La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential
furniture, today reported operating results for the fiscal 2022
second quarter ended October 23, 2021.
Fiscal 2022 second quarter versus Fiscal
2021 second quarter:
- Consolidated sales increased 25% to
$576 million
- Strong written order trends versus
pre-pandemic FY20 Q2
- Consolidated operating margin:
- GAAP: 9.4% versus 10.4%
- Non-GAAP(1): 9.0% versus 11.1%
- Improved sequentially versus 6.6% in the fiscal 2022 first
quarter
- Net income attributable to La-Z-Boy
Incorporated per diluted share (“EPS”):
- GAAP: $0.89 versus $0.75
- Non-GAAP(1): $0.85 versus $0.82
- $22 million returned to
shareholders through share repurchases and dividends in FY22
Q2
Melinda D. Whittington, President and Chief
Executive Officer of La-Z-Boy, said, "La-Z-Boy Incorporated again
delivered all-time, record-high sales for the quarter as we
continued to increase capacity to service ongoing demand and our
significant backlog, and realized pricing and surcharge actions to
help offset rising raw material costs. Even while navigating a
challenging operating environment with significant widespread
supply chain disruption, we delivered strong results, including
improved margins versus last quarter. Our business is much larger
today than it was pre-pandemic, and demand remains robust across
the entire enterprise. With strong brands and vast distribution
through multiple channels, we believe our sales momentum is
sustainable. As we execute Century Vision, our winning strategy for
growth to our Centennial year in 2027, we are making strategic
investments across our business to drive market share gains,
profitable growth and excellent returns for all stakeholders."
Consolidated sales in the second quarter of
fiscal 2022 increased 25% to $576 million versus the fiscal 2021
second quarter, reflecting ongoing capacity increases and pricing
and surcharge actions. Consolidated sales for the fiscal 2022
second quarter were 29% higher than the pre-pandemic fiscal 2020
second quarter, for a compounded annual growth rate of 14% over the
last two years.
Consolidated GAAP operating margin was 9.4%
versus 10.4% in the prior-year second quarter. Consolidated
non-GAAP(1) operating margin was 9.0% versus 11.1% in the
prior-year second quarter and improved sequentially from 6.6% in
the fiscal 2022 first quarter. Operating margin for the period was
primarily impacted by significant increases in commodity and
freight costs, start-up costs associated with the expansion of
manufacturing capacity and labor challenges in the company's
Wholesale business, partially offset by pricing and surcharge
actions and fixed-cost leverage on higher volume.
GAAP diluted EPS increased to $0.89 for the
fiscal 2022 second quarter versus $0.75 in the prior-year quarter.
Non-GAAP(1) diluted EPS increased to $0.85 versus $0.82 in the
prior-year second quarter.
Wholesale Segment:
- Sales:
- Increased 28% to $439 million in
the fiscal 2022 second quarter compared with the fiscal 2021 second
quarter, and increased 12% sequentially from the fiscal 2022 first
quarter as the company increased capacity and realized pricing and
surcharge actions
- Compared with the pre-pandemic
fiscal 2020 second quarter, sales increased 25% in the fiscal 2022
second quarter, for a compounded annual growth rate of 12% over the
two years
- Operating Margin:
- Non-GAAP(1) operating margin in the
fiscal 2022 second quarter was 9.1% versus 12.2% for the prior-year
period, primarily reflecting higher raw material and freight costs,
start-up costs for new facilities, and labor challenges, partially
offset by pricing and surcharge actions and fixed-cost leverage on
higher volume
- Non-GAAP(1) operating margin
improved 440 basis points sequentially from the fiscal 2022 first
quarter operating margin of 4.7%
Written same-store sales for the entire
La-Z-Boy Furniture Galleries®
network:
- Decreased 6.0% for the fiscal 2022
second quarter compared with the unusually strong fiscal 2021
second quarter (+34% versus the fiscal 2020 second quarter)
following COVID-related store closures
- Compared with the pre-pandemic
fiscal 2020 second quarter, written same-store sales increased 26%
for the fiscal 2022 second quarter, for a compounded annual growth
rate of 12% over the two years, reflecting continued significant
growth in the business
Retail segment:
- Delivered sales:
- Increased 19% to $192 million in
the second quarter of fiscal 2022 compared with the prior-year
second quarter
- Compared with the pre-pandemic
fiscal 2020 second quarter, delivered sales increased 30%, for a
compounded annual growth rate of 14% over the two years
- Delivered same-store sales
increased 17% in the fiscal 2022 second quarter versus the year-ago
period
- Written same-store sales for the
company-owned La-Z-Boy Furniture Galleries® stores:
- Decreased 7.2% in the fiscal 2022
second quarter compared with the unusually strong fiscal 2021
second quarter (+36% versus the fiscal 2020 second quarter)
following COVID-related store closures
- Compared with the pre-pandemic
fiscal 2020 second quarter, written same-store sales increased 26%
in the fiscal 2022 second quarter, for a compounded annual growth
rate of 12% over the two years, reflecting positive trends across
all sales metrics, including traffic, conversion, average ticket
and Design sales
- Operating Margin:
- Non-GAAP(1) operating margin
increased to a second-quarter record of 12.5% in the fiscal 2022
second quarter versus 9.4% in the fiscal 2021 second quarter,
primarily driven by fixed-cost leverage on higher delivered sales
volume
Corporate & Other:
- Joybird delivered sales:
- Increased 37% to a record $40
million in the fiscal 2022 second quarter compared with the same
quarter last year which posted a 42% sales increase versus the
prior-year period
- Compared with the pre-pandemic
fiscal 2020 second quarter, delivered sales increased an impressive
93%, representing a compounded annual growth rate of 39%
- Joybird written sales:
- Increased 56% in the fiscal 2022
second quarter compared with the prior-year quarter
- Compared with the pre-pandemic
fiscal 2020 second quarter, written sales increased an inspiring
95%, representing a compounded annual growth rate of 40%,
reflecting continued robust order trends and the strength of the
brand in the online marketplace
- Joybird again turned in a
profitable quarter. With investment in increased marketing to drive
awareness and customer acquisition, Joybird continues to drive
higher web and brick and mortar store traffic, translating to
improved written sales, conversion and average ticket
Balance Sheet and Cash Flow
Fiscal 2022 year to date, the company generated
$15 million in cash from operating activities, after investing
$59 million in higher inventory levels to protect against
supply chain disruptions and to support increased production and
delivered sales.
Over the first half of fiscal 2022, the company
continued to make disciplined investments in the business,
including $33 million in capital expenditures to increase capacity,
remodel stores, open new stores, and upgrade infrastructure. In
addition, the company has continued to return capital to
shareholders, including $13 million in dividends, with $6.6 million
paid in the second quarter, as well as $51 million in share
repurchases, or approximately 1.4 million shares of stock, leaving
approximately 8.6 million shares available for repurchase under its
authorized share repurchase program as of October 23, 2021.
La-Z-Boy ended the period with $297 million in
cash(2) compared with $353 million in cash(2) at the end of the
fiscal 2021 second quarter. The company holds $31 million in
investments to enhance returns on cash versus $27 million at the
end of the fiscal 2021 second quarter.
Dividend
On November 16, 2021, the Board of Directors
declared a quarterly cash dividend of $0.165 per share on the
common stock of the company, an increase of 10% over the prior
quarter. The dividend will be paid on December 15, 2021, to
shareholders of record on December 2, 2021.
Outlook
Bob Lucian, Chief Financial Officer of La-Z-Boy
Incorporated, said, "Demand trends remain strong, our backlog is
high and we expect delivered sales to continue to strengthen,
particularly in the fourth quarter as new production cells come
online. At the same time, we expect continued supply chain
disruptions, including a temporary, but significant, slowdown in
our casegoods business due to COVID-related shutdowns in Vietnam.
Quarterly trends will also be impacted by our third and fourth
quarters containing 12 and 14 production weeks, respectively,
compared to 13 production weeks in our second quarter. Taking all
of these factors into consideration, we continue to expect sales
and margin momentum to accelerate, particularly in the fourth
quarter, and we continue to expect to deliver full-year
consolidated operating margin at or near double digits."
_____(1)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. The company continues to operate a portion of this
facility
Non-GAAP amounts for the second quarter
of fiscal 2021 exclude:
- purchase accounting charges related
to acquisitions completed in prior periods totaling $3.0 million
pre-tax, 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 charge of $0.3 million pre-tax,
or $0.01 per diluted share, 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 Wednesday, November 17, 2021, 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
206517.
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:
43533. 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 2021 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®, and Kincaid®. The
company-owned Retail segment includes 159 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 560 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 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. 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. 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, we
have not provided a reference to future period GAAP operating
margin or a reconciliation of non-GAAP operating margin for future
periods in this press release. 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 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)
241-2438kathy.liebmann@la-z-boy.com
LA-Z-BOY
INCORPORATEDCONSOLIDATED STATEMENT OF
INCOME
|
|
Quarter Ended |
|
Six Months Ended |
(Unaudited, amounts in thousands, except per share
data) |
|
10/23/2021 |
|
10/24/2020 |
|
10/23/2021 |
|
10/24/2020 |
Sales |
|
$ |
575,889 |
|
|
$ |
459,120 |
|
|
$ |
1,100,672 |
|
|
$ |
744,578 |
|
Cost of sales |
|
352,594 |
|
|
258,565 |
|
|
675,295 |
|
|
427,660 |
|
Gross profit |
|
223,295 |
|
|
200,555 |
|
|
425,377 |
|
|
316,918 |
|
Selling, general and administrative expense |
|
169,182 |
|
|
152,616 |
|
|
336,893 |
|
|
264,654 |
|
Operating income |
|
54,113 |
|
|
47,939 |
|
|
88,484 |
|
|
52,264 |
|
Interest expense |
|
(242 |
) |
|
(346 |
) |
|
(553 |
) |
|
(805 |
) |
Interest income |
|
106 |
|
|
123 |
|
|
223 |
|
|
617 |
|
Other income (expense),
net |
|
1,031 |
|
|
(11 |
) |
|
938 |
|
|
1,463 |
|
Income before income taxes |
|
55,008 |
|
|
47,705 |
|
|
89,092 |
|
|
53,539 |
|
Income tax expense |
|
14,650 |
|
|
12,401 |
|
|
23,468 |
|
|
13,556 |
|
Net income |
|
40,358 |
|
|
35,304 |
|
|
65,624 |
|
|
39,983 |
|
Net (income) loss attributable
to noncontrolling interests |
|
(842 |
) |
|
(369 |
) |
|
(1,542 |
) |
|
(250 |
) |
Net income attributable to La-Z-Boy Incorporated |
|
$ |
39,516 |
|
|
$ |
34,935 |
|
|
$ |
64,082 |
|
|
$ |
39,733 |
|
|
|
|
|
|
|
|
|
|
Basic weighted average common
shares |
|
44,251 |
|
|
46,023 |
|
|
44,662 |
|
|
45,966 |
|
Basic net income attributable
to La-Z-Boy Incorporated per share |
|
$ |
0.89 |
|
|
$ |
0.76 |
|
|
$ |
1.43 |
|
|
$ |
0.86 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted average
common shares |
|
44,423 |
|
|
46,323 |
|
|
44,915 |
|
|
46,167 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.89 |
|
|
$ |
0.75 |
|
|
$ |
1.43 |
|
|
$ |
0.86 |
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED BALANCE
SHEET
(Unaudited, amounts in thousands, except par
value) |
|
10/23/2021 |
|
4/24/2021 |
Current assets |
|
|
|
|
Cash and equivalents |
|
$ |
293,341 |
|
|
$ |
391,213 |
|
Restricted cash |
|
3,266 |
|
|
3,490 |
|
Receivables, net of allowance of $3,016 at 10/23/2021 and $4,011 at
4/24/2021 |
|
173,998 |
|
|
139,341 |
|
Inventories, net |
|
285,770 |
|
|
226,137 |
|
Other current assets |
|
208,793 |
|
|
165,979 |
|
Total current assets |
|
965,168 |
|
|
926,160 |
|
Property, plant and equipment,
net |
|
237,518 |
|
|
219,194 |
|
Goodwill |
|
180,108 |
|
|
175,814 |
|
Other intangible assets,
net |
|
30,738 |
|
|
30,431 |
|
Deferred income taxes –
long-term |
|
11,727 |
|
|
11,915 |
|
Right of use lease assets |
|
341,363 |
|
|
343,800 |
|
Other long-term assets,
net |
|
85,472 |
|
|
79,008 |
|
Total assets |
|
$ |
1,852,094 |
|
|
$ |
1,786,322 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
119,971 |
|
|
$ |
94,152 |
|
Lease liabilities, current |
|
67,859 |
|
|
67,614 |
|
Accrued expenses and other current liabilities |
|
492,710 |
|
|
449,904 |
|
Total current liabilities |
|
680,540 |
|
|
611,670 |
|
Lease liabilities,
long-term |
|
294,252 |
|
|
295,023 |
|
Other long-term
liabilities |
|
91,620 |
|
|
97,483 |
|
Shareholders' equity |
|
|
|
|
Preferred shares – 5,000 authorized; none issued |
|
— |
|
|
— |
|
Common shares, $1.00 par value – 150,000 authorized; 44,200
outstanding at 10/23/21 and 45,361 outstanding at 4/24/21 |
|
44,200 |
|
|
45,361 |
|
Capital in excess of par value |
|
336,920 |
|
|
330,648 |
|
Retained earnings |
|
398,335 |
|
|
399,010 |
|
Accumulated other comprehensive loss |
|
(2,153 |
) |
|
(1,521 |
) |
Total La-Z-Boy Incorporated shareholders' equity |
|
777,302 |
|
|
773,498 |
|
Noncontrolling interests |
|
8,380 |
|
|
8,648 |
|
Total equity |
|
785,682 |
|
|
782,146 |
|
Total liabilities and equity |
|
$ |
1,852,094 |
|
|
$ |
1,786,322 |
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
Six Months Ended |
(Unaudited, amounts in thousands) |
|
10/23/2021 |
|
10/24/2020 |
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
65,624 |
|
|
$ |
39,983 |
|
Adjustments to reconcile net income to cash provided by operating
activities |
|
|
|
|
(Gain)/loss on disposal of assets |
|
(3,151 |
) |
|
140 |
|
Gain on sale of investments |
|
(218 |
) |
|
(284 |
) |
Provision for doubtful accounts |
|
(944 |
) |
|
(1,568 |
) |
Depreciation and amortization |
|
17,785 |
|
|
16,351 |
|
Amortization of right-of-use lease assets |
|
34,368 |
|
|
35,137 |
|
Equity-based compensation expense |
|
6,354 |
|
|
6,167 |
|
Change in deferred taxes |
|
170 |
|
|
1,849 |
|
Change in receivables |
|
(33,937 |
) |
|
(28,949 |
) |
Change in inventories |
|
(59,336 |
) |
|
(3,511 |
) |
Change in other assets |
|
(20,666 |
) |
|
(1,926 |
) |
Change in payables |
|
22,683 |
|
|
33,236 |
|
Change in lease liabilities |
|
(34,598 |
) |
|
(32,422 |
) |
Change in other liabilities |
|
21,300 |
|
|
131,507 |
|
Net cash provided by operating activities |
|
15,434 |
|
|
195,710 |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Proceeds from disposals of assets |
|
3,998 |
|
|
21 |
|
Capital expenditures |
|
(33,314 |
) |
|
(15,442 |
) |
Purchases of investments |
|
(21,426 |
) |
|
(17,649 |
) |
Proceeds from sales of investments |
|
22,666 |
|
|
19,470 |
|
Acquisitions |
|
(4,396 |
) |
|
(2,000 |
) |
Net cash used for investing activities |
|
(32,472 |
) |
|
(15,600 |
) |
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
Payments on debt and finance lease liabilities |
|
(60 |
) |
|
(75,013 |
) |
Holdback payments for acquisition purchases |
|
(13,500 |
) |
|
(5,783 |
) |
Stock issued for stock and employee benefit plans, net of shares
withheld for taxes |
|
(1,870 |
) |
|
364 |
|
Repurchases of common stock |
|
(50,640 |
) |
|
— |
|
Dividends paid to shareholders |
|
(13,398 |
) |
|
(3,216 |
) |
Dividends paid to minority interest joint venture partners (1) |
|
(1,260 |
) |
|
(8,507 |
) |
Net cash used for financing activities |
|
(80,728 |
) |
|
(92,155 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and equivalents |
|
(330 |
) |
|
1,944 |
|
Change in cash, cash
equivalents and restricted cash |
|
(98,096 |
) |
|
89,899 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
394,703 |
|
|
263,528 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
296,607 |
|
|
$ |
353,427 |
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing activities |
|
|
|
|
Capital expenditures included in payables |
|
$ |
7,900 |
|
|
$ |
3,769 |
|
(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) |
|
10/23/2021 |
|
10/24/2020 |
|
10/23/2021 |
|
10/24/2020 |
Sales |
|
|
|
|
|
|
|
|
Wholesale segment: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
$ |
341,823 |
|
|
$ |
266,189 |
|
|
$ |
645,440 |
|
|
$ |
445,944 |
|
Intersegment sales |
|
97,269 |
|
|
76,827 |
|
|
187,151 |
|
|
120,645 |
|
Wholesale segment sales |
|
439,092 |
|
|
343,016 |
|
|
832,591 |
|
|
566,589 |
|
|
|
|
|
|
|
|
|
|
Retail segment sales |
|
192,420 |
|
|
162,275 |
|
|
374,267 |
|
|
253,412 |
|
|
|
|
|
|
|
|
|
|
Corporate and Other: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
41,646 |
|
|
30,656 |
|
|
80,965 |
|
|
45,222 |
|
Intersegment sales |
|
3,367 |
|
|
3,061 |
|
|
7,682 |
|
|
5,236 |
|
Corporate and Other sales |
|
45,013 |
|
|
33,717 |
|
|
88,647 |
|
|
50,458 |
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
(100,636 |
) |
|
(79,888 |
) |
|
(194,833 |
) |
|
(125,881 |
) |
Consolidated sales |
|
$ |
575,889 |
|
|
$ |
459,120 |
|
|
$ |
1,100,672 |
|
|
$ |
744,578 |
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
43,128 |
|
|
$ |
41,683 |
|
|
$ |
61,459 |
|
|
$ |
59,623 |
|
Retail segment |
|
23,962 |
|
|
15,093 |
|
|
44,400 |
|
|
8,466 |
|
Corporate and Other |
|
(12,977 |
) |
|
(8,837 |
) |
|
(17,375 |
) |
|
(15,825 |
) |
Consolidated operating income |
|
$ |
54,113 |
|
|
$ |
47,939 |
|
|
$ |
88,484 |
|
|
$ |
52,264 |
|
LA-Z-BOY
INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES
|
|
Quarter Ended |
|
Six Months Ended |
(Amounts in thousands, except per share data) |
|
10/23/2021 |
|
10/24/2020 |
|
10/23/2021 |
|
10/24/2020 |
GAAP gross profit |
|
$ |
223,295 |
|
|
$ |
200,555 |
|
|
$ |
425,377 |
|
|
$ |
316,918 |
|
Add back: Purchase accounting charges - incremental expense upon
the sale of inventory acquired at fair value |
|
— |
|
|
133 |
|
|
— |
|
|
430 |
|
Add back: Business realignment charges |
|
— |
|
|
235 |
|
|
— |
|
|
1,305 |
|
Add back: Supply chain optimization initiative charges/(gain) |
|
— |
|
|
— |
|
|
— |
|
|
(50 |
) |
Non-GAAP gross profit |
|
$ |
223,295 |
|
|
$ |
200,923 |
|
|
$ |
425,377 |
|
|
$ |
318,603 |
|
|
|
|
|
|
|
|
|
|
GAAP SG&A |
|
$ |
169,182 |
|
|
$ |
152,616 |
|
|
$ |
336,893 |
|
|
$ |
264,654 |
|
Less: Purchase accounting charges - adjustment to fair value of
contingent consideration and amortization of intangible assets and
retention agreements |
|
(759 |
) |
|
(2,756 |
) |
|
(1,019 |
) |
|
(3,478 |
) |
Less: Business realignment gain/(charges) |
|
3,277 |
|
|
(108 |
) |
|
3,277 |
|
|
(2,580 |
) |
Non-GAAP SG&A |
|
$ |
171,700 |
|
|
$ |
149,752 |
|
|
$ |
339,151 |
|
|
$ |
258,596 |
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
54,113 |
|
|
$ |
47,939 |
|
|
$ |
88,484 |
|
|
$ |
52,264 |
|
Add back: Purchase accounting charges |
|
759 |
|
|
2,889 |
|
|
1,019 |
|
|
3,908 |
|
Add back: Business realignment charges/(gain) |
|
(3,277 |
) |
|
343 |
|
|
(3,277 |
) |
|
3,885 |
|
Add back: Supply chain optimization initiative charges/(gain) |
|
— |
|
|
— |
|
|
— |
|
|
(50 |
) |
Non-GAAP operating income |
|
$ |
51,595 |
|
|
$ |
51,171 |
|
|
$ |
86,226 |
|
|
$ |
60,007 |
|
|
|
|
|
|
|
|
|
|
GAAP income before income
taxes |
|
$ |
55,008 |
|
|
$ |
47,705 |
|
|
$ |
89,092 |
|
|
$ |
53,539 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
896 |
|
|
3,018 |
|
|
1,336 |
|
|
4,207 |
|
Add back: Business realignment charges/(gain) |
|
(3,277 |
) |
|
343 |
|
|
(3,277 |
) |
|
3,885 |
|
Add back: Supply chain optimization initiative charges/(gain) |
|
— |
|
|
— |
|
|
— |
|
|
(50 |
) |
Non-GAAP income before income
taxes |
|
$ |
52,627 |
|
|
$ |
51,066 |
|
|
$ |
87,151 |
|
|
$ |
61,581 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
$ |
39,516 |
|
|
$ |
34,935 |
|
|
$ |
64,082 |
|
|
$ |
39,733 |
|
Add back: Purchase accounting charges recorded as part of gross
profit, SG&A, and interest expense |
|
896 |
|
|
3,018 |
|
|
1,336 |
|
|
4,207 |
|
Less: Tax effect of purchase accounting |
|
(105 |
) |
|
(128 |
) |
|
(219 |
) |
|
(413 |
) |
Add back: Business realignment charges/(gain) |
|
(3,277 |
) |
|
343 |
|
|
(3,277 |
) |
|
3,885 |
|
Less: Tax effect of business realignment charges |
|
865 |
|
|
(85 |
) |
|
859 |
|
|
(940 |
) |
Add back: Supply chain optimization initiative charges/(gain) |
|
— |
|
|
— |
|
|
— |
|
|
(50 |
) |
Less: Tax effect of supply chain optimization initiative |
|
— |
|
|
— |
|
|
— |
|
|
12 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
$ |
37,896 |
|
|
$ |
38,083 |
|
|
$ |
62,781 |
|
|
$ |
46,434 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated per diluted share |
|
$ |
0.89 |
|
|
$ |
0.75 |
|
|
$ |
1.43 |
|
|
$ |
0.86 |
|
Add back: Purchase accounting charges, net of tax, per share |
|
0.02 |
|
|
0.06 |
|
|
0.03 |
|
|
0.08 |
|
Add back: Business realignment charges (gain), net of tax, per
share |
|
(0.06 |
) |
|
0.01 |
|
|
(0.06 |
) |
|
0.07 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated per diluted share |
|
$ |
0.85 |
|
|
$ |
0.82 |
|
|
$ |
1.40 |
|
|
$ |
1.01 |
|
LA-Z-BOY
INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURESSEGMENT INFORMATION
|
|
Quarter Ended |
|
Six Months Ended |
(Amounts in thousands) |
|
10/23/2021 |
|
% of sales |
|
10/24/2020 |
|
% of sales |
|
10/23/2021 |
|
% of sales |
|
10/24/2020 |
|
% of sales |
GAAP operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
43,128 |
|
|
9.8 |
% |
|
$ |
41,683 |
|
|
12.2 |
% |
|
$ |
61,459 |
|
|
7.4 |
% |
|
$ |
59,623 |
|
|
10.5 |
% |
Retail segment |
|
23,962 |
|
|
12.5 |
% |
|
15,093 |
|
|
9.3 |
% |
|
44,400 |
|
|
11.9 |
% |
|
8,466 |
|
|
3.3 |
% |
Corporate and Other |
|
(12,977 |
) |
|
N/M |
|
|
(8,837 |
) |
|
N/M |
|
|
(17,375 |
) |
|
N/M |
|
|
(15,825 |
) |
|
N/M |
|
Consolidated GAAP operating income |
|
$ |
54,113 |
|
|
9.4 |
% |
|
$ |
47,939 |
|
|
10.4 |
% |
|
$ |
88,484 |
|
|
8.0 |
% |
|
$ |
52,264 |
|
|
7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP items affecting
operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
(3,217 |
) |
|
|
|
$ |
226 |
|
|
|
|
$ |
(3,157 |
) |
|
|
|
$ |
3,230 |
|
|
|
Retail segment |
|
— |
|
|
|
|
148 |
|
|
|
|
— |
|
|
|
|
613 |
|
|
|
Corporate and Other |
|
699 |
|
|
|
|
2,858 |
|
|
|
|
899 |
|
|
|
|
3,900 |
|
|
|
Consolidated Non-GAAP items affecting operating income |
|
$ |
(2,518 |
) |
|
|
|
$ |
3,232 |
|
|
|
|
$ |
(2,258 |
) |
|
|
|
$ |
7,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
39,911 |
|
|
9.1 |
% |
|
$ |
41,909 |
|
|
12.2 |
% |
|
$ |
58,302 |
|
|
7 |
% |
|
$ |
62,853 |
|
|
11.1 |
% |
Retail segment |
|
23,962 |
|
|
12.5 |
% |
|
15,241 |
|
|
9.4 |
% |
|
44,400 |
|
|
11.9 |
% |
|
9,079 |
|
|
3.6 |
% |
Corporate and Other |
|
(12,278 |
) |
|
N/M |
|
|
(5,979 |
) |
|
N/M |
|
|
(16,476 |
) |
|
N/M |
|
|
(11,925 |
) |
|
N/M |
|
Consolidated Non-GAAP operating income |
|
$ |
51,595 |
|
|
9.0 |
% |
|
$ |
51,171 |
|
|
11.1 |
% |
|
$ |
86,226 |
|
|
7.8 |
% |
|
$ |
60,007 |
|
|
8.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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