GlobeNewswire Inc | Jun 15, 2021 04:15PM EDT

June 15, 2021

MONROE, Mich., June 15, 2021 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, today reported strong operating results for the fiscal 2021 fourth quarter and full year ended April24, 2021.

Fiscal 2021 fourth quarter versus Fiscal 2020 fourth quarter

-- Consolidated sales increased 41% to $519.5 million -- Written same-store sales for the entire La-Z-Boy Furniture Galleriesnetwork doubled, increasing 100% -- Consolidated operating margin: GAAP: 9.6% versus 3.7%Non-GAAP(1): 10.0% versus 9.3% Wholesale(2): 10.2% versus 11.1%Retail: 12.2% versus 10.8% -- Net income attributable to La-Z-Boy Incorporated per diluted share (EPS): GAAP: $0.81 versus $0.05Non-GAAP(1): $0.87 versus $0.49 -- The company returned $50 million to shareholders through share repurchases and dividends

Fiscal 2021 full year versus Fiscal 2020 full year

-- Consolidated sales increased 1.8% to $1.7 billion -- Written same-store sales for the entire La-Z-Boy Furniture Galleries network increased 31% -- Consolidated operating margin: GAAP: 7.9% versus 7.0%Non-GAAP(1): 9.0% versus 8.2% Wholesale(2): 10.6% versus 10.6%Retail: 7.7% versus 8.2%Joybird became profitable -- Net income attributable to La-Z-Boy Incorporated per diluted share (EPS): GAAP: $2.30 versus $1.66Non-GAAP(1): $2.62 versus $2.16 -- Cash generated from operating activities of $310 million versus $164 million in the prior year -- Cash(3) at fiscal year end increased to $395 million versus $264 million in the prior year -- The company returned $61 million to shareholders through share repurchases and dividends

Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy, said, "In an extremely difficult year marked by the pandemic, related macroeconomic uncertainty and supply chain disruption, we delivered strong results. Our start to the fiscal year in May 2020 came as the world was still in the early stages of its COVID-19 response. We had just restarted our plants after a month-long shutdown and retailers were slowly beginning to reopen. Progressing strongly from that starting point, for the fiscal 2021 full year, we delivered consolidated non-GAAP(1) operating margin of 9%, generated $310 million in cash from operations, and returned $61 million to shareholders through share repurchases and dividends. Additionally, we strengthened our business by significantly expanding production capacity, enhanced our retail platform, including the acquisition of the Seattle-based La-Z-Boy Furniture Galleries stores, and turned Joybird profitable. All business units are experiencing record demand, demonstrating the strength of our brands in the marketplace combined with fantastic execution from all retail and sales teams. I thank every employee across the La-Z-Boy enterprise for their agility, hard work and dedication, all of which contributed to our excellent performance while in the midst of historic challenges.

"For the fiscal 2021 fourth quarter, record sales led to all-time record profits driven by increased production capacity, excellent performance by our company-owned La-Z-Boy Furniture Galleries stores, and continued growth and profitability at Joybird. And, fiscal 2022 is off to a great start with continued robust written order rates and a record backlog, setting us up well for a strong year of shipments ahead."

Consolidated sales in the fourth quarter of fiscal 2021 increased 41.4% to $519.5 million versus the fiscal 2020 fourth quarter, which was impacted by COVID-19-related plant and retail closures. Consolidated GAAP operating margin increased to 9.6% versus 3.7% in the prior-year fourth quarter. Consolidated non-GAAP(1) operating margin improved to 10.0% versus 9.3% in last years fourth quarter, reflecting strong performance across all business units.

For the entire La-Z-Boy Furniture Galleries network, written same-store sales doubled, increasing 100%, for the fiscal 2021 fourth quarter compared with the fiscal 2020 fourth quarter. Compared with the pre-pandemic fiscal 2019 fourth quarter, written same-store sales for the La-Z-Boy Furniture Galleries network increased 29%.

For the fiscal 2021 fourth quarter, delivered sales in the companys Wholesale(2) segment increased 40% to $384.0 million compared with the prior-year fourth quarter, which was impacted by COVID-19. Non-GAAP(1) operating margin for the Wholesale(2) segment was a healthy 10.2% versus 11.1% for the prior-year period, reflecting disciplined cost management on advertising which helped offset higher raw material and freight costs and expenses to expand production capacity to service record backlog. Last year's fourth quarter benefited from a one-time rebate of previously paid tariffs partially offset by higher bad debt expense.

Retail segment delivered sales increased 39% to $193.5 million in the fourth quarter of fiscal 2021 compared with the prior-year fourth quarter. Written same-store sales for the company-owned La-Z-Boy Furniture Galleries stores more than doubled, increasing 114% in the quarter, reflecting positive trends across all sales metrics, including traffic, conversion and average ticket, versus last year's fourth quarter which included store closures during the last four weeks of the period. Non-GAAP(1) operating margin for the Retail segment was 12.2% in the fiscal 2021 fourth quarter versus 10.8% in last years fourth quarter, primarily driven by fixed-cost leverage on higher delivered sales volume.

Within Corporate & Other, Joybird sales more than doubled compared with the prior-year quarter, increasing 144% to $37.7 million. Written sales increased 125% compared with the prior-year quarter, reflecting ongoing strong order trends and the strength of the brand in the online marketplace. For the third consecutive quarter, Joybird posted strong gross margins, delivered profitable growth and increased conversion rates while increasing its marketing spend to drive customer acquisition.

GAAP diluted EPS was $0.81 for the fiscal 2021 fourth quarter versus $0.05 in the prior-year quarter. Non-GAAP(1) diluted EPS was $0.87 versus $0.49 in last years fourth quarter.

Balance Sheet and Cash Flow

For fiscal 2021, the company generated $310 million in cash from operating activities, reflecting strong profit performance and a $140 million increase in customer deposits from written orders for the company's Retail segment and Joybird. La-Z-Boy ended the period with $395 million in cash(3) and no debt, compared with $264 million in cash(3) and $75 million in short-term borrowings at the end of fiscal 2020. The company holds $32 million in investments to enhance returns on cash versus $29 million at the end of fiscal 2020. In fiscal 2021 the company spent $8 million related to acquisitions, invested $38 million in the business through capital expenditures, paid $17 million in dividends and spent $44 million repurchasing approximately 1.1 million shares of stock in the open market under its existing authorized share repurchase program, leaving 3.4 million shares available for repurchase under the program as of April 24, 2021.

Business Outlook

Demand trends remain strong across the business with backlog at record levels. The company anticipates ongoing incremental increases in manufacturing capacity throughout fiscal 2022 that will enable higher delivered sales, but expects ongoing global supply chain disruptions and headwinds related to raw materials and freight costs will cause some volatility in results. In the short term, the company expects a temporary negative impact to profit margins versus very strong fourth-quarter results due to dramatic raw material price increases which will only be offset by previously announced pricing actions as the company works through its backlog in the back half of the year.

Incoming order rates and backlog will mitigate the usual seasonal slowdown associated with the first quarter. However, as usual, capacity in the first quarter is limited to 12 weeks of production/shipments to enable a shutdown week in July for maintenance for most of the companys plants, compared with 13 weeks in the second and fourth quarters.

Whittington said, "As we look ahead, our prudent financial culture and strong cash position provide opportunities for investment in our next chapter of growth. For the immediate term, we are focused on continuing to increase capacity and deliver units while making investments in technology solutions across the company, our stores, and updating and expanding our plants, all to enhance the consumer experience, drive future growth and emerge stronger in a post-pandemic environment."

(1)Non-GAAP amounts for the full fiscal 2021 year exclude:

-- purchase accounting charges related to acquisitions totaling $16.7 million pre-tax, or $0.33 per diluted share, primarily due to a write-up of the Joybird contingent consideration liability based on forecasted future performance, with $16.0 million included in operating income and $0.7 million included in interest expense; -- a charge of $3.8 million pre-tax, or $0.07 per diluted share, related to the company's business realignment initiative announced in June 2020; and -- income of $5.2 million pre-tax, or $0.08 per diluted share, related to the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") recorded in other income related to the impact of employee retention credits.

Non-GAAP amounts for the full fiscal 2020 year exclude:

-- a non-cash, non-tax deductible goodwill impairment charge of $26.9 million pre-tax, or $0.58 per diluted share; -- a non-cash charge of $6.0 million pre-tax, or $0.09 per share, related to an impairment for one investment; -- a purchase accounting net benefit of $1.4 million pre-tax, or $0.07 per diluted share, with a $2.1 million benefit included in operating income and $0.7 million expense included in interest expense -- a net benefit of $4.4 million pre-tax, or $0.07 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; and -- a benefit of $1.9 million pre-tax, or $0.03 per diluted share, related to the 2019 termination of the company's defined benefit pension plan.

Non-GAAP amounts for the fourth quarter of fiscal 2021 exclude:

-- purchase accounting charges related to acquisitions totaling $2.0 million pre-tax, plus related tax adjustments, or $0.06 per diluted share, primarily due to a write-up of the Joybird contingent consideration liability based on forecasted performance, with $1.9 million included in operating income and $0.1 million included in interest expense.

Non-GAAP amounts for the fourth quarter of fiscal 2020 exclude:

-- a non-cash, non-tax deductible goodwill impairment charge of $26.9 million pre-tax, or $0.58 per diluted share; -- a purchase accounting net benefit of $5.9 million pre-tax, or $0.14 per diluted share, with a $6.1 million benefit included in operating income and $0.2 million included in interest expense; and -- a benefit of $0.1 million pre-tax, or $0.00 per diluted share, related to the company's supply chain optimization initiative, including the closure of the company's Redlands, California upholstery manufacturing facility.

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

(2)Wholesale segment: Effective in the first quarter of fiscal 2021, in order to better align with the manner in which we view and manage the business, coupled with economic and customer channel similarities, the company revised its reportable operating segments by aggregating the former Upholstery segment with the former Casegoods segment to form the newly combined Wholesale segment. The change in reportable operating segments reflects how the company evaluates financial information used to make operating decisions. Prior-period results disclosed in this earnings release with respect to the Wholesale segment have been revised to reflect these changes.

(3)Cash includes cash, cash equivalents and restricted cash.

Conference Call

La-Z-Boy will hold a conference call with the investment community on Wednesday, June 16, 2021, 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: 41347. The webcast replay will be available for one year.

Cautionary Note Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, business, and industry and the effect of the novel coronavirus (COVID-19) pandemic on our business operations and financial results.

The forward-looking statements in this press release are based on certain assumptions and currently available information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control, such as the continuing and developing impact of, and uncertainty caused by, the COVID-19 pandemic. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial results. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our fiscal 2021 Annual Report on Form 10-K and other factors identified in our reports filed with the Securities and Exchange Commission. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.

Additional Information

This news release is just one part of La-Z-Boys 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 worlds leading residential furniture producers, marketing furniture for every room of the home. The Wholesale segment includes England, La-Z-Boy, American Drew, Hammary, and Kincaid.The company-owned Retail segment includes 159 of the 354 La-Z-Boy Furniture Galleries stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.

The corporations branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 354 stand-alone La-Z-Boy Furniture Galleries stores and 561 independent Comfort Studio locations, in addition to in-store gallery programs for the companys 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, which may exclude, as applicable, goodwill impairment charges, business realignment charges, purchase accounting charges, charges for our supply chain optimization initiative, an impairment charge for one investment, benefits from the CARES Act, and refunds related to terminating the company's defined benefit pension plan. The business realignment charges include severance costs, asset impairment costs, and costs to relocate equipment and inventory related to organizational changes we undertook as a result of our COVID-19 Action 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. The benefits from the CARES Act include the impact of employee retention credits. These Non-GAAP financial measures are not meant to be considered superior to or a substitute for La-Z-Boy Incorporateds 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 goodwill impairment charges and 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 and the success with which we operate the businesses acquired. While the company has a history of acquisition activity, it does not acquire businesses on a predictable cycle, and the impact of goodwill impairment charges and purchase accounting charges is unique to each acquisition and can vary significantly from acquisition to acquisition. Similarly, business realignment charges and the charges related to the companys 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 an impairment charge for one investment, benefits from the CARES Act and refunds related to the termination of the company's defined benefit pension plan when assessing the company's operating and financial performance due to the one-time nature of these transactions. Management believes that exclusion of these items facilitates more consistent comparisons of the companys 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, except for the non-tax deductible goodwill impairment charge and the adjustment to the fair value of contingent consideration which reflects the associated GAAP tax impact in the period presented.

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

LA-Z-BOY INCORPORATEDCONSOLIDATED STATEMENT OF INCOME

Quarter Ended Year Ended(Unaudited, amounts in thousands, except per 4/24/2021 4/25/2020 4/24/2021 4/25/2020share data)Sales $ 519,470 $ 367,281 $ 1,734,244 $ 1,703,982 Cost of sales 297,380 195,575 993,984 982,537 Gross profit 222,090 171,706 740,260 721,445 Selling,generalandadministrativeexpense 172,032 131,418 603,524 575,821 Goodwill impairment ? 26,862 ? 26,862 Operatingincome 50,058 13,426 136,736 118,762 Interestexpense (287 ) (400 ) (1,390 ) (1,291 )Interestincome 199 692 1,101 2,785 Pension termination refund ? ? ? 1,900 Other income (expense), net 1,471 307 9,466 (6,983 )Income before income taxes 51,441 14,025 145,913 115,173 Income tax expense 13,484 10,649 38,384 36,189 Net income 37,957 3,376 107,529 78,984 Net income attributable to noncontrolling (461 ) (1,081 ) (1,068 ) (1,515 )interestsNet income attributable to La-Z-Boy Incorporated $ 37,496 $ 2,295 $ 106,461 $ 77,469 Basic weighted average common shares 45,739 45,962 45,983 46,399 Basic net income attributable to La-Z-Boy $ 0.82 $ 0.05 $ 2.31 $ 1.67 Incorporated per share Diluted weighted average common shares 46,316 46,157 46,367 46,736 Diluted net income attributable to La-Z-Boy $ 0.81 $ 0.05 $ 2.30 $ 1.66 Incorporated per share

LA-Z-BOY INCORPORATEDCONSOLIDATED BALANCE SHEET

(Unaudited, amounts in thousands, except par 4/24/2021 4/25/2020value)Current assets Cash and equivalents $ 391,213 $ 261,553 Restricted cash 3,490 1,975 Receivables, net of allowance of $4,011 at 4/24 139,341 99,351 /2021 and $7,541 at 4/25/2020Inventories, net 226,137 181,643 Other current assets 165,979 81,804 Total current assets 926,160 626,326 Property, plant and equipment, net 219,194 214,767 Goodwill 175,814 161,017 Other intangible assets, net 30,431 28,653 Deferred income taxes ? long-term 11,915 20,839 Right of use lease assets 343,800 318,647 Other long-term assets, net 79,008 64,640 Total assets $ 1,786,322 $ 1,434,889 Current liabilities Accounts payable $ 94,152 $ 55,511 Short-term borrowings ? 75,000 Lease liabilities, current 67,614 64,376 Accrued expenses and other current liabilities 449,904 155,282 Total current liabilities 611,670 350,169 Lease liabilities, long-term 295,023 270,162 Other long-term liabilities 97,483 98,252 Shareholders' equity Preferred shares ? 5,000 authorized; none ? ? issuedCommon shares, $1 par value ? 150,000authorized; 45,361 outstanding at4/24/2021 and 45,361 45,857 45,857 outstanding at 4/25/2020Capital in excess of par value 330,648 318,215 Retained earnings 399,010 343,633 Accumulated other comprehensive loss (1,521 ) (6,952 )Total La-Z-Boy Incorporated shareholders' 773,498 700,753 equityNoncontrolling interests 8,648 15,553 Total equity 782,146 716,306 Total liabilities and equity $ 1,786,322 $ 1,434,889

LA-Z-BOY INCORPORATEDCONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended(Unaudited, amounts in thousands) 4/24/2021 4/25/2020Cash flows from operating activities Net income $ 107,529 $ 78,984 Adjustments to reconcile net income to cash provided by operating activitiesGain on disposal of assets (37 ) (10,068 )Gain on sale of investments (954 ) (693 )Provision for doubtful accounts (3,169 ) 13,383 Depreciation and amortization 33,021 31,192 Equity-based compensation expense 12,671 8,371 Goodwill impairment ? 26,862 Pension termination refund ? (1,900 )Change in deferred taxes 8,790 719 Change in receivables (38,288 ) 29,686 Change in inventories (40,727 ) 14,900 Change in right-of use lease asset 65,571 67,673 Change in other assets 2,926 7,039 Change in payables 37,068 (9,913 )Change in lease liabilities (65,881 ) (66,238 )Change in other liabilities 191,397 (25,755 )Net cash provided by operating activities 309,917 164,242 Cash flows from investing activities Proceeds from disposals of assets 2,770 11,273 Proceeds from insurance ? 1,080 Capital expenditures (37,960 ) (46,035 )Purchases of investments (39,584 ) (37,477 )Proceeds from sales of investments 36,071 37,244 Acquisitions (2,000 ) ? Net cash used for investing activities (40,703 ) (33,915 ) Cash flows from financing activities Net proceeds from credit facility ? 75,000 Payments on debt and finance lease liabilities (75,050 ) (161 )Holdback payments for acquisition purchases (5,783 ) (6,850 )Stock issued for stock and employee benefit plans, 9,030 3,029 net of shares withheld for taxesPurchases of common stock (44,202 ) (43,369 )Dividends paid to shareholders (16,542 ) (25,091 )Dividends paid to minority interest joint venture (8,507 ) ? partners (1)Net cash (used for) provided by financing (141,054 ) 2,558 activitiesEffect of exchange rate changes on cash and 3,015 (1,144 )equivalentsChange in cash, cash equivalents and restricted 131,175 131,741 cashCash, cash equivalents and restricted cash at 263,528 131,787 beginning of periodCash, cash equivalents and restricted cash at end $ 394,703 $ 263,528 of period Supplemental disclosure of non-cash investing activitiesCapital expenditures included in payables $ 4,638 $ 3,528

(1)Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.

LA-Z-BOY INCORPORATEDSEGMENT INFORMATION

Quarter Ended Year Ended(Unaudited,amountsinthousands) 4/24/2021 4/25/2020 4/24/2021 4/25/2020Sales Wholesale segment: Sales to external customers $ 286,119 $ 211,218 $ 1,006,377 $ 1,026,630 Intersegment sales 97,882 63,469 294,921 283,664 Wholesale segment sales 384,001 274,687 1,301,298 1,310,294 Retail segment sales 193,535 139,660 612,906 598,554 Corporate and Other: Sales to external customers 39,816 16,403 114,961 78,798 Intersegment sales 3,405 2,157 12,409 10,294 Corporate and Other sales 43,221 18,560 127,370 89,092 Eliminations (101,287 ) (65,626 ) (307,330 ) (293,958 )Consolidated sales $ 519,470 $ 367,281 $ 1,734,244 $ 1,703,982 Operating Income (Loss) Wholesale segment $ 39,003 $ 30,245 $ 134,312 $ 142,440 Retail segment 23,551 14,984 46,724 48,256 Corporate and Other (12,496 ) (31,803 ) (44,300 ) (71,934 )Consolidated operating income $ 50,058 $ 13,426 $ 136,736 $ 118,762

LA-Z-BOY INCORPORATEDUNAUDITED QUARTERLY FINANCIAL DATA

Fiscal 2021

Fiscal Quarter (13 weeks) (13 weeks) (13 weeks) (13 weeks)Ended(Amounts inthousands, 7/25/2020 10/24/2020 1/23/2021 4/24/2021except pershare data)Sales $ 285,458 $ 459,120 $ 470,196 $ 519,470 Cost of sales 169,095 258,565 268,944 297,380 Gross profit 116,363 200,555 201,252 222,090 Selling,general and 112,038 152,616 166,838 172,032 administrativeexpenseOperating 4,325 47,939 34,414 50,058 incomeInterest (459 ) (346 ) (298 ) (287 )expenseInterest income 494 123 285 199 Other income 1,474 (11 ) 6,532 1,471 (expense), netIncome before 5,834 47,705 40,933 51,441 income taxesIncome tax 1,155 12,401 11,344 13,484 expenseNet income 4,679 35,304 29,589 37,957 Net incomeattributable to 119 (369 ) (357 ) (461 )noncontrollinginterestsNet incomeattributable to $ 4,798 $ 34,935 $ 29,232 $ 37,496 La-Z-BoyIncorporatedDilutedweighted 45,965 46,323 46,818 46,316 average commonsharesDiluted netincomeattributable to $ 0.10 $ 0.75 $ 0.62 $ 0.81 La-Z-BoyIncorporatedper share

Fiscal 2020

Fiscal Quarter Ended (13 weeks) (13 weeks) (13 weeks) (13 weeks)(Amounts in thousands, 7/27/2019 10/26/2019 1/25/2020 4/25/2020except per share data)Sales $ 413,633 $ 447,212 $ 475,856 $ 367,281 Cost of sales 245,921 264,823 276,218 195,575 Gross profit 167,712 182,389 199,638 171,706 Selling, general and 144,290 152,788 147,325 131,418 administrative expenseGoodwill impairment ? ? ? 26,862 Operating income 23,422 29,601 52,313 13,426 Interest expense (318 ) (308 ) (265 ) (400 )Interest income 727 522 844 692 Pension termination ? 1,900 ? ? chargeOther income (expense), (760 ) (532 ) (5,998 ) 307 netIncome before income 23,071 31,183 46,894 14,025 taxesIncome tax expense 5,083 8,279 12,178 10,649 Net income 17,988 22,904 34,716 3,376 Net income attributableto noncontrolling 81 (311 ) (204 ) (1,081 )interestsNet income attributableto La-Z-Boy $ 18,069 $ 22,593 $ 34,512 $ 2,295 IncorporatedDiluted weighted 47,125 46,879 46,584 46,157 average common sharesDiluted net incomeattributable to $ 0.38 $ 0.48 $ 0.74 $ 0.05 La-Z-Boy Incorporatedper share

LA-Z-BOY INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Quarter Ended Year Ended(Amounts in thousands, 4/24/2021 4/25/2020 4/24/2021 4/25/2020except per share data)GAAP gross profit $ 222,090 $ 171,706 $ 740,260 $ 721,445 Add back: Purchaseaccounting charges -incremental expense ? 138 429 541 upon the sale ofinventory acquired atfair valueAdd back: Business ? ? 1,253 ? realignment chargesAdd back: Supply chain ? 95 ? 5,386 optimization initiativeNon-GAAP gross profit $ 222,090 $ 171,939 $ 741,942 $ 727,372 GAAP SG&A $ 172,032 $ 131,418 $ 603,524 $ 575,821 Less: Purchaseaccounting (charges)gains - adjustment tofair value ofcontingent (1,859 ) 6,240 (15,595 ) 2,663 consideration andamortization ofintangible assets andretention agreementsLess: Business ? ? (2,580 ) ? realignment chargesAdd back: Supply chainoptimization initiative ? ? ? 9,745 gain on saleNon-GAAP SG&A $ 170,173 $ 137,658 $ 585,349 $ 588,229 GAAP operating income $ 50,058 $ 13,426 $ 136,736 $ 118,762 Add back: Purchase 1,859 (6,102 ) 16,024 (2,122 )accounting chargesAdd back: Business ? ? 3,833 ? realignment chargesAdd back: Supply chain ? 95 ? (4,359 )optimization initiativeAdd back: Goodwill ? 26,862 ? 26,862 impairmentNon-GAAP operating $ 51,917 $ 34,281 $ 156,593 $ 139,143 income GAAP income before $ 51,441 $ 14,025 $ 145,913 $ 115,173 income taxesAdd back: Purchaseaccounting chargesrecorded as part of 2,038 (5,933 ) 16,694 (1,428 )gross profit, SG&A, andinterest expenseAdd back: Business ? ? 3,833 ? realignment chargesAdd back: Supply chainoptimization initiative ? 95 ? (4,359 )charges/(gain)Add back: Goodwill ? 26,862 ? 26,862 impairmentLess: CARES Act benefit ? ? (5,219 ) ? Add back: Investment ? ? ? 6,000 impairmentLess: Pension ? ? ? (1,900 )termination refundNon-GAAP income before $ 53,479 $ 35,049 $ 161,221 $ 140,348 income taxes GAAP net incomeattributable to $ 37,496 $ 2,295 $ 106,461 $ 77,469 La-Z-Boy IncorporatedAdd back: Purchaseaccounting chargesrecorded as part of 2,038 (5,933 ) 16,694 (1,428 )gross profit, SG&A, andinterest expenseLess: Tax effect of 837 (635 ) (642 ) (1,746 )purchase accountingAdd back: Business ? ? 3,833 ? realignment chargesLess: Tax effect ofbusiness realignment ? ? (938 ) ? chargesAdd back: Supply chainoptimization initiative ? 95 ? (4,359 )charges/(gain)Less: Tax effect ofsupply chain ? (30 ) 13 1,176 optimization initiativeAdd back: Goodwill ? 26,862 ? 26,862 impairmentLess: CARES Act benefit ? ? (5,219 ) ? Add back: Tax effect of ? ? 1,261 ? CARES Act benefitAdd back: Investment ? ? ? 6,000 impairmentLess: Tax effect of ? ? ? (1,618 )investment impairmentLess: Pension ? ? ? (1,900 )termination refundAdd back: Tax effect ofpension termination ? ? ? 513 refundNon-GAAP net incomeattributable to $ 40,371 $ 22,654 $ 121,463 $ 100,969 La-Z-Boy Incorporated GAAP net incomeattributable to $ 0.81 $ 0.05 $ 2.30 $ 1.66 La-Z-Boy Incorporatedper diluted shareAdd back: Purchaseaccounting charges, net 0.06 (0.14 ) 0.33 (0.07 )of tax, per shareAdd back: Businessrealignment charges, ? ? 0.07 ? net of tax, per shareLess: Supply chainoptimization ? ? ? (0.07 )initiative, net of tax,per shareAdd back: Goodwillimpairment, net of tax, ? 0.58 ? 0.58 per shareLess: CARES Actbenefit, net of tax, ? ? (0.08 ) ? per shareAdd back: Investmentimpairment, net of tax, ? ? ? 0.09 per shareLess: Pensiontermination refund, net ? ? ? (0.03 )of tax, per shareNon-GAAP net incomeattributable to $ 0.87 $ 0.49 $ 2.62 $ 2.16 La-Z-Boy Incorporatedper diluted share

LA-Z-BOY INCORPORATEDRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURESSEGMENT INFORMATION

Quarter Ended Year Ended(Amounts in 4/24/2021 % of 4/25/2020 % of 4/24/2021 % of 4/25/2020 % ofthousands) sales sales sales salesGAAPoperating income(loss)Wholesale $ 39,003 10.2 % $ 30,245 11.0 % $ 134,312 10.3 % $ 142,440 10.9 %segmentRetail 23,551 12.2 % 14,984 10.7 % 46,724 7.6 % 48,256 8.1 %segmentCorporate (12,496 ) N/M (31,803 ) N/M (44,300 ) N/M (71,934 ) N/Mand OtherConsolidatedGAAP $ 50,058 9.6 % $ 13,426 3.7 % $ 136,736 7.9 % $ 118,762 7.0 %operatingincome Non-GAAPitemsaffecting operatingincomeWholesale $ 60 $ 149 $ 3,346 $ (4,139 ) segmentRetail ? 138 612 541 segmentCorporate 1,799 20,568 15,899 23,979 and OtherConsolidatedNon-GAAPitems $ 1,859 $ 20,855 $ 19,857 $ 20,381 affectingoperatingincome Non-GAAPoperating income(loss)Wholesale $ 39,063 10.2 % $ 30,394 11.1 % $ 137,658 10.6 % $ 138,301 10.6 %segmentRetail 23,551 12.2 % 15,122 10.8 % 47,336 7.7 % 48,797 8.2 %segmentCorporate (10,697 ) N/M (11,235 ) N/M (28,401 ) N/M (47,955 ) N/Mand OtherConsolidatedNon-GAAP $ 51,917 10.0 % $ 34,281 9.3 % $ 156,593 9.0 % $ 139,143 8.2 %operatingincome N/M - Not Meaningful