La-Z-Boy Incorporated (NYSE: LZB), a global leader in the
manufacture and retail of residential furniture, today reported
third quarter results for the period ended January 27, 2024.
For the quarter, sales totaled $500 million, a decrease of 13%
against a year ago period that benefited from delivery of pandemic
related backlog and 5% above the pre-pandemic third quarter of
fiscal 2020. Results were impacted by winter weather events in
January, which caused temporary shutdowns of our U.S. manufacturing
facilities, delivery delays, and reduced store traffic throughout
much of the central U.S. Operating margin was 6.5% in the quarter
on a GAAP basis and 6.6% on a Non-GAAP basis. Diluted earnings per
share totaled $0.66 on a GAAP basis and $0.67 on a Non-GAAP basis.
Written same-store sales for the entire La-Z-Boy Furniture
Galleries® network decreased 6% versus the year ago period, with
company-owned written same-store sales down 8% in a challenged
consumer environment and due in part to winter weather events.
Written same-store sales were positive across the entire network
and for company-owned stores in November and December, but were
significantly challenged in January, impacted by softening traffic,
a strong base period, and weather.
Melinda D. Whittington, President and Chief Executive Officer of
La-Z-Boy Incorporated, said, “We remain optimistic about the
mid-to-long-term growth potential for our industry, given
structural housing shortages and the expectation of improvements in
interest rates and housing affordability, and our ability to
disproportionately grow with the consumer. In the near term,
despite the furniture and home furnishings industry being in a
sustained slowdown, our La-Z-Boy Furniture Galleries® network is
executing well. Results in January, the third month of our quarter,
were negatively impacted by winter weather events, which caused
reduced store traffic throughout much of the central U.S. and
delivery and production delays at our U.S.-based assembly
facilities, the source of the majority of our customized upholstery
finished product. After January’s weather disruptions, production
and deliveries are now back to normal as we focus on servicing our
customers and consumers with the high quality, comfortable products
they expect from us.”
Whittington added, “We continue to make progress
on our Century Vision strategy, as we completed the acquisition of
a six-store network in the Midwest, bringing the company-owned
store network to 184 of the 353 total store network. Furthermore,
we recently signed an agreement to acquire an additional two stores
from an independent La-Z-Boy Furniture Galleries® dealer in the
South. Our company-owned store base now represents 52% of our total
network, compared to 32% a decade ago. While the market remains
challenging and volatile, we are confident in our ability to
leverage our strong financial position to outperform the market
over the longer term. This includes expanding our La-Z-Boy brand
reach with data-based consumer insights driving our marketing and
product design, investing in our growing company-owned Retail store
base, and increasing the agility of our supply chain. With our
customized product primarily manufactured in the U.S., our
vertically integrated model serves as a key differentiator in the
industry.”
Fourth Quarter
Outlook:Bob Lucian, Chief Financial
Officer of La-Z-Boy Incorporated, said, “Our third quarter results
were largely on track with our sales guidance and Non-GAAP
operating margin(2) expectations excluding unexpected weather
events in January. While production and deliveries have returned to
normal at the start of our fourth quarter, we are planning
prudently for the near term, while investing and building for the
long term. For the fourth quarter of fiscal 2024, we expect
delivered sales to be in the range of $505-535 million and Non-GAAP
operating margin(1) to be in the range of 7-8%.”
Key Results:
(Unaudited, amounts in thousands, except per share
data) |
|
Quarter Ended |
|
|
|
|
1/27/2024 |
|
1/28/2023 |
|
Change |
Sales |
|
$ |
500,406 |
|
|
$ |
572,723 |
|
|
(13 |
)% |
|
|
|
|
|
|
|
|
GAAP operating income |
|
|
32,561 |
|
|
|
42,840 |
|
|
(24 |
)% |
Non-GAAP
operating income |
|
|
33,022 |
|
|
|
53,178 |
|
|
(38 |
)% |
|
|
|
|
|
|
|
|
GAAP operating margin |
|
|
6.5 |
% |
|
|
7.5 |
% |
|
(100 |
) bps |
Non-GAAP
operating margin |
|
|
6.6 |
% |
|
|
9.3 |
% |
|
(270 |
) bps |
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
|
28,640 |
|
|
|
31,726 |
|
|
(10 |
)% |
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
|
29,008 |
|
|
|
39,234 |
|
|
(26 |
)% |
|
|
|
|
|
|
|
|
Diluted weighted average
common shares |
|
|
43,195 |
|
|
|
43,137 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per
share |
|
$ |
0.66 |
|
|
$ |
0.74 |
|
|
(11 |
)% |
Non-GAAP diluted earnings per
share |
|
$ |
0.67 |
|
|
$ |
0.91 |
|
|
(26 |
)% |
Liquidity Measures:
|
|
Nine Months Ended |
|
|
|
Nine Months Ended |
(Unaudited, amounts in thousands) |
|
1/27/2024 |
|
1/28/2023 |
|
(Unaudited, amounts in thousands) |
|
1/27/2024 |
|
1/28/2023 |
Free Cash Flow |
|
|
|
|
|
Cash Returns to Shareholders |
|
|
|
|
Operating cash flow |
|
$ |
105,354 |
|
|
$ |
127,052 |
|
|
Share repurchases |
|
$ |
40,022 |
|
$ |
5,004 |
Capital expenditures |
|
|
(38,034 |
) |
|
|
(57,439 |
) |
|
Dividends |
|
|
24,177 |
|
|
22,027 |
Free cash flow |
|
$ |
67,320 |
|
|
$ |
69,613 |
|
|
Cash returns to shareholders |
|
$ |
64,199 |
|
$ |
27,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands) |
|
1/27/2024 |
|
1/28/2023 |
Cash and cash equivalents |
|
$ |
329,324 |
|
$ |
280,763 |
Restricted cash |
|
|
3,855 |
|
|
3,282 |
Total cash, cash equivalents and restricted cash |
|
$ |
333,179 |
|
$ |
284,045 |
FY24 Q3 Results versus FY23
Q3:
- Consolidated sales in the third quarter of fiscal 2024
decreased 13% to $500 million, primarily reflecting lower delivered
unit volume versus last year’s third quarter results that included
delivery of backlog but increased 5% versus the most recent
pre-pandemic third quarter in fiscal year 2020. Combined with a
challenging consumer environment, volume was also negatively
impacted by winter weather events in January, which caused
temporary shutdowns of our U.S. manufacturing facilities, delivery
delays, and reduced store traffic throughout much of the central
U.S.
- Consolidated GAAP operating margin
was 6.5% versus 7.5%
- Consolidated Non-GAAP(2) operating
margin decreased 270 basis points to 6.6% versus 9.3%, driven by
improved gross margin from lower input costs (improved sourcing and
reduced commodity prices) more than offset by fixed cost deleverage
on lower delivered sales
- GAAP diluted EPS decreased to $0.66
from $0.74 and Non-GAAP(2) diluted EPS decreased to $0.67 from
$0.91
Retail Segment:
- Sales:
- Written sales for the Retail
segment (company-owned La-Z-Boy Furniture Galleries® stores)
decreased 2% with lower same-store sales partially offset by
acquired and new stores
- Written same-store sales decreased
8%, due in part to winter weather events in January, which
negatively impacted retail store traffic across much of the central
U.S., combined with an overall challenging consumer environment,
partially offset by strong execution that drove higher ticket and
conversion rates
- Delivered sales for the Retail
segment decreased 18% to $205 million versus last year's results
that included delivery of backlog but increased 22% versus the most
recent pre-pandemic third quarter in fiscal year 2020.
Additionally, sales were negatively impacted by winter weather
events in January which caused delivery delays and reduced store
traffic throughout much of the central U.S.
- Operating Margin:
- GAAP operating margin and GAAP
operating income was 10.9% and $22 million, versus 17.6% and $44
million, respectively
- Non-GAAP(2) operating margin and
Non-GAAP(2) operating income were 10.9% and $22 million, down 670
basis points and 50%, respectively, driven by improved gross margin
from prior period pricing actions and favorable shift in product
mix, more than offset by fixed cost deleverage on lower delivered
sales
Wholesale Segment:
- Sales:
- Sales decreased 13% to $356 million
due to a decline in delivered volume versus the year ago period,
which benefited from pandemic backlog production and deliveries.
Additionally, volume was negatively impacted by winter weather
events in January, which caused temporary shutdowns of our U.S.
manufacturing facilities
- Operating Margin:
- GAAP operating margin increased to 6.4% versus 4.2%
- Non-GAAP(2) operating margin
decreased to 6.4%, down 20 basis points; gross margin improvement
from lower input costs (improved sourcing and reduced commodity
prices), was more than offset by fixed cost deleverage and
increased marketing investments
Corporate & Other:
- Joybird written sales decreased 14% reflecting challenging
E-commerce trends across the industry, and delivered sales
increased 18% to $34 million, reflecting improvement from a
challenged base period. Joybird made meaningful progress on
improving profitability in the quarter with improved product mix
and return on advertising spending
Balance Sheet and Cash Flow, Third Quarter Fiscal
2024:
- Ended the third quarter with $333
million in cash(3) and no external debt
- Generated $48 million in cash from
operating activities
- Year to date, cash flow from
operations was $105 million, down 17% from last year's comparable
period, which benefited from pandemic backlog
- Invested $12 million in capital
expenditures, primarily related to La-Z-Boy Furniture Galleries®
(new stores and remodels), and projects at our manufacturing and
distribution facilities
- Returned $29 million to
shareholders, including $20 million in share repurchases and $9
million in dividends
- Year to date, we have returned $64
million to shareholders
Dividend:On
February 20, 2024, the Board of Directors declared a quarterly cash
dividend of $0.20 per share on the common stock of the company. The
dividend will be paid on March 15, 2024, to shareholders of record
on March 5, 2024.
Conference
Call:La-Z-Boy will hold a conference call
with the investment community on Wednesday, February 21, 2024, at
8:30 a.m. ET. The toll-free dial-in number is (888) 506-0062;
international callers may use (973) 528-0011. Enter Participant
Access Code 355765.
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: 49895. The webcast replay will be available for one
year.
Investor Relations
Contact:Mark Becks, CFA, (734)
457-9538mark.becks@la-z-boy.com
About
La-Z-Boy:La-Z-Boy Incorporated is a
global leader in the manufacture and retail of residential
furniture, marketing furniture for every room of the home. The
Wholesale segment includes La-Z-Boy, England, American Drew®,
Hammary®, Kincaid® and the company's international wholesale
and manufacturing businesses. The company-owned Retail segment
includes 184 of the 353 La-Z-Boy Furniture Galleries® stores. The
Corporate and Other segment includes Joybird, an e-commerce
retailer and manufacturer of upholstered furniture that also has 12
stores in the U.S.
The corporation’s branded distribution network
is dedicated to selling La-Z-Boy Incorporated products and brands,
and includes 353 stand-alone La-Z-Boy Furniture Galleries® stores
and over 500 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
https://www.la-z-boy.com/.
Notes:(1)This
reference to Non-GAAP operating margin for a
future period is a Non-GAAP financial measure. We have not provided
a reconciliation of Non-GAAP operating margin for future periods in
this press release because such reconciliation cannot be provided
without unreasonable efforts.
(2)Non-GAAP amounts for the third
quarter of fiscal 2024 exclude:
- a charge of $0.2 million pre-tax,
or less than $0.01, per diluted share, related to our supply chain
optimization actions
- purchase accounting charges related
to acquisitions completed in prior periods totaling $0.3 million
pre-tax, or $0.01 per diluted share, all included in operating
income
Non-GAAP amounts for the third quarter
of fiscal 2023 exclude:
- a $10.1 million pre-tax, or $0.17
per diluted share, charge related to the closure of the Torreón, MX
facility, primarily reflecting the impairment of various
assets
- purchase accounting charges related
to acquisitions completed in prior periods totaling $0.3 million
pre-tax, or less than $0.01 per diluted share, with $0.3 million
included in operating income and a de minimis amount included in
interest expense
Please refer to the accompanying “Reconciliation
of GAAP to Non-GAAP Financial Measures” and “Reconciliation of GAAP
to Non-GAAP Financial Measures: Segment Information” for detailed
information on calculating the Non-GAAP financial measures used in
this press release and a reconciliation to the most directly
comparable GAAP measure.
(3)Cash includes cash, cash
equivalents and restricted cash.
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, and our business and
industry.
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 2023 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.
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 (on a consolidated basis and by segment), Non-GAAP
operating margin (on a consolidated basis and by segment), and
Non-GAAP net income attributable to La-Z-Boy Incorporated per
diluted share, Non-GAAP diluted earnings per share (and components
thereof, including Non-GAAP income before income taxes and Non-GAAP
net income attributable to La-Z-Boy Incorporated), each of which
may exclude, as applicable, business realignment charges, supply
chain optimization 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-19, 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
supply chain optimization charges include asset impairment costs,
accelerated depreciation expense, lease termination gains,
severance costs, and employee relocation costs resulting from the
closure, consolidation, and centralization of various global supply
chain operations and includes the closure of our Torreón
manufacturing facility (previously disclosed as Mexico
optimization). The purchase accounting charges include the
amortization of intangible assets, fair value adjustments of future
cash payments recorded as interest expense, and adjustments to the
fair value of a contingent consideration liability. 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 supply chain optimization charges
are dependent on the timing, size, number and nature of the
operations being closed, consolidated or centralized, and the
charges may not be incurred on a predictable cycle. Management
believes that exclusion of these items facilitates more consistent
comparisons of the company’s operating results over time. Where
applicable, the accompanying “Reconciliation of GAAP to Non-GAAP
Financial Measures” tables present the excluded items net of tax
calculated using the effective tax rate from operations for the
period in which the adjustment is presented.
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED STATEMENT OF
INCOME |
|
|
|
Quarter Ended |
|
Nine Months Ended |
(Unaudited, amounts in thousands, except per share
data) |
|
1/27/2024 |
|
1/28/2023 |
|
1/27/2024 |
|
1/28/2023 |
Sales |
|
$ |
500,406 |
|
|
$ |
572,723 |
|
|
$ |
1,493,492 |
|
|
$ |
1,788,146 |
|
Cost of sales |
|
|
287,152 |
|
|
|
337,142 |
|
|
|
851,905 |
|
|
|
1,072,051 |
|
Gross profit |
|
|
213,254 |
|
|
|
235,581 |
|
|
|
641,587 |
|
|
|
716,095 |
|
Selling, general and administrative expense |
|
|
180,693 |
|
|
|
192,741 |
|
|
|
540,888 |
|
|
|
558,729 |
|
Operating income |
|
|
32,561 |
|
|
|
42,840 |
|
|
|
100,699 |
|
|
|
157,366 |
|
Interest expense |
|
|
(106 |
) |
|
|
(136 |
) |
|
|
(329 |
) |
|
|
(414 |
) |
Interest income |
|
|
4,124 |
|
|
|
2,012 |
|
|
|
11,222 |
|
|
|
3,624 |
|
Other income (expense),
net |
|
|
(639 |
) |
|
|
(1,062 |
) |
|
|
21 |
|
|
|
(834 |
) |
Income before income taxes |
|
|
35,940 |
|
|
|
43,654 |
|
|
|
111,613 |
|
|
|
159,742 |
|
Income tax expense |
|
|
7,256 |
|
|
|
12,077 |
|
|
|
27,309 |
|
|
|
42,446 |
|
Net income |
|
|
28,684 |
|
|
|
31,577 |
|
|
|
84,304 |
|
|
|
117,296 |
|
Net (income) loss attributable
to noncontrolling interests |
|
|
(44 |
) |
|
|
149 |
|
|
|
(986 |
) |
|
|
(1,005 |
) |
Net income attributable to La-Z-Boy Incorporated |
|
$ |
28,640 |
|
|
$ |
31,726 |
|
|
$ |
83,318 |
|
|
$ |
116,291 |
|
|
|
|
|
|
|
|
|
|
Basic weighted average common
shares |
|
|
42,767 |
|
|
|
43,137 |
|
|
|
43,005 |
|
|
|
43,111 |
|
Basic net income attributable
to La-Z-Boy Incorporated per share |
|
$ |
0.67 |
|
|
$ |
0.74 |
|
|
$ |
1.94 |
|
|
$ |
2.70 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted average
common shares |
|
|
43,195 |
|
|
|
43,137 |
|
|
|
43,344 |
|
|
|
43,111 |
|
Diluted net income
attributable to La-Z-Boy Incorporated per share |
|
$ |
0.66 |
|
|
$ |
0.74 |
|
|
$ |
1.92 |
|
|
$ |
2.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY
INCORPORATEDCONSOLIDATED BALANCE
SHEET |
|
(Unaudited, amounts in thousands, except par
value) |
|
1/27/2024 |
|
4/29/2023 |
Current assets |
|
|
|
|
Cash and equivalents |
|
$ |
329,324 |
|
|
$ |
343,374 |
|
Restricted cash |
|
|
3,855 |
|
|
|
3,304 |
|
Receivables, net of allowance of $4,399 at 1/27/2024 and $4,776 at
4/29/2023 |
|
|
119,383 |
|
|
|
125,536 |
|
Inventories, net |
|
|
276,833 |
|
|
|
276,257 |
|
Other current assets |
|
|
120,996 |
|
|
|
106,129 |
|
Total current assets |
|
|
850,391 |
|
|
|
854,600 |
|
Property, plant and equipment,
net |
|
|
284,407 |
|
|
|
278,578 |
|
Goodwill |
|
|
209,526 |
|
|
|
205,008 |
|
Other intangible assets,
net |
|
|
45,633 |
|
|
|
39,375 |
|
Deferred income taxes –
long-term |
|
|
8,716 |
|
|
|
8,918 |
|
Right of use lease assets |
|
|
460,403 |
|
|
|
416,269 |
|
Other long-term assets,
net |
|
|
59,216 |
|
|
|
63,515 |
|
Total assets |
|
$ |
1,918,292 |
|
|
$ |
1,866,263 |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
86,819 |
|
|
$ |
107,460 |
|
Lease liabilities, short-term |
|
|
77,601 |
|
|
|
77,751 |
|
Accrued expenses and other current liabilities |
|
|
275,522 |
|
|
|
290,650 |
|
Total current liabilities |
|
|
439,942 |
|
|
|
475,861 |
|
Lease liabilities,
long-term |
|
|
418,149 |
|
|
|
368,163 |
|
Other long-term
liabilities |
|
|
72,315 |
|
|
|
70,142 |
|
Shareholders' equity |
|
|
|
|
Preferred shares – 5,000 authorized; none issued |
|
|
— |
|
|
|
— |
|
Common shares, $1.00 par value – 150,000 authorized; 42,613
outstanding at 1/27/2024 and 43,318 outstanding at
4/29/2023 |
|
|
42,613 |
|
|
|
43,318 |
|
Capital in excess of par value |
|
|
365,111 |
|
|
|
358,891 |
|
Retained earnings |
|
|
575,376 |
|
|
|
545,155 |
|
Accumulated other comprehensive loss |
|
|
(4,880 |
) |
|
|
(5,528 |
) |
Total La-Z-Boy Incorporated shareholders' equity |
|
|
978,220 |
|
|
|
941,836 |
|
Noncontrolling interests |
|
|
9,666 |
|
|
|
10,261 |
|
Total equity |
|
|
987,886 |
|
|
|
952,097 |
|
Total liabilities and equity |
|
$ |
1,918,292 |
|
|
$ |
1,866,263 |
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY INCORPORATEDCONSOLIDATED
STATEMENT OF CASH FLOWS |
|
|
|
Nine Months Ended |
(Unaudited, amounts in thousands) |
|
1/27/2024 |
|
1/28/2023 |
Cash flows from operating activities |
|
|
|
|
Net income |
|
$ |
84,304 |
|
|
$ |
117,296 |
|
Adjustments to reconcile net income to cash provided by operating
activities |
|
|
|
|
(Gain)/loss on disposal and impairment of assets |
|
|
(15 |
) |
|
|
6,161 |
|
(Gain)/loss on sale of investments |
|
|
(1,169 |
) |
|
|
155 |
|
Provision for doubtful accounts |
|
|
(267 |
) |
|
|
945 |
|
Depreciation and amortization |
|
|
36,493 |
|
|
|
29,357 |
|
Amortization of right-of-use lease assets |
|
|
56,660 |
|
|
|
57,548 |
|
Lease impairment/(settlement) |
|
|
(1,175 |
) |
|
|
1,347 |
|
Equity-based compensation expense |
|
|
11,048 |
|
|
|
8,456 |
|
Change in deferred taxes |
|
|
1,911 |
|
|
|
(2,629 |
) |
Change in receivables |
|
|
4,277 |
|
|
|
42,474 |
|
Change in inventories |
|
|
5,968 |
|
|
|
4,560 |
|
Change in other assets |
|
|
(6,314 |
) |
|
|
16,478 |
|
Change in payables |
|
|
(15,420 |
) |
|
|
(10,624 |
) |
Change in lease liabilities |
|
|
(57,385 |
) |
|
|
(58,651 |
) |
Change in other liabilities |
|
|
(13,562 |
) |
|
|
(85,821 |
) |
Net cash provided by operating activities |
|
|
105,354 |
|
|
|
127,052 |
|
|
|
|
|
|
Cash flows from investing
activities |
|
|
|
|
Proceeds from disposals of assets |
|
|
4,836 |
|
|
|
121 |
|
Capital expenditures |
|
|
(38,034 |
) |
|
|
(57,439 |
) |
Purchases of investments |
|
|
(17,869 |
) |
|
|
(6,970 |
) |
Proceeds from sales of investments |
|
|
23,337 |
|
|
|
18,178 |
|
Acquisitions |
|
|
(26,299 |
) |
|
|
(11,855 |
) |
Net cash used for investing activities |
|
|
(54,029 |
) |
|
|
(57,965 |
) |
|
|
|
|
|
Cash flows from financing
activities |
|
|
|
|
Payments on debt and finance lease liabilities |
|
|
(346 |
) |
|
|
(92 |
) |
Holdback payments for acquisitions |
|
|
(5,000 |
) |
|
|
(5,000 |
) |
Stock issued for stock and employee benefit plans, net of shares
withheld for taxes |
|
|
6,241 |
|
|
|
(1,771 |
) |
Repurchases of common stock |
|
|
(40,022 |
) |
|
|
(5,004 |
) |
Dividends paid to shareholders |
|
|
(24,177 |
) |
|
|
(22,027 |
) |
Dividends paid to minority interest joint venture partners (1) |
|
|
(1,172 |
) |
|
|
— |
|
Net cash used for financing activities |
|
|
(64,476 |
) |
|
|
(33,894 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and equivalents |
|
|
(348 |
) |
|
|
(4 |
) |
Change in cash, cash
equivalents and restricted cash |
|
|
(13,499 |
) |
|
|
35,189 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
346,678 |
|
|
|
248,856 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
333,179 |
|
|
$ |
284,045 |
|
|
|
|
|
|
Supplemental disclosure of
non-cash investing activities |
|
|
|
|
Capital expenditures included in payables |
|
$ |
3,008 |
|
|
$ |
2,828 |
|
(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 |
|
Nine Months Ended |
(Unaudited, amounts in thousands) |
|
1/27/2024 |
|
1/28/2023 |
|
1/27/2024 |
|
1/28/2023 |
Sales |
|
|
|
|
|
|
|
|
Wholesale segment: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
$ |
260,542 |
|
|
$ |
291,170 |
|
|
$ |
760,531 |
|
|
$ |
934,511 |
|
Intersegment sales |
|
|
95,833 |
|
|
|
116,433 |
|
|
|
294,286 |
|
|
|
361,141 |
|
Wholesale segment sales |
|
|
356,375 |
|
|
|
407,603 |
|
|
|
1,054,817 |
|
|
|
1,295,652 |
|
|
|
|
|
|
|
|
|
|
Retail segment sales |
|
|
204,696 |
|
|
|
251,157 |
|
|
|
627,248 |
|
|
|
739,330 |
|
|
|
|
|
|
|
|
|
|
Corporate and Other: |
|
|
|
|
|
|
|
|
Sales to external customers |
|
|
35,168 |
|
|
|
30,396 |
|
|
|
105,713 |
|
|
|
114,305 |
|
Intersegment sales |
|
|
2,964 |
|
|
|
3,114 |
|
|
|
8,712 |
|
|
|
11,572 |
|
Corporate and Other sales |
|
|
38,132 |
|
|
|
33,510 |
|
|
|
114,425 |
|
|
|
125,877 |
|
|
|
|
|
|
|
|
|
|
Eliminations |
|
|
(98,797 |
) |
|
|
(119,547 |
) |
|
|
(302,998 |
) |
|
|
(372,713 |
) |
Consolidated sales |
|
$ |
500,406 |
|
|
$ |
572,723 |
|
|
$ |
1,493,492 |
|
|
$ |
1,788,146 |
|
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
22,711 |
|
|
$ |
16,940 |
|
|
$ |
67,664 |
|
|
$ |
81,558 |
|
Retail segment |
|
|
22,313 |
|
|
|
44,203 |
|
|
|
79,512 |
|
|
|
123,855 |
|
Corporate and Other |
|
|
(12,463 |
) |
|
|
(18,303 |
) |
|
|
(46,477 |
) |
|
|
(48,047 |
) |
Consolidated operating income |
|
$ |
32,561 |
|
|
$ |
42,840 |
|
|
$ |
100,699 |
|
|
$ |
157,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LA-Z-BOY INCORPORATEDRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES |
|
|
|
Quarter Ended |
|
Nine Months Ended |
(Amounts in thousands, except per share data) |
|
1/27/2024 |
|
1/28/2023 |
|
1/27/2024 |
|
1/28/2023 |
GAAP gross profit |
|
$ |
213,254 |
|
|
$ |
235,581 |
|
|
$ |
641,587 |
|
|
$ |
716,095 |
|
Purchase accounting charges (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
132 |
|
Business realignment charges (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Supply chain optimization charges (3) |
|
|
205 |
|
|
|
880 |
|
|
|
3,966 |
|
|
|
880 |
|
Non-GAAP gross profit |
|
$ |
213,459 |
|
|
$ |
236,461 |
|
|
$ |
645,553 |
|
|
$ |
717,716 |
|
|
|
|
|
|
|
|
|
|
GAAP SG&A |
|
$ |
180,693 |
|
|
$ |
192,741 |
|
|
$ |
540,888 |
|
|
$ |
558,729 |
|
Purchase accounting (charges)/gain (4) |
|
|
(254 |
) |
|
|
(252 |
) |
|
|
(762 |
) |
|
|
46 |
|
Supply chain optimization charges (5) |
|
|
(2 |
) |
|
|
(9,206 |
) |
|
|
(1,857 |
) |
|
|
(9,206 |
) |
Non-GAAP SG&A |
|
$ |
180,437 |
|
|
$ |
183,283 |
|
|
$ |
538,269 |
|
|
$ |
549,569 |
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
32,561 |
|
|
$ |
42,840 |
|
|
$ |
100,699 |
|
|
$ |
157,366 |
|
Purchase accounting charges |
|
|
254 |
|
|
|
252 |
|
|
|
762 |
|
|
|
86 |
|
Business realignment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Supply chain optimization charges |
|
|
207 |
|
|
|
10,086 |
|
|
|
5,823 |
|
|
|
10,086 |
|
Non-GAAP operating income |
|
$ |
33,022 |
|
|
$ |
53,178 |
|
|
$ |
107,284 |
|
|
$ |
168,147 |
|
|
|
|
|
|
|
|
|
|
GAAP income before income
taxes |
|
$ |
35,940 |
|
|
$ |
43,654 |
|
|
$ |
111,613 |
|
|
$ |
159,742 |
|
Purchase accounting charges recorded as part of gross profit,
SG&A, and interest expense |
|
|
254 |
|
|
|
299 |
|
|
|
810 |
|
|
|
271 |
|
Business realignment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Supply chain optimization charges |
|
|
207 |
|
|
|
10,086 |
|
|
|
5,823 |
|
|
|
10,086 |
|
Non-GAAP income before income
taxes |
|
$ |
36,401 |
|
|
$ |
54,039 |
|
|
$ |
118,246 |
|
|
$ |
170,708 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated |
|
$ |
28,640 |
|
|
$ |
31,726 |
|
|
$ |
83,318 |
|
|
$ |
116,291 |
|
Purchase accounting charges recorded as part of gross profit,
SG&A, and interest expense |
|
|
254 |
|
|
|
299 |
|
|
|
810 |
|
|
|
271 |
|
Tax effect of purchase accounting |
|
|
(51 |
) |
|
|
(83 |
) |
|
|
(198 |
) |
|
|
(286 |
) |
Business realignment charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
609 |
|
Tax effect of business realignment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(163 |
) |
Supply chain optimization charges |
|
|
207 |
|
|
|
10,086 |
|
|
|
5,823 |
|
|
|
10,086 |
|
Tax effect of supply chain optimization |
|
|
(42 |
) |
|
|
(2,794 |
) |
|
|
(1,427 |
) |
|
|
(2,693 |
) |
Non-GAAP net income
attributable to La-Z-Boy Incorporated |
|
$ |
29,008 |
|
|
$ |
39,234 |
|
|
$ |
88,326 |
|
|
$ |
124,115 |
|
|
|
|
|
|
|
|
|
|
GAAP net income attributable
to La-Z-Boy Incorporated per diluted share ("Diluted EPS") |
|
$ |
0.66 |
|
|
$ |
0.74 |
|
|
$ |
1.92 |
|
|
$ |
2.70 |
|
Purchase accounting charges, net of tax, per share |
|
|
0.01 |
|
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
Business realignment charges, net of tax, per share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Supply chain optimization charges, net of tax, per share |
|
|
— |
|
|
|
0.17 |
|
|
|
0.10 |
|
|
|
0.17 |
|
Non-GAAP net income
attributable to La-Z-Boy Incorporated per diluted share ("Diluted
EPS") |
|
$ |
0.67 |
|
|
$ |
0.91 |
|
|
$ |
2.04 |
|
|
$ |
2.88 |
|
(1) |
Includes incremental expense upon the sale of inventory acquired at
fair value. |
(2) |
Includes severance charges
related to the closure of our Newton, Mississippi manufacturing
facility. |
(3) |
Fiscal 2024 includes severance
charges related to shifting upholstery production from our Ramos,
Mexico operations to other upholstery plants and relocating our cut
and sew operations back to Ramos, Mexico, resulting in the
permanent closure of our leased cut and sew facility in Parras,
Mexico. Fiscal 2023 primarily includes severance charges related to
the closure our manufacturing facility in Torreón, Mexico. |
(4) |
Includes amortization of
intangible assets. The first nine months of fiscal 2023 also
includes an $0.8 million adjustment to the fair value of a
contingent consideration liability. |
(5) |
The first nine months of fiscal
2024 includes $3.0 million of accelerated depreciation of fixed
assets related to shifting upholstery production from our Ramos,
Mexico operations to other upholstery plants and relocating our cut
and sew operations back to Ramos, Mexico, resulting in the
permanent closure of our leased cut and sew facility in Parras,
Mexico. The first nine months of fiscal 2024 also includes a $1.2
million gain related to the settlement of the Torreón, Mexico lease
obligation on previously impaired assets. Fiscal 2023 includes
impairment charges of various assets, primarily long-lived assets,
related to the closure of our manufacturing facility in Torreón,
Mexico. |
|
|
LA-Z-BOY INCORPORATEDRECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURESSEGMENT
INFORMATION |
|
|
|
Quarter Ended |
|
Nine Months Ended |
(Amounts in thousands) |
|
1/27/2024 |
|
% of sales |
|
1/28/2023 |
|
% of sales |
|
1/27/2024 |
|
% of sales |
|
1/28/2023 |
|
% of sales |
GAAP operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
22,711 |
|
|
6.4% |
|
$ |
16,940 |
|
|
4.2% |
|
$ |
67,664 |
|
|
6.4% |
|
$ |
81,558 |
|
|
6.3% |
Retail segment |
|
|
22,313 |
|
|
10.9% |
|
|
44,203 |
|
|
17.6% |
|
|
79,512 |
|
|
12.7% |
|
|
123,855 |
|
|
16.8% |
Corporate and Other |
|
|
(12,463 |
) |
|
N/M |
|
|
(18,303 |
) |
|
N/M |
|
|
(46,477 |
) |
|
N/M |
|
|
(48,047 |
) |
|
N/M |
Consolidated GAAP operating income |
|
$ |
32,561 |
|
|
6.5% |
|
$ |
42,840 |
|
|
7.5% |
|
$ |
100,699 |
|
|
6.7% |
|
$ |
157,366 |
|
|
8.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP items affecting
operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
262 |
|
|
|
|
$ |
10,138 |
|
|
|
|
$ |
5,987 |
|
|
|
|
$ |
10,850 |
|
|
|
Retail segment |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
132 |
|
|
|
Corporate and Other |
|
|
199 |
|
|
|
|
|
200 |
|
|
|
|
|
598 |
|
|
|
|
|
(201 |
) |
|
|
Consolidated Non-GAAP items affecting operating income |
|
$ |
461 |
|
|
|
|
$ |
10,338 |
|
|
|
|
$ |
6,585 |
|
|
|
|
$ |
10,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment |
|
$ |
22,973 |
|
|
6.4% |
|
$ |
27,078 |
|
|
6.6% |
|
$ |
73,651 |
|
|
7.0% |
|
$ |
92,408 |
|
|
7.1% |
Retail segment |
|
|
22,313 |
|
|
10.9% |
|
|
44,203 |
|
|
17.6% |
|
|
79,512 |
|
|
12.7% |
|
|
123,987 |
|
|
16.8% |
Corporate and Other |
|
|
(12,264 |
) |
|
N/M |
|
|
(18,103 |
) |
|
N/M |
|
|
(45,879 |
) |
|
N/M |
|
|
(48,248 |
) |
|
N/M |
Consolidated Non-GAAP operating income |
|
$ |
33,022 |
|
|
6.6% |
|
$ |
53,178 |
|
|
9.3% |
|
$ |
107,284 |
|
|
7.2% |
|
$ |
168,147 |
|
|
9.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - Not Meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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