Posted on 06/22/2004 9:59:10 AM PDT by wmichgrad
Showing its first real hint of recovery in years, Steelcase Inc. this morning announced financial results that spurred talk of a "positive turn in the economy" at the world's largest office-furniture maker.
In terms of profits and losses, it is the best start of a year since 2001.
After being battered for three years by the worst recession in the industry's history, Grand Rapids-based Steelcase reported quarterly results that showed sales gains and smaller losses than the same period last year.
West Michigan's largest manufacturer posted sales of $597.7 million for the first quarter of fiscal 2005, up nearly 8 percent from a year ago and 6 percent higher than the previous quarter.
"I felt that if sales hit $600 million, it would be an exceptional quarter for Steelcase," said industry consultant Michael Dunlap, owner of Michael A. Dunlap &Associates in West Olive. "Posting sales of $597 million is very, very good. It is an excellent indicator that Steelcase has turned the corner. The industry in total is definitely on the upswing."
While the company still lost $5.7 million -- a loss of 4 cents a share -- Steelcase beat its own estimates of a loss between 9 cents and 14 cents a share. Analysts expected the company to lose 7 cents a share.
Not counting restructuring charges of $3.6 million, the company lost $2.1 million for the quarter. That compares to a loss of $7.8 million during the first quarter last year and a $7 million loss the year before that.
"We are pleased with the revenue growth," said James Hackett, president and chief executive officer. "Our industry is now starting to feel the effects of the positive turn in the economy. Strong job growth during the past quarter should bode well for our business."
More importantly, the company said the coming quarter looks better.
Steelcase said it could break even with second-quarter sales that are expected to increase 5 to 8 percent from the prior year, and up 7 to 10 percent over the first quarter.
The company experienced stronger orders in North America and in the Steelcase Design Partnership companies in the first quarter. The increased orders boosted the company's backlog.
The company said the furniture industry is strengthening in North America as job growth continues. Orders from large accounts in North America were substantially higher on a year-over-year and sequential quarter basis. However, the company is not yet seeing similar signs in key international markets.
"I think this recovery is on solid ground," Dunlap said. "As long as we see continued improvement in employment numbers and Fortune 500 and Fortune 1000 companies' profits are solid, things should continue to improve."
It is an important week for Steelcase and the office furniture industry.
Rival Herman Miller Inc. will announce its quarterly and year-end earnings Wednesday after the stock market closes.
Steelcase's annual shareholder meeting is Thursday, where executives will outline goals for the coming year.
Steelcase also reported its temporary steel surcharge implemented on products sold in North America did not affect first-quarter revenues. Steelcase's North American segment saw $2.5 million in increased costs because of higher steel prices.
The 1 percent surcharge will remain in effect until steel prices fall, said spokeswoman Jeanine Hill.
The stock closed Monday at $13.16 a share, up 11 cents.
Michigan economy ping!
Obviously I did not pay attention to the original post.....I unping you!
Let's hope this is true. Western Michigan could definitely use it.
You-probably-already-knew-this PING.
;)
Yep, and I know other good stuff too. It will be a good week for West Michigan.
Great! That is exactly what I like to hear.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.