0000037472-21-000014.txt : 20210430 0000037472-21-000014.hdr.sgml : 20210430 20210430152529 ACCESSION NUMBER: 0000037472-21-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 60 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210430 DATE AS OF CHANGE: 20210430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLEXSTEEL INDUSTRIES INC CENTRAL INDEX KEY: 0000037472 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 420442319 STATE OF INCORPORATION: MN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05151 FILM NUMBER: 21877232 BUSINESS ADDRESS: STREET 1: 385 BELL ST. CITY: DUBUQUE STATE: IA ZIP: 52001 BUSINESS PHONE: 3195567730 MAIL ADDRESS: STREET 1: P.O. BOX 877 CITY: DUBUQUE STATE: IA ZIP: 52004-0877 10-Q 1 flxs-20210331x10q.htm 10-Q flxs-20210331x10q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

______________________________________

FORM 10-Q

______________________________________

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2021

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 0-5151

______________________________________

FLEXSTEEL INDUSTRIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Incorporated in State of Minnesota

42-0442319

(State or other Jurisdiction of

(I.R.S. Identification No.)

Incorporation or Organization)

385 BELL STREET

DUBUQUE, IA 52001-0877

(Address of Principal Executive Offices) (Zip Code)

(563) 556-7730

(Registrant’s Telephone Number, Including Area Code)

______________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

FLXS

The Nasdaq Stock Market, LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one).

Large Accelerated Filer ¨ Accelerated Filer þ Non-Accelerated Filer ¨ Smaller Reporting Company þ Emerging Growth Company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No þ

Common Stock - $1.00 Par Value

Shares Outstanding as of April 27, 2021

6,853,593


FLEXSTEEL INDUSTRIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2021

Page

Part I – Financial Information

Item 1.

Financial Statements

3

Consolidated Balance Sheets as of March 31, 2021 and June 30, 2020 (Unaudited)

3

Consolidated Statements of Income for the three and nine months ended March 31, 2021 and March 31, 2020 (Unaudited)

4

Consolidated Statements of Comprehensive Income for the three and nine months ended March 31, 2021 and March 31, 2020 (Unaudited)

4

Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended March 31, 2021 and March 31, 2020 (Unaudited)

5

Consolidated Statements of Cash Flows for the nine months ended March 31, 2021 and March 31, 2010 (Unaudited)

6

Notes to Consolidated Financial Statements (Unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

17

Item 4.

Controls and Procedures

17

Part II – Other Information

Item 1A.

Risk Factors

18

Item 2A.

Unregistered Sales of Equity Securities and Use of Proceeds

18

Item 6.

Exhibits

18

Signatures

19


PART I FINANCIAL INFORMATION

Item 1.Financial Statements

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands)

March 31,

June 30,

2021

2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

16,971

$

48,197

Trade receivables - less allowances: March 31, 2021, $3,050; June 30, 2020, $1,770

44,231

32,217

Inventories

109,448

70,565

Other

10,182

18,535

Assets held for sale

666

12,329

Total current assets

181,498

181,843

NONCURRENT ASSETS:

Property, plant and equipment, net

40,309

43,312

Operating lease right-of-use assets

28,539

8,683

Deferred income taxes

2,111

Other assets

1,384

1,310

TOTAL ASSETS

$

251,730

$

237,259

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable - trade

$

31,798

$

27,747

Current portion of operating lease liabilities

5,741

4,408

Accrued liabilities:

Payroll and related items

4,914

3,275

Insurance

2,987

3,787

Restructuring costs

1,392

1,961

Advertising

4,730

3,823

Environmental remediation

3,570

3,600

Other

5,331

4,861

Total current liabilities

60,463

53,462

LONG-TERM LIABILITIES:

Operating lease liabilities, less current maturities

26,202

7,607

Other liabilities

1,539

685

Total liabilities

88,204

61,754

SHAREHOLDERS' EQUITY:

Common stock - $1 par value; authorized 15,000 shares; 8,125 shares issued and

6,875 outstanding as of March 31, 2021; 8,008 shares issued and

7,876 outstanding as of June 30, 2020

8,125

8,008

Additional paid-in capital

33,100

31,748

Treasury stock, at cost; 1,249 shares and 132 shares as of March 31, 2021 and

June 30, 2020, respectively

(30,048)

(1,563)

Retained earnings

152,349

137,312

Total shareholders' equity

163,526

175,505

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

251,730

$

237,259

See accompanying Notes to Consolidated Financial Statements (Unaudited).

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Amounts in thousands, except per share data)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2021

2020

2021

2020

Net sales

$

118,408

$

98,821

$

342,753

$

302,118

Cost of goods sold

95,284

84,973

272,436

254,999

Gross margin

23,124

13,848

70,317

47,119

Selling, general and administrative

16,292

20,115

49,378

55,678

Restructuring expense

480

2,377

2,724

13,448

Gain on disposal of assets due to restructuring

(302)

(5,881)

(19,269)

Operating income (loss)

6,352

(8,342)

24,096

(2,738)

Interest expense

(16)

(16)

Other income

59

135

270

328

Income (loss) before income taxes

6,411

(8,223)

24,366

(2,426)

Income tax provision (benefit)

1,533

(2,953)

7,159

(1,323)

Net income (loss)

$

4,878

$

(5,270)

$

17,207

$

(1,103)

Weighted average number of common shares outstanding:

Basic

6,998

7,965

7,316

7,955

Diluted

7,270

7,965

7,551

7,955

Earnings (loss) per share of common stock:

Basic

$

0.70

$

(0.66)

$

2.35

$

(0.14)

Diluted

$

0.67

$

(0.66)

$

2.28

$

(0.14)

See accompanying Notes to Consolidated Financial Statements (Unaudited).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Amounts in thousands)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2021

2020

2021

2020

Net income (loss)

$

4,878

$

(5,270)

$

17,207

$

(1,103)

Other comprehensive loss:

Unrealized loss on securities

(18)

Reclassification of realized loss on securities to

other income

7

Unrealized losses in securities before taxes

(11)

Income tax benefit related to securities losses

3

Other comprehensive loss, net of tax

(8)

Comprehensive income (loss)

$

4,878

$

(5,270)

$

17,207

$

(1,111)

See accompanying Notes to Consolidated Financial Statements (Unaudited).


FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

(Amounts in thousands)

Nine Months Ended March 31, 2021

Total Par

Value of

Additional

Common

Paid-In

Treasury

Retained

Shares ($1 Par)

Capital

Stock

Earnings

Total

Balance at June 30, 2020

$

8,008

$

31,748

$

(1,563)

$

137,312

$

175,505

Stock-based compensation

2

954

956

Vesting of restricted stock units and restricted shares

55

(387)

(332)

Treasury stock purchases

(9,000)

(9,000)

Cash dividends declared

(383)

(383)

Net income

3,879

3,879

Balance at September 30, 2020

$

8,065

$

32,315

$

(10,563)

$

140,808

$

170,625

Stock-based compensation

10

1,017

1,027

Stock options exercised

7

41

48

Treasury stock purchases

(11,013)

(11,013)

Cash dividends declared

(730)

(730)

Net income

8,450

8,450

Balance at December 31, 2020

$

8,082

$

33,373

$

(21,576)

$

148,528

$

168,407

Stock-based compensation

3

772

775

Vesting of restricted stock units and restricted shares

40

(1,045)

(1,005)

Treasury stock purchases

(8,472)

(8,472)

Cash dividends declared

(1,057)

(1,057)

Net income

4,878

4,878

Balance at March 31, 2021

$

8,125

$

33,100

$

(30,048)

$

152,349

$

163,526

Nine Months Ended March 31, 2020

Total Par

Accumulated

Value of

Additional

Other

Common

Paid-In

Retained

Comprehensive

Shares ($1 Par)

Capital

Earnings

(Loss) Income

Total

Balance at June 30, 2019

$

7,903

$

27,512

$

170,004

$

8

$

205,427

Adoption of ASU 2016-02

(42)

(42)

Unrealized gain on available

  for sale investments, net of tax

(8)

(8)

Stock-based compensation

39

1,310

1,349

Cash dividends declared

(1,754)

(1,754)

Net income

9,551

9,551

Balance at September 30, 2019

$

7,942

$

28,822

$

177,759

$

$

214,523

Stock-based compensation

6

1,891

1,897

Stock options exercised

2

19

21

Cash dividends declared

(1,816)

(1,816)

Net income

(5,384)

(