by This represents the company’s 6th consecutive quarterly increase in revenues
DUBUQUE, Iowa — Full-line furniture resource Flexsteel Industries reported its sixth consecutive quarterly increase in sales for its third fiscal quarter ended March 31.
The company said that net sales totaled $114 million, up 6.3% from $107.2 million the same period a year earlier, and adjusted net income of $6.3 million, or $1.13 per share, compared with adjusted net income of $3.6 million, or 67 cents per share, the same period a year earlier.
It also reported an operating loss of $5.1 million, or 4.4% of net sales that resulted from a $14.1 million pretax impairment charge related to the company’s leased facility in Mexicali, Mexico. This was in comparison to operating income of $3 million, or 2.8% of net sales, the same period last year.
Its adjusted operating income for the quarter was $8.3 million, or 7.3% of net sales, compared with $5.6 million, or 2.5% of net sales, the same period a year earlier.
The company also said it generated $12.3 million of cash from operations during the third quarter, which resulted in $22.6 million in cash and no line of credit borrowings as of March 31.
For the full nine-month period, it reported $326.5 million in net sales, compared with $301.9 million the same period last year, up 8.1%. Its adjusted operating income for the nine-month period totaled $15.7 million, or $2.82 per share, compared with $7.4 million, or $1.38 per share, last year.
“We continue to execute well and delivered strong results in the quarter,” said Derek Schmidt, president and chief executive officer of Flexsteel Industries Inc. “Our growth strategies are working and enabling us to continue our solid sales momentum as we delivered sales growth of 6.3% compared to the prior-year quarter, which represents our sixth consecutive quarter of mid-single- to low-double-digit year-over-year growth.
“The drivers of our growth remain broad-based as we grew in both our core markets, largely due to new products and share gains with strategic accounts, and in our new and expanded market initiatives. I’m also especially pleased with our continued profitability improvement and strong cash generation. Our adjusted operating margin of 7.3% in the quarter represents our eighth consecutive quarter of year-over-year improvement and our second-highest quarterly adjusted operating margin over the past seven years. Additionally, we delivered operating cash flow of $12.3 million in the quarter and bolstered our ending cash position to $22.6 million. Our strong financial position is a competitive advantage in this period of heightened economic uncertainty.”
He noted that the company has entered its fourth quarter “under a very tough economic backdrop with substantial uncertainty following the release of the proposed U.S. reciprocal tariffs on April 2. Although the reciprocal tariff rates that went into effect on April 9 were temporarily delayed 90 days for many countries, the 10% baseline tariff rate remains in effect as the U.S. works to negotiate individual trade deals.”
“Prior to these recent tariff announcements, many of our retailer partners noted considerably slower traffic which is likely a reflection of the sharp drop in consumer confidence over the past several months,” he added. “Many economists now expect significantly higher U.S. inflation for the next year along with slower economic growth, and even a likelihood of a recession if the new proposed tariff rates are implemented and sustained for an extended period. While we remain hopeful the U.S. administration can successfully negotiate with its trading partners to reduce or eliminate the reciprocal tariffs and minimize the impact on the U.S. economy, our near-term outlook for the industry is moderately pessimistic. As such, we are prepared to navigate multiple demand scenarios, and as we’ve demonstrated over the past few years, we can deliver share gains even in challenging industry conditions.”
He added that “until there is greater clarity and confidence in the stability of both the outlook for U.S. trade policy and economic growth, we expect the business environment to remain highly dynamic.”
