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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) October 18, 2007
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FLEXSTEEL INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-5151 42-0442319
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3400 Jackson Street, Dubuque, Iowa 52001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 563-556-7730
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On October 18, 2007, Flexsteel Industries, Inc. Announced First Quarter Fiscal
2008 Operating Results. A copy of the Press Release is being furnished to the
Securities and Exchange Commission and is attached as Exhibit 99.1 to this Form
8-K.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 - Press Release by Flexsteel Industries, Inc. on
October 18, 2007.
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: October 19, 2007 By: /s/ Timothy E. Hall
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Timothy E. Hall
Vice President-Finance, CFO, and Secretary
Principal Financial Officer
Exhibit 99.1
Flexsteel Announces First Quarter Fiscal 2008 Operating Results
DUBUQUE, Iowa--(BUSINESS WIRE)--Oct. 18, 2007--Flexsteel
Industries, Inc. (NASDAQ:FLXS) today reported sales and earnings for
its first fiscal quarter ended September 30, 2007.
The Company reported net sales for the quarter ended September 30,
2007 of $100.9 million, comparable to the prior year quarter of $101.3
million. Net income for the current quarter was $1.2 million or $0.18
per share compared to $0.6 million or $0.09 per share in the prior
year quarter.
For the quarter ended September 30, 2007, residential net sales
were $62.7 million, an increase of 2% from the prior year quarter net
sales of $61.8 million. Recreational vehicle net sales were $15.7
million, a decrease of 1% from the prior year quarter net sales of
$15.9 million. Commercial net sales were $22.5 million compared to
$23.6 million in the prior year quarter, a decrease of 5%. The
decrease in commercial net sales is primarily due to a slowdown of
orders for our hospitality products.
Gross margin for the quarter ended September 30, 2007 was 19.6%
compared to 18.2% in the prior year quarter. The gross margin
improvement is primarily due to the impact of changes in product mix
and increased cost control.
Selling, general and administrative expenses increased by
approximately $0.3 million in comparison to the prior year quarter,
representing 17.4% and 17.1% of net sales for the quarters ended
September 30, 2007 and 2006, respectively.
Working capital (current assets less current liabilities) at
September 30, 2007 was $100.9 million. Net cash used in operating
activities was $0.9 million at September 30, 2007. Net cash provided
by operating activities was $4.9 million at September 30, 2006.
Capital expenditures were $0.4 million for the quarter ended
September 30, 2007. Depreciation and amortization expense was $1.2
million and $ 1.4 million for the fiscal quarters ended September 30,
2007 and 2006, respectively. The Company expects that capital
expenditures will be approximately $2.5 million for the remainder of
the 2008 fiscal year.
All earnings per share amounts are on a diluted basis.
Outlook
Although industry-wide trends indicate a soft market environment
for residential products, orders for the Company's residential
products have remained constant throughout the first fiscal quarter.
The Company expects order levels to remain comparable to the prior
year levels throughout fiscal year 2008. However, further
industry-wide declines could result in lower order levels for the
Company. Orders for recreational vehicle products continue to be down,
and we expect this to continue through our third fiscal quarter ending
March 31, 2008, at which time we will be able to better evaluate the
spring and summer selling season. Our orders for products into
commercial hospitality applications slowed significantly in the first
quarter of the 2008 fiscal year as compared to the relatively high
levels experienced in the first quarter of fiscal year 2007, and we
expect orders to be lower than the prior year period into the second
half of fiscal year 2008. The Company anticipates continued modest
increases in commercial office orders and shipments through the
balance of fiscal year 2008.
The Company continues to explore cost control opportunities in all
facets of its business. The Company believes it has the necessary
inventories, product offerings and marketing strategies in place to
take advantage of opportunities for expansion of market share in
certain markets, such as commercial office and hospitality. The
Company anticipates continuing its strategy of providing furniture
from a wide selection of domestically manufactured and imported
product lines.
Analysts Conference Call
We will host a conference call for analysts on October 19, 2007,
at 10:30 a.m. Central Time. To access the call, please dial
1-888-275-4480 and provide the operator with ID# 15994149. A replay
will be available for two weeks beginning approximately two hours
after the conclusion of the call by dialing 1-800-642-1687 and
entering ID# 15994149.
Forward-Looking Statements
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 our results to differ materially from those
anticipated by some of the statements made in this press release.
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 and distribution channels, the product
mix of sales, pricing pressures, the cost of raw materials and fuel,
foreign currency valuations, actions by governments including taxes
and tariffs, the amount of sales generated and the profit margins
thereon, competition (both foreign and domestic), changes in interest
rates, credit exposure with customers and general economic conditions.
Any forward-looking statement speaks only as of the date of this press
release. We specifically decline 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.
About Flexsteel
Flexsteel Industries, Inc. is headquartered in Dubuque, Iowa, and
was incorporated in 1929. Flexsteel is a designer, manufacturer,
importer and marketer of quality upholstered and wood furniture for
residential, recreational vehicle, office, hospitality and healthcare
markets. All products are distributed nationally.
For more information, visit our web site at
http://www.flexsteel.com.
FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
September 30, June 30,
2007 2007
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents............ $ 1,323,593 $ 900,326
Investments.......................... 983,596 976,180
Trade receivables, net............... 47,556,543 56,273,874
Inventories.......................... 87,042,281 78,756,985
Other................................ 5,585,304 5,609,045
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Total current assets.................... 142,491,317 142,516,410
NONCURRENT ASSETS:
Property, plant, and equipment, net.. 27,346,998 28,168,244
Other assets......................... 13,452,842 13,479,528
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TOTAL................................... $ 183,291,157 $ 184,164,182
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade............... $ 11,904,487 $ 13,607,485
Notes payable and current maturities of
long-term debt........................ 9,400,960 7,030,059
Accrued liabilities.................... 20,311,956 22,540,063
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Total current liabilities............... 41,617,403 43,177,607
LONG-TERM LIABILITIES:
Long-term debt......................... 21,207,358 21,336,352
Other long-term liabilities............ 6,131,610 5,535,113
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Total liabilities....................... 68,956,371 70,049,072
SHAREHOLDERS' EQUITY.................... 114,334,786 114,115,110
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TOTAL................................... $ 183,291,157 $ 184,164,182
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
September 30,
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2007 2006
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NET SALES................................. $100,900,363 $101,339,556
COST OF GOODS SOLD........................ (81,136,820) (82,934,329)
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GROSS MARGIN.............................. 19,763,543 18,405,227
SELLING, GENERAL AND ADMINISTRATIVE....... (17,563,085) (17,280,977)
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OPERATING INCOME.......................... 2,200,458 1,124,250
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OTHER INCOME (EXPENSE):
Interest and other income............ 99,582 157,720
Interest expense..................... (427,390) (388,845)
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Total........................... (327,808) (231,125)
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INCOME BEFORE INCOME TAXES................ 1,872,650 893,125
PROVISION FOR INCOME TAXES................ (690,000) (330,000)
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NET INCOME................................ $ 1,182,650 $ 563,125
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AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:
Basic.............................. 6,571,171 6,565,028
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Diluted............................ 6,604,220 6,570,874
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EARNINGS PER SHARE OF COMMON STOCK:
Basic.............................. $ 0.18 $ 0.09
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Diluted............................ $ 0.18 $ 0.09
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FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
September 30,
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2007 2006
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OPERATING ACTIVITIES:
Net income.................................. $ 1,182,650 $ 563,125
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:................................
Depreciation and amortization........... 1,233,551 1,364,335
Gain on disposition of capital assets... (26,497) (5,782)
Changes in operating assets and
liabilities............................ (3,307,269) 2,965,512
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Net cash (used in) provided by operating
activities................................. (917,565) 4,887,190
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INVESTING ACTIVITIES:
Net sales of investments................ 314,086 11,187
Proceeds from sale of capital assets.... 39,097 6,700
Capital expenditures.................... (410,304) (572,944)
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Net cash used in investing activities....... (57,121) (555,057)
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FINANCING ACTIVITIES:
Net proceeds (payment) of borrowings.... 2,241,906 (2,116,760)
Dividends paid.......................... (854,161) (853,287)
Proceeds from issuance of common stock.. 10,208 16,129
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Net cash provided by (used in) financing
activities................................. 1,397,953 (2,953,918)
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Increase in cash and cash equivalents....... 423,267 1,378,215
Cash and cash equivalents at beginning of
period..................................... 900,326 1,985,768
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Cash and cash equivalents at end of period.. $ 1,323,593 $ 3,363,983
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CONTACT: Flexsteel Industries, Inc., Dubuque
Timothy E. Hall, Chief Financial Officer, 563-585-8392