Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 25, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | KNOLL INC | ||
Entity Central Index Key | 1,011,570 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,035,238,941 | ||
Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 49,762,067 | ||
Restricted Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 934,357 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,560 | $ 2,203 |
Customer receivables, net of allowance for doubtful accounts of $3,724 and $4,039, respectively | 120,157 | 86,687 |
Inventories | 170,549 | 144,945 |
Prepaid expenses | 25,624 | 29,272 |
Other current assets | 13,725 | 15,163 |
Total current assets | 331,615 | 278,270 |
Property, plant, and equipment, net | 214,953 | 200,630 |
Goodwill | 320,759 | 142,113 |
Intangible assets, net | 353,946 | 238,581 |
Pension asset | 4,245 | 0 |
Other noncurrent assets | 1,431 | 1,447 |
Total Assets | 1,226,949 | 861,041 |
Current liabilities: | ||
Current maturities of long-term debt | 17,185 | 10,000 |
Accounts payable | 126,748 | 108,922 |
Other current liabilities | 128,845 | 104,158 |
Total current liabilities | 272,778 | 223,080 |
Long-term debt | 443,898 | 181,048 |
Deferred income taxes | 86,497 | 54,671 |
Post-employment benefits other than pensions | 3,301 | 3,575 |
Pension liability | 13,930 | 21,671 |
Other noncurrent liabilities | 20,035 | 18,267 |
Total liabilities | 840,439 | 502,312 |
Commitments and contingent liabilities | ||
Equity: | ||
Common stock | 494 | 493 |
Additional paid-in capital | 58,770 | 54,455 |
Retained earnings | 395,434 | 347,304 |
Accumulated other comprehensive loss | (68,394) | (43,774) |
Total Knoll, Inc. stockholders' equity | 386,304 | 358,478 |
Noncontrolling interests | 206 | 251 |
Total equity | 386,510 | 358,729 |
Total Liabilities and Equity | $ 1,226,949 | $ 861,041 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Customer receivables, net of allowance for doubtful accounts of $3,724 and $4,039, respectively | $ 3,724 | $ 4,039 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 65,778,891 | 65,460,014 |
Common stock, shares outstanding | 49,431,178 | 49,339,552 |
Non-vesting restricted shares | 725,252 | 841,610 |
Treasury shares | 16,347,713 | 16,120,462 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Sales | $ 1,302,272 | $ 1,132,892 | $ 1,164,292 |
Cost of sales | 820,748 | 718,313 | 718,316 |
Gross profit | 481,524 | 414,579 | 445,976 |
Selling, general, and administrative expenses | 363,717 | 315,586 | 315,468 |
Restructuring charges | 2,614 | 2,150 | 0 |
Write-off of property, plant, and equipment | 0 | 16,306 | 0 |
Operating profit | 115,193 | 80,537 | 130,508 |
Pension settlement charge | 5,735 | 2,162 | 0 |
Interest expense | 20,911 | 7,483 | 5,405 |
Other income, net | (9,604) | (7,700) | (2,435) |
Income before income tax expense | 98,151 | 78,592 | 127,538 |
Income tax expense (benefit), net | 24,896 | (1,600) | 45,424 |
Net earnings | 73,255 | 80,192 | 82,114 |
Net earnings attributable to noncontrolling interests | 7 | 29 | 30 |
Net earnings attributable to Knoll, Inc. stockholders | $ 73,248 | $ 80,163 | $ 82,084 |
Net earnings per common share attributable to Knoll, Inc. stockholders: | |||
Basic (in dollars per share) | $ 1.51 | $ 1.66 | $ 1.71 |
Diluted (in dollars per share) | $ 1.49 | $ 1.63 | $ 1.68 |
Weighted-average number of common shares outstanding: | |||
Basic (in shares) | 48,657,015 | 48,422,558 | 48,093,294 |
Diluted (in shares) | 49,218,193 | 49,160,492 | 48,919,108 |
Other comprehensive income (loss): | |||
Unrealized loss on interest rate swap, net of tax | $ (1,250) | $ 0 | $ 0 |
Pension and other post-employment liability adjustment, net of tax | 2,645 | (5,239) | (6,573) |
Foreign currency translation adjustment | (13,140) | 4,868 | 488 |
Foreign currency translation adjustment on long term intercompany notes | (8,114) | 0 | 0 |
Total other comprehensive loss, net of tax | (19,859) | (371) | (6,085) |
Total comprehensive income | 53,396 | 79,821 | 76,029 |
Comprehensive income attributable to noncontrolling interests | 7 | 29 | 30 |
Comprehensive income attributable to Knoll, Inc. stockholders | $ 53,389 | $ 79,792 | $ 75,999 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Knoll, Inc. Stockholders' Equity | Noncontrolling Interests |
Beginning Balance at Dec. 31, 2015 | $ 255,474 | $ 488 | $ 47,165 | $ 244,947 | $ (37,318) | $ 255,282 | $ 192 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 82,114 | 82,084 | 82,084 | 30 | |||
Other comprehensive loss | (6,085) | (6,085) | (6,085) | ||||
Shares issued for consideration: | |||||||
Exercise of stock options | 2,772 | 2 | 2,770 | 2,772 | |||
Shares issued under stock incentive plan | 3 | (3) | |||||
Shares issued to Board of Directors in lieu of cash | 75 | 75 | 75 | ||||
Stock-based compensation | 10,469 | 10,603 | (134) | 10,469 | |||
Cash dividend (in dollars per share) | (29,886) | (29,886) | (29,886) | ||||
Purchase of common stock | (5,464) | (2) | (5,462) | (5,464) | |||
Ending Balance at Dec. 31, 2016 | 309,469 | 491 | 55,148 | 297,011 | (43,403) | 309,247 | 222 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 80,192 | 80,163 | 80,163 | 29 | |||
Other comprehensive loss | (371) | (371) | (371) | ||||
Shares issued for consideration: | |||||||
Exercise of stock options | 472 | 472 | 472 | ||||
Shares issued under stock incentive plan | 4 | 7 | (3) | 4 | |||
Shares issued to Board of Directors in lieu of cash | 125 | 125 | 125 | ||||
Stock-based compensation | 9,658 | (1) | 9,659 | 9,658 | |||
Cash dividend (in dollars per share) | (29,870) | (29,870) | (29,870) | ||||
Purchase of common stock | (10,950) | (4) | (10,946) | (10,950) | |||
Ending Balance at Dec. 31, 2017 | 358,729 | 493 | 54,455 | 347,304 | (43,774) | 358,478 | 251 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 73,255 | 73,248 | 73,248 | 7 | |||
Other comprehensive loss | (19,859) | (19,859) | (19,859) | ||||
Shares issued for consideration: | |||||||
Shares issued under stock incentive plan | 2 | 3 | (1) | 2 | |||
Shares issued to Board of Directors in lieu of cash | 62 | 62 | 62 | ||||
Stock-based compensation | 8,646 | 8,646 | 8,646 | ||||
Cash dividend (in dollars per share) | (29,879) | (29,879) | (29,879) | ||||
Purchase of common stock | (4,394) | (2) | (4,392) | (4,394) | |||
Other | (52) | (52) | |||||
Ending Balance at Dec. 31, 2018 | $ 386,510 | $ 494 | $ 58,770 | $ 395,434 | $ (68,394) | $ 386,304 | $ 206 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividend (in dollars per share) | $ 0.60 | $ 0.60 | $ 0.60 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Cash Flows [Abstract] | |||
Net earnings | $ 73,255 | $ 80,192 | $ 82,114 |
Adjustments to reconcile net earnings to cash provided by operating activities: | |||
Depreciation | 25,493 | 22,749 | 19,071 |
Amortization expense (including deferred financing fees) | 9,841 | 3,954 | 3,954 |
Provision (benefit) for deferred taxes | 4,846 | (19,634) | 26,016 |
Loss on extinguishment of debt | 1,445 | 0 | 0 |
Change in fair value of acquisition related contingent consideration | (350) | 0 | 0 |
Inventory obsolescence | 1,654 | 1,882 | 2,376 |
Loss on disposal of property, plant and equipment | 2,667 | 212 | 5 |
Unrealized foreign currency losses | 533 | 1,297 | 827 |
Stock-based compensation | 9,211 | 9,658 | 10,469 |
Non-cash write-off of property, plant and equipment | 278 | 16,306 | 0 |
Bad debt and customer claims | 123 | 1,616 | 6,303 |
Changes in assets and liabilities, net of effects of acquisitions: | |||
Customer receivables | (24,977) | (5,500) | 26,591 |
Inventories | (16,173) | (4,045) | (2,157) |
Accounts payable | 12,455 | 12,120 | 4,591 |
Current income taxes | 2,621 | (7,011) | (6,871) |
Prepaid and other current assets | (3,513) | (3,350) | (13,815) |
Other current liabilities | 11,386 | (4,813) | (3,430) |
Other noncurrent assets and liabilities | (2,587) | (1,899) | (51,749) |
Cash provided by operating activities | 108,208 | 103,734 | 104,295 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (40,289) | (40,587) | (40,105) |
Purchase of businesses, net of cash acquired | (307,983) | 0 | (18,456) |
Cash used in investing activities | (348,272) | (40,587) | (58,561) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from revolving credit facility | 490,500 | 310,000 | 377,500 |
Repayment of revolving credit facility | (383,000) | (338,000) | (379,500) |
Proceeds from term loans | 350,247 | 0 | 0 |
Repayment of term loans | (177,937) | 0 | 0 |
Payment of financing fees | (4,652) | 0 | 0 |
Payment of fees related to debt extinguishment | 1,023 | 0 | 0 |
Payment of dividends | (29,984) | (30,193) | (29,217) |
Proceeds from the issuance of common stock | 64 | 601 | 2,847 |
Purchase of common stock for treasury | (4,411) | (10,950) | (5,464) |
Contingent purchase price payment | 0 | (6,000) | (5,000) |
Cash provided by (used in) financing activities | 239,804 | (74,542) | (38,834) |
Effect of exchange rate changes on cash and cash equivalents | (383) | 3,744 | (1,238) |
Net (decrease) increase in cash and cash equivalents | (643) | (7,651) | 5,662 |
Cash and cash equivalents at beginning of year | 2,203 | 9,854 | 4,192 |
Cash and cash equivalents at end of year | 1,560 | 2,203 | 9,854 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | $ 18,334 | $ 7,605 | $ 5,228 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Description of the Business Knoll, Inc. and its subsidiaries (the “Company” or “Knoll”) are engaged in the design, manufacture, market and sale of high-end furniture products and accessories, for both workplace and residential markets, as well as modern outdoor furniture. The Company is also engaged in the sale of fine leather, textiles, and felt, focusing on the middle to high-end segments of the market. The Company primarily operates in the United States (“U.S.”), Canada and Europe, and sells its products through a broad network of independent dealers and distribution partners, through a direct sales force, through its showrooms, and online. Basis of Presentation The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants, which the Company is required to follow. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (“ASC”), which serves as a single source of authoritative non-SEC accounting and reporting standards to be applied by non-governmental entities. All amounts are presented in U.S. dollars, unless otherwise noted. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries and any partially-owned subsidiaries that the Company has the ability to control. Significant intercompany transactions and balances have been eliminated in consolidation. The results of the Company's European subsidiaries are included in the consolidated financial statements, and are presented on a one -month lag, with the exception of Muuto, to allow for the timely preparation of consolidated financial information. The effect of this lag in presentation is not material to the consolidated financial statements. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results may differ from such estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and highly-liquid investments with maturities of three months or less at the date of purchase. Revenue Recognition Revenue for the years ended December 31, 2017 and 2016 were recognized under ASC 605, Revenue Recognition , when (i) persuasive evidence of an arrangement existed, (ii) delivery occurred or services were rendered, (iii) the price was fixed or determinable and (iv) collectability was reasonably assured. ASC 606, Revenue from Contracts with Customers , was adopted for the fiscal year beginning January 1, 2018. Per the new standard, the Company determines revenue recognition by applying the following steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue as the performance obligations are satisfied. The Company recognizes revenue when performance obligations under the terms of a contract with a customer are satisfied. The Company's primary performance obligation to its customers is the delivery of products. Control of the products sold typically transfers to the customer upon shipment or delivery depending on the shipping terms of the underlying contract. Each customer contract sets forth the transaction price for the products and services purchased under that arrangement. Some customer arrangements include variable consideration, such as volume rebates, some of which depend upon the customers meeting specified performance criteria, such as a purchasing level over a period of time. The Company uses judgment to estimate the most likely amount of variable consideration at each reporting date. When estimating variable consideration, the Company applies judgment when considering the probability of whether a reversal of revenue could occur and only recognize revenue subject to this constraint. The Company uses historical customer return data as a basis of estimation for customer returns and records the reduction of sales at the time revenue is recognized. Customer returns have historically not been significant. The Company may receive deposits from customers before revenue is recognized, thus resulting in the recognition of a contract liability (customer deposits). Amounts billed to customers for shipping and handling of products are included in sales and the related costs incurred by the Company for shipping and handling are included in cost of sales. If shipping activities are performed after a customer obtains control of a product, the Company applies a policy election to account for shipping and handling as an activity to fulfill the promise to transfer the product to the customer. The Company applies an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer. Practical Expedients Elected in adopting ASC 606 Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340-40-25-4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year. Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Company’s contracts are typically less than one year in length, consideration will not be adjusted. The Company’s contracts generally include a standard payment term of 30 days, consequently there is no significant financing component within its contracts. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for losses associated with accounts receivable balances that are estimated to be uncollectible. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends. The Company evaluates the past-due status of its customer receivables based on the contractual terms of sale. If the financial condition of the Company's customers were to deteriorate, additional allowances may be required. Accounts receivable and corresponding allowance for doubtful accounts are written off when the Company determines that the likelihood of recovery is remote and the Company no longer intends to expend resources to attempt collection. Inventories Inventories are stated at the lower of cost or net realizable value and include material, labor and overhead. Cost is determined using the first-in, first-out method. The Company adjusts for inventory that it believes is impaired or obsolete. Obsolescence occurs as the result of several factors, including the discontinuance of a product line, changes in product material specifications, replacement products in the marketplace and other competitive influences. Property, Plant, and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful lives are as follows: Category Useful Life (in years) Leasehold improvements (1) Various Buildings 45-60 Building improvements 10-20 Office equipment 3-10 Software 3-10 Machinery and equipment 4-12 (1) Useful lives for leasehold improvements are amortized over the shorter of the economic lives or the term of the lease. Maintenance and repairs are expensed as incurred. Interest on capital projects is capitalized during the construction period. The Company reviews the carrying values of its property and equipment for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on undiscounted estimated cash flows expected to result from its use and eventual disposition. The factors considered by the Company in performing this assessment include current operating results, business trends affecting the use of certain assets and other economic factors. In assessing the recoverability of the carrying value of property and equipment, the Company must make assumptions regarding future cash flows and other factors. If these estimates or the related assumptions change in the future, the Company may be required to record an impairment loss for these assets. Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are tested for impairment at least annually, as of October 1, and more frequently whenever events or circumstances occur indicating that a possible impairment may have been incurred. Intangible assets with finite lives are amortized over their useful lives. The Company assesses whether goodwill impairment exists using both the qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed by determining the fair value of the Company's reporting units. The Company estimates the fair value of its reporting units using a combination of the fair values derived from both the income approach and the market approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business's ability to execute on the projected cash flows. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. When performing a qualitative assessment, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of the reporting units are less than their respective carrying values. The Company considered factors that would impact the reporting unit fair values as estimated by the market and income approaches used in the last quantitative assessment. The Company reviewed current projections of cash flows and compared these current projections to the projections included in the most recent quantitative assessment, and considered the fact that no new significant competitors entered the marketplace in the industry and that consumer demand for the industry’s products remains relatively constant, if not growing slightly. Also, economic factors during the year did not significantly affect the discount rates used for the valuation of these reporting units. The Company concluded that events occurring since the last quantitative assessment did not have a significant impact on the fair value of each of these reporting units. Therefore, the Company determined that it was not necessary to perform a quantitative goodwill impairment test for certain of these reporting units as the fair value of each reporting units appeared to exceed its respective carrying value. The Company assesses whether indefinite-lived intangible assets impairment exists using both the qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If based on this qualitative assessment, the Company determines it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed to determine whether an indefinite-lived intangible asset impairment exists. The Company tests the indefinite-lived intangible assets for impairment by comparing the carrying value to the fair value based on current revenue projections of the related operations, under the relief from royalty method. Any excess of the carrying value over the amount of fair value is recognized as an impairment. Any such impairment is recognized in the reporting period in which it has been identified. Finite-lived intangible assets such as customer relationships, non-compete agreements, and licenses are amortized over their estimated useful lives. The Company reviews the carrying values of these assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on undiscounted estimated cash flows expected to result from its use and eventual disposition. The Company continually evaluates the reasonableness of the useful lives of these assets. Business Combinations The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired business are included in the Company's operating results from the date of acquisition. Deferred Financing Fees Financing fees that are incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over the life of the underlying indebtedness. Deferred financing fees are presented in the Company's consolidated balance sheets as a direct reduction from long-term debt. Research and Development Costs Research and development costs are expensed as incurred, and are included as a component of selling, general, and administrative expenses. Research and development expenses were $20.1 million for 2018 , $19.2 million for 2017 , and $21.7 million for 2016 . Income Taxes The Company accounts for income taxes using the asset and liability approach, which requires deferred tax assets and liabilities be recognized using enacted tax rates to measure the effect of temporary differences between book and tax bases on recorded assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets, if it is more likely than not some portion or all of the deferred tax assets will not be recognized. The need to establish valuation allowances against deferred tax assets is assessed quarterly. The Company maintained a valuation allowance primarily for net operating loss carryforwards in foreign tax jurisdictions where the Company has incurred historical tax losses from operations, and has determined that it is more likely than not these deferred tax assets will not be recognized. The primary factors used to assess the likelihood of realization are reversals of taxable temporary timing differences, forecasts of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not to be sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not to be sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement. For tax positions that are not more likely than not to be sustained upon audit, the Company does not recognize any portion of the benefit. If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period. The Company recognizes income tax-related interest and penalties in income tax expense and accrues for interest and penalties in other noncurrent liabilities. The Tax Cuts and Jobs Act of 2017 (“Tax Act”), as signed by the President of the United States on December 22, 2017, significantly revised U.S. tax law. The law included significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21% , limitations on the deductibility of interest expense and executive compensation, and the transition of U.S. international taxation from a worldwide tax system to a territorial tax system. As a result in the fourth quarter of 2017, the Company recorded a tax benefit of $26.6 million , which primarily related to the remeasurement of the Company's deferred tax assets and liabilities in the U.S. based on the new lower corporate income tax rate and the one-time transition tax. During 2018, the Company finalized the calculations and recorded an additional tax benefit of $1.7 million related to the rate differential on the deferred provision to return. Fair Value of Financial Instruments The Company uses the following valuation techniques to measure fair value for its financial assets and financial liabilities: Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company and its subsidiaries use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models), and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. Derivative Instruments The Company utilizes derivative instruments to mitigate volatility related to interest rates on certain debt instruments. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The Company recognizes derivatives as either assets or liabilities in the Consolidated Balance Sheets and measures those instruments at fair value. Changes in the fair value of those instruments are initially reported in Accumulated Other Comprehensive Income (Loss) if they qualify for hedge accounting and is subsequently recognized in earnings when the hedged exposure affects earnings. Derivatives qualify for hedge accounting if they are designated as hedge instruments and if the hedge is highly effective in achieving offsetting changes in the cash flows of the asset or liability hedged. Hedge effectiveness is assessed on a regular basis. Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. Commitments and Contingencies The Company establishes reserves for the estimated cost of environmental, legal and other contingencies when such expenditures are probable and reasonably estimable. A significant amount of judgment is required to estimate and quantify the ultimate exposure in these matters. The Company engages outside experts as deemed necessary or appropriate to assist in the evaluation of exposure. From time to time, as information becomes available regarding changes in circumstances for ongoing issues as well as information regarding emerging issues, the potential liability is reassessed and reserve balances are adjusted as necessary. Revisions to the estimates of potential liability, and actual expenditures related to commitments and contingencies, could have a material impact on the results of operations or financial position. Warranty The Company generally offers an assurance-type warranty for its products. The specific terms and conditions of those warranties vary depending upon the product sold. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include historical product-failure experience and estimated repair costs for identified matters. The Company regularly assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Concentration of Credit Risk The Company's customer receivables are comprised primarily of amounts due from independent dealers and direct customers. The Company monitors and manages the credit risk associated with the individual dealers and direct customers. The independent dealers are responsible for assessing and assuming the credit risk of their customers, and may require their customers to provide deposits or other credit enhancement measures. Historically the Company has had a concentration of federal and local government receivables; however, they carry minimal credit risk. Foreign Currency Translation Results of foreign operations are translated into U.S. dollars using average exchange rates during the year, while assets and liabilities are translated into U.S. dollars using the exchange rates as of the balance sheet dates. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss). Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency of the applicable subsidiary are included in the consolidated statements of operations, within other income, net, in the year in which the gain or loss occurs. Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The Company recognizes compensation expense using the straight-line method over the vesting period. Compensation expense relating to restricted stock units that are subject to performance conditions is recognized if it is probable that the performance condition will be achieved. Forfeitures are recognized when they occur. The fair value of restricted stock and restricted stock units, excluding market-based restricted stock units, is based upon the closing market price of the Company's common stock on the date of grant. The fair value of the market-based restricted stock units is estimated at the date of grant using a Monte Carlo simulation model, which requires management to make certain assumptions based on both historical and current data. These awards vest based upon the performance of the Company's stock price relative to a peer group. The assumptions included in the model include, but are not limited to, risk-free interest rate, expected volatility of the Company's and the peer group's stock prices, and dividend yield. The risk-free rate is based upon the applicable U.S. Treasury Note rate. Expected volatility is estimated based on the historical volatility of the Company's stock prices. The dividend yield is based on the Company's historical data. Pension and Other Post-Employment Benefits The Company sponsors two defined benefit pension plans and two other post-employment benefit plans ("OPEB"). Several statistical and other factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the plans. Key factors include assumptions about the expected rates of return on plan assets, discount rates, and health care cost trend rates. The Company considers market and regulatory conditions, including changes in investment returns and interest rates, in making these assumptions. The Company determines the expected long-term rate of return on plan assets based on aggregating the expected rates of return for each component of the plan's asset mix. The Company uses historic plan asset returns combined with current market conditions to estimate the rate of return. The expected rate of return on plan assets is a long-term assumption and generally does not change annually. The discount rate reflects the market rate for high-quality fixed income debt instruments as of the Company's annual measurement date and is subject to change each year. Unrecognized actuarial gains and losses are recognized over the expected remaining lifetime of the plan participants. Unrecognized actuarial gains and losses arise from several factors, including experience and assumption changes with respect to the obligations of the pension and OPEB plans, and from the difference between expected returns and actual returns on plan assets. These unrecognized gains and losses are systematically recognized as a change in future net periodic pension expense in accordance with the appropriate accounting guidance relating to defined benefit pension and OPEB plans. Key assumptions used in determining the amount of the obligation and expense recorded for the OPEB plans include the assumed discount rate and the assumed rate of increases in future health care costs. In estimating the health care cost trend rate, the Company considers actual health care cost experience, future benefit structures, industry trends and advice from its actuaries. The Company assumes that the relative increase in health care costs will generally trend downward over the next several years, reflecting assumed increases in efficiency and cost-containment initiatives in the health care system. In accordance with the appropriate accounting guidance, the Company has recognized the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligation) of the defined benefit pension and OPEB plans in the consolidated balance sheets. To record the unfunded status of the plans, the Company recorded an additional liability and an adjustment to accumulated other comprehensive loss, net of tax. Other changes in the benefit obligation including net actuarial loss (gain) and prior service cost (credit) are recognized in other comprehensive income. The actuarial assumptions the Company used in determining the pension and OPEB retirement benefits may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants. While the Company believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may materially affect the financial position or results of operations. Segment Information The Company has two reportable segments: Office and Lifestyle. The Office reportable segment is comprised of the operations of the Office operating segment. The Lifestyle reportable segment is an aggregation of the Lifestyle, Europe Studio, and Muuto operating segments. All unallocated expenses are included within Corporate. The Office reportable segment includes a complete range of workplace products that address diverse workplace planning paradigms. These products include: systems furniture, seating, storage, tables, desks and KnollExtra® accessories as well as the international sales of our North American Office products. The Lifestyle reportable segment aggregates three operating segments: Lifestyle, Europe Studio and Muuto. Our Lifestyle reportable segment products, which are distributed in North America and Europe, include iconic seating, lounge furniture, side, café and dining chairs as well as conference, training, dining and occasional tables, lighting, rugs, textiles, high-quality fabrics, felt, leather and related architectural products. Corporate costs represent the accumulation of unallocated costs relating to shared services and general corporate activities including, but not limited to, legal expenses, acquisition expenses, certain finance, human resources, administrative and executive expenses and other expenses that are not directly attributable to an operating segment. Dedicated, direct selling, general and administrative expenses of the segments are included within segment operating profit. Management regularly reviews the costs included in the Corporate function, and believes disclosing such information provides more visibility and transparency of how the chief operating decision maker reviews the results for the Company. During 2018, the Company changed the structure of its internal organization that caused the composition of its reportable segments to change. Prior to the reorganization, the Company had three reportable segments: Office, Studio and Coverings. While the Office reportable segment was previously comprised of the operations of the Office operating segment, the Studio and Coverings reportable segments were each comprised of multiple operating segments that had been previously aggregated. Subsequently, these operating segments that previously comprised the Studio and Coverings reportable segments were reorganized and now represent components of the Lifestyle and Europe Studio operating segments. As a result of this change, the Company retrospectively revised prior period results, by segment, to conform to the current period presentation. New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued guidance codified in ASC 842, Leases, which supersedes the guidance in ASC 840, Leases. ASC 842 will be effective for the Company on January 1, 2019, and the Company will adopt the standard using the modified retrospective approach. While the Company continues to evaluate the provisions of ASC 842 to determine how it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. Lessees will classify leases as either finance or operating leases and lessors classify all leases as sales-type, direct financing or operating leases. For operating leases, the consolidated statement of operations presentation and expense recognition is similar to that of operating leases under ASC 840 with single lease cost recognized on a straight-line basis. The Company has no financing leases. During 2018, the Company made progress on implementing the new standard which included surveying the Company’s businesses, assessing the Company’s portfolio of leases and compiling a central repository of active leases. The Company evaluated key policy elections and considerations under the standard which the Company will utilize to develop an internal policy to address the new standard requirements. Additionally, the Company selected a lease accounting software solution to support the new reporting requirements and started implementation of the software. While the Company continues to assess the impact on its accounting policies, internal control processes and related disclosures required under the new guidance, the Company expects to record lease liabilities of approximately $133 million , with an offsetting increase to right-of-use assets of approximately $120 million for all leases with an initial term of greater than twelve months regardless of their classification. These conclusions may change as the Company continues to evaluate the new standard or if there are any changes in the Company’s lease portfolio. In 2018, the FASB issued clarifying guidance to the topic in ASUs No. 2018-10 and No. 2018-11, which clarified certain aspects of the new leases standard and provided an optional transition method. The Company has elected the package of practical expedients and will adopt utilizing the optional transition method defined within ASU 2018-11 upon adoption on January 1, 2019. The Company did not elect the hindsight expedient. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of Revenue The majority of the Company’s revenue presented as “Sales” in the Consolidated Statements of Operations and Comprehensive Income is the result of contracts with customers for the sale of the Company’s products. The Company’s sales by product category were as follows (in thousands): Twelve Months Ended December 31, 2018 2017 2016 Office Segment Office Systems $ 435,135 $ 422,681 $ 488,751 Seating 128,855 118,454 124,732 Files and Storage 91,537 90,362 85,696 Ancillary 92,372 59,487 38,150 Other 34,121 32,000 31,544 Total Office Segment $ 782,020 $ 722,984 $ 768,873 Lifestyle Segment Studio 410,239 300,948 285,885 Coverings 110,013 108,960 109,534 Total Lifestyle Segment $ 520,252 $ 409,908 $ 395,419 Total Sales $ 1,302,272 $ 1,132,892 $ 1,164,292 Contract Balances The Company has contract assets consisting of Customer receivables in the Consolidated Balance Sheets which represent the amount of consideration the Company expects to be entitled to in exchange for the goods or services rendered to its customers. When the Company receives deposits, the recognition of revenue is deferred and results in the recognition of a contract liability (Customer deposits) presented as a component of Other Current Liabilities in the Consolidated Balance Sheets. Subsequent recognition of revenue and the satisfaction of the contract liability is typically less than one year as the Company’s standard contract is less than one year. As of December 31, 2018 and December 31, 2017, the contract liability related to customer deposits was $37.7 million and $30.5 million , respectively. The Company recognized revenues that were included in the contract liability at the beginning of the current year of $30.5 million . In addition, the Company assumed a contract liability of $1.5 million related to a business combination during the year. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS On September 9, 2016, Holly Hunt Enterprises, Inc. (“HOLLY HUNT ® ”) completed the acquisition of Vladimir Kagan Design Group (“Vladimir Kagan”), known for its elegant, mid-century and contemporary designs. The aggregate purchase price for the acquisition was $8.5 million . The purchase price was funded from borrowings under the Company's revolving credit facility. The Company recorded the acquisition of Vladimir Kagan using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of operations of Vladimir Kagan have been included in the Company's Lifestyle segment beginning September 9, 2016. On December 1, 2016, the Company completed the acquisition of DatesWeiser Furniture Corporation (“DatesWeiser”), a designer and manufacturer of contemporary wood conference and meeting room furniture. The aggregate purchase price for the acquisition was $11.0 million , plus certain contingent payouts of up to $4.0 million in the aggregate based on the future performance of the business. The purchase price was funded from borrowings under the Company's revolving credit facility. The Company recorded the acquisition of DatesWeiser using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of operations of DatesWeiser have been included in the Company's Lifestyle segment beginning December 1, 2016. The results of Vladimir Kagan and DatesWeiser in 2016 , as well as pro forma financial information, have not been presented as the financial impact of these acquisitions are not considered material for the year ended December 31, 2016. On January 25, 2018, the Company acquired one hundred percent ( 100% ) of the shares of Muuto Holding ApS and MIE4 Holding 5 ApS, which collectively hold all the business operations of Muuto ApS (“Muuto”). Muuto’s affordable luxury products span commercial and residential applications, adding scale and diversity to the Company’s business. The aggregate purchase price for the acquisition was $307.7 million , net of $7.6 million of cash acquired and subject to certain customary adjustments. The Company recorded the acquisition of Muuto using the acquisition method of accounting and recognized the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition. The results of operations of Muuto have been included in the Company’s Lifestyle segment beginning January 25, 2018. The Company funded the acquisition with borrowings from the Amended Credit Agreement as well as cash on hand. See Note 13 for information on the Company’s borrowings. The Company recorded acquisition and certain other costs of $5.1 million within selling, general, and administrative expenses in its Consolidated Statement of Operations and Comprehensive Income, during the twelve months ended December 31, 2018. The amount of sales and net loss that resulted from the acquisition and attributable to Knoll, Inc. stockholders included in the Consolidated Statements of Operations and Comprehensive Income during the twelve month period ended December 31, 2018 were as follows (in thousands): Twelve Months Ended December 31, 2018 Sales $ 85,575 Net Income (loss) attributable to Knoll, Inc. stockholders $ (1,305 ) The following table summarizes the fair values assigned to the assets acquired and liabilities assumed and resulting goodwill as of the January 25, 2018 acquisition date (in thousands): Amounts Recognized as of Acquisition Date Cash $ 7,605 Customer receivables 8,617 Inventory 11,085 Other current assets 453 Property, plant, and equipment, net 1,266 Intangible assets 135,600 Other non-current assets 296 Total assets acquired $ 164,922 Accounts payable 3,418 Other current liabilities 10,591 Deferred income taxes 29,919 Total liabilities assumed $ 43,928 Net assets acquired $ 120,994 Purchase price $ 315,313 Less: Fair value of acquired identifiable assets and liabilities 120,994 Goodwill $ 194,319 The excess of the purchase price over the net tangible and intangible assets is recorded to goodwill and primarily reflects the assembled workforce and expected synergies. Goodwill is not deductible for tax purposes. The following table summarizes the estimated fair value of Muuto’s identifiable intangible assets and their estimated useful lives (in thousands): Fair Value as of January 25, 2018 Estimated Useful Life (in years) Indefinite-lived intangible assets: Trade name $ 66,000 Indefinite Finite-lived intangible assets: Wholesale customer relationships 35,800 15 Contract customer relationships 25,000 9 Copyrights & designs 7,500 7 Non-competition agreements 1,300 3 Total intangible assets $ 135,600 Unaudited pro forma information for the Company for the twelve months ended December 31, 2018 and 2017 as if the acquisition had occurred January 1, 2017 is as follows (in thousands): Twelve Months Ended December 31, 2018 2017 Pro forma sales $ 1,306,420 $ 1,203,158 Pro forma net earnings attributable to Knoll, Inc. stockholders $ 78,964 $ 77,892 The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisition taken place on the date indicated, or the future consolidated results of operations of the Company. The pro forma financial information presented above has been derived from the historical consolidated financial statements of the Company and from the historical consolidated financial statements of Muuto. The pro forma financial information presented above include adjustments for: (1) incremental amortization expense related to fair value adjustments to identifiable intangible assets, (2) incremental interest expense for outstanding borrowings to reflect the terms of the Amended Credit Agreement, (3) nonrecurring items, (4) the tax effect of the above adjustments. The pro forma information presented for the twelve months ended December 31, 2018 excludes expenses for future payments that are considered compensation for post combination service of $3.2 million , loss on debt extinguishment of $1.4 million , acquisition costs of $1.9 million , and acquisition-related inventory step-up valuation adjustment of $0.9 million , and includes incremental interest expense of $0.1 million and incremental amortization of intangibles of $0.8 million . The income tax impact of these adjustments for the twelve months ended December 31, 2018 was $1.3 million. The pro forma information presented for the twelve months ended December 31, 2017 includes incremental amortization of intangibles of $6.6 million , acquisition costs of $1.9 million , future payments that are considered compensation for post combination service of $3.5 million , incremental amortization of deferred financing fees of $1.2 million , incremental interest expense of $1.7 million , and an acquisition-related inventory step-up valuation adjustment of $0.9 million . The income tax impact of these adjustments for the twelve months ended December 31, 2017 was $4.6 million . The pro forma financial information does not include adjustments for potential future cost savings. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Information regarding the Company's inventories is as follows (in thousands): December 31, 2018 2017 Raw materials $ 65,185 $ 58,725 Work-in-process 8,282 6,943 Finished goods 97,082 79,277 $ 170,549 $ 144,945 |
PROPERTY, PLANT, AND EQUIPMENT,
PROPERTY, PLANT, AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT, NET | PROPERTY, PLANT, AND EQUIPMENT, NET Information regarding the Company's property, plant and equipment is as follows (in thousands): December 31, 2018 2017 Land $ 11,985 $ 12,489 Leasehold improvements 59,604 54,995 Buildings 68,852 67,465 Office equipment 19,533 18,193 Software 43,436 40,378 Machinery and equipment 237,194 243,939 Construction-in-progress 52,730 32,481 Property, plant and equipment 493,334 469,940 Accumulated depreciation (278,381 ) (269,310 ) Property, plant, and equipment, net $ 214,953 $ 200,630 During 2018 , 2017 and 2016 , the Company capitalized interest of approximately $0.8 million , $0.8 million and $0.7 million , respectively. During the fourth quarter of 2017, the Company completed a global design review of the next phases of its enterprise resource planning system implementation. Through this review, the Company identified certain software items that were no longer useful to the future phases of the enterprise resource planning system. As a result, the Company recorded a $16.3 million write-off of capitalized software costs in 2017. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Information regarding the Company's other intangible assets are as follows (in thousands): December 31, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Indefinite-lived intangible assets: Tradenames $ 285,529 $ — $ 285,529 $ 225,600 $ — $ 225,600 Finite-lived intangible assets: Customer relationships 78,382 (18,418 ) 59,964 22,497 (11,575 ) 10,922 Copyrights & design 6,960 (999 ) 5,961 — — — Various 13,510 (11,018 ) 2,492 12,088 (10,029 ) 2,059 Total $ 384,381 $ (30,435 ) $ 353,946 $ 260,185 $ (21,604 ) $ 238,581 There were no impairment charges recorded relating to goodwill or indefinite-lived intangible assets during 2018, 2017 or 2016. The Company's amortization expense related to finite-lived intangible assets was $8.9 million , $3.3 million , and $3.3 million for the years ended December 31, 2018 , 2017 , and 2016 , respectively. The expected amortization expense based on the finite-lived intangible assets as of December 31, 2018 is as follows (in thousands): Estimated Amortization 2019 $ 8,605 2020 8,466 2021 7,960 2022 7,635 2023 7,564 The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands): Office Lifestyle Segment Total Balance as of December 31, 2016 $ 35,701 $ 105,690 $ 141,391 Foreign currency translation adjustment 519 — 519 Purchase accounting adjustment — 203 203 Balance as of December 31, 2017 36,220 105,893 142,113 Foreign currency translation adjustment (597 ) (15,351 ) (15,948 ) Goodwill acquired — 194,594 194,594 Balance as of December 31, 2018 $ 35,623 $ 285,136 $ 320,759 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Information regarding the Company's other current liabilities is as follows (in thousands): December 31, 2018 2017 Accrued employee compensation $ 40,568 $ 41,144 Customer deposits 37,716 30,484 Warranty 9,623 9,174 Other 40,938 23,356 Other current liabilities $ 128,845 $ 104,158 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
LEASES | LEASES The Company has commitments under operating leases for certain machinery and equipment as well as manufacturing, warehousing, showroom and other facilities used in its operations. Some of the leases contain renewal provisions and generally require the Company to pay certain operating expenses, including utilities, insurance and taxes, which are subject to escalation. At times the Company enters into lease agreements which contain a provision for cash abatements related to certain leasehold improvements. These abatements are recognized on a straight-line basis as a reduction to rent expense over the lease term. The unamortized portions as of December 31, 2018 and 2017 were $6.0 million and $5.9 million , respectively. Total rent expense for 2018 , 2017 , and 2016 was $32.1 million , $28.9 million , and $29.8 million , respectively. Future minimum rental payments required, excluding maintenance and other miscellaneous charges, under those operating leases are as follows (in thousands): Future Minimum Rental Payments 2019 $ 26,427 2020 23,805 2021 19,135 2022 17,224 2023 15,063 Subsequent years 38,778 Total minimum lease payments $ 140,432 |
PENSION AND OTHER POST-EMPLOYME
PENSION AND OTHER POST-EMPLOYMENT BENEFITS | 12 Months Ended |
Dec. 31, 2018 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
PENSION AND OTHER POST-EMPLOYMENT BENEFITS | PENSION AND OTHER POST-EMPLOYMENT BENEFITS The Company has two domestic defined benefit pension plans and two plans providing for other post-employment benefits, including medical and life insurance coverage. One of the pension plans and one of the OPEB plans covered eligible U.S. nonunion employees while the other pension plan and OPEB plan covered eligible U.S. union employees. The Company uses a December 31 measurement date for all of these plans. During 2015, the Company approved amendments, effective December 31, 2015, to both the union and nonunion U.S. defined benefit pension plans. The Company also amended its remaining post-employment medical plan in 2015. The amendments eliminated the accrual of future benefits for all participants in the defined benefit pension plans and closed entry to new retirees into the post-employment medical plan. During 2018 , the Company contributed $7.9 million in discretionary contributions to the union pension plan and did not contribute to the nonunion pension plan. During 2017, the Company did not make any contributions to the union or nonunion pension plans. During 2016, the Company contributed $9.0 million and $43.0 million in discretionary contributions to the union and nonunion pension plans, respectively. The following table sets forth a reconciliation of the related benefit obligation and plan assets related to the benefits provided by the Company (in thousands): Pension Benefits Other Benefits 2018 2017 2018 2017 Change in projected benefit obligation: Projected benefit obligation at beginning of the period $ 295,566 $ 280,193 $ 3,806 $ 5,736 Expected administrative expenses 940 700 — — Interest cost 10,160 9,455 120 173 Plan amendments — — — (1,317 ) Participant contributions — — 209 206 Actuarial (gain) loss (26,385 ) 27,925 (43 ) (284 ) Benefits paid (7,095 ) (7,617 ) (490 ) (708 ) Benefits paid related to settlement (29,480 ) (11,969 ) — — Loss (gain) related to settlement 893 (472 ) — — Administrative expenses paid (984 ) (2,649 ) — — Projected benefit obligation at end of the period $ 243,615 $ 295,566 $ 3,602 $ 3,806 Accumulated benefit obligation at end of the period $ 243,615 $ 295,566 $ — $ — Change in plan assets: Fair value of plan assets at beginning of the period $ 273,895 $ 263,027 $ — $ — Actual return on plan assets (10,306 ) 33,103 — — Employer contributions 7,900 — 281 502 Participant contributions — — 209 206 Actual expenses paid (984 ) (2,649 ) — — Benefits paid (7,095 ) (7,617 ) (490 ) (708 ) Benefits paid related to settlement (29,480 ) (11,969 ) — — Fair value of plan assets at the end of period $ 233,930 $ 273,895 $ — $ — Funded status $ (9,685 ) $ (21,671 ) $ (3,602 ) $ (3,806 ) The actuarial loss in 2017 was mainly due to approximately a 50 basis point drop in discount rates used to value the projected benefit obligation. The actuarial gain in 2018 was mainly driven by approximately a 70 basis point increase in the discount rates, which lowered the value of the projected benefit obligation. Additionally, each year the plans experienced other sources of gains and losses due to other changes in assumptions and demographic data. Also during 2018, benefits paid related to settlement increased from 2017 due to settling the liability for certain beneficiaries. Also in 2018, the Company contributed $7.9 million to the union plan ( $0 in 2017). No employer contributions were made to the nonunion plan in 2017 or 2018. Assumptions used in computing the benefit obligation as of December 31, 2018 and 2017 were as follows: Pension Benefits Other Benefits 2018 2017 2018 2017 Discount rate 4.37% - 4.46% 3.70 - 3.77% 3.30% - 4.32% 2.48 - 3.66% Expected return on plan assets 4.60% - 7.10% 7.10 % N/A N/A Rate of compensation increase N/A N/A N/A N/A The following table presents the fair value of the Company's pension plan investments as of December 31, 2018 and 2017 (in thousands): Level 1 Level 2 Level 3 Total Equity Securities U.S. equity securities $ — $ 54,484 $ — $ 54,484 Non-U.S. equity securities — 28,036 — 28,036 Debt Securities Fixed income funds and cash investment funds 121,663 29,747 — 151,410 December 31, 2018 $ 121,663 $ 112,267 $ — $ 233,930 Equity Securities U.S. equity securities $ — $ 75,944 $ — $ 75,944 Non-U.S. equity securities — 37,042 — 37,042 Debt Securities Fixed income funds and cash investment funds 123,867 37,042 — 160,909 December 31, 2017 $ 123,867 $ 150,028 $ — $ 273,895 See Note 2 of the consolidated financial statements for the description of the levels of the fair value hierarchy. The following table sets forth the consolidated balance sheets presentation for components relating to the Company's pension and OPEB plans (in thousands): Pension Benefits (2) Other Benefits (2) 2018 2017 2018 2017 Amounts recognized in the consolidated balance sheets consist of: Noncurrent assets $ 4,245 $ — $ — $ — Current liabilities — — (301 ) (231 ) Noncurrent liabilities (13,930 ) (21,671 ) (3,301 ) (3,575 ) Net amount recognized $ (9,685 ) $ (21,671 ) $ (3,602 ) $ (3,806 ) Amounts recognized in accumulated other comprehensive income (loss) before taxes: Net actuarial loss $ 55,923 $ 60,256 $ 1,043 $ 1,015 Prior service (credit) — — (2,580 ) (3,310 ) Net amount recognized $ 55,923 $ 60,256 $ (1,537 ) $ (2,295 ) At December 31, 2018, the union pension plan had a fair value of plan assets of $50.6 million and both a projected benefit obligation (PBO) and accumulated benefit obligation (ABO) of $46.4 million , leading to an excess of the fair value of plan assets over the PBO/ABO of $4.2 million . Also at December 31, 2018, the nonunion pension plan had both a PBO and ABO of $197.2 million a fair value of plan assets of $183.3 million , leading to an excess of PBO/ABO over the fair value of plan assets of $13.9 million . The following table sets forth changes in the benefit obligation before income taxes recognized in other comprehensive income for the Company's pension and OPEB plans (in thousands): Pension Benefits Other Benefits 2018 2017 2018 2017 Net actuarial loss (gain) $ 2,390 $ 12,794 $ (43 ) $ (227 ) Prior service (credit) — — — (1,400 ) Amortization of: Prior service credit — — 730 1,485 Actuarial (loss) gain (988 ) (704 ) 71 (3 ) Loss recognized related to settlement (5,735 ) (2,162 ) — — Total recognized in OCI $ (4,333 ) $ 9,928 $ 758 $ (145 ) The following table sets forth the components of the net periodic benefit cost (income) for the Company's pension and OPEB plans (in thousands): Pension Benefits Other Benefits 2018 2017 2016 2018 2017 2016 Expected administrative expenses $ 940 $ 700 $ 1,870 $ — $ — $ — Interest cost 10,160 9,455 9,662 120 173 196 Expected return on plan assets (17,574 ) (18,444 ) (14,782 ) — — — Amortization of prior service cost (credit) — — — (730 ) (1,485 ) (1,120 ) Recognized actuarial loss (gain) 988 704 492 (71 ) 3 (248 ) Settlement related expense (1) 5,735 2,162 — — — — Net periodic benefit cost (income) $ 249 $ (5,423 ) $ (2,758 ) $ (681 ) $ (1,309 ) $ (1,172 ) _______________________________________________________________________________ (1) The pension settlement charge for 2018 related to the purchase of annuities for certain plan retirees as well as cash payments for lump sum elections. The pension settlement charge for 2017 related to lump sum elections made by employees affected by the restructuring activities in the second quarter of 2017. Assumptions used to determine net periodic benefit cost for the years ended December 31, 2018 , 2017 , and 2016 were as follows: Pension Benefits Other Benefits 2018 2017 2016 2018 2017 2016 Discount rate 3.70 - 3.77% 3.80 - 4.25% 4.55 - 4.65% 2.48 - 3.66% 2.35 - 4.20% 2.30 - 4.51% Expected return on plan assets 7.10 % 7.10 % 7.10 % N/A N/A N/A Rate of compensation increase N/A N/A N/A N/A N/A N/A The expected long-term rate of return on assets is based on management's expectations of long-term average rates of return to be earned on the investment portfolio. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plan assets are invested. For purposes of measuring the benefit obligation associated with the Company's OPEB plans as of December 31, 2018 , as well as the assumed rate for 2018 the following rates were assumed to affect the per capita costs of the following covered benefits: Benefit obligation Net periodic benefit cost 2018 2027 and thereafter 2018 2025 and thereafter Healthcare 6.50 % 4.50 % 5.60% - 7.20% 4.50 % Prescription drug 9.00 % 4.50 % 10.10 % 4.50 % The Company's pension plans' weighted-average asset allocations as of December 31, 2018 and 2017 , by asset category were as follows: Plan Assets at 2018 2017 Asset Category: Temporary investment funds 3 % 1 % Equity investment funds 35 % 41 % Fixed income funds 62 % 58 % Total 100 % 100 % The Company's pension plans' investment policy includes an asset mix based on the Company's risk posture. The investment policy follows a glide path approach that shifts a higher portfolio weighting to fixed income as the funded status increases. The investment policy states a target allocation based on the plans’ funded status of approximately 35% equity funds and 65% fixed income funds. Inclusion of the fixed income assets is to hedge risk associated with the plans’ liabilities along with providing potential growth through income. These assets should primarily invest in fixed income instruments of the U.S. Treasury and government agencies and investment-grade corporate bonds. The equity fund investments can consist of broadly diversified domestic equity, international equity, fixed income (return seeking), alternative investments, commodities, and real estate assets. The purpose of these assets is to provide the opportunity for capital appreciation, income, and the ability to diversify investments. A mix of mutual funds, ETF’s, and separate accounts are used as the plans' investment vehicles with clearly stated investment objectives and guidelines, as well as offer competitive long-term results. The Company expects to contribute $0.3 million to its OPEB plans in 2019 . Currently, no contributions are expected in 2019 for the Company's pension plans. Estimated future benefit payments under the pension and OPEB plans are as follows (in thousands): Pension Benefits Other Benefits 2019 $ 16,919 $ 301 2020 17,246 254 2021 17,330 263 2022 17,366 262 2023 17,031 263 2024 - 2027 79,360 1,235 The Company also sponsors 401K retirement savings plans for all U.S. associates. Under the 401K retirement savings plans, participants may defer a portion of their earnings up to the annual contribution limits established by the Internal Revenue Service. The Company's total expense under the 401K plans for U.S. employees was $3.9 million for 2018 , $5.5 million for 2017 and $9.8 million for 2016 . Employees of the Canadian, Belgium, Denmark and United Kingdom operations also participate in defined contribution pension plans sponsored by the Company. The Company's expense related to these plans for 2018 , 2017 , and 2016 was $1.7 million , $1.0 million , and $1.0 million , respectively. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Financial Instruments The fair values of the Company’s cash and cash equivalents, classified as Level 1 within the fair value hierarchy, approximate carrying value due to their short maturities. The fair value of the Company’s long-term debt, classified as Level 2 within the fair value hierarchy, approximates its carrying value, as it is variable rate debt and the terms are comparable to market terms as of the balance sheet dates. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The following table represents the assets and liabilities, measured at fair value on a recurring basis and the basis for that measurement (in thousands): Fair Value as of December 31, 2018 Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap $ — $ 1,689 $ — $ 1,689 $ — $ — $ — $ — Contingent purchase price payment - DatesWeiser — — 750 750 — — 1,100 1,100 Interest Rate Swap The Company’s interest rate swap is with a counter-party with a credit rating of A- according to S&P and Fitch. The fair value of the interest rate swap agreement is based on observable prices as quoted for receiving the variable one month London Interbank Offered Rates (LIBOR) and paying fixed interest rates and therefore were classified as Level 2 within the fair value hierarchy. Contingent Purchase Price Payment Pursuant to the agreement governing the acquisition of DatesWeiser, the Company may be required to make annual contingent purchase price payments. The payouts are based upon DatesWeiser reaching an annual net sales target, for each year through 2020. The Company classifies this as a Level 3 measurement and is required to remeasure this liability at fair value on a recurring basis. The fair value of such contingent purchase price payments, totaling $1.1 million , was determined at the time of acquisition based upon net sales projections for DatesWeiser through 2020 and a discount rate of 10% . Excluding the initial recognition of the liability for the contingent purchase price payments and payments made to reduce the liability, any changes in the fair value will be included within selling, general and administrative expenses. During 2018, the Company remeasured the fair value of the liability and recorded a $0 .4 million reduction in fair value due to DatesWeiser not meeting the net sales target for 2018. The maximum amount of possible future contingent payments under the agreement as of December 31, 2018 is $4.0 million . There were no additional assets and/or liabilities recorded at fair value on a recurring basis as of December 31, 2018 or 2017 . Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis There were no assets and/or liabilities remeasured to fair value on a nonrecurring basis as of December 31, 2018 or 2017 and for the years then ended. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company is exposed to interest rate risks related to its business operations. To reduce the interest rate risk the Company uses an interest rate swap contract. The Company does not use derivatives for speculative trading purposes. Cash flow hedge To offset the variability of cash flows in interest payments associated with a portion of the Company’s variable rate debt, the Company entered into an interest rate swap contract in January 2018 which is designated as a cash flow hedge. The interest rate swap hedges one month LIBOR which effectively converts a portion of the variable-rate debt to a fixed interest rate. The interest rate swap effective date is December 31, 2018 and the maturity date is January 23, 2023. As of December 31, 2018 , the Company’s interest rate swap agreement, which hedges certain long-term debt obligations, has an initial notional amount of $300.0 million , which decreases over time by $50 million increments as follows: Period Notional amount outstanding Through December 2019 $300 million January 2020 - December 2020 $250 million January 2021 - December 2021 $200 million January 2022 - December 2022 $150 million January 2023 $100 million The swap contract has a fixed rate of 2.63% . The following table illustrates the location and fair value of the Company’s interest rate swap at December 31, 2018 and December 31, 2017 (in thousands): Derivatives December 31, 2018 December 31, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swap Other current liabilities $255 n/a $0 Interest rate swap Other noncurrent liabilities 1,434 n/a — Total derivatives designated as hedging instruments $1,689 $0 The interest rate swap is included at its estimated fair value as an asset or a liability in the Consolidated Balance Sheet based on a discounted cash flow model using applicable market swap rates and certain assumptions. The fair value of the swap recorded in Accumulated Other Comprehensive Income (Loss) may be recognized in the Consolidated Statement of Operations if certain terms of the agreement change, are modified or if the loan is extinguished. The Company had no ineffectiveness related to its swap agreement as of December 31, 2018 . The Company expects to reclassify in the next twelve months a loss of approximately $0.3 million from accumulated other comprehensive income (loss) into earnings, as a component of interest expense, related to the Company's interest rate swap based on the borrowing rates at December 31, 2018 . |
INDEBTEDNESS
INDEBTEDNESS | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS The Company's long-term debt is summarized as follows (in thousands): December 31, 2018 2017 Balance of revolving credit facility $ 134,500 $ 27,000 Balance of term loan 330,802 165,000 Total long-term debt 465,302 192,000 Less: Current maturities of long-term debt 17,185 10,000 Less: Deferred financing fees, net 4,219 952 Long-term debt $ 443,898 $ 181,048 At December 31, 2018 and 2017, the Company's weighted-average interest rates were approximately 3.6% and 2.4% , respectively. Credit Facilities The following revolving credit facilities were in place at December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Expiration Date Capacity Borrowed Letter of Credit Unused capacity Expiration Date Capacity Borrowed Letter of Credit Unused capacity Jan 2023 $ 400,000 $ 134,500 $ 5,167 $ 260,333 May 2019 $ 300,000 $ 27,000 $ 5,367 $ 267,633 At December 31, 2018, borrowings under the revolving credit facility include $2.5 million at a base rate of 6.25% and $132.0 million at a weighted average LIBOR rate of 4.25% . At December 31, 2017, borrowings under the revolving credit facility accrued interest at 2.62% . At December 31, 2018 and 2017 the letters of credit issued under the revolving credit facility incurred interest at 1.75% and 1.25% , respectively. On January 23, 2018, the Company completed an amendment to its existing credit facility, dated May 20, 2014 (the “Existing Credit Agreement”), whereby the Existing Credit Agreement was amended and restated in its entirety by the Third Amended and Restated Credit Agreement, among the Company and certain foreign subsidiaries of the Company, as borrowers, and certain domestic and foreign subsidiaries of the Company, as guarantors, (the “Amended Credit Agreement”). The Amended Credit Agreement provides for a $750.0 million credit facility that matures in five years, consisting of a revolving commitment in the amount of $400.0 million , which may be available in U.S. dollars, Euro, British Pound and other foreign currencies, a U.S. term loan commitment in the amount of $250.0 million and a multicurrency term loan commitment in the amount of €81.7 million . The Amended Credit Agreement also includes an option to increase the size of the revolving credit facility or incur incremental term loans by up to the greater of $250.0 million or 90% of the EBITDA of the Company and its subsidiaries for the four fiscal quarters prior to such increase or additional loan, subject to the satisfaction of certain terms and conditions. The proceeds of the credit facility were used to (1) consummate the Muuto acquisition and, (2) refinance certain indebtedness and will also be used, among other things, for general corporate and operational purposes. Borrowings under the revolving credit facility may be repaid at any time, but no later than the maturity date on January 23, 2023. The Company retains the right to terminate or reduce the size of the revolving credit facility at any time. Borrowings under the term loan facilities amortize in equal quarterly installments equaling 5% per annum, with the remaining borrowings due on the maturity date. Interest on the revolving credit and term loans will accrue, at the Company’s election, at (i) the Eurocurrency Rate (as defined in the Amended Credit Agreement), plus additional percentage points based on the Company’s leverage ratio or (ii) the Base Rate (a rate based on the higher of (a) the prime rate announced from time-to-time by Bank of America, N.A., (b) the Federal Reserve System’s federal funds rate, plus .50% or (c) the Eurocurrency Rate, plus 1.00% ; Base Rate is defined in detail in the Amended Credit Agreement), plus additional percentage points based on the Company’s leverage ratio. At December 31, 2018 the U.S. term loan and multicurrency term loan incurred interest at 4.27% and 1.75% , respectively. At December 31, 2017 the U.S. term loan incurred interest at 2.82% . The Eurocurrency rates used for the U.S. dollar-denominated term loan and the Euro-denominated term loan are one month LIBOR and one month Euribor, respectively. The Amended Credit Agreement requires the Company to comply with various affirmative and negative covenants, including without limitation (i) covenants to maintain a minimum specified interest coverage ratio and maximum specified net leverage ratio (or under certain circumstances, a maximum specified net secured leverage ratio), and (ii) covenants that prevent or restrict the Company’s ability to pay dividends, engage in certain mergers or acquisitions, make certain investments or loans, incur future indebtedness, engage in sale-leaseback transactions, alter its capital structure or line of business, prepay subordinated indebtedness, engage in certain transactions with affiliates and sell stock or assets. Repayments under the Amended Credit Agreement can be accelerated by the lenders upon the occurrence of certain events of default, including, without limitation, a failure to pay any principal, interest or other amounts in respect of loans when due, breach by the Company (or its subsidiaries) of any of the covenants or representations contained in the Amended Credit Agreement or related loan documents, failure of the Company (or its material subsidiaries) to pay any amounts owed with respect to other significant indebtedness of the Company or such subsidiary, or a bankruptcy event with respect to the Company or any of its material subsidiaries. The indebtedness incurred under the Amended Credit Agreement 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 Amended Credit Agreement and pledged substantially all of their tangible and intangible assets as security for their obligations under such guarantee. Certain of the Company’s wholly-owned foreign subsidiaries have guaranteed the obligations of the foreign borrowers under the Amended Credit Agreement and pledged certain of their assets as security for their obligations under such guarantee. The aggregate maturities of long-term debt are as follows (in thousands): Future minimum debt payments 2019 $ 17,185 2020 17,184 2021 17,184 2022 17,184 2023 396,565 Thereafter — Total $ 465,302 Deferred Financing Fees Deferred financing fees, net of accumulated amortization, totaled $4.2 million and $1.0 million as of December 31, 2018 and 2017 , respectively. Amortization expense related to the deferred financing fees, included in interest expense, was $1.1 million for the year ended December 31, 2018 , and $0.7 million for each of the years ended December 31, 2017 and 2016 . In conjunction with terminating the Company's Existing Credit Agreement, $0.4 million in unamortized debt issuance costs and $1.0 million of third party fees related to debt extinguishment were written-off as a loss on extinguishment of debt, recorded as a component of interest expense on the accompanying statements of operations and comprehensive income for the year ended December 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation The Company is currently involved in matters of litigation, including environmental contingencies, arising in the ordinary course of business. The Company accrues for such matters when expenditures are probable and reasonably estimable. Based upon information presently known, management is of the opinion that such litigation, either individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Collective Bargaining At December 31, 2018 , the Company employed a total of 3,541 people. Approximately 8.2% of the total number of employees are represented by unions globally. The Grand Rapids, Michigan Plant is the only unionized plant within North America and has an agreement with the Carpenters Union, Local 1615, of the United Brotherhood of Carpenters and Joiners of America, Affiliate of the Carpenters Industrial Council, covering approximately 187 hourly employees or 5.3% of the labor force. The Collective Bargaining Agreement expires April 26, 2022. Approximately 104 workers in Italy, or 2.9% of the labor force, are also represented by state-sponsored unions. The union contracts under which these Italian workers are represented expired in December 2018. The contract is under negotiation and expected to be finalized in 2019. Warranty The Company provides for estimated product warranty expenses, which are included in other current liabilities, when related products are sold. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, future warranty claims may differ from the amounts provided. Changes in the warranty reserve are as follows (in thousands): 2018 2017 2016 Balance, beginning of the year $ 9,174 $ 8,906 $ 8,513 Provision for warranty claims 7,726 7,099 6,792 Warranty claims incurred (7,898 ) (6,735 ) (6,272 ) Warranties acquired through business acquisition 611 — — Foreign currency translation adjustment 10 (96 ) (127 ) Balance, end of the year $ 9,623 $ 9,174 $ 8,906 |
STOCK PLANS
STOCK PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK PLANS | STOCK PLANS As of December 31, 2018 , the Company sponsors three stock incentive plans under which awards denominated or payable in shares, units or options to purchase shares of Knoll common stock may be granted to officers, certain other employees, directors and consultants of the Company. The following table summarizes the Company approved plans, the number of shares authorized to be issued and the number of shares available to be issued as of December 31, 2018 : Authorized for issue Available for issue 2010 Stock Incentive Plan 2,000,000 56,959 2013 Stock Incentive Plan 2,000,000 513,399 2018 Stock Incentive Plan 2,000,000 2,000,000 Total available for issuance 2,570,358 The Compensation Committee of the Company's Board of Directors, has sole discretion concerning administration of the plans including selection of individuals to receive awards, types of awards, the terms and conditions of the awards and the time at which awards will be granted. Restricted Shares and Restricted Stock Units The Company awards restricted shares and restricted stock units to employees, as well as non-employee directors, under various plans. The restrictions on these awards generally lapse between three and four years from the date of the awards. The Company records expense for restricted shares and restricted stock units awards in an amount equal to the fair market value of the underlying awards on the grant date of the award, over the period the awards lapse. The following table shows the details for each of the 2016 , 2017 and 2018 restricted shares and restricted stock units grants: Grant Date Number of restricted shares and restricted stock units Weighted-Average Grant Date Fair Value Vesting Vesting Period 2016 grants 283,000 $ 18.69 Cliff - Subject to service conditions Three Years 30,632 $ 18.28 Graded - Subject to service conditions Three Years 163,509 $ 18.81 Cliff - Subject to service and performance conditions Three Years 109,000 $ 12.03 Cliff - Subject to service and market conditions Three Years Total 2016 grants 586,141 2017 grants 277,250 $ 22.80 Cliff - Subject to service conditions Three - Four Years 24,488 $ 22.87 Graded - Subject to service conditions Three Years 147,938 $ 22.77 Cliff - Subject to service and performance conditions Three Years 98,625 $ 10.63 Cliff - Subject to service and market conditions Three Years Total 2017 grants 548,301 2018 grants 223,988 $ 21.21 Cliff - Subject to service conditions Three Years 37,788 $ 19.89 Graded - Subject to service conditions Two Years 150,009 $ 21.20 Cliff - Subject to service and performance conditions Three Years 100,000 $ 13.87 Cliff - Subject to service and market conditions Three Years Total 2018 grants 511,785 The following table summarizes the Company's restricted shares activity during the year: Restricted Weighted-Average Grant Date Outstanding at December 31, 2017 841,610 $ 20.41 Granted 261,776 21.02 Forfeited (20,940 ) 22.01 Vested (357,194 ) 19.62 Outstanding at December 31, 2018 725,252 $ 21.03 The fair value of restricted shares that vested during 2018, 2017 and 2016 was $7.4 million , $9.5 million , $4.9 million , respectively. The Company estimated the fair value of the restricted stock units with market-based vesting conditions using the monte-carlo valuation model. In determining these values, the following weighted-average assumptions were used for the stock units granted during the fiscal years indicated: 2018 2017 2016 Weighted-average fair value on grant date $ 13.87 $ 10.63 $ 12.03 Assumptions used to compute fair value : Volatility 27.3 % 27.2 % 27.3 % Risk free interest rate 2.3 % 1.6 % 0.7 % Expected term 3 years 3 years 2.6 years Expected dividend yield 2.8 % 2.6 % 2.3 % The following table summarizes the Company's restricted stock units activity during the year: Restricted Weighted-Average Grant Date Restricted Weighted-Average Grant Date Restricted Weighted-Average Grant Date Outstanding at December 31, 2017 15,000 $ 14.04 327,486 $ 20.44 236,708 $ 12.46 Granted — — 150,009 21.20 100,000 13.87 Forfeited — — (16,270 ) 20.05 (10,845 ) 11.84 Vested (15,000 ) 14.04 (55,921 ) 21.21 (503 ) 11.80 Expired — — — — (55,163 ) 14.88 Outstanding at December 31, 2018 — $ — 405,304 $ 20.92 270,197 $ 12.46 Fair value of restricted stock units that vested during 2018, 2017 and 2016 was $1.4 million , $9.9 million , and $0.0 million , respectively. Stock Options A summary of the status of the Company's options as of December 31, 2018 and 2017 , and changes during the year ended December 31, 2018 , is presented below. Number of Weighted- Weighted- Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at December 31, 2017 — $ — $ — Granted 20,000 4.01 22.59 Outstanding at December 31, 2018 20,000 $ 4.01 $ 22.59 4.6 $ — Exercisable at December 31, 2018 — $ — $ — 0 $ — The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the KNL market price, less the strike price, as of the end of the period presented, which would have been received by the option holders had all option holders exercised in-the-money options as of that date. Total intrinsic value of options exercised in 2018, 2017 and 2016 was $0.0 million , $0.2 million and $1.6 million , respectively. No options were exercised during fiscal 2018. Options granted in 2018, 2017 and 2016 had a weighted-average grant-date fair value of $0.1 million , $0.0 million and $0.0 million , respectively. There were no options which vested in 2018 and the total fair value of options vested during 2017 and 2016 were less than $0.1 million , respectively. Total Awards Compensation costs related to stock-based compensation for the years ended December 31, 2018 , 2017 , and 2016 totaled $9.2 million pre-tax ( $6.9 million after-tax), $9.6 million pre-tax ( $6.1 million after-tax) and $10.5 million pre-tax ( $6.8 million after-tax) respectively, and are included within selling, general, and administrative expenses. At December 31, 2018 , the total compensation cost related to non-vested awards not yet recognized equaled $11.8 million for restricted share awards and restricted stock units, with less than $0.1 million costs related to non-vested stock options. The weighted-average remaining period over which the cost is to be recognized is 1.5 years. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Preferred Stock The Company's Certificate of Incorporation authorizes the issuance of 10,000,000 shares of preferred stock with a par value of $1.00 per share. Subject to applicable laws, the Board of Directors is authorized to provide for the issuance of preferred shares in one or more series, for such consideration and with designations, powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations or restrictions thereof, as shall be determined by the Board of Directors. There was no preferred stock outstanding as of December 31, 2018 , 2017 or 2016 . Common Stock The following table demonstrates the change in the number of shares of common stock outstanding during the years ended December 2018 , 2017 , and 2016 (excludes non-voting restricted shares). Shares outstanding as of December 31, 2015 47,828,079 Purchase of common stock (123,577 ) Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes 192,050 Exercise of stock options 202,500 Shares issued to Board of Directors in lieu of cash 3,276 Shares outstanding as of December 31, 2016 48,102,328 Purchase of common stock (17,445 ) Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes 385,037 Exercise of stock options 22,500 Shares issued to Board of Directors in lieu of cash 5,522 Shares outstanding as of December 31, 2017 48,497,942 Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes 204,855 Shares issued to Board of Directors in lieu of cash 3,129 Shares outstanding as of December 31, 2018 48,705,926 Treasury Stock As of December 31, 2018 and 2017 , the Company held 16,347,713 and 16,120,462 treasury shares, respectively. The Company records repurchases of its common stock for treasury at cost. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) are as follows (in thousands): Beginning Before-Tax Tax Benefit Net-of-Tax ASU 2018-02 Ending December 31, 2016 Pension and other post-employment liability adjustment $ (22,832 ) $ (10,785 ) $ 4,212 $ (6,573 ) $ — $ (29,405 ) Foreign currency translation adjustment (14,486 ) 488 — 488 — (13,998 ) Accumulated other comprehensive income (loss) $ (37,318 ) $ (10,297 ) $ 4,212 $ (6,085 ) $ — $ (43,403 ) December 31, 2017 Pension and other post-employment liability adjustment $ (29,405 ) $ (9,783 ) $ 1,025 $ (8,758 ) $ — $ (38,163 ) Foreign currency translation adjustment (13,998 ) 8,387 — 8,387 — (5,611 ) Accumulated other comprehensive income (loss) $ (43,403 ) $ (1,396 ) $ 1,025 $ (371 ) $ — $ (43,774 ) December 31, 2018 Pension and other post-employment liability adjustment $ (38,163 ) $ 3,575 $ (930 ) $ 2,645 $ (4,761 ) $ (40,279 ) Interest rate swap derivative — (1,689 ) 439 (1,250 ) — (1,250 ) Foreign currency translation adjustment (5,611 ) (13,140 ) — (13,140 ) — (18,751 ) Foreign currency translation adjustment on long-term intercompany notes — (8,114 ) — (8,114 ) — (8,114 ) Accumulated other comprehensive income (loss) $ (43,774 ) $ (19,368 ) $ (491 ) $ (19,859 ) $ (4,761 ) $ (68,394 ) The following reclassifications were made from accumulated other comprehensive income (loss) to the statements of operations (in thousands): December 31, 2018 2017 2016 Amortization of pension and other post-employment liability adjustments Prior service credits (1) $ 730 $ 1,485 $ 1,120 Actuarial losses (1) (917 ) (707 ) (244 ) Loss recognized during settlement (5,735 ) (2,162 ) — Total before tax (5,922 ) (1,384 ) 876 Tax (benefit) expense (1,502 ) (548 ) 312 Net of tax $ (4,420 ) $ (836 ) $ 564 (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 10 for additional information. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share excludes the dilutive effect of common shares that could potentially be issued due to the exercise of stock options and vesting of unvested restricted stock and restricted stock units, and is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. At December 31, 2018 , 2017 and 2016 , the Company had outstanding stock options, restricted stock, and restricted stock units, which could potentially dilute basic earnings per share in the future. The following table sets forth the reconciliation from basic to dilutive average common shares (in thousands): Years ended December 31, 2018 2017 2016 Numerator: Net earnings attributable to Knoll, Inc. stockholders $ 73,248 $ 80,163 $ 82,084 Denominator: Denominator for basic earnings per shares - weighted-average shares 48,657 48,423 48,093 Effect of dilutive securities: Potentially dilutive shares resulting from stock plans 561 737 826 Denominator for diluted earnings per share - weighted-average shares 49,218 49,160 48,919 Antidilutive equity awards not included in weighted-average common shares—diluted 20 — — Net earnings per common share attributable to Knoll, Inc. stockholders: Basic $ 1.51 $ 1.66 $ 1.71 Diluted $ 1.49 $ 1.63 $ 1.68 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income before income tax expense consists of the following (in thousands): 2018 2017 2016 U.S. operations $ 67,240 $ 62,609 $ 107,803 Foreign operations 30,911 15,983 19,735 Total $ 98,151 $ 78,592 $ 127,538 Income tax expense (benefit) is comprised of the following (in thousands): 2018 2017 2016 Current: Federal $ 4,276 $ 11,712 $ 11,980 State 2,101 2,404 2,840 Foreign 13,673 3,918 4,588 Total current 20,050 18,034 19,408 Deferred: Federal 6,297 (20,595 ) 23,814 State 908 2,541 2,347 Foreign (2,359 ) (1,580 ) (145 ) Total deferred 4,846 (19,634 ) 26,016 Income tax expense (benefit) $ 24,896 $ (1,600 ) $ 45,424 The following table sets forth the tax effects of temporary differences that give rise to the deferred tax assets and liabilities (in thousands): December 31, December 31, Deferred tax assets Accounts receivable, principally due to allowance for doubtful accounts $ (32 ) $ 858 Inventories 5,939 5,939 Net operating loss carryforwards 6,898 7,460 Accrued pension 2,121 5,591 Stock-based compensation 3,722 2,972 Compensation-related accruals 696 3,063 Warranty 2,055 1,779 Obligation for post-employment benefits other than pension 935 1,312 Accrued liabilities and other items 8,350 3,886 Gross deferred tax assets 30,684 32,860 Valuation allowance (4,789 ) (4,789 ) Net deferred tax assets 25,895 28,071 Deferred tax liabilities: Intangibles (85,553 ) (58,701 ) Plant and equipment (26,839 ) (24,041 ) Gross deferred tax liabilities (112,392 ) (82,742 ) Net deferred tax liabilities $ (86,497 ) $ (54,671 ) Income taxes paid, net of refunds received, by the Company during 2018 , 2017 , and 2016 , totaled $9.6 million , $22.4 million , and $27.4 million , respectively. As of December 31, 2018 , the Company had net operating loss carryforwards totaling approximately $26.5 million in the United Kingdom, Germany and Brazil. The net operating loss carryforwards may be carried forward indefinitely. The Company regularly evaluates positive and negative evidence as it relates to realizability of deferred tax assets in each jurisdiction. As a result of this analysis, the Company determined that the valuation allowance related to United Kingdom net operating losses should be reversed during 2017 as a history of positive earnings and anticipated future earnings supports the realization of the deferred tax asset. The result of this reversal was an income tax benefit of $2.6 million . The Company still provides a valuation allowance against Germany and Brazil net foreign deferred tax assets (principally the net operating loss carryforwards) due to the uncertainty that they can be realized. The following table sets forth a reconciliation of the statutory federal income tax rate to the effective income tax rate: 2018 2017 2016 Federal statutory tax rate 21.0 % 35.0 % 35.0 % Increase (decrease) in the tax rate resulting from: State taxes, net of federal effect 2.4 % 5.2 % 3.3 % Effect of tax rates of other countries 0.5 % (1.8 )% (1.4 )% Section 199 deduction — % (0.7 )% (0.8 )% Change in contingency reserve — % — % (0.2 )% Limitation on deduction of officer’s compensation 0.4 % 1.3 % 0.6 % Tax Act (3.2 )% (33.9 )% — % Valuation allowance release — % (3.3 )% — % Other 4.3 % (3.8 )% (0.9 )% Effective tax rate 25.4 % (2.0 )% 35.6 % On December 22, 2017, the Tax Cuts and Jobs Acts (“Tax Act”) was enacted into law. The new tax legislation represents a fundamental and dramatic shift in U.S. taxation. The new legislation contains several key tax provisions that will impact the Company, including the reduction of the corporate income tax rate from 35% to 21% effective January 1, 2018. The new legislation also includes a variety of other changes, such as a one-time transition tax on unrepatriated accumulated foreign earnings, a limitation on the tax deductibility of interest expense, repeal of the Section 199 domestic production activities deduction, acceleration of business asset expensing, and reduction in the amount of executive pay that could qualify as a tax deduction, among others. ASC 740 requires the Company to recognize the effect of the tax law changes in the period of enactment. The SEC staff issued SAB 118 which allowed the Company to record provisional amounts during a one year measurement period. At December 31, 2017 the Company had not completed the accounting for the tax effects of enactment of the Tax Act; however, as described below the Company made a reasonable estimate of the effects on existing deferred tax balances and the one-time transition tax. The Company recorded an estimated benefit as a result of the new legislation of $26.6 million in the fourth quarter of 2017. The revaluation of deferred tax assets and liabilities at the lower corporate rate of 21% resulted in a benefit of $28.3 million , offset by a one-time transition tax on unrepatriated accumulated foreign earnings of $0.2 million and a withholding tax on distribution of those earnings in the amount of $1.5 million . In accordance with SAB 118, the Company finalized the calculations in 2018 and recorded an additional tax benefit of $1.7 million related to the rate differential on the deferred provision to return. As of December 31, 2018, the accounting for the income tax effects of the Tax Act have been completed and recorded in the Company’s financial statements and no further provisional measurement period adjustments will be made. As of December 31, 2018 , to the extent the Company’s earnings attributable to its foreign subsidiaries are not considered permanently reinvested, a deferred tax liability for the tax consequences of remitting the accumulated earnings has been provided in the financial statements. As of December 31, 2017 , the Company provisionally recorded a liability for unremitted earnings. This provisional amount was recorded under SAB 118 and reflected withholding taxes of approximately $1.5 million . Upon further examination in the measurement period provided for in SAB 118, the Company has determined that the previously taxed unremitted earnings can be brought back tax-free. As such, the Company has reversed the deferred tax liability as of December 31, 2018 as a SAB 118 adjustment. With respect to all other non-US foreign subsidiaries, the earnings are considered to be permanently reinvested and therefore a liability has not been provided with respect to those earnings. The following table summarizes the activity related to the Company's unrecognized tax benefits during 2018 , 2017 , and 2016 (in thousands): 2018 2017 2016 Balance, beginning of the year $ 875 $ 875 $ 4,407 Additions for tax position related to the current year 125 125 125 Additions for tax position related to the prior year — — 56 Decreases for tax position related to the prior year — — (250 ) Prior year reductions: Lapse of statute of limitations (125 ) (125 ) (125 ) Settlements — — (3,338 ) Balance, end of the year $ 875 $ 875 $ 875 All of the unrecognized tax benefits as of December 31, 2018 , if recognized, would affect the Company's effective tax rate. During 2018 and 2017 , the Company recognized no interest and penalties, and in 2016 the Company recognized $0.1 million of interest and penalties. The Company has paid all accrued interest and penalties recognized prior to December 31, 2018 , therefore the Company has no accruals for the payment of interest and penalties as of December 31, 2018 and 2017 . As of December 31, 2018 , the Company is subject to U.S. Federal Income Tax examination for the tax years 2015 through 2018, and to non-U.S. income tax examination for the tax years 2011 to 2018. In addition, the Company is subject to state and local income tax examinations for the tax years 2014 through 2018. |
OTHER INCOME, NET
OTHER INCOME, NET | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME, NET | OTHER INCOME, NET The components of other income, net are as follows (in thousands): Years Ended December 31, 2018 2017 2016 Foreign exchange losses (gains) $ (1,965 ) $ 1,781 $ 3,725 Net periodic benefit income (7,107 ) (9,594 ) (5,800 ) Other, net (532 ) 113 (360 ) Other income, net $ (9,604 ) $ (7,700 ) $ (2,435 ) |
QUARTERLY RESULTS (UNAUDITED)
QUARTERLY RESULTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY RESULTS (UNAUDITED) | QUARTERLY RESULTS (UNAUDITED) The following tables contain selected unaudited Consolidated Statements of Operations and Comprehensive Income data for each quarter for the years ended December 31, 2018 and 2017 . The operating results for any quarter are not necessarily indicative of results for any future period. The quarterly results are as follows (in thousands): First Second Third Fourth Fiscal 2018 Sales $ 296,559 $ 323,351 $ 327,737 $ 354,625 $ 1,302,272 Gross profit 107,711 119,287 122,794 131,732 481,524 Net earnings 15,267 13,123 20,323 24,542 73,255 (1) (2) (3) (6) Net earnings attributable to Knoll, Inc. stockholders 15,259 13,124 20,323 24,542 73,248 (1) (2) (3) (6) Earnings per share—Basic $ 0.31 $ 0.27 $ 0.42 $ 0.50 $ 1.51 (1) (2) (3) (6) Earnings per share—Diluted $ 0.31 $ 0.27 $ 0.41 $ 0.50 $ 1.49 (1) (2) (3) (6) 2017 Sales $ 256,820 $ 268,694 $ 291,256 $ 316,122 $ 1,132,892 Gross profit 95,674 99,958 106,610 112,337 414,579 — Net earnings 15,396 12,960 19,161 32,679 80,192 (4) (5) (6) Net earnings attributable to Knoll, Inc. stockholders 15,404 12,938 19,132 32,693 80,163 (4) (5) (6) Earnings per share—Basic $ 0.32 $ 0.27 $ 0.39 $ 0.67 $ 1.66 (4) (5) (6) Earnings per share—Diluted $ 0.31 $ 0.26 $ 0.39 $ 0.67 $ 1.63 (4) (5) (6) _______________________________________________________________________________ (1) During the second, third and fourth quarters of 2018, the Company recorded pension settlement charges of $4.6 million , $0.6 million and $0.5 million , respectively. (2) During the first, second, third and fourth quarters of 2018, the Company recorded restructuring charges of $0.5 million , $0.8 million , $1.2 million and $0.1 million , respectively within the Office segment related to an organizational realignment that will result in greater operating efficiency and control. (3) During the first, second, third and fourth quarters of 2018, the Company recorded acquisition costs of $1.0 million , $0.5 million , $0.2 million and $0.2 million , respectively related to the acquisition of Muuto. (4) During the fourth quarter of 2017, the Company recorded pension settlement charges of $2.2 million and a $16.3 million write-off of property, plant, and equipment. (5) During the second quarter of 2017, Knoll recorded restructuring charges of $2.2 million related to headcount rationalization and modernization of equipment in the Office Segment. (6) The fourth quarters of 2017 and 2018 results include the impact of the Tax Cuts and Jobs Act and SAB 118 of $26.6 million and $1.7 million , respectively. |
SEGMENT AND GEOGRAPHIC REGION I
SEGMENT AND GEOGRAPHIC REGION INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC REGION INFORMATION | SEGMENT AND GEOGRAPHIC REGION INFORMATION The tables below present the Company’s segment information (in thousands): 2018 2017 2016 SALES Office $ 782,020 $ 722,984 $ 768,873 Lifestyle 520,252 409,908 395,419 Corporate — — — Knoll, Inc. $ 1,302,272 $ 1,132,892 $ 1,164,292 INTERSEGMENT SALES (1) Office $ 1,644 $ 1,331 $ 1,877 Lifestyle 10,769 10,941 14,138 Corporate — — — Knoll, Inc. $ 12,413 $ 12,272 $ 16,015 DEPRECIATION AND AMORTIZATION (2) Office $ 19,760 $ 18,334 $ 14,967 Lifestyle 14,046 6,828 5,565 Corporate 595 887 653 Knoll, Inc. $ 34,401 $ 26,049 $ 21,185 OPERATING PROFIT Office (3) $ 50,382 $ 28,233 $ 72,134 Lifestyle (4) 89,097 76,406 80,597 Corporate (4) (24,286 ) (24,102 ) (22,223 ) Knoll, Inc. (5) $ 115,193 $ 80,537 $ 130,508 CAPITAL EXPENDITURES Office $ 31,978 $ 32,515 $ 34,065 Lifestyle 8,982 6,700 7,149 Corporate 879 462 1,481 Knoll, Inc. $ 41,839 $ 39,677 $ 42,695 _______________________________________________________________________________ (1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities. (2) Excludes amortization of deferred financing fees. (3) Within the Office segment, Knoll recorded a $16.3 million write-off of property, plant, and equipment during 2017; a $5.7 million and $2.2 million pension settlement charge during 2018 and 2017, respectively; and a $2.6 million and $2.2 million restructuring charge during 2018 and 2017, respectively. (4) Knoll recorded acquisition costs of $0.6 million and $1.3 million related to the acquisition of Muuto within the Lifestyle segment and Corporate, respectively, during 2018. (5) The Company does not allocate interest expense or other (income) expense, net to the reportable segments. Many of the Company's facilities manufacture products for all both reportable segments. Therefore, it is impractical to disclose asset information on a segment basis. The Company markets its products in the United States and internationally, with its principal international markets being Canada and Europe. The table below contains information about the geographical areas in which the Company operates. Sales are attributed to the geographic areas based on the origin of sale, and property, plant, and equipment, net is based on the geographic area in which the asset resides (in thousands): United Canada Europe Mexico Consolidated 2018 Sales $ 1,066,810 $ 37,299 $ 197,401 $ 762 $ 1,302,272 Property, plant, and equipment, net 172,653 26,876 15,424 — 214,953 2017 Sales $ 977,669 $ 52,894 $ 100,233 $ 2,096 $ 1,132,892 Property, plant, and equipment, net 157,805 29,307 13,518 — 200,630 2016 Sales $ 1,031,920 $ 36,813 $ 93,420 $ 2,139 $ 1,164,292 Property, plant, and equipment, net 157,856 26,452 12,776 — 197,084 |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | Description Balance at Additions Charge-Offs Other (1) Balance at Allowance for doubtful accounts: Year ended December 31, 2016 7,919 6,653 (6,514 ) 1 8,059 Year ended December 31, 2017 8,059 (2,203 ) (1,839 ) 22 4,039 Year ended December 31, 2018 4,039 123 (454 ) 16 3,724 Valuation allowance for deferred income tax assets: Year ended December 31, 2016 6,317 451 — (607 ) 6,161 Year ended December 31, 2017 6,161 (2,578 ) — 1,206 4,789 Year ended December 31, 2018 4,789 — — — 4,789 ______________________________________________________________________________ (1) Primarily the impact of currency changes |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”). The FASB establishes accounting principles generally accepted in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants, which the Company is required to follow. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (“ASC”), which serves as a single source of authoritative non-SEC accounting and reporting standards to be applied by non-governmental entities. All amounts are presented in U.S. dollars, unless otherwise noted. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries and any partially-owned subsidiaries that the Company has the ability to control. Significant intercompany transactions and balances have been eliminated in consolidation. The results of the Company's European subsidiaries are included in the consolidated financial statements, and are presented on a one -month lag, with the exception of Muuto, to allow for the timely preparation of consolidated financial information. The effect of this lag in presentation is not material to the consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results may differ from such estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and highly-liquid investments with maturities of three months or less at the date of purchase. |
Revenue Recognition | Revenue Recognition Revenue for the years ended December 31, 2017 and 2016 were recognized under ASC 605, Revenue Recognition , when (i) persuasive evidence of an arrangement existed, (ii) delivery occurred or services were rendered, (iii) the price was fixed or determinable and (iv) collectability was reasonably assured. ASC 606, Revenue from Contracts with Customers , was adopted for the fiscal year beginning January 1, 2018. Per the new standard, the Company determines revenue recognition by applying the following steps: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue as the performance obligations are satisfied. The Company recognizes revenue when performance obligations under the terms of a contract with a customer are satisfied. The Company's primary performance obligation to its customers is the delivery of products. Control of the products sold typically transfers to the customer upon shipment or delivery depending on the shipping terms of the underlying contract. Each customer contract sets forth the transaction price for the products and services purchased under that arrangement. Some customer arrangements include variable consideration, such as volume rebates, some of which depend upon the customers meeting specified performance criteria, such as a purchasing level over a period of time. The Company uses judgment to estimate the most likely amount of variable consideration at each reporting date. When estimating variable consideration, the Company applies judgment when considering the probability of whether a reversal of revenue could occur and only recognize revenue subject to this constraint. The Company uses historical customer return data as a basis of estimation for customer returns and records the reduction of sales at the time revenue is recognized. Customer returns have historically not been significant. The Company may receive deposits from customers before revenue is recognized, thus resulting in the recognition of a contract liability (customer deposits). Amounts billed to customers for shipping and handling of products are included in sales and the related costs incurred by the Company for shipping and handling are included in cost of sales. If shipping activities are performed after a customer obtains control of a product, the Company applies a policy election to account for shipping and handling as an activity to fulfill the promise to transfer the product to the customer. The Company applies an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer. Practical Expedients Elected in adopting ASC 606 Incremental Costs of Obtaining a Contract - The Company has elected the practical expedient permitted in ASC 340-40-25-4, which permits an entity to recognize incremental costs to obtain a contract as an expense when incurred if the amortization period will be less than one year. Significant Financing Component - The Company has elected the practical expedient permitted in ASC 606-10-32-18, which allows an entity to not adjust the promised amount of consideration for the effects of a significant financing component if a contract has a duration of one year or less. As the Company’s contracts are typically less than one year in length, consideration will not be adjusted. The Company’s contracts generally include a standard payment term of 30 days, consequently there is no significant financing component within its contracts. Contract Balances The Company has contract assets consisting of Customer receivables in the Consolidated Balance Sheets which represent the amount of consideration the Company expects to be entitled to in exchange for the goods or services rendered to its customers. When the Company receives deposits, the recognition of revenue is deferred and results in the recognition of a contract liability (Customer deposits) presented as a component of Other Current Liabilities in the Consolidated Balance Sheets. Subsequent recognition of revenue and the satisfaction of the contract liability is typically less than one year as the Company’s standard contract is less than one year. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for losses associated with accounts receivable balances that are estimated to be uncollectible. The allowance is determined through an analysis of the aging of accounts receivable and assessments of risk that are based on historical trends. The Company evaluates the past-due status of its customer receivables based on the contractual terms of sale. If the financial condition of the Company's customers were to deteriorate, additional allowances may be required. Accounts receivable and corresponding allowance for doubtful accounts are written off when the Company determines that the likelihood of recovery is remote and the Company no longer intends to expend resources to attempt collection. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value and include material, labor and overhead. Cost is determined using the first-in, first-out method. The Company adjusts for inventory that it believes is impaired or obsolete. Obsolescence occurs as the result of several factors, including the discontinuance of a product line, changes in product material specifications, replacement products in the marketplace and other competitive influences. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful lives are as follows: Category Useful Life (in years) Leasehold improvements (1) Various Buildings 45-60 Building improvements 10-20 Office equipment 3-10 Software 3-10 Machinery and equipment 4-12 (1) Useful lives for leasehold improvements are amortized over the shorter of the economic lives or the term of the lease. Maintenance and repairs are expensed as incurred. Interest on capital projects is capitalized during the construction period. The Company reviews the carrying values of its property and equipment for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on undiscounted estimated cash flows expected to result from its use and eventual disposition. The factors considered by the Company in performing this assessment include current operating results, business trends affecting the use of certain assets and other economic factors. In assessing the recoverability of the carrying value of property and equipment, the Company must make assumptions regarding future cash flows and other factors. If these estimates or the related assumptions change in the future, the Company may be required to record an impairment loss for these assets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and intangible assets with indefinite lives are tested for impairment at least annually, as of October 1, and more frequently whenever events or circumstances occur indicating that a possible impairment may have been incurred. Intangible assets with finite lives are amortized over their useful lives. The Company assesses whether goodwill impairment exists using both the qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If based on this qualitative assessment the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed by determining the fair value of the Company's reporting units. The Company estimates the fair value of its reporting units using a combination of the fair values derived from both the income approach and the market approach. Under the income approach, the Company calculates the fair value of a reporting unit based on the present value of estimated future cash flows. Cash flow projections are based on management's estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate is based on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the business's ability to execute on the projected cash flows. The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly-traded companies with similar operating and investment characteristics as the reporting unit. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. When performing a qualitative assessment, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of the reporting units are less than their respective carrying values. The Company considered factors that would impact the reporting unit fair values as estimated by the market and income approaches used in the last quantitative assessment. The Company reviewed current projections of cash flows and compared these current projections to the projections included in the most recent quantitative assessment, and considered the fact that no new significant competitors entered the marketplace in the industry and that consumer demand for the industry’s products remains relatively constant, if not growing slightly. Also, economic factors during the year did not significantly affect the discount rates used for the valuation of these reporting units. The Company concluded that events occurring since the last quantitative assessment did not have a significant impact on the fair value of each of these reporting units. Therefore, the Company determined that it was not necessary to perform a quantitative goodwill impairment test for certain of these reporting units as the fair value of each reporting units appeared to exceed its respective carrying value. The Company assesses whether indefinite-lived intangible assets impairment exists using both the qualitative and quantitative assessments. The qualitative assessment involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount. If based on this qualitative assessment, the Company determines it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount or if the Company elects not to perform a qualitative assessment, a quantitative assessment is performed to determine whether an indefinite-lived intangible asset impairment exists. The Company tests the indefinite-lived intangible assets for impairment by comparing the carrying value to the fair value based on current revenue projections of the related operations, under the relief from royalty method. Any excess of the carrying value over the amount of fair value is recognized as an impairment. Any such impairment is recognized in the reporting period in which it has been identified. Finite-lived intangible assets such as customer relationships, non-compete agreements, and licenses are amortized over their estimated useful lives. The Company reviews the carrying values of these assets for possible impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on undiscounted estimated cash flows expected to result from its use and eventual disposition. The Company continually evaluates the reasonableness of the useful lives of these assets. |
Business Combinations | Business Combinations The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired business are included in the Company's operating results from the date of acquisition. |
Deferred Financing Fees | Deferred Financing Fees Financing fees that are incurred by the Company in connection with the issuance of debt are deferred and amortized to interest expense over the life of the underlying indebtedness. Deferred financing fees are presented in the Company's consolidated balance sheets as a direct reduction from long-term debt. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred, and are included as a component of selling, general, and administrative expenses. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability approach, which requires deferred tax assets and liabilities be recognized using enacted tax rates to measure the effect of temporary differences between book and tax bases on recorded assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets, if it is more likely than not some portion or all of the deferred tax assets will not be recognized. The need to establish valuation allowances against deferred tax assets is assessed quarterly. The Company maintained a valuation allowance primarily for net operating loss carryforwards in foreign tax jurisdictions where the Company has incurred historical tax losses from operations, and has determined that it is more likely than not these deferred tax assets will not be recognized. The primary factors used to assess the likelihood of realization are reversals of taxable temporary timing differences, forecasts of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The Company evaluates tax positions to determine whether the benefits of tax positions are more likely than not to be sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not to be sustained upon audit, the Company recognizes the largest amount of the benefit that is greater than 50% likely of being realized upon ultimate settlement. For tax positions that are not more likely than not to be sustained upon audit, the Company does not recognize any portion of the benefit. If the more likely than not threshold is not met in the period for which a tax position is taken, the Company may subsequently recognize the benefit of that tax position if the tax matter is effectively settled, the statute of limitations expires, or if the more likely than not threshold is met in a subsequent period. The Company recognizes income tax-related interest and penalties in income tax expense and accrues for interest and penalties in other noncurrent liabilities. The Tax Cuts and Jobs Act of 2017 (“Tax Act”), as signed by the President of the United States on December 22, 2017, significantly revised U.S. tax law. The law included significant changes to the U.S. corporate income tax system, including a Federal corporate rate reduction from 35% to 21% , limitations on the deductibility of interest expense and executive compensation, and the transition of U.S. international taxation from a worldwide tax system to a territorial tax system. As a result in the fourth quarter of 2017, the Company recorded a tax benefit of $26.6 million , which primarily related to the remeasurement of the Company's deferred tax assets and liabilities in the U.S. based on the new lower corporate income tax rate and the one-time transition tax. During 2018, the Company finalized the calculations and recorded an additional tax benefit of $1.7 million related to the rate differential on the deferred provision to return. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company uses the following valuation techniques to measure fair value for its financial assets and financial liabilities: Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data. Level 3 Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company and its subsidiaries use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques and option-pricing models), and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability. These valuation approaches incorporate inputs such as observable, independent market data and/or unobservable data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. |
Derivative Instruments | Derivative Instruments The Company utilizes derivative instruments to mitigate volatility related to interest rates on certain debt instruments. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. The Company recognizes derivatives as either assets or liabilities in the Consolidated Balance Sheets and measures those instruments at fair value. Changes in the fair value of those instruments are initially reported in Accumulated Other Comprehensive Income (Loss) if they qualify for hedge accounting and is subsequently recognized in earnings when the hedged exposure affects earnings. Derivatives qualify for hedge accounting if they are designated as hedge instruments and if the hedge is highly effective in achieving offsetting changes in the cash flows of the asset or liability hedged. Hedge effectiveness is assessed on a regular basis. Changes in fair value of derivative instruments that do not qualify for hedge accounting are recognized immediately in current net earnings. |
Commitments and Contingencies | Commitments and Contingencies The Company establishes reserves for the estimated cost of environmental, legal and other contingencies when such expenditures are probable and reasonably estimable. A significant amount of judgment is required to estimate and quantify the ultimate exposure in these matters. The Company engages outside experts as deemed necessary or appropriate to assist in the evaluation of exposure. From time to time, as information becomes available regarding changes in circumstances for ongoing issues as well as information regarding emerging issues, the potential liability is reassessed and reserve balances are adjusted as necessary. Revisions to the estimates of potential liability, and actual expenditures related to commitments and contingencies, could have a material impact on the results of operations or financial position. |
Warranty | Warranty The Company generally offers an assurance-type warranty for its products. The specific terms and conditions of those warranties vary depending upon the product sold. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time product revenue is recognized. Factors that affect the Company's warranty liability include historical product-failure experience and estimated repair costs for identified matters. The Company regularly assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. |
Concentration of Credit Risk | Concentration of Credit Risk The Company's customer receivables are comprised primarily of amounts due from independent dealers and direct customers. The Company monitors and manages the credit risk associated with the individual dealers and direct customers. The independent dealers are responsible for assessing and assuming the credit risk of their customers, and may require their customers to provide deposits or other credit enhancement measures. Historically the Company has had a concentration of federal and local government receivables; however, they carry minimal credit risk. |
Foreign Currency Translation | Foreign Currency Translation Results of foreign operations are translated into U.S. dollars using average exchange rates during the year, while assets and liabilities are translated into U.S. dollars using the exchange rates as of the balance sheet dates. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss). Transaction gains and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency of the applicable subsidiary are included in the consolidated statements of operations, within other income, net, in the year in which the gain or loss occurs. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The Company recognizes compensation expense using the straight-line method over the vesting period. Compensation expense relating to restricted stock units that are subject to performance conditions is recognized if it is probable that the performance condition will be achieved. Forfeitures are recognized when they occur. The fair value of restricted stock and restricted stock units, excluding market-based restricted stock units, is based upon the closing market price of the Company's common stock on the date of grant. The fair value of the market-based restricted stock units is estimated at the date of grant using a Monte Carlo simulation model, which requires management to make certain assumptions based on both historical and current data. These awards vest based upon the performance of the Company's stock price relative to a peer group. The assumptions included in the model include, but are not limited to, risk-free interest rate, expected volatility of the Company's and the peer group's stock prices, and dividend yield. The risk-free rate is based upon the applicable U.S. Treasury Note rate. Expected volatility is estimated based on the historical volatility of the Company's stock prices. The dividend yield is based on the Company's historical data. |
Pension and Other Postemployment Benefits | Pension and Other Post-Employment Benefits The Company sponsors two defined benefit pension plans and two other post-employment benefit plans ("OPEB"). Several statistical and other factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the plans. Key factors include assumptions about the expected rates of return on plan assets, discount rates, and health care cost trend rates. The Company considers market and regulatory conditions, including changes in investment returns and interest rates, in making these assumptions. The Company determines the expected long-term rate of return on plan assets based on aggregating the expected rates of return for each component of the plan's asset mix. The Company uses historic plan asset returns combined with current market conditions to estimate the rate of return. The expected rate of return on plan assets is a long-term assumption and generally does not change annually. The discount rate reflects the market rate for high-quality fixed income debt instruments as of the Company's annual measurement date and is subject to change each year. Unrecognized actuarial gains and losses are recognized over the expected remaining lifetime of the plan participants. Unrecognized actuarial gains and losses arise from several factors, including experience and assumption changes with respect to the obligations of the pension and OPEB plans, and from the difference between expected returns and actual returns on plan assets. These unrecognized gains and losses are systematically recognized as a change in future net periodic pension expense in accordance with the appropriate accounting guidance relating to defined benefit pension and OPEB plans. Key assumptions used in determining the amount of the obligation and expense recorded for the OPEB plans include the assumed discount rate and the assumed rate of increases in future health care costs. In estimating the health care cost trend rate, the Company considers actual health care cost experience, future benefit structures, industry trends and advice from its actuaries. The Company assumes that the relative increase in health care costs will generally trend downward over the next several years, reflecting assumed increases in efficiency and cost-containment initiatives in the health care system. In accordance with the appropriate accounting guidance, the Company has recognized the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligation) of the defined benefit pension and OPEB plans in the consolidated balance sheets. To record the unfunded status of the plans, the Company recorded an additional liability and an adjustment to accumulated other comprehensive loss, net of tax. Other changes in the benefit obligation including net actuarial loss (gain) and prior service cost (credit) are recognized in other comprehensive income. The actuarial assumptions the Company used in determining the pension and OPEB retirement benefits may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants. While the Company believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may materially affect the financial position or results of operations. |
Segment Information | Segment Information The Company has two reportable segments: Office and Lifestyle. The Office reportable segment is comprised of the operations of the Office operating segment. The Lifestyle reportable segment is an aggregation of the Lifestyle, Europe Studio, and Muuto operating segments. All unallocated expenses are included within Corporate. The Office reportable segment includes a complete range of workplace products that address diverse workplace planning paradigms. These products include: systems furniture, seating, storage, tables, desks and KnollExtra® accessories as well as the international sales of our North American Office products. The Lifestyle reportable segment aggregates three operating segments: Lifestyle, Europe Studio and Muuto. Our Lifestyle reportable segment products, which are distributed in North America and Europe, include iconic seating, lounge furniture, side, café and dining chairs as well as conference, training, dining and occasional tables, lighting, rugs, textiles, high-quality fabrics, felt, leather and related architectural products. Corporate costs represent the accumulation of unallocated costs relating to shared services and general corporate activities including, but not limited to, legal expenses, acquisition expenses, certain finance, human resources, administrative and executive expenses and other expenses that are not directly attributable to an operating segment. Dedicated, direct selling, general and administrative expenses of the segments are included within segment operating profit. Management regularly reviews the costs included in the Corporate function, and believes disclosing such information provides more visibility and transparency of how the chief operating decision maker reviews the results for the Company. During 2018, the Company changed the structure of its internal organization that caused the composition of its reportable segments to change. Prior to the reorganization, the Company had three reportable segments: Office, Studio and Coverings. While the Office reportable segment was previously comprised of the operations of the Office operating segment, the Studio and Coverings reportable segments were each comprised of multiple operating segments that had been previously aggregated. Subsequently, these operating segments that previously comprised the Studio and Coverings reportable segments were reorganized and now represent components of the Lifestyle and Europe Studio operating segments. As a result of this change, the Company retrospectively revised prior period results, by segment, to conform to the current period presentation. |
New Accounting Pronouncements | New Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued guidance codified in ASC 842, Leases, which supersedes the guidance in ASC 840, Leases. ASC 842 will be effective for the Company on January 1, 2019, and the Company will adopt the standard using the modified retrospective approach. While the Company continues to evaluate the provisions of ASC 842 to determine how it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. Lessees will classify leases as either finance or operating leases and lessors classify all leases as sales-type, direct financing or operating leases. For operating leases, the consolidated statement of operations presentation and expense recognition is similar to that of operating leases under ASC 840 with single lease cost recognized on a straight-line basis. The Company has no financing leases. During 2018, the Company made progress on implementing the new standard which included surveying the Company’s businesses, assessing the Company’s portfolio of leases and compiling a central repository of active leases. The Company evaluated key policy elections and considerations under the standard which the Company will utilize to develop an internal policy to address the new standard requirements. Additionally, the Company selected a lease accounting software solution to support the new reporting requirements and started implementation of the software. While the Company continues to assess the impact on its accounting policies, internal control processes and related disclosures required under the new guidance, the Company expects to record lease liabilities of approximately $133 million , with an offsetting increase to right-of-use assets of approximately $120 million for all leases with an initial term of greater than twelve months regardless of their classification. These conclusions may change as the Company continues to evaluate the new standard or if there are any changes in the Company’s lease portfolio. In 2018, the FASB issued clarifying guidance to the topic in ASUs No. 2018-10 and No. 2018-11, which clarified certain aspects of the new leases standard and provided an optional transition method. The Company has elected the package of practical expedients and will adopt utilizing the optional transition method defined within ASU 2018-11 upon adoption on January 1, 2019. The Company did not elect the hindsight expedient. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock compensation (Topic 718) which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation-Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers . The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company does not plan to early adopt this ASU but does not believe there will be a material impact to the financial statements as a result of adopting this ASU. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the disclosure requirements of fair value measurements in Topic 820, Fair Value Measurement. For public companies the ASU removes disclosure requirements for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. The ASU modifies the disclosure requirements for investments in certain entities that calculate net asset value and clarifies that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The ASU adds the disclosure requirement for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019 including interim periods within that fiscal year. Early adoption is permitted. The Company does not plan to early adopt this ASU and the Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. Accounting Standards Adopted In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers ”, also referred to as ASC 606, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU supersedes the revenue recognition requirements in FASB ASC Topic 605, “Revenue Recognition,” and most industry-specific guidance. The standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein. The Company adopted the standard as of January 1, 2018. The Company adopted ASC 606 for all open contracts as of January 1, 2018 using the modified retrospective transition method, and applied the guidance to report new disclosures surrounding the Company’s recognition of revenue. The adoption of the new standard did not have a material impact on the financial position of the Company, the results of its operations or its cash flows as of and for the year ended December 31, 2018, and the Company’s internal controls over financial reporting. There was no cumulative effect of adopting the standard at the date of initial application in retained earnings. The new standard further requires quantitative and qualitative disclosures about the Company’s contracts with customers which have been included within this Form 10-K. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20). The ASU removes the requirements to disclose: amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, the amount and timing of plan assets expected to be returned to the employer, related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan, and the effects of a one-percentage-point change in assumed health care cost trend rates. The ASU requires disclosure of the explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments in the update are effective for all entities for fiscal years beginning after December 15, 2020 including interim periods within that fiscal year. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis to all periods presented. The Company adopted the update in the fourth quarter of 2018 and there is no material impact to the financial statements as a result of adopting this ASU. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715) . The new standard requires the service cost component of net periodic benefit cost to be presented in the same income statement line as other employee compensation costs arising from services rendered during the period and the other components of net periodic benefit cost to be presented separately from the income statement lines that include service cost and outside of any subtotal of operating income. The Company adopted the new standard for the period beginning January 1, 2018, resulting in no change in presentation of the service cost component of net periodic benefit cost, which has historically been reported in selling, general and administrative expenses along with other employee compensation costs. The retrospective adoption resulted in the Company reclassifying $9.6 million and $5.8 million in 2017 and 2016, respectively, of the other components of net periodic benefit cost from Selling, general and administrative to Other income, net. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815) . The new standard is intended to better align a company’s risk management strategies and financial reporting for hedging relationships. Under the new guidance, more hedging strategies will be eligible for hedge accounting and the application of hedge accounting is simplified. In addition, the new guidance amends presentation and disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including the interim periods within those years. The Company early adopted the standard as of January 1, 2018. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. Subsequently, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) which provides guidance regarding situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740) which incorporates the provision of SAB 118 into the accounting standards codification. In 2017 in accordance with SAB 118, the Company made a reasonable estimate of the effects on its existing deferred tax balances and one-time transition tax including the impact of the assertion to repatriate foreign earnings, which was anticipated to change as data became available through the tax return preparation process allowing more accurate scheduling of the deferred tax assets and liabilities primarily related to depreciable assets, inventory, employee compensation and commissions. The measurement period ended in the fourth quarter of 2018 in accordance with SAB 118 standards, and the Company finalized its accounting. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220). The new standard will allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“Tax Act”). The amendments eliminate the stranded tax effects resulting from the Tax Act and will improve the usefulness of information reported to financial statements users. However, because the amendment only relates to the reclassification of the income tax effects of the Tax Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including the interim periods within those years. The Company early adopted the standard effective January 1, 2018 and reclassified $4.8 million from accumulated other comprehensive income to retained earnings related to the Company’s pension and other postretirement liabilities. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of depreciable lives | Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful lives are as follows: Category Useful Life (in years) Leasehold improvements (1) Various Buildings 45-60 Building improvements 10-20 Office equipment 3-10 Software 3-10 Machinery and equipment 4-12 (1) Useful lives for leasehold improvements are amortized over the shorter of the economic lives or the term of the lease. Information regarding the Company's property, plant and equipment is as follows (in thousands): December 31, 2018 2017 Land $ 11,985 $ 12,489 Leasehold improvements 59,604 54,995 Buildings 68,852 67,465 Office equipment 19,533 18,193 Software 43,436 40,378 Machinery and equipment 237,194 243,939 Construction-in-progress 52,730 32,481 Property, plant and equipment 493,334 469,940 Accumulated depreciation (278,381 ) (269,310 ) Property, plant, and equipment, net $ 214,953 $ 200,630 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Net sales by Product Category | The Company’s sales by product category were as follows (in thousands): Twelve Months Ended December 31, 2018 2017 2016 Office Segment Office Systems $ 435,135 $ 422,681 $ 488,751 Seating 128,855 118,454 124,732 Files and Storage 91,537 90,362 85,696 Ancillary 92,372 59,487 38,150 Other 34,121 32,000 31,544 Total Office Segment $ 782,020 $ 722,984 $ 768,873 Lifestyle Segment Studio 410,239 300,948 285,885 Coverings 110,013 108,960 109,534 Total Lifestyle Segment $ 520,252 $ 409,908 $ 395,419 Total Sales $ 1,302,272 $ 1,132,892 $ 1,164,292 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition Pro Forma Information | Unaudited pro forma information for the Company for the twelve months ended December 31, 2018 and 2017 as if the acquisition had occurred January 1, 2017 is as follows (in thousands): Twelve Months Ended December 31, 2018 2017 Pro forma sales $ 1,306,420 $ 1,203,158 Pro forma net earnings attributable to Knoll, Inc. stockholders $ 78,964 $ 77,892 The amount of sales and net loss that resulted from the acquisition and attributable to Knoll, Inc. stockholders included in the Consolidated Statements of Operations and Comprehensive Income during the twelve month period ended December 31, 2018 were as follows (in thousands): Twelve Months Ended December 31, 2018 Sales $ 85,575 Net Income (loss) attributable to Knoll, Inc. stockholders $ (1,305 ) |
Schedule of Recognized Identifiable Assets and Liabilities | The following table summarizes the fair values assigned to the assets acquired and liabilities assumed and resulting goodwill as of the January 25, 2018 acquisition date (in thousands): Amounts Recognized as of Acquisition Date Cash $ 7,605 Customer receivables 8,617 Inventory 11,085 Other current assets 453 Property, plant, and equipment, net 1,266 Intangible assets 135,600 Other non-current assets 296 Total assets acquired $ 164,922 Accounts payable 3,418 Other current liabilities 10,591 Deferred income taxes 29,919 Total liabilities assumed $ 43,928 Net assets acquired $ 120,994 Purchase price $ 315,313 Less: Fair value of acquired identifiable assets and liabilities 120,994 Goodwill $ 194,319 |
Summary of Estimated Fair Value of Identifiable Intangible Assets and Their Estimated Useful Lives | The following table summarizes the estimated fair value of Muuto’s identifiable intangible assets and their estimated useful lives (in thousands): Fair Value as of January 25, 2018 Estimated Useful Life (in years) Indefinite-lived intangible assets: Trade name $ 66,000 Indefinite Finite-lived intangible assets: Wholesale customer relationships 35,800 15 Contract customer relationships 25,000 9 Copyrights & designs 7,500 7 Non-competition agreements 1,300 3 Total intangible assets $ 135,600 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Information regarding the Company's inventories is as follows (in thousands): December 31, 2018 2017 Raw materials $ 65,185 $ 58,725 Work-in-process 8,282 6,943 Finished goods 97,082 79,277 $ 170,549 $ 144,945 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Property, plant, and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The useful lives are as follows: Category Useful Life (in years) Leasehold improvements (1) Various Buildings 45-60 Building improvements 10-20 Office equipment 3-10 Software 3-10 Machinery and equipment 4-12 (1) Useful lives for leasehold improvements are amortized over the shorter of the economic lives or the term of the lease. Information regarding the Company's property, plant and equipment is as follows (in thousands): December 31, 2018 2017 Land $ 11,985 $ 12,489 Leasehold improvements 59,604 54,995 Buildings 68,852 67,465 Office equipment 19,533 18,193 Software 43,436 40,378 Machinery and equipment 237,194 243,939 Construction-in-progress 52,730 32,481 Property, plant and equipment 493,334 469,940 Accumulated depreciation (278,381 ) (269,310 ) Property, plant, and equipment, net $ 214,953 $ 200,630 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the Company's Other Intangible Assets | Information regarding the Company's other intangible assets are as follows (in thousands): December 31, 2018 December 31, 2017 Gross Accumulated Net Gross Accumulated Net Indefinite-lived intangible assets: Tradenames $ 285,529 $ — $ 285,529 $ 225,600 $ — $ 225,600 Finite-lived intangible assets: Customer relationships 78,382 (18,418 ) 59,964 22,497 (11,575 ) 10,922 Copyrights & design 6,960 (999 ) 5,961 — — — Various 13,510 (11,018 ) 2,492 12,088 (10,029 ) 2,059 Total $ 384,381 $ (30,435 ) $ 353,946 $ 260,185 $ (21,604 ) $ 238,581 |
Schedule of Estimated Amortization Expense Based on the Finite-lived Intangible Assets | The expected amortization expense based on the finite-lived intangible assets as of December 31, 2018 is as follows (in thousands): Estimated Amortization 2019 $ 8,605 2020 8,466 2021 7,960 2022 7,635 2023 7,564 |
Schedule of Changes in the Carrying Amount of Goodwill by Reportable Segment | The changes in the carrying amount of goodwill by reportable segment are as follows (in thousands): Office Lifestyle Segment Total Balance as of December 31, 2016 $ 35,701 $ 105,690 $ 141,391 Foreign currency translation adjustment 519 — 519 Purchase accounting adjustment — 203 203 Balance as of December 31, 2017 36,220 105,893 142,113 Foreign currency translation adjustment (597 ) (15,351 ) (15,948 ) Goodwill acquired — 194,594 194,594 Balance as of December 31, 2018 $ 35,623 $ 285,136 $ 320,759 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Information regarding the Company's other current liabilities is as follows (in thousands): December 31, 2018 2017 Accrued employee compensation $ 40,568 $ 41,144 Customer deposits 37,716 30,484 Warranty 9,623 9,174 Other 40,938 23,356 Other current liabilities $ 128,845 $ 104,158 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of future minimum rental payments required under operating leases | Future minimum rental payments required, excluding maintenance and other miscellaneous charges, under those operating leases are as follows (in thousands): Future Minimum Rental Payments 2019 $ 26,427 2020 23,805 2021 19,135 2022 17,224 2023 15,063 Subsequent years 38,778 Total minimum lease payments $ 140,432 |
PENSION AND OTHER POST-EMPLOY_2
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Schedule of Reconciliation of Related Benefit Obligation and Plan Assets | The following table sets forth a reconciliation of the related benefit obligation and plan assets related to the benefits provided by the Company (in thousands): Pension Benefits Other Benefits 2018 2017 2018 2017 Change in projected benefit obligation: Projected benefit obligation at beginning of the period $ 295,566 $ 280,193 $ 3,806 $ 5,736 Expected administrative expenses 940 700 — — Interest cost 10,160 9,455 120 173 Plan amendments — — — (1,317 ) Participant contributions — — 209 206 Actuarial (gain) loss (26,385 ) 27,925 (43 ) (284 ) Benefits paid (7,095 ) (7,617 ) (490 ) (708 ) Benefits paid related to settlement (29,480 ) (11,969 ) — — Loss (gain) related to settlement 893 (472 ) — — Administrative expenses paid (984 ) (2,649 ) — — Projected benefit obligation at end of the period $ 243,615 $ 295,566 $ 3,602 $ 3,806 Accumulated benefit obligation at end of the period $ 243,615 $ 295,566 $ — $ — Change in plan assets: Fair value of plan assets at beginning of the period $ 273,895 $ 263,027 $ — $ — Actual return on plan assets (10,306 ) 33,103 — — Employer contributions 7,900 — 281 502 Participant contributions — — 209 206 Actual expenses paid (984 ) (2,649 ) — — Benefits paid (7,095 ) (7,617 ) (490 ) (708 ) Benefits paid related to settlement (29,480 ) (11,969 ) — — Fair value of plan assets at the end of period $ 233,930 $ 273,895 $ — $ — Funded status $ (9,685 ) $ (21,671 ) $ (3,602 ) $ (3,806 ) |
Schedule of Assumptions Used in Computing the Benefit Obligation | Assumptions used in computing the benefit obligation as of December 31, 2018 and 2017 were as follows: Pension Benefits Other Benefits 2018 2017 2018 2017 Discount rate 4.37% - 4.46% 3.70 - 3.77% 3.30% - 4.32% 2.48 - 3.66% Expected return on plan assets 4.60% - 7.10% 7.10 % N/A N/A Rate of compensation increase N/A N/A N/A N/A |
Schedule of Fair Value of Pension Plan investments | The following table presents the fair value of the Company's pension plan investments as of December 31, 2018 and 2017 (in thousands): Level 1 Level 2 Level 3 Total Equity Securities U.S. equity securities $ — $ 54,484 $ — $ 54,484 Non-U.S. equity securities — 28,036 — 28,036 Debt Securities Fixed income funds and cash investment funds 121,663 29,747 — 151,410 December 31, 2018 $ 121,663 $ 112,267 $ — $ 233,930 Equity Securities U.S. equity securities $ — $ 75,944 $ — $ 75,944 Non-U.S. equity securities — 37,042 — 37,042 Debt Securities Fixed income funds and cash investment funds 123,867 37,042 — 160,909 December 31, 2017 $ 123,867 $ 150,028 $ — $ 273,895 |
Schedule of Consolidated Balance Sheet Presentation for Components Relating to Company's Pension and OPEB Plans | The following table sets forth the consolidated balance sheets presentation for components relating to the Company's pension and OPEB plans (in thousands): Pension Benefits (2) Other Benefits (2) 2018 2017 2018 2017 Amounts recognized in the consolidated balance sheets consist of: Noncurrent assets $ 4,245 $ — $ — $ — Current liabilities — — (301 ) (231 ) Noncurrent liabilities (13,930 ) (21,671 ) (3,301 ) (3,575 ) Net amount recognized $ (9,685 ) $ (21,671 ) $ (3,602 ) $ (3,806 ) Amounts recognized in accumulated other comprehensive income (loss) before taxes: Net actuarial loss $ 55,923 $ 60,256 $ 1,043 $ 1,015 Prior service (credit) — — (2,580 ) (3,310 ) Net amount recognized $ 55,923 $ 60,256 $ (1,537 ) $ (2,295 ) |
Schedule of Other Changes in Benefit Obligation Recognized in Other Comprehensive Income | The following table sets forth changes in the benefit obligation before income taxes recognized in other comprehensive income for the Company's pension and OPEB plans (in thousands): Pension Benefits Other Benefits 2018 2017 2018 2017 Net actuarial loss (gain) $ 2,390 $ 12,794 $ (43 ) $ (227 ) Prior service (credit) — — — (1,400 ) Amortization of: Prior service credit — — 730 1,485 Actuarial (loss) gain (988 ) (704 ) 71 (3 ) Loss recognized related to settlement (5,735 ) (2,162 ) — — Total recognized in OCI $ (4,333 ) $ 9,928 $ 758 $ (145 ) |
Schedule of Components of the Net Periodic Benefit Cost | The following table sets forth the components of the net periodic benefit cost (income) for the Company's pension and OPEB plans (in thousands): Pension Benefits Other Benefits 2018 2017 2016 2018 2017 2016 Expected administrative expenses $ 940 $ 700 $ 1,870 $ — $ — $ — Interest cost 10,160 9,455 9,662 120 173 196 Expected return on plan assets (17,574 ) (18,444 ) (14,782 ) — — — Amortization of prior service cost (credit) — — — (730 ) (1,485 ) (1,120 ) Recognized actuarial loss (gain) 988 704 492 (71 ) 3 (248 ) Settlement related expense (1) 5,735 2,162 — — — — Net periodic benefit cost (income) $ 249 $ (5,423 ) $ (2,758 ) $ (681 ) $ (1,309 ) $ (1,172 ) _______________________________________________________________________________ (1) The pension settlement charge for 2018 related to the purchase of annuities for certain plan retirees as well as cash payments for lump sum elections. The pension settlement charge for 2017 related to lump sum elections made by employees affected by the restructuring activities in the second quarter of 2017. |
Schedule of Assumptions Used to Determine Net Periodic Benefit Cost | Assumptions used to determine net periodic benefit cost for the years ended December 31, 2018 , 2017 , and 2016 were as follows: Pension Benefits Other Benefits 2018 2017 2016 2018 2017 2016 Discount rate 3.70 - 3.77% 3.80 - 4.25% 4.55 - 4.65% 2.48 - 3.66% 2.35 - 4.20% 2.30 - 4.51% Expected return on plan assets 7.10 % 7.10 % 7.10 % N/A N/A N/A Rate of compensation increase N/A N/A N/A N/A N/A N/A |
Schedule of Health Care Cost trend Rates | For purposes of measuring the benefit obligation associated with the Company's OPEB plans as of December 31, 2018 , as well as the assumed rate for 2018 the following rates were assumed to affect the per capita costs of the following covered benefits: Benefit obligation Net periodic benefit cost 2018 2027 and thereafter 2018 2025 and thereafter Healthcare 6.50 % 4.50 % 5.60% - 7.20% 4.50 % Prescription drug 9.00 % 4.50 % 10.10 % 4.50 % |
Schedule of Weighted-average Asset Allocations by Asset Category | The Company's pension plans' weighted-average asset allocations as of December 31, 2018 and 2017 , by asset category were as follows: Plan Assets at 2018 2017 Asset Category: Temporary investment funds 3 % 1 % Equity investment funds 35 % 41 % Fixed income funds 62 % 58 % Total 100 % 100 % |
Estimated Future Benefit Payments Under the Pension and OPEB plans | Estimated future benefit payments under the pension and OPEB plans are as follows (in thousands): Pension Benefits Other Benefits 2019 $ 16,919 $ 301 2020 17,246 254 2021 17,330 263 2022 17,366 262 2023 17,031 263 2024 - 2027 79,360 1,235 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of indefinite lived intangible assets recorded at fair value on a recurring basis | The following table represents the assets and liabilities, measured at fair value on a recurring basis and the basis for that measurement (in thousands): Fair Value as of December 31, 2018 Fair Value as of December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Liabilities: Interest rate swap $ — $ 1,689 $ — $ 1,689 $ — $ — $ — $ — Contingent purchase price payment - DatesWeiser — — 750 750 — — 1,100 1,100 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Swap, Which Hedges Long-term Debt Obligation, Notional Amount Decrease | As of December 31, 2018 , the Company’s interest rate swap agreement, which hedges certain long-term debt obligations, has an initial notional amount of $300.0 million , which decreases over time by $50 million increments as follows: Period Notional amount outstanding Through December 2019 $300 million January 2020 - December 2020 $250 million January 2021 - December 2021 $200 million January 2022 - December 2022 $150 million January 2023 $100 million |
Location and Fair Value of Interest Rate Swap | The following table illustrates the location and fair value of the Company’s interest rate swap at December 31, 2018 and December 31, 2017 (in thousands): Derivatives December 31, 2018 December 31, 2017 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: Interest rate swap Other current liabilities $255 n/a $0 Interest rate swap Other noncurrent liabilities 1,434 n/a — Total derivatives designated as hedging instruments $1,689 $0 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company's long-term debt is summarized as follows (in thousands): December 31, 2018 2017 Balance of revolving credit facility $ 134,500 $ 27,000 Balance of term loan 330,802 165,000 Total long-term debt 465,302 192,000 Less: Current maturities of long-term debt 17,185 10,000 Less: Deferred financing fees, net 4,219 952 Long-term debt $ 443,898 $ 181,048 |
Schedule of Revolving Credit Facilities | The following revolving credit facilities were in place at December 31, 2018 and 2017 (in thousands): December 31, 2018 December 31, 2017 Expiration Date Capacity Borrowed Letter of Credit Unused capacity Expiration Date Capacity Borrowed Letter of Credit Unused capacity Jan 2023 $ 400,000 $ 134,500 $ 5,167 $ 260,333 May 2019 $ 300,000 $ 27,000 $ 5,367 $ 267,633 |
Schedule of Aggregate Maturities of Long-term Debt | The aggregate maturities of long-term debt are as follows (in thousands): Future minimum debt payments 2019 $ 17,185 2020 17,184 2021 17,184 2022 17,184 2023 396,565 Thereafter — Total $ 465,302 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the warranty Reserve | Changes in the warranty reserve are as follows (in thousands): 2018 2017 2016 Balance, beginning of the year $ 9,174 $ 8,906 $ 8,513 Provision for warranty claims 7,726 7,099 6,792 Warranty claims incurred (7,898 ) (6,735 ) (6,272 ) Warranties acquired through business acquisition 611 — — Foreign currency translation adjustment 10 (96 ) (127 ) Balance, end of the year $ 9,623 $ 9,174 $ 8,906 |
STOCK PLANS (Tables)
STOCK PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Shares Authorized by Plans | The following table summarizes the Company approved plans, the number of shares authorized to be issued and the number of shares available to be issued as of December 31, 2018 : Authorized for issue Available for issue 2010 Stock Incentive Plan 2,000,000 56,959 2013 Stock Incentive Plan 2,000,000 513,399 2018 Stock Incentive Plan 2,000,000 2,000,000 Total available for issuance 2,570,358 |
Schedule of Restricted Stock Activity | The following table shows the details for each of the 2016 , 2017 and 2018 restricted shares and restricted stock units grants: Grant Date Number of restricted shares and restricted stock units Weighted-Average Grant Date Fair Value Vesting Vesting Period 2016 grants 283,000 $ 18.69 Cliff - Subject to service conditions Three Years 30,632 $ 18.28 Graded - Subject to service conditions Three Years 163,509 $ 18.81 Cliff - Subject to service and performance conditions Three Years 109,000 $ 12.03 Cliff - Subject to service and market conditions Three Years Total 2016 grants 586,141 2017 grants 277,250 $ 22.80 Cliff - Subject to service conditions Three - Four Years 24,488 $ 22.87 Graded - Subject to service conditions Three Years 147,938 $ 22.77 Cliff - Subject to service and performance conditions Three Years 98,625 $ 10.63 Cliff - Subject to service and market conditions Three Years Total 2017 grants 548,301 2018 grants 223,988 $ 21.21 Cliff - Subject to service conditions Three Years 37,788 $ 19.89 Graded - Subject to service conditions Two Years 150,009 $ 21.20 Cliff - Subject to service and performance conditions Three Years 100,000 $ 13.87 Cliff - Subject to service and market conditions Three Years Total 2018 grants 511,785 The following table summarizes the Company's restricted shares activity during the year: Restricted Weighted-Average Grant Date Outstanding at December 31, 2017 841,610 $ 20.41 Granted 261,776 21.02 Forfeited (20,940 ) 22.01 Vested (357,194 ) 19.62 Outstanding at December 31, 2018 725,252 $ 21.03 The following table summarizes the Company's restricted stock units activity during the year: Restricted Weighted-Average Grant Date Restricted Weighted-Average Grant Date Restricted Weighted-Average Grant Date Outstanding at December 31, 2017 15,000 $ 14.04 327,486 $ 20.44 236,708 $ 12.46 Granted — — 150,009 21.20 100,000 13.87 Forfeited — — (16,270 ) 20.05 (10,845 ) 11.84 Vested (15,000 ) 14.04 (55,921 ) 21.21 (503 ) 11.80 Expired — — — — (55,163 ) 14.88 Outstanding at December 31, 2018 — $ — 405,304 $ 20.92 270,197 $ 12.46 |
Schedule of Stock Option Assumptions | In determining these values, the following weighted-average assumptions were used for the stock units granted during the fiscal years indicated: 2018 2017 2016 Weighted-average fair value on grant date $ 13.87 $ 10.63 $ 12.03 Assumptions used to compute fair value : Volatility 27.3 % 27.2 % 27.3 % Risk free interest rate 2.3 % 1.6 % 0.7 % Expected term 3 years 3 years 2.6 years Expected dividend yield 2.8 % 2.6 % 2.3 % |
Schedule of Stock Options Activity | A summary of the status of the Company's options as of December 31, 2018 and 2017 , and changes during the year ended December 31, 2018 , is presented below. Number of Weighted- Weighted- Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at December 31, 2017 — $ — $ — Granted 20,000 4.01 22.59 Outstanding at December 31, 2018 20,000 $ 4.01 $ 22.59 4.6 $ — Exercisable at December 31, 2018 — $ — $ — 0 $ — |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Changes in Common Stock Outstanding | The following table demonstrates the change in the number of shares of common stock outstanding during the years ended December 2018 , 2017 , and 2016 (excludes non-voting restricted shares). Shares outstanding as of December 31, 2015 47,828,079 Purchase of common stock (123,577 ) Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes 192,050 Exercise of stock options 202,500 Shares issued to Board of Directors in lieu of cash 3,276 Shares outstanding as of December 31, 2016 48,102,328 Purchase of common stock (17,445 ) Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes 385,037 Exercise of stock options 22,500 Shares issued to Board of Directors in lieu of cash 5,522 Shares outstanding as of December 31, 2017 48,497,942 Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes 204,855 Shares issued to Board of Directors in lieu of cash 3,129 Shares outstanding as of December 31, 2018 48,705,926 |
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) are as follows (in thousands): Beginning Before-Tax Tax Benefit Net-of-Tax ASU 2018-02 Ending December 31, 2016 Pension and other post-employment liability adjustment $ (22,832 ) $ (10,785 ) $ 4,212 $ (6,573 ) $ — $ (29,405 ) Foreign currency translation adjustment (14,486 ) 488 — 488 — (13,998 ) Accumulated other comprehensive income (loss) $ (37,318 ) $ (10,297 ) $ 4,212 $ (6,085 ) $ — $ (43,403 ) December 31, 2017 Pension and other post-employment liability adjustment $ (29,405 ) $ (9,783 ) $ 1,025 $ (8,758 ) $ — $ (38,163 ) Foreign currency translation adjustment (13,998 ) 8,387 — 8,387 — (5,611 ) Accumulated other comprehensive income (loss) $ (43,403 ) $ (1,396 ) $ 1,025 $ (371 ) $ — $ (43,774 ) December 31, 2018 Pension and other post-employment liability adjustment $ (38,163 ) $ 3,575 $ (930 ) $ 2,645 $ (4,761 ) $ (40,279 ) Interest rate swap derivative — (1,689 ) 439 (1,250 ) — (1,250 ) Foreign currency translation adjustment (5,611 ) (13,140 ) — (13,140 ) — (18,751 ) Foreign currency translation adjustment on long-term intercompany notes — (8,114 ) — (8,114 ) — (8,114 ) Accumulated other comprehensive income (loss) $ (43,774 ) $ (19,368 ) $ (491 ) $ (19,859 ) $ (4,761 ) $ (68,394 ) |
Schedule of Reclassifications Made From Accumulated Other Comprehensive Income (Loss) to the statement of Operations | The following reclassifications were made from accumulated other comprehensive income (loss) to the statements of operations (in thousands): December 31, 2018 2017 2016 Amortization of pension and other post-employment liability adjustments Prior service credits (1) $ 730 $ 1,485 $ 1,120 Actuarial losses (1) (917 ) (707 ) (244 ) Loss recognized during settlement (5,735 ) (2,162 ) — Total before tax (5,922 ) (1,384 ) 876 Tax (benefit) expense (1,502 ) (548 ) 312 Net of tax $ (4,420 ) $ (836 ) $ 564 (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 10 for additional information. |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic to Dilutive Average Common Shares | The following table sets forth the reconciliation from basic to dilutive average common shares (in thousands): Years ended December 31, 2018 2017 2016 Numerator: Net earnings attributable to Knoll, Inc. stockholders $ 73,248 $ 80,163 $ 82,084 Denominator: Denominator for basic earnings per shares - weighted-average shares 48,657 48,423 48,093 Effect of dilutive securities: Potentially dilutive shares resulting from stock plans 561 737 826 Denominator for diluted earnings per share - weighted-average shares 49,218 49,160 48,919 Antidilutive equity awards not included in weighted-average common shares—diluted 20 — — Net earnings per common share attributable to Knoll, Inc. stockholders: Basic $ 1.51 $ 1.66 $ 1.71 Diluted $ 1.49 $ 1.63 $ 1.68 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Tax Expense | Income before income tax expense consists of the following (in thousands): 2018 2017 2016 U.S. operations $ 67,240 $ 62,609 $ 107,803 Foreign operations 30,911 15,983 19,735 Total $ 98,151 $ 78,592 $ 127,538 |
Schedule of Income (Benefit) Tax Expense | Income tax expense (benefit) is comprised of the following (in thousands): 2018 2017 2016 Current: Federal $ 4,276 $ 11,712 $ 11,980 State 2,101 2,404 2,840 Foreign 13,673 3,918 4,588 Total current 20,050 18,034 19,408 Deferred: Federal 6,297 (20,595 ) 23,814 State 908 2,541 2,347 Foreign (2,359 ) (1,580 ) (145 ) Total deferred 4,846 (19,634 ) 26,016 Income tax expense (benefit) $ 24,896 $ (1,600 ) $ 45,424 |
Schedule of Tax Effects of Temporary Differences that Give Rise to the Deferred Tax Assets and Liabilities | The following table sets forth the tax effects of temporary differences that give rise to the deferred tax assets and liabilities (in thousands): December 31, December 31, Deferred tax assets Accounts receivable, principally due to allowance for doubtful accounts $ (32 ) $ 858 Inventories 5,939 5,939 Net operating loss carryforwards 6,898 7,460 Accrued pension 2,121 5,591 Stock-based compensation 3,722 2,972 Compensation-related accruals 696 3,063 Warranty 2,055 1,779 Obligation for post-employment benefits other than pension 935 1,312 Accrued liabilities and other items 8,350 3,886 Gross deferred tax assets 30,684 32,860 Valuation allowance (4,789 ) (4,789 ) Net deferred tax assets 25,895 28,071 Deferred tax liabilities: Intangibles (85,553 ) (58,701 ) Plant and equipment (26,839 ) (24,041 ) Gross deferred tax liabilities (112,392 ) (82,742 ) Net deferred tax liabilities $ (86,497 ) $ (54,671 ) |
Schedule of Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate | The following table sets forth a reconciliation of the statutory federal income tax rate to the effective income tax rate: 2018 2017 2016 Federal statutory tax rate 21.0 % 35.0 % 35.0 % Increase (decrease) in the tax rate resulting from: State taxes, net of federal effect 2.4 % 5.2 % 3.3 % Effect of tax rates of other countries 0.5 % (1.8 )% (1.4 )% Section 199 deduction — % (0.7 )% (0.8 )% Change in contingency reserve — % — % (0.2 )% Limitation on deduction of officer’s compensation 0.4 % 1.3 % 0.6 % Tax Act (3.2 )% (33.9 )% — % Valuation allowance release — % (3.3 )% — % Other 4.3 % (3.8 )% (0.9 )% Effective tax rate 25.4 % (2.0 )% 35.6 % |
Summarizes the Activity Related to the Entity's Unrecognized Tax Benefits | The following table summarizes the activity related to the Company's unrecognized tax benefits during 2018 , 2017 , and 2016 (in thousands): 2018 2017 2016 Balance, beginning of the year $ 875 $ 875 $ 4,407 Additions for tax position related to the current year 125 125 125 Additions for tax position related to the prior year — — 56 Decreases for tax position related to the prior year — — (250 ) Prior year reductions: Lapse of statute of limitations (125 ) (125 ) (125 ) Settlements — — (3,338 ) Balance, end of the year $ 875 $ 875 $ 875 |
OTHER INCOME, NET (Tables)
OTHER INCOME, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Components of Other Expense (income), Net | The components of other income, net are as follows (in thousands): Years Ended December 31, 2018 2017 2016 Foreign exchange losses (gains) $ (1,965 ) $ 1,781 $ 3,725 Net periodic benefit income (7,107 ) (9,594 ) (5,800 ) Other, net (532 ) 113 (360 ) Other income, net $ (9,604 ) $ (7,700 ) $ (2,435 ) |
QUARTERLY RESULTS (UNAUDITED) (
QUARTERLY RESULTS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Unaudited Consolidated Statements of Operations and Comprehensive Income Data | The following tables contain selected unaudited Consolidated Statements of Operations and Comprehensive Income data for each quarter for the years ended December 31, 2018 and 2017 . The operating results for any quarter are not necessarily indicative of results for any future period. The quarterly results are as follows (in thousands): First Second Third Fourth Fiscal 2018 Sales $ 296,559 $ 323,351 $ 327,737 $ 354,625 $ 1,302,272 Gross profit 107,711 119,287 122,794 131,732 481,524 Net earnings 15,267 13,123 20,323 24,542 73,255 (1) (2) (3) (6) Net earnings attributable to Knoll, Inc. stockholders 15,259 13,124 20,323 24,542 73,248 (1) (2) (3) (6) Earnings per share—Basic $ 0.31 $ 0.27 $ 0.42 $ 0.50 $ 1.51 (1) (2) (3) (6) Earnings per share—Diluted $ 0.31 $ 0.27 $ 0.41 $ 0.50 $ 1.49 (1) (2) (3) (6) 2017 Sales $ 256,820 $ 268,694 $ 291,256 $ 316,122 $ 1,132,892 Gross profit 95,674 99,958 106,610 112,337 414,579 — Net earnings 15,396 12,960 19,161 32,679 80,192 (4) (5) (6) Net earnings attributable to Knoll, Inc. stockholders 15,404 12,938 19,132 32,693 80,163 (4) (5) (6) Earnings per share—Basic $ 0.32 $ 0.27 $ 0.39 $ 0.67 $ 1.66 (4) (5) (6) Earnings per share—Diluted $ 0.31 $ 0.26 $ 0.39 $ 0.67 $ 1.63 (4) (5) (6) _______________________________________________________________________________ (1) During the second, third and fourth quarters of 2018, the Company recorded pension settlement charges of $4.6 million , $0.6 million and $0.5 million , respectively. (2) During the first, second, third and fourth quarters of 2018, the Company recorded restructuring charges of $0.5 million , $0.8 million , $1.2 million and $0.1 million , respectively within the Office segment related to an organizational realignment that will result in greater operating efficiency and control. (3) During the first, second, third and fourth quarters of 2018, the Company recorded acquisition costs of $1.0 million , $0.5 million , $0.2 million and $0.2 million , respectively related to the acquisition of Muuto. (4) During the fourth quarter of 2017, the Company recorded pension settlement charges of $2.2 million and a $16.3 million write-off of property, plant, and equipment. (5) During the second quarter of 2017, Knoll recorded restructuring charges of $2.2 million related to headcount rationalization and modernization of equipment in the Office Segment. (6) The fourth quarters of 2017 and 2018 results include the impact of the Tax Cuts and Jobs Act and SAB 118 of $26.6 million and $1.7 million , respectively. |
SEGMENT AND GEOGRAPHIC REGION_2
SEGMENT AND GEOGRAPHIC REGION INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The tables below present the Company’s segment information (in thousands): 2018 2017 2016 SALES Office $ 782,020 $ 722,984 $ 768,873 Lifestyle 520,252 409,908 395,419 Corporate — — — Knoll, Inc. $ 1,302,272 $ 1,132,892 $ 1,164,292 INTERSEGMENT SALES (1) Office $ 1,644 $ 1,331 $ 1,877 Lifestyle 10,769 10,941 14,138 Corporate — — — Knoll, Inc. $ 12,413 $ 12,272 $ 16,015 DEPRECIATION AND AMORTIZATION (2) Office $ 19,760 $ 18,334 $ 14,967 Lifestyle 14,046 6,828 5,565 Corporate 595 887 653 Knoll, Inc. $ 34,401 $ 26,049 $ 21,185 OPERATING PROFIT Office (3) $ 50,382 $ 28,233 $ 72,134 Lifestyle (4) 89,097 76,406 80,597 Corporate (4) (24,286 ) (24,102 ) (22,223 ) Knoll, Inc. (5) $ 115,193 $ 80,537 $ 130,508 CAPITAL EXPENDITURES Office $ 31,978 $ 32,515 $ 34,065 Lifestyle 8,982 6,700 7,149 Corporate 879 462 1,481 Knoll, Inc. $ 41,839 $ 39,677 $ 42,695 _______________________________________________________________________________ (1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities. (2) Excludes amortization of deferred financing fees. (3) Within the Office segment, Knoll recorded a $16.3 million write-off of property, plant, and equipment during 2017; a $5.7 million and $2.2 million pension settlement charge during 2018 and 2017, respectively; and a $2.6 million and $2.2 million restructuring charge during 2018 and 2017, respectively. (4) Knoll recorded acquisition costs of $0.6 million and $1.3 million related to the acquisition of Muuto within the Lifestyle segment and Corporate, respectively, during 2018. (5) The Company does not allocate interest expense or other (income) expense, net to the reportable segments. |
Schedule of Information About the Geographical Areas in Which the Company Operates | The table below contains information about the geographical areas in which the Company operates. Sales are attributed to the geographic areas based on the origin of sale, and property, plant, and equipment, net is based on the geographic area in which the asset resides (in thousands): United Canada Europe Mexico Consolidated 2018 Sales $ 1,066,810 $ 37,299 $ 197,401 $ 762 $ 1,302,272 Property, plant, and equipment, net 172,653 26,876 15,424 — 214,953 2017 Sales $ 977,669 $ 52,894 $ 100,233 $ 2,096 $ 1,132,892 Property, plant, and equipment, net 157,805 29,307 13,518 — 200,630 2016 Sales $ 1,031,920 $ 36,813 $ 93,420 $ 2,139 $ 1,164,292 Property, plant, and equipment, net 157,856 26,452 12,776 — 197,084 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Jan. 01, 2018 | Dec. 31, 2015 | |
Principles of Consolidation | ||||||||
Lag period for including results of European subsidiaries in consolidated financial statements | 1 month | |||||||
Cash and Cash Equivalents | ||||||||
Maximum term of original maturity to classify instruments as cash and cash equivalents | 3 months | |||||||
Research and Development Costs | ||||||||
Research and development expenses | $ 20,100 | $ 19,200 | $ 21,700 | |||||
Income Taxes | ||||||||
Estimated benefit as a result of the new legislation | $ 1,700 | $ 26,600 | 1,700 | |||||
New Accounting Pronouncements | ||||||||
Selling, general, and administrative expenses | (363,717) | (315,586) | (315,468) | |||||
Accumulated other comprehensive income | 68,394 | 43,774 | 68,394 | 43,774 | 43,403 | $ 37,318 | ||
Retained earnings | $ 395,434 | 347,304 | $ 395,434 | 347,304 | ||||
ASU 2018-02 | ||||||||
New Accounting Pronouncements | ||||||||
Accumulated other comprehensive income | $ (4,800) | |||||||
Retained earnings | $ 4,800 | 4,800 | ||||||
ASU 2017-07 | ||||||||
New Accounting Pronouncements | ||||||||
Selling, general, and administrative expenses | 9,600 | 5,800 | ||||||
Other Income, net | $ 9,600 | $ 5,800 | ||||||
Buildings | Minimum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 45 years | |||||||
Buildings | Maximum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 60 years | |||||||
Building improvements | Minimum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 10 years | |||||||
Building improvements | Maximum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 20 years | |||||||
Office equipment | Minimum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 3 years | |||||||
Office equipment | Maximum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 10 years | |||||||
Software | Minimum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 4 years | |||||||
Software | Maximum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 12 years | |||||||
Machinery and equipment | Minimum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 3 years | |||||||
Machinery and equipment | Maximum | ||||||||
Property, Plant, Equipment and Depreciation | ||||||||
Useful life | 10 years | |||||||
Scenario, Forecast | ASU 2016-02 | ||||||||
New Accounting Pronouncements | ||||||||
Net lease liabilities | $ 133,000 | |||||||
Lease, right-of-use asset | $ 120,000 |
REVENUE - Net Sales by Product
REVENUE - Net Sales by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from External Customer [Line Items] | |||||||||||
Net sales | $ 354,625 | $ 327,737 | $ 323,351 | $ 296,559 | $ 316,122 | $ 291,256 | $ 268,694 | $ 256,820 | $ 1,302,272 | $ 1,132,892 | $ 1,164,292 |
Office Segment | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 782,020 | 722,984 | 768,873 | ||||||||
Office Segment | Office Systems | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 435,135 | 422,681 | 488,751 | ||||||||
Office Segment | Seating | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 128,855 | 118,454 | 124,732 | ||||||||
Office Segment | Files and Storage | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 91,537 | 90,362 | 85,696 | ||||||||
Office Segment | Ancillary | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 92,372 | 59,487 | 38,150 | ||||||||
Office Segment | Other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 34,121 | 32,000 | 31,544 | ||||||||
Lifestyle Segment | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 520,252 | 409,908 | 395,419 | ||||||||
Lifestyle Segment | Studio | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | 410,239 | 300,948 | 285,885 | ||||||||
Lifestyle Segment | Coverings | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Net sales | $ 110,013 | $ 108,960 | $ 109,534 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liability related to customer deposits | $ 37.7 | $ 30.5 |
Revenue recognized that was included in contract liability | $ 30.5 | $ 1.5 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) | Jan. 25, 2018 | Dec. 01, 2016 | Sep. 09, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||||
Purchase price for acquisition | $ 307,983,000 | $ 0 | $ 18,456,000 | |||
Holly Hunt | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 8,500,000 | |||||
DatesWeiser | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 11,000,000 | |||||
DatesWeiser | Fair Value, Measurements, Recurring | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of contingent purchase price payment (up to) | $ 4,000,000 | 750,000 | $ 1,100,000 | |||
Muuto Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 315,313,000 | |||||
Percentage of voting interests acquired | 100.00% | |||||
Purchase price for acquisition | $ 307,700,000 | |||||
Cash acquired from acquisition | $ 7,600,000 | |||||
Selling, general, and administrative expenses | Muuto Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition costs | $ 5,100,000 |
ACQUISITIONS - Summary of Sales
ACQUISITIONS - Summary of Sales and Net Loss (Details) - Muuto Acquisition $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Sales | $ 85,575 |
Net Income (loss) attributable to Knoll, Inc. stockholders | $ (1,305) |
ACQUISITIONS - Schedule of Asse
ACQUISITIONS - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jan. 25, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 320,759 | $ 142,113 | $ 141,391 | |
Muuto Acquisition | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 7,605 | |||
Customer receivables | 8,617 | |||
Inventory | 11,085 | |||
Other current assets | 453 | |||
Property, plant, and equipment, net | 1,266 | |||
Intangible assets | 135,600 | |||
Other non-current assets | 296 | |||
Total assets acquired | 164,922 | |||
Accounts payable | 3,418 | |||
Other current liabilities | 10,591 | |||
Deferred income taxes | 29,919 | |||
Total liabilities assumed | 43,928 | |||
Net assets acquired | 120,994 | |||
Purchase price | 315,313 | |||
Goodwill | $ 194,319 |
ACQUISITIONS - Summary of Estim
ACQUISITIONS - Summary of Estimated Fair Value of Identifiable Intangible Assets and Their Useful Lives (Details) - Muuto Acquisition $ in Thousands | Jan. 25, 2018USD ($) |
Finite-lived intangible assets: | |
Finite-lived intangible assets | $ 135,600 |
Wholesale customer relationships | |
Finite-lived intangible assets: | |
Finite-lived intangible assets | $ 35,800 |
Estimated Useful Life (in years) | 15 years |
Contract customer relationships | |
Finite-lived intangible assets: | |
Finite-lived intangible assets | $ 25,000 |
Estimated Useful Life (in years) | 9 years |
Copyrights & designs | |
Finite-lived intangible assets: | |
Finite-lived intangible assets | $ 7,500 |
Estimated Useful Life (in years) | 7 years |
Non-competition agreements | |
Finite-lived intangible assets: | |
Finite-lived intangible assets | $ 1,300 |
Estimated Useful Life (in years) | 3 years |
Trade name | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Indefinite-lived intangible assets | $ 66,000 |
ACQUISITIONS - Pro Forma (Detai
ACQUISITIONS - Pro Forma (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Loss on extinguishment of debt | $ 1,445 | $ 0 | $ 0 |
Acquisition related inventory valuation | 820,748 | 718,313 | 718,316 |
Interest expense | 20,911 | 7,483 | 5,405 |
Amortization of intangibles | 8,900 | 3,300 | 3,300 |
Income tax impact | 24,896 | (1,600) | $ 45,424 |
Muuto Acquisition | |||
Business Acquisition [Line Items] | |||
Pro forma sales | 1,306,420 | 1,203,158 | |
Pro forma net earnings attributable to Knoll, Inc. stockholders | 78,964 | 77,892 | |
Interest expense | 100 | 1,700 | |
Amortization of intangibles | 800 | 6,600 | |
Income tax impact | 1,300 | 4,600 | |
Muuto Acquisition | Acquisition-related Costs | |||
Business Acquisition [Line Items] | |||
Compensation for post combination services | 3,200 | 3,500 | |
Loss on extinguishment of debt | 1,400 | 1,200 | |
Acquisition costs | 1,900 | ||
Muuto Acquisition | Fair Value Adjustment to Inventory | |||
Business Acquisition [Line Items] | |||
Acquisition related inventory valuation | $ 900 | $ 900 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 65,185 | $ 58,725 |
Work-in-process | 8,282 | 6,943 |
Finished goods | 97,082 | 79,277 |
Inventories, net | $ 170,549 | $ 144,945 |
PROPERTY, PLANT, AND EQUIPMEN_3
PROPERTY, PLANT, AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | $ 469,940 | $ 493,334 | $ 469,940 | |
Accumulated depreciation | (269,310) | (278,381) | (269,310) | |
Property, plant, and equipment, net | 200,630 | 214,953 | 200,630 | $ 197,084 |
Interest costs capitalized | 800 | 800 | 700 | |
Write-off of property, plant, and equipment | 16,300 | 0 | 16,306 | $ 0 |
Land | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | 12,489 | 11,985 | 12,489 | |
Leasehold improvements | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | 54,995 | 59,604 | 54,995 | |
Buildings | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | 67,465 | 68,852 | 67,465 | |
Office equipment | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | 18,193 | 19,533 | 18,193 | |
Software | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | 40,378 | 43,436 | 40,378 | |
Machinery and equipment | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | 243,939 | 237,194 | 243,939 | |
Construction-in-progress | ||||
PROPERTY, PLANT, AND EQUIPMENT | ||||
Property, plant and equipment | $ 32,481 | $ 52,730 | $ 32,481 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-lived intangible assets: | |||
Accumulated Amortization | $ (30,435,000) | $ (21,604,000) | |
Gross Amount, Total | 384,381,000 | 260,185,000 | |
Total Intangible assets | |||
Intangible Assets, Net (Excluding Goodwill) | 353,946,000 | 238,581,000 | |
Goodwill, impairment | 0 | 0 | $ 0 |
Amortization expense | 8,900,000 | 3,300,000 | 3,300,000 |
Estimated Amortization | |||
2,019 | 8,605,000 | ||
2,020 | 8,466,000 | ||
2,021 | 7,960,000 | ||
2,022 | 7,635,000 | ||
2,023 | 7,564,000 | ||
Changes in the carrying amount of goodwill | |||
Balance as of Beginning of Period | 142,113,000 | 141,391,000 | |
Foreign currency translation adjustment | (15,948,000) | 519,000 | |
Purchase accounting adjustment | 203,000 | ||
Goodwill acquired | 194,594,000 | ||
Balance as of End of Period | 320,759,000 | 142,113,000 | 141,391,000 |
Office Segment | |||
Changes in the carrying amount of goodwill | |||
Balance as of Beginning of Period | 36,220,000 | 35,701,000 | |
Foreign currency translation adjustment | (597,000) | 519,000 | |
Purchase accounting adjustment | 0 | ||
Goodwill acquired | 0 | ||
Balance as of End of Period | 35,623,000 | 36,220,000 | 35,701,000 |
Lifestyle Segment | |||
Changes in the carrying amount of goodwill | |||
Balance as of Beginning of Period | 105,893,000 | 105,690,000 | |
Foreign currency translation adjustment | (15,351,000) | 0 | |
Purchase accounting adjustment | 203,000 | ||
Goodwill acquired | 194,594,000 | ||
Balance as of End of Period | 285,136,000 | 105,893,000 | $ 105,690,000 |
Customer relationships | |||
Finite-lived intangible assets: | |||
Gross Amount | 78,382,000 | 22,497,000 | |
Accumulated Amortization | (18,418,000) | (11,575,000) | |
Net Amount | 59,964,000 | 10,922,000 | |
Copyrights & designs | |||
Finite-lived intangible assets: | |||
Gross Amount | 6,960,000 | 0 | |
Accumulated Amortization | (999,000) | 0 | |
Net Amount | 5,961,000 | 0 | |
Various | |||
Finite-lived intangible assets: | |||
Gross Amount | 13,510,000 | 12,088,000 | |
Accumulated Amortization | (11,018,000) | (10,029,000) | |
Net Amount | 2,492,000 | 2,059,000 | |
Tradenames | |||
Indefinite-lived intangible assets: | |||
Indefinite-lived intangible assets: | $ 285,529,000 | $ 225,600,000 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Accrued employee compensation | $ 40,568 | $ 41,144 |
Customer deposits | 37,716 | 30,484 |
Warranty | 9,623 | 9,174 |
Other | 40,938 | 23,356 |
Other current liabilities | $ 128,845 | $ 104,158 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Unamortized portion of cash abatements | $ 6,000 | $ 5,900 | |
Rent expense | 32,100 | $ 28,900 | $ 29,800 |
Future minimum rental payments required under operating leases | |||
2,019 | 26,427 | ||
2,020 | 23,805 | ||
2,021 | 19,135 | ||
2,022 | 17,224 | ||
2,023 | 15,063 | ||
Subsequent years | 38,778 | ||
Total minimum lease payments | $ 140,432 |
PENSION AND OTHER POST-EMPLOY_3
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)plan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Number of plans covering nonunion employees | plan | 1 | ||
(Decrease) (Increase) in basis point drop in discount rate | (0.70%) | 0.50% | |
Fair value of plan assets | $ 233,930 | $ 273,895 | |
Excess of PBO/ABO plan assets | 4,245 | 0 | |
Pension expense | 3,900 | 5,500 | $ 9,800 |
Foreign Defined Contribution Plans | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Pension expense | $ 1,700 | 1,000 | 1,000 |
Equity investment funds | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Target plan asset allocations (percent) | 35.00% | ||
Fixed income funds | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Target plan asset allocations (percent) | 65.00% | ||
Union Pension Plan | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Discretionary employer contribution | $ 7,900 | 0 | 9,000 |
Fair value of plan assets | 50,600 | ||
Projected benefit obligation | 46,400 | ||
Accumulated benefit obligation | 46,400 | ||
Nonunion Pension Plan | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Discretionary employer contribution | 0 | 0 | 43,000 |
Fair value of plan assets | 183,300 | ||
Projected benefit obligation | 197,200 | ||
Accumulated benefit obligation | $ 197,200 | ||
Pension Benefits | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Number of plans | plan | 2 | ||
Fair value of plan assets | $ 233,930 | 273,895 | 263,027 |
Excess of PBO/ABO plan assets | 4,245 | 0 | |
Excess of PBO/ABO plan liabilities | $ 13,930 | 21,671 | |
Other Benefits | |||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | |||
Number of plans | plan | 2 | ||
Fair value of plan assets | $ 0 | 0 | $ 0 |
Excess of PBO/ABO plan assets | 0 | 0 | |
Excess of PBO/ABO plan liabilities | 3,301 | $ 3,575 | |
Estimated future employer contributions | $ 300 |
PENSION AND OTHER POST-EMPLOY_4
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Reconciliation of Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of the period | $ 273,895 | ||
Fair value of plan assets at the end of period | 233,930 | $ 273,895 | |
Pension Benefits | |||
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of the period | 295,566 | 280,193 | |
Expected administrative expenses | 940 | 700 | $ 1,870 |
Interest cost | 10,160 | 9,455 | 9,662 |
Plan amendments | 0 | 0 | |
Participant contributions | 0 | 0 | |
Actuarial (gain) loss | (26,385) | 27,925 | |
Benefits paid | (7,095) | (7,617) | |
Benefits paid related to settlement | (29,480) | (11,969) | |
Loss (gain) related to settlement | 893 | (472) | |
Administrative expenses paid | (984) | (2,649) | |
Projected benefit obligation at end of the period | 243,615 | 295,566 | 280,193 |
Accumulated benefit obligation at end of the period | 243,615 | 295,566 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of the period | 273,895 | 263,027 | |
Actual return on plan assets | (10,306) | 33,103 | |
Employer contributions | 7,900 | 0 | |
Participant contributions | 0 | 0 | |
Actual expenses paid | (984) | (2,649) | |
Benefits paid | (7,095) | (7,617) | |
Benefits paid related to settlement | (29,480) | (11,969) | |
Fair value of plan assets at the end of period | 233,930 | 273,895 | 263,027 |
Funded status | (9,685) | (21,671) | |
Other Benefits | |||
Change in projected benefit obligation: | |||
Projected benefit obligation at beginning of the period | 3,806 | 5,736 | |
Expected administrative expenses | 0 | 0 | 0 |
Interest cost | 120 | 173 | 196 |
Plan amendments | 0 | (1,317) | |
Participant contributions | 209 | 206 | |
Actuarial (gain) loss | (43) | (284) | |
Benefits paid | (490) | (708) | |
Benefits paid related to settlement | 0 | 0 | |
Loss (gain) related to settlement | 0 | 0 | |
Administrative expenses paid | 0 | 0 | |
Projected benefit obligation at end of the period | 3,602 | 3,806 | 5,736 |
Accumulated benefit obligation at end of the period | 0 | 0 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of the period | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 281 | 502 | |
Participant contributions | 209 | 206 | |
Actual expenses paid | 0 | 0 | |
Benefits paid | (490) | (708) | |
Benefits paid related to settlement | 0 | 0 | |
Fair value of plan assets at the end of period | 0 | 0 | $ 0 |
Funded status | $ (3,602) | $ (3,806) |
PENSION AND OTHER POST-EMPLOY_5
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Assumptions Used in Computing Benefit Obligation and Benefit Cost (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefits | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Expected return on plan assets | 7.10% | 7.10% | 7.10% |
Pension Benefits | Minimum | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.37% | 3.70% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.70% | 3.80% | 4.55% |
Expected return on plan assets | 4.60% | ||
Pension Benefits | Maximum | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.46% | 3.77% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.77% | 4.25% | 4.65% |
Expected return on plan assets | 7.10% | ||
Other Benefits | Minimum | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 3.30% | 2.48% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 2.48% | 2.35% | 2.30% |
Other Benefits | Maximum | |||
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Discount rate | 4.32% | 3.66% | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Discount rate | 3.66% | 4.20% | 4.51% |
PENSION AND OTHER POST-EMPLOY_6
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Fair Value of Pension Plan Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | $ 233,930 | $ 273,895 |
U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 54,484 | 75,944 |
Non-U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 28,036 | 37,042 |
Fixed income funds and cash investment funds | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 151,410 | 160,909 |
Level 1 | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 121,663 | 123,867 |
Level 1 | U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 0 | 0 |
Level 1 | Non-U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 0 | 0 |
Level 1 | Fixed income funds and cash investment funds | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 121,663 | 123,867 |
Level 2 | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 112,267 | 150,028 |
Level 2 | U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 54,484 | 75,944 |
Level 2 | Non-U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 28,036 | 37,042 |
Level 2 | Fixed income funds and cash investment funds | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 29,747 | 37,042 |
Level 3 | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 0 | 0 |
Level 3 | U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 0 | 0 |
Level 3 | Non-U.S. equity securities | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | 0 | 0 |
Level 3 | Fixed income funds and cash investment funds | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Fair value of pension plan investments | $ 0 | $ 0 |
PENSION AND OTHER POST-EMPLOY_7
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Balance Sheet Components (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Amounts recognized in the consolidated balance sheets consist of: | ||
Noncurrent assets | $ 4,245 | $ 0 |
Pension Benefits | ||
Amounts recognized in the consolidated balance sheets consist of: | ||
Noncurrent assets | 4,245 | 0 |
Current liabilities | 0 | 0 |
Noncurrent liabilities | (13,930) | (21,671) |
Net amount recognized | (9,685) | (21,671) |
Amounts recognized in accumulated other comprehensive income (loss) before taxes: | ||
Net actuarial loss | 55,923 | 60,256 |
Prior service (credit) | 0 | 0 |
Net amount recognized | 55,923 | 60,256 |
Other Benefits | ||
Amounts recognized in the consolidated balance sheets consist of: | ||
Noncurrent assets | 0 | 0 |
Current liabilities | (301) | (231) |
Noncurrent liabilities | (3,301) | (3,575) |
Net amount recognized | (3,602) | (3,806) |
Amounts recognized in accumulated other comprehensive income (loss) before taxes: | ||
Net actuarial loss | 1,043 | 1,015 |
Prior service (credit) | (2,580) | (3,310) |
Net amount recognized | $ (1,537) | $ (2,295) |
PENSION AND OTHER POST-EMPLOY_8
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Schedule of Other Changes to Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial loss (gain) | $ 2,390 | $ 12,794 |
Prior service (credit) | 0 | 0 |
Amortization of: | ||
Prior service credit | 0 | 0 |
Actuarial (loss) gain | (988) | (704) |
Loss recognized related to settlement | (5,735) | (2,162) |
Total recognized in OCI | (4,333) | 9,928 |
Other Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial loss (gain) | (43) | (227) |
Prior service (credit) | 0 | (1,400) |
Amortization of: | ||
Prior service credit | 730 | 1,485 |
Actuarial (loss) gain | 71 | (3) |
Loss recognized related to settlement | 0 | 0 |
Total recognized in OCI | $ 758 | $ (145) |
PENSION AND OTHER POST-EMPLOY_9
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Components of Net Periodic Benefit Cost (Income) Pension and OBEB Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of the net periodic benefit cost | |||||||
Settlement related expense | $ 500 | $ 600 | $ 4,600 | $ 2,200 | |||
Net periodic benefit cost | $ (7,107) | $ (9,594) | $ (5,800) | ||||
Pension Benefits | |||||||
Components of the net periodic benefit cost | |||||||
Expected administrative expenses | 940 | 700 | 1,870 | ||||
Interest cost | 10,160 | 9,455 | 9,662 | ||||
Expected return on plan assets | (17,574) | (18,444) | (14,782) | ||||
Amortization of prior service cost | 0 | 0 | 0 | ||||
Recognized actuarial loss | 988 | 704 | 492 | ||||
Settlement related expense | 5,735 | 2,162 | 0 | ||||
Net periodic benefit cost | 249 | (5,423) | (2,758) | ||||
Other Benefits | |||||||
Components of the net periodic benefit cost | |||||||
Expected administrative expenses | 0 | 0 | 0 | ||||
Interest cost | 120 | 173 | 196 | ||||
Expected return on plan assets | 0 | 0 | 0 | ||||
Amortization of prior service cost | (730) | (1,485) | (1,120) | ||||
Recognized actuarial loss | (71) | 3 | (248) | ||||
Settlement related expense | 0 | 0 | 0 | ||||
Net periodic benefit cost | $ (681) | $ (1,309) | $ (1,172) |
PENSION AND OTHER POST-EMPLO_10
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Healthcare Rate Trends (Details) | Dec. 31, 2018 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Benefit obligation, healthcare cost trend rate Assumed, Next Fiscal Year | 6.50% |
Benefit obligation, healthcare cost trend rate | 4.50% |
Net periodic benefit cost, healthcare cost trend rate | 4.50% |
Prescription drug cost trend rate assumed, next fiscal year | 9.00% |
Benefit obligation, prescription drug cost ultimate trend rate | 4.50% |
Net periodic benefit cost, prescription drug cost trend rate assumed, next fiscal year | 10.10% |
Net periodic benefit cost, prescription drug cost ultimate trend rate | 4.50% |
Minimum | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Net periodic benefit cost, health care cost trend rate assumed, next fiscal year | 5.60% |
Maximum | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Net periodic benefit cost, health care cost trend rate assumed, next fiscal year | 7.20% |
PENSION AND OTHER POST-EMPLO_11
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Weighted-Average Asset Allocations (Details) - Pension Benefits | Dec. 31, 2018 | Dec. 31, 2017 |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Plan asset allocation | 100.00% | 100.00% |
Temporary investment funds | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Plan asset allocation | 3.00% | 1.00% |
Equity investment funds | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Plan asset allocation | 35.00% | 41.00% |
Fixed income funds | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Plan asset allocation | 62.00% | 58.00% |
PENSION AND OTHER POST-EMPLO_12
PENSION AND OTHER POST-EMPLOYMENT BENEFITS - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Pension Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,019 | $ 16,919 |
2,020 | 17,246 |
2,021 | 17,330 |
2,022 | 17,366 |
2,023 | 17,031 |
2024-2027 | 79,360 |
Other Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2,019 | 301 |
2,020 | 254 |
2,021 | 263 |
2,022 | 262 |
2,023 | 263 |
2024-2027 | $ 1,235 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 01, 2016USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Reduction to fair value of contingent consideration liability | $ 350,000 | $ 0 | $ 0 | |
DatesWeiser | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent purchase price payment | $ 1,100,000 | |||
Reduction to fair value of contingent consideration liability | 400,000 | |||
DatesWeiser | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent purchase price payment | 750,000 | 1,100,000 | $ 4,000,000 | |
DatesWeiser | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent purchase price payment | 0 | 0 | ||
DatesWeiser | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent purchase price payment | 0 | 0 | ||
DatesWeiser | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of contingent purchase price payment | 750,000 | 1,100,000 | ||
DatesWeiser | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Maximum amount of possible future contingent payments under the agreement | $ 4,000,000 | |||
DatesWeiser | Discount Rate | Maximum | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Discount rate used in fair value estimation | 0.10 | |||
Interest Rate Swap | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap | $ 1,689,000 | 0 | ||
Interest Rate Swap | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap | 0 | 0 | ||
Interest Rate Swap | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap | 1,689,000 | 0 | ||
Interest Rate Swap | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swap | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Expected to reclassify in the next twelve months from other comprehensive income into earning | $ 300,000 | |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative liability, Fair Value | 1,689,000 | $ 0 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Aggregate notional amount | 300,000,000 | |
Decrease in notional amount over time | $ 50,000,000 | |
Contract fixed interest rate | 2.63% | |
Interest Rate Swap | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative liability, Fair Value | $ 0 | |
Interest Rate Swap | Designated as Hedging Instrument | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability, Fair Value | $ 255,000 | |
Interest Rate Swap | Designated as Hedging Instrument | Other noncurrent liabilities | ||
Derivative [Line Items] | ||
Derivative liability, Fair Value | 1,434,000 | |
Interest Rate Swap | Through December 2019 | ||
Derivative [Line Items] | ||
Aggregate notional amount | 300,000,000 | |
Interest Rate Swap | January 2020 - December 2020 | ||
Derivative [Line Items] | ||
Aggregate notional amount | 250,000,000 | |
Interest Rate Swap | January 2021 - December 2021 | ||
Derivative [Line Items] | ||
Aggregate notional amount | 200,000,000 | |
Interest Rate Swap | January 2022 - December 2022 | ||
Derivative [Line Items] | ||
Aggregate notional amount | 150,000,000 | |
Interest Rate Swap | January 2023 | ||
Derivative [Line Items] | ||
Aggregate notional amount | $ 100,000,000 |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) | Jan. 23, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 23, 2018EUR (€) |
Long-term debt | |||||
Total long-term debt | $ 465,302,000 | $ 192,000,000 | |||
Less: Current maturities of long-term debt | 17,185,000 | 10,000,000 | |||
Less: Deferred financing fees, net | 4,219,000 | 952,000 | |||
Long-term debt | $ 443,898,000 | $ 181,048,000 | |||
Interest rate | 3.60% | 2.40% | |||
Borrowings under revolving credit facility | $ 490,500,000 | $ 310,000,000 | $ 377,500,000 | ||
Amortization expense related to the deferred financing fees | 1,100,000 | 700,000 | $ 700,000 | ||
Write off of debt issuance cost | 400,000 | ||||
Write-off of third party fees related to debt extinguishment | 1,000,000 | ||||
Balance of revolving credit facility | |||||
Long-term debt | |||||
Total long-term debt | 134,500,000 | 27,000,000 | |||
Term loan | |||||
Long-term debt | |||||
Total long-term debt | 330,802,000 | 165,000,000 | |||
Credit Agreement | Revolving Credit Facility | |||||
Long-term debt | |||||
Capacity | 400,000,000 | 300,000,000 | |||
Borrowed | 134,500,000 | 27,000,000 | |||
Letter of Credit | 5,167,000 | 5,367,000 | |||
Unused capacity | 260,333,000 | $ 267,633,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.62% | ||||
Credit Agreement | Revolving Credit Facility | Base Rate | |||||
Long-term debt | |||||
Borrowings under revolving credit facility | $ 2,500,000 | ||||
Basis spread on variable rate (as a percent) | 6.25% | ||||
Credit Agreement | Revolving Credit Facility | LIBOR | |||||
Long-term debt | |||||
Borrowings under revolving credit facility | $ 132,000,000 | ||||
Basis spread on variable rate (as a percent) | 4.25% | ||||
Credit Agreement | Letter of Credit | |||||
Long-term debt | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% | 1.25% | |||
Amended Credit Agreement | |||||
Long-term debt | |||||
Capacity | $ 750,000,000 | ||||
Credit facility maturity term | 5 years | ||||
Borrowing capacity available increase | $ 250,000,000 | ||||
Available increase, percent of EBITDA | 90.00% | 90.00% | |||
Amended Credit Agreement | Federal Funds Rate | |||||
Long-term debt | |||||
Basis spread on variable rate (as a percent) | 0.50% | ||||
Amended Credit Agreement | Eurocurrency Rate | |||||
Long-term debt | |||||
Basis spread on variable rate (as a percent) | 1.00% | ||||
Amended Credit Agreement | Term loan | |||||
Long-term debt | |||||
Debt face amount | $ 250,000,000 | ||||
Quarterly payments, percent of annum | 5.00% | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.27% | 2.82% | |||
Amended Credit Agreement | Revolving Credit Facility | |||||
Long-term debt | |||||
Capacity | $ 400,000,000 | ||||
Amended Credit Agreement | Multicurrency Term Loan | |||||
Long-term debt | |||||
Debt face amount | € | € 81,700,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 1.75% |
INDEBTEDNESS Schedule of Aggreg
INDEBTEDNESS Schedule of Aggregate Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2,019 | $ 17,185 | |
2,020 | 17,184 | |
2,021 | 17,184 | |
2,022 | 17,184 | |
2,023 | 396,565 | |
Thereafter | 0 | |
Total | $ 465,302 | $ 192,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)employee | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Concentration Risk [Line Items] | |||
Total number of employees | employee | 3,541 | ||
Changes in warranty reserve | |||
Balance, beginning of the year | $ 9,174 | $ 8,906 | $ 8,513 |
Provision for warranty claims | 7,726 | 7,099 | 6,792 |
Warranty claims incurred | (7,898) | (6,735) | (6,272) |
Warranties acquired through business acquisition | 611 | 0 | 0 |
Foreign currency translation adjustment | 10 | (96) | (127) |
Balance, end of the year | $ 9,623 | $ 9,174 | $ 8,906 |
Carpenters Union Local 1615 | |||
Concentration Risk [Line Items] | |||
Total number of hourly employees covered in an agreement | employee | 187 | ||
Percent of employee covered in agreement | 5.30% | ||
Italy Unions | |||
Concentration Risk [Line Items] | |||
Total number of employees | employee | 104 | ||
Percent of employee covered in agreement | 2.90% | ||
Unionized Employees Concentration Risk | Workforce Subject to Collective Bargaining Arrangements | |||
Concentration Risk [Line Items] | |||
Percentage of employees represented by unions | 8.20% |
STOCK PLANS - Narrative (Detail
STOCK PLANS - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($)planshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock incentive plans | plan | 3 | ||
Stock-based compensation, pre-tax | $ 9,200,000 | $ 9,600,000 | $ 10,500,000 |
Stock-based compensation, after-tax | 6,900,000 | 6,100,000 | 6,800,000 |
Compensation cost related to non-vested awards not yet recognized | 11,800,000 | ||
Compensation cost related to nonvested stock options not yet recognized (less than) | $ 100,000 | ||
Weighted average remaining period over which cost to be recognized | 1 year 6 months 18 days | ||
Restricted Stock And Restricted Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award restriction period | 3 years | ||
Restricted Stock And Restricted Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award restriction period | 4 years | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of options vested (less than) | $ 100,000 | 100,000 | 100,000 |
Intrinsic value, stock options exercised | $ 0 | 200,000 | 1,600,000 |
Options exercised (in shares) | shares | 0 | ||
Options granted, weighted average grant date fair value | $ 100,000 | 0 | 0 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of options vested (less than) | 7,400,000 | 9,500,000 | 4,900,000 |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total fair value of options vested (less than) | $ 1,400,000 | $ 9,900,000 | $ 0 |
STOCK PLANS - Shares Authorized
STOCK PLANS - Shares Authorized Under Incentive Plans (Details) | Dec. 31, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for issuance (in shares) | 2,570,358 |
2010 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 2,000,000 |
Shares available for issuance (in shares) | 56,959 |
2013 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 2,000,000 |
Shares available for issuance (in shares) | 513,399 |
2018 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 2,000,000 |
Shares available for issuance (in shares) | 2,000,000 |
STOCK PLANS - Restricted Shares
STOCK PLANS - Restricted Shares and Restricted Stock Unit Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock and Restricted Stock Units | |||
Outstanding at beginning of year (in shares) | 841,610 | ||
Expired (in shares) | 0 | ||
Outstanding at end of year (in shares) | 725,252 | 841,610 | |
Restricted Stock And Restricted Stock Units | |||
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 511,785 | 548,301 | 586,141 |
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 13.87 | $ 10.63 | $ 12.03 |
Restricted Stock And Restricted Stock Units | Cliff - Subject to service conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 3 years | 3 years | |
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 223,988 | 277,250 | 283,000 |
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 21.21 | $ 22.80 | $ 18.69 |
Restricted Stock And Restricted Stock Units | Cliff - Subject to service conditions | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 3 years | ||
Restricted Stock And Restricted Stock Units | Cliff - Subject to service conditions | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 4 years | ||
Restricted Stock And Restricted Stock Units | Graded - Subject to service conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 3 years | 3 years | 3 years |
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 37,788 | 24,488 | 30,632 |
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 19.89 | $ 22.87 | $ 18.28 |
Restricted Stock And Restricted Stock Units | Cliff - Subject to service and performance conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 3 years | 3 years | 3 years |
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 147,938 | 163,509 | |
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 22.77 | $ 18.81 | |
Restricted Stock And Restricted Stock Units | Cliff - Subject to service and market conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting Period | 3 years | 3 years | 3 years |
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 98,625 | 109,000 | |
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 10.63 | $ 12.03 | |
Restricted Stock | |||
Restricted Stock and Restricted Stock Units | |||
Outstanding at beginning of year (in shares) | 841,610 | ||
Granted (in shares) | 261,776 | ||
Forfeited (in shares) | (20,940) | ||
Vested (in shares) | (357,194) | ||
Outstanding at end of year (in shares) | 725,252 | 841,610 | |
Weighted-Average Fair Value | |||
Outstanding at beginning of year (in usd per share) | $ 20.41 | ||
Granted (in usd per share) | 21.02 | ||
Forfeited (in usd per share) | 22.01 | ||
Vested (in usd per share) | 19.62 | ||
Outstanding at end of year (in usd per share) | $ 21.03 | $ 20.41 | |
Restricted Stock Units (RSUs) | |||
Restricted Stock and Restricted Stock Units | |||
Outstanding at beginning of year (in shares) | 15,000 | ||
Granted (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Vested (in shares) | (15,000) | ||
Expired (in shares) | 0 | ||
Outstanding at end of year (in shares) | 0 | 15,000 | |
Weighted-Average Fair Value | |||
Outstanding at beginning of year (in usd per share) | $ 14.04 | ||
Granted (in usd per share) | 0 | ||
Forfeited (in usd per share) | 0 | ||
Vested (in usd per share) | 14.04 | ||
Expired (in usd per share) | 0 | ||
Outstanding at end of year (in usd per share) | $ 0 | $ 14.04 | |
Restricted Stock Units, Performance Based | |||
Restricted Stock and Restricted Stock Units | |||
Outstanding at beginning of year (in shares) | 327,486 | ||
Forfeited (in shares) | (16,270) | ||
Vested (in shares) | (55,921) | ||
Outstanding at end of year (in shares) | 405,304 | 327,486 | |
Weighted-Average Fair Value | |||
Outstanding at beginning of year (in usd per share) | $ 20.44 | ||
Forfeited (in usd per share) | 20.05 | ||
Vested (in usd per share) | 21.21 | ||
Expired (in usd per share) | 0 | ||
Outstanding at end of year (in usd per share) | $ 20.92 | $ 20.44 | |
Restricted Stock Units, Performance Based | Cliff - Subject to service and performance conditions | |||
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 150,009 | ||
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 21.20 | ||
Restricted Stock Units, Market Based | |||
Restricted Stock and Restricted Stock Units | |||
Outstanding at beginning of year (in shares) | 236,708 | ||
Forfeited (in shares) | (10,845) | ||
Vested (in shares) | (503) | ||
Expired (in shares) | (55,163) | ||
Outstanding at end of year (in shares) | 270,197 | 236,708 | |
Weighted-Average Fair Value | |||
Outstanding at beginning of year (in usd per share) | $ 12.46 | ||
Forfeited (in usd per share) | 11.84 | ||
Vested (in usd per share) | 11.80 | ||
Expired (in usd per share) | 14.88 | ||
Outstanding at end of year (in usd per share) | $ 12.46 | $ 12.46 | |
Restricted Stock Units, Market Based | Cliff - Subject to service and market conditions | |||
Restricted Stock and Restricted Stock Units | |||
Granted (in shares) | 100,000 | ||
Weighted-Average Fair Value | |||
Granted (in usd per share) | $ 13.87 |
STOCK PLANS - Assumptions Used
STOCK PLANS - Assumptions Used to Estimate Fair Value of Restricted Stock Units (Details) - Restricted Stock And Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assumptions used to compute fair value : | |||
Weighted-average fair value on grant date | $ 13.87 | $ 10.63 | $ 12.03 |
Cliff - Subject to service and market conditions | |||
Assumptions used to compute fair value : | |||
Weighted-average fair value on grant date | $ 10.63 | $ 12.03 | |
Volatility | 27.30% | 27.20% | 27.30% |
Risk free interest rate | 2.30% | 1.60% | 0.70% |
Expected term | 3 years | 3 years | 2 years 7 months 6 days |
Expected dividend yield | 2.80% | 2.60% | 2.30% |
STOCK PLANS - Stock Option Acti
STOCK PLANS - Stock Option Activity (Details) - Stock options - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Options | ||
Outstanding at beginning of year (in shares) | 0 | |
Granted (in shares) | 20,000 | |
Outstanding at end of year (in shares) | 20,000 | |
Exercisable at end of year (in shares) | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding at beginning of year (in shares) | $ 4.01 | $ 0 |
Granted (in usd per share) | 4.01 | |
Exercisable at end of year (in shares) | 0 | |
Weighted-Average Exercise Price | ||
Outstanding at beginning of year (in usd per share) | 0 | |
Granted (in usd per share) | 22.59 | |
Outstanding at end of year (in usd per share) | 22.59 | |
Exercisable at end of year (in usd per share) | $ 0 | |
Weighted- Average Remaining Contractual Life (years) | ||
Outstanding at end of year (in years) | 4 years 7 months 5 days | |
Exercisable at end of year (in years) | 0 years | |
Aggregate Intrinsic Value | ||
Outstanding at end of year | $ 0 | |
Exercisable at end of year | $ 0 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | |||
Preferred stock authorized for issuance (in shares) | 10,000,000 | ||
Par value of preferred stock authorized for issuance (in dollars per share) | $ 1 | ||
Preferred stock outstanding (in shares) | 0 | 0 | 0 |
Treasury shares (in shares) | 16,347,713 | 16,120,462 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Increase (Decrease) in Stockholders' Equity | |||
Shares outstanding, beginning (in shares) | 48,497,942 | 48,102,328 | 47,828,079 |
Purchase of common stock (in shares) | (17,445) | (123,577) | |
Shares issued under stock incentive plan, net of awards surrender to pay applicable taxes (in shares) | 204,855 | 385,037 | 192,050 |
Exercise of stock options (in shares) | 22,500 | 202,500 | |
Shares issued to Board of Directors in lieu of cash (in shares) | 3,129 | 5,522 | 3,276 |
Shares outstanding, ending (in shares) | 48,705,926 | 48,497,942 | 48,102,328 |
STOCKHOLDERS' EQUITY - Accumula
STOCKHOLDERS' EQUITY - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | |
Changes in accumulated other comprehensive income (loss), net of tax | ||||
Beginning Balance | $ (43,774) | $ (43,403) | $ (37,318) | |
Before-Tax Amount | (19,368) | (1,396) | (10,297) | |
Tax Benefit (Expense) | (491) | 1,025 | 4,212 | |
Total other comprehensive loss, net of tax | (19,859) | (371) | (6,085) | |
Ending Balance | (68,394) | (43,774) | (43,403) | |
Pension and other post-employment liability adjustment | ||||
Changes in accumulated other comprehensive income (loss), net of tax | ||||
Beginning Balance | (38,163) | (29,405) | (22,832) | |
Before-Tax Amount | 3,575 | (9,783) | (10,785) | |
Tax Benefit (Expense) | (930) | 1,025 | 4,212 | |
Total other comprehensive loss, net of tax | 2,645 | (8,758) | (6,573) | |
Ending Balance | (40,279) | (38,163) | (29,405) | |
Interest rate swap derivative | ||||
Changes in accumulated other comprehensive income (loss), net of tax | ||||
Beginning Balance | 0 | |||
Before-Tax Amount | (1,689) | |||
Tax Benefit (Expense) | 439 | |||
Total other comprehensive loss, net of tax | (1,250) | |||
Ending Balance | (1,250) | 0 | ||
Foreign currency translation adjustment | ||||
Changes in accumulated other comprehensive income (loss), net of tax | ||||
Beginning Balance | (5,611) | (13,998) | (14,486) | |
Before-Tax Amount | (13,140) | 8,387 | 488 | |
Tax Benefit (Expense) | 0 | 0 | 0 | |
Total other comprehensive loss, net of tax | (13,140) | 8,387 | 488 | |
Ending Balance | (18,751) | (5,611) | $ (13,998) | |
Foreign currency translation adjustment on long-term intercompany notes | ||||
Changes in accumulated other comprehensive income (loss), net of tax | ||||
Beginning Balance | 0 | |||
Before-Tax Amount | (8,114) | |||
Tax Benefit (Expense) | 0 | |||
Total other comprehensive loss, net of tax | (8,114) | |||
Ending Balance | $ (8,114) | $ 0 | ||
ASU 2018-02 | ||||
Changes in accumulated other comprehensive income (loss), net of tax | ||||
ASU 2018-02 | $ (4,761) | |||
ASU 2018-02 | Pension and other post-employment liability adjustment | ||||
Changes in accumulated other comprehensive income (loss), net of tax | ||||
ASU 2018-02 | $ (4,761) |
STOCKHOLDERS' EQUITY - AOCI Rec
STOCKHOLDERS' EQUITY - AOCI Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amortization of pension and other post-retirement liability adjustments | |||||||||||
Tax (benefit) expense | $ 24,896 | $ (1,600) | $ 45,424 | ||||||||
Net earnings | $ 24,542 | $ 20,323 | $ 13,123 | $ 15,267 | $ 32,679 | $ 19,161 | $ 12,960 | $ 15,396 | 73,255 | 80,192 | 82,114 |
Amounts reclassified from accumulated other comprehensive income (loss) | |||||||||||
Amortization of pension and other post-retirement liability adjustments | |||||||||||
Prior service credits | 730 | 1,485 | 1,120 | ||||||||
Actuarial losses | (917) | (707) | (244) | ||||||||
Loss recognized during settlement | (5,735) | (2,162) | 0 | ||||||||
Total before tax | (5,922) | (1,384) | 876 | ||||||||
Tax (benefit) expense | (1,502) | (548) | 312 | ||||||||
Net earnings | $ (4,420) | $ (836) | $ 564 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net earnings attributable to Knoll, Inc. stockholders | $ 24,542 | $ 20,323 | $ 13,124 | $ 15,259 | $ 32,693 | $ 19,132 | $ 12,938 | $ 15,404 | $ 73,248 | $ 80,163 | $ 82,084 |
Denominator for basic earnings per share - weighted-average shares (in shares) | 48,657,015 | 48,422,558 | 48,093,294 | ||||||||
Potentially dilutive shares resulting from stock plans (in shares) | 561,000 | 737,000 | 826,000 | ||||||||
Denominator for diluted earnings per share - weighted-average shares (in shares) | 49,218,193 | 49,160,492 | 48,919,108 | ||||||||
Antidilutive equity awards not included in weighted-average common shares—diluted (in shares) | 20,000 | 0 | 0 | ||||||||
Basic (in dollars per share) | $ 0.50 | $ 0.42 | $ 0.27 | $ 0.31 | $ 0.67 | $ 0.39 | $ 0.27 | $ 0.32 | $ 1.51 | $ 1.66 | $ 1.71 |
Diluted (in dollars per share) | $ 0.50 | $ 0.41 | $ 0.27 | $ 0.31 | $ 0.67 | $ 0.39 | $ 0.26 | $ 0.31 | $ 1.49 | $ 1.63 | $ 1.68 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income before income tax expense | |||
U.S. operations | $ 67,240 | $ 62,609 | $ 107,803 |
Foreign operations | 30,911 | 15,983 | 19,735 |
Income before income tax expense | 98,151 | 78,592 | 127,538 |
Current: | |||
Federal | 4,276 | 11,712 | 11,980 |
State | 2,101 | 2,404 | 2,840 |
Foreign | 13,673 | 3,918 | 4,588 |
Total current | 20,050 | 18,034 | 19,408 |
Deferred: | |||
Federal | 6,297 | (20,595) | 23,814 |
State | 908 | 2,541 | 2,347 |
Foreign | (2,359) | (1,580) | (145) |
Total deferred | 4,846 | (19,634) | 26,016 |
Income tax expense (benefit) | 24,896 | (1,600) | $ 45,424 |
Deferred tax assets | |||
Accounts receivable, principally due to allowance for doubtful accounts | (32) | 858 | |
Inventories | 5,939 | 5,939 | |
Net operating loss carryforwards | 6,898 | 7,460 | |
Accrued pension | 2,121 | 5,591 | |
Stock-based compensation | 3,722 | 2,972 | |
Compensation-related accruals | 696 | 3,063 | |
Warranty | 2,055 | 1,779 | |
Obligation for post-employment benefits other than pension | 935 | 1,312 | |
Accrued liabilities and other items | 8,350 | 3,886 | |
Gross deferred tax assets | 30,684 | 32,860 | |
Valuation allowance | (4,789) | (4,789) | |
Net deferred tax assets | 25,895 | 28,071 | |
Deferred tax liabilities: | |||
Intangibles | (85,553) | (58,701) | |
Plant and equipment | (26,839) | (24,041) | |
Gross deferred tax liabilities | (112,392) | (82,742) | |
Net deferred tax liabilities | $ (86,497) | $ (54,671) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating loss carryforwards | |||||
Income taxes paid, net of refunds received | $ 9,600,000 | $ 22,400,000 | $ 27,400,000 | ||
Reconciliation of statutory federal income tax rate to the effective income tax rate | |||||
Federal statutory tax rate | 21.00% | 35.00% | 35.00% | ||
Increase (decrease) in the tax rate resulting from: | |||||
State taxes, net of federal effect | 2.40% | 5.20% | 3.30% | ||
Effect of tax rates of other countries | 0.50% | (1.80%) | (1.40%) | ||
Section 199 deduction | (0.00%) | (0.70%) | (0.80%) | ||
Change in contingency reserve | 0.00% | 0.00% | (0.20%) | ||
Limitation on deduction of officer’s compensation | 0.40% | 1.30% | 0.60% | ||
Tax Act | (3.20%) | (33.90%) | 0.00% | ||
Valuation allowance release | 0.00% | (3.30%) | 0.00% | ||
Other | 4.30% | (3.80%) | (0.90%) | ||
Effective tax rate | 25.40% | (2.00%) | 35.60% | ||
Tax benefit as a result of the new legislation (estimate in 2017) | $ 1,700,000 | $ 26,600,000 | $ 1,700,000 | ||
Estimated benefit from valuation allowance release | 28,300,000 | ||||
One-time repatriation tax on accumulated foreign earnings | 200,000 | ||||
Liability for the withholding tax on distribution of accumulated foreign earnings | 1,500,000 | $ 1,500,000 | |||
Activity related to unrecognized tax benefits | |||||
Balance, beginning of the year | 875,000 | 875,000 | $ 4,407,000 | ||
Additions for tax position related to the current year | 125,000 | 125,000 | 125,000 | ||
Additions for tax position related to the prior year | 0 | 0 | 56,000 | ||
Decreases for tax position related to the prior year | 0 | 0 | (250,000) | ||
Prior year reductions: | |||||
Lapse of statute of limitations | (125,000) | (125,000) | (125,000) | ||
Settlements | 0 | 0 | (3,338,000) | ||
Balance, end of the year | 875,000 | 875,000 | 875,000 | 875,000 | 875,000 |
Interest and penalties | 0 | $ 100,000 | |||
Accruals for payments of interest and penalties | 0 | $ 0 | 0 | $ 0 | |
Foreign | |||||
Operating loss carryforwards | |||||
Net operating loss carryforwards | $ 26,500,000 | 26,500,000 | |||
Increase (decrease) in the tax rate resulting from: | |||||
Estimated benefit from valuation allowance release | $ 2,600,000 |
OTHER INCOME, NET (Details)
OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |||
Foreign exchange losses (gains) | $ (1,965) | $ 1,781 | $ 3,725 |
Net periodic benefit income | (7,107) | (9,594) | (5,800) |
Other, net | (532) | 113 | (360) |
Other income, net | $ (9,604) | $ (7,700) | $ (2,435) |
QUARTERLY RESULTS (UNAUDITED)_2
QUARTERLY RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 354,625 | $ 327,737 | $ 323,351 | $ 296,559 | $ 316,122 | $ 291,256 | $ 268,694 | $ 256,820 | $ 1,302,272 | $ 1,132,892 | $ 1,164,292 |
Gross profit | 131,732 | 122,794 | 119,287 | 107,711 | 112,337 | 106,610 | 99,958 | 95,674 | 481,524 | 414,579 | 445,976 |
Net earnings | 24,542 | 20,323 | 13,123 | 15,267 | 32,679 | 19,161 | 12,960 | 15,396 | 73,255 | 80,192 | 82,114 |
Net earnings attributable to Knoll, Inc. stockholders | $ 24,542 | $ 20,323 | $ 13,124 | $ 15,259 | $ 32,693 | $ 19,132 | $ 12,938 | $ 15,404 | $ 73,248 | $ 80,163 | $ 82,084 |
Earnings per share—Basic (in dollars per share) | $ 0.50 | $ 0.42 | $ 0.27 | $ 0.31 | $ 0.67 | $ 0.39 | $ 0.27 | $ 0.32 | $ 1.51 | $ 1.66 | $ 1.71 |
Earnings per share—Diluted (in dollars per share) | $ 0.50 | $ 0.41 | $ 0.27 | $ 0.31 | $ 0.67 | $ 0.39 | $ 0.26 | $ 0.31 | $ 1.49 | $ 1.63 | $ 1.68 |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Pension settlement charges | $ 500 | $ 600 | $ 4,600 | $ 2,200 | |||||||
Write-off of property, plant, and equipment | 16,300 | $ 0 | $ 16,306 | $ 0 | |||||||
Restructuring charges | $ 2,200 | 2,614 | 2,150 | 0 | |||||||
Results include impact of Tax Cuts and Jobs Act | 1,700 | $ 26,600 | 1,700 | ||||||||
Corporate | |||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | 0 | 0 | 0 | ||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Acquisition costs | 200 | 200 | 500 | $ 1,000 | 1,300 | ||||||
Office | |||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | 782,020 | 722,984 | $ 768,873 | ||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||||||||
Pension settlement charges | 5,700 | 2,200 | |||||||||
Write-off of property, plant, and equipment | 16,300 | ||||||||||
Restructuring charges | $ 100 | $ 1,200 | $ 800 | $ 500 | $ 2,600 | $ 2,200 |
SEGMENT AND GEOGRAPHIC REGION_3
SEGMENT AND GEOGRAPHIC REGION INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financial information of segments | |||||||||||
SALES | $ 354,625 | $ 327,737 | $ 323,351 | $ 296,559 | $ 316,122 | $ 291,256 | $ 268,694 | $ 256,820 | $ 1,302,272 | $ 1,132,892 | $ 1,164,292 |
OPERATING PROFIT | 115,193 | 80,537 | 130,508 | ||||||||
CAPITAL EXPENDITURES | 41,839 | 39,677 | 42,695 | ||||||||
Write-off of property, plant, and equipment | 16,300 | 0 | 16,306 | 0 | |||||||
Pension settlement charges | 500 | 600 | 4,600 | $ 2,200 | |||||||
Restructuring charges | $ 2,200 | 2,614 | 2,150 | 0 | |||||||
Operating Segments | |||||||||||
Financial information of segments | |||||||||||
SALES | 1,302,272 | 1,132,892 | 1,164,292 | ||||||||
INTERSEGMENT SALES | 12,413 | 12,272 | 16,015 | ||||||||
DEPRECIATION AND AMORTIZATION (2) | 34,401 | 26,049 | 21,185 | ||||||||
Corporate | |||||||||||
Financial information of segments | |||||||||||
SALES | 0 | 0 | 0 | ||||||||
INTERSEGMENT SALES | 0 | 0 | 0 | ||||||||
DEPRECIATION AND AMORTIZATION (2) | 595 | 887 | 653 | ||||||||
OPERATING PROFIT | (24,286) | (24,102) | (22,223) | ||||||||
CAPITAL EXPENDITURES | 879 | 462 | 1,481 | ||||||||
Acquisition costs | 200 | 200 | 500 | 1,000 | 1,300 | ||||||
Office | |||||||||||
Financial information of segments | |||||||||||
SALES | 782,020 | 722,984 | 768,873 | ||||||||
Write-off of property, plant, and equipment | 16,300 | ||||||||||
Pension settlement charges | 5,700 | 2,200 | |||||||||
Restructuring charges | $ 100 | $ 1,200 | $ 800 | $ 500 | 2,600 | 2,200 | |||||
Office | Operating Segments | |||||||||||
Financial information of segments | |||||||||||
SALES | 782,020 | 722,984 | 768,873 | ||||||||
INTERSEGMENT SALES | 1,644 | 1,331 | 1,877 | ||||||||
DEPRECIATION AND AMORTIZATION (2) | 19,760 | 18,334 | 14,967 | ||||||||
OPERATING PROFIT | 50,382 | 28,233 | 72,134 | ||||||||
CAPITAL EXPENDITURES | 31,978 | 32,515 | 34,065 | ||||||||
Lifestyle | |||||||||||
Financial information of segments | |||||||||||
SALES | 520,252 | 409,908 | 395,419 | ||||||||
Lifestyle | Operating Segments | |||||||||||
Financial information of segments | |||||||||||
SALES | 520,252 | 409,908 | 395,419 | ||||||||
INTERSEGMENT SALES | 10,769 | 10,941 | 14,138 | ||||||||
DEPRECIATION AND AMORTIZATION (2) | 14,046 | 6,828 | 5,565 | ||||||||
OPERATING PROFIT | 89,097 | 76,406 | 80,597 | ||||||||
CAPITAL EXPENDITURES | 8,982 | $ 6,700 | $ 7,149 | ||||||||
Acquisition costs | $ 600 |
SEGMENT AND GEOGRAPHIC REGION_4
SEGMENT AND GEOGRAPHIC REGION INFORMATION (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Sales to clients attributed to the geographic areas based on the origin of sale | |||||||||||
Sales | $ 354,625 | $ 327,737 | $ 323,351 | $ 296,559 | $ 316,122 | $ 291,256 | $ 268,694 | $ 256,820 | $ 1,302,272 | $ 1,132,892 | $ 1,164,292 |
Property, plant, and equipment, net | 214,953 | 200,630 | 214,953 | 200,630 | 197,084 | ||||||
United States | |||||||||||
Sales to clients attributed to the geographic areas based on the origin of sale | |||||||||||
Sales | 1,066,810 | 977,669 | 1,031,920 | ||||||||
Property, plant, and equipment, net | 172,653 | 157,805 | 172,653 | 157,805 | 157,856 | ||||||
Canada | |||||||||||
Sales to clients attributed to the geographic areas based on the origin of sale | |||||||||||
Sales | 37,299 | 52,894 | 36,813 | ||||||||
Property, plant, and equipment, net | 26,876 | 29,307 | 26,876 | 29,307 | 26,452 | ||||||
Europe | |||||||||||
Sales to clients attributed to the geographic areas based on the origin of sale | |||||||||||
Sales | 197,401 | 100,233 | 93,420 | ||||||||
Property, plant, and equipment, net | 15,424 | 13,518 | 15,424 | 13,518 | 12,776 | ||||||
Mexico | |||||||||||
Sales to clients attributed to the geographic areas based on the origin of sale | |||||||||||
Sales | 762 | 2,096 | 2,139 | ||||||||
Property, plant, and equipment, net | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
SCHEDULE II VALUATION AND QUA_2
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Allowance for doubtful accounts | ||||
Movement in valuation and qualifying accounts | ||||
Balance at Beginning of Year | $ 4,039 | $ 8,059 | $ 7,919 | |
Additions Charged to Expenses (Income) | 123 | (2,203) | 6,653 | |
Charge-Offs | (454) | (1,839) | (6,514) | |
Other | [1] | 16 | 22 | 1 |
Balance at End of Year | 3,724 | 4,039 | 8,059 | |
Valuation allowance for deferred income tax assets | ||||
Movement in valuation and qualifying accounts | ||||
Balance at Beginning of Year | 4,789 | 6,161 | 6,317 | |
Additions Charged to Expenses (Income) | 0 | (2,578) | 451 | |
Charge-Offs | 0 | 0 | 0 | |
Other | [1] | 0 | 1,206 | (607) |
Balance at End of Year | $ 4,789 | $ 4,789 | $ 6,161 | |
[1] | Primarily the impact of currency changes |
Uncategorized Items - knl-20181
Label | Element | Value |
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (4,761,000) |
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 4,761,000 |