Q2 2011 Earnings Call
September 23, 2010 10:00 a.m. ET
Raj Mehan – Director, IR
Jim Hackett – President and CEO
Dave Sylvester – VP and CFO
Mark Mossing - Corporate Controller and Chief Accounting Officer
Terry Lenhardt – VP, North America Finance
Budd Bugatch – Raymond James
Steve Teller - Mirage Capital
Jack [unintelligible] - BB&T Capital Markets
Todd Schwartzman – Sidoti & Company
Mark Rupe – Longbow Research
Previous Statements by SCS
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Good day, everyone, and welcome to Steelcase's second quarter fiscal 2011 conference call. As a reminder, today's call is being recorded. For opening remarks and introductions, I would like to turn the conference over to Mr. Raj Mehan, Director of Investor Relations.
Thank you. Good morning everyone. Thanks for joining us for the recap of our second quarter fiscal year 2011 financial results. Here with us today are Jim Hackett, our president and chief executive officer; Dave Sylvester, our chief financial officer; Mark Mossing, corporate controller and chief accounting officer; and Terry Lenhardt, vice president, North America finance.
As a reminder, our website, ir.steelcase.com, contains detailed webcast slides related to year-over-year and sequential comparisons that members of the investment community may find useful in interpreting our results.
Our second quarter earnings release, which crossed the wires yesterday, is accessible on our website also. This conference call is being webcast, and a replay of this call will also be posted to the site later today. At the conclusion of our prepared remarks, we will respond to questions from investors and analysts.
Our discussion today will include references to non-GAAP financial measures. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors. Reconciliations for the most comparable GAAP measures are included in the earnings release and webcast slides.
At this time, we are incorporating by reference into this conference call and subsequent transcript the text of our Safe Harbor statement included in yesterday’s release. Certain statements made within the release, and during this conference call, constitute forward-looking statements. There are risks associated with the use of this information for investment decision-making purposes.
For more details on these risks, please refer to yesterday’s release and Form 8-K, the company's 10-K for the year-ended February 26, 2010, and our other filings with the Securities and Exchange Commission. This webcast is a copyrighted production of Steelcase, Inc.
With those formalities out of the way, I'd love to turn the call over to our president and CEO, Jim Hackett.
Good morning. It's a pleasure to speak with you about a quarter that exceeded our own expectations, both from a revenue and profit perspective. Steelcase has demonstrated organic growth in back-to-back quarters and we feel optimistic about the third quarter as well because we had a significant order backlog that we'll be shipping this fall.
As I talk with other CEOs, there seems to be a consistent core belief that offers insight into this recent growth. Although they're quite tentative about the near- and mid-term, they tell me that their companies have accepted the likelihood that we've moved beyond the depth of the worst recession in modern times.
This recession, in terms of the current hurricane season, was a category five and it was a direct hit. But as we've witnessed with some effects of the stimulus, and some excellent navigation by corporations as they managed to the cash situation and cost reduction, companies are now starting to release monies for important projects.
And there's an optimistic corollary to this. We can only imagine what might emerge if we can get the Congress, president, and the nation's business leaders to share a common vision of success. It seems we waste a lot of valuable time trying to get the RPM of our economic engine at the right speed. But I'll leave further discussion about that to the pundits, and speak to our business.
We're in the midst of investing in our core business to continue building our version of the globally integrated enterprise. Now this concept is to link tightly our operating entities through our own insights into space and the emerging technologies that enable better collaboration.
The approach not only includes the new products in the development pipeline, but changes to our facilities here in Michigan. We are releasing money right now from core new projects, and moving forward on the plans we announced last year to bring our office teams together on a single campus. We'll start knocking down walls for renovation next week in our headquarters, and we're confident that this will be more than just a physical change, but a way to inspire innovation, collaboration, and new ways of working for our people all over the world.
Frankly, it feels good to discuss investments in our future, and much more so when it's in a direction that continues to make Steelcase a market leader globally. It's still the number-one reaction when executives from other companies come to Steelcase. Here's what they say to me: "Jim, I had no idea you were providing such a broad collection of cool and new things, from the office, to the classroom, to the medical suite, all around the world." They just don't expect that from Steelcase.
And we've been working hard on the challenge of getting people to realize how much the company has changed. The news in our quarterly results speak to much of what we've been saying.