Flexsteel Industries, Inc. (NASDAQ:FLXS) today reported sales and
earnings for its third quarter and fiscal year-to-date ended March
31, 2007. Net sales for the fiscal quarter ended March 31, 2007
were $104.1 million compared to the prior year quarter of $110.3
million, a decrease of 6%. Net income for the current quarter was
$1.5 million or $0.23 per share, including a $0.4 million pre-tax
gain from the sale of vacant land, compared to $1.8 million or
$0.27 per share in the prior year quarter. Net sales for the nine
months ended March 31, 2007 were $311.1 million compared to $314.1
million in the prior year nine-month period, a decrease of 1%. Net
income for the nine months ended March 31, 2007 was $3.5 million or
$0.53 per share, including the aforementioned $0.4 million pre-tax
gain from the sale of vacant land, compared to net income of $3.2
million or $0.49 per share for the nine months ended March 31,
2006. For the quarter ended March 31, 2007, residential net sales
were $59.5 million, compared to $69.6 million, a decrease of 15%
from the prior year quarter. Recreational vehicle net sales were
$17.6 million for the quarter ended March 31, 2007, compared to
$19.1 million, a decrease of 8% from the prior year quarter.
Commercial net sales were $27.0 million for the quarter ended March
31, 2007, compared to $21.6 million in the prior year quarter, an
increase of 25%. For the nine months ended March 31, 2007,
residential net sales were $188.2 million, a decrease of 5% from
the nine months ended March 31, 2006. Recreational vehicle net
sales were $48.4 million for the nine months ended March 31, 2007,
a decrease of 9% from the nine months ended March 31, 2006.
Commercial net sales were $74.5 million for the nine months ended
March 31, 2007, an increase of 17% from the nine months ended March
31, 2006. Gross margin for the quarter ended March 31, 2007 was
19.7% compared to 19.4% in the prior year quarter. This improvement
is primarily due to the impact of changes in product mix. For the
nine months ended March 31, 2007, the gross margin was 18.9%
compared to 19.2% for the prior year nine-month period. Increased
freight and warehousing costs and lower sales volume resulting in
under absorption of fixed costs have negatively impacted gross
margin during the current nine-month period, as compared to the
prior year nine-month period. Selling, general and administrative
expenses were 17.6% and 16.5% of net sales for the quarters ended
March 31, 2007 and 2006, respectively. This increase in selling,
general and administrative expenses for the current quarter
compared to the prior year quarter is primarily due to the impact
of fixed selling costs at the lower residential sales volume. For
the nine months ended March 31, 2007 and 2006, selling, general and
administrative expenses were 17.0% and 17.3%, respectively. The
decrease in selling, general and administrative costs on a
year-to-date basis in comparison to the prior year period is due
primarily to lower collection related expenses, and to a lesser
extent to lower selling expenses and a reduction in stock-based
compensation expense. During the quarter ended March 31, 2007, the
Company recorded a pre-tax gain on the sale of vacant land of $0.4
million. Working capital (current assets less current liabilities)
at March 31, 2007 was $91.0 million. Net cash provided by operating
activities was $17.0 million for the nine months ended March 31,
2007. The increase in net cash provided by operating activities was
primarily the result of a reduction in finished product and raw
material inventories. The decrease of approximately $3.6 million in
finished product inventory is primarily due to improved inventory
turns. The decrease of approximately $5.6 million in raw material
inventory is due to lower levels of domestic manufacturing. Capital
expenditures were $10.2 million during the first nine months of
fiscal year 2007, including approximately $6.0 million for the
purchase of a west coast warehouse, approximately $1.5 million for
a warehouse addition in Indiana and approximately $1.4 million for
delivery equipment. Depreciation and amortization expense was $4.0
million and $4.1 million for the nine-month periods ended March 31,
2007 and 2006, respectively. The Company expects that capital
expenditures will be approximately $1.0 million for the remainder
of fiscal year 2007. The Company believes that existing credit
facilities are adequate for its capital requirements for the
remainder of fiscal year 2007. All earnings per share amounts are
on a diluted basis. Outlook Consistent with industry-wide trends,
the residential and vehicle markets continued soft through the
Company�s third fiscal quarter. The Company expects this to
continue through the remainder of the 2007 fiscal year. Sales of
products into commercial applications continued to be strong in the
third quarter of the 2007 fiscal year. We expect the growth rate in
commercial applications to moderate somewhat in the fourth quarter
of the fiscal year. The Company continues to explore cost control
opportunities in all facets of its business. The Company believes
it has the necessary inventories and product offerings in place to
take advantage of opportunities for expansion of certain markets,
such as commercial office and hospitality. The Company will
continue its strategy of providing furniture from a wide selection
of domestically manufactured and imported products. Analysts
Conference Call We will host a conference call for analysts on
Wednesday, April 25, 2007, at 10:30 a.m. Central Time. To access
the call, please dial 1-888-275-4480 and provide the operator with
ID# 9921107. A replay will be available for two weeks beginning
approximately two hours after the conclusion of the call by dialing
1-800-642-1687 and entering ID# 9921107. Forward-Looking Statements
Statements, including those in this release, which are not
historical or current facts, are �forward-looking statements� made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. There are certain important factors
that could cause our results to differ materially from those
anticipated by some of the statements made in this press release.
Investors are cautioned that all forward-looking statements involve
risk and uncertainty. Some of the factors that could affect results
are the cyclical nature of the furniture industry, the
effectiveness of new product introductions and distribution
channels, the product mix of sales, pricing pressures, the cost of
raw materials and fuel, foreign currency valuations, actions by
governments including taxes and tariffs, the amount of sales
generated and the profit margins thereon, competition (both foreign
and domestic), changes in interest rates, credit exposure with
customers and general economic conditions. Any forward-looking
statement speaks only as of the date of this press release. We
specifically decline to undertake any obligation to publicly revise
any forward-looking statements that have been made to reflect
events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
About Flexsteel Flexsteel Industries, Inc. is headquartered in
Dubuque, Iowa, and was incorporated in 1929. Flexsteel is a
designer, manufacturer, importer and marketer of quality
upholstered and wood furniture for residential, recreational
vehicle, office, hospitality and healthcare markets. All products
are distributed nationally. For more information, visit our web
site at http://www.flexsteel.com. FLEXSTEEL INDUSTRIES, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) �
March 31, June 30, 2007 2006 � ASSETS � CURRENT ASSETS: Cash and
cash equivalents $2,281,832� $1,985,768� Investments 975,656�
817,618� Trade receivables, net 50,001,632� 51,179,791� Inventories
75,148,334� 84,769,972� Other 6,146,876� 6,634,121� Total current
assets 134,554,330� 145,387,270� � NONCURRENT ASSETS: Property,
plant, and equipment, net 30,259,434� 24,158,041� Other assets
14,718,218� 13,780,393� � TOTAL $179,531,982� $183,325,704� �
LIABILITIES AND SHAREHOLDERS' EQUITY � CURRENT LIABILITIES:
Accounts payable � trade $13,851,456� $15,768,435� Notes payable
and current maturities of long-term debt 5,393,147� 9,466,643�
Accrued liabilities 24,273,418� 23,164,927� Total current
liabilities 43,518,021� 48,400,005� � LONG-TERM LIABILITIES:
Long-term debt 21,463,751� 21,846,386� Other long-term liabilities
5,707,572� 5,576,988� Total liabilities 70,689,344� 75,823,379� �
SHAREHOLDERS� EQUITY 108,842,638� 107,502,325� � TOTAL
$179,531,982� $183,325,704� FLEXSTEEL INDUSTRIES, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) � �
Three Months EndedMarch 31, Nine Months EndedMarch 31, 2007 2006
2007 2006 NET SALES $104,071,451� $110,345,280� $311,110,666�
$314,081,702� COST OF GOODS SOLD (83,593,396) (88,979,296)
(252,453,428) (253,869,453) GROSS MARGIN 20,478,055� 21,365,984�
58,657,238� 60,212,249� SELLING, GENERAL AND ADMINI-STRATIVE
(18,277,812) (18,223,706) (52,885,603) (54,320,932) GAIN ON SALE OF
LAND 392,685� � 392,685� � OPERATING INCOME 2,592,928� 3,142,278�
6,164,320� 5,891,317� OTHER INCOME (EXPENSE): Interest and other
income 128,356� 247,120� 459,363� 554,055� Interest expense
(329,682) (487,530) (1,110,298) (1,118,934) Total (201,326)
(240,410) (650,935) (564,879) INCOME BEFORE INCOME TAXES 2,391,602�
2,901,868� 5,513,385� 5,326,438� PROVISION FOR INCOME TAXES
(870,000) (1,140,000) (2,020,000) (2,090,000) NET INCOME
$1,521,602� $1,761,868� $3,493,385� $3,236,438� AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING: Basic 6,568,251� 6,562,456� 6,566,396�
6,556,669� Diluted 6,586,488� 6,583,230� 6,578,661� 6,576,487�
EARNINGS PER SHARE OF COMMON STOCK: Basic $0.23� $0.27� $0.53�
$0.49� Diluted $0.23� $0.27� $0.53� $0.49� FLEXSTEEL INDUSTRIES,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED) � Nine Months Ended March 31, 2007 2006 OPERATING
ACTIVITIES: Net income $3,493,385� $3,236,438� Adjustments to
reconcile net income to net cash provided by (used in) operating
activities: Depreciation and amortization 3,989,813� 4,099,889�
Gain on disposition of capital assets (473,060) (41,647)
Stock-based compensation expense 274,000� 427,000� Changes in
operating assets and liabilities 9,676,238� (14,211,816) Net cash
provided by (used in) operating activities 16,960,376� (6,490,136)
� INVESTING ACTIVITIES: Net purchases and sales of investments
(152,551) 631,110� Proceeds from sale of capital assets 637,466�
75,286� Capital expenditures (10,196,972) (3,169,859) Net cash
provided by (used in) investing activities (9,712,057) (2,463,463)
� FINANCING ACTIVITIES: Net (repayments of) proceeds from
borrowings (4,456,132) 10,525,838� Dividends paid (2,560,361)
(2,555,874) Proceeds from issuance of common stock 64,238� 78,101�
Net cash (used in) provided by financing activities (6,952,255)
8,048,065� � Increase (decrease) in cash and cash equivalents
296,064� (905,534) Cash and cash equivalents at beginning of period
1,985,768� 1,706,584� Cash and cash equivalents at end of period
$2,281,832� $801,050�
Flexsteel Industries (NASDAQ:FLXS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Flexsteel Industries (NASDAQ:FLXS)
Historical Stock Chart
From Jul 2023 to Jul 2024