Steelcase Inc.

Be your conference operator today. At this time, I would like to welcome everyone to the Steelcase fourth quarter fiscal 2024 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Mr. O'Meara, you may begin your conference.

Thank you, Dennis. Good morning, everyone. Thank you for joining us for the recap of our fourth quarter and fiscal 2024 financial results. Here with me today are Sarah Armbruster, our President and Chief Executive Officer, and Dave Sylvester, our Senior Vice President and Chief Financial Officer. Our fourth quarter earnings release, which crossed the wires yesterday, is accessible on our website. This conference call is being webcast, and this webcast is a copyrighted production of Steelcase, Inc. A replay of this webcast will be posted to ir.steelcase.com later today. Our discussion today may include references to non-GAAP financial measures and forward-looking statements. Reconciliations to the most comparable GAAP measures and details regarding the risks associated with the use of forward-looking statements are included in our earnings release, and we are incorporating by reference into this conference call the text of our safe harbor statement included in the release. Following our prepared remarks, we will respond to questions from investors and analysts. I will now turn the call over to our President and Chief Executive Officer, Sarah Armbruster.

Thanks, Mike. Hi, everyone, and thanks for joining the call today. Our fourth quarter results reflect strong earnings growth as we continue to make progress on our profit improvement initiatives. This progress is evidenced by our year-over-year gross margin improvement of 140 basis points, marking the seventh consecutive quarter of year-over-year gross margin improvement. For the full fiscal year, our earnings per share more than doubled versus the prior year, and our adjusted earnings per share increased by more than 60%. I'm proud of our employees for actively helping to capture price increases to offset the significant inflationary costs we absorbed over the past couple of years, for implementing improvements in various aspects of our operations, and for continuing to drive our overall fitness initiatives. These efforts to improve our profitability and to reallocate resources are supporting specific growth initiatives and transformation priorities, allowing us to continue to invest in our strategy while strengthening our financial results. Building on this, I'm pleased to share that our international segment posted additional improvement this quarter with over $3 million of adjusted operating income, following strong results in the third quarter. These past two quarters reflect significantly improved performance from the nearly $15 million adjusted operating loss that the international segment recorded in the first half of the year. To continue to enhance our competitiveness, we implemented additional restructuring actions in the fourth quarter in our Asia Pacific business. And Dave will provide some further details about our expectations for the international segment when he covers our outlook. So turning to orders, we grew 4% overall in the fourth quarter versus the prior year, and that includes 8% growth in the Americas. Similar to last quarter, the Americas growth once again was led by the large corporate customer segment. Customers tell us they need our help to create spaces that will attract new talent and engage and retain employees and help teams and individuals perform. And they know their spaces must do more, and they must be designed to support a range of needs such as providing places to focus, collaborate, build social connections, and foster well-being. So I'll reinforce this point with a quick anecdote. I was with the CEO of a major global corporation recently, and as he contemplated the upcoming renovation and expansion of their innovation center, he shared with me his absolute certainty that the new space must do more to support innovation teams. And he said, I know what outcomes we want this building to deliver, but I don't know how to make that happen. And in that moment, when a client knows they need new thinking and expert advice is where Steelcase shines. We've stayed invested in workplace research and new product development to maintain and enhance our portfolio. And we believe this is reflected in the continued strength of our win rates. We're further encouraged by data points in the Business Roundtable survey on CEO confidence, which showed a significant increase this quarter, and it reached the highest level in the past 18 months as optimism in the United States economy is strengthening. We believe this increase in confidence could also support increased business investment levels. As we seek to lead the transformation of work and diversify the customer and market segments we serve, we continue to expand our product portfolio including new launches this quarter. In EMEA, our Orange Box brand launched Beyond the Desk, which is a modular upholstery system that offers a supportive, upright sit in combination with ergonomic fixed work tables. It effectively divides spaces, offering privacy for individuals, teams, and larger collaborative work groups. At AMQ, the Personality Plus Cash Chair leverages our Asia-Pacific portfolio to bring a new offering to the Americas. Personality Plus is designed to give small and medium businesses a new option for comfortable, supportive, ergonomic seating. And similarly, the Steelcase Learning Agree Chair leverages our Smith System brand to offer a versatile and simple seating option at a lower price point to our education customers. All three of these examples highlight our efforts to deliver innovation and value to our customers leverage our scale and complement our broader portfolio of products from across our brands. Finally, I'd like to share a little more about our business transformation initiative, which is one of the drivers of our increased investment level in fiscal 2025. Business transformation for us is about optimizing and automating our business processes. We introduced business transformation about a year ago at our investor day when we were in the initial phases of planning. And since then, we've been designing streamlined and modernized end-to-end processes. These improvements are aimed at providing new capabilities to serve our customers and make it easier to do business with Steelcase. We also expect to drive higher levels of efficiency in the ways we operate our business, which should free up resources and lower our costs. So over the next year, we'll be continuing that work and implementing a new enterprise resource planning system as part of our business transformation initiative. We view this as a major opportunity to increase efficiency and effectiveness, and it'll also require significant resources. So we're eager to see the impact of this work evolve over the next year, and we'll have more details to report in the coming quarters. In closing, we delivered strong profit improvement in fiscal 2024. Over the past two quarters, we have seen stronger demand levels, especially from our large corporate customers. We're seeing more and more companies settle into a stronger in-office presence and we are optimistic their investment levels will increase in response to new business needs. We remain focused on executing our strategy to lead the workplace transformation diversify the customer and market segments we serve, and improve our profitability. With that, I'll turn it over to Dave to review the financial results and share details regarding our first quarter outlook and fiscal 2025 targets.