Flexsteel Industries, Inc. (NASDAQ: FLXS) (“Flexsteel” or the
“Company”), one of the largest manufacturers, importers, and
marketers of residential furniture products in the United States,
today reported fourth quarter and full-year fiscal 2024
results.
Key Results for the Fourth Quarter and Fiscal Year Ended June
30, 2024
- Net sales for the quarter increased 4.7% to $110.8 million
compared to $105.8 million in the prior year quarter. For the year,
net sales increased 4.8% to $412.8 million compared to $393.7
million in the prior year.
- Robust sales orders of $108.5 million for the fourth quarter
representing growth of $15.8 million, or 17.1%, compared to the
prior year quarter.
- Gross margin increased to 21.3% for the fourth quarter and
21.1% for the year compared to 20.0% in the prior year quarter and
18.0% for the prior year.
- GAAP operating income of $7.6 million or 6.9% of net sales for
the fourth quarter and $17.1 million or 4.1% of net sales for the
year compared to $4.2 million or 4.0% of net sales in the prior
year quarter and $10.5 million or 2.7% of net sales for the prior
year.
- Adjusted operating income of $6.2 million or 5.6% of net sales
for the fourth quarter and $18.3 million or 4.4% of net sales for
the year compared to $4.2 million or 4.0% of net sales in the prior
year quarter and $8.1 million or 2.1% of net sales for the prior
year.
- GAAP net income per diluted share of $0.89 for the current
quarter and $1.91 for the year compared to net income per diluted
share of $1.91 for the prior year quarter and net income per
diluted share of $2.74 for the prior year.
- Adjusted net income per diluted share of $0.75 for the quarter
and $2.11 for the year compared to adjusted net income per diluted
share of $0.36 for the prior year quarter and $0.87 for the prior
year.
- Cash flow from operations in the fourth quarter of $7.5 million
and $31.9 million for the year.
- Debt repayments of $23.5 million for the year, or an 83%
reduction in borrowings under the line of credit.
GAAP to non-GAAP reconciliations follow the financial statements
in this press release
Management Commentary
“I am extremely pleased with our fourth quarter results,” said
Derek Schmidt, President & Chief Executive Officer of Flexsteel
Industries, Inc. “Despite continued challenging conditions for our
industry, we are executing well and delivered 4.7% sales growth in
the quarter which represents our third consecutive quarter of mid-
to high-single digit year-over-year growth. Our strategies to gain
share in our core markets and pursue new growth in expanded markets
are working due to our investments in innovation, new product
development, customer experience and marketing.”
Mr. Schmidt continues, “At the same time, we continue to improve
our profitability and achieved a third consecutive quarter of
sequential quarter-over-quarter adjusted operating margin
improvement. Adjusted operating margin was 5.6% in the quarter, up
compared to 4.0% in the prior year quarter. The keys to our
consistent profit improvement have been our sales growth, strong
operational execution, cost savings and product portfolio
management, all of which have strong momentum and will continue to
be catalysts for continued margin expansion. The organization also
continues to manage working capital and cash effectively,
generating $7.5 million in operating cash flow and reducing debt by
$9.4 million in the quarter.”
Mr. Schmidt concludes, “I’m very encouraged by these fourth
quarter results and excited about the direction we are headed. In a
period where many industry participants continue to realize
meaningful year-over-year declines in both sales and profits,
Flexsteel is financially strong, growing sales, improving
profitability, generating cash, and aggressively investing for the
future. While we expect industry headwinds will likely remain
during our fiscal year 2025, our team is hyper-focused on
continuing our sales growth and profit improvement momentum despite
these challenges. I remain confident in our team and its ability to
continue creating significant value for our customers and
shareholders in both the near and long-term."
Operating Results for the Fourth Quarter Ended June 30,
2024
Net sales were $110.8 million for the fourth quarter compared to
net sales of $105.8 million in the prior year quarter, an increase
of $5.0 million, or 4.7%. The increase was driven by higher sales
of home furnishings products sold through retail stores of $6.7
million, or 7.3%, led by unit volume and product mix. Sales of
products sold through e-commerce channels decreased by ($1.7)
million, or (11.7%), compared to the fourth quarter of the prior
year. Lower sales in the e-commerce channel were driven by softer
consumer demand.
Gross margin for the quarter ended June 30, 2024, was 21.3%,
compared to 20.0% for the prior-year quarter, an increase of 130
basis points (“bps”). The 130-bps increase was primarily due to
fixed cost leverage on higher sales, supply chain cost savings and
efficiency improvements, and product portfolio management partially
offset by higher ocean freight costs.
Selling, general and administrative (SG&A) expense was 17.0%
of net sales for the quarter ended June 30, 2024, compared to 16.0%
in the prior year quarter. The current quarter includes
non-recurring stock-based compensation expense of $1.5 million or
1.4% of net sales, related to the re-valuation of previously
awarded equity grants to Flexsteel's former CEO, Jerry Dittmer. The
number of stock grants previously awarded to Mr. Dittmer under the
Company's long-term incentive plans were reduced based on a time
proration of his employment from grant date through his retirement
date with the Company. In accordance with US generally accepted
accounting principles, the modified awards were revalued at the
stock price at the time of modification, resulting in the $1.5
million non-cash expense.
In the quarter, the Company completed the sale of its former
Starkville, Mississippi manufacturing facility resulting in a gain
of $3.3 million.
Operating income for the quarter ended June 30, 2024, was $7.6
million compared to $4.2 million in the prior-year quarter. On an
adjusted basis, operating income for the quarter ended June 30,
2024, was $6.2 million compared to $4.2 million in the prior year
quarter.
Income tax expense was $2.5 million, or an effective rate of
33.9%, during the fourth quarter compared to tax benefit of ($6.4)
million, or an effective rate of (167.5%), in the prior year
quarter. The prior year effective tax rate was impacted by the
reversal of a full valuation allowance on deferred tax assets.
Net income was $4.9 million, or $0.89 per diluted share, for the
quarter ended June 30, 2024, compared to net income of $10.2
million, or $1.91 per diluted share, in the prior year quarter. On
an adjusted basis, net income for the quarter ended June 30, 2024,
was $4.1 million or $0.75 per diluted share compared to adjusted
net income of $1.9 million or $0.36 per diluted share in the prior
year quarter.
Manufacturing Network Optimization Update
During the quarter, the Company incurred $0.4 million of
restructuring expense primarily related to the transfer of
inventory and equipment to other facilities and a loss on sale of
equipment as part of the Company’s previously announced closure of
our Dublin, GA manufacturing facility. Total expense incurred in
fiscal year 2024 related to the restructuring was $3.0 million. The
facility closure was completed during the fourth quarter and the
Company does not expect to incur any further expense related to the
restructuring plan.
Liquidity
The Company ended the quarter with a cash balance of $4.8
million, working capital (current assets less current liabilities)
of $95.0 million, and availability of approximately $55.2 million
under its secured line of credit.
Capital expenditures for the year ended June 30, 2024, were $4.8
million.
Financial Outlook
First Quarter Fiscal
2025
Fiscal Year
2025
Sales
$100 - 105 million
$420 - 436 million
Sales Growth (vs. Prior Year)
5% to 10%
2% to 6%
GAAP Operating Margin
5% to 6%
5.5% to 6.5%
Free Cash Flow(1)
$0 to 5 million
$20 to 30 million
Line of Credit Borrowings
$0 to 7 million
$0
(1) Free cash flow is calculated as net
cash provided by operations, less capital expenditures
Conference Call and Webcast
The Company will host a conference call and audio webcast with
analysts and investors on Tuesday, August 20, 2024, at 8:00 a.m.
Central Time to discuss the results and answer questions.
- Live conference call: 833-816-1123 (domestic) or 412-317-0710
(international)
- Conference call replay available through August 27, 2024:
877-344-7529 (domestic) or 412-317-0088 (international)
- Replay access code: 5385251
- Live and archived webcast: ir.flexsteel.com
To pre-register for the earnings conference call and avoid the
need to wait for a live operator, investors can visit
https://dpregister.com/sreg/10191523/fd3a88a6b7 and enter
their contact information. Investors will then be issued a
personalized phone number and pin to dial into the live conference
call.
About Flexsteel
Flexsteel Industries, Inc., and Subsidiaries (the “Company”) is
one of the largest manufacturers, importers, and marketers of
residential furniture products in the United States. Product
offerings include a wide variety of furniture such as sofas,
loveseats, chairs, reclining rocking chairs, swivel rockers, sofa
beds, convertible bedding units, occasional tables, desks, dining
tables and chairs, kitchen storage, bedroom furniture, and outdoor
furniture. A featured component in most of the upholstered
furniture is a unique steel drop-in seat spring from which the name
“Flexsteel” is derived. The Company distributes its products
throughout the United States through its e-commerce channel and
direct sales force.
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 herein. 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, supply chain
disruptions, litigation, restructurings, the effectiveness of new
product introductions and distribution channels, the product mix of
sales, pricing pressures, the cost of raw materials and fuel,
changes in foreign currency values, retention and recruitment of
key employees, actions by governments including laws, regulations,
taxes and tariffs, the amount of sales generated and the profit
margins thereon, competition (both U.S. and foreign), credit
exposure with customers, participation in multi-employer pension
plans, disruptions or security breaches to business information
systems, the impact of any future pandemic, and general economic
conditions. For further information regarding these risks and
uncertainties, see the “Risk Factors” section in Item 1A of our
most recent Annual Report on Form 10-K.
For more information, visit our website at
http://www.flexsteel.com.
FLEXSTEEL INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
June 30,
2024
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
4,761
$
3,365
Trade receivables, net
44,238
38,168
Inventories
96,577
122,076
Other
8,098
6,417
Assets held for sale
1,707
616
Total current assets
155,381
170,642
NONCURRENT ASSETS:
Property, plant and equipment, net
36,709
38,652
Operating lease right-of-use assets
61,439
68,294
Other
20,933
12,962
TOTAL ASSETS
$
274,462
$
290,550
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable - trade
$
25,830
$
24,745
Accrued liabilities
34,576
30,360
Total current liabilities
60,406
55,105
LONG-TERM LIABILITIES:
Lines of credit
4,822
28,273
Other liabilities
58,867
65,551
Total liabilities
124,095
148,929
SHAREHOLDERS' EQUITY:
150,367
141,621
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
274,462
$
290,550
FLEXSTEEL INDUSTRIES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (UNAUDITED)
(in thousands, except per share
data)
Three Months Ended
Twelve Months Ended
June 30,
June 30,
2024
2023
2024
2023
Net sales
$
110,822
$
105,819
$
412,752
$
393,692
Cost of goods sold
87,255
84,704
325,508
322,745
Gross margin
23,567
21,115
87,244
70,947
Selling, general and administrative
18,878
16,879
70,444
62,846
Restructuring expense
355
—
2,982
—
Environmental remediation
—
—
—
(2,788
)
(Gain) on disposal of assets
(3,262
)
—
(3,262
)
—
Other expense
—
—
—
347
Operating income
7,596
4,236
17,080
10,542
Other income (expense):
Other income
6
7
20
18
Interest (expense)
(155
)
(444
)
(1,550
)
(1,341
)
Total other (expense)
(149
)
(437
)
(1,530
)
(1,323
)
Income before income taxes
7,447
3,799
15,550
9,219
Income tax expense (benefit)
2,525
(6,362
)
5,022
(5,559
)
Net income (loss)
$
4,922
$
10,161
$
10,528
$
14,778
Weighted average number of common shares
outstanding:
Basic
5,157
5,150
5,170
5,225
Diluted
5,553
5,314
5,519
5,385
Earnings (loss) per share of common
stock
Basic
$
0.95
$
1.97
$
2.04
$
2.83
Diluted
$
0.89
$
1.91
$
1.91
$
2.74
FLEXSTEEL INDUSTRIES, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (UNAUDITED)
(in thousands)
For the years ended June
30,
2024
2023
OPERATING ACTIVITIES:
Net income
$
10,528
$
14,778
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation
3,997
4,572
Deferred income taxes
(1,454
)
(7,154
)
Stock-based compensation expense
4,647
3,191
Changes in (recoveries) for losses on
accounts receivable
(160
)
(380
)
(Gain) on disposition of capital
assets
(2,839
)
(313
)
Changes in operating assets and
liabilities
17,164
8,295
Net cash provided by operating
activities
31,883
22,989
INVESTING ACTIVITIES:
Proceeds from sale of capital assets
4,179
340
Capital expenditures
(4,772
)
(4,790
)
Net cash (used in) investing
activities
(593
)
(4,450
)
FINANCING ACTIVITIES:
Dividends paid
(3,219
)
(3,241
)
Treasury stock purchases
(1,659
)
(3,700
)
Proceeds from lines of credit
367,818
363,805
Payments on lines of credit
(391,270
)
(373,271
)
Proceeds from issuance of common stock
88
—
Shares withheld for tax payment on
invested shares and options exercised
(1,652
)
(951
)
Net cash (used in) financing
activities
(29,894
)
(17,358
)
Increase in cash and cash equivalents
1,396
1,181
Cash and cash equivalents at beginning of
period
3,365
2,184
Cash and cash equivalents at end of
period
$
4,761
$
3,365
NON-GAAP DISCLOSURE (UNAUDITED)
The Company is providing information regarding adjusted
operating income, adjusted operating margin, adjusted net income,
and adjusted diluted earnings per share of common stock, which are
not recognized terms under U.S. Generally Accepted Accounting
Principles (“GAAP”) and do not purport to be alternatives to
operating income, net income, or diluted earnings per share of
common stock as a measure of operating performance. A
reconciliation of adjusted operating income, adjusted net income,
and adjusted diluted earnings per share of common stock is provided
below. Management believes the use of these non-GAAP financial
measures provides investors useful information to analyze and
compare performance across periods excluding the items which are
considered by management to be extraordinary or one-time in nature.
Because not all companies use identical calculations, these
presentations may not be comparable to other similarly titled
measures of other companies.
Reconciliation of GAAP operating income to adjusted operating
income and GAAP operating margin to adjusted operating
margin:
The following table sets forth the reconciliation of the
Company’s reported GAAP operating income to the calculation of
adjusted operating income for the three and twelve months ended
June 30, 2024 and 2023:
Three Months Ended
Twelve Months Ended
June 30,
June 30,
(in thousands)
2024
2023
2024
2023
Reported GAAP operating income
$
7,596
$
4,236
$
17,080
$
10,542
Restructuring expense
355
—
2,982
—
CEO Transition Costs
1,510
—
1,510
—
Environmental remediation
—
—
—
(2,788
)
(Gain) on disposal of assets
(3,262
)
—
(3,262
)
—
Other expense
—
—
—
347
Adjusted operating income
$
6,199
$
4,236
$
18,310
$
8,101
GAAP operating margin
6.9
%
4.0
%
4.1
%
2.7
%
Adjusted operating margin
5.6
%
4.0
%
4.4
%
2.1
%
Reconciliation of GAAP net income to adjusted net
income:
The following table sets forth the reconciliation of the
Company’s reported GAAP net income to the calculation of adjusted
net income for the three and twelve months ended June 30, 2024 and
2023:
Three Months Ended
Twelve Months Ended
June 30,
June 30,
(in thousands)
2024
2023
2024
2023
Reported GAAP net income (loss)
$
4,922
$
10,161
$
10,528
$
14,778
Restructuring expense
355
—
2,982
—
CEO Transition Costs
1,510
—
1,510
—
Other expense
—
—
—
347
(Gain) on disposal of assets
(3,262
)
—
(3,262
)
—
Environmental remediation
—
—
—
(2,788
)
Tax impact of adjustments(1)
617
—
(113
)
614
Expiring state tax credits
—
1,577
—
1,577
Remeasurement of deferred tax assets and
valuation allowance
—
(9,838
)
—
(9,838
)
Adjusted net income
$
4,142
$
1,900
$
11,645
$
4,690
(1) Effective tax rate of 44.2% was used
to calculate the three months ended June 30, 2024. There were no
tax impacted non-GAAP adjustments for the three months ended June
30, 2023. Effective tax rate of 9.2% and 25.1% was used to
calculate the twelve months ended June 30, 2024 and 2023.
Reconciliation of GAAP diluted earnings per share of common
stock to adjusted diluted earnings per share of common
stock:
The following table sets forth the reconciliation of the
Company’s reported GAAP diluted earnings per share to the
calculation of adjusted diluted earnings per share for the three
and twelve months ended June 30, 2024 and 2023:
Three Months Ended
Twelve Months Ended
June 30,
June 30,
2024
2023
2024
2023
Reported GAAP diluted income (loss) per
share
$
0.89
$
1.91
$
1.91
$
2.74
Restructuring expense
0.06
—
0.54
—
CEO Transition Costs
0.27
—
0.27
—
Other expense
—
—
—
0.06
(Gain) on disposal of assets
(0.59
)
—
(0.59
)
—
Environmental remediation
—
—
—
(0.52
)
Tax impact of adjustments(1)
0.11
—
(0.02
)
0.11
Expiring state tax credits
—
0.30
—
0.29
Remeasurement of deferred tax assets and
valuation allowance
—
(1.85
)
—
(1.83
)
Adjusted diluted earnings per shares
$
0.75
$
0.36
$
2.11
$
0.87
Note: The table above may not foot due to
rounding. (1) Effective tax rate of 44.2% was used to calculate the
three months ended June 30, 2024. There were no tax impacted
non-GAAP adjustments for the three months ended June 30, 2023.
Effective tax rate of 9.2% and 25.1% was used to calculate the
twelve months ended June 30, 2024 and 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240819218015/en/
INVESTOR CONTACT: Michael Ressler, Flexsteel Industries, Inc.
563-585-8116 investors@flexsteel.com
Flexsteel Industries (NASDAQ:FLXS)
過去 株価チャート
から 7 2024 まで 8 2024
Flexsteel Industries (NASDAQ:FLXS)
過去 株価チャート
から 8 2023 まで 8 2024
