Flexsteel Industries Inc. has reported results of operations for its third quarter and fiscal year-to-date March 31, 2011.
Excerpts from the RV seating manufacturer’s press release follow.
The company reported net sales for the quarter of $85.2 million compared to $81.5 million in the prior year quarter, an increase of 4.6%. The company’s net income improved by 5.8% in the current quarter to $2.5 million or 35 cents per share compared to net income of $2.3 million or 34 cents per share in the prior year quarter.
For the nine months ended March 31, 2011, the company reported net sales of $255.2 million compared to the prior year sales of $240.9 million, an increase of 5.9%. The company reported net income for the current nine-month period of $6.9 million or $1 per share compared to a net income of $6.7 million or $1 per share in the prior year period. The current year nine-month period includes pre-tax charges related to closing a manufacturing facility of approximately $1.0 million for employee separation and other closing costs, and an inventory write-down to cost of goods sold of $0.6 million.
Our balance sheet remains strong reflecting working capital in excess of $97 million and no bank borrowings. We were able to realize gains in residential sales for the current year over the prior year. There are indications that improving job prospects and improving consumer sentiment are having a positive impact on residential sales even though the housing market remains weak. We expect to continue top-line growth of our residential products through fiscal year 2012. Our commercial product sales are up slightly for the current year over the prior year. The commercial office industry continues to report increases in sales over last year. While we have benefited minimally from those increases to date, we believe we will see increased sales volume during fiscal year 2012. Based on low demand for an extended period, we anticipate increased orders for hospitality products during fiscal year 2012 as the economy improves.
The company continues to experience increases in the cost of certain raw materials, such as steel, polyester fiber, fabric and leather, and finished products. We are implementing price increases to help mitigate the impact of the increased material and finished product costs, however, we will continue to experience downward pressure on gross margin until we realize the full benefits of these sell price increases and see an end to the cost increases.
We remain committed to our core strategies, which include a wide range of quality product offerings and price points to the residential and commercial markets, combined with a conservative approach to business. We will maintain our focus on a strong balance sheet through emphasis on cash flow and improving profitability. We believe these core strategies are in the best interest of our shareholders.