Steelcase (NYSE: SCS) reported Q4 EPS of $0.06, $0.07 better than the analyst estimate of ($0.01). Revenue for the quarter came in at $677.1 million versus the consensus estimate of $650.4 million.

• Fourth quarter revenue of $677 million and EPS of $0.06 significantly impacted by COVID-19 pandemic
• Actions to reduce fixed costs and discretionary spending supported profitability for fiscal 2021 while protecting investments to drive future growth
• Increasing customer engagement driven by publication of company research, positive vaccination trends and improved sentiment about returning to offices
• Company provides select financial targets for fiscal 2022

"We delivered better than expected revenue and earnings per share in the fourth quarter while navigating multiple supply chain challenges in addition to the resurgence of COVID," said Jim Keane, president and CEO. "As we move through what we believe could be the bottom of this cycle over the next quarter, I'm confident our people will continue to maintain strong cost controls, help our customers design their return to office plans, and position us to lead our industry in the expected recovery."

GUIDANCE:

Steelcase sees Q1 2022 EPS of ($0.34)-($0.27), versus the consensus of ($0.10).

At the end of the fourth quarter, the company’s backlog of customer orders was approximately $445 million, which was 28 percent lower than the prior year and approximately $102 million, or 19 percent lower than at the end of the third quarter. Supply chain disruptions continue to impact the company, and companies across many industries, and are expected to result in a delay of some revenue from the first quarter of fiscal 2022 to the second quarter. As a result, the company expects first quarter fiscal 2022 revenue to be in the range of $540 to $570 million. The company reported revenue of $482.8 million in the first quarter of fiscal 2021 which was significantly impacted by government mandated restrictions related to the onset of the global pandemic. Adjusted for an acquisition and currency translation effects, the projected revenue translates to expected organic growth of 5 to 11 percent compared to the first quarter of fiscal 2021.

The company expects to report a loss per share of between $0.27 to $0.34 for the first quarter of fiscal 2022. The estimate includes: (1) projected inflation, net of pricing benefits, of approximately $6 million, (2) projected operating expenses of between $190 to $195 million, (3) projected interest expense, net of investment income and other income, net, of approximately $5 million, and (4) a projected income tax benefit equal to approximately 28 percent of the projected pre-tax loss. Steelcase reported a loss of $0.33 per share, and an adjusted loss of $0.18 per share, in the first quarter of fiscal 2021. Operating expenses in the first quarter of fiscal 2021 of $157.4 million benefited from significant temporary reductions in pay and hours across most of the company's global salaried workforce.

Beyond the first quarter, the company is targeting seasonally higher revenue in the second quarter, but a decline compared to the prior year which benefited from a strong beginning backlog as a result of the government mandated shutdowns in the first quarter of fiscal 2021. The company is targeting net income in the second quarter that would approximately offset the first quarter net loss and includes a $15 million gain from an expected land sale. For the second half of fiscal 2022, the company is targeting double-digit revenue growth compared to fiscal 2021, due to higher vaccination levels that are expected to support workers returning to the office more broadly, increased capital spending, and corporate C-suites prioritizing their workplaces as they focus on improving productivity, collaboration, and company culture.

"As the pace of COVID vaccinations increases, many company leaders are confirming their plans to begin bringing their employees back to the office," said Jim Keane. "We're working with many of our customers to re-start paused projects and to engage in new opportunities by sharing what we've learned about how to make their spaces safer, more flexible and more productive. We saw strong double-digit increases in new project opportunities and customer requests for proposals in the Americas, as well as customer visits to our Grand Rapids location (both physical and virtual), in February compared to January, which supports our expectations for a strong recovery in the second half of the year."

For earnings history and earnings-related data on Steelcase (SCS) click here.