scs-20210528

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 28, 2021


or
☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-13873

___________________________________________________________

STEELCASE INC.

(Exact name of registrant as specified in its charter)


Michigan		38-0819050
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
901 44th Street SE
Grand Rapids,	Michigan	49508
(Address of principal executive offices)		(Zip Code)

(616) 247-2710

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock	SCS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of June 22, 2021, Steelcase Inc. had 90,582,958 shares of Class A Common Stock and 25,096,994 shares of Class B Common Stock outstanding.

Table of Contents


STEELCASE INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED May 28, 2021 INDEX


		Page No.

PART I	Financial Information	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Operations for the Three Months Ended May 28, 2021 and May 29, 2020	1
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended May 28, 2021 and May 29, 2020	2
	Condensed Consolidated Balance Sheets as of May 28, 2021 and February 26, 2021	3
	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended May 28, 2021 and May 29, 2020	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended May 28, 2021 and May 29, 2020	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24

PART II	Other Information	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6.	Exhibits	26
Signatures		27

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements:

STEELCASE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except per share data)


	Three Months Ended
	May 28, 2021		May 29, 2020
Revenue	$	556.6	$	482.8
Cost of sales	401.9		360.1

Gross profit	154.7		122.7
Operating expenses	186.5		157.4
Goodwill impairment charge	—		17.6

Operating loss	(31.8)		(52.3)
Interest expense	(6.4)		(7.3)
Investment income	0.2		0.8
Other income (expense), net	(0.8)		4.0
Loss before income tax benefit	(38.8)		(54.8)
Income tax benefit	(10.7)		(16.7)
Net loss	$	(28.1)	$	(38.1)
Earnings (loss) per share:
Basic	$	(0.24)	$	(0.33)
Diluted	$	(0.24)	$	(0.33)
Dividends declared and paid per common share	$	0.100	$	0.070

See accompanying notes to the condensed consolidated financial statements.

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STEELCASE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)


	Three Months Ended
	May 28, 2021		May 29, 2020
Net loss	$	(28.1)	$	(38.1)
Other comprehensive income (loss), net:
Unrealized gain (loss) on investments	0.2		(0.2)
Pension and other post-retirement liability adjustments	(0.1)		0.3
Derivative amortization	0.2		0.2
Foreign currency translation adjustments	0.9		(8.9)
Total other comprehensive income (loss), net	1.2		(8.6)
Comprehensive loss	$	(26.9)	$	(46.7)

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

STEELCASE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)


	(Unaudited)
	May 28, 2021		February 26, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	397.2	$	489.8

Accounts receivable	269.4		279.0
Allowance for doubtful accounts	(9.1)		(8.7)
Inventories	227.6		193.5

Prepaid expenses	24.9		20.9
Income taxes receivable	59.0		49.5
Other current assets	23.1		21.4
Total current assets	992.1		1,045.4
Property, plant and equipment, net of accumulated depreciation of $1,079.5 and $1,063.2	412.3		410.8
Company-owned life insurance ("COLI")	168.9		169.5
Deferred income taxes	115.3		113.3
Goodwill	218.4		218.1
Other intangible assets, net of accumulated amortization of $77.0 and $73.3	86.8		90.4
Investments in unconsolidated affiliates	51.3		51.5
Right-of-use operating lease assets	216.8		225.4
Other assets	27.7		29.6
Total assets	$	2,289.6	$	2,354.0
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	199.3	$	181.3
Short-term borrowings and current portion of long-term debt	5.0		4.7
Current operating lease obligations	43.3		43.8
Accrued expenses:
Employee compensation	61.7		90.1
Employee benefit plan obligations	15.6		24.9
Accrued promotions	25.2		27.8
Customer deposits	42.2		33.7


Other	105.9		108.7
Total current liabilities	498.2		515.0
Long-term liabilities:
Long-term debt less current maturities	478.7		479.2
Employee benefit plan obligations	144.9		152.9
Long-term operating lease obligations	191.2		199.5
Other long-term liabilities	46.3		46.9
Total long-term liabilities	861.1		878.5
Total liabilities	1,359.3		1,393.5
Shareholders’ equity:

Additional paid-in capital	21.3		12.5
Accumulated other comprehensive income (loss)	(38.8)		(40.0)
Retained earnings	947.8		988.0
Total shareholders’ equity	930.3		960.5
Total liabilities and shareholders’ equity	$	2,289.6	$	2,354.0

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

STEELCASE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)

(in millions, except share and per share data)


	Three Months Ended
	May 28, 2021		May 29, 2020
Changes in common shares outstanding:
Common shares outstanding, beginning of period	114,908,676		117,202,000
Common stock issuances	13,093		12,949
Common stock repurchases	(353,196)		(3,244,389)
Performance and restricted stock units issued as common stock	1,095,826		788,989
Common shares outstanding, end of period	115,664,399		114,759,549

Changes in additional paid-in capital (1):
Additional paid-in capital, beginning of period	$	12.5	$	28.4
Common stock issuances	0.2		0.2
Common stock repurchases	(4.3)		(36.4)
Performance and restricted stock units expense	12.9		7.8
Additional paid-in capital, end of period	21.3		—

Changes in accumulated other comprehensive income (loss):
Accumulated other comprehensive income (loss), beginning of period	(40.0)		(69.3)
Other comprehensive income (loss)	1.2		(8.6)

Accumulated other comprehensive income (loss), end of period	(38.8)		(77.9)

Changes in retained earnings:
Retained earnings, beginning of period	988.0		1,011.3
Net loss	(28.1)		(38.1)
Dividends paid	(12.1)		(8.4)
Common stock repurchases	—		(5.9)
Retained earnings, end of period	947.8		958.9
Total shareholders' equity	$	930.3

SEC Form 10-Q filed by Steelcase Inc.