Flexsteel earnings rise 5.8% in fiscal third quarter

Sales grow 4.6% to $85.2 million

Larry Thomas -- Furniture Today, April 20, 2011

DUBUQUE, Iowa — Flexsteel Inds. said its profits grew 5.8% in the quarter ended March 31 as the company continued to see increased demand for residential furniture.

Sales rose 4.6% from the comparable quarter a year earlier to $85.2 million, a figure that included a 5.6% jump in residential furniture sales.

Residential furniture accounts for more than 75% of sales at Flexsteel, an upholstery and case goods resource that also produces commercial seating.

Net income for the quarter - the third quarter of the company's fiscal year - totaled $2.46 million or 35 cents per share, up from $2.32 million or 34 cents per share a year ago.

For the nine months ended March 31, sales rose 5.9% to $255.2 million. That included a 7.4% increase in residential furniture sales and a 1.5% increase in commercial furniture sales.

Nine-month net income totaled $6.93 million or $1 per share, up a bit from net income of $6.7 million or $1 per share in the nine months ended March 31, 2010.

The company said it is continuing to see increases in the cost of raw materials such as steel, polyester fiber, fabric and leather, and is in the process of raising its prices to make up for those increased costs.

The size of the price increase wasn't specified, but the company said gross margins would continue to be under pressure until it realized the full benefit of the price hikes and got relief from the steadily increasing raw materials costs.

"There are indications that improving job prospects and improving consumer sentiment are having a positive impact on residential sales even though the housing market remains weak," the company said. "We expect to continue top-line growth of our residential products through fiscal year 2012."