COVER
COVER - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-12907 | |
Entity Registrant Name | KNOLL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3873847 | |
Entity Address, Address Line One | 1235 Water Street | |
Entity Address, City or Town | East Greenville, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 18041 | |
City Area Code | 215 | |
Local Phone Number | 679-7991 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NYSE | |
Trading Symbol | KNL | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001011570 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 50,647,480 | |
Restricted Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,581,952 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of Knoll, Inc. (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and any partially-owned subsidiaries that the Company has the ability to control. All significant intercompany balances and transactions have been eliminated in consolidation. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020. The condensed consolidated balance sheet of the Company, as of December 31, 2019, has been derived from the Company’s audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain reclassifications have been made to prior year balances to conform to current year presentation in the condensed consolidated statement of cash flows. During the fourth quarter of 2019, the Company aligned the consolidation of certain of its foreign subsidiaries in the consolidated financial statements which previously included results on a one-month reporting lag. The Company has determined that the effect of this change is not material to the condensed consolidated financial statements for the prior period presented and therefore has not presented retrospective application of this change. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. These estimates and assumptions take into account historical and forward looking factors that the Company believes are reasonable, including, but not limited to, the potential impacts arising from the coronavirus pandemic of 2019 (“COVID-19”) and public and private sector policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts of COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. Actual results could differ significantly from those estimates. Examples of significant estimates include the allowance for credit losses, the recoverability of property, plant and equipment, the incremental borrowing rate for lease liabilities, the recoverability of intangible assets and other long-lived assets, fair value measurements, including those related to financial instruments, goodwill and intangible assets, valuation allowances on tax assets, pension and postretirement benefit obligations, contingencies and the identification and valuation of assets acquired and liabilities assumed in connection with business combinations. Credit Losses Subsequent to January 1, 2020, accounts receivable are recorded at amortized cost less an allowance for expected credit losses. The Company maintains an allowance for credit losses for the expected failure or inability of its customers to make required payments. The Company recognizes the allowance for expected credit losses at inception and reassesses quarterly based on management’s expectation of the asset’s collectability. The allowance is based on multiple factors including historical experience with bad debts, the credit quality of the customer base, the aging of such receivables and current macroeconomic conditions, as well as management’s expectations of conditions in the future. The Company’s allowance for uncollectible accounts receivable is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics. Management analyzes receivables based on the credit quality indicators and shared risk characteristics of our dealers and other customers. Management stratifies the dealer population generally by the level of their purchase activity, mainly recurring purchasers compared to non-recurring purchasers, as well as the financial strength of the dealer. Management also stratifies receivables based on government and corporate purchasers with common risk characteristics. Management considers multiple factors, including payment history, frequency of purchases and financial strength of the purchaser to determine the reserve needed.. Accounting Standards Adopted In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or other reference rate expected to be discontinued due to reference rate reform. The amendments in this ASU are effective immediately and may be applied to impacted contracts and hedges prospectively through December 31, 2022. The adoption of the ASU had no impact on the Company’s condensed consolidated financial statements for the period ended March 31, 2020. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), which amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying and adding certain disclosures. The Company adopted ASU 2018-13 as of January 1, 2020. The adoption of this ASU did not have a significant impact on the Company’s condensed consolidated financial statements or disclosures. 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, which requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted ASU 2016-13 as of January 1, 2020. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 130.6 | $ 8.5 |
Customer receivables, net of allowance for doubtful accounts of $4.8 and $4.0, respectively | 114.2 | 107.4 |
Inventories | 203.9 | 195.9 |
Prepaid expenses | 19.3 | 17.2 |
Other current assets | 11.4 | 11.6 |
Assets held for sale | 11.1 | 0 |
Total current assets | 490.5 | 340.6 |
Property, plant, and equipment, net | 224.9 | 239 |
Goodwill | 328 | 332.1 |
Intangible assets, net | 343.4 | 348.2 |
Right-of-use lease assets | 107.1 | 94.4 |
Other non-current assets | 2.4 | 3.6 |
Total assets | 1,496.3 | 1,357.9 |
Current liabilities: | ||
Current maturities of long-term debt | 17 | 17.1 |
Accounts payable | 122.3 | 131.9 |
Current portion of lease liability | 24.9 | 20.7 |
Other current liabilities | 110.6 | 120.3 |
Total current liabilities | 274.8 | 290 |
Long-term debt, net | 589.3 | 428.9 |
Deferred income taxes | 77.1 | 87.5 |
Pension liability | 33.5 | 22 |
Lease liability | 98.7 | 87 |
Other non-current liabilities | 19.2 | 14.9 |
Total liabilities | 1,092.6 | 930.3 |
Commitments and contingent liabilities (Note 9) | ||
Shareholders’ equity: (shares in thousands) | ||
Common stock,$0.01 par value; 200,000 shares authorized; 67,336 and 66,296 shares issued, respectively, 50,649 and 49,775 shares outstanding, respectively, net, at all periods, of treasury shares and inclusive of non-voting restricted shares | 0.5 | 0.5 |
Additional paid-in capital | 64.4 | 66.8 |
Retained earnings | 432.1 | 429.7 |
Accumulated other comprehensive loss | (93.3) | (69.4) |
Total shareholders’ equity | 403.7 | 427.6 |
Total liabilities and shareholders’ equity | $ 1,496.3 | $ 1,357.9 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Balance at March 31, 2020 | $ 4.8 | $ 4 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 67,336,000 | 66,296,000 |
Common stock, shares outstanding (n shares) | 50,649,000 | 49,775,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Sales | $ 340 | $ 332.8 |
Cost of sales | 217.7 | 209 |
Gross profit | 122.3 | 123.8 |
Selling, general, and administrative expenses | 103.3 | 94.5 |
Restructuring charges | 7.6 | 0.1 |
Operating profit | 11.4 | 29.2 |
Interest expense | 4.9 | 5.2 |
Pension settlement charges | 0.7 | 0.2 |
Other income, net | (1.2) | (0.7) |
Income before income tax expense | 7 | 24.5 |
Income tax (benefit) expense | (3.9) | 6.5 |
Net earnings | $ 10.9 | $ 18 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 0.22 | $ 0.37 |
Diluted (in dollars per share) | $ 0.22 | $ 0.37 |
Weighted-average common shares outstanding: (in thousands) | ||
Basic (in shares) | 48,973,000 | 48,775,000 |
Diluted (in shares) | 49,708,000 | 49,190,000 |
Other comprehensive income (loss), net of tax: | ||
Unrealized losses on cash flow hedge, net of amounts reclassified into earnings | $ (4.6) | $ (1.5) |
Pension and other post-employment liability adjustments | (8.4) | 0.1 |
Foreign currency translation adjustments | (9.3) | 1.9 |
Foreign currency translation adjustments on long-term intercompany notes | (1.6) | (4.1) |
Total other comprehensive (loss) income, net | (23.9) | (3.6) |
Total comprehensive (loss) income | $ (13) | $ 14.4 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net earnings | $ 10.9 | $ 18 | |
Adjustments to reconcile net earnings to cash provided by (used in) operating | |||
Depreciation | 8.4 | 6.3 | |
Amortization expense (including debt issuance costs) | 2.9 | 2.5 | |
Deferred income tax benefit | (6.3) | 0 | |
Pension settlement charges | 0.7 | 0.2 | |
Stock-based compensation | 1.6 | 2.2 | |
Other non-cash items | 1.4 | 1.4 | |
Changes in assets and liabilities: | |||
Customer receivables | (9.4) | 11.4 | |
Inventories | (10.2) | (7.1) | |
Prepaid expenses and other assets | (0.8) | 1.8 | |
Accounts payable | (6.8) | (7.5) | |
Other liabilities | (8.8) | (10.1) | |
Cash provided by (used in) operating activities | (16.4) | 19.1 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (10.7) | (9.2) | |
Other | 0.4 | 0 | |
Cash used in investing activities | (10.3) | (9.2) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from revolving credit facility | 219.5 | 111 | |
Repayment of revolving credit facility | (53.5) | (105) | |
Repayment of term loans | (4.2) | (4.3) | |
Payment of dividends | (8.9) | (7.8) | |
Payments of withholding taxes related to net share settlements of equity awards | (3.8) | (3) | |
Cash provided by (used in) financing activities | 149.1 | (9.1) | |
Effect of exchange rate changes on cash and cash equivalents | (0.3) | 0 | |
Net increase in cash and cash equivalents | 122.1 | 0.8 | |
Cash and cash equivalents at beginning of period | 8.5 | 1.6 | $ 1.6 |
Cash and cash equivalents at end of period | $ 130.6 | $ 2.4 | $ 8.5 |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of Revenue The Company’s revenue presented as “Sales” in the Condensed Consolidated Statements of Operations and Comprehensive Income is derived from contracts with customers for the sale of the Company’s products. The Company’s sales by product category were as follows (in millions): Three Months Ended March 31, 2020 2019 Office Segment Office Systems $ 100.9 $ 106.3 Seating 30.4 30.9 Files and Storage 25.2 25.6 Ancillary 49.3 25.5 Other 10.6 13.9 Total Office Segment 216.4 202.2 Lifestyle Segment Studio 96.3 101.6 Coverings 27.3 29.0 Total Lifestyle Segment 123.6 130.6 Total Sales $ 340.0 $ 332.8 Contract Balances The Company’s contract assets consist of trade receivables, the balances of which are included in Customer receivables, net in the Condensed Consolidated Balance Sheets. These amounts represent the amount of consideration the Company expects to be entitled to in exchange for the goods delivered to its customers. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following as of the dates presented (in millions): March 31, 2020 December 31, 2019 Raw materials $ 58.1 $ 58.7 Work-in-process 8.4 8.1 Finished goods 137.4 129.1 $ 203.9 $ 195.9 |
PENSION AND OTHER POST-EMPLOYME
PENSION AND OTHER POST-EMPLOYMENT BENEFITS | 3 Months Ended |
Mar. 31, 2020 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
PENSION AND OTHER POST-EMPLOYMENT BENEFITS | PENSION AND OTHER POST-EMPLOYMENT BENEFITS The following tables set forth the components of the net periodic benefit cost (credit) for the Company’s pension and other post-employment benefit plans (in millions): Pension Benefits Other Benefits Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Interest cost $ 1.5 $ 2.5 $ — $ 0.1 Expected return on plan assets (2.7) (4.0) — — Amortization of prior service credit — — — (0.2) Recognized actuarial loss 0.3 0.1 — — Pension settlement charge (1) 0.7 0.2 — — Net periodic benefit cost (credit) $ (0.2) $ (1.2) $ — $ (0.1) (1) The pension settlement charge was related to cash payments from lump sum elections. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS 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. Recurring Fair Value Measurements The Company measures certain financial liabilities at fair value on a recurring basis. The following table summarizes the valuation of those liabilities as of the dates presented (in millions): Fair Value as of March 31, 2020 Fair Value as of December 31, 2019 Liabilities: Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Interest rate swap $ — $ 12.8 $ — $ 12.8 $ — $ 6.6 $ — $ 6.6 Contingent consideration obligations (1) — — 2.0 2.0 — — 2.0 2.0 (1) In connection with the Company’s acquisition of FHI LLC (“Fully”) in August 2019, the Company is contingently liable to make additional payments in the form of consideration based upon the achievement of certain performance targets. The maximum amount of contingent consideration that could be earned through 2023 as of March 31, 2020 is $15.0 million (see Note 4 to the Company’s 2019 Annual Report on Form 10-K for additional information on the Fully acquisition). As of March 31, 2020 and December 31, 2019, the fair value of the contingent consideration obligations was reflected as a component of Other non-current liabilities in the condensed consolidated balance sheets. Interest Rate Swap The fair value of the interest rate swap is based on observable prices as quoted for receiving the variable one-month LIBOR and paying fixed interest rates and therefore is classified as Level 2 within the fair value hierarchy. Non-Recurring Fair Value Measurements |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company is exposed to certain market risks, including the effect of changes in interest rates on future interest payments to be made on its variable rate debt. The Company utilizes a derivative instrument to mitigate its financial exposure to interest rate volatility. The derivative instrument, which is placed with a financial institution that the Company believes to be of acceptable credit risk, takes the form of an interest rate swap. The Company does not use derivatives for speculative trading purposes. Cash flow hedge In January 2018, the Company entered into an interest rate swap contract, which is designated as a cash flow hedge of the forecasted interest payments associated with a portion of the Company’s variable rate debt. 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 was December 31, 2018, matures January 23, 2023 and carries a fixed rate of 2.63%. As of March 31, 2020, the interest rate swap has a notional amount of $250.0 million, which decreases over time by $50 million increments. The following table summarizes the fair value of the Company’s derivative instrument, as well as the location of this instrument on the Condensed Consolidated Balance Sheets as of the dates presented (in millions): Derivatives designated as hedging instruments Balance Sheet Location March 31, 2020 December 31, 2019 Derivative liabilities: Interest rate swap Other current liabilities $ 5.5 $ 2.6 Interest rate swap Other non-current liabilities 7.3 4.0 Total derivative liabilities $ 12.8 $ 6.6 The fair value of the swap recorded in Accumulated Other Comprehensive Loss (“AOCL”) may be recognized in the Condensed Consolidated Statement of Operations if certain terms of the agreement change, are modified or if the loan is extinguished. As of March 31, 2020, there was no hedge ineffectiveness associated with the Company’s interest rate swap and no portion of the cash flow hedge is excluded from the assessment of effectiveness. The Company reclassified $0.6 million from AOCL to interest expense within the Condensed Consolidated Statement of Operations during the three months ended March 31, 2020. Based on the forward interest rate curve in place as of March 31, 2020, the Company expects to reclassify approximately $5.5 million of unrealized losses related to its cash flow hedge from AOCL into earnings in the next twelve months. |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Other current liabilities are comprised of the following (in millions): March 31, 2020 December 31, 2019 Customer deposits $ 35.8 $ 32.5 Accrued employee compensation 19.2 37.4 Warranty 10.1 10.1 Other 45.5 40.3 Other current liabilities $ 110.6 $ 120.3 |
INDEBTEDNESS
INDEBTEDNESS | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS The following table summarizes the Company’s long-term debt as of the dates presented (in millions): March 31, 2020 December 31, 2019 Revolving credit facility $ 304.5 $ 138.5 U.S. term loans 225.0 228.1 Multi-currency term loans 80.8 83.7 Total long-term debt 610.3 450.3 Less: Current maturities of long-term debt 17.0 17.1 Less: Unamortized debt issuance costs 4.0 4.3 Long-term debt, net $ 589.3 $ 428.9 Credit Facility The commitments and available borrowing capacity under the revolving credit facility (the “Revolver”) were as follows as of the dates presented (in millions): Commitments Outstanding Borrowings Letters of Credit Outstanding Borrowing Capacity March 31, 2020 $ 400.0 $ 304.5 $ 5.1 $ 90.4 December 31, 2019 $ 400.0 $ 138.5 $ 5.1 $ 256.4 At March 31, 2020, borrowings under the Revolver include $15.0 million at a base rate of 3.75% and $289.5 million at a weighted-average LIBOR rate of 2.42%. At December 31, 2019, borrowings under the Revolver included $10.0 million at a base rate of 5.25% and $128.5 million at a weighted-average LIBOR rate of 3.27%. As of March 31, 2020 and December 31, 2019, letters of credit issued under the Revolver incurred interest at the rate of 1.50%. |
CONTINGENT LIABILITIES AND COMM
CONTINGENT LIABILITIES AND COMMITMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES AND COMMITMENTS | CONTINGENT LIABILITIES AND COMMITMENTS 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. 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 accrued. Changes in the warranty reserve are as follows (in millions): Balance, December 31, 2019 $ 10.1 Provision for warranty claims 2.0 Warranty claims settled (2.0) Balance, March 31, 2020 $ 10.1 |
RESTRUCTURING
RESTRUCTURING | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING In January 2020, the Company announced the closure of its Grand Rapids, Michigan manufacturing operations (“Grand Rapids”). Pursuant to this action, Grand Rapids is expected to be substantially closed, and its production substantially migrated to other North America facilities, by the end of the second quarter of 2020. Additionally, the Company will make changes to better optimize its logistics operations, which are expected to be completed by the end of 2021. The Company expects to incur total charges of approximately $18.2 million in connection with these actions, comprised of severance and retention costs of $7.0 million, moving and training costs of $6.0 million, facilities-related costs of $3.7 million and equipment write-offs of $1.5 million. During the three months ended March 31, 2020, the Company recognized restructuring charges of $8.2 million, attributable to the Office and Lifestyle segments in the amounts of $7.5 million and $0.7 million, respectively. These charges relate primarily to severance and retention, as well as certain facilities-related initiatives. The restructuring charges have been recognized between operating expenses and Cost of sales in the amounts of $7.6 million and $0.6 million, respectively, on the accompanying condensed consolidated statement of operations. The restructuring charge of $0.6 million included in Cost of sales represents accelerated depreciation expense related to equipment that is expected to be abandoned as part of the restructuring. As of March 31, 2020, the Company expects that all of the $4.9 million restructuring reserve, which is included as a component of Other current liabilities, will be utilized (settled in cash) during 2020. In connection with the restructuring actions noted above, the Company classified its Grand Rapids land and building assets, which have an aggregate carrying amount of approximately $11.1 million, as held for sale on the accompanying condensed consolidated balance sheet. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
EQUITY | EQUITY The following table summarizes the components of shareholders’ equity and the changes therein during the three months ended March 31, 2020 and (in millions, except share information): Common Additional Retained Accumulated Total Equity Balance at December 31, 2019 $ 0.5 $ 66.8 $ 429.7 $ (69.4) $ 427.6 Net earnings — — 10.9 — 10.9 Other comprehensive loss — — — (23.9) (23.9) Stock-based compensation, net — 1.6 — — 1.6 Dividends declared ($0.17 per share) — — (8.5) — (8.5) Purchase of common stock (154,012 shares) — (4.0) — — (4.0) Balance at March 31, 2020 $ 0.5 $ 64.4 $ 432.1 $ (93.3) $ 403.7 The following table summarizes the change in the number of shares of common stock outstanding during the three months ended March 31, 2020 (table in thousands and is exclusive of non-voting restricted shares): Shares outstanding as of December 31, 2019 48,879 Shares issued under stock incentive plans, net of awards surrendered to pay applicable taxes 184 Shares outstanding as of March 31, 2020 49,063 The following table summarizes the components of shareholders’ equity and the changes therein during the three months ended March 31, 2019 (in millions, except share information): Common Additional Retained Accumulated Total Noncontrolling Interests Total Equity Balance at December 31, 2018 $ 0.5 $ 58.8 $ 395.4 $ (68.4) $ 386.3 $ 0.2 $ 386.5 Net earnings — — 18.0 — 18.0 — 18.0 Other comprehensive loss — — — (3.6) (3.6) — (3.6) Stock-based compensation, net — 2.2 — — 2.2 — 2.2 Dividends declared ($0.15 per share) — — (7.5) — (7.5) — (7.5) Purchase of common stock (141,738 shares) — (3.0) — — (3.0) — (3.0) Other — 0.4 — — 0.4 (0.2) 0.2 Balance at March 31, 2019 $ 0.5 $ 58.4 $ 405.9 $ (72.0) $ 392.8 $ — $ 392.8 The following table summarizes the change in the number of shares of common stock outstanding during the three months ended March 31, 2019 (table in thousands and is exclusive of non-voting restricted shares): Shares outstanding as of December 31, 2018 48,706 Shares issued under stock incentive plans, net of awards surrendered to pay applicable taxes 139 Shares outstanding as of March 31, 2019 48,845 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in AOCL by component for the three months ended March 31, 2020 (in millions): Unrealized gains (losses) on Interest Rate Swaps Foreign Foreign Currency Translation Adjustment on Long-term Intercompany Notes Pension and Total Balance as of December 31, 2019 $ (4.8) $ (15.6) $ (13.0) $ (36.0) $ (69.4) Other comprehensive loss before reclassifications (6.8) (9.3) (1.6) (12.3) (30.0) Amounts reclassified from AOCL 0.6 — — 1.0 1.6 Net current-period other comprehensive loss before income tax (6.2) (9.3) (1.6) (11.3) (28.4) Income tax benefit 1.6 — — 2.9 4.5 Other comprehensive loss (4.6) (9.3) (1.6) (8.4) (23.9) Balance as of March 31, 2020 $ (9.4) $ (24.9) $ (14.6) $ (44.4) $ (93.3) The following pension and other post-employment benefit reclassifications were made from AOCL to the Condensed Consolidated Statements of Operations and Other Comprehensive Income (in millions): Three Months Ended March 31, 2020 March 31, 2019 Amortization of pension and other post-employment liability adjustments Prior service credits (1) $ — $ (0.2) Actuarial losses (1) 0.3 0.1 Pension settlement charge 0.7 0.2 Total before tax 1.0 0.1 Tax expense (0.2) — Net of tax $ 0.8 $ 0.1 (1) These AOCL components are included in the computation of net periodic pension costs, and are included in Other income, net within the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note 4 for additional information. The following table summarizes the unrealized gains (losses) on derivative instruments, including the impact of components reclassified into net income from AOCL, for the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 March 31, 2019 Unrealized gain (loss) on derivative instruments $ (6.8) $ (2.1) Loss on derivatives reclassified into income 0.6 0.1 Total before tax (6.2) (2.0) Tax benefit 1.6 0.5 Net of tax $ (4.6) $ (1.5) |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS is similarly calculated but includes the weighted-average dilutive effect of outstanding restricted shares, restricted stock units and stock options. The following table sets forth the reconciliation from basic and diluted average common shares (in millions): Three Months Ended March 31, 2020 2019 Numerator: Net earnings $ 10.9 $ 18.0 Denominator: (shares in thousands) Denominator for basic earnings per shares - weighted-average shares 48,973 48,775 Effect of dilutive securities: Potentially dilutive shares resulting from stock plans 735 415 Denominator for diluted earnings per share - weighted-average shares 49,708 49,190 Stock options excluded from the computation of diluted EPS (1) 110 110 Net earnings per share: Basic $ 0.22 $ 0.37 Diluted $ 0.22 $ 0.37 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company develops interim income tax provisions based on estimates of the effective tax rates expected to apply per tax domicile for the current annual reporting period. These estimates are reevaluated each quarter and updated as necessary. The tax effects of any discrete items are recorded in the period in which they occur and are excluded from the interim estimates of the effective annual rates. On March 27, 2020, the U.S. federal government enacted tax legislation under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) in response to the economic impacts of the spread of COVID-19. The CARES Act provides relief to corporate taxpayers by permitting additional carryback allowances for net operating losses (“NOLs”) incurred for periods beginning after January 1, 2017 and before January 1, 2021. The CARES Act also provides changes to the limitations on interest expense deductibility for tax years beginning in 2019 and 2020. The Company is continuing to evaluate the overall impact of this tax legislation on its operations and income tax position, and has incorporated changes related to the CARES Act in the interim tax provision for the three months ended March 31, 2020. The Company’s effective tax (benefit) rate for the three months ended March 31, 2020 and 2019 was (54.6)% and 26.6%, respectively. Changes in the effective tax rate for the first quarter ended March 31, 2020, as compared to the same period in 2019, were primarily driven by the impacts of the CARES Act, specifically the rate differential on the carryback of NOLs to years where the U.S. federal income tax rate was 35.0%, compared to the current rate of 21.0%. Additional factors impacting the change in rate include vesting of equity awards, discrete significant restructuring costs, and changes in the relative taxable income in the countries and states in which the Company operates. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
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, and Muuto operating segments. All unallocated expenses are included within Corporate. The Office segment includes a complete range of workplace products that address diverse workplace planning paradigms in North America and Europe. These products include: office systems furniture, seating, storage, tables, desks and KnollExtra® accessories. The Office segment includes DatesWeiser and Fully. DatesWeiser, known for its sophisticated meeting and conference tables and credenzas, sets a standard of design, quality and technology integration. Fully is an e-commerce furniture brand selling height-adjustable desks, ergonomic chairs and accessories principally for individual home offices and small businesses. The Lifestyle segment includes KnollStudio®, HOLLY HUNT®, Muuto®, KnollTextiles®, Spinneybeck® (including Filzfelt®), and Edelman® Leather. Lifestyle products, which are distributed globally, 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 include unallocated costs relating to shared services and general corporate activities such as 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. The tables below present the Company’s segment information with Corporate costs excluded from reporting segment results (in millions): Three Months Ended March 31, 2020 2019 SALES Office $ 216.4 $ 202.2 Lifestyle 123.6 130.6 Knoll, Inc. $ 340.0 $ 332.8 INTERSEGMENT SALES (1) Office $ 0.3 $ 0.4 Lifestyle 2.3 2.5 Knoll, Inc. $ 2.6 $ 2.9 OPERATING PROFIT Office (2) $ 3.9 $ 14.1 Lifestyle (2) 13.6 20.7 Corporate (6.1) (5.6) Knoll, Inc. $ 11.4 $ 29.2 (1) Intersegment sales are presented on a cost-plus basis, which takes into consideration the effect of transfer prices between legal entities. (2) Operating profit reflects restructuring charges of $7.5 million and $0.7 million within the Office and Lifestyle segments, respectively, during the three months ended March 31, 2020, and $0.1 million within the Office segment during the three months ended March 31, 2019 (refer to Note 10 for further information regarding the Company’s restructuring actions taken during the first quarter of 2020). The changes in the carrying amount of goodwill by reportable segment are as follows (in millions): Office Lifestyle Segment Total Balance as of December 31, 2019 $ 54.3 $ 277.8 $ 332.1 Foreign currency translation adjustment (0.6) (3.5) (4.1) Balance as of March 31, 2020 $ 53.7 $ 274.3 $ 328.0 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of Knoll, Inc. (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and any partially-owned subsidiaries that the Company has the ability to control. All significant intercompany balances and transactions have been eliminated in consolidation. Operating results for the three month period ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020. The condensed consolidated balance sheet of the Company, as of December 31, 2019, has been derived from the Company’s audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. Certain reclassifications have been made to prior year balances to conform to current year presentation in the condensed consolidated statement of cash flows. During the fourth quarter of 2019, the Company aligned the consolidation of certain of its foreign subsidiaries in the consolidated financial statements which previously included results on a one-month reporting lag. The Company has determined that the effect of this change is not material to the condensed consolidated financial statements for the prior period presented and therefore has not presented retrospective application of this change. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures. These estimates and assumptions take into account historical and forward looking factors that the Company believes are reasonable, including, but not limited to, the potential impacts arising from the coronavirus pandemic of 2019 (“COVID-19”) and public and private sector policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts of COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. Actual results could differ significantly from those estimates. Examples of significant estimates include the allowance for credit losses, the recoverability of property, plant and equipment, the incremental borrowing rate for lease liabilities, the recoverability of intangible assets and other long-lived assets, fair value measurements, including those related to financial instruments, goodwill and intangible assets, valuation allowances on tax assets, pension and postretirement benefit obligations, contingencies and the identification and valuation of assets acquired and liabilities assumed in connection with business combinations. |
Credit Losses | Subsequent to January 1, 2020, accounts receivable are recorded at amortized cost less an allowance for expected credit losses. The Company maintains an allowance for credit losses for the expected failure or inability of its customers to make required payments. The Company recognizes the allowance for expected credit losses at inception and reassesses quarterly based on management’s expectation of the asset’s collectability. The allowance is based on multiple factors including historical experience with bad debts, the credit quality of the customer base, the aging of such receivables and current macroeconomic conditions, as well as management’s expectations of conditions in the future. The Company’s allowance for uncollectible accounts receivable is based on management’s assessment of the collectability of assets pooled together with similar risk characteristics. Management analyzes receivables based on the credit quality indicators and shared risk characteristics of our dealers and other customers. Management stratifies the dealer population generally by the level of their purchase activity, mainly recurring purchasers compared to non-recurring purchasers, as well as the financial strength of the dealer. Management also stratifies receivables based on government and corporate purchasers with common risk characteristics. Management considers multiple factors, including payment history, frequency of purchases and financial strength of the purchaser to determine the reserve needed.. |
Accounting Standards Adopted | In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or other reference rate expected to be discontinued due to reference rate reform. The amendments in this ASU are effective immediately and may be applied to impacted contracts and hedges prospectively through December 31, 2022. The adoption of the ASU had no impact on the Company’s condensed consolidated financial statements for the period ended March 31, 2020. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), which amends the disclosure requirements for recurring and nonrecurring fair value measurements by removing, modifying and adding certain disclosures. The Company adopted ASU 2018-13 as of January 1, 2020. The adoption of this ASU did not have a significant impact on the Company’s condensed consolidated financial statements or disclosures. 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, which requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company adopted ASU 2016-13 as of January 1, 2020. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Sales by Product Category | The Company’s sales by product category were as follows (in millions): Three Months Ended March 31, 2020 2019 Office Segment Office Systems $ 100.9 $ 106.3 Seating 30.4 30.9 Files and Storage 25.2 25.6 Ancillary 49.3 25.5 Other 10.6 13.9 Total Office Segment 216.4 202.2 Lifestyle Segment Studio 96.3 101.6 Coverings 27.3 29.0 Total Lifestyle Segment 123.6 130.6 Total Sales $ 340.0 $ 332.8 |
Allowance for Doubtful Accounts | The following table sets forth the changes in the Company’s allowance for doubtful accounts for the three months ended March 31, 2020 (in millions): Balance at December 31, 2019 $ 4.0 Provision for doubtful accounts 0.6 Other 0.2 Balance at March 31, 2020 $ 4.8 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of the dates presented (in millions): March 31, 2020 December 31, 2019 Raw materials $ 58.1 $ 58.7 Work-in-process 8.4 8.1 Finished goods 137.4 129.1 $ 203.9 $ 195.9 |
PENSION AND OTHER POST-EMPLOY_2
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract] | |
Schedule of Components of the Net Periodic Benefit Cost | The following tables set forth the components of the net periodic benefit cost (credit) for the Company’s pension and other post-employment benefit plans (in millions): Pension Benefits Other Benefits Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Interest cost $ 1.5 $ 2.5 $ — $ 0.1 Expected return on plan assets (2.7) (4.0) — — Amortization of prior service credit — — — (0.2) Recognized actuarial loss 0.3 0.1 — — Pension settlement charge (1) 0.7 0.2 — — Net periodic benefit cost (credit) $ (0.2) $ (1.2) $ — $ (0.1) (1) The pension settlement charge was related to cash payments from lump sum elections. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes the valuation of those liabilities as of the dates presented (in millions): Fair Value as of March 31, 2020 Fair Value as of December 31, 2019 Liabilities: Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Interest rate swap $ — $ 12.8 $ — $ 12.8 $ — $ 6.6 $ — $ 6.6 Contingent consideration obligations (1) — — 2.0 2.0 — — 2.0 2.0 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following table summarizes the fair value of the Company’s derivative instrument, as well as the location of this instrument on the Condensed Consolidated Balance Sheets as of the dates presented (in millions): Derivatives designated as hedging instruments Balance Sheet Location March 31, 2020 December 31, 2019 Derivative liabilities: Interest rate swap Other current liabilities $ 5.5 $ 2.6 Interest rate swap Other non-current liabilities 7.3 4.0 Total derivative liabilities $ 12.8 $ 6.6 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities are comprised of the following (in millions): March 31, 2020 December 31, 2019 Customer deposits $ 35.8 $ 32.5 Accrued employee compensation 19.2 37.4 Warranty 10.1 10.1 Other 45.5 40.3 Other current liabilities $ 110.6 $ 120.3 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | The following table summarizes the Company’s long-term debt as of the dates presented (in millions): March 31, 2020 December 31, 2019 Revolving credit facility $ 304.5 $ 138.5 U.S. term loans 225.0 228.1 Multi-currency term loans 80.8 83.7 Total long-term debt 610.3 450.3 Less: Current maturities of long-term debt 17.0 17.1 Less: Unamortized debt issuance costs 4.0 4.3 Long-term debt, net $ 589.3 $ 428.9 |
Schedule of Revolving Credit Facility | The commitments and available borrowing capacity under the revolving credit facility (the “Revolver”) were as follows as of the dates presented (in millions): Commitments Outstanding Borrowings Letters of Credit Outstanding Borrowing Capacity March 31, 2020 $ 400.0 $ 304.5 $ 5.1 $ 90.4 December 31, 2019 $ 400.0 $ 138.5 $ 5.1 $ 256.4 |
CONTINGENT LIABILITIES AND CO_2
CONTINGENT LIABILITIES AND COMMITMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the warranty reserve | Changes in the warranty reserve are as follows (in millions): Balance, December 31, 2019 $ 10.1 Provision for warranty claims 2.0 Warranty claims settled (2.0) Balance, March 31, 2020 $ 10.1 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of changes in stockholders equity and noncontrolling interest | The following table summarizes the components of shareholders’ equity and the changes therein during the three months ended March 31, 2020 and (in millions, except share information): Common Additional Retained Accumulated Total Equity Balance at December 31, 2019 $ 0.5 $ 66.8 $ 429.7 $ (69.4) $ 427.6 Net earnings — — 10.9 — 10.9 Other comprehensive loss — — — (23.9) (23.9) Stock-based compensation, net — 1.6 — — 1.6 Dividends declared ($0.17 per share) — — (8.5) — (8.5) Purchase of common stock (154,012 shares) — (4.0) — — (4.0) Balance at March 31, 2020 $ 0.5 $ 64.4 $ 432.1 $ (93.3) $ 403.7 The following table summarizes the components of shareholders’ equity and the changes therein during the three months ended March 31, 2019 (in millions, except share information): Common Additional Retained Accumulated Total Noncontrolling Interests Total Equity Balance at December 31, 2018 $ 0.5 $ 58.8 $ 395.4 $ (68.4) $ 386.3 $ 0.2 $ 386.5 Net earnings — — 18.0 — 18.0 — 18.0 Other comprehensive loss — — — (3.6) (3.6) — (3.6) Stock-based compensation, net — 2.2 — — 2.2 — 2.2 Dividends declared ($0.15 per share) — — (7.5) — (7.5) — (7.5) Purchase of common stock (141,738 shares) — (3.0) — — (3.0) — (3.0) Other — 0.4 — — 0.4 (0.2) 0.2 Balance at March 31, 2019 $ 0.5 $ 58.4 $ 405.9 $ (72.0) $ 392.8 $ — $ 392.8 |
Schedule of change in number of shares of common stock outstanding | The following table summarizes the change in the number of shares of common stock outstanding during the three months ended March 31, 2020 (table in thousands and is exclusive of non-voting restricted shares): Shares outstanding as of December 31, 2019 48,879 Shares issued under stock incentive plans, net of awards surrendered to pay applicable taxes 184 Shares outstanding as of March 31, 2020 49,063 The following table summarizes the change in the number of shares of common stock outstanding during the three months ended March 31, 2019 (table in thousands and is exclusive of non-voting restricted shares): Shares outstanding as of December 31, 2018 48,706 Shares issued under stock incentive plans, net of awards surrendered to pay applicable taxes 139 Shares outstanding as of March 31, 2019 48,845 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table summarizes the changes in AOCL by component for the three months ended March 31, 2020 (in millions): Unrealized gains (losses) on Interest Rate Swaps Foreign Foreign Currency Translation Adjustment on Long-term Intercompany Notes Pension and Total Balance as of December 31, 2019 $ (4.8) $ (15.6) $ (13.0) $ (36.0) $ (69.4) Other comprehensive loss before reclassifications (6.8) (9.3) (1.6) (12.3) (30.0) Amounts reclassified from AOCL 0.6 — — 1.0 1.6 Net current-period other comprehensive loss before income tax (6.2) (9.3) (1.6) (11.3) (28.4) Income tax benefit 1.6 — — 2.9 4.5 Other comprehensive loss (4.6) (9.3) (1.6) (8.4) (23.9) Balance as of March 31, 2020 $ (9.4) $ (24.9) $ (14.6) $ (44.4) $ (93.3) |
Reclassification out of accumulated other comprehensive income | The following pension and other post-employment benefit reclassifications were made from AOCL to the Condensed Consolidated Statements of Operations and Other Comprehensive Income (in millions): Three Months Ended March 31, 2020 March 31, 2019 Amortization of pension and other post-employment liability adjustments Prior service credits (1) $ — $ (0.2) Actuarial losses (1) 0.3 0.1 Pension settlement charge 0.7 0.2 Total before tax 1.0 0.1 Tax expense (0.2) — Net of tax $ 0.8 $ 0.1 (1) These AOCL components are included in the computation of net periodic pension costs, and are included in Other income, net within the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note 4 for additional information. |
Summary of Unrealized Gains (Losses) on Derivative Instruments | The following table summarizes the unrealized gains (losses) on derivative instruments, including the impact of components reclassified into net income from AOCL, for the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 March 31, 2019 Unrealized gain (loss) on derivative instruments $ (6.8) $ (2.1) Loss on derivatives reclassified into income 0.6 0.1 Total before tax (6.2) (2.0) Tax benefit 1.6 0.5 Net of tax $ (4.6) $ (1.5) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic to dilutive average common shares | The following table sets forth the reconciliation from basic and diluted average common shares (in millions): Three Months Ended March 31, 2020 2019 Numerator: Net earnings $ 10.9 $ 18.0 Denominator: (shares in thousands) Denominator for basic earnings per shares - weighted-average shares 48,973 48,775 Effect of dilutive securities: Potentially dilutive shares resulting from stock plans 735 415 Denominator for diluted earnings per share - weighted-average shares 49,708 49,190 Stock options excluded from the computation of diluted EPS (1) 110 110 Net earnings per share: Basic $ 0.22 $ 0.37 Diluted $ 0.22 $ 0.37 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information with Corporate Costs Excluded | The tables below present the Company’s segment information with Corporate costs excluded from reporting segment results (in millions): Three Months Ended March 31, 2020 2019 SALES Office $ 216.4 $ 202.2 Lifestyle 123.6 130.6 Knoll, Inc. $ 340.0 $ 332.8 INTERSEGMENT SALES (1) Office $ 0.3 $ 0.4 Lifestyle 2.3 2.5 Knoll, Inc. $ 2.6 $ 2.9 OPERATING PROFIT Office (2) $ 3.9 $ 14.1 Lifestyle (2) 13.6 20.7 Corporate (6.1) (5.6) Knoll, Inc. $ 11.4 $ 29.2 (1) Intersegment sales are presented on a cost-plus basis, which takes into consideration the effect of transfer prices between legal entities. (2) Operating profit reflects restructuring charges of $7.5 million and $0.7 million within the Office and Lifestyle segments, respectively, during the three months ended March 31, 2020, and $0.1 million within the Office segment during the three months ended March 31, 2019 (refer to Note 10 for further information regarding the Company’s restructuring actions taken during the first quarter of 2020). |
Schedule of Changes in the Carrying Amount of Goodwill | The changes in the carrying amount of goodwill by reportable segment are as follows (in millions): Office Lifestyle Segment Total Balance as of December 31, 2019 $ 54.3 $ 277.8 $ 332.1 Foreign currency translation adjustment (0.6) (3.5) (4.1) Balance as of March 31, 2020 $ 53.7 $ 274.3 $ 328.0 |
REVENUE - Net Sales by Product
REVENUE - Net Sales by Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from External Customer [Line Items] | ||
Total Sales | $ 340 | $ 332.8 |
Office Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 216.4 | 202.2 |
Lifestyle Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 123.6 | 130.6 |
Office Systems | Office Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 100.9 | 106.3 |
Seating | Office Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 30.4 | 30.9 |
Files and Storage | Office Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 25.2 | 25.6 |
Ancillary | Office Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 49.3 | 25.5 |
Other | Office Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 10.6 | 13.9 |
Studio | Lifestyle Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | 96.3 | 101.6 |
Coverings | Lifestyle Segment | ||
Revenue from External Customer [Line Items] | ||
Total Sales | $ 27.3 | $ 29 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Customer deposits | $ 35.8 | $ 32.5 |
Revenue recognized | $ 19 | $ 19.8 |
REVENUE - Allowance for Doubtfu
REVENUE - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at December 31, 2019 | $ 4 | |
Accounts Receivable, Credit Loss Expense (Reversal) | 0.6 | |
Accounts Receivable, Credit Loss Expense, Other | 0.2 | |
Balance at March 31, 2020 | $ 4 | $ 4.8 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 58.1 | $ 58.7 |
Work-in-process | 8.4 | 8.1 |
Finished goods | 137.4 | 129.1 |
Inventories, net | $ 203.9 | $ 195.9 |
PENSION AND OTHER POST-EMPLOY_3
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Pension settlement charge | $ 0.7 | $ 0.2 |
Pension Benefits | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Interest cost | 1.5 | 2.5 |
Expected return on plan assets | (2.7) | (4) |
Amortization of prior service credit | 0 | 0 |
Recognized actuarial loss | 0.3 | 0.1 |
Pension settlement charge | 0.7 | 0.2 |
Net periodic benefit cost (credit) | (0.2) | (1.2) |
Other Benefits | ||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||
Interest cost | 0 | 0.1 |
Expected return on plan assets | 0 | 0 |
Amortization of prior service credit | 0 | (0.2) |
Recognized actuarial loss | 0 | 0 |
Pension settlement charge | 0 | 0 |
Net periodic benefit cost (credit) | $ 0 | $ (0.1) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Earn-Out Consideration - Fully | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum future payments under the agreement | $ 15 | |
Fair Value, Measurements, Recurring | Earn-Out Consideration - Fully | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration obligations | 2 | $ 2 |
Fair Value, Measurements, Recurring | Level 1 | Earn-Out Consideration - Fully | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration obligations | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Earn-Out Consideration - Fully | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration obligations | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Earn-Out Consideration - Fully | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration obligations | 2 | 2 |
Interest Rate Swap | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap | 12.8 | 6.6 |
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 | 12.8 | 6.6 |
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 ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivatives, Fair Value [Line Items] | |||
Contract rate | 2.63% | ||
Loss recognized in interest expense | $ 0.6 | ||
Loss expected to be reclassified in the next 12 months | 5.5 | ||
Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liabilities | 12.8 | $ 6.6 | |
Interest Rate Swap | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate notional amount | 250 | ||
Decrease in notional amount over time | 50 | ||
Interest Rate Swap | Designated as Hedging Instrument | Other current liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liabilities | 5.5 | 2.6 | |
Interest Rate Swap | Designated as Hedging Instrument | Other non-current liabilities | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liabilities | $ 7.3 | $ 4 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Customer deposits | $ 35.8 | $ 32.5 |
Accrued employee compensation | 19.2 | 37.4 |
Warranty | 10.1 | 10.1 |
Other | 45.5 | 40.3 |
Other current liabilities | $ 110.6 | $ 120.3 |
INDEBTEDNESS - Schedule of Long
INDEBTEDNESS - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Long-term debt | ||
Total long-term debt | $ 610.3 | $ 450.3 |
Less: Current maturities of long-term debt | 17 | 17.1 |
Less: Unamortized debt issuance costs | 4 | 4.3 |
Long-term debt, net | 589.3 | 428.9 |
Revolving credit facility | Revolving Credit Facility | ||
Long-term debt | ||
Total long-term debt | 304.5 | 138.5 |
U.S. term loans | ||
Long-term debt | ||
Total long-term debt | 225 | 228.1 |
Multi-currency term loans | ||
Long-term debt | ||
Total long-term debt | $ 80.8 | $ 83.7 |
INDEBTEDNESS - Schedule of Cred
INDEBTEDNESS - Schedule of Credit Facility (Details) - Credit Agreement - Revolving Credit Facility - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||
Commitments | $ 400,000,000 | $ 400,000,000 |
Outstanding Borrowings | 304,500,000 | 138,500,000 |
Letters of Credit Outstanding | 5,100,000 | 5,100,000 |
Borrowing Capacity | $ 90,400,000 | $ 256,400,000 |
INDEBTEDNESS - Narrative (Detai
INDEBTEDNESS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Long-term debt | |||
Borrowings under line of credit | $ 219.5 | $ 111 | |
Loan facility quarterly installment rate | 5.00% | ||
Credit Agreement | Credit Facility | Base rate | |||
Long-term debt | |||
Borrowings under line of credit | $ 15 | $ 10 | |
Basis spread on variable rate (as percent) | 3.75% | 5.25% | |
Credit Agreement | Credit Facility | LIBOR | |||
Long-term debt | |||
Borrowings under line of credit | $ 289.5 | $ 128.5 | |
Basis spread on variable rate (as percent) | 2.42% | 3.27% | |
Credit Agreement | Letter of Credit | |||
Long-term debt | |||
Interest rate | 1.50% | ||
Amended Credit Agreement | Term loan | |||
Long-term debt | |||
Interest rate | 2.49% | 3.30% | |
Amended Credit Agreement | Multi-currency term loans | |||
Long-term debt | |||
Interest rate | 1.50% | 1.50% |
CONTINGENT LIABILITIES AND CO_3
CONTINGENT LIABILITIES AND COMMITMENTS (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Changes in warranty accrual | ||
Balance, December 31, 2019 | $ 10.1 | |
Provision for warranty claims | 2 | $ 1.9 |
Warranty claims settled | (2) | |
Balance, March 31, 2020 | $ 10.1 |
RESTRUCTURING AND OTHER CHARGES
RESTRUCTURING AND OTHER CHARGES (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 31, 2020 | Dec. 31, 2019 | |
Restructuring charges | ||||
Restructuring cost expected | $ 18.2 | |||
Restructuring charges | $ 8.2 | |||
Restructuring reserve | 4.9 | |||
Assets held for sale | 11.1 | $ 0 | ||
Operating Expense | ||||
Restructuring charges | ||||
Restructuring charges | 7.6 | |||
Cost of Sales | ||||
Restructuring charges | ||||
Restructuring charges | 0.6 | |||
Office Segment | ||||
Restructuring charges | ||||
Restructuring charges | 7.5 | $ 0.1 | ||
Lifestyle Segment | ||||
Restructuring charges | ||||
Restructuring charges | 0.7 | |||
Severance and Retention | ||||
Restructuring charges | ||||
Restructuring cost expected | 7 | |||
Moving and Training Costs | ||||
Restructuring charges | ||||
Restructuring cost expected | 6 | |||
Facilities-Related Costs | ||||
Restructuring charges | ||||
Restructuring cost expected | 3.7 | |||
Equipment Write-offs | ||||
Restructuring charges | ||||
Restructuring cost expected | $ 1.5 | |||
Accelerated Depreciation, Equipment | Cost of Sales | ||||
Restructuring charges | ||||
Restructuring charges | $ 0.6 |
EQUITY - Schedule of Change in
EQUITY - Schedule of Change in Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | $ 386.5 | |
Net earnings | $ 10.9 | 18 |
Other comprehensive loss | $ (23.9) | (3.6) |
Stock-based compensation, net | 2.2 | |
Dividends declared | (7.5) | |
Purchase of common stock | (3) | |
Other | 0.2 | |
Ending Balance | $ 392.8 | |
Dividends declared (in dollars per share) | $ 0.17 | $ 0.15 |
Purchase of common stock, shares (in shares) | 154,012 | 141,738 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | $ 0.5 | $ 0.5 |
Ending Balance | 0.5 | 0.5 |
Additional Paid-In Capital | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 66.8 | 58.8 |
Stock-based compensation, net | 1.6 | 2.2 |
Purchase of common stock | (4) | (3) |
Other | 0.4 | |
Ending Balance | 64.4 | 58.4 |
Retained Earnings | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 429.7 | 395.4 |
Net earnings | 10.9 | 18 |
Dividends declared | (8.5) | (7.5) |
Ending Balance | 432.1 | 405.9 |
Accumulated Other Comprehensive Loss | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | (69.4) | (68.4) |
Other comprehensive loss | (23.9) | (3.6) |
Ending Balance | (93.3) | (72) |
Total Equity | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 427.6 | 386.3 |
Net earnings | 10.9 | 18 |
Other comprehensive loss | (23.9) | (3.6) |
Stock-based compensation, net | 1.6 | 2.2 |
Dividends declared | (8.5) | (7.5) |
Purchase of common stock | (4) | (3) |
Other | 0.4 | |
Ending Balance | $ 403.7 | 392.8 |
Noncontrolling Interest | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance | 0.2 | |
Other | (0.2) | |
Ending Balance | $ 0 |
EQUITY - Schedule of Change i_2
EQUITY - Schedule of Change in Number of Shares of Common Stock Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Shares outstanding, beginning of period (in shares) | 48,879,000 | 48,706,000 |
Shares issued under stock incentive plan, net of awards surrendered to pay applicable taxes (in shares) | 184,000 | 139,000 |
Shares outstanding, end of period (in shares) | 49,063,000 | 48,845,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Summary of Changes by Component (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Other comprehensive loss before reclassifications | $ (30) |
Amounts reclassified from AOCL | 1.6 |
Net current-period other comprehensive loss before income tax | (28.4) |
Income tax benefit | 4.5 |
Other comprehensive loss | (23.9) |
Unrealized gains (losses) on Interest Rate Swaps | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (4.8) |
Other comprehensive loss before reclassifications | (6.8) |
Amounts reclassified from AOCL | 0.6 |
Net current-period other comprehensive loss before income tax | (6.2) |
Income tax benefit | 1.6 |
Other comprehensive loss | (4.6) |
Ending Balance | (9.4) |
Foreign Currency Translation Adjustment | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (15.6) |
Other comprehensive loss before reclassifications | (9.3) |
Amounts reclassified from AOCL | 0 |
Net current-period other comprehensive loss before income tax | (9.3) |
Income tax benefit | 0 |
Other comprehensive loss | (9.3) |
Ending Balance | (24.9) |
Foreign Currency Translation Adjustment on Long-term Intercompany Notes | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (13) |
Other comprehensive loss before reclassifications | (1.6) |
Amounts reclassified from AOCL | 0 |
Net current-period other comprehensive loss before income tax | (1.6) |
Income tax benefit | 0 |
Other comprehensive loss | (1.6) |
Ending Balance | (14.6) |
Pension and Other Post-Employment Liability Adjustment | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (36) |
Other comprehensive loss before reclassifications | (12.3) |
Amounts reclassified from AOCL | 1 |
Net current-period other comprehensive loss before income tax | (11.3) |
Income tax benefit | 2.9 |
Other comprehensive loss | (8.4) |
Ending Balance | (44.4) |
Total | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (69.4) |
Ending Balance | $ (93.3) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other income, net | $ 1.2 | $ 0.7 |
Pension settlement charges | 0.7 | 0.2 |
Income before income tax expense | 7 | 24.5 |
Tax expense | (3.9) | 6.5 |
Net earnings | 10.9 | 18 |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Prior Service Credits | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other income, net | 0 | (0.2) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Actuarial Losses | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other income, net | (0.3) | (0.1) |
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment, Pension Settlement Charge | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Pension settlement charges | 0.7 | 0.2 |
Reclassification out of Accumulated Other Comprehensive Income | Pension and Other Post-Employment Liability Adjustment | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income tax expense | 1 | 0.1 |
Tax expense | 0.2 | 0 |
Net earnings | $ 0.8 | $ 0.1 |
ACCUMULATED OTHER COMPREHENSI_5
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Summary of Unrealized Gains (Losses) on Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment Out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Tax benefit | $ 3.9 | $ (6.5) |
Net of tax | (4.6) | (1.5) |
Interest Rate Contract | ||
Reclassification Adjustment Out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Unrealized gain (loss) on derivative instruments | (6.8) | (2.1) |
Loss on derivatives reclassified into income | 0.6 | 0.1 |
Total before tax | (6.2) | (2) |
Tax benefit | 1.6 | 0.5 |
Net of tax | $ (4.6) | $ (1.5) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net earnings | $ 10.9 | $ 18 |
Denominator: (shares in thousands) | ||
Denominator for basic earnings per share - weighted-average shares (in shares) | 48,973,000 | 48,775,000 |
Potentially dilutive shares resulting from stock plans (in shares) | 735,000 | 415,000 |
Denominator for diluted earnings per share - weighted-average shares (in shares) | 49,708,000 | 49,190,000 |
Anti-dilutive equity awards not included in weighted-average common shares—diluted (in shares) | 110,000 | 110,000 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 0.22 | $ 0.37 |
Diluted (in dollars per share) | $ 0.22 | $ 0.37 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (54.60%) | 26.60% |
SEGMENT INFORMATION - Segment I
SEGMENT INFORMATION - Segment Information with Corporate Costs Excluded (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Financial information of segments | ||
Number of reportable segments | segment | 2 | |
SALES | $ 340 | $ 332.8 |
OPERATING PROFIT | 11.4 | 29.2 |
Restructuring charges | 8.2 | |
Operating Segments | ||
Financial information of segments | ||
SALES | 340 | 332.8 |
INTERSEGMENT SALES | 2.6 | 2.9 |
Corporate | ||
Financial information of segments | ||
OPERATING PROFIT | (6.1) | (5.6) |
Office | ||
Financial information of segments | ||
SALES | 216.4 | 202.2 |
Restructuring charges | 7.5 | 0.1 |
Office | Operating Segments | ||
Financial information of segments | ||
SALES | 216.4 | 202.2 |
INTERSEGMENT SALES | 0.3 | 0.4 |
OPERATING PROFIT | 3.9 | 14.1 |
Lifestyle | ||
Financial information of segments | ||
SALES | 123.6 | 130.6 |
Restructuring charges | 0.7 | |
Lifestyle | Operating Segments | ||
Financial information of segments | ||
SALES | 123.6 | 130.6 |
INTERSEGMENT SALES | 2.3 | 2.5 |
OPERATING PROFIT | $ 13.6 | $ 20.7 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 332.1 |
Foreign currency translation adjustment | (4.1) |
Balance at end of period | 328 |
Office Segment | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 54.3 |
Foreign currency translation adjustment | (0.6) |
Balance at end of period | 53.7 |
Lifestyle Segment | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 277.8 |
Foreign currency translation adjustment | (3.5) |
Balance at end of period | $ 274.3 |