Knoll Inc (KNL) 10-Q Quarterly Report August 2020

EAST GREENVILLE, PA, July 23, 2020 -- Knoll, Inc. (NYSE: KNL), a leading designer and manufacturer of furnishings, textiles and fine leathers for the workplace and home, today announced results for the second quarter ended June 30, 2020.

Second Quarter Highlights Versus Prior Year

Net Sales decreased 25.4% to $274.1M

GAAP Gross Margin decreased 340 bps to 34.9%

Adjusted Gross Margin decreased 310 bps to 35.2%

GAAP Net Earnings decreased $31.2M to ($9.6M) or (3.5)% of net sales

Adjusted EBITDA decreased $22.8M to $25.6M or 9.3% of net sales

GAAP Diluted EPS decreased $0.64 to ($0.20)

Adjusted Diluted EPS decreased $0.29 to $0.19

This release contains non-GAAP financial measures. Please refer to the Reconciliations of Non-GAAP Financial Measures section for reconciliations to the most directly comparable GAAP measure.

To Our Fellow Shareholders:

The second quarter of 2020 was unlike any quarter we have ever experienced. It was a true test of our people, culture, agility and strategy. In that context, we are pleased to report solidly profitable adjusted second quarter results as well as the progress we have made responding to the Covid-19 pandemic and its impact on our communities, our people and our clients.

Our Covid Game Plan

From the start of the pandemic, our focus was four-fold.

•First, keep our people around the world as safe as possible while maintaining as much of our operational capabilities as government mandates and safe working practices would allow.

•Second, protect our financial position, maximizing liquidity and scaling the business to ensure we remained profitable and cash flow positive.

•Third, lean into the marketplace challenges in front of us with the thought leadership and product support to help our workplace clients retrofit and reimagine their offices for return to work and work from home.

•And fourth, leverage our brand reputation, broad product offering, multichannel platform and marketing capabilities in the residential space – in short, taking advantage of the pivot to work from home and the increased focus on residential life resulting from our working, schooling and exercising where we live.

The following information was filed by Knoll Inc (KNL) on Thursday, July 23, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Knoll Inc's 10-Q Quarterly Report:

Financial - Expense Highlight
The change in the effective rate at which a tax benefit or expense was recognized for the three months ended June 30, 2020 and 2019, was primarily driven by the period over period decrease in pretax book income and the impact of the CARES Act (specifically, the rate differential on the carryback of NOLs to years where the U.S. federal income tax rate was 35.0%, compared to the current rate of 21.0%).

Financial - Expense Highlight
The change in the effective rate at which a tax benefit or expense was recognized for the six months ended June 30, 2020 and 2019, was primarily driven by the period over period decrease in pretax book income and the impact of the CARES Act (specifically, the rate differential on the carryback of NOLs to years where the U.S. federal income tax rate was 35.0%, compared to the current rate of 21.0%).
Financial - Income Highlight
The Company recognized an income tax benefit for the three months ended June 30, 2020 at an effective rate of 39.7%, compared to income tax expense at an effective rate of 25.1% for the three months ended June 30, 2019.
Financial - Income Highlight
The Company recognized an income tax benefit for the six months ended June 30, 2020 at an effective rate of 115.6%, compared to income tax expense at an effective rate of 25.8% for the six months ended June 30, 2019.
Financial - Earnings Highlight
We aim to increase profitability with these product initiatives, operational improvements we have discussed, and investments in our physical and technological infrastructure.
Revenue - Product
Our efforts to diversify our...Read more
Financial - Expense
The decrease was due primarily...Read more
Financial - Expense
Interest Expense Interest expense for...Read more
Financial - Expense
Interest Expense Interest expense for...Read more
Financial - Shares
Additional factors impacting the change...Read more
Financial - Shares
Additional factors impacting the change...Read more
Other - Other
Forward-looking Statements This quarterly report...Read more
Other - Other
Our capital expenditures are primarily...Read more
M & A - Other
We expect to continue to...Read more
Financial - Expense
These costs were partially offset...Read more
Financial - Expense
These costs were partially offset...Read more
Other - Other
In July 2020, the Company...Read more
Financial - Expense
The decrease was due primarily...Read more
Financial - Earnings
Operating (loss) profit as a...Read more
Financial - Cash Flow
We believe that existing cash...Read more
Other - Other
The extent of the impact...Read more
Other - Other
Our capital expenditures are reflective...Read more
Other - Other
We believe we are well...Read more
Other - Other
As a result, we are...Read more
M & A - Other
The acquisition of Fully in...Read more
Revenue - Product
The decrease in the Office...Read more
Revenue - Product
The decrease in the Office...Read more
M & A - Other
During the three months ended...Read more
M & A - Other
During the six months ended...Read more
M & A - Other
Following these actions, we continue...Read more
Financial - Expense
The remediation costs and our...Read more
Financial - Earnings
The decrease in Operating profit...Read more
Financial - Earnings
The decrease in Operating profit...Read more
Financial - Income
The decrease in other income...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Knoll Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Ticker: KNL
CIK: 1011570
Form Type: 10-Q Quarterly Report
Accession Number: 0001011570-20-000042
Submitted to the SEC: Fri Aug 07 2020 2:50:18 PM EST
Accepted by the SEC: Fri Aug 07 2020
Period: Tuesday, June 30, 2020
Industry: Miscellaneous Furniture And Fixtures