Welcome to the Flexsteel Industries, Inc. First Quarter Fiscal Year 2013 Operating Results Conference Call. At this time, I will turn the call over to Mr. Tim Hall, Flexsteel's Senior Vice President of Finance and Chief Financial Officer.

Thank you, Melissa. Good morning, everyone, and welcome to our conference call for the first quarter fiscal 2013. We appreciate your participation. Joining me this morning is Ms. Karel Czanderna, our President and Chief Executive Officer. We may make forward-looking statements during this call. While these statements reflect our best judgment at the present time, they are subject to risk and uncertainties as we've described in our SEC filings. Accordingly, our actual results may differ materially from our current expectations. We undertake no obligation to update any forward-looking statements made during this call. I will now highlight some items from our first quarter. Net sales for the quarter ended September 30, 2012, were $91 million, 12% higher than the prior year quarter. Our Residential net sales increased 16% to $72 million, an increase of $10 million from the prior year quarter net sales of $63 million. Commercial net sales were $19 million, basically flat with the prior year quarter. Net income for the quarter was $2.9 million, $0.40 per diluted share, a record for a first fiscal quarter. The prior year quarter net income was $2.4 million, $0.34 per diluted share for the quarter. Our balance sheet remained strong. Working capital is $103 million, and we have no bank borrowings. Our investment in inventory increased approximately $3 million from the June 30, 2012. The increased inventory supports our increasing Residential volume, including the expanded product offerings. Our accounts receivable increased $2 million, primarily related to just the timing of collection. Our core strategy includes offering a wide range of quality products to the markets that we serve, combined with a conservative approach to business. To ensure that we continue to meet this core strategy, during this first fiscal quarter, we've invested $4 million in capital assets of the estimated $6 million that we expect for fiscal year 2013. Our investments include -- we completed and relocated to a new $11.8 million corporate office building. This building is a foundation for our future growth. When compared to our previous home of some 75 years, the new corporate headquarters will have reduced operating and maintenance costs, provide for technology and infrastructure to support our customers, improve our ability to attract talent and provide a quality working environment for our employees. We relocated our Juarez operation and added $200,000 of equipment to a 225,000-square-foot leased facility, allowing for expansion of our starting price point product offerings. In our other facilities, we invested $700,000 in manufacturing equipment to expand our product offerings, increase manufacturing capabilities and enhance productivity. As in prior years, we invested $900,000 to update a portion of our delivery fleet to maintain and improve fuel efficiency and control maintenance costs. With that, I will turn the call over to Karel for her comments on the quarter and our business review. Karel?

Good morning, and thank you for joining our conference call. We are pleased to report a 21% increase in our first quarter net income from the first quarter a year ago. This is our fourth year in a row of increasing first quarter earnings and our best first quarter results in Flexsteel's history. The growth in earnings largely resulted from continuing double-digit revenue growth due to shipments of Residential upholstered seating and Home Styles' Ready-to-Assemble products and the associated SG&A leverage. On the sales side, upholstered products continue to outperform case goods. We are benefiting from expanded customer bases in the Residential and Vehicle Seating markets, as well as growth from new and existing products with current customers. We remain ready to serve the hospitality market. The RV and marine industries continue to be challenged by high gas prices and consumer confidence to make big-ticket purchases. I just returned from the High Point, North Carolina furniture market, where many noted that traffic seems slower than last year. We appreciated solid traffic from our dealers to see our new products and meet with our sales teams from across the U.S. and internationally. The market for powered recliners is evident. As Tim noted, to primarily meet the needs of our Residential dealers, we invested again this quarter in Mexico to produce an expanded line of upholstered recliners, motion and stationary products, with shorter supply chains as part of our blended operations strategy. We introduced a wide variety of very well-received new fabrics to meet designers' desires to provide custom upholstered products in today's fashion colors and premium finishes. We have also expanded our lines in Ready-to-Assemble outdoor dining and seating and home-office products. Our team remains focused on providing a broad portfolio of quality products with knowledgeable customer service to enable our customers to grow across all the markets we serve. At this time, please open the phone lines for questions then I'll wrap up. Melissa?

[Operator Instructions] Your first question comes from the line of Nick Halen from Sidoti & Company.

Do you -- I apologize if I missed it, but do you guys have an updated backlog number?

Yes, I can get you an updated backlog. We had about a 2.5 decrease in our backlog from our June level, so...

Was that $36 million?

About $36 million.

Okay, great. And just in terms of the margins in the quarter, I mean, with the 12% overall increase in sales, margins came down a little bit. I was kind of wondering what was behind that. I mean, was that primarily, I guess, just increased raw material costs and, I guess, a little bit of product mixes as well?

Yes, product mix is a good share of what was going on. And then just kind of normal fluctuations in some of our operating cost.

Okay. And just -- I know you mentioned that obviously upholstered continues to do well and obviously continues to outperform the case goods, but that 16% growth that you guys saw in Residential sales, I mean, how much of that actually did come? Was that all upholstered or did you see any growth at all on the case goods side?

It's primarily upholstered.

Okay. And then just lastly for me. Can you just talk a little bit about how sales on the ready-to-deliver products have been and I guess how those margins compare to, I guess, the rest of your business?

Sales on the ready-to-assemble products increased nicely. So when I said it was upholstered products, I kind of included that in there, Nick. We really haven't talked about our margin differences between product lines.

[Operator Instructions] There are no further questions at this time.

Thank you for participating in our conference call today. We're off to a solid start for fiscal year 2013. We look forward to reviewing our second quarter operating results with you early in February 2013. We appreciate your interest in Flexsteel and would be delighted to hear you listen to this call sitting on one of our comfortable chairs. Have a great day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.