La-Z-Boy Incorporated (NYSE:LZB) Q3 2022 Earnings Conference Call February 16, 2022 8:30 AM ET Company Participants Kathy Liebmann - Investor Relations Melinda Whittington - President & Chief Executive Officer Bob Lucian - Chief Financial Officer Conference Call Participants Bobby Griffin - Raymond James Anthony Lebiedzinski - Sidoti Bradley Thomas - KeyBanc Capital Markets Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 22, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ COMMISSION FILE NUMBER 1-9656 LA-Z-BOY INCORPORATED (Exact name of registrant as specified in its charter) | Michigan | | ...

La-Z-Boy Incorporated (NYSE:LZB) Q2 2022 Earnings Conference Call November 17, 2021 8:30 AM ET Company Participants Kathy Liebmann - Investor Relations Melinda Whittington - President, Chief Executive Officer Bob Lucian - Chief Financial Officer Conference Call Participants Bobby Griffin - Raymond James Bradley Thomas - KeyBanc Capital Markets Anthony Lebiedzinski - Sidoti Operator Good morning ladies and gentlemen and welcome to the La-Z-Boy Fiscal 2022 Second Quarter Conference Call. At this time, all par ...

(Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 23, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ COMMISSION FILE NUMBER 1-9656 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q LA-Z-BOY INCORPORATED (Exact name of registrant as specified in its charter) | Michigan | 3 ...

INVESTOR PRESENTATION September 2021 L A @ B O Y I N C O R P O R A T E D rojo Caray Forward‐Looking Disclaimer • This presentation contains statements that relate directly or indirectly to our future business, events or financial performance that may constitute forward‐looking statements. Forward‐looking statements generally contain words such as "anticipates," "believes," "continues," "estimates," "expects," "feels," "forecasts," "hopes," "intends," "likely," "non‐recurring," "one‐time," "outlook," "plans, ...

La-Z-Boy Incorporated (NYSE:LZB) Q1 2022 Earnings Conference Call August 18, 2021 8:30 AM ET Company Participants Melinda Whittington - President, Chief Executive Officer Bob Lucian - Chief Financial Officer Kathy Liebman - Investor Relations Conference Call Participants Bobby Griffin - Raymond James Anthony Lebiedzinski - Sidoti Brad Thomas - Keybanc Capital Partners Operator Good day ladies and gentlemen and welcome to your La-Z-Boy fiscal 2022 first quarter conference call. All lines have been placed in ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 24, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ COMMISSION FILE NUMBER 1-9656 LA-Z-BOY INCORPORATED (Exact name of registrant as specified in its charter) | | | Page Number ...

La-Z-Boy Incorporated (NYSE:LZB) Q4 2021 Earnings Conference Call June 16, 2021 8:30 AM ET Company Participants Kathy Liebmann - IR Melinda Whittington - President and CEO Robert Lucian - CFO Conference Call Participants Bobby Griffin - Raymond James Bradley Thomas - KeyBanc Capital Markets Operator Please standby. Good day ladies and gentlemen, and welcome to your La-Z-Boy Fiscal 2021 Fourth Quarter and Full Year Conference Call. All lines have been placed in a listen-only mode and the floor will be open f ...

```markdown [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements concerning future results, financial condition, strategic plans, and the impact of COVID-19, which are subject to various risks and uncertainties, many of which are unforeseeable and beyond the company's control[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) [PART I](index=4&type=section&id=PART%20I) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) La-Z-Boy Incorporated is a leading global producer of reclining chairs and the second-largest residential furniture manufacturer/distributor in the U.S., operating under multiple brands and distribution channels. The company's strategy focuses on profitable sales growth, expanding its proprietary retail network, enhancing its multi-channel distribution, innovating products, and leveraging its online presence, including the Joybird e-commerce brand. Fiscal 2021 saw a segment revision, aggregating Upholstery and Casegoods into a new Wholesale segment - La-Z-Boy is the **leading global producer** of reclining chairs and the **second-largest** manufacturer/distributor of residential furniture in the U.S. Its La-Z-Boy Furniture Galleries stores network is the **third-largest** single-branded furniture retailer in the U.S[16](index=16&type=chunk)[120](index=120&type=chunk) - The company manufactures, markets, imports, exports, distributes, and retails upholstery furniture under La-Z-Boy, England, Kincaid, and Joybird tradenames, and casegoods under Kincaid, American Drew, Hammary, and Joybird tradenames[16](index=16&type=chunk)[120](index=120&type=chunk) - Effective Q1 FY2021, the company revised its reportable operating segments by combining the former Upholstery and Casegoods segments into a new Wholesale segment, while the Retail segment and Corporate & Other remained unchanged[18](index=18&type=chunk)[125](index=125&type=chunk) [Company Overview and Brands](index=4&type=section&id=1.1%20Company%20Overview%20and%20Brands) - Founded in 1927 as Floral City Furniture, incorporated as La-Z-Boy Chair Company in 1941, and renamed La-Z-Boy Incorporated in 1996. The La-Z-Boy brand is one of the most recognized in the furniture industry[15](index=15&type=chunk) - The company operates five major manufacturing locations and seven regional distribution centers in the U.S., three facilities in Mexico, a logistics company, a wholesale sales office in the UK/Ireland, and a global trading company in Hong Kong[16](index=16&type=chunk) [Principal Products and Industry Segments](index=4&type=section&id=1.2%20Principal%20Products%20and%20Industry%20Segments) - The Wholesale segment manufactures and imports upholstered furniture (recliners, sofas, etc.) and imports casegoods (wood) furniture (bedroom, dining room, entertainment centers). It sells to La-Z-Boy Furniture Galleries stores, Comfort Studio locations, England Custom Comfort Centers, major dealers, and independent retailers[18](index=18&type=chunk)[20](index=20&type=chunk)[127](index=127&type=chunk) - The Retail segment consists of **159 company-owned** La-Z-Boy Furniture Galleries stores, selling upholstered furniture, casegoods, and accessories directly to consumers[24](index=24&type=chunk)[127](index=127&type=chunk) - Corporate & Other includes shared corporate costs, royalty revenue, a global trading company, and Joybird, an e-commerce retailer manufacturing and selling upholstered and casegoods furniture online[24](index=24&type=chunk)[127](index=127&type=chunk) [COVID-19 Impact and Response](index=6&type=section&id=1.3%20COVID-19%20Impact%20and%20Response) - In response to COVID-19, the company temporarily closed manufacturing and retail operations, furloughed **70% of its workforce**, implemented salary reductions, suspended dividends and share repurchases in Q4 FY2020[23](index=23&type=chunk) - In Q1 FY2021, operations reopened, most furloughed employees returned, and temporary salary reductions ended. The company also announced a business realignment plan, reducing its global workforce by **10%** and closing a manufacturing facility[25](index=25&type=chunk) - By Q3 FY2021, the company reinstated 401(k) match, cash compensation for the board, and full quarterly dividends. In Q4 FY2021, share repurchases resumed, and the quarterly dividend increased to **$0.15/share**[28](index=28&type=chunk) COVID-19 Related Financial Actions and Impacts | Fiscal Period | Action/Impact | | :------------ | :------------ | | Q4 FY2020 | Temporarily closed all manufacturing and retail operations | | | Furloughed ~70% of workforce | | | Implemented temporary 50% executive salary reduction, 25% for other salaried staff | | | Suspended 401(k) match and board cash compensation | | | Eliminated June quarterly dividend and suspended share repurchase program | | Q1 FY2021 | Announced business realignment, 10% global workforce reduction, Newton, MS plant closure | | | Re-opened manufacturing, retail, and corporate HQs with safety protocols | | | Majority of furloughed employees returned, temporary salary reductions ended (except for named executive officers) | | Q2 FY2021 | Named executive officers' temporary salary reduction ended | | | Reinstated 401(k) match and board cash compensation | | | Reinstated quarterly dividend at $0.07/share (50% of prior amount) | | Q3 FY2021 | Quarterly dividend returned to full amount ($0.14/share) | | | Recognized $5.2 million non-operating income from CARES Act employee retention payroll tax credits | | Q4 FY2021 | Quarterly dividend increased to $0.15/share (7% increase) | | | Repurchased 1.1 million shares for $43.3 million under reinstated authorization | [Supply Chain and Raw Materials](index=7&type=section&id=1.4%20Supply%20Chain%20and%20Raw%20Materials) - Principal raw materials include fabrics, leather, polyester batting, polyurethane foam, lumber, plywood, steel, and electrical components. The company relies on a limited number of major suppliers for polyurethane foam and cover materials, with significant imports from Asia[28](index=28&type=chunk) - In fiscal 2021, raw material prices increased due to COVID-19 supply chain challenges, higher demand, and inflationary pressures. Temporary shortages of polyurethane foam occurred in Q2 and Q3 FY2021. Prices are expected to remain high in FY2022, potentially leading to selling price increases or surcharges[30](index=30&type=chunk) - Imported finished goods accounted for **7% of consolidated sales** in FY2021 and FY2020. Casegoods are primarily imported from three Asian suppliers (China and Vietnam). Prices for imported products and transportation costs increased in FY2021 due to demand and shipping container constraints, expected to continue in FY2022[31](index=31&type=chunk)[32](index=32&type=chunk) [Seasonal and Economic Business Cycles](index=8&type=section&id=1.5%20Seasonal%20and%20Economic%20Business%20Cycles) - Historically, the wholesale business sees its highest sales in Q4 and weakest in Q1 (due to summer slowdowns and plant maintenance). Retail and e-commerce businesses typically have highest sales in Q3 and lowest in Q1[33](index=33&type=chunk)[34](index=34&type=chunk) - In FY2021, COVID-19 disrupted typical seasonal trends, leading to a significant sales decline in Q4 FY2020 and Q1 FY2021, followed by increased demand and record sales in Q4 FY221 for both wholesale and retail segments[35](index=35&type=chunk) - Furniture demand is sensitive to economic conditions (consumer confidence, housing market, unemployment). Upholstered furniture has a shorter lifecycle and is less volatile than casegoods, which are more sensitive to housing market conditions[36](index=36&type=chunk)[37](index=37&type=chunk) [Working Capital Management](index=10&type=section&id=1.6%20Working%20Capital%20Management) - Inventory increased by **$44.5 million** in FY2021, primarily to support increased sales demand, recovering from a slowdown in FY2020 due to COVID-19[41](index=41&type=chunk) - Accounts receivable increased by **$40.0 million** in FY2021 due to higher Q4 sales and normalized collection trends. Days' sales outstanding remained at approximately **30 days or less**[42](index=42&type=chunk) - Accounts payable increased by **$38.6 million** in FY2021, driven by higher inventory purchases to meet increased demand[43](index=43&type=chunk) - Customer deposits increased by **$140.0 million** in FY2021, reflecting higher written Retail and Joybird sales volume[44](index=44&type=chunk) [Customers and Distribution Strategy](index=12&type=section&id=1.7%20Customers%20and%20Distribution%20Strategy) - Wholesale customers are furniture retailers in the U.S., Canada, and **65 other countries**. Sales are also made directly to consumers through company-owned stores and websites[45](index=45&type=chunk) - The distribution model relies heavily on proprietary retail floor space, including **354 La-Z-Boy Furniture Galleries stores** (**159 company-owned**) and **561 La-Z-Boy Comfort Studio locations**. Total proprietary floor space is approximately **12.8 million square feet** worldwide[17](index=17&type=chunk)[46](index=46&type=chunk) - In FY2021, the Wholesale segment's customer mix was approximately **60% proprietary**, **12% major dealers**, and **28% other independent retailers**[45](index=45&type=chunk) [Orders and Backlog](index=12&type=section&id=1.8%20Orders%20and%20Backlog) - Upholstery units are typically built based on specific dealer or custom orders. Casegoods are imported to fill internal orders, leading to higher finished goods inventory[47](index=47&type=chunk) - In FY2021, unprecedented demand outpaced production capacity due to COVID-19-related challenges (shutdowns, absenteeism, material shortages, shipping delays)[47](index=47&type=chunk) Wholesale Backlog | Date | Backlog (Millions) | | :------------ | :----------------- | | April 24, 2021 | $616.7 | | April 25, 2020 | $37.6 | [Competitive Landscape](index=13&type=section&id=1.9%20Competitive%20Landscape) - The company is the **second-largest residential furniture manufacturer/distributor** in the U.S. and competes on product styling, quality, customer service, price, and location[48](index=48&type=chunk)[50](index=50&type=chunk) - Competition comes from direct-to-consumer brands (e.g., Article, Burrow), digital-only retailers (e.g., Amazon, Wayfair), large retailers (e.g., Costco, IKEA), and numerous small/medium-sized companies[49](index=49&type=chunk)[53](index=53&type=chunk) - Key competitors in the Wholesale segment include Ashley, Bassett, Bernhardt, and others. Retail competitors include Arhaus, Ashley, Crate and Barrel, and regional stores. Joybird competes with online brands like Amazon, Wayfair, and West Elm[51](index=51&type=chunk)[52](index=52&type=chunk) [Intellectual Property](index=13&type=section&id=1.10%20Intellectual%20Property) - The La-Z-Boy and Joybird trademarks are essential to the business, registered in the U.S. and other countries. The company licenses the La-Z-Boy trademark to international partners and for non-furniture products to enhance brand awareness[54](index=54&type=chunk) - The company holds and actively enforces U.S. and foreign patents, filing applications for valuable inventions and designs[54](index=54&type=chunk) [Environmental Compliance](index=14&type=section&id=1.11%20Environmental%20Compliance) - Manufacturing operations involve the use and disposal of regulated substances. The company does not anticipate material losses from environmental matters based on current facts and experience[56](index=56&type=chunk) [Human Capital](index=14&type=section&id=1.12%20Human%20Capital) Employee Headcount (Full-Time Equivalent) | Date | Total Employees | | :------------ | :-------------- | | April 24, 2021 | 11,500 | | End of FY2020 | 9,500 | - The increase in headcount in FY2021 is due to increased production and capacity at U.S. and Mexico manufacturing facilities, partially offset by early FY2021 workforce reductions due to COVID-19[57](index=57&type=chunk) - The company emphasizes a culture of integrity, customer focus, commitment, connection, and driving change. Diversity, Inclusion, and Belonging initiatives include a dedicated council, employee resource groups, and leadership commitments (LZB4ALL)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - La-Z-Boy is committed to employee health and safety, recognized by the National Safety Council. In response to COVID-19, it implemented safety protocols, conducted testing/vaccination clinics, and offered a **$100 vaccine support payment** to U.S.-based employees[61](index=61&type=chunk)[62](index=62&type=chunk) - The company has a history of community giving through the La-Z-Boy Foundation, local involvement, disaster relief, and its signature charity, Ronald McDonald House Charities. During COVID-19, it donated masks, medical gowns, and furniture to healthcare workers[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) [Internet Availability](index=15&type=section&id=1.13%20Internet%20Availability) - SEC filings (10-K, 10-Q, 8-K, proxy statements) and amendments are available free of charge on the company's website (www.la-z-boy.com) and the SEC's website (www.sec.gov)[66](index=66&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A%20Risk%20Factors) The company faces significant risks, including ongoing adverse impacts from the COVID-19 pandemic on operations, supply chains, and consumer behavior. Economic downturns, intense competition (especially from online retailers), and the inability to deliver products timely pose threats to sales and profitability. Operational risks include cybersecurity incidents, reliance on IT systems, and fluctuations in raw material costs and availability. International operations are subject to regulatory and trade policy changes, while acquisitions carry impairment risks. The company also faces legal, regulatory, and general risks such as political instability, natural disasters, and the ability to retain key talent - The COVID-19 pandemic has negatively impacted the world economy, global supply chains, and financial markets, leading to disruptions in retail, manufacturing, and distribution operations. The extent of future impact remains highly uncertain[68](index=68&type=chunk)[69](index=69&type=chunk) - Declines in economic conditions, consumer confidence, and spending could negatively impact sales, as furniture purchases are often postponable. While demand increased in FY2021 due to a shift to home furnishings, its duration is unpredictable[70](index=70&type=chunk) - The residential furniture industry is highly competitive and fragmented, with increasing competition from direct-to-consumer and online retailers. Failure to differentiate products or adapt to online purchasing shifts could lead to market share loss[72](index=72&type=chunk)[73](index=73&type=chunk) [Macroeconomic, Market and Strategic Risk Factors](index=16&type=section&id=1.14%20Macroeconomic,%20Market%20and%20Strategic%20Risk%20Factors) - The COVID-19 pandemic has caused significant disruptions, including temporary closures, supply chain issues, and uncertainty regarding consumer behavior and spending, which could continue to adversely affect financial performance[68](index=68&type=chunk)[69](index=69&type=chunk) - Economic downturns, changes in consumer confidence, interest rates, housing market conditions, and unemployment rates can negatively impact sales of discretionary items like furniture[70](index=70&type=chunk) - High product backlog and production capacity limitations, exacerbated by COVID-19, pose a risk of delayed product delivery, potentially damaging reputation and leading to lost sales[71](index=71&type=chunk) - Intense competition from traditional, online, and direct-to-consumer retailers, coupled with a potential shift in consumer preference towards online purchasing, could lead to market share loss and reduced profitability[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Operational Risk Factors](index=17&type=section&id=1.15%20Operational%20Risk%20Factors) - Cybersecurity incidents (e.g., phishing, malware, ransomware) pose risks of sensitive data breaches, business disruptions, and reputational harm. Evolving privacy regulations (GDPR, CCPA) increase compliance costs and potential liabilities[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - Extensive reliance on IT systems for transactions and management means disruptions (power outages, cyber-attacks, natural disasters) could adversely affect business operations, production times, and customer satisfaction[80](index=80&type=chunk)[81](index=81&type=chunk) - Failure to maintain and enhance brands or respond to changes in consumer tastes and trends in a timely manner could negatively impact business and results of operations[83](index=83&type=chunk) - Fluctuations in raw material prices (wood, fabrics, leathers, foam, steel), availability, and quality, especially from single or limited suppliers, could cause production delays and increased costs, potentially impacting earnings if price increases cannot be passed on[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - Changes in the availability and cost of foreign sourcing, economic uncertainty in international operating countries (Mexico, Thailand, UK), and reliance on Asian suppliers for imported products could disrupt supply chains and affect business[87](index=87&type=chunk) - Changes in domestic or international regulatory environments or trade policies, including new or increased duties, tariffs, and trade limitations, could adversely affect costs, sales, and results of operations[88](index=88&type=chunk) - Failure of acquired retail markets or other new markets to achieve anticipated growth and profitability could lead to impairment charges for long-lived assets, goodwill, or other intangible assets[89](index=89&type=chunk)[90](index=90&type=chunk) - The company may require external funding, which might not be available at required levels or could be more costly, negatively affecting expenses and results of operations. Availability under the revolving credit facility fluctuates with borrowing base calculations[91](index=91&type=chunk)[92](index=92&type=chunk) - Inability to collect amounts owed from customers, especially if economic conditions worsen, could adversely affect sales, earnings, financial condition, and liquidity[93](index=93&type=chunk) [Legal and Regulatory Risk Factors](index=22&type=section&id=1.16%20Legal%20and%20Regulatory%20Risk%20Factors) - International operations are subject to U.S. and foreign laws and regulations (e.g., anti-bribery, export controls). Violations could result in civil or criminal penalties and significantly adverse effects on business[94](index=94&type=chunk) - The company is exposed to product liability and other claims, or product recalls, which could lead to significant expenses, penalties, and damage to brands and reputation. Insurance may not fully cover all potential losses[95](index=95&type=chunk)[96](index=96&type=chunk) [General Risk Factors](index=22&type=section&id=1.17%20General%20Risk%20Factors) - Operations are subject to risks from unsettled political conditions, natural/man-made disasters, acts of war, terrorism, organized crime, and public health concerns, which could disrupt operations and reduce sales or earnings[97](index=97&type=chunk) - Financial statements rely on assumptions, judgments, and estimates (e.g., inventories, goodwill, intangible assets, liabilities, income taxes). Inaccurate estimates, especially regarding future performance, could materially impact financial results[98](index=98&type=chunk)[99](index=99&type=chunk) - Inability to recruit and retain key employees and skilled workers in a competitive labor market, or unexpected loss of such employees, could negatively impact operations. Work-from-home policies may affect productivity and increase cyber risks[100](index=100&type=chunk)[101](index=101&type=chunk) - Changes in U.S. or international income tax laws and regulations, or the outcome of tax audits, could adversely affect the effective income tax rate and business results[102](index=102&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[103](index=103&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) As of April 24, 2021, La-Z-Boy Incorporated operated approximately **12.1 million square feet** of active manufacturing, warehousing, distribution, office, showroom, and retail facilities globally, with an additional **0.1 million square feet** of idle facilities. The company owns all domestic plants and its world headquarters, while leasing most retail stores, regional distribution centers, and Mexican manufacturing facilities Property Square Footage by Segment (April 24, 2021) | Segment | Square Feet (Millions) | | :---------------- | :--------------------- | | Wholesale | 8.6 | | Retail | 3.2 | | Corporate & Other | 0.3 | | **Total Active** | **12.1** | | Idle facilities | 0.1 | | **Total Property**| **12.2** | - Active facilities are located across the United States, Mexico, Thailand, Canada, China, Hong Kong, and the United Kingdom[104](index=104&type=chunk) - The company owns all domestic plants and its world headquarters building, while leasing the majority of its retail stores, regional distribution centers, certain office space, and manufacturing facilities in Mexico[104](index=104&type=chunk) [Item 3. Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) La-Z-Boy Incorporated is involved in various legal proceedings in the ordinary course of business but does not anticipate any additional material losses beyond what has already been expensed for probable and reasonably estimable matters - The company is involved in various legal proceedings and environmental clean-up sites arising in the ordinary course of business[105](index=105&type=chunk) - Based on current facts and past experience, the company has recorded expenses for probable and reasonably estimable losses and does not believe any additional material losses are probable[105](index=105&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to La-Z-Boy Incorporated - This item is not applicable[106](index=106&type=chunk) [Information About Our Executive Officers](index=25&type=section&id=Information%20About%20Our%20Executive%20Officers) This section lists the names, ages, and current positions of La-Z-Boy Incorporated's executive officers, including their prior roles if held for less than five years, noting that all serve at the pleasure of the board of directors Executive Officers and Positions (as of April 25, 2021) | Name | Age | Current Position | | :------------------- | :-- | :--------------------------------------------- | | Melinda D. Whittington | 54 | President and Chief Executive Officer | | Robert G. Lucian | 58 | Senior Vice President and Chief Financial Officer | | Darrell D. Edwards | 57 | Senior Vice President and Chief Operating Officer | | Otis S. Sawyer | 63 | Senior Vice President and President, La-Z-Boy Portfolio Brands | | Raphael Z. Richmond | 51 | Vice President, General Counsel and Chief Compliance Officer | [PART II](index=26&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) La-Z-Boy's common stock trades on the NYSE under 'LZB'. The company had **1,816 registered shareholders** as of June 8, 2021. The board of directors reinstated and increased quarterly dividends in fiscal 2021 after a temporary suspension due to COVID-19. Share repurchases also resumed, with **$44.2 million** spent to buy **1.1 million shares** in fiscal 2021 - The company's common stock trades on the New York Stock Exchange under the symbol 'LZB'[111](index=111&type=chunk) - As of June 8, 2021, there were approximately **1,816 registered holders** of record of La-Z-Boy's common stock[111](index=111&type=chunk) [Dividend Information](index=26&type=section&id=2.1%20Dividend%20Information) - The payment of future cash dividends is at the discretion of the board of directors, depending on earnings, capital requirements, operating/financial condition, and credit agreement availability[110](index=110&type=chunk) - In Q4 FY2020, the June quarterly dividend was eliminated. In Q2 FY2021, a **$0.07/share dividend** was reinstated (**50% of prior amount**). In Q3 FY2021, it returned to **$0.14/share**. In Q4 FY2021, it increased to **$0.15/share** (**7% increase**)[28](index=28&type=chunk)[172](index=172&type=chunk) [Shareholders and Stock Performance](index=26&type=section&id=2.2%20Shareholders%20and%20Stock%20Performance) Cumulative Total Return ($100 Investment on April 30, 2016) | Company/Index/Market | 4/30/2016 | 4/29/2017 | 4/28/2018 | 4/27/2019 | 4/25/2020 | 4/24/2021 | | :----------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | :-------- | | La-Z-Boy Incorporated | $100.00 | $109.50 | $116.87 | $131.56 | $86.95 | $180.07 | | S&P 500 Composite Index | $100.00 | $117.92 | $134.66 | $151.27 | $148.91 | $223.11 | | Dow Jones U.S. Furnishings Index | $100.00 | $112.05 | $99.36 | $83.44 | $54.89 | $137.50 | [Issuer Purchases of Equity Securities](index=26&type=section&id=2.3%20Issuer%20Purchases%20of%20Equity%20Securities) - The board of directors authorized the repurchase of common stock. As of April 24, 2021, **3.4 million shares** remained available for purchase under this authorization, which has no expiration date[114](index=114&type=chunk)[116](index=116&type=chunk)[168](index=168&type=chunk) - In fiscal 2021, the company spent **$44.2 million** to purchase **1.1 million shares**. Share repurchases were temporarily halted in Q1 and Q2 FY2021 due to COVID-19 but resumed in Q3 FY2021[114](index=114&type=chunk)[168](index=168&type=chunk) Q4 Fiscal 2021 Share Repurchases | Fiscal Period | Total Shares Purchased (Thousands) | Average Price Paid Per Share | | :-------------------------------- | :--------------------------------- | :--------------------------- | | Fiscal February (Jan 24 - Feb 27) | 376 | $39.85 | | Fiscal March (Feb 28 - Mar 27) | 681 | $41.55 | | Fiscal April (Mar 28 - Apr 24) | 1 | $42.76 | | **Fiscal Fourth Quarter 2021** | **1,058** | **$40.95** | [Recent Sales of Unregistered Securities](index=27&type=section&id=2.4%20Recent%20Sales%20of%20Unregistered%20Securities) There were no sales of unregistered securities during fiscal year 2021 - No sales of unregistered securities occurred during fiscal year 2021[117](index=117&type=chunk) [Item 6. Selected Financial Data](index=27&type=section&id=Item%206.%20Selected%20Financial%20Data) The company has applied the amendment to Regulation S-K Item 301, which became effective on February 10, 2021, regarding selected financial data - The company applied the amendment to Regulation S-K Item 301, effective February 10, 2021[118](index=118&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's Discussion and Analysis provides an overview of La-Z-Boy's business, strategic initiatives, and financial performance for fiscal year 2021 compared to 2020. The company experienced a **1.8% increase** in consolidated sales and a **15.1% increase** in operating income, driven by strong demand in the latter half of the year despite initial COVID-19 disruptions. Key financial highlights include increased cash from operations, significant customer deposit growth, and strategic capital expenditures. The discussion also covers segment-specific performance, liquidity, capital resources, and critical accounting estimates - The company's strategic initiatives focus on driving profitable sales growth through branded distribution channels, company-owned retail expansion, multi-channel distribution, on-trend and innovative products, and a multi-faceted online strategy (including Joybird)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) Consolidated Financial Performance (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | % Change | | :-------------- | :------------------- | :------------------- | :------- | | Sales | $1,734,244 | $1,703,982 | 1.8% | | Operating income| $136,736 | $118,762 | 15.1% | | Operating margin| 7.9% | 7.0% | +0.9 pp | - Consolidated sales increased **1.8%** in fiscal 2021, driven by higher sales in the Retail segment and Joybird, partially offset by a slight decline in the Wholesale segment. This growth occurred despite initial COVID-19 impacts and temporary closures[129](index=129&type=chunk) [Introduction to Business and Strategy](index=27&type=section&id=2.5%20Introduction%20to%20Business%20and%20Strategy) - La-Z-Boy is the **leading global producer** of reclining chairs and the **second-largest** residential furniture manufacturer/distributor in the U.S., with its retail network being the **third-largest** single-branded furniture retailer[120](index=120&type=chunk) - The company's strategic initiatives include growing branded distribution channels (La-Z-Boy Furniture Galleries, Comfort Studio locations), expanding company-owned retail, leveraging its multi-channel network, promoting on-trend and innovative products (iClean™, Conserve™, duo™), and enhancing its online strategy (Joybird, la-z-boy.com)[124](index=124&type=chunk)[125](index=125&type=chunk) - In Q1 FY2021, the company revised its reportable segments, aggregating Upholstery and Casegoods into the Wholesale segment, while Retail and Corporate & Other remained unchanged[125](index=125&type=chunk) [Impact of COVID-19 on MD&A](index=29&type=section&id=2.6%20Impact%20of%20COVID-19%20on%20MD&A) The discussion of COVID-19's impact on the business and financial condition is referenced to the detailed section in Part I, Item 1 of the report - For a detailed discussion of COVID-19's impact on the business and financial condition, refer to the 'COVID-19 Impact' section in Part I, Item 1 of this report[126](index=126&type=chunk) [Overall Results of Operations (FY2021 vs. FY2020)](index=29&type=section&id=2.7%20Overall%20Results%20of%20Operations%20(FY2021%20vs.%20FY2020)) Consolidated Financial Performance (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | % Change | | :-------------- | :------------------- | :------------------- | :------- | | Sales | $1,734,244 | $1,703,982 | 1.8% | | Operating income| $136,736 | $118,762 | 15.1% | | Operating margin| 7.9% | 7.0% | +0.9 pp | - Sales increased **1.8%** (**$30.3 million**) in FY2021, driven by the Retail segment and Joybird, despite initial COVID-19 disruptions and manufacturing challenges. Strong written order trends and increased manufacturing capacity contributed to higher sales[129](index=129&type=chunk) - Operating margin increased by **90 basis points** in FY2021. Gross margin improved by **40 basis points** due to sales mix shift towards higher-margin Retail and Joybird, and Joybird's operational improvements. SG&A as a percentage of sales increased by **100 basis points**, primarily due to higher incentive compensation and the absence of a prior-year gain on asset sale, partially offset by cost reduction initiatives and lower bad debt expense[130](index=130&type=chunk)[131](index=131&type=chunk)[138](index=138&type=chunk) - The absence of a **$26.9 million goodwill impairment charge** related to Joybird in FY2020 contributed **150 basis points** to the operating margin increase in FY2021[138](index=138&type=chunk) [Wholesale Segment Performance](index=32&type=section&id=2.8%20Wholesale%20Segment%20Performance) Wholesale Segment Financial Performance (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | % Change | | :-------------- | :------------------- | :------------------- | :------- | | Sales | $1,301,298 | $1,310,294 | (0.7)% | | Operating income| $134,312 | $142,440 | (5.7)% | | Operating margin| 10.3% | 10.9% | -0.6 pp | - Wholesale segment sales declined **0.7%** (**$9.0 million**) in FY2021, initially impacted by COVID-19 closures. Despite challenges, delivered unit volume was higher than FY2020, benefiting from increased production capacity and favorable pricing actions[136](index=136&type=chunk) - Operating margin decreased by **60 basis points**. Gross margin declined by **200 basis points**, primarily due to the absence of a **$16.3 million tariff rebate benefit** from FY2020 and increased production costs. SG&A as a percentage of sales decreased by **140 basis points** due to disciplined expense management and lower bad debt expense[137](index=137&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk) [Retail Segment Performance](index=34&type=section&id=2.9%20Retail%20Segment%20Performance) Retail Segment Financial Performance (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | % Change | | :-------------- | :------------------- | :------------------- | :------- | | Sales | $612,906 | $598,554 | 2.4% | | Operating income| $46,724 | $48,256 | (3.2)% | | Operating margin| 7.6% | 8.1% | -0.5 pp | - Retail segment sales increased **2.4%** (**$14.4 million**) in FY2021. A **0.8% decline** in delivered same-store sales was offset by an **$18.8 million benefit** from the acquisition of Seattle-based stores. Written same-store sales were up **33.9%** for the full year[142](index=142&type=chunk) - Operating margin decreased by **50 basis points**. Gross margin remained flat. SG&A as a percentage of sales increased by **50 basis points** due to higher selling expenses (commissions on increased written sales) and higher fixed costs relative to sales, partially offset by lower advertising spend[143](index=143&type=chunk)[144](index=144&type=chunk) [Corporate and Other Segment Performance](index=35&type=section&id=2.10%20Corporate%20and%20Other%20Segment%20Performance) Corporate and Other Segment Financial Performance (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | % Change | | :-------------- | :------------------- | :------------------- | :------- | | Sales | $127,370 | $89,092 | 43.0% | | Eliminations | $(307,330) | $(293,958) | 4.5% | | Operating loss | $(44,300) | $(71,934) | (38.4)% | - Sales increased **$38.3 million** (**43.0%**) in FY2021, primarily driven by a **$33.9 million increase** from Joybird, which contributed **$109.2 million in sales**. Joybird's written sales were up **64.5%** due to strong demand, marketing, and website improvements[146](index=146&type=chunk) - Operating loss decreased by **$27.6 million** (**38.4%**) in FY2021. This improvement was mainly due to the absence of a **$26.9 million goodwill impairment charge** for Joybird in FY2020 and significant improvements in Joybird's operating profit, partially offset by a **$14.1 million charge** to increase the fair value of the Joybird contingent consideration liability[148](index=148&type=chunk)[149](index=149&type=chunk) [Fourth Quarter FY2021 vs. FY2020 Performance](index=35&type=section&id=2.11%20Fourth%20Quarter%20FY2021%20vs.%20FY2020%20Performance) Consolidated Financial Performance (Q4 FY2021 vs. Q4 FY2020) | Metric | Q4 FY2021 ($ Thousands) | Q4 FY2020 ($ Thousands) | | :---------------------- | :---------------------- | :---------------------- | | Consolidated sales | $519,470 | $367,281 | | Consolidated operating income | $50,058 | $13,426 | | Consolidated operating margin | 9.6% | 3.7% | - Consolidated sales increased **41.4%** to **$519.5 million**, and operating income rose to **$50.1 million** (up **$36.6 million**), with operating margin improving to **9.6%** from **3.7%** in the prior-year quarter[151](index=151&type=chunk) - Wholesale segment sales increased **39.8%** to **$384.0 million**, primarily due to lower volume in the prior year from COVID-19 shutdowns. Operating margin decreased to **10.2%** from **11.0%** due to lower gross margin (absence of tariff rebate, rising costs) partially offset by improved SG&A[152](index=152&type=chunk) - Retail segment sales increased **38.6%** to **$193.5 million**, driven by a **$46.8 million increase** in delivered same-store sales and **$7.4 million** from acquired Seattle stores. Operating margin improved to **12.2%** from **10.7%** due to significant sales increase relative to SG&A expenses[153](index=153&type=chunk) - Joybird sales (Corporate & Other) increased **144%** to **$37.7 million**. Operating loss in Corporate & Other decreased **$19.3 million**, mainly due to the absence of the **$26.9 million goodwill impairment charge** from Q4 FY2020 and improved operating results for Joybird[154](index=154&type=chunk) [Interest Expense and Income](index=37&type=section&id=2.12%20Interest%20Expense%20and%20Income) Interest Expense and Income (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | | :-------------- | :------------------- | :------------------- | | Interest expense| $(1,390) | $(1,291) | | Interest income | $1,101 | $2,785 | - Interest expense was **$0.1 million higher** in fiscal 2021, while interest income was **$1.7 million lower**, primarily due to lower interest rates on interest-bearing investments[155](index=155&type=chunk) [Pension Termination Refund](index=38&type=section&id=2.13%20Pension%20Termination%20Refund) In fiscal 2020, the company received a **$1.9 million** pre-tax refund from the settlement of its defined-benefit pension plan, which was recognized in the consolidated statement of income - A pre-tax refund of **$1.9 million** was received in Q2 FY2020 from the settlement of the defined-benefit pension plan, recognized in the consolidated statement of income[156](index=156&type=chunk) [Other Income (Expense), Net](index=38&type=section&id=2.14%20Other%20Income%20(Expense),%20Net) Other Income (Expense), Net (FY2021 vs. FY2020) | Metric | FY2021 ($ Thousands) | FY2020 ($ Thousands) | | :---------------------- | :------------------- | :------------------- | | Other income (expense), net | $9,466 | $(6,983) | - Other income (expense), net, was **$9.5 million of income** in FY2021, primarily due to a **$5.2 million benefit** from CARES Act payroll tax credits and unrealized gains on investments[157](index=157&type=chunk) - In FY2020, it was **$7.0 million of expense**, mainly due to a **$6.0 million impairment** of an investment in a privately held start-up company and unrealized losses on investments[157](index=157&type=chunk) [Income Taxes](index=38&type=section&id=2.15%20Income%20Taxes) Effective Income Tax Rate (FY2021 vs. FY2020) | Metric | FY2021 | FY2020 | | :----------------- | :----- | :----- | | Effective tax rate | 26.3% | 31.4% | - The effective income tax rate decreased to **26.3%** in FY2021 from **31.4%** in FY2020. The FY2020 rate was impacted by a **$4.0 million net tax expense** from a non-deductible goodwill impairment and **$1.3 million tax expense** from undistributed foreign earnings[158](index=158&type=chunk)[159](index=159&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=2.16%20Liquidity%20and%20Capital%20Resources) La-Z-Boy's liquidity sources, including cash, investments, and cash from operations, are deemed adequate to meet short-term and long-term needs. The company significantly increased cash and equivalents in fiscal 2021, repaid its revolving credit facility, and plans for increased capital expenditures in fiscal 2022. Strategic actions taken in response to COVID-19, such as workforce reductions and dividend adjustments, have been largely reversed as financial performance improved - Sources of liquidity include cash and equivalents, short-term and long-term investments, cash from operations, and amounts available under the credit facility[160](index=160&type=chunk) Cash and Equivalents & Investments | Metric | April 24, 2021 ($ Millions) | April 25, 2020 ($ Millions) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Cash, cash equivalents and restricted cash | $394.7 | $263.5 | | Investments to enhance returns on cash | $32.5 | $28.6 | - The revolving credit facility had zero borrowings outstanding and **$61.7 million in excess availability** as of April 24, 2021. The **$75.0 million** proactively borrowed in Q4 FY2020 was fully repaid in Q1 and Q2 FY2021[161](index=161&type=chunk) Capital Expenditures | Fiscal Year | Amount ($ Millions) | | :---------- | :------------------ | | FY2021 | $38.0 | | FY2020 | $46.0 | | FY2022 (Expected) | $55 - $65 | - Capital expenditures in FY2021 focused on manufacturing machinery, retail store improvements, new production capacity in Mexico, and plant upgrades in Dayton, Tennessee[162](index=162&type=chunk) [Operating Activities Cash Flow](index=40&type=section&id=2.16.1%20Operating%20Activities%20Cash%20Flow) Net Cash Provided by Operating Activities | Fiscal Year | Amount ($ Thousands) | | :---------- | :------------------- | | FY2021 | $309,917 | | FY2020 | $164,242 | - Net cash provided by operating activities increased significantly in FY2021, primarily due to a **$140.0 million increase** in customer deposits driven by higher written Retail and Joybird sales, and net income[171](index=171&type=chunk) - In FY2020, cash from operations was mainly attributable to net income and a **$29.7 million decrease** in receivables due to lower sales volume from COVID-19, partially offset by lower accrued compensation costs[172](index=172&type=chunk)[173](index=173&type=chunk) [Investing Activities Cash Flow](index=41&type=section&id=2.16.2%20Investing%20Activities%20Cash%20Flow) Net Cash Used for Investing Activities | Fiscal Year | Amount ($ Thousands) | | :---------- | :------------------- | | FY2021 | $(40,703) | | FY2020 | $(33,915) | - Net cash used for investing activities was **$40.7 million** in FY2021, primarily for **$38.0 million in capital expenditures** and **$2.0 million** for the acquisition of Seattle-based stores[174](index=174&type=chunk) - In FY2020, **$33.9 million** was used, mainly for **$46.0 million in capital expenditures**, partially offset by **$11.3 million in proceeds** from asset disposals (e.g., Redlands facility sale)[174](index=174&type=chunk) [Financing Activities Cash Flow](index=41&type=section&id=2.16.3%20Financing%20Activities%20Cash%20Flow) Net Cash Provided By (Used For) Financing Activities | Fiscal Year | Amount ($ Thousands) | | :---------- | :------------------- | | FY2021 | $(141,054) | | FY2020 | $2,558 | - Net cash used for financing activities was **$141.1 million** in FY2021, primarily due to **$75.0 million in revolving credit facility payments**, **$44.2 million for common stock repurchases**, **$16.5 million in quarterly dividends**, and **$8.5 million in dividends** to joint venture minority partners[175](index=175&type=chunk) - In FY2020, net cash provided was **$2.6 million**, including a **$75.0 million draw** from the credit facility, partially offset by **$43.4 million for stock repurchases** and **$25.1 million in dividends**[176](index=176&type=chunk) [Exchange Rate Changes Impact on Cash](index=41&type=section&id=2.16.4%20Exchange%20Rate%20Changes%20Impact%20on%20Cash) Effect of Exchange Rate Changes on Cash | Fiscal Year | Amount ($ Thousands) | | :---------- | :------------------- | | FY2021 | $3,015 | | FY2020 | $(1,144) | - Exchange rate changes increased cash, cash equivalents, and restricted cash by **$3.0 million** in FY2021, impacting balances in Canada, Thailand, and the United Kingdom[177](index=177&type=chunk) [Contractual Obligations](index=41&type=section&id=2.16.5%20Contractual%20Obligations) Contractual Obligations as of April 24, 2021 ($ Thousands) | Obligation Type | Total | Less than 1 Year | 1 - 3 Years | 4 - 5 Years | More than 5 Years | | :------------------------ | :-------- | :--------------- | :---------- | :---------- | :---------------- | | Operating lease obligations | $403,394 | $78,079 | $128,154 | $86,426 | $110,735 | | Purchase obligations | $212,630 | $212,630 | — | — | — | | Future guaranteed payments| $25,445 | $15,445 | $10,000 | — | — | | Contingent consideration | $14,100 | $10,000 | $4,100 | — | — | | Finance lease obligations | $618 | $130 | $260 | $228 | — | | **Total** | **$656,187**| **$316,284** | **$142,514**| **$86,654** | **$110,735** | - The company does not expect continuing compliance with environmental statutes to materially affect capital expenditures, earnings, competitive position, or liquidity[180](index=180&type=chunk) [Unaudited Quarterly Financial Information](index=42&type=section&id=2.17%20Unaudited%20Quarterly%20Financial%20Information) This section provides unaudited quarterly financial data for fiscal years 2021 and 2020, including sales, gross profit, operating income, net income, and diluted EPS, illustrating the quarterly performance trends Unaudited Quarterly Financial Information Fiscal 2021 ($ Thousands, except per share data) | Fiscal Quarter Ended | 7/25/2020 | 10/24/2020 | 1/23/2021 | 4/24/2021 | | :------------------- | :-------- | :--------- | :-------- | :-------- | | Sales | $285,458 | $459,120 | $470,196 | $519,470 | | Gross profit | $116,363 | $200,555 | $201,252 | $222,090 | | Operating income | $4,325 | $47,939 | $34,414 | $50,058 | | Net income attributable to La-Z-Boy Incorporated | $4,798 | $34,935 | $29,232 | $37,496 | | Diluted EPS | $0.10 | $0.75 | $0.62 | $0.81 | Unaudited Quarterly Financial Information Fiscal 2020 ($ Thousands, except per share data) | Fiscal Quarter Ended | 7/27/2019 | 10/26/2019 | 1/25/2020 | 4/25/2020 | | :------------------- | :-------- | :--------- | :-------- | :-------- | | Sales | $413,633 | $447,212 | $475,856 | $367,281 | | Gross profit | $167,712 | $182,389 | $199,638 | $171,706 | | Operating income | $23,422 | $29,601 | $52,313 | $13,426 | | Net income attributable to La-Z-Boy Incorporated | $18,069 | $22,593 | $34,512 | $2,295 | | Diluted EPS | $0.38 | $0.48 | $0.74 | $0.05 | [Critical Accounting Estimates](index=42&type=section&id=2.18%20Critical%20Accounting%20Estimates) The company's financial statements rely on critical accounting estimates that require significant management judgment and assumptions, particularly for indefinite-lived intangible assets, goodwill, amortizable intangible assets, product warranties, and stock-based compensation. These estimates are based on current facts, historical experience, and future projections, with ongoing comparisons to actual experience to minimize significant adjustments [Indefinite-Lived Intangible Assets and Goodwill](index=43&type=section&id=2.18.1%20Indefinite-Lived%20Intangible%20Assets%20and%20Goodwill) - Indefinite-lived intangible assets include the American Drew trade name and reacquired rights to operate La-Z-Boy Furniture Galleries stores[187](index=187&type=chunk) - Goodwill relates to acquisitions of La-Z-Boy Furniture Galleries stores, the UK/Ireland wholesale business, and Joybird. Reporting units for goodwill are the Retail operating segment, UK/Ireland wholesale business, and Joybird[187](index=187&type=chunk) - Impairment tests are performed annually (Q4) or more frequently if circumstances indicate impairment. The qualitative 'Step 0' assessment is used first, followed by a quantitative test if necessary, using discounted cash flow models and relief from royalty methods[187](index=187&type=chunk) [Amortizable Intangible Assets](index=43&type=section&id=2.18.2%20Amortizable%20Intangible%20Assets) - Amortizable intangible assets include acquired customer relationships from the UK/Ireland wholesale business and the Joybird trade name[188](index=188&type=chunk) - These assets are tested for impairment if events or changes in circumstances indicate impairment, using the multi-period excess earnings method and relief from royalty method[188](index=188&type=chunk) [Product Warranties](index=43&type=section&id=2.18.3%20Product%20Warranties) - A liability for product warranties is accrued when revenue is recognized, estimated based on historical claim experience and periodically adjusted. Estimates include repair costs (materials, labor, overhead) and delivery costs[189](index=189&type=chunk) [Stock-Based Compensation](index=43&type=section&id=2.18.4%20Stock-Based%20Compensation) - Equity-based awards are measured at fair value on the grant date and expensed over the vesting period. Liability-based awards are remeasured at fair value at each reporting period end[190](index=190&type=chunk)[191](index=191&type=chunk) - Fair value of option grants is estimated using a Black-Scholes model, while performance awards with market conditions use a Monte Carlo valuation model[192](index=192&type=chunk)[193](index=193&type=chunk) [Recent Accounting Pronouncements](index=45&type=section&id=2.19%20Recent%20Accounting%20Pronouncements) The company adopted ASU 2016-13 (Credit Losses) and ASU 2020-04 (Reference Rate Reform) in fiscal 2021, neither of which had a material impact. Future adoptions (ASU 2018-14, ASU 2019-12, ASU 2020-01) are also not expected to have a material impact - ASU 2016-13 (Credit Losses) and ASU 2020-04 (Reference Rate Reform) were adopted in fiscal 2021 with no material impact[274](index=274&type=chunk)[275](index=275&type=chunk) - ASU 2018-14 (Defined Benefit Plans), ASU 2019-12 (Income Taxes), and ASU 2020-01 (Investments) are not yet adopted but are not expected to have a material impact[276](index=276&type=chunk)[277](index=277&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) La-Z-Boy is exposed to market risks from changes in foreign currency values, commodity prices, and transportation costs. While no variable rate borrowings existed in FY2021, future variable debt could expose the company to interest rate changes. The company believes its competitors would experience similar impacts from these market risks - The company is exposed to market risk from changes in foreign currency values, primarily related to operations in Mexico, Canada, the United Kingdom, and Thailand[196](index=196&type=chunk) - Exposure to market risk also includes commodity and transportation costs, particularly for steel, wood, and polyurethane foam. Price increases may be passed to customers to offset these costs[197](index=197&type=chunk) - Market risk includes duties and tariffs on imported raw materials, components, and finished goods, as well as exported finished goods. The company may increase prices to offset these costs[198](index=198&type=chunk) - While there were no variable rate borrowings in FY2021, future variable rate debt could expose the company to interest rate changes, though a one percentage point change is not expected to have a material impact[195](index=195&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents La-Z-Boy's audited consolidated financial statements for fiscal years 2021, 2020, and 2019, including the statements of income, comprehensive income, balance sheets, cash flows, and changes in equity. It also includes management's reports on financial information and internal control, the independent auditor's report, critical audit matters, and detailed notes to the financial statements covering accounting policies, acquisitions, segment information, and other financial disclosures - Management is responsible for the consistency, integrity, and preparation of the financial information, maintaining comprehensive internal control systems[199](index=199&type=chunk)[200](index=200&type=chunk) - The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, who issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of April 24, 2021[202](index=202&type=chunk)[205](index=205&type=chunk) [Management's Report on Financial Information and Internal Control](index=46&type=section&id=2.20%20Management's%20Report%20on%20Financial%20Information%20and%20Internal%20Control) - Management is responsible for the consolidated financial statements and maintaining adequate internal control over financial reporting, concluding that internal control was effective as of April 24, 2021[199](index=199&type=chunk)[203](index=203&type=chunk) - The Audit Committee, comprised of independent directors, oversees internal control systems, accounting practices, financial reporting, and audits[201](index=201&type=chunk) [Report of Independent Registered Public Accounting Firm](index=47&type=section&id=2.21%20Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - PricewaterhouseCoopers LLP audited the consolidated financial statements and internal control over financial reporting, issuing an unqualified opinion that they present fairly, in all material respects, the financial position and results of operations[204](index=204&type=chunk)[205](index=205&type=chunk) - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement and evaluating accounting principles and estimates[208](index=208&type=chunk)[209](index=209&type=chunk) [Critical Audit Matters](index=48&type=section&id=2.22%20Critical%20Audit%20Matters) The critical audit matter identified was the accrued product warranties for the Wholesale segment, due to the significant management judgment in estimation and the high degree of auditor judgment required to evaluate the methodology and historical cost inputs - The critical audit matter identified is the accrued product warranties for the Wholesale segment, which totaled **$23.6 million** as of April 24, 2021[214](index=214&type=chunk) - This matter is critical due to significant management judgment in developing the accrual and a high degree of auditor judgment in evaluating the estimation methodology and the applicability of historical material and labor costs[215](index=215&type=chunk) [Consolidated Financial Statements](index=49&type=section&id=2.23%20Consolidated%20Financial%20Statements) This section provides the full consolidated financial statements, including the Statement of Income, Comprehensive Income, Balance Sheet, Cash Flows, and Changes in Equity for the specified fiscal years, offering a comprehensive view of the company's financial performance and position [Consolidated Statement of Income](index=49&type=section&id=2.23.1%20Consolidated%20Statement%20of%20Income) Consolidated Statement of Income (FY2021, FY2020, FY2019 - $ Thousands, except per share data) | Metric | 4/24/2021 | 4/25/2020 | 4/27/2019 | | :---------------------------------------- | :---------- | :---------- | :---------- | | Sales | $1,734,244 | $1,703,982 | $1,745,401 | | Gross profit | $740,260 | $721,445 | $702,570 | | Operating income | $136,736 | $118,762 | $129,674 | | Income before income taxes | $145,913 | $115,173 | $95,327 | | Net income attributable to La-Z-Boy Incorporated | $106,461 | $77,469 | $68,574 | | Basic EPS | $2.31 | $1.67 | $1.46 | | Diluted EPS | $2.30 | $1.66 | $1.44 | [Consolidated Statement of Comprehensive Income](index=50&type=section&id=2.23.2%20Consolidated%20Statement%20of%20Comprehensive%20Income) Consolidated Statement of Comprehensive Income (FY2021, FY2020, FY2019 - $ Thousands) | Metric | 4/24/2021 | 4/25/2020 | 4/27/2019 | | :---------------------------------------- | :---------- | :---------- | :---------- | | Net income | $107,529 | $78,984 | $70,141 | | Total other comprehensive income (loss) | $5,965 | $(3,209) | $23,240 | | Total comprehensive income attributable to La-Z-Boy Incorporated | $111,892 | $74,526 | $91,948 | [Consolidated Balance Sheet](index=51&type=section&id=2.23.3%20Consolidated%20Balance%20Sheet) Consolidated Balance Sheet (April 24, 2021 vs. April 25, 2020 - $ Thousands) | Metric | 4/24/2021 | 4/25/2020 | | :---------------------------------------- | :---------- | :---------- | | Cash and equivalents | $391,213 | $261,553 | | Total current assets | $926,160 | $626,326 | | Total assets | $1,786,322 | $1,434,889 | | Total current liabilities | $611,670 | $350,169 | | Total La-Z-Boy Incorporated shareholders' equity | $773,498 | $700,753 | | Total liabilities and equity | $1,786,322 | $1,434,889 | [Consolidated Statement of Cash Flows](index=52&type=section&id=2.23.4%20Consolidated%20Statement%20of%20Cash%20Flows) Consolidated Statement of Cash Flows (FY2021, FY2020, FY2019 - $ Thousands) | Metric | 4/24/2021 | 4/25/2020 | 4/27/2019 | | :---------------------------------------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $309,917 | $164,242 | $150,745 | | Net cash used for investing activities | $(40,703) | $(33,915) | $(121,692) |\n| Net cash used for financing activities | $(141,054) | $2,558 | $(33,662) | | Change in cash, cash equivalents and restricted cash | $131,175 | $131,741 | $(5,084) | | Cash, cash equivalents and restricted cash at end of period | $394,703 | $263,528 | $131,787 | [Consolidated Statement of Changes in Equity](index=54&type=section&id=2.23.5%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Consolidated Statement of Changes in Equity (April 24, 2021 - $ Thousands) | Metric | Common Shares | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non Controlling Interests | Total | | :---------------------------------------- | :------------ | :----------------------------- | :---------------- | :-------------------------------------------- | :------------------------ | :-------- | | Balance at April 25, 2020 | $45,857 | $318,215 | $343,633 | $(6,952) | $15,553 | $716,306 | | Net income | — | — | $106,461 | — | $1,068 | $107,529 | | Other comprehensive income | — | — | — | $5,431 | $534 | $5,965 | | Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | $583 | $10,188 | $(1,741) | — | — | $9,030 | | Purchases of 1,079 shares of common stock | $(1,079) | $(10,426) | $(32,697) | — | — | $(44,202) | | Stock option and restricted stock expense | — | $12,671 | — | — | — | $12,671 | | Dividends declared and paid ($0.36/share) | — | — | $(16,542) | — | $(8,507) | $(25,049) | | Dividends declared not paid ($0.36/share) | — | — | $(104) | — | — | $(104) | | Balance at April 24, 2021 | $45,361 | $330,648 | $399,010 | $(1,521) | $8,648 | $782,146 | [Notes to Consolidated Financial Statements](index=55&type=section&id=2.24%20Notes%20to%20Consolidated%20Financial%20Statements) The Notes to Consolidated Financial Statements provide detailed explanations of La-Z-Boy's accounting policies, significant estimates, and financial statement line items. Key areas covered include revenue recognition, segment information, acquisitions, goodwill and intangible assets, investments, debt, employee benefits, and fair value measurements, offering crucial context for understanding the company's financial position and performance [Note 1: Accounting Policies](index=55&type=section&id=2.24.1%20Note%201:%20Accounting%20Policies) - The consolidated financial statements include La-Z-Boy Incorporated and its majority-owned subsidiaries, with all intercompany transactions eliminated[238](index=238&type=chunk) - Inventories are stated at the lower of cost or market, with approximately **61%** using LIFO (primarily Wholesale segment) and the remainder using FIFO (primarily Retail segment and Joybird)[243](index=243&type=chunk) - Revenue is recognized when control of promised goods or services is transferred to customers, reflecting the consideration expected. This occurs at the point of shipment for wholesale and upon home delivery for retail/online s

L A @ B O Y* Winning in Unprecedented Times; Building for Future Growth March 2021 Forward‐Looking Disclaimer • This presentation contains statements that relate directly or indirectly to our future business, events or financial performance that may constitute forward‐looking statements. • In addition, our representatives may from time to time make oral forward‐ looking statements. Such statements are based on the current expectations and certain assumptions of La‐Z‐Boy management, of which many are beyond ...