Flexsteel Industries Inc. (NASDAQ:FLXS) filed Quarterly Report for the period ended 2009-12-31.
Flexsteel Industries Inc. has a market cap of $75.7 million; its shares were traded at around $11.515 with a P/E ratio of 15.6 and P/S ratio of 0.2. The dividend yield of Flexsteel Industries Inc. stocks is 1.7%.FLXS is in the portfolios of Chuck Royce of ROYCE & ASSOCIATES.
Highlight of Business Operations:The above factors resulted in current quarter net income of $3.0 million or $0.45 per share, compared to the prior year quarter net income of $0.3 million or $0.04 per share.
The above factors resulted in current six-months ended net income of $4.3 million or $0.66 per share, compared to the prior year net loss of $0.5 million or $0.07 per share.
Operating Activities: Working Capital (current assets less current liabilities) at December 31, 2009 was $83.1 million. Net cash provided by operating activities was $17.8 million during the six months ended December 31, 2009 due to improved profitability and lower inventory. Cash provided by operating activities was used primarily to reduce borrowings by $5.0 million and pay dividends of $0.6 million. Changes in working capital from June 30, 2009 to December 31, 2009 included net income of $4.3 million and a decrease in inventory of $7.0 million. The Company expects that due to the nature of our operations that there will be continuing fluctuations in accounts receivable, inventory, accounts payable, and cash flows from operations due to the following: (i) we purchase inventory from overseas suppliers with long lead times and depending on the timing of the delivery of those orders, inventory levels can be greatly impacted, and (ii) we have various customers that purchase large quantities of inventory periodically and the timing of those purchases can significantly impact inventory levels, accounts receivable, accounts payable and short-term borrowings. As discussed below, the Company believes it has adequate financing arrangements and access to capital to absorb these fluctuations in operating cash flow.
Investing Activities: Net cash used in investing activities was $1.2 million during the six-month period ended December 31, 2009 and included $0.9 million for the purchase of capital assets. The Company expects that capital expenditures will be less than $1.0 million for the remainder of the 2010 fiscal year.
Financing Activities: Net cash used in financing activities was $5.4 million during the six-month period ended December 31, 2009. Borrowings were reduced by $5.0 million. Dividends of $0.6 million were paid during the six-month period. Subsequent to the end of the quarter, the Company paid-off its short-term debt of $5 million and terminated the interest rate swap for $0.2 million using available cash.
Interest Rate Risk The Companys primary market risk exposure with regard to financial instruments is changes in interest rates. At December 31, 2009, the Company had effectively fixed the interest rates at 4.9% on approximately $5.0 million of its short-term debt through the use of interest rate swaps. As of December 31, 2009, the cumulative fair value of the swaps is a liability of approximately $0.2 million and is included in other liabilities. On January 28, 2010, the Company paid off its $5 million in short-term debt and terminated the related interest rate swap of $5 million. The cost to terminate the swap was $0.2 million.
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