Flexsteel Announces Third Quarter and Year to Date Operating Results
DUBUQUE, Iowa--April 16, 2002--Flexsteel Industries, Inc. today reported sales and earnings for its third quarter ended March 31, 2002.Net Sales for the fiscal quarter ended March 31, 2002 were $73.7 million compared to the prior year quarter of $72.0 million, an increase of 2%. Net income for the current fiscal year quarter is $2.0 million or $0.33 per share compared to the year earlier quarter of $0.8 million or $0.13 per share.
Net Sales for the nine months ended March 31, 2002 were $202.8 million compared to $215.9 million in the prior year nine months, a decrease of 6%. Net income for the nine months ended March 31, 2002 of $2.9 million or $0.48 per share decreased from the March 31, 2001 net income of $4.4 million or $0.71 per share.
During the current quarter, residential seating sales were $52.2 million, an increase of 1% from the prior year quarter. Recreational vehicle seating sales were $17.7 million, an increase of 9%. Commercial seating sales were $3.8 million, a decrease of 4%.
For the nine months ended March 31, 2002 compared to year 2001, residential seating sales were $141.4 million, a decrease of 7%. Recreational vehicle seating sales were $48.2 million, a decrease of 3%. Commercial seating sales were $13.2 million, a decrease of 6%.
Gross margin for the quarter ended March 31, 2002 was 22.4% compared to 20.3% in 2001. The gross margin improvement was due to changes in product mix, improved absorption of fixed costs and lower depreciation expense. For the nine months ended March 31, 2002 the gross margin was 21.0% compared to 21.1% for the nine months ended March 31, 2001. Increased health care costs and facility closing costs offset product mix margin improvement and lower depreciation expense.
Selling, general and administrative expenses as a percentage of net sales were 18.2% and 18.8% for the current quarter and prior year quarter, respectively. The higher percentage in the prior year quarter was due primarily to bad debt expense. For the nine months ended March 31, 2002 and 2001, selling, general and administrative expenses as a percentage of net sales were 18.9% and 18.2%, respectively. The increased SG&A cost is primarily related to retail operations with five stores operating in the current year and only two stores in the prior year.
Working capital at March 31, 2002 was $60.2 million, which includes cash, cash equivalents and investments of $17.1 million. Working capital increased by $4.8 million from the June 30, 2001 amount.
Capital expenditures were $0.5 million during the first nine months of fiscal 2002 and $3.6 million in the first nine months of fiscal 2001. The Company expects that capital expenditures will be minimal in the next three months.
All earnings per share amounts are on a fully diluted basis.
The Company will host a conference call Wednesday morning, April 17, 2002, at 8:30 a.m. Central Time. The dial-in-number is 800-556-3831 with an access code of 00566. A replay will be available for two weeks beginning approximately four hours after the conclusion of the call. The dial-in-number for the replay is 888-813-1488 and no access code is required.
For more information, visit our web site at http://www.flexsteel.com.
Certain statements made in this release are not based on historical facts, but are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believes," "expects," "estimates," "may," "will," "should," or "anticipates" or the negative thereof or other variations thereon or comparable terminology. These statements reflect the Company's judgment with respect to the future and investors are cautioned that all forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Some of the factors that could affect results are the cyclical nature of the furniture industry, the effectiveness of new product introductions, the product mix of our sales, the cost of raw materials, the amount of sales generated and the profit margins thereon, competition, both foreign and domestic, credit exposure to customers and general economic conditions. Any forward-looking statement speaks only as of the date of this press release, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.
FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, June 30,
2002 2001
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ..................$ 7,840,875 $ 10,048,562
Investments ................................ 9,297,577 2,536,469
Trade receivables - less allowance for
doubtful accounts:
March 31, 2002, $2,650,000
June 30, 2001, $1,950,000 ................. 32,780,244 28,363,058
Inventories ................................ 28,216,033 31,379,836
Deferred income taxes ...................... 2,700,000 2,700,000
Other ...................................... 1,102,864 1,546,710
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Total current assets........... 81,937,593 76,574,635
PROPERTY, PLANT, AND EQUIPMENT
At cost less accumulated depreciation:
March 31, 2002, $62,934,615
June 30, 2001, $60,604,549 ................ 20,878,974 24,553,962
NOTES RECEIVABLE ............................ 422,022 415,762
DEFERRED INCOME TAXES ....................... 300,000 300,000
OTHER ASSETS ................................ 8,689,774 8,450,110
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TOTAL ........................$112,228,363 $110,294,469
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade ...................$ 3,265,477 $ 5,277,607
Accrued liabilities:
Payroll and related items ................. 4,752,468 3,803,071
Insurance ................................. 6,446,705 5,863,451
Other accruals ............................ 6,294,281 5,253,930
Industrial revenue bonds payable ........... 975,000 975,000
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Total current liabilities ............ 21,733,931 21,173,059
DEFERRED COMPENSATION ....................... 4,555,201 4,059,186
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Total liabilities ..................... 26,289,132 25,232,245
------------ ------------
SHAREHOLDERS' EQUITY:
CommonStock - $1 par value; authorized
15,000,000 shares;
Issued March 31, 2002, 6,097,036 shares;
Issued June 30, 2001, 6,034,210 shares .... 6,097,036 6,034,210
Additional paid-in capital ............... 464,195
Retained earnings ........................ 78,823,751 78,272,996
Accumulated other comprehensive income ... 554,249 755,018
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Total shareholders' equity ............ 85,939,231 85,062,224
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TOTAL .......................$112,228,363 $110,294,469
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
March 31,
---------------------------
2002 2001
------------- -------------
NET SALES.............................. $73,742,322 $71,972,413
COST OF GOODS SOLD..................... (57,212,434) (57,327,582)
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GROSS MARGIN........................... 16,529,888 14,644,831
SELLING, GENERAL AND ADMINISTRATIVE....
(13,426,961) (13,545,901)
------------- -------------
OPERATING INCOME....................... 3,102,927 1,098,930
------------- -------------
OTHER:
Interest and other income......... 264,382 264,361
Interest expense.................. (82,491) (74,068)
------------- -------------
Total........................ 181,891 190,293
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INCOME BEFORE INCOME TAXES............. 3,284,818 1,289,223
PROVISION FOR INCOME TAXES............. (1,270,000) (475,000)
------------- -------------
NET INCOME............................. $2,014,818 $814,223
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AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
BASIC........................... 6,077,766 6,070,892
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DILUTED......................... 6,151,621 6,140,248
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EARNINGS PER SHARE OF COMMON
STOCK:
BASIC.......................... $ 0.33 $ 0.13
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DILUTED........................ $ 0.33 $ 0.13
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Nine Months Ended
March 31,
---------------------------
2002 2001
------------- -------------
NET SALES..............................$202,776,664 $215,922,618
COST OF GOODS SOLD.....................(160,259,481) (170,289,829)
------------- -------------
GROSS MARGIN........................... 42,517,183 45,632,789
SELLING, GENERAL AND ADMINISTRATIVE....
(38,321,935) (39,251,899)
------------- -------------
OPERATING INCOME....................... 4,195,248 6,380,890
------------- -------------
OTHER:
Interest and other income......... 747,837 874,236
Interest expense.................. (210,616) (260,363)
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Total........................ 537,221 613,873
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INCOME BEFORE INCOME TAXES............. 4,732,469 6,994,763
PROVISION FOR INCOME TAXES............. (1,810,000) (2,575,000)
------------- -------------
NET INCOME............................. $2,922,469 $4,419,763
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AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
BASIC........................... 6,069,493 6,131,994
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DILUTED......................... 6,128,240 6,199,023
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EARNINGS PER SHARE OF COMMON
STOCK:
BASIC.......................... $ 0.48 $ 0.72
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DILUTED........................ $ 0.48 $ 0.71
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