EX-99.2 3 a19-17396_1ex99d2.htm EX-99.2

Exhibit 99.2

 

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

 

 

 

Quarter Ended

 

(Unaudited, amounts in thousands, except per share data)

 

7/27/19

 

7/28/18

 

Sales

 

$

413,633

 

$

384,695

 

Cost of sales

 

245,921

 

236,173

 

Gross profit

 

167,712

 

148,522

 

Selling, general and administrative expense

 

144,290

 

125,362

 

Operating income

 

23,422

 

23,160

 

Interest expense

 

(318

)

(104

)

Interest income

 

727

 

602

 

Other income (expense), net

 

(760

)

892

 

Income before income taxes

 

23,071

 

24,550

 

Income tax expense

 

5,083

 

5,599

 

Net income

 

17,988

 

18,951

 

Net (income) loss attributable to noncontrolling interests

 

81

 

(648

)

Net income attributable to La-Z-Boy Incorporated

 

$

18,069

 

$

18,303

 

 

 

 

 

 

 

Basic weighted average common shares

 

46,820

 

46,716

 

Basic net income attributable to La-Z-Boy Incorporated per share

 

$

0.39

 

$

0.39

 

 

 

 

 

 

 

Diluted weighted average common shares

 

47,125

 

47,161

 

Diluted net income attributable to La-Z-Boy Incorporated per share

 

$

0.38

 

$

0.39

 

 


 

LA-Z-BOY INCORPORATED

CONSOLIDATED BALANCE SHEET

 

(Unaudited, amounts in thousands, except par value)

 

7/27/19

 

4/27/19

 

Current assets

 

 

 

 

 

Cash and equivalents

 

$

111,622

 

$

129,819

 

Restricted cash

 

1,970

 

1,968

 

Receivables, net of allowance of $2,177 at 7/27/19 and $2,180 at 4/27/19

 

134,379

 

143,288

 

Inventories, net

 

197,701

 

196,899

 

Other current assets

 

85,631

 

69,144

 

Total current assets

 

531,303

 

541,118

 

Property, plant and equipment, net

 

204,789

 

200,523

 

Goodwill

 

184,675

 

185,867

 

Other intangible assets, net

 

29,595

 

29,907

 

Deferred income taxes — long-term

 

21,906

 

20,670

 

Right of use lease asset

 

312,433

 

 

Other long-term assets, net

 

77,449

 

81,705

 

Total assets

 

$

1,362,150

 

$

1,059,790

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Current portion of long-term debt

 

$

 

$

180

 

Accounts payable

 

62,935

 

65,365

 

Lease liability, short-term

 

64,158

 

 

Accrued expenses and other current liabilities

 

168,757

 

173,091

 

Total current liabilities

 

295,850

 

238,636

 

Long-term debt

 

 

19

 

Lease liability, long-term

 

262,264

 

 

Other long-term liabilities

 

105,898

 

124,159

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Preferred shares — 5,000 authorized; none issued

 

 

 

Common shares, $1 par value — 150,000 authorized; 46,690 outstanding at 7/27/19 and 46,955 outstanding at 4/27/19

 

46,690

 

46,955

 

Capital in excess of par value

 

311,207

 

313,168

 

Retained earnings

 

329,096

 

325,847

 

Accumulated other comprehensive loss

 

(3,728

)

(3,462

)

Total La-Z-Boy Incorporated shareholders’ equity

 

683,265

 

682,508

 

Noncontrolling interests

 

14,873

 

14,468

 

Total equity

 

698,138

 

696,976

 

Total liabilities and equity

 

$

1,362,150

 

$

1,059,790

 

 


 

LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

Quarter Ended

 

(Unaudited, amounts in thousands)

 

7/27/19

 

7/28/18

 

Cash flows from operating activities

 

 

 

 

 

Net income

 

$

17,988

 

$

18,951

 

Adjustments to reconcile net income to cash provided by (used for) operating activities

 

 

 

 

 

Gain on disposal of assets

 

(536

)

 

Change in deferred taxes

 

(677

)

(183

)

Provision for doubtful accounts

 

116

 

279

 

Depreciation and amortization

 

7,298

 

7,541

 

Equity-based compensation expense

 

1,675

 

2,040

 

Change in receivables

 

8,535

 

14,236

 

Change in inventories

 

(527

)

(11,092

)

Change in other assets

 

7,305

 

463

 

Change in payables

 

(1,391

)

2,491

 

Change in other liabilities

 

(20,446

)

(2,572

)

Net cash provided by operating activities

 

19,340

 

32,154

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

Proceeds from disposals of assets

 

22

 

61

 

Proceeds from insurance

 

642

 

58

 

Capital expenditures

 

(12,299

)

(15,873

)

Purchases of investments

 

(5,288

)

(4,190

)

Proceeds from sales of investments

 

4,060

 

4,762

 

Acquisitions, net of cash acquired

 

(5,438

)

 

Net cash used for investing activities

 

(18,301

)

(15,182

)

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

Payments on debt and finance lease liabilities

 

(47

)

(59

)

Stock issued for stock and employee benefit plans, net of shares withheld for taxes

 

(1,417

)

(2,009

)

Purchases of common stock

 

(12,313

)

(7,944

)

Dividends paid

 

(6,112

)

(5,625

)

Net cash used for financing activities

 

(19,889

)

(15,637

)

 

 

 

 

 

 

Effect of exchange rate changes on cash and equivalents

 

655

 

(1,601

)

Change in cash, cash equivalents and restricted cash

 

(18,195

)

(266

)

Cash, cash equivalents and restricted cash at beginning of Period

 

131,787

 

136,871

 

Cash, cash equivalents and restricted cash at end of period

 

$

113,592

 

$

136,605

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing activities

 

 

 

 

 

Capital expenditures included in payables

 

$

2,416

 

$

4,122

 

 


 

LA-Z-BOY INCORPORATED

SEGMENT INFORMATION

 

 

 

Quarter Ended

 

(Unaudited, amounts in thousands)

 

7/27/19

 

7/28/18

 

Sales

 

 

 

 

 

Upholstery segment:

 

 

 

 

 

Sales to external customers

 

$

230,767

 

$

240,054

 

Intersegment sales

 

62,649

 

53,344

 

Upholstery segment sales

 

293,416

 

293,398

 

 

 

 

 

 

 

Casegoods segment:

 

 

 

 

 

Sales to external customers

 

22,006

 

24,403

 

Intersegment sales

 

5,129

 

3,983

 

Casegoods segment sales

 

27,135

 

28,386

 

 

 

 

 

 

 

Retail segment sales

 

142,996

 

119,228

 

 

 

 

 

 

 

Corporate and Other:

 

 

 

 

 

Sales to external customers

 

17,864

 

1,010

 

Intersegment sales

 

2,688

 

2,855

 

Corporate and Other sales

 

20,552

 

3,865

 

 

 

 

 

 

 

Eliminations

 

(70,466

)

(60,182

)

Consolidated sales

 

$

413,633

 

$

384,695

 

 

 

 

 

 

 

Operating Income (Loss)

 

 

 

 

 

Upholstery segment

 

$

26,267

 

$

23,884

 

Casegoods segment

 

2,597

 

3,080

 

Retail segment

 

8,477

 

4,458

 

Corporate and Other

 

(13,919

)

(8,262

)

Consolidated operating income

 

23,422

 

23,160

 

 


 

LA-Z-BOY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

 

 

 

Quarter Ended

 

(Amounts in thousands, except per share data)

 

7/27/2019

 

7/28/2018

 

GAAP gross profit

 

$

167,712

 

$

148,522

 

Add back: Purchase accounting charges — incremental expense upon the sale of inventory acquired at fair value

 

117

 

42

 

Add back: Supply chain optimization initiative

 

1,508

 

 

Non-GAAP gross profit

 

$

169,337

 

$

148,564

 

 

 

 

 

 

 

GAAP SG&A

 

$

144,290

 

$

125,362

 

Less: Purchase accounting charges — amortization of intangible assets and retention agreements

 

(1,192

)

(104

)

Non-GAAP SG&A

 

$

143,098

 

$

125,258

 

 

 

 

 

 

 

GAAP operating income

 

$

23,422

 

$

23,160

 

Add back: Purchase accounting charges

 

1,309

 

146

 

Add back: Supply chain optimization initiative

 

1,508

 

 

Non-GAAP operating income

 

$

26,239

 

$

23,306

 

 

 

 

 

 

 

GAAP income before income taxes

 

$

23,071

 

$

24,550

 

Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense

 

1,502

 

146

 

Add back: Supply chain optimization initiative

 

1,508

 

 

Non-GAAP income before income taxes

 

$

26,081

 

$

24,696

 

 

 

 

 

 

 

GAAP net income attributable to La-Z-Boy Incorporated

 

$

18,069

 

$

18,303

 

Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense

 

1,502

 

146

 

Less: Tax effect of purchase accounting

 

(330

)

(33

)

Add back: Supply chain optimization initiative

 

1,508

 

 

Less: Tax effect of supply chain optimization Initiative

 

(332

)

 

Non-GAAP net income attributable to La-Z-Boy Incorporated

 

$

20,417

 

$

18,416

 

 

 

 

 

 

 

GAAP net income attributable to La-Z-Boy Incorporated per diluted share

 

$

0.38

 

$

0.39

 

Add back: Purchase accounting charges, net of tax, per share

 

0.02

 

 

Add back: Supply chain optimization initiative, net of tax, per share

 

0.02

 

 

Non-GAAP net income attributable to La-Z- Boy Incorporated per diluted share

 

$

0.42

 

$

0.39

 

 


 

LA-Z-BOY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

SEGMENT INFORMATION

 

 

 

Quarter Ended

 

(Amounts in thousands)

 

7/27/2019

 

% of sales

 

7/28/2018

 

% of sales

 

GAAP operating income (loss)

 

 

 

 

 

 

 

 

 

Upholstery segment

 

$

26,267

 

9.0

%

$

23,884

 

8.1

%

Casegoods segment

 

2,597

 

9.6

%

3,080

 

10.9

%

Retail segment

 

8,477

 

5.9

%

4,458

 

3.7

%

Corporate and Other

 

(13,919

)

N/M

 

(8,262

)

N/M

 

GAAP Consolidated operating income

 

$

23,422

 

5.7

%

23,160

 

6.0

%

 

 

 

 

 

 

 

 

 

 

Purchase accounting and supply chain optimization initiative affecting operating income

 

 

 

 

 

 

 

 

 

Upholstery segment

 

$

1,563

 

 

 

$

104

 

 

 

Casegoods segment

 

 

 

 

 

 

 

Retail segment

 

117

 

 

 

42

 

 

 

Corporate and Other

 

1,137

 

 

 

 

 

 

Consolidated Non-GAAP charges affecting operating income

 

$

2,817

 

 

 

$

146

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP operating income (loss)

 

 

 

 

 

 

 

 

 

Upholstery segment

 

$

27,830

 

9.5

%

$

23,988

 

8.2

%

Casegoods segment

 

2,597

 

9.6

%

3,080

 

10.9

%

Retail segment

 

8,594

 

6.0

%

4,500

 

3.8

%

Corporate and Other

 

(12,782

)

N/M

 

(8,262

)

N/M

 

Non-GAAP Consolidated operating income

 

$

26,239

 

6.3

%

$

23,306

 

6.1

%

 

N/M — Not Meaningful