MillerKnoll Inc (NASDAQ:MLKN) stock fell 16.64% (As on March 28, 11:15:23 AM UTC-4, Source: Google Finance) after the company posted mixed results for the third quarter of FY 24. Orders in the quarter of $830.3 million were 6.2% lower on a reported basis and 4.7% lower organically compared to the prior year. Gross margin in the quarter was 38.6%, which is 450 basis points higher than the same period last year. The main drivers of the year-over-year increase in Gross margin were the realization of price optimization strategies; improved freight, distribution and inventory management; an impairment charge recorded in the prior year; and benefits from the ongoing synergy efforts. On an adjusted basis, consolidated operating margin for the quarter was 6.7%. In the third quarter of last year, adjusted operating margin totaled 7.5%. As of March 2, 2024, the liquidity position reflected cash on hand and availability on the revolving credit facility totaling $558 million. During the third quarter, the business generated $60.6 million of cash flow from operations. The company repurchased approximately 1.5 million shares for a total cash outlay of $40.0 million. The company ended the third quarter with a net debt-to-EBITDA ratio, of 2.65x. The scheduled debt maturities (which exclude the maturity of the revolver) for the remainder of fiscal year 2024, and for fiscal years 2025, 2026 and 2027 are $11.0 million, $41.3 million, $46.2 million and $276.3 million respectively.
As of the end of the third quarter, we have achieved $153 million in run-rate cost synergies resulting from the acquisition of Knoll, Inc. in the first quarter of fiscal 2022. We continue to make meaningful progress on our integration plans expecting total run-rate cost synergies of $160 million per year by July 2024, which is the third-year anniversary of the Knoll, Inc. acquisition.
MLKN in the third quarter of FY 24 has reported the adjusted earnings per share of 45 cents, beating the analysts’ estimates for the adjusted earnings per share of 44 cents. The company had reported 11.4 percent decline in the adjusted revenue growth to $872.3 million in the third quarter of FY 24, missing the analysts’ estimates for revenue of $909.5 million.
The company expects fiscal Q4 adjusted EPS to be in the range of $0.49 to $0.57. Analysts surveyed by Capital IQ expect $0.68.
MillerKnoll expects Q4 sales is expected to be between $880 million and $920 million. Analysts expect $961.4 million.