What changed in this filing

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Item 1. Financial Statements

2025-01-06 compared with 2024-10-09 · 158 added, 109 removed, 498 unchanged (35% of the section changed)

1 unchanged sentence

MillerKnoll, Inc.

Condensed Consolidated Statements of Comprehensive Income

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

(Unaudited) August 31, 2024 September 2, 2023

Condensed Consolidated Statements of Comprehensive Income (Loss)

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

(Unaudited) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Net sales $ 970.4 $ 949.5 $ 1,831.9 $ 1,867.2

10 unchanged sentences

Other (income) expense, net ( 1.3 ) ( 2.4 ) ( 2.7 ) ( 0.2 )

(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.

Earnings before income taxes and equity income 44.9 44.3 43.2 65.4

Income tax expense 9.8 9.5 8.7 14.6

Equity income (loss) from nonconsolidated affiliates, net of tax 0.1 ( 0.4 ) 0.2 ( 0.3 )

Net earnings 35.2 34.4 34.7 50.5

Net earnings attributable to redeemable noncontrolling interests 1.1 0.9 1.8 0.3

Net earnings attributable to MillerKnoll, Inc.

$ 34.1 $ 33.5 $ 32.9 $ 50.2

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

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

Earnings per share - basic $ 0.49 $ 0.45 $ 0.47 $ 0.67

Earnings per share - diluted $ 0.49 $ 0.45 $ 0.47 $ 0.67

Other comprehensive (loss) income, net of tax

1 unchanged sentence

Pension and post-retirement liability adjustments 2.8 — 2.9 ( 0.1 )

Unrealized (loss) gain on interest rate swap agreement ( 21.3 ) 7.8

Unrealized gain (loss) on interest rate swap agreement 3.6 ( 7.9 ) ( 17.7 ) ( 0.1 )

Other comprehensive (loss) income, net of tax $ ( 29.8 ) $ ( 0.6 ) $ ( 35.6 ) $ 11.0

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.

Comprehensive income (loss) 5.4 33.8 ( 0.9 ) 61.5

Comprehensive income attributable to redeemable noncontrolling interests 1.1 0.9 1.8 0.3

Comprehensive income (loss) attributable to MillerKnoll, Inc.

$ 4.3 $ 32.9 $ ( 2.7 ) $ 61.2

3 unchanged sentences

(Dollars in millions, except share data)

(Unaudited) August 31, 2024 June 1, 2024

(Unaudited) November 30, 2024 June 1, 2024

Current Assets:

43 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Three Months Ended

(Unaudited) August 31, 2024 September 2, 2023

(Dollars in millions) Six Months Ended

(Unaudited) November 30, 2024 December 2, 2023

Cash Flows from Operating Activities:

Net (loss) earnings $ ( 0.5 ) $ 16.1

Net earnings $ 34.7 $ 50.5

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

2 unchanged sentences

Amortization of deferred financing costs 2.3 2.3

Loss on sale of equity method investment — 0.4

Operating leases 4.6 ( 2.3 )

Deferred taxes 0.9 ( 0.3 )

1 unchanged sentence

(Increase) decrease in current assets ( 75.1 ) 71.0

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

Increase (decrease) in current liabilities 18.0 ( 1.7 )

Other, net 2.8 0.2

3 unchanged sentences

Collection of notes receivable 3.2 1.0

Proceeds from the sale of equity method investment — 3.5

Capital expenditures ( 44.9 ) ( 39.9 )

17 unchanged sentences

Condensed Consolidated Statements of Stockholders' Equity

Three Months Ended August 31, 2024

Six Months Ended November 30, 2024

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

8 unchanged sentences

Employee stock purchase plan issuances 30,002 — 0.8 — — — 0.8

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

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

Dividends declared ($ 0.1875 per share)

1 unchanged sentence

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

Three Months Ended September 2, 2023

Net earnings — — — 34.1 — — 34.1

Other comprehensive income, net of tax — — — — ( 29.8 ) — ( 29.8 )

Stock-based compensation expense — — 8.8 — — — 8.8

Exercise of stock options 21,318 — 0.4 — — — 0.4

Restricted and performance stock units released 6,323 — 0.4 — — — 0.4

Employee stock purchase plan issuances 32,251 — 0.7 — — — 0.7

Repurchase and retirement of common stock, including excise tax ( 955,646 ) ( 0.2 ) ( 23.2 ) — — — ( 23.4 )

Dividends declared ($ 0.1875 per share)

— — — ( 13.0 ) — — ( 13.0 )

Directors' fees 1,773 — 0.1 — — — 0.1

November 30, 2024 68,434,419 $ 13.7 $ 680.3 $ 745.1 $ ( 128.3 ) $ — $ 1,310.8

Six Months Ended December 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.

11 unchanged sentences

September 2, 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-base compensation expense — — 5.3 — — — 5.3

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

Restricted and performance stock units released 11,887 — 1.3 — — — 1.3

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

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

See accompanying notes to Condensed Consolidated Financial Statements.

19 unchanged sentences

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 August 31, 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").

Operating results for the three and six months ended November 30, 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").

10 unchanged sentences

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

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

(In millions) November 30, 2024 June 1, 2024

Gross cash position $ 70.1 $ 26.6

8 unchanged sentences

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.

The Company expects the adoption of this guidance will modify our disclosures, but we do not expect it to have a material effect on our financial position, results of operations, or cash flows.

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

3 unchanged sentences

The update will be effective for annual periods beginning after December 15, 2024.

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

The Company expects the adoption of this guidance will modify our disclosures, but we do not expect it to have a material effect on our financial position, results of operations, or cash flows.

ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

In November 2024, the FASB issued this ASU which requires disclosure on an annual and interim basis, in the notes to the financial statements, of disaggregated information about specific categories underlying certain income statement expense line items.

The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, applied retrospectively.

The Company is currently reviewing the provisions of the amendments in this update and evaluating their impact on the Company’s consolidated financial statements.

We have assessed all other ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

2 unchanged sentences

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

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Single performance obligation

16 unchanged sentences

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

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Americas Contract:

21 unchanged sentences

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

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.

During the three and six months ended November 30, 2024, the Company recognized Net sales of $ 8.8 million and $ 81.6 million, respectively, related to customer deposits that were included in the balance sheet as of June 1, 2024.

During the three and six months ended December 2, 2023, the Company recognized Net sales of $ 24.4 million and $ 71.9 million respectively, related to customer deposits that were included in the balance sheet as of June 3, 2023.

Inventories, net

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

(In millions) November 30, 2024 June 1, 2024

Finished goods and work in process $ 319.6 $ 314.3

1 unchanged sentence

Total $ 430.6 $ 428.6

Inventories are primarily valued using the first-in first-out method.

Inventories are valued primarily using the first-in first-out method.

Goodwill and Indefinite-Lived Intangibles

4 unchanged sentences

Foreign currency translation adjustments ( 2.4 ) ( 2.6 ) ( 3.1 ) ( 8.1 )

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.

Balance at November 30, 2024 $ 527.7 $ 301.8 $ 388.7 $ 1,218.2

(1) Americas Contract segment had accumulated goodwill impairments of $ 36.7 million as of November 30, 2024, and June 1, 2024.

(2) Global Retail segment had accumulated goodwill impairments of $ 88.8 million as of November 30, 2024, and June 1, 2024.

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

2 unchanged sentences

Foreign currency translation adjustments ( 3.0 )

August 31, 2024 $ 467.8

November 30, 2024 $ 462.5

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.

6 unchanged sentences

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.

During the second 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 second 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.

5 unchanged sentences

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 first quarter of fiscal year 2025.

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 second quarter of fiscal year 2025.

Employee Benefit Plans

1 unchanged sentence

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.

Prior to the end of the second quarter of fiscal 2025 the Knoll subsidiary had one domestic defined-benefit pension plan covering eligible U.S.

nonunion employees.

1 unchanged sentence

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.

In the second quarter of fiscal 2025, the Company completed the termination of the the defined-benefit pension plan held by the Knoll subsidiary, which was fully funded as of November 30, 2024.

During the second quarter of fiscal 2025, the Company settled its obligations under the plan by providing lump-sum payments of $ 39.9 million to eligible participants who elected to receive them and entering into an annuity purchase contract for the remaining liability of $ 84.7 million.

The Company recognized a pension plan termination gain of $ 1.5 million during the three months ended November 30, 2024, which represents the acceleration of unamortized net actuarial losses previously included within accumulated other comprehensive income.

The gain was recorded in Other (income) expense, net within our Condensed Consolidated Statements of Comprehensive Income.

As of November 30, 2024, an asset surplus of $ 0.6 million remained undistributed in the pension plan that was terminated.

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

Pension Benefits

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

Three Months Ended November 30, 2024 Three Months Ended December 2, 2023

(In millions) Domestic International Domestic International

3 unchanged sentences

( 0.5 ) ( 1.4 ) ( 2.3 ) ( 1.2 )

Expected administrative expenses — — 0.2 —

Net amortization loss — 0.2 — —

Pension plan termination gain ( 1.5 ) — — —

Net periodic benefit (income) $ ( 0.4 ) $ ( 0.2 ) $ ( 0.6 ) $ ( 0.2 )

Six Months Ended November 30, 2024 Six Months Ended December 2, 2023

(In millions) Domestic International Domestic International

Service cost $ 0.9 $ — $ — $ —

Interest cost 2.7 2.1 3.0 2.0

Expected return on plan assets (1)

( 2.0 ) ( 2.8 ) ( 4.6 ) ( 2.5 )

Expected administrative expenses — — 0.4 —

Net amortization loss — 0.3 — —

Pension plan termination gain ( 1.5 ) — — —

Net periodic benefit cost (income) $ 0.1 $ ( 0.4 ) $ ( 1.2 ) $ ( 0.5 )

8 unchanged sentences

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

August 31, 2024 September 2, 2023

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

Three Months Ended Six Months Ended

November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Net earnings attributable to MillerKnoll, Inc.

- in millions $ 34.1 $ 33.5 $ 32.9 $ 50.2

9 unchanged sentences

Stock-Based Compensation

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

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Stock-based compensation expense $ 8.8 $ 5.3 $ 17.9 $ 11.7

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 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's process for determining the provision for income taxes for the three and six months ended November 30, 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 21.8 % and 21.4 %, respectively, for the three month periods ended November 30, 2024, and December 2, 2023.

The year over year change in the effective tax rate for the three months ended November 30, 2024, resulted from the current quarter having a mix of earnings in tax jurisdictions that had rates that were higher than the prior year quarter.

For the three months ended November 30, 2024, the effective tax rate is slightly higher than the United States federal statutory rate due to United States state income taxes and the mix of earnings in tax jurisdictions that had rates that were higher than the United States federal statutory rate.

For the three months ended December 2, 2023, the effective tax rate was slightly higher than the United States federal statutory rate due to United States state income taxes and the mix of earnings in tax jurisdictions that had rates that were higher than the United States federal statutory rate.

The effective tax rates were 20.0 % and 22.4 %, respectively, for the six months ended November 30, 2024, and December 2, 2023.

The year over year decrease in the effective rate for the six months ended November 30, 2024, resulted from the current six months 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 having unfavorable discrete impacts related to stock compensation.

For the six months ended November 30, 2024, the effective tax rate is lower than the United States federal statutory rate due to favorable discrete impacts from stock compensation and return to provision true-ups related to the United States research and development tax credit.

For the six months ended December 2, 2023, the effective tax rate is higher than the United States federal statutory rate due to United States state income taxes and the mix of earnings in tax jurisdictions that had rates that were higher than the United States federal statutory rate coupled with less favorable foreign tax credit impacts from the recapture of an overall domestic loss carryover .

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 months ended August 31, 2024, and September 2, 2023.

Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three and six months ended November 30, 2024, and December 2, 2023.

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

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

(In millions) November 30, 2024 June 1, 2024

Liability for interest and penalties $ 0.9 $ 0.8

9 unchanged sentences

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) August 31, 2024 June 1, 2024

(In millions) November 30, 2024 June 1, 2024

Carrying value $ 1,402.8 $ 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 August 31, 2024, and June 1, 2024.

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

(In millions) November 30, 2024 June 1, 2024

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

10 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 August 31, 2024, and June 1, 2024.

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

(In millions) November 30, 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 August 31, 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 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

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Gain (loss) recognized in Other comprehensive loss (income) (effective portion) $ 3.6 $ ( 7.9 ) $ ( 17.7 ) $ ( 0.1 )

Gain reclassified from Accumulated other comprehensive loss into earnings $ 6.8 $ 7.7 $ 14.5 $ 15.1

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.

There were no gains or losses recognized in earnings for hedge ineffectiveness for the three and six month periods ended November 30, 2024, and December 2, 2023.

The amount of gain expected to be reclassified from Accumulated other comprehensive income into earnings during the next twelve months is $ 19.9 million, net of tax is $ 14.9 million.

Redeemable Noncontrolling Interests

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

Changes in the Company's redeemable noncontrolling interest in HAY for the six months ended November 30, 2024, and December 2, 2023, are as follows:

(In millions) November 30, 2024 December 2, 2023

Beginning Balance $ 73.9 $ 107.6

10 unchanged sentences

General warranty reserves are based on historical claims experience and other currently available information and are periodically adjusted for business levels and other factors.

Specific reserves are established once an issue is identified with the amounts for such reserves based on the estimated cost of correction.

The Company provides an assurance-type warranty that ensures that products will function as intended.

1 unchanged sentence

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

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Accrual Balance — beginning $ 69.7 $ 73.2 $ 70.4 $ 73.9

7 unchanged sentences

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

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

As of November 30, 2024, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 9.3 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 August 31, 2024, or June 1, 2024.

Accordingly, no liability has been recorded in respect to these bonds as of either November 30, 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 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.

As of November 30, 2024, the Company had a maximum financial exposure from these standby letters of credit totaling approximately $ 12.6 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 August 31, 2024, or June 1, 2024.

Accordingly, no liability has been recorded with respect to these arrangements as of November 30, 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 August 31, 2024, and June 1, 2024, consisted of the following:

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

Short-term borrowings and long-term debt as of November 30, 2024, and June 1, 2024, consisted of the following:

(In millions) November 30, 2024 June 1, 2024

Syndicated revolving line of credit, due July 2026 $ 463.1 $ 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 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.

During the six months ended November 30, 2024, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 15.0 million and $ 3.1 million, respectively.

During the six months ended December 2, 2023, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 10.0 million and $ 3.1 million, respectively.

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

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

(In millions) November 30, 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 August 31, 2024, and June 1, 2024, the liability related to the supplier financing program was $ 1.9 million and $ 2.0 million, respectively.

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 November 30, 2024, and June 1, 2024, the liability related to the supplier financing program was $ 2.2 million and $ 2.0 million, respectively.

Accumulated Other Comprehensive Loss

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:

The following table provides an analysis of the changes in accumulated other comprehensive loss for the six months ended November 30, 2024, and December 2, 2023:

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

Balance at June 1, 2024 $ ( 105.7 ) $ ( 33.3 ) $ 46.3 $ ( 92.7 )

Other comprehensive income (loss), net of tax before reclassifications 15.4 — ( 29.1 ) ( 13.7 )

Other comprehensive (loss) income, net of tax before reclassifications ( 20.8 ) — ( 32.2 ) ( 53.0 )

Reclassification from accumulated other comprehensive loss - Other, net — 3.8 14.5 18.3

1 unchanged sentence

Net reclassifications — 2.9 14.5 17.4

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

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

Net current period other comprehensive (loss) income ( 20.8 ) 2.9 ( 17.7 ) ( 35.6 )

Balance at November 30, 2024 $ ( 126.5 ) $ ( 30.4 ) $ 28.6 $ ( 128.3 )

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

4 unchanged sentences

Net current period other comprehensive income (loss) 11.2 ( 0.1 ) ( 0.1 ) 11.0

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

Balance at December 2, 2023 $ ( 102.8 ) $ ( 23.9 ) $ 42.6 $ ( 84.1 )

Operating Segments

4 unchanged sentences

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, 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.

Management regularly reviews corporate costs and believes disclosing such information provides more visibility and transparency regarding how the chief operating decision maker reviews results of the Company.

1 unchanged sentence

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

Three Months Ended

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Americas Contract $ 504.2 $ 476.1 $ 958.8 $ 966.5

28 unchanged sentences

• 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 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

For the three months ended November 30, 2024, there were no costs incurred related to the Knoll Integration.

For the three months ended December 2, 2023, we incurred $ 6.9 million of costs related to the Knoll Integration which was comprised of $ 5.3 million of exit and disposal costs related to the consolidation of facilities and $ 1.6 million of other integration costs.

For the six months ended November 30, 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 six months ended December 2, 2023, we incurred $ 10.8 million of costs related to the Knoll Integration which was comprised of $ 8.7 million of exit and disposal costs related to the consolidation of facilities and $ 2.1 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 three months ended August 31, 2024:

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the six months ended November 30, 2024:

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

3 unchanged sentences

Non-cash costs — ( 19.0 ) ( 19.0 )

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.

November 30, 2024 $ — $ 0.7 $ 0.7

The Company expects that the remaining liability for the Knoll Integration as of November 30, 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

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 2, 2023

Americas Contract $ — $ 6.4 $ 22.5 $ 9.5

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.

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.

As of November 30, 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

4 unchanged sentences

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:

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the 2024 restructuring plan for the six months ended November 30, 2024:

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

2 unchanged sentences

Amounts Paid ( 6.1 ) — ( 6.1 )

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.

November 30, 2024 $ 3.9 $ — $ 3.9

The Company expects that remaining liability for the 2024 restructuring plan as of November 30, 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

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

Three Months Ended Six Months Ended

(In millions) November 30, 2024 December 2, 2023 November 30, 2024 December 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 $ 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 carrying value of these long-term notes receivable was $ 17.3 million and $ 17.9 million as of November 30, 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