What changed in this filing

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Item 1. Financial Statements

2024-10-09 compared with 2024-04-10 · 154 added, 279 removed, 453 unchanged (49% of the section changed)

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Condensed Consolidated Statements of Comprehensive Income

(Dollars in millions, except share data) Three Months Ended Nine Months Ended

(Unaudited) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

(Dollars in millions, except share data) Three Months Ended

(Unaudited) August 31, 2024 September 2, 2023

Net sales $ 861.5 $ 917.7

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Selling, general and administrative 298.4 290.5

Impairment charges — 21.5 — 21.5

Restructuring expense — 5.2

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Other (income) expense, net ( 1.4 ) 2.2

Earnings before income taxes and equity income 27.5 1.6 92.9 56.9

Income tax expense 4.4 0.5 19.0 11.1

Equity (loss) income from nonconsolidated affiliates, net of tax — — ( 0.3 ) 0.2

Net earnings 23.1 1.1 73.6 46.0

Net earnings attributable to redeemable noncontrolling interests 0.9 0.7 1.2 3.8

Net earnings attributable to MillerKnoll, Inc.

(Loss) earnings before income taxes and equity income ( 1.7 ) 21.1

Income tax (benefit) expense ( 1.1 ) 5.1

Equity income from nonconsolidated affiliates, net of tax 0.1 0.1

Net (loss) earnings ( 0.5 ) 16.1

Net earnings (loss) attributable to redeemable noncontrolling interests 0.7 ( 0.6 )

Net (loss) earnings attributable to MillerKnoll, Inc.

$ ( 1.2 ) $ 16.7

Earnings per share - basic $ 0.31 $ 0.01 $ 0.98 $ 0.56

Earnings per share - diluted $ 0.30 $ 0.01 $ 0.97 $ 0.56

(Loss) earnings per share - basic $ ( 0.02 ) $ 0.22

(Loss) earnings per share - diluted $ ( 0.02 ) $ 0.22

Other comprehensive (loss) income, net of tax

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Other comprehensive (loss) income, net of tax $ ( 5.8 ) $ 11.6

Comprehensive income 18.6 8.7 80.1 47.6

Comprehensive income attributable to redeemable noncontrolling interests 0.9 0.7 1.2 3.8

Comprehensive income attributable to MillerKnoll, Inc.

Comprehensive (loss) income ( 6.3 ) 27.7

Comprehensive income (loss) attributable to redeemable noncontrolling interests 0.7 ( 0.6 )

Comprehensive (loss) income attributable to MillerKnoll, Inc.

$ ( 7.0 ) $ 28.3

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(Dollars in millions, except share data)

(Unaudited) March 2, 2024 June 3, 2023

(Unaudited) August 31, 2024 June 1, 2024

Current Assets:

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Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Nine Months Ended

(Unaudited) March 2, 2024 March 4, 2023

(Dollars in millions) Three Months Ended

(Unaudited) August 31, 2024 September 2, 2023

Cash Flows from Operating Activities:

Net earnings $ 73.6 $ 46.0

Net (loss) earnings $ ( 0.5 ) $ 16.1

Adjustments to reconcile net earnings to net cash provided by operating activities:

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Amortization of deferred financing costs 1.2 1.2

Loss on sale of equity method investment 0.4 —

Deferred taxes 0.7 —

Restructuring expense — 5.2

Impairment — 36.6

Decrease in current assets 100.0 5.9

(Increase) decrease in current assets ( 20.6 ) 73.3

(Decrease) in current liabilities ( 12.8 ) ( 4.8 )

(Decrease) in non-current liabilities ( 2.1 ) ( 5.3 )

Other, net 9.4 ( 3.7 )

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Advances of notes receivable ( 2.3 ) ( 6.5 )

Proceeds from the sale of equity method investment 3.5 —

Collection of notes receivable 2.5 0.5

Capital expenditures ( 22.6 ) ( 19.9 )

Proceeds from loan on cash surrender value of life insurance — 13.5

Other, net 0.1 ( 0.4 )

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Effect of Exchange Rate Changes on Cash and Cash Equivalents 0.8 0.5

Net Increase (Decrease) in Cash and Cash Equivalents 0.1 ( 13.2 )

Net Decrease in Cash and Cash Equivalents ( 20.7 ) ( 6.0 )

Cash and Cash Equivalents, Beginning of Period 230.4 223.5

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Condensed Consolidated Statements of Stockholders' Equity

Nine Months Ended March 2, 2024

Three Months Ended August 31, 2024

(Dollars in millions, except share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Deferred Compensation Plan MillerKnoll, Inc.

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June 1, 2024 70,377,692 $ 14.1 $ 725.3 $ 738.4 $ ( 92.7 ) $ — $ 1,385.1

Net earnings — — — 16.7 — — 16.7

Other comprehensive income, net of tax — — — — 11.6 — 11.6

Stock-based compensation expense ( 983 ) — 6.4 — — — 6.4

Restricted and performance stock units released 332,566 0.1 0.1 — — — 0.2

Employee stock purchase plan issuances 45,107 — 0.9 — — — 0.9

Repurchase and retirement of common stock ( 1,670,135 ) ( 0.3 ) ( 31.7 ) — — — ( 32.0 )

Dividends declared ($ 0.1875 per share)

— — — ( 14.1 ) — — ( 14.1 )

September 3, 2023 74,405,225 $ 14.9 $ 812.2 $ 678.7 $ ( 83.5 ) $ — $ 1,422.3

Net earnings — — — 33.5 — — 33.5

Other comprehensive income, net of tax — — — — ( 0.6 ) — ( 0.6 )

Stock-based compensation expense — — 5.3 — — — 5.3

Exercise of stock options 19,429 — 0.4 — — — 0.4

Restricted and performance stock units released 11,887 — — — — — —

Employee stock purchase plan issuances 31,669 — 1.3 — — — 1.3

Repurchase and retirement of common stock ( 1,390,551 ) ( 0.3 ) ( 27.7 ) — — — ( 28.0 )

Dividends declared ($ 0.1875 per share)

— — — ( 13.7 ) — — ( 13.7 )

Other — — — 0.1 — — 0.1

December 2, 2023 73,077,659 $ 14.6 $ 791.5 $ 698.6 $ ( 84.1 ) $ — $ 1,420.6

Net earnings — — — 22.2 — — 22.2

Net (loss) — — — ( 1.2 ) — — ( 1.2 )

Other comprehensive income, net of tax — — — — ( 5.8 ) — ( 5.8 )

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Repurchase and retirement of common stock ( 1,544,733 ) ( 0.3 ) ( 43.7 ) — — — ( 44.0 )

Directors' fees 31,379 — 0.8 — — — 0.8

Dividends declared ($ 0.1875 per share)

— — — ( 13.2 ) — — ( 13.2 )

Other — — — 0.1 — — 0.1

March 2, 2024 71,736,286 $ 14.3 $ 758.1 $ 707.1 $ ( 88.6 ) $ — $ 1,390.9

Nine Months Ended March 4, 2023

August 31, 2024 69,328,400 $ 13.9 $ 693.1 $ 724.0 $ ( 98.5 ) $ — $ 1,332.5

Three Months Ended September 2, 2023

(Dollars in millions, except share data) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Deferred Compensation Plan MillerKnoll, Inc.

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(Unaudited) Shares Amount

May 28, 2022 75,824,241 $ 15.2 $ 825.7 $ 693.3 $ ( 107.1 ) $ — $ 1,427.1

June 3, 2023 75,698,670 $ 15.1 $ 836.5 $ 676.1 $ ( 95.1 ) $ — $ 1,432.6

Net earnings — — — 16.7 — — 16.7

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Stock-based compensation expense ( 983 ) — 6.4 — — — 6.4

Exercise of stock options 43,469 — 1.0 — — — 1.0

Restricted and performance stock units released 332,566 0.1 0.1 — — — 0.2

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— — — ( 14.1 ) — — ( 14.1 )

Other — — 0.5 0.5 — — 1.0

September 2, 2023 74,405,225 $ 14.9 $ 812.2 $ 678.7 $ ( 83.5 ) $ — $ 1,422.3

Net earnings — — — 16.0 — — 16.0

Other comprehensive income, net of tax — — — — 51.8 — 51.8

Stock-base compensation expense ( 2,476 ) — 5.5 — — — 5.5

Restricted and performance stock units released 8,763 — 0.1 — — — 0.1

Employee stock purchase plan issuances 44,010 — 0.7 — — — 0.7

Repurchase and retirement of common stock ( 3,222 ) — ( 0.1 ) — — — ( 0.1 )

Dividends declared ($ 0.1875 per share)

— — — ( 14.3 ) — — ( 14.3 )

Other — — 0.2 ( 0.4 ) — — ( 0.2 )

December 3, 2022 75,603,106 $ 15.1 $ 825.7 $ 706.6 $ ( 113.1 ) $ — $ 1,434.3

Net earnings — — — 0.4 — — 0.4

Other comprehensive income, net of tax — — — — 7.6 — 7.6

Stock-based compensation expense ( 15,563 ) — 4.8 — — — 4.8

Restricted and performance stock units released 44,926 — 0.3 — — — 0.3

Employee stock purchase plan issuances 36,375 — 0.8 — — — 0.8

Repurchase and retirement of common stock ( 69,927 ) — ( 1.6 ) — — — ( 1.6 )

Deferred compensation plan — — 0.6 — — — 0.6

Directors Fees 27,784 — 0.6 — — — 0.6

Dividends declared ($ 0.1875 per share)

— — — ( 14.3 ) — — ( 14.3 )

Other — — ( 0.2 ) 0.6 — — 0.4

March 4, 2023 75,626,701 $ 15.1 $ 831.0 $ 693.3 $ ( 105.5 ) $ — $ 1,433.9

See accompanying notes to Condensed Consolidated Financial Statements.

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The Company's products are sold primarily through the following channels:

independent contract office furniture dealers, direct customer sales, owned and independent retailers, direct-mail catalogs, and the Company's eCommerce platforms.

independent contract office furniture dealers, direct customer sales, owned and independent retailers, and the Company's eCommerce platforms.

MillerKnoll is a collective of dynamic brands that comes together to design the world we live in.

A global leader in design, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders ™ , DatesWeise r™ , Design Within Reach®, Edelman®, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®.

A global leader in design, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman®, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®.

MillerKnoll represents over 100 years of design research and exploration in service of humanity.

MillerKnoll generates insights, pioneers innovations, and champions ideas that empower our brands and our people to realize their ambitions.

The Company is united by a belief in design as a tool to create positive impact and shape a more sustainable, caring, and beautiful future for all people and the planet.

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Unless otherwise noted or indicated by the context, all references to "MillerKnoll," "we," "our," "Company" and similar references are to MillerKnoll, Inc., its predecessors, and controlled subsidiaries.

The accompanying unaudited Condensed Consolidated Financial Statements, taken as a whole, contain all adjustments that are of a normal recurring nature necessary to present fairly the financial position of the Company as of March 2, 2024.

Operating results for the three and nine months ended March 2, 2024 are not necessarily indicative of the results that may be expected for the year ending June 1, 2024 ("fiscal 2024").

Operating results for the three months ended August 31, 2024, are not necessarily indicative of the results that may be expected for the year ending May 31, 2025 ("fiscal 2025").

These Condensed Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 1, 2024 ("fiscal 2024").

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The Company's fiscal year is the 52 or 53 week period ending on the Saturday closest to May 31.

The fiscal year ending June 1, 2024 contains 52 weeks, while the fiscal year ended June 3, 2023 contained 53 weeks.

The first quarter of fiscal 2024 contained 13 weeks and the first quarter of fiscal 2023 contained 14 weeks.

Investments in Nonconsolidated Affiliates

On October 30, 2023, the Company sold its 48.2 % investment in Global Holdings Netherlands B.V., which owns 100 % of Maars Holding B.V.

("Maars") for total purchase consideration of $ 5.9 million.

As part of this transaction, we received cash proceeds of $ 3.5 million at closing, a $ 1.4 million receivable under a vendor loan, and $ 1.0 million of cash held in an escrow account to secure the representations and warranties made to the purchaser.

As a result of the sale, a loss of $ 0.4 million was recorded in Equity (loss) income from nonconsolidated affiliates, net of tax during the nine months ended March 2, 2024.

The fiscal year ending May 31, 2025 ("fiscal 2025") and the fiscal year ended June 1, 2024 ("fiscal 2024") both contain 52 weeks.

Cash and Cash Equivalents

Certain of the Company’s subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements.

As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant.

Under the terms of the master netting arrangement, the financial institution has the right, ability, and intent to offset a positive balance in one account against an overdrawn amount in another account.

Amounts in each of the accounts are unencumbered and unrestricted with respect to use.

As such, the net cash balance related to this pooling arrangement is included in Cash and cash equivalents in the accompanying Consolidated Balance Sheets.

The Company’s net cash pool position consisted of the following:

(In millions) August 31, 2024 June 1, 2024

Gross cash position $ 53.6 $ 26.6

cash borrowings ( 52.9 ) ( 23.0 )

Net cash position $ 0.7 $ 3.6

Recently Issued Accounting Standards

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In November 2023, the FASB issued this ASU to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

The ASU becomes effective for the Company beginning with its annual period ending May 31, 2025, and interim periods beginning with the first quarter of fiscal 2026.

The ASU will not impact the financial condition, results of operations, or cash flows of the Company.

The Company is currently evaluating the impact of this guidance on the notes to the consolidated financial statements.

ASU 2023-09, Income Taxes (Topic 740):

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Revenue disaggregated by contract type is provided in the table below:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Single performance obligation

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Revenue disaggregated by product type and reportable segment is provided in the table below:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Americas Contract:

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Total $ 861.5 $ 917.7

In the current year, certain products were reclassified within the Performance Seating, Lifestyle, and Other categories based on management's internal reporting of the performance of these product lines.

The prior year has been restated to reflect these changes.

Refer to Note 14 of the Condensed Consolidated Financial Statements for further information related to our reportable segments.

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These payments represent contract liabilities and are included within the caption “Customer deposits” in the Condensed Consolidated Balance Sheets.

During the three and nine months ended March 2, 2024, the Company recognized Net sales of $ 4.0 million and $ 75.9 million respectively, related to customer deposits that were included in the balance sheet as of June 3, 2023.

On July 19, 2021, the Company completed the acquisition of Knoll, a leader in the design, manufacture, marketing and sale of high-end furniture products and accessories for workplace and residential markets.

The Company has included the financial results of Knoll in the condensed consolidated financial statements from the date of acquisition.

The transaction costs associated with the acquisition, which included financial advisory, legal, proxy filing, regulatory and financing fees, were approximately $ 30.0 million for the twelve months ended May 28, 2022 and were recorded in general and administrative expenses.

Under the terms of the Agreement and Plan of Merger, each issued and outstanding share of Knoll common stock (excluding shares exercising dissenters rights, shares owned by Knoll as treasury stock, shares owned by the deal parties or their subsidiaries, or shares subject to Knoll restricted stock awards) was converted into a right to receive 0.32 shares of Herman Miller, Inc.

(now MillerKnoll, Inc.) common stock and $ 11.00 in cash, without interest.

The acquisition date fair value of the consideration transferred for Knoll was $ 1,887.3 million, which consisted of the following (in millions, except share amounts):

Knoll Shares Herman Miller, Inc (now MillerKnoll, Inc.) Shares Exchanged Fair Value

Cash Consideration:

Shares of Knoll Common Stock issued and outstanding at July 19, 2021 49,444,825 $ 543.9

Knoll equivalent shares for outstanding option awards, outstanding awards of restricted common stock held by non-employee directors and outstanding awards of performance units held by individuals who are former employees of Knoll and remain eligible to vest at July 19, 2021 184,857 1.4

Total number of Knoll shares for cash consideration 49,629,682

Shares of Knoll Preferred Stock issued and outstanding at July 19, 2021 169,165 254.4

Consideration for payment to settle Knoll's outstanding debt 376.9

Share Consideration:

Shares of Knoll Common Stock issued and outstanding at July 19, 2021 49,444,825

Knoll equivalent shares for outstanding awards of restricted common stock held by non-employee directors and outstanding awards of performance units held by individuals who are former employees of Knoll and remain eligible to vest at July 19, 2021 74,857

Total number of Knoll shares for share consideration 49,519,682 15,843,921 688.3

Replacement Share-Based Awards:

Outstanding awards of Knoll Restricted Stock and Performance units relating to Knoll Common Stock at July 19, 2021 22.4

Total acquisition date fair value of consideration transferred $ 1,887.3

The aggregate cash paid in connection with the Knoll acquisition was $ 1,176.6 million.

MillerKnoll funded the acquisition through cash on-hand and debt proceeds, as described in "Note 13.

Short-Term Borrowings and Long-Term Debt."

Outstanding unvested restricted stock awards, performance stock awards, performance stock units and restricted stock units with a fair value of $ 53.4 million converted into Company awards.

Of the total fair value, $ 22.4 million was allocated to purchase consideration and $ 31.0 million was allocated to future services and is being expensed over the remaining service periods on a straight-line basis.

Per the terms of the converted awards any qualifying termination within the twelve months subsequent to the acquisition resulted in accelerated vesting and related recognition of expense.

The transaction was accounted for as a business combination which requires that assets and liabilities assumed be recognized at their fair value as of the acquisition date.

The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition:

(In millions) Fair Value

Accounts receivable 82.3

Inventories 219.9

Other current assets 29.2

Property and equipment 296.5

Right-of-use assets 202.7

Intangible assets 756.6

Goodwill 903.5

Other noncurrent assets 25.1

Total assets acquired 2,603.8

Accounts payable 144.0

Other current liabilities 153.1

Lease liabilities 177.8

Other liabilities 241.6

Total liabilities assumed 716.5

Net Assets Acquired $ 1,887.3

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill.

Goodwill is attributed to the assembled workforce of Knoll and anticipated operational synergies.

Goodwill related to the acquisition was allocated to each of the reporting segments with a total value as of the opening balance sheet date of $ 903.5 million.

Goodwill arising from the acquisition is not deductible for tax reporting purposes.

Certain measurement period adjustments were made during the twelve months ended May 28, 2022 to the preliminary fair values resulting in a net decrease to goodwill of $ 22.4 million primarily related to adjustments to the value of certain liabilities acquired and the fair value of intangible assets acquired.

The allocation of purchase price was completed in the fourth quarter of fiscal year 2022.

The following table summarizes the acquired identified intangible assets, valuation method employed, useful lives and fair value, as determined by the Company as of the acquisition date:

(In millions) Valuation Method Useful Life (years) Fair Value

Backlog Multi-Period Excess Earnings Less than 1 Year

Trade name - indefinite lived Relief from Royalty Indefinite 418.0

Trade name - amortizing Relief from Royalty 5 - 10 Years

Designs Relief from Royalty 9 - 15 years

Customer Relationships Multi-Period Excess Earnings 2 - 15 years

Total $ 756.6

During the three months ended August 31, 2024, and September 2, 2023, the Company recognized Net sales of $ 72.8 million and $ 47.5 million, respectively, related to customer deposits that were included in the balance sheet as of June 1, 2024, and June 3, 2023.

Inventories, net

(In millions) March 2, 2024 June 3, 2023

(In millions) August 31, 2024 June 1, 2024

Finished goods and work in process $ 324.8 $ 314.3

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Goodwill and Indefinite-Lived Intangibles

Goodwill and other indefinite-lived intangible assets included in the Condensed Consolidated Balance Sheets consisted of the following as of March 2, 2024 and June 3, 2023:

(In millions) Americas Contract International Contract & Specialty Global Retail Total

Goodwill $ 565.1 $ 303.0 $ 479.1 $ 1,347.2

Changes in the carrying amount of Goodwill, by reportable segment, were as follows:

(In millions) Americas Contract (1)

International Contract & Specialty Global Retail (2)

Balance at June 1, 2024 $ 530.1 $ 304.4 $ 391.8 $ 1,226.3

Foreign currency translation adjustments 2.8 2.6 2.7 8.1

Accumulated impairment losses ( 36.7 ) — ( 88.8 ) ( 125.5 )

March 2, 2024 $ 529.8 $ 304.4 $ 391.7 $ 1,225.9

Balance at August 31, 2024 $ 532.9 $ 307.0 $ 394.5 $ 1,234.4

(1) Americas Contract segment had accumulated goodwill impairments of $ 36.7 million as of August 31, 2024, and June 1, 2024.

(2) Global Retail segment had accumulated goodwill impairments of $ 88.8 million as of August 31, 2024, and June 1, 2024.

Other indefinite-lived assets included in the Consolidated Balance Sheets consist of the following:

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Foreign currency translation adjustments 2.3

March 2, 2024 $ 482.2

August 31, 2024 $ 467.8

Goodwill is tested for impairment at the reporting unit level annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value.

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If the quantitative testing indicates that goodwill is impaired, the carrying value of goodwill is written down to fair value.

During the third quarter of fiscal year 2023, the Company assessed changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair values of any reporting units were below their carrying amounts.

Although our annual impairment test is performed during the fourth quarter, we perform this qualitative assessment each interim reporting period.

While there was no single determinate event, the consideration in totality of several factors that developed during the third quarter of fiscal year 2023 led us to conclude that it was more likely than not that the fair value of the Global Retail reporting unit was below its carrying amount.

These factors included:

(i) the decision to discontinue stand-alone operations of the Fully brand and (ii) the assessment of our third quarter results, for which the performance of the Global Retail reporting unit was below management's expectations.

Accordingly, the Company performed an interim quantitative impairment analysis as of March 4, 2023 to determine the fair value of the Global Retail reporting unit as compared to the carrying value.

In performing the quantitative impairment test, the Company determined that the fair value of the Global Retail reporting unit exceeded the carrying amount and, as such, the reporting unit was not impaired.

The Company determined that the Global Retail reporting unit exceeded its carrying value by 1 % and therefore has a heightened risk of future impairments if any assumptions, estimates or market factors change in the future.

Each of the reporting units was reviewed for impairment using a qualitative assessment as of March 31, 2023, our annual testing date.

In performing the qualitative impairment test for fiscal year 2023, the Company determined that the fair value of its reporting units exceeded the carrying amount and, as such, these reporting units were not impaired.

During the third quarter of fiscal year 2024, the Company performed an assessment to determine whether there were indicators of a triggering event which could indicate the carrying amount of the reporting units may not be supported by the fair value.

No indicators of a triggering event for potential impairment were noted in the third quarter of fiscal 2024.

Each of the reporting units, other than the Global Retail reporting unit, was reviewed for impairment using a qualitative assessment as of March 31, 2024, our annual testing date.

The Global Retail reporting unit was reviewed for impairment using a quantitative assessment as of March 31, 2024.

In performing the qualitative and quantitative impairment tests for fiscal year 2024, the Company determined that the fair value of its reporting units exceeded the carrying amount and, as such, these reporting units were not impaired.

During the first quarter of fiscal year 2025, the Company performed an assessment to determine whether there were indicators of a triggering event which could indicate the carrying amount of the reporting units may not be supported by the fair value.

No indicators of a triggering event for potential impairment were noted in the first quarter of fiscal 2025.

The Company generally uses the discounted cash flow method under a weighting of the income and market approach to estimate the fair value of our reporting units.

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Intangible assets with indefinite useful lives are not subject to amortization and are evaluated annually for impairment, or more frequently when events or changes in circumstances indicate that the fair value of an intangible asset may not be recoverable.

Management has not identified any events or changes in circumstances that may indicate an indefinite-lived intangible is more likely than not to be impaired as of the third quarter of fiscal year 2024.

Management has not identified any events or changes in circumstances that may indicate an indefinite-lived intangible is more likely than not to be impaired as of the first quarter of fiscal year 2025.

Employee Benefit Plans

One of the Company's wholly owned foreign subsidiaries has a defined-benefit pension plan based upon an average final pay benefit calculation.

The measurement date for this plan is the last day of the fiscal year and the plan is frozen to new participants.

The Knoll subsidiary has one domestic defined-benefit pension plan covering eligible U.S.

nonunion employees.

The measurement date for this plan is the last day of the fiscal year and the plan is frozen to new participants.

During the fourth quarter of the year ended June 1, 2024, the Company began the process of terminating the defined-benefit pension plan held by the Knoll subsidiary.

The plan participants have been notified of the Company's intention to terminate the plan and settle plan liabilities through either lump sum distributions to plan participants or annuity contracts that cover vested benefits.

The plan liabilities as of June 1, 2024, were calculated using assumptions used to value the expected cost of the plan termination.

The Company currently expects to complete the settlement of plan liabilities in fiscal 2025.

The following table summarizes the components of net periodic benefit cost for the Company's defined benefit pension plans:

Pension Benefits

Three Months Ended March 2, 2024 Three Months Ended March 4, 2023

(In millions) Domestic International Domestic International

Service cost $ — $ — $ — $ —

Interest cost 1.5 1.0 1.5 0.8

Expected return on plan assets (1)

( 2.3 ) ( 1.2 ) ( 2 ) ( 1.2 )

Expected administrative expenses 0.2 — 0.1 —

Net amortization loss — — — 0.6

Settlement charge — — ( 0.5 ) —

Net periodic benefit (income) cost $ ( 0.6 ) $ ( 0.2 ) $ ( 0.9 ) $ 0.2

Nine Months Ended March 2, 2024 Nine Months Ended March 4, 2023

Three Months Ended August 31, 2024 Three Months Ended September 2, 2023

(In millions) Domestic International Domestic International

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( 1.5 ) ( 1.4 ) ( 2.3 ) ( 1.3 )

Expected administrative expenses 0.6 — 0.3 —

Net amortization loss — 0.2 — —

Settlement charge — — ( 0.5 ) —

Net periodic benefit (income) cost $ ( 1.8 ) $ ( 0.7 ) $ ( 1.7 ) $ 0.7

Net periodic benefit cost (income) $ 0.5 $ ( 0.2 ) $ ( 0.6 ) $ ( 0.3 )

(1) The weighted-average expected long-term rate of return on plan assets is 6.0 %.

All of the amounts in the tables above for pension benefit cost (income), other than Service cost, were included in Other (income) expense, net within our Condensed Consolidated Statements of Comprehensive Income.

Earnings Per Share

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Diluted earnings per share is computed by dividing net earnings attributable to MillerKnoll, Inc.

by the weighted-average number of common shares outstanding, including all potentially dilutive common

by the weighted-average number of common shares outstanding, including all potentially dilutive common shares.

In periods of loss, there are no potentially dilutive common shares to add to the weighted-average number of common shares outstanding.

The table below presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share attributable to MillerKnoll, Inc.:

Three Months Ended Nine Months Ended

March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Net earnings attributable to MillerKnoll, Inc.

Three Months Ended

August 31, 2024 September 2, 2023

Numerator for both basic and diluted EPS, Net (loss) earnings attributable to MillerKnoll, Inc.

- in millions $ ( 1.2 ) $ 16.7

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Stock-Based Compensation

The following table summarizes the stock-based compensation expense and related income tax effect for the three and nine months ended:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

The following table summarizes the stock-based compensation expense and related income tax effect for the three months ended:

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Stock-based compensation expense $ 9.1 $ 6.4

2 unchanged sentences

Stock-based awards are considered fully vested for expense attribution purposes when the employee's retention of the award is no longer contingent on providing subsequent service.

The Company's process for determining the provision for income taxes for the three and nine months ended March 2, 2024 involved using an estimated annual effective tax rate which was based on expected annual income and statutory tax rates across the various jurisdictions in which it operates.

The effective tax rates were 16.0 % and 31.2 %, respectively, for the three month periods ended March 2, 2024 and March 4, 2023.

The year over year change in the effective tax rate for the three months ended March 2, 2024 resulted from the current quarter having favorable discrete impacts from return to provision true-ups related to the United States research and development tax credit and the prior year quarter having no comparable impacts.

For the three months ended March 2, 2024, the effective tax rate is lower than the United States federal statutory rate due to favorable discrete impacts from return to provision true-ups related to the United States research and development tax credit.

For the three months ended March 4, 2023, the effective tax rate was higher than the United States federal statutory rate due to an unfavorable tax adjustment in the quarter related to stock compensation.

The effective tax rates were 20.5 % and 19.5 %, respectively, for the nine months ended March 2, 2024 and March 4, 2023.

The year over year increase in the effective rate for the nine months ended March 2, 2024 resulted from the same nine months in the prior year having more favorable foreign tax credit impacts in the United States than the current nine months.

For the nine months ended March 2, 2024, the effective tax rate is slightly lower than the United States federal statutory rate due to favorable impacts from return to provision true-ups related to the United States research and development tax credit.

For the nine months ended March 4, 2023, the effective tax rate was lower than the United States federal statutory rate due to the favorable impact of increased foreign tax credits in the United States resulting from the recapture of prior year overall domestic loss.

The Company's process for determining the provision for income taxes for the three months ended August 31, 2024, involved using an estimated annual effective tax rate which was based on expected annual income and statutory tax rates across the various jurisdictions in which it operates.

The effective tax rates were 66.2 % and 24.4 %, respectively, for the three month periods ended August 31, 2024, and September 2, 2023.

The year over year change in the effective tax rate for the three months ended August 31, 2024, resulted from the current quarter reflecting pre-tax loss along with having favorable discrete impacts from stock compensation and return to provision true-ups related to the United States research and development tax credit and the prior year quarter reflecting pre-tax income with unfavorable discrete impacts related to stock compensation.

For the three months ended August 31, 2024, the effective tax rate is higher than the United States federal statutory rate due to reflecting pre-tax loss along with favorable discrete impacts from stock compensation in the United States research and development tax credit.

For the three months ended September 2, 2023, the effective tax rate was higher than the United States federal statutory rate due to an unfavorable discrete tax adjustment in the quarter related to stock compensation in the United States.

The Company recognizes interest and penalties related to uncertain tax benefits through Income tax expense in its Condensed Consolidated Statements of Comprehensive Income.

Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three and nine months ended March 2, 2024 and March 4, 2023.

Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three months ended August 31, 2024, and September 2, 2023.

The Company's recorded liability for potential interest and penalties related to uncertain tax benefits was:

(In millions) March 2, 2024 June 3, 2023

(In millions) August 31, 2024 June 1, 2024

Liability for interest and penalties $ 0.9 $ 0.8

6 unchanged sentences

Fair Value Measurements

The Company's financial instruments consist of cash equivalents, marketable securities, accounts and notes receivable, deferred compensation plan, accounts payable, debt, interest rate swaps, and foreign currency exchange contracts.

The Company's financial instruments consist of cash equivalents, accounts and notes receivable, deferred compensation plans, accounts payable, debt, interest rate swaps, and foreign currency exchange contracts.

The Company's financial instruments, other than long-term debt, are recorded at fair value.

The carrying value and fair value of the Company's long-term debt, including current maturities, is as follows for the periods indicated:

(In millions) March 2, 2024 June 3, 2023

(In millions) August 31, 2024 June 1, 2024

Carrying value $ 1,381.6 $ 1,347.8

6 unchanged sentences

These forward contracts are not designated as hedging instruments.

The following table sets forth financial assets and liabilities measured at fair value through net income and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy as of March 2, 2024 and June 3, 2023.

(In millions) March 2, 2024 June 3, 2023

Financial Assets NAV Quoted prices in active markets for identical assets (Level 1) Quoted prices with other observable inputs (Level 2) NAV Quoted prices in active markets for identical assets (Level 1) Quoted prices with other observable inputs (Level 2)

(In millions) August 31, 2024 June 1, 2024

Financial Assets NAV Quoted prices with other observable inputs (Level 2) NAV Quoted prices with other observable inputs (Level 2)

Cash equivalents:

9 unchanged sentences

The interest rate swap agreements are designated as cash flow hedging instruments.

The following table sets forth financial assets and liabilities measured at fair value through other comprehensive income and the respective pricing levels to which the fair value measurements are classified within the fair value hierarchy as of March 2, 2024 and June 3, 2023.

(In millions) March 2, 2024 June 3, 2023

(In millions) August 31, 2024 June 1, 2024

Financial Assets Balance Sheet Location Quoted Prices with Other Observable Inputs (Level 2) Quoted Prices with Other Observable Inputs (Level 2)

19 unchanged sentences

The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense.

The interest rate swaps were designated as cash flow hedges at inception and the facts and circumstances of the hedged relationships remain consistent with the initial quantitative effectiveness assessment in that the hedged instruments remain an effective accounting hedge as of March 2, 2024.

Since a designated derivative meets hedge accounting criteria, the fair value of the hedge is recorded in the Consolidated Statements of Stockholders’ Equity as a component of Accumulated other comprehensive loss, net of tax.

9 unchanged sentences

Effective fixed interest rates include the rates amended effective January 31, 2023, or February 3, 2023, for the first three swaps included in the chart above.

The following table summarizes the effects of the interest rate swap agreements for the three and nine months ended:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

The following table summarizes the effects of the interest rate swap agreements for the three months ended:

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

(Loss) Gain recognized in Other comprehensive loss (income) (effective portion) $ ( 21.3 ) $ 7.8

Gain reclassified from Accumulated other comprehensive loss into earnings $ 7.8 $ 7.4

There were no gains or losses recognized in earnings for hedge ineffectiveness for the three and nine month periods ended March 2, 2024 and March 4, 2023.

There were no gains or losses recognized in earnings for hedge ineffectiveness for the three month periods ended August 31, 2024, and September 2, 2023.

The amount of gain expected to be reclassified from Accumulated other comprehensive income into earnings during the next twelve months is $ 19.8 million, net of tax is $ 14.8 million.

Redeemable Noncontrolling Interests

Changes in the Company's redeemable noncontrolling interest in HAY for the nine months ended March 2, 2024 and March 4, 2023 are as follows:

(In millions) March 2, 2024 March 4, 2023

Changes in the Company's redeemable noncontrolling interest in HAY for the three months ended August 31, 2024, and September 2, 2023, are as follows:

(In millions) August 31, 2024 September 2, 2023

Beginning Balance $ 73.9 $ 107.6

Net income attributable to redeemable noncontrolling interests 0.7 ( 0.6 )

Dividend attributable to redeemable noncontrolling interests ( 2.8 ) ( 3.2 )

Cumulative translation adjustments attributable to redeemable noncontrolling interests 0.6 —

Foreign currency translation adjustments 1.4 0.6

11 unchanged sentences

Changes in the warranty reserve for the stated periods were as follows:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Accrual Balance — beginning $ 70.4 $ 73.9

7 unchanged sentences

However, the Company is ultimately liable for claims that may occur against them.

As of March 2, 2024, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 7.9 million.

As of August 31, 2024, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 9.8 million.

The Company has no history of claims, nor is it aware of circumstances that would require it to pay, under any of these arrangements.

The Company also believes that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the Company's Consolidated Financial Statements.

Accordingly, no liability has been recorded in respect to these bonds as of either March 2, 2024 or June 3, 2023.

Accordingly, no liability has been recorded in respect to these bonds as of either August 31, 2024, or June 1, 2024.

The Company has entered into standby letter of credit arrangements for purposes of protecting various insurance companies and lessors against default on insurance premium and lease payments.

As of March 2, 2024, the Company had a maximum financial exposure from these standby letters of credit totaling approximately $ 12.7 million, all of which is considered usage against the Company's revolving line of credit.

As of August 31, 2024, the Company had a maximum financial exposure from these standby letters of credit totaling approximately $ 13.2 million, all of which is considered usage against the Company's revolving line of credit.

The Company has no history of claims, nor is it aware of circumstances that would require it to perform under any of these arrangements and believes that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the Company's Consolidated Financial Statements.

Accordingly, no liability has been recorded with respect to these arrangements as of March 2, 2024 or June 3, 2023.

Accordingly, no liability has been recorded with respect to these arrangements as of August 31, 2024, or June 1, 2024.

Contingencies

2 unchanged sentences

Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt as of March 2, 2024 and June 3, 2023 consisted of the following:

(In millions) March 2, 2024 June 3, 2023

Short-term borrowings and long-term debt as of August 31, 2024, and June 1, 2024, consisted of the following:

(In millions) August 31, 2024 June 1, 2024

Syndicated revolving line of credit, due July 2026 $ 433.1 $ 390.0

15 unchanged sentences

The Company’s direct and indirect wholly-owned domestic subsidiaries have also guaranteed the obligations of the Company and the foreign borrowers under the revolving line of credit and term loans and pledged substantially all of their tangible and intangible assets as security for their obligations under such guarantee.

During the nine months ended March 2, 2024, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 17.5 million and $ 4.7 million, respectively.

During the nine months ended March 4, 2023, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 15.0 million and $ 4.7 million, respectively.

During the three months ended August 31, 2024, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 7.5 million and $ 1.6 million, respectively.

During the three months ended September 2, 2023, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 5.0 million and $ 1.6 million, respectively.

Available borrowings under the syndicated revolving line of credit were as follows for the periods indicated:

(In millions) March 2, 2024 June 3, 2023

(In millions) August 31, 2024 June 1, 2024

Syndicated revolving line of credit borrowing capacity $ 725.0 $ 725.0

7 unchanged sentences

The Company has lengthened the payment terms for certain suppliers that have chosen to participate in the program.

As a result, certain amounts due to suppliers have payment terms that are longer than standard industry practice and as such, these amounts have been excluded from “Accounts payable” in the Condensed Consolidated Balance Sheets as the amounts have been accounted for by the Company as current debt, within “Short-term borrowings and current portion of long-term debt”.

As of March 2, 2024 and June 3, 2023, the liability related to the supplier financing program was $ 1.9 million and $ 2.1 million, respectively.

Accumulated Other Comprehensive Loss

The following table provides an analysis of the changes in accumulated other comprehensive loss for the nine months ended March 2, 2024 and March 4, 2023:

The following table provides an analysis of the changes in accumulated other comprehensive loss for the three months ended August 31, 2024, and September 2, 2023:

(In millions) Cumulative Translation Adjustments Pension and Other Post-retirement Benefit Plans Interest Rate Swap Agreement Accumulated Other Comprehensive Loss

5 unchanged sentences

Net current period other comprehensive income (loss) 15.4 0.1 ( 21.3 ) ( 5.8 )

Balance at March 2, 2024 $ ( 106.1 ) $ ( 24.0 ) $ 41.5 $ ( 88.6 )

Balance at May 28, 2022 $ ( 93.9 ) $ ( 36.9 ) $ 23.7 $ ( 107.1 )

Other comprehensive (loss) income, net of tax before reclassifications ( 30.6 ) — 24.9 ( 5.7 )

Balance at August 31, 2024 $ ( 90.3 ) $ ( 33.2 ) $ 25.0 $ ( 98.5 )

Balance at June 3, 2023 $ ( 114.0 ) $ ( 23.8 ) $ 42.7 $ ( 95.1 )

Other comprehensive income (loss), net of tax before reclassifications 3.9 — 0.4 4.3

Reclassification from accumulated other comprehensive loss - Other, net — ( 0.1 ) 7.4 7.3

1 unchanged sentence

Net reclassifications — ( 0.1 ) 7.4 7.3

Net current period other comprehensive (loss) income ( 30.6 ) 0.4 31.8 1.6

Balance at March 4, 2023 $ ( 124.5 ) $ ( 36.5 ) $ 55.5 $ ( 105.5 )

Net current period other comprehensive income (loss) 3.9 ( 0.1 ) 7.8 11.6

Balance at September 2, 2023 $ ( 110.1 ) $ ( 23.9 ) $ 50.5 $ ( 83.5 )

Operating Segments

2 unchanged sentences

The Americas Contract segment includes the operations associated with the design, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout North and South America.

The International Contract & Specialty segment includes the operations associated with the design, manufacture and sale of furniture products, indirectly or directly through an independent dealership network in Europe, the Middle East, Africa and Asia-Pacific as well as the global activities of the Specialty brands, which include Holly Hunt, Spinneybeck, Maharam, Edelman, and Knoll Textiles.

The Global Retail segment includes global operations associated with the sale of modern design furnishings and accessories to third-party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, and physical retail stores.

The Company also reports a “Corporate” category consisting primarily of unallocated expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative and integration-related costs.

2 unchanged sentences

The following is a summary of certain key financial measures for the respective periods indicated:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Americas Contract $ 454.6 $ 490.4

13 unchanged sentences

As part of restructuring and integration activities the Company has incurred expenses that qualify as exit and disposal costs under U.S.

These include severance and employee benefit costs as well as other direct separation benefit costs.

These include severance and employee benefit costs as well as other direct separation benefit costs, right of use asset impairment charges, fixed asset impairment charges, and accelerated depreciation of fixed assets.

Severance and employee benefit costs primarily relate to cash severance, as well as non-cash severance, including accelerated equity award compensation expense.

The Company also incurs expenses that are an integral component of, and directly attributable to, our restructuring and integration activities, which do not qualify as exit and disposal costs under U.S.

The Company also incurred expenses that are an integral component of, and directly attributable to, our restructuring and integration activities, which do not qualify as exit and disposal costs under U.S.

These include integration implementation costs that relate primarily to professional fees and non-cash losses incurred on debt extinguishment.

The expenses associated with integration initiatives are included in Selling, general and administrative and the expenses associated with restructuring activities are included in Restructuring expense in the Condensed Consolidated Statements of Comprehensive Income.

The expense associated with integration initiatives are included in Selling, general and administrative and the expenses associated with restructuring activities are included in Restructuring expense in the Condensed Consolidated Statements of Comprehensive Income.

Knoll Integration:

Following the Knoll acquisition, the Company announced a multi-year program (the "Knoll Integration") designed to reduce costs and integrate and optimize operations of the combined organization.

The Company currently expects that the Knoll Integration will result in pre-tax cash costs that are expected to be approximately $ 150 million, comprised of the following categories:

To date, the Company has recorded a total of $ 144.4 million in pre-tax integration expense related to this plan.

No future costs related to this plan are expected.

The integration expenses incurred by the Company included expenses within the following categories:

• Severance and employee benefit costs associated with plans to integrate our operating structure, resulting in workforce reductions.

These costs will primarily include:

These costs primarily include:

severance and employee benefits (cash severance, non-cash severance, including accelerated stock-compensation award expense and other termination benefits).

1 unchanged sentence

• Other integration costs include professional fees and other incremental third-party expenses, including a loss on extinguishment of debt associated with financing of the Knoll acquisition.

For the three months ended March 2, 2024, we incurred $ 7.6 million of costs related to the Knoll Integration which was comprised of $ 6.6 million of exit and disposal costs related to the consolidation of facilities, and $ 1 million of other integration costs.

For the three months ended March 4, 2023, we incurred $ 4.0 million of costs related to the Knoll Integration including:

$ 1.7 million of severance and employee benefit costs, $ 0.8 million of exit and disposal costs related to the consolidation of facilities, and $ 1.5 million of other integration costs

For the nine months ended March 2, 2024, we incurred $ 18.4 million of costs related to the Knoll Integration which was comprised of $ 15.3 million of exit and disposal costs related to the consolidation of facilities and $ 3.1 million of other integration costs.

For the nine months ended March 4, 2023, we incurred $ 12.7 million of costs related to the Knoll Integration including:

$ 3.1 million of severance and employee benefit costs, $ 3.6 million of of exit and disposal costs related to the consolidation of facilities, and $ 6.0 million of other integration costs.

For the three months ended August 31, 2024, we incurred $ 28.3 million of costs related to the Knoll Integration which was comprised of $ 25.8 million of exit and disposal costs related to the consolidation of facilities and $ 2.5 million of other integration costs.

For the three months ended September 2, 2023, we incurred $ 3.9 million of costs related to the Knoll Integration which was comprised of $ 3.4 million of exit and disposal costs related to the consolidation of facilities and $ 0.5 million of other integration costs

The following table provides an analysis of the changes in liability balance for Knoll Integration costs that qualify as exit and disposal costs under U.S.

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the nine months ended March 2, 2024:

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the three months ended August 31, 2024:

(In millions) Severance and Employee Benefit Exit and Disposal Activities Total

3 unchanged sentences

Non-cash costs — ( 19.0 ) ( 19.0 )

March 2, 2024 $ 0.1 $ 1.2 $ 1.3

The Company expects that a substantial portion of the liability for the Knoll Integration as of March 2, 2024 will be paid in the balance of fiscal year 2024.

August 31, 2024 $ — $ 1.1 $ 1.1

The Company expects that the remaining liability for the Knoll Integration as of August 31, 2024, will be paid in the balance of fiscal year 2025.

The following is a summary of integration expenses by segment for the periods indicated:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Americas Contract $ 22.5 $ 3.1

5 unchanged sentences

The decision to sell this facility was made as a result of facility integration activities performed in connection with the integration of Knoll.

The carrying amount of these assets held for sale was $ 4.6 million and is classified as current assets within "Assets held for sale" in the Condensed Consolidated Balance Sheets as of March 2, 2024.

No impairment has been recorded on the carrying value of the asset.

As of August 31, 2024, and June 1, 2024, the carrying amount of these assets held for sale was $ 3.2 million and $ 3.5 million, respectively, and is classified as current assets within "Assets held for sale" in the Condensed Consolidated Balance Sheets.

Restructuring Activities

During fiscal year 2023, the Company announced a series of actions that relate to the 2023 restructuring plan ("2023 restructuring plan") to reduce expenses.

These restructuring activities included voluntary and involuntary reductions in workforces and charges incurred in connection with the decision to cease operating Fully as a stand-alone brand.

As the result of these actions, the Company projected an annualized expense reduction of approximately $ 30 million to $ 35 million.

The Company incurred $ 34.0 million of costs related to the 2023 restructuring plan comprised of $ 27.9 million of severance and employee benefit costs and $ 6.1 million of non-impairment charges related to the closure of the Fully business.

The restructuring plan was complete in fiscal 2023 and no future costs related to this plan are expected.

During fiscal year 2024, the Company announced an action related to the 2024 restructuring plan ("2024 restructuring plan") to reduce expenses.

This restructuring activity included involuntary reductions in workforces.

As the result of the action, the Company projects an annualized expense reduction of approximately $ 15.0 million to $ 17.0 million.

During the three and nine months ended March 2, 2024 the Company incurred $ 1.7 million and $ 8.7 million, respectively of severance and employee benefit costs related to the 2024 restructuring plan.

The following table provides an analysis of the changes in the restructuring cost reserve for the nine months ended March 2, 2024:

Severance and Employee-Related

(In millions) 2024 Restructuring Plan 2023 Restructuring Plan

This restructuring activity included involuntary reductions in workforces as well as expenses related to a facilities consolidation plan, comprised primarily of non-cash right of use asset impairment charges and accelerated depreciation of fixed assets.

For the year ended June 1, 2024, the Company incurred $ 30.8 million of restructuring charges related to the 2024 restructuring plan.

The restructuring plan was complete in fiscal 2024 and no future costs related to this plan are expected.

The following table provides an analysis of the changes in the restructuring cost reserve that qualify as exit and disposal costs under U.S.

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the 2024 restructuring plan for the three months ended August 31, 2024:

(In millions) Severance and Employee-Related Exit and Disposal Activities Total

June 1, 2024 $ 10.0 $ — $ 10.0

1 unchanged sentence

Amounts Paid ( 4.0 ) — ( 4.0 )

March 2, 2024 $ 2.3 $ 0.3

The Company expects that remaining liability for the 2023 restructuring plan as of March 2, 2024 will be paid in fiscal year 2024.

The Company expects that remaining liability for the 2024 restructuring plan as of March 2, 2024, will be paid in fiscal year 2024 and fiscal 2025.

August 31, 2024 $ 6.0 $ — $ 6.0

The Company expects that remaining liability for the 2024 restructuring plan as of August 31, 2024, will be paid in fiscal year 2025.

The following is a summary of restructuring costs by segment for the periods indicated:

Three Months Ended Nine Months Ended

(In millions) March 2, 2024 March 4, 2023 March 2, 2024 March 4, 2023

Three Months Ended

(In millions) August 31, 2024 September 2, 2023

Americas Contract $ — $ 4.3

4 unchanged sentences

The Company entered into long-term notes receivable with certain independently owned dealers that are deemed to be variable interests in variable interest entities.

The carrying value of these long-term notes receivable was $ 14.3 million and $ 6.3 million as of March 2, 2024 and June 3, 2023 respectively and represents the Company’s maximum exposure to loss.

The carrying value of these long-term notes receivable was $ 17.8 million and $ 17.9 million as of August 31, 2024, and June 1, 2024, respectively, and represents the Company’s maximum exposure to loss.

The Company is not deemed to be the primary beneficiary for any of these variable interest entities as each independently owned dealer controls the activities that most significantly impact the entity’s economic performance, including sales, marketing, and operations.

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-Q

Item 1. Financial Statements