Steelcase Q4 2009 Earnings Call Transcript

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2009-03-31 11:24:08.0

Tags: Call Transcript, Quarter, Earnings, Deflation, Pricing Strategy, Currency & Foreign Exchange, Pricing, Marketing Research, Finance, Marketing, Seeking Alpha, Steelcase Inc.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). We'll take our first question from Matt McCall with BB&T Capital Markets.

Sean Connor - BB&T Capital Markets

Hi. Good morning. This is actually Sean Connor for Matt. I was hoping, could you... you mentioned the commodity surcharge that you guys eliminated in January I believe. Could you quantify how much the benefit that was in the quarter, was that $6 million of impact with net of that this quarter?

David Sylvester

The 6 million was simply the inflation that we had in the quarter. And we have not quantified the benefit of the commodity surcharge, although it was relatively small.

Sean Connor - BB&T Capital Markets

Okay. And then just trying to get an idea on... I mean other than that, the pricing pressure that you guys were talking about does that... is there any more color that you can provide there as far as how widespread that is, which markets are seeing the most pressures, the most pushback?

David Sylvester

About the only thing I'd give you Sean is that as you would imagine on the project business, which has declined significantly in the current environment, it's quite competitive. And, as a result, we find that in order to win some of that limited project business, the pricing is just a little bit more severe.

Sean Connor - BB&T Capital Markets

Okay. Thank you.

David Sylvester

Okay.

Operator

We'll take our next question from Budd Bugatch from Raymond James.

Unidentified Analyst

Thanks. This is actually TJ Macando (ph) filling in for Budd. Dave, I was hoping that you might be able to maybe give us a bit more of a quantification of the difference in the commodity, while inflation that you saw in the beginning of the quarter versus the deflation you saw in the back half, does the guidance assume that the deflation continues at that same rate, maybe give me a little bit more color there?

David Sylvester

Well, just reiterate what you said, we expect in the first quarter for deflation to approximate 5 to 10.

Unidentified Analyst

Okay.

David Sylvester

We also would expect that we would continue to realize some benefit of pricing actions that we implemented last year, albeit relatively small. So, we would expect a good guy so to speak go-forward which is trend of a bad guy for the last several quarters.

Unidentified Analyst

Okay, got you. And then just that $11 million of divestitures; is that all in the North American segment or is it... is there any International there?

 

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