Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2018 | Jan. 20, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | FLEXSTEEL INDUSTRIES INC | |
Entity Central Index Key | 37,472 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 7,890,202 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Trading Symbol | FLXS |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 25,581 | $ 27,750 |
Investments | 7,985 | 15,951 |
Trade receivables - less allowances: December 31, 2018, $100; June 30, 2018, $1,100 | 42,685 | 41,253 |
Inventories | 93,905 | 96,204 |
Other | 10,419 | 8,476 |
Total current assets | 180,575 | 189,634 |
NONCURRENT ASSETS: | ||
Property, plant and equipment, net | 102,614 | 90,725 |
Deferred income taxes | 1,495 | 1,455 |
Other assets | 2,406 | 2,479 |
TOTAL | 287,090 | 284,293 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts payable - trade | 18,978 | 17,228 |
Accrued liabilities: | ||
Payroll and related items | 5,340 | 5,459 |
Insurance | 4,432 | 4,439 |
Accrued Advertising, Current | 4,954 | 4,192 |
Accrued Environmental Loss Contingencies, Current | 3,600 | 3,600 |
Other | 6,362 | 6,011 |
Total current liabilities | 43,666 | 40,929 |
LONG-TERM LIABILITIES: | ||
Other liabilities | 1,638 | 1,666 |
Total liabilities | 45,304 | 42,595 |
SHAREHOLDERS' EQUITY: | ||
Stockholders' Equity, Total | 241,786 | 241,698 |
Common stock - $1 par value; authorized 15,000,000 shares; outstanding December 31, 2018, 7,888,702 shares; outstanding June 30, 2018, 7,868,298 shares | 7,889 | 7,868 |
Additional paid-in capital | 27,012 | 26,321 |
Retained earnings | 208,945 | 209,553 |
Accumulated other comprehensive loss | (2,060) | (2,044) |
TOTAL | $ 287,090 | $ 284,293 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Consolidated Balance Sheets [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 100 | $ 1,100 |
Common stock, par value | $ 1 | $ 1 |
Common stock, authorized | 15,000,000 | 15,000,000 |
Common stock, outstanding | 7,888,702 | 7,868,298 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements Of Operations [Abstract] | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 118,352 | $ 129,392 | $ 231,839 | $ 249,226 |
Cost of Goods and Services Sold | (96,878) | (101,990) | (188,574) | (195,684) |
Gross margin | 21,474 | 27,402 | 43,265 | 53,542 |
Selling, general and administrative | (19,371) | (19,679) | (39,567) | (37,915) |
Gain on sale of facility | 1,835 | |||
Operating income (loss) | 2,103 | 7,723 | 3,698 | 17,462 |
Interest and other income | 58 | 158 | 239 | 299 |
Income before income taxes | 2,161 | 7,881 | 3,937 | 17,761 |
Income tax provision | (595) | (1,660) | (1,075) | (5,360) |
Net income (loss) | $ 1,566 | $ 6,221 | $ 2,862 | $ 12,401 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: | ||||
Basic | 7,885 | 7,847 | 7,880 | 7,839 |
Diluted | 7,917 | 7,937 | 7,922 | 7,931 |
EARNINGS (LOSS) PER SHARE OF COMMON STOCK: | ||||
Basic | $ 0.20 | $ 0.79 | $ 0.36 | $ 1.58 |
Diluted | $ 0.20 | $ 0.78 | $ 0.36 | $ 1.56 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Abstract] | ||||
Net income | $ 1,566 | $ 6,221 | $ 2,862 | $ 12,401 |
Unrealized (losses) gains on securities | 64 | (59) | 82 | (84) |
Reclassification of realized gain to other income | (107) | 40 | (103) | 75 |
Other Comprehensive Income (Loss) Before Taxes | (43) | (19) | (21) | (9) |
Income tax benefit (expense) related to securities gains (losses) | 11 | 8 | 6 | 4 |
Other comprehensive (loss) income, net of tax | (32) | (11) | (15) | (5) |
Comprehensive income | $ 1,534 | $ 6,210 | $ 2,847 | $ 12,396 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ 2,862 | $ 12,401 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 3,734 | 3,633 |
Deferred income taxes | (35) | 720 |
Stock-based compensation expense | 871 | 592 |
Provision for losses on accounts receivable | (86) | (75) |
Gain on disposition of capital assets | (42) | (1,794) |
Changes in operating assets and liabilities: | ||
Trade receivables | (1,346) | (5,014) |
Inventories | 2,299 | (10,827) |
Other current assets | (1,980) | (391) |
Other assets | ||
Accounts payable - trade | 3,590 | 1,584 |
Accrued liabilities | 946 | 325 |
Other long-term liabilities | 117 | 146 |
Net cash provided by operating activities | 10,930 | 1,300 |
INVESTING ACTIVITIES: | ||
Purchases of investments | (12,572) | (20,099) |
Proceeds from sales of investments | 20,515 | 18,045 |
Proceeds from sale of capital assets | 42 | 6,152 |
Capital expenditures | (17,462) | (12,902) |
Net cash (used in) provided by investing activities | (9,477) | (8,804) |
FINANCING ACTIVITIES: | ||
Dividends paid | (3,463) | (3,290) |
Proceeds from issuance of common stock | 52 | 51 |
Shares withheld for employee tax obligations | (211) | (552) |
Net cash used in financing activities | (3,622) | (3,791) |
Increase (decrease) in cash and cash equivalents | (2,169) | (11,295) |
Cash and cash equivalents at beginning of year | 27,750 | 28,874 |
Cash and cash equivalents at end of year | 25,581 | 17,579 |
SUPPLEMENTAL INFORMATION CASH PAID DURING THE PERIOD FOR: | ||
Income taxes paid (refunded) | 1,430 | 5,050 |
Capital Expenditures Incurred but Not yet Paid | $ 2,244 | $ 1,826 |
Accounting Developments
Accounting Developments | 6 Months Ended |
Dec. 31, 2018 | |
Accounting Developments [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 1. BASIS OF PRESENTATION – 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 and six months ended December 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2019. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America 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, 2018, appropriately represent, in all material respects, the current status of accounting policies and are incorporated by reference. DESCRIPTION OF BUSINESS – Flexsteel Industries, Inc. and Subsidiaries (the “Company”) incorporated in 1929 is celebrating its 125th anniversary of the Company’s founding in 1893. Flexsteel Industries, Inc. is one of the oldest and largest manufacturers, importers and marketers of residential and contract upholstered and wooden furniture products in the United States. Over the generations the Company has built a committed retail and consumer following based on its patented, guaranteed-for-life Blue Steel Spring TM – the all-riveted, high-carbon, steel-banded seating platform that gives upholstered and leather furniture the strength and comfort to last a lifetime. With offerings for use in home, hotel, healthcare, recreational vehicle, marine and office, the Company distributes its furniture throughout the United States & Canada through the Company’s sales force and various independent representatives. A DOPTED A CCOUNTING PRONOUNCEMENTS - In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which provides a framework for the recognition of revenue, with the objective that recognized revenues properly reflect amounts an entity is entitled to receive in exchange for goods and services. The guidance is effective for annual reporting periods beginning after December 15, 2017, the Company’s fiscal year 2019. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company adopted the modified retrospective method on July 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements as revenue is recognized when product ownership and risk of loss is transferred to the customer, collectability is probable and the Company has no remaining performance obligations. Thus, the timing of revenue recognition is not impacted by the new standard. The Company’s revenues result from the sale of goods and reflect the consideration to which the Company expects to be entitled. The Company records revenue based on a five-step model in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"). For its customer contracts, typically purchase orders, the Company identifies the performance obligations (goods), determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when the performance obligation is transferred to the customer. A good is transferred when the customer obtains control of that good and risk of loss transfers at that point in time. Provisions for customer volume rebates, product returns, discounts and allowances are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded. Such provisions are calculated based upon agreed percentages. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent there is a distinct good or service and evidence of the fair value of the advertising, in which case the expense is classified as selling, general and administrative expense (SG&A). The Company has a limited lifetime warranty on all products. The Company does not offer the option to purchase warranties. The Company accounts for warranties under ASC Subtopic 460, Guarantees , and not as variable consideration related to revenue. Occasionally the Company receives deposits from customers before it has transferred control of the product to customers, resulting in contract liabilities. These contract liabilities are reported within “Accounts payable - trade” in the consolidated balance sheets. As of June 30, 2018, the Company had $2.2 million of customer deposits. As of December 31 , 2018, the Company had $1.9 million of customer deposits. Upon adoption of ASC 606, the Company elected the following practical expedients and policy elections: · Costs for shipping and handling activities that occur before the customer obtains control of the product are accounted for as fulfillment activities. Accordingly, these expenses are recorded at the same time the Company recognizes revenue. · Incremental costs of obtaining a contract, specifically commissions, are recorded as an SG&A expense when incurred. · All taxes imposed on and concurrent with revenue-producing transactions and collected by the Company from a customer, including sales, use, excise, and franchise taxes are excluded from the measurement of the transaction price. These accounting treatments are consistent with the Company’s policies prior to adoption of ASC 606. Therefore, there will be no impact to the consolidated financial statements. Adoption of this standard did not result in significant changes to the Company’s accounting policies, business processes, systems or controls, or have a material impact on financial position, results from operations and cash flows or related disclosures. As such, prior period financial statements were not adjusted. The f ollowing table disaggregates the Company’s net sales by product cat egory for the quarter ended December 31 , (in millions): 2018 2017 Residential $ 99.4 $ 110.8 Contract 19.0 18.6 Total $ 118.4 $ 129.4 The f ollowing table disaggregates the Company’s net sales by product cat egory for the six months ended December 31 , (in millions): 2018 2017 Residential $ 195.4 $ 212.6 Contract 36.4 36.6 Total $ 231.8 $ 249.2 UNADOPTED ACCOUNTING PRONOUNCEMENTS – In February 2016, the FASB issued ASU 2016-02, Leases, which will require lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases and will expand disclosure requirements. The new guidance was issued to increase transparency and comparability among companies. In July 2018, the FASB approved an amendment to the new guidance that allows companies the option of using the effective date of the new standard as the initial application (at the beginning of the period in which is it adopted, rather than at the beginning of the earliest comparative period) and to recognize the effects of applying the new ASU as a cumulative effect adjustment to the opening balance sheet or retained earnings. Based on the effective dates, the Company expects to adopt the new guidance in the first quarter of fiscal 2020 using the new transition election to not restate comparative periods. The Company is still evaluating the impact to its consolidated financial statements and footnote disclosures. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2018 | |
Inventories [Abstract] | |
Inventories | 2. INVENTORIES A comparison of inventories is as follows: (in thousands) December 31, June 30, 2018 2018 Raw materials $ 13,615 $ 13,335 Work in process and finished parts 7,590 7,195 Finished goods 72,700 75,674 Total $ 93,905 $ 96,204 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements [Abstract] | |
Fair Value Disclosures [Text Block] | 5. FAIR VALUE MEASUREMENTS The Company’s cash and cash equivalents , investments, 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. G AAP 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 n ot 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 purchases available-for-sale securities, U.S. Treasury bills and U.S. Agencies, which are recorded at fair market value. These securities are classified as “Investments” in the consolidated balance sheets. Unrealized gains or losses are recorded in “Accumulated other comprehensive loss” in the consolidated balance sheets. As of December 31, 2018 , the fair market value and book value of the investments are $8.0 million. As of June 30, 2018, the fair market value and book value of the investments were $16.0 million. These assets are classified as Level 1 in accordance with fair value measurements described above. |
Credit Arrangements
Credit Arrangements | 6 Months Ended |
Dec. 31, 2018 | |
Credit Arrangements [Abstract] | |
Credit Arrangements | 4. CREDIT ARRANGEMENTS The Company maintain s a n unsecured credit agreement that provide s short-term working capital financing up to $ 10.0 million with interest of LIBOR plus 1% ( 4.50% at December 31, 2018 ), including up to $ 4.0 million of letters of credit. Letters of credit outstanding at December 31, 2018 totaled $1.3 million . Other than the outstanding letters of credit, the Company did not utilize borrowing availability under the credit facility, leaving borrowing availability of $8.7 million as of December 31, 2018 . The credit agreement expire s June 30 , 201 9 . At December 31, 2018 , the Company was in compliance with all of the financial covenants co ntained in the credit agreement . The Company maintains an additional unsecured $10.0 million line of credit, with interest at prime minus 2% ( 3.5% at December 31, 2018 ) . No amount was outstanding on the line of credit at December 31, 2018 . This line of credit matures December 31, 2019. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 5. INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”), was enacted, which, among numerous provisions reduced the federal statutory corporate tax rate from 35% to 21% . Based on the provisions of the Tax Reform, the Company remeasured its deferred tax assets and liabilities and adjusted its estimated annual federal income tax rate to incorporate the lower corporate tax rate into the tax provision. During the quarters ended December 31, 2018 and 2017, the effective tax rates were 27.5% and 21.1% , respectfully. The prior year quarter was positively impacted by a one-time adjustment for the passage of the Tax Reform. During the six months ended December 31, 2018 and 2017, the effective tax rates were 27.3% and 30.2% , respectively. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 5. STOCK-BASED COMPENSATION The Company has two stock-based compensation methods available when determining employee compensation. (1) Long-Term Incentive Compensation Plans Long-Term Incentive Compensation Plan The Long-Term Incentive Compensation Plan provides for shares of common stock to be awarded to officers and key employees based on performance targets set by the Compensation Committee of the Board of Directors (the “Committee”). T he Company’s shareholders previously approved 700,000 shares to be issued under the plan. As of December 31, 2018 , 102,183 shares have been issued. The C ommittee selected fully-diluted earnings per share as the performance goal for the three-year performance period s July 1, 2016 – June 30, 2019 (2017-2019) and July 1, 2017 – June 30, 2020 (2018-2020), and July 1, 2018 – June 30, 2021 (2019-2021) . The Committee also selected total shareholder return as a performance goal for the executive officers for the three-year performance periods 2017-2019, 2018-2020 and 2019-2021. Stock awards will be issued to participants as soon as practicable following the end of the performance periods subject to verification of results and C ommittee approval. The compensation cost related to the number of shares to be granted under each performance period is fixed on the grant date, which is the date the performance period begins. During the quarters and six months ended December 31, 2018 and 2017, the Company recorded no plan expense. If the target performance goals for 2017-2019 , 2018-2020 and 2019-2021 plans would be achieved, the total amount of compensation cost recognized over the requisite performance periods would be $0.9 million , $0.6 million and $0.4 million, respectively. (2) Stock Plans Omnibus Stock Plan The Omnibus Stock Plan is for key employees, officers and directors and provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and perfor mance units. T he Company’s shareholders previously approved 700,000 shares to be issued under the plan. Under the Omnibus Stock Plan, options are granted at an exercise price equal to the fair market value of the underlying common stock at the date of grant and exercisable for up to 10 years. It is the Company’s policy to issue new shares upon exercise of stock options. The Company accepts shares of the Company’s common stock as payment for the exercise price of options. Shares received as payment are retired upon receipt. During the quarter ended December 31, 2018, the Company issued options for 30,210 common shares and recorded expense of $0.1 million related to stock option grants. The Company did not issue options or record expense for the quarter ended December 31, 2017 . During the six months ended December 31, 2018 and 2017, the Company issued options for 66,305 and 21,439 common shares and recorded expense of $0.4 million and $0.2 million related to stock option grants, respectively. Under the Omnibus Stock Plan, the Company issued 3,675 and 1,701 shares to non-executive directors as compensation and recorded expense of $0.1 million during the quarters ended December 31, 2018 and 2017, respectively . The Company issued 6,265 and 3,564 shares to non-executive directors as compensation and recorded expense of $0.2 million during the six months ended December 31, 2018 and 2017, respectively. During the three and six months ended December 31, 2018, the Company recorded $0.1 million and $0.3 million compensation expense for grants of an aggregate 39,666 restricted stock units under the plan to four executive officers as per their notification of award letters dated July 1, 2018. In addition, the Company awarded 30,000 restricted stock units and 3,186 restricted stock shares to its Chief Executive Officer per notification of award letters dated December 28, 2018. During the three and six months ended December 31, 2017, the Company recorded $0.1 million and $0.2 million compensation expense for grants of an aggregate 6,280 restricted stock units under the plan to two executive officers as per their notification of award letters dated July 1, 2017. At December 31, 2018, 406,152 shares were available for future grants under the plan . 2006 and 2009 Stock Option Plans The 2006 and 2009 S tock O ption Plans a re for key employees, off icers and directors and provide for granting incentive and nonqualified stock options. Under the plans, options were granted at an exercise price equal to the fair market value of the underlying common stock at the date of grant and exercisable for up to 10 years. All option s were exercisable when granted. No additional o ptions can be granted under the 2006 and 2009 Stock Option P lans. (3) Outside a Plan During the quarter ended December 31, 2018, the Company awarded its Chief Executive Officer 55,000 options outside any Company stock plan. The Company recorded no compensation expense related to this grant during the quarter and six months ended December 31, 2018. (4) Summary A summary of the status of the Company’s stock plans as of December 31, 2018 , June 30, 2018 and 201 7 and the changes during the periods then ended is presented below: Weighted Aggregate Shares Average Intrinsic Value (in thousands) Exercise Price (in thousands) Outstanding and exercisable at June 30, 2017 187 $ 27.21 $ 5,039 Granted 21 45.21 Exercised (21) 18.89 Canceled (21) 26.77 Outstanding and exercisable at June 30, 2018 166 $ 30.65 $ 1,841 Granted 66 27.87 Exercised (4) 13.81 Canceled (7) 36.58 Outstanding and exercisable at December 31, 2018 221 $ 29.90 $ 246 The following table summarizes information for options outstanding and exercisable at December 31, 2018 : Options Outstanding and Weighted Average Range of Exercisable Remaining Exercise Prices (in thousands) Life (Years) Price $ 8.55 - 13.90 14 2.2 $ 11.91 17.23 - 19.77 26 3.3 18.88 20.50 - 27.57 66 7.0 23.91 31.06 - 32.80 64 8.0 32.30 43.09 - 47.45 51 7.7 45.37 $ 8.55 - 47.45 221 6.7 $ 29.90 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 6. EARNINGS PER SHARE Basic earnings per share (EPS) of common stock are based on the weighted-average number of common shares outstanding during each period. Diluted e arnings pe r share of common stock include the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options , shares associated with the Long-Term Incentive Compensation P lan and non-vested shares . 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 is greater than the average closing market price of the common shares. The Company calculates the dilutive effect of shares rel ated to the Long-Term Incentive Compensation P lan and non-vested shares 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 three months ended December 31, 2018 and 201 7 , net income as reported for each respective period is divide d by the fully diluted weighted- average number of shares outstanding: Three Months Ended Six Months Ended December 31, December 31, (in thousands) 2018 2017 2018 2017 Basic shares 7,885 7,847 7,880 7,839 Potential common shares: Stock options 20 73 33 75 Long-term incentive plan - 14 - 15 Non-vested shares 12 3 9 2 32 90 42 92 Diluted shares 7,917 7,937 7,922 7,931 Anti-dilutive shares 141 - 115 - Cash dividends declared per common share were $0.22 and $0.44 for the quarters and six months ended December 31, 2018 and 2017. |
Litigation
Litigation | 6 Months Ended |
Dec. 31, 2018 | |
Litigation [Abstract] | |
Litigation | 7. LITIGATION Environmental Matters – I n March 2016, the Company received a General Notice Letter for the Lane Street Groundwater Superfund Site (the “Lane Street Site”) located in Elkhart, Indiana from the U . S . Environmental Protection Agency (EPA). In April 2016, the EPA issued their proposed clean-up plan for groundwater pollution and request for public comment. The Company responded to the request for public comment in May 2016. The EPA issued a Record of Decision selecting a remedy in August 2016 and estimated total costs to remediate of $3.6 million. In July 2017 , the EPA issued a Special Notice L etter to the Company demanding that the Company perform the remedy selected and pay for the remediation cost and past response costs of $5.5 million. On October 12, 2017, the Company, after consultation with its insurance carriers, offered an amount, fully reimbursable by insurance coverage, to the EPA to resolve this matter. On November 6, 2017, the settlement offer extended on October 12, 2017 was rejected. In April 2018, the EPA issued a Unilateral Administrative Order for Remedial Design and Remedial Action (the “Order”) against the Company. The Order was issued under Section 106(a) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §9606(a). The Order directs the Company to perform remedial design and remedial action for the Lane Street Site. The Order was to be effective May 29, 2018. To ensure completion of the remediat ion work, the EPA required the Company to secure financial assurance in the initial amount of $3.6 million, which as noted above, is the estimated cost of remedial work. The Company believes that financial assurance is not required because it meets the relevant financial test criteria as provided in the Order. In May 2018, the EPA agreed to suspend enforcement of the Order so that the Company could conduct environmental testing upgradient to its former manufacturing location pursuant to an Administrative Order on Consent (AOC). On July 5, 2018, the EPA proposed a draft AOC, to which the Company provided revisions. During the latter part of 2018 , Flexsteel submitted to the EPA its proposed work plan for the upgradient testing to be conducted pursuant to the draft AOC. The EPA provided comments on that documentation on December 4, 2018. On January 23, 2019, Flexsteel submitted responses to the EPA’s comments and revised work plan documents. As of January 25, 2019, the Company has not finalized the AOC with the EPA. The Company reflected a $3.6 million liability in the consolidated financial results for the fiscal year ended June 30, 2018. Despite the Company’s position that it did not cause nor contribute to the contamination , the Company continues to reflect this liability in the consolidated financials for the quarter and six months ended December 31 , 2018 in accordance with FASB issued Asset Retirement and Environmental Obligations (ASC 410-30) . The Company continues to evaluate the Order, its legal options and insurance coverages to assert its defense and recovery of current and future expenses related to this matter. 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, fina ncial condition, or cash flows. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | As of January 25, 2019 , there were no subsequent events , other than the items mentioned in Note 8 . |
Accounting Pronouncement Rev Re
Accounting Pronouncement Rev Rec (Tables) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | ||
Disaggregation of Revenue [Table Text Block] | 2018 2017 Residential $ 99.4 $ 110.8 Contract 19.0 18.6 Total $ 118.4 $ 129.4 | 2018 2017 Residential $ 195.4 $ 212.6 Contract 36.4 36.6 Total $ 231.8 $ 249.2 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Inventories [Abstract] | |
Comparison Of Inventories | (in thousands) December 31, June 30, 2018 2018 Raw materials $ 13,615 $ 13,335 Work in process and finished parts 7,590 7,195 Finished goods 72,700 75,674 Total $ 93,905 $ 96,204 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation [Abstract] | |
Schedule Of Stock Option Plans | Weighted Aggregate Shares Average Intrinsic Value (in thousands) Exercise Price (in thousands) Outstanding and exercisable at June 30, 2017 187 $ 27.21 $ 5,039 Granted 21 45.21 Exercised (21) 18.89 Canceled (21) 26.77 Outstanding and exercisable at June 30, 2018 166 $ 30.65 $ 1,841 Granted 66 27.87 Exercised (4) 13.81 Canceled (7) 36.58 Outstanding and exercisable at December 31, 2018 221 $ 29.90 $ 246 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended Six Months Ended December 31, December 31, (in thousands) 2018 2017 2018 2017 Basic shares 7,885 7,847 7,880 7,839 Potential common shares: Stock options 20 73 33 75 Long-term incentive plan - 14 - 15 Non-vested shares 12 3 9 2 32 90 42 92 Diluted shares 7,917 7,937 7,922 7,931 Anti-dilutive shares 141 - 115 - |
Accounting Pronouncement Rev _2
Accounting Pronouncement Rev Rec (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 118,352 | $ 129,392 | $ 231,839 | $ 249,226 | |
Contract with Customer, Liability | 1,900 | 1,900 | $ 2,200 | ||
Residential [Member] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 99,400 | 110,800 | 195,400 | 212,600 | |
Contract[Member] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 19,000 | $ 18,600 | $ 36,400 | $ 36,600 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Inventories [Abstract] | ||
Total inventories | $ 93,905 | $ 96,204 |
Raw materials, net of reserves | 13,615 | 13,335 |
Work in process and finished parts, net of reserves | 7,590 | 7,195 |
Finished goods, net of reserves | $ 72,700 | $ 75,674 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Fair Value Measurements [Abstract] | ||
Investments | $ 7,985 | $ 15,951 |
Credit Arrangements (Details)
Credit Arrangements (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2018USD ($) | |
Line of Credit Facility [Line Items] | |
Credit agreement capacity | $ 10 |
Interest rate over LIBOR | 1.00% |
Libor Plus 1 [Member] | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Interest Rate, Effective Percentage | 4.50% |
Prime Minus 2 [Member] | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Interest Rate, Effective Percentage | 3.50% |
Letter Of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Credit agreement capacity | $ 4 |
Line of Credit Facility, Amount Outstanding | 1.3 |
Line of Credit Facility, Remaining Borrowing Capacity | 8.7 |
Unsecured [Member] | |
Line of Credit Facility [Line Items] | |
Credit agreement capacity | $ 10 |
Interest rate under prime rate | 2.00% |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 18 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost | $ 0 | ||||
Chief Executive Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted Stock Unit | $ 30,000 | ||||
Options issued under stock option plans | 55,000 | ||||
Stock Option Plans [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Period options are excercisable | 10 years | ||||
Shares available for future grants | 0 | 0 | 0 | ||
New Long-Term Management Incentive Compensation Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares approved to be issued under plan | 700,000 | 700,000 | 700,000 | ||
Shares issued | 102,183 | ||||
Compensation cost | $ 0 | $ 0 | $ 0 | $ 0 | |
New Long-Term Management Incentive Compensation Plan [Member] | 2017-2019 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost | 900,000 | ||||
New Long-Term Management Incentive Compensation Plan [Member] | 2018-2020 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost | 600,000 | ||||
New Long-Term Management Incentive Compensation Plan [Member] | 2019-2021Member | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost | $ 400,000 | ||||
New Omnibus Stock Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares approved to be issued under plan | 700,000 | 700,000 | 700,000 | ||
Compensation cost | $ 100,000 | $ 400,000 | $ 200,000 | ||
Period options are excercisable | 10 years | ||||
Options issued under stock option plans | 30,210 | 66,305 | 21,439 | ||
Shares available for future grants | 406,152 | 406,152 | 406,152 | ||
New Omnibus Stock Plan [Member] | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued | 3,675 | 1,701 | 6,265 | 3,564 | |
Compensation cost | $ 100,000 | $ 100,000 | $ 200,000 | ||
New Omnibus Stock Plan [Member] | Executive Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued | 6,280 | ||||
Compensation cost | $ 100,000 | $ 300,000 | |||
Restricted Stock Unit | $ 100,000 | $ 39,666 | $ 200,000 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule Of Stock Option Plans) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | |
Stock-Based Compensation [Abstract] | |||
Shares, Outstanding and exercisable | 166 | 187 | |
Shares, Granted | 66 | 21 | |
Shares, Exercised | (4) | (21) | |
Shares, Canceled | (7) | (21) | |
Shares, Outstanding and exercisable | 221 | 166 | |
Weighted Average Exercise Price, Oustanding and exercisable | $ 30.65 | $ 27.21 | |
Weighted Average Exercise Price, Granted | 27.87 | 45.21 | |
Weighted Average Exercise Price, Exercised | 13.81 | 18.89 | |
Weighted Average Exercise Price, Canceled | 36.58 | 26.77 | |
Weighted Average Exercise Price, Oustanding and exercisable | $ 29.90 | $ 30.65 | |
Aggregate Intrinsic Value | $ 246 | $ 1,841 | $ 5,039 |
Stock-Based Compensation (Sch_2
Stock-Based Compensation (Schedule Of Options Outstanding And Exercisable) (Details) shares in Thousands | 6 Months Ended |
Dec. 31, 2018$ / sharesshares | |
8.55 - 13.90 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Price Lower | $ 8.55 |
Range of Price Upper | $ 13.90 |
Options Outstanding | shares | 14 |
Weighted Average Remaining Life, Years | 2 years 2 months 12 days |
Weighted Average Exercise Price | $ 11.91 |
17.23 - 19.77 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Price Lower | 17.23 |
Range of Price Upper | $ 19.77 |
Options Outstanding | shares | 26 |
Weighted Average Remaining Life, Years | 3 years 3 months 18 days |
Weighted Average Exercise Price | $ 18.88 |
20.50 - 27.57 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Price Lower | 20.50 |
Range of Price Upper | $ 27.57 |
Options Outstanding | shares | 66 |
Weighted Average Remaining Life, Years | 7 years |
Weighted Average Exercise Price | $ 23.91 |
31.06 - 32.80 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Price Lower | 31.06 |
Range of Price Upper | $ 32.80 |
Options Outstanding | shares | 64 |
Weighted Average Remaining Life, Years | 8 years |
Weighted Average Exercise Price | $ 32.30 |
43.09 - 47.45 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Price Lower | 43.09 |
Range of Price Upper | $ 47.45 |
Options Outstanding | shares | 51 |
Weighted Average Remaining Life, Years | 7 years 8 months 12 days |
Weighted Average Exercise Price | $ 45.37 |
8.55 - 47.45 [Member] | |
Share-Based Compensation, Shares Authorized Under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Price Lower | 8.55 |
Range of Price Upper | $ 47.45 |
Options Outstanding | shares | 221 |
Weighted Average Remaining Life, Years | 6 years 8 months 12 days |
Weighted Average Exercise Price | $ 29.90 |
Income Taxes (Reconciliation Be
Income Taxes (Reconciliation Between The U.S. Federal Statutory Tax Rate And The Effective Tax Rate) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2017 | |
Income Taxes [Abstract] | |||||
Federal statutory tax rate | 21.00% | 35.00% | |||
Effective tax rate | 27.50% | 21.10% | 27.30% | 30.20% | |
Income Tax Expense (Benefit) | $ 595 | $ 1,660 | $ 1,075 | $ 5,360 |
Income Taxes (Primary Component
Income Taxes (Primary Components Of Deferred Tax Assets And (Liabilities)) (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 |
Income Taxes [Abstract] | ||
Long-term | $ 1,495 | $ 1,455 |
Litigation (Details)
Litigation (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jun. 30, 2018 | Jul. 31, 2017 | Aug. 31, 2016 |
Litigation [Abstract] | ||||
Loss Contingency, Estimate of Possible Loss | $ 5,500 | $ 3,600 | ||
Accrued Environmental Loss Contingencies, Current | $ 3,600 | $ 3,600 |
Earnings Per Share (Details)
Earnings Per Share (Details) - $ / shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||||
Basic | 7,885 | 7,847 | 7,880 | 7,839 |
Stock options | 20 | 73 | 33 | 75 |
Long-term incentive plan | 14 | 15 | ||
Restricted shares | 12 | 3 | 9 | 2 |
Potential common shares, total | 32 | 90 | 42 | 92 |
Diluted | 7,917 | 7,937 | 7,922 | 7,931 |
Anti-dilutive shares | 141 | 115 | ||
Dividends declared per common share | $ 0.22 | $ 0.22 | $ 0.44 | $ 0.44 |