My name is Erica, and I will your conference operator today. At this time, I would like to welcome everyone for the second quarter fiscal year-to-date operating results conference call. (Operator Instructions). Mr. Hall, you may begin your conference.

Thank you Erica. And good morning everyone and welcome to our fiscal year 2008 second quarter and fiscal year-to-date operating results conference call. We appreciate your participation this morning. Joining me this morning from our corporate headquarters in Dubuque, Iowa, is Ron Klosterman, our President and Chief Executive Officer. Today during our call, we may make forward-looking statements that are subject to risk and uncertainty. A discussion of the factors that could cause actual results to differ materially from management's expectations is contained in the company's SEC filings including the most recent 10-K and the press release dated February 7, 2008 announcing the earnings for the quarter and our fiscal year-to-date. Any forward looking statements are opinion as of now and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call. I have a few comments about our press release and our quarter and year-to-date results before I turn the call over to Ron for his comments. The company's reported net sales for the quarter of a $106 million, an increase of about 0.3% over the prior year quarter. Net income for the quarter was $1.9 million or $0.28 per share compared to $1.4 million or $0.21 a share in the prior year quarter. On a six-month basis, our sales were almost flat at about $207 million. Net income for the six months ended December 31, 2007 was $3.1 million or $0.46 per share, an increase of approximately 55% from the $0.30 or $2 million that we reported in the six months ended December 31, 2006. For the six months, our residential sales were up 1.1% to $130.2 million, our recreational vehicles decreased about 1% to $30.6 million, and our commercial sales decreased 2.8% to $46.1 million. Some financial working capital; our receivables have decreased about $8.8 million from our June 30th numbers. And that decrease is really related to the timing of shipments to customers and the payment terms that we provide them. Our inventories have increased about $9.3 million from the June 30th numbers and the net increase in the inventory is due primarily to timing of purchases of finished goods to meet our forecasted customer requirements and to accomplish new product introductions. At this time, I will turn the call over to Ron Klosterman for any comments if he has. Ron?

Thank you, Tim and good morning. I would like to just provide a little bit more detail about primarily the six months year-to-date and then some general comments about what we see going forward. For the six months, as Tim indicated, our topline is about flat between $206 million and $207 million. And although we are never pleased when we don’t see topline growth considering the difficult environment that we have been working in our dirtiest furniture businesses, residential and RV in particular, we are not greatly disappointed with a flat topline at this point in time. I think it stands up pretty well against most of what other publicly-owned furniture companies have been reporting during the last half of calendar year 2007. While our topline is flat, the company has been working very hard to control our costs and utilize our manufacturing capacity. We have made efforts to tighten physical space to eliminate non-value added handling of materials in our factories and in our warehouse operations and with that we have seen some nice improvement in our margins in spite of the flat sales. Along with that, we've also had the benefit of some modest changes and product mix that have allowed us to enhance our margins slightly. In the SG&A area, those costs have gone up from a year ago, although we are not greatly alarmed at the level that we are currently running. Part of that is in selling expenses and marketing expenses and they were planned expenditures that we hade, revising some of our catalogues, the introduction on the Flexsteel side of the Wrangler program, which had some initial costs associated with that. And also in the administrative area, our bad debt expense is up from to where it was a year ago. And to further…

(Operator Instructions). We will pause for just a moment to compile the q-and-a roster. Your first question comes from the line of [Vincent Stoughton].

Hi guys. Good quarter. My question is, how sustainable do you believe the margin improvements you guys have seen are in the future?

We’d hope that this -- the level that we are at now that we think we should be able to maintain at somewhere in that area. Obviously, if we would have some significant topline decline, it will be hard to absorb a lot of the fixed cost to jive in, in margin and maintain there. But if we can maintain our volume levels close to where they are at, we think that we should hold in there pretty good on the margin line. We are seeing some material cost increases that we’re working to mitigate, and where we can have some modest sell price increases to offset those. But frequently, there is a lag time between when you experience a cost increase and can pass them through. So there could be a little modest down drain there. But we feel reasonably confident with where we are at right now.

Okay. And in terms of industry, are you seeing at your competitors exiting business, going out of business or is there -- comparatively what is happening?

Well, and we don’t have any retail stores. We are certainly well aware of retailers that have grown out of business. On the manufacturing and distribution side, I would suspect that there is less domestic manufacturing going on. We know of companies that have either diminished or eliminated their domestic manufacturing. Some of them have actually filed bankruptcy, but they seem to emerge from bankruptcy and many of them are now sourcing product overseas and still selling product to some of the same retailers they were before. So I have a hard time judging how much of our direct competition has gone away.

And given your relative strength, you know, relative to the industry, would you consider acquisitions at this time? Are you looking at that or --

We have our eyes open. If there is something that would be a strategic fit, we’ll certainly take a hard look at it. Sometimes in a challenging business environment opportunities present themselves. So we are not closed about it, but, also when things are challenging we like to stick to our knitting and not get too carried away on what we might be doing.

Okay. Thanks guys. Great quarter.

Thank you.

Thank you.

(Operator Instructions). There are no further questions at this time.

Well, thank you for your interest in Flexsteel and with that we’ll conclude our call this morning. Thanks for listening in and we look forward to meeting with you and talking with you at the end of our March quarter. Have a good day.

This concludes today’s conference call. You may now disconnect.