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FLXS Flexsteel Industries

Filed: 30 Apr 21, 3:25pm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

______________________________________

FORM 10-Q

______________________________________

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

For the quarterly period ended March 31, 2021

or

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

For the transition period from to

Commission file number 0-5151

______________________________________

FLEXSTEEL 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

FLXS

The Nasdaq Stock Market, LLC

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the 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 þ Non-Accelerated Filer ¨ Smaller Reporting Company þ 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No þ

Common Stock - $1.00 Par Value

Shares Outstanding as of April 27, 2021

6,853,593


FLEXSTEEL INDUSTRIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2021


PART I FINANCIAL INFORMATION

Item 1.Financial Statements

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands)

March 31,

June 30,

2021

2020

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

16,971

$

48,197

Trade receivables - less allowances: March 31, 2021, $3,050; June 30, 2020, $1,770

44,231

32,217

Inventories

109,448

70,565

Other

10,182

18,535

Assets held for sale

666

12,329

Total current assets

181,498

181,843

NONCURRENT ASSETS:

Property, plant and equipment, net

40,309

43,312

Operating lease right-of-use assets

28,539

8,683

Deferred income taxes

2,111

Other assets

1,384

1,310

TOTAL ASSETS

$

251,730

$

237,259

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable - trade

$

31,798

$

27,747

Current portion of operating lease liabilities

5,741

4,408

Accrued liabilities:

Payroll and related items

4,914

3,275

Insurance

2,987

3,787

Restructuring costs

1,392

1,961

Advertising

4,730

3,823

Environmental remediation

3,570

3,600

Other

5,331

4,861

Total current liabilities

60,463

53,462

LONG-TERM LIABILITIES:

Operating lease liabilities, less current maturities

26,202

7,607

Other liabilities

1,539

685

Total liabilities

88,204

61,754

SHAREHOLDERS' EQUITY:

Common stock - $1 par value; authorized 15,000 shares; 8,125 shares issued and

6,875 outstanding as of March 31, 2021; 8,008 shares issued and

7,876 outstanding as of June 30, 2020

8,125

8,008

Additional paid-in capital

33,100

31,748

Treasury stock, at cost; 1,249 shares and 132 shares as of March 31, 2021 and

June 30, 2020, respectively

(30,048)

(1,563)

Retained earnings

152,349

137,312

Total shareholders' equity

163,526

175,505

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

251,730

$

237,259

See accompanying Notes to Consolidated Financial Statements (Unaudited).

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Amounts in thousands, except per share data)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2021

2020

2021

2020

Net sales

$

118,408

$

98,821

$

342,753

$

302,118

Cost of goods sold

95,284

84,973

272,436

254,999

Gross margin

23,124

13,848

70,317

47,119

Selling, general and administrative

16,292

20,115

49,378

55,678

Restructuring expense

480

2,377

2,724

13,448

Gain on disposal of assets due to restructuring

(302)

(5,881)

(19,269)

Operating income (loss)

6,352

(8,342)

24,096

(2,738)

Interest expense

(16)

(16)

Other income

59

135

270

328

Income (loss) before income taxes

6,411

(8,223)

24,366

(2,426)

Income tax provision (benefit)

1,533

(2,953)

7,159

(1,323)

Net income (loss)

$

4,878

$

(5,270)

$

17,207

$

(1,103)

Weighted average number of common shares outstanding:

Basic

6,998

7,965

7,316

7,955

Diluted

7,270

7,965

7,551

7,955

Earnings (loss) per share of common stock:

Basic

$

0.70

$

(0.66)

$

2.35

$

(0.14)

Diluted

$

0.67

$

(0.66)

$

2.28

$

(0.14)

See accompanying Notes to Consolidated Financial Statements (Unaudited).

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Amounts in thousands)

Three Months Ended

Nine Months Ended

March 31,

March 31,

2021

2020

2021

2020

Net income (loss)

$

4,878

$

(5,270)

$

17,207

$

(1,103)

Other comprehensive loss:

Unrealized loss on securities

(18)

Reclassification of realized loss on securities to

other income

7

Unrealized losses in securities before taxes

(11)

Income tax benefit related to securities losses

3

Other comprehensive loss, net of tax

(8)

Comprehensive income (loss)

$

4,878

$

(5,270)

$

17,207

$

(1,111)

See accompanying Notes to Consolidated Financial Statements (Unaudited).


FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

(Amounts in thousands)

Nine Months Ended March 31, 2021

Total Par

Value of

Additional

Common

Paid-In

Treasury

Retained

Shares ($1 Par)

Capital

Stock

Earnings

Total

Balance at June 30, 2020

$

8,008

$

31,748

$

(1,563)

$

137,312

$

175,505

Stock-based compensation

2

954

956

Vesting of restricted stock units and restricted shares

55

(387)

(332)

Treasury stock purchases

(9,000)

(9,000)

Cash dividends declared

(383)

(383)

Net income

3,879

3,879

Balance at September 30, 2020

$

8,065

$

32,315

$

(10,563)

$

140,808

$

170,625

Stock-based compensation

10

1,017

1,027

Stock options exercised

7

41

48

Treasury stock purchases

(11,013)

(11,013)

Cash dividends declared

(730)

(730)

Net income

8,450

8,450

Balance at December 31, 2020

$

8,082

$

33,373

$

(21,576)

$

148,528

$

168,407

Stock-based compensation

3

772

775

Vesting of restricted stock units and restricted shares

40

(1,045)

(1,005)

Treasury stock purchases

(8,472)

(8,472)

Cash dividends declared

(1,057)

(1,057)

Net income

4,878

4,878

Balance at March 31, 2021

$

8,125

$

33,100

$

(30,048)

$

152,349

$

163,526

Nine Months Ended March 31, 2020

Total Par

Accumulated

Value of

Additional

Other

Common

Paid-In

Retained

Comprehensive

Shares ($1 Par)

Capital

Earnings

(Loss) Income

Total

Balance at June 30, 2019

$

7,903

$

27,512

$

170,004

$

8

$

205,427

Adoption of ASU 2016-02

(42)

(42)

Unrealized gain on available

  for sale investments, net of tax

(8)

(8)

Stock-based compensation

39

1,310

1,349

Cash dividends declared

(1,754)

(1,754)

Net income

9,551

9,551

Balance at September 30, 2019

$

7,942

$

28,822

$

177,759

$

$

214,523

Stock-based compensation

6

1,891

1,897

Stock options exercised

2

19

21

Cash dividends declared

(1,816)

(1,816)

Net income

(5,384)

(5,384)

Balance at December 31, 2019

$

7,950

$

30,732

$

170,559

$

$

209,241

Stock-based compensation

7

538

545

Vesting of restricted stock units and
  restricted shares

44

(512)

(468)

Cash dividends declared

(1,781)

(1,781)

Net loss

(5,270)

(5,270)

Balance at March 31, 2020

$

8,001

$

30,758

$

163,508

$

$

202,267

See accompanying Notes to Consolidated Financial Statements (Unaudited).


FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in thousands)

Nine Months Ended

March 31,

2021

2020

OPERATING ACTIVITIES:

Net income (loss)

$

17,207

$

(1,103)

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation

3,938

6,665

Deferred income taxes

2,111

7,471

Stock-based compensation expense

2,758

3,880

Change in provision for losses on accounts receivable

1,280

4,250

Change in reserve for VAT receivable

(237)

(1,431)

Gain on disposition of capital assets

(5,858)

(19,269)

Changes in operating assets and liabilities:

Trade receivables

(13,294)

(386)

Inventories

(38,883)

18,563

Other current assets

8,589

(1,992)

Other assets

(74)

176

Accounts payable - trade

4,065

4,498

Accrued liabilities

2,140

(7,051)

Other long-term liabilities

857

(383)

Net cash (used in) provided by operating activities

(15,401)

13,888

INVESTING ACTIVITIES:

Purchases of investments

(24)

(1,667)

Proceeds from sales of investments

23

1,673

Proceeds from sale of capital assets

18,527

20,452

Capital expenditures

(1,957)

(3,256)

Net cash provided by investing activities

16,569

17,202

FINANCING ACTIVITIES:

Dividends paid

(2,620)

(5,260)

Treasury stock purchases

(28,485)

Proceeds from line of credits

15,000

Proceeds from issuance of common stock

40

21

Shares withheld for tax payments on vested restricted shares

(1,329)

(558)

Net cash (used in) financing activities

(32,394)

9,203

(Decrease) increase in cash and cash equivalents

(31,226)

40,293

Cash and cash equivalents at beginning of period

48,197

22,247

Cash and cash equivalents at end of period

$

16,971

$

62,540

SUPPLEMENTAL INFORMATION

Income taxes (refunded), net

$

(7,038)

$

(4,623)

Capital expenditures in accounts payable

$

14

$

467

See accompanying Notes to Consolidated Financial Statements (Unaudited).


FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE PERIOD ENDED MARCH 31, 2021

1.  BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS – Flexsteel Industries, Inc. and Subsidiaries (the “Company”) is one of the largest manufacturers, importers and online marketers of furniture products in the United States. Product offerings include a wide variety of furniture such as sofas, loveseats, chairs, reclining and rocker-reclining chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs and bedroom 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 network.

COVID-19 - In March 2020, a novel strain of coronavirus (“COVID-19”) was declared a global pandemic by the World Health Organization. This pandemic has negatively affected the U.S. and global economies, disrupted global supply chains and financial markets, led to significant travel and transportation restrictions, including mandatory business closures and orders to shelter in place. The Company’s business operations and financial performance for the fiscal year 2020 were impacted by COVID-19. During the three and nine months ended March 31, 2021, the Company has seen improvement in our business conditions as retailers have reopened and orders have increased, however, we continue to see supply chain challenges faced by the furniture industry due to limited availability of ocean containers and significant increases in ocean container rates, limited availability and inflationary pressures in key materials, and labor shortages both in Asia and the United States. The COVID-19 pandemic remains fluid and the extent of the impact to our business may be significant, however, we are unable to predict the extent or nature of these impacts at this time.

BASIS OF PRESENTATION – The consolidated financial statements included herein have been prepared by Flexsteel Industries, Inc. and Subsidiaries (the “Company” or “Flexsteel”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information furnished in the consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are, in the opinion of management, necessary for a fair presentation of such consolidated financial statements. Operating results for the three and nine months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. Except to the extent updated or described below, the significant accounting policies set forth in Note 1 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020, appropriately represent, in all material respects, the current status of accounting policies and are incorporated by reference.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS – In June 2016, the Financial Accounting Standards Board (“FASB“) issued Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments - Credit Losses (“Topic 326”)” and also issued subsequent amendments to the initial guidance under ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively Topic 326). Topic 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This replaces the existing incurred loss model with an expected loss model and requires the use of forward-looking information to calculate credit loss estimates. The amendments in this guidance are effective for fiscal years beginning after December 15, 2019, with early adoption permitted for certain amendments. Topic 326 must be adopted by applying a cumulative effect adjustment to retained earnings. Effective July 1, 2020, the Company adopted Topic 326 and there was no impact to the Company’s financial statements.

 

2.  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.

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

For purposes of measuring the Company’s lease liability, the discount rate utilized by the Company was based on the Company’s line of credit as well as publicly available data for instruments with similar terms. Some of the Company’s leases contain variable rent payments, including common area maintenance and utilities. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

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

Three Months Ended

Nine Months Ended

March 31,

March 31,

(in thousands)

2021

2020

2021

2020

Operating lease expense

$

1,491

$

1,366

$

3,556

$

3,707

Variable lease expense

78

69

221

198

Total lease expense

$

1,569

$

1,435

$

3,777

$

3,905

Other information related to leases under non-cancellable operating leases were as follows:

Nine Months Ended

March 31, 2021

March 31, 2020

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$

2,621

$

2,943

Right-of-use assets obtained in exchange for lease liabilities:

Operating leases

$

22,850

$

3,573

Weighted-average remaining lease term (in years):

Operating leases

3.2

2.1

Weighted-average discount rate:

Operating leases

3.3%

3.5%

Future minimum lease payments under non-cancellable operating leases are as follows as of March 31, 2021:

(in thousands)

Within one year

$

6,919

After one year and within two years

5,868

After two years and within three years

4,854

After three years and within four years

3,691

After four years and within five years

2,445

After five years

12,516

Total future minimum lease payments

$

36,293

Less – Discount

4,350

Lease liability

$

31,943

 

3.  INVENTORIES

A comparison of inventories is as follows:

March 31,

June 30,

(in thousands)

2021

2020

Raw materials

$

19,010

$

11,119

Work in process and finished parts

3,934

3,925

Finished goods

86,504

55,521

Total

$

109,448

$

70,565

 

4.  RESTRUCTURING

On May 15, 2019, the Company announced its plans to exit the Commercial Office and custom-designed Hospitality product lines. The changes were initial outcomes driven from customer and product line profitability and footprint utilization analyses in the fourth quarter of fiscal 2019. On June 18, 2019, the Company announced it completed the analysis and planning process and set forth the

comprehensive transformation program to be executed over a two year period, which includes previously announced restructuring activities on May 15, 2019. The transformation program includes activities such as business simplification, process improvement, exiting of non-core businesses, facility closures, and reductions in work force. The Company has substantially completed the portion of the restructuring activities related to the exit of the Commercial Office and custom-designed Hospitality product lines.

On April 28, 2020, the Company announced the exit of the Vehicle Seating and the remainder of the Hospitality product lines, and subsequently closed its Dubuque, Iowa and Starkville, Mississippi manufacturing facilities. The Company expects to complete the restructuring activities related to the exit of the Vehicle Seating and the remainder of the Hospitality product lines during fiscal 2021.

As a result of these planned actions, the Company expects to incur pre-tax restructuring and related expenses of approximately $59.0 million over this two year timeframe of which approximately $27.0 million will be cash and $32.0 million non-cash. The remaining properties listed for sale as part of the footprint optimization are included in Note 5, Assets Held for Sale. Total cumulative restructuring and related costs incurred as of March 31, 2021 were $58.0 million.

The following is a summary of restructuring costs:

Three Months Ended

Nine Months Ended

(in thousands)

March 31, 2021

March 31, 2020

March 31, 2021

March 31, 2020

Inventory impairment

$

$

70

$

45

$

276

One-time employee termination benefits

256

179

725

Other associated costs

480

2,121

2,545

12,723

Total restructuring and related expenses

$

480

$

2,447

$

2,769

$

13,724

Reported as:

Cost of goods sold

$

$

70

$

45

$

276

Operating expenses

$

480

$

2,377

$

2,724

$

13,448

Other associated costs include legal and professional fees, stock-based compensation expense for retention restricted stock units in connection with the Company’s restructuring plan, on-going facilities and transition costs.

The rollforward of the accrued restructuring costs is as follows:

One-time

Employee

Contract

Other

Inventory

Termination

Termination

Associated

(in thousands)

Impairment

Benefits

Costs

Costs

Total

Accrual balance at June 30, 2020

$

$

1,613

$

110

$

238

$

1,961

Costs incurred

45

179

2,545

2,769

Expenses paid

(420)

(110)

(2,327)

(2,857)

Non-cash

(45)

(436)

(481)

Accrual balance at March 31, 2021

$

$

1,372

$

$

20

$

1,392

 

5. ASSETS HELD FOR SALE

In the fiscal year 2020, the Company committed to a plan to sell assets located at the Company’s Starkville, Mississippi and Harrison, Arkansas, locations. The commitment to sell these assets are part of the Company’s restructuring plan, see Note 4 Restructuring. A summary of the assets held for sale is included in the table below as of March 31, 2021.

Accumulated

Net Book

Location

Asset Category

Cost

Depreciation

Value

(in thousands)

Starkville, Mississippi

Building & building improvements

4,615

(4,254)

361

Land & land improvements

694

(439)

255

Total Starkville

5,309

(4,693)

616

Harrison, Arkansas

Building & building improvements

1,000

(1,000)

Land & land improvements

86

(36)

50

Machinery & equipment

1,330

(1,330)

Total Harrison

2,416

(2,366)

50

Total assets held for sale

$

7,725

$

(7,059)

$

666

6.  CREDIT ARRANGEMENTS

On August 28, 2020, the Company entered into a new two year secured $25.0 million revolving line of credit with Dubuque Bank and Trust Company, with interest of 1.50% plus LIBOR, subject to a floor of 3.00%. The revolving line of credit is secured by essentially all the Company’s assets, excluding real property and requires the Company maintain compliance with certain financial and non-financial covenants. The revolving line of credit matures on August 28, 2022. There was 0 outstanding amount under the revolving line of credit as of March 31, 2021.

Letters of credit outstanding at Wells Fargo Bank N.A. (“Wells”) as of March 31, 2021, totaled $1.1 million, of which $1.2 million of the Company’s cash held at Wells is pledged as collateral.

7.  INCOME TAXES

The provision for income taxes for the interim periods is based on an estimate of the Company’s annual effective tax rate adjusted to reflect the impact of discrete items. Management judgment is required in projecting ordinary income to estimate the Company’s annual effective tax rate. The Company’s effective tax rate for the quarters ended March 31, 2021 and March 31, 2020 were 23.9% and 35.9%, respectively, and for the nine months ended March 31, 2021 and March 31, 2020 were 29.4% and 54.5%, respectively.

8.  STOCK-BASED COMPENSATION

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

The following table is a summary of total stock-based compensation expense for the three and nine months ended March 31, 2021.

Three Months Ended

Nine Months Ended

March 31,

March 31,

(in thousands)

2021

2020

2021

2020

Total stock-based compensation expense

$

775

$

544

$

2,758

$

3,621

The Company has 2 stock-based compensation plans available for granting awards to employees and directors.

(1)  Long-Term Incentive Compensation Plan (“LTICP”)

The LTICP provides for RSUs to be awarded to officers and key employees based on performance targets set by the Compensation Committee of the Board of Directors (the “Committee”). The Company selected fully-diluted earnings per share and total shareholder return as the performance goal for the three year performance period from July 1, 2018 – June 30, 2021 (“2019-2021”). As of June 30, 2019, the performance period 2019-2021 is no longer attainable. For the July 1, 2019 – June 30, 2022 (“2020-2022”) and the July 1, 2020 – June 30, 2023 (“2021-2023”) three year performance periods, the Committee selected Adjusted Earnings Before Interest and Tax with a defined percentage growth in fiscal year 2021 and 2022 as the performance goal. Since the 2019-2021 performance period is no longer attainable, only RSUs granted for the 2020-2022 and 2021-2023 performance periods are included in the table below for the Company’s unvested LTICP RSUs during the nine months ended March 31, 2021:

Time Based Vest

Performance Based Vest

Total

Weighted average

Weighted average

Weighted average

fair value

fair value

fair value

(shares in thousands)

Shares

per share

Shares

per share

Shares

per share

Unvested as June 30, 2020

44

$

16.90

44

$

16.76

88

$

16.83

Granted

68

12.01

105

12.01

173

12.01

Forfeited

(6)

14.04

(9)

14.03

(15)

14.04

Unvested as of March 31, 2021

106

$

13.92

140

$

13.41

246

$

13.63

Total unrecognized stock-based compensation related to the unvested LTICP RSUs at performance target was $1.9 million as of March 31, 2021, which is expected to be recognized over a period of 1.9 years.

(2) 2013 Omnibus Stock Plan

The 2013 Omnibus Stock Plan is for key employees, officers and directors and provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance units.

Restricted shares and RSUs

A summary of the activity in the Company’s unvested restricted shares and unvested RSUs during the nine months ended March 31, 2021 is as follows:

Weighted average

Shares

fair value

(in thousands)

per share

Unvested as June 30, 2020

189

$

15.24

Granted

21

27.51

Vested

(158)

16.22

Forfeited

(1)

15.65

Unvested as of March 31, 2021

51

$

23.81

Total unrecognized stock-based compensation related to unvested restricted shares and unvested RSUs was $0.6 million as of March 31, 2021, which is expected to be recognized over a weighted average period of 1.7 years.


Options

A summary of the activity of the Company’s stock option plans as of March 31, 2021, is presented below:

Weighted

Shares

Average

(in thousands)

Exercise Price

Outstanding at June 30, 2020

223

$

23.70

Granted

37

12.77

Exercised

(13)

18.90

Cancelled

(5)

12.89

Outstanding at March 31, 2021

242

$

22.51

The following table summarizes information for options outstanding at March 31, 2021:

Options

Weighted Average

Range of

Outstanding

Remaining

Exercise

Prices

(in thousands)

Life (Years)

Price

$

  9.97 - 15.14

104

8.3

$

12.72

19.72 - 19.77

9

1.7

19.72

20.50 - 27.57

66

5.3

23.93

31.06 - 32.80

37

5.1

32.20

43.09 - 47.45

26

5.5

45.36

$

  8.55 - 47.45

242

6.5

$

22.51

Total unrecognized stock-based compensation expense related to options was $0.03 million as of March 31, 2021, which is expected to be recognized over a period of 0.9 years.

Stock-based compensation granted outside a plan

During the quarter ended December 31, 2018, the Company awarded its Chief Executive Officer 55,000 options outside of any Company stock plans. During the quarter ended June 30, 2020, the Company awarded its Chief Financial Officer/Chief Operating Officer 79,000 options outside of any Company stock plans. Total unrecognized stock-based compensation expense related to options awarded outside a plan was $0.07 million as of March 31, 2021, which is expected to be recognized over a period of 1.7 years.

9.  EARNINGS PER SHARE

Basic earnings per share (EPS) of common stock are based on the weighted-average number of common shares outstanding during each period. Diluted earnings per share of common stock include the dilutive effect of potential common shares outstanding. The Company’s potential common shares outstanding are stock options, shares associated with the Long-Term Incentive Compensation Plan and non-vested restricted stock units and restricted shares. The Company calculates the dilutive effect of outstanding options, restricted stock units and restricted shares using the treasury stock method. Anti-dilutive options are not included in the computation of diluted EPS when their exercise price is greater than the average closing market price of the common shares.

Three Months Ended

Nine Months Ended

March 31,

March 31,

(in thousands)

2021

2020

2021

2020

Basic shares

6,998

7,965

7,316

7,955

Potential common shares:

Stock options

165

130

Non-vested restricted stock units and restricted shares

107

105

272

235

Diluted shares

7,270

7,965

7,551

7,955

Anti-dilutive shares

26

63

Cash dividends declared per common share were $0.15 and $0.30 for the three and nine months ended March 31, 2021, respectively, and $0.22 and $0.66 for the three and nine months ended March 31, 2020, respectively.

 

10.  LITIGATION

Environmental Matters – In March 2016, the Company received a General Notice Letter for the Lane Street Groundwater Superfund Site (the “Lane Street Site”) located in Elkhart, Indiana from the U.S. Environmental Protection Agency (EPA). In April 2016, the EPA issued their proposed clean-up plan for groundwater pollution and request for public comment. The Company responded to the request for public comment in May 2016. The EPA issued a Record of Decision selecting a remedy in August 2016 and estimated total costs to remediate of $3.6 million. In July 2017, the EPA issued a Special Notice Letter to the Company demanding that the Company perform the remedy selected and pay for the remediation cost and past response costs of $5.5 million. On October 12, 2017, the Company, after consultation with its insurance carriers, offered an amount, fully reimbursable by insurance coverage, to the EPA to resolve this matter. On November 6, 2017, the settlement offer extended on October 12, 2017 was rejected.

In April 2018, the EPA issued a Unilateral Administrative Order for Remedial Design and Remedial Action (the “Order”) against the Company.  The Order was issued under Section 106(a) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §9606(a).  The Order directs the Company to perform remedial design and remedial action for the Lane Street Site.  The Order was to be effective May 29, 2018.  To ensure completion of the remediation work, the EPA required the Company to secure financial assurance in the initial amount of $3.6 million, which as noted above, is the estimated cost of remedial work.  The Company believes that financial assurance is not required because it meets the relevant financial test criteria as provided in the Order. In May 2018, the EPA agreed to suspend enforcement of the Order so that the Company could conduct environmental testing upgradient to its former manufacturing location pursuant to an Administrative Order on Consent (AOC). On April 24, 2019, the Company signed an AOC with the EPA to conduct the upgradient investigation.  The Company negotiated site access to the upgradient property over a period of months in 2019, followed by completion of sampling activities on that property on September 28-29, 2019.  Following multiple exchanges from November 2019 through early 2020, the Company submitted a final and supplemental report to the EPA regarding the results of the upgradient investigation on June 17, 2020.  Through agreement with the EPA the statute of limitations for potential claims by the EPA was extended through August 24, 2021. The Company reflected a $3.6 million liability in the consolidated balance sheets for the fiscal year ended June 30, 2018. Despite the Company’s position that it did not cause nor contribute to the contamination, the Company continues to reflect this liability in the consolidated balance sheets as of March 31, 2021 in accordance with FASB issued Asset Retirement and Environmental Obligations (ASC 410-30). The Company continues to evaluate the Order, its legal options and insurance coverages to assert its defense and recovery of current and future expenses related to this matter.

Employment MattersThe lawsuit entitled Juan Hernandez, et al. v. Flexsteel Industries, Inc. (“Hernandez I”), was filed on February 21, 2019 in the Superior Court for the County of Riverside by former employees Juan Hernandez and Richard Diaz (together, “Plaintiffs”). On April 29, 2019, Plaintiffs filed a second similarly titled lawsuit in the Superior Court for the County of Riverside (“Hernandez II”).  Hernandez II was brought by the same attorneys as Hernandez I and featured a single cause of action for civil penalties under the Private Attorneys General Act (“PAGA”). The Company agreed to resolve both Hernandez I and Hernandez II in principle and on a class-wide basis for $0.5 million.  That settlement served to resolve the claims of the 2 Plaintiffs, as well as the approximately 270 remaining members of the class unless an individual class member asked to be excluded. The material terms of the settlement were captured in a Long-Form Settlement Agreement. The court granted final approval of the parties’ settlement in February 2021. The Company paid the final settlement amount of $0.5 million in February 2021 and 0 accrued amounts remained in the consolidated balance sheets as of March 31, 2021.

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

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

GENERAL

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

Statement Regarding the Impact of the COVID-19 Pandemic

The World Health Organization (“WHO”) on March 11, 2020 declared novel coronavirus 2019 (“COVID-19”) a global pandemic. In response to this declaration, the Company has taken the following actions to maneuver the current economic landscape;

Employees that can perform work outside of the workplace are working from home,

Suspension of the Company’s 401K match effective June 1, 2020 through the end of the 2020 calendar year,

Temporary 50% reduction of cash compensation for the Company’s Board of Directors through October 1, 2020,

Temporary 25% reduction of salary compensation for the Company’s Chief Executive Officer and Chief Financial Officer / Chief Operating Officer through October 1, 2020,

Elimination of all non-essential expenses and capital expenditures; and

Negotiated with vendors to extend payment terms.

During the three and nine months ended March 31, 2021, we have seen improvement in our business conditions as retailers have reopened and orders have increased, however, we continue to see supply chain challenges faced by the furniture industry due to limited availability of ocean containers and significant increases in ocean container rates, limited availability and inflationary pressures in key materials, and labor shortages both in Asia and the United States. The COVID-19 pandemic remains fluid and the extent of the impact to our business may be significant, however, we are unable to predict the extent or nature of these impacts at this time.

CRITICAL ACCOUNTING POLICIES:

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", included in our 2020 annual report on Form 10-K.

Overview

The following table has been prepared as an aid in understanding the Company’s results of operations on a comparative basis for the three and nine months ended March 31, 2021 and 2020. Amounts presented are percentages of the Company’s net sales.

Three Months Ended

Nine Months Ended

March 31,

March 31,

2021

2020

2021

2020

Net sales

100.0

%

100.0

%

100.0

%

100.0

%

Cost of goods sold

80.5

86.0

79.5

84.4

Gross margin

19.5

14.0

20.5

15.6

Selling, general and administrative

13.8

20.4

14.4

18.4

Restructuring expense

0.4

2.4

0.8

4.5

Gain on disposal of assets due to restructuring

(0.3)

(1.7)

(6.4)

Operating income (loss)

5.4

(8.4)

7.0

(0.9)

Interest expense

0.0

0.0

Other income

0.0

0.1

0.1

0.1

Income (loss) before income taxes

5.4

(8.3)

7.1

(0.8)

Income tax provision (benefit)

1.3

(3.0)

2.1

(0.4)

Net income (loss)

4.1

%

(5.3)

%

5.0

%

(0.4)

%

Results of Operations for the Quarter Ended March 31, 2021 vs. 2020

Net sales were $118.4 million for the quarter ended March 31, 2021 compared to net sales of $98.8 million in the prior year quarter, an increase of 19.8%. The increase in sales of $19.6 million was primarily driven by $26.5 million related to home furnishing products sold through retailers and $2.8 million for home furnishing products sold through e-commerce channels, partially offset by a decline of $9.7 million primarily due to the exit from our Vehicle Seating and Hospitality product lines during the fourth quarter of fiscal

2020. Net sales growth in our home furnishing products were virtually in all product categories due to demand and record backlog from the end of our second quarter of fiscal year 2021 and continuing throughout the third quarter of fiscal year 2021.

Gross margin as a percent of net sales for the quarter ended March 31, 2021 was 19.5%, compared to 14.0% for the prior year quarter, an increase of 550 basis points (“bps”). The 550-bps increase was primarily due to structural cost reductions, operational efficiencies, fixed cost leverage due to higher sales volume as compared to the prior year quarter and lower inventory reserve due to demand.

Selling, general and administrative (“SG&A”) expenses decreased $3.8 million in the quarter ended March 31, 2021 compared to the prior year quarter. The decline in SG&A expenses was primarily due a $4.1 million bad debt expense in the prior year driven by a customer bankruptcy. As a percentage of net sales, SG&A was 13.8% in the quarter ended March 31, 2021 compared to the prior year quarter of 20.4%. The 660 bps decline compared to the prior year quarter was driven largely by a 350 bps decline due to higher bad debt expenses in the prior year quarter, with the remaining decline primarily due to cost leverage gained from higher sales.

During the quarter ended March 31, 2021, we incurred $0.5 million of restructuring expenses primarily for on-going utilities and maintenance costs for our facilities listed as held for sale. See Note 4, Restructuring, of the Notes to Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for more information.

Income tax expense was $1.5 million, or an effective rate of 23.9%, and income tax benefit of $3.0 million, or an effective rate of 35.9% during the quarter ended March 31, 2021 and March 31, 2020, respectively.

Net income was $4.8 million, or $0.67 per diluted share for the quarter ended March 31, 2021, compared to net loss of $5.3 million, or ($0.66) per diluted share in the prior year quarter.

Results of Operations for the Nine Months Ended March 31, 2021 vs. 2020

Net sales were $342.8 million for the nine months ended March 31, 2021 compared to net sales of $302.1 million in the prior year nine-month period, an increase of 13.5%. The increase in sales of $40.6 million was primarily driven by $60.2 million related to home furnishing products sold through retailers and $9.2 million for home furnishing products sold through e-commerce channels due to the same factors discussed above for the third quarter, partially offset by a decline of $28.8 million primarily due to the exit from our Vehicle Seating and Hospitality product lines during the fourth quarter of fiscal 2020.

Gross margin as a percent of net sales for the nine months ended March 31, 2021 was 20.5%, compared to 15.6% for the prior year nine-month period, an increase of 490 bps. The 490 bps increase was primarily driven by the same factors discussed above for the quarter ended March 31, 2021.

Selling, general and administrative expenses decreased $6.3 million in the nine months ended March 31, 2021 compared to the prior year nine-month period. As a percentage of net sales, SG&A was 14.4% in the nine months ended March 31, 2021 compared to the prior year nine-month period of 18.4%. The 400 bps decline compared to the prior year nine-month period was primarily due to cost leverage gained from higher sales, reductions in non-essential spending due to COVID-19, lower depreciation expense due to assets being held for sale and lower bad debt expense as discussed above during the quarter ended March 31, 2021.

Restructuring expenses were $2.7 million during the nine months ended March 31, 2021, primarily for on-going utilities and maintenance costs for our facilities listed as held for sale, professional fees, and employee termination costs as part of our previously announced transformation program. See Note 4, Restructuring, of the Notes to Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for more information.

During the nine months ended March 31, 2021, we completed the sale of our Dubuque, Iowa, Lancaster, Pennsylvania, and one of our Harrison, Arkansas facilities, resulting in total net proceeds of $16.4 million, and a total gain of $5.9 million.

Income tax expense was $7.2 million, or an effective rate of 29.4%, during the nine months ended March 31, 2021 compared to income tax benefit of $1.3 million in the prior year nine-month period, or an effective tax rate of 54.5%.

Net income was $17.2 million, or $2.28 per diluted share for the nine months ended March 31, 2021, compared to net loss of $1.1 million, or $0.14 per diluted share in the prior year nine-month period.

Liquidity and Capital Resources

Working capital (current assets less current liabilities) at March 31, 2021 was $121.0 million compared to $128.4 million at June 30, 2020. The $7.3 million decrease in working capital was due to a decrease in cash of $31.2 million, decline in other current assets of $8.3 million primarily due to a tax refund, a decline of $11.7 million in assets held for sale due to sale of facilities during the fiscal year, and an increase in accounts payable of $4.1 million, partially offset by a $12.0 million increase in trade receivables, $38.9 million increase

in inventory. The decline in cash of $31.2 million was primarily due to $28.5 million share repurchases, cash used in operating activities of $15.4 million, partially offset by $18.5 million proceeds from the sale of the Company’s Dubuque, IA, Lancaster, PA and Harrison, AR, facilities. Capital expenditures are estimated to be in the range of $2.5 million to $3.0 million for the fiscal year ending June 30, 2021.

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

Nine Months Ended

March 31,

(in thousands)

2021

2020

Net cash (used in) provided by operating activities

$

(15,401)

$

13,888

Net cash provided by investing activities

16,569

17,202

Net cash (used in) financing activities

(32,394)

9,203

(Decrease) increase in cash and cash equivalents

$

(31,226)

$

40,293

Net cash (used in) provided by operating activities

For the nine months ended March 31, 2021, net cash used in operating activities was $15.4 million, which primarily consisted of net income of $17.2 million, adjusted for non-cash items including, depreciation of $3.9 million, gain from the sale of capital assets of $5.9 million, change in deferred income taxes of $2.1 million, stock-based compensation of $2.8 million and bad debt expense of $1.3 million. Net cash used in operating assets and liabilities was $36.6 million. The cash used in operating assets and liabilities of $36.6 million, was primarily due to an increase in trade receivables of $13.3 million due to higher sales, an increase in inventory of $38.9 million due to inventory build for the fourth quarter and beginning of fiscal 2022, partially offset by a decline in other current assets primarily due to receipt of income tax refund of $10.4 million, an increase in accounts payable of $4.1 million and accrued liabilities of $1.2 million.

For the nine months ended March 31, 2020, net cash provided by operating activities was $13.9 million, which primarily consisted of net loss of $1.1 million, adjusted for non-cash depreciation of $6.7 million, gain from the sale of capital assets of $19.3 million, change in deferred income taxes of $7.5 million, non-cash stock based compensation of $3.9 million and bad debt expense of $4.3 million. Net cash provided in operating assets and liabilities was $13.4 million. The cash provided in operating assets and liabilities of $13.4 million, was primarily due to a decline in inventory of $18.6 million, coupled with an increase in accounts payable of $4.5 million, partially by a reduction in accrued liabilities of $7.1 million and an increase in other current asset of $2.0 million.

Net cash provided by investing activities

For the nine months ended March 31, 2021, net cash provided by investing activities was $16.6 million, primarily due to proceeds of $18.5 million for the sale of our Dubuque, IA and Lancaster, PA, facilities and one of our Harrison, Arkansas facilities, partially offset by capital expenditures of $2.0 million.

For the nine months ended March 31, 2020, net cash provided by investing activities was $17.2 million, due to proceeds of $20.5 million from the sale of our Riverside, California facility and other capital assets, partially offset by capital expenditures of $3.3 million.

Net cash (used in) provided by financing activities

For the nine months ended March 31, 2021, net cash used in financing activities was $32.4 million, primarily due to $28.5 million for treasury stock purchases, dividends paid of $2.6 million and $1.3 million for tax payments on employee vested restricted shares.

For the nine months ended March 31, 2020, net cash provided by financing activities was $9.2 million, primarily due to $15.0 million of borrowings on our lines of credit, partially offset by dividends paid of $5.3 million and $0.6 million for tax payments on employee vested restricted shares.

Line of Credit

On August 28, 2020, we entered into a new two-year secured $25.0 million revolving line of credit with Dubuque Bank and Trust Company, with interest of 1.50% plus LIBOR, subject to a floor of 3.00%. The revolving line of credit is secured by essentially all of the Company’s assets, excluding real property and requires the Company to maintain compliance with certain financial and non-financial covenants. The revolving line of credit matures on August 28, 2022. There was no outstanding amount under the revolving line of credit as of March 31, 2021.

Letters of credit outstanding at Wells Fargo Bank N.A. (“Wells”) as of March 31, 2021, totaled $1.1 million, of which $1.2 million of the Company’s cash held at Wells is pledged as collateral.

Contractual Obligations

As of March 31, 2021, there have been no material changes to our contractual obligations presented in our Annual Report on Form 10-K for the year ended June 30, 2020.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

General – Market risk represents the risk of changes in the value of a financial instrument, derivative or non-derivative, caused by fluctuations in interest rates, foreign exchange rates and equity prices. As discussed below, management of the Company does not believe that changes in these factors could cause material fluctuations in the Company’s results of operations or cash flows. The ability to import furniture products can be adversely affected by political issues in the countries where suppliers are located, 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, tariffs and taxes on imports; and significant fluctuation in the value of the U.S. dollar against foreign currencies. Any of these factors could interrupt supply, decrease sales, increase costs and decrease earnings.

Foreign Currency Risk – During the quarters ended March 31, 2021 and 2020, the Company did not have sales, but has purchases and other expenses denominated in foreign currencies. The market risk associated with currency exchange rates and prices is not considered significant.

Interest Rate Risk – The Company’s primary market risk exposure with regard to financial instruments is changes in interest rates. At March 31, 2021, the Company did not have any debt outstanding.

Item 4.  Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our 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 March 31, 2021.

(b) Changes in internal control over financial reporting. During the quarter ended December 31, 2020, there were no significant changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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 Quarterly Report on Form 10-Q, 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 our 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, retention and recruitment of key employees, actions by governments including laws, regulations, taxes and tariffs, inflation, 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, timing to implement restructuring, the impact of the COVID-19 pandemic and general economic conditions. For further information regarding these risks and uncertainties, see the “Risk Factors” section in Item 1A of our most recent 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.

PART II OTHER INFORMATION

Item 1A.  Risk Factors

There has been no material change in the risk factors set forth under Part 1, Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

On June 1, 2020, the Company’s Board of Directors authorized a $6 million share repurchase program through June 9, 2021. On August 20, 2020, the Company’s Board of Directors authorized an additional $8 million share repurchase program to begin on September 4, 2020 through September 3, 2021. On October 22, 2020, the Company’s Board of Directors authorized another $30 million share repurchase program through October 29, 2023. As of December 31, 2020, the $6 million and $8 million repurchase programs were completed. The following table summarized the activity of the common stock repurchases under all three programs as of March 31, 2021. All purchases were made in the open market.

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 Plans

Be Purchased

As of June 30, 2020

132,197

$

11.83

132,197

$

4,429,960

July 1, 2020 to July 31, 2020

155,808

14.46

155,808

2,168,981

August 1, 2020 to August 31, 2020

116,562

17.24

116,562

153,690

September 1, 2020 to September 30, 2020

223,905

21.16

223,905

3,405,667

As of September 30, 2020

628,472

16.81

628,472

3,405,667

October 1, 2020 to October 31, 2020

132,326

25.69

132,326

30,000,000

November 1, 2020 to November 30, 2020

132,831

29.55

132,831

26,067,622

December 1, 2020 to December 31, 2020

101,689

32.69

101,689

22,738,200

As of December 31, 2020

995,318

$

21.31

995,318

$

22,738,200

January 1, 2021 to January 31, 2021

84,012

35.15

84,012

19,780,863

February 1, 2021 to February 28, 2021

94,104

34.24

94,104

16,553,899

March 1, 2021 to March 31, 2021

75,536

35.23

75,536

13,888,648

As of March 31, 2021

1,248,970

$

24.06

1,248,970

$

13,888,648

Item 6.  Exhibits

Exhibit No.

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 of 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.*

101.INS

XBRL Instance Document**

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104.Cover Page

Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*

Filed herewith

**

In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be “furnished” and not “filed.”


SIGNATURES

Pursuant to the requirements 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:

April 30, 2021

By:

/S/ Derek P. Schmidt

Derek P. Schmidt

Chief Financial Officer and Chief Operating Officer

(Principal Financial & Accounting Officer)

19