© 2015 Knoll Inc.
Knoll, Inc.
Fourth Quarter 2016 Investor Presentation
Andrew Cogan, President & CEO
Craig Spray, SVP & CFO
November 14, 2016 Introducing Vladimir Kagan at HOLLY HUNT London
2 © 2016 Knoll Inc.
Forward-Looking Statements/Non-GAAP Measures
This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding Knoll, Inc.’s
expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital
expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations ,
as well as statements that include words such as "anticipate," "if," "believe," "plan," "goals," "estimate," "expect," "intend,"
"may," "could," "should," "will," and other similar expressions are forward-looking statements. This includes, without limitation,
our statements and expectations regarding any current or future recovery in our industry, our publicly announced plans for
increased capital and investment spending to achieve our long-term revenue and profitability growth goals, our expectations
with respect to our diversification strategy, our future performance in relation to our industry (BIFMA), and our expectations with
respect to leverage. Such forward-looking statements are inherently uncertain, and readers must recognize that actual results
may differ materially from the expectations of Knoll management. Knoll does not undertake a duty to update such forward-
looking statements. Factors that may cause actual results to differ materially from those in the forward-looking statements
include corporate spending and service-sector employment, price competition, acceptance of Knoll’s new products, the pricing
and availability of raw materials and components, foreign exchange rates, transportation costs, demand for high quality, well
designed furniture solutions, changes in the competitive marketplace, changes in trends in the market for furniture and
coverings, the financial strength and stability of our suppliers, customers and dealers, access to capital, our success in
designing and implementing our new enterprise resource planning system, our ability to successfully integrate acquired
businesses, and other risks identified in Knoll’s Annual Report on Form 10-K and other filings with the Securities and Exchange
Commission, as well as other cautionary statements that are made from time-to-time in Knoll’s public communications. Many
of these factors are outside of Knoll’s control.
This presentation also includes 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. We have provided reconciliations of these non-GAAP financial measures to the most directly
comparable GAAP measure in the presentation below.
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. 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.
3 © 2016 Knoll Inc.
Knoll is a constellation of design-driven brands and
people, working together with our clients to create
inspired modern interiors.
Knoll is:
Knoll Office
KnollStudio
KnollTextiles
KnollExtra
Spinneybeck | FilzFelt
Edelman Leather
HOLLY HUNT
4 © 2016 Knoll Inc.
For over 75 years, Knoll has stood for modern design.
60s 60s 90s 90s 60s 00s 00s 10s 10s 10s
Design, leadership, quality and
innovation in both the contract
and residential markets
5 © 2016 Knoll Inc.
Knoll businesses are a continuum of adjacencies,
rooted in high design and sold “to the trade”.
Luxury
Performance
Mass
Commercial Residential
Knoll Office
KnollStudio
Spinneybeck
KnollTextiles
KnollExtra
Edelman
FilzFelt
KnollLuxe HOLLY
HUNT
Global Luxury Furnishings & Coverings
High End $3.7bn, Relevant Market $37.6bn
2013 Knoll Estimate
North American Workplace BIFMA
2015 $10.2bn
US Production, Most Recent Full Year Source:
BIFMA
•Changing Work Style
•Global Requirements
•Cyclical Rebound
•Competitive Intensity
•Favorable Demographics
•High Margin
Opportunities
•Fragmented Competitors
6 © 2016 Knoll Inc.
Maximize office segment
profitability and growth
Target underpenetrated and
emerging categories and
markets for growth
Expand reach into consumer
and decorator channels around
the world
Build a responsive and efficient
customer centric service and
technology culture and
infrastructure across our
businesses
Four strategic imperatives drive our growth.
7 © 2016 Knoll Inc.
$55
$86
$114
$134
6.4% 8.2% 10.3% 11.4%
2013 2014 2015 TTM 16
$280
$372
$413
$450
32.5% 35.4% 37.4% 38.2%
2013 2014 2015 TTM 16
$0.68
$1.09
$1.52
$1.67
2013 2014 2015 TTM 16
$862
$1,050
$1,104
$1,177
2013 2014 2015 TTM 16
Our strategy has generated significant growth in
sales, margins and profits.
Adjusted Gross Profit ($ Millions) and %
Adjusted Operating Profit ($ Millions) and % Adjusted Earnings Per Share - Diluted
Sales Growth YoY – ($ Millions)
+37% +61 %
+142% +146%
a/ a/
a/
a/
a/ Represents the trailing twelve months as of September 30, 2016.
Note: Adjusted Gross Profit, Adjusted Operating Profit, and Adjusted EPS are non-GAAP financial measures. For a reconciliation of Adjusted Gross Profit, Adjusted
Operating Profit, and Adjusted EPS to GAAP Gross Profit, Operating Profit, and EPS, see pages 19 - 20.
8 © 2016 Knoll Inc.
2.23
2.41
1.67
1.25
2013 2014 2015 TTM 16
$80
$114
$ 43
$165
2013 2014 2015 TTM 16
Strong increases in Adjusted EBITDA and concurrent
decreases in leverage.
Bank Net Leverage Ratio Adjusted EBITDA ($ Millions)
+106%
+44%
a/ a/
Note: Bank Net Leverage Ratio is calculated by dividing (i) outstanding debt plus letters of credit and guarantee obligations, minus excess cash over $15.0 million by
(ii) EBITDA (as defined in our revolving credit facility) for the LTM. For details of the adjusted EBITDA and the net leverag e ratio calculation, see page 20.
a/ Represents the trailing twelve months as of September 30, 2016.
9 © 2016 Knoll Inc.
$29
$34
$32
$34
$35
11.1% 11.1% 11.2% 11.4% 12.1%
Q3/15 Q4/15 Q1/16 Q2/16 Q3/16
$264
$306
$285
$295 $292
Q3/15 Q4/15 Q1/16 Q2/16 Q3/16
$0.37
$0.43
$0.36
$0.44 $0.44
Q3/15 Q4/15 Q1/16 Q2/16 Q3/16
$101
$115
$108
$114 $113
38.4% 37.7% 37.9% 38.7% 38.6%
Q3/15 Q4/15 Q1/16 Q2/16 Q3/16
We had a strong third quarter as sales, operating profits,
margins and EPS continued to grow.
Adjusted Gross Profit ($ Millions) and %
Adjusted Operating Profit ($ Millions) and % Adjusted Earnings Per Share - Diluted
Sales Growth YoY – ($ Millions)
+12% +11%
+23% +19%
Note: Adjusted Gross Profit, Adjusted Operating Profit, and Adjusted EPS are non-GAAP financial measures. For a reconciliation of Adjusted Gross Profit, Adjusted
Operating Profit, and Adjusted EPS to GAAP Gross Profit, Operating Profit, and EPS, see pages 21 - 22.
10 © 2016 Knoll Inc.
In Q3 2016, Office operating margins grew
significantly.
Net Sales (millions) Operating Profit (millions)
+ System Product Sales
+ Complementary
Product Sales
+ Europe
+ Studio North
America
- Holly Hunt
+ Spinneybeck
- Edelman
- Textiles
+ Volume
+ Operating Efficiencies
- Net Price
+ Volume
+ Foreign exchange
- Net price
+ Net Price
+ Operating Efficiencies
- Volume
+15.5%
+6.5%
(4.8)%
+62.1%
OP 9.7% OP 14.7% OP 20.7%
+280 bps (40) bps (180) bps
+3.2%
(12.3)%
$161
$75
$28
$186
$80
$27
Q3 15 Q3 16
Office
Q3 15 Q3 16
Studio
Q3 15 Q3 16
Coverings
$11 $11
$6
$18
$12
$6
Q3 15 3 16
Office
Q3 15 6
Studio
Q3 15 Q3 16
Coverings
11 © 2016 Knoll Inc.
Still approximately 36% of our sales and 49% of our
profits come from outside an improving Office
segment.
Net Sales Operating Profit
Q3/15 Q3/16 Q3/15 Q3/16
39%
40%
22%
61%
28
11%
64%
27%
9%
51%
33%
16%
27%Office Studio Coverings
12 © 2016 Knoll Inc.
Industry drivers are mixed.
0
50
100
150
200
250
300
350
2013 2014 2015 2016
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015 2016F
Mi
llion
s
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
(20.0)%
(15.0)%
(10.0)%
(5.0)%
0.0%
5.0%
10.0%
2011 201 2013 2014 2015 2016*
Source: Chief Executive Magazine, NFIB,
Raymond James Research
Source: BLS
Steady jobs growth
Change in Private Sector Payrolls
CEO confidence remains
suppressed
CEO Confidence
Architectural billings
declined
ABI Billing Index
Source: American Institute of Architects
40
45
50
55
60
09 2010 2011 2012 2013 2014 2015 2016
Leasing activity down
Y/Y change in leasing activity
Net Absorption positive
Annual Net Absorption (sf)
Vacancies continue to decline
Office Vacancy Rates
Source: JLL Research Source: JLL Research/Knoll Analysis Source: JLL Research
* Compares Q3 2016 vs. Q3 2015
13 © 2016 Knoll Inc.
Translating strategy into action:
Maximize Knoll Office segment profitability.
Sales Force
Productivity
ONEKnoll ERP
Implementation
Supply Chain
Transformation &
Modernization
+ Global account
focus
+ Strategic sales
coverage
+ Visualization tools
and technology
+ Front to back end
integrated IT
platform
+ Integrated data
management
+ Centralized
planning &
scheduling
+ Dealer/client self
service
+ Strategic sourcing
+ Wood processing
optimization
+ Metal and panel
optimization
+ Transitioning to a
Lean manufacturing
environment
+ Improved productivity
and customer
experience
+ Material cost savings
+ Reduced labor costs
+ Footprint efficiency
14 © 2016 Knoll Inc.
The acquisition of Holly Hunt has accelerated our
multi-channel residential strategy and is highly
accretive.
Strategic Alignment + Scale
› A major platform for the residential
“to-the-trade” market
› Significant size
› Margin enhancing
Culturally Parallel, with Minimal Risk
› A close fit with Knoll
› Diversified sales base
› Knoll specialty expertise
Potential for Growth
› Scalable distribution model
› Potential for industry consolidation
› Significant market penetration opportunities
HOLLY HUNT, Chicago
HOLLY HUNT, Miami
15 © 2016 Knoll Inc.
$18.9 $20.0
$5
$15
$25
$35
1.99
1.25
0.0
1.0
2.0
3.0
$258
$195
$-
$50
$100
$150
$200
$250
$300
$350
30%
11%
3%9%
42%
5%
Technology
Showrooms
Europe
Product
Development
Site Capacity
All other
We have the financial resources to deliver on these
strategic initiatives.
+ We have a $478M credit
facility that runs into May
2019
+ Bank Net Leverage Ratio
Q3 16 at 1.25:1
+ Positive free cash flow
(1) Excludes outstanding letters of credit and guarantee obligations. (2) Bank Net Lev erage Ratio is calculated by div iding (i)
outstanding debt minus excess cash ov er $15.0 million by (ii)
EBITDA (as def ined in our credit f acility ) f or the LTM, see
page 22.
(3) Free Cash Flow is def ined as net income, plus depreciation
and amortization and non-cash stock compensation, less
capital expenditures. For details of f ree cash f low calculation,
see page 22.
Capital Expenditures
Bank Debt ($ in millions)(1) Bank Net Leverage Ratio(2) Bank Free Cash Flow ($ in millions)(3)
We estimate 2016 capital expenditures will be approximately $40 million
dollar as we continue to invest in our previously announced strategic
initiatives.
2015 capital expenditures totaled $31.9 million.
16 © 2016 Knoll Inc.
$4.7
$5.6
$9.0 $8.7
$20.5
$22.5
$22.7
$24.4
2012 2013 2014 2015
Cash returned to Shareholders 2012–2015 accelerated
with a 25% increase in dividends in Q4 2015.
($
m
il
li
o
n
s
)
Dividends
Shares Repurchases
$25.2
$28.2
$31.7 $33.1
17 © 2016 Knoll Inc.
For more information visit www.knoll.com
18 © 2016 Knoll Inc.
Thank You
19 © 2016 Knoll Inc.
2013 2014 2015 TTM 2016
Operating Profit ($mm) 41.4$ 76.8$ 101.0$ 122.3$
Add back (deduct):
Intangible asset impairment charge 8.9 - 10.7 10.7
Pension settlement and OPEB curtailment - 6.5 - -
Restructuring charges 5.1 1.5 0.9 0.5
Seating product discontinuation - - 0.9 0.9
Acquisition expenses - 0.7 - -
Remeasurement of FilzFelt Earn-out liability - 0.5 - -
Adjusted Operating Profit 55.4$ 86.0$ 113.5$ 134.4$
Net Sales ($mm) 862.3$ 1,050.3$ 1,104.4$ 1,177.1$
Adjusted Operating Profit % 6.4% 8.2% 10.3% 11.4%
Years Ended December 31,
2013 2014 2015 TTM 2016
Knoll Inc.
Gross Profit 280.3$ 371.7$ 412.1$ 449.9$
Add back:
Seating product discontinuati charge - - 0.9 -
Adjusted Gross Profit 280.3$ 371.7$ 413.0$ 449.9$
Net Sales 862.3$ 1,050.3$ 1,104.4$ 1,177.1$
Adjusted Gro s Profit % 32.5% 35.4% 37.4% 38.2%
($ in millions)
Years Ended December 31,
Reconciliation of Non-GAAP Results
a/
a/
a/ Represents the trailing tw elve months as of September 30, 2016.
20 © 2016 Knoll Inc.
12/31/13 12/31/14 12/31/15 TTM 2016
Debt Levels
(1)
178.8$ 275.5$ 238.7$ 206.7$
LTM Net Earnings ($mm) 23.2$ 46.6$ 66.0$ 74.1$
LTM Adjustments
Interest 5.3 6.7 6.1 5.0
Taxes 15.7 29.2 37.5 39.6
Depreciation and Amortization 16.3 20.0 21.3 22.5
Non-cash Items and Other
(2)
19.7 11.9 12.5 23.8
LTM Adjusted EBITDA 80.2$ 114.4$ 143.4$ 165.0$
Bank Leverage Calculation
(3)
2.23 2.41 1.67 1.25
(1) - Outstanding debt levels include outstanding letters of credit and guarantee obligations. Excess cash over $15.0 million reduces
outstanding debt per the terms of our credit facility, a copy of which was filed with the Securities and Exchange Commission on May 21, 2014.
(2) - Non-cash and Other items include, but are not limited to, an intangible asset impairment charge, a pension settlement and other postretirement
benefit curtailment, stock-based compensation expenses, unrealized gains and losses on foreign exchange, and restructuring charges.
(3) - Debt divided by LTM Adjusted EBITDA, as calculated in accordance with our credit facility.
2013 2014 2015 TTM 2016
Earnings per Share - Diluted 0.49$ 0.97$ 1.36$ 1.52$
Add back (deduct):
Intangible asset impairment charge 0.12 - 0.13 0.13
Pension settlement and OPEB curtailment - 0.08 - -
Restructuring charges 0.07 0.02 0.01 0.01
Seating product discontinuation charge - - 0.01 0.01
Acquisition expenses - 0.01 - -
Adjusted Earnings per Share - Diluted 0.68$ 1.09$ 1.52$ 1.67$
a/ Results do not sum due to rounding
Years Ended December 31,
a/ a/
Reconciliation of Non-GAAP Results
b/ Represents the trailing tw elve months as of September 30, 2016.
b/
b/
21 © 2016 Knoll Inc.
Q3 15 Q4 15 Q1 16 Q2 16 Q3 16
Gross Profit ($mm) 101.2$ 114.4$ 107.7$ 114.1$ 112.8$
Add back (deduct):
Seating product discontinuation charge - 0.9 - - -
Adjusted Gross Profit 101.2$ 115.3$ 107.7$ 114.1$ 112.8$
Net Sales ($mm) 263.6$ 305.7$ 284.6$ 294.7$ 292.1$
Adjusted Gross Profit % 38.4% 37.7% 37.9% 38.7% 38.6%
Q3 15 Q4 15 Q1 16 Q2 16 Q3 16
Operating Profit ($mm) 28.7$ 21.8$ 31.8$ 33.5$ 35.2$
dd back (deduct):
Intangible asset impairment charge - 10.7 - - -
Seating product discontinuation charge - 0.9 - - -
Restructuring charges 0.4 0.5 - - -
Adjusted Operating Profit 29.1$ 33.9$ 31.8$ 33.5$ 35.2$
Net Sales ($mm) 263.6$ 305.7$ 284.6$ 294.7$ 292.1$
Adjusted Operating Profit % 11.1% 11.1% 11.2% 11.4% 12.1%
Reconciliation of Non-GAAP Results
22 © 2016 Knoll Inc.
Q3 15 Q4 15 Q1 16 Q2 16 Q3 16
Earnings per Share - Diluted 0.37$ 0.28$ 0.36$ 0.44$ 0.44$
Add back (deduct):
Intangible asset impairment charge - 0.13 - - -
Seating product discontinuation charge - 0.01 - - -
Restructuring - 0.01 - - -
Adj. Earnings per Share - Diluted 0.37$ 0.43$ 0.36$ 0.44$ 0.44$
Reconciliation of Earnings per Share to Adjusted Earnings per Share
Q3 2015 Q3 2016
Net earnings 17,861$ 21,618$
Add:
Depreciation 5,201 4,719
Amortization 976 989
Stock compensation 2,076 2,655
Less:
Capital expenditures (7,167) (10,412)
Free Cash Flow 18,947$ 19,569$
(in thousands)
Bank Fr e Cash Flow
Q3 2015 Q3 2016
Debt Levels
(1)
274.2$ 206.7$
LTM Net Earnings ($mm) 64.8$ 74.1$
LTM Adjustments
Interest 6.6 5.0
Taxes 39.1 39.6
Depreciation and mortization 21.2 22.5
Non-cash Items and Other
(2)
6.0 23.8
LTM Adjusted EBITDA 137.7$ 165.0$
Bank Leverage Calculation
(3)
1.99 1.25
Bank Leverage Calculation
Reconciliation of Non-GAAP Results
(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 and Other 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 Adjusted EBITDA, as calculated in accordance with our credit facility.
23 © 2016 Knoll Inc.