Document_And_Entity_Informatio
Document And Entity Information | 12 Months Ended | |
Jun. 30, 2014 | Sep. 30, 2013 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | FLEXSTEEL INDUSTRIES INC | |
Entity Central Index Key | 37472 | |
Current Fiscal Year End Date | -24 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,178,433 | |
Entity Well-known Seasoned Issuer | No | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
ASSETS | ||
Cash | $10,625 | $10,934 |
Trade receivables - less allowance for doubtful accounts: 2012, $0; 2011, $2,000 | 38,926 | 36,075 |
Inventories | 97,131 | 92,417 |
Deferred income taxes | 5,100 | 4,970 |
Other | 4,908 | 4,805 |
Total current assets | 156,690 | 149,201 |
NONCURRENT ASSETS: | ||
Property, plant and equipment, net | 31,696 | 32,145 |
Deferred income taxes | 1,420 | 1,190 |
Other assets | 10,314 | 10,003 |
TOTAL | 200,120 | 192,539 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts payable - trade | 16,262 | 13,927 |
Accrued liabilities: | ||
Payroll and related items | 5,762 | 7,836 |
Insurance | 4,589 | 4,667 |
Other | 12,829 | 9,072 |
Total current liabilities | 39,442 | 35,502 |
LONG-TERM LIABILITIES: | ||
Deferred compensation | 2,759 | 2,414 |
Other liabilities | 3,523 | 3,386 |
Total liabilities | 45,724 | 41,302 |
SHAREHOLDERS' EQUITY: | ||
Cumulative preferred stock - $50 par value; authorized 60,000 shares; outstanding - none | ||
Undesignated (subordinated) stock - $1 par value; authorized 700,000 shares; outstanding - none | ||
Common stock - $1 par value; authorized 15,000,000 shares; outstanding 2012, 0,000,000 shares; 2011, 6,710,612 shares | 7,178 | 7,107 |
Additional paid-in capital | 11,200 | 10,615 |
Retained earnings | 137,298 | 134,606 |
Accumulated other comprehensive loss | -1,280 | -1,091 |
Total shareholders' equity | 154,396 | 151,237 |
TOTAL | $200,120 | $192,539 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $1,635 | $1,560 |
Cumulative Preferred stock, par value | $50 | $50 |
Cumulative Preferred stock, authorized | 60,000 | 60,000 |
Cumulative Preferred stock, outstanding | 0 | 0 |
Undesignated (subordinated) stock, par value | $1 | $1 |
Undesignated (subordinated) stock, authorized | 700,000 | 700,000 |
Undesignated (subordinated) stock, outstanding | 0 | 0 |
Common stock, par value | $1 | $1 |
Common stock, authorized | 15,000,000 | 15,000,000 |
Common stock, outstanding | 7,178,433 | 7,106,723 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Statements Of Operations [Abstract] | ||
NET SALES | $104,348 | $91,237 |
COST OF GOODS SOLD | -80,703 | -70,136 |
GROSS MARGIN | 23,645 | 21,101 |
SELLING, GENERAL AND ADMINISTRATIVE | -18,209 | -16,710 |
OPERATING INCOME (LOSS) | 5,436 | 4,391 |
OTHER INCOME (EXPENSE): | ||
Interest and other income | 502 | 161 |
INCOME (LOSS) BEFORE INCOME TAXES | 5,938 | 4,552 |
INCOME TAX (PROVISION) BENEFIT | -2,170 | -1,680 |
NET INCOME (LOSS) | $3,768 | $2,872 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||
Basic | 7,125 | 6,938 |
Diluted | 7,432 | 7,241 |
EARNINGS (LOSS) PER SHARE OF COMMON STOCK: | ||
Basic | $0.53 | $0.41 |
Diluted | $0.51 | $0.40 |
CASH DIVIDENDS DECLARED PER COMMON SHARE | $0.15 | $0.15 |
Consolidated_Statements_Of_Com
Consolidated Statements Of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Comprehensive Income (Loss) [Abstract] | ||
Net income | $3,768 | $2,872 |
Unrealized (losses) gains on securities in supplemental retirement plans | 139 | 202 |
Reclassification of Realized gain on supplemental retirement plans to other income | -444 | -87 |
Other Comprehensive Income(Loss) Before Taxes | -305 | 115 |
Income tax benefit (expense) related to securities in supplemental retirement plans gains (losses) | 116 | -44 |
Other comprehensive (loss) income, net of tax | -189 | 71 |
Comprehensive income | $3,579 | $2,943 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
OPERATING ACTIVITIES: | ||
Net income (loss) | $3,768 | $2,872 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 1,011 | 792 |
Deferred income taxes | -244 | -19 |
Stock-based compensation expense | 151 | 312 |
Excess tax benefit from stock-based payment arrangements | -46 | |
Provision for losses on accounts receivable | 86 | 30 |
Gain on disposition of capital assets | -5 | -1 |
Changes in operating assets and liabilities: | ||
Trade receivables | -2,937 | -2,221 |
Inventories | -4,714 | -2,851 |
Other current assets | -413 | -320 |
Other assets | 17 | -81 |
Accounts payable - trade | 2,445 | -1,295 |
Accrued liabilities | 1,570 | -799 |
Other long-term liabilities | 137 | -284 |
Supplemental retirement plans | 417 | 348 |
Net cash provided by operating activities | 1,243 | -3,517 |
INVESTING ACTIVITIES: | ||
Purchases of investments | -574 | -217 |
Proceeds from sales of investments | 250 | 59 |
Proceeds from sale of capital assets | 11 | 1 |
Capital expenditures | -679 | -3,005 |
Net cash (used in) provided by investing activities | -992 | -3,162 |
FINANCING ACTIVITIES: | ||
Dividends paid | -1,066 | -1,036 |
Proceeds from issuance of common stock | 460 | 273 |
Excess tax benefit from stock-based payment arrangements | 46 | |
Net cash used in financing activities | -560 | -763 |
Increase (decrease) in cash and cash equivalents | -309 | -7,442 |
Cash and cash equivalents at beginning of year | 10,934 | 13,970 |
Cash and cash equivalents at end of year | 10,625 | 6,528 |
SUPPLEMENTAL INFORMATION CASH PAID DURING THE PERIOD FOR: | ||
Income taxes paid (refunded) | 278 | 773 |
Capital Expenditures Incurred but Not yet Paid | $151 | $1,549 |
Summary_Of_Significant_Account
Summary Of Significant Accounting Policies | 3 Months Ended | |
Sep. 30, 2013 | ||
Summary Of Significant Accounting Policies [Abstract] | ||
Summary Of Significant Accounting Policies | ||
1 | The consolidated financial statements included herein have been prepared by Flexsteel Industries, Inc. and Subsidiaries (the “Company” or “Flexsteel”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished in the consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such consolidated financial statements. Operating results for the three-month period ended September 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2014. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2013, appropriately represent, in all material respects, the current status of accounting policies and are incorporated by reference. | |
ACCOUNTING DEVELOPMENTS – In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2013-02, which requires additional disclosures on the effect of significant reclassifications out of accumulated other comprehensive income. The ASU requires a company that reports other comprehensive income to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference to other required disclosures that provide additional details about those amounts. This ASU is effective for fiscal years beginning after December 15, 2012, and was adopted by the Company on July 1, 2013. The Company’s adoption of this ASU resulted in additional disclosure within the Company’s consolidated statements of comprehensive income. | ||
DESCRIPTION OF BUSINESS – Flexsteel Industries, Inc. and subsidiaries (the “Company”) was incorporated in 1929 and is one of the oldest and largest manufacturer, importer and marketer of residential and commercial upholstered and wood furniture products in the United States. Product offerings include a wide variety of upholstered and wood furniture such as sofas, loveseats, chairs, reclining and rocker-reclining chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs and bedroom furniture. The Company’s products are intended for use in home, office, hotel, healthcare and other commercial applications. A featured component in most of the upholstered furniture is a unique steel drop-in seat spring from which our name “Flexsteel” is derived. The Company distributes its products throughout the United States through the Company’s sales force and various independent representatives. | ||
Inventories
Inventories | 3 Months Ended | |||||
Sep. 30, 2013 | ||||||
Inventories [Abstract] | ||||||
Inventories | 2. INVENTORIES | |||||
The Company values inventory at the lower of cost or net realizable value. Raw steel is valued on the last-in, first-out (“LIFO”) method. Other inventories are valued on the first-in, first-out (“FIFO”) method. Inventories valued on the LIFO method would have been approximately $1.6 million and $1.7 million higher at September 30, 2013 and June 30, 2013, respectively, if they had been valued on the FIFO method. At September 30, 2013 and June 30, 2013 the total value of LIFO inventory was $3.2 million and $2.6 million, respectively. A comparison of inventories is as follows: | ||||||
(in thousands) | September 30, | June 30, | ||||
2013 | 2013 | |||||
Raw materials | $ | 11,226 | $ | 10,684 | ||
Work in process and finished parts | 6,070 | 5,410 | ||||
Finished goods | 79,835 | 76,323 | ||||
Total | $ | 97,131 | $ | 92,417 | ||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2013 | |
Fair Value Measurements [Abstract] | |
Fair Value Disclosures [Text Block] | 3. FAIR VALUE MEASUREMENTS |
The Company’s cash, accounts receivable, other current assets, accounts payable and certain accrued liabilities are carried at amounts which reasonably approximate their fair value due to their short-term nature. Generally accepted accounting principles on fair value measurement for certain financial assets and liabilities require that each asset and liability carried at fair value be classified into one of the following categories: Level 1: Quoted market prices in active markets for identical assets and liabilities; Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data; or Level 3: Unobservable inputs that are not corroborated by market data. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period. | |
The Company maintains supplemental retirement plans, collectively referred to as the Supplemental Plan, which provides for additional annual defined contributions toward retirement benefits to certain of the Company’s executive officers. Funds of the Supplemental Plan are held in a Rabbi Trust. The assets held in the Rabbi Trust are not available for general corporate purposes. The Rabbi Trust is subject to creditor claims in the event of insolvency, but otherwise must be used only for purposes of providing benefits under the plans. As of September 30, 2013, the Company’s Supplemental Plan assets, held in the Rabbi Trust, were invested in stock and bond funds and are recorded in the Consolidated Balance Sheets at fair market value. As of September 30, 2013, the Supplemental Plan Assets were $5.5 million, with $3.0 million of the Supplemental Plan assets classified as “Other Current Assets” and $2.5 million as “Other Assets” in the Consolidated Balance Sheets. As of June 30, 2013, the Supplemental Plan assets were $5.8 million, with $3.3 million classified as “Other Current Assets” and $2.5 million classified as “Other Assets” in the Consolidated Balance Sheets. These assets are classified as Level 2 in accordance with fair value accounting as described above. | |
Credit_Arrangements
Credit Arrangements | 3 Months Ended |
Sep. 30, 2013 | |
Credit Arrangements [Abstract] | |
Credit Arrangements | |
4. CREDIT ARRANGEMENTS | |
The Company maintains a credit agreement which provides short-term working capital financing up to $10.0 million with interest of LIBOR plus 1%, including up to $4.0 million of letters of credit. Letters of credit outstanding at September 30, 2013 totaled $2.7 million, leaving borrowing availability of $7.3 million. The Company did not utilize any borrowing availability under the credit facility during the period other than the aforementioned letters of credit. The credit agreement expires June 30, 2014. At September 30, 2013, the Company was in compliance with all of the financial covenants contained in the credit agreement. | |
The Company maintains an unsecured $8.0 million line of credit, with interest at prime minus 1%, and where its routine banking transactions are processed. The Company did not utilize any borrowing availability during the period and no amount was outstanding on the line of credit at September 30, 2013. | |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||
Sep. 30, 2013 | ||||
Earnings Per Share [Abstract] | ||||
Earnings Per Share | 5. EARNINGS PER SHARE | |||
Basic earnings per share (EPS) of common stock is based on the weighted-average number of common shares outstanding during each period. Diluted earnings per share of common stock includes the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options and shares associated with the long-term management incentive compensation plan. The Company calculates the dilutive effect of outstanding options using the treasury stock method. Anti-dilutive shares are not included in the computation of diluted EPS when their exercise price was greater than the average closing market price of the common shares. The Company calculates the dilutive effect of shares related to the long-term management incentive compensation plan based on the number of shares, if any, that would be issuable if the end of the fiscal period were the end of the contingency period. | ||||
In computing EPS for the quarters ended September 30, 2013 and 2012, net income as reported for each respective period is divided by the fully diluted weighted average number of shares outstanding: | ||||
September 30, | ||||
(in thousands) | 2013 | 2012 | ||
Basic shares | 7,125 | 6,938 | ||
Potential common shares: | ||||
Stock options | 294 | 272 | ||
Long-term incentive plan | 13 | 31 | ||
307 | 303 | |||
Diluted shares | 7,432 | 7,241 | ||
Anti-dilutive shares | - | - | ||
Litigation
Litigation | 3 Months Ended |
Sep. 30, 2013 | |
Litigation [Abstract] | |
Litigation | 6. LITIGATION |
Indiana Civil Litigation – A Complaint for Damages and Injunctive Relief and Request for Jury Trial was filed on March 3, 2011 in Elkhart, Indiana Superior Court by Leo VanNorman, et al, plaintiffs vs. Flexsteel Industries, Inc., et al, defendants. The complaint alleges that the source of groundwater contamination underneath plaintiffs’ current or former residences is two adjacent properties, in Elkhart, Indiana, once owned by the Company. The VanNorman case is set for a Phase 1 trial in May 2014 on the issue of cause or contribution to the Elkhart contamination. A subsequent Complaint for Damages under RICO and RPTL, and Injunctive Relief under RCRA, titled Dennis and Darlene Knoll, et al, vs. Flexsteel Industries, Inc., et al, was filed on May 5, 2012 in United States District Court Northern District of Indiana South Bend Division by a subgroup of the state court plaintiffs, as well as the current owner of one of the properties once owned by the Company. The District Court dismissed one of the two RCRA claims in March 2013, and dismissed both RICO claims in June 2013. One RCRA claim and a RPTL claim remain pending in the Knoll case. Relief sought in these complaints includes payment to Plaintiffs for their damages and attorneys’ fees and costs, payment to remove the contamination, payment for medical monitoring, and punitive damages. Based on policy language and jurisdiction, insurance coverage is in question. Flexsteel has filed an appeal to the Iowa Supreme Court regarding two adverse opinions of an Iowa District Court regarding coverage issues. The Company does not believe that it caused or contributed to the contamination. | |
Plaintiffs have not identified a dollar amount of their alleged damages. Therefore, we are unable to estimate a range of reasonably possible outcomes or losses at this time. Accordingly, no accrual related to this matter has been recorded in the September 30, 2013 financial statements. During the quarters ended September 30, 2013 and 2012, legal and other related expenses of $1.0 million, $0.6 million, respectively, have been incurred responding to the state and federal lawsuits, as well as in pursuing insurance coverage. These costs are included in selling, general and administrative expense in the consolidated statements of income. | |
Other Proceedings – From time to time, the Company is subject to various other legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of the Company’s business. The Company does not consider any of such other proceedings that are currently pending, individually or in the aggregate, to be material to its business or likely to result in a material effect on its consolidated operating results, financial condition, or cash flows. | |
Accounting_Developments
Accounting Developments | 3 Months Ended |
Sep. 30, 2013 | |
Accounting Developments [Abstract] | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | ACCOUNTING DEVELOPMENTS – In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2013-02, which requires additional disclosures on the effect of significant reclassifications out of accumulated other comprehensive income. The ASU requires a company that reports other comprehensive income to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference to other required disclosures that provide additional details about those amounts. This ASU is effective for fiscal years beginning after December 15, 2012, and was adopted by the Company on July 1, 2013. The Company’s adoption of this ASU resulted in additional disclosure within the Company’s consolidated statements of comprehensive income. |
Summary_Of_Significant_Account1
Summary Of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2013 | |
Summary Of Significant Accounting Policies [Abstract] | |
Accounting Developments | ACCOUNTING DEVELOPMENTS – In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2013-02, which requires additional disclosures on the effect of significant reclassifications out of accumulated other comprehensive income. The ASU requires a company that reports other comprehensive income to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income. For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference to other required disclosures that provide additional details about those amounts. This ASU is effective for fiscal years beginning after December 15, 2012, and was adopted by the Company on July 1, 2013. The Company’s adoption of this ASU resulted in additional disclosure within the Company’s consolidated statements of comprehensive income. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||
Sep. 30, 2013 | ||||||
Inventories [Abstract] | ||||||
Comparison Of Inventories | ||||||
(in thousands) | September 30, | June 30, | ||||
2013 | 2013 | |||||
Raw materials | $ | 11,226 | $ | 10,684 | ||
Work in process and finished parts | 6,070 | 5,410 | ||||
Finished goods | 79,835 | 76,323 | ||||
Total | $ | 97,131 | $ | 92,417 | ||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||
Sep. 30, 2013 | ||||
Earnings Per Share [Abstract] | ||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ||||
September 30, | ||||
(in thousands) | 2013 | 2012 | ||
Basic shares | 7,125 | 6,938 | ||
Potential common shares: | ||||
Stock options | 294 | 272 | ||
Long-term incentive plan | 13 | 31 | ||
307 | 303 | |||
Diluted shares | 7,432 | 7,241 | ||
Anti-dilutive shares | - | - | ||
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
Inventories [Abstract] | ||
Raw materials | $11,226,000 | $10,684,000 |
Work in process and finished parts | 6,070,000 | 5,410,000 |
Finished goods | 79,835,000 | 76,323,000 |
Total inventories | 97,131,000 | 92,417,000 |
Inventories valued on the FIFO method | 1,600,000 | 1,700,000 |
Inventories valued on the LIFO method | $3,200,000 | $2,600,000 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
In Millions, unless otherwise specified | ||
Deferred compensation plan assets | $5.50 | $5.80 |
Other Current Assets [Member] | ||
Deferred compensation plan assets | 3 | 3.3 |
Other Assets [Member] | ||
Deferred compensation plan assets | $2.50 | $2.50 |
Credit_Arrangements_Details
Credit Arrangements (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 |
Credit agreement capacity | $10 |
Interest rate over LIBOR | 1.00% |
Interest rate under prime rate | 1.00% |
Letters Of Credit [Member] | |
Credit agreement capacity | 4 |
Line of Credit Facility, Amount Outstanding | 2.7 |
Line of Credit Facility, Remaining Borrowing Capacity | 7.3 |
Unsecured [Member] | |
Credit agreement capacity | $8 |
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ||
Basic | 7,125 | 6,938 |
Stock options | 294 | 272 |
Long-term incentive plan | 13 | 31 |
Potential common shares, total | 307 | 303 |
Diluted | 7,432 | 7,241 |
Litigation_Details
Litigation (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Litigation [Abstract] | ||
Legal and other related expenses | $1 | $0.60 |