Flexsteel 4Q sales fall 12%
By Jay McIntosh -- Furniture Today, September 22, 2008
DUBUQUE, Iowa — Flexsteel Inds. said its residential furniture segment sales in its fiscal fourth quarter ended June 30 were off 6.4% from a year earlier to $66.9 million, while total company sales fell 12% to $100.6 million.
Earnings were $336,047, down from $5.8 million in the fiscal 2007 fourth quarter. But the prior year period had one-time gains from a property sale and insurance proceeds, and excluding those the ’07 earnings would have been $2.8 million or 44 cents per share, the company said.
For the full year, residential furniture sales inched down 0.6% to $258.1 million as total sales declined 4.6% to $405.7 million.
Net income for the year was $4.2 million, the company said, compared with $9.3 million a year earlier. Excluding the one-time gains, the fiscal 2007 earnings would have been $6.1 million or 93 cents per share.
Company officials said the latest fiscal year began well, with sales up in the first two quarters. But in the second half — the first half of this calendar year — business softened.
“Normally, at least one of the markets in which we sell products is doing well,” the company said in a statement. But in the fourth quarter, residential seating sales were off 6%, commercial seating was down 12% and recreational vehicle seating plunged 35%. “We do not believe we are losing market share in those categories,” the company said.
Officials said they see “no near term improvement in operating conditions,” which have been affected not only by the credit crisis and a soft U.S. dollar, but also by higher costs for raw materials and transportation.
In response, the company said it has implemented price increases where possible, moved to close two plants to adjust manufacturing capacity, and focused attention on credit risk. Flexsteel also said it is focusing on offering products and services its customers need, and is focusing on profitability and cash flow over top-line growth to maintain a strong balance sheet.
| Flexsteel Inds. | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/30 | 2008 | 2007 | Change |
| (a) Includes pretax gain on sale of capital assets of $4.0 million in the 2007 quarter and $4.4 million in the 2007 year. |
|||
| Sales | $100,630,109 | $114,289,285 | (12.0%) |
| Operating income | 611,235 | 4,556,293 | (86.6%) |
| Net income (a) | 336,047 | 5,840,602 | (94.2%) |
| Earnings per share | 0.05 | 0.89 | (94.4%) |
| Year ended 6/30 | 2008 | 2007 | Change |
| Sales | $405,654,829 | $425,399,951 | (4.6%) |
| Operating income | 7,595,948 | 10,327,928 | (26.5%) |
| Net income (a) | 4,236,405 | 9,333,987 | (54.6%) |
| Earnings per share | 0.64 | 1.42 | (54.9%) |
