MillerKnoll Inc (NASDAQ:MLKN) stock fell 0.34% (As on December 21, 11:31:37 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY 24. Gross margin in the quarter was 39.2%, which is 470 basis points higher than the same period last year. The year-over-year increase in gross margin was mainly driven by strategic inventory management, moderating input costs, the realization of price optimization strategies, and benefits from the ongoing synergy efforts. On an adjusted basis, consolidated operating margin for the quarter was 7.9%, a record high level since the acquisition of Knoll, Inc. As of December 2, 2023, the liquidity position reflected cash on hand and availability on the revolving credit facility totaling $583.1 million. During the second quarter, the business generated $82.4 million of cash flow from operations and the company reduced the total outstanding debt by $18.9 million as part of the capital deployment priority of maintaining a strong balance sheet. The company also repurchased approximately 1.4 million shares for a total cash outlay of $27.9 million. The company ended the second quarter with a net debt-to-EBITDA ratio, as defined by the lending agreement, of 2.5x.

Further, as of the end of the second quarter, the company have achieved $147 million in run-rate cost synergies resulting from the acquisition of Knoll, Inc. in the first quarter of fiscal 2022. The company continues to make meaningful progress on the 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 second quarter of FY 24 has reported the adjusted earnings per share of 59 cents, beating the analysts’ estimates for the adjusted earnings per share of 55 cents. The company had reported 11 percent decline in the adjusted revenue growth to $949.5 million in the second quarter of FY 24, missing the analysts’ estimates for revenue by $21.98 million. There is a decrease of 10.1% organically compared to the same period last year. The overall year-over-year organic decline in net sales was driven by lower beginning backlog, partially offset by faster fulfillment patterns. Orders in the quarter of $944.0 million were 6.8% lower on a reported basis and 6.0% lower organically compared to the prior year. Although the order intake for the full quarter was lower year-over-year, it improved sequentially as the company progressed through the period.