La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential
furniture, today reported strong operating results for the fiscal
2021 second quarter ended October 24, 2020.
Fiscal 2021 second quarter versus Fiscal
2020 second quarter:
- Consolidated sales increased 2.7%
to $459.1 million
- Written same-store sales for the
entire La-Z-Boy Furniture Galleries® network increased 34%
- Consolidated operating income:
- GAAP: $47.9 million versus $29.6
million, an increase of 62%
- Non-GAAP(1): $51.2 million versus
$33.7 million, an increase of 52%
- Consolidated operating margin:
- GAAP: 10.4% versus 6.6%
- Non-GAAP(1): 11.1% versus 7.5%
- Wholesale(2): 12.2% versus 10.6%
- Retail: 9.4% versus 5.8%
- Net income attributable to La-Z-Boy
Incorporated per diluted share (“EPS”):
- GAAP: $0.75 versus $0.48
- Non-GAAP(1): $0.82 versus $0.52
- Strong cash generation, with fiscal
year-to-date cash from operating activities of $195.7 million
- Cash(3) was $353.4 million at
quarter end after full repayment of $50 million outstanding balance
on credit line
Kurt L. Darrow, Chairman, President and Chief
Executive Officer of La-Z-Boy, said, "Demand across all La-Z-Boy
Incorporated businesses is at record levels as consumers continue
to allocate more discretionary spending to home furnishings. Orders
are fueling an unprecedented backlog and our supply chain team is
doing a great job to continually increase weekly production to
service customers and drive increased delivered sales. For the
quarter, we produced a double-digit consolidated operating margin,
with all operating companies posting excellent results, including
Joybird which turned a profit for the first time. With the
well-known and trusted La-Z-Boy brand clearly resonating with
consumers during these uncertain times, solid cash generation, a
robust balance sheet, and prudent expense management, we are
confident we will continue to adeptly navigate the challenging
COVID-19 landscape while we remain focused on providing a safe
environment for employees and customers."
Consolidated sales in the second quarter of
fiscal 2021 increased 2.7% to $459.1 million, with strong demand
across all operating companies. Consolidated GAAP operating margin
increased to 10.4% from 6.6% in the prior-year quarter. Non-GAAP(1)
operating margin improved to 11.1% versus 7.5% in last year’s
second quarter, driven by an increase in delivered sales and
decreased spending.
For the entire La-Z-Boy Furniture Galleries®
network, written same-store sales increased 34% for the fiscal 2021
second quarter compared with the same period last year.
For the quarter, delivered sales in the
company’s Wholesale(2) segment decreased 2% to $343.0 million.
A significant increase in demand has led to a record-level backlog.
The company continues to increase manufacturing production capacity
to meet demand, but a temporary supply shortage of polyurethane
foam led to lower unit volume. Non-GAAP(1) operating margin
for the Wholesale(2) segment was 12.2% versus 10.6% for the
prior-year period, reflecting tight cost controls and a lower
marketing spend. With the demand acceleration outpacing
production acceleration, the company continued to increase weekly
production levels and took the following actions to improve
capacity moving forward:
- Added additional manufacturing
cells at its U.S.-based upholstery manufacturing facilities as well
as additional weekend shifts
- Temporarily re-activated a portion
of its Newton, Mississippi assembly plant
- Added manufacturing cells at its
Cut-and-Sew Center in Mexico
- Leased a 200,000 square-foot
upholstery plant south of Yuma, Arizona, in San Luis Rio Colorado,
Mexico, which is expected to start production in December with full
ramp up extending over the first half of the new calendar year
Darrow stated, "In this stronger-than-expected
demand environment, our supply chain team is demonstrating agility
and flexibility to significantly increase production capacity on
both an opportunistic and permanent basis. As part of our
longer-term strategic plan, we have been considering alternatives
to most efficiently serve the western portion of North America, and
we are excited to take this first step with our new facility in
Mexico."
The Retail segment delivered sales increased
9.3% to $162.3 million in the second quarter of fiscal 2021.
Written same-store sales for the company-owned La-Z-Boy Furniture
Galleries® stores increased 36% in the quarter, reflecting strong
traffic trends and demand as well as continued excellent execution
at the store level, including an increase in conversion and average
ticket driven by increased units and design sales. Delivered sales
for the core base of 150 stores increased 6.3%.
Non-GAAP(1) operating margin for the Retail segment increased
to 9.4% versus 5.8% in last year’s second quarter, as a result of
fixed-cost leverage on the higher delivered sales volume and lower
spending on advertising and other expenses, including travel.
During the second quarter, the company closed on
the acquisition of six Seattle-based La-Z-Boy Furniture Galleries®
stores with approximately $30 million in annual retail volume
in calendar 2019, and one warehouse. As the company is already
recording a portion of the Seattle-based store volume in its
Wholesale segment, the acquisition of the six stores is expected to
contribute approximately $15 million of additional sales
annually to the company on a consolidated basis, based on their
calendar 2019 sales. For the second quarter, the Seattle stores
added $3.5 million of sales to the Retail segment.
Within Corporate & Other, Joybird delivered
its first profitable quarter on a sales increase of 42% to $29.4
million. For the period, Joybird improved its gross margin
significantly and lowered advertising and other expenses. Written
sales increased 25% compared with the prior-year quarter,
reflecting ongoing strong order trends. Darrow noted, "We are
encouraged by Joybird's performance for the quarter and optimistic
about its trajectory for accelerated growth. We will continue to
balance investments in top-line growth with bottom-line
performance."
GAAP diluted EPS was $0.75 for the fiscal 2021
second quarter versus $0.48 in the prior-year quarter. Non-GAAP(1)
diluted EPS was $0.82 versus $0.52 in last year’s second
quarter.
Balance Sheet and Cash Flow
Year to date, the company generated $196 million
in cash from operating activities, reflecting strong profit
performance and a $100 million increase in customer deposits from
written orders for the company's Retail segment and Joybird.
La-Z-Boy ended the period with $353 million in cash(3), compared
with $120 million in cash(3) at the end of the fiscal 2020 second
quarter. The company holds $27 million in investments to enhance
returns on cash versus $33 million at the end of last year's
period. Year to date, the company invested $8 million in
acquisitions, $15 million in the business through capital
expenditures, and paid $3 million in dividends. During the quarter,
the company used $50 million of cash to fully repay its credit
line, ending the quarter with no borrowings outstanding.
Dividend
On November 17, 2020, the Board of Directors
declared a quarterly cash dividend on the company's common stock of
$0.14 per share. This returns the dividend to the full quarterly
amount paid prior to the company's suspension of dividends as part
of its COVID-19 Action Plan. The dividend is payable December 15,
2020, to shareholders of record as of December 2, 2020.
Business Outlook
Darrow concluded, "Although there is extreme
uncertainty with respect to the pandemic, including the risk of
COVID-19-related shutdowns affecting operations moving forward as
well as risk of ongoing disruption within the global supply chain,
such as the polyurethane foam issue, we are optimistic the company
will deliver strong results in the second half of fiscal 2021. The
strength of our brands and vast distribution network are driving
strong written order trends across our entire business, translating
to a significant increase in backlog. In addition, our supply chain
team is making great progress to increase capacity so that we can
shorten delivery times and service our customers with high-quality
products. With the initiatives already underway, we expect to
continue to significantly increase production capacity throughout
the balance of the fiscal year."
Due to the unusual business trends driven by the
pandemic, La-Z-Boy is providing perspective for the remainder of
the year. The company does not intend to provide this level of
forward-looking perspective regularly.
Provided there are no COVID-19-related shutdowns
or other unexpected external disruptions impacting the company's
operations, including global supply chain issues, such as with
polyurethane foam, and taking all planned actions into account,
La-Z-Boy expects consolidated sales growth in the third quarter of
flat to 4% above the prior year's all-time record-high third
quarter. Further, accounting for continued growth and the effects
of the month-long pandemic shutdown in the prior-year fourth
quarter base period, the company anticipates fiscal 2021
fourth-quarter sales growth of 40% to 45% versus the
prior-year quarter.
Presuming these sales trends sustain, the
company expects to deliver a historically high consolidated
operating margin of approximately 9% to 11% for the balance of the
year. Included in these margin expectations is the anticipation
that Joybird will sustain profitable operations.
(1)Non-GAAP amounts for
the second quarter of fiscal 2021 exclude:
- pre-tax purchase accounting charges
related to acquisitions totaling $3.0 million, or $0.06 per diluted
share, primarily due to a write-up of the Joybird contingent
consideration liability based on forecasted future performance,
with $2.9 million included in operating income and $0.1 million
included in interest expense
- a pre-tax charge of $0.3 million,
or $0.01 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
Non-GAAP amounts for the second quarter
of fiscal 2020 exclude:
- pre-tax purchase accounting charges
of $1.6 million, or $0.03 per diluted share, with $1.4 million
included in operating income and $0.2 million included in interest
expense
- a pre-tax charge of $2.8 million,
or $0.04 per diluted share, related to the company's supply chain
optimization initiative, including the closure of the company's
Redlands, California upholstery manufacturing facility and
relocation of its Newton, Mississippi leather cut-and-sew
operations
- pre-tax income of $1.9 million, or
$0.03 per diluted share, related to the 2019 termination of the
company's defined benefit pension plan.
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.
Conference Call
La-Z-Boy will hold a conference call with the
investment community on Wednesday, November 18, 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:
38471. 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 England,
La-Z-Boy, American Drew®, Hammary®, and Kincaid®. The
company-owned Retail segment includes 159 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 561 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, charges for our supply chain
optimization initiative, and impacts from terminating the company's
defined benefit pension plan. 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
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 also excludes impacts from 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. 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 |
|
Six Months Ended |
(Unaudited, amounts in thousands, except per share
data) |
|
10/24/20 |
|
10/26/19 |
|
10/24/20 |
|
10/26/19 |
Sales |
|
$ |
459,120 |
|
|
$ |
447,212 |
|
|
$ |
744,578 |
|
|
$ |
860,845 |
|
Cost of sales |
|
258,565 |
|
|
264,823 |
|
|
427,660 |
|
|
510,744 |
|
Gross profit |
|
200,555 |
|
|
182,389 |
|
|
316,918 |
|
|
350,101 |
|
Selling, general and administrative expense |
|
152,616 |
|
|
152,788 |
|
|
264,654 |
|
|
297,078 |
|
Operating income |
|
47,939 |
|
|
29,601 |
|
|
52,264 |
|
|
53,023 |
|
Interest expense |
|
(346 |
) |
|
(308 |
) |
|
(805 |
) |
|
(626 |
) |
Interest income |
|
123 |
|
|
522 |
|
|
617 |
|
|
1,249 |
|
Other income (expense),
net |
|
(11 |
) |
|
1,368 |
|
|
1,463 |
|
|
608 |
|
Income before income taxes |
|
47,705 |
|
|
31,183 |
|
|
53,539 |
|
|
54,254 |
|
Income tax expense |
|
12,401 |
|
|
8,279 |
|
|
13,556 |
|
|
13,362 |
|
Net income |
|
35,304 |
|
|
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
shares |
|
46,023 |
|
|
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 shares |
|
46,323 |
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED BALANCE
SHEET
(Unaudited, amounts in thousands, except par
value) |
|
10/24/20 |
|
4/25/20 |
Current assets |
|
|
|
|
Cash and equivalents |
|
$ |
350,949 |
|
|
$ |
261,553 |
|
Restricted cash |
|
2,478 |
|
|
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, net |
|
188,652 |
|
|
181,643 |
|
Other current assets |
|
125,999 |
|
|
81,804 |
|
Total current assets |
|
796,402 |
|
|
626,326 |
|
Property, plant and equipment,
net |
|
211,688 |
|
|
214,767 |
|
Goodwill |
|
174,834 |
|
|
161,017 |
|
Other intangible assets,
net |
|
30,647 |
|
|
28,653 |
|
Deferred income taxes –
long-term |
|
18,990 |
|
|
20,839 |
|
Right of use lease assets |
|
341,765 |
|
|
318,647 |
|
Other long-term assets,
net |
|
76,017 |
|
|
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, current |
|
65,758 |
|
|
64,376 |
|
Accrued expenses and other current liabilities |
|
335,294 |
|
|
155,282 |
|
Total current liabilities |
|
490,312 |
|
|
350,169 |
|
Lease liabilities,
long-term |
|
294,601 |
|
|
270,162 |
|
Other long-term
liabilities |
|
110,781 |
|
|
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 value |
|
326,182 |
|
|
318,215 |
|
Retained earnings |
|
378,438 |
|
|
343,633 |
|
Accumulated other comprehensive loss |
|
(3,957 |
) |
|
(6,952 |
) |
Total La-Z-Boy Incorporated shareholders' equity |
|
746,776 |
|
|
700,753 |
|
Noncontrolling interests |
|
7,873 |
|
|
15,553 |
|
Total equity |
|
754,649 |
|
|
716,306 |
|
Total liabilities and equity |
|
$ |
1,650,343 |
|
|
$ |
1,434,889 |
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
Six Months Ended |
(Unaudited, amounts in thousands) |
|
10/24/20 |
|
10/26/19 |
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
39,983 |
|
|
$ |
40,892 |
|
Adjustments to reconcile net income to cash provided by operating
activities |
|
|
|
|
(Gain)/loss on disposal of assets |
|
140 |
|
|
(283 |
) |
Gain on sale of investments |
|
(284 |
) |
|
(99 |
) |
Change in deferred taxes |
|
1,849 |
|
|
273 |
|
Provision for doubtful accounts |
|
(1,568 |
) |
|
350 |
|
Depreciation and amortization |
|
16,351 |
|
|
14,936 |
|
Equity-based compensation expense |
|
6,167 |
|
|
4,707 |
|
Change in receivables |
|
(28,949 |
) |
|
(12,722 |
) |
Change in inventories |
|
(3,511 |
) |
|
(7,645 |
) |
Change in right-of use lease asset |
|
35,137 |
|
|
32,323 |
|
Change in other assets |
|
(1,926 |
) |
|
(4,088 |
) |
Change in payables |
|
33,236 |
|
|
3,854 |
|
Change in lease liabilities |
|
(32,422 |
) |
|
(32,665 |
) |
Change in other liabilities |
|
131,507 |
|
|
13,869 |
|
Net cash provided by operating activities |
|
195,710 |
|
|
53,702 |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Proceeds from disposals of assets |
|
21 |
|
|
88 |
|
Proceeds from insurance |
|
— |
|
|
1,018 |
|
Capital expenditures |
|
(15,442 |
) |
|
(22,949 |
) |
Purchases of investments |
|
(17,649 |
) |
|
(17,798 |
) |
Proceeds from sales of investments |
|
19,470 |
|
|
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 taxes |
|
364 |
|
|
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 equivalents |
|
1,944 |
|
|
1,239 |
|
Change in cash, cash
equivalents and restricted cash |
|
89,899 |
|
|
(12,246 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
263,528 |
|
|
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.
LA-Z-BOY
INCORPORATEDSEGMENT INFORMATION
|
|
Quarter Ended |
|
Six Months Ended |
(Unaudited, amounts in thousands) |
|
10/24/20 |
|
10/26/19 |
|
10/24/20 |
|
10/26/19 |
Sales |
|
|
|
|
|
|
|
|
Wholesale segment: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
$ |
266,189 |
|
|
$ |
277,221 |
|
|
$ |
445,944 |
|
|
$ |
529,994 |
|
Intersegment sales |
|
76,827 |
|
|
73,024 |
|
|
120,645 |
|
|
140,802 |
|
Wholesale segment sales |
|
343,016 |
|
|
350,245 |
|
|
566,589 |
|
|
670,796 |
|
|
|
|
|
|
|
|
|
|
Retail segment sales |
|
162,275 |
|
|
148,404 |
|
|
253,412 |
|
|
291,400 |
|
|
|
|
|
|
|
|
|
|
Corporate and Other: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
30,656 |
|
|
21,587 |
|
|
45,222 |
|
|
39,451 |
|
Intersegment sales |
|
3,061 |
|
|
2,724 |
|
|
5,236 |
|
|
5,412 |
|
Corporate and Other sales |
|
33,717 |
|
|
24,311 |
|
|
50,458 |
|
|
44,863 |
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
(79,888 |
) |
|
(75,748 |
) |
|
(125,881 |
) |
|
(146,214 |
) |
Consolidated sales |
|
$ |
459,120 |
|
|
$ |
447,212 |
|
|
$ |
744,578 |
|
|
$ |
860,845 |
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
41,683 |
|
|
$ |
34,285 |
|
|
$ |
59,623 |
|
|
$ |
63,149 |
|
Retail segment |
|
15,093 |
|
|
8,412 |
|
|
8,466 |
|
|
16,889 |
|
Corporate and Other |
|
(8,837 |
) |
|
(13,096 |
) |
|
(15,825 |
) |
|
(27,015 |
) |
Consolidated operating income |
|
$ |
47,939 |
|
|
$ |
29,601 |
|
|
$ |
52,264 |
|
|
$ |
53,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY
INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES
|
|
Quarter Ended |
|
Six Months Ended |
(Amounts in thousands, except per share data) |
|
10/24/20 |
|
10/26/19 |
|
10/24/20 |
|
10/26/19 |
GAAP gross profit |
|
$ |
200,555 |
|
|
$ |
182,389 |
|
|
$ |
316,918 |
|
|
$ |
350,101 |
|
Add back: Purchase accounting charges - incremental expense upon
the sale of inventory acquired at fair value |
|
133 |
|
|
198 |
|
|
430 |
|
|
315 |
|
Add back: Business realignment charges |
|
235 |
|
|
— |
|
|
1,305 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
— |
|
|
2,754 |
|
|
(50 |
) |
|
4,262 |
|
Non-GAAP gross profit |
|
$ |
200,923 |
|
|
$ |
185,341 |
|
|
$ |
318,603 |
|
|
$ |
354,678 |
|
|
|
|
|
|
|
|
|
|
GAAP SG&A |
|
$ |
152,616 |
|
|
$ |
152,788 |
|
|
$ |
264,654 |
|
|
$ |
297,078 |
|
Less: Purchase accounting charges - adjustment to fair value of
contingent consideration and amortization of intangible assets and
retention agreements |
|
(2,756 |
) |
|
(1,191 |
) |
|
(3,478 |
) |
|
(2,383 |
) |
Less: Business realignment charges |
|
(108 |
) |
|
— |
|
|
(2,580 |
) |
|
— |
|
Non-GAAP SG&A |
|
$ |
149,752 |
|
|
$ |
151,597 |
|
|
$ |
258,596 |
|
|
$ |
294,695 |
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
47,939 |
|
|
$ |
29,601 |
|
|
$ |
52,264 |
|
|
$ |
53,023 |
|
Add back: Purchase accounting charges |
|
2,889 |
|
|
1,389 |
|
|
3,908 |
|
|
2,698 |
|
Add back: Business realignment charges |
|
343 |
|
|
— |
|
|
3,885 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
— |
|
|
2,754 |
|
|
(50 |
) |
|
4,262 |
|
Non-GAAP operating income |
|
$ |
51,171 |
|
|
$ |
33,744 |
|
|
$ |
60,007 |
|
|
$ |
59,983 |
|
|
|
|
|
|
|
|
|
|
GAAP income before income
taxes |
|
$ |
47,705 |
|
|
$ |
31,183 |
|
|
$ |
53,539 |
|
|
$ |
54,254 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
3,018 |
|
|
1,555 |
|
|
4,207 |
|
|
3,057 |
|
Add back: Business realignment charges |
|
343 |
|
|
— |
|
|
3,885 |
|
|
— |
|
Add back: Supply chain optimization initiative |
|
— |
|
|
2,754 |
|
|
(50 |
) |
|
4,262 |
|
Less: Pension termination refund |
|
— |
|
|
(1,900 |
) |
|
— |
|
|
(1,900 |
) |
Non-GAAP income before income
taxes |
|
$ |
51,066 |
|
|
$ |
33,592 |
|
|
$ |
61,581 |
|
|
$ |
59,673 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
$ |
34,935 |
|
|
$ |
22,593 |
|
|
$ |
39,733 |
|
|
$ |
40,662 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
3,018 |
|
|
1,555 |
|
|
4,207 |
|
|
3,057 |
|
Less: Tax effect of purchase accounting |
|
(128 |
) |
|
(413 |
) |
|
(413 |
) |
|
(753 |
) |
Add back: Business realignment charges |
|
343 |
|
|
— |
|
|
3,885 |
|
|
— |
|
Less: Tax effect of business realignment charges |
|
(85 |
) |
|
— |
|
|
(940 |
) |
|
— |
|
Add back: Supply chain optimization initiative |
|
— |
|
|
2,754 |
|
|
(50 |
) |
|
4,262 |
|
Less: Tax effect of supply chain optimization initiative |
|
— |
|
|
(731 |
) |
|
12 |
|
|
(1,050 |
) |
Less: Pension termination refund |
|
— |
|
|
(1,900 |
) |
|
— |
|
|
(1,900 |
) |
Add back: Tax effect of pension termination refund |
|
— |
|
|
504 |
|
|
— |
|
|
468 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
$ |
38,083 |
|
|
$ |
24,362 |
|
|
$ |
46,434 |
|
|
$ |
44,746 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated per diluted share |
|
$ |
0.75 |
|
|
$ |
0.48 |
|
|
$ |
0.86 |
|
|
$ |
0.86 |
|
Add back: Purchase accounting charges, net of tax, per share |
|
0.06 |
|
|
0.03 |
|
|
0.08 |
|
|
0.05 |
|
Add back: Business realignment charges, net of tax, per share |
|
0.01 |
|
|
— |
|
|
0.07 |
|
|
— |
|
Add back: Supply chain optimization initiative, net of tax, per
share |
|
— |
|
|
0.04 |
|
|
— |
|
|
0.07 |
|
Less: Pension termination refund, net of tax, per share |
|
— |
|
|
(0.03 |
) |
|
— |
|
|
(0.03 |
) |
Non-GAAP net income
attributable to La-Z-Boy Incorporated per diluted share |
|
$ |
0.82 |
|
|
$ |
0.52 |
|
|
$ |
1.01 |
|
|
$ |
0.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY
INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURESSEGMENT INFORMATION
|
|
Quarter Ended |
|
Six Months Ended |
(Amounts in thousands) |
|
10/24/20 |
|
% of sales |
|
10/26/19 |
|
% of sales |
|
10/24/20 |
|
% of sales |
|
10/26/19 |
|
% of sales |
GAAP operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
41,683 |
|
|
|
12.2 |
% |
|
$ |
34,285 |
|
|
|
9.8 |
% |
|
$ |
59,623 |
|
|
|
10.5 |
% |
|
$ |
63,149 |
|
|
|
9.4 |
% |
Retail segment |
|
15,093 |
|
|
|
9.3 |
% |
|
8,412 |
|
|
|
5.7 |
% |
|
8,466 |
|
|
|
3.3 |
% |
|
16,889 |
|
|
|
5.8 |
% |
Corporate and Other |
|
(8,837 |
) |
|
|
N/M |
|
|
(13,096 |
) |
|
|
N/M |
|
|
(15,825 |
) |
|
|
N/M |
|
|
(27,015 |
) |
|
|
N/M |
|
Consolidated GAAP operating income |
|
$ |
47,939 |
|
|
|
10.4 |
% |
|
$ |
29,601 |
|
|
|
6.6 |
% |
|
$ |
52,264 |
|
|
|
7.0 |
% |
|
$ |
53,023 |
|
|
|
6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP items affecting
operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
226 |
|
|
|
|
|
$ |
2,808 |
|
|
|
|
|
$ |
3,230 |
|
|
|
|
|
$ |
4,371 |
|
|
|
|
Retail segment |
|
148 |
|
|
|
|
|
198 |
|
|
|
|
|
613 |
|
|
|
|
|
315 |
|
|
|
|
Corporate and Other |
|
2,858 |
|
|
|
|
|
1,137 |
|
|
|
|
|
3,900 |
|
|
|
|
|
2,274 |
|
|
|
|
Consolidated Non-GAAP items affecting operating income |
|
$ |
3,232 |
|
|
|
|
|
$ |
4,143 |
|
|
|
|
|
$ |
7,743 |
|
|
|
|
|
$ |
6,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
41,909 |
|
|
|
12.2 |
% |
|
$ |
37,093 |
|
|
|
10.6 |
% |
|
$ |
62,853 |
|
|
|
11.1 |
% |
|
$ |
67,520 |
|
|
|
10.1 |
% |
Retail segment |
|
15,241 |
|
|
|
9.4 |
% |
|
8,610 |
|
|
|
5.8 |
% |
|
9,079 |
|
|
|
3.6 |
% |
|
17,204 |
|
|
|
5.9 |
% |
Corporate and Other |
|
(5,979 |
) |
|
|
N/M |
|
|
(11,959 |
) |
|
|
N/M |
|
|
(11,925 |
) |
|
|
N/M |
|
|
(24,741 |
) |
|
|
N/M |
|
Consolidated Non-GAAP operating income |
|
$ |
51,171 |
|
|
|
11.1 |
% |
|
$ |
33,744 |
|
|
|
7.5 |
% |
|
$ |
60,007 |
|
|
|
8.1 |
% |
|
$ |
59,983 |
|
|
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact: |
|
Kathy Liebmann |
|
(734) 241-2438 |
|
kathy.liebmann@la-z-boy.com |
|
|
|
|
|
|
|
La Z Boy (NYSE:LZB)
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From Aug 2024 to Sep 2024
La Z Boy (NYSE:LZB)
Historical Stock Chart
From Sep 2023 to Sep 2024