Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 29, 2017 | Aug. 15, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | LA-Z-BOY INC | |
Entity Central Index Key | 57,131 | |
Current Fiscal Year End Date | --04-28 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,240,005 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 29, 2017 |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
CONSOLIDATED STATEMENT OF INCOME | ||
Sales | $ 357,079 | $ 340,783 |
Cost of sales | 217,976 | 206,562 |
Gross profit | 139,103 | 134,221 |
Selling, general and administrative expense | 122,805 | 111,763 |
Operating income | 16,298 | 22,458 |
Interest expense | 157 | 115 |
Interest income | 343 | 204 |
Other income (expense), net | 1,749 | (762) |
Income before income taxes | 18,233 | 21,785 |
Income tax expense | 6,489 | 7,777 |
Net income | 11,744 | 14,008 |
Net income attributable to noncontrolling interests | (93) | (202) |
Net income attributable to La-Z-Boy Incorporated | $ 11,651 | $ 13,806 |
Basic weighted average common shares (in shares) | 48,357 | 49,105 |
Basic net income attributable to La-Z-Boy Incorporated per share (in dollars per share) | $ 0.24 | $ 0.28 |
Diluted weighted average common shares (in shares) | 48,846 | 49,594 |
Diluted net income attributable to La-Z-Boy Incorporated per share (in dollars per share) | $ 0.24 | $ 0.28 |
Dividends declared per share (in dollars per share) | $ 0.11 | $ 0.10 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||
Net income | $ 11,744 | $ 14,008 |
Other comprehensive income (loss) | ||
Currency translation adjustment | 2,316 | (68) |
Change in fair value of cash flow hedges, net of tax | 478 | (475) |
Net unrealized gains (losses) on marketable securities, net of tax | (271) | 205 |
Net pension amortization, net of tax | 517 | 509 |
Total other comprehensive income | 3,040 | 171 |
Total comprehensive income before noncontrolling interests | 14,784 | 14,179 |
Comprehensive income attributable to noncontrolling interests | (498) | (174) |
Comprehensive income attributable to La-Z-Boy Incorporated | $ 14,286 | $ 14,005 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Jul. 29, 2017 | Apr. 29, 2017 |
Current assets | ||
Cash and equivalents | $ 119,628 | $ 141,860 |
Restricted cash | 5,963 | 8,999 |
Receivables, net of allowance of $2,557 at 7/29/17 and $2,563 at 4/29/17 | 134,904 | 150,846 |
Inventories, net | 178,508 | 175,114 |
Other current assets | 49,882 | 40,603 |
Total current assets | 488,885 | 517,422 |
Property, plant and equipment, net | 171,078 | 169,132 |
Goodwill | 74,766 | 74,245 |
Other intangible assets, net | 18,438 | 18,489 |
Deferred income taxes - long-term | 38,372 | 40,131 |
Other long-term assets, net | 76,982 | 69,436 |
Total assets | 868,521 | 888,855 |
Current liabilities | ||
Current portion of long-term debt | 206 | 219 |
Accounts payable | 47,352 | 51,282 |
Accrued expenses and other current liabilities | 126,948 | 147,175 |
Total current liabilities | 174,506 | 198,676 |
Long-term debt | 242 | 296 |
Other long-term liabilities | 90,777 | 88,778 |
Contingencies and commitments | ||
Shareholders' equity | ||
Preferred shares - 5,000 authorized; none issued | ||
Common shares, $1 par value - 150,000 authorized; 48,268 outstanding at 7/29/17 and 48,472 outstanding at 4/29/17 | 48,268 | 48,472 |
Capital in excess of par value | 293,041 | 289,632 |
Retained earnings | 280,251 | 284,698 |
Accumulated other comprehensive loss | (30,248) | (32,883) |
Total La-Z-Boy Incorporated shareholders' equity | 591,312 | 589,919 |
Noncontrolling interests | 11,684 | 11,186 |
Total equity | 602,996 | 601,105 |
Total liabilities and equity | $ 868,521 | $ 888,855 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jul. 29, 2017 | Apr. 29, 2017 |
Current assets | ||
Receivables, allowance (in dollars) | $ 2,557 | $ 2,563 |
Shareholders' equity | ||
Preferred shares, authorized (in shares) | 5,000 | 5,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, authorized (in shares) | 150,000 | 150,000 |
Common shares, outstanding (in shares) | 48,268 | 48,472 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Cash flows from operating activities | ||
Net income | $ 11,744 | $ 14,008 |
Adjustments to reconcile net income to cash provided by (used for) operating activities | ||
Deferred income tax expense | 1,344 | (1,076) |
Provision for doubtful accounts | (22) | (77) |
Depreciation and amortization | 7,758 | 6,800 |
Equity-based compensation expense | 3,558 | 3,329 |
Change in receivables | 15,753 | 17,664 |
Change in inventories | (2,477) | 510 |
Change in other assets | (10,837) | (1,467) |
Change in payables | (3,974) | 403 |
Change in other liabilities | (3,339) | (4,341) |
Net cash provided by operating activities | 19,508 | 35,753 |
Cash flows from investing activities | ||
Proceeds from disposals of assets | 459 | 35 |
Proceeds from property insurance | 450 | |
Capital expenditures | (9,146) | (5,209) |
Purchases of investments | (10,851) | (7,695) |
Proceeds from sales of investments | 5,857 | 3,670 |
Acquisitions, net of cash acquired | (15,879) | (5,281) |
Net cash used for investing activities | (29,110) | (14,480) |
Cash flows from financing activities | ||
Payments on debt | (66) | (89) |
Stock issued for stock and employee benefit plans, net of shares withheld for taxes | 377 | 860 |
Excess tax benefit on stock option exercises | 1,137 | |
Purchases of common stock | (11,491) | (13,567) |
Dividends paid | (5,337) | (4,923) |
Net cash used for financing activities | (16,517) | (16,582) |
Effect of exchange rate changes on cash and equivalents | 851 | 116 |
Change in cash, cash equivalents and restricted cash | (25,268) | 4,807 |
Cash, cash equivalents and restricted cash at beginning of period | 150,859 | 121,335 |
Cash, cash equivalents and restricted cash at end of period | 125,591 | $ 126,142 |
Supplemental disclosure of non-cash investing activities | ||
Capital expenditures included in payables | $ 1,671 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Shares | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Non-Controlling Interests | Total |
Balance at Apr. 30, 2016 | $ 49,331 | $ 279,339 | $ 252,472 | $ (34,000) | $ 10,070 | $ 557,212 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 85,922 | 1,062 | 86,984 | |||
Other comprehensive income | 1,117 | 54 | 1,171 | |||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | 504 | 2,992 | (1,747) | 1,749 | ||
Purchases of common stock | (1,363) | (3,300) | (31,294) | (35,957) | ||
Stock option and restricted stock expense | 8,864 | 8,864 | ||||
Tax benefit from exercise of options | 1,737 | 1,737 | ||||
Dividends paid | (20,655) | (20,655) | ||||
Balance at Apr. 29, 2017 | 48,472 | 289,632 | 284,698 | (32,883) | 11,186 | 601,105 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 11,651 | 93 | 11,744 | |||
Other comprehensive income | 2,635 | 405 | 3,040 | |||
Stock issued for stock and employee benefit plans, net of cancellations and withholding tax | 185 | 1,483 | (1,291) | 377 | ||
Purchases of common stock | (389) | (1,632) | (9,470) | (11,491) | ||
Stock option and restricted stock expense | 3,558 | 3,558 | ||||
Dividends paid | (5,337) | (5,337) | ||||
Balance at Jul. 29, 2017 | $ 48,268 | $ 293,041 | $ 280,251 | $ (30,248) | $ 11,684 | $ 602,996 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jul. 29, 2017 | |
Basis of Presentation | |
Basis of Presentation | Note 1: Basis of Presentation The accompanying consolidated financial statements include the consolidated accounts of La-Z-Boy Incorporated and our majority-owned subsidiaries. We derived the April 29, 2017, balance sheet from our audited financial statements. We prepared the interim financial information in conformity with generally accepted accounting principles, which we applied on a basis consistent with those reflected in our fiscal 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission, but the information does not include all of the disclosures required by generally accepted accounting principles. In management’s opinion, the interim financial information includes all adjustments and accruals, consisting only of normal recurring adjustments (except as otherwise disclosed), that are necessary for a fair statement of results for the respective interim periods. The interim results reflected in the accompanying financial statements are not necessarily indicative of the results of operations that will occur for the full fiscal year ending April 28, 2018. At July 29, 2017, we owned preferred shares of two privately-held companies, and a warrant to purchase common shares of one of these privately-held companies. These two privately-held companies are variable interest entities, but their results are not consolidated in our financial statements because we are not the primary beneficiary. We are not the primary beneficiary because we do not have the power to direct the activities of these entities that most significantly impact their economic performance. During the first quarter of fiscal 2017, we recorded a benefit related to legal settlements as part of cost of sales. The legal settlements increased gross margin by 0.7 percentage points in the first quarter of fiscal 2017. |
Acquisitions
Acquisitions | 3 Months Ended |
Jul. 29, 2017 | |
Acquisitions | |
Acquisitions | Note 2: Acquisitions As we previously reported in our fiscal 2017 Annual Report on Form 10-K, we acquired the La-Z-Boy wholesale business in the United Kingdom and Ireland in the third quarter of fiscal 2017. Per the terms of the purchase agreement, payment for the business was due 90 business days following the date of acquisition, and accordingly, we paid $15.9 million in the first quarter of fiscal 2018. |
Restricted Cash
Restricted Cash | 3 Months Ended |
Jul. 29, 2017 | |
Restricted Cash | |
Restricted Cash | Note 3: Restricted Cash We have cash on deposit with a bank as collateral for certain letters of credit. All of our letters of credit have maturity dates within the next twelve months, but we expect to renew some of these letters of credit when they mature. (Unaudited, amounts in thousands) 7/29/17 4/29/17 Cash and cash equivalents $ $ Restricted cash Total cash, cash equivalents and restricted cash $ $ |
Inventories
Inventories | 3 Months Ended |
Jul. 29, 2017 | |
Inventories | |
Inventories | Note 4: Inventories A summary of inventories is as follows: (Unaudited, amounts in thousands) 7/29/17 4/29/17 Raw materials $ $ Work in process Finished goods FIFO inventories Excess of FIFO over LIFO ) ) Total Inventories $ $ |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Jul. 29, 2017 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | Note 5: Goodwill and Other Intangible Assets Our goodwill, reacquired rights, and other intangible assets on our consolidated balance sheet relate to our acquisitions of La-Z-Boy Furniture Galleries ® stores over the past several fiscal years and our international business acquisition last fiscal year. Our other intangible assets also include a trade name for American Drew. The following is a roll-forward of goodwill for the quarter ended July 29, 2017: (Unaudited, amounts in thousands) Goodwill Balance at April 29, 2017 $ Translation adjustment Balance at July 29, 2017 $ The following is a roll-forward of our other intangible assets for the quarter ended July 29, 2017: (Unaudited, amounts in thousands) Trade Names Reacquired Other Total Other Balance at April 29, 2017 $ $ $ $ Amortization — ) ) ) Translation adjustment — Balance at July 29, 2017 $ $ $ $ |
Investments
Investments | 3 Months Ended |
Jul. 29, 2017 | |
Investments | |
Investments | Note 6: Investments We have current and long-term investments intended to enhance returns on our cash as well as to fund future obligations of our non-qualified defined benefit retirement plan, our executive deferred compensation plan, and our performance compensation retirement plan. We also hold other investments, which at July 29, 2017, included cost-basis preferred shares of two privately-held companies, and at April 29, 2017, included an available-for-sale convertible debt security and cost-basis preferred shares of a privately held company. Our short-term investments are included in other current assets and our long-term investments are included in other long-term assets on our consolidated balance sheet. The following summarizes our investments at July 29, 2017, and April 29, 2017: (Unaudited, amounts in thousands) 7/29/17 4/29/17 Short-term investments: Available-for-sale investments $ $ Trading securities Held-to-maturity investments Total short-term investments Long-term investments: Available-for-sale investments Cost basis investment Total long-term investments Total investments $ $ Investments to enhance returns on cash $ $ Investments to fund compensation/retirement plans $ $ Other investments $ $ The following is a summary of the unrealized gains, unrealized losses, and fair value by investment type at July 29, 2017, and April 29, 2017: At July 29, 2017 (Unaudited, amounts in thousands) Gross Gross Fair Value Equity securities $ $ ) $ Fixed income ) Mutual funds — — Other — Total securities $ $ ) $ At April 29, 2017 (Unaudited, amounts in thousands) Gross Gross Fair Value Equity securities $ $ ) $ Fixed income ) Mutual funds — — Other ) Total securities $ $ ) $ The following table summarizes sales of available-for-sale securities: Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Proceeds from sales $ $ Gross realized gains Gross realized losses ) ) The fair value of fixed income available-for-sale securities by contractual maturity was $15.0 million within one year, $19.5 million within two to five years, $1.3 million within six to ten years, and $0.4 million thereafter. |
Pension Plans
Pension Plans | 3 Months Ended |
Jul. 29, 2017 | |
Pension Plans | |
Pension Plans | Note 7: Pension Plans Net periodic pension costs were as follows: Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Service cost $ $ Interest cost Expected return on plan assets ) ) Net amortization Net periodic pension cost $ $ The components of net periodic pension cost other than the service cost are included in other income (expense), net in our consolidated statement of income. |
Product Warranties
Product Warranties | 3 Months Ended |
Jul. 29, 2017 | |
Product Warranties | |
Product Warranties | Note 8: Product Warranties We accrue an estimated liability for product warranties when we recognize revenue on the sale of warranted products. We estimate future warranty claims based on our claims experience and any additional anticipated future costs on previously sold products. We incorporate repair costs into our liability estimates, including materials, labor and overhead amounts necessary to perform repairs and any costs associated with delivering repaired product to our customers. Approximately 95% of our warranty liability relates to our Upholstery segment as we generally warrant our products against defects for one year on fabric and leather, from one to ten years on cushions and padding, and provide a limited lifetime warranty on certain mechanisms and frames. Our warranties cover labor costs relating to our parts for one year. Our warranty period begins when the consumer receives our product. We use considerable judgment in making our estimates, and we record differences between our actual and estimated costs when the differences are known. A reconciliation of the changes in our product warranty liability is as follows: Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Balance as of the beginning of the period $ $ Accruals during the period Settlements during the period ) ) Balance as of the end of the period $ $ As of July 29, 2017, and April 29, 2017, we included $13.1 million and $13.2 million, respectively, of our product warranty liability in accrued expenses and other current liabilities on our consolidated balance sheet, and included the remainder in other long-term liabilities. We recorded accruals during the periods presented primarily to reflect charges that relate to warranties issued during the respective periods. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jul. 29, 2017 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 9: Stock-Based Compensation The table below summarizes the total stock-based compensation expense we recognized for all outstanding grants in our consolidated statement of income: Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Equity-based awards expense $ $ Liability-based awards expense Total stock-based compensation expense $ $ Stock Options. We granted 573,591 stock options to employees during the first quarter of fiscal 2018, and we have stock options outstanding from previous grants. We account for stock options as equity-based awards because when they are exercised, they will be settled in common shares. We recognize compensation expense for stock options over the vesting period equal to the fair value on the date our compensation committee approved the awards. The vesting period for our stock options ranges from one to four years, with accelerated vesting upon retirement. We expense options granted to retirement-eligible employees immediately. We estimate forfeiture rates based on our employees’ forfeiture history and believe they will approximate future results. We estimate the fair value of the employee stock options at the date of grant using the Black-Scholes option-pricing model, which requires management to make certain assumptions. We estimate expected volatility based on the historical volatility of our common shares. We base the average expected life on the contractual term of the stock option and expected employee exercise trends. We base the risk-free rate on U.S. Treasury issues with a term equal to the expected life assumed at the date of the grant. We calculated the fair value of stock options granted during the first quarter of fiscal 2018 using the following assumptions: (Unaudited) Fiscal 2018 Risk-free interest rate % Dividend rate % Expected life in years Stock price volatility % Fair value per share $ Stock Appreciation Rights (“SARs”). We did not grant any SARs to employees during the first quarter of fiscal 2018, but we have SARs outstanding from previous grants. SARs will be paid in cash upon exercise and, accordingly, we account for SARs as liability-based awards that we re-measure to reflect the fair value at the end of each reporting period. These awards vest at 25% per year, beginning one year from the grant date for a term of four years, with accelerated vesting upon retirement. We expense SARs granted to retirement-eligible employees immediately. We estimate the fair value of SARs at the end of each reporting period using the Black-Scholes option-pricing model, which requires management to make certain assumptions. We base the average expected life on the contractual term of the SARs and expected employee exercise trends (which is consistent with the expected life of our option awards). We base the risk-free rate on U.S. Treasury issues with a term equal to the expected life assumed at the end of the reporting period. In fiscal 2013, we granted SARs as described in our Annual Report on Form 10-K for the fiscal year ended April 27, 2013. These awards have exceeded their expected life and are re-measured based on their intrinsic value, which is the market value of our common stock on the last day of the reporting period less the exercise price, until the earlier of the exercise date or the contractual term date. At July 29, 2017, the intrinsic value per share of these awards was $21.03. In fiscal 2014, we granted SARs as described in our Annual Report on Form 10-K for the fiscal year ended April 26, 2014. At July 29, 2017, we measured the fair value of these SARs using the following assumptions: (Unaudited) Fiscal 2014 Risk-free interest rate % Dividend rate % Expected life in years Stock price volatility % Fair value per share $ Restricted Stock . We granted 102,662 shares of restricted stock to employees during the first quarter of fiscal 2018. We also have shares of restricted stock outstanding from previous grants. We issue restricted stock at no cost to the employees, and the shares are held in an escrow account until the vesting period ends. If a recipient’s employment ends during the escrow period (other than through death or disability), the shares are returned at no cost to the company. We account for restricted stock awards as equity-based awards because when they vest, they will be settled in common shares. The fair value of the restricted stock awarded in the first quarter of fiscal 2018 was $27.25 per share, the market value of our common shares on the date of grant. We estimate forfeiture rates based on our employees’ forfeiture history and believe they will approximate future results. We recognize compensation expense for restricted stock over the vesting period equal to the fair value on the date our compensation committee approved the awards. Restricted stock awards vest at 25% per year, beginning one year from the grant date for a term of four years. Performance Shares. During the first quarter of fiscal 2018, we granted 177,805 performance-based shares. We also have performance-based share awards outstanding from previous grants. Payout of these grants depends on our financial performance (80%) and a market-based condition based on the total return our shareholders receive on their investment in our stock relative to returns earned through investments in other public companies (20%). The performance share opportunity ranges from 50% of the employee’s target award if minimum performance requirements are met to a maximum of 200% of the target award based on the attainment of certain financial and shareholder-return goals over a specific performance period, which is generally three fiscal years. We account for performance-based shares as equity-based awards because when they vest, they will be settled in common shares. We estimate forfeiture rates based on our employees’ forfeiture history and believe they will approximate future results. For shares that vest based on our results relative to the performance goals, we expense as compensation cost the fair value of the shares as of the day we granted the awards recognized over the performance period, taking into account the probability that we will satisfy the performance goals. The fair value of each share of the awards we granted in fiscal 2018 that vest based on attaining performance goals was $25.93, the market value of our common shares on the date we granted the awards less the dividends we expect to pay before the shares vest. For shares that vest based on market conditions, we use a Monte Carlo valuation model to estimate each share’s fair value as of the date of grant, and, similar to the way in which we expense awards of stock options, we expense compensation cost over the vesting period regardless of the value that award recipients ultimately receive. Based on the Monte Carlo model, the fair value as of the grant date of the fiscal 2018 grant of shares that vest based on market conditions was $36.24. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Jul. 29, 2017 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | Note 10: Accumulated Other Comprehensive Loss The activity in accumulated other comprehensive loss for the quarter ended July 29, 2017, and July 30, 2016, is as follows: (Unaudited, amounts in thousands) Translation Change in Unrealized Net pension Accumulated Balance at April 29, 2017 $ ) $ $ $ ) $ ) Changes before reclassifications — Amounts reclassified to net income — ) ) ) Tax effect — ) ) ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ) Balance at July 29, 2017 $ $ $ $ ) $ ) (Unaudited, amounts in thousands) Translation Change in Unrealized Net pension Accumulated Balance at April 30, 2016 $ ) $ ) $ $ ) $ ) Changes before reclassifications ) ) — ) Amounts reclassified to net income — Tax effect — ) ) ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ) ) Balance at July 30, 2016 $ ) $ ) $ $ ) $ ) We reclassified the unrealized gain on marketable securities from accumulated other comprehensive loss to net income through other income (expense), net in our consolidated statement of income, reclassified the change in fair value of cash flow hedges to net income through cost of sales, and reclassified the net pension amortization to net income through other income (expense), net. The components of non-controlling interest for the quarter ended July 29, 2017, and July 30, 2016, were as follows: Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Balance as of the beginning of the period $ $ Net income Other comprehensive (income) loss ) Balance as of the end of the period $ $ |
Segment Information
Segment Information | 3 Months Ended |
Jul. 29, 2017 | |
Segment Information | |
Segment Information | Note 11: Segment Information Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment. Upholstery Segment . Our Upholstery segment is our largest business segment and consists primarily of two operating units: La-Z-Boy, our largest operating unit, and our England subsidiary. The Upholstery segment also includes our international wholesale businesses. Our Upholstery segment manufactures and imports upholstered furniture such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans and sleeper sofas. The Upholstery segment sells directly to La-Z-Boy Furniture Galleries ® stores, operators of La-Z-Boy Comfort Studio ® locations and England Custom Comfort Center locations, major dealers, and a wide cross-section of other independent retailers. Casegoods Segment . Our Casegoods segment consists of three brands: American Drew, Hammary, and Kincaid. The Casegoods segment sells directly to major dealers, as well as La-Z-Boy Furniture Galleries ® stores, and a wide cross-section of other independent retailers. Our Casegoods segment is an importer, marketer, and distributor of casegoods/wood furniture such as bedroom sets, dining room sets, entertainment centers and occasional pieces, and also manufactures some coordinated upholstered furniture. Retail Segment . Our Retail segment consists of 145 company-owned La-Z-Boy Furniture Galleries ® stores. The Retail segment primarily sells upholstered furniture, in addition to some casegoods and other accessories, to end consumers through these stores. Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Sales Upholstery segment: Sales to external customers $ $ Intersegment sales Upholstery segment sales Casegoods segment: Sales to external customers Intersegment sales Casegoods segment sales Retail segment sales Corporate and Other: Sales to external customers Intersegment sales Corporate and Other sales Eliminations ) ) Consolidated sales $ $ Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Operating Income (Loss) Upholstery segment $ $ Casegoods segment Retail segment Corporate and Other ) ) Consolidated operating income Interest expense Interest income Other income (expense), net ) Income before income taxes $ $ |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 29, 2017 | |
Income Taxes | |
Income Taxes | Note 12: Income Taxes Our effective tax rate for the first quarter of fiscal 2018 was 35.6% compared with 35.7% for the first quarter of fiscal 2017. Our effective tax rate varies from the 35% statutory rate primarily due to state taxes, less the benefit of the U.S. manufacturing deduction and foreign earnings in jurisdictions with lower tax rates than the U.S. Our consolidated balance sheet at the end of the first quarter of fiscal 2018 reflected a $0.9 million net liability for uncertain income tax positions. We do not expect this net liability to change significantly in the next 12 months. We will either pay or release the liability for uncertain income tax positions as tax audits are completed or settled, statutes of limitation expire or other new information becomes available. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Jul. 29, 2017 | |
Earnings per Share | |
Earnings per Share | Note 13: Earnings per Share Certain share-based compensation awards that entitle their holders to receive non-forfeitable dividends prior to vesting are considered participating securities. We grant restricted stock awards that contain non-forfeitable rights to dividends on unvested shares, and we are required to include these participating securities in calculating our basic earnings per common share, using the two-class method. The following is a reconciliation of the numerators and denominators we used in our computations of basic and diluted earnings per share: Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Numerator (basic and diluted): Net income attributable to La-Z-Boy Incorporated $ $ Income allocated to participating securities ) ) Net income available to common shareholders $ $ Denominator: Basic weighted average common shares outstanding Add: Contingent common shares Stock option dilution Diluted weighted average common shares outstanding The above values for contingent common shares reflect the dilutive effect of common shares that we would have issued to employees under the terms of performance-based share awards if the relevant performance period for the award had been the reporting period. We did not exclude any outstanding options from the diluted share calculation for the quarter ended July 29, 2017, and July 30, 2016. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jul. 29, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14: Fair Value Measurements Accounting standards require that we put financial assets and liabilities into one of three categories based on the inputs we use to value them: · Level 1 — Financial assets and liabilities the values of which are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access. · Level 2 — Financial assets and liabilities the values of which are based on quoted prices in markets that are not active or on model inputs that are observable for substantially the full term of the asset or liability. · Level 3 — Financial assets and liabilities the values of which are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Accounting standards require that in making fair value measurements, we use observable market data when available. When inputs used to measure fair value fall within different levels of the hierarchy, we categorize the fair value measurement as being in the lowest level that is significant to the measurement. We recognize transfers between levels of the fair value hierarchy at the end of the reporting period in which they occur. In addition to assets and liabilities that we record at fair value on a recurring basis, we are required to record assets and liabilities at fair value on a non-recurring basis. We measure non-financial assets such as other intangible assets, goodwill, and other long-lived assets at fair value when there is an indicator of impairment, and we record them at fair value only when we recognize an impairment loss. The following table presents the fair value hierarchy for those assets we measured at fair value on a recurring basis at July 29, 2017, and April 29, 2017: At July 29, 2017 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 (a) Level 2 (a) Level 3 (b) Assets Available-for-sale investments $ $ $ — Trading securities — — Held-to-maturity investments — — Cost basis investments — — Total assets $ $ $ Liabilities Contingent consideration liability $ — $ — $ (a) There were no transfers between Level 1 and Level 2 during the first quarter of fiscal 2018. (b) There were no transfers into or out of Level 3 during the first quarter of fiscal 2018. At April 29, 2017 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 (c) Level 2 (c) Level 3 (d) Assets Available-for-sale investments $ $ $ Trading securities — — Held-to-maturity investments — — Cost basis investment — — Total assets $ $ $ Liabilities Contingent consideration liability $ — $ — $ (c) There were no transfers between Level 1 and Level 2 during the first quarter of fiscal 2017. (d) There were no transfers into or out of Level 3 during the first quarter of fiscal 2017. At July 29, 2017, and April 29, 2017, we held available-for-sale marketable securities intended to enhance returns on our cash and to fund future obligations of our non-qualified defined benefit retirement plan, as well as trading securities to fund future obligations of our executive deferred compensation plan and our performance compensation retirement plan. We also held other fixed income and cost basis investments. The fair value measurements for our Level 1 and Level 2 securities are based on quoted prices in active markets, as well as through broker quotes and independent valuation providers, multiplied by the number of shares owned exclusive of any transaction costs. At July 29, 2017, our Level 3 investments included preferred shares of two privately-held companies, and a warrant to purchase common shares of one of these privately-held companies. We initially valued our Level 3 investments at their cost basis as of the date of purchase, because the cost basis was the best estimate of their fair value on the date of acquisition. During fiscal 2017, we recorded a $0.7 million unrealized gain in other comprehensive income related to a change in the fair value of the available-for-sale convertible debt security. During the first quarter of fiscal 2018, the available-for-sale convertible debt security converted to $3.0 million of cost-basis preferred shares of a privately-held company, and we recorded a gain of $2.2 million in other income (expense), net in our consolidated statement of income related to the conversion. We also invested another $2.5 million in the same privately-held company during the first quarter of fiscal 2018. Our Level 3 liability is a contingent consideration liability, and we estimate the fair value of this liability based on the present value of the probability-weighted future cash flows, which are unobservable inputs that are not supported by market activity. The following table is a reconciliation of our Level 3 assets and liabilities recorded at fair value using significant unobservable inputs: (Unaudited, amounts in thousands) Level 3 Assets Balance at April 29, 2017 $ Purchases Realized gain Unrealized gain reclassified to net income ) Balance at July 29, 2017 $ (Unaudited, amounts in thousands) Level 3 Liabilities Balance at April 29, 2017 $ Translation adjustment Balance at July 29, 2017 $ Our asset leveling presented above does not include certain available-for-sale investments that are measured at fair value using net asset value per share under the practical expedient methodology. These investments are still included in the total fair value column of the table in our investment footnote (see Note 6). The fair value of the investments measured using net asset value at July 29, 2017, and April 29, 2017, was $7.4 million and $7.1 million, respectively. |
Restricted Cash (Tables)
Restricted Cash (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Restricted Cash | |
Schedule of cash, cash equivalents and restricted cash | (Unaudited, amounts in thousands) 7/29/17 4/29/17 Cash and cash equivalents $ $ Restricted cash Total cash, cash equivalents and restricted cash $ $ |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Inventories | |
Summary of inventories | (Unaudited, amounts in thousands) 7/29/17 4/29/17 Raw materials $ $ Work in process Finished goods FIFO inventories Excess of FIFO over LIFO ) ) Total Inventories $ $ |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Goodwill and Other Intangible Assets | |
Roll-forward of goodwill | (Unaudited, amounts in thousands) Goodwill Balance at April 29, 2017 $ Translation adjustment Balance at July 29, 2017 $ |
Roll-forward of other intangible assets | (Unaudited, amounts in thousands) Trade Names Reacquired Other Total Other Balance at April 29, 2017 $ $ $ $ Amortization — ) ) ) Translation adjustment — Balance at July 29, 2017 $ $ $ $ |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Investments | |
Summary of investments | (Unaudited, amounts in thousands) 7/29/17 4/29/17 Short-term investments: Available-for-sale investments $ $ Trading securities Held-to-maturity investments Total short-term investments Long-term investments: Available-for-sale investments Cost basis investment Total long-term investments Total investments $ $ Investments to enhance returns on cash $ $ Investments to fund compensation/retirement plans $ $ Other investments $ $ |
Summary of unrealized gains, unrealized losses, and fair value by investment type | At July 29, 2017 (Unaudited, amounts in thousands) Gross Gross Fair Value Equity securities $ $ ) $ Fixed income ) Mutual funds — — Other — Total securities $ $ ) $ At April 29, 2017 (Unaudited, amounts in thousands) Gross Gross Fair Value Equity securities $ $ ) $ Fixed income ) Mutual funds — — Other ) Total securities $ $ ) $ |
Summary of sales of available-for-sale securities | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Proceeds from sales $ $ Gross realized gains Gross realized losses ) ) |
Pension Plans (Tables)
Pension Plans (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Pension Plans | |
Schedule of net periodic pension costs | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Service cost $ $ Interest cost Expected return on plan assets ) ) Net amortization Net periodic pension cost $ $ |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Product Warranties | |
Reconciliation of changes in product warranty liability | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Balance as of the beginning of the period $ $ Accruals during the period Settlements during the period ) ) Balance as of the end of the period $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Stock-Based Compensation | |
Summary of total stock-based compensation expense | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Equity-based awards expense $ $ Liability-based awards expense Total stock-based compensation expense $ $ |
Fair value assumptions for stock options | (Unaudited) Fiscal 2018 Risk-free interest rate % Dividend rate % Expected life in years Stock price volatility % Fair value per share $ |
Fair value assumptions for SARs | (Unaudited) Fiscal 2014 Risk-free interest rate % Dividend rate % Expected life in years Stock price volatility % Fair value per share $ |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Accumulated Other Comprehensive Loss | |
Activity in accumulated other comprehensive loss | (Unaudited, amounts in thousands) Translation Change in Unrealized Net pension Accumulated Balance at April 29, 2017 $ ) $ $ $ ) $ ) Changes before reclassifications — Amounts reclassified to net income — ) ) ) Tax effect — ) ) ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ) Balance at July 29, 2017 $ $ $ $ ) $ ) (Unaudited, amounts in thousands) Translation Change in Unrealized Net pension Accumulated Balance at April 30, 2016 $ ) $ ) $ $ ) $ ) Changes before reclassifications ) ) — ) Amounts reclassified to net income — Tax effect — ) ) ) Other comprehensive income (loss) attributable to La-Z-Boy Incorporated ) ) Balance at July 30, 2016 $ ) $ ) $ $ ) $ ) |
Components of non-controlling interest | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Balance as of the beginning of the period $ $ Net income Other comprehensive (income) loss ) Balance as of the end of the period $ $ |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Segment Information | |
Schedule of segment information | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Sales Upholstery segment: Sales to external customers $ $ Intersegment sales Upholstery segment sales Casegoods segment: Sales to external customers Intersegment sales Casegoods segment sales Retail segment sales Corporate and Other: Sales to external customers Intersegment sales Corporate and Other sales Eliminations ) ) Consolidated sales $ $ Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Operating Income (Loss) Upholstery segment $ $ Casegoods segment Retail segment Corporate and Other ) ) Consolidated operating income Interest expense Interest income Other income (expense), net ) Income before income taxes $ $ |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Earnings per Share | |
Reconciliation of numerators and denominators used in the computation of basic and diluted earnings per share | Quarter Ended (Unaudited, amounts in thousands) 7/29/17 7/30/16 Numerator (basic and diluted): Net income attributable to La-Z-Boy Incorporated $ $ Income allocated to participating securities ) ) Net income available to common shareholders $ $ Denominator: Basic weighted average common shares outstanding Add: Contingent common shares Stock option dilution Diluted weighted average common shares outstanding |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jul. 29, 2017 | |
Fair Value Measurements | |
Fair value hierarchy for assets and liabilities measured at fair value on a recurring basis | At July 29, 2017 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 (a) Level 2 (a) Level 3 (b) Assets Available-for-sale investments $ $ $ — Trading securities — — Held-to-maturity investments — — Cost basis investments — — Total assets $ $ $ Liabilities Contingent consideration liability $ — $ — $ (a) There were no transfers between Level 1 and Level 2 during the first quarter of fiscal 2018. (b) There were no transfers into or out of Level 3 during the first quarter of fiscal 2018. At April 29, 2017 Fair Value Measurements (Unaudited, amounts in thousands) Level 1 (c) Level 2 (c) Level 3 (d) Assets Available-for-sale investments $ $ $ Trading securities — — Held-to-maturity investments — — Cost basis investment — — Total assets $ $ $ Liabilities Contingent consideration liability $ — $ — $ (c) There were no transfers between Level 1 and Level 2 during the first quarter of fiscal 2017. (d) There were no transfers into or out of Level 3 during the first quarter of fiscal 2017. |
Reconciliation of Level 3 assets recorded at fair value using significant unobservable inputs | (Unaudited, amounts in thousands) Level 3 Assets Balance at April 29, 2017 $ Purchases Realized gain Unrealized gain reclassified to net income ) Balance at July 29, 2017 $ |
Reconciliation of Level 3 liabilities recorded at fair value using significant unobservable inputs | (Unaudited, amounts in thousands) Level 3 Liabilities Balance at April 29, 2017 $ Translation adjustment Balance at July 29, 2017 $ |
Basis of Presentation - Variabl
Basis of Presentation - Variable Interest Entities (Details) - Variable interest entities, not primary beneficiary | Jul. 29, 2017company |
Investments | |
Preferred share investments, number of privately-held companies | 2 |
Preferred share investments with common share warrant, number of privately-held companies | 1 |
Basis of Presentation - Legal S
Basis of Presentation - Legal Settlements (Details) | 3 Months Ended |
Jul. 30, 2016 | |
Basis of Presentation | |
Improvement in gross margin due to legal settlement (as a percent) | 0.70% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 29, 2017 | Jan. 28, 2017 | Jul. 30, 2016 | |
Acquisitions | |||
Cash paid | $ 15,879 | $ 5,281 | |
La-Z-Boy Wholesale Business in United Kingdom and Ireland | |||
Acquisitions | |||
Period until payment is due | 90 days | ||
Cash paid | $ 15,900 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Jul. 29, 2017 | Apr. 29, 2017 | Jul. 30, 2016 | Apr. 30, 2016 |
Restricted Cash | ||||
Cash and cash equivalents | $ 119,628 | $ 141,860 | ||
Restricted cash | 5,963 | 8,999 | ||
Total cash, cash equivalents and restricted cash | $ 125,591 | $ 150,859 | $ 126,142 | $ 121,335 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jul. 29, 2017 | Apr. 29, 2017 |
Inventories | ||
Raw materials | $ 83,546 | $ 83,371 |
Work in process | 11,839 | 11,320 |
Finished goods | 104,144 | 101,444 |
FIFO inventories | 199,529 | 196,135 |
Excess of FIFO over LIFO | (21,021) | (21,021) |
Total Inventories | $ 178,508 | $ 175,114 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Jul. 29, 2017USD ($) | |
Roll-forward of goodwill | |
Balance at beginning of period | $ 74,245 |
Translation adjustment | 521 |
Balance at end of period | $ 74,766 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Intangible Assets (Details) $ in Thousands | 3 Months Ended |
Jul. 29, 2017USD ($) | |
Roll-forward of other intangible assets | |
Balance at beginning of period | $ 18,489 |
Amortization | (361) |
Translation adjustment | 310 |
Balance at end of period | 18,438 |
Trade Names | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 1,155 |
Balance at end of period | 1,155 |
Reacquired Rights | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 13,747 |
Amortization | (261) |
Translation adjustment | 260 |
Balance at end of period | 13,746 |
Other Intangible Assets | |
Roll-forward of other intangible assets | |
Balance at beginning of period | 3,587 |
Amortization | (100) |
Translation adjustment | 50 |
Balance at end of period | $ 3,537 |
Investments - Other Investments
Investments - Other Investments (Details) | Jul. 30, 2016company |
Cost basis investments | |
Investments | |
Preferred share investments, number of privately-held companies | 2 |
Investments - Components (Detai
Investments - Components (Details) - USD ($) $ in Thousands | Jul. 29, 2017 | Apr. 29, 2017 |
Investments | ||
Total investments | $ 58,323 | $ 53,677 |
Investments to enhance returns on cash | ||
Investments | ||
Total investments | 33,427 | 33,087 |
Investments to fund compensation/retirement plans | ||
Investments | ||
Total investments | 13,942 | 13,690 |
Other investments | ||
Investments | ||
Total investments | 10,954 | 6,900 |
Other current assets | ||
Investments | ||
Available-for-sale investments | 14,788 | 15,040 |
Trading securities | 21 | 6 |
Held-to-maturity investments | 1,934 | 1,867 |
Total investments | 16,743 | 16,913 |
Other long-term assets | ||
Investments | ||
Available-for-sale investments | 30,626 | 31,264 |
Cost basis investment | 10,954 | 5,500 |
Total investments | $ 41,580 | $ 36,764 |
Investments - Unrealized Gains
Investments - Unrealized Gains and Losses and Fair Value (Details) - USD ($) $ in Thousands | Jul. 29, 2017 | Apr. 29, 2017 |
Summary of investments | ||
Gross Unrealized Gains | $ 2,021 | $ 2,526 |
Gross Unrealized Losses | (96) | (163) |
Fair Value | 58,323 | 53,677 |
Equity securities | ||
Summary of investments | ||
Gross Unrealized Gains | 1,912 | 1,796 |
Gross Unrealized Losses | (39) | (83) |
Fair Value | 18,677 | 13,610 |
Fixed income | ||
Summary of investments | ||
Gross Unrealized Gains | 75 | 729 |
Gross Unrealized Losses | (57) | (72) |
Fair Value | 36,205 | 37,580 |
Mutual funds | ||
Summary of investments | ||
Fair Value | 21 | 6 |
Other | ||
Summary of investments | ||
Gross Unrealized Gains | 34 | 1 |
Gross Unrealized Losses | (8) | |
Fair Value | $ 3,420 | $ 2,481 |
Investments - Sales and Maturit
Investments - Sales and Maturities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Sales of available-for-sale securities | ||
Proceeds from sales | $ 5,857 | $ 3,670 |
Gross realized gains | 402 | 31 |
Gross realized losses | (221) | $ (36) |
Fair value of available-for-sale securities by contractual maturity | ||
Fair value, available-for-sale securities with contractual maturity within one year | 15,000 | |
Fair value, available-for-sale securities with contractual maturity within two to five years | 19,500 | |
Fair value, available-for-sale securities with contractual maturity within six to ten years | 1,300 | |
Fair value, available-for-sale securities with contractual maturity after ten years | $ 400 |
Pension Plans (Details)
Pension Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Net periodic pension costs | ||
Service cost | $ 329 | $ 319 |
Interest cost | 1,147 | 1,170 |
Expected return on plan assets | (1,204) | (1,245) |
Net amortization | 780 | 764 |
Net periodic pension cost | $ 1,052 | $ 1,008 |
Product Warranties (Details)
Product Warranties (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 29, 2017 | Jul. 30, 2016 | Apr. 29, 2017 | |
Reconciliation of changes in product warranty liability | |||
Balance as of the beginning of the period | $ 21,870 | $ 20,511 | |
Accruals during the period | 4,853 | 5,135 | |
Settlements during the period | (4,841) | (4,738) | |
Balance as of the end of the period | 21,882 | $ 20,908 | |
Product warranty liability included in accrued expenses and other current liabilities | $ 13,100 | $ 13,200 | |
Upholstery Segment | |||
Product Warranties | |||
Percentage of warranty liability relating to the segment | 95.00% | ||
Fabric and leather | |||
Product Warranties | |||
Warranty term | 1 year | ||
Cushions and padding | Minimum | |||
Product Warranties | |||
Warranty term | 1 year | ||
Cushions and padding | Maximum | |||
Product Warranties | |||
Warranty term | 10 years | ||
Labor costs relating to parts | |||
Product Warranties | |||
Warranty term | 1 year |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Stock-based compensation expense recognized for outstanding grants | ||
Equity-based awards expense | $ 3,558 | $ 3,329 |
Liability-based awards expense | 896 | 1,499 |
Total stock-based compensation expense | $ 4,454 | $ 4,828 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - Stock Options | 3 Months Ended |
Jul. 29, 2017$ / sharesshares | |
Stock-Based Compensation | |
Shares granted (in shares) | shares | 573,591 |
Fair value assumptions | |
Risk-free interest rate (as a percent) | 1.84% |
Dividend rate (as a percent) | 1.61% |
Expected life in years | 5 years |
Stock price volatility (as a percent) | 32.12% |
Fair value per share (in dollars per share) | $ / shares | $ 7.16 |
Minimum | |
Stock-Based Compensation | |
Vesting period | 1 year |
Maximum | |
Stock-Based Compensation | |
Vesting period | 4 years |
Stock-Based Compensation - SARs
Stock-Based Compensation - SARs (Details) - Stock Appreciation Rights | 3 Months Ended |
Jul. 29, 2017$ / shares | |
Stock-Based Compensation | |
Percentage vesting each year from date of grant | 25.00% |
Period from grant date for first vesting | 1 year |
Vesting period | 4 years |
Fiscal 2014 Grant | |
Fair value assumptions | |
Risk-free interest rate (as a percent) | 1.20% |
Dividend rate (as a percent) | 1.33% |
Expected life in years | 10 months 17 days |
Stock price volatility (as a percent) | 36.21% |
Fair value per share (in dollars per share) | $ 13.94 |
Fiscal 2013 Grant | |
Fair value assumptions | |
Fair value per share (in dollars per share) | $ 21.03 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and RSUs (Details) - Restricted Stock | 3 Months Ended |
Jul. 29, 2017$ / sharesshares | |
Stock-Based Compensation | |
Granted (in shares) | shares | 102,662 |
Granted (in dollars per share/unit) | $ / shares | $ 27.25 |
Percentage vesting each year from date of grant | 25.00% |
Period from grant date for first vesting | 1 year |
Vesting period | 4 years |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Awards (Details) | 3 Months Ended |
Jul. 29, 2017$ / sharesshares | |
Performance Awards | |
Stock-Based Compensation | |
Percentage of payout dependent on financial performance | 80.00% |
Percentage of payout dependent on total shareholder return | 20.00% |
Performance awards, performance period | 3 years |
Performance Awards | Minimum | |
Stock-Based Compensation | |
Performance award opportunity as a percentage of target award | 50.00% |
Performance Awards | Maximum | |
Stock-Based Compensation | |
Performance award opportunity as a percentage of target award | 200.00% |
Performance-Based Shares | |
Stock-Based Compensation | |
Number of shares or units granted | shares | 177,805 |
Performance-Based Shares, vesting based on performance goals | Fiscal 2018 Grant | |
Stock-Based Compensation | |
Fair value on date of grant (in dollars per share) | $ 25.93 |
Performance Based Shares, vesting based on market conditions | Fiscal 2018 Grant | |
Stock-Based Compensation | |
Fair value on date of grant (in dollars per share) | $ 36.24 |
Accumulated Other Comprehensi51
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Activity in accumulated other comprehensive loss | ||
Balance | $ 589,919 | |
Balance | 591,312 | |
Components of non-controlling interest | ||
Balance as of the beginning of the period | 11,186 | $ 10,070 |
Net income | 93 | 202 |
Other comprehensive (income) loss | 405 | (28) |
Balance as of the end of the period | 11,684 | 10,244 |
Accumulated Other Comprehensive Loss | ||
Activity in accumulated other comprehensive loss | ||
Balance | (32,883) | (34,000) |
Changes before reclassifications | 3,160 | (993) |
Amounts reclassified to net income | (80) | 1,339 |
Tax effect | (445) | (147) |
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 2,635 | 199 |
Balance | (30,248) | (33,801) |
Translation adjustment | ||
Activity in accumulated other comprehensive loss | ||
Balance | (927) | (445) |
Changes before reclassifications | 1,911 | (40) |
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 1,911 | (40) |
Balance | 984 | (485) |
Change in fair value of cash flow hedge | ||
Activity in accumulated other comprehensive loss | ||
Balance | 74 | (286) |
Changes before reclassifications | 855 | (1,279) |
Amounts reclassified to net income | (83) | 512 |
Tax effect | (294) | 292 |
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 478 | (475) |
Balance | 552 | (761) |
Unrealized gain on marketable securities | ||
Activity in accumulated other comprehensive loss | ||
Balance | 1,752 | 1,058 |
Changes before reclassifications | 394 | 326 |
Amounts reclassified to net income | (832) | 5 |
Tax effect | 167 | (126) |
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | (271) | 205 |
Balance | 1,481 | 1,263 |
Net pension amortization and net actuarial loss | ||
Activity in accumulated other comprehensive loss | ||
Balance | (33,782) | (34,327) |
Amounts reclassified to net income | 835 | 822 |
Tax effect | (318) | (313) |
Other comprehensive income (loss) attributable to La-Z-Boy Incorporated | 517 | 509 |
Balance | $ (33,265) | $ (33,818) |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Jul. 29, 2017storesegmentitem | |
Upholstery Segment | |
Segment Information | |
Number of operating units | segment | 2 |
Casegoods Segment | |
Segment Information | |
Number of brands | item | 3 |
Retail Segment | |
Segment Information | |
Number of stores | store | 145 |
Segment Information - Income St
Segment Information - Income Statement Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Segment Information | ||
Sales | $ 357,079 | $ 340,783 |
Operating income | 16,298 | 22,458 |
Interest expense | 157 | 115 |
Interest income | 343 | 204 |
Other income (expense), net | 1,749 | (762) |
Income before income taxes | 18,233 | 21,785 |
Upholstery Segment | ||
Segment Information | ||
Sales | 224,814 | 223,809 |
Casegoods Segment | ||
Segment Information | ||
Sales | 21,019 | 20,585 |
Retail Segment | ||
Segment Information | ||
Sales | 110,516 | 95,720 |
Corporate and Other, non-segment | ||
Segment Information | ||
Sales | 730 | 669 |
Operating Segments | Upholstery Segment | ||
Segment Information | ||
Sales | 274,407 | 267,416 |
Operating income | 23,299 | 30,499 |
Operating Segments | Casegoods Segment | ||
Segment Information | ||
Sales | 25,510 | 25,038 |
Operating income | 2,739 | 2,147 |
Operating Segments | Retail Segment | ||
Segment Information | ||
Operating income | 1,767 | 2,183 |
Corporate and Other | ||
Segment Information | ||
Operating income | (11,507) | (12,371) |
Corporate and Other | Corporate and Other, non-segment | ||
Segment Information | ||
Sales | 2,660 | 1,879 |
Eliminations | ||
Segment Information | ||
Sales | (56,014) | (49,270) |
Eliminations | Upholstery Segment | ||
Segment Information | ||
Sales | (49,593) | (43,607) |
Eliminations | Casegoods Segment | ||
Segment Information | ||
Sales | (4,491) | (4,453) |
Eliminations | Corporate and Other, non-segment | ||
Segment Information | ||
Sales | $ (1,930) | $ (1,210) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Income Taxes | ||
Effective tax rate (as a percent) | 35.60% | 35.70% |
Statutory tax rate (as a percent) | 35.00% | |
Net liability for uncertain income tax positions | $ 0.9 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Jul. 30, 2016 | |
Numerator (basic and diluted): | ||
Net income attributable to La-Z-Boy Incorporated | $ 11,651 | $ 13,806 |
Income allocated to participating securities, basic | (57) | (69) |
Income allocated to participating securities, diluted | (57) | (69) |
Net income available to common shareholders, basic | 11,594 | 13,737 |
Net income available to common shareholders, diluted | $ 11,594 | $ 13,737 |
Denominator | ||
Basic weighted average common shares outstanding (in shares) | 48,357 | 49,105 |
Add: | ||
Contingent common shares (in shares) | 175 | 131 |
Stock option dilution (in shares) | 314 | 358 |
Diluted weighted average common shares outstanding (in shares) | 48,846 | 49,594 |
Fair Value Measurements - Hiera
Fair Value Measurements - Hierarchy and Transfers (Details) $ in Thousands | 3 Months Ended | ||
Jul. 29, 2017USD ($)company | Jul. 30, 2016USD ($)company | Apr. 29, 2017USD ($) | |
Assets | |||
Total assets | $ 58,323 | $ 53,677 | |
Cost basis investments | |||
Liabilities | |||
Preferred share investments, number of privately-held companies | company | 2 | ||
Recurring basis | |||
Liabilities | |||
Transfers from Level 1 to Level 2 assets | 0 | $ 0 | |
Transfers from Level 2 to Level 1 assets | 0 | 0 | |
Transfers into Level 3 assets | 0 | 0 | |
Transfers out of Level 3 assets | 0 | 0 | |
Transfers into Level 3 liabilities | 0 | 0 | |
Transfers out of Level 3 liabilities | 0 | 0 | |
Level 1 | Recurring basis | |||
Assets | |||
Total assets | 3,114 | 3,083 | |
Level 1 | Recurring basis | Available-for-sale investments | |||
Assets | |||
Total assets | 1,180 | 1,217 | |
Level 1 | Recurring basis | Held-to-maturity investments | |||
Assets | |||
Total assets | 1,934 | 1,866 | |
Level 2 | Recurring basis | |||
Assets | |||
Total assets | 36,815 | 36,644 | |
Level 2 | Recurring basis | Available-for-sale investments | |||
Assets | |||
Total assets | 36,794 | 36,638 | |
Level 2 | Recurring basis | Trading securities | |||
Assets | |||
Total assets | $ 21 | 6 | |
Level 3 | |||
Liabilities | |||
Preferred share investments, number of privately-held companies | company | 2 | ||
Preferred share investments with common share warrant, number of privately-held companies | company | 1 | ||
Available-for-sale securities converted to cost basis investment | $ 3,000 | ||
Level 3 | Recurring basis | |||
Assets | |||
Total assets | 10,954 | 6,900 | |
Liabilities | |||
Contingent consideration liability | 1,284 | 1,248 | |
Level 3 | Recurring basis | Available-for-sale investments | |||
Assets | |||
Total assets | 1,400 | ||
Level 3 | Recurring basis | Cost basis investments | |||
Assets | |||
Total assets | $ 10,954 | $ 5,500 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 29, 2017 | Apr. 29, 2017 | |
Reconciliation of Level 3 assets recorded at fair value using significant unobservable inputs | ||
Balance at beginning of period | $ 6,900 | |
Purchases | 2,500 | |
Realized gain | 2,204 | |
Unrealized gain reclassified to net income | (650) | |
Balance at end of period | 10,954 | |
Reconciliation of Level 3 liabilities recorded at fair value using significant unobservable inputs | ||
Balance at beginning of period | 1,248 | |
Translation adjustment | 36 | |
Balance at end of period | 1,284 | |
Available-for-sale investments | ||
Investments not included in the fair value hierarchy | ||
Fair value of investments measured using net asset value | $ 7,400 | $ 7,100 |
Recent Accounting Pronouncement
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 29, 2017 | Jul. 30, 2016 | Apr. 29, 2017 | Apr. 30, 2016 | |
Accounting pronouncements adopted in fiscal 2018 | ||||
Unrecognized excess tax benefits from share-based payments | $ 0 | |||
Cash flows from financing activities | $ (16,517) | $ (16,582) | ||
Cash flows from operating activities | 19,508 | 35,753 | ||
Cash, cash equivalents and restricted cash | 125,591 | 126,142 | $ 150,859 | $ 121,335 |
Net cash provided by (used for) investing activities | (29,110) | (14,480) | ||
Operating income | 16,298 | 22,458 | ||
Other income (expense), net | $ 1,749 | (762) | ||
Accounting Standards Update 2016-09 - Stock Compensation | ||||
Accounting pronouncements adopted in fiscal 2018 | ||||
Cash flows from financing activities | 1,700 | |||
Cash flows from operating activities | (1,700) | |||
Accounting Standards Update 2016-18 - Restricted Cash | Early Adoption, Effect | ||||
Accounting pronouncements adopted in fiscal 2018 | ||||
Cash, cash equivalents and restricted cash | 9,000 | $ 9,000 | ||
Accounting Standards Update 2016-18 - Restricted Cash | Maximum | Early Adoption, Effect | ||||
Accounting pronouncements adopted in fiscal 2018 | ||||
Net cash provided by (used for) investing activities | 100 | |||
Accounting Standards Update 2017-07 - Pension Costs | Early Adoption, Effect | ||||
Accounting pronouncements adopted in fiscal 2018 | ||||
Operating income | 700 | |||
Other income (expense), net | $ (700) |