Financial Data and Key Metrics Changes - The company reported net sales of $94.6 million for the first quarter, reflecting a year-over-year sales growth of 6.8% when excluding the impact of ocean freight surcharges [60][55] - Operating income was $1.9 million, representing 2% of sales, which is an improvement from $0.4 million in the same quarter of the prior year [50][60] - Gross margin improved to 19.5% compared to 16% in the same quarter of the prior year, with expectations for further improvement in the second quarter [50][10] Business Line Data and Key Metrics Changes - The sourced soft seating business saw a unit growth of 13.7% year-over-year, while manufactured stationary products grew by 3.7% [20] - E-commerce sales grew by 10.7% in the quarter, driven by increased revenue from big box distribution, notably with Costco [8] Market Data and Key Metrics Changes - The company anticipates that the elimination of ocean freight surcharges will negatively impact year-over-year sales comparisons by approximately $4 million in the second quarter [61][55] - The company is facing headwinds from high interest rates, rising fuel prices, and other economic factors, which are affecting consumer spending [56][82] Company Strategy and Development Direction - The company is focused on innovation and expanding its product lines, including the introduction of new products at the October Market [84][59] - The strategy includes leveraging growth initiatives to offset industry challenges and drive sales growth [81][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow sales despite near-term economic challenges, with a focus on operational efficiency and cost savings [5][56] - The outlook for the second quarter includes sales guidance of $94 million to $100 million, reflecting a growth of 1% to 7% [61][88] Other Important Information - The company ended the quarter with a cash balance of $3 million and working capital of $118.3 million, with a revolving line of credit balance of $33 million [87] - The effective tax rate for fiscal 2024 is expected to be in the range of 29% to 32% [89] Q&A Session Summary Question: What was the backlog at the end of the quarter? - The increase in backlog was attributed to prepayments for annual insurance and SAP software licenses, totaling about $2.5 million [30][31] Question: Can you quantify the impact of growth initiatives on first quarter sales? - Growth initiatives were a substantial factor in sales growth, with the business likely down in the high single-digit to low double-digit range without them [92] Question: What is the outlook for SG&A expenses? - SG&A expenses are expected to remain between $16 million and $17 million per quarter, with growth at a lower rate than overall top line growth in future years [69] Question: How is the company managing its inventory levels? - Inventory levels have been steady, with a focus on reducing inventory throughout the year to improve cash flow [62][87] Question: What is the status of the Mexicali plant? - The Mexicali plant is currently leased out, and the company will assess demand to determine future needs [121][122]

Financial Data and Key Metrics Changes - The company reported fourth-quarter sales of $105.8 million, reflecting a sequential quarter-over-quarter growth of 6.8% compared to the third quarter [16][22] - Operating income for the quarter was $4.2 million, representing 4% of sales, which was at the high end of the guidance range [5][11] - Full-year operating income increased to $10.5 million from $6.6 million in the prior year [6] Business Line Data and Key Metrics Changes - The big box channel accounted for approximately 5% of total sales in the fourth quarter and is expected to grow faster than other channels in fiscal year 2024 [8] - The new Charisma brand targeting younger consumers was launched, with expectations of gaining additional retail penetration following a competitor's exit from the sub-$1,000 sofa market [9] Market Data and Key Metrics Changes - Orders for the fourth quarter were up 20% year-over-year, indicating strong market performance despite overall sales decline [32] - The company faced pricing pressure due to competitive dynamics and a return to pre-pandemic demand levels amid macroeconomic uncertainty [18] Company Strategy and Development Direction - The company is focused on growth initiatives, operational efficiency, and cost control to drive long-term profitable growth [18][27] - New product launches, including the Zecliner sleep solutions recliner and the flex modular furniture solution, are part of the strategy to expand market presence [41][43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth outlook despite near-term economic uncertainties [27][50] - The company anticipates modest gross margin growth throughout the fiscal year, with expected sales growth and operational productivity [12][18] Other Important Information - The company published its first annual ESG report, outlining its commitment to sustainable and responsible business practices [21] - Cash flow outlook indicates that working capital will be a source of cash flow, with a focus on reducing debt and funding innovation [25][77] Q&A Session Summary Question: Can you talk about the revenue pattern during the quarter? - The decline in net sales was primarily related to pricing, particularly the elimination of ocean freight surcharges, which had peaked in the prior year [30] Question: How did the gross margin progress look? - Significant gains in operational efficiency across the supply chain contributed to gross margin improvements, with expectations to continue expanding margins throughout fiscal year 2024 [33][35] Question: What is the outlook for inventory levels at retail? - Retailers are generally in a good place with inventory levels, although there is caution due to lower store traffic [62] Question: What are the cash flow priorities moving forward? - The main priorities will be to continue growth initiatives and consider acquisitions if favorable opportunities arise [64]

Flexsteel Industries, Inc. (NASDAQ:FLXS) Q3 2023 Earnings Conference Call May 2, 2023 9:00 AM ET Company Participants Jerry Dittmer – President and Chief Executive Officer Alejandro Huerta – Chief Financial Officer, Treasurer and Secretary Derek Schmidt – Chief Operating Officer Conference Call Participants Anthony Lebiedzinski – Sidoti & Co Operator Good morning and welcome to the Flexsteel Industries Third Quarter Fiscal Year 2023 Earnings Conference Call. All participants will be in a listen-only mode. [ ...

Flexsteel Industries, Inc. (NASDAQ:FLXS) Q1 2023 Earnings Conference Call October 25, 2022 9:00 AM ET Company Participants Alejandro Huerta - Chief Financial Officer Jerry Dittmer - President and Chief Executive Officer Derek Schmidt - Chief Operating Officer Conference Call Participants Anthony Lebiedzinski - Sidoti & Company JP Geygan - Global Value Investment Corporation John Deysher - Pinnacle Presentation Operator Good morning, and welcome to the Flexsteel Industries First Quarter and Fiscal Year 2023 ...

[PART I](index=3&type=section&id=PART%20I) [ITEM 1. BUSINESS](index=3&type=section&id=Item%201.%20Business) Flexsteel Industries, Inc. is a leading US manufacturer, importer, and marketer of residential furniture, leveraging a patented spring and global sourcing - Flexsteel Industries, Inc. is one of the **largest manufacturers, importers, and marketers** of residential furniture products in the United States[9](index=9&type=chunk) - Product offerings include a wide variety of furniture such as sofas, loveseats, chairs, recliners, sofa beds, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture[9](index=9&type=chunk) - The company operates in one reportable segment: furniture products, having substantially completed its exit from Commercial Office, custom design Hospitality, and Vehicle Seating product lines by fiscal 2021[10](index=10&type=chunk) Net Sales by Application Area ($ thousands) | Application Area | 2022 | 2021 | 2020 | |:-----------------|:----------|:----------|:----------| | Residential | $543,447 | $476,519 | $331,879 | | Contract | $835 | $2,406 | $35,047 | | **Total** | **$544,282**| **$478,925**| **$366,926**| - Manufacturing facilities are located in Dublin, Georgia, and Juarez, Mexico, integrating manufactured products with finished goods from offshore suppliers (Vietnam, China, Thailand, Mexico) to offer a wide range of price points and styles[10](index=10&type=chunk)[12](index=12&type=chunk)[48](index=48&type=chunk) - Key competitive advantages include its patented, guaranteed-for-life **Blue Steel Spring**, manufacturing and sourcing capabilities, facility locations, customer commitment, product quality, delivery, service, value, and experienced teams[13](index=13&type=chunk) Customer Order Backlog ($ thousands) | Date | Backlog Amount ($ thousands) | |:--------------|:---------------| | June 30, 2022 | $62,800 | | June 30, 2021 | $155,325 | | June 30, 2020 | $46,900 | - The company had approximately **1,800 employees** on June 30, 2022, with **7** covered by collective bargaining agreements[22](index=22&type=chunk) [ITEM 1A. RISK FACTORS](index=5&type=section&id=Item%201A.%20Risk%20Factors) The company faces operational risks from system disruptions, pension liabilities, and talent retention, alongside industry risks from macroeconomic factors, supply chain issues, and intense competition - Risks related to operations include potential disruptions and security breaches in business information systems, and challenges from migrating to new ERP systems (SAP)[25](index=25&type=chunk)[28](index=28&type=chunk) - Participation in multi-employer pension plans poses a risk due to underfunded liabilities, potentially increasing the company's funding obligations[29](index=29&type=chunk)[30](index=30&type=chunk) - The company is exposed to legal proceedings, including product liability and environmental matters, which could result in substantial costs[31](index=31&type=chunk)[32](index=32&type=chunk) - Success is dependent on recruiting and retaining key employees and skilled workers in a competitive labor market, with potential negative impacts from unexpected loss of personnel or labor disruptions[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - Industry-related risks include the continued adverse effects of the COVID-19 pandemic on operations, employee safety, and financial condition, as well as ongoing inflation impacting profitability[38](index=38&type=chunk)[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - The company's products are deferrable purchases, making the business vulnerable to prolonged negative economic conditions and shifts in consumer spending[43](index=43&type=chunk)[44](index=44&type=chunk) - Managing the global supply chain is critical, with risks from delays, availability, quality, pricing fluctuations, changes in international trade policies (tariffs, especially on goods from China), and disruptions from foreign countries (e.g., COVID-19 related labor shortages in Vietnam)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The highly competitive and fragmented furniture industry, coupled with a significant shift in consumer preference towards online purchasing, could adversely affect market share, revenues, and operating margins[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS](index=8&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - The company has no unresolved staff comments[56](index=56&type=chunk) [ITEM 2. PROPERTIES](index=9&type=section&id=Item%202.%20Properties) As of June 30, 2022, Flexsteel owns and leases various facilities across the US, Mexico, and Asia for distribution, manufacturing, and corporate operations Owned Facilities as of June 30, 2022 (in square feet) | Location | Approximate Size (square feet) | Principal Operations | |:--------------------------|:-------------------------------|:----------------------------------| | Huntingburg, Indiana | 611,000 | Distribution | | Edgerton, Kansas | 500,000 | Distribution | | Starkville, Mississippi | 349,000 | Manufacturing (Held for Sale) | | Dublin, Georgia | 315,000 | Manufacturing | | Dubuque, Iowa | 40,000 | Corporate Office | Leased Facilities as of June 30, 2022 (in square feet) | Location | Approximate Size (square feet) | Principal Operations | |:--------------------------|:-------------------------------|:---------------------| | Greencastle, Pennsylvania | 242,000 | Distribution | | Sierra Ridge, California | 211,000 | Distribution | | Juarez, Mexico | 225,000 | Manufacturing | | Juarez, Mexico | 197,000 | Manufacturing | | Juarez, Mexico | 131,000 | Manufacturing | | High Point, North Carolina| 56,000 | Showroom | | El Paso, Texas | 38,000 | Warehouse | | Dubuque, Iowa | 3,000 | Office | | Shenzhen, China | 2,000 | Office | | Bangkok, Thailand | 1,500 | Office | | Binh Duong, Vietnam | 1,000 | Office | [ITEM 3. LEGAL PROCEEDINGS](index=9&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings are detailed in Note 13 Commitments and Contingencies of the consolidated financial statements - Legal proceedings are discussed in Note 13 Commitments and Contingencies[60](index=60&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=9&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no mine safety disclosures to report - There are no mine safety disclosures[61](index=61&type=chunk) [PART II](index=10&type=section&id=PART%20II) [ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=10&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Flexsteel's common stock trades on NASDAQ (FLXS), with its performance underperforming benchmarks in 2022, and the company has an active **$30 million** share repurchase program Share Investment Performance ($100 invested) | Year | Flexsteel ($) | NASDAQ ($) | Peer Group ($) | |:-----------|:----------|:---------|:-----------| | 2017 | 100.00 | 100.00 | 100.00 | | 2018 | 75.30 | 130.41 | 109.11 | | 2019 | 33.45 | 138.26 | 109.47 | | 2020 | 26.02 | 158.92 | 144.94 | | 2021 | 83.20 | 248.38 | 252.95 | | 2022 | 37.08 | 120.22 | 146.16 | - As of June 30, 2022, there were approximately **250 holders** of common stock[65](index=65&type=chunk) - On January 20, 2022, the Board approved a repurchase program authorizing up to an additional **$30 million** of common stock through January 19, 2025[67](index=67&type=chunk) Common Stock Repurchases (Q4 Fiscal 2022) | Period | Total Shares Purchased | Average Price Paid per Share ($) | Total Shares Purchased as Part of Plan | Approximate Dollar Value of Shares that May Yet Be Purchased ($) | |:--------------------------------|:-----------------------|:-----------------------------|:---------------------------------------|:-------------------------------------------------------------| | April 1, 2022, to April 30, 2022| 118,217 | $20.05 | 2,620,781 | $12,947,944 | | May 1, 2022, to May 31, 2022 | 138,103 | $20.44 | 2,758,884 | $10,118,616 | | June 1, 2022, to June 30, 2022 | 131,569 | $19.92 | 2,890,453 | $7,490,620 | | As of June 30, 2022 | 2,892,404 | $22.96 | 2,890,453 | $7,490,620 | [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=11&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 saw net sales grow by **13.6%** to **$544.3 million**, but gross margin declined by **680 basis points** and net income fell to **$1.9 million**, while liquidity remained strong with an **$85 million** credit line - The company substantially completed restructuring activities related to the exit of Vehicle Seating and Hospitality product lines during fiscal 2021, which represented less than **1%** of total net sales in fiscal 2022[72](index=72&type=chunk) Key Financial Ratios (as % of Net Sales) | Metric | 2022 (%) | 2021 (%) | 2020 (%) | |:-----------------------------|:--------|:--------|:--------| | Net sales | 100.0 | 100.0 | 100.0 | | Cost of goods sold | 86.6 | 79.8 | 85.5 | | Gross margin | 13.4 | 20.2 | 14.5 | | Selling, general and administrative | 12.3 | 14.2 | 19.7 | | Restructuring expense | 0.1 | 0.7 | 9.3 | | (Gain) on disposal of assets | (0.3) | (1.2) | (5.2) | | Operating income (loss) | 1.2 | 6.5 | (9.4) | | Income (loss) before income taxes | 1.1 | 6.6 | (9.2) | | Income tax provision (benefit) | 0.7 | 1.8 | (1.9) | | Net income (loss) | 0.3 | 4.8 | (7.3) | Fiscal 2022 vs. Fiscal 2021 Financial Highlights | Metric | FY2022 ($M) | FY2021 ($M) | Change ($M) | Change (%) | |:-------------------|:------------|:------------|:------------|:-----------| | Net Sales | 544.3 | 478.9 | 65.4 | 13.6% | | Gross Margin (%) | 13.4% | 20.2% | -6.8 bps | -33.7% | | SG&A Expenses | 66.7 | 68.0 | -1.2 | -1.8% | | Net Income | 1.9 | 23.0 | -21.1 | -91.7% | | Diluted EPS | $0.28 | $3.09 | -$2.81 | -90.9% | - Gross margin decrease of **680 bps** was primarily due to **450 bps** from domestic supply chain disruptions, **200 bps** from pricing promotions and inventory write-downs, **110 bps** from capacity growth investments, and **70 bps** from cost inflation, partially offset by **150 bps** from price realization[78](index=78&type=chunk) Fiscal 2021 vs. Fiscal 2020 Financial Highlights | Metric | FY2021 ($M) | FY2020 ($M) | Change ($M) | Change (%) | |:-------------------|:------------|:------------|:------------|:-----------| | Net Sales | 478.9 | 366.9 | 112.0 | 30.5% | | Gross Margin (%) | 20.2% | 14.5% | +5.7 bps | 39.3% | | SG&A Expenses | 68.0 | 72.4 | -4.5 | -6.2% | | Net Income (Loss) | 23.0 | (26.8) | 49.8 | N/A | | Diluted EPS | $3.09 | -$3.37 | $6.46 | N/A | - Working capital decreased by **$3.4 million** to **$125.4 million** on June 30, 2022, from **$128.8 million** on June 30, 2021[92](index=92&type=chunk) Summary of Cash Flow ($ thousands) | Cash Flow Type | 2022 ($ thousands) | 2021 ($ thousands) | 2020 ($ thousands) | |:-----------------------------------|:--------|:----------|:--------| | Net cash provided by (used in) operating activities | $7,993 | $(32,692) | $18,287 | | Net cash (used in) provided by investing activities | $(1,916)| $16,062 | $16,785 | | Net cash (used in) financing activities | $(5,235)| $(30,225) | $(9,122)| | Increase (decrease) in cash and cash equivalents | $842 | $(46,855) | $25,950 | - On September 8, 2021, the company entered into a five-year, **$85 million** revolving line of credit with Wells Fargo Bank, with **$37.7 million** outstanding as of June 30, 2022[101](index=101&type=chunk)[103](index=103&type=chunk) Contractual Obligations as of June 30, 2022 ($ thousands) | Obligation Type | Total ($ thousands) | 1 Year ($ thousands) | 2-3 Years ($ thousands) | 4-5 Years ($ thousands) | More than 5 Years ($ thousands) | |:----------------------------|:---------|:---------|:----------|:----------|:------------------| | Operating lease obligations | $44,944 | $7,458 | $10,772 | $8,483 | $18,231 | | Warehouse management obligation | $6,428 | $1,512 | $3,025 | $1,891 | — | - For fiscal 2023, the company anticipates spending **$4.0 million to $4.5 million** on capital expenditures, primarily for manufacturing productivity improvements[109](index=109&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=16&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Flexsteel's primary market risk is interest rate fluctuations on its **$37.7 million** credit line, with foreign currency risk deemed insignificant, alongside broader geopolitical and trade policy risks - The company's primary market risk exposure is changes in interest rates, with **$37.7 million** outstanding on its line of credit as of June 30, 2022[122](index=122&type=chunk)[103](index=103&type=chunk) - Foreign currency risk from purchases and expenses denominated in foreign currencies is not considered significant[122](index=122&type=chunk) - Other market risks include political issues in supplier countries, shipping disruptions, and government imposition of regulations, duties, taxes, or tariffs on imports[121](index=121&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=17&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section provides audited consolidated financial statements for fiscal years 2020-2022, including balance sheets, income statements, and cash flow statements, along with detailed notes on accounting policies and specific financial items - Deloitte & Touche LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 30, 2022[127](index=127&type=chunk)[128](index=128&type=chunk)[143](index=143&type=chunk) Consolidated Balance Sheets ($ thousands) | Asset/Liability Category | June 30, 2022 ($ thousands) | June 30, 2021 ($ thousands) | |:-------------------------|:--------------|:--------------| | **ASSETS** | | | | Cash and cash equivalents| $2,184 | $1,342 | | Trade receivables, net | $41,106 | $55,986 | | Inventories | $141,212 | $161,125 | | Total current assets | $190,068 | $228,540 | | Property, plant and equipment, net | $38,543 | $39,783 | | Operating lease right-of-use assets | $38,189 | $27,057 | | Total Assets | $268,741 | $296,779 | | **LIABILITIES & EQUITY** | | | | Accounts payable - trade | $32,147 | $67,773 | | Total current liabilities| $64,627 | $99,751 | | Line of credit | $37,739 | $3,500 | | Total liabilities | $137,181 | $128,811 | | Total shareholders' equity | $131,560 | $167,968 | | Total Liabilities & Equity | $268,741 | $296,779 | Consolidated Statements of Income (in thousands, except per share data) | Metric | 2022 ($ thousands) | 2021 ($ thousands) | 2020 ($ thousands) | |:---------------------------|:----------|:----------|:----------| | Net sales | $544,282 | $478,925 | $366,926 | | Gross margin | $72,680 | $96,730 | $53,053 | | Operating income (loss) | $6,617 | $31,200 | $(34,395) | | Income (loss) before income taxes | $5,903 | $31,467 | $(33,757) | | Net income (loss) | $1,853 | $23,048 | $(26,844) | | Basic EPS ($) | $0.29 | $3.20 | $(3.37) | | Diluted EPS ($) | $0.28 | $3.09 | $(3.37) | Consolidated Statements of Cash Flows ($ thousands) | Cash Flow Type | 2022 ($ thousands) | 2021 ($ thousands) | 2020 ($ thousands) | |:-----------------------------------|:----------|:----------|:----------| | Net cash provided by (used in) operating activities | $7,993 | $(32,692) | $18,287 | | Net cash (used in) provided by investing activities | $(1,916) | $16,062 | $16,785 | | Net cash (used in) financing activities | $(5,235) | $(30,225) | $(9,122) | | Increase (decrease) in cash and cash equivalents | $842 | $(46,855) | $25,950 | | Cash and cash equivalents at end of year | $2,184 | $1,342 | $48,197 | - The company's critical accounting policies include Allowance for Credit Losses, Inventories (lower of cost or net realizable value using FIFO), Valuation of Long-Lived Assets, Restructuring Costs, and Income Taxes (liability method, valuation allowances)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - Total restructuring and related costs incurred as of June 30, 2022, were **$59.4 million**, with **$0.7 million** recognized in fiscal 2022[206](index=206&type=chunk)[207](index=207&type=chunk) - As of June 30, 2022, the company continues to actively market assets in Starkville, Mississippi, classified as held for sale[210](index=210&type=chunk) - Total stock-based compensation expense was **$1.0 million**, **$3.7 million**, and **$4.6 million** for fiscal years 2022, 2021, and 2020, respectively[230](index=230&type=chunk) - The company contributes to one multi-employer defined benefit pension plan (Central States SE and SW Areas Pension Fund), which was in 'Red Zone' status as of December 31, 2021[244](index=244&type=chunk)[246](index=246&type=chunk) - The company is involved in environmental matters related to the Lane Street Groundwater Superfund Site, with a **$3.6 million** liability reflected as of June 30, 2022, and an employment class action lawsuit settled for **$1.3 million**[247](index=247&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) Quarterly Financial Information (in thousands, except per share amounts) - Fiscal 2022 | Metric | Sep 30, 2021 ($ thousands) | Dec 31, 2021 ($ thousands) | Mar 31, 2022 ($ thousands) | Jun 30, 2022 ($ thousands) | |:---------------------------|:-------------|:-------------|:-------------|:-------------| | Net sales | $137,689 | $141,668 | $140,408 | $124,517 | | Gross margin | $23,410 | $9,527 | $22,071 | $17,672 | | Operating income (loss) | $5,873 | $(8,636) | $5,814 | $3,566 | | Net income (loss) | $4,353 | $(7,545) | $5,316 | $(271) | | Basic EPS ($) | $0.64 | $(1.13) | $0.84 | $(0.05) | | Diluted EPS ($) | $0.61 | $(1.13) | $0.82 | $(0.05) | [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=38&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - There are no changes in or disagreements with accountants on accounting and financial disclosure[255](index=255&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES](index=38&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of June 30, 2022, the CEO and CFO confirmed effective disclosure controls and internal control over financial reporting, with no material changes during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2022[256](index=256&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 30, 2022, based on the COSO framework[258](index=258&type=chunk) - Deloitte & Touche LLP audited and expressed an unqualified opinion on the effectiveness of the company's internal control over financial reporting[259](index=259&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2022[260](index=260&type=chunk) [ITEM 9B. OTHER INFORMATION](index=39&type=section&id=Item%209B.%20Other%20Information) This section contains no other information to report - There is no other information to report[261](index=261&type=chunk) [PART III](index=39&type=section&id=PART%20III) [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE](index=39&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information for this item is incorporated by reference from the 2022 Proxy Statement[262](index=262&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION](index=39&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information for this item is incorporated by reference from the 2022 Proxy Statement[263](index=263&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS](index=39&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information for this item is incorporated by reference from the 2022 Proxy Statement[264](index=264&type=chunk) [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE](index=39&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Party%20Transactions%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information for this item is incorporated by reference from the 2022 Proxy Statement[265](index=265&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES](index=39&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information for this item is incorporated by reference from the 2022 Proxy Statement[266](index=266&type=chunk) [PART IV](index=40&type=section&id=PART%20IV) [ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES](index=40&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statements%20and%20Schedules) This section lists financial statements, schedules, and exhibits, including Schedule II detailing Valuation and Qualifying Accounts for receivables and VAT - Financial statements and schedules are included as part of this Annual Report, with Schedule II detailing Valuation and Qualifying Accounts[268](index=268&type=chunk)[269](index=269&type=chunk) Schedule II Valuation and Qualifying Accounts ($ thousands) | Description | Balance at Beginning of Year ($ thousands) | (Additions) Reductions to Income ($ thousands) | Deductions from Reserves ($ thousands) | Balance at End of Year ($ thousands) | |:-----------------------------|:-----------------------------|:---------------------------------|:-------------------------|:-----------------------| | **Accounts Receivable Allowances:** | | | | | | 2022 | $3,240 | $126 | $(386) | $2,980 | | 2021 | $1,770 | $1,618 | $(148) | $3,240 | | 2020 | $250 | $5,214 | $(3,694) | $1,770 | | **VAT Allowances:** | | | | | | 2022 | $— | $— | $— | $— | | 2021 | $237 | $— | $(237) | $— | | 2020 | $2,235 | $— | $(1,998) | $237 | [SIGNATURES](index=41&type=section&id=SIGNATURES) The report is duly signed by Flexsteel Industries, Inc.'s CEO and other principal officers and directors, certifying compliance - The report is signed by Jerald K. Dittmer (CEO), G. Alejandro Huerta (CFO), and other directors, dated August 26, 2022[274](index=274&type=chunk)[275](index=275&type=chunk) [EXHIBIT INDEX](index=42&type=section&id=EXHIBIT%20INDEX) This section provides a comprehensive list of exhibits filed with or incorporated by reference into the Annual Report on Form 10-K - The exhibit index lists various documents, including Amended and Restated Articles of Incorporation and Bylaws, Stock Option Plans, Long-Term Incentive Compensation Plans, Credit Agreements, and certifications[277](index=277&type=chunk)[278](index=278&type=chunk)

Financial Data and Key Metrics Changes - For Q4 2022, net sales were $124.5 million, down $11.7 million or 8.6% compared to $136.2 million in the prior year period, but within the guidance range of $120 million to $135 million [30] - Operating income for the quarter was $3.6 million, representing 3% of sales, while a net loss of $0.3 million was recorded, primarily due to a $3.6 million income tax charge [32] - Full-year home furnishing sales reached a record $544 million, an increase of over 13% from the previous year [9] Business Line Data and Key Metrics Changes - Retail channel sales decreased by $7.6 million or 6% year-over-year, while e-commerce sales declined by $4 million or 23% [31] - Gross margin as a percentage of net sales in Q4 was 14.2%, a decline attributed to competitive pricing pressure and inflation in domestic transportation costs [33] Market Data and Key Metrics Changes - Consumer demand for furniture is reverting to more normalized levels after pandemic-induced buying, with significant declines in both in-store and online traffic reported by customers [13] - Retail inventories remain high, impacting the ability to replenish Flexsteel inventories in the short term [15] Company Strategy and Development Direction - The company is focusing on profitable growth and has made investments in digital capabilities, product innovation, and supply chain improvements [10][12] - New growth initiatives include entering new markets, launching a lower-priced soft goods brand, and developing innovative product categories such as sleep solutions and modular furniture [22][24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about slowing consumer demand, macroeconomic uncertainty, and inflationary pressures impacting profit margins in the near term [41] - Despite challenges, management remains optimistic about long-term growth potential and the foundation created for future profitability [19][41] Other Important Information - The company ended the quarter with a cash balance of $2.2 million and reduced outstanding borrowings by approximately 9% or $3.9 million [34] - Guidance for Q1 sales is projected between $80 million and $90 million, expected to be the low point of the fiscal year [35] Q&A Session Summary Question: Monthly revenue cadence during the quarter - Management indicated that April, May, and June were almost identical in sales performance, with orders trending back to pre-pandemic levels [45] Question: Geographic sales variation - No significant geographic shifts were noted; performance remained consistent across regions [46] Question: Impactful growth strategy - The new lower-priced soft goods brand is expected to have the most significant impact on sales in fiscal year 2023 [48] Question: Distribution and marketing for the new brand - The new brand will be distributed through traditional furniture retailers, club stores, and large online marketplaces, supported by additional marketing spending [49] Question: Inventory expectations - The company aims to reduce inventory levels to $20 million to $25 million by the end of the year, depending on sales demand [51] Question: SG&A spending outlook - Normalized SG&A spending is expected to be around 14% to 15% of sales [52] Question: Retrospective on inventory investment - The investment in inventory during COVID helped maintain customer relationships and market share, although some discounting may be necessary due to competitive pressures [55][56] Question: Industry excess inventory outlook - It is estimated that there is about six months of excess inventory in the industry, expected to normalize by the end of the calendar year [57] Question: Expected size of new product opportunities - Growth initiatives are expected to contribute between $40 million and $50 million incrementally to the core business [59] Question: Long-term performance guidance - Long-term gross margin goals remain intact, although the roadmap to achieve them may differ due to recent economic disruptions [62] Question: Utilization of the Juarez plant - Full utilization of the Juarez plant is not expected until fiscal year 2024, with current utilization at 50% to 60% [66] Question: Dividend and buyback strategy - The company plans to maintain its dividend while continuously evaluating how to maximize shareholder returns [71]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ______________________________________ FORM 10-Q ______________________________________ þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2022 or ¨ 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 INDUSTRI ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ______________________________________ FORM 10-Q ______________________________________ þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 2021 or ¨ 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 INDUS ...

Start Time: 09:00 January 1, 0000 9:27 AM ET Flexsteel Industries, Inc. (NASDAQ:FLXS) Q2 2022 Earnings Conference Call January 25, 2022, 09:00 AM ET Company Participants Jerry Dittmer - President and CEO Derek Schmidt - CFO and COO Conference Call Participants Anthony Perala - Punch & Associates Jeff Geygan - Global Value Investment Corp. Operator Good morning, and welcome to the Flexsteel Industries Second Quarter Fiscal Year 2022 Earnings Conference Call. All participants will be in a listen-only mode. [O ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ______________________________________ FORM 10-Q ______________________________________ þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2021 or ¨ 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 INDU ...