Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures – Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, the Company’s chief executive officer and chief financial officer have concluded that disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective as of June 30, 2026.
Management’s Annual Report on Internal Control Over Financial Reporting – Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) or 15d-15(f) of the Securities Exchange Act of 1934, as amended. The Company performed an evaluation under the supervision and with the participation of its management, including the CEO and CFO, to assess the effectiveness of the design and operation of its disclosure controls and procedures under the Exchange Act as of June 30, 2026. In making this assessment, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on those criteria, management concluded that the internal control over financial reporting is effective as of June 30, 2026.
The effectiveness of the Company’s internal control over financial reporting as of June 30, 2026, has been audited by Deloitte & Touche LLP, the Company’s independent registered public accounting firm, as stated in their report in Part II, Item 8 of this Form 10-K.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Othe r Information
Rule 10b5-1 Trading Plans
During the quarter ended June 30, 2026 , no director or officer of the Company adopted , modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408(a) of Regulation S-K.
Benefit Plan Amendments
Effective August 19, 2025, the Company amended its “Cash Incentive Plan,” “Cash Incentive Notification of Award,” and “Severance Plan for Management Employees” to align plan terms with current peer and market practices and improve administrative consistency. Revisions include the removal of outdated tax code references and the alignment of key definitions such as “retirement,” “change in control,” “termination for cause”, “disability”, and “good reason” across benefit plans. Amendments to the “Severance Plan for Management Employees” also include an increase to the change of control protection period to 24 months after termination and an increase to the chief executive officer severance benefits to twice the severance benefits of other eligible employees. The amended “Cash Incentive Plan,” “Cash Incentive Notification of Award,” and “Severance Plan for Management Employees” have been attached to this Form 10-K as Exhibits 10.1, 10.2 and 10.11, respectively.
New Line of Credit Agreement
On August 18, 2026, the Company, as borrower, entered into a Credit Agreement (the “New Credit Agreement”) with Wells Fargo Bank, National Association (the “Lender”), providing for a secured revolving credit facility in an aggregate principal amount of up to $30.0 million (the “Credit Facility”). The New Credit Agreement replaces the Credit Agreement.
The Company intends to use borrowings under the Credit Facility for working capital and other general corporate purposes.
The Credit Facility matures on August 18, 2029. The Company may prepay outstanding borrowings under the Credit Facility, in whole or in part, at any time without premium or penalty, subject to the terms of the New Credit Agreement.
Amounts outstanding under the Credit Facility bear interest at a rate per annum equal to Daily Simple SOFR plus a margin of 1.25%. Interest is payable monthly in arrears on the first business day of each month. In connection with the New Credit Agreement, the Company paid the Lender a commitment fee of $125,000. The Company is also required to pay a commitment fee equal to 0.30% per
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annum on the average daily unused portion of the Credit Facility and letter of credit fees at a rate equal to the then-effective applicable margin for advances under the New Credit Agreement multiplied by the aggregate amount of letters of credit outstanding.
The obligations of the Company under the Credit Facility are secured pursuant to a Security Agreement (the “Security Agreement”) entered into with the Lender, pursuant to which the Company granted the Lender a security interest in substantially all of the Company’s personal property assets, whether now owned or hereafter acquired, including accounts receivable, deposit accounts, inventory, equipment, general intangibles, software, licenses, payment rights and related proceeds thereof, but excluding the Company’s real property.
The New Credit Agreement contains customary affirmative and negative covenants, including covenants that, among other things, limit or restrict the Company’s ability to incur indebtedness, grant liens, make investments, loans and advances, provide guarantees, pay dividends, engage in mergers, consolidations and other fundamental changes, and enter into certain transactions. In addition, the New Credit Agreement requires the Company to maintain (i) an Asset Coverage Ratio of not less than 2.00 to 1.00, measured as of the last day of each fiscal quarter, and (ii) EBITDA of not less than $15.0 million, measured on a rolling four-quarter basis as of the end of each fiscal quarter.
The New Credit Agreement contains customary events of default, including, among others, the failure to pay principal, interest or other amounts when due, breaches of covenants, certain bankruptcy or insolvency events, material judgment defaults and certain change of control events. Upon the occurrence and continuation of an event of default, the Lender may terminate its commitments under the Credit Facility and declare all outstanding obligations immediately due and payable.
The foregoing description of the New Credit Agreement, the Security Agreement, the Revolving Line of Credit Note and the other loan documents does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements, copies of which are filed as Exhibits 10.14 through 10.16 to this Annual Report on Form 10-K and incorporated herein by reference.
See Note 9 Credit Arrangements of Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
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PART III
Item 10. Directors, Executive Officers, and Corporate Governance
In accordance with General Instruction G(3) to Form 10-K, the Company intends to file with the SEC the information required by this item not later than 120 days after the end of the fiscal year covered by this Form 10-K.
Item 11. Executive Compensation
In accordance with General Instruction G(3) to Form 10-K, the Company intends to file with the SEC the information required by this item not later than 120 days after the end of the fiscal year covered by this Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
In accordance with General Instruction G(3) to Form 10-K, the Company intends to file with the SEC the information required by this item not later than 120 days after the end of the fiscal year covered by this Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
In accordance with General Instruction G(3) to Form 10-K, the Company intends to file with the SEC the information required by this item not later than 120 days after the end of the fiscal year covered by this Form 10-K.
Item 14. Principal Accountant Fees and Services
In accordance with General Instruction G(3) to Form 10-K, the Company intends to file with the SEC the information required by this item not later than 120 days after the end of the fiscal year covered by this Form 10-K.
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PART IV
Item 15. Exhibits, Financial Statements and Schedules
Financial Statements and Financial Statement Schedules
See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Annual Report on Form 10-K. Schedule II is included in Part II, Item 8, and all other financial statement schedules have been omitted because they are not required or are not applicable or because the information required in those schedules either is not material or is included in the consolidated financial statements or the accompanying notes.
Exhibits
The exhibits listed in the accompanying index to exhibits are filed or incorporated as part of this Annual Report on Form 10-K.
The following financial statement schedule for the years ended June 30, 2026, 2025, and 2024 is submitted herewith:
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended June 30, 2026, 2025, and 2024
(in thousands)
Balance at
Beginning of
(Additions)
Reductions to
Deductions from
Balance at End
Description
Year
Income
Reserves
of Year
Accounts Receivable Allowances:
2026
$
1,790
$
260
$
( 10
)
$
2,040
2025
$
2,440
$
( 244
)
$
( 406
)
$
1,790
2024
$
2,600
$
( 144
)
$
( 16
)
$
2,440
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Exhibit Index
Exhibit No.
3.1
Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K, as filed with the Securities and Exchange Commission on December 7, 2016).
3.2
Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K, as filed with the Securities and Exchange Commission on March 8, 2024).
4.1
Description of the Company’s common stock (incorporated by reference to Exhibit No. 4.1 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2019).
10.1
Amended Cash Incentive Compensation Plan, dated August 19, 2025.*
10.2
Form of Notification of Award for the Cash Incentive Compensation Plan.*
10.3
Form of Notification of Award for the Long-Term Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to the Company's Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.4
Form of Notification of Award for incentive stock options issued under the Omnibus Stock Plan (incorporated by reference to Exhibit 10.4 of the Company's Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.5
Form of Notification of Award for director non-qualified stock options issued under the Omnibus Stock Plan (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed with the Securities and Exchange Commission on December 13, 2013). *
10.6
Form of Notification of Award for restricted stock units under the Omnibus Stock Plan (incorporated by reference to Exhibit 10.6 to the Company's Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.7
Long-Term Incentive Compensation Plan, dated July 1, 2013 (incorporated by reference to Appendix B to the Company's Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 28, 2013). *
10.8
Form of Notification of Non-Statutory Stock Option Award (incorporated by reference to Exhibit 10.8 to the Company's Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.9
Amended and Restated Omnibus Stock Plan (incorporated by Reference to the Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on December 15, 2020). *
10.10
Form of Notification of Restricted Stock Award under the Omnibus Stock Plan (incorporated by reference to Exhibit 10.10 to the Company's Form 10-K filed with the Securities and Exchange Commission on September 8, 2021). *
10.11
Amended Severance Plan for Management Employees dated August 19, 2025, including Form of Participation Agreement.*
10.12
Letter Agreement dated March 10, 2020, by and between Flexsteel Industries, Inc. and Derek P. Schmidt (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on March 18, 2020). *
10.13
Employment Agreement between the Company and Derek P. Schmidt dated April 25, 2024 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on April 29, 2024).*
10.14
Credit Agreement between the Company and Wells Fargo Bank, National Association, dated August 18, 2026.
10.15
Security Agreement: Business Assets by the Company in favor of Wells Fargo Bank, National Association, dated August 18, 2026.
10.16
Revolving Line of Credit Note by the Company to Wells Fargo Bank, National Association, dated August 18, 2026.
10.17
Stock Repurchase Agreement by and among the Company. F. Brooks Bertsch and the other entities on Schedule 1 thereto, dates April 26, 2026 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on April 28, 2026).
10.18
Letter Agreement dated January 10, 2024 by and between Flexsteel Industries, Inc. and Michael Ressler (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on January 11, 2024). *
10.19
2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on December 16, 2022). *
10.20
Form of Stock Option Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q filed with the Securities and Exchange Commission on February 8, 2023). *
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10.21
Form of Performance Share Unit Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.29 to the Company's Form 10-K filed with the Securities and Exchange Commission on August 25, 2023). *
10.22
Form of Restricted Stock Unit Agreement under the 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.23 to the Company's Form 10-K filed with the Securities and Exchange Commission on August 25, 2023). *
19.1
Flexsteel Industries, Inc. Insider Trading Policy.
21.1
Subsidiaries of the Company.
23
Consent of Independent Registered Public Accounting Firm.
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32
Certification by Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1
Incentive Compensation Clawback Policy adopted October 6, 2023 (incorporated by reference to Exhibit 97.1 to the Company's Form 10-K filed with the Securities and Exchange Commission on August 30, 2024).
*
Management contracts, compensatory plans and arrangements required to be filed as an exhibit to this report.
Filed herewith
101.INS
XBRL Instance Document**
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104.Cover Page
Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
**
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed to be “furnished” and not “filed.”
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FLEXSTEEL INDUSTRIES, INC.
Date:
August 19, 2026
By:
/s/ Derek P. Schmidt
Derek P. Schmidt
Chief Executive Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Date:
August 19, 2026
/s/ Derek P. Schmidt
Derek P. Schmidt
Chief Executive Officer and Director
(Principal Executive Officer)
Date:
August 19, 2026
/s/ Michael J. Ressler
Michael J. Ressler
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
Date:
August 19, 2026
/s/ Jeanne McGovern
Jeanne McGovern
Chair of the Board of Directors
Date:
August 19, 2026
/s/ William S. Creekmuir
William S. Creekmuir
Director
Date:
August 19, 2026
/s/ Kathryn P. Dickson
Kathryn P. Dickson
Director
Date:
August 19, 2026
/s/ M. Scott Culbreth
M. Scott Culbreth
Director
Date:
August 19, 2026
/s/ Terence P. Calloway
Terence P. Calloway
Director
46