Flexsteel Industries reported record fiscal year end net sales and net income. Net sales were $121 million for the quarter ended June 30, 2015, a 9.2% increase from the prior year quarter.
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For the fiscal year ended June 30, 2015, net sales were $467 million, an increase of 6.5%.
Gross margin as a percent of net sales for the quarter ended June 30, 2015 was 22.7% compared to 23% for the prior year quarter. For the fiscal year ended June 30, 2015, gross margin as a percent of net sales was 23.5% compared to 22.9% for the prior period.
The improvement in gross margin for the fiscal year is primarily driven by declining inventory write downs. Adjusted selling, general and administrative (SG&A) expenses was 15.6% of net sales in the current year quarter compared to 15.5% in the prior year quarter.
For the fiscal year ended June 30, 2015, adjusted SG&A expenses were 16.1% of net sales compared to 16.3% of net sales in the prior period. The improvement in SG&A as a percentage of net sales for the fiscal year reflects fixed cost leverage on higher sales volume.
Net income was $5.8 million or $0.74 per share in the current year quarter compared to $5.6 million or $0.74 per share in the prior year quarter, an increase of 2.6%. Adjusted net income for the current quarter increased 10.6% to $5.9 million or $0.75 per share compared to $5.3 million or $0.70 per share in the prior year quarter.
For the fiscal year ended June 30, 2015, net income was $22.3 million or $2.89 per share compared to $15 million or $2 per share in the prior fiscal year, an increase of 48.8%. Adjusted net income for the fiscal year ended June 30, 2015 increased 21.1% to $22.4 million or $2.90 per share compared to $18.5 million or $2.46 per share in the prior fiscal year.
Working capital (current assets less current liabilities) at June 30, 2015 was $120 million compared to $129 million at June 30, 2014. Changes in working capital include a decrease in cash of $20.9 million and increases in accounts receivable of $6.6 million, inventory of $15.9 million, short-term borrowings of $11.9 million and accounts payable of $2.5 million.
During the current fiscal year, the Company utilized cash and borrowings to acquire and ready a distribution center in Edgerton, Kansas. The increase in inventory primarily supports anticipated increased sales volume in upholstered and case goods product categories.
The increase in accounts receivable is due to the increase in sales volume and timing of collections. The increase in accounts payable is due to timing of payments. Capital expenditures were $37.4 million and dividend payments totaled $5.1 million for the fiscal year. All earnings per share amounts are on a diluted basis. ■