SCS - Earnings call transcript Q4 2020

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Operator

Good day, everyone, and welcome to Steelcase's Fourth Quarter and Fiscal 2020 Conference Call.

As a reminder, today's call is being recorded.

For opening remarks and introductions, I would like to turn the conference over to Mr. Mike O'Meara, Director of Investor Relations, and Financial Planning and Analysis.

Michael O'Meara

Thank you, Kevin. everyone. morning, Good joining quarter for the of recap Thank fiscal us XXXX fourth and financial our you for results. and our With me Executive Vice Sylvester, Chief President our Officer. President Senior today are Officer; Jim and Keane, Chief Financial and Dave

later of crossed posted copyrighted Our wires accessible Inc. production today. conference is of yesterday, This to this and replay the being fourth Steelcase website. release, webcast, our this webcast is be earnings call quarter ir.steelcase.com webcast which will on is A a

may measures today non-GAAP associated measures statement text release. the regarding into discussion release, forward-looking to Our include the Safe we included our earnings financial in of the our of risks and and reference references this to statements are Reconciliations conference most the in by Harbor are with use call forward-looking and statements. the comparable included GAAP details incorporating

we Following analysts. and our to prepared investors remarks, questions from will respond

to Executive the Chief our I'll and call now over turn President Keane. Jim Officer,

James Keane

crisis. good the want do call have this and acknowledge everyone. all, suffering all that, to this before weather world. to worst of this But crisis, a is about lifetimes. I financial first probably our health People Mike, are I is we time, by and to are that human economics results to recognizing, the is the prepare doing our we extraordinary in around the morning morning, Thanks, things this an our start

else about might quickly. truly a recover affected member worried hope or safe. I everyone you this. stays I is of so by be hope And some if And personally friend who And family they

in first, share the response our to I'll some I COVID-XX financial highlights few doing coronavirus a In what in we're but minutes, to results. seeing recent provide regarding want outbreak, business Okay. our and

in in against terms expectations It years year our a our was Our operating and income. we progress best fiscal of made year capped than off quarter results were nearly strategic great our growth XXXX, better a and XX where fourth revenue initiatives.

full earnings range to ahead in The Our of per growth our at $X.XX that year growth of $X.XX quarter brought $X.XX well targeted year. we adjusted XX% beginning XX%. the to is share the per of the the fourth share

thank large the PolyVision strategically of not of sell current enables customer further focus recognized a under PolyVision intent and operate certain our lead quarter, to and and to that the employees the we And being company. on Steelcase of will strategies, continue to so letting level, PolyVision for gain of ownership. want divestiture, but continued were provide strengthens in us of the with our the while part focus customers. wish now to I all PolyVision Our of products are years, strengthens a also It which resources more the divestiture our growth although their success. their new also divestiture liquidity greater them to many

organic up Our the prior basis, quarter, revenue XX%. stack against year. against a XX% organic our X-year grown previous year the which has revenue was On declined slightly

and organically, how February. we it's performed. so QX year. global, Overall and growth last So X-year it’s our XX% and That's good through X% APAC grew of top very top-line about a feel X% stack, orders in includes

margin gain, in quarter in part were the but year, to We prior strong had compared great still a quarter. EMEA. improved basis PolyVision we operating orders our because very more So points, the importantly, through our XXX to due by the

million over a working benefits. close we taste opportunities $X this we've of this the is delivered business. which of number EMEA pleased made dedicated quarter you I'm $X versus area every our business quarter, to of told operating year. we last a the teams very on have of I with in and a that million income across progress before, got improvement

million our $XX of nearly were as delivered of all EMEA X.X% year, very quarter starting results. really revenue. a that's income, of because fourth a full or actions and And strong operating the percentage to again, as For together showing come

In to help quarter our driven the the talent. bring industry growth by is solutions the X% their compete our of to This reported months ability growth competitive Americas, rate for innovative customers to three rate order workplace January. order growth last surpasses a the X% for modernize over through

our the and As development, able acquisitions, strengthen to we to of product than partnerships to grow we market. solutions continued were new portfolio faster

to Our our they this revenues over acquisitions by overall year. growth contribute collectively XX% grew as continue fiscal to their

the We new acquired are customers. address portfolio, with and for broaden acquisitions. customers’ strategies us pleased with our ways the Together execution synergy helps entirely the needs can the it revenue businesses Steelcase our serve core also against the we

it was and and are executing The that year, really results strategies quarter. really very a good our we're strategies So good show a well. those working,

problems Our the facing. to customers see our relevant solutions they're as

the thing Now the state orders. at world. COVID-XX I'm U.S., actions we the to our for Those like potential economic really corporation is preparing is taken governments national stakeholders on support of we're and efforts going for to curve. health and Steelcase the and purpose say the switch in phase business next times all of to And in those to to necessary the doing the The totally crisis. what experts are right And is being this. local, we're those do impact by the prepare here governments for things rest are what doing flatten that the our of the of

Okay.

us started for COVID-XX So China. in

lots of So a and we factory customers. have

And already so quite in with the we January February. familiar were and crisis

of normal for adopted had and ran it distancing reopened, protocols weeks. Our capacity our way to we up closed closed a New gradually at when working partial capacity, Year factory towards last social the for the And few and couple extra weeks. in Chinese stay

from Our the office office, local space social now of and version distancing. people in practicing they're back worked also mostly the home,

February, We saw and in to closed when customers own some offices shipment delays do had unable were installations. their

cancellations, term order longer nor not project cancellations. many but delays saw we Importantly,

installed And of economy our to will said, we to is might will Chinese I'm quote not back normal Now it than later we to as new China. think perhaps as the the year. I be the ship it's what's like we you awarded That we're some rest not a starting world in think. to while for don't know continue we to business, there yet, those and interesting overall business but in was. I'm delay. new continue be the had will orders of saying sure that be weaker be negative the we're what experience

chain, low the saw our with South hit in nothing those along Korea have but Italy hardest some but We was significant. probably we next impacts to relatively supply sales countries. area initially, modest

appear a rest the was and we we EMEA to and the from began China experience virus then elsewhere to and scale Still, already learnt became in global. starting the appear in spread knew what had our lot APAC, As to the in of and Americas, expect.

as we at Sara response my led information, another team approached teams Sylvester share it principles, team. the using is to managed It's local of and beginning this, ahead transferred able central actions multiple we've rely of where an Sara we organized a so She a how quickly leaders really approach. crisis working needed. direct number Armbruster, as on team set particularly pleased of been Dave and and been well. her and decisions ink-level establish dedicated as team she really the year-end reports. coordinate to workflows to it. and a of specific how And overall that role we've stay I'm local level, At make needed. large with

also the nothing and role I'm team practices and throughout last on to working sharing seeing connecting to with COVID-XX Task with We're help connected it day on own through the few weeks, Sara workflows. certain companies almost best the time. and Business the I'm For here with my Michigan. else. similar other I've help other with companies Roundtable also in from and learning for been our the decisions first Force, others, we're groups who’re

our get We're days, ready administrative safe between patients. for products next. customers to what's workers a In and our create co-designed delivered barriers just few healthcare have also furniture-like potential and teams helping

on Within company, two objectives. we've been the focused

open taken factory around where voluntary policy, our world We've all We've actions safe. social to example. made to while workers for adopted the restrict a people First, distancing, work-from-home installed screens and travel also protect sure We've [adapt] needed. are for protocols action been sick long for worked. when people or as people being have we it's as who We've sick keeping implemented are can. our are in And or when as tested. exposed is offices to someone

As either aware that of am of presumed today XX,XXX positive. I less across cases employees, confirmed five than or are

taking our protect And to business. by starts of that have make customers. care sure we Second, we

has also of supply upstream Our keep terrific a coming our a disruption. strong very operations through activity people job, beginning chains of and the relatively remained and our have teams And adapting projects Orders upstream despite new done around March. commitments lot our busy. kept keeping

factory, a customer operations do we to take when are finding particular when not we could cash forced are about can why course, there's we not suspend Of a and their a see Or temporary can in those much situations. because products. in do. in offices shipment our And closed, or significant we're a receipts. schools but we ourselves increasingly, revenues much there's This is those drop cannot

our conserving involves liquidity our We've our maximizing done protecting and business also For both. that reason, capital.

will credit back reducing the capital, our just $XXX about taking with members $XXX reducing on fully base on year-end years, to of started reducing pay me we discretionary cutting and of we operating We team related liquidity we're their decided salary, that really by To And highest conserve also more people ended expenditures plan to temporarily in a with million $X XX XX%. the million. starts We're spending. year draw and still expenses, over over executive capital our that. senior and all Dave talk facility. temporarily

to plant shorter other temporary weeks, temporarily earnings our of associated as pay reducing reductions release. and temporary through reduced work layoffs Board closures, cash retainer and Our like also We're with in actions described their Directors people through costs zero. significant

as continue done a countries take vary this terminations. and laws. and We development that of the we situation suppliers, and haven't quite other and relationships protect across we initiatives measures to temporary temporary all employees, because is this on well. specific want product been customers our have local working purposeful, was The and see to actions with lot and a What so work

have to of want that and we a together. great people, team keep We team

But quickly. We position modeled actions we're want use cash. in to to to put significant We taken in production. Those factories able bold actions some we've last. to position, weeks, and full serve We've quarters. modeled our we how to long to ready we've ourselves we've a when in expected we're and very back competitive strong, a and are add know where will modeled going customers it's our bring months, strong to very don't emerge a up of reduction

the decisions we're about continue made will as good and this. But needed. we've how I We to adapt very feel managing

the shareholders and a given the same the objective or reduction. that be at significant consistent at we of just with at of $X.XX uncertainty Directors it's recognition guidance providing We're dividend of declared Board that's The strong per to Yesterday, all capital, today, year should any time, too just EPS reflects not quarter delivered, share. many meant dividend a declared revenue of our fact conserve in there's any the ahead. participate And that. But we also time to what's the unknowns.

that will to information provide Dave? I you. and backlog information lots other next Dave helpful hope be about will of So orders,

David Sylvester

seeing some morning, remarks Thank comments quarter to impact COVID-XX. will My related comments developing you, the fourth the good to our and plus we're including today include Jim, details year full business about from currently, what some related and results, in everyone.

was As adjusted fourth we exceeded per And than December, our the in end our million revenue $X.XX to of very $XX guidance. earnings estimates a top of quarter share had $X.XX. range strong by higher the Relative quarter. Jim mentioned, just million of provided estimated we $XXX the fourth

expected X% the decline owned contract EMEA and associated customer businesses. organic revenue strong For and than growth related business, services to in stronger with X% and our revenue, project were of our better including pricing price direct due Americas organic from favorable adjustments, migration we the in day-to-day and than estimated dealers several and benefits pricing, factors, list the

approximately estimates, below initial the by finished quarter our Pacific million. Asia the reduced $X of shipments in due China impacts of COVID-XX, to at which end the

able included variable to benefits from earnings million increasing had of transaction per $XX this on recognized tax the capital being against the expense net loss related back previously reported These the by share. of benefits carry of earnings PolyVision, $X.XX gains. net gain Our a related capital plus to sale effect compensation

and reviewed, the we I just compared lower we plus $X.XX, gross income For to exceeded of adjusted the earnings, estimates. had range favorable end top tax our our margins due by revenue strength to expense

worked current around For better have migrating gross lists, the margin, our expected to in than contributed sales realization clients to the world which price quarter. price more hard organizations the

inflation that XXXX. much fiscal well ahead recall for You'll of of pricing was

our nice periods labor addition, overhead the In of job operations February, and a costs January teams current direct quarter. during managing seasonally and did the slower

the was quarter compensation basis X.X% EMEA PolyVision better than expected to performance. should the segments, reduced variable expense the highlight related includes margin significant most And to Across of million the contributor operating by adjusted I for operating approximately margin their X.X% $X.X the divestiture, which earnings XXX points. our

during from plus reversal the recorded we some allowance recorded of quarter. loss against tax the net net Lastly, valuation operating UK, the in income tax a carry expense discreet other benefits benefited forwards

of or million $XX X%, compared basis, week little X% the a grew On year-over-year which an million declined the by driven from to very by in quarter, $XX strong we year. extra deeper Diving into shipments. a prior organic an revenue was comparisons, revenue

in of on organic the fiscal Americas decline example, For organic of in fourth XX% the quarter XXXX. growth the X% stacks top of

last QX strength which the the also the Thanksgiving was the first included in by holiday to from the the into of prior we shipment XXXX. QX of timing mentioned of year, quarter, week fiscal this the as Beyond fell the of the of fiscal impacted week last year-over-year comparison unfavorable compared timing impact year,

in the largest by organic category In to X% EMEA, Other driven of in customers. growth shipment driven by the delays was related our COVID-XX And the was decline China.

favorable of to expense, level the improvement debt. quarter of $X.XX lower revenue earnings, from pricing, offset week benefits benefits and initiatives, the the higher impact the by prior small the related commodity earnings compares adjusted improved the and our extra and costs tax margin gross cost in adjusted organic reduction higher of reflects decline The partially $X.XX of interest the year. in to comparison year-over-year of For costs, shipments,

flat, was in As of at rates despite and decline, February quarter XX%, posting with we in it approximately December relates XX% quarter plus growth X%. week. of strengthening the in in to the relatively orders in We in largely through these important to Pacific QX this in impact for the prior COVID-XX January which December January impact the the and grew trend was as and attribute was in comparison the X% adjusted achieved It's to China. down a Other XX%, and order where note February, X% a also being trend initial the extra growth quarter, the growth of strengthened Asia to of fourth coming January up that's that year year, X% weakening declined category the posting the February

million were was $XX by quarter We will the of Capital reaching Moving announced the quarter, million] quarter, cash the and dividend per improvement in through and $XXX returned the improvements to approximately the to represents strong million for dividend Yesterday, working year in the share. fourth and flow January. from full $X.XX of quarter, capital. million payment in The to we paid paid a shareholders April the [$XX in a in dividend in very million. $XX sheet, $XX flow $X.XXX reduction approximately balance $X earnings plus the be from year expenditures bringing operations prior growth a cash in the the fourth nearly the by which million. driven targeted exceeding cash was year-over-year strong quarter,

program in been first the But in place during we we X of that under for any shares repurchase has shares $XX.X quarter. now not million million completed. did repurchased approximately had We weeks the March, few the fourth XXbX

strong. of between position QX is and which of years. cash liquidity balances, more mentioned, at We $XXX level is COLI nearly end had than Jim our the in liquidity the liquidity million As of highest very our XX

we we We have facility, our last Remember, that issued XX-year accordion expanded renewed which $XXX and refinancing credit month, our feature. $XXX And million of fourth year, senior no million needs. quarter and totals XXXX. the notes near due and in were term repaid million in $XXX X-year of a last million global has $XXX notes

have perspective, Jim sharing and But plans. more first quarter, will additional the be in repurchases, we any a we profit in we reducing spending seasonal our funding disbursements employee annual and we plans and are fully for described share release. significantly bonus as including cash mentioned, not our do From the programs

result borrowing currently amount a the As and credit our to of new abundance caution out of uncertainty by the under to available an COVID-XX, our liquidity given spread related million. of the strengthen chose facility further or $XXX full we

$XX PolyVision the we We the the debt planned. proceeds had to of therefore retire retain not and from also decided million sale did we of full initially

to XX% before in variable and with discretionary with before activity and sales, items. compensation largely direct overall largely expenses, expense, approximately also contractor estimate of to our costs, and and our costs; from expense, XX% distribution labor temporary approximately travel operating We varies freight other of level compensation cost revenue, variable entertainment material, of XX% XX% varies business, labor, the of

our ROIC with level varies largely on a compensation given historical of metric. profitability, emphasis Variable our target as

variable these the summarized targeted And portion. toward employee our costs actions part our cost fixed smaller with in occupancy largest represent of costs. and structure, our rate the representing run costs, reducing Beyond Americas expenses a Jim much employee of other

But the $XXX we beginning higher place year. in due shelter million places. to significant to the or ahead COVID-XX visibility fiscal potential backlog while our the that share look will does not XXXX, year, the impact I than to estimate disruption portion related or the to at restrictions expect of the to outlook various for was approximately in a the we provide XX% As prior of delayed an quarter us quarter be

our our quarter represented As first XX% point, revenue. reference of a backlog beginning approximately last year,

higher was the our at weeks last year. than XX% of it we this the was revenue fiscal quarter, three point Through approximately estimate first

organic have patterns year. Our compared prior flat to been order the relatively

cancellations, projects have thus as in some requests pushed to shelter communities move have far these pause can customer timelines we We more seen a seen not and patterns of number requirements. been And significant some but project expected to place change to be have out.

energy new levels results. our also was price and of in might the vertical up XXXX oil could fiscal drop last the have market. mock on you customer recent And lastly, impact that down are visits our the a X% expect. of is The Approximately Americas versus year an as in in revenue consideration

Middle in can East, Our approximately XXXX. the and of the in Africa business Asia, by fiscal of EMEA oil represented price X% be markets impacted and also Central Russia our revenue

to Lastly, goods XX% plastics, X% Americas fuel is in linked approximately transportation carriers, for expenses. prices; fiscal of sold cost of and our XXXX example, to the petroleum

So in category impacted, could while this offset. demand provide some commodity be deflation could

I also year. you to financial next into some your models for data points take want other update provide to consideration as

Our per of in earnings fiscal of adjusted the share excludes XXXX quarter. fourth on gain $X.XX PolyVision the sale

additional taking quarter, consideration fourth week items in few However, additional tax and approximately highlighted had which effect non-recurring include in there $X.XX per share per our in compensation of which in that effects. related share. our $X.XX our the earnings into nature increasing the the They by earnings variable on positive effect income are a after year we releases, an that the estimated happened had earnings

discreet and some approximately increased geographic of XX% related from effective net our lowered favorable compensation expense. effective mix tax rate which $X.XX together Our earnings below per share, rate by tax ongoing of estimate business our of benefits, net benefited a variable and

divestiture fourth share the positive the approximate which year. PolyVision quarter, had per in have their deconsolidated the with fiscal on we $X.XX earnings in of And lastly, effect an results,

share your estimated per for building models, for that of So good $X.XX a the is in we year-over-year baseline fiscal XXXX. think earnings recurring purposes

points couple for a Lastly, data other fiscal modeling. XXXX your of

for term of estimate we And for range of for expect typically be to million effective I as But growing including to current tax this draw next recent we expense sales. lower initiatives levels canceling of interest said year, the continue the as expect approximate credit. the $XX or are earlier, year, delaying entire to longer line uncertainty. several $XXX will of rate to million our against the could a X.X% to relates We debt in approximate light assuming it year. as cash, of XX% fall we uses within capital of And year X% expenditures our

turn From back it I'll there, Jim. to

James Keane

Dave. various we Thanks, taking actions to believe for scenarios. are prepare necessary We're the

We response. management focused top through leaders one liquidity keeping Dave have our our entirely navigated strong. disruptions. a is COVID-XX my on successfully focused that has previous team managing And I've on of

to meet We in supply place have chains customer best that evaluating commitments. are our teams and how

an take longer to We the will being see. we towards opportunities the keeping while navigate term continue advantage to positioned of short-term, eye

the over I'll for operator there, to it questions. From turn

Operator

Instructions]. [Operator

Garner Our first question Benchmark Company. The with comes from Reuben

Reuben Garner

assumed Can of how you how at in process made. So these that into about that forward extent strong you was that moves went the that maybe I'll buys and shape the long you've you year. moves? coming would production financial start last would a a talk with off good that and the of that you of made long thought -- with already are a obviously little this made kind the you be very the kind down I go moves surprised

James Keane

Sure.

So bit that are ramped Asia, plants get Year experiences New China Again, that running down a we China paused The situation scenarios color plant the and was quite little lower a helped was -- we've temporarily it full saw in back from just it. The for shut than more in on then been caveat we up. extended, at knew and I'll the as then for planning China. various situation that when for our it Chinese what coming while. capacity

that scenarios our continued able minimize might imagined And plants Malaysia chain and is different. and meanwhile, Europe lot to were a we The make to America of in customer transitions completely to we be for our India disruption. run supply So unaffected.

all bigger we business. the the could the spread part same factories time, of shut It's our we it possible that these regions, As the factories shut same a in could much the virus down down EMEA in at Americas the all throughout time. possible obviously see at is of see

they if happen. know if really how don't going that's do, we long. for to know And don't We

that. of illustration one Just

shut factory it’s Malaysia the through Our was was about and today few end through mid-April. now be to extended March, -- announced weeks a ago been down just through it out of

So closures people to we are longer due that they any saying. happen last not as last realize these -- may orders, than government

the we have factories where manufacturing as imagine alternatives, could our we to multiple scenario not So considered products. we’re able

Now about of we typically. have a week goods finished

So to factory receipts factories if longer to as about was well. to a need like ship very are then to that Grand no goods able operate, a revenues zero and quickly fall we Rapids week finished continue for to cash fall after zero. could And

those are It's scenarios were we I will some move So we quickly well we that measures, are decisively. say knew are these temporary. But very of these but significant as the modeling. to why although and -- also very that wanted

weeks, a it’s to we're ready than adapt. it if so lasts longer if few last And that,

Reuben Garner

Great, that's very helpful.

monthly it how they’re on given an weekly to on so you a put temporary -- annualized -- how or And you that basis? much however in much they save want nature, on did

James Keane

question. I'll let that Dave fill

David Sylvester

pays to not numbers workforce. reductions or U.S. and in we're the and the manufacturing We're support that some provide then direct at hours around layoffs much fast. are that our this and so and Americas distribution, is Reuben, hourly today. This Yes, only labor significant point ready. so force The across folks across going salaried of moving involves just otherwise and not

tried costs. fixed and I We're the this our our color largest with of release we or at the comments, So costs and this And the and we're fact being numbers costs, last segment, implemented is in the in we just workforce specific And around you be summarized largest reducing hours. how changing. to Americas that XX-XX you Americas going just is portion some or point, ranges give not the know able employees fixed given the variable those. and and how to business employee within quickly to provide it our moving

Reuben Garner

totally I Yes. understand.

is And to of that's currently Americas, still mean shut down, you current the -- of offline? filed have? you So -- I what the your just are facilities? back percentage what guess you for Have percentage capacity hear potential -- you any in waiting are on for -- I you your any of production waivers those have if

James Keane

waivers about and to continue can talk the degree I'll so operate. the Yes, which at we

in own healthcare, But very and essential extent and we is is So to different, about is Michigan, human the has Michigan about to like in were operate state state clear for rules. to rule continue are serving -- every every allowed Michigan, rights. example, industries this its we protecting the

And so we're making in of specifics that but sure of principle we're order, the the the both order. in terms the also of honoring

to continuing do So products kinds do working provide co-design time we're able to as work. to continuing customers. with real getting well. To to then need they orders do have have specific we are to to We're actually to need we'll serve have -- be on the the to be designated And be those special we healthcare to customers. able paper of and able that for employees they designations and we And key just that. named this crisis as are we a continue healthcare be supplier projects by those these

to that we -- I'll by that's affected But are again for an has let will imagine we we in are this? the do different if continuing it be that that the of and how different done we Dave of capacity and basically So country. it have percentage see estimate works. parts he

David Sylvester

one years we you you Alabama, remind in -- back I'll when But to facilities you a that mean disclosures, from that you Athens, plant try footage ago have one in Mexico, we've Reynosa. Michigan, in West I in required previous and just estimate plants two disclosure. in that Tijuana, two plants disclosed don't. if it wanted at could of look square I to

Reynosa a we And large have here Rapids in tops connected storage do which in Similarly, I to think a and we other Athens then you're and include familiar its other component factory storage Tijuana, factory we make Rapids. and our Malaysia, Grand supply component our are desking in and parts. in is parts products global seating Grand chain, and in make facility. we our wood

not Athens of supply and supply either the with may or global two and chain just month. linkages because and So to can -- they're as Rapids that been the being the our factory they still has Jim in closed extended, Rapids, supply has open, through still chains our be been or said, while even disrupted, chain open Grand Malaysia, closure facilities like which middle of facilities, the third-party disrupted, the their may factories is closed be Mexican in currently Grand

Reuben Garner

longer questions, I very That's about more right of of I'm mind short-term from term kind sorry impact working impact that post they bigger Thanks, home How folks And the they lot now, this? sneak when in, you obviously think wanted people potentially to A now. do of helpful. one the where to but get actually going on try to all pandemic What virus we work? have the all could could have past industry? obviously, question. one work, this guys. all top picture it's what

James Keane

will this And out it's imagine little that good I So use a question. a about to we of talk how coming crisis. could bit

are to coming in experienced offices the So, is the and to back factories resume. already business are China, where this coming to back again, beginning people we've people and

not not it's is was it note it exactly. to back to that before, the Although way coming important

There's U.S. here more and of used infection So not far all Western people. on still far as of in basis of the people just ongoing things to Europe. aware They're in they're aware an control, protocols. come getting lot distancing of we're more social back, that doing a they're gatherings

think And period of a of so normal. enter new kind I a we

it when we idea to, means relates to might people for great So is forced learned first as everyone of China what the think as that as offices, it -- from all, of working is. home not that in is that

own research our people experience in they of sense China issues and lot the with loneliness, experiences from that from separation. that of there's that, know a we that a experience So again

work loss same people without but out the be have by people any of there's can't thing, working Some can are other be done the productivity that productively as of done people remotely. lot significant aren’t Studies in work really together. a pointed interruption, when when as

work is at doesn't going home be glad remote be that will think to And And away. or it go everyone I connect to mean able together. work so to

better. learnt I it, level gotten think take between of used will competitiveness. the it think understand also to people differences to productivity is how it and I have the who people What do have

the to home. new trying customers. just If It's is not same product, everybody you're at a trying serve you're develop when to

that's So first part. the

which short-term. may more Secondly, be is

As the the the back to virus on to now back system coming and coming system an it's the work, has won't has It's people been whether been together flatten able and it’s to back has enough of to manage we've come because be factories to offices, the healthcare ongoing the respond or because scale it basis. able healthcare up able been virus to that curve gone.

go infection. the customers do through about think Offices will think already about our how to a same lot to we the our have changed. and factories of offices So safety to will everyone's reduce and improve world, but around to will reconsidered you -- have factories be how about thing be trying factories, the not risk are have our of just all think how

they So when feel safe. back, come the people first

very of the dense Some are have between exist that with and separation and people. offices around have products little that embraced maximized density solutions world the very

wave So expect opportunities. the that are of we a to will first to would lot that of probably have going and be that customers reconsider

places in people everyone ability have are The of people wave physically make around future work work has a from that this believe to company, the meeting collaboration. crisis, right the now. be in state everyone we down be to continue people their better that world. I experience knows So second every the How do remote the But support we around, from it will Through to will will CEO connecting together. for other remotely? to the

new new expectations a of there'll should and work have will safer believe that remote about should people around how be a be also series I productively, workplace be. that how sensibility to the be more place And done and

the those we a what's begin helping in lot there businesses, this done already. past, are for of we’ll Think clients of that to pause to about as their in a the think So feeling And are people of used think people to out more lot opportunities research about continue things. next. we've bring

Operator

Thank you.

Our Greg next Sidoti & with Burns question Company. comes from

Greg Burns

that decisively ability you you rules of place did limit act do Thanks. a that too? work there might for the in or maybe of area little have Americas EMEA, terms to action to the plan as rollout In longer in a do your as take bit

James Keane

in the rules So are work country. different every

fail. different. any would would attempts just generalize they're And so it that to need I'd say,

benefits laid are in state this So like we that people U.S., and the through for example, begin hear government idea that is to the then a the are businesses respond. unemployment all used off the to often way supports period the

has -- be that's temporarily some we this people State that. of yesterday, our the as our related actions so people It’s been crisis to off, specifically to this that been system the laid Michigan for of able take unemployment advantage a extended And and its are will tool crisis. enhanced has of for

-- countries differently. in it In Europe, works

lower on instead of the in the the government employee some and payroll, of the So at countries, rate reimburses employees. the company a the stay then albeit

so of it and each looks those different different countries. And it is in

a as local take working the faced through we've very situation. we those so things We've actually And that. view been of

I of plant So very Spain closed -- is our that likely as through and mentioned, we in the shortly. UK our plants go have to France in as and now, are

Germany Czech continues Republic in plant the operate. Our to in and

it is differently. we So and different country handle each

Greg Burns

of your back But and these obviously, they kind know how your Americas And getting going long once last. the don't in fast and normal? U.S. you mandatory spin are shutdowns you how lifted, can expectation to up are what's to to operations

James Keane

you you to to think So, never tell this before. do normally. bring be good have we bring I admit actually vacation we what and had do -- that notice have that we’re it's then past this question. to that and a would I we factory than had summer frank the up. -- bring it And would a I'll -- also back a down much time idea in But we The less for I

approach and expect order so on people management when to to including is of the resorting paused, been the a a this the we part-time we of us benefits or workforce, work XX-hour basis. planning who It allows allows it production us by period and of even on though, our schedules. salaried during have what one factories begin this took, and lot shifting our the So

to coming happen orders were customers into So what in want as we expecting receive we the than is a when the different that were out could way we come crisis.

and the some that have furniture ability parts to of country released install receive might earlier. You their

And so of back we say, if that lot up, doing. may gradually a come have not the maybe preparing what to and day But to kind that. you zero of be of may lines products. time. on we'll that's we is bring repriortize certain up exactly go over China, in learn bringing But believe, there's behind complexity XXX% kind begin we and we the one, resort. did factories And It be also certain stuff factory from that's we that start for a we --

I of. and all of a ahead that's So us few thinking gave still you just we’re it’s speculation, of the but scenarios

Greg Burns

Okay. kind getting And of what up potential Dave you you that's this out? have you inventory Thanks. don't think what's press of you maybe issues. that remarks. in some in playing all now prepared working of built while the the I to But and terms mentioned expect or in status capital inventory release is mentioned carry levels the your

David Sylvester

you're goods were as the inventory end inventory very Sure. perspective, week in approximate the our order. our the global quite that distribution is plant and with of the line days. low supply made to lean either distribution manufacturing carry for that's are first about Jim range referenced familiar of And From the think sitting finished material of Raw centers low implementation at chain, I in and a in centers. we or regional at an goods is the between finished of

way. imagine so its we for procured on material is inventory production we've What week, is next that

way slow orders, But those take. to the many have to we're and flow down, Of inventory suppliers country our of that sitting some And try et centers of cancel are it's that we're in course, working our to hold orders, those is delay our to the shut chain going just cetera. down. factories distribution our with it or obliged its on finished in its is normal be it, we where of to our goods supply parts

-- to that. we're inventory about think producing what going say the to you're going we're I to levels I all That's to mode. shutdown a are So to likely simply would especially relative relative see are going in volumes the that build is because

you some on our cash deliver receivables imagine our of to haven't collect and disrupt good, recently can other ship to where have working are much in kind But and not receivables. significant dealers capital, really if in pretty related been able of any that changed And and revenue of -- good the inflow could it parts are ways until up receipts way.

some order have to really that we to we're our Now in. also get we've their coming always payment our dealers receivables cash customers available incentives get on keep early -- circumstances, hope from that available are inflows considering And deposits to to those got in early terrific to the dealers will existing payment and been continue. encourage expanding our in those or

James Keane

I add just to will also that.

in two happened on Mexico, at focused closures factories week, really that the And change that Michigan can time. and factory in huge that we're As Alabama. this in to we continue any run

production way running in We're order. have we're We're government could of in running happen in no production shipping we But what Alabama. really knowing So with the Alabama. production Mexico.

we're open And that the can we're but about time, so for we're closed And all the scenario potential production the business. scenario factories of the is lot running talking be today. at same a

Operator

comes Research Our Stephen Thompson next from with question Ramsey Group.

Stephen Ramsey

on Or to it pick to viability dealer you the good are about concerned Americas? that bold survive conversation, I depend in this whole the does or health of measures guess Are time dealers take dealer having dealers on broadly in of is are the this the thing? up there timeframe period? the to

James Keane

good had really good. had the dealer really, best So our dealers also in is year, health really year years, just overall a means which XX We collectively.

would to have had a if and compare this happen. something pick to you -- the time, of one, you the to strong people opportunities if very, had pick very that a responding never share well. like We in have last over We've as are you acquisitions would So We say you orders, said time in if pick ancillary, are to But -- I been right gained a shipped now. lot we products. been market quarter.

shape. good dealers our very So are in

if call check top to quickly. Head day It's back if it, quite on I do team go, his yes, is you that Sales would what remarkable call in you when phone dealers, our think our dealers we And we a the and the have there's and just really anything and expect. changing, of that's changing situation about every see guess because single to sit and I

some one they're have that customers issue in product markets they’ve had us, market their still healthcare orders in hold, be is calling where our in taken concerning you of the if that. those I to states. they're really becoming have Meanwhile So operate places closed, the we heard dealers they about products us, to the pretty so mean ordered in shape. of might adjust that's the they’re these and effect business, certain gone in orders other feeling as serve customers? in of they dealers no those impact. ship definitely orders can to dealer, place, we haven’t have to facing. And their manufacture please Coast who now haven't anything literally some deliver If inability a parts U.S. And to can a had the good anything, can West talk that their had that. they they're But number asking so

ship. So it's our ability to

to very So add thing in if lot I don't your finance still people to dealer you also state-by-state. helped hope monitoring answer have have I that health. this group because we And that, kind you of Dave, localized of is a the anything question. to want a know

David Sylvester

structures variable would point, anything. and financial distribution say how handled reference repeat use won't the a how if XXXX to agree -- how their What I that that no, dramatic cost said, just you everything. they in I quickly our as I impressed I are crisis, costs. showed drop was channel revenue that, adjust Jim It with fixed so hit their with move XXXX everybody. significant Yes,

business before, they've quite or for them certainly like effectively. best this, they -- well. manage a their said, And know know as through they years just I anything the to maybe not it pandemic XX and So but finished been not how year as Jim

Stephen Ramsey

out guess shifting pushed conjunction orders, the an to of certainly is oil the coming prices oil are being there, for I certain Thanks And what demand there, with and that? drove on in even orders EMEA still kind has though impact strong those color. fine down, areas?

James Keane

This is Jim.

just about I'll EMEA. talking start overall So

happening what's years. say there is, for last of the all I'd we -- together couple the the coming So these now about things talked

of way dealers there on during a uncertainty had lot want sell to improve in current have our gives the -- our the enhance a we manufacturing than broaden years of product We And of lot on first to period it, products quality, confidence we've a the customers secondly, I you, will lot we've relevant done consistent the before -- today that more all but ago. a run a lot had We've good issues a and going to world this. had on-time done performance was of a few it, portfolio update I already remind to had have improve side we here to a lot performance. our past really in and to sometimes

So about happy that. I'm very

-- come Germany, not across and Second EMEA the about the and across thing experience in all opened LINC years to our visit few business a is customers showcasing business is with have a kind world. really that we our you the a who of ago, It’s sharing that number we’re of about LINC. been it's of the just

had we’ve won office to our And better people clients experiences but it the And new understand like not effectively. can the more to business. the people. that helps lot customers, building compete into spaces The a potential with because an of interact we’re has attribute into way we that necessarily research customers environment able in specifically convert more LINC, customers in helped us because for that, how us translates of helps ideas and

really LINC. in to it’s and over build And that customers results. it’s up operations, volume the this key last is So continuing products, some show and won to I'd we’ve the say year, then it’s it's starting

lot of know several been East quarter. people working the more for So years. or oil Dave, over and you combination anything for It's EMEA now? the Middle if the I'd specific have to last things that a I fourth nothing a Europe really say about And of don't of prices specific on have

David Sylvester

to It's areas an Well, it's cite the the our my one more in we important historically, of piece. largest of piece, remarks. tried profitable is not it And but it business. been

the function region color is UK leadership really that's against loss, about what UK carry Jim -- and a it in to hit about been Take is give some he of markets. is the to But around is, region, of that. Brexit, net least the example, about tax we've bit, the operating I reversing the the it as the I leadership an -- other at wanted on thing have The and specific in the remind said I that evaluation forward results only the throughout is almost be midst just terrific. in allowance leadership add overall really been including certainly So counterintuitive. the achieving -- terrific. the the around And region think would people a sales

Stephen Ramsey

up kind bit the holding of can picture if I on, the recent out aside how want try day-to-day issues shift in day-to-day or and possible business is of is get you from talk going a And the of maybe from segments that that by demand aside to business weeks. little there geography? a but to to then --

David Sylvester

weekly a don't have I our was business. cetera. referenced et was revenue year, the to revenue. project breakdown whether of the success was day-to-day, through was I first together three like day-to-day or of nicely. kind it's have which of and looking project, by I up last Stephen, unfortunately, What driven But what Mike growth on through weekly don't compared cobble to is the QX our split interesting basis able weekly Yes, weeks was

to which COVID-XX reflect that's the fiscal nice into year is late the other -- creation of did coming bring growth. point helped our pre another the in full we have kind data Americas, The it in interesting is, pipelines fourth quarter, but opportunity

in project CRM it's activity tools. our again, Now,

thing of business is before our So opportunity fiscal were meaning important. improving a overall year. into coming But it's and very this seeing spread only in our day-to-day business creation the were had pipelines the significantly U.S., portion really we nice

short-term manage a while do come there's managing important reentry. demand. So I that of that's going when it's level it's Because think another for we think why to simultaneously pent like we're reason we of this, up do preparing I the be out

later Our people busy our working still is very organization are term on still the flight, -- planned in that they in we everything from working hear from in the near whether fiscal home, or year. are they're projects

Stephen Ramsey

Great to this you missed as maintenance thing prepared On from And have CapEx CapEx is as -- below in this the even going are levels? I [posing] maintenance Last long may me. what remarks, lasts? hear. levels

David Sylvester

this good think we time a question. in period, it's Well, yes, And CapEx. do maintenance about different

$XX low, quite and the that we was went less back at year. previous CapEx looked million in those looked it than financial If and of or periods, a you at downturns level crisis had

we so single how make that we we're them. And or move we And to slow whether relatively know them decision -- project that. capital to or at every we've forward want large do ensure stop on to down looked them we a

the CapEx did financial going maintenance behave I is think our to like it crisis. in

ideas. come when So to think out we you to growth thing products considerably. and But we emerge at again, Because do going and our it this want will of investments strong will see protect point, from also come we we we're do. down in some some new

Operator

Tieton comes Our with next question from Bill Capital. Dezellem

Bill Dezellem

the you guess, my I'm guess are your chain to or and back that -- supply you. able it with I the created biggest were need of delivery to if ramp your the then, in say where plant supply in Mexican facility? facilities, the workers curious second to when today return China, was question, in product your you requests relative Thank chain. bottleneck bottlenecks? is Or ramping? to up Alabama I your, the -- bottleneck And this ramping were that achieving When building being

James Keane

Jim. is this Yes,

those other answer Dave me help I'll -- the if questions can ideas. start has he maybe I'll and So

of the up have able the until really update we’ve until to -- being distributed. continue supply is our I on without commitments an two that chain, chain parts meet last to disruption, week on other I pretty done -- supply Up the changes So customer announcements. recent world. But well think to the days, were don't last broadly despite in from those week, happening last

of have parts components of based in in So, kind are some upstream we we of based do China, and Asia, parts what suppliers that are other that do. other Asia,

or in some experience them it might capacity in And been a or of was have cases, it have delay, And most of reduction been their did slowing a it might a capacity. their disruptions.

teams that disruption we working so we in able able to castle inventory, very you weeks buffer water, inventory. Our little to process is when way the on had were down finished to And manage goods. were down of their end that a the work of customer get that

operations of are thing. sort Our continuing that to teams do

perfect. not it's Now,

can product may they but product, second and thing to a can to a choice have opportunity and also You a that -- that products first can't time and can lead they product. from ordered sometimes situation make if they that makes you longer now, can't sometimes it for the particular then that supplier switch similar this there's over are hey, us go There and make customers that product product, back make particular to other say for where is you them the themselves. that have they particular a there's

worked supply agility as with been of ago a that's our flexibility, the few different it really, today way really March XXth, and Again, of So now. but pleased until up as could be the days I've chain. the it's adaptability of on

is On both it did did I here find produce? production interesting in largely is our Asia, the Much our China. it China I in it to -- we we deliver? we the ability it what’s customer about Or the and question delivery, and and to ability was in your customers China, stayed second find, of sync. both think to was was receive was in produce think ability or for make is, they Again, in of

they over I There understand ready as for were while up. asked had be customers capacity, caught weren't because we back our hold were So and who is, But other were definitely from shipped. customers production things their from delay it that us in we who balance. was asked well. patience us we what but largely teams there that they coming some partial products some we to to ready to were There asked operating at and were as

balance one world but same in not They side. take of we around That this in they now overall, that’s back if was it that came the as the places sync it So we side, went was down in sync. be largely may what neither nor it the and kind happens experienced there. other other in

Operator

Instructions]. time. at turn this call like to the I’d I'm showing questions over back [Operator further not to And any Jim.

James Keane

you thank your Thank interest Steelcase. in you. Stay And for safe everybody.

Operator

Ladies and does today's gentlemen, this conclude presentation.

now You have day. a disconnect may and wonderful

Steelcase (SCS) 25 Mar 202020 Q4 Earnings call transcript