Quarter Ended

(Unaudited, amounts in thousands, except per share data)

10/28/17

10/29/16

Sales

$393,205

$376,579

Cost of sales

238,253

227,195

Gross profit

154,952

149,384

Selling, general and administrative expense

120,683

115,526

Operating income

34,269

33,858

Interest expense

160

117

Interest income

376

234

Other income (expense), net

(926

)

(969

)

Income before income taxes

33,559

33,006

Income tax expense

10,353

11,901

Net income

23,206

21,105

Net income attributable to noncontrolling interests

(310

)

(272

)

Net income attributable to La-Z-Boy Incorporated

$22,896

$20,833

Basic weighted average common shares

47,964

49,153

Basic net income attributable to La-Z-Boy Incorporated per share

$0.47

$0.42

Diluted weighted average common shares

48,297

49,511

Diluted net income attributable to La-Z-Boy Incorporated per share

$0.47

$0.42

Dividends declared per share

$0.11

$0.10

Six Months Ended

(Unaudited, amounts in thousands, except per share data)

10/28/17

10/29/16

Sales

$750,284

$717,362

Cost of sales

456,229

433,757

Gross profit

294,055

283,605

Selling, general and administrative expense

243,488

227,289

Operating income

50,567

56,316

Interest expense

317

232

Interest income

719

438

Gain on conversion of investment

2,204

—

Other income (expense), net

(1,381

)

(1,731

)

Income before income taxes

51,792

54,791

Income tax expense

16,842

19,678

Net income

34,950

35,113

Net income attributable to noncontrolling interests

(403

)

(474

)

Net income attributable to La-Z-Boy Incorporated

$34,547

$34,639

Basic weighted average common shares

48,160

49,129

Basic net income attributable to La-Z-Boy Incorporated per share

$0.71

$0.70

Diluted weighted average common shares

48,537

49,554

Diluted net income attributable to La-Z-Boy Incorporated per share

$0.71

$0.70

Dividends declared per share

$0.22

$0.20

(Unaudited, amounts in thousands, except par value)

10/28/17

4/29/17

Current assets

Cash and equivalents

$122,345

$141,860

Restricted cash

2,352

8,999

Receivables, net of allowance of $2,656 at 10/28/17 and $2,563 at 4/29/17

145,167

150,846

Inventories, net

180,050

175,114

Other current assets

46,201

40,603

Total current assets

496,115

517,422

Property, plant and equipment, net

171,510

169,132

Goodwill

74,646

74,245

Other intangible assets, net

17,984

18,489

Deferred income taxes – long-term

40,097

40,131

Other long-term assets, net

81,191

69,436

Total assets

$881,543

$888,855

Current liabilities

Current portion of long-term debt

$238

$219

Accounts payable

53,426

51,282

Accrued expenses and other current liabilities

133,257

147,175

Total current liabilities

186,921

198,676

Long-term debt

314

296

Other long-term liabilities

89,950

88,778

Contingencies and commitments

Shareholders’ equity

Preferred shares – 5,000 authorized; none issued

—

—

Common shares, $1 par value – 150,000 authorized; 47,540 outstanding at 10/28/17 and 48,472 outstanding at 4/29/17

47,540

48,472

Capital in excess of par value

295,891

289,632

Retained earnings

279,344

284,698

Accumulated other comprehensive loss

(30,511

)

(32,883

)

Total La-Z-Boy Incorporated shareholders’ equity

592,264

589,919

Noncontrolling interests

12,094

11,186

Total equity

604,358

601,105

Total liabilities and equity

$881,543

$888,855

Six Months Ended

(Unaudited, amounts in thousands)

10/28/17

10/29/16

Cash flows from operating activities

Net income

$34,950

$35,113

Adjustments to reconcile net income to cash provided by (used for) operating activities

Gain on disposal of assets

(1,884

)

(62

)

Gain on conversion of investment

(2,204

)

—

Deferred income tax expense

(403

)

1,089

Provision for doubtful accounts

74

(18

)

Depreciation and amortization

15,869

13,999

Equity-based compensation expense

6,410

5,880

Pension plan contributions

(2,000

)

(2,300

)

Change in receivables

6,165

784

Change in inventories

(4,096

)

(3,747

)

Change in other assets

(7,935

)

(1,806

)

Change in payables

2,136

1,549

Change in other liabilities

4,142

3,622

Net cash provided by operating activities

51,224

54,103

Cash flows from investing activities

Proceeds from disposals of assets

608

143

Proceeds from property insurance

1,485

—

Capital expenditures

(16,372

)

(10,226

)

Purchases of investments

(18,507

)

(17,814

)

Proceeds from sales of investments

11,529

9,757

Acquisitions, net of cash acquired

(15,879

)

(15,997

)

Net cash used for investing activities

(37,136

)

(34,137

)

Cash flows from financing activities

Payments on debt

(131

)

(156

)

Stock issued for stock and employee benefit plans, net of shares withheld for taxes

356

1,371

Excess tax benefit on stock option exercises

—

1,826

Purchases of common stock

(30,692

)

(19,766

)

Dividends paid

(10,648

)

(9,869

)

Net cash used for financing activities

(41,115

)

(26,594

)

Effect of exchange rate changes on cash and equivalents

865

(149

)

Change in cash, cash equivalents and restricted cash

(26,162

)

(6,777

)

Cash, cash equivalents and restricted cash at beginning of period

150,859

121,335

Cash, cash equivalents and restricted cash at end of period

$124,697

$114,558

Supplemental disclosure of non-cash investing activities capital expenditures included in payables

$1,631

$681

Quarter Ended

Six Months Ended

(Unaudited, amounts in thousands)

10/28/17

10/29/16

10/28/17

10/29/16

Sales

Upholstery segment:

Sales to external customers

$251,741

$244,898

$476,555

$468,707

Intersegment sales

53,020

50,891

102,613

94,498

Upholstery segment sales

304,761

295,789

579,168

563,205

Casegoods segment:

Sales to external customers

23,915

23,567

44,934

44,152

Intersegment sales

4,150

2,321

8,641

6,774

Casegoods segment sales

28,065

25,888

53,575

50,926

Retail segment sales

116,737

107,365

227,253

203,085

Corporate and Other:

Sales to external customers

812

749

1,542

1,418

Intersegment sales

2,091

1,563

4,021

2,773

Corporate and Other sales

2,903

2,312

5,563

4,191

Eliminations

(59,261

)

(54,775

)

(115,275

)

(104,045

)

Consolidated sales

$393,205

$376,579

$750,284

$717,362

Operating Income (Loss)

Upholstery segment

$33,424

$38,220

$56,723

$68,719

Casegoods segment

3,302

2,847

6,041

4,994

Retail segment

3,903

3,007

5,670

5,190

Corporate and Other

(6,360

)

(10,216

)

(17,867

)

(22,587

)

Consolidated operating income

$34,269

$33,858

$50,567

$56,316