Flexsteel(US:FLXS)2025-04-23 21:14Financial Performance - Net sales for the quarter ended March 31, 2025, were $114.0 million, an increase of 6.3% compared to $107.2 million in the prior year quarter[57] - For the nine months ended March 31, 2025, net sales were $326.5 million, an increase of 8.1% from $301.9 million in the prior-year period[67] - Net loss for the quarter ended March 31, 2025, was $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[65] Operational Metrics - Home furnishings backlog increased by 25.8% to $78.3 million as of March 31, 2025, compared to $61.5 million in the prior year quarter[58] - Gross margin for the quarter ended March 31, 2025, was 22.2%, up 50 basis points from 21.7% in the prior year quarter[59] - Selling, general and administrative expenses decreased to $17.1 million, or 15.0% of net sales, compared to 16.5% in the prior year quarter[60] Cash Flow and Financing - Net cash provided by operating activities for the nine months ended March 31, 2025, was $21.4 million, down from $24.4 million in the prior year[77] - The company completed the sale of its Dublin, Georgia facility, recording a pre-tax gain of $5.0 million during the nine-month period[70] - Income tax expense for the nine months ended March 31, 2025, was $3.3 million, with an effective rate of 25.6%, compared to $2.5 million and 30.8% in the prior-year period[73] Debt and Credit Facilities - As of March 31, 2025, there were no outstanding borrowings under the Credit Agreement, exclusive of fees and letters of credit, with letters of credit outstanding totaling $0.9 million[86] - The Credit Agreement provides for up to an $85 million revolving line of credit, with a financial covenant to maintain a fixed coverage ratio of not less than 1.00 to 1.00[83] - The interest rate on borrowings under the amended Credit Agreement is based on the Secured Overnight Financing Rate (SOFR) plus 1.36% to 1.61%, with an effective interest rate of 5.72% as of March 31, 2025[85] Foreign Currency and Market Risks - The Company does not employ any foreign currency hedges against operating expense exposure, which could increase costs if the U.S. dollar weakens against the Mexican Peso[89] - During the third quarter of fiscal year 2025, the Company utilized a derivative instrument to reduce exposure to foreign currency risk, which expired on March 31, 2025, without being utilized[90] - The Company believes that changes in market risk factors, such as interest rates and foreign exchange rates, will not cause material fluctuations in its results of operations or cash flows[88] Regulatory and Contractual Obligations - As of March 31, 2025, there have been no material changes to the Company's contractual obligations presented in the Annual Report for the year ended June 30, 2024[87] - The Company is subject to risks related to furniture product importation, including government regulations, tariffs, and fluctuations in the value of the U.S. dollar[88]