Item 5. Market for Registrant’s Common Equity
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Share Investment Performance
The following graph shows changes over the past five-year period in the value of $100 invested in: (1) Flexsteel’s common stock (FLXS); (2) The NASDAQ Global Market; (3) an industry peer group of the following: American Woodmark Corp, Bassett Furniture Ind., Culp Inc., Dixie Group Inc., Ethan Allen Interiors Inc., HNI Corp., Hooker Furniture Corp., Johnson Outdoors Inc., Kimball International, Knoll Inc., La-Z-Boy Inc., Lifetime Brands Inc., Lovesac Co., Patrick Industries Inc., Sleep Number Corp., and Trex Company, Inc.
2015
2016
2017
2018
2019
2020
Flexsteel
100.00
93.67
129.87
97.79
43.44
33.79
NASDAQ
100.00
72.12
92.44
120.56
127.81
146.91
Peer Group
100.00
98.72
122.60
133.77
134.21
177.84
The Company’s common stock is traded on the NASDAQ Global Select Market under the trading symbol FLXS.
The Company estimates there were approximately 278 holders of common stock of the Company as of June 30, 2020. The payment of future cash dividends is within the discretion of the Company’s Board of Directors and will depend, among other factors, on its earnings, capital requirements and operating and financial condition.
Purchases of Equity Securities
On June 1, 2020, the Company’s Board of Directors authorized a $6 million share repurchase program through June 9, 2021. The following table summarizes the activity of the common stock repurchases under the program for the year ended June 30, 2020.
Total Number
Average
Total Number
Approximate Dollar Value
of Shares
Price Paid
of Shares Purchased
of Shares that May Yet
Period
Purchased
per Share
as Part of Plan
Be Purchased
June 1, 2020 through June 30, 2020
132,197
$
11.83
132,197
$
4,429,960
11
Table of Contents
Subsequent to June 30, 2020, on August 21, 2020, the Company’s Board of Directors authorized a new share repurchase program authorizing the Company to purchase up to an aggregate of $8 million of the Company’s common stock. The table above excludes the new $8 million share repurchase program.
Sales of Unregistered Securities
On April 6, 2020, the Company granted a stock option to its new Chief Financial Officer & Chief Operations Officer to purchase 78,884 shares of its common stock at an exercise price of $9.97 per share. This option was an inducement grant made outside of the Omnibus Stock Plan in accordance with Nasdaq Listing Rule 5635(c)(4) and Section 4(a)(2) of the Securities Act of 1933, as amended. The option has a ten-year term and vests on April 6, 2023. Vesting of the option is subject to such employee’s continued service with the Company through the applicable vesting date. The Company intends to file a registration statement on a Form S-8 to register the shares of common stock underlying this option.
Item 6. Selected Financial Data
The selected financial data presented below should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in Item 8 of this Annual Report on Form 10-K and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this Annual Report on Form 10-K. The selected consolidated statements of income data of the Company are derived from the Company’s consolidated financial statements.
Five-Year Review
(Amounts in thousands, except certain ratios and per share data)
2020
2019
2018
2017
2016
SUMMARY OF OPERATIONS
Net sales
$
366,926
$
443,588
$
489,180
$
468,764
$
500,106
Gross margin
53,053
69,940
98,219
108,651
113,699
Environmental remediation
—
—
3,600
—
—
ERP impairment
—
21,273
—
—
—
Restructuring expense
34,222
10,048
—
—
—
Gain on disposal of assets
19,216
—
—
—
—
Litigation settlement costs (reimbursement)
—
475
—
(1,175)
(2,280)
Operating income (loss)
(34,395)
(43,154)
24,505
37,264
38,068
Income (loss) before income taxes
(33,757)
(42,608)
25,126
37,586
37,927
Income tax benefit (provision)
6,913
10,003
(7,460)
(13,800)
(13,690)
Net income (loss)
(26,844)
(32,605)
17,666
23,786
24,237
Net income (loss), as a percent of sales
(7.3)%
(7.4)%
3.6%
5.1%
4.8%
Weighted average diluted shares outstanding
7,956
7,889
7,919
7,886
7,765
Diluted earnings (loss) per common share
$
(3.37)
$
(4.13)
$
2.23
$
3.02
$
3.12
Cash dividends declared per common share
$
0.71
$
0.88
$
0.88
$
0.80
$
0.72
SELECTED DATA AS OF JUNE 30
Total assets
$
237,259
$
254,287
$
284,293
$
270,045
$
246,896
Shareholders’ equity
175,505
205,427
241,698
230,760
209,650
Trade receivables, net
32,217
38,157
41,253
42,362
44,618
Inventories
70,565
93,659
96,204
99,397
85,904
Property, plant and equipment, net
43,312
79,238
90,725
70,661
64,124
Capital expenditures
3,688
21,346
29,447
13,457
7,382
Depreciation expense
8,370
7,440
7,367
7,936
7,556
Working capital (current assets less
current liabilities)
128,381
118,203
148,705
158,055
143,086
Current ratio
3.4 to 1
3.5 to 1
4.6 to 1
5.2 to 1
5.3 to 1
Return on ending shareholders’ equity
(15.3)%
(15.9)%
7.3%
10.3%
11.6%
12
Table of Contents