What changed in this filing

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Item 1. Financial Statements

2024-02-20 compared with 2023-11-29 · 79 added, 50 removed, 530 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) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

10 unchanged sentences

Net income 28,684 31,577 84,304 117,296

Net income attributable to noncontrolling interests ( 495 ) ( 702 ) ( 942 ) ( 1,154 )

Net (income) loss attributable to noncontrolling interests ( 44 ) 149 ( 986 ) ( 1,005 )

Net income attributable to La-Z-Boy Incorporated $ 28,640 $ 31,726 $ 83,318 $ 116,291

6 unchanged sentences

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

2 unchanged sentences

Currency translation adjustment 2,262 5,441 ( 306 ) ( 72 )

Net unrealized gain (loss) on marketable securities, net of tax ( 87 ) ( 289 ) 133 ( 203 )

Net unrealized gain on marketable securities, net of tax 342 287 475 84

Net pension amortization, net of tax 23 36 70 109

Total other comprehensive income (loss) ( 3,678 ) ( 3,605 ) ( 2,388 ) ( 5,643 )

Total other comprehensive income 2,627 5,764 239 121

Total comprehensive income before noncontrolling interests 31,311 37,341 84,543 117,417

Comprehensive (income) loss attributable to noncontrolling interests ( 11 ) ( 298 ) ( 418 ) ( 231 )

Comprehensive (income) attributable to noncontrolling interests ( 159 ) ( 1,278 ) ( 577 ) ( 1,509 )

Comprehensive income attributable to La-Z-Boy Incorporated $ 31,152 $ 36,063 $ 83,966 $ 115,908

40 unchanged sentences

CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended

Nine Months Ended

(Unaudited, amounts in thousands) 1/27/2024 1/28/2023

42 unchanged sentences

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited, amounts in thousands) Common

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

Shares Capital in Excess of

27 unchanged sentences

At October 28, 2023 $ 42,875 $ 361,409 $ 567,391 $ ( 7,392 ) $ 9,507 $ 973,790

Net income — — 28,640 — 44 28,684

Other comprehensive income — — — 2,512 115 2,627

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 305 7,894 ( 99 ) — — 8,100

Repurchases of 567 shares of common stock

( 567 ) ( 7,903 ) ( 11,871 ) — — ( 20,341 )

Stock option and restricted stock expense — 3,711 — — — 3,711

Dividends declared and paid ($ 0.20 /share)

— — ( 8,545 ) — — ( 8,545 )

Dividends declared not paid ($ 0.20 /share)

— — ( 140 ) — — ( 140 )

At January 27, 2024 $ 42,613 $ 365,111 $ 575,376 $ ( 4,880 ) $ 9,666 $ 987,886

(1) Non-controlling interests include dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.

(Unaudited, amounts in thousands) Common

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

Shares Capital in Excess of

25 unchanged sentences

At October 29, 2022 $ 43,136 $ 347,036 $ 495,003 $ ( 10,517 ) $ 9,128 $ 883,786

Net income — — 31,726 — ( 149 ) 31,577

Other comprehensive income — — — 4,337 1,427 5,764

Stock issued for stock and employee benefit plans, net of cancellations and withholding tax 4 ( 7 ) ( 57 ) — — ( 60 )

Stock option and restricted stock expense — 3,377 — — — 3,377

Dividends declared and paid ($ 0.1815 /share)

— — ( 7,866 ) — — ( 7,866 )

Dividends declared not paid ($ 0.1815 /share)

— — ( 74 ) — — ( 74 )

At January 28, 2023 $ 43,140 $ 350,406 $ 518,732 $ ( 6,180 ) $ 10,406 $ 916,504

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

7 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 27, 2024.

At October 28, 2023, we owned investments in two privately-held companies consisting of non-marketable preferred shares, warrants to purchase common shares, and convertible notes.

At January 27, 2024, we owned investments in two privately-held companies consisting of non-marketable preferred shares, warrants to purchase common shares, and convertible notes.

Each of these companies is a variable interest entity and 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.

7 unchanged sentences

ASU Description Adoption Date

ASU 2023-09 Income Taxes - Improvements to Income Tax Disclosures Fiscal 2026

ASU 2023-07 Segment Reporting - Improvements to Reportable Segment Disclosures Fiscal 2025

ASU 2023-05 Business Combinations - Joint Venture Formations (Subtopic 805-60):

8 unchanged sentences

This change had no impact to sales, income from operations, net income, earnings per share, retained earnings or other components of equity or net assets.

(Unaudited, amounts in thousands) For the Quarter Ended October 29, 2022 For the Six Months Ended October 29, 2022

(Unaudited, amounts in thousands) For the Quarter Ended January 28, 2023 For the Nine Months Ended January 28, 2023

Previously Reported Effect of Change As Adjusted Previously Reported Effect of Change As Adjusted

9 unchanged sentences

For federal income tax purposes, we amortize and deduct these indefinite-lived intangible assets and goodwill, if any, over 15 years.

Illinois and Indiana Acquisition

On December 11, 2023, we completed our acquisition of the Illinois and Indiana businesses that operate six independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 18.4 million, inclusive of and subject to further customary adjustments.

The acquisition also included the purchase of buildings and land for five of the stores.

We paid total cash of $ 18.1 million during the third quarter of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 4.2 million related to the reacquired rights described above.

Lafayette, Louisiana Acquisition

On October 23, 2023, we completed our acquisition of the Lafayette, Louisiana business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 2.8 million, inclusive of and subject to further customary adjustments.

We paid total cash of $ 1.8 million during the second quarter of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

We paid total cash of $ 2.6 million during the second and third quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 0.7 million related to the reacquired rights described above.

6 unchanged sentences

Prior Year Acquisitions

Barboursville, West Virginia acquisition

On December 12, 2022, we completed our acquisition of the Barboursville, West Virginia business that operates one independently owned La-Z-Boy Furniture Galleries ® store.

This acquisition did not have a meaningful impact on our consolidated financial statements.

Spokane, Washington Acquisition

2 unchanged sentences

As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 1.2 million related to the reacquired rights described above.

We also recognized

$ 3.0 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired store and future benefits of these synergies.

We also recognized $ 3.0 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired store and future benefits of these synergies.

Denver, Colorado Acquisition

34 unchanged sentences

Translation adjustment 217 26 — 243

Balance at October 28, 2023 (1)

Balance at January 27, 2024 (1)

$ 20,419 $ 133,661 $ 55,446 $ 209,526

17 unchanged sentences

Translation adjustment — — 19 18 37

Balance at October 28, 2023 $ 1,155 $ 2,195 $ 36,451 $ 1,714 $ 41,515

Balance at January 27, 2024 $ 1,155 $ 1,995 $ 40,741 $ 1,742 $ 45,633

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.

24 unchanged sentences

The following table summarizes sales of marketable securities:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

5 unchanged sentences

Within one year $ 6,445

Within two to five years 961

Securities not due at a single maturity date 6,600

11 unchanged sentences

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) 1/27/2024

4 unchanged sentences

Balance as of the end of the period $ 31,306 $ 29,298 $ 31,306 $ 29,298

(1) $ 20.1 million and $ 19.9 million is recorded in accrued expenses and other current liabilities as of October 28, 2023, and April 29, 2023, respectively, while the remainder is included in other long-term liabilities.

(1) $ 19.8 million and $ 19.9 million is recorded in accrued expenses and other current liabilities as of January 27, 2024, and April 29, 2023, respectively, while the remainder is 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) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

12 unchanged sentences

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

The weighted-average fair value of the restricted stock that was awarded in the first six months of fiscal 2024 was $ 27.66 per share, the market value of our common shares on the date of grant.

The weighted-average fair value of the restricted stock that was awarded in the first quarter of fiscal 2024 was $ 27.66 per share, the market value of our common shares on the date of grant.

Restricted Stock Units Issued to Directors.

During the first six months of fiscal 2024, we granted 35,736 restricted stock units to our non-employee directors.

During the first nine months of fiscal 2024, we granted 35,736 restricted stock units to our non-employee directors.

Restricted stock units granted to our non-employee directors are offered at no cost to the directors and restricted stock units granted following August 2022 vest on the earlier of the date a director ceases to be a member of the board (for any reason other than the termination of service for cause) or the- one year anniversary of the grant date.

1 unchanged sentence

We measure and recognize compensation expense for these awards based on the market price of our common shares on the date of grant.

The weighted-average fair value of the restricted stock units granted to our non-employee directors in the first six months of fiscal 2024 was $ 30.80 per share.

The weighted-average fair value of the restricted stock units granted to our non-employee directors in the first nine months of fiscal 2024 was $ 30.80 per share.

Performance Shares.

22 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Activity in accumulated other comprehensive income (loss) for the quarters ended October 28, 2023, and October 29, 2022, is as follows:

Activity in accumulated other comprehensive income (loss) for the quarters ended January 27, 2024, and January 28, 2023, is as follows:

(Unaudited, amounts in thousands) Translation adjustment Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive income (loss)

Balance at July 29, 2023 $ ( 1,565 ) $ 75 $ ( 2,708 ) $ ( 4,198 )

Balance at October 28, 2023 $ ( 4,696 ) $ ( 12 ) $ ( 2,684 ) $ ( 7,392 )

Changes before reclassifications 2,147 454 — 2,601

1 unchanged sentence

Tax effect — ( 112 ) ( 8 ) ( 120 )

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ( 3,131 ) ( 87 ) 24 ( 3,194 )

Other comprehensive income attributable to La-Z-Boy Incorporated 2,147 342 23 2,512

Balance at January 27, 2024 $ ( 2,549 ) $ 330 $ ( 2,661 ) $ ( 4,880 )

Balance at October 29, 2022 $ ( 6,551 ) $ ( 501 ) $ ( 3,465 ) $ ( 10,517 )

Balance at July 30, 2022 $ ( 3,602 ) $ ( 212 ) $ ( 3,502 ) $ ( 7,316 )

Changes before reclassifications 4,014 303 — 4,317

1 unchanged sentence

Tax effect — ( 94 ) ( 13 ) ( 107 )

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ( 2,949 ) ( 289 ) 37 ( 3,201 )

Balance at October 29, 2022 $ ( 6,551 ) $ ( 501 ) $ ( 3,465 ) $ ( 10,517 )

Activity in accumulated other comprehensive income (loss) for the six months ended October 28, 2023 and October 29, 2022, is as follows:

Other comprehensive income attributable to La-Z-Boy Incorporated 4,014 287 36 4,337

Balance at January 28, 2023 $ ( 2,537 ) $ ( 214 ) $ ( 3,429 ) $ ( 6,180 )

Activity in accumulated other comprehensive income (loss) for the nine months ended January 27, 2024 and January 28, 2023, is as follows:

(Unaudited, amounts in thousands) Translation adjustment Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive income (loss)

3 unchanged sentences

Tax effect — ( 156 ) ( 23 ) ( 179 )

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ( 2,044 ) 133 47 ( 1,864 )

Balance at October 28, 2023 $ ( 4,696 ) $ ( 12 ) $ ( 2,684 ) $ ( 7,392 )

Other comprehensive income attributable to La-Z-Boy Incorporated 103 475 70 648

Balance at January 27, 2024 $ ( 2,549 ) $ 330 $ ( 2,661 ) $ ( 4,880 )

Balance at April 30, 2022 $ ( 1,961 ) $ ( 298 ) $ ( 3,538 ) $ ( 5,797 )

3 unchanged sentences

Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ( 576 ) 84 109 ( 383 )

Balance at October 29, 2022 $ ( 6,551 ) $ ( 501 ) $ ( 3,465 ) $ ( 10,517 )

Balance at January 28, 2023 $ ( 2,537 ) $ ( 214 ) $ ( 3,429 ) $ ( 6,180 )

We reclassified both the unrealized gain (loss) on marketable securities and the net pension amortization from accumulated other comprehensive loss to net income through other income (expense), net.

The components of noncontrolling interest were as follows:

Quarter Ended Six Months Ended

Quarter Ended Nine Months Ended

(Unaudited, amounts in thousands) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

Balance as of the beginning of the period $ 9,507 $ 9,128 $ 10,261 $ 8,897

Net income 495 702 942 1,154

Other comprehensive loss ( 484 ) ( 404 ) ( 524 ) ( 923 )

Net income (loss) 44 ( 149 ) 986 1,005

Other comprehensive income (loss) 115 1,427 ( 409 ) 504

Dividends distributed to joint venture minority partners — — ( 1,172 ) —

12 unchanged sentences

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

Quarter Ended October 28, 2023 Quarter Ended October 29, 2022

Quarter Ended January 27, 2024 Quarter Ended January 28, 2023

(Unaudited, amounts in thousands) Wholesale Retail Corporate

8 unchanged sentences

Consolidated Net Sales $ 500,406 $ 572,723

Six Months Ended October 28, 2023 Six Months Ended October 29, 2022

Nine Months Ended January 27, 2024 Nine Months Ended January 28, 2023

(Unaudited, amounts in thousands) Wholesale Retail Corporate

26 unchanged sentences

$ 145,697 $ 150,705

(1) During the six months ended October 28, 2023, we recognized revenue of $ 137.4 million related to our contract liability balance at April 29, 2023.

(1) During the nine months ended January 27, 2024, we recognized revenue of $ 138.8 million related to our contract liability balance at April 29, 2023.

Segment Information

17 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) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

19 unchanged sentences

Income before income taxes $ 35,940 $ 43,654 $ 111,613 $ 159,742

Our effective tax rate was 26.5 % for both the second quarter and first six months ended October 28, 2023 compared with 25.8 % and 26.2 % for the second quarter and first six months ended October 29, 2022, respectively.

Our effective tax rate was 20.2 % and 24.5 % for the third quarter and first nine months ended January 27, 2024, respectively, compared with 27.7 % and 26.6 % for the third quarter and first nine months ended January 28, 2023, respectively.

The reduced effective tax rate in the third quarter of fiscal 2024 was primarily the result of favorable return to provision adjustments from the prior year.

Absent these discrete items, the effective tax rate would have been 25.6 % for the third quarter of fiscal 2024.

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

1 unchanged sentence

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) 1/27/2024 1/28/2023 1/27/2024 1/28/2023

5 unchanged sentences

Diluted weighted average common shares outstanding 43,195 43,137 43,344 43,111

43,401 43,182 43,479 43,174

Earnings per Share:

Basic $ 0.67 $ 0.74 $ 1.94 $ 2.70

Diluted $ 0.63 $ 1.07 $ 1.26 $ 1.96

$ 0.66 $ 0.74 $ 1.92 $ 2.70

(1) Diluted earnings per share was computed using the treasury stock method.

1 unchanged sentence

We exclude the effect of options from our diluted share calculation when the weighted average exercise price of the options is higher than the average market price, since including the options' effect would be anti-dilutive.

For the second quarter and six months ended October 28, 2023, we excluded options to purchase 0.5 million shares and 0.7 million shares, respectively, from the diluted share calculation.

For the second quarter and six months ended October 29, 2022, we excluded options to purchase 1.5 million shares from the diluted share calculation.

For the third quarter and nine months ended January 27, 2024, we excluded options to purchase 0.2 million shares and 0.5 million shares, respectively, from the diluted share calculation.

For the third quarter and nine months ended January 28, 2023, we excluded options to purchase 1.5 million shares from the diluted share calculation.

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 and liabilities we measured at fair value on a recurring basis at October 28, 2023 and April 29, 2023.

The following table presents the fair value hierarchy for those assets and liabilities we measured at fair value on a recurring basis at January 27, 2024 and April 29, 2023.

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

At October 28, 2023

At January 27, 2024

Fair Value Measurements

10 unchanged sentences

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

At October 28, 2023 and April 29, 2023, we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan and our performance compensation retirement plan.

At January 27, 2024 and April 29, 2023, we held marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan and our performance compensation retirement plan.

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.

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