Seating supplier Flexsteel Industries Inc. has warned Wall Street that it will only breakeven during its fourth fiscal quarter, which ended June 30.
Prior to Flexsteel’s announcement, investment analysts estimated the company would earn around 17 cents a share.
Flexsteel also believes its sales revenue during the April-through-June period was around $65 million, down 12% from the record $73.8 million set a year earlier.
The company anticipates earning less than expected because “several customers announced the discontinuance of operations during the last 60 days, resulting in lower shipments and abnormally high bad debts,” according to Bruce Lauritsen, president and CEO.
It was the closure of residential seating customers that created the bad debts for Flexsteel, according to Ron Klosterman, vice president and CFO.
For the year ended June 30, Flexsteel anticipates reporting net earnings of around $4.5 million, down 62% from the record $11.9 million earned during the year ended June 30, 2000.
Flexsteel’s sales for its recently completed fiscal year are expected to total around $270 million, down 6% from the previous year.
Lauritsen believes Flexsteel’s credit losses will return to “historic levels” during the July-through-September period but that the company’s sales during the second half of calendar year 2001 will be lower than was the case during the second half of calendar year 2000.