Michigan | 1-13873 | 38-0819050 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS employer identification number) |
901 44th Street SE | ||
Grand Rapids, Michigan | 49508 | |
(Address or principal executive offices) | (Zip code) | |
Registrant's telephone number, including area code: (616) 247-2710 | ||
None | ||
(Former address, if changed since last report) |
▪ | Organic revenue growth (decline), which represents the change in revenue excluding currency translation effects and the impacts of acquisitions and divestitures. |
▪ | Adjusted operating income (loss), which represents operating income (loss), excluding restructuring costs. |
▪ | Adjusted earnings per share, which represents earnings per share, excluding restructuring costs, net of tax. |
Exhibit Number | Description |
99.1 | Earnings Release - Second Quarter Ended August 24, 2012 |
STEELCASE INC. |
By: | /s/ Mark T. Mossing |
Mark T. Mossing Corporate Controller and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer) |
Exhibit Number | Description |
99.1 | Earnings Release - Second Quarter Ended August 24, 2012 |
Business Segment Results | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
August 24, 2012 | August 26, 2011 | % Change | August 24, 2012 | August 26, 2011 | % Change | ||||||||||||||||
Revenue | |||||||||||||||||||||
Americas (1) | $ | 531.9 | $ | 485.7 | 9.5 | % | $ | 1,006.5 | $ | 894.2 | 12.6 | % | |||||||||
EMEA (2) | 138.6 | 133.8 | 3.6 | % | 266.1 | 287.7 | (7.5 | )% | |||||||||||||
Other (3) | 74.4 | 81.0 | (8.1 | )% | 147.5 | 158.0 | (6.6 | )% | |||||||||||||
Consolidated revenue | $ | 744.9 | $ | 700.5 | 6.3 | % | $ | 1,420.1 | $ | 1,339.9 | 6.0 | % |
Operating income (loss) | |||||||||||||||||||
Americas | $ | 60.7 | $ | 42.8 | $ | 98.4 | $ | 63.9 | |||||||||||
EMEA | (3.4 | ) | (13.8 | ) | (11.4 | ) | (13.9 | ) | |||||||||||
Other | (2.1 | ) | 0.9 | (5.5 | ) | 3.5 | |||||||||||||
Corporate (4) | (8.4 | ) | (4.5 | ) | (15.4 | ) | (13.1 | ) | |||||||||||
Consolidated operating income | $ | 46.8 | $ | 25.4 | $ | 66.1 | $ | 40.4 | |||||||||||
Operating income percent | 6.3 | % | 3.6 | % | 4.7 | % | 3.0 | % |
Revenue Mix | |||||||||||||||
Americas (1) | 71.4 | % | 69.3 | % | 70.9 | % | 66.7 | % | |||||||
EMEA (2) | 18.6 | % | 19.1 | % | 18.7 | % | 21.5 | % | |||||||
Other (3) | 10.0 | % | 11.6 | % | 10.4 | % | 11.8 | % |
1. | The Americas segment serves customers in the U.S., Canada and Latin America with a portfolio of integrated architecture, furniture and technology products marketed to corporate, government, healthcare, education and retail customers through the Steelcase, Coalesse, Turnstone, Details and Nurture by Steelcase brands. |
2. | The EMEA segment serves customers in Europe, the Middle East and Africa primarily under the Steelcase brand, with an emphasis on freestanding furniture systems, storage and seating solutions. |
3. | The Other category includes Asia Pacific, PolyVision and Designtex. |
4. | Corporate expenses include unallocated portions of executive and shared services functions such as information technology, human resources, finance, legal, research and development and corporate facilities. |
YEAR OVER YEAR ORGANIC REVENUE GROWTH BY SEGMENT | |||||||||||||||
Q2 2013 vs. Q2 2012 | |||||||||||||||
Steelcase Inc. | Americas | EMEA | Other category | ||||||||||||
Q2 2012 revenue | $ | 700.5 | $ | 485.7 | $ | 133.8 | $ | 81.0 | |||||||
Divestiture | (4.5 | ) | — | — | (4.5 | ) | |||||||||
Currency translation effects* | (16.9 | ) | (1.2 | ) | (15.8 | ) | 0.1 | ||||||||
Q2 2012 revenue, adjusted | 679.1 | 484.5 | 118.0 | 76.6 | |||||||||||
Q2 2013 revenue | 744.9 | 531.9 | 138.6 | 74.4 | |||||||||||
Dealer acquisitions | (1.0 | ) | — | (1.0 | ) | — | |||||||||
Q2 2013 revenue, adjusted | 743.9 | 531.9 | 137.6 | 74.4 | |||||||||||
Organic growth (decline) $ | $ | 64.8 | $ | 47.4 | $ | 19.6 | $ | (2.2 | ) | ||||||
Organic growth (decline) % | 10 | % | 10 | % | 17 | % | (3 | )% | |||||||
* Currency translation effects represent the estimated net effect of translating Q2 2012 foreign currency revenues using the average exchange rates during Q2 2013. |
YEAR OVER YEAR ORGANIC REVENUE GROWTH | |||||||||||||||
YTD Q2 2013 vs. YTD Q2 2012 | |||||||||||||||
Steelcase Inc. | Americas | EMEA | Other category | ||||||||||||
Year-to-date 2012 revenue | $ | 1,339.9 | $ | 894.2 | $ | 287.7 | $ | 158.0 | |||||||
Divestiture | (8.6 | ) | — | — | (8.6 | ) | |||||||||
Currency translation effects* | (27.6 | ) | (1.8 | ) | (26.0 | ) | 0.2 | ||||||||
Year-to-date 2012 revenue, adjusted | 1,303.7 | 892.4 | 261.7 | 149.6 | |||||||||||
Year-to-date 2013 revenue | 1,420.1 | 1,006.5 | 266.1 | 147.5 | |||||||||||
Dealer acquisitions | (11.5 | ) | (10.5 | ) | (1.0 | ) | — | ||||||||
Year-to-date 2013 revenue, adjusted | 1,408.6 | 996.0 | 265.1 | 147.5 | |||||||||||
Organic growth (decline) $ | $ | 104.9 | $ | 103.6 | $ | 3.4 | $ | (2.1 | ) | ||||||
Organic growth (decline) % | 8 | % | 12 | % | 1 | % | (1 | )% | |||||||
* Currency translation effects represent the estimated net effect of translating Q2 2012 and Q1 2012 foreign currency revenues using the average exchange rates during Q2 2013 and Q1 2013, respectively. |
PROJECTED ORGANIC REVENUE GROWTH | |||||||||
Q3 2013 vs. Q3 2012 | |||||||||
Steelcase Inc. | |||||||||
Q3 2012 revenue | $ | 719 | |||||||
Currency translation effects* | (12 | ) | |||||||
Q3 2012 revenue, adjusted | 707 | ||||||||
Q3 2013 revenue, projected | 710 - 735 | ||||||||
Dealer acquisitions | (4 | ) | |||||||
Q3 2013 projected revenue, adjusted | 706 - 731 | ||||||||
Organic growth (decline) $ | $ (1) - 24 | ||||||||
Organic growth (decline) % | 0% - 3% | ||||||||
* Currency translation effects represent the estimated net effect of translating Q3 2012 foreign currency revenues using the exchange rate at the end of Q2 2013. |
STEELCASE INC. | |||
ADJUSTED EARNINGS PER SHARE | |||
Q2 2013 | |||
Earnings per share | $ | 0.23 | |
Restructuring costs per share, net of tax | 0.02 | ||
Earnings per share, adjusted | $ | 0.25 |
Steelcase Inc. | |||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
August 24, 2012 | August 26, 2011 | August 24, 2012 | August 26, 2011 | ||||||||||||||||||||||||
Revenue | $ | 744.9 | 100.0 | % | $ | 700.5 | 100.0 | % | $ | 1,420.1 | 100.0 | % | $ | 1,339.9 | 100.0 | % | |||||||||||
Cost of sales | 513.4 | 68.9 | 487.9 | 69.7 | 987.5 | 69.5 | 934.2 | 69.7 | |||||||||||||||||||
Restructuring costs | 3.4 | 0.5 | 11.4 | 1.6 | 8.5 | 0.6 | 21.4 | 1.6 | |||||||||||||||||||
Gross profit | 228.1 | 30.6 | 201.2 | 28.7 | 424.1 | 29.9 | 384.3 | 28.7 | |||||||||||||||||||
Operating expenses | 181.0 | 24.3 | 174.9 | 25.0 | 357.7 | 25.2 | 343.1 | 25.6 | |||||||||||||||||||
Restructuring costs | 0.3 | — | 0.9 | 0.1 | 0.3 | — | 0.8 | 0.1 | |||||||||||||||||||
Operating income | $ | 46.8 | 6.3 | % | $ | 25.4 | 3.6 | % | $ | 66.1 | 4.7 | % | $ | 40.4 | 3.0 | % | |||||||||||
Interest expense, investment income and other income, net | (1.6 | ) | (0.2 | ) | (10.2 | ) | (1.4 | ) | (1.2 | ) | (0.1 | ) | (13.7 | ) | (1.0 | ) | |||||||||||
Income before income tax expense | 45.2 | 6.1 | 15.2 | 2.2 | 64.9 | 4.6 | 26.7 | 2.0 | |||||||||||||||||||
Income tax expense | 15.7 | 2.1 | 3.3 | 0.5 | 22.2 | 1.6 | 7.3 | 0.6 | |||||||||||||||||||
Net income | $ | 29.5 | 4.0 | % | $ | 11.9 | 1.7 | % | $ | 42.7 | 3.0 | % | $ | 19.4 | 1.4 | % | |||||||||||
Operating income | $ | 46.8 | 6.3 | % | $ | 25.4 | 3.6 | % | $ | 66.1 | 4.7 | % | $ | 40.4 | 3.0 | % | |||||||||||
Add: restructuring costs | 3.7 | 0.5 | 12.3 | 1.8 | 8.8 | 0.6 | 22.2 | 1.7 | |||||||||||||||||||
Adjusted operating income | $ | 50.5 | 6.8 | % | $ | 37.7 | 5.4 | % | $ | 74.9 | 5.3 | % | $ | 62.6 | 4.7 | % |
Americas | |||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
August 24, 2012 | August 26, 2011 | August 24, 2012 | August 26, 2011 | ||||||||||||||||||||||||
Revenue | $ | 531.9 | 100.0 | % | $ | 485.7 | 100.0 | % | $ | 1,006.5 | 100.0 | % | $ | 894.2 | 100.0 | % | |||||||||||
Cost of sales | 362.8 | 68.2 | 337.1 | 69.4 | 693.0 | 68.9 | 624.6 | 69.9 | |||||||||||||||||||
Restructuring costs | 3.5 | 0.7 | 5.2 | 1.1 | 8.2 | 0.8 | 12.5 | 1.4 | |||||||||||||||||||
Gross profit | 165.6 | 31.1 | 143.4 | 29.5 | 305.3 | 30.3 | 257.1 | 28.7 | |||||||||||||||||||
Operating expenses | 104.9 | 19.7 | 100.6 | 20.7 | 206.9 | 20.5 | 193.2 | 21.6 | |||||||||||||||||||
Restructuring costs | — | — | — | — | — | — | — | — | |||||||||||||||||||
Operating income | $ | 60.7 | 11.4 | % | $ | 42.8 | 8.8 | % | $ | 98.4 | 9.8 | % | $ | 63.9 | 7.1 | % | |||||||||||
Add: restructuring costs | 3.5 | 0.7 | 5.2 | 1.1 | 8.2 | 0.8 | 12.5 | 1.4 | |||||||||||||||||||
Adjusted operating income | $ | 64.2 | 12.1 | % | $ | 48.0 | 9.9 | % | $ | 106.6 | 10.6 | % | $ | 76.4 | 8.5 | % |
EMEA | |||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
August 24, 2012 | August 26, 2011 | August 24, 2012 | August 26, 2011 | ||||||||||||||||||||||||
Revenue | $ | 138.6 | 100.0 | % | $ | 133.8 | 100.0 | % | $ | 266.1 | 100.0 | % | $ | 287.7 | 100.0 | % | |||||||||||
Cost of sales | 101.6 | 73.3 | 97.4 | 72.8 | 196.3 | 73.8 | 206.2 | 71.7 | |||||||||||||||||||
Restructuring costs | (0.1 | ) | (0.1 | ) | 5.1 | 3.8 | 0.3 | 0.1 | 7.8 | 2.7 | |||||||||||||||||
Gross profit | 37.1 | 26.8 | 31.3 | 23.4 | 69.5 | 26.1 | 73.7 | 25.6 | |||||||||||||||||||
Operating expenses | 40.4 | 29.2 | 44.3 | 33.1 | 80.8 | 30.4 | 86.8 | 30.1 | |||||||||||||||||||
Restructuring costs | 0.1 | 0.1 | 0.8 | 0.6 | 0.1 | — | 0.8 | 0.3 | |||||||||||||||||||
Operating loss | $ | (3.4 | ) | (2.5 | )% | $ | (13.8 | ) | (10.3 | )% | $ | (11.4 | ) | (4.3 | )% | $ | (13.9 | ) | (4.8 | )% | |||||||
Add: restructuring costs | — | — | 5.9 | 4.4 | 0.4 | 0.2 | 8.6 | 3.0 | |||||||||||||||||||
Adjusted operating income (loss) | $ | (3.4 | ) | (2.5 | )% | $ | (7.9 | ) | (5.9 | )% | $ | (11.0 | ) | (4.1 | )% | $ | (5.3 | ) | (1.8 | )% |
Other | |||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||
August 24, 2012 | August 26, 2011 | August 24, 2012 | August 26, 2011 | ||||||||||||||||||||||||
Revenue | $ | 74.4 | 100.0 | % | $ | 81.0 | 100.0 | % | $ | 147.5 | 100.0 | % | $ | 158.0 | 100.0 | % | |||||||||||
Cost of sales | 49.0 | 65.9 | 53.4 | 65.9 | 98.2 | 66.6 | 103.4 | 65.4 | |||||||||||||||||||
Restructuring costs | — | — | 1.1 | 1.4 | — | — | 1.1 | 0.7 | |||||||||||||||||||
Gross profit | 25.4 | 34.1 | 26.5 | 32.7 | 49.3 | 33.4 | 53.5 | 33.9 | |||||||||||||||||||
Operating expenses | 27.3 | 36.7 | 25.5 | 31.5 | 54.6 | 37.0 | 50.0 | 31.7 | |||||||||||||||||||
Restructuring costs | 0.2 | 0.2 | 0.1 | 0.1 | 0.2 | 0.1 | — | — | |||||||||||||||||||
Operating income (loss) | $ | (2.1 | ) | (2.8 | )% | $ | 0.9 | 1.1 | % | $ | (5.5 | ) | (3.7 | )% | $ | 3.5 | 2.2 | % | |||||||||
Add: restructuring costs | 0.2 | 0.2 | 1.2 | 1.5 | 0.2 | 0.1 | 1.1 | 0.7 | |||||||||||||||||||
Adjusted operating income (loss) | $ | (1.9 | ) | (2.6 | )% | $ | 2.1 | 2.6 | % | $ | (5.3 | ) | (3.6 | )% | $ | 4.6 | 2.9 | % |
Corporate | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
August 24, 2012 | August 26, 2011 | August 24, 2012 | August 26, 2011 | ||||||||||||||||||||
Operating loss | $ | (8.4 | ) | $ | (4.5 | ) | $ | (15.4 | ) | $ | (13.1 | ) | |||||||||||
Add: restructuring costs | — | — | — | — | |||||||||||||||||||
Adjusted operating loss | $ | (8.4 | ) | $ | (4.5 | ) | $ | (15.4 | ) | $ | (13.1 | ) |
STEELCASE INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
August 24, 2012 | August 26, 2011 | August 24, 2012 | August 26, 2011 | ||||||||||||
Revenue | $ | 744.9 | $ | 700.5 | $ | 1,420.1 | $ | 1,339.9 | |||||||
Cost of sales | 513.4 | 487.9 | 987.5 | 934.2 | |||||||||||
Restructuring costs | 3.4 | 11.4 | 8.5 | 21.4 | |||||||||||
Gross profit | 228.1 | 201.2 | 424.1 | 384.3 | |||||||||||
Operating expenses | 181.0 | 174.9 | 357.7 | 343.1 | |||||||||||
Restructuring costs | 0.3 | 0.9 | 0.3 | 0.8 | |||||||||||
Operating income | 46.8 | 25.4 | 66.1 | 40.4 | |||||||||||
Interest expense | (4.6 | ) | (7.6 | ) | (9.1 | ) | (16.0 | ) | |||||||
Investment income (loss) | 1.3 | (2.6 | ) | 2.4 | 0.3 | ||||||||||
Other income, net | 1.7 | — | 5.5 | 2.0 | |||||||||||
Income before income tax expense | 45.2 | 15.2 | 64.9 | 26.7 | |||||||||||
Income tax expense | 15.7 | 3.3 | 22.2 | 7.3 | |||||||||||
Net income | $ | 29.5 | $ | 11.9 | $ | 42.7 | $ | 19.4 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.23 | $ | 0.09 | $ | 0.33 | $ | 0.15 | |||||||
Diluted | $ | 0.23 | $ | 0.09 | $ | 0.33 | $ | 0.14 | |||||||
Dividends declared and paid per common share | $ | 0.09 | $ | 0.06 | $ | 0.18 | $ | 0.12 | |||||||
Weighted average shares outstanding - basic | 127.1 | 133.2 | 127.9 | 133.6 | |||||||||||
Weighted average shares outstanding - diluted | 127.7 | 133.6 | 128.4 | 134.0 |
STEELCASE INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
(in millions) | ||||||||
August 24, 2012 | February 24, 2012 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 103.2 | $ | 112.1 | ||||
Short-term investments | 52.2 | 79.1 | ||||||
Accounts receivable, net | 333.4 | 271.4 | ||||||
Inventories | 142.2 | 139.5 | ||||||
Deferred income taxes | 55.5 | 42.4 | ||||||
Other current assets | 49.1 | 57.6 | ||||||
Total current assets | 735.6 | 702.1 | ||||||
Property, plant and equipment, net | 341.8 | 346.9 | ||||||
Company-owned life insurance | 232.1 | 227.6 | ||||||
Deferred income taxes | 92.5 | 120.0 | * | |||||
Goodwill | 179.8 | 176.6 | ||||||
Other intangible assets, net | 17.7 | 18.8 | ||||||
Other assets | 99.6 | 96.5 | ||||||
Total assets | $ | 1,699.1 | $ | 1,688.5 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 225.9 | $ | 191.3 | ||||
Short-term borrowings and current portion of long-term debt | 4.1 | 2.6 | ||||||
Accrued expenses | 253.8 | 268.1 | ||||||
Total current liabilities | 483.8 | 461.9 | ||||||
Long-term liabilities: | ||||||||
Long-term debt less current maturities | 287.8 | 288.9 | ||||||
Employee benefit plan obligations | 159.6 | 161.1 | ||||||
Other long-term liabilities | 79.6 | 80.5 | ||||||
Total long-term liabilities | 527.0 | 530.5 | ||||||
Total liabilities | 1,010.8 | 992.4 | ||||||
Shareholders’ equity: | ||||||||
Common stock | — | 1.1 | ||||||
Additional paid-in capital | 20.9 | 32.6 | ||||||
Accumulated other comprehensive income (loss) | (13.9 | ) | 0.8 | |||||
Retained earnings | 681.3 | 661.6 | * | |||||
Total shareholders’ equity | 688.3 | 696.1 | ||||||
Total liabilities and shareholders’ equity | $ | 1,699.1 | $ | 1,688.5 |
STEELCASE INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) | |||||||
(in millions) | |||||||
Six Months Ended | |||||||
August 24, 2012 | August 26, 2011 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 42.7 | $ | 19.4 | |||
Depreciation and amortization | 27.4 | 27.6 | |||||
Changes in cash surrender value of company-owned life insurance | (4.5 | ) | 0.9 | ||||
Changes in deferred income taxes | 11.8 | (2.9 | ) | ||||
Changes in operating assets and liabilities, net of acquisitions and divestiture: | |||||||
Accounts receivable, inventories and accounts payable | (33.7 | ) | (22.4 | ) | |||
Employee compensation liabilities | (26.3 | ) | (38.1 | ) | |||
Other assets and liabilities | (2.1 | ) | (20.8 | ) | |||
Other | 13.9 | 33.2 | |||||
Net cash provided by (used in) operating activities | 29.2 | (3.1 | ) | ||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (25.8 | ) | (29.0 | ) | |||
Proceeds from disposal of fixed assets | 14.1 | 0.4 | |||||
Purchases of short-term investments | (14.3 | ) | (158.2 | ) | |||
Liquidations of short-term investments | 41.7 | 456.4 | |||||
Acquisition | (4.9 | ) | (18.7 | ) | |||
Other | (6.0 | ) | 7.8 | ||||
Net cash provided by investing activities | 4.8 | 258.7 | |||||
FINANCING ACTIVITIES | |||||||
Repayments of long-term debt | (1.5 | ) | (253.2 | ) | |||
Dividends paid | (23.0 | ) | (16.0 | ) | |||
Common stock repurchases | (19.4 | ) | (23.1 | ) | |||
Other | 1.9 | (1.2 | ) | ||||
Net cash used in financing activities | (42.0 | ) | (293.5 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (0.9 | ) | 0.1 | ||||
Net decrease in cash and cash equivalents | (8.9 | ) | (37.8 | ) | |||
Cash and cash equivalents, beginning of period | 112.1 | 142.2 | |||||
Cash and cash equivalents, end of period | $ | 103.2 | $ | 104.4 |
CONTACT: | Investor Contact: |
Raj Mehan | |
Investor Relations | |
(616) 246-4251 | |
Media Contact: | |
Lauren Begley | |
Public Relations | |
(212) 931-6143 |