Steelcase Reports First Quarter Fiscal 2025 Results
Steelcase Inc. (NYSE: SCS) reported Q1 fiscal 2025 revenue of $727.3 million, a 3% decline from the prior year, and net income of $10.9 million, up from $1.5 million. Adjusted EPS was $0.16, compared to $0.09 last year. Orders grew by 8%, with a 10% increase in the Americas segment. Operating income rose by $10 million, driven by international improvements. The company projects Q2 fiscal 2025 revenue between $850-875 million and EPS between $0.33-0.37. Key factors include a 180 basis point increase in gross margin, $6.3 million in restructuring costs, and a $18.7 million share repurchase. The Board declared a $0.10 per share dividend. Steelcase’s total liquidity stands at $377.8 million, with total debt at $446.5 million.
- Net income increased to $10.9 million from $1.5 million.
- Adjusted EPS rose to $0.16 from $0.09.
- Orders grew by 8%, with a 10% increase in the Americas.
- Operating income increased by $10 million.
- Q2 FY2025 revenue projection of $850-875 million.
- Share repurchase of $18.7 million in Q1 FY2025.
- Gross margin improved by 180 basis points.
- Total liquidity increased to $377.8 million.
- Revenue declined by 3% to $727.3 million.
- Americas revenue decreased by 3%.
- International revenue decreased by 3%.
- Restructuring costs of $6.3 million impacted results.
- Total debt stands at $446.5 million.
Insights
Steelcase's Q1 Fiscal 2025 financial results reveal several key insights for investors. The company reported
Notably, the order growth of 8% is a positive indicator, especially the 10% increase in the Americas, driven by corporate and education sectors. This reflects strong demand and a recovery in their backlog.
The improvement in operating income to $17.6 million, up
Restructuring costs have impacted results but are part of strategic initiatives aimed at long-term operational efficiency. The anticipated revenue range for Q2 2025 of
Investors should also note the share repurchase activity and a consistent
In short-term, the improved profitability and order growth are encouraging. Long-term, the restructuring and business transformation initiatives will be important in driving sustainable growth.
Steelcase's results illustrate interesting market dynamics. The Americas' order growth of 10% contrasts with a
The focus on large corporate customers and the education sector suggests a strategic targeting of high-value segments. The company's transformation strategy and restructuring actions are likely aimed at better aligning resources with market opportunities, evidenced by the improved operating performance in the International segment despite lower revenues.
Gross margin improvement amidst lower volumes signifies effective pricing and cost control. The emphasis on innovation and meeting evolving workplace needs, as highlighted by their presence at the NeoCon trade show, reinforces their competitive positioning in a transforming market.
For retail investors, understanding these strategic moves and their impact on financial metrics is essential. The emphasis on high-growth sectors and regions with potential macroeconomic tailwinds can provide growth continuity.
- Orders grew
8% compared to prior year with10% growth in the Americas - Operating income improved by
$10 million compared to prior year driven by International - Strong second quarter outlook driven by education and large corporate customers
- First half outlook reflects pace towards higher end of full year income targets
GRAND RAPIDS, Mich., June 20, 2024 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE: SCS) today reported first quarter revenue of
Revenue decline and order growth compared to the prior year were as follows:
| Q1 2025 vs. Q1 2024 | ||||||||
| Revenue Decline | Organic Revenue Decline | Organic Order Growth | ||||||
| Americas | (3 | )% | (1 | )% | 10 | % | ||
| International | (3 | )% | (2 | )% | 2 | % | ||
| Steelcase Inc. | (3 | )% | (1 | )% | 8 | % | ||
Revenue decreased 3 percent in the first quarter compared to the prior year, with a 3 percent decline in both the Americas and International. On an organic basis, revenue decreased 1 percent, with a 1 percent decline in the Americas and a 2 percent decline in International. The Americas revenue was impacted by a lower beginning backlog compared to the prior year (which was affected by supply chain disruptions and extended delivery timeframes), partially offset by order growth.
Orders (adjusted for the impact of a divestiture and currency translation effects) grew 8 percent in the first quarter compared to the prior year, including 10 percent growth in the Americas and 2 percent growth in International. The order growth in the Americas was primarily driven by project business with large corporate customers and our education business. The order growth in International was driven by 4 percent growth in EMEA, partially offset by a 3 percent decline in Asia Pacific. The growth in EMEA reflected growth in most markets and a decline in Germany, and the decline in Asia Pacific included declines in most markets partially offset by strong growth in India.
“We are pleased with our first quarter results, which reflected higher than expected adjusted earnings improvement and
Operating income (loss) and adjusted operating income (loss) were as follows:
| Operating income (loss) | Adjusted operating income (loss) | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||
| Three months ended | Three months ended | |||||||||||||
| May 24, 2024 | May 26, 2023 | May 24, 2024 | May 26, 2023 | |||||||||||
| Americas | $ | 18.5 | $ | 19.8 | $ | 25.9 | $ | 24.2 | ||||||
| International | (0.9 | ) | (12.5 | ) | 2.3 | (4.5 | ) | |||||||
| $ | 17.6 | $ | 7.3 | $ | 28.2 | $ | 19.7 | |||||||
Operating income of
The company recorded
“Our International segment delivered nearly
Gross margin of 32.2 percent in the first quarter included
Operating expenses of
The company recorded income tax expense of
Total liquidity, which is comprised of cash and cash equivalents, short-term investments and the cash surrender value of company-owned life insurance, aggregated to
During the first quarter, the company repurchased 1.5 million shares of its Class A Common Stock under its repurchase authorization for a total cost of
The Board of Directors has declared a quarterly cash dividend of
Outlook
At the end of the first quarter, the company’s backlog was approximately
The company expects to report earnings per share of between
The second quarter estimates include:
- gross margin of approximately 35 percent,
- projected operating expenses of between
$240 t o$245 million , which includes$4.3 million of amortization of purchased intangible assets, - projected interest expense, net of investment income and other income, net, of approximately
$3 million and - a projected effective tax rate of 27 percent.
“In March, we communicated our financial targets for fiscal 2025, which included organic revenue growth of 1 to 5 percent compared to fiscal 2024, adjusted operating income of between
“I'm encouraged by the number of customers from around the world we met with at the recent NeoCon trade show who are looking to us for help to energize and rejuvenate their offices,” said Sara Armbruster. “We believe our solutions are resonating as evidenced by our continued strong win rates and three consecutive quarters of year-over-year order growth.”
| Business Segment Results | ||||||||
| (in millions) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| May 24, 2024 | May 26, 2023 | % Change | ||||||
| Revenue | ||||||||
| Americas (1) | $ | 554.4 | $ | 572.8 | (3)% | |||
| International (2) | 172.9 | 179.1 | (3)% | |||||
| $ | 727.3 | $ | 751.9 | (3)% | ||||
| Revenue mix | ||||||
| Americas | 76.2 | % | 76.2 | % | ||
| International | 23.8 | % | 23.8 | % | ||
| Operating income (loss) | ||||||||
| Americas | $ | 18.5 | $ | 19.8 | ||||
| International | (0.9 | ) | (12.5 | ) | ||||
| $ | 17.6 | $ | 7.3 | |||||
| Operating margin | 2.4 | % | 1.0 | % | ||||
Business Segment Footnotes
- The Americas segment serves customers in the U.S., Canada, the Caribbean Islands and Latin America with a comprehensive portfolio of furniture, architectural, textile and surface imaging products that are marketed to corporate, government, healthcare, education and retail customers primarily through the Steelcase, AMQ, Coalesse, Designtex, HALCON, Orangebox, Smith System and Viccarbe brands.
- The International segment serves customers in EMEA and Asia Pacific with a comprehensive portfolio of furniture and architectural products that are marketed to corporate, government, healthcare, education and retail customers primarily through the Steelcase, Coalesse, Orangebox, Smith System and Viccarbe brands.
| QUARTER OVER QUARTER ORGANIC REVENUE GROWTH (DECLINE) BY SEGMENT | ||||||||||||
| Q1 2025 vs. Q1 2024 | ||||||||||||
| (Unaudited) | ||||||||||||
| Steelcase Inc. | Americas | International | ||||||||||
| Q1 2024 revenue | $ | 751.9 | $ | 572.8 | $ | 179.1 | ||||||
| Divestiture | (12.4 | ) | (12.4 | ) | — | |||||||
| Currency translation effects | (3.1 | ) | (0.2 | ) | (2.9 | ) | ||||||
| Q1 2024 revenue, adjusted | $ | 736.4 | $ | 560.2 | $ | 176.2 | ||||||
| Q1 2025 revenue | $ | 727.3 | $ | 554.4 | $ | 172.9 | ||||||
| Organic growth (decline) $ | $ | (9.1 | ) | $ | (5.8 | ) | $ | (3.3 | ) | |||
| Organic growth (decline) % | (1 | )% | (1 | )% | (2 | )% | ||||||
| ADJUSTED EARNINGS PER SHARE | ||||||||
| (Unaudited) | (Unaudited) | |||||||
| Three Months Ended | ||||||||
| May 24, 2024 | May 26, 2023 | |||||||
| Earnings per share | $ | 0.09 | $ | 0.01 | ||||
| Amortization of purchased intangible assets, per share | 0.04 | 0.04 | ||||||
| Income tax effect of amortization of purchased intangible assets, per share | (0.01 | ) | (0.01 | ) | ||||
| Restructuring costs, per share | 0.05 | 0.07 | ||||||
| Income tax effect of restructuring costs, per share | (0.01 | ) | (0.02 | ) | ||||
| Adjusted earnings per share | $ | 0.16 | $ | 0.09 | ||||
| ADJUSTED EBITDA | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Trailing Four Quarters Ended | ||||||||||||||||||
| August 25, 2023 | November 24, 2023 | February 23, 2024 | May 24, 2024 | May 24, 2024 | |||||||||||||||
| Net income | $ | 27.5 | $ | 30.8 | $ | 21.3 | $ | 10.9 | $ | 90.5 | |||||||||
| Income tax expense | 9.5 | 9.8 | 5.3 | 3.2 | 27.8 | ||||||||||||||
| Interest expense | 6.6 | 6.4 | 6.3 | 6.2 | 25.5 | ||||||||||||||
| Depreciation and amortization | 21.3 | 21.1 | 20.8 | 20.2 | 83.4 | ||||||||||||||
| Share-based compensation | 4.2 | 3.4 | 3.6 | 14.5 | 25.7 | ||||||||||||||
| Restructuring costs | 7.9 | 2.1 | 4.4 | 6.3 | 20.7 | ||||||||||||||
| Adjusted EBITDA | $ | 77.0 | $ | 73.6 | $ | 61.7 | $ | 61.3 | $ | 273.6 | |||||||||
| Revenue | $ | 854.6 | $ | 777.9 | $ | 775.2 | $ | 727.3 | $ | 3,135.0 | |||||||||
| Adjusted EBITDA as a percentage of revenue | 9.0 | % | 9.5 | % | 8.0 | % | 8.4 | % | 8.7 | % | |||||||||
| ADJUSTED EBITDA | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Trailing Four Quarters Ended | ||||||||||||||||||
| August 26, 2022 | November 25, 2022 | February 24, 2023 | May 26, 2023 | May 26, 2023 | |||||||||||||||
| Net income | $ | 19.6 | $ | 11.4 | $ | 15.7 | $ | 1.5 | $ | 48.2 | |||||||||
| Income tax expense | 6.8 | 5.2 | 8.7 | 1.4 | 22.1 | ||||||||||||||
| Interest expense | 7.2 | 7.6 | 7.2 | 6.6 | 28.6 | ||||||||||||||
| Depreciation and amortization | 23.5 | 23.5 | 22.8 | 20.4 | 90.2 | ||||||||||||||
| Share-based compensation | 3.1 | 2.1 | 3.6 | 13.7 | 22.5 | ||||||||||||||
| Restructuring costs | 0.5 | 10.6 | 3.9 | 8.1 | 23.1 | ||||||||||||||
| Adjusted EBITDA | $ | 60.7 | $ | 60.4 | $ | 61.9 | $ | 51.7 | $ | 234.7 | |||||||||
| Revenue | $ | 863.3 | $ | 826.9 | $ | 801.7 | $ | 751.9 | $ | 3,243.8 | |||||||||
| Adjusted EBITDA as a percentage of revenue | 7.0 | % | 7.3 | % | 7.7 | % | 6.9 | % | 7.2 | % | |||||||||
| PROJECTED ORGANIC REVENUE GROWTH | |||||
| Q2 2025 vs. Q2 2024 | |||||
| Steelcase Inc. | |||||
| Q2 2024 revenue | $ | 854.6 | |||
| Divestiture | (12.2 | ) | |||
| Currency translation effects | (2.3 | ) | |||
| Q2 2024 revenue, adjusted | $ | 840.1 | |||
| Q2 2025 revenue, projected | $ | 850 - 875 | |||
| Organic growth $ | $ | 10 - 35 | |||
| Organic growth % | 1 - 4 | % | |||
| PROJECTED ADJUSTED EARNINGS PER SHARE | ||||||||
| Three Months Ended | ||||||||
| August 23, 2024 | August 25, 2023 | |||||||
| Earnings per share | $ | 0.33 - 0.37 | $ | 0.23 | ||||
| Amortization of purchased intangible assets, per share | 0.04 | 0.03 | ||||||
| Income tax effect of amortization of purchased intangible assets, per share | (0.01 | ) | (0.01 | ) | ||||
| Restructuring costs, per share | — | 0.07 | ||||||
| Income tax effect of restructuring costs, per share | — | (0.01 | ) | |||||
| Adjusted earnings per share | $ | 0.36 - 0.40 | $ | 0.31 | ||||
| Steelcase Inc. | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| May 24, 2024 | May 26, 2023 | |||||||||||||
| Revenue | $ | 727.3 | 100.0 | % | $ | 751.9 | 100.0 | % | ||||||
| Cost of sales | 485.9 | 66.8 | 515.9 | 68.6 | ||||||||||
| Restructuring costs | 7.0 | 1.0 | 1.4 | 0.2 | ||||||||||
| Gross profit | 234.4 | 32.2 | 234.6 | 31.2 | ||||||||||
| Operating expenses | 217.5 | 29.9 | 220.6 | 29.3 | ||||||||||
| Restructuring costs (benefits) | (0.7 | ) | (0.1 | ) | 6.7 | 0.9 | ||||||||
| Operating income | 17.6 | 2.4 | 7.3 | 1.0 | ||||||||||
| Interest expense | (6.2 | ) | (0.8 | ) | (6.6 | ) | (0.9 | ) | ||||||
| Investment income | 2.4 | 0.3 | 0.5 | 0.1 | ||||||||||
| Other income, net | 0.3 | — | 1.7 | 0.2 | ||||||||||
| Income before income tax expense | 14.1 | 1.9 | 2.9 | 0.4 | ||||||||||
| Income tax expense | 3.2 | 0.4 | 1.4 | 0.2 | ||||||||||
| Net income | $ | 10.9 | 1.5 | % | $ | 1.5 | 0.2 | % | ||||||
| Operating income | $ | 17.6 | 2.4 | % | $ | 7.3 | 1.0 | % | ||||||
| Amortization of purchased intangible assets | 4.3 | 0.6 | 4.3 | 0.5 | ||||||||||
| Restructuring costs | 6.3 | 0.9 | 8.1 | 1.1 | ||||||||||
| Adjusted operating income | $ | 28.2 | 3.9 | % | $ | 19.7 | 2.6 | % | ||||||
| Americas | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
| May 24, 2024 | May 26, 2023 | |||||||||||
| Revenue | $ | 554.4 | 100.0 | % | $ | 572.8 | 100.0 | % | ||||
| Cost of sales | 364.9 | 65.8 | 388.6 | 67.8 | ||||||||
| Restructuring costs | 4.1 | 0.8 | 0.6 | 0.1 | ||||||||
| Gross profit | 185.4 | 33.4 | 183.6 | 32.1 | ||||||||
| Operating expenses | 166.7 | 30.1 | 163.1 | 28.5 | ||||||||
| Restructuring costs | 0.2 | — | 0.7 | 0.1 | ||||||||
| Operating income | 18.5 | 3.3 | 19.8 | 3.5 | ||||||||
| Amortization of purchased intangible assets | 3.1 | 0.6 | 3.1 | 0.5 | ||||||||
| Restructuring costs | 4.3 | 0.8 | 1.3 | 0.2 | ||||||||
| Adjusted operating income | $ | 25.9 | 4.7 | % | $ | 24.2 | 4.2 | % | ||||
| International | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | ||||||||||||||
| May 24, 2024 | May 26, 2023 | |||||||||||||
| Revenue | $ | 172.9 | 100.0 | % | $ | 179.1 | 100.0 | % | ||||||
| Cost of sales | 121.0 | 70.0 | 127.3 | 71.1 | ||||||||||
| Restructuring costs | 2.9 | 1.7 | 0.8 | 0.4 | ||||||||||
| Gross profit | 49.0 | 28.3 | 51.0 | 28.5 | ||||||||||
| Operating expenses | 50.8 | 29.3 | 57.5 | 32.1 | ||||||||||
| Restructuring costs (benefits) | (0.9 | ) | (0.5 | ) | 6.0 | 3.4 | ||||||||
| Operating income (loss) | (0.9 | ) | (0.5 | ) | (12.5 | ) | (7.0 | ) | ||||||
| Amortization of purchased intangible assets | 1.2 | 0.6 | 1.2 | 0.7 | ||||||||||
| Restructuring costs | 2.0 | 1.2 | 6.8 | 3.8 | ||||||||||
| Adjusted operating income (loss) | $ | 2.3 | 1.3 | % | $ | (4.5 | ) | (2.5 | )% | |||||
Webcast
Steelcase will discuss first quarter results and business outlook on a conference call at 8:30 a.m. Eastern time.
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 condensed consolidated statements of income, balance sheets or statements of cash flows of the company. The non-GAAP financial measures used are (1) organic revenue growth (decline), (2) adjusted operating income (loss), (3) adjusted earnings per share and (4) adjusted EBITDA. Pursuant to the requirements of Regulation G, the company has provided a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure in the tables above. These measures are supplemental to, and should be used in conjunction with, the most comparable GAAP measures. Management uses these non-GAAP financial measures to monitor and evaluate financial results and trends.
Organic Revenue Growth (Decline)
The company defines organic revenue growth (decline) as revenue growth (decline) excluding the impact of acquisitions and divestitures and foreign currency translation effects. Organic revenue growth (decline) is calculated by adjusting prior year revenue to include revenues of acquired companies prior to the date of the company's acquisition, to exclude revenues of divested companies and to use current year average exchange rates in the calculation of foreign-denominated revenue. The company believes organic revenue growth (decline) is a meaningful metric to investors as it provides a more consistent comparison of the company's revenue to prior periods as well as to industry peers.
Adjusted Operating Income (Loss) and Adjusted Earnings Per Share
The company defines adjusted operating income (loss) as operating income (loss) excluding amortization of purchased intangible assets and restructuring costs. The company defines adjusted earnings per share as earnings per share excluding amortization of purchased intangible assets and restructuring costs, net of related income tax effects.
Amortization of purchased intangible assets: The company may record intangible assets (such as backlog, dealer relationships, trademarks, know-how and designs and proprietary technology) when it acquires companies. The company allocates the fair value of purchase consideration to net tangible and intangible assets acquired based on their estimated fair values. The fair value estimates for these intangible assets require management to make significant estimates and assumptions, which include the useful lives of intangible assets. The company believes that adjusting for amortization of purchased intangible assets provides a more consistent comparison of its operating performance to prior periods as well as to industry peers.
Restructuring costs: Restructuring costs may be recorded as the company's business strategies change or in response to changing market trends and economic conditions. The company believes that adjusting for restructuring costs, which are primarily associated with business exit and workforce reduction costs, provides a more consistent comparison of its operating performance to prior periods as well as to industry peers.
Adjusted EBITDA
The company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted to exclude share-based compensation and restructuring costs. The company believes adjusted EBITDA provides investors with useful information regarding the operating profitability of the company as well as a useful comparison to other companies. EBITDA is a measurement commonly used in capital markets to value companies and is used by the company's lenders and rating agencies to evaluate its performance. The company adjusts EBITDA for share-based compensation as it represents a significant non-cash item which impacts its earnings. The company also adjusts EBITDA for restructuring costs to provide a more consistent comparison of its earnings to prior periods as well as to industry peers.
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 discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to the company, based on current beliefs of management as well as assumptions made by, and information currently available to, the company. Forward-looking statements generally are accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “possible,” “potential,” “predict,” “project," "target” or other similar words, phrases or expressions. Although the company believes these forward-looking statements are reasonable, they are based upon a number of assumptions concerning future conditions, any or all of which may ultimately prove to be inaccurate. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements and 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, pandemics and other Force Majeure events; cyberattacks; changes in the legal and regulatory environment; changes in raw material, commodity and other input costs; currency fluctuations; changes in customer demand; 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.
Established in 1912, Steelcase is a global design, research and thought leader in the world of work. We help people do their best work by creating places that work better. Along with more than 30 creative and technology partner brands, we design and manufacture furnishings and solutions for the many places where work happens — including learning, health and work from home. Our solutions come to life through our community of expert Steelcase dealers in approximately 770 locations, as well as our online Steelcase store and other retail partners. Founded in Grand Rapids, Michigan, Steelcase is a publicly traded company with fiscal year 2024 revenue of
| STEELCASE INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||
| (in millions, except per share data) | ||||||||
| Three Months Ended | ||||||||
| May 24, 2024 | May 26, 2023 | |||||||
| Revenue | $ | 727.3 | $ | 751.9 | ||||
| Cost of sales | 485.9 | 515.9 | ||||||
| Restructuring costs | 7.0 | 1.4 | ||||||
| Gross profit | 234.4 | 234.6 | ||||||
| Operating expenses | 217.5 | 220.6 | ||||||
| Restructuring costs (benefits) | (0.7 | ) | 6.7 | |||||
| Operating income | 17.6 | 7.3 | ||||||
| Interest expense | (6.2 | ) | (6.6 | ) | ||||
| Investment income | 2.4 | 0.5 | ||||||
| Other income, net | 0.3 | 1.7 | ||||||
| Income before income tax expense | 14.1 | 2.9 | ||||||
| Income tax expense | 3.2 | 1.4 | ||||||
| Net income | $ | 10.9 | $ | 1.5 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.09 | $ | 0.01 | ||||
| Diluted | $ | 0.09 | $ | 0.01 | ||||
| Weighted average shares outstanding - basic | 118.4 | 117.9 | ||||||
| Weighted average shares outstanding - diluted | 119.1 | 118.4 | ||||||
| Dividends declared and paid per common share | $ | 0.100 | $ | 0.100 | ||||
| STEELCASE INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in millions) | ||||||||
| (Unaudited) | ||||||||
| May 24, 2024 | February 23, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 173.2 | $ | 318.6 | ||||
| Short-term investments | 35.7 | — | ||||||
| Accounts receivable, net of allowance of | 324.5 | 338.3 | ||||||
| Inventories, net | 247.6 | 231.0 | ||||||
| Prepaid expenses | 39.5 | 31.9 | ||||||
| Other current assets | 41.7 | 39.6 | ||||||
| Total current assets | 862.2 | 959.4 | ||||||
| Property, plant and equipment, net of accumulated depreciation of | 348.2 | 352.9 | ||||||
| Company-owned life insurance ("COLI") | 168.9 | 166.9 | ||||||
| Deferred income taxes | 115.2 | 115.8 | ||||||
| Goodwill | 274.7 | 274.8 | ||||||
| Other intangible assets, net of accumulated amortization of | 90.5 | 94.6 | ||||||
| Investments in unconsolidated affiliates | 55.5 | 55.7 | ||||||
| Right-of-use operating lease assets | 151.9 | 168.6 | ||||||
| Other assets | 60.3 | 48.0 | ||||||
| Total assets | $ | 2,127.4 | $ | 2,236.7 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 224.6 | $ | 211.3 | ||||
| Current operating lease obligations | 41.7 | 45.1 | ||||||
| Employee compensation | 92.5 | 166.1 | ||||||
| Employee benefit plan obligations | 21.3 | 39.9 | ||||||
| Accrued promotions | 19.7 | 19.4 | ||||||
| Customer deposits | 47.4 | 44.8 | ||||||
| Other current liabilities | 87.9 | 80.5 | ||||||
| Total current liabilities | 535.1 | 607.1 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt | 446.5 | 446.3 | ||||||
| Employee benefit plan obligations | 98.0 | 104.5 | ||||||
| Long-term operating lease obligations | 122.8 | 138.6 | ||||||
| Other long-term liabilities | 51.9 | 53.1 | ||||||
| Total long-term liabilities | 719.2 | 742.5 | ||||||
| Total liabilities | 1,254.3 | 1,349.6 | ||||||
| Shareholders’ equity: | ||||||||
| Additional paid-in capital | 28.3 | 41.2 | ||||||
| Accumulated other comprehensive income (loss) | (66.6 | ) | (66.9 | ) | ||||
| Retained earnings | 911.4 | 912.8 | ||||||
| Total shareholders’ equity | 873.1 | 887.1 | ||||||
| Total liabilities and shareholders’ equity | $ | 2,127.4 | $ | 2,236.7 | ||||
| STEELCASE INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
| (in millions) | |||||||
| Three Months Ended | |||||||
| May 24, 2024 | May 26, 2023 | ||||||
| OPERATING ACTIVITIES | |||||||
| Net income | $ | 10.9 | $ | 1.5 | |||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 20.2 | 20.4 | |||||
| Share-based compensation | 14.8 | 14.0 | |||||
| Restructuring costs | 6.3 | 8.1 | |||||
| Other | (0.9 | ) | (1.3 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 13.6 | 11.3 | |||||
| Inventories | (16.7 | ) | 12.1 | ||||
| Cloud computing arrangements expenditures | (10.9 | ) | — | ||||
| Other assets | (10.8 | ) | (3.2 | ) | |||
| Accounts payable | 11.6 | 11.3 | |||||
| Employee compensation liabilities | (81.7 | ) | (49.1 | ) | |||
| Employee benefit obligations | (25.9 | ) | (19.3 | ) | |||
| Accrued expenses and other liabilities | 10.4 | 5.5 | |||||
| Net cash provided by (used in) operating activities | (59.1 | ) | 11.3 | ||||
| INVESTING ACTIVITIES | |||||||
| Capital expenditures | (12.1 | ) | (11.7 | ) | |||
| Purchases of short-term investments | (36.2 | ) | — | ||||
| Liquidations of short-term investments | 0.5 | — | |||||
| Other | 1.2 | 0.5 | |||||
| Net cash used in investing activities | (46.6 | ) | (11.2 | ) | |||
| FINANCING ACTIVITIES | |||||||
| Dividends paid | (12.3 | ) | (12.1 | ) | |||
| Common stock repurchases | (27.7 | ) | (3.3 | ) | |||
| Borrowings on global committed bank facility | — | 67.2 | |||||
| Repayments on global committed bank facility | — | (67.2 | ) | ||||
| Repayments on note payable | — | (32.2 | ) | ||||
| Other | — | (2.7 | ) | ||||
| Net cash used in financing activities | (40.0 | ) | (50.3 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 0.1 | (0.4 | ) | ||||
| Net decrease in cash, cash equivalents and restricted cash | (145.6 | ) | (50.6 | ) | |||
| Cash and cash equivalents and restricted cash, beginning of period (1) | 325.9 | 97.2 | |||||
| Cash and cash equivalents and restricted cash, end of period (2) | $ | 180.3 | $ | 46.6 | |||
(1) These amounts include restricted cash of
(2) These amounts include restricted cash of
Restricted cash primarily represents funds held in escrow for potential future workers’ compensation and product liability claims. The restricted cash balance is included as part of Other assets on the Condensed Consolidated Balance Sheets.
| CONTACT: | Investor Contact: |
| Mike O'Meara | |
| Investor Relations | |
| ir@steelcase.com | |
| Media Contact: | |
| Brodie Bertrand | |
| Corporate Communications | |
| communications@steelcase.com | |
| Source: Steelcase | |
| SC-ERR |
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