Steelcase Inc. (NYSE:SCS) Topline Declines in Q2 2022

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Steelcase Inc. (NYSE:SCS) stock fell 2.40% (As on Sep 23, 12:20:33 AM UTC-4, Source: Google Finance) after the company in the second quarter of FY 22 has reported the reported revenue of $724.8 million and net income of $24.7 million, compared to the prior year revenue of $818.8 million and net income of $55.5 million. Revenue declined 11% in the second quarter compared to the prior year, or 14 percent on an organic basis. In the prior year, revenue benefited from a stronger beginning backlog due to pandemic-related restrictions on manufacturing and delivery activities during the previous quarter, and net income benefited from significant temporary cost reduction actions. Orders grew 24% in the second quarter compared to the prior year, and 12% compared to the first quarter. Orders grew 26% in the Americas driven by strong growth across all geographic regions and quote types. Orders grew 23% in EMEA against the prior year or 43% excluding a $19 million project in the prior year. Orders grew 15% in the Other category compared to the prior year driven by very strong growth across all regions in Asia Pacific except India, which was negatively affected by the COVID-19 pandemic. Total liquidity, comprised of cash and cash equivalents and the cash surrender value of company-owned life insurance, aggregated to $530.5 million at the end of the second quarter. Total debt was $484.5 million.
Moreover, the revenue declined 17% in the Americas, while revenue grew 10% in EMEA and 1% in the Other category. Revenue in the prior year benefited from the stronger beginning backlog, and the company estimates revenue in the Americas in the current quarter was negatively affected by at least $40 million due to shipment delays caused by supply chain disruptions. On an organic basis, revenue declined 19% in the Americas and 1% in the Other category, while revenue grew 5% in EMEA. Second quarter operating income of $33.9 million represented a decrease compared to operating income of $88.6 million and adjusted operating income of $104.2 million in the prior year, excluding the impact of restructuring costs in the Americas. Gross margin was of 28.5% in the second quarter represented a decrease of 440 basis points compared to the prior year as the extraordinary inflation in steel, logistics and many other commodities impacted the gross margins significantly.
Additionally, the company has declared a quarterly cash dividend of $0.145 per share, to be paid on or before October 15, 2021, to shareholders of record as of October 4, 2021.

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