- Fourth quarter results
- Orders grew 4% compared to prior year driven by 8% growth in the
Americas - Gross margin improved 140 basis points compared to prior year
- Earnings per share increased 38% compared to prior year
- Orders grew 4% compared to prior year driven by 8% growth in the
- Fiscal 2024 results
- Gross margin improved 360 basis points compared to fiscal 2023
- Earnings per share increased 127% compared to fiscal 2023
- Total liquidity strengthened by
$238 million during fiscal 2024
- Company provides financial targets for fiscal 2025
Revenue and order growth (decline) compared to the prior year were as follows:
Q4 2024 vs. Q4 2023 | ||||||||
Revenue Growth (Decline) | Organic Revenue Growth (Decline) | Organic Order Growth (Decline) | ||||||
(2 | )% | — | % | 8 | % | |||
International | (6 | )% | (6 | )% | (6 | )% | ||
(3 | )% | (1 | )% | 4 | % | |||
Revenue decreased 3 percent in the fourth quarter compared to the prior year, with a 2 percent decline in the
Orders (adjusted for the impact of divestitures and currency translation effects) grew 4 percent in the fourth quarter compared to the prior year, including 8 percent growth in the
“I'm proud of the earnings improvement our teams delivered again this quarter, capping off a strong fiscal 2024 in which our net income more than doubled from the prior year,” said
Operating income (loss) and adjusted operating income (loss) were as follows:
Operating income (loss) | Adjusted operating income (loss) | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
Three months ended | Three months ended | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
$ | 26.8 | $ | 33.2 | $ | 31.3 | $ | 41.9 | |||||||
International | (1.1 | ) | (4.5 | ) | 3.1 | (3.3 | ) | |||||||
$ | 25.7 | $ | 28.7 | $ | 34.4 | $ | 38.6 | |||||||
Operating income of
“Our International segment continued to deliver improved profitability this quarter, with adjusted operating results increasing by more than
Gross margin of 31.2 percent in the fourth quarter represented an increase of 140 basis points compared to the prior year. The increase was driven by higher pricing benefits and operational improvements, partially offset by the impacts of lower volume.
Operating expenses of
Investment income of
The company recorded income tax expense of
Total liquidity, comprised of cash and cash equivalents and the cash surrender value of company-owned life insurance, aggregated to
“Our liquidity increased by
The Board of Directors has declared a quarterly cash dividend of
Fiscal 2024 Results
For fiscal 2024, the company recorded
Revenue declined 2 percent in fiscal 2024 compared to the prior year, with a 1 percent decrease in the
Operating income for fiscal 2024 of
“Our fiscal 2024 results reflected our efforts to recover the inflationary pressure on costs from the previous two years and drive improved profitability,” said
Outlook
At the end of the fourth quarter, the company’s backlog of customer orders was approximately
The company expects to report earnings per share of between
The first quarter estimates include:
- gross margin of approximately 32 percent,
- projected operating expenses of between
$215 to$220 million , which includes$4.3 million of amortization of purchased intangible assets, - projected interest expense, investment income and other income, net, of approximately
$2 million and - a projected effective tax rate of 27 percent.
For fiscal 2025, the company is targeting organic revenue growth of 1 to 5 percent compared to fiscal 2024, adjusted operating income of between
The fiscal 2025 targets reflect the following assumptions and expectations, as compared to fiscal 2024:
- a mid-single digit order growth rate, including continued growth from large corporate customers, offset by the beginning backlog of customer orders which was 8 percent below the prior year,
- an improvement in gross margin to between 32.5 and 33.5 percent,
- increased operating expenses driven by higher investments in the company's business transformation initiative, strategic growth initiatives and employee costs (the year-over-year comparison is also impacted by
$20.4 million of benefits in the prior year related to gains on the sales of fixed assets and an earnout liability adjustment), and - projected interest expense, investment income and other income, net, of approximately
$11 million and an effective tax rate of 27 percent.
“As we look to fiscal 2025, we are excited about the progress we made in fiscal 2024 to improve our profitability and the momentum we've seen with our large corporate customers,” said
Business Segment Results | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||||||
Revenue | |||||||||||||||||||||
$ | 581.6 | $ | 595.6 | (2 | )% | $ | 2,419.8 | $ | 2,436.2 | (1 | )% | ||||||||||
International (2) | 193.6 | 206.1 | (6 | )% | 739.8 | 796.4 | (7 | )% | |||||||||||||
$ | 775.2 | $ | 801.7 | (3 | )% | $ | 3,159.6 | $ | 3,232.6 | (2 | )% |
Revenue mix | ||||||||||||
75.0 | % | 74.3 | % | 76.6 | % | 75.4 | % | |||||
International | 25.0 | % | 25.7 | % | 23.4 | % | 24.6 | % |
Operating income (loss) | ||||||||||||||||
$ | 26.8 | $ | 33.2 | $ | 143.8 | $ | 77.4 | |||||||||
International | (1.1 | ) | (4.5 | ) | (26.0 | ) | (11.9 | ) | ||||||||
$ | 25.7 | $ | 28.7 | $ | 117.8 | $ | 65.5 | |||||||||
Operating margin | 3.3 | % | 3.6 | % | 3.7 | % | 2.0 | % | ||||||||
Business Segment Footnotes
- The
Americas segment serves customers in theU.S. ,Canada , theCaribbean Islands andLatin America with a comprehensive portfolio of furniture, architectural, textile and surface imaging products that are marketed to corporate, government, healthcare, education and retail customers primarily through theSteelcase , AMQ, Coalesse, Designtex, HALCON, Orangebox, Smith System and Viccarbe brands. - The International segment serves customers in EMEA and
Asia Pacific with a comprehensive portfolio of furniture and architectural products that are marketed to corporate, government, education and retail customers primarily through theSteelcase , Coalesse, Orangebox, Smith System and Viccarbe brands.
QUARTER OVER QUARTER ORGANIC REVENUE GROWTH (DECLINE) BY SEGMENT | |||||||||||
Q4 2024 vs. Q4 2023 | |||||||||||
(Unaudited) | |||||||||||
International | |||||||||||
Q4 2023 revenue | $ | 801.7 | $ | 595.6 | $ | 206.1 | |||||
Divestitures | (18.8 | ) | (14.9 | ) | (3.9 | ) | |||||
Currency translation effects | 3.1 | 0.2 | 2.9 | ||||||||
Q4 2023 revenue, adjusted | $ | 786.0 | $ | 580.9 | $ | 205.1 | |||||
Q4 2024 revenue | $ | 775.2 | $ | 581.6 | $ | 193.6 | |||||
Organic growth (decline) $ | $ | (10.8 | ) | $ | 0.7 | $ | (11.5 | ) | |||
Organic growth (decline) % | (1 | )% | — | % | (6 | )% | |||||
YEAR OVER YEAR ORGANIC REVENUE GROWTH (DECLINE) BY SEGMENT | |||||||||||
2024 vs. 2023 | |||||||||||
(Unaudited) | |||||||||||
International | |||||||||||
2023 revenue | $ | 3,232.6 | $ | 2,436.2 | $ | 796.4 | |||||
Acquisition | 21.8 | 21.8 | — | ||||||||
Divestitures | (40.2 | ) | (29.7 | ) | (10.5 | ) | |||||
Currency translation effects | 14.1 | (3.1 | ) | 17.2 | |||||||
2023 revenue, adjusted | $ | 3,228.3 | $ | 2,425.2 | $ | 803.1 | |||||
2024 revenue | $ | 3,159.6 | $ | 2,419.8 | $ | 739.8 | |||||
Organic growth (decline) $ | $ | (68.7 | ) | $ | (5.4 | ) | $ | (63.3 | ) | ||
Organic growth (decline) % | (2 | )% | — | % | (8 | )% | |||||
ADJUSTED EARNINGS PER SHARE | |||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Earnings per share | $ | 0.18 | $ | 0.13 | $ | 0.68 | $ | 0.30 | |||||||
Amortization of purchased intangible assets, per share | 0.03 | 0.05 | 0.15 | 0.19 | |||||||||||
Income tax effect of amortization of purchased intangible assets, per share | (0.01 | ) | (0.01 | ) | (0.04 | ) | (0.05 | ) | |||||||
Restructuring costs, per share | 0.04 | 0.03 | 0.19 | 0.16 | |||||||||||
Income tax effect of restructuring costs, per share | (0.01 | ) | (0.01 | ) | (0.05 | ) | (0.04 | ) | |||||||
Adjusted earnings per share | $ | 0.23 | $ | 0.19 | $ | 0.93 | $ | 0.56 | |||||||
ADJUSTED EBITDA | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Trailing Four Quarters Ended | ||||||||||||||||||
2023 | 2023 | 2023 | 2024 | 2024 | |||||||||||||||
Net income | $ | 1.5 | $ | 27.5 | $ | 30.8 | $ | 21.3 | $ | 81.1 | |||||||||
Income tax expense | 1.4 | 9.5 | 9.8 | 5.3 | 26.0 | ||||||||||||||
Interest expense | 6.6 | 6.6 | 6.4 | 6.3 | 25.9 | ||||||||||||||
Depreciation and amortization | 20.4 | 21.3 | 21.1 | 20.8 | 83.6 | ||||||||||||||
Share-based compensation | 13.7 | 4.2 | 3.4 | 3.6 | 24.9 | ||||||||||||||
Restructuring costs | 8.1 | 7.9 | 2.1 | 4.4 | 22.5 | ||||||||||||||
Adjusted EBITDA | $ | 51.7 | $ | 77.0 | $ | 73.6 | $ | 61.7 | $ | 264.0 | |||||||||
Revenue | $ | 751.9 | $ | 854.6 | $ | 777.9 | $ | 775.2 | $ | 3,159.6 | |||||||||
Adjusted EBITDA as a percentage of revenue | 6.9 | % | 9.0 | % | 9.5 | % | 8.0 | % | 8.4 | % | |||||||||
ADJUSTED EBITDA | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Trailing Four Quarters Ended | ||||||||||||||||||
2022 | 2022 | 2022 | 2023 | 2023 | |||||||||||||||
Net income (loss) | $ | (11.4 | ) | $ | 19.6 | $ | 11.4 | $ | 15.7 | $ | 35.3 | ||||||||
Income tax expense (benefit) | (4.4 | ) | 6.8 | 5.2 | 8.7 | 16.3 | |||||||||||||
Interest expense | 6.4 | 7.2 | 7.6 | 7.2 | 28.4 | ||||||||||||||
Depreciation and amortization | 20.2 | 23.5 | 23.5 | 22.8 | 90.0 | ||||||||||||||
Share-based compensation | 12.0 | 3.1 | 2.1 | 3.6 | 20.8 | ||||||||||||||
Restructuring costs | 4.2 | 0.5 | 10.6 | 3.9 | 19.2 | ||||||||||||||
Adjusted EBITDA | $ | 27.0 | $ | 60.7 | $ | 60.4 | $ | 61.9 | $ | 210.0 | |||||||||
Revenue | $ | 740.7 | $ | 863.3 | $ | 826.9 | $ | 801.7 | $ | 3,232.6 | |||||||||
Adjusted EBITDA as a percentage of revenue | 3.6 | % | 7.0 | % | 7.3 | % | 7.7 | % | 6.5 | % | |||||||||
PROJECTED ORGANIC REVENUE GROWTH (DECLINE) | ||||
Q1 2025 vs. Q1 2024 | ||||
Q1 2024 revenue | $ | 751.9 | ||
Divestitures | (12.4 | ) | ||
Q1 2024 revenue, adjusted | $ | 739.5 | ||
Q1 2025 revenue, projected | $ | 715 - 740 | ||
Organic growth (decline) $ | $ | (25) - 1 | ||
Organic growth (decline) % | (3) - 0 | % | ||
PROJECTED ORGANIC REVENUE GROWTH (DECLINE) | ||||
2025 vs. 2024 | ||||
2024 revenue | $ | 3,159.6 | ||
Divestitures | (35.2 | ) | ||
2024 revenue, adjusted | $ | 3,124.4 | ||
2025 revenue, projected | $ | 3,215 - 3,340 | ||
Impact of additional week | (60 | ) | ||
2025 revenue, projected, adjusted | 3,155 - 3,280 | |||
Organic growth (decline) $ | $ | 31 - 156 | ||
Organic growth (decline) % | 1 - 5 | % | ||
PROJECTED ADJUSTED OPERATING INCOME | ||||
Twelve Months Ended | ||||
2025 | ||||
Operating income | $ | 133 - 158 | ||
Amortization of purchased intangible assets | 17 | |||
Adjusted operating income | $ | 150 - 175 | ||
PROJECTED ADJUSTED EARNINGS PER SHARE | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2024 | 2023 | 2025 | 2024 | ||||||||||||
Earnings per share | $ | 0.05 - 0.09 | $ | 0.01 | $ | 0.74 - 0.89 | $ | 0.68 | |||||||
Amortization of purchased intangible assets, per share | 0.04 | 0.04 | 0.15 | 0.15 | |||||||||||
Income tax effect of amortization of purchased intangible assets, per share | (0.01 | ) | (0.01 | ) | (0.04 | ) | (0.04 | ) | |||||||
Restructuring costs, per share | — | 0.07 | — | 0.19 | |||||||||||
Income tax effect of restructuring costs, per share | — | (0.02 | ) | — | (0.05 | ) | |||||||||
Adjusted earnings per share | $ | 0.08 - 0.12 | $ | 0.09 | $ | 0.85 - 1.00 | $ | 0.93 | |||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||
Revenue | $ | 775.2 | 100.0 | % | $ | 801.7 | 100.0 | % | $ | 3,159.6 | 100.0 | % | $ | 3,232.6 | 100.0 | % | |||||||||||
Cost of sales | 531.6 | 68.6 | 562.3 | 70.2 | 2,142.8 | 67.9 | 2,310.7 | 71.5 | |||||||||||||||||||
Restructuring costs | 1.5 | 0.2 | 0.2 | — | 4.4 | 0.1 | 2.5 | 0.1 | |||||||||||||||||||
Gross profit | 242.1 | 31.2 | 239.2 | 29.8 | 1,012.4 | 32.0 | 919.4 | 28.4 | |||||||||||||||||||
Operating expenses | 213.5 | 27.5 | 206.8 | 25.7 | 876.5 | 27.7 | 837.2 | 25.9 | |||||||||||||||||||
Restructuring costs | 2.9 | 0.4 | 3.7 | 0.5 | 18.1 | 0.6 | 16.7 | 0.5 | |||||||||||||||||||
Operating income | 25.7 | 3.3 | 28.7 | 3.6 | 117.8 | 3.7 | 65.5 | 2.0 | |||||||||||||||||||
Interest expense | (6.3 | ) | (0.8 | ) | (7.2 | ) | (0.9 | ) | (25.9 | ) | (0.8 | ) | (28.4 | ) | (0.9 | ) | |||||||||||
Investment income | 2.9 | 0.4 | 0.3 | — | 6.5 | 0.2 | 1.0 | 0.1 | |||||||||||||||||||
Other income, net | 4.3 | 0.5 | 2.6 | 0.3 | 8.7 | 0.3 | 13.5 | 0.4 | |||||||||||||||||||
Income before income tax expense | 26.6 | 3.4 | 24.4 | 3.0 | 107.1 | 3.4 | 51.6 | 1.6 | |||||||||||||||||||
Income tax expense | 5.3 | 0.7 | 8.7 | 1.0 | 26.0 | 0.8 | 16.3 | 0.5 | |||||||||||||||||||
Net income | $ | 21.3 | 2.7 | % | $ | 15.7 | 2.0 | % | $ | 81.1 | 2.6 | % | $ | 35.3 | 1.1 | % | |||||||||||
Operating income | $ | 25.7 | 3.3 | % | $ | 28.7 | 3.6 | % | $ | 117.8 | 3.7 | % | $ | 65.5 | 2.0 | % | |||||||||||
Amortization of purchased intangible assets | 4.3 | 0.5 | 6.0 | 0.7 | 17.2 | 0.6 | 22.8 | 0.7 | |||||||||||||||||||
Restructuring costs | 4.4 | 0.6 | 3.9 | 0.5 | 22.5 | 0.7 | 19.2 | 0.6 | |||||||||||||||||||
Adjusted operating income | $ | 34.4 | 4.4 | % | $ | 38.6 | 4.8 | % | $ | 157.5 | 5.0 | % | $ | 107.5 | 3.3 | % | |||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||
Revenue | $ | 581.6 | 100.0 | % | $ | 595.6 | 100.0 | % | $ | 2,419.8 | 100.0 | % | $ | 2,436.2 | 100.0 | % | |||||||||||
Cost of sales | 393.6 | 67.7 | 410.0 | 68.9 | 1,618.5 | 66.9 | 1,722.1 | 70.7 | |||||||||||||||||||
Restructuring costs | 1.2 | 0.2 | 0.2 | — | 2.2 | 0.1 | 2.5 | 0.1 | |||||||||||||||||||
Gross profit | 186.8 | 32.1 | 185.4 | 31.1 | 799.1 | 33.0 | 711.6 | 29.2 | |||||||||||||||||||
Operating expenses | 159.8 | 27.5 | 148.5 | 24.9 | 654.2 | 27.0 | 617.5 | 25.3 | |||||||||||||||||||
Restructuring costs | 0.2 | — | 3.7 | 0.6 | 1.1 | 0.1 | 16.7 | 0.7 | |||||||||||||||||||
Operating income | 26.8 | 4.6 | 33.2 | 5.6 | 143.8 | 5.9 | 77.4 | 3.2 | |||||||||||||||||||
Amortization of purchased intangible assets | 3.1 | 0.6 | 4.8 | 0.8 | 12.5 | 0.5 | 18.2 | 0.7 | |||||||||||||||||||
Restructuring costs | 1.4 | 0.2 | 3.9 | 0.6 | 3.3 | 0.2 | 19.2 | 0.8 | |||||||||||||||||||
Adjusted operating income | $ | 31.3 | 5.4 | % | $ | 41.9 | 7.0 | % | $ | 159.6 | 6.6 | % | $ | 114.8 | 4.7 | % | |||||||||||
International | |||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||
Revenue | $ | 193.6 | 100.0 | % | $ | 206.1 | 100.0 | % | $ | 739.8 | 100.0 | % | $ | 796.4 | 100.0 | % | |||||||||||
Cost of sales | 138.0 | 71.3 | 152.3 | 73.9 | 524.3 | 70.9 | 588.6 | 73.9 | |||||||||||||||||||
Restructuring costs | 0.3 | 0.1 | — | — | 2.2 | 0.3 | — | — | |||||||||||||||||||
Gross profit | 55.3 | 28.6 | 53.8 | 26.1 | 213.3 | 28.8 | 207.8 | 26.1 | |||||||||||||||||||
Operating expenses | 53.7 | 27.8 | 58.3 | 28.3 | 222.3 | 30.0 | 219.7 | 27.6 | |||||||||||||||||||
Restructuring costs | 2.7 | 1.4 | — | — | 17.0 | 2.3 | — | — | |||||||||||||||||||
Operating income (loss) | (1.1 | ) | (0.6 | ) | (4.5 | ) | (2.2 | ) | (26.0 | ) | (3.5 | ) | (11.9 | ) | (1.5 | ) | |||||||||||
Amortization of purchased intangible assets | 1.2 | 0.7 | 1.2 | 0.6 | 4.7 | 0.6 | 4.6 | 0.6 | |||||||||||||||||||
Restructuring costs | 3.0 | 1.5 | — | — | 19.2 | 2.6 | — | — | |||||||||||||||||||
Adjusted operating income (loss) | $ | 3.1 | 1.6 | % | $ | (3.3 | ) | (1.6 | )% | $ | (2.1 | ) | (0.3 | )% | $ | (7.3 | ) | (0.9 | )% | ||||||||
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 condensed consolidated statements of income, balance sheets or statements of cash flows of the company. The non-GAAP financial measures used are (1) organic revenue growth (decline), (2) adjusted operating income (loss), (3) adjusted earnings per share and (4) adjusted EBITDA. Pursuant to the requirements of Regulation G, the company has provided a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure in the tables above. These measures are supplemental to, and should be used in conjunction with, the most comparable GAAP measures. Management uses these non-GAAP financial measures to monitor and evaluate financial results and trends.
Organic Revenue Growth (Decline)
The company defines organic revenue growth (decline) as revenue growth (decline) excluding the impact of acquisitions and divestitures and foreign currency translation effects. Organic revenue growth (decline) is calculated by adjusting prior year revenue to include revenues of acquired companies prior to the date of the company's acquisition, to exclude revenues of divested companies and to use current year average exchange rates in the calculation of foreign-denominated revenue. The company believes organic revenue growth (decline) is a meaningful metric to investors as it provides a more consistent comparison of the company's revenue to prior periods as well as to industry peers.
Adjusted Operating Income (Loss) and Adjusted Earnings Per Share
The company defines adjusted operating income (loss) as operating income (loss) excluding amortization of purchased intangible assets and restructuring costs. The company defines adjusted earnings per share as earnings per share excluding amortization of purchased intangible assets and restructuring costs, net of related income tax effects.
Amortization of purchased intangible assets: The company may record intangible assets (such as backlog, dealer relationships, trademarks, know-how and designs and proprietary technology) when it acquires companies. The company allocates the fair value of purchase consideration to net tangible and intangible assets acquired based on their estimated fair values. The fair value estimates for these intangible assets require management to make significant estimates and assumptions, which include the useful lives of intangible assets. The company believes that adjusting for amortization of purchased intangible assets provides a more consistent comparison of its operating performance to prior periods as well as to industry peers. As the company's business strategy in recent years has included an increased number of acquisitions, intangible asset amortization has become more significant.
Restructuring costs: Restructuring costs may be recorded as the company's business strategies change or in response to changing market trends and economic conditions. The company believes that adjusting for restructuring costs, which are primarily associated with business exit and workforce reduction costs, provides a more consistent comparison of its operating performance to prior periods as well as to industry peers.
Adjusted EBITDA
The company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization ("EBITDA") adjusted to exclude share-based compensation and restructuring costs. The company believes adjusted EBITDA provides investors with useful information regarding the operating profitability of the company as well as a useful comparison to other companies. EBITDA is a measurement commonly used in capital markets to value companies and is used by the company's lenders and rating agencies to evaluate its performance. The company adjusts EBITDA for share-based compensation as it represents a significant non-cash item which impacts its earnings. The company also adjusts EBITDA for restructuring costs to provide a more consistent comparison of its earnings to prior periods as well as to industry peers.
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 discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to the company, based on current beliefs of management as well as assumptions made by, and information currently available to, the company. Forward-looking statements generally are accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “possible,” “potential,” “predict,” “project," "target” or other similar words, phrases or expressions. Although the company believes these forward-looking statements are reasonable, they are based upon a number of assumptions concerning future conditions, any or all of which may ultimately prove to be inaccurate. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements and 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, pandemics and other Force Majeure events; cyberattacks; changes in the legal and regulatory environment; changes in raw material, commodity and other input costs; currency fluctuations; changes in customer demand; 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
About
Established in 1912,
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenue | $ | 775.2 | $ | 801.7 | $ | 3,159.6 | $ | 3,232.6 | |||||||
Cost of sales | 531.6 | 562.3 | 2,142.8 | 2,310.7 | |||||||||||
Restructuring costs | 1.5 | 0.2 | 4.4 | 2.5 | |||||||||||
Gross profit | 242.1 | 239.2 | 1,012.4 | 919.4 | |||||||||||
Operating expenses | 213.5 | 206.8 | 876.5 | 837.2 | |||||||||||
Restructuring costs | 2.9 | 3.7 | 18.1 | 16.7 | |||||||||||
Operating income | 25.7 | 28.7 | 117.8 | 65.5 | |||||||||||
Interest expense | (6.3 | ) | (7.2 | ) | (25.9 | ) | (28.4 | ) | |||||||
Investment income | 2.9 | 0.3 | 6.5 | 1.0 | |||||||||||
Other income, net | 4.3 | 2.6 | 8.7 | 13.5 | |||||||||||
Income before income tax expense | 26.6 | 24.4 | 107.1 | 51.6 | |||||||||||
Income tax expense | 5.3 | 8.7 | 26.0 | 16.3 | |||||||||||
Net income | $ | 21.3 | $ | 15.7 | $ | 81.1 | $ | 35.3 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.18 | $ | 0.13 | $ | 0.68 | $ | 0.30 | |||||||
Diluted | $ | 0.18 | $ | 0.13 | $ | 0.68 | $ | 0.30 | |||||||
Weighted average shares outstanding - basic | 118.9 | 117.4 | 118.6 | 117.1 | |||||||||||
Weighted average shares outstanding - diluted | 120.1 | 117.7 | 119.1 | 117.5 | |||||||||||
Dividends declared and paid per common share | $ | 0.100 | $ | 0.100 | $ | 0.400 | $ | 0.490 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in millions) | |||||||
(Unaudited) | |||||||
2024 | 2023 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 318.6 | $ | 90.4 | |||
Accounts receivable, net of allowance of | 338.3 | 373.3 | |||||
Inventories | 231.0 | 319.7 | |||||
Prepaid expenses | 31.9 | 28.9 | |||||
Assets held for sale | — | 29.0 | |||||
Other current assets | 39.6 | 42.7 | |||||
Total current assets | 959.4 | 884.0 | |||||
Property, plant and equipment, net of accumulated depreciation of | 352.9 | 376.5 | |||||
Company-owned life insurance ("COLI") | 166.9 | 157.3 | |||||
Deferred income taxes | 115.8 | 117.3 | |||||
274.8 | 276.8 | ||||||
Other intangible assets, net of accumulated amortization of | 94.6 | 111.2 | |||||
Investments in unconsolidated affiliates | 55.7 | 51.1 | |||||
Right-of-use operating lease assets | 168.6 | 198.3 | |||||
Other assets | 48.0 | 30.3 | |||||
Total assets | $ | 2,236.7 | $ | 2,202.8 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 211.3 | $ | 203.5 | |||
Short-term borrowings and current portion of long-term debt | — | 35.7 | |||||
Current operating lease obligations | 45.1 | 44.7 | |||||
Employee compensation | 166.1 | 120.0 | |||||
Employee benefit plan obligations | 39.9 | 31.2 | |||||
Accrued promotions | 19.4 | 26.7 | |||||
Customer deposits | 44.8 | 50.8 | |||||
Other current liabilities | 80.5 | 90.7 | |||||
Total current liabilities | 607.1 | 603.3 | |||||
Long-term liabilities: | |||||||
Long-term debt less current maturities | 446.3 | 445.5 | |||||
Employee benefit plan obligations | 104.5 | 103.0 | |||||
Long-term operating lease obligations | 138.6 | 169.9 | |||||
Other long-term liabilities | 53.1 | 54.9 | |||||
Total long-term liabilities | 742.5 | 773.3 | |||||
Total liabilities | 1,349.6 | 1,376.6 | |||||
Shareholders’ equity: | |||||||
Additional paid-in capital | 41.2 | 19.4 | |||||
Accumulated other comprehensive income (loss) | (66.9 | ) | (72.5 | ) | |||
Retained earnings | 912.8 | 879.3 | |||||
Total shareholders’ equity | 887.1 | 826.2 | |||||
Total liabilities and shareholders’ equity | $ | 2,236.7 | $ | 2,202.8 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
(in millions) | |||||||
Twelve Months Ended | |||||||
2024 | 2023 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 81.1 | $ | 35.3 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 83.6 | 90.0 | |||||
Restructuring costs | 22.5 | 19.2 | |||||
Gain on sale of fixed assets | (10.9 | ) | (12.9 | ) | |||
Share-based compensation | 26.0 | 21.8 | |||||
Other | (15.0 | ) | (1.0 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 21.7 | (43.7 | ) | ||||
Inventories | 88.3 | 12.0 | |||||
Income taxes receivable | (6.2 | ) | 36.4 | ||||
Other assets | (7.5 | ) | (6.8 | ) | |||
Accounts payable | 9.9 | (39.3 | ) | ||||
Employee compensation liabilities | 31.1 | 29.4 | |||||
Employee benefit obligations | 5.9 | (12.4 | ) | ||||
Customer deposits | (4.1 | ) | (24.9 | ) | |||
Accrued expenses and other liabilities | (17.7 | ) | (13.7 | ) | |||
Net cash provided by (used in) operating activities | 308.7 | 89.4 | |||||
INVESTING ACTIVITIES | |||||||
Capital expenditures | (47.1 | ) | (59.1 | ) | |||
Proceeds from disposal of fixed assets | 49.4 | 9.9 | |||||
Acquisition, net of cash acquired | — | (105.3 | ) | ||||
Other | 3.8 | 19.7 | |||||
Net cash provided by (used in) investing activities | 6.1 | (134.8 | ) | ||||
FINANCING ACTIVITIES | |||||||
Dividends paid | (47.6 | ) | (57.3 | ) | |||
Common stock repurchases | (4.2 | ) | (3.9 | ) | |||
Borrowings on global committed bank facility | 69.0 | 565.2 | |||||
Repayments on global committed bank facility | (69.0 | ) | (565.2 | ) | |||
Repayments on note payable | (32.2 | ) | (2.7 | ) | |||
Other | (1.9 | ) | 1.0 | ||||
Net cash used in financing activities | (85.9 | ) | (62.9 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (0.2 | ) | (1.5 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 228.7 | (109.8 | ) | ||||
Cash and cash equivalents and restricted cash, beginning of period (1) | 97.2 | 207.0 | |||||
Cash and cash equivalents and restricted cash, end of period (2) | $ | 325.9 | $ | 97.2 | |||
(1) These amounts include restricted cash of
(2) These amounts include restricted cash of
Restricted cash primarily represents funds held in escrow for potential future workers’ compensation and product liability claims. The restricted cash balance is included as part of Other assets on the Condensed Consolidated Balance Sheets.
CONTACT: | Investor Contact: |
Investor Relations | |
(616) 246 - 4251 | |
Media Contact: | |
Corporate Communications | |
(616) 915 - 8505 | |
Source: Steelcase | |
SC-ERR | |
Source:
2024 GlobeNewswire, Inc., source