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Flexsteel 4Q sales slip 1.6%

Gary Evans -- Furniture Today, August 29, 2011

DUBUQUE, Iowa — Flexsteel Inds. said its overall sales for the year ended June 30 were up 4% over the previous year but down 1.6% for the fiscal fourth quarter, a trend also reflected in its residential furniture sales.

Sales for all divisions were $339.4 million for the year ended June 30, up from the previous year's $326.5 million. Sales for the quarter were $84.2 million compared with $85.6 million in the same period a year earlier.

Residential sales showed an annual gain of 4.9%, to $258.1 million from the previous year's $246 million, but were down 2% for the quarter, to $64.4 million compared with the previous year's $65.7 million.

Net income for the year was $10.4 million or $1.50 per share, compared with $10.8 million or $1.61 per share the previous year.

The current year includes pre-tax charges of $1.6 million related to closing a manufacturing facility. Employee separation and other closing costs of $1 million were reported as facility closing costs and an inventory write-down of $600,000 was charged to costs of goods sold.

Net income for the quarter ended June 30 was $3.5 million or 50 cents per share compared with net income of $4.1 million or 61 cents per share in the 2010 quarter.

Gross margin for the year was 22.8%, with the inventory write-down related to the facility closing offset by operational improvements.

Gross margin for the quarter was 24.5% compared with 23.6% in the prior year's quarter. Gross margin improvements for the quarter were due to operational improvements and changes in product mix, the company said.

Flexsteel said it had modest gains in sales for the current year over the last year partially due to a strong backlog entering the year. It said it enters fiscal 2012 with lower backlogs and anticipates that first quarter sales will be lower than first quarter 2011.

The company said high unemployment, minimal job growth, a weak housing market and low levels of consumer confidence continue to affect business.

But the commercial office industry is reporting improving order trends, as is the hospitality industry, which the company said should contribute to an increase in sales volume for the coming year.

Flexsteel Inds.
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
Quarter ended 6/30	2011	2010	Change
Sales	$84,200,000	$85,550,000	(1.6%)
Operating income	5,209,000	6,424,000	(18.9%)
Net income	3,488,000	4,137,000	(15.7%)
Earnings per share	0.50	0.61	(18.0%)
Year ended 6/30	2011	2010	Change
Sales	$339,426,000	$326,466,000	4.0%
Operating income	16,880,000	17,529,000	(3.7%)
Net income (a)	10,417,000	10,801,000	(3.6%)
Earnings per share	1.50	1.61	(6.8%)
(a) Includes facility closing costs of $1.6 million in the 2011 year.

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Flexsteel sales down 1.6% in quarter but up 4% in fiscal year

Aug 17, 2011

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