Steelcase Reports Third Quarter Results - Revenue And Earnings Exceed Expectations

GRAND RAPIDS, Mich., Dec. 16, 2010 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE:SCS) today reported third quarter revenue of $672.6 million and net income of $18.3 million, or $0.14 per share, both ahead of company estimates. Excluding restructuring costs, adjusted earnings equaled $0.18 per share. Steelcase reported $616.1 million of revenue and break-even net income in the third quarter of the prior year.  

Organic revenue growth in the third quarter was 15 percent over the prior year after adjusting for negative impacts of $(21) million from the deconsolidation of dealers completed in the last twelve months and approximately $(10) million related to unfavorable currency translation effects.  Growth was prevalent across most geographies and vertical markets.  

"Our strong recovery continues to be fueled by the improving stability of the economies around the world coupled with the portfolio of innovative solutions we offer our customers," said James P. Hackett, president and CEO.  "Our International segment posted organic growth of 20 percent, led by strong performance in Germany, France and the Asia Pacific region, while North America had broad-based organic growth of 16 percent."

Current quarter operating income of $26.8 million represents an improvement of $12.0 million over the prior year operating income of $14.8 million, which included $4.3 million of income associated with an increase in cash surrender value of variable life company-owned life insurance policies ("variable life COLI income"). Current quarter results include $(8.0) million of restructuring costs compared to $(4.8) million of restructuring costs in the prior year.   Adjusted for these items, third quarter adjusted operating income of $34.8 million improved $19.5 million compared to the prior year driven by organic revenue growth. 

"With the improved demand patterns, we are able to demonstrate the earnings power of a much fitter business model," said David C. Sylvester, vice president and CFO. "Operating margins, excluding restructuring costs, reached 6.8 percent in North America and 5.5 percent in International, where we continue to invest in emerging markets."