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Steelcase flat for 2017 fiscal year despite rocky first two quarters

BY Wednesday, March 22, 2017 09:06am

GRAND RAPIDS — Bolstered by increased order volume from the Americas and Asia, Steelcase Inc. managed to close its 2017 fiscal year on par with the previous year’s results.

Despite what amounted to a rocky first half of the year, the Grand Rapids-based office furniture manufacturer generated approximately $3.03 billion in revenue for the full 2017 fiscal year, a modest decrease compared to $3.06 billion in the previous fiscal year.

“It’s a tale of two halves,” Senior Vice President and CFO David Sylvester told MiBiz. “The first half of the year is when we suffered our declines in revenue and in the back half of the year, we grew revenue. That’s the function of a lot of the investments that we’ve been talking about for well over a year, new products that we’ve introduced. … All I think contributed to that turnaround to that stronger second half.”

For its fourth quarter that ended Feb. 24, Steelcase (NYSE: SCS) generated revenues of $769 million, up nearly 3 percent compared to $748 million in the same period a year ago.

Revenues in the company’s Americas market reached $563.8 million in its fourth quarter, a up 3 percent from last year. Likewise, revenues increased in its other category, which includes the Asia Pacific region, to $75.1 million, a 15-percent increase over the same period in the prior year.

“They had a remarkable quarter and a fantastic year, setting records on orders and revenue,” Sylvester said of the company’s performance in Asia. “We’re really doing quite well in that region and feel terrific about it.”

For the quarter, Steelcase reported a 66-percent decline in net income to $25.8 million, or 21 cents per share, compared to the $77.5 million, or 62 cents per share, a year ago. The company attributed the decrease to several favorable conditions during previous years including the corporate tax rate in France, gains from partial sales of and investment in an affiliate, and other factors, which yielded a 42-cent per share impact.

Looking ahead to its present first quarter of the 2018 fiscal year, Steelcase expects to generate revenues of $725 million and $750 million. The company expects the Americas business unit to grow 5 percent and its other category to increases by 24 percent, particularly driven by continued growth in the Asia market.

Sylvester said he expects the momentum Steelcase generated in the second half of its 2017 fiscal year to carry its performance into the current quarter.

“I think it’s more of what you’re seeing in the fourth quarter — the success of our new product introductions, which has been significant,” he said. “We’re feeling some momentum.”

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