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Flexsteel Industries, Inc. Investor Presentation February 2026
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This information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act, as amended, that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the furniture industry, the economy, and the company itself. Words like “anticipates,” “believes,” “confident,” “estimates,” “expects,” “forecasts,” “aspires,” “likely,” “plans,” “projects,” “should,” variations of such words, and similar expressions identify such forward-looking statements. For those statements, Flexsteel Industries, Inc. claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. These risks and uncertainties are detailed in certain of Flexsteel’s filings with the Securities and Exchange Commission (“SEC”), including in its Annual Report on Form 10-K for the year ended June 30, 2024, under the heading “Risk Factors”, and under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations –Outlook,” and updated by our subsequent quarterly reports on Form 10-Q, and other SEC filings, as applicable.” These reports, as well as the other documents filed by Flexsteel with the SEC, are available free of charge at the SEC’s website at www.sec.gov . Due to these risks and uncertainties, actual results and outcomes may materially differ from what we express or forecast. Furthermore, Flexsteel Industries, Inc. undertakes no obligation to update, amend or clarify forward-looking statements. FORWARD - LOOKING STATEMENTS
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CONTENT 1 Company Overview 2 Competitive Advantage and Differentiation 3 Growth Drivers 4 Investment Thesis 5 Financial Outlook 6 Appendix
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1. COMPANY OVERVIEW
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KEY FACTS Top10 U.S. Furniture Manufacturer 1893 Company Founded ~1500 TeamMembers $441 million FY25 Revenue 7 Manufacturing and Distribution Facilities One of the largest manufacturers, importers, and marketers of residential furniture products in the U.S. ~ 50 / 50 Target Mix of North American Manufacturing and Global Sourcing Over 2,700 retail stores and dozens of leading e-tailers choose to sell Flexsteel because it’s a trusted brand supported by passionate people that strive to deliver the highest service levels and customer experience in the industry. Our furniture is built for everyday life and lasting beauty, and it’s differentiated due to its superior quality, comfort, and durability derived from innovation, like our patented Blue Steel Spring.
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OUR PRODUCT OFFERING PRIMARY LIVING AREAS BEDROOM 82% of sales1 4% of sales1 DINING 3% of sales1 STORAGE / ORGANIZATION 3% of sales1 OUTDOOR 1% of sales1 HEALTH & WELLNESS 7% of sales1 (1) Based of FY26 Estimated Sales Mix Flexsteel offers a wide breadth of products to meet diverse consumer needs throughout their homes. Growth opportunity: Expand penetration in the home beyond primary living areas.
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OUR GO- TO - MARKET BRAND POSITIONING Flexsteel addresses different market segments through three distinct core brands: FlexsteelTM, CharismaTM, and homestylesTM , and several category specific sub-brands: flexTM and ZeclinerTM. Each has a unique value proposition tailored to specific consumer needs. Growth opportunity: Expand consumer brand awareness and strengthen brand portfolio to resonate with younger consumers. Price Customization, Quality and Brand Image
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Flexsteel has broad sales distribution across the US through multiple channels. We strive to position our brands where and how consumers want to purchase furniture both now and in the future. Growth opportunity: Accelerate sales distribution expansion beyond independent retailers. OUR OMNI- CHANNEL SALES DISTRIBUTION +1400 Customers +2700 Store Fronts INDEPENDENT RETAIL BIG BOX 85% Retail E - TAIL +30 Leading e -tailers New; Quickly growing and profitable Large and important; Aligned with the winners and gaining share Long -term relationships with leading e -tailers DIRECT - TO - CONSUMER Learning & building new capabilities; Complements core selling channels flexsteelstore.com www.homestylesfurniture.com 88 to 92% of estimated FY26 sales 4 to 6% of estimated FY26 sales 4 to 6% of estimated FY26 sales <1% of estimated FY26 sales
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Experienced and results-driven management team. OUR LEADERSHIP Years of Experience: Total Furniture Industry Flexsteel VP, Global Logistics & Distribution Bob Bestercy 38 2 2 VP, Sales & Product Management David Crimmins 16 16 5 VP, Human Resources Stacy Kammes 22 10 10 Chief Information Officer Michael McClaflin 36 16 5 Chief Financial Officer Mike Ressler 18 18 18 President and Chief Executive Officer Derek Schmidt 29 11 4 VP, Global Strategic Sourcing & GM Asia Vic Tsai 18 18 3 VP, Customer Experience Dan Wallace 36 26 5
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OUR NORTH AMERICAN OPERATIONS Strong, advantaged operations: efficient, agile and cost competitive. Manufacturing locations are cost advantaged. Logistics operations are positioned to efficiently serve all major US markets. Breadth of fulfillment capabilities to serve a wide range of customer needs. Ample capacity to support future growth with minimal investment. Manufacturing Locations: • Juarez, Mexico (3 plants) • Mexicali, Mexico (no current production; available for future growth) Distribution Centers: • Edgerton, KS (500K ft2) • Greencastle, PA (242K ft2) • Huntingburg, IN (337K ft2) • Trailer Transfer Points: Boise, ID, Phoenix, AZ, and Cedartown, GA Fulfillment Capabilities: • Container direct • Full truckload / Multi-stop truckload • Customer pickup • Direct-to-consumer small parcel • Direct-to-consumer white-glove delivery Juarez, MX (3) Mexicali, MX Edgerton KS Huntingburg IN Greencastle PA Phoenix, AZ Boise, ID Cedartown, GA
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OUR GLOBAL SOURCING OPERATIONS Diversified global supply chain supported with offices and talent in Vietnam, China, Thailand and Indonesia. Aligned with strong, capable strategic partners. Expanding geographic sources to further diversify. Thailand: < 10% Indonesia: < 5% Vietnam: > 85% China: 0% Poland Turkey IndiaMexico Philippines Cambodia CURRENT SOURCES NEW EMERGING SOURCES Italy
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OUR VISION We exist… to create better living spaces that improve lives We care… about our employees, customers, partners and communities We strive… to be a sustainable, industry leader in home furnishings We aspire… to profitably grow to +$750M in sales through organic growth and acquisitions We are committed… to accelerating our sustainability, social responsibility and governance initiatives
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OUR VALUES
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OUR APPROACH TO RESPONSIBLE BUSINESS Committed to positively impacting healthy people, healthy communities, and a healthy planet. Key focus areas: Sustainable Products & Packaging Responsible Material Sourcing Waste Reduction & Recycling Environmental Stewardship 13,000 Trees Planted Community Giving Employee Volunteerism Employee Engagement & Development Employee Safety
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2. COMPETITIVE ADVANTAGE & DIFFERENTIATION
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2. COMPETITIVE ADVANTAGE AND DIFFERENTIATION Operating from a position of strength. 1 2 Strong and broad national and omni-channel distribution 3 Diverse, agile, and resilient global supply chain with scalable efficiencies 4 Expanding our leverageable digital content and marketing capabilities 5 Strong financial position and cash flow generation ability Growing, relevant product assortment with compelling value propositions
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DIFFERENTIATION We win by providing compelling designs with unmatched quality, comfort, and durability, all supported by innovation that drives strong consumer value and sustainable differentiation.
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3. GROWTH DRIVERS
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GROWTH DRIVERS CORE MARKETS NEW / EXPANDED MARKETS GROWTH INVESTMENTS Gain share from: • Market leadership • Strategic partner alignment • Compelling new product Penetrate new / expanded: • Consumer segments • Sales distribution • Product categories Invest in growth accelerators: • Consumer insights • Innovation • Marketing and brand- awareness
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GROWTH DRIVERS: CONSUMER SEGMENT EXPANSION Expanding and repositioning our brand portfolio to align with the consumer needs of the future. Mid-Price Modern GROWTH OPPORTUNITY
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GROWTH DRIVERS: SALES DISTRIBUTION EXPANSION Expanding beyond our core sales distribution and into NEW brick & mortar and e-commerce channels to position our brands wherever consumers desire to shop both today and in the future. EXPANSION EXPANSIONCORE Independent Retail Big Box Retail Big Box e-Commerce Leading e-Tailers Independent e-Com Direct-to-Consumer BRICK & MORTAR E-COMMERCE
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GROWTH DRIVERS: PRODUCT CATEGORY EXPANSION Expanding penetration in the home beyond primary living areas. EXPANSIONCORE PRIMARY LIVING AREAS BEDROOM DINING STORAGE / ORGANIZATION OUTDOOR HEALTH & WELLNESS
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GROWTH DRIVERS: INNOVATION INVESTMENT Our new flexTM line is a modular seating system backed by innovation: patented easy assembly system, sustainable & livable fabric, and a unique set of hubs & accessories to ‘flex’ with consumers’ changing needs.
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GROWTH DRIVERS: INNOVATION INVESTMENT 7% of U.S. adults can’t consistently sleep in a bed at night, but most other furniture isn’t designed for sleep. Our new ZeclinerTM is a sleep chair that aesthetically fits into any living room or bedroom and is innovatively designed to sleep comfortably for 8+ hours as validated by independent sleep studies.
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4. INVESTMENT THESIS
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1 Compelling long -term industry outlook 2 Strong growth prospects 3 Margin expansion potential 4 Strong cash flow generation 5 Disciplined capital allocation
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2.8% 2.5% 4.4% 3.2% 1.6% 3.0%3.1% 2.4% -0.5% 3.0% 1.2% 2.7% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3* Q4* 2023 2024 2025 Real GDP (YoY % Change) INDUSTRY OUTLOOK: NEAR - TERM Near-term, the furniture industry faces multiple growth headwinds due to macroeconomic challenges. Source: Federal Reserve Bank of St. Louis *Projections Source: Wells Fargo Securities Forecast as of August 6,2025 Near-term macro challenges: • Low GDP forecasts • Elevated interest rates • Softening labor market • Weakening consumer sentiment • Geopolitical uncertainties • Tariff and input cost uncertainty • Weakening consumer credit conditions Potential upsides: • Pent up demand for housing • Fed signal of interest rate cuts • Consumer replacement of less desirable furniture purchased during COVID 40 50 60 70 80 90 100 Consumer Sentiment (University of Michigan)
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INDUSTRY OUTLOOK: NEAR - TERM Retail furniture sales rebounded after 18 consecutive months of declines signaling a potential rebound for the industry. *Source: US Census Bureau release October 2024 Despite industry headwinds, Flexsteel is leveraging innovation and its growth initiatives to grow and gain share in a difficult market. -2.5% -6.4%-5.5% -3.5%-3.8% -5.1%-5.9% -9.0% -3.7%-4.1% -14.1% -9.1%-8.4% -5.9% -3.8%-3.2% -0.9%-1.0% 2.5%2.4%2.5% 9.0% 5.5% 6.9% 8.7% 7.4% 5.7% 4.5%5.1% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2023 2024 2025 Furniture & Home Furnishings Retail Sales Growth 7.5% 8.2% 4.7% 9.9% 8.4% 6.3% 3.4% 6.2% 9.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY25 FY26 Flexsteel Year-over-Year Sales Growth
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INDUSTRY OUTLOOK: LONG - TERM Despite near-term choppiness, conditions are favorable to long-term industry growth. Three key drivers: consumer generation shifts, continued domestic migration, and healthy long-term demand for housing. US Population by Generation Adult Gen Z and Gen Y Millennials are an emerging demographic whose unique preferences will drive furniture demand as their buying power increases. US Domestic Migration Trends The pandemic and rise of remote working has propelled state-to-state migration which is expected to continue. Moving drives housing turnover which in turn drives furniture purchases. Housing Demand Housing production has not kept up with population growth and new household formation. New housing demand will remain strong for many years which will also drive demand for new furniture.
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MARGIN EXPANSION POTENTIAL Solid profit improvement momentum with compelling outlook for continued margin expansion. Margin Drivers 1. Sales Leverage 2. Higher Margin New Product 3. Continuous Improvement + Cost Savings > Inflation *Forward-looking estimates 1.1% 2.1% 4.4% 7.1% +8.0% FY22 FY23 FY24 FY25 Long-Term Aspiration* Adjusted Operating Margin
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STRONG CASH GENERATION Low maintenance capital requirements (~1% of sales) combined with sales growth and improved profitability generating sizable free cash flow. 35.1 (16.6) 6.1 18.5 31.3 45.3 FY20 FY21 FY22 FY23 FY24 FY25 Free Cash Flow ($ millions) 3.7 2.6 3.9 4.8 4.8 3.3 FY20 FY21 FY22 FY23 FY24 FY25 Capital Expenditures ($ millions)
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DISCIPLINED CAPITAL ALLOCATION Demonstrated history of returning excess capital to shareholders. Long-term capital prioritization focused on business reinvestment and growth opportunities with high ROI. ~70% Business Reinvestment 1. Growth (including acquisitions) 2. Maintenance CapEx ~30% Return to Shareholders 1. Dividend growth 2. Opportunistic share repurchases Capital Allocation Priorities Dividends 23.6 Share Repurchases 71.7 Return of Capital (FY20 to FY25) ($ millions)
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5. FINANCIAL OUTLOOK
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FY26 SALES OUTLOOK Driving consistent mid- to high-single digit quarterly growth despite industry challenges. * Forward-looking estimates Continuing to gain market share. 4.8% 6.9% Flat to -5% FY24 FY25 Industry Outlook* Annual Sales Growth 7.5% 8.2% 4.7% 9.9% 8.4% 6.3% 3.4% 6.2% 9.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY25 FY26 Flexsteel Year-over-Year Sales Growth
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2.0% 4.6% 5.2% 5.6% 5.8% 6.1% 7.3% 9.0% 8.1% 7.6% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY24 FY25 FY26 Quarterly Adjusted Operating Income %1 FY26 PROFIT OUTLOOK Significantly improving profitability through cost savings, pricing optimization, and portfolio management. 1 Non-GAAP; See Appendix for FY23 & FY24 & FY25 GAAP to Non-GAAP reconciliations 2.1% 4.4% 7.1% FY23 FY24 FY25 Annual Adjusted Operating Income %1 $0.87 $2.11 $4.17 FY23 FY24 FY25 Non-GAAP Diluted EPS1
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BALANCE SHEET AND CASH FLOW Effective inventory management coupled with higher profits are driving strong Free Cash Flow. * Forward-looking estimates $122.1 $96.6 $89.1 FY23 FY24 FY25 Inventory ($ millions) $18.5 $31.3 $45.3 FY23 FY24 FY25 Free Cash Flow ($ millions) $28.3 $4.8 $- FY23 FY24 FY25 Line of Credit Borrowings ($ millions)
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MID - TO LONG- TERM FINANCIALS Adjusted Earnings Per Diluted Share $2.11 $4.17 $7.00+ Free Cash Flow ($ millions) $31 $45 $40+ Gross Margin 21.3% 22.2% 23%+ Adjusted Operating Income Margin 4.4% 7.1% 8%+ FY24 FY25 Longer-Term Aspiration Net Sales ($ millions) $413 $441 Up to $750 (with acquisitions)
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Thank You
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6. APPENDIX
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NON- GAP DISCLOSURES (UNAUDITED) The Company is providing information regarding adjusted operating income and adjusted diluted earnings per share of common stock, which are not recognized terms under U.S. Generally Accepted Accounting Principles (“GAAP”) and do not purport to be alternatives to operating income or diluted earnings per share of common stock as a measure of operating performance. A reconciliation of adjusted operating income and adjusted diluted earnings per share of common stock is provided in the subsequent slide. Management believes the use of these non-GAAP financial measures provide investors useful information to analyze and compare performance across periods excluding the items which are considered by management to be extraordinary or one-time in nature. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.
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NON- GAP DISCLOSURES (UNAUDITED) The following table sets forth the reconciliation of the Company’s reported quarterly and annual GAAP operating income to the calculation of adjusted operating income for fiscal year ended June 30, 2025: The following table sets forth the reconciliation of the Company’s reported quarterly and annual GAAP diluted earnings per share to the calculation of adjusted diluted earnings per share for fiscal year ended June 30, 2025: Note: The table above may not foot due to rounding and changes in effective tax rates and weighted average diluted shares out standing between quarterly and annual periods (1) Effective tax rate for the three months ended December 31, 2024, March 31, 2025, and June 30, 2025 were 24.66%, 24.6% and 25.2%, respectively. Effective tax rate of 24.2% was used to calculate the twelve months ended June 30, 2025. (in thousands) Q1 % of Sales Q2 % of Sales Q3 % of Sales Q4 % of Sales FY25 % of Sales Reported GAAP operating income 6,047$ 5.8% 11,654$ 10.7% (5,060)$ -4.4% 13,974$ 12.2% 26,615$ 6.0% Right-of-use asset impairment — — 14,079 12.4% — 14,079 3.2% (Gain) on sale of real estate — — (753) — (753) -0.2% Gain on Disposal of Assets — 0.0% (4,991) -4.6% — (3,702) -3% (8,693) -2.0% Adjusted operating income 6,047$ 5.8% 6,663$ 6.1% 8,266$ 7.3% 10,272$ 9.0% 31,248$ 7.1% Q1 Q2 Q3 Q4 FY25 Reported GAAP diluted earnings per share 0.74$ 1.62$ (0.71)$ 1.89$ 3.55$ Right-of-use asset impairment — — 2.52 — 2.48 (Gain) on sale of real estate — — (0.13) — (0.13) Gain on disposal of assets — (0.89) — (0.65) (1.53) Tax impact of the above adjustments(1) — 0.22 (0.59) 0.16 (0.20) Expiring state tax credits — — — — — Remeasurement of deferred tax assets and valuation allowance — — — — — Adjusted diluted earnings per share 0.74$ 0.95$ 1.13$ 1.40$ 4.17$
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FY24 NON - GAP DISCLOSURES (UNAUDITED) Note: The table above may not foot due to rounding and changes in effective tax rates and weighted average diluted shares out standing between quarterly and annual periods (in thousands) Q1 % of Sales Q2 % of Sales Q3 % of Sales Q4 % of Sales FY24 % of Sales Reported GAAP operating income 1,918$ 2.0% 4,585$ 4.6% 2,982$ 2.8% 7,596$ 6.9% 17,080$ 4.1% Restructuring expense — — 2,627 2.5% 355 0.3% 2,982 0.7% CEO Transition Costs — — — 1,510 1.3% 1,510 0.4% Gain on Disposal of Assets — — — (3,262) -2.9% (3,262) -0.8% Adjusted operating income 1,918$ 2.0% 4,585$ 4.6% 5,609$ 5.2% 6,199$ 5.6% 18,310$ 4.4% Q1 Q2 Q3 Q4 FY24 Reported GAAP diluted earnings per share 0.14$ 0.57$ 0.33$ 0.89$ 1.91$ Restructuring expense — — 0.48 0.06 0.54 CEO Transition Costs — — — 0.27 0.27 Gain on Disposal of Assets — — — (0.59) (0.59) Tax impact of the above adjustments(1) — — (0.14) 0.11 (0.02) Adjusted diluted earnings per share 0.14$ 0.57$ 0.67$ 0.75$ 2.11$ (1) Effective tax rate of 44.2% and 30.0% was used to calculate the three months ended June 30, 2024, and March 31, 2024, respect ively. Effective tax rate of 9.2% was used to calculate the twelve months ended June 30, 2024. The following table sets forth the reconciliation of the Company’s reported quarterly and annual GAAP operating income to the calculation of adjusted operating income for fiscal year ended June 30, 2024: The following table sets forth the reconciliation of the Company’s reported quarterly and annual GAAP diluted earnings per share to the calculation of adjusted diluted earnings per share for fiscal year ended June 30, 2024:
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FY23 NON - GAP DISCLOSURES (UNAUDITED) Q1 Q2 Q3 Q4 FY23 Reported GAAP diluted earnings per share 0.05$ 0.53$ 0.28$ 1.91$ 2.74$ Other expense 0.06 — — — 0.06 Environmental remediation — (0.52) — — (0.52) Tax impact of the above adjustments(1) (0.02) 0.07 — — 0.11 Expiring state tax credits — — — 0.30 0.29 Remeasurement of deferred tax assets and valuation allowance — — (1.85) (1.83) Adjusted diluted earnings per share 0.09$ 0.08$ 0.28$ 0.36$ 0.87$ The following table sets forth the reconciliation of the Company’s reported quarterly and annual GAAP operating income to the calculation of adjusted operating income for fiscal year ended June 30, 2023: The following table sets forth the reconciliation of the Company’s reported quarterly and annual GAAP diluted earnings per share to the calculation of adjusted diluted earnings per share for fiscal year ended June 30, 2023: Note: The table above may not foot due to rounding and changes in effective tax rates and weighted average diluted shares out standing between quarterly and annual periods (1) Effective tax rate of 27% and 13.5% was used to calculate the three months ended September 30, 2022, and December 31, 2022, r espectively. Effective tax rate of 25.1% was used to calculate the twelve months ended June 30, 2023. (in thousands) Q1 % of Sales Q2 % of Sales Q3 % of Sales Q4 % of Sales FY23 % of Sales Reported GAAP operating income 428$ 0.4% 3,762$ 4.0% 2,116$ 2.1% 4,236$ 4.0% 10,542$ 2.7% Other expense 347 0.4% — — — 347 0.1% Environmental remediation — (2,788) -3.0% — — (2,788) -0.7% Adjusted operating income 775$ 0.8% 974$ 1.0% 2,116$ 2.1% 4,236$ 4.0% 8,101$ 2.1%