EX-99.2 3 a19-11686_1ex99d2.htm EX-99.2

Exhibit 99.2

 

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 charge

 

(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