Post Earnings Coverage as Steelcase’s Quarterly Revenues Grew 3%; Announced Increase in Dividend

Upcoming AWS Coverage on On Track Innovations Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 31, 2017 / Active Wall St. announces its post-earnings coverage on Steelcase Inc. (NYSE: SCS). The Company disclosed its fourth quarter and fiscal 2017 financial results on March 21, 2017. The office furniture maker surpassed revenue expectations. Register with us now for your free membership at:

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One of Steelcase’s competitors within the Business Equipment space, On Track Innovations Ltd. (NASDAQ: OTIV), reported on March 22, 2017, its results for the fourth quarter and fiscal year ended December 31, 2016. AWS will be initiating a research report on On Track Innovations in the coming days.

Today, AWS is promoting its earnings coverage on SCS; touching on OTIV. Get our free coverage by signing up to

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Earnings Reviewed

For the three months ended February 24, 2017, Steelcase reported revenue of $769.1 million, up 3% compared to revenue of $747.9 million in Q4 FY16. The Company’s revenue numbers surpassed analysts’ consensus of $$753 million.

On a geographical basis, Steelcase’s Americas segment posted revenue growth of 3%, which was negatively impacted by continued y-o-y declines in the energy sector. EMEA revenue declined 5%, or less than 1% on an organic basis. The Other category posted revenue growth of 13% in Q4 FY17 compared to prior year, driven by continued strength in Asia/Pacific.

Steelcase’s orders had increased by 6% in Q4 FY17. Order patterns were mixed during the reported quarter, growing by approximately 5% in the Americas and 24% in the Other category and declining by 3% in EMEA compared to the prior year. The order growth in the Americas was driven by project business, while orders related to continuing agreements and marketing programs declined in the quarter. The strong order growth in the Other category was driven by a record level of quarterly orders in Asia/Pacific.

For Q4 FY17, Steelcase’s operating income was $50.5 million compared to operating income of $25.8 million in Q4 FY16. Excluding restructuring costs, the Company’s adjusted operating income for the quarter increased by $21.4 million (or 270 basis points as a percentage of revenue) to $50.9 million.

For Q4 FY17, Steelcase’ net income totaled $25.8 million, or diluted earnings of $0.21 per share. During the reported quarter, as a result of a change in the French corporate tax rate, the Company reduced the value of its net deferred tax assets by approximately $8 million, which reduced diluted earnings per share by approximately $0.06, net of related variable compensation effects. On an adjusted basis, the Company posted earnings of $0.22 per share, which lagged behind Wall Street’s estimates of $0.23 per share.

Fiscal 2017 Results

For FY17, Steelcase posted revenue of $3.0 billion and net income of $124.6 million, or diluted earnings per share of $1.03. Adjusted earnings per share were $1.05. For FY16, the Company recorded revenue of $3.1 billion and net income of $170.3 million, or diluted earnings per share of $1.36. Adjusted earnings per share were $1.46 and included approximately $0.42 per share related to the significant items recorded during Q4 FY16.

The Americas and EMEA categories posted modest revenue declines, while the Other category posted revenue growth of 5%, driven largely by Asia/Pacific.

For FY17, Steelcase’s operating income was $200.2 million, or 6.6% of revenue, compared to operating income of $174.6 million, or 5.7% of revenue, for FY16. The Company’s adjusted operating income totaled $205.3 million, growing $10.8 million on a y-o-y basis.

Cash Matters

At the end of Q4 FY17, Steelcase’ total liquidity, comprising of cash, short-term investments and the cash surrender value of Company-owned life insurance, aggregated $439 million, and total debt was $297 million.

Steelcase’ Board of Directors has declared a quarterly cash dividend of $0.1275 per share, to be paid on or before April 14, 2017, to shareholders of record as of March 31, 2017. This represents an increase of $0.75 per share increase on a q-o-q basis.

Steelcase paid $59 million in dividends and repurchased 3 million shares under its share repurchase authorization program during fiscal 2017 at a cost of $42 million. The Company has $126.5 million remaining under its share repurchase authorization.

Outlook

Steelcase is forecasting Q1 FY18 revenue to be in the range of $725 million to $750 million, which reflects expected organic revenue growth of 2% to 6% over the prior year. The Company expects to report diluted earnings per share in the range of $0.13 to $0.17 for Q1 FY18.

Stock Performance

On Thursday, March 30, 2017, Steelcase’s share price finished yesterday’s trading session at $16.40, slipping 1.50%. A total volume of 544.62 thousand shares exchanged hands. The stock has rallied 18.61% and 13.48% in the last six months and past twelve months, respectively. The stock is trading at a PE ratio of 15.94 and has a dividend yield of 2.93%. At Thursday’s closing price, the stock’s net capitalization stands at $1.94 billion.

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