Flexsteel(FLXS) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales for the first quarter of fiscal 2025 were $104.0 million, an increase of 9.9% compared to $94.6 million in the prior year quarter[2] - Gross margin improved to 21.5%, up 200 basis points from 19.5% in the prior year quarter, driven by sales leverage and supply chain cost savings[4] - GAAP operating income for the quarter was $6.0 million, or 5.8% of net sales, compared to $1.9 million, or 2.0% of net sales in the prior year quarter[2] - Net income for the quarter was $4.1 million, or $0.74 per diluted share, compared to $0.8 million, or $0.14 per diluted share in the prior year quarter[5] - Sales orders for the first quarter were robust at $100.8 million, representing a growth of 9.4% compared to the prior year quarter[2] Guidance and Projections - The company is increasing its sales growth guidance for fiscal 2025 from 2%-6% to 3.5%-6.5%[7] - The operating margin guidance for fiscal 2025 has been raised from 5.5%-6.5% to 5.8%-6.5%[7] Cash and Working Capital - Cash balance at the end of the quarter was $5.7 million, with working capital of $98.3 million and availability of approximately $54.9 million under its secured line of credit[6] - Cash and cash equivalents at the end of the period rose to $5,740,000 from $2,973,000 in 2023[15] - Net cash provided by operating activities was $2,398,000, a turnaround from a cash used of $1,781,000 in the previous year[15] Expenses and Investments - Selling, general and administrative expenses decreased to 15.7% of net sales from 17.4% in the prior year quarter, due to higher sales volume leverage[4] - The company reported capital expenditures of $0.4 million for the quarter[6] - Capital expenditures decreased to $427,000 from $1,355,000 in 2023, indicating a reduction in investment outlay[15] - Dividends paid remained relatively stable at $874,000 compared to $879,000 in the prior year[15] Financing Activities - Proceeds from sales of investments amounted to $1,155,000, with no sales reported in the previous year[15] - Proceeds from the line of credit increased to $102,851,000 from $101,365,000, reflecting a slight growth in financing[15] - Payments on the line of credit rose to $104,092,000 from $96,640,000, indicating increased repayment activity[15] Accounts Receivable and Liabilities - The change in provision for losses on accounts receivable improved to a loss of $40,000 from $70,000 in 2023[15] - The company reported a decrease in changes in operating assets and liabilities, improving to $(3,801,000) from $(4,442,000) in the previous year[15]