Flexsteel Industries has reported its second quarter and fiscal year-to-date financial results, showing that net sales were $129.4 million, up 9.2 percent, a record quarter.
Net sales were $249.2 million for the current six months, an increase of 8.1 percent, and net income for six months increased $0.27 per share, including gain on facility sale and tax reform impact.
For both the quarter and the six-month period, higher residential net sales are primarily due to increased volume and, to a lesser extent, new customers. Higher contract net sales are primarily due to increased volume offset by the previously disclosed intentional decrease in sales to certain customers.
Gross margin as a percent of net sales for the quarter ended Dec. 31, 2017 was 21.2 percent, compared to 22.6 percent for the prior year quarter. For the six months ended Dec. 31, 2017, gross margin as a percent of net sales was 21.5 percent, compared to 23.1 percent for the prior year period. The decrease in gross margin as a percentage of net sales is primarily due to increased labor and raw material costs partially offset by volume leverage on fixed costs. In response to margin pressure, Flexsteel implemented select sales price increases late in the fiscal quarter.
For the six months ended Dec. 31, 2017, capital expenditures were $12.9 million including $6.8 million invested to upgrade the business information system and $3.7 million for the construction of a new manufacturing facility.