SCS - Earnings call 2 2024

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Operator

Good morning. My name is Rob, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Steelcase Second Quarter Fiscal 2024 Conference Call. [Operator Instructions] Thank you. Mr. begin may you O'Meara, your conference.

Mike O'Meara

Rob. us for you, XXXX results. Good second morning, joining for financial you Thank the fiscal everyone. quarter Thank recap our of

Chief are Vice Senior and Chief our Here Sylvester, President Sara Officer. me and Dave today President with and Executive Financial Officer; our Armbruster,

crossed Inc. earnings a webcast, is and webcast wires is accessible call on second quarter the conference being Our our production is Steelcase of copyrighted release, which yesterday, website. This this

posted be to later replay of will A webcast ir.steelcase.com this today.

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

over analysts. Chief investors now Following turn to questions Armbruster. our from call our we respond prepared I will will Officer, Sara to and President remarks, the Executive and

Sara Armbruster

everyone, and call the today. Mike, for joining and Thanks, thanks hello,

much second guidance than provided results June. we range were above revenue better EPS our So both that we expected the in and adjusted quarter as finished

$X.XX, of the year adjusted the in EPS will So are halfway is are to between we full than our which favorable and $X.XX. we higher of projecting of $X.XX the year, fiscal first that pacing our March. through targets ahead strength our XXXX on we shared And half target $X.XX performance, finish

results. to drive and making We're financial pleased helping our areas believe the strategy in of many improved is business we're progress with these the

the the higher is largely profitability driven year. is quarter initiative. implementing adjusted second operating Our had we've This X.X% margin of prior success improvement our XXX points basis than income by

the Our make drive continuing around our structure. our to improvements have a lower near-term pricing we years while past cost also the to world extraordinary model X sales redesign are from to working the the overall increases and to operations in benefits teams response continued implemented to price we inflation over capture teams incurred, efficiency operational

company and next achieving driving We quarter, the of annualized reductions May. work this what Investor companies sold we The to implementing evolve, years, large about the in over in together in of at of office is over captured goods and people which on workplace net our the of additional coordinated continues their remain target the savings Many several number our more seeing combination being cost confident $XX a importance of leaders we're of regularly are communicated and bring we strategies million Day growing world a some office in days. in talking way. that in

workspaces. privacy clients support Steelcase to with their people and investing and focused and in-person collaboration contributor asked recognize of meet They're feel is along partner being calls for of a that being many shaping their And culture a improve to functionality to together They outcomes. strategic business help realize to as is phone their work, helping driving we're needs. companies, video those the those and individual they need key and

few. New several the finance collaboration both One that recent privacy are and create had and we sectors. example and Dallas to to we've and clients York, spaces support name variety is in in partnered looking the of leading a success legal with organizations Chicago, These large a

and group that private plant support informal well-being. and high-performance open use that access helped and junior partner focus, staff have both seamless and that spaces design plus clients facilitate offices spaces collaboration of enhance to areas connection that provide teams technology engagement Our privacy, these partner connection ancillary

really has customers. accelerated wallet a and with efforts And helping these win is our these of recent us greater HALCON acquisition of share

we're investments and of customers remain seeing prioritized our of large our the expectations, innovation, and success. ahead from workplace win is strong. the lead In in and corporate to some part our we've evidence our transformation, rates of strategy year-to-date product As Americas, research revenue

had large corporate existing customers it's fact making also But to our spaces. making their We double-digit are partner. us customers order of the is we They're indicative growth not just changes which continuing as choosing that in business, these changes. believe

the investing revenue insights goods. They Education, classrooms, those expectations, to most also broader a transform on our they notably even sales consumer recognize segments little is our pressured. beyond workspaces. customers segments spaces behind Steelcase them care slowdown saw the has for clinical In their as spaces and and the ability business, into large growth related need In and to those We've serve to help household solutions reimagine and and Care learning Americas, enhance in as nice our our in health been companies. levels our office that's investment traditional are spaces in we administrative and spending such Health and to believe we in

to environment to initiate actions. own we've Steelcase releasing that Europe to progress XX China, that in us Our their say which and results of is previously emissions goals share suppliers highlights seeing that also our XXXX set impacted we're to the international work operations. macroeconomic the to against this Impact carbon to a in and And making support share how announced reduce science-based difference. People Report, This our I'm our being and Planet. led happy this are we're fall, date businesses set targets restructuring I'm the by and proud the year,

for were in from industry our should change. global to engagement the improve of expected It we just earned furniture customers isn't And Scope capital track suppliers, climate all emissions. suppliers Steelcases' and the CDP, from these This X carbon help better as be the recognized only globally emissions. companies company of to effort indirect helping help recognition for supplier top X% where this

on our to for live our work be October So our as our commitment is more our report on report scheduled impact website read good. and business you'll a I download to X. hope and use about force The

our that to expect we halfway ahead for target, carry we summarize, the and So through year. to through the are full of year,

We environment, but our a continue to navigate been levels have fairly dynamic demand stable.

employees requirements levels with we the announced will lead strategy progress that customers and in-office our return to diversify We and markets improve as the the pleased their investment in and for presence companies transformation profitability. workplace we're We're increase. serve making substantially, are more more our optimistic

to So review the regarding with details it that, I'll turn financial Dave over and to more share our results outlook.

David Sylvester

outlook second again strong My quarter this cover the and Overall, year. quarter and will full you, will balance morning, highlights our between and everyone. we with top adjusted in the start sheet $X.XX to today in we both Thank $X.XX Sarah, our cash results, year, third communicated March. and as to $X.XX flow. the related of $X.XX per mentioned, ranges is significantly adjusted end fiscal is with then full for good exceeding which revenue I the the for the outlook our just range quarter provided results earnings, we delivered June. earnings share, to above comments that And the of Sara targeted

of Through our from our gross year, driven the expectations. half also profitability customers above higher have initiatives largest our margins been has the first corporate and revenue

have fulfillment efficiencies. supply made, which faster well from operations we've the patterns our contributing order less as addition, are to chain adjustments disruption improved In benefited and as operational

favorable strong driven patterns in $XXX pricing of the benefited million faster order which Americas, performance benefits. from by was Our revenue and better-than-expected fulfillment

due consolidated On organic decline ahead revenue slightly International prior growth of International. to our estimates the basis, from in to X% included declined in favorable project timing. an year an X% our The the organic Americas revenue and and organic was compared X%

estimate, the Americas driven by better-than-expected variable earnings were adjusted due by primarily expenses better-than-expected compensation Operating revenue. due driven our primarily QX were above expense, Our our the higher favorable to to earnings. slightly

in assets. environment which aircraft our our operating markets across we from gains actions. addition, led macroeconomic remains drove sale lower-than-anticipated to aviation other previously quarters revenue The of and organic have losses and in the first announced In mixed, second International our an the and restructuring declines International adjusted the segment and

operating due seasonally those benefits higher to approach fully the second our the of volume. more realized adjusted the as expect to year, Over income half breakeven as projected well International becoming actions of we

first was the to System by business $XX tend that to income $XXX projects seasonality, months. driven a Other in and Smith the compared includes which revenue. increased And summer million, operating as driven during shift Sequentially, million education sequential normal increase revenue in quarter, the by by increase

it cash from As of primarily driven cash $XX relates activities million operating in million to flow balance sheet, the and $XXX generated we and reduction in $XX working quarter, EBITDA million. adjusted second of capital of a the by

as to materials safety reductions reduction the which contributor capital shorter stocks. working driving supply component of for the raw lead chains in inventory enabling is times parts, are improved Lower and was largest

to Our aviation $XX increased million approximately assets. the of cash related balance of benefited also proceeds sale from

quarter. the of liquidity $XXX million end the at Our totaled

Our the of year. an trailing compared of XX% X quarter adjusted million represented $XXX EBITDA to increase prior

of significantly improved trailing X-quarter quarters over have with last approximating net metrics EBITDA. the debt half several our leverage Our adjusted now

Regarding we in of orders quarter, X% in in of posted Americas the a year-over-year International. X% quarter, the the in X% declines including second and decline

the the effect in the Although introduction to sequential been impacted consistent extended may an the temporary the declined year. versus X% is the comparison with quarter July a quantify, basis, possible of prior related prices in of it's increase orders in year-over-year a have to it's surcharge significant first difficult pull-forward year. by which decrease the list On consolidated and sequentially prior

by double-digit potentially primarily was the companies EMEA, spaces growth driven growth in increasing growth our partially The continuing by existing Americas, their offset Asia lower order strong the International, driven project investing the in business attendance. correlates decline In with our by offset office partially in by decline Pacific. In was in business, year-over-year reflects large continuing business. and

growth weeks the XX% in EMEA, while fiscal the of year-to-date patterns basis, remain Pacific, In markets a regions which X XXXX, weeks in year. demand others order and third are XX% in first mixed growth while China some prior same levels in patterns up the declined. the period relatively versus our X approximately with the XXXX. soft, in other fiscal prior all year, And versus of on have declined year-to-date were order quarter versus same order by the quarter posted demand Within Asia posting the

Turning quarter. outlook to for the our third

We orders extended accumulated would significant which compared to to and projected report chain X% to the to favorably benefited frames. within the of from $X.XX, year customer per to supply $XXX share prior a the $XXX expect in disruptions to report prior in million of Despite the decline between and which of to adjusted which part range decline a expect earnings had that backlog delivery $X.XX revenue, in due we compares reflect revenue million, year. X% time $X.XX

of million the to million the $XXX of $XXX gains estimated revenue, million, the of XX%, fixed approximately quarter earnings between is and includes projected second to adjusted $XX compared assets. expenses addition margin the range which estimate targeted to gross includes of In lower from of sale operating

interest of approximately we net nonoperating and of we're projecting to expense approximately Lastly, expense, tax expect an XX%. items and to $X rate effective million

and the on market of to $X.XX expect per significantly $X.XX based targeted first $X.XX 'XX, share current our the fiscal For half in of adjusted to strength conditions, earnings we $X.XX, is which results between range we above March. communicated

we're organic communicated revenue growth for full In a points addition, few a organic the revenue percentage decline we which the also March. modest modest lower projecting than in year is targeted

summary, In of set is earnings we the second year-over-year year. higher full at our targets the million the the earnings, liquidity start generated growth in of strong posted year and outlook the we quarter. we for than $XXX significantly And adjusted in

are growing number beginning the optimistic large of In that to mandate about attendance. increased companies addition, office we're

believe project workplace. over we will support will business turn business the it lead for to transformation help drive improved there, eventually to As the better additional From we and of questions. continuing this

Operator

Greg from of question line first [Operator your Instructions] Sidoti. comes Burns And the from

Gregory Burns

quarter. then order in Can largely the seeing the project seeing still of any continuing uptick Or sequencing quarter you first you're Is talk couple just of are about weeks this front? the you the XX% business? and on growth of that patterns throughout

David Sylvester

the were little quarter, some in the a patterns price a the the that had placed timing attribute all heavier, customers. were the when that pull-forward they of But relatively year but of over by across quarter, They we orders were earlier some little a of Greg, of were the adjustment Smith order effects the continuing we stable. I that and stable quarter, throughout because surcharge. System larger were some last little place versus relatively did they better and year, prior

continuing XX% our last X relatively also quarter. month interesting continued year that seeing X versus growth, that or move continued or a and X year, Regarding to first Well, which bouncing look in I strong it's in overall little highlighted follow is first saw start But that continuing of declines up But X and it's drove the don't know stability comp different weeks orders easy just project probably kind which the point forward. are suspect I'd our share I thought prior business we weeks. And versus September, more out know comparisons you the business in on doesn't what don't weeks it's that. of it's kind we month, a same was make into it are could of, a as of more let that. We in significantly was bit we and a a in than continuing around we'll make down growth continued a whether in that. but that project. strong the a again, we if will we

Gregory Burns

of you of commentary office the the a or forward? hybrid Are we're businesses kind seeing there's landing filling? something terms getting to you seeing, outlook on waiting kind seems some your building you're future it is all going the better and you and with conversations like Maybe the a What's macro opportunities? stricter around what the more return maybe scenes? That your just customers? seeing work the kind that behind of maybe are preorder activity on look of having pipeline maybe view move to mandates pipeline like. of for of in the Are with what Is larger sense to activity? With are is Okay. of

David Sylvester

I relatively some had positive. local is our showrooms. there visits We've indicators activity are mixed. mean, in presales are the that Well, decent

patterns indication creation an are timing our a I than last have positive down Americas, As in and macroeconomic was improvement is do whether concerns. year. of example, activity feels that our Continuing there activity. pause see, potentially more opportunity versus correlated. an in said maybe pretty in it's from thing it know don't increasing. And our I But what overall organization markets the or sense, quote is new But seeing sentiment, project, the because what of business been of that's we and do sales we've And good. that that

continuing a back a offices spending. don't that, we're adds, hypothesis if start levels higher would Our would for and like just and increased was of with we've business as more correlated restart. is growth at the see people general office office in feels that activity And more project the when. in That it clients, that as I'm moves, we sure seeing changes We potentially while we back going in some our get got had employees just activity of know they're to thinking about well. significantly,

Operator

Garner question your the Benchmark. comes from line And of Ruben next from

Reuben Garner

somewhere pre-COVID we X, back to about environment. talk you. that If and the not a really that from Thank people Good volumes now? a talk and performance or kind what but any in or mean do today get everybody. about can of strong capacity morning, maybe volume Or might between volume guess? challenging you in margin it? peaks, offset there, support anything investments here despite Can of you we kind you I how, are Can normal what else need leverage, macro maybe years expand for from of might where margins kind in X we

David Sylvester

or year out not we model we've we're we're that modeling, gross Well, what certainly our I as different next scenarios, X improve. worked out to and look imagine and really years X margins Rueben. mean hard that's or eroding

others have to we're order system handle we, able retain And can in capacity in to and incremental along expecting imagine, industry, to revenue be you the growth. growth it. with So as our

in be patterns significantly demand improve. investing to imagine that as capital, we're don't I continue going to So

Reuben Garner

a Okay. And pattern, you the, quick hear didn't that? the September on repeating just X-week I quarter just follow-up do mind

David Sylvester

Yes.

previous they Over just were X weeks XX%. that versus reminded year were compared the XX% first the year. to weeks first the in last year, prior the And down up everyone X

as the kind of they're So stable, I remaining I mean, relatively overall takeaway. think

Reuben Garner

of an seems business. It the of reaching of were this on was coming think is you the Do overthinking project And of there that bit just the seeing that, got of that? simple happen I to are the offices return continuing drive and out the point. excitement to going a going maybe inflection there's pushout? a anything that is macro projects? might at Meaning offices beyond we'll way, And macro NeoCon, that bigger like refreshing the tweaking the term, Or maybe fewer with environment? you're with longer sense growth seems be little some we or to in continuing Okay. see I'm and there least, office business

David Sylvester

don't I and in think comes retirees what some and continuing I me project the but time, period makes long on about add after. 'XXs, Rueben. what think to Typically in early what recessions I back back I'll of activity let the Sara And experienced XXXXs. this. not if the we sense. think But I mean, so, businesses about of is to that restarts back sometime a over, first told

As improves, as improve to CEO well. confidence CFO capital starts spending and

in start to that accounts. But this a et or about office footprint it, that only low before rooms the different improve cetera. And or of the I was rhythm as living in through activity and negotiating our we same see the that model and of because workplace when to about teams to talking a plan. often we with is to is we're different to lease with so in products new and building, And construction, initiatives, our now, when start have sense continuing taking a video what open larger That's my settings of adds management is pandemic. And going a not a thinking privacy and start which need things further, the and we in rates facility, enclaves, towards ordered the in everyone maybe support agreements and about but on move on even why talked the the maybe you that changes installed improve. more density advantage thing different project is pushing collaborative conference some Supporting the and Sara was that before. projects that. are smaller support business moves maybe office see

to frame. I it's happen. over what don't know going think we're, I So what, just time

Sara Armbruster

on. add Yes, I'll just

activity. right, not start I that's business project we sort say strategies. their strategies, think see more follow I start workplace would should for their of but just that as continuing I out anticipate companies think And estate that real out would also project activity. I

In the fact, of I with some as week they or was all was need that they a gets pandemic, his they were actually them. And everybody everybody institution of sent that their large me a in us, don't services have enough everybody. X now we're comment CEO home. his And holdings a the of ago, estate shed and didn't to to pandemic, right, talking space back, we to bringing like financial comment real because during have

new they're in which investing than more continuing drive project business facilities, at would So looking business.

that So then I then unfold kinds you of to that one, opportunity see capture situations and few our those think for many if me, bodes to business. well of and start to kind of a

David Sylvester

imagine dense they at their they in estate driving their to example. And tech and everything Coast. the is they office. within footprint what and remaining changing back know are our need people one summer they said a that West with are focused out the the footprint, in to on on a change, and very because they they I they client real were shrinking model And the the while other time imagining dealer company was us

project that's to don't think, everything, changing So as up if going probably I activity. show they're

Reuben Garner

update for Liquidity last bit Okay. of Can quite the was of operating Great. generated you have this that cash a least year Last one fantastic Very kind us and the quarter. of over from somewhat a guys had just helpful. you me. flow gets? last a on concern at performance year where over investors obviously

David Sylvester

operations the made through a first a worked a supply Yes. suppliers strengthen have mean, shout chain who to I to They also to chains job managing help our all, changes I'll have lot I volatility. lot through of out teams the done it, also chaos. think, supply of terrific but of

much been more, able down So a level. inventories I to we've normal would work to say,

there. reduction see don't quarter probably But bit there's know going a in I $XX-plus think to that to I little million of more you're a be another inventory. had

is payable You in might see well. average days XXs and and here as we to pretty expect there. and And a shape, good averaging Xs book few what are the our them receivable

you'll more moving capital from I we more revenue go you'll as sync perspective, think see see in So forward. working with a the it growth

Operator

Tower from comes Your Bugatch next Research. Water the line Beryl from of question

Beryl Bugatch

Congratulations the compliance been to know of any as could talked some into talked office of you on us the think, the there's CEOs. if probably Sara, associates turning CEOs Maybe large and that? those, debate on a back I to excellent I little the to now, a mandates. in well. of And company bit operating color company and of you part smaller has a the performance dichotomy you we CEOs lot. want you give

Sara Armbruster

for even say so that. hear and I would, it talk put speaks willingness guess anecdotal, and as over But mandates. that more say into couple take teeth that more to I to CEOs, to language and these this using do CEOs of I policies weeks, just would is some past I'll the I I talking

to reluctant hard. outcomes. But important more various strategies hear was that it's business I talking presence, whether I and of pandemic some for innovation, push felt for it's of together important level think or obviously about important office the that. beginning in pandemic is was think, I the definitely reasons, talent, you'd it there many have being war CEOs driving the culture, the the from people on very And and in-person for for be

their a XX now I of compensation with a return was to to CEO office Fortune last fact, week of policies time, kind bonuses. about size firm In talked who

we expectations that how employed you I a this at company. about I dial that's at with would this on don't consistent But leaders know saying, And is this more company, we hear feeling do at don't pretty want kind I this again, be widespread board say turning that know the that's, we do business work of up on here. and business I to if point. you're how that So

Beryl Bugatch

mandates a moving week X And X from can days a are to days you? Or the week?

Sara Armbruster

I week, have mean, employee, we're I that move more weeks per X take but seeing definitely companies out say, some days work of few to do year, where return to of flexibility has they think see in to week, your your we you a some days they fit. [example] limited policies as seen home as that. from your, an for have a be than dough those days to or terms of no the per kind

and do expectations there more companies up who that being are to think in that feeling more dial. able I emboldened and So are conviction feeling set those turning

but that's that. everyone, seeing are we course, of Now not

Beryl Bugatch

XX% than post right, remember that opined you industry had pandemic, of could Have changed been lower XX% I you if to that any view? that the year, it Last be thought you pre-pandemic.

David Sylvester

a based into why our it a were different communicated diversification Not we strategy. more really of Really. lot it was on mean to illustrate revenue I assumptions, was more leaning and projection

originally to As or estimated strong large likely especially think the smaller, on we what view industry we we to But a we don't company. larger. have update still whether that it's smaller degree around model, be than what is

Beryl Bugatch

orders to same right, I'm to of year you guidance XX% think XX%, And last do orders the of call, And given for same up in you've the close get be X you're will I we What for you quarter in so down said drawdown? guidance. the during now third revenue for first quarter or quarter first September, pretty the if orders. that and the the down the you If as think right, I in do came weeks couple third the year-over-year? XX% know modestly the see do weeks, X% are conference

David Sylvester

We, have third to it in to today. quickly year quarter. in know a QX share July. I start I said there because last of year forward like pull price been good might Well, some my the last that guide But that's a scripted mean, in we that and question. QX from remarks, I I surcharge orders significantly decline don't adjustment of the and did have did into fairly

the imagine but that effect. But We decline have year. bit. July, because as you'd because don't in it's the did stable was, you know was or in exaggerated have order as adjustments could a because orders possible of pull-forward it of can quarters. our of quarters, as as there declined part better So couple for to It's, last QX. been the the we it And did middle weeks several it some been little they've a much that expect certainly see growth

Beryl Bugatch

ability? order dollar per week? And you're the pacing talking and terms seeing, incoming the in you're turning of you're That's stability, about pacing, the order in

David Sylvester

that have QX. surprising year-over-year me. That growth could last to stable would versus not year. orders we post think be I In

Beryl Bugatch

a And I'm new business, that bit it's gone actually is architect the project hiring couple time an the And quite I and always your now. you've was of real remember this around? sure in somehow continuing a parsed thought And first back, now desks right of you designer not project And that, moving existing marketing what estate I interesting like estate. to reports project reitering Okay. space a and be if programs. real right, a it it business, the could or specify. is redefining looks the between

Mike O'Meara

Mike. is this Budd, Yes,

of customer a generalize they're significant quote which we something when space. what is will a a or existing use an typically So can as significant, more doing project find space we redo a new

their pricing we where to the continuing improve continuing just leveraging we leverage is but space historically as a how that is changing of new that's location. people all kind of of first, necessarily over not changes which space they in a to order, agreement back offices, to So they're the they is make going bring to think with incremental terms sort generalize continuing and versus moving they where or standardized agreement what the

think trying meaningful was the Continuing right we go now, it is out from as we maybe call why So, and is part things to little it is started understand here. because to going which why are more that's where stronger a to

Beryl Bugatch

confused am about I Well, Yes. that.

you operating of for they're maybe as into in on hopefully, The target, can that. forward So help terms asset me next as my and elucidate kind put us the against we come they we back of, sales is results. go

the delta think that gains, new what we in $X.XX least goes flow. the gains you're What's The you the flow terms that cash about wasn't versus so cash planned that do about or are the So the sales. that? operating of right when year-over-year to or gains into that $X.XX at asset How obviously from talking the you $X.XX in now? were getting improved in

David Sylvester

one aircraft good There we than lower in it a and help planned. that the will item question. that we're not gains offset planned, selling fact and assets that's the there That's was is aviation for

So $X.XX little we're there or about maybe or of be not $X.XX, might $X.XX. a target, versus benefit $X.XX our initial bit but talking

Beryl Bugatch

delta incentive that variable comp it you when comp or netting, against the helps netting offset And in you're that, also are to?

David Sylvester

Yes.

Beryl Bugatch

Okay.

it's for except so apples-to-apples you're what really So is $X.XX? really that, maybe saying, David,

David Sylvester

pennies. of couple A

Beryl Bugatch

A pennies. couple Okay. of

and remarkable two all over a which culture But and industry a congratulated that. I strength time, and either on the not storing of when real it's congratulations the ever on pandemic periods of financial a life, seen to I've YXK strength of a of Steelcase. my know show out these Okay. nobody the you in seen do deserve period have basis. All I've the lot and to been well, resilience and through most really again, coming able periods, at fun nobody, this it you incredible look condition, you And on longer testament remarkable in day-to-day that to it's it's out right. be wanted of is coming this

So thank you.

David Sylvester

We be that to before and my move appreciate in mentioned them next million. I I want that $XXX million between meant something we remarks. expenses, Apparently, million. $XXX guide $XXX our clarify we actually and just in scripted QX And to operating expected recognition. the that question, I to $XXX

Operator

Instructions] Steven from comes [Operator line Research question Next from Thompson the Group. Ramsey of

Steven Ramsey

companies, more from office adjustments to do mandates those are do return format Or that back make you of get employees workers finding they more work? bring as it office with spending of coming start bringing companies they the to they for are are with experience as on ahead Maybe after back? and new their

Sara Armbruster

question. Good Yes.

it's far our bit all points different as physical think our the they because that of far from I been back, people of So as above remember, a has spaces they're starting thus of all go. little as experience these companies bring

et it you the you're a might before you think just invested pandemic pandemic that describe you if of really bring what integration, significant well-being, to social support be the to remodel as what make company people therefore, closer and done the today back technology of we maybe we So about need or the spaces, before cetera, and working. just ways spaces need changes. Whereas pretty other terms in clients would are how they modest whose to serve, had there outdated as

the back way then have and those clients a to of attract to them today. support people work to task people want both So significant much more ahead

know think need I companies doing to people they investments who see make back. before it So bring we some they

taking a there We'll all sort approach. bit of back. a companies people It's and sum employee go. bring of pilot of we'll here above. more I of We'll of input, think bit the kind iterate, as we'll a we do other are get

Steven Ramsey

a are the helping the on that helpful. commentary, in business Okay. that the verticals talked lot Continuing segment? continuing there of corporate primarily other That That's Or prepared being Is are helpful. verticals you've to And strength. drive which about continuing business the business? was stronger, in

David Sylvester

I'm that tend the that with. if I he that I see mostly driven think to ones They're by have granular looking level but don't think to large the companies. Mike it's to it's reasonable know agrees, have assume contracts at we that I detail, I of

We contracts admin or investments also have investments settings large institutions clinical their in But with are Sara large while up. institutions. down and healthcare off their cases, their and in those are classroom carpet commented, education

in I continuing large business. think the is improvement company fair a related it's it's assumption that mostly driving that

Steven Ramsey

Right. makes sense. sense. That makes that Okay,

verticals, is continuing to So just company compares those a corporate that I less in you a how of nature relationships customer spaces part large of you manage other business kind the longer over becomes to you conducive mature office. business natural gain Do as think if the corporate? term aside that share other to and Or large Continuing bridge from of time? those

David Sylvester

there healthcare then, say, are continuing won have course, to XXX that and well. and agreements small But done, with a speak. no that education will agreements some in of retail, certainly, business are of midsized some is of verticals have project do with more as on But and those consumer to lot XXX so with. the, on the that employee size. And business Well, business continuing to we like the companies, companies let's

Steven Ramsey

a Okay. strong to do it generated work reduction? being time of sort elevated now you flow cash high sitting putting debt and the you keep do macro? or you the the cash about balance Or think uncertain Helpful. the sheet, of on how level returns that to cash in for And think, on that

David Sylvester

We've even and they've been acquisitions had done. bolt-on Steven. we two. of over of the They that question, done half to so possibility continue the strategy, very the supportive. good history a we've others very in that's of another dozen two look supportive our and Viccarbe imagine the last to years, with acquisitions been HALCON or in a years we've acquisition couple Well, We've the and continue of last and

of liquidity We're future opportunistic see there's strong been DNA. repurchase not are the to It's the to strong industry it in dividend but continue occasion, going well. part mean continued company continue quite like our dilution is So philosophy dividend variable I approved strong been the strong and imagine is on that And we've to we a Board And possibility. to quarter tied shares. more that that related that dividend have to $X.XX a also kind attempt The at offset equity awards additional always yesterday. compensation. And build. I it's to very a also in yes, having past. into as strong a and as as today, conservative that But a to sheet been our of has I cyclical is always would has balance

also just well. us see you So strengthen it continue to as could

Steven Ramsey

last And quick question Okay. Helpful. for me. then

expected third of raise to to that Similar the drove are for when repeat a organic second quarter? X% factors is beat quarter, decline question again of Or in quarter, second the are QX. the the My had for This behind you expected quarter. decline an is, those organic X% factors some going in those beaten potentially the kind you? of

David Sylvester

pricing quarter we order and mean, because of this I faster outperformed benefits. Well, fulfillment

more Our that, guide forward go now continue. the fulfillment going couple of will guide patterns, assumes a that seen quarters that of forward, our normalized we've

on baked as benefits, the in. And already we've the pricing those of I get will forward. mean, So we, that benefits we smaller move year-over-year magnitude much

we a we've And higher so, XX-XX in tad I the significantly on that a the don't, we quarters, it's business. it's what than don't, we people every we guide could mean hard than it And I maybe know. to imagine we've outcomes is, from of last driving a But good mean, okay, across I had that work guide guided hard come with based more for upside what downside. prospectively. I those call couple the that XX-XX. provide are

Operator

Bugatch follow-up from a have line Research. from we Water question of And the Beryl Town

Beryl Bugatch

in a on holding you're David, average? through, pacing that is my really The in? is week-to-week, $XX about standard pronouncation seeing was that on made the point, industry deviation the anywhere The name. that come the you very of That right, my million that week new -- not math see it's weekly do stabilizing as And high is a near you that and one. had

David Sylvester

I I a stable week. how so haven't standard specifically, that chart look been been. month, as remarkably it's deviation that to and at average we see but see it. every I it, has we it I speak it's per mean can't I run steady orders daily remarkable on

Beryl Bugatch

you you the you and Isn't more in half quarter or a that, happens probably that that? deliver with at quarter. look we look when of typically in at And can orders what having gone deliver when that lean

David Sylvester

range, runners times, X If times that. maybe single weeks able range almost standard the in maybe that. are X-week X- product, can lead on not everyone, weeks. aren't do large which to product, to back set are few on to all the to a times be do every Lead the We're normal but a more up yes, we lead between to

Beryl Bugatch

past, explain to the things in was XX you investors had one So the in in the stumble was to of of through backlog how terms of projection the deliverable and days. of much that next happened it that what to

delivery how the what quarter? heard this think delivered haven't this much What in backlog call. that of We gets number backlog, the for do projected or you is

David Sylvester

percentage, more which much high. quite A normalized is

Beryl Bugatch

right, to The normalized XX% so, XX%? or percentage XX% is

David Sylvester

know sound if percentage, I I percentage, the don't that but unreasonable. know exact doesn't

Beryl Bugatch

it, the had and third in so a part because XX% in growth Well, of Okay. we've quarters, order right. in quarter, orders. of growth last then All last dichotomy had degradation order the the that even revenue some we of well, and

think up year-over-year. I revenues were

to just in I'm trying everybody looks think a get get that's with? of going to is So And the question normalized all struggling it same when to, direction. where I that do we pattern it's a like

David Sylvester

Yes. Yes, understand. I

Beryl Bugatch

too. struggling you're Okay.

David Sylvester

to back it's mixed. In business. I the I'll is the is I, don't international, But core average per go In stable in Americas. remarkably a know I what bit again, our what week more mean answer. the orders daily

or we Others Europe are Some Americas. are, in say, declining. to in oriented growing. project Asia And, tend in than markets we the more are be

lumpy where bit pretty more little steady. week-to-week. XX% our in have in Americas, market we our a revenue is been it the it So largest of But has

Beryl Bugatch

a I've time mean known role. you to much. know or in that's, get hear long And you very issue you've the I you I time go, now. you're I same because got for to, your using thank opinions Okay. pretty that pretty every I definite trying

David Sylvester

Thanks. right. All

Operator

I this over Ms questions no there Armbruster, back call you. turn And time. the are further to at

Sara Armbruster

to in all hope results, and We Steelcase all have appreciate interest focus continue great improved driving you joining. thank for on as your I a So you day. we

Operator

concludes This call. today's conference

disconnect. You may now

Steelcase (SCS) 20 Sep 232024 Q2 Earnings call transcript