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Steelcase Reports First Quarter Results

GRAND RAPIDS, Mich., June 19, 2013 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE:SCS) today reported first quarter revenue of $667.1 million and net income of $13.2 million, or $0.10 per share, including restructuring costs of approximately $0.03 per share. Excluding restructuring costs, adjusted earnings were $0.13 per share. Earnings per share were within company estimates. Revenues were lower than expected primarily due to the timing of shipment dates associated with first quarter orders in the Americas, and revenue shortfalls in France and Northern Europe. Steelcase reported $675.2 million of revenue and earnings of $0.10 per share in the first quarter of the prior year, including restructuring costs of approximately $0.03 per share.  

Organic revenue decline in the first quarter was 1 percent after adjusting for $2.8 million of unfavorable currency translation effects and a favorable impact of $3.5 million from recent dealer acquisitions, net of a divestiture. The Americas organic revenue growth was less than 1 percent compared to the prior year, which included revenue from two particularly large projects in the energy sector, and EMEA experienced a 3 percent organic revenue decline. Revenue continued to include a higher than normal mix of project business from some of the company's largest corporate customers.

"Following twelve consecutive quarters of year-over-year organic revenue growth, we experienced a modest decline in the first quarter," said James P. Hackett, CEO. "We are not too concerned with this decline, as order growth in the Americas was better than expected, resulting in a strong quarter-end backlog, and customer visits and project activity remain high."

Current quarter operating income of $20.4 million compares to operating income of $19.3 million in the prior year. Excluding restructuring costs, first quarter adjusted operating income of $24.8 million compares with $24.4 million in the prior year. 

Cost of sales improved 170 basis points to 68.5 percent of revenue in the current quarter compared to 70.2 percent in the prior year. This improvement was driven primarily by net benefits from pricing adjustments and recent restructuring actions in the Americas.

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