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Steelcase 4th quarter results show increased sales + $20.4m net profit for the year

Thursday 24 March 2011

Steelcase Inc.has reported 4th quarter sales of $622.9 million and net income of $10.4 million, or $0.08 per share. Excluding net restructuring costs, adjusted earnings equaled $0.11 per share. Steelcase reported $551.9 million of sales and a net loss of $(0.10) per share in the 4th quarter of the prior year.
\"We are very pleased with our results this quarter,\" said James P. Hackett, president and CEO. \"In our North America and International segments, organic sales growth averaged over 24 % and was broad-based across product categories and regions.\"
Current quarter operating income of $19.6 million represents an improvement of $39.7 million over the prior year. Cost of sales improved to 70.0 % of sales in the current quarter compared with 71.3 % in the prior year..
Operating expenses in the 4th quarter were $160.5 million compared with $168.4 million in the prior year.
The Company declared a quarterly cash dividend of $0.06 per share to be paid on or before April 13, 2011 to shareholders of record as of April 1, 2011.
2011 Annual Results
For 2011, the company recorded $2.44 billion of sales and net income of $20.4 million, or $0.15 per share, which compares to $2.29 billion of sales and a net loss of $(13.6) million, or $(0.10) per share, in fiscal 2010. Organic sales growth was 12 % over the prior year.
Operating income of $51.5 million for fiscal 2011 compared to an operating loss of $(11.5) million in fiscal 2010, which included $33.1 million of variable life COLI income. Current year results included $(30.6) million of restructuring costs compared to $(34.9) million in the prior year.
\"Our adjusted operating income for the fiscal year improved by more than $90 million from the prior year,\" said David C. Sylvester, vice president and CFO. \"These results reflect the better than expected growth this year, as well as the efforts of our people around the world to improve the fitness of our business model.\"
Outlook
Orders grew by more than 20 % in the North America and International segments in the 4th quarter, compared to the prior year. The company expects first quarter fiscal 2012 sales to reflect typical seasonal patterns and be in the range of $575 to $600 million. This estimate includes an assumption of approximately $6 million from favorable currency translation effects compared to the prior year. The company reported sales of $541.8 million in the first quarter of fiscal 2011, which included $35 million of sales from IDEO, which is no longer consolidated. Adjusting for these impacts, the company projects organic sales growth in the range of 12 to 17 % over the prior year.
Steelcase expects to report results between $(0.04) and $0.00 per share for the first quarter of fiscal 2012, including restructuring costs of approximately $0.06 per share. These estimates also contemplate approximately $10 million of higher commodity costs compared to the prior year and approximately $4 million of incremental interest expense associated with the senior notes issued on February 3, 2011. Steelcase reported a net loss of $(0.08) per share in the first quarter of fiscal 2011 which included an $11.4 million charge resulting from healthcare reform legislation specifically related to the Medicare Part D Subsidy.
Hackett concluded, \"Industry demand has grown significantly over the past few quarters despite traditional economic indicators showing only modest improvements. While we expect growth rates to moderate as our results begin to compare against the recent strength, we remain confident in our strategic focus on turning insights and innovation into growth -- by helping customers address how technology and other forces are reshaping how and where they work.\"

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