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A business consultancy, based in London, England, John Sacks' JSA Consultancy Services provides expert, in-depth, information advice and guidance as to how to exploit successfully the office furniture and interiors markets in Europe, North America, Australasia and Japan.

Knoll 3rd Qtr sales down 36%

Tuesday 10 November 2009

Sales for the third quarter of 2009 were $181.3 million, a decrease of $102.2 million, or 36.1%, from sales of $283.5 million for the same period in the prior year. Sales for the nine months ended September 30, 2009 were $596.1 million, a decrease of $247.8 million, or 29.4%, over the first nine months of 2008. This quarter they experienced double digit declines in every product category and geography when compared with the prior year. These declines are occurring across the industry as the Business and Institutional Furniture Manufacturer’s Association (“BIFMA”) is forecasting a 31.0% decline in sales for 2009. Gross profit for the third quarter of 2009 was $61.3 million, a decrease of $42.9 million, or 41.2%, from gross profit of $104.2 million for third quarter of 2008. Gross profit for the nine months ended September 30, 2009 was $206.8 million, a decrease of $88.8 million, or 30.0%, from gross profit of $295.6 million for the same period in the prior year. Operating income for the third quarter of 2009 was $16.8 million, a decrease of $24.3 million, or 59.1%, from operating income of $41.1 million for the third quarter of 2008. Operating income for the nine months ended September 30, 2009 was $52.1 million, a decrease of $56.0 million, or 51.8%, from operating income of $108.1 million for the same period in 2008. As a percentage of sales, gross profit decreased to 33.8% for the third quarter of 2009 from 36.8% for the third quarter of 2008. The decrease in gross profit for the quarter is largely due to unfavorable fixed cost absorption in our facilities due to the lower sales volume as well as price deterioration. For the nine months ended September 30, 2009, gross profit as a percentage of sales decreased to 34.7% from 35.0% in 2008. Operating income as a percentage of sales decreased to 9.3% in the third quarter of 2009 from 14.5% over the same period in 2008. For the nine months ended September 30, 2009, operating income as a percentage of sales decreased to 8.7% from 12.8% in 2008. Operating income for the nine months ended, September 30, 2009 and 2008, includes restructuring charges of $8.4 million and $3.4 million, respectively.

For the nine month period ended September 30, 2009, they used available cash, including the $42.5 million of net cash from operating activities, to fund $11.5 million in capital expenditures, invest $0.8 million in intangible assets connected to future product offerings, repurchase $0.8 million of common stock for treasury, fund dividend payments to shareholders totalling $7.3 million, pay down debt of $27.1 million, and fund working capital.

For the nine month period ended September 30, 2008, we used available cash, including the $97.5 million of net cash from operating activities, and $1.7 million of proceeds from the issuance of common stock, to fund $9.8 million in capital expenditures, repurchase $34.3 million of common stock for treasury, fund dividend payments to shareholders totaling $17.0 million, pay down debt of $26.1 million, and fund working capital.

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