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Steelcase Reports Third Quarter Fiscal 2020 Results

Operating margin increased 290 basis points to 7.9%; EPS improved 48% to $0.46




Revenue grew 6% to $955 million, driven by strong organic growth in the Americas



EMEA delivers $7 million improvement in operating income and is profitable for the fiscal year to date



Company projects fiscal year 2020 revenue of $3.7 billion and EPS of $1.41 to $1.45

GRAND RAPIDS, Mich., Dec. 17, 2019 (GLOBE NEWSWIRE) -- Steelcase Inc. (NYSE: SCS) today reported third quarter revenue of $955.2 million and net income of $54.9 million, or diluted earnings of $0.46 per share.A  In the prior year, Steelcase reported $901.0 million of revenue and net income of $37.3 million, or diluted earnings of $0.31 per share and adjusted earnings of $0.36 per share.Revenue increased 6 percent in the third quarter compared to the prior year, reflecting strong growth in the Americas and the Other category.A  The growth in the Americas benefited from favorable timing of shipments compared to recent trends and the prior year, in part due to the timing of the U.S. Thanksgiving holiday.A  Orders (adjusted for currency translation effects, acquisitions and divestitures) grew 4 percent compared to orders in the third quarter of fiscal 2019, which grew 10 percent compared to the previous year.













Revenue and order growth (decline) by segment











Q3 2020 vs. Q3 2019



















Revenue
Growth
(Decline)








Organic
Revenue
Growth








Organic
Order

Growth
































































Americas



8



%







8



%







2



%







EMEA



(1



)%







0



%







11



%







Other category



5



%







6



%







10



%







Steelcase Inc.



6



%







6



%







4



%













































"We're proud to deliver another quarter of outstanding results, including a 28% improvement in adjusted earnings and terrific year-over-year increases in operating margins in the Americas and EMEA," said Jim Keane, president and CEO.A  "Our teams continue to execute against our strategies for growth and profit improvement.A  We continue to capitalize on the investments we've made in new product development and drive initiatives for improving our cost structure."Third quarter operating income of $75.1 million (or 7.9 percent of revenue) increased by $29.7 million or 65.4 percent compared to operating income of $45.4 million (or 5.0 percent of revenue) in the prior year.A  The prior year included an $11.2 million pension charge, which had the effect of reducing operating income by $7.5 million after consideration of the related variable compensation expense.A  The Americas reported operating income of $74.7 million compared to $52.0 million in the prior year.A  Adjusted for the $8.4 million net impact of the pension charge in the prior year, operating income in the Americas increased by $14.3 million, driven primarily by the $52.3 million increase in revenue, which included higher realization of list price adjustments.A  EMEA reported operating income of $6.3 million compared to an operating loss of $0.7 million in the prior year, driven by gross margin improvement initiatives and cost reduction efforts.A  The Other category reported operating income of $3.3 million compared to $4.2 million in the prior year."Our $7 million year-over-year profit improvement in EMEA this quarter is reflective of our teams executing against our strategies as we sustained a high level of revenue while driving improvements in gross margin and operating expenses," said Dave Sylvester, senior vice president and CFO.A  "Our year-to-date profitability demonstrates our ability to drive continued improvement in our business, despite an overall economic environment that continues to be challenging, and puts us in a great position to achieve our near-term target of being profitable in EMEA for fiscal 2020."
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