Steelcase(US:SCS)2025-09-24 20:05Financial Performance - Steelcase reported second quarter revenue of $897.1 million, a 5% increase from $855.8 million in the prior year, with adjusted earnings per share of $0.45 compared to $0.39[2][18]. - Organic revenue growth was 4%, with a 3% increase in the Americas and 8% growth in International markets, driven by strong demand from large corporate customers[4][17]. - Orders grew 6% year-over-year, with an 8% increase in the Americas and a 1% decline in International, reflecting growth from large corporate and small to midsized businesses[5][7]. - Revenue for the three months ended August 29, 2025, was $897.1 million, a 4.0% increase from $855.8 million for the same period in 2024[22]. - Revenue for the three months ended August 29, 2025, was $897.1 million, an increase of 4.9% compared to $855.8 million for the same period in 2024[42]. - Net income for the three months ended August 29, 2025, was $35.0 million, representing a net income margin of 3.9%[23]. - Net income for the three months ended August 29, 2025, was $35.0 million, compared to $63.1 million for the same period in 2024, indicating a decrease of 44.4%[42]. - Net income for the six months ended August 29, 2025, was $48.6 million, a decrease from $74.0 million for the same period in 2024, representing a decline of 34.5%[47]. Operating Income and Expenses - Operating income decreased to $53.1 million, down $36.9 million from the prior year, impacted by $11.9 million in restructuring costs and $7.1 million in merger-related expenses[8][10]. - Operating expenses increased by $42.0 million year-over-year, driven by lower gains on land sales and merger transaction costs[10]. - Adjusted operating income for the three months ended August 29, 2025, was $75.3 million, with an adjusted operating income margin of 8.4%[23]. - Operating income for the three months ended August 29, 2025, was $53.1 million, with an operating income margin of 5.9%[23]. Margins and Profitability - Gross margin was 34.4%, approximately flat compared to the prior year, despite higher tariff costs and restructuring expenses[9][12]. - Gross profit for the Americas segment was $258.5 million, with a gross profit margin of 36.6% for the three months ended August 29, 2025[24]. - Adjusted EBITDA for the trailing four quarters totaled $278.3 million, with an adjusted EBITDA margin of 8.5%[21]. - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, excluding significant non-cash items and restructuring costs, providing a clearer view of operating profitability[36]. Cash Flow and Liquidity - Total liquidity at the end of the second quarter was $426.8 million, a decrease of $80.3 million compared to the prior year, with total debt at $447.4 million[12]. - Net cash provided by (used in) operating activities was $(82.2) million, compared to $49.0 million in the prior year, indicating a significant decrease in cash flow[47]. - Cash and cash equivalents decreased to $216.8 million as of August 29, 2025, from $346.3 million in February 2025[45]. - The company reported a net decrease in cash, cash equivalents, and restricted cash of $(129.7) million, compared to $(22.0) million in the prior year, highlighting a substantial decline[47]. - Cash and cash equivalents and restricted cash at the end of the period were $224.1 million, down from $303.9 million a year earlier, a decrease of 26.1%[47][48]. Restructuring and Merger Activities - The company announced a merger agreement with HNI Corporation, with a total consideration of approximately $2.2 billion, expected to close by the end of calendar year 2025[3]. - The company is focused on integrating the businesses following the Merger Agreement, which may involve additional costs and operational adjustments[37]. - The company incurred restructuring costs of $3.6 million in the three months ended August 29, 2025, compared to $1.9 million in the same period last year[42]. - Restructuring costs rose to $21.1 million from $8.5 million, representing a significant increase of 148.2%[47]. Shareholder Returns - Steelcase declared a quarterly cash dividend of $0.10 per share, payable on or before October 20, 2025[13]. - The company paid dividends of $24.1 million, slightly up from $24.0 million in the previous year, reflecting a marginal increase[47]. Asset and Liability Management - Total current assets decreased to $1,007.1 million as of August 29, 2025, from $1,029.0 million in February 2025[45]. - Total liabilities decreased to $1,335.6 million as of August 29, 2025, compared to $1,378.7 million in February 2025[45].