Flexsteel(US:FLXS)2025-04-21 20:15Financial Performance - Net sales for the third quarter were $114.0 million, an increase of 6.3% compared to $107.2 million in the prior year quarter, marking the sixth consecutive quarter of year-over-year sales growth [4]. - Adjusted operating income for the quarter was $8.3 million, or 7.3% of net sales, compared to $5.6 million, or 5.2% of net sales in the prior year quarter [4]. - The company reported a GAAP net loss of $3.7 million, or ($0.71) per diluted share, compared to net income of $1.8 million, or $0.33 per diluted share in the prior year quarter [13]. - Net sales for the three months ended March 31, 2025, increased to $113,972 thousand, up 6.5% from $107,219 thousand in the same period of 2024 [25]. - The company reported a net loss of $3,742 thousand for the three months ended March 31, 2025, compared to net income of $1,803 thousand in the same period of 2024 [25]. - Adjusted operating income for the three months ended March 31, 2025, was $8,266 thousand, compared to $5,609 thousand for the same period in 2024, reflecting a 47.3% increase [28]. - Adjusted net income for the nine months ended March 31, 2025, was $15,737 thousand, up 111.5% from $7,443 thousand in the same period of 2024 [29]. - Adjusted diluted earnings per share for the three months ended March 31, 2025, was $1.13, compared to $0.67 for the same period in 2024, marking a 68.7% increase [30]. Cash Flow and Working Capital - Operating cash flow generated in the quarter was $12.3 million, resulting in an ending cash position of $22.6 million [4]. - The company ended the quarter with working capital of $103.4 million and no line of credit borrowings [14]. - The company had cash and cash equivalents of $22,634 thousand at the end of the period, significantly up from $4,570 thousand at the end of the same period in 2024 [26]. - Operating activities generated net cash of $21,353 thousand for the nine months ended March 31, 2025, compared to $24,361 thousand for the same period in 2024 [26]. Margins and Expenses - Gross margin for the quarter was 22.2%, an increase of 50 basis points from 21.7% in the prior year quarter, driven by higher sales and favorable product mix [7]. - Selling, general and administrative (SG&A) expenses decreased to 15.0% of net sales from 16.5% in the prior year quarter, reflecting cost savings and higher sales leverage [8]. Future Outlook - For the fourth quarter fiscal 2025, the company expects sales growth of (2.0%) to 5.0% and an operating margin of 6.0% to 7.3% compared to the prior year quarter [15]. - The company plans to continue investing in new products and innovation while managing spending prudently in response to changing consumer demand [5]. Impairment Charges - The company recorded a pre-tax impairment charge of $14.1 million related to its leased facility in Mexicali, Mexico, impacting GAAP operating results [10]. - The company incurred a right-of-use asset impairment of $14,079 thousand for the nine months ended March 31, 2025 [25]. Tax Rate - The effective tax rate for the three and nine months ended March 31, 2025, was 24.6%, compared to 30.0% and 30.1% for the same periods in 2024 [31].