22 unchanged sentences
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 27, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
+Added: Change in Accounting Principle
+Added: As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it classifies certain costs associated with its distribution centers.
Basis for Opinions
14 unchanged sentences
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
−Removed: (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
+Added: (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
7 unchanged sentences
Management accrues an estimated liability for product warranties when revenue is recognized on the sale of warrantied products.
−Removed: Management estimates future warranty claims on product sales based on historical claims experience and periodically adjusts the provision to reflect changes in actual experience.
+Added: Management estimates future warranty claims on product sales based on sales volume and historical claims experience and periodically adjusts the provision to reflect changes in actual experience.
The liability estimate incorporates repair costs, including materials, labor and overhead amounts necessary to perform repairs, and any costs associated with delivering the repaired product to customers.
14 unchanged sentences
The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Joybird reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Joybird reporting unit;
−Removed: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to sales and operating income projections used in the discounted cash flow model;
+Added: (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to sales and operating income projections and the discount rate used in the discounted cash flow model, and the market multiples based on revenue for comparable public companies used in the market approach;
and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Joybird reporting unit, which included controls over significant assumptions related to the sales and operating income projections.
+Added: These procedures included testing the effectiveness of controls relating to
+Added: management’s goodwill impairment assessment, including controls over the valuation of the Joybird reporting unit, which included controls over significant assumptions related to the sales and operating income projections, the discount rate and the market multiples based on revenue for comparable public companies.
These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Joybird reporting unit;
−Removed: (ii) evaluating the appropriateness of the discounted cash flow model;
−Removed: (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model;
−Removed: and (iv) evaluating the reasonableness of the significant assumptions used by management related to the sales and operating income projections used in the discounted cash flow model.
+Added: (ii) evaluating the appropriateness of the discounted cash flow model and market approach used by management;
+Added: (iii) testing the completeness and accuracy of underlying data used in the discounted cash flow model and market approach;
+Added: and (iv) evaluating the reasonableness of the significant assumptions used by management related to the sales and operating income projections and the discount rate used in the discounted cash flow model, and the market multiples based on revenue for comparable public companies used in the market approach.
Evaluating management’s assumptions related to the sales and operating income projections involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the Joybird reporting unit;
−Removed: consistency with external market and industry data;
+Added: (ii) the consistency with external market and industry data;
and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the Company’s discounted cash flow model.
+Added: Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow model and market approach and (ii) the reasonableness of the discount rate assumption used in the discounted cash flow model and market multiples based on revenue for comparable public companies assumption used in the market approach.
/s/ PricewaterhouseCoopers LLP
91 unchanged sentences
Amortization of right-of-use lease assets 76,133 76,511 72,942
−Removed: Lease impairment 1,347 — —
+Added: Lease impairment/(settlement) ( 1,175 ) 1,347 —
Equity-based compensation expense 14,426 12,458 11,858
92 unchanged sentences
Actual results could differ from those estimates.
+Added: Change in Accounting Policy - Distribution Center Costs
+Added: In the first quarter of fiscal 2024, we made a voluntary change to the presentation of costs directly attributable to our distribution activities conducted through our distribution centers in the United States.
+Added: Our policy has changed from presenting these costs within selling, general and administrative ("SG&A") expense to presenting them as cost of sales.
+Added: We believe this presentation is preferable because it will enhance the comparability of our financial statements with those of our industry peers and align with how we internally manage supply chain costs and margin.
+Added: In accordance with US GAAP, the periods presented below have been retrospectively adjusted to reflect the change to cost of sales and SG&A expense.
+Added: 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.
+Added: (Unaudited, amounts in thousands) For the Year Ended April 29, 2023 For the Year Ended April 30, 2022
+Added: Previously Reported Effect of Change As Adjusted Previously Reported Effect of Change As Adjusted
+Added: Cost of sales $ 1,340,734 $ 43,966 $ 1,384,700 $ 1,440,842 $ 36,175 $ 1,477,017
+Added: Gross profit 1,008,699 ( 43,966 ) 964,733 915,969 ( 36,175 ) 879,794
+Added: Selling, general and administrative expense 797,260 ( 43,966 ) 753,294 709,213 ( 36,175 ) 673,038
Cash and Equivalents
1 unchanged sentence
Restricted Cash
−Removed: We have cash on deposit with a bank as collateral for certain letters of credit.
+Added: At April 29, 2023, we had restricted cash on deposit with a bank as collateral for certain letters of credit that matured within 12 months.
+Added: During fiscal 2024, we renewed these letters of credit and as of April 27, 2024, we are no longer required to hold restricted cash as collateral.
+Added: All of our letters of credit have maturity dates within the next 12 months, and we expect to renew some of these letters of credit when they mature.
Inventories are stated at the lower of cost or market.
13 unchanged sentences
We review the carrying value of our long-lived assets, which includes our right-of-use lease assets, for impairment if events or changes in circumstances indicate that their carrying amounts may not be recoverable.
−Removed: Our assessment of recoverability is based
−Removed: on our best estimates using either quoted market prices or an analysis of the undiscounted projected future cash flows by asset groups in order to determine if there is any indicator of impairment requiring us to further assess the fair value of our long-lived assets.
+Added: Our assessment of recoverability is based on our best estimates using either quoted market prices or an analysis of the undiscounted projected future cash flows by asset groups in order to determine if there is any indicator of impairment requiring us to further assess the fair value of our long-lived assets.
Our asset groups consist of our operating segments in our Wholesale reportable segment, each of our retail stores, our Joybird operating segment, and other corporate assets, which are evaluated at the consolidated level.
2 unchanged sentences
Prior to our retail acquisitions, we licensed the exclusive right to own and operate La-Z-Boy Furniture Galleries ® stores (and to use the associated trademarks and trade name) in those markets to the dealers whose assets we acquired, and we reacquired these rights when we purchased the dealers' other assets.
−Removed: The reacquired right to own and operate La-Z-Boy Furniture Galleries ® stores are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options.
+Added: The reacquired rights to own and operate La-Z-Boy Furniture Galleries ® stores are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options.
A retailer agreement remains in effect as long as the independent retailer is not in default under the terms of the agreement.
1 unchanged sentence
The reporting unit for goodwill arising from retail store acquisitions is our Retail operating segment.
−Removed: We have two geographic regions which are considered components of our Retail operating segment.
−Removed: These two geographic regions are aggregated into one reporting unit for goodwill because they are economically similar, they operate in a consistent manner across the regions, and each store supports and benefits from common research and development projects.
−Removed: Additionally, the goodwill is recoverable from each of the geographic regions working in concert because we can change the composition of the regions to strategically rebalance management and distribution capacity as needed.
−Removed: Goodwill arising from the acquisition of our wholesale business in the United Kingdom and Ireland along with goodwill arising from the acquisition of our manufacturing business in the United Kingdom are combined into the United Kingdom reporting.
+Added: Goodwill arising from the acquisition of our wholesale business in the United Kingdom and Ireland and the acquisition of our manufacturing business in the United Kingdom is combined into the United Kingdom reporting unit.
These two businesses are considered components of the International operating segment and are aggregated into one reporting unit for goodwill because they are economically similar and work in concert as they represent the manufacturing and selling entities within the United Kingdom.
4 unchanged sentences
When we perform the quantitative test for indefinite-lived intangible assets, we establish the fair value of our indefinite-lived trade names and reacquired rights based upon the relief from royalty method.
−Removed: When we perform the quantitative test for goodwill, we establish the fair value for the reporting unit based on the income approach, in which we utilize a discounted cash flow model, the market approach, in which we utilize market multiples of comparable companies, or a combination of both approaches.
+Added: When we perform the quantitative test for goodwill, we establish the fair value for the reporting unit based on the income approach, in which we utilize a discounted cash flow model, the market approach, in which
+Added: we utilize market multiples of comparable companies, or a combination of both approaches.
In situations where the fair value is less than the carrying value, an impairment charge would be recorded for the shortfall.
Amortizable Intangible Assets
−Removed: We have amortizable intangible assets related to the acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland, which primarily include acquired customer relationships.
−Removed: These intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed 15 years.
+Added: We have an amortizable intangible asset for acquired customer relationships related to the acquisition of the La-Z-Boy wholesale business in the United Kingdom and Ireland, which is amortized on a straight-line basis over its estimated useful life of 15 years.
We also have an amortizable intangible asset for the Joybird ® trade name, which is amortized on a straight-line basis over its estimated useful life of eight years .
3 unchanged sentences
Available-for-sale debt securities are recorded at fair value with the net unrealized gains and losses (that are deemed to be temporary) reported as a component of other comprehensive income/(loss).
−Removed: Equity securities are recorded at fair value with
−Removed: unrealized gains and losses recorded in other income (expense), net.
+Added: Equity securities are recorded at fair value with unrealized gains and losses recorded in other income (expense), net.
We also hold investments in two privately-held companies consisting of non-marketable preferred shares, warrants to purchase common shares, and convertible notes.
5 unchanged sentences
The fair value of the investment then becomes the new amortized cost basis of the investment and it is not adjusted for subsequent recoveries in fair value.
−Removed: During fiscal 2023, we recognized a $ 10.3 million impairment charge for one of the investments which was recorded as a component of other income (expense), net in the consolidated statement of income.
−Removed: There were no impairment charges recorded in the fiscal 2022 or fiscal 2021.
+Added: There were no impairment charges recorded in fiscal 2024 or fiscal 2022.
+Added: During fiscal 2023, we recognized a $ 10.3 million impairment charge for one of our investments which was recorded as a component of other income (expense), net in the consolidated statement of income.
Life Insurance
9 unchanged sentences
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services.
−Removed: We generate revenues primarily by manufacturing/importing and delivering upholstery and casegoods (wood) furniture products to independent furniture retailers, independently-owned La-Z-Boy Furniture Galleries ® stores or the end consumer.
+Added: We generate revenues
+Added: primarily by manufacturing/importing and delivering upholstery and casegoods (wood) furniture products to independent furniture retailers, independently-owned La-Z-Boy Furniture Galleries ® stores or the end consumer.
Each unit of furniture is a separate performance obligation, and we satisfy our performance obligation when control of our product is passed to our customer, which is the point in time that our customers are able to direct the use of and obtain substantially all of the remaining economic benefit of the goods or services.
7 unchanged sentences
This takes place when the product is delivered to the end consumer's home.
−Removed: Home delivery is not a promised service to
−Removed: our customer, and is not a separate performance obligation, because home delivery is a fulfillment activity as the costs are incurred as part of transferring our product to the end consumer.
+Added: Home delivery is not a promised service to our customer, and is not a separate performance obligation, because home delivery is a fulfillment activity as the costs are incurred as part of transferring our product to the end consumer.
At the time the customer places an order through our company-owned retail stores or www.la-z-boy.com, we collect a deposit on a portion of the total merchandise price.
20 unchanged sentences
On a quarterly basis, we review all significant accounts as to their past due balances, as well as collectability of the outstanding trade accounts receivable for possible write off.
−Removed: It is our policy to write off the accounts receivable against the allowance account when we deem the receivable to be uncollectible.
+Added: It is our policy to write off the accounts receivable against the allowance account when we deem the receivable to be
+Added: uncollectible.
Additionally, we review orders from dealers that are significantly past due, and we ship product only when our ability to collect payment from our customer for the new order is probable.
2 unchanged sentences
Cost of Sales
−Removed: Our cost of sales consists primarily of the cost to manufacture or purchase our merchandise, inspection costs, internal transfer costs, in-bound freight costs, outbound shipping costs, as well as warehousing costs, occupancy costs, and depreciation expense related to our manufacturing facilities and equipment.
+Added: Our cost of sales consists primarily of the cost to manufacture or purchase our merchandise, inspection costs, internal transfer costs, in-bound freight costs, outbound shipping costs, as well as warehousing costs, occupancy costs, and depreciation expense related to our manufacturing facilities, distribution centers and equipment.
Selling, General and Administrative Expenses
1 unchanged sentence
Selling expenses are primarily composed of commissions, advertising, warranty, bad debt expense, and compensation and benefits of employees performing various sales functions.
−Removed: Additionally, the occupancy costs of our retail facilities and the warehousing costs of our distribution centers are included as a component of SG&A.
+Added: Additionally, the occupancy costs of our retail facilities are included as a component of SG&A.
Other general and administrative expenses included in SG&A are composed primarily of compensation and benefit costs for administrative employees and other administrative costs.
1 unchanged sentence
Other income (expense), net is made up primarily of foreign currency exchange net gain/(loss), gain/(loss) on the sale of investments, and unrealized gain/(loss) on equity securities.
−Removed: Other income (expense), net for fiscal 2023 also includes a $ 10.3 million impairment of our investments in a privately-held start-up company and fiscal 2021 includes the benefit of $ 5.2 million of payroll tax credits resulting from the CARES Act.
+Added: Other income (expense), net for fiscal 2023 also includes a $ 10.3 million impairment of our investments in a privately-held start-up company.
Research and Development Costs
5 unchanged sentences
A portion of our advertising program is a national advertising campaign.
−Removed: This campaign is a shared advertising program with our dealers' La-Z-Boy Furniture Galleries ® stores, which reimburse us for over 20 % of the cost of the program (excluding company-owned stores).
+Added: This campaign is a shared advertising program with our dealers' La-Z-Boy Furniture Galleries ® stores, which reimburse us for approximately 25 % of the cost of the program (excluding company-owned stores).
Because of this shared cost arrangement, the advertising expense is reported as a component of SG&A, while the dealers' reimbursement portion is reported as a component of sales.
13 unchanged sentences
We estimate the fair value of equity-based awards, including option awards and stock-based awards that vest based on market conditions, on the date of grant using option-pricing models.
−Removed: The value of the portion of the equity-based awards that are
−Removed: ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statement of income using a straight-line single-option method.
+Added: The value of the portion of the equity-based awards that are ultimately expected to vest is recognized as expense over the requisite service periods in our consolidated statement of income using a straight-line single-option method.
We measure stock-based compensation cost for liability-based awards based on the fair value of the award on the grant date, and recognize it as expense over the vesting period.
10 unchanged sentences
Liabilities associated with these risks are estimated in part by considering historic claims experience, demographic factors, severity factors and other assumptions.
−Removed: Our workers' compensation reserve is an undiscounted liability.
We have various excess loss coverages for employee-related health care benefits, vehicle liability, product liability, and workers' compensation liabilities.
2 unchanged sentences
Accounting Pronouncement Adopted in Fiscal 2024
−Removed: We did not adopt any Accounting Standards Updates ("ASUs") in fiscal 2023.
+Added: The following table summarizes Accounting Standards Updates ("ASUs") which were adopted in fiscal 2024, but did not have a material impact on our accounting policies or our consolidated financial statements and related disclosures.
+Added: ASU Description Adoption Date
+Added: ASU 2021-08 Business Combinations (Topic 805):
+Added: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Fiscal 2024
Accounting Pronouncements not yet Adopted
1 unchanged sentence
ASU Description Adoption Date
+Added: ASU 2023-09 Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures Fiscal 2026
+Added: ASU 2023-07 Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures Fiscal 2025
+Added: ASU 2023-05 Business Combinations - Joint Venture Formations (Subtopic 805-60):
+Added: Recognition and Initial Measurement Fiscal 2025
ASU 2023-02 Investments - Equity Method and Joint Ventures (Topic 323):
−Removed: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.
−Removed: ASU 2021-08 Business Combinations (Topic 805):
−Removed: Accounting for Contract Assets and Contract Liabilities From Contracts With Customers Fiscal 2024
+Added: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Fiscal 2025
None of the below acquisitions were significant to our consolidated financial statements, and, therefore, pro-forma financial information is not presented.
2 unchanged sentences
Prior to each Retail acquisition completed in fiscal 2024, 2023, and 2022, we licensed to the counterparty the exclusive right to own and the operate La-Z-Boy Furniture Galleries ® stores (and to use the associated trademarks and trade name) in each of their respective markets, and we reacquired these rights when we consummated the transaction.
−Removed: These required rights are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options.
+Added: These reacquired rights are indefinite-lived because our retailer agreements are perpetual agreements that have no specific expiration date and no renewal options.
The effective settlement date of these arrangements resulted in no settlement gain or loss as the contractual terms were at market.
For federal income tax purposes, we amortize and deduct these indefinite-lived intangible assets and goodwill, if any, over 15 years.
+Added: Bradenton and Sarasota, Florida Acquisition
+Added: On April 8, 2024, we completed our acquisition of the Bradenton and Sarasota, Florida businesses that operate two independently owned La-Z-Boy Furniture Galleries ® stores for $ 15.7 million, inclusive of and subject to further customary adjustments.
+Added: The acquisition also included the purchase of buildings and land for both stores.
+Added: We paid total cash of $ 14.3 million during the fourth quarter of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.
+Added: As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 1.9 million related to the reacquired rights described above.
+Added: We also recognized $ 4.7 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.
+Added: Illinois and Indiana Acquisition
+Added: 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.
+Added: The acquisition also included the purchase of buildings and land for five of the stores.
+Added: We paid total cash of $ 17.0 million during the third and fourth quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.
+Added: As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 4.2 million related to the reacquired rights described above.
+Added: We also recognized $ 0.6 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.
+Added: Lafayette, Louisiana Acquisition
+Added: 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.
+Added: 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.
+Added: As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 0.7 million related to the reacquired rights described above.
+Added: We also recognized $ 2.1 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.
+Added: Colorado Springs, Colorado Acquisition
+Added: On July 17, 2023, we completed our acquisition of the Colorado Springs, Colorado business that operates two independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 6.0 million, inclusive of and subject to further to customary adjustments.
+Added: We paid total cash of $ 5.6 million during the first and second quarters of fiscal 2024 and the remaining consideration included forgiveness of accounts receivable and payments based on working capital adjustments.
+Added: As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 2.1 million related to the reacquired rights described above.
+Added: We also recognized $ 2.2 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired stores and future benefits of these synergies.
+Added: Prior Year Acquisitions
+Added: We completed the following acquisitions in fiscal 2023.
Baton Rouge, Louisiana acquisition
−Removed: On March 20, 2023, we completed our acquisition of the Baton Rouge, Louisiana business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 5.0 million, subject to customary adjustments.
+Added: On March 20, 2023, we completed our acquisition of the Baton Rouge, Louisiana business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 5.0 million, inclusive of customary adjustments.
We paid total cash of $ 4.9 million during the fourth quarter of fiscal 2023 and the remaining consideration includes forgiveness of accounts receivable and payments based on working capital adjustments.
4 unchanged sentences
Spokane, Washington acquisition
−Removed: On September 26, 2022, we completed our acquisition of the Spokane, Washington business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 4.7 million, subject to customary adjustments.
+Added: On September 26, 2022, we completed our acquisition of the Spokane, Washington business that operates one independently owned La-Z-Boy Furniture Galleries ® store and one distribution center for $ 4.7 million, inclusive of customary adjustments.
We paid total cash of $ 4.0 million during the second quarter of fiscal 2023 and the remaining consideration includes forgiveness of accounts receivable and payments based on working capital adjustments.
2 unchanged sentences
Denver, Colorado acquisition
−Removed: On July 18, 2022, we completed our acquisition of the Denver, Colorado business that operates five independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 10.1 million, subject to customary adjustments.
+Added: On July 18, 2022, we completed our acquisition of the Denver, Colorado business that operates five independently owned La-Z-Boy Furniture Galleries ® stores and one distribution center for $ 10.1 million, inclusive of customary adjustments.
We paid total cash of $ 7.7 million in the first and second quarters of fiscal 2023 and the remaining consideration includes forgiveness of accounts receivable and payments based on working capital adjustments.
1 unchanged sentence
We also recognized $ 7.6 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired stores and future benefits of these synergies.
−Removed: Prior Year Acquisitions
We completed the following acquisitions in fiscal 2022.
Alabama and Chattanooga, Tennessee acquisition
−Removed: On December 6, 2021, we completed our acquisition of the Alabama and Chattanooga, Tennessee businesses that operate four independently owned La-Z-Boy Furniture Galleries ® stores in Alabama and one in Chattanooga, Tennessee, for $ 8.3 million, subject to customary adjustments.
+Added: On December 6, 2021, we completed our acquisition of the Alabama and Chattanooga, Tennessee businesses that operate four independently owned La-Z-Boy Furniture Galleries ® stores in Alabama and one in Chattanooga, Tennessee, for $ 8.3 million, inclusive of customary adjustments.
We paid total cash of $ 8.0 million in the third quarter of fiscal 2022 and the remaining consideration includes forgiveness of accounts receivable and payments based on working capital adjustments.
2 unchanged sentences
Furnico (La-Z-Boy United Kingdom Manufacturing) acquisition
−Removed: On October 25, 2021, we completed the acquisition of Furnico Furniture Ltd ("Furnico"), an upholstery manufacturing business in the U.K for approximately $ 13.3 million, subject to customary adjustments and in the third and fourth quarters of fiscal 2022, we paid $ 13.9 million of cash for the purchase of the Furnico business.
+Added: On October 25, 2021, we completed the acquisition of Furnico Furniture Ltd ("Furnico"), an upholstery manufacturing business in the U.K for approximately $ 13.3 million, inclusive of customary adjustments and in the third and fourth quarters of fiscal 2022, we paid $ 13.9 million of cash for the purchase of the Furnico business.
Furnico produces La-Z-Boy branded product for the La-Z-Boy U.K.
4 unchanged sentences
Long Island, New York acquisition
−Removed: On August 16, 2021, we completed our acquisition of the Long Island, New York business that operates three independently owned La-Z-Boy Furniture Galleries ® stores for $ 4.5 million, subject to customary adjustments.
+Added: On August 16, 2021, we completed our acquisition of the Long Island, New York business that operates three independently owned La-Z-Boy Furniture Galleries ® stores for $ 4.5 million, inclusive of customary adjustments.
We paid $ 4.4 million of cash during the second quarter of fiscal 2022 and the remaining consideration includes forgiveness of accounts receivable and payments based on working capital adjustments.
1 unchanged sentence
We also recognized $ 4.4 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired stores and future benefits of these synergies.
−Removed: We completed the following acquisition in fiscal 2021.
−Removed: Seattle, Washington acquisition
−Removed: 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.
−Removed: We paid $ 2.0 million of cash during the second quarter of fiscal 2021 and the remaining consideration includes forgiveness of accounts receivable, payments based on working capital adjustments, and future guaranteed payments of $ 9.4 million to be paid over 36 months or fewer, with timing of payments dependent upon the achievement of sales thresholds defined in the purchase agreement.
−Removed: As part of the acquisition, we recorded an indefinite-lived intangible asset of $ 2.2 million related to the reacquired rights described above.
−Removed: We also recognized $ 12.9 million of goodwill in our Retail segment related primarily to synergies we expect from the integration of the acquired stores and future benefits of these synergies.
Restricted Cash
−Removed: We have restricted cash on deposit with a bank as collateral for certain letters of credit.
−Removed: All of our letters of credit have maturity dates within the next 12 months, and we expect to renew some of these letters of credit when they mature.
(Amounts in thousands) 4/27/2024 4/29/2023
55 unchanged sentences
Retail 290,457 299,536
−Removed: Corporate & Other 24,538 18,106
+Added: Corporate and Other 30,723 24,538
Total ROU lease assets $ 446,466 $ 416,269
40 unchanged sentences
Retail Segment Retail La-Z-Boy Furniture Galleries ® stores
−Removed: Corporate & Other Joybird Joybird
+Added: Corporate and Other Joybird Joybird
We test 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 it may be impaired.
−Removed: GAAP, we have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of one of our reporting units is greater than its carrying value ("Step 0").
+Added: Under US GAAP, we have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of one of our reporting units is greater than its carrying value ("Step 0").
If the qualitative assessment leads to a determination that the reporting unit’s fair value is less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test ("Step 1") by calculating the fair value of the reporting unit and comparing the fair value with its associated carrying value.
1 unchanged sentence
During our fiscal 2024 annual impairment test, we first assessed goodwill recoverability qualitatively using the Step 0 approach for each of our reporting units.
−Removed: For our qualitative assessment, we considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal 2020, including assumptions used, such as discount rates and tax rates, indicated fair values, and the amounts in which those fair values exceeded their carrying amounts.
−Removed: Further, we compared actual performance in fiscal 2023, along with future financial projections to the internal financial projections used in the prior quantitative analysis.
+Added: For our qualitative assessment, we considered the most recent quantitative analysis, which was performed during the fourth quarter of fiscal 2023 for the United Kingdom and Joybird reporting units and during the fourth quarter of fiscal 2020 for the Retail reporting unit, including assumptions used, such as discount rates and tax rates, indicated fair values, and the amounts by which those fair values exceeded their carrying amounts.
+Added: Further, we compared actual performance in fiscal 2024, along with future financial projections to the internal financial projections used in the prior quantitative analyses.
Additionally, we considered various other factors including macroeconomic conditions, relevant industry and market trends, and factors specific to the Company that could indicate a potential change in the fair value of our reporting units.
−Removed: Lastly, we evaluated whether any events have occurred or any circumstances have changed since the fourth quarter of fiscal 2020 that would indicate that our goodwill may have become impaired since our last quantitative test.
+Added: Lastly, we evaluated whether any events have occurred or any circumstances have changed since that time that would indicate that our goodwill may have become impaired since our last quantitative tests.
Based on these qualitative assessments, we determined that it is more likely than not that the fair value of our Retail reporting unit exceeded its carrying value and as such, our goodwill for the Retail reporting unit was not considered impaired as of April 27, 2024 and the Step 1 quantitative goodwill impairment analysis was not necessary.
2 unchanged sentences
United Kingdom Reporting Unit
−Removed: Our United Kingdom reporting unit includes the goodwill from our wholesale business in the United Kingdom and Ireland along with our manufacturing business in the United Kingdom, both of which were considered their own reporting unit in fiscal 2022.
−Removed: In fiscal 2023, we determined that in accordance with ASC 350, these businesses, or components, should be aggregated into a single reporting unit as they have similar economic characteristics.
−Removed: As this represented a change in our reporting unit structure, we elected to perform the quantitative Step 1 goodwill impairment test for the new United Kingdom reporting unit.
+Added: Due to a decline in the United Kingdom's financial performance in fiscal 2024, we deemed it necessary to perform the quantitative Step 1 goodwill impairment test for the United Kingdom reporting unit.
To estimate the fair value of this reporting unit, we applied the income approach using discounted future cash flows.
−Removed: Sales and operating income projections were based on assumptions driven by the current economic conditions.
−Removed: Other key assumptions used in the quantitative assessment of the reporting units' goodwill were a discount rate of 8.7 % , reflecting a market participant weighted average cost of capital, and a tax rate of 25.0 %, which was specific to the United Kingdom reporting unit.
−Removed: Based on our testing, the fair value of the United Kingdom reporting unit exceeded its carrying value as of April 29, 2023 and no impairment was recorded.
+Added: Sales and operating income projections were based on assumptions driven by the current economic conditions and assumed a 2.0 % terminal growth rate.
+Added: Other key assumptions used in the quantitative assessment of the reporting unit's goodwill were a discount rate of 10.0 % , reflecting a market participant weighted average cost of capital, and a tax rate of 25.0 %, which was specific to the United Kingdom reporting unit.
+Added: Based on our testing, the fair value of the United Kingdom reporting unit exceeded its carrying value as of April 27, 2024 by approximately 28 % and no impairment was recorded.
Joybird Reporting Unit
1 unchanged sentence
To estimate the fair value of this reporting unit, we applied a combination of the income approach and the market approach, weighted 75 % and 25 %, respectively.
−Removed: The income approach used discounted future cash flows in which sales and operating income projections were based on assumptions driven by current eco nomic conditions and assumed a 2.0 % terminal growth rate.
+Added: The income approach used discounted future cash flows in which sales and operating income projections were based on assumptions driven by current economic conditions and assumed a 2.0 % terminal growth rate.
Other key assumptions used in the discounted future cash flow model were a discount rate of 18.0 %, reflecting a market participant weighted average cost of capital assuming Joybird would be sold as a stand-alone business, and a tax rate of 24.2 %, which was specific to the Joybird reporting unit.
1 unchanged sentence
Based on our testing, the fair value of the Joybird reporting unit exceeded its carrying value as of April 27, 2024 by approximately 6 % and no impairment was recorded.
−Removed: Further, a sensitivity analysis was performed on key assumptions used in the valuation, primarily the discount rate and terminal growth rate, and using a range of reasonable inputs, the fair value of the Joybird reporting unit exceeded its carrying value in the various scenarios analyzed.
−Removed: However, changes to other valuation inputs or failure to meet our forecasts, in particular our sales and operating income projections, could reduce the fair value of the Joybird reporting unit and thus increase the possibility that our goodwill may be impaired in the future.
+Added: Further, a sensitivity analysis was performed on key assumptions used in the valuation, primarily the discount rate and terminal growth rate, and using a range of reasonable inputs, the fair value of the Joybird reporting unit either exceeded its carrying value or did not exceed its carrying value by an immaterial amount, for each of the various scenarios analyzed.
+Added: However, changes to other valuation inputs or failure to meet our forecasts, in particular our sales and operating income projections, could
+Added: reduce the fair value of the Joybird reporting unit and thus increase the possibility that our goodwill may be impaired in the future.
The following table summarizes changes in the carrying amount of our goodwill by reportable segment:
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Reportable Segment Intangible Asset Useful Life
−Removed: Wholesale Segment Primarily acquired customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over useful lives that do not exceed 15 years
+Added: Wholesale Segment Customer relationships from our acquisition of the wholesale business in the United Kingdom and Ireland Amortizable over 15 year useful life
Wholesale Segment American Drew ® trade name
2 unchanged sentences
Indefinite-lived
−Removed: Corporate & Other Joybird ® trade name
+Added: Corporate and Other Joybird ® trade name
Amortizable over eight -year useful life
−Removed: We test amortizable intangible assets and indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
+Added: We test amortizable intangible assets for impairment if events or changes in circumstances indicate that the assets might be impaired.
+Added: We test indefinite-lived intangible assets for impairment on an annual basis in the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the assets might be impaired.
Similar to our goodwill testing, we used the qualitative Step 0 approach to assess if it was more likely than not that the fair values of our indefinite-lived intangible assets were greater than their carrying values.
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Balance at April 27, 2024 $ 1,155 $ 1,796 $ 42,640 $ 1,660 $ 47,251
−Removed: For our intangible assets recorded as of April 29, 2023, we estimate annual amortization expense to be $ 1.0 million for each of the three succeeding fiscal years, $ 0.4 million in the fourth succeeding fiscal year, and $ 0.2 million in the fifth succeeding fiscal year.
+Added: For our intangible assets recorded as of April 27, 2024, we estimate annual amortization expense to be $ 1.0 million for each of the two succeeding fiscal years, $ 0.4 million in the third succeeding fiscal year, and $ 0.2 million in the fourth and fifth succeeding fiscal years.
We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan, and our performance compensation retirement plan.
We also hold investments of two privately-held companies consisting of non-marketable preferred shares, warrants to purchase common shares, and convertible notes.
−Removed: In the fourth quarter of fiscal 2023, we recognized an impairment of $ 10.3 million, consisting of $ 7.6 million in cost-basis investments and $ 2.7 million in convertible notes, which in total represents the full cost-basis value of the investment in one of these privately held start-up companies.
−Removed: The impairment loss is recognized in other income (expense), net, on the consolidated statement of income (refer to Note 20, Fair Value Measurement for additional information).
+Added: In the fourth quarter of fiscal 2023, we recognized an impairment of $ 10.3 million, consisting of $ 7.6 million in cost-basis investments and $ 2.7 million in convertible notes, which in total represented the full cost-basis value of the investment in one of these privately held start-up companies.
+Added: The impairment loss is recognized in other income (expense), net, on the consolidated statement of income.
Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet.
7 unchanged sentences
Marketable securities 12,690 18,509
−Removed: Cost basis investments — 7,579
−Removed: Total long-term investments 18,509 34,178
Total investments $ 19,502 $ 24,903
1 unchanged sentence
Investments to fund compensation/retirement plans 12,748 13,286
−Removed: Other investments — 10,079
Total investments $ 19,502 $ 24,903
18 unchanged sentences
Within one year $ 5,495
−Removed: Within two to five years 6,612
−Removed: Within six to ten years 674
−Removed: Thereafter 1,715
+Added: Securities not due at a single maturity date 6,520
Total $ 12,015
7 unchanged sentences
Accrued expenses and other current liabilities $ 263,768 $ 290,650
−Removed: Customer deposits and deferred revenue decreased during fiscal 2023 as we continue to work down the backlog built up in prior periods back to pre-pandemic levels .
−Removed: On October 15, 2021, we entered into a new five-year $ 200 million unsecured revolving credit facility (the “Credit Facility”).
+Added: On October 15, 2021, we entered into a five-year $ 200 million unsecured revolving credit facility (as amended, the “Credit Facility”).
Borrowings under the Credit Facility may be used by the Company for general corporate purposes.
4 unchanged sentences
As of April 27, 2024, we were in compliance with our financial covenants under the Credit Facility.
−Removed: The Credit Facility replaced our previous $ 150.0 million revolving credit facility, which had been secured primarily by all of our accounts receivable, inventory, cash deposits, and securities accounts.
−Removed: The previous revolving credit facility was terminated on October 15, 2021, and is no longer in effect.
Cash paid for interest during fiscal years 2024, 2023, and 2022 was $ 0.4 million, $ 0.3 million and $ 0.5 million, respectively.
6 unchanged sentences
Performance Compensation Retirement Plan (1)
+Added: ( 133 ) 160 1,654
Deferred Compensation Plan (2)
+Added: ( 86 ) 202 242
Non-Qualified Defined Benefit Retirement Plan (3)
+Added: (1) Performance Compensation Retirement Plan includes forfeitures.
+Added: (2) Includes (gain)/loss on investments held to fund compensation/retirement plans and administrative fees.
(3) Primarily related to interest cost.
7 unchanged sentences
Prior year contributions were based on achievement of performance targets.
−Removed: Employees vest in these prior period contributions if they achieve certain age and years of service with the Company and can elect to receive benefit payments over a period ranging between five to twenty years after they leave the Company.
+Added: Employees vest in these prior period contributions if they achieve certain age and years of service with the Company and can elect to receive benefit payments over a period ranging
+Added: between five to twenty years after they leave the Company.
While the Company no longer makes contributions, the outstanding liability balance related to the plan is as follows:
29 unchanged sentences
We accrue an estimated liability for product warranties when we recognize revenue on the sale of warrantied products.
−Removed: We estimate future warranty claims on product sales based on our historical claims experience and periodically adjust the provision to reflect changes in actual experience.
+Added: We estimate future warranty claims on product sales based on sales volume and our historical claims experience and periodically adjust the provision to reflect changes in actual experience.
We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs, and any costs associated with delivering repaired product to our customers.
−Removed: Over 90 % of our warranty liability relates to our Wholesale reportable segment as we generally warrant our products against defects for one to three years on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames, unless otherwise noted in the warranty.
+Added: Over 90 % of our warranty liability relates to our Wholesale reportable segment as we generally warrant our products against defects for one to three years on fabric and leather, from one to five years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames, unless otherwise noted in the warranty.
Additionally, our Wholesale segment warranties cover labor costs relating to our parts for one year .
5 unchanged sentences
Balance as of the beginning of the year $ 30,984 $ 27,036
−Removed: Acquisitions — 548
Accruals during the year 33,227 43,067
2 unchanged sentences
$ 28,909 $ 30,984
+Added: (1) Accruals and settlements for fiscal 2023 have been revised.
+Added: The adjustments were offsetting and had no impact on the liability balance at the end of fiscal 2023 or the amount recognized in the consolidated statement of income for fiscal 2023.
(2) $ 22.4 million and $ 19.9 million is recorded in accrued expenses and other current liabilities as of April 27, 2024, and April 29, 2023, respectively, while the remainder is included in other long-term liabilities.
7 unchanged sentences
Under this plan, the aggregate number of common shares that may be issued through awards of any form is 2.8 million shares, reduced by the number of shares subject to awards granted under the La-Z-Boy Incorporated 2017 Omnibus Incentive Plan after April 30, 2022 and prior to the Annual Meeting of Shareholders of La-Z-Boy Incorporated held on August 30, 2022.
−Removed: Awards granted in fiscal 2023 were made under our La-Z-Boy Incorporated 2017 Omnibus Incentive Plan.
−Removed: As of the end of fiscal 2023, no grants may be issued under this plan or any of our previous plans.
The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants.
4 unchanged sentences
Equity-based awards expense
−Removed: Stock options $ 2,076 $ 1,973 $ 2,959
Restricted stock $ 6,959 $ 5,069 $ 3,720
−Removed: Restricted stock units issued to Directors 1,020 1,194 840
Performance-based shares 5,109 4,293 4,971
+Added: Stock options 1,257 2,076 1,973
+Added: Restricted stock units issued to Directors 1,101 1,020 1,194
Total equity-based awards expense 14,426 12,458 11,858
4 unchanged sentences
Compensation expense for these awards is based on the market price of our common stock on the grant date and is remeasured each reporting period based on the market value of our common shares on the last day of the reported period.
−Removed: Stock Options.
−Removed: The La-Z-Boy Incorporated 2017 Omnibus Incentive Plan authorized grants to certain employees and directors to purchase common shares at a specified price, which may not be less than 100 % of the current market price of the stock at the date of grant.
−Removed: We granted 318,411 stock options to employees during the first quarter of fiscal 2023, and we also have stock options outstanding from previous grants.
−Removed: We account for stock options as equity-based awards because when they are exercised, they will be settled in common shares.
−Removed: We recognize compensation expense for stock options over the vesting period equal to the fair value on the date our Compensation and Talent Oversight Committee of our board of directors approved the awards.
−Removed: The vesting period for our stock options ranges from one to four years , with accelerated vesting upon retirement.
−Removed: The vesting date for retirement-eligible employees is the later of the date they meet the criteria for retirement or ten months after the grant date.
−Removed: We accelerate the expense for options granted to retirement eligible employees over the vesting period, with expense recognized from the grant date through their retirement eligibility date or over the ten months following the grant date, whichever period is longer.
−Removed: We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur.
−Removed: Granted options outstanding under the former long-term equity award plan remain in effect and have a term of 10 years.
−Removed: We estimate the fair value of the employee stock options at the grant date using the Black-Scholes option-pricing model, which requires management to make certain assumptions.
−Removed: The fair value of stock options granted during fiscal years 2023, 2022, and 2021 were calculated using the following assumptions:
−Removed: Risk-free interest rate 2.87 % 0.82 % 0.34 % U.S.
−Removed: Treasury issues with term equal to expected life at grant date
−Removed: Dividend rate 2.70 % 1.58 % — % Estimated future dividend rate and common share price at grant date
−Removed: Expected life 5.0 years 5.0 years 5.0 years Contractual term of stock option and expected employee exercise trends
−Removed: Stock price volatility 42.78 % 42.16 % 41.79 % Historical volatility of our common shares
−Removed: Fair value per option $ 7.90 $ 12.29 $ 10.06
−Removed: Plan activity for stock options under the above plans was as follows:
−Removed: Number of Shares
−Removed: (In Thousands)
−Removed: Weighted Average Exercise Price Weighted Average Remaining Contractual Term
−Removed: Aggregate Intrinsic Value
−Removed: (In Thousands)
−Removed: Outstanding at April 30, 2022 1,516 $ 30.51 6.6 $ 24
−Removed: Granted 318 24.41 N/A N/A
−Removed: Canceled ( 37 ) 30.46 N/A N/A
−Removed: Exercised ( 176 ) 26.64 N/A 1,047
−Removed: Outstanding at April 29, 2023 1,621 29.73 6.7 2,175
−Removed: Exercisable at April 29, 2023 1,076 $ 30.15 5.7 $ 776
−Removed: The aggregate intrinsic value of options exercised was $ 0.3 million and $ 5.1 million in fiscal 2022 and fiscal 2021, respectively.
−Removed: As of April 29, 2023, our total unrecognized compensation cost related to non-vested stock option awards was $ 2.7 million, which we expect to recognize over a weighted-average remaining vesting term of all unvested awards of 1.6 years.
−Removed: During the year ended April 29, 2023, stock options with respect to 0.3 million shares vested.
−Removed: We received $ 4.7 million, $ 1.1 million, and $ 10.8 million in cash during fiscal 2023, 2022, and 2021, respectively, for exercises of stock options.
Restricted Stock .
−Removed: We granted 256,128 shares of restricted stock units to employees during fiscal 2023.
+Added: We granted 331,140 shares of restricted stock units to employees during fiscal 2024 and we also have restricted stock awards outstanding from previous grants.
We issue restricted stock at no cost to the employees and account for restricted stock awards as equity-based awards because when they vest, they will be settled in common shares.
We recognize compensation expense for restricted stock over the vesting period equal to the fair value on the date our Compensation and Talent Oversight Committee of our board of directors approved the awards.
−Removed: Restricted stock awards vest at 25 % per year, beginning one year from the grant date for a term of four years , with continued vesting upon retirement with respect to the fiscal 2023 grants.
+Added: Restricted stock awards vest at 25 % per year, beginning one year from the grant date for a term of four years , with continued vesting upon retirement with respect to the fiscal 2023 and 2024 grants.
We accelerate the expense for restricted stock granted to retirement-eligible employees over the vesting period, with expense recognized from the grant date through their retirement eligibility date or over the ten months following the grant date, whichever period is longer.
We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur.
−Removed: The weighted average fair value of the restricted stock that was awarded in fiscal 2023 was $ 24.58 per share, the market value of our common shares on the date of grant.
+Added: The weighted average fair value of the restricted stock that was awarded in fiscal 2024, fiscal 2023 and fiscal 2022 was $ 27.68 , $ 24.58 and $ 38.27 per share, respectively, the market value of our common shares on the date of grant.
The following table summarizes information about non-vested awards as of and for the year ended April 27, 2024:
8 unchanged sentences
Unrecognized compensation cost related to non-vested restricted shares was $ 7.9 million and is expected to be recognized over a weighted-average remaining contractual term of all unvested awards of 1.6 years.
−Removed: Restricted Stock Units Issued to Directors.
−Removed: Restricted stock units granted to our non-employee directors are offered at no cost to the directors and vest 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.
−Removed: During fiscal 2023, fiscal 2022, and fiscal 2021 we granted less than 0.1 million restricted stock units each year to our non-employee directors.
−Removed: We account for these restricted stock units as equity-based awards because when they vest, they will be settled in shares of our common stock.
−Removed: We measure and recognize compensation expense for these awards based on the market price of our common shares on the date of grant.
−Removed: The weighted-average fair value of the restricted stock units that were granted during fiscal 2023, fiscal 2022, and fiscal 2021 was $ 26.49 , $ 35.34 , and $ 32.08 , respectively.
Performance Shares.
17 unchanged sentences
For shares that vest based on our results relative to the performance goals, we expense as compensation cost the fair value of the shares as of the day we granted the awards recognized over the performance period, taking into account the probability that we will satisfy the performance goals.
−Removed: The fair value of each share of the awards we granted in fiscal 2023, fiscal 2022, and fiscal 2021 that vest based on attaining performance goals was $ 22.43 , $ 36.13 , and $ 30.75 , respectively, the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest.
For shares that vest based on market conditions, we use a Monte Carlo valuation model to estimate each share's fair value as of the date of grant.
The Monte Carlo valuation model uses multiple simulations to evaluate our probability of achieving various stock price levels to determine our expected performance ranking relative to our peer group.
−Removed: Similar to the way in which we expense the awards of stock options, we expense compensation cost over the vesting period regardless of whether the market condition is ultimately satisfied.
−Removed: Based on the Monte Carlo model, the fair value as of the grant date of the fiscal 2023, fiscal 2022, and fiscal 2021 grants of shares that vest based on market conditions was $ 36.63 , $ 51.85 , and $ 38.14 , respectively.
+Added: We expense compensation cost over the vesting period regardless of whether the market condition is ultimately satisfied.
+Added: The fair value of each performance-based share that we granted during fiscal 2024, 2023, and 2022 was as follows:
+Added: Vesting based on:
+Added: Performance goals (1)
+Added: $ 25.48 $ 22.43 $ 36.13
+Added: Market conditions (2)
+Added: $ 34.15 $ 36.63 $ 51.85
+Added: (1) Represents the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest
+Added: (2) Based on Monte Carlo valuation model
Our unrecognized compensation cost at April 27, 2024, related to performance-based shares was $ 6.5 million based on the current estimates of the number of awards that will vest, and is expected to be recognized over a weighted-average remaining contractual term of all unvested awards of 1.3 years.
9 unchanged sentences
Total expense $ 5,109 $ 4,293 $ 4,971
+Added: Stock Options.
+Added: We did not grant stock options to employees during fiscal 2024, but we have stock options outstanding from grants from prior years.
+Added: We account for stock options as equity-based awards because when they are exercised, they will be settled in common shares.
+Added: We recognize compensation expense for stock options over the vesting period equal to the fair value on the date our Compensation and Talent Oversight Committee of our board of directors approved the awards.
+Added: The vesting period for our stock options ranges from one to four years , with accelerated vesting upon retirement.
+Added: The vesting date for retirement-eligible employees is the later of the date they meet the criteria for retirement or ten months after the grant date.
+Added: We accelerate the expense for options granted to retirement eligible employees over the vesting period, with expense recognized from the grant date through their retirement eligibility date or over the ten months following the grant date, whichever period is longer.
+Added: We have elected to recognize forfeitures as an adjustment to compensation expense in the same period as the forfeitures occur.
+Added: Granted options outstanding under the former long-term equity award plan remain in effect and have a term of 10 years.
+Added: We estimated the fair value of the employee stock options granted in prior years at their respective grant date using the Black-Scholes option-pricing model, which requires management to make certain assumptions.
+Added: The fair value of stock options granted during fiscal years 2023 and 2022 were calculated using the following assumptions:
+Added: Risk-free interest rate 2.87 % 0.82 % U.S.
+Added: Treasury issues with term equal to expected life at grant date
+Added: Dividend rate 2.70 % 1.58 % Estimated future dividend rate and common share price at grant date
+Added: Expected life 5.0 years 5.0 years Contractual term of stock option and expected employee exercise trends
+Added: Stock price volatility 42.78 % 42.16 % Historical volatility of our common shares
+Added: Fair value per option $ 7.90 $ 12.29
+Added: Plan activity for stock options under the above plans was as follows:
+Added: Number of Shares
+Added: (In Thousands)
+Added: Weighted Average Exercise Price Weighted Average Remaining Contractual Term
+Added: Aggregate Intrinsic Value
+Added: (In Thousands)
+Added: Outstanding at April 29, 2023 1,621 $ 29.73 6.7 $ 2,175
+Added: Granted — — N/A N/A
+Added: Canceled ( 18 ) 31.11 N/A N/A
+Added: Exercised ( 474 ) 27.39 N/A 4,242
+Added: Outstanding at April 27, 2024 1,129 30.69 6.0 3,951
+Added: Exercisable at April 27, 2024 822 $ 31.46 5.4 $ 2,087
+Added: The aggregate intrinsic value of options exercised was $ 1.0 million and $ 0.3 million in fiscal 2023 and fiscal 2022, respectively.
+Added: As of April 27, 2024, our total unrecognized compensation cost related to non-vested stock option awards was $ 1.3 million, which we expect to recognize over a weighted-average remaining vesting term of all unvested awards of 1.2 years.
+Added: During the year ended April 27, 2024, stock options with respect to 0.3 million shares vested.
+Added: We received $ 13.0 million, $ 4.7 million, and $ 1.1 million in cash during fiscal 2024, 2023, and 2022, respectively, for exercises of stock options.
+Added: Restricted Stock Units Issued to Directors.
+Added: 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.
+Added: During fiscal 2024, we granted less than 0.1 million restricted stock units to our non-employee directors.
+Added: We account for these restricted stock units as equity-based awards because when they vest, they will be settled in shares of our common stock.
+Added: We measure and recognize compensation expense for these awards based on the market price of our common shares on the date of grant.
+Added: The weighted-average fair value of the restricted stock units that were granted during fiscal 2024, fiscal 2023, and fiscal 2022 was $ 30.80 , $ 26.49 , and $ 35.34 , respectively.
Accumulated Other Comprehensive Loss
Activity in accumulated other comprehensive loss was as follows:
−Removed: (Amounts in thousands) Translation adjustment Unrealized gain (loss) on marketable securities Net pension amortization and net actuarial loss Accumulated other comprehensive loss
+Added: (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 April 24, 2021 $ 3,041 $ 370 $ ( 4,932 ) $ ( 1,521 )
46 unchanged sentences
Consolidated Net Sales $ 2,349,433
−Removed: (1) Primarily includes revenue for advertising, royalties, parts, accessories, after-treatment products, surcharges, discounts & allowances, rebates and other sales incentives.
−Removed: Upholstered Furniture - Includes gross revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans.
−Removed: This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer.
−Removed: Casegoods Furniture - Includes gross revenue for casegoods furniture typically found in a bedroom, such as beds, chests, dressers, nightstands and benches;
+Added: (1) Primarily includes revenue for advertising, royalties, parts, accessories, after-treatment products, surcharges, rebates and other sales incentives.
+Added: In fiscal 2024, certain amounts that were previously charged as surcharges in fiscal 2023 are now included in the base product pricing and reflected in the amounts by product category.
+Added: Upholstered Furniture - Includes revenue for upholstered furniture, such as recliners, sofas, loveseats, chairs, sectionals, modulars, and ottomans.
+Added: This revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), operators of La-Z-Boy Comfort Studio ® locations, England Custom Comfort Center locations, other major dealers, independent retailers, and the end consumer.
+Added: Casegoods Furniture - Includes revenue for casegoods furniture typically found in a bedroom, such as beds, chests, dressers, nightstands and benches;
furniture typically found in the dining room, such as dining tables, storage units, and stools;
and furniture typically found throughout the home, such as cocktail tables, chairsides, sofa tables, end tables, and entertainment centers.
−Removed: This gross revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer.
+Added: This revenue includes sales to La-Z-Boy Furniture Galleries ® stores (including company-owned stores), independent retailers, and the end consumer.
Contract Assets and Liabilities .
9 unchanged sentences
(1) During the year ended April 27, 2024, we recognized revenue of $ 139.0 million related to our contract liability balance at April 29, 2023.
−Removed: Contract assets, customer deposits and deferred revenue decreased during fiscal 2023 as we continue to work down the backlog built up in prior periods back to pre-pandemic levels.
+Added: Contract assets, customer deposits, and deferred revenue decreased during fiscal 2024 primarily due to a reduction in backlog .
Segment Information
1 unchanged sentence
Wholesale Segment .
−Removed: Our Wholesale segment consists primarily of three operating segments:
−Removed: La-Z-Boy, our largest operating segment, our England subsidiary, and our casegoods operating segment that sells furniture under three brands:
−Removed: American Drew ® , Hammary ® and Kincaid ® .
−Removed: The Wholesale segment also includes our international wholesale and manufacturing businesses.
+Added: Our Wholesale segment consists primarily of four operating segments:
+Added: La-Z-Boy, our largest operating segment, our England subsidiary, our casegoods operating segment that sells furniture under three brands (American Drew ® , Hammary ® , and Kincaid ® ), and our international operating segment which includes our international wholesale and manufacturing businesses.
We aggregate these operating segments into one reportable segment because they are economically similar and meet the other aggregation criteria for determining reportable segments.
3 unchanged sentences
Our Retail segment consists of one operating segment comprised of our 187 company-owned La-Z-Boy Furniture Galleries ® stores.
−Removed: The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores.
−Removed: Corporate & Other .
−Removed: 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.
+Added: The Retail segment sells primarily upholstered furniture, in addition to some casegoods and other home furnishing accessories, to end consumers through these stores.
+Added: Corporate and Other .
+Added: Corporate and 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 that manufactures upholstered furniture such as sofas, loveseats, chairs, ottomans, sleeper sofas and beds, and also imports casegoods (wood) furniture such as occasional tables and other accessories.
−Removed: Joybird sells to the end consumer primarily online through its website, www.joybird.com.
−Removed: None of the operating segments included in Corporate & Other meet the requirements of reportable segments.
+Added: Joybird sells to the end consumer primarily online through its website, www.joybird.com and through small-format stores in key urban markets.
+Added: None of the operating segments included in Corporate and Other meet the requirements of reportable segments.
The accounting policies of the operating segments are the same as those described in Note 1, Accounting Policies.
91 unchanged sentences
After enactment of the Tax Cuts and Jobs Act in 2017, the potential deferred tax attributable to these earnings would be approximately $ 2.9 million, primarily related to foreign withholding taxes and state income taxes.
−Removed: The Company is not permanently reinvested on undistributed earnings for its Thailand and United Kingdom foreign operating units and has provided for deferred tax attributable to those earnings of approximately $ 1.2 million in fiscal 2023.
+Added: The Company is not permanently reinvested on undistributed earnings for its Thailand and United Kingdom foreign operating units and has provided for deferred tax attributable to those earnings of approximately $ 1.4 million as of the end of fiscal 2024.
The primary components of our deferred tax assets and (liabilities) were as follows:
4 unchanged sentences
Warranty 6,985 7,213
−Removed: Inventory — 2,274
Workers' compensation 1,823 1,817
32 unchanged sentences
The remaining valuation allowance of $ 1.5 million is primarily related to certain U.S.
−Removed: federal, state and foreign deferred tax assets.
−Removed: federal deferred taxes are primarily due to limitations on the realization of deferred taxes related to executive compensation.
−Removed: state deferred taxes are primarily related to state net operating losses.
+Added: state and foreign deferred tax assets.
+Added: state deferred taxes are primarily related to state net operating losses and state tax credits.
+Added: The foreign deferred taxes are primarily related to capital losses.
As of April 27, 2024, we had a gross unrecognized tax benefit of $ 1.2 million related to uncertain tax positions in various jurisdictions.
7 unchanged sentences
Positions taken during the prior year — — ( 23 )
−Removed: Decreases related to settlements with taxing authorities — — —
Reductions resulting from the lapse of the statute of limitations ( 127 ) ( 145 ) ( 140 )
1 unchanged sentence
We recognize interest and penalties associated with uncertain tax positions in income tax expense.
−Removed: We had approximately $ 0.4 million accrued for interest and penalties as of April 29, 2023 and April 30, 2022.
+Added: We had approximately $ 0.5 million and $ 0.4 million accrued for interest and penalties as of April 27, 2024 and April 29, 2023, respectively.
If recognized, $ 1.0 million of the total $ 1.2 million of unrecognized tax benefits would decrease our effective tax rate.
1 unchanged sentence
The remaining balance will be settled or released as tax audits are effectively settled, statutes of limitation expire, or other new information becomes available.
−Removed: federal income tax returns for fiscal years 2020 and subsequent are still subject to audit.
+Added: federal income tax returns for fiscal years 2021 and subsequent years are still subject to audit.
In addition, we conduct business in various states.
−Removed: The major states in which we conduct business are subject to audit for fiscal years 2019 and subsequent.
−Removed: Our foreign operations are subject to audit for fiscal years 2013 and subsequent.
+Added: The major states in which we conduct business are subject to audit for fiscal years 2020 and subsequent years.
+Added: Our foreign operations are subject to audit for fiscal years 2014 and subsequent years.
Cash paid for taxes (net of refunds received) during the fiscal years ended April 27, 2024, April 29, 2023, and April 30, 2022, was $ 34.2 million, $ 69.9 million, and $ 38.6 million, respectively.
7 unchanged sentences
Income allocated to participating securities (1)
−Removed: — ( 7 ) ( 46 )
Net income available to common Shareholders $ 122,626 $ 150,664 $ 150,010
5 unchanged sentences
Basic $ 2.86 $ 3.49 $ 3.41
−Removed: Diluted $ 3.48 $ 3.39 $ 2.30
+Added: $ 2.83 $ 3.48 $ 3.39
(1) Prior to fiscal 2019, we granted restricted stock awards that contained non-forfeitable rights to dividends on unvested shares, and we are required to include these participating securities in calculating our basic earnings per common share, using the two-class method.
+Added: (2) Diluted earnings per share was computed using the treasury stock method.
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 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.
−Removed: We excluded options to purchase 1.4 million and 0.2 million shares from the diluted share calculation for the years ended April 29, 2023 and April 30, 2022, respectively.
−Removed: We did no t exclude any outstanding options from the diluted share calculation for the fiscal year ended April 24, 2021.
+Added: We excluded options to purchase 0.5 million, 1.4 million and 0.2 million shares from the diluted share calculation for the years ended April 27, 2024, April 29, 2023 and April 30, 2022, respectively.
Fair Value Measurements
7 unchanged sentences
In addition to assets and liabilities that we record at fair value on a recurring basis, we are required to record assets and liabilities at fair value on a non-recurring basis.
−Removed: 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.
+Added: We measure non-financial assets such as other intangible assets, goodwill, and
+Added: 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 April 27, 2024 and April 29, 2023.
11 unchanged sentences
Held-to-maturity investments 1,351 — — — 1,351
−Removed: Cost basis investment — — 7,579 — 7,579
Total assets $ 1,351 $ 16,557 $ — $ 6,995 $ 24,903
−Removed: Contingent consideration liability $ — $ — $ 800 $ — $ 800
(1) Certain marketable securities investments are measured at fair value using net asset value per share under the practical expedient methodology.
At April 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.
−Removed: 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.
−Removed: At April 29, 2023, our Level 3 assets included investments in two privately-held companies consisting of non-marketable preferred shares, warrants to purchase common shares, and convertible notes.
−Removed: The fair value for our Level 3 equity 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.
−Removed: During the third quarter of fiscal 2023, we invested an additional $ 0.2 million in convertible notes in one of these privately-held start-up companies.
−Removed: Subsequently and during the fourth quarter of fiscal 2023, with respect to the same investee, we recorded an impairment charge of $ 10.3 million to other income (expense), net in the consolidated statement of income for the full carrying value of the preferred shares ($ 7.6 million) and convertible notes ($ 2.7 million), as it was determined the value of the investments was not recoverable.
−Removed: For non-marketable equity investments, the measurement of fair value requires significant judgment and includes quantitative and qualitative analysis of identified events or circumstances that impact the fair value of the investment.
−Removed: Among other factors, we assessed the investee's ability to meet business milestones, its financial condition and near-term prospects (including the rate at which the investee was using cash and its current debt obligations and impending debt maturities), the investee's need for additional funding, and the competitive environment in which the investee operates its business.
−Removed: Our Level 3 liability included our contingent consideration liability resulting from the Joybird acquisition.
−Removed: The fair value of our contingent consideration liability as of April 29, 2023 reflects our expectation that no additional consideration will be owed based on our most recent financial projections and the terms of the earnout agreement.
−Removed: As a result, during the second quarter of fiscal 2023, we reduced the fair value of the contingent consideration liability by its full carrying value of $ 0.8 million which was recorded as a favorable impact to selling, general and administrative expense in our consolidated statement of income.
−Removed: The following table is a reconciliation of our Level 3 assets and liabilities recorded at fair value using significant unobservable inputs:
+Added: At April 27, 2024 and April 29, 2023, we held no Level 3 assets or liabilities with a carrying value.
+Added: During fiscal 2023, we recorded a $ 10.3 million impairment charge for one of our Level 3 investments to other income (expense), net in the consolidated statement of income, reducing its carrying value to zero as it was determined the value of the investment was not recoverable.
+Added: The following is a reconciliation of our Level 3 assets and liabilities recorded at fair value using significant unobservable inputs for the fiscal year ended April 29, 2023.
(Amounts in thousands) Assets Liabilities
4 unchanged sentences
Balance at April 29, 2023 $ — $ —
−Removed: Purchases 237 —
−Removed: Impairment ( 10,316 ) —
−Removed: Fair value adjustment — ( 800 )
−Removed: Balance at April 29, 2023 $ — $ —
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
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.