MillerKnoll(MLKN) - 2025 Q1 - Quarterly Results

Financial Performance - Consolidated net sales for Q1 FY2025 were $861.5 million, a decrease of 6.1% year-over-year[5] - The company reported a diluted loss per share of $0.02, compared to earnings of $0.22 in the same period last year[6] - Adjusted earnings per share decreased to $49.9 million, down from $55.4 million, indicating a decline of 9.9%[34] - For Q2 FY2025, net sales are expected to range between $950 million and $990 million, with adjusted diluted earnings projected between $0.51 and $0.57 per share[16] - Organic sales growth showed a decline of 6.1% year-over-year, with total net sales reported at $861.5 million for the three months ended August 31, 2024[39] - Adjusted earnings per share for the same period were $0.36, slightly down from $0.37 in the prior year[35] Orders and Backlog - Orders in Q1 increased by 2.4% to $935.9 million, with organic growth of 3.5%, driven by a 5.2% increase in Americas Contract orders[2] - Ending backlog rose to $758.0 million, reflecting a 9.2% increase from the previous year[2] - The backlog for MillerKnoll as of Q1 FY2025 was reported at $758.0 million[44] Segment Performance - Americas Contract segment net sales were $454.6 million, down 7.3% year-over-year, while operating margin decreased to 3.8%[8] - International Contract and Specialty segment net sales were $213.5 million, down 6.5% year-over-year, but orders increased by 2.7%[10] - Adjusted operating earnings for the Americas segment were $43.3 million, down from $52.0 million, reflecting a decrease of 16.3%[34] - Operating earnings for the Global Retail segment increased to $5.5 million, up from $3.1 million, showing a growth of 77.4%[34] Expenses and Margins - Operating expenses for the quarter were $321.1 million, up 1.0% from the prior year, while adjusted operating expenses decreased by 5.2% to $286.9 million[6] - Gross margin remained flat at 39.0%, despite lower revenue levels[5] - Gross margin for the International Contract & Specialty segment improved to 44.5%, compared to 42.4% in the previous period[34] - Operating expenses increased to $321.1 million, resulting in an operating expense percentage of 37.3%, up from 34.6% in the prior year[37] Assets and Liabilities - Total current assets increased slightly to $1,071.8 million from $1,069.6 million[24] - Total liabilities increased to $2,610.0 million from $2,584.6 million, marking a rise of 0.98%[25] - The company reported a total of $4,019.1 million in assets, a slight decrease from $4,043.6 million[24] Cash Flow and Debt - Cash and cash equivalents decreased to $209.7 million from $230.4 million, a decline of 8.9%[24] - The trailing twelve-month adjusted bank covenant EBITDA was $412.5 million, with total debt less cash at $1,170.7 million, resulting in a net debt to adjusted EBITDA ratio of 2.84[38] Tax Rate - The effective tax rate for the three months ended August 31, 2024, was 66.2%, significantly higher than 24.4% in the prior year[43] Integration Charges - Integration charges for the Americas segment were $22.5 million, compared to $3.1 million in the previous period, reflecting a significant increase[34] Guidance and Future Outlook - The company anticipates a shift in holiday promotional periods, potentially moving $17 million to $23 million of net sales from Q2 to Q3 FY2025[17]