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 (Date of earliest event reported) June 26, 2014
Steelcase Inc.
(Exact name of registrant as specified in its charter)
| Michigan | 1-13873 | 38-0819050 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 901 44th Street SE, Grand Rapids, Michigan | 49508 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (616) 247-2710
None
(Former name or former address, if changed since last report)
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:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | 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.
The Company reported its first quarter fiscal year 2015 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 on June 26, 2014, at 11:00 a.m. Eastern time through the link at ir.steelcase.com. Presentation slides are available at ir.steelcase.com. A replay of the webcast, including presentation slides, can also be accessed through the Company's website.
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 statements of income, balance sheets or statements 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:
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 Item 2.02 and Item 7.01 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.
Item 2.05. Costs Associated with Exit or Disposal Activities.
The Company announced today additional actions intended to safeguard its global competitiveness through changes in its EMEA manufacturing footprint. The Company has initiated procedures with the applicable works councils regarding a project to exit a manufacturing facility in France and transfer its activities to other existing facilities in the EMEA region. This project may involve the transfer of the operations of the facility to a third party or result in a closure. The Company expects to incur approximately $30 to $50 million of net cash costs, including costs associated with manufacturing inefficiencies, consolidation and production moves. The remaining costs may include payments to a third party or costs related to workforce reductions. The Company is unable to estimate a range for each of the categories of these costs at this time, as they will depend on whether the Company transfers the facility to a third party and the terms of such transfer, as well as the outcome of the works council procedures. The Company currently anticipates the majority of the costs relating to this project will be incurred in fiscal year 2015, but such timing will depend on the pace of discussions with the works councils and potential third party transferees of the facility. The Company anticipates annualized savings from these changes will be approximately $10 million when fully implemented.
The Company is also updating its estimate of the costs expected to be incurred in connection with its previously announced project to close its manufacturing facility in Durlangen, Germany and establish a new manufacturing location in Stribro, Czech Republic. The Company completed negotiations with the works councils related to these actions and now anticipates total cash restructuring costs for the project to approximate $26 million, with approximately $19 million relating to workforce reductions and approximately $7 million relating to manufacturing consolidation and production moves, and the Company expects to incur $15 million of such costs in the remaining three quarters of fiscal year 2015 and another $10 million in fiscal year 2016. The Company now anticipates a total of approximately $15 to $20 million of costs associated with labor inefficiencies as a result of the manufacturing consolidation and production moves, with approximately $7 million of such costs expected in the remaining three quarters of fiscal year 2015 and approximately $2 to $6 million expected during fiscal year 2016. The Company now expects total capital investments associated with this project to be approximately $35 million, with approximately $24 million remaining to be spent in fiscal year 2015. The Company continues to expect annualized savings from these actions will be approximately $10 million when fully implemented by the third quarter of fiscal year 2016.
The economic environment in Western Europe remains challenging, impacting the demand for the Company's products in the EMEA segment. The actions being announced today, in addition to previously announced actions, are part of the Company's on-going multi-year EMEA strategy to improve revenue and the fitness of its business model. The Company anticipates the EMEA segment will continue to report adjusted operating losses until the benefits of the multi-year EMEA strategy are more fully realized and the overall economic environment in Western Europe improves.
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; the Company's restructuring activities; changes in raw materials and commodity costs; currency fluctuations; changes in customer demand; and the other risks and contingencies detailed in this Report, the Company's most recent Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
Item 7.01. Regulation FD Disclosure.
The Company has updated its investor presentation and will make it available on the Company's website at ir.steelcase.com. The Company uses this presentation from time to time when Company executives interact with investors and analysts to discuss our business strategies and long-term goals.
Item 9.01. Financial Statements and Exhibits.
(d) EXHIBITS.
Exhibit
Number
Description
99.1
Earnings Release - First Quarter Ended May 30, 2014
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.
(Registrant) |
||
| June 26, 2014
(Date) |
/s/ MARK T. MOSSING
Mark T. Mossing Corporate Controller and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer) |
EXHIBIT INDEX
|
Exhibit |
|
|
|
|
EXHIBIT 99.1
GRAND RAPIDS, Mich., June 26, 2014 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE:SCS) today reported first quarter revenue of $723.1 million and net income of $21.0 million, or diluted earnings per share of $0.17. Excluding net restructuring benefits, adjusted earnings were $0.12 per share. In the prior year, Steelcase reported $667.1 million of revenue, diluted earnings per share of $0.10 and adjusted earnings of $0.13 per share.
Organic revenue growth over the prior year was 8 percent after adjusting for approximately $4.4 million of favorable currency translation effects. In the Americas, organic revenue growth over the prior year was 6 percent. The EMEA segment posted organic revenue growth of 10 percent, driven primarily by additional shipping days in the current quarter and higher levels of project business. The Other category posted organic revenue growth of 14 percent, driven by strong project business at PolyVision.
Current quarter operating income of $36.4 million compares to operating income of $20.4 million in the prior year. First quarter adjusted operating income of $26.7 million improved modestly compared with adjusted operating income of $24.8 million in the prior year. Operating leverage from the revenue growth was largely offset by higher cost of sales.
"We believe our revenue growth in the U.S. continued to outpace the overall industry, and we were pleased to see improved project business in various markets across EMEA and Asia Pacific," said Jim Keane, president and CEO. "Earnings were lower than our expectations due to less than expected growth in the Americas and higher costs associated with product warranties, freight and distribution, some of which are expected to continue to impact our results through the second quarter."
Cost of sales of 69.8 percent of revenue in the current quarter increased 130 basis points compared to the prior year. In the Americas, cost of sales increased by 70 basis points over the prior year primarily due to higher warranty, freight and distribution costs. In EMEA, cost of sales increased by 140 basis points driven largely by disruption costs associated with the manufacturing footprint changes. The Other category cost of sales increased 330 basis points over the prior year, due to competitive pricing pressures and higher overhead costs in Asia Pacific.
Operating expenses were $191.9 million in the first quarter, an increase of $6.8 million over the prior year. This increase was largely due to higher variable compensation expense, driven in part by restructuring benefits, and unfavorable currency translation effects. As a percentage of revenue, operating expenses improved by 130 basis points.
Net restructuring benefits of $9.7 million in the current quarter included restructuring costs related to previously announced actions in EMEA and a $12.0 million gain related to the sale of an idle manufacturing facility in the Americas.
Other income, net in the first quarter of $3.5 million increased $2.3 million compared to the prior year, primarily due to higher equity in income of unconsolidated ventures.
Cash, short-term investments and the cash surrender value of company-owned life insurance totaled $398 million and total debt was $286 million at the end of the first quarter.
The Board of Directors has declared a cash dividend of $0.105 per share, to be paid on or before July 16, 2014 to shareholders of record as of July 7, 2014.
The company announced today that it has initiated procedures with the applicable works councils regarding a project to exit a manufacturing facility in France and transfer its activities to other existing facilities in the EMEA region to safeguard the company's global competitiveness. This project may involve the transfer of the operations of the facility to a third party or result in a closure, and the total costs of the project are currently estimated at $30 to $50 million, with anticipated annual savings of approximately $10 million when fully implemented.
"The action announced today represents another step of our multi-year strategy to restore profitability in this region and safeguard our global competitiveness," said Dave Sylvester, senior vice president and CFO. "Together with our plan to exit a manufacturing facility in Germany (announced in the third quarter of fiscal 2014), these actions are expected to reduce our adjusted operating losses by approximately $20 million on an annualized basis when fully implemented."
Outlook
In the Americas, first quarter orders were flat compared to the prior year, and customer order backlog at the end of the first quarter increased approximately 6 percent compared to the prior year. EMEA first quarter orders grew significantly due to favorable currency fluctuations, additional shipping days in the current quarter and strength in project business (including a large government project won in fiscal 2013 which is expected to begin shipping in the second half of fiscal 2015). As a result, EMEA customer order backlog at the end of the first quarter increased approximately 23 percent compared to the prior year. The company expects second quarter fiscal 2015 revenue to be in the range of $760 to $785 million, which reflects expected organic revenue growth in the range of 0 to 3 percent over the prior year. The company reported revenue of $757.6 million in the second quarter of fiscal 2014.
Steelcase expects to report diluted earnings between $0.18 to $0.22 per share for the second quarter of fiscal 2015. This estimate includes approximately $0.04 per share of restructuring costs relating to previously announced restructuring projects. Adjusted for the estimated restructuring costs, the company expects to report adjusted earnings between $0.22 to $0.26 per share. The estimates also include approximately $6 million of operating costs associated with disruption. The estimates do not include any restructuring costs associated with the project announced today due to the uncertainty of the timing and amount of such costs. Steelcase reported diluted earnings per share of $0.22 and adjusted earnings per share of $0.24 in the second quarter of fiscal 2014.
"Taking into consideration a strong project pipeline and our award-winning new product introductions, we expect to continue our growth in the Americas in the second quarter, which would mark the 18th consecutive quarter of organic revenue growth," Mr. Keane said. "And we remain optimistic about the longer-term potential across EMEA and Asia Pacific as we continue to improve our competitiveness. Projects like the one we announced today are always challenging, and I am thankful for an organization dedicated to our success and ready to address those challenges."
| Business Segment Results | |||
| (in millions) | |||
| (Unaudited) | |||
| Three Months Ended | |||
|
May 30, 2014 |
May 24, 2013 |
% Change |
|
| Revenue | |||
| Americas (1) | $ 506.3 | $ 478.8 | 5.7% |
| EMEA (2) | 147.6 | 126.7 | 16.5% |
| Other (3) | 69.2 | 61.6 | 12.3% |
| Consolidated revenue | $ 723.1 | $ 667.1 | 8.4% |
| Operating income (loss) | |||
| Americas | $ 53.2 | $ 38.7 | |
| EMEA | (7.7) | (10.3) | |
| Other | — | 1.9 | |
| Corporate (4) | (9.1) | (9.9) | |
| Consolidated operating income | $ 36.4 | $ 20.4 | |
| Operating income percent | 5.0% | 3.1% | |
| Revenue Mix | |||
| Americas (1) | 70.0% | 71.8% | |
| EMEA (2) | 20.4% | 19.0% | |
| Other (3) | 9.6% | 9.2% | |
| Business Segment Footnotes | |||
| 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, Details and Turnstone brands. | |||
| 2. The EMEA segment serves customers in Europe, the Middle East and Africa primarily under the Steelcase and Coalesse brands, with an emphasis on freestanding furniture systems, storage and seating solutions. | |||
| 3. The Other category includes Asia Pacific, Designtex and PolyVision. | |||
| 4. Corporate expenses include unallocated portions of shared services functions such as information technology, human resources, finance, executive, corporate facilities, legal and research. | |||
| YEAR OVER YEAR ORGANIC REVENUE GROWTH BY SEGMENT | ||||
| Q1 2015 vs. Q1 2014 | ||||
| Steelcase Inc. | Americas | EMEA | Other category | |
| Q1 2014 revenue | $ 667.1 | $ 478.8 | $ 126.7 | $ 61.6 |
| Currency translation effects* | 4.4 | (2.4) | 7.6 | (0.8) |
| Q1 2014 revenue, adjusted | 671.5 | 476.4 | 134.3 | 60.8 |
| Q1 2015 revenue, reported | 723.1 | 506.3 | 147.6 | 69.2 |
| Organic growth $ | $ 51.6 | $ 29.9 | $ 13.3 | $ 8.4 |
| Organic growth % | 8% | 6% | 10% | 14% |
| * Currency translation effects represent the estimated net effect of translating Q1 2014 foreign currency revenues using the average exchange rates during Q1 2015. | ||||
| PROJECTED ORGANIC REVENUE GROWTH | ||||
| Q2 2015 vs. Q2 2014 | ||||
| Steelcase Inc. | ||||
| Q2 2014 revenue | $ 758 | |||
| Currency translation effects* | 2 | |||
| Q2 2014 revenue, adjusted | 760 | |||
| Q2 2015 revenue, projected | 760 - 785 | |||
| Organic growth $ | $ 0 - 25 | |||
| Organic growth % | 0% - 3% | |||
| * Currency translation effects represent the estimated net effect of translating Q2 2014 foreign currency revenues using the exchange rate at the end of Q1 2015. | ||||
| ADJUSTED EARNINGS PER SHARE | (Unaudited) | |
| Three Months Ended | ||
|
May 30, 2014 |
May 24, 2013 |
|
| Diluted earnings per share | $ 0.17 | $ 0.10 |
| Restructuring costs (benefits) per share, net of tax | (0.05) | 0.03 |
| Diluted earnings per share, adjusted | $ 0.12 | $ 0.13 |
| PROJECTED ADJUSTED EARNINGS PER SHARE | (Unaudited) | |
| Three Months Ended | ||
|
August 29, 2014 (projected) |
August 23, 2013 |
|
| Diluted earnings per share | $ 0.18 - 0.22 | $ 0.22 |
| Restructuring costs per share, net of tax | 0.04 | 0.02 |
| Diluted earnings per share, adjusted | $ 0.22 - 0.26 | $ 0.24 |
| Steelcase Inc. | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
|
May 30, 2014 |
May 24, 2013 |
|||
| Revenue | $ 723.1 | 100.0% | $ 667.1 | 100.0% |
| Cost of sales | 504.5 | 69.8 | 457.2 | 68.5 |
| Restructuring costs (benefits) | (10.5) | (1.5) | 0.2 | — |
| Gross profit | 229.1 | 31.7 | 209.7 | 31.5 |
| Operating expenses | 191.9 | 26.5 | 185.1 | 27.8 |
| Restructuring costs | 0.8 | 0.2 | 4.2 | 0.6 |
| Operating income | $ 36.4 | 5.0% | $ 20.4 | 3.1% |
| Interest expense, investment income and other income, net | (0.5) | — | (2.6) | (0.4) |
| Income before income tax expense | 35.9 | 5.0 | 17.8 | 2.7 |
| Income tax expense | 14.9 | 2.1 | 4.6 | 0.7 |
| Net income | $ 21.0 | 2.9% | $ 13.2 | 2.0% |
| Operating income | $ 36.4 | 5.0% | $ 20.4 | 3.1% |
| Add: restructuring costs (benefits) | (9.7) | (1.3) | 4.4 | 0.6 |
| Adjusted operating income | $ 26.7 | 3.7% | $ 24.8 | 3.7% |
| Americas | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
|
May 30, 2014 |
May 24, 2013 |
|||
| Revenue | $ 506.3 | 100.0% | $ 478.8 | 100.0% |
| Cost of sales | 345.9 | 68.3 | 323.5 | 67.6 |
| Restructuring costs (benefits) | (11.6) | (2.3) | 0.2 | — |
| Gross profit | 172.0 | 34.0 | 155.1 | 32.4 |
| Operating expenses | 118.8 | 23.5 | 115.4 | 24.1 |
| Restructuring costs | — | — | 1.0 | 0.2 |
| Operating income | $ 53.2 | 10.5% | $ 38.7 | 8.1% |
| Add: restructuring costs (benefits) | (11.6) | (2.3) | 1.2 | 0.2 |
| Adjusted operating income | $ 41.6 | 8.2% | $ 39.9 | 8.3% |
| EMEA | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
|
May 30, 2014 |
May 24, 2013 |
|||
| Revenue | $ 147.6 | 100.0% | $ 126.7 | 100.0% |
| Cost of sales | 111.7 | 75.6 | 94.0 | 74.2 |
| Restructuring costs | 1.1 | 0.8 | — | — |
| Gross profit | 34.8 | 23.6 | 32.7 | 25.8 |
| Operating expenses | 41.7 | 28.3 | 39.8 | 31.4 |
| Restructuring costs | 0.8 | 0.5 | 3.2 | 2.5 |
| Operating loss | $ (7.7) | (5.2)% | $ (10.3) | (8.1)% |
| Add: restructuring costs | 1.9 | 1.3 | 3.2 | 2.5 |
| Adjusted operating loss | $ (5.8) | (3.9)% | $ (7.1) | (5.6)% |
| Other category | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
|
May 30, 2014 |
May 24, 2013 |
|||
| Revenue | $ 69.2 | 100.0% | $ 61.6 | 100.0% |
| Cost of sales | 46.9 | 67.8 | 39.7 | 64.5 |
| Restructuring costs | — | — | — | — |
| Gross profit | 22.3 | 32.2 | 21.9 | 35.5 |
| Operating expenses | 22.3 | 32.2 | 20.0 | 32.5 |
| Restructuring costs | — | — | — | — |
| Operating income | $ — | — % | $ 1.9 | 3.0% |
| Add: restructuring costs | — | — | — | — |
| Adjusted operating income | $ — | — % | $ 1.9 | 3.0% |
| Corporate | ||||
| (Unaudited) | ||||
| Three Months Ended | ||||
|
May 30, 2014 |
May 24, 2013 |
|||
| Operating loss | $ (9.1) | $ (9.9) | ||
| Add: restructuring costs | — | — | ||
| Adjusted operating loss | $ (9.1) | $ (9.9) | ||
Webcast
Steelcase will discuss first quarter results and business outlook on a conference call and webcast at 11:00 a.m. Eastern time today. Links to the webcast are available at ir.steelcase.com. Related presentation slides will be available on the company's website shortly after this press release is issued.
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 statements of income, balance sheets or statements of cash flow 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: (1) organic revenue growth (decline), which represents the change in revenue excluding currency translation effects and the impacts of acquisitions and divestitures; (2) adjusted operating income (loss), which represents operating income (loss), excluding restructuring costs (benefits) and goodwill and intangible asset impairment charges; and (3) adjusted earnings (loss) per share, which represents earnings (loss) per share, excluding restructuring costs (benefits) and goodwill and intangible asset impairment charges, net of tax. 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; changes in raw materials and commodity costs; 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.
For over 100 years, Steelcase Inc. has helped create great experiences for the world's leading organizations, across industries. We demonstrate this through our family of brands - including Steelcase®, Coalesse®, Designtex®, Details®, PolyVision® and Turnstone®. Together, they offer a comprehensive portfolio of architecture, furniture and technology products and services designed to unlock human promise and support social, economic and environmental sustainability. We are globally accessible through a network of channels, including over 800 dealer locations. Steelcase is a global, industry-leading and publicly traded company with fiscal 2014 revenue of $3.0 billion.
| STEELCASE INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||
| (in millions, except per share data) | ||
| Three Months Ended | ||
|
May 30, 2014 |
May 24, 2013 |
|
| Revenue | $ 723.1 | $ 667.1 |
| Cost of sales | 504.5 | 457.2 |
| Restructuring costs (benefits) | (10.5) | 0.2 |
| Gross profit | 229.1 | 209.7 |
| Operating expenses | 191.9 | 185.1 |
| Restructuring costs | 0.8 | 4.2 |
| Operating income | 36.4 | 20.4 |
| Interest expense | (4.4) | (4.4) |
| Investment income | 0.4 | 0.6 |
| Other income, net | 3.5 | 1.2 |
| Income before income tax expense | 35.9 | 17.8 |
| Income tax expense | 14.9 | 4.6 |
| Net income | $ 21.0 | $ 13.2 |
| Earnings per share: | ||
| Basic | $ 0.17 | $ 0.10 |
| Diluted | $ 0.17 | $ 0.10 |
| Weighted average shares outstanding - basic | 125.3 | 126.5 |
| Weighted average shares outstanding - diluted | 126.6 | 127.9 |
| Dividends declared and paid per common share | $ 0.105 | $ 0.100 |
| STEELCASE INC. | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||
| (in millions, except share data) | ||
|
May 30, 2014 |
February 28, 2014 |
|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 158.3 | $ 201.8 |
| Short-term investments | 84.8 | 119.5 |
| Accounts receivable, net | 322.1 | 306.8 |
| Inventories | 161.1 | 151.5 |
| Deferred income taxes | 47.8 | 56.0 |
| Prepaid expenses | 20.8 | 19.3 |
| Other current assets | 29.2 | 35.0 |
| Total current assets | 824.1 | 889.9 |
| Property, plant and equipment, net | 377.5 | 377.0 |
| Company-owned life insurance ("COLI") | 155.2 | 154.3 |
| Deferred income taxes | 79.6 | 85.1 |
| Goodwill | 108.3 | 108.1 |
| Other intangible assets, net | 16.2 | 16.6 |
| Investments in unconsolidated affiliates | 54.4 | 53.0 |
| Other assets | 40.9 | 42.7 |
| Total assets | $ 1,656.2 | $ 1,726.7 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 220.0 | $ 212.5 |
| Short-term borrowings and current portion of long-term debt | 2.6 | 2.6 |
| Accrued expenses: | ||
| Employee compensation | 87.3 | 152.8 |
| Employee benefit plan obligations | 17.5 | 26.1 |
| Customer deposits | 17.2 | 16.0 |
| Product warranties | 20.4 | 17.5 |
| Other | 107.8 | 110.7 |
| Total current liabilities | 472.8 | 538.2 |
| Long-term liabilities: | ||
| Long-term debt less current maturities | 283.8 | 284.4 |
| Employee benefit plan obligations | 146.9 | 151.1 |
| Other long-term liabilities | 65.0 | 75.9 |
| Total long-term liabilities | 495.7 | 511.4 |
| Total liabilities | 968.5 | 1,049.6 |
| Shareholders' equity: | ||
| Common stock | — | — |
| Additional paid-in capital | 3.7 | — |
| Accumulated other comprehensive income | 0.3 | 0.8 |
| Retained earnings | 683.7 | 676.3 |
| Total shareholders' equity | 687.7 | 677.1 |
| Total liabilities and shareholders' equity | $ 1,656.2 | $ 1,726.7 |
| STEELCASE INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) | ||
| (in millions) | ||
| Three Months Ended | ||
|
May 30, 2014 |
May 24, 2013 |
|
| OPERATING ACTIVITIES | ||
| Net income | $ 21.0 | $ 13.2 |
| Depreciation and amortization | 14.7 | 14.1 |
| Deferred income taxes | 13.0 | 0.7 |
| Restructuring costs (benefits) | (9.7) | 4.4 |
| Non-cash stock compensation | 9.6 | 10.8 |
| Equity in income of unconsolidated affiliates | (3.7) | (1.7) |
| Dividends received from unconsolidated affiliates | 2.3 | 0.7 |
| Other | (1.8) | (1.3) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (15.0) | (16.6) |
| Inventories | (9.5) | (10.4) |
| Other assets | (10.5) | (2.5) |
| Accounts payable | 7.6 | 14.1 |
| Employee compensation liabilities | (74.4) | (48.0) |
| Employee benefit obligations | (14.6) | (16.4) |
| Accrued expenses and other liabilities | (1.6) | (0.4) |
| Net cash used in operating activities | (72.6) | (39.3) |
| INVESTING ACTIVITIES | ||
| Capital expenditures | (15.8) | (18.4) |
| Proceeds from disposal of fixed assets | 19.0 | 0.9 |
| Purchases of investments | (27.0) | (9.8) |
| Liquidations of investments | 62.8 | 66.4 |
| Other | 9.8 | (0.4) |
| Net cash provided by investing activities | 48.8 | 38.7 |
| FINANCING ACTIVITIES | ||
| Dividends paid | (13.6) | (12.5) |
| Common stock repurchases | (5.9) | (31.7) |
| Excess tax benefit from vesting of stock awards | — | (1.1) |
| Repayments of long-term debt | (0.6) | (0.6) |
| Net cash used in financing activities | (20.1) | (45.9) |
| Effect of exchange rate changes on cash and cash equivalents | 0.4 | (0.8) |
| Net decrease in cash and cash equivalents | (43.5) | (47.3) |
| Cash and cash equivalents, beginning of period | 201.8 | 150.4 |
| Cash and cash equivalents, end of period | $ 158.3 | $ 103.1 |
CONTACT: Investor Contact:
Raj Mehan
Investor Relations
(616) 246-4251
Media Contact:
Lauren Parker
Corporate Communications
(212) 931-6143