DUBUQUE, IA -- Flexsteel Industries, Inc. today reported net sales for the quarter ended December 31, 2011 of $85.0 million compared to $82.8 million in the prior year quarter, an increase of 2.6%. The Company reported net income for the current quarter of $2.9 million or $0.42 per share compared to net income of $2.1 million or $0.31 per share in the prior year quarter.
For the six months ended Dec. 31, 2011, the Company reported net sales of $166.5 million compared to the prior year sales of $170.1 million, a decrease of 2.1%. The Company reported net income for the current six-month period of $5.3 million or $0.76 per share compared to a net income of $4.5 million or $0.65 per share in the prior year period. The prior year six-month period includes a pre-tax charge of approximately $1.0 million to facility closing costs for employee separation and other closing costs.
For the quarter ended Dec. 31, 2011, residential net sales were $67.0 million, an increase of 5.4% from the prior year quarter net sales of $63.5 million. Commercial net sales were $18.0 million compared to $19.3 million in the prior year quarter, a decrease of 6.5%.
For the six months ended Dec. 31, 2011, residential net sales were $129.5 million compared to residential net sales of $128.8 million in the six months ended Dec. 31, 2010, an increase of 0.6%. Commercial net sales were $37.0 million for the six months ended Dec. 31, 2011 compared to $41.3 million for the six months ended Dec. 31, 2010, a decrease of 10.3%.
Gross margin for the quarter ended Dec. 31, 2011 was 24.1% compared to 22.7% in the prior year quarter. For the six months ended Dec. 31, 2011, the gross margin was 23.7% compared to 22.6% for the prior year six-month period. Gross margin for the prior year quarter and six-month period was adversely impacted by inventory write-down of $0.6 million associated with the facility closing.
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
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(in thousands) |
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| December 31, | June 30, | |||||
| 2011 | 2011 | |||||
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ASSETS |
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| CURRENT ASSETS: | ||||||
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Cash |
$ | 15,871 | $ | 17,889 | ||
| Trade receivables, net | 32,055 | 31,451 | ||||
| Inventories | 79,012 | 73,680 | ||||
| Other | 5,715 | 5,333 | ||||
| Total current assets | 132,653 | 128,353 | ||||
| NONCURRENT ASSETS: | ||||||
| Property, plant, and equipment, net | 23,348 | 21,387 | ||||
| Other assets | 14,920 | 14,937 | ||||
| TOTAL | $ | 170,921 | $ | 164,677 | ||
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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| CURRENT LIABILITIES: | ||||||
| Accounts payable – trade | $ | 12,180 | $ | 9,899 | ||
| Accrued liabilities | 17,655 | 17,771 | ||||
| Total current liabilities | 29,835 | 27,670 | ||||
| LONG-TERM LIABILITIES: | ||||||
| Other long-term liabilities | 8,069 | 8,434 | ||||
| Total liabilities | 37,904 | 36,104 | ||||
| SHAREHOLDERS’ EQUITY | 133,017 | 128,573 | ||||
| TOTAL | $ | 170,921 | $ | 164,677 | ||
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
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(in thousands, except per share data) |
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| Three Months Ended | Six Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| NET SALES | $ | 85,001 | $ |
82,821 |
$ | 166,522 | $ | 170,051 | ||||||||
| COST OF GOODS SOLD | (64,543 | ) | (63,996 | ) | (127,100 | ) | (131,620 | ) | ||||||||
| GROSS MARGIN | 20,458 | 18,825 | 39,422 | 38,431 | ||||||||||||
| SELLING, GENERAL AND | ||||||||||||||||
| ADMINISTRATIVE | (15,765 | ) | (15,508 | ) | (31,096 | ) | (30,406 | ) | ||||||||
| FACILITY CLOSING COSTS | -- | -- | -- | (1,016 | ) | |||||||||||
| OPERATING INCOME | 4,693 | 3,317 | 8,326 | 7,009 | ||||||||||||
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OTHER INCOME: |
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| Interest and other income | 45 | 14 | 170 | 115 | ||||||||||||
| INCOME BEFORE INCOME TAXES. | 4,738 | 3,331 | 8,496 | 7,124 | ||||||||||||
| INCOME TAX PROVISION | (1,790 | ) | (1,200 | ) | (3,170 | ) | (2,650 | ) | ||||||||
| NET INCOME | $ | 2,948 | $ | 2,131 | $ | 5,326 | $ | 4,474 | ||||||||
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AVERAGE NUMBER OF COMMON |
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SHARES OUTSTANDING: |
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| Basic | 6,763 | 6,691 |
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6,745 | 6,676 | |||||||||||
| Diluted | 6,967 | 6,924 | 6,968 | 6,881 | ||||||||||||
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EARNINGS PER SHARE OF |
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COMMON STOCK: |
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| Basic | $ | 0.44 | $ | 0.32 | $ | 0.79 | $ | 0.67 | ||||||||
| Diluted | $ | 0.42 | $ | 0.31 | $ | 0.76 | $ | 0.65 | ||||||||
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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(in thousands) |
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| Six Months Ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
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OPERATING ACTIVITIES: |
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| Net income | $ | 5,326 | $ | 4,474 | ||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by (used in) operating activities: | ||||||||
| Depreciation | 1,404 | 1,408 | ||||||
| Deferred income taxes | (71 | ) | (498 | ) | ||||
| Stock-based compensation expense | 493 | 699 | ||||||
| Change in provision for losses on accounts receivable | (180 | ) | 800 | |||||
| Gain on disposition of capital assets | (16 | ) | (8 | ) | ||||
| Changes in operating assets and liabilities | (4,950 | ) | (6,633 | ) | ||||
| Net cash provided by operating activities | 2,006 | 242 | ||||||
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INVESTING ACTIVITIES: |
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| Net purchases of investments | (290 | ) | (189 | ) | ||||
| Proceeds from sale of capital assets | 16 | 42 | ||||||
| Capital expenditures | (2,676 | ) | (585 | ) | ||||
| Net cash used in investing activities | (2,950 | ) | (732 | ) | ||||
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FINANCING ACTIVITIES: |
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| Dividends paid | (1,180 | ) | (834 | ) | ||||
| Proceeds from issuance of common stock | 106 | 206 | ||||||
| Net cash used in financing activities | (1,074 | ) | (628 | ) | ||||
| Decrease in cash | (2,018 | ) | (1,118 | ) | ||||
| Cash at beginning of period | 17,889 | 8,278 | ||||||
| Cash at end of period | $ | 15,871 | $ | 7,160 | ||||
Source: Flexsteel Industries, Inc.
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