-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T0OLGb3ohRjRNF4PGCZQUvdzF9cS50QaYl2qbb+pGzMV1I0cnAEBTkQFuqcHv1HF 16aW14ADWow6hP8uGmbelg== 0001011570-99-000003.txt : 19990517 0001011570-99-000003.hdr.sgml : 19990517 ACCESSION NUMBER: 0001011570-99-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNOLL INC CENTRAL INDEX KEY: 0001011570 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FURNITURE & FIXTURES [2590] IRS NUMBER: 133873847 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12907 FILM NUMBER: 99623408 BUSINESS ADDRESS: STREET 1: 1235 WATER ST CITY: EAST GREENVILLE STATE: PA ZIP: 18041 BUSINESS PHONE: 2156797991 MAIL ADDRESS: STREET 1: 1235 WATER STREET CITY: EAST GREENVILLE STATE: PA ZIP: 18041 10-Q 1 FORM 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, 1999 OR [ ] 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 --- --- As of May 7, 1999, there were 40,645,363 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 (Unaudited): Condensed Consolidated Balance Sheets at March 31, 1999 and December 31, 1998..................................... 3 Condensed Consolidated Statements of Operations for the three months ended March 31, 1999 and 1998................ 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1999 and 1998................ 5 Notes to the Condensed Consolidated Financial Statements.... 6 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 8 3. Quantitative and Qualitative Disclosures about Market Risk...... 11 PART II -- OTHER INFORMATION 1. Legal Proceedings............................................... 12 2. Changes in Securities and Use of Proceeds....................... 12 6. Exhibits and Reports on Form 8-K................................ 12 Signatures.......................................................... 13 Exhibit Index....................................................... 14 2 PART I -- FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) - ---------------------------------------------------------------- KNOLL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars In Thousands, Except Per Share Data)
March 31, 1999 December 31, 1998 -------------- ----------------- ASSETS Current assets: Cash and cash equivalents.......... $ 17,906 $ 17,465 Customer receivables, net.......... 116,686 137,956 Inventories........................ 79,682 77,113 Deferred income taxes.............. 19,925 21,067 Prepaid and other current assets... 10,163 9,842 -------- -------- Total current assets........... 244,362 263,443 Property, plant and equipment.......... 261,361 257,970 Accumulated depreciation............... (78,473) (71,803) -------- -------- Property, plant and equipment, net............... 182,888 186,167 Intangible assets...................... 282,242 282,197 Accumulated amortization............... (24,123) (22,154) -------- -------- Intangible assets, net......... 258,119 260,043 Other noncurrent assets................ 4,440 4,374 -------- -------- Total Assets................... $689,809 $714,027 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt............................. $ -- $ 10,000 Accounts payable................... 50,113 59,551 Income taxes payable............... 6,927 7,096 Other current liabilities.......... 58,588 91,756 -------- -------- Total current liabilities...... 115,628 168,403 Long-term debt......................... 194,205 159,255 Postretirement benefits other than pension.............................. 18,769 18,450 Other noncurrent liabilities........... 26,856 24,069 -------- -------- Total liabilities.............. 355,458 370,177 -------- -------- Stockholders' equity: Common stock, $0.01 par value; 100,000,000 shares authorized; 40,645,363 shares issued and outstanding (net of 2,894,700 treasury shares) in 1999 and 41,799,499 shares issued and outstanding (net of 1,707,700 treasury shares) in 1998......... 406 418 Additional paid-in-capital......... 153,783 181,792 Unearned stock grant compensation.. (642) (712) Retained earnings.................. 189,380 170,986 Accumulated other comprehensive income........................... (8,576) (8,634) -------- -------- Total stockholders' equity..... 334,351 343,850 -------- -------- Total Liabilities and Stockholders' Equity......... $689,809 $714,027 ======== ========
See accompanying notes. 3 KNOLL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In Thousands, Except Per Share Data)
Three Months Ended March 31, ------------------------ 1999 1998 ---------- ---------- Sales........................................ $209,210 $220,775 Cost of sales................................ 127,663 133,452 -------- -------- Gross profit................................. 81,547 87,323 Selling, general and administrative expenses................................... 45,413 49,273 -------- -------- Operating income............................. 36,134 38,050 Interest expense............................. 4,222 4,583 Other expense, net........................... 398 418 -------- -------- Income before income tax expense............. 31,514 33,049 Income tax expense........................... 13,120 13,239 -------- -------- Net income................................... $ 18,394 $ 19,810 ======== ======== Earnings per share: Basic.................................... $ 0.47 $ 0.48 Diluted.................................. $ 0.45 $ 0.45 Weighted average shares of common stock outstanding: Basic................................. 39,553 41,181 Diluted............................... 41,225 43,859
See accompanying notes. 4 KNOLL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Three Months Ended March 31, ------------------------ 1999 1998 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income................................... $ 18,394 $ 19,810 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization.......... 8,553 9,579 Other noncash items.................... 620 376 Changes in assets and liabilities: Customer receivables............... 20,709 (184) Inventories........................ (2,928) (6,728) Accounts payable................... (8,918) (212) Current and deferred income taxes.. 2,230 2,677 Other current assets and liabilities...................... (33,596) (14,660) Other noncurrent assets and liabilities...................... 2,248 661 -------- -------- Cash provided by operating activities........ 7,312 11,319 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment... (3,573) (5,483) Proceeds from sale of assets................. 66 7 -------- -------- Cash used in investing activities............ (3,507) (5,476) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from (repayment of) revolving credit facility, net....................... 25,000 (10,000) Net proceeds from issuance of stock.......... 649 3,290 Purchase of common stock..................... (28,675) -- -------- -------- Cash used in financing activities............ (3,026) (6,710) -------- -------- Effect of exchange rate changes on cash and cash equivalents....................... (338) (231) -------- -------- Increase (decrease) in cash and cash equivalents................................ 441 (1,098) Cash and cash equivalents at beginning of period..................................... 17,465 10,790 -------- -------- Cash and cash equivalents at end of period... $ 17,906 $ 9,692 ======== ========
See accompanying notes. 5 KNOLL, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 1999 (Unaudited) 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Knoll, Inc. (the "Company" or "Knoll") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation are reflected in the condensed consolidated financial statements. The condensed consolidated balance sheet as of December 31, 1998 is derived from the Company's 1998 audited financial statements. The unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's annual report on Form 10-K for the year ended December 31, 1998. The results of operations for the three months ended March 31, 1999 are not necessarily indicative of the results to be expected for the full year ending December 31, 1999. 2. Proposal to Acquire Shares Owned by Public Stockholders On March 23, 1999, the Company received a proposal from Warburg, Pincus Ventures, L.P. ("Warburg") and certain members of Knoll management to acquire all of the outstanding shares of the Company's common stock owned by public stockholders for a price of $25.00 per share. The Board of Directors has authorized the appointment of a special committee, consisting of independent members of the Board of Directors, to consider the proposal. Consummation of the proposed transaction is subject to approval by the Board of Directors and stockholders of Knoll, as well as to the receipt of financing, the execution of a definitive merger agreement and other conditions customary in a transaction of this type. If the proposed transaction is consummated, the Company's common stock will cease to be listed on the New York Stock Exchange, Inc. and will be deregistered under the Securities Exchange Act of 1934, as amended. Five class action complaints relating to the proposal were filed on or about March 24, 1999. The Company is among the defendants. At this time, the Company is unable to predict what impact, if any, such litigation may have on the Company or the proposed transaction. The financial statements do not reflect any effects of the litigation or the proposed transaction. 3. Inventories
March 31, 1999 December 31, 1998 -------------- ----------------- (In Thousands) Raw materials................. $41,559 $42,625 Work in process............... 11,619 11,827 Finished goods................ 26,504 22,661 ------- ------- Inventories................... $79,682 $77,113 ======= =======
6 4. Earnings Per Share The following table sets forth a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations (in thousands, except per share amounts):
Weighted Net Income Average Shares Per Share (Numerator) (Denominator) Amount ----------- --------------- --------- Three Months Ended March 31, 1999: Basic earnings per share........... $18,394 39,553 $0.47 ===== Effect of dilutive potential common shares: Stock options................ -- 245 Nonvested restricted stock grants............... -- 1,427 ------- ------ Diluted earnings per share......... $18,394 41,225 $0.45 ======= ====== ===== Three Months Ended March 31, 1998: Basic earnings per share........... $19,810 41,181 $0.48 ===== Effect of dilutive potential common shares: Stock options............... -- 609 Nonvested restricted stock grants.............. -- 2,069 ------- ------ Diluted earnings per share........ $19,810 43,859 $0.45 ======= ====== =====
Options to purchase 1,093,000 shares of common stock that were outstanding as of March 31, 1999 were not included in the calculation of diluted earnings per share for the three months ended March 31, 1999. Such options were excluded from the calculation because their exercise prices exceeded the average market price of the common stock for the appropriate period and, therefore, the effect on earnings per share would have been antidilutive. 5. Share Repurchase Program During the three months ended March 31, 1999, the Company purchased 1,187,000 shares of its common stock for $28.7 million, or an average price of $24.16. Since the inception of the share repurchase program in September 1998, the Company has purchased 2,894,700 shares of its common stock for $67.5 million, or an average price of $23.33 per share. 6. Comprehensive Income Total comprehensive income for the three months ended March 31, 1999 and 1998 was $18.5 million and $19.8 million, respectively. 7 Item 2. Management's Discussion and Analysis of Financial Condition and - ------------------------------------------------------------------------ Results of Operations --------------------- The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto and in conjunction with the Company's annual report on Form 10-K for the year ended December 31, 1998. Results of Operations Comparison of First Quarter Ended March 31, 1999 to First Quarter Ended March 31, 1998 Sales. Sales for the first quarter of 1999 were $209.2 million, a decrease of 5.3%, or $11.6 million, from first quarter 1998 sales of $220.8 million. Sales in the first quarter of 1999 were down primarily as a result of a slowdown in industry sales levels. Gross Profit and Operating Income. As a result of the Company's continued focus on cost control, the Company's gross profit and operating income as a percentage of sales remained strong despite lower sales volume. As a percentage of sales, gross profit was 39.0% for the first quarter of 1999 and 39.6% for the first quarter of 1998 and operating income was 17.3% for the first quarter of 1999 and 17.2% for the first quarter of 1998. Selling, general and administrative expenses for the first quarter of 1999 were $45.4 million, a decrease of 7.9%, or $3.9 million, from $49.3 million for the first quarter of 1998. This decrease was primarily due to lower employee costs related to reduced sales and profit levels. As a percentage of sales, the Company's selling, general and administrative expenses decreased to 21.7% for the first quarter of 1999 from 22.3% for the first quarter of 1998. Interest Expense. The Company's interest expense for the first quarter of 1999 was $4.2 million compared to $4.6 million for the first quarter of 1998. The decrease in interest expense is principally due to lower outstanding debt balances during the first quarter of 1999 compared to the first quarter of 1998. Income Tax Expense. The Company's effective tax rate is directly affected by the mix of pretax income and the varying effective tax rates attributable to the countries in which it operates. This changing mix is primarily responsible for the change in the effective tax rate to 41.6% for the first quarter of 1999 from 40.1% for the first quarter of 1998. Additionally, the change in the effective tax rate has been impacted by the increased effect of nondeductible expenses with the decrease in pretax income. Earnings Per Share. The Company's diluted earnings per share for the first quarter of 1999 is unchanged from the first quarter of 1998 as lower net income was offset by the effect of the reduced number of common shares outstanding that resulted from the repurchase of shares of common stock by the Company under its share repurchase program that was implemented in September 1998. Liquidity and Capital Resources During the three months ended March 31, 1999, the Company generated cash flow from operations of $7.3 million. Cash provided by operations resulted primarily from earnings before depreciation and amortization offset by cash used for working capital purposes, which was principally for the payment of December 31, 1998 accruals for employee costs related to 1998 sales and profits. The Company borrowed $25.0 million under its revolving credit facility during the first quarter of 1999. These borrowings together with cash generated from operations were used to fund $3.6 million in capital expenditures and repurchase 1.2 million shares of the Company's common stock for $28.7 million. As of March 31, 1999, the Company's ratio of debt to total capitalization was 36.7%, and the Company had an aggregate of $197.0 million available for borrowing under its U.S. and European revolving credit facilities. The Company believes that existing cash balances and internally generated cash flows, together with borrowings available under the revolving credit facility, will be sufficient to fund working capital needs, capital spending requirements and debt service requirements for at least the next twelve months. The Company's debt instruments contain certain covenants that, among other things, limit the Company's ability to incur additional indebtedness, pay dividends and purchase Company stock as well as require the Company to maintain certain financial ratios. 8 If the transaction discussed in Note 2 to the unaudited condensed consolidated financial statements is consummated, the Company would incur significant additional debt under new financing arrangements. Management believes that the Company's cash flows would be sufficient to service such additional debt as well as continue to fund working capital needs and capital expenditures. Backlog The Company's backlog of unfilled orders was $161.7 million at March 31, 1999 and $149.5 million at March 31, 1998. The Company manufactures substantially all of its products to order and expects to fill substantially all outstanding unfilled orders within the next twelve months. As such, backlog is not a significant factor used to predict the Company's long-term business prospects. Year 2000 Readiness Disclosure The Company continues to implement its strategic project to replace and enhance its existing manufacturing and business information systems (software and hardware) in North America with a new fully integrated system, which the Company believes to be year 2000 compliant. Additionaly, the Company has completed an evaluation of the information systems currently being used by its European operations and other potential European year 2000 issues and is taking actions to address the year 2000 issues that have been identified. Based upon information presently known, the Company does not expect its European year 2000 issues to have a material adverse effect upon its results of operations. In North America, the Company has installed and is utilizing the financial applications of the new system at all of its sites and has installed and is utilizing the new manufacturing application at two of four sites. In addition, the Company has completed an inventory of its manufacturing equipment to identify equipment that contains embedded chips and is taking actions to address issues related to embedded chips that the Company has determined may not be year 2000 compliant. The Company anticipates that all of the system applications will be installed and in use and problems related to embedded chips that are not year 2000 compliant will be remedied, through replacement or other satisfactory measures, by the third quarter of 1999. If the Company successfully implements the new system and addresses issues associated with noncompliant embedded chips by the third quarter of 1999, the year 2000 issues associated with its information systems and manufacturing equipment would not be expected to have a material adverse effect on the Company's operations. In the event the Company is unable to complete the implementation of the project on a timely basis, the Company's ability to take customer orders, manufacture and deliver product on a timely basis, invoice customers and collect payments may be impaired. The Company can not reasonably estimate at this time the amount of lost revenue or additional expenses that might be expected in this scenario. Failure to implement the project on a timely basis could have a material adverse effect on the Company. The Company currently does not have a contingency plan in place. However, the Company continually evaluates the status of completion and whether or not a contingency plan is or may be necessary. The Company would tailor any contingency plan to address the issue in question and attempt to minimize the impact upon the Company's operations and customers. The Company estimates that the total project cost will be approximately $32.7 million, of which approximately 70.0% will be expensed and 30.0% will be capitalized. Through March 31, 1999, the Company incurred expenditures of approximately $25.6 million ($18.2 million expense and $7.4 million capital) related to the project. The project is being funded with cash flows from operations. The estimated cost of the project has not constrained the Company's information systems budget or materially affected other necessary information systems activities. The costs and completion date of the project are based on the best estimates of management, which were derived utilizing numerous assumptions of future events, including the continued availability of certain technical and consulting resources. There can be no guarantee that these estimates are accurate. Actual results could differ materially from those anticipated and, therefore, could have a material adverse effect on the Company's operations. 9 As the year 2000 issue is a global concern, the Company's operations could be materially adversely affected by circumstances beyond its control. Disruptions in the economy generally resulting from year 2000 issues could materially adversely affect the Company. Additionally, the year 2000 readiness of the Company's vendors, dealers and other third parties (such as utility companies, the U.S. government and customers) on which it relies could impact the Company's operations. Although the Company's systems do not interface directly with those of third parties, the inability of these other parties to complete their year 2000 initiatives in a timely manner could have a material adverse effect on the Company. The Company has no means of ensuring that its vendors, dealers and other third parties will be year 2000 compliant in a timely manner. However, the Company is actively working to determine the year 2000 readiness of these parties and to determine the actions, if any, that would be necessary to help minimize any potential adverse impact on the Company. The Company is formally communicating with vendors, dealers and certain other third parties through questionnaires and on-site visits. For those vendors that the Company deems to be at risk of not being adequately prepared for the year 2000, the Company has or will attempt to seek alternate sources for procuring product or supplies, build inventories or develop an appropriate contingency plan. To date, the Company is not aware of any third-party year 2000 issue that is expected to materially adversely impact the Company's operations. Statement Regarding Forward-Looking Disclosure Certain portions of this Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations," contain various 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, which represent the Company's expectations or beliefs concerning future events. Forward-looking statements relate to future operations, strategies, financial results or other developments and are not based on historical information. In particular, statements using verbs such as "anticipates," "believes," "estimates," "expects" or words of similar meaning generally involve forward-looking statements. The Company cautions that its forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. Such factors include, without limitation, the highly competitive nature of the market in which the Company competes, including the introduction of new products, pricing changes by the Company's competitors and growth rates of the office systems category; risks associated with the Company's growth strategy, including the risk that the Company's introduction of new products will not achieve the same degree of success achieved historically by the Company's products; implementation of the Company's information systems project, which could impair the Company's operations if not implemented successfully or on time; the Company's dependence on key personnel; the ability of the Company to maintain its relationships with its dealers; the Company's indebtedness, which requires a portion of the Company's cash flow from operations to be dedicated to debt service, making such cash flow unavailable for other purposes, and which could limit the Company's flexibility in reacting to changes in its industry or economic conditions generally; the Company's reliance on its patents and other intellectual property; environmental laws and regulations, including those that may be enacted in the future, that affect the ownership and operation of the Company's manufacturing plants; risks relating to potential labor disruptions; fluctuations in foreign currency exchange rates; possible risks relating to year 2000 issues; and fluctuations in industry revenues driven by a variety of macroeconomic factors, including white-collar employment levels and corporate cash flows, as well as by a variety of industry factors such as corporate reengineering and restructuring, technology demands, ergonomic, health and safety concerns and corporate relocations. 10 Item 3. Quantitative and Qualitative Disclosures about Market Risk - ------------------------------------------------------------------- During the normal course of business, the Company is routinely subjected to market risk associated with interest rate movements and foreign currency exchange rate movements. Interest rate risk arises from the Company's debt obligations and related interest rate collar agreements. Foreign currency exchange rate risk arises from the Company's foreign operations and purchases of inventory from foreign suppliers. With the exception of the Company's variable rate debt obligation, there has been no material change in the carrying amounts or fair values of the Company's financial instruments or its exposure to market risk since the disclosure in the Company's annual report on Form 10-K for the year ended December 31, 1998. Regarding the variable rate debt, the Company had $86.0 million of such debt outstanding at March 31, 1999, which is an increase of $25.0 million from December 31, 1998. The fair value of this debt continues to approximate its carrying amount. 11 PART II -- OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- On or about March 24, 1999, five class action complaints (Stark v. Knoll, Inc., --------------------- et al., No. 17049NC; Guido v. Warburg, Pincus & Co., et al., No. 17052NC; - ------ -------------------------------------- Marotta v. Knoll, Inc., et al., No. 17053NC; Finkelstein v. Knoll, Inc., et - ------------------------------ ------------------------------ al., No. 17055NC; Rausch v. Knoll, Inc., et al., No 17059NC) were filed in the - --- ----------------------------- Court of Chancery for the State of Delaware, New Castle County, relating to the proposal by Warburg and certain members of Knoll management to purchase all of the outstanding shares of the Company's common stock owned by public stockholders for a price of $25.00 per share, which was previously discussed in Note 2 to the unaudited condensed consolidated financial statements. The defendants named in the complaints are the Company, Burton B. Staniar, John W. Amerman, Robert J. Dolan, Jeffrey A. Harris, Sidney Lapidus, Kewsong Lee, John L. Vogelstein, John H. Lynch, Warburg, Pincus & Co., Warburg and E.M. Warburg, Pincus & Co., LLC. The complaints allege breach of fiduciary duty on the part of Warburg and the Company's management in the proposed purchase of such shares of common stock and seek a preliminary injunction, damages and rescission. Due to the very early stage of the litigation at this time, and the inherent uncertainties in litigation, the Company is unable to predict what impact, if any, such litigation may have on the Company or the proposed transaction. Item 2. Changes in Securities and Use of Proceeds - -------------------------------------------------- Restrictions on Dividends The credit agreement governing the Company's revolving credit facility and the indenture relating to the Company's 10.875% Senior Subordinated Notes due 2006 limit the Company's ability to pay dividends to its stockholders. The Company has not paid any dividends on its common stock, and any future determination to pay dividends will depend on the Company's results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant by the Board of Directors. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- a. Exhibits: 27 Financial Data Schedule b. Current Reports on Form 8-K: On March 24, 1999, the Company filed a report on Form 8-K dated March 23, 1999. In that Form 8-K under Item 5 -- Other Events, the Company reported that it had issued a press release announcing that it had received a proposal from Warburg and certain members of the Company's management to acquire all of the outstanding shares of the Company's common stock owned by public shareholders for a price of $25.00 per share. The press release and the letter from Warburg making such proposal were included as exhibits to the Form 8-K. 12 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. Date: May 14, 1999 By: /s/ Burton B. Staniar ------------------------- Burton B. Staniar Chairman of the Board Date: May 14, 1999 By: /s/ Douglas J. Purdom ------------------------- Douglas J. Purdom Senior Vice President and Chief Financial Officer 13 EXHIBIT INDEX ------------- Exhibit Number Description ------- ------------- 27 Financial Data Schedule 14 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1999 MAR-31-1999 17,906 0 116,686 0 79,682 244,362 261,361 78,473 689,809 115,628 194,205 0 0 406 333,945 689,809 209,210 209,210 127,663 127,663 45,413 0 4,222 31,514 13,120 18,394 0 0 0 18,394 0.47 0.45
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