10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                       

Commission File No. 001-12907

KNOLL, INC.

A Delaware Corporation I.R.S. Employer No. 13-3873847

1235 Water Street

East Greenville, PA 18041

Telephone Number (215) 679-7991

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x, Accelerated filer o, Non-accelerated filer o, Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)  Yes o No x

As of May 9, 2016, there were 49,061,283 shares (including 1,050,497 non-voting restricted shares) of the Registrant’s common stock, par value $0.01 per share, outstanding.

KNOLL, INC.

TABLE OF CONTENTS FOR FORM 10-Q

Item		Page
PART I — FINANCIAL INFORMATION
1.	Condensed Consolidated Financial Statements:
	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	3
	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2016 and 2015	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015	5
	Notes to the Condensed Consolidated Financial Statements	6
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
3.	Quantitative and Qualitative Disclosures about Market Risk	19
4.	Controls and Procedures	20
PART II — OTHER INFORMATION
1.	Legal Proceedings	21
1A.	Risk Factors	21
2.	Unregistered Sales of Equity Securities and The Use of Proceeds	21
6.	Exhibits	22
Signatures		23

2

PART I - FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

KNOLL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share and per share data)

	March 31, 2016			December 31, 2015
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	5,348		$	4,192
Customer receivables, net of allowance for doubtful accounts of $8,196 and $7,919, respectively	108,237			116,532
Inventories, net	148,251			140,798
Deferred income taxes	20,399			20,485
Prepaid and other current assets	19,102			26,765
Total current assets	301,337			308,772
Property, plant, and equipment, net	175,533			172,142
Goodwill	128,174			127,671
Intangible assets, net	239,347			240,169
Other non-trade receivables	2,126			2,254
Other noncurrent assets	948			2,795
Total assets	$	847,465		$	853,803
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	10,000		$	10,000
Accounts payable	90,944			89,552
Income taxes payable	160			1,580
Other current liabilities	99,460			114,908
Total current liabilities	200,564			216,040
Long-term debt	209,884			209,718
Deferred income taxes	77,875			75,959
Postretirement benefits other than pensions	5,748			6,294
Pension liability	62,936			63,441
Other noncurrent liabilities	20,213			26,877
Total liabilities	577,220			598,329
Commitments and contingent liabilities
Equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 64,659,498 shares issued and 49,046,789 shares outstanding (including 1,071,285 non-voting restricted shares and net of 15,612,709 treasury shares) at March 31, 2016 and 64,603,344 shares issued and 48,822,013 shares outstanding (including 993,934 non-voting restricted shares and net of 15,781,331 treasury shares) at December 31, 2015	490			488
Additional paid-in capital	47,938			47,165
Retained earnings	254,745			244,947
Accumulated other comprehensive loss	(33,131		)	(37,318		)
Total Knoll, Inc. stockholders' equity	270,042			255,282
Noncontrolling interests	203			192
Total equity	270,245			255,474
Total liabilities and equity	$	847,465		$	853,803

See accompanying notes to the condensed consolidated financial statements.

3

KNOLL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

(dollars in thousands, except share and per share data)

	Three Months Ended March 31,
	2016		2015
Sales	$	284,629	$	266,498
Cost of sales	176,865		171,189
Gross profit	107,764		95,309
Selling, general, and administrative expenses	75,915		73,010
Operating profit	31,849		22,299
Interest expense	1,554		1,885
Other expense (income), net	2,604		(7,157		)
Income before income tax expense	27,691		27,571
Income tax expense	10,421		10,136
Net earnings	17,270		17,435
Net earnings (loss) attributable to noncontrolling interests	11		(8		)
Net earnings attributable to Knoll, Inc. stockholders	$	17,259	$	17,443
Net earnings per common share attributable to Knoll, Inc. stockholders:
Basic	$	0.36	$	0.37
Diluted	$	0.36	$	0.36
Dividends per share	$	0.15	$	0.12
Weighted-average number of common shares outstanding:
Basic	47,904,593		47,647,961
Diluted	48,570,895		48,353,047
Net earnings	$	17,270	$	17,435
Other comprehensive income (loss):
Pension and other postretirement liability adjustment, net of tax	138		1,382
Foreign currency translation adjustment	4,049		(12,999		)
Total other comprehensive income (loss), net of tax	4,187		(11,617		)
Total comprehensive income	21,457		5,818
Comprehensive income (loss) attributable to noncontrolling interests	11		(8		)
Comprehensive income attributable to Knoll, Inc. stockholders	$	21,446	$	5,826

See accompanying notes to the condensed consolidated financial statements.

4

KNOLL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(dollars in thousands)

	Three Months Ended March 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	17,270		$	17,435
Adjustments to reconcile net earnings to cash provided by (used in) operating activities:
Depreciation	4,560			4,303
Amortization expense (including deferred financing fees)	989			962
Inventory obsolescence	647			397
Loss on disposal of property, plant and equipment	7			11
Unrealized foreign currency losses (gains)	1,262			(7,271		)
Stock-based compensation	2,138			1,385
Bad debt and customer credits	91			476
Changes in assets and liabilities:
Customer receivables	8,570			(9,030		)
Inventories	(7,348		)	(6,104		)
Accounts payable	1,299			(29,318		)
Current and deferred income taxes	578			3,337
Other current assets	7,749			(1,229		)
Other current liabilities	(16,393		)	(5,334		)
Other noncurrent assets and liabilities	(304		)	3,925
Cash provided by (used in) operating activities	21,115			(26,055		)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net	(7,017		)	(4,864		)
Cash used in investing activities	(7,017		)	(4,864		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from credit facility	99,500			101,000
Repayment of credit facility	(99,500		)	(59,000		)
Payment of dividends	(7,196		)	(5,729		)
Proceeds from the issuance of common stock	399			3,826
Purchase of common stock for treasury	(1,902		)	(6,067		)
Contingent purchase price payment	(5,000		)	(5,000		)
Tax benefit from the exercise of stock options and vesting of equity awards	141			658
Cash (used in) provided by financing activities	(13,558		)	29,688
Effect of exchange rate changes on cash and cash equivalents	616			(3,115		)
Net increase (decrease) in cash and cash equivalents	1,156			(4,346		)
Cash and cash equivalents at beginning of period	4,192			19,021
Cash and cash equivalents at end of period	$	5,348		$	14,675

See accompanying notes to the condensed consolidated financial statements.

5

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Knoll, Inc. (the “Company”) have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.  The consolidated balance sheet of the Company, as of December 31, 2015, 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 which are, in the opinion of management, necessary to summarize fairly the financial position of the Company and the results of the Company’s operations and cash flows for the periods presented. 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 Form 10-K for the year ended December 31, 2015.

New Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition, and most industry-specific guidance throughout the Accounting Standards Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2017, and for interim periods therein. The guidance permits the use of either a full retrospective or modified retrospective transition method. The Company has not yet selected a transition method and is currently evaluating the impact of the amended guidance on the consolidated financial position, results of operations and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03 - Interest—Imputation of Interest (Subtopic 835-30). This ASU simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, which is consistent with the treatment of debt discounts. The new guidance should be applied on a retrospective basis, and upon transition, an entity is required to comply with the applicable disclosures necessary for a change in accounting principle. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company reclassified deferred financing fees of $2.1 million and $2.3 million from other noncurrent assets to long-term debt as of March 31, 2016 and December 31, 2015, respectively.

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 will be effective for the Company on January 1, 2017. Early adoption is permitted. The Company does not expect the impact of the adoption of this ASU to have a material impact on its consolidated financial position, results of operations and cash flows.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this ASU are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company does not expect the impact of the adoption of this ASU to have a material impact on its consolidated financial position.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements.

6

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends Accounting Standards Codification Topic 718, Compensation – Stock Compensation.  ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements.

NOTE 2. INVENTORIES

Information regarding the Company's inventories is as follows (in thousands):

	March 31, 2016		December 31, 2015
Raw materials	$	61,857	$	58,412
Work-in-process	7,885		7,470
Finished goods	78,509		74,916
	$	148,251	$	140,798

Inventory reserves for obsolescence and other estimated losses were $8.8 million and $8.3 million at March 31, 2016 and December 31, 2015, respectively, and have been included in the amounts above.

NOTE 3. INCOME TAXES

The Company’s income tax provision consists of federal, state and foreign income taxes. The tax provisions for the three months endedMarch 31, 2016 and 2015 were based on the estimated effective tax rates applicable for the full years ending December 31, 2016 and 2015, which includes items specifically related to the interim periods. The Company’s effective tax rate was 37.6% and 36.8% for the three months endedMarch 31, 2016 and 2015, respectively. The change in the Company's effective tax rate for the three months endedMarch 31, 2016 was primarily a result of the geographic mix of pretax income and the varying effective tax rates in the countries and states in which the Company operates.

As of March 31, 2016 and December 31, 2015, the Company had unrecognized tax benefits of approximately $4.1 million and $4.4 million, respectively. These unrecognized tax benefit amounts would affect the effective tax rate if recognized. As of March 31, 2016, the Company is subject to U.S. Federal income tax examinations for the tax years 2012 through 2015, and to non-U.S. income tax examinations for the tax years 2009 through 2015. In addition, the Company is subject to state and local income tax examinations for the tax years 2011 through 2015.

NOTE 4. 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.

7

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in the warranty reserve are as follows (in thousands):

Balance, December 31, 2015	$	8,513
Provision for warranty claims	1,576
Warranty claims paid	(1,508		)
Foreign currency translation adjustment	24
Balance, March 31, 2016	$	8,605

Warranty expense for the three months endedMarch 31, 2016 and 2015 was $1.6 million and $1.7 million, respectively.

NOTE 5. INDEBTEDNESS

The Company's long-term debt is summarized as follows (in thousands):

	March 31, 2016		December 31, 2015
Balance of revolving credit facility	$	39,500	$	37,000
Balance of term loan	182,500		185,000
Total long-term debt	222,000		222,000
Less: Current maturities of long-term debt	10,000		10,000
Less: Deferred financing fees, net	2,116		2,282
Long-term debt	$	209,884	$	209,718

NOTE 6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component for the three months endedMarch 31, 2016 (in thousands):

	Foreign Currency Translation Adjustment			Pension and Other Post-Retirement Liability Adjustment			Total
Balance, as of December 31, 2015	$	(14,486	)	$	(22,832	)	$	(37,318	)
Other comprehensive income before reclassifications	4,049			—			4,049
Amounts reclassified from accumulated other comprehensive income	—			138			138
Net current-period other comprehensive income	4,049			138			4,187
Balance, as of March 31, 2016	$	(10,437	)	$	(22,694	)	$	(33,131	)

8

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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
	March 31, 2016			March 31, 2015
Amortization of pension and other post-retirement liability adjustments
Prior service credits (1)	$	280		$	72
Actuarial losses (1)	(61		)	(2,258		)
Total before tax	219			(2,186		)
Tax (expense) benefit	(81		)	804
Net of tax	$	138		$	(1,382	)

(1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 7 for additional information.

NOTE 7. PENSION AND OTHER POSTRETIREMENT BENEFITS

The following table sets forth the components of the net periodic benefit cost for the Company's pension and other postretirement benefit plans (in thousands):

	Pension Benefits						Other Benefits
	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016			2015
Service cost	$	468		$	1,887		$	—		$	4
Interest cost	2,416			3,114			49			80
Expected return on plan assets	(3,612		)	(3,655		)	—			—
Amortization of prior service credit	—			—			(280		)	(72		)
Recognized actuarial loss (gain)	123			2,166			(62		)	92
Net periodic benefit (income) cost	$	(605	)	$	3,512		$	(293	)	$	104

For the three months endedMarch 31, 2016, $0.3 million of pension income was recognized in cost of sales and $0.3 million was recognized in selling, general, and administrative expenses. For the three months endedMarch 31, 2015, $2.0 million of pension expense was incurred in cost of sales and $1.5 million was incurred in selling, general, and administrative expenses.

9

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. COMMON STOCK AND 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 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 March 31,
	2016		2015
Numerator:
Net earnings attributable to Knoll, Inc. stockholders	$	17,259	$	17,443
Denominator:
Denominator for basic earnings per shares - weighted-average shares	47,905		47,648
Effect of dilutive securities:
Potentially dilutive shares resulting from stock plans	666		705
Denominator for diluted earnings per share - weighted-average shares	48,571		48,353
Antidilutive equity awards not included in weighted-average common shares—diluted	—		—
Net earnings per common share attributable to Knoll, Inc. stockholders:
Basic	$	0.36	$	0.37
Diluted	$	0.36	$	0.36

NOTE 9. EQUITY

The following table shows the change in equity attributable to Knoll, Inc. stockholders and noncontrolling interests during the three months endedMarch 31, 2016 (in thousands):

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Knoll, Inc. Stockholders' Equity			Noncontrolling Interests		Total Equity
Balance at December 31, 2015	$	488		$	47,165		$	244,947		$	(37,318	)	$	255,282		$	192	$	255,474
Net earnings	—			—			17,259			—			17,259			11		17,270
Other comprehensive income	—			—			—			4,187			4,187			—		4,187
Shares issued for consideration:
Exercise of stock options (33,583 shares)	—			374			—			—			374			—		374
Income tax effect from the exercise of stock options and vesting of equity awards	—			141			—			—			141			—		141
Shares issued under stock incentive plan (297,632)	3			(3		)	—			—			—			—		—
Shares issued to Board of Directors in lieu of cash (1,154 shares)	—			25			—			—			25			—		25
Stock-based compensation	—			2,138			—			—			2,138			—		2,138
Cash dividend ($0.15 per share)	—			—			(7,461		)	—			(7,461		)	—		(7,461		)
Purchase of common stock (104,261 shares)	(1		)	(1,902		)	—			—			(1,903		)	—		(1,903		)
Balance at March 31, 2016	$	490		$	47,938		$	254,745		$	(33,131	)	$	270,042		$	203	$	270,245

10

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Financial Instruments

The fair values of the Company’s cash and cash equivalents, accounts receivable, and accounts payable approximate carrying value due to their short maturities.

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 March 31, 2016								Fair Value as of December 31, 2015
Liabilities:	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Contingent purchase price payment	$	—	$	—	$	6,000	$	6,000	$	—	$	—	$	11,000	$	11,000

Pursuant to the agreement governing the acquisition of HOLLY HUNT®, the Company may be required to make annual contingent purchase price payments. The payouts are based upon HOLLY HUNT® reaching an annual net sales target, for each year through 2016, and are paid out on or around February 20 of the following calendar year. 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 $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 $5.0 million of the remaining $11.0 million contingent purchase price in the three months ended March 31, 2016, as a result of HOLLY HUNT® achieving the 2015 net sales projections. 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 would 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 March 31, 2016 or December 31, 2015.

11

KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. SEGMENT INFORMATION

The following information below categorizes certain financial information into the Company's reportable segments for the three months endedMarch 31,2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016		2015
SALES
Office	$	185,356	$	167,723
Studio	71,506		70,194
Coverings	27,767		28,581
Knoll, Inc.	$	284,629	$	266,498
INTERSEGMENT SALES (1)
Office	$	581	$	486
Studio	1,305		1,380
Coverings	2,247		1,925
Knoll, Inc.	$	4,133	$	3,791
OPERATING PROFIT
Office	$	16,596	$	7,246
Studio	9,043		8,952
Coverings	6,210		6,101
Knoll, Inc.(2)	$	31,849	$	22,299

_______________________________________________________________________________

(1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities.

(2) The Company does not allocate interest expense or other (income) expense, net to the reportable segments.

12

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's discussion and analysis of financial condition and results of operations provides an account of our financial performance and financial condition that should be read in conjunction with the accompanying unaudited condensed consolidated financial statements.

Forward-looking Statements

This Quarterly report on Form 10-Q contains forward-looking statements, principally in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures About Market Risk.” Statements and financial discussion and analysis contained in this Form 10-Q that are not historical facts are forward-looking statements. These statements discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to us, based on our current beliefs as well as assumptions made by us and information currently available to us. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” or other similar words, phrases or expressions. This includes, without limitation, our statements and expectations regarding any current or future recovery in our industry and publicly announced plans for increased capital and investment spending to achieve our long-term revenue and profitability growth goals, and our expectations with respect to leverage. Although we believe these forward-looking statements are reasonable, they are based upon a number of assumptions concerning future conditions, any or all of which may ultimately prove to be inaccurate. Important factors that could cause actual results to differ materially from the forward-looking statements include, without limitation: the risks described in Item 1A and Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2015; changes in the financial stability of our clients or the overall economic environment, resulting in decreased corporate spending and service sector employment; changes in relationships with clients; the mix of products sold and of clients purchasing our products; the success of new technology initiatives; changes in business strategies and decisions; competition from our competitors; our ability to recruit and retain an experienced management team; changes in raw material and commodity prices and availability; restrictions on government spending resulting in fewer sales to the U.S. government, one of our largest customers; our debt restrictions on spending; our ability to protect our patents, copyrights and trademarks; our reliance on furniture dealers to produce sales; lawsuits arising from patents, copyrights and trademark infringements; violations of environmental laws and regulations; potential labor disruptions; adequacy of our insurance policies; the availability of future capital; the overall strength and stability of our dealers, suppliers, and customers; access to necessary capital; our ability to successfully integrate acquired businesses; the success of our design and implementation of a new enterprise resource planning system; and currency rate fluctuations. The factors identified above are believed to be important factors (but not necessarily all of the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement. Unpredictable or unknown factors could also have material adverse effects on us. All forward-looking statements included in this Form 10-Q are expressly qualified in their entirety by the foregoing cautionary statements. Except as required under the Federal securities laws and rules and regulations of the SEC, we undertake no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

We design, manufacture, market and sell high-end furnishings and accessories, textiles, fine leathers, and designer felt, for the workplace and home. Our commitment to innovation and modern design has yielded a comprehensive portfolio of products and a brand recognized for high quality and a sophisticated image. Our products are targeted at the middle to upper end of the market and are sold primarily in North America and Europe through a direct sales force and a broad network of independent dealers, showrooms, retailers and websites.

During the last decade we have diversified our sources of revenue among our varying operating segments and, over the long run, we believe our diversification efforts and strategy will continue to result in a more profitable and less cyclical enterprise. At the same time we have continued to focus on growing and improving the operating performance of our Office segment. Recent introductions of complementary products like adjustable tables, seating and ergonomic accessories have driven our recent growth in the Office business.

As the workplace continues to evolve and the traditional boundaries between residential and contract blur, we believe our unique combination of office furnishings, KnollStudio® design classics and lounge designs, Spinneybeck | FilzFelt architectural materials and our broad range of Edelman® Leather and KnollTextiles® coverings materials helps us both capture more of our clients total spend and elevates our profitability.

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The changing balance between the allocation of office space between the individual and the group is creating opportunities outside the traditional workstation market. We are also seeing clients incrementally investing in more adjustable and high performance options. This can increase the average selling price of an individual space and, coupled with an increased focus on well-being, also creates opportunities to innovate with new types of products. We expect to introduce new products in this area later this year.

We continue to increase our footprint in the residential market through our strategy of showroom expansion, and use this foundation as a platform for growth. HOLLY HUNT®, together with residential opportunities domestically and internationally, gives us exposure to a sophisticated clientèle that is pleased to invest in the finest in modern design.

Results of Operations

Comparison of Consolidated Results for the Three Months EndedMarch 31, 2016 and 2015

	Three Months Ended March 31,						2016 vs. 2015
	2016			2015			$ Change			% Change
	(Dollars in thousands, except per share data)
Net Sales	$	284,629		$	266,498		$	18,131		6.8	%
Gross profit	107,764			95,309			12,455			13.1	%
Operating profit	31,849			22,299			9,550			42.8	%
Interest expense	1,554			1,885			(331		)	(17.6	)%
Other expense (income), net	2,604			(7,157		)	9,761			(136.4	)%
Income tax expense	10,421			10,136			285			2.8	%
Net earnings	17,270			17,435			(165		)	(0.9	)%
Net earnings attributable to Knoll, Inc. stockholders	17,259			17,443			(184		)	(1.1	)%
Net earnings per common share attributable to Knoll, Inc. stockholders:
Basic	$	0.36		$	0.37		$	(0.01	)	(2.7	)%
Diluted	$	0.36		$	0.36		$	—		—	%
Statistical Data
Gross profit %	37.9		%	35.8		%
Operating profit %	11.2		%	8.4		%

Net Sales

Net sales for the three months endedMarch 31, 2016 were $284.6 million, an increase of $18.1 million, or 6.8%, from sales of $266.5 million for the three months endedMarch 31, 2015. The increase in sales was largely due to a $17.6 million increase in our Office segment sales where we experienced growth in our complimentary products to which we have been aggressively investing as well as our core Office systems portfolio. Our Studio segment sales also increased 1.9% from the same period in the prior year, due primarily to strong sales growth at HOLLY HUNT®, partially offset by weakness in large commercial projects in Europe.

Gross Profit

Gross profit for the three months endedMarch 31, 2016 was $107.7 million, an increase of $12.4 million, or 13.1%, from gross profit of $95.3 million for the three months endedMarch 31, 2015. As a percentage of sales, gross profit increased from 35.8% for the three months endedMarch 31, 2015 to 37.9% for the three months endedMarch 31, 2016. The increase in gross profit as a percent of sales was driven primarily by the Office segment, where operating efficiencies resulting from our supply chain initiatives, capital investments and an improved fixed-cost basis that allowed us to leverage higher volumes to produce strong margin improvement.

Operating Profit

Operating profit for the three months endedMarch 31, 2016 was $31.8 million, an increase of $9.6 million, or 42.8%, from operating profit of $22.3 million for the three months endedMarch 31, 2015. The increase in operating profit was driven primarily by the Office segment resulting from higher volume as well as cost improvement benefits. Operating profit as a percentage of sales increased from 8.4% in the three months endedMarch 31, 2015 to 11.2% in the three months endedMarch 31, 2016.

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Selling, general, and administrative expenses for the three months endedMarch 31, 2016 were $75.9 million, or 26.7% of sales, compared to $73.0 million, or 27.4% of sales, for the three months endedMarch 31, 2015. The increase in operating expenses was related to the increased costs from strategic marketing initiatives, additional headcount, and higher incentive accruals related to increased profitability.

Interest Expense

Interest expense for the three months endedMarch 31, 2016 was $1.6 million, a decrease of $0.3 million from interest expense of $1.9 million for the three months endedMarch 31, 2015. The decrease in interest expense was due primarily to lower outstanding debt balances. During the three months endedMarch 31, 2016 and 2015, our weighted average interest rates were approximately 2.2% and 2.1%, respectively.

Other Expense (Income), net

Other expense for the three months endedMarch 31, 2016 was $2.6 million compared to other income for the three months endedMarch 31, 2015 of $7.2 million. Other expense for the three months endedMarch 31, 2016 was primarily related to foreign exchange losses that resulted from the revaluation of intercompany balances between our Canadian and U.S. entities. The gain in the three months endedMarch 31, 2015 was due to the settlement of an outstanding receivable with our Canadian subsidiary.

Income Tax Expense

Our effective tax rate was 37.6% for the three months endedMarch 31, 2016, compared to 36.8% for the three months endedMarch 31, 2015. The mix of pretax income and the varying effective tax rates in the countries and states in which we operate directly affects our consolidated effective tax rate.

Segment Reporting

We manage our business through three reporting segments: (1) Office (2) Studio and (3) Coverings. The Office segment includes systems, seating, storage, tables, desks and KnollExtra® ergonomic accessories as well as the international sales of our North American Office products. The Studio segment includes our KnollStudio® division, the Company's European subsidiaries which primarily sell KnollStudio products and Holly Hunt Enterprises, Inc. The KnollStudio portfolio includes a range of lounge seating, side, café and dining chairs, barstools as well as conference, dining and occasional tables. Known for style and quality, HOLLY HUNT® produces and showcases custom made product including indoor and outdoor furniture, lighting, rugs, textiles and leathers. The Coverings segment includes KnollTextiles®, Spinneybeck | FilzFelt, and Edelman® Leather. These businesses serve a wide range of customers offering high-quality textiles, felt, and leather.

Comparison of Segment Results for the Three Months EndedMarch 31, 2016 and 2015

	Three Months Ended March 31,				2016 vs. 2015
	2016		2015		$ Change			% Change
	(Dollars in thousands)
SALES
Office	$	185,356	$	167,723	$	17,633		10.5	%
Studio	71,506		70,194		1,312			1.9	%
Coverings	27,767		28,581		(814		)	(2.8	)%
Knoll, Inc.	$	284,629	$	266,498	$	18,131		6.8	%
OPERATING PROFIT
Office	$	16,596	$	7,246	$	9,350		129.0	%
Studio	9,043		8,952		91			1.0	%
Coverings	6,210		6,101		109			1.8	%
Knoll, Inc. (1)	$	31,849	$	22,299	$	9,550		42.8	%

_______________________________________________________________________________

(1) The Company does not allocate interest expense or other expense (income), net to the reportable segments.

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Office

Net sales for the Office segment for the three months endedMarch 31, 2016 were $185.3 million, an increase of $17.6 million, or 10.5%, when compared with the three months endedMarch 31, 2015. The increase in the Office segment was led by recent introductions in complementary products including our height-adjustable tables and storage products, as well as solid growth in our core Office systems portfolio. Operating profit for the Office segment in the three months endedMarch 31, 2016 was $16.6 million, an increase of $9.4 million, or 129.0%, when compared with the three months endedMarch 31, 2015. The increase in operating profit was mainly the result of higher volume as well as cost improvement benefits from more efficiency and continued work in our plants.

Studio

Net sales for the Studio segment for the three months endedMarch 31, 2016 were $71.5 million, an increase of $1.3 million, or 1.9%, when compared with the three months endedMarch 31, 2015. This increase was primarily driven by HOLLY HUNT, partially offset by weakness in large commercial projects in Europe. Operating profit for the Studio segment in the three months endedMarch 31, 2016 was $9.0 million, an increase of $0.1 million, or 1.0%, when compared with the three months endedMarch 31, 2015. The increase in operating profit was driven by net price realization, cost improvement efficiencies, increased sales volume and foreign exchange benefits.

Coverings

Net sales for the Coverings segment for the three months endedMarch 31, 2016 were $27.8 million, a decrease of $0.8 million, or 2.8%, when compared with the three months endedMarch 31, 2015. Continued year-over-year growth in Spinneybeck | FilzFelt sales was offset by weakness at KnollTextiles. Operating profit for the Coverings segment in the three months endedMarch 31, 2016 was $6.2 million, an increase of $0.1 million, or 1.8%, when compared with the three months endedMarch 31, 2015.

Liquidity and Capital Resources

The following table highlights certain key cash flows and capital information pertinent to the discussion that follows:

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Cash provided by operating activities	$	21,115		$	(26,055	)
Capital expenditures, net	(7,017		)	(4,864		)
Purchase of common stock for treasury	(1,902		)	(6,067		)
Proceeds from credit facilities	99,500			101,000
Repayment of credit facilities	(99,500		)	(59,000		)
Payment of dividends	(7,196		)	(5,729		)
Contingent purchase price payment	(5,000		)	(5,000		)
Cash (used in) provided by financing activities	(13,558		)	29,688

We have historically funded our business through cash generated from operations, supplemented by debt borrowings. Available cash is primarily used for our working capital needs, ongoing operations, capital expenditures, the payment of quarterly dividends, and the repurchase of shares. Our investment in capital expenditures shows our commitment to improving our operating efficiency, innovation and modernization, and includes leasehold improvements for our showrooms, new product tooling, manufacturing equipment and technology.

Cash provided by operating activities was $21.1 million for the three months endedMarch 31, 2016 compared to cash used by operating activities of $26.1 million for the three months endedMarch 31, 2015. For the three months endedMarch 31, 2016, cash provided by operating activities consisted primarily of $27.0 million from net income and various non-cash charges, partially offset by $5.8 million of unfavorable changes in assets and liabilities. For the three months endedMarch 31, 2015, cash used by operating activities consisted of $17.7 million from net income and various non-cash charges, which included $1.4 million of stock compensation expense, and $43.8 million of unfavorable changes in assets and liabilities. Working capital needs for the first quarter of 2015 included increased inventories for newly opened HOLLY HUNT showrooms and to improve our quick ship programs on certain offerings. Accounts payable has been reduced from year-end as we paid for capital expenditures, inventory, and enterprise resource planning system expenses related to the fourth quarter of 2014.

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For the three months endedMarch 31, 2016, we used $7.2 million of cash to fund dividend payments to shareholders, $7.0 million for capital expenditures, $5.0 million for the HOLLY HUNT contingent purchase price payment, and $1.9 million for share repurchases. For the three months endedMarch 31, 2015, cash provided by financing activities was used to fund $4.9 million of capital expenditures as well as working capital needs. Working capital needs for the first quarter of 2015 included increased inventories for newly opened HOLLY HUNT showrooms and to improve our quick ship programs on certain offerings.

We use our credit facility in the ordinary course of business to fund our working capital needs and, at times, make significant borrowings and repayments under the facility depending on our cash needs and availability at such time. As of March 31, 2016 and December 31, 2015, there was approximately $222.0 million outstanding under our credit facility. Borrowings under the credit facility may be repaid at any time, but no later than May 2019.

Our credit facility requires that we comply with two financial covenants, consolidated leverage ratio, defined as the ratio of total indebtedness to consolidated EBITDA (as defined in our credit agreement) and consolidated interest coverage ratio, defined as the ratio of our consolidated EBITDA (as defined in our credit agreement) to our consolidated interest expense. Our consolidated leverage ratio cannot exceed 4.0 to 1, and our consolidated interest coverage ratio must be a minimum of 3.0 to 1. We are also required to comply with various other affirmative and negative covenants including, without limitation, covenants that prevent or restrict our ability to pay dividends, engage in certain mergers or acquisitions, make certain investments or loans, incur future indebtedness, engage in sale-leaseback transactions, alter our capital structure or line of business, prepay subordinated indebtedness, engage in certain transactions with affiliates and sell stock or assets.

We are currently in compliance with all of the covenants and conditions under our credit facility. We believe that existing cash balances and internally generated cash flows, together with borrowings available under our credit facility, will be sufficient to fund working capital needs, capital spending requirements, debt service requirements and dividend payments for at least the next twelve months. However, because of the financial covenants mentioned above, our capacity under our credit facility could be reduced if our trailing consolidated EBITDA (as defined by our credit agreement) declines due to deteriorating market conditions or poor performance. Future debt payments may be paid out of cash flows from operations, from future refinancing of our debt or from equity issuances. Our ability to make scheduled payments of principal, pay interest on or to refinance our indebtedness, satisfy our other debt obligations and to pay dividends to stockholders will depend upon our future operating performance, which is affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

Reconciliation of Non-GAAP Financial Measures

This quarterly report on Form 10-Q contains certain non-GAAP financial measures. A “non-GAAP financial measure” is a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). We present non-GAAP measures because we consider them to be important supplemental measures of our performance and believe them to be useful to display ongoing results from operations distinct from items that are infrequent or not indicative of our operating performance. Pursuant to applicable reporting requirements, the Company has provided reconciliations below of non-GAAP financial measures to the most directly comparable GAAP measure.

The non-GAAP financial measures presented within this press release are Last Twelve Months (“LTM”) Adjusted EBITDA. These non-GAAP measures are not indicators of our financial performance under GAAP and should not be considered as an alternative to the applicable GAAP measure. These non-GAAP measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In addition, in evaluating these non-GAAP measures, you should be aware that in the future we may incur adjustments similar to those in this presentation. Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results and using non-GAAP measures only as supplemental presentations.

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The following table reconciles net earnings to adjusted EBITDA and computes our bank leverage calculations for the periods shown. The bank leverage calculation is in accordance with our Second Amended and Restated Credit Agreement dated May 20, 2014.

	March 31, 2015		June 30, 2015		September 30, 2015		December 31, 2015		March 31, 2016
	(in millions)
Debt Levels (1)	$	316.7	$	290.7	$	274.2	$	238.7	$	233.7
LTM Net Earnings	56.2		62.6		64.8		66.0		65.8
LTM Adjustments
Interest	6.9		6.8		6.6		6.1		6.2
Taxes	35.0		37.2		39.1		37.5		37.8
Depreciation and Amortization	20.6		21.1		21.2		21.3		21.3
Non-cash items and Other (2)	5.7		3.3		6.0		12.5		21.9
LTM Adjusted EBITDA	$	124.4	$	131.0	$	137.7	$	143.4	$	153.0
Bank Leverage Calculation (3)	2.55		2.22		1.99		1.67		1.53

(1) Outstanding debt levels include outstanding letters of credit and guarantee obligations. Excess cash over $15.0 million reduces outstanding debt per the terms of our credit facility, a copy of which was filed with the Securities and Exchange Commission on May 21, 2014.

(2) Non-cash items include, but are not limited to, an intangible asset impairment charge, a pension settlement and other postretirement benefit curtailment, stock-based compensation expenses, unrealized gains and losses on foreign exchange, and restructuring charges.

(3) Debt divided by LTM (Last Twelve Months) adjusted EBITDA, as calculated in accordance with our credit facility.

Environmental Matters

Our past and present business operations and the past and present ownership and operation of manufacturing plants on real property are subject to extensive and changing federal, state, local and foreign environmental laws and regulations, including those relating to discharges to air, water and land, the handling and disposal of solid and hazardous waste and the cleanup of properties affected by hazardous substances. As a result, we are involved from time-to-time in administrative and judicial proceedings and inquiries relating to environmental matters and could become subject to fines or penalties related thereto. We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist. Compliance with more stringent laws or regulations, or stricter interpretation of existing laws, may require additional expenditures by us, some of which may be material. We have been identified as a potentially responsible party pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) for remediation costs associated with waste disposal sites that we previously used. The remediation costs and our allocated share at some of these CERCLA sites are unknown. We may also be subject to claims for personal injury or contribution relating to CERCLA sites. We reserve amounts for such matters when expenditures are probable and reasonably estimable.

Off-Balance Sheet Arrangements

We do not currently have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special-purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange-traded contracts. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Critical Accounting Policies

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires us to make estimates and assumptions that affect the reported amounts and disclosures in the condensed consolidated financial statements.  Actual results may differ from such estimates. On an ongoing basis, we review our accounting policies and procedures.  A more detailed review of our critical accounting policies is contained in our Annual Report on Form 10-K for the year ended December 31, 2015.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We provided a discussion of our market risk in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2015. There have been no substantive changes in our market risk described in our Annual Report on Form 10-K except for the items noted below. During the normal course of business, we are routinely subjected to market risk associated with interest rate movements and foreign currency exchange rate movements. Interest rate risk arises from our debt obligations and foreign currency exchange rate risk arises from our non-U.S. operations and purchases of inventory from foreign suppliers.

We also have risk in our exposure to certain materials and transportation costs. Steel, leather, wood products and plastics are all used in our products. For the three months endedMarch 31, 2016, we estimated that materials deflation was approximately $0.6 million and transportation inflation was less than $0.1 million. During the three months endedMarch 31, 2015, we estimated that materials and transportation inflation were approximately $0.8 million and $0.4 million, respectively. We continue to work to offset price increases in raw materials and transportation through our global sourcing initiatives, cost improvements and price increases to our products.

Interest Rate Risk

We have variable rate debt obligations that are denominated in U.S. dollars. A change in interest rates will impact the interest costs incurred and cash paid on the variable rate debt. During the three months endedMarch 31, 2016 and 2015, our weighted average interest rates were approximately 2.2% and 2.1%, respectively.

Foreign Currency Exchange Rate Risk

We manufacture our products in the United States, Canada and Italy, and sell our products primarily in those markets as well as in other European countries. Our foreign sales and certain expenses are transacted in foreign currencies. Our production costs, profit margins and competitive position are affected by the strength of the currencies in countries where we manufacture or purchase goods relative to the strength of the currencies in countries where our products are sold. Additionally, as our reporting currency is the U.S. dollar, our financial position is affected by the strength of the currencies in countries where we have operations relative to the strength of the U.S. dollar. The principal foreign currencies in which we conduct business are the Canadian dollar and the Euro. Approximately 10.8% and 11.3% of our revenues in the three months endedMarch 31, 2016 and 2015, respectively, and 26.8% and 27.2% of our cost of goods sold in the three months endedMarch 31, 2016 and 2015, respectively, were denominated in currencies other than the U.S. dollar. Foreign currency exchange rate fluctuations resulted in $2.6 million of translation losses and $7.4 million of translation gains for the three months endedMarch 31, 2016 and 2015, respectively.

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ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.    We, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report (March 31, 2016) ("Disclosure Controls"). Based upon the Disclosure Controls evaluation, our principal executive officer and principal financial officer have concluded that the Disclosure Controls are effective in reaching a reasonable level of assurance that (i) information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting.  There have been no changes in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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KNOLL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For the three months endedMarch 31, 2016, there have been no new material legal proceedings or material changes in the legal proceedings disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

ITEM 1A. RISK FACTORS

For the three months endedMarch 31, 2016, there have been no material changes in the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND THE USE OF PROCEEDS

Repurchases of Equity Securities

The following is a summary of share repurchase activity during the three months endedMarch 31, 2016.

On August 17, 2005, our board of directors approved a stock repurchase program (the “Options Proceeds Program”), whereby they authorized us to purchase shares of our common stock in the open market using the cash proceeds received by us upon exercise of outstanding options.

On February 2, 2006, our board of directors approved an additional stock repurchase program, pursuant to which we are authorized to purchase up to $50.0 million of our common stock in the open market, through privately negotiated transactions, or otherwise. On February 4, 2008, our board of directors expanded this previously authorized $50.0 million stock repurchase program by an additional $50.0 million.

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (1)
January 1, 2016 - January 31, 2016	—		$	—	—		$	32,352,413
February 1, 2016 - February 29, 2016	91,692	(2)	$	18.07	—		$	32,352,413
March 1, 2016 - March 31, 2016	12,569		$	19.58	12,569	(3)	$	32,352,413
Total	104,261				12,569

_______________________________________________________________________________

(1) There is no limit on the number or value of shares that may be purchased by us under the Options Proceeds Program. Under our $50.0 million stock repurchase program, which was expanded by an additional $50.0 million in February 2008, we are only authorized to spend an aggregate of $100.0 million on stock repurchases. Amounts in this column represent the amounts that remain available under the $100.0 million stock repurchase program as of the end of the period indicated. There is no scheduled expiration date for the Option Proceeds Program or the $100.0 million stock repurchase program, but our Board of Directors may terminate either program in the future.

(2) In February 2016, 216,945 shares of outstanding restricted stock vested. Concurrently with the vesting, 130,681 shares were forfeited by the holders of the restricted shares to cover applicable taxes paid on the holders' behalf by the Company.

(3) These shares were purchased under the Options Proceeds Program.

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ITEM 6.  EXHIBITS

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015, (ii) Condensed Consolidated Statements of Operations and Other Comprehensive Income for the three months ended March 31, 2016 and 2015, (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015, and (iv) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.*

* The Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

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 thereunto duly authorized.

KNOLL, INC.
(Registrant)
Date:	May 10, 2016
		By:	/s/ Andrew B. Cogan
			Andrew B. Cogan
			Chief Executive Officer
Date:	May 10, 2016
		By:	/s/ Craig B. Spray
			Craig B. Spray
			Chief Financial Officer
			(Chief Accounting Officer)

23

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

I, Andrew B. Cogan, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2016 of Knoll, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to material affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2016
	/s/ Andrew B. Cogan
	Andrew B. Cogan
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

I, Craig B. Spray, certify that:

(1) I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2016 of Knoll, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to material affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2016
	/s/ Craig B. Spray
	Craig B. Spray
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

In connection with the Quarterly Report on Form 10-Q of Knoll, Inc. (the “Company”) for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Andrew B. Cogan, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002), that to my knowledge:

a. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

b. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 10, 2016

/s/ Andrew B. Cogan

Andrew B. Cogan

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

In connection with the Quarterly Report on Form 10-Q of Knoll, Inc. (the “Company”) for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Craig B. Spray, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002), that to my knowledge:

a. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

b. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 10, 2016

/s/ Craig B. Spray

Craig B. Spray

Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 09, 2016
Document Information [Line Items]
Entity Registrant Name	KNOLL INC
Entity Central Index Key	0001011570
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		49,061,283
Restricted stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,050,497

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 5,348	$ 4,192
Customer receivables, net of allowance for doubtful accounts of $8,196 and $7,919, respectively	108,237	116,532
Inventories, net	148,251	140,798
Deferred income taxes	20,399	20,485
Prepaid and other current assets	19,102	26,765
Total current assets	301,337	308,772
Property, plant, and equipment, net	175,533	172,142
Goodwill	128,174	127,671
Intangible assets, net	239,347	240,169
Other non-trade receivables	2,126	2,254
Other noncurrent assets	948	2,795
Total assets	847,465	853,803
Current liabilities:
Current maturities of long-term debt	10,000	10,000
Accounts payable	90,944	89,552
Income taxes payable	160	1,580
Other current liabilities	99,460	114,908
Total current liabilities	200,564	216,040
Long-term debt	209,884	209,718
Deferred income taxes	77,875	75,959
Postretirement benefits other than pensions	5,748	6,294
Pension liability	62,936	63,441
Other current liabilities	20,213	26,877
Total liabilities	$ 577,220	$ 598,329
Commitments and contingent liabilities
Equity:
Common stock, $0.01 par value; 200,000,000 shares authorized; 64,659,498 shares issued and 49,046,789 shares outstanding (including 1,071,285 non-voting restricted shares and net of 15,612,709 treasury shares) at March 31, 2016 and 64,603,344 shares issued and 48,822,013 shares outstanding (including 993,934 non-voting restricted shares and net of 15,781,331 treasury shares) at December 31, 2015	$ 490	$ 488
Additional paid-in capital	47,938	47,165
Retained earnings	254,745	244,947
Accumulated other comprehensive loss	(33,131)	(37,318)
Total Knoll, Inc. stockholders' equity	270,042	255,282
Noncontrolling interests	203	192
Total equity	270,245	255,474
Total liabilities and equity	$ 847,465	$ 853,803

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowance for Doubtful Accounts Receivable	$ 8,196	$ 7,919
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	64,659,498	64,603,344
Common stock, shares outstanding	49,046,789	48,822,013
Non-vesting restricted shares	1,071,285	993,934
Treasury Stock, Shares	15,612,709	15,781,331

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Sales	$ 284,629	$ 266,498
Cost of sales	176,865	171,189
Gross profit	107,764	95,309
Selling, general, and administrative expenses	75,915	73,010
Operating profit	31,849	22,299
Interest expense	1,554	1,885
Other expense (income), net	2,604	(7,157)
Income before income tax expense	27,691	27,571
Income tax expense	10,421	10,136
Net earnings	17,270	17,435
Net earnings (loss) attributable to noncontrolling interests	11	(8)
Net earnings attributable to Knoll, Inc. stockholders	$ 17,259	$ 17,443
Net earnings per common share attributable to Knoll, Inc. stockholders:
Basic (in dollars per share)	$ 0.36	$ 0.37
Diluted (in dollars per share)	0.36	0.36
Dividends per share (in dollars per share)	$ 0.15	$ 0.12
Weighted-average number of common shares outstanding:
Basic (in shares)	47,904,593	47,647,961
Diluted (in shares)	48,570,895	48,353,047
Other comprehensive income (loss):
Pension and other postretirement liability adjustment, net of tax	$ 138	$ 1,382
Foreign currency translation adjustment	4,049	(12,999)
Total other comprehensive income (loss), net of tax	4,187	(11,617)
Comprehensive income attributable to Knoll, Inc. stockholders	21,457	5,818
Comprehensive income (loss) attributable to noncontrolling interests	11	(8)
Comprehensive income attributable to Knoll, Inc. stockholders	$ 21,446	$ 5,826

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITES
Net earnings	$ 17,270	$ 17,435
Adjustments to reconcile net earnings to cash provided by (used in) operating activities:
Depreciation	4,560	4,303
Amortization expense (including deferred financing fees)	989	962
Inventory obsolescence	647	397
Loss on disposal of property, plant and equipment	7	11
Unrealized foreign currency losses (gains)	1,262	(7,271)
Stock-based compensation	2,138	1,385
Bad debt and customer credits	91	476
Changes in assets and liabilities:
Customer receivables	8,570	(9,030)
Inventories	(7,348)	(6,104)
Accounts payable	1,299	(29,318)
Current income taxes	578	3,337
Other current assets	7,749	(1,229)
Other current liabilities	(16,393)	(5,334)
Other noncurrent assets and liabilities	(304)	3,925
Cash provided by (used in) operating activities	21,115	(26,055)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net	(7,017)	(4,864)
Cash used in investing activities	(7,017)	(4,864)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from credit facility	99,500	101,000
Repayment of credit facility	(99,500)	(59,000)
Payment of dividends	(7,196)	(5,729)
Proceeds from the issuance of common stock	399	3,826
Purchase of common stock for treasury	(1,902)	(6,067)
Contingent purchase price payment	(5,000)	(5,000)
Tax benefit from the exercise of stock options and vesting of equity awards	141	658
Cash (used in) provided by financing activities	(13,558)	29,688
Effect of exchange rate changes on cash and cash equivalents	616	(3,115)
Net increase (decrease) in cash and cash equivalents	1,156	(4,346)
Cash and cash equivalents at beginning of period	4,192	19,021
Supplemental disclosure of cash flow information:	$ 5,348	$ 14,675

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2015

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 pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.  The consolidated balance sheet of the Company, as of December 31, 2015, 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 which are, in the opinion of management, necessary to summarize fairly the financial position of the Company and the results of the Company’s operations and cash flows for the periods presented. 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 Form 10-K for the year ended December 31, 2015.

New Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition, and most industry-specific guidance throughout the Accounting Standards Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2017, and for interim periods therein. The guidance permits the use of either a full retrospective or modified retrospective transition method. The Company has not yet selected a transition method and is currently evaluating the impact of the amended guidance on the consolidated financial position, results of operations and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03 - Interest—Imputation of Interest (Subtopic 835-30). This ASU simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, which is consistent with the treatment of debt discounts. The new guidance should be applied on a retrospective basis, and upon transition, an entity is required to comply with the applicable disclosures necessary for a change in accounting principle. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company reclassified deferred financing fees of $2.1 million and $2.3 million from other noncurrent assets to long-term debt as of March 31, 2016 and December 31, 2015, respectively.

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 will be effective for the Company on January 1, 2017. Early adoption is permitted. The Company does not expect the impact of the adoption of this ASU to have a material impact on its consolidated financial position, results of operations and cash flows.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this ASU are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company does not expect the impact of the adoption of this ASU to have a material impact on its consolidated financial position.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends Accounting Standards Codification Topic 718, Compensation – Stock Compensation.  ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements.

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INVENTORIES

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

INVENTORIES

INVENTORIES

Information regarding the Company's inventories is as follows (in thousands):

	March 31, 2016		December 31, 2015
Raw materials	$	61,857	$	58,412
Work-in-process	7,885		7,470
Finished goods	78,509		74,916
	$	148,251	$	140,798

Inventory reserves for obsolescence and other estimated losses were $8.8 million and $8.3 million at March 31, 2016 and December 31, 2015, respectively, and have been included in the amounts above.

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INCOME TAXES

3 Months Ended

Mar. 31, 2016

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 endedMarch 31, 2016 and 2015 were based on the estimated effective tax rates applicable for the full years ending December 31, 2016 and 2015, which includes items specifically related to the interim periods. The Company’s effective tax rate was 37.6% and 36.8% for the three months endedMarch 31, 2016 and 2015, respectively. The change in the Company's effective tax rate for the three months endedMarch 31, 2016 was primarily a result of the geographic mix of pretax income and the varying effective tax rates in the countries and states in which the Company operates.

As of March 31, 2016 and December 31, 2015, the Company had unrecognized tax benefits of approximately $4.1 million and $4.4 million, respectively. These unrecognized tax benefit amounts would affect the effective tax rate if recognized. As of March 31, 2016, the Company is subject to U.S. Federal income tax examinations for the tax years 2012 through 2015, and to non-U.S. income tax examinations for the tax years 2009 through 2015. In addition, the Company is subject to state and local income tax examinations for the tax years 2011 through 2015.

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CONTINGENT LIABILITIES AND COMMITMENTS

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

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, 2015	$	8,513
Provision for warranty claims	1,576
Warranty claims paid	(1,508		)
Foreign currency translation adjustment	24
Balance, March 31, 2016	$	8,605

Warranty expense for the three months endedMarch 31, 2016 and 2015 was $1.6 million and $1.7 million, respectively.

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INDEBTEDNESS

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

INDEBTEDNESS

INDEBTEDNESS

The Company's long-term debt is summarized as follows (in thousands):

	March 31, 2016		December 31, 2015
Balance of revolving credit facility	$	39,500	$	37,000
Balance of term loan	182,500		185,000
Total long-term debt	222,000		222,000
Less: Current maturities of long-term debt	10,000		10,000
Less: Deferred financing fees, net	2,116		2,282
Long-term debt	$	209,884	$	209,718

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2016

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 three months endedMarch 31, 2016 (in thousands):

	Foreign Currency Translation Adjustment			Pension and Other Post-Retirement Liability Adjustment			Total
Balance, as of December 31, 2015	$	(14,486	)	$	(22,832	)	$	(37,318	)
Other comprehensive income before reclassifications	4,049			—			4,049
Amounts reclassified from accumulated other comprehensive income	—			138			138
Net current-period other comprehensive income	4,049			138			4,187
Balance, as of March 31, 2016	$	(10,437	)	$	(22,694	)	$	(33,131	)

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
	March 31, 2016			March 31, 2015
Amortization of pension and other post-retirement liability adjustments
Prior service credits (1)	$	280		$	72
Actuarial losses (1)	(61		)	(2,258		)
Total before tax	219			(2,186		)
Tax (expense) benefit	(81		)	804
Net of tax	$	138		$	(1,382	)

(1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 7 for additional information.

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PENSION AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Mar. 31, 2016

Pension and Other Postretirement Benefit Expense [Abstract]

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

The following table sets forth the components of the net periodic benefit cost for the Company's pension and other postretirement benefit plans (in thousands):

	Pension Benefits						Other Benefits
	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016			2015
Service cost	$	468		$	1,887		$	—		$	4
Interest cost	2,416			3,114			49			80
Expected return on plan assets	(3,612		)	(3,655		)	—			—
Amortization of prior service credit	—			—			(280		)	(72		)
Recognized actuarial loss (gain)	123			2,166			(62		)	92
Net periodic benefit (income) cost	$	(605	)	$	3,512		$	(293	)	$	104

For the three months endedMarch 31, 2016, $0.3 million of pension income was recognized in cost of sales and $0.3 million was recognized in selling, general, and administrative expenses. For the three months endedMarch 31, 2015, $2.0 million of pension expense was incurred in cost of sales and $1.5 million was incurred in selling, general, and administrative expenses.

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COMMON STOCK AND EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

COMMON STOCK AND EARNINGS PER SHARE

COMMON STOCK AND 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 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 March 31,
	2016		2015
Numerator:
Net earnings attributable to Knoll, Inc. stockholders	$	17,259	$	17,443
Denominator:
Denominator for basic earnings per shares - weighted-average shares	47,905		47,648
Effect of dilutive securities:
Potentially dilutive shares resulting from stock plans	666		705
Denominator for diluted earnings per share - weighted-average shares	48,571		48,353
Antidilutive equity awards not included in weighted-average common shares—diluted	—		—
Net earnings per common share attributable to Knoll, Inc. stockholders:
Basic	$	0.36	$	0.37
Diluted	$	0.36	$	0.36

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EQUITY

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

EQUITY

EQUITY

The following table shows the change in equity attributable to Knoll, Inc. stockholders and noncontrolling interests during the three months endedMarch 31, 2016 (in thousands):

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Knoll, Inc. Stockholders' Equity			Noncontrolling Interests		Total Equity
Balance at December 31, 2015	$	488		$	47,165		$	244,947		$	(37,318	)	$	255,282		$	192	$	255,474
Net earnings	—			—			17,259			—			17,259			11		17,270
Other comprehensive income	—			—			—			4,187			4,187			—		4,187
Shares issued for consideration:
Exercise of stock options (33,583 shares)	—			374			—			—			374			—		374
Income tax effect from the exercise of stock options and vesting of equity awards	—			141			—			—			141			—		141
Shares issued under stock incentive plan (297,632)	3			(3		)	—			—			—			—		—
Shares issued to Board of Directors in lieu of cash (1,154 shares)	—			25			—			—			25			—		25
Stock-based compensation	—			2,138			—			—			2,138			—		2,138
Cash dividend ($0.15 per share)	—			—			(7,461		)	—			(7,461		)	—		(7,461		)
Purchase of common stock (104,261 shares)	(1		)	(1,902		)	—			—			(1,903		)	—		(1,903		)
Balance at March 31, 2016	$	490		$	47,938		$	254,745		$	(33,131	)	$	270,042		$	203	$	270,245

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FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2016

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, accounts receivable, and accounts payable approximate carrying value due to their short maturities.

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 March 31, 2016								Fair Value as of December 31, 2015
Liabilities:	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Contingent purchase price payment	$	—	$	—	$	6,000	$	6,000	$	—	$	—	$	11,000	$	11,000

Pursuant to the agreement governing the acquisition of HOLLY HUNT®, the Company may be required to make annual contingent purchase price payments. The payouts are based upon HOLLY HUNT® reaching an annual net sales target, for each year through 2016, and are paid out on or around February 20 of the following calendar year. 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 $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 $5.0 million of the remaining $11.0 million contingent purchase price in the three months ended March 31, 2016, as a result of HOLLY HUNT® achieving the 2015 net sales projections. 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 would 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 March 31, 2016 or December 31, 2015.

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The following information below categorizes certain financial information into the Company's reportable segments for the three months endedMarch 31,2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016		2015
SALES
Office	$	185,356	$	167,723
Studio	71,506		70,194
Coverings	27,767		28,581
Knoll, Inc.	$	284,629	$	266,498
INTERSEGMENT SALES (1)
Office	$	581	$	486
Studio	1,305		1,380
Coverings	2,247		1,925
Knoll, Inc.	$	4,133	$	3,791
OPERATING PROFIT
Office	$	16,596	$	7,246
Studio	9,043		8,952
Coverings	6,210		6,101
Knoll, Inc.(2)	$	31,849	$	22,299

_______________________________________________________________________________

(1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities.

(2) The Company does not allocate interest expense or other (income) expense, net to the reportable segments.

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BASIS OF PRESENTATION BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2016

Mar. 31, 2015

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 pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.  The consolidated balance sheet of the Company, as of December 31, 2015, 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 which are, in the opinion of management, necessary to summarize fairly the financial position of the Company and the results of the Company’s operations and cash flows for the periods presented. 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 Form 10-K for the year ended December 31, 2015.

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605, Revenue Recognition, and most industry-specific guidance throughout the Accounting Standards Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2017, and for interim periods therein. The guidance permits the use of either a full retrospective or modified retrospective transition method. The Company has not yet selected a transition method and is currently evaluating the impact of the amended guidance on the consolidated financial position, results of operations and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03 - Interest—Imputation of Interest (Subtopic 835-30). This ASU simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, which is consistent with the treatment of debt discounts. The new guidance should be applied on a retrospective basis, and upon transition, an entity is required to comply with the applicable disclosures necessary for a change in accounting principle. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company reclassified deferred financing fees of $2.1 million and $2.3 million from other noncurrent assets to long-term debt as of March 31, 2016 and December 31, 2015, respectively.

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 will be effective for the Company on January 1, 2017. Early adoption is permitted. The Company does not expect the impact of the adoption of this ASU to have a material impact on its consolidated financial position, results of operations and cash flows.

In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this ASU require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this ASU are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this ASU may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company does not expect the impact of the adoption of this ASU to have a material impact on its consolidated financial position.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends Accounting Standards Codification Topic 718, Compensation – Stock Compensation.  ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated financial statements.

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Schedule of inventories

Information regarding the Company's inventories is as follows (in thousands):

	March 31, 2016		December 31, 2015
Raw materials	$	61,857	$	58,412
Work-in-process	7,885		7,470
Finished goods	78,509		74,916
	$	148,251	$	140,798

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CONTINGENT LIABILITIES AND COMMITMENTS (Tables)

3 Months Ended

Mar. 31, 2016

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, 2015	$	8,513
Provision for warranty claims	1,576
Warranty claims paid	(1,508		)
Foreign currency translation adjustment	24
Balance, March 31, 2016	$	8,605

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INDEBTEDNESS (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Schedule of long-term debt

The Company's long-term debt is summarized as follows (in thousands):

	March 31, 2016		December 31, 2015
Balance of revolving credit facility	$	39,500	$	37,000
Balance of term loan	182,500		185,000
Total long-term debt	222,000		222,000
Less: Current maturities of long-term debt	10,000		10,000
Less: Deferred financing fees, net	2,116		2,282
Long-term debt	$	209,884	$	209,718

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2016

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 three months endedMarch 31, 2016 (in thousands):

	Foreign Currency Translation Adjustment			Pension and Other Post-Retirement Liability Adjustment			Total
Balance, as of December 31, 2015	$	(14,486	)	$	(22,832	)	$	(37,318	)
Other comprehensive income before reclassifications	4,049			—			4,049
Amounts reclassified from accumulated other comprehensive income	—			138			138
Net current-period other comprehensive income	4,049			138			4,187
Balance, as of March 31, 2016	$	(10,437	)	$	(22,694	)	$	(33,131	)

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
	March 31, 2016			March 31, 2015
Amortization of pension and other post-retirement liability adjustments
Prior service credits (1)	$	280		$	72
Actuarial losses (1)	(61		)	(2,258		)
Total before tax	219			(2,186		)
Tax (expense) benefit	(81		)	804
Net of tax	$	138		$	(1,382	)

(1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension costs. See Note 7 for additional information.

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PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

3 Months Ended

Mar. 31, 2016

Pension and Other Postretirement Benefit Expense [Abstract]

Schedule of components of the net periodic benefit cost

The following table sets forth the components of the net periodic benefit cost for the Company's pension and other postretirement benefit plans (in thousands):

	Pension Benefits						Other Benefits
	Three Months Ended March 31,						Three Months Ended March 31,
	2016			2015			2016			2015
Service cost	$	468		$	1,887		$	—		$	4
Interest cost	2,416			3,114			49			80
Expected return on plan assets	(3,612		)	(3,655		)	—			—
Amortization of prior service credit	—			—			(280		)	(72		)
Recognized actuarial loss (gain)	123			2,166			(62		)	92
Net periodic benefit (income) cost	$	(605	)	$	3,512		$	(293	)	$	104

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COMMON STOCK AND EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31,
	2016		2015
Numerator:
Net earnings attributable to Knoll, Inc. stockholders	$	17,259	$	17,443
Denominator:
Denominator for basic earnings per shares - weighted-average shares	47,905		47,648
Effect of dilutive securities:
Potentially dilutive shares resulting from stock plans	666		705
Denominator for diluted earnings per share - weighted-average shares	48,571		48,353
Antidilutive equity awards not included in weighted-average common shares—diluted	—		—
Net earnings per common share attributable to Knoll, Inc. stockholders:
Basic	$	0.36	$	0.37
Diluted	$	0.36	$	0.36

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EQUITY (Tables)

3 Months Ended

Mar. 31, 2016

Equity [Abstract]

Schedule of Stockholders Equity

The following table shows the change in equity attributable to Knoll, Inc. stockholders and noncontrolling interests during the three months endedMarch 31, 2016 (in thousands):

	Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Knoll, Inc. Stockholders' Equity			Noncontrolling Interests		Total Equity
Balance at December 31, 2015	$	488		$	47,165		$	244,947		$	(37,318	)	$	255,282		$	192	$	255,474
Net earnings	—			—			17,259			—			17,259			11		17,270
Other comprehensive income	—			—			—			4,187			4,187			—		4,187
Shares issued for consideration:
Exercise of stock options (33,583 shares)	—			374			—			—			374			—		374
Income tax effect from the exercise of stock options and vesting of equity awards	—			141			—			—			141			—		141
Shares issued under stock incentive plan (297,632)	3			(3		)	—			—			—			—		—
Shares issued to Board of Directors in lieu of cash (1,154 shares)	—			25			—			—			25			—		25
Stock-based compensation	—			2,138			—			—			2,138			—		2,138
Cash dividend ($0.15 per share)	—			—			(7,461		)	—			(7,461		)	—		(7,461		)
Purchase of common stock (104,261 shares)	(1		)	(1,902		)	—			—			(1,903		)	—		(1,903		)
Balance at March 31, 2016	$	490		$	47,938		$	254,745		$	(33,131	)	$	270,042		$	203	$	270,245

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2016

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 March 31, 2016								Fair Value as of December 31, 2015
Liabilities:	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Contingent purchase price payment	$	—	$	—	$	6,000	$	6,000	$	—	$	—	$	11,000	$	11,000

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Schedule of certain financial information related to segments

The following information below categorizes certain financial information into the Company's reportable segments for the three months endedMarch 31,2016 and 2015 (in thousands):

	Three Months Ended March 31,
	2016		2015
SALES
Office	$	185,356	$	167,723
Studio	71,506		70,194
Coverings	27,767		28,581
Knoll, Inc.	$	284,629	$	266,498
INTERSEGMENT SALES (1)
Office	$	581	$	486
Studio	1,305		1,380
Coverings	2,247		1,925
Knoll, Inc.	$	4,133	$	3,791
OPERATING PROFIT
Office	$	16,596	$	7,246
Studio	9,043		8,952
Coverings	6,210		6,101
Knoll, Inc.(2)	$	31,849	$	22,299

_______________________________________________________________________________

(1) Intersegment sales are presented on a cost-plus basis which takes into consideration the effect of transfer prices between legal entities.

(2) The Company does not allocate interest expense or other (income) expense, net to the reportable segments.

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BASIS OF PRESENTATION BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Less: Deferred financing fees, net	$ 2,116	$ 2,282

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INVENTORIES (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 61,857	$ 58,412
Work-in-process	7,885	7,470
Finished goods	78,509	74,916
Inventories, net	148,251	140,798
Inventory reserves for obsolescence and other estimated losses	$ 8,800	$ 8,300

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INCOME TAXES (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	37.60%	36.80%
Unrecognized tax benefits, which would reduce the effective tax rate if recognized	$ 4.1		$ 4.4

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CONTINGENT LIABILITIES AND COMMITMENTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Product Warranty Expense	$ 1,576	$ 1,700
Changes in warranty reserve
Balance, December 31, 2015	8,513
Warranty claims paid	(1,508)
Foreign currency translation adjustment	24
Balance, March 31, 2016	$ 8,605

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INDEBTEDNESS (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Long-term debt
Long-term debt	$ 222,000	$ 222,000
Less: Current maturities of long-term debt	10,000	10,000
Less: Deferred financing fees, net	2,116	2,282
Long-term debt	209,884	209,718
Balance of revolving credit facility
Long-term debt
Long-term debt	39,500	37,000
Term Loan
Long-term debt
Long-term debt	$ 182,500	$ 185,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($)
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance	$ (37,318)
Other comprehensive income before reclassifications	4,049
Amounts reclassified from accumulated other comprehensive income	138
Net current-period other comprehensive income	4,187
Balance	(33,131)
Foreign Currency Translation Adjustment
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance	(14,486)
Other comprehensive income before reclassifications	4,049
Amounts reclassified from accumulated other comprehensive income	0
Net current-period other comprehensive income	4,049
Balance	(10,437)
Pension and Other Post-Retirement Liability Adjustment
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Balance	(22,832)
Other comprehensive income before reclassifications	0
Amounts reclassified from accumulated other comprehensive income	138
Net current-period other comprehensive income	138
Balance	$ (22,694)

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax (expense) benefit	$ (10,421)	$ (10,136)
Net of tax	17,270
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Prior service credits	280	72
Actuarial losses	(61)	(2,258)
Total before tax	219	(2,186)
Tax (expense) benefit	(81)	804
Net of tax	$ 138	$ (1,382)

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PENSION AND OTHER POSTRETIREMENT BENEFITS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pension Benefits
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Service cost	$ 468	$ 1,887
Interest cost	2,416	3,114
Expected return on plan assets	(3,612)	(3,655)
Amortization of prior service credit	0	0
Recognized actuarial loss (gain)	123	2,166
Net periodic benefit (income) cost	(605)	3,512
Pension Benefits | Cost of sales
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Net periodic benefit (income) cost	300	2,000
Pension Benefits | Selling, General and Administrative Expenses
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Net periodic benefit (income) cost	300	1,500
Other Benefits
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
Service cost	0	4
Interest cost	49	80
Expected return on plan assets	0	0
Amortization of prior service credit	(280)	(72)
Recognized actuarial loss (gain)	(62)	92
Net periodic benefit (income) cost	$ (293)	$ 104

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COMMON STOCK AND EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share [Abstract]
Net earnings attributable to Knoll, Inc. stockholders	$ 17,259	$ 17,443
Weighted-average shares of common stock outstanding—basic (in shares)	47,904,593	47,647,961
Potentially dilutive shares resulting from stock plans (in shares)	666,000	705,000
Weighted-average common shares—diluted (in shares)	48,570,895	48,353,047
Antidilutive equity awards not included in weighted-average common shares—diluted (in shares)	0	0
Basic (in dollars per share)	$ 0.36	$ 0.37
Diluted (in dollars per share)	$ 0.36	$ 0.36

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EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	$ 255,474
Net earnings	17,270
Other comprehensive income	4,187	$ (11,617)
Exercise of stock options (33,583 shares)	374
Income tax effect from the exercise of stock options and vesting of equity awards	141
Shares issued under stock incentive plan	0
Shares issued to Board of Directors in lieu of cash (1,154 shares)	25
Stock-based compensation (117,500 shares)	2,138
Cash dividend ($0.15 per share)	(7,461)
Purchase of common stock (12,569 shares)	(1,903)
Balance	$ 270,245
Exercise of stock options (in shares)	33,583
Shares issued to Board of Directors in lieu of cash (in shares)	1,154
Stock-based compensation (in shares)	0
Cash dividend (in dollars per share)	$ 0.15
Purchase of common stock (in shares)	104,261
Sales to clients attributed to the geographic areas based on the origin of sale
Sales	$ 284,629	$ 266,498
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	488
Shares issued under stock incentive plan	3
Purchase of common stock (12,569 shares)	(1)
Balance	490
Additional Paid-In Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	47,165
Exercise of stock options (33,583 shares)	374
Income tax effect from the exercise of stock options and vesting of equity awards	141
Shares issued under stock incentive plan	(3)
Shares issued to Board of Directors in lieu of cash (1,154 shares)	25
Stock-based compensation (117,500 shares)	2,138
Purchase of common stock (12,569 shares)	(1,902)
Balance	47,938
Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	244,947
Net earnings	17,259
Cash dividend ($0.15 per share)	(7,461)
Balance	254,745
Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	(37,318)
Other comprehensive income	4,187
Balance	(33,131)
Total Knoll, Inc. Stockholders' Equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	255,282
Net earnings	17,259
Other comprehensive income	4,187
Exercise of stock options (33,583 shares)	374
Income tax effect from the exercise of stock options and vesting of equity awards	141
Shares issued under stock incentive plan	0
Shares issued to Board of Directors in lieu of cash (1,154 shares)	25
Stock-based compensation (117,500 shares)	2,138
Cash dividend ($0.15 per share)	(7,461)
Purchase of common stock (12,569 shares)	(1,903)
Balance	270,042
Noncontrolling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance	192
Net earnings	11
Other comprehensive income	0
Exercise of stock options (33,583 shares)	0
Income tax effect from the exercise of stock options and vesting of equity awards	0
Shares issued under stock incentive plan	0
Shares issued to Board of Directors in lieu of cash (1,154 shares)	0
Stock-based compensation (117,500 shares)	0
Cash dividend ($0.15 per share)	0
Purchase of common stock (12,569 shares)	0
Balance	$ 203

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Payments to Acquire Businesses	$ 5,000	$ 5,000
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent Consideration, Fair Value Disclosure	6,000		$ 11,000	$ 16,000
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent Consideration, Fair Value Disclosure	$ 6,000		$ 11,000

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SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Financial information of segments
NET SALES	$ 284,629	$ 266,498
OPERATING PROFIT	31,849	22,299
Operating Segments
Financial information of segments
NET SALES	284,629	266,498
INTERSEGMENT SALES	4,133	3,791
Office | Operating Segments
Financial information of segments
NET SALES	185,356	167,723
INTERSEGMENT SALES	581	486
OPERATING PROFIT	16,596	7,246
Studio | Operating Segments
Financial information of segments
NET SALES	71,506	70,194
INTERSEGMENT SALES	1,305	1,380
OPERATING PROFIT	9,043	8,952
Coverings | Operating Segments
Financial information of segments
NET SALES	27,767	28,581
INTERSEGMENT SALES	2,247	1,925
OPERATING PROFIT	$ 6,210	$ 6,101