Flexsteel Industries (FLXS) 15th Annual Midwest IDEAS Investor Conference summary

Strategic focus and business overview

• Shifted to focus solely on residential furniture, exiting RV, healthcare, hospitality, and commercial office sectors to concentrate on core competencies and higher returns.

• Operates in a fragmented industry, ranking among the top 10 U.S. manufacturers with $413 million in revenue and 1,500 employees, mainly in Mexico.

• Utilizes a balanced supply chain: 50% North American manufacturing and 50% global sourcing, with increased resilience post-pandemic.

• Product leadership in living room furniture, especially power motion, with 83% of revenue from primary living areas; growth targeted in underpenetrated home categories.

• Multi-brand strategy targets diverse consumer segments, including premium, modular, sleep-focused, and value-oriented offerings.

Market channels and distribution

• Maintains over 1,400 retail relationships, with 82%-86% of revenue from independent retailers, providing broad U.S. geographic coverage.

• Expanding into e-commerce, big box (notably Costco), and direct-to-consumer channels to reach new customer bases.

• Direct-to-consumer is currently less than 1% of business but seen as a future growth area, potentially via acquisition.

• Distribution and manufacturing network supports efficient nationwide service, with strategic assets available for future capacity needs.

• Actively diversifying global sourcing beyond Asia to mitigate supply chain risks.

Innovation and differentiation

• Differentiates through innovation, notably the patented Blue Steel Spring and new products like Flex (modular) and Zecliner (sleep chair).

• Investments in consumer research and marketing drive product development and brand awareness, especially among younger consumers.

• Focused on expanding into new product categories and addressing unmet market needs through proprietary solutions.