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.

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

           

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

           

(in thousands)

           
             
      December 31,     June 30,
      2011     2011
             

ASSETS

           
             
CURRENT ASSETS:            

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
             

LIABILITIES AND SHAREHOLDERS’ EQUITY

           
             
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
             

 

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share data)

             
      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  

OTHER INCOME:

                       
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  

AVERAGE NUMBER OF COMMON

                       

SHARES OUTSTANDING:

                       
Basic     6,763       6,691    

 

6,745       6,676  
Diluted     6,967       6,924       6,968       6,881  

EARNINGS PER SHARE OF

                       

COMMON STOCK:

                       
Basic   $ 0.44     $ 0.32     $ 0.79     $ 0.67  
Diluted   $ 0.42     $ 0.31     $ 0.76     $ 0.65  
                         

 

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

       
      Six Months Ended
      December 31,
      2011     2010

OPERATING ACTIVITIES:

           
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  
             

INVESTING ACTIVITIES:

           
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 )
             

FINANCING ACTIVITIES:

           
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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