Knoll Inc. (KNL, Financial) filed Quarterly Report for the period ended 2009-06-30.
Knoll Inc a leading designer and manufacturer of branded office furniture products and textiles serves clients worldwide. Their commitment to innovation and modern design has yielded a comprehensive portfolio of products designed to provide enduring value and help clients shape their workplaces with imagination and vision. Knoll Inc. has a market cap of $462.21 million; its shares were traded at around $9.83 with a P/E ratio of 6.38 and P/S ratio of 0.41. The dividend yield of Knoll Inc. stocks is 0.81%.
During the second quarter of 2009, we incurred restructuring charges of $2.1 million. These charges included employee termination costs and costs associated with exiting three leased showrooms. During the second quarter of 2008, we incurred restructuring charges of $3.4 million related to employee termination costs and the discontinuation of a product line. Excluding these restructuring charges operating expenses for the quarter were $50.1 million, or 24.8% of sales, compared to $62.6 million, or 21.4% of sales, a year ago. The decrease in operating expenses during the second quarter of 2009 was in large part due to decreased spending in conjunction with our lower sales volumes; specifically lower commissions and incentive accruals. In addition, we are beginning to see benefits from previously implemented cost cutting measures. Our operating profit for the second quarter of 2009 was $18.5 million, a decrease of $16.6 million, or 47.3%, over the same period in 2008.
We continue to manage our balance sheet. We were able to pay down $23.0 million of debt during the second quarter of 2009. We will continue our efforts to reduce our receivables and inventory balances and use the available cash to pay down our outstanding debt. Maintaining a strong balance sheet and aggressively freeing up working capital remain top priorities. In furtherance of these efforts, we reduced our dividend to $0.02 in the second quarter of 2009. This has provided us with cash to use for other purposes. For the three months ended June 30, 2009, cash generated from operations was $27.8 million. Included in cash from operations was $10.1 million and $11.9 million from reductions in receivables and inventory. Capital expenditures for the quarter were $5.1 million.
Gross profit for the second quarter of 2009 was $70.7 million, a decrease of $30.4 million, or 30.1%, from gross profit of $101.1 million for the second quarter of 2008. Gross profit for the six months ended June 30, 2009 was $145.5 million, a decrease of $45.9 million, or 24.0%, from gross profit of $191.4 million for the same period in the prior year. Operating income for the second quarter of 2009 was $18.5 million, a decrease of $16.6 million, or 47.3%, from operating income of $35.1 million for the second quarter of 2008. Operating income for the second quarter of 2009 includes restructuring charges totaling $2.1 million. Operating income for the six months ended June 30, 2009 was $35.3 million, a decrease of $31.7 million, or 47.3%, from operating income of $67.0 million for the same period in 2008. Operating income for the six months ended June 30, 2009 includes restructuring charges totaling $8.3 million. Operating income for the six months ended June 30, 2008 includes restructuring charges totaling $3.4 million. As a percentage of sales, gross profit increased from 34.6% for the second quarter of 2008 to 35.0% for the second quarter of 2009. Operating income as a percentage of sales decreased from 12.0% in the second quarter of 2008 to 9.2% for the same period of 2009. For the six months ended June 30, 2009 and 2008 gross profit as a percentage of sales was 35.1% and 34.2%, respectively. Operating income as a percentage of sales decreased from 12.0% in the first six months of 2008 to 8.5% in the first six months of 2009.
Operating expenses for the second quarter 2009 were $50.1 million, or 24.8% of sales, compared to $62.6 million, or 21.4% of sales, for the second quarter 2008. Operating expenses for the six months ended June 30, 2009 were $101.9 million or 24.6% of sales compared to $121.0 million or 21.6% of sales for the same period in 2008. The decrease in operating expense dollars for the quarter and six months ended June 30, 2009 as compared with the prior year periods was in large part due to our cost reduction programs in response to decreased demand for our products. Decreased sales and performance related compensation accounted for approximately $6.0 million of the reduction in operating expenses during the second quarter of 2009.
Interest expense for the three and six months ended June 30, 2009 was $2.9 million and $5.6 million, respectively, a decrease of $1.1 million and $3.3 million, respectively, from the same periods in 2008. The decrease in interest expense for the periods noted above is due to lower average interest rates. During the second quarter of 2009 two of our interest rate swap agreements which were entered into May 21, 2008 went into effect. Interest expense of $503 thousand was accrued during the quarter. After giving effect to the interest rate swaps, we expect interest expense to be approximately $5.0 million for each of the remaining two quarters of 2009. See Note 5 of the condensed consolidated financial statements for further information regarding the interest rate swap agreements. The weighted average interest rate for the second quarter of 2009 was 2.4%. The weighted average interest rate for the same period of 2008 was 4.2%.
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Knoll Inc a leading designer and manufacturer of branded office furniture products and textiles serves clients worldwide. Their commitment to innovation and modern design has yielded a comprehensive portfolio of products designed to provide enduring value and help clients shape their workplaces with imagination and vision. Knoll Inc. has a market cap of $462.21 million; its shares were traded at around $9.83 with a P/E ratio of 6.38 and P/S ratio of 0.41. The dividend yield of Knoll Inc. stocks is 0.81%.
Highlight of Business Operations:
During the second quarter of 2009 we continued to be affected by lower demand caused by the global recession. Net sales were $202.2 million for the quarter, a decrease of 30.9% from the second quarter of 2008. The decrease in net sales was felt across all product categories and geographies. Our largest percentage sales declines occurred in office systems and in Europe. Backlog of unfilled orders at June 30, 2009 was $134.1 million, a decrease of $56.9 million, or 29.8%, compared to unfilled orders at June 30, 2008. Diluted earnings per share in the second quarter of 2009 fell 59.1% to $0.18 per share when compared to $0.44 per share during the same period in the prior year.During the second quarter of 2009, we incurred restructuring charges of $2.1 million. These charges included employee termination costs and costs associated with exiting three leased showrooms. During the second quarter of 2008, we incurred restructuring charges of $3.4 million related to employee termination costs and the discontinuation of a product line. Excluding these restructuring charges operating expenses for the quarter were $50.1 million, or 24.8% of sales, compared to $62.6 million, or 21.4% of sales, a year ago. The decrease in operating expenses during the second quarter of 2009 was in large part due to decreased spending in conjunction with our lower sales volumes; specifically lower commissions and incentive accruals. In addition, we are beginning to see benefits from previously implemented cost cutting measures. Our operating profit for the second quarter of 2009 was $18.5 million, a decrease of $16.6 million, or 47.3%, over the same period in 2008.
We continue to manage our balance sheet. We were able to pay down $23.0 million of debt during the second quarter of 2009. We will continue our efforts to reduce our receivables and inventory balances and use the available cash to pay down our outstanding debt. Maintaining a strong balance sheet and aggressively freeing up working capital remain top priorities. In furtherance of these efforts, we reduced our dividend to $0.02 in the second quarter of 2009. This has provided us with cash to use for other purposes. For the three months ended June 30, 2009, cash generated from operations was $27.8 million. Included in cash from operations was $10.1 million and $11.9 million from reductions in receivables and inventory. Capital expenditures for the quarter were $5.1 million.
Gross profit for the second quarter of 2009 was $70.7 million, a decrease of $30.4 million, or 30.1%, from gross profit of $101.1 million for the second quarter of 2008. Gross profit for the six months ended June 30, 2009 was $145.5 million, a decrease of $45.9 million, or 24.0%, from gross profit of $191.4 million for the same period in the prior year. Operating income for the second quarter of 2009 was $18.5 million, a decrease of $16.6 million, or 47.3%, from operating income of $35.1 million for the second quarter of 2008. Operating income for the second quarter of 2009 includes restructuring charges totaling $2.1 million. Operating income for the six months ended June 30, 2009 was $35.3 million, a decrease of $31.7 million, or 47.3%, from operating income of $67.0 million for the same period in 2008. Operating income for the six months ended June 30, 2009 includes restructuring charges totaling $8.3 million. Operating income for the six months ended June 30, 2008 includes restructuring charges totaling $3.4 million. As a percentage of sales, gross profit increased from 34.6% for the second quarter of 2008 to 35.0% for the second quarter of 2009. Operating income as a percentage of sales decreased from 12.0% in the second quarter of 2008 to 9.2% for the same period of 2009. For the six months ended June 30, 2009 and 2008 gross profit as a percentage of sales was 35.1% and 34.2%, respectively. Operating income as a percentage of sales decreased from 12.0% in the first six months of 2008 to 8.5% in the first six months of 2009.
Operating expenses for the second quarter 2009 were $50.1 million, or 24.8% of sales, compared to $62.6 million, or 21.4% of sales, for the second quarter 2008. Operating expenses for the six months ended June 30, 2009 were $101.9 million or 24.6% of sales compared to $121.0 million or 21.6% of sales for the same period in 2008. The decrease in operating expense dollars for the quarter and six months ended June 30, 2009 as compared with the prior year periods was in large part due to our cost reduction programs in response to decreased demand for our products. Decreased sales and performance related compensation accounted for approximately $6.0 million of the reduction in operating expenses during the second quarter of 2009.
Interest expense for the three and six months ended June 30, 2009 was $2.9 million and $5.6 million, respectively, a decrease of $1.1 million and $3.3 million, respectively, from the same periods in 2008. The decrease in interest expense for the periods noted above is due to lower average interest rates. During the second quarter of 2009 two of our interest rate swap agreements which were entered into May 21, 2008 went into effect. Interest expense of $503 thousand was accrued during the quarter. After giving effect to the interest rate swaps, we expect interest expense to be approximately $5.0 million for each of the remaining two quarters of 2009. See Note 5 of the condensed consolidated financial statements for further information regarding the interest rate swap agreements. The weighted average interest rate for the second quarter of 2009 was 2.4%. The weighted average interest rate for the same period of 2008 was 4.2%.
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