A leader at Flexsteel Industries Inc. in Dubuque, Iowa, said this overall downturn in the RV industry is lasting longer than expected, according to a report by Dubuque Telegraph Herald.
“We thought we would have seen a greater turnaround by this time than what we have,” said Ron Klosterman, president and CEO of Flexsteel, in a conference call with investors following the release of a company earnings report last month.
The Dubuque-based furniture maker makes RV materials, along with other commercial and residential products. The company’s sales of RV materials have faltered in recent years, in 2009 falling a staggering 71% compared to 2008. Some improvement was evident by 2010, when Flexsteel’s vehicle seating sales were up, although the commercial sales category as a whole dropped 14% in year-to-year comparisons.
In the most recent quarter, Flexsteel reported a 32% increase in net income, a company record. Income rose from $2.5 million in the third quarter of last year to $3.3 million. That rise was largely driven by residential net sales; commercial sales were relatively flat.
Although the recreational vehicle industry has historically seen some substantial dips in volume, the business typically bounces back with “pretty good strength,” according to Klosterman.
“This is a little bit different than what has happened in the past. We are having a harder time seeing when that jump in volume might happen,” he said.
Klosterman said the industry’s original equipment manufacturers aren’t producing as much as the Dubuque firm would like to see and the industry’s trade organization is projecting growth in the low single digits for the balance of calendar 2012.
“Even their optimism is pretty temperate,” Klosterman said.
But at Couler Valley RV in Dubuque, last month was a record breaker. “We had a great, absolutely fabulous April. We grossed the most we’ve ever grossed in 24 years,” said Doug Gauer, who owns Couler Valley.
The business recently hired two new employees, which Gauer said were the first hires in about seven years. He attributed the strong month in part to the unseasonably warm spring weather.
“Good weather does spark a lot of enthusiasm for going camping,” Gauer said.
Similarly, in recent weeks business has slowed slightly as the weather has cooled.
But Gauer said other factors have contributed to Couler Valley’s perseverance, like a long-standing history of service in the community and the status of the overall Dubuque economy.
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