Steelcase Reports First Quarter Results

Steelcase Reports First Quarter Results

Initiates Additional Project to Strengthen Competitiveness in EMEA

GRAND RAPIDS, Mich., June 26, 2014 (GLOBE NEWSWIRE) -- Steelcase Inc.
(NYSE:SCS) today reported first quarter revenue of $723.1 million and net
income of $21.0 million, or diluted earnings per share of $0.17. Excluding net
restructuring benefits, adjusted earnings were $0.12 per share. In the prior
year, Steelcase reported $667.1 million of revenue, diluted earnings per share
of $0.10 and adjusted earnings of $0.13 per share.

Organic revenue growth over the prior year was 8 percent after adjusting for
approximately $4.4 million of favorable currency translation effects.In the
Americas, organic revenue growth over the prior year was 6 percent.The EMEA
segment posted organic revenue growth of 10 percent, driven primarily by
additional shipping days in the current quarter and higher levels of project
business.The Other category posted organic revenue growth of 14 percent,
driven by strong project business at PolyVision.

Current quarter operating income of $36.4 million compares to operating income
of $20.4 million in the prior year.First quarter adjusted operating income of
$26.7 million improved modestly compared with adjusted operating income of
$24.8 million in the prior year.Operating leverage from the revenue growth
was largely offset by higher cost of sales.

"We believe our revenue growth in the U.S. continued to outpace the overall
industry, and we were pleased to see improved project business in various
markets across EMEA and Asia Pacific," said Jim Keane, president and
CEO."Earnings were lower than our expectations due to less than expected
growth in the Americas and higher costs associated with product warranties,
freight and distribution, some of which are expected to continue to impact our
results through the second quarter."

Cost of sales of 69.8 percent of revenue in the current quarter increased 130
basis points compared to the prior year.In the Americas, cost of sales
increased by 70 basis points over the prior year primarily due to higher
warranty, freight and distribution costs. In EMEA, cost of sales increased
by 140 basis points driven largely by disruption costs associated with the
manufacturing footprint changes.The Other category cost of sales increased
330 basis points over the prior year, due to competitive pricing pressures and
higher overhead costs in Asia Pacific.

Operating expenses were $191.9 million in the first quarter, an increase of
$6.8 million over the prior year.This increase was largely due to higher
variable compensation expense, driven in part by restructuring benefits, and
unfavorable currency translation effects.As a percentage of revenue,
operating expenses improved by 130 basis points.

Net restructuring benefits of $9.7 million in the current quarter included
restructuring costs related to previously announced actions in EMEA and a
$12.0 million gain related to the sale of an idle manufacturing facility in
the Americas.

Other income, net in the first quarter of $3.5 million increased $2.3 million
compared to the prior year, primarily due to higher equity in income of
unconsolidated ventures.

Cash, short-term investments and the cash surrender value of company-owned
life insurance totaled $398 million and total debt was $286 million at the end
of the first quarter.

The Board of Directors has declared a cash dividend of $0.105 per share, to be
paid on or before July 16, 2014 to shareholders of record as of July 7, 2014.

The company announced today that it has initiated procedures with the
applicable works councils regarding a project to exit a manufacturing facility
in France and transfer its activities to other existing facilities in the EMEA
region to safeguard the company's global competitiveness.This project may
involve the transfer of the operations of the facility to a third party or
result in a closure, and the total costs of the project are currently
estimated at $30 to $50 million, with anticipated annual savings of
approximately $10 million when fully implemented.

"The action announced today represents another step of our multi-year strategy
to restore profitability in this region and safeguard our global
competitiveness," said Dave Sylvester, senior vice president and
CFO."Together with our plan to exit a manufacturing facility in Germany
(announced in the third quarter of fiscal 2014), these actions are expected to
reduce our adjusted operating losses by approximately $20 million on an
annualized basis when fully implemented."

Outlook

In the Americas, first quarter orders were flat compared to the prior year,
and customer order backlog at the end of the first quarter increased
approximately 6 percent compared to the prior year.EMEA first quarter orders
grew significantly due to favorable currency fluctuations, additional shipping
days in the current quarter and strength in project business (including a
large government project won in fiscal 2013 which is expected to begin
shipping in the second half of fiscal 2015).As a result, EMEA customer order
backlog at the end of the first quarter increased approximately 23 percent
compared to the prior year.The company expects second quarter fiscal 2015
revenue to be in the range of $760 to $785 million, which reflects expected
organic revenue growth in the range of 0 to 3 percent over the prior year.The
company reported revenue of $757.6 million in the second quarter of fiscal
2014.

Steelcase expects to report diluted earnings between $0.18 to $0.22 per share
for the second quarter of fiscal 2015. This estimate includes approximately
$0.04 per share of restructuring costs relating to previously announced
restructuring projects.Adjusted for the estimated restructuring costs, the
company expects to report adjusted earnings between $0.22 to $0.26 per
share.The estimates also include approximately $6 million of operating costs
associated with disruption.The estimates do not include any restructuring
costs associated with the project announced today due to the uncertainty of
the timing and amount of such costs.  Steelcase reported diluted earnings per
share of $0.22 and adjusted earnings per share of $0.24 in the second quarter
of fiscal 2014.

"Taking into consideration a strong project pipeline and our award-winning new
product introductions, we expect to continue our growth in the Americas in the
second quarter, which would mark the 18^th consecutive quarter of organic
revenue growth," Mr. Keane said. "And we remain optimistic about the
longer-term potential across EMEA and Asia Pacific as we continue to improve
our competitiveness.Projects like the one we announced today are always
challenging, and I am thankful for an organization dedicated to our success
and ready to address those challenges."

Business Segment Results
(in millions)
                                                               
                                (Unaudited)                      
                                Three Months Ended               
                                May 30,          May 24,         %
                                 2014             2013            Change
                                                               
Revenue                                                         
Americas (1)                     $506.3         $478.8        5.7%
EMEA (2)                         147.6            126.7           16.5%
Other (3)                        69.2             61.6            12.3%
Consolidated revenue             $723.1         $667.1        8.4%
                                                               
Operating income (loss)                                         
Americas                         $53.2          $38.7         
EMEA                             (7.7)            (10.3)          
Other                            —                1.9             
Corporate (4)                    (9.1)            (9.9)           
Consolidated operating income    $36.4          $20.4         
                                                               
Operating income percent         5.0%            3.1%           
                                                               
Revenue Mix                                                     
Americas (1)                     70.0%           71.8%          
EMEA (2)                         20.4%           19.0%          
Other (3)                        9.6%            9.2%           
                                                               
                                                               
Business Segment Footnotes                                      
                                                               
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 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 BY SEGMENT
Q1 2015 vs. Q1 2014
                     Steelcase Inc.     Americas     EMEA         Other
                                                                   category
                                                               
Q1 2014 revenue       $667.1           $478.8     $126.7     $61.6
Currency translation  4.4                (2.4)        7.6          (0.8)
effects*
Q1 2014 revenue,      671.5              476.4        134.3        60.8
adjusted
                                                               
Q1 2015 revenue,      723.1              506.3        147.6        69.2
reported
Organic growth $      $51.6            $29.9      $13.3      $8.4
Organic growth %      8%                 6%           10%          14%
                                                               
* Currency translation effects represent the estimated net effect of
translating Q1 2014 foreign currency revenues using the average exchange rates
during Q1 2015.
                                                               
PROJECTED ORGANIC REVENUE GROWTH                                 
Q2 2015 vs. Q2 2014                                              
                     Steelcase Inc.                             
                                                               
Q2 2014 revenue       $ 758                                      
Currency translation  2                                          
effects*
Q2 2014 revenue,      760                                        
adjusted
                                                               
Q2 2015 revenue,      760 - 785                                  
projected
Organic growth $      $ 0 - 25                                   
Organic growth %      0% - 3%                                    
                                                               
* Currency translation effects represent the estimated net effect of
translating Q2 2014 foreign currency revenues using the exchange rate at the
end of Q1 2015.

                                                                 
                                                                 
ADJUSTED EARNINGS PER SHARE                          (Unaudited)
                                                    Three Months Ended
                                                    May 30,       May 24,
                                                     2014          2013
                                                                 
Diluted earnings per share                           $0.17       $0.10
Restructuring costs (benefits) per share, net of tax (0.05)        0.03
Diluted earnings per share, adjusted                 $0.12       $0.13
                                                                 
                                                                 
PROJECTED ADJUSTED EARNINGS PER SHARE                (Unaudited)
                                                    ThreeMonths Ended
                                                     August 29,    August 23,
                                                    2014          2013
                                                     (projected)
                                                                 
Diluted earnings per share                           $0.18 - 0.22 $0.22
Restructuring costs per share, net of tax            0.04          0.02
Diluted earnings per share, adjusted                 $0.22 - 0.26 $0.24

                                                                   
                                                                   
Steelcase Inc.                                                      
                                            (Unaudited)
                                            Three Months Ended
                                            May 30,          May 24,
                                             2014             2013
Revenue                                      $723.1 100.0% $667.1 100.0%
Cost of sales                                504.5   69.8   457.2   68.5
Restructuring costs (benefits)               (10.5)  (1.5)  0.2     —
Gross profit                                 229.1   31.7   209.7   31.5
Operating expenses                           191.9   26.5   185.1   27.8
Restructuring costs                          0.8     0.2    4.2     0.6
Operating income                             $36.4  5.0%   $20.4  3.1%
Interest expense, investment income and      (0.5)   —     (2.6)   (0.4)
other income, net
Income before income tax expense             35.9    5.0    17.8    2.7
Income tax expense                           14.9    2.1    4.6     0.7
Net income                                   $21.0  2.9%   $13.2  2.0%
                                                                   
Operating income                             $36.4  5.0%   $20.4  3.1%
Add: restructuring costs (benefits)          (9.7)   (1.3)  4.4     0.6
Adjusted operating income                    $26.7  3.7%   $24.8  3.7%
                                                                   
Americas                                                            
                                            (Unaudited)
                                            Three Months Ended
                                            May 30,          May 24,
                                             2014             2013
Revenue                                      $506.3 100.0% $478.8 100.0%
Cost of sales                                345.9   68.3   323.5   67.6
Restructuring costs (benefits)               (11.6)  (2.3)  0.2     —
Gross profit                                 172.0   34.0   155.1   32.4
Operating expenses                           118.8   23.5   115.4   24.1
Restructuring costs                          —      —     1.0     0.2
Operating income                             $53.2  10.5%  $38.7  8.1%
Add: restructuring costs (benefits)          (11.6)  (2.3)  1.2     0.2
Adjusted operating income                    $41.6  8.2%   $39.9  8.3%
                                                                   
EMEA                                                                
                                            (Unaudited)
                                            Three Months Ended
                                            May 30,          May 24,
                                             2014             2013
Revenue                                      $147.6 100.0% $126.7 100.0%
Cost of sales                                111.7   75.6   94.0    74.2
Restructuring costs                          1.1     0.8    —      —
Gross profit                                 34.8    23.6   32.7    25.8
Operating expenses                           41.7    28.3   39.8    31.4
Restructuring costs                          0.8     0.5    3.2     2.5
Operating loss                               $(7.7)  (5.2)% $(10.3) (8.1)%
Add: restructuring costs                     1.9     1.3    3.2     2.5
Adjusted operating loss                      $(5.8)  (3.9)% $(7.1)  (5.6)%
                                                                   
Other category                                                      
                                            (Unaudited)
                                            Three Months Ended
                                            May 30,          May 24,
                                             2014             2013
Revenue                                      $69.2  100.0% $61.6  100.0%
Cost of sales                                46.9    67.8   39.7    64.5
Restructuring costs                          —      —     —      —
Gross profit                                 22.3    32.2   21.9    35.5
Operating expenses                           22.3    32.2   20.0    32.5
Restructuring costs                          —      —     —      —
Operating income                             $—     —%    $1.9   3.0%
Add: restructuring costs                     —      —     —      —
Adjusted operating income                    $—     —%    $1.9   3.0%
                                                                   
Corporate                                                           
                                            (Unaudited)
                                            Three Months Ended
                                            May 30,          May 24,
                                             2014             2013
Operating loss                               $(9.1)         $(9.9)  
Add: restructuring costs                     —             —      
Adjusted operating loss                      $(9.1)         $(9.9)  

Webcast

Steelcase will discuss first quarter results and business outlook on a
conference call and webcast at 11:00 a.m. Eastern time today. 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 (benefits) and goodwill
and intangible asset impairment charges; and (3) adjusted earnings (loss) per
share, which represents earnings (loss) per share, excluding restructuring
costs (benefits) and goodwill and intangible asset impairment charges, 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, across industries. We demonstrate this through
our family of brands- including Steelcase®, Coalesse®, Designtex®, Details®,
PolyVision® and Turnstone®. Together, they offer a comprehensive portfolio of
architecture, furniture and technology 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 over 800 dealer locations. Steelcase is a global, industry-leading
and publicly traded company with fiscal 2014 revenue of $3.0 billion.


STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except per share data)
                                                      
                                             Three Months Ended
                                             May 30,   May 24,
                                              2014      2013
Revenue                                       $723.1  $667.1
Cost of sales                                 504.5    457.2
Restructuring costs (benefits)                (10.5)   0.2
Gross profit                                  229.1    209.7
Operating expenses                            191.9    185.1
Restructuring costs                           0.8      4.2
Operating income                              36.4     20.4
Interest expense                              (4.4)    (4.4)
Investment income                             0.4      0.6
Other income, net                             3.5      1.2
Income before income tax expense              35.9     17.8
Income tax expense                            14.9     4.6
Net income                                    $21.0   $13.2
                                                      
Earnings per share:                                    
Basic                                         $0.17   $0.10
Diluted                                       $0.17   $0.10
Weighted average shares outstanding - basic   125.3     126.5
Weighted average shares outstanding - diluted 126.6     127.9
                                                      
Dividends declared and paid per common share  $0.105  $0.100



STEELCASE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except share data)
                                                                
                                                      May 30,    February 28,
                                                       2014       2014
ASSETS
Current assets:                                                  
Cash and cash equivalents                              $158.3   $201.8
Short-term investments                                 84.8      119.5
Accounts receivable, net                               322.1     306.8
Inventories                                            161.1     151.5
Deferred income taxes                                  47.8      56.0
Prepaid expenses                                       20.8      19.3
Other current assets                                   29.2      35.0
Total current assets                                   824.1     889.9
                                                                
Property, plant and equipment, net                     377.5     377.0
Company-owned life insurance ("COLI")                  155.2     154.3
Deferred income taxes                                  79.6      85.1
Goodwill                                               108.3     108.1
Other intangible assets, net                           16.2      16.6
Investments in unconsolidated affiliates               54.4      53.0
Other assets                                           40.9      42.7
Total assets                                           $1,656.2 $1,726.7
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:                                             
Accounts payable                                       $220.0   $212.5
Short-term borrowings and current portion of long-term 2.6       2.6
debt
Accrued expenses:                                                
Employee compensation                                  87.3      152.8
Employee benefit plan obligations                      17.5      26.1
Customer deposits                                      17.2      16.0
Product warranties                                     20.4      17.5
Other                                                  107.8     110.7
Total current liabilities                              472.8     538.2
                                                                
Long-term liabilities:                                           
Long-term debt less current maturities                 283.8     284.4
Employee benefit plan obligations                      146.9     151.1
Other long-term liabilities                            65.0      75.9
Total long-term liabilities                            495.7     511.4
Total liabilities                                      968.5     1,049.6
                                                                
Shareholders' equity:                                            
Common stock                                           —        —
Additional paid-in capital                             3.7       —
Accumulated other comprehensive income                 0.3       0.8
Retained earnings                                      683.7     676.3
Total shareholders' equity                             687.7     677.1
Total liabilities and shareholders' equity             $1,656.2 $1,726.7



STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)
(in millions)
                                                                    
                                                           Three Months Ended
                                                           May 30,   May 24,
                                                            2014      2013
OPERATING ACTIVITIES                                                 
Net income                                                  $21.0   $13.2
Depreciation and amortization                               14.7     14.1
Deferred income taxes                                       13.0     0.7
Restructuring costs (benefits)                              (9.7)    4.4
Non-cash stock compensation                                 9.6      10.8
Equity in income of unconsolidated affiliates               (3.7)    (1.7)
Dividends received from unconsolidated affiliates           2.3      0.7
Other                                                       (1.8)    (1.3)
Changes in operating assets and liabilities:                         
Accounts receivable                                         (15.0)   (16.6)
Inventories                                                 (9.5)    (10.4)
Other assets                                                (10.5)   (2.5)
Accounts payable                                            7.6      14.1
Employee compensation liabilities                           (74.4)   (48.0)
Employee benefit obligations                                (14.6)   (16.4)
Accrued expenses and other liabilities                      (1.6)    (0.4)
Net cash used in operating activities                       (72.6)   (39.3)
                                                                    
INVESTING ACTIVITIES                                                 
Capital expenditures                                        (15.8)   (18.4)
Proceeds from disposal of fixed assets                      19.0     0.9
Purchases of investments                                    (27.0)   (9.8)
Liquidations of investments                                 62.8     66.4
Other                                                       9.8      (0.4)
Net cash provided by investing activities                   48.8     38.7
                                                                    
FINANCING ACTIVITIES                                                 
Dividends paid                                              (13.6)   (12.5)
Common stock repurchases                                    (5.9)    (31.7)
Excess tax benefit from vesting of stock awards             —       (1.1)
Repayments of long-term debt                                (0.6)    (0.6)
Net cash used in financing activities                       (20.1)   (45.9)
                                                                    
Effect of exchange rate changes on cash and cash            0.4      (0.8)
equivalents
                                                                    
Net decrease in cash and cash equivalents                   (43.5)   (47.3)
Cash and cash equivalents, beginning of period              201.8    150.4
Cash and cash equivalents, end of period                    $158.3  $103.1

CONTACT: Investor Contact:
         Raj Mehan
         Investor Relations
         (616) 246-4251
        
         Media Contact:
         Lauren Parker
         Corporate Communications
         (212) 931-6143

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