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La-Z-Boy Reports Fiscal 2020 Third-Quarter Results

Written Same-Store Sales for the La-Z-Boy Furniture Galleries Network® increased 10.5%

MONROE, Mich., Feb. 18, 2020 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (LZB) today reported its operating results for the fiscal 2020 third quarter ended January 25, 2020.

Fiscal 2020 third quarter versus Fiscal 2019 third quarter:

  • Consolidated sales for the third quarter increased 1.8% to $475.9 million
    • La-Z-Boy Furniture Galleries® stores:
      • Written same-store sales for the La-Z-Boy Furniture Galleries® network increased 10.5%, the fourth consecutive quarterly increase
      • Delivered same-store sales for the company-owned Retail segment increased 5.5%, the seventh consecutive quarterly increase
  • Consolidated operating margin:
    • GAAP: 11.0% versus 8.7%
    • Non-GAAP*: 9.4% versus 9.0%
      • Upholstery operating margin:
        – GAAP 13.8% versus 10.3%
        – Non-GAAP 11.2% versus 10.3%
  • Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):
    • GAAP:  $0.74 versus $0.61
    • Non-GAAP*: $0.72 versus $0.63
      • Fiscal 2020 third quarter excludes a $0.02 charge for purchase accounting, a $0.10 impairment charge for one investment in a privately held start-up company, and a net $0.14 benefit related to the company’s supply chain optimization initiative
      • Fiscal 2019 third quarter excludes a $0.02 charge for purchase accounting
    • GAAP and Non-GAAP EPS for the fiscal 2019 third quarter included a one-time $0.07 per share benefit for a redesign of employee benefits programs
  • Cash generated from operating activities increased 46% to $66.1 million on stronger earnings, increased customer deposits and improved working capital management
  • The company returned $18.7 million to shareholders through share purchases and dividends for the quarter

Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy, said, “Our performance for the quarter continues to reflect the strength of the La-Z-Boy brand coupled with a powerful global supply chain that is delivering strong results. During the quarter, our company-owned Retail segment posted its seventh consecutive quarter of increased delivered same-store sales, and our Upholstery segment delivered double-digit profitability.  We also generated $66 million in cash from operations and increased returns to shareholders. With a strong brand, supply chain, distribution network and balance sheet, we are focused on driving long-term profitable growth across the enterprise."

Consolidated sales in the third quarter of fiscal 2020 increased 1.8% to $475.9 million, led by growth in the Retail segment.  Consolidated GAAP operating margin increased to 11.0% versus 8.7% in the prior-year quarter.  Non-GAAP operating margin increased to 9.4% in the current-year quarter versus 9.0% in last year’s third quarter, reflecting improvement in the Upholstery and Retail segments.  Non-GAAP results exclude the net benefit of  $8.7 million related to the company’s supply chain optimization initiative announced in August, reflecting a gain on the sale of the company's Redlands, California upholstery facility, net of ongoing costs associated with the initiative, and exclude $1.3 million of purchase accounting charges. GAAP and Non-GAAP fiscal 2019 third-quarter results included a one-time benefit of 110 basis points related to a redesign of the company's employee benefits programs. 

For the quarter, sales in the company’s Upholstery segment increased 0.7% to $336.7 million and GAAP operating margin increased to 13.8% from 10.3% in last year’s third quarter. Non-GAAP operating margin increased to 11.2% versus 10.3%, and excludes income of $8.7 million related to the supply chain optimization initiative. Operating margin improved as supply chain inflationary pressures were more than offset by efficiencies and lower commodity costs. In the Casegoods segment, sales increased 0.2% to $28.1 million and operating margin was 9.0% compared with 11.9% in the prior-year period, reflecting the impact of tariffs on the occasional table business and increased freight costs.

Sales in the Retail segment increased 5.1% to $167.5 million in the third quarter of fiscal 2020.  GAAP operating margin for the Retail segment improved to 9.8% from 8.9% in last year’s third quarter.  Non-GAAP operating margin increased to 9.8% in the current-year quarter from 9.1% in last year’s third quarter, and excluded purchase accounting charges in each period related to store acquisitions. Operating margin improvement was driven primarily by a 5.5% increase in delivered same-store sales.  On the core base of 153 company-owned stores in last year’s third quarter, delivered same-store sales performance reflected improved traffic trends and continued strong execution at the store level.

Fiscal 2020 third-quarter sales for Joybird (reported in the Corporate & Other segment) increased 17.9% to $21.9 million.  Joybird continued to improve its gross margin, fueled by supply chain synergies.  Joybird reduced its loss for the quarter on a year-over-year and sequential basis. The company is continuing to make improvements across the business model with the objective to balance investments in growth with bottom-line performance.

GAAP diluted EPS was $0.74 for the fiscal 2020 third quarter versus $0.61 in the prior-year quarter. Non-GAAP diluted EPS was $0.72 versus $0.63 in last year’s third quarter, with the fiscal 2020 third quarter excluding a $0.02 per diluted share charge for purchase accounting, a $0.10 per diluted share impairment charge for one investment in a privately held start-up company, and a $0.14 per diluted share net benefit related to the company’s supply chain optimization initiative.  Fiscal 2019 Non-GAAP third-quarter results excluded a $0.02 per diluted share charge for purchase accounting. GAAP and Non-GAAP fiscal 2019 third-quarter results included a one-time $0.07 per diluted share benefit for a redesign of employee benefits. 

Balance Sheet and Cash Flow

For the third quarter, the company generated $66.1 million in cash from operating activities, on stronger earnings, increased customer deposits and improved working capital management.  La-Z-Boy ended the quarter with $168.2 million in cash, cash equivalents, and restricted cash, and $30.1 million in investments to enhance returns on cash. During the period, the company invested $12.5 million in the business through capital expenditures, paid $6.5 million in dividends, and spent $12.2 million purchasing 0.4 million shares of stock in the open market under its existing authorized share purchase program, leaving 4.8 million shares of purchase availability in the program.

*Non-GAAP amounts for the third quarter of fiscal 2020 exclude: pre-tax purchase accounting charges related to the acquisitions completed in prior periods totaling $1.4 million, or $0.02 per diluted share, with $1.3 million included in operating income and $0.1 million included in interest expense;  a pre-tax charge of $6.0 million, or $0.10 per diluted share related to an impairment  for one investment, and  pre-tax income of $8.7 million, or $0.14 per diluted share, related to the company’s supply chain optimization initiative, including the closure and sale of the company’s Redlands, California upholstery manufacturing facility and relocation of its Newton, Mississippi leather cut-and-sew operations. Non-GAAP amounts for the third quarter of fiscal 2019 exclude pre-tax purchase accounting charges of $1.5 million, or $0.02 per diluted share, with $1.3 million included in operating income and $0.2 million included in interest expense.

Please refer to the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” for detailed information on calculating Non-GAAP measures used in this press release and a reconciliation to the applicable GAAP measure.

Conference Call

La-Z-Boy will hold a conference call with the investment community on Wednesday, February 19, 2020, at 8:30 a.m. eastern time. The toll-free dial-in number is 844.602.0380; international callers may use 862.298.0970.

The call will be webcast live, with corresponding slides, and archived on the Internet.  It will be available at https://lazboy.gcs-web.com/. A telephone replay will be available for a week following the call. This replay will be accessible to callers from the U.S. and Canada at 877.481.4010 and to international callers at 919.882.2331. Enter Replay Passcode: 58265. The webcast replay will be available for one year.

Forward-looking Information

This news release contains, and oral statements made from time to time by representatives of La‑Z‑Boy may contain, “forward-looking statements.” With respect to all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Actual results could differ materially from those we anticipate or project due to a number of factors, including: (a) changes in consumer confidence and demographics; (b) the possibility of a recession; (c) changes in the real estate and credit markets and their effects on our customers, consumers and suppliers; (d) international political unrest, terrorism or war; (e) volatility in energy and other commodities prices; (f) the impact of logistics on imports and exports; (g) tax rate, interest rate, and currency exchange rate changes; (h) changes in the stock market impacting our profitability and our effective tax rate; (i) operating factors, such as supply, labor or distribution disruptions (e.g. port strikes); (j) changes in legislation, including the tax code, or changes in the domestic or international regulatory environment or trade policies, including new or increased duties, tariffs, retaliatory tariffs, trade limitations and termination or renegotiation of bilateral and multilateral trade agreements impacting our business; (k) adoption of new accounting principles; (l) fires, severe weather or other natural events such as hurricanes, earthquakes, flooding, tornadoes and tsunamis; (m) our ability to procure, transport or import, or material increases to the cost of transporting or importing, fabric rolls, leather hides or cut-and-sewn fabric and leather sets domestically or abroad; (n) information technology conversions or system failures and our ability to recover from a system failure; (o) effects of our brand awareness and marketing programs; (p) the discovery of defects in our products resulting in delays in manufacturing, recall campaigns, reputational damage, or increased warranty costs; (q) litigation arising out of alleged defects in our products; (r) unusual or significant litigation; (s) our ability to locate new La-Z-Boy Furniture Galleries® stores (or store owners) and negotiate favorable lease terms for new or existing locations; (t) the ability to increase volume through our e-commerce initiatives; (u) the impact of potential goodwill or intangible asset impairments; and (v) those matters discussed in Item 1A of our fiscal 2019 Annual Report on Form 10-K and other factors identified from time to time in our reports filed with the Securities and Exchange Commission  (the “SEC”). We undertake no obligation to update or revise any forward-looking statements, whether to reflect new information or new developments or for any other reason.

Additional Information

This news release is just one part of La-Z-Boy’s financial disclosures and should be read in conjunction with other information filed with the Securities and Exchange Commission, which is available at: https://lazboy.gcs-web.com/financial-information/sec-filings. Investors and others wishing to be notified of future La-Z-Boy news releases, SEC filings and quarterly investor conference calls may sign up at:  https://lazboy.gcs-web.com/.

Background Information

La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew®, Hammary®, and Kincaid®. The company-owned Retail segment includes 155 of the 355 La-Z-Boy Furniture Galleries® stores.  Joybird is an e-commerce retailer and manufacturer of upholstered furniture.

The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 355 stand-alone La-Z-Boy Furniture Galleries® stores and 559 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at http://www.la-z-boy.com/.

Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with accounting principles generally accepted in the United States ("GAAP"), this press release also includes Non-GAAP financial measures. Management uses these Non-GAAP financial measures when assessing our ongoing performance. This press release contains references to Non-GAAP operating income, Non-GAAP operating margin, Non-GAAP income before income taxes, Non-GAAP net income attributable to La-Z-Boy Incorporated and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share, each of which exclude purchase accounting charges, charges for our supply chain optimization initiative, an impairment charge for one investment and impacts from terminating the company's defined benefit pension plan. The purchase accounting charges may include the amortization of intangible assets, incremental expense upon the sale of inventory acquired at fair value, amortization of employee retention agreements, fair value adjustments of future cash payments recorded as interest expense, and adjustments to the fair value of contingent consideration. The charges for our supply chain optimization initiative may include severance costs, accelerated depreciation expense, costs to relocate equipment and inventory, as well as other costs related to the closure, relocation and sale of certain manufacturing operations. These Non-GAAP financial measures are not meant to be considered superior to or a substitute for La-Z-Boy Incorporated’s results of operations prepared in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. Reconciliations of such Non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables.

Management believes that presenting certain Non-GAAP financial measures will help investors understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. Management excludes purchase accounting charges because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions consummated. While the company has a history of acquisition activity, it does not acquire businesses on a predictable cycle, and the impact of purchase accounting charges is unique to each acquisition and can vary significantly from acquisition to acquisition. Similarly, the charges related to the company’s supply chain optimization initiative are dependent on the timing, size, number and nature of the operations being moved or closed, and the charges may not be incurred on a predictable cycle. Management also excludes impacts from the termination of the company’s defined benefit pension plan and an impairment charge for one investment when assessing the company’s operating and financial performance due to the one-time nature of the transactions. Management believes that exclusion of these items facilitates more consistent comparisons of the company’s operating results over time. Where applicable, the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” tables present the excluded items net of tax calculated using the effective tax rate from operations for the period in which the adjustment is presented.


LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

    Quarter Ended   Nine Months Ended
(Unaudited, amounts in thousands, except per share data)   1/25/20   1/26/19   1/25/20   1/26/19
Sales   $ 475,856     $ 467,582     $ 1,336,701     $ 1,291,610  
Cost of sales   276,218     277,712     786,962     778,813  
Gross profit   199,638     189,870     549,739     512,797  
Selling, general and administrative expense   147,325     149,027     444,403     420,294  
Operating income   52,313     40,843     105,336     92,503  
Interest expense   (265 )   (538 )   (891 )   (1,143 )
Interest income   844     540     2,093     1,534  
Other expense, net   (5,998 )   (941 )   (5,390 )   (2,046 )
Income before income taxes   46,894     39,904     101,148     90,848  
Income tax expense   12,178     10,730     25,540     22,374  
Net income   34,716     29,174     75,608     68,474  
Net income attributable to noncontrolling interests   (204 )   (443 )   (434 )   (1,428 )
Net income attributable to La-Z-Boy Incorporated   $ 34,512     $ 28,731     $ 75,174     $ 67,046  
                 
Basic weighted average common shares   46,262     46,820     46,545     46,808  
Basic net income attributable to La-Z-Boy Incorporated per share   $ 0.75     $ 0.61     $ 1.61     $ 1.43  
                 
Diluted weighted average common shares   46,584     47,091     46,867     47,212  
Diluted net income attributable to La-Z-Boy Incorporated per share   $ 0.74     $ 0.61     $ 1.60     $ 1.42  
                                 


LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET

(Unaudited, amounts in thousands, except par value)   1/25/20   4/27/19
Current assets        
Cash and equivalents   $ 166,272     $ 129,819  
Restricted cash   1,973     1,968  
Receivables, net of allowance of $2,191 at 1/25/20 and $2,180 at 4/27/19   153,721     143,288  
Inventories, net   198,567     196,899  
Other current assets   82,765     69,144  
Total current assets   603,298     541,118  
Property, plant and equipment, net   212,851     200,523  
Goodwill   185,328     185,867  
Other intangible assets, net   29,235     29,907  
Deferred income taxes – long-term   19,928     20,670  
Right of use lease asset   318,162      
Other long-term assets, net   73,831     81,705  
Total assets   $ 1,442,633     $ 1,059,790  
         
Current liabilities        
Current portion of long-term debt   $     $ 180  
Accounts payable   68,045     65,365  
Lease liability, short-term   65,128      
Accrued expenses and other current liabilities   195,349     173,091  
Total current liabilities   328,522     238,636  
Long-term debt       19  
Lease liability, long-term   267,955      
Other long-term liabilities   116,674     124,159  
Shareholders' equity        
Preferred shares – 5,000 authorized; none issued        
Common shares, $1 par value – 150,000 authorized; 46,075 outstanding at 1/25/20 and 46,955 outstanding at 4/27/19   46,075     46,955  
Capital in excess of par value   316,764     313,168  
Retained earnings   353,419     325,847  
Accumulated other comprehensive loss   (2,361 )   (3,462 )
Total La-Z-Boy Incorporated shareholders' equity   713,897     682,508  
Noncontrolling interests   15,585     14,468  
Total equity   729,482     696,976  
Total liabilities and equity   $ 1,442,633     $ 1,059,790  
                 


LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS

    Nine Months Ended
(Unaudited, amounts in thousands)   1/25/20   1/26/19
Cash flows from operating activities        
Net income   $ 75,608     $ 68,474  
Adjustments to reconcile net income to cash provided by (used for) operating activities        
(Gain)/loss on disposal of assets   (10,051 )   41  
Change in deferred taxes   1,238     2,538  
Provision for doubtful accounts   210     477  
Depreciation and amortization   23,035     23,182  
Equity-based compensation expense   7,235     8,174  
Pension plan contributions       (7,000 )
Change in receivables   (11,178 )   1,152  
Change in inventories   (62 )   (18,950 )
Change in other assets   53,620     (10,103 )
Change in payables   659     4,954  
Change in other liabilities   (20,555 )   18,509  
Net cash provided by operating activities   119,759     91,448  
         
Cash flows from investing activities        
Proceeds from disposals of assets   11,242     447  
Proceeds from insurance   1,080     154  
Capital expenditures   (35,464 )   (35,766 )
Purchases of investments   (26,248 )   (14,956 )
Proceeds from sales of investments   24,688     14,304  
Acquisitions   (6,412 )   (78,582 )
Net cash used for investing activities   (31,114 )   (114,399 )
         
Cash flows from financing activities        
Net proceeds from credit facility       20,000  
Payments on debt and finance lease liabilities   (135 )   (169 )
Stock issued for stock and employee benefit plans, net of shares withheld for taxes   828     4,012  
Purchases of common stock   (35,346 )   (16,726 )
Dividends paid   (18,641 )   (17,381 )
Net cash used for financing activities   (53,294 )   (10,264 )
         
Effect of exchange rate changes on cash and equivalents   1,107     (74 )
Change in cash, cash equivalents and restricted cash   36,458     (33,289 )
Cash, cash equivalents and restricted cash at beginning of period   131,787     136,871  
Cash, cash equivalents and restricted cash at end of period   $ 168,245     $ 103,582  
         
Supplemental disclosure of non-cash investing activities        
Capital expenditures included in payables   $ 4,026     $ 2,827  
                 


LA-Z-BOY INCORPORATED
SEGMENT INFORMATION

    Quarter Ended   Nine Months Ended
(Unaudited, amounts in thousands)   1/25/20   1/26/19   1/25/20   1/26/19
Sales                
Upholstery segment:                
Sales to external customers   $ 262,835     $ 265,487     $ 746,851     $ 759,569  
Intersegment sales   73,861     68,961     204,116     185,370  
Upholstery segment sales   336,696     334,448     950,967     944,939  
                 
Casegoods segment:                
Sales to external customers   22,583     23,129     68,561     73,774  
Intersegment sales   5,532     4,936     16,079     14,054  
Casegoods segment sales   28,115     28,065     84,640     87,828  
                 
Retail segment sales   167,494     159,417     458,894     418,331  
                 
Corporate and Other:                
Sales to external customers   22,944     19,549     62,395     39,936  
Intersegment sales   2,725     3,300     8,137     9,156  
Corporate and Other sales   25,669     22,849     70,532     49,092  
                 
Eliminations   (82,118 )   (77,197 )   (228,332 )   (208,580 )
  Consolidated sales   $ 475,856     $ 467,582     $ 1,336,701     $ 1,291,610  
                 
Operating Income (Loss)                
Upholstery segment   $ 46,512     $ 34,566     $ 104,859     $ 90,602  
Casegoods segment   2,534     3,332     7,336     10,173  
Retail segment   16,383     14,158     33,272     25,179  
Corporate and Other   (13,116 )   (11,213 )   (40,131 )   (33,451 )
  Consolidated operating income   $ 52,313     $ 40,843     $ 105,336     $ 92,503  
                                 


LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

    Quarter Ended   Nine Months Ended
(Amounts in thousands, except per share data)   1/25/20   1/26/19   1/25/20   1/26/19
GAAP gross profit   $ 199,638     $ 189,870     $ 549,739     $ 512,797  
Add back: Purchase accounting charges - incremental expense upon the sale of inventory acquired at fair value   88     420     403     2,911  
  Add back: Supply chain optimization initiative charges   1,029         5,292      
Non-GAAP gross profit   $ 200,755     $ 190,290     $ 555,434     $ 515,708  
                 
GAAP SG&A   $ 147,325     $ 149,027     $ 444,403     $ 420,294  
Less: Purchase accounting charges - amortization of intangible assets and retention agreements   (1,194 )   (896 )   (3,576 )   (2,237 )
Add back: Supply chain optimization initiative gain on sale   9,745         9,745      
Non-GAAP SG&A   $ 155,876     $ 148,131     $ 450,572     $ 418,057  
                 
GAAP operating income   $ 52,313     $ 40,843     $ 105,336     $ 92,503  
Add back: Purchase accounting charges   1,282     1,316     3,979     5,148  
Less: Supply chain optimization initiative gain on sale and charges   (8,716 )       (4,453 )    
Non-GAAP operating income   $ 44,879     $ 42,159     $ 104,862     $ 97,651  
                 
GAAP income before income taxes   $ 46,894     $ 39,904     $ 101,148     $ 90,848  
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense   1,448     1,507     4,505     5,527  
Less: Supply chain optimization initiative gain on sale and charges   (8,716 )       (4,453 )    
Add back: Investment impairment   6,000         6,000      
Less: Pension termination refund           (1,900 )    
Non-GAAP income before income taxes   $ 45,626     $ 41,411     $ 105,300     $ 96,375  
                 
GAAP net income attributable to La-Z-Boy Incorporated   $ 34,512     $ 28,731     $ 75,174     $ 67,046  
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense   1,448     1,507     4,505     5,527  
  Less: Tax effect of purchase accounting   (376 )   (439 )   (1,138 )   (1,360 )
Less: Supply chain optimization initiative gain on sale and charges   (8,716 )       (4,453 )    
Add back: Tax effect of supply chain optimization initiative gain on sale and charges   2,263         1,124      
Add back: Investment impairment   6,000         6,000      
  Less: Tax effect of investment impairment   (1,558 )       (1,515 )    
Less: Pension termination refund           (1,900 )    
Add back: Tax effect of pension termination refund           480      
Non-GAAP net income attributable to La-Z-Boy Incorporated   $ 33,573     $ 29,799     $ 78,278     $ 71,213  
                 
GAAP net income attributable to La-Z-Boy Incorporated per diluted share   $ 0.74     $ 0.61     $ 1.60     $ 1.42  
Add back: Purchase accounting charges, net of tax, per share   0.02     0.02     0.07     0.09  
Less: Supply chain optimization initiative gain on sale and charges, net of tax, per share   (0.14 )       (0.07 )    
Add back: Investment impairment, net of tax, per share   0.10         0.10      
Less: Pension termination refund, net of tax, per share           (0.03 )    
Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share   $ 0.72     $ 0.63     $ 1.67     $ 1.51  
                                 

 

LA-Z-BOY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
SEGMENT INFORMATION

    Quarter Ended
(Amounts in thousands)   1/25/20   % of sales   1/26/19   % of sales
GAAP operating income (loss)                
  Upholstery segment   $ 46,512     13.8%   $ 34,566     10.3%
  Casegoods segment   2,534     9.0%   3,332     11.9%
  Retail segment   16,383     9.8%   14,158     8.9%
  Corporate and Other   (13,116 )   N/M   (11,213 )   N/M
  GAAP Consolidated operating income   $ 52,313     11.0%   $ 40,843     8.7%
                 
Purchase accounting and supply chain optimization initiative affecting operating income                
  Upholstery segment   $ (8,659 )       $ (241 )    
  Casegoods segment                
  Retail segment   88         420      
  Corporate and Other   1,137         1,137      
  Consolidated Non-GAAP charges affecting operating income   $ (7,434 )       $ 1,316      
                 
Non-GAAP operating income (loss)                
  Upholstery segment   $ 37,853     11.2%   $ 34,325     10.3%
  Casegoods segment   2,534     9.0%   3,332     11.9%
  Retail segment   16,471     9.8%   14,578     9.1%
  Corporate and Other   (11,979 )   N/M   (10,076 )   N/M
  Non-GAAP Consolidated operating income   $ 44,879     9.4%   $ 42,159     9.0%
                 
N/M - Not Meaningful                


    Nine Months Ended
(Amounts in thousands)   1/25/20   % of sales   1/26/19   % of sales
GAAP operating income (loss)                
  Upholstery segment   $ 104,859     11.0%   $ 90,602     9.6%
  Casegoods segment   7,336     8.7%   10,173     11.6%
  Retail segment   33,272     7.3%   25,179     6.0%
  Corporate and Other   (40,131 )   N/M   (33,451 )   N/M
  GAAP Consolidated operating income   $ 105,336     7.9%   $ 92,503     7.2%
                 
Purchase accounting and supply chain optimization initiative affecting operating income                
  Upholstery segment   $ (4,288 )       $ (37 )    
  Casegoods segment                
  Retail segment   403         1,508      
  Corporate and Other   3,411         3,677      
  Consolidated Non-GAAP charges affecting operating income   $ (474 )       $ 5,148      
                 
Non-GAAP operating income (loss)                
  Upholstery segment   $ 100,571     10.6%   $ 90,565     9.6%
  Casegoods segment   7,336     8.7%   10,173     11.6%
  Retail segment   33,675     7.3%   26,687     6.4%
  Corporate and Other   (36,720 )   N/M   (29,774 )   N/M
  Non-GAAP Consolidated operating income   $ 104,862     7.8%   $ 97,651     7.6%
                 
N/M - Not Meaningful                
                 

Contact:    
Kathy Liebmann                  
(734) 241-2438                                                      
kathy.liebmann@la-z-boy.com