SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended JUNE 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-5151
A) Full title of the plan:
SALARIED EMPLOYEES' SAVINGS PLAN 401(K)
B) Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FLEXSTEEL INDUSTRIES, INC., P.O. BOX 877, DUBUQUE, IA 52004-0877
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Salaried Employees' Savings Plan 401(k)
---------------------------------------
(Name of Plan)
Date: September 9, 1997 /S/ R. J. KLOSTERMAN
---------------------------------------
R.J. Klosterman
VICE PRESIDENT OF FINANCE AND
PRINCIPAL FINANCIAL OFFICER
<PAGE>
INDEPENDENT AUDITORS' REPORT
Flexsteel Industries, Inc. Salaried Employees' Savings Plan 401(k):
We have audited the combining statements of financial position of the
Flexsteel Industries, Inc. Salaried Employees' Savings Plan 401(k) (the "Plan")
as of June 30, 1997 and 1996 and the related combining statements of income and
changes in plan equity for each of the three years in the period ended June 30,
1997. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Plan as of June 30, 1997 and 1996, and
the results of its operations for each of the three years in the period ended
June 30, 1997 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
August 8, 1997
<PAGE>
FLEXSTEEL INDUSTRIES, INC.
SALARIED EMPLOYEES' SAVINGS PLAN 401(k)
COMBINING STATEMENTS OF FINANCIAL POSITION
JUNE 30, 1997
<TABLE>
<CAPTION>
FLEXSTEEL PRIVATE
INDUSTRIES, MARKET INTER- SMALL
INC. GUARANTEED BOND AND STOCK MONEY NATIONAL COMPANY
COMMON COMMON INTEREST MORTGAGE INDEX MARKET STOCK STOCK
STOCK FUND STOCK FUND ACCOUNT ACCOUNT FUND ACCOUNT ACCOUNT FUND TOTAL
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
1997:
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash ......................... $ 17,307 $ 17,307
Employee Contributions
Receivable ............... 3,490 $ 18,812 $ 18,382 $ 4,258 $ 329 $ 810 $ 4,643 $ 8,450 59,174
Company Contributions
Receivable ............... 1,066 2,548 3,025 653 25 123 737 1,250 9,427
Investment in Flexsteel
Industries, Inc. Common
Stock - Par Value $1
Per Share; at market
131,500 shares at
$11.75 each .............. 1,545,125 1,545,125
Investment in Common
Stock Fund ............... 5,194,921 5,194,921
Investment in Bond &
Mortgage Account ......... 900,523 900,523
Investment in Guaranteed
Interest Accounts ........ 4,184,821 4,184,821
Investment in Stock
Index Fund ............... 118,249
118,249
Investment in Money
Market Account ........... 109,698 109,698
Investment in International
Stock Account ............ 677,249 677,249
Investment in Small Company
Stock Fund ............... 941,739 941,739
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Total Assets $1,566,988 $5,216,281 $4,206,228 $905,434 $118,603 $110,631 $682,629 $951,439 $13,758,233
========== ========== ========== ======== ======== ======== ======== ======== ===========
PLAN EQUITY
Total plan equity ........ $1,566,988 $5,216,281 $4,206,228 $905,434 $118,603 $110,631 $682,629 $951,439 $13,758,233
========== ========== ========== ======== ======== ======== ======== ======== ===========
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
FLEXSTEEL INDUSTRIES, INC.
SALARIED EMPLOYEES' SAVINGS PLAN 401(k)
COMBINING STATEMENTS OF FINANCIAL POSITION
JUNE 30, 1996
<TABLE>
<CAPTION>
FLEXSTEEL PRIVATE
INDUSTRIES, MARKET INTER- SMALL
INC. GUARANTEED BOND AND STOCK MONEY NATIONAL COMPANY
COMMON COMMON INTEREST MORTGAGE INDEX MARKET STOCK STOCK
STOCK FUND STOCK FUND ACCOUNT ACCOUNT FUND ACCOUNT ACCOUNT FUND TOTAL
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
1996:
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash ......................... $ 16,724 $ 16,724
Employee Contributions
Receivable ............... 3,497 $ 17,421 $ 21,497 $ 4,790 $ 315 $ 704 $ 3,360 $ 6,580 58,164
Company Contributions
Receivable ............... 764 2,355 3,347 707 24 115 645 987 8,944
Investment in Flexsteel
Industries, Inc. Common
Stock - Par Value $1
PerShare; at market
122,709 shares at
$11.75 each .............. 1,441,832 1,441,832
Investment in Common
Stock Fund ............... 3,776,198 3,776,198
Investment in Bond &
Mortgage Account ......... 828,863 828,863
Investment in Guaranteed
Interest Accounts ........ 4,322,628 4,322,628
Investment in Stock
Index Fund ............... 96,452 96,452
Investment in Money
Market Account ........... 70,165 70,165
Investment in International
Stock Account ............ 309,267 309,267
Investment in Small Company
Stock Fund ............... 615,575 615,575
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Total assets ............. $1,462,817 $3,795,974 $4,347,472 $834,360 $ 96,791 $ 70,984 $313,272 $623,142 $11,544,812
========== ========== ========== ======== ======== ======== ======== ======== ===========
PLAN EQUITY
Total plan equity ........ $1,462,817 $3,795,974 $4,347,472 $834,360 $ 96,791 $ 70,984 $313,272 $623,142 $11,544,812
========== ========== ========== ======== ======== ======== ======== ======== ===========
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
FLEXSTEEL INDUSTRIES, INC.
SALARIED EMPLOYEES' SAVINGS PLAN 401(k)
COMBINING STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED JUNE 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
FLEXSTEEL PRIVATE
INDUSTRIES, MARKET INTER- SMALL
INC. GUARANTEED BOND AND STOCK MONEY NATIONAL COMPANY
COMMON COMMON INTEREST MORTGAGE INDEX MARKET STOCK STOCK
STOCK FUND STOCK FUND ACCOUNT ACCOUNT FUND ACCOUNT ACCOUNT FUND TOTAL
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
1997:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Investment Income
Cash Dividends on Flexsteel
Common Stock.............. $ 60,267 $ 60,267
Interest ..................... 294 $ 253,338 $ 78,880 $ 4,798 337,310
---------- ---------- -------- -------- -----------
Total ................... 60,561 253,338 78,880 4,798 397,577
Employee Contributions .......... 75,753 $ 290,690 275,357 74,478 $ 4,460 12,564 $ 92,263 $136,747 962,312
Company Contributions ........... 19,223 45,065 47,245 12,287 1,065 1,969 17,193 24,053 168,100
Net Appreciation in Fair
Value of Investments ......... (2,107) 1,165,085 33,352 122,790 125,363 1,444,483
Withdrawals ..................... (48,100) (131,062) (362,588) (28,604) (17,435) (2,925) (10,577) (157,760) (759,051)
Transfers (To) From Other
Investment Programs .......... (1,159) 50,529 (354,596) (65,967) 370 23,241 147,688 199,894
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Increase in Plan Equity ......... 104,171 1,420,307 (141,244) 71,074 21,812 39,647 369,357 328,297 2,213,421
Plan Equity - Beginning of Year.. 1,462,817 3,795,974 4,347,472 834,360 96,791 70,984 313,272 623,142 11,544,812
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Plan Equity - End of Year ....... $1,566,988 $5,216,281 $4,206,228 $905,434 $118,603 $110,631 $682,629 $951,439 $13,758,233
========== ========== ========== ======== ======== ======== ======== ======== ===========
1996:
Net Investment Income
Cash Dividends on Flexsteel
Common Stock.............. $ 55,375 $ 55,375
Interest ..................... 334 $ 273,600 $ 42,443 $ 3,317 319,694
---------- ---------- -------- -------- -----------
Total .................... 55,709 273,600 42,443 3,317 375,069
Employee Contributions .......... 86,646 $ 256,401 321,675 89,823 $ 7,306 11,386 $ 65,272 $ 96,323 934,832
Company Contributions ........... 18,303 40,007 54,506 15,211 1,697 1,947 12,687 17,299 161,657
Net Appreciation in Fair
Value of Investments........... 176,968 819,100 19,021 38,056 106,732 1,159,877
Withdrawals ..................... (103,805) (71,648) (487,454) (41,370) (3,426) (4,090) (2,236) (8,995) (723,024)
Transfers (To) From Other
Investment Programs .......... 83,543 2,146 (263,304) (57,574) 1,845 (758) 88,960 145,142
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Increase (Decrease) in
Plan Equity .............. 317,364 1,044,006 (100,977) 48,533 26,443 11,802 202,739 356,501 1,908,411
Plan Equity - Beginning of Year.. 1,145,453 2,749,968 4,448,449 785,827 70,348 59,182 110.533 266,641 9,636,401
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Plan Equity - End of Year ....... $1,462,817 $3,795,974 $4,347,472 $834,360 $ 96,791 $ 70,984 $313,272 $623,142 $11,544,812
========== ========== ========== ======== ======== ======== ======== ======== ===========
1995:
Net Investment Income
Cash Dividends on Flexsteel
Common Stock.............. $ 46,567 $ 46,567
Interest ..................... 298 $ 283,899 $ 88,895 $ 2,364 375,456
---------- ---------- -------- -------- -----------
Total .................... 46,825 283,899 88,895 2,364 422,023
Employee Contributions .......... 119,961 $ 258,121 369,532 107,638 $ 20,512 10,617 $ 29,247 $ 39,743 955,371
Company Contributions ........... 23,735 31,891 87,045 15,075 3,464 1,345 3,575 4,167 170,297
Net Appreciation in Fair Value
of Investments................ (330,185) 428,530 20,245 4,164 36,161 158,915
Withdrawals ..................... (27,454) (57,753) (160,377) (43,716) (1,472) (1,356) (59) (546) (292,733)
Transfers (To) From Other
Investment Programs .......... 49,665 (32,873) (76,845) (46,560) (172,578) 18,469 73,606 187,116
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Increase (Decrease) in
Plan Equity .................. (117,413) 627,916 503,254 121,332 (129,829) 31,439 110,533 266,641 1,413,873
Plan Equity - Beginning of Year.. 1,262,866 2,122,052 3,945,195 664,495 200,177 27,743 8,222,528
---------- ---------- ---------- -------- -------- -------- -------- -------- -----------
Plan Equity - End of Year ....... $1,145,453 $2,749,968 $4,448,449 $785,827 $ 70,348 $ 59,182 $110,533 $266,641 $ 9,636,401
========== ========== ========== ======== ======== ======== ======== ======== ===========
</TABLE>
See accompanying Notes to Financial Statements
<PAGE>
FLEXSTEEL INDUSTRIES, INC.
SALARIED EMPLOYEES' SAVINGS PLAN 401(k)
NOTES TO FINANCIAL STATEMENTS
1) PLAN DESCRIPTION
The Flexsteel Industries, Inc. Salaried Employees' Savings Plan 401(k)
(the "Plan") was established effective July 1, 1985 by Flexsteel Industries,
Inc. (the "Company"). The Plan is available to certain salaried, salesmen and
office employees that have one year of eligible service and have reached the age
of twenty-one. Participation is voluntary.
The Plan allows eligible employees to elect to have from 1% to 10%
(salesmen are subject to a 4% maximum) of their basic pre-tax pay contributed to
the Plan. Employee contributions are subject to a maximum of $9,500 in calendar
year 1997 by law. The Company contributes an amount equal to 25% of the first 4%
of pay the employee contributes. Participant and Company basic contributions are
100% vested. The Company, at its option, may also contribute additional amounts
to be allocated amongst all participants based on the participants' pay; such
additional company contributions vest over 6 years (40% after 3 years, 60% after
4 years, 80% after 5 years, and 100% after 6 years).
Plan participants direct their contributions to any of the eight
investment accounts available:
1) The FLEXSTEEL INDUSTRIES, INC. COMMON STOCK FUND, which consists of
the Company's common stock.
2) A COMMON STOCK FUND, which consists of common stock and other equity
securities, and also may include short-term money market
instruments, cash, or cash equivalents.
3) A GUARANTEED INTEREST ACCOUNT, which is an insurance company account
that provides a guaranteed interest rate for a five-year period.
4) A PRIVATE MARKET BOND AND MORTGAGE ACCOUNT, which is an insurance
company account that provides for competitive yield debt securities.
5) A STOCK INDEX FUND, which is a pooled investment account invested in
the common stock of those firms included in the Standard & Poor's
500 Stock Index.
6) A MONEY MARKET ACCOUNT, which is an insurance company account
primarily invested in commercial paper with maturities of one year
or less.
7) An INTERNATIONAL STOCK ACCOUNT, which invests in stocks of companies
in Western Europe and Asia.
8) A SMALL COMPANY STOCK FUND, which invests in stocks of relatively
smaller companies.
Assets of the Plan are held by a "Custodian," the Principal Mutual Life
Insurance Company, except for the Flexsteel Industries, Inc. Common Stock Fund
that is held by the American Trust & Savings Bank of Dubuque, Iowa (the
"Trustee"). The Plan is administered by a committee appointed by the Board of
Directors of the Company. Distributions are paid upon retirement, termination of
employment, death, disability, or in hardship cases. Non-vested contributions
revert to the Company upon termination of employment. Upon termination of the
Plan, participant accounts become fully vested and non-forfeitable.
At June 30, 1997, the Plan had 506 participants, of which there were 197
participants in the Flexsteel Industries, Inc. Common Stock Fund, 360
participants in the Common Stock Fund, 418 participants in the Guaranteed
Interest Accounts, 208 participants in the Private Market Bond and Mortgage
Account, 40 participants in the Stock Index Fund, 62 participants in the Money
Market Account, 190 participants in the International Stock Fund, and 218
participants in the Small Company Stock Fund.
2) SIGNIFICANT ACCOUNTING POLICIES
The Plan uses the accrual basis of accounting. Investments in common stock
are recorded at market value based on market quotations. Other investments are
stated at market value as determined by the Trustee and Custodian based on the
market value of the funds and the participation in each fund. The cost of
investments sold is determined by the average cost method.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3) INCOME TAXES
The Plan has received a determination from the Internal Revenue Service
that the Plan is exempt from Federal income taxes. Participants are not taxed
currently on their contributions or on Company contributions to the Plan.
Distributions to participants generally are subject to Federal and State income
tax at the time of distribution; certain distributions may receive more
favorable tax treatment.
4) NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS
The unrealized appreciation (depreciation) in the investment accounts is
as follows:
<TABLE>
<CAPTION>
COST MARKET NET APPRECIATION
VALUE (DEPRECIATION)
----------- ----------- ----------------
<S> <C> <C> <C>
Flexsteel Industries, Inc. Common Stock
Fund
Balance, June 30, 1994 ................. $ 1,074,915 $ 1,217,391 $ 142,476
Net change during year ................. 237,419 (92,766) (330,185)
----------- ----------- -----------
Balance, June 30, 1995 ................. 1,312,334 1,124,625 (187,709)
Net change during year ................. 140,239 317,207 176,968
----------- ----------- -----------
Balance, June 30, 1996 ................. 1,452,573 1,441,832 (10,741)
Net change during year ................. 105,400 103,293 (2,107)
----------- ----------- -----------
Balance, June 30, 1997 ................. $ 1,557,973 $ 1,545,125 $ (12,848)
=========== =========== ===========
Common Stock Fund
Balance, June 30, 1994 ................. $ 1,418,337 $ 2,097,748 $ 679,411
Net change during year ................. 202,780 631,310 428,530
----------- ----------- -----------
Balance, June 30, 1995 ................. 1,621,117 2,729,058 1,107,941
Net change during year ................. 228,040 1,047,140 819,100
----------- ----------- -----------
Balance, June 30, 1996 ................. 1,849,157 3,776,198 1,927,041
Net change during year ................. 253,638 1,418,723 1,165,085
----------- ----------- -----------
Balance, June 30, 1997 ................. $ 2,102,795 $ 5,194,921 $ 3,092,126
=========== =========== ===========
Stock Index Fund
Balance, June 30, 1994 ................. $ 199,927 $ 197,771 $ (2,156)
Net change during year ................. (148,615) (128,370) 20,245
----------- ----------- -----------
Balance, June 30, 1995 ................. 51,312 69,401 18,089
Net change during year ................. 8,030 27,051 19,021
----------- ----------- -----------
Balance, June 30, 1996 ................. 59,432 96,452 37,110
Net change during year ................. (11,555) 21,797 33,352
----------- ----------- -----------
Balance, June 30, 1997 ................. $ 47,787 $ 118,249 $ 70,462
=========== =========== ===========
International Stock Fund
Balance, June 30, 1994 ................. $ $ $
Net change during year ................. 102,463 106,627 4,164
----------- ----------- -----------
Balance, June 30, 1995 ................. 102,463 106,627 4,164
Net change during year ................. 164,584 202,640 38,056
----------- ----------- -----------
Balance, June 30, 1996 ................. 267,047 309,267 42,220
Net change during year ................. 245,192 367,982 122,790
----------- ----------- -----------
Balance, June 30, 1997 ................. $ 512,239 $ 677,249 $ 165,010
=========== =========== ===========
Small Company Stock Fund
Balance, June 30, 1994 ................. $ $ $
Net change during year ................. 225,419 261,580 36,161
----------- ----------- -----------
Balance, June 30, 1995 ................. 225,419 261,580 36,161
Net change during year ................. 247,263 353,995 106,732
----------- ----------- -----------
Balance, June 30, 1996 ................. 472,682 615,575 142,893
Net change during year ................. 200,801 326,164 125,363
----------- ----------- -----------
Balance, June 30, 1997 ................. $ 673,483 $ 941,739 $ 268,256
=========== =========== ===========
</TABLE>
The cost of investments in the Guaranteed Interest Account, Private Market Bond
and Mortgage Account, and Money Market Account approximate market.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5) RELATED PARTY TRANSACTIONS
All administrative costs of the Plan are paid by the Company. Brokers'
commissions and fees, if any, incurred in connection with the segregated funds
are paid by the Plan.
The Plan had the following transactions in the Flexsteel Common Stock Fund
or in the Custodian's funds for the year ended June 30, 1997, 1996 and 1995
(shares in parentheses):
<TABLE>
<CAPTION>
1997: COST OF
FUND PURCHASES SALES (1) SALES (1)
---- --------- --------- ---------
<S> <C> <C> <C>
Flexsteel Industries, Inc.Common
Stock Fund...................... $116,599(9,791) $ 11,969(1,000) $ 11,969
Common Stock Fund .............. $334,171 $ 83,244 $ 83,244
Guaranteed Interest Account .... $326,041 $ 711,660 $ 711,660
Private Market Bond and
Mortgage Account ........... $ 87,350 $ 94,571 $ 94,571
Stock Index Fund ............... $ 5,510 $ 17,065 $ 17,065
Money Market Account ........... $ 14,419 $ (20,316) $ (20,316)
International Stock Account .... $108,080 $(137,111) $(137,111)
Small Company Stock Fund ....... $158,667 $ (42,134) $ (42,134)
1996: COST OF
FUND PURCHASES SALES (1) SALES (1)
---- --------- --------- ---------
Flexsteel Industries, Inc.Common
Stock Fund...................... $229,258(20,686) $ 89,019(7696) $ 89,019
Common Stock Fund .............. $297,542 $ 70,935 $ 70,935
Guaranteed Interest Account .... $392,830 $ 749,717 $ 749,717
Private Market Bond and
Mortgage Account ........... $108,147 $ 98,946 $ 98,946
Stock Index Fund ............... $ 9,611 $ 1,581 $ 1,581
Money Market Account ........... $ 13,284 $ 4,848 $ 4,848
International Stock Account .... $ 77,860 $ (86,724) $ (86,724)
Small Company Stock Fund ....... $111,116 $(136,147) $(136,147)
1995: COST OF
FUND PURCHASES SALES (1) SALES (1)
---- --------- --------- ---------
Flexsteel Industries, Inc.Common
Stock Fund...................... $238,920(21,182)
Common Stock Fund .............. $285,576 $ 90,627 $ 90,627
Guaranteed Interest Account .... $443,902 $ 237,223 $ 237,223
Private Market Bond and
Mortgage Account ........... $121,977 $ 90,276 $ 90,276
Stock Index Fund ............... $ 25,435 $ 174,050 $ 174,050
Money Market Account ........... $ 11,785 $ (17,113) $ (17,113)
International Stock Account .... $ 28,916 $ (73,546) $ (73,546)
Small Company Stock Fund ....... $ 38,848 $(186,571) $(186,571)
</TABLE>
(1) Amount is net of transfers
EXHIBIT 1
CONSENT OF INDEPENDENT AUDITORS
Flexsteel Industries, Inc.:
We consent to the incorporation by reference in Registration
Statement No. 33-1836 on Form S-8 as amended by Post-Effective Amendment No. 1
for the Flexsteel Salaried Employees' Savings Plan 401(k) of our report dated
August 8, 1997 appearing in the Annual Report on Form 11-K of the Flexsteel
Salaried Employees' Savings Plan 401(k) for the year ended June 30, 1997.
DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
September 24, 1997
