Steelcase Reported 16.8 Percent 2Q Growth
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Steelcase Reported 16.8 Percent 2Q GrowthGRAND RAPIDS, MI — Office furniture giant Steelcase Inc. earnings, released in Sept., showed  second quarter 2012 revenue of $700.5 million and net income of $11.9 million, up almost four times from the prior year, for the period ended August 26. Steelcase reported $599.8 million of revenue in the second quarter of last year and net income was $2.8 million.

"Our Americas segment had an outstanding quarter, with its adjusted operating margin nearly reaching 10 percent," said James P. Hackett, president and CEO. "Growth was strong, with almost every vertical market in North America reporting double-digit revenue growth over prior year, and our new products continue to gain traction in the market."  

Steelcase said while revenue was ahead of its estimates,  earnings per share were negatively impacted by a decrease in the cash surrender value of variable life company owned life insurance on the employees, or COLI.

Steelcase's current quarter operating income of $25.4 million represents an improvement of $18.9 million over the prior year. Excluding restructuring costs, second quarter adjusted operating income of $37.7 million nearly doubled compared to prior year adjusted operating income of $19.5 million. The improvement was driven largely by organic revenue growth but impacted by higher commodity costs of $11 million, and the deconsolidation of IDEO, its design business spun off earlier.  

Steelcase says third quarter fiscal 2012 revenue will be in the range of $690 to $715 million. This estimate includes an assumption of approximately $12 million from favorable currency translation effects compared to the prior year, as well as revenue from a dealer acquisition completed during May 2011. The company reported revenue of $672.6 million in the third quarter of fiscal 2011, which included $37 million of revenue from IDEO and a divestiture of a small division at PolyVision.

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