- Strong work from home e-commerce and residential sales growth continue to help mitigate near-term office headwinds
- Positive signals in Office pipeline suggest improving outlook in the 2nd half of 2021
- Important actions taken during 2020 to reduce manufacturing footprint and reset workplace cost structure
- Year-end liquidity strong, with $334 million undrawn on our credit facility; leverage 2.3x
EAST GREENVILLE, Pa., Feb. 10, 2021 (GLOBE NEWSWIRE) — Knoll, Inc. (NYSE: KNL), a constellation of design-driven brands and people, working together with clients in person and digitally to create inspired modern interiors for workplaces and homes, today announced financial results for the fourth quarter ended December 31, 2020.
Fourth Quarter Highlights Versus Prior Year
Net Sales decreased 15.8% to $312.9M
Gross Margin decreased 320 bps to 35.6%
GAAP Operating Expenses decreased $9.9M to $104.3M or 33.3% of net sales
Adjusted Operating Expenses decreased $11.0M to $94.1M or 30.1% of net sales
GAAP Net Earnings/(loss) decreased $10.9M to $(0.6)M or (0.2)% of net sales
Adjusted EBITDA decreased $21.2M to $30.6M or 9.8% of net sales
GAAP Diluted EPS decreased $0.26 to ($0.05)
Adjusted Diluted EPS decreased $0.38 to $0.14
Full Year Highlights Versus Prior Year
Net Sales decreased 13.4% to $1,236.4M
Gross Margin decreased 260 bps to 35.8%
GAAP Operating Expenses decreased $4.1M to $415.1M or 33.6% of net sales
Adjusted Operating Expenses decreased $36.5M to $365.9M or 29.6% of net sales
GAAP Net Earnings decreased $59.8M to $7.7M or 0.6% of net sales
Adjusted EBITDA decreased $67.5M to $126.7M or 10.2% of net sales
GAAP Diluted EPS decreased $1.27 to $0.09
Adjusted Diluted EPS decreased $1.01 to 0.95
This release contains non-GAAP financial measures. Please refer to the Reconciliations of Non-GAAP Financial Measures section for reconciliations to the most directly comparable GAAP measure.
To Our Fellow Shareholders:
We hope this finds you and yours safe and well. 2020 was a year of unimaginable challenge and we could not be prouder of the way our team rose to the occasion to support our clients, dealers, the architectural and design community, and our fellow Knoll associates. Across the Knoll constellation, our associates successfully kept our plants and warehouses operational, re-opened showrooms where allowed by government regulation, and found new and innovative ways to connect digitally and in-person with the design community, commercial clients and residential consumers.
Solid Financial Results From Our Diversified Portfolio
Our long term strategy of diversifying our sources of revenue, both organically and through acquisition, away from a sole dependence on commercial workplace sales, with fluid brands that can pivot between sectors, has paid off exceedingly well this year. Sales to residential end users represented over a third of our total revenue, up from a fifth just a year ago. These sales increased 34% from prior year levels to a record $107M in the fourth quarter, and increased over 20%, to $335M, for the full year 2020. This helped to offset a 22% decline in our commercial workplace sales in 2020 and resulted in total revenues of $1,236.4M, down 13.4% vs prior year. For the quarter, sales of $312.9M declined 15.8% vs prior year driven by a 30% decline in workplace sales.
We took important steps to reset our cost structure in terms of both manufacturing costs, which were reduced by approximately $10M annually with the closing of our Grand Rapids manufacturing site and the pending consolidation of our NA warehouse locations in mid-2021, as well as approximately $25M of operating expense reductions, including headcount, travel and entertainment, variable incentive and other discretionary expenses while protecting our core digital and product development initiatives. These actions, combined with the favorable mix shift between…