MONROE, Mich., June 18, 2019 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB) today reported its operating results for the fiscal 2019 fourth quarter and full year ended April 27, 2019.

Fiscal 2019 full year versus Fiscal 2018 full year:

• Consolidated sales for the full fiscal 2019 year increased 10.2% to $1.75 billion

• Delivered same-store sales for the company-owned Retail segment increased 5.7%
• Written same-store sales for the 353-store La-Z-Boy Furniture Galleries^® network, including Canada, increased 1.8% 
  -- Written same-store sales for the U.S. network of 318 stores increased 3.2%

• Consolidated operating income:

• GAAP: $129.7 million versus $129.4 million
• Non-GAAP*: $136.6 million versus $130.3 million

• Consolidated operating margin:

• GAAP: 7.4% versus 8.2%
• Non-GAAP*:  7.8% versus 8.2%

• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):

• GAAP: $1.44 versus $1.67
• Non-GAAP*: $2.14 versus $1.68, with fiscal 2019 excluding a non-cash charge of $0.58 per share for the termination of the company’s defined benefit pension plan and a charge of $0.12 per share for purchase accounting;  Fiscal 2018 excluded $0.01 per share for purchase accounting

• Cash generated from operating activities increased 30% to $151 million

Fiscal 2019 fourth quarter versus Fiscal 2018 fourth quarter:

• Consolidated sales for the fourth quarter increased 8.0% to $453.8 million

• Delivered same-store sales for the company-owned Retail segment increased 8.0%
• Written same-store sales for the 353-store La-Z-Boy Furniture Galleries^® network, including Canada, increased 0.8% 
  -- Written same-store sales for the U.S. network of 318 stores increased 2.5%

• Consolidated operating income:

• GAAP: $37.2 million versus $45.7 million
• Non-GAAP*: $38.9 million versus $45.9 million

• Consolidated operating margin:

• GAAP: 8.2% versus 10.9%
• Non-GAAP*: 8.6% versus 10.9%

• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):

• GAAP: $0.03 versus $0.72
• Non-GAAP*:  $0.64 versus $0.72, with fiscal 2019 Q4 excluding a non-cash charge of $0.58 per share for the termination of the company’s defined benefit pension plan and a charge of $0.03 per share for purchase accounting

• Cash generated from operating activities increased 141% to $59 million

Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy, said, “We delivered solid performance for fiscal 2019.  Sales increased 10% reflecting both organic growth and our acquisitions, and operating margins across our established businesses were solid.  We generated robust cash from operating activities, returned a combined total of $46 million to shareholders through share purchases and an increased dividend, and funded $48­­ million in capital expenditures to position our operations for long-term growth. We also solidified our position in the e-commerce space with the acquisition of Joybird and enhanced an already successful retail platform with the purchase of the Arizona-based La-Z-Boy Furniture Galleries^® stores.”

Commenting on the fourth quarter, Darrow stated: “We were pleased with the excellent sales and operating results for our company-owned Retail segment.  However, sales declined in our wholesale Upholstery and Casegoods segments, consistent with a slow start to the calendar year across the North American retail home furnishings landscape. Given our fixed costs, the decline in volume translated to a direct impact to operating margins for our wholesale businesses in the fourth quarter. Additionally, our Canadian business has been particularly challenged due to a variety of factors, including weakening exchange rates and the retaliatory tariff on finished goods coming from the U.S., which was lifted in May.”

Consolidated sales in the fourth quarter of fiscal 2019 increased 8.0% to $453.8 million, driven by strong Retail performance, which included the acquired Arizona-based La-Z-Boy Furniture Galleries^® stores, and the acquisition of Joybird. Consolidated GAAP operating margin was 8.2% versus 10.9% in the prior-year quarter.  Excluding purchase accounting charges, Non-GAAP operating margin was 8.6% in the current-year quarter versus 10.9% in last year’s fourth quarter. The fiscal 2019 fourth quarter included increased incentive compensation costs that were 170 basis points higher than the prior year  and a 40 basis point negative impact relating to changes in employee benefits policies. As expected, operating margin in the fourth quarter of fiscal 2019 also reflects a 120 basis point drag due to the acquisition of Joybird and growth of our Retail segment, which caused 310 basis points higher SG&A, partly offset by a higher gross margin. 

For the fourth quarter, sales in the company’s Upholstery segment decreased 1.2% to $323.3 million and GAAP operating margin was 11.5% compared with 12.8% in last year’s fourth quarter.  Non-GAAP operating margin was 11.6% in the current-year quarter versus 12.8% in last year’s fourth quarter, reflecting a decline in units and a change in product mix. In the Casegoods segment, sales decreased 12.9% to $26.6 million in the fiscal 2019 fourth quarter and GAAP operating margin was 9.1% compared with 9.2% in the prior-year period.

Sales in the Retail segment increased 24.9% to $151.9 million in the fourth quarter of fiscal 2019 on growth for the base stores and $22.2 million of sales from recent acquisitions. On the core base of 139 stores included in last year’s fourth quarter, better execution at the store level drove a delivered same-store sales increase of 8.0%.  GAAP operating margin for the Retail segment improved to 8.4% from 6.6% in last year’s fourth quarter, and Non-GAAP operating margin was 8.5% in the current-year quarter compared with 6.6% in last year’s fourth quarter.  Sales growth, a higher average ticket, and the recently acquired Arizona stores, which are the best performing stores across the La-Z-Boy Furniture Galleries^® network, drove improved operating performance. 

GAAP EPS was $0.03 for the fiscal 2019 fourth quarter versus $0.72 in the prior-year quarter. Non-GAAP EPS was $0.64 versus $0.72 in last year’s fourth quarter, with the fiscal 2019 fourth quarter excluding a charge of $0.03 per share for purchase accounting and a non-cash charge of $0.58 per share for the termination of the company’s defined benefit pension plan. The fiscal 2019 results also include charges of $0.13 per share for higher incentive compensation, and $0.03 per share for changes in employee benefits.  Results for the fourth quarter of fiscal 2018 included a $0.06 per share benefit related to tax reform.

Balance Sheet and Cash Flow

During the fourth quarter, the company generated $59.3 million in cash from operating activities. La-Z-Boy ended the fiscal 2019 year with $130 million in cash and cash equivalents, $31.5 million in investments to enhance returns on cash, and $2 million in restricted cash. In fiscal 2019, the company invested $48.4 million in the business through capital expenditures, paid $23.5 million in dividends, and spent $23.0 million purchasing 0.8 million shares of stock, including 0.2 million in the fourth quarter, in the open market under its existing authorized share purchase program, leaving 5.9 million shares of purchase availability in the program. La-Z-Boy repaid the remaining $20 million of borrowings outstanding under its revolving line of credit during the fourth quarter. The credit line borrowings were used to fund a portion of the acquisition payments made during the second quarter.

Outlook

Darrow concluded, “As noted in our pre-release, the first calendar quarter was off to a slow start across the home furnishings industry and, with the hangover of tariffs and geopolitical uncertainty, it is unclear if these business conditions will continue further into our fiscal 2020 year.  However, we believe the performance of the La-Z-Boy Furniture Galleries® store network and our Retail segment demonstrate the strength of the La-Z-Boy brand in this environment.  Moving forward, our healthy balance sheet will enable us to continue to invest to drive growth across the business and capitalize on our strong brands, multi-channel distribution network, and world-class supply chain capabilities. And, with strategic growth initiatives in place, we believe there are continued growth opportunities for La-Z-Boy and are confident we are well positioned within the industry to deliver strong long-term performance.”

*For the full fiscal 2019 year, Non-GAAP amounts exclude pre-tax purchase accounting charges totaling $7.5 million, or $0.12 per diluted share, with $6.9 million included in operating income and $0.6 million included in interest expense.  Also excluded is a non-cash pre-tax charge of $32.7 million, or $0.58 per diluted share, related to the termination of the company’s defined benefit pension plan. Non-GAAP amounts for the full fiscal 2018 year exclude pre-tax purchase accounting charges of $0.9 million, or $0.01 per diluted share, all included in operating income.

*Non-GAAP amounts for the fourth quarter of fiscal 2019 exclude pre-tax purchase accounting charges totaling $2.0 million, or $0.03 per diluted share, with $1.8 million included in operating income and $0.2 million included in interest expense. Also excluded is a non-cash pre-tax charge of $32.7 million, or $0.58 per diluted share, related to the termination of the company’s defined benefit pension plan. Non-GAAP amounts for the fourth quarter of fiscal 2018 exclude pre-tax purchase accounting charges of $0.2 million, all included in operating income, which did not impact EPS for the period. 

Please refer to the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” for detailed information on calculating Non-GAAP measures used in this press release and a reconciliation to the applicable GAAP measure.

Conference Call

La-Z-Boy will hold a conference call with the investment community on Wednesday, June 19, 2019, at 8:30 a.m. eastern time. The toll-free dial-in number is 844.602.0380; international callers may use 862.298.0970. 

The call will be webcast live, with corresponding slides, and archived on the Internet.  It will be available at https://lazboy.gcs-web.com/. A telephone replay will be available for a week following the call. This replay will be accessible to callers from the U.S. and Canada at 877.481.4010 and to international callers at 919.882.2331. Enter Replay Passcode: 48727. The webcast replay will be available for one year.

Forward-looking Information

This news release contains, and oral statements made from time to time by representatives of La‑Z‑Boy may contain, “forward-looking statements.” With respect to all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 

Actual results could differ materially from those we anticipate or project due to a number of factors, including: (a) changes in consumer confidence and demographics; (b) the possibility of a recession; (c) changes in the real estate and credit markets and their effects on our customers, consumers and suppliers; (d) international political unrest, terrorism or war; (e) volatility in energy and other commodities prices; (f) the impact of logistics on imports and exports; (g) tax rate, interest rate, and currency exchange rate changes; (h) changes in the stock market impacting our profitability and our effective tax rate; (i) operating factors, such as supply, labor or distribution disruptions (e.g. port strikes); (j) changes in legislation, including the tax code, or changes in the domestic or international regulatory environment or trade policies, including new or increased duties, tariffs, retaliatory tariffs, trade limitations and termination or renegotiation of bilateral and multilateral trade agreements impacting our business; (k) adoption of new accounting principles; (l) fires, severe weather or other natural events such as hurricanes, earthquakes, flooding, tornadoes and tsunamis; (m) our ability to procure, transport or import, or material increases to the cost of transporting or importing, fabric rolls, leather hides or cut-and-sewn fabric and leather sets domestically or abroad; (n) information technology conversions or system failures and our ability to recover from a system failure; (o) effects of our brand awareness and marketing programs; (p) the discovery of defects in our products resulting in delays in manufacturing, recall campaigns, reputational damage, or increased warranty costs; (q) litigation arising out of alleged defects in our products; (r) unusual or significant litigation; (s) our ability to locate new La-Z-Boy Furniture Galleries^® stores (or store owners) and negotiate favorable lease terms for new or existing locations; (t) the ability to increase volume through our e-commerce initiatives; (u) the impact of potential goodwill or intangible asset impairments; and (v) those matters discussed in Item 1A of our fiscal 2019 Annual Report on Form 10-K and other factors identified from time to time in our reports filed with the Securities and Exchange Commission  (the “SEC”). We undertake no obligation to update or revise any forward-looking statements, whether to reflect new information or new developments or for any other reason.

Additional Information

This news release is just one part of La-Z-Boy’s financial disclosures and should be read in conjunction with other information filed with the Securities and Exchange Commission, which is available at: https://lazboy.gcs-web.com/financial-information/sec-filings. Investors and others wishing to be notified of future La-Z-Boy news releases, SEC filings and quarterly investor conference calls may sign up at:  https://lazboy.gcs-web.com/.

Background Information

La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The La-Z-Boy Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew^®, Hammary^®, and Kincaid^®. The company-owned Retail segment includes 156 of the 353 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 353 stand-alone La-Z-Boy Furniture Galleries^® stores and 550 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, each of which excludes purchase accounting charges. These purchase accounting charges 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. Additionally, these Non-GAAP measures for the fiscal 2019 periods exclude the non-cash charge for the termination of the company’s defined benefit pension plan. 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 excluding purchase accounting charges and the non-cash charge for the termination of the company’s defined benefit pension plan 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 uses these Non-GAAP measures to assess the company’s operating and financial performance, and 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. 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. Exclusion of these charges facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. Management also excludes the non-cash charge for the termination of the company’s defined benefit pension plan when assessing the company’s operating and financial performance due to the one-time nature of the transaction. 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-cash pension termination charge, which had a specific tax impact due to the one-time nature of the transaction. 

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

		Unaudited For the Fiscal Quarter Ended						Unaudited For the Fiscal Year Ended
(Amounts in thousands, except per share data)		4/27/2019			4/28/2018			4/27/2019			4/28/2018
Sales		$453,791			$420,025			$1,745,401			$1,583,947
Cost of sales			264,018			253,831			1,042,831			961,200
Gross profit			189,773			166,194			702,570			622,747
Selling, general and administrative expense			152,602			120,487			572,896			493,378
Operating income			37,171			45,707			129,674			129,369
Interest expense			(399	)		(108	)		(1,542	)		(538	)
Interest income			569			546			2,103			1,709
Pension termination charge			(32,671	)		—			(32,671	)		—
Other expense, net			(191	)		(1,379	)		(2,237	)		(1,650	)
Income before income taxes			4,479			44,766			95,327			128,890
Income tax expense			2,812			10,406			25,186			47,295
Net income			1,667			34,360			70,141			81,595
Net income attributable to noncontrolling interests			(139	)		(150	)		(1,567	)		(729	)
Net income attributable to La-Z-Boy Incorporated		$1,528			$34,210			$68,574			$80,866
Basic weighted average common shares			46,889			46,928			46,828			47,621
Basic net income attributable to La-Z-Boy Incorporated per share		$0.03			$0.73			$1.46			$1.69
Diluted weighted average common shares			47,369			47,472			47,333			48,135
Diluted net income attributable to La-Z-Boy Incorporated per share		$0.03			$0.72			$1.44			$1.67

LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET

		Unaudited
(Amounts in thousands, except par value)		4/27/2019			4/28/2018
Current assets
Cash and equivalents		$129,819			$134,515
Restricted cash			1,968			2,356
Receivables, net of allowance of $2,180 at 4/27/19 and $1,956 at 4/28/18			143,288			154,055
Inventories, net			196,899			184,841
Other current assets			69,144			42,451
Total current assets			541,118			518,218
Property, plant and equipment, net			200,523			180,882
Goodwill			185,867			75,254
Other intangible assets, net			29,907			18,190
Deferred income taxes – long-term			20,670			21,265
Other long-term assets, net			81,705			79,158
Total assets		$1,059,790			$892,967
Current liabilities
Current portion of long-term debt		$180			$223
Accounts payable			65,365			62,403
Accrued expenses and other current liabilities			173,091			118,721
Total current liabilities			238,636			181,347
Long-term debt			19			199
Other long-term liabilities			124,159			86,205
Contingencies and commitments
Shareholders' equity
Preferred shares – 5,000 authorized; none issued			—			—
Common shares, $1 par value – 150,000 authorized; 46,955 outstanding at 4/27/19 and 46,788 outstanding at 4/28/18			46,955			46,788
Capital in excess of par value			313,168			298,948
Retained earnings			325,847			291,644
Accumulated other comprehensive loss			(3,462	)		(25,199	)
Total La-Z-Boy Incorporated shareholders’ equity			682,508			612,181
Noncontrolling interests			14,468			13,035
Total equity			696,976			625,216
Total liabilities and equity		$1,059,790			$892,967

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS

		Unaudited For the Fiscal Year Ended
(Amounts in thousands)		4/27/2019			4/28/2018
Cash flows from operating activities
Net income		$70,141			$81,595
Adjustments to reconcile net income to cash provided by operating activities
Gain on disposal of assets			(325	)		(2,108	)
Gain on conversion of investment			—			(2,204	)
Gain on sale of investments			(656	)		(770	)
Change in deferred taxes			(1,668	)		17,261
Change in provision for doubtful accounts			502			276
Depreciation and amortization			31,147			31,767
Stock-based compensation expense			10,981			9,474
Pension termination charge			32,671			—
Pension plan contributions			(7,000	)		(2,000	)
Change in receivables			7,195			(2,801	)
Change in inventories			3,135			(8,009	)
Change in other assets			(7,737	)		(3,245	)
Change in accounts payable			(2,388	)		6,602
Change in other liabilities			14,747			(10,088	)
Net cash provided by operating activities			150,745			115,750
Cash flows from investing activities
Proceeds from disposals of assets			1,941			1,440
Proceeds from property insurance			184			2,087
Capital expenditures			(48,433	)		(36,337	)
Purchases of investments			(20,698	)		(28,593	)
Proceeds from sales of investments			20,944			22,674
Acquisitions, net of cash acquired			(76,505	)		(16,495	)
Net cash used for investing activities			(122,567	)		(55,224	)
Cash flows from financing activities
Payments on debt			(223	)		(262	)
Payments for debt issuance costs			—			(231	)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes			13,901			2,977
Purchases of common stock			(22,957	)		(56,730	)
Dividends paid			(23,508	)		(22,009	)
Net cash used for financing activities			(32,787	)		(76,255	)
Effect of exchange rate changes on cash and equivalents			(475	)		1,741
Change in cash, cash equivalents and restricted cash			(5,084	)		(13,988	)
Cash, cash equivalents and restricted cash at beginning of period			136,871			150,859
Cash, cash equivalents and restricted cash at end of period		$131,787			$136,871
Supplemental disclosure of non-cash investing activities
Capital expenditures included in accounts payable		$3,250			$5,667

LA-Z-BOY INCORPORATED
SEGMENT INFORMATION

		Unaudited For the Fiscal Quarter Ended						Unaudited For the Fiscal Year Ended
(Amounts in thousands)		4/27/2019			4/28/2018			4/27/2019			4/28/2018
Sales
Upholstery segment:
Sales to external customers		$257,388			$270,668			$1,016,957			$1,010,097
Intersegment sales			65,915			56,569			251,285			217,266
Upholstery segment sales			323,303			327,237			1,268,242			1,227,363
Casegoods segment:
Sales to external customers			21,903			27,098			95,677			95,919
Intersegment sales			4,742			3,505			18,796			15,474
Casegoods segment sales			26,645			30,603			114,473			111,393
Retail segment sales			151,870			121,545			570,201			474,613
Corporate and Other:
Sales to external customers			22,630			714			62,566			3,318
Intersegment sales			2,290			2,582			11,446			9,421
Corporate and Other sales			24,920			3,296			74,012			12,739
Eliminations			(72,947	)		(62,656	)		(281,527	)		(242,161	)
Consolidated sales		$453,791			$420,025			$1,745,401			$1,583,947
Operating Income (Loss)
Upholstery segment		$37,304			$41,927				$127,906		$130,349
Casegoods segment			2,416			2,808			12,589			11,641
Retail segment			12,743			7,963			37,922			20,709
Corporate and Other			(15,292	)		(6,991	)		(48,743	)		(33,330	)
Consolidated operating income		$37,171			$45,707				$129,674		$129,369

LA-Z-BOY INCORPORATED
UNAUDITED QUARTERLY FINANCIAL DATA

(Amounts in thousands, except per share data)		(13 weeks)			(13 weeks)			(13 weeks)			(13 weeks)
Fiscal Quarter Ended		7/28/2018			10/27/2018			1/26/2019			4/27/2019
Sales		$384,695			$439,333			$467,582			$453,791
Cost of sales			236,173			264,928			277,712			264,018
Gross profit			148,522			174,405			189,870			189,773
Selling, general and administrative expense			125,362			145,905			149,027			152,602
Operating income			23,160			28,500			40,843			37,171
Interest expense			(104	)		(501	)		(538	)		(399	)
Interest income			602			392			540			569
Pension termination charge			—			—			—			(32,671	)
Other income (expense), net			892			(1,997	)		(941	)		(191	)
Income before income taxes			24,550			26,394			39,904			4,479
Income tax expense			5,599			6,045			10,730			2,812
Net income			18,951			20,349			29,174			1,667
Net income attributable to  noncontrolling interests			(648	)		(337	)		(443	)		(139	)
Net income attributable to La-Z-Boy  Incorporated		$18,303			$20,012			$28,731			$1,528
Diluted weighted average common shares			47,161			47,259			47,091			47,369
Diluted net income attributable to   La-Z-Boy Incorporated per share		$0.39			$0.42			$0.61			$0.03
Dividends declared per share		$0.12			$0.12			$0.13			$0.13

LA-Z-BOY INCORPORATED
UNAUDITED QUARTERLY FINANCIAL DATA

(Amounts in thousands, except per share data)		(13 weeks)			(13 weeks)			(13 weeks)			(13 weeks)
Fiscal Quarter Ended		7/29/2017			10/28/2017			1/27/2018			4/28/2018
Sales		$357,079			$393,205			$413,638			$420,025
Cost of sales			217,976			238,253			251,140			253,831
Gross profit			139,103			154,952			162,498			166,194
Selling, general and administrative expense			122,805			120,683			129,403			120,487
Operating income			16,298			34,269			33,095			45,707
Interest expense			(157	)		(160	)		(113	)		(108	)
Interest income			343			376			444			546
Other income (expense), net			1,749			(926	)		(1,094	)		(1,379	)
Income before income taxes			18,233			33,559			32,332			44,766
Income tax expense			6,489			10,353			20,047			10,406
Net income			11,744			23,206			12,285			34,360
Net income attributable to  noncontrolling interests			(93	)		(310	)		(176	)		(150	)
Net income attributable to La-Z-Boy  Incorporated		$11,651			$22,896			$12,109			$34,210
Diluted weighted average common shares			48,846			48,297			47,757			47,472
Diluted net income attributable to   La-Z-Boy Incorporated per share		$0.24			$0.47			$0.25			$0.72
Dividends declared per share		$0.11			$0.11			$0.12			$0.12

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

		Unaudited for the Fiscal Quarter Ended						Unaudited for the Fiscal Year Ended
(Amounts in thousands, except per share data)		4/27/2019			4/28/2018			4/27/2019			4/28/2018
GAAP gross profit		$189,773			$166,194			$702,570			$622,747
Add back: Purchase accounting charges –   incremental expense upon the sale of inventory   acquired at fair value			175			99			3,086			474
Non-GAAP gross profit		$189,948			$166,293			$705,656			$623,221
GAAP SG&A		$152,602			$120,487			$572,896			$493,378
Less: Purchase accounting charges – amortization of    intangible assets and retention agreements			(1,594	)		(106	)		(3,831	)		(449	)
Non-GAAP SG&A		$151,008			$120,381			$569,065			$492,929
GAAP operating income		$37,171			$45,707			$129,674			$129,369
Add back: Purchase accounting charges			1,769			205			6,917			923
Non-GAAP operating income		$38,940			$45,912			$136,591			$130,292
GAAP income before income taxes		$4,479			$44,766			$95,327			$128,890
Add back: Purchase accounting charges recorded as   part of gross profit, SG&A, and interest expense			1,959			205			7,486			923
Add back: Pension termination charge			32,671			—			32,671			—
Non-GAAP income before income taxes		$39,109			$44,971			$135,484			$129,813
GAAP net income attributable to La-Z-Boy   Incorporated		$1,528			$34,210			$68,574			$80,866
Add back: Purchase accounting charges   recorded as part of gross profit, SG&A, and   interest expense			1,959			205			7,486			923
Add back: Pension termination charge			32,671			—			32,671			—
Less: Tax effect of purchase accounting and pension   termination charges			(5,915	)		(24	)		(7,275	)		(339	)
Non-GAAP net income attributable to La-Z-Boy   Incorporated		$30,243			$34,391			$101,456			$81,450
GAAP net income attributable to La-Z-Boy   Incorporated per diluted share		$0.03			$0.72			$1.44			$1.67
Add back: Purchase accounting charges, net of tax,   per share			0.03			—			0.12			0.01
Add back: Pension termination charge, net of tax,   per share			0.58			—			0.58			—
Non-GAAP net income attributable to La-Z-   Boy Incorporated per diluted share		$0.64			$0.72			$2.14			$1.68

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

		Unaudited for the Fiscal Quarter Ended
(Amounts in thousands)		4/27/2019			% of sales			4/28/2018			% of sales
GAAP operating income (loss)
Upholstery segment		$37,304			11.5	%		$41,927			12.8	%
Casegoods segment			2,416		9.1	%			2,808		9.2	%
Retail segment			12,743		8.4	%			7,963		6.6	%
Corporate and Other			(15,292	)	N/M				(6,991	)	N/M
GAAP Consolidated operating income		$37,171			8.2	%		$45,707			10.9	%
Purchase accounting charges affecting operating income
Upholstery segment		$57						$106
Casegoods segment			—						—
Retail segment			175						99
Corporate and Other			1,537						—
Consolidated purchase accounting charges affecting   operating income		$1,769						$205
Non-GAAP operating income (loss)
Upholstery segment		$37,361			11.6	%		$42,033			12.8	%
Casegoods segment			2,416		9.1	%			2,808		9.2	%
Retail segment			12,918		8.5	%			8,062		6.6	%
Corporate and Other			(13,755	)	N/M				(6,991	)	N/M
Non-GAAP Consolidated operating income		$38,940			8.6	%		$45,912			10.9	%
		Unaudited for the Fiscal Year Ended
(Amounts in thousands)		4/27/2019			% of sales			4/28/2018			% of sales
GAAP operating income (loss)
Upholstery segment		$127,906			10.1	%		$130,349			10.6	%
Casegoods segment			12,589		11.0	%			11,641		10.5	%
Retail segment			37,922		6.7	%			20,709		4.4	%
Corporate and Other			(48,743	)	N/M				(33,330	)	N/M
GAAP Consolidated operating income		$129,674			7.4	%		$129,369			8.2	%
Purchase accounting charges affecting operating income
Upholstery segment		$20						$222
Casegoods segment			—						—
Retail segment			1,683						701
Corporate and Other			5,214						—
Consolidated purchase accounting charges affecting   operating income		$6,917						$923
Non-GAAP operating income (loss)
Upholstery segment		$127,926			10.1	%		$130,571			10.6	%
Casegoods segment			12,589		11.0	%			11,641		10.5	%
Retail segment			39,605		6.9	%			21,410		4.5	%
Corporate and Other			(43,529	)	N/M				(33,330	)	N/M
Non-GAAP Consolidated operating income		$136,591			7.8	%		$130,292			8.2	%
N/M – Not Meaningful

Contact:
Kathy Liebmann
(734) 241-2438 
kathy.liebmann@la-z-boy.com

 

Source: La-Z-Boy Incorporated