Steelcase Reports First Quarter Results

Steelcase Reports First Quarter Results

First Quarter Order Patterns Build Strong Order Backlog Going Into Second
Quarter

GRAND RAPIDS, Mich., June 19, 2013 (GLOBE NEWSWIRE) -- Steelcase Inc.
(NYSE:SCS) today reported first quarter revenue of $667.1 million and net
income of $13.2 million, or $0.10 per share, including restructuring costs of
approximately $0.03 per share. Excluding restructuring costs, adjusted
earnings were $0.13 per share. Earnings per share were within company
estimates. Revenues were lower than expected primarily due to the timing of
shipment dates associated with first quarter orders in the Americas, and
revenue shortfalls in France and Northern Europe. Steelcase reported $675.2
million of revenue and earnings of $0.10 per share in the first quarter of the
prior year, including restructuring costs of approximately $0.03 per share. 

Organic revenue decline in the first quarter was 1 percent after adjusting for
$2.8 million of unfavorable currency translation effects and a favorable
impact of $3.5 million from recent dealer acquisitions, net of a
divestiture.The Americas organic revenue growth was less than 1 percent
compared to the prior year, which included revenue from two particularly large
projects in the energy sector, and EMEA experienced a 3 percent organic
revenue decline.Revenue continued to include a higher than normal mix of
project business from some of the company's largest corporate customers.

"Following twelve consecutive quarters of year-over-year organic revenue
growth, we experienced a modest decline in the first quarter," said James P.
Hackett, CEO. "We are not too concerned with this decline, as order growth in
the Americas was better than expected, resulting in a strong quarter-end
backlog, and customer visits and project activity remain high."

Current quarter operating income of $20.4 million compares to operating income
of $19.3 million in the prior year.Excluding restructuring costs, first
quarter adjusted operating income of $24.8 million compares with $24.4 million
in the prior year.

Cost of sales improved 170 basis points to 68.5 percent of revenue in the
current quarter compared to 70.2 percent in the prior year.This improvement
was driven primarily by net benefits from pricing adjustments and recent
restructuring actions in the Americas.

Operating expenses in the first quarter were $185.1 million compared with
$176.7 million in the prior year.The increase was largely due to higher
variable compensation expense and the impact of recent acquisitions.

Other income, net of $1.2 million in the current quarter decreased by $2.6
million compared to the prior year primarily due to a gain recognized on the
sale of a small equity investment recorded in the prior year.

Income tax expense of $4.6 million in the current quarter included $1.6
million of favorable discrete tax items.

"The Americas had another good quarter of operating performance, and EMEA and
Asia Pacific reduced their adjusted operating losses compared to the prior
year, despite mixed demand environments," said David C. Sylvester, senior vice
president and CFO.

The company repurchased approximately 2.4 million shares at a cost of $31.7
million in the first quarter. The company has approximately $110 million of
remaining availability under its existing share repurchase authorization.

Cash, short-term investments and the cash surrender value of variable life
company-owned life insurance totaled $263 million and total debt was $288
million at the end of the first quarter.

The Board of Directors today declared a cash dividend of $0.10 per share, to
be paid on or before July 12, 2013 to shareholders of record as of July 1,
2013.

Outlook

First quarter order growth in the Americas approximated 7% compared to the
prior year, and customer order backlog at the end of the first quarter
increased approximately 10% compared to the prior year.EMEA first quarter
orders declined by approximately 5% compared to the prior year, while customer
order backlog at the end of the first quarter increased approximately 7%
compared to the prior year.The company expects second quarter fiscal 2014
revenue to be in the range of $760 to $785 million reflecting stronger than
usual sequential growth.This estimate includes an assumption of approximately
$4 million from favorable currency translation effects compared to the prior
year and approximately $3 million from recent acquisitions, net of a
divestiture.Adjusting for these impacts, the company projects second quarter
organic revenue growth in the range of 1 to 4 percent over the prior year.The
company reported revenue of $744.9 million in the second quarter of fiscal
2013.

Steelcase expects to report earnings between $0.22 to $0.26 per share for the
second quarter of fiscal 2014, including restructuring costs of approximately
$0.01 per share.In addition, this estimate includes an unfavorable discrete
tax adjustment of approximately $2 million, or $0.02 per share, related to
expected changes in the statutory tax rate in the United Kingdom.Steelcase
reported earnings of $0.23 per share in the second quarter of fiscal 2013,
including restructuring costs of approximately $0.02 per share.

"At this year's NeoCon, we continued to demonstrate our strategy of providing
innovative products and applications that integrate architecture, furniture
and technology," Mr. Hackett said. "We are pleased to have the efforts of our
teams recognized by five Best of NeoCon awards, including the most Gold
product awards given to any single company."

Business Segment Results                       
(in millions)                                  
                                              
                             (Unaudited)        
                             Three Months Ended 
                             May 24,   May 25,  %
                              2013      2012     Change
                                              
Revenue                                        
Americas (1)                  $478.8  $479.2 (0.1)%
EMEA (2)                      126.7    129.2   (1.9)%
Other (3)                     61.6     66.8    (7.8)%
Consolidated revenue          $667.1  $675.2 (1.2)%
                                              
Operating income (loss)                        
Americas                      $38.7   $34.5  
EMEA                          (10.3)   (8.8)   
Other                         1.9      0.6     
Corporate (4)                 (9.9)    (7.0)   
Consolidated operating income $20.4   $19.3  
                                              
Operating income percent      3.1 %     2.9 %    
                                              
Revenue Mix                                    
Americas (1)                  71.8 %    71.0 %   
EMEA (2)                      19.0 %    19.1 %   
Other (3)                     9.2 %     9.9 %    


Business Segment Footnotes

As of November 23, 2012, we realigned portions of our reportable segments for
financial reporting purposes as a result of the integration of the PolyVision
global technology business into the Steelcase Education Solutions group. Prior
to this change, the PolyVision global technology business was combined with
the PolyVision surfaces business and was reported collectively as PolyVision
in the Other category along with Asia Pacific and Designtex.As a result of
these changes, the results of the PolyVision technology business are now
reported in the Americas and EMEA segments. The PolyVision surfaces business
remains in the Other category. Similarly, amounts in the prior years'
financial statements have been reclassified to conform to the new segment
presentation.

1. The Americas segment serves customers in the U.S., Canada and Latin America
with a portfolio of integrated architecture, furniture and technology products
marketed to corporate, government, healthcare, education and retail customers
through the Steelcase, Coalesse, Details, Nurture by Steelcase and Turnstone
brands.

2. The EMEA segment serves customers in Europe, the Middle East and Africa
primarily under the Steelcase and Coalesse brands, with an emphasis on
freestanding furniture systems, storage and seating solutions.

3. The Other category includes Asia Pacific, Designtex and PolyVision.

4. Corporate expenses include unallocated portions of shared services
functions such as information technology, human resources, finance, executive,
corporate facilities, legal and research.

                                                               
                                                               
YEAR OVER YEAR ORGANIC REVENUE GROWTH (DECLINE) BY SEGMENT
Q1 2014 vs. Q1 2013                                             
                        Steelcase Inc.    Americas    EMEA        Other
                                                                   category
                                                               
Q1 2013 revenue          $675.2          $479.2    $129.2    $66.8
Divestiture              (1.3)            —          (1.3)      —
Currency translation     (2.8)            (1.1)      (1.7)      —
effects*
Q1 2013 revenue,        671.1            478.1      126.2      66.8
adjusted
                                                               
Q1 2014 revenue          667.1            478.8      126.7      61.6
Dealer acquisitions      (4.8)            —          (4.8)      —
Q1 2014 revenue,        662.3            478.8      121.9      61.6
adjusted
Organic growth (decline) $(8.8)          $0.7      $(4.3)    $(5.2)
$
Organic growth (decline) (1)%              0 %         (3)%        (8)%
%
                                                               
* Currency translation effects represent the estimated net effect of
translating Q1 2013 foreign currency revenues using the average exchange rates
during Q1 2014.
                                                               
                                                               
PROJECTED ORGANIC REVENUE GROWTH
Q2 2014 vs. Q2 2013                                             
                        Steelcase Inc.                          
                                                               
Q2 2013 revenue          $745                                 
Divestiture              (2)                                    
Currency translation     4                                      
effects*
Q2 2013 revenue,        747                                    
adjusted
                                                               
Q2 2014 revenue,         760 - 785                               
projected
Dealer acquisitions      (5)                                    
Q2 2014 projected       755 - 780                               
revenue, adjusted
Organic growth $         8 - 33                                  
Organic growth %         1% - 4%                                 
                                                               
* Currency translation effects represent the estimated net effect of
translating Q2 2013 foreign currency revenues using the exchange rate at the
end of Q1 2014.

                                         
                                         
STEELCASE INC.                            
ADJUSTED EARNINGS PER SHARE               
                                         Q1 2014
Earnings per share                        0.10
Restructuring costs per share, net of tax 0.03
Earnings per share, adjusted              0.13

                                                                   
                                                                   
Steelcase Inc.                                                      
                                           (Unaudited)
                                           Three Months Ended
                                           May 24, 2013      May 25, 2012
                                                                   
Revenue                                     $667.1  100.0 % $675.2 100.0 %
Cost of sales                               457.2    68.5    474.1   70.2
Restructuring costs                         0.2      —       5.1     0.8
Gross profit                                209.7    31.5    196.0   29.0
Operating expenses                          185.1    27.8    176.7   26.2
Restructuring costs                         4.2      0.6     —       —
Operating income                            $20.4   3.1 %   $19.3  2.8 %
Interest expense, investment income and     (2.6)    (0.4)   0.4     0.1
other income, net
Income before income tax expense            17.8     2.7     19.7    2.9
Income tax expense                          4.6      0.7     6.5     0.9
Net income                                  $13.2   2.0 %   $13.2  2.0 %
                                                                   
Operating income                            $20.4   3.1 %   $19.3  2.8 %
Add: restructuring costs                    4.4      0.6     5.1     0.8
Adjusted operating income                   $24.8   3.7 %   $24.4  3.6 %
                                                                   
                                                                   
Americas                                                            
                                           (Unaudited)
                                           Three Months Ended
                                           May 24, 2013      May 25, 2012
                                                                   
Revenue                                     $478.8  100.0 % $479.2 100.0 %
Cost of sales                               323.5    67.6    333.7   69.6
Restructuring costs                         0.2      —       4.8     1.0
Gross profit                                155.1    32.4    140.7   29.4
Operating expenses                          115.4    24.1    106.2   22.2
Restructuring costs                         1.0      0.2     —       —
Operating income                            $38.7   8.1 %   $34.5  7.2 %
Add: restructuring costs                    1.2      0.2     4.8     1.0
Adjusted operating income                   $39.9   8.3 %   $39.3  8.2 %
                                                                   
                                                                   
EMEA                                                                
                                           (Unaudited)
                                           Three Months Ended
                                           May 24, 2013      May 25, 2012
                                                                   
Revenue                                     $126.7  100.0 % $129.2 100.0 %
Cost of sales                               94.0     74.2    96.0    74.3
Restructuring costs                         —        —       0.3     0.2
Gross profit                                32.7     25.8    32.9    25.5
Operating expenses                          39.8     31.4    41.7    32.3
Restructuring costs                         3.2      2.5     —       —
Operating loss                              $(10.3) (8.1)%  $(8.8) (6.8)%
Add: restructuring costs                    3.2      2.5     0.3     0.2
Adjusted operating loss                     $(7.1)  (5.6)%  $(8.5) (6.6)%
                                                                   
                                                                   
Other                                                               
                                           (Unaudited)
                                           Three Months Ended
                                           May 24, 2013      May 25, 2012
                                                                   
Revenue                                     $61.6   100.0 % $66.8  100.0 %
Cost of sales                               39.7     64.5    44.4    66.5
Restructuring costs                         —        —       —       —
Gross profit                                21.9     35.5    22.4    33.5
Operating expenses                          20.0     32.5    21.8    32.6
Restructuring costs                         —        —       —       —
Operating income                            $1.9    3.0 %   $0.6   0.9 %
Add: restructuring costs                    —        —       —       —
Adjusted operating income                   $1.9    3.0 %   $0.6   0.9 %
                                                                   
                                                                   
Corporate                                                           
                                           (Unaudited)
                                           Three Months Ended
                                           May 24, 2013      May 25, 2012
                                                                   
Operating expenses                          $9.9           $7.0   
Operating loss                              $(9.9)         $(7.0) 
Add: restructuring costs                    —               —       
Adjusted operating loss                     $(9.9)         $(7.0) 

Webcast

Steelcase will discuss first quarter results and business outlook on a
conference call and webcast at 11:00 a.m. Eastern time tomorrow. Links to the
webcast are available at ir.steelcase.com. Related presentation slides will be
available on the company's website shortly after this press release is issued.

Non-GAAP Financial Measures

This earnings release contains certain non-GAAP financial measures.A
"non-GAAP financial measure" is defined as a numerical measure of a company's
financial performance that excludes or includes amounts so as to be different
than the most directly comparable measure calculated and presented in
accordance with GAAP in the statements of income, balance sheets or statements
of cash flow of the company.Pursuant to the requirements of Regulation G, the
company has provided a reconciliation above of non-GAAP financial measures to
the most directly comparable GAAP financial measure.

The non-GAAP financial measures used within the company's earnings release
are: (1) organic revenue growth (decline), which represents the change in
revenue excluding currency translation effects and the impacts of acquisitions
and divestitures; (2) adjusted operating income (loss), which represents
operating income (loss), excluding restructuring costs; and (3) adjusted
earnings per share, which represents earnings per share, excluding
restructuring costs, net of tax.These measures are presented because
management uses this information to monitor and evaluate financial results and
trends. Therefore, management believes this information is also useful for
investors.

Forward-looking Statements

From time to time, in written and oral statements, the company discusses its
expectations regarding future events and its plans and objectives for future
operations. These forward-looking statements generally are accompanied by
words such as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "intend," "may," "possible," "potential," "predict," "project," or
other similar words, phrases or expressions. Forward-looking statements
involve a number of risks and uncertainties that could cause actual results to
vary from the company's expectations because of factors such as, but not
limited to, competitive and general economic conditions domestically and
internationally; acts of terrorism, war, governmental action, natural
disasters and other Force Majeure events; changes in the legal and regulatory
environment; restructuring activities; changes in raw materials and commodity
costs; currency fluctuations; changes in customer demands; and the other risks
and contingencies detailed in the company's most recent Annual Report on Form
10-K and its other filings with the Securities and Exchange Commission.
Steelcase undertakes no obligation to update, amend or clarify forward-looking
statements, whether as a result of new information, future events or
otherwise.

About Steelcase Inc.

For over 100 years, Steelcase Inc. has helped create great experiences for the
world's leading organizations- wherever work happens. Steelcase and our
family of brands- including Steelcase®, Coalesse®, Details®, Designtex®,
Nurture®, PolyVision® and Turnstone®- offer a comprehensive portfolio of
furnishings, products and services designed to unlock human promise and
support social, economic and environmental sustainability. We are globally
accessible through a network of channels, including approximately 670 dealers.
Steelcase is a global, industry-leading and publicly traded company with
fiscal 2013 revenue of $2.9 billion.

                                                      
                                                      
STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except per share data)
                                                      
                                             Three Months Ended
                                             May 24,   May 25,
                                              2013      2012
Revenue                                       $667.1  $675.2
Cost of sales                                 457.2    474.1
Restructuring costs                           0.2      5.1
Gross profit                                  209.7    196.0
Operating expenses                            185.1    176.7
Restructuring costs                           4.2      —
Operating income                              20.4     19.3
Interest expense                              (4.4)    (4.5)
Investment income                             0.6      1.1
Other income, net                             1.2      3.8
Income before income tax expense              17.8     19.7
Income tax expense                            4.6      6.5
Net income                                    $13.2   $13.2
                                                      
Earnings per share:                                    
Basic                                         $0.10   $0.10
Diluted                                       $0.10   $0.10
Weighted average shares outstanding - basic   126.5    128.8
Weighted average shares outstanding - diluted 127.9    128.9
Dividends declared and paid per common share  $0.10   $0.09



STEELCASE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
                                                     (Unaudited) 
                                                     May 24,     February 22,
                                                      2013        2013
ASSETS
Current assets:                                                  
Cash and cash equivalents                             $103.1    $150.4
Short-term investments                                43.7       100.5
Accounts receivable, net                              301.5      287.3
Inventories                                           146.8      137.5
Deferred income taxes                                 49.8       56.2
Other current assets                                  47.8       46.7
Total current assets                                  692.7      778.6
                                                                
Property, plant and equipment, net                    356.2      353.2
Company-owned life insurance                          227.0      225.8
Deferred income taxes                                 107.8      101.7
Goodwill                                              121.4      121.4
Other intangible assets, net                          18.5       19.2
Other assets                                          94.6       89.7
Total assets                                          $1,618.2  $1,689.6
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:                                             
Accounts payable                                      $211.9    $198.6
Short-term borrowings and current portion of          2.6        2.6
long-term debt
Accrued expenses                                      242        283.6
Employee compensation                                 95.3       129.4
Employee benefit plan obligations                     13.5       23.8
Other                                                 133.2      130.4
Total current liabilities                             456.5      484.8
                                                                
Long-term liabilities:                                           
Long-term debt less current maturities                285.8      286.4
Employee benefit plan obligations                     153.4      158.0
Other long-term liabilities                           78.1       92.4
Total long-term liabilities                           517.3      536.8
Total liabilities                                     973.8      1,021.6
                                                                
Shareholders' equity:                                            
Common stock                                          —          —
Additional paid-in capital                            5.2        27.2
Accumulated other comprehensive loss                  (6.5)      (4.2)
Retained earnings                                     645.7      645.0
Total shareholders' equity                            644.4      668.0
Total liabilities and shareholders' equity            $1,618.2  $1,689.6



STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)
(in millions)
                                                                    
                                                           Three Months Ended
                                                           May 24,   May 25,
                                                            2013      2012
OPERATING ACTIVITIES                                                 
Net income                                                  $13.2   $13.2
Depreciation and amortization                               14.1     13.6
Changes in cash surrender value of COLI                     (1.2)    (1.7)
Deferred income taxes                                       0.7      8.0
Non-cash stock compensation                                 10.8     5.0
Changes in operating assets and liabilities:                         
Accounts receivable, inventories and accounts payable       (12.9)   (32.7)
Employee compensation liabilities                           (48.0)   (36.7)
Employee benefit obligations                                (16.4)   (12.3)
Other assets and liabilities                                (2.9)    3.1
Other                                                       3.3      3.6
Net cash used in operating activities                       (39.3)   (36.9)
                                                                    
INVESTING ACTIVITIES                                                 
Capital expenditures                                        (18.4)   (10.1)
Proceeds from disposal of fixed assets                      0.9      14.1
Purchases of investments                                    (9.8)    (6.4)
Liquidations of investments                                 66.4     33.2
Other                                                       (0.4)    0.1
Net cash provided by investing activities                   38.7     30.9
                                                                    
FINANCING ACTIVITIES                                                 
Dividends paid                                              (12.5)    (11.6)
Common stock repurchases                                    (31.7)    (11.8)
Other                                                       (1.7)     (0.5)
Net cash used in financing activities                       (45.9)   (23.9)
                                                                    
Effect of exchange rate changes on cash and cash            (0.8)    (1.7)
equivalents
                                                                    
Net decrease in cash and cash equivalents                   (47.3)   (31.6)
Cash and cash equivalents, beginning of period              150.4    112.1
Cash and cash equivalents, end of period                    $103.1  $80.5

CONTACT: Investor Contact:
         Raj Mehan
         Investor Relations
         (616) 246-4251

         Media Contact:
         Laura VanSlyke
         Corporate Communications
         (616) 247-2747

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