Steelcase Inc (SCS) 2015 Q3 法說會逐字稿

Good day, everyone, and welcome to Steelcase's third-quarter fiscal 2015 conference call. As a reminder, today's call is being recorded.

For opening remarks and introductions, I would like to turn the conference call over to Mr. Raj Mehan, Assistant Treasurer and Director of Investor Relations.

Thank you, Amanda. 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, Senior Vice President and Chief Financial Officer; Mark Mossing, Corporate Controller and Chief Accounting Officer; and Terry Lenhardt, Vice President Finance for the Americas, EMEA, and Asia Pacific.

Our third-quarter earnings release, which crossed the wires yesterday, is accessible on our website. This conference call is being webcast, and this webcast is a copyrighted production of Steelcase Inc. The presentation slides that accompany this webcast are also available on IR.Steelcase.com, and a replay of this call will be posted to the site later today.

Our discussion today may include references to non-GAAP financial measures and forward-looking statements. Reconciliations to the most comparable GAAP measures and the risks associated with the use of forward-looking statements are included in our earnings release and webcast slides. We are incorporating by reference into this conference call the text of our Safe Harbor statement included in yesterday's release.

Following our prepared remarks, we will respond to questions from investors and analysts. And with that out of the way, I would like to turn the call over to our President and Chief Executive Officer, Jim Keane.

Thank you, Raj; and good morning, everyone. We are pleased to report another strong quarter. We are reporting organic revenue growth over the prior year with improvements in adjusted operating margin and cost of sales.

EMEA's revenue growth was substantial, at 14%, and this helped us to offset some of the disruption from operational changes during the last two quarters. The Americas segment earned 12% operating income despite revenue being slightly below our expectations.

Although Americas orders were in line with expectations, revenues were less than expected because several customers with major projects requested extended delivery dates. These requests typically are triggered by delays in construction schedules, which are impacted by labor shortages in certain markets in the US.

Regarding EMEA, our teams made very good progress this quarter in our ongoing restructuring efforts. We are very pleased that we are able to complete the transfer of our factory in Wisches, France, to a third party that is employing our former employees from that factory. This location is currently acting as a supplier to Steelcase until we can move all production from this plant to other facilities in our EMEA manufacturing network.

Our customer service levels have returned to normal in EMEA, and our new plant in the Czech Republic has begun production. We will continue to experience some extra costs from redundancy and inefficiency over the next year as we shift production to the receiving factories and pay some negotiated labor premiums. The economic benefits of these restructuring actions will be more fully realized beginning in the second half of next fiscal year.

We are continuing to make smart investments around customer experiences in the APAC region. For example, our leadership team was in Shanghai last month for the opening of our refreshed WorkLife Center there. In Mumbai we opened a similar space that helps us demonstrate our insights about work.

One of the keys to being a successful global company is telling a consistent brand story around the world, and these WorkLife Centers are a major element in that strategy. Even accounting for local variations in office culture and real estate utilization, the major themes and insights are resonating everywhere we go.

As we look to the future, we acknowledge that there's a lot of economic uncertainty in global markets, which limits longer-term visibility. There are also important local factors in every market that affect our profitability.

For example, in the US I mentioned the tightening construction labor force. But we also see limited capacity in the trucking industry, which is causing freight costs to reduce only gradually, even as oil prices fall quickly.

We believe there is surer footing around the more traditional drivers of growth, around job creation, and the competition for talent. And we believe we maintain a significant advantage through our insights about the ways that space can impact productivity, retention, and engagement.

Our brand continues to grow stronger and more consistent around the world. Ultimately these are the factors that help us improve our relevance to our customers even in an uncertain world.

One last thing I'd like to mention that goes beyond the financial results: the Environmental Protection Agency awarded Steelcase a Green Power Leadership Award, given to companies that significantly advance the development of green power sources. And our Company received a perfect score of 100 on the 2015 Corporate Equality Index.

You can read more about our position on these issues and many others in our newly released Corporate Social Responsibility Report. I am very proud of the Steelcase employees and accomplishments featured in that report.

Now I will turn it over to Dave Sylvester.

Thank you, Jim. I will start with a few high-level comments about the third-quarter results and balance sheet, provide some additional color commentary around our order patterns and outlook for the fourth quarter, and then we will move to your questions.

As Jim mentioned, we feel good about our financial results for the third quarter. We accomplished a 7% adjusted operating income margin despite approximately $9 million of disruption and inefficiencies associated with our manufacturing footprint changes in EMEA. We continue to anticipate these changes will result in approximately $20 million of annualized savings once fully implemented by the end of the third quarter of fiscal 2016, and we believe we are well on our way toward reducing the disruption and achieving these savings.

During the third quarter we initiated the movement of production from Durlangen in Germany to the new plant in the Czech Republic, which we expect to continue over the next three to four quarters. We also completed the transfer of the Wisches, France, facility to a third party, who will now serve as a contract manufacturer for us while we move production to other Steelcase facilities over the next three quarters.

We also believe we are continuing to gain market share in the US, despite our sales this quarter finishing down slightly compared to the prior year and ending the run of 18 consecutive quarters of organic revenue growth in the Americas. While revenue declined by less than 1% in the Americas, order growth was consistent with our expectations. Therefore, customer order backlog in the Americas increased 8% compared to the prior year.

As it relates to our actual results versus our expectations, adjusted earnings exceeded the high end of our guidance for the third quarter, despite revenue coming in below the low end of the estimated range we communicated in September. Net favorable tax items played a role, as did favorable cost of sales as a percentage of revenue and lower variable compensation compared to our expectations.

I will talk about the tax items in a few minutes, but first let me cover the other two items and our revenue performance in the quarter. The better-than-expected cost of sales was driven by a favorable mix of business including the delay of a portion of a large government project in EMEA that moved to the fourth quarter; better-than-expected freight delivery costs, albeit these costs remained higher than the prior year; lower inflation; and miscellaneous adjustments to various reserves and accrued liabilities, all of which were individually insignificant but netted to a small favorable impact.

Regarding variable compensation, lower than expected expense was driven by the impacts of higher restructuring costs and changes in estimates within the calculations, offset in part by higher expense associated with the favorable tax items in the quarter.

Regarding revenue compared to our expectations, we had a modest organic decline in the Americas compared to modest growth expectations. We believe the shortfall was driven by timing of requested shipment dates associated with project business, as total order growth in the third quarter was in line with our expectations. As a result, backlog going into the fourth quarter stood at the highest level since the financial crisis.

For EMEA, the 14% organic growth was slightly better than expected. The impact of disruption from our restructuring activities on order patterns and shipments was less than expected, which more than offset the delay of a portion of a large government project that moved to the fourth quarter.

Remember, customer order backlog in EMEA at the start of the third quarter was more than 30% higher than the prior year, due to the fact that second-quarter order patterns included a significant number of requests for shipment dates in the third quarter. It also included the large government project, which was ordered at the end of last year and in the first quarter of this fiscal year.

Revenue in the Other category grew by 8% organically, with PolyVision, Designtex, and Asia Pacific each contributing to the growth. But sales for each business also came in a little short of our expectations.

Shifting to year-over-year comparisons, adjusted operating income of $56.1 million in the quarter was approximately $2 million higher than last year. Operating leverage from the revenue growth in EMEA and the Other category and benefits of improved pricing and favorable business mix in the Americas were partially offset by disruption and inefficiencies associated with the manufacturing footprint changes in EMEA.

Specific to the Americas, cost of sales as a percentage of revenue was 160 basis points lower than the prior year, which reflects continued improvement compared to the flat year-over-year results in the second quarter and the 70 basis point year-over-year increase in the first quarter. Improved pricing net of inflation, continued cost-reduction efforts, and a favorable shift in business mix were the biggest drivers of the year-over-year improvement.

We also realized sequential improvements in our freight and distribution and warranty costs compared to earlier in the year. The cost of sales improvement was offset by higher operating expenses, which included a biennial sales and dealer conference, an increase in the allowance for doubtful accounts, and increased spending on sales and other growth initiatives.

Turning to EMEA, I would like to reiterate that the adjusted operating loss of $3.7 million in the quarter included approximately $9 million of disruption and inefficiencies associated with the manufacturing footprint changes, which target $20 million of annualized savings once fully implemented. Adjusted for the disruption costs and factoring in a quarter of the targeted annualized savings, adjusted operating results on a pro forma basis would have been positive for the third quarter.

A lot has to happen for us to fully eliminate the disruption and realize the targeted savings, but I wanted to recognize the hard work of our people in EMEA, as we are beginning to see the light at the end of the tunnel.

Restructuring costs in the quarter were much higher than the estimate we provided in September. We did not include in our estimate any significant costs associated with the transfer of the French manufacturing facility to a third party, as completion of this project was subject to consultation with our workers councils and applicable legal requirements, which ultimately occurred earlier than expected.

Income tax in the current quarter included a $5.5 million benefit from income tax credits associated with the manufacturing footprint changes in EMEA, net of $1.2 million of other discrete tax charges and $2.3 million associated with recording a higher year-to-date effective tax rate of approximately 44%, versus the 42% we had booked in the first half of the fiscal year. The income tax credits were negotiated with local authorities in connection with our investment in a new manufacturing facility in the Czech Republic, and these credits will offset future tax liabilities of the related legal entity. Additional credits totaling $3 million could be earned in future quarters, dependent on the level of additional capital investment placed in service at the facility.

For the fourth quarter we expect to record a 44% effective tax rate, less net discrete tax benefits of approximately $800,000, including benefits associated with the retroactive reinstatement of the US research credit, net of other items.

Moving to the balance sheet and cash flow, our $24 million of cash generated from operating activities during the third quarter was reduced by the $27 million facilitation payment associated with the transfer of our operations in Wisches, France, as well as $18 million of estimated tax payments in the US, which were $13 million higher than the prior year due to higher US income and lower utilization of foreign tax credits in the current year.

The increase in working capital since the end of fiscal 2014 is being driven primarily by seasonality and a large government project in EMEA, which was manufactured during the first half of this year and for which we began recognizing revenue in the third quarter. Capital expenditures totaled $25 million and were related to the new plant in the Czech Republic, manufacturing investments, and new product introductions.

We continue to expect capital expenditures to approximate $90 million to $100 million for the full fiscal year as we complete the construction of the new facility in EMEA, continue to upgrade various manufacturing technologies, and invest in a number of customer-facing initiatives including showrooms and e-business platforms.

We returned approximately $14 million to shareholders in the quarter, $13 million through the payment of a cash dividend of $0.105 per share and $1 million through repurchasing shares to satisfy participants' tax withholding obligations upon the vesting of restricted stock unit grants.

Turning to order patterns, I will start with the Americas, where our orders in the third quarter grew 3% compared to the prior year. As I said in the release, the rate of order growth in the Americas was dampened by the timing of the Thanksgiving holiday in the US and a few large projects in the prior year.

Taking these factors into consideration, we were pleased with the quality of order growth in the third quarter, especially in small to medium-sized project business, which continue to show strength. Customer order backlog for the Americas ended the quarter up approximately 8% compared to last year.

Across quote types we experienced double-digit percentage growth in orders related to project business, and low to mid single-digit declines from continuing agreements and our marketing programs aimed at smaller day-to-day business. Regarding project business, the growth in orders was driven by many small to midsized or more typical projects again this quarter. We remain less dependent upon a few very large projects, as was more the case in the prior year.

With respect to vertical markets in the Americas, we experienced order growth in the energy, technical professional, financial services, information technology, insurance services, and healthcare sectors, while manufacturing, federal government, education, and state and local government declined against the prior year. Overall, incoming orders remained well diversified, with nine different vertical markets receiving orders of at least $25 million in the quarter.

Switching to EMEA, orders in constant currency grew modestly in total compared to the prior year. We experienced order growth in the Middle East, France, the Central, Eastern, and Southern parts of Europe as a group, and the United Kingdom, while Germany, Africa, Benelux, and Iberia declined. The order decline in Germany was largely driven by a large project in the prior year; but we also believe orders were impacted by customer disruption associated with our restructuring activities, which has since reduced.

With the 14% organic revenue growth in the quarter and orders only growing modestly, customer order backlog for EMEA ended the quarter down compared to the prior year.

Within the Other category, order growth was strongest at Designtex, while PolyVision was flat and Asia Pacific declined modestly.

To summarize, our order patterns in the Americas continue to reflect solid growth in project business, which was driven by small to medium-size business again this quarter; and we believe we continue to gain market share in the US. EMEA order patterns remain choppy, but we continue to believe we have seen the bottom of the recession in Western Europe.

Asia Pacific orders declined modestly after growing in the second quarter, suggesting it may be premature to conclude we are emerging out of the demand lull we have been experiencing over the past two years. Our Designtex growth strategies continue to gain traction, and PolyVision remains solid.

Turning to the fourth quarter, we expect to report organic revenue growth of 7% to 10% compared to the prior year, which included an extra week of shipments across all of our segments totaling approximately $54 million. Sequentially the fourth-quarter revenue estimate represents an organic decline of between 2% and 5%, consistent with typical seasonality.

We expect approximately $7 million of disruption and inefficiencies in the fourth quarter associated with the changes in our manufacturing footprint in EMEA. As a result of these factors, we expect to report fourth-quarter earnings within a range of $0.16 to $0.20 per share, including restructuring costs of approximately $0.03 per share, which translates to an adjusted earnings range of $0.19 to $0.23 per share.

From there we will turn it over for questions.

(Operator Instructions) Budd Bugatch, Raymond James.

Just help me. I know the 7% to 10% is the consolidated organic growth in the fourth quarter, and you have given us a lot of detail in terms of some of the backlogs and color inside of the segments. But maybe you can help us with the organic growth in the different segments, at least as you expect it, and some fleshing on that on the fourth quarter.

Well, typically, Budd, we have stayed away from giving a lot of color on the specific segments and kept our guidance at the Inc. level. But I think you can imagine that certainly the Americas are going to have to grow for us to hit 7% to 10% on an Inc. basis.

And with that backlog going into the quarter at 8% over last year, I think it is safe to assume that our growth is going to be led by the Americas. Beyond that I think of I'll hold back on any further comments.

Well, I'm a bit confused about EMEA just because you've got the large government project to deliver in the fourth quarter and yet the backlog is down year-over-year. Maybe asking the question this way: Do you think you're going to have positive organic growth in EMEA in Q4?

Yes.

Okay. Well, thank you very much. I will let others answer the questions. I will adhere to the two-question rule.

Todd Schwartzman, Sidoti.

Question on the widespread health of the verticals. You had mentioned nine different vertical markets received orders of at least $25 million in the quarter. Is that on a global basis?

Americas only.

Okay. So within the Americas, Dave, can you give us a frame of reference that that nine is, versus what a year ago, and versus what sequentially?

Last quarter I think we commented on eight or nine of the 10 verticals were above $20 million in orders. What we have is we have 10 primary vertical markets that we track, and then we have a number of other vertical markets that we don't track as closely.

You can imagine the 10 are our largest. But it has been fairly broad-based the last few quarters.

Okay. Also the number of customers that requested the later than expected delivery, can you just put some numbers to that?

Yes, I will let Terry make some comments on that. He has done a lot of analysis. I won't steal all of his thunder; but I will remark on the fact that we had some federal government orders that had some quite long requests for shipment dates. In fact, I think they were 90 days out; Terry, is that right?

Yes.

And the total of those orders was not quite $10 million, but that was one of the drivers. I'll let Terry fill you in on some of the others.

Your question is about specifically pushouts, or the extended requested delivery dates?

The number of customers requesting the extended delivery dates.

Okay. On pushouts -- two things we track: pushouts and extended delivery dates. Pushouts typically happen at the end of a period, where a customer might call and might not quite be ready for a delivery, for any number of reasons.

There were 10 at the end of the third quarter with over $0.25 million they've asked to push out. That typically is a pushout of one or two or three weeks.

When you look at asking for extended delivery dates, customers just ask for a delivery date; they don't ask for it to put in an extended date. So there's really nothing to track as far as number of customers asking for extended dates.

What we did was we went back and actually looked and analyzed our requested delivery date trends over the last four years. Did it by quarter; looked at when an average order came in and when would that ship out.

What we found at the beginning of the recovery that it was really bunched in week 4 to 6, and then there was a tail from there on out, as you would expect. As depending on the customer needs, they might need it in six weeks or 10 or 12. But on average the sweet spot was 4 to 6.

What we saw is projects became a bigger part of the business. That sweet spot moved out a bit. And that is what we've been using for forecasting.

And there's different seasonality, so we really analyze it by quarter. What we saw a little bit in the second quarter but more in the third is that pattern that we have been forecasting on was further out.

And as Dave said, the only thing you really point to is the greater than 90 days, where that amount really doubled, led by the federal government and six other customers that were just one-off reasons. The rest of it, really we can't identify exactly why; but I attribute it to a large number of midsize business projects. As a percentage of our sales it went up by 2 points in the second quarter, and typically projects have longer lead times.

Okay, that helps. Thanks. And lastly, fiscal 2016, if you could maybe give us a sense on how you are thinking about CapEx. Specifically whether we should expect to see any significant difference from that $90 million to $100 million.

Well, we have commented previously that the $90 to $100 million that we have experienced this year was impacted by the new plant in the Czech Republic in the neighborhood of -- Mark, $25 million?

It's roughly $25 this year.

So our normalized run rate is back in the $70 million range, so I think as the starting point that's what you should count on for next year. But we are in the process of evaluating the replacement of one of our aircraft, which -- if we were to do that -- could add maybe $20 million to $25 million to the baseline for next year.

But then once we sell the replacement aircraft, we'd have hopefully $20 million to $25 million coming in, in proceeds from the aircraft. Whether or not the acquisition and the sale happens in the exact same year is always a question.

And when might you have some clarity on the plane?

We'll give better guidance on CapEx next quarter.

Great. Thanks a lot.

Josh Borstein, Longbow Research.

You had mentioned that project business was comprised of many more small and medium-sized projects, less dependent on a very few large projects. What do you think is driving the increase in that small to medium-size business activity?

Well, our speculation, as we said last quarter, is that we believe it could be a sign of the recovery strengthening, as we start to see business come in on a broader base. We said that last quarter, and we said this is the first time we've really seen it in that part of incoming.

So we said, let's give it 90 days. Well, we gave it 90 days and it happened again.

So I want to say let's give it another 90 days; but two quarters feels pretty good. And we have heard from some of our competitors on their calls making similar comments about feeling this expansion of small to medium-size business driving their order (technical difficulty). But we consider it a positive sign.

Okay. Historically when you have seen a broadening of the mix of project sizes, has that in the past been a bullish indicator for an improving economy?

You know, Josh, every recovery feels like it is been different in the past. If you go back to previous recoveries, we would see continuing business come back first and be most significant, and then project pickup. This recovery has been led by project business coming back first: large projects first and now small to medium-sized projects. So we really can't draw any historical correlation.

Okay. What defines a small project for you guys and what defines a medium-size project for you guys?

If you look at -- we think about medium-size as, call it, $250,000 to $3 million. But really that can go up for us to $4 million or $5 million.

What we are not seeing this year are a large number of greater than $7 million or $8 million kind of projects. We are seeing them more in the sweet spot of $1 million to $3 million.

Yes. Last year in the third quarter alone I think orders reflected a better than $5 million project in Germany, which I referenced in my comments. We also (technical difficulty) a couple of very large customers order a lot of business under continuing agreements; that was well north of $5 million.

So just in the third quarter alone, off the top of my memory, I can recall three different customers that were north of $5 million in the third quarter. And this quarter I don't know that I can recall any. There might have been one.

Okay. And a small project just constitutes anything less than $250,000?

Yes, generally. It's important to note that they may be going to a big customer. You don't necessarily equate the size of the project to the size of the customer. So we've got a lot of $1 million to $3 million going to Fortune 1000 kind of clients.

But when I say small to medium-sized we're talking about $250,000 to $3 million-ish.

Okay, thank you. Just given that kind of broadening of the project size and maybe that being a bullish indicator, looking at BIFMA then recently taking down their 2015 shipment forecast of 4%, do you find that a reasonable number at this time based on what you are seeing entering 2015?

I will give you more reaction next quarter, Josh, when we give broader color on what we see for the next fiscal year. But I will say what we have said for the last several quarters, that we continue to believe that the industry is going to expand in the coming quarters, including next year, and we're going to continue to target growing faster than the market. But I'll give you more color next quarter, which might help you hone in on range of percentages.

I will just add we are also, along with everybody else, very pleased to see the GDP data and the jobs creation data that was released this week. The jobs creation data in particular has had a good correlation with our business, so that was a good sign.

Okay. Thanks. That's helpful. Then just on the raw material costs and where you think they are headed particularly for steel and for resin.

Well, I am not going to forecast inflation because it's not my expertise. But I will tell you, in the quarter we did have inflation.

It was less than we expected, which is influenced by steel prices and other commodities. But go forward, I will stop short of projecting any specific trend.

I'd add, going the other way you have aluminum, which has seen a significant increase over the last several months due to global demand. So you have some commodities going up and some commodities going down.

We know we will have wage growth and growth in healthcare costs as well. How that all nets out is what I am stopping short of trying to predict.

Okay, so an increase in wage growth; some health cost; some aluminum you mentioned. I am sure freight year-over-year has gone up. But did you mention steel is also up year-over-year?

I don't have that data right in front of me. We track with the CRU monitor, so whatever that is trending we have a 90-day lag. I just don't remember the data specifically. Wasn't a big part of the story.

Well, that depends on the endpoints you pick, too, on steel prices. But it hasn't been dramatic.

Okay. All right. Any price increases, any announcements in the offing for next year?

The last price increase that we announced was in April of 2014, and we publish that to our dealers and customers in January.

Okay. Can you talk just a little bit about capacity utilization rates in the Americas right now? Any CapEx plans that you might be contemplating?

Well, I will connect those two dots, Josh. I assume you are asking that, if we continue to grow, will we have to add capacity?

Exactly.

The answer to that is we don't believe so. We do monitor pinch points quite closely on various product lines, and some of our assembly operations or component part production, or some of the suppliers. And where we may have to make investments would be in tooling and maybe a piece of equipment here and there. But nothing significant that we would -- we can imagine for the foreseeable future.

Okay, all right. And just one more for me. Could you talk a little bit about the profitability in EMEA? It was better than I expected. What might we expect in terms of profitability for that segment going forward?

Well, I think they're going to continue to be plagued by disruption and inefficiencies, which we give a lot of color on in our webcast slides and describe what that is, including labor premiums and redundancy and overhead and labor costs, etc. They are going to be plagued by that at least through the first half of the year and maybe a little bit even into the third quarter.

We will start to see savings as we move production line by line in early next fiscal year. But we won't be entirely out of the two facilities until at least August, maybe even into early in the third quarter as well.

So what we have been talking about internally is that the first half of the year is likely to continue to show losses. If for no other reason the summer quarter will show losses because of August; you know that history of vacations in Western Europe.

Then in the back half of the year, which is typically their strongest seasonal part of the year, if we can get the disruption behind us and start to have the savings come in and the top line hangs on in this kind of flat to up category that we've been talking about the last few quarters, then we would like to think that they should be making a little bit of money in the back half of the year.

Great. I appreciate all the color. Thanks much and happy holidays to you.

Budd Bugatch, Raymond James.

Just a couple of nitty questions. I notice in the guidance for the impact of the extra week it was a difference I think between that number and the number you gave last year for the impact of the 14th week. Can you hopefully explain that?

Yes, it has to do with EMEA. EMEA's fiscal quarter-end ends on the last day of the fiscal year, whereas the rest of the business ends on the last Friday of February. So the rest of the business -- all the businesses had 14 weeks -- I'm sorry; yes, 14 weeks in the fourth quarter of last year. But in the previous year EMEA had one day less than 14 weeks.

So year-over-year last year EMEA only had an extra day, so we didn't consider that in the calculation. Whereas this year it flips back to 13 weeks, so they had an extra week last year compared to this year, if you follow that.

Partially, I think. It's not trivial? Okay.

When we are together I can draw a picture and it might help. But it has to do with EMEA and their fiscal year-end timing.

So that is the difference, it is just in EMEA? Because there was no impact on EMEA last year and there is impact this year.

Yes.

Correct.

Okay. And finally just another nitty question. You, I think, tell us we are going to have about $8 million of restructuring cost pretax and $0.03 after-tax. When I do the calculation at least on the diluted shares outstanding at the end of the third quarter, I get $0.04. So just help me -- and I use a lower tax rate because I think you would do that. But tell me what I'm doing wrong, or how do I get there.

I'd have to pull up the detail and look. Can we follow up with you on that?

Sure. Absolutely. That would be fine.

All right, thank you very much. Again, happy holidays.

(Operator Instructions) Peter van Roden, Spitfire Capital.

To start, what was revenue growth in the Americas ex- the pushout and the deliveries that were asked to be extended?

I don't know that we have quantified that specifically. But I think it would be close to our expectations, which were modest -- was modest growth.

Okay. Then I guess as a follow-up to that, if you look at what Miller said last week, they were up 8% organically in North America. The BIFMA shipments are up 10% through October, for September and October. You guys grew kind of modestly.

What is the difference between you guys seeing modest growth and them in the mid-single digits to low double digits? Where is that difference?

I don't work for them, so I don't have as much knowledge about their business as I do about ours, so it's really hard to make comparisons. But I would say quarter-to-quarter comparisons get a little bit challenged.

One thought is that I know that they have a large project that they won last year that they may be shipping today, which could be driving their revenue growth rate up. I don't recall what their guidance was for the next quarter, but our guidance is 7% to 10% organic growth. A piece of that is certainly being driven by the Americas.

I would also say that we have been consistently outpacing industry growth for the last several quarters. Not every quarter, but certainly 10 out of 12, let's say. So I don't really think a one-quarter comparison versus a competitor is indicative of any kind of trend.

Yes. I was also trying to reference the industry data just as another data point. That being up 10%.

Well, November is not out yet. But if we look at trailing three months, trailing 12 months, fiscal year, or fiscal year-to-date, or calendar year-to-date, our order patterns in the US are outpacing the industry on all four of those comparisons.

It is important to note too that BIFMA tracks US shipments of certain product. Our sales in the Americas would include Latin and South America, would include Canada; and some of their products aren't in BIFMA. So it is tough to do a direct comparison sometimes.

Got it. Okay. Thanks, guys.

I'm showing no further questions at this time. I'd like to turn the call back to Jim Keane, CEO, for closing remarks.

Thank you. I'll just close by wishing all of you a happy and relaxing holiday season. I want to thank you for taking the time to learn about our Company this year, and we look forward to continuing our conversations with you in 2015. Thank you.

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