ENVIRONMENTAL POLICY STATEMENT

All of Flexsteel’s stakeholders have a responsibility to protect our environment. The officers of Flexsteel and its subsidiaries will use our role as business and community leaders to set the tone at the top to guide our management team in their efforts to improve the environment we directly impact. We will identify our environmental footprint and reduce our impact by implementing a wide variety of initiatives. Because we are committed to sustainable business practices, and to our environment, this initiative will grow into core values dedicated to the stewardship of resources.

ENVIRONMENTAL NEWS

HIGH POINT, N.C. – An industry-specific environmental management program created by the American Home Furnishings Alliance has become an integral company resource for Flexsteel Industries Inc. and subsidiary DMI Furniture, both of which completed the program in August. EFEC – “Enhancing Furniture’s Environmental Culture” – is a voluntary environmental management program for furniture manufacturers that helps companies:

• Improve management of resources and raw materials;
• Reduce energy and water consumption; 
• Reduce waste disposal and associated costs; and,
• Improve overall operational performance.

Flexsteel is the first AHFA member company to implement the program at a contract division – its Starkville, Miss., commercial seating factory. EFEC teams also have been hard at work at the company’s plant and corporate office in Dubuque, Iowa, as well as at plants in Riverside, Calif., Dublin, Ga., and Harrison, Ark. In addition, Flexsteel implemented EFEC at the DMI corporate office in Louisville, Ky., as well as at a DMI plant and warehouse in Huntingburg, Ind. It is the largest number of separate facilities to complete the EFEC program simultaneously.

“It was our goal when we established our environmental initiative to create a new culture within our facilities and to educate our employees on the importance of environmental stewardship,” says Ron Klosterman, Flexsteel’s president and CEO. “The benefits of the (EFEC) program have been visible from the beginning, and we expect them to continue moving forward. I’m proud of what our employees have accomplished during this time and excited to see what they can do in the future.”

What they accomplished included a 51 percent reduction in landfill waste, which equates to 105 pounds saved per employee per month. This reduction was achieved January to June 2009 as compared to the same six-month period in 2008. In addition, the company reduced its electrical usage by 3.8 percent, or 35 kilowatt hours per employee per month. Water consumption was reduced by 17.2 percent, or 86 gallons per employee per month.

Each division selected goals they wished to achieve during implementation of the program, with the most notable being the expansion of recycling efforts and reducing waste, water consumption and energy usage while increasing the use of recycled materials in operations and product development.

“We’re proud of the enthusiasm for our environmental stewardship program and for the participation at all levels of the corporation,” says Pat Crahan, senior vice president of Flexsteel’s commercial seating division, who oversees the corporate environmental program. “The (EFEC) program has provided the structure, focus and motivation to start a continuing journey of responsible resource utilization.”

Because the teams implementing the EFEC program were in seven different states stretching from California to Georgia, AHFA used web-based training in August and September 2008 to launch the environmental effort at all Flexsteel locations at one time. The teams kept one another up-to-date on progress, accomplishments and new initiatives throughout the program.

“This was an extraordinarily well-coordinated effort on the part of Flexsteel and DMI,” reports Bill Perdue, AHFA’s vice president of environmental affairs. “Technology facilitated the interaction between the teams and program managers scattered across the country, but it was the total commitment of everyone from the executive team to frontline workers that made this happen.”

And the effort does not end with EFEC registration, Perdue adds. “Results during the first year of implementation tend to be more dramatic, but all EFEC companies must participate in annual reporting and maintenance audits. They are expected to show ongoing improvement,” he explains. “Flexsteel, for example, already has plans in place that will significantly improve results at its 300,000-square-foot Dublin plant, including replacing all lights with new energy efficient fixtures. This project is expected to reduce energy consumption there another 50 percent.”

Flexsteel and DMI join a growing list of furniture manufacturers that have EFEC-registered facilities, including La-Z-Boy Residential; Sam Moore, a division of Hooker Furniture; American Drew, Lea Industries, Kincaid Furniture and Hammary, all part of La-Z-Boy’s Casegoods Division; Bernhardt Furniture; C.R. Laine; Fairfield Chair; Hickory Chair; and Vaughan-Bassett.

ENVIRONMENTAL PROGRAMS

Start Date: • August 2008
Target Date: • October 2009
Estimated Timeline: • 6 months – 12 months

Completion Date: • August 2009

EFEC Program Highlights:

• EFEC is the environmental management program developed by AHFA to help its members create and maintain a strong, proactive environmental program that makes them industry leaders.

• EFEC is a voluntary environmental management system (EMS) for furniture manufacturers.

• EFEC was created with the purpose of maintaining and furthering the industry’s strong environmental performance.

• EFEC is a set of management tools and principles that your company needs to integrate environmental concerns into its daily business practices.

• EFEC provides a systematic approach to review and improve operations for better environmental performance and improved profitability. Benefits are obtained by setting up procedures to get the work done and reviewing these procedures to ensure they are working properly.

Sustainable by Design Mission Statement:
 Sustainable by Design will provide a roadmap for home furnishings companies to create a corporate culture of conservation and environmental stewardship by integrating socio-economic policies and sustainable business practices into their manufacturing operations and sourcing strategies.

Start Date: • 2010
Target Date: • 2011
Estimated Timeline: • 12 months

Sustainable by Design Program Highlights:

• EFEC registration for all domestic facilities

• A plan to lessen the environmental impact of the company's supply chain.

• A plan for lessening the company's overall environmental footprint, including establishing numerical goals for energy conservation, water conservation, solid/hazardous waste minimization and use of environmentally friendly product components.

• A plan for lessening the company's global climate impact, including developing a baseline inventory for Greenhouse Gas Emissions, and demonstrating annual improvement.

• Evidence of social performance, including human rights and labor standards policies; assessing the company's impact on the communities in which it operates; and a program addressing any aspects of the company's products that might directly affect employees' or customers' health and safety.