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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

______________________________________

FORM 10-Q

______________________________________

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

For the quarterly period ended March 31, 2026

 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 the State of Minnesota	42-0442319
(State or other Jurisdiction of	(I.R.S. Identification No.)
Incorporation or Organization)

385 BELL STREET

DUBUQUE, IA 52001-7004

(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 a shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically 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  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  Non-Accelerated Filer  Smaller Reporting Company  Emerging Growth Company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 


Common Stock - $1.00 Par Value
Shares Outstanding as of April 22, 2026	5,355,531

Table of Contents

FLEXSTEEL INDUSTRIES, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED March 31, 2026


		Page
Part I – Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of March 31, 2026, and June 30, 2025 (Unaudited)	3
	Consolidated Statements of Income and Comprehensive Income for three and nine months ended March 31, 2026, and March 31, 2025 (Unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended March 31, 2026, and March 31, 2025 (Unaudited)	5
	Consolidated Statements of Cash Flows for the nine months ended March 31, 2026, and March 31, 2025 (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
Part II – Other Information
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 5.	Other Information	17
Item 6.	Exhibits	17
Signatures		18

Table of Contents

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Amounts in thousands)


	March 31,			June 30,
	2026			2025
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	57,283		$	40,006
Trade receivables - less allowances: March 31, 2026, $2,090, June 30, 2025, $1,790		41,455			35,229
Inventories		80,569			89,135
Other		21,158			8,002
Total current assets		200,465			172,372
NONCURRENT ASSETS:
Property, plant and equipment, net		36,501			36,212
Operating lease right-of-use assets		37,264			41,545
Deferred income taxes		9,095			12,444
Other assets		6,846			19,913
TOTAL ASSETS	$	290,171		$	282,486

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade	$	23,894		$	25,617
Current portion of operating lease liabilities		8,258			7,809
Accrued liabilities:
Payroll and related items		9,332			11,260
Insurance		1,629			1,950
Sales and advertising related items		9,372			8,061
Other		5,741			7,317
Total current liabilities		58,226			62,014
LONG-TERM LIABILITIES:
Operating lease liabilities, less current maturities		45,645			51,561
Other liabilities		997			1,049
Total liabilities		104,868			114,624

SHAREHOLDERS' EQUITY:
Common stock - $1 par value; authorized 15,000 shares; 8,590 shares issued and 5,352 outstanding as of March 31, 2026; 8,514 shares issued and 5,307 outstanding as of June 30, 2025		8,590			8,514
Additional paid-in capital		42,003			40,644
Treasury stock, at cost; 3,238 shares as of March 31, 2026, and 3,207 shares as of June 30, 2025		(72,861	)		(71,731	)
Retained earnings		207,571			190,435
Total shareholders' equity		185,303			167,862
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	290,171		$	282,486

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Amounts in thousands, except per share data)


	Three Months Ended					Nine Months Ended
	March 31,					March 31,
	2026		2025			2026		2025
Net sales	$	115,125	$	113,972		$	343,813	$	326,462
Cost of goods sold		89,080		88,636			264,998		255,954
Gross profit		26,045		25,336			78,815		70,508
Selling, general and administrative expenses		17,823		17,070			52,609		49,532
Right-of-use asset impairment		—		14,079			—		14,079
(Gain) on sale of real estate		—		(753	)		—		(753	)
(Gain) on disposal of assets held for sale		—		—			—		(4,991	)
Operating income (loss)		8,222		(5,060	)		26,206		12,641
Other income (expense):
Interest income		361		102			1,105		133
Interest (expense)		—		—			—		(70	)
Income (loss) before income taxes		8,583		(4,958	)		27,311		12,704
Income tax provision (benefit)		2,138		(1,216	)		6,895		3,252
Net income (loss) and comprehensive income	$	6,445	$	(3,742	)	$	20,416	$	9,452
Weighted average number of common shares outstanding:
Basic		5,349		5,271			5,333		5,240
Diluted		5,664		5,271			5,632		5,572
Earnings (loss) per share of common stock:
Basic	$	1.20	$	(0.71	)	$	3.83	$	1.80
Diluted	$	1.14	$	(0.71	)	$	3.63	$	1.70

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)

(Amounts in thousands)


	Nine Months Ended March 31, 2026
	Total Par
	Value of
	Common		Additional
	Shares		Paid-In			Treasury			Retained
	($1 Par)		Capital			Stock			Earnings			Total
Balance on June 30, 2025	$	8,514	$	40,644		$	(71,731	)	$	190,435		$	167,862
Stock-based compensation	$	4	$	1,113			—		$	—		$	1,117
Vesting of restricted stock units	$	60	$	(1,991	)		—		$	—		$	(1,931	)
Stock options exercised, net	$	1	$	29			—		$	—		$	30
Treasury stock purchases	$	—	$	—			(1,130	)	$	—		$	(1,130	)
Cash dividends declared	$	—	$	—			—		$	(1,091	)	$	(1,091	)
Net income	$	—	$	—			—		$	7,327		$	7,327
Balance on September 30, 2025	$	8,579	$	39,795		$	(72,861	)	$	196,671		$	172,184
Stock-based compensation	$	4	$	1,140			—		$	—			1,144
Vesting of restricted stock units	$	1	$	(13	)		—		$	—			(12	)
Cash dividends declared	$	—	$	—			—		$	(1,094	)		(1,094	)
Net income	$	—	$	—			—		$	6,644			6,644
Balance on December 31, 2025	$	8,584	$	40,922		$	(72,861	)	$	202,221		$	178,866
Stock-based compensation	$	3	$	1,141			—		$	—		$	1,144
Vesting of restricted stock units	$	2	$	(99	)		—		$	—		$	(97	)
Stock options exercised, net	$	1	$	39			—		$	—		$	40
Cash dividends declared	$	—	$	—			—		$	(1,095	)	$	(1,095	)
Net income	$	—	$	—			—		$	6,445		$	6,445
Balance on March 31, 2026	$	8,590	$	42,003			(72,861	)	$	207,571		$	185,303


	Nine Months Ended March 31, 2025
	Total Par
	Value of
	Common		Additional
	Shares		Paid-In			Treasury			Retained
	($1 Par)		Capital			Stock			Earnings			Total
Balance on June 30, 2024	$	8,407	$	39,573		$	(71,731	)	$	174,118		$	150,367
Stock-based compensation		3		1,135			—			—			1,138
Stock options exercised, net		4		(36	)		—			—			(32	)
Cash dividends declared		—		—			—			(910	)		(910	)
Net income		—		—			—			4,140			4,140
Balance on September 30, 2024	$	8,414	$	40,672		$	(71,731	)	$	177,348		$	154,703
Stock-based compensation		2		961			—			—			963
Vesting of restricted stock units and restricted shares		1		(14	)		—			—			(13	)
Stock options exercised, net		60		(1,925	)		—			—			(1,865	)
Cash dividends declared		—		—			—			(922	)		(922	)
Net income		—		—			—			9,054			9,054
Balance on December 31, 2024	$	8,477	$	39,694		$	(71,731	)	$	185,480		$	161,920
Stock-based compensation		3		859			—			—			862
Cash dividends declared		—		—			—			(921	)		(921	)
Net income		—		—			—			(3,742	)		(3,742	)
Balance on March 31, 2025	$	8,480	$	40,553		$	(71,731	)	$	180,817		$	158,119

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in thousands)


	Nine Months Ended
	March 31,
	2026			2025
OPERATING ACTIVITIES:
Net income	$	20,416		$	9,452
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,753			2,777
Deferred income taxes		3,349			(3,463	)
Stock-based compensation expense		3,405			2,963
Provision for credit losses		308			12
Right-of-use asset impairment					14,079
Loss (gain) on disposition of property, plant and equipment		99			(5,762	)
Changes in operating assets and liabilities:
Trade receivables		(6,534	)		5,771
Inventories		8,566			9,438
Other current assets		(74	)		(1,302	)
Other assets		(13	)		(5,638	)
Accounts payable - trade		(1,338	)		(3,724	)
Accrued liabilities		(3,688	)		(3,454	)
Other long-term liabilities		(54	)		204
Net cash provided by operating activities		27,195			21,353
INVESTING ACTIVITIES:
Proceeds from sale of investments		—			1,155
Proceeds from sales of property, plant and equipment		15			7,538
Capital expenditures		(3,539	)		(2,690	)
Net cash (used in) provided by investing activities		(3,524	)		6,003
FINANCING ACTIVITIES:
Dividends paid		(3,294	)		(2,655	)
Treasury stock purchases		(1,130	)		—
Proceeds from line of credit		—			202,344
Payments on line of credit		—			(207,262	)
Proceeds from issuance of common stock		70			141
Shares withheld for tax payments on vested shares and options exercised		(2,040	)		(2,051	)
Net cash (used in) financing activities		(6,394	)		(9,483	)
Increase in cash and cash equivalents		17,277			17,873
Cash and cash equivalents at beginning of the period		40,006			4,761
Cash and cash equivalents at end of the period	$	57,283		$	22,634

SUPPLEMENTAL INFORMATION
Interest paid		—			107
Interest received		1,105			133
Cash paid for income taxes, net		6,394			7,312
Capital expenditures in accounts payable		6			28

See accompanying Notes to Consolidated Financial Statements (Unaudited).

Table of Contents

FLEXSTEEL INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE PERIOD ENDED March 31, 2026

1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS – Flexsteel Industries, Inc. and Subsidiaries (the “Company” or “Flexsteel” or “Our”) is one of the largest residential furniture manufacturers, importers, and marketers in the U.S., known for crafting comfortable, durable seating and timeless designs for rooms throughout the home. Product offerings include a wide variety of furniture such as sofas, loveseats, chairs, reclining rocking chairs, swivel rockers, sofa beds, convertible bedding units, occasional tables, desks, dining tables and chairs, kitchen storage, bedroom furniture, and outdoor furniture. For more than 130 years, Flexsteel has built furniture with care, highlighted by its patented Blue Steel Spring technology that delivers lasting comfort and support. Today, Flexsteel products are available nationwide through retail partners and online channels, helping people create inviting, livable spaces they can enjoy for years to come.

BASIS OF PRESENTATION – The unaudited Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information contained 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, 2026, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026. 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 in Note 1 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025, appropriately represent, in all material respects, the current status of accounting policies.

2. INVENTORIES

A comparison of inventories is as follows:


	March 31,		June 30,
(in thousands)	2026		2025
Raw materials	$	9,632	$	11,114
Work in process and finished parts		1,990		2,632
Finished goods		68,947		75,389
Total	$	80,569	$	89,135

3. LEASES

The Company accounts for its leases in accordance with ASU 842, Leases. ASC 842 requires lessees to (i) recognize a right-of-use asset (“ROU asset”) and a lease liability that is measured at the 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 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, the remaining balance of lease incentives received, and any impairment. Both the lease ROU asset and lease 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 ROU asset and lease liability, the discount rate utilized by the Company was based on the average interest rates effective for the Company’s line of credit. 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.

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The components of the Company’s leases excluding the impact of sublease income reflected on the Company’s Consolidated Statements of Income were as follows:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
(in thousands)	2026		2025		2026		2025
Operating lease expense	$	2,113	$	2,495	$	6,325	$	7,482
Variable lease expense		460		484		1,297		1,396
Total lease expense	$	2,573	$	2,979	$	7,622	$	8,878

Other information related to leases and future minimum lease payments under non-cancelable operating leases were as follows:


	Nine Months Ended
	March 31,
(in thousands)	2026			2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	7,510		$	7,381

Cash received from subleasing of operating lease:
Operating cash flows received from subleasing of operating lease	$	—		$	594

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	456		$	4,119

Weighted-average remaining lease term (in years):
Operating leases		6.5			7.4

Weighted-average discount rate:
Operating leases		3.9	%		4.0	%

Future minimum lease payments under non-cancelable operating leases were as follows:


	March 31, 2026
Remaining payments in FY2026	$	2,527
FY2027	$	10,255
FY2028	$	10,025
FY2029	$	8,949
FY2030	$	8,713
Thereafter	$	20,400
Total future minimum lease payments	$	60,869
Less imputed interest	$	6,966
Lease liability	$	53,903

4. CREDIT ARRANGEMENTS

On September 8, 2021, the Company, as the borrower, entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (the “Lender”), and the other lenders party thereto. The Credit Agreement has a five-year term and provides for up to an $85 million revolving line of credit. Subject to certain conditions, the Credit Agreement also provides for the issuance of letters of credit in an aggregate amount up to $5 million which, upon issuance, would be deemed advances under the revolving line of credit. Proceeds of borrowings were used to refinance all indebtedness owed to a prior lender and for working capital purposes. The Company’s obligations under the Credit Agreement are secured by substantially all its assets, excluding real property. The Credit Agreement contains customary representations, warranties, and covenants, including a financial covenant to maintain a fixed coverage ratio of not less than 1.00 to 1.00. In addition, the Loan Agreement places restrictions on the Company’s ability to incur additional indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, and to merge or consolidate with other entities. As of March 31, 2026, management believes the Company was in compliance with all covenants.

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On April 18, 2022, the Company, as the borrower, entered into a first amendment to the Credit Agreement (“First Amendment to the Credit Agreement”), with the Lender and the lenders thereto. The amendment to the Credit Agreement changed the definition of the term ‘Payment Conditions’ and further defined default or event of default and the calculation of the Fixed Charge Coverage Ratio.

Subject to certain conditions, borrowings under the Credit Agreement initially bore interest at LIBOR plus 1.25% or 1.50% per annum. On May 24, 2023, the Company entered into a second amendment to the Credit Agreement ("Second Amendment to the Credit Agreement") with the Lender to transition the applicable interest rate from LIBOR to Secured Overnight Financing Rate ("SOFR"). Effective as of the date of the Second Amendment to the Credit Agreement, borrowings under the amended Credit Agreement bear interest at SOFR plus 1.36% to 1.61%, or an effective interest rate of 4.99%, on March 31, 2026.

On June 3, 2025, the Company entered into a third amendment to its Credit Agreement ("Third Amendment to the Credit Agreement") with Wells Fargo Bank, NA. The amendment reduced the maximum revolving line of credit amount to $55 million and modified certain definitions in the Credit Agreement which include dollar figures derived from the maximum revolver amount. The reduction in the maximum revolving line of credit amount was initiated by the Company to better align with current and projected borrowing availability under the terms of the Credit Agreement.

As of March 31, 2026, there were no outstanding borrowings under the Credit Agreement, exclusive of fees and letters of credit.

Letters of credit outstanding with the Lender as of March 31, 2026, totaled $0.9 million.

5. 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 three months ended March 31, 2026, and March 31, 2025, was 24.9% and 24.5%, respectively. The Company's effective tax rate for the nine months ended March 31, 2026 and 2025, was 25.2% and 25.6%, respectively. For the three and nine months ended March 31, 2026, the effective tax rate differs from the statutory tax rate of 21% primarily due to state taxes, the impact of foreign operations, and non-deductible compensation, offset by credits for research and development. For the three and nine months ended March 31, 2025, the effective tax rate differs from the statutory tax rate of 21% due to nondeductible stock compensation, state taxes, and the impact of foreign operations.

6. 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 from the date of grant. Stock-based compensation is included in selling, general and administrative expenses on the Consolidated Statements of Income and Comprehensive Income. Forfeitures are recognized as incurred.

The following table is a summary of total stock-based compensation expenses for the three and nine months ended March 31, 2026 and 2025.


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
(in thousands)	2026		2025		2026		2025
Total stock-based compensation expense	$	1,144	$	862	$	3,405	$	2,963

The Company’s shareholders approved the Flexsteel Industries, Inc. 2022 Equity Incentive Plan (“2022 Plan”) on December 14, 2022 and approved amendments to the 2022 Plan on December 10, 2025.

The 2022 Plan replaced the Long-Term Incentive Compensation Plan (“LTIP”) and the 2013 Omnibus Stock Plan (collectively, the “Prior Plans”). No further awards will be made under either of the Prior Plans, but these Prior Plans will continue to govern awards previously granted under them.

(1)

2022 Equity Incentive Plan

The 2022 Plan is a long-term incentive plan pursuant to which awards may be granted to certain employees, independent contractors and directors of the Company, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other stock-based awards. For periods beginning on or after July 1, 2023,

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restricted stock units ("RSUs") and performance stock units ("PSUs") granted to officers and key employees as part of long-term compensation programs are issued from the 2022 Plan. RSUs and PSUs awarded from the 2022 Plan are included in the Long-Term Incentive Compensation or Restricted Share and RSUs tables below.

(2)

Long-Term Incentive Compensation Plan

The LTIP provided for PSUs to be awarded to officers and key employees based on performance goals set by the Compensation Committee of the Board of Directors (the “Committee”). In conjunction with each grant of PSUs, the Committee granted RSUs under the 2013 Omnibus Stock Plan that vested at the end of three years. No further awards will be issued under this plan.

(3)

2013 Omnibus Stock Plan

The 2013 Omnibus Stock Plan was for key employees, officers and directors and provided for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, and performance units. No further awards will be issued under this plan.

Long-Term Incentive Compensation

The table below sets forth, as of March 31, 2026, the number of unvested PSUs granted at the target performance level for the 2024-2026, 2025-2027, and 2026-2028 performance periods under the 2022 Plan and the number of unvested RSUs granted in conjunction with the PSUs. For PSUs awarded for the three year performance periods ending June 30, 2026, 2027 and 2028, achievement is based on meeting performance goals set for each year within the three year period. The Committee selected Adjusted Operating Income as the performance metric for the performance periods ending June 30, 2026, 2027, and 2028.


	Time-Based Vest (RSUs)					Performance-Based Vest (PSUs)					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 of June 30, 2025		128		$	21.25		191		$	21.09		319		$	21.17
Granted		31			35.94		46			35.94		77			35.94
Vested		(48	)		19.23		(72	)		19.23		(120	)		19.23
Forfeited		(2	)		25.89		(4	)		25.89		(6	)		25.89
Unvested as of March 31, 2026		109		$	26.23		161		$	26.05		270		$	26.14

Total unrecognized stock-based compensation related to the unvested PSUs at the target performance level and the related unvested RSUs was $3.2 million as of March 31, 2026, which is expected to be recognized over a weighted-average period of 1.1 years.

Restricted Shares and RSUs

A summary of the activity in the Company’s unvested restricted shares and unvested RSUs (not granted in conjunction with PSUs) as of March 31, 2026, is as follows:


				Weighted Average
	Shares			Fair Value
	(in thousands)			Per Share
Unvested as of June 30, 2025		17		$	24.32
Granted		6			40.96
Vested		(5	)		4.96
Forfeited		(1	)		31.12
Unvested as of March 31, 2026		17		$	35.49

Total unrecognized stock-based compensation related to unvested restricted shares and unvested RSUs (not granted in conjunction with the PSUs) was $0.3 million as of March 31, 2026, which is expected to be recognized over a weighted-average period of 1.2 years.

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Options

A summary of the activity of the Company’s stock option plans as of March 31, 2026, is presented below:


				Weighted
	Shares			Average
	(in thousands)			Exercise Price
Outstanding at June 30, 2025		66		$	18.02
Granted		—			—
Exercised		(2	)		37.06
Cancelled		(2	)		43.09
Outstanding at March 31, 2026		62		$	16.60

The following table summarizes information for options outstanding at March 31, 2026:


		Options		Weighted Average
Range of		Outstanding		Remaining		Exercise
Prices		(in thousands)		Life (Years)		Price
$	9.97 - 15.14		43		4.1	$	10.62
	18.30 - 19.72		6		5.2		18.30
	21.96 - 27.57		3		2.8		24.49
	31.06 - 32.80		5		2.4		32.80
	43.09 - 47.45		5		1.0		45.03
$	9.97 - 47.45		62		3.8	$	16.60

There is no unrecognized stock-based compensation expense related to these options as of March 31, 2026.

Stock-based compensation granted outside a plan

During the quarter ended June 30, 2020, the Company awarded its former Chief Financial Officer/Chief Operating Officer (current Chief Executive Officer) 79,000 options outside of any Company stock plans. All 79,000 options remain outstanding as of March 31, 2026, with an exercise price of $9.97 and a remaining life of 4 years. There is no remaining unrecognized stock-based compensation expense related to these options.

7. 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 plans, and non-vested restricted stock units. The Company calculates the dilutive effect of outstanding options and restricted stock units 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)	2026		2025		2026		2025
Basic shares		5,349		5,271		5,333		5,240
Potential common shares:
Stock options		101		—		98		103
Non-vested restricted stock units and restricted shares		214		—		201		229
Diluted shares		5,664		5,271		5,632		5,572

Anti-dilutive shares		2		331		4		2

Cash dividends declared per common share were $0.20 for the three and nine months ended March 31, 2026, and were $0.17 for the three and nine months ended March 31, 2025, respectively.

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8. SEGMENT INFORMATION

The Company operates as one operating segment and one reportable segment reflecting the integrated nature of its operations across various products, manufacturing platforms and sales channels across the entire United States.

The Company's chief operating decision maker (“CODM”) is its President and Chief Executive Officer, who has final authority over the allocation of resources, assessment of performance, and key operating decisions.

The CODM manages the business on a consolidated basis and measures segment performance using operating income and net income, which the Company believes provide the best analysis of business performance. The CODM analyzes the performance of operating income and net income to provide insight into all aspects of the segment’s operations and overall success for a given period. In addition, the CODM reviews significant segment expenses focused on cost of sales, selling and general administrative expenses, and restructuring charges, net. These costs used to measure segment profitability are the same costs already reported in the accompanying Consolidated Statements of Income and Comprehensive Income. Similarly, segment assets are reported in the accompanying Consolidated Balance Sheets.

The Company has minimal export sales, primarily to Canada or Mexico. The Company leases and operates three manufacturing facilities in Juarez, Mexico and leases one manufacturing facility in Mexicali, Mexico. Long-lived assets, including property, plant & equipment and right-of-use assets related to leases, located in the United States and Mexico totaled $41.2 million and $32.6 million, respectively, at March 31, 2026 and $42.4 million and $35.4 million, respectively, at June 30, 2025.

9. COMMITMENTS AND CONTINGENCIES

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.

10. RECENT ACCOUNTING PRONOUNCEMENTS

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the disclosure impacts of this ASU on its consolidated financial statements.

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023 09 “Improvements to Income Tax Disclosures.” The amendments in this ASU are intended to increase transparency through improvements to income tax disclosures primarily related to the income tax rate reconciliation and income taxes paid information. The Company will adopt this ASU for the annual period ending June 30, 2026. The Company does not expect this guidance will have a material impact on our financial position and results of operations.

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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.

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 2025 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, 2026 and 2025. The amounts presented are percentages of the Company’s net sales.


	Three Months Ended							Nine Months Ended
	March 31,							March 31,
	2026			2025				2026			2025
Net sales		100.0	%		100.0		%		100.0	%		100.0		%
Cost of goods sold		77.4			77.8				77.1			78.4
Gross margin		22.6			22.2				22.9			21.6
Selling, general and administrative expenses		15.5			15.0				15.3			15.2
Right-of-use asset impairment		—			12.4				—			4.3
(Gain) on sale of real estate		—			(0.7	)			—			(0.2	)
(Gain) on disposal of assets held for sale		—			—				—			(1.5	)
Operating income (loss)		7.1			(4.4	)			7.6			3.8
Interest income		0.3			0.1				0.3			—
Income (loss) before income taxes		7.4			(4.3	)			7.9			3.8
Income tax provision (benefit)		1.9			(1.1	)			2.0			1.0
Net income (loss) and comprehensive income		5.6	%		(3.3	)	%		5.9	%		2.8		%

Results of Operations for the Quarter Ended March 31, 2026 vs. 2025

Net sales were $115.1 million for the quarter ended March 31, 2026, compared to net sales of $114.0 million in the prior year quarter, an increase of 1.0%. The increase was driven by higher pricing from tariff surcharges, offset by lower unit volume, particularly in our made-to-order, ready-to-assemble and case goods categories.

Sales order backlog, inclusive of estimated tariff surcharges, was $79.5 million as of the quarter ended March 31, 2026, an increase of 1.5% compared to $78.3 million in the prior year quarter.

Gross margin as a percent of net sales for the quarter ended March 31, 2026, was 22.6%, compared to 22.2% for the prior year quarter, an increase of 40 basis points (“bps”). The 40-bps increase was primarily driven by favorable sales composition of higher margin products.

Selling, general and administrative (“SG&A”) expenses increased $0.7 million to $17.8 million in the quarter ended March 31, 2026, as compared to $17.1 million in the prior year quarter. As a percentage of net sales, SG&A was 15.5% in the quarter ended March 31, 2026 compared to 15.0% of net sales in the prior year quarter. The 50-bps increase was mainly due to investments in consumer insights, innovation, demand generation, and customer experience.

Income tax expense was $2.1 million, or an effective rate of 24.9% for the quarter ended March 31, 2026, compared to income tax benefit of ($1.2) million, or an effective rate of 24.5% for the quarter ended March 31, 2025. For the quarter ended March 31, 2026, the effective tax rate differs from the statutory tax rate of 21% primarily due to state taxes, the impact of foreign operations, and non-deductible compensation offset by credits for research and development.

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Net income was $6.4 million, or $1.14 per diluted share for the quarter ended March 31, 2026, compared to net loss of ($3.7) million, or $(0.71) per diluted share in the prior year quarter. During the quarter ended March 31, 2025, the Company recorded a right-of-use asset impairment on the manufacturing facility in Mexicali, Mexico.

Results of Operations for the nine months ended March 31, 2026 and 2025

Net sales were $343.8 million for the nine months ended March 31, 2026, compared to net sales of $326.5 million in the prior-year nine-month period, an increase of 5.3%. The increase in sales of $17.3 million was driven by higher unit volume of sourced soft seating products and pricing from tariff surcharges, partially offset by lower unit volume in our made-to-order soft seating products and homestyles branded ready-to-assemble products.

Gross margin as a percent of net sales for the nine months ended March 31, 2026, was 22.9%, compared to 21.6% for the prior-year nine-month period, an increase of 130 bps. The 130-bps increase was primarily driven by favorable sales composition of higher margin products, partially offset by the dilutive impact of tariffs.

Selling, general and administrative expenses increased $3.1 million in the nine months ended March 31, 2026, compared to the prior-year nine-month period. SG&A as a percentage of sales was 15.3% in the nine months ended March 31, 2026, compared to the prior-year nine-month period of 15.2%. The 10-bps increase was mainly due to investments in growth initiatives.

Income tax expense was $6.9 million, or an effective rate of 25.2%, during the nine months ended March 31, 2026, compared to income tax expense of $3.3 million in the prior-year nine-month period, or an effective tax rate of 25.6%. The effective tax rate for the nine months ended March 31, 2026, was primarily impacted by state taxes, the impact of foreign operations and nondeductible compensation, offset by credits for research and development.

Net income was $20.4 million, or $3.63 per diluted share for the nine months ended March 31, 2026, compared to net income of $9.5 million, or $1.70 per diluted share in the prior-year nine-month period. During the nine-month period ended March 31, 2025, the Company recorded a right-of-use asset impairment on the manufacturing facility in Mexicali, Mexico. In addition the Company recorded pre-tax gains related to the sale of its Dublin, Georgia facility and an ancillary building, formerly part of its Huntingburg, IN distribution center.

Liquidity and Capital Resources

Working capital (current assets less current liabilities) on March 31, 2026, was $142.2 million compared to $110.4 million on June 30, 2025. The $31.8 million increase in working capital was primarily due to an increase in cash of $17.3 million, other current assets of $13.2 million, an increase in trade receivables of $6.2 million, and a decrease in accounts payable of $1.7 million, a decrease in other current liabilities of $1.6 million, a decrease in other current liabilities of $0.8 million partially offset by a decrease in inventories of $8.6 million and an increase in operating lease of $0.4. Refer to discussion of working capital changes below, under Net cash provided by operating activities. Capital expenditures were $3.5 million during the nine months ended March 31, 2026.

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


	Nine Months Ended
	March 31,
(in thousands)	2026			2025
Net cash provided by operating activities	$	27,195		$	21,353
Net cash (used in) provided by investing activities		(3,524	)		6,003
Net cash (used in) financing activities		(6,394	)		(9,483	)
Increase in cash and cash equivalents	$	17,277		$	17,873

Net cash provided by operating activities

For the nine months ended March 31, 2026, net cash provided by operating activities was $27.2 million, primarily due to net income of $20.4 million, a decrease in inventories of $8.6 million and adjustments for non-cash items including stock-based compensation of $3.4 million, deferred income taxes $3.3 million, depreciation of $2.8 million, provision for credit losses of $0.3 million, partially offset by an increase in trade receivables of $6.5 million, a decrease in accrued liabilities of $3.7 million, a decrease in accounts payable of $1.3 million and an increase in other current assets of $0.1 million.

For the nine months ended March 31, 2025, net cash provided by operating activities was $21.4 million, primarily due to net income of $9.5 million, adjustments for non-cash items including a right-of-use asset impairment of $14.1 million, a pre-tax gain on sale of assets of $5.8 million, deferred income tax of $3.5 million, stock-based compensation of $3.0 million, and depreciation of $2.8 million, as well

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as changes in operating assets and liabilities including, a decrease in inventory of $9.4 million, and a decrease in trade receivables of $5.8 million, offset by an increase in other assets of $5.6 million, a decrease in accounts payable of $3.7 million, a decrease in accrued liabilities of $3.5 million, an increase in other current assets of $1.3 and a decrease in other long-term liabilities of $0.2 million.

Net cash (used in) provided by investing activities

For the nine months ended March 31, 2026, net cash used in investing activities was $3.5 million due to capital expenditures.

For the nine months ended March 31, 2025, net cash provided by investing activities was $6.0 million due to proceeds from the sales of property, plant and equipment of $7.5 million, and corporate owned life insurance proceeds of $1.2 million, offset by capital expenditures of $2.7 million.

Net cash (used in) financing activities

For the nine months ended March 31, 2026, net cash used in financing activities was $6.4 million, primarily due to dividends paid of $3.3 million, shares withheld for tax payments on vested shares and options exercised of $2.0 million and treasury stock purchases of $1.1 million.

For the nine months ended March 31, 2025, net cash used in financing activities was $9.5 million, due to payments on the line of credit of $207.3 million, dividends paid of $2.7 million, and shares withheld for tax payments on vested shares and options exercised of $2.1 million, partially offset by proceeds from the line of credit of $202.3 million and proceeds from issuance of common stock of $0.1 million.

Line of Credit

On September 8, 2021, the Company, as the borrower, entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association (the “Lender”), and the other lenders thereto. The Credit Agreement has a five-year term and provided for up to an $85 million revolving line of credit. Subject to certain conditions, the Credit Agreement also provides for the issuance of letters of credit in an aggregate amount up to $5 million which, upon issuance, would be deemed advances under the revolving line of credit. Proceeds of borrowings were used to refinance all indebtedness owed to a prior lender and for working capital purposes. The Company’s obligations under the Credit Agreement are secured by substantially all its assets, excluding real property. The Credit Agreement contains customary representations, warranties, and covenants, including a financial covenant to maintain a fixed coverage ratio of not less than 1.00 to 1.00. In addition, the Loan Agreement places restrictions on the Company’s ability to incur additional indebtedness, to create liens or other encumbrances, to sell or otherwise dispose of assets, and to merge or consolidate with other entities. As of March 31, 2026, management believes the Company was in compliance with all covenants.

On April 18, 2022, the Company entered into a first amendment to the Credit Agreement (“First Amendment to the Credit Agreement”), with the Lender, and the lenders thereto. The amendment to the Credit Agreement changed the definition of the term "Payment Conditions" and further defined default or event of default and the calculation of the Fixed Charge Coverage Ratio.

Subject to certain conditions, borrowings under the Credit Agreement initially bore interest at LIBOR plus 1.25% or 1.50% per annum. On May 24, 2023, the Company entered into a second amendment to the Credit Agreement (“Second Amendment to the Credit Agreement”) with the Lender to transition the applicable interest rate from LIBOR to Secured Overnight Financing Rate (“SOFR”). Effective as of the date of the Second Amendment to the Credit Agreement, borrowings under the amended Credit Agreement bear interest at SOFR plus 1.36% to 1.61%, or an effective interest rate of 4.99%, on March 31, 2026.

As of March 31, 2026, there were no outstanding borrowings under the Credit Agreement, exclusive of fees and letters of credit.

Letters of credit outstanding with the Lender as of March 31, 2026, totaled $0.9 million.

Contractual Obligations

As of March 31, 2026, 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, 2025.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

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. In the normal course of our business we are exposed to various types of market risks, including foreign currency risk, interest rate risk and inflation risk.

Foreign Currency Risk – During the quarters ended March 31, 2026 and 2025, the Company did not have sales but had purchases and other expenses denominated in foreign currencies, primarily the Mexican Peso. The wages of our employees and certain other employee benefits and indirect costs related to our operations in Mexico are made in Pesos and subject to foreign currency fluctuation with the U.S. dollar. The Company does not employ any foreign currency hedges against this operating expense exposure. A negative shift in the value of the U.S. dollar against the Peso could increase the cost of our manufactured product. In addition, the Company has certain asset and liabilities related to our manufacturing operations which are denominated in pesos, primarily our VAT receivable for recoverable VAT paid in Mexico. A negative shift in the value of the Peso against the U.S. dollar could result in the value of our receivable decreasing which may impact our earnings. The Company does not currently hedge this foreign currency risk. See “Risk Factors” in Item 1A in the most recent Annual Report on Form 10-K for further discussion.

Interest Rate Risk – The Company has exposure to changes in interest rates related to interest which accrues on our cash deposits as well as floating interest rates on our line of credit. Increases in interest rates benefit interest accrued on our cash deposits while also increasing our cost of borrowing. Declining interest rates decrease the value earned on our deposits while reducing our cost of borrowing. On March 31, 2026, the Company had no outstanding borrowings on its line of credit, exclusive of fees and letters of credit.

Inflation Risk – We are exposed to market risks from price inflation in raw materials, production costs, importation costs and domestic transportation costs. The cost to import furniture products and raw materials can be adversely affected by political issues in the countries where suppliers are located, as well as disruptions associated with shipping distances and negotiations with port employees. Other risks related to the cost of furniture product importation include government imposition of regulations and/or quotas; duties, taxes or tariffs on imports; and significant fluctuation in the value of the U.S. dollar against foreign currencies. Our upholstery manufacturing processes include wood and steel which can be impacted by commodity prices for these materials as well as petroleum based foam which can be impacted by the cost of crude oil prices and availability of starter chemicals to suppliers. Increased energy prices, notably fuel, will also impact the cost associated with transportation of materials and delivery of customer orders. Any of these factors could interrupt supply, increase costs, decrease demand, and decrease earnings.

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, 2026.

(b) Changes in internal control over financial reporting. During the quarter ended March 31, 2026, 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 “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 concerning long-term goals or anticipated results of the Company, including statements contained in the Company’s filings with the Securities and Exchange Commission and 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 the Company’s results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risk and uncertainty. Some of the factors that could affect results are the cyclical nature of the furniture industry, supply chain disruptions, litigation, the effectiveness of new product introductions and distribution channels, the product mix of sales, pricing pressures, the cost of raw materials and fuel, changes in foreign currency values, retention and recruitment of key employees, actions by governments including laws, regulations, taxes and tariffs, the amount of sales generated and the profit margins thereon, competition (both U.S. and foreign), credit exposure with customers, participation in multi-employer pension plans, disruptions or security breaches to business information systems, the impact of any future pandemic, and general economic conditions. For further information regarding these risks and uncertainties, see the “Risk Factors” section in Item 1A of our most recent Annual Report on Form 10-K.

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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, 2025.

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

On December 11, 2024, the Board of Directors approved a share repurchase program authorizing the Company to purchase up to $30 million of the Company’s common stock.

The following table summarizes the activity of the common stock repurchases made during the three months ended March 31, 2026.


	Total Number		Average		Total Number of Shares		Approximate Dollar Value of Shares
	of Shares		Price Paid		Purchased		that May Yet
Period	Purchased		per Share		as Part of Plan		Be Purchased
January 1, 2026, to January 31, 2026		—	$	—		—	$	28,870,242
February 1, 2026, to February 28, 2026		—		—		—		28,870,242
March 1, 2026, to March 31, 2026		—		—		—		28,870,242
Three months ended March 31, 2026		—	$	—		—	$	28,870,242

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the three months ended March 31, 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.

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	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
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.”

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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 22, 2026	By:	/s/ Michael J. Ressler
			Michael J. Ressler
			Chief Financial Officer
			(Principal Financial & Accounting Officer)

FLEXSTEEL INDUSTRIES INC 10-Q