UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549-1004

 

FORM 8-K

 

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

 

June 18, 2019
(Date of Report (Date of Earliest Event Reported))

 

LA-Z-BOY INCORPORATED

(Exact name of registrant as specified in its charter)

 

MICHIGAN

 

1-9656

 

38-0751137

(State or other jurisdiction of

 

(Commission

 

(IRS Employer

incorporation)

 

File Number)

 

Identification Number)

 

One La-Z-Boy Drive, Monroe, Michigan

 

48162-5138

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code (734) 242-1444

 

None

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

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. o

 

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 Shares, $1.00 par value

 

LZB

 

New York Stock Exchange

 

 

 


 

Item 2.02  Results of Operations and Financial Condition

 

On June 18, 2019, La-Z-Boy Incorporated issued a news release to report the company’s financial results for the fiscal year ended April 27, 2019. A copy of the news release is attached to this current report on Form 8-K as Exhibit 99.1. Exhibit 99.2 contains unaudited financial data.

 

Item 7.01  Regulation FD Disclosure

 

The information in Item 2.02 of this report and the related exhibits (Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference in any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01  Financial Statements and Exhibits

 

(d)                    The following exhibits are furnished as part of this report:

 

 

 

Description

99.1

 

News Release Dated June 18, 2019

99.2

 

Unaudited financial schedules

 

2


 

SIGNATURE

 

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 hereunto duly authorized.

 

 

LA-Z-BOY INCORPORATED

 

(Registrant)

 

Date: June 18, 2019

 

 

 

BY:

/s/ Lindsay A. Barnes

 

 

Lindsay A. Barnes

 

 

Vice President, Corporate Controller and Chief Accounting Officer

 

3


Exhibit 99.1

 

 

NEWS RELEASE

 

Contact:

Kathy Liebmann

(734) 241-2438

kathy.liebmann@la-z-boy.com

 

LA-Z-BOY REPORTS STRONG FISCAL 2019 PERFORMANCE

 

MONROE, Mich., June 18, 2019—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.

 


Exhibit 99.2

 

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 charge

 

(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