Steelcase reported first quarter revenue of $718.8 million and net income of $19.4 million, or diluted earnings per share of $0.16.
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Excluding restructuring costs, adjusted earnings were $0.18 per share. In the prior year, Steelcase reported $705.5 million of revenue, diluted earnings of $0.16 per share and adjusted earnings of $0.17 per share.
Organic revenue growth over the prior year was 1 percent after adjusting for unfavorable currency translation effects and the impact of a small acquisition.
The Other category posted organic revenue growth of 12 percent over the prior year, driven by Asia Pacific and Designtex. EMEA achieved organic revenue growth of 3 percent, while the Americas experienced an organic revenue decline of 1 percent.
Current quarter operating income of $33.3 million compares to operating income of $33.5 million in the prior year.
Excluding restructuring costs, first quarter adjusted operating income of $37.9 million represented an improvement of $2.5 million (or 30 basis points as a percent of revenue) compared to the prior year.
Cost of sales was 67.4 percent of revenue in the current quarter, an improvement of 130 basis points compared to the prior year. EMEA cost of sales improved by 480 basis points as a result of lower disruption costs and inefficiencies associated with manufacturing footprint changes in EMEA and favorable business mix.
The Americas cost of sales improved 70 basis points over the prior year, driven by lower material costs, favorable business mix, on-going cost reduction efforts and improvements in negotiated customer pricing, partially offset by higher warranty costs.
Operating expenses of $196.1 million in the current quarter represented an increase of $11.0 million compared to the prior year. The year-over-year increase was driven by investments in sales and marketing, the impact of an acquisition in the Americas, costs associated with the Learning + Innovation Center in Munich and higher corporate costs.
Income tax expense of $12.3 million in the quarter included $1.0 million of net unfavorable discrete tax items.
Total liquidity, comprised of cash, short-term investments and the cash surrender value of company-owned life insurance, aggregated $315 million, and total debt was $299 million, at the end of the first quarter.
During the first quarter, the company repurchased a total of 1.0 million shares of Class A Common Stock under its share repurchase authorizations for a total cost of $14.8 million. A total of $153.2 million remained under the company's share repurchase authorizations at the end of the first quarter.
The Board of Directors has declared a cash dividend of $0.12 per share, to be paid on or before July 15, 2016 to shareholders of record as of July 5, 2016. ■