La-Z-Boy (LZB) 8-K La-z-boy Reports Fiscal 2020 First-quarter Results

Exhibit 99.2

LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME

	Quarter Ended
(Unaudited, amounts in thousands, except per share data)	7/27/19			7/28/18
Sales	$	413,633		$	384,695
Cost of sales	245,921			236,173
Gross profit	167,712			148,522
Selling, general and administrative expense	144,290			125,362
Operating income	23,422			23,160
Interest expense	(318		)	(104		)
Interest income	727			602
Other income (expense), net	(760		)	892
Income before income taxes	23,071			24,550
Income tax expense	5,083			5,599
Net income	17,988			18,951
Net (income) loss attributable to noncontrolling interests	81			(648		)
Net income attributable to La-Z-Boy Incorporated	$	18,069		$	18,303
Basic weighted average common shares	46,820			46,716
Basic net income attributable to La-Z-Boy Incorporated per share	$	0.39		$	0.39
Diluted weighted average common shares	47,125			47,161
Diluted net income attributable to La-Z-Boy Incorporated per share	$	0.38		$	0.39

LA-Z-BOY INCORPORATED

CONSOLIDATED BALANCE SHEET

(Unaudited, amounts in thousands, except par value)	7/27/19			4/27/19
Current assets
Cash and equivalents	$	111,622		$	129,819
Restricted cash	1,970			1,968
Receivables, net of allowance of $2,177 at 7/27/19 and $2,180 at 4/27/19	134,379			143,288
Inventories, net	197,701			196,899
Other current assets	85,631			69,144
Total current assets	531,303			541,118
Property, plant and equipment, net	204,789			200,523
Goodwill	184,675			185,867
Other intangible assets, net	29,595			29,907
Deferred income taxes — long-term	21,906			20,670
Right of use lease asset	312,433			—
Other long-term assets, net	77,449			81,705
Total assets	$	1,362,150		$	1,059,790
Current liabilities
Current portion of long-term debt	$	—		$	180
Accounts payable	62,935			65,365
Lease liability, short-term	64,158			—
Accrued expenses and other current liabilities	168,757			173,091
Total current liabilities	295,850			238,636
Long-term debt	—			19
Lease liability, long-term	262,264			—
Other long-term liabilities	105,898			124,159
Shareholders’ equity
Preferred shares — 5,000 authorized; none issued	—			—
Common shares, $1 par value — 150,000 authorized; 46,690 outstanding at 7/27/19 and 46,955 outstanding at 4/27/19	46,690			46,955
Capital in excess of par value	311,207			313,168
Retained earnings	329,096			325,847
Accumulated other comprehensive loss	(3,728		)	(3,462		)
Total La-Z-Boy Incorporated shareholders’ equity	683,265			682,508
Noncontrolling interests	14,873			14,468
Total equity	698,138			696,976
Total liabilities and equity	$	1,362,150		$	1,059,790

LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19			7/28/18
Cash flows from operating activities
Net income	$	17,988		$	18,951
Adjustments to reconcile net income to cash provided by (used for) operating activities
Gain on disposal of assets	(536		)	—
Change in deferred taxes	(677		)	(183		)
Provision for doubtful accounts	116			279
Depreciation and amortization	7,298			7,541
Equity-based compensation expense	1,675			2,040
Change in receivables	8,535			14,236
Change in inventories	(527		)	(11,092		)
Change in other assets	7,305			463
Change in payables	(1,391		)	2,491
Change in other liabilities	(20,446		)	(2,572		)
Net cash provided by operating activities	19,340			32,154
Cash flows from investing activities
Proceeds from disposals of assets	22			61
Proceeds from insurance	642			58
Capital expenditures	(12,299		)	(15,873		)
Purchases of investments	(5,288		)	(4,190		)
Proceeds from sales of investments	4,060			4,762
Acquisitions, net of cash acquired	(5,438		)	—
Net cash used for investing activities	(18,301		)	(15,182		)
Cash flows from financing activities
Payments on debt and finance lease liabilities	(47		)	(59		)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes	(1,417		)	(2,009		)
Purchases of common stock	(12,313		)	(7,944		)
Dividends paid	(6,112		)	(5,625		)
Net cash used for financing activities	(19,889		)	(15,637		)
Effect of exchange rate changes on cash and equivalents	655			(1,601		)
Change in cash, cash equivalents and restricted cash	(18,195		)	(266		)
Cash, cash equivalents and restricted cash at beginning of Period	131,787			136,871
Cash, cash equivalents and restricted cash at end of period	$	113,592		$	136,605
Supplemental disclosure of non-cash investing activities
Capital expenditures included in payables	$	2,416		$	4,122

LA-Z-BOY INCORPORATED

SEGMENT INFORMATION

	Quarter Ended
(Unaudited, amounts in thousands)	7/27/19			7/28/18
Sales
Upholstery segment:
Sales to external customers	$	230,767		$	240,054
Intersegment sales	62,649			53,344
Upholstery segment sales	293,416			293,398
Casegoods segment:
Sales to external customers	22,006			24,403
Intersegment sales	5,129			3,983
Casegoods segment sales	27,135			28,386
Retail segment sales	142,996			119,228
Corporate and Other:
Sales to external customers	17,864			1,010
Intersegment sales	2,688			2,855
Corporate and Other sales	20,552			3,865
Eliminations	(70,466		)	(60,182		)
Consolidated sales	$	413,633		$	384,695
Operating Income (Loss)
Upholstery segment	$	26,267		$	23,884
Casegoods segment	2,597			3,080
Retail segment	8,477			4,458
Corporate and Other	(13,919		)	(8,262		)
Consolidated operating income	23,422			23,160

LA-Z-BOY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

	Quarter Ended
(Amounts in thousands, except per share data)	7/27/2019			7/28/2018
GAAP gross profit	$	167,712		$	148,522
Add back: Purchase accounting charges — incremental expense upon the sale of inventory acquired at fair value	117			42
Add back: Supply chain optimization initiative	1,508			—
Non-GAAP gross profit	$	169,337		$	148,564
GAAP SG&A	$	144,290		$	125,362
Less: Purchase accounting charges — amortization of intangible assets and retention agreements	(1,192		)	(104		)
Non-GAAP SG&A	$	143,098		$	125,258
GAAP operating income	$	23,422		$	23,160
Add back: Purchase accounting charges	1,309			146
Add back: Supply chain optimization initiative	1,508			—
Non-GAAP operating income	$	26,239		$	23,306
GAAP income before income taxes	$	23,071		$	24,550
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense	1,502			146
Add back: Supply chain optimization initiative	1,508			—
Non-GAAP income before income taxes	$	26,081		$	24,696
GAAP net income attributable to La-Z-Boy Incorporated	$	18,069		$	18,303
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense	1,502			146
Less: Tax effect of purchase accounting	(330		)	(33		)
Add back: Supply chain optimization initiative	1,508			—
Less: Tax effect of supply chain optimization Initiative	(332		)	—
Non-GAAP net income attributable to La-Z-Boy Incorporated	$	20,417		$	18,416
GAAP net income attributable to La-Z-Boy Incorporated per diluted share	$	0.38		$	0.39
Add back: Purchase accounting charges, net of tax, per share	0.02			—
Add back: Supply chain optimization initiative, net of tax, per share	0.02			—
Non-GAAP net income attributable to La-Z- Boy Incorporated per diluted share	$	0.42		$	0.39

LA-Z-BOY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

SEGMENT INFORMATION

	Quarter Ended
(Amounts in thousands)	7/27/2019			% of sales		7/28/2018			% of sales
GAAP operating income (loss)
Upholstery segment	$	26,267		9.0	%	$	23,884		8.1	%
Casegoods segment	2,597			9.6	%	3,080			10.9	%
Retail segment	8,477			5.9	%	4,458			3.7	%
Corporate and Other	(13,919		)	N/M		(8,262		)	N/M
GAAP Consolidated operating income	$	23,422		5.7	%	23,160			6.0	%
Purchase accounting and supply chain optimization initiative affecting operating income
Upholstery segment	$	1,563				$	104
Casegoods segment	—					—
Retail segment	117					42
Corporate and Other	1,137					—
Consolidated Non-GAAP charges affecting operating income	$	2,817				$	146
Non-GAAP operating income (loss)
Upholstery segment	$	27,830		9.5	%	$	23,988		8.2	%
Casegoods segment	2,597			9.6	%	3,080			10.9	%
Retail segment	8,594			6.0	%	4,500			3.8	%
Corporate and Other	(12,782		)	N/M		(8,262		)	N/M
Non-GAAP Consolidated operating income	$	26,239		6.3	%	$	23,306		6.1	%

N/M — Not Meaningful