RV furniture supplier Flexsteel Industries Inc. announced an initial restructuring action to “increase organizational effectiveness and gain manufacturing efficiencies to position the company for long-term success,” according to a press release.
Moves include exiting the commercial office and custom-designed hospitality product lines. In addition, Flexsteel will immediately close its Riverside, Calif., manufacturing facility. The company expects to complete the wind down of these product lines and the closure of the manufacturing site within the current quarter.
“While exiting businesses and reducing staff is not an easy decision, we are confident it is the right first step toward Flexsteel’s future,” said Jerry Dittmer, president and CEO of Flexsteel Industries.
Dittmer added, “As I stated during our April 30 conference call, we are working aggressively to reposition the company and are committed to moving quickly from planning to execution in real time with transparency to all of our stakeholders.”
As a result of the announcements, the company expects to reduce its workforce by approximately 130 people. In total, Flexsteel expects to incur approximately $4 million in one-time cash charges for employee severance and related costs and approximately $9 million in noncash charges for inventory impairments due to the restructuring action. Over time, Flexsteel expects to benefit from the resulting reduction in employee-related costs as well as reduced occupancy costs in addition to a one-time benefit driven by the sale of the real estate in Riverside.