Despite industry-wide trends indicating a soft market environment for residential products, orders for Flexsteel’s residential furniture products have remained constant throughout the first half of fiscal 2008.

Despite what the CEO of Stanley Furniture calls "the longest and deepest furniture recession in a generation," Flexsteel Industries seems, if not totally unaffected, at least able to buck the downward trend.

Flexsteel Industries reported net sales for the quarter ended December 31, 2007 of $106.0 million compared to the prior year quarter of $105.7 million, an increase of 0.3%. Net income for the six months ended December 31, 2007 was $3.1 million or $0.46 per share, an increase of 55% from net income of $2.0 million or $0.30 per share for the six months ended December 31, 2006.

Gross margin for the quarter ended December 31, 2007 was 20.8% compared to 18.7% in the prior year quarter. For the six months ended December 31, 2007, the gross margin was 20.2% compared to 18.4% for the prior year six-month period. The gross margin improvement for the quarter and the six-month period is primarily due to the impact of changes in product mix and better cost control, as compared to the prior year periods.

Flexsteel officials said in a release Thursday, "Events on national and international economic and political fronts have put a significant damper on consumer confidence in the United States. A slumping housing market impacted greatly by sub-prime mortgage defaults and rising oil prices leading to increased cost for materials and transportation are two principal contributors to a general slowdown of the overall economy and the furniture market in particular."

Despite industry-wide trends indicating a soft market environment for residential products, orders for Flexsteel’s residential furniture products have remained constant throughout the first half of fiscal 2008. The company expects order levels to remain comparable to the prior year levels throughout fiscal year 2008.