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RVIA Economic Impact Study

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 .

Flexsteel Reports 6.9 Percent Increase in First Quarter Net Sales

Fri Oct 20, 2017

145469176766681.pngDUBUQUE, Iowa – Flexsteel Industries, Inc. has reported first quarter results, which reflect a 6.9 percent increase in net sales, while the gross margin decreased as a result of rising costs.

Net sales were $119.8 million for the quarter ended Sept. 30, compared to net sales of $112.1 million in the prior year quarter, an increase of 6.9 percent. Higher residential net sales are primarily due to increased sales volume. Lower contract net sales are primarily due to changes in product mix.

Gross margin as a percent of net sales for the quarter was 21.8 percent compared to 23.8 percent for the prior year quarter. The decrease in gross margin as a percentage of net sales is primarily due to increased raw material costs partially offset by improved absorption of fixed costs on higher net sales.

Selling, general and administrative (SG&A) expenses were 15.2 percent of net sales in the current year quarter, compared to 16.9 percent of net sales in the prior year quarter. The current year quarter includes improved fixed cost leverage. The prior year quarter included expenses for enhancement of consumer brand experience at retail.

During the current quarter, the company completed a $6.5 million sale of a facility and recognized a pre-tax gain of $1.8 million. On an after-tax basis, the gain represents $1.1 million or $0.14 per share.

The above factors resulted in net income of $6.2 million or $0.78 per share for the quarter, compared to $4.8 million or $0.61 per share in the prior year quarter.

Working capital (current assets less current liabilities) was $164 million compared to $158 million in the prior quarter. Changes in working capital include increases of $5 million in inventory, $3 million in accounts receivable and $2 million in accounts payable. Accounts receivable increased due to increased sales volume. Inventory increased to improve stocking positions.

For the, the company paid $5.1 million for capital expenditures, including $3.2 million invested to upgrade the business information system.

On Sept. 12, the company announced a $0.22 per share quarterly dividend, a 10 percent dividend increase.

All earnings per share amounts are on a diluted basis.

Outlook

During the remainder of fiscal year 2018, the company expects moderate revenue growth including an intentional sales decrease to certain contract customers. The company expects to see continuing raw material cost increases into calendar year 2018 and it is focused on gross margin improvements through targeted sales price increases, improving product delivery and driving efficiencies in operations, according to a press release.

For the balance of the fiscal year, Flexsteel expects to capitalize $3 million related to business information system software and development, $12 million for the construction of a manufacturing facility and $6 million for operations. The company believes it has adequate working capital and borrowing capabilities to meet these requirements.

Flexsteel remains committed to its core strategies, which include providing a wide range of quality product offerings and price points to the residential and contract markets, combined with a conservative approach to business. It will maintain its focus on a strong balance sheet through emphasis on cash flow and increasing profitability and believes these core strategies are in the best interest of its shareholders, according to the press release.