Flexsteel Industries, Inc. (NASDAQ:FLXS) today reported record net sales of $217 million for the six month period ended December 31, 2013, a 17% increase from the prior year six month period. Net sales for the quarter ended December 31, 2013 were a second quarter record $113 million, a 19% increase over prior year quarter net sales of $95 million.
The Company reported net income of $4.9 million or $0.66 per share for the six month period ended December 31, 2013 compared to $5.8 million or $0.80 per share for the prior year six month period. Adjusted net income for the current year six month period was $8.9 million or $1.18 per share compared to $6.5 million or $0.89 per share in the prior year period. For the quarter ended December 31, 2013 the Company reported net income of $1.2 million or $0.16 per share compared to $2.9 million or $0.40 per share for the prior year quarter. Adjusted net income for the quarter was $4.5 million or $0.60 per share compared to $3.3 million or $0.46 per share in the prior year quarter. For additional information regarding adjusted net income and adjusted earnings per share (which are non-GAAP measures), please refer to the reconciliations and other information included in the attached schedules.
In December 2013 the Company entered into an agreement to settle the Indiana civil litigation in order to eliminate the ongoing costs and distraction of the litigation. The Company will contribute $6.3 million to the settlement as part of an agreement whose terms are otherwise confidential. In reaching the agreement, the Company does not admit any wrongdoing and believes that it did not cause or contribute to the contamination at issue. This amount is recorded as litigation settlement payable on the Condensed Consolidated Balance Sheets and as litigation settlement cost in the Consolidated Statements of Income. The Company incurred approximately $0.8 million and $1.7 million of legal defense costs during the quarter and six month period ended December 31, 2013, respectively, which have been recorded in selling, general and administrative (SG&A) expense. The Company has received reimbursements of defense costs of approximately $1.7 million from insurers and this has been reflected as a reduction in SG&A expense for the quarter ended December 31, 2013. The Company continues to pursue recovery of defense and settlement costs from insurance carriers.
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