Financial Data and Key Metrics Changes - Non-GAAP earnings per share increased by 7% year over year, reaching $1.10, driven by a record third quarter non-GAAP operating margin of 10.8% [3][5] - Total net sales in the third quarter increased by 3% organically compared to the same period last year [5] - Non-GAAP operating margin expanded by 10 basis points year over year, marking the highest EBIT margin for the third quarter [5] Business Line Data and Key Metrics Changes - In the workplace furnishings segment, organic net sales increased by 3% year over year, with a non-GAAP segment operating profit margin exceeding 12% [5][6] - Residential building products revenue remained roughly unchanged year over year, with new construction revenue down slightly and remodel retrofit sales growing modestly [6][7] - Orders in the residential building products segment increased by 2% year over year, with remodel retrofit orders up mid-single digits [9] Market Data and Key Metrics Changes - Builder sentiment has weakened recently, reflecting elevated interest rates and weaker consumer confidence, impacting housing trends [9][10] - The office space market is showing signs of recovery, with net absorption of office space expected to be the highest since 2019, indicating improved demand for office furniture [12][13] Company Strategy and Development Direction - The company remains focused on margin expansion efforts and continued revenue growth while investing for future growth [8][10] - The pending acquisition of Steelcase is expected to create synergies of $120 million and accretion of $1.20 per share when fully mature, enhancing the company's strategic position [19][20] - The company is optimistic about long-term market fundamentals in residential building products, despite a challenging new construction environment [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit non-GAAP EPS growth for the fourth consecutive year, despite ongoing macroeconomic uncertainties [18] - The company anticipates strong results driven by margin expansion and continued volume growth, with a positive outlook for both workplace furnishings and residential building products [8][16] - Management highlighted the importance of maintaining financial discipline while pursuing revenue growth amid macro-related risks [18] Other Important Information - The company expects fourth quarter revenue in workplace furnishings to increase at a high single-digit rate year over year, with residential building products also projected to grow at a high single-digit rate [16][17] - The anticipated strong free cash flow will aid in quickly deleveraging the balance sheet post-acquisition [19] Q&A Session Summary Question: Is the $1.20 of accretion from Steelcase considering just the synergies outlined? - Yes, the $1.20 in accretion is based on the $120 million in synergies previously discussed [22] Question: Where are you in terms of the $0.75 to $0.80 from KI and Mexico? - The company expects to recognize $45 to $50 million between 2025 and 2026, with more expected in 2025 than 2026 [25] Question: Can you compare your full-year guidance now versus a few months ago? - Revenue expectations remain in line with prior expectations, but there is some pressure on product mix and timing of investments [32] Question: How much runway do you have to outperform the market in residential building products? - The company believes it can outperform the market due to ongoing investments and strong performance in specific product lines [34] Question: What risks are associated with integrating Steelcase? - The company plans to maintain dealer partnerships and brand distribution intact, which should allow it to participate in any demand upswing [38]