Navigate / search

Knoll reports 2013 results

American professional furniture and textile maker, Knoll, announced its fiscal 2013 results today.

For the full year, net sales were $862.7 million, a decrease of 2.8% when compared to 2012.
Operating profit was $41.1 million, or 4.8% of net sales, a decrease of 53.2% when compared to 2012.
Excluding restructuring and impairment charges (supply chain transformation and a non-cash impairment charge), operating profit for 2013 would have been $55.7 million, a decrease of 36.6% when compared with the same period in the prior year.

Net income was $23.1 million for 2013, a decrease of 53.8% when compared to 2012.
Diluted earnings per share were $0.49 for the year compared to $1.06 per share in the prior year. Excluding restructuring and impairment charges (supply chain transformation and a non-cash impairment charge), diluted earnings per share would have been $0.68 per share during 2013.

Knoll 2013 results

Net sales for the Office segment were $599.1 million, a decrease of $34.2 million, or 5.4%, when compared with 2012. This decrease in sales in the Office segment for the year was largely the result of lower sales to government agencies. Sales to commercial clients grew during 2013, however, this growth was not enough to offset the decline in sales to government agencies.

Net sales for the Studio segment were $154.5 million, an increase of $6.9 million, or 4.7%, when compared with 2012. Sales growth in North America outpaced Europe within the Studio segment during 2013.

Net sales for the Coverings segment were $109.0 million, an increase of $2.4 million, or 2.3%, when compared with 2012. Increased sales in Knoll’s Textiles division was the main cause of this increase.

During the full year, gross margin decreased from 33.2% in 2012 to 32.5% in 2013. The decrease in gross margin during the year was mainly the result of price erosion in the Office segment as well as lower absorption of our fixed costs as a result of our lower sales.

Operating expenses for 2013 were $224.6 million, or 26.0% of net sales, compared to $206.4 million, or 23.3% of net sales, for 2012. The increase in operating expenses during 2013 was in large part due to increased spending associated with the announced programs of strategic investments and initiatives to achieve longer-term revenue and margin objectives, which were partially offset by lower incentive compensation.

Operating profit for 2013 was $41.1 million, a decrease of $46.8 million, or 53.2%, when compared with the same period in 2012. Operating profit as a percent of net sales was 4.8% for 2013 compared to 9.9% in 2012.

Operating profit for 2013 includes restructuring charges of $5.7 million and an $8.9 million intangible impairment charge. Excluding these amounts, operating profit would have been $55.7 million, or 6.5% of net sales, during 2013.

Operating profit for the Office segment was $13.4 million for 2013, compared to $48.6 million in 2012. Excluding restructuring charges of $2.7 million, operating profit for the Office segment would have been $16.1 million in 2013, a decrease of $32.5 million, or 66.9%, when compared with 2012. The decrease in operating profit in the Office segment during 2013 was the result of our lower sales and the increased spending on previously announced growth initiatives.

Operating profit for the Studio segment was $15.6 million for 2013, compared to $21.8 million in 2012. Excluding restructuring charges of $3.0 million, operating profit for the Studio segment would have been $18.6 million, a decrease of $3.2 million, or 14.7%, when compared with 2012.

Operating profit for the Coverings segment was $12.1 million for 2013, compared to $17.5 million in 2012. Excluding the intangible asset impairment charge of $8.9 million, operating profit for the Coverings segment would have been $21.0 million, an increase of $3.5 million, or 20.0%, when compared to 2012.

Interest expense for 2013 decreased $0.4 million when compared with the full year 2012. The decrease in interest expense was primarily due to lower outstanding debt.

Other (income) expense in 2013 consisted of income of $3.5 million from foreign exchange gains offset by  $0.1 million of miscellaneous expense. Other (income) expense in 2012 consisted of expense related to $2.8 million of foreign exchange losses, expense of $0.5 million related to the write-off of deferred financing fees in conjunction with a new debt agreement completed in February of 2012, offset by  $0.1 million of miscellaneous income.

The effective tax rate was 40.0% for the year, as compared to 36.2% for 2012. The effective tax rate for 2012 was lower as a result of a reduction in unrecognised tax benefits. Knoll’s effective tax rate is also dependent upon the mix of pre-tax income in the countries in which we operate.

Knoll generated 2013 net income of $23.1 million, or $0.49 diluted earnings per share, compared to $50.0 million, or $1.06 diluted earnings per share, in 2012. Excluding the restructuring and impairment charges, diluted earnings per share would have been $0.68 per share 2013.

Annual cash generated from operations in 2013 was $54.6 million, compared to $70.6 million the year before. Capital expenditures in 2013 totalled $29.1 million compared to $16.5 million for 2012.

During 2013 Knoll repaid $20.0 million of debt compared to $19.0 million in 2012. Knoll also paid dividends of $22.5 million in 2013 compared with $20.5 million in 2012.

“We are fortunate that the strength of our balance sheet allows us to strategically and opportunistically acquire a leading design business like Holly Hunt Enterprises.  Holly Hunt significantly extends our reach into the profitable and fragmented luxury residential market and is a great fit from a brand and cultural perspective,” commented Craig B. Spray, SVP & CFO.

Q4 results

Net sales were $230.9 million for the quarter, a decrease of 7.6% from the fourth quarter 2012.

Operating profit was $1.3 million, or 0.6% of net sales, a decrease of 95.4% from the fourth quarter of 2012. Operating profit during the fourth quarter of 2013 includes $5.7 million of restructuring charges as well as an $8.9 million impairment charge related to the write-down of the Edelman tradename. Excluding these charges operating profit during the fourth quarter of 2013 would have been $15.9 million, or 6.9% of net sales, a decrease of 43.4% from the fourth quarter of 2012.

Net income was $0.6 million during the fourth quarter of 2013 compared to $17.5 million in the fourth quarter of 2012.

Diluted earnings per share were $0.01 during the fourth quarter of 2013 compared to $0.37 for 2012. Excluding the restructuring and impairment charges, diluted earnings per share would have been $0.21 per share during the fourth quarter of 2013.

Knoll Q4 2013 results

Business segment results

Knoll 2013 segment results

“The results, strategic initiatives, and acquisition of Holly Hunt that we announced earlier this week are consistent with our efforts to build a unique, highly profitable, enterprise in the high design interior space and significantly accelerates us towards our longer term strategic and financial objectives,” commented Andrew Cogan, CEO.

“We remain committed to both the transformation of our core Office segment as well as working to capture the significant profit opportunity in more fragmented residential and consumer markets around the world”, he added.

Source

Leave a comment

name*

email* (not published)

website

Subscribe
* indicates required
Email Address*
Profession

Email Format


×