
|
Cash provided by operating
activities |
|
98.1 |
|
|
33.7 |
|
Cash used in investing
activities |
|
(63.3 |
) |
|
(329.3 |
) |
Cash (used in) provided by
financing activities |
|
(28.0 |
) |
|
259.9 |
|
Effect of exchange rate changes
on cash and cash equivalents |
|
(0.1 |
) |
|
10.8 |
|
Increase (decrease) in cash and
cash equivalents |
|
6.7 |
|
|
(24.9 |
) |
Cash and cash equivalents at
beginning of period |
|
1.6 |
|
|
2.2 |
|
Cash and cash equivalents at end
of period |
|
$ |
8.3 |
|
|
$ |
7.3 |
|
Knoll (NYSE:KNL)
Historical Stock Chart
From May 2024 to Jun 2024
Knoll (NYSE:KNL)
Historical Stock Chart
From Jun 2023 to Jun 2024