Steelcase Reports Second Quarter Fiscal 2004 Results; Strong Sequential Quarter Revenue Growth in North America.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)--Sept. 24, 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 revenue from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for its second quarter totaled $612.1 million, an increase of 10 percent over first quarter revenue of $555.6 million, and a 5 percent decrease compared with $644.2 million in the same quarter last year. Driven by strong 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. , these results were in line with company estimates. The year-on-year sales decrease is net of a $16.1 million favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency translation effect in the International segment. Currency translation did not materially affect the sequential One after the other in some consecutive order such as by name or number. quarter comparison. Revenue for the quarter and prior period comparisons excludes the recently divested Attwood Attwood is the last name of several notable people:
A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . Steelcase reported net income of $18.1 million, or $0.12 per share for the second quarter. These results compare with a net loss of $(7.3) million, or $(0.05) per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, in the second quarter of fiscal 2003. In the quarter, the company sold its Attwood Corporation marine hardware and accessories business and results reflect a $31.9 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain related to the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). . Reported results also include pre-tax 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 related asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges of $(4.9) million for International and $(2.5) million for North America, a $7.0 million pre-tax non-operating gain on the sale of real estate, and a pre-tax non-operating charge of $(6.1) million related to a dealer transition. The total of all these items is a net gain of $25.4 million pre-tax, or $16.0 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. . "We returned to profitability this quarter on the strength of improved sales and operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in the North America segment," 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. "In addition, we strengthened our balance sheet through the sale of Attwood, and continued control over capital expenditures. We increased cash balances to $173 million and lowered debt to $316 million during the quarter." "This performance gives us confidence we will achieve our targets for the year," said James P. Hackett Hackett may refer to: In places:
Outlook "We are seeing some signs that business capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. is finally beginning to recover in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ," said Mr. Keane. "Although we believe increased spending on office furniture will generally lag other categories, we are expecting a modest increase in second half shipments, including projects we have already won. International markets are not yet showing the same signs of improvement in overall economic indicators Economic indicators The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate. ." The company expects third quarter sales from continuing operations to be flat to slightly up from second quarter levels. North America order rates increased slightly in the second quarter versus the first quarter, and have been volatile in the early weeks of the third quarter. Third quarter earnings are expected to be just above 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 , including $(5.0) to $(7.0) million of pre-tax restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , and the impact of labor and overhead inefficiencies related to ongoing plant consolidation activities. The company expects to be profitable for fiscal year 2004. Mr. Hackett concluded, "We are delivering innovative solutions in new and existing markets that together with the operational initiatives implemented and underway, will provide Steelcase with significant opportunity for growth and profitability as the economy recovers." Webcast Steelcase will webcast its conference call reviewing second quarter fiscal 2004 financial results on Thursday Thursday: see week. , September September: see month. 25, 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 . Links to the webcast are available at www.steelcase.com. Accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. webcast presentation slides will be available on the company's website shortly before the start of the webcast. A replay of the webcast can be accessed on the site after the call. Business Segment Results (in millions)
Second Quarter Sequential Quarters
Three Months Ended Three Months Ended
------------------ ------------------
Aug 29, Aug 23, % Inc Aug 29, May 30, % Inc
2003 2002 (Dec) 2003 2003 (Dec)
---- ---- ----- ---- ---- -----
Revenue
North America (1) $346.0 $377.7 (8.4)% $346.0 $296.2 16.8%
Steelcase Design
Partnership (2) 73.4 75.1 (2.3)% 73.4 67.0 9.6%
International (3) 120.5 117.3 2.7 % 120.5 129.8 (7.2)%
Other (4) (6) 72.2 74.1 (2.5)% 72.2 62.6 15.3%
---- ---- ---- ----
Consolidated
Revenue $612.1 $644.2 (5.0)% $612.1 $555.6 10.2%
====== ====== ====== ======
Operating Income(5)
North America $3.4 $(2.8) $3.4 $(19.3)
Steelcase Design
Partnership 4.6 5.1 4.6 2.9
International (11.2) (4.9) (11.2) (5.2)
Other(6) 1.4 (10.2) 1.4 (3.7)
--- ------ --- -----
Consolidated
Operating Loss $(1.8) $(12.8) $(1.8) $(25.3)
====== ======= ====== =======
Operating Margin
Percent (0.3)% (2.0)% (0.3)% (4.6)%
Second Quarter
Six Months Ended
----------------
Aug 29, Aug 23, % Inc
2003 2002 (Dec)
---- ---- -----
Revenue
North America (1) $642.2 $768.7 (16.5)%
Steelcase Design Partnership (2) 140.4 143.8 (2.4)%
International (3) 250.3 224.9 11.3%
Other (4) (6) 134.8 133.1 1.3%
----- -----
Consolidated Revenue $1,167.7 $1,270.5 (8.1)%
======== ========
Operating Income(5)
North America $(15.9) $(9.1)
Steelcase Design Partnership 7.5 8.7
International (16.4) (14.7)
Other(6) (2.3) (14.8)
----- ------
Consolidated Operating Loss $(27.1) $(29.9)
======= =======
Operating Margin Percent (2.3)% (2.4)%
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) 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. , The 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 and 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. subsidiaries, other ventures and unallocated corporate 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. (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) For the second quarter and in prior period comparisons, the divested Attwood marine business is treated as a discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: operation. Attwood revenue was $14.9 million and operating income was $2.2 million in Q2 FY04. In fiscal 2003, Attwood revenue was $57.0 million and operating income was $8.0 million. 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 “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 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $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 contain various "forward-looking statements." 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. products; 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 ability to successfully integrate acquired businesses, initiate and manage alliances and increased global sourcing, transition production of products or components from one of its manufacturing facilities to another or to third parties as a result of production rationalization rationalization, in psychology: see defense mechanism. , implement technology initiatives and migrate to a less vertically integrated manufacturing model; changes in business strategies and decisions; and other risks detailed in the company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended February February: see month. 28, 2003 and 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 con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in millions, except per share data)
Three Months Ended Six Months Ended
-------------------- -------------------
Aug. 29, Aug. 23, Aug. 29, Aug. 23,
2003 2002 2003 2002
---------- --------- --------- ---------
Revenue $612.1 $644.2 $1,167.7 $1,270.5
Cost of sales 437.1 451.7 836.2 898.0
Restructuring costs 7.3 1.6 17.5 5.2
---------- --------- --------- ---------
Gross profit 167.7 190.9 314.0 367.3
Operating expenses 169.4 191.4 336.3 380.7
Restructuring costs 0.1 12.3 4.8 16.5
---------- --------- --------- ---------
Operating loss (1.8) (12.8) (27.1) (29.9)
Interest expense (5.1) (5.2) (9.9) (10.3)
Other income (expense), net 1.7 3.5 8.2 (1.3)
---------- --------- --------- ---------
Loss from continuing
operations before income
tax benefit (5.2) (14.5) (28.8) (41.5)
Income tax benefit (2.0) (6.0) (10.8) (16.1)
---------- --------- --------- ---------
Loss from continuing
operations (3.2) (8.5) (18.0) (25.4)
Income from discontinued
operations, net of applicable
taxes 1.3 1.2 2.7 2.7
Gain on sale of net assets of
discontinued operations, net
of applicable taxes of $11.9 20.0 -- 20.0 --
---------- --------- --------- ---------
Income (loss) before
cumulative effect of
accounting change 18.1 (7.3) 4.7 (22.7)
Cumulative effect of
accounting change -- -- -- (229.9)
---------- --------- --------- ---------
Net income (loss) $18.1 $(7.3) $4.7 $(252.6)
========== ========= ========= =========
Basic and diluted per share
data:
Loss from continuing
operations $(0.02) $(0.06) $(0.12) $(0.17)
Income from discontinued
operations 0.14 0.01 0.15 0.02
Cumulative effect of
accounting change -- -- -- (1.56)
---------- --------- --------- ---------
Earnings (loss) $0.12 $(0.05) $0.03 $(1.71)
========== ========= ========= =========
Dividends declared per common
share $0.06 $0.06 $0.12 $0.12
========== ========= ========= =========
STEELCASE INC. CONDENSED CONSOLIDATED BALANCE SHEETS consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (in millions)
(Unaudited)
Aug. 29, Feb. 28,
2003 2003
------------ ----------
ASSETS
Current assets:
Cash and cash equivalents $ 172.6 $ 128.9
Accounts receivable, net 398.7 367.2
Notes receivable and leased assets, net 79.8 84.9
Inventories 121.0 129.8
Other current assets 116.1 103.3
------------ ----------
Total current assets 888.2 814.1
Property and equipment, net 713.0 774.0
Notes receivable and leased assets, net 110.0 125.9
Goodwill and other intangible assets, net 302.0 306.0
Other assets 314.7 322.2
------------ ----------
Total assets $2,327.9 $2,342.2
------------ ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 139.4 $ 145.4
Short-term borrowings and current portion
of long-term debt 29.8 30.0
Accrued expenses:
Employee compensation 76.3 90.9
Employee benefit plan obligations 30.7 39.6
Other 239.5 196.6
------------ ----------
Total current liabilities 515.7 502.5
------------ ----------
Long-term liabilities:
Long-term debt 286.2 294.2
Employee benefit plan obligations 233.2 237.8
Other long-term liabilities 41.4 52.6
------------ ----------
Total long-term liabilities 560.8 584.6
------------ ----------
Total liabilities 1,076.5 1,087.1
------------ ----------
Shareholders' equity:
Common stock 288.4 286.1
Accumulated other comprehensive loss (41.5 ) (50.1 )
Deferred compensation - restricted stock (1.6 ) --
Retained earnings 1,006.1 1,019.1
------------ ----------
Total shareholders' equity 1,251.4 1,255.1
------------ ----------
Total liabilities and
shareholders' equity $2,327.9 $2,342.2
------------ ----------
STEELCASE INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
(Unaudited)
Six Months Ended
Aug. 29, Aug. 23,
2003 2002
-------- ---------
OPERATING ACTIVITIES
Net income (loss) $ 4.7 $(252.6 )
Depreciation and amortization 71.9 76.7
Cumulative effect of accounting change --- 229.9
Gain on sale of discontinued operations (31.9 ) ---
Changes in operating assets and liabilities, net
of corporate acquisitions (28.5 ) (58.2 )
Other, net (17.9 ) 2.7
-------- ---------
Net cash used in operating activities (1.7 ) (1.5 )
-------- ---------
INVESTING ACTIVITIES
Capital expenditures (19.3 ) (44.7 )
Proceeds from the disposal of fixed assets 17.2 0.9
Net proceeds on sale of discontinued operations 46.9 ---
Proceeds from the sales of leased assets 39.8 178.0
Net (increase) decrease in notes receivable and
leased assets (16.2 ) 3.7
Other, net 3.2 17.1
-------- ---------
Net cash provided by investing activities 71.6 155.0
-------- ---------
FINANCING ACTIVITIES
Long-term debt issuances (repayments), net (9.4 ) (117.1 )
Short-term borrowings (repayments), net 0.3 (48.8 )
Common stock issuance 0.3 3.6
Dividends paid (17.7 ) (17.7 )
-------- ---------
Net cash used in financing activities (26.5 ) (180.0 )
-------- ---------
Effect of exchange rate changes on cash and cash
equivalents 0.3 1.3
-------- ---------
Net increase (decrease) in cash and cash
equivalents 43.7 (25.2 )
Cash and cash equivalents, beginning of period 128.9 69.4
-------- ---------
Cash and cash equivalents, end of period $172.6 $ 44.2
-------- ---------
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