Fiscal 1998 was a record year, the best in our history. Consolidated net sales reached $2.76 billion, up 14.6% over 1997. Net income reached $217 million. Gross margins rose to 36.4% from 35.6% in 1997. We earned $1.40 per share in our inaugural year as a public company.

To me, the most notable thing about our performance in 1998 was the consistency it reflected. It was the third consecutive year of growth in sales, income, margins, manufacturing efficiency and employee productivity.

I regard this consistency as a satisfying consequence of measures we’ve taken over the past four years to fine-tune our production and distribution; to add to our understanding of how people are actually working in these times of rapid, unpredictable change; and to innovate across the board (including our factory floors) based on this understanding.

As a work effectiveness company, our reason for being is to put our expertise to work for our customers—help them create working environments that make significant contributions to their business strategies, their cultures and their employees’ pride, well-being and effectiveness.

We met this challenge in 1998, and I salute my Steelcase colleagues, Steelcase dealers and Steelcase suppliers for their contributions. Their ability to team up and do whatever needs to be done honors our heritage, strengthens our culture and makes my job a lot easier.

Our customers’ needs continue to change quite dramatically as they deal with the pressures of advancing technologies, international competition and facilities that haven’t kept pace. We intend to anticipate these needs and deliver working environments that meet them.

Working environments that deliver competitive advantages and offer attractive returns on the investments in them. Working environments that are in a class by themselves.

The course we’ve charted is clear: We study. We learn. We innovate. And we deliver environments that transform the ways people work...help them work more effectively than they ever thought they could.

Obviously, we have our work cut out for us. And I couldn’t be more pleased.

James P. Hackett
President and Chief Executive Officer