EAST GREENVILLE, Pa. – Contract furniture manufacturer Knoll Inc. reported $274.1 million is net sales for the second quarter ended June 30 -- a 25.4% dip compared to the same period in 2019. Knoll said a bigger revenue decline was mitigated by “strong work from home results and channel diversification.”
The company reported a net loss of $9.6 million loss for Q2 compared to a $21.6 million profit one year ago.
Knoll said eCommerce sales of its Fully office chair and adjustable table products increased 148% in the second quarter. The company recently expanded its work-from-home eCommerce sales with the addition of its Muuto furnishings line. Work-from-home product sales represent approximately 10% of Knoll’s overall sales.
“Both Fully’s position and the Knoll + Muuto initiative also enable us to take these brands’ direct-to-consumer ergonomic offerings to our corporate clients, providing their employees with online access to the right furniture for working from home,” Knoll said.
Knoll said expanding its focus on work-at-home customer demand was part of the “game plan” it developed at the start of the coronavirus outbreak to mitigate the impact of the pandemic on the company’s operations. Included was implementing $50 million of annualized operating expense reductions to help brunt the effect of sagging sales on its bottom line.
“The workplace in a COVID-19 environment will no doubt be different, but it will still be there;” Knoll said. “Over the past three months our workplace sales, marketing, design and product development teams have quickly pivoted to engage with and support our clients, dealers and the architecture and design community, virtually leveraging investments we have made in digital visualization technologies and rapid product development.”
To brace for an anticipated negative hit on revenues and “maximize our liquidity and protect our free cash flow” Knoll said it eliminated approximately 400 positions, furloughed an undisclosed number of employees, froze salaries and suspended 401k contributions. In addition to those estimated $50 million in cost reductions, the company said it “also took advantage of CARES Act provisions, including payroll tax deferrals and the Employee Retention Credit, and Canada Emergency Wage Subsidies.”
On July 21, Knoll finalized the purchase of $164 million in convertible preferred stock by an independently managed subsidiary of Investindustrial VII L.P. Knoll said the proceeds of this additional capital will be used to reduce debt, “positioning us with a fortress balance sheet such that we are confident that we will continue to have the resources to execute our strategic plan in the face of an uncertain macroeconomic environment.”
Knoll reported that its manufacturing plants are “100% operational.” “By implementing safe working practices, including masks, social distancing and temperature checks, we have been able, with a few exceptions, to keep our manufacturing associates safe and well,” the company added.
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