ZEELAND,
Mich., June 26, 2024 /PRNewswire/ -- MillerKnoll
Inc. (NASDAQ: MLKN) today reported results for the fourth
quarter and full fiscal year 2024, which ended June 1,
2024.
Business Highlights
- Orders in the fourth quarter were up 1.1% on a reported basis
and up 2.9% organically from last year.
- Fourth quarter and full year gross margin improved 250 basis
points and 410 basis points, respectively year-over-year.
- Achieved annualized run-rate cost synergy target of
$160 million related to the
integration of Knoll.
- Full year GAAP and adjusted diluted earnings per share improved
101.8% and 12.4% respectively, from the prior year.
Fourth Quarter Fiscal 2024 Financial Results
|
(Unaudited)
|
(Unaudited)
|
|
Three Months
Ended
|
Twelve Months
Ended
|
(Dollars in
millions, except per share data)
|
June 1, 2024
|
June 3, 2023
|
% Chg.
|
June 1, 2024
|
June 3, 2023
|
% Chg.
|
|
(13 weeks)
|
(13 weeks)
|
|
(39 weeks)
|
(40 weeks)
|
|
Net sales
|
$
888.9
|
$
956.7
|
(7.1) %
|
$ 3,628.4
|
$ 4,087.1
|
(11.2) %
|
Gross margin
%
|
39.6 %
|
37.1 %
|
N/A
|
39.1 %
|
35.0 %
|
N/A
|
Operating
expenses
|
$
328.7
|
$
343.1
|
(4.2) %
|
$ 1,252.3
|
$ 1,307.7
|
(4.2) %
|
Adjusted operating
expenses*
|
$
278.8
|
$
297.6
|
(6.3) %
|
$ 1,157.3
|
$ 1,188.8
|
(2.6) %
|
Effective tax
rate
|
(63.2) %
|
119.9 %
|
N/A
|
14.8 %
|
8.8 %
|
N/A
|
Adjusted effective tax
rate*
|
12.0 %
|
21.7 %
|
N/A
|
19.6 %
|
22.3 %
|
N/A
|
Earnings per share -
diluted(1)
|
$
0.14
|
$
0.00
|
N/A
|
$
1.11
|
$
0.55
|
101.8 %
|
Adjusted earnings per
share - diluted*(1)
|
$
0.67
|
$
0.41
|
63.4 %
|
$
2.08
|
$
1.85
|
12.4 %
|
*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 fiscal year 2024 strong with significant
year-over-year earnings per share growth in the fourth quarter. By
leveraging the advantage and scale of MillerKnoll's collective of
brands, diversified business channels and global operations, our
teams continued to drive substantial margin expansion while
protecting strategic investments for growth. The improving internal
demand indicators we have been monitoring throughout the year were
validated in the fourth quarter by a return to year-over-year order
growth within our America's Contract segment. This drove a 6.9%
sequential improvement in the consolidated order backlog, giving us
added momentum as we begin fiscal year 2025.
There is accelerated activity in our contract business. Earlier
this month, we met with dealers and customers at Design Days, an
annual large trade show in Chicago. Appointments at our showrooms were up
year-over-year and importantly, there was a shift in dialogue from
theoretical return to office ideas to specific project needs.
During the show, we launched over 30 new products, capturing
industry awards for Knoll's Tugendhat and Morrison Hannah chairs,
Knoll's Cove Collection for private offices and NaughtOne's Percy
chair. In addition, Herman Miller
refreshed the versatile Vantum Gaming Chair with new ergonomic
enhancements and introduced a seating option with a lower carbon
footprint, the Mirra 2 task chair.
We are investing in MillerKnoll showrooms, our digital
platforms, and enhanced tools to fuel our contract business and
support our MillerKnoll dealers. We are also finding new ways to
bring our brand collective together in both our dealers showrooms
and our own showrooms. Work is underway to open newly enhanced
MillerKnoll spaces in London,
New York and Los Angeles later in the
year.
While our retail business and the industry continue to navigate
tough conditions in the short-term, we are making investments for
long-term growth by enhancing the store and online experience for
customers. We continued to optimize our product assortment through
the introduction of complementary categories and additional
materials. To optimize foot traffic, we are densifying floor
arrangements to show more options and offering design services that
help drive larger sales with less returns. In addition, we are
testing store formats such as the beautiful new Design Within Reach
studio in San Francisco and will
apply learnings as we open new stores.
Fourth Quarter and Fiscal 2024 Consolidated Results
Consolidated net sales for the fourth quarter were $888.9 million, reflecting a decrease of 7.1%
year-over- year and a decrease of 5.2% organically compared to the
same period last year. Orders in the quarter of $933.0 million were up 1.1% as reported and 2.9%
on an organic basis. Orders grew sequentially 12.4% from the
previous quarter on a reported basis.
Gross margin in the quarter was 39.6%, which is 250 basis points
higher than the same quarter last year. The year-over-year increase
in gross margin was driven mainly by the realization of price and
channel optimization strategies, cost synergies and continued
reductions in freight and distribution costs.
Consolidated operating expenses for the quarter were
$328.7 million, compared to
$343.1 million in the prior year.
Consolidated adjusted operating expenses were $278.8 million, a decrease of $18.8 million year-over-year, primarily due to
lower variable selling expenses, the continued benefit of synergy
savings, and recently implemented restructuring actions.
During the fourth quarter, the Company recorded special charges
of $22.1 million associated with
previously announced restructuring measures, which included a
workforce reduction and showroom consolidation. In addition, the
Company recognized non-cash, pre-tax charges totaling $16.8 million related to the impairment of the
Knoll and Muuto trade names. This charge was determined based on
the Company's annual impairment review process.
Operating margin for the quarter was 2.7% compared to 1.2% in
the same quarter last year. On an adjusted basis, consolidated
operating margin for the quarter was 8.3% compared to 5.9% in the
same quarter last year, reflecting an adjusted operating margin
expansion of 240 basis points.
Reported diluted earnings per share were $0.14 for the quarter, compared to break-even for
the same period last year. Adjusted diluted earnings per share were
$0.67 for the quarter, reflecting
growth of 63.4% compared to $0.41 for
the same period last year.
As of June 1, 2024, our liquidity position reflected cash
on hand and availability on our revolving credit facility totaling
$552.7 million. During the fourth
quarter, the business generated $78.4 million of cash flow from operations.
We repurchased approximately 1.4 million shares for a total cash
outlay of $37.3 million. We
ended the fourth quarter with a net debt-to-EBITDA ratio, as
defined by our lending agreement, of 2.63x. Our scheduled debt
maturities (which exclude the maturity of the revolver) for fiscal
years 2025, 2026 and 2027 are $43.6
million, $46.8 million and
$276.4 million respectively.
For fiscal 2024, net sales were $3.6
billion, reflecting a year-over-year decrease of 11.2%. On
an organic basis, net sales decreased by 8.1% year-over-year.
For fiscal 2024, gross margin and operating margin both improved
year-over-year. Reported and adjusted gross margin increased 410
and 370 basis points, respectively. Reported operating margins were
160 basis points higher than last year, while adjusted operating
margin increased 90 basis points year-over-year.
Diluted earnings per share for the full year totaled
$1.11, compared to $0.55 in fiscal 2023. On an adjusted basis,
diluted earnings per share for the full year totaled $2.08 compared to $1.85 in fiscal 2023, reflecting an increase of
12.4%.
Fourth Quarter and Fiscal 2024 Results by Segment
Americas Contract
For the fourth quarter, Americas
Contract net sales of $416.6 million
were down 12.2% on a reported basis and down 12.3% organically
compared to the same period last year. New orders totaled
$480.1 million and were up 5.7% from
the previous year and increased sequentially by 14.3% from the
third quarter of fiscal 2024. Throughout the fourth quarter, order
levels improved each month supported by the strategic initiatives
the Company outlined last quarter to capture demand. Leading
indicators, such as funnel additions and contract activations,
remain positive and are suggestive of improving demand patterns as
we enter fiscal year 2025. Based on past recovery cycles, demand
patterns are expected to be volatile month-to-month, but trend
positive over longer time periods.
Operating margin loss in the quarter was 0.7% compared to
operating margin of 4.5% in the prior year. On an adjusted basis,
operating margin was 7.3% in the quarter, which is down 280 basis
points compared to the same quarter last year as a result of lower
sales and reduced fixed cost leverage.
For the full fiscal year, net sales decreased by 10.0% and
organic sales decreased by 8.3% year-over-year. Operating margin
for the full fiscal year was 5.4% compared to 4.9% in the prior
year. On an adjusted basis, operating margin was 8.9%, which
was up 100 basis points due to the combination of gross margin
expansion and well managed operating
expenses.
International Contract and Specialty
The International
Contract and Specialty segment net sales in the fourth quarter of
$245.0 million grew 3.2% on a
reported basis and 3.8% on an organic basis year-over-year with
strong performance in India, the
Middle East, China, and Korea, and positive activity in the
healthcare, technology, and financial sectors. Orders during the
quarter totaled $238.7 million,
resulting in a year-over-year decrease of 0.5% on a reported basis
and flat organically. Lower demand patterns in the Specialty
businesses offset international contract business demand
growth.
Operating margin for the fourth quarter was 10.0% compared to
7.2% in the prior year. On an adjusted basis, operating margin for
the quarter was 14.5%, up 520 basis points year-over-year, driven
by product and price optimization, cost synergies, efficiencies
gained by localized sourcing and production within India and China, and the benefit of stabilized energy
costs in Europe.
For the full fiscal year, net sales decreased 8.4% and organic
sales decreased 7.2% year-over-year. Operating margin was 8.4%
compared to 9.7% in the prior year. On an adjusted basis, operating
margin decreased 30 basis points, driven by the loss of leverage
from slowed demand in both Europe
and our Specialty businesses.
Global Retail
Net sales in the fourth quarter of our
Global Retail segment totaled $227.3
million, a decline of 7.2% year-over-year on a reported
basis and up slightly on an organic basis, as softer
housing-related demand conditions continue. Orders in the quarter
totaled $214.2 million, down 6.2%
compared to the same period last year on a reported basis and up
0.9% on an organic basis.
Operating margin for the fourth quarter was 6.2% compared to
operating margin loss of 4.4% in the prior year. On an
adjusted basis, operating margin for the quarter was 8.6%, which
was 790 basis points higher than the prior year, driven by
significantly improved operational efficiencies in the North
American distribution centers and fewer inventory adjustments.
For the full fiscal year, net sales decreased 16.4% and organic
sales decreased 8.6% year-over-year.
Reported operating margin was 4.9% compared to operating margin
loss of 1.5% in the prior year. On an adjusted basis, operating
margin was 5.9%, which was 210 basis points higher than the prior
year and driven by pricing actions as well as improvements in
inventory management and increased shipping revenues.
First Quarter and Fiscal 2025 Outlook
Overall, we are optimistic about fiscal year 2025 as there is
increased activity and interest in the contract space. Traffic at
recent trade shows around the globe, including NeoCon in the U.S.,
Salone di Mobile in Italy, and
3daysofdesign in Copenhagen have
improved and are close to pre-COVID levels. Also, negative trends
in home sales are beginning to ease. The National Association of
Realtors reported the year-over-year decline in existing home
sales, including luxury homes, flattened in April. With a direct
correlation between luxury home sales and demand for home
furnishings, we are well positioned to benefit as this activity
accelerates.
We believe these indicators signal an active year ahead.
Accordingly, for fiscal year 2025 we expect net sales to be above
fiscal year 2024 and adjusted diluted earnings per share to be in
the range of $2.10 to $2.30.
As it relates to the first quarter of fiscal year 2025, we
expect net sales of $872.0 million to
$912.0 million and adjusted diluted
earnings to be between $0.38 to
$0.44 per share. The midpoint
of this guidance would suggest a year-over-year revenue decrease of
approximately 2.8%.
Andi
Owen
|
|
Jeff
Stutz
|
|
President and Chief
Executive Officer
|
|
Chief Financial
Officer
|
|
Webcast and Conference Call Information
The Company will host a conference call and webcast to discuss
the results of the fourth quarter of fiscal 2024 on Wednesday,
June 26, 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 and twelve months ended
June 1, 2024 follow:
MillerKnoll,
Inc.
Condensed
Consolidated Statements of Operations
|
|
(Unaudited) (Dollars
in millions, except per share and common share data)
|
Three Months
Ended
|
|
Twelve Months
Ended
|
June 1, 2024
|
|
June 3, 2023
|
|
June 1, 2024
|
|
June 3, 2023
|
Net sales
|
$ 888.9
|
100.0 %
|
|
$ 956.7
|
100.0 %
|
|
$
3,628.4
|
100.0 %
|
|
$
4,087.1
|
100.0 %
|
Cost of
sales
|
536.5
|
60.4 %
|
|
602.0
|
62.9 %
|
|
2,208.9
|
60.9 %
|
|
2,657.1
|
65.0 %
|
Gross margin
|
352.4
|
39.6 %
|
|
354.7
|
37.1 %
|
|
1,419.5
|
39.1 %
|
|
1,430.0
|
35.0 %
|
Operating
expenses
|
328.7
|
37.0 %
|
|
343.1
|
35.9 %
|
|
1,252.3
|
34.5 %
|
|
1,307.7
|
32.0 %
|
Operating
earnings
|
23.7
|
2.7 %
|
|
11.6
|
1.2 %
|
|
167.2
|
4.6 %
|
|
122.3
|
3.0 %
|
Other expenses,
net
|
16.9
|
1.9 %
|
|
17.1
|
1.8 %
|
|
67.5
|
1.9 %
|
|
70.9
|
1.7 %
|
Earnings before income
taxes and equity income
|
6.8
|
0.8 %
|
|
(5.5)
|
(0.6) %
|
|
99.7
|
2.7 %
|
|
51.4
|
1.3 %
|
Income tax (benefit)
expense
|
(4.3)
|
(0.5) %
|
|
(6.6)
|
(0.7) %
|
|
14.7
|
0.4 %
|
|
4.5
|
0.1 %
|
Equity (loss) income,
net of tax
|
(0.1)
|
— %
|
|
(1.0)
|
(0.1) %
|
|
(0.4)
|
— %
|
|
(0.8)
|
— %
|
Net
earnings
|
11.0
|
1.2 %
|
|
0.1
|
— %
|
|
84.6
|
2.3 %
|
|
46.1
|
1.1 %
|
Net earnings
attributable to redeemable noncontrolling interests
|
1.1
|
0.1 %
|
|
0.2
|
— %
|
|
2.3
|
0.1 %
|
|
4.0
|
0.1 %
|
Net earnings
attributable to MillerKnoll, Inc.
|
$
9.9
|
1.1 %
|
|
$
(0.1)
|
— %
|
|
$
82.3
|
2.3 %
|
|
$
42.1
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts per common
share attributable to MillerKnoll, Inc.
|
|
Earnings (loss) per
share - basic
|
$0.14
|
|
$0.00
|
|
$1.12
|
|
$0.56
|
Weighted average basic
common shares
|
71,383,146
|
|
75,586,370
|
|
73,291,939
|
|
75,478,000
|
Earnings (loss) per
share - diluted
|
$0.14
|
|
$0.00
|
|
$1.11
|
|
$0.55
|
Weighted average
diluted common shares
|
72,658,582
|
|
75,586,370
|
|
73,954,756
|
|
76,024,368
|
|
MillerKnoll,
Inc.
Condensed
Consolidated Statements of Cash Flows
|
|
|
Twelve Months
Ended
|
(Unaudited) (Dollars
in millions)
|
June 1, 2024
|
|
June 3, 2023
|
Cash provided by (used
in):
|
|
|
|
Operating
activities
|
$
352.3
|
|
$
162.9
|
Investing
activities
|
(86.3)
|
|
(76.5)
|
Financing
activities
|
(258.8)
|
|
(86.8)
|
Effect of exchange rate
changes
|
(0.3)
|
|
(6.4)
|
Net change in cash
and cash equivalents
|
6.9
|
|
(6.8)
|
Cash and cash
equivalents, beginning of period
|
223.5
|
|
230.3
|
Cash and cash
equivalents, end of period
|
$
230.4
|
|
$
223.5
|
|
MillerKnoll,
Inc.
Condensed
Consolidated Balance Sheets
|
|
(Unaudited) (Dollars
in millions)
|
June 1, 2024
|
|
June 3, 2023
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
230.4
|
|
$
223.5
|
Accounts receivable,
net
|
306.9
|
|
334.1
|
Unbilled accounts
receivable
|
22.2
|
|
29.4
|
Inventories,
net
|
425.0
|
|
487.4
|
Prepaid expenses and
other
|
79.7
|
|
101.8
|
Total current
assets
|
1,064.2
|
|
1,176.2
|
Net property and
equipment
|
492.0
|
|
536.3
|
Right of use
assets
|
364.0
|
|
415.9
|
Other assets
|
2,106.4
|
|
2,146.4
|
Total
Assets
|
$
4,026.6
|
|
$
4,274.8
|
|
|
|
|
LIABILITIES, REDEEMABLE
NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
236.0
|
|
$
269.5
|
Short-term borrowings
and current portion of long-term debt
|
43.5
|
|
33.4
|
Short-term lease
liability
|
67.2
|
|
77.1
|
Accrued
liabilities
|
345.6
|
|
322.8
|
Total current
liabilities
|
692.3
|
|
702.8
|
Long-term
debt
|
1,291.7
|
|
1,365.1
|
Lease
liabilities
|
348.8
|
|
393.7
|
Other
liabilities
|
234.8
|
|
273.0
|
Total
Liabilities
|
2,567.6
|
|
2,734.6
|
Redeemable
Noncontrolling Interests
|
74.3
|
|
107.6
|
Stockholders'
Equity
|
1,384.7
|
|
1,432.6
|
Total Liabilities,
Redeemable Noncontrolling Interests and Stockholders'
Equity
|
$
4,026.6
|
|
$
4,274.8
|
|
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 EBITDA, 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 impairment 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,
impairment charges, and the related tax effect of these
adjustments. These adjustments are described further below.
Adjusted Gross Margin represents gross margin plus restructuring
and impairment 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 impairment
charges. These adjustments are described further below.
Adjusted EBITDA is calculated by excluding income tax expense,
interest income and expense, depreciation and amortization expense,
restructuring, impairment, and integration charges from net
income.
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, the impact of the
additional week in fiscal 2023, the impact of the closure of
the Hay eCommerce channel in North
America, and the impact of the closure of the Fully
business.
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, and
expenses related to synergy realization efforts and reorganization
initiatives.
Restructuring charges: Includes
costs associated with actions involving targeted workforce
reductions and non-cash charges for the impairment of assets
associated with the decision to close certain showrooms.
Impairment charges: Includes
non-cash, pre-tax charges for the impairment of assets associated
with the decision to cease operating Fully as a stand-alone brand
as well as impairment of the Knoll and Muuto trade names.
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 ("Americas") segment includes the
operations associated with the design, manufacture and sale of
furniture products directly or indirectly through an independent
dealership network for office, healthcare, and educational
environments throughout North and South
America. The International Contract and Specialty
("International & Specialty") segment includes the operations
associated with the design, manufacture and sale of furniture
products, indirectly or directly through an independent dealership
network in Europe, the
Middle East, Africa and Asia-Pacific as well as the global operations
of the Specialty brands, which include Holly Hunt, Spinneybeck, Maharam, Edelman, and
Knoll Textiles. The Global Retail ("Retail") segment includes
global operations associated with the sale of modern design
furnishings and accessories to third party retailers, as well as
direct to consumer sales through eCommerce, direct-mail catalogs,
and physical retail stores. Corporate costs represent unallocated
expenses related to general corporate functions, including, but not
limited to, certain legal, executive, corporate finance,
information technology, administrative and integration-related
costs.
A. Reconciliation of
Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by
Segment
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
June 1, 2024
|
June 3, 2023
|
June 1, 2024
|
June 3, 2023
|
Americas
Contract
|
|
|
|
|
|
|
|
|
Net sales
|
$ 416.6
|
100.0 %
|
$ 474.4
|
100.0 %
|
$
1,824.2
|
100.0 %
|
$
2,026.1
|
100.0 %
|
Gross margin
|
138.5
|
33.2 %
|
158.7
|
33.5 %
|
620.2
|
34.0 %
|
611.2
|
30.2 %
|
Total operating
expenses
|
141.6
|
34.0 %
|
137.3
|
28.9 %
|
521.5
|
28.6 %
|
511.6
|
25.3 %
|
Operating (loss)
earnings
|
$
(3.1)
|
(0.7) %
|
$
21.4
|
4.5 %
|
$
98.7
|
5.4 %
|
$
99.6
|
4.9 %
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Restructuring
|
18.8
|
4.5 %
|
5.2
|
1.1 %
|
24.6
|
1.3 %
|
22.8
|
1.1 %
|
Integration
charges
|
3.3
|
0.8 %
|
3.5
|
0.7 %
|
18.6
|
1.0 %
|
9.7
|
0.5 %
|
Impairment
charges
|
8.1
|
1.9 %
|
14.4
|
3.0 %
|
8.1
|
0.4 %
|
14.4
|
0.7 %
|
Amortization of Knoll
purchased intangibles
|
3.2
|
0.8 %
|
3.2
|
0.7 %
|
12.9
|
0.7 %
|
12.9
|
0.6 %
|
Adjusted operating
earnings
|
$
30.3
|
7.3 %
|
$
47.7
|
10.1 %
|
$ 162.9
|
8.9 %
|
$ 159.4
|
7.9 %
|
International
Contract & Specialty
|
|
|
|
|
|
|
|
|
Net sales
|
$ 245.0
|
100.0 %
|
$ 237.4
|
100.0 %
|
$ 931.8
|
100.0 %
|
$
1,017.3
|
100.0 %
|
Gross margin
|
109.9
|
44.9 %
|
101.3
|
42.7 %
|
409.6
|
44.0 %
|
424.3
|
41.7 %
|
Total operating
expenses
|
85.4
|
34.9 %
|
84.2
|
35.5 %
|
331.4
|
35.6 %
|
325.7
|
32.0 %
|
Operating
earnings
|
$
24.5
|
10.0 %
|
$
17.1
|
7.2 %
|
$
78.2
|
8.4 %
|
$
98.6
|
9.7 %
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Restructuring
|
2.5
|
1.0 %
|
0.6
|
0.3 %
|
4.1
|
0.4 %
|
1.3
|
0.1 %
|
Integration
charges
|
1.8
|
0.7 %
|
0.5
|
0.2 %
|
4.8
|
0.5 %
|
2.5
|
0.2 %
|
Impairment
charges
|
4.7
|
1.9 %
|
1.8
|
0.8 %
|
4.7
|
0.5 %
|
1.8
|
0.2 %
|
Amortization of Knoll
purchased intangibles
|
2.1
|
0.9 %
|
2.1
|
0.9 %
|
8.4
|
0.9 %
|
8.3
|
0.8 %
|
Adjusted operating
earnings
|
$
35.6
|
14.5 %
|
$
22.1
|
9.3 %
|
$ 100.2
|
10.8 %
|
$ 112.5
|
11.1 %
|
|
|
|
|
|
|
|
|
|
Global
Retail
|
|
|
|
|
|
|
|
|
Net sales
|
$ 227.3
|
100.0 %
|
$ 244.9
|
100.0 %
|
$ 872.4
|
100.0 %
|
$
1,043.7
|
100.0 %
|
Gross margin
|
104.0
|
45.8 %
|
94.7
|
38.7 %
|
389.7
|
44.7 %
|
394.5
|
37.8 %
|
Total operating
expenses
|
89.8
|
39.5 %
|
105.5
|
43.1 %
|
347.3
|
39.8 %
|
410.0
|
39.3 %
|
Operating earnings
(loss)
|
$
14.2
|
6.2 %
|
$ (10.8)
|
(4.4) %
|
$
42.4
|
4.9 %
|
$ (15.5)
|
(1.5) %
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Restructuring
|
0.8
|
0.4 %
|
8.4
|
3.4 %
|
2.1
|
0.2 %
|
9.9
|
0.9 %
|
Integration
charges
|
—
|
— %
|
—
|
— %
|
—
|
— %
|
0.2
|
— %
|
Impairment
charges
|
4.0
|
1.8 %
|
3.5
|
1.4 %
|
4.0
|
0.5 %
|
40.7
|
3.9 %
|
Amortization of Knoll
purchased intangibles
|
0.6
|
0.3 %
|
0.6
|
0.2 %
|
2.6
|
0.3 %
|
4.1
|
0.4 %
|
Adjusted operating
earnings
|
$
19.6
|
8.6 %
|
$
1.7
|
0.7 %
|
$
51.1
|
5.9 %
|
$
39.4
|
3.8 %
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$ 11.9
|
— %
|
$ 16.1
|
— %
|
$ 52.1
|
— %
|
$ 60.4
|
— %
|
Operating
(loss)
|
$
(11.9)
|
— %
|
$ (16.1)
|
— %
|
$ (52.1)
|
— %
|
$ (60.4)
|
— %
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Integration
charges
|
—
|
— %
|
1.3
|
— %
|
0.1
|
— %
|
5.6
|
— %
|
Adjusted operating
(loss)
|
$
(11.9)
|
— %
|
$ (14.8)
|
— %
|
$ (52.0)
|
— %
|
$ (54.8)
|
— %
|
|
|
|
|
|
|
|
|
|
MillerKnoll,
Inc.
|
|
|
|
|
|
|
|
|
Net sales
|
$ 888.9
|
100.0 %
|
$ 956.7
|
100.0 %
|
$
3,628.4
|
100.0 %
|
$
4,087.1
|
100.0 %
|
Gross margin
|
352.4
|
39.6 %
|
354.7
|
37.1 %
|
1,419.5
|
39.1 %
|
1,430.0
|
35.0 %
|
Total operating
expenses
|
328.7
|
37.0 %
|
343.1
|
35.9 %
|
1,252.3
|
34.5 %
|
1,307.7
|
32.0 %
|
Operating
earnings
|
$
23.7
|
2.7 %
|
$
11.6
|
1.2 %
|
$ 167.2
|
4.6 %
|
$ 122.3
|
3.0 %
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
Restructuring
|
22.1
|
2.5 %
|
14.2
|
1.5 %
|
30.8
|
0.8 %
|
34.0
|
0.8 %
|
Integration
charges
|
5.1
|
0.6 %
|
5.3
|
0.6 %
|
23.5
|
0.6 %
|
18.0
|
0.4 %
|
Impairment
charges
|
16.8
|
1.9 %
|
19.7
|
2.1 %
|
16.8
|
0.5 %
|
56.9
|
1.4 %
|
Amortization of Knoll
purchased intangibles
|
5.9
|
0.7 %
|
5.9
|
0.6 %
|
23.9
|
0.7 %
|
25.3
|
0.6 %
|
Adjusted operating
earnings
|
$
73.6
|
8.3 %
|
$
56.7
|
5.9 %
|
$ 262.2
|
7.2 %
|
$ 256.5
|
6.3 %
|
B. Reconciliation of
Earnings per Share to Adjusted Earnings per Share
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
June 1, 2024
|
June 3, 2023
|
June 1, 2024
|
June 3, 2023
|
Earnings per
share - diluted
|
$
0.14
|
$
—
|
$
1.11
|
$
0.55
|
|
|
|
|
|
Add: Amortization of
Knoll purchased intangibles
|
0.08
|
0.08
|
0.32
|
0.33
|
Add: Integration
charges
|
0.07
|
0.07
|
0.31
|
0.24
|
Add: Restructuring
charges
|
0.30
|
0.19
|
0.42
|
0.45
|
Add: Impairment
charges
|
0.23
|
0.27
|
0.24
|
0.76
|
Tax impact on
adjustments
|
(0.15)
|
(0.20)
|
(0.32)
|
(0.48)
|
Adjusted earnings
per share - diluted
|
$
0.67
|
$
0.41
|
$
2.08
|
$
1.85
|
Weighted average shares
outstanding (used for calculating adjusted earnings per share) –
diluted
|
72,658,582
|
75,586,370
|
73,954,756
|
76,024,368
|
C. Reconciliation of
Gross Margin to Adjusted Gross Margin
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
June 1, 2024
|
June 3, 2023
|
June 1, 2024
|
June 3, 2023
|
Gross margin
|
$ 352.4
|
39.6 %
|
$ 354.7
|
37.1 %
|
$
1,419.5
|
39.1 %
|
$
1,430.0
|
35.0 %
|
Restructuring
charges
|
—
|
— %
|
(0.4)
|
— %
|
—
|
— %
|
(0.4)
|
— %
|
Impairment
charges
|
—
|
— %
|
—
|
— %
|
—
|
— %
|
15.7
|
0.4 %
|
Adjusted gross
margin
|
$ 352.4
|
39.6 %
|
$ 354.3
|
37.0 %
|
$
1,419.5
|
39.1 %
|
$
1,445.3
|
35.4 %
|
D. Reconciliation of
Operating Expenses to Adjusted Operating Expenses
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
June 1, 2024
|
June 3, 2023
|
June 1, 2024
|
June 3, 2023
|
Operating
expenses
|
$ 328.7
|
37.0 %
|
$ 343.1
|
35.9 %
|
$
1,252.3
|
34.5 %
|
$
1,307.7
|
32.0 %
|
Restructuring
charges
|
22.1
|
2.5 %
|
14.6
|
1.5 %
|
30.8
|
0.8 %
|
34.4
|
0.8 %
|
Integration
charges
|
5.1
|
0.6 %
|
5.3
|
0.6 %
|
23.5
|
0.6 %
|
18.0
|
0.4 %
|
Amortization of Knoll
purchased intangibles
|
5.9
|
0.7 %
|
5.9
|
0.6 %
|
23.9
|
0.6 %
|
25.3
|
0.6 %
|
Impairment
charges
|
16.8
|
1.9 %
|
19.7
|
2.1 %
|
16.8
|
0.5 %
|
41.2
|
1.0 %
|
Adjusted operating
expenses
|
$ 278.8
|
31.4 %
|
$ 297.6
|
31.1 %
|
$
1,157.3
|
31.9 %
|
$
1,188.8
|
29.1 %
|
E. Reconciliation of
Net Earnings to Adjusted EBITDA
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
June 1, 2024
|
June 3, 2023
|
June 1, 2024
|
June 3, 2023
|
Net income
|
$
9.9
|
1.1 %
|
$
(0.1)
|
— %
|
$ 82.3
|
2.3 %
|
$ 42.1
|
1.0 %
|
Income tax (benefit)
expense
|
(4.3)
|
(0.5) %
|
(6.6)
|
(0.7) %
|
14.7
|
0.4 %
|
4.5
|
0.1 %
|
Interest income and
expense
|
17.5
|
2.0 %
|
19.1
|
2.0 %
|
70.0
|
1.9 %
|
71.2
|
1.7 %
|
Depreciation and
amortization expense
|
43.5
|
4.9 %
|
60.0
|
6.3 %
|
155.1
|
4.3 %
|
175.9
|
4.3 %
|
Restructuring and
integration charges
|
37.5
|
4.2 %
|
17.4
|
1.8 %
|
60.7
|
1.7 %
|
71.3
|
1.7 %
|
Adjusted
EBITDA
|
$ 104.1
|
11.7 %
|
$
89.8
|
9.4 %
|
$ 382.8
|
10.6 %
|
$ 365.0
|
8.9 %
|
F. Reconciliation of
Net Earnings to Adjusted Bank Covenant EBITDA and Adjusted Bank
Covenant EBITDA Ratio (provided on a trailing twelve month
basis)
|
|
|
June 1, 2024
|
Net earnings
|
$
82.3
|
Income tax
expense
|
14.7
|
Depreciation
expense
|
117.5
|
Amortization
expense
|
37.6
|
Interest
expense
|
76.2
|
Other
adjustments(*)
|
95.8
|
Adjusted bank
covenant EBITDA
|
$
424.1
|
Total debt, less cash,
end of trailing period (includes outstanding LC's)
|
$
1,115.9
|
Net debt to adjusted
bank covenant EBITDA ratio
|
2.63
|
*Items indicated
represent Non-GAAP measurements; see the reconciliations of
Non-GAAP financial measures and related explanations
above.
|
G. Organic Sales
Growth by Segment
|
|
|
Three Months
Ended
|
|
June 1, 2024
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Net sales, as
reported
|
$
416.6
|
$
245.0
|
$
227.3
|
$
888.9
|
% change from
PY
|
(12.2) %
|
3.2 %
|
(7.2) %
|
(7.1) %
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Currency translation
effects (1)
|
(0.4)
|
1.5
|
1.4
|
2.5
|
Net sales,
organic
|
$
416.2
|
$
246.5
|
$
228.7
|
$
891.4
|
% change from
PY
|
(12.3) %
|
3.8 %
|
0.2 %
|
(5.2) %
|
|
|
|
Three Months
Ended
|
|
June 3, 2023
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Net sales, as
reported
|
$
474.4
|
$
237.4
|
$
244.9
|
$
956.7
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Fully and HAY
eCommerce
|
—
|
—
|
(16.7)
|
(16.7)
|
Net sales,
organic
|
$
474.4
|
$
237.4
|
$
228.2
|
$
940.0
|
(1) Currency
translation effects represent the estimated net impact of
translating current period sales and orders using the average
exchange rates applicable to the comparable prior year
period.
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
June 1, 2024
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Net Sales, as
reported
|
$
1,824.2
|
$
931.8
|
$
872.4
|
$
3,628.4
|
% change from
PY
|
(10.0) %
|
(8.4) %
|
(16.4) %
|
(11.2) %
|
Adjustments
|
|
|
|
|
Currency Translation
Effects (1)
|
(2.6)
|
(6.3)
|
(4.1)
|
(13.0)
|
Net Sales,
organic
|
$
1,821.6
|
$
925.5
|
$
868.3
|
$
3,615.4
|
% change from
PY
|
(8.3) %
|
(7.2) %
|
(8.6) %
|
(8.1) %
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
June 3, 2023
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Net Sales, as
reported
|
$
2,026.1
|
$
1,017.3
|
$
1,043.7
|
$
4,087.1
|
% change from
PY
|
|
|
|
|
Adjustments
|
|
|
|
|
Fully and HAY
eCommerce
|
—
|
—
|
(76.0)
|
(76.0)
|
Impact of extra week in
FY23
|
(38.7)
|
(19.6)
|
(18.2)
|
(76.5)
|
Net Sales,
organic
|
$
1,987.4
|
$
997.7
|
$
949.5
|
$
3,934.6
|
(1) Currency
translation effects represent the estimated net impact of
translating current period sales and orders using the average
exchange rates applicable to the comparable prior year
period.
|
H. Organic
Order Growth by Segment
|
|
|
Three Months
Ended
|
|
June 1, 2024
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Orders, as
reported
|
$
480.1
|
$
238.7
|
$
214.2
|
$
933.0
|
% change from
PY
|
5.7 %
|
(0.5) %
|
(6.2) %
|
1.1 %
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Currency translation
effects (1)
|
(1.7)
|
1.0
|
1.3
|
0.6
|
Orders,
organic
|
$
478.4
|
$
239.7
|
$
215.5
|
$
933.6
|
% change from
PY
|
5.3 %
|
— %
|
0.9 %
|
2.9 %
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
June 3, 2023
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Orders, as
reported
|
$
454.3
|
$
239.8
|
$
228.3
|
$
922.4
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Fully and HAY
eCommerce
|
—
|
—
|
(14.7)
|
(14.7)
|
Orders,
organic
|
$
454.3
|
$
239.8
|
$
213.6
|
$
907.7
|
(1) Currency
translation effects represent the estimated net impact of
translating current period sales and orders using the average
exchange rates applicable to the comparable prior year
period.
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
June 1, 2024
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Orders, as
reported
|
$
1,824.9
|
$
928.1
|
$
868.0
|
$
3,621.0
|
% change from
PY
|
(4.0) %
|
(1.7) %
|
(12.2) %
|
(5.6) %
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Currency translation
effects (1)
|
(7.7)
|
(7.4)
|
(5.0)
|
(20.1)
|
Orders,
organic
|
$
1,817.2
|
$
920.7
|
$
863.0
|
$
3,600.9
|
% change from
PY
|
(2.6) %
|
(0.5) %
|
(3.7) %
|
(2.3) %
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
June 3, 2023
|
|
Americas
Contract
|
International
Contract & Specialty
|
Global
Retail
|
Total
|
Orders, as
reported
|
$
1,901.3
|
$
944.0
|
$
989.0
|
$
3,834.3
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Impact of extra week in
FY23
|
(36.2)
|
(18.9)
|
(16.6)
|
(71.7)
|
Fully and HAY
eCommerce
|
—
|
—
|
(75.8)
|
(75.8)
|
Orders,
organic
|
$
1,865.1
|
$
925.1
|
$
896.6
|
$
3,686.8
|
(1) Currency
translation effects represent the estimated net impact of
translating current period sales and orders using the average
exchange rates applicable to the comparable prior year
period.
|
I. Consolidated
MillerKnoll Backlog
|
|
|
Q4 FY2024
|
MillerKnoll
backlog
|
$683.6
|
|
J. Sales and
Earnings Guidance - Upcoming Quarter
|
|
|
Company
Guidance
|
|
Q1 FY2025
|
Net sales
|
$872 million to $912
million
|
Gross margin
%
|
39.0% to
40.0%
|
Operating
expenses
|
$291 million to $301
million
|
Interest and other
expense, net
|
$16.8 million to $17.8
million
|
Effective tax
rate
|
20.5% -
22.5%
|
Adjusted earnings per
share - diluted
|
$0.38 -
$0.44
|
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