Knoll, Inc. (NYSE:KNL) Q4 2018 Earnings Conference Call Transcript
Feb 07, 2019 • 10:00 am ET
Good morning, everyone and welcome to the Knoll Inc. Fourth Quarter 2018 Conference Call. This call is being recorded. This call is also being webcast. Presentation slides accompany the webcast.
In addition, this call may offer statements that are forward-looking, including without limitation, statements regarding those future outlook for the industry and economy and expectations with respect to future leverage. These forward-looking statements are based largely on the company's expectations and are subject to a number of risks and uncertainties, certain of which are beyond the company's control. Actual results may differ materially from the forward-looking statements as a result of many factors, including the factors and risks identified and described in the Knoll's Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission.
The call today will also include references to non-GAAP financial measures. Reconciliations of these measures to the most comparable GAAP financial measures are included in the presentation slides that will accompany the webcast.
Now let me turn the call over to Andrew Cogan, the Chairman and CEO of Knoll. Thank you.
Andrew B. Cogan
Thank you, operator. Good morning, everyone and welcome to our yearend 2018 earnings call. We ended our 80th anniversary year on a strong note as we delivered a record quarter of shipments in a record year of sales with 120 basis points of adjusted EBITDA margin improvement and the strongest adjusted EPS performance of the year.
For the full year, we delivered sales of just over $1.3 billion, an increase of 15% versus prior year and an organic increase excluding c of just over $83 million, a very strong 7.4% increase. Our office segment grew by 8.2% and lifestyle by 26.9% or 6% organically. Total workplace sales, which as you recall, include lifestyle products sold into workplace settings grew by 13% significantly exceeding the 4.7% reported by BISMA and lifestyle sales for the full year represented a record 40% share of our revenues and 63% of our adjusted EBITDA.
While organic growth slowed in the fourth quarter, workplace growth remained a strong 10% and we entered 2019 with backlog up double digits as orders growth rates exceeded shipment growth rates in Q4. Adjusted EBITDA of $176.5 increased $32 million or 22% versus prior year and adjusted EPS including the benefit of a lower tax rate increased by 30% from $1.42 to $1.85. Our brand proposition that good modern design has a meaningful impact on the quality wellbeing, productivity and happiness of the way people live and work remains as relevant today as it did back when Hans and Florence founded Knoll in 1938.
In fact, today we argue that the value of our constellation of design-driven brands is more relevant than ever, is the boundaries between how we live and work, the environments in which we live and work and the range of generations that live and work come closer together than ever before. It's proof I see when I walk in December of our most dynamic fine environments and observed