La-Z-Boy(US:LZB)2023-06-19 16:00Manufacturing and Operations - La-Z-Boy closed its manufacturing facility in Torreón, Mexico, which accounted for approximately 3% of La-Z-Boy branded production, resulting in charges of $9.2 million for asset impairment and $1.6 million in severance costs[16]. - The company's inventory decreased by $26.9 million as of year-end fiscal 2023 compared to fiscal 2022, aligning production with incoming order trends[36]. - Accounts receivable decreased by $58.2 million as of year-end fiscal 2023, primarily due to lower fourth-quarter sales compared to the previous year[37]. - Customer deposits decreased by $77.5 million as of fiscal year-end 2023, as the company worked down its backlog toward pre-pandemic levels[40]. - The wholesale backlog was $223.1 million as of April 29, 2023, down from $697.2 million as of April 30, 2022, indicating a decrease due to prior backlog deliveries and a slowdown in demand[44]. - As of April 29, 2023, La-Z-Boy employed approximately 10,500 full-time equivalent employees, a decrease from approximately 12,800 employees at the end of fiscal 2022[52]. Financial Performance - Total sales for the fiscal year ended April 29, 2023, were $2,349,433, a slight decrease of 0.3% compared to $2,356,811 in the previous year[211]. - Gross profit increased to $1,008,699, representing a gross margin of approximately 42.9%, up from $915,969 in the prior year[211]. - Net income attributable to La-Z-Boy Incorporated was $150,664, a marginal increase from $150,017 year-over-year, resulting in a diluted net income per share of $3.48[211]. - The company reported a total comprehensive income attributable to La-Z-Boy Incorporated of $150,933, compared to $145,741 in the previous year[214]. - The company’s total assets decreased to $1,866,263 from $1,932,089, indicating a contraction in the asset base[217]. - The company reported a net income of $151.941 million, an increase from $150.664 million in the previous year, representing a growth of 0.85%[222]. - The total comprehensive income for the year ending April 29, 2023, was $952.097 million, compared to $819.622 million in the prior year, indicating a year-over-year increase of approximately 16.1%[222]. Capital Expenditures and Investments - Capital expenditures for the year were $68,812, down from $76,580, suggesting a more cautious investment approach[219]. - The company recognized a $10.3 million impairment charge for one of its investments during fiscal 2023, which was not present in fiscal 2022 or fiscal 2021, highlighting a shift in investment performance[222]. - The company completed the acquisition of a Baton Rouge business for $5.0 million, with total cash paid of $4.9 million[270]. - The company acquired Furnico Furniture Ltd for approximately $13.3 million, with expectations of production synergies and cost savings[275]. Customer and Market Trends - Imported finished goods represented 7% of consolidated sales in fiscal 2023, with 74% of these products sourced from five Asian suppliers[26]. - La-Z-Boy's fiscal 2023 customer mix was approximately 60% proprietary, 10% major dealers, and 30% other independent retailers[41]. - The company expects typical seasonal trends in the furniture industry to return in fiscal 2024 after experiencing atypical patterns due to COVID-19[30]. - La-Z-Boy's competitive position may be negatively affected by a shift in consumer taste towards lower-priced products[46]. Sustainability and Safety - The company has a commitment to sustainability, focusing on reducing emissions, increasing recycling efforts, and conserving water[56]. - La-Z-Boy has been recognized with multiple awards for safety performance, including the Corporate Culture of Safety Award[64]. Internal Controls and Governance - The company maintains comprehensive systems of internal control to provide reasonable assurance that assets are safeguarded and transactions are executed according to established procedures[189]. - PricewaterhouseCoopers LLP audited the effectiveness of the company's internal control over financial reporting as of April 29, 2023, concluding that it was effective[192]. - The board of directors oversees internal control systems primarily through its audit committee, ensuring quality and integrity in financial reporting[190]. Employee Compensation and Benefits - 401(k) Retirement Plan contributions increased to $12,877,000 in fiscal 2023 from $11,763,000 in fiscal 2022, reflecting a growth of 9.5%[311]. - Total stock-based compensation expense for fiscal 2023 was $12,620,000, up from $10,727,000 in fiscal 2022, representing an increase of 17.6%[321]. - The Performance Compensation Retirement Plan's short-term obligation rose to $2,103,000 in fiscal 2023 from $1,922,000 in fiscal 2022, an increase of 9.4%[312]. Cash Flow and Liquidity - Cash provided by operating activities significantly increased to $205,167 from $79,004 in the previous year, indicating improved operational efficiency[219]. - Total cash, cash equivalents, and restricted cash increased to $346.7 million as of April 29, 2023, from $248.9 million a year earlier[280]. - The company has a $200 million unsecured revolving credit facility, with no borrowings outstanding as of April 29, 2023[306].