Q3 2024 MillerKnoll Inc Earnings Call

Yeah.

Okay.

Good evening, and welcome to MillerKnoll's quarterly earnings conference call. As a reminder, this call is being recorded.

Speaker Change: Good evening and welcome to Miller Knowles quarterly earnings Conference call. As a reminder, this call's being recorded I would now like to introduce your host for today's conference Vice President of Investor Relations, Kerala Mengele Amy.

Operator: I would now like to introduce your host for today's conference, Vice President of Investor Relations, Carola Mengolini.

Carola Mengolini: Good evening, and welcome to MillerKnoll's third quarter fiscal 2024 conference call. I am joined by Andy Owen, Chief Executive Officer, and Jeff Stutz, Chief Financial Officer. Also available during the Q&A session is John Michael, President of America's Contract, and Debbie Propst, President of Global Retail. Before I turn the call over to Andy, please remember our safe harbor regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties, and other factors, which may cause actual results to be different from those expressed or implied.

Speaker Change: Good evening and welcome to million dollars third quarter of fiscal 'twenty 'twenty Four conference call I am joined by Andy Oh, and Chief Executive Officer, and Jeff Stutz, Chief Financial Officer also available during the Q&A session is John Michael precedent of Amerigas contract and Debbie probes.

Speaker Change: President of global Marine tape.

Speaker Change: Before I turn the call over 'twenty. Please remember our safe Harbor regarding forward looking information.

Speaker Change: During the call management May discuss information that is forward looking and involve known and unknown risks uncertainties and other factors, which may cause the actual results to be different than those expressed or implied.

Carola Mengolini: Please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release. The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We may also refer to certain non-GAAP financial metrics, which are reconciled and described in our press release posted on our investor relations website at MillerKnoll.com. With that, I will turn the call over to Andy.

Speaker Change: Please evaluate the forward looking information in the context of these factors we tried to tell you in today's press release.

Speaker Change: The forward looking statements as of today, and we assume no obligation to update or supplement these statements.

Speaker Change: We may also refer to certain non-GAAP financial metrics, which are reconciled and described in our press release posted on our Investor Relations website at <unk> Dot com with that I will turn the call over to Andi, Andi think gorilla and good evening, everyone well this past quarter presented a challenge.

Andrea R. Owen: Thanks, Carola, and good evening, everyone. While this past quarter presented its challenges, we're proud to highlight our resilience and strategic focus. Despite facing a lower volume of orders and sales, we maintained a steadfast commitment to enhancing our business operations. Our efforts yielded significant results as we successfully improved gross margins across all business segments, showcasing our ability to adapt and thrive in dynamic market conditions. MillerKnoll is an agile company. We have implemented several programs across our contract and retail business to boost demand, while also putting in place restructuring measures to better align our operating costs with the evolving economic landscape. With our MillerKnoll dealer network firmly established in the U.S., we've turned our focus now to showrooms, studios, and tools that make it easier to create design solutions for customers. Our showroom strategy is anchored in having fewer and more robust MillerKnoll design centers in targeted cities around the world.

Andi: We're proud to highlight our resilience and strategic focus despite taking a lower volume of orders and sales we maintained a steadfast commitment to enhancing our business operations our efforts yielded significant results.

Andi: It's really improved gross margins across all business segments, showcasing our ability to adapt and thrive and dynamic market conditions.

Andi: No as an agile company, we have implemented several programs across our contract and retail business to boost demand while also putting in place restructuring measures to better align our operating costs with the evolving economic landscape.

Andi: Whatever melano dealer network firmly established in the U S. We've turned our focus down to showrooms studios and tools that make it easier to create design solutions for customers.

Andi: Our showroom strategy is anchored in having fewer and more robust milrinone design centers and targeted cities around the world, we're bringing our brands together so that customers can design partners can experience the full breadth of our offerings in one location.

Andrea R. Owen: We're bringing our brands together so that customers and design partners can experience the full breadth of our offering in one location. To this end, we will combine our showrooms in most markets, and we will also invest more heavily in dealer showrooms and dealer programs, especially in markets without a corporate showroom. This work is already underway in several major U.S. markets, namely Chicago, Washington, D.C., and the greater Los Angeles area. This follows showroom co-location enhancements that we previously announced in New York City, Toronto, and London. Simultaneously, in North America alone, more than 40 dealer showroom refreshes are in progress with many more in planning. At DWR, we recently opened a new concept studio in the San Francisco Design District.

Andi: And we will combine our showrooms in most markets and we will also invest more heavily in dealer showrooms and doing programs, especially in markets without a corporate showroom presence.

Andi: This work is already underway in several major U S markets, namely Chicago, Washington D C in the greater Los Angeles area.

Andi: Hello, showroom Colocation enhancements that we previously announced in New York City, Toronto, and London simultaneously in North America, let alone more than 40 dealer showroom refreshes that are in progress with many more implant.

Andi: And do you have you are you recently opened a new concept to you in the San Francisco to find district has faced introduces our products in a new way showcasing rotating galleries and interactive experience.

Andrea R. Owen: The space introduces our products in a new way, showcasing rotating galleries and interactive exhibits. We understand that enhancing our environment yields great results, and we've been encouraged by the increased customer interest and foot traffic during this tour. Across our retail experience, we know that most orders include a customer touch point in one of our stores. By enhancing these spaces in strategic locations, we believe it will continue to build market share, especially as macroeconomic conditions become more favorable. We are also making significant progress across our technology platform. This past January, we launched our Program Portal Experience.

Andi: We understand that enhancing our environment feels great results and we've been encouraged by the increased customer interest in foot traffic in that store.

Andi: Across our retail experience, we know that most orders include a customer touch point and one of our stores by enhancing these spaces in a strategic location. We believe it will continue to build market share, especially as macroeconomic conditions become more favorable.

Andi: We're also making significant progress across our technology platform.

Andi: Past January we launched our program portal experience.

Andrea R. Owen: These are digital hubs that serve as a singular place for clients, dealers, and our architecture and design partners to access projects and product information in one place, providing a forum for collaboration and streamlining processes. Similarly, we've launched augmented reality capabilities on retail and contract websites as a supplement to our highly functional 3D configuring. We've seen that customers who use these tools have a higher conversion rate and are faster to add products. These programs reflect the confidence we have in MillerKnoll's long-term value and the opportunities ahead. However, we are relentless, and we understand that, while encouraging, these initiatives and organizational enhancements are stepping stones to achieving our goals.

Andi: Digital hubs, which serves as senior wouldn't place for clients dealers and our architecture and design partners to access project and product information in one place, providing a forum for collaboration and streamline processes.

Andi: Similarly, we've watched augmented reality capabilities on retail and contract website as a supplement to our highly functional three D. Configure eaters we've.

Andi: We've seen that customers, who use these tools have a higher conversion rate in our faster to add products to the cart.

Andi: These programs reflect the confidence we have in the windows long term value and the opportunities ahead. However, we are realist I mean understand that while encouraging these initiatives and organizational enhancements are stepping stones to achieving our goals existing demand pressures, including the elevated cost of capital here in North America are affecting the housing and office space.

Andrea R. Owen: Existing demand pressures, including the elevated cost of capital here in North America, are affecting the housing and office space markets and slowing the decisions related to capital expenditure. This is taking a toll on the short-term results of our business. To match the current demand environment, this quarter, we implemented targeted workforce reductions and realigned our leadership team against our different business segments and geographic areas. These events will have a meaningful impact on our SG&A cost structure. Jeff will share more details on this later.

Andi: Market falling into decisions related to capital expenditures. This is taking a toll on the short term results of our business to match. The current demand environment. This quarter, we implemented targeted workforce reductions and realigned our leadership team against our different business segments and geographic areas. Even if this will have a meaningful impact on our SG&A cost structure.

Andi: Jeff will share more details on this later.

Andrea R. Owen: For America's business, while the third quarter is usually a softer period, the step-up in activity that customarily comes to the end of the quarter did not materialize as expected. Our team was fast to act, however, focusing on price optimization and launching a series of initiatives to help our clients make decisions and, therefore, stimulate demand. We continue to see leading indicators trending positively. Client requests for mock-ups are up over 20% year-over-year, and contract activations and pricing requests are up over 30% in Q3. This quarter, we are very pleased to report growth across our international contract business as we continue to transition legacy Herman Miller dealers to full MillerKnoll dealers. This transition not only enhances the product portfolio of our existing dealerships but also involves legacy dealers opening newly branded and furnished MillerKnoll showrooms, thereby enhancing our market presence. Furthermore, we also have aggressive plans underway to bring NOL to new markets throughout.

Andi: Primarily because of the third quarter is usually a softer period. This type of an activity that customarily post or the end of the quarter did not materialize as expected. Our team was fast act, however, focusing on price optimization and launching a series of initiatives to help our clients make decisions and therefore coke demand, we continue to see leading indicators trending.

Andi: Positively client requests for Mark I'm, sorry, up over 20% year over year and contract Activations and pricing requests are up over 30% in Q3.

Andi: We were very pleased to report growth across our international contract business as we continue to transition legacy Herman Miller dealers to full Millard all dealers. This transition not only enhances our product portfolio of our existing dealerships, but also involves legacy dealers opening newly branded and furnished vital showrooms, thereby enhancing our market presence.

Andi: Furthermore, we also have aggressive plans underway to bring node new markets throughout Europe.

Andrea R. Owen: Our network around the globe is unmatched in reach, and we are in a position to deliver designs for these regions as demand starts growing. Similarly, as macroeconomic pressures ease, we anticipate a release of pent-up retail demand and are preparing ourselves to meet this interest. Throughout our retail organization, we maintain a strong focus on inventory management and optimizing our product assortment. We've accelerated the introduction of more than 100 new styles to Design Within Reach, adding Hay, Muto, and Geiger products, introducing new DWR collections, and expanding the assortment from our strategic third-party vendors, as well as building out the new offering through additional finish and materials options.

Andi: Our network around the globe, it's unmatched in reach and we were in a place to deliver designs for these regions as demand starts growing.

Similarly, as macroeconomic pressures ease, we anticipate releasing pent up retail demand and are preparing ourselves to meet the interest.

Andi: So about a retail organization, we maintain a strong focus on inventory management and optimizing our product assortment.

Andi: We've accelerated the introduction of more than 100, new styles to design within reach adding hey, hutto and Geiger products, introducing new WR collections and expanding assortment from our strategic third party vendors as well as building out the note offering through additional finished and material options.

Andrea R. Owen: Furthermore, we've expanded our design services, which has resulted in an increase in the penetration of orders from design services, as well as fewer returns. But right now, we are at an 11-year low in the luxury housing market, and our retail and specialty businesses track closely with that market. New home movers spend significantly more than the average.

Andi: Furthermore, we have expanded our design services, which has resulted in increasing the penetration of orders and design services.

Andi: Well as fewer returns.

Andi: Right now we're at 11, you're allowed when the luxury housing market and our retail and specialty business is tracked closely but that market new home universe and significantly more than the average well continue to watch that right because they have the potential to move in our favor. This year when they do we are prepared to capture the wins.

Andrea R. Owen: We'll continue to watch fed rates as they have the potential to move in our favor this year, and when they do, we are prepared to capture the win. Over the next few months, we will have exciting and significant opportunities to connect with our key clients around the globe and share the best of our collective with our core audiences at Salone in Milan and Design Days in Chicago. These are moments for us to visually demonstrate the forward-thinking, innovative spirit that will carry us into the future while establishing meaningful connections. Ahead of these events, our Research and Insights team is conducting seminars in over 40 cities across three continents, sharing actionable insights with organizations on navigating changes in the way we work and adapting their spaces to our evolving world.

Andi: Over the next few months people have exciting and significant opportunities to connect with their key plants around the globe and show the best of our collective with her core audiences that somebody in the lungs and design days in Chicago. These are moments for us to visually demonstrates a forward thinking and if he just spirit that will carry us to the future of all establishing meaningful connections how do you deal with that.

Andi: Our research and insights team is conducting seminars in over 40 cities across three continents sharing actionable insights with organizations and navigating changes in the way, we work and adapting your space into or evolving world.

Andi: Yeah.

Andrea R. Owen: We're highlighting several successful project profiles in the upcoming launch of season four of our About Place podcast. As companies navigate change and invest in their space, they continue to turn to us as a leader for our experienced, data-based perspective on designing for tomorrow. Our industry has a once-in-a-lifetime opportunity to redefine how we think about spaces for decades to come. We have a chance right now to push the spaces where we live and work to better support individual wellness, productivity, and a sense of belonging. And when I look across our collective, there is no team more capable of rising to this occasion than us.

Andi: We're highlighting several successful project profiles and the upcoming launch of season four of our about place podcast.

Andi: Companies navigate change and invest in their space and continue to turn to us as the leader for our experienced database perspective on defining for tomorrow.

Andi: Our industry husband once in a lifetime opportunity to redefine how we think about spaces for decades to come we have a chance right now to push the spaces, where we live and work better support individual wellness productivity in a sense of belonging and when I look across our collective there's no team more capable if I can do education yourself against.

Andrea R. Owen: We are focused and confident in the hard work we're doing right now. As always, I thank you for your continued support of MillerKnoll, and now I'll pass it on to Jeff for a deeper dive into this quarter's numbers.

Andi: I'm confident in the hard work, we're doing right now and as always thank you for your continued support and I look at all and now I'll pass it onto jobs for a deeper dive into this quarter's numbers.

Jeffrey M. Stutz: Thanks Andy. Good evening, everyone. This afternoon, we shared our third quarter results, and I'm pleased to announce that we have achieved adjusted earnings per share of 45 cents, in line with our guidance, despite softer-than-expected revenue. The robust profitability we demonstrated this quarter showcases the resilience of our gross margin profile and underscores the efforts of our teams in protecting our economy. We delivered a consolidated gross margin of 38.6%, which improved more than 450 basis points over the prior year This was our fifth consecutive quarter of year-over-year improvement in the adjusted gross margin. Improved operational efficiency, moderating input and delivery costs, and incremental pricing benefits were the primary drivers, all of which aligned with the themes we have consistently communicated as our focus over the past several quarters. Furthermore, these actions were complemented by disciplined operating expense management and the ongoing benefit of our Acquisition Synergy Program. As Andy mentioned, we took further steps this quarter aimed at improving the efficiency of our selling, general, and administrative functions. This resulted in a targeted reduction in our management work.

Jobs: Thanks, Andy and good evening everyone.

Jobs: So definitely we shared our third quarter results and I'm pleased to announce that we have achieved adjusted earnings per share of <unk> 45 says in line with our guidance despite softer than expected revenue.

Jobs: Our robust profitability, we demonstrated this quarter showcases the resilience of our gross margin profile.

Jobs: Underscores the efforts of our teams and protecting it.

Jobs: We delivered consolidated gross margin of 38, 6%, which improved more than 450 basis points over the prior year.

Jobs: As is our fifth consecutive quarter of year over year improvement in adjusted gross margin.

Jobs: Improved operational efficiency moderating input and delivery costs and incremental pricing benefits were the primary drivers all of which align with the themes. We have consistently communicated is our focus over the past several quarters.

Jobs: Furthermore, these actions were complemented by a disciplined operating expense management and the ongoing benefit of our acquisition synergy program.

Jobs: As Andy mentioned, we took further steps this quarter aimed at improving the efficiency of our selling general and administrative functions.

Jobs: This resulted in a targeted reduction of our management workforce.

Jobs: Additionally, we reviewed our real estate footprint and announced showroom consolidation plans in key markets, which we believe will not only reduce our ongoing cost structure, but also create a more cohesive and compelling expression of our brand and collectors.

Jeffrey M. Stutz: Additionally, we reviewed our real estate footprint and announced showroom consolidation plans in key markets, which we believe will not only reduce our ongoing cost structure but also create a more cohesive and compelling expression of our brand collectively. Once fully implemented later this spring, these actions are expected to deliver annualized cost reductions of between $14 and $16 million. At the consolidated level, net sales in the third quarter of $872 million decreased 11.4% on a reported basis and 10.1% organically compared with the same quarter last year. New awarders totaled $830 million, reflecting an organic decrease of 4.7% from the same quarter a year ago.

Jobs: Once fully implemented later this spring these actions are expected to deliver annualized cost reductions of between 14 and $16 million.

Jobs: At the consolidated level net sales in the third quarter of 872 million decreased 11, 4% on a reported basis and 10, 1% organically compared with the same quarter last year.

Jobs: New orders totaled $830 million.

Jobs: Reflecting an organic decrease of four 7% from the same quarter a year ago.

Jobs: We saw declines in both the Americas contract and retail segments demand levels in the international specialty segment were more encouraging, particularly in the contract component of our business.

Jobs: Although consolidated order levels for the full quarter it did not meet our near term expectations.

Jobs: Trends improved across all segments as we move through the period and for the month of February our consolidated orders were up two 8% over last year.

Jeffrey M. Stutz: While we saw declines in both the America's contract and retail segments, demand levels in the international and specialty segments were more encouraging, particularly in the contract component of our business. Although consolidated order levels for the full quarter did not meet our near-term expectations, the trend improved across all segments as we moved through the period. And for the month of February, our consolidated orders were up 2.8% over last year. Within the America's Contracts segment, net sales for the quarter were $441 million, representing an organic decrease of 9.2% from the same quarter a year ago. New orders in the period reflected a similar pattern, coming in 9.4% lower than last year on an organic basis.

Jobs: Within the Americas contract segment net sales for the quarter were $441 million, representing an organic decrease of nine 2% from the same quarter a year ago.

Jobs: New orders in the period reflected a similar pattern coming in nine 4% lower than last year on an organic basis.

Jobs: Here again demand trends improved as we moved through the period and into the early part of Q4 in fact over the last two weeks orders have trended up over 5% to last year.

Jobs: Despite lower sales versus last year, we again delivered much improved gross margins in the Americas segment this quarter.

Jobs: Net pricing benefit moderating input costs and the realization of synergy benefits and tightly managed operating expenses contributed to achieving a gross margin of 33, 1% and adjusted operating margin of eight 1%.

Jobs: Although we're not yet seeing they're consistent impact on order rates, we remain highly optimistic that improvement is on the horizon given a range of forward looking data points.

Jeffrey M. Stutz: Here again, demand trends improved as we moved through the period and into the early part of Q4. In fact, over the last two weeks, orders have trended up over 5% compared to last year. Despite lower sales versus last year, we again delivered much improved gross margins in the Americas Segment this quarter. The Net Pricing Benefit, Moderating Input Costs, the Realization of Synergy Benefits, and Tightly Managed Operating Expenses contributed to achieving a Gross Margin of 33.1% and Adjusted Operating Margin of 8.1%.

Jobs: Indicators, such as customer inquiries project mockup requests and contract Activations continue to grow year over year and the overall funnel of project opportunities remains encouraging.

Jobs: Within the funnel of projects, we are tracking the value of the opportunities that we have won but for which the actual order has not yet been received.

Jobs: We're encouraged to share that this number has doubled the value. It was this time last year.

Jobs: All of this adds to our confidence that we are at or near a demand inflection point in the business.

Jobs: Question remains however, one of timing.

Jeffrey M. Stutz: Although we're not yet seeing their consistent impact on orders, we remain highly optimistic that improvement is on the horizon, given a range of forward-looking data points. Indicators such as customer inquiries, project mock-up requests, and contract activations continue to grow year-over-year, and the overall funnel of project opportunities remains encouraging. Within the funnel of projects, we are tracking the value of opportunities that we have won, but for which the actual order has not yet been received.

Jobs: By historical comparison, we continued to experience delays in the time it takes customers to make final order decisions and this is added to the complexity and challenge of forecasting the business.

Jobs: Considering the current macroeconomic climate with elevated interest rates lagging Abi readings and sentiment measures edging higher but still below pre pandemic levels. None of this is surprising to us.

Jobs: Still the data, we're tracking inside our business and what we hear from customers and our dealers gives us confidence that there is pent up demand awaiting further improvements in the macro backdrop.

Jobs: Turning to our international contract and specialty segment net sales for the quarter totaled $217 million, which is down 10, 6% organically year over year, while new orders came to $228 million, reflecting a year over year organic increase of seven 9%.

Jeffrey M. Stutz: We're encouraged to share that this number is double the value it was this time last year. All of this adds to our confidence that we are at or near a demand inflection point in the business. The question remains, however, one of timing.

Jobs: Demand patterns month to month continues to be inconsistent. However orders grew in both December and February primarily driven by portions of mainland Europe, South Korea, India, China, Australia and in the Middle East.

Jeffrey M. Stutz: By historical comparison, we continue to experience delays in the time it takes customers to make final order decisions, and this is added to the complexity and challenge of forecasting. Considering the current macroeconomic climate with elevated interest rates, lagging ABI readings, and sentiment measures edging higher, but still below pre-pandemic levels, none of this is surprising. Still, the data we are tracking inside our business and what we hear from customers and our dealers gives us confidence that there is pent-up demand awaiting further improvements in the macro backdrop. Turning to our International Contract and Specialty segment, Net sales for the quarter totaled $217 million, which is down 10.6% organically year-over-year, while new orders came to $228 million, reflecting a year-over-year organic increase of 7.9%. Demand patterns month-to-month continue to be inconsistent. However, orders grew in both December and February, primarily driven by portions of mainland Europe, South Korea, India, China, Australia, and the Middle East.

Jobs: One of our key strategic initiatives aimed at enhancing the scope and reach of our international network is completing the transition from Herman Miller to full line Miller and all dealers.

Jobs: This effort is steadily gaining momentum with currently over 40% of this network offering the millennial product portfolio.

We have a consistent schedule of additional transition as planned in the upcoming quarter.

Jobs: We were also pleased with the margin profile of this segment. The adjusted operating margin was 10, 4% in the third quarter, albeit down 110 basis points year over year due to lower sales volume.

Jobs: Despite this we continue to expand gross margins in this past quarter, we achieved a record level of 44, 5%.

Jobs: Favorable product mix improved freight and distribution management and proactive restructuring initiatives taken earlier in the year all contribute to this improved profit picture.

Jobs: As it relates to our global retail segment in the third quarter net sales totaled $214 million, reflecting an organic decrease of 11, 3%.

Jobs: New orders totaled 183 million, marking a seven 1% organic decline primarily due to subdued housing related demand.

Jeffrey M. Stutz: One of our key strategic initiatives aimed at enhancing the scope and reach of our international network is completing the transition from Herman Miller to full-line Miller & Knoll dealers. This effort is steadily gaining momentum, with currently over 40% of this network offering the MillerKnoll product portfolio. We have a consistent schedule of additional transitions planned for the upcoming quarter. We were also pleased with the margin profile of this segment. The adjusted operating margin was 10.4% in the third quarter, albeit down 110 basis points year-over-year due to lower sales.

Jobs: Regarding adjusted operating margin for the retail segment. This quarter, we achieved five 6% 10 basis points higher than last year. Despite the decrease in net sales.

Jobs: The main drivers of the margin expansion were improved operational and delivery efficiencies and favorable product mix.

Jobs: Despite the challenging retail environment, our retail team remains dedicated to improving in store experiences broadening our product offer enhancing digital capabilities and elevating brand awareness and we're confident that this strategic approach will nurture brand loyalty promote deeper engagement and position our business to take advantage of pent up demand as market conditions improve.

Jeffrey M. Stutz: Despite this, we continue to expand gross margins. In this past quarter, we achieved a record level of 44.5%. A favorable product mix, improved freight and distribution management, and proactive restructuring initiatives taken earlier in the year all contributed to this improved profit picture. As it relates to our global retail segment, in the third quarter, net sales totaled $214 million, reflecting an organic decrease of 11.3%, while new borders totaled $183 million, marking a 7.1% organic decline primarily due to subdued housing-related demand.

Jobs: We're beginning to see signs of improvement in the economic data as Andy mentioned home sales in the U S are at 11 year lows and demographic trends point to a robust future construction growth. This is evidenced by last month's homebuilder sentiment readings, which posted its third consecutive monthly gain in February.

Jobs: Reaching its highest level since August of 2023.

Jobs: Moreover, renovation activity should also benefit from an aging housing stock and eventual turnover.

Jobs: As we mentioned to you last quarter, we believe that the demand fundamentals for this segment are pointing stronger and expect the retail segment to be a major contributor to both top and bottom line growth in our business for years to come.

Jeffrey M. Stutz: Regarding adjusted operating margins for the retail segment, this quarter, we achieved 5.6 percent, 10 basis points higher than last year, despite the decrease in net sales. The main drivers of the margin expansion were improved operational and delivery efficiency and favorable product management. Despite the challenging retail environment, our retail team remains dedicated to improving in-store experiences, broadening our product offer, enhancing digital capabilities, and elevating brand awareness. And we're confident that this strategic approach will nurture brand loyalty, promote deeper engagement, and position our business to take advantage of pent-up demand as market conditions improve. We're beginning to see signs of improvement in the economic data. As Andy mentioned, home sales in the U.S. are at 11-year lows, and demographic trends point to robust future construction growth.

Jobs: Regarding cash flow and the balance sheet. This quarter, we saw cash generation of $61 million in cash from operations.

Jobs: This enabled us to repurchase approximately one 5 million shares for a total cash outlay of approximately $40 million.

Jobs: And at quarter end, our net debt to EBITDA ratio was approximately 265 turns.

None: Now, let's turn to our near term view to guidance and outlook.

None: Given the macroeconomic conditions currently impacting our demand picture, we expect net sales in the fourth quarter of fiscal 2024 to range between $880 million and $920 million.

None: Adjusted diluted earnings per share for the period I expect it to be between 49 and 57.

None: The midpoint of this earnings range implies year over year growth of approximately 29%, which is notable given the decline in year over year revenue.

None: And based on this forecast, we expect full year adjusted diluted earnings per share of between $1 90 and $1.98.

Jeffrey M. Stutz: This is evidenced by last month's Home Builders Sentiment Readings, which posted its third consecutive monthly gain in February, reaching its highest level since August of 2023. Moreover, renovation activity should also benefit from an aging housing stock and eventual turnover. As we mentioned to you last quarter, we believe that the demand fundamentals for this segment are strengthening, and we expect the retail segment to be a major contributor to both top and bottom line growth in our business for years to come. Regarding cash flow on the balance sheet, this quarter, we saw a generation of $61 million in cash from operations.

None: While economic uncertainty certainly persists in parts of our business, we're growing in our confidence that a favorable shift in demand patterns is on the horizon.

None: We believe this will translate into broad based sales and earnings growth as we move through the upcoming fiscal year.

None: So with that overview of the numbers I'll now turn the call over to the operator, let's take your questions.

None: Okay.

None: The floor is now open for your questions to ask a question at this time simply press the star followed by the number one on your telephone keypad.

None: We ask that you please limit yourself to one question and one follow up question we.

None: We will now take a moment to compile a roster.

None: Our first question comes from the line of Greg Burns with Sidoti. Please go ahead.

Jeffrey M. Stutz: This enabled us to repurchase approximately 1.5 million shares for a total cash outlay of approximately $40 million. And at quarter end, our net debt to EBITDA ratio was approximately 2.65 times. Now let's turn our near-term view to guidance and outlook. Given the macroeconomic conditions currently impacting our demand picture, we expect net sales in the fourth quarter of fiscal 2024 to range between $880 million and $920 million. Adjusted diluted earnings per share for the period are expected to be between $0.49 and $0.57.

None: Yeah.

Gregory John Burns: Good afternoon.

Gregory John Burns: Could you just talk about your win rates in the Americas, and maybe why why do you think.

Gregory John Burns: Maybe it's taking longer for some of this to move through your funnel.

Gregory John Burns: And do you feel like.

Gregory John Burns:

Gregory John Burns: Do you feel like there's been any changes in and share in the market and do you feel like you maybe need to get more aggressive with maybe some of your incentives to.

Gregory John Burns: To start converting maybe some of what youre seeing in your your pipeline. Thank you.

Gregory John Burns: Hey, Greg It's Andy that's that's a lot of questions. So I'll start with a couple of points.

Andy Oh: First time, I think demand patterns in the early part of the recovery are always choppy.

Andy Oh: And they often really vary significantly based on customer size and industry sector. So I think that's really kind of where we find ourselves currently and I don't think we're either surprised or just starting to see some relative differences across the competitive landscape I think in fact every cycle in the last 25 years has played out this way.

Jeffrey M. Stutz: The midpoint of this earnings range implies year-over-year growth of approximately 29%, which is notable given the decline in year-over-year revenue. And based on this forecast, we expect full-year adjusted diluted earnings per share of between $1.90 and $1.98. While economic uncertainty certainly persists in parts of our business, we're growing in our confidence that a favorable shift in demand patterns is on the horizon, and we believe this will translate into broad-based sales and earnings growth as we move through the upcoming fiscal year. So with that overview of the numbers, I'll now turn the call over to the operator to take your questions. The floor is now open to your questions. To ask a question at this time, simply press the star followed by the number one on your telephone keypad.

Andy Oh: I think from a quarter to quarter fluctuation in demand over the long term, we believe in the right position to protect our market share from a timing perspective, I think it is still taking customers longer to.

Andy Oh: To make decisions on what's in the funnel and what's been the one I think our win rate is actually 3% higher than last year, which is really encouraging we are not seeing pricing activity that is frightening to us or it feels like we need to discount more it sounds very stable out there, we're addressing pricing on a job by job basis, but we're not feeling like it is.

Andy Oh: Accretively competitive John I'll, let you add a little bit worried about any one yeah I would add Andy if we look at what's in the funnel in addition to.

Operator: We ask that you please limit yourself to one question and one follow-up. We'll now take a moment to compile our raw. Our first question comes from the line of Greg Burns with Sidoti. Please go ahead.

John P. Michael: Significant increase in new opportunities added to the funnel as you mentioned the win rate is up slightly and Jeff mentioned in his opening comments that as we track an opportunity through the sales process. The second the last step is it's either marked closed or one and then the final step is its book.

Gregory John Burns: Good afternoon. Could you just talk about your win rates in the Americas and maybe why you think... um, maybe it's taking longer for some of this to move through your funnel, and do you feel like... Do you feel like there's been any changes in share in the market? And do you feel like you maybe need to get more aggressive with maybe some of your incentives to start converting maybe some of what you're seeing in your pipeline? Thank you. Thank you, Greg. It's Andy.

John P. Michael: And the amount of projects and opportunities in that final step closed one for US has increased significantly versus prior year. So it is a it is really just a matter of timing in terms of that converting into an order, we're still seeing construction delays and supply chain things in other industries.

John P. Michael: Impacting project timing.

Andrea R. Owen: That's a lot of questions, so I'll start with a couple of points. First off, I think demand patterns in the early part of your recovery are always choppy. And they often really vary significantly based on customer size and industry sector. So I think that's really kind of where we find ourselves currently. And I don't think we're either surprised or disheartened to see some relative differences across the competitive landscape. And I think, in fact, every cycle in the last 25 years has played out this way.

John P. Michael: But again looking at all the leading indicators are all pointing in the right direction right now.

None: Okay and then.

None: When you look at the balance sheet, obviously generating cash it looks like you bought back some stock this quarter, but are you comfortable with the leverage here like why not.

None: No.

None: What's your decision factor between buying back shares versus maybe paying down the debt. Thank you.

None: Yes, Greg we try in this this is Jeff. We have this is you know we've been buying some shares all physical year at different levels and we've just been opportunistic we think the shares are undervalued. We think it's a good deal and a good investment now having said that we had been balance if you look at the course of the first nine months of the fiscal year, we've taken a balanced.

Andrea R. Owen: I think from a quarter-to-quarter fluctuation in demand over the long term, we believe we're in the right position to protect our market share. From a timing perspective, I think it is still taking customers longer to make decisions on what's in the funnel and what's been won. I think our win rate is actually 3% higher than last year, which is really encouraging. We are not seeing pricing activity that is frightening to us, or it feels like we need to discount more. It feels very stable out there.

None: Approach in both bought shares and paid down some debt this quarter just due to some timing of.

None: Accessing some of our international cash we did we did see our debt level tick up a little bit at the end of the quarter.

Andrea R. Owen: We're addressing pricing on a job-by-job basis, but we're not feeling like it is incredibly competitive. John, I'd let you add a little bit more to that if you want. Yeah, I would add, Andy, if we look at what's in the funnel in addition to the significant increase in new opportunities added to the funnel. As you mentioned, the win rate is up slightly.

None: But but the intent has been in our in our plan going forward. We will continue to be balanced on that front no. We're not concerned with the with the leverage ratio again, we look as we look ahead and we look at the internal measures that we've noted on the call.

None: What we what we see our clouds clearing from a macroeconomic perspective and the trends, we'd even seen within each of the three business segments from an order entry standpoint, we're confident we're going to see demand improvements are on the horizon. Our margins are strong we're well above last year's levels and so we're quite comfortable at the level that we're at.

John P. Michael: And Jeff mentioned in his opening comments that, you know, as we track an opportunity through the sales process, the second to last step is it's either marked closed or won, and then the final step is it's booked. And the number of projects and opportunities in that final step, the closed one, for us has increased significantly versus the prior year. So it is really just a matter of timing in terms of that converting into an order. We're still seeing construction delays and supply chain things in other industries that are impacting project timing. But again, looking at all the leading indicators, they're all pointing in the right direction right now. Okay, and then, um...

None: Alright, thank you.

None: Our next question comes from the line of Budd <unk> with water Tower Research. Please go ahead.

Budd: Good morning, Andy Good morning, Jeff Good morning, Good afternoon, Corolla and John for you.

Budd: Hey, Brett.

Budd: In the afternoon.

None: And congratulations on the profitability in the quarter I know that.

Gregory John Burns: When you look at the balance sheet, obviously, you're generating cash, and it looks like you bought back some stock this quarter. Are you comfortable with the leverage here? Like, why not, you know?

Budd: A difficult thing and you're managing managing that well, but I am concerned about what I see in the and the implied backlog, we felt particularly in Americas contract, which looks to me to be somewhere I think could probably ever in the $3 $55 million to $360 million range, Jeff If I did the math right.

Gregory John Burns: What's your decision factor between, you know, buying back shares versus maybe paying down the debt? Thank you. Yeah, Greg, this is Jeff.

Jeffrey M. Stutz: We've been buying some shares all fiscal year at different levels, and we've just been opportunistic because we think the shares are undervalued. We think it's a good deal and a good investment. Now, having said that, we have been balanced. If you look at the course of the first nine months of the fiscal year, we've taken a balanced approach and both bought shares and paid down some debt. This quarter, just due to the timing of accessing some of our international cash, we did see our debt level tick up a little bit at the end of the quarter. But the intent has been in our plan going forward; we'll continue to be balanced on that front. No, we're not concerned with the leverage ratio.

Jeffrey M. Stutz: That's right.

Jeffrey M. Stutz: That's the lowest backlog.

Jeffrey M. Stutz: In cotton Americans contracts since.

Jeffrey M. Stutz: For the acquisition since the acquisition time of the acquisition.

And it makes it I think it I think you've told me it makes it very difficult to leverage your manufacturing at the same time, so irrespective of the pricing.

Jeffrey M. Stutz: What's going on there why when would we see that backlog start to rise.

None: [laughter] well, but.

None: Don't disagree with you that we everyone. In this room is not a we have every every interest to see order rates pick up and we're we're spending.

Jeffrey M. Stutz: Again, if we look ahead and we look at the internal measures that we noted on the call, what we see our clouds clearing from a macroeconomic perspective, and the trends we've even seen within each of the three business segments from an order standpoint, we're confident we're going to see demand improvements on the horizon. Our margins are strong, well above last year's levels. And so we're quite comfortable at the level that we're at. All right, thank you. Our next question comes from the line of Budd Bugatch with Water Tower Research.

None: Our full efforts as an organization to support the sales organization to support the operations organization to drive order growth.

None: And that's what it's going to take and I think we are as we said in the prepared comments we're on the cost.

None: I've seen order demand pick up we saw some positive trends as we moved through the quarter I made the comment that the Americas orders in the last couple of weeks.

Budd Bugatch: Please go ahead. Good morning, Andy. Good morning, Jeff. Good morning. Good afternoon, Carola, and John. It is the afternoon.

Increased over last year's same weeks prior year. So the trends are pointing in the right direction I think the macro indicators as we've covered are pointing in the right direction, we fully expect to see that backlog begin to grow but we have been through 18 months or so of what I would call a contract economic recession and we're <unk>.

Budd Bugatch: And congratulations on the profitability in the quarter. I know that's a difficult thing to manage that well. But I am concerned about what I see in the implied backlogs, particularly in America's contract, which looks to me to be somewhere, I think, probably in the $355 to $360 million range, Jeff, if I did the math right. That's right. That's right, bud.

None: Getting our way to that to the bottom of it and we will fight our way through the other side of it.

None: Okay.

None: More on that but I know I've got one more follow up and let me just go to the global retail because again that that looks like that's a significant drawdown in backlog not quite as severe as.

Jeffrey M. Stutz: And that's the lowest backlog in America's contract since before the acquisition, since the acquisition, at the time of the acquisition. And it makes it, I think you told me, it makes it very difficult to leverage your manufacturing at that same time, so irrespective of the pricing. What's going on there, when will we see that backlog start to rise? Well, Bud, I won't disagree with you that everyone in this room is nodding.

None: As a C but.

None: What can you talk a little bit Andy on the global retail what Youre seeing in terms of e-commerce versus in store, how do we look on the same.

None: Same store same location same brand kind of basis. However, you wanted to give us a flavor on that and.

None: And the future of that particular segment as well.

Jeffrey M. Stutz: We have every interest in seeing order rates pick up, and we're putting our full effort as an organization to support the sales organization, to support the operations organization, to drive order growth. And that's what it's going to take. And I think we are, as we said in the prepared comments, on the cusp of seeing order demand pick up. We saw some positive trends as we moved through the quarter. I made the comment that America's orders in the last couple of weeks have increased over last year and the same week's prior year. So the trends are pointing in the right direction. I think the macro indicators, as we've covered, are pointing in the right direction, and we fully expect to see that backlog begin to grow.

Andy Oh: Yeah, but it's a great question and Debbie is here, so I'm going to let her answer said the specifics, but I I think it's actually very promising and some of the backlog that you're referring to you from last year, but it's like I said some of the supply chain issues that we were having along with many other retailers as we work through that so I think the reduction in backlog is actually a really good thing and a point to how we're managing our image.

Andy Oh: Pretty much more efficiently and the cycle time from when you were ordering furniture for US now to me that's showing up in your home is much shorter so that processing is actually really beneficial because it drives more conversion and I would say that business is really healthy outperforming competition. So Debbie do you want to answer some of the specifics hi, there as it pertains to some of the channel questions you have.

Budd Bugatch: But we have been through 18 months or so of what I would call a contract economic recession. Okay, I have more on that, but I know I've got one more follow-up, and let me just go to global retail. Because, again, that looks like that's a significant drawdown in backlog, not quite as severe as AC, but can you talk a little bit, Andy, about global retail and what you're seeing in terms of How do we look on a same store, same location, or same brand kind of basis? However, you wanted to give us a flavor of that and the future of that particular segment as well? Yeah, but it's a great question.

Debbie F. Propst: And where we're seeing fairly consistent patterns across our three channels stores wet and wholesale.

Debbie F. Propst: With one exception that given the design service implementation that we've been doing in our stores. So we're really seeing an acceleration of average order value in that channel as the contribution of up to date service sales picks up are those orders are right over to exercise them.

Debbie F. Propst: In dollar volume about non design service sales. So we're very focused on optimizing the store traffic and the activity of rate design services were in the process of.

Debbie F. Propst: And Debbie's here, so I'm going to let her answer the specifics. But I think it's actually very promising. And some of the backlog that you're referring to from last year reflected some of the supply chain issues that we were having along with many other retailers as we worked through that. So I think the reduction in backlog is actually a really good thing and a testament to how we're managing our inventory much more efficiently. And the cycle time from when you order furniture for us now to when it's showing up in your home is much shorter. So that processing is actually really beneficial because it drives more conversion. And I would say that this is really healthy outperforming competition. So Debbie, do you want to answer some of those specifics? Hi there,

Debbie F. Propst: Densify, our store floor set to showcase more of the expanded offering in stores as well as making sure that we're being.

Debbie F. Propst: Not much later and more aggressive about driving traffic towards these design services.

Our sales forces silly trade does that capability.

Debbie F. Propst: So the average ticket and retail where are you in that two to $3000 range.

None: Yes, that's correct.

None: Okay. All right. Thank you good luck on the corn that follows on the next quarters and the balance of the year.

None: Thanks Budd.

None: Our next question comes from the line of Alex Fuhrman with Craig Hallum Capital. Please go ahead.

None: Sure.

Alex Joseph Fuhrman: Hey, guys. Thanks, very much for taking my question, Andy you talked a little bit about consolidating some showroom in an effort to align the cost structure, what about on the global retail side of the business do you think there are opportunities there to maybe consolidate some of your retail stores or are there still opportunities there to continue to open more.

Debbie F. Propst: So to take some of the channel questions you had, we're seeing fairly consistent patterns across our three channels, stores, web, and wholesale, with one exception that given the design service implementation that we've been doing in our stores, we're really seeing an acceleration of average order value in that channel as the contribution of design service sales picks up. Those orders are about 2x the size in dollar volume of a non-design service sale. So we're very focused on optimizing store traffic and the activity around design services. We're in the process of densifying our store floor sets to showcase more of the expanded offering in stores, as well as making sure that we're being much louder and more aggressive about driving traffic towards these design services. Now that our sales force is fully trained in that capability, So the average ticket in retail, are you in the $2,000 to $3,000 range?

Alex Joseph Fuhrman: Or was there.

Andy Oh: It's a great question, Alex and just to touch on the showroom consolidation I think the major driver behind why we decided to do that it's really driven from our customers in the A&D community and making sure that we have everything in an easy and convenient place for them to actually see all of our brands. So we're very excited about that it's not really driven by cost causes a great side benefit.

Andy Oh: But really driven by the customer and what they're telling us from a retail store standpoint, we are very under stored compared to our competition and I would say, we have opportunity to increase our store footprint.

Budd Bugatch: Yes, that's correct. All right, thank you. Good luck with the following, the next quarters and the balance of the year. Thank you. Thank you. Our next question comes from the line of Alex Fuhrman with Craig Hallam Capital. Please go ahead.

Andy Oh: We find that our customer that shops online as well as in bricks and mortar is increasingly a better customer. So we can really have a huge opportunity in the next two to three years to increase that but we're also seeing really really successful trends in our stores. Debbie mentioned design services are the work that our aes are dealing to personalize and really move the sales force where it is very high.

Alex Joseph Fuhrman: Hey, guys, thanks very much for taking my question. Andy, you talked a little bit about consolidating some showrooms in an effort to align the cost structure. What about on the global retail side of the business? Do you think there are opportunities there to maybe consolidate some of your retail stores? Or are there still opportunities to continue to open more stores there? It's a great question, Alex.

Andy Oh: So we're very bullish on store growth.

Andy Oh: And Andy are there any brands in particular, you think are under stored or perhaps opportunity for multi branded stores.

Andy Oh: You know I think primarily our initial growth will be around the T. W Y brand in Herman Miller, and we definitely think theres possibility for knoll as well, but we carry no within design within reach as well so all of our brands have potential but those three are the ones we'll focus on first.

Andrea R. Owen: And just to touch on the showroom consolidation, I think the major driver behind why we've decided to do this is really driven by our customers in the AD community and making sure that we have everything in an easy and convenient place for them to actually see all of our brands. So we're very excited about that. It's not really driven by cost.

None: Okay. That's great. Thank you very much.

None: Yeah.

None: Our next question comes from the line of Reuben Garner with the benchmark company. Please go ahead.

Reuben Garner: Thanks, Good evening everybody.

Reuben Garner:

Reuben Garner: Just wanted to kind of clarify plus square.

Andrea R. Owen: Cost is a great side benefit, but it's really driven by the customer and what they're telling us. From a retail store standpoint, we are very understaffed compared to our competition. And I would say we have an opportunity to increase our store footprint. We find that our customer that shops online as well as in bricks and mortar is increasingly a better customer. So we think we have a huge opportunity in the next two to three years to increase that footprint. We're also seeing really, really successful trends in our stores. Debbie mentioned design services; the work that our AEs are doing to personalize and really move the sale forward is very helpful. So we're very bullish on store growth. And Andy, are there any brands in particular you think are understored or perhaps opportunities for multi-branded stores? You know, I think primarily our initial growth will be around the DWR brand and Herman Miller. We definitely think there's a possibility for Knoll as well, but we carry Knoll within design within reach as well.

Reuben Garner: Jeff you talked about kind of maybe nearing or being at an inflection point.

Reuben Garner: I don't know if that was in Americas.

Reuben Garner: Pacific comment or just kind of in general, but you're also announcing a restructuring.

Reuben Garner: Implementing cost savings I would guess because.

Reuben Garner: That's kind of consistent order pressure over the last year or 18 months with you as you put it can you kind of walk us through the decision or the thought process. There why restructuring now if we're going to start coming out of this.

Reuben Garner:

None: And then I've got a follow up.

None: Let me start with that one and then I'll pass it on to Chad well, it's something we're always looking at our structure and how efficient we're being and remember we're still you know.

Chad: Finishing up integration between the two companies and as we finished some of our synergy work as we move toward the future, we're becoming more and more efficient certain functions. So as we've done that we've taken the opportunity to sort of close the circle on many of the integration activities. We can for mostly at the end because this is really kind of a final targets a badge I spoke with you.

Andrea R. Owen: So all of our brands have potential, but those three are the ones we'll focus on first. Okay, that's great. Thank you very much. Our next question comes from the line of Reuben Garner with the Benchmark Company. Please go ahead. Thanks. Good evening, everybody. Just wanted to kind of clarify slash square something up. Jeff, you talked about kind of maybe nearing or being at an inflection point. I don't know if that was in America or not, but Jeffrey Stutz.

None: Andy I think Thats right Rubin to your question.

None: I would caution you to read to read really anything into that I mean, we one of the things we have always prided ourselves on it at all is it trying to be on our front foot and making sure that we are are responding to the current market conditions that we see but also protecting the strategic investment parts of the business that we are confident.

None: Theyre going to are going to help grow the business topline and profitability going forward and this is I think you can look at this as well.

Reuben Garner: I'm not sure if you have a specific comment or just kind of in general, but you're also announcing a restructuring. You know, implementing cost savings, I would guess because we've had kind of consistent order pressure over the last year, 18 months, as you put it. Can you kind of walk us through the decision or the thought process there? And then I got a follow-up. Let me start with that one, Reuben, and then I'll pass it on to Jeff.

None: Ongoing practice all of that kind of housekeeping I mean this was not a this was a targeted as I mentioned in my prepared comments around.

None: The management ranks and it was it was not just a cost take out but it was also a simplification set of decisions I mean, the Annie said it in her prepared comments, but I'll, just emphasize that but the decisions around real estate.

Andrea R. Owen: So we're always looking at our structure and how efficient we are being. And remember, we're still, you know, finishing up the integration between these two companies. And as we've finished some of our synergy work, as we move toward the future, we're becoming more and more efficient in certain functions. So as we've done that, we've taken the opportunity to sort of close the circle on many of the integration activities. We think we're mostly at the end, but this is really kind of the final parts of that. Jeff, what would you add?

None: It would be wrong to think of that as purely focused on cost takeout. This is about creating a much more compelling expression of the combined millennial brands in these major markets that we serve so.

None: It certainly is not all about cost.

None: I mean, I guess I'd leave it at that.

None: Yeah.

None: Sorry, I was on mute.

None: Helpful.

None: And then I guess.

None: <unk> it sounds like it is.

None: Stable can you just talk about you know I know you're coming into the end of your fiscal year, but maybe talk about it on a go forward basis. The next kind of year, what what's left in the pricing actions that you've already announced one one was the last pricing and that's accident you announced you need another one this year to.

Jeffrey M. Stutz: No, Andy, I think that's right. Reuben, to your question, I would caution you not to read really anything into that. I mean, one of the things we have always prided ourselves on at MillerKnoll is trying to be on our feet and making sure that we are responding to the current market conditions that we see but also protecting the strategic investment parts of the business that we are confident are going to help grow the business's top line and profitability going forward. And, you know, this is, I think you can look at this as an ongoing practice of that kind of housekeeping. I mean, this was not an all-out strike; this was targeted, as I mentioned in my prepared comments, around the management ranks.

None: Keep up with inflation are you seeing your competitors announce them I guess, just kind of update on price cost in this environment.

None: Yes, Reuben this is Jeff and John Please jump in I would characterize where where we feel we are as an organization is we're kind of back to what I would say are more traditional.

Jeffrey M. Stutz: More ongoing annual price increases as a cadence.

Jeffrey M. Stutz: There are still inflationary pressures, they're nowhere near the.

Jeffrey M. Stutz: And it was not just a cost takeout, but it was also a simplification set of decisions. I mean, Andy said it in her prepared comments, but I'll just emphasize it, that the decisions around real estate would be wrong to think of that as purely focused on cost takeout. This is about creating a much more compelling expression of the combined MillerKnoll brands in these major markets that we serve. So it certainly is not all about cost. And I mean, I guess I'd leave it at that. Sorry, I was on mute.

Jeffrey M. Stutz: At the level that we were seeing when we were having to do multiple price increases any per.

Jeffrey M. Stutz: Current year.

Jeffrey M. Stutz: Our last increase was last June it'll probably on that.

Jeffrey M. Stutz: Roughly that same type of types of calendar schedule as we move forward and much more in line with kind of pre COVID-19 annualized price increase percentages.

None: Okay, and then I guess last question you kind of answered the share question I think that was directed at the Americas.

Reuben Garner: Yeah, that's helpful. And then, I guess, this pricing sounds like it's... Dave, can you just talk about, you know, I know you're coming into the end of your fiscal year, but maybe talk about it on a go-forward basis the next time of year. What's left in the pricing actions that you've already announced? When was the last pricing action you announced? Do you need another one this year to keep up with inflation? Are you seeing your competitors announce them? I guess just kind of an update on price and cost in this environment. Yeah, Reuben, this is Jeff and John. Please jump in.

None: Side My question actually internationally, the business seems to be holding up a little better and in fact that looks like the last quarter showing growth again.

None: How much of that would you attribute to kind of maybe the benefits that they're we're between Nolan Miller versus have you seen a stabilization in macro over there kind of quicker I know, it's been a volatile situation, but just kind of thoughts on how things have transpired over the last six to nine months.

None: I think it's a combination of all of those things really I think.

None: The great news about our international business is that it is very diverse. So he sells struggle in Europe, then you have China and that's beginning to wake up to offset that so I think we have markets as you mentioned over the last several calls the middle East, India, Asia, and China, starting to wake up that are really kicking in and that stability has driven the business forward.

Jeffrey M. Stutz: I would characterize where we feel we are as an organization. We're kind of back to what I would say are more traditional, more ongoing annual price increases as a cadence. Although there are still inflationary pressures, they are nowhere near the level that we were seeing when we were having to do multiple price increases per year. Our last increase was last June, and it'll probably be on that same, roughly that same type of calendar schedule as we move forward and much more in line with the kind of pre-COVID annualized price increase percentages. Okay, and then I guess the last question, you kind of answered the shared question. I think that was directed at the Americas side.

None: And the one thing to remember too Rubin with the differences in our business in international and the Americas and international is much more nascent and we are a much more lightly penetrated. So we have a lot of opportunity to grow market share and to expand markets to grow dealers and also knoll as you now supplementing part of our products offer.

None: We never had and you're at before so as we continue to transition Herman Miller dealers, Tim Miller, and all dealers, there's momentum behind that and as dealers begin to learn the products there's momentum behind that so I would just say, it's really just a difference in the maturity of the markets and how we penetrate in the markets I know Chuck what would you add to that all I think that covers it I think it is.

Andrea R. Owen: My question actually, actually, internationally, the business seems to be holding up a little better. And in fact, it looks like the last quarter showed growth again. How much of that would you attribute to kind of maybe the benefits that there were between Nolan Miller versus, you know, have you seen a stabilization in macro over there kind of quicker? I know it's been a volatile situation, but just kind of thoughts on how things have transpired over the last six to eight months. I think it's a combination of all of those things, really, I think. The great news about our international business is that it is very diverse. So if you still struggle in Europe, then you have China that's beginning to wake up to offset that. So I think we have markets, as we've mentioned over the last several calls, the Middle East, India, Asia, and China starting to wake up that are really kicking in. And that stability has driven the business forward.

Chuck: Spot on.

None: And guys I said I think I said last one, but I'm going to sneak one more in if that's all right. The Jeff can you just maybe you said this but just to restate. It if you could the order patterns that you saw throughout the quarter can you walk through those again, what what kind of.

None: December January February look like and then where those were those specific to with US consolidated or did you break out Americas and if you didn't could you talk about what youre seeing in Americas on a on a.

None: Month by month basis, Yeah, Yeah, Let me start Rubin with just kind of a consolidated picture we were down from a organic order perspective down four 7% on a full quarter Q3, but we came into the quarter down closer to that 10 or 11% that we exited at a consolidated level in February up almost 3%.

Andrea R. Owen: And the one thing to remember, too, Reuben, about the differences in our business in international and the Americas is that international is much more nascent, and we are much more lightly penetrated. So we have a lot of opportunity to grow market share and to expand markets, and to grow dealers. And also, Knoll is supplementing part of our product offer that we never had in Europe before. So as we continue to transition Herman Miller dealers to MillerKnoll dealers, there's momentum behind that. And as dealers begin to learn the products, there's momentum behind that. So I would just say it's really just a difference in the maturity of the markets and how we penetrate those markets. Jeff, what would you add to that?

None: So we saw fairly steady improvement in the in the year over year organic order couse as we move through that was consolidated the Americas not a not a wildly different story there I mean.

None: <unk>.

None: We came into the quarter in December.

None: With larger year on year declines that we saw improvement as we moved into January we were kind of mid single digit declines February at around that same level. So we ended the full quarter down nine 4%. So we saw that improvement as we move through February and then what's been most encouraging as is.

Jeffrey M. Stutz: No, I think that covers it. I think it's spot on. And guys, I said, I think I said the last one, but I'm going to speak one more. And if that's all right, Jeff, can you maybe just restate what you said, but just to restate it, if you could, the order patterns that you saw throughout the quarter, can you walk through those? Again, what kind of December, January, February look like? And then were those specific to, were those consolidated, or did you break out Americas? And if you didn't, could you talk about what you're seeing in America on a month by month basis?

None: Quarter to date through the kind of the latest data the Americas segment is down.

None: It certainly has improved down 3% in the last couple of weeks up five so it's been a fairly consistent work toward an improving trend line.

None: Okay. Thanks for the detail guys.

None: First of all.

None: There are no further questions.

None: I'll now turn the floor back to president and CEO Andi Owen for closing remarks.

Andrea R. Owen: Thank you so much I want to thank everyone again for joining us on today's call and we look forward to connecting with you polygon.

Reuben Garner: Yeah. Yeah. Let me start, Reuben, with just kind of the consolidated picture. We were down from an organic order perspective, down 4.7% on the full quarter Q3, but we came into the quarter down closer to 10, 11%, and we exited at a consolidated level in February up almost 3%. So we saw a fairly steady improvement in the year-over-year organic order calcs as we moved through. And that was consolidated. The Americas, not a wildly different story there.

Andi Owen: Okay.

None: This concludes today's call you may now disconnect.

None: [music].

Jeffrey M. Stutz: I mean, we came into the quarter in December with larger year-on-year declines. We saw improvement as we moved into January. We were kind of experiencing mid-single digit declines, and February on around that same level.

Jeffrey M. Stutz: So we ended the full quarter down 9.4%. So we saw that improvement as we moved through February. And then what's been most encouraging is that quarter to date, through the kind of the latest data, the Americas segment is down, but it certainly has improved down 3% and the last couple of weeks up five. So it's been a fairly consistent walk toward an improving trendline.

None: Okay.

None: Okay.

None: [music].

Jeffrey M. Stutz: Okay, thanks for the details, guys. I'll pass them on. There are no further questions. I'll now turn the floor back to President and CEO, Andy Owen, for closing remarks. Thank you so much. I want to thank everyone again for joining us on today's call, and we look forward to connecting with you all again soon. Take care. This concludes today's call. You may now disconnect.