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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) April 15, 2003
(Exact name of registrant as specified in its charter)
Flexsteel Industries, Inc.
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
Minnesota 0-5151 42-0442319
Registrant's telephone number, including area code 563-556-7730
Item 5. Other Events
On April 15, 2003, Flexsteel Industries, Inc. Announces Third Quarter
and Year-to-Date Operating Results. See Exhibit A attached hereto and
incorporated herein for further information.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Flexsteel Industries, Inc.
--------------------------
(Registrant)
Date: April 15, 2003 By: /s/ R.J. Klosterman
--------------------
R.J. Klosterman
Financial Vice President &
Principal Financial Officer
Exhibit 99
Flexsteel Announces Third Quarter and Year-to-Date Operating Results
DUBUQUE, Iowa--(BUSINESS WIRE)--April 15, 2003--Flexsteel
Industries, Inc. (Nasdaq:FLXS) today reported sales and earnings for
its third quarter ended March 31, 2003.
Net sales for the fiscal quarter ended March 31, 2003 were $73.5
million compared to the prior year quarter of $73.7 million. Net
income for the current quarter was $1.4 million or $0.22 per share
compared to the prior year quarter of $2.0 million or $0.33 per share.
Net sales for the nine months ended March 31, 2003 were $217.1
million compared to $202.8 million in the prior year nine months, an
increase of 7%. Net income for the nine months ended March 31, 2003 of
$5.7 million or $0.89 per share increased from net income for the nine
months ended March 31, 2002 of $2.9 million or $0.48 per share.
During the current quarter, residential seating sales were $49.0
million, a decrease of 6% from the prior year quarter. Recreational
vehicle seating sales were $19.2 million, an increase of 8%.
Commercial seating sales were $5.3 million, an increase of 38%.
For the nine months ended March 31, 2003, residential seating
sales were $145.5 million, an increase of 3% over the nine months
ended March 31, 2002. Recreational vehicle seating sales were $56.7
million, an increase of 18%. Commercial seating sales were $14.8
million, an increase of 13%.
Gross margin for the quarter ended March 31, 2003 was 21.0%
compared to 22.4% in the prior year quarter. The lower gross margin in
the current quarter resulted from raw material price increases,
changes in product mix, higher delivery expenses related to higher
fuel costs, and weather related expenses. The weather conditions
resulted in increased utility costs, manufacturing interruptions at
our eastern Pennsylvania location and product delivery inefficiencies
in the eastern third of the country during February and early March.
For the nine months ended March 31, 2003, the gross margin was
22.2% compared to 21.0% for the nine months ended March 31, 2002. The
gross margin improvement was due to higher production volume and
improved fixed cost absorption in the first six months offset by the
third quarter issues described above. In addition, the prior year
gross margin was reduced by a charge of $0.9 million for facility
closing costs.
Selling, general and administrative expenses as a percentage of
sales were 17.9% and 18.3% for the current quarter and prior year
quarter, respectively. For the nine months ended March 31, 2003 and
2002, selling, general and administrative expenses as a percentage of
net sales were 18.4% and 19.0%, respectively. The lower year to date
percentage primarily represents improved absorption of fixed costs on
higher net sales.
During the third quarter of fiscal 2003, the Company settled
federal income tax audits for its latest three fiscal years. The
Company has recorded additional income tax expense and interest
expense of $0.1 million each that resulted from the audits.
Working capital at March 31, 2003 was $65.8 million, which
includes cash, cash equivalents and investments of $24.5 million.
Working capital increased by $3.6 million from June 30, 2002.
Capital expenditures were $4.0 million during the first nine
months of fiscal 2003 and $0.5 million in first nine months of fiscal
2002. The Company expects that capital expenditures will be
approximately $1.0 million over the remaining three months of fiscal
2003.
All earnings per share amounts are on a diluted basis.
The Company will host a conference call Wednesday, April 16, 2003,
at 10:00 a.m. Central Time. The dial-in-number is 800-556-3831 with an
access code of 00566. A replay will be available for two weeks
beginning approximately four hours after the conclusion of the call.
The dial-in-number for the replay is 888-813-1488 and no access code
is required.
For more information, visit our web site at
http://www.flexsteel.com.
Statements, including those in this release, which are not
historical or current facts are "forward-looking statements" made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. There are certain important factors
that could cause results to differ materially from those anticipated
by some of the statements made here-in. Investors are cautioned that
all forward-looking statements involve risk and uncertainty. Some of
the factors that could affect results are the cyclical nature of the
furniture industry, the effectiveness of new product introductions,
the product mix of our sales, the cost of raw materials, the amount of
sales generated and the profit margins thereon, competition, both
foreign and domestic, credit exposure to our customers, and general
economic conditions. Any forward-looking statement speaks only as of
the date of this press release. The Company specifically declines to
undertake any obligation to publicly revise any forward-looking
statements that have been made to reflect events or circumstances
after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.
FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, June 30,
2003 2002
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............$ 12,314,378 $ 5,375,683
Investments.......................... 12,205,220 15,876,088
Trade receivables, net............... 28,871,491 31,361,285
Inventories.......................... 31,379,961 30,322,288
Other................................ 6,610,753 5,816,136
------------ ------------
Total current assets....................... 91,381,803 88,751,480
PROPERTY, PLANT, AND EQUIPMENT, net........ 20,724,881 20,558,338
OTHER ASSETS............................... 9,691,071 9,439,940
------------ ------------
TOTAL......................................$121,797,755 $118,749,758
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES........................$ 25,561,037 $ 26,523,407
DEFERRED COMPENSATION...................... 4,723,075 4,509,782
------------ ------------
Total liabilities.......................... 30,284,112 31,033,189
SHAREHOLDERS' EQUITY....................... 91,513,643 87,716,569
------------ ------------
TOTAL......................................$121,797,755 $118,749,758
============ ============
FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------------- ----------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
NET SALES...$ 73,461,304 $ 73,742,322 $ 217,060,741 $ 202,776,664
COST OF
GOODS SOLD. (58,007,914) (57,212,434) (168,949,503) (160,259,481)
------------- ------------- ------------- -------------
GROSS MARGIN 15,453,390 16,529,888 48,111,238 42,517,183
SELLING,
GENERAL AND
ADMINI-
STRATIVE... (13,182,685) (13,504,961) (39,867,515) (38,513,767)
GAIN ON SALE
OF LAND.... 403,065
------------- ------------- ------------- -------------
OPERATING
INCOME..... 2,270,705 3,024,927 8,646,788 4,003,416
------------- ------------- ------------- -------------
OTHER:
Interest
and
other
income.. 265,467 264,382 872,535 747,837
Interest
expense. (95,187) (4,491) (101,235) (18,784)
------------- ------------- ------------- -------------
Total.. 170,280 259,891 771,300 729,053
------------- ------------- ------------- -------------
INCOME
BEFORE
INCOME
TAXES...... 2,440,985 3,284,818 9,418,088 4,732,469
PROVISION
FOR INCOME
TAXES...... (1,020,000) (1,270,000) (3,750,000) (1,810,000)
------------- ------------- ------------- -------------
NET INCOME..$ 1,420,985 $ 2,014,818 $ 5,668,088 $ 2,922,469
============= ============= ============= =============
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
BASIC.... 6,275,729 6,077,766 6,245,384 6,069,493
============= ============= ============= =============
DILUTED.. 6,394,339 6,151,621 6,358,686 6,128,240
============= ============= ============= =============
EARNINGS PER SHARE OF COMMON
STOCK:
BASIC.... $ 0.23 $ 0.33 $ 0.91 $ 0.48
============= ============= ============= =============
DILUTED.. $ 0.22 $ 0.33 $ 0.89 $ 0.48
============= ============= ============= =============
CONTACT: Flexsteel Industries, Inc., Dubuque
Timothy E. Hall, 563/556-7730 x392