LA-Z-BOY INC 10-K

ITEM 1. BUSINESS. Edward M. Knabusch and Edwin J. Shoemaker started Floral City Furniture in 1927, and in 1928 the newly formed company introduced its first recliner. In 1941, we were incorporated in the state of Michigan as La-Z-Boy Chair Company, and in 1996 we changed our name to La-Z-Boy Incorporated. Today, our La-Z-Boy brand is one of the most recognized brands in the furniture industry. We are the leading global producer of reclining chairs and the second largest manufacturer/distributor of residential furniture in the United States . The La-Z-Boy Furniture Galleries ® stores retail network is the third largest retailer of single-branded furniture in the United States . We manufacture, market, import, export, distribute and retail upholstery furniture products under the La-Z-Boy ® , England, Kincaid ® , and Joybird ® tradenames. In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid ® , American Drew ® , Hammary ® , and Joybird ® tradenames. As of April 25, 2020 , we had six major manufacturing locations and six regional distribution centers in the United States and two facilities in Mexico to support our speed-to-market and customization strategy. We closed our manufacturing facility located in Redlands, California as of the end of the second quarter of fiscal 2020. On June 4, 2020, we announced the closure of our Newton, Mississippi upholstery manufacturing facility. Production from our Newton upholstery facility will be shifted to available capacity at the company’s Dayton, Tennessee, Neosho, Missouri, and Siloam Springs, Arkansas plants. Refer to Note 21, Subsequent Events, for further information. We operate a wholesale sales office that is responsible for distribution of our product in the United Kingdom and Ireland. We operate a global trading company in Hong Kong which helps us manage our Asian supply chain by establishing and maintaining relationships with our Asian suppliers, as well as identifying efficiencies and savings opportunities. We also participate in two joint ventures in Thailand that support our international businesses: one that operates a manufacturing facility and another that operates a wholesale sales office. We also have contracts with several suppliers in Asia to produce products that support our pure import model for casegoods. We sell our products through multiple channels: to furniture retailers or distributors in the United States, Canada, and approximately 60 other countries, including the United Kingdom, China, Australia, South Korea and New Zealand; directly to consumers through retail stores that we own and operate; and through our websites, www.la-z-boy.com and www.joybird.com. The centerpiece of our retail distribution strategy is our network of 354 La-Z-Boy Furniture Galleries ® stores and 555 La-Z-Boy Comfort Studio ® locations, each dedicated to marketing our La-Z-Boy branded products. We consider this dedicated space to be "proprietary." We own 154 of the La-Z-Boy Furniture Galleries ® stores. The remainder of the La-Z-Boy Furniture Galleries ® stores, as well as all 555 La-Z-Boy Comfort Studio ® locations, are independently owned and operated. La-Z-Boy Furniture Galleries ® stores help consumers furnish their homes by combining the style, comfort, and quality of La-Z-Boy furniture with our available design services. La-Z-Boy Comfort Studio ® locations are defined spaces within larger independent retailers that are dedicated to displaying and selling La-Z-Boy branded products. In total, we have approximately 7.9 million square feet of proprietary floor space dedicated to selling La-Z-Boy branded products in North America. We also have approximately 2.7 million square feet of floor space outside of the United States and Canada dedicated to selling La-Z-Boy branded products. Our other brands, England, American Drew, Hammary, and Kincaid enjoy distribution through many of the same outlets, with slightly over half of Hammary’s sales originating through the La-Z-Boy Furniture Galleries ® store network. Kincaid and England have their own dedicated proprietary in-store programs with 606 outlets and approximately 1.9 million square feet of proprietary floor space. In total, our proprietary floor space includes approximately 12.5 million square feet worldwide. Joybird sells product primarily online and has a limited amount of proprietary retail showroom floor space it uses to develop its brand. Our goal is to deliver value to our shareholders over the long term through executing our strategic initiatives. The foundation of our strategic initiatives is driving profitable sales growth in all areas of our business. Principal Products and Industry Segments Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment. • Upholstery Segment . Our Upholstery segment is our largest business segment and consists primarily of two operating segments: La-Z-Boy, our largest operating segment, and the operating segment for our England subsidiary. The Upholstery segment also includes our international wholesale businesses. We aggregate these operating segments into one reportable segment because they are economically similar and because they meet the other aggregation criteria for determining reportable segments. Our Upholstery segment manufactures and imports upholstered furniture such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas. The 4 Table of Contents Upholstery segment sells directly to La-Z-Boy Furniture Galleries ® stores, operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers. • Casegoods Segment. Our Casegoods segment consists of one operating segment that sells furniture under three brands: American Drew ® , Hammary ® , and Kincaid ® . The Casegoods segment is an importer, marketer, and distributor of casegoods (wood) furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces, and also manufactures some custom upholstered furniture. The Casegoods segment sells directly to major dealers, as well as La-Z-Boy Furniture Galleries ® stores, and a wide cross-section of other independent retailers. • Retail Segment. Our Retail segment consists of one operating segment comprising our 154 company-owned La-Z-Boy Furniture Galleries ® stores. The Retail segment primarily sells upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores. • Corporate & Other. Corporate & Other includes the shared costs for corporate functions, including human resources, information technology, finance and legal, in addition to revenue generated through royalty agreements with companies licensed to use the La-Z-Boy ® brand name on various products. We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segments including our global trading company in Hong Kong and Joybird, an e-commerce retailer. Joybird manufactures and sells upholstered furniture such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports and sells casegoods (wood) furniture such as occasional tables and other accessories. Joybird sells to end consumers primarily online through its website, www.joybird.com. None of the operating segments included in Corporate & Other meet the requirements of reportable segments at this time. We have provided additional detailed information regarding our segments and their products in Note 17, Segment Information, to our consolidated financial statements and our "Management's Discussion and Analysis" section, both of which are included in this report. Recent Developments On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 to be a global pandemic. This declaration, along with the continued spread of the disease, prompted federal, state, and local governments throughout the world, including the United States, to implement swift measures in an effort to combat the spread of the virus through social distancing. Such measures included temporary quarantines, shelter-in-place orders and directives, restrictions on travel, and forced closures of non-essential businesses, which included many sectors within retail commerce. On March 29, 2020, we announced our action plan in response to the COVID-19 crisis including, among other things, the temporary closure of our U.S. manufacturing facilities, company-owned La-Z-Boy Furniture Galleries ® stores, and regional distribution centers, the furlough of approximately 70% of our global workforce, temporary salary reductions of 50% for senior management and 25% for salaried employees, and temporary suspension of cash compensation for our board of directors. On April 9, 2020, we provided an update to our COVID-19 action plan which emphasized our continued focus on the health, safety and well-being of our employees and their families, our customers, and the communities in which we operate. Our update involved the continued evaluation of plans and timing as it related to re-opening our company owned La-Z-Boy Furniture Galleries ® stores and to re-starting production at our U.S.- and Mexico-based manufacturing facilities, which are subject to applicable federal, state and local requirements and guidelines. In addition, we announced that we would continue to operate our regional distribution centers, adhering to safety guidelines, to deliver in-process orders. On April 22, 2020, we provided a further update on our COVID-19 action plan which included, among other things, the resumption of operations at partial production capacity at several U.S.- based plants on April 27, 2020. In addition, we announced that we would open several retail locations across the U.S. on a reduced schedule with the expectation to open additional stores in the coming weeks, in accordance with federal, state and local guidelines. In addition to the operational actions outlined above, we have implemented a number of measures to maintain liquidity during the COVID-19 crisis, including, among other things, managing workforce costs, deferring rent payments on active leases and delaying planned capital expenditures deemed non-essential. Further, during the fourth quarter of 2020 we proactively drew $75.0 million under our revolving credit facility and announced the elimination of the June quarterly dividend and temporarily halted our share repurchase program to prioritize near-term financial flexibility. 5 Table of Contents The temporary salary reductions instituted on March 29, 2020, ended and full base salaries were reinstated as of June 1, 2020, for all employees other than the named executive officers of the Company. The 50% salary reductions for the named executive officers remain in effect as of the date of this filing. On June 4, 2020, we announced the reduction of our global workforce by about 10%, or approximately 850 employees, across manufacturing, retail and corporate locations, including the closure of our Newton, Mississippi, upholstery manufacturing facility. Production from that facility will be shifted to available capacity at our Dayton, Tennessee, Neosho, Missouri, and Siloam Springs, Arkansas plants. The Newton-based integrated internal supply functions will remain in operation. Approximately 170 individuals work across these areas and will remain with the company. Refer to Note 21, Subsequent Events, for further information. We continue to manage the impact of the COVID-19 crisis on a daily basis and as of the date of this filing, we are unable to predict when and how quickly we will be able to resume full retail and manufacturing operations and the impact this will have on our financial operations in the near and long term. The timing of any future actions in response to COVID-19 is largely dependent on the mitigation of the spread of the virus, status of government orders, directives and guidelines, recovery of the business environment, economic conditions, and consumer demand for our products. We expect a phased return to operations over a period of time. Additionally, as we have re-opened stores and re-started plants, we continue to follow enhanced health and safety protocols across all locations to ensure our employees and our customers are well-protected. Raw Materials and Parts The principal raw materials and parts used for manufacturing are purchased cover (primarily fabrics and leather), polyester batting and polyurethane foam for cushioning and padding, lumber and plywood for frames, steel for motion mechanisms, electrical components for power units and various other metal components for fabrication of product. We purchase about 50% of our polyurethane foam from one supplier, which has several facilities across the United States that deliver to our plants. We purchase cover from a variety of sources, but we rely on a limited number of major suppliers. We purchase approximately two-thirds of our cover in a raw state (fabric rolls or leather hides) and cut and sew it into cover in our cut and sew facility in Mexico. We purchase the remainder in covers that have already been cut and sewn to our specifications by third-party offshore suppliers. We buy cut-and-sewn leather and fabric products from five primary suppliers. Of the products that we import, two suppliers that operate in China and one in Vietnam manufacture approximately 95% of the leather cut-and-sewn sets, and three suppliers that also operate in China manufacture approximately 90% of the fabric products. One of the five primary suppliers manufactures both leather cut-and-sewn sets and fabric products. We use these suppliers primarily for their product design capabilities, to leverage our buying power, and to control quality and product flow, in addition to their ability to handle the volume of product we require to operate our business. If any of these suppliers experience financial or other difficulties, we could experience temporary disruptions in our manufacturing process until we obtain alternate suppliers. We manage our Asian supply chain through our global trading company in Hong Kong, which works to identify efficiencies and savings opportunities, while verifying La-Z-Boy quality standards are being adhered to and managing the relationships with our Asian suppliers. During fiscal 2020 , the prices of materials we use in our upholstery manufacturing process decreased. As we begin fiscal 2021 , we expect the impact of the COVID-19 pandemic will result in raw material prices that are flat or slightly down in the short term, then gradually increase as North American manufacturing returns to more normal levels. Geo-political pressures associated with COVID-19 will continue to introduce uncertainty into many markets, including with respect to freight and tariffs. To the extent that we experience incremental costs in these areas, we may increase our selling prices or assess material surcharges to offset the impact while they are in effect. Finished Goods Imports We import all of the casegoods (wood) furniture that we sell. In fiscal 2020 , we purchased approximately 58% of this imported product from three suppliers. We use these suppliers primarily to leverage our buying power, to control quality and product flow, and because their capabilities align with our product design needs. In addition, these suppliers have the ability to handle the volume of product we require. If any of these suppliers experience financial or other difficulties, or are negatively affected by the COVID-19 pandemic, we could experience disruptions in our product flow until we obtain alternate suppliers, which could be lengthy due to the longer lead time required for sourced wood furniture from Asian manufacturers. We use an all-import model for our casegoods furniture primarily to remain competitive for these products. The prices we paid for these imported products, including associated transportation costs, increased in fiscal 2020 compared with fiscal 2019 , partially due to an increase in tariffs on certain product imported from China. During fiscal 2020, to reduce the impact of higher 6 Table of Contents tariffs, we shifted a large portion of product sourcing from China to Vietnam. As a result, we now import approximately 10% of our casegoods product from China and 87% from Vietnam compared to 25% and 72% from China and Vietnam in fiscal 2019, respectively. In fiscal 2021 , we expect freight costs to decrease and overall product costs to be flat when compared with 2020. Looking across our business, imported finished goods represented 7% and 8% of our consolidated sales in fiscal 2020 and fiscal 2019 , respectively. Seasonal Business We believe that the demand for furniture generally reflects sensitivity to overall economic conditions, including consumer confidence, housing market conditions and unemployment rates. For our wholesale businesses, the fourth quarter is historically the seasonally highest-volume sales quarter. For our retail and e-commerce businesses, which includes our company-owned retail stores and Joybird, the third quarter is typically the seasonally highest-volume sales quarter. During fiscal 2020 , however, we experienced our largest sales volume during the third quarter in both our wholesale and retail businesses followed by a significant slowdown in sales in the middle of the fourth quarter due to the impact of COVID-19. During the fourth quarter of fiscal 2020, the entire U.S. retail industry was adversely impacted by retail store and manufacturing closures, supply chain disruption and economic uncertainty due to the COVID-19 pandemic. This impact is not reflective of any seasonal trends in the furniture industry and is not an indicator that seasonal trends are changing for our wholesale or retail businesses. We schedule production to maintain consistent manufacturing activity throughout the year whenever possible. During the summer months, the furniture industry typically experiences weaker demand, and as such we typically shut down our domestic plants for one week each fiscal year to perform routine maintenance on our equipment. Accordingly, for our wholesale business, the first quarter is usually the Company's weakest in terms of sales and earnings. Also driven by the seasonal slowdown in the summer, our retail business typically experiences its lowest sales in the first quarter. Economic Cycle and Purchasing Cycle Our sales are impacted by the overall growth of the furniture industry, which is primarily influenced by consumer discretionary spending and existing and new housing activity. In addition, consumer confidence, employment rates, international trade policies, and other factors could affect demand. We are unable to predict how or to what extent the COVID-19 pandemic may impact the economic and purchasing cycle for our products in the short and long term. Upholstered furniture has a shorter life cycle than casegoods furniture because upholstered furniture is typically more fashion and design-oriented and is often purchased one or two pieces at a time. Purchases and demand for consumer goods, including upholstered furniture, fluctuate based on consumer confidence. Casegoods products, in contrast, are longer-lived and frequently purchased in groupings or "suites," resulting in a much larger cost to the consumer. As a result, casegoods sales are more sensitive to economic conditions, including growth or a slowdown in the housing market, whereas upholstered furniture normally exhibits a less volatile sales pattern over an economic cycle. Practices Regarding Working Capital Items The following describes our significant practices regarding working capital items. Inventory: For our Upholstery segment, we maintain raw materials and work-in-process inventory at our manufacturing locations. Finished goods inventory is maintained at our six regional distribution centers as well as our manufacturing locations. Our regional distribution centers allow us to streamline the warehousing and distribution processes for our La-Z-Boy Furniture Galleries ® store network, including both company-owned stores and independently-owned stores. Our regional distribution centers also allow us to reduce the number of individual warehouses needed to supply our retail outlets and help us reduce inventory levels at our manufacturing and retail locations. For our Casegoods segment, we import wood furniture from Asian vendors, resulting in long lead times on these products. To address these long lead times and meet our customers' delivery requirements, we maintain higher levels of finished goods inventory in our domestic warehouses, as a percentage of sales, of our casegoods products than our upholstery products. Our company-owned La-Z-Boy Furniture Galleries ® stores have finished goods inventory at the stores for display purposes. 7 Table of Contents Our Joybird business maintains raw materials and work-in-process inventory at its manufacturing location. Joybird finished goods inventory is maintained at our regional distribution centers, at its manufacturing location or in-transit to the end consumer. Our inventory decreased $15.3 million as of year end fiscal 2020 compared with year end fiscal 2019 primarily as a result of a slowdown in our supply chain related to decreased sales volume and the closure of our manufacturing facilities for a four-week period at the end of the fourth quarter, all due to the impact of COVID-19. We actively manage our inventory levels on an ongoing basis to ensure they are appropriate relative to our sales volume, while maintaining our focus on service to our customers. Accounts Receivable: Our accounts receivable decreased $43.9 million as of year end fiscal 2020 compared with year end fiscal 2019 . The decrease in accounts receivable was primarily due to fourth quarter sales in fiscal 2020 being lower compared with the same period a year ago due to the impact of COVID-19 as well as an increase in our allowance for receivable credit losses and the write-off of $7.9 million of accounts receivable, primarily due to the bankruptcy of our largest customer, Art Van Furniture Group. We monitor our customers' accounts and limit our credit exposure to certain independent dealers and strive to decrease our days' sales outstanding where possible. Our days' sales outstanding is a measure of the time needed to collect outstanding accounts receivable once we have completed a sale. Our days' sales outstanding was relatively flat in fiscal 2020 compared with fiscal 2019. Accounts Payable: Our accounts payable decreased $9.9 million as of year end fiscal 2020 compared with year end fiscal 2019 , primarily due to a slowdown in the purchase of inventory and a decrease in nonessential purchases in response to lower sales volume, which was partly offset by an increase in days payables outstanding, due to an initiative to extend payment terms with suppliers by an average of 15 days in order to enhance liquidity in response to COVID-19. Customer Deposits: We collect a deposit from our customers at the time a customer order is placed in one of our company-owned retail stores or through our websites, www.la-z-boy.com and www.joybird.com. Customer deposits decreased $2.1 million as of fiscal year end 2020 compared with year end fiscal 2019 , primarily due to lower written sales volume resulting from COVID-19 related retail store closures. Customers Our wholesale customers are furniture retailers. While primarily located throughout the United States and Canada, we also have customers located in various other countries, including the United Kingdom, China, Australia, South Korea and New Zealand. Sales in our Upholstery and Casegoods segments are primarily to third-party furniture retailers, but we also sell directly to end consumers through our company-owned La-Z-Boy Furniture Galleries ® stores that make up our Retail segment and through our websites, www.la-z-boy.com and www.joybird.com. We have formal agreements with many furniture retailers for them to display and merchandise products from one or more of our operating units and sell them to consumers in dedicated retail space, either in stand-alone stores or dedicated proprietary galleries or studios within their stores. We consider this dedicated space to be "proprietary." For our Upholstery and Casegoods segments, our fiscal 2020 customer mix based on sales was approximately 60% proprietary, 15% major dealers such as Slumberland Furniture, Art Van Furniture Group, and Mathis Bros., and 25% other independent retailers. Art Van Furniture Group filed for bankruptcy and has begun Chapter 7 liquidation during the fourth quarter of fiscal 2020. The success of our product distribution model relies heavily on having retail floor space that is dedicated to displaying and marketing our products. The 354 -store La-Z-Boy Furniture Galleries ® network is central to this approach. In addition, we sell product through proprietary space within other retail furniture stores, primarily La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, Kincaid Shoppes, and other international locations. Additionally, our Joybird business, which sells product primarily online to end consumers through its website, www.joybird.com, also has a limited amount of proprietary retail floor space that it uses as a showroom to develop its brand. Maintaining, updating, and, when appropriate, expanding our proprietary distribution network is a key part of our overall sales and marketing strategy. We intend, over the long-term, to not only increase the number of stores in the network but also to continue to improve their quality, including upgrading old-format stores to our new concept design through remodels and relocations. We continue to maintain and update our current stores to improve the quality of the network. Subject to the recovery of the business environment in fiscal 2021, the La-Z-Boy Furniture Galleries ® store network plans to open, relocate or remodel 20 to 25 stores during fiscal 2021 , all of which will feature our latest store designs. 8 Table of Contents We select independent dealers for our proprietary La-Z-Boy Furniture Galleries ® store network based on factors such as their management and financial qualifications and the potential for distribution in specific geographical areas. This proprietary distribution benefits La-Z-Boy, our dealers and our consumers. It enables La-Z-Boy to concentrate our marketing with sales personnel dedicated to our entire product line, and only that line and approved accessories. It also allows dealers that join this proprietary group to take advantage of best practices, with which other proprietary dealers have succeeded, and we facilitate forums for these dealers to share them. These La-Z-Boy Furniture Galleries ® stores provide our consumers a full-service shopping experience with a large variety of products, knowledgeable sales associates, and design service consultants. Orders and Backlog We typically build upholstery units based on specific dealer orders, either for dealer stock or to fill consumers' custom orders. We import casegoods product primarily to fill our internal orders, rather than customer or consumer orders, resulting in higher finished goods inventory on hand as a percentage of sales. Because the size of our backlog at a given time may not be indicative of our future sales, we do not rely entirely on backlogs to predict future sales. Our Upholstery segment backlogs as of April 25, 2020 , and April 27, 2019 , were approximately $72.6 million and $66.9 million, respectively. Higher backlogs as of the end of fiscal 2020 were driven by strong written orders in the second and third quarter which outpaced invoiced orders due to our four-week manufacturing shut down and a slowdown in our ability to deliver to certain areas due to COVID-19. Additionally, due to COVID-19, the annual April Furniture Market, which is typically a critical source of order generation was canceled. Our Casegoods segment backlogs were $5.4 million and $7.4 million, as of April 25, 2020 , and April 27, 2019 , respectively, primarily attributable to the negative impact of COVID-19. Our Corporate and Other segment backlog as of April 25, 2020 , and April 27, 2019 , was $4.9 million and $3.7 million, respectively, which relates to the Joybird business. Joybird continued to receive orders due to its online business model which built a backlog while its manufacturing facilities were closed due to COVID-19 at the end of fiscal year 2020. Competitive Conditions We are the second largest manufacturer/distributor of residential (living and family room, bedroom, and dining room) furniture in the United States, as measured by annual sales volume. Alternative distribution channels have increasingly affected our retail markets. Direct-to-consumer brands, such as Article and Burrow, bypass brick and mortar retailers entirely or in some cases have developed a product that can be shipped more easily than traditional upholstered furniture, thus increasing competition for our products. The increased ability of consumers to purchase furniture through various furniture manufacturers' and digital-only retailers' internet websites, including companies such as Amazon, Hayneedle, QVC, and Wayfair, has also increased competition in the industry. Although digital retailers operate with lower overhead costs than a brick-and-mortar retailer, customer acquisition costs and advertising spend is typically much higher. Companies such as Costco, Home Depot, IKEA, Sam's Club, Target, Wal-Mart, and others, also offer products that compete with some of our product lines. The home furnishings industry competes primarily on the basis of product styling and quality, customer service (product availability and delivery), price, and location. We compete primarily by emphasizing our brand and the value, comfort, quality, and styling of our products. In addition, we remain committed to innovation while striving to provide outstanding customer service, exceptional dealer support, and efficient on-time delivery. Maintaining, updating, and expanding our proprietary distribution system, including identifying desirable retail locations, is a key strategic initiative for us in striving to remain competitive. We compete in the mid- to upper-mid price point, and a shift in consumer taste and trends to lower-priced products could negatively affect our competitive position. In the Upholstery segment, our largest competitors are Ashley, Bassett, Best Chair, Flexsteel, Klaussner, Kuka, Man Wah, and Southern Motion. In the Casegoods segment, our main competitors are Bassett, Bernhardt, Hooker Furniture, and Lacquer Craft. The Casegoods segment faces additional market pressures from foreign manufacturers entering the United States market and increased direct purchases from foreign suppliers by large United States retailers. The La-Z-Boy Furniture Galleries ® stores operate in the retail furniture industry in the United States and Canada, and different stores have different competitors based on their geographic locations. Competitors include: Arhaus, Ashley, Bassett Furniture Direct, Bob's Discount Furniture, Crate and Barrel, Ethan Allen, Restoration Hardware, Havertys, Williams-Sonoma, several 9 Table of Contents other regional competitors (for example Raymour & Flanigan Furniture, Mathis Brothers, and Slumberland Furniture), and family-owned independent furniture stores. In our Corporate & Other segment, our Joybird business sells almost exclusively online and competes primarily with Amazon, Article, CB2, Love Sac, Maiden Home, Wayfair and West Elm. In addition to the larger competitors listed above, a substantial number of small and medium-sized companies operate within our business segments, all of which are highly competitive. Trademarks, Licenses and Patents We own the La-Z-Boy trademark, which is essential to the Upholstery and Retail segments of our business, and the Joybird trademark, which is essential to our e-commerce business. We also own a number of other trademarks that we utilize in marketing our products. We consider our La-Z-Boy trademark to be among our most valuable assets and we have registered that trademark and others in the United States and various other countries where our products are sold. These trademarks have a perpetual life, subject to renewal. We license the use of the La-Z-Boy trademark to our major international partners and dealers outside of North America. We also license the use of the La-Z-Boy trademark on contract office furniture, outdoor furniture, and non-furniture products, as these arrangements enhance our brand awareness, broaden the perceptions of La-Z-Boy, and create visibility of the La-Z-Boy brand in channels outside of the residential furniture industry. In addition, we license to our branded dealers the right to use our La-Z-Boy trademark in connection with the sale of our products and related services, on their signs, and in other ways, which we consider to be a key part of our marketing strategies. We provide more information about those dealers, under "Customers." We hold a number of United States and foreign patents that we actively enforce. We have followed a policy of filing patent applications for the United States and select foreign countries on inventions, designs and improvements that we deem valuable, but these patents do expire at various times. While our intellectual property rights in the aggregate are important to the operation of our business, we do not believe that any existing patent, license, trademark or other intellectual property right (other than the La-Z-Boy trademark) is of such importance that its loss or termination would have a material adverse effect on our business taken as a whole. We vigorously protect our trademarks and patents against third-party infringement. Compliance with Environmental Regulations Our manufacturing operations involve the use and disposal of certain substances regulated under environmental protection laws and, from time to time, we may be involved in a small number of remediation actions and site investigations concerning these substances. Based on a review of all currently known facts and our experience with previous environmental matters, we currently do not believe it is probable that we will have any additional loss for environmental matters that would be material to our consolidated financial statements. Employees We employed a little over 9,500 full-time equivalent employees as of April 25, 2020 , compared with approximately 9,700 employees at the end of fiscal 2019 . We employed approximately 7,300 employees in our Upholstery segment, 200 in our Casegoods segment, 1,500 in our Retail segment, 300 in our Joybird business, and the remaining employees are corporate personnel. We employ the majority of our employees on a full-time basis. As part of our COVID-19 action plan, on March 29, 2020, we announced temporary furloughs for approximately 70% of our global workforce. On June 4, 2020, we announced a global workforce reduction of about 10%, or approximately 850 employees, across our manufacturing, retail and corporate locations, including the closure of our Newton, Mississippi upholstery manufacturing facility. The Company’s Newton upholstery plant employs about 300 people, of which, approximately 170 individuals will remain with the company. Refer to Note 21, Subsequent Events, for further information. The majority of furloughed employees are expected to return to work by July 1, 2020, with timing largely dependent upon stay-at-home guidelines, economic conditions and customer demand, and our focus on the health, safety and well-being of our employees. 10 Table of Contents Internet Availability Our Forms 10-K, 10-Q, 8-K, proxy statements on Schedule 14A, and amendments to those reports are available free of charge through links on our internet website, www.la-z-boy.com, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Copies of any materials we file or furnish to the SEC can also be obtained free of charge through the SEC's website at www.sec.gov. The information on our website is not incorporated by reference into this report or any other reports we file with, or furnish to, the SEC.