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La-Z-Boy Reports Record Fiscal 2023 Second-Quarter Results; Increases Dividend By 10%

La-Z-Boy Incorporated
La-Z-Boy Incorporated

MONROE, Mich., Nov. 30, 2022 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, today reported record-setting second-quarter results for the period ending October 29, 2022.

Fiscal 2023 second-quarter highlights versus prior year:

  • Consolidated sales increased 6% to $611 million, a second-quarter record

  • GAAP operating profit increased by 14%
    - Non-GAAP operating profit increased by 19%
    - GAAP operating margin increased 70 basis points to 10.1%
    - Non-GAAP operating margin increased 100 basis points to 10.0%

  • GAAP EPS increased by 20%
    - Non-GAAP EPS increased by 24%

  • Retail segment sales increased 31% to $252 million, an all-time quarterly record
    - Operating profit also all-time quarterly record

Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy Incorporated, said, "We delivered record second-quarter sales and operating performance in a challenging environment led by our company-owned Retail business. Strong supply chain execution in the period allowed us to reduce our backlog and improve service to customers and consumers as we continue to shorten lead times and move closer to delivering on our brand promise — quality custom furniture with speed to market. On the strength of that value proposition, our business remains larger than pre-pandemic levels as consumers continue to place a value on the comfort of their homes and entrust La-Z-Boy to deliver it."

Whittington added, "As we face near-term macroeconomic and geopolitical headwinds that have slowed the pace of written sales, we are operating from a position of brand and financial strength. We remain focused on the long term, controlling what we can, and positioning the company to move through this period with ongoing operational excellence. We are pivoting quickly to respond to market dynamics, including proactively aligning our cost structure with demand, and making prudent investments to drive long-term profitable growth through Century Vision. As we tackle what lies ahead, we are confident we will navigate the environment well, build for the future, and emerge stronger while increasing market share throughout these challenging times."

Key Results:

 

 

Quarter Ended

 

 

(Unaudited, amounts in thousands, except per share data)

 

10/29/2022

 

10/23/2021

 

Change

Sales

 

$

611,332

 

$

575,889

 

6%

 

 

 

 

 

 

 

GAAP operating income

 

 

61,883

 

 

54,113

 

14%

Non-GAAP operating income

 

 

61,146

 

 

51,595

 

19%

 

 

 

 

 

 

 

GAAP operating margin

 

 

10.1%

 

 

9.4%

 

70 bps

Non-GAAP operating margin

 

 

10.0%

 

 

9.0%

 

100 bps

 

 

 

 

 

 

 

GAAP net income attributable to La-Z-Boy Incorporated

 

 

46,077

 

 

39,516

 

17%

Non-GAAP net income attributable to La-Z-Boy Incorporated

 

 

45,357

 

 

37,896

 

20%

 

 

 

 

 

 

 

Diluted weighted average common shares

 

 

43,182

 

 

44,423

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

 

$

1.07

 

$

0.89

 

20%

Non-GAAP diluted earnings per share

 

$

1.05

 

$

0.85

 

24%

Liquidity Measures:

 

 

Six Months Ended

 

 

 

Six Months Ended

(Unaudited, amounts in thousands)

 

10/29/2022

 

10/23/2021

 

(Unaudited, amounts in thousands)

 

10/29/2022

 

10/23/2021

Free Cash Flow

 

 

 

 

 

Cash Returns to Shareholders

 

 

 

 

Operating cash flow

 

$

30,954

 

 

$

15,434

 

 

Share repurchases

 

$

5,004

 

$

50,640

Capital expenditures

 

 

(40,442

)

 

 

(33,314

)

 

Dividends

 

 

14,161

 

 

13,398

Free cash flow

 

$

(9,488

)

 

$

(17,880

)

 

Cash returns to shareholders

 

$

19,165

 

$

64,038


(Unaudited, amounts in thousands)

 

10/29/2022

 

10/23/2021

Cash and cash equivalents

 

$

204,626

 

$

293,341

Restricted cash

 

 

3,268

 

 

3,266

Total cash, cash equivalents and restricted cash

 

$

207,894

 

$

296,607

FY23 Q2 Results vs. FY22 Q2:

Consolidated Results:

  • Consolidated sales in the second quarter of fiscal 2023 increased 6% to $611 million, with the realization of pricing and surcharge actions and the positive effects of a favorable product and channel mix offsetting lower delivered unit volume

  • Consolidated GAAP operating margin was 10.1% versus 9.4%

  • Consolidated non-GAAP(1) operating margin was 10.0% versus 9.0%
     - Improved operating margin was driven primarily by a focus on manufacturing and delivering our consumer sold backlog for our company-owned Retail stores and the benefit of pricing and surcharge actions, partially offset by higher input costs and marketing investments

  • GAAP diluted EPS increased 20% to $1.07 from $0.89; non-GAAP(1) diluted EPS increased 24% to $1.05 from $0.85

Retail Segment:

  • Sales:
     - Delivered sales increased 31% to an all-time quarterly record of $252 million; delivered same-store sales increased 25%, as we improved service to consumers and moved closer to pre-pandemic lead times in the period
     - Total written sales for the company-owned La-Z-Boy Furniture Galleries® stores (the company's Retail segment) decreased 5%, reflecting softer demand across the industry driven by economic uncertainty and weaker consumer sentiment

    • Written same-store sales for the company-owned La-Z-Boy Furniture Galleries® stores decreased 10%

    • Written same-store sales were 12% higher than pre-pandemic levels (FY20 Q2)

  • Operating Performance:
     - Non-GAAP(1) operating margin and operating profit increased to all-time records of 16.5%, and $42 million, respectively, versus 12.5%, and $24 million in last year's second quarter, primarily driven by fixed-cost leverage on higher delivered sales volume

Wholesale Segment:

  • Sales:
     - Increased 2% to a second-quarter record of $446 million driven by the realization of pricing and surcharge actions coupled with favorable channel and product mix; these factors were partially offset by lower volume, primarily the result of some dealers delaying receipt of finished goods due to warehouse constraints

  • Operating Margin:
     - Non-GAAP(1) operating margin was 8.6%, 50 basis points below prior year; pricing and surcharge actions were more than offset by increased raw material costs, plant inefficiencies due to lower volume, and increased marketing spend to pre-pandemic levels

Corporate & Other:

  • Joybird delivered sales decreased 5% to $38 million, and written sales declined 27% versus the year-ago second quarter, reflecting both slowing e-commerce trends and the effects of changes in campaign execution with a key marketing partner which have since been reversed

  • Joybird posted a loss for the period, primarily reflecting lower volume, an unfavorable shift in product mix, and a lower return on advertising spend

Balance Sheet and Cash Flow as of FY23 Q2

  • Ended the quarter with $208 million in cash(2) and $19 million in short-term investments to enhance returns on cash, and no external debt

  • Year to date, generated $31 million in cash from operating activities versus $15 million in the prior-year six-month period

  • Year to date, spent $40 million on capital expenditures, primarily related to La-Z-Boy Furniture Galleries® store projects, new stores, and upgrades at our manufacturing and distribution facilities

  • Year to date, returned $19 million to shareholders, including $14 million in dividends and $5 million in share repurchases; the company has approximately 7.3 million shares available for repurchase under its authorized share repurchase program

Dividend

On November 30, 2022, the Board of Directors declared a quarterly cash dividend of $0.1815 per share on the common stock of the company, an increase of 10% over the prior quarter. The dividend will be paid on December 20, 2022, to shareholders of record on December 12, 2022.

Outlook

Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated, said, "As we successfully reduce our backlog to enable pre-pandemic consumer lead times, we expect the second half of our fiscal year to be impacted by continued external headwinds on consumer demand. As a result, we estimate delivered sales for the fiscal 2023 third quarter to be in a range of about $525 million to $535 million, and consolidated non-GAAP operating margin to be in a range of about 7.0% to 7.5%."

_____
(1)Non-GAAP amounts for the second quarter of fiscal 2023 exclude:

  • a purchase accounting benefit related to acquisitions completed in prior periods totaling $0.4 million pre-tax, or $0.01 per diluted share, primarily due to the write-off of the Joybird contingent consideration liability based on forecasted future performance, with $0.4 million included in operating income and less than $0.1 million included in interest expense.

  • a benefit of $0.3 million pre-tax, or $0.01 per diluted share, related to our business realignment plan, including costs associated with the closure of our Newton, Mississippi manufacturing facility.

Non-GAAP amounts for the second quarter of fiscal 2022 exclude:

  • purchase accounting charges related to acquisitions completed in prior periods totaling $0.9 million pre-tax, or $0.02 per diluted share, with $0.8 million included in operating income and $0.1 million included in interest expense.

  • a $3.3 million pre-tax, or $0.06 per diluted share, gain on the sale of the Newton, Mississippi facility related to the company's business realignment, announced in June 2020.

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)Cash includes cash, cash equivalents and restricted cash

Conference Call

La-Z-Boy will hold a conference call with the investment community on Thursday, December 1, 2022, at 8:30 a.m. Eastern time. The toll-free dial-in number is 888.506.0062; international callers may use 973.528.0011. Enter Participant Access Code 642911.

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: 46910. 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 coronavirus (“COVID”) 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. 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 2022 Annual Report on Form 10-K and other factors identified in our reports filed with the Securities and Exchange Commission (the "SEC"), available on the SEC's website at www.sec.gov. 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 SEC, 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®, Kincaid® and the company's international wholesale and manufacturing businesses. The company-owned Retail segment includes 169 of the 351 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 351 stand-alone La-Z-Boy Furniture Galleries® stores and 526 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, and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share (and components thereof, including Non-GAAP income before income taxes, Non-GAAP net income attributable to La-Z-Boy Incorporated), which may exclude, as applicable, business realignment charges and purchase accounting charges. 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 response to COVID, including a reduction in the company's work force, temporary closure of certain manufacturing facilities and subsequent gains resulting from the sale of related assets. 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. 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.

In addition, this press release references the Non-GAAP financial measure of “Non-GAAP operating margin” for a future period. Non-GAAP operating margin may exclude items such as pre-tax purchase accounting charges and pre-tax business realignment charges. These and other not presently determinable items could have a material impact on the determination of operating margin on a GAAP basis and due to the probable variability and limited visibility of excluded items, therefore, we have not provided a reconciliation of Non-GAAP operating margin for future periods in this press release.

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 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, except for the non-tax deductible goodwill impairment charge and the adjustment to the fair value of contingent consideration which reflects the associated GAAP tax impact in the period presented.

Contact: Kathy Liebmann

(734) 241-2438

kathy.liebmann@la-z-boy.com

                                           

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

 

 

Quarter Ended

 

Six Months Ended

(Unaudited, amounts in thousands, except per share data)

 

10/29/2022

 

10/23/2021

 

10/29/2022

 

10/23/2021

Sales

 

$

611,332

 

 

$

575,889

 

 

$

1,215,423

 

 

$

1,100,672

 

Cost of sales

 

 

350,596

 

 

 

352,594

 

 

 

713,227

 

 

 

675,295

 

Gross profit

 

 

260,736

 

 

 

223,295

 

 

 

502,196

 

 

 

425,377

 

Selling, general and administrative expense

 

 

198,853

 

 

 

169,182

 

 

 

387,670

 

 

 

336,893

 

Operating income

 

 

61,883

 

 

 

54,113

 

 

 

114,526

 

 

 

88,484

 

Interest expense

 

 

(119

)

 

 

(242

)

 

 

(278

)

 

 

(553

)

Interest income

 

 

1,138

 

 

 

106

 

 

 

1,612

 

 

 

223

 

Other income (expense), net

 

 

183

 

 

 

1,031

 

 

 

228

 

 

 

938

 

Income before income taxes

 

 

63,085

 

 

 

55,008

 

 

 

116,088

 

 

 

89,092

 

Income tax expense

 

 

16,306

 

 

 

14,650

 

 

 

30,369

 

 

 

23,468

 

Net income

 

 

46,779

 

 

 

40,358

 

 

 

85,719

 

 

 

65,624

 

Net income attributable to noncontrolling interests

 

 

(702

)

 

 

(842

)

 

 

(1,154

)

 

 

(1,542

)

Net income attributable to La-Z-Boy Incorporated

 

$

46,077

 

 

$

39,516

 

 

$

84,565

 

 

$

64,082

 

 

 

 

 

 

 

 

 

 

Basic weighted average common shares

 

 

43,104

 

 

 

44,251

 

 

 

43,098

 

 

 

44,662

 

Basic net income attributable to La-Z-Boy Incorporated per share

 

$

1.07

 

 

$

0.89

 

 

$

1.96

 

 

$

1.43

 

 

 

 

 

 

 

 

 

 

Diluted weighted average common shares

 

 

43,182

 

 

 

44,423

 

 

 

43,174

 

 

 

44,915

 

Diluted net income attributable to La-Z-Boy Incorporated per share

 

$

1.07

 

 

$

0.89

 

 

$

1.96

 

 

$

1.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET

(Unaudited, amounts in thousands, except par value)

 

10/29/2022

 

4/30/2022

Current assets

 

 

 

 

Cash and equivalents

 

$

204,626

 

 

$

245,589

 

Restricted cash

 

 

3,268

 

 

 

3,267

 

Receivables, net of allowance of $3,946 at 10/29/2022 and $3,406 at 4/30/2022

 

 

160,035

 

 

 

183,747

 

Inventories, net

 

 

342,728

 

 

 

303,191

 

Other current assets

 

 

146,656

 

 

 

215,982

 

Total current assets

 

 

857,313

 

 

 

951,776

 

Property, plant and equipment, net

 

 

269,240

 

 

 

253,144

 

Goodwill

 

 

203,459

 

 

 

194,604

 

Other intangible assets, net

 

 

38,640

 

 

 

33,971

 

Deferred income taxes – long-term

 

 

10,633

 

 

 

10,632

 

Right of use lease assets

 

 

404,495

 

 

 

405,755

 

Other long-term assets, net

 

 

73,760

 

 

 

82,207

 

Total assets

 

$

1,857,540

 

 

$

1,932,089

 

 

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$

106,614

 

 

$

104,025

 

Lease liabilities, short-term

 

 

77,100

 

 

 

75,271

 

Accrued expenses and other current liabilities

 

 

367,008

 

 

 

496,393

 

Total current liabilities

 

 

550,722

 

 

 

675,689

 

Lease liabilities, long-term

 

 

353,444

 

 

 

354,843

 

Other long-term liabilities

 

 

69,588

 

 

 

81,935

 

Shareholders' equity

 

 

 

 

Preferred shares – 5,000 authorized; none issued

 

 

 

 

 

 

Common shares, $1.00 par value – 150,000 authorized; 43,136 outstanding at 10/29/22 and 43,089 outstanding at 4/30/22

 

 

43,136

 

 

 

43,089

 

Capital in excess of par value

 

 

347,036

 

 

 

342,252

 

Retained earnings

 

 

495,003

 

 

 

431,181

 

Accumulated other comprehensive loss

 

 

(10,517

)

 

 

(5,797

)

Total La-Z-Boy Incorporated shareholders' equity

 

 

874,658

 

 

 

810,725

 

Noncontrolling interests

 

 

9,128

 

 

 

8,897

 

Total equity

 

 

883,786

 

 

 

819,622

 

Total liabilities and equity

 

$

1,857,540

 

 

$

1,932,089

 

 

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

Six Months Ended

(Unaudited, amounts in thousands)

 

10/29/2022

 

10/23/2021

Cash flows from operating activities

 

 

 

 

Net income

 

$

85,719

 

 

$

65,624

 

Adjustments to reconcile net income to cash provided by operating activities

 

 

 

 

(Gain)/loss on disposal of assets

 

 

1

 

 

 

(3,151

)

(Gain)/loss on sale of investments

 

 

77

 

 

 

(218

)

Provision for doubtful accounts

 

 

694

 

 

 

(944

)

Depreciation and amortization

 

 

19,258

 

 

 

17,785

 

Amortization of right-of-use lease assets

 

 

38,580

 

 

 

34,368

 

Equity-based compensation expense

 

 

5,079

 

 

 

6,354

 

Change in deferred taxes

 

 

27

 

 

 

170

 

Change in receivables

 

 

19,550

 

 

 

(33,937

)

Change in inventories

 

 

(36,771

)

 

 

(59,336

)

Change in other assets

 

 

4,890

 

 

 

(20,666

)

Change in payables

 

 

8,027

 

 

 

22,683

 

Change in lease liabilities

 

 

(39,380

)

 

 

(34,598

)

Change in other liabilities

 

 

(74,797

)

 

 

21,300

 

Net cash provided by operating activities

 

 

30,954

 

 

 

15,434

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Proceeds from disposals of assets

 

 

63

 

 

 

3,998

 

Capital expenditures

 

 

(40,442

)

 

 

(33,314

)

Purchases of investments

 

 

(4,714

)

 

 

(21,426

)

Proceeds from sales of investments

 

 

12,660

 

 

 

22,666

 

Acquisitions

 

 

(11,705

)

 

 

(4,396

)

Net cash used for investing activities

 

 

(44,138

)

 

 

(32,472

)

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Payments on debt and finance lease liabilities

 

 

(61

)

 

 

(60

)

Holdback payments for acquisition purchases

 

 

(5,000

)

 

 

(13,500

)

Stock issued for stock and employee benefit plans, net of shares withheld for taxes

 

 

(1,711

)

 

 

(1,870

)

Repurchases of common stock

 

 

(5,004

)

 

 

(50,640

)

Dividends paid to shareholders

 

 

(14,161

)

 

 

(13,398

)

Dividends paid to minority interest joint venture partners (1)

 

 

 

 

 

(1,260

)

Net cash used for financing activities

 

 

(25,937

)

 

 

(80,728

)

 

 

 

 

 

Effect of exchange rate changes on cash and equivalents

 

 

(1,841

)

 

 

(330

)

Change in cash, cash equivalents and restricted cash

 

 

(40,962

)

 

 

(98,096

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

248,856

 

 

 

394,703

 

Cash, cash equivalents and restricted cash at end of period

 

$

207,894

 

 

$

296,607

 

 

 

 

 

 

Supplemental disclosure of non-cash investing activities

 

 

 

 

Capital expenditures included in payables

 

$

4,251

 

 

$

7,900

 

 

 

 

 

 

 

 

 

 


(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 INCORPORATED
SEGMENT INFORMATION

 

 

Quarter Ended

 

Six Months Ended

(Unaudited, amounts in thousands)

 

10/29/2022

 

10/23/2021

 

10/29/2022

 

10/23/2021

Sales

 

 

 

 

 

 

 

 

Wholesale segment:

 

 

 

 

 

 

 

 

Sales to external customers

 

$

319,613

 

 

$

341,823

 

 

$

643,341

 

 

$

645,440

 

Intersegment sales

 

 

126,618

 

 

 

97,269

 

 

 

244,708

 

 

 

187,151

 

Wholesale segment sales

 

 

446,231

 

 

 

439,092

 

 

 

888,049

 

 

 

832,591

 

 

 

 

 

 

 

 

 

 

Retail segment sales

 

 

252,152

 

 

 

192,420

 

 

 

488,173

 

 

 

374,267

 

 

 

 

 

 

 

 

 

 

Corporate and Other:

 

 

 

 

 

 

 

 

Sales to external customers

 

 

39,567

 

 

 

41,646

 

 

 

83,909

 

 

 

80,965

 

Intersegment sales

 

 

4,070

 

 

 

3,367

 

 

 

8,458

 

 

 

7,682

 

Corporate and Other sales

 

 

43,637

 

 

 

45,013

 

 

 

92,367

 

 

 

88,647

 

 

 

 

 

 

 

 

 

 

Eliminations

 

 

(130,688

)

 

 

(100,636

)

 

 

(253,166

)

 

 

(194,833

)

Consolidated sales

 

$

611,332

 

 

$

575,889

 

 

$

1,215,423

 

 

$

1,100,672

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

Wholesale segment

 

$

38,476

 

 

$

43,128

 

 

$

64,618

 

 

$

61,459

 

Retail segment

 

 

41,500

 

 

 

23,962

 

 

 

79,652

 

 

 

44,400

 

Corporate and Other

 

 

(18,093

)

 

 

(12,977

)

 

 

(29,744

)

 

 

(17,375

)

Consolidated operating income

 

$

61,883

 

 

$

54,113

 

 

$

114,526

 

 

$

88,484

 

 

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

 

 

Quarter Ended

 

Six Months Ended

(Amounts in thousands, except per share data)

 

10/29/2022

 

10/23/2021

 

10/29/2022

 

10/23/2021

GAAP gross profit

 

$

260,736

 

 

$

223,295

 

 

$

502,196

 

 

$

425,377

 

Purchase accounting charges - incremental expense upon the sale of inventory acquired at fair value

 

 

132

 

 

 

 

 

 

132

 

 

 

 

Business realignment (gain)/charges

 

 

(319

)

 

 

 

 

 

609

 

 

 

 

Non-GAAP gross profit

 

$

260,549

 

 

$

223,295

 

 

$

502,937

 

 

$

425,377

 

 

 

 

 

 

 

 

 

 

GAAP SG&A

 

$

198,853

 

 

$

169,182

 

 

$

387,670

 

 

$

336,893

 

Purchase accounting gain/(charges) - adjustment to the fair value of contingent consideration, amortization of intangible assets and retention agreements

 

 

550

 

 

 

(759

)

 

 

298

 

 

 

(1,019

)

Business realignment gain

 

 

 

 

 

3,277

 

 

 

 

 

 

3,277

 

Non-GAAP SG&A

 

$

199,403

 

 

$

171,700

 

 

$

387,968

 

 

$

339,151

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

$

61,883

 

 

$

54,113

 

 

$

114,526

 

 

$

88,484

 

Purchase accounting (gain)/charges

 

 

(418

)

 

 

759

 

 

 

(166

)

 

 

1,019

 

Business realignment (gain)/charges

 

 

(319

)

 

 

(3,277

)

 

 

609

 

 

 

(3,277

)

Non-GAAP operating income

 

$

61,146

 

 

$

51,595

 

 

$

114,969

 

 

$

86,226

 

 

 

 

 

 

 

 

 

 

GAAP income before income taxes

 

$

63,085

 

 

$

55,008

 

 

$

116,088

 

 

$

89,092

 

Purchase accounting (gain)/charges recorded as part of gross profit, SG&A, and interest expense

 

 

(372

)

 

 

896

 

 

 

(27

)

 

 

1,336

 

Business realignment (gain)/charges

 

 

(319

)

 

 

(3,277

)

 

 

609

 

 

 

(3,277

)

Non-GAAP income before income taxes

 

$

62,394

 

 

$

52,627

 

 

$

116,670

 

 

$

87,151

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to La-Z-Boy Incorporated

 

$

46,077

 

 

$

39,516

 

 

$

84,565

 

 

$

64,082

 

Purchase accounting (gain)/charges recorded as part of gross profit, SG&A and interest expense

 

 

(372

)

 

 

896

 

 

 

(27

)

 

 

1,336

 

Tax effect of purchase accounting

 

 

(112

)

 

 

(105

)

 

 

(203

)

 

 

(219

)

Business realignment (gain)/charges

 

 

(319

)

 

 

(3,277

)

 

 

609

 

 

 

(3,277

)

Tax effect of business realignment

 

 

84

 

 

 

865

 

 

 

(160

)

 

 

859

 

Non-GAAP net income attributable to La-Z-Boy Incorporated

 

$

45,357

 

 

$

37,896

 

 

$

84,784

 

 

$

62,781

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to La-Z-Boy Incorporated per diluted share

 

$

1.07

 

 

$

0.89

 

 

$

1.96

 

 

$

1.43

 

Purchase accounting (gain)/charges, net of tax, per share

 

 

(0.01

)

 

 

0.02

 

 

 

(0.01

)

 

 

0.03

 

Business realignment (gain)/charges, net of tax, per share

 

 

(0.01

)

 

 

(0.06

)

 

 

0.01

 

 

 

(0.06

)

Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share

 

$

1.05

 

 

$

0.85

 

 

$

1.96

 

 

$

1.40

 

 

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

 

 

Quarter Ended

 

Six Months Ended

(Amounts in thousands)

 

10/29/2022

 

% of sales

 

10/23/2021

 

% of sales

 

10/29/2022

 

% of sales

 

10/23/2021

 

% of sales

GAAP operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale segment

 

$

38,476

 

 

8.6

%

 

$

43,128

 

 

9.8

%

 

$

64,618

 

 

7.3

%

 

$

61,459

 

 

7.4

%

Retail segment

 

 

41,500

 

 

16.5

%

 

 

23,962

 

 

12.5

%

 

 

79,652

 

 

16.3

%

 

 

44,400

 

 

11.9

%

Corporate and Other

 

 

(18,093

)

 

N/M

 

 

 

(12,977

)

 

N/M

 

 

 

(29,744

)

 

N/M

 

 

 

(17,375

)

 

N/M

 

Consolidated GAAP operating income

 

$

61,883

 

 

10.1

%

 

$

54,113

 

 

9.4

%

 

$

114,526

 

 

9.4

%

 

$

88,484

 

 

8.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP items affecting operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale segment

 

$

(269

)

 

 

 

$

(3,217

)

 

 

 

$

712

 

 

 

 

$

(3,157

)

 

 

Retail segment

 

 

132

 

 

 

 

 

 

 

 

 

 

132

 

 

 

 

 

 

 

 

Corporate and Other

 

 

(600

)

 

 

 

 

699

 

 

 

 

 

(401

)

 

 

 

 

899

 

 

 

Consolidated Non-GAAP items affecting operating income

 

$

(737

)

 

 

 

$

(2,518

)

 

 

 

$

443

 

 

 

 

$

(2,258

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale segment

 

$

38,207

 

 

8.6

%

 

$

39,911

 

 

9.1

%

 

$

65,330

 

 

7.4

%

 

$

58,302

 

 

7.0

%

Retail segment

 

 

41,632

 

 

16.5

%

 

 

23,962

 

 

12.5

%

 

 

79,784

 

 

16.3

%

 

 

44,400

 

 

11.9

%

Corporate and Other

 

 

(18,693

)

 

N/M

 

 

 

(12,278

)

 

N/M

 

 

 

(30,145

)

 

N/M

 

 

 

(16,476

)

 

N/M

 

Consolidated Non-GAAP operating income

 

$

61,146

 

 

10.0

%

 

$

51,595

 

 

9.0

%

 

$

114,969

 

 

9.5

%

 

$

86,226

 

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N/M - Not Meaningful