Flexsteel Industries Earnings 2020-12-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

flxs-20201231x10q

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 December 31, 2020

¨ 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 January 27, 2021	7,061,152

‎

Table of Contents

FLEXSTEEL INDUSTRIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED DECEMBER 31, 2020


		Page
Part I – Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of December 31, 2020 and June 30, 2020 (Unaudited)	3
	Consolidated Statements of Income for the three and six months ended December 31, 2020 and December 31, 2019 (Unaudited)	4
	Consolidated Statements of Comprehensive Income for the three and six months ended December 31, 2020 and December 31, 2019 (Unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended December 31, 2020 and December 31, 2019 (Unaudited)	5
	Consolidated Statements of Cash Flows for the six months ended December 31, 2020 and December 31, 2019 (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

‎

Table of Contents

PART I FINANCIAL INFORMATION

Item 1.Financial Statements

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands)



	December 31,		June 30,
	2020		2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	33,296	$	48,197
Trade receivables - less allowances: December 31, 2020, $3,110; June 30, 2020, $1,770		46,317		32,217
Inventories		92,024		70,565
Other		12,496		18,535
Assets held for sale		666		12,329
Total current assets		184,799		181,843
NONCURRENT ASSETS:
Property, plant and equipment, net		40,251		43,312
Operating lease right-of-use assets		9,463		8,683
Deferred income taxes		—		2,111
Other assets		1,299		1,310
TOTAL ASSETS	$	235,812	$	237,259

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	$	27,842	$	27,747
Current portion of operating lease liabilities		4,155		4,408
Accrued liabilities:
Payroll and related items		8,210		3,275
Insurance		3,201		3,787
Restructuring costs		1,418		1,961
Advertising		5,231		3,823
Environmental remediation		3,570		3,600
Other		4,849		4,861
Total current liabilities		58,476		53,462
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities		8,000		7,607
Other liabilities		929		685
Total liabilities		67,405		61,754

SHAREHOLDERS' EQUITY:
Common stock - $1 par value; authorized 15,000 shares; 8,082 shares issued and ‎7,087 outstanding as of December 31, 2020; 8,008 shares issued and ‎7,876 outstanding as of June 30, 2020		8,082		8,008
Additional paid-in capital		33,373		31,748
Treasury stock, at cost; 995 shares and 132 shares as of December 31, 2020 and ‎June 30, 2020, respectively		(21,576)		(1,563)
Retained earnings		148,528		137,312
Total shareholders' equity		168,407		175,505
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	235,812	$	237,259

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Amounts in thousands, except per share data)


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2020		2019		2020		2019
Net sales	$	119,106	$	102,949	$	224,345	$	203,297
Cost of goods sold		94,728		86,899		177,152		170,026
Gross margin		24,378		16,050		47,193		33,271
Selling, general and administrative		18,911		18,088		33,086		35,563
Restructuring expense		863		5,067		2,244		11,071
Gain on disposal of assets due to restructuring		(5,229)		(26)		(5,881)		(18,967)
Operating income (loss)		9,833		(7,079)		17,744		5,604
Other income		162		107		211		193
Income (loss) before income taxes		9,995		(6,972)		17,955		5,797
Income tax provision (benefit)		1,545		(1,588)		5,626		1,630
Net income (loss)	$	8,450	$	(5,384)	$	12,329	$	4,167
Weighted average number of common shares outstanding:
Basic		7,246		7,944		7,475		7,936
Diluted		7,495		7,944		7,681		8,146
Earnings (loss) per share of common stock:
Basic	$	1.17	$	(0.68)	$	1.65	$	0.53
Diluted	$	1.13	$	(0.68)	$	1.61	$	0.51

See accompanying Notes to Consolidated Financial Statements (Unaudited).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Amounts in thousands)



	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2020		2019		2020		2019
Net income (loss)	$	8,450	$	(5,384)	$	12,329	$	4,167
Other comprehensive loss:
Unrealized loss on securities		—		(5)		—		(18)
Reclassification of realized loss on securities to other income		—		5		—		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)	$	8,450	$	(5,384)	$	12,329	$	4,159

See accompanying Notes to Consolidated Financial Statements (Unaudited).

‎

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

(Amounts in thousands)



	Six Months Ended December 31, 2020
	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


	Six Months Ended December 31, 2019
	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

Price	15.01	EPS	-3
Shares	8	P/E	-5
MCap	123	P/FCF	-16
Net Debt	-36	EBIT	-21
TEV	87	TEV/EBIT	-4
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-12-31	Filed 2021-01-29
10-Q	2020-09-30	Filed 2020-10-30
10-K	2020-06-30	Filed 2020-08-31
10-Q	2020-03-31	Filed 2020-05-01
10-Q	2019-12-31	Filed 2020-01-31
10-Q	2019-09-30	Filed 2019-10-31
10-K	2019-06-30	Filed 2019-09-13
10-Q	2019-03-31	Filed 2019-05-02
10-Q	2018-12-31	Filed 2019-02-06
10-Q	2018-09-30	Filed 2018-10-30
10-K	2018-06-30	Filed 2018-09-06
10-Q	2018-03-31	Filed 2018-05-02
10-Q	2017-12-31	Filed 2018-01-30
10-Q	2017-09-30	Filed 2017-10-25
10-K	2017-06-30	Filed 2017-08-22
10-Q	2017-03-31	Filed 2017-04-26
10-Q	2016-12-31	Filed 2017-02-08
10-Q	2016-09-30	Filed 2016-10-25
10-K	2016-06-30	Filed 2016-08-24
10-Q	2016-03-31	Filed 2016-04-22
10-Q	2015-12-31	Filed 2016-02-09
10-Q	2015-09-30	Filed 2015-10-21
10-K	2015-06-30	Filed 2015-08-28
10-Q	2015-03-31	Filed 2015-04-23
10-Q	2014-12-31	Filed 2015-02-09
10-Q	2014-09-30	Filed 2014-10-17
10-K	2014-06-30	Filed 2014-08-28
10-Q	2014-03-31	Filed 2014-04-22
10-Q	2013-12-31	Filed 2014-02-10
10-Q	2013-09-30	Filed 2013-10-18
10-K	2013-06-30	Filed 2013-08-23
10-Q	2013-03-31	Filed 2013-04-18
10-Q	2012-12-31	Filed 2013-02-08
10-Q	2012-09-30	Filed 2012-10-19
10-K	2012-06-30	Filed 2012-08-22
10-Q	2012-03-31	Filed 2012-04-19
10-Q	2011-12-31	Filed 2012-02-07
10-Q	2011-09-30	Filed 2011-10-24
10-K	2011-06-30	Filed 2011-08-19
10-Q	2011-03-31	Filed 2011-04-21
10-Q	2010-12-31	Filed 2011-02-08
10-Q	2010-09-30	Filed 2010-10-22
10-K	2010-06-30	Filed 2010-08-26
10-Q	2010-03-31	Filed 2010-04-23
10-Q	2009-12-31	Filed 2010-02-09

8-K	2021-01-25	Earnings, Regulation FD, Exhibits
8-K	2020-12-09	Officers, Shareholder Vote, Exhibits
8-K	2020-10-26
8-K	2020-09-01
8-K	2020-08-24
8-K	2020-06-07
8-K	2020-06-01
8-K	2020-05-01
8-K	2020-04-28
8-K	2020-04-13
8-K	2020-03-18
8-K	2020-03-11
8-K	2020-01-27
8-K	2019-12-31
8-K	2019-12-09
8-K	2019-10-28
8-K	2019-09-20
8-K	2019-09-08
8-K	2019-08-29
8-K	2019-08-27
8-K	2019-08-26
8-K	2019-06-27
8-K	2019-06-17
8-K	2019-05-15
8-K	2019-04-29
8-K	2019-02-04
8-K	2019-01-28
8-K	2019-01-09
8-K	2018-12-24
8-K	2018-12-17
8-K	2018-12-10
8-K	2018-10-29
8-K	2018-10-25
8-K	2018-09-21
8-K	2018-09-09
8-K	2018-08-23
8-K	2018-07-05
8-K	2018-06-05
8-K	2018-04-26
8-K	2018-01-25
8-K	2018-01-24
8-K	2018-01-02

EX-31.1	flxs-20201231xex31_1.htm
EX-31.2	flxs-20201231xex31_2.htm
EX-32	flxs-20201231xex32.htm

FLXS 10Q Quarterly Report

Flexsteel Industries Earnings 2020-12-31