La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential
furniture, today reported its operating results for the fiscal 2021
first quarter ended July 25, 2020.
Fiscal 2021 first quarter versus Fiscal
2020 first quarter:
• Consolidated sales decreased 31.0% to $285.5 million,
reflecting ongoing COVID-19 impact• Written same-store sales
for the entire La-Z-Boy Furniture Galleries® network increased
14.8%• Consolidated operating margin:
- GAAP: 1.5% versus 5.7%
- Non-GAAP(1): 3.1% versus 6.3%• Wholesale(2): 9.4%
versus 9.5%• Retail: (6.8)% versus 6.0%
• Net income attributable to La-Z-Boy Incorporated per
diluted share (“EPS”):
- GAAP: $0.10 versus $0.38
- Non-GAAP(1): $0.18 versus $0.42
• Cash generated from operating activities was $106.3
million• Cash(3) was $336.7 million at quarter end
Kurt L. Darrow, Chairman, President and Chief
Executive Officer of La-Z-Boy, said, "Our first quarter began in
May with most of our customers still closed due to COVID-19.
However, as retailers re-opened, written orders rapidly accelerated
in June and July, with consumers spending a higher percentage of
discretionary dollars on home furnishings. During the quarter, we
re-opened all operations across our retail, distribution and
manufacturing businesses. Our team demonstrated great resilience
and we are thankful for everyone's hard work, safety consciousness,
and dedication to the company."
Darrow added, "After temporary shutdowns for
most of April, our plants have increased production weekly to meet
demand, and are operating at about 90% of prior-year levels. Strong
demand, coupled with ramping up manufacturing, has resulted in a
significant increase in product backlog, extended lead times
between order and delivery, and slower-than-normal delivered sales
for the first quarter."
Darrow concluded, "We are cautiously optimistic
as we head into the fall, based on current demand trends, but
recognize the pandemic is still upon us and much uncertainty exists
on a variety of fronts. We remain agile in managing the business
day to day, focusing on service to customers while maintaining
financial conservatism. We are proud to have delivered strong cash
results in this challenging first quarter, with $106 million in
cash from operations and a strong balance sheet which enables us to
navigate this uncertain time."
Consolidated sales in the first quarter of
fiscal 2021 decreased 31.0% to $285.5 million, due to the impact of
COVID-19. Consolidated GAAP operating margin was 1.5% versus 5.7%
in the prior-year quarter. Non-GAAP(1) operating margin was
3.1% versus 6.3% in last year’s first quarter, due to the impact of
closures and start up.
For the entire La-Z-Boy Furniture Galleries®
network, written same-store sales increased 14.8% for the fiscal
2021 first quarter. An initial decline in May of 13%, due to
pandemic-related store closures, was more than offset by increases
of 30% in June and 32% in July.
For the quarter, sales in the company’s
Wholesale(2) segment, which now includes the former Upholstery and
Casegoods segments, decreased 30% to $223.6 million, primarily the
result of lower unit volume due to COVID-19-related retail closures
and extended lead times to delivery as production continued to
increase each month. Written orders were up 2.4% for the quarter,
after a decline of 38% in May and an increase of 29% in both June
and July. Non-GAAP(1) operating margin for the Wholesale(2) segment
was 9.4% versus 9.5%. The negative impact of the many COVID-19
challenges to profitability were mostly offset by aggressive
temporary cost-control measures implemented across the
organization.
Retail segment sales decreased 36.3% to $91.1
million in the first quarter of fiscal 2021, primarily the result
of temporary store closures in the fourth quarter and into the
fiscal 2021 first quarter, and delays in product deliveries from
manufacturing shut-downs. Written same-store sales for the
company-owned La-Z-Boy Furniture Galleries® stores increased 11.1%
in the first quarter, even with the majority of stores closed in
May and some still closed in June. On a decline in traffic,
conversion and average ticket improved, driven by increased units
and higher design sales. Non-GAAP(1) operating margin for the
Retail segment was a loss of (6.8%) versus income of 6.0% in last
year’s first quarter, as a result of fixed costs during the
temporary decline in volume.
Fiscal 2021 first-quarter sales for Joybird
(reported in the Corporate & Other segment) decreased 21.7% to
$13.4 million. Written sales increased 38.2%, with deliveries
expected later in the second quarter and into the third quarter as
Joybird's Tijuana-based plant re-opened later than the company's
U.S.-based plants. Joybird reduced its operating loss for the
quarter on a year-over-year basis and sequentially as the company
balances investments in sales growth with bottom-line
performance.
GAAP diluted EPS was $0.10 for the fiscal 2021
first quarter versus $0.38 in the prior-year quarter. Non-GAAP(1)
diluted EPS was $0.18 versus $0.42 in last year’s first
quarter.
Balance Sheet and Cash Flow
For the first quarter, the company generated
$106.3 million in cash from operating activities, including a $61
million increase in customer deposits from written orders for the
company's Retail segment and Joybird. La-Z-Boy ended the
quarter with $336.7 million in cash(3), including $50 million in
cash proactively drawn on the company's credit facility to enhance
liquidity in response to COVID-19, compared with $113.6 million in
cash(3) at the end of the fiscal 2020 first quarter. In addition,
the company holds $16.5 million in investments to enhance returns
on cash versus $32.9 million in last year's first quarter. During
the period, the company invested $9.8 million in the business
through capital expenditures and paid back $25 million of the
original $75 million drawn against its credit line.
(1)Non-GAAP amounts for
the first quarter of fiscal 2021 exclude:
- a pre-tax charge of $3.5 million,
or $0.06 per diluted share, related to the company’s business
realignment, announced in June 2020, which included a 10% reduction
in the company's global workforce and the closure of its Newton,
Mississippi upholstery manufacturing facility
- pre-tax purchase accounting charges related to acquisitions
completed in prior periods totaling $1.2 million, or $0.02 per
diluted share, with $1.0 million included in operating income and
$0.2 million expense included in interest expense
(1)Non-GAAP amounts for
the first quarter of fiscal 2020 exclude:
- pre-tax purchase accounting charges
of $1.5 million, or $0.02 per diluted share, with $1.3 million
included in operating income and $0.2 million included in interest
expense
- a pre-tax charge of $1.5 million, or $0.02 per diluted share,
related to the company's supply chain optimization initiative
Please refer to the accompanying “Reconciliation
of GAAP to Non-GAAP Financial Measures” for detailed information on
calculating the Non-GAAP measures used in this press release and a
reconciliation to the most directly comparable GAAP measure.
(2)Wholesale segment: Effective
in the first quarter of fiscal 2021, in order to better align with
the manner in which we view and manage the business, coupled with
economic and customer channel similarities, the company revised its
reportable operating segments by aggregating the former Upholstery
segment with the former Casegoods segment to form the newly
combined Wholesale segment. The change in reportable operating
segments reflects how the company evaluates financial information
used to make operating decisions. Prior-period results disclosed in
this earnings release with respect to the Wholesale segment have
been revised to reflect these changes.
(3)Cash includes cash, cash
equivalents and restricted cash.
Dividend
On August 18, 2020, the Board of Directors
elected to reinstate a regular quarterly dividend to shareholders
of $0.07 per share, 50% of the dividend amount paid quarterly prior
to the company's suspension of dividends as part of its COVID-19
Action Plan. The dividend will be paid on September 15, 2020,
to shareholders of record as of September 3, 2020.
Conference Call
La-Z-Boy will hold a conference call with the
investment community on Wednesday, August 19, 2020, 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: 36268. The webcast replay will be available for one
year.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains “forward-looking”
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by
the fact that they do not relate strictly to historical or current
facts. Generally, forward-looking statements include information
concerning expectations, projections or trends relating to our
results of operations, financial results, financial condition,
strategic initiatives and plans, expenses, dividends, share
repurchases, liquidity, use of cash and cash requirements,
borrowing capacity, investments, future economic performance,
business, and industry and the effect of the novel coronavirus
(“COVID-19”) pandemic on our business operations and financial
results.
The forward-looking statements in this press
release are based on certain assumptions and currently available
information and are subject to various risks and uncertainties,
many of which are unforeseeable and beyond our control, such as the
continuing and developing impact of, and uncertainty caused by, the
COVID-19 pandemic. Additional risks and uncertainties that we do
not presently know about or that we currently consider to be
immaterial may also affect our business operations and financial
results. Our actual future results and trends may differ materially
depending on a variety of factors, including, but not limited to,
the risks and uncertainties discussed in our fiscal 2020 Annual
Report on Form 10-K and other factors identified in our reports
filed with the Securities and Exchange Commission. Given these
risks and uncertainties, you should not rely on forward-looking
statements as a prediction of actual results. We are including this
cautionary note to make applicable and take advantage of the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995 for forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events 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 Wholesale segment includes the
company's upholstery companies, England and La-Z-Boy, and the
company's casegoods companies, American Drew®, Hammary®, and
Kincaid®. The company-owned Retail segment includes 155 of the
355 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 355 stand-alone La-Z-Boy Furniture Galleries® stores
and 558 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,
which may exclude, as applicable, business realignment charges,
purchase accounting charges, and charges for our supply chain
optimization initiative. The business realignment charges include
severance costs, asset impairment costs, and costs to relocate
equipment and inventory related to organizational changes we
undertook as a result of our COVID-19 Action Plan. The purchase
accounting charges may 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. The charges for our supply chain optimization
initiative may include severance costs, accelerated depreciation
expense, costs to relocate equipment and inventory, as well as
other costs related to the closure, relocation and sale of certain
manufacturing operations. 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 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 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 and
the success with which we operate the businesses acquired. While
the company has a history of acquisition activity, it does not
acquire businesses on a predictable cycle, and the impact of
goodwill impairment charges and purchase accounting charges is
unique to each acquisition and can vary significantly from
acquisition to acquisition. Similarly, business realignment charges
and the charges related to the company’s supply chain optimization
initiative are dependent on the timing, size, number and nature of
the operations being moved or closed, and the charges may not be
incurred on a predictable cycle. Management believes that exclusion
of these items facilitates more consistent comparisons of the
company’s operating results over time. 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.
LA-Z-BOY
INCORPORATEDCONSOLIDATED STATEMENT OF
INCOME
|
|
Quarter Ended |
(Unaudited, amounts in thousands, except per share
data) |
|
7/25/20 |
|
7/27/19 |
Sales |
|
$ |
285,458 |
|
|
$ |
413,633 |
|
Cost of sales |
|
169,095 |
|
|
245,921 |
|
Gross profit |
|
116,363 |
|
|
167,712 |
|
Selling, general and administrative expense |
|
112,038 |
|
|
144,290 |
|
Operating income |
|
4,325 |
|
|
23,422 |
|
Interest expense |
|
(459 |
) |
|
(318 |
) |
Interest income |
|
494 |
|
|
727 |
|
Other income (expense),
net |
|
1,474 |
|
|
(760 |
) |
Income before income taxes |
|
5,834 |
|
|
23,071 |
|
Income tax expense |
|
1,155 |
|
|
5,083 |
|
Net income |
|
4,679 |
|
|
17,988 |
|
Net loss attributable to
noncontrolling interests |
|
119 |
|
|
81 |
|
Net income attributable to La-Z-Boy Incorporated |
|
$ |
4,798 |
|
|
$ |
18,069 |
|
|
|
|
|
|
Basic weighted average common
shares |
|
45,909 |
|
|
46,820 |
|
Basic net income attributable
to La-Z-Boy Incorporated per share |
|
$ |
0.10 |
|
|
$ |
0.39 |
|
|
|
|
|
|
Diluted weighted average
common shares |
|
45,965 |
|
|
47,125 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.10 |
|
|
$ |
0.38 |
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED BALANCE
SHEET
(Unaudited, amounts in thousands, except par
value) |
|
7/25/20 |
|
4/25/20 |
Current assets |
|
|
|
|
Cash and equivalents |
|
$ |
334,204 |
|
|
$ |
261,553 |
|
Restricted cash |
|
2,476 |
|
|
1,975 |
|
Receivables, net of allowance of $5,983 at 7/25/20 and $7,541 at
4/25/20 |
|
97,374 |
|
|
99,351 |
|
Inventories, net |
|
180,401 |
|
|
181,643 |
|
Other current assets |
|
89,497 |
|
|
81,804 |
|
Total current assets |
|
703,952 |
|
|
626,326 |
|
Property, plant and equipment,
net |
|
212,933 |
|
|
214,767 |
|
Goodwill |
|
161,597 |
|
|
161,017 |
|
Other intangible assets,
net |
|
28,614 |
|
|
28,653 |
|
Deferred income taxes –
long-term |
|
20,060 |
|
|
20,839 |
|
Right of use lease asset |
|
310,133 |
|
|
318,647 |
|
Other long-term assets,
net |
|
66,458 |
|
|
64,640 |
|
Total assets |
|
$ |
1,503,747 |
|
|
$ |
1,434,889 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
61,917 |
|
|
55,511 |
|
Short-term borrowings |
|
$ |
50,000 |
|
|
$ |
75,000 |
|
Lease liability, current |
|
64,399 |
|
|
64,376 |
|
Accrued expenses and other current liabilities |
|
248,230 |
|
|
155,282 |
|
Total current liabilities |
|
424,546 |
|
|
350,169 |
|
Lease liability,
long-term |
|
262,225 |
|
|
270,162 |
|
Other long-term
liabilities |
|
101,977 |
|
|
98,252 |
|
Shareholders' equity |
|
|
|
|
Preferred shares – 5,000 authorized; none issued |
|
— |
|
|
— |
|
Common shares, $1.00 par value – 150,000 authorized; 45,989
outstanding at 7/25/20 and 45,857 outstanding at 4/25/20 |
|
45,989 |
|
|
45,857 |
|
Capital in excess of par value |
|
320,067 |
|
|
318,215 |
|
Retained earnings |
|
346,750 |
|
|
343,633 |
|
Accumulated other comprehensive loss |
|
(5,232 |
) |
|
(6,952 |
) |
Total La-Z-Boy Incorporated shareholders' equity |
|
707,574 |
|
|
700,753 |
|
Noncontrolling interests |
|
7,425 |
|
|
15,553 |
|
Total equity |
|
714,999 |
|
|
716,306 |
|
Total liabilities and equity |
|
$ |
1,503,747 |
|
|
$ |
1,434,889 |
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
Quarter Ended |
(Unaudited, amounts in
thousands) |
|
7/25/20 |
|
7/27/19 |
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
4,679 |
|
|
$ |
17,988 |
|
Adjustments to reconcile net income to cash provided by operating
activities |
|
|
|
|
(Gain)/loss on disposal of assets |
|
14 |
|
|
(536 |
) |
Gain on sale of investments |
|
(108 |
) |
|
(4 |
) |
Change in deferred taxes |
|
785 |
|
|
(677 |
) |
Provision for doubtful accounts |
|
(1,575 |
) |
|
116 |
|
Depreciation and amortization |
|
8,119 |
|
|
7,298 |
|
Equity-based compensation expense |
|
2,047 |
|
|
1,675 |
|
Change in receivables |
|
3,745 |
|
|
8,535 |
|
Change in inventories |
|
1,686 |
|
|
(527 |
) |
Change in right-of use lease asset |
|
16,469 |
|
|
16,101 |
|
Change in other assets |
|
4,031 |
|
|
(8,792 |
) |
Change in payables |
|
8,864 |
|
|
(1,391 |
) |
Change in lease liabilities |
|
(15,857 |
) |
|
(16,418 |
) |
Change in other liabilities |
|
73,401 |
|
|
(4,028 |
) |
Net cash provided by operating activities |
|
106,300 |
|
|
19,340 |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Proceeds from disposals of assets |
|
10 |
|
|
22 |
|
Proceeds from insurance |
|
— |
|
|
642 |
|
Capital expenditures |
|
(9,810 |
) |
|
(12,299 |
) |
Purchases of investments |
|
(3,623 |
) |
|
(5,288 |
) |
Proceeds from sales of investments |
|
14,671 |
|
|
4,060 |
|
Acquisitions, net of cash acquired |
|
(437 |
) |
|
(5,438 |
) |
Net cash provided by (used for) investing activities |
|
811 |
|
|
(18,301 |
) |
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
Payments on debt and finance lease liabilities |
|
(25,013 |
) |
|
(47 |
) |
Stock issued for stock and employee benefit plans, net of shares
withheld for taxes |
|
(1,749 |
) |
|
(1,417 |
) |
Purchases of common stock |
|
— |
|
|
(12,313 |
) |
Dividends paid to shareholders |
|
— |
|
|
(6,112 |
) |
Dividends paid to minority interest joint venture partners (1) |
|
(8,507 |
) |
|
— |
|
Net cash used for financing activities |
|
(35,269 |
) |
|
(19,889 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and equivalents |
|
1,310 |
|
|
655 |
|
Change in cash, cash
equivalents and restricted cash |
|
73,152 |
|
|
(18,195 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
263,528 |
|
|
131,787 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
336,680 |
|
|
$ |
113,592 |
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing activities |
|
|
|
|
Capital expenditures included in payables |
|
$ |
881 |
|
|
$ |
2,416 |
|
(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.
LA-Z-BOY
INCORPORATEDSEGMENT INFORMATION
|
|
Quarter Ended |
(Unaudited, amounts in thousands) |
|
7/25/20 |
|
7/27/19 |
Sales |
|
|
|
|
Wholesale segment: |
|
|
|
|
Sales to external customers |
|
$ |
179,755 |
|
|
$ |
252,773 |
|
Intersegment sales |
|
43,818 |
|
|
67,778 |
|
Wholesale segment sales |
|
223,573 |
|
|
320,551 |
|
|
|
|
|
|
Retail segment sales |
|
91,137 |
|
|
142,996 |
|
|
|
|
|
|
Corporate and Other: |
|
|
|
|
Sales to external customers |
|
14,566 |
|
|
17,864 |
|
Intersegment sales |
|
2,175 |
|
|
2,688 |
|
Corporate and Other sales |
|
16,741 |
|
|
20,552 |
|
|
|
|
|
|
Eliminations |
|
(45,993 |
) |
|
(70,466 |
) |
Consolidated sales |
|
$ |
285,458 |
|
|
$ |
413,633 |
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
Wholesale segment |
|
$ |
17,940 |
|
|
$ |
28,864 |
|
Retail segment |
|
(6,627 |
) |
|
8,477 |
|
Corporate and Other |
|
(6,988 |
) |
|
(13,919 |
) |
Consolidated operating income |
|
$ |
4,325 |
|
|
$ |
23,422 |
|
LA-Z-BOY
INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES
|
|
Quarter Ended |
(Amounts in thousands, except per share data) |
|
7/25/20 |
|
7/27/19 |
GAAP gross profit |
|
$ |
116,363 |
|
|
$ |
167,712 |
|
Add back: Purchase accounting charges - incremental expense upon
the sale of inventory acquired at fair value |
|
297 |
|
|
117 |
|
Add back: Business realignment charges |
|
1,070 |
|
|
— |
|
Add back: Supply chain
optimization initiative |
|
(50 |
) |
|
1,508 |
|
Non-GAAP gross profit |
|
$ |
117,680 |
|
|
$ |
169,337 |
|
|
|
|
|
|
GAAP SG&A |
|
$ |
112,038 |
|
|
$ |
144,290 |
|
Less: Purchase accounting charges - amortization of intangible
assets and retention agreements |
|
(722 |
) |
|
(1,192 |
) |
Less: Business realignment charges |
|
(2,472 |
) |
|
— |
|
Non-GAAP SG&A |
|
$ |
108,844 |
|
|
$ |
143,098 |
|
|
|
|
|
|
GAAP operating income |
|
$ |
4,325 |
|
|
$ |
23,422 |
|
Add back: Purchase accounting charges |
|
1,019 |
|
|
1,309 |
|
Add back: Business realignment charges |
|
3,542 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Non-GAAP operating income |
|
$ |
8,836 |
|
|
$ |
26,239 |
|
|
|
|
|
|
GAAP income before income
taxes |
|
$ |
5,834 |
|
|
$ |
23,071 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
1,189 |
|
|
1,502 |
|
Add back: Business realignment charges |
|
3,542 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Non-GAAP income before income
taxes |
|
$ |
10,515 |
|
|
$ |
26,081 |
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
$ |
4,798 |
|
|
$ |
18,069 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
1,189 |
|
|
1,502 |
|
Less: Tax effect of
purchase accounting |
|
(235 |
) |
|
(330 |
) |
Add back: Business realignment charges |
|
3,542 |
|
|
— |
|
Less: Tax effect of
business realignment charges |
|
(701 |
) |
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Less: Tax effect of supply chain optimization initiative |
|
10 |
|
|
(332 |
) |
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
$ |
8,552 |
|
|
$ |
20,417 |
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated per diluted share |
|
$ |
0.10 |
|
|
$ |
0.38 |
|
Add back: Purchase accounting charges, net of tax, per share |
|
0.02 |
|
|
0.02 |
|
Add back: Business realignment charges, net of tax, per share |
|
0.06 |
|
|
— |
|
Add back: Supply chain optimization initiative, net of tax, per
share |
|
— |
|
|
0.02 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated per diluted share |
|
$ |
0.18 |
|
|
$ |
0.42 |
|
LA-Z-BOY
INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURESSEGMENT INFORMATION
|
|
Quarter Ended |
(Amounts in thousands) |
|
7/25/20 |
|
% of sales |
|
7/27/19 |
|
% of sales |
GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
17,940 |
|
|
8.0 |
% |
|
$ |
28,864 |
|
|
9.0 |
% |
Retail segment |
|
(6,627 |
) |
|
(7.3 |
)% |
|
8,477 |
|
|
5.9 |
% |
Corporate and
Other |
|
(6,988 |
) |
|
N/M |
|
(13,919 |
) |
|
N/M |
Consolidated GAAP operating income |
|
$ |
4,325 |
|
|
1.5 |
% |
|
$ |
23,422 |
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP items affecting
operating income |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
3,004 |
|
|
|
|
$ |
1,563 |
|
|
|
Retail segment |
|
465 |
|
|
|
|
117 |
|
|
|
Corporate and
Other |
|
1,042 |
|
|
|
|
1,137 |
|
|
|
Consolidated Non-GAAP items affecting operating income |
|
$ |
4,511 |
|
|
|
|
$ |
2,817 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
20,944 |
|
|
9.4 |
% |
|
$ |
30,427 |
|
|
9.5 |
% |
Retail segment |
|
(6,162 |
) |
|
(6.8 |
)% |
|
8,594 |
|
|
6.0 |
% |
Corporate and
Other |
|
(5,946 |
) |
|
N/M |
|
(12,782 |
) |
|
N/M |
Consolidated Non-GAAP operating income |
|
$ |
8,836 |
|
|
3.1 |
% |
|
$ |
26,239 |
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
LA-Z-BOY INCORPORATEDCONSOLIDATED
STATEMENT OF INCOME |
|
|
|
|
|
Quarter Ended |
(Unaudited, amounts in thousands, except per share
data) |
|
7/25/20 |
|
7/27/19 |
Sales |
|
$ |
285,458 |
|
|
$ |
413,633 |
|
Cost of sales |
|
169,095 |
|
|
245,921 |
|
Gross profit |
|
116,363 |
|
|
167,712 |
|
Selling, general and administrative expense |
|
112,038 |
|
|
144,290 |
|
Operating income |
|
4,325 |
|
|
23,422 |
|
Interest expense |
|
(459 |
) |
|
(318 |
) |
Interest income |
|
494 |
|
|
727 |
|
Other income (expense),
net |
|
1,474 |
|
|
(760 |
) |
Income before income taxes |
|
5,834 |
|
|
23,071 |
|
Income tax expense |
|
1,155 |
|
|
5,083 |
|
Net income |
|
4,679 |
|
|
17,988 |
|
Net loss attributable to
noncontrolling interests |
|
119 |
|
|
81 |
|
Net income attributable to La-Z-Boy Incorporated |
|
$ |
4,798 |
|
|
$ |
18,069 |
|
|
|
|
|
|
Basic weighted average common
shares |
|
45,909 |
|
|
46,820 |
|
Basic net income attributable
to La-Z-Boy Incorporated per share |
|
$ |
0.10 |
|
|
$ |
0.39 |
|
|
|
|
|
|
Diluted weighted average
common shares |
|
45,965 |
|
|
47,125 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.10 |
|
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED BALANCE
SHEET |
|
|
|
|
|
(Unaudited, amounts in thousands, except par
value) |
|
7/25/20 |
|
4/25/20 |
Current assets |
|
|
|
|
Cash and equivalents |
|
$ |
334,204 |
|
|
$ |
261,553 |
|
Restricted cash |
|
2,476 |
|
|
1,975 |
|
Receivables, net of allowance of $5,983 at 7/25/20 and $7,541 at
4/25/20 |
|
97,374 |
|
|
99,351 |
|
Inventories, net |
|
180,401 |
|
|
181,643 |
|
Other current assets |
|
89,497 |
|
|
81,804 |
|
Total current assets |
|
703,952 |
|
|
626,326 |
|
Property, plant and equipment,
net |
|
212,933 |
|
|
214,767 |
|
Goodwill |
|
161,597 |
|
|
161,017 |
|
Other intangible assets,
net |
|
28,614 |
|
|
28,653 |
|
Deferred income taxes –
long-term |
|
20,060 |
|
|
20,839 |
|
Right of use lease asset |
|
310,133 |
|
|
318,647 |
|
Other long-term assets,
net |
|
66,458 |
|
|
64,640 |
|
Total assets |
|
$ |
1,503,747 |
|
|
$ |
1,434,889 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
61,917 |
|
|
55,511 |
|
Short-term borrowings |
|
$ |
50,000 |
|
|
$ |
75,000 |
|
Lease liability, current |
|
64,399 |
|
|
64,376 |
|
Accrued expenses and other current liabilities |
|
248,230 |
|
|
155,282 |
|
Total current liabilities |
|
424,546 |
|
|
350,169 |
|
Lease liability,
long-term |
|
262,225 |
|
|
270,162 |
|
Other long-term
liabilities |
|
101,977 |
|
|
98,252 |
|
Shareholders' equity |
|
|
|
|
Preferred shares – 5,000 authorized; none issued |
|
— |
|
|
— |
|
Common shares, $1.00 par value – 150,000 authorized; 45,989
outstanding at 7/25/20 and 45,857 outstanding at 4/25/20 |
|
45,989 |
|
|
45,857 |
|
Capital in excess of par value |
|
320,067 |
|
|
318,215 |
|
Retained earnings |
|
346,750 |
|
|
343,633 |
|
Accumulated other comprehensive loss |
|
(5,232 |
) |
|
(6,952 |
) |
Total La-Z-Boy Incorporated shareholders' equity |
|
707,574 |
|
|
700,753 |
|
Noncontrolling interests |
|
7,425 |
|
|
15,553 |
|
Total equity |
|
714,999 |
|
|
716,306 |
|
Total liabilities and equity |
|
$ |
1,503,747 |
|
|
$ |
1,434,889 |
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY INCORPORATEDCONSOLIDATED
STATEMENT OF CASH FLOWS |
|
|
|
|
|
Quarter Ended |
(Unaudited, amounts in
thousands) |
|
7/25/20 |
|
7/27/19 |
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
4,679 |
|
|
$ |
17,988 |
|
Adjustments to reconcile net income to cash provided by operating
activities |
|
|
|
|
(Gain)/loss on disposal of assets |
|
14 |
|
|
(536 |
) |
Gain on sale of investments |
|
(108 |
) |
|
(4 |
) |
Change in deferred taxes |
|
785 |
|
|
(677 |
) |
Provision for doubtful accounts |
|
(1,575 |
) |
|
116 |
|
Depreciation and amortization |
|
8,119 |
|
|
7,298 |
|
Equity-based compensation expense |
|
2,047 |
|
|
1,675 |
|
Change in receivables |
|
3,745 |
|
|
8,535 |
|
Change in inventories |
|
1,686 |
|
|
(527 |
) |
Change in right-of use lease asset |
|
16,469 |
|
|
16,101 |
|
Change in other assets |
|
4,031 |
|
|
(8,792 |
) |
Change in payables |
|
8,864 |
|
|
(1,391 |
) |
Change in lease liabilities |
|
(15,857 |
) |
|
(16,418 |
) |
Change in other liabilities |
|
73,401 |
|
|
(4,028 |
) |
Net cash provided by operating activities |
|
106,300 |
|
|
19,340 |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Proceeds from disposals of assets |
|
10 |
|
|
22 |
|
Proceeds from insurance |
|
— |
|
|
642 |
|
Capital expenditures |
|
(9,810 |
) |
|
(12,299 |
) |
Purchases of investments |
|
(3,623 |
) |
|
(5,288 |
) |
Proceeds from sales of investments |
|
14,671 |
|
|
4,060 |
|
Acquisitions, net of cash acquired |
|
(437 |
) |
|
(5,438 |
) |
Net cash provided by (used for) investing activities |
|
811 |
|
|
(18,301 |
) |
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
Payments on debt and finance lease liabilities |
|
(25,013 |
) |
|
(47 |
) |
Stock issued for stock and employee benefit plans, net of shares
withheld for taxes |
|
(1,749 |
) |
|
(1,417 |
) |
Purchases of common stock |
|
— |
|
|
(12,313 |
) |
Dividends paid to shareholders |
|
— |
|
|
(6,112 |
) |
Dividends paid to minority interest joint venture partners (1) |
|
(8,507 |
) |
|
— |
|
Net cash used for financing activities |
|
(35,269 |
) |
|
(19,889 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and equivalents |
|
1,310 |
|
|
655 |
|
Change in cash, cash
equivalents and restricted cash |
|
73,152 |
|
|
(18,195 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
263,528 |
|
|
131,787 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
336,680 |
|
|
$ |
113,592 |
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing activities |
|
|
|
|
Capital expenditures included in payables |
|
$ |
881 |
|
|
$ |
2,416 |
|
(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.
|
LA-Z-BOY INCORPORATEDSEGMENT
INFORMATION |
|
|
|
|
|
|
|
Quarter Ended |
(Unaudited, amounts in thousands) |
|
7/25/20 |
|
7/27/19 |
Sales |
|
|
|
|
Wholesale segment: |
|
|
|
|
Sales to external customers |
|
$ |
179,755 |
|
|
$ |
252,773 |
|
Intersegment sales |
|
43,818 |
|
|
67,778 |
|
Wholesale segment sales |
|
223,573 |
|
|
320,551 |
|
|
|
|
|
|
Retail segment sales |
|
91,137 |
|
|
142,996 |
|
|
|
|
|
|
Corporate and Other: |
|
|
|
|
Sales to external customers |
|
14,566 |
|
|
17,864 |
|
Intersegment sales |
|
2,175 |
|
|
2,688 |
|
Corporate and Other sales |
|
16,741 |
|
|
20,552 |
|
|
|
|
|
|
Eliminations |
|
(45,993 |
) |
|
(70,466 |
) |
Consolidated sales |
|
$ |
285,458 |
|
|
$ |
413,633 |
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
Wholesale segment |
|
$ |
17,940 |
|
|
$ |
28,864 |
|
Retail segment |
|
(6,627 |
) |
|
8,477 |
|
Corporate and Other |
|
(6,988 |
) |
|
(13,919 |
) |
Consolidated operating income |
|
$ |
4,325 |
|
|
$ |
23,422 |
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY INCORPORATEDRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
(Amounts in thousands, except per share data) |
|
7/25/20 |
|
7/27/19 |
GAAP gross profit |
|
$ |
116,363 |
|
|
$ |
167,712 |
|
Add back: Purchase accounting charges - incremental expense upon
the sale of inventory acquired at fair value |
|
297 |
|
|
117 |
|
Add back: Business realignment charges |
|
1,070 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Non-GAAP gross profit |
|
$ |
117,680 |
|
|
$ |
169,337 |
|
|
|
|
|
|
GAAP SG&A |
|
$ |
112,038 |
|
|
$ |
144,290 |
|
Less: Purchase accounting charges - amortization of intangible
assets and retention agreements |
|
(722 |
) |
|
(1,192 |
) |
Less: Business realignment charges |
|
(2,472 |
) |
|
— |
|
Non-GAAP SG&A |
|
$ |
108,844 |
|
|
$ |
143,098 |
|
|
|
|
|
|
GAAP operating income |
|
$ |
4,325 |
|
|
$ |
23,422 |
|
Add back: Purchase accounting charges |
|
1,019 |
|
|
1,309 |
|
Add back: Business realignment charges |
|
3,542 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Non-GAAP operating income |
|
$ |
8,836 |
|
|
$ |
26,239 |
|
|
|
|
|
|
GAAP income before income
taxes |
|
$ |
5,834 |
|
|
$ |
23,071 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
1,189 |
|
|
1,502 |
|
Add back: Business realignment charges |
|
3,542 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Non-GAAP income before income
taxes |
|
$ |
10,515 |
|
|
$ |
26,081 |
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
$ |
4,798 |
|
|
$ |
18,069 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
1,189 |
|
|
1,502 |
|
Less: Tax effect of purchase accounting |
|
(235 |
) |
|
(330 |
) |
Add back: Business realignment charges |
|
3,542 |
|
|
— |
|
Less: Tax effect of business realignment charges |
|
(701 |
) |
|
— |
|
Add back: Supply chain optimization initiative |
|
(50 |
) |
|
1,508 |
|
Less: Tax effect of supply chain optimization initiative |
|
10 |
|
|
(332 |
) |
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
$ |
8,552 |
|
|
$ |
20,417 |
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated per diluted share |
|
$ |
0.10 |
|
|
$ |
0.38 |
|
Add back: Purchase accounting charges, net of tax, per share |
|
0.02 |
|
|
0.02 |
|
Add back: Business realignment charges, net of tax, per share |
|
0.06 |
|
|
— |
|
Add back: Supply chain optimization initiative, net of tax, per
share |
|
— |
|
|
0.02 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated per diluted share |
|
$ |
0.18 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY INCORPORATEDRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURESSEGMENT
INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
(Amounts in thousands) |
|
7/25/20 |
|
% of sales |
|
7/27/19 |
|
% of sales |
GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
17,940 |
|
|
8.0% |
|
$ |
28,864 |
|
|
9.0% |
Retail segment |
|
(6,627 |
) |
|
(7.3)% |
|
8,477 |
|
|
5.9% |
Corporate and
Other |
|
(6,988 |
) |
|
N/M |
|
(13,919 |
) |
|
N/M |
Consolidated GAAP operating income |
|
$ |
4,325 |
|
|
1.5% |
|
$ |
23,422 |
|
|
5.7% |
|
|
|
|
|
|
|
|
|
Non-GAAP items affecting
operating income |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
3,004 |
|
|
|
|
$ |
1,563 |
|
|
|
Retail segment |
|
465 |
|
|
|
|
117 |
|
|
|
Corporate and
Other |
|
1,042 |
|
|
|
|
1,137 |
|
|
|
Consolidated Non-GAAP items affecting operating income |
|
$ |
4,511 |
|
|
|
|
$ |
2,817 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
20,944 |
|
|
9.4% |
|
$ |
30,427 |
|
|
9.5% |
Retail segment |
|
(6,162 |
) |
|
(6.8)% |
|
8,594 |
|
|
6.0% |
Corporate and
Other |
|
(5,946 |
) |
|
N/M |
|
(12,782 |
) |
|
N/M |
Consolidated Non-GAAP operating income |
|
$ |
8,836 |
|
|
3.1% |
|
$ |
26,239 |
|
|
6.3% |
|
|
|
|
|
|
|
|
|
N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: Kathy Liebmann
(734)
241-2438 kathy.liebmann@la-z-boy.com
La Z Boy (NYSE:LZB)
Historical Stock Chart
From Mar 2024 to Apr 2024
La Z Boy (NYSE:LZB)
Historical Stock Chart
From Apr 2023 to Apr 2024