DMI Furniture, Inc. Reports Second Quarter and Six Months Results.

LOUISVILLE, Ky.--(BUSINESS WIRE)--April 8, 1998--DMI Furniture, Inc., (NASDAQ: DMIF) today announced an 8% decrease in sales for its second quarter ended February 28, 1998 and a 2% increase for the six month period.

Net sales for the second quarter of fiscal 1998 ended were $12.8 million as compared to $13.9 million for the second quarter of fiscal 1997. The decrease was the result of weak demand for promotional bedroom furniture, partially offset by an increase in commercial office sales.

Net sales for the six month period increased to $30.2 million from $29.7 million a year ago. The increase was the result of higher sales of commercial office and home office furniture offset somewhat by lower sales of promotional bedroom furniture.

DMI recorded net income of $116,000 and diluted earnings per share of $.02 for the second quarter of fiscal 1998, compared to $435,000 and $.07 a year ago. The second quarter of the current year included over $220,000 in sales and marketing related start-up expenses for the Company's new Wynwood division announced in September. The Company expects Wynwood to begin shipments of products in the third fiscal quarter. The gross profit for the current fiscal second quarter was lower due to decreased sales and profits of the promotional bedroom line as well as higher sales allowances.

Net income of $926,000 and diluted earnings per share of $.15 for the first six months of fiscal 1998 compare to $1,296,000 and $.22 a year ago. The first six months of the current year included over $430,000 in sales and marketing related start-up expenses for the Company's new Wynwood division. In addition, the gross profit was lower due to decreased sales and profits of the promotional bedroom line.

Interest expense was lower by 23% and 17% for the second quarter and six month periods respectively due to lower borrowing rates and the asset utilization program initiated two years ago.

Donald D. Dreher, Chief Executive Officer, said, "We expect increasing domestic production, sales, and profits for the balance of the year. During the third fiscal quarter, we will begin shipments of three new commercial office furniture groups. The initial level of Wynwood inventory will build during the third fiscal quarter, and we expect solid Wynwood growth through the fourth fiscal quarter. HomeStyles will be showing at the furniture market in High Point later this month, and should begin shipments late in the fourth quarter. Overall, we expect our sales momentum to build in the fourth fiscal quarter and end the current year with record fourth quarter sales."

DMI Furniture, Inc. announced its new WYNWOOD Furniture division in a press release on September 4, 1997 and the DMI DESK COMPANY division in a press release dated October 9, 1997. HOME STYLES was announced in a release on January 6, 1998. DMI Furniture, Inc. is a Louisville, Kentucky based vertically integrated manufacturer, importer, and marketer of residential and commercial office furniture with five manufacturing plants in Indiana and manufacturing sources in Asia, Malaysia, and Mexico. -0-

                          DMI FURNITURE, INC.
                        FINANCIAL INFORMATION
                        (Amounts in thousands)
                              (Unaudited)


                            THREE MONTHS ENDED     SIX  MONTHS ENDED
                            Feb. 28,    Mar 1,    Feb. 28,    Mar 1,
                              1998       1997       1998       1997
                           ---------- ---------- ---------- ----------

Net sales                  $   12,785 $   13,867 $   30,224 $   29,656

Cost of sales                  10,156     10,810     23,460     22,821
                           ---------- ---------- ---------- ----------

Gross profit                    2,629      3,057      6,764      6,835

Selling, general and
  administrative expenses       2,238      2,086      4,808      4,302

Plant closing reserve               -          -          -       (118)
                           ---------- ---------- ---------- ----------

Operating profit                  391        971      1,956      2,651

Interest expense (net)           (206)      (269)      (465)      (561)
                           ---------- ---------- ---------- ----------

Income before income taxes        185        702      1,491      2,090

Provision for income taxes        (69)      (267)      (565)      (794)
                           ---------- ---------- ---------- ----------

Net income                 $      116 $      435 $      926 $    1,296
                           ---------- ---------- ---------- ----------

Net income applicable to
  common stock             $       83 $      395 $      773 $    1,071
                           ---------- ---------- ---------- ----------


Earnings per common share:

  Basic                    $     0.03 $     0.13 $     0.24 $     0.35
                           ---------- ---------- ---------- ----------
  Average common shares     3,164,584  3,106,083  3,160,495  3,081,147
                           ---------- ---------- ---------- ----------

  Diluted                  $     0.02 $     0.07 $     0.15 $     0.22
                           ---------- ---------- ---------- ----------
  Average common and
   equivalents              6,083,051  6,067,954  6,080,172  5,962,017
                           ---------- ---------- ---------- ----------

CONTACT: DMI Furniture, Louisville

Joseph G. Hill, 502/426-4351 Ext. 227

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