Knoll Q3 Profit Up 83%, Results Beat Estimates

(RTTNews) - Knoll Inc. (KNL) on Friday reported an 83 percent increase in profit for the third quarter from last year, reflecting a double-digit increase in sales and higher margins. Both revenue and earnings per share for the quarter beat analysts' expectations.

Andrew Cogan, CEO of Knoll said, "It was a strong quarter as our strategy delivered better than industry growth and operating margins. The combination of the continued turn of our North America Office business, double-digit organic growth, and the addition of our HOLLY HUNT acquisition are coming together to start to deliver the kind of performance we would expect."

The East Greenville, Pennsylvania-based maker of workplace furnishings, textiles and fine leathers, said its net income for the third quarter was $15.65 million or $0.33 per share, up from $8.55 million or $0.18 per share in the year-ago period.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 24 percent to $268.30 million from $216.90 million in the year-ago quarter. Analysts had a consensus revenue estimate of $258.83 million.

On an organic basis, excluding the impact of the Holly Hunt acquisition, sales for the quarter increased 10.1 percent year-over-year.

Net sales for the Office segment grew 11 percent from last year to $166.8 million, as a result of growth attributable to new workplace models and office systems. Offsetting this growth in the Office segment was a marginal decline in government sales year-over-year.

Net sales for the Studio segment grew 92 percent to $72.2 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 2 percent from last year to $29.3 million.

The company's gross margin for the quarter expanded 200 basis points from the year-ago period to 35.4 percent, while operating margin rose 80 basis points to 8.7 percent.

Operating profit for the quarter grew 36 percent from the prior-year period to $23.3 million.

KNL closed Thursday's trading at $17.88, up $0.21 or 1.19 percent on a volume of 190,283 shares.