Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 07, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | KNOLL INC | |
Entity Central Index Key | 1,011,570 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 49,349,876 | |
Restricted stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 871,610 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 5,833 | $ 9,854 |
Customer receivables, net of allowance for doubtful accounts of $5,274 and $8,059, respectively | 91,890 | 84,425 |
Inventories, net | 149,026 | 142,072 |
Prepaid expenses | 25,169 | 27,461 |
Other current assets | 10,691 | 12,996 |
Total current assets | 282,609 | 276,808 |
Property, plant, and equipment, net | 209,566 | 197,084 |
Goodwill | 142,158 | 141,391 |
Intangible assets, net | 239,403 | 241,870 |
Other noncurrent assets | 1,456 | 1,460 |
Total assets | 875,192 | 858,613 |
Current liabilities: | ||
Current maturities of long-term debt | 10,000 | 10,000 |
Accounts payable | 103,573 | 97,518 |
Income taxes payable | 41 | 81 |
Other current liabilities | 101,603 | 114,774 |
Total current liabilities | 215,217 | 222,373 |
Long-term debt | 208,882 | 208,383 |
Deferred income taxes | 77,826 | 76,854 |
Post-employment benefits other than pensions | 4,907 | 5,124 |
Pension liability | 11,308 | 17,428 |
Other noncurrent liabilities | 16,943 | 18,982 |
Total liabilities | 535,083 | 549,144 |
Commitments and contingent liabilities | ||
Equity: | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 65,437,957 shares issued and 49,323,826 shares outstanding (including 854,110 non-voting restricted shares and net of 16,114,131 treasury shares) at September 30, 2017 and 64,741,648 shares issued and 49,096,290 shares outstanding (including 993,962 non-voting restricted shares and net of 15,645,358 treasury shares) at December 31, 2016 | 493 | 491 |
Additional paid-in capital | 52,466 | 55,148 |
Retained earnings | 322,026 | 297,011 |
Accumulated other comprehensive loss | (35,141) | (43,403) |
Total Knoll, Inc. stockholders' equity | 339,844 | 309,247 |
Noncontrolling interests | 265 | 222 |
Total equity | 340,109 | 309,469 |
Total liabilities and equity | $ 875,192 | $ 858,613 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 5,274 | $ 8,059 |
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) | 65,437,957 | 64,741,648 |
Common stock, shares outstanding (n shares) | 49,323,826 | 49,096,290 |
Non-vesting restricted shares (in shares) | 854,110 | 993,962 |
Treasury shares (in shares) | 16,114,131 | 15,645,358 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 291,256 | $ 292,097 | $ 816,770 | $ 871,426 |
Cost of sales | 184,646 | 179,296 | 514,528 | 536,797 |
Gross profit | 106,610 | 112,801 | 302,242 | 334,629 |
Selling, general, and administrative expenses | 76,485 | 77,598 | 224,703 | 234,103 |
Restructuring charges | 0 | 0 | 2,150 | 0 |
Operating profit | 30,125 | 35,203 | 75,389 | 100,526 |
Interest expense | 1,991 | 1,296 | 5,521 | 4,157 |
Other expense, net | 815 | 681 | 1,251 | 3,470 |
Income before income tax expense | 27,319 | 33,226 | 68,617 | 92,899 |
Income tax expense | 8,158 | 11,608 | 21,104 | 32,229 |
Net earnings | 19,161 | 21,618 | 47,513 | 60,670 |
Net earnings attributable to noncontrolling interests | 29 | 11 | 43 | 28 |
Net earnings | $ 19,132 | $ 21,607 | $ 47,470 | $ 60,642 |
Net earnings per common share attributable to Knoll, Inc. stockholders: | ||||
Basic (in dollars per share) | $ 0.39 | $ 0.45 | $ 0.98 | $ 1.26 |
Diluted (in dollars per share) | 0.39 | 0.44 | 0.96 | 1.24 |
Dividends per share (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.45 | $ 0.45 |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 48,468,480 | 48,053,836 | 48,406,659 | 48,000,386 |
Diluted (in shares) | 48,979,182 | 48,845,553 | 49,167,856 | 48,765,607 |
Other comprehensive income (loss): | ||||
Pension and other post-employment liability adjustment, net of tax | $ (139) | $ (136) | $ (414) | $ (408) |
Foreign currency translation adjustment | 5,876 | (1,781) | 8,676 | 3,835 |
Total other comprehensive income (loss), net of tax | 5,737 | (1,917) | 8,262 | 3,427 |
Total comprehensive income | 24,898 | 19,701 | 55,775 | 64,097 |
Comprehensive income attributable to noncontrolling interests | 29 | 11 | 43 | 28 |
Comprehensive income attributable to Knoll, Inc. stockholders | $ 24,869 | $ 19,690 | $ 55,732 | $ 64,069 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Net earnings | $ 47,513 | $ 60,670 |
Adjustments to reconcile net earnings to cash provided by operating activities: | ||
Depreciation | 16,137 | 13,977 |
Amortization expense (including deferred financing fees) | 2,966 | 2,966 |
Inventory obsolescence | 1,436 | 2,186 |
Loss on disposal of property, plant and equipment | 83 | 4 |
Unrealized foreign currency losses | 1,370 | 1,324 |
Stock-based compensation | 7,314 | 7,246 |
Bad debt and customer claims | (1,403) | 4,854 |
Changes in assets and liabilities: | ||
Customer receivables | (5,789) | 28,997 |
Inventories | (7,611) | (6,807) |
Prepaid and other current assets | 5,491 | (1,548) |
Accounts payable | 9,502 | (8,186) |
Current and deferred income taxes | (1,388) | 958 |
Other current liabilities | (7,250) | 758 |
Other noncurrent assets and liabilities | (8,967) | (11,737) |
Cash provided by operating activities | 59,404 | 95,662 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures, net | (29,433) | (25,442) |
Purchase of business, net of cash acquired | 0 | (8,389) |
Cash used in investing activities | (29,433) | (33,831) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from credit facility | 304,000 | 253,500 |
Repayment of credit facility | (304,000) | (280,500) |
Payment of dividends | (23,000) | (21,946) |
Proceeds from the issuance of common stock | 576 | 2,847 |
Purchase of common stock for treasury | (10,570) | (4,503) |
Contingent purchase price payment | (6,000) | (5,000) |
Cash used in financing activities | (38,994) | (55,602) |
Effect of exchange rate changes on cash and cash equivalents | 5,002 | 766 |
Net decrease in cash and cash equivalents | (4,021) | 6,995 |
Cash and cash equivalents at beginning of period | 9,854 | 4,192 |
Cash and cash equivalents at end of period | $ 5,833 | $ 11,187 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
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 with generally accepted accounting principles 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 generally accepted accounting principles for complete financial statements. The consolidated balance sheet of the Company, as of December 31, 2016 , was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments considered necessary for a fair presentation. All of these adjustments are of a normal recurring nature. 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. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 . New Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU supersedes the revenue recognition requirements in FASB ASC Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016. The FASB subsequently deferred the effective date of this standard to periods beginning after December 15, 2017 with early adoption permitted for the periods beginning after December 15, 2016. The Company will adopt the new standard in the annual period beginning January 1, 2018. The standard permits the use of either the full retrospective or modified retrospective (cumulative effect) transition method. Transition practical expedients are available for both methods. The Company plans to apply the modified retrospective transition method. The Company assembled an implementation work team to assess and document the accounting conclusions for the adoption of ASU 2014-09. Based on this analysis, the Company does not believe the adoption of the ASU will have a material impact to the consolidated financial statements. The Company continues to assess the potential impact on accounting policies, internal control processes and related disclosures required under the new guidance. In July 2015, the FASB issued ASU 2015-11 - Inventory (Topic 330) , which amends existing guidance for measuring inventories. This amendment will require the Company to measure inventories recorded using the first-in, first-out method at the lower of cost and net realizable value. This amendment does not change the methodology for measuring inventories recorded using the last-in, first-out method. This amendment is effective for fiscal years beginning after December 15, 2016. The Company adopted this standard on January 1, 2017, and the impact on its consolidated financial statements was not material. In February 2016, the FASB issued guidance codified in ASC 842, Leases, which supersedes the guidance in ASC 840, Leases. ASC 842 will be effective for the Company on January 1, 2019, and the Company will adopt the standard using the modified retrospective approach. While the Company continues to evaluate the provisions of ASC 842 to determine how it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 simplifies the accounting for goodwill impairment by removing the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. Under the new guidance, goodwill impairment will be measured and recognized as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill allocated to the reporting unit. The revised guidance does not affect the reporting entity’s ability to first assess qualitative factors by reporting unit to determine whether it is necessary to perform the quantitative goodwill impairment test. The guidance is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company early adopted ASU 2017-04 in 2017. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715). The new standard improves the presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The new standard will require all components of the Company's net periodic benefit cost (income), with the exception of service cost, currently reported within selling, general and administrative expenses, to be reclassified and reported within other expense. The Company does not believe this standard will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718). The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Under the new guidance, an entity should account for the effects of a modification unless all of the following are met, (i) the fair value of the modified award is the same as the fair value of the original award, (ii) the vesting conditions of the modified award are the same as the original awards immediately before modification, and (iii) the classification of the modified award as an equity instrument or liability instrument is the same as the classification immediately prior to modification. The guidance is effective for annual periods and interim periods within those beginning after December 15, 2017. Early adoption is permitted for annual and interim periods with a prospective application to an award modified on or after the adoption date. The Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Information regarding the Company's inventories is as follows (in thousands): September 30, 2017 December 31, 2016 Raw materials $ 50,603 $ 60,217 Work-in-process 7,280 7,186 Finished goods 91,143 74,669 $ 149,026 $ 142,072 |
PENSION AND OTHER POST-EMPLOYME
PENSION AND OTHER POST-EMPLOYMENT BENEFITS | 9 Months Ended |
Sep. 30, 2017 | |
Pension and Other Postretirement Benefit Expense [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 income for the Company's pension and other post-employment benefit plans (in thousands): Pension Benefits Other Benefits Three Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 Service cost $ 175 $ 468 $ — $ — Interest cost 2,390 2,416 43 49 Expected return on plan assets (4,615 ) (3,862 ) — — Amortization of prior service credit — — (371 ) (280 ) Recognized actuarial loss (gain) 154 123 1 (62 ) Net periodic benefit income $ (1,896 ) $ (855 ) $ (327 ) $ (293 ) Pension Benefits Other Benefits Nine Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost $ 525 $ 1,404 $ — $ — Interest cost 7,170 7,248 129 147 Expected return on plan assets (13,845 ) (11,086 ) — — Amortization of prior service credit — — (1,113 ) (840 ) Recognized actuarial loss (gain) 462 369 3 (186 ) Net periodic benefit income $ (5,688 ) $ (2,065 ) $ (981 ) $ (879 ) |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Financial Instruments The fair values of the Company’s cash and cash equivalents approximate carrying value due to their short maturities and are classified as Level 1. The fair value of the Company’s long-term debt approximates its carrying value, as it is variable rate debt and the terms are comparable to market terms as of the balance sheet dates, and are classified as Level 2. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The following table represents the assets and liabilities, measured at fair value on a recurring basis and the basis for that measurement (in thousands): Fair Value as of September 30, 2017 Fair Value as of December 31, 2016 Liabilities: Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Contingent purchase price payment - HOLLY HUNT® $ — $ — $ — $ — $ — $ — $ 6,000 $ 6,000 Contingent purchase price payment - DatesWeiser — — 1,100 1,100 — — 1,100 1,100 Total $ — $ — $ 1,100 $ 1,100 $ — $ — $ 7,100 $ 7,100 Pursuant to the agreement governing the acquisition of HOLLY HUNT®, the Company was required to make annual contingent purchase price payments. The payouts were based upon HOLLY HUNT® reaching an annual net sales target, for each year through 2016, and were paid out on or around February 20 of the following calendar year. The Company classified this as a Level 3 measurement and was required to remeasure this liability at fair value on a recurring basis. The fair value of such contingent purchase price payments, totaling $16.0 million , was determined at the time of acquisition based upon net sales projections for HOLLY HUNT® for 2014, 2015, and 2016. The Company paid the remaining $6.0 million contingent purchase price in the three months ended March 31, 2017, as a result of HOLLY HUNT® achieving the 2016 net sales projections. Pursuant to the agreement governing the acquisition of DatesWeiser, the Company may be required to make annual contingent purchase price payments. The payouts are based upon DatesWeiser reaching an annual net sales target, for each year through 2020. The Company classifies this as a Level 3 measurement and is required to remeasure this liability at fair value on a recurring basis. The fair value of such contingent purchase price payments, totaling $1.1 million , was determined at the time of acquisition based upon net sales projections for DatesWeiser for 2017, 2018, 2019 and 2020. Excluding the initial recognition of the liability for the contingent purchase price payments and payments made to reduce the liability, any changes in the fair value will be included within selling, general and administrative expenses. There were no additional assets and/or liabilities recorded at fair value on a recurring basis as of September 30, 2017 or December 31, 2016 . |
OTHER CURRENT LIABILITIES OTHER
OTHER CURRENT LIABILITIES OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | OTHER CURRENT LIABILITIES Information regarding the Company's other current liabilities is as follows (in thousands): September 30, 2017 December 31, 2016 Accrued employee compensation $ 37,992 $ 46,508 Customer deposits 33,082 31,216 Warranty 8,890 8,906 Contingent payout 1,100 7,100 Other 20,539 21,044 Other current liabilities $ 101,603 $ 114,774 |
INDEBTEDNESS
INDEBTEDNESS | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | INDEBTEDNESS The Company's long-term debt is summarized as follows (in thousands): September 30, 2017 December 31, 2016 Balance of revolving credit facility $ 52,500 $ 45,000 Balance of term loan 167,500 175,000 Total long-term debt 220,000 220,000 Less: current maturities of long-term debt 10,000 10,000 Less: deferred financing fees, net 1,118 1,617 Long-term debt $ 208,882 $ 208,383 |
CONTINGENT LIABILITIES AND COMM
CONTINGENT LIABILITIES AND COMMITMENTS | 9 Months Ended |
Sep. 30, 2017 | |
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 when related products are sold and are included within other current liabilities. Because warranty estimates are forecasts that are based on the best available information, primarily historical claims experience, future warranty claims may differ from the amounts provided. Changes in the warranty reserve are as follows (in thousands): Balance, December 31, 2016 $ 8,906 Provision for warranty claims 4,577 Warranty claims paid (4,864 ) Foreign currency translation adjustment 271 Balance, September 30, 2017 $ 8,890 Warranty expense for the three and nine months ended September 30, 2017 was $1.7 million and $4.6 million , respectively. Warranty expense for the three and nine months ended September 30, 2016 was $1.7 million and $5.1 million , respectively. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
EQUITY | EQUITY The following table shows the change in equity attributable to Knoll, Inc. stockholders and noncontrolling interests during the nine months ended September 30, 2017 (in thousands): Common Additional Retained Accumulated Total Noncontrolling Interests Total Equity Balance at December 31, 2016 $ 491 $ 55,148 $ 297,011 $ (43,403 ) $ 309,247 $ 222 $ 309,469 Net earnings — — 47,470 — 47,470 43 47,513 Other comprehensive income — — — 8,262 8,262 — 8,262 Shares issued for consideration: Exercise of stock options (22,500 shares) — 472 — — 472 — 472 Shares issued under stock incentive plan (678,399 shares) 7 (3 ) — — 4 — 4 Shares issued to Board of Directors in lieu of cash (4,438 shares) — 100 — — 100 — 100 Stock-based compensation, net of forfeitures (57,911 shares) (1 ) 7,315 — — 7,314 — 7,314 Cash dividend ($0.45 per share) — — (22,455 ) — (22,455 ) — (22,455 ) Purchase of common stock (419,890 shares) (4 ) (10,566 ) — — (10,570 ) — (10,570 ) Balance at September 30, 2017 $ 493 $ 52,466 $ 322,026 $ (35,141 ) $ 339,844 $ 265 $ 340,109 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2017 (in thousands): Foreign Pension and Total Balance, as of December 31, 2016 $ (13,998 ) $ (29,405 ) $ (43,403 ) Other comprehensive income before reclassifications 8,676 — 8,676 Amounts reclassified from accumulated other comprehensive loss — (414 ) (414 ) Net current-period other comprehensive income 8,676 (414 ) 8,262 Balance, as of September 30, 2017 $ (5,322 ) $ (29,819 ) $ (35,141 ) The following reclassifications were made from accumulated other comprehensive income (loss) to the condensed consolidated statements of operations and other comprehensive income (in thousands): Three Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Amortization of pension and other post-employment liability adjustments Prior service credits (1) $ (371 ) $ (280 ) $ (1,113 ) $ (840 ) Actuarial losses (1) 155 61 465 183 Total before tax (216 ) (219 ) (648 ) (657 ) Tax expense 77 83 234 249 Net of tax $ (139 ) $ (136 ) $ (414 ) $ (408 ) (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 3 for additional information. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share excludes the dilutive effect of common shares that could potentially be issued due to the exercise of stock options and vesting of unvested restricted stock and restricted stock units, and is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share includes the effect of shares and potential shares and units issued under the stock incentive plans. The following table sets forth the reconciliation from basic to dilutive average common shares (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net earnings attributable to Knoll, Inc. stockholders $ 19,132 $ 21,607 $ 47,470 $ 60,642 Denominator: Denominator for basic earnings per shares - weighted-average shares 48,468 48,054 48,407 48,000 Effect of dilutive securities: Potentially dilutive shares resulting from stock plans 511 792 761 766 Denominator for diluted earnings per share - weighted-average shares 48,979 48,846 49,168 48,766 Antidilutive equity awards not included in weighted-average common shares—diluted 34 8 15 43 Net earnings per common share attributable to Knoll, Inc. stockholders: Basic $ 0.39 $ 0.45 $ 0.98 $ 1.26 Diluted $ 0.39 $ 0.44 $ 0.96 $ 1.24 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s income tax provision consists of federal, state and foreign income taxes. The tax provisions for the three months ended September 30, 2017 and 2016 were based on the estimated effective tax rates applicable for the full years ending December 31, 2017 and 2016 and includes items specifically related to the interim periods. The Company’s effective tax rate was 30.8% and 34.7% for the nine months ended September 30, 2017 and 2016 , respectively. The decrease in the Company's tax rate was related primarily to the reversal of a valuation allowance against certain foreign jurisdiction deferred tax assets recorded during the period ended September 30, 2017. The Company believes it will have sufficient future taxable income to realize its net operating loss carryforwards in this foreign jurisdiction. The decrease in the tax rate was also related to an increase in tax benefits related to the vesting of equity awards during the nine months ending September 30, 2017. In addition, the effective tax rate was impacted by the geographic mix of pretax income and the varying effective tax rates in the countries and states in which the Company operates. As of both September 30, 2017 and December 31, 2016 , the Company had unrecognized tax benefits of approximately $0.9 million . These unrecognized tax benefit amounts would affect the effective tax rate if recognized. As of September 30, 2017 , the Company is subject to U.S. Federal Income Tax examination for the tax years 2007 through 2016, and to non-U.S. income tax examination for the tax years 2010 through 2016. In addition, the Company is subject to state and local income tax examinations for the tax years 2007 through 2016. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company manages its business through its reporting segments: Office, Studio, and Coverings. All unallocated expenses are included within Corporate. The Office segment includes a complete range of workplace products that address diverse workplace planning paradigms. These products include: systems furniture, seating, storage, tables, desks and KnollExtra® accessories as well as the international sales of North American Office products. The Studio segment includes KnollStudio®, HOLLY HUNT®, Knoll Europe and DatesWeiser. KnollStudio® products, include iconic seating, lounge furniture, side, cafe and dining chairs as well as conference, training and dining and occasional tables. HOLLY HUNT® is known for high quality residential furniture, lighting, rugs, textiles and leathers. In 2016, HOLLY HUNT® acquired Vladimir Kagan Design Group, a renowned collection of modern luxury furnishings. Knoll Europe, which markets and sells both KnollStudio® and Knoll Office products, manufactures and sells products to customers in Europe. DatesWeiser, known for its sophisticated meeting and conference tables and credenzas, sets a standard for design, quality and technology integration. The Coverings segment includes KnollTextiles®, Spinneybeck® (including Filzfelt®), and Edelman® Leather. These businesses provide a wide range of customers with 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 continue to be 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. Prior year amounts have been recast to conform to the current presentation (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 SALES Office $ 181,168 $ 185,764 $ 484,042 $ 550,390 Studio 83,186 79,829 250,298 239,985 Coverings 26,902 26,504 82,430 81,051 Knoll, Inc. $ 291,256 $ 292,097 $ 816,770 $ 871,426 INTERSEGMENT SALES (1) Office $ 332 $ 466 $ 1,056 $ 1,244 Studio 1,429 1,228 4,021 4,611 Coverings 1,401 2,099 4,000 4,869 Knoll, Inc. $ 3,162 $ 3,793 $ 9,077 $ 10,724 OPERATING PROFIT Office (2) $ 15,546 $ 20,390 $ 28,718 $ 56,015 Studio 12,370 13,372 38,928 39,482 Coverings 6,252 6,295 18,682 19,476 Corporate (4,043 ) (4,854 ) (10,939 ) (14,447 ) Knoll, Inc. (3) $ 30,125 $ 35,203 $ 75,389 $ 100,526 _______________________________________________________________________________ (1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities. (2) Office Operating Profit includes $2.2 million of restructuring charges for the nine months ended September 30, 2017. The restructuring charges related to headcount rationalization and modernization of equipment. The Company does not expect to incur additional restructuring charges related to these activities. (3) The Company does not allocate interest expense or other (income) expense, net to the reportable segments. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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 with generally accepted accounting principles 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 generally accepted accounting principles for complete financial statements. The consolidated balance sheet of the Company, as of December 31, 2016 , was derived from the Company’s audited consolidated balance sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and reflect all adjustments considered necessary for a fair presentation. All of these adjustments are of a normal recurring nature. 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. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2016 . |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU supersedes the revenue recognition requirements in FASB ASC Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016. The FASB subsequently deferred the effective date of this standard to periods beginning after December 15, 2017 with early adoption permitted for the periods beginning after December 15, 2016. The Company will adopt the new standard in the annual period beginning January 1, 2018. The standard permits the use of either the full retrospective or modified retrospective (cumulative effect) transition method. Transition practical expedients are available for both methods. The Company plans to apply the modified retrospective transition method. The Company assembled an implementation work team to assess and document the accounting conclusions for the adoption of ASU 2014-09. Based on this analysis, the Company does not believe the adoption of the ASU will have a material impact to the consolidated financial statements. The Company continues to assess the potential impact on accounting policies, internal control processes and related disclosures required under the new guidance. In July 2015, the FASB issued ASU 2015-11 - Inventory (Topic 330) , which amends existing guidance for measuring inventories. This amendment will require the Company to measure inventories recorded using the first-in, first-out method at the lower of cost and net realizable value. This amendment does not change the methodology for measuring inventories recorded using the last-in, first-out method. This amendment is effective for fiscal years beginning after December 15, 2016. The Company adopted this standard on January 1, 2017, and the impact on its consolidated financial statements was not material. In February 2016, the FASB issued guidance codified in ASC 842, Leases, which supersedes the guidance in ASC 840, Leases. ASC 842 will be effective for the Company on January 1, 2019, and the Company will adopt the standard using the modified retrospective approach. While the Company continues to evaluate the provisions of ASC 842 to determine how it will be affected, the primary effect of adopting the new standard will be to record assets and obligations for current operating leases. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 replaces the incurred loss impairment methodology for measuring and recognizing credit losses with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This amendment is effective for fiscal years beginning after December 15, 2019. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 simplifies the accounting for goodwill impairment by removing the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. Under the new guidance, goodwill impairment will be measured and recognized as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill allocated to the reporting unit. The revised guidance does not affect the reporting entity’s ability to first assess qualitative factors by reporting unit to determine whether it is necessary to perform the quantitative goodwill impairment test. The guidance is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company early adopted ASU 2017-04 in 2017. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715). The new standard improves the presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The new standard will require all components of the Company's net periodic benefit cost (income), with the exception of service cost, currently reported within selling, general and administrative expenses, to be reclassified and reported within other expense. The Company does not believe this standard will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718). The new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Under the new guidance, an entity should account for the effects of a modification unless all of the following are met, (i) the fair value of the modified award is the same as the fair value of the original award, (ii) the vesting conditions of the modified award are the same as the original awards immediately before modification, and (iii) the classification of the modified award as an equity instrument or liability instrument is the same as the classification immediately prior to modification. The guidance is effective for annual periods and interim periods within those beginning after December 15, 2017. Early adoption is permitted for annual and interim periods with a prospective application to an award modified on or after the adoption date. The Company does not believe there will be a material impact to the financial statements as a result of adopting this ASU. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Information regarding the Company's inventories is as follows (in thousands): September 30, 2017 December 31, 2016 Raw materials $ 50,603 $ 60,217 Work-in-process 7,280 7,186 Finished goods 91,143 74,669 $ 149,026 $ 142,072 |
PENSION AND OTHER POST-EMPLOY20
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Pension and Other Postretirement Benefit Expense [Abstract] | |
Schedule of components of the net periodic benefit cost | The following tables set forth the components of the net periodic benefit income for the Company's pension and other post-employment benefit plans (in thousands): Pension Benefits Other Benefits Three Months Ended September 30, Three Months Ended September 30, 2017 2016 2017 2016 Service cost $ 175 $ 468 $ — $ — Interest cost 2,390 2,416 43 49 Expected return on plan assets (4,615 ) (3,862 ) — — Amortization of prior service credit — — (371 ) (280 ) Recognized actuarial loss (gain) 154 123 1 (62 ) Net periodic benefit income $ (1,896 ) $ (855 ) $ (327 ) $ (293 ) Pension Benefits Other Benefits Nine Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Service cost $ 525 $ 1,404 $ — $ — Interest cost 7,170 7,248 129 147 Expected return on plan assets (13,845 ) (11,086 ) — — Amortization of prior service credit — — (1,113 ) (840 ) Recognized actuarial loss (gain) 462 369 3 (186 ) Net periodic benefit income $ (5,688 ) $ (2,065 ) $ (981 ) $ (879 ) |
FAIR VALUE OF FINANCIAL INSTR21
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of indefinite lived intangible assets recorded at fair value on a recurring basis | The following table represents the assets and liabilities, measured at fair value on a recurring basis and the basis for that measurement (in thousands): Fair Value as of September 30, 2017 Fair Value as of December 31, 2016 Liabilities: Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Contingent purchase price payment - HOLLY HUNT® $ — $ — $ — $ — $ — $ — $ 6,000 $ 6,000 Contingent purchase price payment - DatesWeiser — — 1,100 1,100 — — 1,100 1,100 Total $ — $ — $ 1,100 $ 1,100 $ — $ — $ 7,100 $ 7,100 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | Information regarding the Company's other current liabilities is as follows (in thousands): September 30, 2017 December 31, 2016 Accrued employee compensation $ 37,992 $ 46,508 Customer deposits 33,082 31,216 Warranty 8,890 8,906 Contingent payout 1,100 7,100 Other 20,539 21,044 Other current liabilities $ 101,603 $ 114,774 |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The Company's long-term debt is summarized as follows (in thousands): September 30, 2017 December 31, 2016 Balance of revolving credit facility $ 52,500 $ 45,000 Balance of term loan 167,500 175,000 Total long-term debt 220,000 220,000 Less: current maturities of long-term debt 10,000 10,000 Less: deferred financing fees, net 1,118 1,617 Long-term debt $ 208,882 $ 208,383 |
CONTINGENT LIABILITIES AND CO24
CONTINGENT LIABILITIES AND COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of changes in the warranty reserve | Changes in the warranty reserve are as follows (in thousands): Balance, December 31, 2016 $ 8,906 Provision for warranty claims 4,577 Warranty claims paid (4,864 ) Foreign currency translation adjustment 271 Balance, September 30, 2017 $ 8,890 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of stockholders' equity | The following table shows the change in equity attributable to Knoll, Inc. stockholders and noncontrolling interests during the nine months ended September 30, 2017 (in thousands): Common Additional Retained Accumulated Total Noncontrolling Interests Total Equity Balance at December 31, 2016 $ 491 $ 55,148 $ 297,011 $ (43,403 ) $ 309,247 $ 222 $ 309,469 Net earnings — — 47,470 — 47,470 43 47,513 Other comprehensive income — — — 8,262 8,262 — 8,262 Shares issued for consideration: Exercise of stock options (22,500 shares) — 472 — — 472 — 472 Shares issued under stock incentive plan (678,399 shares) 7 (3 ) — — 4 — 4 Shares issued to Board of Directors in lieu of cash (4,438 shares) — 100 — — 100 — 100 Stock-based compensation, net of forfeitures (57,911 shares) (1 ) 7,315 — — 7,314 — 7,314 Cash dividend ($0.45 per share) — — (22,455 ) — (22,455 ) — (22,455 ) Purchase of common stock (419,890 shares) (4 ) (10,566 ) — — (10,570 ) — (10,570 ) Balance at September 30, 2017 $ 493 $ 52,466 $ 322,026 $ (35,141 ) $ 339,844 $ 265 $ 340,109 |
ACCUMULATED OTHER COMPREHENSI26
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | The following table summarizes the changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2017 (in thousands): Foreign Pension and Total Balance, as of December 31, 2016 $ (13,998 ) $ (29,405 ) $ (43,403 ) Other comprehensive income before reclassifications 8,676 — 8,676 Amounts reclassified from accumulated other comprehensive loss — (414 ) (414 ) Net current-period other comprehensive income 8,676 (414 ) 8,262 Balance, as of September 30, 2017 $ (5,322 ) $ (29,819 ) $ (35,141 ) |
Reclassification out of accumulated other comprehensive income | The following reclassifications were made from accumulated other comprehensive income (loss) to the condensed consolidated statements of operations and other comprehensive income (in thousands): Three Months Ended Nine Months Ended September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016 Amortization of pension and other post-employment liability adjustments Prior service credits (1) $ (371 ) $ (280 ) $ (1,113 ) $ (840 ) Actuarial losses (1) 155 61 465 183 Total before tax (216 ) (219 ) (648 ) (657 ) Tax expense 77 83 234 249 Net of tax $ (139 ) $ (136 ) $ (414 ) $ (408 ) (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 3 for additional information. |
COMMON STOCK AND EARNINGS PER S
COMMON STOCK AND EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic to dilutive average common shares | The following table sets forth the reconciliation from basic to dilutive average common shares (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Numerator: Net earnings attributable to Knoll, Inc. stockholders $ 19,132 $ 21,607 $ 47,470 $ 60,642 Denominator: Denominator for basic earnings per shares - weighted-average shares 48,468 48,054 48,407 48,000 Effect of dilutive securities: Potentially dilutive shares resulting from stock plans 511 792 761 766 Denominator for diluted earnings per share - weighted-average shares 48,979 48,846 49,168 48,766 Antidilutive equity awards not included in weighted-average common shares—diluted 34 8 15 43 Net earnings per common share attributable to Knoll, Inc. stockholders: Basic $ 0.39 $ 0.45 $ 0.98 $ 1.26 Diluted $ 0.39 $ 0.44 $ 0.96 $ 1.24 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of certain financial information related to segments | The tables below present the Company’s segment information with Corporate costs excluded from reporting segment results. Prior year amounts have been recast to conform to the current presentation (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 SALES Office $ 181,168 $ 185,764 $ 484,042 $ 550,390 Studio 83,186 79,829 250,298 239,985 Coverings 26,902 26,504 82,430 81,051 Knoll, Inc. $ 291,256 $ 292,097 $ 816,770 $ 871,426 INTERSEGMENT SALES (1) Office $ 332 $ 466 $ 1,056 $ 1,244 Studio 1,429 1,228 4,021 4,611 Coverings 1,401 2,099 4,000 4,869 Knoll, Inc. $ 3,162 $ 3,793 $ 9,077 $ 10,724 OPERATING PROFIT Office (2) $ 15,546 $ 20,390 $ 28,718 $ 56,015 Studio 12,370 13,372 38,928 39,482 Coverings 6,252 6,295 18,682 19,476 Corporate (4,043 ) (4,854 ) (10,939 ) (14,447 ) Knoll, Inc. (3) $ 30,125 $ 35,203 $ 75,389 $ 100,526 _______________________________________________________________________________ (1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities. (2) Office Operating Profit includes $2.2 million of restructuring charges for the nine months ended September 30, 2017. The restructuring charges related to headcount rationalization and modernization of equipment. The Company does not expect to incur additional restructuring charges related to these activities. (3) The Company does not allocate interest expense or other (income) expense, net to the reportable segments. |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 50,603 | $ 60,217 |
Work-in-process | 7,280 | 7,186 |
Finished goods | 91,143 | 74,669 |
Inventories, net | $ 149,026 | $ 142,072 |
PENSION AND OTHER POST-EMPLOY30
PENSION AND OTHER POST-EMPLOYMENT BENEFITS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Pension Benefits | ||||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||||
Service cost | $ 175 | $ 468 | $ 525 | $ 1,404 |
Interest cost | 2,390 | 2,416 | 7,170 | 7,248 |
Expected return on plan assets | (4,615) | (3,862) | (13,845) | (11,086) |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Recognized actuarial loss (gain) | 154 | 123 | 462 | 369 |
Net periodic benefit income | (1,896) | (855) | (5,688) | (2,065) |
Other Benefits | ||||
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 43 | 49 | 129 | 147 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service credit | (371) | (280) | (1,113) | (840) |
Recognized actuarial loss (gain) | 1 | (62) | 3 | (186) |
Net periodic benefit income | $ (327) | $ (293) | $ (981) | $ (879) |
FAIR VALUE OF FINANCIAL INSTR31
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 01, 2016 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | $ 1,100 | $ 7,100 | $ 16,000 | ||
Holly Hunt Enterprises, Inc. | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 6,000 | |||
DatesWeiser | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 1,100 | 1,100 | |||
Level 1 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 0 | |||
Level 1 | Holly Hunt Enterprises, Inc. | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 0 | |||
Level 1 | DatesWeiser | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 0 | |||
Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 0 | |||
Level 2 | Holly Hunt Enterprises, Inc. | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 0 | |||
Level 2 | DatesWeiser | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | 0 | |||
Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 1,100 | 7,100 | |||
Level 3 | Holly Hunt Enterprises, Inc. | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | 0 | $ 6,000 | |||
Level 3 | DatesWeiser | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent purchase price payment | $ 1,100 | $ 1,100 | $ 1,100 |
OTHER CURRENT LIABILITIES (Deta
OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other Liabilities Disclosure [Abstract] | ||
Accrued employee compensation | $ 37,992 | $ 46,508 |
Customer deposits | 33,082 | 31,216 |
Warranty | 8,890 | 8,906 |
Contingent payout | 1,100 | 7,100 |
Other | 20,539 | 21,044 |
Other current liabilities | $ 101,603 | $ 114,774 |
INDEBTEDNESS (Details)
INDEBTEDNESS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Long-term debt | ||
Long-term debt | $ 220,000 | $ 220,000 |
Less: current maturities of long-term debt | 10,000 | 10,000 |
Less: deferred financing fees, net | 1,118 | 1,617 |
Long-term debt | 208,882 | 208,383 |
Revolving credit facility | ||
Long-term debt | ||
Long-term debt | 52,500 | 45,000 |
Term loan | ||
Long-term debt | ||
Long-term debt | $ 167,500 | $ 175,000 |
CONTINGENT LIABILITIES AND CO34
CONTINGENT LIABILITIES AND COMMITMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Changes in warranty reserve | ||||
Balance, Beginning of Period | $ 8,906 | |||
Provision for warranty claims | $ 1,700 | $ 1,700 | 4,577 | $ 5,100 |
Warranty claims paid | (4,864) | |||
Foreign currency translation adjustment | 271 | |||
Balance, End of Period | $ 8,890 | $ 8,890 |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 309,469 | |||
Net earnings | $ 19,161 | $ 21,618 | 47,513 | $ 60,670 |
Other comprehensive income | 5,737 | $ (1,917) | 8,262 | $ 3,427 |
Exercise of stock options (22,500 shares) | 472 | |||
Shares issued under stock incentive plan (678,399 shares) | 4 | |||
Shares issued to Board of Directors in lieu of cash (4,438 shares) | 100 | |||
Stock-based compensation, net of forfeitures (57,911 shares) | 7,314 | |||
Cash dividend ($0.45 per share) | (22,455) | |||
Purchase of common stock (419,890 shares) | (10,570) | |||
Ending Balance | 340,109 | $ 340,109 | ||
Exercise of stock options (in shares) | 22,500 | |||
Shares issued under stock incentive plan (676,850) (in shares) | 678,399 | |||
Shares issued to Board of Directors in lieu of cash (in shares) | 4,438 | |||
Cash dividend (in dollars per share) | $ 0.45 | |||
Purchase of common stock (in shares) | 419,890 | |||
Total Knoll, Inc. Stockholders' Equity | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ 309,247 | |||
Net earnings | 47,470 | |||
Other comprehensive income | 8,262 | |||
Exercise of stock options (22,500 shares) | 472 | |||
Shares issued under stock incentive plan (678,399 shares) | 4 | |||
Shares issued to Board of Directors in lieu of cash (4,438 shares) | 100 | |||
Stock-based compensation, net of forfeitures (57,911 shares) | 7,314 | |||
Cash dividend ($0.45 per share) | (22,455) | |||
Purchase of common stock (419,890 shares) | (10,570) | |||
Ending Balance | 339,844 | 339,844 | ||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 491 | |||
Shares issued under stock incentive plan (678,399 shares) | 7 | |||
Stock-based compensation, net of forfeitures (57,911 shares) | 1 | |||
Purchase of common stock (419,890 shares) | (4) | |||
Ending Balance | 493 | 493 | ||
Additional Paid-In Capital | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 55,148 | |||
Exercise of stock options (22,500 shares) | 472 | |||
Shares issued under stock incentive plan (678,399 shares) | (3) | |||
Shares issued to Board of Directors in lieu of cash (4,438 shares) | 100 | |||
Stock-based compensation, net of forfeitures (57,911 shares) | 7,315 | |||
Purchase of common stock (419,890 shares) | (10,566) | |||
Ending Balance | 52,466 | 52,466 | ||
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 297,011 | |||
Net earnings | 47,470 | |||
Cash dividend ($0.45 per share) | (22,455) | |||
Ending Balance | 322,026 | 322,026 | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (43,403) | |||
Other comprehensive income | 8,262 | |||
Ending Balance | (35,141) | (35,141) | ||
Noncontrolling Interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 222 | |||
Net earnings | 43 | |||
Ending Balance | $ 265 | $ 265 |
ACCUMULATED OTHER COMPREHENSI36
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | $ (43,403) |
Other comprehensive income before reclassifications | 8,676 |
Amounts reclassified from accumulated other comprehensive loss | (414) |
Net of tax | 8,262 |
Ending Balance | (35,141) |
Foreign Currency Translation Adjustment | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (13,998) |
Other comprehensive income before reclassifications | 8,676 |
Amounts reclassified from accumulated other comprehensive loss | 0 |
Net of tax | 8,676 |
Ending Balance | (5,322) |
Pension and Other Post-Employment Liability Adjustment | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Beginning Balance | (29,405) |
Other comprehensive income before reclassifications | 0 |
Amounts reclassified from accumulated other comprehensive loss | (414) |
Net of tax | (414) |
Ending Balance | $ (29,819) |
ACCUMULATED OTHER COMPREHENSI37
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net of tax | $ (414) | |||
Prior service credits | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ (371) | $ (280) | (1,113) | $ (840) |
Actuarial losses | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 155 | 61 | 465 | 183 |
Accumulated defined benefit plans adjustment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | (216) | (219) | (648) | (657) |
Tax expense | 77 | 83 | 234 | 249 |
Net of tax | $ (139) | $ (136) | $ (414) | $ (408) |
COMMON STOCK AND EARNINGS PER38
COMMON STOCK AND EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net earnings attributable to Knoll, Inc. stockholders | $ 19,132 | $ 21,607 | $ 47,470 | $ 60,642 |
Weighted-average shares of common stock outstanding—basic (in shares) | 48,468,480 | 48,053,836 | 48,406,659 | 48,000,386 |
Potentially dilutive shares resulting from stock plans (in shares) | 511,000 | 792,000 | 761,000 | 766,000 |
Denominator for diluted earnings per share - weighted-average shares (in shares) | 48,979,182 | 48,845,553 | 49,167,856 | 48,765,607 |
Antidilutive equity awards not included in weighted-average common shares—diluted (in shares) | 34,000 | 8,000 | 15,000 | 43,000 |
Basic (in dollars per share) | $ 0.39 | $ 0.45 | $ 0.98 | $ 1.26 |
Diluted (in dollars per share) | $ 0.39 | $ 0.44 | $ 0.96 | $ 1.24 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 30.80% | 34.70% | |
Unrecognized tax benefits, which would reduce the effective tax rate if recognized | $ 0.9 | $ 0.9 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Financial information of segments | ||||
SALES | $ 291,256 | $ 292,097 | $ 816,770 | $ 871,426 |
OPERATING PROFIT | 30,125 | 35,203 | 75,389 | 100,526 |
Operating Segments | ||||
Financial information of segments | ||||
SALES | 291,256 | 292,097 | 816,770 | 871,426 |
INTERSEGMENT SALES | 3,162 | 3,793 | 9,077 | 10,724 |
Corporate | ||||
Financial information of segments | ||||
OPERATING PROFIT | (4,043) | (4,854) | (10,939) | (14,447) |
Office | Operating Segments | ||||
Financial information of segments | ||||
SALES | 181,168 | 185,764 | 484,042 | 550,390 |
INTERSEGMENT SALES | 332 | 466 | 1,056 | 1,244 |
OPERATING PROFIT | 15,546 | 20,390 | 28,718 | 56,015 |
Restructuring charges | 2,200 | |||
Studio | Operating Segments | ||||
Financial information of segments | ||||
SALES | 83,186 | 79,829 | 250,298 | 239,985 |
INTERSEGMENT SALES | 1,429 | 1,228 | 4,021 | 4,611 |
OPERATING PROFIT | 12,370 | 13,372 | 38,928 | 39,482 |
Coverings | Operating Segments | ||||
Financial information of segments | ||||
SALES | 26,902 | 26,504 | 82,430 | 81,051 |
INTERSEGMENT SALES | 1,401 | 2,099 | 4,000 | 4,869 |
OPERATING PROFIT | $ 6,252 | $ 6,295 | $ 18,682 | $ 19,476 |