GRAND RAPIDS, Mich. - Steelcase Inc. (NYSE:SCS) fourth quarter revenue was $747.9 million and net income of $77.5 million. For fiscal 2016, the company recorded $3.1 billion of revenue, flat with the year before, and net income of $170.3 million.
An income tax benefit of $47.4 million in the quarter included a $56 million benefit from the reversal of a valuation allowance recorded against net deferred tax assets in France and approximately $2 million related to the reinstatement of the U.S. research tax credit.
"Our U.S. industry association reported year-over-year declines in demand for January and February, following decelerating growth rates in the second half of calendar 2015," said Jim Keane, president and CEO. "We still expect to see modest growth in fiscal 2017, in part because of the more than 20 new products we are launching in the U.S. to address areas where demand is strengthening."
"The changes we implemented in EMEA in fiscal 2015 to align our tax structure with the management of our globally integrated enterprise have generated taxable income for our French subsidiaries and allowed for the partial utilization of net operating loss carryforwards in France throughout fiscal 2016," said Dave Sylvester, senior vice president and CFO. "During the fourth quarter, sufficient positive evidence became available, including acceptance of our new tax structure by the U.S. Internal Revenue Service, sustained profitability in our French subsidiaries and other factors, which caused us to reverse the valuation allowance recorded against net deferred tax assets in France. While the new tax structure significantly reduced the income taxes that we otherwise would have paid in the U.S. for fiscal 2016, when we achieve expected profitability in EMEA, the new structure will result in somewhat higher income taxes than we otherwise would have paid in the U.S."
"Order patterns in the Americas reflected lower activity from customers in the insurance and energy sectors, both of which had several large projects in the prior year," said Dave Sylvester. "The decline in those two sectors had a combined negative impact of approximately 6 percent on total orders in the Americas and was partially offset by net growth across all other vertical markets."
Fortune recognized Steelcase Inc. as one of its 2016 "World's Most Admired Companies" in the Home Equipment and Furnishings industry sector for the 10th consecutive year. Steelcase, the global leader in its industry, moved up the ranks to the 2nd spot in the category earning high remarks in all nine criteria.
Steelcase introduced its first Global Report: Engagement + The Global Workplace conducted in 17 countries, receiving positive customer response and media traction globally including in the United States, United Kingdom, France and Germany.
Earlier this fiscal year, Steelcase introduced Brody™ WorkLounge, a cocoon-like space that helps workers regulate their attention and minimize distractions and focus on their tasks by creating a microenvironment for controlled attention. Brody is currently a finalist in the Office & Home category of the Edison Awards.
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