© 2017 Knoll Inc.
Knoll, Inc.
Fourth Quarter 2017 Investor Presentation
Andrew Cogan, President & CEO
Charles Rayfield, SVP & CFO
Burovision, Montreal
2© 2017 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, revenue and profit levels, 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, 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 and coverings solutions, changes in the competitive
marketplace, changes in trends in the market for furniture or 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© 2017 Knoll Inc.
Knoll is an expanding constellation of design-driven
brands and people, working together with our clients
to create inspired modern interiors
Knoll is:
Knoll Office
KnollStudio
KnollTextiles
KnollExtra
DatesWeiser
Spinneybeck | FilzFelt
Edelman Leather
HOLLY HUNT
Vladimir Kagan
4© 2017 Knoll Inc.
For 79 years, Knoll has stood for modern design
60s 60s
90s 90s
60s
00s 00s
10s10s 10s
Design, leadership, quality and
innovation in both the contract
and residential markets
5© 2017 Knoll Inc.
Knoll businesses are a continuum of adjacencies,
rooted in high design and heavily influenced by
“to-the-trade” specifiers
Global Luxury Furnishings & Coverings
High End $3.7B, Relevant Market $37.6B
Knoll Estimate
• Changing Work Style
• Global Requirements
• Competitive Intensity
• Favorable Demographics
• High Margin Opportunities
• Fragmented Competitors
Luxury
Functional
Performance
Commercial Residential
Knoll Office
KnollStudio
Spinneybeck
KnollTextiles
KnollExtra
Edelman
FilzFelt
HOLLY
HUNT
Vladimir Kagan
DatesWeiser
North American Workplace BIFMA
Preliminary BIFMA 2017 estimate $19.3B
Source: BIFMA US Production, Most Recent June 2017
6© 2017 Knoll Inc.
Q3/17 Q3/16 Q3/17Q3/16
51%
33%
16%
64%
27%
9%
62%
29%
9%
46%
36%
18%
Office Studio CoveringsNet Sales Operating Profit
Note: Operating Profit excludes unallocated corporate expenses of $4.9M in Q3 2016 and $4.0M in Q3 2017.
Approximately 38% of our sales and 54% of our profits
this quarter came from outside our Office segment
7© 2017 Knoll Inc.
› Maximize office segment
profitability and growth
› Target underpenetrated and
emerging ancillary categories
and markets for growth
› Expand reach into residential
and decorator channels
around the world
› Build a responsive and
efficient customer centric
service and technology
infrastructure across our
businesses
Four strategic imperatives drive our growth
8© 2017 Knoll Inc.
$1.09
$1.52
$1.68
$1.43
2014 2015 2016 TTM 17
$372
$413
$446
$414
35.4% 37.4% 38.3% 37. %
2014 2015 2016 TTM 17
$86
$114
$136
$113
8.2% 10.3% 11.7% 10.2%
2014 2015 2016 TTM 17
$1,050
$1,104
$1,164
$1,110
2014 2015 2016 TTM 17
Our strategy remains supportive of the growth in
sales, margins and profits
Adjusted Gross Profit ($ Millions) and %
Adjusted Operating Profit ($ Millions) and % Adjusted Diluted Earnings Per Share
Sales YoY – ($ Millions)
+6% +11%
+32% +31%
Note: Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Profit, Adjusted Operating Margin and Adjusted Diluted EPS are non-GAAP financial
measures. For a reconciliation of Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Profit, Adjusted Operating Margin and Adjusted Diluted EPS to
GAAP Gross Profit, Gross Margin, Operating Profit, Operating Margin and Diluted EPS, see pages 24 & 25.
a/
a/
a/
a/
a/ Represents the trailing twelve months as of September 30, 2017.
9© 2017 Knoll Inc.
2.41
1.67
1.37
1.52
2014 2015 2016 TTM 17
$114
$143
$169
$149
2014 2015 2016 TTM 17
We have also achieved strong increases in Adjusted
EBITDA and decreases in leverage
Bank Net Leverage Ratio Adjusted EBITDA ($ Millions)
+30%
+37%
Note: Bank Net Leverage Ratio is calculated by dividing (i) outstanding debt plus letters of credit and guarantee obligations, minus excess cash over $15.0 million by
(ii) EBITDA (as defined in our revolving credit facility) for the LTM. For details on the adjusted EBITDA and bank net leverage ratio calculations, see page 25.
a/a/
a/ Represents the trailing twelve months as of September 30, 2017.
10© 2017 Knoll Inc.
Q1
Q3-17 Q3-16
Net Sales 291.3$ 292.1$ (0.8)$ (0.3)%
Gross Profit 106.6 112.8 (6.2) (5.5)%
Gross Margin % 36.6% 38.6%
Operating Expenses 76.5 77.6 1.1 1.4%
Operating Profit 30.1 35.2 (5.1) (14.4)%
Operating Profit % 10.3% 12.1%
Adjusted EBITDA 39.0$ 43.6$ (4.6)$ (10.6)%
Diluted EPS $0.39 $0.44 (0.05)$ (11.4)%
(180) bps
B / (W)
vs. Prior Year
(200) bps
Note: Adjusted EBITDA is non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to GAAP net earnings, see pages 26.
For the first time in Q3 sales of our newer workplace
models exceed d those of legacy systems helping to
stabilize our top line
11© 2017 Knoll Inc.
(2.5)%
(23.8)%
Net Sales (millions) Operating Profit (millions)
- Quantity & size of $1M+
Projects
+ Holly Hunt
+ DatesWeiser
+ Europe
- NA Studio
+ Spinneybeck
+ Edelman
- Textiles
- Volume
- Net Price
+ OpEx
+ Net price
- FX
- OpEx (DW, HH)
- Mix
(240) bps (190) bps (60) bps
+4.2%
(7.5)%
(0.7)%
+1.5%
Knoll, Inc.
Q3 2017 Results by Segment vs. Prior Year
($ in millions)
$186
$80
$27
$181
$83
$27
Q3 16 Q3 17
Office
Q3 16 Q3 17
Studio
Q3 16 Q3 17
Coverings
$20
$13
$6
$16
$12
$6
Q3 16 7
Office
Q3 16 7
Studio
Q3 16 Q3 17
Coverings
11.0% 8.6% 16.8% 14.9% 23.8% 23.2%
12© 2017 Knoll Inc.
0
50
100
150
200
250
300
350
400
2013 2014 2015 2016 2017
Th
ou
sa
nd
s
(20.00)%
(15.00)%
(10.00)%
(5.00)%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2013 2014 2015 2016 2017
30
40
50
60
70
80
2013 2014 2015 2016 2017
40
45
50
55
60
2013 2014 2015 2016 2017
Industry Indicators suggest growth is on the horizon
Source: Chief Executive Magazine
Corporate Profits still strong
% Change from Prior Quarter
CEO Confidence positive
CEO Confidence Index
Architectural Billings up
ABI Billing Index
Source: American Institute of Architects
Source: Bureau of Labor Statistics
Source: Bureau of Economic Analysis as of Q2 2017
Net absorption trending up
Annual Net Absorption (sf)
annualizedSource: JLL
0
10
20
30
40
50
60
2013 2014 2015 2016 17Q1 17Q2 17Q3
Mi
llio
ns
Job growth continues
Change in Private Sector Payrolls
13© 2017 Knoll Inc.
BIFMA TTM Y/Y orders
Y/Y growth %
0
1
2
3
4
5
6
7
8
Ju
n
Ju
l
S
e
p
A
u
g
Sales
Ju
l
Orders
A
u
g
Ju
n
F
e
b
M
a
r
A
p
r
M
a
y
Jan
’17M
a
y
A
p
r
M
a
r
Jan
’15 F
e
b
D
e
c
O
c
t
F
e
b
N
o
v
D
e
c
M
a
r
Jan
’16 N
o
v
O
c
t
S
e
p
A
u
g
Ju
n
M
a
y
Ju
l
A
p
r
D
e
c
S
e
p
N
o
v
O
c
t
S
e
p
A
u
g
Ju
l
Ju
n
M
a
y
A
p
r
M
a
r
F
e
b
Jan
’14
BIFMA orders and sales tracking consistently in low-
single-digit range
Source: BIFMA. Note: 2016 and 2017 TTM trend estimated using monthly Y/Y % growth reported by BIMFA. As of January 2016, BIFMA results include
Canada and Mexico and specialty products.
14© 2017 Knoll Inc.
There is significant upheaval in the Office business as
clients rethink their priorities and we see a major
inflection point in workplace design that creates new
challenges and opportunities for Knoll
Individual
Formal
Fixed
Dedicated
One Size Fits All
Group
Casual
Mobile / Adjustable
Shared
Competition for Talent
Residential aestheticCorporate / commercial aesthetic
Small to mid size projects$1M+ projects
Client Space AllocationPrimary Activity
Primary
Activity
15© 2017 Knoll Inc.
For Knoll, solving ancillary is critical for maintaining
our position as a market leader and fueling growth
±90% ±10%
2015 Knoll Dealers
workplace
Estimated share of wallet1
±7% ±1%
2016 Industry ~$18.3B3
Estimated Market share2
workplace
2 ±4% combined market share, Knoll Estimate
3 Preliminary BIFMA 2016 estimate
Workstations
(Primary Spaces)
Ancillary
(Activity)
Workstations
(Primary Spaces)
Ancillary
(Activity)
1 ±50% combined share of wallet based on major project
review and reported Dealer value
16© 2017 Knoll Inc.
We are investing in people, products and capabilities
to take advantage of these opportunities
Rockwell Unscripted is one of our most ambitious introductions to date
17© 2017 Knoll Inc.
Status of key investments
New Points of Distribution Expanded Product Range Acquisitions
We have made good progress on major growth
initiatives in our Studio and Coverings segments
› Holly Hunt Outdoor – exceeding expectations: strong
out-of-gate orders cadence since December launch
› DatesWeiser – largely on track: sales/marketing
hiring and investments on pace with plan, but orders
ramp up slower than anticipated
› Vladimir Kagan – exceeding expectations:
orders pace stepping up and ahead of plan
› KnollStudio ancillary products – on track: new Florence
Knoll options, Pixel extensions, and Pilot lounge chair getting
traction; Bertoia shell chair launching Q3
› Knoll LA retail shop – on track: Façade largely
completed and Interior construction underway, with
January 2018 opening planned
› Spinnebeck/FilzFelt acoustical product – at or above
expectations: on-going introductions helping to build sales
momentum in acoustical market
› Holly Hunt “Off the Floor” Clearance Center – on
track: Stamford, CT lease signed with targeted
opening in Q4
18© 2017 Knoll Inc.
Acquisitions like Holly Hunt have accelerated our
residential and to-the-trade decorator strategy and
have been 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
19© 2017 Knoll Inc.
DatesWeiser adds another dimension to our Studio
segment in a category where we can drive growth
Positioning
› A leading US designer and manufacturer of
highly customized conference furnishings
for signature areas of the workplace
Company Profile
› Historically, focus on sales in the Northeast
› Core strength in financial and professional
services
› A+D driven sell with sophisticated custom
capabilities
What DatesWeiser Brings to the Table
› A like-minded, high quality contract brand
› Potential as a skilled OEM to Knoll for
complex custom furniture requirements
› Strong management team and founder
with close cultural alignment with Knoll
20© 2017 Knoll Inc.
“Less is More” Bringing Lean to Knoll
We are implementing a culture of continuous improvement
Lean across Knoll
› Driving out waste and inefficiency
› Engaging our manufacturing associates
› Process and productivity improvement
Waste and Landfill
Recycled Content
Safety Incident Rate
Lean Initiatives
21© 2017 Knoll Inc.
$19.6 $19.2
$-
$10
$20
$30
1.25
1.52
0.0
0.5
1.0
1.5
2.0
$195
$ 20
$-
$50
$100
$150
$200
$250
$300
We have the financial resources to deliver on these
strategic initiatives
We have a $468M credit facility
that runs into May 2019
Bank Net Leverage Ratio
Q3 17 at 1.52:1
Positive free cash flow
(1) Excludes outstanding letters of credit and guarantee obligations. (2) Bank Net Leverage Ratio is calculated by dividing (i) outstanding
debt minus excess cash over $15.0 million by (ii) EBITDA (as
defined in our credit facility) for the LTM, see page 27.
(3) Free Cash Flow is defined as net income, plus depreciation
and amortization and non-cash stock compensation, less
capital expenditures. For details of free cash flow calculation,
see page 26.
Bank Debt ($ in millions)(1) Bank Net Leverage Ratio(2) Bank Free Cash Flow ($ in millions)(3)
Capital Expenditures
We estimate 2017 capital expenditures will be approximately $40.4 million
as we continue to invest in our previously announced strategic initiatives.
2016 capital expenditures totaled $40.1 million.
32%
25%
4%
9%
26%
4%
Technology
Showrooms
Europe
Product Development
Site Capacity
All other
22© 2017 Knoll Inc.
$9.0 $8.7
$5.5
$11.5
$22.7
$24.4
$29.2
$30.3
2014 2015 2016 TTM 2017
($ mil
li
o
ns)
$31.7 $33.1
$34.7
$41.8
And we continue to return cash to shareholders
through dividends and buybacks
a/
a/ Represents the trailing twelve months as of September 30, 2017.
Dividends
Share Repurchases
a
23© 2017 Knoll Inc.
Thank you for your interest in Knoll
24© 2017 Knoll Inc.
2014 2015 2016 TTM 2017
Operating Profit ($mm) 76.8$ 101.0$ 136.3$ 111.1$
Add back:
Intangible asset impairment charge - 10.7 - -
Pension settlement and OPEB curtailment 6.5 - - -
Restructuring charges 1.5 0.9 - 2.2
Seating product discontinuation - 0.9 - -
Acquisition expenses 0.7 - - -
Remeasurement of FilzFelt Earn-out liability 0.5 - - -
Adjusted Operating Profit 86.0$ 113.5$ 136.3$ 113.3$
Net Sales ($mm) 1,050.3$ 1,104.4$ 1,164.3$ 1,109.7$
Adjusted Operating Profit % 8.2% 10.3% 11.7% 10.2%
GAAP Operating Profit % 7.3% 9.2% 11.7% 10.0%
Years Ended December 31,
2014 2015 2016 TTM 2017
Knoll Inc.
Gross Profit 371.7$ 412.1$ 445.9$ 413.6$
Add back:
Seating product discontinuation charge - 0.9 - -
Adjusted Gross Profit 371.7$ 413.0$ 445.9$ 413.6$
Net Sales 1,050.3$ 1,104.4$ 1,164.3$ 1,109.7$
Adjusted Gross Profit % 35.4% 37.4% 38.3% 37.3%
GAAP Gross Profit % 35.4% 37.3% 38.3% 37.3%
($ in millions)
Years Ended December 31,
Reconciliation of Non-GAAP Results
a/
a/
a/ Represents the trailing twelve months as of September 30, 2017
25© 2017 Knoll Inc.
12/31/14 12/31/15 12/31/16 TTM 2017
Debt Levels
(1)
275.5$ 238.7$ 231.8$ 225.4$
LTM Net Earnings ($mm) 46.6$ 66.0$ 82.1$ 70.3$
LTM Adjustments
Interest 6.7 6.1 4.7 6.1
Taxes 29.2 37.5 45.4 35.1
Depreciation and Amortization 20.0 21.3 23.0 25.2
Non-cash Items and Other
(2)
11.9 12.5 13.4 11.8
LTM Adjusted EBITDA 114.4$ 143.4$ 168.6$ 148.5$
Bank Leverage Calculation
(3)
2.41 1.67 1.37 1.52
(1) - Outstanding debt includes outstanding letters of credit and guarantee obligations. Excess cash over $15.0 million reduces
outstanding debt per the terms of our credit facility, a copy of which was filed with the Securities and Exchange Commission on May 21, 2014.
(2) - Non-cash and Other items include, but are not limited to, intangible asset impairment charges, pension settlements and other postretirement
benefit curtailment, stock-based compensation expenses, unrealized gains and losses on foreign exchange, and restructuring charges.
(3) - Bank leverage is calculated by dividing debt by LTM Adjusted EBITDA, as calculated in accordance with our credit facility.
a/
2014 2015 2016 TTM 2017
Earnings per Share - Diluted 0.97$ 1.36$ 1.68$ 1.40$
Add back:
Intangible asset impairment charge - 0.13 - -
Pension settlement and OPEB curtailment 0.08 - - -
Restructuring charges 0.02 0.01 - 0.03
Seating product discontinuation charge - 0.01 - -
Acquisition expenses 0.01 - - -
Adjusted Earnings per Share - Diluted 1.09$ 1.52$ 1.68$ 1.43$
Years Ended December 31,
a/
b/ b/
Reconciliation of Non-GAAP Results
a/ Represents the trailing twelve months as of September 30, 2017
b/ Results do not sum due to rounding
26© 2017 Knoll Inc.
Q3 2016 Q3 2017
Net earnings 21,618$ 19,161$
Add:
Depreciation 4,729 5,469
Amortization 989 989
- Stock compensation 2,654 2,270
Less:
Capital expenditures (10,385) (8,677)
Free Cash Flow 19,605$ 19,212$
(in thousands)
Bank Free Cash Flow
Reconciliation of Non-GAAP Results
2016 2017
Earnings ($mm) 21.6$ 19.2$
Adjustments
Interest 1.2 1.8
Taxes 11.6 8.2
Depreciation and Amortization 5.7 6.5
Non-cash Items and Other 3.5 3.4
Adjusted EBITDA 43.6$ 39.0$
(1) Results do not sum due to rounding
Third Quarter
(1)
27© 2017 Knoll Inc.
Q3 2016 Q3 2017
Debt Levels
(1)
206.7$ 225.4$
LTM Net Earnings ($mm) 74.1$ 70.3$
LTM Adjustments
Interest 5.0 6.1
Taxes 39.6 35.1
Depreciation and Amortization 22.5 25.2
Non-cash Items and Other
(2)
23.8 11.8
LTM Adjusted EBITDA 165.0$ 148.5$
Bank Leverage Calculation
(3)
1.25 1.52
(1) - Outstanding debt includes 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, intangible asset impairment charges, pension settlements and other postretirement
benefit curtailments, stock-based compensation expenses, unrealized gains and losses on foreign exchange, and restructuring charges.
(3) - Bank leverage is calculated by dividing debt by LTM Adjusted EBITDA, as calculated in accordance with our credit facility.
Reconciliation of Non-GAAP Results
28© 2017 Knoll Inc.