Steelcase Reports Fourth Quarter and Fiscal 2021 Results
Steelcase reported fourth quarter revenue of $677.1 million and net income of $6.6 million or $0.06 EPS, substantially down from $946.2 million and $66.5 million in the prior year. The 28% revenue decline reflects ongoing challenges from the COVID-19 pandemic, with particular impacts noted in the Americas, EMEA, and Other segments. The company has projected first quarter fiscal 2022 revenue between $540 million and $570 million, anticipating 5-11% organic growth due to increased vaccination rates and an expected return to office. Operating expenses were reduced significantly, down by $52.5 million.
- Cost reduction actions resulted in $52 million savings.
- Estimated 5-11% organic growth expected based on vaccination increases.
- Fourth quarter revenue decreased by 28% year-over-year.
- Operating income fell by $60.7 million to $8.3 million.
- Fourth quarter revenue of
$677 million and EPS of$0.06 significantly impacted by COVID-19 pandemic - Actions to reduce fixed costs and discretionary spending supported profitability for fiscal 2021 while protecting investments to drive future growth
- Increasing customer engagement driven by publication of company research, positive vaccination trends and improved sentiment about returning to offices
- Company provides select financial targets for fiscal 2022
GRAND RAPIDS, Mich., March 23, 2021 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE: SCS) today reported fourth quarter revenue of
Revenue decreased 28 percent in the fourth quarter compared to the prior year, or 25 percent on an organic basis, as all segments continued to be impacted by the prolonged economic uncertainty and delay in return-to-office plans across the world. The revenue decrease included a decline of 30 percent in the Americas, 23 percent in EMEA and 28 percent in the Other category. On an organic basis, the Americas revenue declined by 26 percent, EMEA revenue declined by 29 percent and the Other category revenue declined by 12 percent. The company estimates fourth quarter revenue benefited from shipment delays of approximately
Orders (adjusted for the impact of acquisitions and divestitures, currency translation effects, and the impact of an extra week in the prior year) declined 31 percent in the fourth quarter compared to the prior year, driven by broad-based declines in the Americas and EMEA. The Americas declined 32 percent compared to the prior year, reflecting a 2 percent sequential decline from the third quarter, compared to larger seasonal declines historically. EMEA declined 38 percent compared to the prior year with broad-based declines across all markets. In the fourth quarter of fiscal 2020, EMEA grew 12 percent compared to the prior year. The Other category declined 14 percent compared to the prior year and included growth of 11 percent in China compared to the prior year.
| Revenue and order decline by segment | ||||||||||
| Q4 2021 vs. Q4 2020 | ||||||||||
| Revenue Decline | Organic Revenue Decline | Organic Order Decline | ||||||||
| Americas | 30 | % | 26 | % | 32 | % | ||||
| EMEA | 23 | % | 29 | % | 38 | % | ||||
| Other category | 28 | % | 12 | % | 14 | % | ||||
| Steelcase Inc. | 28 | % | 25 | % | 31 | % | ||||
"We delivered better than expected revenue and earnings per share in the fourth quarter while navigating multiple supply chain challenges in addition to the resurgence of COVID," said Jim Keane, president and CEO. "As we move through what we believe could be the bottom of this cycle over the next quarter, I'm confident our people will continue to maintain strong cost controls, help our customers design their return to office plans, and position us to lead our industry in the expected recovery."
Operating income of
Gross margin of 28.4 percent in the fourth quarter represented a 410 basis point decline compared to the prior year, driven by the impact of the lower revenue, higher costs related to container shortages, port congestions and other supply chain challenges, and higher freight and labor costs related to recovering from the temporary operations shutdown in the third quarter, partially offset by lower variable compensation expense and lower overhead costs.
"We are managing several supply chain challenges, including the availability of steel and component parts and a recent supply chain disruption in the foam used in the manufacturing of certain of our seating products, which are expected to continue to impact our costs in the near term," said Dave Sylvester, senior vice president and CFO. "At the same time, we are beginning to experience significant inflation related to steel, component parts, ocean freight, and petroleum-based commodities, which we expect to impact our profitability over the next couple quarters until our recently announced price increase is implemented."
Operating expenses of
The company recorded an income tax benefit of
Total liquidity, comprised of cash, cash equivalents and the cash surrender value of company-owned life insurance, aggregated to
The Board of Directors has declared a quarterly cash dividend of
Fiscal 2021 Results
For fiscal 2021, the company recorded
Revenue decreased by 30 percent in fiscal 2021, with a 31 percent decrease in the Americas, a 24 percent decrease in EMEA and a 38 percent decrease in the Other category. On an organic basis, fiscal 2021 revenue represented a decline of 29 percent compared to the prior year, with a 30 percent decline in the Americas, a 26 percent decline in EMEA and a 25 percent decline in the Other category.
Operating income for fiscal 2021 of
"Fiscal 2021 was clearly an extraordinary year as the COVID-19 pandemic had a significant impact on our revenue," said Jim Keane, president and CEO. "We took bold and swift actions to protect our employees and our company, which kept our liquidity strong and offset a large portion of the impact from the revenue decline. We also stayed invested for the expected recovery by not reducing our employee base in direct proportion to our revenue decline."
Outlook
At the end of the fourth quarter, the company’s backlog of customer orders was approximately
The company expects to report a loss per share of between
Beyond the first quarter, the company is targeting seasonally higher revenue in the second quarter, but a decline compared to the prior year which benefited from a strong beginning backlog as a result of the government mandated shutdowns in the first quarter of fiscal 2021. The company is targeting net income in the second quarter that would approximately offset the first quarter net loss and includes a
"As the pace of COVID vaccinations increases, many company leaders are confirming their plans to begin bringing their employees back to the office," said Jim Keane. "We're working with many of our customers to re-start paused projects and to engage in new opportunities by sharing what we've learned about how to make their spaces safer, more flexible and more productive. We saw strong double-digit increases in new project opportunities and customer requests for proposals in the Americas, as well as customer visits to our Grand Rapids location (both physical and virtual), in February compared to January, which supports our expectations for a strong recovery in the second half of the year."
| Business Segment Results | |||||||||||||||||||||
| (in millions) | |||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
| February 26, 2021 | February 28, 2020 | % Change | February 26, 2021 | February 28, 2020 | % Change | ||||||||||||||||
| Revenue | |||||||||||||||||||||
| Americas (1) | $ | 467.0 | $ | 666.2 | (29.9 | )% | $ | 1,848.5 | $ | 2,672.9 | (30.8 | )% | |||||||||
| EMEA (2) | 142.6 | 185.7 | (23.2 | )% | 511.3 | 669.6 | (23.6 | )% | |||||||||||||
| Other (3) | 67.5 | 94.3 | (28.4 | )% | 236.4 | 381.2 | (38.0 | )% | |||||||||||||
| Consolidated revenue | $ | 677.1 | $ | 946.2 | (28.4 | )% | $ | 2,596.2 | $ | 3,723.7 | (30.3 | )% | |||||||||
| Operating income (loss) | |||||||||||||||||||||
| Americas | $ | 12.1 | $ | 42.6 | $ | 97.0 | $ | 240.0 | |||||||||||||
| EMEA | (0.5 | ) | 8.3 | (32.3 | ) | 9.9 | |||||||||||||||
| Other | 2.9 | 24.9 | 0.2 | 39.4 | |||||||||||||||||
| Corporate (4) | (7.8 | ) | (6.8 | ) | (21.9 | ) | (32.3 | ) | |||||||||||||
| Consolidated operating income | $ | 6.7 | $ | 69.0 | $ | 43.0 | $ | 257.0 | |||||||||||||
| Operating income percent | 1.0 | % | 7.3 | % | 1.7 | % | 6.9 | % | |||||||||||||
| Revenue mix | |||||||||||||||||||||
| Americas | 69.0 | % | 70.4 | % | 71.2 | % | 71.8 | % | |||||||||||||
| EMEA | 21.1 | % | 19.6 | % | 19.7 | % | 18.0 | % | |||||||||||||
| Other | 9.9 | % | 10.0 | % | 9.1 | % | 10.2 | % | |||||||||||||
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 and technology products marketed to corporate, government, healthcare, education and retail customers through the Steelcase, Coalesse, Smith System, AMQ and Orangebox brands.
- The EMEA segment serves customers in Europe, the Middle East and Africa primarily under the Steelcase, Orangebox and Coalesse brands, with a comprehensive portfolio of furniture, architectural and technology products.
- The Other category includes Asia Pacific and Designtex. In 2020, the Other category also included PolyVision, which was sold in February 2020.
- Corporate costs include unallocated portions of shared service functions, such as information technology, corporate facilities, finance, research, human resources, legal and customer aviation, plus deferred compensation expense and income or losses associated with company-owned life insurance.
| QUARTER OVER QUARTER ORGANIC REVENUE DECLINE BY SEGMENT | |||||||||||||||
| Q4 2021 vs. Q4 2020 | |||||||||||||||
| Steelcase Inc. | Americas | EMEA | Other category | ||||||||||||
| Q4 2020 revenue | $ | 946.2 | $ | 666.2 | $ | 185.7 | $ | 94.3 | |||||||
| PolyVision divestiture | (13.3 | ) | — | — | (13.3 | ) | |||||||||
| Dealer acquisition | 2.2 | 2.2 | — | — | |||||||||||
| Impact of additional week | (48.4 | ) | (42.7 | ) | — | (5.7 | ) | ||||||||
| Currency translation effects* | 18.9 | 1.3 | 16.3 | 1.3 | |||||||||||
| Q4 2020 revenue, adjusted | 905.6 | 627.0 | 202.0 | 76.6 | |||||||||||
| Q4 2021 revenue | 677.1 | 467.0 | 142.6 | 67.5 | |||||||||||
| Organic decline $ | $ | (228.5 | ) | $ | (160.0 | ) | $ | (59.4 | ) | $ | (9.1 | ) | |||
| Organic decline % | (25 | )% | (26 | )% | (29 | )% | (12 | )% | |||||||
| * Currency translation effects represent the estimated net effect of translating Q4 2020 foreign currency revenues using the average exchange rates during Q4 2021. | |||||||||||||||
| YEAR OVER YEAR ORGANIC REVENUE DECLINE BY SEGMENT | |||||||||||||||
| 2021 vs. 2020 | |||||||||||||||
| Steelcase Inc. | Americas | EMEA | Other category | ||||||||||||
| 2020 revenue | $ | 3,723.7 | $ | 2,672.9 | $ | 669.6 | $ | 381.2 | |||||||
| PolyVision divestiture | (61.5 | ) | — | — | (61.5 | ) | |||||||||
| Dealer acquisition | 2.2 | 2.2 | — | — | |||||||||||
| Impact of additional week | (48.4 | ) | (42.7 | ) | — | (5.7 | ) | ||||||||
| Currency translation effects* | 23.0 | (0.8 | ) | 24.3 | (0.5 | ) | |||||||||
| 2020 revenue, adjusted | 3,639.0 | 2,631.6 | 693.9 | 313.5 | |||||||||||
| 2021 revenue | 2,596.2 | 1,848.5 | 511.3 | 236.4 | |||||||||||
| Organic decline $ | $ | (1,042.8 | ) | $ | (783.1 | ) | $ | (182.6 | ) | $ | (77.1 | ) | |||
| Organic decline % | (29 | )% | (30 | )% | (26 | )% | (25 | )% | |||||||
| * Currency translation effects represent the estimated net effect of translating 2020 foreign currency revenues using the average exchange rates during 2021. | |||||||||||||||
| PROJECTED ORGANIC REVENUE GROWTH | |||
| Q1 2022 vs. Q1 2021 | |||
| Steelcase Inc. | |||
| Q1 2021 revenue | $ | 482.8 | |
| Dealer acquisition | 18.3 | ||
| Currency translation effects* | 12.3 | ||
| Q1 2021 revenue, adjusted | $ | 513.4 | |
| Q1 2022 revenue, projected | $ | 540 - 570 | |
| Organic growth $ | $ | 27 - 57 | |
| Organic growth % | |||
| * Currency translation effects represent the estimated net effect of translating Q1 2022 foreign currency revenues using the exchange rates at the end of Q4 2021. | |||
| ADJUSTED EARNINGS (LOSS) PER SHARE | |||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||
| Diluted earnings (loss) per share | $ | 0.06 | $ | 0.55 | $ | 0.22 | $ | 1.66 | |||||||
| Goodwill impairment charge, per share | — | — | 0.15 | — | |||||||||||
| Restructuring costs, per share | 0.01 | — | 0.24 | — | |||||||||||
| Income tax effect of restructuring costs, per share | (0.01 | ) | — | (0.09 | ) | — | |||||||||
| Gain on sale of PolyVision, per share | — | (0.17 | ) | — | (0.17 | ) | |||||||||
| Variable compensation impact of sale of PolyVision, per share | — | 0.11 | — | 0.11 | |||||||||||
| Income tax effect of sale of PolyVision, per share | — | (0.10 | ) | — | (0.10 | ) | |||||||||
| Adjusted earnings (loss) per share | $ | 0.06 | $ | 0.39 | $ | 0.52 | $ | 1.50 | |||||||
| PROJECTED ADJUSTED EARNINGS (LOSS) PER SHARE | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| May 28, 2021 (Projected) | May 29, 2020 | |||||
| Diluted earnings (loss) per share | $ | (0.27) - (0.34) | $ | (0.33 | ) | |
| Goodwill impairment charge, per share | — | 0.15 | ||||
| Adjusted earnings (loss) per share | $ | (0.27) - (0.34) | $ | (0.18 | ) | |
| IMPACT OF SALE OF POLYVISION ON Q4 AND FISCAL YEAR 2020 | |||||||||||||||||||
| Americas | EMEA | Other category | Corporate | Total | |||||||||||||||
| Cost of sales | |||||||||||||||||||
| Variable compensation expense | $ | 3.5 | $ | 0.6 | $ | 0.2 | $ | — | $ | 4.3 | |||||||||
| Total impact on cost of sales | 3.5 | 0.6 | 0.2 | — | 4.3 | ||||||||||||||
| Operating expenses | |||||||||||||||||||
| Gain on sale | — | — | (21.0 | ) | — | (21.0 | ) | ||||||||||||
| Variable compensation expense | 6.8 | 1.2 | 0.4 | 0.7 | 9.1 | ||||||||||||||
| Total impact on operating expenses | $ | 6.8 | $ | 1.2 | $ | (20.6 | ) | $ | 0.7 | $ | (11.9 | ) | |||||||
| Total impact on operating income | $ | (10.3 | ) | $ | (1.8 | ) | $ | 20.4 | $ | (0.7 | ) | $ | 7.6 | ||||||
| Tax expense (benefit), net | $ | (12.1 | ) | ||||||||||||||||
| Total impact on net income | $ | 19.7 | |||||||||||||||||
| Steelcase Inc. | |||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||||||||||||||
| Revenue | $ | 677.1 | 100.0 | % | $ | 946.2 | 100.0 | % | $ | 2,596.2 | 100.0 | % | $ | 3,723.7 | 100.0 | % | |||||||||||
| Cost of sales | 483.1 | 71.4 | 639.0 | 67.5 | 1,822.8 | 70.2 | 2,508.5 | 67.4 | |||||||||||||||||||
| Restructuring costs | 1.4 | 0.2 | — | — | 10.6 | 0.4 | — | — | |||||||||||||||||||
| Gross profit | 192.6 | 28.4 | 307.2 | 32.5 | 762.8 | 29.4 | 1,215.2 | 32.6 | |||||||||||||||||||
| Operating expenses | 185.7 | 27.4 | 238.2 | 25.2 | 684.2 | 26.4 | 958.2 | 25.7 | |||||||||||||||||||
| Goodwill impairment charge | — | — | — | — | 17.6 | 0.6 | — | — | |||||||||||||||||||
| Restructuring costs | 0.2 | — | — | — | 18.0 | 0.7 | — | — | |||||||||||||||||||
| Operating income | $ | 6.7 | 1.0 | % | $ | 69.0 | 7.3 | % | $ | 43.0 | 1.7 | % | $ | 257.0 | 6.9 | ||||||||||||
| Interest expense | (6.4 | ) | (0.9 | ) | (7.2 | ) | (0.7 | ) | (27.1 | ) | (1.1 | ) | (27.3 | ) | (0.7 | ) | |||||||||||
| Investment income | 0.2 | — | 1.6 | 0.2 | 1.4 | 0.1 | 5.4 | 0.1 | |||||||||||||||||||
| Other income, net | 1.6 | 0.2 | 1.8 | 0.3 | 8.6 | 0.3 | 10.1 | 0.3 | |||||||||||||||||||
| Income before income tax expense (benefit) | 2.1 | 0.3 | 65.2 | 6.9 | 25.9 | 1.0 | 245.2 | 6.6 | |||||||||||||||||||
| Income tax expense | (4.5 | ) | (0.7 | ) | (1.3 | ) | (0.1 | ) | (0.2 | ) | — | 45.5 | 1.2 | ||||||||||||||
| Net income | $ | 6.6 | 1.0 | % | $ | 66.5 | 7.0 | % | $ | 26.1 | 1.0 | % | $ | 199.7 | 5.4 | % | |||||||||||
| Operating income | $ | 6.7 | 1.0 | % | $ | 69.0 | 7.3 | % | $ | 43.0 | 1.7 | % | $ | 257.0 | 6.9 | % | |||||||||||
| Add: goodwill impairment charge | — | — | — | — | 17.6 | 0.6 | — | — | |||||||||||||||||||
| Add: restructuring costs | 1.6 | 0.2 | — | — | 28.6 | 1.1 | — | — | |||||||||||||||||||
| Adjusted operating income | $ | 8.3 | 1.2 | % | $ | 69.0 | 7.3 | % | $ | 89.2 | 3.4 | % | $ | 257.0 | 6.9 | % | |||||||||||
| Americas | |||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||||||||||||||
| Revenue | $ | 467.0 | 100.0 | % | $ | 666.2 | 100.0 | % | $ | 1,848.5 | 100.0 | % | $ | 2,672.9 | 100.0 | % | |||||||||||
| Cost of sales | 334.3 | 71.6 | 450.1 | 67.6 | 1,285.1 | 69.5 | 1,789.1 | 66.9 | |||||||||||||||||||
| Restructuring costs | 1.4 | 0.3 | — | — | 10.6 | 0.6 | — | — | |||||||||||||||||||
| Gross profit | 131.3 | 28.1 | 216.1 | 32.4 | 552.8 | 29.9 | 883.8 | 33.1 | |||||||||||||||||||
| Operating expenses | 119.0 | 25.5 | 173.5 | 26.0 | 437.8 | 23.7 | 643.8 | 24.1 | |||||||||||||||||||
| Goodwill impairment charge | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Restructuring costs | 0.2 | — | — | — | 18.0 | 1.0 | — | — | |||||||||||||||||||
| Operating income | $ | 12.1 | 2.6 | % | $ | 42.6 | 6.4 | % | $ | 97.0 | 5.2 | % | $ | 240.0 | 9.0 | % | |||||||||||
| Add: goodwill impairment charge | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Add: restructuring costs | 1.6 | 0.3 | — | — | 28.6 | 1.6 | — | — | |||||||||||||||||||
| Adjusted operating income | $ | 13.7 | 2.9 | % | $ | 42.6 | 6.4 | % | $ | 125.6 | 6.8 | % | $ | 240.0 | 9.0 | % | |||||||||||
| EMEA | |||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||||||||||||||
| Revenue | $ | 142.6 | 100.0 | % | $ | 185.7 | 100.0 | % | $ | 511.3 | 100.0 | % | $ | 669.6 | 100.0 | % | |||||||||||
| Cost of sales | 104.0 | 72.9 | 128.2 | 69.0 | 380.4 | 74.4 | 473.2 | 70.7 | |||||||||||||||||||
| Restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Gross profit | 38.6 | 27.1 | 57.5 | 31.0 | 130.9 | 25.6 | 196.4 | 29.3 | |||||||||||||||||||
| Operating expenses | 39.1 | 27.5 | 49.2 | 26.5 | 145.6 | 28.5 | 186.5 | 27.8 | |||||||||||||||||||
| Goodwill impairment charge | — | — | — | — | 17.6 | 3.4 | — | — | |||||||||||||||||||
| Restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Operating income (loss) | $ | (0.5 | ) | (0.4 | )% | $ | 8.3 | 4.5 | % | $ | (32.3 | ) | (6.3 | )% | $ | 9.9 | 1.5 | % | |||||||||
| Add: goodwill impairment charge | — | — | — | — | 17.6 | 3.4 | — | — | |||||||||||||||||||
| Add: restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Adjusted operating income (loss) | $ | (0.5 | ) | (0.4 | )% | $ | 8.3 | 4.5 | % | $ | (14.7 | ) | (2.9 | )% | $ | 9.9 | 1.5 | % | |||||||||
| Other category | |||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||||||||||||||
| Revenue | $ | 67.5 | 100.0 | % | $ | 94.3 | 100.0 | % | $ | 236.4 | 100.0 | % | $ | 381.2 | 100.0 | % | |||||||||||
| Cost of sales | 44.8 | 66.4 | 60.7 | 64.4 | 157.3 | 66.5 | 246.2 | 64.6 | |||||||||||||||||||
| Restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Gross profit | 22.7 | 33.6 | 33.6 | 35.6 | 79.1 | 33.5 | 135.0 | 35.4 | |||||||||||||||||||
| Operating expenses | 19.8 | 29.3 | 8.7 | 9.2 | 78.9 | 33.4 | 95.6 | 25.1 | |||||||||||||||||||
| Goodwill impairment charge | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Operating income | $ | 2.9 | 4.3 | % | $ | 24.9 | 26.4 | % | $ | 0.2 | 0.1 | % | $ | 39.4 | 10.3 | % | |||||||||||
| Add: goodwill impairment charge | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Add: restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Adjusted operating income (loss) | $ | 2.9 | 4.3 | % | $ | 24.9 | 26.4 | % | $ | 0.2 | 0.1 | % | $ | 39.4 | 10.3 | % | |||||||||||
| Corporate | |||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||
| Operating loss | $ | (7.8 | ) | $ | (6.8 | ) | $ | (21.9 | ) | $ | (32.3 | ) | |||
| Add: goodwill impairment charge | — | — | — | — | |||||||||||
| Add: restructuring costs | — | — | — | — | |||||||||||
| Adjusted operating loss | $ | (7.8 | ) | $ | (6.8 | ) | $ | (21.9 | ) | $ | (32.3 | ) | |||
Webcast
Steelcase will discuss fourth quarter results and business outlook on a conference call at 8:30 a.m. Eastern time tomorrow.
Non-GAAP Financial Measures
This earnings release contains 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. Pursuant to the requirements of Regulation G, the company has provided a reconciliation above of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
The non-GAAP financial measures used within this earnings release are: (1) organic revenue growth (decline), which represents the change in revenue excluding estimated currency translation effects, the impacts of acquisitions and divestitures and the impact of the additional week in fiscal year 2020; (2) adjusted earnings (loss) per share, which represents earnings (loss) per share excluding (a) goodwill impairment charges, (b) restructuring costs and related tax benefits, (c) the gain on the sale of PolyVision Corporation and the related variable compensation and income tax effects; and (3) adjusted operating income (loss), which represents operating income (loss) excluding goodwill impairment charges and restructuring costs. 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 discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to us, 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," "targets," or other similar words, phrases or expressions. Although we believe 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 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; the COVID-19 pandemic and the actions taken by various governments and third parties to combat the pandemic; 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.
Leading organizations around the world trust Steelcase to help them create workplaces that help people feel safe and are productive, inspiring and adaptable with our architecture, furniture and technology solutions – accessible through a network of channels, including over 800 Steelcase dealer locations. Steelcase is a global, industry-leading, and publicly traded company with fiscal 2021 revenue of
| STEELCASE INC. | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
| (in millions, except per share data) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| February 26, 2021 | February 28, 2020 | February 26, 2021 | February 28, 2020 | ||||||||||||
| Revenue | $ | 677.1 | $ | 946.2 | $ | 2,596.2 | $ | 3,723.7 | |||||||
| Cost of sales | 483.1 | 639.0 | 1,822.8 | 2,508.5 | |||||||||||
| Restructuring costs | 1.4 | — | 10.6 | — | |||||||||||
| Gross profit | 192.6 | 307.2 | 762.8 | 1,215.2 | |||||||||||
| Operating expenses | 185.7 | 238.2 | 684.2 | 958.2 | |||||||||||
| Goodwill impairment charge | — | — | 17.6 | — | |||||||||||
| Restructuring costs | 0.2 | — | 18.0 | — | |||||||||||
| Operating income | 6.7 | 69.0 | 43.0 | 257.0 | |||||||||||
| Interest expense | (6.4 | ) | (7.2 | ) | (27.1 | ) | (27.3 | ) | |||||||
| Investment income | 0.2 | 1.6 | 1.4 | 5.4 | |||||||||||
| Other income, net | 1.6 | 1.8 | 8.6 | 10.1 | |||||||||||
| Income before income tax expense (benefit) | 2.1 | 65.2 | 25.9 | 245.2 | |||||||||||
| Income tax expense (benefit) | (4.5 | ) | (1.3 | ) | (0.2 | ) | 45.5 | ||||||||
| Net income | $ | 6.6 | $ | 66.5 | $ | 26.1 | $ | 199.7 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.06 | $ | 0.56 | $ | 0.22 | $ | 1.67 | |||||||
| Diluted | $ | 0.06 | $ | 0.55 | $ | 0.22 | $ | 1.66 | |||||||
| Weighted average shares outstanding - basic | 117.8 | 119.6 | 117.5 | 119.6 | |||||||||||
| Weighted average shares outstanding - diluted | 118.2 | 120.2 | 117.8 | 120.2 | |||||||||||
| Dividends declared and paid per common share | $ | 0.100 | $ | 0.145 | $ | 0.370 | $ | 0.580 | |||||||
| STEELCASE INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (in millions) | |||||||
| February 26, 2021 | February 28, 2020 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 489.8 | $ | 541.0 | |||
| Accounts receivable | 279.0 | 381.8 | |||||
| Allowance for doubtful accounts | (8.7 | ) | (9.4 | ) | |||
| Inventories | 193.5 | 215.0 | |||||
| Prepaid expenses | 20.9 | 21.6 | |||||
| Other current assets | 70.9 | 38.8 | |||||
| Total current assets | 1,045.4 | 1,188.8 | |||||
| Property, plant and equipment, net of accumulated depreciation of | 410.8 | 426.3 | |||||
| Company-owned life insurance ("COLI") | 169.5 | 160.0 | |||||
| Deferred income taxes | 113.3 | 124.6 | |||||
| Goodwill | 218.1 | 233.6 | |||||
| Other intangible assets, net of accumulated amortization of | 90.4 | 102.9 | |||||
| Investments in unconsolidated affiliates | 51.5 | 52.3 | |||||
| Right-of-use operating lease assets | 225.4 | 237.9 | |||||
| Other assets | 29.6 | 39.0 | |||||
| Total assets | $ | 2,354.0 | $ | 2,565.4 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 181.3 | $ | 244.3 | |||
| Short-term borrowings and current portion of long-term debt | 4.7 | 2.9 | |||||
| Current operating lease obligations | 43.8 | 43.1 | |||||
| Accrued expenses: | |||||||
| Employee compensation | 90.1 | 191.7 | |||||
| Employee benefit plan obligations | 24.9 | 44.7 | |||||
| Accrued promotions | 27.8 | 35.3 | |||||
| Customer deposits | 33.7 | 28.6 | |||||
| Other | 108.7 | 100.3 | |||||
| Total current liabilities | 515.0 | 690.9 | |||||
| Long-term liabilities: | |||||||
| Long-term debt less current maturities | 479.2 | 481.4 | |||||
| Employee benefit plan obligations | 152.9 | 148.3 | |||||
| Long-term operating lease obligations | 199.5 | 214.0 | |||||
| Other long-term liabilities | 46.9 | 60.4 | |||||
| Total long-term liabilities | 878.5 | 904.1 | |||||
| Total liabilities | 1,393.5 | 1,595.0 | |||||
| Shareholders’ equity: | |||||||
| Additional paid-in capital | 12.5 | 28.4 | |||||
| Accumulated other comprehensive income (loss) | (40.0 | ) | (69.3 | ) | |||
| Retained earnings | 988.0 | 1,011.3 | |||||
| Total shareholders’ equity | 960.5 | 970.4 | |||||
| Total liabilities and shareholders’ equity | $ | 2,354.0 | $ | 2,565.4 | |||
| STEELCASE INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) | |||||||
| (in millions) | |||||||
| Twelve Months Ended | |||||||
| February 26, 2021 | February 28, 2020 | ||||||
| OPERATING ACTIVITIES | |||||||
| Net income | $ | 26.1 | $ | 199.7 | |||
| Depreciation and amortization | 85.2 | 85.6 | |||||
| Goodwill impairment charge | 17.6 | — | |||||
| Restructuring costs | 28.6 | — | |||||
| (Gain)/loss on business divestitures | — | (19.6 | ) | ||||
| Deferred income taxes | 15.9 | 12.1 | |||||
| Non-cash stock compensation | 20.9 | 16.7 | |||||
| Equity in income of unconsolidated affiliates | (9.3 | ) | (12.2 | ) | |||
| Dividends received from unconsolidated affiliates | 8.1 | 12.5 | |||||
| Other | (13.3 | ) | (0.2 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 120.9 | 7.2 | |||||
| Inventories | 27.1 | (6.2 | ) | ||||
| Other assets | (22.9 | ) | (1.9 | ) | |||
| Accounts payable | (69.0 | ) | 10.8 | ||||
| Employee compensation liabilities | (138.7 | ) | 36.7 | ||||
| Employee benefit obligations | (22.6 | ) | (3.1 | ) | |||
| Accrued expenses and other liabilities | (9.8 | ) | 22.7 | ||||
| Net cash provided by operating activities | 64.8 | 360.8 | |||||
| INVESTING ACTIVITIES | |||||||
| Capital expenditures | (41.3 | ) | (73.4 | ) | |||
| Proceeds from disposal of fixed assets | 7.4 | 1.8 | |||||
| Proceeds from COLI policies | 2.2 | 4.2 | |||||
| Proceeds from business divestitures, net of costs to sell | — | 72.6 | |||||
| Acquisitions, net of cash acquired | (3.8 | ) | (3.7 | ) | |||
| Other | 4.9 | 3.0 | |||||
| Net cash (used in) provided by investing activities | (30.6 | ) | 4.5 | ||||
| FINANCING ACTIVITIES | |||||||
| Dividends paid | (43.5 | ) | (69.1 | ) | |||
| Common stock repurchases | (42.7 | ) | (8.7 | ) | |||
| Borrowings on lines of credit | 250.0 | — | |||||
| Repayments on lines of credit | (250.0 | ) | — | ||||
| Repayments of long-term debt | (2.4 | ) | (2.9 | ) | |||
| Other | 0.8 | (1.2 | ) | ||||
| Net cash used in financing activities | (87.8 | ) | (81.9 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 2.1 | (1.1 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (51.5 | ) | 282.3 | ||||
| Cash and cash equivalents and restricted cash, beginning of period1 | 547.1 | 264.8 | |||||
| Cash and cash equivalents and restricted cash, end of period2 | $ | 495.6 | $ | 547.1 | |||
(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. Restricted cash is included as part of Other assets in the Condensed Consolidated Balance Sheets.
| CONTACT: | Investor Contact: |
| Michael O'Meara | |
| Investor Relations | |
| (616) 246 - 4251 | |
| Media Contact: | |
| Katie Woodruff | |
| Corporate Communications | |
| (616) 915 - 8505 |
FAQ
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