Knoll (KNL) 24 Oct 192019 Q3 Earnings call transcript

Good morning, everyone, and welcome to the Knoll Inc.

Third Quarter 2019 Conference Call. This call is being recorded. This call is also being webcast. Presentation slides accompany the webcast.

the may regarding that and and Knoll's goals, outlook call without forward-looking profitability expectations this ability future statements economy, future limitation, long for with addition, respect offer acquired leverage. are statements including, growth to to In integrate and businesses industry term revenue number largely beyond uncertainties, and certain which are These based company's and risks on forward-looking statements are of expectations company's control. the the are subject to a of

Exchange presentation a materially described financial Securities Actual financial accompany its comparable and references many GAAP the Report from result today results of slides as and as of include the with are including statements webcast. identified on the also differ to in measures. in factors included that most the The measures non-GAAP will the may other the Commission. these filings call and factors forward-looking will Annual form risks XX-K Reconciliations measures to Knoll's

Andrew Knoll. Now the let me Cogan, CEO and Chairman turn the call over to of

you between expansion. Thank was quarter growth to margin everyone balanced strong our to lifestyle very a call. welcome performance quarter deliver and earnings office as third we It and and statement continued good our and morning

quarter five XX the XXXX. and the points per from adjusted improvement, further like were years in basis With adjusted our share. share margin and sales earnings over investments the margin and XX% just work improvement progress segment, margin since initiatives best led margin of gross adjusted of continuous coupled under the on of and in workplace fourth office overall delivered with top-line EBITDA strongest to in acquisitions X% of both Muuto, gains growth EBITDA by basis expansion XXX organic in points growth XX.X% past These our we lean

XX% residential hospitality led the led X% commercial Rockwell continue FilzFelt, and Muuto, our This result. grew towards adjustable combined based office XX% our the unscripted, segment clients growth continued more of by in products sales by and lifestyle meeting wise get government KnollStudio, front, in by you height and with workplace and was trend XX% we to to On the tables and dates ride both growth Spinneybeck the strength conference we workplace growth driven in tables, workplace as workplaces.

Lifestyle products workplace as increased XX% total year a XX% ago. over percent a of and

amount to As XXXX, tools and the to breadth we an new solution here, we visualization our acquisition our will present Prior no to continue of for offer resimercialization to we Muuto old opportunity a out the share looking roll spent the time increasingly and become where hospitality all participation fair XD the our it of at easy included dealers clients. believe perspective of and our increase footprint. workplace total an increase as growth the the of of ancillary and greatest was based products workplace the a to for

strong We here enhanced the to Rockwell to Unscripted continues target initiatives deliver this Rockwell traction KnollStudio great as of offering and initiated area We're like seeing organic workplace. year-over-year product emerging growth. development

delivered existing more the this our this for through look in growth. record you amplify we our exponentially and relationships and of reported see year and and frankly yet we've performance. as and us EBITDA even for results quarter can particularly quarter Muuto as sales outside another done channels accelerate a high-impact has acquisition quality could Knoll that Additionally, contract we that client move to Muuto

and scratching total consumer both luxury XX% America XX% represents just Muuto's millennial volume America growth increased brand. time the the even this we're of the still of just of sales approximately the by XXX% quarter, Today our North the and dealer workplace up continued acquisition potential driven acceptance at growth and affordable Muuto in from In of partners we clients. believe and North by surface third store great scratching, by

new inventory sampling training, heartening further our in to results products have invested of see. the we've been investment As

Thinking regarding was fully similar.

targets market, large have at contract market billion the believe we and opportunity share that years. that as channel growth dealer broadly the achieved and the in gain $XX couple for sized to to further successfully designers the businesses we deepest represents mid past continue largest Looking and architects of

However, looking home but online values see within the do out business small intermediary. an office and the to channel of market an an underserved that transact without opportunity to target directly we design and segment wants

for channels. selection We a With we these leveraging don't Knoll outside of portfolio can believe we now serve of estimate while reach can solutions billion and an offer across current simultaneously synergies. ergonomic digitally table $X achieve we what segment. be their our distribution fully, Today to of we a limited by height-adjustable enhancing products with market existing audience our native and meaningful

This learnings we meaningful our scalable own there nicely opportunity efforts that B-corp we accretive Knoll level of scaling e-commerce another think share conscious direct-to-consumer the can years profitable for And are as prepare in and from will growth ahead. and and push across for profitable Muuto about socially the Fully be constellation. a

to On as exposure of and Hunt demand over the return just represent of stabilization of the resimercialization perform to the of best Holly continue front our businesses sales revenue. greatest the XX% lifestyle to with Within that see residential approximately X% did the growth. grew we quarter workplace lifestyle those

just at under a year-over-year flat were XX%. margins Lifestyle strong

room completion the design restaurants, on of of Airport featured This area. and center. interior September public one magazine project products full highest to pool and projects of multi-million recently dollar Muuto, and was KnollStudio, it's the KnollTextiles cover outdoor areas, this Filzfelt Saarinen of the even Spinneybeck TWA profile the hotel at Eero in in in with the flight We hotel Knoll participate are TWA iconic pleased JFK year's

at our best of and out yourself you to entire are you encourage biannual unique JFK. cultural position our I and to kind brand design enhances hosted meeting emblematic which These Knoll' in We projects quality. if leadership July modern of there each the team proposition commitment and visit find enduring of

number an focus our warfare the of XXXX, while Furthermore, grow trends secular as remain workplace. set continue employee broader within intact. mock-ups wellness of activity on the a to we talent target towards Looking and opportunities and driving both including positive funnel demand projects in the absolute dollars

We of of condition necessary our pace will sacrificing mid-term, macro in front without the us. to monitor activities accordingly and if continue opportunity adjust the long-term the

rationalize our industrial Additionally, to initiative our here on the forward our footprint, Coalesce. to in new you at building and work look broader progress plans we'll our to year as lean updating continues

me you let Now more our details. over results to the walk Charles call to Charles? through in turn

you, Thank Andrew.

manufacturing as volume as absorption These by quarter primarily and in favorable commodity due inflation costs mix. activities, product continuous to growth price from as addition third Andrew In realization discussed, offset year-over-year XXX the to facilities basis improvement higher margin drivers well tariffs. were by partially points cost during leverage in our the sales expanded positive gross and fixed

lowest continued commodity costs expected. the While had costs commodities negative ongoing effect. that dissipate in in tariffs This transportation. of of to minimal sequentially products The sourcing quarter both we've the a is around mitigation due was tariffs currently impact have and to impacted in by for two seen these as inflation impact the level of third years activities

product driven increased information development expenses primarily operating expenditures, by spending, and volume related adjusted investments technology initiatives. showroom million increased incremental Total $XX.X

we expect be future We growth investments. will realize to infrastructure return continue to but leverage invest able these initiatives drive in the to to future SG&A in our strategic on as the

restructuring million to exclude with of acquisitions Edelman $X.X assets $X.X $X.X $X.X expenses expenses Adjusted Holly Heim the of million our and million debt amortization Muuto, businesses, of of fully expenses refinancing acquisition related of transaction a connection intangible of related and fees, million. operating in

XXXX. Adjusted increase strengthen EBITDA investments increased believe third position margin The increased in quarter will was in the XX.X% improvements adjusted future EBITDA margin our growth. due for to XX.X% margin primarily offset XXXX by that to from gross operating expense we in strategic of

The segments QX expenses. in basis from a segment increased to EBITDA force, that's in that and QX product mix lifestyle segments. the offset in was for the QX of From EBITDA EBITDA and volume were of operating increase improvement office spending The by Adjusted lifestyle XX% increased XX.X% to primarily XXXX. expenses sales adjusted XXXX segment for initiatives XX investment in of QX marketing favorable basis growth mainly points adjusted new of to driven XXXX. within by operating sales decreased in XXXX offset from perspective, partially initiatives XX.X% decrease by partially points related increased continuous in the XX.X% XX due margin to

facility. of quarter, extension the maturity by Interest and date revolving The of the extended reduced XXXX lower the levels was interest due outstanding expense offset quarter In XXXX QX fully up in the completed and $X.X its borrowings compared of million an August rates. credit average loan and primarily credit higher its partially term acquisition the third from under to was to facility. pricing debt to company amendment

points. At remain current credit with reduces the the company loss fees. XX our In on consistent. facility, leverage, $X.XX the of from All recognized rate terms write-off of amended debt the by amendment deferred million other the interest connection of the facility extinguishment and financing extension basis

period earnings net for earnings of million affected up exclusive tax Adjusted from were of was quarter $X.XX $X.XX discussed. $XX.X are adjustments XXXX $XX.X per the previously was respectively. the million that XXXX. and for share $X.X XXXX Adjusted diluted for of quarter in earnings third the third XXXX of million net same net Adjusted earnings the and

million. and from to our million $X.X information related by technology provided investments primarily balance of outstanding equivalents quarter operating Cash was million the million. during Capital and Cash approximately at and expenditures infrastructure. expenditures debt $XX.X of were in capital was showroom by approximately offset $XXX largely cash the our $XX.X end QX quarter activities the

credit dividends from capital was expenditures revenue by X.XXx proceeds provided to and for the reduced expenditures of quarter to million activities by addition acquisition the million. revolving we end this received of QX, from Fully. of primarily at was In payments XXXX billion offset additional In QX, to XXXX. the payment spite was business of our related and the related financing in cash of $XX used debt Cash $X.X acquisition facility the X.XXx $X.X to

into use to will year our available of a remainder remain free cash Reducing the the of leverage primary and XXXX.

and outlined communications touched of in around markets. as Andrew centered strategy into prior underserved ancillary one it is has primary in sales As his remarks, our on we've penetration

workplace system's to seating and the In our business segment, from sales. to office benefit in growth continue core and in storage we strong growth ancillary addition

be deliver to Muuto to Filzfelt record shareholders. favorable value of a expect we continues Our this acquisitions trend to to successful focus, to while continue Hunt Holly different Fully from strategic our track and

in note, began received with say.com on the We'll and final Knoll in say.com by provide engage our we Q&A platform this shareholders quarterly a with call. directly As follows. answering to and have we earnings again as is of the call partnered begin partnering QX portion question to a a Say question

next the these over do years is What furniture to five the as in you capitalize biggest trends today trends? on positioned and see Andrew. how office Knoll

Charles you, you, Thank thank and Say.

Looking out, focused a of. I we’re taking think trends on few there are advantage

the in First many in privacy. that doing moving times It's greater employees increasingly focus settings and want demand collaborate wellness gather. bring maintain levels diverse for to foremost, a They'll same within the place and an variety environments from in workforce settings primacy. produce that to virtual to work, they its and a for businesses, to varying expect which responsible need the innovate appeal office we be adjust and to together, to multi-generational or to a will so group will manner individual and their that They environmentally promote of day.

and together that hospitality the they'll workplace Importantly best design. traditional of more out bring residential, seek settings experiential

in Our in Chicago was Chicago which XX open one by space all offices market embodies the coolest ship Crane trends. named just these newly five Fulton

challenge inspired of the will leverages change us enhancements that pipeline platforms development our this from our new workplaces help the is constellation that full talent. breadth design product Muuto edge in creating leading to to driven FilzFelt keep and the bring great of brands Knoll capabilities to the attract and retain Spinneybeck Our clients of and of of

This standard specific make always requirements and prided create requirements. clients individual to total that solution looking custom culture, to real respond to advantage our product well as Second, is extensive who and allows specifically us. development non-standard work with their that's workplace we modify that see or ourselves to rapidly Knoll solutions on competitive our a can more a our very them capability needs to tailored complex us specific help as for client has a develop conditions partner

architects investments to our we and work real renderings capabilities with time turn new those orders. and with can coupled visualization rapidly and partners dealer in into When then and workplaces clients our and co-create holistic

does furniture ones to it's and particularly Third, segment online. of will directly business native It and market driven add ease the the to dealer on our increasing product want BXC it smaller their quarter. digitally a relationships at dealers leveraging full the this of brands commerce an we past of small digital of reasons current the the not constellation growing capitalize we one of businesses to our the procure were of today to BXB our allows and portfolio available other offer breadth simultaneously disrupt excited fully some the spectrum office clients believe too. trends ergonomic channels clients increasingly design design simplest is Well, can across end existing products and and we to online more our more to fully this while

the we lines open will think, questions I up Operator, to now.

Burns Company. [Operator Instructions] with question comes Sidoti Gregory & Your first from

quarter this is? Can and the you Fully let Thanks. for much what quarter fourth outlook revenue to us know just the how contributed

in we pace Fully to running Sure. million in third – is and $XX of $XX at Fully Thanks one month as a basically million be million it. call it release of and right will activity million $XX we the had said now in we revenue the announce quarter. $XX worth, Fully so quarter

very gross of further you and field the see Do in favor like from margin, are transportation now this headwinds performance quarter. strong then, terms turning in And some the in sounds Thanks. expansion of margin for room Thanks. gross here? inflationary it your

Gregg. Thanks Yes.

communications from for XXXX. saw inflation year-over-year. come that continue headwind into to your we down to seen was but QX that So finish the peak that's on was to inflation, bit QX flat where year transportation commodity We turn points, dissipate. as that think this now. a year-over-year of this we've relatively noted Still quarter sequentially we're quarter previous but a expect still and and at certainly some out go to as we've

well initiatives and as that this as will drivers to we the improvement were initiatives go with end, the through lead next improvement volume continuous think in of margin we our continuous year. for continue biggest the and year I two remainder and quarter and the

with we we but last as necessarily next year we're So, we years and fixed certainly a probably the to little more benefit point in from midway the for we of those commodities I a think margin activities over earlier the opportunity cost year there's greater transportation the out close think as the previously couple reductions see gross settling additional maybe about costs a get talked of about and bit line of that expect the and year. didn't in in we

think particularly business gives Gregg, that see meaningful I is trajectory would really with particularly just all add be start and bundle deflation to margin in early Charles's see in margin just terms as margins us, margins looking the that to response should the go and we pleased our commodities office on basis been we EBITDA couple we'll XXX, gross a volume we've to what we confidence lean constant think we've our that improved basis and at you that that improvement like good said, improvement the midpoint initiatives continuous move we're and I to office points, as the point when year points then basis XXXX, on that basis next steel in in office I XXX forward. working we're and if with Charles back in of XXX of continue now by kind XXX by I improvement think of segment you

in of track? in Thanks. of the part Great of that then the terms America? terms are timeframe and still you in Muuto launching on North business consumer What's

know of a that's target. kind been of bit moving I Yes. a

be we've is, half the we're accelerate we've of we opportunity wouldn't back with of best kind out the see the it what XXXX XXXX had and success we're just but continue of say I the think of into and ramping busy incredibly right first from that. would reason the sometime in XXXX moved I the say half front our contract half into guess overwhelmed, now market of to

more manufacturing the own to I our to XXX% the our Muuto of do with, another perform businesses resources been record over our business, to capability we've fourth. and and lot localizing now enhancing more mean generally quarter, as textiles, time continue starting as on well a Knoll dealers again this making our and start past IT So we a easier grading investing in-stock dealer grew corridor business

also feel business BXC to how So we've and that our it Fully lot attention the of and I good XXXX learning and and just put actually all acquisition. so means de-prioritize to launch but going focus happen we've on operate get I to a had that of real from direct-to-consumer we're the feel kind that'll a

timing So that's today. the

you. thank Great,

you. Thank

Your McCall Securities. Global Seaport next with question comes from Matthew

morning Good you. everybody. Thank

Good morning.

trying maybe, want So you want midpoint, make that as points it margin Andrew, follow were you seen margin, office heard just got think in about on the you maybe XXX I trying make? years questions. improvement say overall you another of when talked you to that gross the is at that far XXX gross up margin few I to right you've I expansion margin gross the and to are last basis sure you've the to that, as at point

entirely that's think I possible.

of that X-X into need Yes. been the You're expecting successful think next mitigation to is our the over have a years. to offsetting tariff path improvement layer that. to in We're of kind to to efforts need deflation But, which going I continue to have going tariff there about that we're headwind. XX% the

here. Are from market quarter. is right? talking the XX, basis about And now It but this just points I the nice, like we the obviously bill commodities We've nice of we're that right guess seen from to sounds we've to helped XX.X, year. XXX kind talking point starting seasonal sure some make XX.X that seen that seasonal we're bill with over almost about

I office Matt, talking was here. specifically about No segment the

Oh, sorry, Alright what's and so starting question, yes. the thing point? same this I'm well, with

okay, So, I know while office EBITDA point somewhere around that there they're margins business over let's well can and most you gross the the the grab the recent Well in know quarter. see you about report have starting today the office is we you segment --. XX%, in that there

up of office can basically XX% in is XX%, segment. XX% of revenue, XX%, our we - And think XX% the get I our revenue. them office to

initiative we mix of So, we're next the X/Xrds margin with over over years. can XX% I that, think and taking move take gross Knoll couple of the

I and XX% that XX% get operating us can talked double-digit move and margins others. would again, probably is to we plus about think which see office But delivering we've consistently is where EBITDA margin some we always up into what which

get So, there's to able reason be no we there. shouldn’t

think margin in I lot upside a office remaining business. there's of our

about bit commodities. when can you cost, I get I may of a When to you talk what drivers then there? couple we little take talk be the drivers Can mean mix, to some And these main deflation reference of talk able a outside think to Charles' think about use you fixed you talk we can other about, just that about think of things. you about you but that

--. and Yes,

I mean it, Burn --. Well listen, Charles.

I activities. several was I'd quarter. just going I going continuous us to improvement had say, and I volume this we yes for think mean things mentioned

mix to also And but realization benefits was We some that to from through. other miscellaneous positive degree by items had was and a still inflation and offset degree that came positive. lesser price a product lesser

focus control, obviously we we improvement continuous will continue we which on. what can that control of to terms can In noted

continue tariffs, mitigation activities. we'll our In terms with of

As our Andrew great we business. reducing the mentioned, impact had success to

been forward and to to tariff to of those the year yes we have particular year that quarter. that's XXXX. as to continue try we'll to next end go the some We'll fourth perspective, price have something then, into mitigate see have but into goes in have this the that's do quarter. continue positive We an impacts to but realization it from how expect impact But

specifically of stabilization And some Hunt business. Andrew you the Holly brought Okay. you some benefit stabilization think think but and talked Holly addition maybe then, about I the residential when about from residential up

with growth, opportunities these specific we look typical How How can should no that drivers. see of just the outside any of offsetting specific typical indicators. just some do kind about offset think of macro I you at drivers? any with If that's solve of some you Knoll

leading Muuto of better incremental And drivers think Well have mean lot listen, again than take basis to we XXX still the is I Knoll, mean, you of we think significantly growth an level. as generating points are Muuto Muuto a the I that innings where be. to example. of can XXX we're that industry performance. in basis points Inc. at early the I

I our super Rockwell strong. look that's growing, our in tables, growing significant. are adjustable So, those businesses office Unscripted, think I business,

I mean dealers. then drivers, look So, those we're gaining within I at share our

be of mean, in the So, really last year the in playing is we're capturing, to accelerate I broadening we've field. past our kind we're

our but macro is opportunity of people dealer I about last $XX few share, the to were point know we to each our the share within in expect over channel gain dealers million, And to I continue gain macro gain So, market three share significant the are $XX pictures thinking share. picture, Each next or there points of what years. four million, us regardless gained the year. point of dealer and

can I think gaining that kind And of continue share pace. at to we

macro that have very there, will perform Knoll think better allow year remains So, we background some I this have industry. thing continue the specific we meaningfully a not counting to we're the together. initiatives supportive as us I think It's but than there on all to macro

only mention the And --. maybe didn’t resi was business, then, he there the thing of side

expanding initiatives out. build getting and own as I of BXC. and mean the year. sides resi think the Muuto the slower will of that been little little to resi count where we do consumer into where a I that how more yes plays that business efforts, direct a been e-commerce on our a kind that's be some this offers side's resi bit fully of Yes. And

opportunity There's beyond. in will 'XX and there come and a tremendous that

I've Knoll. is here I frankly have we really the think I of had the team with a that the really assembled platform them leadership team So, and brand, in constellation robust those we've working leading privilege got strongest like we of

Andrew. you, Thank

Thanks, Matt.

[Operator next James. with comes from Raymond Bobby question Griffin Your instruction]

for good Thanks my Charles. and Andrew morning, taking questions and congrats on quarter. Good a

Bobby. Thanks,

want first if south see had commentary of little on the So, bit some published it, what Andrew, There's about about from the just seeing been weakening see data in industry to on expand we lot the today in you're I we an points maybe of a office perspective. news. guess environment the a I that you would

Are project you seeing anything to give the any customers would different type smaller or customers worry from size overall that larger environment? of you about

say Well, this. continuing from growth to see more has constructive. We're first on quite let think bit clearly order Look year. listen, me downshifted and probably on first I I'll comment it's little a the but funnel, half demand the of the

in it see bit number. a You more

kind a to kind digit year. got into forecast But next BISMA X.X% of growth It's in spite low that you single for mid of of to environment.

the fundamentally remained which reinforces a the think drivers again pricing growth supportive I I overall point-of-view is think is solid, environment. is this

year. at are Inflation were clip growth as drivers they the then first have line or in I a early now in that we of much faster than of expanding is one this so bottom infancy. their and my it was you're seeing and margins our in actually very And still half receding mentioned

look point. So, take if at a BISMA as if starting I I

corporate August to down like But from is this is the and that that, some data. weakness the CapEx of corresponds X% that yesterday. ABI September know you some X.X% data Now ABI and released in probably and recent year

is versus going. think and project indicative strongly the we and more rebounded did improve of prior very contracts where negative, design slightly which actually Well, things the year are it was increase

listen resimercialization level, So, on pieces for of place. talent, competition growth, think aspectual for the the I the the work

on the QX, while workplace to is continue from The rates, to strong. QX tables seating increased Office and focus of space down absorption, growth. and impact wellness drive ergonomic very going it's remains that

top absorption XX over something up third the think quarter. positive was territory in I like of XX were XX% markets the and

to Leasing activity and corporate profits and were flow cash continues grow strong.

the line. XXXX the macro translate that overall picture, rate think digits. a bottom at look growth with environment. of can faster will Then up at it that Bobby, looking low So, to our when to we I our be on double happy data, kind And pipeline is I

and year meaningfully clients. with the and better the we're number as balance and We're in year well us greater rates for both more as seeing value this clients of of with is seeing kind opportunities we're awarded the that win opportunities. is seeing of pipeline the and for and total next correlating of an as increase dollar it those number total both The

better weakness BISMA comping We of XX the where they're prior this didn’t pocket our the and for year. track been Middle continue of than a of out to kind East projects year-to-date, we're up of real XX us in year has regions versus only couple large against that recur

looking But seeing is pipeline Middle consistent, not better. relatively East have that sizes the actually XXXX, been to we're headwind. and fighting project so The

data. Our share you gains are holding Muuto the and frankly I think accelerating and can with see that

scratching of the Muuto we're out continues then, and just the surface. park knocking And to

it's think I environment. And we be a know don’t will it's our internal planning we're gone as I think quite positive. XXXX, think you I So, bad for

be that into If like worth you a we'd then just to the basis to chopping as should organic here some layer again we may there and we or you of get XXX think for benefit fully growth you X% in be outlook XXXX. a points as and expect you X.X% some baseline BISMA's but digit there take nice outperform, know Muuto X% go, growth get mid-single I to another

where of basis what XX you talked on in headwinds points points XX And up basis gross basis Charles points, in margin. depending another with some factor which about these end XX then maybe maybe is that

journey margins in we us think XXXX. frankly do the on Even in That's terrific if make on gets and XX% so it to we a could able growth mid-single mid-term more a margin you were of place, know we rate. I set goal more progress XXXX EBITDA than we a

good that's to like a So, me good a environment. that's

the very up I detail, investment this that's type highest and question did the time appreciate Yes, into would side Is be things. this good could it quarter Okay. of all it actually I sounds where leads And second almost agree. growth. -- SG&A the the of there, my around

Investments of that bit hit help should then margin a into and off quarter this little with wean XXXX expansion to story? kind maybe it

way think the think where think I low forward. and can the the we going on spends I I going what I the is might -- I more of Certainly it but environment progress XXs down is think can would, toggle kind about where way is up those, I depending maybe we're make margin growth on we the to really going run operating it focused forward. think improvements toggle we're

for And I low now. would assume OpEx in XXs the stays

Okay.

you. Charles, to

would agree. Yes, I

as we to XXXX, continued sales due fact are have that the continue a these to ahead bit I make continue strategic we expect might into opportunities it expect of of we'll growth. us. investments to But go that get the to we from think forward benefit little

So, with inside. everything I agree

helpful. XXXX, I on and what's lastly from that's we guess And you that look Okay, very opportunity just Muuto about there. is going talked you When a me, lot Andrew then that about. talking for it's at the exciting are growth

Muuto a how and And kind big just consumer of do consumer that more direct rollout that those be of it. I guess in that into the to channels from secondly, perspective environment U.S.? the or the would Does kind getting top of include think the could consumer be of you would on

XXXX in and to direct Well, does nothing part. sales to about Muuto in talked assumes that Muuto of retailers. all, other Okay. e-tailors first I our any consumer

certainly the that's and so, get does been growing business nicely. do that wholesale U.S. Muuto some some So, we in

doubling XXX% three double a I'm Muuto Really years. further penetration. talking Muuto just we of said we're Again, we business path four we contract the thought four what on to -- years, right could is we the in business or three in about with

margin. XX%, XX% worth With of EBITDA margins

what now thing sales. that's in Muuto, penetration just XXXX we're another talking Muuto of further think success. for I And So, is assumptions our one of is about to one kind workplace happening get with success

into as our well it, lean more do with So, see harder and starts they dedicate they dealer to it. can they resources

$XXXX now we a half of we that its back in The to Muuto of cycle other project. but with lot digit to the And getting started, we're this longer thing Muuto is Muuto started projects. the happen work work, get six starting were project year

it's or it's So, smaller.

corporate programs larger really So, to see it's the exciting within penetration corporate clients, A&D hospitality standards community the our and within within setting. and

So, I points market basis in and XXX then year. the workplace Inc. Knoll the consumer for for a percent of of Muuto, what's can growth 'XX, points hospitality contract in total we'll start as worth? to XXX surely basis And we Knoll, get next the think that to catch market,

know That's we But XXX estimate there. of have another if now basis to just swag I points that right better growth. when don’t I'd say XXX points incremental we'll get probably worth another worth on that's basis Muuto I a it

Okay, that's XQ. Best the Well, questions. again of taking thanks quarter on helpful. for and luck very congrats my going into

Okay. Thanks, Bobby.

Bobby.

showing back to no time. conference at Mr. I'm like to I Cogan. turn the further this would questions now

catching you everybody Well, to Great. Everybody, look up we'll you with cheers. in forward us thank for the and joining today's Year. call in New

and concludes your have this and wonderful participation Thank Ladies a day. gentlemen, today's for conference. you

You disconnect. all may