Steelcase Reports Results for First Quarter Fiscal 2004.Business Editors GRAND RAPIDS Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, , Mich.--(BUSINESS WIRE)--June 23, 2003 Steelcase Steelcase (NYSE: SCS) is an international office furniture company. It was founded in 1912 in Grand Rapids, Michigan as The Metal Office Furniture Company. The company at the time specialized in mainly file cabinets and safes. Inc. (NYSE NYSE See: New York Stock Exchange :SCS SCS, n strain/counterstrain, an approach of applying pressure to certain tender points in the muscles or joints to decrease or remove the pain sensed at the point of palpation. ) today reported that revenue for its first quarter totaled $571.9 million, compared with $643.1 million in the same quarter last year. These results were in line with company estimates and reflect substantially lower sales in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. primarily due to weak backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the beginning of the quarter. International sales were higher, with most of the increase due to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency translation. Steelcase reported a loss of $(13.4) million, or $(0.09) per share for the first quarter. These results were consistent with the company's previous estimate of a first quarter loss in the range of $(0.05) to $(0.12) per share and compares with a loss of $(15.4) million, or $(0.10) per share, before the cumulative effect of adopting SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142 in the first quarter of fiscal 2003. Net loss for first quarter fiscal 2003 was $(245.3) million, or $(1.66) per share including the cumulative effect of adopting SFAS No. 142. Reported results included pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges of $(7.5) million for restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when in the International segment, $(5.3) million for severance in the North America segment and $(2.0) million for severance in the Other category. Results also included a $5.8 million non-operating pre-tax gain on the sale of real estate and leased assets. The total of these items is a net pre-tax charge of $(9.0) million or $(5.6) million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. . "Our first quarter results reflect the difficult economic environment we anticipated, particularly in North America," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. P. Keane Keane (IPA: /kiːn/) are an English piano rock band, first established in Battle, East Sussex in 1995, taking their current name in 1997. , chief financial officer. "We responded to these challenges with actions that reduced our costs in the short and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. ." "Despite the challenging economic conditions, we've we've Contraction of we have. we've have continued making investments in initiatives key to our growth, such as new product development and lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. and they are paying off," said James P. Hackett Hackett may refer to: In places:
Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased with the excellent progress we made on our strategic objectives in the quarter. We are winning new customers and were recently recognized with nine awards for the new architecture, furniture and technology products we introduced at NeoCon ne·o·con n. Informal A neoconservative: "The neocons and hard-liners have long felt that no Soviet leader could be trusted" New York Times. , our industry's largest North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. trade show."
Business Segment Results
(in millions)
First Quarter Sequential Quarters
Three Months Ended Three Months Ended
------------------------- ----------------------------
(13 weeks) (14 weeks)
May 30, May 24, % Inc May 30, Feb. 28, % Inc
2003 2002 (Dec) 2003 2003(6) (Dec)
------- ------- ------ ------- ------- ------
Revenue
North
America(1) $296.2 $391.0 (24.2)% $296.2 $356.6 (16.9)%
Steelcase Design
Partnership(2) 67.0 68.7 (2.5)% 67.0 68.1 (1.6)%
International(3) 129.8 107.6 20.6% 129.8 137.1 (5.3)%
Other(4) 78.9 75.8 4.1% 78.9 76.0 3.8%
------- ------- ------- -------
Consolidated
Revenue $571.9 $643.1 (11.1)% $571.9 $637.8 (10.3)%
======= ======= ======= =======
Operating
Income(5)
North
America $(19.3) $(7.0) $(19.3) $17.7
Steelcase Design
Partnership 2.9 3.6 2.9 (1.4)
International (5.2) (9.8) (5.2) (5.7)
Other (1.3) (1.4) (1.3) (3.4)
------- ------- ------- -------
Consolidated
Operating
Income $(22.9) $(14.6) $(22.9) $7.2
======= ======= ======= =======
Operating Margin
Percent (4.0)% (2.3)% (4.0)% 1.1%
Outlook Steelcase expects revenue in the second quarter of fiscal 2004 to increase about 10 percent compared to the first quarter, driven by the North America segment. North America has experienced higher order levels since early in the first quarter and entered the second quarter with a stronger backlog. International order rates are showing signs of softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. in certain markets. "We are seeing a sustained higher order rate, and a growing backlog in North America, which is consistent with recent increases in broader economic metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. ," said Mr. Keane. "It appears a gradual The Gradual (Latin: graduale, sometimes called the Grail) is a chant in the extraordinary form of the Roman Catholic Mass, sung after the reading or singing of the Epistle and before the Alleluia, or, during penitential seasons, before the Tract. industry recovery may now be underway in the North America segment of our business." The company expects breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations results in the second quarter. This estimate includes approximately $(5.0) million in pre-tax charges for International restructuring activity. The company also anticipates increased expenses for North America plant consolidation activity already announced, higher workers compensation costs, and employee wage increases. The company expects to be profitable on a reported basis for fiscal year 2004. "We are preparing for recovery and growth," said Mr. Hackett. "Recent project wins reinforce we have the right portfolio of products and services that are valued in the marketplace and the global presence required to meet our customers' needs. By delivering innovative solutions that help people in offices work more effectively together with achieving the right level of cost, quality and speed throughout our enterprise, we are poised for profitable growth." Webcast Steelcase will webcast its conference call reviewing first quarter fiscal 2004 financial results on Tuesday Tuesday: see week. , June June: see month. 24, 2003 at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . Details and links to the webcast are available at www.steelcase.com. A replay of the webcast can be accessed on the site after the call. Other Events The Steelcase annual meeting of shareholders will be held on June 26, 2003 at 11:00 a.m. EDT in the company's Town Hall located across from company headquarters at 901 44th Street S.E. Grand Rapids, Michigan “Grand Rapids” redirects here. For other uses, see Grand Rapids (disambiguation). Grand Rapids is a city in the U.S. state of Michigan. As of the 2000 census, the city population was 197,800. . The company will host a live webcast of the meeting. Details and links to the webcast are accessible at www.steelcase.com. Business Segment Footnotes (1) North America business segment includes the company's Steelcase and Turnstone brands and consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: dealers in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . (2) The Steelcase Design Partnership (SDP (Session Description Protocol) An IETF protocol that defines a text-based message format for describing a multimedia session. Data such as version number, contact information, broadcast times and audio and video encoding types are included in the message. ) business segment includes Brayton For the city in the USA, see . Brayton is a small village just south of Selby, North Yorkshire, England. The United Kingdom Census 2001 states the population of Brayton to be 5,514. , Designtex Group, Details, Metro and Vecta. (3) International business segment includes all manufacturing and sales operations outside the U.S. and Canada. (4) Other includes Steelcase Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , PolyVision, IDEO IDEO is a design consultancy based in Palo Alto, California, with other offices in San Francisco, Chicago, New York, Boston, London, Munich and Shanghai. The company helps design products, services, environments, and digital experiences. and Attwood Attwood is the last name of several notable people:
expenses. Steelcase Financial Services was a reporting segment in fiscal 2003 and is now included in Other because revenue and assets fall below the threshold required for segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four . (5) Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. percent comparisons are not provided because they are not meaningful. (6) Q4 FY03 included an extra shipping week. About Steelcase Inc. Steelcase Inc., a Fortune 500 company, helps individuals and organizations around the world to work more effectively by providing knowledge, products and services that enable customers and their consultants to create work environments that integrate architecture, furniture and technology. Founded in 1912 and headquartered in Grand Rapids, Michigan, the company has led the global office furniture industry in sales every year since 1974. Its product portfolio includes interior architectural products, furniture systems, technology products, seating, lighting, storage and related products and services. Fiscal 2003 revenue was approximately $2.6 billion. Steelcase Inc. and its subsidiaries have dealers in more than 900 locations, manufacturing facilities in over 50 locations and approximately 16,000 employees around the world. The company's Class A Common Stock trades on the NYSE under the symbol SCS. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. From time to time, in written reports and oral statements, the company discusses its expectations regarding future performance. For example, certain portions of this release contains various "forward-looking statements", including those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc anticipated revenue, industry recovery, earning/losses, profitability, restructuring activity and costs. Such statements involve certain risks and uncertainties that could cause actual results to vary. The company's performance may differ materially from that contemplated by forward-looking statements for a variety of reasons, including, but not limited to: competitive and general economic conditions/uncertainty domestically and internationally; delayed or lost sales and other impacts related to acts of terrorism, acts of war Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. or governmental action; changes in domestic or international laws, rules and regulations, including the impact of changed environmental laws, rules or regulations; major disruptions at our key facilities or in the supply of any key raw materials; competitive pricing pressure; pricing changes by the company or its competitors; currency fluctuations; changes in customer demand and order patterns; changes in the financial stability of customers or dealers (including changes in their ability to pay amounts owed to the company); changes in relationships with customers, suppliers, employees and dealers; product (sales) mix; the success (including product performance and customer acceptance) of new products, current product innovations and platform simplification, and their impact on the company's manufacturing processes; the ability of the company to effectively cull cull the act of culling. Called also cast. older products; the ability of the company to successfully negotiate new credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities ; possible acquisitions or divestitures by the company; the company's ability to reduce costs, including ramp-up costs associated with new products and to improve margins on new products; the impact of workforce reductions (including elimination of temporary workers, hourly layoffs, early retirement programs and salaried workforce reductions); the company's success in integrating acquired businesses, initiating and managing alliances and increased global sourcing, transitioning production of products or product components to other manufacturing facilities or to third parties as a result of production rationalization rationalization, in psychology: see defense mechanism. , implementation of technology initiatives or migration to a less vertically integrated manufacturing model; changes in business strategies and decisions; and other risks detailed in the company's 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.
STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share data)
(Unaudited)
Three Months Ended
May 30, May 24,
2003 2002
-------- ---------
Revenue $ 571.9 $ 643.1
Cost of sales 410.1 457.5
Restructuring and impairment costs 10.2 3.6
-------- ---------
Gross profit 151.6 182.0
Operating expenses 169.8 192.4
Restructuring and impairment costs 4.7 4.2
-------- ---------
Operating loss (22.9) (14.6)
Interest expense (4.8) (5.1)
Other income (expense), net 6.3 (4.9)
-------- ---------
Pre-tax loss (21.4) (24.6)
Income tax benefit (8.0) (9.2)
-------- ---------
Loss after taxes (13.4) (15.4)
-------- ---------
Loss before cumulative effect of
accounting change (13.4) (15.4)
Cumulative effect of accounting change -- (229.9)
-------- ---------
Net loss $ (13.4) $ (245.3)
-------- ---------
Loss per share before cumulative effect of
accounting change $ (0.09) $ (0.10)
Cumulative effect of accounting change per share -- (1.56)
-------- ---------
Loss per share $ (0.09) $ (1.66)
-------- ---------
Dividends declared per common share $ 0.06 $ 0.06
-------- ---------
Weighted Average Shares Outstanding -
Basic 147.6 147.4
Diluted 147.6 147.4
STEELCASE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
May 30, Feb. 28,
2003 2003
------------ -----------
ASSETS
Current assets:
Cash and cash equivalents $ 91.8 $ 128.9
Accounts receivable, net 399.3 367.2
Notes receivable and leased assets, net 62.0 84.9
Inventories 134.9 129.8
Other current assets 114.5 103.3
------------ -----------
Total current assets 802.5 814.1
Property and equipment, net 761.9 774.0
Notes receivable and leased assets, net 120.5 125.9
Goodwill and other intangible assets, net 303.6 306.0
Other assets 311.8 322.2
------------ -----------
Total assets $ 2,300.3 $ 2,342.2
------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 128.4 $ 145.4
Short-term borrowings and current portion
of long-term debt 39.4 30.0
Accrued expenses:
Employee compensation 81.8 90.9
Employee benefit plan obligations 25.2 39.6
Other 212.5 196.6
------------ -----------
Total current liabilities 487.3 502.5
------------ -----------
Long-term liabilities:
Long-term debt 290.7 294.2
Employee benefit plan obligations 238.1 237.8
Other long-term liabilities 43.5 52.6
------------ -----------
Total long-term liabilities 572.3 584.6
------------ -----------
Total liabilities 1,059.6 1,087.1
------------ -----------
Shareholders' equity:
Common stock 288.1 286.1
Accumulated other comprehensive income
(loss) (42.4) (50.1)
Deferred compensation (1.8) --
Retained earnings 996.8 1,019.1
------------ -----------
Total shareholders' equity 1,240.7 1,255.1
------------ -----------
Total liabilities and
shareholders' equity $ 2,300.3 $ 2,342.2
------------ -----------
STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
May 30, May 24,
2003 2002
---------- ----------
OPERATING ACTIVITIES
Net income (loss) $ (13.4) $ (245.3)
Depreciation and amortization 37.6 39.0
Cumulative effect of accounting change -- 229.9
Non-cash stock compensation 0.2 --
Restructuring charges (payments), net (2.7) (0.6)
Changes in operating assets and liabilities, net
of corporate acquisitions (75.4) (29.1)
Other, net (3.9) (4.1)
---------- ----------
Net cash used in operating activities (57.6) (10.2)
---------- ----------
INVESTING ACTIVITIES
Capital expenditures (14.4) (20.5)
Proceeds from the disposal of fixed assets 4.6 --
Proceeds from the sale of leased assets 38.0 170.2
Net (increase) decrease in notes receivable and
leased assets (4.7) 8.8
Other, net 0.7 8.9
---------- ----------
Net cash provided by investing activities 24.2 167.4
---------- ----------
FINANCING ACTIVITIES
Long-term debt issuance (repayments), net (4.8) (106.1)
Short-term borrowings (repayments), net 8.5 (89.7)
Common stock issuance -- 3.6
Dividends paid (8.9) (8.8)
---------- ----------
Net cash used in financing activities (5.2) (201.0)
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents 1.5 0.8
---------- ----------
Net decrease in cash and cash equivalents (37.1) (43.0)
Cash and cash equivalents, beginning of period 128.9 69.4
---------- ----------
Cash and cash equivalents, end of period $ 91.8 $ 26.4
---------- ----------
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