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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-K

(Mark One)


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 31, ~~2023~~2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-15141

__________________________________________

MillerKnoll, Inc.

(Exact name of registrant as specified in its charter)

__________________________________________


Michigan						38-0837640
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

855 East Main Avenue, Zeeland, MI 49464

(Address of principal executive offices and zip code)

(616) 654-3000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.20 per share	MLKN	Nasdaq Global Select Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. □

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting stock held by “nonaffiliates” of the registrant (for this purpose only, the affiliates of the registrant have been assumed to be the executive officers and directors of the registrant and their associates) as of December 31, ~~2022~~2023, was $1.59 billion (based on $2026.2766 per share which was the closing sale price as reported by Nasdaq). As of July 1719, ~~2023~~2024, the registrant had 7569,~~701~~830,~~287~~778 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Registrant's Proxy Statement for the ~~2023~~2024 Annual Meeting of Shareholders are incorporated by reference into Part III of this report.

MillerKnoll, Inc.

Annual Report on Form 10-K

Table of Contents

			Page No.
Part I
Item 1 Business			2
Item 1A Risk Factors			6
Item 1B Unresolved Staff Comments			1312
Item 1C Cybersecurity			12
Item 2 Properties			14
Item 3 Legal Proceedings			15
Additional Item: Executive Officers of the Registrant			15
Item 4 Mine Safety Disclosures			16
Part II
Item 5 Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities			17
Item 6 [Reserved]			19
Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations			20
Item 7A Quantitative and Qualitative Disclosures about Market Risk			44
Item 8 Financial Statements and Supplementary Data			4847
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosures			98
Item 9A Controls and Procedures			98
Item 9B Other Information			98
Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			98
Part III
Item 10 Directors, Executive Officers, and Corporate Governance			99
Item 11 Executive Compensation			99
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			99
Item 13 Certain Relationships and Related Transactions, and Director Independence			100
Item 14 Principal Accountant Fees and Services			100
Part IV
Item 15 Exhibits and Financial Statement Schedule			101
Exhibit Index			102
Schedule II Valuation and Qualifying Accounts			~~105~~104
Item 16 Form 10-K Summary			~~105~~104
Signatures			~~106~~105

PART I

Item 1 Business

General Development of Business

MillerKnoll is a collective of dynamic brands that comes together to design the world we live in. From the spaces we make that help us live and work better, to how we manufacture our products, to the ways we solve challenges facing our customers and global community, design is our tool for creating positive impact. Our optimism leads us as we redefine modern for the 21st century, shaping a future that’s more sustainable, caring, and beautiful for all people and our planet.

The Company researches, designs, manufactures and distributes interior furnishings for use in various environments including residential, office, healthcare and educational settings, and provides related services that support organizations and individuals all over the world. The Company’s products are sold primarily through the following channels: independent contract furniture dealers, direct customer sales, owned and independent retailers, direct-mail catalogs, and the Company’s eCommerce platforms.

InPowering ~~July~~the ~~2021~~world's most dynamic design brands, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman®, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®. All of these companies are considered controlled subsidiaries. MillerKnoll's corporate offices are located at 855 East Main Avenue, PO Box 302, Zeeland, Michigan, 49464-0302 and its telephone number is 616 654 3000. Unless otherwise noted or indicated by the context, all references to "MillerKnoll," "we," "our," "Company" ~~finalized~~and ~~the~~similar ~~acquisition~~references ofare ~~Knoll~~to MillerKnoll, Inc. ~~(“Knoll”)~~and inits acontrolled ~~cash~~subsidiaries. ~~and~~Further ~~stock~~information ~~transaction~~relating ~~valued~~to atprinciples ~~approximately~~of $consolidation is provided in Note 1. to the Consolidated Financial Statements included in Item 8 ~~billion.~~of this report.

Powering the world's most dynamic design brands, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman® Leather, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, Maars® Living Walls, Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®. All of these companies are considered controlled subsidiaries, except for Maars of which the Company owns 48.2% of as of June 3, 2023. MillerKnoll's corporate offices are located at 855 East Main Avenue, PO Box 302, Zeeland, Michigan, 49464-0302 and its telephone number is 616 654 3000. Unless otherwise noted or indicated by the context, all references to "MillerKnoll," "we," "our," "Company" and similar references are to MillerKnoll, Inc. and its controlled subsidiaries. Further information relating to principles of consolidation is provided in Note 1 to the Consolidated Financial Statements included in Item 8 of this report.

Segments

The Company has three reportable segments: Americas Contract ~~("Americas")~~, International Contract & Specialty ~~("International & Specialty")~~, and Global Retail ~~("Retail")~~. The Company also reports a corporate category consisting primarily of unallocated corporate expenses. For a more detailed description of the Company's segments, refer to Item 7 of this report.

Financial information relating to segments is provided in Note 14 to the Consolidated Financial Statements included in Item 8 of this report.

Description of Business

MillerKnoll is a global leader of design. Our brands have led conversations on design for over 100 years, and we continue to drive our industry forward with visionary thinking and a purposeful approach. The Company's principal business consists of the research, design, manufacture, selling and distribution of seating products, furniture systems, other freestanding furniture elements, textiles, leather, felt, home furnishings and related services.

The Company's ingenuity and design excellence create award-winning products and services, which have made the Company a leader in the design and development of furniture, furniture systems, textiles, leather, felt and related technology and acoustical solutions. This leadership is exemplified by the innovative concepts introduced by the Company in its broad array of product offerings.

The Company's furniture systems, seating, freestanding furniture, storage, casegoods, textile products, leather, felt, acoustic products and related services are used in (1) institutional environments including offices and related conference, lobby, and lounge areas and general public areas including transportation terminals; (2) health/science environments including hospitals, clinics and other healthcare facilities; (3) industrial and educational settings; and (4) residential and other environments.

The Company's products are marketed worldwide by its own sales staff, independent dealers and retailers, via its eCommerce websites, and through its owned Herman Miller, Design Within Reach ("DWR"), HAY, Knoll, and Muuto retail stores and studios. Salespeople work with dealers, the architecture and design community, and directly with end-users. Independent dealerships concentrate on the sale of MillerKnoll products and some complementary product lines of other manufacturers. It is estimated that approximately 5657.24% of the Company's sales in the fiscal year ended June 31, ~~2023~~2024, were made to or through independent dealers. The remaining sales were made directly to end-users, including federal, state and local governments and several business organizations by the Company's own sales staff, retail channels, or to independent retailers.

The Company is a recognized leader within its industry for the use, development, and integration of customer-centered technologies that enhance the reliability, speed, and efficiency of our customers' operations. This includes proprietary sales tools, interior design and product specification software, order entry and manufacturing scheduling and production systems, and direct connectivity to the Company's suppliers.

Raw Materials

The Company's manufacturing materials are available from a significant number of sources within North America, South America, Europe and Asia. The costs of certain direct materials used in the Company's manufacturing and assembly operations are sensitive to shifts in commodity market prices. In particular, the costs of steel, plastic, aluminum components and particleboard are sensitive to the market prices of commodities such as raw steel, aluminum, crude oil, lumber and resins. Increases in the market prices for these commodities can have an adverse impact on the Company's profitability. Further information regarding the impact of direct material costs on the Company's financial results is provided in Management's Discussion and Analysis in Item 7 of this report, "Management's Discussion and Analysis of Financial Condition and Results of Operations”.

Patents and Trademarks

The Company believes its intellectual property rights are an important component supporting the long-term success of its brands and its competitive position, and it strategically applies for, registers, and maintains its intellectual property rights in the United States and a number of foreign countries where such protection is available. These rights include patent, trademark, copyright and trade secrets, among other proprietary rights. The Company also maintains a robust intellectual property enforcement program to protect its intellectual property rights against third party infringements.

The Company and its subsidiaries hold many active utility and design patents in the United States as well as in a number of foreign countries. The Company has also registered various trademarks, including the name and stylized “Herman Miller” trademark, the “Herman Miller Circled Symbolic M” trademark, and the name and stylized “Knoll” trademark in the United States and many foreign countries, which it considers to be among its most valuable intellectual property rights.

The Company considers the following trademarks and any associated stylized depictions of the word marks to be among its most important trademarks for distinguishing the Company, its subsidiaries and its goods from those of others: MillerKnollTM, Herman Miller®, Herman Miller Circled Symbolic M®, Knoll®, Maharam®, Geiger®, Design Within Reach®, DWR®, HAY®, NaughtOne®, Nemschoff®, Aeron®, Mirra®, Embody®, Setu®, Sayl®, Cosm®, Caper®, Eames®, Knoll®, KnollExtra®, Knoll Luxe®, KnollStudio®, KnollTextiles®, Edelman® ~~Leather~~, Spinneybeck® Leather, Generation by Knoll®, Regeneration by Knoll®, MultiGeneration by Knoll®, Remix®, Holly Hunt®, Vladimir Kagan®, Muuto®, Barcelona®, and Womb®, as well as trademark registrations for trade dress and common law rights in trade dress for some of the Company’s significant product designs.

Working Capital Practices

Information concerning the Company's working capital levels relative to its sales volume can be found under Item 7 of this report, “Management's Discussion and Analysis of Financial Condition and Results of Operations.” Beyond this discussion, the Company does not believe that it or the industry in general has any special practices or special conditions affecting working capital items that are significant for understanding the Company's business.

Customer Base

The Company approximates that no single independent dealer accounted for more than 43% of the Company's net sales in the fiscal year ended June 31, ~~2023~~2024. The Company estimates that the largest single end-user customer accounted for $~~174~~180.93 million, $~~114~~174.49 million and $~~113~~114.04 million of the Company's net sales in fiscal ~~2023~~2024, ~~2022~~2023, and ~~2021~~2022, respectively. This represents approximately 45% of the Company's net sales in fiscal ~~2023~~2024, 34% in fiscal ~~2022~~2023, and 53% in fiscal ~~2021~~2022. The Company's ten largest customers in the aggregate accounted for approximately 1416% of net sales in fiscal ~~2023~~2024, 1114% in fiscal ~~2022~~2023, and 1711% in fiscal ~~2021~~2022.

Backlog of Unfilled Orders

As of June 31, ~~2023~~2024, the Company's backlog of unfilled orders was $~~698~~683.06 million. At ~~May~~June 283, ~~2022~~2023, the Company's backlog totaled $~~932~~698.50 million. It is expected that substantially all of the orders forming the backlog at June 31, ~~2023~~2024 will be filled during the next fiscal year. Many orders received by the Company are reflected in the backlog for only a short period while other orders request extended delivery dates and are carried in the backlog for up to one year. Accordingly, the backlog at any particular time does not necessarily indicate the level of net sales for a particular succeeding period.

Government Contracts

Other than standard provisions contained in contracts with the United States Government, the Company does not believe that any significant portion of its business is subject to material renegotiation of profits or termination of contracts or subcontracts at the election of government entities. The Company sells to the U.S. Government both through General Services Administration ("GSA") Multiple Award Schedule Contracts and through competitive bids. The GSA Multiple Award Schedule Contract pricing is principally based upon the Company's commercial price list in effect when the contract is initiated, rather than being determined on a cost-plus-basis. The Company is required to receive GSA approval to apply list price increases during the term of the Multiple Award Schedule Contract period.

Competition

All aspects of the Company's business are highly competitive. ~~From~~The ~~a furniture perspective, the~~ Company competes largely on design, product and service quality, speed of delivery and product pricing. Although the Company is one of the largest furniture manufacturers in the world, it competes with manufacturers that have significant resources and sales as well as many smaller companies. The Company's most significant competitors are Haworth, HNI Corporation, and Steelcase Inc.

The Company also competes in the home furnishings industry, primarily against national, regional and independent home furnishings retailers who market high-craft furniture to end-user customers and the interior design community. These competitors include companies such as Crate & Barrel Holdings, Inc., Hive Modern, Restoration Hardware, Room & Board, Inc., Wayfair Inc., and Williams-Sonoma, Inc. ~~Similar~~In tothis ~~its furniture product offerings~~market, the Company competes primarily on design, product and service quality, speed of delivery and product pricing ~~in this market~~.

Research, Design and Development

The Company believes it draws great competitive strength from its research, design and development programs. Through research, the Company seeks to understand, define and clarify customer needs and problems. The Company designs innovative products and services that address customer needs and solve their problems. The Company uses both internal and independent research and design resources. Exclusive of royalty payments, the Company spent approximately $6762.60 million, $7167.16 million and $5071.81 million on design and research activities in fiscal ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, respectively. Generally, royalties are paid to designers of the Company's products as the products are sold and are included in the Design and research line item within the Consolidated Statements of Comprehensive Income.

Environmental Matters

The Company believes that a business must stand for more than just its products and services and the Company's people around the globe share a commitment to using business as a force for good.

Increased focus by U.S. and overseas governmental authorities on environmental matters is likely to lead to new governmental initiatives, particularly in the area of climate change. While we cannot predict the precise nature of these initiatives, we expect that they may impact our business both directly and indirectly. Although the impact would likely vary by world region and/or market, we believe that adoption of new regulations and execution of the Company's sustainability strategy will increase costs for the Company. Also, there is a possibility that governmental initiatives, or actual or perceived effects of changes in weather patterns, climate, or water resources could have a direct impact on the operations of the Company in ways which we cannot predict at this time.

The Company monitors developments related to environmental matters and plans to respond to governmental initiatives in a timely and appropriate manner. The Company’s ~~commitment to the planet~~ is ~~embedded in its corporate strategy and will continue to develop as the Company works to meet sustainability goals by 2030. The Company is~~ focused on operating its global footprint with minimal impact on the environment and designing products with materials and processes that ~~are~~minimize ~~safe~~impact ~~for~~on ~~both people and~~ the planet.

Human Resources

The Company considers its employees to be ~~another~~amongst of its ~~major~~ competitive strengths. The Company ~~stresses~~has a focus on individual employee participation and incentives, believing that this emphasis has helped attract and retain a competent and ~~motivated~~engaged workforce. The Company's human resources group provides employee recruitment, education and development, as well as compensation planning and counseling. There have been no work stoppages or labor disputes in the Company's history. As of June 31, ~~2023~~2024, approximately 42% of the Company's employees are covered by collective bargaining agreements, most of whom are employees located in the United ~~States, the United~~ Kingdom, Italy, and Brazil.

As of June 31, ~~2023~~2024, the Company had approximately 10,~~900~~200 employees. In addition to its employee workforce, the Company uses temporary labor to meet fluctuating demand in its manufacturing operations.

Diversity, Equity, Inclusion, and Belonging

At MillerKnoll, we value ~~and on a daily basis focus on~~ being better together. We believe that our unique differences contribute to our collective success. We also respect that when we come together, we find more attributes that we share in common. We are committed to diversity, equity, inclusion and belonging ("DEIB") and creating opportunities for all people. This includes but is not limited to those who come from diverse cultural and ethnic backgrounds, from locations around the globe, various gender identities, LGBTQ+, people with differing abilities, those from military backgrounds, as well as those who have long tenure with the Company or may be reentering the workforce for a variety of reasons. We are committed to ensuring we support a culture of belonging to ensure all individuals thrive, and we focus on building diverse leadership across MillerKnoll. We believe that embracing diverse perspectives contributes to an inclusive workplace and strengthens the communities where we live and work.

tenure with the Company or may be reentering the workforce for a variety of reasons. We are committed to ensuring we support a culture of belonging to ensure all individuals thrive, and we focus on building diverse leadership across MillerKnoll. We believe that embracing diverse perspectives contributes to an inclusive workplace and strengthens the communities where we live and work.

We continue to build inclusivity into our everyday practices by focusing on:

•An ongoing commitment to educate ourselves and integrate cultural competency across the organization;

•Driving a sense of belonging. We want every employee to be fully seen, heard, understood and to feel connected to MillerKnoll in meaningful ways that matter to each person;

•Recruiting, developing, retaining, and promoting inclusive and diverse talent through concerted efforts that drive better results; and

•Implementing and taking action on appropriate metrics and measures to hold ourselves accountable to our commitments.

Compensation

The Company's policy is to competitively compensate all employees for their contributions and to appropriately reward and motivate employees to deliver our business goals. We do this, in part, by closely monitoring and benchmarking compensation matters and working to ensure that our programs provide our employees with the right features to provide for their families and prepare for retirement. We provide competitive health and welfare benefits and retirement savings plans (401k). Retention of our talent is exceedingly important and drives how we design our programs.

International Operations

The Company's sales in international markets are made primarily to office/ and institutional customers ~~and~~as well as residential retail customers. The Company conducts business in the following major international markets: Europe, the Middle East, Africa, Latin America and the Asia/ Pacific region.

The Company's products currently sold in international markets are manufactured primarily by controlled subsidiaries in the United States, the United Kingdom, Italy, China, Brazil, Mexico and India. A portion of the Company's products sold internationally are also manufactured by third-party suppliers. Sales are made through wholly owned subsidiaries or branches in Canada, the United Kingdom, Italy, France, Denmark, the Netherlands, Mexico, Australia, Singapore, Japan, China (including Hong Kong), India and Brazil. The Company's products are offered in Canada, Europe, the Middle East, Africa, Latin America and the Asia/ Pacific region primarily through independent dealer and retail channels.

Additional information with respect to operations by geographic area appears in Note 2 of the Consolidated Financial Statements included in Item 8 of this report. Fluctuating exchange rates and factors beyond the control of the Company, such as tariff and foreign economic policies, may affect future results of international operations. Refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, for further discussion regarding the Company's foreign exchange risk.

Available Information

The Company's annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports are made available free of charge through the “Investors” section of the Company's website at www.millerknoll.com, as soon as practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC). The Company's filings with the SEC are also available for the public to read via the SEC's website at www.sec.gov.

Item 1A Risk Factors

The following risk factors and other information included in this report should be carefully considered. The risks and uncertainties described below are not the only ones we face; others, either unforeseen or currently deemed not material, may also have a negative impact on our Company. If any of the following occurs, our business, operating results, cash flows, and financial condition could be materially adversely affected.

Business Related Risks

We may not be successful in implementing and managing our growth strategy.

We have established a growth strategy for the business based on a changing and evolving world. Through this strategy, we are focused on taking advantage of the changing composition of the office floor plate, the greater desire for customization from our customers, new technologies, and trends towards urbanization and working from home.

While we have confidence that our strategic plan reflects opportunities that are appropriate and achievable, and that we have anticipated and will manage the associated risks, there is the possibility that the strategy may not deliver the projected results due to inadequate execution, incorrect assumptions, sub-optimal resource allocation, or changing customer requirements.

To meet our goals, we believe we will be required to continually invest in the research, design, and development of new products and services, and there is no assurance that such investments will have commercially successful results.

Certain growth opportunities may require us to invest in acquisitions, alliances, and the startup of new business ventures. These investments, if available, may not perform according to plan and may involve the assumption of business, operational, or other risks that are new to our business.

Future efforts to expand our business may impact our ability to compete for business. It may also put the availability and/or value of our capital investments within these regions at risk. These expansion efforts expose us to operating environments with complex, changing, and in some cases, inconsistently-applied legal and regulatory requirements. Developing knowledge and understanding of these requirements poses a significant challenge, and failure to remain compliant with them could limit our ability to continue doing business in these locations.

Pursuing our strategic plan in new and adjacent markets, as well as within developing economies, will require us to find effective new channels of distribution. There is no assurance that we can identify or otherwise develop these channels of distribution.

In connection with the July 2021 acquisition of Knoll, we incurred significant additional indebtedness, which has increased our interest expense and could adversely affect us, including by decreasing our business flexibility.

The consolidated long-term debt of MillerKnoll as of June 31, ~~2023~~2024 was $1.3729 billion. As a result of our acquisition of Knoll, we substantially increased our indebtedness, which has increased our interest expense and could have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions. We have also incurred various costs and expenses associated with such indebtedness. The amount of cash required to pay interest on our increased indebtedness levels and thus the demands on our cash resources are greater than the amount of cash flows previously required to service our indebtedness. The increased levels of indebtedness will also reduce funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes and may create competitive disadvantages for MillerKnoll relative to other companies with lower debt levels. If we do not achieve the expected benefits and cost savings from the acquisition, or if the financial performance of the combined company does not meet current expectations, then our ability to service our indebtedness may be adversely impacted.

The indebtedness incurred in connection with the acquisition of Knoll contains various covenants that impose restrictions on us that may affect our ability to operate our business. These include both affirmative and negative covenants that, subject to certain significant exceptions, restrict the ability of us and certain of our subsidiaries to, among other things, incur liens on our property, incur additional indebtedness, enter into sale and lease-back transactions, make loans, advances, or other investments, make non-ordinary course asset sales, declare or pay dividends, engage in share repurchases or make other distributions with respect to equity interests, and/or merge or consolidate with any other person or sell or convey certain assets to any one person. In addition, the definitive documentation governing such indebtedness contains a financial maintenance covenant that requires us to maintain a certain leverage ratio at the end of each fiscal quarter. Our ability to comply with these provisions may be affected by events beyond our control. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations under such indebtedness.

In addition, we may be required to raise substantial additional financing to fund working capital, capital expenditures, acquisitions, or other general corporate requirements. Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. There is no assurance we will be able to obtain such additional financing on terms acceptable to us or at all.

We have incurred and may continue to incur significant costs in connection with the integration of Knoll, which may be in excess of those we anticipate.

We have incurred and expect to continue to incur a number of non-recurring fees and costs associated with combining the operations of Herman Miller and Knoll and achieving desired synergies. These costs and expenses include those related to formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

Macroeconomic and Workplace Trends Related Risks

Adverse economic and industry conditions have had a negative impact on our business, results of operations and financial condition.

Customer demand within the contract furniture and retail furnishings industries is affected by various macroeconomic factors with general corporate profitability, service sector employment levels, new office construction rates, and existing office vacancy rates being among the most influential factors. ~~Declines~~Continued declines in these measures over recent years have had an adverse effect on overall furniture demand. Additionally, factors and changes specific to our industry, such as developments in technology, governmental standards and regulations, and health and safety issues, can influence demand.

The markets in which we operate are highly competitive and we may not be successful in winning new business.

We are one of several companies competing for new business within the furniture industry. Many of our competitors offer similar categories of products, including office seating, systems and freestanding furniture, casegoods, storage products, as well as residential, education and healthcare furniture solutions. Although we believe that our innovative product design, functionality, quality, depth of knowledge, and strong network of distribution partners differentiate us in the marketplace, increased market pricing pressure and other factors could make it difficult for us to win new business with certain customers and within certain market segments at acceptable profit margins.

The retail furnishings market is highly competitive. We compete with national and regional furniture retailers, mail order catalogs and online retailers focused on home furnishings. We compete with these and other retailers for customers, suitable retail locations, vendors, qualified employees and management personnel. Some of our competitors have significantly greater financial, marketing and other resources than we possess. This may result in these competitors being quicker at important metrics such as adapting to changes, devoting greater resources to the marketing and sale of their products, generating greater national brand recognition, or adopting more aggressive pricing and promotional policies, including free shipping offers. In addition, increased catalog mailings and/or digital marketing campaigns by our competitors may adversely affect response rates to our own marketing efforts. As a result, increased competition may adversely affect our future financial performance.

Our business presence outside the United States exposes us to certain risks that could negatively affect our results of operations and financial condition.

We have significant manufacturing and sales operations in the United Kingdom, which represents our largest single marketplace outside the United States. Concerns exist relating to potential tariffs and customs regulations and the potential for short term logistics disruption as any such changes are implemented. This will impact both our suppliers and customers, including distributors, and could result in product delays and inventory issues. Further uncertainty in the marketplace also brings risk to accounts receivable and could result in delays in collection and greater bad debt expense. There also remains a risk for the value of the British Pound, Danish Krone, and/or the Euro to further deteriorate, reducing the purchasing power of customers in these regions and potentially undermining the financial health of the Company's suppliers and customers in other parts of the world.

We also have manufacturing operations in China, India, Italy, Canada, Mexico and Brazil. Additionally, our products are sold internationally through controlled subsidiaries or branches in Canada, Denmark, Italy, Korea, Mexico, Australia, China (including Hong Kong), India, Brazil, and other European countries. The Company's products are offered in Canada, Europe, the Middle East, Africa, Latin America and the Asia/Pacific region primarily through dealers and retail channels.

Doing business internationally exposes us to certain risks, many of which are beyond our control and could potentially impact our ability to design, develop, manufacture, or sell products in certain countries. These factors include, without limitation, political, social, and economic conditions; global trade conflicts and trade policies; legal and regulatory requirements; labor and employment practices; cultural practices and norms; natural disasters; security and health concerns; protection of intellectual property; and changes in foreign currency exchange rates.

In some countries, the currencies in which we import and export products can differ. Fluctuations in the rate of exchange between these currencies could negatively impact our business and our financial performance. Additionally, tariff and import regulations, international tax policies and rates, and changes in U.S. and international monetary policies may have an adverse impact on results of operations and financial condition.

In connection with the ongoing war between Russia and Ukraine, the U.S. government has imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in Russia. MillerKnoll is not fulfilling any existing orders or accepting new orders from Russia or Belarus at this time. As a safety measure, we have also stopped taking new orders and fulfilling orders in Ukraine. This region represents a small portion of our International Contract & Specialty business, and we do not rely on any material goods from suppliers in these regions. While we do not have manufacturing facilities or offices in the region, we have historically sold products to two dealers in Russia and two in Belarus. None of the revenue recognized in fiscal year 2024 and 2023 was from dealers located in countries under sanction.

regulations, international tax policies and rates, and changes in U.S. and international monetary policies may have an adverse impact on results of operations and financial condition.

In connection with the ongoing war between Russia and Ukraine, the U.S. government has imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in Russia. MillerKnoll is not fulfilling any existing orders or accepting new orders from Russia or Belarus at this time. As a safety measure, we have also stopped taking new orders and fulfilling orders in Ukraine. This region represents a small portion of our International Contract and Specialty business, and we do not rely on any material goods from suppliers in these regions. While we do not have manufacturing facilities or offices in the region, we have historically sold products to two dealers in Ukraine, two in Russia, and two in Belarus. Fiscal year 2023 and 2022 annualized revenues from these countries were approximately $0.2 million and $6.4 million, respectively. None of the revenue recognized in fiscal year 2023 was from dealers located in countries under sanction.

Further escalation of geopolitical tensions could have a broader impact that expands into other markets where we do business, which could adversely affect our business and/or our supply chain, business partners or customers in the broader region. The continued conflict in that region, as well as the current and additional international sanctions against Russia, are likely to further increase the cost of various supplies, particularly for petroleum based products. The impact from this conflict, as well as the international sanctions, cannot be predicted or anticipated with any reasonable degree of certainty, including the impact on the Company.

A sustained downturn in the economy could adversely impact our access to capital.

The disruptions in the global economic and financial markets during 2007 to 2009 adversely impacted the broader financial and credit markets, at times reducing the availability of debt and equity capital for the market as a whole. Conditions such as these could re-emerge in the future. Accordingly, our ability to access the capital markets could be restricted at a time when we would like, or need, to access those markets, which could have an adverse impact on our flexibility to react to changing economic and business conditions. The resulting lack of available credit, increased volatility in the financial markets and reduced business activity could materially and adversely affect our business, financial condition, results of operations, our ability to take advantage of market opportunities and our ability to obtain and manage our liquidity. In addition, the cost of debt financing and the proceeds of equity financing may be materially and adversely impacted by these market conditions. The extent of any impact would depend on several factors, including our operating cash flows, the duration of tight credit conditions and volatile equity markets, our credit capacity, the cost of financing, and other general economic and business conditions. Our credit agreements contain performance covenants, such as a limit on the ratio of debt to earnings before interest, taxes, depreciation and amortization, and limits on subsidiary debt and incurrence of liens. Although we believe none of these covenants is currently restrictive to our operations, our ability to meet the financial covenants can be affected by events beyond our control.

Recent events affecting the financial services industry could have an adverse impact on the Company's business operations, financial condition, and results of operations.

The 2023 closures of certain banks have created bank-specific and broader financial institution liquidity risk and concerns. Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access working capital needs, and create additional market and economic uncertainty.

Although the Company does not have any deposits with any of the banks that have been placed into receivership to date, some of our customers may have deposits with them, which may expose us to potential risks that could impact our financial position and operations. This could include an adverse impact on the ability of our customers to pay amounts they owe to the Company. In addition, if any of our vendors have relationships with any of the banks that have been closed, it could negatively impact their ability to deliver goods and services to the Company.

More generally, these events have resulted in market disruption and volatility and could lead to greater instability in the credit and financial markets and a deterioration in confidence in economic conditions. Our operations may be adversely affected by any such economic downturn, liquidity shortages, volatile business environments, or unpredictable market conditions. These events could also make any necessary debt or equity financing more difficult and/or costly.

The future effect of these events on the financial services industry and broader economy are unknown and difficult to predict but could include failures of other financial institutions to which we or our customers, vendors, or other counterparties face direct or more significant exposure. Any such developments could adversely impact our results of operation and financial position. There may be other risks we have not yet identified. We are working to identify any potential impact of these events on our business in order to minimize any disruptions to our operations. However, we cannot guarantee we will be able to avoid any negative consequences relating to these recent developments or any future related developments.

Manufacturing, Supply Chain and Distribution Related Risks

Tariffs imposed by the U.S. government could have a material adverse effect on our results of operations.

The imposition of tariffs by the U.S. government on various products imported from certain countries, as well as countering tariffs on the export of U.S. goods, has had, and will likely continue to have, an adverse impact on our business, including as a result of increased costs for certain of our raw materials and increasing the costs for certain products that we export to other countries. Accordingly, these tariffs and the possibility of broader trade conflicts stemming from the tariffs could negatively impact our business in the future. The tariffs on imports, most notably imports from China, have impacted the cost of steel, a key commodity that we consume in producing products. Given the significance of steel costs to our direct materials costs, we closely monitor trade tensions between the U.S. and China. The potential impact to our direct material costs due to tariffs on Chinese imports is somewhat limited, however, as purchases of direct materials (mainly component parts and products manufactured by third parties) from China represented an estimated 32% of our consolidated cost of sales for fiscal ~~2023~~2024. Going forward, continued or increased tariffs could negatively impact our gross margin and operating performance. These factors also have the potential to significantly impact global trade and economic conditions in many of the regions where we do business.

Disruptions in the supply of raw and component materials could adversely affect our manufacturing and assembly operations.

We rely on outside suppliers to provide on-time shipments of the various raw materials and component parts used in our manufacturing and assembly processes. The timeliness of these deliveries is critical to our ability to meet customer demand. Disruptions in this flow of delivery may have a negative impact on our business, results of operations, and financial condition.

In fiscal year 2022, the price of steel was impacted by shortages and disruptions in the steel industry as a result of the COVID-19 pandemic. These disruptions have not had a significant impact on our ability to manufacture and supply products to our customers, but they have negatively impacted the cost of procuring such materials. In the short-term, significant increases in raw material, commodity and other input costs can be difficult to offset with price increases because of existing contractual commitments with our customers. As a result, our gross margins can be adversely affected in the short-term by significant increases in these costs. If we are not successful in passing along higher commodity and other input costs to our customers over the long-term because of competitive pressures, our profitability could be negatively impacted.

Increases in the market prices of manufacturing materials may negatively affect our profitability.

The costs of certain manufacturing materials used in our operations are sensitive to shifts in commodity market prices, including the impact of the U.S. and retaliatory tariffs. In particular, the costs of steel, plastic, aluminum components, and particleboard are sensitive to the market prices of commodities such as raw steel, aluminum, crude oil, lumber, and resins. Increases in the market prices of these commodities due to the recent ban on Russian oil imports as a result of the current war between Russia and Ukraine may have an adverse impact on our profitability if we are unable to offset them with strategic sourcing, continuous improvement initiatives or increased prices to our customers.

Disruptions within our dealer network could adversely affect our business.

Our ability to manage existing relationships within our network of independent dealers is crucial to our ongoing success. Although the loss of any single dealer would not have a material adverse effect on the overall business, our business within a given market could be negatively impacted by disruptions in our dealer network caused by the termination of commercial working relationships, ownership transitions, or dealer financial difficulties.

If dealers go out of business or restructure, we may suffer losses because they may not be able to pay for products already delivered to them. Also, dealers may experience financial difficulties, creating the need for outside financial support, which may not be easily obtained. The company has, on occasion, agreed to provide direct financial assistance through term loans, lines of credit, and/or loan guarantees to certain dealers. Those activities increase our financial exposure. 9

If dealers go out of business or restructure, we may suffer losses because they may not be able to pay for products already delivered to them. Also, dealers may experience financial difficulties, creating the need for outside financial support, which may not be easily obtained. The Company has, on occasion, agreed to provide direct financial assistance through term loans, lines of credit, and/or loan guarantees to certain dealers. Those activities increase our financial exposure.

A continued shortage of qualified labor could negatively affect our business and materially reduce earnings.

The future success of our operations depends on our ability, and the ability of third parties on which we rely, to identify, recruit, develop and retain qualified and talented individuals in order to supply and deliver our products. Any shortage of qualified labor could have a negative impact on our business. Employee recruitment, development and retention efforts that we or such third parties undertake may not be successful, which could result in a shortage of qualified individuals in future periods. Any such shortage could decrease our ability to effectively produce and meet customer demand. Such a shortage would also likely lead to higher wages for employees (or higher costs to purchase the services of such third parties) and a corresponding reduction in our results of operations. In the current operating environment, we are experiencing a shortage of qualified labor in certain geographies, particularly with plant production workers, resulting in increased costs from certain temporary wage actions, such as hiring and referral bonus programs. A continuation of such shortages for a prolonged period of time could have a material adverse effect on our operating results.

Financial Related Risks

We are subject to risks associated with self-insurance related to health benefits.

We are self-insured for our health benefits and maintain per employee stop loss coverage; however, we retain the insurable risk at an aggregate level. Therefore unforeseen or catastrophic losses in excess of our insured limits could have a material adverse effect on the Company’s financial condition and operating results. See Note 1 of the Consolidated Financial Statements for information regarding the Company’s retention level.

Goodwill and indefinite-lived intangible asset impairment charges may adversely affect our operating results.

We have a substantial amount of goodwill and indefinite-lived intangible assets, primarily trademarks, on our balance sheet. We test the goodwill and intangible assets for impairment both on an annual basis and when events occur or circumstances change that indicate that the fair value of the reporting unit or intangible asset may be below its carrying amount. Fair value determinations require considerable judgment and are sensitive to inherent uncertainties and changes in estimates and assumptions regarding actual and forecasted revenue growth rates, operating margins, discount rates, and ~~discount~~royalty rates. Declines in market conditions, a trend of weaker than anticipated financial performance for our reporting units, declines in projected revenue for our trademarks, a decline in our share price for a sustained period of time, an increase in the market-based weighted average cost of capital, or a decrease in royalty rates, among other factors, are indicators that the carrying value of our goodwill or indefinite-life intangible assets may not be recoverable. We may be required to record a goodwill or intangible asset impairment charge that, if incurred, could have a material adverse effect on our financial ~~statements~~results.

Impairment of long-lived assets may adversely affect our operating results.

Our long-lived asset groups are subject to an impairment assessment when certain triggering events or circumstances indicate that their carrying value may be impaired. If the carrying value exceeds our estimate of future undiscounted cash flows of the operations related to the asset group, an impairment is recorded for the difference between the carrying amount and the fair value of the asset group. The results of these tests for potential impairment may be adversely affected by unfavorable market conditions, our financial performance trends, or an increase in interest rates, among other factors. If as a result of the impairment test we determine that the fair value of any of our long-lived asset groups is less than its carrying amount, we may incur an impairment charge that could have a material adverse effect on our financial ~~statements~~results.

Costs related to product defects could adversely affect our profitability.

We incur various expenses related to product defects, including product warranty costs, product recall and retrofit costs, and product liability costs. These expenses relative to product sales vary and could increase. We maintain reserves for product defect-related costs based on estimates and our knowledge of circumstances that indicate the need for such reserves. We cannot, however, be certain that these reserves will be adequate to cover actual product defect-related claims in the future. Any significant increase in the rate of our product defect expenses could have a material adverse effect on operations.

General Risks

We are subject to risks and costs associated with protecting the integrity and security of our systems and confidential information.

We collect certain customer-specific data, including credit card information, in connection with orders placed through our eCommerce websites, direct-mail catalog marketing program, and retail studios. For these sales channels to function and develop successfully, we and other parties involved in processing customer transactions must be able to transmit confidential information, including credit card information and other personal information regarding our customers, securely over public and private networks. Third parties may have or develop the technology or knowledge to breach, disable, disrupt or interfere with our systems or processes or those of our vendors. While we believe we take reasonable steps to protect the security and confidentiality of the information we collect, we cannot guarantee that our security measures will effectively prevent others from obtaining unauthorized access to our information and our customers’ information. The techniques used to obtain unauthorized access to systems change frequently and are not often recognized until after they have been launched.

with our systems or processes or those of our vendors. While we believe we take reasonable steps to protect the security and confidentiality of the information we collect, we cannot guarantee that our security measures will effectively prevent others from obtaining unauthorized access to our information and our customers’ information. The techniques used to obtain unauthorized access to systems change frequently and are not often recognized until after they have been launched.

Any person who circumvents our security measures could destroy or steal valuable information or disrupt our operations. Any security breach could cause consumers to lose confidence in the security of our information systems, including our eCommerce websites or retail studios and choose not to purchase from us. Any security breach could also expose us to risks of data loss, litigation, regulatory investigations, and other significant liabilities. Such a breach could also seriously disrupt, slow or hinder our operations and harm our reputation and customer relationships, any of which could damage our business.

A security breach includes a third party wrongfully gaining unauthorized access to our systems for the purpose of misappropriating assets or sensitive information, loading corrupting data, or causing operational disruption. These actions may lead to a significant disruption of the Company’s IT systems and/or cause the loss of business and business information resulting in an adverse business impact, including: (1) an adverse impact on future financial results due to theft, destruction, loss misappropriation, or release of confidential data or intellectual property; (2) operational or business delays resulting from the disruption of IT systems, and subsequent clean-up and mitigation activities; and (3) negative publicity resulting in reputation or brand damage with customers, partners or industry peers.

The United States federal and state governments are increasingly enacting laws and regulations to protect consumers against identity theft. Also, as our business expands globally, we are subject to data privacy and other similar laws in various foreign jurisdictions. If we are the target of a cybersecurity attack resulting in unauthorized disclosure of our customer data, we may be required to undertake costly notification procedures. Compliance with these laws will likely increase the costs of doing business. If we fail to implement appropriate safeguards or to detect and provide prompt notice of unauthorized access as required by some of these laws, we could be subject to potential fines, claims for damages and other remedies, which could harm our business.

Due to the political uncertainty and military actions involving Russia, Ukraine, and surrounding regions, we and the third parties upon which we rely may be vulnerable to a currently heightened risk of information technology breaches, computer malware, or other cyber-attacks, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products.

We are unable to control ~~many of~~ the factors affecting consumer spending. Declines in consumer spending on furnishings could reduce demand for our products.

The operations of our Global Retail segment are sensitive to a number of factors that influence consumer spending, including general economic conditions, consumer disposable income, unemployment, inclement weather, availability of consumer credit, consumer debt levels, conditions in the housing market, interest rates, sales tax rates and rate increases, inflation, and consumer confidence in future economic conditions. Adverse changes in these factors have reduced, and in the future may further reduce consumer demand for our products, resulting in reduced sales and profitability.

A number of factors that affect our ability to successfully implement our retail studio strategy, including opening new locations and closing existing studios, are beyond our control. These factors may harm our ability to increase the sales and profitability of our retail operations.

Approximately 2841% of the sales within our Global Retail segment are transacted within our retail stores. Additionally, we believe our retail stores have a direct influence on the volume of business transacted through other channels, including our consumer eCommerce and direct-mail catalog platforms, as many customers utilize these physical spaces to view and experience products prior to placing an order online or through the catalog call center. Our ability to open additional stores or close existing stores successfully will depend upon a number of factors beyond our control, including, without limitation:

•general economic conditions;

•identification and availability of suitable locations;

•success in negotiating new leases and amending or terminating existing leases on acceptable terms;

•success of other retailers in and around our retail locations;

•ability to secure required governmental permits and approvals;

•hiring and training skilled studio operating personnel; and

•landlord financial stability.

We may incur significant increased costs and become subject to additional potential liabilities under environmental and other laws and regulations aimed at combating climate change.

WeIncreased expect to incur significant costs as we work to implement the 2030 sustainability goals we announced in 2022, which include efforts to reduce our carbon footprint, design out waste, and source better materials. Also, increased focus by the U.S. and other governmental authorities on climate change and other environmental matters has led to enhanced regulation in these areas, which is expected to result in increased compliance costs and could subject us to additional potential liabilities. The extent of these costs and risks is difficult to predict and will depend in large part on the extent of final regulations and the ways in which those regulations are enforced. We operate and have manufacturing facilities in multiple regions across the globe, and the impact of additional regulations in this area is likely to vary by region. It is expected the costs we incur to comply with any such final regulations and implement our own sustainability goals could be material.

Government and other regulations could adversely affect our business.

Government and other regulations apply to the manufacture and sale of many of our products. Failure to comply with these regulations or failure to obtain approval of products from certifying agencies could adversely affect the sales of these products and have a material negative impact on operating results.

Item 1B Unresolved Staff Comments

None.

Item 1C Cybersecurity

We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws. To mitigate the threat to our business, we take a comprehensive approach to cybersecurity risk management. The Company’s Board of Directors as well as its Chief Technology Officer (“CTO”) and Chief Information Security Officer (“CISO”), are actively involved in the oversight of our risk management program, of which cybersecurity represents an important component. We have established policies, standards, processes, and practices for assessing, identifying, managing and mitigating material risks from cybersecurity threats.

Risk Assessment and Management

We rely on a multidisciplinary team, including our information security function, legal department, management, and third-party service providers to identify, assess, remediate and manage cybersecurity threats and risks. We identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and our risk profile using various methods including, for example, manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of the threat environment, utilizing internal and external audits, and conducting threat and vulnerability assessments.

At least annually, we review our security controls and address information security vulnerabilities, conduct security testing, and assess our external sources for their security risk (e.g., security incidents, data security, security controls, third parties, etc.). The results of the assessment are used to drive alignment and prioritization of initiatives to enhance our security posture, improve security processes, and to manage a broader enterprise-level risk program that is presented to the Board of Directors, the Audit Committee, and members of management.

The Company maintains various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material risks from cybersecurity threats against our information systems and data. These include:

•incident detection and response

•vulnerability management

•disaster recovery plans

•internal controls within our accounting and financial reporting functions

•encryption of data

•network security controls

•access controls

•physical security

•asset management

•systems monitoring

•vendor risk management program

•employee training.

Notwithstanding the approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on the Company. Refer to Item 1A for a discussion of cybersecurity risks.

Governance

Our Board of Directors is responsible for overseeing our enterprise risk management activities, and each of our Board committees assists the Board in the role of risk oversight. The full Board receives an update on the Company’s risk management process and the risk trends related to cybersecurity at least annually. The Audit Committee specifically assists the Board of Directors in its oversight of risks related to cybersecurity. The Audit Committee receives quarterly reports from management about emerging data privacy and cybersecurity developments and threats, the Company’s cybersecurity posture which includes a review of the state of the Company’s cybersecurity, and the Company’s strategy to mitigate data protection and cybersecurity risks.

Our CISO, CTO, and General Counsel have primary responsibility for assessing and managing material cybersecurity risks and are members of management’s Information Security Council (the “Security Council”), which is a governing body that drives alignment on security decisions across the Company. The Security Council meets regularly to review and make recommendations on security policies and procedures, risk mitigation strategies, incident response and management plans and stakeholder engagement.

We have an established process led by our Security Council to govern our assessment, response, and notifications internally and externally upon the occurrence of a cybersecurity incident. Depending on the nature and severity of an incident, this process provides escalation procedures to our CEO, Audit Committee, and the Board of Directors.

Item 2 Properties

The Company owns or leases facilities located throughout the United States and several foreign countries. The location, square footage and use of the most significant facilities at June 31, ~~2023~~2024 were as follows:

Owned Locations	Square Footage (in Thousands)	Use
Zeeland, Michigan	771	Manufacturing, Warehouse, Office
East Greenville, Pennsylvania	735	Manufacturing, Warehouse, Office
Spring Lake, Michigan	615	Manufacturing, Warehouse, Office
Toronto, Canada	386	Manufacturing, Warehouse, Office
North York, Canada	386	Manufacturing, Warehouse, Office
Muskegon, Michigan	367	Manufacturing, Office
Holland, Michigan	357	Warehouse
Holland, Michigan	293	Manufacturing, Office
Dongguan, China	269	Manufacturing
Foligno, Italy	260	Manufacturing, Warehouse, Office
Holland, Michigan	242	Office, Design
Sheboygan, Wisconsin	208	Manufacturing, Warehouse, Office
Melksham, United Kingdom	170	Manufacturing, Warehouse, Office
Graffignana, Italy	108	Manufacturing, Warehouse, Office
Leased Locations	Square Footage (in Thousands)	Use
Alburtis, Pennsylvania	718	Warehouse
Batavia, Ohio	618	Warehouse
Dongguan, China	~~498~~423	Manufacturing, Office
Ringsted, Denmark	274	Warehouse
West Chester, Ohio	220	Warehouse
Berlin, Germany	220	Warehouse
LeGrange Highlands, Illinois	210	Warehouse
West Chester, Ohio	220	Warehouse
Bangalore, India	217	Manufacturing, Warehouse, Office
La Grange Highlands, Illinois	210	Warehouse
Atlanta, Georgia	205	Manufacturing, Warehouse, Office
Bangalore, India	128	Manufacturing, Warehouse

The properties above are primarily used in the Company's segments as indicated below:

Segment Primarily Supported	Owned	Leased	Total
Americas Contract	8	3	11
International Contract & Specialty	4	4	8
Global Retail	—	2	2
Corporate	1	—	1

The properties above are primarily used in the Company's segments as indicated below:

As of June 3, 2023, the Company operated 75 retail stores (including 38 operating under the DWR brand, 3 under the HAY brand, 27 Herman Miller stores, 3 Muuto stores, 3 Knoll stores and a multi-brand Chicago store) that totaled approximately 641,800 square feet of selling space. The Company also operated 4 retail outlet stores. The Company maintains administrative and sales offices and showrooms in various other locations throughout North America, Europe, Asia Pacific and Latin America. The Company considers its existing facilities to be in good condition and adequate for its design, production, distribution, and selling requirements.


Segment Primarily Supported	Owned	Leased	Total
Americas Contract	8	3	11
International Contract & Specialty	3	4	7
Global Retail	—	2	2
Corporate	1	—	1

As of June 1, 2024, the Company operated 75 retail stores (including 37 operating under the DWR brand, 1 under the HAY brand, 29 Herman Miller stores, 3 Muuto stores, 4 Knoll stores and a multi-brand Chicago store) that totaled approximately 560,264 square feet of selling space. The Company also operated 4 retail outlet stores. The Company maintains administrative and sales offices and showrooms in various other locations throughout North America, Europe, Asia Pacific and Latin America.

The Company considers its existing facilities to be in good condition and adequate for its design, production, distribution, and selling requirements.

Item 3 Legal Proceedings

The Company is involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such proceedings and litigation currently pending will not materially affect the Company’s consolidated operations, cash flows ~~and~~or financial condition.

Information About Our Executive Officers

Certain information relating to executive officers of the Company as of June 31, ~~2023~~2024 is as follows:

Andrea R. OwenPresident and Chief Executive OfficerAge 58, elected as an executive officer in 2018

Jeffrey M. StutzChief Financial OfficerAge 52, elected as an executive officer in 2009

Andrea R. OwenPresident and Chief Executive OfficerAge 59, elected as an executive officer in 2018

Jeffrey M. StutzChief Financial OfficerAge 53, elected as an executive officer in 2009

Chris BaldwinGroup President, MillerKnollAge 50, elected as an executive officer in 2021

Megan LyonChief Strategy OfficerAge 43, elected as an executive officer in 2019

Chris BaldwinGroup President, MillerKnollAge 51, elected as an executive officer in 2021

Megan LyonChief Strategy and Technology OfficerAge 44, elected as an executive officer in 2019

John MichaelPresident, Americas ContractAge 61, elected as an executive officer in 2020

Debbie PropstPresident, Global RetailAge 42, elected as an executive officer in 2020

John MichaelPresident, Americas ContractAge 62, elected as an executive officer in 2020

Debbie PropstPresident, Global RetailAge 43, elected as an executive officer in 2020

Jacqueline H. RiceGeneral Counsel and Corporate SecretaryAge 51, elected as an executive officer in 2019

B. Ben WatsonChief Creative and Product OfficerAge 58, elected as an executive officer in 2010

Jacqueline H. RiceGeneral Counsel and Corporate SecretaryAge 52, elected as an executive officer in 2019

B. Ben WatsonChief Creative and Product OfficerAge 59, elected as an executive officer in 2010

Except as discussed below, each of the named officers has served the Company in ~~their~~an ~~current~~ executive position for more than five years.

Mr. Baldwin joined MillerKnoll in 2021 and serves as Group President. Prior to the Company's acquisition of Knoll in July 2021, Mr. Baldwin was Chief Operating Officer & President, Workplace at Knoll and also held leadership positions at Kohler Co.

Ms. Lyon joined MillerKnoll in 2019 and serves as Chief Strategy Officer. Prior to joining MillerKnoll, Ms. Lyon spent eleven years with The Boston Consulting Group where she was a Partner and Managing Director leading the firm’s West Coast Consumer and Retail Practice.

Mr. Michael joined MillerKnoll, Inc. in 2017 and serves as President, The Americas. Prior to joining MillerKnoll, Mr. Michael held leadership positions at Staples, Ivan Allen Workspace, and Steelcase

Ms. Propst joined MillerKnoll in 2020 and serves as President of the Company's Global Retail segment. Prior to joining MillerKnoll, Ms. Propst spent seven years at Bed Bath and Beyond where she most recently served as President and Chief Merchandising Officer of One Kings Lanes, as well as Chief Brand Officer for Bed Bath and Beyond.

Ms. Rice joined MillerKnoll in 2019 and serves as General Counsel. Prior to joining MillerKnoll, Ms. Rice served as Executive Vice President, Chief Risk & Compliance Officer at Target Corporation as well as Senior Counsel and Chief Compliance Officer at General Motors Co.

There are no family relationships between or among the above-named executive officers. There are no arrangements or understandings between any of the above-named officers pursuant to which any of them was named an officer.

Item 4 Mine Safety Disclosures

Not applicable.

PART II

Item 5 Market for the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities and Dividend Market Information

~~Share~~MillerKnoll, ~~Price~~Inc.'s common stock is traded on the Nasdaq Global Select Market System (Symbol: MLKN). As of July 19, ~~Earnings~~2024, ~~and~~there ~~Dividends~~were ~~Summary~~approximately 40,000 shareholders of record, including individual participants in security position listings, of the Company's common stock.

~~MillerKnoll,~~Dividends ~~Inc~~were declared and paid quarterly for fiscal 2024 as approved by the Board of Directors. On April 16, 2024, the Company's ~~common~~Board ~~stock~~of isDirectors ~~traded~~approved ona ~~the~~quarterly ~~Nasdaq~~cash ~~Global~~dividend ~~Select~~of ~~Market~~18.75 ~~System~~cents (~~Symbol: MLKN)~~$0.1875) Asper ofshare ~~July 17,~~that ~~2023,~~was ~~there~~paid ~~were~~on ~~approximately~~July 3615,~~000~~ 2024, to shareholders of record on June 1, ~~including~~2024. ~~individual~~While ~~participants~~it inis ~~security~~anticipated ~~position~~that ~~listings~~the Company will continue to pay quarterly cash dividends, the amount and timing of such dividends is subject to the discretion of the Board depending on the Company's ~~common~~future ~~stock~~results of operations, financial condition, capital requirements and other relevant factors.

~~Dividends~~During ~~were~~the ~~declared~~period ~~and~~covered ~~paid quarterly for fiscal 2023 as approved~~ by ~~the~~this ~~Board of Directors. On April 18~~report, ~~2023,~~ the Company's ~~Board~~did ofnot ~~Directors~~sell ~~approved~~any ashares ~~quarterly cash dividend~~ of ~~18.75~~common ~~cents~~stock ~~($0.1875) per share~~ that ~~was~~were ~~paid~~not onregistered ~~July~~under ~~15, 2023, to shareholders of record on June 3, 2023. While it is anticipated that~~ the ~~Company~~Securities ~~will~~Act ~~continue to pay quarterly cash dividends, the amount and timing~~ of ~~such dividends is subject to the discretion of the Board depending on the Company's future results of operations, financial condition, capital requirements and other relevant factors~~1933.

Issuer Purchases of Equity Securities

~~The~~On January 16, 2019, the Company ~~has~~announced ~~one~~a share repurchase plan authorized by the Board of Directors onproviding ~~January~~for ~~16, 2019, which provides~~ a share repurchase authorization of $250.0 million with no specified expiration date. ~~The~~On ~~approximate~~July ~~dollar~~16, ~~value~~2024, the Company announced that the Board of ~~shares~~Directors ~~available~~approved ~~for~~an ~~purchase~~increase ~~under~~to ~~the~~this repurchase plan atto ~~June 3~~authorize an additional $200 million to fund share repurchases, ~~2023~~in ~~was~~addition to the $~~204~~66.53 million remaining as of June 1, 2024.

The following is a summary of share repurchase activity during the fiscal quarter ended June 31, ~~2023~~2024:

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c ) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value of Shares that may yet be Purchased Under the Plans or Programs (in millions) (1)
3/5/23-4/1/23	1,560	$	20.85	1,560	$	204.6
3/3/24-3/30/24	—	$	—	—	$	103.5
4/2/23-4/29/23	—	—		—	—
3/31/24-4/27/24	837,511	25.87		837,511	81.9
4/30/23-6/3/23	5,989	$	16.15	5,989	$	204.5
4/28/24-6/1/24	591,019	$	26.41	591,019	$	66.3
Total	71,~~549~~428,530			71,~~549~~428,530

(1) Amounts are as of the end of the period indicated

~~The~~Under the repurchase program, the Company may repurchase shares from time to time ~~for~~in ~~cash~~any manner management believes to be in ~~open~~the ~~market~~best ~~transactions~~interests of the Company and its shareholders, including through privately negotiated transactions and open market purchases, ~~pursuant~~which tomay ~~accelerated~~be ~~share~~made ~~repurchase~~pursuant ~~programs~~to ora ~~otherwise~~trading plan adopted in accordance with ~~applicable~~Rule ~~federal~~10b5-1. ~~securities~~Repurchases ~~laws.~~will ~~The~~be ~~timing~~made ~~and~~at ~~amount~~management’s ofdiscretion, ~~the~~subject ~~repurchases~~to ~~will~~general bemarket ~~determined~~conditions, byalternative uses for capital, the Company'’s ~~management~~financial ~~based~~performance, onand ~~their~~other ~~evaluation~~factors. ofThe ~~market~~Company ~~conditions,~~currently ~~share~~expects ~~price~~to ~~and~~fund ~~other~~any ~~factors.~~repurchases ~~The~~of ~~share~~its ~~repurchase~~shares ~~program~~through ~~may~~existing becash ~~suspended~~on orhand ~~discontinued~~and atfuture ~~any~~cash ~~time~~flows.

~~During~~The ~~the~~repurchase ~~period~~program ~~covered~~may bybe ~~this~~suspended, ~~report~~terminated, ~~the~~or ~~Company~~modified ~~did~~at ~~not~~any ~~sell~~time and from time to time, and for any ~~shares~~reason, including market conditions, the availability of ~~common~~alternative ~~stock~~investment ~~that~~opportunities, ~~were~~liquidity, ~~not~~and ~~registered~~other ~~under~~factors deemed appropriate. These factors may also affect the ~~Securities~~timing ~~Act~~and amount of ~~1933~~share repurchases. The repurchase program does not obligate the Company to purchase any shares.

In accordance with the Inflation Reduction Act of 2022, our fiscal year 2024 share repurchases in excess of issuances are subject to a 1% excise tax. The excise tax is recognized as part of the cost basis of shares acquired in the Consolidated Statements of Stockholders' Equity for fiscal year 2024 but is excluded from amounts presented above.

Stockholder Return Performance Graph

Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on the Company's common stock with that of the cumulative total return of the Standard & Poor's 500 Stock Index and the ~~Nasdaq~~Company's ~~Composite~~Peer ~~Total~~Group ~~Return~~ for the five-year period ended June 31, ~~2023~~2024. The ~~graph~~Peer ~~assumes~~Group anconsists ~~investment~~ of ~~$100~~HNI onCorporation ~~June 2,~~and ~~2018~~Steelcase inInc. ~~the~~These ~~Company's~~companies ~~common~~also ~~stock,~~manufacture ~~the~~office ~~Standard~~furniture &and ~~Poor's~~have ~~500~~industry ~~Stock~~characteristics ~~Index~~that ~~and~~we ~~the~~believe ~~Nasdaq~~are ~~Composite~~similar ~~Total~~to ~~Return~~MillerKnoll, ~~with dividends reinvested~~Inc.

	2018		2019		2020		2021		2022		2023
MillerKnoll, Inc.	$	100	$	110	$	74	$	155	$	102	$	50
S&P 500 Index	100		101		111		154		152		157
Nasdaq Composite Total Return	100		100		128		187		166		179

The graph assumes an investment of $100 on June 1, 2019 in the Company's common stock, the Standard & Poor's 500 Stock Index and the Peer Group, with dividends reinvested.


	2019		2020		2021		2022		2023		2024
MillerKnoll, Inc.	$	100	$	67	$	140	$	92	$	45	$	89
S&P 500 Index	100		111		153		151		156		192
Peer Group	100		78		124		105		84		115

Information required by this item is also contained in Item 12 of this report.

Item 6 [Reserved]

Not applicable.

Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the issues discussed in Management's Discussion and Analysis in conjunction with the Company's Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in this Annual Report on Form 10-K. Refer also to the information provided under the heading "Forward-Looking Statements" in this Annual Report on Form 10-K.

Executive Overview

MillerKnoll's products are sold internationally through controlled subsidiaries or branches in various countries including the United Kingdom, Denmark, Italy, France, the Netherlands, Canada, Japan, Mexico, Australia, Singapore, China, Hong Kong, India, and Brazil. The Company’s products are sold in over 100 countries primarily through independent contract furniture dealers, direct customer sales, owned and independent retailers, direct-mail catalogs, and the Company’s eCommerce platforms.

The Company is globally positioned in terms of manufacturing operations. In North America, manufacturing and distribution operations are in Georgia, New York, North Carolina, Michigan, Pennsylvania, and Texas in the United States, as well as Toronto and Mexico City. In Europe, the Company's manufacturing presence is in the United Kingdom and Italy. Manufacturing operations globally also include facilities located in Brazil, China, and India. The Company manufactures products using a system of lean manufacturing techniques collectively referred to as the MillerKnoll Performance System (MKPS). For its contract furniture business, MillerKnoll strives to maintain efficiencies and cost savings by minimizing the amount of inventory on hand. Accordingly, production is order-driven with direct materials and components purchased as needed to meet demand. These factors result in a high rate of inventory turns related to our manufactured inventories.

A key element of the Company's manufacturing strategy is to limit fixed production costs by sourcing component parts from strategic suppliers. This strategy has allowed the Company to increase the variable nature of its cost structure, while retaining proprietary control over those production processes that the Company believes provide a competitive advantage. As a result of this strategy, the Company's manufacturing operations are largely assembly-based.

A key element of the Company's growth strategy is to scale the Global Retail business through the Company's Design Within Reach ("DWR"), HAY, Knoll, Muuto, and Herman Miller retail operations. The Global Retail business provides a channel to bring MillerKnoll's iconic and design-centric products to retail customers, along with other proprietary and third-party products, with a focus on modern design.

The Company is comprised of various operating segments as defined by generally accepted accounting principles in the United States (U.S. GAAP). The operating segments are determined on the basis of how the Company internally reports and evaluates financial information used to make operating decisions. The Company has identified the following segments:

•Americas Contract — Includes the operations associated with the design, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout North and South America.

•International Contract & Specialty — Includes the operations associated with the design, manufacture and sale of furniture products, directly or indirectly through an independent dealership network in Europe, the Middle East, Africa and Asia-Pacific as well as the global activities of the Specialty brands, which include Holly Hunt, Spinneybeck, Maharam, Edelman, and Knoll Textiles.

•Global Retail — Includes global operations associated with the sale of modern design furnishings and accessories to third party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, and physical retail stores.

The Company also reports a corporate category consisting primarily of unallocated corporate expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative, and acquisition-related costs.

Core Strengths

The Company relies on the following core strengths in delivering solutions to customers:

•Product Portfolio and Brand Collective - MillerKnoll is a collective of globally recognized design brands known for working with some of the most well-known and respected designers in the world. Combined, the Company represents over 100 years of design research and exploration in service of humanity. Within the industries in which the Company operates, Herman Miller and Knoll, along with Colebrook Bosson Saunders, DatesWeiser, Design Within Reach, Edelman ~~Leather~~, Geiger, HAY, Holly Hunt, ~~Maars Living Walls,~~ Maharam, Muuto, NaughtOne, and Spinneybeck|FilzFelt are acknowledged as leading brands that inspire architects and designers to create their best design solutions. This portfolio has enabled MillerKnoll to connect with new audiences, channels, geographies, and product categories. Leveraging the collective brand equity of MillerKnoll across the lines of business is an important element of the Company's business strategy.

•Design Leadership - The Company is committed to developing research-based functionality and aesthetically innovative new products and has a history of doing so, in collaboration with a global network of leading independent designers. The Company believes its skills and experience in matching problem-solving design with the workplace needs of customers provide the Company with a competitive advantage in the marketplace. An important component of the Company's business strategy is to actively pursue a program of new product research, design, and development. The Company accomplishes this through the use of an internal research and engineering staff that engages with third party design resources generally compensated on a royalty basis.

•Unique Business Model - The Company has built a multi-channel distribution capability that it considers unique. Through contract furniture dealers, direct customer sales, retail stores and studios, eCommerce, wholesalers, and independent retailers, the Company serves contract and residential customers across a range of channels and geographies. As it pertains to isits operations, the Company was among the first in the industry to embrace the concepts of lean manufacturing. MKPS provides the foundation for all the Company's manufacturing operations. The Company is committed to continuously improving both product quality and production and operational efficiency. The Company believes these concepts hold significant promise for further gains in reliability, quality, and efficiency.

•Global Scale and Reach - In addition to its global omni-channel distribution capability, the Company has a global network of designers, suppliers, manufacturing operations, and research and development centers that position the Company to serve contract and residential customers globally. The Company believes that leveraging this global scale will be an important enabler to executing its strategy.

•Extraordinary People - We believe that our employees are a critical success factor for our business. We strive to identify, hire, develop, motivate and retain the best employees. Our ability to attract, engage, and retain key employees has been and will remain critical to our success.

Channels of Distribution

The Company's products and services are offered to most of its customers under standard trade credit terms between 30 and 45 days. For all the items below, revenue is recognized when control transfers to the customer. The Company's products and services are sold through the following distribution channels:

•Independent Contract Furniture Dealers - Most of the Company's product sales are made to a global network of independently owned and operated contract furniture dealerships ~~doing business in many countries around the world~~. These dealers purchase the Company's products and distribute them to end customers. Many of these dealers also offer furniture-related services, including product installation.

•Direct Contract Sales - The Company sells products and services directly to end customers without an intermediary (e.g., sales to the U.S. federal government). In most of these instances, the Company contracts separately with a dealer or third-party installation company to provide sales-related services.

•eCommerce - The Company sells products in its portfolio of brands across the globe, through localized Herman Miller, Knoll, ~~DWR,~~ and ~~HAY~~DWR websites. These sites complement the Company’s existing methods of distribution and extend the Company's brands' reach for new and existing customers and clients.

•Wholesale –- Through the Company's Global Retail segment, certain products are sold on a wholesale basis to ~~third-party~~independent retailers located in various markets around the world.

21•Retail Locations - As of June 1, 2024, the Company operated 75 retail studios (including 37 operating under the DWR brand, 1 under the HAY brand, 29 Herman Miller stores, 3 Muuto stores, 4 Knoll stores and a multi-brand Chicago store). The business also operated 4 outlet studios.

•Retail Locations - As of June 3, 2023, the Company operated 75 retail studios (including 38 operating under the DWR brand, 3 under the HAY brand, 27 Herman Miller stores, 3 Muuto stores, 3 Knoll stores and a multi-brand Chicago store). The business also operated 4 outlet studios.

Challenges Ahead

Like all businesses, the Company is faced with a host of challenges and risks. The Company believes its core strengths and values, which provide the foundation for its strategic direction, have prepared the Company to respond to the inevitable challenges it will face in the future. While the Company is confident in its direction, it acknowledges the risks specific to our business and industry. Refer to Item 1A for discussion of certain of these risk factors and Item 7A for disclosures of market risk.

Areas of Strategic Focus

Our strategy is designed to harness the full potential of MillerKnoll while driving growth across all business segments, geographies, and customer groups and creating value for all our stakeholders. We will capitalize on global trends including hybrid and flexible work, consumers’ focus on investing in their homes, a focus on health and well-being, and an expectation of corporate social responsibility. Our strategy includes five key focus areas:

Bring MillerKnoll to Life

We are following a detailed and deliberate plan to bring the best of all our brands together, enabling us to achieve our purpose of design for the good of humankind as we remake modern for the 21st century. Our priorities include establishing and building the MillerKnoll culture; delivering on our synergy commitment of $145 million in run-rate savings by the end of year three of the Knoll acquisition; successfully executing our integration plans and initiatives; cultivating and enabling a strong global dealer network; and establishing worldwide supply chain and manufacturing capabilities to effectively serve our customers across all our channels.

Build a Customer-Centric, Digitally Enabled Business Model

Building a customer-centric and digitally enabled business model is foundational to bringing MillerKnoll to life and encompasses both our internal technology foundation and our digital go-to-market capabilities. Our goals include integrating our systems and processes, shifting to a simpler systems architecture, serving our customers around the world through global eCommerce capabilities, harnessing data to enable our teams to make effective and timely decisions, and accelerating global automation and manufacturing 4.0 initiatives to improve the employee experience and increase accuracy, quality, and performance. Our launch of the combined North America MillerKnoll dealer network at the start of fiscal year 2023 expanded access to our proprietary end-to-end digital solution that makes it easier for our dealers to respond to customer requests faster with differentiated solutions.

Accelerate Profitable Growth

We believe there is opportunity for meaningful long-term growth in each of our business segments and MillerKnoll is uniquely positioned to capitalize on these opportunities given the breadth of our Contract and Global Retail businesses and product portfolios, global reach, and omni-channel distribution and fulfillment capabilities. To capitalize on the opportunity ahead, we will seek to lead the industry in product innovation and design excellence; fortify the flagship Knoll and Herman Miller brands while nurturing and growing each of the brands within MillerKnoll; position the Americas Contract business to lead; drive outsized growth in International Contract & Specialty; and continue transforming our Global Retail business.

Attract, Develop, and Retain World-Class Talent

In creating MillerKnoll, we created one of the most talented teams in the industry. We are committed to nurturing this distinct competitive advantage and will create a premiere employee experience while continuing to invest in our people so they can do their best work every day. Our priorities include enabling a seamless MillerKnoll employee experience via a global Human Resources technology platform; delivering an externally competitive and internally equitable compensation and benefits program; growing internal capabilities through development opportunities for all career levels; and investing to make MillerKnoll an employer of choice around the world.

Reinforce Our Commitment to Our People, Our Planet, and Our Communities

Our legacy of corporate social responsibility is deeply ingrained in our culture and is shared across all our brands. We will continue to reinforce our commitment to our people, planet, and communities in integrated and deliberate ways.

WeAreas ~~intend to hold ourselves accountable for forward progress against our diversity, equity, and inclusion initiatives, building on the foundation~~ of ~~the~~Strategic DEIB actions we announced in 2020; our 2030 sustainability goals, which we introduced in April 2022; being a force for good in our communities worldwide; and elevating our Better World reporting by developing common metrics and regularly sharing our progress internally and externally.Focus

~~The~~Our ~~Company~~strategy ~~believes~~is ~~its~~designed ~~strategy~~to ~~continues~~harness tothe ~~respond~~full ~~well~~potential toof ~~current~~MillerKnoll while driving growth across all business segments, geographies, and ~~future~~customer ~~realities~~groups inand ~~its~~creating ~~markets.~~value ~~The~~for ~~Company's~~all ~~strategic~~our ~~priorities~~stakeholders. ~~are~~We ~~aimed~~will atcapitalize ~~creating~~on aglobal ~~sustainable~~trends including hybrid and ~~diverse~~flexible ~~revenue~~work, ~~model~~consumers’ ~~that~~focus ~~puts~~on ~~the~~investing ~~customer~~in attheir ~~the~~homes, ~~center~~a offocus ~~everything~~on wehealth doand well-being, and ~~leverages~~an ~~enabling~~expectation ~~digital~~of ~~capabilities~~corporate tosocial ~~fully~~responsibility. ~~realize~~Our ~~that~~strategy ~~vision.~~includes three key focus areas:

Drive Customer Demand and Order Growth

We are prioritizing programs to deliver world class experiences with every client interaction. We have a global, go-to-market framework for contract sellers, Design With Impact, that is organized around well-being, connection and change, and we are investing in MillerKnoll showrooms that bring our brands closer together to show the breadth of our offerings. As part of this work, we are enhancing and opening MillerKnoll showrooms in select markets including, Atlanta, Chicago, Dallas, London, Los Angeles, New York, Toronto and San Francisco. In addition, we will continue to leverage the wide reach of our dealers’ showrooms around the globe.

In retail, we are working to evolve and enhance the Design Within Reach experience. We are testing new store formats, expanding our product assortment and offering design services both in store and online to enhance the customer experience, attract new customers and grow existing customers. In addition, we continue to launch new online tools to support our trade customers making it easier for them to incorporate our products in their client projects.

Foster a Culture of Highly Engaged Associates

As MillerKnoll, we have created one of the most talented teams in the industry. We are committed to nurturing this distinct competitive advantage by fostering a culture of highly engaged associates and inspiring belief in our shared future. We empower our associates to be agile and hold our teams accountable for living our actions and delivering high performance.

Our priorities include offering a seamless MillerKnoll employee experience via a global Human Resources technology platform; delivering an externally competitive and internally equitable compensation and benefits program; growing internal capabilities through development opportunities for all career levels; and investing to make MillerKnoll an employer of choice around the world.

Deliver Value to our Associates and Shareholders

We believe there is opportunity for meaningful long-term growth in each of our business segments. MillerKnoll is uniquely positioned to capitalize on these opportunities given the breadth of our Contract and Global Retail businesses and product portfolios, global reach, and omni-channel distribution and fulfillment capabilities.

Our collective of dynamic brands includes Herman Miller, Knoll, DatesWeiser, Design Within Reach, Edelman Leather, Geiger, HAY, Holly Hunt, Knoll Textiles, Maharam, Muuto, and Spinneybeck Filzfelt. These brands are united in their commitment to our purpose, design for the good of humankind, and they offer a complementary set of design solutions. By leveraging our global operations footprint, we are able to fuel our brands and build solutions in market closer to our customers, and we are creating centers of excellence in our operations facilities to support all brands in each region.

To capitalize on the opportunity ahead, we will seek to lead the industry in product innovation, design excellence, and sustainability; fortify the flagship Knoll and Herman Miller brands while nurturing and growing each of the brands within MillerKnoll; position the Americas Contract business to lead; drive outsized growth in International Contract & Specialty; and continue transforming our Global Retail business.

Business Overview

The following is a summary of the significant events and items impacting the Company's operations for the year ended June 31, ~~2023~~2024:

•Net sales were $43,~~087~~628.14 million, representing ana ~~increase~~decrease of 311.62% when compared to the prior year. The ~~increase~~decrease in net sales was ~~driven~~ primarily driven by ~~incremental~~decreased ~~price~~sales ~~increases,~~volumes ~~the~~in ~~consolidation~~all ofsegments, ~~Knoll results from~~ the ~~date~~closure of ~~acquisition~~the ofFully ~~July~~business ~~19,~~that ~~2021,~~occurred asin ~~well~~the asprior ~~growth~~year, in the ~~International~~closure ~~Contract~~of &the ~~Specialty~~HAY ~~segments.~~eCommerce ~~Net~~channel ~~sales~~ in ~~fiscal~~North ~~year~~America, ~~2023~~as ~~also~~well ~~reflect~~as the ~~addition~~additional ~~of an extra~~ week of operations ~~(within~~in the prior fiscal ~~first~~year ~~quarter)~~ which is required periodically to re-align calendar months with our fiscal periods. These ~~increases~~decreases were offset by aincreased ~~decrease~~sales inresulting ~~volume~~from ~~within~~price ~~the~~increases, ~~Americas~~net ~~Contract~~of ~~and~~incremental ~~Global~~discounting ~~Retail~~as ~~segments~~well as favorable foreign currency translation. On an organic basis, net sales were $3,~~946~~615.4 million(*), representing ana ~~increase~~decrease of 08.41% when compared to the prior year.

•Gross margin was 3539.01% as compared to 3435.30% in the prior year. The change in gross margin was primarily driven by the realization of price and channel optimization strategies, ~~and~~the ~~benefits~~realization ~~from~~of ~~integration~~cost synergies. ~~These~~associated ~~positive~~with ~~factors~~the ~~were~~Knoll ~~partially~~acquisition, ~~offset~~and byreductions ~~increased~~in ~~commodity~~commodities, storage and handling costs, and freight, and product distribution ~~costs, and labor costs~~expenses.

•Operating expenses decreased by $555.24 million or 0.4.2% as compared to the prior year. The decrease was primarily due to alower ~~reduction in~~ variable selling expenses, ~~including certain forms of employee compensation and benefits, and~~ the continued focus on cost optimization and synergy capture., ~~These~~and ~~decreases were partially offset by $75.0 million of~~ restructuring ~~charges~~ ~~related~~actions toannounced ~~voluntary~~ and ~~involuntary~~implemented ~~reductions~~during infiscal ~~the~~year ~~Company's~~2024. ~~workforce,~~These ~~charges~~decreases ~~for~~were ~~the~~partially ~~impairment~~offset ofby ~~assets~~compensation ~~associated~~and ~~with~~benefit ~~the decision to cease operating Fully as a stand-alone brand~~costs, ~~charges~~which ~~related~~increased toapproximately ~~the impairment of the Knoll trade name, and~~ $5033.0 million ~~related~~driven toby ~~the~~changes ~~consolidation~~in ofvariable-based ~~Knoll~~compensation ~~results~~and ~~for the entire first quarter of fiscal 2023 (versus a partial quarter of consolidation in fiscal 2022)~~incentives.

•The integration of the Knoll acquisition continues to progress as planned. We made good progress implementing cost synergies ~~throughout the fiscal year~~, having achieved ~~total~~an annualized run-rate ~~savings of $131 million by the end of the fourth quarter. This has us on track to deliver against our increased goal of achieving annualized~~ cost synergies of $~~145~~160 million ~~within~~related ~~three~~to ~~years~~the integration of ~~closing~~Knoll.

•The effective tax rate was 814.8% for fiscal ~~2023~~2024 compared to negative ~~130~~8.18% for the prior year.

•Diluted earnings per share for the full year totaled $01.5511 compared to ~~a loss per share of~~ $0.3755 in the prior year. On an adjusted basis(*), diluted earnings per share totaled $12.8508 in fiscal ~~2023~~2024 compared to $1.9285 in fiscal ~~2022~~2023.

•The Company declared cash dividends of $0.75 per share in both fiscal ~~2023~~2024 and fiscal ~~2022~~2023.

(*) Non-GAAP measurements; see accompanying reconciliations and explanations.

The following summary includes the Company's view on the economic environment in which it operates:

•The current macroeconomic environment in North America — which ~~includes~~reflects higher interest rates, ~~complications~~tepid ~~from~~housing-related ademand ~~regional~~trends, ~~banking crisis~~ and relatively low CEO and consumer confidence levels — continues to pose challenges for the industry. These factors are expected to persist in the near term, posing difficulties particularly for the luxury housing market and discretionary spending on goods. However, ~~when~~within itthe ~~comes~~contract tofurniture industry, the ~~overall~~business ~~dynamics~~is ofbeginning ~~returning~~ to ~~the~~see ~~office,~~improving ~~the~~demand ~~Company~~indicators ~~maintains~~such anas ~~optimistic~~increased ~~outlook~~contract ~~based~~activations onand ~~the~~increases ~~project~~in ~~funnel~~the number and ~~latest~~size ~~trends~~of ~~which~~new ~~suggest~~project ~~more~~opportunities ~~structured~~entering ~~return-to-office~~our ~~practices~~sales ~~in the near-term~~funnel.

•The Company's financial performance is sensitive to changes in certain input costs, including steel and steel component parts. Ongoing cost reduction initiatives and price increase actions have been implemented toand ~~help~~have ~~offset~~been ~~these~~effective ~~cost~~in ~~pressures,~~offsetting ~~and the benefit from~~ these ~~initiatives~~cost ~~is expected to increase over time~~pressures. Additionally, ~~the~~we ~~substantial~~began ~~inflationary~~to ~~pressures~~benefit ~~for~~from ~~certain~~relative ~~key~~decreases ~~input~~in ~~costs,~~steel ~~including goods~~ and ~~services~~other ~~tied~~key toinput ~~energy~~costs ~~prices,~~as ~~are~~fiscal ~~beginning~~2024 ~~to ease~~progressed.

•The Americas Contract segment reported a net sales ~~increase~~decrease of 510.0% and an organic sales ~~increase~~decrease of 08.3%(*) year-over-year. Operating margin increased ~~610~~50 basis points year-over year and ~~620~~100 basis points on an adjusted basis.(*). The increase was primarily driven by ~~pricing~~the ~~optimization~~combination of gross margin expansion and ~~benefits~~well ~~from~~managed ~~synergies~~operating expenses.

•The International Contract ~~and~~& Specialty segment reported a net sales ~~increase~~decrease of 98.64% and an organic sales ~~increase~~decrease of 7.02%(*) year-over-year. Operating margin ~~increased~~decreased ~~220~~130 basis points year-over-year and 5030 basis points on an adjusted basis.(*). The ~~increase~~decrease was primarily driven by ~~pricing~~the ~~optimization~~loss ~~strategies~~of leverage on lower demand and ~~product~~production ~~mix~~levels in the European contract channel and within our Specialty businesses.

•The Global Retail segment reported a net sales decrease of 16.4% and an organic sales decrease of 8.6%(*) year-over-year. Operating margin increased 640 basis points year-over year and 210 basis points on an adjusted basis(*). The increase was primarily driven by pricing actions as well as improvements in inventory management and increased shipping revenues.

~~•Global~~The ~~Retail~~remaining ~~reported~~sections aof ~~net~~Item ~~sales~~7 ~~decrease~~include ofadditional ~~4.1%~~analysis ~~and~~of anthe ~~organic~~fiscal ~~sales~~year ~~decrease~~ended ~~of 5.~~June 1~~%(*)~~, ~~year-over-year.~~2024, Onincluding adiscussion ~~reported~~of ~~basis,~~significant ~~operating~~variances ~~margin~~compared asto athe ~~percentage~~prior ofyear ~~sales~~period. ~~was~~A adetailed ~~loss~~review of ~~1.5%~~our in fiscal 2023 ~~and~~performance ~~earnings~~compared ofto ~~12.4%~~our in fiscal 2022. Onperformance anis ~~adjusted~~set ~~basis,~~forth ~~operating~~in ~~margin~~Part asII, aItem ~~percentage~~7 of ~~sales~~our ~~was~~Form 10-K ~~3.8%(*)~~for inthe fiscal ~~2023~~year ~~and~~ended ~~13.1%(*) in fiscal 2022. The decrease was primarily driven by a combination of lower volume~~June 3, ~~mix of product, and increased freight expenses~~2023.

The remaining sections of Item 7 include additional analysis of the fiscal year ended June 3, 2023, including discussion of significant variances compared to the prior year period. A detailed review of our fiscal 2022 performance compared to our fiscal 2021 performance is set forth in Part II, Item 7 of our Form 10-K for the fiscal year ended May 28, 2022.

(*) Non-GAAP measurements; see accompanying reconciliations and explanations.

Reconciliation of Non-GAAP Financial Measures

This presentation contains non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles (GAAP) and may be different from non-GAAP measures presented by other companies. These non-GAAP financial measures are not measurements of our financial performance under GAAP and should not be considered an alternative to the related GAAP measurement. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of non-GAAP measures should not be construed as an indication that our future results will be unaffected by unusual or infrequent items. We compensate for these limitations by providing equal prominence of our GAAP results. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included within this presentation. The Company believes these non-GAAP measures are useful for investors as they provide financial information on a more comparative basis for the periods presented.

The non-GAAP financial measures referenced within this presentation include: Adjusted Earnings per Share, Adjusted Operating Earnings (Loss), Adjusted Operating Margin, and Organic Growth (Decline).

Adjusted Earnings per Share represents reported diluted earnings per share excluding the impact from amortization of Knoll purchased intangibles, ~~acquisition and~~ integration charges, ~~debt extinguishment charges,~~ restructuring expenses, impairment charges, ~~other special charges or gains~~ and the related tax effect of these adjustments. These adjustments are described further below.

Adjusted Operating Earnings (Loss) represents reported operating earnings plus ~~acquisition and~~ integration charges, amortization of Knoll purchased intangibles, restructuring expenses, ~~impairment charges,~~ and ~~other~~impairment ~~special~~ charges ~~or gains~~. These adjustments are described further below.

Adjusted Operating Margin represents Adjusted Operating Earnings (Loss) ~~for the Company or a business segment~~ divided by ~~the related~~ net sales ~~for the Company or a business segment~~.

Organic Growth (Decline) represents the change in sales and orders, excluding currency translation effects, the impact of an extra week in fiscal 2023, the impact of the closure of the Hay eCommerce channel in North America, and the impact of ~~acquisitions~~the ~~and~~closure ~~divestitures.~~of the Fully business.

•Amortization of Knoll purchased intangibles: Includes expenses associated with the amortization of ~~inventory step-up and amortization of~~ acquisition related intangibles acquired as part of the Knoll acquisition. The revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. We exclude the impact of the amortization of Knoll purchased intangibles, ~~including the fair value adjustment to inventory,~~ as such non-cash amounts were significantly impacted by the size of the Knoll acquisition. Furthermore, we believe that this adjustment enables better comparison of our results as Amortization of Knoll Purchased Intangibles will not recur in future periods once such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. Although we exclude the Amortization of Knoll Purchased Intangibles in these non-GAAP measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.

•~~Acquisition~~Integration ~~and integration~~ charges: ~~Includes costs related directly to the~~ Knoll ~~acquisition including legal, accounting and other professional fees as well as~~ integration-related costs. ~~Integration-related costs~~ include severance, accelerated stock-based compensation expenses, asset impairment charges, and ~~other~~expenses ~~cost~~related ~~reduction~~to synergy realization efforts orand reorganization initiatives.

25•Restructuring charges: Includes costs associated with actions involving targeted workforce reductions and non-cash charges for the impairment of assets associated with the decision to close certain showrooms.

•~~Debt~~Impairment ~~extinguishment~~ charges: Includes ~~expenses~~non-cash, ~~associated~~pre-tax ~~with~~charges for the ~~extinguishment~~impairment of ~~debt~~assets asassociated ~~part~~with ~~of financing~~ the ~~Knoll~~decision ~~acquisition.~~to Wecease ~~excluded~~operating ~~these~~Fully ~~items~~as ~~from~~a ~~our non~~stand-~~GAAP~~alone ~~measures~~brand ~~because~~as ~~they~~well ~~relate~~as toimpairment aof ~~specific~~the ~~transaction~~Knoll and ~~are~~Muuto ~~not~~trade ~~reflective of our ongoing financial performance~~names.

•Gain on sale of dealer: Includes the gain recorded on the divestiture of an owned dealership.

•Restructuring charges: Includes actions involving targeted workforce reductions as well as non-impairment charges related to the closure of the Fully business.

•Impairment charges: Includes non-cash, pre-tax charges for the impairment of intangible assets, right of use assets, and other assets related to the closure of the Fully business as well as the impairment of the Knoll trade name.

•Special charges: Include certain costs arising as a direct result of COVID-19 pandemic.

•Tax related items: We excluded the income tax benefit/provision effect of the tax related items from our non-GAAP measures because they are not associated with the tax expense on our ongoing operating results.

Tables below summarize select financial information, for the periods indicated, related to each of the Company’s reportable segments. The Americas Contract segment includes the operations associated with the design, manufacture and sale of furniture products directly or indirectly through an independent dealership network for office, healthcare, and educational environments throughout North and South America. The International Contract & Specialty segment includes the operations associated with the design, manufacture and sale of furniture products, indirectly or directly through an independent dealership network in Europe, the Middle East, Africa and Asia-Pacific as well as the global activities of the Specialty brands, which include Holly Hunt, Spinneybeck, Maharam, Edelman, and Knoll Textiles. The Global Retail segment includes global operations associated with the sale of modern design furnishings and accessories to third party retailers, as well as direct to consumer sales through eCommerce, direct-mail catalogs, and physical retail stores. Corporate costs represent unallocated expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative and acquisition-related costs.

The following table reconciles Operating Earnings (Loss) to Adjusted Operating Earnings (Loss) by Segment for the years ended as indicated below (in millions):

	Three Months Ended								Twelve Months Ended
	June 3, 2023				May 28, 2022				June 3, 2023				May 28, 2022
Americas
Net sales	$	474.4	100.0	%	$	539.2	100.0	%	$	2,026.1	100.0	%	$	1,929.1	100.0	%
Gross margin	158.7		33.5	%	137.6		25.5	%	611.2		30.2	%	493.1		25.6	%
Total operating expenses	137.3		28.9	%	131.6		24.4	%	511.6		25.3	%	517.1		26.8	%
Operating earnings (loss)	$	21.4	4.5	%	$	6.0	1.1	%	$	99.6	4.9	%	$	(24.0)	(1.2)	%
Adjustments
Restructuring	5.2		1.1	%	—		—	%	22.8		1.1	%	—		—	%
Acquisition and integration charges	3.5		0.7	%	3.7		0.7	%	9.7		0.5	%	29.9		1.5	%
Amortization of purchased intangibles	3.2		0.7	%	3.1		0.6	%	12.9		0.6	%	28.7		1.5	%
Gain on Sale of Dealer	—		—	%	—		—	%	—		—	%	(2.0)		(0.1)	%
Impairment charges	14.4		3.0	%	—		—	%	14.4		0.7	%	—		—	%
Adjusted operating earnings	$	47.7	10.1	%	$	12.8	2.4	%	$	159.4	7.9	%	$	32.6	1.7	%
International & Specialty
Net sales	$	237.4	100.0	%	$	273.3	100.0	%	$	1,017.3	100.0	%	$	928.5	100.0	%
Gross margin	101.3		42.7	%	113.0		41.3	%	424.3		41.7	%	372.6		40.1	%
Total operating expenses	84.2		35.5	%	81.4		29.8	%	325.7		32.0	%	302.7		32.6	%
Operating earnings	$	17.1	7.2	%	$	31.6	11.6	%	$	98.6	9.7	%	$	69.9	7.5	%
Adjustments
Restructuring	0.6		0.3	%	—		—	%	1.3		0.1	%	—		—	%
Acquisition and integration charges	0.5		0.2	%	0.1		—	%	2.5		0.2	%	1.2		0.1	%
Amortization of purchased intangibles	2.1		0.9	%	2.3		0.8	%	8.3		0.8	%	26.9		2.9	%
Impairment charges	1.8		0.8	%	—		—	%	1.8		0.2	%	—		—	%
Adjusted operating earnings	$	22.1	9.3	%	$	34.0	12.4	%	$	112.5	11.1	%	$	98.0	10.6	%
Retail
Net sales	$	244.9	100.0	%	$	288.0	100.0	%	$	1,043.7	100.0	%	$	1,088.4	100.0	%
Gross margin	94.7		38.7	%	131.9		45.8	%	394.5		37.8	%	487.0		44.7	%
Total operating expenses	105.5		43.1	%	94.5		32.8	%	410.0		39.3	%	352.5		32.4	%
Operating (loss) earnings	$	(10.8)	(4.4)	%	$	37.4	13.0	%	$	(15.5)	(1.5)	%	$	134.5	12.4	%
Adjustments
Restructuring Charges	8.4		3.4	%	—		—	%	9.9		0.9	%	—		—	%
Acquisition and integration charges	—		—	%	—		—	%	0.2		—	%	0.3		—	%
Amortization of purchased intangibles	0.6		0.2	%	1.3		0.5	%	4.1		0.4	%	7.8		0.7	%
Impairment charges	3.5		1.4	%	—		—	%	40.7		3.9	%	—		—	%
Adjusted operating earnings	$	1.7	0.7	%	$	38.7	13.4	%	$	39.4	3.8	%	$	142.6	13.1	%
Corporate
Operating expenses	$	16.1	—	%	$	18.0	—	%	$	60.4	—	%	$	140.6	—	%
Operating (loss)	$	(16.1)	—	%	$	(18.0)	—	%	$	(60.4)	—	%	$	(140.6)	—	%
Adjustments
Acquisition and integration charges	1.3		—	%	3.7		—	%	5.6		—	%	93.1		—	%
Adjusted operating (loss)	$	(14.8)	—	%	$	(14.3)	—	%	$	(54.8)	—	%	$	(47.5)	—	%
MillerKnoll, Inc.
Net sales	$	956.7	100.0	%	$	1,100.5	100.0	%	$	4,087.1	100.0	%	$	3,946.0	100.0	%
Gross margin	354.7		37.1	%	382.5		34.8	%	1,430.0		35.0	%	1,352.7		34.3	%
Total operating expenses	343.1		35.9	%	325.5		29.6	%	1,307.7		32.0	%	1,312.9		33.3	%
Operating earnings	$	11.6	1.2	%	$	57.0	5.2	%	$	122.3	3.0	%	$	39.8	1.0	%
Adjustments
Restructuring Charges	14.2		1.5	%	—		—	%	34.0		0.8	%	—		—	%
Acquisition and integration charges	5.3		0.6	%	7.5		0.7	%	18.0		0.4	%	124.5		3.2	%
Amortization of purchased intangibles	5.9		0.6	%	6.7		0.6	%	25.3		0.6	%	63.4		1.6	%
Gain on Sale of Dealer	—		—	%	—		—	%	—		—	%	(2.0)		(0.1)	%
Impairment charges	19.7		2.1	%	—		—	%	56.9		1.4	%	—		—	%
Adjusted operating earnings	$	56.7	5.9	%	$	71.2	6.5	%	$	256.5	6.3	%	$	225.7	5.7	%


	Three Months Ended								Twelve Months Ended
	June 1, 2024				June 3, 2023				June 1, 2024				June 3, 2023
Americas Contract
Net sales	$	416.6	100.0	%	$	474.4	100.0	%	$	1,824.2	100.0	%	$	2,026.1	100.0	%
Gross margin	138.5		33.2	%	158.7		33.5	%	620.2		34.0	%	611.2		30.2	%
Total operating expenses	141.6		34.0	%	137.3		28.9	%	521.5		28.6	%	511.6		25.3	%
Operating (loss) earnings	$	(3.1)	(0.7)	%	$	21.4	4.5	%	$	98.7	5.4	%	$	99.6	4.9	%

Adjustments

Restructuring charges	18.8		4.5	%	5.2		1.1	%	24.6		1.3	%	22.8		1.1	%
Integration charges	3.3		0.8	%	3.5		0.7	%	18.6		1.0	%	9.7		0.5	%
Amortization of Knoll purchased intangibles	3.2		0.8	%	3.2		0.7	%	12.9		0.7	%	12.9		0.6	%

Impairment charges	8.1		1.9	%	14.4		3.0	%	8.1		0.4	%	14.4		0.7	%
Adjusted operating earnings	$	30.3	7.3	%	$	47.7	10.1	%	$	162.9	8.9	%	$	159.4	7.9	%

International Contract & Specialty
Net sales	$	245.0	100.0	%	$	237.4	100.0	%	$	931.8	100.0	%	$	1,017.3	100.0	%
Gross margin	109.9		44.9	%	101.3		42.7	%	409.6		44.0	%	424.3		41.7	%
Total operating expenses	85.4		34.9	%	84.2		35.5	%	331.4		35.6	%	325.7		32.0	%
Operating earnings	$	24.5	10.0	%	$	17.1	7.2	%	$	78.2	8.4	%	$	98.6	9.7	%

Adjustments

Restructuring charges	2.5		1.0	%	0.6		0.3	%	4.1		0.4	%	1.3		0.1	%
Integration charges	1.8		0.7	%	0.5		0.2	%	4.8		0.5	%	2.5		0.2	%
Amortization of Knoll purchased intangibles	2.1		0.9	%	2.1		0.9	%	8.4		0.9	%	8.3		0.8	%
Impairment charges	4.7		1.9	%	1.8		0.8	%	4.7		0.5	%	1.8		0.2	%
Adjusted operating earnings	$	35.6	14.5	%	$	20.3	8.6	%	$	100.2	10.8	%	$	112.5	11.1	%

Global Retail
Net sales	$	227.3	100.0	%	$	244.9	100.0	%	$	872.4	100.0	%	$	1,043.7	100.0	%
Gross margin	104.0		45.8	%	94.7		38.7	%	389.7		44.7	%	394.5		37.8	%
Total operating expenses	89.8		39.5	%	105.5		43.1	%	347.3		39.8	%	410.0		39.3	%
Operating earnings (loss)	$	14.2	6.2	%	$	(10.8)	(4.4)	%	$	42.4	4.9	%	$	(15.5)	(1.5)	%

Adjustments

Restructuring charges	0.8		0.4	%	8.4		3.4	%	2.1		0.2	%	9.9		0.9	%
Integration charges	—		—	%	—		—	%	—		—	%	0.2		—	%
Amortization of Knoll purchased intangibles	0.6		0.3	%	0.6		0.2	%	2.6		0.3	%	4.1		0.4	%
Impairment charges	4.0		1.8	%	3.5		1.4	%	4.0		0.5	%	40.7		10.3	%
Adjusted operating earnings	$	19.6	8.6	%	$	1.7	0.7	%	$	51.1	5.9	%	$	39.4	3.8	%

Corporate
Operating expenses	$	11.9	—	%	$	16.1	—	%	$	52.1	—	%	$	60.4	—	%
Operating (loss)	$	(11.9)	—	%	$	(16.1)	—	%	$	(52.1)	—	%	$	(60.4)	—	%

Adjustments
Integration charges	—		—	%	1.3		—	%	0.1		—	%	5.6		—	%
Adjusted operating (loss)	$	(11.9)	—	%	$	(14.8)	—	%	$	(52.0)	—	%	$	(54.8)	—	%

MillerKnoll, Inc.
Net sales	$	888.9	100.0	%	$	956.7	100.0	%	$	3,628.4	100.0	%	$	4,087.1	100.0	%
Gross margin	352.4		39.6	%	354.7		37.1	%	1,419.5		39.1	%	1,430.0		35.0	%
Total operating expenses	328.7		37.0	%	343.1		35.9	%	1,252.3		34.5	%	1,307.7		32.0	%
Operating earnings	$	23.7	2.7	%	$	11.6	1.2	%	$	167.2	4.6	%	$	122.3	3.0	%

Adjustments

Restructuring charges	22.1		2.5	%	14.2		1.5	%	30.8		0.8	%	34.0		0.8	%
Integration charges	5.1		0.6	%	5.3		0.6	%	23.5		0.6	%	18.0		0.4	%
Amortization of Knoll purchased intangibles	5.9		0.7	%	5.9		0.6	%	23.9		0.7	%	25.3		0.6	%

Impairment charges	16.8		1.9	%	19.7		2.1	%	16.8		0.5	%	56.9		1.4	%
Adjusted operating earnings	$	73.6	8.3	%	$	56.7	5.9	%	$	262.2	7.2	%	$	256.5	6.3	%

The following table reconciles net sales to organic net sales for the years ended as indicated below (in millions):

	Twelve Months Ended
	June 1, 2024
	Americas Contract			International Contract & Specialty			Global Retail			Total
Net sales, as reported	$	1,824.2		$	931.8		$	872.4		$	3,628.4
% change from PY	(10.0)		%	(8.4)		%	(16.4)		%	(11.2)		%
Adjustments
Currency translation effects (1)	(2.6)			(6.3)			(4.1)			(13.0)
Net sales, organic	$	1,821.6		$	925.5		$	868.3		$	3,615.4
% change from PY	(8.3)		%	(7.2)		%	(8.6)		%	(8.1)		%
	Twelve Months Ended
	June 3, 2023
	Americas			International & Specialty			Retail			Total
	Americas Contract			International Contract & Specialty			Global Retail			Total
Net sales, as reported	$	2,026.1		$	1,017.3		$	1,043.7		$	4,087.1
% change from PY	5.0		%	9.6		%	(4.1)		%	3.6		%
Adjustments
Acquisition	(77.2)			(55.5)			(31.1)			(163.8)
Fully and HAY eCommerce	—			—			(76.0)			(76.0)
Currency translation effects (1)	6.1			42.9			26.8			75.8
Impact of extra week in FY23	(38.7)			(19.6)			(18.2)			(76.5)
Impact of extra week in FY23	(27.4)			(11.6)			(13.7)			(52.7)
Net sales, organic	$	1,987.4		$	997.7		$	949.5		$	3,934.6
Net sales, organic	$	1,927.6		$	993.1		$	1,025.7		$	3,946.4
% change from PY	0.3		%	7.0		%	(5.1)		%	0.4		%
	Twelve Months Ended
	May 28, 2022
	Americas			International & Specialty			Retail			Total
Net sales, as reported	$	1,929.1		$	928.5		$	1,088.4		$	3,946.0
Adjustments
Divestitures	(6.7)			—			(7.9)			(14.6)
Net sales, organic	$	1,922.4		$	928.5		$	1,080.5		$	3,931.4
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period.

2827

The following tables reconcile orders as reported to organic orders for the periods ended as indicated below (in millions):

	Twelve Months Ended
	June 1, 2024
	Americas Contract			International Contract & Specialty			Global Retail			Total
Orders, as reported	$	1,824.9		$	928.1		$	868.0		$	3,621.0
% change from PY	(4.0)		%	(1.7)		%	(12.2)		%	(5.6)		%
Adjustments
Currency translation effects (1)	(7.7)			(7.4)			(5.0)			(20.1)
Orders, organic	$	1,817.2		$	920.7		$	863.0		$	3,600.9
% change from PY	(2.6)		%	(0.5)		%	(3.7)		%	(2.3)		%
	Twelve Months Ended
	June 3, 2023
	Americas			International & Specialty			Retail			Total
	Americas Contract			International Contract & Specialty			Global Retail			Total
Orders, as reported	$	1,901.3		$	944.0		$	989.0		$	3,834.3
% change from PY	(9.1)		%	(4.1)		%	(10.7)		%	(8.3)		%
Adjustments
Acquisition	(80.3)			(57.5)			(32.3)			(170.1)
Fully and HAY eCommerce	—			—			(75.8)			(75.8)
Currency translation effects (1)	3.9			39.8			25.2			68.9
Impact of extra week in FY23	(36.2)			(18.9)			(16.6)			(71.7)
Impact of extra week in FY23	(24.0)			(10.3)			(12.4)			(46.7)
Orders, organic	$	1,865.1		$	925.1		$	896.6		$	3,686.8
Orders, organic	$	1,800.9		$	916.0		$	969.5		$	3,686.4
% change from PY	(13.4)		%	(7.0)		%	(11.8)		%	(11.5)		%
	Twelve Months Ended
	May 28, 2022
	Americas			International & Specialty			Retail			Total
Orders, as reported	$	2,091.5		$	984.7		$	1,107.3		$	4,183.5
Adjustments
Divestitures	(11.4)			—			(8.5)			(19.9)
Orders, organic	$	2,080.1		$	984.7		$	1,098.8		$	4,163.6
(1) Currency translation effects represent the estimated net impact of translating current period sales and orders using the average exchange rates applicable to the comparable prior year period.

The following table reconciles EPS to Adjusted EPS for the years ended as of indicated below:

	Twelve Months Ended
	June 3, 2023		May 28, 2022
	June 1, 2024		June 3, 2023
(Loss) Earnings per Share - Diluted	$	01.5511	$	(0.~~37)~~55
Add: Amortization of purchased intangibles	0.33		0.87
Add: Amortization of Knoll purchased intangibles	0.32		0.33
Add: Acquisition and integration charges	0.24		1.71
Add: Integration charges	0.31		0.24
Add: Restructuring charges	0.4542		—0.45
Add: Impairment charges	0.7624		—0.76
Add: Special charges	—		(0.01)
Tax impact on adjustments	(0.32)		(0.48)
Add: Debt extinguishment	—		0.18
Adjusted earnings per share - diluted	$	2.08	$	1.85
Less: Gain on sale of dealer	—		(0.03)
Weighted Average Shares Outstanding (used for Calculating Adjusted Earnings per Share) – Diluted	73,954,756		76,024,368
Tax impact on adjustments	(0.48)		(0.43)
Adjusted earnings per share - diluted	$	1.85	$	1.92
Weighted Average Shares Outstanding (used for Calculating Adjusted Earnings per Share) – Diluted	76,024,368		73,160,212

2928

Financial Results

The following is a comparison of our annual results of operations and year-over-year percentage changes for the periods indicated:

(Dollars in millions)	Fiscal ~~2023~~2024		Fiscal ~~2022~~2023		% Change
Net sales	$	43,~~087~~628.14	$	34,~~946~~087.01	3(11.62)	%
Cost of sales	2,~~657~~208.19		2,~~593~~657.31		2(16.59)	%
Gross margin	1,~~430~~419.05		1,~~352~~430.70		5(0.7)	%
Operating expenses	1,~~307~~252.73		1,~~312~~307.97		(0.4.2)	%
Operating earnings	~~122~~167.32		39122.83		~~207~~36.37	%
Other expenses, net	7067.95		4870.49		46(4.58)	%
Earnings (loss) before income taxes and equity income	51.4		(8.6)		697.7	%
Earnings before income taxes and equity income	99.7		51.4		94.0	%
Income tax expense	414.57		114.15		~~(59~~226.5)7	%
Equity (loss) from nonconsolidated affiliates, net of tax	(0.84)		—(0.8)		—(50.0)	%
Net earnings (loss)	46.1		(19.7)		334.0	%
Net earnings	84.6		46.1		83.5	%
Net earnings attributable to redeemable noncontrolling interests	42.03		7.4.0		(4542.95)	%
Net earnings (loss) attributable to MillerKnoll, Inc.	$	42.1	$	(27.1)	255.4	%
Net earnings attributable to MillerKnoll, Inc.	$	82.3	$	42.1	95.5	%

The following table presents, for the periods indicated, the components of the Company's Consolidated Statements of Comprehensive Income as a percentage of Net sales:

	Fiscal 2023		Fiscal 2022
	Fiscal 2024		Fiscal 2023
Net sales	100.0	%	100.0	%
Cost of sales	6560.09	%	65.70	%
Gross margin	3539.01	%	3435.30	%
Operating expenses	3234.05	%	3332.30	%
Operating earnings	34.06	%	13.0	%
Other expenses, net	1.79	%	1.27	%
Earnings (loss) before income taxes and equity income	1.3	%	(0.2)	%
Earnings before income taxes and equity income	2.7	%	1.3	%
Income tax expense	0.14	%	0.31	%
Equity income from nonconsolidated affiliates, net of tax	—	%	—	%
Equity (loss) income from nonconsolidated affiliates, net of tax	—	%	—	%
Net earnings (loss)	1.1	%	(0.5)	%
Net earnings	2.3	%	1.1	%
Net earnings attributable to redeemable noncontrolling interests	0.1	%	0.21	%
Net earnings (loss) attributable to MillerKnoll, Inc.	1.0	%	(0.7)	%
Net earnings attributable to MillerKnoll, Inc.	2.3	%	1.0	%

3029

Net Sales

The following chart presents graphically the primary drivers of the year-over-year change in Net sales. The amounts presented in the bar graph are expressed in millions and have been rounded.

Net sales ~~increased~~decreased $~~141~~459 million or 311.62% compared to the prior year fiscal period. The following items primarily contributed to the change:

•~~Incremental~~Decreased ~~price~~sales ~~increases,~~volume ~~net~~within ofthe ~~price~~Americas ~~discounting~~Contract, ~~drove~~International anContract ~~increase~~& inSpecialty ~~net~~and ~~sales~~Global Retail segments of approximately $~~246~~262 million., $76 million and $61 million, respectively.

•~~Increase~~The ofadditional ~~$161~~week ~~million~~during ~~due to~~ the ~~Knoll~~first ~~acquisition~~quarter ~~that was completed on July 19, 2021~~ of the prior year, ~~net~~contributed ~~of a decrease in sales related~~ to ~~the~~approximately ~~divestiture~~$77 million of ~~an owned dealership in~~ the ~~prior~~Net ~~year~~sales ~~and a~~ decrease ~~related to the closure of Fully of $8 million~~.

•~~The~~Decrease ~~additional~~of ~~week~~$76 million ~~during~~related to the ~~first~~closure ~~quarter~~ of the ~~current~~Fully ~~year~~business ~~contributed~~that ~~approximately~~occurred ~~$53~~in ~~million~~the prior year and the closure of the ~~Net~~Hay ~~sales~~eCommerce ~~increase~~channel in North America. Offset in part by:

•~~Increased~~Price ~~sales~~increases, ~~volumes~~net ~~within~~of ~~the~~incremental ~~International~~discounting, ~~Contract~~which &drove ~~Specialty~~an ~~segment~~increase ~~contributed~~in toNet sales ~~growth~~of ~~in the year by~~ approximately $43 80 million. ~~The International Contract & Specialty segment's growth was driven, in part, by a strong backlog of orders in the first half of the year.~~

•Foreign currency translation ~~decreased~~increased Net sales by approximately $76 13 million.

•Decreased sales volume within the Global Retail and Americas segments also offset these increases by approximately $79 million and $199 million, respectively.

Gross Margin

Gross margin was 3539.01% for fiscal ~~2023~~2024 as compared to 3435.30% for fiscal ~~2022~~2023. The following factors summarize the major drivers of the year-over-year change in gross margin percentage:

•~~The~~Reduction ~~positive~~in ~~impact~~costs offrom ~~price~~commodities, ~~increases~~storage and handling costs, ~~net~~freight ofand ~~incremental~~product ~~discount~~distribution costs, ~~contributed~~as compared to ~~margin~~the ~~improvement~~prior year which increased gross margin by approximately ~~360~~260 basis points.

•The positive impact of ~~amortization~~price increases, net of ~~purchased~~incremental ~~intangibles~~discounting, ~~related~~contributed to ~~the Knoll acquisition recorded in the prior year that did not occur in the current period had a favorable impact on gross~~ margin ofimprovement by approximately 30140 basis points.

•~~Cost~~Charges ~~pressures~~in ~~from~~the ~~commodities,~~prior ~~storage~~year ~~and~~for ~~handling~~the ~~costs,~~impairment ~~freight,~~of ~~and~~assets ~~product~~associated ~~distribution~~with ~~costs~~the ~~decreased~~decision ~~gross~~to ~~margin~~cease byoperating ~~approximately~~Fully ~~190~~as ~~basis~~a ~~points.~~stand-alone ~~These~~brand ~~costs~~contributed ~~offset~~to ~~savings~~an ~~from~~increase ~~the~~in ~~realization~~gross margin of ~~incremental~~approximately ~~synergies~~40 ~~associated~~basis ~~with the Knoll acquisition as compared to the same period in the prior year~~points.

•~~Increased~~Benefit ~~labor~~to ~~costs~~margin asfrom ~~well~~the asrealization ~~loss~~ of ~~labor~~incremental ~~and~~synergies ~~overhead~~associated ~~leverage~~with ~~due~~the toKnoll ~~reduced~~acquisition ~~production volumes had a negative impact on margin~~ as compared to the same period in the prior year. ofThese ~~approximately~~factors 80were ~~basis~~offset ~~points.~~in part by;

•~~Unfavorable~~Loss ~~channel~~of ~~and~~leverage ~~product~~on ~~mix,~~lower assales ~~well~~volumes asand ~~charges~~unfavorable ~~related~~channel toand ~~the~~product ~~recording~~mix, ofwhich ~~obsolete~~negatively ~~inventory~~impacted ~~along~~gross ~~with~~margin ~~the~~by ~~closure~~approximately of70 ~~the~~basis ~~Fully business contributed to the remaining decrease in gross margin~~points.

3130

Operating Expenses

The following chart presents graphically the primary drivers of the year-over-year change in Operating expenses. The amounts presented in the bar graph are expressed in millions and have been rounded.

Operating expenses decreased by $5 56 million or 0.4.3% compared to the prior year fiscal period. The following factors contributed to the change:

•~~Knoll~~Variable ~~deal~~selling and ~~integration~~marketing ~~related~~ costs ~~and~~decreased ~~amortization~~by ~~expense~~approximately ~~decreased~~ $~~132~~ 34 million, ~~from~~due in part to the closure of the Fully business that occurred in the prior year ~~period~~;

•~~Compensation~~Decrease ~~and~~in ~~benefit~~asset ~~costs~~impairment ~~decreased~~charges ~~approximately~~recorded ~~$14~~in ~~million,~~the ~~driven~~current ~~primarily~~year byas acompared ~~decrease~~to inthe ~~variable-based~~prior ~~compensation,~~year ~~decreases~~contributed ina ~~discretionary~~net ~~employee~~decrease ~~benefits,~~in ~~and~~Operating ~~realization~~expenses of ~~synergies~~approximately ~~associated with the Knoll acquisition~~$24 million;

•~~Favorable~~The ~~foreign~~impact ~~currency translation~~ of ~~approximately~~an ~~$11~~extra ~~million~~week ~~primarily~~in ~~related to~~ the ~~International~~first ~~and~~quarter ~~Specialty~~of ~~segment.~~fiscal ~~These~~2023 ~~factors~~decreased ~~were~~Operating ~~offset~~expenses inby ~~part~~approximately by$10 million;

•~~Restructuring~~Product ~~charges~~development ~~related~~costs todecreased ~~voluntary~~approximately ~~and~~$3 million, ~~involuntary~~primarily ~~reductions~~ in the ~~Company's~~Americas ~~workforce,~~Contract ~~charges~~segment; ~~for the impairment of assets associated with the decision to cease operating Fully as a stand-alone brand~~ and ~~charges related to the impairment of the Knoll trade name contributed to an increase in Operating expenses of approximately $75 million;~~

•~~The~~Savings ~~consolidation~~from the realization of ~~Knoll~~incremental ~~results~~synergies ~~for~~associated with the ~~entirety~~Knoll ofacquisition ~~the~~as ~~first~~compared ~~quarter~~to ofthe ~~fiscal~~prior ~~2023,~~year ~~which~~as ~~increased~~well ~~Operating~~as reduced expenses byattributable ~~$50~~to ~~million;~~the recently implemented restructuring actions. These decreases were offset in part by:

•~~The~~Compensation ~~impact~~and ofbenefit ~~an extra week in the first quarter of fiscal 2023~~costs, which increased ~~Operating~~approximately ~~expenses~~$33 million driven by ~~approximately~~changes ~~$13~~in ~~million;~~variable-based compensation and incentives.

•Studio costs, which increased by approximately $10 million, related to the expansion of physical store locations within the Global Retail segment; and

•Warranty costs, which increased by approximately $8 million in the year driven primarily by a favorable adjustment to the general accrual in the prior year that did not re-occur in the current period and increased warranty expenses in the current year within the Americas segment.

Other Income/Expense

Net other expenses for fiscal ~~2023~~2024 were $7067.95 million compared to $4870.49 million in fiscal ~~2022~~2023. ~~Other~~This change is driven primarily by increased interest income~~/expense~~ in the ~~twelve~~current ~~months~~year ~~ended~~of ~~May~~$3.3 28million, ~~2022~~the ~~included~~impact aof ~~loss~~net onforeign ~~extinguishment~~currency oftransaction ~~debt~~gains of ~~approximately~~ $131.4 8 million ~~which~~as ~~represented~~well ~~the~~as ~~premium~~favorable onnet ~~early~~periodic ~~debt~~benefit ~~redemption~~income from our pension plans. ~~This~~These ~~was~~favorable changes were offset by increased Interest expense of $362.2 million as compared to the same period of the prior year, driven by ~~higher levels of debt and~~ increased interest rates as compared to the same period of the prior year.

Income Taxes

See Note 11 of the Consolidated Financial Statements for additional information.

33 32

Operating Segments Results

The business is comprised of various operating segments as defined by U.S. GAAP. These operating segments are determined on the basis of how the Company internally reports and evaluates financial information used to make operating decisions. The segments identified by the Company include Americas Contract, International Contract & Specialty, and Global Retail. The Company also reports a “Corporate” category consisting primarily of unallocated expenses related to general corporate functions, including, but not limited to, certain legal, executive, corporate finance, information technology, administrative and acquisition-related costs. Effective as of May 29, 2022, the start of fiscal year 2023, the Company implemented an organizational change that resulted in a change in the reportable segments.The Company has recast historical results to reflect this change. For descriptions of each segment, refer to Note 14 of the Consolidated Financial Statements.

The charts below present the relative mix of net sales and operating earnings across each of the Company's segments. This is followed by a discussion of the Company's results, by segment.

Americas Contract


(Dollars in millions)	Fiscal 2024			Fiscal 2023			Change
Net sales	$	1,824.2		$	2,026.1		$	(201.9)
Gross margin	620.2			611.2			9.0
Gross margin %	34.0		%	30.2		%	3.8		%


Operating earnings	98.7			99.6			(0.9)
Operating earnings %	5.4		%	4.9		%	0.5		%

Net sales decreased 10.0%, or 8.3%(*) on an organic basis, from the prior year due to:

•Decreased sales volume within the segment of approximately $262 million, which was driven by the impact of a challenging macro-economic environment compounded by pandemic-driven pent-up demand at the start of the prior year; and

•The impact of an additional week in the prior year, which reduced sales approximately $39 million; offset in part by

•Price increases, net of incremental discounting, of approximately $97 million; and

•Favorable foreign currency translation of approximately $3 million.

Operating earnings decreased $0.9 million, or 0.9% compared to the same period of the prior year due to:

•Increased operating expenses of $9.9 million. The following factors contributed to the change:

◦An increase in variable based compensation of approximately $19 million;

◦Increased Knoll acquisition integration costs of $9 million; and

◦Increased restructuring expenses of approximately $2 million related to a workforce reduction as well as showroom consolidations. These increases were offset in part by:

◦Decreased product development costs of $3 million as well as a decrease of $5 million due to the additional week in the prior year;

◦A decrease of $6 million in non-cash intangible impairment charges as compared to the prior year;

◦Decreased variable marketing and selling costs.

•The increase in operating expenses was offset in part by improved gross margin of $9.0 million due to the increased gross margin percentage of 380 basis points. The increase in gross margin percentage was due primarily to:

◦The impact of incremental list price increases, net of contract price discounting, that increased gross margin percentage by 370 basis points; and

◦Decreased commodity and product distribution costs that increased gross margin percentage by 200 basis points. These increases were offset in part by:

◦Unfavorable product mix which had a negative impact on margin of 170 basis points and increased labor costs as well as loss of fixed cost leverage due to reduced production volumes that decreased gross margin percentage by 20 basis points.

(*) Non-GAAP measurements; see accompanying reconciliations and explanations.

~~Americas~~International Contract ~~("Americas")~~& Specialty

(Dollars in millions)	Fiscal ~~2023~~2024			Fiscal ~~2022~~2023			Change
Net sales	$	~~2,026~~931.18		$	1,~~929~~017.13		$	97(85.05)
Gross margin	~~611~~409.26			~~493~~424.13			~~118~~(14.17)
Gross margin %	3044.20		%	2541.67		%	42.63		%
Operating earnings (loss)	99.6			(24.0)			123.6
Operating earnings	78.2			98.6			(20.4)
Operating earnings %	48.94		%	(19.2)7		%	6.(1.3)		%

Net sales ~~increased~~decreased 58.04%, or 07.32%(*) on an organic basis, ~~over~~from the prior year due to:

•~~Price~~Decline ~~increases,~~in ~~net~~sales ofvolume ~~incremental discounting,~~ of approximately $~~200~~ 76 million driven mainly by challenging macroeconomic conditions in Europe and parts of Asia-Pacific; and

•AnImpact ~~increase in sales~~ of ~~$74~~the ~~million~~extra ~~due~~week toin the ~~Knoll~~prior ~~acquisition~~year ~~that was completed on July 19~~period, ~~2021.~~which ~~The~~drove ~~increase~~a ~~represents~~decrease ~~the impact~~ of ~~consolidating~~$20 million; ~~Knoll~~offset ~~results~~in ~~for~~part ~~the entirety of the first quarter of fiscal 2023.~~by

•AnFavorable ~~increase~~foreign currency translation of approximately $27 6 million ~~related to the additional week in the first quarter~~; ~~offset in part by~~and

•~~The~~Price ~~unfavorable~~increases, ~~impact~~net of ~~foreign~~incremental ~~currency~~discounting ~~translation~~of ~~which decreased sales by approximately~~ $6 4 million~~; and~~.

~~•Decreased~~Operating ~~sales~~earnings ~~volume~~decreased ~~of approximately~~ $~~199~~20.4 million, ~~which~~or ~~was~~20.7%, ~~driven~~compared byto the ~~impact of a challenging macro-economic environment compounded by pandemic-driven pent-up demand at the start of the~~ prior year. due to:

~~Operating~~•Decreased ~~earnings~~Gross ~~increased~~margin of $~~123~~14.67 million ~~compared~~due to the ~~same~~decrease ~~period~~in sales explained above, offset in part by an increase in gross margin percentage of ~~the~~230 ~~prior~~basis ~~year~~points due primarily to: favorable product mix.

•Increased ~~gross~~Operating ~~margin~~expenses of $~~118~~5.17 million ~~due~~which ~~to the increase in net sales discussed above and an increase in gross margin percentage of 460 basis points. The increase in gross margin percentage~~ was largely due ~~primarily~~ to an:

◦~~The~~Increased ~~impact~~variable ofcompensation ~~incremental~~costs ~~list~~in ~~price~~the ~~increases,~~current ~~net~~year of ~~contract price discounting, that increased gross margin percentage by 800 basis points~~$10 million; and

◦~~Amortization~~Increased ofrestructuring, ~~purchased~~integration ~~intangibles~~and ~~related~~impairment tocharges ~~the~~of ~~Knoll~~$8 million ~~acquisition recorded~~ in the ~~prior~~current year. ~~that~~Restructuring ~~did~~charges ~~not~~were ~~occur~~related into workforce reductions and the ~~current~~increase ~~period.~~in ~~These~~impairment ~~increases~~charges ~~were~~was ~~offset~~primarily inrelated ~~part~~to bythe ~~higher~~impairment ~~commodity~~of ~~and~~the ~~labor~~Muuto ~~costs~~trade ~~that~~name ~~decreased~~in ~~gross~~the ~~margin~~current ~~percentage~~year. byThese ~~320~~increases ~~basis~~were ~~points.~~offset in part by:

◦~~Realization~~Decrease of ~~incremental~~$4 million ~~synergies~~due ~~realized~~to the additional week in ~~fiscal~~the prior year ~~2023~~as ~~associated~~well ~~with~~as ~~the~~a ~~Knoll~~decrease ~~acquisition.~~of ~~Partially~~$8 million ~~offset~~primarily ~~by;~~related to a reduction in variable selling costs.

•Decreased operating expenses of $5.5 million. The following factors contributed to the change:

◦Lower amortization and deal and integration charges of $36 million.

◦A decrease in variable based compensation and benefits of $18 million.

◦A decrease in technology program costs of approximately $10 million, Partially offset by;

◦Increased restructuring expenses of approximately $23 million related to voluntary and involuntary reductions in the Company's workforces.

◦An increase of approximately $20 million from consolidating Knoll results for the entirety of the first quarter of fiscal 2023.

◦An increase of approximately $14 million related to the impairment of the Knoll Product trade name.

◦An increase of approximately $6 million related to the additional week in the first quarter of fiscal 2023.

◦The remaining difference is due to a decrease in marketing spend and costs related to product development, incremental savings realized through synergies associated with the Knoll acquisition, offset in part by increased warranty expense in the current year.

(*) Non-GAAP measurements; see accompanying reconciliations and explanations.

International Contract and Specialty ("International & Specialty")

(Dollars in millions)	Fiscal 2023			Fiscal 2022			Change
Net sales	$	1,017.3		$	928.5		$	88.8
Gross margin	424.3			372.6			51.7
Gross margin %	41.7		%	40.1		%	1.6		%
Operating earnings	98.6			69.9			28.7
Operating earnings %	9.7		%	7.5		%	2.2		%

Net sales increased 9.6%, or 7.0%(*) on an organic basis, over the prior year due to:

•An increase in sales of $56 million due to the Knoll acquisition that was completed on July 19, 2021. The increase represents the impact of consolidating Knoll results for the entirety of the first quarter of fiscal 2023; and

•Increased sales volume of approximately $43 million; and

•Price increases, net of incremental discounting of $22 million; and

•The positive impact of the additional sales from the additional week in the first quarter of $12 million. Offset in part by;

•Unfavorable foreign currency translation, which reduced sales by approximately $43 million.

Operating earnings increased $28.7 million, or 41.1%, compared to the prior year due to:

•Increased gross margin of $51.7 million due to the increase in sales explained above as well as increased gross margin percentage of 160 basis points due primarily to the leverage of fixed costs on higher sales volume as well as from the impact of amortization of purchased intangibles related to the Knoll acquisition recorded in the prior year that did not occur in the current period; offset in part by

•Increased operating expenses of $23.0 million driven primarily from consolidating Knoll results for the entirety of the first quarter of fiscal 2023, the impact of the additional week in the current period as compared to the prior year, partially offset by the favorable impact of foreign currency translation of $7.7 million and lower amortization and acquisition related deal and integration charges as compared to the same period of the prior year.

(*) Non-GAAP measurements; see accompanying reconciliations and explanations.

Global Retail

(Dollars in millions)	Fiscal ~~2023~~2024			Fiscal ~~2022~~2023			Change
Net sales	$	~~1,043~~872.74		$	1,~~088~~043.47		$	(44171.73)
Gross margin	~~394~~389.57			~~487~~394.05			(924.58)
Gross margin %	3744.87		%	4437.78		%	(6.9)		%
Operating (loss) earnings	(15.5)			134.5			(150.0)
Operating earnings (loss)	42.4			(15.5)			57.9
Operating earnings %	(1.5)		%	12.4		%	(13.9)		%
Operating earnings (loss) %	4.9		%	(1.5)		%	6.4		%

Net sales decreased 416.14% as reported and 58.16%(*) on an organic basis, ~~over~~from the prior year due to:

•Decreased sales ~~volumes~~ of ~~approximately~~ $79 76 million ~~which~~primarily ~~were~~related ~~driven~~to ~~primarily~~the byclosure ~~changes~~of the Fully business that occurred in ~~customer~~the ~~spending~~prior ~~trends;~~year as well as the closure of the Hay eCommerce channel in North America;

•Decreased sales involumes ~~the Fully business~~ of $8approximately $61 million ~~year~~driven ~~over~~by ~~year~~a ~~due~~slowdown toin ~~changing demand patterns for Fully product which led to~~ the ~~closure~~North ofAmerican ~~Fully~~housing inmarket ~~the~~and ~~third~~a ~~quarter~~continuation of ~~fiscal~~general ~~2023;~~economic ~~and~~uncertainty;

•~~The~~Incremental ~~unfavorable~~promotional ~~impact~~discounting, net of ~~foreign~~price ~~currency translation~~increases, which decreased sales by ~~approximately~~ $27 21 million~~. Partially offset by~~; and

•AnThe ~~increase~~additional inweek ~~sales~~during ~~of $31 million due to~~ the ~~Knoll~~first ~~acquisition~~quarter ~~that~~of ~~was completed on July 19, 2021. The increase represents~~ the ~~impact~~prior ofyear ~~consolidating~~contributed ~~Knoll~~to ~~results~~approximately ~~for~~$18 million ~~the entirety~~ of the ~~first~~net ~~quarter~~sales ~~of fiscal 2023~~decrease; offset by

•~~Incremental~~Favorable ~~price~~foreign ~~increases,~~currency ~~net~~translation of ~~discounting, of~~ approximately $24 4 million~~; and~~.

~~•The~~Operating ~~positive~~earnings ~~impact~~increased of$57.9 ~~additional~~million, ~~sales~~or ~~from~~373.5% over the ~~extra~~prior ~~week~~year indue ~~fiscal 2023 of $14 million.~~ to:

~~Operating~~•An ~~earnings~~increase ~~decreased~~in ~~$150.0~~gross ~~million~~margin ~~over~~percentage of 690 basis points attributable to the favorable impact of reduced costs as compared to the prior year ~~due~~associated with product distribution and inventory handling as well as charges in the prior year for the impairment of assets associated with the decision to: cease operating Fully as a stand-alone brand. These increases were offset in part by promotional discounting, net of price increases.

•Decreased ~~gross~~Operating ~~margin~~expenses of $~~92.5~~63 million driven by:

◦~~Decrease~~Decreased inselling ~~net~~and ~~sales~~marketing ~~discussed~~costs ~~above~~including ~~as well as decreased gross margin percentage of 690 basis points attributable to~~ the ~~impact~~reduction ofin ~~impairment~~costs ~~of inventory~~ associated with ~~the~~no ~~decision~~longer ~~to cease~~ operating Fully as a stand- alone brand, which contributed an approximate decrease of $28 million;

◦~~The~~Decrease ~~unfavorable~~of ~~impact~~$21 million in expenses primarily related to charges in the prior year for the impairment of ~~higher~~assets ~~commodity~~associated ~~and~~with ~~inventory~~the ~~storage~~decision ~~costs~~to cease operating Fully as a stand-alone brand;

◦~~Unfavorable~~Decreased ~~changes~~restructuring incharges ~~product~~of ~~mix,~~approximately ~~partially~~$8 million ~~offset~~relating into ~~part~~the bydecision ~~the~~to ~~favorable~~cease ~~impact~~operating ofFully ~~pricing~~as a stand-alone brand in fiscal year 2023; and

~~•Increased~~◦Decrease of $4 million due to the additional week in the prior year, as well as a general decrease in operating expenses associated with the closure of ~~$57~~the Fully business in the prior year.5 ~~million~~These ~~driven~~decreases ~~primarily~~were offset by:

◦~~Consolidating~~Increase ~~Knoll~~of ~~results~~$3 million ~~for~~in ~~the~~variable ~~entirety~~compensation ofcosts in the ~~first~~current ~~quarter~~year. ~~of fiscal 2023;~~

◦Charges for the impairment of assets associated with the decision to cease operating Fully as a stand-alone brand;

◦The impact of the additional week in the current period as compared to the prior year; and

◦Increased costs associated with retail studio locations and digital and technology program costs. These expenses were offset in part by reduced costs associated with variable based compensation and the realization of incremental synergies in fiscal year 2023 associated with the Knoll acquisition.

Corporate

Corporate unallocated expenses totaled $60.4 million for fiscal 2023, a decrease of $80.2 million from fiscal 2022. The decrease was driven primarily by a decrease in deal and integration costs related to the Knoll acquisition of $87.5 million.

(*) Non-GAAP measurements; see accompanying reconciliations and explanations.

37Corporate

Corporate unallocated expenses totaled $52.1 million for fiscal 2024, a decrease of $8.3 million from fiscal 2023. The decrease was driven primarily by a decrease in integration costs related to the Knoll acquisition of $5.5 million.

Liquidity and Capital Resources

The table below summarizes the net change in cash and cash equivalents for the fiscal years indicated.

	Fiscal Year Ended
(In millions)	~~2023~~2024		~~2022~~2023
Cash provided by (used in):
Operating activities	$	~~162~~352.93	$	~~(11~~162.9)
Investing activities	(7686.53)		(~~1,172~~76.45)
Financing activities	(86258.8)		~~1,039~~(86.98)
Effect of exchange rate changes	(60.43)		(216.74)
Net change in cash and cash equivalents	$	(6.8)9	$	(~~166~~6.18)

Cash Flow — Operating Activities

The principal source of our operating cash flow is net earnings, meaning cash receipts from the sale of our products, net of costs to manufacture, distribute, and market our products. Net cash provided by operating activities for the twelve months ended June 31, ~~2023~~2024 totaled $~~162~~352.93 million, as compared to ~~cash used of~~ $11162.9 million in the twelve months ended ~~May~~June 283, ~~2022~~2023. The increase in cash inflow is due primarily to an increase in earnings of $6538.85 million in the current year compared to the prior year, a reduction in contributions to our pension plans, as well as a reduction in working capital. Our working capital consists primarily of receivables from customers, inventory, prepaid expenses, accounts payable, accrued compensation, and accrued other expenses. The following all affect these account balances:

•The timing of collection of our receivables;

•~~The~~Effective ~~timing~~inventory ofmanagement ofresulting ~~planned promotional events~~ in ~~the~~reduced ~~Retail~~inventory ~~segment~~levels; and

•~~Customer~~Changes ~~demand~~in ~~trends~~accruals ~~for~~related ~~in-stock~~to ~~products;~~variable compensation.

•Changes in supply chain lead times; and

•Timing of spending commitments and payments of our accounts payable, accrued expenses, accrued compensation and related benefits.

Cash Flow — Investing Activities

Cash used in investing activities for the twelve months ended June 31, ~~2023~~2024 was $7686.53 million, as compared to $~~1,172~~76.45 million in the twelve months ended ~~May~~June 283, ~~2022~~2023. The ~~decrease~~increase in cash outflow in the current year, ~~compared to the prior year,~~ was primarily due to the acquisition of Knoll, which drove a cash outflow, net of cash acquired, of $1,088.5 million in the prior year period. Capital expenditures for the current year were $83.3 million as compared to $94.7 million in the prior year. In the twelve months ended June 3, 2023, we were advanced $13.5 million of cash against the value of company owned life insurance policies. :

At•An ~~the~~increase ~~end~~in ofnotes ~~the~~receivable ~~fiscal~~received ~~2023, there were outstanding commitments for capital purchases of $44.8 million. The Company plans to fund these commitments with cash on hand and/or cash generated~~ from ~~operations.~~certain ~~The~~independently ~~Company~~owned ~~expects~~dealers ~~capital spending~~ in ~~fiscal 2024 to be between $80 million and $100 million, which will be primarily related to investments in~~ the ~~Company's~~current ~~facilities and equipment, investments to achieve costs synergies related to the Knoll acquisition, and investments associated with achieving the Company's sustainability goals.~~year;

•The advancement of $13.5 million of cash against the value of company owned life insurance policies received in the twelve months ended June 3, 2023 for which there was no activity in the current year. Offset in part by:

•Proceeds of $3.5 million received in the twelve months ended June 1, 2024 related to the sale of the Company's investment in Global Holdings Netherlands B.V.

Capital expenditures for the current year were $78.4 million as compared to $83.3 million in the prior year. At the end of the fiscal 2024, there were outstanding commitments for capital purchases of $53.7 million. The Company plans to fund these commitments with cash on hand and/or cash generated from operations. The Company expects capital spending in fiscal 2025 to be between $100 million and $125 million, which will be primarily related to investments in the Company's facilities, (including manufacturing, showrooms, and retail stores) and equipment as well as investments associated with achieving the Company's sustainability goals.

Cash Flow — Financing Activities

Cash used in financing activities for the twelve months ended June 31, ~~2023~~2024 was $86258.8 million, compared to ~~cash provided by financing activities of~~ $~~1,039~~86.98 million in the twelve months ended ~~May~~June 283, ~~2022~~2023. The ~~primary~~increase ~~driver~~in ~~of the use of~~ cash used in ~~fiscal 2023 was net payments on~~ the ~~revolving~~current ~~credit facility and long term debt of $12.6 million. In fiscal 2022~~year, ~~the~~compared ~~net source of cash related~~ to ~~net~~the ~~borrowings~~prior ~~of $1~~year,~~007.0~~ ~~million~~was ~~under~~primarily ~~the~~due ~~credit agreement the Company entered into in connection with the acquisition of Knoll as well as net proceeds from the credit facility and long term debt of $124.9 million.~~to:

•The Company repurchased 6,022,646 shares at a cost of $138.2 million in the current year as compared to 575,207 share repurchases totaling $16.0 million in the prior year; and

•Net payments on the credit agreement of $36.7 million in the current year compared to net borrowings of $13.7 million in the prior year; and

•Repayments of long-term debt of $31.3 million in the current year compared to $26.3 million in the prior year.

Sources of Liquidity

InThe ~~addition to steps taken to protect its workforce and manage business operations, the~~ Company has taken actions to safeguard its capital position in the current environment. The Company is closely managing spending levels, capital investments, and working capital.

The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors.

At the end of fiscal ~~2023~~2024, the Company has a well-positioned balance sheet and liquidity profile. The Company has access to liquidity through credit facilities, ~~cash~~as ~~and~~well as cash ~~equivalents~~ and ~~short-term~~cash ~~investments~~equivalents. These sources have been summarized below. For additional information, refer to Note 6 to the Consolidated Financial Statements.

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Cash and cash equivalents	$	~~223~~230.54	$	~~230~~223.35
Availability under revolving lines of credit(1)	~~284~~322.23		~~296~~284.62
Total liquidity	$	~~507~~552.7	$	~~526~~507.97

(1) Available access to our revolving line of credit is subject to covenant restrictions outlined in our credit agreement.

Of the cash and cash equivalents noted above at the end of fiscal ~~2023~~2024, the Company had $~~202~~218.5 million of cash and cash equivalents held outside the United States.

The Company’s syndicated revolving line of credit, which matures in July, 2026, provides the Company with up to $725 million in revolving variable interest borrowing capacity and allows the Company to borrow incremental amounts, at its option, subject to negotiated terms as outlined in the agreement. Outstanding borrowings bear interest at rates based on the prime rate, federal funds rate, SOFR or negotiated terms as outlined in the agreement.

As of June 31, ~~2023~~2024, the total debt outstanding related to borrowings under the syndicated revolving line of credit was $~~426~~390.70 million with available borrowings against this facility of $~~284~~322.23 million.

The Company intends to repatriate $~~169~~114.49 million of undistributed foreign earnings, all of which is held in cash in certain foreign jurisdictions. The Company has recorded a $53.87 million deferred tax liability related to foreign withholding taxes on these future dividends received in the U.S. from foreign subsidiaries. A significant portion of the $~~169~~114.49 million of undistributed foreign earnings was previously taxed under the U.S. Tax Cut and Jobs Act (TCJA). The Company intends to remain indefinitely reinvested in the remaining undistributed earnings outside the U.S. which is estimated to be approximately $~~282~~347.25 million on June 31, ~~2023~~2024.

The Company believes cash on hand, cash generated from operations, and borrowing capacity will provide adequate liquidity to fund near term and foreseeable future business operations, capital needs, upcoming debt maturities, future dividends and share repurchases, subject to financing availability in the marketplace.

Contingencies

The Company is involved in legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such proceedings and litigation currently pending will not materially affect the Company's Consolidated Financial Statements. Refer to Note 13 of the Consolidated Financial Statements for more information relating to contingencies.

Basis of Presentation

The Company's fiscal year ends on the Saturday closest to May 31. The fiscal year ended June 31, ~~2023,~~2024 contained 5352 weeks, ~~and~~ the fiscal ~~years~~year ended ~~May~~June 283, ~~2022 and May 29, 2021 contained 52 weeks. The first quarter of fiscal~~ 2023 contained 1453 weeks, ~~while~~and the ~~first quarter of~~ fiscal year ~~2022~~ended ~~and~~May 28, ~~2021~~2022 contained 1352 weeks.

Contractual Obligations

Contractual obligations associated with our ongoing business and financing activities will result in cash payments in future periods. The following table summarizes the amounts and estimated timing of these future cash payments. Further information regarding debt obligations can be found in Note 6 of the Consolidated Financial Statements. Additional information related to operating leases can be found in Note 7 of the Consolidated Financial Statements.

3938

	Payments due by fiscal year
(In millions)	Total		~~2024~~2025		~~2025-~~2026-2027		~~2027-~~2028-2029		Thereafter
Short-term borrowings and long-term debt (1)	$	1,~~414~~347.48	$	3343.46	$	87713.52	$	~~709~~591.20	$	~~584.3~~—
Estimated interest on debt obligations (1)	~~163~~179.96		3864.1		7696.2		4419.63		~~5.0~~—
Operating leases	~~561~~547.86		8183.59		~~171~~164.42		~~123~~126.98		~~185~~172.07
Purchase obligations	91140.42		74126.7		1613.75		—		—
Pension and other post employment benefit plans funding (2)	56.24		45.79		0.1		0.1		0.3
Stockholder dividends (3)	1413.52		1413.52		—		—		—
Other (4)	6.92		0.87		1.43		1.21		3.51
Total	$	2,~~258~~241.10	$	~~247~~338.71	$	~~353~~988.35	$	~~879~~738.03	$	~~778~~176.1

(1) Includes the current portion of long-term debt. Contractual cash payments on long-term debt obligations are disclosed herein based on the amounts borrowed as of June 31, ~~2023~~2024 and the maturity date of the underlying debt. Estimated future interest payments on our outstanding interest-bearing debt obligations are based on interest rates as of June 31, ~~2023~~2024. Actual cash outflows may differ significantly due to changes in borrowings or interest rates.

(2) Pension plan funding commitments are known for a 12-month period for those plans that are funded; unfunded pension and post-retirement plan funding amounts are equal to the estimated benefit payments. As of June 31, ~~2023~~2024, the total projected benefit obligation for our domestic and international employee pension benefit plans was $~~199~~207.81 million.

(3) Represents the dividend payable as of June 31, ~~2023~~2024. Future dividend payments are not considered contractual obligations until declared.

(4) Other contractual obligations primarily represent long-term commitments related to deferred and supplemental employee compensation benefits, and other post-employment benefits.

Critical Accounting Policies and Estimates

Our goal is to report financial results clearly and understandably. We follow accounting principles generally accepted in the United States in preparing our Consolidated Financial Statements, which require us to make certain estimates and apply judgments that affect our financial position and results of operations. We continually review our accounting policies and financial information disclosures. These policies and disclosures are reviewed at least annually with the Audit Committee of the Board of Directors.

We believe that of our significant accounting policies, which are described in Note 1 of our consolidated financial statements, the following accounting policies and specific estimates involve a greater degree of judgment and complexity.

Business Combinations

Accounting for business combinations requires us to make significant estimates and assumptions, especially at the acquisition date with respect to tangible and intangible assets acquired and liabilities assumed and pre-acquisition contingencies. We use our best estimates and assumptions to accurately assign fair ~~value~~values to the tangible and intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets.

We allocate the fair value of purchase consideration to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is allocated to goodwill. The allocation of the purchase consideration requires management to make significant estimates and assumptions, especially with respect to intangible assets. These estimates are reviewed with our advisors and can include, but are not limited to:

•future expected cash flows from acquired customer relationships and trade names,

•assumed royalty rates that could be payable if we did not own the trademarks, and

•discount rates.

Our estimates of fair value are based upon reasonable assumptions but are inherently uncertain and unpredictable, and as a result, actual results may differ from these estimates. During the measurement period, which is up to one year from the acquisition date, we may record adjustments to the values of assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. During fiscal 2022, management considered the acquisition of Knoll a material acquisition. There were no material acquisitions during fiscal ~~2023~~2024 or fiscal ~~2021~~2023. See Note 3 to the Consolidated Financial Statements for more information.

4039

Goodwill and Indefinite-lived Intangibles

We perform our annual impairment assessment for goodwill and other indefinite-lived intangible assets each year as of March 31 or more frequently if events or changes in circumstances indicate an impairment might be possible. We may consider qualitative factors to assess if it is more likely than not that the fair value for goodwill or indefinite-lived intangible assets is below the carrying amount. We may also elect to bypass the qualitative assessment and perform a quantitative assessment.

When the Company performs a quantitative assessment, the Company makes estimates about fair value by using a weighting of the income approach and the market approach. The income approach is based on projected discounted cash flows using a market participant discount rate. The market approach is based on financial multiples of companies comparable to each reporting unit and applies a control premium. We corroborate the fair value through a market capitalization reconciliation to determine if the implied control premium is reasonable based on the qualitative considerations, such as recent market transactions.

The Company believes its assumptions for assessing the impairment of its long-lived assets, goodwill and indefinite-lived trade names are reasonable, but future changes in the underlying assumptions could occur due to the inherent uncertainty in making such estimates.

Further declines in the Company’s operating results due to challenging economic conditions, an unfavorable industry or macroeconomic development or other adverse changes in market conditions could change one of the key assumptions the Company uses to calculate the fair value of its long-lived assets, goodwill and indefinite-lived trade names, which could result in a further decline in fair value and require the Company to record an impairment charge in future periods.

Goodwill

Certain business acquisitions have resulted in the recording of goodwill. At June 31, ~~2023~~2024 and ~~May~~June 283, ~~2022~~2023, we had goodwill recorded within the Consolidated Balance Sheets of $1,~~221~~226.73 million and $1,~~226~~221.27 million, respectively.

~~During~~Goodwill is tested for impairment at the ~~third~~reporting ~~quarter~~unit oflevel ~~fiscal~~annually, ~~year~~or ~~2023~~more frequently, ~~the~~when ~~Company~~events ~~assessed~~or changes in circumstances indicate that ~~occurred~~the ~~during~~fair value of a reporting unit has more likely than not declined below its carrying value. When testing goodwill for impairment, the ~~quarter~~Company tomay ~~determine~~first ifassess qualitative factors. If an initial qualitative assessment identifies that it ~~was~~is more likely than not that the ~~fair~~carrying ~~values~~value of ~~any~~a reporting ~~units~~unit ~~were~~exceeds ~~below~~its ~~their~~estimated ~~carrying~~fair ~~amounts~~value, additional quantitative testing is performed. ~~Although~~The ~~our~~Company ~~annual~~may ~~impairment~~also ~~test~~elect isto ~~performed~~bypass ~~during~~the qualitative testing and proceed directly to the ~~fourth~~quantitative ~~quarter~~testing. If the quantitative testing indicates that goodwill is impaired, wethe ~~perform~~carrying ~~this~~value ~~qualitative~~of ~~assessment~~goodwill ~~each~~is ~~interim~~written ~~reporting~~down ~~period~~to fair value.

~~While~~Each ~~there~~of ~~was no single determinate event,~~ the ~~consideration~~reporting inunits ~~totality~~was ofreviewed ~~several~~for ~~factors~~impairment ~~that~~using ~~developed~~a ~~during~~qualitative ~~the~~assessment ~~third~~as ~~quarter~~ of ~~fiscal~~March ~~year~~31, ~~2023~~2024. ~~led~~The usCompany elected to ~~conclude~~test ~~that~~each itreporting ~~was~~unit, ~~more~~with ~~likely than not that~~ the ~~fair~~exception ~~value~~ of the Global Retail reporting unit, ~~was~~qualitatively, ~~below~~as ~~its~~is ~~carrying~~permitted ~~amount.~~under ~~These~~ASU ~~factors~~2011-08, ~~included:~~Intangibles-Goodwill ~~(i)~~and ~~the~~Other ~~decision~~(Topic to350): ~~discontinue~~Testing ~~stand-alone~~Goodwill ~~operations~~for ofImpairment. For the ~~Fully~~Global ~~brand~~Retail ~~and~~reporting ~~(ii)~~unit, the ~~assessment~~Company ofelected ~~our~~to ~~third~~proceed ~~quarter~~directly ~~results,~~to ~~for~~the ~~which~~quantitative ~~the~~test. ~~performance~~No ofgoodwill ~~the~~impairment ~~Global~~charges ~~Retail~~were ~~reporting~~recorded ~~unit~~in ~~was~~fiscal ~~below~~2024, ~~management's~~2023, ~~expectations~~or 2022.

~~Accordingly,~~The ~~the~~ Company performed anthe ~~interim~~ quantitative impairment analysis as of ~~March 4, 2023 to determine~~ the ~~fair value of the~~ Global Retail reporting unit as ~~compared~~of toMarch ~~the carrying value. In performing the quantitative impairment test~~31, ~~the~~2024 ~~Company~~to ~~determined~~determine ~~that~~ the fair value of the Global Retail reporting unit ~~exceeded the carrying amount and,~~ as ~~such,~~compared to the ~~reporting~~carrying ~~unit was not impaired~~value. The Company ~~determined~~utilized ~~that the Global Retail reporting unit exceeded its carrying value by 1% and therefore has~~ a ~~heightened~~weighting ~~risk~~ of ~~future~~the ~~impairments~~income ifapproach ~~any~~and ~~assumptions,~~the ~~estimates or~~ market ~~factors~~approach ~~change~~to inestimate the ~~future. In completing the quantitative analysis the~~ fair value ~~was estimated using a discount rate~~ of ~~11.0%~~the ~~and~~Global ~~long-term~~Retail ~~growth~~reporting ~~rate of 2~~unit.~~5%.~~

~~Generally,~~The ~~changes~~test infor ~~estimates~~impairment ofrequires ~~expected~~the ~~future~~Company ~~cash~~to ~~flows~~make ~~would~~several ~~have~~estimates aabout ~~similar effect on the estimated~~ fair value ~~of the reporting unit. For example~~, amost ~~1.0%~~of ~~decrease~~which inare ~~estimated~~based ~~annual~~on projected future cash flows ~~would~~and ~~decrease~~market ~~the~~valuation multiples. We estimated the fair value of the Global Retail reporting unit byusing ~~approximately 1.0%. The estimated long-term growth rate can have~~ a ~~significant~~discounted ~~impact~~cash onflow ~~the~~analysis. ~~estimated~~The ~~future~~discounted cash ~~flows,~~flow ~~and~~analysis ~~therefore,~~used the ~~fair~~present value of ~~each~~projected ~~reporting~~cash ~~unit.~~flows Ofand ~~the~~a ~~other~~residual ~~key assumptions that impact the estimated fair values, most reporting units have the greatest sensitivity to changes in the estimated discount rate~~value.

The Company ~~evaluated~~employed a market-based approach in selecting the ~~sensitivity~~discount ofrate ~~changes~~used in ~~forecasted~~our ~~sales,~~analysis. ~~operating~~The ~~margin~~discount ~~and~~rate selected represents the ~~discount~~market rate ~~for~~of return equal to what the ~~Global~~Company ~~Retail~~believes ~~reporting~~a ~~unit.~~reasonable ~~Reducing~~investor would expect to achieve on investments of similar size to the Global Retail reporting unit's. ~~forecasted~~The ~~sales~~Company bybelieves 5%the indiscount ~~all~~rate ~~years,~~selected ~~and~~in ~~leaving~~the ~~all~~quantitative ~~other~~assessment ~~assumptions~~is ~~static,~~appropriate ~~would result~~ in anthat ~~impairment~~it ofexceeds ~~$26.0~~the ~~million.~~estimated Aweighted ~~decrease~~average incost ~~the~~of ~~operating~~capital ~~margin~~for ofour ~~100~~business ~~basis~~as ~~points~~a ~~would~~whole. ~~result~~The inresults anof the impairment oftest ~~$60.0~~are ~~million.~~sensitive Anto ~~increase~~changes in the discount ~~rate~~rates ofand ~~100~~changes ~~basis~~in ~~points~~the ~~would~~discount rate may result in anfuture impairment ~~of $46~~.~~0 million.~~

Each of the reporting units was reviewed for impairment using a qualitative assessment as of March 31, 2023. The Company elected to test each reporting unit qualitatively, as is permitted under ASU 2011-08, Intangibles-Goodwill and Other (Topic 40

41In performing the quantitative impairment test, the Company determined that the fair value of the Global Retail reporting unit exceeded the carrying amount and, as such, the reporting unit was not impaired. The Company determined that the Global Retail reporting unit exceeded its carrying value by 37% and therefore does not have a heightened risk of future impairments if any assumptions, estimates or market factors change in the future.

~~350):~~The ~~Testing~~Company ~~Goodwill~~evaluated ~~for~~the ~~Impairment~~sensitivity of changes in forecasted sales, asoperating margin and the ~~Company~~discount ~~concluded~~rate itfor tothe beGlobal ~~more~~Retail ~~likely~~reporting ~~than~~unit. ~~not~~Reducing ~~that~~the ~~their~~Global ~~estimated~~Retail ~~fair~~reporting ~~values~~unit's ~~are~~forecasted ~~greater~~sales ~~than~~by ~~their~~5% ~~respective~~in ~~carrying~~all ~~values.~~years, Noand ~~goodwill~~leaving all other assumptions static, would not result in impairment. ~~charges~~A ~~were~~decrease ~~recorded~~in the operating margin of 100 basis points in ~~fiscal~~all ~~2023,~~years ~~2022,~~would ornot ~~2021~~result in impairment. An increase in the discount rate of 100 basis points would not result in impairment.

In instances in which a quantitative assessment is performed, the Company utilizes a weighting of the income approach and the market method to estimate the fair value of each reporting unit. These approaches are based on a discounted cash flow analysis and observable comparable company information that use several inputs, including:

•forecasted sales growth rates and operating margins,

•discount rates based on the reporting unit's weighted average cost of capital, and

•revenue and EBITDA of comparable companies

Indefinite-lived Intangible Assets

Certain business acquisitions have resulted in the recording of trade names as indefinite-lived intangible assets, which are not amortized. At June 31, ~~2023~~2024 and ~~May~~June 283, ~~2022~~2023, the Company held trade name assets with a carrying value of $~~480~~465.75 million and $~~501~~480.07 million, respectively.

The Company evaluates indefinite-lived trade name intangible assets for impairment using a qualitative assessment annually. The Company also tests for impairment using a quantitative assessment if events and circumstances indicate that it is more likely than not that the fair value of an indefinite-lived intangible asset is below its carrying amount. An impairment charge is recorded if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value on the measurement date.

~~During~~In fiscal ~~2023~~2024, the Company ~~determined~~performed ~~through~~quantitative aassessments ~~qualitative~~in ~~assessment~~testing ~~that~~ the Knoll product brand and Muuto brand indefinite-lived intangible assets for impairment, which resulted in the carrying values of the trade ~~name~~names exceeding their fair values by $8.9 million and $7.9 million, respectively. Accordingly, impairment charges of $16.8 million in total were recognized. The carrying value ~~was~~of ~~more~~the ~~then~~Knoll ~~likely~~trade ~~above~~name ~~its~~as of the measurement date was $153.3 million and the fair value of the Knoll trade name as of the measurement date was $144.4 Asmillion. aThe ~~result,~~carrying value of the ~~Company~~Muuto ~~performed~~trade aname ~~quantitative~~as ~~assessment~~of tothe ~~determine~~measurement date was $88.4 million and the fair value ~~and~~of the Muuto trade name as aof ~~result~~the ~~recognized~~measurement adate was $1980.75 million. ~~non-~~If the residual cash ~~impairment~~flows ~~charge~~related to these trade names were to decline in future periods, the ~~indefinite-lived~~Company ~~trade~~may ~~name~~need to record additional impairment charges.

In ~~performing~~completing ~~this~~our ~~quantitative~~annual ~~assessment,~~indefinite-lived wetrade ~~estimated~~name impairment test, the respective fair ~~value~~values were estimated using ~~the~~a relief-from-royalty ~~method~~approach, which requires assumptions related to the following:

•forecasted ~~sales~~revenue growth ~~rates~~rate,

•assumed royalty rates that could be payable if we did not own the trademark, and

•a market participant discount rate based on a weighted-average cost of capital.

The assumptions used reflect management’s best ~~estimate~~estimates; however, actual results could differ from our estimates. In completing our annual indefinite-lived trade name impairment test, the fair ~~value~~values of the Knoll and Muuto trade ~~name~~names ~~was~~were both estimated using a discount rate of 12.0%,. The royalty ~~rate~~rates ofused for the Knoll and Muuto trade names were 2.000% and 4.5%, respectively. The long-term growth ~~rate~~rates in the valuation of the Knoll and Muuto trade names were 2.5% and 3.0%, respectively. The Company’s estimates of the fair value of its Knoll and Muuto indefinite-lived intangible ~~asset~~assets isare sensitive to changes in the key assumptions above as well as projected financial performance. Therefore, a sensitivity analysis was performed on certain key assumptions.

~~Keeping~~For the Knoll trade name, keeping all other assumptions constant, a 10% decrease in forecasted sales at ~~June~~March 331, ~~2023~~2024 would have resulted in $1514.3 0 million of additional pre-tax impairment charges.; ~~Keeping all other assumptions constant,~~ a ~~100~~decrease ~~basis point increase~~ in the ~~discount~~royalty rate of 25 basis points would have resulted in an additional $1518.0 million of impairment charges.; Aand ~~decrease~~a in100 ~~the~~basis ~~royalty~~point ~~rate~~increase ofin 25the ~~basis~~discount ~~points~~rate would ~~result~~have resulted in an additional $2014.0 million of impairment charges.

IfFor the ~~estimated~~Muuto ~~cash~~trade ~~flows~~name, ~~related~~keeping toall ~~the~~other ~~Company's~~assumptions ~~indefinite~~constant, a 10% decrease in forecasted sales at March 31, 2024 would have resulted in $8.0 million of additional pre-~~lived~~tax ~~intangibles~~impairment ~~were~~charges; toa ~~decline~~decrease in ~~future~~the ~~periods,~~royalty rate of 25 basis points would have resulted in an additional $4.5 million of impairment charges; and a 100 basis point increase in the ~~Company~~discount ~~may~~rate ~~need~~would tohave ~~record~~resulted in an additional $8.0 million of impairment ~~charge~~charges.

During fiscal 2023, the Company determined through a qualitative assessment that the Knoll trade name carrying value was more than likely above its fair value. As a result, the Company performed a quantitative assessment to determine the fair value and as a result recognized a $19.7 million non-cash impairment charge to the indefinite-lived trade name. The carrying value of the Knoll trade name as of the measurement date was $173.0 million. The fair value of the Knoll trade name as of the measurement date was $153.3 million.

The assumptions used reflect management’s best estimates; however, actual results could differ from our estimates. In completing our annual indefinite-lived trade name impairment tests, the fair value of the Knoll trade name was estimated using a discount rate of 12.0%, royalty rate of 2.0% and long-term growth rate of 2.5%. The Company’s estimates of the fair value of its Knoll indefinite-lived intangible asset are sensitive to changes in the key assumptions above as well as projected financial performance. Therefore, a sensitivity analysis was performed on certain key assumptions.

If the estimated cash flows related to the Company's indefinite-lived intangibles were to decline in future periods, the Company may need to record additional impairment charges.

Long-lived Assets

The Company evaluates other long-lived assets and acquired business units for indicators of impairment when events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. If such indicators are present, the future undiscounted cash flows attributable to the asset group are compared to the carrying value of the asset or asset group. The judgments regarding the existence of impairment are based on market conditions, operational performance, and estimated future cash flows. If the carrying value of a long-lived asset is considered impaired, an impairment charge is recorded to adjust the asset to its estimated fair value.

In the ~~third~~fourth quarter of fiscal ~~2023~~2024, the decision was made to cease ~~operating~~the ~~Fully~~use asof acertain ~~stand-alone~~leased ~~brand~~locations ~~and~~resulting ~~sales~~in ~~channel~~impairment ~~and~~charges ~~instead~~of ~~sell~~$5.5 ~~certain~~million ~~Fully~~recognized ~~products~~for ~~through~~the ~~other~~right ~~channels~~of ~~already~~use ~~existing~~assets ~~within~~associated with these locations. In the ~~Global~~second ~~Retail~~quarter ~~business~~of fiscal 2024, a manufacturing facility located in Wisconsin met the criteria to be classified as an asset held for sale. ~~Management~~The ~~identified~~decision to sell this ~~decision~~facility was made as a ~~indicator~~result of ~~impairment,~~facility ~~and~~integration ~~accordingly~~activities ~~recorded~~performed ~~impairment~~in connection with the integration of ~~certain~~Knoll. ~~long-lived~~In ~~assets~~the ~~within~~fourth quarter of fiscal 2024, it was determined that the ~~Fully~~carrying ~~asset~~value ~~group~~of these assets exceeded their fair value and an impairment charge of $1.0 ~~Impairment~~million ~~charges~~was recognized. The carrying amount of ~~long-lived~~these assets ~~within~~held ~~the~~for ~~Fully~~sale ~~business~~was ~~were~~ $213.5 million and is classified as current assets within "Assets held for sale" in ~~fiscal~~the ~~2023~~Condensed ~~and~~Consolidated Balance Sheets as of June 1, 2024.

42During fiscal 2023, the decision was made to cease operating Fully as a stand-alone brand and sales channel and instead sell certain Fully products through other channels already existing within the Global Retail business. Management identified this decision as an indicator of impairment, and accordingly recorded impairment of certain long-lived assets within the Fully asset group of $21.5 million.

~~are~~In fiscal 2022, the Company recorded ~~within~~a ~~"Impairment~~non-cash ~~charges"~~impairment ~~within~~charge of $15.5 million related to the ~~Consolidated~~discontinued ~~Statements~~use of ~~Comprehensive~~a ~~Income.~~long-lived Noasset ~~other~~that ~~asset~~was ~~groups~~a ~~were~~direct ~~identified~~result asof ~~having~~integration ~~indicators~~activities ofassociated ~~impairment~~with the Knoll acquisition.

The table below provides information related to the impairment of long-lived assets within the Fully asset group during fiscal 2023.

(In millions)	Fully Long-Lived Asset Impairment
Property and equipment	$	3.8
Right of use assets	6.1
Definite lived trade name	11.6
Total	$	21.5

In fiscal 2022 the Company recorded a non-cash impairment charge of $15.5 million related to the discontinued use of a long-lived asset that was a direct result of integration activities associated with the Knoll acquisition.

The Company believes its assumptions for assessing the impairment of its long-lived assets, goodwill and indefinite-lived trade names are reasonable, but if actual results are not consistent with management's estimates and assumptions, a material impairment charge could occur, which could have a material adverse effect on our consolidated financial statements.

New Accounting Standards

Refer to Note 1 of the Consolidated Financial Statements for information related to new accounting standards.

Forward Looking Statements

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to future events and anticipated results of operations, business strategies, the anticipated benefits of our acquisition of Knoll, the anticipated impact of the Knoll acquisition on the combined company’s business and future financial and operating results, the expected amount and timing of synergies from the Knoll acquisition, and other aspects of our operations or operating results. These forward-looking statements generally can be identified by phrases such as “will,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on the results of operations and financial condition of MillerKnoll or the price of MillerKnoll’s stock. These forward-looking statements involve certain risks and uncertainties, many of which are beyond MillerKnoll’s control, that could cause actual results to differ materially from those indicated in such forward-looking statements, including but not limited to: ~~general~~global and national economic conditions; including heightened inflation, uncertainty regarding future interest rates, foreign currency exchange rate fluctuations, escalating tensions in the ~~impact~~Middle East, the continuation of the Russia-Ukraine war, and ~~any~~potential ~~related~~governmental ~~company~~responses orto these events; the impact of any government policies and actions to protect the health and safety of individuals or ~~government policies or actions~~ to maintain the functioning of national or global economies, and the Company's response to any such policies and actions; the impact of public health crises, such as pandemics and epidemics; risks related to the additional debt incurred in connection with the Knoll acquisition; MillerKnoll’s ability to comply with its debt covenants and obligations; the risk that the anticipated benefits of the Knoll acquisition will be more costly to realize than expected; the effect of the ~~announcement of the~~ Knoll acquisition on the ability of MillerKnoll to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom MillerKnoll does business, or on MillerKnoll’s operating results and business generally; the ability to successfully integrate Knoll’s operations; the ability of MillerKnoll to implement its plans, forecasts and other expectations with respect to MillerKnoll’s business after the completion of the Knoll acquisition and realize expected synergies; ~~business disruption following~~ the ~~Knoll acquisition; the~~ availability and pricing of raw materials; the financial strength of our dealers and the financial strength of our customers; the success of newly-introduced products; the pace and level of government procurement; and the outcome of pending litigation or governmental audits or investigations. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to MillerKnoll’s periodic reports and other filings with the SEC, including the risk factors identified in this report. The forward-looking statements included in this report are made only as of the date hereof. MillerKnoll does not undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

Item 7A Quantitative and Qualitative Disclosures About Market Risk

The Company manufactures, markets, and sells its products throughout the world and, as a result, is subject to changing economic conditions, which could reduce the demand for its products.

Direct Material Costs

The Company is exposed to risks arising from price changes for certain direct materials and assembly components used in its operations. The largest of such costs incurred by the Company are for steel, plastics, textiles, wood particleboard and aluminum components. The impact from changes in all commodity prices decreased the Company's costs by approximately $310.58 million during fiscal ~~2023~~2024 compared to the prior year primarily due to ~~increased~~decreased ~~plastic~~steel and aluminum costs offset in part by ~~decreased~~increased ~~steel~~plastic costs. The impact from changes in commodity prices ~~increased~~decreased the Company's costs by approximately $~~55.~~3.5 million during fiscal ~~2022~~2023 as compared to fiscal ~~2021~~2022. Note that these changes include the impact of Chinese tariffs on the Company's direct material costs.

The market prices for commodities will fluctuate over time and the Company acknowledges that such changes are likely to impact its costs for key direct materials and assembly components. Consequently, it views the prospect of such changes as an outlook risk to the business.

Significant increases in raw materials can be difficult to offset with price increases due to existing contractual agreements with customers as well as difficulty finding effective financial instruments to hedge these changes. ~~In the short term, our gross margin has been and is expected to be negatively impacted by significant increases in these costs.~~ Our profitability could be negatively impacted in the long term if we are not able to pass along ~~these~~ higher raw material costs to our customers.

Foreign Exchange Risk

The Company primarily manufactures its products in the United States, United Kingdom, Canada, China, Italy, India, Mexico and Brazil. It also sources completed products and product components from outside the United States. The Company's completed products are sold in numerous countries around the world. Sales in foreign countries as well as certain expenses related to those sales are transacted in currencies other than the Company's reporting currency, the U.S. dollar. Accordingly, production costs and profit margins related to these sales are affected by the currency exchange relationship between the countries where the sales take place and the countries where the products are sourced or manufactured. These currency exchange relationships can also impact the Company's competitive positions within these markets.

In the normal course of business, the Company enters into contracts denominated in foreign currencies. The principal foreign currencies in which the Company conducts its business are the British pound sterling, euro, Canadian dollar, Japanese yen, Mexican peso, Hong Kong dollar, Chinese renminbi, and the Danish krone. As of June 31, ~~2023~~2024, the Company had outstanding 3521 forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.


(In millions, except number of forward contracts)
Net Asset Exposure
Currency	Number of Forward Contracts	Net Exposure
USD	6	53.3
EUR	2	49.4
BRL	1	3.9
CNY	1	20.4
JPY	1	573.1








Net Liability Exposure
Currency	Number of Forward Contracts	Net Exposure
USD	3	15.3
DKK	2	20.1
CNH	2	242.5
EUR	1	1.1
GBP	1	1.1
MXN	1	101.1

As of June 3, 2023, the Company had outstanding 35 forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.


(In millions, except number of forward contracts)
Net Asset Exposure
Currency	Number of Forward Contracts	Net Exposure
USD	6	74.2
DKK	3	11.1
EUR	3	59.3
GBP	3	6.5
KWN	1	2,599.6
SEK	2	21.8
NOK	1	11.9
CNY	1	19.5
JPY	1	403.5
ZAR	1	20.4

Net Liability Exposure
Currency	Number of Forward Contracts	Net Exposure
USD	6	25.4
GBP	2	1.0
AUD	1	5.5
CAD	1	12.9
HKD	1	222.6
CNH	2	194.3

AsThe cost of ~~May 28,~~the ~~2022,~~foreign ~~the~~currency ~~Company~~hedges ~~had~~and ~~outstanding,~~remeasuring 22all ~~forward~~foreign currency ~~instruments~~transactions ~~designed~~into tothe ~~offset~~appropriate ~~either~~functional currency resulted in a net ~~asset~~gain orof $3.0 million in fiscal 2024 compared to net ~~liability~~gain ~~exposure~~of ~~that~~$4.8 ismillion ~~denominated~~in fiscal 2023 included in ~~non-~~net earnings. These amounts are included in Other (income) expense, net in the Consolidated Statements of Comprehensive Income. Additionally, the cumulative effect of translating the balance sheet and income statement accounts from the functional ~~currencies~~currency into the United States dollar increased the accumulated comprehensive loss component of total stockholders' equity by $8.3 million compared to a decrease of $20.1 million as of the end of fiscal 2024 and 2023, respectively.

(In millions, except number of forward contracts)
Net Asset Exposure
Currency	Number of Forward Contracts	Net Exposure
USD	6	39.2
EUR	3	66.6
NOK	1	14.0
SEK	1	23.4
GBP	1	1.7
ZAR	1	19.4
Net Liability Exposure
Currency	Number of Forward Contracts	Net Exposure
USD	6	14.9
CAD	2	15.9
GBP	1	41.5

The cost of the foreign currency hedges and remeasuring all foreign currency transactions into the appropriate functional currency resulted in a net gain of $4.8 million in fiscal 2023 compared to net gain of $3.3 million in fiscal 2022 included in net earnings. These amounts are included in Other (income) expense, net in the Consolidated Statements of Comprehensive Income. Additionally, the cumulative effect of translating the balance sheet and income statement accounts from the functional currency into the United States dollar decreased the accumulated comprehensive loss component of total stockholders' equity by $20.1 million compared to an decrease of $90.0 million as of the end of fiscal 2023 and 2022, respectively.

Interest Rate Risk

The Company enters into interest rate swap agreements to manage its exposure to interest rate changes and its overall cost of borrowing. The Company's interest rate swap agreements were entered into to exchange variable rate interest payments for fixed rate payments over the life of the agreement without the exchange of the underlying notional amounts. The notional amount of the interest rate swap agreements is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss. The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense.

These interest rate swap derivative instruments are held and used by the Company as a tool for managing interest rate risk. They are not used for trading or speculative purposes. The counterparties to the swap instruments are large financial institutions that the Company believes are of high-quality creditworthiness. While the Company may be exposed to potential losses due to the credit risk of non-performance by these counterparties, such losses are not anticipated.

In September 2016, the Company entered into an interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $150.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028. As a result of the transaction, the Company effectively converted the interest rate on indebtedness anticipated to be borrowed on its revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 1.949% fixed interest rate plus applicable margin as of the forward start date. The swap agreement was amended in February 2023 for each calculation period beginning on February 3, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 1.910% modified fixed interest rate.

In June 2017, the Company entered into a second interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $75.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028. As a result of the transaction, the Company effectively converted the interest rate on indebtedness anticipated to be borrowed on its revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 2.387% fixed interest rate plus applicable margin under the agreement as of the forward start date. The swap agreement was amended in February 2023 for each calculation period beginning on February 3, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 2.348% modified fixed interest rate.

In January 2022, the Company entered into a third interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $575.0 million with a forward start date of January 31, 2022 and a maturity date of January 29, 2027. The interest rate swap locked in the Company’s interest rate on forecasted outstanding borrowings of $575.0 million at 1.689% exclusive of the credit spread on the variable rate debt. The Company effectively will convert LIBOR-based floating interest rate plus applicable margin indebtedness to a 1.689% fixed interest rate plus applicable margin under the agreement as of the forward start date. The swap agreement was amended in February 2023 for each calculation period beginning on January 31, 2023, and thereafter, to replace the LIBOR-based floating interest rate with a Term SOFR rate, and a 1.650% modified fixed interest rate.

In February 2023, the Company entered into a fourth interest rate swap agreement. The interest rate swap is for an aggregate notional amount of $150.0 million with a forward start date of March 3, 2023 and a termination date of January 3, 2029. As a result of the transaction, under the terms of the agreement the Company effectively will convert one month Spread Adjusted Term SOFR floating interest rate plus applicable margin to 3.950% fixed interest rate and adjustment %percentage plus applicable margin as of the forward start date. "Spread Adjusted Term SOFR" means Term SOFR plus an adjustment %percentage that varies with tenor. The Company typically selects a one month tenor ~~and~~ that is calculated as the one month Term SOFR rate plus 0.11448%.

The fair market value of the effective interest rate swap instruments was a net asset of $61.7 million and $56.9 million atas of June 31, ~~2023~~2024 ~~compared~~and ~~to a net asset of $31.9~~June ~~million~~3, ~~at May 28~~2023, ~~2022~~respectively. All cash flows related to the Company's interest rate swap instruments are denominated in U.S. Dollars. For further information, refer to Note 6 and Note 12 of the Consolidated Financial Statements.

Expected cash outflows (notional amounts) over the next five years and thereafter related to debt instruments are as follows.


(In millions)	2025		2026		2027		2028		2029		Thereafter		Total(1)


Long-Term Debt Instruments:
Interest rate 1.650%(2)	$	—	$	—	$	575.0	$	—	$	—	$	—	$	575.0

Interest rate 1.910%(2)	$	—	$	—	$	—	$	150.0	$	—	$	—	$	150.0
Interest rate 2.348%(2)	$	—	$	—	$	—	$	75.0	$	—	$	—	$	75.0
Interest rate 3.950%(2)	$	—	$	—	$	—	$	—	$	150.00	$	—	$	150.0

(In millions)	2024		2025		2026		2027		2028		Thereafter		Total(1)
Long-Term Debt Instruments:
Interest rate 1.650%(2)	$	—	$	—	$	—	$	575.0	$	—	$	—	$	575.0
Interest rate 1.910%(2)	$	—	$	—	$	—	$	—	$	150.0	$	—	$	150.0
Interest rate 2.348%(2)	$	—	$	—	$	—	$	—	$	75.0	$	—	$	75.0
Interest rate 3.950%(2)	$	—	$	—	$	—	$	—	$	—	$	150.0	$	150.0

(1) Amount does not include the recorded fair value of the swap instruments.

(2) The Company's revolving credit facility and Term Loans have a variable interest rate, but due to the interest rate swaps, the rate on $150.0 million, $75.0 million, $575.0 million and $150.0 million will be fixed at 1.6591%, 12.91348%, 21.~~348~~65% and 3.95%, respectively.

4746

Item 8 Financial Statements and Supplementary Data

MillerKnoll, Inc.

Consolidated Statements of Comprehensive Income

	Year Ended
(In millions, except per share data)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023		May 2928, ~~2021~~2022
Net sales	$	43,~~087~~628.14	$	34,~~946~~087.01	$	23,~~465~~946.10
Cost of sales	2,~~657~~208.19		2,~~593~~657.31		12,~~514~~593.03
Gross margin	1,~~430~~419.05		1,~~352~~430.70		~~951.~~1,352.7
Operating expenses:
Selling, general and administrative	1,~~126~~112.41		1,~~204~~126.24		~~643~~1,204.82
Impairment charges	4116.28		—41.2		—
Restructuring expenses	3430.48		—34.4		~~2.7~~—
Design and research	~~105~~92.76		~~108~~105.7		72108.17
Total operating expenses	1,~~307~~252.73		1,~~312~~307.97		~~718~~1,312.69
Operating earnings	~~122~~167.32		39122.83		~~232~~39.58
Interest expense	7476.02		3774.80		1337.98
Interest and other investment income	2.8		1.6		2.1
Interest and other investment (income) expense	(6.1)		(2.8)		(1.6)
Other (income) expense, net	(02.36)		12(0.23)		(712.6)2
Earnings (loss) before income taxes and equity income	5199.47		(851.6)4		~~228~~(8.36)
Income tax expense	414.57		114.15		4811.31
Equity (loss) earnings from nonconsolidated affiliates, net of tax	(0.8)		—		0.3
Equity (loss) earnings from nonconsolidated affiliate, net of tax	(0.4)		(0.8)		—
Net earnings (loss)	4684.16		~~(19~~46.7)1		~~180~~(19.37)
Net earnings attributable to redeemable noncontrolling interests	42.03		7.4.0		5.7.4
Net earnings (loss) attributable to MillerKnoll, Inc.	$	4282.13	$	~~(27~~42.1)	$	~~174~~(27.61)
Earnings (loss) per share - basic	$	01.5612	$	(0.~~37)~~56	$	2(0.9637)
Earnings (loss) per share - diluted	01.5511		(0.~~37)~~55		2(0.9437)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	~~(20~~8.1)3		(9020.01)		52(90.10)
Pension and post-retirement liability adjustments	13(9.15)		13.51		813.85
Unrealized gains on interest rate swap agreement	193.06		3419.50		834.15
Unrealized holding (losses) gains on securities	—		—		(0.1)
Other comprehensive income (loss), net of tax	2.4		12.0		(42.0)
Other comprehensive income (loss), net of tax	12.0		(42.0)		68.9
Comprehensive income (loss)	87.0		58.1		(61.7)
Comprehensive income (loss)	58.1		(61.7)		249.2
Comprehensive income attributable to redeemable noncontrolling interests	2.3		4.0		4.4
Comprehensive income attributable to redeemable noncontrolling interests	4.0		4.4		5.7
Comprehensive income (loss) attributable to MillerKnoll, Inc.	$	84.7	$	54.1	$	(66.1)
Comprehensive income (loss) attributable to MillerKnoll, Inc.	$	54.1	$	(66.1)	$	243.5

4847

MillerKnoll, Inc.

Consolidated Balance Sheets

(In millions, except share and per share data)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
ASSETS
Current Assets:
Cash and cash equivalents	$	~~223~~230.54	$	~~230~~223.35
Accounts receivable, net of allowances of $6.4 and $9.7	334.1		348.9
Accounts receivable, net of allowances of $7.4 and $6.4	308.3		334.1
Unbilled accounts receivable	2922.42		3229.04
Inventories, net	~~487~~428.46		~~587~~487.34
Prepaid expenses	9266.75		~~112~~92.17
Other current assets	9.1		7.3
Assets held for sale	3.5		—
Total current assets	1,176.2		1,317.9
Other current assets	10.1		9.1
Property and equipment, net of accumulated depreciation of $1,034.4 and $928.2	536.3		581.5
Total current assets	1,069.6		1,176.2
Right of use assets	415.9		425.8
Property and equipment, net of accumulated depreciation of $1,090.7 and $1,034.4	492.0		536.3
Goodwill	1,221.7		1,226.2
Right of use assets	375.6		415.9
Indefinite-lived intangibles	480.7		501.0
Goodwill	1,226.3		1,221.7
Other amortizable intangibles, net of accumulated amortization of $185.2 and $134.7	313.1		362.4
Indefinite-lived intangibles	465.5		480.7
Other noncurrent assets	130.9		99.2
Other amortizable intangibles, net of accumulated amortization of $223.4 and $185.2	279.3		313.1
Total Assets	$	4,274.8	$	4,514.0
Other noncurrent assets	135.3		130.9
Total Assets	$	4,043.6	$	4,274.8
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	~~269~~241.54	$	~~355~~269.15
Short-term borrowings and current portion of long-term debt	3343.45		2933.34
Accrued compensation and benefits	61104.75		~~128~~61.67
Short-term lease liability	7767.12		7977.91
Accrued warranty	2017.86		1820.8
Customer deposits	93100.82		~~125~~93.38
Other accrued liabilities	~~146~~123.53		~~140~~146.45
Total current liabilities	~~702~~697.87		~~877~~702.48
Long-term debt	1,~~365~~291.17		1,~~379~~365.21
Pension and post-retirement benefits	710.50		257.05
Lease liabilities	~~393~~360.74		~~398~~393.27
Other liabilities	~~265~~224.58		~~300~~265.25
Total Liabilities	2,~~734~~584.6		2,~~980~~734.06
Redeemable noncontrolling interests	~~107~~73.69		~~106~~107.96
Stockholders' Equity:
Preferred stock, no par value (10,000,000 shares authorized, none issued)	—		—
Common stock, $0.20 par value (240,000,000 shares authorized, 75,698,670 and 75,824,241 shares issued and outstanding in 2023 and 2022, respectively)	15.1		15.2
Common stock, $0.20 par value (240,000,000 shares authorized, 70,377,692 and 75,698,670 shares issued and outstanding in 2024 and 2023, respectively)	14.1		15.1
Additional paid-in capital	~~836~~725.53		~~825~~836.75
Retained earnings	~~676~~738.14		~~693~~676.31
Accumulated other comprehensive loss	(9592.17)		(~~107~~95.1)
Total Stockholders' Equity	1,~~432~~385.61		1,~~427~~432.16
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	$	4,~~274~~043.86	$	4,~~514~~274.08

4948

MillerKnoll, Inc.

Consolidated Statements of Stockholders' Equity

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Deferred Compensation Plan		MillerKnoll, Inc. Stockholders' Equity
(In millions, except share and per share data)	Shares	Amount
May 30, 2020	58,793,275	$	11.8	$	81.6	$	693.3	$	(134.0)	$	(0.3)	$	652.4
Net earnings	—	—		—		174.6		—		—		174.6
Other comprehensive income, net of tax	—	—		—		—		68.9		—		68.9
Stock-based compensation expense	—	—		9.0		—		—		—		9.0
Exercise of stock options	86,238	—		2.6		—		—		—		2.6
Restricted and performance stock units released	114,103	—		0.2		—		—		—		0.2
Employee stock purchase plan issuances	71,468	—		2.1		—		—		—		2.1
Repurchase and retirement of common stock	(38,932)	—		(0.9)		—		—		—		(0.9)
Directors' fees	3,013	—		0.1		—		—		—		0.1
Deferred compensation plan	—	—		—		—		—		0.1		0.1
Dividends declared ($0.56 per share)	—	—		—		(33.4)		—		—		(33.4)
Redemption value adjustment	—	—		—		(15.0)		—		—		(15.0)
Other	—	—		—		(0.2)		—		—		(0.2)
May 29, 2021	59,029,165	$	11.8	$	94.7	$	819.3	$	(65.1)	$	(0.2)	$	860.5
Net loss	—	—		—		(27.1)		—		—		(27.1)
Other comprehensive loss, net of tax	—	—		—		—		(42.0)		—		(42.0)
Stock-based compensation expense	—	—		31.4		—		—		—		31.4
Restricted stock issuance	611,452	0.1		(0.1)		—		—		—		—
Exercise of stock options	116,178	0.1		3.3		—		—		—		3.4
Restricted and performance stock units released	503,687	0.1		(0.1)		—		—		—		—
Employee stock purchase plan issuances	87,562	—		2.8		—		—		—		2.8
Repurchase and retirement of common stock	(390,979)	(0.1)		(16.1)		—		—		—		(16.2)
Directors' fees direct issuance	23,255	—		0.9		—		—		—		0.9
Director's fees deferred restricted stock units	—	—		0.6		—		—		—		0.6
Deferred compensation plan	—	—		—		—		—		0.2		0.2
Shares issued for the Acquisition of Knoll	15,843,921	3.2		685.1		—		—		—		688.3
Pre-combination expense from Knoll rollover	—	—		22.4		—		—		—		22.4
NCI Adjustment	—	—		0.5		—		—		—		0.5
NCI Valuation	—	—		—		(41.6)		—		—		(41.6)
Redemption Value Adjustment	—	—		—		(41.6)		—		—		(41.6)
Restricted stock units dividend reinvestment	—	—		0.3		(0.3)		—		—		—
Dividends declared ($0.75 per share)	—	—		—		(57.0)		—		—		(57.0)
May 28, 2022	75,824,241	$	15.2	$	825.7	$	693.3	$	(107.1)	$	—	$	1,427.1
Net earnings	—	—		—		42.1		—		—		42.1
Other comprehensive income, net of tax	—	—		—		—		12.0		—		12.0
Stock-based compensation expense	(39,839)	—		20.2		—		—		—		20.2
Exercise of stock options	49,482	—		1.0		—		—		—		1.0
Restricted and performance stock units released	226,657	—		0.4		—		—		—		0.4
Employee stock purchase plan issuances	185,551	—		3.1		—		—		—		3.1
Repurchase and retirement of common stock	(575,207)	(0.1)		(15.9)		—		—		—		(16.0)
Deferred stock unit	—	—		0.6		—		—		—		0.6
Director's fees	27,785	—		0.6		—		—		—		0.6
NCI Valuation	—	—		—		(1.9)		—		—		(1.9)
Redemption Value Adjustment	—	—		—		(1.9)		—		—		(1.9)
Dividends declared ($0.75 per share)	—	—		—		(57.2)		—		—		(57.2)
Other	—	—		0.8		(0.2)		—		—		0.6
June 3, 2023	75,698,670	$	15.1	$	836.5	$	676.1	$	(95.1)	$	—	$	1,432.6
Net earnings	—	—		—		82.3		—		—		82.3
Other comprehensive income, net of tax	—	—		—		—		2.4		—		2.4
Stock-based compensation expense	(983)	—		20.7		—		—		—		20.7
Exercise of stock options	74,096	—		1.7		—		—		—		1.7
Restricted and performance stock units released	457,965	0.1		0.9		—		—		—		1.0
Employee stock purchase plan issuances	139,211	0.1		2.9		—		—		—		3.0
Repurchase and retirement of common stock, including excise tax	(6,022,646)	(1.2)		(138.2)		—		—		—		(139.4)
Director's fees	31,379	—		0.8		—		—		—		0.8
Redemption Value Adjustment	—	—		—		34.5		—		—		34.5
Dividends declared ($0.75 per share)	—	—		—		(55.0)		—		—		(55.0)
Other	—	—		—		0.5		—		—		0.5
June 1, 2024	70,377,692	$	14.1	$	725.3	$	738.4	$	(92.7)	$	—	$	1,385.1

5049

MillerKnoll, Inc.

Consolidated Statements of Cash Flows

	Year Ended
(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023		May 2928, ~~2021~~2022
Cash Flows from Operating Activities:
Net earnings (loss)	$	4684.16	$	~~(19~~46.7)1	$	~~180~~(19.37)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation expense	~~115~~117.35		~~112~~115.03		72112.0
Amortization expense	3937.86		7839.68		1578.26
Loss (gain) on sales of property and dealers	—		(1.0)		—
Loss on sale of equity method investment	0.4		—		—
Deferred taxes	(45.3)		(21.7)		7.1
Loss on sale of property and dealers	—		—		(1.0)
Pension contributions	(11.7)		(5.0)		(5.4)
Deferred taxes	(38.8)		(45.3)		(21.7)
Impairment charges	57.9		15.5		—
Pension contributions	(1.8)		(11.7)		(5.0)
Loss on extinguishment of debt	—		13.4		—
Impairment charges	16.8		57.9		15.5
Restructuring expenses	34.0		—		2.7
Loss on extinguishment of debt	—		—		13.4
Stock-based compensation	20.2		31.4		9.0
Restructuring expenses	30.8		34.0		—
Amortization of deferred financing costs	4.6		4.2		0.4
Stock-based compensation	20.7		20.2		31.4
(Increase) decrease in long-term assets	(4.7)		(1.6)		1.2
Amortization of deferred financing costs	4.6		4.6		4.2
(Decrease) increase in long-term liabilities	(1.8)		(2.1)		16.0
Decrease (increase) in long-term assets	2.4		(4.7)		(1.6)
(Decrease) in long-term liabilities	(3.6)		(1.8)		(2.1)
Changes in current assets and liabilities:
Decrease (increase) in accounts receivable & unbilled accounts receivable	1535.62		~~(92~~15.4)6		(1492.84)
Decrease (increase) in inventories	8159.50		~~(166~~81.4)5		(10166.4)
Decrease (increase) in prepaid expenses and other	1925.6		~~(39~~19.6)		(339.96)
(Decrease) increase in accounts payable	(8228.59)		51(82.5)		4351.25
(Decrease) increase in accrued liabilities	(~~124~~7.85)		47(124.28)		1547.12
Other, net	(02.93)		(160.29)		4(16.62)
Net Cash Provided by (Used in) Operating Activities	~~162~~352.93		~~(11~~162.9)		~~332~~(11.39)
Cash Flows from Investing Activities:
Notes receivable issued	(5.1)		(1.2)		(2.0)
Advances of notes receivable	(14.7)		(5.1)		(1.2)
Marketable securities purchases	—		—		(5.9)
Collection of notes receivable	2.8		—		—
Marketable securities sales	—		~~7.7~~—		57.37
Capital expenditures	(8378.34)		(9483.73)		(5994.87)
Proceeds from sales of property and dealers	~~0.3~~—		20.83		142.08
Proceeds from life insurance policy	~~13.5~~—		—13.5		—
Acquisitions, net of cash received	—		~~(1,088.5)~~—		—(1,088.5)
Other, net	(1.9)		1.5		(11.5)
Proceeds from the sale of equity method investment	3.5		—		—
Net Cash (Used in) Investing Activities	(76.5)		(1,172.4)		(59.9)
Other, net	0.5		(1.9)		1.5
Net Cash (Used in) Investing Activities	(86.3)		(76.5)		(1,172.4)
Cash Flows from Financing Activities:
Proceeds from issuance of debt, net of discounts	—		~~1,007.0~~—		—1,007.0
Payments of deferred financing costs	—		~~(9.3)~~—		—(9.3)
Repayments of long-term debt	(2631.3)		(6326.13)		(5063.01)
Proceeds from credit facility	~~929~~833.92		~~1,026~~929.59		—1,026.5
Repayments of credit facility	(~~916~~869.29)		(~~838~~916.52)		(~~265~~838.05)
Payment of make whole premium on debt	—		~~(13.4)~~—		—(13.4)
Dividends paid	(5755.16)		(5457.51)		(3454.5)
Common stock issued	5.59		75.5		57.05
Common stock repurchased and retired	(16138.02)		(16.20)		(016.92)
Distribution to noncontrolling interest	(42.98)		(64.89)		—(6.8)
Other, net	(10.71)		0(1.7)		(20.3)7
Net Cash (Used in) Provided by Financing Activities	(86258.8)		~~1,039~~(86.98)		~~(347~~1,039.7)9
Effect of exchange rate changes on cash and cash equivalents	(60.43)		(216.74)		17(21.7)
Net (Decrease) In Cash and Cash Equivalents	(6.8)		(166.1)		(57.6)
Net Increase (Decrease) In Cash and Cash Equivalents	6.9		(6.8)		(166.1)
Cash and cash equivalents, Beginning of Year	~~230~~223.35		~~396~~230.43		~~454~~396.04
Cash and Cash Equivalents, End of Year	$	~~223~~230.54	$	~~230~~223.35	$	~~396~~230.43
Other Cash Flow Information
Interest paid	$	70.6	$	28.8	$	12.5
Income taxes paid, net of cash received	$	34.8	$	36.9	$	15.8


Other Cash Flow Information
Interest paid	$	70.6	$	70.6	$	28.8
Income taxes paid, net of cash received	$	28.1	$	34.8	$	36.9

Notes to the Consolidated Financial Statements

Note 1	Significant Accounting and Reporting Policies	53
Note 2	Revenue from Contracts with Customers	6162
Note 3	Acquisitions and Divestitures	6465
Note 4	Inventories	6665
Note 5	Investments in Nonconsolidated Affiliates	6766
Note 6	Short-Term Borrowings and Long-Term Debt	6867
Note 7	Leases	6968
Note 8	Employee Benefit Plans	7069
Note 9	Common Stock and Per Share Information	74
Note 10	Stock-Based Compensation	74
Note 11	Income Taxes	7980
Note 12	Fair Value	83
Note 13	Commitments and Contingencies	87
Note 14	Operating Segments	88
Note 15	Accumulated Other Comprehensive Loss	91
Note 16	Restructuring ~~Expenses~~and Integration Expense	91
Note 17	Variable Interest Entities	93

1. Significant Accounting and Reporting Policies

The following is a summary of significant accounting and reporting policies not reflected elsewhere in the accompanying financial statements.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of MillerKnoll, Inc. and its controlled domestic and foreign subsidiaries. The consolidated entities are collectively referred to as “the Company.” All intercompany accounts and transactions have been eliminated in the Consolidated Financial Statements.

Description of Business

The Company researches, designs, manufactures, sells and distributes interior furnishings for use in various environments including office, healthcare, educational and residential settings and provides related services that support companies all over the world. The Company's products are sold primarily through independent contract furniture dealers, retail studios, the Company's eCommerce platforms, direct-mail catalogs, as well as direct customer sales and independent retailers.

MillerKnoll is a collective of dynamic brands that comes together to design the world we live in. A global leader in design, MillerKnoll includes Herman Miller® and Knoll®, as well as Colebrook Bosson Saunders®, DatesWeiser®, Design Within Reach®, Edelman® ~~Leather~~, Geiger®, HAY®, Holly Hunt®, KnollTextiles®, ~~Maars® Living Walls,~~ Maharam®, Muuto®, NaughtOne®, and Spinneybeck®|FilzFelt®. Combined, MillerKnoll represents over 100 years of design research and exploration in service of humanity. The Company is united by a belief in design as a tool to create positive impact and shape a more sustainable, caring, and beautiful future for all people and the planet.

Fiscal Year

The Company's fiscal year ends on the Saturday closest to May 31. The fiscal year ended June 1, 2024, contained 52 weeks; the fiscal year ended June 3, 2023, contained 53 weeks; and the fiscal ~~years~~year ended May 28, 2022 ~~and May 29~~, ~~2021~~ contained 52 weeks.

Foreign Currency Translation

The functional currency for most of the foreign subsidiaries is their local currency. The cumulative effects of translating the balance sheet accounts from the functional currency into the United States dollar using fiscal year-end exchange rates and translating revenue and expense accounts using average exchange rates for the period are reflected as a component of Accumulated other comprehensive loss in the Consolidated Balance Sheets.

The financial statement impact of gains and losses resulting from remeasuring foreign currency transactions into the appropriate functional currency resulted in a net loss of $43.80 million, $34.38 million, and $03.83 million for the fiscal years ended June 31, ~~2023~~2024, ~~May~~June 283, ~~2022~~2023, and May 2928, ~~2021~~2022, respectively. These amounts are included in Other (income) expense, net in the Consolidated Statements of Comprehensive Income.

Cash and Cash Equivalents

~~The~~Certain of the Company’s ~~holds~~subsidiaries participate in a notional cash ~~equivalents~~pooling asarrangement to manage global liquidity requirements. As part of ~~its~~a ~~cash~~master ~~management~~netting ~~function.~~arrangement, ~~Cash~~the ~~equivalents~~participants ~~include~~combine ~~money~~their ~~market~~cash ~~funds~~balances ~~and~~in ~~time~~pooling ~~deposit~~accounts ~~investments~~at ~~with~~the ~~original~~same ~~maturities~~financial ofinstitution ~~less~~with ~~than~~the ~~three~~ability ~~months.~~to ~~The~~offset ~~carrying~~bank ~~value~~overdrafts of ~~cash~~one ~~equivalents,~~participant ~~which~~against ~~approximates~~positive ~~fair~~cash ~~value,~~account ~~totaled~~balances ~~$40.8~~held ~~million~~by ~~and~~another ~~$43~~participant.1 ~~million~~Under asthe terms of ~~June 3~~the master netting arrangement, ~~2023~~the ~~and~~financial ~~May 28~~institution has the right, ~~2022~~ability, ~~respectively.~~and ~~All~~intent ~~cash~~to ~~equivalents~~offset ~~are~~a ~~high-credit~~positive ~~quality~~balance ~~financial~~in ~~instruments~~one ~~and~~account ~~the~~against an overdrawn amount in another account. Amounts in each of ~~credit~~the ~~exposure~~accounts are unencumbered and unrestricted with respect to ~~any~~use. ~~one~~As ~~financial~~such, ~~institution~~the ornet ~~instrument~~cash balance related to this pooling arrangement is ~~limited~~included in Cash and cash equivalents in the accompanying Consolidated Balance Sheets.

~~Marketable~~The ~~Securities~~Company’s net cash pool position consisted of the following:

The Company previously maintained a portfolio of marketable securities primarily comprised of mutual funds. These investments were liquidated during fiscal year 2022 resulting in a cash in-flow in that year of approximately $7.7 million.


(In millions)	June 1, 2024
Gross cash position	$	26.6
Less: cash borrowings	(23.0)
Net cash position	$	3.6

The Company holds cash equivalents as part of its cash management function. Cash equivalents include money market funds and time deposit investments with original maturities of less than three months. The carrying value of cash equivalents, which approximates fair value, totaled $55.9 million and $40.8 million as of June 1, 2024 and June 3, 2023, respectively.

All cash equivalents are high-credit quality financial instruments and the amount of credit exposure to any one financial institution or instrument is limited.

Allowances for Credit Losses

Allowances for credit losses related to accounts are managed at a level considered by management to be adequate to absorb an estimate of probable future losses existing at the balance sheet date.

In estimating probable losses, we review accounts based on known customer exposures, historical credit experience, and specific identification of other potentially uncollectible accounts. An accounts receivable balance is considered past due when payment is not received within the stated terms. Accounts that are considered to have higher credit risk are reviewed using information available about the debtor, such as financial statements, news reports and published credit ratings. General information regarding industry trends and the economic environment is also used.

information available about the debtor, such as financial statements, news reports and published credit ratings. General information regarding industry trends, the economic environment is also used.

We arrive at an estimated loss for specific concerns and estimate an additional amount for the remainder of trade balances based on historical trends and other factors previously referenced. Balances are written off against the reserve once the Company determines the probability of collection to be remote. The Company generally does not require collateral or other security on trade accounts receivable. Subsequent recoveries, if any, are credited to bad debt expense when received.

Concentrations of Credit Risk

The Company's trade receivables are primarily due from independent dealers who, in turn, carry receivables from their customers. The Company monitors and manages the credit risk associated with individual dealers and direct customers where applicable. Dealers are responsible for assessing and assuming credit risk of their customers and may require their customers to provide deposits, letters of credit or other credit enhancement measures. Some sales contracts are structured such that the customer payment or obligation is direct to the Company. In those cases, the Company may assume the credit risk. Whether from dealers or customers, the Company's trade credit exposures are not concentrated with any particular entity.

Inventories

Inventories are valued at the lower of cost or net realizable value and include material, labor and overhead. The Company establishes reserves for excess and obsolete inventory based on prevailing circumstances and judgment for consideration of current events, such as economic conditions, that may affect inventory. The reserve required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions, however inventory cannot be subsequently written back up, since the reserve establishes a new (lower) cost basis. Inventory cost is primarily determined using the first in, first out (FIFO) method. Further information on the Company's recorded inventory balances can be found in Note 4 of the Consolidated Financial Statements.

Goodwill and Indefinite-lived Intangible Assets

The changes in the carrying amount of goodwill, by reporting segment, are as follows:

(In millions)	Americas Contract		International Contract & Specialty		Global Retail		Total
Balance at May 29, 2021
Goodwill	$	194.1	$	103.0	$	174.3	$	471.4
Foreign currency translation adjustments	3.3		8.2		6.8		18.3
Accumulated impairment losses	(36.7)		—		(88.8)		(125.5)
Net goodwill as of May 29, 2021	$	160.7	$	111.2	$	92.3	$	364.2
Balance at May 28, 2022
Goodwill	$	197.4	$	111.2	$	181.1	$	489.7
Sale of owned dealer	(0.3)		—		—		(0.3)
Acquisition of Knoll	346.0		226.8		330.7		903.5
Foreign currency translation adjustments	23.7		(33.7)		(31.2)		(41.2)
Accumulated impairment losses	(36.7)		—		(88.8)		(125.5)
Net goodwill as of May 28, 2022	$	530.1	$	304.3	$	391.8	$	1,226.2
Balance at June 3, 2023
Goodwill	$	566.8	$	304.3	$	480.6	$	1,351.7
Foreign currency translation adjustments	(1.7)		(1.3)		(1.5)		(4.5)
Accumulated impairment losses	(36.7)		—		(88.8)		(125.5)
Net goodwill balance as of June 3, 2023	$	528.4	$	303.0	$	390.3	$	1,221.7
Net goodwill as of June 3, 2023	$	528.4	$	303.0	$	390.3	$	1,221.7
Balance at June 1, 2024
Goodwill	$	565.1	$	303.0	$	479.1	$	1,347.2
Foreign currency translation adjustments	1.7		1.4		1.5		4.6
Accumulated impairment losses	(36.7)		—		(88.8)		(125.5)
Net goodwill balance as of June 1, 2024	$	530.1	$	304.4	$	391.8	$	1,226.3

Other indefinite-lived assets included in the Consolidated Balance Sheets consist of the following:

(In millions)	Indefinite-lived Intangible Assets
Balance at May 29, 2021	$	97.6
Foreign currency translation adjustments	(14.6)
Acquisition of Knoll	$	418.0
Balance at May 28, 2022	$	501.0
Foreign currency translation adjustments	(0.6)
Impairment charges	(19.7)
Acquisition of Knoll	(19.7)
Balance at June 3, 2023	$	480.7
Foreign currency translation adjustments	1.6
Impairment charges	(16.8)
Balance at June 1, 2024	$	465.5

Goodwill is tested for impairment at the reporting unit level annually, or more frequently, when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. When testing goodwill for impairment, the Company may first assess qualitative factors. If an initial qualitative assessment identifies that it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value, additional quantitative testing is performed. The Company may also elect to bypass the qualitative testing and proceed directly to the quantitative testing. If the quantitative testing indicates that goodwill is impaired, the carrying value of goodwill is written down to fair value.

Each of the reporting units was reviewed for impairment using a qualitative assessment as of March 31, ~~2023~~2024. The Company elected to test each reporting unit, with the exception of the Global Retail reporting unit, qualitatively, as is permitted under ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ~~The~~For ~~Company~~the ~~concluded~~Global itRetail toreporting beunit, ~~more~~the ~~likely~~Company ~~than~~elected ~~not~~to ~~that~~proceed ~~their~~directly ~~estimated~~to ~~fair~~the ~~values~~quantitative ~~are greater than their respective carrying values~~test.

In connection with the segment reorganization, the Company’s reporting units have changed in composition, and goodwill was reallocated between such reporting units using a relative fair value approach. Accordingly, the Company performed interim goodwill impairment tests in the first quarter of 2023 for each reporting unit. Based on the results of the tests performed, the Company determined that the fair value of each reporting unit, both before and after the reorganization, exceeded its respective carrying amount.

During the third quarter of fiscal year 2023, the Company assessed changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair values of any reporting units were below their carrying amounts. Although our annual impairment test is performed during the fourth quarter, we perform this qualitative assessment each interim reporting period.

While there was no single determinate event, the consideration in totality of several factors that developed during the third quarter of fiscal year 2023 led us to conclude that it was more likely than not that the fair value of the Global Retail reporting unit was below its carrying amount. These factors included: (i) the decision to discontinue stand-alone operations of the Fully brand and (ii) the assessment of our third quarter results, for which the performance of the Global Retail reporting unit was below management's expectations.

Accordingly, the Company performed an interim quantitative impairment analysis as of March 4, 2023 to determine the fair value of the Global Retail reporting unit as compared to the carrying value. The Company utilized a weighting of the income approach and the market approach to estimate the fair value of the Global Retail reporting unit. In performing the quantitative impairment test, the Company determined that the fair value of the Global Retail reporting unit exceeded the carrying amount and, as such, the reporting unit was not impaired. The Company determined that the Global Retail reporting unit exceeded its carrying value by 1% and therefore has a heightened risk of future impairments if any assumptions, estimates or market factors change in the future.

The test for impairment requires the Company to make several estimates about fair value, most of which are based on projected future cash flows and market valuation multiples. We estimated the fair value of the Global Retail reporting unit using a discounted cash flow analysis. The discounted cash flow analysis used the present value of projected cash flows and a residual value.

The Company employed a market-based approach in selecting the discount rate used in our analysis. The discount rate selected represents the market rates of return equal to what the Company believes a reasonable investor would expect to achieve on investments of similar size to the Company's reporting units. The Company believes the discount rate selected in the quantitative assessment is appropriate in that exceeds the estimated weighted average cost of capital for our business as a

~~whole~~The Company performed the quantitative impairment analysis of the Global Retail reporting unit as of March 31, 2024, to determine the fair value of the Global Retail reporting unit as compared to the carrying value. The ~~results~~Company utilized a weighting of the income approach and the market approach to estimate the fair value of the Global Retail reporting unit. In performing the quantitative impairment test, ~~are~~the ~~sensitive~~Company todetermined ~~changes~~that inthe fair value of the ~~discount~~Global ~~rates~~Retail reporting unit exceeded the carrying amount and, ~~changes~~as insuch, the ~~discount~~reporting ~~rate~~unit ~~may~~was ~~result~~not inimpaired. The Company determined that the Global Retail reporting unit exceeded its carrying value by 37% and therefore does not have a heightened risk of future ~~impairment~~impairments if any assumptions, estimates or market factors change in the future.

The ~~Company~~test ~~evaluated~~for ~~the~~impairment ~~sensitivity~~requires ~~of changes in forecasted sales, operating margin and~~ the ~~discount~~Company ~~rate~~to ~~for~~make ~~the~~several ~~Global~~estimates ~~Retail~~about ~~reporting~~fair ~~unit.~~value, ~~Reducing~~most ~~the~~of ~~Global~~which ~~Retail~~are ~~reporting~~based ~~unit's~~on ~~forecasted~~projected ~~sales~~future bycash 5%flows ~~in all years,~~ and ~~leaving~~market ~~all~~valuation ~~other~~multiples. ~~assumptions~~We ~~static,~~estimated ~~would~~the ~~result~~fair invalue ~~an impairment~~ of ~~$26.0 million. A decrease in~~ the ~~operating~~Global ~~margin~~Retail ofreporting ~~100~~unit ~~basis~~using ~~points~~a ~~would~~discounted ~~result~~cash inflow ananalysis. ~~impairment~~The ofdiscounted ~~$60.0 million.~~cash Anflow ~~increase~~analysis inused the ~~discount~~present ~~rate~~value of ~~100~~projected ~~basis~~cash ~~points~~flows ~~would~~and ~~result~~a inresidual ~~an impairment of $46~~value.~~0 million.~~

The Company employed a market-based approach in selecting the discount rate used in our analysis. The discount rate selected represents the market rates of return equal to what the Company believes a reasonable investor would expect to achieve on investments of similar size to the Global Retail reporting unit. The Company believes the discount rate selected in the quantitative assessment is appropriate in that exceeds the estimated weighted average cost of capital for our business as a whole. The results of the impairment test are sensitive to changes in the discount rates and changes in the discount rate may result in future impairment.

The Company evaluated the sensitivity of changes in forecasted sales, operating margin and the discount rate for the Global Retail reporting unit. Reducing the Global Retail reporting unit's forecasted sales by 5% in all years, and leaving all other assumptions static, would not result in impairment. A decrease in the operating margin of 100 basis points would not result in impairment. An increase in the discount rate of 100 basis points would not result in impairment.

~~During~~In fiscal ~~2023~~2024, the Company ~~determined~~performed ~~through~~quantitative aassessments ~~qualitative~~in ~~assessment~~testing ~~that~~ the Knoll ~~trade~~product ~~name~~brand and Muuto brand indefinite-lived intangible assets for impairment, which resulted in the carrying ~~value~~values ~~was~~of ~~more~~the ~~then~~trade ~~likely~~names ~~above~~exceeding ~~its~~their fair ~~value~~values by $8.9 million Asand a$7.9 million, ~~result~~respectively. Accordingly, ~~the~~impairment ~~Company~~charges ~~performed~~of a$16.8 million ~~quantitative~~in ~~assessment~~total towere ~~determine~~recognized. ~~the~~The ~~fair~~carrying value ~~and~~of the Knoll trade name as aof ~~result~~the ~~recognized~~measurement adate was $19153.7 3 million ~~non-cash~~and ~~impairment~~the ~~charge~~fair tovalue of the ~~indefinite-lived~~Knoll trade name as of the measurement date was $144.4 million. The carrying value of the ~~Knoll~~Muuto trade name as of the measurement date was $~~173~~88.04 million. ~~The~~and the fair value of the ~~Knoll~~Muuto trade name as of the measurement date iswas $~~153~~80.3 5 million. If the residual cash flows related to these trade names were to decline in future periods, the Company may need to record additional impairment charges.

•forecasted revenue growth rate,

•assumed royalty rates that could be payable if we did not own the trademark, and

•a market participant discount rate based on a weighted-average cost of capital.

The assumptions used reflect management’s best ~~estimate~~estimates; however, actual results could differ from our estimates. In completing our annual indefinite-lived trade name impairment test, the fair ~~value~~values of the Knoll and Muuto trade ~~name~~names ~~was~~were both estimated using a discount rate of 12.0%. The, royalty rate ofused for the Knoll and Muuto trade names were 2.000% and 4.5%, respectively. The long-term growth rate used in the valuation of the Knoll and Muuto trade names was 2.5% and 3.0%, respectively. The Company’s estimates of the fair value of its Knoll and Muuto indefinite-lived intangible ~~asset~~assets isare sensitive to changes in the key assumptions above as well as projected financial performance. Therefore, a sensitivity analysis was performed on certain key assumptions.

Keeping all other assumptions constant, a 10% decrease in forecasted sales at June 3, 2023 would have resulted in $15.3 million of additional pre-tax impairment charges. A decrease in the royalty rate of 25 basis points would result in an additional $20.0 million of impairment charges. Keeping all other assumptions constant, a 100 basis point increase in the discount rate would have resulted in an additional $15.0 million of impairment charges. 56

IfFor the ~~estimated~~Knoll ~~cash~~trade ~~flows~~name, ~~related~~keeping toall ~~the~~other ~~Company's~~assumptions ~~indefinite~~constant, a 10% decrease in forecasted sales at March 31, 2024, would have resulted in $14.0 million of additional pre-~~lived~~tax ~~intangibles~~impairment ~~were~~charges; toa ~~decline~~decrease in ~~future~~the ~~periods,~~royalty rate of 25 basis points would result in an additional $18.0 million of impairment charges; and a 100 basis point increase in the ~~Company~~discount ~~may~~rate ~~need~~would tohave ~~record~~resulted in an additional $14.0 million of impairment ~~charge~~charges.

For the Muuto trade name, keeping all other assumptions constant, a 10% decrease in forecasted sales at March 31, 2024 would have resulted in $8.0 million of additional pre-tax impairment charges; a decrease in the royalty rate of 25 basis points would have resulted in an additional $4.5 million of impairment charges; and a 100 basis point increase in the discount rate would have resulted in an additional $8.0 million of impairment charges.

The assumptions used reflect management’s best estimate; however, actual results could differ from our estimates. In completing our annual indefinite-lived trade name impairment tests, the fair value of the Knoll trade name was estimated using a discount rate of 12.0%, royalty rate of 2.0% and long-term growth rate of 2.5%. The Company’s estimates of the fair value of its Knoll indefinite-lived intangible asset are sensitive to changes in the key assumptions above as well as projected financial performance. Therefore, a sensitivity analysis was performed on certain key assumptions.

If the estimated cash flows related to the Company's indefinite-lived intangibles were to decline in future periods, the Company may need to record additional impairment charges.

Property, Equipment and Depreciation

Property and equipment are stated at cost. The cost is depreciated over the estimated useful lives of the assets using the straight-line method. Estimated useful lives range from 3 to 10 years for machinery and equipment and do not exceed 40 years for buildings. Leasehold improvements are depreciated over the lesser of the lease term or the useful life of the asset. The Company capitalizes certain costs incurred in connection with the development, testing and installation of software for internal use and cloud computing arrangements. Software for internal use is included in property and equipment and is depreciated over an estimated useful life not exceeding 10 years. Depreciation and amortization expense is included in the Consolidated Statements of Comprehensive Income in the Cost of sales, Selling, general and administrative and Design and research line items.

The following table summarizes our property as of the dates indicated:

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Land and improvements	$	55.10	$	5455.41
Buildings and improvements	~~393~~403.50		~~377~~393.25
Machinery and equipment	1,~~066~~069.6		1,~~027~~066.06
Construction in progress	55.51		5155.15
Accumulated depreciation	(1,~~034~~090.47)		(~~928~~1,034.24)
Property and equipment, net	$	~~536~~492.30	$	~~581~~536.53

As of the end of fiscal ~~2023~~2024, outstanding commitments for future capital purchases approximated $4453.87 million.

Other Long-Lived Assets

The Company reviews the carrying value of long–lived assets for impairment when events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. If such indicators are present, the future undiscounted cash flows attributable to the asset or asset group are compared to the carrying value of the asset or asset group. If such assets are considered to be impaired, the impairment amount to be recognized is the amount by which the carrying value of the assets exceeds their fair value.

Amortizable intangible assets within Other amortizable intangibles, net in the Consolidated Balance Sheets consist primarily of patents, trademarks and customer relationships. The customer relationships intangible asset is comprised of relationships with customers, specifiers, networks, dealers and distributors. Refer to the following table for the combined gross carrying value and accumulated amortization for these amortizable intangibles.

	June 3, 2023
(In millions)	Patent and Trademarks		Customer Relationships		Designs and Patterns		Backlog		Other		Total
Gross carrying value	$	60.1	$	355.1	$	42.0	$	28.4	$	12.7	$	498.3
Accumulated amortization	30.8		95.8		9.2		28.4		9.4		173.6
Impairment	11.6		—		—		—		—		11.6
Net	$	17.7	$	259.3	$	32.8	$	—	$	3.3	$	313.1
	May 28, 2022
	Patent and Trademarks		Customer Relationships		Designs and Patterns		Backlog		Other		Total
Gross carrying value	$	57.9	$	355.8	$	42.0	$	29.8	$	11.6	$	497.1
Accumulated amortization	24.7		66.0		5.9		29.8		8.3		134.7
Net	$	33.2	$	289.8	$	36.1	$	—	$	3.3	$	362.4

The Company amortizes these assets over their remaining useful lives using the straight-line method over periods ranging from 1 year to 20 years, or on an accelerated basis, to reflect the expected realization of the economic benefits. It is estimated that the weighted-average remaining useful life of the patents and trademarks is approximately 3.6 and the weighted-average remaining useful life of the customer relationships is 9.6.

Estimated amortization expense on existing amortizable intangible assets as of June 3, 2023, for each of the succeeding five fiscal years, is as follows:

(In millions)
2024	$	36.6
2025	36.4
2026	35.8
2027	33.2
2028	29.0

In the third quarter of fiscal 2023 the decision was made to cease operating Fully as a stand-alone brand and sales channel and instead sell certain Fully products through other channels of the Global Retail business. As a result of this decision, the

Company recorded asset Impairment charges related to Other Long-Lived Assets of $21.5 million in the third quarter of fiscal 2023. Of this amount, $11.6 million of the impairment related to the Fully trade name.


	June 1, 2024
(In millions)	Patent and Trademarks		Customer Relationships		Designs and Patterns		Backlog		Other		Total
Gross carrying value	$	62.6	$	356.6	$	42.1	$	28.3	$	13.1	$	502.7
Accumulated amortization	46.9		125.4		12.5		28.3		10.3		223.4

Net	$	15.7	$	231.2	$	29.6	$	—	$	2.8	$	279.3

	June 3, 2023
	Patent and Trademarks		Customer Relationships		Designs and Patterns		Backlog		Other		Total
Gross carrying value	$	60.1	$	355.1	$	42.0	$	28.4	$	12.7	$	498.3
Accumulated amortization	30.8		95.8		9.2		28.4		9.4		173.6
Impairment	11.6		—		—		—		—		11.6
Net	$	17.7	$	259.3	$	32.8	$	—	$	3.3	$	313.1

The ~~table~~Company ~~below~~amortizes ~~provides~~these ~~information~~assets ~~related~~over totheir remaining useful lives using the ~~impairments~~straight-line ~~recognized~~method ~~during~~over periods ranging from 3 years to 20 years, or on an accelerated basis, to reflect the ~~third~~expected ~~quarter~~realization of ~~fiscal~~the ~~2023~~economic benefits. ~~These~~It ~~charges~~is ~~are~~estimated ~~included~~that inthe ~~"Impairment~~weighted-average ~~charges"~~remaining ~~and~~useful ~~"Cost~~life of ~~sales"~~the ~~within~~patents and trademarks is approximately 3.1 years and the ~~Consolidated~~weighted-average ~~Statements~~remaining useful life of ~~Comprehensive~~the ~~Income~~customer relationships is 8.6 years.

(In millions)	Impairment Charge
Property and equipment	3.8
Right of use asset	6.1
Trade name	11.6
Total	$	21.5

Estimated amortization expense on existing amortizable intangible assets as of June 1, 2024, for each of the succeeding five fiscal years, is as follows:


(In millions)
2025			37.2
2026			36.6
2027			33.5
2028			29.1
2029			24.6

In the fourth quarter of fiscal 2024, the decision was made to cease the use of certain leased locations resulting in impairment charges of $5.5 million recognized for the right of use assets associated with these locations. In the second quarter of fiscal 2024, a manufacturing facility located in Wisconsin met the criteria to be classified as an asset held for sale. The decision to sell this facility was made as a result of facility integration activities performed in connection with the integration of Knoll. In the fourth quarter of fiscal 2024, it was determined that the carrying value of these assets exceeded their fair value and an impairment charge of $1.0 million was recognized.

In the third quarter of fiscal 2023, the decision was made to cease operating Fully as a stand-alone brand and sales channel and instead sell certain Fully products through other channels of the Global Retail business. As a result of this decision, the Company recorded asset Impairment charges related to Other Long-Lived Assets of $21.5 million in the third quarter of fiscal 2023. Of this amount, $11.6 million of the impairment related to the Fully trade name.

In fiscal 2022, the Company recorded a non-cash impairment charge of $15.5 million related to the discontinued use of a long-lived asset that was a direct result of integration activities associated with the Knoll acquisition.

The table below provides information related to the impairments recognized in fiscal 2024 and fiscal 2023. These charges are included in "Impairment charges" and "Cost of sales" within the Consolidated Statements of Comprehensive Income.


(In millions)	June 1, 2024		June 3, 2023
Property and equipment	$	1.0	$	3.8

Right of use asset	5.5		6.1
Trade name	—		11.6
Total	$	6.5	$	21.5

Self-Insurance

The Company is partially self-insured for general liability, workers' compensation and certain employee health and dental benefits under insurance arrangements that provide for third-party coverage of claims exceeding the Company's loss retention levels. The Company's health benefit and auto liability retention levels do not include an aggregate stop loss policy. The Company's retention levels designated within significant insurance arrangements as of June 31, ~~2023~~2024, are as follows:

(In millions)	Retention Level (per occurrence)
General liability	$	1.00
Auto liability	$	1.00
Workers' compensation	$	0.75
Health benefit	$	0.5070

The Company accrues for its self-insurance arrangements, as well as reserves for health, prescription drugs, and dental benefit exposures based on actuarial estimates, which are recorded in Other liabilities in the Consolidated Balance Sheets. The value of the liability as of June 31, ~~2023~~2024 and ~~May~~June 283, ~~2022~~2023 was $1312.20 million and $1413.72 million, respectively. The actuarial valuations are based on historical information along with certain assumptions about future events. Changes in assumptions for such matters as legal actions, medical costs, payment lag times and changes in actual experience could cause these estimates to change. ~~The general, auto, and workers' compensation liabilities are managed through the Company's wholly-owned insurance captive.~~

Research, Development and Other Related Costs

Research, development, pre-production and start-up costs are expensed as incurred. Research and development ("R&D") costs consist of expenditures incurred during the course of planned research and investigation aimed at discovery of new knowledge useful in developing new products or processes. R&D costs also include the enhancement of existing products or production processes and the implementation of such through design, testing of product alternatives or construction of prototypes. R&D costs included in Design and research expense in the accompanying Consolidated Statements of Comprehensive Income ~~are~~were $6762.60 million, $7167.16 million and $5071.81 million, in fiscal ~~2023~~2024, ~~2022~~2023, and ~~2021~~2022, respectively.

Royalty payments made to designers of the Company's products as the products are sold are variable costs based on product sales. These expenses totaled $3830.16 million, $3738.61 million and $2137.36 million in fiscal years ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022 respectively. They are included in Design and research expense in the accompanying Consolidated Statements of Comprehensive Income.

Customer Payments and Incentives

We offer various sales incentive programs to our customers, such as rebates and discounts. Programs such as rebates and discounts are adjustments to the selling price and are therefore characterized as a reduction to net sales.

Revenue Recognition

The Company recognizes revenue when performance obligations, based on the terms of customer contracts, are satisfied. This happens when control of goods and services based on the contract have been conveyed to the customer. Revenue for the sale of products is recognized at the point in time when control transfers, generally upon transfer of title and risk of loss to the customer. Revenue for services is recognized over time as the services are provided. The method of revenue recognition may vary, depending on the type of contract with the customer, as noted in the section "Disaggregated Revenue" in Note 2 of the Consolidated Financial Statements.

58The Company's contracts with customers include master agreements and certain other forms of contracts, which do not reach the level of a performance obligation until a purchase order is received from a customer. At the point in time that a purchase order under a contract is received by the Company, the collective group of documents represent an enforceable contract between the Company and the customer. While certain customer contracts may have a duration of greater than a year, all purchase orders are less than a year in duration. As of June 1, 2024, all unfulfilled performance obligations are expected to be fulfilled in the next twelve months.

The Company's contracts with customers include master agreements and certain other forms of contracts, which do not reach the level of a performance obligation until a purchase order is received from a customer. At the point in time that a purchase order under a contract is received by the Company, the collective group of documents represent an enforceable contract between the Company and the customer. While certain customer contracts may have a duration of greater than a year, all purchase orders are less than a year in duration. As of June 3, 2023, all unfulfilled performance obligations are expected to be fulfilled in the next twelve months. 59

Variable consideration exists within certain contracts that the Company has with customers. When variable consideration is present in a contract with a customer, the Company estimates the amount that should be included in the transaction price utilizing either the expected value method or the most likely amount method, depending on the nature of the variable consideration. These estimates are primarily related to rebate programs which involve estimating future sales amounts and rebate percentages to use in the determination of transaction price. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Adjustments to net sales from changes in variable consideration related to performance obligations completed in previous periods are not material to the Company's financial statements. Also, the Company has no contracts with significant financing components.

The Company accounts for shipping and handling activities as fulfillment activities and these costs are accrued within Cost of sales at the same time revenue is recognized. The Company does not record revenue for sales tax, value added tax or other taxes that are collected on behalf of government entities. The Company’s revenue is recorded net of these taxes as they are passed through to the relevant government entities. The Company has recognized incremental costs to obtain a contract as an expense when incurred as the amortization period is less than one year. The Company has not adjusted the amount of consideration to be received for any significant financing components as the Company’s contracts have a duration of one year or less.

Leases

The Company accounts for leases in accordance with ASC Topic 842, Leases, (“ASC 842”). For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains a lease. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company records right-of use ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease. As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.

As none of the Company’s leases provide an implicit discount rate, the Company uses an estimated incremental borrowing rate at the lease commencement date in determining the present value of the lease payments. Relevant information used in determining the Company’s incremental borrowing rate includes the duration of the lease, location of the lease, and the Company’s credit risk relative to risk-free market rates.

Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. Leases, and any leasehold improvements, are depreciated over the expected lease term. Additionally, certain leases include renewal or termination options, which can be exercised at the Company’s discretion. Lease terms include the non-cancelable portion of the underlying leases along with any reasonably certain lease periods associated with available renewal periods. The Company’s leases do not contain any residual value guarantees or material restrictive covenants.

Variable lease costs associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease costs are presented as Operating expenses in the Company’s Consolidated Statements of Comprehensive Income in the same line item as the expense arising from fixed lease payments for operating leases.

The Company determines if an arrangement is a lease at contract inception. Arrangements that are leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheets, and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. If leased assets have leasehold improvements, the depreciable life of those leasehold improvements are limited by the expected lease term.

ROU assets for operating leases are subject to the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment. The Company monitors for events or changes in circumstances that require a reassessment of a lease. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

Cost of Sales

The Company includes material, labor and overhead in cost of sales. Included within these categories are items such as freight charges, warehousing costs, internal transfer costs and other costs of its distribution network.

Selling, General and Administrative

The Company includes costs not directly related to the manufacturing of its products in the Selling, general and administrative line item within the Consolidated Statements of Comprehensive Income. Included in these expenses are items such as compensation expense, rental expense, warranty expense and travel and entertainment expense.

Income Taxes

Deferred tax assets and liabilities are recognized for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.

The Company's annual effective tax rate is based on income, statutory tax rates and tax planning strategies available in the various jurisdictions the Company operates. Complex tax laws can be subject to different interpretations by the Company and the respective government authorities. Judgment is required in evaluating tax positions and determining our tax expense. Tax positions are reviewed quarterly and tax assets and liabilities are adjusted as new information becomes available.

In evaluating the Company's ability to recover deferred tax assets within the jurisdiction from which they arise, the Company considers all positive and negative evidence. These assumptions require judgment about forecasts of future taxable income.

The Organisation for Economic Cooperation and Development ("OECD") has issued new regulations in connection with a global minimum tax regime ("Pillar Two") which is part of the OECD’s broader plan to mitigate tax base erosion and profit shifting by large multinational enterprises ("MNE"). The Pillar Two regulations are effective for income tax years commencing after January 1, 2024 and will apply to MNEs with revenues of at least EUR 750 million. Under the provisions, qualifying MNE groups would pay a 15 percent minimum tax in each of the jurisdictions in which they operate. The Pillar Two guidance includes transitional Country-by-Country Reporting safe harbor rules which intends to mitigate the complexity and compliance for MNEs to avoid both completing a full global anti-base erosion model and paying a top-up tax for jurisdictions where they are eligible for one of three safe harbor tests: (1) de minimis; (2) simplified effective tax rate; and (3) routine profits. Based on the safe harbor calculations using both the simplified effective tax rate and de minimis rules, management does not currently expect Pillar Two regulations to have a material impact on the Company’s financial results in fiscal year 2025 and beyond.

Stock-Based Compensation

The Company has several stock-based compensation plans, which are described in Note 10 of the Consolidated Financial Statements. Our policy is to expense stock-based compensation using the fair-value based method of accounting for all awards granted.

Earnings per Share

Basic earnings per share (EPS) excludes the dilutive effect of common shares that could potentially be issued, due to the exercise of stock options or the vesting of restricted shares and is computed by dividing net earnings by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed by dividing net earnings by the sum of the weighted-average number of shares outstanding, plus all dilutive shares that could potentially be issued. When in a loss position, basic and diluted EPS use the same weighted-average number of shares outstanding. Refer to Note 9 of the Consolidated Financial Statements for further information regarding the computation of EPS.

Comprehensive Income

Comprehensive income consists of net earnings, foreign currency translation adjustments, unrealized holding gains on securities, unrealized gains on interest rate swap agreement and pension and post-retirement liability adjustments. Refer to Note 15 of the Consolidated Financial Statements for further information regarding comprehensive income.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value

The Company classifies and discloses its fair value measurements in one of the following three categories:

•Level 1 — Financial instruments with unadjusted, quoted prices listed on active market exchanges.

•Level 2 — Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. Financial instrument values are determined using prices for recently traded financial instruments with similar underlying terms and direct or indirect observational inputs, such as interest rates and yield curves at commonly quoted intervals.

•Level 3 — Financial instruments not actively traded on a market exchange and there is little, if any, market activity. Values are determined using significant unobservable inputs or valuation techniques.

See Note 12 of the Consolidated Financial Statements for the required fair value disclosures.

Derivatives and Hedging

The Company calculates the fair value of financial instruments using quoted market prices whenever available. The Company utilizes derivatives to manage exposures to foreign currency exchange rates and interest rate risk. The fair values of all derivatives are recognized as assets or liabilities at the balance sheet date. Changes in the fair value of these instruments are reported within Other (income) expense, net in the Consolidated Statements of Comprehensive Income, or Accumulated other comprehensive loss within the Consolidated Balance Sheets, depending on the use of the derivative and whether it qualifies for hedge accounting treatment.

Gains and losses on derivatives that are designated and qualify as cash flow hedging instruments are recorded in Accumulated Other Comprehensive Loss, to the extent the hedges are effective, until the underlying transactions are recognized in the Consolidated Statements of Comprehensive Income. Derivatives not designated as hedging instruments are marked-to-market at the end of each period with the results included in Consolidated Statements of Comprehensive Income.

See Note 12 of the Consolidated Financial Statements for further information regarding derivatives.

Recently Issued Accounting Standards Not Yet Adopted

~~The~~ASU ~~Company~~2023-07, ~~evaluates~~Segment ~~all~~Reporting ~~Accounting~~(Topic ~~Standards~~280): ~~Updates~~Improvements ~~("ASUs")~~to ~~issued~~Reportable bySegment ~~the~~Disclosures. ~~Financial~~In ~~Accounting~~November ~~Standards~~2023, ~~Board~~the ("FASB") ~~for~~issued ~~consideration~~this ofASU ~~their~~to ~~applicability~~update toreportable ~~our~~segment ~~consolidated~~disclosure ~~financial~~requirements, ~~statements~~primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. WeThis ~~have~~ASU ~~assessed~~is ~~all~~effective ~~ASUs~~for ~~issued~~fiscal ~~but~~years ~~not~~beginning ~~yet~~after ~~adopted~~December 15, 2023, and ~~concluded~~interim ~~that~~periods ~~those~~within ~~not~~fiscal ~~disclosed~~years ~~are~~beginning ~~not~~after ~~relevant~~December to15, ~~the~~2024, ~~Company~~with orearly ~~are~~adoption ~~not~~permitted. ~~expected~~The toCompany ~~have~~is acurrently ~~material~~evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

ASU 2023-09, Income Taxes (Topic 740): Improvements to Tax Disclosures. In December 2023, the FASB issued this ASU which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

We have assessed all ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

2. Revenue from Contracts with Customers

Disaggregated Revenue

The Company’s revenue is comprised primarily of sales of products and installation services. Depending on the type of contract, the method of accounting and timing of revenue recognition may differ. Below, descriptions have been provided that summarize the Company’s different types of contracts and how revenue is recognized for each.

•Single Performance Obligations - these contracts are transacted with customers and include only the product performance obligation. Most commonly, these contracts represent master agreements with independent third party dealers in which a purchase order represents the customer contract, point of sale transactions through the Global Retail segment, as well as customer purchase orders within the Americas Contract and International Contract & Specialty segments. For contracts that include a single performance obligation, the Company records revenue at the point in time when control has transferred to the customer.

•Multiple Performance Obligations - these contracts are transacted with customers and include more than one performance obligation; products, which are shipped to the customer by the Company, and installation and other services, which are primarily fulfilled by independent third-party dealers. For contracts that include multiple performance obligations, the Company records revenue for the product performance obligation at the point in time when control transfers, generally upon transfer of title and risk of loss to the customer. In most cases, the Company has concluded that it is the agent for the installation services performance obligation and as such, the revenue and costs of these services are recorded net within Net sales in the Company’s Consolidated Statements of Comprehensive Income.

In certain instances, entities owned by the Company, rather than independent third-party dealers, perform installation and other services. In these cases, Service revenue is generated by the Company’s entities that provide installation services, and is recognized by the Company over time as the services are provided. For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on relative standalone selling prices.

•Other - these contracts are comprised mainly of alliance fee arrangements, whereby the Company earns revenue for allowing other furniture sellers access to its dealer distribution channel, as well as other miscellaneous selling arrangements. Revenue from alliance contracts are recorded at the point in time in which the sale is made by other furniture sellers through the Company’s sales channel.

Revenue disaggregated by contract type has been provided in the table below:

	Year Ended
(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Net sales:
Single performance obligation
Product revenue	$	3,~~816~~362.56	$	3,~~660~~816.15
Multiple performance obligations
Product revenue	~~254~~251.19		~~265~~254.31
Service revenue	3.46		83.64
Other	1310.13		1213.01
Total	$	43,~~087~~628.14	$	34,~~946~~087.01

The Company internally reports and evaluates products based on the categories Workplace, Performance Seating, Lifestyle, and Other. A description of these categories is included below.

The Workplace category includes products centered on creating highly functional and productive settings for both groups and individuals. This category focuses on the development of products, beyond seating, that define boundaries, support work, and enable productivity.

The Performance Seating category includes products centered on seating ergonomics, productivity, and function across an evolving and diverse range of settings. This category focuses on the development of ergonomic seating solutions for specific use cases requiring more than basic utility.

The Lifestyle category includes products focused on bringing spaces to life through beautiful yet functional products. This category focuses on the development of products that support a way of living, in thoughtful yet elevated ways. The products in this category help create emotive and visually appealing spaces via a portfolio that offers diversity in aesthetics, price, and performance.

Revenue disaggregated by product type and segment has been provided in the table below:


	Year Ended
(In millions)	June 1, 2024		June 3, 2023
Americas Contract:
Workplace	$	1,174.6	$	1,305.8
Performance Seating	399.9		427.0
Lifestyle	229.3		268.7
Other(1)	20.4		24.6
Total Americas Contract	$	1,824.2	$	2,026.1

International Contract & Specialty:
Workplace	$	147.9	$	170.1
Performance Seating	243.8		251.8
Lifestyle	345.1		379.2
Other(1)	195.0		216.2
Total International Contract & Specialty	$	931.8	$	1,017.3

Global Retail:
Workplace	$	13.7	$	83.8
Performance Seating	191.3		210.7
Lifestyle	666.0		747.6
Other(1)	1.4		1.6
Total Global Retail	$	872.4	$	1,043.7

Total	$	3,628.4	$	4,087.1
(1) "Other" primarily consists of uncategorized product sales and service sales.

	Year Ended
(In millions)	June 3, 2023		May 28, 2022
Americas Contract:
Workplace	$	1,305.8	$	1,229.2
Performance Seating	437.8		442.6
Lifestyle	257.9		221.2
Other(1)	24.6		36.1
Total Americas Contract	$	2,026.1	$	1,929.1
International Contract & Specialty:
Workplace	$	170.1	$	143.7
Performance Seating	252.2		242.0
Lifestyle	394.5		348.6
Other(1)	200.5		194.2
Total International Contract & Specialty	$	1,017.3	$	928.5
Global Retail:
Workplace	$	83.8	$	111.5
Performance Seating	210.7		258.2
Lifestyle	747.6		716.8
Other(1)	1.6		1.9
Total Global Retail	$	1,043.7	$	1,088.4
Total	$	4,087.1	$	3,946.0
(1) "Other" primarily consists of uncategorized product sales and service sales.

In the current year, certain products were reclassified within the Performance Seating, Lifestyle, and Other categories based on management's internal reporting of the performance of these product lines. The prior year has been restated to reflect these changes.

Refer to Note 14 of the Consolidated Financial Statements for further information related to our segments.

Sales by geographic area are based on the location of the customer. Long-lived assets consist of long-term assets of the Company, excluding financial instruments, deferred tax assets and long-term intangibles. The following is a summary of geographic information for the years indicated. Individual foreign country information is not provided as none of the individual foreign countries in which the Company operates are considered material for separate disclosure based on quantitative and qualitative considerations.

Year Ended

(In millions)

June 31, ~~2023~~2024

~~May~~June 283, ~~2022~~2023

May 2928, ~~2021~~2022

Net sales:

United States

2,~~918~~570.0

2,~~818~~918.40

12,~~728~~818.94

International

1,~~169~~058.14

1,~~127~~169.61

~~736~~1,127.26

Total

43,~~087~~628.14

34,~~946~~087.01

23,~~465~~946.10

Long-lived assets:

United States

~~518~~480.79

~~531~~518.27

~~311~~531.12

International

~~135~~121.60

~~144~~135.96

70144.69

Total

~~654~~601.39

~~676~~654.13

~~381~~676.71

The Company approximates that no single dealer accounted for more than 4% of the Company's net sales in the fiscal year ended June 3, 2023. The Company estimates that the largest single end-user customer accounted for $174.9 million, $114.4 million and $113.0 million of the Company's net sales in fiscal 2023, 2022 and 2021, respectively. This represents approximately 4% of the Company's net sales in fiscal 2023, 3% in 2022, and 5% in 2021. The Company's ten largest customers in the aggregate accounted for approximately 14% of net sales in fiscal 2023, 11% of net sales in fiscal 2022, and 17% of net sales in fiscal 2021. 64

The Company approximates that no single dealer accounted for more than 3% of the Company's net sales in the fiscal year ended June 1, 2024. The Company estimates that the largest single end-user customer accounted for $180.3 million, $174.9 million and $114.4 million of the Company's net sales in fiscal 2024, 2023 and 2022, respectively. This represents approximately 5% of the Company's net sales in fiscal 2024, 4% in 2023, and 3% in 2022. The Company's ten largest customers in the aggregate accounted for approximately 16% of net sales in fiscal 2024, 14% of net sales in fiscal 2023, and 11% of net sales in fiscal 2022.

Contract Assets and Contract Liabilities

The Company records contract assets and contract liabilities related to its revenue generating activities. Contract assets include certain receivables from customers that are unconditional as all performance obligations with respect to the contract with the customer have been completed. These amounts represent trade receivables and they are recorded within Accounts receivable, net in the Consolidated Balance Sheets.

Contract assets also include amounts that are conditional because certain performance obligations in contracts with customers are incomplete as of the balance sheet date. These contract assets generally arise due to contracts with customers that include multiple performance obligations, e.g., both the product that is shipped to the customer by the Company, as well as installation services provided by independent third-party dealers. For these contracts, the Company recognizes revenue upon satisfaction of the product performance obligation. These contract assets are included in Unbilled accounts receivable in the Consolidated Balance Sheets until all performance obligations in the contract with the customer have been satisfied.

Contract liabilities represent deposits made by customers before the satisfaction of performance obligation and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer based on the terms of the contract, the liability for the customer deposit is relieved and revenue is recognized. These customer deposits are included within Customer deposits in the Consolidated Balance Sheets. During the twelve months ended June 31, ~~2023~~2024, the Company recognized net sales of $~~117~~82.72 million related to customer deposits that were included in the balance sheet as of ~~May~~June 283, ~~2022~~2023.

3. Acquisitions and Divestitures

Knoll, Inc.

On July 19, 2021, the Company completed its acquisition of Knoll, a leader in the design, manufacture, marketing, and sale of high-end furniture products and accessories for workplace and residential markets. The Company has included the financial results of Knoll in the consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition, which included financial advisory, legal, proxy filing, regulatory and financing fees, were approximately $30.0 million for the twelve months ended May 28, 2022 and were recorded in general and administrative expenses.

Under the terms of the Agreement and Plan of Merger, each issued and outstanding share of Knoll common stock (excluding shares exercising dissenters rights, shares owned by Knoll as treasury stock, shares owned by the deal parties or their subsidiaries, or shares subject to Knoll restricted stock awards) was converted into a right to receive 0.32 shares of Herman Miller, Inc. (now MillerKnoll, Inc.) common stock and $11.00 in cash, without interest. The acquisition date fair value of the consideration transferred for Knoll was approximately $1,887.3 million, which consisted of the following (in millions, except share amounts):

	Knoll Shares	Herman Miller, Inc (now MillerKnoll, Inc.) Shares Exchanged	Fair Value
Cash Consideration:
Shares of Knoll Common Stock issued and outstanding at July 19, 2021	49,444,825		$	543.9
Knoll equivalent shares for outstanding option awards, outstanding awards of restricted common stock held by non-employee directors and outstanding awards of performance units held by individuals who are former employees of Knoll and remain eligible to vest at July 19, 2021	184,857		1.4
Total number of Knoll shares for cash consideration	49,629,682
Shares of Knoll Preferred Stock issued and outstanding at July 19, 2021	169,165		254.4
Consideration for payment to settle Knoll's outstanding debt			376.9
Share Consideration:
Shares of Knoll Common Stock issued and outstanding at July 19, 2021	49,444,825
Knoll equivalent shares for outstanding awards of restricted common stock held by non-employee directors and outstanding awards of performance units held by individuals who are former employees of Knoll and remain eligible to vest at July 19, 2021	74,857
Total number of Knoll shares for share consideration	49,519,682	15,843,921	688.3
Replacement Share-Based Awards:
Outstanding awards of Knoll Restricted Stock and Performance units relating to Knoll Common Stock at July 19, 2021			22.4
Total acquisition date fair value of consideration transferred			$	1,887.3

The aggregate cash paid in connection with the Knoll acquisition was $1,176.6 million. MillerKnoll funded the acquisition through cash on-hand and debt proceeds, as described in Note 6. Short-Term Borrowings and Long-Term Debt.

~~Outstanding~~The ~~unvested~~transaction ~~restricted~~was ~~stock~~accounted ~~awards,~~for ~~performance~~as ~~stock awards, performance stock units, and restricted stock units with~~ a ~~preliminary~~business ~~estimated~~combination ~~fair~~which ~~value~~requires ofthat ~~$53.4~~assets ~~million~~and ~~automatically~~liabilities ~~converted~~assumed ~~into~~be ~~Company~~recognized ~~awards.~~at Oftheir ~~the total~~ fair value, ~~$22.4~~as ~~million was allocated to purchase consideration and $31.0 million was allocated to future services and will be expensed over the remaining service periods on a straight-line basis. Per the terms~~ of the ~~converted awards any qualifying termination within the twelve months subsequent to the~~ acquisition ~~will result in accelerated vesting and related recognition of expense~~date.

The transaction was accounted for as a business combination which requires that assets and liabilities assumed be recognized at their fair value as of the acquisition date. The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition:

(In millions)	Fair Value
Cash	$	88.0
Accounts receivable	82.3
Inventories	219.9
Other current assets	29.2
Property and equipment	296.5
Right-of-use assets	202.7
Intangible assets	756.6
Goodwill	903.5
Other noncurrent assets	25.1
Total assets acquired	$	2,603.8
Accounts payable	144.0
Other current liabilities	153.1
Lease liabilities	177.8
Other liabilities	241.6
Total liabilities assumed	716.5
Net Assets Acquired	$	1,887.3

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to the assembled workforce of Knoll and anticipated operational synergies. Goodwill related to the acquisition was allocated to each of the reporting segments with a total value as of the opening balance sheet date of $903.5 million. Goodwill arising from the acquisition is not expected to be deductible for tax reporting purposes.

Certain measurement period adjustments were made during the twelve months ended May 28, 2022 to the preliminary fair values resulting in a net decrease to goodwill of $22.4 million primarily related to adjustments to the value of certain liabilities acquired and the fair value of intangible assets acquired. The allocation of purchase price was completed in the fourth quarter of fiscal year 2022.

The following table summarizes the acquired identified intangible assets, valuation method employed, useful lives and fair value, as determined by the Company as of the acquisition date:

(In millions)

Valuation Method

Useful Life (years)

Fair Value

Backlog

Multi-Period Excess Earnings

Less than 1 Year

27.6

Trade name - indefinite lived

Relief from Royalty

Indefinite

418.0

Trade name - amortizing

Relief from Royalty

5-10 Years

14.0

Designs

Relief from Royalty

9-15 years

40.0

Customer Relationships

Multi-Period Excess Earnings

2-15 years

257.0

Total

756.6

Contract Furniture Dealership Divestiture

On January 31, 2022, the Company completed the sale of a wholly-owned contract furniture dealership in Toronto, Canada for cash consideration of $2.8 million. A pre-tax gain of $2.0 million was recognized as a result of the sale within Selling, general and administrative within the Consolidated Statements of Comprehensive Income.

4. Inventories

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Finished goods and work in process	$	~~357~~314.23	$	~~441~~357.62
Raw materials	~~130~~114.23		~~145~~130.72
Total	$	~~487~~428.46	$	~~587~~487.34

Inventories are primarily valued using the first-in first-out method.

6665

5. Investments in Nonconsolidated Affiliates

The Company has ~~certain~~an ~~investments~~investment in ~~entities~~an entity that ~~are~~is accounted for using the equity method (“nonconsolidated ~~affiliates~~affiliate”). The ~~investments~~investment ~~are~~is included in Other noncurrent assets in the Consolidated Balance Sheets and the equity earnings are included in Equity (loss) earnings from nonconsolidated ~~affiliates~~affiliate, net of tax in the Consolidated Statements of Comprehensive Income. Refer to the tables below for the investment ~~balances~~balance that ~~are~~is included in the Consolidated Balance Sheets and for the equity earnings that are included in the Consolidated Statements of Comprehensive Income.

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Investments in nonconsolidated affiliates	$	8.5	$	9.9
Investments in nonconsolidated affiliate	$	2.2	$	8.5

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023		May 2928, ~~2021~~2022
Equity (loss) earnings from nonconsolidated affiliates, net of tax	$	(0.8)	$	—	$	0.3
Equity (loss) earnings from nonconsolidated affiliate, net of tax	$	(0.4)	$	(0.8)	$	—

The Company had an ownership interest in ~~two~~one nonconsolidated ~~affiliates~~affiliate at June 31, ~~2023~~2024. Refer to the Company's ownership percentages shown below:

Ownership Interest	June 31, ~~2023~~2024	~~May~~June 283, ~~2022~~2023
Kvadrat Maharam Pty Limited	50.0%	50.0%
Global Holdings Netherlands B.V. (Maars)	48.2%	48.2%

Kvadrat Maharam

The Kvadrat Maharam Pty Limited nonconsolidated affiliate is a distribution entity engaged in selling decorative upholstery, drapery and wall covering products.

Maars

On August 31, 2018, the Company acquired 48.2% of the outstanding equity of Global Holdings Netherlands B.V., which owns 100% of Maars Holding B.V. ("Maars”), a Harderwijk, Netherlands-based worldwide leader in the design and manufacturing of interior wall solutions. The Company acquired its 48.2% ownership interest in Maars for approximately $6.1 million in cash. The entity is accounted for using the equity method of accounting as the Company has significant influence, but not control, over the entity.

As of the August 31, 2018 acquisition date, the Company's investment value in Maars was $3.1 million more than the Company's proportionate share of the underlying net assets. This amount represented the difference between the price that the Company paid to acquire 48.2% of the outstanding equity and the carrying value of the net assets of Maars. Of this difference, $2.7 million iswas ~~being~~ amortized over the remaining useful lives of the assets, while $0.4 million iswas considered a permanent difference.

In the fourth quarter of fiscal 2023, the Company determined the fair value was less than the carrying value and concluded the impairment was other-than-temporary and recorded an impairment charge of approximately $1.0 million within Other income and expense in the Consolidated Statements of Comprehensive Income. At June 3, 2023, the Company's investment value in Maars is $1.0 million more than the Company's proportionate share of the underlying net assets, the total of which is being amortized over the remaining useful lives of the assets.

On October 30, 2023, the Company sold its 48.2% investment in Global Holdings Netherlands B.V. for total purchase consideration of $5.9 million. As part of this transaction, we received cash proceeds of $3.5 million at closing, a $1.4 million receivable under a vendor loan, and $0.9 million of cash held in an escrow account to secure the representations and warranties made to the purchaser. As a result of the sale, a loss of $0.4 million was recorded in Equity (loss) income from nonconsolidated affiliates, net of tax during the twelve months ended June 1, 2024.

Transactions with Nonconsolidated Affiliates

Sales to and purchases from nonconsolidated affiliates were as follows for the periods presented below:

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023		May 2928, ~~2021~~2022
Sales to nonconsolidated affiliates	$	2.81	$	02.78	$	1.0.7
Purchases from nonconsolidated affiliates	$	—	$	~~0.6~~—	$	0.36

Balances due to or due from nonconsolidated affiliates were as follows for the periods presented below:

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Receivables from nonconsolidated affiliates	$	0.53	$	0.35
Payables to nonconsolidated affiliates	$	—	$	—

6. Short-Term Borrowings and Long-Term Debt

Long-term debt consisted of the following obligations:

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Syndicated revolving line of credit, due July 2026	$	~~426~~390.70	$	~~413~~426.07
Term Loan A, 7.0179%, due July 2026	370.0		390.0
Term Loan A, 7.1937%, due July 2026	345.0		370.0
Term Loan B, 7.2679% due July 2028	615.6		621.8
Term Loan B, 7.4437% due July 2028	609.4		615.6
Supplier financing program	2.10		32.1
Total debt	$	1,414.4	$	1,427.9
Finance lease liability	1.4		—
Less: Unamortized discount and issuance costs	(15.9)		(19.4)
Total debt	$	1,347.8	$	1,414.4
Less: Current debt	(33.4)		(29.3)
Less: Unamortized discount and issuance costs	(12.6)		(15.9)
Long-term debt	$	1,365.1	$	1,379.2
Less: Current debt	(43.5)		(33.4)
Long-term debt	$	1,291.7	$	1,365.1

In connection with the acquisition of Knoll, in July 2021, the Company entered into a credit agreement that provided for a syndicated revolving line of credit and two term loans. The revolving line of credit provides the Company with up to $725 million in revolving variable interest borrowing capacity that matures in July 2026, replacing the previous $500 million syndicated revolving line of credit. The term loans consist of a five-year senior secured term loan "A" facility with an aggregate principal amount of $400 million and a seven-year senior secured loan "B" facility with an aggregate principal amount of $625 million, the proceeds of which were used to finance a portion of the cash consideration for the acquisition of Knoll, for the repayment of certain debt of Knoll, and to pay fees, costs, and expenses related thereto. In January 2023, the ~~company~~Company entered into an Amendment to the credit agreement which transitioned the benchmark rate from LIBOR to the Secured Overnight Financing Rate ("SOFR") for U.S. dollar borrowings. SOFR is the recommended risk-free reference rate of the Federal Reserve Board and Alternative Reference Rates Committee, as defined within the credit agreement. The indebtedness incurred under the revolving line of credit and term loans is secured by substantially all of the Company’s tangible and intangible assets, including, without limitation, the Company’s intellectual property. The Company’s direct and indirect wholly-owned domestic subsidiaries have also guaranteed the obligations of the Company and the foreign borrowers under the revolving line of credit and term loans and pledged substantially all of their tangible and intangible assets as security for their obligations under such guarantee.

During 2022, the Company repaid $64 million of private placement notes due May 20, 2030, and recognized a loss of approximately $13.4 million on extinguishment of the debt , which represented the premium on early redemption. The Company made principal payments on term loans "A" and "B" during the year ended June 3 1, ~~2023~~2024 in the amount of $2025.0 million and $6.3 million, respectively and during the year ended ~~May 28~~June 3, ~~2022~~2023 in the amount of $1020.0 million and $36.13 million, respectively.

Prior to July 2021, the Company's syndicated revolving line of credit provided the Company with up to $500 million in revolving variable interest borrowing capacity and included an "accordion feature" allowing the Company to increase, at its option and subject to the approval of the participating banks, the aggregate borrowing capacity of the facility by up to $250 million. Outstanding borrowings would bear interest at rates based on the prime rate, federal funds rate, LIBOR or negotiated rates as outlined in the agreement. Interest was payable periodically throughout the period if borrowings were outstanding. The Company paid off the outstanding balance due on the syndicated revolving line of credit during the first quarter of 2022.

Available borrowings under the syndicated revolving line of credit were as follows for the periods indicated:

(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Syndicated revolving line of credit borrowing capacity	$	725.0	$	725.0
Less: Borrowings under the syndicated revolving line of credit	~~426~~390.70		~~413~~426.07
Less: Outstanding letters of credit	1412.17		1514.41
Available borrowings under the syndicated revolving line of credit	$	~~284~~322.23	$	~~296~~284.62

The senior secured revolving credit facility restricts, without prior consent, the Company's borrowings, capital leases, investments, liens, mergers, consolidations, restricted payments, and the sale of certain assets. In addition, for the credit facility and Term Loan A, the Company has agreed to maintain a financial performance ratio, a maximum first lien secured net leverage ratio covenant which is measured by the ratio of first lien debt (less unrestricted cash) to trailing four quarter adjusted consolidated EBITDA (as defined in the credit agreement) and is required to be less than 4.25:1 for the trailing four quarter periods ending November 21, 2021, and the three immediately succeeding fiscal quarters, then 4.00:1 for the next four fiscal quarters, and 3.75:1 at the end of each fiscal quarter thereafter, except that the Company may elect, under certain conditions, a 67

68The senior secured revolving credit facility restricts, without prior consent, the Company's borrowings, capital leases, investments, liens, mergers, consolidations, restricted payments, and the sale of certain assets. In addition, for the Revolving line of credit and Term Loan A, the Company has agreed to maintain a financial performance ratio, a maximum first lien secured net leverage ratio covenant which is measured by the ratio of first lien debt (less unrestricted cash) to trailing four quarter adjusted consolidated EBITDA (as defined in the credit agreement) and is required to be less than 4.25:1 for the trailing four quarter periods ending November 21, 2021, and the three immediately succeeding fiscal quarters, then 4.00:1 for the next four fiscal quarters, and 3.75:1 at the end of each fiscal quarter thereafter, except that the Company may elect, under certain conditions, a step-up in the covenant level of 0.50 for the four subsequent trailing four quarter periods. Adjusted EBITDA is generally defined in the credit agreement as EBITDA adjusted by certain items which include non-cash share-based compensation, non-recurring restructuring costs and extraordinary items. At June 1, 2024 the Company was in compliance with these restrictions and performance ratios.

step-up in the covenant level of 0.50 for the four subsequent trailing four quarter periods. Adjusted EBITDA is generally defined in the credit agreement as EBITDA adjusted by certain items which include non-cash share-based compensation, non-recurring restructuring costs and extraordinary items. At June 3, 2023 the Company was in compliance with these restrictions and performance ratios.

On May 20, 2020, the Company entered into a third amendment to its existing Private Shelf Agreement, dated December 14, 2010, as amended (together with the third amendment, the "Agreement"), between the Company and PGIM, Inc. (formerly known as Prudential Investment Management, Inc.) and certain of its affiliates (collectively, “Prudential”). The Agreement provided for a $150.0 million revolving facility, which included $50.0 million of unsecured senior notes that were repaid on March 1, 2021 (the "Existing Notes") and an additional $50.0 million aggregate principal amount of unsecured senior notes issued on May 20, 2020 (the "2020 Notes"). The Notes and facility were paid off with the new revolver and term loans entered in connection with the acquisition of Knoll in July 2021.

Annual maturities of debt for the five fiscal years subsequent to June 31, ~~2023~~2024 are as shown in the table below.

(In millions)
2024	$	33.4
2025	$	43.6
2025	41.3
2026	46.8
2026	46.2
2027	666.4
2027	703.0
2028	6.4
2028	6.2
2029	584.6
Thereafter	~~584.3~~—
Total	$	1,~~414~~347.48

Supplier Financing Program

The Company has an agreement with a third-party financial institution that allows certain participating suppliers the ability to finance payment obligations from the Company. Under this program, participating suppliers may finance payment obligations of the Company, prior to their scheduled due dates, at a discounted price to the third-party financial institution.

The Company has lengthened the payment terms for certain suppliers that have chosen to participate in the program. As a result, certain amounts due to suppliers have payment terms that are longer than standard industry practice and as such, these amounts have been excluded from "Accounts payable" in the Consolidated Balance Sheets as the amounts have been accounted for by the Company as a current debt, within "Short-term borrowings and current portion of long-term debt". As of June 31, ~~2023~~2024, the liability related to the supplier financing program iswas $2.10 million.

7. Leases

The Company has leases for retail stores, showrooms, manufacturing facilities, warehouses and vehicles, which expire at various dates through 2042. Certain lease agreements include contingent rental payments based on per unit usage over a contractual amount and others include rental payments adjusted periodically for inflationary indexes.

The Company's lease costs recognized in the Consolidated Statement of Income consist of the following:

	Year Ended		Year Ended
(In millions)	June 31, ~~2023~~2024		~~May~~June 283, ~~2022~~2023
Operating lease costs	$	9994.31	$	8999.43
Short-term lease costs	117.21		1011.42
Variable lease costs	1215.09		1012.30
Total	$	~~122~~117.51	$	~~110~~122.15

Included in the Company's Right-of-use assets and Lease liabilities are variable lease costs, not included in the table above, for raw material purchases under certain supply arrangements that the Company has determined to meet the definition of a lease: 68

	Year Ended		Year Ended
	June 3, 2023		May 28, 2022
Variable lease costs	$	96.2	$	95.6

In the fourth quarter of fiscal 2024 the decision was made to cease the use of certain leased locations resulting in impairment charges of $5.5 million recognized for the right of use assets associated with these locations. These charges are included within Restructuring expense in the Consolidated Statements of Comprehensive Income.

During fiscal 2023, the Company determined it was more likely than not that the fair value of certain right of use assets within the Global Retail reporting unit, specifically Fully, were below their carrying value and assessed these assets for impairment. As a result of this assessment, the Company recorded an impairment of the associated right of use assets of $6.1 million in the Consolidated Statements of Comprehensive income.

69The Company has financing lease agreements that expire from fiscal 2025 to fiscal 2030. The leases have initial lease terms that range from 3 to 6 years with some containing renewal options.

aThe ~~result~~undiscounted ofannual ~~this~~future ~~assessment,~~minimum ~~the~~lease ~~Company~~payments ~~recorded~~related anto ~~impairment~~the Company's right-of-use ~~$6.1~~assets ~~million~~are insummarized ~~the~~by ~~Consolidated~~fiscal ~~Statements~~year ofin ~~Comprehensive~~the ~~income.~~following table:

At June 3, 2023, the Company has no financing leases. The undiscounted annual future minimum lease payments related to the Company's right-of-use assets are summarized by fiscal year in the following table:


(In millions)
2025	$	83.9
2026	88.8
2027	75.4
2028	67.5
2029	59.3
Thereafter	172.7
Total lease payments*	$	547.6
Less interest	120.0
Present value of lease liabilities	$	427.6

(In millions)
2024	$	81.5
2025	92.3
2026	79.1
2027	65.4
2028	58.5
Thereafter	185.0
Total lease payments*	$	561

Filing Compare · MILLERKNOLL, INC.