What changed in this filing

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Item 1. Financial Statements

2025-03-31 compared with 2025-01-06 · 216 added, 136 removed, 520 unchanged (40% of the section changed)

2 unchanged sentences

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

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

(Unaudited) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

Net sales $ 876.2 $ 872.3 $ 2,708.1 $ 2,739.5

6 unchanged sentences

Total operating expenses 414.6 294.2 1,050.2 923.6

Operating earnings 62.5 60.4 77.7 100.7

Operating (loss) earnings ( 82.2 ) 42.8 ( 4.5 ) 143.5

Interest expense 19.1 18.4 59.4 57.4

Interest and other investment (income) expense ( 1.2 ) ( 1.3 ) ( 4.3 ) ( 4.8 )

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

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

Other expense (income), net 0.7 ( 1.8 ) ( 2.0 ) ( 2.0 )

(Loss) earnings before income taxes and equity income ( 100.8 ) 27.5 ( 57.6 ) 92.9

Income tax (benefit) expense ( 89.0 ) 4.4 ( 80.3 ) 19.0

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

Net earnings 35.2 34.4 34.7 50.5

Net (loss) earnings ( 11.7 ) 23.1 23.0 73.6

Net earnings attributable to redeemable noncontrolling interests 1.0 0.9 2.8 1.2

Net earnings attributable to MillerKnoll, Inc.

Net (loss) earnings attributable to MillerKnoll, Inc.

$ ( 12.7 ) $ 22.2 $ 20.2 $ 72.4

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

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

(Loss) earnings per share - basic $ ( 0.19 ) $ 0.31 $ 0.29 $ 0.98

(Loss) earnings per share - diluted $ ( 0.19 ) $ 0.30 $ 0.29 $ 0.97

Other comprehensive (loss) income, net of tax

1 unchanged sentence

Pension and post-retirement liability adjustments — ( 0.1 ) 2.9 ( 0.2 )

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

Unrealized (loss) gain on interest rate swap agreement ( 4.4 ) ( 1.1 ) ( 22.1 ) ( 1.2 )

Other comprehensive (loss) income, net of tax $ ( 21.2 ) $ ( 4.5 ) $ ( 56.8 ) $ 6.5

Comprehensive income (loss) 5.4 33.8 ( 0.9 ) 61.5

Comprehensive (loss) income ( 32.9 ) 18.6 ( 33.8 ) 80.1

Comprehensive income attributable to redeemable noncontrolling interests 1.0 0.9 2.8 1.2

Comprehensive income (loss) attributable to MillerKnoll, Inc.

Comprehensive (loss) income attributable to MillerKnoll, Inc.

$ ( 33.9 ) $ 17.7 $ ( 36.6 ) $ 78.9

3 unchanged sentences

(Dollars in millions, except share data)

(Unaudited) November 30, 2024 June 1, 2024

(Unaudited) March 1, 2025 June 1, 2024

Current Assets:

2 unchanged sentences

Unbilled accounts receivable 24.3 22.2

Inventories, net 430.6 428.6

Inventories 425.5 428.6

Prepaid expenses 184.1 66.5

38 unchanged sentences

Condensed Consolidated Statements of Cash Flows

(Dollars in millions) Six Months Ended

(Unaudited) November 30, 2024 December 2, 2023

(Dollars in millions) Nine Months Ended

(Unaudited) March 1, 2025 March 2, 2024

Cash Flows from Operating Activities:

4 unchanged sentences

Amortization of deferred financing costs 3.5 3.5

Bad debt expense 4.4 3.1

Loss on sale of equity method investment — 0.4

1 unchanged sentence

Deferred taxes ( 8.3 ) ( 0.3 )

Gain (loss) on sale of property 0.8 ( 0.4 )

Restructuring expense 4.2 8.7

Impairment expense 130.0 —

(Increase) decrease in current assets ( 146.0 ) 100.0

Increase (decrease) in current liabilities 18.0 ( 1.7 )

(Decrease) in current liabilities ( 4.9 ) ( 32.9 )

(Decrease) in non-current liabilities ( 0.6 ) ( 2.1 )

Other, net 0.7 ( 1.4 )

1 unchanged sentence

Cash Flows from Investing Activities:

Proceeds from sale of property 6.2 0.6

Advances of notes receivable ( 3.1 ) ( 10.6 )

11 unchanged sentences

Common stock repurchased and retired ( 84.8 ) ( 101.0 )

Distribution to noncontrolling interest ( 4.4 ) ( 2.8 )

Other, net 1.1 ( 0.4 )

1 unchanged sentence

Effect of Exchange Rate Changes on Cash and Cash Equivalents ( 11.1 ) 0.3

Net Decrease in Cash and Cash Equivalents ( 9.3 ) 2.3

Net (Decrease) Increase in Cash and Cash Equivalents ( 60.6 ) 0.1

Cash and Cash Equivalents, Beginning of Period 230.4 223.5

3 unchanged sentences

Condensed Consolidated Statements of Stockholders' Equity

Six Months Ended November 30, 2024

Nine Months Ended March 1, 2025

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

23 unchanged sentences

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

Six Months Ended December 2, 2023

Net (loss) — — — ( 12.7 ) — — ( 12.7 )

Other comprehensive income, net of tax — — — — ( 21.2 ) — ( 21.2 )

Stock-based compensation expense — — 6.1 — — — 6.1

Exercise of stock options 2,735 — 0.1 — — — 0.1

Restricted and performance stock units released 508 — 0.7 — — — 0.7

Employee stock purchase plan issuances 39,288 — 0.7 — — — 0.7

Repurchase and retirement of common stock ( 785,650 ) ( 0.2 ) ( 17.9 ) — — — ( 18.1 )

Directors' fees 46,614 — 1.0 — — — 1.0

Dividends declared ($ 0.1875 per share)

— — — ( 13.0 ) — — ( 13.0 )

Other — — ( 0.5 ) 0.2 — — ( 0.3 )

March 1, 2025 67,737,914 $ 13.5 $ 670.5 $ 719.6 $ ( 149.5 ) $ — $ 1,254.1

Nine Months Ended March 2, 2024

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

22 unchanged sentences

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

Net earnings — — — 22.2 — — 22.2

Other comprehensive income, net of tax — — — — ( 4.5 ) — ( 4.5 )

Stock-based compensation expense — — 5.4 — — — 5.4

Exercise of stock options 18,659 0.4 0.4

Restricted and performance stock units released 112,794 — 0.7 — — — 0.7

Employee stock purchase plan issuances 29,225 — — — — —

Repurchase and retirement of common stock ( 1,533,430 ) ( 0.3 ) ( 40.7 ) — — — ( 41.0 )

Deferred compensation plan — — — — — —

Directors Fees 31,379 — 0.8 — — — 0.8

Dividends declared ($ 0.1875 per share)

— — — ( 13.8 ) — — ( 13.8 )

Other — — 0.1 — — 0.1

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

See accompanying notes to Condensed Consolidated Financial Statements.

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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 November 30, 2024.

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").

Operating results for the three and nine months ended March 1, 2025, 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 fiscal year ending May 31, 2025 ("fiscal 2025") and the fiscal year ended June 1, 2024 ("fiscal 2024") both contain 52 weeks.

Segment Reorganization

Effective as of March 1, 2025, the last day of the third quarter of fiscal 2025, the Company implemented an organizational change that resulted in a change in the reportable segments.

The Company has recast historical results to reflect this change.

• The activities related to the Maharam, Spinneybeck|FilzFelt, Knoll Textiles, and Edelman brands, which were previously reported within the International Contract & Specialty segment, have been moved to the North America Contract segment.

• The activities related to the Holly Hunt brand, which were previously reported within the International Contract & Specialty segment, have been moved to the Global Retail segment.

• The activities related to Latin America Contract, which were previously reported within the Americas Contract segment, have been moved to the International Contract segment.

Below is a description of each reportable segment.

The North America Contract segment includes the operations associated with the design, sourcing, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout the United States and Canada as well as the global operations of the Spinneybeck|FilzFelt, Maharam, Edelman, and Knoll Textile brands.

The International Contract segment includes the operations associated with the design, sourcing, manufacture and sale of furniture products, indirectly or directly through an independent dealership network in Europe, the Middle East, Africa, Asia-Pacific, and Latin America.

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, along with the global operations of the Holly Hunt brand.

Cash and Cash Equivalents

5 unchanged sentences

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

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

(In millions) March 1, 2025 June 1, 2024

Gross cash position $ 110.9 $ 26.6

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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.

In January 2025, the FASB additionally issued ASU 2025-01, which clarified the effective date of ASU 2024-03 for entities that do not have a calendar year-end.

The update will be effective in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

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

3 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In millions) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

Single performance obligation

16 unchanged sentences

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

Three Months Ended Six Months Ended

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

Americas Contract:

Three Months Ended Nine Months Ended

(In millions) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

North America Contract:

Workplace $ 285.0 $ 275.9 $ 888.0 $ 900.4

2 unchanged sentences

Other 45.7 47.0 136.8 141.9

Total Americas Contract $ 504.2 $ 476.1 $ 958.8 $ 966.5

International Contract & Specialty:

Total North America Contract $ 468.2 $ 461.7 $ 1,469.1 $ 1,481.2

International Contract

Workplace $ 35.4 $ 40.7 $ 121.4 $ 126.9

2 unchanged sentences

Other 11.2 5.9 22.5 18.4

Total International Contract & Specialty $ 246.3 $ 241.2 $ 459.8 $ 469.5

Total International Contract $ 145.5 $ 153.1 $ 474.3 $ 471.9

Global Retail:

9 unchanged sentences

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

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) November 30, 2024 June 1, 2024

During the three and nine months ended March 1, 2025, the Company recognized Net sales of $ 3.9 million and $ 85.5 million, respectively, related to customer deposits that were included in the balance sheet as of June 1, 2024.

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.

(In millions) March 1, 2025 June 1, 2024

Finished goods and work in process $ 314.6 $ 314.3

4 unchanged sentences

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

(In millions) Americas Contract (1)

International Contract & Specialty Global Retail (2)

(In millions) North America Contract (1)

International Contract Global Retail (2)

Balance at June 1, 2024 $ 584.3 $ 154.0 $ 488.0 $ 1,226.3

Impairment charges — — ( 92.3 ) ( 92.3 )

Foreign currency translation adjustments ( 5.7 ) ( 2.8 ) ( 7.0 ) ( 15.5 )

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.

Balance at March 1, 2025

$ 578.6 $ 151.2 $ 388.7 $ 1,118.5

(1) North America Contract segment had accumulated goodwill impairments of $ 36.7 million as of March 1, 2025, and June 1, 2024.

(2) Global Retail segment had accumulated goodwill impairments of $ 181.1 million and $ 88.8 million as of March 1, 2025, and June 1, 2024 respectively.

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

1 unchanged sentence

June 1, 2024 $ 465.5

Impairment charges ( 37.7 )

Foreign currency translation adjustments ( 5.2 )

November 30, 2024 $ 462.5

March 1, 2025 $ 422.6

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.

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 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.

During the third 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.

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

Through this assessment management identified an impairment triggering event associated with lower-than-expected operating results.

This suggested that the fair value of one or more of our reporting units may have fallen below their carrying amount.

Accordingly, we performed a quantitative valuation of each reporting unit during the quarter.

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

These approaches are based on a discounted cash flow analysis and observable comparable company information that use several inputs, including:

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The Company selected the assumptions used in the financial forecasts using historical data, supplemented by current and anticipated market conditions, management’s long-term strategic plans, and guideline companies.

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 second quarter of fiscal year 2025.

As a result of the third quarter fiscal year 2025 goodwill impairment test, the Company recognized a total non-cash impairment charge of $ 30.1 million and $ 62.2 million in its Global Retail and Holly Hunt reporting units, respectively.

The goodwill impairment charges were primarily caused by reduced sales and profitability projections as well as an increase in the discount rate.

After these impairment charges and before the changes in reporting units resulting from our segment re-organization, the Global Retail and Holly Hunt reporting units had remaining goodwill of $ 357.0 million and $ 33.0 million, respectively.

Additionally, the quantitative assessment in the third quarter of fiscal year 2025 resulted in the fair values of the Americas Contract, International Contract and Coverings reporting units exceeding their respective carrying values (the "cushion") by 32 %, 63 % and 10 %, respectively.

Generally, changes in estimates of expected future cash flows would have a similar effect on the estimated fair value of the reporting unit.

For example, a 1.0% decrease in estimated annual future cash flows would decrease the estimated fair value of the reporting unit by approximately 1.0%.

The estimated long-term growth rate can have a significant impact on the estimated future cash flows, and therefore, the fair value of each reporting unit.

Of the other key assumptions that impact the estimated fair values, most reporting units have the greatest sensitivity to changes in the estimated discount rate.

In completing the goodwill impairment test, the respective fair values were estimated using discount rates ranging from 12.0 % to 15.0 % and long-term growth rates ranging from 2.5 % to 3.0 %.

The Company evaluated the sensitivity of changes in projected growth rates, discount rates and long-term growth rates for the reporting units with goodwill remaining as of March 1, 2025.

• A decrease in the forecasted sales by 500 basis points in all years or an increase in the discount rate of 100 basis points, leaving all other assumptions static, would not result in impairment for the Americas Contract, International Contract or Coverings reporting units.

• A decrease in the operating margin of 100 basis points in all years, leaving all other assumptions static, would not result in impairment for the Americas Contract or International Contract reporting units.

For the Coverings reporting unit it would result in impairment of $ 3.0 million.

• A reduction in the projected sales growth rate, decline in operating margins, an increase in the discount rate or a decline in the long-term sales growth rate for the Holly Hunt or Global Retail reporting units may result in the need to record an additional impairment charge.

Additionally, in the third quarter of fiscal year 2025 the Company implemented an organizational change that resulted in a change in the reportable segments and reporting units.

As a result, the Company performed the required impairment assessments directly before and immediately after the change in reporting units.

As a result of this change, $ 26.1 million of goodwill was reassigned from the Americas Contract reporting unit to the International Contract reporting unit, based on the relative fair value approach.

Additionally, the $ 33.0 million of remaining goodwill for the Holly Hunt reporting unit was moved to the Global Retail reporting unit.

Subsequent to this change the Company has four reporting units, North America Contract, International Contract, Global Retail and Coverings.

Indefinite-Lived Intangibles

The Company evaluates indefinite-lived trade name intangible assets for impairment annually.

The Company also tests for impairment if events and circumstances indicate that it is more likely than not that the fair value of an indefinite-lived intangible asset is below its carrying amount.

An impairment charge is recorded if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value on the measurement date.

During the third quarter of fiscal year 2025, in conjunction with the goodwill impairment triggering event discussed above, the Company assessed its indefinite-lived trade names for indicators of impairment.

As a result, the Company recognized $ 37.7 million in non-cash impairment charges related to the Knoll and Muuto trade names.

The Company performed quantitative assessments during the third quarter of fiscal year 2025 in testing the indefinite-lived intangible assets which showed indicators that impairment was more likely than not.

In performing this assessment, we estimate the fair value of these intangible assets using the relief-from-royalty method which requires assumptions related to:

• actual and forecasted revenue growth rates,

• assumed royalty rates that could be payable if we did not own the trademark, and

• a market participant discount rate based on a weighted-average cost of capital.

In completing the third quarter fiscal year 2025 assessment of indefinite-lived trade name impairment, the respective fair values were estimated using discount rates ranging from 12.75 % to 17.25 %, royalty rates ranging from 1.00 % to 3.00 %, and long-term growth rates ranging from 2.50 % to 3.00 %.

The Company’s estimates of the fair value of its indefinite-lived intangible assets are sensitive to changes in the key assumptions above as well as projected financial performance.

If the estimated cash flows related to the Company's indefinite-lived intangibles were to decline in future periods, the Company may need to record additional impairment charges.

Employee Benefit Plans

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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 Company recognized a pension plan termination gain of $ 1.5 million during the nine months ended March 1, 2025, 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 November 30, 2024 Three Months Ended December 2, 2023

Three Months Ended March 1, 2025 Three Months Ended March 2, 2024

(In millions) Domestic International Domestic International

Service cost $ 0.5 $ — $ — $ —

Interest cost $ — $ 1.0 $ 1.5 $ 1.0

3 unchanged sentences

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

Net periodic benefit (income) cost $ — $ ( 0.1 ) $ ( 0.6 ) $ ( 0.2 )

Nine Months Ended March 1, 2025 Nine Months Ended March 2, 2024

(In millions) Domestic International Domestic International

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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 Six Months Ended

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

Net earnings attributable to MillerKnoll, Inc.

Three Months Ended Nine Months Ended

March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

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

- in millions $ ( 12.7 ) $ 22.2 $ 20.2 $ 72.4

9 unchanged sentences

Stock-Based Compensation

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

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 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

Stock-based compensation expense $ 6.1 $ 5.4 $ 24.0 $ 17.1

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 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's process for determining the provision for income taxes for the three and nine months ended March 1, 2025, 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 88.3 % and 16.0 %, respectively, for the three month periods ended March 1, 2025, and March 2, 2024.

The year over year change in the effective tax rate for the three months ended March 1, 2025, resulted primarily from the current quarter having impacts of the estimated annual effective tax rate on the pre-tax loss driven by the impairment of indefinite-lived intangible assets and the prior year quarter having no comparable impacts.

For the three months ended March 1, 2025, the effective tax rate is higher than the United States federal statutory rate due to the current quarter having impacts of the estimated annual effective tax rate on the pre-tax loss driven by the impairment of indefinite-lived intangible assets.

For the three months ended March 2, 2024, the effective tax rate was 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.

The effective tax rates were 139.5 % and 20.5 %, respectively, for the nine months ended March 1, 2025, and March 2, 2024.

The year over year increase in the effective rate for the nine months ended March 1, 2025, resulted primarily from the current nine months having impacts of the estimated annual effective tax rate on the pre-tax loss driven by the impairment of indefinite-lived intangible assets and the prior year quarter having no comparable impacts.

For the nine months ended March 1, 2025, the effective tax rate is higher than the United States federal statutory rate due to having impacts of the estimated annual effective tax rate on the pre-tax loss driven by the impairment of indefinite-lived intangible assets.

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 discrete impacts from return to provision true-ups related to the United States research and development tax credit.

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 six months ended November 30, 2024, and December 2, 2023.

Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three and nine months ended March 1, 2025, and March 2, 2024.

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

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

(In millions) March 1, 2025 June 1, 2024

Liability for interest and penalties $ 1.0 $ 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) November 30, 2024 June 1, 2024

(In millions) March 1, 2025 June 1, 2024

Carrying value $ 1,341.8 $ 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 November 30, 2024, and June 1, 2024.

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

(In millions) March 1, 2025 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 November 30, 2024, and June 1, 2024.

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

(In millions) March 1, 2025 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 November 30, 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 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 )

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 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

(Loss) gain recognized in Other comprehensive loss (income) (effective portion) $ ( 4.4 ) $ ( 1.1 ) $ ( 22.1 ) $ ( 1.2 )

Gain reclassified from Accumulated other comprehensive loss into earnings $ 5.5 $ 7.9 $ 20.1 $ 23.0

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.

There were no gains or losses recognized in earnings for hedge ineffectiveness for the three and nine month periods ended March 1, 2025, and March 2, 2024.

The amount of gain expected to be reclassified from Accumulated other comprehensive income into earnings during the next twelve months is $ 18.2 million, net of tax is $ 13.7 million.

Redeemable Noncontrolling Interests

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

Changes in the Company's redeemable noncontrolling interest in HAY for the nine months ended March 1, 2025, and March 2, 2024, are as follows:

(In millions) March 1, 2025 March 2, 2024

Beginning Balance $ 73.9 $ 107.6

Net income attributable to redeemable noncontrolling interests 2.8 1.2

Dividend attributable to redeemable noncontrolling interests ( 4.3 ) ( 2.8 )

Cumulative translation adjustments attributable to redeemable noncontrolling interests ( 0.7 ) —

11 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In millions) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

Accrual Balance — beginning $ 70.0 $ 71.3 $ 70.4 $ 73.9

7 unchanged sentences

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

As of November 30, 2024, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 9.3 million.

As of March 1, 2025, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 8.9 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 November 30, 2024, or June 1, 2024.

Accordingly, no liability has been recorded in respect to these bonds as of either March 1, 2025, 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 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.

As of March 1, 2025, 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 November 30, 2024, or June 1, 2024.

Accordingly, no liability has been recorded with respect to these arrangements as of March 1, 2025, or June 1, 2024.

Contingencies

2 unchanged sentences

Short-Term Borrowings and Long-Term Debt

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

Short-term borrowings and long-term debt as of March 1, 2025, and June 1, 2024, consisted of the following:

(In millions) March 1, 2025 June 1, 2024

Syndicated revolving line of credit, due July 2026 $ 414.0 $ 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 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.

During the nine months ended March 1, 2025, the Company made total principal payments on term loans "A" and "B" in the amounts of $ 25.0 million and $ 4.7 million, respectively.

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.

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

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

(In millions) March 1, 2025 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 November 30, 2024, and June 1, 2024, the liability related to the supplier financing program was $ 2.2 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 March 1, 2025, and June 1, 2024, the liability related to the supplier financing program was $ 1.9 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 six months ended November 30, 2024, and December 2, 2023:

The following table provides an analysis of the changes in accumulated other comprehensive loss for the nine months ended March 1, 2025, and March 2, 2024:

(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 (loss) income ( 37.6 ) 2.9 ( 22.1 ) ( 56.8 )

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

Balance at March 1, 2025 $ ( 143.3 ) $ ( 30.4 ) $ 24.2 $ ( 149.5 )

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

4 unchanged sentences

Net current period other comprehensive income (loss) 7.9 ( 0.2 ) ( 1.2 ) 6.5

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

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

Operating Segments

The Company's reportable segments consist of three segments:

Americas Contract, International Contract & Specialty, and Global Retail.

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|FilzFelt, 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, 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, and administrative costs.

Effective on March 1, 2025, the last day of the third quarter of fiscal year 2025 the Company implemented an organizational change that resulted in a change in reportable segments.

The Company has restated historical results to reflect this change.

As more fully described in Note 1 of the Condensed Consolidated Financial Statements, under our new reportable segments, there are three reportable segments consisting of North America Contract, International Contract and Global Retail.

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 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

International Contract & Specialty 246.3 241.2 459.8 469.5

Three Months Ended Nine Months Ended

(In millions) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

North America Contract $ 468.2 $ 461.7 $ 1,469.1 $ 1,481.2

International Contract 145.5 153.1 474.3 471.9

Global Retail 262.5 257.5 764.7 786.4

1 unchanged sentence

Operating Earnings (Loss):

Americas Contract $ 47.5 $ 35.1 $ 64.6 $ 76.5

International Contract & Specialty 23.8 23.8 33.1 35.2

North America Contract $ 17.0 $ 25.5 $ 82.6 $ 106.5

International Contract 9.9 17.5 41.6 42.7

Global Retail ( 94.4 ) 12.1 ( 80.8 ) 34.5

21 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 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.

For the three months ended March 1, 2025, there were no costs incurred related to the Knoll Integration.

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 $ 1.0 million of other integration costs.

For the nine months ended March 1, 2025, 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 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.

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 six months ended November 30, 2024:

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the nine months ended March 1, 2025:

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

3 unchanged sentences

Non-cash costs — ( 19.0 ) ( 19.0 )

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.

March 1, 2025 $ — $ 0.4 $ 0.4

The Company expects that the remaining liability for the Knoll Integration as of March 1, 2025, 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 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

International Contract & Specialty — 0.5 5.5 1.2

Three Months Ended Nine Months Ended

(In millions) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

North America Contract $ — $ 7.6 $ 24.8 $ 18.1

International Contract — — 3.2 0.2

Global Retail — — 0.3 —

3 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 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.

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

The sale of the manufacturing facility was completed in the third quarter of fiscal 2025, resulting in a gain of approximately $ 2.8 million included within Operating expenses in the Consolidated Statements of Comprehensive Income.

Restructuring Activities

During the third quarter of fiscal year 2025, the Company announced an action related to the 2025 restructuring plan ("2025 restructuring plan") to reduce expenses.

This restructuring activity included involuntary reductions in workforces.

During the three and nine months ended March 1, 2025, the Company incurred $ 4.2 million of restructuring charges related to the 2025 restructuring plan.

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

3 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 six months ended November 30, 2024:

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

GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the 2024 restructuring plan for the nine months ended March 1, 2025:

Severance and Employee Related

(In millions) 2025 Restructuring Plan 2024 Restructuring Plan Total

June 1, 2024 $ — $ 10.0 $ 10.0

1 unchanged sentence

Amounts Paid ( 0.5 ) ( 7.9 ) ( 8.4 )

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.

March 1, 2025 $ 3.7 $ 2.1 $ 5.8

The Company expects that remaining liability for the 2024 restructuring plan as of March 1, 2025, will be paid in fiscal year 2025.

The Company expects that remaining liability for the 2025 restructuring plan as of March 1, 2025, will be paid in fiscal year 2025 and fiscal 2026.

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

Three Months Ended Six Months Ended

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

Americas Contract $ — $ — $ — $ 4.3

International Contract & Specialty — 0.8 — 1.5

Three Months Ended Nine Months Ended

(In millions) March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024

North America Contract $ 2.4 $ 1.5 $ 2.4 $ 6.1

International Contract 1.7 0.1 1.7 1.3

Global Retail 0.1 0.1 0.1 1.3

2 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 $ 17.3 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 carrying value of these long-term notes receivable was $ 14.1 million and $ 17.9 million as of March 1, 2025, 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