-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dx+eKgwCleDae37Rd3g37JVrmTzZcmyTjSM7h57myw26X4VsS5m8VV2Awjbg+7pH kUlht+TkJip7aP9vq9UlbA== 0001144204-07-068353.txt : 20071219 0001144204-07-068353.hdr.sgml : 20071219 20071219172222 ACCESSION NUMBER: 0001144204-07-068353 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071219 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071219 DATE AS OF CHANGE: 20071219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEELCASE INC CENTRAL INDEX KEY: 0001050825 STANDARD INDUSTRIAL CLASSIFICATION: OFFICE FURNITURE (NO WOOD) [2522] IRS NUMBER: 380819050 STATE OF INCORPORATION: MI FISCAL YEAR END: 0229 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13873 FILM NUMBER: 071317102 BUSINESS ADDRESS: STREET 1: 901 44TH ST CITY: GRAND RAPIDS STATE: MI ZIP: 49508 BUSINESS PHONE: 6162472710 MAIL ADDRESS: STREET 1: 901 44TH ST CITY: GRAND RAPIDS STATE: MI ZIP: 49508 8-K 1 v097750_8k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

______________________

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: December 19, 2007

______________________

STEELCASE INC.
 

Michigan
1-13873
38-0819050
(State of incorporation)
(Commission File Number)
(IRS employer identification number)

901 44th Street SE
  
Grand Rapids, Michigan
49508
(Address of principal executive offices)
(Zip code)

 
(616) 247-2710
______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

ITEM 2.02. Results of Operations and Financial Condition

Steelcase Inc. (“the Company”) reported its third quarter fiscal year 2008 results today and is furnishing the earnings release as Exhibit 99.1 attached hereto. Members of the public are invited to listen to the Company’s webcast conference call and view the accompanying presentation slides tomorrow, December 20, 2007, at 11:00 a.m. EST through the link at www.steelcase.com. The presentation slides will be available at www.steelcase.com before and during the webcast. A replay of the webcast, including presentation slides, can also be accessed through the Company’s website through January 21, 2008.

The earnings release contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of the Company. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation within the earnings release of non-GAAP financial measures to the most directly comparable GAAP financial measure.

The non-GAAP financial measures used within the Company’s earnings release are:
§  
Third quarter and year-to-date consolidated gross profit, excluding restructuring items, for the current and prior year in dollars and as a percent of revenue
§  
Third quarter and year-to-date gross profit by business segment, excluding restructuring items, for the current and prior year in dollars and as a percent of revenue
§  
Third quarter and year-to-date consolidated operating income, excluding restructuring items, for the current and prior year in dollars and as a percent of revenue
§  
Third quarter and year-to-date operating income by business segment, excluding restructuring items, for the current and prior year in dollars and as a percent of revenue.

These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors.

The information furnished pursuant to this Current Report on Form 8-K (including the exhibit hereto) shall not be considered “filed” under the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered “filed” or incorporated by reference therein.

EXHIBIT INDEX


Exhibit
Number
 
Description
   
99.1
Earnings Release - Third Quarter Ended November 23, 2007
   

 
 
 



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
Steelcase Inc.
   
   
Date: December 19, 2007
  
 
/S/ David C. Sylvester
David C. Sylvester
Vice President and Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
EX-99.1 2 v097750_ex99-1.txt Steelcase Reports Third Quarter Results Special cash dividend declared and share repurchase authorization increased GRAND RAPIDS, Mich., Dec. 19 /PRNewswire-FirstCall/ -- Steelcase Inc. (NYSE: SCS) today reported net income of $31.3 million, or $0.22 per share, for the third quarter of fiscal 2008. Current quarter results include a $(21.1) million charge related to PolyVision goodwill and intangible asset impairments, which after the reduction of related variable compensation expense and income taxes, reduced net income by $11.3 million, or $0.08 per share. Prior year net income was $32.8 million, or $0.22 per share, which included net restructuring cost of $(3.6) million after-tax. Steelcase reported revenue totaling $885.9 million for its third quarter of fiscal 2008, ahead of company estimates, compared to $802.0 million in the prior year. Revenue increased 10.5 percent driven by strong growth in both the North America and International segments. As compared to the prior year, third quarter revenue included a $(25.2) million unfavorable impact from dealer deconsolidations, net of acquisitions, while currency translation favorably impacted revenue by $23.2 million. "We continue to be pleased with the growth in our North America and International segments," said James P. Hackett, president and chief executive officer. "Though the U.S. financial markets have remained volatile, we have continued to increase our revenue consistent with our growth strategies." Cost of sales was reduced by 200 basis points to 66.5 percent in the third quarter, driven by a 230 basis point improvement in the North America segment. Benefits from prior restructuring actions and increased volume were the primary contributors to the improvement. Gross margin, which includes restructuring cost, was 33.5 percent in the third quarter, an improvement of 270 basis points from 30.8 percent in the same quarter last year. Prior year gross profit included $(5.5) million of restructuring cost. Operating expenses increased $37.6 million to 27.6 percent of revenue compared to 25.8 percent in the prior year. Operating expenses include a $(21.1) million charge related to the goodwill and intangible asset impairments, higher sales, marketing and product development costs, unfavorable currency translation effects and increased investments in longer-term growth initiatives. The higher operating expenses were partially offset by the impact of deconsolidated dealers, net of acquisitions, completed in the last four quarters. Reported operating income of $52.7 million, or 5.9 percent of revenue, improved from $40.5 million, or 5.0 percent of revenue, in the prior year. Prior year operating income included $(5.7) million of restructuring cost. Other income, net decreased by $10.3 million to $3.6 million driven primarily by prior year gains aggregating $4.9 million, a current year withholding tax on the repatriation of cash from a foreign subsidiary and lower interest income. The effective tax rate for the third quarter of 39.9 percent was higher than company estimates primarily due to the impact of the impairment charges. Cash and short-term investments increased $19.1 million to $544.1 million over the prior year quarter. Debt at the end of the quarter was $258.8 million. The company repurchased 805,900 shares in the third quarter at a total cost of $14.7 million. Dividend Declarations and Share Repurchase Authorization The company's Board of Directors today declared a special cash dividend of $1.75 per share in addition to a regular quarterly dividend of $0.15 per share. Both dividends will be paid on January 15, 2008 to shareholders of record as of January 2, 2008. The Steelcase Board of Directors also approved an increase to the company's share repurchase program by $250.0 million. An aggregate of $62.8 million currently remains under a previous share repurchase authorization. "We remain committed to improving the efficiency of our capital structure and returning value to shareholders," said David C. Sylvester, vice-president and chief financial officer. "Our targeted cash balance has been reduced, allowing for the declaration of the special dividend today and the ability to continue opportunistic share repurchases into the future." Outlook Steelcase expects fourth quarter revenue to increase 10 to 14 percent over the prior year quarter. The fourth quarter of fiscal 2008 includes an extra week due to the timing of the fiscal 2008 year-end. Steelcase expects to report earnings between $0.23 and $0.28 per share in the fourth quarter. The company reported earnings of $0.20 per share in the fourth quarter of the prior year, which included $(6.1) million of after-tax restructuring cost. In addition, the prior year included favorable tax adjustments and goodwill and intangible asset impairment charges. These adjustments, combined with related adjustments to variable compensation expense, had the net effect of increasing last year's fourth quarter net income by $10.8 million. The company has updated its three-year plan and is now targeting operating income of 10 to 11 percent of sales by fiscal 2011. Mr. Hackett concluded, "We have raised our longer-term target to reflect the continued traction of our growth strategies and increasingly flexible industrial system. Though the near-term U.S. economic environment remains uncertain, we are confident in the execution of our longer-term strategies." Business Segment Results (in millions) (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Nov 23, Nov 24, Nov 23, Nov 24, 2007 2006 %Change 2007 2006 %Change Revenue North America (1) $513.6 $469.6 9.4% $1,504.7 $1,407.4 6.9% International (2) 230.8 199.6 15.6% 615.6 526.0 17.0% Other (3) 141.5 132.8 6.6% 399.2 385.6 3.5% Consolidated Revenue $885.9 $802.0 10.5% $2,519.5 $2,319.0 8.6% Operating Income North America $53.6 $26.6 $140.0 $95.8 International 20.2 15.8 39.2 20.0 Other (13.9) 5.4 (2.5) 15.1 Corporate (4) (7.2) (7.3) (20.7) (20.0) Consolidated Operating Income $52.7 $40.5 $156.0 $110.9 Operating Income Percent 5.9% 5.0% 6.2% 4.8% Business Segment Footnotes - (1) The North America segment consists of the Steelcase Group, Turnstone, and Nurture by Steelcase. (2) The International segment includes all manufacturing and sales operations outside the U.S. and Canada. (3) The Other category includes the Premium Group, PolyVision, IDEO and Financial Services subsidiaries. (4) Corporate expenses include the executive function and portions of shared services functions such as human resources, finance, legal, research and development and corporate facilities. (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Nov 23, 2007 Nov 24, 2006 Nov 23, 2007 Nov 24, 2006 Revenue $885.9 100.0% $802.0 100.0% $2,519.5 100.0% $2,319.0 100.0% Cost of sales 589.1 66.5 549.2 68.5 1,680.9 66.7 1,593.2 68.7 Restructuring (benefit) cost (0.1) 0.0 5.5 0.7 (0.1) 0.0 14.1 0.6 Gross profit 296.9 33.5 247.3 30.8 838.7 33.3 711.7 30.7 Operating expenses 244.2 27.6 206.6 25.8 682.7 27.1 600.5 25.9 Restructuring cost 0.0 0.0 0.2 0.0 0.0 0.00 0.3 0.00 Operating income $52.7 5.9% $40.5 5.0% $156.0 6.2% $110.9 4.8% Gross profit, as reported $296.9 33.5% $247.3 30.8% $838.7 33.3% $711.7 30.7% Restructuring (benefit) cost (0.1) 0.0 5.5 0.7 (0.1) 0.0 14.1 0.6 Gross profit, excluding restructuring items $296.8 33.5% $252.8 31.5% $838.6 33.3% $725.8 31.3% Operating income, as reported $52.7 5.9% $40.5 5.0% $156.0 6.2% $110.9 4.8% Restructuring (benefit) cost (0.1) 0.0 5.7 0.7 (0.1) 0.0 14.4 0.6 Operating income, excluding restructuring items $52.6 5.9% $46.2 5.8% $155.9 6.2% $125.3 5.4% North America (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Nov 23, 2007 Nov 24, 2006 Nov 23, 2007 Nov 24, 2006 Revenue $513.6 100.0% $469.6 100.0% $1,504.7 100.0% $1,407.4 100.0% Cost of sales 350.7 68.2 330.8 70.5 1,023.4 68.0 991.1 70.4 Restructuring cost 0.3 0.1 5.2 1.1 2.0 0.1 10.8 0.8 Gross profit 162.6 31.7 133.6 28.4 479.3 31.9 405.5 28.8 Operating expenses 109.0 21.3 107.0 22.7 339.3 22.6 309.7 22.0 Operating income $53.6 10.4% $26.6 5.7% $140.0 9.3% $95.8 6.8% Gross profit, as reported $162.6 31.7% $133.6 28.4% $479.3 31.9% $405.5 28.8% Restructuring cost 0.3 0.1 5.2 1.1 2.0 0.1 10.8 0.8 Gross profit, excluding restructuring items $162.9 31.8% $138.8 29.6% $481.3 32.0% $416.3 29.6% Operating income, as reported $53.6 10.4% $26.6 5.7% $140.0 9.3% $95.8 6.8% Restructuring cost 0.6 0.1 5.2 1.1 2.0 0.1 10.8 0.8 Operating income, excluding restructuring items $54.2 10.6% $31.8 6.8% $142.0 9.4% $106.6 7.6% International (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Nov 23, 2007 Nov 24, 2006 Nov 23, 2007 Nov 24, 2006 Revenue $230.8 100.0% $199.6 100.0% $615.6 100.0% $526.0 100.0% Cost of sales 150.9 65.4 131.2 65.7 406.9 66.1 352.0 66.9 Restructuring (benefit) cost (0.5) (0.2) 0.3 0.2 (2.0) (0.3) 3.3 0.6 Gross profit 80.4 34.8 68.1 34.1 210.7 34.2 170.7 32.5 Operating expenses 60.2 26.0 52.2 26.1 171.5 27.8 150.6 28.7 Restructuring cost 0.0 0.0 0.1 0.1 0.0 0.0 0.1 0.0 Operating income $20.2 8.8% $15.8 7.9% $39.2 6.4% $20.0 3.8% Gross profit, as reported $80.4 34.8% $68.1 34.1% $210.7 34.2% $170.7 32.5% Restructuring (benefit) cost (0.5) (0.2) 0.3 0.2 (2.0) (0.3) 3.4 0.6 Gross profit, excluding restructuring items $79.9 34.6% $68.4 34.3% $208.7 33.9% $174.1 33.1% Operating income, as reported $20.2 8.8% $15.8 7.9% $39.2 6.4% $20.0 3.8% Restructuring (benefit) cost (0.5) (0.2) 0.4 0.2 (2.0) (0.3) 3.4 0.6 Operating income, excluding restructuring items $19.7 8.5% $16.2 8.1% $37.2 6.0% $23.4 4.4% Other (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Nov 23, 2007 Nov 24, 2006 Nov 23, 2007 Nov 24, 2006 Revenue $141.5 100.0% $132.8 100.0% $399.2 100.0% $385.6 100.0% Cost of sales 87.5 61.8 87.2 65.7 250.6 62.8 250.1 64.9 Restructuring cost (benefit) 0.1 0.1 0.0 0.0 (0.1) 0.0 0.0 0.0 Gross profit 53.9 38.1 45.6 34.3 148.7 37.2 135.5 35.1 Operating expenses 67.8 47.9 40.1 30.1 151.2 37.8 120.2 31.1 Restructuring cost 0.0 0.0 0.1 0.1 0.0 0.0 0.2 0.1 Operating income $(13.9) (9.8)% $5.4 4.1% $(2.5) (0.6)% $15.1 3.9% Gross profit, as reported $53.9 38.1% $45.6 34.3% $148.7 37.2% $135.5 35.1% Restructuring cost (benefit) 0.1 0.1 0.0 0.0 (0.1) 0.0 0.0 0.0 Gross profit, excluding restructuring items $54.0 38.2% $45.6 34.3% $148.6 37.2% $135.5 35.1% Operating income, as reported $(13.9) (9.8)% $5.4 4.1% $(2.5) (0.6)% $15.1 3.9% Restructuring cost (benefit) 0.1 0.1 0.1 0.0 (0.1) 0.0 0.2 0.1 Operating income, excluding restructuring items $(13.8) (9.8)% $5.5 4.1% $(2.6) (0.7)% $15.3 4.0% Corporate (Unaudited) (Unaudited) Three Months Ended Nine Months Ended Nov 23, 2007 Nov 24, 2006 Nov 23, 2007 Nov 24, 2006 Operating expenses $7.2 $7.3 $20.7 $20.0 Webcast Steelcase will discuss third quarter fiscal 2008 results and business outlook on a conference call and webcast at 11:00 a.m. EST tomorrow. Links to the webcast are available at www.steelcase.com/ir . Related presentation slides will be available on the company's website shortly before the start of the webcast. Non-GAAP Financial Measures This earnings release contains certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows of the company. Pursuant to the requirements of Regulation G, the company has provided a reconciliation above of non-GAAP financial measures to the most directly comparable GAAP financial measure. The non-GAAP financial measures used within the company's earnings release are: third quarter and nine months year-to-date consolidated gross margin, excluding restructuring items for the current and prior year in dollars and as a percent of revenue; and third quarter and nine months year-to-date operating income, excluding restructuring items for the current and prior year in dollars and as a percent of revenue, on a consolidated basis and for each business segment. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors. Forward-looking Statements From time to time, in written and oral statements, the company discusses its expectations regarding future events and its plans and objectives for future operations. These forward-looking statements generally are accompanied by words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "possible," "potential," "predict," "project," or other similar words, phrases or expressions. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to vary from the company's expectations because of factors such as, but not limited to, competitive and general economic conditions domestically and internationally; acts of terrorism, war, governmental action, natural disasters and other Force Majeure events; changes in the legal and regulatory environment; restructuring activities; currency fluctuations; changes in customer demands; and the other risks and contingencies detailed in the company's most recent Annual Report on Form 10-K and its 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. About Steelcase Inc. Steelcase, the global leader in the office furniture industry, helps people have a better work experience by providing products, services and insights into the ways people work. The company designs and manufactures architecture, furniture and technology products. Founded in 1912 and headquartered in Grand Rapids, Michigan, Steelcase (NYSE: SCS) serves customers through a network of over 600 independent dealers and approximately 13,000 employees worldwide. Fiscal 2007 revenue was $3.1 billion. Learn more at www.steelcase.com . STEELCASE INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in millions, except per share data) Three Months Nine Months Ended Ended Nov 23, Nov 24, Nov 23, Nov 24 2007 2006 2007 2006 Revenue $885.9 $802.0 $2,519.5 $2,319.0 Cost of sales 589.1 549.2 1,680.9 1,593.2 Restructuring (benefit) cost (0.1) 5.5 (0.1) 14.1 Gross profit 296.9 247.3 838.7 711.7 Operating expenses 244.2 206.6 682.7 600.5 Restructuring cost 0.0 0.2 0.0 0.3 Operating income 52.7 40.5 156.0 110.9 Interest expense (4.2) (5.1) (12.6) (14.3) Other income, net 3.6 13.9 21.8 25.5 Income before income taxes 52.1 49.3 165.2 122.1 Income tax expense 20.8 16.5 62.6 44.5 Net income $31.3 $32.8 $102.6 $77.6 Basic and diluted per share data: Basic earnings per share $0.22 $0.22 $0.72 $0.52 Diluted earnings per share $0.22 $0.22 $0.71 $0.52 Dividends declared and paid per common share $0.15 $0.12 $0.45 $0.32 Weighted average shares outstanding - basic 141.0 148.1 143.1 148.9 Weighted average shares outstanding - diluted 142.0 149.2 144.3 150.3 CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) (Unaudited) November 23, Feb. 23, ASSETS 2007 2007 Current assets: Cash and cash equivalents $467.6 $527.2 Short-term investments 76.5 33.1 Accounts receivable, net 437.2 352.6 Inventories 162.0 144.0 Other current assets 125.7 172.7 Total current assets 1,269.0 1,229.6 Property and equipment, net 482.4 477.1 Company owned life insurance 211.3 209.2 Goodwill and other intangible assets, net 265.4 278.0 Other assets 202.7 205.5 Total assets $2,430.8 $2,399.4 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $266.1 $222.0 Short-term borrowings and current portion of long-term debt 7.6 5.1 Accrued expenses: Employee compensation 161.3 162.7 Employee benefit plan obligations 33.1 34.2 Other 218.9 220.1 Total current liabilities 687.0 644.1 Long-term liabilities: Long-term debt less current maturities 251.2 251.5 Employee benefit plan obligations 193.8 191.1 Other long-term liabilities 104.8 74.8 Total long-term liabilities 549.8 517.4 Total liabilities 1,236.8 1,161.5 Shareholders' equity: Common stock 162.1 259.4 Additional paid in capital 4.4 6.3 Accumulated other comprehensive income (loss) 21.5 (1.3) Retained earnings 1,006.0 973.5 Total shareholders' equity 1,194.0 1,237.9 Total liabilities and shareholders' equity $2,430.8 $2,399.4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (in millions) Nine Months Ended Nov 23, Nov 24, 2007 2006 OPERATING ACTIVITIES Net income $102.6 $77.6 Depreciation and amortization 70.1 77.6 Changes in operating assets and liabilities (33.9) 9.8 Impairment adjustment 21.1 0.0 Other, net 7.9 27.4 Net cash provided by operating activities 167.8 192.4 INVESTING ACTIVITIES Capital expenditures (52.6) (33.9) Acquisitions of short-term investments, net (43.1) 0.0 Proceeds from the disposal of fixed assets 26.0 8.1 Other, net 4.3 6.2 Net cash used in investing activities (65.4) (19.6) FINANCING ACTIVITIES Repayments of long-term debt, net (1.4) (2.6) Dividends paid (64.9) (47.9) Common stock repurchases (124.5) (32.2) Common stock issuances 11.0 11.5 Other, net 5.7 (4.0) Net cash used in financing activities (174.1) (75.2) Effect of exchange rate changes on cash and cash equivalents 12.1 3.6 Net decrease in cash and cash equivalents (59.6) 101.2 Cash and cash equivalents, beginning of period 527.2 423.8 Cash and cash equivalents, end of period $467.6 $525.0 -----END PRIVACY-ENHANCED MESSAGE-----