What changed in this filing

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Item 1. Business

2023-07-26 compared with 2022-07-26 · 45 added, 48 removed, 91 unchanged (51% of the section changed)

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(“Knoll”) in a cash and stock transaction valued at approximately $1.8 billion.

On November 1, 2021, Herman Miller, Inc.

changed its name to MillerKnoll, Inc., and the Company changed its ticker symbol on the Nasdaq Global Select Market to MLKN.

Powering the world's most dynamic design brands, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman® Leather, Fully®, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maars® Living Walls, Maharam®, Muuto®, naughtone®, and Spinneybeck®|FilzFelt®.

All of these companies are considered controlled subsidiaries, except for Maars of which the Company owns 48.2% of as of May 28, 2022.

Powering the world's most dynamic design brands, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman® Leather, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maars® Living Walls, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®.

All of these companies are considered controlled subsidiaries, except for Maars of which the Company owns 48.2% of as of June 3, 2023.

MillerKnoll's corporate offices are located at 855 East Main Avenue, PO Box 302, Zeeland, Michigan, 49464-0302 and its telephone number is 616 654 3000.

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Further information relating to principles of consolidation is provided in Note 1 to the Consolidated Financial Statements included in Item 8 of this report.

The Company has four reportable segments:

Americas Contract, International Contact, Global Retail and Knoll.

The Company has three reportable segments:

Americas Contract ("Americas"), International Contract & Specialty ("International & Specialty"), and Global Retail ("Retail").

The Company also reports a corporate category consisting primarily of unallocated corporate expenses.

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Our brands have led conversations on design for over 100 years, and we continue to drive our industry forward with visionary thinking and a purposeful approach.

The Company's principal business consists of the research, design, manufacture, selling and distribution of seating products, office furniture systems, other freestanding furniture elements, textiles, leather, felt, home furnishings and related services.

The Company's principal business consists of the research, design, manufacture, selling and distribution of seating products, furniture systems, other freestanding furniture elements, textiles, leather, felt, home furnishings and related services.

The Company's ingenuity and design excellence create award-winning products and services, which have made the Company a leader in the design and development of furniture, furniture systems, textiles, leather, felt and related technology and acoustical solutions.

This leadership is exemplified by the innovative concepts introduced by the Company in its broad array of product offerings.

The Company's furniture systems, seating, freestanding furniture, storage, casegoods, textile products, leather, felt, acoustic products and related services are used in (1) institutional environments including offices and related conference, lobby, and lounge areas and general public areas including transportation terminals;

(2) health/science environments including hospitals, clinics and other healthcare facilities;

(3) industrial and educational settings;

and (4) residential and other environments.

The Company's products are marketed worldwide by its own sales staff, independent dealers and retailers, via its eCommerce websites, and through its owned Herman Miller, Design Within Reach ("DWR"), HAY, Knoll, and Muuto retail stores and studios.

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Independent dealerships concentrate on the sale of MillerKnoll products and some complementary product lines of other manufacturers.

It is estimated that approximately 58.1% of the Company's sales in the fiscal year ended May 28, 2022, were made to or through independent dealers.

It is estimated that approximately 56.2% of the Company's sales in the fiscal year ended June 3, 2023, were made to or through independent dealers.

The remaining sales were made directly to end-users, including federal, state and local governments and several business organizations by the Company's own sales staff, retail channels, or independent retailers.

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This includes proprietary sales tools, interior design and product specification software, order entry and manufacturing scheduling and production systems, and direct connectivity to the Company's suppliers.

(2) health/science environments including hospitals, clinics and other healthcare facilities;

(3) industrial and educational settings;

and (4) residential and other environments.

Raw Materials

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These rights include patent, trademark, copyright and trade secrets, among other proprietary rights.

The Company also maintains a robust intellectual property enforcement program to protect its intellectual property rights against third party infringers.

The Company also maintains a robust intellectual property enforcement program to protect its intellectual property rights against third party infringements.

The Company and its subsidiaries hold many active utility and design patents in the United States as well as in a number of foreign countries.

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The Company considers the following trademarks and any associated stylized depictions of the word marks to be among its most important trademarks for distinguishing the Company, its subsidiaries and its goods from those of others:

MillerKnoll TM , Herman Miller®, Herman Miller Circled Symbolic M®, Knoll ®, Maharam®, Geiger®, Design Within Reach®, DWR®, HAY®, naughtone®, Nemschoff®, Aeron®, Mirra®, Embody®, Setu®, Sayl®, Cosm®, Caper®, Eames®, Knoll ® , KnollExtra ® , Knoll Luxe ® , KnollStudio ® , KnollTextiles ® , Edelman ® Leather, Spinneybeck ® Leather, Generation by Knoll ® , Regeneration by Knoll ® , MultiGeneration by Knoll ® , Remix ® , Holly Hunt ® , Vladimir Kagan ® , Muuto ®, Fully ®, Barcelona®, Womb®, as well as trademark registrations for trade dress and common law rights in trade dress for some of the Company’s significant product designs.

MillerKnoll TM , Herman Miller®, Herman Miller Circled Symbolic M®, Knoll ®, Maharam®, Geiger®, Design Within Reach®, DWR®, HAY®, NaughtOne®, Nemschoff®, Aeron®, Mirra®, Embody®, Setu®, Sayl®, Cosm®, Caper®, Eames®, Knoll ® , KnollExtra ® , Knoll Luxe ® , KnollStudio ® , KnollTextiles ® , Edelman ® Leather, Spinneybeck ® Leather, Generation by Knoll ® , Regeneration by Knoll ® , MultiGeneration by Knoll ® , Remix ® , Holly Hunt ® , Vladimir Kagan ® , Muuto ®, Barcelona®, and Womb®, as well as trademark registrations for trade dress and common law rights in trade dress for some of the Company’s significant product designs.

Working Capital Practices

Information concerning the Company's working capital levels relative to its sales volume can be found under the Executive Overview section in Item 7 of this report, “Management's Discussion and Analysis of Financial Condition and Results of Operations”.

Beyond this discussion, the Company does not believe that it or the industry in general has any special practices or special conditions affecting working capital items that are significant for understanding the Company's business.

Information concerning the Company's working capital levels relative to its sales volume can be found under Item 7 of this report, “Management's Discussion and Analysis of Financial Condition and Results of Operations.” Beyond this discussion, the Company does not believe that it or the industry in general has any special practices or special conditions affecting working capital items that are significant for understanding the Company's business.

Customer Base

The Company approximates that no single dealer accounted for more than 2% of the Company's net sales in the fiscal year ended May 28, 2022.

The Company approximates that no single dealer accounted fo r more than 4% of the Company's net sales in the fiscal year ended June 3, 2023.

The Company estimates that the largest single end-user customer accounted for $174.9 million, $114.4 million and $113.0 million of the Company's net sales in fiscal 2023, 2022, and 2021, respectively.

This represents approximately 3% of the Company's net sales in fiscal 2022 and 5% in 2021 and 2020.

The Company's ten largest customers in the aggregate accounted for approximately 11% of net sales in fiscal 2022 and 17% and 18% of net sales in fiscal 2021 and 2020, respectively.

This represents approximately 4% of the Company's net sales in fiscal 2023, 3% in fiscal 2022, and 5% in fiscal 2021.

The Company's ten largest customers in the aggregate accounted for approximately 14% of net sales in fiscal 2023, 11% in fiscal 2022, and 17% in fiscal 2021.

Backlog of Unfilled Orders

As of May 28, 2022, the Company's backlog of unfilled orders was $932.5 million.

As of June 3, 2023, the Company's backlog of unfilled orders was $698.0 million.

At May 28, 2022, the Company's backlog totaled $932.5 million.

The increase in backlog was due primarily to the Knoll acquisition, which contributed backlog of $293.3 million as well as from growth in order volume in excess of sales for the remainder of the business.

It is expected that substantially all of the orders forming the backlog at May 28, 2022 will be filled during the next fiscal year.

It is expected that substantially all of the orders forming the backlog at June 3, 2023 will be filled during the next fiscal year.

Many orders received by the Company are reflected in the backlog for only a short period while other orders request extended delivery dates and are carried in the backlog for up to one year.

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Government Contracts

Other than standard provisions contained in contracts with the United States Government, the Company does not believe that any significant portion of its business is subject to material renegotiation of profits or termination of contracts or subcontracts at the election of various government entities.

The Company sells to the U.S.

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All aspects of the Company's business are highly competitive.

From an office furniture perspective, the Company competes largely on design, product and service quality, speed of delivery and product pricing.

Although the Company is one of the largest office furniture manufacturers in the world, it competes with manufacturers that have significant resources and sales as well as many smaller companies.

The Company's most significant competitors are Haworth, HNI Corporation, Kimball International, Inc., and Steelcase Inc.

From a furniture perspective, the Company competes largely on design, product and service quality, speed of delivery and product pricing.

Although the Company is one of the largest furniture manufacturers in the world, it competes with manufacturers that have significant resources and sales as well as many smaller companies.

The Company's most significant competitors are Haworth, HNI Corporation, and Steelcase Inc.

The Company also competes in the home furnishings industry, primarily against national, regional and independent home furnishings retailers who market high-craft furniture to end-user customers and the interior design community.

These competitors include companies such as Crate & Barrel Holdings, Inc., Hive Modern, Restoration Hardware, Room & Board, Inc., Wayfair Inc., and Williams-Sonoma, Inc.

Similar to its office furniture product offerings, the Company competes primarily on design, product and service quality, speed of delivery and product pricing in this market.

On July 19, 2021, the acquisition of Knoll, Inc.

was completed.

For further discussion about the acquisition of Knoll, refer to Note 3 to the Consolidated Financial Statements included in Item 8 of this report.

Similar to its furniture product offerings, the Company competes primarily on design, product and service quality, speed of delivery and product pricing in this market.

Research, Design and Development

The Company believes it draws great competitive strength from its research, design and development programs.

Through research, the Company seeks to understand, define and clarify customer needs and problems they are trying to solve.

Through research, the Company seeks to understand, define and clarify customer needs and problems.

The Company designs innovative products and services that address customer needs and solve their problems.

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The Company monitors developments related to environmental matters and plans to respond to governmental initiatives in a timely and appropriate manner.

The Company’s commitment to the planet is embedded in its corporate strategy and will continue to develop as the Company outlines next steps in its sustainability strategy.

As part of this commitment, the Company focuses on operating its global footprint with minimal impact on the environment and designing products with materials and processes that are safe for both people and the planet.

The Company’s commitment to the planet is embedded in its corporate strategy and will continue to develop as the Company works to meet sustainability goals by 2030.

The Company is focused on operating its global footprint with minimal impact on the environment and designing products with materials and processes that are safe for both people and the planet.

Human Resources

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The Company's human resources group provides employee recruitment, education and development, as well as compensation planning and counseling.

Additionally, there have been no work stoppages or labor disputes in the Company's history.

As of May 28, 2022, approxima tely 2% of t he Company's employees are covered by collective bargaining agreements, most of whom are employees located in Wisconsin, the United Kingdom, Italy, and Brazil.

As of May 28, 2022, the Company had approximately 11,300 employees, which is approximately 3,100 higher since May 29, 2021 due to the acquisition of Knoll.

There have been no work stoppages or labor disputes in the Company's history.

As of June 3, 2023, approxim ately 4% of the Company's employees are covered by collective bargaining agreements, most of whom are employees located in the United States, the United Kingdom, Italy, and Brazil.

As of June 3, 2023, the Company had approximately 10,900 employees.

In addition to its employee workforce, the Company uses temporary labor to meet fluctuating demand in its manufacturing operations.

Diversity and Inclusion

At MillerKnoll, our differences contribute to our success.

We are committed to diversity, equity and inclusion ("DEI") and creating opportunities for people who come from diverse cultural and ethnic backgrounds, gender identities, LGBTQ+, people with differing abilities, those with military backgrounds, as well as those who are reentering the workforce for a variety of reasons.

We are committed to ensuring equity exists for all persons to thrive, and we focus on building diverse leadership across MillerKnoll.

Diversity, Equity, Inclusion, and Belonging

At MillerKnoll, we value and on a daily basis focus on being better together.

We believe that our unique differences contribute to our collective success.

We also respect that when we come together, we find more attributes that we share in common.

We are committed to diversity, equity, inclusion and belonging ("DEIB") and creating opportunities for all people.

This includes but is not limited to those who come from diverse cultural and ethnic backgrounds, from locations around the globe, various gender identities, LGBTQ+, people with differing abilities, those from military backgrounds, as well as those who have long

tenure with the Company or may be reentering the workforce for a variety of reasons.

We are committed to ensuring we support a culture of belonging to ensure all individuals thrive, and we focus on building diverse leadership across MillerKnoll.

We believe that embracing diverse perspectives contributes to an inclusive workplace and strengthens the communities where we live and work.

We continue to build DEI into our everyday practices by focusing on:

We continue to build inclusivity into our everyday practices by focusing on:

• An ongoing commitment to educate ourselves and integrate cultural competency across the organization;

• Recruiting, developing, retaining, and promoting diverse talent through targeted plans that drive better results in this area

• Driving a sense of belonging.

We want every employee to be fully seen, heard, understood and to feel connected to MillerKnoll in meaningful ways that matter to each person;

• Recruiting, developing, retaining, and promoting inclusive and diverse talent through concerted efforts that drive better results;

• Implementing and taking action on appropriate metrics and measures to hold ourselves accountable to our commitments.

The Company's policy is to competitively compensate all employees for their contributions to MillerKnoll, Inc.

and to appropriately reward and motivate employees to deliver our business goals.

We do this, in part, by closely monitoring and benchmarking compensation matters and working to ensure that our programs provide our associates with the right features to provide for their families and prepare for retirement.

We provide competitive health and welfare benefits and retirement savings plans (401k), with matching employer contributions.

The Company's policy is to competitively compensate all employees for their contributions and to appropriately reward and motivate employees to deliver our business goals.

We do this, in part, by closely monitoring and benchmarking compensation matters and working to ensure that our programs provide our employees with the right features to provide for their families and prepare for retirement.

We provide competitive health and welfare benefits and retirement savings plans (401k).

Retention of our talent is exceedingly important and drives how we design our programs.

Information about International Operations

International Operations

The Company's sales in international markets are made primarily to office/institutional customers and residential retail customers.

Foreign sales consist mostly of office furniture products such as Aeron®, Mirra®, Sayl®, Embody®, Layout Studio®, Imagine Desking System®, Ratio®, Cosm®, Tone®, Generation by Knoll®, and other seating and storage products and ergonomic accessories such as About A Chair®, Palissade®, Eero Saarinen designs, Barcelona®, and the Flo® monitor arm.

The Company conducts business in the following major international markets:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business