Latest news with #SaraArmbruster
Fast Company
04-08-2025
- Business
- Fast Company
Steelcase's $2 billion sale shows the return-to-office movement is still growing
DESIGN HNI Corporation, which manufactures workplace furnishings, said it will acquire Steelcase in a $2.2 billion deal. [Photos: Steelcase] BY Listen to this Article More info 0:00 / 2:36 Furniture maker Steelcase is being acquired by HNI Corporation in a $2.2 billion deal that shows the upside to office furniture at a time when return-to-office remains on the rise. HNI Corporation, which manufactures workplace furnishings and residential building products like fireplaces, announced the acquisition with Steelcase Monday. The companies cited their complementary geographic footprints, dealer networks, and skillsets as the deal's benefits and said they estimate an annual revenue of about $5.8 billion should shareholders agree and the transaction close by the end of 2025. 'This is a historic moment for Steelcase as we embark on the first step of a transformative combination that will unlock new possibilities for our customers, dealers, and employees alike,' Steelcase president and CEO Sara Armbruster wrote in a letter to employees obtained by Fast Company. 'Together, we will be positioned to redefine what's possible in the world of work, workers, and workplaces.' Armbruster said Steelcase would maintain its Grand Rapids, Michigan, headquarters and continue to operate as Steelcase with its brand and business strategy following the close of the deal, but that HNI chairman, president, and CEO Jeffrey Lorenger would lead the combined company. Subscribe to the Design latest innovations in design brought to you every weekday SIGN UP advertisement RTO growth Steelcase has rebounded from pandemic lockdowns with 12 consecutive quarters of year-over-year gross margin growth, including 7.11% year-over-year growth in the most recent quarter for a reported $779 million in quarterly revenue, according to PitchBook data. As firms instituted return-to-office (RTO) policies in the years since lockdowns, Steelcase's office chairs, work stations, lockers, and phone booths have been in high demand. As recently as last year, RTO was still picking up steam, and fast. The percentage of employees who work 'mostly in person' rose from 34% to 68% between 2023 to 2024, while the share of employees who work 'mostly remote' has dropped from 44% to 17% in the same time period, according to McKinsey & Company. Steelcase, which did not respond to a request for comment, reported strong order growth from financial services companies and large technology companies on its most recent earnings call. Armbruster noted on the call healthcare was an area of growth and said Steelcase's work in the education space was 'well-positioned' but threatened by federal policy targeting education. The early-rate deadline for Fast Company's Most Innovative Companies Awards is Friday, September 5, at 11:59 p.m. PT. Apply today. ABOUT THE AUTHOR Hunter Schwarz is a Fast Company contributor who covers the intersection of design and advertising, branding, business, civics, fashion, fonts, packaging, politics, sports, and technology.. Hunter is the author of Yello, a newsletter about political persuasion More
Yahoo
04-08-2025
- Business
- Yahoo
HNI Corporation to Acquire Steelcase Inc.
Highly Complementary Brand Portfolios, Dealer Networks, and Industry Segments will Enhance Customer Reach Combined Capabilities to Drive Accretion and Accelerate Strategic Initiatives to Better Serve Customers HNI and Steelcase to Host Conference Call and Webcast at 8:30 AM ET Today MUSCATINE, Iowa & GRAND RAPIDS, Mich., August 04, 2025--(BUSINESS WIRE)--HNI Corporation (NYSE: HNI) and Steelcase Inc. (NYSE: SCS) today announced that they have entered into a definitive agreement under which HNI will acquire Steelcase in a cash and stock transaction, with a total consideration of approximately $2.2 billion to Steelcase common shareholders. Under the terms of the agreement, Steelcase shareholders will receive $7.20 in cash and 0.2192 shares of HNI common stock for each share of Steelcase they own. The implied per share purchase price of $18.30 is based on HNI's closing share price of $50.62 on Friday, August 1, 2025, reflecting a valuation multiple at transaction close1 for Steelcase of approximately 5.8x TTM2 Adjusted EBITDA, inclusive of run-rate cost synergies of $120 million. Upon closing, HNI shareholders will own approximately 64% and Steelcase shareholders will own approximately 36% of the combined company. "This acquisition brings together two respected companies with complementary strengths and represents an exciting milestone in HNI's growth journey," said Jeffrey Lorenger, HNI's Chairman, President, and Chief Executive Officer. "We have long admired Steelcase for its insight-led approach, which has helped shape our industry for decades. With the Steelcase portfolio of brands and as in-office work trends accelerate, we will be even better positioned to meet the evolving needs of the workplace, enhance dealer and customer relationships, unlock new opportunities for growth, and create compelling value for the combined company's shareholders." "Joining with HNI is a bold step that marks the next era for Steelcase, our customers, dealers, and employees," said Sara Armbruster, President and Chief Executive Officer of Steelcase. "Together, we will be positioned to redefine what's possible in the world of work, workers, and workplaces. Like Steelcase, HNI is an organization that leads with purpose, shares similar values, and puts the customer at the center of everything they do. I'm excited to see this combination shape our industry." Compelling Strategic Benefits Combines Complementary Portfolios and Dealer Networks to Enhance Customer Reach: HNI's and Steelcase's geographic footprints and dealer networks are highly complementary, which bolsters the combined company's ability to serve more customers across diverse industry segments, including small and medium business, large corporate, healthcare, education, and hospitality customers. The companies have the industry's most respected and widely recognized brands, allowing the combined company to better support an expanded customer base and capture growth opportunities from industry tailwinds. Brings Together World-Class Capabilities: Uniting a strong innovation engine with operational excellence, the combined organization will accelerate delivery of more advanced solutions to customers, while increasing value for shareholders. Strong Financial Profile: The combined company will have pro forma annual revenue of approximately $5.8 billion, pro forma Adjusted EBITDA of approximately $745 million, and 2.1x net leverage.3 These metrics are based on each company's respective last reported 12-month results and are inclusive of annual run-rate synergies. Net leverage is expected to return to pre-acquisition levels within 18-24 months. Highly Synergistic Combination: With recent experience in M&A execution and a disciplined integration approach, HNI's proven ability to successfully combine core capabilities and deliver cost synergies will maximize the new organization's future success. Annual run-rate synergies are expected to total $120 million when fully mature. The company projects the combination will be highly accretive to non-GAAP earnings per share beginning in 2027. Accelerates Strategic Framework: The acquisition is fully aligned with HNI's strategic framework focused on driving long-term profitable growth. With an enhanced financial profile, the new company will also be better positioned to accelerate and increase investments in long-term operational enhancements, digital transformation, and customer-centric buying experiences. HNI and Steelcase share a deep commitment to respecting people, protecting the planet, operating with excellence, and acting with integrity. As a stronger and more diversified organization, the combined company will bring together the strengths of both HNI and Steelcase to create new career growth opportunities for team members, deliver more value for customers, and further support and invest in the communities where they operate. Following the close of the transaction, the combined company will continue to be led by Jeffrey Lorenger, HNI's Chairman, President, and Chief Executive Officer. HNI will continue to operate its corporate headquarters in Muscatine, Iowa, and Steelcase will maintain its headquarters in Grand Rapids, Michigan. HNI will maintain the Steelcase brand following the transaction's close. In addition, post-closing, HNI's Board of Directors will expand from 10 directors to 12, to include two of Steelcase's current independent board members. Approvals, Financing, and Timing to Close The transaction, which is expected to close by the end of calendar year 2025, is subject to approval by HNI and Steelcase shareholders, the receipt of required regulatory clearances, and the satisfaction of other customary closing conditions. Certain shareholders of Steelcase have entered into a voting agreement to vote in favor of the transaction at the special meeting of Steelcase shareholders to be held in connection with the transaction. In support of the transaction, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A. have executed a commitment letter to provide committed financing to HNI, subject to the terms and conditions therein. Advisors J.P. Morgan Securities LLC is serving as exclusive financial advisor to HNI, and Davis Polk & Wardwell LLP is serving as legal counsel. Goldman Sachs & Co. LLC and BofA Securities are serving as financial advisors to Steelcase, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel. Conference Call, Webcast and Presentation HNI and Steelcase will hold a conference call to discuss the transaction today, August 4, 2025 at 8:30 a.m. Eastern Time. To listen, call (855) 761-5600 and use conference ID number 7006893. Access to a live audio webcast and slide presentation will be available on the Events & Presentations page of the Investor Relations section of HNI Corporation's website or at the following link: [ About HNI Corporation HNI Corporation (NYSE: HNI) has been improving where people live, work, and gather for more than 75 years. HNI is a manufacturer of workplace furnishings and residential building products, operating under two segments. The Workplace Furnishings segment is a leading global designer and provider of commercial furnishings, going to market under multiple unique brands. The Residential Building Products segment is the nation's leading manufacturer and marketer of hearth products, which include a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. More information can be found on the Corporation's website at About Steelcase Steelcase (NYSE: SCS) is a global design and thought leader in the world of work. Our purpose is to help the world work better. Along with more than 30 creative and technology partner brands, we research, design and manufacture furnishings and solutions for many of the places where work happens — including offices, homes, and learning and health environments. Together with our 11,300 employees, we're working toward better futures for the wellbeing of people and the planet. Our solutions come to life through our global community of expert Steelcase dealers in approximately 790 locations, and other retail partners. For more information, visit Forward-Looking Statements This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, which involve risks and uncertainties. Any statements about HNI's, Steelcase's or the combined company's plans, objectives, expectations, strategies, beliefs, or future performance or events and any other statements to the extent they are not statements of historical fact are forward-looking statements. Words, phrases or expressions such as "anticipate," "believe," "could," "confident," "continue," "estimate," "expect," "forecast," "hope," "intend," "likely," "may," "might," "objective," "plan," "possible," "potential," "predict," "project", "target," "trend" and similar words, phrases or expressions are intended to identify forward looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are based on information available and assumptions made at the time the statements are made. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Forward-looking statements in this communication include, but are not limited to, statements about the benefits of the transaction between HNI and Steelcase (the "Transaction"), including future financial and operating results, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts. The following Transaction-related factors, among others, could cause actual results to differ materially from those expressed in or implied by forward-looking statements: the occurrence of any event, change, or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between HNI and Steelcase; the outcome of any legal proceedings that may be instituted against HNI or Steelcase; the possibility that the Transaction does not close when expected or at all because required regulatory, shareholder, or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that seeking or obtaining such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the risk that the benefits from the Transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, trade policy (including tariff levels), laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which HNI and Steelcase operate; any failure to promptly and effectively integrate the businesses of HNI and Steelcase; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; reputational risk and potential adverse reactions of HNI's or Steelcase's customers, employees or other business partners, including those resulting from the announcement, pendency or completion of the Transaction; the dilution caused by HNI's issuance of additional shares of its capital stock in connection with the Transaction; and the diversion of management's attention and time to the Transaction from ongoing business operations and opportunities. Additional important factors relating to Steelcase that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, competitive and general economic conditions domestically and internationally; acts of terrorism, war, governmental action, natural disasters, pandemics and other Force Majeure events; cyberattacks; changes in the legal and regulatory environment; changes in raw material, commodity and other input costs; currency fluctuations; changes in customer demand; and the other risks and contingencies detailed in Steelcase's most recent Annual Report on Form 10-K and its other filings with the U.S. Securities and Exchange Commission (the "SEC"). Additional important factors relating to HNI that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, HNI's ultimate realization of the anticipated benefits of the acquisition of Kimball International; disruptions in the global supply chain; the effects of prolonged periods of inflation and rising interest rates; labor shortages; the levels of office furniture needs and housing starts; overall demand for HNI's products; general economic and market conditions in the United States and internationally; industry and competitive conditions; the consolidation and concentration of HNI's customers; HNI's reliance on its network of independent dealers; change in trade policy, including with respect to tariff levels; changes in raw material, component, or commodity pricing; market acceptance and demand for HNI's new products; changing legal, regulatory, environmental, and healthcare conditions; the risks associated with international operations; the potential impact of product defects; the various restrictions on HNI's financing activities; an inability to protect HNI's intellectual property; cybersecurity threats, including those posed by potential ransomware attacks; impacts of tax legislation; and force majeure events outside HNI's control, including those that may result from the effects of climate change, a description of which risks and uncertainties and additional risks and uncertainties can be found in HNI's most recent Annual Report on Form 10-K and its other filings with the SEC. These factors are not necessarily all of the factors that could cause HNI's, Steelcase's or the combined company's actual results, performance, or achievements to differ materially from those expressed in or implied by any forward-looking statements. Other unknown or unpredictable factors also could harm HNI's, Steelcase's or the combined company's results. All forward-looking statements attributable to HNI, Steelcase, or the combined company, or persons acting on HNI's or Steelcase's behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and HNI and Steelcase do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If HNI or Steelcase updates one or more forward-looking statements, no inference should be drawn that HNI or Steelcase will make additional updates with respect to those or other forward-looking statements. Further information regarding HNI, Steelcase and factors that could affect the forward-looking statements contained herein can be found in HNI's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its other filings with the SEC, and in Steelcase's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. No Offer or Solicitation This communication is not an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Important Information and Where to Find It In connection with the Transaction, HNI will file with the SEC a Registration Statement on Form S-4 to register the shares of HNI common stock to be issued in connection with the Transaction. The Registration Statement will include a joint proxy statement of HNI and Steelcase that also constitutes a prospectus of HNI. The definitive joint proxy statement/prospectus will be sent to the shareholders of each of HNI and Steelcase. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE JOINT PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION REGARDING HNI, STEELCASE, THE TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by HNI or Steelcase through the website maintained by the SEC at or from HNI at its website, or from Steelcase at its website, (information included on or accessible through either of HNI's or Steelcase's website is not incorporated by reference into this communication). Participants in the Solicitation HNI, Steelcase, their respective directors and certain of their respective executive officers may be deemed to be participants in the solicitation of proxies in connection with the Transaction under the rules of the SEC. Information about the interests of the directors and executive officers of HNI and Steelcase and other persons who may be deemed to be participants in the solicitation of proxies in connection with the Transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus related to the Transaction, which will be filed with the SEC. Information about the directors and executive officers of HNI and their ownership of HNI common stock is set forth in the definitive proxy statement for HNI's 2025 Annual Meeting of Shareholders, filed with the SEC on March 11, 2025; in Table I (Information about our Executive Officers) at the end of Part I of HNI's Annual Report on Form 10 K for the fiscal year ended December 28, 2024, filed with the SEC on February 25, 2025; in HNI's Current Report on Form 8 K filed with the SEC on June 20, 2025; in the Form 3 and Form 4 statements of beneficial ownership and statements of changes in beneficial ownership filed with the SEC by HNI's directors and executive officers; and in other documents filed by HNI with the SEC. Information about the directors and executive officers of Steelcase and their ownership of Steelcase common stock can be found in Steelcase's definitive proxy statement in connection with its 2025 Annual Meeting of Shareholders, filed with the SEC on May 28, 2025; under the heading "Supplementary Item. Information About Our Executive Officers" in Steelcase's Annual Report on Form 10 K for the fiscal year ended February 28, 2025, filed with the SEC on April 18, 2025; in Steelcase's Amendment No. 1 to Current Report on Form 8-K/A filed with the SEC on July 11, 2025; in the Form 3 and Form 4 statements of beneficial ownership and statements of changes in beneficial ownership filed with the SEC by Steelcase's directors and executive officers; and in other documents filed by Steelcase with the SEC. Free copies of the documents referenced in this paragraph may be obtained as described above under the heading "Important Information and Where to Find It." ____________________ 1 Assumes transaction close at 12/31/2025 with $21 million of net debt; equity consideration is at time of announcement 2 TTM as of 05/30/2025 3 Includes EBITDA add-backs, which encompass two-year look-forward run-rate synergies, as defined within the credit agreement View source version on Contacts HNI Corporation Investors Vincent P. BergerExecutive Vice President and Chief Financial Officer(563) 272-7400 Matthew S. McCallVice President, Investor Relations and Corporate Development(563) 275-8898 Media Lauren Odell / Felipe UcrósGladstone Place Partnershni@ (212) 230-5930 Steelcase Inc. Investors Mike O'MearaInvestor Relationsir@ Media Brodie BertrandCorporate Communicationspr@ Andi Rose / Mahmoud SiddigJoele Frank, Wilkinson Brimmer Katcherarose@ / msiddig@ (212) 355-4449 Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Business Wire
04-08-2025
- Business
- Business Wire
HNI Corporation to Acquire Steelcase Inc.
MUSCATINE, Iowa & GRAND RAPIDS, Mich.--(BUSINESS WIRE)--HNI Corporation (NYSE: HNI) and Steelcase Inc. (NYSE: SCS) today announced that they have entered into a definitive agreement under which HNI will acquire Steelcase in a cash and stock transaction, with a total consideration of approximately $2.2 billion to Steelcase common shareholders. Under the terms of the agreement, Steelcase shareholders will receive $7.20 in cash and 0.2192 shares of HNI common stock for each share of Steelcase they own. The implied per share purchase price of $18.30 is based on HNI's closing share price of $50.62 on Friday, August 1, 2025, reflecting a valuation multiple at transaction close 1 for Steelcase of approximately 5.8x TTM 2 Adjusted EBITDA, inclusive of run-rate cost synergies of $120 million. Upon closing, HNI shareholders will own approximately 64% and Steelcase shareholders will own approximately 36% of the combined company. 'This acquisition brings together two respected companies with complementary strengths and represents an exciting milestone in HNI's growth journey,' said Jeffrey Lorenger, HNI's Chairman, President, and Chief Executive Officer. 'We have long admired Steelcase for its insight-led approach, which has helped shape our industry for decades. With the Steelcase portfolio of brands and as in-office work trends accelerate, we will be even better positioned to meet the evolving needs of the workplace, enhance dealer and customer relationships, unlock new opportunities for growth, and create compelling value for the combined company's shareholders.' 'Joining with HNI is a bold step that marks the next era for Steelcase, our customers, dealers, and employees,' said Sara Armbruster, President and Chief Executive Officer of Steelcase. 'Together, we will be positioned to redefine what's possible in the world of work, workers, and workplaces. Like Steelcase, HNI is an organization that leads with purpose, shares similar values, and puts the customer at the center of everything they do. I'm excited to see this combination shape our industry.' Compelling Strategic Benefits Combines Complementary Portfolios and Dealer Networks to Enhance Customer Reach: HNI's and Steelcase's geographic footprints and dealer networks are highly complementary, which bolsters the combined company's ability to serve more customers across diverse industry segments, including small and medium business, large corporate, healthcare, education, and hospitality customers. The companies have the industry's most respected and widely recognized brands, allowing the combined company to better support an expanded customer base and capture growth opportunities from industry tailwinds. Brings Together World-Class Capabilities: Uniting a strong innovation engine with operational excellence, the combined organization will accelerate delivery of more advanced solutions to customers, while increasing value for shareholders. Strong Financial Profile: The combined company will have pro forma annual revenue of approximately $5.8 billion, pro forma Adjusted EBITDA of approximately $745 million, and 2.1x net leverage. 3 These metrics are based on each company's respective last reported 12-month results and are inclusive of annual run-rate synergies. Net leverage is expected to return to pre-acquisition levels within 18-24 months. Highly Synergistic Combination: With recent experience in M&A execution and a disciplined integration approach, HNI's proven ability to successfully combine core capabilities and deliver cost synergies will maximize the new organization's future success. Annual run-rate synergies are expected to total $120 million when fully mature. The company projects the combination will be highly accretive to non-GAAP earnings per share beginning in 2027. Accelerates Strategic Framework: The acquisition is fully aligned with HNI's strategic framework focused on driving long-term profitable growth. With an enhanced financial profile, the new company will also be better positioned to accelerate and increase investments in long-term operational enhancements, digital transformation, and customer-centric buying experiences. HNI and Steelcase share a deep commitment to respecting people, protecting the planet, operating with excellence, and acting with integrity. As a stronger and more diversified organization, the combined company will bring together the strengths of both HNI and Steelcase to create new career growth opportunities for team members, deliver more value for customers, and further support and invest in the communities where they operate. Following the close of the transaction, the combined company will continue to be led by Jeffrey Lorenger, HNI's Chairman, President, and Chief Executive Officer. HNI will continue to operate its corporate headquarters in Muscatine, Iowa, and Steelcase will maintain its headquarters in Grand Rapids, Michigan. HNI will maintain the Steelcase brand following the transaction's close. In addition, post-closing, HNI's Board of Directors will expand from 10 directors to 12, to include two of Steelcase's current independent board members. Approvals, Financing, and Timing to Close The transaction, which is expected to close by the end of calendar year 2025, is subject to approval by HNI and Steelcase shareholders, the receipt of required regulatory clearances, and the satisfaction of other customary closing conditions. Certain shareholders of Steelcase have entered into a voting agreement to vote in favor of the transaction at the special meeting of Steelcase shareholders to be held in connection with the transaction. In support of the transaction, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A. have executed a commitment letter to provide committed financing to HNI, subject to the terms and conditions therein. Advisors J.P. Morgan Securities LLC is serving as exclusive financial advisor to HNI, and Davis Polk & Wardwell LLP is serving as legal counsel. Goldman Sachs & Co. LLC and BofA Securities are serving as financial advisors to Steelcase, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel. Conference Call, Webcast and Presentation HNI and Steelcase will hold a conference call to discuss the transaction today, August 4, 2025 at 8:30 a.m. Eastern Time. To listen, call (855) 761-5600 and use conference ID number 7006893. Access to a live audio webcast and slide presentation will be available on the Events & Presentations page of the Investor Relations section of HNI Corporation's website or at the following link: [ About HNI Corporation HNI Corporation (NYSE: HNI) has been improving where people live, work, and gather for more than 75 years. HNI is a manufacturer of workplace furnishings and residential building products, operating under two segments. The Workplace Furnishings segment is a leading global designer and provider of commercial furnishings, going to market under multiple unique brands. The Residential Building Products segment is the nation's leading manufacturer and marketer of hearth products, which include a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. More information can be found on the Corporation's website at About Steelcase Steelcase (NYSE: SCS) is a global design and thought leader in the world of work. Our purpose is to help the world work better. Along with more than 30 creative and technology partner brands, we research, design and manufacture furnishings and solutions for many of the places where work happens — including offices, homes, and learning and health environments. Together with our 11,300 employees, we're working toward better futures for the wellbeing of people and the planet. Our solutions come to life through our global community of expert Steelcase dealers in approximately 790 locations, and other retail partners. For more information, visit Forward-Looking Statements This communication contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, which involve risks and uncertainties. Any statements about HNI's, Steelcase's or the combined company's plans, objectives, expectations, strategies, beliefs, or future performance or events and any other statements to the extent they are not statements of historical fact are forward-looking statements. Words, phrases or expressions such as 'anticipate,' 'believe,' 'could,' 'confident,' 'continue,' 'estimate,' 'expect,' 'forecast,' 'hope,' 'intend,' 'likely,' 'may,' 'might,' 'objective,' 'plan,' 'possible,' 'potential,' 'predict,' 'project', 'target,' 'trend' and similar words, phrases or expressions are intended to identify forward looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are based on information available and assumptions made at the time the statements are made. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Forward-looking statements in this communication include, but are not limited to, statements about the benefits of the transaction between HNI and Steelcase (the 'Transaction'), including future financial and operating results, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts. The following Transaction-related factors, among others, could cause actual results to differ materially from those expressed in or implied by forward-looking statements: the occurrence of any event, change, or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between HNI and Steelcase; the outcome of any legal proceedings that may be instituted against HNI or Steelcase; the possibility that the Transaction does not close when expected or at all because required regulatory, shareholder, or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that seeking or obtaining such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the risk that the benefits from the Transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, trade policy (including tariff levels), laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which HNI and Steelcase operate; any failure to promptly and effectively integrate the businesses of HNI and Steelcase; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; reputational risk and potential adverse reactions of HNI's or Steelcase's customers, employees or other business partners, including those resulting from the announcement, pendency or completion of the Transaction; the dilution caused by HNI's issuance of additional shares of its capital stock in connection with the Transaction; and the diversion of management's attention and time to the Transaction from ongoing business operations and opportunities. Additional important factors relating to Steelcase that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, competitive and general economic conditions domestically and internationally; acts of terrorism, war, governmental action, natural disasters, pandemics and other Force Majeure events; cyberattacks; changes in the legal and regulatory environment; changes in raw material, commodity and other input costs; currency fluctuations; changes in customer demand; and the other risks and contingencies detailed in Steelcase's most recent Annual Report on Form 10-K and its other filings with the U.S. Securities and Exchange Commission (the 'SEC'). Additional important factors relating to HNI that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, HNI's ultimate realization of the anticipated benefits of the acquisition of Kimball International; disruptions in the global supply chain; the effects of prolonged periods of inflation and rising interest rates; labor shortages; the levels of office furniture needs and housing starts; overall demand for HNI's products; general economic and market conditions in the United States and internationally; industry and competitive conditions; the consolidation and concentration of HNI's customers; HNI's reliance on its network of independent dealers; change in trade policy, including with respect to tariff levels; changes in raw material, component, or commodity pricing; market acceptance and demand for HNI's new products; changing legal, regulatory, environmental, and healthcare conditions; the risks associated with international operations; the potential impact of product defects; the various restrictions on HNI's financing activities; an inability to protect HNI's intellectual property; cybersecurity threats, including those posed by potential ransomware attacks; impacts of tax legislation; and force majeure events outside HNI's control, including those that may result from the effects of climate change, a description of which risks and uncertainties and additional risks and uncertainties can be found in HNI's most recent Annual Report on Form 10-K and its other filings with the SEC. These factors are not necessarily all of the factors that could cause HNI's, Steelcase's or the combined company's actual results, performance, or achievements to differ materially from those expressed in or implied by any forward-looking statements. Other unknown or unpredictable factors also could harm HNI's, Steelcase's or the combined company's results. All forward-looking statements attributable to HNI, Steelcase, or the combined company, or persons acting on HNI's or Steelcase's behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made, and HNI and Steelcase do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If HNI or Steelcase updates one or more forward-looking statements, no inference should be drawn that HNI or Steelcase will make additional updates with respect to those or other forward-looking statements. Further information regarding HNI, Steelcase and factors that could affect the forward-looking statements contained herein can be found in HNI's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its other filings with the SEC, and in Steelcase's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. No Offer or Solicitation This communication is not an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Important Information and Where to Find It In connection with the Transaction, HNI will file with the SEC a Registration Statement on Form S-4 to register the shares of HNI common stock to be issued in connection with the Transaction. The Registration Statement will include a joint proxy statement of HNI and Steelcase that also constitutes a prospectus of HNI. The definitive joint proxy statement/prospectus will be sent to the shareholders of each of HNI and Steelcase. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY REFERENCE INTO THE JOINT PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION REGARDING HNI, STEELCASE, THE TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by HNI or Steelcase through the website maintained by the SEC at or from HNI at its website, or from Steelcase at its website, (information included on or accessible through either of HNI's or Steelcase's website is not incorporated by reference into this communication). Participants in the Solicitation HNI, Steelcase, their respective directors and certain of their respective executive officers may be deemed to be participants in the solicitation of proxies in connection with the Transaction under the rules of the SEC. Information about the interests of the directors and executive officers of HNI and Steelcase and other persons who may be deemed to be participants in the solicitation of proxies in connection with the Transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus related to the Transaction, which will be filed with the SEC. Information about the directors and executive officers of HNI and their ownership of HNI common stock is set forth in the definitive proxy statement for HNI's 2025 Annual Meeting of Shareholders, filed with the SEC on March 11, 2025; in Table I (Information about our Executive Officers) at the end of Part I of HNI's Annual Report on Form 10 K for the fiscal year ended December 28, 2024, filed with the SEC on February 25, 2025; in HNI's Current Report on Form 8 K filed with the SEC on June 20, 2025; in the Form 3 and Form 4 statements of beneficial ownership and statements of changes in beneficial ownership filed with the SEC by HNI's directors and executive officers; and in other documents filed by HNI with the SEC. Information about the directors and executive officers of Steelcase and their ownership of Steelcase common stock can be found in Steelcase's definitive proxy statement in connection with its 2025 Annual Meeting of Shareholders, filed with the SEC on May 28, 2025; under the heading 'Supplementary Item. Information About Our Executive Officers' in Steelcase's Annual Report on Form 10 K for the fiscal year ended February 28, 2025, filed with the SEC on April 18, 2025; in Steelcase's Amendment No. 1 to Current Report on Form 8-K/A filed with the SEC on July 11, 2025; in the Form 3 and Form 4 statements of beneficial ownership and statements of changes in beneficial ownership filed with the SEC by Steelcase's directors and executive officers; and in other documents filed by Steelcase with the SEC. Free copies of the documents referenced in this paragraph may be obtained as described above under the heading 'Important Information and Where to Find It.'
Yahoo
26-06-2025
- Business
- Yahoo
SCS Q2 Deep Dive: Large Corporate Demand Offsets Education and International Weaknesses
Office furniture manufacturer Steelcase (NYSE:SCS) beat Wall Street's revenue expectations in Q2 CY2025, with sales up 7.1% year on year to $779 million. The company expects next quarter's revenue to be around $875 million, close to analysts' estimates. Its non-GAAP profit of $0.20 per share was 50% above analysts' consensus estimates. Is now the time to buy SCS? Find out in our full research report (it's free). Revenue: $779 million vs analyst estimates of $759.9 million (7.1% year-on-year growth, 2.5% beat) Adjusted EPS: $0.20 vs analyst estimates of $0.13 (50% beat) Adjusted EBITDA: $64.8 million vs analyst estimates of $52.33 million (8.3% margin, 23.8% beat) Revenue Guidance for Q3 CY2025 is $875 million at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q3 CY2025 is $0.38 at the midpoint, below analyst estimates of $0.41 Operating Margin: 4.5%, up from 3.3% in the same quarter last year Market Capitalization: $1.22 billion Steelcase's second quarter was shaped by robust demand from large corporate customers, particularly in the Americas, which offset challenges in the education and government sectors as well as ongoing international softness. Management credited the company's 7% year-on-year revenue growth to strong order activity from technology and financial services clients, along with the successful launch of new workplace solutions. CEO Sara Armbruster emphasized, "Our largest clients are seeking our help to reshape space to support collaboration and connection," highlighting the evolving needs driving recent project wins. However, the company faced headwinds from reduced education sector spending, influenced by changes in federal funding policies, and continued macroeconomic pressures in Germany and France. Looking ahead, Steelcase's guidance reflects both confidence in continued corporate sector momentum and caution about lingering headwinds. Management expects growth from large organizations to persist, supported by recent product launches tailored to hybrid work and workplace transformation. However, CFO Dave Sylvester noted that ongoing tariff costs, uncertainty around federal policies affecting education spending, and restructuring efforts in Europe may limit profitability improvements in the near term. As Armbruster stated, Steelcase remains focused on executing its strategy while navigating a 'dynamic environment of evolving tariff and trade policies.' Management identified strong order growth from large corporate clients, successful product launches for hybrid workspaces, and targeted cost reduction initiatives as central to this quarter's performance. Large corporate demand: Orders from major technology and financial services clients outpaced expectations, driven by companies investing in workplace transformation for hybrid and collaborative work models. Armbruster described these projects as a direct response to evolving needs around 'collaboration and privacy.' Education and government declines: The education sector faced notable order reductions due to the expiration of federal ESSER (Elementary and Secondary School Emergency Relief) funds and broader uncertainty in future public funding, leading to budget adjustments and delayed projects in K-12 districts. International segment challenges: Germany and France continued to experience weak demand, particularly from small and midsized businesses impacted by economic softness. Management has initiated restructuring efforts, including workforce reductions and negotiations with European unions, aiming to restore profitability in these markets. Product innovation focus: Steelcase unveiled new offerings such as the expanded Ocular collection and Jean Nouvel Seating Collection at Design Days in Chicago, targeting needs for hybrid collaboration and flexible office environments. These launches generated strong customer feedback and contributed to recent project wins. Cost and margin management: The company achieved its twelfth consecutive quarter of gross margin expansion, attributed to operational efficiencies and cost controls. Tariff and inflation pressures were partially offset by pricing actions and ongoing process improvements. Steelcase expects future results to hinge on sustained corporate demand, effective cost management, and the impact of tariffs and funding policy shifts. Corporate sector resilience: Management anticipates continued strength from large companies as they invest in updating office spaces for hybrid work, with recent feedback from events like Design Days suggesting ongoing demand for collaborative and flexible workspace solutions. Education and government uncertainty: The outlook for education-related sales remains cautious due to the phase-out of federal funding and shifting budget priorities, which could dampen seasonal revenue peaks typically seen in the summer months. International restructuring and cost control: Steelcase is executing cost-saving measures in Europe, including workforce reductions and facility consolidations, to adapt to weak demand environments. Management believes these actions are necessary to restore profitability even if volumes remain subdued. In coming quarters, the StockStory team will be monitoring (1) the pace of large corporate office space investments and their contribution to order growth, (2) the effectiveness of cost-cutting and restructuring measures in Europe, and (3) stabilization or further declines in education sector demand as public funding policies shift. Progress on new product adoption and success in offsetting tariff and inflation impacts will also be important markers for Steelcase's continued recovery. Steelcase currently trades at $10.51, down from $10.63 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
26-06-2025
- Business
- Yahoo
Steelcase's (NYSE:SCS) Q2: Beats On Revenue But Stock Drops
Office furniture manufacturer Steelcase (NYSE:SCS) reported Q2 CY2025 results topping the market's revenue expectations , with sales up 7.1% year on year to $779 million. The company expects next quarter's revenue to be around $875 million, close to analysts' estimates. Its non-GAAP profit of $0.20 per share was 50% above analysts' consensus estimates. Is now the time to buy Steelcase? Find out in our full research report. Revenue: $779 million vs analyst estimates of $759.9 million (7.1% year-on-year growth, 2.5% beat) Adjusted EPS: $0.20 vs analyst estimates of $0.13 (50% beat) Adjusted EBITDA: $64.8 million vs analyst estimates of $52.33 million (8.3% margin, 23.8% beat) Revenue Guidance for Q3 CY2025 is $875 million at the midpoint, roughly in line with what analysts were expecting Adjusted EPS guidance for Q3 CY2025 is $0.38 at the midpoint, below analyst estimates of $0.41 Operating Margin: 3.3%, in line with the same quarter last year Free Cash Flow was -$155.1 million compared to -$71.2 million in the same quarter last year Market Capitalization: $1.24 billion 'Our first quarter results were a great start to the year,' said Sara Armbruster, president and CEO. Founded in 1912 when metal office furniture was replacing wooden alternatives, Steelcase (NYSE:SCS) is a global office furniture manufacturer that designs and produces workplace solutions including desks, chairs, architectural products, and services. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. With $3.22 billion in revenue over the past 12 months, Steelcase is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. As you can see below, Steelcase struggled to increase demand as its $3.22 billion of sales for the trailing 12 months was close to its revenue five years ago. This shows demand was soft, a poor baseline for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Just like its five-year trend, Steelcase's revenue over the last two years was flat, suggesting it is in a slump. This quarter, Steelcase reported year-on-year revenue growth of 7.1%, and its $779 million of revenue exceeded Wall Street's estimates by 2.5%. Company management is currently guiding for a 2.2% year-on-year increase in sales next quarter. We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Steelcase's operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 3.1% over the last five years. This profitability was lousy for a business services business and caused by its suboptimal cost structure. Analyzing the trend in its profitability, Steelcase's operating margin might fluctuated slightly but has generally stayed the same over the last five years, meaning it will take a fundamental shift in the business model to change. In Q2, Steelcase generated an operating margin profit margin of 3.3%, in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Steelcase's EPS was flat over the last five years, just like its revenue. This performance was underwhelming across the board. In Q2, Steelcase reported EPS at $0.20, up from $0.16 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Steelcase's full-year EPS of $1.15 to shrink by 4.3%. We were impressed by how significantly Steelcase blew past analysts' EPS and EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street's estimates. On the other hand, its EPS guidance for next quarter missed. Zooming out, we think this was a mixed quarter, especially because competitor MillerKnoll guided above. The market seemed to be hoping for more, and the stock traded down 6% to $9.99 immediately following the results. Is Steelcase an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
