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 .
Mon Feb 6, 2017
DUBUQUE, Iowa - Flexsteel Industries, Inc. has reported a second quarter decrease of 5.5 percent compared to 2015.
Net sales were $118.5 million for the quarter ended Dec. 31, 2016, compared to record net sales of $125.4 million in the prior year quarter, a decrease of 5.5 percent. Net sales were $230.6 million for the six months ended Dec. 31, 2016 compared to record net sales of $251.9 million in the prior year period, a decrease of 8.5 percent. Residential net sales for the six months ended Dec. 31, 2015 included about $6 million of product sales related to clearing the west coast port congestion. Residential casegoods net sales declined about $7 million reflecting continued weak demand at retail in the current six month period.
Gross margin as a percent of net sales for the quarter ended Dec. 31, 2016 was 22.6 percent compared to 22.1 percent for the prior year quarter. For the six months ended Dec. 31, 2016, gross margin as a percent of net sales was 23.1 percent compared to 22.1 percent for the prior year period. Gross margin improvements were partially offset by lower absorption of fixed costs on lower volume.
Selling, general and administrative (SG&A) expenses were 15.5 percent of net sales in both the current and prior year quarters. For the six month period ended Dec. 31, 2016, SG&A expenses were 16.1 percent of net sales compared to 15.1 percent of net sales in the prior period. The company expended $1.2 million or 0.5 percent of net sales upgrading the 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 37.7 percent and 37.5 percent for the six months ended Dec. 31, 2016 and 2015, respectively.
The above factors resulted in net income of $5.3 million or $0.68 per share for the quarter ended Dec. 31, 2016, compared to $5.4 million or $0.69 per share in the prior year quarter. For the six months ended Dec. 31, 2016, net income was $10.1 million or $1.29 per share compared to $11.1 million or $1.43 per share in the prior year period.
Working capital (current assets less current liabilities) at Dec. 31, 2016 was $148 million compared to $143 million at June 30, 2016. Primary changes in working capital include increases in cash of $4 million, inventory of $10 million and accounts payable of $9 million.
For the six months ended Dec. 31, 2016, the company paid $6 million for capital expenditures including $4.6 million invested to upgrade the business information system. Dividend payments were $2.9 million for the current six month period.
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 sporadic due to economic uncertainty for the remainder of the fiscal year, according to a press release. Net sales for the third and fourth fiscal quarters are expected to be comparable to prior fiscal year quarters. The company continues 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:
$12.8 million for capital expenditures and $2.5 million as SG&A expense for upgrading the business information system to better meet market conditions, customer requirements and increase operating efficiency; and
$1.6 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, according to a press release.