GRAND RAPIDS, MI -- Steelcase Inc. (NYSE:SCS) lost $27.5 million on fourth quarter revenue of $721.4 million, up $5.2%, almost half the losses (on a per share basis) from restructuring charges. Steelcase international business has been hit hard.
For the year, the contract furniture manufacturer recorded $2.87 billion of revenue, up 7.9%, and net income of $38.8 million, up 1.4%.
"While a number of unusual items impacted our results this quarter, the underlying business otherwise performed largely as expected," said James Hackett, president and CEO of the contract furniture giant. "We are especially proud of the Americas business, which posted an adjusted operating income margin of more than 10 percent in the fourth quarter and continued to gain market share in the U.S."
Setting aside the bad news, Steelcase operating income was $34.6 million in the quarter, up 50% from the year prior. Goodwill impairment charges totalled $59.9 million, and restructuring losses were $19.9 million - $12.4 million of it from real estate impairment charges and $4.2 million from write-downs on Europe and Asian markets.
The European outlook, where Steelcase saw goodwill and tax related charges of $77.5 million in the fourth quarter, is pessimistic. David Sylvester, CFO, announced during the earnings call Steelcase "initiated formal discussions with French works councils regarding a project to reorganize the sales, marketing and support functions in France."
Tax valuation allowance adjustments, foreign tax credit benefits and environmental reserve adjustments had the net effect of reducing earnings by $0.31 per share, resulting in a $0.22 per share loss for the quarter.
Higher corporate costs, variable compensation expenses and the impact of recent acquisitions, were accommodate by lower spending on product development and other initiatives. Income from COLI (company owned life insurance on its employees) fell by $5.3 million as Steelcase moves away from that revenue stream.
Steelcase said it would launch at NeoCon 2013 in June a new seating system, Gesture, based on research into new postures influenced by the way users interact with technology. "Our market share gains in the U.S. have been fueled by new products, solutions and experiences for the interconnected world."
Have something to say? Share your thoughts with us in the comments below.