Flexsteel posts $1.4 million profit despite sales decline

Expects current business conditions to persist

Larry Thomas -- Furniture Today, October 21, 2009

DUBUQUE, Iowa — Upholstery and case goods resource Flexsteel Inds. reported a profit of $1.4 million in the quarter ended Sept. 30, despite a nearly 17% drop in sales.

Residential furniture sales were down 9.4% from the same period a year earlier, the company said, while commercial sales, which include contract furnishings and recreational vehicle seating, tumbled 32.9%.

Total sales for the period, the first quarter of Flexsteel's fiscal year, were $75.9 million. That's a drop of 16.9% from $91.4 million in the comparable quarter last year.

The quarterly net income, which equals 21 cents per share, compares with a loss of $749,000, or 11 cents per share, in the same quarter last year.

During the past year, Flexsteel has slashed costs and reduced its workforce by about 30%.

In a statement accompanying the financial results, the company said it believes business conditions have stabilized at current levels. However, it sees no significant improvement in the near term.

"Residential furniture continues to be a highly deferrable purchase item and is adversely impacted by low levels of consumer confidence, a depressed market for new housing, limited consumer credit and high unemployment," the statement read.

Flexsteel said it expects current business conditions to persist through the remainder of its fiscal year, which ends June 30, 2010.