Core Insights - Ionik Corporation has completed the sale of its subsidiary Schiefer Media, Inc. (SCS) to PUSH Media USA Inc. for a purchase price of US$1.2 million, with net proceeds of US$0.75 million payable in cash on closing [1][3] Group 1: Transaction Details - The transaction includes the acquisition of substantially all assets of SCS, including client contracts, intellectual property, and goodwill, while the purchaser has assumed certain related liabilities [3] - Proceeds from the sale will be reinvested into Ionik's business to strengthen its balance sheet and support growth initiatives in Media Activation and Marketing Optimization platforms [3] Group 2: Strategic Focus - The sale reflects Ionik's strategy to evolve into a unified, data-driven marketing technology company, focusing on first-party data, omnichannel solutions, and AI-driven automation [2][3] - The CEO of Ionik emphasized that this move is part of a broader strategy to simplify and strengthen the business around scalable, technology-enabled performance marketing operations [3] Group 3: Company Overview - Ionik is a technology-driven marketing and advertising solutions company that connects brands, advertisers, and publishers through data-driven insights and advanced automation [4] - The company's platform integrates Media Activation and Marketing Optimization through an AI-Powered Data Engine, creating a seamless advertising ecosystem [5]

Core Viewpoint - HNI Corporation has announced a definitive agreement to acquire Steelcase, Inc. in a cash and stock transaction, which includes an offer to exchange existing Steelcase Notes for new HNI Notes [1][4]. Acquisition Details - The acquisition is subject to shareholder approvals from both HNI and Steelcase, antitrust approvals, and other customary closing conditions [4]. - HNI has initiated an exchange offer for up to $450,000,000 of existing Steelcase Notes, with a current tender amount of $350,767,000, representing 77.95% of the total [1][8]. Exchange Offer and Consent Solicitation - The expiration date for the exchange offer and related consent solicitation has been extended to December 5, 2025 [2]. - HNI received sufficient consents to amend the existing Steelcase Indenture on October 9, 2025, and the amendments will take effect upon the settlement date of the exchange offer [3]. Conditions and Extensions - The completion of the acquisition is not contingent upon the exchange offer or consent solicitation, but the exchange offer is subject to the acquisition's consummation [4][5]. - If the acquisition is not expected to close by the anticipated settlement date, HNI plans to extend the expiration date accordingly [5]. Eligible Holders and Documentation - The exchange offer and consent solicitation are directed towards "Eligible Holders," defined as qualified institutional buyers or non-U.S. persons outside the United States [9].

Core Viewpoint - HNI Corporation has announced a definitive agreement to acquire Steelcase, Inc. in a cash and stock transaction, which includes an exchange offer for existing Steelcase notes [1]. Group 1: Acquisition Details - The acquisition of Steelcase is structured as a cash and stock transaction [1]. - HNI has initiated an offer to exchange up to $450 million of existing Steelcase notes for new HNI notes [1]. - As of October 9, 2025, HNI received consents from holders representing 77.83% of the existing Steelcase notes [2]. Group 2: Exchange Offer and Consent Solicitation - The withdrawal deadline for the exchange offer expired on October 9, 2025, and holders can no longer withdraw their notes [3]. - HNI has received sufficient consents to amend the existing Steelcase indenture, which will become operative upon the settlement date of the exchange offer [4]. - Eligible holders who tender their existing Steelcase notes by the early tender date will receive $1,000 principal amount of new HNI notes plus a consent payment of $2.50 in cash [6]. Group 3: Financial Terms - For each $1,000 principal amount of existing Steelcase notes tendered by the early tender date, holders will receive a total exchange consideration of $1,000 in new HNI notes and a cash payment [6]. - After the early tender date, holders will receive $970 principal amount of new HNI notes without the consent payment [6]. - The total amount of existing Steelcase notes outstanding is $450 million, with $350.23 million tendered by the early tender date, representing 77.83% [7]. Group 4: Settlement and Timing - The settlement date for the exchange offer is expected to occur within five business days after the expiration date [10]. - HNI may extend the expiration date if the acquisition is not expected to close by the anticipated settlement date [10]. Group 5: Company Background - HNI Corporation has been in operation for over 75 years, focusing on workplace furnishings and residential building products [14]. - The company operates under two segments: Workplace Furnishings and Residential Building Products, with a strong market presence in both areas [14].

Core Viewpoint - Steelcase (SCS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which are crucial for stock price movements [1][2][4]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which have a strong correlation with near-term stock price movements [3][5]. - Steelcase's earnings estimates for the fiscal year ending February 2026 are projected at $1.10 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 4.3% over the past three months [7]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Steelcase's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Group 1: Company Performance - Middle Coast Investing's collective portfolio outperformed the S&P 500 in Q3 2025, with a return of 9.6% compared to 7.8% for the S&P 500 [1] - The Core U.S. portfolios returned 10%, while the Russell 2000 returned 12%, the S&P 600 returned 8.7%, and the Nasdaq generated 11.2% during the same period [1] - European Portfolios appreciated by 5.5% in Q3 2025 [1] Group 2: Steelcase Inc. Overview - Steelcase Inc. (NYSE:SCS) had a one-month return of 0.59% and a 52-week gain of 32.86%, closing at $16.98 per share on October 6, 2025, with a market capitalization of $1.948 billion [2] - Steelcase Inc. is a major position for Middle Coast Investing, which noted that the company agreed to merge with HNI Corp [3] Group 3: Merger Details - The merger between Steelcase Inc. and HNI Corp was unexpected, with Steelcase not actively seeking buyers, indicating potential for a better deal [3] - Shareholders of Steelcase will own 36% of the combined company post-merger, and Middle Coast Investing plans to retain its shares while accepting the $7.2 per share cash offer from HNI [3] Group 4: Hedge Fund Interest - Steelcase Inc. is not among the 30 most popular stocks among hedge funds, with 20 hedge fund portfolios holding the stock at the end of Q2 2025, down from 25 in the previous quarter [4] - While Steelcase is recognized for its investment potential, the company believes certain AI stocks present greater upside potential and lower downside risk [4]

Company Performance - Steelcase (SCS) has shown strong stock performance, with shares up 0.4% over the past month and reaching a new 52-week high of $17.4 [1] - The stock has gained 45.6% since the beginning of the year, significantly outperforming the Zacks Business Services sector (2.1%) and the Zacks Business - Office Products industry (1.7%) [1] Earnings and Revenue - Steelcase has a solid track record of positive earnings surprises, having met or exceeded earnings consensus estimates in the last four quarters [2] - In the latest earnings report on September 24, 2025, Steelcase reported EPS of $0.45, surpassing the consensus estimate of $0.37, and beat the revenue estimate by 2.58% [2] Future Projections - For the current fiscal year, Steelcase is expected to post earnings of $1.1 per share on revenues of $3.28 billion, reflecting a -1.79% change in EPS and a 3.61% change in revenues [3] - For the next fiscal year, earnings are projected to increase to $1.29 per share on revenues of $3.39 billion, indicating a year-over-year change of 18.18% in EPS and 3.21% in revenues [3] Valuation Metrics - Steelcase currently trades at 15.7X current fiscal year EPS estimates, which is a premium compared to the peer industry average of 13.2X [7] - The stock's trailing cash flow basis is at 9.2X, above the peer group's average of 8.8X, and has a PEG ratio of 1.57, indicating it is not in the top tier from a value perspective [7] Zacks Rank and Style Scores - Steelcase holds a Zacks Rank of 2 (Buy) due to favorable earnings estimate revisions from analysts [8] - The stock has a Value Score of B, a Growth Score of C, and a Momentum Score of B, resulting in a combined VGM Score of B [6][9] Industry Comparison - The Business - Office Products industry is performing well, ranking in the top 5% of all industries, providing a favorable environment for both Steelcase and its peer, Deluxe Corporation (DLX) [12] - Deluxe Corporation also has a Zacks Rank of 2 (Buy) and has shown strong earnings performance, beating consensus estimates by 23.94% [10][11]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Investors following momentum investing tend to avoid undervalued stocks, believing that quicker profits can be made from trending stocks [1] - Identifying the right entry point for fast-moving stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] Group 2: Stock Analysis - Steelcase (SCS) - Steelcase (SCS) has shown a price increase of 2.6% over the past four weeks, indicating growing investor interest [3] - The stock has gained 61.5% over the past 12 weeks, demonstrating strong long-term momentum [4] - SCS has a beta of 1.26, suggesting it moves 26% more than the market in either direction, indicating fast-paced momentum [4] - SCS has a Momentum Score of A, suggesting it is an opportune time to invest in the stock [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [6] - SCS is trading at a Price-to-Sales ratio of 0.61, indicating it is reasonably valued at 61 cents for each dollar of sales [6] Group 3: Investment Opportunities - In addition to SCS, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7] - The Zacks Premium Screens offer over 45 different strategies to help identify potential winning stocks based on various investing styles [8]

Core Insights - Steelcase released its 2025 impact report titled "Our Work Toward Better Futures," focusing on community building and sustainability efforts [2][5] - The company aims to achieve net zero carbon emissions by 2050, with significant progress in product redesign and increased recycled content [2][4] Community Engagement - Steelcase initiated 72 projects globally to encourage employee volunteering, resulting in 186 community partnerships across 35 locations [6] - Over 2,000 employees participated in Business Inclusion Group events to learn about diverse cultures, with 81.5% of salaried employees recognizing the company's Core Values in daily operations [6] Charitable Contributions - Charitable giving reached $10.4 million in FY2025, with $2.7 million from Steelcase donations and $7.7 million from the Steelcase Foundation [6] Environmental Impact - The company reported a 31% reduction in Scope 1 and 2 emissions since FY2020, aiming for a 50% reduction by FY2030 [7] - Scope 3 emissions from fuel, energy, waste, and travel decreased by 37% since FY2020 [7] - Steelcase doubled the recycled content in its high-performance seating portfolio and expanded its Circular by Steelcase initiative to promote product reuse and recycling [7] Product Sustainability - More than 15,000 CarbonNeutral® certified products have been purchased globally since FY2023, avoiding over 2,400 metric tons of CO2 emissions [7] - The company increased recycled content in single-use packaging to 43%, up from 40% the previous year [7]

Core Viewpoint - HNI Corporation has announced a definitive agreement to acquire Steelcase, Inc. in a cash and stock transaction, aiming to enhance customer reach and drive long-term profitable growth through their complementary brand portfolios and dealer networks [1]. Group 1: Acquisition Details - The acquisition is expected to close in the fourth quarter of 2025, subject to customary closing conditions [1]. - On a pro forma basis, the combined company had net sales of approximately $5.7 billion for the year ended December 28, 2024 [1]. Group 2: Exchange Offer - HNI has commenced an offer to exchange any outstanding 5.125% Notes due 2029 issued by Steelcase for up to $450 million aggregate principal amount of new notes to be issued by HNI [2]. - The New HNI Notes will have identical interest rates and maturity dates as the Existing Steelcase Notes [2]. Group 3: Financial Terms - Eligible holders of Existing Steelcase Notes can receive a Consent Payment of $2.50 per $1,000 principal amount, along with an Exchange Consideration of $970 for each $1,000 principal amount of New HNI Notes [3][9]. - The Total Exchange Consideration includes the Consent Payment and Early Tender Payment, which is $1,000 for each $1,000 principal amount of Existing Steelcase Notes [3][9]. Group 4: Consent Solicitation - HNI is soliciting consents to amend the Steelcase indenture to eliminate certain covenants and restrictive provisions [6]. - Eligible holders must validly deliver their related consents to receive the Consent Payment [4][7]. Group 5: Guarantors and Security - The New HNI Notes will be guaranteed by various subsidiaries of the combined company and will be secured by substantially all tangible and intangible assets [12]. - The New HNI Notes will rank equally in right of payment with existing and future indebtedness that is not subordinated [12]. Group 6: Conditions and Timeline - The consummation of the acquisition is conditioned upon shareholder approvals, antitrust approvals, and other customary closing conditions [14]. - The Exchange Offer and Consent Solicitation will expire on October 27, 2025, unless extended [8][10].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements and notes for Steelcase Inc. for periods ended August 29, 2025 [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended August 29, 2025, net income significantly decreased to $35.0 million, with diluted EPS falling to $0.29 | Metric | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :----------------------------- | :---------------------------- | :---------------------------- | :----------- | | Revenue | $897.1 | $855.8 | +$41.3 (+5%) | | Gross profit | $308.5 | $295.4 | +$13.1 (+4%) | | Operating income | $53.1 | $90.0 | -$36.9 (-41%) | | Net income | $35.0 | $63.1 | -$28.1 (-45%) | | Diluted EPS | $0.29 | $0.53 | -$0.24 (-45%) | | Metric | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :----------------------------- | :---------------------------- | :---------------------------- | :----------- | | Revenue | $1,676.1 | $1,583.1 | +$93.0 (+6%) | | Gross profit | $572.3 | $529.8 | +$42.5 (+8%) | | Operating income | $78.6 | $107.6 | -$29.0 (-27%) | | Net income | $48.6 | $74.0 | -$25.4 (-34%) | | Diluted EPS | $0.41 | $0.62 | -$0.21 (-34%) | - Dividends declared and paid per common share remained constant at **$0.100** for the three months and **$0.200** for the six months ended August 29, 2025 and August 23, 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the three months ended August 29, 2025, was $41.5 million, down from $71.0 million in the prior year | Metric | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | | Net income | $35.0 | $63.1 | -$28.1 (-45%) | | Total other comprehensive income, net | $6.5 | $7.9 | -$1.4 (-18%) | | Comprehensive income | $41.5 | $71.0 | -$29.5 (-42%) | | Metric | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | | Net income | $48.6 | $74.0 | -$25.4 (-34%) | | Total other comprehensive income, net | $28.0 | $8.2 | +$19.8 (+241%) | | Comprehensive income | $76.6 | $82.2 | -$5.6 (-7%) | - Foreign currency translation adjustments significantly increased total other comprehensive income for the six months ended August 29, 2025, reaching **$27.9 million** compared to **$8.0 million** in the prior year[13](index=13&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased slightly to $2,352.0 million as of August 29, 2025, while total liabilities decreased, leading to an increase in shareholders' equity | Metric | August 29, 2025 (in millions) | February 28, 2025 (in millions) | Change | | :-------------------------------- | :---------------------------- | :------------------------------ | :------- | | Total assets | $2,352.0 | $2,330.4 | +$21.6 | | Cash and cash equivalents | $216.8 | $346.3 | -$129.5 | | Accounts receivable, net | $369.8 | $323.1 | +$46.7 | | Inventories, net | $288.0 | $245.7 | +$42.3 | | Total current assets | $1,007.1 | $1,029.0 | -$21.9 | | Total liabilities | $1,335.6 | $1,378.7 | -$43.1 | | Total shareholders' equity | $1,016.4 | $951.7 | +$64.7 | - Class B Common Stock converted into Class A Common Stock in 2026, resulting in **114,727,802 shares** of Class A Common Stock and no Class B Common Stock outstanding as of August 29, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Total shareholders' equity increased to $1,016.4 million, driven by net income and other comprehensive income, partially offset by dividends and repurchases - Total shareholders' equity increased by **$64.7 million** from **$951.7 million** at February 28, 2025, to **$1,016.4 million** at August 29, 2025[19](index=19&type=chunk) - Net income contributed **$48.6 million** to retained earnings for the six months ended August 29, 2025[19](index=19&type=chunk) - Dividends paid totaled **$24.1 million** for the six months ended August 29, 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was $82.2 million for the six months ended August 29, 2025, a significant shift from cash provided in the prior year | Cash Flow Activity | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :-------------------------------- | :---------------------------- | :---------------------------- | :----------- | | Net cash provided by (used in) operating activities | $(82.2) | $49.0 | -$131.2 | | Net cash used in investing activities | $(19.4) | $(15.9) | -$3.5 | | Net cash used in financing activities | $(29.3) | $(54.3) | +$25.0 | | Net decrease in cash, cash equivalents and restricted cash | $(129.7) | $(22.0) | -$107.7 | - Cash and cash equivalents and restricted cash at the end of the period decreased to **$224.1 million** from **$303.9 million** in the prior year[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes on accounting policies, financial statements, and significant events including the HNI merger [1. BASIS OF PRESENTATION](index=8&type=section&id=1.%20BASIS%20OF%20PRESENTATION) - The financial statements are prepared in accordance with GAAP for interim financial information and Article 10 of Regulation S-X[26](index=26&type=chunk) - Interim results should not be considered indicative of results to be expected for a full year[26](index=26&type=chunk) - References to "Steelcase," "we," "our," "Company" refer to Steelcase Inc. and its subsidiaries, with the fiscal year ending in February[27](index=27&type=chunk) [2. NEW ACCOUNTING STANDARDS](index=8&type=section&id=2.%20NEW%20ACCOUNTING%20STANDARDS) - Adopted ASU No. 2023-07, Segment Reporting, retrospectively in 2025, which modified annual and interim disclosures but had no material effect on consolidated financial statements[29](index=29&type=chunk) - ASU No. 2024-03, Income Statement - Expense Disaggregation Disclosures, effective after December 15, 2026 (annual) and December 15, 2027 (interim), is expected to modify disclosures but not materially affect financial statements[30](index=30&type=chunk) - ASU No. 2023-09, Income Taxes - Improvements to Income Tax Disclosures, effective after December 15, 2024 (annual), is expected to modify disclosures but not materially affect financial statements[31](index=31&type=chunk) [3. PLANNED MERGER](index=9&type=section&id=3.%20PLANNED%20MERGER) - On August 3, 2025, Steelcase entered a Merger Agreement with HNI Corporation, where HNI will acquire Steelcase in a cash and stock transaction[33](index=33&type=chunk) - Steelcase common stock holders will receive consideration in mixed consideration (**0.2192 HNI common shares + $7.20 cash**), all cash, or all HNI common stock, subject to adjustment[34](index=34&type=chunk)[38](index=38&type=chunk) - The merger is subject to shareholder and regulatory approvals and is expected to close by the end of calendar year 2025[36](index=36&type=chunk)[94](index=94&type=chunk) - All Class B Common Stock converted into Class A Common Stock in Q2 2026 due to the Merger Agreement, resulting in **114,727,802 Class A shares** outstanding and no Class B shares as of August 29, 2025[40](index=40&type=chunk) [4. REVENUE](index=10&type=section&id=4.%20REVENUE) | Product Category | Americas (2025) | Americas (2024) | International (2025) | International (2024) | | :------------------------------- | :-------------- | :-------------- | :------------------- | :------------------- | | Desking, benching, systems & storage | $314.5 | $308.9 | $60.9 | $54.8 | | Seating | $192.1 | $189.0 | $73.9 | $65.1 | | Other | $200.5 | $190.1 | $55.2 | $47.9 | | **Total Revenue** | **$707.1** | **$688.0** | **$190.0** | **$167.8** | | Geographic Revenue | August 29, 2025 | August 23, 2024 | | :----------------- | :-------------- | :-------------- | | U.S. | $663.7 | $646.7 | | Foreign locations | $233.4 | $209.1 | | **Total Revenue** | **$897.1** | **$855.8** | - Customer deposits increased to **$58.4 million** as of August 29, 2025, from **$43.0 million** at February 28, 2025[43](index=43&type=chunk) [5. EARNINGS PER SHARE](index=11&type=section&id=5.%20EARNINGS%20PER%20SHARE) - Basic EPS for the three months ended August 29, 2025, was **$0.29** (vs **$0.53** in prior year), and for six months was **$0.41** (vs **$0.63** in prior year)[47](index=47&type=chunk) - Diluted EPS for the three months ended August 29, 2025, was **$0.29** (vs **$0.53** in prior year), and for six months was **$0.41** (vs **$0.62** in prior year)[47](index=47&type=chunk) - The computation uses the two-class method, considering participating securities (restricted stock units with non-forfeitable dividend rights)[46](index=46&type=chunk) [6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=12&type=section&id=6.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) - Accumulated other comprehensive income (loss) improved from **$(63.5) million** at February 28, 2025, to **$(35.5) million** at August 29, 2025[49](index=49&type=chunk) - This improvement was primarily driven by **$27.9 million** in foreign currency translation adjustments for the six months ended August 29, 2025[49](index=49&type=chunk) [7. FAIR VALUE](index=13&type=section&id=7.%20FAIR%20VALUE) - Managed investment portfolio (short-term investments) fair value was **$41.1 million** as of August 29, 2025, with **$10.4 million** maturing within one year and **$30.7 million** maturing after one year through five years[54](index=54&type=chunk) - Total debt was carried at cost of **$447.4 million** as of August 29, 2025, with a fair value of **$443.7 million**[56](index=56&type=chunk) - The company uses derivative financial instruments (foreign exchange forward contracts) to manage foreign exchange and interest rate exposures, not for speculative purposes[55](index=55&type=chunk) [8. INVENTORIES](index=14&type=section&id=8.%20INVENTORIES) | Inventory Component | August 29, 2025 (in millions) | February 28, 2025 (in millions) | Change | | :-------------------------- | :---------------------------- | :------------------------------ | :------- | | Raw materials and work-in-process | $189.8 | $166.8 | +$23.0 | | Finished goods | $129.2 | $108.1 | +$21.1 | | Revaluation to LIFO | $(31.0) | $(29.2) | -$1.8 | | **Total Inventories, net** | **$288.0** | **$245.7** | **+$42.3** | - The portion of inventories determined by the LIFO method aggregated to **$119.7 million** as of August 29, 2025[57](index=57&type=chunk) [9. SHARE-BASED COMPENSATION](index=14&type=section&id=9.%20SHARE-BASED%20COMPENSATION) - In Q1 2026, **597,600 Performance Units (PSUs)** were issued for 2026-2028, with **478,080** based on performance and **119,520** on market conditions[60](index=60&type=chunk) - Total PSU expense for the six months ended August 29, 2025, was **$7.1 million** (vs **$8.4 million** in prior year)[65](index=65&type=chunk) - Unrecognized compensation expense for nonvested PSUs was **$7.1 million** as of August 29, 2025, expected to be recognized over **1.8 years**[68](index=68&type=chunk) - **1,285,589 Restricted Stock Units (RSUs)** were awarded during the six months ended August 29, 2025, with restrictions lapsing up to three years[69](index=69&type=chunk) - Total RSU expense for the six months ended August 29, 2025, was **$9.9 million** (vs **$9.0 million** in prior year)[70](index=70&type=chunk) - Unrecognized compensation expense for nonvested RSUs was **$12.6 million** as of August 29, 2025, expected to be recognized over **1.9 years**[71](index=71&type=chunk) [10. REPORTABLE SEGMENTS](index=17&type=section&id=10.%20REPORTABLE%20SEGMENTS) - The company's operating segments are Americas, EMEA, and Asia Pacific, aggregated into two reportable segments: Americas and International[73](index=73&type=chunk)[74](index=74&type=chunk) - The Americas segment serves customers in the U.S., Canada, the Caribbean Islands and Latin America with a comprehensive portfolio of furniture, interior architectural, textile and surface imaging products[75](index=75&type=chunk) - The International segment serves customers in EMEA and Asia Pacific with a comprehensive portfolio of furniture and interior architectural products[76](index=76&type=chunk) | Segment | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :-------------- | :---------------------------- | :---------------------------- | :----------- | | Americas | $1,310.7 | $1,242.4 | +$68.3 (+5.5%) | | International | $365.4 | $340.7 | +$24.7 (+7.3%) | | **Consolidated** | **$1,676.1** | **$1,583.1** | **+$93.0 (+5.9%)** | | Segment | August 29, 2025 (in millions) | August 23, 2024 (in millions) | Change (YoY) | | :-------------- | :---------------------------- | :---------------------------- | :----------- | | Americas | $95.7 | $120.5 | -$24.8 (-20.6%) | | International | $(17.1) | $(12.9) | -$4.2 (-32.6%) | | **Consolidated** | **$78.6** | **$107.6** | **-$29.0 (-27.0%)** | [11. RESTRUCTURING ACTIVITIES](index=19&type=section&id=11.%20RESTRUCTURING%20ACTIVITIES) - In Q2 2026, initiated a cost savings plan in EMEA involving **85-95 salaried employee terminations**, expecting **$13-$15 million** in costs, with **$8.5 million** incurred[82](index=82&type=chunk) - In Q2 2026, initiated real estate consolidation in Asia Pacific, involving **35 salaried and 125 hourly employee terminations**, expecting **$6-$7 million** in costs, with **$1.3 million** incurred for terminations and **$0.4 million** for lease asset impairment[83](index=83&type=chunk) - In Q1 2026, initiated restructuring in the Americas to prioritize strategic initiatives, involving **85 salaried employee terminations**, expecting **$10-$12 million** in costs, with **$1.6 million** incurred in Q2 2026 and **$9.1 million** in Q1 2026[84](index=84&type=chunk) - The restructuring reserve balance increased to **$12.3 million** as of August 29, 2025, from **$2.9 million** at February 28, 2025, due to **$20.9 million** in additions and **$11.7 million** in payments[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Steelcase's Q2 and year-to-date 2026 financial performance, merger impact, segments, and liquidity [Financial Summary](index=20&type=section&id=Financial%20Summary) | Metric | August 29, 2025 | August 23, 2024 | | :-------------------- | :-------------- | :-------------- | | Revenue | $897.1 | $855.8 | | Gross profit | $308.5 | $295.4 | | Operating income | $53.1 | $90.0 | | Net income | $35.0 | $63.1 | | Diluted EPS | $0.29 | $0.53 | | Metric | August 29, 2025 | August 23, 2024 | | :-------------------- | :-------------- | :-------------- | | Revenue | $1,676.1 | $1,583.1 | | Gross profit | $572.3 | $529.8 | | Operating income | $78.6 | $107.6 | | Net income | $48.6 | $74.0 | | Diluted EPS | $0.41 | $0.62 | [Results of Operations](index=20&type=section&id=Results%20of%20Operations) | Segment | Organic Growth $ | Organic Growth % | | :-------------- | :--------------- | :--------------- | | Americas | $19.0 | 3% | | International | $13.7 | 8% | | **Consolidated** | **$32.7** | **4%** | | Segment | Organic Growth $ | Organic Growth % | | :-------------- | :--------------- | :--------------- | | Americas | $69.1 | 6% | | International | $12.8 | 4% | | **Consolidated** | **$81.9** | **5%** | | Metric | August 29, 2025 | August 23, 2024 | | :-------------------- | :-------------- | :-------------- | | Operating income | $53.1 | $90.0 | | Adjusted operating income | $75.3 | $68.5 | | Metric | August 29, 2025 | August 23, 2024 | | :-------------------- | :-------------- | :-------------- | | Operating income | $78.6 | $107.6 | | Adjusted operating income | $114.9 | $96.7 | | Metric | August 29, 2025 | August 23, 2024 | | :-------------------- | :-------------- | :-------------- | | Diluted EPS | $0.29 | $0.53 | | Adjusted diluted EPS | $0.45 | $0.39 | | Metric | August 29, 2025 | August 23, 2024 | | :-------------------- | :-------------- | :-------------- | | Diluted EPS | $0.41 | $0.62 | | Adjusted diluted EPS | $0.65 | $0.55 | [Overview](index=21&type=section&id=Overview) - Steelcase entered a Merger Agreement with HNI Corporation on August 3, 2025, for an acquisition in a cash and stock transaction, expected to close by the end of calendar year 2025[94](index=94&type=chunk) - Q2 2026 orders grew **6%** and revenue grew **5%** year-over-year, driven by demand from large corporate customers in the Americas and strength in the India market internationally[95](index=95&type=chunk) - Additional restructuring actions were initiated in EMEA and Asia Pacific to further reduce the cost structure and improve profitability[95](index=95&type=chunk) - Ongoing investment in business transformation includes the development and configuration of a new enterprise resource planning (ERP) system, with approximately **$78 million** capitalized as of Q2 2026[96](index=96&type=chunk) [Q2 2026 Compared to Q2 2025](index=22&type=section&id=Q2%202026%20Compared%20to%20Q2%202025) - Net income decreased to **$35.0 million** (diluted EPS **$0.29**) in Q2 2026 from **$63.1 million** (diluted EPS **$0.53**) in Q2 2025[97](index=97&type=chunk) - Operating income decreased by **$36.9 million** to **$53.1 million**, impacted by **$11.9 million** in restructuring costs and **$7.1 million** in merger transaction costs, partially offset by a **$1.2 million** gain from land sale[97](index=97&type=chunk) - Adjusted operating income increased to **$75.3 million** (adjusted diluted EPS **$0.45**) in Q2 2026 from **$68.5 million** (adjusted diluted EPS **$0.39**) in Q2 2025[97](index=97&type=chunk) - Revenue increased by **$41.3 million (5%)** to **$897.1 million**, with **3% organic growth** in the Americas and **8% organic growth** in International[98](index=98&type=chunk) - Operating expenses increased by **$42.0 million**, or **360 basis points** as a percentage of revenue, primarily due to lower gains on land sales, merger transaction costs, unfavorable currency translation, and higher non-employee director deferred compensation expense[99](index=99&type=chunk)[102](index=102&type=chunk) [Year-to-date 2026 Compared to Year-to-date 2025](index=22&type=section&id=Year-to-date%202026%20Compared%20to%20Year-to-date%202025) - Net income decreased to **$48.6 million** (diluted EPS **$0.41**) in year-to-date 2026 from **$74.0 million** (diluted EPS **$0.62**) in year-to-date 2025[101](index=101&type=chunk) - Operating income decreased by **$29.0 million** to **$78.6 million**, impacted by **$21.1 million** in restructuring costs and **$7.7 million** in merger transaction costs, partially offset by a **$1.2 million** gain from land sale[101](index=101&type=chunk) - Adjusted operating income increased to **$114.9 million** (adjusted diluted EPS **$0.65**) in year-to-date 2026 from **$96.7 million** (adjusted diluted EPS **$0.55**) in year-to-date 2025[103](index=103&type=chunk) - Revenue increased by **$93.0 million (6%)** to **$1,676.1 million**, with **6% organic growth** in the Americas and **4% organic growth** in International[104](index=104&type=chunk) - Operating expenses increased by **$54.6 million**, or **170 basis points** as a percentage of revenue, primarily due to lower gains on land sales, higher employee costs, merger transaction costs, and unfavorable currency translation effects[106](index=106&type=chunk)[109](index=109&type=chunk) [Interest Expense, Investment Income and Other Income (Expense), Net](index=23&type=section&id=Interest%20Expense,%20Investment%20Income%20and%20Other%20Income%20(Expense),%20Net) | Metric | August 29, 2025 | August 23, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Interest expense | $(6.3) | $(6.4) | | Investment income | $2.3 | $2.9 | | Total other income (expense), net | $3.0 | $(0.6) | | **Total** | **$(1.0)** | **$(4.1)** | | Metric | August 29, 2025 | August 23, 2024 | | :-------------------------------- | :-------------- | :-------------- | | Interest expense | $(12.6) | $(12.6) | | Investment income | $5.2 | $5.3 | | Total other income (expense), net | $(0.3) | $(0.3) | | **Total** | **$(7.7)** | **$(7.6)** | - Equity in income of unconsolidated affiliates increased to **$4.9 million** in Q2 2026 from **$1.7 million** in Q2 2025[108](index=108&type=chunk) [Business Segments](index=24&type=section&id=Business%20Segments) [Americas Segment Performance](index=24&type=section&id=Americas) | Metric | 3 Months 2025 | 3 Months 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------- | :------------ | :------------ | :------------ | :------------ | | Revenue | $707.1 | $688.0 | $1,310.7 | $1,242.4 | | Organic Growth % | 3% | N/A | 6% | N/A | | Metric | 3 Months 2025 | 3 Months 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------------ | :------------ | :------------ | :------------ | | Operating income | $67.7 | $102.0 | $95.7 | $120.5 | | Adjusted operating income | $78.0 | $76.1 | $118.8 | $102.0 | - Q2 2026 revenue growth of **3%** was driven by large corporate customers and pricing benefits, partially offset by a decline from education customers[113](index=113&type=chunk) - Operating income decreased by **$34.3 million** in Q2 2026, primarily due to merger transaction costs (**$7.1 million**) and restructuring costs (**$1.6 million**), and lower gains on land sales; Adjusted operating income improved by **$1.9 million**[112](index=112&type=chunk) - Cost of sales as a percentage of revenue improved by **20 basis points** in Q2 2026 and **50 basis points** year-to-date, driven by pricing benefits and cost reduction initiatives[114](index=114&type=chunk) [International Segment Performance](index=25&type=section&id=International) | Metric | 3 Months 2025 | 3 Months 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------- | :------------ | :------------ | :------------ | :------------ | | Revenue | $190.0 | $167.8 | $365.4 | $340.7 | | Organic Growth % | 8% | N/A | 4% | N/A | | Metric | 3 Months 2025 | 3 Months 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------- | :------------ | :------------ | :------------ | :------------ | | Operating loss | $(14.6) | $(12.0) | $(17.1) | $(12.9) | | Adjusted operating loss | $(2.7) | $(7.6) | $(3.9) | $(5.3) | - Q2 2026 revenue increased by **13% (8% organic)**, driven by growth in India, China, and the UK, including **$8.5 million** of favorable currency translation effects[120](index=120&type=chunk) - Operating loss increased by **$2.6 million** in Q2 2026, primarily due to **$9.8 million** of higher restructuring costs, partially offset by higher volume; Adjusted operating loss improved by **$4.9 million**[117](index=117&type=chunk) - Cost of sales as a percentage of revenue improved by **10 basis points** in Q2 2026 but increased by **20 basis points** year-to-date, primarily due to higher discounts[121](index=121&type=chunk) [Non-GAAP Financial Measures](index=26&type=section&id=Non-GAAP%20Financial%20Measures) - Non-GAAP measures used are organic revenue growth, adjusted operating income (loss), and adjusted earnings per share[124](index=124&type=chunk) - Organic Revenue Growth: Excludes impact of acquisitions/divestitures, foreign currency translation, and additional week in Q4 2025, providing a consistent comparison[125](index=125&type=chunk) - Adjusted Operating Income (Loss) and Adjusted Earnings Per Share: Excludes amortization of purchased intangible assets, restructuring costs (benefits), gains/losses on land sales (net of variable compensation), pension plan settlements, and merger transaction costs, along with related tax effects[126](index=126&type=chunk)[131](index=131&type=chunk) - Management uses these non-GAAP measures to monitor and evaluate financial results and trends, believing they are useful to investors[89](index=89&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Steelcase's liquidity position as of August 29, 2025, included $216.8 million in cash and cash equivalents and $41.1 million in short-term investments [Cash provided by (used in) operating activities](index=28&type=section&id=Cash%20provided%20by%20(used%20in)%20operating%20activities) - Net cash used in operating activities was **$82.2 million** for the six months ended August 29, 2025, compared to **$49.0 million** provided in the prior year[132](index=132&type=chunk) - This shift was primarily due to increased inventory purchases to mitigate potential supply chain disruptions, higher accounts receivable due to revenue growth, and increased cash tax payments (**$29.7 million** in year-to-date 2026 vs **$10.8 million** in year-to-date 2025)[132](index=132&type=chunk) - Annual payments for accrued variable compensation and retirement plan contributions increased to **$156.1 million** in year-to-date 2026 from **$122.4 million** in the prior year[132](index=132&type=chunk) [Cash used in investing activities](index=28&type=section&id=Cash%20used%20in%20investing%20activities) - Net cash used in investing activities was **$19.4 million** for the six months ended August 29, 2025, compared to **$15.9 million** in the prior year[133](index=133&type=chunk) - Capital expenditures increased to **$32.1 million** from **$24.6 million**, primarily related to investments in manufacturing operations, information technology, and customer-facing facilities and showrooms[133](index=133&type=chunk) - Proceeds from disposal of fixed assets were **$3.1 million** in year-to-date 2026, significantly lower than **$44.3 million** in year-to-date 2025, which primarily related to the sale of land[133](index=133&type=chunk) [Cash used in financing activities](index=28&type=section&id=Cash%20used%20in%20financing%20activities) - Net cash used in financing activities decreased to **$29.3 million** for the six months ended August 29, 2025, from **$54.3 million** in the prior year[134](index=134&type=chunk) - Common stock repurchases decreased significantly to **$5.2 million (456,068 shares)** in year-to-date 2026, primarily for tax withholding obligations, compared to **$30.3 million (2,401,082 shares)** in year-to-date 2025[134](index=134&type=chunk)[135](index=135&type=chunk) - Dividends paid remained consistent at **$24.1 million**[134](index=134&type=chunk) [Liquidity Facilities](index=29&type=section&id=Liquidity%20Facilities) - Total available credit lines were **$323.0 million** as of August 29, 2025, consisting of a **$300.0 million** global committed bank facility (through 2029) and **$23.0 million** in various uncommitted facilities[137](index=137&type=chunk) - No borrowings were outstanding under any facilities as of August 29, 2025, and the company was in compliance with all covenants[137](index=137&type=chunk)[138](index=138&type=chunk) - Total consolidated debt was **$447.4 million**, consisting of unsecured term notes due in 2029 with a **5.6% effective interest rate** and no financial covenants[139](index=139&type=chunk) [Liquidity Outlook](index=29&type=section&id=Liquidity%20Outlook) - Total liquidity (cash, cash equivalents, short-term investments, COLI cash surrender value) aggregated to **$426.8 million** as of August 29, 2025[140](index=140&type=chunk) - Planned discretionary cash usages for 2026 include approximately **$90 million** for capital expenditures and capitalizable cloud computing costs related to the new ERP system[142](index=142&type=chunk) - A quarterly dividend of **$0.10 per share** (approximately **$11.5 million**) was announced for Q3 2026[142](index=142&type=chunk) [Critical Accounting Estimates](index=30&type=section&id=Critical%20Accounting%20Estimates) - No changes in critical accounting estimates during Q2 2026 compared to the Annual Report on Form 10-K for the fiscal year ended February 28, 2025[143](index=143&type=chunk) [Recently Issued Accounting Standards](index=30&type=section&id=Recently%20Issued%20Accounting%20Standards) - Refers to Note 2 of the condensed consolidated financial statements for details on recently issued accounting standards[144](index=144&type=chunk) [Forward-looking Statements](index=30&type=section&id=Forward-looking%20Statements) - The section discusses expectations regarding future events, plans, and objectives, including benefits of the Merger Agreement[145](index=145&type=chunk) - These statements are subject to risks and uncertainties that could cause actual results to differ materially, such as competitive and economic conditions, acts of terrorism, cyberattacks, regulatory changes, input costs, currency fluctuations, and risks related to the HNI merger[145](index=145&type=chunk) - The company undertakes no obligation to update, amend, or clarify forward-looking statements[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks, including foreign currency exchange, interest rates, commodity prices, and fixed income and equity prices, remained materially unchanged in Q2 2026 [Foreign Exchange Risk](index=31&type=section&id=Foreign%20Exchange%20Risk) - No material change in foreign exchange risk occurred during Q2 2026[148](index=148&type=chunk) [Interest Rate Risk](index=31&type=section&id=Interest%20Rate%20Risk) - No material change in interest rate risk occurred during Q2 2026[149](index=149&type=chunk) [Commodity Price Risk](index=31&type=section&id=Commodity%20Price%20Risk) - No material change in commodity price risk occurred during Q2 2026[150](index=150&type=chunk) [Fixed Income and Equity Price Risk](index=31&type=section&id=Fixed%20Income%20and%20Equity%20Price%20Risk) - No material change in fixed income and equity price risk occurred during Q2 2026[151](index=151&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of August 29, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of August 29, 2025[152](index=152&type=chunk) - No material changes in internal control over financial reporting occurred during the second fiscal quarter[153](index=153&type=chunk) PART II. OTHER INFORMATION [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Discusses risks of the planned HNI merger, including completion, financial impact, and operational uncertainties - The mergers are subject to conditions (shareholder and regulatory approvals) and may not be completed on time or at all, potentially leading to adverse effects on business, financial condition, and stock price[156](index=156&type=chunk)[157](index=157&type=chunk) - If the Merger Agreement is terminated under specified circumstances, Steelcase may owe HNI a termination fee of **$67 million**[157](index=157&type=chunk)[159](index=159&type=chunk) - The Merger Agreement limits Steelcase's ability to solicit, discuss or enter into an agreement with respect to an acquisition proposal for Steelcase and restricts the Board's ability to withdraw its recommendation[158](index=158&type=chunk) - Regulatory approvals may impose conditions that could have an adverse effect on the combined company or delay/prevent completion[161](index=161&type=chunk) - The value of merger consideration for Steelcase shareholders depends on HNI common stock price, which may decline before completion[162](index=162&type=chunk)[163](index=163&type=chunk) - Pending merger can cause business uncertainties, contractual restrictions, and potential loss of management/key employees[166](index=166&type=chunk)[168](index=168&type=chunk) - Potential securities class action and derivative lawsuits related to the merger could result in substantial costs or injunctions[169](index=169&type=chunk)[171](index=171&type=chunk) - Steelcase shareholders will have a significantly reduced ownership (approx. **36%**) and voting interest in the combined company[174](index=174&type=chunk) - The mergers involve substantial non-recurring transaction and regulatory costs[175](index=175&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2026, Steelcase repurchased 24,351 shares of Class A Common Stock at an average price of $12.25 per share to satisfy tax withholding obligations | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------- | :------------------------------- | :--------------------------- | | 05/31/2025 - 07/04/2025 | 14,754 | $10.13 | | 07/05/2025 - 08/01/2025 | 3,933 | $10.48 | | 08/02/2025 - 08/29/2025 | 5,664 | $16.15 | | **Total** | **24,351** | **$12.25 (approx. weighted avg)** | - All repurchases were to satisfy participants' tax withholding obligations upon issuance of shares under equity awards[177](index=177&type=chunk) - As of August 29, 2025, **$79.9 million** remained available under the **$100 million** share repurchase program approved in October 2023[136](index=136&type=chunk)[177](index=177&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including the HNI Merger Agreement, compensation plan, and certifications - Includes the Agreement and Plan of Merger with HNI Corporation (Exhibit 2.1)[178](index=178&type=chunk) - Lists the Steelcase Inc. Incentive Compensation Plan, as amended and restated (Exhibit 10.1*)[178](index=178&type=chunk) - Contains CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and various voting and support agreements (Exhibits 99.1, 99.2, 99.3)[178](index=178&type=chunk) - Includes Inline XBRL documents for financial data[178](index=178&type=chunk) [Signatures](index=37&type=section&id=Signatures) The report is duly signed on behalf of Steelcase Inc. by Nicole C. McGrath, Vice President, Corporate Controller & Chief Accounting Officer, on September 26, 2025 - The report was signed by Nicole C. McGrath, Vice President, Corporate Controller & Chief Accounting Officer, on September 26, 2025[184](index=184&type=chunk)