DUBUQUE, IA – Furniture manufacturer Flexsteel Industries Inc. announced the closure of its New Paris, IN recreational vehicle seating manufacturing facility and the end of manufacturing operations at its Lancaster, PA facility.

The company said it expects manufacturing at both locations to cease November 9. Flexsteel intends to continue its warehousing and shipping operations in Lancaster.

Ronald Klosterman, president and CEO, said, “The closure of these manufacturing facilities will more closely match our manufacturing capacity with our expected demand for residential and recreational vehicle seating products. Operations at our New Paris facility have been greatly impacted by the continued poor conditions in the recreational vehicle industry, especially for motor homes and travel trailers, which are the primary products manufactured at that facility. The demand for residential furniture products has continued to decline with the depressed housing market, the sub prime mortgage default driven credit crisis and higher fuel costs.”

Products currently manufactured in the New Paris facility will be transitioned to Dubuque, IA, and the current Lancaster production will be transitioned to another Flexsteel manufacturing facility to meet customer shipment requirements.

Approximately 250 employees will be affected by this consolidation over the next two to three months. The company estimates the manufacturing consolidation and transition will be completed by December 31 and anticipates pre-tax restructuring and impairment charges in the first half of fiscal year 2009 to be in the range of $2 million to $2.5 million. Once the transition period is over, the company expects annual pre-tax savings of $3.5 million to $4 million from the manufacturing consolidation.

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