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Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 24, 2020
or
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 1-9656
LA-Z-BOY INCORPORATED
(Exact name of registrant as specified in its charter)
Michigan
38-0751137
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
One La-Z-Boy Drive,Monroe,Michigan48162-5138
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (734) 242-1444
None
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading  Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 Par ValueLZBNew York Stock Exchange
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 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 such files).
Yes  ☒   No ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller 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  ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
ClassOutstanding at November 10, 2020
Common Stock, $1.00 Par Value46,144,183


Table of Contents
LA-Z-BOY INCORPORATED
FORM 10-Q SECOND QUARTER OF FISCAL 2021
TABLE OF CONTENTS
Page
Number
2

Table of Contents
PART I - FINANCIAL INFORMATION (UNAUDITED)
ITEM 1. FINANCIAL STATEMENTS
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
Quarter EndedSix Months Ended
(Unaudited, amounts in thousands, except per share data)10/24/2010/26/1910/24/2010/26/19
Sales$459,120 $447,212 $744,578 $860,845 
Cost of sales258,565 264,823 427,660 510,744 
Gross profit200,555 182,389 316,918 350,101 
Selling, general and administrative expense152,616 152,788 264,654 297,078 
Operating income 47,939 29,601 52,264 53,023 
Interest expense(346)(308)(805)(626)
Interest income123 522 617 1,249 
Other income (expense), net(11)1,368 1,463 608 
Income before income taxes47,705 31,183 53,539 54,254 
Income tax expense12,401 8,279 13,556 13,362 
Net income35,304 22,904 39,983 40,892 
Net income attributable to noncontrolling interests(369)(311)(250)(230)
Net income attributable to La-Z-Boy Incorporated$34,935 $22,593 $39,733 $40,662 
Basic weighted average common shares46,023 46,551 45,966 46,686 
Basic net income attributable to La-Z-Boy Incorporated per share$0.76 $0.48 $0.86 $0.87 
Diluted weighted average common shares46,323 46,879 46,167 47,010 
Diluted net income attributable to La-Z-Boy Incorporated per share$0.75 $0.48 $0.86 $0.86 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
3

Table of Contents
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarter EndedSix Months Ended
(Unaudited, amounts in thousands)10/24/2010/26/1910/24/2010/26/19
Net income$35,304 $22,904 $39,983 $40,892 
Other comprehensive income (loss)
Currency translation adjustment1,354 1,526 3,465 2,140 
Change in fair value of cash flow hedges, net of tax 6  10 
Net unrealized gain (loss) on marketable securities, net of tax(65)46 (23)154 
Net pension amortization, net of tax65 41 130 82 
Total other comprehensive income 1,354 1,619 3,572 2,386 
Total comprehensive income before allocation to noncontrolling interests36,658 24,523 43,555 43,278 
Comprehensive income attributable to noncontrolling interests(448)(671)(827)(1,076)
Comprehensive income attributable to La-Z-Boy Incorporated$36,210 $23,852 $42,728 $42,202 
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
4

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LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
(Unaudited, amounts in thousands, except par value)10/24/204/25/20
Current assets
Cash and equivalents$350,949 $261,553 
Restricted cash2,478 1,975 
Receivables, net of allowance of $5,890 at 10/24/20 and $7,541 at 4/25/20
128,324 99,351 
Inventories, net188,652 181,643 
Other current assets125,999 81,804 
Total current assets796,402 626,326 
Property, plant and equipment, net211,688 214,767 
Goodwill174,834 161,017 
Other intangible assets, net30,647 28,653 
Deferred income taxes – long-term18,990 20,839 
Right of use lease assets341,765 318,647 
Other long-term assets, net76,017 64,640 
Total assets$1,650,343 $1,434,889 
Current liabilities
Accounts payable$89,260 $55,511 
Short-term borrowings 75,000 
Lease liabilities, current65,758 64,376 
Accrued expenses and other current liabilities335,294 155,282 
Total current liabilities490,312 350,169 
Lease liabilities, long-term294,601 270,162 
Other long-term liabilities110,781 98,252 
Shareholders' equity
Preferred shares – 5,000 authorized; none issued
  
Common shares, $1.00 par value – 150,000 authorized; 46,113 outstanding at 10/24/20 and 45,857 outstanding at 4/25/20
46,113 45,857 
Capital in excess of par value326,182 318,215 
Retained earnings378,438 343,633 
Accumulated other comprehensive loss(3,957)(6,952)
Total La-Z-Boy Incorporated shareholders' equity746,776 700,753 
Noncontrolling interests7,873 15,553 
Total equity754,649 716,306 
Total liabilities and equity$1,650,343 $1,434,889 


The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended
(Unaudited, amounts in thousands)10/24/2010/26/19
Cash flows from operating activities
Net income$39,983 $40,892 
Adjustments to reconcile net income to cash provided by (used for) operating activities
(Gain)/loss on disposal of assets140 (283)
Gain on sale of investments(284)(99)
Change in deferred taxes1,849 273 
Provision for doubtful accounts(1,568)350 
Depreciation and amortization16,351 14,936 
Equity-based compensation expense6,167 4,707 
Change in receivables(28,949)(12,722)
Change in inventories(3,511)(7,645)
Change in right-of-use lease assets35,137 32,323 
Change in other assets(1,926)(4,088)
Change in payables33,236 3,854 
Change in lease liabilities(32,422)(32,665)
Change in other liabilities131,507 13,869 
Net cash provided by operating activities195,710 53,702 
Cash flows from investing activities
Proceeds from disposals of assets21 88 
Proceeds from insurance 1,018 
Capital expenditures(15,442)(22,949)
Purchases of investments(17,649)(17,798)
Proceeds from sales of investments19,470 13,171 
Acquisitions(7,783)(5,875)
Net cash used for investing activities(21,383)(32,345)
Cash flows from financing activities
Payments on debt and finance lease liabilities(75,013)(95)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes364 571 
Purchases of common stock (23,167)
Dividends paid to shareholders(3,216)(12,151)
Dividends paid to minority interest joint venture partners (1)(8,507) 
Net cash used for financing activities(86,372)(34,842)
Effect of exchange rate changes on cash and equivalents1,944 1,239 
Change in cash, cash equivalents and restricted cash89,899 (12,246)
Cash, cash equivalents and restricted cash at beginning of period263,528 131,787 
Cash, cash equivalents and restricted cash at end of period$353,427 $119,541 
Supplemental disclosure of non-cash investing activities
Capital expenditures included in payables$3,769 $5,805 
(1)Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Unaudited, amounts in thousands)Common
Shares
Capital in Excess of
Par Value
Retained
Earnings
Accumulated Other
Comprehensive Income
(Loss)
Non-Controlling
Interests
Total
At April 25, 2020$45,857 $318,215 $343,633 $(6,952)$15,553 $716,306 
Net income (loss)— — 4,798 — (119)4,679 
Other comprehensive income— — — 1,720 498 2,218 
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax132 (195)(1,686)— — (1,749)
Stock option and restricted stock expense— 2,047 — — — 2,047 
Dividends declared and paid (1)— — 5 — (8,507)(8,502)
At July 25, 2020$45,989 $320,067 $346,750 $(5,232)$7,425 $714,999 
Net income— — 34,935 — 369 35,304 
Other comprehensive income— — — 1,275 79 1,354 
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax124 1,995 (6)— — 2,113 
Stock option and restricted stock expense— 4,120 — — — 4,120 
Dividends declared and paid ($0.07/share)
— — (3,221)— — (3,221)
Dividends declared not paid ($0.07/share)
— — (20)— — (20)
At October 24, 2020$46,113 $326,182 $378,438 $(3,957)$7,873 $754,649 

(1)No dividends to shareholders were declared or paid during the first quarter of fiscal 2021; amount includes dividends forfeited from restricted stock awards previously granted. Non-controlling interests include dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.

(Unaudited, amounts in thousands)Common
Shares
Capital in Excess of
Par Value
Retained
Earnings
Accumulated Other
Comprehensive Income
(Loss)
Non-Controlling
Interests
Total
At April 27, 2019$46,955 $313,168 $325,847 $(3,462)$14,468 $696,976 
Net income (loss)— — 18,069 — (81)17,988 
Other comprehensive income— — — 281 486 767 
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax126 126 (1,669)— — (1,417)
Repurchases of 391 shares of common stock
(391)(3,762)(8,160)— — (12,313)
Stock option and restricted stock expense— 1,675 — — — 1,675 
Cumulative effect adjustment for leases, net of tax (1)— — 574 — — 574 
Reclassification of certain income tax effects (2)— — 547 (547)—  
Dividends declared and paid ($0.13/share)
— — (6,112)— — (6,112)
At July 27, 2019$46,690 $311,207 $329,096 $(3,728)$14,873 $698,138 
Net income— — 22,593 — 311 22,904 
Other comprehensive income— — — 1,260 359 1,619 
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax84 1,908 (4)— — 1,988 
Purchases of 335 shares of common stock
(335)(1,908)(8,611)— — (10,854)
Stock option and restricted stock expense— 3,032 — — — 3,032 
Dividends declared and paid ($0.13/share)
— — (6,039)— — (6,039)
Dividends declared not paid ($0.13/share)
— — (46)— — (46)
At October 26, 2019$46,439 $314,239 $336,989 $(2,468)$15,543 $710,742 

(1)Cumulative effect adjustment of deferred gains on prior sale/leaseback transactions as a result of adopting ASU 2016-02.
(2)Income tax effects of the Tax Cuts and Jobs Act are reclassified from Accumulated Other Comprehensive Income ("AOCI") to retained earnings due to the adoption of ASU 2018-02.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
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LA-Z-BOY INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1: Basis of Presentation

The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries (collectively, the "Company"). We derived the April 25, 2020, balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles, which we applied on a basis consistent with those reflected in our fiscal 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), but the information does not include all of the disclosures required by generally accepted accounting principles. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 24, 2021.

At October 24, 2020, we owned preferred shares and warrants to purchase common shares of two privately held companies, both of which are variable interest entities. We have not consolidated their results in our financial statements because we do not have the power to direct those activities that most significantly impact their economic performance and, therefore, are not the primary beneficiary.

COVID-19

As part of our continued response to the impact of COVID-19, on June 4, 2020, we announced our business realignment plan, which included the reduction of the Company's global workforce by approximately 10% across our manufacturing, retail and corporate locations, including the closure of our Newton, Mississippi upholstery manufacturing facility. In the first six months of fiscal 2021, we incurred expenses of $3.9 million associated with our business realignment plan, primarily due to severance costs and an impairment of the carrying value of the Newton manufacturing facility. In the first six months of fiscal 2021, as consumers continued to allocate more discretionary spending to home furnishings, the demand for our products has outpaced our production capacity. In response, we have added manufacturing cells at our Mexico Cut-and-Sew Center, temporarily re-activated a portion of our Newton, Mississippi upholstery manufacturing facility, and will open a leased upholstery plant, in San Luis Rio Colorado, Mexico early in the third quarter of fiscal 2021.

During the fourth quarter of fiscal 2020, in response to economic conditions resulting from COVID-19, to strengthen our financial position and maintain liquidity, we proactively borrowed $75.0 million from our revolving credit facility. Given the positive trends in cash flows during the first six months of fiscal 2021, we repaid all of the $75.0 million borrowed under our line of credit in the first and second quarters of fiscal 2021. We continue to actively manage the impact of the COVID-19 crisis and there is uncertainty regarding the impact COVID-19 will have on our financial operations in the near and long term.

Accounting pronouncements adopted in fiscal 2021

The following table summarizes Accounting Standards Updates ("ASUs") which were adopted in fiscal 2021, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.

ASUDescription
ASU 2016-13Financial Instruments – Credit losses (Topic 326): Measurement of Credit Losses on Financial Instruments
ASU 2020-04Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

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Accounting pronouncements not yet adopted

The following table summarizes accounting pronouncements which we have not yet adopted, but we believe will not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.

ASUDescriptionAdoption Date
ASU 2018-14Compensation – Retirement benefits – Defined Benefit Plans – General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit PlansFiscal 2022
ASU 2019-12Income Taxes (Topic 740): Simplifying the Accounting for Income TaxesFiscal 2022
ASU 2020-01Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815Fiscal 2022

Note 2: Acquisitions

On September 14, 2020, we completed our asset acquisition of the Seattle, Washington business that operated six independently owned La-Z-Boy Furniture Galleries® stores and one warehouse for $13.5 million, subject to customary adjustments. In the second quarter of fiscal 2021, a $2.0 million cash payment was made for the purchase with future guaranteed payments of $9.4 million to be paid over the next 36 months. This acquisition is a core part of our strategy to grow our company-owned retail business and leverage our integrated retail model where we earn a combined profit on both the wholesale and retail sales.

Prior to this acquisition, we licensed to the counterparty the exclusive right to own and operate La-Z-Boy Furniture Galleries® stores (and to use the associated trademarks and trade name) in the Seattle, Washington market, and we reacquired these rights when we consummated the transaction. The reacquired rights are indefinite-lived because our Retailer Agreements are perpetual agreements that have no specific expiration date and no renewal options. The effective settlement of these arrangements resulted in no settlement gain or loss as the contractual terms were at market. We recorded an indefinite-lived intangible asset of $2.2 million related to these reacquired rights. We also recognized $12.9 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired stores and future benefits of these synergies. For federal income tax purposes, we will amortize and appropriately deduct all of the indefinite-lived intangible assets and goodwill assets over 15 years.

The acquisition of the Seattle, Washington business was not significant to our consolidated financial statements, and, therefore, pro-forma financial information is not presented. All of our provisional purchase accounting estimates for this acquisition are based on the information and data available to us as of the time of the issuance of these financial statements, and in accordance with Accounting Standard Codification Topic 805-10-25-15, are subject to change within the first 12 months of acquisition as we have access to additional data.

Note 3: Restricted Cash

We have restricted cash on deposit with a bank as collateral for certain letters of credit. All our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature.

(Unaudited, amounts in thousands)10/24/2010/26/19
Cash and cash equivalents$350,949 $117,569 
Restricted cash2,478 1,972 
Total cash, cash equivalents and restricted cash$353,427 $119,541 
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Note 4: Inventories

A summary of inventories is as follows:

(Unaudited, amounts in thousands)10/24/204/25/20
Raw materials$91,742 $92,174 
Work in process17,759 14,064 
Finished goods100,596 96,850 
FIFO inventories210,097 203,088 
Excess of FIFO over LIFO(21,445)(21,445)
Total inventories$188,652 $181,643 

Note 5: Goodwill and Other Intangible Assets

We have goodwill on our consolidated balance sheet as follows:

Reportable Segment/UnitReporting UnitRelated Acquisition
Wholesale SegmentLa-Z-Boy United KingdomWholesale business in the United Kingdom and Ireland
Retail SegmentRetail
La-Z-Boy Furniture Galleries® stores
Corporate & Other JoybirdJoybird

The following is a roll-forward of goodwill for the six months ended October 24, 2020:

(Unaudited, amounts in thousands)Wholesale
Segment
Retail
Segment
Corporate
and Other
Total
Goodwill
Balance at April 25, 2020$11,630 $93,941 $55,446 $161,017 
Acquisitions 12,931  12,931 
Translation adjustment636 250  886 
Balance at October 24, 2020$12,266 $107,122 $55,446 $174,834 

We have intangible assets on our consolidated balance sheet as follows:

Reportable Segment/UnitIntangible AssetUseful Life
Wholesale SegmentPrimarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland
Amortizable over useful lives that do not exceed 15 years
Wholesale Segment
American Drew® trade name
Indefinite-lived
Retail Segment
Reacquired rights to own and operate La-Z-Boy Furniture Galleries® stores
Indefinite-lived
Corporate & Other
Joybird® trade name
Amortizable over eight-year useful life

The following is a roll-forward of our other intangible assets for the six months ended October 24, 2020:

(Unaudited, amounts in thousands)Indefinite-
Lived
Trade
Names
Finite-
Lived
Trade
Name
Indefinite-
Lived
Reacquired
Rights
Other
Intangible
Assets
Total
Other
Intangible
Assets
Balance at April 25, 2020$1,155 $5,003 $19,996 $2,499 $28,653 
Acquisitions  2,182  2,182 
Amortization (399) (110)(509)
Translation adjustment  187 134 321 
Balance at October 24, 2020$1,155 $4,604 $22,365 $2,523 $30,647 

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We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of each fiscal year, and more frequently if events or changes in circumstances indicate that an asset might be impaired. We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired.

Note 6: Investments
We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan, and our performance compensation retirement plan. We also hold other investments consisting of cost-basis preferred shares of two privately held start-up companies. Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet.
The following summarizes our investments:
(Unaudited, amounts in thousands)10/24/204/25/20
Short-term investments:
Marketable securities$15,905 $18,634 
Held-to-maturity investments2,531 3,337 
Total short-term investments18,436 21,971 
Long-term investments:
Marketable securities24,373 19,572 
Cost basis investments7,579 6,479 
Total long-term investments31,952 26,051 
Total investments$50,388 $48,022 
Investments to enhance returns on cash$27,224 $28,622 
Investments to fund compensation/retirement plans15,585 12,921 
Other investments7,579 6,479 
Total investments$50,388 $48,022 
The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type:
10/24/204/25/20
(Unaudited, amounts in thousands)Gross
Unrealized 
Gains
Gross
Unrealized 
Losses
Fair ValueGross
Unrealized 
Gains
Gross
Unrealized 
Losses
Fair Value
Equity securities$1,873 $ $16,224 $1,011 $(6,390)$12,692 
Fixed income206 (25)29,735 268 (56)30,213 
Other452  4,429 372  5,117 
Total securities$2,531 $(25)$50,388 $1,651 $(6,446)$48,022 
The following table summarizes sales of marketable securities:
Quarter EndedSix Months Ended
(Unaudited, amounts in thousands)10/24/2010/26/1910/24/2010/26/19
Proceeds from sales$3,292 $8,310 $17,017 $12,370 
Gross realized gains184 181 310 187 
Gross realized losses(8)(86)(26)(88)

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The following is a summary of the fair value of fixed income marketable securities, classified as available-for-sale securities, by contractual maturity:
(Unaudited, amounts in thousands)10/24/20
Within one year$14,425 
Within two to five years12,340 
Within six to ten years1,149 
Thereafter1,821 
Total $29,735 

Note 7: Accrued Expenses and Other Current Liabilities
(Unaudited, amounts in thousands)10/24/204/25/20
Payroll and other compensation$45,135 $34,980 
Accrued product warranty, current portion14,174 14,264 
Customer deposits140,707 40,721 
Deferred revenue67,882 17,086 
Other current liabilities67,396 48,231 
Accrued expenses and other current liabilities$335,294 $155,282 

The increase in customer deposits and deferred revenue was primarily driven by higher Retail segment and Joybird written sales in the first six months of fiscal 2021. Higher written sales also led to an increase in contract assets, which are included in other current assets on the consolidated balance sheet, consistent with the increase in deferred revenue. Refer to Note 11, Revenue Recognition, for additional details regarding our contract assets and contract liabilities.

Note 8: Product Warranties

We accrue an estimated liability for product warranties when we recognize revenue on the sale of warranted products. We estimate future warranty claims on new sales based on our historical claims experience and any additional anticipated future costs on previously sold products. We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs and any costs associated with delivering repaired product to our customers. Over 90% of our warranty liability relates to our Wholesale segment as we generally warrant our products against defects for one year on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames. Our Wholesale segment warranties cover labor costs relating to our parts for one year. We provide a limited lifetime warranty against defects on a majority of Joybird products, which are a part of our Corporate and Other results. For all our manufacturer warranties, the warranty period begins when the consumer receives our product. We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known.

A reconciliation of the changes in our product warranty liability is as follows:

Quarter EndedSix Months Ended
(Unaudited, amounts in thousands)10/24/2010/26/1910/24/2010/26/19
Balance as of the beginning of the period$23,123 $22,836 $23,255 $22,736 
Accruals during the period5,306 5,768 9,134 11,425 
Settlements during the period(5,491)(5,523)(9,451)(11,080)
Balance as of the end of the period (1)
$22,938 $23,081 $22,938 $23,081 

(1)$14.2 million and $14.3 million recorded in accrued expenses and other current liabilities as of October 24, 2020 and April 25, 2020, respectively, while the remainder is in included in other long-term liabilities.

We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods.
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Note 9:  Stock-Based Compensation

The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income:
Quarter EndedSix Months Ended
(Unaudited, amounts in thousands)10/24/2010/26/1910/24/2010/26/19
Equity-based awards expense$4,120 $3,032 $