MillerKnoll(US:MLKN)2026-03-30 21:29Financial Performance - Net sales for the three months ended February 28, 2026, were $926.6 million, a 5.7% increase from $876.2 million for the same period last year[8] - Gross margin increased to $352.9 million for the three months ended February 28, 2026, compared to $332.4 million for the same period last year, reflecting a gross margin percentage improvement[8] - Operating earnings for the nine months ended February 28, 2026, were $146.9 million, a significant recovery from an operating loss of $4.5 million for the same period last year[8] - Net earnings attributable to MillerKnoll, Inc. for the three months ended February 28, 2026, were $23.5 million, compared to a net loss of $12.7 million for the same period last year[8] - For the nine months ended February 28, 2026, net earnings increased to $20.2 million from a previous period, with a subsequent increase to $24.2 million in the following quarter[13] - Total revenue for the three months ended February 28, 2026, was $926.6 million, an increase from $876.2 million for the same period in 2025, representing a growth of 5.4%[28] - For the nine months ended February 28, 2026, total revenue reached $2,837.5 million, compared to $2,708.1 million in the prior year, reflecting an increase of 4.8%[28] Cash and Liquidity - Cash and cash equivalents decreased to $174.6 million as of February 28, 2026, from $193.7 million as of May 31, 2025[9] - The total cash and cash equivalents at the end of the period decreased to $174.6 million from $193.7 million at the beginning of the period, reflecting a net decrease of $19.1 million[12] - The company reported a net cash provided by operating activities of $135.1 million for the nine months ended February 28, 2026, compared to $138.4 million for the same period last year[11] - The company experienced a net cash used in financing activities of $83.8 million, compared to $127.6 million in the previous period[12] - The Company reported a net cash position of $0.9 million as of February 28, 2026, down from $1.4 million as of May 31, 2025[34] Assets and Liabilities - Total assets increased slightly to $3,951.6 million as of February 28, 2026, compared to $3,950.2 million as of May 31, 2025[9] - Total liabilities decreased to $2,553.2 million as of February 28, 2026, from $2,615.1 million as of May 31, 2025[9] - The carrying value of total debt as of February 28, 2026, was $1,310.1 million, with a fair value of $1,318.8 million[60] - The Company has a total debt of $1,310.1 million as of February 28, 2026, down from $1,337.0 million on May 31, 2025[86] Shareholder Information - The company declared dividends of $0.1875 per share, totaling $13.1 million for the period[13] - The total number of common shares outstanding as of February 28, 2026, was 68,383,040, reflecting a slight increase from 68,249,980 shares[13] - Basic earnings per share for the three months ended February 28, 2026, was $0.34, compared to a loss of $(0.19) for the same period in 2025[53] Operational Efficiency - Capital expenditures for the nine months ended February 28, 2026, were $83.4 million, an increase from $68.1 million for the same period last year[11] - The company plans to continue focusing on restructuring and integration efforts to improve operational efficiency and profitability moving forward[8] - Restructuring charges totaled $2.2 million and $4.2 million for the three and nine months ended February 28, 2026, respectively[118] - The company recorded a total of $144.4 million in pre-tax integration expenses related to the Knoll Integration program, with no future costs expected[115] Market Segments - North America Contract revenue for the three months ended February 28, 2026, was $488.6 million, up from $468.2 million in the same period last year, a growth of 2.9%[28] - International Contract revenue increased to $156.9 million for the three months ended February 28, 2026, compared to $145.5 million in the prior year, marking a growth of 7.7%[28] - Global Retail revenue for the three months ended February 28, 2026, was $281.1 million, a rise of 7.1% from $262.5 million in the previous year[28] - The Lifestyle product category generated $217.1 million in revenue during the three months ended February 28, 2026, compared to $201.5 million in the same period last year, an increase of 7.6%[28] Goodwill and Impairment - Goodwill increased to $1,167.2 million as of February 28, 2026, from $1,152.4 million at the end of the previous fiscal year[36] - The company recognized $37.7 million in non-cash impairment charges related to the Knoll and Muuto trade names during Q3 of fiscal year 2025[50] - A decrease in operating margin of 100 basis points would result in impairment of $3.0 million for the Coverings reporting unit[47] - The company reassigned $26.1 million of goodwill from the Americas Contract reporting unit to the International Contract reporting unit[48] Tax and Compliance - The effective tax rates were 19.2% for the three months ended February 28, 2026, compared to 88.3% for the same period in 2025[56] Financial Instruments and Debt Management - The Company entered into an interest rate swap agreement in September 2016 for a notional amount of $150.0 million, converting a LIBOR-based floating interest rate to a 1.910% fixed interest rate[72] - A second interest rate swap agreement was established in June 2017 for a notional amount of $75.0 million, locking in a fixed interest rate of 2.348%[73] - In January 2022, the Company executed a third interest rate swap for $575.0 million, fixing the interest rate at 1.650%[74] - A fourth interest rate swap agreement was entered into in February 2023 for $150.0 million, with a fixed interest rate of 3.950%[75] - The Company’s interest rate swap agreements were amended in February 2023 to replace LIBOR with a Term SOFR rate, resulting in modified fixed rates of 1.910%, 2.348%, and 1.650% for previous swaps[78] Other Comprehensive Income - Other comprehensive income for the nine months ended February 28, 2026, was reported at $12.7 million, with a subsequent loss of $12.9 million in the following quarter[13] - The company’s accumulated other comprehensive loss decreased to $(64.9) million as of February 28, 2026, from $(82.2) million[13] - The Company recognized a loss of $3.9 million in other comprehensive income for the three months ended February 28, 2026, and a total loss of $12.9 million for the nine months ended[79] - The expected gain to be reclassified from Accumulated other comprehensive income into earnings in the next twelve months is $11.6 million, net of tax $8.8 million[79]