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Steelcase reports first quarter results

Thursday 21 June 2012

Steelcase Inc. has reported first quarter revenue of $675.2m and net income of $13.2m, or $0.10 per share. Steelcase reported $639.4m of revenue and earnings of $0.06 per share in the first quarter of the prior year, including restructuring costs of approximately $0.04 per share.
Organic revenue growth in the first quarter was 6% after adjusting for approximately $11m related to unfavorable currency translation effects and the net favorable impact of $6m associated with acquisitions and divestitures. The Americas posted 14% organic growth over the prior year while EMEA experienced an 11% organic decline. Revenue growth in the Americas was broad-based and included a higher mix of business from some of the company's largest corporate customers. EMEA reported organic revenue declines in most major markets and also included a higher mix of project business.
"The Americas achieved double-digit organic revenue growth for the seventh consecutive quarter and posted an adjusted operating income margin of 8.9% -- a significant improvement from 6.9% in the prior year," said James P. Hackett, president and CEO. "We expect the momentum in the Americas to continue in the second quarter."
Current quarter operating income of $19.3m compares to $15.0m in the prior year. Excluding restructuring costs, first quarter adjusted operating income of $24.4m compares with $24.9m in the prior year. Strength in the Americas was offset by weakness in EMEA and the Other category.
Cost of sales was 70.2% of revenue in the current quarter compared to 69.8% in the prior year.
The Board of Directors of Steelcase Inc. today declared a cash dividend $0.09 per share, to be paid on or before July 13, 2012 to shareholders of record as of July 2, 2012.
"The EMEA results, while disappointing overall, were also negatively impacted by the timing of order patterns and certain project shipments," said David C. Sylvester, senior vice president and CFO. "We expect improved results in the second quarter based on recent order growth and continued efforts to improve our business model across EMEA."
First quarter order growth in the Americas approximated 9% compared to the prior year, or approximately 11% when adjusted for the estimated pull-forward impact of amay 2011 price increase. The company expects second quarter fiscal 2013 revenue to be in the range of $715 to $740m. This estimate includes an assumption of approximately $22m from unfavorable currency translation effects compared to the prior year, as well as the negative impact of a small divestiture. The company reported revenue of $700.5m in the second quarter of fiscal 2012. Adjusted for these impacts, the company projects second quarter organic revenue growth in the range of 5 to 9% over the prior year.
Steelcase expects to report earnings between $0.16 and $0.20 per share for the second quarter of fiscal 2013, including restructuring costs of approximately $0.02 per share. Steelcase reported earnings of $0.09 per share in the second quarter of fiscal 2012, including restructuring costs of approximately $0.06 per share.
"The momentum in our performance and the multiple awards won by our brands at this month's NeoCon trade show are further evidence that the market is responding to our insight-led innovation,"mr. Hackett said. "Our ability to leverage our research to design for current and future workplace needs is a vital competitive advantage."

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