Flexsteel Industries Inc 10-Q for FY2023 Q3

Flexsteel Industries Inc (FLXS)

10-Q 2023-05-03 For: 2023-03-31

Added on April 10, 2026

About this 10-Q

Flexsteel Industries Inc filed this 10-Q on May 3, 2023, covering the quarter ended March 31, 2023 (FY2023 Q3).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $99.05M; down 29.5% from $140.41M a year earlier
Net income: $1.48M; down 72.3% from net income of $5.32M a year earlier
Diluted EPS: $0.28; down 65.9% from $0.82 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Incorporated in the 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 March 31, 2023, and June 30, 2022 (Unaudited)	3
	Consolidated Statements of Income and Comprehensive Income for the three and nine months ended March 31, 2023, and March 31, 2022 (Unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended March 31, 2023, and March 31, 2022 (Unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended March 31, 2023, and March 31, 2022 (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 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 6.	Exhibits	18
Signatures		19



	March 31,		June 30,
	2023		2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,409	$	2,184
Trade receivables - less allowances: March 31, 2023, $2,831, June 30, 2022, $2,980		36,507		41,106
Inventories		113,311		141,212
Other		7,572		4,950
Assets held for sale		616		616
Total current assets		160,415		190,068
NONCURRENT ASSETS:
Property, plant and equipment, net		38,405		38,543
Operating lease right-of-use assets		67,024		38,189
Other assets		1,943		1,941
TOTAL ASSETS	$	267,787	$	268,741

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	$	25,584	$	32,147
Current portion of operating lease liabilities		7,778		6,361
Accrued liabilities:
Payroll and related items		8,098		6,385
Insurance		2,425		2,158
Restructuring costs		—		1,290
Advertising		4,368		4,052
Environmental remediation		—		3,570
Other		5,524		8,664
Total current liabilities		53,777		64,627
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities		62,902		33,992
Lines of credit		17,727		37,739
Other liabilities		578		823
Total liabilities		134,984		137,181

SHAREHOLDERS' EQUITY:
Common stock - $1 par value; authorized 15,000 shares; 8,247 shares issued and 5,169 outstanding as of March 31, 2023; 8,190 shares issued and 5,300 outstanding as of June 30, 2022		8,247		8,190
Additional paid-in capital		36,463		34,467
Treasury stock, at cost; 3,078 shares, and 2,890 shares as of March 31, 2023, and June 30, 2022, respectively		(69,340)		(66,372)
Retained earnings		157,433		155,275
Total shareholders' equity		132,803		131,560
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	267,787	$	268,741


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2023		2022		2023		2022
Net sales	$	99,052	$	140,408	$	287,873	$	419,765
Cost of goods sold		80,407		118,337		238,041		364,757
Gross margin		18,645		22,071		49,832		55,008
Selling, general and administrative expenses		16,529		16,316		45,967		52,642
Environmental remediation		—		—		(2,788)		—
Restructuring (income) expense		—		(59)		—		715
Other expense		—		—		347		—
Gain on disposal of assets due to restructuring		—		—		—		(1,400)
Operating income		2,116		5,814		6,306		3,051
Interest expense		260		176		897		602
Other (income)		(12)		(14)		(11)		(116)
Income before income taxes		1,868		5,652		5,420		2,565
Income tax provision		393		336		803		441
Net income and comprehensive income	$	1,475	$	5,316	$	4,617	$	2,124
Weighted average number of common shares outstanding:
Basic		5,179		6,330		5,249		6,615
Diluted		5,352		6,494		5,427		6,842
Earnings per share of common stock:
Basic	$	0.28	$	0.84	$	0.88	$	0.32
Diluted	$	0.28	$	0.82	$	0.85	$	0.31


Common Stock - $1.00 Par Value
Shares Outstanding as of May 3, 2023	5,151,243



	Nine Months Ended March 31, 2023
	Total Par
	Value of		Additional
	Common		Paid-In		Treasury		Retained
	Shares ($1 Par)		Capital		Stock		Earnings		Total
Balance on June 30, 2022	$	8,190	$	34,467	$	(66,372)	$	155,275	$	131,560
Stock-based compensation		8		817		—		—		825
Vesting of restricted stock units and restricted shares		28		(378)		—		—		(350)
Treasury stock purchases		—		—		(403)		—		(403)
Cash dividends declared		—		—		—		(833)		(833)
Net income		—		—		—		289		289
Balance on September 30, 2022	$	8,226	$	34,906	$	(66,775)	$	154,731	$	131,088
Stock-based compensation		10		835		—		—		845
Vesting of restricted stock units and restricted shares		3		(60)		—		—		(57)
Treasury stock purchases		—		—		(1,823)		—		(1,823)
Cash dividends declared		—		—		—		(819)		(819)
Net income		—		—		—		2,853		2,853
Balance on December 31, 2022	$	8,239	$	35,681	$	(68,598)	$	156,765	$	132,087
Stock-based compensation		8		794		—		—		802
Vesting of restricted stock units and restricted shares		—		(12)		—		—		(12)
Treasury stock purchases		—		—		(742)		—		(742)
Cash dividends declared		—		—		—		(807)		(807)
Net income		—		—		—		1,475		1,475
Balance on March 31, 2023	$	8,247	$	36,463	$	(69,340)	$	157,433	$	132,803


	Nine Months Ended March 31, 2022
	Total Par
	Value of		Additional
	Common		Paid-In		Treasury		Retained
	Shares ($1 Par)		Capital		Stock		Earnings		Total
Balance on 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 on September 30, 2021	$	8,143	$	34,917	$	(33,235)	$	160,446	$	170,271
Stock-based compensation		4		1,016		—		—		1,020
Vesting of restricted stock units and restricted shares		(2)		(42)		—		—		(44)
Stock options exercised		8		110		—		—		118
Treasury stock purchases		—		—		(7,743)		—		(7,743)
Cash dividends declared		—		—		—		(1,013)		(1,013)
Net income		—		—		—		(7,545)		(7,545)
Balance on December 31, 2021	$	8,153	$	36,001	$	(40,978)	$	151,888	$	155,064
Stock-based compensation		6		(637)		—		—		(631)
Treasury stock purchases		—		—		(18,300)		—		(18,300)
Cash dividends declared		—		—		—		(849)		(849)
Net income		—		—		—		5,316		5,316
Balance on March 31, 2022	$	8,159	$	35,364	$	(59,278)	$	156,355	$	140,600



	March 31,		June 30,
(in thousands)	2023		2022
Raw materials	$	14,980	$	16,405
Work in process and finished parts		4,323		5,534
Finished goods		94,008		119,273
Total	$	113,311	$	141,212



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



	Nine Months Ended
	March 31, 2023		March 31, 2022
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,575	$	4,515

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	35,305	$	16,814

Weighted-average remaining lease term (in years):
Operating leases		9.4		4.4

Weighted-average discount rate:
Operating leases		2.9%		3.2%


	March 31, 2023
(in thousands)
Remaining payments in FY2023	$	3,021
FY2024		9,589
FY2025		7,989
FY2026		7,762
FY2027		7,778
Thereafter		44,934
Total future minimum lease payments	$	81,073
Less imputed interest		10,393
Lease liability	$	70,680



	One-time
	Employee		Other
	Termination		Associated
(in thousands)	Benefits		Costs		Total
Accrual balance on June 30, 2022	$	1,275	$	15	$	1,290
Expenses (paid)		(1,275)		(15)		(1,290)
Accrual balance on March 31, 2023	$	—	$	—	$	—


	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 of June 30, 2022	86	$	19.53	174	$	18.87	260	$	19.09
Granted	63		19.27	91		19.27	154		19.27
Vested	(1)		19.23	(44)		17.23	(45)		17.28
Forfeited	(2)		26.62	(3)		26.62	(5)		26.62
Unvested as of March 31, 2023	146	$	19.32	218	$	19.26	364	$	19.29



		Weighted
	Shares	Average
	(in thousands)	Exercise Price
Outstanding at June 30, 2022	215	$	21.50
Granted	—		—
Exercised	—		—
Canceled	(13)		30.20
Outstanding at March 31, 2023	202	$	20.95



		Options	Weighted Average
Range of		Outstanding	Remaining	Exercise
Prices		(in thousands)	Life (Years)	Price
$	9.97 - 15.14	97	6.9	$	12.64
	18.30 - 19.72	6	8.2		18.30
	21.96 - 27.57	57	4.1		24.18
	31.06 - 32.80	29	3.0		32.27
	43.09 - 47.45	13	3.5		45.28
$	9.97 - 47.45	202	5.4	$	20.95


	Nine Months Ended
	March 31,
(in thousands)	2023		2022
Net cash provided by (used in) operating activities	$	30,462	$	(3,909)
Net cash (used in) investing activities		(3,597)		(930)
Net cash (used in) provided by financing activities		(26,640)		6,900
Increase in cash and cash equivalents	$	225	$	2,061


	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
January 1, 2023, to January 31, 2023	25,058	$	17.08	1,339,947	$	4,827,661
February 1, 2023, to February 28, 2023	7,782		19.24	1,347,729		4,677,560
March 1, 2023, to March 31, 2023	8,433		19.51	1,356,162		4,422,399
Three months ended March 31, 2023	41,273	$	17.98	1,356,162	$	4,422,399


Exhibit No.
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:	May 3, 2023	By:	/S/ G. Alejandro Huerta
			G. Alejandro Huerta
			Chief Financial Officer
			(Principal Financial & Accounting Officer)