Flexsteel Industries Inc 10-Q for FY2022 Q1

Flexsteel Industries Inc (FLXS)

10-Q 2021-10-29 For: 2021-09-30

Added on April 10, 2026

About this 10-Q

Flexsteel Industries Inc filed this 10-Q on October 29, 2021, covering the quarter ended September 30, 2021 (FY2022 Q1).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $137.69M; up 30.8% from $105.24M a year earlier
Net income: $4.35M; up 12.2% from net income of $3.88M a year earlier
Diluted EPS: $0.61; up 24.5% from $0.49 a year earlier

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Incorporated in State of Minnesota	42-0442319
(State or other Jurisdiction of	(I.R.S. Identification No.)
Incorporation or Organization)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FLXS	The Nasdaq Stock Market, LLC



		Page
Part I – Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and June 30, 2021	3
	Consolidated Statements of Income for the three months ended September 30, 2021 and September 30, 2020 (Unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the three months ended September 30, 2021 and September 30, 2020 (Unaudited)	5
	Consolidated Statements of Cash Flows for the three months ended September 30, 2021 and September 30, 2020 (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	16
Item 4.	Controls and Procedures	16
Part II – Other Information
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 6.	Exhibits	18
Signatures		19



	September 30,		June 30,
	2021		2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,995	$	1,342
Trade receivables - less allowances: September 30, 2021, $3,360, June 30, 2021, $3,240		48,246		55,986
Inventories		193,700		161,125
Other		10,868		9,421
Assets held for sale		616		666
Total current assets		257,425		228,540
NONCURRENT ASSETS:
Property, plant and equipment, net		39,159		39,783
Operating lease right-of-use assets		25,915		27,057
Other assets		1,391		1,399
TOTAL ASSETS	$	323,890	$	296,779

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	$	44,948	$	67,773
Current portion of operating lease liabilities		5,664		5,833
Accrued liabilities:
Payroll and related items		6,357		7,662
Insurance		2,935		3,062
Restructuring costs		1,392		1,522
Advertising		5,001		5,196
Environmental remediation		3,570		3,570
Other		6,103		5,133
Total current liabilities		75,970		99,751
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities		23,412		24,317
Line of Credit		53,053		3,500
Other liabilities		1,184		1,243
Total liabilities		153,619		128,811

SHAREHOLDERS' EQUITY:
Common stock - $1 par value; authorized 15,000 shares; 8,143 shares issued and ‎6,810 outstanding as of September 30, 2021; 8,133 shares issued and ‎6,848 outstanding as of June 30, 2021		8,143		8,133
Additional paid-in capital		34,917		34,015
Treasury stock, at cost; 1,333 shares and 1,284 shares as of September 30, 2021, and ‎June 30, 2021, respectively		(33,235)		(31,320)
Retained earnings		160,446		157,140
Total shareholders' equity		170,271		167,968
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	323,890	$	296,779


	Three Months Ended
	September 30,
	2021		2020
Net sales	$	137,689	$	105,239
Cost of goods sold		114,279		82,424
Gross margin		23,410		22,815
Selling, general and administrative expenses		18,785		14,175
Restructuring expense		152		1,381
(Gain) on disposal of assets due to restructuring		(1,400)		(652)
Operating income		5,873		7,911
Interest expense		203		—
Other expense		2		49
Income before income taxes		5,668		7,960
Income tax provision		1,315		4,081
Net income	$	4,353	$	3,879
Weighted average number of common shares outstanding:
Basic		6,834		7,702
Diluted		7,090		7,908
Earnings per share of common stock:
Basic	$	0.64	$	0.50
Diluted	$	0.61	$	0.49


Common Stock - $1.00 Par Value
Shares Outstanding as of October 28, 2021	6,765,770



	Three Months Ended September 30, 2021
	Total Par
	Value of		Additional
	Common		Paid-In		Treasury		Retained
	Shares ($1 Par)		Capital		Stock		Earnings		Total
Balance at June 30, 2021	$	8,133	$	34,015	$	(31,320)	$	157,140	$	167,968
Stock-based compensation		3		1,159		—		—		1,162
Vesting of restricted stock units and restricted shares		7		(257)		—		—		(250)
Treasury stock purchases		—		—		(1,915)		—		(1,915)
Cash dividends declared		—		—		—		(1,047)		(1,047)
Net income		—		—		—		4,353		4,353
Balance at September 30, 2021	$	8,143	$	34,917	$	(33,235)	$	160,446	$	170,271


	Three Months Ended September 30, 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



	September 30,		June 30,
(in thousands)	2021		2021
Raw materials	$	26,460	$	22,500
Work in process and finished parts		7,267		6,234
Finished goods		159,973		132,391
Total	$	193,700	$	161,125



				Accumulated		Net Book
Location	Asset Category	Cost		Depreciation		Value
(in thousands)
Starkville, Mississippi	Building & building improvements		4,615		(4,254)		361
	Land & land improvements		694		(439)		255
	Total Starkville		5,309		(4,693)		616

	Total assets held for sale	$	5,309	$	(4,693)	$	616



	Three Months Ended
(in thousands)	September 30, 2021		September 30, 2020
Operating lease expense	$	1,389	$	1,074
Variable lease expense		75		69
Total lease expense	$	1,464	$	1,143



	One-time
	Employee		Other
	Termination		Associated
(in thousands)	Benefits		Costs		Total
Accrual balance at June 30, 2021	$	1,502	$	20	$	1,522
Costs incurred		—		152		152
Expenses paid		(130)		(152)		(282)
Accrual balance at September 30, 2021	$	1,372	$	20	$	1,392


	Time Based Vest (RSUs)			Performance Based Vest (PSUs)			Total
		Weighted Average			Weighted Average			Weighted Average
		Fair Value			Fair Value			Fair Value
(shares in thousands)	Shares	Per Share		Shares	Per Share		Shares	Per Share
Unvested as June 30, 2021	107	$	13.89	142	$	13.36	249	$	13.59
Granted	27		42.50	40		42.50	67		42.50
Forfeited	—		—	—		—	—		—
Unvested as of September 30, 2021	134	$	19.63	182	$	19.80	316	$	19.73



		Weighted
	Shares	Average
	(in thousands)	Exercise Price
Outstanding at June 30, 2021	232	$	21.91
Granted	—		—
Exercised	—		—
Cancelled	(7)		45.18
Outstanding at September 30, 2021	225	$	21.22



		Options	Weighted Average
Range of		Outstanding	Remaining	Exercise
Prices		(in thousands)	Life (Years)	Price
$	9.97 - 15.14	104	7.8	$	12.72
	18.30 - 19.72	15	4.8		19.11
	21.96 - 27.57	58	5.6		24.21
	31.06 - 32.80	32	4.7		32.30
	43.09 - 47.45	16	5.0		45.42
$	9.97 - 47.45	225	6.4	$	21.22


	Three Months Ended
	September 30, 2021		September 30, 2020
(in thousands)
Within one year	$	6,591	$	4,601
After one year and within two years		5,517		4,327
After two years and within three years		4,563		3,159
After three years and within four years		2,620		2,189
After four years and within five years		2,469		200
After five years		11,273		—
Total future minimum lease payments	$	33,033	$	14,476
Less – Discount		3,957		809
Lease liability	$	29,076	$	13,667


	Three Months Ended
	September 30,
(in thousands)	2021		2020
Net cash (used in) operating activities	$	(44,315)	$	(2,186)
Net cash provided by investing activities		629		319
Net cash provided by (used in) financing activities		46,339		(9,783)
Increase (decrease) in cash and cash equivalents	$	2,653	$	(11,650)


	Total Number	Average		Total Number	Approximate Dollar Value
	of Shares	Price Paid		of Shares Purchased	of Shares that May Yet
Period	Purchased	per Share		as Part of Plan	Be Purchased
July 1, 2021, to July 31, 2021	13,997	$	35.89	536,994	$	12,112,336
August 1, 2021, to August 31, 2021	17,781		35.51	554,775		11,479,990
September 1, 2021, to September 30, 2021	17,434		34.68	572,209		10,874,445
Three months ended September 30, 2021	49,212	$	35.33	572,209	$	10,874,445


Exhibit No.
10.1	Credit Agreement between Flexsteel Industries, Inc., and Wells Fargo Bank, National Association, dated September 8, 2021 (incorporated by reference to the Form 10-K filed with the Securities and Exchange Commission on September 8, 2021).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.*
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104.Cover Page	Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*	Filed herewith
**	In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”


		FLEXSTEEL INDUSTRIES, INC.


Date:	October 29, 2021	By:	/S/ Derek P. Schmidt
			Derek P. Schmidt
			Chief Financial Officer and Chief Operating Officer
			(Principal Financial & Accounting Officer)