-----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, DpV0JxeDjeArnAlemHAI3l4m8cFuSdhN7E4pZa155TZeQWrYawlrWBlPZ0mTsC6B 7de5UkCixqqSs5RwXBl8OA== 0001275287-07-001526.txt : 20070329 0001275287-07-001526.hdr.sgml : 20070329 20070329091448 ACCESSION NUMBER: 0001275287-07-001526 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070329 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20070329 DATE AS OF CHANGE: 20070329 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: 0223 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13873 FILM NUMBER: 07725847 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 si9423.txt FORM 8-K ================================================================================ 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: MARCH 29, 2007 ---------- STEELCASE INC. Michigan 1-13873 38-0819050 (State of (Commission (IRS employer incorporation) File Number) 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.): [ ] 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 CRF 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 Steelcase Inc. ("the Company") reported its fourth quarter and fiscal year 2007 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 today, March 29, 2007, at 11:00 a.m. EDT through the link at www.steelcase.com. The presentation slides will be available at www.steelcase.com shortly before and during the webcast. A replay of the webcast, including presentation slides, can also be accessed through the Company's website through April 29, 2007. 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: o Fourth quarter and fiscal year consolidated gross margin, excluding restructuring charges, for the current and prior year in dollars and as a percent of revenue o Fourth quarter and fiscal year gross margin by business segment, excluding restructuring charges, for the current and prior year in dollars and as a percent of revenue o Fourth quarter and fiscal year consolidated operating income, excluding restructuring charges, for the current and prior year in dollars and as a percent of revenue. o Fourth quarter and fiscal year operating income by business segment, excluding restructuring charges, 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 - Fourth Quarter Ended February 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: March 29, 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 si9423ex991.txt EXHIBIT 99.1 Exhibit 99.1 STEELCASE REPORTS PROFITABLE GROWTH FOR FOURTH QUARTER - FISCAL YEAR 2007 NET INCOME MORE THAN DOUBLES TO $107 MILLION - GRAND RAPIDS, Mich., March 29 /PRNewswire-FirstCall/ -- Steelcase Inc. (NYSE: SCS) today announced fourth quarter and fiscal year 2007 financial results. Steelcase reported fourth quarter revenue of $779.0 million and net income of $29.3 million or $0.20 per share. For fiscal year 2007, revenue grew to $3.1 billion and net income more than doubled to $106.9 million or $0.72 per share. "We improved business performance, both financially and with our customers," said James P. Hackett, president and CEO. "As our performance indicates, we are focused on giving customers what they value and leveraging our global network, while continuing our work to achieve world class process excellence." Fourth Quarter Results Reported revenue of $779.0 million for the fourth quarter increased 5.4 percent compared to $739.3 million in the prior year quarter, in line with company estimates. The International segment reported 17% growth over the prior year. Current year revenues benefited by $15.9 million from currency effects and included $10.0 million from net acquisitions, compared with the prior year. Net income increased significantly to $29.3 million, or $0.20 per share for the fourth quarter of fiscal 2007 ahead of company estimates of $0.14 to $0.19 per share. Significant improvements in the International segment, along with positive audit outcomes and implementation of tax planning strategies resulted in favorable adjustments to tax reserves and deferred tax asset valuation allowances totaling $24.8 million in the fourth quarter. In addition, the company recorded intangible asset and goodwill impairment charges totaling $(7.7) million after-tax. These adjustments, combined with related variable compensation expense of $(6.3) million after-tax, had the net effect of increasing net income by $10.8 million. Reported results also included net restructuring charges of $(6.1) million after-tax primarily related to facility rationalizations in the company's North America segment. Restructuring costs were higher than anticipated due to additional charges recognized in connection with the completion of the sale of the company's Grand Rapids manufacturing campus. Net restructuring charges were $(7.1) million after-tax in the prior year quarter. Cost of sales was reduced to 68.7 percent of sales, a 160 basis point decrease compared to the prior year. Improvements in both the International and North America segments were the key drivers. These improvements, in addition to lower restructuring charges, increased gross margin to 30.4 percent in the fourth quarter from 28.2 percent in the prior year quarter. Operating expenses increased to $231.9 million or 29.7 percent of sales from $199.3 million or 26.9 percent of sales in the prior year. Reported expenses included $11.7 million of non-cash intangible asset and goodwill impairment charges. Higher variable compensation costs, spending on longer-term growth initiatives, currency effects and net acquisitions also contributed to the increase. Other income, net was $3.9 million compared to $7.5 million reported last year. The decrease was driven by withholding taxes resulting from the repatriation of cash from a foreign subsidiary. Fiscal Year 2007 Results Revenue for the fiscal year of $3.1 billion increased 8.0 percent compared to $2.9 billion last year. Fiscal 2007 revenue included $33.2 million from net acquisitions and $25.8 million from favorable currency effects, compared with the prior year. Reported net income more than doubled to $106.9 million or $0.72 per share. Net income in fiscal 2006 was $48.9 million, or $0.33 per share. Restructuring charges in fiscal 2007 totaled $(15.6) million after-tax versus $(24.9) million in fiscal 2006. Operating income of $113.7 million compared with $82.5 million in the prior year. Operating income included $(23.7) million of restructuring charges in the current year compared to $(38.9) million of charges in the prior year. Operating income excluding restructuring charges was $137.4 million versus $121.4 million in the prior year. As a result of the tax valuation and reserve adjustments made in the fourth quarter, the company's full year effective tax rate was 14.2%, significantly lower than the previous estimate of 34% to 35%. The company believes its fiscal 2008 effective tax rate will be between 34% and 35%. Cash and short-term investments increased $136.5 million to $560.3 million at the end of fiscal 2007. Total debt at the end of the fiscal year was $255.1 million resulting in cash and short term investments exceeding total debt by $305.2 million. As part of its share repurchase authorizations, the company repurchased approximately 4.4 million shares at a total cost of $76.1 million in fiscal 2007. As announced on March 23, 2007, the Steelcase Board of Directors declared a dividend of $0.15 per share payable to shareholders of record as of April 3, 2007. This represents an increase of 15 percent from $0.13 per share paid in the prior quarter and an increase of 50 percent from $0.10 per share paid in the prior year. "We were particularly pleased with the strong improvement in quarterly results achieved again by our International segment and the significant year-over-year improvement in our net income," said David Sylvester, vice president and CFO. "Our continued focus on the strategic aspects of our business should afford us room for additional operating margin expansion in fiscal 2008." Outlook Based on recent strengthening in order patterns, the company expects first quarter fiscal 2008 revenue to be 6% to 10% percent higher than the prior year quarter with growth more balanced across its business segments. Steelcase expects to report earnings for the first quarter of fiscal 2008 between $0.15 and $0.20 per share, including restructuring charges of $(2) to $(4) million after-tax. These estimates reflect increased spending on longer-term growth initiatives. The company reported earnings of $0.12 per share in the first quarter of the prior year, including after-tax restructuring charges of $(2.7) million. Consistent with past practices, the company is not providing full year guidance but does expect to continue its improvements in profitability towards the achievement of its long-term operating income margin of 10%. Mr. Hackett concluded, "Our mission to provide a better work experience for our customers and dealers remains central to our strategies. This strategic focus is keeping our core businesses healthy and growing. It has also allowed us to build our capability to win with smaller customers and sharpened our concentration on new and emerging markets." Business Segment Results (in millions)
Fourth Quarter Year-To-Date Three Months Ended Twelve Months Ended ---------------------------- ---------------------------- Feb. 23, Feb. 24, Feb. 23, Feb. 24, 2007 2006 %Inc. 2007 2006 %Inc. ------------ ------------ ------------ ------------ ------------ ------------ Revenue North America (1) $ 417.2 $ 413.7 0.8% 1,723.0 1,628.0 5.8% International (2) 209.8 179.3 17.0% 735.8 644.5 14.2% Steelcase Design Partnership(3) 89.8 85.3 5.3% 359.9 340.8 5.6% Other (4) 62.2 61.0 2.0% 279.3 255.6 9.3% ------------ ------------ ------------ ------------ ------------ Consolidated Revenue $ 779.0 $ 739.3 5.4% 3,098.0 2,868.9 8.0% ============ ============ ============ ============ Operating Income North America $ 2.5 $ 10.5 $ 82.1 $ 64.6 International 14.2 (1.2) 34.2 (1.3) Steelcase Design Partnership 8.4 8.7 33.4 34.9 Other (22.3) (8.7) (36.0) (15.7) ------------ ------------ ------------ ------------ Consolidated Operating Income $ 2.8 $ 9.3 $ 113.7 $ 82.5 ============ ============ ============ ============ Operating Income Percent 0.4% 1.3% 3.7% 2.9%
Business Segment Footnotes (1) North America business segment includes the company's Steelcase and Turnstone brands, consolidated dealers in the U.S. and Canada, and services. (2) International business segment includes all manufacturing and sales operations outside the U.S. and Canada. (3) Steelcase Design Partnership business segment includes Brayton, The Designtex Group, Details, Metro and Vecta. (4) Other includes Steelcase Financial Services, PolyVision, IDEO subsidiaries, other ventures and unallocated corporate expenses. Steelcase Inc.
Three Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 779.0 100.0% $ 739.3 100.0% Cost of sales 535.0 68.7 519.6 70.3 Restructuring costs 7.2 0.9 11.0 1.5 ------------ ------------ ------------ ------------ Gross margin 236.8 30.4 208.7 28.2 Operating expenses 231.9 29.7 199.3 26.9 Restructuring costs 2.1 0.3 0.1 0.0 ------------ ------------ ------------ ------------ Operating income $ 2.8 0.4% $ 9.3 1.3% ============ ============ ============ ============ Gross Margin, as reported $ 236.8 30.4% $ 208.7 28.2% Restructuring Charges 7.2 0.9 11.0 1.5 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 244.0 31.3% $ 219.7 29.7% ============ ============ ============ ============ Operating Income, as reported $ 2.8 0.4% $ 9.3 1.3% Restructuring Charges 9.3 1.2 11.1 1.5 ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 12.1 1.6% $ 20.4 2.8% ============ ============ ============ ============
Twelve Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 3,098.0 100.0% $ 2,868.9 100.0% Cost of sales 2,128.2 68.7 1,989.4 69.3 Restructuring costs 21.3 0.7 33.2 1.2 ------------ ------------ ------------ ------------ Gross margin 948.5 30.6 846.3 29.5 Operating expenses 832.4 26.8 758.1 26.4 Restructuring costs 2.4 0.1 5.7 0.2 ------------ ------------ ------------ ------------ Operating income $ 113.7 3.7% $ 82.5 2.9% ============ ============ ============ ============ Gross Margin, as reported $ 948.5 30.6% $ 846.3 29.5% Restructuring Charges 21.3 0.7 33.2 1.2 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 969.8 31.3% $ 879.5 30.7% ============ ============ ============ ============ Operating Income, as reported $ 113.7 3.7% $ 82.5 2.9% Restructuring Charges 23.7 0.8 38.9 1.4 ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 137.4 4.5% $ 121.4 4.3% ============ ============ ============ ============
North America
Three Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 417.2 100.0% $ 413.7 100.0% Cost of sales 296.1 71.0 303.8 73.4 Restructuring costs 7.7 1.8 7.7 1.9 ------------ ------------ ------------ ------------ Gross margin 113.4 27.2 102.2 24.7 Operating expenses 109.2 26.2 91.7 22.2 Restructuring costs 1.7 0.4 - - ------------ ------------ ------------ ------------ Operating income $ 2.5 0.6% $ 10.5 2.5% ============ ============ ============ ============ Gross Margin, as reported $ 113.4 27.2% $ 102.2 24.7% Restructuring Charges 7.7 1.8 7.7 1.9 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 121.1 29.0% $ 109.9 26.6% ============ ============ ============ ============ Operating Income, as reported $ 2.5 0.6% $ 10.5 2.5% Restructuring Charges 9.4 2.2 7.7 1.9 ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 11.9 2.8% $ 18.2 4.4% ============ ============ ============ ============
Twelve Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 1,723.0 100.0% $ 1,628.0 100.0% Cost of sales 1,222.6 70.9 1,177.7 72.3 Restructuring costs 18.5 1.1 22.6 1.4 ------------ ------------ ------------ ------------ Gross margin 481.9 28.0 427.7 26.3 Operating expenses 398.1 23.1 363.1 22.3 Restructuring costs 1.7 0.1 - - ------------ ------------ ------------ ------------ Operating income $ 82.1 4.8% $ 64.6 4.0% ============ ============ ============ ============ Gross Margin, as reported $ 481.9 28.0% $ 427.7 26.3% Restructuring Charges 18.5 1.1 22.6 1.4 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 500.4 29.1% $ 450.3 27.7% ============ ============ ============ ============ Operating Income, as reported $ 82.1 4.8% $ 64.6 4.0% Restructuring Charges 20.2 1.2 22.6 1.4 ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 102.3 6.0% $ 87.2 5.4% ============ ============ ============ ============
International
Three Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 209.8 100.0% $ 179.3 100.0% Cost of sales 138.0 65.7 122.8 68.5 Restructuring costs (0.5) (0.2) 3.3 1.8 ------------ ------------ ------------ ------------ Gross margin 72.3 34.5 53.2 29.7 Operating expenses 58.1 27.7 54.5 30.4 Restructuring costs - - (0.1) 0.0 ------------ ------------ ------------ ------------ Operating income (loss) $ 14.2 6.8% $ (1.2) (0.7)% ============ ============ ============ ============ Gross Margin, as reported $ 72.3 34.5% $ 53.2 29.7% Restructuring Charges (0.5) (0.2) 3.3 1.8 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 71.8 34.3% $ 56.5 31.5% ============ ============ ============ ============ Operating Income (Loss), as reported $ 14.2 6.8% $ (1.2) (0.7)% Restructuring Charges (0.5) (0.2) 3.2 1.8 ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 13.7 6.6% $ 2.0 1.1% ============ ============ ============ ============
Twelve Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 735.8 100.0% $ 644.5 100.0% Cost of sales 490.0 66.6 442.8 68.7 Restructuring costs 2.8 0.4 8.6 1.3 ------------ ------------ ------------ ------------ Gross margin 243.0 33.0 193.1 30.0 Operating expenses 208.7 28.4 188.7 29.3 Restructuring costs 0.1 0.0 5.7 0.9 ------------ ------------ ------------ ------------ Operating income (loss) $ 34.2 4.6% $ (1.3) (0.2)% ============ ============ ============ ============ Gross Margin, as reported $ 243.0 33.0% $ 193.1 30.0% Restructuring Charges 2.8 0.4 8.6 1.3 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 245.8 33.4% $ 201.7 31.3% ============ ============ ============ ============ Operating Income (Loss), as reported $ 34.2 4.6% $ (1.3) (0.2)% Restructuring Charges 2.9 0.4 14.3 2.1 ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 37.1 5.0% $ 13.0 1.9% ============ ============ ============ ============
Steelcase Design Partnership
Three Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 89.8 100.0% $ 85.3 100.0% Cost of sales 57.6 64.1 54.1 63.4 ------------ ------------ ------------ ------------ Gross margin 32.2 35.9 31.2 36.6 Operating expenses 23.8 26.5 22.5 26.4 Restructuring charges - 0.0 - - ------------ ------------ ------------ ------------ Operating income $ 8.4 9.4% $ 8.7 10.2% ============ ============ ============ ============ Gross Margin, as reported $ 32.2 35.9% $ 31.2 36.6% Restructuring Charges - 0.0 - 0.0 ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 32.2 35.9% $ 31.2 36.6% ============ ============ ============ ============ Operating Income, as reported $ 8.4 9.4% $ 8.7 10.2% Restructuring Charges - 0.0 - - ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 8.4 9.4% $ 8.7 10.2% ============ ============ ============ ============
Twelve Months Ended ---------------------------------------------------------- February 23, 2007 February 24, 2006 --------------------------- --------------------------- Revenue $ 359.9 100.0% $ 340.8 100.0% Cost of sales 229.4 63.7 212.0 62.2 ------------ ------------ ------------ ------------ Gross margin 130.5 36.3 128.8 37.8 Operating expenses 96.9 26.9 93.9 27.6 Restructuring charges 0.2 0.1 - - ------------ ------------ ------------ ------------ Operating income $ 33.4 9.3% $ 34.9 10.2% ============ ============ ============ ============ Gross Margin, as reported $ 130.5 36.3% $ 128.8 37.8% Restructuring Charges - 0.0 - - ------------ ------------ ------------ ------------ Gross Margin, excluding restructuring charges $ 130.5 36.3% $ 128.8 37.8% ============ ============ ============ ============ Operating Income, as reported $ 33.4 9.3% $ 34.9 10.2% Restructuring Charges 0.2 0.1 - - ------------ ------------ ------------ ------------ Operating Income, excluding restructuring charges $ 33.6 9.4% $ 34.9 10.2% ============ ============ ============ ============
Webcast Steelcase will discuss fourth quarter and fiscal 2007 results and business outlook on a conference call and webcast at 11:00 a.m. EDT today. Links to the webcast are available at www.steelcase.com/ir. Supporting 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: fourth quarter and fiscal year gross margin, excluding restructuring charges for the current and prior year in dollars and as a percentage of revenue and fourth quarter and fiscal year operating income, excluding restructuring charges, for the current and prior year in dollars and as a percentage 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 more than 800 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 Twelve Months Ended Ended ----------------------- ----------------------- February February February February 23, 24, 23, 24, ---------- ---------- ---------- ---------- 2007 2006 2007 2006 ---------- ---------- ---------- ---------- Revenue $ 779.0 $ 739.3 $ 3,098.0 $ 2,868.9 Cost of sales 535.0 519.6 2,128.2 1,989.4 Restructuring costs 7.2 11.0 21.3 33.2 ---------- ---------- ---------- ---------- Gross margin 236.8 208.7 948.5 846.3 Operating expenses 231.9 199.3 832.4 758.1 Restructuring costs 2.1 0.1 2.4 5.7 ---------- ---------- ---------- ---------- Operating income 2.8 9.3 113.7 82.5 Interest expense (4.2) (4.3) (18.5) (18.1) Other income, net 3.9 7.5 29.4 12.0 ---------- ---------- ---------- ---------- Income before income taxes 2.5 12.5 124.6 76.4 Income tax expense (benefit) (26.8) 3.2 17.7 27.5 ---------- ---------- ---------- ---------- Net income $ 29.3 $ 9.3 $ 106.9 $ 48.9 ========== ========== ========== ========== Basic and diluted per share data: Basic earnings per share $ 0.20 $ 0.06 $ 0.72 $ 0.33 ========== ========== ========== ========== Diluted earnings per share $ 0.20 $ 0.06 $ 0.71 $ 0.33 ========== ========== ========== ========== Dividends declared per common share $ 0.13 $ 0.09 $ 0.45 $ 0.33 ========== ========== ========== ========== Weighted average shares outstanding - basic 147.1 148.5 148.5 148.3 ========== ========== ========== ========== Weighted average shares outstanding - diluted 148.6 149.1 149.8 148.7 ========== ========== ========== ==========
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions) Feb. 23, Feb. 24, ---------- ---------- 2007 2006 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $ 527.2 $ 423.8 Short-term investments 33.1 - Accounts receivable, net 352.6 366.3 Inventories 144.0 147.9 Deferred income taxes 60.8 80.3 Other current assets 111.9 109.8 ---------- ---------- Total current assets 1,229.6 1,128.1 ---------- ---------- Property and equipment, net 477.1 524.8 Company owned life insurance 209.2 196.6 Deferred income taxes 153.1 154.6 Goodwill 213.4 211.1 Other intangible assets, net of accumulated amortization 64.6 73.7 Other assets 53.7 55.6 ---------- ---------- Total assets $ 2,400.7 $ 2,344.5 ---------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 222.0 $ 189.6 Short-term borrowings and current portion of long-term debt 5.1 261.8 Accrued expenses: Employee compensation 162.7 127.9 Employee benefit plan obligations 34.2 34.1 Other 220.1 222.8 ---------- ---------- Total current liabilities 644.1 836.2 ========== ========== Long-term liabilities: Long-term debt less current maturities 250.0 2.2 Employee benefit plan obligations 189.6 239.7 Other long-term liabilities 78.3 61.5 ---------- ---------- Total long-term liabilities 517.9 303.4 ---------- ---------- Total liabilities 1,162.0 1,139.6 ---------- ---------- Shareholders' equity: Common stock 259.1 309.9 Additional paid in capital 6.6 3.4 Accumulated other comprehensive loss (0.5) (39.1) Deferred compensation - restricted stock - (3.1) Retained earnings 973.5 933.8 ---------- ---------- Total shareholders' equity 1,238.7 1,204.9 ---------- ---------- Total liabilities and shareholders' equity $ 2,400.7 $ 2,344.5 ========== ========== CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (in millions) Twelve Months Ended ----------------------- Feb. 23, Feb. 24, 2007 2006 ---------- ---------- (Unaudited) OPERATING ACTIVITIES Net income $ 106.9 $ 48.9 Depreciation and amortization 101.4 119.4 Goodwill and intangible asset impairment charges 11.7 - Deferred income taxes 31.5 0.2 Changes in operating assets and liabilities, net of corporate acquisitions 22.0 (8.9) Excess tax benefit from exercise of stock options and vesting of restricted stock (3.9) - Other, net 10.7 15.9 ---------- ---------- Net cash provided by operating activities 280.3 175.5 ---------- ---------- INVESTING ACTIVITIES Capital expenditures (58.2) (71.9) Short-term investments, acquisitions (33.1) - Short-term investments, liquidations - 131.6 Proceeds from the disposal of fixed assets 18.9 39.3 Net decrease in notes receivable 17.6 15.3 Acquisitions, net of cash acquired (9.9) (8.6) Net proceeds from repayment of leases 9.8 17.7 Other, net 3.2 4.3 ---------- ---------- Net cash (used in) provided by investing activities (51.7) 127.7 ---------- ---------- FINANCING ACTIVITIES Issuance of long-term debt, net 257.4 - Repayments of long-term debt (260.3) (58.9) Repayments of lines of credit, net (6.9) (2.3) Common stock repurchases (77.3) (3.4) Dividends paid (67.2) (49.2) Common stock issuances 23.3 12.2 Excess tax benefit from exercise of stock options and vesting of restricted stock 3.9 - ---------- ---------- Net cash used in financing activities (127.1) (101.6) ---------- ---------- Effect of exchange rate changes on cash and cash equivalents 1.9 5.6 ---------- ---------- Net increase in cash and cash equivalents 103.4 207.2 Cash and cash equivalents, beginning of period 423.8 216.6 ---------- ---------- Cash and cash equivalents, end of period $ 527.2 $ 423.8 ========== ========== SOURCE Steelcase Inc. -0- 03/29/2007 /CONTACT: Media, Jeanine Holquist, Public Relations, +1-616-698-3765, or Investors, Raj Mehan, Investor Relations, +1-616-698-4734, both for Steelcase Inc. / /First Call Analyst: / /FCMN Contact: tferris@steelcase.com / /Web site: http://www.steelcase.com/ -----END PRIVACY-ENHANCED MESSAGE-----