Knoll Q2 Profit Up 37%, Results Beat View

(RTTNews) - Knoll Inc. (KNL) on Friday reported a 37 percent increase in profit for the second quarter from last year, reflecting higher sales and margins. Both revenue and earnings per share for the quarter beat analysts' expectations.

Andrew Cogan, CEO of Knoll said, "We believe that the results we reported this quarter demonstrate the impact our strategic efforts to broaden our exposure to high margin, high design Specialty and consumer facing businesses can have on our top and bottom line results, particularly when coupled with improving performance in our core Office segment."

The East Greenville, Pennsylvania-based maker of workplace furnishings, textiles and fine leathers, said its net income for the second quarter was $10.85 million or $0.23 per share, up from $7.89 million or $0.17 per share a year ago.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude special items.

Non-cash charges related to foreign exchange losses decreased earnings for the latest quarter by $0.03 per share.

Net sales for the quarter grew 24 percent to $265.80 million from $214.31 million in the year-ago quarter. Analysts had a consensus revenue estimate of $251.97 million.

On an organic basis, excluding the impact of the Holly Hunt acquisition, sales for the quarter increased 11.4 percent year-over-year.

Net sales for the Office segment grew 7 percent from last year to $159.1 million, as a result of improved government and commercial sales. The latest quarter marked the first increase in governmental sales since 2011.

Net sales for the Studio segment more than doubled to $76.3 million, primarily reflecting the acquisition of Holly Hunt during the first quarter of 2014 as well as organic growth in Europe and North America. Net sales for the Coverings segment rose 5 percent from last year to $30.4 million.

The company's gross margin for the quarter expanded 400 basis points from the year-ago period to 36.6 percent, while operating margin rose 300 basis points to 8.4 percent.

Operating profit for the quarter surged 79 percent from the prior-year period to $22.2 million.

KNL is trading at $17.78, up $0.81 or 4.77 percent on a volume of 53,506 shares.