Steelcase(SCS) - 2026 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited condensed consolidated financial statements and notes for Steelcase Inc. for periods ended August 29, 2025 Condensed Consolidated Statements of Income 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] Condensed Consolidated Statements of Comprehensive Income 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] Condensed Consolidated Balance Sheets 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] Condensed Consolidated Statements of Changes in Shareholders' Equity 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] - Net income contributed $48.6 million to retained earnings for the six months ended August 29, 2025[19] - Dividends paid totaled $24.1 million for the six months ended August 29, 2025[19] Condensed Consolidated Statements of Cash Flows 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] Notes to Condensed Consolidated Financial Statements Detailed notes on accounting policies, financial statements, and significant events including the HNI merger 1. BASIS OF PRESENTATION - The financial statements are prepared in accordance with GAAP for interim financial information and Article 10 of Regulation S-X[26] - Interim results should not be considered indicative of results to be expected for a full year[26] - References to "Steelcase," "we," "our," "Company" refer to Steelcase Inc. and its subsidiaries, with the fiscal year ending in February[27] 2. NEW ACCOUNTING STANDARDS - 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] - 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] - 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] 3. PLANNED MERGER - On August 3, 2025, Steelcase entered a Merger Agreement with HNI Corporation, where HNI will acquire Steelcase in a cash and stock transaction[33] - 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][38] - The merger is subject to shareholder and regulatory approvals and is expected to close by the end of calendar year 2025[36][94] - 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] 4. REVENUE | 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] 5. EARNINGS PER SHARE - 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] - 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] - The computation uses the two-class method, considering participating securities (restricted stock units with non-forfeitable dividend rights)[46] 6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Accumulated other comprehensive income (loss) improved from $(63.5) million at February 28, 2025, to $(35.5) million at August 29, 2025[49] - This improvement was primarily driven by $27.9 million in foreign currency translation adjustments for the six months ended August 29, 2025[49] 7. FAIR VALUE - 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] - Total debt was carried at cost of $447.4 million as of August 29, 2025, with a fair value of $443.7 million[56] - The company uses derivative financial instruments (foreign exchange forward contracts) to manage foreign exchange and interest rate exposures, not for speculative purposes[55] 8. INVENTORIES | 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] 9. SHARE-BASED COMPENSATION - 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] - Total PSU expense for the six months ended August 29, 2025, was $7.1 million (vs $8.4 million in prior year)[65] - Unrecognized compensation expense for nonvested PSUs was $7.1 million as of August 29, 2025, expected to be recognized over 1.8 years[68] - 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] - Total RSU expense for the six months ended August 29, 2025, was $9.9 million (vs $9.0 million in prior year)[70] - Unrecognized compensation expense for nonvested RSUs was $12.6 million as of August 29, 2025, expected to be recognized over 1.9 years[71] 10. REPORTABLE SEGMENTS - The company's operating segments are Americas, EMEA, and Asia Pacific, aggregated into two reportable segments: Americas and International[73][74] - 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] - The International segment serves customers in EMEA and Asia Pacific with a comprehensive portfolio of furniture and interior architectural products[76] | 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 - 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] - 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] - 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] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes Steelcase's Q2 and year-to-date 2026 financial performance, merger impact, segments, and liquidity Financial Summary | 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 | 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 - 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] - 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] - Additional restructuring actions were initiated in EMEA and Asia Pacific to further reduce the cost structure and improve profitability[95] - 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] Q2 2026 Compared to Q2 2025 - 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] - 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] - 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] - 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] - 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][102] Year-to-date 2026 Compared to Year-to-date 2025 - 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] - 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] - 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] - 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] - 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][109] Interest Expense, Investment Income and Other Income (Expense), Net | 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] Business Segments Americas Segment Performance | 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] - 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] - 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] International Segment Performance | 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] - 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] - 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] Non-GAAP Financial Measures - Non-GAAP measures used are organic revenue growth, adjusted operating income (loss), and adjusted earnings per share[124] - Organic Revenue Growth: Excludes impact of acquisitions/divestitures, foreign currency translation, and additional week in Q4 2025, providing a consistent comparison[125] - 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][131] - Management uses these non-GAAP measures to monitor and evaluate financial results and trends, believing they are useful to investors[89] Liquidity and Capital Resources 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 - 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] - 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] - 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] Cash used in investing activities - 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] - 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] - 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] Cash used in financing activities - 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] - 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][135] - Dividends paid remained consistent at $24.1 million[134] Liquidity Facilities - 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] - No borrowings were outstanding under any facilities as of August 29, 2025, and the company was in compliance with all covenants[137][138] - 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] Liquidity Outlook - Total liquidity (cash, cash equivalents, short-term investments, COLI cash surrender value) aggregated to $426.8 million as of August 29, 2025[140] - 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] - A quarterly dividend of $0.10 per share (approximately $11.5 million) was announced for Q3 2026[142] Critical Accounting Estimates - 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] Recently Issued Accounting Standards - Refers to Note 2 of the condensed consolidated financial statements for details on recently issued accounting standards[144] Forward-looking Statements - The section discusses expectations regarding future events, plans, and objectives, including benefits of the Merger Agreement[145] - 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] - The company undertakes no obligation to update, amend, or clarify forward-looking statements[145] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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 - No material change in foreign exchange risk occurred during Q2 2026[148] Interest Rate Risk - No material change in interest rate risk occurred during Q2 2026[149] Commodity Price Risk - No material change in commodity price risk occurred during Q2 2026[150] Fixed Income and Equity Price Risk - No material change in fixed income and equity price risk occurred during Q2 2026[151] Item 4. Controls and Procedures 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] - No material changes in internal control over financial reporting occurred during the second fiscal quarter[153] PART II. OTHER INFORMATION Item 1A. Risk Factors 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][157] - If the Merger Agreement is terminated under specified circumstances, Steelcase may owe HNI a termination fee of $67 million[157][159] - 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] - Regulatory approvals may impose conditions that could have an adverse effect on the combined company or delay/prevent completion[161] - The value of merger consideration for Steelcase shareholders depends on HNI common stock price, which may decline before completion[162][163] - Pending merger can cause business uncertainties, contractual restrictions, and potential loss of management/key employees[166][168] - Potential securities class action and derivative lawsuits related to the merger could result in substantial costs or injunctions[169][171] - Steelcase shareholders will have a significantly reduced ownership (approx. 36%) and voting interest in the combined company[174] - The mergers involve substantial non-recurring transaction and regulatory costs[175] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - As of August 29, 2025, $79.9 million remained available under the $100 million share repurchase program approved in October 2023[136][177] Item 6. Exhibits 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] - Lists the Steelcase Inc. Incentive Compensation Plan, as amended and restated (Exhibit 10.1*)[178] - 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] - Includes Inline XBRL documents for financial data[178] 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]