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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________
FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 24, 2023
or
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to
Commission File Number 1-13873
___________________________________________________________
STEELCASE INC.
(Exact name of registrant as specified in its charter)
Michigan38-0819050
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
901 44th Street SE
Grand Rapids,Michigan49508
(Address of principal executive offices)(Zip Code)
(616247-2710
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common StockSCSNew York Stock Exchange
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      No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes      No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No 
As of December 15, 2023, Steelcase Inc. had 93,867,310 shares of Class A Common Stock and 20,354,413 shares of Class B Common Stock outstanding.


STEELCASE INC.
FORM 10-Q


FOR THE QUARTERLY PERIOD ENDED November 24, 2023

INDEX
  Page No. 
   
 
 
 
 
   



PART I. FINANCIAL INFORMATION

Item 1.Financial Statements:

STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except per share data)
 Three Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Revenue$777.9 $826.9 $2,384.4 $2,430.9 
Cost of sales525.5 587.7 1,611.2 1,748.4 
Restructuring costs0.1 1.4 2.9 2.3 
Gross profit252.3 237.8 770.3 680.2 
Operating expenses206.5 208.1 663.0 630.4 
Restructuring costs2.0 9.2 15.2 13.0 
Operating income43.8 20.5 92.1 36.8 
Interest expense(6.4)(7.6)(19.6)(21.2)
Investment income2.3 0.3 3.6 0.7 
Other income, net0.9 3.4 4.4 10.9 
Income before income tax expense40.6 16.6 80.5 27.2 
Income tax expense9.8 5.2 20.7 7.6 
Net income$30.8 $11.4 $59.8 $19.6 
Earnings per share:    
Basic$0.26 $0.10 $0.50 $0.17 
Diluted$0.26 $0.10 $0.50 $0.17 
Dividends declared and paid per common share$0.100 $0.100 $0.300 $0.390 
    
See accompanying notes to the condensed consolidated financial statements.
1

STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(in millions)

 Three Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Net income$30.8 $11.4 $59.8 $19.6 
Other comprehensive income (loss), net:
Unrealized gain (loss) on investment0.4 (0.1)0.4 (0.1)
Pension and other post-retirement liability adjustments(0.2)(0.4)(1.5)(0.2)
Derivative amortization0.2 0.2 0.7 0.7 
Foreign currency translation adjustments0.7 8.8 8.1 (31.1)
Total other comprehensive income (loss), net1.1 8.5 7.7 (30.7)
Comprehensive income (loss)$31.9 $19.9 $67.5 $(11.1)

See accompanying notes to the condensed consolidated financial statements.
2

STEELCASE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
November 24,
2023
February 24,
2023
ASSETS
Current assets:  
Cash and cash equivalents$262.0 $90.4 
Accounts receivable, net of allowance of $6.3 and $6.5354.5 373.3 
Inventories259.8 319.7 
Prepaid expenses31.0 28.9 
Assets held for sale19.3 29.0 
Other current assets42.2 42.7 
Total current assets968.8 884.0 
Property, plant and equipment, net of accumulated depreciation of $1,116.8 and $1,088.6362.2 376.5 
Company-owned life insurance ("COLI")162.6 157.3 
Deferred income taxes117.6 117.3 
Goodwill274.9 276.8 
Other intangible assets, net of accumulated amortization of $110.6 and $97.698.8 111.2 
Investments in unconsolidated affiliates52.6 51.1 
Right-of-use operating lease assets171.7 198.3 
Other assets37.7 30.3 
Total assets$2,246.9 $2,202.8 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:  
Accounts payable$231.6 $203.5 
Short-term borrowings and current portion of long-term debt 35.7 
Current operating lease obligations45.0 44.7 
Accrued expenses:  
Employee compensation150.1 120.0 
Employee benefit plan obligations35.1 31.2 
Accrued promotions20.2 26.7 
Customer deposits54.0 50.8 
Other94.6 90.7 
Total current liabilities630.6 603.3 
Long-term liabilities:  
Long-term debt less current maturities446.1 445.5 
Employee benefit plan obligations100.4 103.0 
Long-term operating lease obligations142.1 169.9 
Other long-term liabilities51.8 54.9 
Total long-term liabilities740.4 773.3 
Total liabilities1,371.0 1,376.6 
Shareholders’ equity:  
Additional paid-in capital37.3 19.4 
Accumulated other comprehensive income (loss)(64.8)(72.5)
Retained earnings903.4 879.3 
Total shareholders’ equity875.9 826.2 
Total liabilities and shareholders’ equity$2,246.9 $2,202.8 

See accompanying notes to the condensed consolidated financial statements.
3

STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(in millions, except share and per share data)
Three Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Changes in common shares outstanding:
Common shares outstanding, beginning of period114,003,058 112,762,002 112,988,721 112,109,294 
Common stock issuances32,943 26,047 108,724 68,428 
Common stock repurchases(82,717)(64,184)(512,707)(343,485)
Performance and restricted stock units issued as common stock246,150 212,936 1,614,696 1,102,564 
Common shares outstanding, end of period114,199,434 112,936,801 114,199,434 112,936,801 
Changes in additional paid-in capital (1):
Additional paid-in capital, beginning of period$34.6 $13.7 $19.4 $1.5 
Common stock issuances0.2 0.3 0.8 0.8 
Common stock repurchases(0.9)(0.5)(4.2)(3.9)
Performance and restricted stock units expense3.4 2.1 21.3 17.2 
Additional paid-in capital, end of period37.3 15.6 37.3 15.6 
Changes in accumulated other comprehensive income (loss):
Accumulated other comprehensive income (loss), beginning of period(65.9)(89.8)(72.5)(50.6)
Other comprehensive income (loss)1.1 8.5 7.7 (30.7)
Accumulated other comprehensive income (loss), end of period(64.8)(81.3)(64.8)(81.3)
Changes in retained earnings:
Retained earnings, beginning of period884.4 875.5 879.3 901.3 
Net income30.8 11.4 59.8 19.6 
Dividends paid(11.8)(11.6)(35.7)(45.6)
Retained earnings, end of period903.4 875.3 903.4 875.3 
Total shareholders' equity$875.9 $809.6 $875.9 $809.6 
_______________________________________
(1)Shares of our Class A and Class B common stock have no par value; thus, there are no balances for common stock.
See accompanying notes to the condensed consolidated financial statements.

4

STEELCASE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
 Nine Months Ended
November 24,
2023
November 25,
2022
OPERATING ACTIVITIES  
Net income$59.8 $19.6 
Depreciation and amortization62.8 67.2 
Share-based compensation22.1 18.0 
Restructuring costs18.1 15.3 
Change in fair value of contingent consideration(9.5) 
Other(12.4)(4.3)
Changes in operating assets and liabilities:  
Accounts receivable5.8 (68.1)
Inventories59.8 (48.2)
Income taxes receivable(4.6)25.4 
Other assets0.3 (15.7)
Accounts payable30.2 7.8 
Employee compensation liabilities17.3 17.0 
Employee benefit obligations(1.7)(14.0)
Customer deposits5.1 (19.8)
Accrued expenses and other liabilities(1.8)1.2 
Net cash provided by operating activities251.3 1.4 
INVESTING ACTIVITIES  
Capital expenditures(37.4)(42.8)
Proceeds from disposal of fixed assets28.2 5.6 
Acquisition, net of cash acquired (105.3)
Other4.0 15.0 
Net cash used in investing activities(5.2)(127.5)
FINANCING ACTIVITIES  
Dividends paid(35.7)(45.6)
Borrowings on global committed bank facility69.0 480.9 
Repayments on global committed bank facility(69.0)(446.9)
Repayments on note payable(32.2)(2.1)
Other(6.1)(2.9)
Net cash used in financing activities(74.0)(16.6)
Effect of exchange rate changes on cash and cash equivalents(0.2)(2.6)
Net increase (decrease) in cash, cash equivalents and restricted cash171.9 (145.3)
Cash and cash equivalents and restricted cash, beginning of period (1)97.2 207.0 
Cash and cash equivalents and restricted cash, end of period (2)$269.1 $61.7 
_______________________________________
(1)These amounts include restricted cash of $6.8 and $6.1 as of February 24, 2023 and February 25, 2022, respectively.
(2)These amounts include restricted cash of $7.1 and $6.7 as of November 24, 2023 and November 25, 2022, respectively.
Restricted cash primarily represents funds held in escrow for potential future workers’ compensation and product liability claims. The restricted cash balance is included as part of Other assets on the Condensed Consolidated Balance Sheets.
See accompanying notes to the condensed consolidated financial statements.
5

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions in Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and adjustments) considered necessary for a fair presentation of the condensed consolidated financial statements have been included. Results for interim periods should not be considered indicative of results to be expected for a full year. Reference should be made to the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended February 24, 2023 (“Form 10-K”). The Condensed Consolidated Balance Sheet as of February 24, 2023 was derived from the audited Consolidated Balance Sheet included in our Form 10-K.
As used in this Quarterly Report on Form 10-Q (“Report”), unless otherwise expressly stated or the context otherwise requires, all references to “Steelcase,” “we,” “our,” “Company” and similar references are to Steelcase Inc. and its subsidiaries in which a controlling interest is maintained. Unless the context otherwise indicates, reference to a year relates to the fiscal year, ended in February of the year indicated, rather than a calendar year. Additionally, Q1, Q2, Q3 and Q4 reference the first, second, third and fourth quarter, respectively, of the fiscal year indicated. All amounts are in millions, except share and per share data, data presented as a percentage or as otherwise indicated.
2.NEW ACCOUNTING STANDARDS
We evaluate all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB") for consideration of their applicability to our consolidated financial statements. We have assessed all ASUs issued but not yet adopted and concluded that those not disclosed are either not applicable to us or are not expected to have a material effect on our consolidated financial statements.
Adoption of New Accounting Standards
Effective Q1 2024, we adopted ASU No. 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50), which is intended to enhance transparency of supplier finance programs by requiring disclosure of key terms, amounts outstanding (including a rollforward of outstanding amounts) and a description of where such amounts are presented in the consolidated financial statements.
We participate in a supplier finance program in Spain offered by a third-party financial institution. The program allows participating suppliers the ability to finance our payment obligations prior to their scheduled due dates at a discounted price set by the financial institution. We have extended payment terms with suppliers that have voluntarily chosen to participate in the program. As of November 24, 2023, the outstanding amount of program obligations, reported in Accounts payable on the Condensed Consolidated Balance Sheets, was $0.7. The amount settled through the program during the nine months ended November 24, 2023 was $6.5.
6

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
3.REVENUE
Disaggregation of Revenue
The following table provides information about disaggregated revenue by product category for each of our reportable segments:
Product Category DataThree Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Americas
Desking, benching, systems and storage$262.6 $263.7 $799.5 $827.4 
Seating152.5 174.1 492.5 533.6 
Other (1)171.0 182.0 546.2 479.6 
International
Desking, benching, systems and storage70.0 69.4 194.2 200.3 
Seating67.3 76.3 190.7 215.0 
Other (1)54.5 61.4 161.3 175.0 
$777.9 $826.9 $2,384.4 $2,430.9 
_______________________________________
(1)The other product category data by segment consists primarily of products sold by consolidated dealers, textiles and surface materials, worktools, architecture and other uncategorized product lines and services, less promotions and incentives on all product categories.

Reportable geographic information is as follows:
Reportable Geographic RevenueThree Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
United States$541.5 $576.0 $1,715.5 $1,712.3 
Foreign locations236.4 250.9 668.9 718.6 
$777.9 $826.9 $2,384.4 $2,430.9 
Contract Balances
At times, we receive payments from customers before revenue is recognized, resulting in the recognition of a contract liability (Customer deposits) presented on the Condensed Consolidated Balance Sheets.
Changes in the Customer deposits balance for the nine months ended November 24, 2023 are as follows:
Customer Deposits
Balance as of February 24, 2023$50.8 
Recognition of revenue related to beginning of year customer deposits(46.5)
Customer deposits received, net of revenue recognized during the period51.7 
Other (1)(2.0)
Balance as of November 24, 2023$54.0 
_______________________________________
(1)Represents customer deposits transferred in the divestiture of a consolidated dealer.
7

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4.EARNINGS PER SHARE
Earnings per share is computed using the two-class method. The two-class method determines earnings per share for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Participating securities represent restricted stock units in which the participants have non-forfeitable rights to dividend equivalents during the performance period. Diluted earnings per share includes the effects of certain performance units in which the participants have forfeitable rights to dividend equivalents during the performance period.
Computation of
Earnings Per Share
Three Months Ended November 24, 2023
Three Months Ended November 25, 2022
Net IncomeBasic Shares
(in millions)
Diluted Shares
(in millions)
Net IncomeBasic Shares
(in millions)
Diluted Shares
(in millions)
Amounts used in calculating earnings per share$30.8 118.9 119.4 $11.4 117.2 117.6 
Impact of participating securities (1.2)(4.7)(4.7)(0.4)(4.4)(4.4)
Amounts used in calculating earnings per share, excluding participating securities$29.6 114.2 114.7 $11.0 112.8 113.2 
Earnings per share$0.26 $0.26 $0.10 $0.10 
Computation of
Earnings Per Share
Nine Months Ended November 24, 2023
Nine Months Ended November 25, 2022
Net IncomeBasic Shares
(in millions)
Diluted Shares
(in millions)
Net IncomeBasic Shares
(in millions)
Diluted Shares
(in millions)
Amounts used in calculating earnings per share$59.8 118.5 119.0 $19.6 117.1 117.4 
Impact of participating securities (2.3)(4.5)(4.5)(0.7)(4.3)(4.3)
Amounts used in calculating earnings per share, excluding participating securities$57.5 114.0 114.5 $18.9 112.8 113.1 
Earnings per share$0.50 $0.50 $0.17 $0.17 
There were no anti-dilutive performance units excluded from the computation of diluted earnings per share for the three and nine months ended November 24, 2023 and November 25, 2022.
8

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
5.ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended November 24, 2023:
Unrealized gain (loss) on investmentPension and other post-retirement liability adjustmentsDerivative amortizationForeign currency translation adjustmentsTotal
Balance as of August 25, 2023$(0.1)$8.0 $(5.2)$(68.6)$(65.9)
Other comprehensive income (loss) before reclassifications0.4 0.2  0.7 1.3 
Amounts reclassified from accumulated other comprehensive income (loss) (0.4)0.2  (0.2)
Net other comprehensive income (loss) during the period0.4 (0.2)0.2 0.7 1.1 
Balance as of November 24, 2023$0.3 $7.8 $(5.0)$(67.9)$(64.8)
The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the nine months ended November 24, 2023:
Unrealized gain (loss) on investmentPension and other post-retirement liability adjustmentsDerivative amortizationForeign currency translation adjustmentsTotal
Balance as of February 24, 2023$(0.1)$9.3 $(5.7)$(76.0)$(72.5)
Other comprehensive income (loss) before reclassifications0.4 (0.2) 8.1 8.3 
Amounts reclassified from accumulated other comprehensive income (loss) (1.3)0.7  (0.6)
Net other comprehensive income (loss) during the period0.4 (1.5)0.7 8.1 7.7 
Balance as of November 24, 2023$0.3 $7.8 $(5.0)$(67.9)$(64.8)

The following table provides details about reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended November 24, 2023 and November 25, 2022:

Detail of Accumulated Other
Comprehensive Income (Loss) Components
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)Affected Line in the Condensed Consolidated Statements of Income
Three Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Amortization of pension and other post-retirement actuarial gains$(0.5)$(0.4)$(1.7)$(1.2)Other income, net
Income tax expense0.1 0.1 0.4 0.3 Income tax expense
(0.4)(0.3)(1.3)(0.9)
Derivative amortization0.2 0.3 0.9 1.0 Interest expense
Income tax benefit (0.1)(0.2)(0.3)Income tax expense
0.2 0.2 0.7 0.7 
Total reclassifications$(0.2)$(0.1)$(0.6)$(0.2)
9

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
6.FAIR VALUE
The carrying amounts for many of our financial instruments, including cash and cash equivalents, accounts and notes receivable, accounts payable, short-term borrowings and certain other liabilities, approximate their fair value due to their relatively short maturities. Our foreign exchange forward contracts, long-term investments and contingent consideration are measured at fair value on the Condensed Consolidated Balance Sheets.
Our total debt is carried at cost and was $446.1 and $481.2 as of November 24, 2023 and February 24, 2023, respectively. The fair value of our total debt is measured using a discounted cash flow analysis based on current market interest rates for similar types of instruments and was $405.4 and $405.9 as of November 24, 2023 and February 24, 2023, respectively. The estimation of the fair value of our total debt is based on Level 2 fair value measurements.
We may use derivative financial instruments to manage exposures to movements in foreign exchange rates and interest rates. The use of these financial instruments modifies the exposure of these risks with the intention to reduce our risk of volatility. We do not use derivatives for speculative or trading purposes.

In connection with the acquisition of Viccarbe Habitat, S.L in Q3 2022, up to an additional $14.2 (or €13.0) is payable to the sellers based upon the achievement of certain revenue and operating income targets over a three-year period ending in 2025. This amount was considered to be contingent consideration and was treated for accounting purposes as part of the total purchase price of the acquisition. We used the Monte Carlo simulation model to calculate the fair value of the contingent consideration as of the acquisition date, which represents a Level 3 measurement. At each subsequent reporting date, changes in the fair value of the liability are recorded to Operating expenses until the liability is settled. In Q3 2024, we recorded a $9.5 decrease to the fair value of the contingent consideration based upon updated projections for the Viccarbe business over the earnout period.

10

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Assets and liabilities measured at fair value within our Condensed Consolidated Balance Sheets as of November 24, 2023 and February 24, 2023 are summarized below:
 November 24, 2023
Fair Value of Financial InstrumentsLevel 1Level 2Level 3Total
Assets:    
Cash and cash equivalents$262.0 $ $ $262.0 
Restricted cash7.1   7.1 
Foreign exchange forward contracts 2.1  2.1 
Auction rate security  2.7 2.7 
 $269.1 $2.1 $2.7 $273.9 
Liabilities:
Foreign exchange forward contracts$ $(0.3)$ $(0.3)
Contingent consideration    
 $ $(0.3)$ $(0.3)
 February 24, 2023
Fair Value of Financial InstrumentsLevel 1Level 2Level 3Total
Assets:    
Cash and cash equivalents$90.4 $ $ $90.4 
Restricted cash6.8   6.8 
Foreign exchange forward contracts 2.3  2.3 
Auction rate security  2.1 2.1 
 $97.2 $2.3 $2.1 $101.6 
Liabilities:    
Foreign exchange forward contracts$ $(0.3)$ $(0.3)
Contingent consideration  (9.5)(9.5)
 $ $(0.3)$(9.5)$(9.8)
Below is a roll-forward of assets and liabilities measured at estimated fair value using Level 3 inputs during the nine months ended November 24, 2023:

Roll-forward of Fair Value Using Level 3 Inputs
Auction Rate
Security - Other Assets
Contingent Consideration - Other Long-Term Liabilities
Balance as of February 24, 2023$2.1 $9.5 
Unrealized gain (loss) on investment0.6 — 
Foreign currency (gain) loss—  
Change in estimated fair value— (9.5)
Balance as of November 24, 2023$2.7 $ 
11

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
7.INVENTORIES
InventoriesNovember 24,
2023
February 24,
2023
Raw materials and work-in-process$176.6 $232.8 
Finished goods113.5 118.1 
 290.1 350.9 
Revaluation to LIFO30.3 31.2 
 $259.8 $319.7 
The portion of inventories determined by the LIFO method aggregated to $122.3 and $134.1 as of November 24, 2023 and February 24, 2023, respectively.
8.SHORT-TERM BORROWINGS
We have a $250.0 global committed bank facility, which expires in 2025. At our option, and subject to certain conditions, we may increase the aggregate commitment under the facility by up to $125.0 by obtaining at least one commitment from one or more lenders. In Q1 2024, the credit facility was amended. As amended, interest on borrowings under the facility is based on the rate selected by us from the following options (with all capitalized terms having the meanings provided in the credit agreement, as amended):
the Applicable Floating Rate Margin in effect plus the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus 0.5%, (iii) the Term SOFR Reference Rate for a one-month interest period plus 1.10% or (iv) 0.75%;
the Applicable Term Benchmark/RFR Margin in effect plus (i) for borrowings in U.S. dollars, the Term SOFR Reference Rate plus 0.10%, or (ii) for borrowings in euros, the Adjusted EURIBOR Rate; or
the Applicable Term Benchmark/RFR Margin in effect plus the Daily Simple SOFR Rate plus 0.10%.
In Q1 2024, we borrowed and repaid $67.2 under the facility to fund our operations and the balloon payment of $31.8 for a note payable that matured during the quarter. In Q2 2024, we borrowed and repaid $1.8 under the facility. In Q3 2024, there were no additional borrowings or repayments under the facility, and as of November 24, 2023, there were no borrowings outstanding under the facility.
12

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
9.     SHARE-BASED COMPENSATION
Performance Units
We have issued performance units (“PSUs”) to certain employees which are earned over a three-year performance period based on performance conditions established annually by the Compensation Committee within the first three months of the applicable fiscal year. The PSUs are then modified based on achievement of certain total shareholder return results relative to a comparison group of companies, which is a market condition. When the performance conditions for a fiscal year are established, or if the performance conditions involve a qualitative assessment and such assessment has been made, one-third of the PSUs issued are considered granted. Therefore, each of the three fiscal years within the performance period is considered an individual tranche of the award (referred to as "Tranche 1," "Tranche 2" and "Tranche 3," respectively).
As of November 24, 2023, the following PSUs have been issued and remained outstanding:
767,600 PSUs to be earned over the period of 2024 through 2026 (the "2024 PSUs"),
428,700 PSUs to be earned over the period of 2023 through 2025 (the "2023 PSUs") and
448,300 PSUs to be earned over the period of 2022 through 2024 (the "2022 PSUs").
Once granted, the PSUs are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the remaining performance period. For participants who are or become retirement-eligible during the performance period, the PSUs are expensed over the period ending on the date the participant becomes retirement-eligible. The awards will be forfeited if a participant leaves the company for reasons other than retirement, disability or death or if the participant engages in any competition with us, as defined in the Incentive Compensation Plan.
As of November 24, 2023, the 2024 PSUs, 2023 PSUs and 2022 PSUs were considered granted as follows:
In Q1 2024, the performance conditions were established for Tranche 1 of the 2024 PSUs, Tranche 2 of the 2023 PSUs and Tranche 3 of the 2022 PSUs, and accordingly, such tranches were considered granted in Q1 2024.
In Q1 2023, the performance conditions were established for Tranche 1 of the 2023 PSUs and Tranche 2 of the 2022 PSUs, and accordingly, such tranches were considered granted in Q1 2023.
In Q1 2022, the performance conditions were established for Tranche 1 of the 2022 PSUs, and accordingly, such tranche was considered granted in Q1 2022.
We used the Monte Carlo simulation model to calculate the fair value of the market conditions on the respective grant dates, which resulted in a total fair value of $4.5, $3.5 and $2.3 for the PSUs with market conditions granted in 2024, 2023 and 2022, respectively, that remained outstanding as of November 24, 2023. The Monte Carlo simulation was computed using the following assumptions:
2024 PSUs2023 PSUs2022 PSUs
Tranche 1Tranche 2Tranche 1Tranche 3Tranche 2Tranche 1
Risk-free interest rate (1)3.7 %4.0 %2.6 %4.7 %2.3 %0.3 %
Expected term3 years2 years3 years1 year2 years3 years
Estimated volatility (2)44.1 %37.8 %52.2 %45.5 %43.8 %53.5 %
_______________________________________
(1)Based on the U.S. Government bond benchmark on the grant date.
(2)Represents the historical price volatility of our Class A Common Stock for the period prior to the grant date which is equivalent to the expected term of the tranche.

13

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The total PSU expense (credit) and associated tax benefit (expense) recorded during the three and nine months ended November 24, 2023 and November 25, 2022 are as follows:
 Three Months EndedNine Months Ended
Performance UnitsNovember 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Expense (credit)$0.1 $(1.3)$6.3 $2.6 
Tax benefit (expense) (0.3)1.5 0.7 
The PSU activity for the nine months ended November 24, 2023 is as follows:
Maximum Number of Shares of Nonvested UnitsTotalWeighted-Average
Grant Date
Fair Value
per Unit
Nonvested as of February 24, 20231,060,231 $13.11 
Granted1,315,664 8.30 
Nonvested as of November 24, 20232,375,895 $10.44 
As of November 24, 2023, there was $2.6 of remaining unrecognized compensation expense related to nonvested PSUs, which is expected to be recognized over a remaining weighted-average period of 1.8 years.
Restricted Stock Units
During the nine months ended November 24, 2023, we awarded 1,767,505 restricted stock units ("RSUs") to certain employees. RSUs have restrictions on transfer which lapse up to three years after the date of grant, at which time the RSUs are issued as unrestricted shares of Class A Common Stock. RSUs are expensed and recorded in Additional paid-in capital on the Condensed Consolidated Balance Sheets over the requisite service period based on the value of the shares on the grant date. For participants who are or become retirement-eligible during the service period for awards that are considered retirement-eligible, the RSUs are expensed over the period ending on the date that the participant becomes retirement-eligible. Typically, these awards will be forfeited if a participant leaves the company for reasons other than retirement, disability or death or if the participant engages in any competition with us, as defined in the Incentive Compensation Plan.
The total RSU expense and associated tax benefit for the nine months ended November 24, 2023 and November 25, 2022 are as follows:
 Three Months EndedNine Months Ended
Restricted Stock UnitsNovember 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Expense$3.3 $3.4 $15.0 $14.6 
Tax benefit0.8 0.9 3.7 3.7 
The RSU activity for the nine months ended November 24, 2023 is as follows:
Nonvested UnitsTotalWeighted-Average
Grant Date
Fair Value
per Unit
Nonvested as of February 24, 20233,293,268 $12.11 
Granted1,767,505 8.31 
Vested(269,934)11.65 
Forfeited(65,580)10.48 
Nonvested as of November 24, 20234,725,259 $10.74 
As of November 24, 2023, there was $12.3 of remaining unrecognized compensation expense related to nonvested RSUs, which is expected to be recognized over a remaining weighted-average period of 1.8 years.

14

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
10.     LEASES
We have operating leases for corporate offices, sales offices, showrooms, manufacturing and distribution facilities, vehicles and equipment that expire at various dates through 2035. Certain lease agreements include contingent rental payments based on per unit usage over contractual levels (e.g., miles driven or machine hours operated) and others include rental payments adjusted periodically for inflationary indexes. Additionally, some leases include options to renew or terminate the leases which can be exercised at our discretion.
The components of lease expense during the three and nine months ended November 24, 2023 and November 25, 2022 are as follows:
Three Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Operating lease cost$13.7 $13.2 $40.9 $38.8 
Sublease rental income(0.5)(0.6)(1.5)(1.7)
$13.2 $12.6 $39.4 $37.1 
Supplemental cash flow and other information related to leases during the three and nine months ended November 24, 2023 and November 25, 2022 is as follows:
Three Months EndedNine Months Ended
November 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Cash flow information:
Operating cash flows used for operating leases$14.4 $13.3 $42.1 $40.4 
Leased assets obtained in exchange for new operating lease obligations4.5 11.7 12.1 25.2 
As of November 24, 2023 and February 24, 2023, the weighted-average remaining lease terms were 4.9 years and 5.3 years, respectively, and the weighted-average discount rates were 4.5% and 4.2%, respectively.
The following table summarizes the future minimum lease payments as of November 24, 2023:
Fiscal year ending in FebruaryAmount (1)
2024$12.0 
202552.4 
202642.5 
202734.3 
202826.1 
Thereafter41.9 
Total lease payments209.2 
Less: Interest22.1 
Present value of lease liabilities$187.1 
_______________________________________
(1)Lease payments include options to extend lease terms that are reasonably certain of being exercised. The payments exclude legally binding minimum lease payments for leases signed but not yet commenced.

15

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
11.ACQUISITION
HALCON
In Q2 2023, we acquired Halcon Furniture LLC ("HALCON"), a Minnesota-based designer and manufacturer of precision-tailored wood furniture for the workplace. The transaction included the purchase of all the outstanding membership interests of HALCON for $127.5 less customer deposits of $24.3, plus an adjustment of $1.9 for working capital. The acquisition was funded using a combination of cash on-hand and borrowings under our global committed bank facility. An additional $2.0 is payable to a seller based upon continued employment over a three-year period, which is being expensed over the service period on a straight-line basis.
Tangible assets and liabilities of HALCON were valued as of the acquisition date using a market analysis, and intangible assets were valued using a discounted cash flow analysis, which represents a Level 3 measurement. On the acquisition date, we recorded $51.8 related to identifiable intangible assets, $36.6 related to goodwill and $16.7 related to tangible assets. The tangible assets mainly consisted of property, plant and equipment of $30.6, working capital (primarily inventory of $12.8) and customer deposits of $24.3. The goodwill was recorded in the Americas segment and is deductible for U.S. income tax purposes. The goodwill resulting from the acquisition is primarily related to the growth potential of HALCON expected to be driven by new product development, geographic expansion and the integration of HALCON products into our dealer network. Intangible assets are principally related to dealer relationships, the HALCON trade name and internally developed know-how and designs, which are being amortized over periods ranging from 9 to 10 years from the date of acquisition. We also acquired a backlog of orders which shipped throughout 2023. The purchase accounting for the HALCON acquisition was completed during the current year.
The following table summarizes the purchased identified intangible assets and the respective fair value and useful life of each asset at the date of acquisition:
Other Intangible Assets
Useful Life
(Years)
Fair Value
Dealer relationships10.0$21.5 
Trademark9.014.0 
Know-how and designs9.012.0 
Backlog0.74.3 
$51.8 
    
The fair values of the purchased intangible assets are being amortized on a straight-line basis over their useful lives. The following table summarizes the estimated future amortization expense for the next five years as of November 24, 2023:
Fiscal Year Ending in FebruaryAmount
2024$1.3 
20255.1 
20265.0 
20275.0 
20285.0 
$21.4 

16

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
12.     REPORTABLE SEGMENTS
As of the end of Q1 2024, we realigned our reportable segments for financial reporting purposes as a result of changes in how we monitor business performance and allocate resources to support our top strategic priorities. During Q1 2024, we simplified our internal reporting to summarize the results of all brands by geography including utilization of previously unallocated Corporate expenses. This change is parallel to the organizational structure that is used by our Chief Executive Officer in the capacity as chief operating decision maker ("CODM") for making operating and investment decisions and assessing business performance.
The operating segments regularly reviewed by the CODM are (1) the Americas, (2) Europe, the Middle East and Africa ("EMEA") and (3) Asia Pacific. Asia Pacific serves customers in Australia, China, India, Japan, Korea and other countries in Southeast Asia. We primarily review and evaluate revenue, gross profit and operating income (loss) by these segments in our internal review processes and reporting. We also allocate resources among these segments primarily based on revenue, gross profit and operating income (loss). Total assets by segment include manufacturing and other assets associated with each segment.
For purposes of segment reporting externally, we have aggregated the EMEA and Asia Pacific operating segments as an International segment based upon their similarity in certain quantitative and qualitative characteristics as defined in the Accounting Standards Codification ("ASC") 280, Segment Reporting. We evaluated the economic similarity of these operating segments including patterns and trends for revenue, gross profit and operating income (loss) in addition to the similarity in the nature of products and services, types of customers, and production and distribution processes in these regions. We concluded that these operating segments met the criteria for aggregation consistent with the basic principles and objectives of segment reporting described in ASC 280. The change in our reportable segments did not result in a change to our reporting units for purposes of goodwill impairment testing.
The Americas segment serves customers in the U.S., Canada, the Caribbean Islands and Latin America with a comprehensive portfolio of furniture, architectural, textile and surface imaging products that are marketed to corporate, government, healthcare, education and retail customers primarily through the Steelcase, AMQ, Coalesse, Designtex, HALCON, Orangebox, Smith System and Viccarbe brands.
The International segment serves customers in EMEA and Asia Pacific with a comprehensive portfolio of furniture and architectural products that are marketed to corporate, government, education and retail customers primarily through the Steelcase, Coalesse, Orangebox, Smith System and Viccarbe brands.
As required by ASC 280, all presented segment data reflects the reclassification of previously reported segment data. Revenue, gross profit and operating income (loss) for the three and nine months ended November 24, 2023 and November 25, 2022 and total assets and goodwill as of November 24, 2023 and February 24, 2023 by segment are presented in the following tables which reflect the realigned segments:
 Three Months EndedNine Months Ended
Reportable Segment Statement of Income DataNovember 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Revenue  
Americas$586.1 $619.8 $1,838.2 $1,840.6 
International191.8 207.1 546.2 590.3 
 $777.9 $826.9 $2,384.4 $2,430.9 
Gross Profit  
Americas$192.8 $181.2 $612.3 $526.2 
International59.5 56.6 158.0 154.0 
 $252.3 $237.8 $770.3 $680.2 
Operating Income (Loss)
Americas$37.2 $17.3 $117.0 $44.2 
International6.6 3.2 (24.9)(7.4)
$43.8 $20.5 $92.1 $36.8 
17

STEELCASE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Reportable Segment Balance Sheet DataNovember 24,
2023
February 24,
2023
Total assets  
Americas$1,663.1 $1,631.2 
International583.8 571.6 
 $2,246.9 $2,202.8 
Goodwill
Americas$266.2 $268.3 
International8.7 8.5 
$274.9 $276.8 

13.     RESTRUCTURING ACTIVITIES
In Q4 2023, we implemented a series of restructuring actions, primarily related to the wind down of our customer aviation function in connection with our strategy to reinvent our go-to-market model and create new customer experiences. The restructuring actions included terminations of approximately 25 salaried employees in the Americas segment. We expect to incur approximately $4.5 of restructuring costs in the Americas segment related to these actions, consisting of cash severance payments and other separation-related benefits. We incurred $0.1, $0.1, and $0.7 of restructuring costs in the Americas segment for these actions in Q3 2024, Q2 2024, and Q1 2024, respectively. We also incurred $3.6 of workforce reductions and other separation-related benefits in the Americas segment for these actions in Q4 2023. We expect these actions to be completed by the end of 2024.
In Q1 2024, we announced a series of restructuring actions in response to continued decline in order volume, persisting inflationary pressures, and decreasing plant utilization. These actions involve the involuntary terminations of approximately 40 to 50 salaried roles in EMEA, the elimination of approximately 240 positions in Asia Pacific, and the involuntary terminations of approximately 30 employees in the Americas in connection with the closing of our regional distribution center in Atlanta, Georgia. We expect to incur restructuring costs of approximately $16 to $18 in the International segment and approximately $1 in the Americas segment related to these actions, consisting of cash severance payments and other separation-related benefits. We incurred restructuring costs of $1.5, $7.8, and $6.8 in the International segment for these actions in Q3 2024, Q2 2024, and Q1 2024, respectively. We also incurred $0.6 in the Americas segment for these actions during Q1 2024. We expect these actions to be substantially completed by the end of 2024.
The following table details the changes in the restructuring reserve balance for the nine months ended November 24, 2023:
Workforce Reductions
Balance as of February 24, 2023$4.0 
Restructuring costs17.8 
Payments(7.3)
Balance as of November 24, 2023$14.5 
18

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations:
This management’s discussion and analysis of financial condition and results of operations ("MD&A") should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 24, 2023. Reference to a year relates to the fiscal year, ended in February of the year indicated, rather than the calendar year, unless indicated by a specific date. Additionally, Q1, Q2, Q3 and Q4 reference the first, second, third and fourth quarter, respectively, of the fiscal year indicated. All amounts are in millions, except share and per share data, data presented as a percentage or as otherwise indicated.
This item contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the condensed consolidated statements of operations, balance sheets or statements of cash flows of the company. The non-GAAP financial measures used are (1) organic revenue growth (decline), (2) adjusted operating income (loss) and (3) adjusted earnings per share. Pursuant to the requirements of Regulation G, we have provided a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure in the tables below. These measures are supplemental to, and should be used in conjunction with, the most comparable GAAP measures. Management uses these non-GAAP financial measures to monitor and evaluate financial results and trends. See Non-GAAP Financial Measures for a description of these measures and why management believes they are also useful to investors.
Financial Summary

Our reportable segments consist of the Americas segment and the International segment. See Note 12 to the condensed consolidated financial statements for additional information.
Results of Operations
 Three Months EndedNine Months Ended
Statement of Operations DataNovember 24,
2023
November 25,
2022
November 24,
2023
November 25,
2022
Revenue$777.9 100.0 %$826.9 100.0 %$2,384.4 100.0 %$2,430.9 100.0 %
Cost of sales525.5 67.6 587.7 71.0 1,611.2 67.6 1,748.4 71.9 
Restructuring costs0.1 — 1.4 0.2 2.9 0.1 2.3 0.1 
Gross profit252.3 32.4 237.8 28.8 770.3 32.3 680.2 28.0 
Operating expenses206.5 26.5 208.1 25.2 663.0 27.8 630.4 26.0 
Restructuring costs2.0 0.3 9.2 1.1 15.2 0.6 13.0 0.5 
Operating income43.8 5.6 20.5 2.5 92.1 3.9 36.8 1.5 
Interest expense(6.4)(0.8)(7.6)(0.9)(19.6)(0.8)(21.2)(0.9)
Investment income2.3 0.3 0.3 — 3.6 0.1 0.7 — 
Other income, net0.9 0.1 3.4 0.4 4.4 0.2 10.9 0.5 
Income before income tax expense40.6 5.2 16.6 2.0 80.5 3.4 27.2 1.1 
Income tax expense9.8 1.2 5.2 0.6 20.7 0.9 7.6 0.3 
Net income$30.8 4.0 %$11.4 1.4 %$59.8 2.5 %$19.6 0.8 %
Earnings per share:    
Basic$0.26  $0.10  $0.50  $0.17   
Diluted$0.26  $0.10  $0.50  $0.17   



19

Q3 2024 Organic Revenue Growth (Decline)AmericasInternationalConsolidated
Q3 2023 revenue$619.8$207.1$826.9
Divestitures(8.6)(2.4)(11.0)
Currency translation effects(0.4)11.010.6
Q3 2023 revenue, adjusted610.8215.7826.5
Q3 2024 revenue586.1191.8777.9
Organic growth (decline) $$(24.7)$(23.9)$(48.6)
Organic growth (decline) %(4)%(11)%(6)%
Year-to-date 2024 Organic Revenue Growth (Decline)
AmericasInternationalConsolidated
Year-to-date 2023 revenue$1,840.6$590.3$2,430.9
Acquisition21.821.8
Divestitures(14.8)(6.6)(21.4)
Currency translation effects(3.3)14.311.0
Year-to-date 2023 revenue, adjusted1,844.3598.02,442.3
Year-to-date 2024 revenue1,838.2546.22,384.4