Steelcase to repay credit facility, leaving only $450 million notes

By Devika Patel

Knoxville, Tenn., Dec. 20 – Steelcase Inc. plans to pay off the $34 million of debt under its credit facility this quarter, which will bring long-term debt down to $450 million of notes.

“At the end of the quarter, our total debt aggregated $516 million, including $34 million of remaining borrowings under our credit facility and $33 million of term debt related to our aircraft financing,” senior vice president and chief financial officer David C. Sylvester said on the company’s third quarter ended Nov. 25 earnings conference call on Tuesday.

“We continue to project paying off the credit facility by the end of the fourth quarter and, with the sale of our aircraft, we expect to pay off the related financing, which will reduce our long-term debt to $450 million, which represents our long-term notes.

“At the end of the third quarter, our ratio of trailing four quarter debt to adjusted EBITDA approximated 2.9x, and it’s less than 2x on a net basis, taking into consideration our liquidity,” he said.

Adjusted EBITDA for the trailing four quarters was $177 million as of the end of the third quarter.

Total liquidity, comprised of cash and cash equivalents and the cash surrender value of company-owned life insurance, was $216.2 million at the end of the third quarter.

Cash and cash equivalents were $55 million as of Nov. 25, compared to $200.9 million as of Feb. 25.

Total debt was $516 million as of Nov. 25.

Steelcase is a Grand Rapids, Mich.-based office furniture manufacturer.

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