Item 1. Financial Statements
Item 1: Financial Statements
MillerKnoll, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Dollars in millions, except share data)
Three Months Ended
Nine Months Ended
(Unaudited)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Net sales
$
926.6
$
876.2
$
2,837.5
$
2,708.1
Cost of sales
573.7
543.8
1,744.3
1,662.4
Gross margin
352.9
332.4
1,093.2
1,045.7
Operating expenses:
Selling, general and administrative
285.5
258.1
877.6
846.4
Impairment charges
—
130.0
—
130.0
Restructuring expense
1.9
4.2
3.8
4.2
Design and research
20.6
22.3
64.9
69.6
Total operating expenses
308.0
414.6
946.3
1,050.2
Operating earnings (loss)
44.9
( 82.2 )
146.9
( 4.5 )
Interest expense
17.2
19.1
53.5
59.4
Interest and other investment income
( 1.5 )
( 1.2 )
( 3.3 )
( 4.3 )
Other expense (income), net
—
0.7
6.3
( 2.0 )
Earnings (loss) before income taxes and equity income
29.2
( 100.8 )
90.4
( 57.6 )
Income tax expense (benefit)
5.6
( 89.0 )
20.5
( 80.3 )
Equity earnings from nonconsolidated affiliates, net of tax
0.9
0.1
0.9
0.3
Net earnings (loss)
24.5
( 11.7 )
70.8
23.0
Net earnings attributable to redeemable noncontrolling interests
1.0
1.0
2.9
2.8
Net earnings (loss) attributable to MillerKnoll, Inc.
$
23.5
$
( 12.7 )
$
67.9
$
20.2
Earnings (loss) per share - basic
$
0.34
$
( 0.19 )
$
0.99
$
0.29
Earnings (loss) per share - diluted
$
0.34
$
( 0.19 )
$
0.98
$
0.29
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments
$
21.1
$
( 16.8 )
$
29.7
$
( 37.6 )
Pension and post-retirement liability adjustments
0.1
—
0.3
2.9
Unrealized loss on interest rate swap agreement
( 3.9 )
( 4.4 )
( 12.9 )
( 22.1 )
Other comprehensive income (loss), net of tax
$
17.3
$
( 21.2 )
$
17.1
$
( 56.8 )
Comprehensive income (loss)
41.8
( 32.9 )
87.9
( 33.8 )
Comprehensive income attributable to redeemable noncontrolling interests
1.0
1.0
2.9
2.8
Comprehensive income (loss) attributable to MillerKnoll, Inc.
$
40.8
$
( 33.9 )
$
85.0
$
( 36.6 )
See accompanying notes to Condensed Consolidated Financial Statements.
3
MillerKnoll, Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions, except share data)
(Unaudited)
February 28, 2026
May 31, 2025
ASSETS
Current Assets:
Cash and cash equivalents
$
174.6
$
193.7
Accounts receivable, net of allowance of $ 9.0 and $ 9.3
320.4
350.2
Unbilled accounts receivable
22.9
26.9
Inventories
491.8
447.5
Prepaid expenses
94.4
74.6
Other current assets
17.9
15.8
Total current assets
1,122.0
1,108.7
Property and equipment, net of accumulated depreciation of $ 1,201.6 and $ 1,142.7
504.4
496.1
Right of use assets
410.2
411.2
Goodwill
1,167.2
1,152.4
Indefinite-lived intangibles
436.9
432.5
Other amortizable intangibles, net of accumulated amortization of $ 297.3 and $ 265.4
223.8
247.5
Other noncurrent assets
87.1
101.8
Total Assets
$
3,951.6
$
3,950.2
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable
$
264.1
$
271.3
Short-term borrowings and current portion of long-term debt
22.6
16.0
Accrued compensation and benefits
86.5
92.5
Short-term lease liability
81.0
72.0
Accrued warranty
15.6
16.8
Customer deposits
90.3
102.5
Other accrued liabilities
122.0
132.7
Total current liabilities
682.1
703.8
Long-term debt
1,278.2
1,310.6
Pension and post-retirement benefits
7.1
7.1
Lease liabilities
400.5
413.4
Accrued warranty
54.8
52.8
Other liabilities
130.5
127.4
Total Liabilities
2,553.2
2,615.1
Redeemable noncontrolling interests
62.8
59.3
Stockholders' Equity:
Preferred stock, no par value ( 10,000,000 shares authorized, none issued)
—
—
Common stock, $ 0.20 par value ( 240,000,000 shares authorized, 68,383,040 and 67,804,913 shares issued and outstanding in fiscal 2026 and 2025, respectively)
13.7
13.6
Additional paid-in capital 692.4
679.1
Retained earnings 694.4
665.1
Accumulated other comprehensive loss ( 64.9 )
( 82.0 )
Total Stockholders' Equity
1,335.6
1,275.8
Total Liabilities, Redeemable Noncontrolling Interests, and Stockholders' Equity
$
3,951.6
$
3,950.2
See accompanying notes to Condensed Consolidated Financial Statements.
4
MillerKnoll, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
Nine Months Ended
(Unaudited)
February 28, 2026
March 1, 2025
Cash Flows from Operating Activities:
Net earnings
$
70.8
$
23.0
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
110.1
104.6
Stock-based compensation
21.0
24.0
Amortization of deferred financing costs
2.1
3.5
Bad debt expense
1.3
4.4
Loss on extinguishment of debt
8.0
—
Deferred taxes
( 0.1 )
( 8.3 )
Gain on sale of property
—
0.8
Restructuring expense
4.2
4.2
Impairment expense
—
130.0
Increase in current assets
( 24.5 )
( 146.0 )
Decrease in current liabilities
( 53.7 )
( 4.9 )
Other, net
( 4.1 )
3.1
Net Cash Provided by Operating Activities
135.1
138.4
Cash Flows from Investing Activities:
Proceeds from sale of property
—
6.2
Advances of notes receivable
—
( 3.1 )
Collection of notes receivable
6.8
5.7
Capital expenditures
( 83.4 )
( 68.1 )
Other, net
( 1.2 )
( 1.0 )
Net Cash Used in Investing Activities
( 77.8 )
( 60.3 )
Cash Flows from Financing Activities:
Repayments of long-term debt
( 627.4 )
( 29.7 )
Proceeds from issuance of debt, net of costs
561.8
—
Payments of deferred financing costs
( 2.2 )
—
Proceeds from credit facility
851.9
702.5
Repayments of credit facility
( 889.2 )
( 678.5 )
Proceeds from securitization facility
113.1
—
Repayments to securitization facility
( 42.9 )
—
Dividends paid
( 38.3 )
( 39.0 )
Common stock issued
3.8
5.2
Common stock repurchases and payments for taxes related to net share settlement of equity awards
( 12.3 )
( 84.8 )
Distribution to noncontrolling interest
( 3.1 )
( 4.4 )
Other, net
1.0
1.1
Net Cash Used in Financing Activities
( 83.8 )
( 127.6 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents
7.4
( 11.1 )
Net Decrease in Cash and Cash Equivalents
( 19.1 )
( 60.6 )
Cash and Cash Equivalents, Beginning of Period
193.7
230.4
Cash and Cash Equivalents, End of Period
$
174.6
$
169.8
See accompanying notes to Condensed Consolidated Financial Statements.
5
MillerKnoll, Inc.
Condensed Consolidated Statements of Stockholders' Equity
Nine Months Ended February 28, 2026
(Dollars in millions, except share data)
Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income MillerKnoll, Inc. Stockholders' Equity
(Unaudited)
Shares Amount
May 31, 2025 67,804,913 $ 13.6 $ 679.1 $ 665.1 $ ( 82.0 ) $ 1,275.8
Net earnings — — — 20.2 — 20.2
Other comprehensive income, net of tax — — — — 12.7 12.7
Stock-based compensation expense — — 9.3 — — 9.3
Exercise of stock options 8,445 — 0.1 — — 0.1
Restricted and performance stock units released 1,030,034 0.2 0.1 — — 0.3
Employee stock purchase plan issuances 38,231 — 0.7 — — 0.7
Repurchase and retirement of common stock and common stock withheld for tax withholdings ( 377,995 ) ( 0.1 ) ( 7.1 ) — — ( 7.2 )
Dividends declared ($ 0.1875 per share)
— — — ( 13.1 ) — ( 13.1 )
Other — — — 0.7 — 0.7
August 30, 2025 68,503,628 $ 13.7 $ 682.2 $ 672.9 $ ( 69.3 ) $ 1,299.5
Net earnings — — — 24.2 — 24.2
Other comprehensive loss, net of tax — — — — ( 12.9 ) ( 12.9 )
Stock-based compensation expense — — 5.8 — — 5.8
Exercise of stock options 6,500 — 0.1 — — 0.1
Restricted and performance stock units released 14,070 — 0.3 — — 0.3
Employee stock purchase plan issuances 46,301 — 0.6 — — 0.6
Repurchase and retirement of common stock and common stock withheld for tax withholdings ( 320,519 ) — ( 5.0 ) — — ( 5.0 )
Dividends declared ($ 0.1875 per share)
— — — ( 13.1 ) — ( 13.1 )
Other — — — 0.2 — 0.2
November 29, 2025 68,249,980 $ 13.7 $ 684.0 $ 684.2 $ ( 82.2 ) $ 1,299.7
Net earnings — — — 23.5 — 23.5
Other comprehensive income, net of tax — — — — 17.3 17.3
Stock-based compensation expense — — 5.9 — — 5.9
Exercise of stock options 8,508 — 0.2 — — 0.2
Restricted and performance stock units released 37,954 — 0.6 — — 0.6
Employee stock purchase plan issuances 39,991 — 0.7 — — 0.7
Repurchase and retirement of common stock, including excise tax ( 6,627 ) — ( 0.1 ) — — ( 0.1 )
Directors' fees 53,234 — 1.1 — — 1.1
Dividends declared ($ 0.1875 per share)
— — — ( 13.1 ) — ( 13.1 )
Other — — — ( 0.2 ) — ( 0.2 )
February 28, 2026 68,383,040 $ 13.7 $ 692.4 $ 694.4 $ ( 64.9 ) $ 1,335.6
6
Nine Months Ended March 1, 2025
(Dollars in millions, except share data)
Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income MillerKnoll, Inc. Stockholders' Equity
(Unaudited)
Shares Amount
June 1, 2024 70,377,692 $ 14.1 $ 725.3 $ 738.4 $ ( 92.7 ) $ 1,385.1
Net (loss) — — — ( 1.2 ) — ( 1.2 )
Other comprehensive loss, net of tax — — — — ( 5.8 ) ( 5.8 )
Stock-based compensation expense — — 9.1 — — 9.1
Exercise of stock options 71,848 — 1.5 — — 1.5
Restricted and performance stock units released 393,591 0.1 0.1 — — 0.2
Employee stock purchase plan issuances 30,002 — 0.8 — — 0.8
Repurchase and retirement of common stock and common stock withheld for tax withholdings ( 1,544,733 ) ( 0.3 ) ( 43.7 ) — — ( 44.0 )
Dividends declared ($ 0.1875 per share)
— — — ( 13.2 ) — ( 13.2 )
August 31, 2024 69,328,400 $ 13.9 $ 693.1 $ 724.0 $ ( 98.5 ) $ 1,332.5
Net earnings — — — 34.1 — 34.1
Other comprehensive loss, 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 )
Directors' fees 1,773 — 0.1 — — 0.1
Dividends declared ($ 0.1875 per share)
— — — ( 13.0 ) — ( 13.0 )
November 30, 2024 68,434,419 $ 13.7 $ 680.3 $ 745.1 $ ( 128.3 ) $ 1,310.8
Net (loss) — — — ( 12.7 ) — ( 12.7 )
Other comprehensive loss, 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, including excise tax ( 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
See accompanying notes to Condensed Consolidated Financial Statements.
7
Notes to Condensed Consolidated Financial Statements
(Dollars in millions, except share data)
(unaudited)
1. Description of Business and Basis of Presentation
MillerKnoll, Inc. (the "Company") researches, designs, manufactures 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 the following channels: independent contract furniture dealers, direct customer sales, owned and independent retailers, direct-mail catalogs, and the Company's eCommerce platforms.
MillerKnoll is a collective of globally recognized design brands known for working with some of the most well-known and respected designers in the world. Combined, the Company represents over 100 years of design research and exploration in service of humanity. Within the industries in which the Company operates, Herman Miller® and Knoll®, along with Colebrook Bosson Saunders, DatesWeiser, Design Within Reach®, Edelman®, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt® are acknowledged as leading brands that inspire architects and designers to create their best design solutions. This portfolio has enabled MillerKnoll to connect with new audiences, channels, geographies, and product categories. Leveraging the collective brand equity of MillerKnoll across the lines of business is an important element of the Company's business strategy.
Basis of Presentation
The Condensed Consolidated Financial Statements have been prepared by MillerKnoll, Inc. in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Management believes the disclosures made in this document are adequate with respect to interim reporting requirements. 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 February 28, 2026. Operating results for the three and nine months ended February 28, 2026, are not necessarily indicative of the results that may be expected for the year ending May 30, 2026 ("fiscal 2026"). 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 May 31, 2025 ("fiscal 2025"). All intercompany transactions have been eliminated in the Condensed Consolidated Financial Statements. The financial statements of equity method investments are not consolidated.
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.
2. Recently Issued Accounting Standards
The Company evaluates all Accounting Standards Updates ( " ASUs") issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability to our consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
ASU 2023-09, Income Taxes (Topic 740): Improvements to Tax Disclosures. In December 2023, the FASB issued this ASU which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. 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. The Company will adopt ASU 2023-09 prospectively in its fiscal year ending May 30, 2026.
8
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. 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 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.
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.
3. Revenue from Contracts with Customers
Disaggregated Revenue
The Company internally reports and evaluates products based on the categories Workplace, Performance Seating, Lifestyle, and Other. A description of these categories is included below.
The Workplace category includes products centered on creating highly functional and productive settings for both groups and individuals. This category focuses on the development of products, beyond seating, that define boundaries, support work, and enable productivity.
The Performance Seating category includes products centered on seating ergonomics, productivity, and function across an evolving and diverse range of settings. This category focuses on the development of ergonomic seating solutions for specific use cases requiring more than basic utility.
9
The Lifestyle category includes products focused on bringing spaces to life through beautiful yet functional products. This category focuses on the development of products that support a way of living, in thoughtful yet elevated ways. The products in this category help create emotive and visually appealing spaces via a portfolio that offers diversity in aesthetics, price, and performance.
The Other category primarily consists of textiles, uncategorized product sales, and service sales.
Revenue disaggregated by product type and reportable segment is provided in the table below:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
North America Contract:
Workplace
$
309.0
$
296.7
$
973.5
$
921.5
Performance Seating
85.3
75.7
262.3
243.9
Lifestyle
48.7
50.1
157.7
166.9
Other
45.6
45.7
137.5
136.8
Total North America Contract
$
488.6
$
468.2
$
1,531.0
$
1,469.1
International Contract
Workplace
$
42.8
$
38.8
$
137.1
$
132.4
Performance Seating
67.9
60.0
208.2
200.7
Lifestyle
41.5
35.5
129.7
118.7
Other
4.7
11.2
20.3
22.5
Total International Contract
$
156.9
$
145.5
$
495.3
$
474.3
Global Retail:
Workplace
$
2.6
$
2.5
$
6.7
$
7.2
Performance Seating
60.9
57.0
162.8
154.0
Lifestyle
217.1
201.5
640.1
601.4
Other
0.5
1.5
1.6
2.1
Total Global Retail
$
281.1
$
262.5
$
811.2
$
764.7
Total
$
926.6
$
876.2
$
2,837.5
$
2,708.1
MillerKnoll, Inc.:
Workplace
$
354.4
$
338.0
$
1,117.3
$
1,061.1
Performance Seating
214.1
192.7
633.3
598.6
Lifestyle
307.3
287.1
927.5
887.0
Other
50.8
58.4
159.4
161.4
Total MillerKnoll, Inc.
$
926.6
$
876.2
$
2,837.5
$
2,708.1
In the current year, certain products were reclassified within the Workplace and Performance Seating categories based on management's internal reporting of the performance of these product lines. The prior year amounts have been recast to reflect these changes.
Refer to Note 14 of the Condensed Consolidated Financial Statements for further information related to our reportable segments.
10
Sales by geographic area are based on the location of the customer. The following is a summary of geographic information for the years indicated. Individual foreign country information is not provided as none of the individual foreign countries in which the Company operates are considered material for separate disclosure based on quantitative and qualitative considerations.
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Net sales:
United States
$
662.5
$
635.4
$
2,041.1
$
1,938.2
International
264.1
240.8
796.4
769.9
Total
$
926.6
$
876.2
$
2,837.5
$
2,708.1
Contract Balances
Customers may make payments before the satisfaction of the Company's performance obligation and recognition of revenue. These payments represent contract liabilities and are included within the caption Customer deposits in the Condensed Consolidated Balance Sheets. During the three and nine months ended February 28, 2026, the Company recognized net sales of $ 9.4 million and $ 88.2 million, respectively, related to customer deposits that were included in the balance sheet as of May 31, 2025. 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.
4. Cash and Cash Equivalents
Certain of the Company’s subsidiaries participate in a notional cash pooling arrangement to manage global liquidity requirements. As part of a master netting arrangement, the participants combine their cash balances in pooling accounts at the same financial institution with the ability to offset bank overdrafts of one participant against positive cash account balances held by another participant. Under the terms of the master netting arrangement, the financial institution has the right, ability, and intent to offset a positive balance in one account against an overdrawn amount in another account. Amounts in each of the accounts are unencumbered and unrestricted with respect to use. As such, the net cash balance related to this pooling arrangement is included in Cash and cash equivalents in the accompanying Consolidated Balance Sheets.
The Company’s net cash pool position consisted of the following:
(In millions)
February 28, 2026
May 31, 2025
Gross cash position
$
137.0
$
99.4
Less: cash borrowings
( 136.1 )
( 98.0 )
Net cash position
$
0.9
$
1.4
5. Inventories
(In millions)
February 28, 2026
May 31, 2025
Finished goods and work in process
$
370.6
$
329.5
Raw materials
121.2
118.0
Total
$
491.8
$
447.5
Inventories are valued primarily using the first-in first-out method.
11
6. Goodwill and Indefinite-Lived Intangibles
Changes in the carrying amount of goodwill, by reportable segment, were as follows:
(In millions)
North America Contract (1)
International Contract
Global Retail (2)
Total
Balance at May 31, 2025
$
590.8
$
159.1
$
402.5
$
1,152.4
Foreign currency translation adjustments
6.2
2.7
5.9
14.8
Balance at February 28, 2026
$
597.0
$
161.8
$
408.4
$
1,167.2
(1) North America Contract segment had accumulated goodwill impairments of $ 36.7 million as of February 28, 2026, and May 31, 2025.
(2) Global Retail segment had accumulated goodwill impairments of $ 181.1 million as of February 28, 2026, and May 31, 2025.
Other indefinite-lived assets included in the Consolidated Balance Sheets consist of the following:
(In millions)
Indefinite-lived Intangible Assets
May 31, 2025
$
432.5
Foreign currency translation adjustments
4.4
February 28, 2026
$
436.9
12
Goodwill
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. When testing goodwill for impairment, the Company may first assess qualitative factors. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is performed. The Company may also elect to bypass the qualitative testing and proceed directly to the quantitative testing. If the quantitative testing indicates that goodwill is impaired, the carrying value of goodwill is written down to fair value.
Although the annual impairment test is performed during the fourth quarter, the assessment of triggering events is performed each interim reporting period. During the third quarter of fiscal year 2026 there was no impairment triggering event identified.
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. 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 the reporting units may have fallen below their carrying amount. Accordingly, the Company performed a quantitative valuation of each reporting unit during the third quarter of fiscal year 2025.
As part of the 2025 quantitative valuation, the Company used the discounted cash flow method under a weighting of the income and market approach to estimate the fair value of each reporting unit. These approaches are based on a discounted cash flow analysis and observable comparable company information that use several inputs, including:
• actual and forecasted revenue growth rates and operating margins,
• discount rates based on the reporting unit's weighted average cost of capital, and
• revenue and EBITDA of comparable companies.
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.
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 the 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.
13
• 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 during the third quarter of fiscal year 2025. 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. Management has not identified any events or changes in circumstances that may indicate an indefinite-lived intangible is more likely than not to be impaired as of the third quarter of fiscal year 2026.
7. Earnings Per Share
Basic earnings per share is computed by dividing net earnings attributable to MillerKnoll, Inc. by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net earnings attributable to MillerKnoll, Inc. by the weighted-average number of common shares outstanding, including all potentially dilutive common shares. In periods of loss, there are no potentially dilutive common shares to add to the weighted-average number of common
14
shares outstanding. The table below presents a reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share attributable to MillerKnoll, Inc.:
Three Months Ended
Nine Months Ended
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Numerator :
Numerator for both basic and diluted EPS, Net earnings (loss) attributable to MillerKnoll, Inc. - in millions
$
23.5
$
( 12.7 )
$
67.9
$
20.2
Denominator :
Weighted-average common shares outstanding - basic
68,664,546
68,353,906
68,609,898
69,269,956
Potentially dilutive shares resulting from stock plans
467,618
—
490,090
911,323
Weighted-average common shares outstanding - diluted
69,132,164
68,353,906
69,099,988
70,181,279
Earnings per share attributable to MillerKnoll, Inc. - basic
$
0.34
$
( 0.19 )
$
0.99
$
0.29
Earnings per share attributable to MillerKnoll, Inc. - diluted
$
0.34
$
( 0.19 )
$
0.98
$
0.29
Antidilutive equity awards not included in weighted-average common shares - diluted
4,058,206
2,821,894
4,135,918
1,222,986
8. Stock-Based Compensation
The following table summarizes the stock-based compensation expense and related income tax effect for the periods indicated:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Stock-based compensation expense
$
5.9
$
6.1
$
21.0
$
24.0
Related income tax effect
$
1.4
$
1.5
$
5.1
$
5.9
Certain of the Company's equity-based compensation awards contain provisions that allow for continued vesting into retirement. 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. Stock-based compensation expense is recorded within Selling, general and administrative expenses on the Condensed Consolidated Statements of Comprehensive Income (Loss).
9. Income Taxes
The Company's process for determining the provision for income taxes for the three and nine months ended February 28, 2026, 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 19.2 % and 88.3 %, respectively, for the three month periods ended February 28, 2026, and March 1, 2025. The year over year change in the effective tax rate for the three months ended February 28, 2026, resulted from the current year quarter reflecting favorable discrete impacts from return to provision true-ups related mainly to the United States research and development credit and the prior quarter having impacts from the impairment of indefinite-lived intangible assets. For the three months ended February 28, 2026, the effective rate is lower than the United States federal statutory rate due to favorable discrete impacts from return to provision true-ups related mainly to the United States research and development credit. For the three months ended March 1, 2025, the effective rate is higher than the United States federal statutory rate due to impacts from the impairment of indefinite-lived intangible assets. The effective tax rates were 22.7 % and 139.4 %, respectively, for the nine months ended February 28, 2026, and March 1, 2025. The year over year change in the effective tax rate for the nine months ended February 28, 2026 resulted from the prior year nine months having impacts from the impairment of
15
indefinite-lived intangible assets and the current year nine months having no comparable impacts. For the nine months ended February 28, 2026, 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 having rates higher than the United States federal statutory rate. For the nine months ended March 1, 2025, the effective tax rate is higher than the United States federal statutory rate due to impacts from the impairment of indefinite-lived intangible assets.
The Company recognizes interest and penalties related to uncertain tax benefits through Income tax expense in its Condensed Consolidated Statements of Comprehensive Income. Interest and penalties recognized in the Company's Condensed Consolidated Statements of Comprehensive Income were negligible for the three and nine months ended February 28, 2026, and March 1, 2025.
10. Fair Value Measurements
The Company's financial instruments consist of cash equivalents, accounts and notes receivable, deferred compensation plans, accounts payable, debt, interest rate swaps, and foreign currency exchange contracts. The Company's financial instruments, other than long-term debt, are recorded at fair value.
The carrying value and fair value of the Company's total debt is as follows for the periods indicated:
(In millions)
February 28, 2026
May 31, 2025
Carrying value
$
1,310.1
$
1,337.0
Fair value
$
1,318.8
$
1,330.7
The following describes the methods the Company uses to estimate the fair value of financial assets and liabilities recorded in net earnings, which have not significantly changed in the current period:
Cash and cash equivalents — The Company invests excess cash in short term investments in the form of money market funds, which are valued using net asset value ("NAV").
Deferred compensation plan — The Company's deferred compensation plan primarily includes various domestic and international equity and fixed income mutual funds that are recorded at fair value using quoted prices for similar securities.
Foreign currency exchange contracts — The Company's foreign currency exchange contracts are valued using an approach based on foreign currency exchange rates obtained from active markets. The estimated fair value of forward currency exchange contracts is based on month-end spot rates as adjusted by market-based current activity. 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 February 28, 2026, and May 31, 2025.
(In millions)
February 28, 2026
May 31, 2025
Financial Assets
NAV
Quoted prices with other observable inputs (Level 2)
NAV
Quoted prices with other observable inputs (Level 2)
Cash equivalents:
Money market funds
$
4.8
$
—
$
10.8
$
—
Other current assets:
Foreign currency forward contracts
—
1.0
—
0.8
Other noncurrent assets:
Deferred compensation plan
—
25.4
—
22.0
Total
$
4.8
$
26.4
$
10.8
$
22.8
Financial Liabilities
Other accrued liabilities:
Foreign currency forward contracts
$
—
$
1.0
$
—
$
0.2
Total
$
—
$
1.0
$
—
$
0.2
The following describes the methods the Company uses to estimate the fair value of financial assets and liabilities recorded in other comprehensive income, which have not significantly changed in the current period:
16
Interest rate swap agreements — The value of the Company's interest rate swap agreements are determined using a market approach based on rates obtained from active markets. 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 February 28, 2026, and May 31, 2025.
(In millions)
February 28, 2026
May 31, 2025
Financial Assets
Balance Sheet Location
Quoted Prices with Other Observable Inputs (Level 2)
Quoted Prices with Other Observable Inputs (Level 2)
Interest rate swap agreement
Other noncurrent assets
$
14.0
$
28.1
Total
$
14.0
$
28.1
Financial Liabilities
Interest rate swap agreement
Other liabilities
$
5.1
$
2.0
Total
$
5.1
$
2.0
The cost of securities sold is based on the specific identification method; realized gains and losses resulting from such sales are included in the Consolidated Statements of Comprehensive Income within Other expense (income), net. The Company views its equity and fixed income mutual funds as available for use in its current operations. Accordingly, the investments are recorded within Current Assets within the Consolidated Balance Sheets.
17
Derivative Instruments and Hedging Activities
Foreign Currency Forward Contracts
The Company transacts business in various foreign currencies and has established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. Under this program, the Company's strategy is to have increases or decreases in our foreign currency exposures offset by gains or losses on the foreign currency forward contracts to mitigate the risks and volatility associated with foreign currency transaction gains or losses. These foreign currency exposures typically arise from net liability or asset exposures in non-functional currencies on the balance sheets of our foreign subsidiaries. These foreign currency forward contracts generally settle within 30 days and are not used for trading purposes.
These forward contracts are not designated as hedging instruments. Accordingly, we record the fair value of these contracts as of the end of the reporting period in the Consolidated Balance Sheets with changes in fair value recorded within the Consolidated Statements of Comprehensive Income. The balance sheet classification for the fair values of these forward contracts is Other current assets for unrealized gains and to Other accrued liabilities for unrealized losses. The Consolidated Statements of Comprehensive Income classification for the fair values of these forward contracts is to Other (income) expense, net, for both realized and unrealized gains and losses.
Interest Rate Swaps
The Company enters into interest rate swap agreements to manage its exposure to interest rate changes and its overall cost of borrowing. The Company's interest rate swap agreements exchange variable rate interest payments for fixed rate payments over the life of the agreement without the exchange of the underlying notional amounts. The notional amount of the interest rate swap agreements is used to measure interest to be paid or received. The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense.
In September 2016, the Company entered into an interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $ 150.0 million with a forward start date of January 3, 2018, and a termination date of January 3, 2028. As a result of the transaction, the Company effectively converted the interest rate on indebtedness anticipated to be borrowed on the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 1.949 % fixed interest rate plus applicable margin as of the forward start date. The swap agreement was amended in February 2023 for each calculation period beginning on February 3, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 1.910 % modified fixed interest rate. In May 2025, the swap agreement was amended to remove the 0.11448 % floor and related CSA.
In June 2017, the Company entered into a second interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $ 75.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028. As a result of the transaction, the Company effectively converted the interest rate on indebtedness anticipated to be borrowed on the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 2.387 % fixed interest rate plus applicable margin as of the forward start date. The swap agreement was amended in February 2023 for each calculation period beginning on February 3, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 2.348 % modified fixed interest rate. In May 2025, the swap agreement was amended to remove the 0.11448 % floor and related CSA.
In January 2022, the Company entered into a third interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $ 575.0 million with a forward start date of January 31, 2022, and a maturity date of January 29, 2027. The interest rate swap locked in the Company’s interest rate on the forecasted outstanding borrowings of $ 575.0 million at 1.689 % exclusive of the credit spread on the variable rate debt. As a result of the transaction, under the terms of the agreement the Company effectively converted one month Term SOFR floating interest rate plus applicable margin to 1.689 % fixed interest rate plus applicable margin as of the forward start date. The swap agreement was amended in February 2023 for each calculation period beginning on January 31, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 1.650 % modified fixed interest rate. In May 2025, the swap agreement was amended to remove the 0.11448 % floor and related CSA.
18
In February 2023, the Company entered into a fourth interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $ 150.0 million with a forward start date of March 3, 2023, and a termination date of January 3, 2029. The interest rate swap locked in the Company's interest rate on the forecasted outstanding borrowings of $ 150.0 million at 3.950 % exclusive of the credit spread on the variable rate debt. As a result of the transaction, under the terms of the agreement the Company effectively converted one month Term SOFR floating interest rate plus applicable margin to 3.950 % fixed interest rate plus applicable margin as of the forward start date.
In February 2026, the Company entered into a forward-starting interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $ 200.0 million, with a forward start date of January 29, 2027, and a termination date of January 31, 2030. The interest rate swap locked in the Company's interest rate on the forecasted outstanding borrowings of $ 200.0 million at 3.380 % exclusive of the credit spread on the variable rate debt. As a result of the transaction, under the terms of the agreement the Company effectively will convert one month Term SOFR floating interest rate plus applicable margin to 3.380 % fixed interest rate plus applicable margin as of the forward start date.
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 February 28, 2026. 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. The ineffective portion of the change in fair value of the derivatives is immediately recognized in earnings. The interest rate swap agreements are assessed for hedge effectiveness on a quarterly basis. The impact of derivative instruments on our Condensed Consolidated Statements of Cash Flows is included in Net cash provided by operating activities.
(In millions)
Notional Amount
Forward Start Date
Termination Date
Effective Fixed Interest Rate
September 2016 Interest Rate Swap
$
150.0
January 3, 2018
January 3, 2028
1.910
%
June 2017 Interest Rate Swap
$
75.0
January 3, 2018
January 3, 2028
2.348
%
January 2022 Interest Rate Swap
$
575.0
January 31, 2022
January 29, 2027
1.650
%
March 2023 Interest Rate Swap
$
150.0
March 3, 2023
January 3, 2029
3.950
%
February 2026 Interest Rate Swap
$
200.0
January 29, 2027
January 31, 2030
3.380
%
The swaps above effectively converted indebtedness up to the notional amounts from a SOFR-based floating interest rate plus applicable margin to an effective fixed interest rate plus applicable margin under the terms of our Credit Agreement. Effective fixed interest rates include the rates amended effective January 31, 2023, or February 3, 2023, for the first three swaps included in the chart above.
The following table summarizes the effects of the interest rate swap agreements for the three and nine months ended:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
(Loss) recognized in Other comprehensive income (loss) (effective portion)
$
( 3.9 )
$
( 4.4 )
$
( 12.9 )
$
( 22.1 )
Gain reclassified from Accumulated other comprehensive loss into earnings
$
4.0
$
5.5
$
14.2
$
20.1
There were no gains or losses recognized in earnings for hedge ineffectiveness for the three and nine month periods ended February 28, 2026, and March 1, 2025. The amount of gain expected to be reclassified from Accumulated other comprehensive income into earnings during the next twelve months is $ 11.6 million, net of tax is $ 8.8 million.
19
Redeemable Noncontrolling Interests
Changes in the Company's redeemable noncontrolling interest in HAY for the nine months ended February 28, 2026, and March 1, 2025, are as follows:
(In millions)
February 28, 2026
March 1, 2025
Beginning Balance
$
59.3
$
73.9
Net income attributable to redeemable noncontrolling interests
2.9
2.8
Dividend attributable to redeemable noncontrolling interests
( 3.1 )
( 4.3 )
Cumulative translation adjustments attributable to redeemable noncontrolling interests
1.3
( 0.7 )
Foreign currency translation adjustments
2.4
( 3.3 )
Ending Balance
$
62.8
$
68.4
11. Commitments and Contingencies
Product Warranties
The Company provides coverage to the end-user for parts and labor on products sold under its warranty policy and for other product-related matters. The specific terms, conditions, and length of those warranties vary depending upon the product sold. The Company does not sell or otherwise issue warranties or warranty extensions as stand-alone products. Reserves have been established for various costs associated with the Company's warranty programs. General warranty reserves are based on historical claims experience and other currently available information and are periodically adjusted for business levels and other factors. The Company provides an assurance-type warranty that ensures that products will function as intended. As such, the Company's estimated warranty obligation is accounted for as a liability and is recorded within current and long-term liabilities within the Condensed Consolidated Balance Sheets.
Changes in the warranty reserve for the stated periods were as follows:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Accrual Balance — beginning
$
70.6
$
70.0
$
69.7
$
70.4
Accrual for warranty matters
6.7
5.8
22.0
17.5
Settlements and adjustments
( 6.9 )
( 6.5 )
( 21.3 )
( 18.6 )
Accrual Balance — ending
$
70.4
$
69.3
$
70.4
$
69.3
Guarantees
The Company is periodically required to provide performance bonds to do business with certain customers. These arrangements are common in the industry and generally have terms ranging between one year and three years . The bonds are required to provide assurance to customers that the products and services they have purchased will be installed and/or provided properly and without damage to their facilities. The bonds are provided by various bonding agencies. However, the Company is ultimately liable for claims that may occur against them. As of February 28, 2026, the Company had a maximum financial exposure related to performance bonds totaling approximately $ 15.2 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 February 28, 2026, or May 31, 2025.
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 February 28, 2026, the Company had a maximum financial exposure from these standby letters of credit totaling approximately $ 12.1 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 February 28, 2026, or May 31, 2025.
20
Contingencies
The Company is also involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such proceedings and litigation currently pending will not have a material adverse effect, if any, on the Company's Consolidated Financial Statements.
12. Short-Term Borrowings and Long-Term Debt
Short-term borrowings and long-term debt as of February 28, 2026, and May 31, 2025, consisted of the following:
(In millions)
February 28, 2026
May 31, 2025
Syndicated revolving line of credit, due April 2030
$
293.5
$
330.8
Term Loan A, 5.4230 %, due April 2030
395.0
400.0
Term Loan B, 5.6730 %, due August 2032
548.6
603.1
Accounts Receivable Securitization Facility, 4.7423 % due September 2028
70.2
—
Supplier financing program
1.8
2.0
Finance lease liability
1.0
1.1
Total debt
$
1,310.1
$
1,337.0
Less: Unamortized discount and issuance costs
( 9.3 )
( 10.4 )
Less: Current debt
( 22.6 )
( 16.0 )
Long-term debt
$
1,278.2
$
1,310.6
In connection with the acquisition of Knoll, in July 2021, the Company entered into a credit agreement that provided for a syndicated revolving line of credit (the "Revolver") and two term loans. The Revolver provided the Company with up to $ 725.0 million in revolving variable rate interest borrowing capacity that matured in July 2026, replacing the previous $ 500.0 million syndicated revolving line of credit. The term loans consisted of a five-year senior secured Term Loan " A" facility with an aggregate principal amount of $ 400.0 million and a seven-year senior secured Term Loan "B" facility with an aggregate principal amount of $ 625.0 million, the proceeds of which were used to finance a portion of the cash consideration for the acquisition of Knoll, for the repayment of certain debt of Knoll, and to pay fees, costs, and expenses related thereto.
In January 2023, the Company entered into an Amendment to the credit agreement which transitioned the benchmark rate from LIBOR to the Secured Overnight Financing Rate ("SOFR") for U.S. dollar borrowings. SOFR is the recommended risk-free reference rate of the Federal Reserve Board and Alternative Reference Rates Committee, as defined within the credit agreement. The indebtedness incurred under the revolving line of credit and term loans is secured by substantially all of the Company’s tangible and intangible assets, including, without limitation, the Company’s intellectual property. 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.
In April 2025, the Company entered into an amendment to the Credit Agreement. Amended terms for the Revolver and Term Loan A include extending the maturity to April 2030, a new amortization schedule of required quarterly principal payments for Term Loan A, and a higher maximum first lien secured net leverage ratio with no step downs. The Company also increased liquidity by raising the amount borrowed on Term Loan A to $ 400.0 million and applying excess cash to reduce the outstanding Revolver balance. The Revolver continues to be a $ 725.0 million facility. In connection with the execution of the amendment, the accounting treatment of Term Loan A and the Revolver was assessed on a lender-by-lender basis in accordance with ASC 470-50. Based on the specific facts and circumstances applicable to each lender in the syndicate, the amendment was accounted for as a modification, extinguishment, or new loan, as appropriate.
In August 2025, the Company entered into an amendment to the Credit Agreement. Amended terms for Term Loan B include extending the maturity to August 2032, a new amortization schedule of required quarterly principal payments for Term Loan B, and the elimination of the credit spread adjustment for Term Loan B that was added to accommodate the LIBOR to SOFR benchmark transition. The Company reduced the amount borrowed on Term Loan B to $ 550.0 million. This amendment was accounted for as a debt extinguishment, and the remaining unamortized debt issuance costs of $ 7.8 million from the original Term Loan B issuance were written off as an expense and recorded within Other expense (income), net on the Condensed Consolidated Statements of Comprehensive Income (Loss).
21
In February 2026, the Company entered into an amendment to the Credit Agreement. The amendment revised the applicable margin which is part of the stated interest rate applicable to borrowings under the Term Loan B facility. All other material terms remained consistent with those of the Term Loan B Facility executed in August 2025. In connection with the execution of the amendment, the accounting treatment of Term Loan B was assessed on a lender-by-lender basis in accordance with ASC 470-50. Based on the specific facts and circumstances applicable to each lender in the syndicate, the amendment was accounted for as a modification, extinguishment, or new loan, as appropriate. Unamortized debt issuance costs of $ 0.2 million were written off as an expense during the quarter and recorded within Other expense (income), net on the Condensed Consolidated Statements of Comprehensive Income (Loss).
Excluding cash flows related to the refinancing of debt that occurred during the nine months ended February 28, 2026, the Company made aggregate principal payments of $ 5.0 million and $ 2.9 million on Term Loan A and B, respectively. During the nine months ended March 1, 2025, the Company made aggregate principal payments of $ 25.0 million on Term Loan A and $ 4.7 million on Term Loan B.
Available borrowings under the syndicated revolving line of credit were as follows for the periods indicated:
(In millions)
February 28, 2026
May 31, 2025
Syndicated revolving line of credit borrowing capacity
$
725.0
$
725.0
Less: Borrowings under the syndicated revolving line of credit
293.5
330.8
Less: Outstanding letters of credit
12.1
12.0
Available borrowings under the syndicated revolving line of credit
$
419.4
$
382.2
Accounts Receivable Securitization Facility
In September 2025, the Company entered into a three-year accounts receivable securitization facility (the "Facility"), scheduled to terminate September 2028, in the aggregate amount of up to $ 90.0 million. Under the terms of the Facility, the Company sells, on a revolving basis, certain accounts receivables to MillerKnoll Receivables LLC, a direct wholly-owned, bankruptcy-remote special purpose entity (the "SPE") of the Company that, in turn, uses the receivables to secure the borrowings, the proceeds of which will be used for general working capital purposes. The SPE is included in the Condensed Consolidated Financial Statements and therefore the accounts receivable owned by it are included in our Condensed Consolidated Balance Sheets. However, the accounts receivable owned by the SPE are separate and distinct from our other assets and are not available to other creditors should the Company become insolvent. As of February 28, 2026, the SPE held $ 70.2 million of accounts receivable. The securitization is treated as a secured borrowing for accounting purposes. The outstanding balance as of February 28, 2026 is reported in Long-term debt in the Condensed Consolidated Balance Sheets.
Supplier Financing Program
The Company has an agreement with a third-party financial institution that allows certain participating suppliers the ability to finance payment obligations of the Company. Under this program, participating suppliers may finance payment obligations of the Company, prior to their scheduled due dates, at a discounted price to the third-party financial institution.
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 February 28, 2026, and May 31, 2025, the liability related to the supplier financing program was $ 1.8 million and $ 2.0 million, respectively.
22
13. Accumulated Other Comprehensive Loss
The following table provides an analysis of the changes in accumulated other comprehensive loss for the nine months ended February 28, 2026, and March 1, 2025:
(In millions)
Cumulative Translation Adjustments
Pension and Other Post-retirement Benefit Plans
Interest Rate Swap Agreement
Accumulated Other Comprehensive Loss
Balance at May 31, 2025
$
( 70.6 )
$
( 30.9 )
$
19.5
$
( 82.0 )
Other comprehensive income (loss), net of tax before reclassifications
29.7
—
( 27.1 )
2.6
Reclassification from accumulated other comprehensive loss - Other, net
—
0.3
14.2
14.5
Net current period other comprehensive income (loss)
29.7
0.3
( 12.9 )
17.1
Balance at February 28, 2026
$
( 40.9 )
$
( 30.6 )
$
6.6
$
( 64.9 )
Balance at June 1, 2024
$
( 105.7 )
$
( 33.3 )
$
46.3
$
( 92.7 )
Other comprehensive (loss), net of tax before reclassifications
( 37.6 )
—
( 42.2 )
( 79.8 )
Reclassification from accumulated other comprehensive loss - Other, net
—
3.9
20.1
24.0
Tax benefit
—
( 1.0 )
—
( 1.0 )
Net current period other comprehensive (loss) income
( 37.6 )
2.9
( 22.1 )
( 56.8 )
Balance at March 1, 2025
$
( 143.3 )
$
( 30.4 )
$
24.2
$
( 149.5 )
14. Operating Segments
The Company's operations are managed and evaluated around the organization and alignment of internal operations and geographical location. 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. Under our new reportable segments, there are three reportable segments consisting of North America Contract, International Contract and Global Retail.
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. Management regularly reviews corporate costs and believes disclosing such information provides more visibility and transparency regarding how the chief operating decision maker ("CODM") reviews results of the Company.
The Company's CODM is its Chief Executive Officer, who is regularly provided the operating results of our reportable segments and reviews the actual operating results against forecasted figures for the purposes of monitoring and assessing performance, allocating capital, and making strategic and operational decisions.
The CODM uses Adjusted Operating Earnings (Loss) as the key operating metric to measure segment profit or loss, evaluate the performance of the segments, analyze variances of actual performance to forecasts, and make decisions regarding the allocation of resources. Segment Adjusted Operating Earnings (Loss) represents reported Operating Earnings adjusted for
23
restructuring charges, integration charges, amortization of Knoll purchased intangibles, and significant non-recurring or infrequent items that may not be indicative of ongoing operations.
The Company's CODM does not review assets by segment to assess segment performance or allocate resources, nor is such information provided to the CODM. Accordingly, the Company does not present assets by segment.
The accounting policies for each of the operating segments are the same as those of the Company. Additionally, the Company employs a methodology for allocating corporate costs with the underlying objective of this methodology being to allocate corporate costs according to the relative usage of the underlying resources. The majority of the allocations for corporate expenses are based on relative net sales. However, certain corporate costs generally considered the result of isolated business decisions, are not subject to allocation and are evaluated separately from the rest of regular ongoing business operations.
The following is a summary of certain key financial measures for the respective periods indicated:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Net sales:
North America Contract
$
488.6
$
468.2
$
1,531.0
$
1,469.1
International Contract
156.9
145.5
495.3
474.3
Global Retail
281.1
262.5
811.2
764.7
Total
$
926.6
$
876.2
$
2,837.5
$
2,708.1
Refer to Note 3 of the Consolidated Financial Statements for further disaggregation of revenue by operating segment.
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Adjusted cost of sales (1) :
North America Contract
$
312.9
$
307.2
$
973.4
$
946.0
International Contract
101.4
93.3
318.7
301.7
Global Retail
159.1
143.3
451.8
414.2
(1) Adjusted cost of sales is defined as cost of sales excluding, when they occur, the impacts of restructuring charges and integration charges.
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Adjusted operating expenses (1) :
North America Contract
$
127.9
$
118.2
$
399.5
$
381.8
International Contract
42.7
38.7
132.9
123.0
Global Retail
114.0
102.8
342.7
316.7
Corporate
15.4
14.7
49.2
47.9
(1) Adjusted operating expenses is defined as operating expenses excluding, when they occur, the impacts of restructuring charges, integration charges, amortization of Knoll purchased intangibles, impairment charges and Knoll pension plan termination charges.
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Adjusted operating earnings:
North America Contract
$
47.8
$
42.8
$
158.1
$
141.3
International Contract
12.8
13.5
43.7
49.6
Global Retail
8.0
16.4
16.7
33.8
Total segment adjusted operating earnings
$
68.6
$
72.7
$
218.5
$
224.7
24
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Reconciliation to net earnings:
Total segment adjusted operating earnings
$
68.6
$
72.7
$
218.5
$
224.7
Corporate adjusted operating loss
( 15.4 )
( 14.7 )
( 49.2 )
( 47.9 )
Total consolidated adjusted operating earnings
53.2
58.0
169.3
176.8
Net earnings attributable to redeemable noncontrolling interests
1.0
1.0
2.9
2.8
Net earnings (loss) from:
Equity earnings from nonconsolidated affiliates, net of tax
0.9
0.1
0.9
0.3
Income tax expense (benefit)
5.6
( 89.0 )
20.5
( 80.3 )
Other (income) expense, net
—
0.7
6.3
( 2.0 )
Interest and other investment (income)
( 1.5 )
( 1.2 )
( 3.3 )
( 4.3 )
Interest expense
17.2
19.1
53.5
59.4
Restructuring charges
2.2
4.2
4.2
4.2
Integration charges
—
—
—
28.3
Amortization of Knoll purchased intangibles
6.1
6.0
18.2
17.8
Impairment charges
—
130.0
—
130.0
Knoll pension plan termination charges
—
—
—
1.0
Net earnings (loss) attributable to MillerKnoll, Inc.
$
23.5
$
( 12.7 )
$
67.9
$
20.2
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
Depreciation and amortization:
North America Contract
$
22.8
$
20.8
$
65.2
$
62.1
International Contract
6.1
2.4
17.9
16.5
Global Retail
9.2
11.1
27.0
26.0
Total
$
38.1
$
34.3
$
110.1
$
104.6
Capital expenditures:
North America Contract
$
7.3
$
14.3
$
38.1
$
36.5
International Contract
5.0
2.2
13.3
12.5
Global Retail
9.8
6.7
32.0
19.1
Total
$
22.1
$
23.2
$
83.4
$
68.1
Many of the Company's assets, including manufacturing, office and showroom facilities, support multiple segments. For that reason, it is impractical to disclose asset information on a segment basis.
15. Restructuring and Integration Expense
As part of restructuring and integration activities the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs as well as other direct separation benefit costs, expenses incurred related to the facilities consolidation plan, right of use asset impairment charges and fixed asset impairment charges. Severance and employee benefit costs primarily relate to cash severance, as well as non-cash severance, including accelerated equity award compensation expense. The Company also incurred expenses that are an integral component of, and directly attributable to, our restructuring and integration activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include integration implementation costs that relate primarily to professional fees, non-cash losses incurred on debt extinguishment, and accelerated depreciation of fixed assets.
25
The expense associated with integration initiatives are included in Selling, general and administrative and the expenses associated with restructuring activities are included in Cost of sales or Restructuring expense in the Condensed Consolidated Statements of Comprehensive Income.
Restructuring expenses recorded within Cost of sales totaled $ 0.3 million and $ 0.4 million for the three and nine months ended February 28, 2026. Restructuring expenses recorded within Restructuring expense totaled $ 1.9 million and $ 3.8 million for the three and nine months ended February 28, 2026.
There were no restructuring expenses recorded within Cost of sales for the three and nine months ended March 1, 2025. Restructuring expenses recorded within Restructuring expense totaled $ 4.2 million for the three and nine months ended March 1, 2025.
Knoll Integration
Following the Knoll acquisition, the Company announced a multi-year program (the "Knoll Integration") designed to reduce costs and integrate and optimize operations of the combined organization. To date, the Company has recorded a total of $ 144.4 million in pre-tax integration expense related to this plan. No future costs related to this plan are expected. The integration expenses incurred by the Company included expenses within the following categories:
• Severance and employee benefit costs associated with plans to integrate our operating structure, resulting in workforce reductions. These costs primarily include: severance and employee benefits (cash severance, non-cash severance, including accelerated stock-compensation award expense and other termination benefits).
• Exit and disposal activities include those incurred as a direct result of integration activities, primarily including the reorganization and consolidation of facilities as well as asset impairment charges.
• 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 February 28, 2026 and March 1, 2025, and the nine months ended February 28, 2026, there were no costs incurred related to the Knoll Integration.
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.
No liability balance remains as of February 28, 2026 for Knoll Integration costs that qualify as exit and disposal costs under U.S. GAAP.
The following is a summary of integration expenses by segment for the periods indicated:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
North America Contract
$
—
$
—
$
—
$
24.8
International Contract
—
—
—
3.2
Global Retail
—
—
—
0.3
Corporate
—
—
—
—
Total
$
—
$
—
$
—
$
28.3
Restructuring Activities
During the first quarter of fiscal year 2026, the Company announced an action related to the 2026 restructuring plan ("2026 restructuring plan") to create operational efficiencies. This restructuring activity included expenses related to a facilities consolidation plan. As a result, the Company revised the estimated useful lives of certain fixed assets, which increased depreciation expense. In connection with the 2026 restructuring plan, restructuring charges totaled $ 2.2 million and $ 4.2 million for the three and nine months ended February 28, 2026. Included in these amounts was depreciation expense of $ 1.6 million and $ 3.3 million for the respective periods.
26
During the third quarter of fiscal year 2025, the Company announced actions related to the 2025 restructuring plan ("2025 restructuring plan") to reduce expenses. This restructuring activity included involuntary reductions in workforce as well as non-cash right of use asset impairment charges. For the year ended May 31, 2025, the Company incurred $ 14.8 million of restructuring charges related to the 2025 restructuring plan. The restructuring plan was complete in fiscal 2025 and no future costs related to this plan are expected.
During fiscal year 2024, the Company announced an action related to the 2024 restructuring plan ("2024 restructuring plan") to reduce expenses. This restructuring activity included involuntary reductions in workforces as well as expenses related to a facilities consolidation plan, comprised primarily of non-cash right of use asset impairment charges and accelerated depreciation of fixed assets. For the year ended June 1, 2024, the Company incurred $ 30.8 million of restructuring charges related to the 2024 restructuring plan. The restructuring plan was complete in fiscal 2024 and no future costs related to this plan are expected.
The following table provides an analysis of the changes in the restructuring cost reserve that qualify as exit and disposal costs under U.S. GAAP (i.e., severance and employee benefit costs and exit and disposal activities) for the 2026 restructuring plan for the nine months ended February 28, 2026:
2026 Restructuring Plan
(In millions)
Severance and Employee Related
Exit and Disposal Activities
Total
May 31, 2025
$
—
$
—
$
—
Restructuring Costs
0.3
0.6
0.9
Amounts Paid
—
( 0.6 )
( 0.6 )
Non-Cash Costs
—
—
—
February 28, 2026
$
0.3
$
—
$
0.3
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 2025 restructuring plan for the nine months ended February 28, 2026:
2025 Restructuring Plan
(In millions)
Severance and Employee Related
Exit and Disposal Activities
Total
May 31, 2025
$
7.0
$
—
$
7.0
Restructuring Costs
—
—
—
Amounts Paid
( 6.8 )
—
( 6.8 )
Non-Cash Costs
—
—
—
February 28, 2026
$
0.2
$
—
$
0.2
The Company expects that remaining liability for the 2025 restructuring plan as of February 28, 2026, will be paid in the fourth quarter of fiscal year 2026.
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 nine months ended February 28, 2026:
2024 Restructuring Plan
(In millions)
Severance and Employee Related
Exit and Disposal Activities
Total
May 31, 2025
$
1.0
$
—
$
1.0
Restructuring Costs
—
—
—
Amounts Paid
( 0.8 )
—
( 0.8 )
Non-Cash Costs
—
—
—
February 28, 2026
$
0.2
$
—
$
0.2
27
The Company expects that remaining liability for the 2024 restructuring plan as of February 28, 2026, will be paid in the fourth quarter of fiscal year 2026.
The following is a summary of restructuring costs by segment for the periods indicated:
Three Months Ended
Nine Months Ended
(In millions)
February 28, 2026
March 1, 2025
February 28, 2026
March 1, 2025
North America Contract
$
2.2
$
2.4
$
4.2
$
2.4
International Contract
—
1.7
—
1.7
Global Retail
—
0.1
—
0.1
Total
$
2.2
$
4.2
$
4.2
$
4.2
16. Variable Interest Entities
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 notes receivable was $ 7.2 million and $ 13.5 million as of February 28, 2026, and May 31, 2025, 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.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.