Flexsteel Industries Earnings 2020-03-31

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

flxs-20200331x10q

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, 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 April 29, 2020	8,000,663

‎

Table of Contents

FLEXSTEEL INDUSTRIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED March 31, 2020


		Page
Part I – Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2020 and June 30, 2019 (Unaudited)	3
	Consolidated Statements of Income (Loss) for the three and nine months ended March 31, 2020 and March 31, 2019 (Unaudited)	4
	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended March 31, 2020 and March 31, 2019 (Unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended March 31, 2020 (Unaudited)	5
	Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended March 31, 2019 (Unaudited)	6
	Consolidated Statements of Cash Flows for the nine months ended March 31, 2020 and March 31, 2019 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	20
Part II – Other Information
Item 1A.	Risk Factors	21
Item 6.	Exhibits	21
Signatures		22

‎

Table of Contents

PART I FINANCIAL INFORMATION

Item 1.Financial Statements

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands, except share and per share data)



	March 31,		June 30,
	2020		2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	62,540	$	22,247
Trade receivables - less allowances: March 31, 2020, $4,500; June 30, 2019, $250		34,292		38,157
Inventories		75,096		93,659
Other		14,924		11,904
Assets held for sale		129		—
Total current assets		186,981		165,967
NONCURRENT ASSETS:
Property, plant and equipment, net		74,653		79,238
Operating lease right-of-use assets		12,793		—
Deferred income taxes		93		7,564
Other assets		1,318		1,518
TOTAL ASSETS	$	275,838	$	254,287
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	$	23,046	$	18,414
Lines of credit		15,000		—
Current portion of operating lease liabilities		4,686		—
Accrued liabilities:
Payroll and related items		3,842		4,428
Insurance		4,103		4,554
Restructuring costs		982		6,203
Advertising		2,724		3,497
Environmental remediation		3,600		3,600
Other		6,423		7,068
Total current liabilities		64,406		47,764
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities		8,473		—
Other liabilities		692		1,096
Total liabilities		73,571		48,860

SHAREHOLDERS' EQUITY:
Common stock - $1 par value; authorized 15,000,000 shares; ‎ outstanding March 31, 2020, 8,000,663 shares; ‎ outstanding June 30, 2019, 7,902,708 shares		8,001		7,903
Additional paid-in capital		30,758		27,512
Retained earnings		163,508		170,004
Accumulated other comprehensive income		—		8
Total shareholders' equity		202,267		205,427
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	275,838	$	254,287

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(Amounts in thousands, except per share data)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2020		2019		2020		2019
Net sales	$	98,821	$	111,542	$	302,118	$	343,381
Cost of goods sold		84,973		90,214		254,999		278,786
Gross margin		13,848		21,328		47,119		64,595
Selling, general and administrative		20,115		22,915		55,678		62,484
Restructuring expense		2,377		—		13,448		—
ERP impairment		—		18,668		—		18,668
Gain on disposal of assets		302		—		19,269		—
Operating loss		(8,342)		(20,255)		(2,738)		(16,557)
Interest expense		16		—		16		—
Other income		135		158		328		397
Loss before income taxes		(8,223)		(20,097)		(2,426)		(16,160)
Income tax benefit		2,953		4,545		1,323		3,470
Net loss	$	(5,270)	$	(15,552)	$	(1,103)	$	(12,690)
Weighted average number of common shares outstanding:
Basic		7,965		7,892		7,955		7,884
Diluted		7,965		7,892		7,955		7,884
Loss per share of common stock:
Basic	$	(0.66)	$	(1.97)	$	(0.14)	$	(1.61)
Diluted	$	(0.66)	$	(1.97)	$	(0.14)	$	(1.61)

See accompanying Notes to Consolidated Financial Statements (Unaudited).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)



	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2020		2019		2020		2019
Net loss	$	(5,270)	$	(15,552)	$	(1,103)	$	(12,690)
Other comprehensive income (loss):
Unrealized gain (loss) on securities		—		157		(18)		240
Reclassification of realized gain (loss) on securities to other income		—		(107)		7		(211)
Unrealized gains (losses) in securities before taxes		—		50		(11)		29
Income tax (expense) benefit related to securities gains (losses)		—		(13)		3		(8)
Net unrealized gains (losses) on securities		—		37		(8)		21
Reclassification of realized gains on terminated pension		—		2,727		—		2,727
Income tax (expense) benefit related to terminated pension		—		(709)		—		(709)
Net realized gain on terminated pension		—		2,018		—		2,018
Other comprehensive income (loss), net of tax		—		2,055		(8)		2,039
Comprehensive loss	$	(5,270)	$	(13,497)	$	(1,111)	$	(10,651)

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)



	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 loss on available for sale investments, ‎ net of tax		—		—		—		(8)		(8)
Long-term incentive compensation		—		109		—		—		109
Stock-based compensation		39		1,201		—		—		1,240
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 options exercised		2		19		—		—		21
Long-term incentive compensation		—		104		—		—		104
Stock-based compensation		6		1,787		—		—		1,793
Cash dividends declared		—		—		(1,816)		—		(1,816)
Net loss		—		—		(5,384)		—		(5,384)
Balance at December 30, 2019	$	7,950	$	30,732	$	170,559	$	—	$	209,241
Long-term incentive compensation		—		89		—		—		89
Stock-based compensation		7		449		—		—		456
Vesting of restricted stock units and restricted shares		44		(512)		—				(468)
Cash dividends declared		—

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	2020-03-31	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	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-10.1	flxs-20200331xex10_1.htm
EX-31.1	flxs-20200331xex31_1.htm
EX-31.2	flxs-20200331xex31_2.htm
EX-32	flxs-20200331xex32.htm

FLXS 10Q Quarterly Report

Flexsteel Industries Earnings 2020-03-31