Flexsteel Industries Inc., reported record net income for its fourth quarter and fiscal year, spurred by improved profit margins.

The Dubuque-based furniture manufacturer reported net income of $4.1 million, or 61 cents per share in its fourth fiscal quarter ended June 30. The results were more than five-fold improvement over the year-earlier quarter, when net income totaled $800,000, or 12 cents per share.

Sales for the fourth quarter were up 15 percent fron the prior year’s quarter, to $85.6 million.

For the full year, Flexsteel reported net income of $10.8 million, or $1.61 per share versus a net loss of $1.5 million, or 23 cents per share for the prior fiscal year.

Net sales for the year increased 1 percent, to $326.5 milion. Commercial net sales for the year fell 14 percent, while residential sales increased 7 percent.

Company officials traced the improvement to consolidation of manufacturing operations and workforce reductions that brought production capacity and overhead costs in line with current demand for Flexsteel products.

Demand for the commercial products was dampened by the contracting economy and tightening of credit.

While the company’s commercial product sales are expected to level off, Flexsteel officials said they don’t expect much improvement in commercial market demand befor eth second half of fiscal 2011. The company also cautioned that residential product demand could be negatively affected by high unemployment, the soft housing market, and limited consumer access to credit.