Furniture supplier Flexsteel Industries Inc. today (Oct. 16) reported the “strongest first quarter” in the company’s history, buoyed by a 14% increase in sales.
During the fiscal first, ended Sept. 30, sales totaled $104.3 million as esidential sales increased approximately 16% to $84 million and commercial sales increased 8% to $20.3 million. Net income for the first fiscal quarter was $3.8 million, or 51 cents per share, compared to $2.9 million or 40 cents per share, for the prior year quarter.
Gross margin as a percent of net sales for the quarter was 22.7% compared to 23.1% for the prior year quarter. The decrease of 0.4% is primarily due to changes in product mix and price discounting on certain traditional case goods to improve operating efficiency. The discounting may continue for the remainder of the fiscal year as the company realigns inventory to focus on growth opportunities.
Selling, general and administrative (SG&A) expenses as a percent of net sales for the current quarter improved to 17.5% from 18.3% in the prior year quarter. The percentage decrease reflects fixed cost leverage on higher sales volume offset by increased legal costs of $0.4 million related to an Indiana civil lawsuit. In addition, the prior year quarter included approximately $0.5 million of executive transition costs.
Working capital (current assets less current liabilities) at Sept. 30 was $117.2 million compared to $113.7 million at June 30, 2013. Cash decreased by $0.3 million during the first fiscal quarter of 2014 with net cash provided by operating activities of $1.2 million, capital expenditures of $0.7 million and payment of dividends of $1.1 million.
The company expects that capital expenditures for the remainder of fiscal year 2014 will be approximately $3.5 million, primarily for delivery and manufacturing equipment and information technology infrastructure.
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Dubuque, Iowa-based Flexsteel Industries Inc. reported lower earnings on an increase in sales for its fiscal fourth quarter, ended June 30, while net income for the full year was the highest in the company’s history.
Sales during the quarter were $102 million, a 9% increase from $94 million the year prior while net income was $4.2 million, or 57 cents per diluted share, compared to $4.4 million, or 61 cents per share. Residential sales rose 10% to $82 million and commercial sales totaled $20 million compared to $19 million in the prior year quarter.
Sales for the full year increased 10% to $386 million compared to $352 million in the prior fiscal year. Net income rose to $13.2 million, or $1.80 per diluted share, from $13.1 million, or $1.86 per share. The current year includes executive transition costs of $1.3 million.
Residential sales grew 13% to $311 million in the current fiscal year from $275 million a year ago. Commercial sales were $75 million compared to $77 million in the prior fiscal year.
Gross margin for the fiscal year ended June 30, 2013 was 23.4% compared to 24.2% for the prior fiscal year. During fiscal year 2013, the company’s expenses related to workers compensation and health insurance programs were approximately $1.5 million or 0.4% of net sales higher than fiscal 2012. Gross margin for the quarter ended was 23.3% compared to 25.3% in the prior year quarter. For the quarter the gross margin percentage change is primarily due to changes in product and customer mix, and increased workers compensation insurance expenses.
Working capital (current assets less current liabilities) at June 30 was $113.7 million compared to $103.7 million at June 30, 2012. Significant changes in working capital from June 30, 2012 to June 30, 2013 included increases in inventories of $9.7 million, other current assets of $4.4 million and accounts receivable of $2.5 million.
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Following 30 years of service in various leadership roles, Patrick M. Crahan, senior vice president of Flexsteel Industries Inc., has announced his retirement from the company, effective June 30. According to a press release, he will continue to serve on the company’s board following his retirement.
Crahan began his career with Flexsteel as a corporate accounting manager. He was promoted to general manager, then named a vice president in 1989, and promoted to senior vice president in 2005. He was elected to the board in 1997. Prior to joining Flexsteel, he was a partner at Frank Mooney CPA and vice president, finance at California Natural Foods, both based in California.
“Flexsteel has been fortunate to have an executive with Pat’s wealth of experience,” said Karel Czanderna, president and CEO. “Pat has been involved in every aspect of Flexsteel’s operations, including manufacturing, management and finance. He has been instrumental in implementing and leading Flexsteel’s corporate environmental compliance program. He is respected within the company, the furniture industry and the Dubuque community. We wish Pat the very best in his retirement.”
“On behalf of the entire board, I thank Pat for his many contributions to Flexsteel,” said Chairman Lynn Davis. “We were fortunate to have his guidance and direction at the core of our organization for the past 30 years, and are pleased that Pat will remain actively involved in the company by continuing as a board member.”
Flexsteel Industries Inc. today reported an increase in sales for its fiscal third quarter, ended March 31, on a slight drop in earnings.
The Dubuque, Iowa-based furniture maker said net income fell to $3.1 million, or 42 cents per share, during the quarter compared to $3.3 million, or 48 cents per share the previous year. Sales totaled $98.4 million, a 7.3% increase over prior year quarter net sales of $91.6 million. Residential net sales were $79.9 million in the current quarter, an increase of 12.3% from the prior year quarter of $71.2 million reflecting an improved demand for upholstered products. Commercial net sales were $18.4 million in the current year quarter compared to $20.4 million in the prior year quarter, a decrease of 9.9%.
Gross margin for the quarter ended March 31, 2013 was 23.2% compared to 24.1% in the prior year quarter. The percentage change in gross margin is primarily due to changes in product and customer mix, and to a lesser extent freight, raw material and finished product cost increases. The company adjusts its selling prices to reflect market conditions and cost changes. For the nine months ended March 31, 2013, the gross margin was 23.5% compared to 23.8% for the prior year nine month period.
For the nine months, the company reported net income of $8.9 million, or $1.22 per share, versus $8.7 million, or $1.24 per share, a year ago. Sales for the period were $284.2 million, a 10.1% increase compared to the prior year. Residential net sales were $228.9 million in the current nine-month period, an increase of 14% from the prior year of $200.7 million. Commercial net sales were $55.3 million in the compared to $57.5 million in the prior year nine month period.
Dubuque, Iowa-based furniture supplier Flexsteel Industries Inc. reported an 11% increase in revenue for its fiscal second quarter, ended Dec. 31.
Second-quarter sales totaled $94.6 million compared with $85 million in the prior year quarter. Residential sales were $76.6 million, an increase of 14% from the prior year quarter of $67 million. Commercial net sales were approximately $18 million in the current and prior year quarters.
The company reported net income of $2.9 million, or 40 cents per share, for the quarter compared to $2.9 million, or 42 cents per share, for the prior year quarter.
For the six months, sales totaled $185.8 million, a 12% increase from the same period a year ago. Residential net sales were $148.9 million, an increase of 15% from the prior year six-month period of $129.5 million. Commercial net sales were approximately $37.0 million in the current and prior year six month periods.
The company reported record net income of $5.8 million, or 80 cents per share, for the six months compared to $5.3 million, or 76 cents per share, for the prior six-month period.
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Furniture supplier Flexsteel Industries Inc. reported gains in sales and income for the company’s fiscal first quarter, ended Sept. 30.
Sales during the period totaled $91.2 million, representing a 12% increase compared to the prior year first quarter. Residential sales were $72.3 million, an increase of 16% from $62.5 million the previous year, while commercial sales were flat at approximately $19 million.
The Dubuque, Iowa-based company reported record first-quarter net income of $2.9 million, or 40 cents per share, compared to $2.4 million, or 34 cents per share, for the prior year.
Working capital at Sept. 30 was $102.8 million compared to $103.7 million at June 30. Changes in working capital from June 30 to Sept. 30 include a reduction in cash of $7.4 million offset by increases in inventory of $2.9 million and accounts receivable of $2.2 million, and a reduction in current liabilities of $0.9 million. The higher inventory levels support the increases in residential sales volume and expanded product offerings. The accounts receivable increase is primarily due to the timing of collections.
Cash decreased by $7.4 million during the first fiscal quarter of 2013 with net cash used in operating activities of $3.5 million, capital expenditures of $3.0 million and payment of dividends of $1.0 million. The company expects that capital expenditures will be approximately $3.0 million for the remainder of fiscal year 2013.
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Furniture supplier Flexsteel Industries Inc. today (Aug. 15) reported record net income for its fourth quarter and fiscal year, ended June 30.
The Dubuque, Iowa-based company posted net income of $13.1 million, or $1.86 per share, compared to net income of $10.4 million, or $1.50 per share, in the prior year. Net income for the quarter was $4.4 million, or $0.61 per share, compared to $3.5 million, or $0.50 per share, in the prior year quarter.
Net sales for the fiscal year were $352.1 million compared to $339.4 million in the prior fiscal year, an increase of 4%. Net sales for the quarter increased 12% to $93.9 million compared to the prior year quarter of $84.2 million.
The company said that earnings for the fiscal year improved due to better absorption of fixed costs on the higher sales volume, lower freight costs and a decrease in bad debt expense which were offset by higher legal and professional fees of $2.1 million, primarily related to an Indiana civil lawsuit. The prior year included facility closing costs of $1 million and a $0.6 million inventory write-down related to the facility closing. Net income for the fourth fiscal quarter improved due to better absorption of fixed costs from the increased sales volume.
For the fiscal year, residential sales were $275.4 million compared to $258.1 million for the previous year, an increase of 7%. Commercial sales were $76.7 million for the year, a decrease of 6% from $81.3 million the year prior. For the quarter, residential net sales increased 16% to $74.8 million compared to the prior year quarter of $64.4 million. Commercial net sales were $19.1 million for the quarter compared to $19.8 million in the prior year quarter.
Looking forward, Flexsteel believes that moderate overall top line growth will continue through the end of calendar year 2012 through additions to product offerings and expanding our residential customer base. The company is expecting current order trends for commercial products to continue for the remainder of the calendar year.
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Flexsteel Industries Inc. announced Monday (July 2) that Karel K. Czanderna has been named the company’s president and CEO. Czanderna, an established leader in the durable goods space, is a veteran of Owens Corning and Whirlpool Corporation and succeeds Ronald J. Klosterman in the role, according to a news release.
Czanderna’s appointment became effective July 1. Klosterman, who has been with Flexsteel for nearly 40 years, will maintain his board seat.
“For more than a century, Flexsteel’s employees, investors and customers have benefited from exceptional executive leadership,” said Flexsteel Chairman Lynn J. Davis. “That proud tradition will continue with Karel serving as our seventh corporate president. Having earned critical operational expertise through years of building world-class brands, Karel is uniquely equipped to enhance growth opportunities in our various business lines while maintaining the culture that has served as the company’s foundation since its inception.”
“It is an honor to join an organization that since 1893 has built a reputation for unwavering commitment to product and service excellence,” said Czanderna. “I look forward to preserving that storied heritage as we continue to expand on Flexsteel’s many industry-leading innovations to create additional value for our customers and investors.”
Czanderna, who holds a Ph.D. in materials science and engineering from Cornell University and completed an executive education program at Harvard Business School, served most recently as group president of building materials for Owens Corning. In that role, she was responsible for a $3.3 billion global business that comprised two-thirds of the Fortune 500 company’s revenue. She led 7,500 employees located in more than 65 global plants as well as an integrated supply chain organization and sales and marketing staff. Among her many achievements at Owens Corning, Czanderna is credited with doubling the profitability of the building materials business during an economic downturn.
Prior to Owens Corning, Czanderna held multiple executive positions at Whirlpool Corp., including as vice president and general manager of global KitchenAid and Jenn-Air appliance businesses. In that role, she held responsibility for a $1.8 billion business.
Czanderna, who earned her BS at Clarkson University and a master’s from Cornell, was recruited by Eastman Kodak upon completion of her studies. She served the company in multiple capacities, ultimately being promoted to senior leadership positions overseeing $500 million in business activity and more than 5,500 employees.
“Senior officers and the board of directors are confident that Karel will value Flexsteel’s heritage and be an exceptional leader,” said James R. Richardson, Flexsteel director and senior vice president of sales and marketing.
Members of the Flexsteel board retained CTPartners Executive Search Inc. to assist in identifying and evaluating potential candidates.
About Flexsteel Industries
Flexsteel Industries Inc. is headquartered in Dubuque, Iowa, and is a designer, manufacturer, importer and marketer of quality upholstered and wood furniture for residential, recreational vehicle, office, hospitality and healthcare markets.
Two key RV suppliers, Patrick Industries Inc. and Flexsteel Industries Inc., have been added to the U.S. broad-market Russell 3000 Index.
According to a press release, Russell indexes are widely used by investment managers and institutional investors worldwide for index funds and as benchmarks for both passive and active investment strategies. An industry leading $3.9 trillion in institutional assets are currently benchmarked to them.
Todd Cleveland, president and CEO of Elkhart, Ind.-based Patrick, said the company was honored to have joined the Index. “The Russell designation represents a significant milestone in Patrick’s 53 year history that will bring additional visibility to our company and our strategic initiatives as we strive to continue to create long-term value for our shareholders,” he stated.
Ronald J. Klosterman, president and CEO of Dubuque, Iowa-based Flexsteel, noted, “Many investors and institutions rely on the Russell 3000 Index as part of their investment strategy. Flexsteel’s inclusion acknowledges our strong business fundamentals and potential for future growth.”
A leader at Flexsteel Industries Inc. in Dubuque, Iowa, said this overall downturn in the RV industry is lasting longer than expected, according to a report by Dubuque Telegraph Herald.
“We thought we would have seen a greater turnaround by this time than what we have,” said Ron Klosterman, president and CEO of Flexsteel, in a conference call with investors following the release of a company earnings report last month.
The Dubuque-based furniture maker makes RV materials, along with other commercial and residential products. The company’s sales of RV materials have faltered in recent years, in 2009 falling a staggering 71% compared to 2008. Some improvement was evident by 2010, when Flexsteel’s vehicle seating sales were up, although the commercial sales category as a whole dropped 14% in year-to-year comparisons.
In the most recent quarter, Flexsteel reported a 32% increase in net income, a company record. Income rose from $2.5 million in the third quarter of last year to $3.3 million. That rise was largely driven by residential net sales; commercial sales were relatively flat.
Although the recreational vehicle industry has historically seen some substantial dips in volume, the business typically bounces back with “pretty good strength,” according to Klosterman.
“This is a little bit different than what has happened in the past. We are having a harder time seeing when that jump in volume might happen,” he said.
Klosterman said the industry’s original equipment manufacturers aren’t producing as much as the Dubuque firm would like to see and the industry’s trade organization is projecting growth in the low single digits for the balance of calendar 2012.
“Even their optimism is pretty temperate,” Klosterman said.
But at Couler Valley RV in Dubuque, last month was a record breaker. “We had a great, absolutely fabulous April. We grossed the most we’ve ever grossed in 24 years,” said Doug Gauer, who owns Couler Valley.
The business recently hired two new employees, which Gauer said were the first hires in about seven years. He attributed the strong month in part to the unseasonably warm spring weather.
“Good weather does spark a lot of enthusiasm for going camping,” Gauer said.
Similarly, in recent weeks business has slowed slightly as the weather has cooled.
But Gauer said other factors have contributed to Couler Valley’s perseverance, like a long-standing history of service in the community and the status of the overall Dubuque economy.
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