Flexsteel Reports Fourth Quarter & Full-Year Fiscal 2024 Results

August 19, 2024  by Karen Parrish in Business Strategy, Industry   

Key Results for the Fourth Quarter and Fiscal Year Ended June 30, 2024

·       Net sales for the quarter increased 4.7% to $110.8 million compared to $105.8 million in the prior year quarter. For the year, net sales increased 4.8% to $412.8 million compared to $393.7 million in the prior year.

·       Robust sales orders of $108.5 million for the fourth quarter representing growth of $15.8 million, or 17.1%, compared to the prior year quarter.

·       Gross margin increased to 21.3% for the fourth quarter and 21.1% for the year compared to 20.0% in the prior year quarter and 18.0% for the prior year.

·       GAAP operating income of $7.6 million or 6.9% of net sales for the fourth quarter and $17.1 million or 4.1% of net sales for the year compared to $4.2 million or 4.0% of net sales in the prior year quarter and $10.5 million or 2.7% of net sales for the prior year.

o   Adjusted operating income of $6.2 million or 5.6% of net sales for the fourth quarter and $18.3 million or 4.4% of net sales for the year compared to $4.2 million or 4.0% of net sales in the prior year quarter and $8.1 million or 2.1% of net sales for the prior year.

·       GAAP net income per diluted share of $0.89 for the current quarter and $1.91 for the year compared to net income per diluted share of $1.91 for the prior year quarter and net income per diluted share of $2.74 for the prior year.

o   Adjusted net income per diluted share of $0.75 for the quarter and $2.11 for the year compared to adjusted net income per diluted share of $0.36 for the prior year quarter and $0.87 for the prior year.

·       Cash flow from operations in the fourth quarter of $7.5 million and $31.9 million for the year.

·       Debt repayments of $23.5 million for the year, or an 83% reduction in borrowings under the line of credit.

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

Management Commentary

“I am extremely pleased with our fourth quarter results,” said Derek Schmidt, President & Chief Executive Officer of Flexsteel Industries, Inc. “Despite continued challenging conditions for our industry, we are executing well and delivered 4.7% sales growth in the quarter which represents our third consecutive quarter of mid- to high-single digit year-over-year growth. Our strategies to gain share in our core markets and pursue new growth in expanded markets are working due to our investments in innovation, new product development, customer experience and marketing.”

Mr. Schmidt continues, “At the same time, we continue to improve our profitability and achieved a third consecutive quarter of sequential quarter-over-quarter adjusted operating margin improvement. Adjusted operating margin was 5.6% in the quarter, up compared to 4.0% in the prior year quarter. The keys to our consistent profit improvement have been our sales growth, strong operational execution, cost savings and product portfolio management, all of which have strong momentum and will continue to be catalysts for continued margin expansion. The organization also continues to manage working capital and cash effectively, generating $7.5 million in operating cash flow and reducing debt by $9.4 million in the quarter.”

Mr. Schmidt concludes, “I’m very encouraged by these fourth quarter results and excited about the direction we are headed. In a period where many industry participants continue to realize meaningful year-over-year declines in both sales and profits, Flexsteel is financially strong, growing sales, improving profitability, generating cash, and aggressively investing for the future. While we expect industry headwinds will likely remain during our fiscal year 2025, our team is hyper-focused on continuing our sales growth and profit improvement momentum despite these challenges. I remain confident in our team and its ability to continue creating significant value for our customers and shareholders in both the near and long-term."

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