Mark T. Mossing - Chief Accounting Officer and Corporate Controller James P. Hackett - Chief Executive Officer, President, Director and Member of Executive Committee Raj Mehan - IR David C. Sylvester - Chief Financial Officer and Senior Vice President

Budd Bugatch - Raymond James & Associates, Inc., Research Division Mark Rupe - Longbow Research LLC Todd A. Schwartzman - Sidoti & Company, LLC Jeffrey Matthews - RAM Partners, L.P. Donald Carson - BofA Merrill Lynch, Research Division Matthew S. McCall - BB&T Capital Markets, Research Division

Good day, everyone, and welcome to Steelcase Second Quarter Fiscal 2012 Conference Call. As a reminder, today's call is being recorded. For opening remarks and introductions, I would like to turn the conference over to Mr. Raj Mehan, Director of Investor Relations.

Good day, everyone, and welcome to Steelcase's Second Quarter Fiscal 2012 Conference Call. As a reminder, today's call is being recorded. Thank you for joining us for the recap of our second quarter as I mentioned. Here with me today are Jim Hackett, our President and Chief Executive Officer; Dave Sylvester, our Chief Financial Officer; Mark Mossing, Corporate Controller and Chief Accounting Officer; and Terry Lenhardt, Vice President of Finance for the Americas and EMEA segment. Our second quarter earnings release, which crossed the wires yesterday is accessible on our website. This conference call is being webcast. Presentation slides that accompany this webcast are available on ir.steelcase.com, and a replay of this call will also be posted to the site later today. In addition to our prepared remarks, we'll respond to questions from investors and analysts. Our discussion today will include references to non-GAAP financial measures. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors. Reconciliations to the most comparable GAAP measures are included in the earnings release and webcast slides. At this time, we're incorporating by reference into this conference call and subsequent transcript the text of our safe harbor statement included in yesterday's release. Certain statements made within the release and during this conference call constitute forward-looking statements. There are risks associated with the use of this information for investment decision-making purposes. For more details on these risks, please refer to yesterday's release and Form 8-K and the company's 10-K for the year ended February 25, 2011 and our other filings with the Securities and Exchange Commission. This webcast is a copyrighted production of Steelcase. And with those formalities out of the way, I'll turn the call over to our President and CEO, Jim Hackett. James P. Hackett: Thank you, Raj, and good morning to everyone. We're pleased to report today on a strong quarter for Steelcase and I'm glad we have time today to help you understand why I think it is a strong quarter. First of all, demand has remained surprisingly strong, and we continue to benefit from the restructuring and reinvention we've done in the recent years. I'll mention some more about that in a moment. I say that the demand is surprising because our industry closely tracks metrics like GDP growth and corporate profits. We know the GDP has been sluggish but we believe there's a lot of momentum in demand due to companies needing to update their space and realize their projected operating savings from space consolidations. If there is one number that stands out when I look at our financial report, it's the fact that our Americas business reached nearly 10% operating income as a percentage of sales, excluding restructuring costs. That's been a key goal for us. And on a quarter-to-quarter comparison, operating income before restructuring in the Americas has more than doubled compared to last year. And for Steelcase Inc. as a whole, the same measure is 3x as high when viewed on a year-to-year basis. Now these results are attributed to teams in the field who are working hard to differentiate us, win business, install the solutions that we think matter, and to all the people who are making and supporting operational improvements in our global system. We believe it shows that our business model can produce shareholder value with demand. We see it as our value add to help create that demand and grow our top line. And my message today is that we're extremely focused on that growth goal. As you've seen in our release and as Dave Sylvester will detail in a few moments, when you look at our global business, there are bright spots, such as continuing growth in Asia where we've had an important tipping point in our profitability. It wasn't so long ago that we were describing to you when the business wasn't producing profit, that there was a promise it would. So it's important to report that it arrived as we said it would. And there are parts of the world where we slipped a bit this quarter, such as Europe, the Middle East and Africa. And yes, we do believe the ongoing economic debate within the Eurozone added thrust to what is a normal, seasonal dip in this part of the world that comes because Europe has much of its industrial capacity idle in the late summer months, so we normally forecast that. But this affect in the Eurozone, made that a little more difficult. So even as we see companies inclined to alter their spaces here in the Americas, we know there are reasons to be cautious in the outlook. But I don't want to be too cautious because we're paying very close attention to our usual set of economic indicators. And even though times are challenging, it will be nothing like we experienced 3 years ago during the banking crisis. I see a steady flow of business that is proving the worth of investment in new products designed for collaborations, such as a product that I've told you about many times, media:scape. And by the way, media:scape is one of the reasons Steelcase was included in this year's InformationWeek 500, an annual listing of the nation's most innovative users of business technology. Now consider a few years ago when we established that our integration of technology with architecture and furniture would expand our market. That's another thing that happened. media:scape is an example of that notion coming through. As I said, growth is hard to come by based on total GDP, but there are sectors of our market that are in growth mode, including the oil and gas industry. For example, we announced a very large win in Oklahoma City where a big energy company is building a new 50-storey tower. I've told you on past calls, Steelcase is also responding to the needs for mobility and collaboration, and making some changes in our own real estate footprint here in Grand Rapids. This is a consequence of all the consolidation we've done. We just opened a major project here in Grand Rapids which is our WorkCafe. So a great space that is proving to be inspirational in energizing for our people, and another example of how space can support collaborations and new ways of working. Customers are coming through and asking, "Can you do one of these for me?" Finally, I want to offer a quick personal note. Jim Mitchell, who has served in various roles during his Steelcase career, including President of Steelcase Canada and President of Steelcase International, has told me of his decision to retire at the end of the fiscal year. Jim's been thinking about this for a while so I tried to talk him out of it many times, and we've been able to prepare a successor because he's talked to me about it and develop a transition plan so we won't miss a beat in our Europe markets. Jim has been an incredible and valued member of my senior leadership team, and I want to use this opportunity to thank him for his contributions to our company. He's one of the great guys in this business. Before Steelcase could think about becoming a global integrated enterprise, we needed to become a more unified organization in Europe. We're going to talk to you a little more about Europe, I'm sure, in the Q&A. Jim led much of the effort of us building kind of a euro market. And as you know, today, we sit there ranked #1. It's also provided the initial spark for our expansion into Asia and other emerging markets. Jim was part of the effort to get us started there. So I'm really proud of his contribution. He's meant a lot to the company. With that, I'll turn it over to Dave Sylvester for additional detail on the performance, and we look forward to your questions. David C. Sylvester: Thank you, Jim. I will start with a few high-level comments about the second quarter results and balance sheet, provide some additional color commentary around our order patterns and outlook for the third quarter, and then we'll move to your questions. Again, as Jim mentioned, we feel pretty good about the results of the second quarter, in particular, the adjusted operating income margin in the Americas segment which nearly hit 10%, a reflection of progress on several fronts. Demand patterns remained steady throughout the quarter and as a result, revenue was slightly higher than our estimated range. Earnings, however, came in at the low end of the range we provided on last quarter's call, primarily because of the significant swing in a couple of nonoperating items and lower than expected results in EMEA and PolyVision. Inflation was a significant factor again in the second quarter but was generally in line with our estimates. As it relates to the nonoperating items, we recorded variable life COLI losses in the second quarter compared to income in the prior year, and we also had foreign currency exchange losses in the current quarter compared to income last year. In total, this year-over-year swing exceeded $5 million and was about the same magnitude on a sequential basis between the first and second quarters of this year. Regarding EMEA, you will recall that the second quarter in Europe is seasonally impacted by summer holidays and related shutdowns in many industries, including ours. In addition, demand across the region has remained mixed and this quarter resulted in slightly lower year-over-year revenue on a constant currency basis. Lower revenue, lower price yield relative to recent inflation and general increases in operating costs all contributed to the higher loss in EMEA as compared to the prior year. And for PolyVision, I want to remind you that the second quarter of the prior year was a stellar quarter and thus, the comparison is difficult. Nevertheless, their results this quarter were lower than we expected as reductions in funding by state and local governments are now significantly affecting the technology investments being made by schools. Interestingly enough, the domestic market for interactive whiteboards fell by an estimated 25% in the most recent quarter, while PolyVision technology revenue was down much less than that. While second quarter earnings were at the low end of our estimates, the year-over-year comparison represent significant improvement as we reported $38 million of adjusted operating income in the current quarter, nearly 2x what we generated in the prior year. This improvement in results was driven by operating leverage associated with the organic revenue growth in the quarter which totaled $99 million or 17%. We achieved these second quarter results despite higher commodity costs of approximately $11 million, which continue to outpace the benefits from recent list price adjustments and the deconsolidation of IDEO, which had the effect of lowering operating income by approximately $3 million compared to the prior year. Sequentially, second quarter revenue exceeded first quarter revenue by $48 million or almost 8% on an organic basis, and adjusted operating income also increased sequentially by $13 million. Restructuring costs in the quarter were lower than expected as we adjusted certain aspects of the manufacturing consolidation plans in North America in order to minimize the risk of customer disruption. In addition, we sold PolyVision's remaining low-margin whiteboard fabrication business in Europe and the related loss was lower than expected. Regarding the timing of remaining restructuring costs and related benefits applicable to the North America actions, we continue to estimate total restructuring costs will approximate $40 million, and we expect the remaining restructuring cost of approximately $18 million to be incurred over the next 4 quarters. We currently estimate annualized savings of approximately $30 million to $35 million will be accruing at a quarterly run rate of approximately $3 million per quarter by the end of the current fiscal year, with the balance following over the course of next year as these actions are completed. A couple of other comments and items below operating income. First, we continued to incur high -- higher interest expense in the second quarter due to our February issuance of 10-year notes to replace our 5-year notes, which matured and were repaid in August. Beginning in the third quarter, we expect interest expense associated with our remaining notes and other indebtedness to approximate $4 million to $4.5 million per quarter. Assuming relatively stable equity markets, it would be reasonable to expect investment income, which includes variable life COLI results, and equity and income of unconsolidated joint ventures to approximately offset interest expense on a go-forward basis, leaving just foreign exchange and other miscellaneous items to contemplate in your estimates. In total, these remaining items have bounced around a bit, largely because of periodic gains or losses associated with nonoperating assets. But they generally tend to net out to approximately $1 million to $2 million of expense per quarter, again, before larger nonrecurring gains or losses. Second, the effective income tax rate in the current quarter was positively impacted by discrete items including a tax benefit related to the PolyVision divestiture, which was contemplated in our second quarter earnings estimate. We currently estimate the balance of the year will be recorded as an effective rate of approximately 35%. However, many variables impact our effective tax rate, including nontaxable COLI income, geographic mix of income or losses which are taxed at different rates and the size of tax credits and other items relative to the level of consolidated pretax income. Moving to the balance sheet and cash flow. We generated $36 million of cash from operations during the second quarter, and capital expenditures totaled $11 million, including $2 million related to our campus consolidation in Western Michigan. We continue to track toward a full year estimate for capital expenditures of approximately $70 million, including aircraft deposit payments of $20 million and campus consolidation costs of approximately $10 million. In addition, we used $250 million during the quarter to repay our August 2011 senior notes and we returned approximately $20 million to shareholders in the quarter, $12 million through repurchasing a total of 1.1 million shares and $8 million from the payment of a quarterly cash dividend of $0.06 per share. As it relates to order patterns, I will start with the Americas where we experienced year-over-year order growth in the second quarter of approximately 11%. Order patterns in the Americas remained steady throughout the quarter, with the only exception being early June where we attribute lighter order patterns to some pull-forward effect of implementing a May list price adjustment. Ending backlog remained strong, finishing the second quarter approximately 17% higher than one year ago. And orders in the Americas through the first 3 weeks of September have remained solid, continuing the trends we experienced through most of the second quarter. Order growth rates in the Americas were the strongest across day-to-day business and our marketing programs targeted towards small to midsize companies, while project business grew modestly. Project order comparisons were impacted by reductions in federal government business, as well as 2 large relatively unusual orders in the prior year: the first from a large philanthropic foundation and another in the state in local government sector, a vertical market that has otherwise been relatively soft for sometime now. Vertical market order growth rates in the Americas were the strongest in the Technical/Professional, Energy, Retail and IT sectors. And as it relates to the Energy sector, the recent order strength did not include any orders from the large win Jim referenced which will show up later in the year. Education, Healthcare and Financial Services all grew slightly higher than the overall average. State and local government declined the most compared to last year, as you might expect, but also due to the large project in the prior year that I just mentioned. Only a few other verticals tracked lower than the second quarter of last year. Within our product categories and brands, order growth rates in the Americas were fairly broad-based with notable strength in Details, Coalesse, Turnstone and Technology. And across our geographic region, second quarter orders were strongest in Canada and the central and western regions of the U.S. Switching to EMEA. Order patterns and constant currency continued to reflect more of a mixed bag, growing 3% in total compared to last year. Orders in Germany and the United Kingdom remained strong, while orders in Spain remained weak, and orders in France softened following several quarters of flat to modest growth. In addition, orders in the rest of Europe, Middle East and Africa were relatively strong compared to the prior years. Within the other category, Asia Pacific grew orders significantly again in the second quarter and remained profitable. Exceptional growth in revenue and benefits of previous restructuring activities continued to more than offset our ongoing strategic investments in this region. PolyVision generated a modest operating profit in the second quarter impacted to some extent by international growth investments, but we also did not see the level of domestic revenue anticipated as classroom technology investments are now being significantly impacted by funding cuts imposed by state and local governments. Lastly, Designtex orders grew modestly in the second quarter compared to last year after experiencing a modest decline in the first quarter. Turning to our third quarter outlook. After taking into consideration the strong beginning backlog in the Americas as well as the broader economic uncertainty, especially in Europe, we expect to report revenue between $690 million and $715 million, which includes the dealer acquisition completed earlier this fiscal year. This compares to $673 million in the first quarter of fiscal 2011, which included $37 million of revenue from IDEO and the small PolyVision divestiture. Currency assumptions included in our revenue estimate represent a $12 million positive effect on the year-over-year comparison and a small impact on the sequential quarter comparison. After giving effect to these items, we estimate organic revenue growth in the third quarter will approximate 4% to 7% compared to the prior year. Sequentially, the third quarter revenue estimate translates to a seasonal change in organic revenue of slightly down to up 3%, which is a little lower than normal seasonality but understandable given the strength of the last couple of quarters and the variable temperament of the broader economic recovery. With respect to commodity costs, our earnings estimate contemplates little to no sequential inflation compared to the second quarter. However, compared to the prior year, commodity cost inflation in the third quarter is expected to approximate $9 million. We expect additional benefits in the third quarter from recent list price adjustments taken in North America and Europe. With these pricing benefits are realized and inflation is consistent with our estimate, the third quarter would represent the first quarter of the last 6 wherein higher commodity costs are offset by increased pricing. As a result of these factors, we expect to report third quarter earnings within a range of $0.15 to $0.19 per share, including net restructuring costs of approximately $0.02 per share. The third quarter restructuring cost estimates include costs associated with the manufacturing consolidations in North America, offset in part by pretax gain associated with the sale of a facility we are in the process of exiting. Before I turn it over for questions, let me make a few comments about the broader economic uncertainty. It goes without saying that significant headwinds continue to challenge the broader recovery from the 2008 financial crisis, and our industry has experienced a considerable impact from these events. And we could feel these pressures again if companies choose to behave conservatively and pull back on spending because of the uncertain landscape. However, there are several factors that I think are important to keep in mind. First and foremost, we are not convinced a pullback in corporate spending is going to occur. Yes, it's a possibility, especially if some of the sovereign debt issues are not resolved carefully. But many corporate balance sheets are as strong as they have ever been and it has been a decade or more since many organizations have invested in their spaces, while at the same time, they are facing tremendous changes to manage, whether it be globalization, miniaturization of technology, mobility, collaboration or multi-generations at work. Uncertainty hasn't lessened in the last 6 months, in fact, it's increased but activity has remained steady. We think that has a lot to do with the need for companies to modernize their environments as well as the likelihood that many projects represent consolidations or moves that are taking advantage of exceptionally high incentives from landlords. So it is likely there are financial paybacks from these investments, which we believe may be an additional factor in sustaining demand through the uncertain economic environment. Nevertheless, our business model has been largely transformed and therefore, we expect to weather economic cycles up or down, much better than the last decade. And we continue to implement the North American manufacturing consolidation initiatives we announced in January 2011, which again, are expected to yield approximately $30 million to $35 million of annualized savings once completed. Also, as I stated earlier, we're managing our way through the significant inflationary headwinds and expect price yield to begin offsetting year-over-year inflation beginning in the third quarter. And our balance sheet remains rock solid with more than $265 million of liquidity between cash, short-term investments and variable life COLI. Lastly, our revenue base is much more diversified than ever before, and we continue to focus on growth strategies to strengthen our position, whether that be through launching innovative breakthrough products like media:scape, node and eno or enhancing our current market position in growth areas like healthcare, education, small companies, live/work and emerging markets. In the end, we don't know with certainty what economic environment will play out in the near-term. However, we are more ready than ever before to take advantage of the sustained recovery in our industry and/or deal with the short-term consequences of a lull or pullback in corporate spending. From there, we will turn it over for questions.

[Operator Instructions] Our first question is from Budd Bugatch of Raymond James. Budd Bugatch - Raymond James & Associates, Inc., Research Division: I guess, I want to concentrate on and get -- to directly get to EMEA. And I think as I understand the implication, there's some issues on price realization in EMEA, but as I look at the components of the reported adjusted numbers, it looks like also operating expenses were significantly higher at least incrementally than we might have expected. What's going on there? How will that affect what we see going forward? James P. Hackett: So EMEA deserves a couple of kind of broader comments before we get to the question about OpEx and some of the other things. First, I just want to point out that a year ago and 2 years earlier than that, our performance in Europe in the midst of some really difficult environmental issues was pretty strong. For example, Spain had a significant shrinkage at the top line and it remained profitable. Germany in that same time was a very fast-growing market. It's probably a net exporter as a country right now, so it's in the face of this very attractive economy. France, which is -- has its challenges, when business shrinks, Steelcase took some very strong initiatives right in the middle of that, that involved one plant closure, as well as an announcement of a shared service center in Romania that's in the midst of being set up. And the U.K., we actually made significant improvements in our profitability there. So at a macro level, with this tough quarter there, I have to tell you that I wouldn't want that quarter to define in your mind that there's a more significant problem. In fact, I'll let Dave kind of tear apart what we have the best we can to explain what we see. But as I said a moment ago, this is a seasonal lull there. So imagine that you have kind of a stress on the system because of the summer months anyways and you add whatever effects that we are imagining from the Eurozone and the sovereign debt problem. I saw a really good video the other night on Charlie Rose about that issue, and the world's kind of split on the question of whether the Eurozone will respond over time and address some problems that need to be addressed, or whether we'll have the default of Greece, for example, and Italy, which seems like a long shot. What Steelcase has done, we've actually gone back and modeled in our head, what will happen to the business in the face of something like that and we're just really well-positioned, if there's any kind of super negative effect in Europe, which we don't believe is going to happen. We don't think the world is going to experience that. And we actually believe that now that we're #1 in that country that we're actually going to fare much better than many of the competitors. So I can't project to you today that the tension in that market is actually going to make it better for us but that usually is what happens, the stronger do better. So we're in a great strategic position right now with actually what's going on there. I wanted to get that out because I'm very bullish about what's going on there and the growth in some of the markets that I just mentioned, particularly Germany stayed relatively strong in the face of all this. So Dave has some comments about your questions about the OpEx. David C. Sylvester: Yes, let me first just comment on revenue and margins, just to supplement what Jim said. On the revenue mix, I think a little bit was contributed to the growing uncertainty in Europe and the other is that the government Business in some of the countries where we have a heavier concentration in the government, local government, was down considerably. And that actually had an impact on our margins. So you know that we closed a facility recently in Europe and move production to another facility. Well, some of that production that we moved is some of the product that the government tends to buy the most of. So the benefits that we were expecting to see from the completion of the restructuring initiatives and the closure of the plant while realized through lower labor and lower overhead was offset largely by the effect of this mix shift of low government business not buying the products that ended up in that facility. So that was part of the story. And beyond that, you know that the market in Europe is quite fragmented and you understand that the environment is relatively uncertain. So we have -- from a combination of that and other things, we have had trouble getting our price increase to stick. And as a result, inflation has continued to outpace our pricing more than we anticipated in Europe. Those were the biggest drivers. On OpEx, I mean, Mark can correct me if I'm wrong, but my quick check is that OpEx in the first quarter was $42.5 million and OpEx in the second quarter was $44.3 million, so it was up $1.8 million but I wouldn't attribute that to anything other than timing. Budd Bugatch - Raymond James & Associates, Inc., Research Division: But it was up sequentially $9.4 million on a revenue gain of $12 million. David C. Sylvester: And then about half of that is currencies, so when you... James P. Hackett: Sequentially? You said sequentially Budd, but you meant year-over-year, right? David C. Sylvester: Sorry, year-over-year. It's up $9 million where the revenue was up $12 million, and about $4.5 million of that increase is related to FX. Budd Bugatch - Raymond James & Associates, Inc., Research Division: 4.5% of the operating expense increase? David C. Sylvester: Yes, right. James P. Hackett: Yes. Budd Bugatch - Raymond James & Associates, Inc., Research Division: Finally, let's just cut to the chase. What can Europe reasonably expect to do in operating margin and by when? David C. Sylvester: Well, that's a difficult question in an uncertain environment. But it's also a question frankly, Budd, that you've asked every September for almost the last 3 or 4 years. The summer quarter is a tough quarter. It always has been and probably will continue to be. And then in September and December when we report the third quarter, which is traditionally their strongest quarter, we see very nice operating margins. So we continue to believe that Europe should be able to approximate the Americas. For different reasons, but, we think that it should be able to approximate the Americas. Those different reasons continue to be that we are more direct or we are the dealer in Europe more so than the Americas, and that should enable us to make up what otherwise, I would say, in a same-store basis would mean that EMEA would generate slightly less operating margins. But it's an uncertain environment. We've got some countries up, some countries down. We're not getting the kind of growth from the emerging markets of eastern and central Europe and the Middle East that we were getting. I think that's going to come back. I don't think Spain is going to come back so much in the near term, but I do think we'll see something from EMEA. The Middle East, in particular, has not shut down but it's slowed down because of the political instability in the region, as well as some other process steps that many of the governments have put in place to attempt to curb some corruption in that market. So it's made some of the decision-makers from what I understand from our dealers hesitant to move forward. So between political instability and process changes, it had slowed some of what you would otherwise expect out of that region in growth. Budd Bugatch - Raymond James & Associates, Inc., Research Division: I recognize that the quarter is the weakest quarter in the year that's why I did the year-over-year comparison with the incremental margin. I guess my question on an annual basis, you think you can get to a double-digit operating margin on Europe on a sustained basis or EMEA on a sustained basis? David C. Sylvester: Tell me what the volume's going to be and we can talk about that. I am not committed to an ability to generate consistent double-digit margins at North America either until we talk about the volume first. James P. Hackett: But Budd, I can help in this question. You're in a fair point. I hope you're hearing me say, this is Jim, that if you look back just over the last 24 months, the things that we have put in place to make Europe perform, you heard me talk about the changes in France and the shared service structure. I didn't explain in any detail the reorg that we announced on a previous call where we took the Steelcase brand responsibility and linked it all under Jim Keane, which has a lot of potential synergies in the way the product development is done off of platforms. And this isn't a kind of a shallow challenge. I mean, I can point to you auto CEOs, appliance CEOs, computer CEOs that are all trying to deal around the world in product strategies and share platforms to boot, and still have the regional kind of differences in flavor that you need to compete. I think that in the last 4 years, a company like Steelcase has made a lot of progress in being able to do that. So that now being #1 in Europe is a real advantage because of that platform thinking. The leadership under Jim Keane gives me organizationally, a certainty that we can have kind of one mind about how that all has to happen. And that's not a knock against anybody in Europe because the way Europe was run in every company is very nationalized notions of how those markets behave. So I want you to, in the way you're rolling this up in your head because you're thinking about quarter, there's been a lot of successful activity by Steelcase in Europe and it's a very important market for us. And in our plans, it's not a drag. It's really an enabler to a lot of things we got to do.

Our next question is from Matt McCall of BB&T Capital Markets. Matthew S. McCall - BB&T Capital Markets, Research Division: I want to hit on one data point first. You mentioned that -- I know it's a small part of your business, but I want to understand the magnitude of this decline. You said the Interactive whiteboard business was down 25%. And I understand that you guys did better than that, I understand it's a small part of your business, but that level of almost immediate decline and also understanding that there's issues with state and local governments and in government in general, but kind of the immediate down 25%, is very reminiscent at the last cycle. So can you talk about that? Is that something that's just going on in that segment? Is that indicative of the weakness in that segment? Is there something more specific to whiteboard? I'm just curious about the magnitude of that decline. David C. Sylvester: Okay, Matt, let me clarify first. The reference that I made to down 25% is the most recent quarter and it's a market reference. The market was down best we can tell 25% in the summer quarter, which is usually the strongest. Relative to our whiteboard business, because of the strength of eno, we're much better than that, much better. Matthew S. McCall - BB&T Capital Markets, Research Division: Right. I think -- what I'm just trying... David C. Sylvester: We're not seeing the growth that we saw over the last several quarters. So we have a very hot new product that's been doing very well. We expected it to continue but the magnitude of the market decline just didn't allow us to continue to grow whiteboard, the whiteboard revenue. Matthew S. McCall - BB&T Capital Markets, Research Division: I guess I'll ask in a different way. Is that -- go ahead. David C. Sylvester: So what we've been doing because of the domestic challenges in state and local funding is we've been investing internationally because we see that, that eno board can work very well around the world. It's been successful around the world. We think it can be more successful. Matthew S. McCall - BB&T Capital Markets, Research Division: Okay. And that kind of leads into a second question. You mentioned a couple of times growth investments, and I know it's something you've talked about in the past and throughout the last downturn. Is there anything you can provide from a detailed perspective that would help us understand where maybe the magnitude of growth investments that continued to impact? It might go to Budd's question earlier about the SG&A line in Europe, if you could continue to invest there. Did that cause or impact the quarter at all from an operating expense perspective? David C. Sylvester: Yes, there's a little bit of growth investment. And I mean, if we were holding OpEx flat in Asia, in PolyVision and some of our other growth areas, maybe that would have offset some of the general increases that we saw over the broader increase in OpEx. But it's not that big of a deal right now. Again, when you do the year-over-year comparison, just make sure you factor out the FX effects because op expense -- again, in order for us to achieve that targeted 30% contribution margin, we have to keep operating expenses relatively flat. And that's been our target is how do we shrink some areas of our business to invest in other areas of the business such that incremental revenue can put on average close to $0.30 per dollar to the operating income line. Now in any given quarter, are we going to see OpEx go up or down a couple million here and there? Sure. And does 30% contemplate, literally flat, no change in OpEx? No. OpEx will go up for no other reason associated with volume because of variable compensation and other sales incentives. Matthew S. McCall - BB&T Capital Markets, Research Division: Okay. On that point, I think it was Mark that said that half of the increase on a year-over-year basis was FX. Understanding there's some seasonal factors here, but if I look sequentially, we were down about $20 million top line in EMEA, up about $2 million. Understanding there's going to be some fluctuations but the disconnect there seems to be a little puzzling, I guess. That's the first part of the question. And then what is the assumption as we look forward from a profitability perspective for EMEA in your guidance? David C. Sylvester: So first on the operating expense. You know from previous discussions about Europe that it is virtually impossible for us to move fast and cut spending because of the work councils that we have to work through in order to implement any kind of social plan action. And I'm not suggesting today that we're in the process of doing anything like that because as we look relative to our guidance, we think that Europe will rebound and have a strong third quarter. They will not lose money in our estimate in the third quarter and we think that their, sequentially, revenue will improve. But it really remains to be seen because the uncertainty is very high in that region. Again, the U.K., I'm not so worried about, but the Eurozone is the broader question.

Our next question is from Todd Schwartzman of Sidoti & Company. Todd A. Schwartzman - Sidoti & Company, LLC: Just to follow up on PolyVision for a moment. A market that's down 25% historically, a seasonally strong quarter, I think, would be somewhat troubling. I'm just wondering what the underlying factor is there. Maybe one quarter does not a trend make. But are there any newer products or technologies out there that are eating into sales? James P. Hackett: Again, it's the market that's down 25%. I don't want to give our exact PolyVision whiteboard statistics, but they are nowhere near being down 25%. You just look at SMART Boards public company information and -- it is the -- what happens in this sector is that there's ability for kind of wholesale transactions. These are I think kind of in between distribution points that can distribute to schools and then there's a direct selling effort that happens. So we have both channels and our direct selling is doing really well. It's been the wholesale business which I think of that as kind of day-to-day demand driver. And it holds to what we likely suspect went on in the school districts as the state budgets were under a lot of tension. Now I sat in a meeting of CEOs in Michigan yesterday where the discussion was around what we're going to do get classrooms up-to-date, so that they can compete with the right kind of technologies. And so there's a lot of opportunity for what PolyVision does in classrooms. We think that this is just a function of the budgeting season right now in state governments. David C. Sylvester: What surprised us is not that state and local spending has been cut, was that it affected classroom technologies. I mean, nobody really expected classroom infrastructure to change significantly because all the cuts, the funding cuts. But for technology investments to be cut so dramatically was a surprise. So we anticipated that we would continue to grow because of the strength of eno, but we weren't able to do that. But again, we were nowhere near 25% down like the current market. Todd A. Schwartzman - Sidoti & Company, LLC: Understood. Even if Steelcase outperformed by 20 percentage points, let's say, you're down low-single digits, it's still -- I guess my question still stands, is it purely seems to be stating it's purely a budgetary event and not some new technologies that are replacing whiteboards at the end users? David C. Sylvester: No, I think it's clearly a spending reduction. Something that is frankly not sustainable because I don't see how classrooms can not invest in technologies given how fast things are changing. So they may put it on hold for a while, but it doesn't seem sustainable. But again, we see significant international opportunity and that's why we're investing incrementally in order to take advantage of it. Todd A. Schwartzman - Sidoti & Company, LLC: And in terms of where we stand thus far in Q3, getting back to the price realization in Europe for a moment, any comment on the last 4 weeks? James P. Hackett: The last 4 weeks as far as price realization? Todd A. Schwartzman - Sidoti & Company, LLC: In Europe, yes. James P. Hackett: No color to add on that. Todd A. Schwartzman - Sidoti & Company, LLC: And what about maybe if you could contrast realization in the Americas in the second quarter. More importantly, what might be your outlook going forward.? James P. Hackett: I should say globally, we expect incremental, and our estimate contemplates incremental pricing benefit, so including Europe, but not as much as what we expect to see in the U.S. It's just the price increase is sticking better in the U.S., I think in part because inflation has been more significant in the U.S. and is obviously impacting our customers. But in Europe, it's been a little bit more challenging. Todd A. Schwartzman - Sidoti & Company, LLC: And Q3 over Q2 in the U.S., do you expect a slight improvement, realization-wise? James P. Hackett: Yes.

Our next question is from Mark Rupe of Longbow Research. Mark Rupe - Longbow Research LLC: A lot of talk on EMEA. I may have missed it and all the discussion. But I know you commented on order pacing in the September on the Americas side. Did you give a number or any color on the trends in EMEA into September? David C. Sylvester: We didn't give any in the scripted remarks but I would tell you that they've been pretty good as expected. Mark Rupe - Longbow Research LLC: And then on -- I know you've made a little bit of comment on some of the verticals in the Americas and you cited Financial Services. Can you remind me what that color was, and then just if there's any thoughts on how that vertical will perform in kind of uncertainty economic environment? James P. Hackett: Well, what I said on the verticals was that Technical/Professional, Energy, Retail and IT were the strongest; and Education, Healthcare and Financial Services were slightly higher than the overall average; and State and Local was the one that was down and there were a few others that tracked lower than last year. I don't even remember which ones those are. Mark Rupe - Longbow Research LLC: Okay. Okay, just lastly, can you remind us on what the buyback authorization is and maybe kind of if there's any change in maybe the priorities of cash flow use? James P. Hackett: I think that we still have in the neighborhood of $175 million or $180 million remaining. Mark Rupe - Longbow Research LLC: Okay. Do you have blackout windows? James P. Hackett: We do have blackout windows.

Our next question is from Don Carson of Merrill Lynch. Donald Carson - BofA Merrill Lynch, Research Division: A lot of talk on the growth and the earnings. Just wondering, if you turn towards the balance sheet for a moment, the balance sheet's pretty stable here and liquidity is good. Can you go over the cash flow a little bit? How is the cash flow for the quarter? Maybe some idea of what you'd look like on a working capital basis maybe for the rest of the year? James P. Hackett: As I said, cash from operations was $36 million in the quarter. We would expect to continue to generate cash from operations for the balance of the year. There's seasonality in our use of cash in the first quarter as we fund employee bonuses and profit-sharing contributions and other annual insurance costs, et cetera. So we tend to use cash in the first quarter and generate it in the next 3. Our working capital days are in the neighborhood of 30, 29 days, Mark, is that right? And haven't varied materially. Mark T. Mossing: And the priorities that you asked about, we look at investing in the business for growth ideas right now. We have kind of EMEA targets that we want to hit so that we're increasing shareholder value. We love the notion of a strong dividend. And then third, the share buybacks are always there as an opportunity.

[Operator Instructions] Our next question is from Jeff Matthews of RAM Partners. Jeffrey Matthews - RAM Partners, L.P.: Two questions. One is, you talked about the issues affecting the Middle East and the issues affecting southern Europe were pretty self-explanatory. But I think you also mentioned weakness in Eastern Europe and I wondered if you could talk about that at all. And then secondly, I wonder what you're seeing more recently as far as visits to the headquarters. James P. Hackett: Let me answer the first or the second part of your question first. That's, in my opening comments, about the surprising demand. I would layer that insight with also the customer visits here are very strong right now. And the quality of the visits which they never degrade but in the worst time in the Financial Services crisis, the banking crisis, we had lots of trips and the quality was mostly development and training for people that were going to be doing projects a year or 1.5 year later. Now these are people coming to Grand Rapids and our European headquarters with projects that they've got to make some decisions and want to move fast. And the volume of that has been very, very strong. David C. Sylvester: And in Eastern and Central Europe -- our region of Eastern and Central Europe stretches as far east as Russia. And what we've seen is from the financial crisis when many of those currencies collapsed and many of those countries had euro-denominated debts. We saw the project activity stall considerably, but it has started to come back in recent quarters and there's decent activity on the horizon.

Thank you. Ladies and gentlemen, there are no further questions in the queue right now. I'd like to turn the call over to management for any closing remarks. James P. Hackett: Thank you, Tyrone. The news today in the journal about the global markets reacting to the movement by the Fed in United States and the volatility that comes as a consequence of that in a way shadows what I think is a business that's actually doing quite well in the midst of that. I want to reaffirm that Steelcase believes that our performance is going to be pretty strong this year and that the effect, the uncertainty that are around us are not being felt in the order patterns or the visits or the kind of demand that we're seeing. So our fondest hope is that these kinds of issues in the volatility are just noise that as it resolves itself, we won't see huge impacts from it. So I wanted to emphasize that at the end of the call and tell you that we're very optimistic and look forward to our next visit to report on the same.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect and have a wonderful day.