Financial News Release

06/18/19

La-Z-Boy Reports Strong Fiscal 2019 Performance

MONROE, Mich., June 18, 2019 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB) today reported its operating results for the fiscal 2019 fourth quarter and full year ended April 27, 2019.

Fiscal 2019 full year versus Fiscal 2018 full year:

• Consolidated sales for the full fiscal 2019 year increased 10.2% to $1.75 billion

  • Delivered same-store sales for the company-owned Retail segment increased 5.7%
  • Written same-store sales for the 353-store La-Z-Boy Furniture Galleries® network, including Canada, increased 1.8% 
    -- Written same-store sales for the U.S. network of 318 stores increased 3.2%

• Consolidated operating income:

  • GAAP: $129.7 million versus $129.4 million
  • Non-GAAP*: $136.6 million versus $130.3 million

• Consolidated operating margin:

  • GAAP: 7.4% versus 8.2%
  • Non-GAAP*:  7.8% versus 8.2%

• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):

  • GAAP: $1.44 versus $1.67
  • Non-GAAP*: $2.14 versus $1.68, with fiscal 2019 excluding a non-cash charge of $0.58 per share for the termination of the company’s defined benefit pension plan and a charge of $0.12 per share for purchase accounting;  Fiscal 2018 excluded $0.01 per share for purchase accounting

• Cash generated from operating activities increased 30% to $151 million

Fiscal 2019 fourth quarter versus Fiscal 2018 fourth quarter:

• Consolidated sales for the fourth quarter increased 8.0% to $453.8 million

  • Delivered same-store sales for the company-owned Retail segment increased 8.0%
  • Written same-store sales for the 353-store La-Z-Boy Furniture Galleries® network, including Canada, increased 0.8% 
    -- Written same-store sales for the U.S. network of 318 stores increased 2.5%

• Consolidated operating income:

  • GAAP: $37.2 million versus $45.7 million
  • Non-GAAP*: $38.9 million versus $45.9 million

• Consolidated operating margin:

  • GAAP: 8.2% versus 10.9%
  • Non-GAAP*: 8.6% versus 10.9%

• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):

  • GAAP: $0.03 versus $0.72
  • Non-GAAP*:  $0.64 versus $0.72, with fiscal 2019 Q4 excluding a non-cash charge of $0.58 per share for the termination of the company’s defined benefit pension plan and a charge of $0.03 per share for purchase accounting

• Cash generated from operating activities increased 141% to $59 million

Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy, said, “We delivered solid performance for fiscal 2019.  Sales increased 10% reflecting both organic growth and our acquisitions, and operating margins across our established businesses were solid.  We generated robust cash from operating activities, returned a combined total of $46 million to shareholders through share purchases and an increased dividend, and funded $48­­ million in capital expenditures to position our operations for long-term growth. We also solidified our position in the e-commerce space with the acquisition of Joybird and enhanced an already successful retail platform with the purchase of the Arizona-based La-Z-Boy Furniture Galleries® stores.”

Commenting on the fourth quarter, Darrow stated: “We were pleased with the excellent sales and operating results for our company-owned Retail segment.  However, sales declined in our wholesale Upholstery and Casegoods segments, consistent with a slow start to the calendar year across the North American retail home furnishings landscape. Given our fixed costs, the decline in volume translated to a direct impact to operating margins for our wholesale businesses in the fourth quarter. Additionally, our Canadian business has been particularly challenged due to a variety of factors, including weakening exchange rates and the retaliatory tariff on finished goods coming from the U.S., which was lifted in May.”

Consolidated sales in the fourth quarter of fiscal 2019 increased 8.0% to $453.8 million, driven by strong Retail performance, which included the acquired Arizona-based La-Z-Boy Furniture Galleries® stores, and the acquisition of Joybird. Consolidated GAAP operating margin was 8.2% versus 10.9% in the prior-year quarter.  Excluding purchase accounting charges, Non-GAAP operating margin was 8.6% in the current-year quarter versus 10.9% in last year’s fourth quarter. The fiscal 2019 fourth quarter included increased incentive compensation costs that were 170 basis points higher than the prior year  and a 40 basis point negative impact relating to changes in employee benefits policies. As expected, operating margin in the fourth quarter of fiscal 2019 also reflects a 120 basis point drag due to the acquisition of Joybird and growth of our Retail segment, which caused 310 basis points higher SG&A, partly offset by a higher gross margin. 

For the fourth quarter, sales in the company’s Upholstery segment decreased 1.2% to $323.3 million and GAAP operating margin was 11.5% compared with 12.8% in last year’s fourth quarter.  Non-GAAP operating margin was 11.6% in the current-year quarter versus 12.8% in last year’s fourth quarter, reflecting a decline in units and a change in product mix. In the Casegoods segment, sales decreased 12.9% to $26.6 million in the fiscal 2019 fourth quarter and GAAP operating margin was 9.1% compared with 9.2% in the prior-year period.

Sales in the Retail segment increased 24.9% to $151.9 million in the fourth quarter of fiscal 2019 on growth for the base stores and $22.2 million of sales from recent acquisitions. On the core base of 139 stores included in last year’s fourth quarter, better execution at the store level drove a delivered same-store sales increase of 8.0%.  GAAP operating margin for the Retail segment improved to 8.4% from 6.6% in last year’s fourth quarter, and Non-GAAP operating margin was 8.5% in the current-year quarter compared with 6.6% in last year’s fourth quarter.  Sales growth, a higher average ticket, and the recently acquired Arizona stores, which are the best performing stores across the La-Z-Boy Furniture Galleries® network, drove improved operating performance. 

GAAP EPS was $0.03 for the fiscal 2019 fourth quarter versus $0.72 in the prior-year quarter. Non-GAAP EPS was $0.64 versus $0.72 in last year’s fourth quarter, with the fiscal 2019 fourth quarter excluding a charge of $0.03 per share for purchase accounting and a non-cash charge of $0.58 per share for the termination of the company’s defined benefit pension plan. The fiscal 2019 results also include charges of $0.13 per share for higher incentive compensation, and $0.03 per share for changes in employee benefits.  Results for the fourth quarter of fiscal 2018 included a $0.06 per share benefit related to tax reform.

Balance Sheet and Cash Flow

During the fourth quarter, the company generated $59.3 million in cash from operating activities. La-Z-Boy ended the fiscal 2019 year with $130 million in cash and cash equivalents, $31.5 million in investments to enhance returns on cash, and $2 million in restricted cash. In fiscal 2019, the company invested $48.4 million in the business through capital expenditures, paid $23.5 million in dividends, and spent $23.0 million purchasing 0.8 million shares of stock, including 0.2 million in the fourth quarter, in the open market under its existing authorized share purchase program, leaving 5.9 million shares of purchase availability in the program. La-Z-Boy repaid the remaining $20 million of borrowings outstanding under its revolving line of credit during the fourth quarter. The credit line borrowings were used to fund a portion of the acquisition payments made during the second quarter.

Outlook

Darrow concluded, “As noted in our pre-release, the first calendar quarter was off to a slow start across the home furnishings industry and, with the hangover of tariffs and geopolitical uncertainty, it is unclear if these business conditions will continue further into our fiscal 2020 year.  However, we believe the performance of the La-Z-Boy Furniture Galleries® store network and our Retail segment demonstrate the strength of the La-Z-Boy brand in this environment.  Moving forward, our healthy balance sheet will enable us to continue to invest to drive growth across the business and capitalize on our strong brands, multi-channel distribution network, and world-class supply chain capabilities. And, with strategic growth initiatives in place, we believe there are continued growth opportunities for La-Z-Boy and are confident we are well positioned within the industry to deliver strong long-term performance.”

*For the full fiscal 2019 year, Non-GAAP amounts exclude pre-tax purchase accounting charges totaling $7.5 million, or $0.12 per diluted share, with $6.9 million included in operating income and $0.6 million included in interest expense.  Also excluded is a non-cash pre-tax charge of $32.7 million, or $0.58 per diluted share, related to the termination of the company’s defined benefit pension plan. Non-GAAP amounts for the full fiscal 2018 year exclude pre-tax purchase accounting charges of $0.9 million, or $0.01 per diluted share, all included in operating income.

*Non-GAAP amounts for the fourth quarter of fiscal 2019 exclude pre-tax purchase accounting charges totaling $2.0 million, or $0.03 per diluted share, with $1.8 million included in operating income and $0.2 million included in interest expense. Also excluded is a non-cash pre-tax charge of $32.7 million, or $0.58 per diluted share, related to the termination of the company’s defined benefit pension plan. Non-GAAP amounts for the fourth quarter of fiscal 2018 exclude pre-tax purchase accounting charges of $0.2 million, all included in operating income, which did not impact EPS for the period. 

Please refer to the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” for detailed information on calculating Non-GAAP measures used in this press release and a reconciliation to the applicable GAAP measure.

Conference Call

La-Z-Boy will hold a conference call with the investment community on Wednesday, June 19, 2019, at 8:30 a.m. eastern time. The toll-free dial-in number is 844.602.0380; international callers may use 862.298.0970. 

The call will be webcast live, with corresponding slides, and archived on the Internet.  It will be available at https://lazboy.gcs-web.com/. A telephone replay will be available for a week following the call. This replay will be accessible to callers from the U.S. and Canada at 877.481.4010 and to international callers at 919.882.2331. Enter Replay Passcode: 48727. The webcast replay will be available for one year.

Forward-looking Information

This news release contains, and oral statements made from time to time by representatives of La‑Z‑Boy may contain, “forward-looking statements.” With respect to all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 

Actual results could differ materially from those we anticipate or project due to a number of factors, including: (a) changes in consumer confidence and demographics; (b) the possibility of a recession; (c) changes in the real estate and credit markets and their effects on our customers, consumers and suppliers; (d) international political unrest, terrorism or war; (e) volatility in energy and other commodities prices; (f) the impact of logistics on imports and exports; (g) tax rate, interest rate, and currency exchange rate changes; (h) changes in the stock market impacting our profitability and our effective tax rate; (i) operating factors, such as supply, labor or distribution disruptions (e.g. port strikes); (j) changes in legislation, including the tax code, or changes in the domestic or international regulatory environment or trade policies, including new or increased duties, tariffs, retaliatory tariffs, trade limitations and termination or renegotiation of bilateral and multilateral trade agreements impacting our business; (k) adoption of new accounting principles; (l) fires, severe weather or other natural events such as hurricanes, earthquakes, flooding, tornadoes and tsunamis; (m) our ability to procure, transport or import, or material increases to the cost of transporting or importing, fabric rolls, leather hides or cut-and-sewn fabric and leather sets domestically or abroad; (n) information technology conversions or system failures and our ability to recover from a system failure; (o) effects of our brand awareness and marketing programs; (p) the discovery of defects in our products resulting in delays in manufacturing, recall campaigns, reputational damage, or increased warranty costs; (q) litigation arising out of alleged defects in our products; (r) unusual or significant litigation; (s) our ability to locate new La-Z-Boy Furniture Galleries® stores (or store owners) and negotiate favorable lease terms for new or existing locations; (t) the ability to increase volume through our e-commerce initiatives; (u) the impact of potential goodwill or intangible asset impairments; and (v) those matters discussed in Item 1A of our fiscal 2019 Annual Report on Form 10-K and other factors identified from time to time in our reports filed with the Securities and Exchange Commission  (the “SEC”). We undertake no obligation to update or revise any forward-looking statements, whether to reflect new information or new developments or for any other reason.

Additional Information

This news release is just one part of La-Z-Boy’s financial disclosures and should be read in conjunction with other information filed with the Securities and Exchange Commission, which is available at: https://lazboy.gcs-web.com/financial-information/sec-filings. Investors and others wishing to be notified of future La-Z-Boy news releases, SEC filings and quarterly investor conference calls may sign up at:  https://lazboy.gcs-web.com/.

Background Information

La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The La-Z-Boy Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew®, Hammary®, and Kincaid®. The company-owned Retail segment includes 156 of the 353 La-Z-Boy Furniture Galleries® stores.  Joybird is an e-commerce retailer and manufacturer of upholstered furniture.

The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 353 stand-alone La-Z-Boy Furniture Galleries® stores and 550 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at http://www.la-z-boy.com/.

Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), this press release also includes Non-GAAP financial measures. Management uses these Non-GAAP financial measures when assessing our ongoing performance. This press release contains references to Non-GAAP operating income, Non-GAAP operating margin, Non-GAAP income before income taxes, Non-GAAP net income attributable to La-Z-Boy Incorporated and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share, each of which excludes purchase accounting charges. These purchase accounting charges include the amortization of intangible assets, incremental expense upon the sale of inventory acquired at fair value, amortization of employee retention agreements, fair value adjustments of future cash payments recorded as interest expense, and adjustments to the fair value of contingent consideration. Additionally, these Non-GAAP measures for the fiscal 2019 periods exclude the non-cash charge for the termination of the company’s defined benefit pension plan. These Non-GAAP financial measures are not meant to be considered superior to or a substitute for La-Z-Boy Incorporated’s results of operations prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. Reconciliations of such Non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables.

Management believes that presenting certain Non-GAAP financial measures excluding purchase accounting charges and the non-cash charge for the termination of the company’s defined benefit pension plan will help investors understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. Management uses these Non-GAAP measures to assess the company’s operating and financial performance, and excludes purchase accounting charges because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions consummated. While the company has a history of acquisition activity, it does not acquire businesses on a predictable cycle, and the impact of purchase accounting charges is unique to each acquisition and can vary significantly from acquisition to acquisition. Exclusion of these charges facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. Management also excludes the non-cash charge for the termination of the company’s defined benefit pension plan when assessing the company’s operating and financial performance due to the one-time nature of the transaction. Where applicable, the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” tables present the excluded items net of tax calculated using the effective tax rate from operations for the period in which the adjustment is presented, except for the non-cash pension termination charge, which had a specific tax impact due to the one-time nature of the transaction. 

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

    Unaudited For the Fiscal
Quarter Ended
  Unaudited For the Fiscal
Year Ended
 
(Amounts in thousands, except per share data)   4/27/2019   4/28/2018   4/27/2019   4/28/2018  
Sales   $453,791   $420,025   $1,745,401   $1,583,947  
Cost of sales     264,018     253,831     1,042,831     961,200  
Gross profit     189,773     166,194     702,570     622,747  
Selling, general and administrative expense     152,602     120,487     572,896     493,378  
Operating income     37,171     45,707     129,674     129,369  
Interest expense     (399 )   (108 )   (1,542 )   (538 )
Interest income     569     546     2,103     1,709  
Pension termination charge     (32,671 )       (32,671 )    
Other expense, net     (191 )   (1,379 )   (2,237 )   (1,650 )
Income before income taxes     4,479     44,766     95,327     128,890  
Income tax expense     2,812     10,406     25,186     47,295  
Net income     1,667     34,360     70,141     81,595  
Net income attributable to noncontrolling interests     (139 )   (150 )   (1,567 )   (729 )
Net income attributable to La-Z-Boy Incorporated   $1,528   $34,210   $68,574   $80,866  
                   
Basic weighted average common shares     46,889     46,928     46,828     47,621  
Basic net income attributable to La-Z-Boy Incorporated per share   $0.03   $0.73   $1.46   $1.69  
                   
Diluted weighted average common shares     47,369     47,472     47,333     48,135  
Diluted net income attributable to La-Z-Boy Incorporated per share   $0.03   $0.72   $1.44   $1.67  
                   


LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET

    Unaudited  
 (Amounts in thousands, except par value)   4/27/2019   4/28/2018  
Current assets          
Cash and equivalents   $129,819   $134,515  
Restricted cash     1,968     2,356  
Receivables, net of allowance of $2,180 at 4/27/19 and $1,956 at 4/28/18     143,288     154,055  
Inventories, net     196,899     184,841  
Other current assets     69,144     42,451  
Total current assets     541,118     518,218  
Property, plant and equipment, net     200,523     180,882  
Goodwill     185,867     75,254  
Other intangible assets, net     29,907     18,190  
Deferred income taxes – long-term     20,670     21,265  
Other long-term assets, net     81,705     79,158  
Total assets   $1,059,790   $892,967  
           
Current liabilities          
Current portion of long-term debt   $180   $223  
Accounts payable     65,365     62,403  
Accrued expenses and other current liabilities     173,091     118,721  
Total current liabilities     238,636     181,347  
Long-term debt     19     199  
Other long-term liabilities     124,159     86,205  
Contingencies and commitments          
Shareholders' equity          
Preferred shares – 5,000 authorized; none issued          
Common shares, $1 par value – 150,000 authorized; 46,955 outstanding at 4/27/19 and 46,788 outstanding at 4/28/18     46,955     46,788  
Capital in excess of par value     313,168     298,948  
Retained earnings     325,847     291,644  
Accumulated other comprehensive loss     (3,462 )   (25,199 )
Total La-Z-Boy Incorporated shareholders’ equity     682,508     612,181  
Noncontrolling interests     14,468     13,035  
Total equity     696,976     625,216  
Total liabilities and equity   $1,059,790   $892,967  
           


LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS

    Unaudited For the Fiscal Year Ended  
(Amounts in thousands)   4/27/2019   4/28/2018  
Cash flows from operating activities          
Net income   $70,141   $81,595  
Adjustments to reconcile net income to cash provided by operating activities          
Gain on disposal of assets     (325 )   (2,108 )
Gain on conversion of investment         (2,204 )
Gain on sale of investments     (656 )   (770 )
Change in deferred taxes     (1,668 )   17,261  
Change in provision for doubtful accounts     502     276  
Depreciation and amortization     31,147     31,767  
Stock-based compensation expense     10,981     9,474  
Pension termination charge     32,671      
Pension plan contributions     (7,000 )   (2,000 )
Change in receivables     7,195     (2,801 )
Change in inventories     3,135     (8,009 )
Change in other assets     (7,737 )   (3,245 )
Change in accounts payable     (2,388 )   6,602  
Change in other liabilities     14,747     (10,088 )
Net cash provided by operating activities     150,745     115,750  
Cash flows from investing activities          
Proceeds from disposals of assets     1,941     1,440  
Proceeds from property insurance     184     2,087  
Capital expenditures     (48,433 )   (36,337 )
Purchases of investments     (20,698 )   (28,593 )
Proceeds from sales of investments     20,944     22,674  
Acquisitions, net of cash acquired     (76,505 )   (16,495 )
Net cash used for investing activities     (122,567 )   (55,224 )
Cash flows from financing activities          
Payments on debt     (223 )   (262 )
Payments for debt issuance costs         (231 )
Stock issued for stock and employee benefit plans, net of shares withheld for taxes     13,901     2,977  
Purchases of common stock     (22,957 )   (56,730 )
Dividends paid     (23,508 )   (22,009 )
Net cash used for financing activities     (32,787 )   (76,255 )
Effect of exchange rate changes on cash and equivalents     (475 )   1,741  
Change in cash, cash equivalents and restricted cash     (5,084 )   (13,988 )
Cash, cash equivalents and restricted cash at beginning of period     136,871     150,859  
Cash, cash equivalents and restricted cash at end of period   $131,787   $136,871  
           
Supplemental disclosure of non-cash investing activities          
Capital expenditures included in accounts payable   $3,250   $5,667  


LA-Z-BOY INCORPORATED
SEGMENT INFORMATION

    Unaudited For the Fiscal
Quarter Ended
  Unaudited For the Fiscal
Year Ended
 
 (Amounts in thousands)   4/27/2019   4/28/2018   4/27/2019   4/28/2018  
Sales                  
Upholstery segment:                  
Sales to external customers   $257,388   $270,668   $1,016,957   $1,010,097  
Intersegment sales     65,915     56,569     251,285     217,266  
Upholstery segment sales     323,303     327,237     1,268,242     1,227,363  
                   
Casegoods segment:                  
Sales to external customers     21,903     27,098     95,677     95,919  
Intersegment sales     4,742     3,505     18,796     15,474  
Casegoods segment sales     26,645     30,603     114,473     111,393  
                   
Retail segment sales     151,870     121,545     570,201     474,613  
                   
Corporate and Other:                  
Sales to external customers     22,630     714     62,566     3,318  
Intersegment sales     2,290     2,582     11,446     9,421  
Corporate and Other sales     24,920     3,296     74,012     12,739  
                   
Eliminations     (72,947 )   (62,656 )   (281,527 )   (242,161 )
Consolidated sales   $453,791   $420,025   $1,745,401   $1,583,947  
                   
Operating Income (Loss)                    
Upholstery segment   $37,304   $41,927     $127,906
  $130,349  
Casegoods segment     2,416     2,808     12,589     11,641  
Retail segment     12,743     7,963     37,922     20,709  
Corporate and Other     (15,292 )   (6,991 )   (48,743 )   (33,330 )
Consolidated operating income   $37,171   $45,707     $129,674   $129,369  
                   



LA-Z-BOY INCORPORATED
UNAUDITED QUARTERLY FINANCIAL DATA

(Amounts in thousands, except per share data)   (13 weeks)   (13 weeks)   (13 weeks)   (13 weeks)  
Fiscal Quarter Ended   7/28/2018   10/27/2018   1/26/2019   4/27/2019  
Sales   $384,695   $439,333   $467,582   $453,791  
Cost of sales     236,173     264,928     277,712     264,018  
Gross profit     148,522     174,405     189,870     189,773  
Selling, general and administrative expense     125,362     145,905     149,027     152,602  
Operating income     23,160     28,500     40,843     37,171  
Interest expense     (104 )   (501 )   (538 )   (399 )
Interest income     602     392     540     569  
Pension termination charge                 (32,671 )
Other income (expense), net     892     (1,997 )   (941 )   (191 )
Income before income taxes     24,550     26,394     39,904     4,479  
Income tax expense     5,599     6,045     10,730     2,812  
Net income     18,951     20,349     29,174     1,667  
Net income attributable to
 noncontrolling interests
    (648 )   (337 )   (443 )   (139 )
Net income attributable to La-Z-Boy
 Incorporated
  $18,303   $20,012   $28,731   $1,528  
                   
Diluted weighted average common shares     47,161     47,259     47,091     47,369  
Diluted net income attributable to
  La-Z-Boy Incorporated per share
  $0.39   $0.42   $0.61   $0.03  
                   
Dividends declared per share   $0.12   $0.12   $0.13   $0.13  


LA-Z-BOY INCORPORATED
UNAUDITED QUARTERLY FINANCIAL DATA

(Amounts in thousands, except per share data)   (13 weeks)   (13 weeks)   (13 weeks)   (13 weeks)  
Fiscal Quarter Ended   7/29/2017   10/28/2017   1/27/2018   4/28/2018  
Sales   $357,079   $393,205   $413,638   $420,025  
Cost of sales     217,976     238,253     251,140     253,831  
Gross profit     139,103     154,952     162,498     166,194  
Selling, general and administrative expense     122,805     120,683     129,403     120,487  
Operating income     16,298     34,269     33,095     45,707  
Interest expense     (157 )   (160 )   (113 )   (108 )
Interest income     343     376     444     546  
Other income (expense), net     1,749     (926 )   (1,094 )   (1,379 )
Income before income taxes     18,233     33,559     32,332     44,766  
Income tax expense     6,489     10,353     20,047     10,406  
Net income     11,744     23,206     12,285     34,360  
Net income attributable to
 noncontrolling interests
    (93 )   (310 )   (176 )   (150 )
Net income attributable to La-Z-Boy
 Incorporated
  $11,651   $22,896   $12,109   $34,210  
                   
Diluted weighted average common shares     48,846     48,297     47,757     47,472  
                   
Diluted net income attributable to
  La-Z-Boy Incorporated per share
  $0.24   $0.47   $0.25   $0.72  
                   
Dividends declared per share   $0.11   $0.11   $0.12   $0.12  
                   

LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES


 
  Unaudited for the Fiscal
Quarter Ended
  Unaudited for the Fiscal
Year Ended
 
 (Amounts in thousands, except per share data)   4/27/2019   4/28/2018   4/27/2019   4/28/2018  
                   
GAAP gross profit   $189,773   $166,194   $702,570   $622,747  
  Add back: Purchase accounting charges –
  incremental expense upon the sale of inventory
  acquired at fair value
    175     99     3,086     474  
Non-GAAP gross profit   $189,948   $166,293   $705,656   $623,221  
                   
GAAP SG&A   $152,602   $120,487   $572,896   $493,378  
  Less: Purchase accounting charges – amortization of 
  intangible assets and retention agreements
     (1,594 )    (106 )    (3,831 )    (449 )
Non-GAAP SG&A   $151,008   $120,381   $569,065   $492,929  
                   
GAAP operating income   $37,171   $45,707   $129,674   $129,369  
  Add back: Purchase accounting charges     1,769     205     6,917     923  
Non-GAAP operating income   $38,940   $45,912   $136,591   $130,292  
                   
GAAP income before income taxes   $4,479   $44,766   $95,327   $128,890  
  Add back: Purchase accounting charges recorded as
  part of gross profit, SG&A, and interest expense
    1,959     205     7,486     923  
  Add back: Pension termination charge     32,671         32,671      
Non-GAAP income before income taxes   $39,109   $44,971   $135,484   $129,813  
                   
GAAP net income attributable to La-Z-Boy
  Incorporated
  $1,528   $34,210   $68,574   $80,866  
  Add back: Purchase accounting charges
  recorded as part of gross profit, SG&A, and
  interest expense
    1,959     205  

 
  7,486     923  
  Add back: Pension termination charge      32,671         32,671      
  Less: Tax effect of purchase accounting and pension
  termination charges
   
(5,915

)
   
(24

)
 
(7,275
 
)
 
(339

)
Non-GAAP net income attributable to La-Z-Boy
  Incorporated
  $30,243   $34,391   $101,456   $81,450  
                   
GAAP net income attributable to La-Z-Boy
  Incorporated per diluted share
  $0.03   $0.72   $1.44   $1.67  
  Add back: Purchase accounting charges, net of tax,
  per share
    0.03         0.12      0.01  
  Add back: Pension termination charge, net of tax,
  per share
    0.58         0.58      
Non-GAAP net income attributable to La-Z-
  Boy Incorporated per diluted share
  $0.64   $0.72   $2.14   $1.68  
                   


LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
SEGMENT INFORMATION

    Unaudited for the Fiscal Quarter Ended  
 (Amounts in thousands)   4/27/2019   % of sales   4/28/2018   % of sales  
                   
GAAP operating income (loss)                  
Upholstery segment   $37,304   11.5 %   $41,927   12.8 %  
Casegoods segment     2,416   9.1 %     2,808   9.2 %  
Retail segment     12,743   8.4 %     7,963   6.6 %  
Corporate and Other     (15,292 ) N/M       (6,991 ) N/M    
GAAP Consolidated operating income   $37,171   8.2 %   $45,707   10.9 %  
                   
Purchase accounting charges affecting operating income                  
Upholstery segment   $57       $106      
Casegoods segment                  
Retail segment     175         99      
Corporate and Other     1,537              
Consolidated purchase accounting charges affecting
  operating income
  $1,769       $205      
                   
Non-GAAP operating income (loss)                  
Upholstery segment   $37,361   11.6 %   $42,033   12.8 %  
Casegoods segment     2,416   9.1 %     2,808   9.2 %  
Retail segment     12,918   8.5 %     8,062   6.6 %  
Corporate and Other     (13,755 ) N/M       (6,991 ) N/M    
Non-GAAP Consolidated operating income   $38,940   8.6 %   $45,912   10.9 %  
                   
                   
    Unaudited for the Fiscal Year Ended  
(Amounts in thousands)   4/27/2019   % of sales   4/28/2018   % of sales  
                   
GAAP operating income (loss)                  
Upholstery segment   $127,906   10.1 %   $130,349   10.6 %  
Casegoods segment     12,589   11.0 %     11,641   10.5 %  
Retail segment     37,922   6.7 %     20,709   4.4 %  
Corporate and Other     (48,743 ) N/M       (33,330 ) N/M    
GAAP Consolidated operating income   $129,674   7.4 %   $129,369   8.2 %  
                   
Purchase accounting charges affecting operating income                  
Upholstery segment   $20       $222      
Casegoods segment                  
Retail segment     1,683         701      
Corporate and Other     5,214              
Consolidated purchase accounting charges affecting
  operating income
  $6,917       $923      
                   
Non-GAAP operating income (loss)                  
Upholstery segment   $127,926   10.1 %   $130,571   10.6 %  
Casegoods segment     12,589   11.0 %     11,641   10.5 %  
Retail segment     39,605   6.9 %     21,410   4.5 %  
Corporate and Other     (43,529 ) N/M       (33,330 ) N/M    
Non-GAAP Consolidated operating income   $136,591   7.8 %   $130,292   8.2 %  
N/M – Not Meaningful                  
                   

Contact:
Kathy Liebmann
(734) 241-2438 
kathy.liebmann@la-z-boy.com

 

La-Z-Boy Incorporated.jpg

Source: La-Z-Boy Incorporated