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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) November 14, 2003
(Exact name of registrant as specified in its charter)
Flexsteel Industries, Inc.
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(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
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Item 5. Other Events
On November 14, 2003, Flexsteel Industries, Inc. Announces First Quarter
Operating Results. See the Press Release 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.
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(Registrant)
Date: November 14, 2003 By: /s/ R. J. Klosterman
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R. J. Klosterman
Financial Vice President &
Principal Financial Officer
Exhibit 99.1
Flexsteel Announces First Quarter Operating Results
DUBUQUE, Iowa--(BUSINESS WIRE)--Nov. 14, 2003--Flexsteel
Industries, Inc. (Nasdaq:FLXS) today reported sales and earnings for
its first quarter ended September 30, 2003.
On September 18, 2003, Flexsteel Industries, Inc. acquired DMI
Furniture, Inc. (DMI) in a business combination accounted for as a
purchase. Under the purchase agreement, the common shareholders of DMI
received $16.7 million in cash in exchange for tendering their common
shares to Flexsteel. In addition, Flexsteel incurred acquisition costs
of $2.8 million and assumed liabilities of $35.0 million, including
$25.5 million of long-term debt. The operating results of DMI for the
period September 18 through September 30, 2003 are included in the
reported amounts.
Net sales for the fiscal quarter ended September 30, 2003 were
$76.9 million compared to the prior year quarter of $70.0 million, an
increase of 9.8%. Net income for the current quarter was $1.9 million
or $0.29 per share compared to the prior year quarter of $2.0 million
or $0.32 per share. During the prior year quarter the Company recorded
a net gain (after tax) of $0.2 million or $0.04 per share on the sale
of land. Excluding the gain on sale of land, net income for the prior
year quarter was $1.8 million or $0.28 per share.
During the current quarter, residential sales were $49.4 million
(including $1.7 million from DMI), recreational vehicle seating sales
were $20.4 million, and commercial sales were $7.1 million (including
$1.4 million from DMI), an increase of 7.4%, 3.4% and 65.7%,
respectively, from the prior year quarter.
Gross margin for the quarter ended September 30, 2003 was 21.9%
compared to 21.8% in the prior year quarter. The increase in gross
margin reflects modestly higher production volume.
Selling, general and administrative expenses as a percentage of
net sales were 18.1% in the current and prior year quarters. The $1.3
million increase in selling, general and administrative expenses in
the current year reflect an increase due to volume related selling
expense and slightly higher general and administrative expense.
Working capital at September 30, 2003 was $85.4 million, which
includes cash, cash equivalents and investments of $12.3 million.
Working capital increased by $17.7 million from the June 30, 2003
amount.
Capital expenditures were $1.3 million during the first quarter of
fiscal 2004. The Company expects that capital expenditures will be
approximately $3.0 million during the remainder of the fiscal year.
All earnings per share amounts are on a diluted basis.
The Company will host a conference call Tuesday, November 18,
2003, at 9:00 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 herein. 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, the ability to
successfully integrate DMI into the Company's operations, 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)
September 30, June 30,
2003 2003
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents............$ 10,772,116 $ 12,811,385
Investments.......................... 1,519,229 9,531,913
Trade receivables, net............... 42,437,942 29,612,278
Inventories.......................... 59,180,655 32,473,287
Other................................ 10,021,103 5,393,426
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Total current assets...................... 123,931,045 89,822,289
PROPERTY, PLANT, AND EQUIPMENT, net....... 29,770,467 20,377,797
OTHER ASSETS.............................. 11,149,705 10,500,196
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TOTAL.....................................$ 164,851,217 $120,700,282
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade...............$ 8,535,408 $ 2,747,226
Current portion of long-term debt...... 1,009,500
Accrued liabilities.................... 29,007,761 19,409,504
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Total current liabilities................. 38,552,669 22,156,730
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LONG-TERM LIABILITIES:
Long-term debt, less current portion... 24,508,241
Other long-term liabilities............ 6,430,456 4,790,225
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Total long-term liabilities............... 30,938,697 4,790,225
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Total liabilities......................... 69,491,366 26,946,955
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SHAREHOLDERS' EQUITY...................... 95,359,851 93,753,327
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TOTAL.....................................$ 164,851,217 $120,700,282
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
September 30,
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2003 2002
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NET SALES.................................$ 76,857,039 $ 70,019,376
COST OF GOODS SOLD........................ (60,006,842) (54,726,815)
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GROSS MARGIN.............................. 16,850,197 15,292,561
SELLING, GENERAL AND ADMINISTRATIVE....... (13,958,079) (12,677,317)
GAIN ON SALE OF LAND...................... 403,065
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OPERATING INCOME.......................... 2,892,118 3,018,309
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OTHER:
Interest and other income............ 222,117 315,339
Interest expense..................... (44,319) (2,788)
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Total........................... 177,798 312,551
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INCOME BEFORE INCOME TAXES................ 3,069,916 3,330,860
PROVISION FOR INCOME TAXES................ (1,205,000) (1,300,000)
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NET INCOME................................$ 1,864,916 $ 2,030,860
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AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING:
BASIC.............................. 6,336,434 6,212,912
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DILUTED............................ 6,431,189 6,323,010
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EARNINGS PER SHARE OF COMMON
STOCK:
BASIC.............................$ 0.29 $ 0.33
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DILUTED...........................$ 0.29 $ 0.32
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CONTACT: Flexsteel Industries, Inc., Dubuque
Timothy E. Hall, Treasurer, 563-556-7734 x392