MILLERKNOLL, INC. 10-Q

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions, except share data) The following is management's discussion and analysis of certain significant factors that affected the Company's financial condition, earnings, and cash flows during the periods included in the accompanying Condensed Consolidated Financial Statements and should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2025. References to “Notes” are to the footnotes included in the accompanying Condensed Consolidated Financial Statements. Business Overview The Company researches, designs, manufactures, sells, and distributes interior furnishings for use in various environments including residential, office, healthcare, and educational settings and provides related services that support organizations and individuals all over the world. The Company's products are sold primarily through independent contract office furniture dealers, direct customer sales, owned and independent retailers and the Company’s eCommerce platforms. The following is a summary of results for the three months ended August 30, 2025: • Net sales were $955.7 million and orders were $885.4 million, representing an increase of 10.9% and a decrease of 5.4%, respectively, when compared to the same quarter of the prior year. On an organic basis, which excludes the impact of foreign currency translation, Net sales were $947.4 million (*) and orders were $877.5 million (*) , representing an organic increase of 10.0% (*) and an organic decrease of 6.2% (*) , respectively, when compared to the same quarter of the prior year. • Gross margin in the first quarter was 38.5%, a decrease of 50 basis points when compared to the same quarter of the prior year, related primarily to the impact of increased net tariff-related costs in the period, which were offset in part by benefit from leverage on higher sales volume. • Operating expenses decreased $6.5 million or 2.0% as compared to the same quarter of the prior year. The decrease was driven primarily by a $27.8 million decrease in integration charges as compared to the same period of the prior year. This decrease was offset in part by an increase in variable sales expenses, compensation and benefit costs and costs associated with the opening of additional retail stores. • The effective tax rate was 26.5% compared to 66.2% for the same quarter of the prior year. The change as compared to the prior year resulted primarily from the level of net income or net loss in the periods as well as the impact of discrete items in each of the periods. • Diluted earnings per share in the quarter was $0.29 as compared to diluted loss per share of $0.02 in the prior year. Adjusted diluted earnings per share was $0.45 (*) , a 25.0% (*) increase as compared to the prior year quarter. (*) Non-GAAP measurements; see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures." The following summary includes the Company's view of the economic environment in which it operates: • The North America Contract segment in the first quarter reported Net sales totaling $533.9 million, up 12.1% compared to the prior year period on a reported and organic basis. North America Contract had new orders of $492.2 million, which represents a decrease of 8.2% from the prior year on both a reported and organic basis. • The International Contract segment delivered Net sales in the first quarter of $167.5 million, an increase of 14.4% from the year-ago period on a reported basis and an increase of 11.3% (*) organically. New orders in this segment totaled $154.5 million, representing a year-over-year decrease of 6.5% on a reported basis and a decrease of 9.2% (*) organically. • Net sales in the first quarter for the Global Retail segment totaled $254.3 million, an increase of 6.4% over the same quarter last year on a reported basis and an increase of 4.9% (*) organically. Orders in the quarter totaled $238.7 million, up 1.7% compared to the same period last year on a reported basis and up 0.3% (*) organically. (*) Non-GAAP measurements; see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures." 26 The Company's fiscal year is the 52 or 53 week period ending on the Saturday closest to May 31. The fiscal year ending May 30, 2026 ("fiscal 2026") and the fiscal year ended May 31, 2025 ("fiscal 2025") both contain 52 weeks. The remaining sections within Item 2 include additional analysis of the three months ended August 30, 2025, including discussion of significant variances compared to the prior year periods. Reconciliation of Non-GAAP Financial Measures This report contains non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. These non-GAAP financial measures are not measurements of our financial performance under GAAP and should not be considered an alternative to the related GAAP measurement. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included within this report. The Company believes these non-GAAP measures are useful for investors as they provide financial information on a more comparative basis for the periods presented. The non-GAAP financial measures referenced within this report include: Adjusted Earnings per Share and Organic Growth (Decline). Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, integration charges, restructuring expenses, Knoll pension plan termination charges, debt extinguishment charges and the related tax effect of these adjustments. These adjustments are described further below. Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects. 27 The adjustments made to arrive at these non-GAAP financial measures are as follows: • Amortization of Knoll purchased intangibles: Includes expenses associated with the amortization of acquisition related intangibles acquired as part of the Knoll acquisition. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. We exclude the impact of the amortization of Knoll purchased intangibles as such non-cash amounts were significantly impacted by the size of the Knoll acquisition. Furthermore, we believe that this adjustment enables better comparison of our results as Amortization of Knoll Purchased Intangibles will not recur in future periods once such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. Although we exclude the Amortization of Knoll Purchased Intangibles in these non-GAAP measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. • Integration charges: Knoll integration-related costs include severance, asset impairment charges associated with lease and operations facility consolidation activity, and expenses related to synergy realization efforts and reorganization initiatives. • Restructuring charges: Includes costs associated with actions involving targeted workforce reductions, facility consolidation charges, and accelerated depreciation of fixed assets. • Knoll pension plan termination charges: Includes expenses incurred associated with the termination of the Knoll pension plan which was completed in the second quarter of fiscal year 2025. • Debt extinguishment charges: Includes expenses associated with the extinguishment of debt. We excluded these items from our non-GAAP measures because they relate to a specific transaction and are not reflective of our ongoing financial performance. • Tax related items: We excluded the income tax benefit/provision effect of the tax related items from our non-GAAP measures because they are not associated with the tax expense on our ongoing operating results. The following tables reconcile Net sales to Net sales, organic for the periods ended as indicated below: Three Months Ended August 30, 2025 North America Contract International Contract Global Retail Total Net sales, as reported $ 533.9 $ 167.5 $ 254.3 $ 955.7 % change from PY 12.1 % 14.4 % 6.4 % 10.9 % Adjustments Currency translation effects (1) (0.1) (4.6) (3.6) (8.3) Net sales, organic $ 533.8 $ 162.9 $ 250.7 $ 947.4 % change from PY 12.1 % 11.3 % 4.9 % 10.0 % Three Months Ended August 31, 2024 North America Contract International Contract Global Retail Total Net sales, as reported $ 476.2 $ 146.4 $ 238.9 $ 861.5 (1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period. 28 The following tables reconcile orders as reported to organic orders for the periods ended as indicated below: Three Months Ended August 30, 2025 North America Contract International Contract Global Retail Total Orders, as reported $ 492.2 $ 154.5 $ 238.7 $ 885.4 % change from PY (8.2) % (6.5) % 1.7 % (5.4) % Adjustments Currency translation effects (1) (0.1) (4.5) (3.3) (7.9) Orders, organic $ 492.1 $ 150.0 $ 235.4 $ 877.5 % change from PY (8.2) % (9.2) % 0.3 % (6.2) % Three Months Ended August 31, 2024 North America Contract International Contract Global Retail Total Orders, as reported $ 536.0 $ 165.2 $ 234.7 $ 935.9 (1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period. The following table reconciles earnings per share - diluted to adjusted earnings per share - diluted for the periods ended as indicated below: Three Months Ended August 30, 2025 August 31, 2024 Earnings (loss) per share - diluted $ 0.29 $ (0.02) Add: Amortization of Knoll purchased intangibles 0.09 0.08 Add: Integration charges — 0.40 Add: Restructuring charges 0.01 — Add: Debt extinguishment charges 0.11 — Add: Knoll pension plan termination charges — 0.01 Tax impact on adjustments (0.05) (0.11) Adjusted earnings per share - diluted $ 0.45 $ 0.36 Weighted average shares outstanding (used for calculating adjusted earnings per share) – diluted 69,194,506 70,206,373 29 Key Highlights The following table presents certain key highlights from the results of operations for the three months ended: Three Months Ended (In millions, except share data) August 30, 2025 August 31, 2024 % Change Net sales $ 955.7 $ 861.5 10.9 % Cost of sales 587.6 525.2 11.9 % Gross margin 368.1 336.3 9.5 % Operating expenses 314.6 321.1 (2.0) % Operating earnings 53.5 15.2 252.0 % Other expenses, net 24.8 16.9 46.7 % Earnings (loss) before income taxes and equity income 28.7 (1.7) N/A Income tax expense (benefit) 7.6 (1.1) N/A Equity earnings (loss) from nonconsolidated affiliates, net of tax — 0.1 N/A Net earnings (loss) 21.1 (0.5) N/A Net earnings attributable to redeemable noncontrolling interests 0.9 0.7 28.6 % Net earnings (loss) attributable to MillerKnoll, Inc. $ 20.2 $ (1.2) N/A Earnings (loss) per share - basic $ 0.29 $ (0.02) N/A Orders $ 885.4 $ 935.9 (5.4) % Backlog $ 690.9 $ 758.0 (8.9) % The following table presents select components of the Company's Condensed Consolidated Statements of Comprehensive Income (Loss) as a percentage of Net sales, for the three months ended: Three Months Ended August 30, 2025 August 31, 2024 Net sales 100.0 % 100.0 % Cost of sales 61.5 % 61.0 % Gross margin 38.5 % 39.0 % Operating expenses 32.9 % 37.3 % Operating earnings 5.6 % 1.8 % Other expenses, net 2.6 % 2.0 % Earnings (loss) before income taxes and equity income 3.0 % (0.2) % Income tax expense (benefit) 0.8 % (0.1) % Net earnings (loss) 2.2 % (0.1) % Net earnings attributable to redeemable noncontrolling interests 0.1 % 0.1 % Net earnings (loss) attributable to MillerKnoll, Inc. 2.1 % (0.1) % 30 Net Sales The following chart presents graphically the primary drivers of the year-over-year change in Net sales for the three months ended August 30, 2025. The amounts presented in the graph are expressed in millions and have been rounded. Net sales increased $94.2 million or 10.9% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The increase was primarily driven by: • Higher sales volumes in the North America Contract, International Contract, and Global Retail segments, contributed approximately $54 million, $21 million, $9 million, respectively. • Favorable foreign currency translation, which increased net sales by approximately $8 million. • Price increases, net of incremental discounting, positively impacted net sales by approximately $2 million. This includes the favorable impact of pricing actions taken to help offset tariff cost pressures. Gross Margin Gross margin was 38.5% in the first quarter of fiscal 2026 as compared to 39.0% in the first quarter of fiscal 2025. The year-over-year change in gross margin percentage was primarily driven by the following factors: • Tariff-related costs, net of pricing actions taken to help offset costs, adversely impacted gross margin by approximately 110 basis points. • These impacts were partially offset by favorable leverage on fixed costs due to higher sales volumes. 31 Operating Expenses The following chart presents graphically the primary drivers of the year-over-year change in Operating expenses for the three months ended August 30, 2025. The amounts presented in the graphs are expressed in millions and have been rounded. Operating expenses decreased by $6.5 million or 2.0% in the first quarter of fiscal 2026 compared to the prior year period. The following factors contributed to the change: • A reduction in acquisition-related integration charges, which totaled approximately $28 million . This benefit was partially offset by: • Increased fixed and variable compensation costs of approximately $9 million. • Variable selling costs, including sales-based commissions and royalty expenses which rose by approximately $8 million compared to the prior year period. • Incremental costs of $3 million associated with the expansion of our retail store footprint. • Foreign currency translation also contributed an unfavorable impact of approximately $2 million relative to the prior year. Other Income/Expense During the three months ended August 30, 2025, net Other expense was $24.8 million, representing an increase of $7.9 million compared to the same period in the prior year. The change was primarily driven by a loss on extinguishment of debt of approximately $7.8 million incurred in connection with the refinancing of term loan debt during the current period. Income Taxes See Note 8 of the Condensed Consolidated Financial Statements for additional information. 32 Operating Segment Results The business is comprised of various operating segments as defined by generally accepted accounting principles in the United States. These operating segments are determined on the basis of how the Company internally reports and evaluates financial information used to make operating decisions. 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. 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 directly or indirectly 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. 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 acquisition-related costs. For descriptions of each segment, refer to Note 13 of the Condensed Consolidated Financial Statements. The charts below present the relative mix of net sales and operating earnings across each of the Company's segments during the three month period ended August 30, 2025. This is followed by a discussion of the Company's results, by reportable segment. The amounts presented in the charts are in millions and have been rounded. 33 North America Contract Three Months Ended (Dollars in millions) August 30, 2025 August 31, 2024 Change Net sales $ 533.9 $ 476.2 $ 57.7 Gross margin 196.0 171.7 24.3 Gross margin % 36.7 % 36.1 % 0.6 % Operating earnings 56.9 16.1 40.8 Operating earnings % 10.7 % 3.4 % 7.3 % For the three month comparative period, Net sales increased 12.1% (*) on both a reported and an organic basis compared to the prior year period. This growth was primarily driven by: • Increased sales volumes within the segment, contributing approximately $54 million to the increase; • Price increases, net of incremental discounting positively impacted net sales by approximately $4 million. This includes the favorable impact of tariff-related pricing actions. (*) Non-GAAP measurements; see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures." For the three month comparative period, operating earnings increased $40.8 million, or 253.4%, over the prior year period due to: • Increased Gross margin of $24.3 million due to the increase in sales noted above and an increase in gross margin percentage of 60 basis points. The increase in gross margin percentage was due primarily to: ◦ Favorable leverage on fixed costs due to higher sales volumes, which contributed approximately 110 basis points to gross margin improvement. ◦ Reduced freight and product distribution costs increased margin by approximately 80 basis points. ◦ These were partially offset by the impact of tariff-related costs, which more than offset pricing actions taken to help offset tariffs. The net impact of tariffs in the quarter as compared to the prior year adversely impacted gross margin by approximately 130 basis points. • Decreased Operating expenses of $16.5 million driven primarily by: ◦ A reduction in acquisition-related integration charges, which totaled approximately $25 million. This benefit was partially offset by increased variable selling costs, including sales-based commissions and royalty expenses. 34 International Contract Three Months Ended (Dollars in millions) August 30, 2025 August 31, 2024 Change Net sales $ 167.5 $ 146.4 $ 21.1 Gross margin 59.2 53.9 5.3 Gross margin % 35.3 % 36.8 % (1.5) % Operating earnings 13.5 9.5 4.0 Operating earnings % 8.1 % 6.5 % 1.6 % For the three month comparative period, Net sales increased 14.4%, or 11.3% (*) on an organic basis compared to the prior year period. This growth was primarily driven by: • Higher sales volumes within the segment, contributing approximately $21 million to the increase; • Favorable foreign currency translation, which increased net sales by approximately $5 million. • These gains were partially offset by incremental discounting attributable to regional and product sales mix, net of price increases, which adversely impacted net sales by approximately $5 million. (*) Non-GAAP measurements; see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures." For the three month comparative period, operating earnings increased $4.0 million or 42.1%, over the prior year period due to: • Increased Gross margin of $5.3 million driven by the higher sales volumes explained above, which more than offset a decline in gross margin percentage of 150 basis points. The decrease in gross margin percentage was due primarily to: ◦ Incremental discounting, net of price increases attributable to regional and product sales mix, resulted in a negative impact of approximately 240 basis points. ◦ Tariff-related costs adversely impacted gross margin by approximately 50 basis points. ◦ Unfavorable foreign currency translation further reduced margin by approximately 30 basis points. ◦ These pressures were partially offset by favorable operating leverage on fixed costs resulting from increased sales volumes, which contributed approximately 170 basis points to margin improvement. • Increased Operating expenses of $1.3 million. The following factors contributed to the change: ◦ Increased fixed and variable compensation costs of $3 million. ◦ Foreign currency translation which contributed an unfavorable impact of approximately $1 million relative to the prior year. ◦ These increases were partially offset by a reduction in acquisition-related integration charges, which totaled approximately $3 million. Global Retail Three Months Ended (Dollars in millions) August 30, 2025 August 31, 2024 Change Net sales $ 254.3 $ 238.9 $ 15.4 Gross margin 112.9 110.7 2.2 Gross margin % 44.4 % 46.3 % (1.9) % Operating earnings 1.4 5.3 (3.9) Operating earnings % 0.6 % 2.2 % (1.6) % 35 For the three month comparative period, Net sales increased 6.4%, and 4.9% (*) on an organic basis compared to the prior year period. This growth was primarily driven by: • Higher sales volumes within the segment, contributing approximately $9 million to the increase. • Favorable foreign currency translation, which increased net sales by approximately $3 million. • Price increases, net of incremental discounting positively impacted net sales by approximately $3 million. This includes the favorable impact of pricing actions taken to help offset tariff cost pressures. (*) Non-GAAP measurements; see accompanying reconciliations and explanations under the heading "Reconciliation of Non-GAAP Financial Measures." For the three month comparative period, Operating earnings decreased $3.9 million or 73.6% as compared to the prior year period due to: • Increased Gross margin of $2.2 million driven by the higher sales volumes explained above, which was offset by a decline in gross margin percentage of 190 basis points. The decrease in gross margin percentage was due primarily to: ◦ Increased freight and product distribution costs, net of freight revenue, as compared to the same period of the prior year which reduced margin by approximately 160 basis points. ◦ Tariff-related costs, net of pricing actions taken to help offset costs, which adversely impacted gross margin by approximately 50 basis points. ◦ Unfavorable foreign currency translation further reduced margin by approximately 40 basis points. ◦ These margin percentage pressures were partially offset by favorable operating leverage on fixed costs driven by increased sales volumes and a more favorable product mix which added approximately 60 basis points to margin improvement. • Increased Operating expenses of $6.1 million. The following factors contributed to the change: ◦ Increased fixed and variable compensation costs of approximately $3 million. ◦ Incremental costs of $3 million associated with the expansion of our retail store footprint. Corporate Corporate unallocated expenses totaled $18.3 million for the first quarter of fiscal 2026, an increase of $2.6 million from the first quarter of fiscal 2025 related primarily to fixed and variable compensation expense. Liquidity and Capital Resources The table below summarizes the net change in Cash and cash equivalents for the three months ended as indicated. (In millions) August 30, 2025 August 31, 2024 Cash provided by (used in): Operating activities $ 9.4 $ 21.1 Investing activities (30.5) (22.3) Financing activities (9.2) (20.3) Effect of exchange rate changes 3.8 0.8 Net change in Cash and cash equivalents $ (26.5) $ (20.7) 36 Cash Flows - Operating Activities The principal source of our operating cash flow is net earnings, meaning cash receipts from the sale of our products, net of costs to manufacture, distribute, and market our products. Net cash provided by operating activities for the three months ended August 30, 2025, totaled $9.4 million compared to $21.1 million in the same period of the prior year. The decrease in cash inflow is due primarily to a net increase in working capital. Our working capital consists primarily of receivables from customers, inventory, prepaid expenses, accounts payable, accrued compensation, and accrued other expenses. The following all affect these account balances: • Fluctuations in inventory levels; and • The timing of collection of our receivables; and • Changes in accruals related to variable compensation. Cash Flows - Investing Activities Cash used in investing activities for the three months ended August 30, 2025, was $30.5 million, as compared to $22.3 million in the same period of the prior year. The increase was primarily driven by higher capital expenditures in the current year. At the end of the first quarter of fiscal 2026, there were outstanding commitments for capital purchases of $14.9 million. The Company plans to fund these commitments through a combination of cash on hand and cash flows from operations. The Company expects full-year capital purchases to be between $120 million and $130 million, which will be primarily related to investments in the Company's facilities, (including manufacturing, showrooms, and retail stores) and equipment as well as investments associated with achieving the Company's sustainability goals. This compares to full-year capital spending of $107.6 million in fiscal 2025. Capital expenditures for the first three months of fiscal 2026 were $30.7 million compared to $22.6 million for the three months ended August 31, 2024. Cash Flows - Financing Activities Cash used in financing activities for the three months ended August 30, 2025, was $9.2 million, as compared to $20.3 million in the same period of the prior year. The decrease in cash used in the current year, compared to the prior year, was primarily due to: • The Company repurchased 377,995 shares at a cost of $7.2 million in the current period as compared to 1,544,733 share repurchases totaling $43.7 million in the same period of the prior year. • Net borrowings on the credit agreement of $68.9 million in the current period compared to net borrowings of $43.1 million in the same period of the prior year. This was offset in part by: • The refinancing of Term Loan B resulted in a net cash outflow of $58.7 million in the current period. In the prior year, term loan debt was reduced by $9.1 million through scheduled principal payments. • Deferred financing costs of $1.2 million were incurred in the current period in connection with the refinancing of Term Loan B. Sources of Liquidity The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors. At the end of the first quarter of fiscal 2026, the Company had a well-positioned balance sheet and liquidity profile. The Company has access to liquidity through credit facilities as well as cash and cash equivalents. These sources have been summarized below. For additional information, refer to Note 11 to the Condensed Consolidated Financial Statements. (In millions) August 30, 2025 May 31, 2025 Cash and cash equivalents $ 167.2 $ 193.7 Availability under syndicated revolving line of credit 313.3 382.2 Total liquidity $ 480.5 $ 575.9 Of the Cash and cash equivalents noted above at the end of the first quarter of fiscal 2026, the Company had $158.6 million of Cash and cash equivalents held outside the United States. 37 The Company’s syndicated revolving line of credit, which matures in April 2030, provides the Company with up to $725 million in revolving variable interest borrowing capacity and allows the Company to borrow incremental amounts, at its option, subject to negotiated terms as outlined in the agreement. Outstanding borrowings bear interest at rates based on the prime rate, federal funds rate, SOFR or negotiated terms as outlined in the agreement. As of August 30, 2025, the total debt outstanding related to borrowings under the syndicated revolving line of credit was $399.7 million with available borrowings on this facility of $313.3 million. The Company intends to repatriate $137.3 million of undistributed foreign earnings all of which is held in cash in certain foreign jurisdictions with the remainder of undistributed earnings outside the U.S. recorded in working capital. The Company has recorded a $3.5 million deferred tax liability related to foreign withholding taxes on these future dividends received in the U.S. from foreign subsidiaries. A significant portion of the $137.3 million of undistributed foreign earnings was previously taxed under the U.S. Tax Cut and Jobs Act (TCJA). The Company intends to remain indefinitely reinvested in the remaining undistributed earnings outside the U.S. which is estimated to be approximately $382.9 million on August 30, 2025. The Company believes cash on hand, cash generated from operations, and borrowing capacity will provide adequate liquidity to fund near term and foreseeable future business operations, capital needs, upcoming debt maturities, future dividends and share repurchases, subject to financing availability in the marketplace. Contractual Obligations Contractual obligations associated with ongoing business and financing activities will require cash payments in future periods. A table summarizing the amounts and estimated timing of these future cash payments as of May 31, 2025, was provided in the Company's Annual Report on Form 10-K for the year ended May 31, 2025. There have been no material changes in such obligations since that date. Guarantees See Note 10 to the Condensed Consolidated Financial Statements. Variable Interest Entities See Note 15 to the Condensed Consolidated Financial Statements. Contingencies See Note 10 to the Condensed Consolidated Financial Statements. Critical Accounting Policies The Company strives to report financial results clearly and understandably. The Company follows accounting principles generally accepted in the United States in preparing its consolidated financial statements, which require certain estimates and judgments that affect the financial position and results of operations for the Company. The Company continually reviews the accounting policies and financial information disclosures. A summary of the more significant accounting policies that require the use of estimates and judgments in preparing the financial statements is provided in the Company's Annual Report on Form 10-K for the year ended May 31, 2025. New Accounting Standards See Note 2 to the Condensed Consolidated Financial Statements. Cautionary Note Regarding Forward-Looking Statements This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include those relating to future events, anticipated results of operations, our expectations regarding future market conditions, our business strategies, our assessment of risks we face, and other aspects of our operations or operating results. These forward-looking statements generally can be identified by phrases such as “will,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on our results of operations or financial condition or the price of our stock. These forward-looking statements involve certain risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those indicated in such forward-looking statements, including, but not limited to: 38 • Changes to U.S. and international trade policies, including new or increased tariffs and changing import/export regulations, which impact both the cost and availability of materials and components used to manufacture our products as well as demand for our products; • Challenges in implementing our growth strategy and the possibility that the assumptions on which that strategy was built prove inaccurate; • Consumer spending levels, which have a significant impact on demand for our products within our Global Retail segment; • Global and national economic conditions such as heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, escalating tensions in the Middle East, the continuation of the Russia-Ukraine war, and potential governmental responses to these events; • Cybersecurity threats and risks; • Public health crises, such as pandemics and epidemics, and governmental policies and actions to protect the health and safety of individuals or to maintain the functioning of national or global economies; • Risks related to the additional debt incurred in connection with our acquisition of Knoll, including increased interest expense, our ability to comply with our debt covenants and obligations, and limitations on certain business activities imposed by our credit agreement; • Availability and pricing of raw materials; • Financial strength of our dealers and customers; • Pace and level of government procurement; and • Outcome of pending litigation or governmental audits or investigations. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to MillerKnoll’s periodic reports and other filings with the SEC, including the risk factors identified in our most recent Quarterly Reports on Form 10-Q and Annual Report on Form 10-K for the year ended May 31, 2025 . The forward-looking statements included in this report are made only as of the date hereof. MillerKnoll does not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.