Raj Mehan - Director of IR, Financial Planning and Assistant Treasurer James Keane - President and Chief Executive Officer David Sylvester - SVP and Chief Financial Officer Mark Mossing - Corporate Controller and Chief Accounting Officer

Budd Bugatch - Raymond James Kathryn Thompson - Thompson Research Group Matt McCall - Seaport Global

Good day everyone, and welcome to Steelcase’s Third Quarter Fiscal Year 2017 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, Financial Planning and Analysis and Assistant Treasurer.

Thank you, Karen. Good morning everyone. Thank you for joining us for the recap of our third quarter financial results. Here with me today are Jim Keane, our President and Chief Executive Officer; Dave Sylvester, our Senior Vice President and Chief Financial Officer; and Mark Mossing, Corporate Controller and Chief Accounting Officer. Our third quarter earnings release, which crossed the wires yesterday, is accessible on our Web site. This conference call is being webcast and this webcast is a copyrighted production of Steelcase Inc. A replay of this call will also be posted to ir.steelcase.com later today. Our discussions 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'll respond to questions from investors and analysts. I'd like to now turn the call over to our President and Chief Executive Officer, Jim Keane.

Thanks, Raj, and good morning everyone. I’ll start by affirming that the results we reported at the close of business yesterday are the same as the preliminary results we provided earlier in the month. It wasn’t a bad quarter, but we expected better, and the results were below the estimates we communicated in September. The miss was in our Americas business and after further analysis it seems that the overall industry was growing more slowly than we expected. BIFMA has only reported shipments for the first two months of the quarter, but we did a little better than BIFMA for those two months. When we analyze our Americas business, our orders and shipments to larger contract customers were okay, both in terms of projects and the ongoing business that continues with those customers between projects. We talked before about our win rates and those remain relatively strong. We saw some weakness in both orders and sales from smaller customers with whom we typically don’t have contracts. It's possible that customer segments hold back a bit during the political uncertainty of the quarter, and we’ve heard others in our industry point the softness in this segment of their business. On the other hand, it's also possible we are not catching our historical share of our dealers business in this segment. We had our Americas dealers together in Grand Rapids earlier this fall, and we talked about how we can capture more of this business. And we’re working on some new initiatives that should grow. We also hosted our Americas sales organization in Grand Rapids a few months ago for new product training and other investments in our capabilities. We’ve launched a lot of new products in the past year, and we’ve been successful with those new products. But these investments and training will help us make sure every customer is aware of how those products can help them work more effectively. In the past, we talked about CEO confidence. And the most recent data is up slightly overall, but still quite restrained when it comes to the outlook for capital expenditures. We are interested in some of the tax changes and regulatory changes that could come with the new administration, and are hopeful they could stimulate investment by U.S. customers. I was in several of our plants in Grand Rapids and Athens, Alabama this month, and I feel very good about our capabilities and our progress. We are already very strong operationally, but the team continues to execute against cost reduction goals, quality goals, and reliability goals. Our global operations leaders have been together in our Alabama plant, starting on Monday of this week to set new goals for the coming year. That group included operations leaders from our EMEA segment and they’ve done a terrific job getting our performance back on track. In fact, our EMEA segment surpassed our expectations by posting a profit in Q3, largely because of improved gross margins. Our entire team in EMEA has been very focused on this first step of delivering a quarterly profit, and I want to recognize their accomplishments. That said, we’re not done, and we continue to believe we have significant opportunity to drive additional benefits through lean, continuous cost reduction efforts, yield management, mix management and other gross margin improvement initiatives. Volume is definitely a part of the equation that helps EMEA return its cost of capital where we see just as much opportunity by leveraging the business model enhancements we have made. Our outlook with our best insight in terms of order patterns and information related to projects won but not yet shipped. We also made some changes to our Americas forecasting models, intended to more fully reflect the patterns I discussed previously. But even with those changes, our estimates cannot fully anticipate the impact of the economic and political uncertainty we see in every major market around the world. Oil prices are rising, interest rates are rising, currencies are shifting and tax policy and trade policy changes are like to become clear early in the New Year. The enthusiasm in the stock market could translate the higher business confidence and the stronger furniture market that we have seen this year. But we’ve made no effort to incorporate that into our estimates. Our customers will face the same challenges and we’re helping them to think about role space can play in creating more resilient organizations. Finally, a couple items about our Board, I’ll share on behalf of our chair, Rob Pew. One of our board members, Bill Crawford, has elected not to stand for re-election and will retire from the Board next year. I want to recognize Bill for his 37 years of service on behalf of our investors. He is serving the Company, both as an employee and the Board member. He was president of the Steelcase design partnership for many years and has close relationships with many current employees of the Company. I have the privilege of working with Bill early in my career at Steelcase and I learned a lot from watching how he challenged everyone to find the way to be better every day. Bill has done the same while serving as a Board member, and on behalf of the Board, I thank him for his service. Secondly, I’m delighted that Tim Brown, the President of IDEO will fill an open seat on our Board of Directors. Steelcase and IDEO has had a close relationship for more than 20 years, and I know Tim very well from the work we’ve done together over that time. I’ve been honoured to serve on the IDEO board for many years and look forward to having Tim raising deep insight around innovation and design through our conversations at the Steelcase Board. With that, I’ll turn it over to Dave Sylvester for his detailed remarks on our results, and our outlook.

Thank you, Jim. I will cover our financial results first, noting where results differed from our expectations, and highlighting year-over-year and sequential quarter comparisons. And then I will talk about our balance sheet cash flow before getting into our order patterns and outlook. Overall, we continue to feel pretty good about the business, and the progress we have made on several fronts over the past 12 to 18 months. Third quarter revenue did fall just below the low end of the estimated range we provided in September and I will cover that in a moment. But first, I want to share a few broader highlights, some of which Jim just referenced. First, EMEA was profitable in the quarter and the $15 million improvement in adjusted operating income compared to the prior year was driven by a significant improvement in our gross margin. Second, our pipeline in the Americas for project business expected to be ordered and shipped during the next four quarters continues to reflect strength compared to the prior year. And while growth in day-to-day business was lower than we anticipated, we do take note of recent improvements and sentiment, whether it would be from CEOs of the business round table or small companies as reported by the National Federation of Independent Business. Third, Asia-Pacific posted a record level of quarterly orders, and we are achieving it by securing more and more business with leading organizations headquartered in China and India. We had anticipated we might also post a record level of revenue in the region during the quarter. However, timing of completion related to a few projects pushed some revenue into the fourth quarter. And fourth, Designtex posted strong order growth and sales growth in the growth evidence that our product marketing strategies are paying-off. And PolyVision made additional progress in the last 90 days to resolve the majority of the anti-dumping duty exposure we have been discussing for the last several quarters. As it relates to revenue in the third quarter, the organic growth was lower than our estimated range of 1% to 4% growth. The shortfall was primarily due to lower than expected growth in day-to-day business in the Americas, and a significant amount of customer deliveries shifting from the third quarter to the fourth quarter, in both the Americas and Asia-Pacific. To give you some additional insight into the Americas revenue shortfall and to provide some context for the lower than expected gross margins, which I will discuss in a few minutes. I will share a few additional comments about our order patterns in the Americas during the quarter. Across the months, order patterns, in-total, were largely consistent with our expectations, growing significantly in September in advance of our October 3rd price adjustment, followed by declining significantly in October, likely due to the pull-forward effect of the price increase on orders. And then growing nicely by a mid single-digit percentage in November compared to a relatively weak prior year. However, the mix of business reflected stronger than expected growth in project orders and lower than expected growth in day-to-day business, which represents the aggregation of business from continuing agreements and marketing programs. In addition, business generated by our own dealers and services business was greater than we expected. These mix shifts are important as day-to-day business tends to shift faster than project business and average gross margins tend to be higher. And gross margins on dealer and services business are much lower than our overall average. Related to the requested customer deliveries, which shifted to the fourth quarter, the amount was higher than normal and the orders spanned across project and day-to-day business, which is also somewhat unusual. And a significant amount of orders in the quarter were received with request for delivery beyond the end of the fourth quarter. We see some of this every quarter, but the magnitude in the third quarter was unusual, and we have no reason to believe it was linked to our October price adjustment. Finally, third quarter included a higher than expected mix of business from some of our largest customers who earned deeper than average discounts through volume related rebates and additional contributors to our lower than expected gross margins. From an earnings perspective, the $0.34 in the quarter compares to our adjusted earnings estimate of $0.33 to $0.37, and includes $0.03 related to the tax benefit mentioned in the earnings release, which was not in our guidance. Operating income was significantly lower than our expectations in the Americas and operating profit in EMEA compares to an anticipated loss in the quarter. For the Americas lower revenue and the unfavorable shifts in business mix, I previously mentioned, were the largest drivers of lower than expected gross margin and operating income. We also have a few operational issues in the quarter that negatively affected gross margin, but their financial impact was offset by lower than expected operating expenses, and some of the issues are already resolved. For EMEA, the better than expected results were driven by our local teams continuing to improve operational performance, as well as beginning to realize benefits from various gross margin improvement initiatives. We also recorded true-up adjustments to accrued liabilities, which improved our results by approximately $2 million. Switching to year-over-year comparisons, I will add a few additional comments for each segment. For EMEA, the $15 million improvement in adjusted operating income was driven by a 1,050 basis-point improvement in cost of sale, the result of hard work by our colleagues in Europe to rebuild the EMEA business model. We eliminated the cost associated with our footprint changes and other issues experienced in the prior year, and we have begun to realize benefits from cost reduction efforts and other gross margin improvement initiatives. For the Americas, the year-over-year decline in operating results was driven by the unfavorable shifts in business mix, I mentioned earlier and higher operating expenses, including variable compensation expense associated with the tax benefit recorded in the quarter, and our improved results in EMEA. In the other category, we posted lower operating income in Asia-Pacific compared to a very strong prior year, as well as lower operating income in PolyVision in part due to costs associated with the steel tariff issue. Lastly, corporate costs were higher compared to last year, primarily due to lower COLI income. Sequentially, third quarter adjusted operating income was lower compared to the second quarter as benefits from seasonally higher revenue and improved operational performance in EMEA were more than offset by the impact from the unfavorable shifts in business mix, including some of the items mentioned previously, plus a seasonal shift in revenue across vertical markets in the Americas. Moving to the balance sheet and cash flow, cash provided by operating activities approximated $83 million in the current quarter and was similar to the prior year. Capital expenditures totaled $14 million in the third quarter and $40 million on a year-to-date basis. We estimate capital expenditures for the full-year will approximate $60 million to $70 million, which is somewhat lower than our previous estimates as various capital projects are pushing into next fiscal year. We returned approximately $29 million to shareholders in the third quarter through the payment of a cash dividend of $0.12 per share and through repurchasing approximately 1.1 million shares under our share repurchase authorizations. Over the last 12 months, we have repurchased approximately 6 million shares under these authorizations, and have $126.5 million remaining under the authorization approved by our Board of Directors in the fourth quarter of fiscal 2016. Turning to order patterns, I will start with the Americas segment, where our orders in the third quarter grew by approximately 3.5 compared to the prior year, and included initial orders from the very large project that was won in the first quarter. In addition, orders in the Americas continue to reflect a significant decline in the energy vertical market, which negatively impacted overall order growth in the segment by approximately 300 basis-points year-over-year. Customer order backlog at the end of the quarter was 4% higher compared to the prior year and the growth was almost entirely driven by orders with request to delivery dates, which fall beyond the fourth quarter. Turning to vertical markets in the Americas, we experienced growth in seven of the 10 vertical markets we track, including four with double-digit percentage growth rates, as well as growth across our untracked sector, which includes retail customers and other vertical markets not large enough to track separately. This growth was dampened by declines in the energy, federal government and technical professional sectors. We believe the significant impact from the energy sector, on a year-over-year order comparisons, are now behind us. However, we expect the year-over-year revenue comparison to be significantly impacted for one more quarter as we’ve been in fiscal 2017. Across quote, types, project orders grew by 6% while day-to-day business grew modestly, reflecting growth from continuing agreements and a decline in our marketing programs aimed at smaller day-to-day business. Year-over-year, order growth was strongest from customers’ orders aggregated more than $3 million in the quarter, and grew at a strong single-digit rate outside of the initial orders from very large project, I mentioned earlier. Orders from customers, whose orders aggregated less than $1 million, declined compared to strength from this group of customers in the prior year. Since June, we have talked about the year-over-year strength we are seeing in our pipeline of project activity in the Americas, and we also talked about the possibility that ongoing uncertainty could negatively impact day-to-day business from continuing agreements and marketing programs. Our project pipeline of estimated project revenue over the next four quarters continues to reflect meaningful growth compared to this time last year. This pipeline calculation includes project business that we have already been awarded or that we believe we have a significant probably of winning from customers we expect will generate more than $3 million of revenue over the next four quarters. It’s only one piece of data and these are binding commitments, and it's possible that day-to-day business could remain subdued. But we continue to feel good about this data point, as well as the improvement in CEO and small business sentiment I mentioned earlier. For EMEA, the order decline of approximately 3% in the current quarter compares to significant growth in the third quarter of fiscal 2016. The order decline reflected declines in many markets that posted strong growth during the quarter of the prior year, offset in part by growth in a couple of other markets, which benefitted from large project activity in the current quarter. Customer order backlog for EMEA ended the quarter down 11% compared to prior year. Within the other category, orders in total grew 14% compared to the prior year, driven by the record amount of quarterly orders in Asia-Pacific and solid order growth from Designtex. To summarize, order growth in the Americas was driven by the strength of our project pipeline, and was achieved despite continued weakness in the energy sector and lower than expected growth in day-to-day business. We are hopeful that improved CEO in small business sentiment will help bolster demand in our day-to-day business. For EMEA, the environment remains mixed, but it’s worth noting again that the modest decline in orders during the current quarter compared to a very strong prior year. Asia-Pacific posted a record level of quarterly orders during the third quarter, and Designtex also posted notable order growth. Before I turn to our outlook, I want to provide an update on PolyVision and the anti-dumping proceedings we have discussed on previous calls. During the third quarter, we secured the support of the domestic steel producers to file a request with the Department of Commerce to revoke the duties related to the primary gauge of steel we have to import from Japan, and to allow for the recovery of the related duties paid to-date. We expect the department to publish notice of this exclusion by the end of the month, soliciting the comments, and resolve the matter by the end of our fourth quarter. Accordingly, our current quarter earnings and our estimate for the fourth quarter do not include any duties associated with these purchases. The balance of porcelain enameling steel we import remains subject to anti-dumping duties for now, and we estimate that our earnings could be reduce by a few hundred thousand dollars per quarter for these remaining duties and our ongoing efforts to mitigate. We will provide periodic updates as any new material information becomes available. Turning to the fourth quarter of fiscal 2017, we expect to report revenue in the range of $735 million to $760 million, which reflects an expected range of an organic revenue decline of 1% to organic revenue growth of 2%. Related to EMEA, we expected to report an operating loss in the fourth quarter, primarily due to our expectation of lower revenue and higher operating expenses, both on a sequential basis compared to the third quarter and on a year-over-year basis compared to the fourth quarter of the prior year. We anticipate year-over-year improvement in our EMEA gross margin again in the fourth quarter, but we expect the resulting gross margin in the fourth quarter to be lower than the third quarter of this year due to our expectation of lower revenue, as well as the non-recurring nature of the accounting benefits we recorded in the third quarter. As a result of these factors, we expect to report fourth quarter earnings within a range of $0.22 to $0.26 per share. As I said in the earnings release, there are two potential items which are not reflected in our earnings estimate for the fourth quarter that we estimate could reduce our fourth quarter results by up to $0.08 per share. One item is related to a potential reduction in the French statutory tax rate, which the French government is currently considering, and if enacted in the fourth quarter, could require us to report a non-cash charge to reduce the value of our deferred tax assets. In addition, we are working toward annuitizing some of our smaller defined benefit plans, which if completed in the fourth quarter, could result in a modest use of cash and an accounting charge related to accumulated-other comprehensive losses recorded in connection with these plans. We have not included these items in our earnings estimate as there are a number of factors in each case, which are outside of our control. From there we will turn it over for questions.

Thank you [Operator Instructions]. Our first question comes from the line of Budd Bugatch with Raymond James. Your line is open.

I guess the first question would have to go to, talk about the Americas volume for a minute, so a couple of questions. And you talk about the day-to-day business, David, and you talk about the impact of, I think, the price increase. And it looks to me like that we probably a wash over in the overall quarter, although it had some volatility in the month. What can you tell us about day-to-day business? Is there any chance of losing share in that? Your project wins are notable, and your pipeline looks good, but David say is an outlier and I think that represents somewhere of 20% or more of your business. And maybe, what can you tell us about market share? Or is your project, is your product portfolio, goods to meet the demands of this smaller customers in the day-to-day business?

Thanks Budd. So I’d say, first of all, day-to-day is an important segment for us and, and this is the close our dealers, I mean, the nature of it is such that we don’t have as much visibility to it. So, these are typically things that are not priced essentially, they’re priced by dealers. And so there is others -- we just have less information about it. But we are doing what we can to understand what’s happening there. It’s possible that as you go back to a few months and you go back early in the year, some of the product gaps that we talked about in this call and we knew that was affecting some of our win rates, we’ve resolved those and they’ve helped us improve our win rates. And they could have had an impact on day-to-day business as well. Why is that business changed, is still rather uncertain. It’s also possible that we’re just facing increased competition in this segment of our dealers business. And we know with some specific cases where some competitors have been more aggressive, and we think it's best to comment to that. So we’re -- if it is a matter of just competitiveness, we’re making sure that we’re as competitive as we need to be. It’s also possible though that it could be something that is broader and more driven by the economy. As I mentioned in my remarks, we know of some others in our industry who has commented on softness among the small customer segment, which could be equal or amongst small orders. So we’re speculating there, I would admit. But it was uncertainty in the economy during the period we’re talking about. And this is not in a soft spot for us historically. If you go back three-four years ago, this has been a spot we hold a reasonable amount of market share at least to say next year. So, it’s an area that’s getting a lot of attention from us right now, because it’s a segment that addresses a lot of the other issues, the things could be the one that’s remaining on our plate, and it's a topic of conversations.

And Budd just one more comment about your question about the order growth, and potentially we’ve been affected by the price increase. We don’t know exactly how much if any of the order growth in the third quarter was related to pull-forward business that would have otherwise been ordered in December. We can clearly forward the fact between October and September, and maybe a little bit from November. But November still grew over the last year. And so far in December through the first three weeks at anyway, in total, orders are up low single-digit percent in the Americas, which tells me that if there is some pull-forward effect from December in the third quarter order patterns that it likely was relatively small. But until December finishes, we really won’t have a concrete view on whether or not if anything of significance was pulled out of December or the fourth quarter into the third quarter because of the price increase.

And as just as a follow-up, just to make sure I understood. Was there any significant change in behavior as for the election? Have you seen any change in behavior on that, and then I’ll do another question.

I think it’s really too early to say. We watch our orders every week of course, and we have a strong week and know we’ll have a softer week. But I can’t point to any specific change as a result of shift after the election. I think it will be more interesting to see how that plays out after the inauguration and after the first few actions are taken by the new administration. I think that’s when we may see some changes. But right now it’s too early to say.

And my second question, I guess, one of the things that we’ve noted was a significant year-over-year, a gain or increase in operating expenses in the Americas; and if you could go over and give us what some of the pieces of that, the economics going forward.

Biggest drivers related to our continued investment and product development, marketing and sales organization. And the other is variable compensation, linked in part to the tax gain that we recorded in the quarter.

And there is also a continuing impact on another variable comp that’s getting amortized over 12 quarters. Is that quarter?

Yes, that’s right. The tax benefit that was recorded in that prior year, the compensation committee took a position to role that into the variable compensation calculation over three years. And therefore, the expense associated with that affects last year, this year, and next year.

And if I could sneak in one other question, talk a bit about EMEA, was a great quarter in terms of gross margin improvement. Maybe you could help us figure out how much of that was due to the fact of the increased volume or the shipping of the backlog? And how much of it is actually operationally improvement, and what’s the likely -- look forward in that?

I mean, it’s a $15 million year-over-year improvement. And in constant currency, revenue was up couple of percent. And therefore, I would say that contributed maybe $1 million to $2 million of incremental operating income of the $15 million. Operating expenses were relatively flat. You might remember last year we had some non-recurring items related to severance and other matters, which we did not have this year, which you would expect benefit, but we had higher operating expenses associated with Munich Learning and Innovation Center, and some other normal increases. So that was a net push. So that leaves $14 million for the balance, which was largely driven by gross margins. Similarly into that is from the accounting benefit that I called out in the release, which leaves $12 million. And we disclosed last year that we had $5 million of disruption and $4 million of cost from other issues that we were incurring last year. So, of the $12 million, $9 million is not having the cost reoccur from the prior year, which leads three, which is continued cost reduction gross margin improvement initiatives and modestly favorable mix compared to last year.

I’ll add to that. Beyond the economic benefits from the improvements, we can also look at other metrics in our businesses that tend to be leading indicators of how we’ll do in the future. These include rework phase, for example. And we’re seeing our rework in fact this fall quarter-after-quarter, month-after-months, and that’s really a promising sign that shows the impact of the new processes of bringing in place the investments we’re making in equipments and so on. We continue to make investments. We see additional opportunities to be better across the board. So, there is plenty of opportunity left, but I can see, not just in the financial results but also in some of these operational metrics that there is more good news ahead.

Yes, and what I love about that is that, and our sales organization is now spending 100% of their time selling and positioning our innovation with customers versus explaining to our dealers and customers what we’re in the middle of from a restructuring standpoint, and trying to smooth that over as much as possible. Our operations are stable. We feel like we have additional upside, as Jim articulated in our sales organization as that work doing what they do best.

Thank you. And our next question comes from the line of Kathryn Thompson from Thompson Research Group. Your line is open.

First focusing on EMEA, appreciate by the burst of bridge for the margin upside. But from a realistic standpoint as we look forward, what can we reasonably expect that is ongoing in terms of upside, in terms of margins; maybe thinking about it, or in terms of basis points. And in addition of that, if you could give a little bit more color on intra-quarter trends for EMEA initiatives in the Americas operations? Thank you.

I’m not sure, I follow the second question, so let’s comeback to that. But on EMEA, I don’t have a specific estimate that we were prepare to provide publicly as to how we think gross margins are going to behave. And in EMEA go forward basis, in part because we don’t know exactly how volume is going to play out, and that will obviously be a contributing factor. If you assume volume as flat, just to try to tease apart the gross margin improvement, it is really going to be dependent on the pace of success we have in driving continues improvement in our manufacturing environment, as well as impacting our customer mix, our product mix across the business, pricing strategies and like. We have, I don’t know, close to a dozen different initiatives that we’re working on to strengthen our business model in EMEA. And some of those will go well, some of those we may have to restart, some of them will go faster some of them will go slower. What I can tell you is we feel good about continuing to improve gross margin without volume. Volume will help -- will be additive to that from an absorption perspective. But I don’t have any specifics that we’re prepare to share today.

Maybe, a clarification on that margin side, so you’ve reported the first EMEA adjusted operating earnings, operating profit, that is since fiscal ’14, Q3 fiscal ’14, Q4 rather fiscal ’14. And as we look at the Q4, is it reasonable that that segment could be profitable? And also as you look into the full-year for next year grand you haven’t provided specific guidance for next fiscal year. But is it reasonable to assume that you could see some continued profit trend as we had into the next fiscal year?

Well, as I said in my earlier remarks, we expect an operating loss in the fourth quarter. And it will be driven off of -- in EMEA, good point. And it will be driven off of lower revenue and higher operating expenses, sequentially, as well as year-over-year in that segment. We also expect gross margin to go down, in part because of the lower revenue but also in part because of the non-recurring nature of the accounting benefits we recorded in the third quarter. But I expect them to still be higher than they were last year in the fourth quarter. So that’s the mechanics on the fourth quarter. And next year, we’ll give more color in March on what we’re thinking over the course of the next year. But I will remind you that our business in Europe is seasonal, and that the first half of our year tends to have lower revenue than the second half; so, it would be likely that if volume were to be relatively flat, and that’s not a forecast, this is just an assumption for the sake of dialogue. But if volume were to be relatively flat year-over-year, it's likely that we would lose money in the first half of the year and hopefully make money in the back half of next year. In fact, we’ve made $2.4 million I think it was in the third quarter of this year. It’s possible that we could make money in the back half of this year, but it’s also possible that we could lose money in the back half of this year.

And for Americas, what percentage of Americas are projects as a percentage of the total orders in that segment? And just quick follow-up on Americas margins, how much can you estimate that mix, in fact that margin weakness in quarter? Thank you.

The project mix has been pushing 50% more recently. Historically, it ran closer to 40%, but it's been in the high 40s for the last several quarters. And all of those mix issues that I was talking about had several million dollars of an impact on the quarter, Kathryn. I’d be hesitant to try to size the exact amount. But it's in the neighborhood of closer to 0, 5 or 10, that’s probably closer to 5, and maybe it had more. But I would stop short of trying to quantify beyond that.

[Operator Instructions] Our next question comes from the line of Matt McCall with Seaport Global. Your line is open.

So, I guess the two questions I have left, how much take third one. But actually, Dave, you said the energy impact was going to be significant, and I think was the word used on Q4 results. Can you give us a little more detail there about how much pressure is going to hit you forward? And if you could just maybe review what the total impact is expected to be from that energy weakness in this fiscal year?

Well, Matt, as I said from an orders comparison perspective, we think we’ve lapped to the most significant declines. But from a revenue perspective, I think it will impact us a little bit more in the fourth quarter. And I am trying to look quickly if we’re at it. It will be noticeable. I don’t think it will be a 300 basis-point impact in the fourth quarter, but maybe something around half of that, something like that. Because we were already feeling revenue declines in the energy sector in the fourth quarter of last year, we just haven’t been feeling it as we’ve been feeling it more significantly over the last several quarters. And I think if it stays at that existing run rate and follows where orders behaved in the third quarter, then we’ll feel it on revenue side in the fourth quarter. And then hopefully we have that stuff beyond us.

And is there -- I’m just trying to gauge the magnitude of pressure this year, I know, it’s going on more than a year. But if you look at this fiscal year, do you have an estimate of what the energy sector specifically look down in dollar terms?

I don’t, maybe we can quantify that on the next quarter’s call. So, you guys have a sense. We’ve talked about being down in the 40% to 50% range in orders over the last several quarters. So, it’s not the biggest segment. But when you -- it’s not any segment either, I think before this mess, it was number seven or six or seven, and when you have that kind of a decline. On top of declines that were in the 10% to 20% range, the year before, it’s pretty dramatic.

So you talked a little bit about share in North America specifically to dealer base, and I think you’ve answered that pretty what’s going on. I recall that going back a few quarters, you had some shares using EMEA from some service issues which faced in the summer, I believe, that was summer ’15. Do you think that the share has been recaptured there? I know you’re fighting back to get what you’ve lost. But can you just give us an update on where that stands, and where the customer relationships stand over there?

Yes, so we don’t have a different number that we can kind of use that’s reliable for EMEA. So, the use of a country data where we can get it, we look at our win rates. And so, we use other kinds of proxies that kind of just start with sharing, but we don’t have the same kind of specificity, and look at the federal countries. We can see places where, in France for example, we think we’re doing much better than we’re doing before. We can see improvements in our win rates. We can see the effectiveness of our sales force, it’s improved. And just kind of any proxy I look at it, the strength in that market, and that’s a very important market for us. And then if you go to the UK, the UK is challenged by both the things going on in the local economy but also changes that we had in our own models. We make changes with our dealership model. We make changes with some of our sales leadership. And those changes are paying off, and we can see lot of the early signs of that. We’ve had a nice win, that’s a very significant win just in the last month that was account served before, but we’ve confirmed that account. So that’s good sign. But it’s too early for me to point to revenue and says that I can measure revenues in terms of market share there. And I’m not going to try to go country-by-country, but that’s really where that analysis taking us, so it's places like metrics -- we feel that we’re doing quite well now. And then there is other market where the Middle East again is challenged by oil prices. So it's hard to tell what’s happening with market share. We can just feel the pressure in our business as low oil prices creates a down-draft across the whole economy. So I’m not trying to dodge the questions, I just want to point out...

That’s okay.

...by first to really answer it, and we try to give color about things that I just said, and give there the sense of what’s going on.

I’ll speak one more in. So, you talked a lot about EMEA profitability. Can you -- are there any IOs, any puts-takes that we need to think about as we move into next year from the Americas perspective on the margin side? Is there anything that occurred that happened this year that what won’t occur next year? Or is it just a straight contribution margin that we should assume, and when we’re looking at how that model profit margins for next year?

Matt, I don’t have any update on next year, and any early update on next year that we would otherwise provide in March. But, I mean, I would look at the relatively unusual mix of business that we had in the current quarter. And I don’t think that is as unusual, and may or may not occur again next year. I’m trying to think back Matt to the first and second quarter, and I don’t [multiple speakers]

In Q1 we had warranty charges, I believe...

I mean, we may have disclosed. We disclosed a warranty charge in the first quarter that was relatively unusual. But we’ll get into more of the details next quarter.

Thank you. And we have a follow-up from the line of Budd Bugatch with Raymond James. Your line is open.

David thank you for the clarification or the additional information of the tariff issue the anti-dumping issues. But explain to me, what’s in the fourth quarter estimate and what’s not, any go-over that again? And then what the impact is, is it couple of hundred thousand dollars in the fourth quarter that you implied?

That’s right.

So was that we…

Just a few hundred thousand [multiple speakers]

And what happens if that’s relieved, do you get -- how much comes back on to the Company’s…

Actually nothing was -- what will comeback is what’s recorded on the balance sheet. We have not expensed the anti-dumping deposits that we’ve paid, because we believe they would be refunded through our efforts to have the primary gauges, steel excluded. So, while we pay deposits of duties as the steel was being imported, as it’s begun to have been consumed in our production [technical difficulty] expensed it, because we believe, we will get it back through the exclusion and the retroactive application of the exclusion.

So, on the operating numbers and nothing is in there for the anti-dumping. Is that right?

Nothing is in there for the primary gauge of steel that we import that is covered under the exclusion that’s in process of -- with the Commerce Department. The other gauges of steel that we import which is much smaller percentage of our production, those are still subject to duties. And so those are being paid and expensed as we go.

And so if we look on the balance sheet where we find the issue on the dumping duties that come back off [multiple speakers] on the balance sheet?

It's in current assets. And I think it’s easier in other current assets or in inventory.

Also on the energy front, are we seeing anything sequentially we can talk about now that energy costs are rising? Are we seeing any more activity in the energy sector and the energy vertical that maybe you can give us an early equivalent?

We’re not, but we’re thinking the same way you are that as oil prices rise, this sector has been important factor for us. And we’re hopeful that as energy prices rise and they establish their normal budgets of capital expenditure and we’ll see some improvement in that sector. But honestly still probably haven’t seen that reverse. So it may take a little while for that to play out.

Thank you. And I am showing no further questions, at this time. I’d like to turn the call back to Mr. Keane for closing remarks.

Thank you. So, again, we’re pleased with our progress, the progress we’re able to demonstrate this quarter in our EMEA segment. I want to thank you all for your interest in Steelcase. And we wish you and your family a wonderful holiday season.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program, and you may all disconnect. Everyone, have a wonderful day.