DUBUQUE, Iowa — Flexsteel Industries reported first quarter results.
- Net sales were $119.8 million, a 6.9% increase;
- Net income was $6.2 million or $0.78 per share, including a $1.1 million or $0.14 per share after-tax gain on the sale of a facility.
Net sales were $119.8 million for the quarter ended Sept. 30, compared to net sales of $112.1 million in the prior year quarter, an increase of 6.9%.
Higher residential net sales are primarily due to increased sales volume. Lower contract net sales are primarily due to changes in product mix.
Gross margin as a percent of net sales for the quarter ended Sept. 30 was 21.8%, compared to 23.8% for the prior year quarter. The decrease in gross margin as a percentage of net sales is primarily due to increased raw material costs partially offset by improved absorption of fixed costs on higher net sales.
Selling, general and administrative (SG&A) expenses were 15.2% of net sales in the current year quarter, compared to 16.9% of net sales in the prior year quarter. The current year quarter includes improved fixed cost leverage. The prior year quarter included expenses for enhancement of consumer brand experience at retail.
During the current quarter, the company completed a $6.5 million sale of a facility and recognized a pre-tax gain of $1.8 million. On an after-tax basis, the gain represents $1.1 million or $0.14 per share.
The above factors resulted in net income of $6.2 million or $0.78 per share for the quarter ended Sept. 30 compared to $4.8 million or $0.61 per share in the prior year quarter.
Working capital (current assets less current liabilities) at Sept. 30 was $164 million compared to $158 million at June 30.
Changes in working capital include increases of $5 million in inventory, $3 million in accounts receivable and $2 million in accounts payable. Accounts receivable increased due to increased sales volume. Inventory increased to improve stocking positions.
For the quarter ended Sept. 30, the company paid $5.1 million for capital expenditures, including $3.2 million invested to upgrade the business information system.
On Sept. 12, the company announced a $0.22 per share quarterly dividend, a 10% dividend increase.
All earnings per share amounts are on a diluted basis.
SOURCE: Flexsteel press release