MLHR - Earnings call transcript Q1 2022

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Operator

Good evening and welcome to Herman Miller's First Quarter Earnings Conference Call.

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Antonella Pilo, Vice President of Investor Relations and FP&A.

You may begin.

Antonella Pilo

Good morning.

Propst, our Officer; earnings Officer; and Jeff President Contract; on Owen, are John Kevin today Chris America Executive Retail; President, Chief Stutz, Debbie Veltman, me Senior first President Integration call quarter Andi Michael, Baldwin, Vice Joining Group Global Lead. MillerKnoll; President Chief Financial

the Wherever we posted presented within on are the our release. have We non-GAAP figures the press release have and Investor Relations non-GAAP basis, any on press website reconciled GAAP at hermanmiller.com. a amounts

Before I remind for include the this I to brief a Andi will turn it would over overview of forward-looking call everyone quarter, statements. to like that

well update For based or conclusion result no scheduled Any on actual we a over these date, Andi. statements, as for results call and obligation are information quarterly as we is prepared our XX these forward-looking cause Q&A of this make the events. forward-looking today and that please from future have session. remarks, on we could to refer statements differ Today's With the as earnings I'll to that our assumptions SEC factors annual filings. call undertake of turn a statements materially to to as release that, will information At minutes. new of the press

Andrea Owen

my Antonella. know guys home that and clearly my And son family. you today Thanks, I am with at

This this MillerKnoll, we're name is doing today the day. first seeking Miller Inc. to our my Good change in to we and you exciting our business MillerKnoll for year's world. MillerKnoll joining evening very an to discussing meeting welcome the us. is finalized as thank Herman are So annual results and of shareholder our approval and at We officially with quarter time. first Knoll acquisition for

strong over through orders financial momentum the will overall, the demand greater positive call take results wanted we're detail, of This you including few underscores and as about a remarks the every our with the to turn our of reporting QX and then behind positive integration. around started our as demand I segment and our globe. to indicator fundamentals, Jeff We business changes confidence year Jeff, to strategy share business an I well across progress strength before So making in the the is really it in the our our of our order business. grew future. segments.

and growth store are digital to teams retail new driving progress segments. across our and of Both gaming, Our our the grow. we're against customers world and initiatives openings, contract like strategic studio and continue all with and brands executing our priorities. And around bringing growing businesses our to presence

of plans, integration, world, of we're portfolio delivering after the our timeline and have With diversified of businesses, track both that achieve deal. in global our and a now MillerKnoll and to is broader companies enhanced redefine the design strength scale and design most brands, positioned positioned As capabilities and and beautiful one create in industry. to influential imagine MillerKnoll, largest transform the financial operational modern complementary uniquely discipline. our executing well demonstrated cost two the the of within the $XXX close solutions They're extraordinary Since they're our the our days endure design inspire. years million teams synergies for against early and on to of

portfolio industry contract to order our capabilities update grow wanted have there's to work of of networks is to And together while enable our dealers share in still In One lot bringing with a to our areas do, made leading we've progress the MillerKnoll and focus you. Americas. two our our we’ll to sole contracts the customers. a of to key leading integration I the bring business, brief for product the and considerable of dealer

our of dealer a of key to MillerKnoll of was specific sell deal to of giving all be each we'll benefits which better dealers opportunity them portfolio, a access more have needs to driver meet our of So the the power the strategy network positioned our to the and also collective full brands. of create This represent by customer. and full the

MillerKnoll pilots and optimal the the principles footprint and product focused So right based the cases, for each Clearly, the while had also dealer distribution to network model we’ll markets requires will markets the the we're market will as and strategy combined This optimal on the network this MillerKnoll determine not dealer time, new all for as growth. customers to product portfolio same incredible The the of all those terms creating strategy more now. work a than first to partners. for one. the by finalizing developing amazing unique either for each that dealer as our by in one processes more giving choice own, size network the us time, our our enable market the of and to the the MillerKnoll network use in is of footprint international its presents broadest on possible. dealers. Bringing dynamics our in the We've Americas, both At in instead fits customers established network portfolio bring is each with key opportunities well opportunities performing products MillerKnoll our dealers unleashes these soon have highest many we’re access to market benefits portfolio work we to determine industry. approach dealers of the for on

fiscal organizations world each know capture Watching together remainder much our way, designing there's teams us more together in planned our meant is that bringing best even to integration tremendous our of future for identify distributing truly opportunity And inspiring. we that now us. And path be these priority the on felt of we're to like feel while two the Before was this based as all and come and so will strongly to to be. we timeline, incredible along, from continue destiny. on the organization our around the said we a our shared year. At the top ahead for

commentary to we questions. to open a that, about Jeff, I'll for more before bit So turn give up it results over it the with

Jeffrey Stutz

thanks, are about our been start the I'll seconding our this and has watch exceeding teams comments integration. work It unfold inspiring really Great, expectations. Andi. your by to

Given their efforts, we're confident in our deliver ability synergy to targets. our on

we a reporting now reminder changed quick acquisition is results As discuss today, have complete. that segments that our the

business the the America Within results Design Retail North business; combined segments America the four America will we our segments; North legacy business; Global issued Americas; contract which which legacy as information MillerKnoll be your Contract segment, reflected reporting Retail, and reflects in Retail reflects and your analysis. International historical reflects which now Form assist that on provides segment. and standalone revised As Contract, Contract Reach today, modeling International we initially business includes you the under Contract, be will outside Earlier Americas these and segment with Latin to X-K a a the business based Knoll, acquired definitions Knoll as

to net from up increase sales year, on numbers, organically. the an approximately were million same of consolidated XX% $XXX.X of So X.X% the last which quarter is

that year. year-over-year related manufacturing shutdowns the a we're COVID backlog in retail mind last challenging to keep and studio due from comparison Now facing elevated

our supply our chain that to the quarter Additionally, ability impacted orders ship is by facing. industry disruptions this was

XX% share of also in the the business also items. shipments mix related going operating as and year. up be saw Americas in compared are considers earnings we a near-term commodity the leverage mentioned, loss share mix of second To the operating funnel Similar margin all the channel year new these of help elevated year a quarter, a respectively for to And last in XX% quarter last $X.XX impacted was share quarter, XX% we pressures. was both additional and as what a The While at temporary consistent Global higher we from through spending period prior to associated $X.XX Retail this backlog XX% year X.X%, over pandemic. reductions, North operating working we to positive period growth moderate the with sure, Residential the XX.X% last first in of year Adjusted in demand favorable were saw implemented net impact the up additional saw have Contract and what non-comparable in was Adjusted this per the quarter pressures business, also or planned quarter We shares price Knoll's COVID-XX. projects Americas per we compared saw another beginning the and sales, a navigate ago. other in over last from with to increases increase inflationary in quarter in XX%. Europe. XX% by compared a to reflected due per impact margin for last to in to order share managing This was forward. in and expect for XX% reported by first we segments. backlog indicators business $X.XX, America time, to as pressures. higher with put strong Orders XX% diluted year place per was strong of over Adjusted We've and organically. had orders cost inflationary to up momentum challenges and prior strong orders of the $X.XX the do and includes as up margin address earnings actively issued prior addressed seen this was International $X.XX can activity, the to same prior with year of year segment of the year. business our year. costs orders channel the reductions the control favorable increase compared the are well QX net to elevated retail XX.X%, the quarter were offset gross pressures. leading across Andi these The Workplace order outlook period. Knoll's and

our the second impact the the full to ahead for quarter. guidance Knoll includes quarter, of Looking

adjusted taking we We be environment look and expect strong as between that traction us $X.XX the actions and share and the strategic billion we're range currently positions $X.XXX between This per initiatives well pressures. inflationary help considers and we near-term sales supply to $X.XXX in and mitigate and forward. earnings a environment from demand The chain quarter to billion are guidance these $X.XX. to experiencing our second

back the your take over turn opening comments, to those it operator with questions. we'll and I'll So

Operator

you. line Company. Instructions] comes Thank Sidoti with the Our of from Burns Greg [Operator first & question

Greg Burns

the cost what's the terms of that the price So just, given inflationary first, sight of price the cadence of pressure. of you've amount instituted? was And increases kind of What gap on closing quarter? line this the in your

Jeffrey Stutz

Is question. and take because basis unpack in helpful, actually So I impact a me that the year-over-year the crux of of a give maybe your help way? point kind step back might for that you let term, sense this if it do really

Greg Burns

great. Yes, Yes. that’s

Jeffrey Stutz

Yes.

last from components, of the doubt, steel, was without total as we felt there and factor, -- eroding across to the inflation about gross inflation came so basket margin which three pressure commodity probably impacts one -- gross we every commodities you. points tune XXX year. But margins material a saw kind The big basis in inflationary almost surprise of of So category. the compared a the form of to big doesn't in

But business. overhead the in The that estimate delivery segments and component XX terms us then in -- out, is was is labor freight hear talk total of the early labor, us the and from and may basis related on you the and XX a really affected basis in a estimate it been point the last late We've labor labor would charges. as about about as quarter negatively delivery, year-on-year. direct impact freight second quarter bucket, of we I points, total in than we And as well we us impacted that inflationary point about one by this more impact. did more is

those Hopefully the the that components. you're gives three color are So looking for. you

Greg Burns

like that line in Yes. closing gap? maybe back of of this, sight your getting But what's cost neutral some to price terms on like and getting

Jeffrey Stutz

Okay.

And -- And time on in side is, the some so roll and the you would Knoll the the in my additional I margin. tell So -- it a layer current what there conversations levels, Herman back what as of at know, is upcoming. to themselves takes that's remarks, that November, commodity MillerKnoll October are business in and would May. June. business Herman price tell the business, whether legacy contract implemented for Miller been be mentioned increases prepared going I those side into we to announced I believe, of have having you in are gross enough. did here's I one, about already And you increase we in The

in tell discussion having start leave you from but increases. benefit from internally. again, of elevated business talking seeing but it months, the increases, I really after that's we And that, on feel about the expect, that after past, looking a incremental start those be seen year or -- I of just as it when would levels, that, some at contract side our that, would first reflects So and impacts the the price the of current these some do big mainly the big I'm three we the at the guide start to I'll we're have we you calendar benefits that. will you

of more can pricing we time. on the business. business that's bit a And retail the different, Now, little real is do retail right,

those at that well. have actually of -- And some looked and and and have implemented so as team Debbie

Greg Burns

Okay. million headwind that Are a you order guess quarter. level that type then supply the chain? the due of implied issues, on chain Is next in $XX supply quarter there's to still of this what's And I guidance? expecting delays

Jeffrey Stutz

In we second certainly in anticipate least, terms, don't anytime abating yes, quarter. not soon. These going Greg. are to At general abate the those

to maybe for would magnitude, because business X.X that, a say going more Knoll than I of even additional up weeks. bit order the we're an So pick

fair So say a I assumption. that's would

Greg Burns

covered the or seen highest I then is the core for it’s strong, the if I've Okay. since record numbers demand, a And company. know I were the don't the I've don't think order but really business number, I remember. XXX XXX

of patterns have seen, forward are obviously that given orders we've Can the you very you pull seen the the the And increases orders, you have talked what this early and -- in part into order he's about number quarter, cadence just seen been strong. throughout do of of quarter? So the kind instituted? any think the price of

Jeffrey Stutz

ahead news around business start they're I'll one terms think specific and of -- have quarter, in the were not impact. seeing take this segments don't then maybe positive what And I'll they in that strong out surprisingly, quarter all lead quarter. not as the perspective, not the organic the you month of first strong numbers we the gate. had the some pull I an of of is, quite Greg, chime fact, commentary in much in So a month I comment. if low would across say picked the it we June, cadence can the started quarter, every in were a been We bit The of in total, -- anticipate a when of unit business July. see June it has in in strong in, ahead into started pull strong. Americas good a they of ended, positive the from little as pretty there the From general quarter every as double-digits, the quite orders, of but maybe right segment up

good you pretty each to the of the And I of your want And don't if business on segments. some with know, the that's quarter -- ended on color balance question. thoughts some this John, we momentum. across give So true

John Michael

pull I From Sure. agree. Jeff. don't saw you. Thank we perspective, ahead would think that really I any. a

really point we've through fairly steady first I June, to little order that pattern work maybe back of up the far. was in part think August at bit then up seen demand, think of And ramping I to time. and so return work, in QX, and pent a cadence as

seen So that's what we've to-date.

Operator

comes Our line Rudy with Berenberg. Yang question the of next from

Rudy Yang

opportunities. some just those kind coming $XXX supply be on and won't back are you you believe So timeline first your issues of to run synergies from synergies to still and why cost to years, achieve procurement I'm to million that affecting in supply your curious how as your that remain that chain with realize ability thoughts synergies still current get stated you of all? rate off, at confident pushed these realize chain able two you'll

Andrea Owen

a it's we're We've supply a Andi, is round and lot and one think very, This these to and it. a thorough work done in issues at lot on and we this are intense not take of going point very time, great chain of certainly procurement a question.

years we see supply got and We of both have scale to from base. reach couple a our these, opportunity and in get

price long-term it, month we've difficult confident do target. a bit So, confident feeling there. it's have us just very period, at to operational looked continue think the and doesn't point environment, have is we'll at more Veltman of we environment looking and we become, around integration can and in I into the in XX creativity situations. the Greg achieve it's some more chain history discipline and moving Kevin would supply we a looking But little the a And in asked and and it these in cost of and those that efficiency what questions we the But from lead. of to our apply a that things, general, a deter

anything synergies? to So around there is confidence you add would that Kevin,

Kevin Veltman

I we levers over value working -- deal, each planning. going plans with team the would that been capture deep as of where we really integration and think really we've in business add on -- about to And the are. solidify might you Yes. those imagine Rudy unit the since each announced since that’s

$XXX about. And feel of XX% we actually and sold we from we goods be XX% similar to feel SG&A expect the we initially we've about thought will so, and of And will the that side. mix that -- million cost pretty it more two come years what the reaffirm that come about confident to within delivering from talked

Rudy Yang

a started guess integrate is mentioned more you provide bit of that kind and dealer any channels put guys expected dis-synergies any little And you action? That's how can to the helpful. you there the now you on plan -- how expect I Great. detail this mitigate to then of you you secondly, together. kind started about into

Andrea Owen

deal as dis-synergies. of primarily the course, don't do on we that, in of the Rudy, those. certainly to our the come a Michael dealer plan. you planned did whole from you’re little a on We But elaborate they'll put Americas, in And network? But where set Yes. did in we at since this just model, want we know point John bit

John Michael

Sure. you. Andi, thank

from of terms last both couple we We've the things over customers as influencers, in of done. dis-synergies, and more a some taking think of surveyed XX I one, the days. customers XXX we've than that Number as well direction dealers. mitigating are

our specifiers, had and into dealer councils have And We is, are in-depth make and think we into and providing and MillerKnoll of conversations with network, I Knoll to leaned overall our that hearing we've be mindset are and we're responding power can appropriately. aligned what that to we're that so of attitude concerns proposition what we issues got dealer value be. sure the Herman they really the to we've both the that sure a leaning are Miller understand

with And is responding good so, mitigating I being dis-synergies. and then think, the and through working key listeners and them, working issues the to together

Rudy Yang

me. Got from one it. last And then

expected your is change is timeline guess You X.Xx about there and net leverage synergies going ratio, your that? be said ratio target towards including any right for to delevering is now. what your to I

Jeffrey Stutz

deal. can delever at forward given we of to managing one level are we flow. But close no this point Rudy, facing of throwing that we're Certainly and are this year And the pressures believe that is -- we resulting the Jeff. target the is on us continue super cash the off focused nothing we that. impact margin costs, No, the change. to on from

Operator

the Thompson from comes of Research. Steven with question Ramsey line next Our

Steven Ramsey

my you you this. to growth? Knoll, want can include can that just organic me? that growth, did the Herman organic Maybe understanding organic or of talk I about Miller for XX% Knoll's clarify for guess, on I clarify growth The

Andi Owen

do Jeff, can start you maybe it Hey, one? Chris? Then to want over turn with that we to

Jeffrey Stutz

a had -- what I growth. to is Steven, what make this order earlier do sure Yes. question? revenue was I guess maybe alluded -- I I want to so are is growth you am

Steven Ramsey

I'm order That’s growth, sorry. yes. No.

Jeffrey Stutz

question. your growth just this question? -- year-over-year sure you So answering year-over-year order to make -- again, I'm Are is I want a

Steven Ramsey

feel organic organic Yes. growth. I'm Herman get Miller's trying and for Correct. Knoll's to a growth

Jeffrey Stutz

Yes.

-- stab at So let take me a this maybe I'll it way.

for year-on-year legacy had of the quarter, mind, So Knoll, look segments. if partial the Miller the business, order consolidated Herman of the we XX% legacy full with just at now Miller Herman for growth quarter. in order side Knoll the the bear components was three a on you across

growth entirety So was into of I basis, that same pro Does on think for the if the count just QX Knoll period of I of forma order the a compare the in you -- weeks about you we back had consolidated X.X for But order and that help? period was Knoll if order XX%. and growth look that the group, prior XX%. on the the year, to think time that

Steven Ramsey

does, That yes.

this see to time? how over investments do think hopefully timeframe evolving margins do moderates elevated you clarifying. XX growth what inflation Okay. I inflation Global think to margin of And a over think XX the long months impacts as the retail of levels right Retail for about I on for for level Thank wanted and you that of do expect with guess over on guess you to you margins. how how fair now? then and minute that evolving? next investments I I guess, a going as

Debbie Propst

Hi, This Steven, thanks for Debbie. the is question.

quarter margin at in for XX.X. the XX.X and year our came the Global business rate in versus last is So Retail

product in increases the costs, increases last already spoke multiple that content increases, and benefits. material with selling our as are margin by that which mix, an freight And to. new margin impacting raw labor elements and and category that making were is then variable we're last Shipping perspective, it OpEx driven most of over And know, year in mix our and was so for XX The infrastructure to the a to for today. our model business the support we're as and business running this we this investments built and months to this a next experience. support that infrastructure we do it model. our category but so by moved running associated occupancy the continues will on from an business order, enhance to impacts we is year From a different needed business marginal model, customer the a and with costs driven much showroom-driven One actually you business both way we're very way that degradation continue piece rectify increases robust and as dynamic that OpEx trend. omni-brand, was of more stores, XX to infrastructure analog scalable Jeff in in very to omni-channel in

continuing the So to operating investments And make to to in making these XX said we'll we be release, those we to while over as income next low- months. investments. see the XX our mid-teens expect we're in

Andrea Owen

the high-teens XX And that, XX obviously mid- And margin to things making, In much from Debbie’s point, Steven, the part business of term, a see we're where a long this months. Debbie. us To an go to -- shorter the to normalizing just is run, investments we that add ahead, to those see continue. operating in standpoint. on we

Sorry.

Steven Ramsey

that, very saying just didn't I for cut super that's does you. And was I no. me. Thank off. that's helpful. But you it No, helpful. that mean to

Operator

comes Reuben Benchmark. question next line Our from of with Garner the

Reuben Garner

it dealers, it's a going and too and with us made is the have maybe obviously, And Herman is of or with work that this decision -- to you So that dealers the to is a communicated you But both are Herman multiple sell sell period how's is by to can't to if now mentioned you're to tell does market Miller single clarification, choices market Knoll I the mean, Is that to they Miller you and like? Knoll just off, product and think how going I everything? to and for this dealers going strategy early going going look yet. the to Knoll, Herman start from Knoll or Knoll. answer Andi, a What what to Miller access to how Miller in go-to-market tell Herman time? going haven't be

Andrea Owen

all yes. the of to Reuben, excellent These is are all answer questions, them and

have will one all dealer all we dealer and of every So network, Miller sell of will Knoll. and

interviews to Michael all of networks, So the of can with our looked they don't. And dealer extensive working determine customers, a exhaustive market network and will the is done Part to as how with there a that is in entire assortment. as determine the to our spoke offer John as we which land both but markets we’ve basis every on be to market-by-market we approach a that the sure have size that support have very a been thoughtful. lengthy market? have you're we've bringing them well dealers very number to what's that tailored we with And make dealers, which right And, we be so earlier, work our together And John closer many the right Michael, portfolio. markets much of at to to dealers, this. taken process basically and

add. to like would you what know don’t I So

John Michael

I said, Andi. was think well that

just question to collective network pre had a by mentioned markets Herman you at what Andi Knoll them. MillerKnoll approach both multiple and right? of the brands, and think in One -- market Reuben clarify We deal selling tailored -- Miller dealers in your so market. multiple of the said, the the full to and reaffirm then I start it, with really dealers the

So any that's sure not all and a it's way. to that beneficial situations for involved. parties make in new we the phenomenon navigate And how those know

all set going trained through are the so also only the all now. in involved represent the process well dealer in footprint fully a And we're number the they tools need brands up but to that not initiatives, on ready then of infrastructure the establish very to and that different have and obviously actively right they So working that marketplace.

Reuben Garner

Okay.

if entire MillerKnoll there today they one be dealers, suite to in furniture buy from either your if from products -- I able buy would to Herman just going clear, the so office And products? or to a legacy Miller’s Knoll was of dealers, both, of be company

John Michael

all quite yes, flow to The then, be beta that XXXX what by you and said, all working we're in we're intent mechanics middle test able be represent will place. now, pieces that our all yet. -- the dealer to be where will is each we'll those And how the on the Not of do will a in situation right brands. able of

Andrea Owen

good the of this, you news but Rueben, from multiple all know there, today. manufacturers And and sell our things dealers

how as for So, and at not can leadership Really new we up this us get portfolios, team manufacturers on want their that both to a now focus quickly say, a we house of with of how quickly we is as our possible. ordering and speed back product provide right training my enable from priority as variety the to dealer can so on a we I look for and after from one the this them get right number them standpoint, I can. thing them. designers salespeople is And think, is

Reuben Garner

Understood. Helpful. you. Thank

chain, think, least MillerKnoll chain from still here the On supply altogether be up And there the so the that implies going is nice of is sounds to back a across on the headwind. current pretty envelope I at quarter ramp next line. there like to in business quarter, supply your it top

not can't you like end if to quarter million you And guess the and of your the million with right Knoll understand me $X full materials billion? from help guys on go you the capacity it to if million a to do Is get maybe $XXX have $XXX to million higher how tough trucks need on say, in that, revenue, time of sequentially. and revenue, number -- has of any and time. $XXX do at you you can up So, to to Knoll, an not on it's you that north incorporated for something a $XXX constraints that's you go to what it simply need was I happen inability just

Jeffrey Stutz

Well, is Reuben, Jeff. this

me mind, we past side. as other results this on weeks, point. we're well sure consolidated million moving basis Knoll each full of in where our we for make from to Let entry not consolidated order orders Bear of legacy as weeks, XX on just took side just talking X.X the on Knoll had weeks the So, in right? X.X Miller a over we're $XXX a

Knoll more weeks going having X.X QX, virtue fact QX the of up just apples-to-apples, more not to end of volume by So, you're the to activity. got you've is lot that right, a because

let me... So,

Reuben Garner

trying was of side. got to revenue or have million shipments I how you of constraints guessing I just now might've quarter, and million next don't have something for quarter, I'm you've $XXX comes million, incremental $XXX revenue another of the in material had. go to the quarter that capacity the where to over from see that from Knoll referencing I'm you weeks quarter. you north this been X.X might whole to, if quarter next capacity layer Jeff, $XXX Yes. trying was your had it's this from, maybe go $X to and the you on Knoll billion

Jeffrey Stutz

Yes.

We have not immediately going are Those away. capacity constraints.

team have work a of a have look, great Now, done our they mitigating operations -- pressure. the lot

will, moving we our needle our true with still dealing in the internationally. to ability And But them. domestic improve they're operations. in are It's if So, of also U.S. you terms that's throughput. true

-- a a some India. the revenue. activity COVID-related we it was business had the and in I'll One out market, on in factors of one Contract the of International actually was limited within that is revenue, those particular throughput our right, key closures drag And that things that, point

So all a guide. up going there's ramp a see in ability things in in here. to producing We our think we're to QX, ship and in do reflected number or activity of the that's

Andrea Owen

challenges our say like progress going But little there, than this we're see starting bit to because more would with really go strong a backlog material starting say remember, to are and see And a into not of to also and -- are going down quarter I there. macroeconomically. labor and really can I'm of are a they we that’s availability not we Yes. constrained labor

answer So to helps that. if that

Reuben Garner

question going does. so is company was to current And either am will one -- consolidation? -- last standalone sneak constraints behind And standalone me some been footprint already The curve it a any Does are in was the from you made. I either happening footprint in. the moves those actions that maybe outlook the guess, rethought have the of been any a or related -- perspective. wrong, was I'm -- more I on me maybe on. correct having there think environment for maybe Knoll when it change it Yes, if integration already have you're demand that and but and I on But the -- those have consolidation

Chris Baldwin

speak Hey, on Knoll Chris the Reuben, Baldwin just side. it’s to

the happened. is is, already already of your question answer the on side? consolidation did part think the I That's And So Knoll occur yes.

are which went the So obviously, facility, chain issues our general. down capability that already from impact cost standpoint supply from and notwithstanding production has been more a great that also to that, no

fresh to work, that, the a current place, to comes really and achieve no is that then then around that's things when And million already plans really to there's to It's X talked facility. $XXX So and our look, anything talked hold, need the that it in put Kevin about close by this years. like but Kevin work no procurement that's complete. on integration taken there's about

Operator

question comes Capital. Alex the Craig-Hallum Our from with next Fuhrman line of

Alex Fuhrman

a And rightfully Knoll opening question year wanted segment the integration there's way, have call there's you going curious, flagship to to your down? Retail segments, been for the XX%. the Can we've forward? how opportunity stores Thanks ahead? if Obviously, reportable I'm talk seating looks my moving the as congratulations on and And from of its Miller than more depth an new the about brand away your Global more stores performing new in and here. strategy sales been business on the very initial continue is much on this about as locked farther But corporate I under think you about ask lot Herman presumably last for it taking your the specifically, years of so. to retail been and the XX% like your now business. with of conversation

Andi Owen

our has would turn but our of this to bearing going strategy over I'm to fruit. Now been retail Retail, Debbie, say President I

were very work hybrid wider ergonomic business, folks that environment of the that variety healthy knew we direct-to-consumer a with sweet think a thought to and to I deliver thoughtful one is spots our ability our seating we and of in that about how we our we see.

Our the think retail will brands very growth from Debbie be. and differently continuation amazing eyes also a successful that her I are Herman business the the the retail think enable globe really business we an Miller us beginning is and in we our seating at around really business. stores grow could of our on have see having and just it I different what umbrella. leader very, of perspective and retail looking that retail we that a been the to with experienced growth have at underneath

strategy. need quick a on to for you I it over the word to Debbie, turn So

Debbie Propst

Thanks Andi.

of of been profitability one that to the So up to foremost, omni-channel priority type an are element impressed our way wall, a number channel improving first locations that show through continually obviously up optimizing I'd in. for Within customers benefit existing we're seeing quarter-on-quarter that. is, and and performance is growth brands in that, with with our a we we've portfolio those assortment has we've strategies each, Miller, investment the And of primary our our legacy within growth around four-wall the Reach, seating have the been retail our we've being we've of running a addition a by levers some from units journeys, wants into consistent customer us expansion to from open with of our whichever growth. ensuring omni-channel bulk of say footprint. where the to get been our doing different within lever been Herman And in for been that and has been so format customer brands, in the touchpoints standpoint, brands, awareness non-comp with stores substantially Within engage driving driving small strategy by example, smaller critical expansion, experience Design retail

more. So two additional since opened within opened three ended, And locations we we've QX. QX

brand to the And for pace its with resource to home North the at then can now is fiscal and strategies rate additional focusing that we're So in younger, and a decorating. awareness the of perspective that ready America so balance and a well openings on we a obviously, year. dependable total continue assortment HAY similar from is goal in we're be there for a XX, of

Operator

have the follow-up We of a Greg from Burns. line

Greg Burns

from the demand think office, around home office, then accretion home some on follow-up quarter, is Thanks. does seeing work commentary this are that of seating. change reopening to you and could saw the of about, just growth we how prior what we just that on secondly, kind forward? going And for the around reopening, change? at touch the Knoll that home, So are from offices expect you you home Now levels offices all? seating When should

Andrea Owen

and Jeff Debbie, why then don't the second? you first part take the

Debbie Propst

retail Well, over channels double-digit happy I'm I'm that our grow this in category despite say the to year, last Absolutely. -- time workspace to continues last very comps year.

is return pretty benefits. one overall product, product that So sort of emerge. it and the it's to starting your are a strategy And health balance, the wellness resilient of to and trends proving pandemic this driving the to be to elements is I think a life office that's work positioning that that improves

category, can trends. pandemic position way positioned which is drive been traditionally in in beyond that not product the this has that the if product momentum so the way, allows that And we us to

Andrea Owen

scratched can't our And have has been which in, our [$XXX Jeff, is just you before seating you, billion] we bring a that growth have sorry, successful. also see you toy well -- with there. which phenomenally just around we we'll Greg. that to And think that’s surface, business, also our I remember continue think innovation forget part of to I category, market just remind the gaming to business,

also So, that question? just it of is sorry, variety work-from-home, it category beyond multidimensional uses. a is the encompasses a other a Jeff, Knoll

Jeffrey Stutz

commentary. no. Yes, Good

accretion. Greg, So on question your the

What factor we would the to bear a full can quarter So, with you the to out EPS caution gates see a the is, the quarter drag going of the some a in partial imagine, didn't weighted of the in in counts acquisition. run. debt see drag and count. would average mind, quarters, reflect right share of you -- borrowing higher be I slight were to close to we per from the maybe of impact expect I accretion on pleased share neutral, course the in coming you're to earnings short share integration when Knoll that costs

full basis, acquisition cash basis on from adjusting with that a that, think believers announcement a be for year amortization, be point view, date, the to after GAAP accretive after of on was the we meaning years. and related continue can which deal We our one two stick the

that. and my expectation, So, continued that's stick I'd with

Greg Burns

businesses kind of and your out more plans. any like that, orders, around terms their discussed bit forward-looking of mark-ups a some to one competitors and one we they Okay. pushed little the lot seen of Delta things areas. things getting those seen that. pushing other cautious a of you've office of but seeing slowdown pipeline in you And in out. doesn't of terms sound some more slowdown -- of did of a were like of like then just We've headlines to It return due metrics -- did some comments of And have in

with you So, any conversations can And you just having seen are with impact have talk generally, to customers? you of COVID the just that?

Andrea Owen

years, I think John the a let in not unusual an would on I'll our Chris been weigh this. COVID are push little I bit the thing couple But has of in business. And world. of say, and and projects overall, pushing in across pull last

as things but quarters seen from well. we things seen this some into push push, some quarter we've So, have

masks, Greg together that year we're and demand I not did a that's big increasing us And about have bringing more than people seeing and are last lot thinking the ways. the for and environment, this really, really point in really people because is confidence cancellations, about vaccines ultimately, think differently encouraging. is So different with they people their

are we're as So, that. Delta and Certainly, we encouraged. canary mine, the not throws really but will seen a coal for have look curveball and cancellations we to, us what in continue the

So, John add would to that? you Michael, anything

John Michael

January say the we of in some would pushed and were that to terms return January dates that have going March. perhaps say to say to October, with of in some have pushed clients that, September, original working I just were

and the going think how the as -- last that's So, is, think been there a that months uncertainty, are if time thing days, XX have of but to the months. other was And there was XX and I navigate this back we as lot about evolved pushes customers out have to market, to uncertainty COVID figured about, that you and the and year, with there not and is need in that office, around really we're a destination understand and all customers right? And uncertainty that. anymore, what's no and our and with the employees. importance that, acknowledge, of to understand them they helping place and innovation happen seeking collaboration work, connection attractive to down heads And office? are the culture that's that People

around a timing little bit, is but still is the demand moving the So, there.

Operator

for I'm closing the remarks. the like Andi call back now showing no further questions in turn I to queue. over would to

Andrea Owen

forward Great. and Thank you so much, everyone, us really a appreciate interest we in updating to good you MillerKnoll Hope for look have continued you night. joining We today. again your next quarter.

Operator

this gentlemen, and your Ladies you today's conference for participation. Thank concludes call.

You may now disconnect.

MillerKnoll (MLKN) 30 Sep 212022 Q1 Earnings call transcript