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, ~~2024~~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. 

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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 ~~correct ions~~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 3022, ~~2024~~2025 5,~~203~~275,~~627~~963

The aggregate market value of the voting stock held by non-affiliates, computed by reference to the last sales price on December 2931, ~~2023~~2024 (which was the last business day of the registrant’s most recently completed second quarter) was $86242,~~640~~376,~~256~~629.

DOCUMENTS INCORPORATED BY REFERENCE

In Part III, portions of the registrant’s ~~2024~~2025 Proxy Statement to be filed with the Securities and Exchange Commission within 120 days of the Registrant’s fiscal year end.

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TABLE OF CONTENTS

		Page
PART I
ITEM 1.	BUSINESS	4
ITEM 1A.	RISK FACTORS	6
ITEM 1B.	UNRESOLVED STAFF COMMENTS	910
ITEM 1C.	CYBERSECURITY	910
ITEM 2.	PROPERTIES	1011
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	1213
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1618
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	1719
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	3942
ITEM 9A.	CONTROLS AND PROCEDURES	3942
ITEM 9B.	OTHER INFORMATION	3942
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURSIDICTIONS THAT PREVENT INSPECTIONS	3942
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	4043
ITEM 11.	EXECUTIVE COMPENSATION	4043
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS	4043
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR INDEPENDENCE	4043
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	4043
PART IV
ITEM 15.	EXHIBITS, FINANCIAL STATEMENTS, AND SCHEDULES	4144
	SIGNATURES	4245
	EXHIBIT INDEX	4346

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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, ~~2024~~2025, the Company operated manufacturing facilities located in ~~Dublin, Georgia, and~~ Juarez, Mexico ~~(the Dublin, Georgia location ceased operations effective June 30, 2024)~~. ~~These~~This ongoing manufacturing ~~operations~~operation ~~are~~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.

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Seasonality

The Company’s business is not considered seasonal.

Foreign Operations

The Company has minimal export sales. On June 30, ~~2024~~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 ~~and~~Company had approximately 1,~~200~~000 employees located in Mexico on June 30, ~~2024~~2025. The four Mexico facilities total 1,061,000 square feet. As of June 30, ~~2024~~2025, the Company has not begun operations in the Mexicali facility and ~~has subleased approximately 339,000 of the 508,000 square feet. The Company~~ 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, 2024		June 30, 2023		June 30, 2022
June 30, 2025		June 30, 2024		June 30, 2023
$	5966,~~543~~465	$	4959,~~729~~543	$	6249,~~800~~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, ~~2024~~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 a 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.

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Employees

The Company had approximately 1,~~500~~400 employees on June 30, ~~2024~~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 ~~operations~~industry:

~~Business~~Changes ~~information~~in ~~systems~~global ~~could~~trade bepolicy ~~impacted~~and bythe ~~disruptions~~impact on tariffs may have a material adverse effect on our business and ~~security~~results ~~breaches~~of operations.

~~The~~We ~~Company~~source ~~employs~~certain ~~information~~finished ~~technology~~products ~~systems~~from toexternal ~~support~~suppliers ~~its~~in ~~global~~foreign ~~business.~~countries, ~~Security~~primarily ~~breaches~~Vietnam, and ~~other~~have ~~disruptions~~significant tomanufacturing ~~the~~operations ~~Company’s~~in ~~information~~Mexico. ~~technology~~On ~~infrastructure~~April ~~could~~2, ~~interfere~~2025, ~~with~~the ~~operations,~~President ~~compromise~~of ~~information~~the ~~belonging~~United toStates ~~the~~issued ~~Company~~an ~~and~~executive ~~its~~order ~~customers~~to ~~and~~regulate ~~suppliers~~imports ~~and~~by ~~expose~~imposing ~~the~~reciprocal ~~Company~~country tospecific ~~liability~~tariffs ~~which~~on ~~could~~multiple ~~adversely~~nations ~~impact~~around the ~~Company’s~~world, ~~business~~including ~~and reputation~~Vietnam. A Infurther ~~the~~executive ~~ordinary~~order ~~course~~issued ofApril ~~business~~9, 2025, paused the ~~Company~~implementation ~~relies~~of onthe ~~information~~country ~~technology~~specific ~~networks~~tariffs on Vietnam and ~~systems~~many toother ~~process~~countries for 90 days, ~~transmit~~maintaining ~~and~~a ~~store~~10% ~~electronic~~global ~~information~~baseline tariff, ~~and~~while the United States works with its trade partners to ~~manage~~negotiate ornew ~~support~~trade agreements. On July 31, 2025, a ~~variety~~further executive order was issued clarifying certain matters related to tariffs, including a country specific tariff of ~~business~~20% ~~processes~~on ~~and~~goods ~~activities~~from Vietnam. ~~Additionally,~~Although the ~~Company~~country ~~collects~~specific tariffs and ~~stores~~the ~~certain~~global ~~data~~10% baseline tariffs do not apply to our products imported from Mexico, ~~including~~that ~~proprietary~~status ~~business~~could ~~information~~change at any time. The current situation is dynamic, and ~~may~~it ~~have~~is ~~access~~unknown if the United States and its trade partners will reach an agreement to ~~confidential~~further pause or ~~personal~~adjust ~~information~~the incurrent ~~certain~~tariffs. ~~areas~~Tariffs ofor ~~its~~other ~~businesses~~trade ~~that~~restrictions ismay ~~subject~~lead to ~~privacy~~continuing uncertainty and ~~security~~volatility ~~laws,~~in ~~regulations,~~U.S. economic conditions and ~~customer-imposed~~commodity ~~controls. While~~markets, ~~security~~declining ~~breaches~~consumer ~~and~~confidence, ~~other~~significant ~~disruptions~~inflation toor ~~the~~diminished ~~Company’s~~expectations ~~information~~for ~~technology~~the ~~networks~~economy, and ~~infrastructure~~ultimately ~~could~~reduced ~~happen,~~demand ~~none~~for ~~have~~our ~~occurred~~products. toIn ~~date~~addition, ~~that~~tariffs ~~has~~on ~~had~~our imported goods could have a material adverse impact on ~~the~~our ~~Company.~~future ~~Any~~net ~~such~~sales, ~~events~~cost ~~could~~of ~~result~~goods insold, ~~legal~~profit ~~claims~~and orcash ~~proceedings,~~flow. ~~liability~~The orultimate ~~penalties~~effect ~~under~~will ~~privacy~~be ~~laws,~~dependent ~~disruption~~on inthe ~~operations,~~magnitude and ~~damage~~duration toof the ~~Company’s~~tariffs ~~reputation,~~and ~~which~~the ~~could~~countries ~~adversely~~implicated ~~affect~~as well as our ability to offset or recoup the ~~Company’s~~increased ~~business~~costs.

InInflation ~~addition,~~and inchanges ~~response to shifts~~ in ~~employee~~foreign ~~workplace~~currency ~~preferences, we have allowed certain of our employees the option of a hybrid work schedule where they~~ may ~~choose~~impact ~~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 effectiveprofitability.

~~The~~Cost ~~implementation~~inflation ofincluding asignificant ~~new~~increases ~~business~~in ~~information~~ocean ~~system~~container rates, tariffs, raw materials prices, labor rates, and domestic transportation costs have and could ~~disrupt~~continue ~~the~~to ~~business~~impact profitability. Imbalances between supply and demand for these resources may continue to exert upward pressure on costs.

The Company ~~continues~~purchases toraw ~~migrate~~materials, ~~business~~component parts, and ~~financial~~certain ~~processes~~finished goods from ~~legacy~~foreign ~~ERP~~external ~~systems~~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 ~~SAP~~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 ~~Company~~wages ~~takes~~of ~~great~~our ~~care~~employees and certain other employee benefit and indirect costs are made in Pesos. A negative shift in the ~~planning~~value ~~and~~of ~~execution~~the U.S. dollar against the Peso could increase the cost of ~~these~~manufacturing. ~~migrations,~~In ~~however~~addition, ~~implementation~~the ~~issues~~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 ~~transition~~value ~~could~~of ~~arise~~the ~~and~~Peso ~~may~~against the U.S. dollar could result in the ~~following:~~value of our receivable decreasing which may impact our earnings.

~~Disruption~~Our ofability to recover these cost increases through price increases may continue to lag the ~~Company’s~~cost ~~domestic~~increases, ~~and~~resulting ~~international~~in ~~supply~~downward ~~chain;~~pressure on margins. In addition, price increases to offset rising costs could negatively impact demand for our products.

~~Inability to fill customer orders accurately and on a timely basis;~~6

~~Negative~~Table ~~impact~~of ~~on financial results;~~Contents

~~Inability~~The toCompany’s ~~fulfill~~products ~~federal,~~are ~~state~~considered ~~and~~deferrable ~~local~~purchases ~~tax~~for ~~filing~~consumers ~~requirements~~during ineconomic adownturns. ~~timely~~Prolonged ~~and~~negative ~~accurate~~economic ~~matter;~~conditions ~~and~~could impact the business.

~~Increased~~Economic ~~demands~~downturns ofand ~~management~~prolonged ~~and~~negative ~~associates~~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 ~~detriment~~deferrable nature and relatively significant cost of ~~other~~purchasing ~~corporate~~home ~~initiatives~~furnishing products.

~~The~~Future ~~Company’s~~success ~~participation~~depends inon athe ~~multi-employer~~Company’s ~~pension~~ability ~~plan~~to ~~may~~manage ~~have exposures under those plans that could extend beyond what~~ its ~~obligations~~global ~~would~~supply ~~be with respect to its employees~~chain.

The Company ~~participates~~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 ~~makes~~pricing. ~~periodic~~Changes ~~contributions~~in international trade policies including tariffs, access to ports and border crossings, ~~one~~or ~~multi-employer~~railways ~~pension~~could ~~plan~~disrupt ~~that~~the ~~covers~~supply ~~union~~chain, ~~employees~~increase cost and reduce competitiveness. ~~Multi-employer~~The ~~pension~~delivery ~~plans~~of ~~are~~goods ~~managed~~from these suppliers has been and may continue to be delayed by ~~trustee~~customs, ~~boards~~labor ~~comprised~~issues, availability of ~~participating~~third-party ~~employer~~transportation and ~~labor~~equipment, ~~union~~geopolitical ~~representatives~~pressures, changes in political, economic, and ~~the~~social ~~employers~~conditions, ~~participating~~weather, laws, and regulations. Unfavorable fluctuations in aprice, ~~multi-employer~~international ~~pension~~trade ~~plan~~policies, ~~are~~quality, ~~jointly~~delivery, ~~responsible~~and ~~for~~availability ~~maintaining~~of these products could continue to adversely affect the ~~plan~~Company’s ~~funding~~ability ~~requirements.~~to ~~Based~~meet demands of customers and cause negative impacts to the Company’s cost structure, profitability, and its cash flow.

6Enacted 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.

~~Table~~Additionally, ofa ~~Contents~~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.

onFinally, the ~~most recent information available to the~~ Company, ~~the~~relies ~~present~~on ~~value~~third ofparties ~~actuarially~~to ~~accrued~~deliver ~~liabilities~~customer oforders. ~~the~~The ~~multi-employer~~capacity ~~pension plan substantially exceeds the value~~ of ~~the~~these ~~assets~~third ~~held~~parties inor ~~trust~~cost ~~to pay benefits. As a result~~ of ~~the~~this ~~Company’s~~service ~~participation, it~~ could ~~experience greater volatility in the overall pension funding obligations. The Company’s obligations may~~ be impacted by ~~the~~labor ~~funded status of the plans~~disputes, ~~the~~cost ~~plans’~~inflation ~~investment~~(particularly ~~performance~~fuel), ~~changes~~and inavailability ~~the participant demographics, financial stability~~ of ~~contributing~~drivers ~~employers~~which ~~and~~could ~~changes~~increase incost ~~actuarial assumptions. See Note 12 Benefit~~ and ~~Retirement~~have ~~Plans~~negative ofimpacts ~~Notes to Consolidated Financial Statements included in this Annual Report~~ on ~~Form~~our ~~10-K for more information~~earnings.

~~Future~~Competition ~~results~~from ~~may~~U.S. beand ~~affected~~foreign byfinished ~~various~~product ~~legal~~manufacturers ~~proceedings~~may ~~and~~adversely ~~compliance~~affect ~~risk,~~the ~~including those involving product liability~~business, ~~environmental,~~operating results or ~~other~~financial ~~matters~~condition.

The ~~Company~~furniture ~~faces~~industry ~~the~~is ~~risk~~very ofcompetitive ~~exposure~~and tofragmented. ~~product~~The ~~liability~~Company ~~claims~~competes inwith ~~the~~U.S. ~~event~~and ~~the~~foreign ~~use~~manufacturers ofand ~~any of its products results in personal injury or property damage~~distributors. InAs ~~the~~a ~~event~~result, ~~any of~~ the Company’s ~~products~~may ~~prove~~not to be ~~defective,~~able ~~it may be required~~ to ~~recall~~maintain or ~~redesign~~raise ~~such products. The Company is also subject to various laws and regulations relating to environmental protection and~~ the ~~discharge~~prices of ~~materials~~its ~~into~~products ~~the~~in ~~environment.~~response ~~The~~to ~~Company~~competitive ~~could~~pressures ~~incur~~or ~~substantial~~increasing costs,. ~~including legal expenses~~Also, asdue ato ~~result of~~ the ~~noncompliance~~large ~~with,~~number orof ~~liability~~competitors ~~for~~and ~~cleanup~~their orwide ~~other~~range ~~costs~~of orproduct ~~damages under~~offerings, ~~environmental laws. Given~~ the ~~inherent~~Company ~~uncertainty~~may ofnot ~~litigation,~~be ~~these~~able ~~various~~to ~~legal~~significantly ~~proceedings~~differentiate ~~and~~its ~~compliance~~products ~~matters~~(through ~~could have a material impact on the business~~styling, ~~operating results~~finish, and ~~financial~~other ~~condition.~~construction ~~See~~techniques) ~~Note~~from 13those ~~Commitments and Contingencies~~ of ~~Notes~~its ~~to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information~~competitors.

WeAdditionally, ~~may~~most ~~experience~~of ~~impairment~~our ofsales are to distribution channels that rely on physical stores to merchandise and sell our ~~long-lived~~products ~~assets,~~and ~~which~~an ~~would~~involuntary ~~decrease~~shut down of those or a significant shift in consumer preference toward purchasing products online could have a materially adverse impact on our ~~earnings~~sales and ~~net~~operating ~~worth~~margin.

AtThese ~~June 30, 2024, we had $36.7 million in property, plant~~ and ~~equipment~~other ~~and~~competitive ~~$61.4~~pressures 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~~cause inus ~~the~~to ~~write-down~~lose ofmarket ~~all or a portion of the value of these assets. A write-down of our assets would~~share, ~~in turn~~revenues, ~~reduce our earnings~~ and ~~net worth. In particular~~customers, ifincrease ~~capacity~~expenditure ~~requirements~~or doreduce ~~not necessitate the utilization of our leased Mexicali~~prices, ~~Mexico~~any ~~facility and we are unsuccessful at subleasing the facility in the future the carrying amount~~ of ~~the~~which ~~right of use asset associated with that lease may not be recoverable. A write-down of all or a portion of the value of the Mexicali right of use asset~~ could have a material ~~impact~~adverse effect on our ~~earnings~~results ~~in the period~~ of ~~impairment. At June 30, 2024 the Company does not believe any impairment indicators exist due to current and expected sublease tenants and plans for future~~ operations ~~but impairment assessment involves the use of considerable judgment and any change in future market~~ or ~~economic conditions could cause actual results to differ~~liquidity.

~~The~~Future ~~Company’s~~costs ~~success~~of ~~depends~~complying onwith ~~its~~various ~~ability~~laws ~~to recruit~~ and ~~retain~~regulations ~~key~~may ~~employees~~adversely ~~and~~impact ~~highly~~future ~~skilled~~operating ~~workers in a competitive labor market~~results.

IfThe ~~the~~ Company’s business is ~~not~~subject ~~successful~~to invarious ~~recruiting~~laws and ~~retaining~~regulations ~~key~~which ~~employees~~could have a significant impact on operations and ~~highly~~the ~~skilled~~cost ~~workers~~to orcomply ~~experiences~~with such laws and regulations could adversely impact the ~~unexpected~~Company’s ~~loss~~financial position, results of ~~those~~operations ~~employees~~and cash flows. In addition, ~~the~~inadvertently ~~operations~~failing ~~may~~to becomply ~~negatively~~with ~~impacted~~such laws and regulations could produce negative consequences which could adversely impact the Company’s operations.

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.7

WeTable ~~may~~of ~~not be able to collect amounts owed to us.~~Contents

WeFailure ~~generally grant payment terms between 10 and 60 days~~ to ~~customers,~~anticipate 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 supply chain disruptions, weather events or ~~natural~~respond ~~disasters, public health events or other unforeseen issues with negative economic impact~~ to ~~our~~changes ~~customers, which have occurred~~ in ~~the~~consumer ~~past,~~or wedesigner ~~may~~tastes 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,~~fashions ~~especially~~ in ~~the current environment. Should customers experience liquidity issues beyond what we anticipate, if payment is not received on~~ a timely ~~basis,~~manner ~~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~~the ~~sales,~~Company’s ~~earnings,~~business ~~financial condition,~~ and ~~liquidity.~~decrease Insales ~~addition,~~and ~~we have receivables for recoverable value added tax paid under such regimes in foreign jurisdictions, primarily Mexico~~earnings. 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.

7Furniture 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.

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

~~Risks~~There ~~related~~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 ~~our~~access ~~industry:~~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.

~~Inflation~~Risks ~~and~~related ~~changes~~to ~~in foreign currency may impact~~ our ~~profitability.~~operations:

~~Cost~~Business ~~inflation~~information ~~including~~systems ~~significant increases in ocean container rates, raw materials prices, labor rates, and domestic transportation costs have and~~ could ~~continue~~be toimpacted ~~impact~~by ~~profitability. Imbalances~~disruptions ~~between supply~~ and ~~demand~~security ~~for these resources may continue to exert upward pressure on costs~~breaches.

The Company ~~purchases~~employs ~~raw~~information ~~materials,~~technology ~~component~~systems ~~parts,~~to support its global business. Security breaches and ~~certain~~other ~~finished~~disruptions ~~goods~~to ~~from~~the ~~foreign~~Company’s ~~external~~information ~~suppliers. Prices~~technology ~~for~~infrastructure ~~these~~could ~~purchases~~interfere ~~are~~with ~~primarily~~operations, ~~negotiated~~compromise ininformation ~~U.S.~~belonging ~~dollars~~to onthe aCompany ~~purchase~~and ~~order~~its ~~basis. A~~customers ~~negative~~or ~~shift~~suppliers inand expose the ~~U.S.~~Company ~~dollar~~to ~~relative~~liability towhich could adversely impact the ~~local~~Company’s ~~currency~~business and reputation. In the ordinary course of ~~our~~business, ~~supplier~~the ~~could~~Company ~~result~~relies inon ~~price~~information ~~increases~~technology networks and ~~negatively~~systems ~~impact~~to ~~our~~process, ~~cost~~transmit ~~structure. In~~and ~~addition~~store electronic information, ~~the~~and ~~majority~~to ofmanage ~~our~~or ~~manufactured~~support ~~products~~a ~~are~~variety ~~produced~~of inbusiness ~~Mexico~~processes and activities. ~~The~~ ~~wages~~Additionally, ofthe ~~our~~Company ~~employees~~collects and stores certain ~~other~~data, ~~employee~~including ~~benefit~~proprietary business information, and ~~indirect~~may ~~costs~~have ~~are~~access ~~made~~to inconfidential ~~Pesos. A~~or ~~negative~~personal ~~shift~~information in ~~the~~certain ~~value~~areas of ~~the~~its ~~U.S.~~businesses ~~dollar~~that ~~against~~is ~~the~~subject ~~Peso~~to ~~could~~privacy ~~increase~~and ~~the~~security ~~cost~~laws, ~~of manufacturing. In addition~~regulations, ~~the~~and ~~Company~~customer-imposed ~~has~~controls. While ~~certain~~security ~~asset~~breaches and ~~liabilities~~other ~~related~~disruptions to ~~our~~the ~~manufacturing~~Company’s ~~operations~~information ~~which~~technology ~~are~~networks ~~denominated~~and ininfrastructure ~~pesos~~could happen, ~~primarily~~none ~~our~~have ~~VAT~~occurred ~~receivable~~to ~~for~~date ~~recoverable~~that ~~VAT~~has ~~paid~~had ina ~~Mexico~~material impact on the Company. AAny ~~negative~~such ~~shift~~events could result in ~~the~~legal ~~value~~claims ofor ~~the~~proceedings, ~~Peso~~liability ~~against~~or ~~the~~penalties ~~U.S.~~under ~~dollar~~privacy ~~could~~laws, ~~result~~disruption in ~~the~~operations, ~~value~~and ofdamage ~~our~~to ~~receivable~~the ~~decreasing~~Company’s reputation, which ~~may~~could ~~impact~~adversely ~~our~~affect ~~earnings~~the Company’s business.

~~Our~~In ~~ability~~addition, in response to ~~recover~~shifts ~~these~~in ~~cost~~employee ~~increases~~workplace ~~through~~preferences, ~~price~~we ~~increases~~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 ~~lag~~implement ~~the~~strong ~~cost~~physical ~~increases,~~and ~~resulting~~cyber insecurity ~~downward~~measures ~~pressure~~to onensure ~~margins.~~that Inour ~~addition~~business operations remain functional and to ensure uninterrupted service to our customers, ~~price~~our ~~increases~~systems and our operations remain vulnerable to ~~offset~~cyber ~~rising~~attacks ~~costs~~and ~~could~~other ~~negatively~~disruptions ~~impact~~because ~~demand~~a ~~for~~material portion of our ~~products.~~employees work remotely either full or part-time, and we cannot be certain that our mitigation efforts will be effective.

The ~~Company’s~~implementation ~~products~~of ~~are~~a ~~considered~~new ~~deferrable~~business ~~purchases~~information ~~for~~system ~~consumers during economic downturns. Prolonged negative economic conditions~~ could ~~impact~~disrupt the business.

~~Economic~~The ~~downturns~~Company ~~and~~continues ~~prolonged~~to ~~negative~~migrate ~~economic~~business ~~conditions~~and ~~could~~financial ~~affect~~processes ~~consumer~~from ~~spending~~legacy ~~habits~~ERP bysystems ~~decreasing~~to ~~the overall demand for home furnishing products~~SAP. The ~~These events could impact retailers resulting in an impact on the~~ Company’s ~~business.~~takes Agreat ~~recovery~~care in the ~~Company’s~~planning ~~sales~~and ~~could~~execution ~~lag~~of ~~significantly~~these ~~behind~~migrations, ahowever, ~~general~~implementation ~~economic~~issues ~~recovery~~related ~~due~~ to the ~~deferrable~~transition ~~nature~~could arise and ~~relatively~~may ~~significant~~result ~~cost~~in ofthe ~~purchasing home furnishing products.~~following:

•

~~Future~~Disruption ~~success~~of ~~depends on~~ the Company’s ~~ability~~domestic toand ~~manage~~international ~~its global~~ supply chain.;

•

~~The~~Inability 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~~fill incustomer ~~delivery,~~orders ~~availability,~~accurately ~~quality,~~ and ~~pricing.~~on ~~Changes~~a intimely 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.basis;

•

~~Enacted~~Negative tariffs and potential future increases in tariffs on manufactured goods imported from China or other countries could adversely affect our business. Inability to reduce acquisition costs or pass-through price increases may have an adverse impact on ~~sales~~financial 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. results;

•

8Inability to fulfill federal, state and local tax filing requirements in a timely and accurate matter; and

~~Table of Contents~~8

~~Additionally,~~Table aof 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.Contents

•

~~Finally,~~Increased ~~the~~demands ~~Company~~of ~~relies~~management onand ~~third~~associates ~~parties~~ to ~~deliver~~the ~~customer~~detriment ~~orders. The capacity~~ of ~~these~~other ~~third~~corporate ~~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~~initiatives.

~~Competition~~The ~~from~~Company’s ~~U.S.~~participation ~~and~~in ~~foreign~~a ~~finished~~multi-employer ~~product~~pension ~~manufacturers~~plan may ~~adversely~~have ~~affect~~exposure under the ~~business,~~plan ~~operating~~that ~~results~~could orextend ~~financial~~beyond ~~condition~~what its obligations would be with respect to its employees.

The ~~furniture~~Company ~~industry~~participates isin, ~~very~~and ~~competitive~~makes ~~and~~periodic ~~fragmented.~~contributions ~~The~~to, ~~Company~~one ~~competes~~multi-employer ~~with~~pension Uplan that covers union employees.S. Multi-employer pension plans are managed by trustee boards comprised of participating employer and ~~foreign~~labor ~~manufacturers~~union representatives, and ~~distributors.~~the Asemployers participating in a ~~result,~~multi-employer pension plan are jointly responsible for maintaining the ~~Company~~plan’s ~~may~~funding ~~not~~requirements. beBased ~~able~~on tothe ~~maintain~~most orrecent ~~raise~~information available to the ~~prices~~Company, the present value of ~~its~~actuarially ~~products~~accrued inliabilities ~~response~~of tothe ~~competitive~~multi-employer ~~pressures~~pension orplan ~~increasing~~substantially ~~costs.~~exceeds ~~Also,~~the ~~due~~value toof the ~~large~~assets ~~number~~held ofin ~~competitors~~trust ~~and~~to ~~their~~pay ~~wide~~benefits. ~~range~~As a result of ~~product~~the ~~offerings~~Company’s participation, it could experience greater volatility in the overall pension funding obligations. The Company’s obligations may ~~not~~ be ~~able~~impacted toby ~~significantly~~the ~~differentiate~~funded ~~its~~status ~~products~~of ~~(through~~the ~~styling~~plans, ~~finish~~the plans’ investment performance, changes in the participant demographics, financial stability of contributing employers and ~~other~~changes ~~construction~~in ~~techniques)~~actuarial ~~from~~assumptions. ~~those~~See Note 13 Benefit and Retirement Plans of ~~its~~Notes ~~competitors~~to Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.

~~Additionally,~~Future ~~most~~results ofmay ~~our~~be ~~sales~~affected ~~are~~by tovarious ~~distribution~~legal ~~channels~~proceedings ~~that rely on physical stores to merchandise~~ and ~~sell~~compliance ~~our~~risk, ~~products~~including ~~and~~those aninvolving ~~involuntary~~product ~~shut~~liability, ~~down~~environmental, ~~of those~~ or aother ~~significant shift in consumer preference toward purchasing products online could have a materially adverse impact on our sales and operating margin~~matters.

~~These~~The ~~and~~Company ~~other~~faces ~~competitive~~the ~~pressures~~risk ~~could~~of ~~cause~~exposure usto 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 ~~lose~~be ~~market~~defective, ~~share~~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, ~~revenues~~including legal expenses, ~~and~~as ~~customers~~a result of the noncompliance with, ~~increase~~or ~~expenditure~~liability for cleanup or ~~reduce~~other ~~prices~~costs or damages under, ~~any~~environmental laws. Given the inherent uncertainty of ~~which~~litigation, these various legal proceedings and compliance matters could have a material ~~adverse~~impact ~~effect~~ on ~~our~~the business, operating results, and financial condition. See Note 14 Commitments and Contingencies of ~~operations~~Notes orto ~~liquidity~~Consolidated Financial Statements included in this Annual Report on Form 10-K for more information.

~~Future~~We ~~costs~~may ofexperience ~~complying~~impairment ~~with~~of ~~various~~our ~~laws~~long-lived ~~and~~assets, ~~regulations~~which ~~may~~would ~~adversely~~decrease ~~impact~~our ~~future~~earnings ~~operating~~and ~~results~~net worth.

~~The~~At ~~Company’s~~June ~~business~~30, is2025, ~~subject~~we tohad ~~various~~$36.2 ~~laws~~million in property, plant and ~~regulations~~equipment ~~which~~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 ~~have~~result ain ~~significant~~the ~~impact~~write-down onof ~~operations~~all ~~and~~or a portion of the ~~cost~~value toof ~~comply~~these ~~with~~assets. ~~such~~A ~~laws~~write-down of our assets would, in turn, reduce our earnings and ~~regulations~~net ~~could~~worth. ~~adversely~~During ~~impact~~the quarter ended March 31, 2025 the Company’s ~~financial~~determined ~~position,~~that ~~results~~the right of ~~operations~~use asset related to our leased Mexicali, Mexico facility was not fully recoverable and recorded a pre-tax non-cash ~~flows~~asset impairment charge of $14.1 Inmillion ~~addition~~due to substantial changes in U.S. trade policy in early 2025 that created significant uncertainty in US-Mexico trade relations, ~~inadvertently~~slowed ~~failing~~foreign todirect ~~comply~~investment ~~with~~in ~~such~~Mexico, ~~laws~~and greatly diminished tenant interest in subleasing the Mexicali facility. If capacity requirements do not necessitate the utilization of our leased Mexicali facility and ~~regulations~~we ~~could~~are ~~produce~~unsuccessful ~~negative~~at ~~consequences~~subleasing ~~which~~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 ~~adversely~~have a material impact on our earnings in the period of impairment. At June 30, 2025 the Company’s ~~operations~~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.

~~Failure~~The toCompany’s ~~anticipate~~success ordepends ~~respond~~on toits ~~changes~~ability into ~~consumer~~recruit ~~or designer tastes~~ and ~~fashions~~retain inkey aemployees ~~timely~~and ~~manner~~highly ~~could~~skilled ~~adversely~~workers ~~affect~~in ~~the~~a ~~Company’s~~competitive ~~business~~labor ~~and decrease sales and earnings~~market.

~~Furniture~~If isthe aCompany ~~styled product and~~ is ~~subject~~not tosuccessful ~~rapidly~~in ~~changing~~recruiting ~~consumer~~ and ~~end-user~~retaining ~~trends~~key ~~and~~employees ~~tastes~~ and is highly ~~fashion~~skilled ~~oriented.~~workers ~~If the Company is not able to acquire sufficient cover variety~~ or ifexperiences the ~~Company~~unexpected isloss ~~unable~~of tothose ~~predict or respond to changes in fashion trends~~employees, itthe operations may ~~lose~~be ~~sales~~negatively ~~and have to sell excess inventory at reduced prices~~impacted.

~~Use~~Additionally, ofwe ~~social~~are ~~media~~and will continue to ~~disseminate~~be ~~negative~~dependent ~~commentary~~upon ~~may~~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 ~~Company’s~~efficiency ~~reputation~~and effectiveness of processes and ~~business~~internal controls throughout the Company and our ability to service customers.

~~There~~We ~~has~~may ~~been~~not abe ~~substantial~~able ~~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~~collect aamounts ~~broad~~owed audience of consumers and other interested persons. 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~~us. ~~The harm may be immediate without affording the Company an opportunity for redress or correction.~~

~~Item~~We 1Bgenerally grant payment terms between 10 and 60 days to customers, often without requiring collateral. ~~Unresolved~~ ~~Staff~~Some ~~Comments~~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

~~None.~~9

~~Item~~Table ~~1C. Cybersecurity~~of Contents

~~Risk~~health ~~Management~~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 ~~Strategy~~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.

~~The~~Item ~~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~~1B. Unresolved ~~The~~Staff ~~cybersecurity~~Comments 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

9None.

~~Table~~Item ~~of Contents~~1C. Cybersecurity

~~coordination~~Risk ~~across~~Management ~~key departments~~ and ~~assists~~Strategy ~~in defining policies, procedures, and mitigation strategies, and will be called on to assist in risk assessment of any threat or incident.~~

The Company's ~~has a written Emergency Action Plan that includes the handling of material~~ cybersecurity ~~incidents~~risk ~~and~~management ~~business~~program ~~continuity if there~~ is aintegrated ~~disruption~~into inthe ~~operations.~~overall ~~The~~risk ~~Company~~management ~~utilizes~~framework, aincluding ~~third-party~~risk ~~cybersecurity~~identification, ~~partner to assist in monitoring our systems 24 hours a day~~assessment, and tomitigation ~~structure~~across ~~the~~all ~~technical~~areas ~~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~~business. ~~This~~The ~~partner~~cybersecurity ~~also~~risk ~~provides~~management ~~ongoing~~program ~~insights~~is ~~and~~designed ~~advisory services in order~~ to ~~better~~ align ~~our program~~ with ~~current~~industry best practices. ~~The~~and ~~Company~~has ~~uses~~adopted athe ~~variety~~framework ofand ~~processes~~measurement topractices ~~address~~developed ~~risk~~by ~~associated with~~ the ~~use~~National Institute of ~~third-party~~Standards ~~service~~and ~~providers~~Technology (NIST). ~~All~~In ~~employees~~addition, ~~including~~the ~~anyone~~Company ~~with~~has ~~access~~implemented toa ~~Company~~cross-~~provided~~functional ~~email~~cybersecurity ~~accounts,~~steering ~~must~~team ~~engage~~to infacilitate ~~quarterly~~coordination ~~cybersecurity~~across ~~awareness~~key ~~training~~departments and ~~are~~assists ~~tested~~in ~~internally~~defining onpolicies, aprocedures, ~~regular~~and ~~basis.~~mitigation ~~Additionally~~strategies, weand ~~maintain~~will ~~cyber~~be ~~insurance~~called ~~coverage,~~on ~~including protection~~ to ~~further~~assist ~~mitigate~~in ~~potential~~risk ~~financial~~assessment ~~losses~~of ~~from~~any ~~cybersecurity~~threat ~~incidents.~~or incident.

AsThe ofCompany ~~the~~has ~~date~~a ofwritten ~~this~~Emergency ~~Annual~~Action ~~Report~~Plan onthat ~~Form~~includes ~~10-K~~the wehandling ~~are not aware~~ of ~~any~~material cybersecurity incidents ~~that~~and ~~have~~business ~~materially~~continuity ~~affected~~if orthere ~~are~~is ~~reasonably~~a ~~likely~~disruption in operations. The Company utilizes a third-party cybersecurity partner to ~~materially~~assist ~~affect~~in monitoring our ~~business~~systems 24 hours a day, ~~results~~and to structure the technical handling of ~~operations~~cybersecurity orthreats ~~financial~~and ~~condition~~incidents. ~~However~~In addition, ~~despite~~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 ~~best~~program ~~efforts,~~with wecurrent ~~cannot~~best ~~eliminate~~practices. ~~all~~The ~~risks~~Company ~~from~~uses ~~cybersecurity~~a ~~threats~~variety orof ~~provide~~processes ~~assurances~~to ~~that~~address werisk ~~have~~associated ~~not~~with ~~experienced~~the ~~undetected~~use ~~cybersecurity~~of ~~incidents~~third-party service providers. ~~See~~All ~~“Risk~~employees, ~~Factors”~~including inanyone ~~Item~~with 1Aaccess to Company-provided email accounts, must engage in ~~this~~quarterly ~~Annual~~cybersecurity ~~Report~~awareness training and are tested internally on ~~Form~~a ~~10-K~~regular ~~for~~basis. Additionally, we maintain cyber insurance coverage, including protection to further ~~discussion~~mitigate potential financial losses from cybersecurity incidents.

~~Governance~~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.

~~The~~Governance 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~~Board ~~Action~~of ~~Plan~~Directors ~~defines~~is responsible for the ~~handling~~oversight of ~~cyber~~our ~~related~~cybersecurity ~~incidents~~risk ~~with~~management ~~support~~program. ofOn ~~the~~a ~~cross-functional~~quarterly ~~steering~~basis, ~~team~~our toChief ~~assess~~Information ~~the~~Officer ~~potential~~(CIO) ~~materiality~~provides ofa cybersecurity ~~events~~status report and update to ~~report~~the onBoard ~~the~~of ~~detection~~Directors, ~~analysis~~which includes a scorecard of cybersecurity threats, updates on key initiatives, and ~~containment~~any ~~from~~changes ~~such~~in ~~events.~~trends Asthat may impact the ~~severity~~Company. ofThe ~~events~~CIO ~~meet~~reports ~~certain~~directly ~~levels~~to asthe ~~specified~~President byand ~~the~~Chief ~~Incident~~Executive ~~Response~~Officer ~~Plan,~~(CEO) ~~those~~and ~~events~~meets ~~are~~regularly ~~escalated~~with tohim, ~~senior~~the ~~levels~~Chief ofFinancial ~~management~~Officer, and ~~reported~~other tomembers of the ~~Board~~Executive ofLeadership ~~Directors~~Team. ~~Our~~The ~~Board~~CIO has over 25 years of ~~Directors~~experience in IT Operations and is ~~responsible~~supported ~~for~~by ~~the~~an ~~oversight~~internal Director of ~~controls~~IT Security and ~~procedures~~a ~~related~~virtual toChief ~~the~~Information ~~public~~Security ~~disclosure~~Officer of(vCISO) ~~material~~service ~~cybersecurity~~to ~~incidents~~ensure comprehensive focus on the program.

~~Item~~The 2Emergency 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. ~~Properties~~ 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.

~~The Company owns the following facilities as of June 30, 2024:~~10

	Approximate
Location	Size (square feet)		Principal Operations
Huntingburg, Indiana		611,000	Distribution
Edgerton, Kansas		500,000	Distribution
Dublin, Georgia(1)		315,000	Manufacturing (Held for Sale)
Dubuque, Iowa		40,000	Corporate Office

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~~Facility~~Item ~~is classified as held for sale as of June 30, 2024~~2. ~~See Note 6 Assets Held for Sale of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for disclosure of the assets held for sale.~~ Properties

10The 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, ~~2024~~2025:

	Approximate
Location	Size (square feet)		Principal Operations
Mexicali, Mexico		508,000	Manufacturing
Greencastle, Pennsylvania		~~242~~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 1314 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, ~~2024~~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 ~~January~~December 2011, ~~2022~~2024, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to ~~an additional~~ $30 million of the Company’s common stock ~~through January 19, 2025~~.

~~The following table details shares repurchased by the Company during the three months ended June 30, 2024.~~11

	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, 2024, to April 30, 2024		—	$	—		1,485,274	$	2,115,634
May 1, 2024, to May 31, 2024		—		—		1,485,274		2,115,634
June 1, 2024, to June 30, 2024		—		—		1,485,274		2,115,634
As of June 30, 2024		—	$	—		1,485,274	$	2,115,634

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11The 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~~12

~~General~~Table of Contents

~~The~~Item ~~following~~7. ~~analysis~~Management’s ofDiscussion ~~the results of operations~~ and ~~financial~~Analysis ~~condition~~ of ~~the~~Financial ~~Company~~Condition ~~should be read in conjunction with the consolidated financial statements~~ and ~~related~~Results ~~notes~~of ~~included elsewhere in this Annual Report on Form 10-K.~~Operations

~~Results of Operations~~General

The following ~~table~~analysis ~~has~~of ~~been~~the ~~prepared~~results asof anoperations ~~aid~~and infinancial ~~understanding~~condition of the Company’s ~~results~~should ofbe ~~operations~~read onin aconjunction ~~comparative~~with ~~basis for~~ the ~~fiscal~~consolidated ~~years~~financial ~~ended~~statements ~~June~~and ~~30,~~related ~~2024,~~notes ~~2023,~~included ~~and~~elsewhere ~~2022. Amounts~~in ~~presented~~this ~~are~~Annual ~~percentages~~Report ofon ~~the~~Form ~~Company’s net sales~~10-K.

	For the years ended June 30,
	2024				2023				2022
Net sales		100.0		%		100.0		%		100.0		%
Cost of goods sold		78.9				82.0				86.6
Gross margin		21.1				18.0				13.4
Selling, general and administrative		17.1				16.0				12.3
Restructuring expense		0.7				—				0.1
Environmental remediation		—				(0.7	)			—
(Gain) on disposal of assets		(0.8	)			—				(0.3	)
Other expense		—				0.1				—
Operating income		4.1				2.7				1.2
Other income		—				—				—
Interest (expense)		(0.4	)			(0.3	)			(0.2	)
Income before income taxes		3.8				2.3				1.1
Income tax expense (benefit)		1.2				(1.4	)			0.7
Net income		2.6		%		3.8		%		0.3		%

Results of Operations

~~Fiscal~~The ~~2024~~following ~~Compared~~table tohas ~~Fiscal~~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.

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.


	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		%

~~Gross~~Fiscal ~~margin~~2025 asCompared ~~a percent of net sales for the year ended June 30, 2024, was 21.1%, compared~~ to ~~18.0%~~Fiscal for the prior fiscal year, an increase of 310 basis points (“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.2024

~~Selling,~~Net ~~general,~~sales ~~and~~were ~~administrative (“SG&A”) expenses increased by~~ $7441.61 million infor the year ended June 30, ~~2024~~2025, compared to ~~the prior fiscal year. As a percentage of~~ net sales, ~~SG&A~~of ~~expense was 17~~$412.1%8 inmillion ~~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~~$28.3 ~~due~~million toor ~~CEO~~6.9%. ~~transition~~The ~~costs associated with the revaluation of previously awarded equity awards, an~~ increase ofin ~~40-bps~~sales ~~due~~was toprimarily ~~higher incentive compensation, and an increase of 30-bps~~ driven by ~~investments~~unit volume in ~~growth~~our ~~initiatives~~soft ~~partially~~seating products, offset by ~~cost~~a ~~leverage~~decline onin ~~higher~~our ~~sales~~homestyles ~~volume~~ready-to-assemble product line.

~~There~~Gross ~~was~~margin ~~$3.0~~for ~~million in restructuring expenses recorded in~~ the year ended June 30, ~~2024 associated with the previously announced closure of the Dublin~~2025, ~~Georgia~~was ~~manufacturing facility~~22. ~~The $3.0 million primarily consists of $~~2.6%, ~~million~~compared into ~~one-time employee termination benefits and other associated costs~~21.1% ~~All~~for ~~charges related to~~ the ~~restructuring~~prior ~~activities were completed in~~ fiscal year, ~~2024.~~an ~~There~~increase ~~were~~of no110 ~~restructuring~~basis ~~expenses~~points ~~incurred~~(“bps”). inThe ~~the~~110-bps ~~prior~~increase ~~fiscal~~was ~~year.~~primarily ~~See~~driven ~~Note~~by 5,fixed ~~Restructuring,~~cost ofleverage ~~the~~on ~~Notes~~higher ~~to Consolidated Financial Statements~~sales, ~~included~~supply inchain ~~this~~cost ~~Annual~~savings, ~~Report~~and onproduct ~~Form~~portfolio ~~10-K for more information~~management.

~~During~~Selling, general, and administrative (“SG&A”) expenses decreased by $3.7 million in the year ended June 30, ~~2024~~2025, compared to the ~~Company~~prior ~~completed~~fiscal ~~the~~year. ~~sale~~As a percentage of ~~the~~net ~~Starkville~~sales, ~~Mississippi~~SG&A ~~location~~expense ~~which~~was ~~had~~15.1% ~~been~~in ~~previously~~fiscal ~~recorded~~year as2025 ~~held~~compared ~~for~~to ~~sale~~17.1% ~~The~~of ~~Company~~net ~~recorded~~sales ain ~~gain~~the ofprior $3fiscal year.3 The ~~million~~decrease ~~related~~of 200-bps is primarily due to ~~the~~fixed ~~sale~~cost inleverage ~~the~~on ~~fiscal~~higher ~~year~~sales volume and structural cost savings partially offset by investments in growth initiatives. ~~See~~The ~~Note~~prior 6,year ~~Assets~~SG&A ~~Held~~expense ~~For~~also ~~Sale,~~included ofa ~~the~~$1.5 ~~Notes~~million expense due to ~~Consolidated~~CEO ~~Financial~~transition ~~Statements,~~costs ~~included~~associated inwith ~~this~~the ~~Annual~~revaluation ~~Report~~of onpreviously ~~Form~~awarded ~~10-K~~equity ~~for~~awards ~~more~~which ~~information.~~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.

~~Table of Contents~~13

~~Income~~Table ~~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.Contents

~~Net~~During ~~income~~the ~~was~~year ~~$10.5~~ended ~~million~~June 30, or2025, ~~$1.91~~the ~~per~~Company ~~diluted~~completed ~~share for~~ the ~~year~~sale ~~ended~~of ~~June~~its 30Dublin, ~~2024,~~Georgia ~~compared~~facility towhich ~~net~~had ~~income~~been previously recorded as held for sale. The Company recorded a pre-tax gain of $145.80 million, orrelated $2to the sale.74 ~~per~~See ~~diluted~~Note ~~share~~6, inAssets Held For Sale, of the ~~prior~~Notes ~~year~~to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

~~Fiscal~~During ~~2023~~the ~~Compared~~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 ~~Fiscal~~the ~~2022~~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.

~~Net~~Income ~~sales~~tax ~~were~~expense was $~~393~~6.78 million, or an effective rate of 25.3%, for the year ended June 30, ~~2023~~2025, compared to ~~net~~income ~~sales~~tax expense of $~~544~~5.30 million in the prior year, aor ~~decrease~~an ofeffective ~~($150.6)~~tax ~~million~~rate orof ~~(27~~32.73%). ~~Sales~~The ofcurrent ~~products~~year ~~sold~~effective ~~through~~tax ~~retailers~~rate ~~declined~~was primarily impacted by ~~($142.5)~~the ~~million~~effect orof ~~(29.3%)~~state ~~primarily~~and ~~driven~~foreign taxes, offset by ~~consumer~~a ~~demand~~research ~~returning~~& todevelopment ~~pre-pandemic~~credit ~~levels~~benefit. ~~and~~The ~~competitive~~prior ~~pressure~~year totax ~~lower~~rate ~~prices. Sales~~was impacted by the effect of ~~products~~state ~~sold~~taxes, ~~through~~nondeductible ~~e-commerce~~stock ~~channels~~compensation, ~~decreased~~and foreign taxes, offset by ~~($8~~a research & development credit benefit.1) ~~million~~See Note 10, orIncome ~~(13.8%)~~Taxes, ~~due~~of the Notes to aConsolidated ~~decrease~~Financial Statements, included in ~~consumer~~this ~~demand~~Annual Report on Form 10-K for more information.

~~Gross~~Net ~~margin~~income aswas a$20.2 ~~percent~~million, ofor ~~net~~$3.55 ~~sales~~per diluted share for the year ended June 30, ~~2023~~2025, ~~was 18.0%,~~ compared to ~~13.4%~~net ~~for~~income ~~the~~of ~~prior~~$5.5 ~~year period~~million, anor ~~increase of 460 basis points (“bps”)~~$1.91 ~~The 460-bps increase was primarily driven by a 680-bps increase related to lower ancillary charges caused by domestic supply chain disruptions and higher~~ per ~~diem~~diluted ~~charges~~share in the prior year, an increase of 40-bps primarily related to cost savings initiatives for materials, labor, and transportation, a decrease of 150-bps due to pricing promotions and inventory write-downs, and a decrease of 110-bps related to capacity growth investments in manufacturing and distribution.

~~Selling~~On July 31, ~~general~~2025, ~~and~~the ~~administrative~~President ~~(“SG&A”)~~of ~~expenses~~the ~~decreased~~United byStates ~~$3.9~~issued ~~million~~an inexecutive ~~the~~order ~~year~~intended ~~ended~~to ~~June~~clarify ~~30,~~certain ~~2023,~~matters ~~compared~~related to ~~the~~previously ~~prior~~issued ~~fiscal~~executive ~~year~~orders on tariffs. AsThis executive order included, among other things, a ~~percentage~~country specific tariff of ~~net~~20% ~~sales,~~on ~~SG&A~~goods ~~expense~~imported ~~was~~from 16Vietnam.0% inThe current situation is dynamic, and it is unknown if the ~~fiscal~~United ~~year~~States ~~2023~~and ~~compared~~its trade partners will reach an agreement to 12further pause or adjust the current tariffs.3% ofDepending on our ability to mitigate these tariffs, they could have a material impact on our future net sales, incost ~~the~~of ~~prior~~goods ~~fiscal~~sold, ~~year~~profit and cash flow. The ~~increase~~ultimate ofeffect ~~370-bps~~will isbe ~~primarily~~dependent ~~due~~on tothe anmagnitude ~~increase~~and duration of ~~350-bps~~the ~~due~~tariffs toand ~~deleverage~~the oncountries ~~year-over-year~~implicated ~~sales~~as ~~decline~~well ~~and~~as anour ~~increase~~ability ofto ~~20-bps~~successfully ~~due~~mitigate the potential impact. The Company is assessing options to ~~higher~~mitigate ~~incentive~~any ~~compensation~~potential ~~and~~impact, ~~investment~~which inincludes ~~growth~~supply ~~initiatives~~chain adjustments, negotiating concessions with current suppliers, and pricing actions.

~~There~~On ~~were~~July no4, ~~restructuring~~2025, ~~expenses~~the One Big Beautiful Bill Act (“OBBBA”) was enacted in the ~~year~~United ~~ended~~States. ~~June~~The ~~30,~~OBBBA ~~2023,~~includes asa ~~all~~number ~~restructuring~~of ~~activities~~provisions ~~were~~which ~~completed~~impact inthe United States tax code. These regulations impacting the ~~prior~~tax code have multiple effective dates ranging from fiscal ~~year~~years beginning January 1, 2025, to fiscal years beginning January 1, 2027. The ~~prior~~Company ~~fiscal~~has ~~year~~not ~~expenses~~adjusted ~~were~~its ~~primarily~~provision for ~~ongoing~~income ~~costs~~tax ~~associated~~or ~~with~~measurement ~~our~~of ~~facilities~~deferred ~~listed~~tax assets as ~~held~~of ~~for~~June ~~sale~~30, ~~professional fees~~2025, ~~and~~based ~~former~~on ~~employee~~the ~~expenses~~changes asthat ~~part~~may ofbe ~~our~~triggered ~~previously~~by ~~announced~~the ~~comprehensive~~OBBBA ~~restructuring~~due ~~plan.~~to ~~See~~the ~~Note~~law 5,being ~~Restructuring~~signed on July 4, 2025. The Company is currently assessing the impact of the ~~Notes~~OBBBA tobut ~~Consolidated~~does ~~Financial~~not ~~Statements,~~expect ~~included~~it into ~~this~~have ~~Annual~~a ~~Report~~material impact on ~~Form~~our ~~10-K~~future ~~for~~financial ~~more~~position ~~information.~~and results of operations.

~~During~~Fiscal ~~the~~2024 ~~year~~Compared ~~ended June 30, 2023, the Company recorded income of $2.8 million as a result of insurance proceeds received related~~ to ~~the~~Fiscal settlement of the environmental remediation liability. See Note 13 Commitments and Contingencies, of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.2023

~~Income~~Net ~~tax~~sales ~~benefit~~were ~~was (~~$5412.6)8 million, ~~or an effective rate of (60.3%),~~ for the year ended June 30, ~~2023~~2024, compared to ~~income~~net ~~tax~~sales ~~expense~~ of $4393.17 million in the prior year, or an ~~effective~~increase ~~tax~~of ~~rate~~$19.1 ofmillion 68or 4.68%. ~~The~~Sales ~~effective~~of ~~tax~~products ~~rate~~sold ~~was~~through ~~primarily~~retailers ~~impacted~~increased by ~~the~~$22.9 ~~release~~million ofor ~~our~~6.7% ~~valuation~~primarily ~~allowance~~driven onby ~~deferred~~growth ~~tax~~with ~~assets.~~strategic ~~See~~customers ~~Note~~and ~~10,~~new ~~Income~~product ~~Taxes,~~introductions. Sales of ~~the~~products ~~Notes~~sold tothrough ~~Consolidated~~e-commerce ~~Financial~~channels ~~Statements,~~decreased ~~included~~by in($3.8) ~~this~~million, ~~Annual~~or ~~Report~~(7.5%) ondue ~~Form~~to ~~10-K~~a ~~for~~decrease ~~more~~in ~~information~~consumer demand.

~~Net~~Gross ~~income~~margin ~~was~~as ~~$14.8~~a ~~million,~~percent orof ~~$2.74~~net ~~per~~sales ~~diluted share~~ for the year ended June 30, ~~2023~~2024, was 21.1%, compared to ~~net~~18.0% ~~income~~for the prior fiscal year, an increase of $1310-bps.9 ~~million~~The 310-bps increase was primarily driven by an increase of 240-bps primarily related to cost savings initiatives for materials, orlabor, ~~$0.28~~and ~~per~~logistics, ~~diluted~~product ~~share~~portfolio inmanagement ~~the~~and ~~prior~~disciplined ~~year~~promotional pricing and a 70-bps improvement on volume leverage of fixed cost structure.

~~Liquidity~~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 ~~Capital~~an ~~Resources~~increase of 30-bps driven by investments in growth initiatives partially offset by cost leverage on higher sales volume.

~~Working~~There ~~capital~~was ~~(current~~$3.0 ~~assets~~million ~~less~~in ~~current~~restructuring ~~liabilities)~~expenses onrecorded in the year ended June 30, 2024, ~~was~~associated ~~$95.0~~with ~~million~~the ~~compared~~previously toannounced ~~$115.5~~closure ~~million~~of onthe ~~June 30~~Dublin, ~~2023~~Georgia manufacturing facility. The $203.50 million ~~decrease~~primarily inconsists ~~working~~of ~~capital~~$2.6 ~~was~~million ~~due~~in toone-time aemployee ~~decrease~~termination inbenefits ~~inventory~~and ofother ~~$25~~associated costs.5 ~~million,~~All ancharges ~~increase~~related into ~~other~~the ~~liabilities~~restructuring ofactivities ~~$4.2~~were ~~million,~~completed anin ~~increase~~fiscal inyear ~~accounts~~2024. ~~payable~~There ofwere ~~$1.1~~no ~~million~~restructuring ~~partially~~expenses ~~offset~~incurred byin anthe ~~increase~~prior offiscal $6year.1 ~~million~~See inNote ~~trade~~5, ~~receivables~~Restructuring, ~~an increase~~ of ~~other~~the ~~current~~Notes ~~assets~~to ofConsolidated ~~$2.8~~Financial ~~million~~Statements, ~~and~~included ~~an increase~~ in ~~cash~~this ofAnnual ~~$1.4~~Report ~~million.~~on ~~Capital~~Form ~~expenditures~~10-K ~~were $4.8 million~~ for ~~the~~more ~~fiscal year ended June 30, 2024~~information.

~~A summary of operating, investing, and financing cash flow is shown in the following table:~~14

	For the years ended June 30,
(in thousands)	2024			2023
Net cash provided by operating activities	$	31,883		$	22,989
Net cash (used in) investing activities		(593	)		(4,450	)
Net cash (used in) financing activities		(29,894	)		(17,358	)
Increase in cash and cash equivalents	$	1,396		$	1,181

Table of Contents

13During 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.

~~Table~~Income tax expense was $5.0 million, or an effective rate of ~~Contents~~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 ~~cash~~income ~~provided~~was by$10.5 ~~operating~~million, ~~activities~~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.

~~For~~Liquidity 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~~Capital 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.Resources

~~For~~Working ~~the~~capital ~~year~~(current ~~ended~~assets ~~June~~less ~~30,~~current ~~2023,~~liabilities) ~~cash~~on ~~provided~~June ~~by operating activities was $23.0 million~~30, ~~which primarily consisted of net income of $14.8 million~~2025, ~~adjusted~~was ~~for non-cash items including depreciation of~~ $4110.64 million ~~and~~compared ~~stock-based~~to ~~compensation of~~ $395.20 million, ~~offset~~on byJune ~~$7.2 million in deferred income taxes~~30, ~~accounts receivable allowance recoveries of $0~~2024.~~4 million, and gain from the sale of capital assets of $0.3 million.~~ The $715.24 million ~~change~~increase in ~~deferred~~working ~~income~~capital ~~taxes~~is primarily ~~relates~~due to ~~the~~an ~~release~~increase ofin ~~our~~cash ~~valuation~~of ~~allowance on deferred tax assets~~$35.2 ~~Net~~million ~~cash~~offset ~~provided~~ by ~~operating~~a ~~assets~~decrease ~~and~~of ~~liabilities was~~ $89.30 million ~~and~~of ~~was~~trade ~~primarily~~receivables, ~~due to~~ a decrease ~~in inventory~~ of $197.14 million ~~due~~in to inventory ~~optimization initiatives~~, aan ~~decrease~~increase in ~~accounts~~sales ~~receivable~~& advertising related accruals of $32.30 million ~~due~~and ~~to lower net sales, offset by~~ a decrease ~~in accounts payable~~ of $71.37 million ~~due~~in toassets ~~lower~~held ~~inventory~~for ~~purchases,~~sale. anCapital ~~increase~~expenditures inwere ~~other assets of~~ $53.3 million, ~~and~~for athe ~~decrease~~fiscal inyear ~~other~~ended ~~liabilities~~June of30, $12025.~~5 million.~~

~~Net~~A summary of operating, investing, and financing cash ~~(used~~flow is shown in) ~~investing~~the ~~activities~~following table:

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.


	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

~~For~~Net ~~the year ended June 30, 2023, net~~ cash ~~used~~provided ~~in investing activities was $4.5 million, primarily due to capital expenditures of $4.8 million partially offset~~ by ~~proceeds~~operating ~~of $0.3 million from the sale of capital assets.~~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 ~~(used~~provided by operating assets and liabilities was $8.7 million and was primarily due to a decrease in) ~~financing~~trade ~~activities~~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, ~~net~~ cash ~~used~~provided inby ~~financing~~operating activities was $2931.9 million, which primarily ~~due~~consisted toof ~~proceeds~~net ~~from~~income ~~lines~~of $10.5 million, adjusted for non-cash items including depreciation of ~~credit~~$4.0 million and stock-based compensation of $~~367~~4.86 million, offset by ~~payments~~$1.5 onmillion ~~lines~~in ofdeferred ~~credit~~income taxes, accounts receivable allowance recoveries of $~~391~~0.32 million, ~~dividends~~and ~~paid~~gain from the sale of capital assets of $32.8 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 $1.74 million ~~for~~due ~~treasury~~to ~~stock~~timing of inventory purchases, and an increase in other liabilities of $14.54 million ~~for~~offset ~~tax~~by ~~payments~~an onincrease ~~employee~~in ~~vested~~other ~~restricted~~assets ~~shares~~of ~~netted~~$8.2 ~~with~~million ~~proceeds~~and ~~from~~an ~~the~~increase ~~issuance~~in accounts receivable of ~~common~~$5.9 ~~stock~~million due to higher net sales.

~~For~~Net ~~the~~cash ~~year~~provided ~~ended~~by ~~June 30, 2023, net cash~~ (used in) ~~financing~~investing activities was $17.4 million, primarily due to proceeds from lines of credit of $363.8 million, offset by payments on lines of credit of $373.3 million, $3.7 million for treasury stock purchases, dividends paid of $3.2 million, and $1.0 million for tax payments on employee vested restricted shares netted with proceeds from the issuance of common stock.

~~Financing~~For ~~Arrangements~~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.

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

On August 28, 2020, the Company entered a two-year secured $25.0 million revolving line of credit with Dubuque Bank and Trust Company, with an interest rate of 1.50% plus LIBOR, subject to a floor of 3.00%. The revolving line of credit was secured by essentially all the Company’s assets, excluding real property, and required the Company to maintain compliance with certain financial and non-financial covenants. This line of credit was subsequently canceled in the first quarter of the fiscal year 2022.15

OnTable 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 party 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 Dubuque Bank and Trust 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.Contents

14Net cash (used in) financing activities

~~Table~~For the year ended June 30, 2025, net cash used in financing activities was $11.2 million, primarily due to proceeds from lines of ~~Contents~~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.

OnFor ~~April~~the ~~18,~~year ~~2022,~~ended ~~the~~June ~~Company~~30, ~~as the borrower~~2024, ~~entered~~net acash ~~first~~used ~~amendment~~in tofinancing ~~the~~activities ~~September~~was 8,$29.9 ~~2021~~million, ~~Credit~~primarily ~~Agreement~~due ~~(“First~~to ~~Amendment~~proceeds tofrom ~~the~~lines ~~Credit~~of ~~Agreement”),~~credit ~~with~~of ~~the~~$367.8 ~~Lender~~million, ~~and~~offset ~~the~~by ~~lenders~~payments ~~party~~on ~~thereto. The~~lines ~~first~~of ~~amendment~~credit toof ~~the~~$391.3 ~~Credit~~million, ~~Agreement~~dividends ~~changed~~paid ~~the~~of ~~definition~~$3.2 ofmillion, ~~the~~$1.7 ~~term~~million ~~"Payment~~for ~~Conditions"~~treasury stock purchases, and ~~further~~$1.5 ~~defines~~million ~~default~~for ortax ~~event~~payments ofon ~~default~~employee ~~and~~vested ~~the~~restricted ~~calculation~~shares ofnetted with proceeds from the ~~Fixed~~issuance ~~Charge~~of ~~Coverage~~common ~~Ratio~~stock.

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 6.70% on June 30, 2024.Arrangements

AsLine of ~~June 30, 2024, there was $4.8 million outstanding under the~~ Credit ~~Agreement, exclusive of fees and letters of credit.~~

~~Letters~~On ofSeptember 8, 2021, the Company, as the borrower, entered into a credit ~~outstanding~~agreement at(the “Credit Agreement”) with Wells Fargo Bank, National Association (the “Lender”), asand the other lenders thereto. The Credit Agreement has a five-year term and provides for up to an $85 million revolving line of ~~June~~credit. ~~30,~~Subject ~~2024~~to certain conditions, ~~totaled~~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 1.000 ~~million~~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.

~~See~~On ~~Note~~April 918, 2022, the Company entered into a first amendment to the Credit ~~Arrangements~~Agreement of(“First ~~Notes~~Amendment to ~~Consolidated~~the ~~Financial~~Credit ~~Statements~~Agreement”), with the Lender, and the lenders thereto. The amendment to the Credit Agreement changed the definition of ~~this~~the ~~Annual~~term ~~Report~~"Payment onConditions" ~~Form~~and ~~10-K~~further defined default or event of default and the calculation of the Fixed Charge Coverage Ratio.

~~Contractual~~Subject ~~Obligations~~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.

~~The~~On ~~following~~June ~~table~~3, ~~summarizes~~2025, ~~our~~the ~~contractual~~Company ~~obligations~~entered oninto ~~June~~a ~~30,~~third ~~2024~~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 ~~effect~~Credit ~~these~~Agreement ~~obligations~~which ~~are~~include ~~expected~~dollar figures derived from the maximum revolver amount. The reduction in the maximum revolving line of credit amount was initiated by the Company to ~~have~~better onalign ~~our~~with ~~liquidity~~current and ~~cash~~projected ~~flow~~borrowing inavailability under the ~~future~~terms ~~(in~~of ~~thousands):~~the Credit Agreement.

					2-3		4-5		More than
	Total		1 Year		Years		Years		5 Years
Operating lease obligations	$	74,188	$	9,418	$	18,586	$	17,208	$	28,976
Warehouse management obligation		3,403		1,512		1,891		—		—

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

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

~~Our~~See ~~focus~~Note ~~for~~9 ~~fiscal~~Credit ~~2025~~Arrangements ~~will~~of beNotes to ~~remain~~Consolidated ~~financially~~Financial ~~agile~~Statements ~~with~~of ~~strong~~this ~~liquidity,~~Annual ~~continue~~Report ~~building~~on ~~our~~Form ~~foundation for profitable long~~10-term growth in both retail and e-commerce sales channels, build global supply chain resiliency, expand sourcing, manufacturing, and distribution capacity to support future growth, strengthen digital capabilities, re-imagine the customer experience, and build strong culture and talentK.

~~Critical~~Contractual ~~Accounting Policies~~Obligations

The ~~discussion~~following ~~and~~table ~~analysis~~summarizes of our ~~consolidated~~contractual ~~financial~~obligations ~~statements and results of operations are based~~ on ~~consolidated~~June ~~financial~~30, ~~statements~~2025, ~~prepared~~and ~~in accordance with generally accepted accounting principles (GAAP) in~~ the ~~United~~effect ~~States of America. Preparation of~~ these ~~consolidated~~obligations ~~financial~~are ~~statements~~expected ~~requires~~to ~~the~~have ~~use~~on ofour ~~estimates~~liquidity and ~~judgments~~cash ~~that~~flow ~~affect~~in the ~~reported~~future ~~results. We use estimates based on the best information available~~ (in ~~recording~~thousands): 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.


					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		—		—

Inventories – We value inventory at the lower of cost or net realizable value. 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.16

~~Valuation~~Table 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 assets held for sale, 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 the estimated fair value less cost to sell. We recorded no impairments in the fiscal years 2024 and 2023. Contents

15Outlook

~~Table~~Our offocus ~~Contents~~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.

RestructuringCritical CostsAccounting – 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.Policies

~~Income~~The ~~Taxes~~discussion -and Inanalysis ~~determining~~of ~~taxable~~our ~~income~~consolidated ~~for~~ financial ~~statement~~statements ~~purposes, we must make certain estimates~~ and ~~judgments.~~results ~~These estimates and judgments affect the calculation~~ of ~~certain~~operations ~~tax~~are ~~liabilities~~based ~~and~~on ~~the~~consolidated ~~determination~~financial ofstatements ~~the~~prepared ~~recoverability~~in ofaccordance ~~certain~~with ~~deferred~~generally ~~tax~~accepted ~~assets,~~accounting ~~which~~principles ~~arise~~(GAAP) ~~from~~in ~~temporary differences between~~ the ~~tax~~United ~~and~~States ~~financial statement recognition~~ of ~~revenue and expense~~America. Preparation Inof ~~evaluating~~these ~~our~~consolidated ~~ability~~financial tostatements ~~recover~~requires ~~our deferred tax assets we consider all available positive and negative evidence including our past operating results,~~ the ~~existence~~use of ~~cumulative~~estimates ~~losses in the most recent years,~~ and ~~our~~judgments ~~forecast~~that ofaffect ~~future~~the ~~taxable~~reported ~~income~~results. We Inuse ~~estimating~~estimates ~~future~~based ~~taxable~~on ~~income, we develop assumptions including~~ the ~~amount~~best ofinformation ~~future~~available ~~pre-tax~~in ~~operating~~recording ~~income,~~transactions ~~the reversal of temporary differences,~~ and ~~the~~balances ~~implementation~~resulting offrom ~~feasible~~business ~~and prudent tax planning strategies~~operations. Estimates ~~These~~are ~~assumptions~~used ~~require~~for ~~significant~~such ~~judgment~~items ~~about~~as the ~~forecasts~~collectability of ~~future~~trade ~~taxable~~accounts ~~income~~receivable and ~~are~~inventory ~~consistent~~valuation. Ultimate ~~with~~results ~~the~~may ~~plans~~differ ~~and~~from these estimates weunder ~~are~~different ~~using~~assumptions toor ~~manage the underlying businesses~~conditions.

AtAllowance ~~June~~for ~~30,~~Credit ~~2024~~Losses ~~the~~– ~~Company~~We ~~determined~~establish ~~that~~an ~~based~~allowance onfor ~~the~~credit ~~weight~~losses ~~of available evidence, we will be able~~ to ~~recover~~reduce ~~our~~trade ~~deferred~~accounts ~~tax~~receivable ~~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~~an ~~future~~amount ~~restructuring activities may require~~ that wereasonably ~~establish~~approximates atheir ~~valuation~~net ~~allowance~~realizable ~~against our deferred tax assets~~value. ~~Establishing~~Our aaccounts ~~valuation~~receivable allowance orconsists of an ~~increase in the valuation~~ allowance ~~could~~for ~~result~~expected incredit ~~additional~~losses ~~income~~which ~~tax~~is ~~expense~~established inthrough ~~such~~ a ~~period~~review ~~and~~of ~~could~~open ~~have~~accounts, ahistorical ~~significant~~collection, ~~impact~~and onhistorical ~~our~~write-off ~~future earnings~~amounts. ~~Refer~~ toThe ~~Note~~amount 10ultimately ~~Income~~realized ~~Taxes~~from oftrade ~~Notes~~accounts toreceivable ~~Consolidated~~may ~~Financial~~differ ~~Statements~~from ~~included~~the inamount ~~this~~estimated ~~Annual~~in ~~Report~~the onconsolidated ~~Form~~financial ~~10-K for more information~~statements.

~~Item~~Inventories 7A– We value inventory at the lower of cost or net realizable value. ~~Quantitative~~ Cost of manufactured inventory includes materials, labor and ~~Qualitative~~overhead. ~~Disclosures~~In ~~About~~addition, ~~Market~~finished ~~Risk~~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.

~~General~~Valuation –of ~~Market~~Long-Lived ~~risk~~Assets ~~represents~~– ~~the~~We ~~risk~~periodically ofreview ~~changes in~~ the carrying value of along-lived ~~financial~~assets ~~instrument,~~and ~~derivative~~estimated depreciable or ~~non-derivative,~~amortizable ~~caused~~lives byfor ~~fluctuations~~continued inappropriateness. This ~~interest~~review ~~rates,~~is ~~foreign~~based ~~exchange~~upon ~~rates~~projections ~~and~~of ~~equity~~anticipated ~~prices.~~future Ascash ~~discussed~~flows ~~below,~~and ~~management~~is ofperformed ~~the~~whenever ~~Company~~events ~~does~~or ~~not believe that~~ changes in ~~these~~circumstances ~~factors~~indicate ~~could~~that ~~cause~~asset ~~material~~carrying ~~fluctuations~~values inmay ~~the~~not ~~Company’s~~be ~~results~~recoverable ofor ~~operations~~that orthe ~~cash~~estimated ~~flows.~~depreciable ~~The~~or ~~ability~~amortizable tolives ~~import~~may ~~furniture~~have ~~products~~changed. ~~can~~For belong-lived ~~adversely~~assets, ~~affected~~including byright-of-use ~~political~~lease ~~issues~~assets, inif the ~~countries~~net ~~where~~book ~~suppliers~~value ~~are~~of ~~located,~~the asasset ~~well~~is asgreater ~~disruptions~~than ~~associated~~its ~~with~~estimated ~~shipping~~fair ~~distances~~value ~~and~~less ~~negotiations~~cost ~~with~~to ~~port~~sell, ~~employees.~~an ~~Other~~impairment ~~risks~~is ~~related~~recorded tofor ~~furniture~~the ~~product~~excess ~~importation~~of ~~include~~net ~~government~~book ~~imposition~~value ofover ~~regulations~~estimated ~~and/or~~fair ~~quotas;~~value ~~duties,~~less ~~taxes~~cost orto ~~tariffs~~sell. onWe ~~imports;~~recorded ~~and~~$14.1 ~~significant~~million ~~fluctuation~~of impairments in the ~~value~~fiscal ofyear ~~the~~2025 ~~U.S.~~related ~~dollar~~to ~~against~~our ~~foreign~~Mexicali ~~currencies.~~facility ~~Any~~lease right-of-use ~~these~~asset. ~~factors~~See ~~could~~Note ~~interrupt~~2, ~~supply~~Leases, ~~increase~~for ~~costs,~~the ~~and~~Company’s ~~decrease~~lease ~~earnings~~disclosures. No impairments were recorded in fiscal years 2024 and 2023.

~~Foreign~~Restructuring ~~Currency~~Costs ~~Risk~~ – ~~During~~The ~~fiscal years 2024, 2023, and 2022, the~~ Company ~~did~~groups ~~not~~exit ~~have~~or ~~sales~~disposal ~~but~~cost ~~had~~obligations ~~purchases~~into ~~and~~three ~~other~~categories: ~~expenses~~Involuntary ~~denominated~~employee intermination ~~foreign currencies~~benefits, ~~primarily the Mexican Peso. The wages of our employees and certain other employee benefit and indirect~~ costs ~~related~~ to ~~our~~terminate ~~operations~~contracts, ~~in Mexico are made in Pesos~~ and ~~subject~~other toassociated ~~foreign currency fluctuation with the U~~costs.~~S. dollar.~~ ~~The~~Involuntary ~~Company~~employee ~~does~~termination ~~not~~benefits ~~employ~~must ~~any~~be ~~foreign~~a ~~currency~~one-time ~~hedges~~benefit, ~~against~~and this ~~exposure.~~element Aof ~~negative~~restructuring ~~shift~~cost inis ~~the~~recognized ~~value~~as ofincurred ~~the~~upon ~~U.S.~~communication ~~dollar~~of ~~against~~ the ~~Peso~~plan ~~could~~to ~~increase~~ the ~~cost~~identified ~~of our manufactured product~~employees. Costs ~~In addition, the Company has certain asset and liabilities related~~ to ~~our~~terminate ~~manufacturing~~contracts ~~operations which~~ are ~~denominated~~recognized inupon ~~pesos, primarily our VAT receivable for recoverable VAT paid in Mexico. A negative shift in~~ the ~~value~~effectiveness of the ~~Peso~~termination ~~against~~agreement with the Uprovider.S. Other ~~dollar~~associated ~~could~~restructuring ~~result~~costs inare ~~the~~expensed ~~value~~as ~~of our receivable decreasing which may impact our earnings~~incurred. Any ~~See~~inventory ~~“Risk~~impairment ~~Factors”~~costs inas ~~Item~~a 1Aresult inof ~~this~~restructuring ~~Annual~~activities ~~Report~~are onaccounted ~~Form~~for ~~10-K~~as ~~for~~costs ~~further~~of ~~discussion.~~goods sold.

~~Interest~~Income ~~Rate~~Taxes ~~Risk~~- –In ~~The~~determining ~~Company’s~~taxable ~~primary~~income ~~market~~for ~~risk~~financial ~~exposure~~statement ~~regarding~~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 ~~instruments~~statement isrecognition ~~changes~~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 ~~interest~~the ~~rates~~most recent years, and our forecast of future taxable income. On ~~June~~In 30estimating future taxable income, ~~2024~~we develop assumptions including the amount of future pre-tax operating income, the ~~Company~~reversal ~~had~~of $4temporary differences, and the implementation of feasible and prudent tax planning strategies.8 ~~million~~These ~~outstanding~~assumptions onrequire ~~its~~significant ~~line~~judgment about the forecasts of ~~credit~~future taxable income and are consistent with the plans and estimates we are using to manage the underlying businesses.

16At 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.

~~Table of Contents~~17

~~Item~~Table ~~8. Financial~~of ~~Statements and Supplementary Data~~Contents

~~Index~~Item to7A. Quantitative ~~Consolidated~~and ~~Financial~~Qualitative ~~Statements~~Disclosures About Market Risk

		Page
Report of Independent Registered Public Accounting Firm PCAOB ID 34		18
Report of Independent Registered Public Accounting Firm – Internal Control Over Financial Reporting		20
Consolidated Balance Sheets at June 30, 2024 and 2023		21
Consolidated Statements of Income and Comprehensive Income for the Years Ended June 30, 2024, 2023, and 2022		22
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended June 30, 2024, 2023, and 2022		23
Consolidated Statements of Cash Flows for the Years Ended June 30, 2024, 2023, and 2022		24
Notes to Consolidated Financial Statements		25-38
Schedule II Valuation and Qualifying Accounts		41

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.

17Foreign 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.

~~Table~~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 ~~Contents~~credit.

~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~18

ToTable ~~the shareholders and the Board~~ of ~~Directors of Flexsteel Industries, Inc.~~Contents

~~Opinion~~Item ~~on the~~ 8. Financial Statements and Supplementary Data

We have audited the accompanying consolidated balance sheets of Flexsteel Industries, Inc. and subsidiaries (the “Company”) as of June 30, 2024 and 2023, 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, 2024, and the related notes and the schedule listed in the Index ~~at Item 15 (collectively referred~~ to asConsolidated ~~the~~Financial “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.Statements

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, 2024, 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 30, 2024 expressed an unqualified opinion on the Company’s internal control over financial reporting.


		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

~~Basis for Opinion~~19

~~These~~Table ~~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.Contents

WeREPORT ~~conducted~~OF ~~our~~INDEPENDENT ~~audits~~REGISTERED inPUBLIC ~~accordance~~ACCOUNTING 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.FIRM

~~Critical~~To ~~Audit~~the ~~Matter~~shareholders and the Board of Directors of Flexsteel Industries, Inc.

~~The~~Opinion critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates 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~~Financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.Statements

~~Inventories~~We —have ~~Refer~~audited tothe ~~Notes~~accompanying 1consolidated balance sheets of Flexsteel Industries, Inc. and 3subsidiaries (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.

~~Critical~~We ~~Audit~~have ~~Matter~~also ~~Description~~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.

~~The~~Basis Company has inventories of $96.6 million as of June 30, 2024. 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. Opinion

~~Given~~These ~~the~~financial ~~quantitative~~statements ~~and~~are ~~qualitative~~the ~~materiality~~responsibility of the ~~balance,~~Company’s ~~coupled~~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 ~~judgments~~PCAOB and ~~subjectivity~~are ~~involved~~required to ~~estimate~~be ~~the~~independent ~~markdowns~~with respect to the ~~net~~Company ~~realizable~~in ~~value~~accordance ofwith ~~inventories,~~the ~~auditing~~U.S. ~~management’s~~federal ~~estimates~~securities laws and the applicable rules and regulations of ~~net~~the ~~realizable~~Securities ~~value~~and ~~required~~Exchange ~~subjective~~Commission ~~auditor~~and ~~judgment~~the PCAOB.

18We 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.

~~Table~~Critical ofAudit ~~Contents~~Matters

~~How~~The critical audit matters communicated below are matters arising from the ~~Critical~~current-period ~~Audit~~audit ~~Matter~~of ~~Was~~the ~~Addressed~~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 ~~Audit~~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.

~~Our~~Inventories ~~audit~~— ~~procedures~~Refer ~~related~~ to ~~estimated~~Notes ~~net~~1 ~~realizable~~and ~~value~~3 ofto ~~inventories included~~ the ~~following,~~financial ~~among others:~~statements

WeCritical ~~tested~~Audit ~~the~~Matter 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.Description

WeThe ~~tested~~Company ~~management's~~has ~~process~~inventories toof ~~determine~~$89.1 million as of June 30, 2025. The Company records inventories at the ~~inventory~~lower ~~markdowns~~of ~~and~~cost or net realizable value ofutilizing the first-in, first-out (“FIFO”) method. The Company’s inventory ~~through~~valuation ~~inquiries~~reflects markdowns for the excess of ~~management,~~the ~~and~~cost ~~evaluation~~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 ~~accounting~~previously ~~policies~~recorded ~~and~~markdowns ~~process~~or ~~documentation~~an increase in that newly established cost basis.

WeGiven ~~tested~~ the ~~accuracy~~quantitative and ~~completeness~~qualitative materiality of the ~~Company’s~~balance, ~~measurement~~coupled ofwith ~~inventory markdowns using a sampling approach. We evaluated~~ the ~~appropriateness~~judgments ~~of methodologies~~ and ~~assumptions~~subjectivity ~~used~~involved ~~by management~~ to estimate ~~inventory~~the markdowns ~~including~~to ~~inventory~~the ~~quantities~~net ~~on-hand,~~realizable ~~historical~~value ~~sales~~of ~~activity~~inventories, ~~and~~auditing ~~other~~management’s ~~assumptions~~estimates ~~used~~of bynet ~~management.~~realizable value required subjective auditor judgment.

~~We evaluated management’s measurement of the inventory markdowns and net realizable value by testing the mathematical accuracy of the Company’s calculation.~~ 20

WeTable ~~performed retrospective reviews~~ of ~~actual products sold in the current year against prior year inventory markdowns to net realizable value.~~Contents

~~/s/~~How ~~Deloitte~~the &Critical ~~Touche~~Audit ~~LLP~~Matter Was Addressed in the Audit

~~Minneapolis,~~Our ~~MNAugust~~audit 30procedures related to estimated net realizable value of inventories included the following, ~~2024~~among others:

•

We ~~have~~tested ~~served~~the asdesign and operating effectiveness of internal controls over the ~~Company~~inventory valuation process, including controls over the inputs that are used in management’s ~~auditor~~inventory ~~since~~markdown ~~1965~~for the excess of the cost over the amount expected to be realized.

•

19We 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.

•

~~Table~~We tested the accuracy and completeness of ~~Contents~~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.

•

~~REPORT~~We OFevaluated ~~INDEPENDENT~~management’s ~~REGISTERED~~measurement ~~PUBLIC~~of ~~ACCOUNTING~~the ~~FIRM~~inventory markdowns and net realizable value by testing the mathematical accuracy of the Company’s calculation.

•

ToWe ~~the~~performed ~~shareholders~~retrospective ~~and~~reviews of actual products sold in the ~~Board~~current ofyear ~~Directors~~against ofprior ~~Flexsteel~~year ~~Industries,~~inventory ~~Inc~~markdowns to net realizable value.

~~Opinion~~Mexicali onRight-of-Use ~~Internal~~Asset ~~Control~~Impairment ~~over~~— ~~Financial~~Refer ~~Reporting~~to Notes 1 and 2 to the financial statements

WeCritical ~~have~~Audit ~~audited~~Matter the internal control over financial reporting of Flexsteel Industries, Inc. and subsidiaries (the “Company”) as of June 30, 2024, 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, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.Description

WeThe 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 ~~also~~changed. ~~audited,~~Events that result in ~~accordance~~an ~~with~~impairment review may include a significant decrease in the ~~standards~~operating performance of the ~~Public~~long-lived ~~Company~~asset, ~~Accounting~~or ~~Oversight~~the ~~Board~~decision ~~(United~~to ~~States)~~close ~~(PCAOB)~~a manufacturing facility, or distribution center. If it is determined estimated fair value, less cost to sell, is less than the ~~consolidated~~carrying ~~financial~~value, ~~statements~~the asasset ofis ~~and~~written ~~for~~down to its fair value. In the ~~year~~third ~~ended~~quarter ~~June~~of ~~30,~~fiscal ~~2024~~year 2025, indicators arose that the right-of-use asset assigned to the Company’s ~~and~~manufacturing ~~our~~facility ~~report~~in ~~dated~~Mexicali, ~~August~~Mexico ~~30,~~may ~~2024~~not be fully recoverable. As a result of management’s analysis, ~~expressed~~management anconcluded ~~unqualified~~that ~~opinion~~the onright-of-use ~~those~~asset ~~financial~~related ~~statements~~to this lease is not fully recoverable and recorded a $14.1 million impairment in fiscal year 2025.

~~Basis~~We ~~for~~identified ~~Opinion~~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.

~~The~~How ~~Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of~~ the ~~effectiveness~~Critical ofAudit ~~internal~~Matter ~~control~~Was ~~over~~Addressed ~~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.Audit

WeOur ~~conducted our~~ audit inprocedures ~~accordance~~related ~~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~~sublease ~~that~~rental aincome ~~material~~per ~~weakness~~square ~~exists,~~foot ~~testing~~ and ~~evaluating~~selection ~~the design and operating effectiveness~~ of ~~internal~~discount ~~control based on the assessed risk~~rate, ~~and~~among ~~performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.~~others:

•

~~Definition~~We ~~and~~tested ~~Limitations~~the effectiveness of ~~Internal~~controls ~~Control~~over management’s valuation, including those over ~~Financial~~the ~~Reporting~~sublease rental income per square foot and selection of discount rate.

•

AWe ~~company’s~~inquired ~~internal~~of ~~control~~management ~~over financial reporting is a process designed to provide reasonable assurance~~ regarding the ~~reliability~~viability of ~~financial~~subleasing ~~reporting and~~ the ~~preparation~~manufacturing offacility ~~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~~appropriate ~~that~~sublease ~~(1)~~rental ~~pertain~~income toper ~~the~~square 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 statementsfoot.

•

~~Because~~We ofevaluated ~~its~~the ~~inherent~~reasonableness ~~limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections~~ of ~~any~~management’s ~~evaluation~~plan ~~of effectiveness~~ to ~~future~~sublease ~~periods are subject to~~ the ~~risk that controls may become inadequate because of changes in conditions~~Mexicali, orMexico ~~that~~manufacturing ~~the~~facility ~~degree of compliance with the policies or procedures may deteriorate.~~through:

~~/s/~~Inspection ~~Deloitte~~of &internal ~~Touche,~~communications ~~LLP~~between management and the Board of Directors

~~Minneapolis,~~Inspection ~~MNAugust~~of ~~30,~~historical ~~2024~~subleasing agreements between the Company and tenants.

•

20We 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.

~~Table of Contents~~21

~~FLEXSTEEL~~Table ~~INDUSTRIES,~~of ~~INC. AND SUBSIDIARIES~~Contents

•

~~Consolidated~~With ~~Balance~~the ~~Sheets~~assistance of fair value specialists, we evaluated the reasonableness of the sublease rental income per square foot by:

~~(Amounts~~Testing inthe ~~thousands)~~source information underlying the determination of sublease rental income per square foot and testing the mathematical accuracy of the information

	June 30,
	2024			2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,761		$	3,365
Trade receivables - less allowances: 2024, $2,440; 2023, $2,600		44,238			38,168
Inventories		96,577			122,076
Other		8,098			6,417
Assets held for sale		1,707			616
Total current assets		155,381			170,642
NONCURRENT ASSETS:
Property, plant and equipment, net		36,709			38,652
Operating lease right-of-use assets		61,439			68,294
Deferred income taxes		8,607			7,154
Other assets		12,326			5,808
TOTAL	$	274,462		$	290,550
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	$	25,830		$	24,745
Current portion of operating lease liabilities		7,517			7,179
Accrued liabilities:
Payroll and related items		12,059			9,955
Insurance		1,900			1,920
Sales and advertising related items		6,073			5,358
Other		7,027			5,948
Total current liabilities		60,406			55,105
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities		58,076			64,974
Line of credit		4,822			28,273
Other liabilities		791			577
Total liabilities		124,095			148,929
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY:
Common stock - $1 par value; authorized 15,000 shares; 8,407 shares issued and 5,200 shares outstanding as of June 30, 2024, and 8,292 shares issued and 5,174 shares outstanding as of June 30, 2023		8,407			8,292
Additional paid-in capital		39,573			36,605
Treasury stock, at cost; 3,207 shares and 3,118 shares as of June 30, 2024 and 2023, respectively		(71,731	)		(70,072	)
Retained earnings		174,118			166,796
Total shareholders' equity		150,367			141,621
TOTAL	$	274,462		$	290,550

Comparing sublease rental income per square foot to market data

~~See~~Developing ~~accompanying~~ranges ~~Notes~~of independent estimates and comparing those to ~~Consolidated~~the ~~Financial~~sublease ~~Statements~~rental income per square foot selected by management.

•

21With the assistance of fair value specialists, we evaluated the reasonableness of the discount rate by:

~~Table~~Testing the source information underlying the determination of ~~Contents~~the discount rate and testing the mathematical accuracy of the information

~~FLEXSTEEL~~Comparing ~~INDUSTRIES,~~the ~~INC.~~discount ~~AND~~rate ~~SUBSIDIARIES~~to market data

~~Consolidated~~Developing ~~Statements~~ranges of ~~Income~~independent ~~AND~~estimates ~~COMPREHENSIVE~~and ~~INCOME~~comparing those to the discount rate selected by management

~~(Amounts~~Evaluating inthe ~~thousands,~~application ~~except~~of ~~per~~the ~~share~~discount ~~data)~~rate on the anticipated future cash flows and recalculating the net present value.

	For the years ended June 30,
	2024			2023			2022
Net sales	$	412,752		$	393,692		$	544,282
Cost of goods sold		325,508			322,745			471,602
Gross profit		87,244			70,947			72,680
Selling, general and administrative		70,444			62,846			66,733
Restructuring expense		2,982			—			730
Environmental remediation		—			(2,788	)		—
(Gain) on disposal of assets		(3,262	)		—			(1,400	)
Other expense		—			347			—
Operating income		17,080			10,542			6,617
Other income (expense):
Other income		20			18			121
Interest (expense)		(1,550	)		(1,341	)		(835	)
Total other (expense)		(1,530	)		(1,323	)		(714	)
Income before income taxes		15,550			9,219			5,903
Income tax expense (benefit)		5,022			(5,559	)		4,050
Net income	$	10,528		$	14,778		$	1,853
Weighted average number of common shares outstanding:
Basic		5,170			5,225			6,329
Diluted		5,519			5,385			6,503
Earnings per share of common stock
Basic	$	2.04		$	2.83		$	0.29
Diluted	$	1.91		$	2.74		$	0.28

/s/ Deloitte & Touche LLP

Minneapolis, MNAugust 22, 2025

~~Table~~We ofhave ~~Contents~~served as the Company’s auditor since 1965.

~~FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES~~22

~~Consolidated~~Table ~~Statements~~ of ~~Changes in Shareholders’ Equity~~Contents

~~(Amounts~~REPORT inOF ~~thousands)~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

	Total Par
	Value of
	Common					Treasury			Retained
	Shares ($1 Par)		Capital			Stock			Earnings			Total
Balance at June 30, 2021	$	8,133	$	34,015		$	(31,320	)	$	157,140		$	167,968
Issuance of common stock:
Stock options exercised, net		7		110			—			—			117
Long-term incentive compensation		—		51			—			—			51
Stock-based compensation		50		291			—			—			341
Treasury stock purchases		—		—			(35,052	)		—			(35,052	)
Cash dividends declared		—		—			—			(3,718	)		(3,718	)
Net income		—		—			—			1,853			1,853
Balance at June 30, 2022	$	8,190	$	34,467		$	(66,372	)	$	155,275		$	131,560
Issuance of common stock:
Stock options exercised, net		—		—			—			—			—
Long-term incentive compensation		—		1,813			—			—			1,813
Stock-based compensation		102		325			—			—			427
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	$	8,292	$	36,605		$	(70,072	)	$	166,796		$	141,621
Issuance of common stock:
Stock options exercised, net		3		85			—			—			88
Long-term incentive compensation		—		3,505			—			—			3,505
Stock-based compensation		112		(622	)		—			—			(510	)
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	$	8,407	$	39,573		$	(71,731	)	$	174,118		$	150,367

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

~~Cash~~Opinion ~~dividends~~on ~~declared~~Internal ~~per~~Control ~~common~~over ~~share~~Financial ~~were $0.60, $0.60, and $0.60 for the fiscal years ended June 30, 2024, 2023, and 2022, respectively.~~Reporting

~~See~~We ~~accompanying~~have ~~Notes~~audited tothe ~~Consolidated~~internal ~~Financial~~control ~~Statements~~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.

23We 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.

~~Table~~Basis offor ~~Contents~~Opinion

~~FLEXSTEEL~~The ~~INDUSTRIES~~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, ~~INC~~included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. ~~AND~~Our ~~SUBSIDIARIES~~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.

~~Consolidated~~We ~~Statements~~conducted our audit in accordance with the standards of ~~Cash~~the ~~Flows~~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.

~~(Amounts~~Definition inand ~~thousands)~~Limitations of Internal Control over Financial Reporting

	For the years ended June 30,
	2024			2023			2022
OPERATING ACTIVITIES:
Net income	$	10,528		$	14,778		$	1,853
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		3,997			4,572			5,171
Deferred income taxes		(1,454	)		(7,154	)		—
Stock-based compensation expense		4,647			3,191			1,020
Changes in (recoveries) provision for losses on accounts receivable		(160	)		(380	)		(260	)
(Gain) on disposition of capital assets		(2,839	)		(313	)		(1,782	)
Changes in operating assets and liabilities:
Trade receivables		(5,910	)		3,318			15,140
Inventories		25,499			19,136			19,913
Other current assets		(1,681	)		(1,467	)		4,470
Other assets		(6,518	)		(3,865	)		(542	)
Accounts payable - trade		1,373			(7,320	)		(35,809	)
Accrued liabilities		4,177			(1,270	)		(769	)
Other long-term liabilities		224			(237	)		(412	)
Net cash provided by operating activities		31,883			22,989			7,993
INVESTING ACTIVITIES:
Proceeds from sale of capital assets		4,179			340			1,937
Capital expenditures		(4,772	)		(4,790	)		(3,853	)
Net cash (used in) investing activities		(593	)		(4,450	)		(1,916	)
FINANCING ACTIVITIES:
Dividends paid		(3,219	)		(3,241	)		(3,911	)
Treasury stock purchases		(1,659	)		(3,700	)		(35,052	)
Proceeds from lines of credit		367,818			363,805			265,093
Payments on lines of credit		(391,270	)		(373,271	)		(230,854	)
Proceeds from issuance of common stock		88			—			117
Shares withheld for tax payments on vested shares and options exercised		(1,652	)		(951	)		(628	)
Net cash (used in) financing activities		(29,894	)		(17,358	)		(5,235	)
Increase in cash and cash equivalents		1,396			1,181			842
Cash and cash equivalents at beginning of year		3,365			2,184			1,342
Cash and cash equivalents at end of year	$	4,761		$	3,365		$	2,184
SUPPLEMENTAL INFORMATION
Interest paid	$	1,694		$	1,069		$	743
Income taxes (refunded)	$	4,296		$	4,104		$	(823	)
Capital expenditures in accounts payable	$	23		$	311		$	183

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.

~~See~~Because ~~accompanying~~of ~~Notes~~its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to ~~Consolidated~~future ~~Financial~~periods ~~Statements~~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.

24/s/ Deloitte & Touche LLP

~~Table~~Minneapolis, ofMNAugust ~~Contents~~22, 2025

~~FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES~~23

~~Notes~~Table toof ~~Consolidated Financial Statements~~Contents

~~1. SUMMARY~~FLEXSTEEL OFINDUSTRIES, ~~SIGNIFICANT~~INC. ~~ACCOUNTING~~AND ~~POLICIES~~SUBSIDIARIES

~~DESCRIPTION~~Consolidated OFBalance 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.Sheets

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)~~Amounts in ~~the United States of America.~~thousands)

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.


	June 30,
	2025			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

~~FAIR~~See ~~VALUE~~accompanying –Notes 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~~Consolidated ~~short-term~~Financial ~~nature~~Statements. 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.24

~~INVENTORIES~~Table ~~– Inventories are stated at the lower~~ of cost or net realizable value utilizing the first‑in - first‑out (“FIFO”) method. 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.Contents

~~PROPERTY~~FLEXSTEEL INDUSTRIES, ~~PLANT~~INC. 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.~~ SUBSIDIARIES

~~VALUATION~~Consolidated OFStatements ~~LONG–LIVED ASSETS – The Company periodically reviews the carrying value~~ of ~~long-lived~~Income ~~assets~~AND ~~and~~COMPREHENSIVE 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 assets held for sale, 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.INCOME

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”)~~Amounts ~~360,~~in ~~“Property~~thousands, ~~Plant,~~except ~~and~~per ~~Equipment.”~~share 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.data)

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.


	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

Table of Contents

~~LEASES~~FLEXSTEEL ~~– The Company accounts for its leases in accordance with Accounting Standards Update (“ASU”) No. 2016-02~~INDUSTRIES, ~~Leases (Topic 842) (“ASC 842”)~~INC. ~~ASC~~AND 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 has 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. SUBSIDIARIES

~~WARRANTY~~Consolidated –Statements ~~The Company estimates the amount~~ of ~~warranty~~Changes ~~claims~~in onShareholders’ ~~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.~~Equity

~~REVENUE~~(Amounts ~~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.thousands)

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 2014-09, Revenue from Contracts with Customers (Topic 606). 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.


	Total Par
	Value of
	Common					Treasury			Retained
	Shares ($1 Par)		Capital			Stock			Earnings			Total
Balance at June 30, 2022	$	8,190	$	34,467		$	(66,372	)	$	155,275		$	131,560
Issuance of common stock:
Stock-based compensation		34		3,157			—			—			3,191
Vesting of restricted stock units and restricted shares		68		(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	$	8,292	$	36,605		$	(70,072	)	$	166,796		$	141,621
Issuance of common stock:
Stock-based compensation		24		4,622			—			—			4,646
Vesting of restricted stock units and restricted shares		88		(1,739	)		—			—			(1,651	)
Stock options exercised, net		3		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	$	8,407	$	39,573		$	(71,731	)	$	174,118		$	150,367
Issuance of common stock:
Stock-based compensation		14		3,855			—			—			3,869
Vesting of restricted stock units and restricted shares		29		(823	)		—			—			(794	)
Stock options exercised, net		64		(1,961	)		—			—			(1,897	)
Cash dividends declared		—		—			—			(3,837	)		(3,837	)
Net income		—		—			—			20,154			20,154
Balance at June 30, 2025		8,514		40,644			(71,731	)		190,435			167,862

~~Provisions~~Cash ~~for~~dividends ~~customer~~declared ~~volume~~per ~~rebates,~~common ~~product~~share ~~returns,~~were ~~discounts~~$0.71, ~~and allowances are variable considerations and are recorded as a reduction of revenue in the same period the related sales are recorded~~$0.60, ~~Such provisions are calculated based upon historical data~~ and ~~discount percentages, set with each customer~~$0.60 ~~Consideration given to customers~~ for ~~cooperative advertising is recognized as a reduction of revenue except to~~ the ~~extent~~fiscal ~~there~~years isended aJune ~~distinct~~30, ~~good or service and evidence of the fair value of the advertising~~2025, ~~in which case the expense is classified as selling~~2024, ~~general~~ and ~~administrative~~2023, ~~expense (SG&A)~~respectively.

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

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, 2024, the Company had $0.14 million of customer deposits. As of June 30, 2023, the Company had $0.07 million of customer deposits.26

~~The~~Table ~~Company~~of ~~follows the following practical expedients and policy elections:~~Contents

~~The~~FLEXSTEEL ~~Company does not adjust contract prices for the effects of a significant financing component~~INDUSTRIES, asINC. itAND ~~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.~~SUBSIDIARIES

~~Costs~~Consolidated ~~for~~Statements ~~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~~Cash 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. Flows

~~Incremental~~(Amounts ~~costs~~in ~~of obtaining a contract, specifically commissions, are recorded as an SG&A expense when incurred.~~ thousands)

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.


	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

~~ADVERTISING~~See ~~COSTS~~accompanying –Notes ~~are charged~~ to ~~selling,~~Consolidated ~~general~~Financial ~~and administrative expenses in the periods incurred~~Statements. ~~The Company conducts no direct-response advertising programs and there are no assets related to advertising recorded on the consolidated balance sheets.~~

2627

Table of Contents

~~Advertising~~FLEXSTEEL ~~expenditures~~INDUSTRIES, ~~primarily shared customer advertising in which an identifiable benefit is received and national trade-advertising programs, were approximately $5~~INC.9 ~~million,~~AND ~~$5.1 million, and $5.8 million in fiscal years 2024, 2023, and 2022, respectively.~~ SUBSIDIARIES

~~DESIGN,~~Notes ~~RESEARCH, AND DEVELOPMENT COSTS – are charged~~ to ~~selling,~~Consolidated ~~general~~Financial and administrative expenses in the periods incurred. Expenditures for design, research, and development costs were approximately $2.1 million, $2.1 million, and $2.9 million in fiscal years 2024, 2023, and 2022, respectively.Statements

~~INSURANCE – The Company is self-insured for health care and most workers’ compensation up to predetermined amounts above which third-party insurance applies~~1. ~~The Company purchases specific stop-loss insurance for individual health care claims in excess of $175,000 per plan year.~~ ~~For~~SUMMARY ~~workers’~~OF ~~compensation,~~SIGNIFICANT ~~the~~ACCOUNTING 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.POLICIES

~~INCOME~~DESCRIPTION ~~TAXES~~OF BUSINESS – ~~The~~Flexsteel ~~Company~~Industries, ~~uses the liability method of accounting for income taxes~~Inc. ~~Under this method~~, ~~deferred tax assets~~ and ~~liabilities~~Subsidiaries ~~are~~(the ~~determined~~“Company” ~~based~~or on“Flexsteel” ~~differences~~or ~~between~~“Our”) ~~the~~is ~~financial~~one ~~reporting and tax bases~~ of ~~assets and liabilities and are measured using~~ the ~~enacted~~largest ~~tax~~manufacturers, ~~rates~~importers, and ~~laws~~marketers ~~that~~of ~~will~~furniture beproducts in ~~effect when~~ the ~~differences~~United ~~are expected to reverse~~States. ~~The~~Product ~~Company~~offerings ~~recognizes~~include ina ~~its~~wide ~~financial~~variety ~~statements~~of ~~the~~furniture ~~tax~~such ~~benefit~~as ~~from~~sofas, anloveseats, ~~uncertain~~chairs, ~~tax~~reclining ~~position~~rocking ~~only~~chairs, ifswivel itrockers, issofa ~~more~~beds, ~~likely~~convertible ~~than~~bedding ~~not~~units, ~~that~~occasional ~~the~~tables, ~~tax~~desks, ~~position~~dining ~~will~~tables beand ~~sustained~~chairs, onkitchen ~~examination~~storage, bybedroom ~~the~~furniture, ~~taxing~~and ~~authorities,~~outdoor ~~based~~furniture. onA ~~the~~featured ~~technical~~component ~~merits~~in most of the ~~position.~~upholstered Infurniture ~~December~~is ~~2019,~~a ~~the~~unique ~~FASB~~steel ~~issued ASU 2019~~drop-12in ~~“Income~~seat ~~Taxes~~spring ~~Simplifying~~from which the ~~Accounting~~name ~~for Income Taxes (Topic 740)~~“Flexsteel” asis ~~part of its initiative to reduce complexity in the accounting standards~~derived. The ~~amendments~~Company indistributes ~~ASU~~its ~~2019-12~~products ~~eliminate~~throughout ~~certain exceptions related to~~ the ~~approach~~United ~~for~~States ~~interim~~through ~~period~~its ~~tax~~e-commerce ~~allocation,~~channel ~~the methodology for calculating income taxes in an interim period,~~ and ~~the~~dealer ~~recognition~~sales ~~of deferred tax liabilities for outside basis differences~~force.

~~EARNINGS~~PRINCIPLES ~~PER~~OF ~~SHARE~~CONSOLIDATION ~~(EPS)~~ – ~~Basic~~The ~~EPS~~consolidated offinancial ~~common~~statements ~~stock~~include ~~is based on~~ the ~~weighted-average~~accounts ~~number~~ of ~~common~~Flexsteel ~~shares~~Industries, ~~outstanding during each fiscal year~~Inc. ~~Diluted~~and ~~EPS~~its ofwholly ~~common~~owned ~~stock~~subsidiaries. ~~includes~~All ~~the~~intercompany ~~dilutive~~transactions ~~effect~~and ofaccounts ~~potential~~have ~~common~~been ~~shares~~eliminated ~~outstanding~~in consolidation. The Company’s ~~potential~~consolidated ~~common~~financial ~~shares~~statements ~~outstanding are stock options, shares associated with the long-term management incentive compensation plan~~ and ~~non-vested~~results ~~restricted shares. The Company calculates the dilutive effect~~ of ~~outstanding~~operations ~~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~~consolidated ~~number~~financial ofstatements ~~shares,~~prepared ifin ~~any,~~accordance ~~that~~with ~~would~~Generally beAccepted ~~issuable~~Accounting ifPrinciples ~~the~~(GAAP) ~~end~~in of the ~~fiscal~~United ~~year~~States ~~were the end~~ of ~~the contingency period~~America. ~~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)	2024		2023		2022
Basic shares		5,170		5,225		6,329
Potential common shares:
Stock options		117		62		113
Long-term incentive plan		232		98		61
Diluted shares		5,519		5,385		6,503
Anti-dilutive shares		37		161		67

~~STOCK–BASED~~FAIR ~~COMPENSATION~~VALUE – The Company’s ~~recognizes~~cash ~~compensation~~and ~~expense~~cash ~~related~~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 ~~the~~their ~~cost~~short-term ofnature. ~~employee~~GAAP ~~services~~on ~~received~~fair invalue ~~exchange~~measurement for ~~Company~~certain ~~equity~~financial ~~interests~~assets ~~based~~and onliabilities ~~the~~require ~~award’s~~that each asset and liability carried at fair value atbe ~~the~~classified ~~date~~into one of ~~grant.~~the ~~The~~following ~~Company~~categories: ~~recognizes~~Level ~~long-term~~1: ~~incentive~~Quoted ~~compensation~~market ~~plan~~prices ~~expenses~~in ~~during~~active ~~the~~markets ~~three-year~~for ~~performance~~identical ~~periods~~assets and liabilities; ~~stock~~Level ~~awards~~2: Observable market-based inputs or unobservable inputs that are ~~issued~~corroborated ~~following~~by ~~the~~market ~~end~~data; ofor ~~the~~Level ~~performance~~3: ~~periods~~Unobservable ~~and~~inputs that are ~~subject~~not tocorroborated ~~verification~~by ofmarket ~~results~~data. ~~and~~The ~~the~~Company ~~Compensation~~has ~~Committee~~not ofchanged its valuation techniques in measuring the ~~Board~~fair value of ~~Directors~~any ~~approval. See~~financial ~~Note~~assets ~~11,~~and ~~Stock-Based~~liabilities ~~Compensation~~during the period.

~~SEGMENT~~ALLOWANCE ~~REPORTING~~FOR CREDIT LOSSES – The Company ~~operates~~establishes inan ~~one~~allowance ~~reportable~~for ~~segment,~~credit ~~furniture~~losses ~~products.~~to ~~The~~reduce ~~Company’s~~trade ~~operations~~accounts ~~involve~~receivable ~~the~~to ~~distribution~~an ofamount ~~manufactured~~that ~~and~~reasonably ~~imported~~approximates ~~furniture~~their ~~for~~net ~~the~~realizable ~~residential market~~value. The Company’s ~~furniture~~allowance ~~products~~for ~~are~~credit ~~sold~~losses ~~primarily~~is ~~throughout~~established ~~the~~through ~~United~~review ~~States~~of ~~and~~open ~~Canada~~accounts, byhistorical ~~the~~collection, ~~Company’s internal sales force~~ and ~~various~~historical ~~independent~~write-off ~~representatives~~amounts. The ~~Company~~amount ~~makes~~ultimately ~~minimal~~realized ~~export~~from ~~sales.~~trade Noaccounts ~~single~~receivable ~~customer~~may ~~accounted~~differ ~~for~~from ~~more~~the ~~than~~amount ~~10%~~estimated ofin ~~net~~the ~~sales.~~consolidated financial statements.

~~TREASURY~~INVENTORIES ~~STOCK~~ – ~~Treasury~~Inventories ~~stock purchases~~ are stated at the lower of cost ~~and~~or ~~presented~~net asrealizable avalue ~~reduction~~utilizing the first‑in - first‑out (“FIFO”) method. Cost of ~~equity~~manufactured oninventory ~~the~~includes ~~consolidated~~materials, ~~balance~~labor ~~sheets~~and overhead. OnIn ~~June~~addition, 1finished goods inventory includes capitalized freight, ~~2020~~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 ~~Board~~inventory. ofSubsequent ~~Directors~~changes ~~authorized~~in afacts $6or ~~million~~circumstances ~~share~~do ~~repurchase~~not ~~program~~result ~~through~~in ~~June~~the 9,reversal ~~2021.~~of Onpreviously recorded markdowns or an increase in that newly established cost basis.

27PROPERTY, 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.

~~Table~~VALUATION OF LONG–LIVED ASSETS – The Company periodically reviews the carrying value of ~~Contents~~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.

~~August~~ASSETS ~~20,~~HELD ~~2020,~~FOR ~~the~~SALE ~~Company’s~~– ~~Board~~Assets ofheld ~~Directors~~for ~~authorized~~sale anrepresent ~~additional $8 million share repurchase program to begin on September 4~~land, ~~2020~~buildings, ~~through~~machinery ~~September~~and 3,equipment ~~2021.~~for Onlocations ~~October~~that ~~22,~~have ~~2020,~~met the ~~Company’s~~criteria ~~Board~~ of ~~Directors~~“held ~~authorized~~for ~~another~~sale” ~~$30~~accounting, ~~million~~as ~~share~~specified ~~repurchase~~by ~~program~~Accounting ~~through~~Standards ~~October~~Codification 29(“ASC”) 360, ~~2023. On January 20~~“Property, ~~2022~~Plant, ~~the~~and ~~Board~~Equipment.” ofOnce ~~Directors~~an ~~approved~~asset ais ~~new~~classified ~~repurchase~~as ~~program~~held ~~authorizing~~for ~~the~~sale, ~~Company to purchase up to an additional $30 million of~~ the Company’s ~~common~~ceases ~~stock~~depreciating ~~through January 19, 2025. As of October 31, 2020,~~ the ~~$6 million and $8 million repurchase programs were completed~~asset. The ~~Company~~assets ~~completed~~held ~~the~~for ~~share~~sale ~~repurchases~~are ofbeing ~~the~~marketed ~~October~~for ~~22,~~sale ~~2020~~and ~~plan~~it inis ~~February 2022. As of June 30, 2024,~~ the Company’s ~~has~~intention ~~purchased~~to acomplete ~~total~~the ofsale ~~3,207,158 shares at a cost~~ of ~~$71.7 million under~~ the ~~four~~assets ~~programs~~within ~~and has $2.1 million remaining in~~ the ~~January~~upcoming ~~2022, $30 million share repurchase program~~year.

2RESTRUCTURING 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. ~~LEASES~~

The Company accounts for its leases in accordance with ASU No. 2016-02, Leases (Topic 842) (“ASC 842”). 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 has 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 and the remaining balance of lease incentives received. Both the lease ROU asset and liability are reduced to zero at the end of the lease term.28

~~The~~Table 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. Contents

~~For~~Costs ~~purposes~~to ofterminate ~~measuring~~contracts ~~the~~are ~~Company’s~~recognized ~~ROU~~upon ~~asset~~termination ~~and~~agreement ~~lease~~with ~~liability,~~ the ~~discount~~provider. ~~rate~~Other ~~utilized~~associated byrestructuring ~~the~~costs ~~Company~~are ~~was~~expensed ~~based~~as ~~on the average interest rates effective for the Company’s line of credit~~incurred. ~~Some~~Any ofinventory ~~the~~impairment ~~Company’s~~costs ~~leases~~as ~~contain~~a ~~variable~~result ~~rent payments, including common area maintenance and utilities. Due to the variable nature~~ of ~~these~~restructuring ~~costs,~~activities ~~they~~ are ~~not~~accounted ~~included~~for inas ~~the~~cost ~~measurement~~ of ~~the~~goods ~~ROU asset and lease liability~~sold.

LEASES – The ~~components~~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 ~~Company’s~~present ~~leases~~value ~~reflected~~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’s ~~consolidated~~made ~~statements~~an ofaccounting ~~income~~policy ~~were~~election to not recognize short-term leases on the Consolidated Balance Sheets and all non-lease components, such as ~~follows:~~common area maintenance, were excluded. See Note 2, Leases, for the Company’s lease disclosures.

(in thousands)	June 30, 2024		June 30, 2023
Operating lease expense	$	9,772	$	10,814
Variable lease expense		1,853		1,799
Total lease expense	$	11,625	$	12,613

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.

28REVENUE 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.

~~Table~~The Company’s revenues result from the sale of ~~Contents~~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.

~~Other~~Provisions ~~information~~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 ~~leases~~customers for cooperative advertising is recognized as a reduction of revenue except to the extent there is a distinct good or service and ~~future~~evidence ~~minimum~~of ~~lease~~the ~~payments~~fair ~~under~~value ~~non-cancellable~~of ~~operating~~the ~~leases~~advertising, ~~were~~in which case the expense is classified as ~~follows:~~selling, general and administrative expense (SG&A).

Fiscal year	June 30, 2024			June 30, 2023
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,502		$	9,119
Cash received from subleasing of operating lease:
Operating cash flows received from subleasing of operating lease	$	2,744		$	175
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	797		$	38,775
Weighted-average remaining lease term (in years):
Operating leases		8.2			9.1
Weighted-average discount rate:
Operating leases		3.1	%		2.9	%
Fiscal year				June 30, 2024
(in thousands)
Payments in FY2025				$	9,418
FY2026					9,208
FY2027					9,378
FY2028					9,144
FY2029					8,064
Thereafter					28,976
Total future minimum lease payments				$	74,188
Less imputed interest					8,595
Lease liability				$	65,593

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.

3Occasionally, the Company receives deposits from customers before it has transferred control of the product to customers, resulting in contract liabilities. ~~INVENTORIES~~ 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.

AThe ~~comparison~~Company offollows ~~inventories~~the isfollowing aspractical ~~follows~~expedients and policy elections:

•

	June 30,
(in thousands)	2024		2023
Raw materials	$	14,030	$	18,616
Work in process and finished parts		2,654		3,741
Finished goods		79,893		99,719
Total	$	96,577	$	122,076

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.

•

29Costs 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.

•

~~Table~~Incremental costs of ~~Contents~~obtaining a contract, specifically commissions, are recorded as an SG&A expense when incurred.

•

~~4. PROPERTY~~All taxes imposed on and concurrent with revenue-producing transactions and collected by the Company from a customer, ~~PLANT~~including ~~AND~~sales, ~~EQUIPMENT~~use, excise, and franchise taxes are excluded from the measurement of the transaction price.

	Estimated	June 30,
(in thousands)	Life (Years)	2024			2023
Land		$	3,226		$	3,457
Buildings and improvements	5-39		41,968			49,131
Machinery and equipment	3-7		20,864			19,824
Delivery equipment	3-5		2,570			2,962
Furniture and fixtures	3-7		3,226			3,558
Computer software and hardware	3-7		10,033			8,919
Construction in progress			1,439			4,231
Total			83,326			92,082
Less accumulated depreciation			(46,617	)		(53,430	)
Net		$	36,709		$	38,652

~~The~~Table ~~Company~~of ~~recognized no impairment charges for fiscal years 2024, 2023, and 2022.~~ Contents

5ADVERTISING 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. ~~RESTRUCTURING~~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.

~~Exit~~DESIGN, ofRESEARCH, ~~Commercial~~AND ~~Office~~DEVELOPMENT COSTS – are charged to selling, ~~Hospitality~~general and ~~Vehicle~~administrative ~~Seating~~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.

OnINSURANCE ~~May~~– ~~15,~~The ~~2019,~~Company ~~the~~is ~~Company~~self-insured ~~announced~~for ~~its~~health ~~plans~~care and most workers’ compensation up to ~~exit~~predetermined ~~the~~amounts ~~Commercial~~above ~~Office~~which ~~and~~third-party ~~custom~~insurance applies. The Company purchases specific stop-~~designed~~loss ~~Hospitality~~insurance ~~product~~for ~~lines~~individual health care claims in excess of $175,000 per plan year. ~~These~~For ~~changes~~workers’ ~~were~~compensation, ~~initial~~the ~~outcomes~~Company ~~driven~~retains bythe ~~customer~~first $250,000 per claim and ~~product~~purchases ~~line~~excess ~~profitability~~coverage ~~and~~up ~~footprint~~to ~~utilization~~the ~~analyses~~statutory limits for amounts in excess of the ~~fourth~~retention ~~quarter~~limit. Losses are accrued based upon the Company’s estimates of ~~fiscal~~the ~~2019~~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.

OnINCOME ~~June~~TAXES ~~18,~~– ~~2019,~~The Company uses the ~~Company~~liability ~~announced~~method ~~that~~of itaccounting ~~completed~~for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the ~~analysis~~financial reporting and tax bases of assets and liabilities and are measured using the ~~planning~~enacted ~~process~~tax rates and ~~set~~laws ~~forth~~that will be in effect when the ~~comprehensive~~differences ~~transformation~~are ~~program~~expected to bereverse. ~~executed~~The ~~over~~Company arecognizes ~~two-year~~in ~~period,~~its ~~which~~financial ~~included~~statements ~~previously~~the ~~announced~~tax ~~restructuring~~benefit ~~activities~~from onan ~~May~~uncertain ~~15,~~tax ~~2019.~~position ~~The~~only ~~transformation~~if ~~program~~it ~~included~~is ~~activities~~more ~~such~~likely asthan ~~business~~not ~~simplification,~~that ~~process~~the ~~improvement,~~tax ~~exiting~~position ofwill ~~non-core~~be ~~businesses,~~sustained ~~facility~~on ~~closures~~examination by the taxing authorities, ~~and~~based ~~reductions~~on inthe technical merits of the ~~workforce~~position. ~~The~~In ~~Company~~December ~~has~~2019, ~~completed~~the FASB issued ASU 2019-12 “Income Taxes Simplifying the ~~portion~~Accounting for Income Taxes (Topic 740)” as part of its initiative to reduce complexity in the ~~restructuring~~accounting ~~activities~~standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the ~~exit~~approach offor interim period tax allocation, the ~~Commercial~~methodology ~~Office~~for calculating income taxes in an interim period, and ~~custom-designed~~the ~~Hospitality~~recognition ~~product~~of ~~lines~~deferred tax liabilities for outside basis differences.

OnEARNINGS ~~April~~PER ~~28,~~SHARE ~~2020,~~(EPS) ~~the~~– ~~Company~~Basic ~~announced~~EPS ~~that~~of itcommon ~~will~~stock ~~exit~~is based on the ~~Vehicle~~weighted-average ~~Seating~~number ~~and~~of ~~the~~common ~~remainder~~shares outstanding during each fiscal year. Diluted EPS of common stock includes the ~~Hospitality~~dilutive ~~product~~effect ~~lines,~~of ~~and~~potential ~~subsequently~~common ~~closed~~shares ~~its~~outstanding. ~~Dubuque,~~The ~~Iowa~~Company’s ~~and~~potential ~~Starkville~~common shares outstanding are stock options, ~~Mississippi~~shares ~~manufacturing~~associated ~~facilities~~with the long-term management incentive compensation plan and non-vested restricted shares. The ~~remaining~~Company ~~properties~~calculates ~~listed~~the ~~for~~dilutive ~~sale~~effect asof ~~part~~outstanding ofoptions using the ~~footprint~~treasury ~~optimization~~stock method; all options are anti-dilutive when there is a loss. Anti-dilutive shares are not included in ~~Note~~the 6,computation ~~Assets~~of ~~Held~~diluted ~~for~~EPS ~~Sale~~when their exercise price was greater than the average closing market price of the common shares. The Company ~~completed~~calculates ~~all~~ the ~~restructuring~~dilutive ~~activities~~effect of shares related to the ~~exit~~long-term ofmanagement ~~the~~incentive ~~Vehicle~~compensation ~~Seating~~plan and non-vested shares based on the ~~remainder~~number of ~~the~~shares, ~~Hospitality~~if ~~product~~any, ~~lines~~that ~~during~~would be issuable if the end of the fiscal ~~2021~~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:

As a result of these planned actions, which were complete as of the fiscal year ended June 30, 2022, the Company had planned to incur pre-tax restructuring and related expenses of approximately $60 million over this two-year timeframe. Total cumulative restructuring and related costs incurred as of June 30, 2022, were $59.4 million. There were no costs related to these restructuring activities in the fiscal years ended June 30, 2023 and June 30, 2024.


	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

~~Manufacturing~~STOCK–BASED ~~Network~~COMPENSATION ~~Optimization~~– 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.

OnSEGMENT ~~February~~REPORTING 5,– ~~2024,~~The ~~the~~ Company ~~announced~~operates ~~its~~as ~~plan~~one tooperating ~~close~~segment ~~its~~and ~~Dublin,~~one ~~Georgia~~reportable ~~manufacturing~~segment, ~~facility~~furniture products. The ~~closure~~Company’s ~~was~~operations ~~completed~~involve in the ~~fourth~~distribution ~~quarter~~ of ~~fiscal~~manufactured ~~year~~and ~~2024.~~imported Asfurniture afor ~~result of~~ the ~~closure~~residential ~~the~~market. The Company’s ~~expected~~furniture toproducts ~~incur~~are ~~pre-tax~~sold ~~restructuring~~primarily ~~expense~~throughout ofthe ~~approximately~~United ~~$2.5~~States toby ~~$3.2~~the ~~million.~~Company’s ~~Total~~internal ~~cumulative~~sales ~~restructuring~~force ~~costs~~and ~~related~~various toindependent ~~the~~representatives. ~~planned~~The ~~action~~Company ~~were~~has ~~$3.0~~minimal ~~million.~~export ~~The Dublin~~sales, ~~Georgia~~primarily ~~facility~~to ~~and~~Canada ~~property~~or ~~are~~Mexico. ~~listed~~No single customer accounted for ~~sale~~more ~~following~~than ~~the~~10% ~~closure~~of net sales. See Note 612, ~~Assets~~Segment ~~Held For Sale for more information~~Information.

~~The following is a summary of restructuring costs:~~30

Filing Compare · FLEXSTEEL INDUSTRIES INC