Flexsteel Industries, Inc. (NASDAQ:FLXS) today reported net sales of $91.2 million, a 12% increase for the first quarter ended September 30, 2012 as compared to the prior year first quarter. Residential net sales were $72.3 million in the current quarter, an increase of 16% from the prior year quarter of $62.5 million. Commercial net sales were approximately $19.0 million in the current and prior year quarters.
The Company reported record net income for a first fiscal quarter of $2.9 million or $0.40 per share for the quarter ended September 30, 2012 compared to $2.4 million or $0.34 per share for the prior year quarter.
Working capital (current assets less current liabilities) at September 30, 2012 was $102.8 million compared to $103.7 million at June 30, 2012. Changes in working capital from June 30, 2012 to September 30, 2012 include a reduction in cash of $7.4 million offset by increases in inventory of $2.9 million and accounts receivable of $2.2 million, and a reduction in current liabilities of $0.9 million. The higher inventory levels support the increases in residential sales volume and expanded product offerings. The accounts receivable increase is primarily due to the timing of collections.
Cash decreased by $7.4 million during the first fiscal quarter of 2013 with net cash used in operating activities of $3.5 million, capital expenditures of $3.0 million and payment of dividends of $1.0 million. The Company expects that capital expenditures will be approximately $3.0 million for the remainder of fiscal year 2013.All earnings per share amounts are on a diluted basis. OutlookThe Company believes that moderate top line growth will continue through the end of calendar year 2012. Residential growth will continue with existing customers and products, and through expanding our product portfolio and customer base. The Company expects current order trends for commercial products to continue for the remainder of the calendar year. The Company is confident in its ability to take advantage of market opportunities as they present themselves. However, our optimism is guarded due to the uncertainty that the upcoming elections and economic factors have on the consumers’ confidence and willingness to buy. The Company remains committed to its core strategies, which include offering a wide range of quality products and price points to the residential and commercial markets, combined with a conservative approach to business. We will maintain our focus on a strong balance sheet and profitable growth. We believe these core strategies are in the best interest of our shareholders.
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