Flexsteel Industries, Inc. reported significant financial improvements for the three months ended September 30, 2024, compared to the same period in 2023. Net sales increased by 9.9% to $104.0 million, up from $94.6 million, driven primarily by a $11.0 million increase in home furnishings sales through retail stores, which rose by 13.3%. However, e-commerce sales saw a decline of $1.6 million, attributed to softer consumer demand. The company's gross profit also improved, reaching $22.4 million, compared to $18.4 million in the prior year, resulting in a gross margin increase to 21.5% from 19.5%.
Operating income surged to $6.0 million, significantly higher than the $1.9 million reported in the previous year. This increase in profitability was reflected in net income, which rose to $4.1 million, or $0.74 per diluted share, compared to $752,000, or $0.14 per diluted share, in the same quarter of 2023. The effective tax rate decreased to 31.0% from 44.2%, contributing to the improved net income.
Flexsteel's total assets as of September 30, 2024, were $268.7 million, down from $274.5 million at the end of June 2024. Total liabilities also decreased to $114.0 million from $124.1 million, while total current liabilities fell to $53.3 million from $60.4 million. Shareholders' equity increased to $154.7 million, up from $150.4 million, supported by retained earnings rising to $177.3 million from $174.1 million.
The company reported net cash provided by operating activities of $2.4 million for the quarter, a turnaround from a net cash outflow of $1.8 million in the prior year. This improvement was driven by the increase in net income and a decrease in trade receivables. Additionally, Flexsteel's cash and cash equivalents rose to $5.7 million from $2.9 million year-over-year.
In terms of strategic developments, Flexsteel is actively marketing assets located in Dublin, Georgia, as part of a restructuring plan initiated during fiscal year 2024. The company continues to manage its capital structure effectively, with $3.6 million outstanding under its Credit Agreement and an effective interest rate of 6.68% on borrowings. The company declared a cash dividend of $0.17 per share, up from $0.15 in the previous year.
About FLEXSTEEL INDUSTRIES INC
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