MillerKnoll, Inc. Reports First Quarter Fiscal 2025 Results
MillerKnoll (NASDAQ: MLKN) reported its Q1 fiscal 2025 results, ending August 31, 2024. Orders increased by 2.4% year-over-year (YoY) and 3.5% organically. The ending backlog rose by 9.2% YoY to $758 million. Net sales fell 6.1% YoY to $861.5 million. The gross margin remained flat at 39%. Operating expenses increased by 1% to $321.1 million. Adjusted operating expenses decreased by 5.2% to $286.9 million. The effective tax rate surged to 66.2%. Adjusted EPS was $0.36, down from $0.37 YoY. The company reported a diluted loss per share of $0.02, compared to an EPS of $0.22 last year. Cash flow from operations was $21.1 million, and share repurchases totaled $43.7 million. The company maintained its full-year adjusted EPS guidance of $2.20 and projected Q2 net sales between $950 million and $990 million, with adjusted EPS between $0.51 and $0.57.
MillerKnoll (NASDAQ: MLKN) ha riportato i risultati per il primo trimestre dell'anno fiscale 2025, conclusosi il 31 agosto 2024. Gli ordini sono aumentati del 2,4% rispetto all'anno precedente (YoY) e del 3,5% organicamente. Il portafoglio ordini finale è cresciuto del 9,2% YoY, raggiungendo i 758 milioni di dollari. Le vendite nette sono diminuite del 6,1% YoY, toccando i 861,5 milioni di dollari. Il margine lordo è rimasto stabile al 39%. Le spese operative sono aumentate dell'1%, arrivando a 321,1 milioni di dollari. Le spese operative rettificate sono diminuite del 5,2%, attestandosi a 286,9 milioni di dollari. Il tasso di imposizione effettivo è balzato al 66,2%. L'EPS rettificato è stato di 0,36 dollari, in calo rispetto a 0,37 dollari dell'anno precedente. L'azienda ha riportato una perdita diluita per azione di 0,02 dollari, rispetto a un EPS di 0,22 dollari dello scorso anno. Il flusso di cassa dalle operazioni è stato di 21,1 milioni di dollari e il riacquisto di azioni ha totalizzato 43,7 milioni di dollari. L'azienda ha mantenuto la sua guida per l'EPS rettificato dell'intero anno a 2,20 dollari e ha previsto vendite nette per il secondo trimestre comprese tra 950 milioni e 990 milioni di dollari, con un EPS rettificato tra 0,51 e 0,57 dollari.
MillerKnoll (NASDAQ: MLKN) informó sus resultados del primer trimestre del año fiscal 2025, que terminó el 31 de agosto de 2024. Los pedidos aumentaron un 2.4% año tras año (YoY) y un 3.5% de forma orgánica. El cartera de pedidos final creció un 9.2% YoY alcanzando los 758 millones de dólares. Las ventas netas cayeron un 6.1% YoY, totalizando 861.5 millones de dólares. El margen bruto se mantuvo plano en 39%. Los gastos operativos aumentaron un 1% hasta 321.1 millones de dólares. Los gastos operativos ajustados disminuyeron un 5.2% hasta 286.9 millones de dólares. La tasa efectiva de impuestos se disparó al 66.2%. El EPS ajustado fue de 0.36 dólares, bajando de 0.37 dólares respecto al año anterior. La compañía reportó una pérdida por acción diluida de 0.02 dólares, en comparación con un EPS de 0.22 dólares del año pasado. El flujo de efectivo de las operaciones fue de 21.1 millones de dólares, y las recompensas de acciones totalizaron 43.7 millones de dólares. La compañía mantuvo su guía de EPS ajustado para todo el año en 2.20 dólares y proyectó ventas netas para el segundo trimestre entre 950 y 990 millones de dólares, con un EPS ajustado entre 0.51 y 0.57 dólares.
MillerKnoll (NASDAQ: MLKN)는 2025 회계연도 1분기 결과를 발표했습니다. 이 회계연도는 2024년 8월 31일에 종료되었습니다. 주문량은 전년 대비 2.4% 증가하고, 유기적으로는 3.5% 증가했습니다. 남아 있는 백로그는 전년 대비 9.2% 증가하여 7억 5천8백만 달러에 달했습니다. 순매출은 전년 대비 6.1% 감소하여 8억 6천1백50만 달러에 이르렀습니다. 총 마진은 39%로 동일하게 유지되었습니다. 운영 비용은 1% 증가하여 3억 2천1백10만 달러에 도달했습니다. 조정된 운영 비용은 5.2% 감소하여 2억 8천6백90만 달러로 줄었습니다. 실효 세율은 66.2%로 급증했습니다. 조정된 EPS는 0.36달러로, 전년의 0.37달러에서 감소했습니다. 이 기업은 희석 주당 손실이 0.02달러라고 보고했으며, 작년의 0.22달러에 비해 감소했습니다. 운영으로부터의 현금 흐름은 2천1백10만 달러이며, 주식 재매입 총액은 4천3백70만 달러입니다. 이 회사는 연간 조정 EPS 가이드를 2.20달러로 유지하고 있으며, 2분기 순매출을 9억 5천만에서 9억 9천만 달러로, 조정 EPS는 0.51달러에서 0.57달러 사이로 예상하고 있습니다.
MillerKnoll (NASDAQ: MLKN) a annoncé ses résultats du premier trimestre de l'exercice 2025, se terminant le 31 août 2024. Les commandes ont augmenté de 2,4 % par rapport à l'année précédente (YoY) et de 3,5 % de manière organique. Le carnet de commandes final a augmenté de 9,2 % YoY pour atteindre 758 millions de dollars. Le chiffre d'affaires net a baissé de 6,1 % YoY, atteignant 861,5 millions de dollars. La marge brute est restée stable à 39 %. Les frais d'exploitation ont augmenté de 1 % pour atteindre 321,1 millions de dollars. Les frais d'exploitation ajustés ont diminué de 5,2 % pour atteindre 286,9 millions de dollars. Le taux d'imposition effectif a grimpé à 66,2 %. L'EPS ajusté était de 0,36 dollar, en baisse par rapport à 0,37 dollar l'année précédente. L'entreprise a signalé une perte diluée par action de 0,02 dollar, contre un EPS de 0,22 dollar l'an dernier. Le flux de trésorerie provenant des opérations était de 21,1 millions de dollars, et les rachats d'actions totalisaient 43,7 millions de dollars. L'entreprise a maintenu son orientation EPS ajusté de 2,20 dollars pour l'année entière et a projeté des ventes nettes pour le deuxième trimestre entre 950 millions et 990 millions de dollars, avec un EPS ajusté entre 0,51 et 0,57 dollars.
MillerKnoll (NASDAQ: MLKN) hat die Ergebnisse für das erste Quartal des Geschäftsjahres 2025 veröffentlicht, das am 31. August 2024 endete. Bestellungen stiegen im Jahresvergleich (YoY) um 2,4% und organisch um 3,5%. Der aufgelaufene Auftragsbestand stieg im Jahresvergleich um 9,2% auf 758 Millionen Dollar. Der Nettoumsatz fiel um 6,1% im Jahresvergleich auf 861,5 Millionen Dollar. Die Bruttomarge blieb stabil bei 39%. Betriebskosten stiegen um 1% auf 321,1 Millionen Dollar. Bereinigte Betriebskosten sanken um 5,2% auf 286,9 Millionen Dollar. Der effektive Steuersatz stieg auf 66,2%. Das bereinigte EPS betrug 0,36 Dollar, einen Rückgang von 0,37 Dollar im Jahresvergleich. Das Unternehmen meldete einen verwässerten Verlust pro Aktie von 0,02 Dollar, verglichen mit einem EPS von 0,22 Dollar im Vorjahr. Der Mittelzufluss aus den Betrieben betrug 21,1 Millionen Dollar, und Aktienrückkäufe beliefen sich auf 43,7 Millionen Dollar. Das Unternehmen beibehielt seine Jahresprognose für das bereinigte EPS von 2,20 Dollar und prognostizierte für das 2. Quartal einen Nettoumsatz zwischen 950 Millionen und 990 Millionen Dollar bei einem bereinigten EPS zwischen 0,51 und 0,57 Dollar.
- Orders increased by 2.4% YoY and 3.5% organically.
- Ending backlog rose by 9.2% YoY to $758 million.
- Adjusted operating expenses decreased by 5.2% YoY to $286.9 million.
- Maintained full-year adjusted EPS guidance of $2.20.
- Net sales fell 6.1% YoY to $861.5 million.
- Operating expenses increased by 1% to $321.1 million.
- Effective tax rate surged to 66.2%.
- Reported a diluted loss per share of $0.02 compared to an EPS of $0.22 last year.
Insights
MillerKnoll's Q1 FY2025 results show mixed performance. While orders increased 2.4% year-over-year, net sales declined 6.1% to
The Americas Contract segment saw a
MillerKnoll maintained its full-year adjusted earnings guidance of
MillerKnoll's Q1 results reflect broader market trends in the furniture industry. The 2.4% increase in orders suggests a gradual recovery in demand, particularly in the contract segment. The company's outperformance in North American retail by approximately 6 points compared to industry averages is noteworthy, indicating effective strategies in a challenging market.
The shift in holiday/cyber promotional periods between Q2 and Q3 this year (
The company's focus on showroom experiences and sustainable solutions, such as the bamboo-based leather alternative for the Eames Lounge Chair, aligns with current consumer trends favoring experiential retail and eco-friendly products. The addition of board members with expertise in technology, architecture, design and hospitality suggests a strategic move to address evolving market needs and opportunities in these sectors.
MillerKnoll's financial position presents a mixed risk profile. The company's net debt-to-EBITDA ratio of 2.84x is moderate but requires monitoring, especially given the challenging market conditions. The
However, the scheduled debt maturities of
The high effective tax rate of
The company's share repurchase program (1.5 million shares for
Financial Highlights
- Orders in the first quarter were up
2.4% on a reported basis and up3.5% organically from the prior year, led by Americas Contract growth of5.2% . - Ending backlog of
$758.0 million 9.2% from last year and10.9% from the start of fiscal 2025. - Gross margin in the Global Retail segment improved by 160 basis points due to continued benefits from operational improvements.
First Quarter Fiscal 2025 Financial Results
(Unaudited) | |||
Three Months Ended | |||
(Dollars in millions, except per share data) | August 31, 2024 | September 2, 2023 | % Chg. |
(13 weeks) | (13 weeks) | ||
Net sales | $ 861.5 | $ 917.7 | (6.1) % |
Gross margin % | 39.0 % | 39.0 % | N/A |
Operating expenses | $ 321.1 | $ 317.8 | 1.0 % |
Adjusted operating expenses* | $ 286.9 | $ 302.7 | (5.2) % |
Effective tax rate | 66.2 % | 24.4 % | N/A |
Adjusted effective tax rate* | 21.5 % | 24.6 % | N/A |
(Loss) earnings per share - diluted(1) | $ (0.02) | $ 0.22 | N/A |
Adjusted earnings per share - diluted*(1) | $ 0.36 | $ 0.37 | (2.7) % |
*Items indicated represent Non-GAAP measurements; see the reconciliations of Non-GAAP financial measures and related explanations below. (1)Due to the anti-dilutive effect resulting from periods where the Company reports a net loss, the impact of potentially dilutive securities on the per share amounts has been omitted from the calculation of weighted-average common shares outstanding for diluted net loss per common share. | |||
To our shareholders:
MillerKnoll finished the first quarter with momentum and order growth. Demand is improving and our Contract business is seeing the return of larger projects in the
While demand trends in our Retail segment continue to reflect the impact of a tepid housing market, the investments we have made in platform operational capabilities are not only driving significant margin improvements, but also position us to support profitable growth plans as the macro-economic backdrop improves. We believe our first quarter financial results demonstrate the advantage of our collective of brands, diverse business channels and global footprint.
First Quarter Fiscal 2025 Consolidated Results
Consolidated net sales for the first quarter were
Gross margin in the quarter was
Consolidated operating expenses for the quarter were
Operating margin for the quarter was
We reported a diluted loss per share of
As of August 31, 2024, our liquidity position reflected cash on hand and availability on our revolving credit facility totaling
First Quarter Fiscal 2025 Results by Segment
Americas Contract
For the first quarter, Americas Contract net sales of
Operating margin in the quarter was
International Contract and Specialty
International Contract and Specialty segment net sales in the first quarter of
Operating margin for the first quarter was
Global Retail
For the first quarter, our Global Retail segment sales totaled
While soft conditions exist within the housing market, we remain focused on driving operational improvements. These efforts helped drive a year-over-year gross margin improvement of 160 basis points. Operating margin for the first quarter was
In addition, we continue to execute programs to drive growth as macro-economic conditions improve. In
Additional Highlights from Q1
Building engaging showroom experiences remains a priority for MillerKnoll. During the first quarter, we held successful client engagement events in our
We also demonstrated our ongoing commitment to designing for the future with new sustainable solutions, including the Eames Lounge Chair and Ottoman in a bamboo-based leather alternative. We also continued to deliver for our teams, offering programs to support associates, and earning a Great Place to Work® certification and "Best Place to Work for Disability Inclusion" status in the 2024 Disability Equality Index by Disability:IN®.
In support of our long-term growth plans, we evaluated the composition of our board of directors given the retirement of two directors since 2022. During the first quarter, we recruited three new members with expertise in technology, architecture, design and hospitality to augment the expertise of our current board.
(2) Estimate based on a comparison of MillerKnoll North American Retail sales trends to a composite data set comprised of information from the National Retail Federation, the |
Second Quarter and Fiscal 2025 Outlook
We are maintaining our full year adjusted earnings guidance of
As it relates to the second quarter of fiscal year 2025, we expect net sales to range between
This guidance takes into consideration a shift in the holiday/cyber promotional period for our retail business. Last year the full promotional period fell in the second quarter, while this year it will be split between the second and third quarters. Relative to last year's revenue pacing, we estimate this shift in timing will move between
Webcast and Conference Call Information
The Company will host a conference call and webcast to discuss the results of the first quarter of fiscal 2025 on Thursday, September 19, 2024, at 5:00 PM ET. To ensure participation, allow extra time to visit the Company's website at https://www.millerknoll.com/investor-relations/news-events/events-and-presentations to download the streaming software necessary to participate. An online archive of the webcast will also be available on the Company's investor relations website. Additional links to materials supporting the release will also be available at https://www.millerknoll.com/investor-relations.
Financial highlights for the three months ended August 31, 2024 follow:
MillerKnoll, Inc. Condensed Consolidated Statements of Operations
| |||||
(Unaudited) (Dollars in millions, except per share and common share data) | Three Months Ended | ||||
August 31, 2024 | September 2, 2023 | ||||
Net sales | $ 861.5 | 100.0 % | $ 917.7 | 100.0 % | |
Cost of sales | 525.2 | 61.0 % | 559.6 | 61.0 % | |
Gross margin | 336.3 | 39.0 % | 358.1 | 39.0 % | |
Operating expenses | 321.1 | 37.3 % | 317.8 | 34.6 % | |
Operating earnings | 15.2 | 1.8 % | 40.3 | 4.4 % | |
Other expenses, net | 16.9 | 2.0 % | 19.2 | 2.1 % | |
(Loss) earnings before income taxes and equity income | (1.7) | (0.2) % | 21.1 | 2.3 % | |
Income tax (benefit) expense | (1.1) | (0.1) % | 5.1 | 0.6 % | |
Equity income, net of tax | 0.1 | — % | 0.1 | — % | |
Net (loss) earnings | (0.5) | (0.1) % | 16.1 | 1.8 % | |
Net earnings (loss) attributable to redeemable noncontrolling interests | 0.7 | 0.1 % | (0.6) | (0.1) % | |
Net (loss) earnings attributable to MillerKnoll, Inc. | $ (1.2) | (0.1) % | $ 16.7 | 1.8 % | |
Amounts per common share attributable to MillerKnoll, Inc. | |||||
(Loss) earnings per share - basic | ( | ||||
Weighted average basic common shares | 70,206,373 | 75,327,544 | |||
(Loss) earnings per share - diluted | ( | ||||
Weighted average diluted common shares | 70,206,373 | 75,707,536 | |||
MillerKnoll, Inc. Condensed Consolidated Statements of Cash Flows | |||
Three Months Ended | |||
(Unaudited) (Dollars in millions) | August 31, 2024 | September 2, 2023 | |
Cash provided by (used in): | |||
Operating activities | $ 21.1 | $ 130.9 | |
Investing activities | (22.3) | (26.3) | |
Financing activities | (20.3) | (111.1) | |
Effect of exchange rate changes | 0.8 | 0.5 | |
Net change in cash and cash equivalents | (20.7) | (6.0) | |
Cash and cash equivalents, beginning of period | 230.4 | 223.5 | |
Cash and cash equivalents, end of period | $ 209.7 | $ 217.5 | |
MillerKnoll, Inc. Condensed Consolidated Balance Sheets
| |||
(Unaudited) (Dollars in millions) | August 31, 2024 | June 1, 2024 | |
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $ 209.7 | $ 230.4 | |
Accounts receivable, net | 277.3 | 308.3 | |
Unbilled accounts receivable | 42.3 | 22.2 | |
Inventories, net | 440.5 | 428.6 | |
Prepaid expenses and other | 102.0 | 80.1 | |
Total current assets | 1,071.8 | 1,069.6 | |
Net property and equipment | 490.1 | 492.0 | |
Right of use assets | 372.2 | 375.6 | |
Other assets | 2,085.0 | 2,106.4 | |
Total Assets | $ 4,019.1 | $ 4,043.6 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & | |||
Current Liabilities: | |||
Accounts payable | $ 236.1 | $ 241.4 | |
Short-term borrowings and current portion of long-term debt | 45.9 | 43.5 | |
Short-term lease liability | 73.1 | 67.2 | |
Accrued liabilities | 320.6 | 345.6 | |
Total current liabilities | 675.7 | 697.7 | |
Long-term debt | 1,324.0 | 1,291.7 | |
Lease liabilities | 375.1 | 360.4 | |
Other liabilities | 235.2 | 234.8 | |
Total Liabilities | 2,610.0 | 2,584.6 | |
Redeemable Noncontrolling Interests | 76.6 | 73.9 | |
Stockholders' Equity | 1,332.5 | 1,385.1 | |
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity | $ 4,019.1 | $ 4,043.6 | |
Non-GAAP Financial Measures and Other Supplemental Data
This presentation contains non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. These non-GAAP financial measures are not measurements of our financial performance under GAAP and should not be considered an alternative to the related GAAP measurement. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included within this presentation. The Company believes these non-GAAP measures are useful for investors as they provide financial information on a more comparative basis for the periods presented.
The non-GAAP financial measures referenced within this presentation include: Adjusted Effective Tax Rate, Adjusted Operating Earnings (Loss), Adjusted Operating Margin, Adjusted Earnings per Share, Adjusted Gross Margin, Adjusted Operating Expenses, Adjusted Bank Covenant EBITDA, and Organic Growth (Decline).
Adjusted Effective Tax Rate refers to the projected full-year GAAP tax rate, adjusted to exclude certain unusual or infrequent events that are expected to significantly impact that rate as well as impacts related to enactments of comprehensive tax law changes.
Adjusted Operating Earnings (Loss) represents reported operating earnings plus integration charges, amortization of Knoll purchased intangibles, restructuring expenses, and Knoll pension plan termination charges. These adjustments are described further below.
Adjusted Operating Margin is calculated as adjusted operating earnings (loss) divided by net sales.
Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, integration charges, restructuring expenses, Knoll pension plan termination charges and the related tax effect of these adjustments. These adjustments are described further below.
Adjusted Gross Margin represents gross margin plus integration charges. These adjustments are described further below.
Adjusted Operating Expenses represents reported operating expenses excluding restructuring charges, integration charges, amortization of Knoll purchased intangibles, and Knoll pension plan termination charges. These adjustments are described further below.
Adjusted Bank Covenant EBITDA is calculated by excluding depreciation, amortization, interest expense, taxes from net income, and certain other adjustments. Other adjustments include, as applicable in the period, charges associated with business restructuring actions, integration charges, impairment expenses, non-cash stock-based compensation, future synergies, and other items as described in our lending agreements.
Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects and the impact of the closure of the Hay eCommerce channel in
The adjustments to arrive at these non-GAAP financial measures are as follows:
Amortization of Knoll purchased intangibles: Includes expenses associated with the amortization of acquisition related intangibles acquired as part of the Knoll acquisition. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. We exclude the impact of the amortization of Knoll purchased intangibles as such non-cash amounts were significantly impacted by the size of the Knoll acquisition. Furthermore, we believe that this adjustment enables better comparison of our results as Amortization of Knoll Purchased Intangibles will not recur in future periods once such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. Although we exclude the Amortization of Knoll Purchased Intangibles in these non-GAAP measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.
Integration charges: Knoll integration-related costs include severance, accelerated stock-based compensation expenses, asset impairment charges associated with lease and operations facility consolidation activity, and expenses related to synergy realization efforts and reorganization initiatives.
Restructuring charges: Includes costs associated with actions involving targeted workforce reductions.
Knoll pension plan termination charges: Includes expenses incurred associated with the termination of the Knoll pension plan.
Tax related items: We excluded the income tax benefit/provision effect of the tax related items from our non-GAAP measures because they are not associated with the tax expense on our ongoing operating results.
Certain tables below summarize select financial information, for the periods indicated, related to each of the Company's reportable segments. The Americas Contract ("
A. Reconciliation of Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by Segment | ||||
Three Months Ended | ||||
August 31, 2024 | September 2, 2023 | |||
Americas Contract | ||||
Net sales | $ 454.6 | 100.0 % | $ 490.4 | 100.0 % |
Gross margin | 154.1 | 33.9 % | 174.8 | 35.6 % |
Total operating expenses | 137.0 | 30.1 % | 133.4 | 27.2 % |
Operating earnings | $ 17.1 | 3.8 % | $ 41.4 | 8.4 % |
Adjustments | ||||
Restructuring charges | — | — % | 4.3 | 0.9 % |
Integration charges | 22.5 | 4.9 % | 3.1 | 0.6 % |
Amortization of Knoll purchased intangibles | 3.2 | 0.7 % | 3.2 | 0.7 % |
Knoll pension plan termination charges | 0.5 | 0.1 % | — | — % |
Adjusted operating earnings | $ 43.3 | 9.5 % | $ 52.0 | 10.6 % |
International Contract & Specialty | ||||
Net sales | $ 213.5 | 100.0 % | $ 228.3 | 100.0 % |
Gross margin | 95.1 | 44.5 % | 96.9 | 42.4 % |
Total operating expenses | 85.8 | 40.2 % | 85.5 | 37.5 % |
Operating earnings | $ 9.3 | 4.4 % | $ 11.4 | 5.0 % |
Adjustments | ||||
Restructuring charges | — | — % | 0.7 | 0.3 % |
Integration charges | 5.5 | 2.6 % | 0.7 | 0.3 % |
Amortization of Knoll purchased intangibles | 2.0 | 0.9 % | 2.1 | 0.9 % |
Adjusted operating earnings | $ 16.8 | 7.9 % | $ 14.9 | 6.5 % |
Global Retail | ||||
Net sales | $ 193.4 | 100.0 % | $ 199.0 | 100.0 % |
Gross margin | 87.1 | 45.0 % | 86.4 | 43.4 % |
Total operating expenses | 82.6 | 42.7 % | 84.2 | 42.3 % |
Operating earnings | $ 4.5 | 2.3 % | $ 2.2 | 1.1 % |
Adjustments | ||||
Restructuring charges | — | — % | 0.2 | 0.1 % |
Integration charges | 0.3 | 0.2 % | — | — % |
Amortization of Knoll purchased intangibles | 0.7 | 0.4 % | 0.7 | 0.4 % |
Adjusted operating earnings | $ 5.5 | 2.8 % | $ 3.1 | 1.6 % |
Corporate | ||||
Operating expenses | $ 15.7 | — % | $ 14.7 | — % |
Operating (loss) | $ (15.7) | — % | $ (14.7) | — % |
Adjustments | ||||
Integration charges | — | — % | 0.1 | — % |
Adjusted operating (loss) | $ (15.7) | — % | $ (14.6) | — % |
MillerKnoll, Inc. | ||||
Net sales | $ 861.5 | 100.0 % | $ 917.7 | 100.0 % |
Gross margin | 336.3 | 39.0 % | 358.1 | 39.0 % |
Total operating expenses | 321.1 | 37.3 % | 317.8 | 34.6 % |
Operating earnings | $ 15.2 | 1.8 % | $ 40.3 | 4.4 % |
Adjustments | ||||
Restructuring charges | — | — % | 5.2 | 0.6 % |
Integration charges | 28.3 | 3.3 % | 3.9 | 0.4 % |
Amortization of Knoll purchased intangibles | 5.9 | 0.7 % | 6.0 | 0.7 % |
Knoll pension plan termination charges | 0.5 | 0.1 % | — | — % |
Adjusted operating earnings | $ 49.9 | 5.8 % | $ 55.4 | 6.0 % |
B. Reconciliation of (Loss) Earnings per Share to Adjusted Earnings per Share | ||
Three Months Ended | ||
August 31, 2024 | September 2, 2023 | |
(Loss) earnings per share - diluted | $ (0.02) | $ 0.22 |
Add: Amortization of Knoll purchased intangibles | 0.08 | 0.08 |
Add: Integration charges | 0.40 | 0.07 |
Add: Restructuring charges | — | 0.05 |
Add: Knoll pension plan termination charges | 0.01 | — |
Tax impact on adjustments | (0.11) | (0.05) |
Adjusted earnings per share - diluted | $ 0.36 | $ 0.37 |
Weighted average shares outstanding (used for calculating adjusted earnings per share) – diluted | 70,206,373 | 75,707,536 |
C. Reconciliation of Gross Margin to Adjusted Gross Margin | ||||
Three Months Ended | ||||
August 31, 2024 | September 2, 2023 | |||
Gross margin | $ 336.3 | 39.0 % | $ 358.1 | 39.0 % |
Integration charges | 0.5 | 0.1 % | — | — % |
Adjusted gross margin | $ 336.8 | 39.1 % | $ 358.1 | 39.0 % |
D. Reconciliation of Operating Expenses to Adjusted Operating Expenses | ||||
Three Months Ended | ||||
August 31, 2024 | September 2, 2023 | |||
Operating expenses | $ 321.1 | 37.3 % | $ 317.8 | 34.6 % |
Restructuring charges | — | — % | 5.2 | 0.6 % |
Integration charges | 27.8 | 3.2 % | 3.9 | 0.4 % |
Amortization of Knoll purchased intangibles | 5.9 | 0.7 % | 6.0 | 0.7 % |
Knoll pension plan termination charges | 0.5 | 0.1 % | — | — % |
Adjusted operating expenses | $ 286.9 | 33.3 % | $ 302.7 | 33.0 % |
E. Reconciliation of Net Earnings to Adjusted Bank Covenant EBITDA and Adjusted Bank Covenant EBITDA Ratio (provided | |
August 31, 2024 | |
Net earnings | $ 64.3 |
Income tax expense | 8.5 |
Depreciation expense | 115.2 |
Amortization expense | 37.2 |
Interest expense | 76.8 |
Other adjustments(*) | 110.5 |
Adjusted bank covenant EBITDA | $ 412.5 |
Total debt, less cash, end of trailing period (includes outstanding LC's) | $ 1,170.7 |
Net debt to adjusted bank covenant EBITDA ratio | 2.84 |
*Items indicated represent Non-GAAP measurements; see the reconciliations of Non-GAAP financial measures and | |
F. Organic Sales Growth by Segment | ||||
Three Months Ended | ||||
August 31, 2024 | ||||
Americas Contract | International | Global Retail | Total | |
Net sales, as reported | $ 454.6 | $ 213.5 | $ 193.4 | $ 861.5 |
% change from PY | (7.3) % | (6.5) % | (2.8) % | (6.1) % |
Adjustments | ||||
Currency translation effects (1) | 1.4 | 0.5 | 0.9 | 2.8 |
Net sales, organic | $ 456.0 | $ 214.0 | $ 194.3 | $ 864.3 |
% change from PY | (7.0) % | (6.3) % | 0.4 % | (5.3) % |
Three Months Ended | ||||
September 2, 2023 | ||||
Americas Contract | International | Global Retail | Total | |
Net sales, as reported | $ 490.4 | $ 228.3 | $ 199.0 | $ 917.7 |
Adjustments | ||||
HAY eCommerce | — | — | (5.5) | (5.5) |
Net sales, organic | $ 490.4 | $ 228.3 | $ 193.5 | $ 912.2 |
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable | ||||
G. Organic Order Growth by Segment | ||||
Three Months Ended | ||||
August 31, 2024 | ||||
Americas Contract | International | Global Retail | Total | |
Orders, as reported | $ 512.7 | $ 234.1 | $ 189.1 | $ 935.9 |
% change from PY | 5.2 % | 2.7 % | (4.7) % | 2.4 % |
Adjustments | ||||
Currency translation effects (1) | 2.4 | 0.9 | 1.2 | 4.5 |
Orders, organic | $ 515.1 | $ 235.0 | $ 190.3 | $ 940.4 |
% change from PY | 5.7 % | 3.1 % | (1.6) % | 3.5 % |
Three Months Ended | ||||
September 2, 2023 | ||||
Americas Contract | International | Global Retail | Total | |
Orders, as reported | $ 487.3 | $ 227.9 | $ 198.5 | $ 913.7 |
Adjustments | ||||
HAY eCommerce | — | — | (5.1) | (5.1) |
Orders, organic | $ 487.3 | $ 227.9 | $ 193.4 | $ 908.6 |
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to | ||||
H. Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate | ||
Three Months Ended | ||
August 31, 2024 | September 2, 2023 | |
Income tax (benefit) expense, as reported (GAAP) | $ (1.1) | $ 5.1 |
Effective Tax Rate | 66.2 % | 24.4 % |
Adjustments | ||
Restructuring charges | — | 1.0 |
Integration charges | 6.7 | 1.3 |
Amortization of Knoll purchased intangibles | 1.4 | 1.5 |
Knoll pension plan termination charges | 0.1 | — |
Income tax (benefit) expense, adjusted | 7.1 | 8.9 |
Adjusted Effective Tax Rate | 21.5 % | 24.6 % |
I. Consolidated MillerKnoll Backlog | |
Q1 FY2025 | |
MillerKnoll backlog | |
J. Sales and Earnings Guidance - Upcoming Quarter | |
Company Guidance | |
Q2 FY2025 | |
Net sales | |
Gross margin % | |
Operating expenses | |
Interest and other expense, net | |
Effective tax rate | |
Adjusted earnings per share - diluted | |
About MillerKnoll
MillerKnoll is a collective of dynamic brands that comes together to design the world we live in. MillerKnoll brand portfolio includes Herman Miller, Knoll, Colebrook Bosson Saunders, DatesWeiser, Design Within Reach, Edelman, Geiger, HAY, Holly Hunt, Knoll Textiles, Maharam, Muuto, NaughtOne, and Spinneybeck|FilzFelt. MillerKnoll is an unparalleled platform that redefines modern for the 21st century by building a more sustainable, equitable and beautiful future for all.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to future events and anticipated results of operations, business strategies, the anticipated benefits of our acquisition of Knoll, the anticipated impact of the Knoll acquisition on the combined Company's business and future financial and operating results, the expected amount and timing of synergies from the Knoll acquisition, and other aspects of our operations or operating results. These forward-looking statements generally can be identified by phrases such as "will," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of MillerKnoll or the price of MillerKnoll's stock. These forward-looking statements involve certain risks and uncertainties, many of which are beyond MillerKnoll's control, that could cause actual results to differ materially from those indicated in such forward-looking statements, including but not limited to: general economic conditions; the impact of any government policies and actions to protect the health and safety of individuals or to maintain the functioning of national or global economies, and the Company's response to any such policies and actions; the impact of public health crises, such as pandemics and epidemics; risks related to the additional debt incurred in connection with the Knoll acquisition; MillerKnoll's ability to comply with its debt covenants and obligations; the risk that the anticipated benefits of the Knoll acquisition will be more costly to realize than expected; the effect of the Knoll acquisition on the ability of MillerKnoll to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom MillerKnoll does business, or on MillerKnoll's operating results and business generally; the ability to successfully integrate Knoll's operations; the ability of MillerKnoll to implement its plans, forecasts and other expectations with respect to MillerKnoll's business after the completion of the Knoll acquisition and realize expected synergies; business disruption following the Knoll acquisition; the availability and pricing of raw materials; the financial strength of our dealers and the financial strength of our customers; the success of newly-introduced products; the pace and level of government procurement; and the outcome of pending litigation or governmental audits or investigations. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to MillerKnoll's periodic reports and other filings with the SEC, including the risk factors identified in MillerKnoll's most recent Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. The forward-looking statements included in this communication are made only as of the date hereof. MillerKnoll does not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.
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SOURCE MillerKnoll
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