The Recreation Vehicle Industry Association commissioned an Economic Impact Study on the RV industry, released on June 7, 2016. The study found that the RV industry contributes about $49.7 billion in economic output or 0.28 percent of the Gross Domestic Product. Through its production and distribution linkages, the industry impacts firms in 426 of the 440 sectors of the United States economy.
Nationwide, the industry is responsible for 216,170 jobs, both directly and inderectly, creating an economic impact of $37.5 billion. The full study results, along with each individual state and congressional district's economic impact is available on the website by clicking here .
Thu Oct 20, 2016
DUBUQUE, Iowa - Flexsteel Industries, Inc. has reported its first quarter financial results.
Among the highlights include a net sales figure of $112 million, net income of $4.8 million and a $6 million increase to the ending cash balance, now totaling $43 million.
Net sales ending Sept. 30, were $112 million for the quarter, the second highest first quarter, compared to $127 million in the prior year quarter, a decrease of 11.4 percent. Residential net sales for the quarter included about $3 million of product sales related to clearing the west coast port congestion. The current year quarter was negatively impacted by about $6 million primarily because of discontinuing select leather imports that failed to meet Flexsteel’s quality standards and delayed availability of technology components for new products. Casegoods net sales declined about $4 million reflecting continued weak demand at retail.
Gross margin as a percent of net sales for the quarter was 23.8 percent compared to 22 percent for the prior year quarter. Gross margin improvements were partially offset by lower absorption of fixed costs.
Selling, general and administrative expenses were 16.9 percent of net sales in the current year quarter, compared to 14.6 percent of net sales in the prior year quarter. SG&A expenses increased $1.1 million or 1 percent of net sales to enhance the consumer brand experience at retail. The company expended $0.5 million or 0.4 percent of net sales upgrading its business information system. The increase in SG&A as a percentage of net sales also reflects lower fixed cost leverage on decreased sales volume.
The effective income rate was 38.7 percent and 38 percent for the quarter, respectively.
The above factors resulted in net income of $4.8 million or $0.61 per share for the quarter, compared to $5.8 million or $0.74 per share in the prior year quarter.
Working capital (current assets less current liabilities) at September 30 was $146 million compared to $143 million at June 30. Primary changes in working capital include increases in cash of $5.9 million and accounts payable of $2.3 million and decreases in payroll and related items of $2.2 million, other current assets of $1.9 million and accounts receivable of $1.8 million.
For the quarter, capital expenditures were $4.5 million including $3.9 million for the upgrade of the company’s business information system. Dividend payments were $1.4 million for the company’s 298th consecutive dividend.
All earnings per share amounts are on a diluted basis.
The company believes that demand for furniture products in the United States will continue to be weak due to economic uncertainty for the remainder of the fiscal year, according to a press release. During the first half of fiscal year 2016, the company reported a $6 million increase in net sales related to clearing of west coast port congestion. Net sales for the company are expected to remain soft for the next fiscal quarter. The company is focusing on streamlining product introductions to increase sales and controlling discretionary spending.
For the remainder of fiscal year 2017, the company expects to have the following expenditures:
• $10 million for capital expenditures and $3 million as SG&A expense for upgrading its business information system to better meet market conditions, customer requirements and increase operating efficiency; and
• $3 million in operating capital expenditures.
The company believes it has adequate working capital and borrowing capabilities to meet these requirements.
The company remains committed to its core strategies, which include providing a wide range of quality product offerings and price points to the residential and commercial markets, combined with a conservative approach to business. The company will maintain its focus on a strong balance sheet through emphasis on cash flow and increasing profitability. The company believes these core strategies are in the best interest of its shareholders.