Flexsteel's major restructuring effort pays off, sees big gains
October 29, 2020 | 12:05 pm CDT
DUBUQUE, Iowa - Flexsteel Industries, one of the largest residential furniture makers in the U.S. and number 26 on the FDMC 300, has reported strong financial results after a long period of decline.
The furniture manufacturer reported net income of $3.9 million for the recent quarter, showing a significant gain from a loss of $26 million in the prior quarter.
The company undertook a major restructuring effort earlier this year, opting to exit the hospitality and RV furniture markets, permanently close manufacturing plants in Dubuque, Iowa, and Starkville, Mississippi, and move production to Mexico and Asia. In 2019, it shut down a facility in Harrison, Arkansas and another in Riverside, California, laying off hundreds of employees.
It's all paid off, says CEO Jerry Dittmer.
“The transformation plan is working,” he said. “With profitability restored and plans in place to sustain that profitability, we are now pivoting to the next phase in our transformation, to aggressively pursue new sources of profitable growth.”
Flexsteel also reported a record-level $89 million backlog driver by year-over-year home furniture order growth of 60 percent. Gross margin increased to 21.7 percent compated to 17.2 percent in the prior quarter. The company is financially strong with over $36 million of cash and no debt.
Despite shutting down its manufacturing in Dubuque, the company still employs 130 at its headquarters there.
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