UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended June 30,

2025

 Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 0-5151

FLEXSTEEL INDUSTRIES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Incorporated in State of Minnesota	42-0442319
(State or other Jurisdiction of	(I.R.S. Identification No.)
Incorporation or Organization)

385 BELL STREET

DUBUQUE, IA 52001-0877

(Address of Principal Executive Offices) (Zip Code)

(563) 556-7730

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 Par Value	FLXS	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  No 

Indicate by check mark whether the Registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one).

Large Accelerated Filer  Accelerated Filer  Non-Accelerated Filer  Smaller Reporting Company  Emerging Growth Company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No 

Common Stock - 1.00 Par Value
Shares Outstanding as of August 22, 2025

All values are in US Dollars.

The aggregate market value of the voting stock held by non-affiliates, computed by reference to the last sales price on December 31, 2024 (which was the last business day of the registrant’s most recently completed second quarter) was $242,376,629.

DOCUMENTS INCORPORATED BY REFERENCE

In Part III, portions of the registrant’s 2025 Proxy Statement to be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year end.

		Page
PART I
ITEM 1.	BUSINESS	4
ITEM 1A.	RISK FACTORS	6
ITEM 1B.	UNRESOLVED STAFF COMMENTS	10
ITEM 1C.	CYBERSECURITY	10
ITEM 2.	PROPERTIES	11
ITEM 3.	LEGAL PROCEEDINGS	11
ITEM 4.	MINE SAFETY DISCLOSURES	11
PART II
ITEM 5.	MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	11
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	19
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	42
ITEM 9A.	CONTROLS AND PROCEDURES	42
ITEM 9B.	OTHER INFORMATION	42
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURSIDICTIONS THAT PREVENT INSPECTIONS	42
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	43
ITEM 11.	EXECUTIVE COMPENSATION	43
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS	43
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE	43
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	43
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENTS, AND SCHEDULES	44
	SIGNATURES	45
	EXHIBIT INDEX	46

PART I

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

The Company and its representatives may from time to time make written or oral forward-looking statements with respect to long-term goals or anticipated results of the Company, including statements contained in the Company’s filings with the Securities and Exchange Commission and in its reports to stockholders.

Statements, including those in this Annual Report on Form 10-K, which are not historical or current facts, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause the Company’s results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risk and uncertainty. Some of the factors that could affect results are the cyclical nature of the furniture industry, supply chain disruptions, litigation, the effectiveness of new product introductions and distribution channels, the product mix of sales, pricing pressures, the cost of raw materials and fuel, changes in foreign currency values, retention and recruitment of key employees, actions by governments including laws, regulations, taxes and tariffs, the amount of sales generated and the profit margins thereon, competition (both U.S. and foreign), credit exposure with customers, participation in multi-employer pension plans, disruptions or security breaches to business information systems, the impact of any future pandemic, and general economic conditions. For further information regarding these risks and uncertainties, see the “Risk Factors” section in Item 1A of this Annual Report on Form 10-K.

The Company specifically declines to undertake any obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Item 1. Business

General

Flexsteel Industries, Inc., and Subsidiaries (the “Company”) is one of the largest manufacturers, importers, and marketers of residential furniture products in the United States. Product offerings include a wide variety of furniture such as sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. A featured component in most of the upholstered furniture is a unique steel drop-in seat spring from which the name “Flexsteel” is derived. The Company distributes its products throughout the United States through its e-commerce channel and direct sales force.

The Company operates in one reportable segment, furniture products. The Company’s furniture products business involves the distribution of manufactured and imported products consisting of a broad line of furniture for the residential market.

Manufacturing and Offshore Sourcing

During the fiscal year ended June 30, 2025, the Company operated manufacturing facilities located in Juarez, Mexico. This ongoing manufacturing operation is integral to the Company’s product offerings and distribution strategy by offering smaller and more frequent product runs of a wider product selection. The Company identifies and eliminates manufacturing inefficiencies and adjusts manufacturing schedules on a daily basis to meet customer requirements. The Company has established relationships with key suppliers to ensure prompt delivery of quality component parts. The Company’s production includes the use of selected component parts sourced offshore to enhance value in the marketplace.

The Company integrates manufactured products with finished products acquired from offshore suppliers who can meet quality specifications and scheduling requirements. The Company will continue to pursue and refine this blended strategy, offering customers manufactured goods, products manufactured utilizing imported component parts, and ready-to-deliver imported products. This blended focus on products allows the Company to provide a wide range of price points, styles and product categories to satisfy customer requirements.

Competition

The furniture industry is highly competitive and includes a large number of U.S. and foreign manufacturers and distributors, none of which dominate the market. The Company competes in markets with a large number of relatively small manufacturers; however, certain competitors have substantially greater sales volumes than the Company. The Company’s products compete based on style, quality, comfort, price, delivery, service and durability. The Company believes its patented, guaranteed-for-life Blue Steel Spring, manufacturing and sourcing capabilities, facility locations, commitment to customers, product quality, delivery, service, value and experienced production, sales, marketing and management teams, are some of its competitive advantages.

Seasonality

The Company’s business is not considered seasonal.

Foreign Operations

The Company has minimal export sales. On June 30, 2025, the Company had approximately 30 employees located in Asia to ensure Flexsteel’s quality standards are met and to coordinate the delivery of products acquired from overseas suppliers. The Company leases and operates three manufacturing facilities in Juarez, Mexico and leases one manufacturing facility in Mexicali, Mexico. The Company had approximately 1,000 employees located in Mexico on June 30, 2025. The four Mexico facilities total 1,061,000 square feet. As of June 30, 2025, the Company has not begun operations in the Mexicali facility and expects to sublease the facility until such time that demand necessitates the additional capacity. See “Risk Factors” in Item 1A and Note 2 Leases of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion of the leased assets.

Customer Backlog

The approximate backlog of customer orders believed to be firm as of the end of the current fiscal year and the prior two fiscal years were as follows (in thousands):

June 30, 2025		June 30, 2024		June 30, 2023
$	66,465	$	59,543	$	49,729

Raw Materials

The Company utilizes various types of wood, fabric, leather, filling material, high carbon spring steel, bar and wire stock, polyurethane foam and other raw materials in manufacturing furniture. The Company purchases these materials from numerous outside suppliers, both U.S. and foreign, and is not dependent upon any single source of supply. The costs of certain raw materials fluctuate, but all continue to be readily available within supplier lead-times; however, we could experience supply-chain disruptions at any time, which could impact the availability of materials.

Industry Factors

The Company has exposure to actions by governments, including tariffs, see “Risk Factors” in Item 1A of this Annual Report on Form 10-K.

Government Regulations

The Company is subject to various local, state, and federal laws, regulations and agencies that affect businesses generally, see “Risk Factors” in Item 1A of this Annual Report on Form 10-K. Our compliance with federal, state and local laws and regulations did not have a material effect upon our capital expenditures, earnings or competitive position during the fiscal year ended June 30, 2025.

Environmental Matters

All of Flexsteel’s stakeholders have a responsibility to protect our employees and 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 teams in their efforts to improve the workplace and the environment we directly impact. Because we are committed to sustainable business practices, to our people, and to our communities, we will continue to grow and expand the scope of our dedications to the stewardship of our valued resources. The Company is subject to environmental laws and regulations with respect to product content and industrial waste. Further discussion is included in “Risk Factors” in Item 1A of this Annual Report on Form 10-K.

Trademarks and Patents

The Company owns the United States improvement patents to its Flexsteel guaranteed-for-life Blue Steel Spring – the all-riveted, high-carbon, steel-banded seating platform that gives upholstered and leather furniture the strength and comfort to last a lifetime, as well as patents on convertible beds. The Company owns other patents and owns certain trademarks in connection with its furniture.

It is not common in the furniture industry to obtain a patent for furniture design. If a particular design of a furniture manufacturer is well accepted in the marketplace, it is common for other manufacturers to imitate the same design without recourse by the furniture manufacturer who initially introduced the design. Furniture products are designed by the Company’s own design staff and through the services of third-party designers. New models and designs of furniture, as well as new fabrics, are introduced continuously.

Employees

The Company had approximately 1,400 employees on June 30, 2025, including 7 employees who are covered by collective bargaining agreements. Approximately all of the Company's employees are full-time. Management believes it has good relations with employees.

Available Information

Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website (www.flexsteel.com) as soon as reasonably practicable after we electronically file the material with or furnish it to the U.S. Securities and Exchange Commission (SEC). Additionally, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Information on our website or linked to our website is not incorporated by reference into this Annual Report.

Item 1A. Risk Factors

The Company is subject to a variety of risks. You should carefully consider the risk factors detailed below in conjunction with the other information contained in this Annual Report on Form 10-K. Should any of these risks materialize the Company’s business, financial condition, and future prospects could be negatively impacted. There may be additional factors that are presently unknown to the Company or that the Company currently believes to be immaterial that could affect its business.

Risks related to our industry:

Changes in global trade policy and the impact on tariffs may have a material adverse effect on our business and results of operations.

We source certain finished products from external suppliers in foreign countries, primarily Vietnam, and have significant manufacturing operations in Mexico. On April 2, 2025, the President of the United States issued an executive order to regulate imports by imposing reciprocal country specific tariffs on multiple nations around the world, including Vietnam. A further executive order issued April 9, 2025, paused the implementation of the country specific tariffs on Vietnam and many other countries for 90 days, maintaining a 10% global baseline tariff, while the United States works with its trade partners to negotiate new trade agreements. On July 31, 2025, a further executive order was issued clarifying certain matters related to tariffs, including a country specific tariff of 20% on goods from Vietnam. Although the country specific tariffs and the global 10% baseline tariffs do not apply to our products imported from Mexico, that status could change at any time. The current situation is dynamic, and it is unknown if the United States and its trade partners will reach an agreement to further pause or adjust the current tariffs. Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. economic conditions and commodity markets, declining consumer confidence, significant inflation or diminished expectations for the economy, and ultimately reduced demand for our products. In addition, tariffs on our imported goods could have a material adverse impact on our future net sales, cost of goods sold, profit and cash flow. The ultimate effect will be dependent on the magnitude and duration of the tariffs and the countries implicated as well as our ability to offset or recoup the increased costs.

Inflation and changes in foreign currency may impact our profitability.

Cost inflation including significant increases in ocean container rates, tariffs, raw materials prices, labor rates, and domestic transportation costs have and could continue to impact profitability. Imbalances between supply and demand for these resources may continue to exert upward pressure on costs.

The Company purchases raw materials, component parts, and certain finished goods from foreign external suppliers. Prices for these purchases are primarily negotiated in U.S. dollars on a purchase order basis. A negative shift in the U.S. dollar relative to the local currency of our supplier could result in price increases and negatively impact our cost structure. In addition, our manufactured products are produced in Mexico. The wages of our employees and certain other employee benefit and indirect costs are made in Pesos. A negative shift in the value of the U.S. dollar against the Peso could increase the cost of manufacturing. In addition, the Company has certain asset and liabilities related to our manufacturing operations which are denominated in pesos, primarily our VAT receivable for recoverable VAT paid in Mexico. A negative shift in the value of the Peso against the U.S. dollar could result in the value of our receivable decreasing which may impact our earnings.

Our ability to recover these cost increases through price increases may continue to lag the cost increases, resulting in downward pressure on margins. In addition, price increases to offset rising costs could negatively impact demand for our products.

The Company’s products are considered deferrable purchases for consumers during economic downturns. Prolonged negative economic conditions could impact the business.

Economic downturns and prolonged negative economic conditions could affect consumer spending habits by decreasing the overall demand for home furnishing products. These events could impact retailers resulting in an impact on the Company’s business. A recovery in the Company’s sales could lag significantly behind a general economic recovery due to the deferrable nature and relatively significant cost of purchasing home furnishing products.

Future success depends on the Company’s ability to manage its global supply chain.

The Company acquires raw materials, component parts, and certain finished products from external suppliers, both U.S. and foreign. Many of these suppliers are dependent upon other suppliers in countries other than where they are located. This global interdependence within the Company’s supply chain is subject to delays in delivery, availability, quality, and pricing. Changes in international trade policies including tariffs, access to ports and border crossings, or railways could disrupt the supply chain, increase cost and reduce competitiveness. The delivery of goods from these suppliers has been and may continue to be delayed by customs, labor issues, availability of third-party transportation and equipment, geopolitical pressures, changes in political, economic, and social conditions, weather, laws, and regulations. Unfavorable fluctuations in price, international trade policies, quality, delivery, and availability of these products could continue to adversely affect the Company’s ability to meet demands of customers and cause negative impacts to the Company’s cost structure, profitability, and its cash flow.

Enacted tariffs and potential future increases in tariffs on manufactured goods imported from various other countries could adversely affect our business. Inability to reduce acquisition costs or pass-through price increases may have an adverse impact on sales volume, earnings, and liquidity. Similarly, increases in pricing may have an adverse impact on the competitiveness of the Company’s products relative to other furniture manufacturers with less exposure to the tariff and could also lead to adverse impacts on volume, earnings, and liquidity.

Additionally, a disruption in supply from foreign countries could adversely affect our ability to timely fill customer orders for those products and decrease our sales, earnings, and liquidity. The main foreign countries we source from are Vietnam, China, Thailand, and Mexico. If we were unsuccessful in obtaining those products from other sources or at comparable cost, a disruption in our supply chain could adversely affect our sales, earnings, financial condition, and liquidity.

Finally, the Company relies on third parties to deliver customer orders. The capacity of these third parties or cost of this service could be impacted by labor disputes, cost inflation (particularly fuel), and availability of drivers which could increase cost and have negative impacts on our earnings.

Competition from U.S. and foreign finished product manufacturers may adversely affect the business, operating results or financial condition.

The furniture industry is very competitive and fragmented. The Company competes with U.S. and foreign manufacturers and distributors. As a result, the Company may not be able to maintain or raise the prices of its products in response to competitive pressures or increasing costs. Also, due to the large number of competitors and their wide range of product offerings, the Company may not be able to significantly differentiate its products (through styling, finish, and other construction techniques) from those of its competitors.

Additionally, most of our sales are to distribution channels that rely on physical stores to merchandise and sell our products and an involuntary shut down of those or a significant shift in consumer preference toward purchasing products online could have a materially adverse impact on our sales and operating margin.

These and other competitive pressures could cause us to lose market share, revenues, and customers, increase expenditure or reduce prices, any of which could have a material adverse effect on our results of operations or liquidity.

Future costs of complying with various laws and regulations may adversely impact future operating results.

The Company’s business is subject to various laws and regulations which could have a significant impact on operations and the cost to comply with such laws and regulations could adversely impact the Company’s financial position, results of operations and cash flows. In addition, inadvertently failing to comply with such laws and regulations could produce negative consequences which could adversely impact the Company’s operations.

Failure to anticipate or respond to changes in consumer or designer tastes and fashions in a timely manner could adversely affect the Company’s business and decrease sales and earnings.

Furniture is a styled product and is subject to rapidly changing consumer and end-user trends and tastes and is highly fashion oriented. If the Company is not able to acquire sufficient cover variety or if the Company is unable to predict or respond to changes in fashion trends, it may lose sales and have to sell excess inventory at reduced prices.

Use of social media to disseminate negative commentary may adversely impact the Company’s reputation and business.

There has been a substantial increase in the use of social media platforms, including blogs, social media websites, and other forms of internet-based communications, which allow individuals to access a broad audience of consumers and other interested people. Negative commentary regarding the Company or its products may be posted on social media platforms at any time and may have an adverse impact on its reputation, business, or relationships with third parties, including suppliers, customers, investors, and lenders. Consumers value readily available information and often act on such information without further investigation and without regard to its accuracy or context. The harm may be immediate without affording the Company an opportunity for redress or correction.

Public health events could have a materially adverse effect on our ability to operate, our ability to keep employees safe from the pandemic, our results of operations, and financial condition.

During the initial height of the COVID-19 pandemic, purchases of home furnishings were heavily impacted as they are largely deferable and heavily influenced by consumer sentiment. Public health organizations recommended, and many governments implemented, measures from time-to-time to slow and limit the transmission of the virus, including certain business shutdowns and shelter in place and social distancing requirements. Such preventive measures, or others we may voluntarily put in place, may have a material adverse effect on our business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee availability, potential border closures, and disruptions to the businesses of our selling channel partners, and others.

Our suppliers and customers may also face these and other challenges, which have and could to lead to a future disruption in our supply chain, raw material inflation or the inability to get the raw materials necessary to produce our products, increased shipping and transportation costs, as well as decreased consumer spending and decreased demand for our products.

Risks related to our operations:

Business information systems could be impacted by disruptions and security breaches.

The Company employs information technology systems to support its global business. Security breaches and other disruptions to the Company’s information technology infrastructure could interfere with operations, compromise information belonging to the Company and its customers or suppliers and expose the Company to liability which could adversely impact the Company’s business and reputation. In the ordinary course of business, the Company relies on information technology networks and systems to process, transmit and store electronic information, and to manage or support a variety of business processes and activities. Additionally, the Company collects and stores certain data, including proprietary business information, and may have access to confidential or personal information in certain areas of its businesses that is subject to privacy and security laws, regulations, and customer-imposed controls. While security breaches and other disruptions to the Company’s information technology networks and infrastructure could happen, none have occurred to date that has had a material impact on the Company. Any such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to the Company’s reputation, which could adversely affect the Company’s business.

In addition, in response to shifts in employee workplace preferences, we have allowed certain of our employees the option of a hybrid work schedule where they may choose to work partially from home. Although we continue to implement strong physical and cyber security measures to ensure that our business operations remain functional and to ensure uninterrupted service to our customers, our systems and our operations remain vulnerable to cyber attacks and other disruptions because a material portion of our employees work remotely either full or part-time, and we cannot be certain that our mitigation efforts will be effective.

The implementation of a new business information system could disrupt the business.

The Company continues to migrate business and financial processes from legacy ERP systems to SAP. The Company takes great care in the planning and execution of these migrations, however, implementation issues related to the transition could arise and may result in the following:

Disruption of the Company’s domestic and international supply chain;
Inability to fill customer orders accurately and on a timely basis;
Negative impact on financial results;
Inability to fulfill federal, state and local tax filing requirements in a timely and accurate matter; and

Increased demands of management and associates to the detriment of other corporate initiatives.

The Company’s participation in a multi-employer pension plan may have exposure under the plan that could extend beyond what its obligations would be with respect to its employees.

The Company participates in, and makes periodic contributions to, one multi-employer pension plan that covers union employees. Multi-employer pension plans are managed by trustee boards comprised of participating employer and labor union representatives, and the employers participating in a multi-employer pension plan are jointly responsible for maintaining the plan’s funding requirements. Based on the most recent information available to the Company, the present value of actuarially accrued liabilities of the multi-employer pension plan substantially exceeds the value of the assets held in trust to pay benefits. As a result of the Company’s participation, it could experience greater volatility in the overall pension funding obligations. The Company’s obligations may be impacted by the funded status of the plans, the plans’ investment performance, changes in the participant demographics, financial stability of contributing employers and changes in actuarial assumptions. See Note 13 Benefit and Retirement Plans of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.

Future results may be affected by various legal proceedings and compliance risk, including those involving product liability, environmental, or other matters.

The Company faces the risk of exposure to product liability claims in the event the use of any of its products results in personal injury or property damage. In the event any of the Company’s products prove to be defective, it may be required to recall or redesign such products. The Company is also subject to various laws and regulations relating to environmental protection and the discharge of materials into the environment. The Company could incur substantial costs, including legal expenses, as a result of the noncompliance with, or liability for cleanup or other costs or damages under, environmental laws. Given the inherent uncertainty of litigation, these various legal proceedings and compliance matters could have a material impact on the business, operating results, and financial condition. See Note 14 Commitments and Contingencies of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.

We may experience impairment of our long-lived assets, which would decrease our earnings and net worth.

At June 30, 2025, we had $36.2 million in property, plant and equipment and $41.5 million in right of use assets associated with leased facilities. These long-lived assets are tested for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. The outcome of impairment testing could result in the write-down of all or a portion of the value of these assets. A write-down of our assets would, in turn, reduce our earnings and net worth. During the quarter ended March 31, 2025 the Company determined that the right of use asset related to our leased Mexicali, Mexico facility was not fully recoverable and recorded a pre-tax non-cash asset impairment charge of $14.1 million due to substantial changes in U.S. trade policy in early 2025 that created significant uncertainty in US-Mexico trade relations, slowed foreign direct investment in Mexico, and greatly diminished tenant interest in subleasing the Mexicali facility. If capacity requirements do not necessitate the utilization of our leased Mexicali facility and we are unsuccessful at subleasing the facility in the future, the remaining carrying amount of the right of use asset associated with that lease may not be recoverable. A write-down of all or a portion of the remaining value of the Mexicali right of use asset could have a material impact on our earnings in the period of impairment. At June 30, 2025 the Company does not believe any further impairment indicators exist, but impairment assessment involves the use of considerable judgement and any change in future market or economic conditions could cause actual results to differ from estimates.

The Company’s success depends on its ability to recruit and retain key employees and highly skilled workers in a competitive labor market.

If the Company is not successful in recruiting and retaining key employees and highly skilled workers or experiences the unexpected loss of those employees, the operations may be negatively impacted.

Additionally, we are and will continue to be dependent upon our senior management team and other key personnel. Losing the services of one or more key members of our management team or other key personnel could adversely affect our operations. Ongoing or future communicable diseases increase the risk that certain senior executive officers or a member of the board of directors could become ill, causing them to be incapacitated or otherwise unable to perform their duties for an extended absence. This could negatively impact the efficiency and effectiveness of processes and internal controls throughout the Company and our ability to service customers.

We may not be able to collect amounts owed to us.

We generally grant payment terms between 10 and 60 days to customers, often without requiring collateral. Some of our customers have experienced, and may in the future experience, cash flow and credit-related issues. In the event of negative economic events such as economic recession or significant decline in consumer demand, supply chain disruptions, weather events or natural disasters, public

health events or other unforeseen issues with negative economic impact to our customers, which have occurred in the past, we may not be able to collect amounts owed to us. While we perform credit evaluations of our customers, those evaluations may not prevent uncollectible trade accounts receivable. Credit evaluations involve significant management diligence and judgment, especially in the current environment. Should customers experience liquidity issues beyond what we anticipate, if payment is not received on a timely basis, or if a customer declares bankruptcy or closes stores, we may have difficulty collecting amounts owed to us by these customers, which could adversely affect our sales, earnings, financial condition, and liquidity. In addition, we have receivables for recoverable value added tax paid under such regimes in foreign jurisdictions, primarily Mexico. The collection of these amounts are subject to approval by foreign governmental agencies who evaluate the claims. Any actions taken by those agencies to delay, limit or deny the amounts submitted or retroactive changes in legislation surrounding these regimes may impact our ability to recover these amounts.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Risk Management and Strategy

The Company's cybersecurity risk management program is integrated into the overall risk management framework, including risk identification, assessment, and mitigation across all areas of the business. The cybersecurity risk management program is designed to align with industry best practices and has adopted the framework and measurement practices developed by the National Institute of Standards and Technology (NIST). In addition, the Company has implemented a cross-functional cybersecurity steering team to facilitate coordination across key departments and assists in defining policies, procedures, and mitigation strategies, and will be called on to assist in risk assessment of any threat or incident.

The Company has a written Emergency Action Plan that includes the handling of material cybersecurity incidents and business continuity if there is a disruption in operations. The Company utilizes a third-party cybersecurity partner to assist in monitoring our systems 24 hours a day, and to structure the technical handling of cybersecurity threats and incidents. In addition, the partner is utilized to regularly conduct formal penetration testing and tabletop exercises used to further prepare the organization. This partner also provides ongoing insights and advisory services in order to better align our program with current best practices. The Company uses a variety of processes to address risk associated with the use of third-party service providers. All employees, including anyone with access to Company-provided email accounts, must engage in quarterly cybersecurity awareness training and are tested internally on a regular basis. Additionally, we maintain cyber insurance coverage, including protection to further mitigate potential financial losses from cybersecurity incidents.

As of the date of this Annual Report on Form 10-K we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition. However, despite our best efforts, we cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced undetected cybersecurity incidents. See “Risk Factors” in Item 1A in this Annual Report on Form 10-K for further discussion.

Governance

The Board of Directors is responsible for the oversight of our cybersecurity risk management program. On a quarterly basis, our Chief Information Officer (CIO) provides a cybersecurity status report and update to the Board of Directors, which includes a scorecard of cybersecurity threats, updates on key initiatives, and any changes in trends that may impact the Company. The CIO reports directly to the President and Chief Executive Officer (CEO) and meets regularly with him, the Chief Financial Officer, and other members of the Executive Leadership Team. The CIO has over 25 years of experience in IT Operations and is supported by an internal Director of IT Security and a virtual Chief Information Security Officer (vCISO) service to ensure comprehensive focus on the program.

The Emergency Action Plan defines the handling of cyber related incidents with support of the cross-functional steering team to assess the potential materiality of cybersecurity events and to report on the detection, analysis, and containment from such events. As the severity of events meet certain levels as specified by the Incident Response Plan, those events are escalated to senior levels of management and reported to the Board of Directors. Our Board of Directors is responsible for the oversight of controls and procedures related to the public disclosure of material cybersecurity incidents.

Item 2. Properties

The Company owns the following facilities as of June 30, 2025:

	Approximate
Location	Size (square feet)		Principal Operations
Edgerton, Kansas		500,000	Distribution
Huntingburg, Indiana		337,000	Distribution
Dubuque, Iowa		40,000	Corporate Office

The Company leases the following facilities as of June 30, 2025:

	Approximate
Location	Size (square feet)		Principal Operations
Mexicali, Mexico		508,000	Manufacturing
Greencastle, Pennsylvania		206,000	Distribution
Juarez, Mexico		225,000	Manufacturing
Juarez, Mexico		197,000	Manufacturing
Juarez, Mexico		131,000	Manufacturing
High Point, North Carolina		54,000	Showroom
El Paso, Texas		38,000	Warehouse
High Point, North Carolina		11,000	Design & Engineering Center
Las Vegas, NV		10,000	Showroom
Shenzhen, China		2,000	Office
Bangkok, Thailand		1,500	Office
Binh Duong, Vietnam		1,000	Office

See Note 2 Leases of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for further discussion of the leased assets.

Item 3. Legal Proceedings

See Note 14 Commitments and Contingencies of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for discussion of legal proceedings.

Item 4. Mine Safety Disclosures

None.

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

The Company’s common stock is traded on the NASDAQ Global Select Market under the trading symbol FLXS.

Holders of Record

The Company had 187 registered holders of common stock and estimates there were approximately 3,000 beneficial holders of common stock of the Company as of June 30, 2025. The payment of future cash dividends is within the discretion of the Company’s Board of Directors and will depend, among other factors, on its earnings, capital requirements and operating and financial condition.

Purchases of Equity Securities

On December 11, 2024, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $30 million of the Company’s common stock.

The following table details shares repurchased by the Company during the three months ended June 30, 2025.

	Total Number		Average		Total Number		Approximate Dollar Value
	of Shares		Price Paid		of Shares Purchased		of Shares that May Yet
Period	Purchased		per Share		as Part of Plan		Be Purchased
April 1, 2025, to April 30, 2025		—	$	—		—	$	30,000,000
May 1, 2025, to May 31, 2025		—		—		—		30,000,000
June 1, 2025, to June 30, 2025		—		—		—		30,000,000
As of June 30, 2025		—	$	—		—	$	30,000,000

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following analysis of the results of operations and financial condition of the Company should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

Results of Operations

The following table has been prepared as an aid in understanding the Company’s results of operations on a comparative basis for the fiscal years ended June 30, 2025, 2024, and 2023. Amounts presented are percentages of the Company’s net sales.

	For the years ended June 30,
	2025				2024				2023
Net sales		100.0		%		100.0		%		100.0		%
Cost of goods sold		77.8				78.9				82.0
Gross margin		22.2				21.1				18.0
Selling, general and administrative expenses		15.1				17.1				16.0
Restructuring expense		—				0.7				—
Right-of-use asset impairment		3.2				—				—
(Gain) on sale of real estate		(0.2	)			—				—
(Gain) on disposal of assets held for sale		(2.0	)			(0.8	)			—
Environmental remediation		—				—				(0.7	)
Other expense		—				—				0.1
Operating income		6.0				4.1				2.7
Interest income		0.1				0.0				0.0
Interest (expense)		(0.0	)			(0.4	)			(0.3	)
Income before income taxes		6.1				3.8				2.3
Income tax provision (benefit)		1.5				1.2				(1.4	)
Net income and comprehensive income		4.6		%		2.6		%		3.8		%

Fiscal 2025 Compared to Fiscal 2024

Net sales were $441.1 million for the year ended June 30, 2025, compared to net sales of $412.8 million in the prior year, an increase of $28.3 million or 6.9%. The increase in sales was primarily driven by unit volume in our soft seating products, offset by a decline in our homestyles ready-to-assemble product line.

Gross margin for the year ended June 30, 2025, was 22.2%, compared to 21.1% for the prior fiscal year, an increase of 110 basis points (“bps”). The 110-bps increase was primarily driven by fixed cost leverage on higher sales, supply chain cost savings, and product portfolio management.

Selling, general, and administrative (“SG&A”) expenses decreased by $3.7 million in the year ended June 30, 2025, compared to the prior fiscal year. As a percentage of net sales, SG&A expense was 15.1% in fiscal year 2025 compared to 17.1% of net sales in the prior fiscal year. The decrease of 200-bps is primarily due to fixed cost leverage on higher sales volume and structural cost savings partially offset by investments in growth initiatives. The prior year SG&A expense also included a $1.5 million expense due to CEO transition costs associated with the revaluation of previously awarded equity awards which did not recur in the current year.

In July 2022, Flexsteel commenced a 12-year lease for a manufacturing facility in Mexicali, Mexico to support strong demand growth which was elevated due to pandemic-driven buying at that time. Subsequently, U.S. furniture demand reverted to pre-pandemic norms, and the Company’s plan for the facility pivoted to subleasing the space short-term while maintaining the option to utilize it longer term to support growth. While the Company secured multiple short-term sublease tenants at the beginning of the lease term, substantial changes in U.S. trade policy in early 2025 created significant uncertainty in US-Mexico trade relations, slowed foreign direct investment in Mexico, and greatly diminished tenant interest in subleasing the Mexicali facility. As a result, management concluded that the right of use asset related to this lease was not fully recoverable and recorded a pre-tax non-cash asset impairment charge of $14.1 million during the quarter ended March 31, 2025. See Note 2, Leases, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

During the year ended June 30, 2025, the Company completed the sale of its Dublin, Georgia facility which had been previously recorded as held for sale. The Company recorded a pre-tax gain of $5.0 million related to the sale. See Note 6, Assets Held For Sale, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

During the year ended June 30, 2025, the Company completed the sale of 2 separate ancillary buildings, formerly part of its Huntingburg, Indiana distribution center complex. The Company received proceeds of $0.8 million and recorded a pre-tax gain of $0.7 million related to the first sale. The Company received proceeds of $4.0 million and recorded a pre-tax gain of $3.7 million related to the second sale. The Company has adequate distribution capacity to support our growth as we continue to optimize our distribution and logistics network. See Note 6, Assets Held For Sale, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

Income tax expense was $6.8 million, or an effective rate of 25.3%, for the year ended June 30, 2025, compared to income tax expense of $5.0 million in the prior year, or an effective tax rate of 32.3%. The current year effective tax rate was primarily impacted by the effect of state and foreign taxes, offset by a research & development credit benefit. The prior year tax rate was impacted by the effect of state taxes, nondeductible stock compensation, and foreign taxes, offset by a research & development credit benefit. See Note 10, Income Taxes, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

Net income was $20.2 million, or $3.55 per diluted share for the year ended June 30, 2025, compared to net income of $5.5 million, or $1.91 per diluted share in the prior year.

On July 31, 2025, the President of the United States issued an executive order intended to clarify certain matters related to previously issued executive orders on tariffs. This executive order included, among other things, a country specific tariff of 20% on goods imported from Vietnam. The current situation is dynamic, and it is unknown if the United States and its trade partners will reach an agreement to further pause or adjust the current tariffs. Depending on our ability to mitigate these tariffs, they could have a material impact on our future net sales, cost of goods sold, profit and cash flow. The ultimate effect will be dependent on the magnitude and duration of the tariffs and the countries implicated as well as our ability to successfully mitigate the potential impact. The Company is assessing options to mitigate any potential impact, which includes supply chain adjustments, negotiating concessions with current suppliers, and pricing actions.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes a number of provisions which impact the United States tax code. These regulations impacting the tax code have multiple effective dates ranging from fiscal years beginning January 1, 2025, to fiscal years beginning January 1, 2027. The Company has not adjusted its provision for income tax or measurement of deferred tax assets as of June 30, 2025, based on the changes that may be triggered by the OBBBA due to the law being signed on July 4, 2025. The Company is currently assessing the impact of the OBBBA but does not expect it to have a material impact on our future financial position and results of operations.

Fiscal 2024 Compared to Fiscal 2023

Net sales were $412.8 million for the year ended June 30, 2024, compared to net sales of $393.7 million in the prior year, an increase of $19.1 million or 4.8%. Sales of products sold through retailers increased by $22.9 million or 6.7% primarily driven by growth with strategic customers and new product introductions. Sales of products sold through e-commerce channels decreased by ($3.8) million, or (7.5%) due to a decrease in consumer demand.

Gross margin as a percent of net sales for the year ended June 30, 2024, was 21.1%, compared to 18.0% for the prior fiscal year, an increase of 310-bps. The 310-bps increase was primarily driven by an increase of 240-bps primarily related to cost savings initiatives for materials, labor, and logistics, product portfolio management and disciplined promotional pricing and a 70-bps improvement on volume leverage of fixed cost structure.

SG&A expenses increased by $7.6 million in the year ended June 30, 2024, compared to the prior fiscal year. As a percentage of net sales, SG&A expense was 17.1% in fiscal year 2024 compared to 16.0% of net sales in the prior fiscal year. The increase of 110-bps is primarily due to an increase of 40-bps due to CEO transition costs associated with the revaluation of previously awarded equity awards, an increase of 40-bps due to higher incentive compensation, and an increase of 30-bps driven by investments in growth initiatives partially offset by cost leverage on higher sales volume.

There was $3.0 million in restructuring expenses recorded in the year ended June 30, 2024, associated with the previously announced closure of the Dublin, Georgia manufacturing facility. The $3.0 million primarily consists of $2.6 million in one-time employee termination benefits and other associated costs. All charges related to the restructuring activities were completed in fiscal year 2024. There were no restructuring expenses incurred in the prior fiscal year. See Note 5, Restructuring, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

During the year ended June 30, 2024, the Company completed the sale of the Starkville, Mississippi location which had been previously recorded as held for sale. The Company recorded a gain of $3.3 million related to the sale in the fiscal year. See Note 6, Assets Held For Sale, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

Income tax expense was $5.0 million, or an effective rate of 32.3%, for the year ended June 30, 2024, compared to income tax benefit of ($5.6) million in the prior year, or an effective tax rate of (60.3%). The effective tax rate was impacted by the effect of state taxes, nondeductible stock compensation and foreign taxes, offset by a research & development credit benefit. The prior year tax rate was negative due to the reversal of a full valuation allowance on deferred tax assets. See Note 10, Income Taxes, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

Net income was $10.5 million, or $1.91 per diluted share for the year ended June 30, 2024, compared to net income of $14.8 million, or $2.74 per diluted share in the prior year.

Liquidity and Capital Resources

Working capital (current assets less current liabilities) on June 30, 2025, was $110.4 million compared to $95.0 million on June 30, 2024. The $15.4 million increase in working capital is primarily due to an increase in cash of $35.2 million offset by a decrease of $9.0 million of trade receivables, a decrease of $7.4 million in inventory, an increase in sales & advertising related accruals of $2.0 million and a decrease of $1.7 million in assets held for sale. Capital expenditures were $3.3 million for the fiscal year ended June 30, 2025.

A summary of operating, investing, and financing cash flow is shown in the following table:

	For the years ended June 30,
(in thousands)	2025			2024
Net cash provided by operating activities	$	36,979		$	31,883
Net cash provided by (used in) investing activities		9,432			(593	)
Net cash (used in) financing activities		(11,166	)		(29,894	)
Increase in cash and cash equivalents	$	35,245		$	1,396

Net cash provided by operating activities

For the year ended June 30, 2025, cash provided by operating activities was $37.0 million, which primarily consisted of net income of $20.2 million, adjusted for non-cash items including an impairment of our Mexicali facility right-of-use asset of $14.1 million, stock-based compensation expense of $3.9 million, and depreciation expense of $3.7 million, offset by gain on disposition of property, plant and equipment of $9.5 million, $3.8 million in deferred income tax benefit, and accounts receivable allowance benefit of $0.2 million. Net cash provided by operating assets and liabilities was $8.7 million and was primarily due to a decrease in trade receivables of $9.3 million and a decrease in inventory of $7.4 million due to inventory optimization initiatives, offset by an increase in other assets of $7.6 million primarily related to our receivable for recoverable VAT paid in Mexico.

For the year ended June 30, 2024, cash provided by operating activities was $31.9 million, which primarily consisted of net income of $10.5 million, adjusted for non-cash items including depreciation of $4.0 million and stock-based compensation of $4.6 million, offset by $1.5 million in deferred income taxes, accounts receivable allowance recoveries of $0.2 million, and gain from the sale of capital assets of $2.8 million. Net cash provided by operating assets and liabilities was $17.2 million and was primarily due to a decrease in inventory of $25.5 million due to inventory optimization initiatives, an increase in accounts payable of $1.4 million due to timing of inventory purchases, and an increase in other liabilities of $4.4 million offset by an increase in other assets of $8.2 million and an increase in accounts receivable of $5.9 million due to higher net sales.

Net cash provided by (used in) investing activities

For the year ended June 30, 2025, net cash provided by investing activities was $9.4 million, primarily due to proceeds of $11.6 million from the sales of property, plant and equipment, and corporate owned life insurance proceeds of $1.2 million, offset by capital expenditures of $3.3 million partially.

For the year ended June 30, 2024, net cash used in investing activities was $0.6 million, primarily due to capital expenditures of $4.8 million partially offset by proceeds of $4.2 million from the sale of capital assets

Net cash (used in) financing activities

For the year ended June 30, 2025, net cash used in financing activities was $11.2 million, primarily due to proceeds from lines of credit of $202.3 million, offset by payments on lines of credit of $207.3 million, dividends paid of $3.6 million, and $2.8 million for tax payments on employee vested restricted shares netted with proceeds from the issuance of common stock.

For the year ended June 30, 2024, net cash used in financing activities was $29.9 million, primarily due to proceeds from lines of credit of $367.8 million, offset by payments on lines of credit of $391.3 million, dividends paid of $3.2 million, $1.7 million for treasury stock purchases, and $1.5 million for tax payments on employee vested restricted shares netted with proceeds from the issuance of common stock.

Financing Arrangements

Line of Credit

On September 8, 2021, the Company, as the borrower, entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (the “Lender”), and the other lenders thereto. The Credit Agreement has a five-year term and provides for up to an $85 million revolving line of credit. Subject to certain conditions, the Credit Agreement also provides for the issuance of letters of credit in an aggregate amount up to $5 million which, upon issuance, would be deemed advances under the revolving line of credit. Proceeds of borrowings were used to refinance all indebtedness owed to a prior lender and for working capital purposes. The Company’s obligations under the Credit Agreement are secured by substantially all its assets, excluding real property. The Credit Agreement contains customary representations, warranties, and covenants, including a financial covenant to maintain a fixed coverage ratio of not less than 1.00 to 1.00. In addition, the Loan Agreement places restrictions on the Company’s ability to incur additional indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, and to merge or consolidate with other entities.

On April 18, 2022, the Company entered into a first amendment to the Credit Agreement (“First Amendment to the Credit Agreement”), with the Lender, and the lenders thereto. The amendment to the Credit Agreement changed the definition of the term "Payment Conditions" and further defined default or event of default and the calculation of the Fixed Charge Coverage Ratio.

Subject to certain conditions, borrowings under the Credit Agreement initially bore interest at LIBOR plus 1.25% or 1.50% per annum. On May 24, 2023, the Company entered into a second amendment to the Credit Agreement (“Second Amendment to the Credit Agreement”) with the Lender to transition the applicable interest rate from LIBOR to Secured Overnight Financing Rate (“SOFR”). Effective as of the date of the Second Amendment to the Credit Agreement, borrowings under the amended Credit Agreement bear interest at SOFR plus 1.36% to 1.61% or an effective interest rate of 5.76% on June 30, 2025.

On June 3, 2025, the Company entered into a third amendment to its Credit Agreement ("Third Amendment to the Credit Agreement") with Wells Fargo Bank, NA. The amendment reduced the maximum revolving line of credit amount to $55 million and modified certain definitions in the Credit Agreement which include dollar figures derived from the maximum revolver amount. The reduction in the maximum revolving line of credit amount was initiated by the Company to better align with current and projected borrowing availability under the terms of the Credit Agreement.

As of June 30, 2025, there were no outstanding borrowings under the Credit Agreement, exclusive of fees and letters of credit.

Letters of credit outstanding at the Lender as of June 30, 2025, totaled $0.9 million.

See Note 9 Credit Arrangements of Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.

Contractual Obligations

The following table summarizes our contractual obligations on June 30, 2025, and the effect these obligations are expected to have on our liquidity and cash flow in the future (in thousands):

					2-3		4-5		More than
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	67,976	$	10,003	$	20,062	$	17,511	$	20,400
Warehouse management obligation		1,735		1,388		347		—		—

Outlook

Our focus for fiscal 2026 will be to remain financially agile with strong liquidity, continue building our foundation for profitable long-term growth in both retail and e-commerce sales channels, build global supply chain resiliency, continue focusing on operational excellence, strengthen digital capabilities, re-imagine the customer experience, and build strong culture and talent.

Critical Accounting Policies

The discussion and analysis of our consolidated financial statements and results of operations are based on consolidated financial statements prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America. Preparation of these consolidated financial statements requires the use of estimates and judgments that affect the reported results. We use estimates based on the best information available in recording transactions and balances resulting from business operations. Estimates are used for such items as the collectability of trade accounts receivable and inventory valuation. Ultimate results may differ from these estimates under different assumptions or conditions.

Allowance for Credit Losses – We establish an allowance for credit losses to reduce trade accounts receivable to an amount that reasonably approximates their net realizable value. Our accounts receivable allowance consists of an allowance for expected credit losses which is established through a review of open accounts, historical collection, and historical write-off amounts. The amount ultimately realized from trade accounts receivable may differ from the amount estimated in the consolidated financial statements.

Inventories – We value inventory at the lower of cost or net realizable value. Cost of manufactured inventory includes materials, labor and overhead. In addition, finished goods inventory includes capitalized freight, import duties, and warehousing costs. Our inventory valuation reflects markdowns for the excess of the cost over the amount expected to be realized and considers obsolete and excess inventory. Markdowns establish a new cost basis for the Company’s inventory. Subsequent changes in facts or circumstances do not result in the reversal of previously recorded markdowns or an increase in that newly established cost basis.

Valuation of Long-Lived Assets – We periodically review the carrying value of long-lived assets and estimated depreciable or amortizable lives for continued appropriateness. This review is based upon projections of anticipated future cash flows and is performed whenever events or changes in circumstances indicate that asset carrying values may not be recoverable or that the estimated depreciable or amortizable lives may have changed. For long-lived assets, including right-of-use lease assets, if the net book value of the asset is greater than its estimated fair value less cost to sell, an impairment is recorded for the excess of net book value over estimated fair value less cost to sell. We recorded $14.1 million of impairments in the fiscal year 2025 related to our Mexicali facility lease right-of-use asset. See Note 2, Leases, for the Company’s lease disclosures. No impairments were recorded in fiscal years 2024 and 2023.

Restructuring Costs – The Company groups exit or disposal cost obligations into three categories: Involuntary employee termination benefits, costs to terminate contracts, and other associated costs. Involuntary employee termination benefits must be a one-time benefit, and this element of restructuring cost is recognized as incurred upon communication of the plan to the identified employees. Costs to terminate contracts are recognized upon the effectiveness of the termination agreement with the provider. Other associated restructuring costs are expensed as incurred. Any inventory impairment costs as a result of restructuring activities are accounted for as costs of goods sold.

Income Taxes - In determining taxable income for financial statement purposes, we must make certain estimates and judgments. These estimates and judgments affect the calculation of certain tax liabilities and the determination of the recoverability of certain deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. In evaluating our ability to recover our deferred tax assets we consider all available positive and negative evidence including our past operating results, the existence of cumulative losses in the most recent years, and our forecast of future taxable income. In estimating future taxable income, we develop assumptions including the amount of future pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses.

At June 30, 2025, the Company determined that based on the weight of available evidence, we will be able to recover our deferred tax assets. The realization of our deferred tax assets is primarily dependent on future taxable income in the appropriate jurisdiction. Any reduction in future taxable income, including but not limited to any future restructuring activities may require that we establish a valuation allowance against our deferred tax assets. Establishing a valuation allowance or an increase in the valuation allowance could result in additional income tax expense in such a period and could have a significant impact on our future earnings. Refer to Note 10 Income Taxes of Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

General – Market risk represents the risk of changes in the value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. As discussed below, management of the Company does not believe that changes in these factors could cause material fluctuations in the Company’s results of operations or cash flows. The ability to import furniture products can be adversely affected by political issues in the countries where suppliers are located, as well as disruptions associated with shipping distances and negotiations with port employees. Other risks related to furniture product importation include government imposition of regulations and/or quotas; duties, taxes or tariffs on imports; and significant fluctuation in the value of the U.S. dollar against foreign currencies. Any of these factors could interrupt supply, increase costs, decrease demand, and decrease earnings.

Foreign Currency Risk – During fiscal years 2025, 2024, and 2023, the Company did not have sales but had purchases and other expenses denominated in foreign currencies, primarily the Mexican Peso. The wages of our employees and certain other employee benefits and indirect costs related to our operations in Mexico are made in Pesos and subject to foreign currency fluctuation with the U.S. dollar. The Company does not employ any foreign currency hedges against this operating expense exposure. A negative shift in the value of the U.S. dollar against the Peso could increase the cost of our manufactured product. In addition, the Company has certain asset and liabilities related to our manufacturing operations which are denominated in pesos, primarily our VAT receivable for recoverable VAT paid in Mexico. A negative shift in the value of the Peso against the U.S. dollar could result in the value of our receivable decreasing which may impact our earnings. During the third quarter of fiscal year 2025, we utilized a derivative instrument to reduce our exposure to foreign currency risk from changes in the peso’s exchange rate for this exposure. This instrument expired on March 31, 2025, without being utilized and the Company does not currently hedge foreign currency risk. See “Risk Factors” in Item 1A in this Annual Report on Form 10-K for further discussion.

Interest Rate Risk – The Company’s primary market risk exposure regarding financial instruments is changes in interest rates. On June 30, 2025, the Company had no outstanding balance on its line of credit.

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm PCAOB ID 34	20
Report of Independent Registered Public Accounting Firm – Internal Control Over Financial Reporting	23
Consolidated Balance Sheets at June 30, 2025 and 2024	24
Consolidated Statements of Income and Comprehensive Income for the Years Ended June 30, 2025, 2024, and 2023	25
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended June 30, 2025, 2024, and 2023	26
Consolidated Statements of Cash Flows for the Years Ended June 30, 2025, 2024, and 2023	27
Notes to Consolidated Financial Statements	28-41
Schedule II Valuation and Qualifying Accounts	44

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Flexsteel Industries, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Flexsteel Industries, Inc. and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended June 30, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 22, 2025 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Inventories — Refer to Notes 1 and 3 to the financial statements

Critical Audit Matter Description

The Company has inventories of $89.1 million as of June 30, 2025. The Company records inventories at the lower of cost or net realizable value utilizing the first-in, first-out (“FIFO”) method. The Company’s inventory valuation reflects markdowns for the excess of the cost over the amount expected to be realized. Markdowns establish a new cost basis for the Company’s inventories. Subsequent changes in facts or circumstances do not result in the reversal of previously recorded markdowns or an increase in that newly established cost basis.

Given the quantitative and qualitative materiality of the balance, coupled with the judgments and subjectivity involved to estimate the markdowns to the net realizable value of inventories, auditing management’s estimates of net realizable value required subjective auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to estimated net realizable value of inventories included the following, among others:

We tested the design and operating effectiveness of internal controls over the inventory valuation process, including controls over the inputs that are used in management’s inventory markdown for the excess of the cost over the amount expected to be realized.
We tested management's process to determine the inventory markdowns and net realizable value of inventory through inquiries of management, and evaluation of accounting policies and process documentation.
We tested the accuracy and completeness of the Company’s measurement of inventory markdowns using a sampling approach. We evaluated the appropriateness of methodologies and assumptions used by management to estimate inventory markdowns including inventory quantities on-hand, historical sales activity, and other assumptions used by management.
We evaluated management’s measurement of the inventory markdowns and net realizable value by testing the mathematical accuracy of the Company’s calculation.
We performed retrospective reviews of actual products sold in the current year against prior year inventory markdowns to net realizable value.

Mexicali Right-of-Use Asset Impairment — Refer to Notes 1 and 2 to the financial statements

Critical Audit Matter Description

The Company periodically reviews the carrying value of long-lived assets and estimated depreciable or amortizable lives for continued appropriateness. This review is based upon projections of anticipated future cash flows and is performed whenever events or changes in circumstances indicate that asset carrying values may not be recoverable or that the estimated depreciable or amortizable lives may have changed. Events that result in an impairment review may include a significant decrease in the operating performance of the long-lived asset, or the decision to close a manufacturing facility, or distribution center. If it is determined estimated fair value, less cost to sell, is less than the carrying value, the asset is written down to its fair value. In the third quarter of fiscal year 2025, indicators arose that the right-of-use asset assigned to the Company’s manufacturing facility in Mexicali, Mexico may not be fully recoverable. As a result of management’s analysis, management concluded that the right-of-use asset related to this lease is not fully recoverable and recorded a $14.1 million impairment in fiscal year 2025.

We identified the Mexicali Right-of-Use Asset Impairment as a critical audit matter because the impairment assessment involves significant judgment due to the estimation of future cash flows and fair values. Key assumptions, sublease rental income per square foot and discount rate, are influenced by economic conditions and are inherently subjective. Because of the materiality of the impairment and the complexity of the assumptions, auditing management’s estimates of estimated fair value required subjective auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the sublease rental income per square foot and selection of discount rate, among others:

We tested the effectiveness of controls over management’s valuation, including those over the sublease rental income per square foot and selection of discount rate.
We inquired of management regarding the viability of subleasing the manufacturing facility and appropriate sublease rental income per square foot.
We evaluated the reasonableness of management’s plan to sublease the Mexicali, Mexico manufacturing facility through:
Inspection of internal communications between management and the Board of Directors
Inspection of historical subleasing agreements between the Company and tenants.
We evaluated the methods and inputs used by management to determine the fair value of the lease right-of-use asset, as well as evaluated management's analysis to assess the sensitivity of sublease rental income per square foot and discount rate.

With the assistance of fair value specialists, we evaluated the reasonableness of the sublease rental income per square foot by:
Testing the source information underlying the determination of sublease rental income per square foot and testing the mathematical accuracy of the information
Comparing sublease rental income per square foot to market data
Developing ranges of independent estimates and comparing those to the sublease rental income per square foot selected by management.
With the assistance of fair value specialists, we evaluated the reasonableness of the discount rate by:
Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the information
Comparing the discount rate to market data
Developing ranges of independent estimates and comparing those to the discount rate selected by management
Evaluating the application of the discount rate on the anticipated future cash flows and recalculating the net present value.

/s/ Deloitte & Touche LLP

Minneapolis, MN August 22, 2025

We have served as the Company’s auditor since 1965.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Flexsteel Industries, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Flexsteel Industries, Inc. and subsidiaries (the “Company”) as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2025, of the Company and our report dated August 22, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Minneapolis, MN August 22, 2025

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in thousands)


			2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	40,006		$	4,761
Trade receivables - less allowances: 2025, 1,790; 2024, 2,440	35,229			44,238
Inventories	89,135			96,577
Other	8,002			8,098
Assets held for sale	—			1,707
Total current assets	172,372			155,381
NONCURRENT ASSETS:
Property, plant and equipment, net	36,212			36,709
Operating lease right-of-use assets	41,545			61,439
Deferred income taxes	12,444			8,607
Other assets	19,913			12,326
TOTAL	282,486		$	274,462
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	25,617		$	25,830
Current portion of operating lease liabilities	7,809			7,517
Accrued liabilities:
Payroll and related items	11,260			12,059
Insurance	1,950			1,900
Sales and advertising related items	8,061			6,073
Other	7,317			7,027
Total current liabilities	62,014			60,406
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities	51,561			58,076
Line of credit	—			4,822
Other liabilities	1,049			791
Total liabilities	114,624			124,095
COMMITMENTS AND CONTINGENCIES (Note 14)
SHAREHOLDERS' EQUITY:
Common stock - 1 par value; authorized 15,000 shares; 8,514 shares issued and 5,307 shares outstanding as of June 30, 2025, and 8,407 shares issued and 5,200 shares outstanding as of June 30, 2024	8,514			8,407
Additional paid-in capital	40,644			39,573
Treasury stock, at cost; 3,207 shares as of June 30, 2025 and 2024, respectively	(71,731	)		(71,731	)
Retained earnings	190,435			174,118
Accumulated other comprehensive income	—			—
Total shareholders' equity	167,862			150,367
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	282,486		$	274,462

All values are in US Dollars.

See accompanying Notes to Consolidated Financial Statements.

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Income AND COMPREHENSIVE INCOME

(Amounts in thousands, except per share data)

	For the years ended June 30,
	2025			2024			2023
Net sales	$	441,073		$	412,752		$	393,692
Cost of goods sold		343,129			325,508			322,745
Gross profit		97,944			87,244			70,947
Selling, general and administrative expenses		66,696			70,444			62,846
Restructuring expense		—			2,982			—
Right-of-use asset impairment		14,079			—			—
(Gain) on sale of real estate		(753	)		—			—
(Gain) on disposal of assets held for sale		(8,693	)		(3,262	)		—
Environmental remediation		—			—			(2,788	)
Other expense		—			—			347
Operating income		26,615			17,080			10,542
Other income (expense):
Interest income		421			20			18
Interest (expense)		(70	)		(1,550	)		(1,341	)
Total other income (expense)		351			(1,530	)		(1,323	)
Income before income taxes		26,966			15,550			9,219
Income tax provision (benefit)		6,812			5,022			(5,559	)
Net income and comprehensive income	$	20,154		$	10,528		$	14,778
Weighted average number of common shares outstanding:
Basic		5,249			5,170			5,225
Diluted		5,678			5,519			5,385
Earnings per share of common stock
Basic	$	3.84		$	2.04		$	2.83
Diluted	$	3.55		$	1.91		$	2.74

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders’ Equity

(Amounts in thousands)

	Total Par
	Value of
	Common				Treasury			Retained
	Shares (1 Par)	Capital			Stock			Earnings			Total
Balance at June 30, 2022		$	34,467		$	(66,372	)	$	155,275		$	131,560
Issuance of common stock:
Stock-based compensation			3,157			—			—			3,191
Vesting of restricted stock units and restricted shares			(1,019	)								(951	)
Treasury stock purchases			—			(3,700	)		—			(3,700	)
Cash dividends declared			—			—			(3,257	)		(3,257	)
Net income			—			—			14,778			14,778
Balance at June 30, 2023		$	36,605		$	(70,072	)	$	166,796		$	141,621
Issuance of common stock:
Stock-based compensation			4,622			—			—			4,646
Vesting of restricted stock units and restricted shares			(1,739	)		—			—			(1,651	)
Stock options exercised, net			85			—			—			88
Treasury stock purchases			—			(1,659	)		—			(1,659	)
Cash dividends declared			—			—			(3,206	)		(3,206	)
Net income			—			—			10,528			10,528
Balance at June 30, 2024		$	39,573		$	(71,731	)	$	174,118		$	150,367
Issuance of common stock:
Stock-based compensation			3,855			—			—			3,869
Vesting of restricted stock units and restricted shares			(823	)		—			—			(794	)
Stock options exercised, net			(1,961	)		—			—			(1,897	)
Cash dividends declared			—			—			(3,837	)		(3,837	)
Net income			—			—			20,154			20,154
Balance at June 30, 2025			40,644			(71,731	)		190,435			167,862

All values are in US Dollars.

Cash dividends declared per common share were $0.71, $0.60, and $0.60 for the fiscal years ended June 30, 2025, 2024, and 2023, respectively.

See accompanying Notes to Consolidated Financial Statements.

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Amounts in thousands)

	For the years ended June 30,
	2025			2024			2023
OPERATING ACTIVITIES:
Net income	$	20,154		$	10,528		$	14,778
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		3,654			3,997			4,572
Deferred income taxes		(3,837	)		(1,454	)		(7,154	)
Stock-based compensation expense		3,869			4,647			3,191
Change in provision for losses on accounts receivable		(244	)		(160	)		(380	)
Right-of-use asset impairment		14,079			—			—
(Gain) on disposition of property, plant and equipment		(9,446	)		(2,839	)		(313	)
Changes in operating assets and liabilities:
Trade receivables		9,253			(5,910	)		3,318
Inventories		7,441			25,499			19,136
Other current assets		(962	)		(1,681	)		(1,467	)
Other assets		(7,586	)		(6,518	)		(3,865	)
Accounts payable - trade		(579	)		1,373			(7,320	)
Accrued liabilities		830			4,177			(1,270	)
Other long-term liabilities		353			224			(237	)
Net cash provided by operating activities		36,979			31,883			22,989
INVESTING ACTIVITIES:
Proceeds from sale of investments		1,155			—			—
Proceeds from sales of property, plant and equipment		11,535			4,179			340
Capital expenditures		(3,258	)		(4,772	)		(4,790	)
Net cash provided by (used in) investing activities		9,432			(593	)		(4,450	)
FINANCING ACTIVITIES:
Dividends paid		(3,556	)		(3,219	)		(3,241	)
Treasury stock purchases		—			(1,659	)		(3,700	)
Proceeds from lines of credit		202,344			367,818			363,805
Payments on lines of credit		(207,262	)		(391,270	)		(373,271	)
Proceeds from issuance of common stock		141			88			—
Shares withheld for tax payments on vested shares and options exercised		(2,833	)		(1,652	)		(951	)
Net cash (used in) financing activities		(11,166	)		(29,894	)		(17,358	)
Increase in cash and cash equivalents		35,245			1,396			1,181
Cash and cash equivalents at beginning of year		4,761			3,365			2,184
Cash and cash equivalents at end of year	$	40,006		$	4,761		$	3,365
SUPPLEMENTAL INFORMATION
Interest paid		107			1,694			1,069
Interest received		421			—			—
Cash paid for income taxes, net		9,397			4,296			4,104
Capital expenditures in accounts payable		390			23			311

See accompanying Notes to Consolidated Financial Statements.

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS – Flexsteel Industries, Inc., and Subsidiaries (the “Company” or “Flexsteel” or “Our”) is one of the largest manufacturers, importers, and marketers of furniture products in the United States. Product offerings include a wide variety of furniture such as sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. A featured component in most of the upholstered furniture is a unique steel drop-in seat spring from which the name “Flexsteel” is derived. The Company distributes its products throughout the United States through its e-commerce channel and dealer sales force.

PRINCIPLES OF CONSOLIDATION – The consolidated financial statements include the accounts of Flexsteel Industries, Inc. and its wholly owned subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation. The Company’s consolidated financial statements and results of operations are based on consolidated financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) in the United States of America.

USE OF ESTIMATES – The preparation of consolidated financial statements in conformity with GAAP in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Ultimate results could differ from those estimates.

FAIR VALUE – The Company’s cash and cash equivalents, investments, accounts receivable, other current assets, accounts payable and certain accrued liabilities are carried at amounts which reasonably approximate their fair value due to their short-term nature. GAAP on fair value measurement for certain financial assets and liabilities require that each asset and liability carried at fair value be classified into one of the following categories: Level 1: Quoted market prices in active markets for identical assets and liabilities; Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data; or Level 3: Unobservable inputs that are not corroborated by market data. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period.

ALLOWANCE FOR CREDIT LOSSES – The Company establishes an allowance for credit losses to reduce trade accounts receivable to an amount that reasonably approximates their net realizable value. The Company’s allowance for credit losses is established through review of open accounts, historical collection, and historical write-off amounts. The amount ultimately realized from trade accounts receivable may differ from the amount estimated in the consolidated financial statements.

INVENTORIES – Inventories are stated at the lower of cost or net realizable value utilizing the first‑in - first‑out (“FIFO”) method. Cost of manufactured inventory includes materials, labor and overhead. In addition, finished goods inventory includes capitalized freight, import duties, and warehousing costs. Our inventory valuation reflects markdowns for the excess of the cost over the amount expected to be realized and considers obsolete and excess inventory. Markdowns establish a new cost basis for the Company’s inventory. Subsequent changes in facts or circumstances do not result in the reversal of previously recorded markdowns or an increase in that newly established cost basis.

PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets.

VALUATION OF LONG–LIVED ASSETS – The Company periodically reviews the carrying value of long-lived assets and estimated depreciable or amortizable lives for continued appropriateness. This review is based upon projections of anticipated future cash flows and is performed whenever events or changes in circumstances indicate that asset carrying values may not be recoverable or that the estimated depreciable or amortizable lives may have changed. For long-lived assets, including right-of-use lease assets, if the net book value of the asset is greater than its estimated fair value less cost to sell, an impairment is recorded for the excess of net book value over estimated fair value less cost to sell.

ASSETS HELD FOR SALE – Assets held for sale represent land, buildings, machinery and equipment for locations that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment.” Once an asset is classified as held for sale, the Company ceases depreciating the asset. The assets held for sale are being marketed for sale and it is the Company’s intention to complete the sale of the assets within the upcoming year.

RESTRUCTURING COSTS - The Company groups exit or disposal cost obligations into three categories: involuntary employee termination benefits, costs to terminate contracts, and other associated costs. Involuntary employee termination benefits must be a one-time benefit, and this element of restructuring cost is recognized as incurred upon communication of the plan to the identified employees.

Costs to terminate contracts are recognized upon termination agreement with the provider. Other associated restructuring costs are expensed as incurred. Any inventory impairment costs as a result of restructuring activities are accounted for as cost of goods sold.

LEASES – The Company accounts for its leases in accordance with ASC 842, Leases. ASC 842 requires lessees to (i) recognize a right-of-use asset (“ROU asset”) and a lease liability that is measured at the present value of the remaining lease payments, on the Consolidated Balance Sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease-related cash payments within operating and financing activities. The Company made an accounting policy election to not recognize short-term leases on the Consolidated Balance Sheets and all non-lease components, such as common area maintenance, were excluded. See Note 2, Leases, for the Company’s lease disclosures.

WARRANTY – The Company estimates the amount of warranty claims on sold product that may be incurred based on current and historical data. The actual warranty expense could differ from the estimates made by the Company based on product performance.

REVENUE RECOGNITION – Revenue is recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate revenue primarily by manufacturing and delivering furniture products to independent furniture retailers in the United States. Each unit of furniture is a separate performance obligation. We satisfy our performance obligations when control of our product is passed to our customer, which is the point in time that our customers are able to direct the use of and obtain substantially all of the remaining economic benefit of the goods or services. Net sales consist of product sales and outbound shipping and handling charges for customer deliveries, net of adjustments for returns and allowances. Shipping and handling costs are included in cost of goods sold.

The Company’s revenues result from the sale of goods and reflect the consideration to which the Company expects to be entitled. Revenue is reduced by appropriate allowances, estimated returns, price concessions, or similar adjustments as applicable. The Company records revenue based on a five-step model in accordance with ASC 606, Revenue from Contracts with Customers. For its customer contracts, typically purchase orders, the Company identifies the performance obligations (goods), determines the transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when the performance obligation is transferred to the customer. A good is transferred when the customer obtains control of that good and risk of loss transfers at a point in time.

Provisions for customer volume rebates, product returns, discounts, and allowances are variable considerations and are recorded as a reduction of revenue in the same period the related sales are recorded. Such provisions are calculated based upon historical data and discount percentages, set with each customer. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent there is a distinct good or service and evidence of the fair value of the advertising, in which case the expense is classified as selling, general and administrative expense (SG&A).

The Company has a limited lifetime warranty on all products. The Company does not offer the option to purchase warranties. The Company accounts for warranties under ASC 460, Guarantees, and not as variable consideration related to revenue.

Occasionally, the Company receives deposits from customers before it has transferred control of the product to customers, resulting in contract liabilities. These contract liabilities are reported within “Accounts payable - trade” in the consolidated balance sheets. As of June 30, 2025, the Company had $0.25 million of customer deposits. As of June 30, 2024, the Company had $0.14 million of customer deposits.

The Company follows the following practical expedients and policy elections:

The Company does not adjust contract prices for the effects of a significant financing component, as it expects the period when the goods or services are transferred to the customer and when the customer pays for those goods and services to be less than a year.
Costs for outbound shipping and handling activities that occur after the product is received in the Company’s distribution centers, but before the customer obtains control of the product are accounted for as fulfillment activities. Accordingly, these expenses are recorded at the same time the Company recognizes revenue. Inbound shipping and handling activities incurred to transport product to the Company’s distribution centers is expensed when the product is received by the Company, unless there are revenue surcharges to recover such costs, in which case these expenses are recorded at the same time the Company recognizes revenue.
Incremental costs of obtaining a contract, specifically commissions, are recorded as an SG&A expense when incurred.
All taxes imposed on and concurrent with revenue-producing transactions and collected by the Company from a customer, including sales, use, excise, and franchise taxes are excluded from the measurement of the transaction price.

ADVERTISING COSTS – are charged to selling, general and administrative expenses in the periods incurred. The Company conducts no direct-response advertising programs and there are no assets related to advertising recorded on the consolidated balance sheets. Advertising expenditures, primarily shared customer advertising in which an identifiable benefit is received and national trade-advertising programs, were approximately $3.4 million, $5.9 million, and $5.1 million in fiscal years 2025, 2024, and 2023, respectively.

DESIGN, RESEARCH, AND DEVELOPMENT COSTS – are charged to selling, general and administrative expenses in the periods incurred. Expenditures for design, research, and development costs were approximately $2.1 million, $2.1 million, and $2.1 million in fiscal years 2025, 2024, and 2023, respectively.

INSURANCE – The Company is self-insured for health care and most workers’ compensation up to predetermined amounts above which third-party insurance applies. The Company purchases specific stop-loss insurance for individual health care claims in excess of $175,000 per plan year. For workers’ compensation, the Company retains the first $250,000 per claim and purchases excess coverage up to the statutory limits for amounts in excess of the retention limit. Losses are accrued based upon the Company’s estimates of the aggregate liability for claims incurred using certain actuarial assumptions followed in the insurance industry and based on Company experience. The Company records these insurance accruals within “Accrued liabilities – insurance” on the consolidated balance sheets.

INCOME TAXES – The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company recognizes in its financial statements the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. In December 2019, the FASB issued ASU 2019-12 “Income Taxes Simplifying the Accounting for Income Taxes (Topic 740)” as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for interim period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.

EARNINGS PER SHARE (EPS) – Basic EPS of common stock is based on the weighted-average number of common shares outstanding during each fiscal year. Diluted EPS of common stock includes the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options, shares associated with the long-term management incentive compensation plan and non-vested restricted shares. The Company calculates the dilutive effect of outstanding options using the treasury stock method; all options are anti-dilutive when there is a loss. Anti-dilutive shares are not included in the computation of diluted EPS when their exercise price was greater than the average closing market price of the common shares. The Company calculates the dilutive effect of shares related to the long-term management incentive compensation plan and non-vested shares based on the number of shares, if any, that would be issuable if the end of the fiscal year were the end of the contingency period. In computing EPS, net income as reported for each respective period is divided by the fully diluted weighted average number of shares outstanding:

	June 30,
(in thousands)	2025		2024		2023
Basic shares		5,249		5,170		5,225
Potential common shares:
Stock options		100		117		62
Long-term incentive plan		329		232		98
Diluted shares		5,678		5,519		5,385
Anti-dilutive shares		6		37		161

STOCK–BASED COMPENSATION – The Company recognizes compensation expense related to the cost of employee services received in exchange for Company equity interests based on the award’s fair value at the date of grant. The Company recognizes long-term incentive compensation plan expenses during the three-year performance periods; stock awards are issued following the end of the performance periods and are subject to verification of results and the Compensation Committee of the Board of Directors approval. See Note 11, Stock-Based Compensation.

SEGMENT REPORTING – The Company operates as one operating segment and one reportable segment, furniture products. The Company’s operations involve the distribution of manufactured and imported furniture for the residential market. The Company’s furniture products are sold primarily throughout the United States by the Company’s internal sales force and various independent representatives. The Company has minimal export sales, primarily to Canada or Mexico. No single customer accounted for more than 10% of net sales. See Note 12, Segment Information.

TREASURY STOCK – Treasury stock purchases are stated at cost and presented as a reduction of equity on the consolidated balance sheets. As of June 30, 2025, the Company has purchased a total of 3,207,158 shares at a cost of $71.7 million under approved share repurchase programs and has $30 million remaining in the share repurchase program approved in December 2024.

RECENT ACCOUNTING STANDARDS PENDING ADOPTION – In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the disclosure impacts of this ASU on its consolidated financial statements

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023 09 “Improvements to Income Tax Disclosures.” The amendments in this ASU are intended to increase transparency through improvements to income tax disclosures primarily related to the income tax rate reconciliation and income taxes paid information. This ASU will become effective for us for the annual period beginning in fiscal year 2026, with early adoption permitted. The Company is currently evaluating the effect that the new guidance will have on our related disclosures, but do not expect this guidance will have a material impact on our financial position and results of operations.

RECENTLY ADOPTED ACCOUNTING STANDARDS – In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures which requires business entities to enhance segment disclosures about significant segment expenses and disclose the position and title of the chief operating decision maker. The ASU also requires that a public entity with a single reportable segment, like the Company, provide all of the disclosures required as part of ASU 2023-07 and all existing disclosures required by Topic 280. The ASU was adopted July 1, 2024, and has been applied retrospectively to all prior periods presented. The adoption did not have an impact on the Company’s consolidated balance sheets or results of operations. See Note 12, Segment Information.

2. LEASES

The Company accounts for its leases in accordance with ASU 842, Leases. ASC 842 requires lessees to (i) recognize a right-of-use asset (“ROU asset”) and a lease liability that is measured at the present value of the remaining lease payments on the Consolidated Balance Sheets, (ii) recognize a single lease cost, calculated over the lease term on a straight-line basis and (iii) classify lease-related cash payments within operating and financing activities. The Company made an accounting policy election to not recognize short-term leases on the Consolidated Balance Sheets and all non-lease components, such as common area maintenance, were excluded. At any given time during the lease term, the lease liability represents the present value of the remaining lease payments, and the ROU asset is measured as the amount of the lease liability, adjusted for pre-paid rent, unamortized initial direct costs, the remaining balance of lease incentives received, and any impairment. Both the lease ROU asset and lease liability are reduced to zero at the end of the lease term.

The Company leases distribution centers and warehouses, manufacturing facilities, showrooms, and office space. At the lease inception date, the Company determines if an arrangement is, or contains, a lease. Some of the Company’s leases include options to renew at similar terms. The Company assesses these options to determine if the Company is reasonably certain of exercising these options based on relevant economic and financial factors. Options that meet these criteria are included in the lease term at the lease commencement date.

For purposes of measuring the Company’s ROU asset and lease liability, the discount rate utilized by the Company was based on the average interest rates effective for the Company’s line of credit. Some of the Company’s leases contain variable rent payments, including common area maintenance and utilities. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

In July 2022, Flexsteel commenced a 12-year lease for a manufacturing facility in Mexicali, Mexico to support strong demand growth which was elevated due to pandemic-driven buying at that time. Subsequently, U.S. furniture demand reverted to pre-pandemic norms, and the Company’s plan for the facility pivoted to subleasing the space short-term while maintaining the option to utilize it longer term to support growth. While the Company secured multiple short-term sublease tenants at the beginning of the lease term, substantial changes in U.S. trade policy in early 2025 created significant uncertainty in US-Mexico trade relations, slowed foreign direct investment in Mexico, and greatly diminished tenant interest in subleasing the Mexicali facility. As a result, management concluded that the right of use asset related to this lease was not fully recoverable and recorded a pre-tax, non-cash asset impairment charge of $14.1 million during the quarter ended March 31, 2025. The fair value of the right of use asset on March 31, 2025, was estimated under the income approach using a discounted cash flow technique, including assumptions for future sublease rental income and an appropriate discount rate. This technique involves estimates and uncertainties and actual results could differ. The impairment charge is included within

operating income in the Consolidated Statements of Income and Comprehensive Income under right-of-use asset impairment. The remaining carrying value of the ROU asset related to the Mexicali lease was $13.5 million at June 30, 2025.

The components of the Company’s leases reflected on the Company’s consolidated statements of income were as follows:

(in thousands)	June 30, 2025		June 30, 2024
Operating lease expense	$	8,643	$	9,772
Variable lease expense		1,661		1,853
Total lease expense	$	10,304	$	11,625

Other information related to leases and future minimum lease payments under non-cancellable operating leases were as follows:

Fiscal year	June 30, 2025			June 30, 2024
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,698		$	9,502
Cash received from subleasing of operating lease:
Operating cash flows received from subleasing of operating lease	$	594		$	2,744
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	4,119		$	797
Weighted-average remaining lease term (in years):
Operating leases		7.2			8.2
Weighted-average discount rate:
Operating leases		4.0	%		3.1	%
Fiscal year				June 30, 2025
(in thousands)
Payments in FY2026				$	10,003
FY2027					10,166
FY2028					9,896
FY2029					8,817
FY2030					8,694
Thereafter					20,400
Total future minimum lease payments				$	67,976
Less imputed interest					8,606
Lease liability				$	59,370

3. INVENTORIES

A comparison of inventories is as follows:

	June 30,
(in thousands)	2025		2024
Raw materials	$	11,114	$	14,030
Work in process and finished parts	$	2,632		2,654
Finished goods	$	75,389		79,893
Total	$	89,135	$	96,577

4. PROPERTY, PLANT AND EQUIPMENT

A comparison of property, plant and equipment is as follows:

	Estimated	June 30,
(in thousands)	Life (Years)	2025			2024
Land		$	3,175		$	3,226
Buildings and improvements	5-39		38,455			41,968
Machinery and equipment	3-7		20,281			20,864
Delivery equipment	3-5		2,241			2,570
Furniture and fixtures	3-7		3,248			3,226
Computer software and hardware	3-7		10,118			10,033
Construction in progress			3,301			1,439
Total			80,819			83,326
Less accumulated depreciation			(44,607	)		(46,617	)
Net		$	36,212		$	36,709

The Company recognized no impairment charges for fiscal years 2025, 2024, and 2023.

5. RESTRUCTURING

Manufacturing Network Optimization

On February 5, 2024, the Company announced its plan to close its Dublin, Georgia manufacturing facility. The closure was completed in the fourth quarter of fiscal year 2024. As a result of the closure the Company incurred cumulative restructuring expense and related costs of $3.0 million as of June 30, 2024. See Note 6, Assets Held For Sale for more information.

The following is a summary of restructuring costs:

	For the years ended June 30,
(in thousands)	2025		2024		2023
One-time employee termination benefits		—		2,558		—
Fixed asset impairments		—		74		—
Other associated costs		—		350		—
Total restructuring and related expenses	$	—	$	2,982	$	—
Reported as:
Operating expenses	$	—	$	2,982	$	—

One-time employee termination benefits include costs for employee separation benefits.

During the year ended June 30, 2024, the Company recorded one-time employee termination benefits, fixed asset impairment charges and other associated costs related to the Dublin closure. Other associated costs include legal and professional fees, inventory and equipment transfer costs, and other transition costs.

All expenses related to the manufacturing network optimization restructuring plan were incurred and paid during the year ended June 30, 2024.

The roll forward of the accrued restructuring costs is as follows, for the years ended June 30, 2025, 2024, and 2023:

	One-time
	Employee			Fixed Asset			Other
	Termination			Impairment			Associated
(in thousands)	Benefits			Costs			Costs			Total
Accrual balance at June 30, 2023	$	—		$	—		$	—		$	—
Costs incurred		2,558			74			350			2,982
Expenses paid		(2,558	)		(74	)		(350	)		(2,982	)
Accrual balance at June 30, 2024	$	—		$	—		$	—		$	—
Costs incurred		—			—			—			—
Expenses paid		—			—			—			—
Accrual balance at June 30, 2025	$	—		$	—		$	—		$	—

6. ASSETS HELD FOR SALE

During fiscal year 2024, the Company committed to a restructuring plan to sell the Company's Dublin, Georgia location. As of December 31, 2024, the Company completed the sale and received proceeds of $6.7 million and recorded a pre-tax gain of $5.0 million.

During the quarter ended March 31, 2025, the Company completed the sale of an ancillary building which was formerly part of the Company's Huntingburg, Indiana distribution center complex. The Company received proceeds of $0.8 million and recorded a pre-tax gain of $0.7 million related to the sale.

During fiscal year 2025, the Company committed to a plan to sell a second ancillary building at the Huntingburg, Indiana distribution center complex. This property was recorded as held for sale at the quarter ended March 31, 2025, and the Company completed the sale during the quarter ended June 30, 2025. The Company received proceeds of $4.0 million and recorded a pre-tax gain of $3.7 million related to the sale.

There are no assets held for sale as of June 30, 2025.

7. OTHER NONCURRENT ASSETS

	June 30,
(in thousands)	2025		2024
VAT receivable		19,041		11,447
Other		872		879
Total	$	19,913	$	12,326

8. ACCRUED LIABILITIES – OTHER

	June 30,
(in thousands)	2025		2024
Dividends	$	1,255	$	973
Warranty		915		1,017
Income taxes		1,345		362
Other		3,802		4,675
Total	$	7,317	$	7,027

9. CREDIT ARRANGEMENTS

Effective as of the date of the Second Amendment to the Credit Agreement, borrowings under the amended Credit Agreement bear interest at SOFR plus 1.36% to 1.61% or an effective interest rate of 5.76% on June 30, 2025.

As of June 30, 2025, there were no outstanding borrowings under the Credit Agreement, exclusive of fees and letters of credit.

Letters of credit outstanding at the Lender as of June 30, 2025, totaled $0.9 million.

10. INCOME TAXES

The Company recognizes deferred tax assets to the extent that they believe the assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. As of June 30, 2023, it was determined the Company had reached a more-likely-than-not position that the Company will realize the entirety of its deferred tax assets. Therefore, the Company reversed the previously recorded valuation allowance against the federal and state deferred tax assets recorded as of June 30, 2022, of $9.8 million.

Income tax expense was calculated based upon the following components of income before income taxes for the years ended June 30:

(in thousands)	2025		2024		2023
United States	$	24,028	$	15,348	$	6,680
Outside the United States		2,938		202		2,539
Income before income taxes	$	26,966	$	15,550	$	9,219

The income tax (provision) benefit is as follows for the years ended June 30:

(in thousands)	2025			2024			2023
Federal - current	$	(7,847	)	$	(4,708	)	$	(799	)
State and other - current		(2,802	)		(1,768	)		(796	)
Deferred		3,837			1,454			7,154
Total	$	(6,812	)	$	(5,022	)	$	5,559

Reconciliation between the U.S. federal statutory tax rate and the effective tax rate is as follows for the years ended June 30:


Federal statutory tax rate	21.0		%	21.0		%	21.0		%
State taxes, net of federal effect	3.5			4.7			5.2
Foreign rate differential	0.9			2.1			2.8
Uncertain tax positions	0.6			1.1			(2.1	)
Stock based compensation	(4.1	)		(1.1	)		(0.5	)
Section 162(m)	4.0			4.2			2.5
Foreign adjustments	(0.2	)		1.7			(0.1	)
Expired state credits	—			0.6			17
Research & development credit	(2.0	)		(4.8	)		—
Remeasurement of deferred tax assets and valuation<br>allowance	(0.1	)		0.3			(106.7	)
State rate change and other state items	1.0			2.1			(0.5	)
Other	0.6			0.4			1.0
Effective tax rate	25.2		%	32.3		%	(60.3	)	%

The components of the gross liabilities related to unrecognized tax benefits and the related deferred tax assets are as follows:

	June 30,
(in thousands)	2025		2024
Gross unrecognized tax benefits	$	777	$	607
Accrued interest and penalties		210		172
Gross liabilities related to unrecognized tax benefits	$	987	$	779
Deferred tax assets		186		84
Valuation allowance		—		—
Net deferred tax assets	$	186	$	84

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)	2025			2024		2023
Balance at July 1	$	607		$	424	$	604
Reductions for tax positions of the prior year		—			—		—
Additions based on tax positions related to the current year		314			183		10
Lapse of statute of limitations		(154	)		—		(190	)
Addition for tax positions of the prior year		9			—		—
Balance at June 30	$	777		$	607	$	424

The Company records interest expense and penalties related to income taxes as income tax expense in the consolidated statements of income. The Company does not expect that there will be any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. The amount of unrecognized tax benefits as of June 30, 2025, and 2024 that if recognized, would affect the effective tax rate was $0.6 million and $0.4 million respectively.

The primary components of deferred tax assets and (liabilities) are as follows:

	June 30,
(in thousands)	2025			2024
Accounts receivable	$	432		$	602
Inventory		2,257			1,995
Self-insurance		31			22
Payroll and related		1,402			1,001
Accrued liabilities		524			668
Property, plant, and equipment		473			1,100
Investment tax credit		134			185
Valuation allowance		(31	)		(52	)
Net operating loss carryover		5			7
Lease assets		(10,042	)		(15,160	)
Lease liabilities		14,351			16,185
Research & development expenditure		2,722			1,909
Other		186			145
Total	$	12,444		$	8,607

On June 30, 2025, certain state tax attribute carryforwards of $0.2 million were available, with $0.2 million of credits expiring beginning in fiscal years 2026 through 2028, and $0.1 million of state NOLs carryforward. Some of the state NOL carryforwards will have an indefinite carryforward and some will expire in varying amounts between

2035

and

2041

. As of June 30, 2023, it was determined that the Company has reached a more-likely-than-not position that the Company will realize the entirety of its state attribute carryforwards and its U.S. federal deferred tax assets. The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. Generally, fiscal years 2021 through 2025 remain open to examination by the Internal Revenue Service or other taxing jurisdictions to which the Company is subject.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes a number of provisions which impact the United States tax code. The regulations impacting the tax code have multiple effective dates ranging from fiscal years beginning January 1, 2025, to fiscal years beginning January 1, 2027. The Company has not adjusted its provision for income tax or measurement of deferred tax assets as of June 30, 2025, based on the changes that may be triggered by the OBBBA due

to the law being signed on July 4, 2025. The Company is currently assessing the impact of the OBBBA but does not expect it to have a material impact on our financial position and results of operations.

11. STOCK-BASED COMPENSATION

The Company accounts for its stock-based compensation plans in accordance with ASC 718, Stock Compensation, which requires the Company to measure all share-based payments at grant date fair value and recognize the cost over the requisite service period. Restricted shares and restricted stock units (“RSUs”) generally vest over 1 to 3 years. Stock options are granted at an exercise price equal to the fair value of the Company’s common stock price at the grant date and are exercisable for up to 10 years from the date of grant. Stock-based compensation is included in selling, general and administrative expenses on the Consolidated Statements of Income and Comprehensive Income. Forfeitures are recognized as incurred.

Total stock-based compensation expense was $3.9 million, $4.6 million and $3.2 million for fiscal years 2025, 2024, and 2023, respectively.

On December 14, 2022, the Company’s shareholders approved the Flexsteel Industries, Inc. 2022 Equity Incentive Plan (“2022 Plan”).

The 2022 Plan replaces the Long-Term Incentive Compensation Plan (“LTIP”) and the 2013 Omnibus Stock Plan (collectively, the “Prior Plans”) and no further awards will be made under either of the Prior Plans, but these Prior Plans will continue to govern awards previously granted under them.

2022 Equity Incentive Plan

The 2022 Plan is a long-term incentive plan pursuant to which awards may be granted to certain employees, independent contractors and directors of the Company, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other stock-based awards. For periods beginning on or after July 1, 2023, restricted stock units ("RSUs") and performance stock units ("PSUs") granted to officers and key employees as part of long-term compensation programs are issued from the 2022 Plan. RSUs and PSUs awarded from the 2022 Plan are included in the Long-Term Incentive Compensation or Restricted Share and RSUs tables below.

Long-Term Incentive Compensation Plan (“LTIP”)

The LTIP provides for PSUs to be awarded to officers and key employees based on performance goals set by the Compensation Committee of the Board of Directors (the “Committee”). In conjunction with each grant of PSUs, the Committee granted RSUs under the 2013 Omnibus Stock Plan that vested at the end of three years. No further awards will be issued under this plan.

2013 Omnibus Stock Plan

The 2013 Omnibus Stock Plan was for key employees, officers and directors and provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance units. No further stock units will be granted under this plan.

Long-Term Incentive Compensation

The table below sets forth, as of June 30, 2025, the number of unvested PSUs granted at the target performance level for the 2023-2025, 2024-2026, and 2025-2027 performance periods under the 2022 Plan and LTIP (as applicable) and the number of unvested RSUs granted in conjunction with the PSUs. For PSUs awarded for the three year performance periods ending June 2025, 2026 and 2027, achievement is based on meeting performance goals set for each year within the three year period. The Committee selected Adjusted Operating Income as the performance metric for the performance periods ending June 2025, 2026, and 2027:

	Time Based Vest					Performance Based Vest					Total
				Weighted average					Weighted average					Weighted average
				fair value					fair value					fair value
(shares in thousands)	Shares			per share		Shares			per share		Shares			per share
Unvested as of June 30, 2023		79		$	24.56		211		$	19.19		290		$	20.65
Granted		66			18.91		99			18.91		165			18.91
Vested		(21	)		42.31		(75	)		12.15		(96	)		18.76
Forfeited		(27	)		20.80		(53	)		18.76		(80	)		19.45
Unvested as of June 30, 2024		97		$	17.92		182		$	22.07		279		$	20.65
Granted		31			31.66		46			31.66		77			31.66
Vested		—			—		—			—		—			—
Forfeited		—			—		(37	)		39.07		(37	)		39.07
Unvested as of June 30, 2025		128		$	21.25		191		$	21.09		319		$	21.17

Total unrecognized stock-based compensation related to the unvested PSUs at the target performance level and the related unvested RSUs was $2.2 million as of June 30, 2025, which is expected to be recognized over a period of

0.9

years.

Restricted Shares and RSUs

A summary of the activity in the Company’s unvested restricted shares and unvested RSUs, not granted in conjunction with PSUs, as of June 30, 2025, is presented below:

				Weighted average
	Shares			fair value
	(in thousands)			per share
Unvested as of June 30, 2023		74		$	21.67
Granted		4			21.14
Vested		(58	)		21.71
Forfeited		(4	)		19.40
Unvested as of June 30, 2024		16		$	21.96
Granted		4			31.66
Vested		(3	)		21.53
Forfeited		—			20.33
Unvested as of June 30, 2025		17		$	24.32

Total unrecognized stock-based compensation related to unvested restricted shares and unvested RSUs (not granted in conjunction with the PSUs) was $0.2 million as of June 30, 2025, which is expected to be recognized over a weighted average period of

1.1

years.

Options

No stock options were granted during fiscal years 2025, 2024, and 2023.

A summary of the activity of the Company’s stock option plans during the years ended June 30, 2025, 2024, and 2023, is presented below:

				Weighted
	Shares			Average
	(in thousands)			Exercise Price
Outstanding at June 30, 2023		202		$	20.98
Granted		—			—
Exercised		(3	)		32.13
Cancelled		(19	)		27.40
Outstanding at June 30, 2024		180		$	20.01
Granted		—			—
Exercised		(102	)		19.49
Cancelled		(12	)		35.36
Outstanding at June 30, 2025		66		$	18.02

The following table summarizes information for options outstanding at June 30, 2025:

		Options		Weighted Average
Range of		Outstanding		Remaining		Exercise
Prices		(in thousands)		Life (Years)		Price
$	9.97 - 15.14		43		4.8	$	10.62
	18.30 - 19.72		6		5.9		18.30
	21.96 - 27.57		3		3.5		24.49
	31.06 - 32.80		6		3.2		32.40
	43.09 - 47.45		8		1.3		44.39
$	9.97 - 47.45		66		4.3	$	18.02

The Company does not have any unrecognized stock-based compensation expense related to options.

Stock-based compensation granted outside a plan

During the quarter ended June 30, 2020, the Company awarded its former Chief Financial Officer/Chief Operating Officer (current Chief Executive Officer) 79,000 options outside of any Company stock plans. All 79,000 options remain outstanding as of June 30, 2025, with an exercise price of $9.97 and a remaining life of

4.8

years. There is no remaining unrecognized stock-based compensation expense related to these options.

12. SEGMENT INFORMATION

As disclosed in Note 1 – Summary of Significant Accounting Policies, the Company operates as a single operating segment and reportable segment reflecting the integrated nature of its operations across various products, manufacturing platforms and sales channels across the entire United States.

The Company's chief operating decision maker (“CODM”) is its President and Chief Executive Officer, who has final authority over the allocation of resources, assessment of performance, and key operating decisions.

The CODM manages the business on a consolidated basis and measures segment performance using operating income and net income, which the Company believes provide the best analysis of business performance. The CODM analyzes the performance of operating income and net income to provide insight into all aspects of the segment’s operations and overall success for a given period. In addition, the CODM reviews significant segment expenses focused on cost of sales, selling and general administrative expenses, and restructuring charges, net. These costs used to measure segment profitability are the same costs already reported in the accompanying Consolidated Statements of Income and Comprehensive Income. Similarly, segment assets are reported in the accompanying Consolidated Balance Sheets. The Company has minimal export sales, primarily to Canada or Mexico. The Company leases and operates three manufacturing facilities in Juarez, Mexico and leases one manufacturing facility in Mexicali, Mexico. Long-lived assets, including property, plant & equipment and right-of-use assets related to leases, located in the United States and Mexico totaled $42.4 million and $35.4 million, respectively, at June 30, 2025 and $46.6 million and $51.5 million, respectively, at June 30, 2024, respectively.

13. BENEFIT AND RETIREMENT PLANS

Defined Contribution and Retirement Plans

The Company sponsors a defined contribution retirement plan, which covers substantially all employees. The Company’s total matching contribution expense was $1.6 million, $1.8 million, and $1.6 million in fiscal years 2025, 2024, and 2023, respectively.

Multi-employer Pension Plans

The Company contributes to one multi-employer defined benefit pension plan under the terms of collective-bargaining agreements that cover its union-represented employees.

The Company’s participation in the current and previous defined benefit pension plans for the fiscal year ended June 30, 2025, is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2025 and 2024 is for the plan’s year-end on December 31, 2024, and 2023, respectively. The zone status is based on information that the Company received

from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are between 65 percent and 80 percent funded, and plans in the green zone are at least 80 percent funded.

		Pension Protection										Expiration Date	Number of
		Act Zone Status			Company Contributions							of Collective	Company
	EIN/Pension	June 30,		Rehabilitation	(in thousands)						Surcharge	Bargaining	Employees
Pension Fund	Plan Number	2025	2024	Plan Status	2025		2024		2023		Imposed	Agreement	in Plan
Central States SE and <br>SW Areas Pension Fund	366044243	Red	Red	Implemented	$	113	$	109	$	115	No	3/31/2025		7
					$	113	$	109	$	115

14. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to various other legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of the Company’s business. The Company does not consider any of such other proceedings that are currently pending, individually or in the aggregate, to be material to its business or likely to result in a material effect on its consolidated operating results, financial condition, or cash flows.

15. QUARTERLY FINANCIAL INFORMATION – UNAUDITED

(in thousands, except per share amounts)	For the Quarter Ended
	September 30		December 31(a)		March 31(b)			June 30(c)
Fiscal 2025:
Net sales	$	104,007	$	108,483	$	113,972		$	114,611
Gross profit		22,367		22,805		25,336			27,436
Operating income		6,047		11,654		(5,060	)		13,974
Net income		4,140		9,054		(3,742	)		10,702
Earnings per share:
Basic	$	0.80	$	1.73	$	(0.71	)	$	2.03
Diluted	$	0.74	$	1.62	$	(0.71	)	$	1.89

During the quarter ended December 31, 2024, the Company completed the sale of its Dublin, GA manufacturing facility. See Note 6, Assets Held for Sale of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for mor information.
During the quarter ended March 31, 2025, the Company determined that the carrying amount of the right of use asset associated with its 12-year lease for a manufacturing facility in Mexicali, Mexico was no longer fully recoverable and recorded a pre-tax non-cash asset impairment charge of $14.1. See Note 2, Leases, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information. In addition, during the quarter, the Company completed the sale of an ancillary building, formerly part of its Huntingburg, IN distribution center complex. The Company recorded a pre-tax gain of $0.7 million related to the sale.
During the quarter June 30, 2025, the Company completed the sale of a second ancillary building, formerly part of its Huntingburg, IN distribution center complex. The Company recorded a pre-tax gain of $3.7 million related to the sale.

	For the Quarter Ended
	September 30		December 31(a)		March 31		June 30(b)
Fiscal 2024:
Net sales	$	94,603	$	100,108	$	107,219	$	110,822
Gross profit		18,410		21,950		23,317		23,567
Operating income		1,918		4,584		2,982		7,596
Net income		752		3,051		1,803		4,922
Earnings per share:
Basic	$	0.15	$	0.59	$	0.35	$	0.95
Diluted	$	0.14	$	0.57	$	0.33	$	0.89

During the quarter ended March 31, 2024, the Company recorded expense of $2.6 million as a result of the restructuring activity associated with the closure of the Dublin, Georgia facility. See Note 5 Restructuring, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.
During the quarter June 30, 2024, the Company recorded income of $3.3 million associated with the sale of the Starkville, Mississippi facility. See Note 6, Assets Held for Sale, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information. The Company recorded expense of $0.4 million as a result of the restructuring activity associated with the closure of the Dublin, Georgia facility. See Note 5 Restructuring, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

16. SUBSEQUENT EVENTS

There are no subsequent events as of August 22, 2025.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of disclosure controls and procedures – Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, the Company’s chief executive officer and chief financial officer have concluded that disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective as of June 30, 2025.

Management’s Annual Report on Internal Control Over Financial Reporting – Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) of the Securities Exchange Act of 1934, as amended. The Company performed an evaluation under the supervision and with the participation of its management, including the CEO and CFO, to assess the effectiveness of the design and operation of its disclosure controls and procedures under the Exchange Act as of June 30, 2025. In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on those criteria, management concluded that the internal control over financial reporting is effective as of June 30, 2025.

The effectiveness of the Company’s internal control over financial reporting as of June 30, 2025, has been audited by Deloitte & Touche LLP, the Company’s independent registered public accounting firm, as stated in their report in Part II, Item 8 of this Form 10-K.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Rule 10b5-1 Trading Plans

During the quarter ended June 30, 2025, no director or officer of the Company adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408(a) of Regulation S-K.

Benefit Plan Amendments

Effective August 19, 2025, the Company amended its “Cash Incentive Plan,” “Cash Incentive Notification of Award,” and “Severance Plan for Management Employees” to align plan terms with current peer and market practices and improve administrative consistency. Revisions include the removal of outdated tax code references and the alignment of key definitions such as “retirement,” “change in control,” “termination for cause”, “disability”, and “good reason” across benefit plans. Amendments to the “Severance Plan for Management Employees” also include an increase to the change of control protection period to 24 months after termination and an increase to the chief executive officer severance benefits to twice the severance benefits of other eligible employees. The amended “Cash Incentive Plan,” “Cash Incentive Notification of Award,” and “Severance Plan for Management Employees” have been attached to this Form 10-K as Exhibits 10.1, 10.2 and 10.11, respectively.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

None.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

In accordance with General Instruction G(3) to Form 10-K, the Company intends to file with the SEC the information required by this item not later than 120 days after the end of the fiscal year covered by this Form 10-K.

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

PART IV

Item 15. Exhibits, Financial Statements and Schedules

Financial Statements and Financial Statement Schedules

See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K. Schedule II is included in Part II, Item 8, and all other financial statement schedules have been omitted because they are not required or are not applicable or because the information required in those schedules either is not material or is included in the consolidated financial statements or the accompanying notes.

Exhibits

The exhibits listed in the accompanying index to exhibits are filed or incorporated as part of this Annual Report on Form 10-K.

The following financial statement schedule for the years ended June 30, 2025, 2024, and 2023 is submitted herewith:

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended June 30, 2025, 2024, and 2023

(in thousands)	Balance at<br>Beginning of		(Additions)<br>Reductions to			Deductions from			Balance at End
Description	Year		Income			Reserves			of Year
Accounts Receivable Allowances:
2025	$	2,440	$	(244	)	$	(406	)	$	1,790
2024	$	2,600	$	(144	)	$	(16	)	$	2,440
2023	$	2,980	$	(230	)	$	(150	)	$	2,600

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			FLEXSTEEL INDUSTRIES, INC.
Date:	August 22, 2025	By:	/s/ Derek P. Schmidt
			Derek P. Schmidt
			Chief Executive Officer and Director
			(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:	August 22, 2025	/s/ Derek P. Schmidt
		Derek P. Schmidt
		Chief Executive Officer and Director<br><br>(Principal Executive Officer)
Date:	August 22, 2025	/s/ Michael J. Ressler
		Michael J. Ressler
		Chief Financial Officer<br><br>(Principal Financial Officer and Principal Accounting Officer)
Date:	August 22, 2025	/s/ Thomas M. Levine
		Thomas M. Levine
		Chair of the Board of Directors
Date:	August 22, 2025	/s/ William S. Creekmuir
		William S. Creekmuir
		Director
Date:	August 22, 2025	/s/ F. Brooks Bertsch
		F. Brooks Bertsch
		Director
Date:	August 22, 2025	/s/ Kathryn P. Dickson
		Kathryn P. Dickson
		Director
Date:	August 22, 2025	/s/ M. Scott Culbreth
		M. Scott Culbreth
		Director
Date:	August 22, 2025	/s/ Jeanne McGovern
		Janne McGovern
		Director
Date:	August 22, 2025	/s/ Terence P. Calloway
---	---	---
		Terence P. Calloway
		Director

Exhibit Index

Exhibit No.
3.1	Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Form 8-K, as filed with the Securities and Exchange Commission on December 7, 2016).
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Form 8-K, as filed with the Securities and Exchange Commission on March 8, 2024).
4.1	Description of the Company’s common stock (incorporated by reference to Exhibit No. 4.1 to the Annual Report on Form 10-K for the fiscal year ended June 30, 2019).
10.1	Amended Cash Incentive Compensation Plan, dated August 19, 2025.† *
10.2	Form of Notification of Award for the Cash Incentive Compensation Plan.† *
10.3	Form of Notification of Award for the Long-Term Incentive Compensation Plan (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.4	Form of Notification of Award for incentive stock options issued under the Omnibus Stock Plan (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.5	Form of Notification of Award for director non-qualified stock options issued under the Omnibus Stock Plan (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 13, 2013). *
10.6	Form of Notification of Award for restricted stock units under the Omnibus Stock Plan (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.7	Long-Term Incentive Compensation Plan, dated July 1, 2013 (incorporated by reference to Appendix B to the Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 28, 2013). *
10.8	Form of Notification of Non-Statutory Stock Option Award (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.9	Amended and Restated Omnibus Stock Plan (incorporated by Reference to the Form 8-K filed with the Securities and Exchange Commission on December 15, 2020). *
10.10	Form of Notification of Restricted Stock Award under the Omnibus Stock Plan (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.11	Amended Severance Plan for Management Employees dated August 19, 2025, including Form of Participation Agreement.† *
10.12	Letter Agreement dated March 10, 2020, by and between Flexsteel Industries, Inc. and Derek P. Schmidt (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on March 18, 2020). *
10.13	Employment Agreement between the Company and Derek P. Schmidt dated April 25, 2024 (incorporated by reference to the Form 8-K filed with the Securities and Exchange Commission on April 29, 2024).*
10.14	Credit Agreement between Flexsteel Industries, Inc. and Wells Fargo Bank, National Association, dated September 8, 2021 (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on September 8, 2021).
---	---
10.15	First Amendment to the Credit Agreement between Flexsteel Industries, Inc. and Wells Fargo Bank, National Association, dated April 22, 2022 (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on August 26, 2022).
10.16	Second Amendment to the Credit Agreement between Flexsteel Industries, Inc. and Wells Fargo Bank, National Association, dated May 24, 2023 (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on August 25, 2023).
10.17	Third Amendment to the Credit Agreement between Flexsteel Industries, Inc. and Wells Fargo Bank, National Association, dated June 3, 2025 (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on June 3, 2025).
10.18	Letter Agreement dated January 10, 2024 by and between Flexsteel Industries, Inc. and Michael Ressler (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on January 11, 2024). *
10.19	2022 Equity Incentive Plan (incorporated by reference to Form 8-K filed with the Securities and Exchange Commission on December 16, 2022). *
10.20	Form of Stock Option Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Form 10-Q filed with the Securities and Exchange Commission on February 8, 2023). *
10.21	Form of Performance Share Unit Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on August 25, 2023). *
10.22	Form of Restricted Stock Unit Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on August 25, 2023). *

19.1	Flexsteel Industries, Inc. Insider Trading Policy.†
21.1	Subsidiaries of the Company. †
23	Consent of Independent Registered Public Accounting Firm. †
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. †
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. †
32	Certification by Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
97.1	Incentive Compensation Clawback Policy adopted October 6, 2023 (incorporated by reference to Form 10-K filed with the Securities and Exchange Commission on August 30, 2024).
*	Management contracts, compensatory plans and arrangements required to be filed as an exhibit to this report.
†	Filed herewith
101.INS	XBRL Instance Document**
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104.Cover Page	Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
**	In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed.”

EX-10.1

FLEXSTEEL INDUSTRIES, INC.

AMENDED CASH INCENTIVE COMPENSATION PLAN Effective August 19, 2025

ESTABLISHMENT AND PURPOSE

Flexsteel Industries, Inc. established the Flexsteel Industries, Inc. Cash Incentive Compensation Plan, effective July 1, 2013, for the benefit of its employees. The Cash Incentive Compensation Plan was amended effective August 19, 2025. The Plan is intended to align incentive compensation with performance measures that drive the Company’s market value. The Plan is also designed to promote the accomplishment of management’s objectives as reflected in the Company’s operating plan and in the objectives established by management for employees, and to recognize the achievement of management’s objectives through the payment of incentive compensation. The terms of the Plan, as set forth herein, shall apply to Awards granted under the Plan on and after the Effective Date. Except as otherwise provided, Awards granted under the Company’s incentive compensation plans in effect prior to the Effective Date shall be governed by the terms of such plans.

The Plan provides for cash incentive payments to employees based upon the achievement of pre-established Performance Goals. The Company may adopt a variety of incentives under the Plan provided such programs are based on the Performance Goals described herein.

DEFINITIONS
The capitalized terms used in the Plan have the meanings set forth below.
“Award” or “Awards” means an award of incentive compensation under the Plan granted to a Participant in accordance with the terms set forth herein.
“Base Salary,” of a Participant for a Performance Period, means the annualized base compensation payable to the Participant determined by the salary rate in effect on the first day of the Performance Period. The salary rate shall be determined without regard to reductions or deferrals of compensation under qualified and non-qualified plans or welfare benefit plans. The salary rate shall be determined without regard to fringe benefits, incentive compensation or other payments in addition to the Participant’s base compensation.
“Board” means the Board of Directors of the Company, as constituted at the relevant time.
“CEO” means the Chief Executive Officer of the Company at the relevant time.
“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time or any successor statute.
“Committee” means the Compensation Committee of the Board, or any other committee of the Board consisting solely of two or more Non-Employee Directors designated by the Board to administer the Plan under Plan Section 3.1.

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“Company” means Flexsteel Industries, Inc., a Minnesota corporation, or any successor to all or substantially all of its businesses by merger, consolidation, purchase of assets or otherwise.
“Disability” or “Disabled,” with respect to a Participant, means that the Participant satisfies the requirements to receive long-term disability benefits under the Company-sponsored group long -term disability plan in which the Participant participates without regard to any waiting periods, or that the Participant has been determined by the Social Security Administration to be eligible to receive Social Security disability benefits; provided, however that a Participant shall not be considered Disabled unless the Participant is considered “Disabled” within the meaning of Code Section 409A. A Participant shall not be considered to be “Disabled” unless the Participant furnishes proof of the Disability to the Company in such form and manner as the Company may require.
“Effective Date” means July 1, 2013, if the Plan is approved by the requisite vote of Shareholders at the 2013 Annual Meeting of Shareholders, or any adjournment thereof.
“Eligible Employee,” for any Performance Period any employee of the Company designated to participate in the Plan for such Performance Period. An employee who is designated as eligible to participate in the Plan for a particular Performance Period is not necessarily eligible to participate in the Plan for any other Performance Period.
“Insider,” as of a particular date, means any person who, as of that date is an officer of the Company as defined under Exchange Act Rule 16a-1(f) or its successor provision. Generally, only Executive Officers, as defined in the Company’s governing documents, are considered “Insiders.”
“Non-Employee Director” means a member of the Board who is considered a non-employee director within the meaning of Exchange Act Rule 16b-3(b)(3) or its successor provision.
“Notification of Award” means a written document containing the terms and conditions of an Award in such form and not inconsistent with the Plan as the Committee (or its delegate) shall approve from time to time, together with all amendments thereto, which amendments may be unilaterally made by the Company (with the approval of the Committee or its delegate) unless such amendments are deemed by the Committee or its delegate to be materially adverse to the Participant and not required as a matter of law.
“Participant” means a person to whom an Award is or has been made in accordance with the Plan.
“Performance Goals,” of a Participant for a Performance Period, are the goals established for the Performance Period, the achievement of which is a condition for receiving an Award under the Plan. A Performance Goal may be adjusted during a Performance Period to prevent dilution or enlargement of an Award as a result of extraordinary events or circumstances as determined by the Committee or to exclude the effects of extraordinary, unusual or non-recurring events, changes in accounting principles, discontinued operations, acquisitions, divestitures and material restructuring charges. Performance Goals may be based

Cash Incentive Compensation Plan 2 of 9
on one or more of the following criteria and may be based on attainment of a particular level of or positive change in consolidated (company-wide) or subsidiary, division or operating unit financial measures: (1) pre-tax or after-tax income (before or after allocation of corporate overhead and incentive compensation), (2) net income, (3) reduction in expenses, (4) operating income, (5) earnings (including earnings before taxes, earnings before interest and taxes, or earnings before interest, taxes, depreciation and amortization), (6) gross revenue, (7) working capital, (8) profit margin or gross profits, (9) share price, (10) cash flow, free cash flow or cash flow per share (before or after dividends), (11) cash flow return on investment, (12) return on capital (including return on total capital or return on invested capital), (13) return on assets or net assets, (14) market share, (15) pre-tax or after-tax earnings per share, (16) operating earnings per share, (17) total stockholder return, (18) growth measures, including revenue growth, as compared with a peer group or other benchmark, (19) economic value-added models or equivalent metrics, (20) comparisons with various stock market indices, (21) improvement in or attainment of expense levels or working capital levels, (22) operating margins, gross margins or cash margins, (23) year-end cash, (24) debt reductions, (25) stockholder equity, (26) regulatory achievements, (27) implementation, completion or attainment of measurable objectives with respect to research, development, products or projects, production volume levels, acquisitions and divestitures, (28) leadership, recruiting, developing and maintaining personnel, (29) customer satisfaction, (30) operating efficiency, productivity ratios, (31) strategic business criteria, consisting of one or more objectives based on meeting specified revenue, market penetration, geographic business expansion goals (including accomplishing regulatory approval for projects), cost or cost savings targets, accomplishing critical milestones for projects, and goals relating to acquisitions or divestitures, or any combination thereof (in each case before or after such objective income and expense allocations or adjustments as the Committee may specify within the applicable period).
“Performance Period” means, generally, the Company’s fiscal year. However, the Committee (or the Committee’s delegate) may, in its discretion, designate a shorter or longer Performance Period.
“Plan” means this Flexsteel Industries, Inc. Amended Cash Incentive Compensation Plan, as may be amended and in effect from time to time.
“Retirement Date,” of a Participant, means the date on or after the Participant has reached a minimum age of 55 and a minimum length of service of 10 years.
“Separation from Service,” of a Participant, has the meaning set forth in Code Section 409A(a)(2)(A)(i).
“Target Performance Award” means a dollar amount (which may be expressed as a percentage of Base Salary) established for a Participant if the Performance Goal for the Participant is achieved at the target level. The Target Performance Award may also state the maximum amount that may be paid to the Participant for achievement of goals above the target level.
ADMINISTRATION AND INDEMNIFICATION

Cash Incentive Compensation Plan 3 of 9
Administration.
The Committee shall administer the Plan. The Committee shall have exclusive power to:
make Awards,
determine when and to whom Awards will be granted, the form of each Award, the amount of each Award, and any other terms or conditions of each Award consistent with the Plan, and
determine whether, to what extent and under what circumstances Awards may be or canceled, forfeited, or suspended. Each Award shall be subject to a Notification of Award authorized by the Committee (or its delegate). A majority of the members of the Committee shall constitute a quorum for any meeting of the Committee, and acts of a majority of the members present at any meeting at which a quorum is present, or the acts unanimously approved in writing by all members of the Committee shall be the acts of the Committee.
Notwithstanding anything in Section 3.1(a) to the contrary, the CEO shall have the authority to carry out the functions described in Section 3.1(a) with respect to Employees who are not Officers of the Company, provided that the aggregate dollar amount of all Awards granted by the CEO for any Performance Period shall not exceed such percentage of the dollar amount authorized by the Board pursuant to Section 5.2 for all Awards granted under the Plan for the Performance Period, as shall be determined by the Committee from time to time. The CEO shall be considered the Committee’s delegate for these purposes under the Plan.
To the extent within its discretion, the Committee (or its delegate) may amend the terms and conditions of any outstanding Award.
The Committee’s (or its delegate’s) interpretation of the Plan and of any Award or Notification of Award and all related decisions or resolutions of the Board or Committee shall be final and binding on all parties with an interest therein. Consistent with its terms, the Committee (or its delegate) shall have the power to establish, amend, or waive regulations to administer the Plan. In carrying out any of its responsibilities, the Committee (or its delegate) shall have discretionary authority to construe the terms of the Plan and any Award or Notification of Award made under the Plan.
Indemnification. Each person who is or shall have been a member of the Committee, or of the Board, and any other person to whom the Committee delegates authority under the Plan, shall be indemnified and held harmless by the Company, to the extent permitted by law, against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act, made in good faith, under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such action, suit or proceeding against such person, provided such person shall give the Company an opportunity, at the Company’s expense, to handle and defend the same before such person undertakes to handle and defend it on such person’s own

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behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person or persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
ELIGIBILITY TO PARTICIPATE

Participation in the Plan is limited to Eligible Employees. Prior to, or within an administratively reasonable period of time following, the beginning of a Performance Period, the Committee (or its delegate) shall determine which employees are Eligible Employees for the Performance Period. An Eligible Employee shall become a Participant only upon approval by the Committee (or its delegate) and compliance with such terms and conditions as the Committee or Committee may from time to time establish for the implementation of the Plan.

GENERAL TERMS OF THE AWARDS

A Participant’s Award for a Performance Period is determined as follows:

Form of Award. Awards under the Plan will be made in the form of cash.
Establishing Maximum Dollar Amount Available for Awards under the Plan, Performance Goals, and Target Performance Awards. Prior to the beginning of a Performance Period or as soon thereafter as administratively reasonable, the Board shall determine the maximum dollar amount available for all Awards under the Plan for the Performance Period. Prior to the beginning of a Performance Period or as soon thereafter as administratively reasonable, the Committee (or its delegate, in the case of Participants who are not Covered Employees) shall establish the Performance Goal or Goals and each Participant’s Target Performance Award. The Committee will notify each Participant of the Award, the criteria to earn the Award, and the grant date of the Award as soon as administratively practicable after the Committee makes this determination.
Calculation of Awards. Following the close of a Performance Period, the Committee (or its delegate) shall determine the actual Award payable to a Participant by (i) multiplying the percentage achievement of the Performance Goal against (ii) the Target Performance Award to determine the Participant’s Award for the Performance Period. No Award will be paid to a Participant if the percentage achievement of a Performance Goal is below any minimum level of performance established for such Performance Goal.
Adjustments and Certifications of Awards. Once the determination in section 5.3 is made, the Committee (or its delegate in the case of a Participant who is not an Officer of the Company), as appropriate, shall review the amount of each Award and make any adjustments it, in its sole discretion, deems appropriate to the amount of the Award. In general, each Participant’s Award will be the amount pre-established (when the Performance Goals were established) for achievement of the Performance Goals at the achievement levels described in Section 5.2. However, at the discretion of the Committee or the Committee’s delegate, this amount may be increased or decreased based upon such objective or subjective criteria, as it deems appropriate.

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PAYMENT TERMS
Timing of Award Payment. Except as provided in this Section 6.1 or in the Notification of Award, a Participant’s Award for a Performance Period shall be paid in a cash lump sum to the Participant after the audited financials for the Performance Period are completed, but no later the 15th day of the third month following the end of the Performance Period, unless a delay is otherwise permitted by Treas. Reg. Sec. 1.409A-1(b)(4). A Participant who is also eligible to Participate in the Flexsteel Industries, Inc. Deferred Compensation Plan may elect to defer some or all of any amount otherwise payable under this Section 6.1 to the extent permitted by such plan and Section 409A of the Code.
Change in Employment Status During Performance Period. In general, in order to receive a payment a Participant must be employed by the Company through the date of payout. Notwithstanding the foregoing, if the Participant’s employment is terminated during a Performance Period or prior to the date of payout due to death or the Participant becomes Disabled during the Performance Period (prior to a Separation from Service) the Participant (or the Participant’s beneficiary in the case of the Participant’s death) will be entitled to receive a pro rata portion of the Award if the Notification of Award expressly provides for such payment. The Notification of Award may also provide that a Participant will be entitled to a pro-rated portion of the Award otherwise payable to the Participant for a Performance Period if the Participant Separates from Service during a Performance Period on or after reaching the Participant’s Retirement Date, if a change in control (as defined in the Notification of Award) of the Company occurs, and under such other circumstances as the Committee (or its delegate) deems appropriate. The Notification of Award will specify any exception to the payment terms described in Section 6.1.
Beneficiary. In the event that any amount becomes payable under the Plan by reason of the Participant’s death, such amount shall be paid to the beneficiary or beneficiaries designated by the Participant. Unless otherwise specified in the Notification of Award, such amount shall be paid to the beneficiary or beneficiaries at the same time such amount would have been paid to the Participant had the Participant survived. In order for such designation to be valid for purposes of the Plan, it must be completed and filed with the Company according to the rules established by the Company. If the Participant has not completed a beneficiary designation, or all such beneficiaries have predeceased the Participant, then any amount that becomes payable under the Plan by reason of the Participant’s death shall be paid to the personal representative of the Participant’s estate. If there is any question as to the legal right of any person to receive a distribution under the Plan by reason of the Participant’s death, the amount in question may, at the discretion of the Committee, be paid to the personal representative of the Participant’s estate, in which event the Company shall have no further liability to anyone with respect to such amount. This section 6.3 shall apply to all Awards granted under the Plan.
Forfeiture. A Notification of Award may provide that if a Participant has received or been entitled to an Award within six months before the Participant’s Separation from Service with the Company, the Committee, in its sole discretion, may require the Participant to return or forfeit the Award in the event of certain occurrences specified in the Notification of Award. The occurrences may, but need not, include termination for “cause” (as defined in the Notification of Award or, if applicable, as defined in any employment agreement between the Participant and the Company), competition with the Company, unauthorized disclosure of material proprietary information of the Company, a violation of applicable business ethics policies of the Company, a violations of

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applicable law, or any other occurrence specified in the Notification of Award within the period or periods of time specified in the Notification of Award.
Required Clawback. The Company reserves the right to require a Participant to pay back to the Company any amount received under an Award under the Plan to the extent required by law, under any applicable listing standard or under any applicable clawback policy adopted by the Company.
MISCELLANEOUS
No Guaranty of Employment. Neither the adoption nor maintenance of the Plan, the designation of an employee as an Eligible Employee, the setting of Performance Goals, nor the provision of any Award under the Plan shall be deemed to be a contract of employment between the Company and any employee. Nothing contained in the Plan shall give any employee the right to be retained in the employ of the Company or to interfere with the right of the Company to discharge any employee at any time, nor shall it give the Company the right to require any employee to remain in its employ or to interfere with the employee’s right to terminate employment at any time.
Release. Any payment of an Award to or for the benefit of a Participant or beneficiary that is made in good faith by the Company in accordance with the Company’s interpretation of its obligations hereunder shall be in full satisfaction of all claims against the Company for payments under the Plan to the extent of such payment.
Notices. Any notice provided by the Company under the Plan may be posted to a Company-designated website.
Nonalienation. No benefit payable at any time under the Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, levy, attachment, or encumbrance of any kind by any Participant or beneficiary.
Plan is Unfunded. All Awards under the Plan shall be paid from the general assets of the Company. No Participant shall be deemed to have, by virtue of being a Participant in the Plan, any claim on any specific assets of the Company such that the Participant would be subject to income taxation on any Award prior to distribution, and the rights of a Participant or beneficiary to any payment to which the Participant is otherwise entitled under the Plan shall be those of an unsecured general creditor of the Company.
Tax Liability. The Company may withhold from any Award payment or other compensation payable to or on behalf of a Participant or beneficiary such amounts as the Company determines are reasonably necessary to pay any taxes required to be withheld under applicable law.
Captions. Article and section headings and captions are provided for purposes of reference and convenience only and shall not be relied upon in any way to construe, define, modify, limit, or extend the scope of any provision of the Plan.
Invalidity of Certain Plan Provisions. If any provision of the Plan is held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of the Plan and the Plan shall be construed and enforced as if such provision had not been included.
Disputes

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Claims Resolution; Initial Decision. Claims under the Plan shall be referred to the Company for initial decision. An initial decision shall be required as a condition precedent to mediation of any claim arising under the Plan, unless 30 days have passed after the claim has been referred to the Company with no decision having been rendered. The Company will review claims and within ten days of the receipt of a claim will take one or more of the following actions:
request additional supporting data from the claimant;
reject the claim in whole or in part;
approve the claim;
suggest a compromise; or
advise the claimant that the Company is unable to resolve the claim if the Company lacks sufficient information to evaluate the merits of the claim.

If the Company requests the claimant to provide a response to a claim or to furnish additional supporting data, the claimant shall respond within 10 days after receipt of such a request and shall either:

provide a response on the requested supporting data;
advise the Company when the supporting data will be furnished; or
advise the Company that no supporting data will be furnished.

Upon receipt of the response or supporting data, the Company will render an initial decision approving or rejecting the claim. The initial decision shall be final and binding on the parties, but subject to mediation and, if the Company and claimant fail to resolve their dispute through mediation, subject to binding arbitration.

Claims Resolution; Mediation. Either the Company or the claimant may file for mediation of the initial decision at any time, except that either the Company or the claimant may, within 30 days from the date of an initial decision, demand in writing that the other party file for mediation within 60 days of the initial decision. If such a demand is made and the party receiving the demand fails to file for mediation within the time required, then both parties waive their rights to mediate or pursue binding dispute resolution proceedings with respect to the initial decision.

If either the Company or the claimant files for mediation, the parties shall endeavor to resolve their claims by mediation, which, unless the parties mutually agree otherwise, shall be administered in accordance with the rules of the American Arbitration Association.

Claims Resolution; Binding Arbitration. Any claim subject to but not resolved by mediation shall be subject to binding arbitration which, unless the parties mutually agree otherwise, shall be administered in accordance with the rules of the American Arbitration Association.

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The decision rendered by the arbitrator or arbitrators shall be final, binding, enforceable and non-appealable, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Mediation and Arbitration shall be conducted in Dubuque, Iowa. Cost of mediation and arbitration shall be equitably allocated among the parties as determined by the mediator or arbitrator.

No Other Agreements. The terms and conditions set forth herein constitute the entire understanding of the Company and the Participants with respect to the matters addressed herein.
Incapacity. In the event that any Participant is unable to care for the Participant’s affairs because of illness or accident, any payment due may be paid to the Participant’s duly qualified guardian or other appointed legal representative.
Applicable Law. The Plan and all rights under it shall be governed by and construed according to the laws of the State of Iowa.
LIMITS OF LIABILITY
Any liability of the Company to any Participant with respect to an Award shall be based solely upon contractual obligations created by the Plan and the Notification of Award.
Except as may be required by law, neither the Company nor any member of the Board or of the Committee, nor any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability to any party for any action taken, or not taken, in good faith under the Plan.

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EX-10.2

FLEXSTEEL INDUSTRIES, INC.

CASH INCENTIVE COMPENSATION PLAN NOTIFICATION OF AWARD

TO: «Employee_Name»

Performance Award. Flexsteel Industries, Inc., (the “Company”), grants to you an Award under the Flexsteel Industries, Inc. Cash Incentive Compensation Plan (the “Plan”) provided upon request.

Grant Date:	Performance Period:		Base Salary:
Target Percentage Participation %:		Target Cash Value:

Performance Goals. To be eligible to receive payment under this Award, you must meet the Performance Goals set forth below. If the threshold goal amount is not reached, no amounts will be paid in any category.

($’s in Millions)

Weighting<br><br>%	GOAL(S)	Goal Achievement Posts
			Threshold<br><br>40%	TARGET<br><br>100%	Special<br><br>200%
100%

Calculation of Award. Following the close of the Performance Period, the Award payable to you will be calculated by the achievement of the Performance Goal(s) against the Target Performance Award to determine your Award payout for the Performance Period.
Employment Requirement. In general, in order to receive an Award payment under this Notification of Award, you must be employed by the Company on the date of payout. However, if your employment is terminated during a Performance Period as a result of your (i) death, (ii) disability, (iii) retirement on or after your Retirement Date, or (iv) Involuntary Termination during the Change in Control Protection Period (See Attachment A, “Definitions”), then you (or your beneficiary in the case of your death) will be entitled to receive a pro rata portion of the Award based on the number of days you were employed by the Company during the Performance Period.
Payment of Award. Your Award for a Performance Period will be paid to you in a cash lump sum after the audited financials for the Performance Period are completed, but no later than

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the 15th day of the third month following the end of the Performance Period, unless a delay is otherwise permitted under the terms of the Plan. Under certain circumstances, the payment may be made at an earlier date, as determined by the Committee.

Withholding Taxes. The Company may deduct and withhold from any payment due you under this Notification of Award or any other compensation payable to you by the Company any taxes due as a result of the Award payout.
Forfeiture and Repayment. If you receive or become entitled to receive a payment under this Award within six months before your Separation from Service with the Company, the Company, in its sole discretion, may require you to forfeit or return the Award, as the case may be, in the event you: (a) engage in Competitive Activity at any time during your employment or within a two-year period after your Separation from Service or (b) engage in Improper Use of Confidential Information at any time. (See Attachment A, “Definitions.”) The Company also reserves the right to require you to pay back to the Company any amount received under the Award as described in Section 6.5 of the Plan. Further, in no event will you be entitled to an Award under this Notification of Award if you have a Termination for Cause at any time before the payment date of the Award.
No Employment Contract. Nothing contained in the Plan or this Notification of Award creates any right to your continued employment or otherwise affects your status as an employee at will. You acknowledge that the Company and you each have the right to terminate your employment at any time for any reason or for no reason at all, subject only to the terms of any written employment agreement between you and the Company.
Governing Terms. The Award is subject to the terms of this Notification of Award and the terms of the Plan. In the event of any conflict between the terms of the Notification of Award and the Plan, the terms of the Plan will govern. Capitalized terms used but not defined in this Notification of Award will have the meanings given to them in the Plan.
Acknowledgment. Your receipt of this Notification of Award constitutes your agreement to be bound by the terms and conditions of this Notification of Award and the Plan.

FLEXSTEEL INDUSTRIES, INC. Acknowledgment of Receipt:

Derek P. Schmidt Date <Name> Date

President & CEO

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ATTACHMENT A

FLEXSTEEL INDUSTRIES, INC.

CASH INCENTIVE COMPENSATION PLAN

NOTIFICATION OF AWARD DEFINITIONS

The Capitalized terms used in this Notification of Award have the meanings set forth below.

“Change in Control” means the occurrence of any of the following events:

(i) Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, if any one Person is already considered to own more than 50% of the total voting power of the stock of the Company, the acquisition of additional stock by such Person will not be considered a Change in Control; or

(ii) Change in Effective Control of the Company. A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any 12-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

(iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person described in subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

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For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (x) its primary purpose is to change the jurisdiction of the Company’s incorporation, or (y) its primary purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. “Change in Control Protection Period” means the period beginning with the date of execution of a definitive agreement that results in Change in Control through the date 24 months after a Change in Control.

“Competitive Activity” means any of the following regardless of whether it is undertaken, directly or indirectly, on your own behalf or on behalf of any person or entity other than the Company, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee, member of any association, contractor, consultant or otherwise:

(i) Engaging in any business activity, in any geographic market in which the Company is then engaged in business that is competitive with the business of the Company; or

(ii) Hiring or soliciting for employment any person who is then an employee of the Company; or

(iii) Inducing or attempting to induce any person to end his or her employment relationship with the Company; or

(iv) Soliciting business concerning any business (as described in Section (i) above) from any person or entity who is, or who was, a client, customer, prospective client, or prospective customer of the Company; or

(v) Taking any action to divert business from, or inducing or attempting to induce any customer or prospective customer or any vendor, supplier or other business relation to cease doing business with the Company.

“Improper Use of Confidential Information” means:

(i) Any use or disclosure of Confidential Information except as required for the performance of the Participant's duties as an employee of the Company;

(ii) Any act or omission that directly or indirectly would materially reduce the value of Confidential Information except for such acts or omissions that are required for the performance of the Participant’s duties as an employee of the Company.

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(iii) Notwithstanding anything in Sections (i) or (ii) above, Improper Use of Confidential Information does not include:

(A) any disclosure, use or other act or omission that is expressly authorized in writing, in advance by the Company; or

(B) any required disclosure of Confidential Information by law or legal process, if: (x) the Participant provides prompt notice to the Company in writing, and prior to disclosing any Confidential Information, so that the Company may elect to seek an appropriate protective order to prevent disclosure at the Company’s option and expense; and (y) the Participant cooperates with the Company in any efforts to seek a protective order.

For purposes of this definition, “Confidential Information” means any non-public information regarding the Company or any of its owners, directors, representatives, agents, employees, suppliers, vendors, shareholders, members, clients, customers, or other third parties or entities with whom the Company does business and which the Participant has learned or developed in the past as a result of Participant’s employment by or association with the Company or which the Participant learns or develops while providing services to the Company. Confidential Information includes, but is not limited to, trade secrets, information about customers, prospective customers, marketing strategies, business strategies, sales strategies, products, services, key personnel, suppliers, pricing, technology, computer software code, methods, processes, designs, research, development systems, techniques, finances, accounting, purchasing, forecasts, or planning. All information disclosed to the Participant or to which the Participant obtains access in whatever form, whether originated by the Participant or by others, during the period that the Participant provides services to the Company will be presumed to be Confidential Information if it is treated by the Company as being Confidential Information or if the Participant has a reasonable basis to believe it to be Confidential Information. For these purposes, Confidential Information will not include knowledge or information: (i) that is now or subsequently becomes generally publicly known, other than as a direct or indirect result of Improper Use or Disclosure of Confidential Information by a Participant; or (ii) that is independently made available to the Participant in good faith by a third party who has not violated any legal duty or confidential relationship with the Company.

“Involuntary Termination” has the meaning set forth in U.S. Treasury Regulation §1.409A-1(n). Generally, this means that the Company has terminated your employment under circumstances that do not constitute a Termination for Cause, where you have not initiated or requested the termination and you are willing and able to continue your employment. An “involuntary termination,” for these purposes, also includes your separation from service during the Change in Control Protection Period due to “good reason.” A separation from service is due to “good reason” if your separation occurs due to a material diminution in base compensation; a material

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diminution of the Participant’s authority, duties, or responsibilities; or a material change in the geographic location at which the Participant must perform services. In order for a separation from service to be considered a “good reason” separation from service, you must provide a written notice to the Company of the existence of the condition within a 30-day period following the initial existence of the condition, upon which the Company must be provided a period of at least 90 days during which it may remedy the condition.

“Termination for Cause” means the termination of the Participant’s employment by the Company for a reason described below, as determined within the sole discretion of the Plan Administrator:

The willful and continued failure of the Participant to perform substantially the Participant’s duties as established from time to time by the Company’s management (other than any such failure resulting from a disability), after a written demand for substantial performance is delivered to the Participant by the Company’s management that specifically identifies the manner in which the management believes that the Participant has not substantially performed the Participant’s duties;
Dishonesty, fraud, misappropriation of funds, theft relating to the Participant’s position, harassment, an act of violence, acts punishable by law, misconduct as described in the Flexsteel Industries, Inc. Employee Handbook, as amended from time to time, or such other serious misconduct as will be determined by the Company to constitute conduct that warrants forfeiture pursuant to the Plan and Section 8 of this Notification of Award.

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EX-10.11

FLEXSTEEL INDUSTRIES, INC.

AMENDED SEVERANCE PLAN FOR MANAGEMENT EMPLOYEES

Effective August 19, 2025

Flexsteel Industries, Inc., a Minnesota corporation (the “Company”), hereby adopts the Flexsteel Industries, Inc. Amended Severance Plan for Management Employees (the “Plan”), effective as of August 19, 2025. The Plan amends the Severance Plan for Management Employees dated October 25, 2018. All prior existing severance payments applicable to Eligible Employees, whether formal or informal, written or oral, are hereby expressly superseded by this Plan as applicable to Eligible Employees.

Purpose.

The purpose of the Plan is to make available severance payments to Eligible Employees of the Employer whose employment with the Employer is involuntarily terminated under the circumstances described herein. This Plan is intended to constitute a top hat employee welfare benefit plan and is limited to a select group of management or highly compensated employees within the meaning of Sections 201, 301, and 404 of ERISA. The Plan is intended to be exempt from the requirements under Section 409A of the Code.

Further, the Plan complies with Section 2510.3-2(b) of the Department of Labor regulation to be designated as an employee welfare benefit plan rather than an employee pension benefit plan because benefits are: (i) not contingent, directly or indirectly, on termination of employment at retirement age and/or after a certain number of completed years of service; (ii) less than twice the Eligible Employee’s annual pay during the year immediately preceding the termination date; and (iii) payable within 24 months following the termination date.

Definitions. Capitalized terms used but not otherwise defined herein will have the meaning set forth in Annex 1 (Definitions).
Eligibility.
Eligible Employees. Eligibility to participate in the Plan shall be limited to Employees of the Company or its Affiliates who are either (an “Eligible Employee”):
an executive that the Company designates as subject to Section 16 of the Securities and Exchange Act of 1934; or
an individual designated as an Eligible Employee by the Plan Administrator or its delegate, within its sole discretion.
Participation Agreement. As a condition to becoming a Participant and being entitled to the “Severance Payments” as defined in Section 4.1 under the Plan, each Eligible Employee must execute and deliver a Participation Agreement as provided in Annex 2 (Participation Agreement) to the Company within sixty (60) days after the Eligible Employee first receives the Participation Agreement to be executed.
Duration of Participation. An individual participating in this Plan shall cease to be

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an Eligible Employee in this Plan if the Plan Administrator or its delegate removes the individual from being an Eligible Employee, within its or its delegate’s sole discretion, prior to such individual’s Qualifying Termination. On or after a Qualifying Termination, the Plan Administrator or its delegate may not remove an Eligible Employee from participation in the Plan.
Severance Payments.
Severance Payments. Exclusively upon a Qualifying Termination, and subject to the terms and conditions of the Plan, including, but not limited to, the execution of a Participant Agreement as provided in Section 3.2 (Participation Agreement) and the execution and non-revocation of a Severance Agreement as provided in Section 5 (Severance Agreement), an Eligible Employee is eligible to receive the following severance payments (collectively, the “Severance Payments”):
Severance Base Salary continuation for twelve (12) months (“Base Salary Continuation Payments”); plus
A severance lump sum payment equal to the COBRA premiums necessary to continue the Eligible Employee’s and his or her dependents’ health insurance coverage in effect on the date of the Eligible Employee’s Termination Date for a period of twelve (12) months, without regard to whether the Eligible Employee or his or her dependents elect continuation coverage under COBRA (“Benefits Payment”); plus
A severance lump sum payment equal to the amount of cash compensation that would be payable to the Eligible Employee under the Cash Plan for the fiscal year during which the Termination Date occurs if the Eligible Employee’s employment had continued through the end of such fiscal year, computed assuming that the “target” level of performance had been achieved, without regard to any discretionary adjustments that would have the effect of reducing the amount of the annual incentive bonus (other than discretionary adjustments applicable to all similarly-situated employees who did not terminate employment) (“Cash Incentive Payment”).

If a Qualifying Termination of the Chief Executive Officer occurs 30 days before, on or within 24 months after a “Change in Control,” the severance payments described above will be paid times two (x2).

For the avoidance of doubt, an individual must be an Eligible Employee on his or her Termination Date to be entitled to the Severance Payments.

Time and Form of Severance Payments. The Severance Payments will be paid at times and forms as follows:
The first installment of Base Salary Continuation Payments will commence on the first payroll date following the later of (i) the Eligible Employee’s Termination Date or (ii) the date the Eligible Employee’s Severance Agreement becomes effective and irrevocable under Section 5 (Severance Agreement). Base Salary Continuation Payments will be made in substantially equal installments according to the Employer’s then-current payroll process; provided that the first installment will include those Base Salary Continuation Payments accrued after the Termination Date through the period covered by such first installment. The remaining installments, if any, shall be payable

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as otherwise scheduled as if such payments had begun on the first regular payroll date after the Termination Date; and
The Benefits Payment and Cash Incentive Payment will be paid in a lump sum within sixty (60) days after the Termination Date.
Withholdings. The Severance Payments are subject to applicable taxes, withholdings, and appropriate deductions, and including but not limited to deduction of any outstanding amount owed to the Employer by the Participant regardless of the reason for or source of the amount due. To the extent taxes owed by the Participant with respect to amounts paid hereunder are not withheld for any reason, Participant shall continue to be responsible for such taxes, and neither the Company nor any Affiliate will have responsibility or liability to the Participant for any failure to comply with any applicable tax withholding requirements.
Clawback. The Company shall be entitled to clawback all Severance Payments made to the Participant under this Plan in the event the Participant breaches any provision of the Confidentiality and Non-Competition Agreement or of any other non-competition, non-solicitation, non-disparagement, confidentiality, or assignment of inventions covenants contained in any other agreement between Participant and the Company, including such provisions in the Severance Agreement, which other covenants are hereby incorporated by reference into this Plan. Pursuant to this clawback provision, the Company may (i) cancel, reduce, or require the Participant to forfeit any outstanding payments or benefits under this Plan, or (ii) require Participant to reimburse or disgorge to the Company any amounts received pursuant to this Plan, in each case, to the extent not prohibited by applicable law, or regulation in effect on or after the Effective Date.
Severance Agreement.
Effective Severance Agreement. Notwithstanding anything in the Plan to the contrary, and Eligible Employee’s eligibility to receive Severance Payments is subject to and contingent on the following:
the Employee signs and returns Severance Agreement to the Plan Administrator by the Return Date;
the Employee does not revoke the Severance Agreement as provided in Section 5.2 (Revocation of Agreement); and
the Severance Agreement becomes effective and irrevocable in accordance with its terms.
Revocation of Agreement. To be effective, a written request to revoke must be received by the Plan Administrator no later than 5:00 p.m. Central Time on the seventh calendar day (or other longer period required by law) from the date the Eligible Employee signed the Severance Agreement or, if mailed, be postmarked no later than the seventh calendar day (or other longer period required by law) from the date the Eligible Employee signed the Severance Agreement.

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Resignation from Other Positions; Cooperation.
Upon the Termination Date, unless otherwise requested by the Employer, the Participant will immediately resign from all positions (including directorships) that he or she holds or has ever held with the Employer and its Affiliates. By accepting any payment or benefit under the Plan, each Participant agrees to execute any and all documentation to effectuate such resignations upon request by the Employer, but he or she will be treated for all purposes as having so resigned upon the Termination Date, regardless of when or whether he or she executes any such documentation.
Until the Termination Date, the Participant remains subject to the direction of the Participant’s supervisors and must assist the Employer in any matter relating to the services of the Participant’s employment with the Employer, including, but not limited to, transitioning the Participant’s duties to others.
Section 409A.
Interpretation. The payments provided under this Plan are intended to satisfy the short-term deferral and severance pay plan exceptions to the application of Section 409A of the Code (the “Section 409A”). To the extent that the benefits become subject to Section 409A, this Plan will be interpreted and construed in favor of the Participant to the fullest extent allowed under Section 409A and the applicable guidance thereunder to satisfy the requirements of an exception from the application of Section 409A or, alternatively, to comply with Section 409A and applicable guidance thereunder. Each payment of compensation under this Plan will be treated as a “separate payment” of compensation for purposes of applying Section 409A and the short-term deferral and severance pay plan exceptions.
Separation from Service and Specified Employee. To the extent Section 409A applies, any reference herein to a termination of employment will mean a “separation from service” as defined in Treasury Regulation § 1.409A-1(h). Notwithstanding anything to the contrary in the Plan, to the extent required under Section 409A, if the Participant is deemed on the date of termination of employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that constitutes “nonqualified deferred compensation” under Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the earlier of (a) six (6) months and a day after the Participant’s “separation from service,” or (b) the Participant’s death. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this paragraph shall be paid to the Participant in a lump sum, and any remaining payments and benefits due under the Plan shall be paid or provided in accordance with the normal payment dates specified for them herein.
Payment Dates and Offsets. Whenever a payment under this Plan specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Employer. In the event the payment period under this Plan for any nonqualified deferred compensation commences in one calendar year and ends in a second calendar year, the payment shall not be paid until the later of the first payroll date of the second calendar year, or the date that such release becomes effective and irrevocable, to the extent necessary to comply with Section 409A. In no event shall any payment or benefit under the Plan that is deferred compensation subject to Section 409A be subject to offset by any other amount except as specifically permitted by Section 409A.

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No Warranty or Guaranty of Tax Treatment. The tax treatment of the payments provided under this Plan is not warranted or guaranteed. Neither the Employer nor its affiliates represent or guarantee that any particular federal or state income, payroll or other tax treatment will result from the payments or benefits payable under this Plan. The Employer does not represent that this Plan complies with Section 409A and in no event shall the Employer, its Affiliates nor their respective directors, officers, employees or advisers be liable for any additional tax, interest or penalty that may be imposed on the Participant (or any other individual claiming a benefit through the Participant) pursuant to Section 409A or damages for failing to comply with Section 409A. The Participant is solely responsible for the proper tax reporting and timely payment of any tax or interest for which he or she is liable as a result of the compensation or benefits payable pursuant to this Plan.
Funding. The payments or benefits provided hereunder will be paid solely from the general assets of the Employer. Nothing contained or implied herein will be construed to require the Employer or the Plan Administrator to maintain any fund or segregate any amount for the benefit of any Participant, and no Participant or other person will have any claim against, right to, or security or other interest in any fund, account or asset of the Employer from which any payment under the Plan may be made.
Plan Administrator.
Plan Administration. Except as otherwise provided in this Plan:
The Plan Administrator will have sole discretion and authority to control and manage the operation and administration of the Plan.
The Plan Administrator will have complete and absolute discretion to interpret the provisions of the Plan, make findings of fact, correct errors, and supply omissions. All decisions and interpretations of the Plan Administrator made in good faith pursuant to the Plan will be final, conclusive, and binding on all persons, subject only to the claims procedure, and may not be overturned unless found by a court to be arbitrary and capricious.
The Plan Administrator may amend, modify, or terminate the Plan in accordance with Section 11 of the Plan.
The Plan Administrator will have all other powers necessary or desirable to administer the Plan, including, but not limited to, the following:
To prescribe procedures to be followed by Participants in filing claims under the Plan;
To prepare and distribute information explaining the Plan to Eligible Employees and Participants;
To receive from the Employer, Eligible Employees, and Participants such information as may be necessary for the proper administration of the Plan;
To keep records of elections, claims, disbursements under the Plan, and any other information required by ERISA or the Code;

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To appoint individuals or committees to assist in the administration of the Plan and to engage any other agents it deems advisable;
To accept, modify, or reject Participant elections or submissions under the Plan;
To promulgate any such forms to be used by Eligible Employees and Participants;
To prepare and file any reports or returns with respect to the Plan required by the Code, ERISA or any other laws;
To determine and enforce any limits on benefits elected hereunder; and
To correct errors and make equitable adjustments for mistakes made in the administration of the Plan; specifically, and without limitation, to recover erroneous overpayments made from the Plan to a Participant, in whatever manner the Plan Administrator determines is appropriate, including suspensions or recoupment of, or offsets against, future payments due that Participant.
Delegation of Duties. The Plan Administrator may delegate responsibilities for the operation and administration of the Plan and may allocate or reallocate responsibilities under the Plan.
Indemnification. The Plan Administrator and any delegate or agent of the Employer who is an Employee will be fully indemnified by the Employer against all liabilities, costs, and expenses (including defense costs, but excluding any amount representing a settlement unless such settlement is approved by the Employer) imposed upon it in connection with any action, suit, or proceeding to which it may be a party by reason of being the Plan Administrator or having been assigned or delegated any of the powers or duties of the Plan Administrator, and arising out of any act, or failure to act, that constitutes or is alleged to constitute a breach of such person’s responsibilities in connection with the Plan, unless such act or failure to act is determined to be due to gross negligence or willful misconduct.
Claims Procedure.
Claims Procedure. If a person asserts a right to any benefit under the Plan that he has not received, such person or his or her authorized representative may file a written claim for such benefit with the Plan Administrator. If the Plan Administrator wholly or partially denies such claim, it will provide written or electronic notice to the claimant within a reasonable period of time, but not later than 90 days after receipt by the Plan Administrator of the claim, unless the Plan Administrator determines that special circumstances require an extension of time, not to exceed 90 days, for processing the claim. If the Plan Administrator determines that an extension of time is required, it will provide the claimant with written notice of the extension before the end of the initial 90-day period. Such notice will describe the special circumstances requiring the extension of time and specify the date by which the Plan Administrator expects to render a benefit determination. If the Plan Administrator wholly or partially denies a claim, it will set forth in its benefit determination, which will be written in a manner calculated to be understood by the claimant:

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the specific reasons for the denial of the claim;
specific reference(s) to pertinent provisions of the Plan on which the adverse benefit determination is based;
a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary;
an explanation of the Plan’s claims review procedure, including the time limits applicable under such procedure; and
a statement that the claimant has the right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.
Review of Denied Claim. A person whose claim for benefits is denied may request a full and fair review of the adverse benefit determination within 60 days after notification of the adverse benefit determination by the Plan Administrator. The claimant:
will be provided a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial determination;
will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim; and
may submit written comments, documents, records, and other information relating to the claim to the Plan Administrator for review.
Decision on Review. Subject to Section 2560.503-1(i)(1)(ii) of the Department of Labor regulations, a decision on review by the Plan Administrator will be made within a reasonable period of time, but not later than 60 days after receipt by the Plan Administrator of a request for review, unless special circumstances (such as the need to hold a hearing) require an extension of time for processing, in which case the claimant will be provided with written notice of the extension before the end of the initial 60-day period. Such notice will describe the special circumstances requiring the extension and specify the date by which the Plan Administrator expects to render its decision. In no event will the decision be rendered later than 120 days after receipt of the request for review.
Notification of Decision on Review. The Plan Administrator will provide written or electronic notice of its decision with respect to the claimant’s appeal which will be written in a manner calculated to be understood by the claimant. If there is an adverse benefit determination on review, the Plan Administrator’s decision will include:
the specific reasons for the adverse benefit determination;
specific reference(s) to pertinent provisions of the Plan on which the adverse benefit determination is based;
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other

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information relevant to the claim;
a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to receive information about any such procedures; and
a statement that the claimant has the right to bring a civil action under Section 502(a) of ERISA following the adverse benefit determination on review.
Exhaustion of Administrative Remedies. The exhaustion of these claims procedures is mandatory for resolving every claim and dispute arising under the Plan. As to such claims and disputes:
no claimant shall be permitted to commence any legal action to recover benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until these claims procedures have been exhausted in their entirety; and
in any such legal action, all explicit and implicit determinations by the Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.
Statute of Limitations. No legal action may be commenced against the Employer, Plan, or Plan Administrator more than one year after the Plan Administrator sends the Participant the notification of decision on review referenced in Section 10.4.
Venue and Jurisdiction. The jurisdiction and venue with respect to a legal action for a claim or dispute arising under this Plan is the United States District Court for the Northern District of Iowa or an Iowa State Court. Both the Employer and the Participant irrevocably consent to personal jurisdiction therein and waives any venue objection he, she or it may have to such action or proceeding in the United States District Court for the Northern District of Iowa or an Iowa State Court and any objection on the grounds that any such action or proceeding in any such court has been brought in an inconvenient forum.
Amendment and Termination.
Amendment. The Plan Administrator may amend the Plan at any time and in any manner, with or without notice and without Participant consent. Any amendment will be by the direction of the Plan Administrator. Notwithstanding the foregoing, (a) no amendment of the Plan shall impair the rights of a Participant who previously has incurred a Qualified Termination without the consent of each Participant so affected (or his or her legal representative) and the Plan Administrator; (b) in the event that a Change in Control occurs within one hundred eighty (180) calendar days following an amendment to the Plan that would adversely affect the rights or potential rights of Participants, the amendment will not be effective without the consent of each Participant so affected; and (c) in anticipation of or on or within one (1) year after a Change in Control, the Plan shall not be subject to amendment, change, substitution, deletion, revocation or termination in any respect which adversely affects the rights of Participants (including the removal of an individual as a Participant) without the consent of each Participant so affected.
Termination. Except as provided in Section 11.1, the Company has established the

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Plan with the intention and expectation that it will be continued indefinitely, but the Company is not and will not be under any obligation or liability whatsoever to maintain the Plan for any given length of time and may, in its sole and absolute discretion, discontinue or terminate the Plan, in whole or in part, at any time, with or without notice, by direction of an authorized officer of the Company or his or her authorized designee.
Miscellaneous.
Non-Alienation of Benefits. No benefit, right, or interest of any Participant under the Plan will be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, seizure, attachment or legal, equitable or other process, or be liable for, or subject to, the debts, liabilities or other obligations of such person, except as otherwise required by law.
Limitation of Rights. Neither the establishment nor the existence of the Plan, nor any modification thereof, will operate or be construed as to:
give any person any legal or equitable right against the Employer except as expressly provided herein or required by law, or
create a contract of employment with any Eligible Employee, obligate the Employer to continue the service of any Eligible Employee, or affect or modify the terms of an Eligible Employee’s employment in any way.
Governing Law. The Plan will be construed and enforced according to the laws of the State of Iowa, to the extent not preempted by ERISA or other federal law which will otherwise control. The provisions of the Plan are intended to control over state law under the preemptive authority of ERISA.
Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such invalid or unenforceable provision had not been included herein.
Construction. The captions contained herein are inserted only as a matter of convenience and reference, and in no way define, limit, enlarge or describe the scope or intent of the Plan, nor in any way will affect the Plan or the construction of any provision thereof. Any terms expressed in the singular form will be construed as though they also include the plural, where applicable, and references to the masculine, feminine, and the neuter are interchangeable.
Expenses. Any expenses incurred in the administration of the Plan will be paid by the Employer.

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly amended in its name and on its behalf this 19th day of August, 2025.

FLEXSTEEL INDUSTRIES, INC.

M. Scott Culbreth, Chair

Compensation Committee of the Board

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ANNEX 1

Definitions

“Affiliate” means any entity controlled by, controlling, or under common control with, the Company.

“Base Salary” means Participant’s base salary at the rate in effect on the date of Participant’s Qualifying Termination. The Participant’s base salary rate shall be determined without regard to reductions or deferrals of compensation under qualified and non-qualified plans or welfare benefits plans. The Participant’s base salary rate excludes fringe benefits, incentive compensation or other payments as additional or special compensation to the Participant.

“Cash Plan” means the Flexsteel Industries, Inc. Cash Incentive Compensation Plan, effective July 1, 2013, as amended, or its successor plan.

“Cause” means, as determined within the sole discretion of the Plan Administrator

The willful and continued failure of the Participant to perform substantially the Participant’s duties as established from time to time by the Company’s management (other than any such failure resulting from a disability), after a written demand for substantial performance is delivered to the Participant by the Company’s management that specifically identifies the manner in which the management believes that the Participant has not substantially performed the Participant’s duties; or an Eligible Employee’s commission of an act of dishonesty, fraud, misappropriation of funds, theft related to the Participant’s position, harassment, an act of violence, acts punishable by law, misconduct as described in the Flexsteel Industries, Inc. Employee Handbook, as amended from time to time, or other such serious misconduct as will be determined by the Plan Administrator to constitute conduct that warrants forfeiture of a benefit under the Cash Plan and Section 8 of an Eligible Employee’s notification of award under the Cash Plan.

“Change in Control” means the occurrence of any of the following events:

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Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (x) its primary purpose is to change the jurisdiction of the Company’s incorporation, or (y) its primary purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. “COBRA” means Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

“Change in Control Protection Period” means the period beginning with the date of execution of a definitive agreement that results in Change in Control through the date 24 months after a Change in Control.

“Code” means the Internal Revenue Code of 1986

“Confidentiality and Non-Compete Agreement” means the Confidentiality and Non-Compete Agreement between the Company and Participant.

“Disability” or “Disabled” means that the Eligible Employee satisfies the requirements to receive long-term disability benefits under the Company-sponsored group long-term disability plan in which the Eligible Employee participates without regard to any waiting periods, or that the Eligible Employee has been determined by the Social Security Administration to be eligible to receive Social Security disability benefits. A Participant shall not be considered to be “Disabled” unless the Participant furnishes proof of the Disability to the Company in such form and manner as the Company may require.

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“Eligible Employee” has the meaning set forth in Section 3.1.

“Employee” means a U.S.-based full-time employee of the Employer, except that, in no event will the term Employee include temporary employees, independent contractors (even if the Internal Revenue Service characterizes or recharacterizes such person as an employee), leased employees within the meaning of Section 414(n)(2) or Section 414(o)(2) of the Code, or non-resident aliens.

“Employer” means Flexsteel Industries, Inc., a Minnesota corporation, and any entity which succeeds to the business and assumes the obligations of the Employer hereunder. For purposes of identifying Employees and Eligible Employees under this Plan, the term “Employer” includes any Affiliate of the Employer.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Participant” means any Eligible Employee who satisfies the requirements of, and is eligible to receive Severance Payments pursuant to, Section 4.1.

“Plan” means the Flexsteel Industries, Inc. Severance Plan for Management Employees as set forth herein and as it may be amended from time to time.

“Plan Administrator” means, prior to a Change in Control, the Compensation Committee of the Company’s Board of Directors or such other individual, committee or firm as is designated pursuant to Article 8 from time to time subject to the review and approval of the Compensation Committee of the Company’s Board of Directors as required by the charter of the Compensation Committee or otherwise under applicable law or regulation. However, that any time prior to a Change in Control, the Plan Administrator may designate and fix members of the Plan Administrator prior to the Change in Control (“Incumbent Members”) to serve as the Plan Administrator following the Change in Control. Once designated by the Plan Administrator prior to a Change in Control to serve following a Change in Control, Incumbent Members may not be removed from the Plan Administrator following the Change in Control.

“Plan Year” means the 12-month period beginning July 1 and ending June 30.

“Qualifying Termination” means the involuntary termination of an Eligible Employee’s employment initiated by the Employer, as determined, in each case, by the Plan Administrator in its sole discretion. A Qualifying Termination includes a termination by the Company of Eligible Employee’s employment, other than as described below during a Change in Control Protection Period due to a voluntary termination for “good reason.” A Qualifying Termination is for “good reason” if it occurs due to a material diminution in base compensation; a material diminution of the Participant’s authority, duties, or responsibilities; or a material change in the geographic location at which the Participant must perform services. In order for a Qualifying Termination to be considered for a “good reason”, the Participant must provide a written notice to the Employer of the existence of the condition within a 30-day period following the initial existence of the condition, upon which the Employer must be provided a period of at least 90 days during which it may remedy the condition. A Qualifying Termination does not include any of the following:

a termination for Cause;
the Eligible Employee’s voluntary resignation or retirement from

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employment with the Employer without “good reason” before or after the Change in Control Protection Period;
the Eligible Employee’s termination from employment with the Employer as a result of the Eligible Employee’s death or Disability; or
the Eligible Employee’s failure to return to work with the Employer within the time required following an approved leave of absence.

“Return Date” means the date by which an Eligible Employee must sign and return a Severance Agreement including a release of claims in order to obtain Severance Payments. Except as otherwise determined by the Plan Administrator in its sole discretion, or otherwise required by law, the Return Date is the date 14 calendar days following the Termination Date; provided however that:

if the 14th calendar day is not a business day, the Return Date will be on the next business day;
if the Eligible Employee is at least 40 years old, the Return Date will be on the 21st calendar day following the Termination Date (or the next business day if the 21st calendar day is not a business day);
if the Eligible Employee is at least 40 years old, and the same Qualifying Termination affects two or more Eligible Employees, the Return Date will be on the 45th calendar day following the Termination Date (or the next business day if the 45th calendar day is not a business day);
if the Eligible Employee is otherwise entitled, under applicable state or local fair employment practice law, to more than the period of time otherwise provided above, the Return Date will be a date determined by reference to applicable state or local fair employment practices law; and
if the WARN Act applies, the Return Date may be a later date determined by the Plan Administrator.

A Severance Agreement returned to the Plan Administrator that is signed and physically received by the Return Date, or, if mailed, is addressed properly for delivery, postmarked by the United States Postal Service no later than the Return Date, and actually received by the Plan Administrator no later than 10 calendar days from the Return Date, will be considered timely. Severance Agreements that are not timely signed and/or returned as provided herein may not be accepted by the Plan Administrator.

“Revocation Period” means the period between the date the Eligible Employee signs and accepts the Severance Agreement and the date such acceptance becomes irrevocable pursuant to Section 5.2 (Revocation of Agreement).

“Severance Agreement” means a written agreement in a form provided by the Plan Administrator, in its sole discretion, by which an Eligible Employee agrees to waive and release the Employer from all legal claims the Eligible Employee may have against the Employer and such other restrictive covenants or other terms as may be required by the Employer in exchange for payment of Severance Payments. The Severance Agreement will contain provisions acceptable

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to the Company, including but not limited to, a non-disparagement clause, a confidentiality clause, a twelve (12) month non-competition clause, and a twelve (12) month non-hire and non-solicitation clause.

“Severance Payments” has the meaning set forth in Section 4.1.

“Termination Date” means the date of termination of employment with the Employer. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Plan, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” within the meaning of Section 409A.

“WARN” or “WARN Act” means the Worker Adjustment Retraining and Notification Act, as amended, and any applicable state plant or facility closing or mass layoff law.

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ANNEX 2

Participation Agreement

<Date>

Dear <Name>,

You are eligible to participate in the Flexsteel Industries, Inc. Severance Plan for Management Employees (the “Plan”), subject to your execution and return of this agreement (this “Participation Agreement”) to Flexsteel Industries, Inc. (the “Company”). The Plan has been amended by the Company effective as of <Date> and capitalized terms used without definition in this Participation Agreement have the meaning given to such terms in the Plan.

The Plan provides significant severance payments upon your Qualifying Termination, subject to the terms and conditions of the Plan. By signing this Participant Agreement, you agree, on behalf of yourself and on behalf of any designated beneficiary and your heirs, executors, administrators, and personal representatives, to all of the terms and conditions contained in this Participation Agreement and the Plan. You also acknowledge that you have been provided with a copy of the Plan, and that you read and understand the Plan’s terms and conditions. You further acknowledge that by signing this Participation Agreement that you were free to reject this Participation Agreement and all severance payments under the Plan with no adverse consequences to your employment with the Company and its subsidiaries and affiliates.

By signing this Participation Agreement, you further acknowledge and agree as follows: (a) that to be entitled to benefits under the Plan, you must execute and not revoke a Severance Agreement within the time period specified under the Plan after your Qualifying Termination, and that the Severance Agreement will contain restrictive covenants and provisions acceptable to the Company, including but not limited to, non-disparagement, confidentiality, twelve (12) month non-competition restriction, and a twelve (12) month non-hire and non-solicitation restriction, and that such restrictive covenants are intended to encourage conduct that protects the legitimate business interests of the Company and its subsidiaries and affiliates; (b) that the Severance Agreement will contain a broad release and waiver of claims in favor of the Company, its subsidiaries and affiliates; and (c) that all prior existing severance payments applicable to you, whether formal or informal, written or oral, are hereby expressly superseded by the benefits and terms and conditions of the Plan.

Please note that you are not required to participate in the Plan and may decline participation in the Plan by not returning this Participation Agreement. If you want to accept participation in the Plan, you must execute this Participation Agreement and see that it is returned to the VP – Human Resources at 385 Bell St. Dubuque, IA 52001 so that it is received no later than <Date>. This Participation Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

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FLEXSTEEL INDUSTRIES, INC.

By:

Title:

ACCEPTED AND AGREED BY PARTICIPANT

Signed: _____________________________________ Dated: ____________

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EX-19.1

FLEXSTEEL INDUSTRIES, INC.

INSIDER TRADING POLICY

Purpose

This Insider Trading Policy (the “Policy”) provides guidelines with respect to transactions in the securities of Flexsteel Industries, Inc. (the “Company”) and the handling of confidential information about the Company and the companies with which the Company engages in transactions or does business. The Company’s Board of Directors has adopted this Policy to promote compliance with U.S. federal, state and foreign securities laws that prohibit certain persons who are aware of material nonpublic information about a company from: (i) engaging in transactions in the securities of that company; or (ii) providing material nonpublic information to other persons who may trade on the basis of that information.

Persons Subject to the Policy

This Policy applies to all officers of the Company and its subsidiaries, all members of the Company’s Board of Directors and all employees of the Company and its subsidiaries. The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information. This Policy also applies to family members, other members of a person’s household and entities controlled by a person covered by this Policy, as described below.

Transactions Subject to the Policy

This Policy applies to transactions in the Company’s securities (collectively referred to in this Policy as “Company Securities”), including the Company’s common stock, options to purchase common stock, or any other type of securities that the Company may issue, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company’s Securities. Transactions subject to this Policy include purchases, sales and gifts of Company Securities.

Individual Responsibility

Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not engage in transactions in Company Securities while in possession of material nonpublic information. Persons subject to this policy must not engage in illegal trading and must avoid the appearance of improper trading. Each individual is responsible for making sure that he, she or they complies with this Policy, and that any family member, household member or entity whose transactions are subject to this Policy, as discussed below, also comply with this Policy. In all cases, the responsibility for determining whether an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company, the Compliance Officer or any other employee or director pursuant to this Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws. You could be subject to severe legal penalties and disciplinary

action by the Company for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading “Consequences of Violations.”

Administration of the Policy

The Chief Financial Officer shall serve as the Compliance Officer for the purposes of this Policy, and in their absence, the Chief Executive Officer or another employee designated by the Compliance Officer shall be responsible for administration of this Policy. All determinations and interpretations by the Compliance Officer shall be final and not subject to further review.

Statement of Policy

It is the policy of the Company that no director, officer or other employee of the Company (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the Company may, directly, or indirectly through family members or other persons or entities:

Engage in transactions (including gifts) in Company Securities, except as otherwise specified in this Policy under the headings “Transactions Under Company Plans” and “Rule 10b5-1 Plans;”
Recommend that others engage in transactions in any Company Securities;
Disclose material nonpublic information to persons within the Company whose jobs do not require them to have that information, or outside of the Company to other persons, including, but not limited to, family, friends, business associates, investors and expert consulting firms, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company; or
Assist anyone engaged in the above activities.

In addition, it is the policy of the Company that no director, officer or other employee of the Company (or any other person designated as subject to this Policy) who, in the course of working for the Company, learns of material nonpublic information about a company including: (1) with which the Company does business, such as the Company’s distributors, vendors, customers and suppliers; (2) that is involved in a potential transaction or business relationship with Company; or (3) is in a similar business or industry as the Company, may engage in transactions in that company’s securities until the information becomes public or is no longer material.

There are no exceptions to this Policy, except as specifically noted herein. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not excepted from this Policy. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.

Definition of Material Nonpublic Information

Material Information. Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect a company’s stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances and is often evaluated by enforcement authorities with the benefit of hindsight. While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:

Projections of future earnings or losses, or other earnings guidance;
Changes to previously announced earnings guidance, or the decision to suspend earnings guidance;
A pending or proposed merger, acquisition or tender offer;
A pending or proposed acquisition or disposition of a significant asset;
A pending or proposed joint venture;
A Company restructuring;
Significant related party transactions;
A change in dividend policy, the declaration of a stock split, or an offering of additional securities;
Bank borrowings or other financing transactions out of the ordinary course;
The establishment of a repurchase program for Company Securities;
A change in the Company’s pricing or cost structure;
Major marketing changes;
A change in management;
A change in auditors or notification that the auditor’s reports may no longer be relied upon;
Development of a significant new product, process, or service;
Pending or threatened significant litigation, or the resolution of such litigation;
Impending bankruptcy or the existence of severe liquidity problems;
The gain or loss of a significant customer or supplier;
A significant cybersecurity incident, such as a data breach, or any other significant disruption in the company’s operations or loss, potential loss, breach or unauthorized access of its property or assets, whether at its facilities or through its information technology infrastructure; or
The imposition of an event-specific blackout period on trading in Company Securities or the securities of another company or the extension or termination of such restriction.

When Information is Considered Public. Information that has not been disclosed to the public is generally considered to be nonpublic information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through the newswire services, a broadcast on widely-available radio or television programs, publication in a widely-available newspaper, magazine or news website, or public disclosure documents filed with the SEC that are available on the SEC’s website. By contrast, information would likely not be considered widely disseminated if it is available only to the Company’s employees, or if it is only available to a select group of analysts, brokers and institutional investors.

Once information is widely disseminated, it is still necessary to provide the investing public with sufficient time to absorb the information. As a general rule, information should not be considered fully absorbed by the marketplace until two full trading sessions after the information has been released. If, for example, the Company were to make an announcement on a Monday at 8:00 a.m. central time, you should not trade in Company Securities until the market opens on Wednesday. If the announcement is made after the market opens on Monday but before it opens on Tuesday, you should not trade until the market opens on Thursday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information.

Transactions by Family Members and Others

This Policy applies to your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company Securities (collectively referred to as “Family Members”). You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Company Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account. This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.

Transactions by Entities that You Influence or Control

This Policy applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account.

Transactions Under Company Plans

This Policy does not apply in the case of the following transactions, except as specifically noted:

Stock Option Exercises. This Policy does not apply to the exercise of an employee stock option acquired pursuant to the Company’s plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

Restricted Stock or Restricted Stock Unit Awards. This Policy does not apply to the vesting of restricted stock or restricted stock units, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock or restricted stock units. The Policy does apply, however, to any market sale of stock after vesting or delivery to you.

Other Similar Transactions. Any other purchase of Company Securities from the Company or sales of Company Securities to the Company are not subject to this Policy.

Special and Prohibited Transactions

The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It therefore is the Company’s policy that any persons covered by this Policy may not engage in any of the following transactions, or should otherwise consider the Company’s preferences as described below:

Short-Term Trading. Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company’s short-term stock market performance instead of the Company’s long-term business objectives. For these reasons, any director, officer or other employee of the Company who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six months following the purchase (or vice versa).

Short Sales. Short sales of Company Securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will

decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve the Company’s performance. For these reasons, short sales of Company Securities are prohibited. In addition, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. (Short sales arising from certain types of hedging transactions are governed by the paragraph below captioned “Hedging Transactions.”)

Publicly-Traded Options. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer or employee is trading based on material nonpublic information and focus a director’s, officer’s or other employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the next paragraph below.)

Hedging Transactions. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit a director, officer or employee to continue to own Company Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company’s other shareholders.

Margin Accounts and Pledged Securities. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers and other employees are prohibited from holding Company Securities in a margin account or otherwise pledging Company Securities as collateral for a loan. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned “Hedging Transactions.”)

Standing and Limit Orders. Standing and limit orders (except standing and limit orders under approved Rule 10b5-1 Plans, as described below) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on Company Securities. If a person subject to this Policy determines that they must use a standing order or limit order, the order should be limited to short duration and should otherwise comply with the restrictions and procedures outlined below under the heading “Pre-Clearance and Blackouts.”

Pre-Clearance and Blackouts

The Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety. These additional procedures are applicable only to those individuals described below.

Pre-Clearance Procedures. Directors, officers, accounting employees with access to material non-public information, investor relations employees that assist with earnings releases, legal department employees, and any persons designated by the Compliance Officer as being subject to these procedures, as well as the Family Members and Controlled Entities of such persons (“Covered Persons”), may not engage in any transaction (including gifts) in Company Securities without first obtaining pre-clearance of the transaction from the Compliance Officer. A request for pre-clearance should be submitted to the Compliance Officer at least two business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance and may determine not to permit the transaction. If a person seeks pre-clearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in Company Securities and should not inform any other person of the restriction. A transaction in Company securities by the Chief Executive Officer or Chief Financial Officer must be pre-cleared by each other and the Audit Committee Chair.

When a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic information about the Company and should describe fully those circumstances to the Compliance Officer. The requestor should also indicate whether he or she has effected any non-exempt “opposite-way” transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule 144 and file a Form 144, if necessary, at the time of any sale.

Quarterly Blackout Periods. Covered Persons may not conduct any transactions involving the Company’s Securities (other than gifts and as specified by this Policy), during a “Blackout Period” beginning 14 days prior to the end of each fiscal quarter and ending two full trading sessions following the date of the public release of the Company’s earnings results for that quarter. (See the paragraph above entitled “When Information is Considered Public” for examples of the timing of when a Blackout Period ends.)

Event-Specific Blackout Periods. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, the persons designated by the Compliance Officer may not engage in transactions in Company Securities. In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from engaging in transactions in Company Securities even sooner than the quarterly Blackout Period described above. In that situation, the Compliance Officer may notify these persons that they should not trade in the Company’s Securities, without disclosing the reason for the

restriction. The existence of an Event-Specific Blackout Periods or the extension of a quarterly Blackout Period will not be announced to the Company as a whole, and should not be communicated to any other person. Even if the Compliance Officer has not designated you as a person who should not engage in transactions in Company Securities due to an Event-Specific Blackout Periods, you should not trade while aware of material nonpublic information. Exceptions will not be granted during an Event-Specific Blackout Periods.

Exceptions. The quarterly Blackout Periods and Event-Specific Blackout Periods do not apply to those transactions to which this Policy does not apply, as described above under the heading “Transactions Under Company Plans” and to gifts; provided, however, gifts by Covered Persons are subject to the above Pre-Clearance Procedures. Further, the requirement for pre-clearance, the quarterly Blackout Periods and Event-Specific Blackout Periods do not apply to transactions conducted pursuant to approved Rule 10b5-1 plans, described under the heading “Rule 10b5-1 Plans.”

Rule 10b5-1 Plans

Rule 10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company Securities that meets certain conditions specified in the Rule (a “Rule 10b5-1 Plan”). If the plan meets the requirements of Rule 10b5-1, transactions in Company Securities may occur even when the person who has entered into the plan is aware of material nonpublic information.

To comply with the Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1. In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material nonpublic information. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters to an independent third party. A plan must include a cooling-off period before trading can commence that, for directors or officers, ends on the later of 90 days after the adoption of the Rule 10b5-1 plan or two business days following the disclosure of the Company’s financial results in an SEC periodic report for the fiscal quarter in which the plan was adopted (but in any event, the required cooling-off period is subject to a maximum of 120 days after adoption of the plan), and for persons other than directors or officers, 30 days following the adoption or modification of a Rule 10b5-1 plan. A person may not enter into overlapping Rule 10b5-1 plans (subject to certain exceptions) and may only enter into one single-trade Rule 10b5-1 plan during any 12-month period (subject to certain exceptions). Directors and officers must include a representation in their Rule 10b5-1 plan certifying that: (i) they are not aware of any material nonpublic information; and (ii) they are adopting the plan in good faith and not as part of a plan or scheme to evade the prohibitions in Rule 10b-5. All persons entering into a Rule 10b5-1 plan must act in good faith with respect to that plan.

Any Rule 10b5-1 Plan must be submitted for approval five days prior to the entry into the Rule 10b5-1 Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.

Post-Termination Transactions

This Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If an individual is in possession of material nonpublic information when his or her service terminates, that individual may not engage in transactions in Company Securities until that information has become public or is no longer material. The pre-clearance procedures specified under the heading “Pre-Clearance and Blackouts” above, however, will cease to apply to transactions in Company Securities upon the expiration of any Blackout Period or other Company-imposed Blackout Period applicable at the time of the termination of service.

Consequences of Violations

The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then engage in transactions in the Company’s Securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities, as well as enforcement authorities in foreign jurisdictions. Punishment for insider trading violations is severe, and could include significant fines and imprisonment. While the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on companies and other “controlling persons” if they fail to take reasonable steps to prevent insider trading by company personnel.

In addition, an individual’s failure to comply with this Policy may subject the individual to Company-imposed sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career.

Company Assistance

Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Compliance Officer.

EX-21.1

EXHIBIT 21.1

Subsidiaries of Flexsteel Industries, Inc.

DMI Sourcing Company, LLC (Kentucky)
Flexsteel Business Consulting (Shenzhen) Co. Ltd.
Home Styles Furniture Co., Ltd. (Thailand) (99.99% interest)
Representative Office of Flexsteel Industries, Inc. in Ho Chi Minh City (Vietnam)
Desert Dreams, Inc. (Iowa)
Shelf Company No. 74 (Mexico)

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-193041, 333-193042, 333-249820, 333-267290, and 333-269433 on Form S-8 of our reports dated August 22, 2025, relating to the financial statements of Flexsteel Industries, Inc. and the effectiveness of Flexsteel Industries Inc.'s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended June 30, 2025.

/s/ Deloitte & Touche LLP

Minneapolis, MN

August 22, 2025

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Derek P. Schmidt, certify that:

I have reviewed this annual report on Form 10-K of Flexsteel Industries, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
disclosed in this report any changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit and Ethics Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 22, 2025

/s/ Derek P. Schmidt
Derek P. Schmidt
President & Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Michael J. Ressler, certify that:

I have reviewed this annual report on Form 10-K of Flexsteel Industries, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
disclosed in this report any changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit and Ethics Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 22, 2025

/s/ Michael J. Ressler
Michael J. Ressler
Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION BY

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Flexsteel Industries, Inc. (the “Company”) on Form 10-K for the fiscal year ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Derek P. Schmidt, President & Chief Executive Officer, and Michael J. Ressler, Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and;
The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company.

Date: August 22, 2025


/s/ Derek P. Schmidt
Derek P. Schmidt<br><br>President & Chief Executive Officer

---
/s/ Michael J. Ressler
Michael J. Ressler<br><br>Chief Financial Officer

10-K

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

2025

 Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 0-5151

FLEXSTEEL INDUSTRIES, INC.

385 BELL STREET

DUBUQUE, IA 52001-0877

(563) 556-7730

Securities registered pursuant to Section 12(b) of the Act:

Table of Contents

DOCUMENTS INCORPORATED BY REFERENCE

Table of Contents

TABLE OF CONTENTS

Table of Contents

PART I

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

Item 1. Business

General

Manufacturing and Offshore Sourcing

Competition

Table of Contents

Seasonality

Foreign Operations

Customer Backlog

Raw Materials

Industry Factors

Government Regulations

Environmental Matters

Trademarks and Patents

Table of Contents

Employees

Available Information

Item 1A. Risk Factors

Risks related to our industry:

Changes in global trade policy and the impact on tariffs may have a material adverse effect on our business and results of operations.

Inflation and changes in foreign currency may impact our profitability.

Table of Contents

The Company’s products are considered deferrable purchases for consumers during economic downturns. Prolonged negative economic conditions could impact the business.

Future success depends on the Company’s ability to manage its global supply chain.

Competition from U.S. and foreign finished product manufacturers may adversely affect the business, operating results or financial condition.

Future costs of complying with various laws and regulations may adversely impact future operating results.

Table of Contents

Failure to anticipate or respond to changes in consumer or designer tastes and fashions in a timely manner could adversely affect the Company’s business and decrease sales and earnings.

Use of social media to disseminate negative commentary may adversely impact the Company’s reputation and business.

Public health events could have a materially adverse effect on our ability to operate, our ability to keep employees safe from the pandemic, our results of operations, and financial condition.

Risks related to our operations:

Business information systems could be impacted by disruptions and security breaches.

The implementation of a new business information system could disrupt the business.

Table of Contents

The Company’s participation in a multi-employer pension plan may have exposure under the plan that could extend beyond what its obligations would be with respect to its employees.

Future results may be affected by various legal proceedings and compliance risk, including those involving product liability, environmental, or other matters.

We may experience impairment of our long-lived assets, which would decrease our earnings and net worth.

The Company’s success depends on its ability to recruit and retain key employees and highly skilled workers in a competitive labor market.

We may not be able to collect amounts owed to us.

Table of Contents

Item 1B. Unresolved Staff Comments

Item 1C. Cybersecurity

Risk Management and Strategy

Governance

Table of Contents

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Holders of Record

Purchases of Equity Securities

Table of Contents

Table of Contents

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Results of Operations