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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 22, 2002
Commisson File
Number 1-13873
STEELCASE INC.
(Exact name of registrant as specified in
its charter)
| Michigan |
|
38-0819050 |
| (State of incorporation) |
|
(IRS employer identification number) |
| |
| 901 44th Street, |
|
|
| Grand Rapids, Michigan |
|
49508 |
| (Address of principal executive offices) |
|
(Zip Code) |
(616) 247-2710
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
| |
| Title of each class |
|
Name of each exchange on which registered |
|
|
|
| Class A Common Stock |
|
New York Stock Exchange |
Securities registered pursuant to 12(g) of the
Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No ¨
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or Information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
As of April 29, 2002, the registrant had outstanding 35,684,382 shares of Class A Common
Stock and 111,798,840 shares of Class B Common Stock. The aggregate market value of the Class A Common Stock held by non-affiliates of the registrant was $488,399,474 computed by reference to the closing price of the Class A Common Stock on that
date as reported by the New York Stock Exchange. Although there is no quoted market for registrant’s Class B Common Stock, shares of Class B Common Stock may be converted at any time into an equal number of shares of Class A Common Stock. Using
the closing price of the Class A Common Stock on April 29, 2002, as reported by the New York Stock Exchange as the basis of computation, the aggregate market value of the Class B Common Stock held by non-affiliates on that date was $1,390,441,087.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the registrant’s definitive proxy statement for its 2002 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K.
PART I
Item
1. Business:
The following business overview is qualified in its entirety by the more detailed information
included elsewhere or incorporated by reference in this Report. As used in this Report, unless otherwise expressly stated or the context otherwise requires, all references to “Steelcase,” “we,” “our,” “the
company” and similar references are to Steelcase Inc. and its consolidated subsidiaries.
General
The Company Overview
Steelcase is the world’s largest designer and manufacturer of products
used to create high-performance work environments. We are focused on helping individuals and organizations around the world work more effectively by actively pursuing a user-centered product and services strategy, which addresses the three core
elements of the office environment—architecture, furniture and technology. Our product portfolio includes furniture systems, seating, desks, lighting, storage, demountable walls, raised floors, zone cabling, information display appliances,
group communication tools, and related products and services. Our other businesses include design and innovation services, financial services, furniture refurbishing services, marine accessories and workplace consulting services.
Steelcase was founded in 1912 and is headquartered in Grand Rapids, Michigan. We are a Fortune 500 company with fiscal 2002 revenue of approximately
$3.09 billion. We have manufacturing facilities in over 40 locations and approximately 19,300 employees worldwide. We distribute products through a network of independent dealers in approximately 830 locations around the world. Each dealership has
its own sales force, supported by our sales representatives, who work closely with dealers throughout the sales process. We have historically experienced minimal turnover in our dealership network. The success of our business is not dependent on any
single dealership. Our largest dealership makes up about 3% of our total revenue and our top five dealers combined comprise approximately 13% of our total revenue.
Our Products
In the past, we have been known primarily as an office furniture manufacturer. Today, we are a global work
effectiveness company. We focus on providing knowledge, products and services that enable our customers to create work environments that help people in offices work more effectively. Because of this focus, we have an evolving portfolio of integrated
architecture, furniture and technology products. Our unique Pathways portfolio reflects our product strategy and is illustrative of how architecture, furniture and technology products can blend seamlessly together to create work environments
that offer exceptional flexibility, affordability and user-control.
1
We offer the following broad array of products at various price points and with a variety of aesthetic options and performance features:
Furniture
Panel-based and freestanding furniture systems. Moveable and reconfigurable furniture components used to create individual workstations and other work environments. Systems furniture can be used to improve
visual and acoustic privacy, accommodate power and data cabling, and support technology and other worktools.
Storage. File cabinets, cupboards, and pedestals. These products help people store and retreive documents and objects.
Seating. High-performance, general use, executive, guest, lounge and stackable chairs. These products help people work more comfortably, and increasingly offer user-adjustable controls.
Tables. These products are used by individuals and teams in office, learning and café settings.
Textiles and surface materials. Upholstery fabric, panel fabric and wall coverings. These products offer a
wide range of design alternatives to create more appealing workplaces.
Desks and office suites. Wood and
non-wood casegoods. Private offices and shared enclaves can offer users higher levels of privacy and uninterrupted concentration, and the products that go in them remain an important part of our product portfolio.
Architecture
Interior
architecture. Full and partial height walls with fabric, hard surface glass or whiteboard surface materials, raised floors, doors and modular post and beam products for open plan environments and other office and learning
environments.
Lighting. Adjustable and energy-efficient task, ambient and accent lighting. Effective
lighting can reduce eyestrain and related fatigue, and can create more attractive work environments.
Technology
Technology. Infrastructure products, such as modular communications, data and power cabling;
information appliances and Internet based data sharing systems, such as interactive signs and space scheduling systems; and group communication tools, such as interactive whiteboards. These products help workers more easily access power and data as
they move throughout their work environments.
Worktools. Computer support, technology management,
organizers, information management products and portable whiteboards.
2
Business Segments
We operate on a worldwide basis
within three reportable segments: two geographic manufacturing and sales segments—North America and International—and a Financial Services segment. The North America segment includes the United States, Canada, the Steelcase Design
Partnership (“SDP”), and our IDEO Product Development Inc. (“IDEO”) and Attwood subsidiaries. PolyVision, acquired in November 2001, has been added to SDP within our North America segment. The International segment reflects all
other non-North America manufacturing and sales operations. The Financial Services segment provides leasing services to customers and selected financing services to our dealers, primarily in North America, and more recently in Europe. Additional
information about our reportable segments is contained in this Report under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 16 and 17 to the Consolidated Financial Statements,
including disclosure of our domestic and foreign revenue and long-lived assets.
North America Segment
Our North America segment consists of manufacturing and sales operations in the United States and Canada. Our offerings in North America include
architecture, furniture and technology products as described above, under the Steelcase brand, Turnstone brand, and SDP brands which include: Metro, DesignTex, Vecta, Details, Brayton, and PolyVision. Our North America segment also includes Revest,
our remanufactured furniture and refurbishing services subsidiary, IDEO, our design and innovation services subsidiary and Attwood, our plastic injection molding and marine accessories subsidiary. In fiscal 2002, the North America segment accounted
for $2,413.0 million, or 78.1% of our total revenue. Our largest customer accounted for approximately 1% of the segment’s revenue, and our top five customers in North America accounted for less than 5% of the segment’s revenue in fiscal
2002.
Office Furniture Systems
Since the mid-1980’s, furniture systems have been the largest product category in the United States office furniture market, representing approximately one-third of all office furniture sold in calendar year 2001. We
believe we are the market leader in this category based on revenue, offering a broad range of aesthetic options, performance features, applications and price points. Office furniture systems consist of movable and reconfigurable components, which
can be used to create work environments of variable sizes and configurations. Furniture systems generally use movable panels for space division, acoustic and visual privacy, structural support and as conduits for power, telecommunications and data
cabling. Furniture systems also include panel-supported and freestanding components such as work surfaces, desks, pedestals, drawers, binder bins, filing, lighting fixtures and keyboard support shelves. Furniture systems offer customers more
flexibility and greater space efficiency than traditional drywall-based private offices and undivided desk areas.
Pathways
Pathways is an evolving portfolio of integrated architecture (which includes walls, doors, floors and lighting), furniture and
technology (which includes both infrastructure and appliance) products that enable customers to create flexible, user-centered work environments. Pathways products are designed to blend with a broad range of Steelcase products.
3
Seating
Seating represented approximately one-quarter of all the office furniture sold in the United States in calendar year 2001. We believe we are the world’s largest office seating manufacturer based on revenue, and a proven
market leader in seating innovation. We believe our focus and research on materials, ergonomics, technology and work processes, along with our broad platform of product styles and price points, will maintain and enhance our share of the seating
market. We believe that we offer the widest selection of chair types and chairs in the office furniture industry, providing chairs and other types of seating for virtually every office need. Our primary seating products are high-performance chairs.
Other seating products include guest, executive, lounge, stackable and collaborative or team-based offerings in both wood and non-wood materials.
Storage Solutions
We believe that we have been a leader in office storage products and systems since the 1940’s.
Current product offerings include a broad variety of vertical and lateral filing cabinets, bookcases and other types of storage components. All of the office furniture systems we offer are complemented by a full range of integrated storage
solutions, including binder bins, storage cabinets, personal storage towers, mobile and fixed pedestals and numerous choices of lateral and vertical files coordinated in design and color.
Desks and Casegoods
Steelcase offers a wide variety of traditional,
transitional and contemporary desk and casegood products. These products offer a range of solutions for private offices, team rooms and open plan environments. Desks and casegoods are offered across many brands and in a variety of materials,
providing a broad scope of style and performance options. In addition, the Turnstone brand desks and casegoods are targeted to more cost-conscious customers.
Refurbished and Remanufactured Furniture
Our Revest unit offers high quality
remanufactured and refurbished office furniture, including systems products. Revest creates ‘‘like new’’ furniture by rebuilding Steelcase office furniture, which includes the replacement of parts and electrical components with
new products and finishes to meet certain functional, image and budget needs.
Steelcase Design Partnership
SDP brands include furniture and technology products used in lobby and reception areas, cafeteria and informal gathering areas, private offices,
learning environments, executive conference areas, group work environments, video conference facilities and health care environments. SDP also provides surface materials for hospitality, health care and contract markets and ergonomic tools for the
workplace. The Steelcase Design Partnership includes: Brayton International Inc; Metropolitan Furniture Corporation; Office Details Inc.; Vecta; the DesignTex Group, formerly called the Steelcase Surfaces Partnership, which began in January 1999
with the combined operations of DesignTex Fabrics, Inc. and J.M. Lynne Co., Inc.; and, PolyVision Corporation. Polyvision, acquired during fiscal 2002, is a manufacturer and installer of visual communications products for learning environments and
office settings.
4
International Segment
Our International segment includes all sales and manufacturing operations outside of the United States and Canada. We have combined the operations that were formerly part of our Steelcase Strafor
joint venture with all other international operations. Today, the International segment includes 18 manufacturing facilities and 4 joint ventures located in 15 countries, represents 4,400 employees and serves customers through a network of
approximately 440 dealers.
In fiscal 2002, our International segment accounted for $596.9 million, or 19.3% of our total revenue. We have
a market leadership position in several countries, including France and Spain.
Our International segment develops and manufactures most
of the products it sells. International also sells, in its markets, products that were developed by the North America segment. In some cases, these products are made locally, and in other cases the products are manufactured in North America.
Office Furniture Systems
Our office furniture systems category includes desking systems, panel-based systems and executive furniture. Desking systems account for nearly half of all office furniture sold in the international market. Desking systems consist of
various types of desks, tables and work surfaces that can be used in many freestanding and mobile arrangements. We believe we are a European market leader in desking systems, placing a priority on the balance between aesthetics and efficiency.
Seating
As in the
United States, the seating product category makes up about one-quarter of the total European office furniture market. We believe we are a market leader in Europe, offering a wide range of functional, ergonomic and aesthetic choices. High-performance
and general use chairs, as well as guest and lounge seating are offered under several product names. We believe that our focus and research on materials, ergonomics, technology and work processes, along with our broad platform of product styles and
price points will maintain and enhance our share of the European seating market.
Filing and Storage
We believe we are also a leader in the filing and storage product category of the European market. Our office furniture workstation offerings are complemented by
a full range of storage solutions, including modular and personal filing and storage products, some that are stationary and others that are mobile. We also manufacture and market a variety of filing and storage products.
Financial Services Segment
Our
Financial Services segment provides leasing services to customers primarily in North America, and more recently in Europe, to facilitate the purchase of Steelcase products. This segment also provides selected financing services to our dealers. In
fiscal 2002, the Financial Services segment accounted for $79.6 million, or 2.6% of our total revenue.
5
Leasing provides a financing alternative that is attractive for certain customers. Leasing represents
less than 10% of total furniture sales in North America. The dealer financing portion of this segment provides project financing and secured lending to certain dealers.
Raw Materials and Suppliers
We believe adequate sources are available for all of our raw materials. We utilize steel,
lumber, paper, paint, plastics, laminates, particleboard, veneers, glass, fabrics, leathers and upholstery filling material in our manufacturing and business operations. We are implementing three major supply-chain management objectives aimed at
producing significant cost savings, streamlining our processes and supporting greater innovation. First, our strategic sourcing initiative focuses on re-evaluating supplier capabilities and costs and when necessary, restructuring the supply chain
(steel, fabric, wood core, etc.). Second, we are involving our suppliers much earlier in the product development process so that we can more closely collaborate and leverage their expertise and knowledge about innovative materials and applications.
Finally, our SupplySync project currently underway, enhances communication and information sharing by linking our supply base through the Internet so that our supply chain (including Steelcase) can act as one integrated unit.
Product Design and Development
Our new product
development process begins with research that seeks to discover emerging patterns of user behavior in the workplace and changes in the way people work. Our research methods include on-site observation of individuals, groups and teams working in
their offices, human factor studies and often includes collaboration with universities and other companies. Our research activity is a corporate function and occurs primarily in North America and Europe.
Understanding patterns of behavior helps us identify and anticipate user needs. Our design teams develop prototypical solutions to address these needs. These
solutions are sometimes single products, and are sometimes integrated settings of architecture, furniture and technology components. Design work is organizationally distributed across our major businesses and SDP companies, and can involve outside
design services. We also rely on our design and innovations subsidiary, IDEO to enhance existing products and to design new products.
Our
marketing team evaluates product concepts using several criteria, including financial return metrics, and chooses which products will be developed and launched. Next, designers work closely with our engineers and outside suppliers to co-develop
products and processes that lead to more efficient manufacturing without compromising key user benefits. Products are tested for performance, quality, and compliance with regulations.
Over the past three years, we have invested approximately $203 million in product research, design and development.
6
Manufacturing
We manufacture our products in more than 40 locations throughout the world, including the United States, Canada, Mexico and Europe. Substantially all of our manufacturing facilities ‘‘build to order’’ rather than to
‘‘forecast,’’ which minimizes finished goods inventory levels and emphasizes continuous improvement and delivery time to customers. As a result of order processing and customer service improvements, our average lead-time, i.e.,
the time from order to delivery, has been reduced and reliability (complete/on-time delivery) has been increased in North America. We have an extensive distribution system in North America and utilize both our company-owned trucking fleet and
commercial transport and delivery services in North America. We continue to focus on order processing and customer service improvements in International. We have an extensive distribution system throughout the world and we utilize multiple means for
delivery to our customers throughout our international markets.
We are implementing lean manufacturing principles in many of our plants.
Lean manufacturing involves smaller batch sizes, cellular or team-based manufacturing, flow and pull methods of managing work in process, and other world-class production techniques. We are also implementing advanced planning and scheduling systems
to help coordinate production of a given order across multiple plants and multiple delivery times. We are exploring opportunities to outsource certain manufacturing processes when suppliers can offer additional efficiencies or other performance
benefits. These strategies along with other initiatives are helping us create the new Steelcase Production System. As we continue with implementation, we expect to improve our productivity, increase the effective capacity of each plant, reduce
inventories, and create a less capital-intensive industrial model. Over time, we will continue to examine opportunities to consolidate manufacturing and distribution operations and dispose of assets that represent excess capacity.
Working Capital
Our receivables are primarily from our
dealers, and our terms encourage prompt payment. Payment terms vary by country and region, and some international markets have, by convention, much longer payment terms than in other markets. We do not believe that we, nor the industry in general,
have any special practices or conditions related to working capital items that are significant to understanding our business.
Backlog
Since our products generally are manufactured and shipped within a few weeks following receipt of order, the amount of backlog at any particular time
is not a meaningful indicator of longer-term shipments.
Intellectual Property
We own approximately 1,400 designs and patents throughout the world. In the United States, we have more than 375 active utility
patents and 200 active design patents relating to current and anticipated products. We also own approximately 800 designs and patents in a number of other countries. The average remaining life of the utility patents in our U.S. portfolio is
approximately 12 years. Our wholly owned subsidiary, Steelcase Development Corporation, acquires, manages, licenses, and enforces our intellectual property rights.
7
We have also registered various trademarks and service marks in the United States and other countries.
Collectively, we hold registrations for approximately 143 U.S. and 1,265 foreign trademarks. We have established a global network of intellectual property licenses with our affiliates. We also occasionally license our intellectual property to select
third parties or enter into license agreements under which we pay a royalty to third parties for the use of patented products, designs or process technology.
Although we consider securing and protecting our intellectual property rights to be important to our business, we do not believe that any material part of our business is dependent on the continued availability of any one or
all of our patents or trademarks, or that our business would be materially adversely affected by the loss of any of them, with the exception of the “Steelcase” trademark and the possible exception of the following important trademarks:
“Brayton;” “DesignTex;” “Details;” “Metro;” “Vecta;” “Leap;” and “Pathways.”
Competition
North America Segment
The North America office furniture market is highly competitive, with a number of competitors offering similar product categories. In this market, companies compete on price, delivery and service, product design and features, product
quality, strength of dealers and other distributors, and relationships with customers. Our most significant competitors in the North American market are Haworth, Inc., Herman Miller, Inc., Hon Industries Inc., Kimball International, Inc., Knoll,
Inc. and Teknion Inc. Together with Steelcase, these companies represent a substantial portion of the market share of the overall office furniture market.
International Segment
The international office furniture market is highly competitive and fragmented. We
compete with many different companies in many different markets, with the majority of our business in a few major European countries. A few companies, including Samas-Groep N.V. and the Haworth Europe Group, have a significant presence in all of the
major office furniture segments in multiple European countries. However, in most countries, we compete with many different local or regional manufacturers. In many cases, these competitors may focus their strengths in one or two of the major office
furniture product segments
Environmental Matters
We are subject to a variety of federal, state, local and foreign laws and regulations relating to the use, storage, handling, generation, transportation, treatment, emission, discharge, disposal and remediation of, and exposure to,
hazardous and non-hazardous substances, materials and wastes (‘‘Environmental Laws’’). We believe that our operations are in substantial compliance with all Environmental Laws.
Under the Clean Air Act Amendments of 1990, the United States Environmental Protection Agency (‘‘EPA’’) is required to promulgate various
emission standards, including the National Emission Standards for Hazardous Air Pollutants (‘‘NESHAPs’’), for certain sources of hazardous air pollutants, including the wood and metal furniture manufacturing industries. NESHAPs
for the wood furniture manufacturing industry required reduction by
8
November 1997 of emissions of certain volatile organic compounds found in the coatings, stains and adhesives used by Steelcase. Compliance with the wood furniture NESHAP has not materially
affected us. The EPA has
recently published the proposed metal furniture NESHAPs. We intend to continue to participate actively in negotiations relating to these regulations because of their potential
significance to our operations. While the newly available regulations may have an impact on some of our operations, we cannot estimate the effects of compliance with the metal furniture NESHAPs or other future Clean Air Act Requirements at this
time.
Under certain Environmental Laws, Steelcase could be held liable, without regard to fault, for the costs of remediation associated
with our existing or historical operations. We could also be held responsible for third-party property and personal injury claims or for violations of Environmental Laws relating to the contamination. Steelcase is a party to, or otherwise involved
in, legal proceedings relating to several contaminated properties being investigated and remediated under Environmental Laws. Based on our information regarding the nature and volume of wastes allegedly disposed or released at these properties, the
number of other financially viable potentially responsible parties, and the total estimated cleanup costs, we do not believe that the costs to us associated with these properties will be material, either individually or in the aggregate.
The above forward-looking statements concerning the materiality of the cost associated with contaminated properties involve certain risks
that could cause actual results to vary from the stated expectations. Factors affecting such risks include future governmental regulations and/or cleanup standards or requirements, undiscovered information regarding the nature and volume of wastes
allegedly disposed of or released at these properties or other factors increasing the cost of remediation or the loss of other potentially responsible parties, that are financially capable of contributing towards cleanup costs.
Employees
As of February 22, 2002, we had more than
19,300 employees, including approximately 11,800 hourly and 7,500 salaried employees. About 14,900 employees are located in North America, approximately 5% of which are covered by collective bargaining agreements. Management believes that we
continue to maintain strong relations with our employees.
In March 2002, Steelcase was ranked 6th among the nation’s top ten
socially responsible companies in Fortune Magazine’s newly released listing of the nation’s most admired companies. Fortune Magazine used criteria such as innovation, financial soundness, social responsibility, quality of management, and
quality of products and services. We believe the survey recognizes our commitment to and participation in multiple social and community-related activities.
Item 2. Properties:
Our corporate headquarters is in Grand Rapids, Michigan. We have operations at
locations throughout the United States and around the world, including manufacturing facilities in Belgium, Brazil, Canada, Denmark, France, Germany, Italy, Japan, Malaysia, Mexico, Morocco, Portugal, Saudi Arabia, Spain, Thailand and the United
Kingdom. Our office, showroom, manufacturing and distribution facilities total approximately 25 million square feet, of which approximately 7 million square feet are leased. We believe that our facilities are in good
9
operating condition and are sufficient to meet current volume requirements as well as future volume increases. Our principal office, manufacturing and distribution facilities (300,000 square feet
or larger) are listed below:
|
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| |
| Location |
|
Business Segment |
|
Approximate Square Footage |
|
Owned or Leased |
|
Description of Use |
|
|
|
|
|
|
|
|
|
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
383,000 |
|
Owned |
|
Corporate Headquarters |
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
896,000 |
|
Owned |
|
Manufacturing |
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
1,207,000 |
|
Owned |
|
Manufacturing |
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
786,000 |
|
Owned |
|
Distribution Center |
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
867,000 |
|
Owned |
|
Manufacturing |
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
950,000 |
|
Owned |
|
Manufacturing |
| Grand Rapids, Michigan, U.S.A |
|
North America |
|
748,000 |
|
Owned |
|
Miscellaneous (1) |
| Gaines Township, Michigan, U.S.A |
|
North America |
|
599,000 |
|
Owned |
|
Corporate Development Center |
| Gaines Township, Michigan, U.S.A |
|
North America |
|
600,000 |
|
Owned |
|
Manufacturing |
| Kentwood, Michigan, U.S.A |
|
North America |
|
666,000 |
|
Owned |
|
Manufacturing |
| Kentwood, Michigan, U.S.A |
|
North America |
|
789,000 |
|
Owned |
|
Manufacturing |
| Kentwood, Michigan, U.S.A |
|
North America |
|
886,000 |
|
Owned |
|
Manufacturing |
| Kentwood, Michigan, U.S.A |
|
North America |
|
1,118,000 |
|
Owned |
|
Distribution Center |
| Lowell, Michigan, U.S.A |
|
North America |
|
480,000 |
|
Owned |
|
Manufacturing |
| Athens, Alabama, U.S.A |
|
North America |
|
777,000 |
|
Owned |
|
Manufacturing |
| Tustin, California, U.S.A |
|
North America |
|
1,044,000 |
|
Owned |
|
Manufacturing |
| New Paris, Indiana, U.S.A |
|
North America |
|
314,000 |
|
Owned |
|
Manufacturing |
| Fletcher, North Carolina, U.S.A |
|
North America |
|
895,000 |
|
Owned |
|
Manufacturing |
| Grand Prairie, Texas, U.S.A |
|
North America |
|
320,000 |
|
Owned |
|
Manufacturing |
| High Point, North Carolina, U.S.A. |
|
North America |
|
409,000 |
|
Owned |
|
Manufacturing |
| Markham, Ontario, Canada. |
|
North America |
|
725,000 |
|
Owned |
|
Manufacturing |
| Strasbourg, France. |
|
International |
|
386,000 |
|
Owned |
|
Manufacturing |
| Durlangen, Germany. |
|
International |
|
415,000 |
|
Leased |
|
Manufacturing |
| Madrid, Spain. |
|
International |
|
362,000 |
|
Owned |
|
Manufacturing |
| Kolbermoor, Germany. |
|
International |
|
335,000 |
|
Owned |
|
Manufacturing |
| Rosenheim, Germany. |
|
International |
|
368,700 |
|
Owned |
|
Manufacturing and Offices |
(1) |
|
Approximately 175,000 square feet is currently utilized for distribution, 150,000 square feet for showroom, 58,000 square feet for manufacturing, 64,000 square feet for our Corporate
Learning and Development Center and the balance for commercial leasing. |
Item 3. Legal Proceedings:
We are involved in litigation from time to time in the ordinary course of our business. Based on known information, we believe that we are not a party
to any lawsuit or proceeding that is likely to have a material adverse effect on the company. For a description of matters relating to our compliance with applicable environmental laws, rules and regulations, see ‘‘Environmental
Matters’’ in Item 1 of this Report.
Item 4. Submission of Matters to a Vote of Security Holders:
None.
10
Item 4(a). Executive Officers of the Registrant:
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| Executive Officers of the Registrant |
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| |
| Name |
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Age |
|
Position |
|
|
|
|
|
| Mark A. Baker |
|
42 |
|
Senior Vice President, Operations |
| Robert W. Black |
|
42 |
|
President, International |
| Jon D. Botsford |
|
47 |
|
Senior Vice President, Secretary and Chief Legal Officer |
| Mark T. Greiner |
|
50 |
|
Senior Vice President, Research & Development, Concepts and Ventures |
| James P. Hackett |
|
47 |
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President and Chief Executive Officer |
| Nancy W. Hickey |
|
50 |
|
Senior Vice President, Global Strategic Resources and Chief Administrative Officer |
| James P. Keane |
|
42 |
|
Senior Vice President, Chief Financial Officer |
| Michael Love |
|
53 |
|
President and Chief Executive Officer, Steelcase Design Partnership |
| James R. Stelter |
|
46 |
|
Senior Vice President, Sales, Marketing and Dealer Alliances |
Mark A. Baker has been Senior Vice President, Operations since November 2001. Mr.
Baker served as Vice President, Manufacturing Operations from March to November, 2001. From 1999 to 2001, Mr. Baker served as Vice President, Marketing. From 1998 to 1999 Mr. Baker served as Vice President and General Manager, Turnstone. From 1995
to 1998, Mr. Baker served as Vice President, Marketing.
Robert W. Black has been President, International since October 2000. Mr.
Black was Senior Vice President, Steelcase International from 1999 to 2000. From 1998 to 1999, Mr. Black served as Vice President, European Ventures. From 1996 to 1998, Mr. Black served as Vice President, Marketing.
Jon D. Botsford has been Senior Vice President, Secretary and Chief Legal Officer since June 2000. Mr. Botsford served as Senior Vice President, General
Counsel and Secretary from 1999 to 2000. From 1998 to 1999 Mr. Botsford Served as Vice President, General Counsel and Secretary. Mr. Botsford was General Counsel and Secretary from 1997 to 1998. From 1992 to 1997, Mr. Botsford held the position of
Assistant General Counsel.
Mark T. Greiner has been Senior Vice President, Research & Development, Concepts and Ventures since
February, 2001. From 1999 to 2001, Mr. Greiner held the position of Senior Vice President, Global E-Business and Chief Information Officer. Mr. Greiner served as Vice President, Chief Information Officer from 1996 to 1999.
James P. Hackett has been President and Chief Executive Officer of the company since December 1994. Mr. Hackett also serves as a Board Member to
Northwestern Mutual Life Insurance Company and Fifth Third Bancorp. Mr. Hackett served as a Director of Old Kent Financial Corporation until April 2, 2001, when it was acquired by Fifth Third Bancorp.
Nancy W. Hickey has been Senior Vice President, Global Strategic Resources and Chief Administrative Officer since November 2001. Ms. Hickey served as
Senior Vice President, Global Human Resources from March to November 2001. From 1999 to 2001, Ms. Hickey served as Vice President, Human Resources. Ms. Hickey served as Vice President, Corporate Human Resources from May to November 1999. From 1994
to 1999, Ms. Hickey served as Vice President, Dealer and Customer Alliances.
11
James P. Keane has been Senior Vice President, Chief Financial Officer since April 2001. Mr. Keane
served as Senior Vice President, Finance and Corporate Strategy from February to April 2001. From November 1999 to April 2001, Mr. Keane served as Senior Vice President, Corporate Strategy, Research and Development. Mr. Keane served as Vice
President, Corporate Strategy, Research and Development from June 1999 to November 1999. From January 1997 to June 1999, Mr. Keane served as Vice President, Corporate Strategy.
Michael Love has been President and Chief Executive Officer, Steelcase Design Partnership since May 2000. Mr. Love was president of Vecta, a division of Steelcase, from 1994 to May 2000.
James R. Stelter has been Senior Vice President, Sales, Marketing and Dealer Alliances since March 1998. From 1994 to 1998, Mr.
Stelter served as Senior Vice President for Steelcase Wood Furniture and Turnstone.
PART II
Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters:
The Class A Common Stock of Steelcase Inc. is listed on the New York Stock Exchange under the symbol ‘‘SCS’’. Our Class B Common Stock is neither registered under the
Securities Exchange Act of 1934 nor publicly traded. As of April 29, 2002, we had outstanding 35,684,382 shares of Class A Common Stock with 12,461 shareholders of record and 111,798,840 shares of Class B Common Stock with 206 shareholders of
record. The number of record shareholders do not include persons or entities holding stock in nominee or street name through brokers or banks.
|
|
|
|
|
|
|
|
|
| |
| Class A Common Stock Price Range |
|
First Quarter |
|
Second Quarter |
|
Third Quarter |
|
Fourth Quarter |
|
|
|
|
|
|
|
|
|
| Fiscal 2002 |
|
|
|
|
|
|
|
|
|
|
|
|
| High |
|
$ |
14.40 |
|
$ |
15.40 |
|
$ |
13.75 |
|
$ |
15.81 |
| Low |
|
$ |
11.35 |
|
$ |
11.95 |
|
$ |
11.75 |
|
$ |
12.90 |
| |
| Fiscal 2001 |
|
|
|
|
|
|
|
|
|
|
|
|
| High |
|
$ |
12.63 |
|
$ |
18.13 |
|
$ |
17.63 |
|
$ |
15.63 |
| Low |
|
$ |
10.50 |
|
$ |
12.00 |
|
$ |
15.50 |
|
$ |
12.63 |
We intend to continue to pay regular quarterly dividends. However, the declaration and
payment of dividends are subject to the discretion of the Board and to compliance with applicable law. The determination of the timing and amount of future dividends, if any, will depend upon our results of operations, financial condition, cash
requirements, future business prospects, general business conditions and other factors that the Board may deem relevant at the time. See Item 6 ‘‘Selected Financial Data’’ of this Report.
|
|
|
| |
| Total Dividends Paid (in millions) |
|
| Fiscal 2002 |
|
$ |
57.5 |
| Fiscal 2001 |
|
$ |
65.9 |
12
Item 6. Selected Financial Data:
|
|
|
|
|
|
|
|
|
|
|
| |
| Financial Highlights
(in millions, except per share and percentage of revenue data) |
|
February 22, 2002 |
|
|
February 23,
2001 |
|
|
February 25, 2000 (1) |
|
|
February 26, 1999 |
|
|
February 27, 1998 |
|
|
|
|
|
|
|
|
|
|
|
|
| Statement of Income Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue (2) |
|
$ |
3,089.5 |
|
|
$ |
4,049.0 |
|
|
$ |
3,474.8 |
|
|
$ |
2,873.3 |
|
|
$ |
2,884.1 |
|
| Revenue increase (decrease) |
|
|
(23.7 |
)% |
|
|
16.5 |
% |
|
|
20.9 |
% |
|
|
(0.4 |
)% |
|
|
14.6 |
% |
| Gross profit. |
|
$ |
933.4 |
|
|
$ |
1,308.7 |
|
|
$ |
1,130.9 |
|
|
$ |
1,008.4 |
|
|
$ |
1,019.0 |
|
| Gross profit—% of revenue |
|
|
30.2 |
% |
|
|
32.3 |
% |
|
|
32.5 |
% |
|
|
35.1 |
% |
|
|
35.3 |
% |
| Operating income |
|
$ |
19.7 |
|
|
$ |
306.4 |
|
|
$ |
274.5 |
|
|
$ |
325.9 |
|
|
$ |
327.7 |
|
| Operating income—% of revenue |
|
|
0.6 |
% |
|
|
7.6 |
% |
|
|
7.9 |
% |
|
|
11.3 |
% |
|
|
11.4 |
% |
| Net income |
|
$ |
1.0 |
|
|
$ |
193.7 |
|
|
$ |
184.2 |
|
|
$ |
221.4 |
|
|
$ |
217.0 |
|
| Net income—% of revenue |
|
|
0.0 |
% |
|
|
4.8 |
% |
|
|
5.3 |
% |
|
|
7.7 |
% |
|
|
7.5 |
% |
| Earnings Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share—basic |
|
$ |
0.01 |
|
|
$ |
1.30 |
|
|
$ |
1.21 |
|
|
$ |
1.44 |
|
|
$ |
1.40 |
|
| Earnings per share—diluted |
|
$ |
0.01 |
|
|
$ |
1.29 |
|
|
$ |
1.21 |
|
|
$ |
1.44 |
|
|
$ |
1.40 |
|
| Weighted average shares outstanding
—basic |
|
|
147.3 |
|
|
|
149.4 |
|
|
|
152.8 |
|
|
|
153.8 |
|
|
|
154.8 |
|
| Weighted average shares outstanding
—diluted |
|
|
147.7 |
|
|
|
149.8 |
|
|
|