-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ok5PZQbILRik3NVoafEStGOGFOyb3uvBPSSPPNJnlJ2JoewtQc51WbSoR7nifIOT nMODCoGBhhi69Po5YAxh7w== 0000899140-05-000108.txt : 20050209 0000899140-05-000108.hdr.sgml : 20050209 20050209163501 ACCESSION NUMBER: 0000899140-05-000108 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050209 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050209 DATE AS OF CHANGE: 20050209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNOLL INC CENTRAL INDEX KEY: 0001011570 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FURNITURE & FIXTURES [2590] IRS NUMBER: 133873847 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12907 FILM NUMBER: 05589118 BUSINESS ADDRESS: STREET 1: 1235 WATER ST CITY: EAST GREENVILLE STATE: PA ZIP: 18041 BUSINESS PHONE: 2156797991 MAIL ADDRESS: STREET 1: 1235 WATER STREET CITY: EAST GREENVILLE STATE: PA ZIP: 18041 8-K 1 k2767377.txt CURRENT REPORT ON FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) February 9, 2005 Knoll, Inc. (Exact name of registrant as specified in its charter) Delaware 001-12907 13-3873847 - ---------------------------- ---------------- ------------------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 1235 Water Street, East Greenville, Pennsylvania 18041 - ------------------------------------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 679-7991 -------------- Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. --------------------------------------------- On February 9, 2005, Knoll, Inc. (the "Company") issued a press release reporting its financial results for the three- and twelve-month periods ended December 31, 2004 (the "Earnings Release"). The press release has been filed as an exhibit to this Current Report on Form 8-K, attached hereto as Exhibit 99.1. The attached Earnings Release shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. Item 9.01. Financial Statements and Exhibits. --------------------------------- (c) Exhibit 99.1 -- Press Release, dated February 9, 2005. This exhibit is furnished pursuant to Item 2.02 and shall not be deemed to be "filed." -2- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Knoll Inc. Dated: February 9, 2005 By: /s/ Barry L. McCabe ------------------------------ Name: Barry L. McCabe Title: Senior Vice President and Chief Financial Officer -3- EXHIBIT INDEX Exhibit Description - ----------- -------------------------------------------------------------------- 99.1 Press Release, dated February 9, 2005. EX-99.1 2 k020805.txt PRESS RELEASE [KNOLL LOGO] 1235 Water Street East Greenville, PA 18041 Tel 215-679-7991 Press Release Knoll, Inc. Reports 2004 Fourth Quarter and Full Year Results Net Sales, Net Income and EPS Grew in Fourth Quarter; Year-End Backlog Increases 14.5% Over Prior Year EAST GREENVILLE, PA, February 9, 2005 -- Knoll, Inc., (NYSE: KNL) today announced results for the fourth quarter and year ended December 31, 2004. Net sales were $192.8 million for the quarter, an increase of 7.7% from fourth quarter 2003. Net sales for the year also grew 1.3%. Gross margin for the quarter was 35.7% while net income was $9.9 million or $0.20 per share. These amounts do not include pretax charges of $3.8 million associated with the public offering of 12,702,150 shares of common stock on December 17, 2004. Andrew Cogan, Chief Executive Officer, stated, "We have now experienced three consecutive quarters of increasing year over year sales growth. As expected, as the industry recovery gains traction, our sales are now growing faster than the industry." "We are seeing good gains in our seating, storage and specialty businesses and our systems business is growing again. Importantly, this growth is now resulting in quarterly year over year operating profit and earnings per share growth as well," he added. Fourth Quarter 2004 Financial Results Fourth quarter 2004 financial results highlights follow: (Results exclusive of pretax charges of $3.8 million associated with public offering) Dollars in Millions Three Months Ended Except Per Share Data ------------------- Percent 12/31/04 12/31/03 Change -------- -------- ---------- Net Sales $ 192.8 $ 179.0 7.7% Gross Margin 68.8 61.4 12.1% Operating Expenses 44.4 39.3 13.0% Operating Income 24.4 22.1 10.4% Net Income 9.9 9.3 6.5% Earnings Per Share - Diluted .20 .19 5.3% Backlog 122.5 107.0 14.5% The company's net sales for fourth quarter 2004 were $192.8 million, an increase of $13.8 million or 7.7% over fourth quarter 2003. Backlog of unfilled orders at December 31, 2004 increased $15.5 million or 14.5% versus the prior year. Gross margin for fourth quarter 2004 was $68.8 million, an increase of $7.4 million or 12.1%, over fourth quarter 2003. As a percentage of sales, gross margin increased to 35.7% for fourth quarter 2004 from 34.3% for fourth quarter 2003. These increases resulted from better absorption of overhead on the incremental volume coupled with the company's ability to offset steel and fuel inflation through improved pricing and a continued focus on global sourcing initiatives and continuous improvement efforts. Operating expenses for fourth quarter 2004 totaled $44.4 million, or 23.0% of sales, compared to $39.3 million, or 22.0% of sales for fourth quarter 2003. These increases resulted from greater marketing and product development spending in preparation for 2005 product introductions. In addition, strong year-end bookings performance by the sales force triggered approximately $2.6 million in additional sales compensation. These amounts are exclusive of pretax charges totaling $3.8 million associated with the public offering of 12,702,150 shares of common stock on December 17, 2004. Operating income for fourth quarter 2004 was $24.4 million, an increase of $2.3 million, or 10.4%, from operating income of $22.1 million for fourth quarter 2003. As a percentage of sales, operating income increased to 12.7% for fourth quarter 2004 from 12.3% for fourth quarter 2003. Net income for fourth quarter 2004 was $9.9 million, or $.20 per share, as compared to $9.3 million or $.19 per share, for fourth quarter 2003. Fourth quarter 2003 net income benefited from gains on interest rate collars and favorable exchange rate variances as compared to fourth quarter 2004. These gains favorably impacted fourth quarter 2003 earnings by $.04 per share. Cash flow from operations for the fourth quarter totaled $24.6 million, compared to $15.1 million for the same period last year. Over $33 million of debt was paid down in the quarter, $20 million from operations and $13 million from the proceeds received from the exercise of stock options in the quarter. Barry McCabe, Knoll's CFO noted " We are very pleased with the significant operating cash flow that we generated in the fourth quarter and with the progress that was made on reducing our debt." -2- Full Year Results 2004 financial results highlights follow: (Results exclusive of pretax charges of $4.4 million associated with public offering and $2.5 million related to the write-off of deferred financing fees as the company entered into a new credit agreement on September 30, 2004) Dollars in Millions Three Months Ended Except Per Share Data ------------------- Percent 12/31/04 12/31/03 Change -------- -------- ---------- Net Sales $ 706.4 $ 697.2 1.3% Gross Margin 241.0 236.3 2.0% Operating Expenses 165.3 149.7 10.4% Operating Income 75.8 86.6 -12.5% Net Income 32.1 36.3 -11.6% Earnings Per Share - Diluted .66 .75 -12.0% Backlog 122.5 107.0 14.5% For the year, net sales totaled $706.4 million, an increase of $9.2 million or 1.3% from 2003 net sales of $697.2 million. The second half of 2004 experienced net sales growth of 5.2%; this was preceded by a decline in net sales of 2.8% during the first half of the year. Gross margins increased slightly to 34.1% in 2004 from 33.9% in 2003. The company offset the effect of significant steel and fuel inflation through higher realized prices and an ongoing focus on global sourcing and continuous improvement efforts. Operating expenses, exclusive of $4.4 million associated with the public offering increased $15.6 million in 2004 as compared to 2003. As a percent of sales, operating expenses were 23.4% in 2004 and 21.5% in 2003, reflecting the effect of higher expenditures in product development and marketing relating to new product and growth initiatives along with increased sales compensation relating to strong bookings performance particularly in the fourth quarter. The company generated net income before public offering expenses and the write-off of deferred financing fees of $32.1 million or $.66 per diluted share in 2004, a decrease from $36.3 million or $.75 per diluted share in 2003. Annual cash generated from operations in 2004 was $60.7 million compared to $79.0 million the year before. Capital expenditures for the year totaled $13.1 million compared to $9.7 million for 2003. Excluding amounts borrowed in connection with its September 30, 2004 refinancing, the company paid down $63.0 million of its debt in 2004 and $71.3 million in 2003. Mr. Cogan commented, " 2004 was an important turning point for Knoll. Thanks to the successful efforts and hard work of all our associates and dealer partners, we increasingly grew our top line and by the fourth quarter outperformed the industry. We maintained our industry leading operating margins while making the increased investments in sales, -3- marketing and product development to position us for a year of growth in 2005. In December we became a public company." The company stated that it expects first quarter 2005 revenue to be in the $170 to $175 million range, an increase of 11 - 14 % from the first quarter of 2004. Earnings per share estimates for the first quarter 2005 are between $.10 and $.12. The company added that on February 2, 2005, its Board of Directors declared a quarterly cash dividend of $.05 per share payable on March 30, 2005, to stockholders of record on March 16, 2005. Reconciliation of Non-GAAP Financial Measures Three Twelve Months Months Dollars in Millions Ended Ended -------- -------- 12/31/04 12/31/04 -------- -------- Operating Expenses $ 48.2 $ 169.7 Less: Charges associated with public offering 3.8 4.4 --------- --------- Adjusted Operating Expenses $ 44.4 $ 165.3 ========= ========= Operating Income $ 20.6 71.4 Add: Charges associated with public offering 3.8 4.4 --------- --------- Adjusted Operating Income $ 24.4 $ 75.8 ========= ========= Net Income $ 6.8 $ 26.8 Add: Charges associated with public offering (net of income taxes of $0.7) 3.1 3.7 Write-off of deferred financing fees (net of income taxes of $0.9) - 1.6 --------- --------- Adjusted Net Income $ 9.9 $ 32.1 ========= ========= -4- Conference Call Information As announced on January 24, 2005, Knoll will host a conference call on Thursday, February 10, 2005 at 10:00 A.M. EST to discuss its financial results, quarterly highlights and business outlook. The call will include slides; participants are encouraged to listen to and view the presentation via webcast at http://www.knoll.com; go to "About Knoll" and click on "Investor Relations". The conference call may also be accessed by dialing: North America 800 638-4817 International 617 614-3943 Passcode 67617068 Headquartered in East Greenville, Pennsylvania, Knoll, a leading designer and manufacturer of branded office furniture products and textiles, serves clients worldwide. Our commitment to innovation and modern design has yielded a comprehensive portfolio of products designed to provide enduring value and help clients shape their workplaces with imagination and vision. The Knoll commitment to high environmental standards is mandated by a comprehensive Environmental, Health & Safety Management Plan. Cautionary Statement Regarding Forward-Looking Information This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding Knoll, Inc.'s expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions are forward-looking statements. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results may differ materially from the expectations of Knoll management. Knoll does not undertake a duty to update such forward-looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements include corporate spending and service-sector employment, price competition, acceptance of Knoll's new products, the pricing and availability of raw components, demand for high quality, well designed office furniture solutions, changes in the competitive marketplace, changes in the trends in the market for office furniture and other risks identified on Knoll's Registration Statement on Form S-1 and other filings with the Securities and Exchange Commission. Many of these factors are outside of Knoll's control. -5- Contacts Investors: Barry M. McCabe Senior Vice President and Chief Financial Officer Tel 215 679-1301 bmccabe@knoll.com Media: David Bright Vice President, Communications Tel 212 343-4135 dbright@knoll.com -6- KNOLL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, -------------------------- ----------------------- 2004 2003 2004 2003 ----------- ----------- ----------- --------- (Unaudited) (Unaudited) (Unaudited) ----------- ----------- ----------- Sales $ 192,804 $ 179,039 $ 706,390 $ 697,246 Cost of sales 124,030 117,670 465,379 460,911 --------- --------- --------- --------- Gross profit 68,774 61,369 241,011 236,335 Selling, general, and administrative expenses 48,205 39,309 169,706 149,739 --------- --------- --------- --------- Operating income 20,569 22,060 71,305 86,596 Interest expense 6,219 5,004 19,452 20,229 Other expense, net (3,131) (321) (5,316) (2,473) --------- --------- --------- --------- Income before income tax expense 11,219 16,735 46,537 63,894 Income tax expense 4,465 7,457 19,793 27,545 --------- --------- --------- --------- Net income $ 6,754 $ 9,278 $ 26,744 $ 36,349 --------- --------- --------- --------- Earnings per share: Basic $ .15 $ .20 $ .58 $ .78 Diluted $ .14 $ .19 $ .55 $ .75 Weighted-average shares outstanding: Basic 46,510,194 46,307,976 46,353,253 46,317,530 Diluted 48,923,388 48,386,426 48,319,483 48,414,374
-7- KNOLL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) December 31, December 31, 2004 2003 ----------- ----------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 9,052 $ 11,517 Customer receivables, net 92,452 91,271 Inventories 49,586 38,354 Prepaid and other current assets 18,604 20,040 --------- --------- Total current assets 169,694 161,182 Property, plant, and equipment, net 150,992 154,653 Intangible assets, net 237,382 235,466 Other noncurrent assets 8,641 9,700 --------- --------- Total Assets $ 566,709 $ 561,001 --------- --------- LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Current maturities of long-term debt $ 108 $ 81,340 Accounts payable 46,075 54,502 Other current liabilities 60,853 53,578 --------- --------- Total current liabilities 107,036 189,420 Long-term debt 392,750 299,531 Other noncurrent liabilities 88,268 80,169 --------- --------- Total liabilities 588,054 569,120 --------- --------- Stockholders' deficit (21,345) (8,119) --------- --------- Total Liabilities and Stockholders' Deficit $ 566,709 $ 561,001 --------- --------- -8- KNOLL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year Ended December 31, ---------------------------- 2004 2003 ----------- ----------- (Unaudited) Net income $ 26,744 $ 36,349 -------- -------- Cash Flows provided by Operating Activities 60,728 78,975 Cash Flows used in Investing Activities (13,131) (10,117) Cash Flows used in Financing Activities (51,953) (72,899) Effect of exchange rate changes on cash and cash equivalents 1,891 2,685 -------- -------- Decrease in cash and cash equivalents (2,465) (1,356) Cash and cash equivalents at beginning of year 11,517 12,873 -------- -------- Cash and cash equivalents at end of year $ 9,052 $ 11,517 -------- --------
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