Flexsteel Industries Reports 3rd Quarter Fiscal Financial Results

May 2, 2023  by HFBusiness Staff in Business Strategy, Industry   

Key Results from the Third Quarter Ended March 31:

~  Net sales for the quarter decreased 29.5% to $99.1 million compared to $140.4 million in the prior-year quarter.

~  Gross margin increased to 18.8% for the quarter compared to 15.7% in the prior-year quarter.

~  GAAP operating income of $2.1 million for the quarter compared to $5.8 million in the prior-year quarter.

~  GAAP net income per diluted share of $0.28 for the current quarter compared to net income of $0.82 in the prior-year quarter.

~  Cash flow from operations of $30.5 million for the nine months ended.

~  Debt repayments of $20.0 million for the nine months ended.

GAAP to non-GAAP reconciliations follow the financial statements in this press release.

President, and CEO of Flexsteel Industries, Inc. Jerry Dittmer said, “I am pleased with our third quarter results and the progress the organization has made, especially as we consider the many consumer and macroeconomic headwinds we continue to face.”

“Despite the market challenges, we delivered net sales for the third quarter of $99.1 million, representing sequential quarter-over-quarter growth of 6.4% compared to the second quarter. Our growth initiatives are working and gaining momentum, and we anticipate continuing that drive to deliver even higher sales in the fourth quarter compared to the third quarter results.”

“At the same time, we are improving profitability and generating solid free cash flow. Our operating income of $2.1 million, or 2.1% of revenue, was in the upper range of our guidance of 1.0% to 2.5%. As planned, we are working through higher-cost inventories and realizing the benefits of cost-saving initiatives to drive margin accretion.”

Dittmer continued, “Similar to our sales outlook, we expect profitability to sequentially improve in the fourth quarter compared to the third quarter, bolstered by the traction of our growth initiatives which have an attractive margin profile. I’m very excited about the trajectory of our business.”

“We’ve been transforming the Company for several years. As a result, we are well-positioned to grow profitably for the remainder of fiscal year 2023 and into fiscal year 2024 despite the macroeconomic hurdles that are likely to dampen overall demand for furniture.”

“We are competing well, and our customers validated this view during last week’s April High Point market. The energy in our showroom and positive customer feedback was outstanding. We continue to modernize the Flexsteel brand by introducing new, on-trend products and covers at more competitive price points while maintaining the differentiated comfort and quality that defines the brand.”

“We also expanded the product offering of our new Charisma brand, targeting the style and price preferences of younger consumers. In addition, we successfully launched our new Zecliner™, sleep solutions recliner, in March. We expanded the line recently and have more innovation planned for release at next October’s market. Lastly, flex™, our small parcel, contemporary modular furniture solution, was launched in the Big Box channel this month and will be extended to multiple, e-commerce partners in the fourth quarter.”

Mr. Dittmer concluded, “The future is exciting for Flexsteel. We’re investing, innovating, and transforming to strengthen our market leadership and drive long-term profitable growth. Our associates have conviction in our strategy and are deeply committed to executing our growth plans.”