What changed in this filing

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Item 1. Financial Statements

2021-02-16 compared with 2020-11-17 · 82 added, 54 removed, 549 unchanged (20% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENT OF INCOME

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands, except per share data) 1/23/21 1/25/20 1/23/21 1/25/20

19 unchanged sentences

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20 01/23/21 01/25/20

5 unchanged sentences

Net pension amortization, net of tax 65 41 195 123

Total other comprehensive income 1,354 1,619 3,572 2,386

Total other comprehensive income (loss) 2,337 ( 55 ) 5,909 2,331

Total comprehensive income before allocation to noncontrolling interests 31,926 34,661 75,481 77,939

43 unchanged sentences

CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended

Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20

64 unchanged sentences

At October 24, 2020 $ 46,113 $ 326,182 $ 378,438 $ ( 3,957 ) $ 7,873 $ 754,649

Net income — — 29,232 — 357 29,589

Other comprehensive income — — — 1,975 362 2,337

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 225 5,698 ( 28 ) — — 5,895

Purchases of 22 shares of common stock

( 22 ) ( 853 ) — — — ( 875 )

Stock option and restricted stock expense — 2,948 — — — 2,948

Dividends declared and paid ($ 0.14 /share)

— — ( 6,484 ) — — ( 6,484 )

Dividends declared not paid ($ 0.14 /share)

— — ( 41 ) — — ( 41 )

At January 23, 2021 $ 46,316 $ 333,975 $ 401,117 $ ( 1,982 ) $ 8,592 $ 788,018

(1) No dividends to shareholders were declared or paid during the first quarter of fiscal 2021;

31 unchanged sentences

At October 26, 2019 $ 46,439 $ 314,239 $ 336,989 $ ( 2,468 ) $ 15,543 $ 710,742

Net income — — 34,512 — 204 34,716

Other comprehensive income (loss) — — — 107 ( 162 ) ( 55 )

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 14 281 ( 37 ) — — 258

Purchases of 378 shares of common stock

( 378 ) ( 284 ) ( 11,520 ) — — ( 12,182 )

Stock option and restricted stock expense — 2,528 — — — 2,528

Cumulative effect adjustment for investments, net of tax — — — — — —

Dividends declared and paid ($ 0.14 /share)

— — ( 6,490 ) — — ( 6,490 )

Dividends declared not paid ($ 0.14 /share)

— — ( 35 ) — — ( 35 )

At January 25, 2020 $ 46,075 $ 316,764 $ 353,419 $ ( 2,361 ) $ 15,585 $ 729,482

(1) Cumulative effect adjustment of deferred gains on prior sale/leaseback transactions as a result of adopting ASU 2016-02 .

9 unchanged sentences

The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 24, 2021.

At October 24, 2020, we owned preferred shares and warrants to purchase common shares of two privately held companies, both of which are variable interest entities.

At January 23, 2021, we owned preferred shares and warrants to purchase common shares of two privately held companies, both of which are variable interest entities.

We have not consolidated their results in our financial statements because we do not have the power to direct those activities that most significantly impact their economic performance and, therefore, are not the primary beneficiary.

As part of our continued response to the impact of COVID-19, on June 4, 2020, we announced our business realignment plan, which included the reduction of the Company's global workforce by approximately 10 % across our manufacturing, retail and corporate locations, including the closure of our Newton, Mississippi upholstery manufacturing facility.

In the first six months of fiscal 2021, we incurred expenses of $ 3.9 million associated with our business realignment plan, primarily due to severance costs and an impairment of the carrying value of the Newton manufacturing facility.

In the first six months of fiscal 2021, as consumers continued to allocate more discretionary spending to home furnishings, the demand for our products has outpaced our production capacity.

In response, we have added manufacturing cells at our Mexico Cut-and-Sew Center, temporarily re-activated a portion of our Newton, Mississippi upholstery manufacturing facility, and will open a leased upholstery plant, in San Luis Rio Colorado, Mexico early in the third quarter of fiscal 2021.

In the first nine months of fiscal 2021, we incurred expenses of $ 3.9 million associated with our business realignment plan, primarily due to severance costs and an impairment of the carrying value of the Newton manufacturing facility.

Subsequent to the announcement of our business realignment plan in the first quarter of fiscal 2021, consumers have continued to allocate more discretionary spending to home furnishings and as a result, the demand for our products has outpaced our production capacity.

In response, we have added manufacturing cells at our Mexico Cut-and-Sew Center, added weekend production shifts to our U.S plants, temporarily re-activated a portion of our Newton, Mississippi upholstery manufacturing facility, and have opened a leased upholstery plant, in San Luis Rio Colorado, Mexico.

During the fourth quarter of fiscal 2020, in response to economic conditions resulting from COVID-19, to strengthen our financial position and maintain liquidity, we proactively borrowed $ 75.0 million from our revolving credit facility.

Given the positive trends in cash flows during the first six months of fiscal 2021, we repaid all of the $ 75.0 million borrowed under our line of credit in the first and second quarters of fiscal 2021.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law.

The CARES Act, among other things, includes provisions providing for refundable payroll tax credits, deferment of employer social security payments, lengthening net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.

In the third quarter of fiscal 2021, the Company determined amounts that it is eligible to claim for employee retention payroll tax credits and recognized $ 5.2 million in non-operating income for wages and healthcare costs paid to employees during suspension of operations due to government orders which qualify under the provisions of the CARES Act.

The Company continues to evaluate the impact that the CARES Act may have on its results of operations, financial condition and/or financial statement disclosures.

We continue to actively manage the impact of the COVID-19 crisis and there is uncertainty regarding the impact COVID-19 will have on our financial operations in the near and long term.

16 unchanged sentences

On September 14, 2020, we completed our asset acquisition of the Seattle, Washington business that operated six independently owned La-Z-Boy Furniture Galleries ® stores and one warehouse for $ 13.5 million, subject to customary adjustments.

In the second quarter of fiscal 2021, a $ 2.0 million cash payment was made for the purchase with future guaranteed payments of $ 9.4 million to be paid over the next 36 months.

In the second quarter of fiscal 2021, a $ 2.0 million cash payment was made for the purchase with future guaranteed payments of $ 9.4 million to be paid over 36 months or less, with timing of payments dependent upon the achievement of sales thresholds defined in the purchase agreement.

This acquisition is a core part of our strategy to grow our company-owned retail business and leverage our integrated retail model where we earn a combined profit on both the wholesale and retail sales.

7 unchanged sentences

All of our provisional purchase accounting estimates for this acquisition are based on the information and data available to us as of the time of the issuance of these financial statements, and in accordance with Accounting Standard Codification Topic 805-10-25-15, are subject to change within the first 12 months of acquisition as we have access to additional data.

Restricted Cash

Cash and Restricted Cash

We have restricted cash on deposit with a bank as collateral for certain letters of credit.

18 unchanged sentences

Corporate & Other Joybird Joybird

The following is a roll-forward of goodwill for the six months ended October 24, 2020:

The following is a roll-forward of goodwill for the nine months ended January 23, 2021:

(Unaudited, amounts in thousands) Wholesale

5 unchanged sentences

Translation adjustment 1,245 362 — 1,607

Balance at October 24, 2020 $ 12,266 $ 107,122 $ 55,446 $ 174,834

Balance at January 23, 2021 $ 12,875 $ 107,239 $ 55,446 $ 175,560

We have intangible assets on our consolidated balance sheet as follows:

7 unchanged sentences

Amortizable over eight -year useful life

The following is a roll-forward of our other intangible assets for the six months ended October 24, 2020:

The following is a roll-forward of our other intangible assets for the nine months ended January 23, 2021:

(Unaudited, amounts in thousands) Indefinite-

5 unchanged sentences

Translation adjustment — — 271 258 529

Balance at October 24, 2020 $ 1,155 $ 4,604 $ 22,365 $ 2,523 $ 30,647

Balance at January 23, 2021 $ 1,155 $ 4,404 $ 22,449 $ 2,589 $ 30,597

We test indefinite-lived intangibles and goodwill for impairment on an annual basis in the fourth quarter of each fiscal year, and more frequently if events or changes in circumstances indicate that an asset might be impaired.

28 unchanged sentences

The following table summarizes sales of marketable securities:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20 1/23/21 1/25/20

17 unchanged sentences

Accrued expenses and other current liabilities $ 388,043 $ 155,282

The increase in customer deposits and deferred revenue was primarily driven by higher Retail segment and Joybird written sales in the first six months of fiscal 2021.

The increase in customer deposits and deferred revenue was primarily driven by higher Retail segment and Joybird written sales in the first nine months of fiscal 2021.

Higher written sales also led to an increase in contract assets, which are included in other current assets on the consolidated balance sheet, consistent with the increase in deferred revenue.

7 unchanged sentences

We provide a limited lifetime warranty against defects on a majority of Joybird products, which are a part of our Corporate and Other results.

For all our manufacturer warranties, the warranty period begins when the consumer receives our product.

For all of our manufacturer warranties, the warranty period begins when the consumer receives our product.

We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known.

A reconciliation of the changes in our product warranty liability is as follows:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20 01/23/21 01/25/20

4 unchanged sentences

$ 22,995 $ 23,345 $ 22,995 $ 23,345

(1) $ 14.2 million and $ 14.3 million recorded in accrued expenses and other current liabilities as of October 24, 2020 and April 25, 2020, respectively, while the remainder is in included in other long-term liabilities.

(1) $ 14.3 million recorded in accrued expenses and other current liabilities at both January 23, 2021 and April 25, 2020, while the remainder is in included in other long-term liabilities.

We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods.

1 unchanged sentence

The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20 01/23/21 01/25/20

20 unchanged sentences

Restricted Stock .

We granted 120,385 shares of restricted stock to employees during the first six months of fiscal 2021.

We granted 121,385 shares of restricted stock to employees during the first nine months of fiscal 2021.

We also have shares of restricted stock outstanding from previous grants.

2 unchanged sentences

We account for restricted stock awards as equity-based awards because when they vest, they will be settled in common shares.

The weighted-average fair value of the restricted stock awarded in the first six months of fiscal 2021 was $ 27.55 per share, the market value of our common shares on the date of grant.

The weighted-average fair value of the restricted stock awarded in the first nine months of fiscal 2021 was $ 27.63 per share, the market value of our common shares on the date of grant.

We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur.

10 unchanged sentences

Payout of the fiscal 2021 grant depends on our financial performance ( 50 %) and a market-based condition based on the total return our shareholders receive on their investment in our stock relative to returns earned through investments in other public companies ( 50 %).

The performance share opportunity ranges from 50 % of the employee’s target award if minimum performance requirements are met to a maximum of 200 % of the target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which

is generally three fiscal years.

Grants of performance-based shares during fiscal 2019 and fiscal 2020 were weighted ( 80 %) on financial performance and ( 20 %) on market-based conditions consistent with those in the fiscal 2021 grant.

8 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

The activity in accumulated other comprehensive income (loss) for the quarters ended October 24, 2020, and October 26, 2019, is as follows:

The activity in accumulated other comprehensive income (loss) for the quarters ended January 23, 2021, and January 25, 2020, is as follows:

(Unaudited, amounts in thousands) Translation adjustment Change in fair value of cash flow hedge Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive income (loss)

Balance at July 25, 2020 $ ( 278 ) $ — $ 491 $ ( 5,445 ) $ ( 5,232 )

Balance at October 24, 2020 $ 997 $ — $ 426 $ ( 5,380 ) $ ( 3,957 )

Changes before reclassifications 1,924 — ( 27 ) — 1,897

1 unchanged sentence

Tax effect — — 4 ( 21 ) ( 17 )

Other comprehensive income attributable to La-Z-Boy Incorporated 1,275 — ( 65 ) 65 1,275

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 1,924 — ( 14 ) 65 1,975

Balance at January 23, 2021 $ 2,921 $ — $ 412 $ ( 5,315 ) $ ( 1,982 )

Balance at October 26, 2019 $ 1,345 $ — $ 418 $ ( 4,231 ) $ ( 2,468 )

Balance at July 27, 2019 $ 178 $ ( 6 ) $ 372 $ ( 4,272 ) $ ( 3,728 )

Changes before reclassifications 50 — 41 — 91

2 unchanged sentences

Other comprehensive income attributable to La-Z-Boy Incorporated 50 — 16 41 107

Balance at October 26, 2019 $ 1,345 $ — $ 418 $ ( 4,231 ) $ ( 2,468 )

The activity in accumulated other comprehensive income (loss) for the six months ended October 24, 2020, and October 26, 2019, is as follows:

Balance at January 25, 2020 $ 1,395 $ — $ 434 $ ( 4,190 ) $ ( 2,361 )

The activity in accumulated other comprehensive income (loss) for the nine months ended January 23, 2021, and January 25, 2020, is as follows:

3 unchanged sentences

Tax effect — — 12 ( 64 ) ( 52 )

Other comprehensive income attributable to La-Z-Boy Incorporated 2,888 — ( 23 ) 130 2,995

Balance at October 24, 2020 $ 997 $ — $ 426 $ ( 5,380 ) $ ( 3,957 )

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 4,812 — ( 37 ) 195 4,970

Balance at January 23, 2021 $ 2,921 $ — $ 412 $ ( 5,315 ) $ ( 1,982 )

Balance at April 27, 2019 $ 50 $ 87 $ 6 $ ( 3,605 ) $ ( 3,462 )

4 unchanged sentences

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated 1,345 ( 87 ) 428 ( 585 ) 1,101

Balance at October 26, 2019 $ 1,345 $ — $ 418 $ ( 4,231 ) $ ( 2,468 )

Balance at January 25, 2020 $ 1,395 $ — $ 434 $ ( 4,190 ) $ ( 2,361 )

(1) Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to adoption of ASU 2018-02.

1 unchanged sentence

The components of non-controlling interest were as follows:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20 1/23/21 1/25/20

1 unchanged sentence

Net income 357 204 607 434

Other comprehensive income 79 359 577 845

Other comprehensive income (loss) 362 ( 162 ) 939 683

Dividends distributed to joint venture minority partners — — ( 8,507 ) —

12 unchanged sentences

The following table presents our revenue disaggregated by product category and by segment or unit:

Quarter Ended October 24, 2020 Quarter Ended October 26, 2019

Quarter Ended January 23, 2021 Quarter Ended January 25, 2020

(Unaudited, amounts in thousands) Wholesale Retail Corporate

10 unchanged sentences

Consolidated Net Sales $ 470,196 $ 475,856

Six Months Ended October 24, 2020 Six Months Ended October 26, 2019

Nine Months Ended January 23, 2021 Nine Months Ended January 25, 2020

(Unaudited, amounts in thousands) Wholesale Retail Corporate

21 unchanged sentences

This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer.

At October 24, 2020 and at April 25, 2020, our consolidated balance sheet included $ 67.9 million and $ 17.1 million, respectively, of contract assets that represent the remaining consideration to which we are entitled prior to fulfilling our performance obligation.

At January 23, 2021 and at April 25, 2020, our consolidated balance sheet included $ 93.9 million and $ 17.1 million, respectively, of contract assets that represent the remaining consideration to which we are entitled prior to fulfilling our performance obligation.

These assets are reported as other current assets in our consolidated balance sheet.

We receive customer deposits from end consumers before we recognize revenue and in some cases we have the unconditional right to collect the remaining portion of the order price before we fulfill our performance obligation, resulting in deferred revenue (collectively, the “contract liabilities”).

At October 24, 2020, we included $ 140.7 million of customer deposits and $ 67.9 million of deferred revenues in accrued expenses and other current liabilities on our consolidated balance sheet.

At January 23, 2021, we included $ 162.6 million of customer deposits and $ 93.9 million of deferred revenues in accrued expenses and other current liabilities on our consolidated balance sheet.

At the beginning of fiscal 2021, we had $ 40.7 million of customer deposits and $ 17.1 million of deferred revenues.

During the quarter and six months ended October 24, 2020, we recognized revenue of $ 1.8 million and $ 51.5 million, respectively, related to our contract liability balance at April 25, 2020.

The increase in our contract assets and contract liabilities at October 24, 2020 was primarily the result of increased written sales during the first six months of fiscal 2021 compared with those in the fourth quarter of fiscal 2020.

During the quarter and nine months ended January 23, 2021, we recognized revenue of $ 3.4 million and $ 54.9 million, respectively, related to our contract liability balance at April 25, 2020.

The increase in our contract assets and contract liabilities at January 23, 2021 was primarily the result of increased written sales during the first nine months of fiscal 2021 compared with those in the fourth quarter of fiscal 2020.

Segment Information

21 unchanged sentences

The following table presents sales and operating income (loss) by segment:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/23/21 1/25/20 1/23/21 1/25/20

19 unchanged sentences

Income before income taxes $ 40,933 $ 46,894 $ 94,472 $ 101,148

Our effective tax rate was 26.0 % and 25.3 % for the second quarter and six months ended October 24, 2020, respectively, compared with 26.6 % and 24.6 % for the second quarter and six months ended October 26, 2019, respectively.

Our effective tax rate was 27.7 % and 26.4 % for the third quarter and nine months ended January 23, 2021, respectively, compared with 26.0 % and 25.3 % for the third quarter and nine months ended January 25, 2020, respectively.

Our effective tax rate varies from the 21 % federal statutory rate primarily due to state taxes.

3 unchanged sentences

The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands, except per share data) 1/23/21 1/25/20 1/23/21 1/25/20

11 unchanged sentences

The values for contingent common shares set forth above reflect the dilutive effect of common shares that we would have issued to employees under the terms of performance-based share awards if the relevant performance period for the award had been the reporting period.

We had outstanding options to purchase 0.6 million shares for the six months ended October 24, 2020, with a weighted average exercise price of $ 31.94 .

We had outstanding options to purchase 0.3 million shares for the nine months ended January 23, 2021, with a weighted average exercise price of $ 33.15 .

We excluded the effect of these options from our diluted share calculation since the weighted average exercise price of the options was higher than the average market price and including the options’ effect would have been anti-dilutive.

Similarly, we excluded options to purchase 0.3 million shares from the diluted share calculation for the six months ended October 26, 2019.

Similarly, we excluded options to purchase 0.3 million shares from the diluted share calculation for the nine months ended January 25, 2020.

Fair Value Measurements

8 unchanged sentences

We measure non-financial assets such as other intangible assets, goodwill, and other long-lived assets at fair value when there is an indicator of impairment, and we record them at fair value only when we recognize an impairment loss.

The following table presents the fair value hierarchy for those assets we measured at fair value on a recurring basis at October 24, 2020 and April 25, 2020.

The following table presents the fair value hierarchy for those assets we measured at fair value on a recurring basis at January 23, 2021 and April 25, 2020.

There were no transfers into or out of Level 1, Level 2, or Level 3 for any of the periods presented.

At October 24, 2020

At January 23, 2021

Fair Value Measurements

12 unchanged sentences

Total assets $ 3,337 $ 31,691 $ 6,479 $ 6,515 $ 48,022

Contingent consideration liability $ — $ — $ — $ — $ —

(1) Certain marketable securities investments are measured at fair value using net asset value per share under the practical expedient methodology.

At October 24, 2020 and April 25, 2020, we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, as well as marketable securities to fund future obligations of our executive deferred compensation plan and our performance compensation retirement plan.

At January 23, 2021 and April 25, 2020, we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, as well as marketable securities to fund future obligations of our executive deferred compensation plan and our performance compensation retirement plan.

We also held other fixed income and cost basis investments.

The fair value measurements for our Level 1 and Level 2 securities are based on quoted prices in active markets, as well as through broker quotes and independent valuation providers, multiplied by the number of shares owned exclusive of any transaction costs.

At October 24, 2020, our Level 3 assets included non-marketable preferred shares and warrants to purchase common shares of two privately held start-up companies.

At January 23, 2021, our Level 3 assets included non-marketable preferred shares and warrants to purchase common shares of two privately held start-up companies.

The fair value for our Level 3 investments is not readily determinable so we estimate the fair value as costs minus impairment, if any, plus or minus adjustments resulting from observable price changes in orderly transactions for identical or similar investments with the same issuer.

During the six months ended October 24, 2020, we invested an additional $ 1.1 million in one of these privately held start-up companies.

There were no other changes to the fair value of our Level 3 assets during the six months ended October 24, 2020.

Our Level 3 liability includes our contingent consideration liability resulting from the Joybird acquisition as we expect consideration will be owed under the terms of the earnout agreement in connection with the acquisition based on our most recent financial projections.

During the nine months ended January 23, 2021, we invested an additional $ 1.1 million in one of these privately held start-up companies.

There were no other changes to the fair value of our Level 3 assets during the nine months ended January 23, 2021.

Our Level 3 liability includes our contingent consideration liability resulting from the Joybird acquisition.

During the nine months ended January 23, 2021 we recognized an increase in the fair value of our liability of $ 12.5 million, with a $ 10.0 million increase during the third quarter and a $ 2.5 million increase during the second quarter, as we expect consideration will be owed under the terms of the earnout agreement based on significant improvements to our most recent financial projections.

The fair value of contingent consideration is based on future revenues and earnings of the Joybird business in fiscal 2021 and fiscal 2023 and is determined using a variation of the income approach, known as the real options method, whereby revenue and earnings were simulated over the earnout periods in a risk-neutral framework using Geometric Brownian Motion.

For each simulation path, the potential earnout payments were calculated based on management’s probability estimates for achievement of the revenue and earnings milestones and then were discounted to the valuation date using a discount rate of 1.3 % for the fiscal 2021 milestone and 1.9 % for the fiscal 2023 milestone.

There were no other changes to the fair value of our Level 3 liabilities during the six months ended October 24, 2020.

There were no other changes to the fair value of our Level 3 liabilities during the nine months ended January 23, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements