La-Z-Boy Reports Fiscal 2013 Year-End And Fourth-Quarter Results
Fiscal 2013 fourth-quarter highlights:
- Consolidated sales for the fourth quarter increased 9.8% compared with the fiscal 2012 fourth quarter;
- Same-store written sales for the La-Z-Boy Furniture Galleries® store network increased 11.2% for the fourth quarter on top of a 10% increase in last year's fourth quarter;
- Consolidated operating income increased 55% to
$26.2 million compared with$16.9 million in the fiscal 2012 fourth quarter; - The company generated cash from operations of
$35.0 million during the quarter after making a$20 million discretionary cash contribution to fund its pension plan; - The upholstery segment posted a 10.7% operating margin versus 10.1% in last year's fourth quarter; and
- The retail segment posted operating income of
$4.0 million , with a 5.4% operating margin, compared with an operating loss of$1.1 million , or a (2.0%) operating margin, in last year's fourth quarter.
Fiscal 2013 full-year highlights:
- Consolidated sales for the full fiscal 2013 year increased 8.2%, or
$101 million , compared with fiscal 2012; - Same-store written sales for the La-Z-Boy Furniture Galleries® store network increased 12.7% for the full fiscal 2013 year;
- Consolidated operating income increased 36.3% to
$67.6 million from$49.6 million in fiscal 2012; - The company generated cash from operations of
$68.4 million for the year, after $23.5 million in cash contributions to fund its pension plan; - The upholstery segment's operating margin was 9.1% compared with 8.4% in fiscal 2012;
- The retail segment turned profitable, posting operating income of
$4.1 million , or a 1.5% operating margin, compared with an operating loss of$7.8 million , or a (3.6%) operating margin in fiscal 2012; and - The company reinstated its quarterly dividend, in
December 2012 , at a rate of$0.04 per share.
Sales for the fiscal 2013 fourth quarter were
Sales for the full fiscal year 2013 were
Fiscal 2013
For the fiscal 2013 fourth quarter, sales in the company's upholstery segment increased 8.4% to
Darrow commented, "On the sales side, we continued to experience momentum across the upholstery segment for the quarter, partially driven by the double-digit same-store written sales increase for the La-Z-Boy Furniture Galleries® store network. This comparative follows two years of double-digit increases in same-store sales for the network, which is indicative of our brand strength, the consumer's enhanced appreciation for our product offering and ongoing market share gains. We are increasing our investment in our brand advertising platform to further educate consumers about the breadth of our product offering and the services they can expect to receive throughout our dealer network and are confident the additional spend will deliver results. On the operating side, our margin performance for the quarter and year demonstrate the efficiencies with which we are running our manufacturing facilities. In terms of growth, we are focused on maximizing the potential of our branded outlets throughout
Darrow continued, "New product lines and customers across our various operating companies are helping to drive growth. For example, at the April Furniture Market in
Retail Segment
For the fiscal 2013 fourth quarter, retail delivered sales were
Darrow stated, "Last quarter, our retail segment turned profitable and the fiscal 2013 fourth quarter marks the 17th consecutive quarterly improvement over prior-year performance. Our results for the quarter were partially driven by increases in traffic and average ticket combined with a more favorable merchandising mix. As volume grows, we should be able to leverage our SG&A expense. We look forward to growing our company-owned store base through a combination of expansion in existing markets and entry into new markets in need of additional distribution outlets."
La-Z-Boy Furniture Galleries® Stores Network
System-wide, for the fourth quarter of fiscal 2013, including company-owned and independent-licensed stores, same-store written sales, which the company tracks as an indicator of retail activity, were up 11.2% versus last year's fourth quarter.
Total written sales, which include new and closed stores, for the fourth quarter, were up 13.0%. At the end of the fourth quarter, the La-Z-Boy Furniture Galleries® store system was composed of 313 stand-alone stores.
For fiscal 2014, the La-Z-Boy Furniture Galleries® store network, including company-owned and independent-licensed stores, is planning for approximately 20 store projects, including openings, remodels and relocations. In fiscal 2013, six stores were opened, five stores were remodeled, three stores were relocated and five stores were closed. At the end of fiscal 2013, 14 stores of the total 313 were in the new concept design format introduced in 2011.
Balance Sheet and Cash Flow
During the quarter, the company generated
Business Outlook
Darrow stated, "We are confident the integrated retail model developed over the last several years is the right strategy to take our company forward to deliver profitable growth. Our operating platform is efficient and that, combined with the strongest brand in the industry, positions us to continue to benefit from a strengthening economy, particularly with an ongoing recovery in the housing market. We have much to look forward to in terms of increasing the value of our enterprise through the build out of
Conference Call
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) speed of economic recovery or the possibility of another recession; (c) changes in the real estate and credit markets and their effects on our customers and suppliers; (d) international political unrest, terrorism or war; (e) volatility in energy and other commodities prices; (f) the impact of logistics on imports; (g) interest rate and currency exchange rate changes; (h) operating factors, such as supply, labor or distribution disruptions; (i) any court actions requiring us to return any of the Continued Dumping and Subsidy Offset Act distributions we have received; (j) changes in the domestic or international regulatory environment; (k) adoption of new accounting principles; (l) severe weather or other natural events such as hurricanes, earthquakes, flooding, tornadoes and tsunamis; (m) our ability to procure fabric rolls and leather hides or cut-and-sewn fabric and leather sets domestically or abroad; (n) fluctuations in our stock price; (o) information technology conversions or system failures; (p) effects of our brand awareness and marketing programs; (q) the discovery of defects in our products resulting in delays in manufacturing, recall campaigns, reputational damage, or increased warranty costs; (r) litigation arising out of alleged defects in our products; (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) our ability to successfully integrate acquired businesses and realize the benefit of anticipated synergies; and (u) those matters discussed in Item 1A of our fiscal 2013 Annual Report on Form 10-K and other factors identified from time-to-time in our reports filed with the Securities and Exchange Commission. 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
Background Information
The corporation's branded distribution network is dedicated to selling
LA-Z-BOY INCORPORATED |
|||||||||
CONSOLIDATED STATEMENT OF INCOME |
|||||||||
Unaudited |
Unaudited For the Year Ended |
||||||||
(Amounts in thousands, except per share data) |
4/27/2013 |
4/28/2012 |
4/27/2013 |
4/28/2012 |
|||||
Sales |
$359,535 |
$327,388 |
$1,332,525 |
$1,231,676 |
|||||
Cost of sales |
237,966 |
224,033 |
907,586 |
851,819 |
|||||
Gross profit |
121,569 |
103,355 |
424,939 |
379,857 |
|||||
Selling, general and administrative expense |
95,409 |
86,465 |
357,312 |
330,226 |
|||||
Operating income |
26,160 |
16,890 |
67,627 |
49,631 |
|||||
Interest expense |
234 |
297 |
746 |
1,384 |
|||||
Interest income |
186 |
124 |
621 |
611 |
|||||
Income from Continued Dumping and Subsidy Offset Act, net |
— |
16,300 |
— |
18,037 |
|||||
Other income (expense), net |
713 |
(214) |
3,208 |
(38) |
|||||
Income before income taxes |
26,825 |
32,803 |
70,710 |
66,857 |
|||||
Income tax expense (benefit) |
8,333 |
12,769 |
23,528 |
(22,051) |
|||||
Net income |
18,492 |
20,034 |
47,182 |
88,908 |
|||||
Net (income) loss attributable to noncontrolling interests |
(184) |
(432) |
(793) |
(942) |
|||||
Net income attributable to La-Z-Boy Incorporated |
$18,308 |
$19,602 |
$46,389 |
$87,966 |
|||||
Diluted average shares |
53,754 |
52,609 |
53,685 |
52,478 |
|||||
Diluted net income per share attributable to La-Z-Boy Incorporated |
$0.33 |
$0.37 |
$0.85 |
$1.64 |
|||||
Dividends declared per share |
$0.04 |
$— |
$0.08 |
$— |
LA-Z-BOY INCORPORATED |
|||||
CONSOLIDATED BALANCE SHEET |
|||||
Unaudited As of |
|||||
(Amounts in thousands, except par value) |
4/27/2013 |
4/28/2012 |
|||
Current assets |
|||||
Cash and equivalents |
$131,085 |
$152,370 |
|||
Restricted cash |
12,686 |
2,861 |
|||
Receivables, net of allowance of $21,607 at 4/27/13 and $22,254 at 4/28/12 |
160,005 |
167,232 |
|||
Inventories, net |
146,343 |
143,787 |
|||
Deferred income tax assets – current |
20,640 |
19,081 |
|||
Other current assets |
30,121 |
14,669 |
|||
Total current assets |
500,880 |
500,000 |
|||
Property, plant and equipment, net |
118,060 |
114,366 |
|||
Goodwill |
12,837 |
— |
|||
Other intangible assets |
4,838 |
3,028 |
|||
Deferred income tax assets – long-term |
30,572 |
33,649 |
|||
Other long-term assets, net |
53,184 |
34,696 |
|||
Total assets |
$720,371 |
$685,739 |
|||
Current liabilities |
|||||
Current portion of long-term debt |
$513 |
$1,829 |
|||
Accounts payable |
50,542 |
56,630 |
|||
Accrued expenses and other current liabilities |
99,108 |
91,300 |
|||
Total current liabilities |
150,163 |
149,759 |
|||
Long-term debt |
7,576 |
7,931 |
|||
Other long-term liabilities |
70,664 |
80,234 |
|||
Contingencies and commitments |
— |
— |
|||
Shareholders' equity |
|||||
Preferred shares – 5,000 authorized; none issued |
— |
— |
|||
Common shares, $1 par value – 150,000 authorized; 52,392 outstanding at 4/27/13 and 52,244 outstanding at 4/28/12 |
52,392 |
52,244 |
|||
Capital in excess of par value |
241,888 |
231,332 |
|||
Retained earnings |
226,044 |
189,609 |
|||
Accumulated other comprehensive loss |
(35,496) |
(31,281) |
|||
Total La-Z-Boy Incorporated shareholders' equity |
484,828 |
441,904 |
|||
Noncontrolling interests |
7,140 |
5,911 |
|||
Total equity |
491,968 |
447,815 |
|||
Total liabilities and equity |
$720,371 |
$685,739 |
LA-Z-BOY INCORPORATED |
|||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS |
|||||||||
Unaudited Fiscal Year Ended |
|||||||||
(Amounts in thousands) |
4/27/2013 |
4/28/2012 |
4/30/2011 |
||||||
Cash flows from operating activities |
|||||||||
Net income |
$47,182 |
$88,908 |
$17,373 |
||||||
Adjustments to reconcile net income to cash provided by operating activities |
|||||||||
(Gain) loss on disposal of assets |
(659) |
45 |
201 |
||||||
Gain on sale of investments |
(3,170) |
(519) |
(529) |
||||||
Gain on deconsolidation of VIE |
— |
(1,125) |
— |
||||||
Write-down of long-lived assets |
— |
— |
4,471 |
||||||
Deferred income tax expense (benefit) |
3,198 |
(42,146) |
(120) |
||||||
Restructuring |
2,715 |
281 |
487 |
||||||
Provision for doubtful accounts |
1,005 |
4,196 |
7,197 |
||||||
Depreciation and amortization |
23,140 |
23,486 |
24,302 |
||||||
Stock-based compensation expense |
11,458 |
5,718 |
3,720 |
||||||
Pension plan contributions |
(23,480) |
(5,798) |
(4,495) |
||||||
Change in receivables |
7,139 |
(6,182) |
1,599 |
||||||
Change in inventories |
391 |
(7,414) |
(10,531) |
||||||
Change in other assets |
(5,407) |
3,318 |
(563) |
||||||
Change in payables |
(6,088) |
7,470 |
(4,429) |
||||||
Change in other liabilities |
11,016 |
12,610 |
(10,837) |
||||||
Net cash provided by operating activities |
68,440 |
82,848 |
27,846 |
||||||
Cash flows from investing activities |
|||||||||
Proceeds from disposals of assets |
4,455 |
372 |
506 |
||||||
Capital expenditures |
(25,912) |
(15,663) |
(10,540) |
||||||
Purchases of investments |
(49,589) |
(7,944) |
(10,200) |
||||||
Proceeds from sales of investments |
18,662 |
8,649 |
10,655 |
||||||
Cash effects on deconsolidation of VIE |
— |
(971) |
(632) |
||||||
Acquisitions, net of cash acquired |
(15,832) |
— |
— |
||||||
Change in restricted cash |
(9,825) |
(2,861) |
— |
||||||
Other |
— |
(676) |
(49) |
||||||
Net cash used for investing activities |
(78,041) |
(19,094) |
(10,260) |
||||||
Cash flows from financing activities |
|||||||||
Proceeds from debt |
— |
— |
30,585 |
||||||
Payments on debt |
(2,511) |
(25,936) |
(41,618) |
||||||
Payments for debt issuance costs |
— |
(568) |
— |
||||||
Stock issued for stock and employee benefit plans |
2,901 |
4,943 |
270 |
||||||
Excess tax benefit on stock option exercises |
2,563 |
223 |
— |
||||||
Purchases of common stock |
(10,333) |
(5,179) |
— |
||||||
Dividends paid |
(4,236) |
— |
— |
||||||
Net cash used for financing activities |
(11,616) |
(26,517) |
(10,763) |
||||||
Effect of exchange rate changes on cash and equivalents |
(68) |
(129) |
12 |
||||||
Change in cash and equivalents |
(21,285) |
37,108 |
6,835 |
||||||
Cash and equivalents at beginning of period |
152,370 |
115,262 |
108,427 |
||||||
Cash and equivalents at end of period |
$131,085 |
$152,370 |
$115,262 |
||||||
LA-Z-BOY INCORPORATED |
|||||||||||
SEGMENT INFORMATION |
|||||||||||
Unaudited For the |
Unaudited For the Year |
||||||||||
(Amounts in thousands) |
4/27/2013 |
4/28/2012 |
4/27/2013 |
4/28/2012 |
|||||||
Sales |
|||||||||||
Upholstery segment: |
|||||||||||
Sales to external customers |
$255,522 |
$238,032 |
$939,736 |
$871,511 |
|||||||
Intersegment sales |
33,909 |
28,861 |
127,311 |
103,592 |
|||||||
Upholstery segment sales |
289,431 |
266,893 |
1,067,047 |
975,103 |
|||||||
Casegoods segment: |
|||||||||||
Sales to external customers |
29,911 |
33,224 |
125,753 |
133,479 |
|||||||
Intersegment sales |
2,335 |
2,113 |
8,241 |
6,160 |
|||||||
Casegoods segment sales |
32,246 |
35,337 |
133,994 |
139,639 |
|||||||
Retail segment sales |
73,634 |
55,578 |
264,723 |
215,490 |
|||||||
VIEs, net of intercompany sales eliminations |
— |
— |
— |
8,840 |
|||||||
Corporate and Other |
468 |
554 |
2,313 |
2,356 |
|||||||
Eliminations |
(36,244) |
(30,974) |
(135,552) |
(109,752) |
|||||||
Consolidated sales |
$359,535 |
$327,388 |
$1,332,525 |
$1,231,676 |
|||||||
Operating Income (Loss) |
|||||||||||
Upholstery segment |
$31,019 |
$27,032 |
$96,762 |
$81,753 |
|||||||
Casegoods segment |
259 |
1,181 |
2,640 |
5,540 |
|||||||
Retail segment |
3,994 |
(1,112) |
4,099 |
(7,819) |
|||||||
VIEs |
— |
— |
— |
959 |
|||||||
Restructuring |
1 |
(59) |
(2,715) |
(281) |
|||||||
Corporate and Other |
(9,113) |
(10,152) |
(33,159) |
(30,521) |
|||||||
Consolidated operating income |
$26,160 |
$16,890 |
$67,627 |
$49,631 |
|||||||
LA-Z-BOY INCORPORATED |
|||||||||
UNAUDITED QUARTERLY FINANCIAL DATA |
|||||||||
(Dollar amounts in thousands, except per share data) |
(13 weeks) |
(13 weeks) |
(13 weeks) |
(13 weeks) |
|||||
Fiscal Quarter Ended |
7/28/2012 |
10/27/2012 |
1/26/2013 |
4/27/2013 |
|||||
Sales |
$301,501 |
$322,341 |
$349,148 |
$359,535 |
|||||
Cost of sales |
211,889 |
222,032 |
235,699 |
237,966 |
|||||
Gross profit |
89,612 |
100,309 |
113,449 |
121,569 |
|||||
Selling, general and administrative expense |
81,986 |
89,746 |
90,171 |
95,409 |
|||||
Operating income |
7,626 |
10,563 |
23,278 |
26,160 |
|||||
Interest expense |
173 |
191 |
148 |
234 |
|||||
Interest income |
121 |
116 |
198 |
186 |
|||||
Other income (expense), net |
(121) |
212 |
2,404 |
713 |
|||||
Income before income taxes |
7,453 |
10,700 |
25,732 |
26,825 |
|||||
Income tax expense |
2,758 |
3,868 |
8,569 |
8,333 |
|||||
Net income |
4,695 |
6,832 |
17,163 |
18,492 |
|||||
Net income attributable to noncontrolling interests |
(297) |
(213) |
(99) |
(184) |
|||||
Net income attributable to La-Z-Boy Incorporated |
$4,398 |
$6,619 |
$17,064 |
$18,308 |
|||||
Diluted weighted average shares |
53,040 |
53,268 |
53,401 |
53,754 |
|||||
Diluted net income per share attributable to La-Z-Boy Incorporated |
$0.08 |
$0.12 |
$0.32 |
$0.33 |
|||||
Dividends declared per share |
$— |
$— |
$0.04 |
$0.04 |
LA-Z-BOY INCORPORATED |
|||||||||
UNAUDITED QUARTERLY FINANCIAL DATA |
|||||||||
(Dollar amounts in thousands, except per share data) |
(13 weeks) |
(13 weeks) |
(13 weeks) |
(13 weeks) |
|||||
Fiscal Quarter Ended |
7/30/2011 |
10/29/2011 |
1/28/2012 |
4/28/2012 |
|||||
Sales |
$280,094 |
$307,679 |
$316,515 |
$327,388 |
|||||
Cost of sales |
199,166 |
211,896 |
216,724 |
224,033 |
|||||
Gross profit |
80,928 |
95,783 |
99,791 |
103,355 |
|||||
Selling, general and administrative expense |
77,455 |
83,535 |
82,771 |
86,465 |
|||||
Operating income |
3,473 |
12,248 |
17,020 |
16,890 |
|||||
Interest expense |
424 |
389 |
274 |
297 |
|||||
Interest income |
183 |
166 |
138 |
124 |
|||||
Income from Continued Dumping and Subsidy Offset Act, net |
322 |
— |
1,415 |
16,300 |
|||||
Other income (expense), net |
373 |
(108) |
(89) |
(214) |
|||||
Income before income taxes |
3,927 |
11,917 |
18,210 |
32,803 |
|||||
Income tax expense (benefit) |
(41,929) |
4,245 |
2,864 |
12,769 |
|||||
Net income |
45,856 |
7,672 |
15,346 |
20,034 |
|||||
Net (income) loss attributable to noncontrolling interests |
(320) |
198 |
(388) |
(432) |
|||||
Net income attributable to La-Z-Boy Incorporated |
$45,536 |
$7,870 |
$14,958 |
$19,602 |
|||||
Diluted weighted average shares |
52,443 |
52,475 |
52,379 |
52,609 |
|||||
Diluted net income per share attributable to La-Z-Boy Incorporated |
$0.85 |
$0.15 |
$0.28 |
$0.37 |
|||||
Dividends declared per share |
$— |
$— |
$— |
$— |
SOURCE
Kathy Liebmann, (734) 241-2438, kathy.liebmann@la-z-boy.com