Segment Information

12 Months Ended

Apr. 30, 2016

Segment Information

Segment Information

Note 17: Segment Information

Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment.

Upholstery Segment.    The Upholstery segment consists primarily of two operating units: La-Z-Boy and England. This segment manufactures and imports upholstered furniture. Upholstered furniture includes 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.    The Casegoods segment consists of three brands: American Drew, Hammary, and Kincaid. This segment sells imported wood furniture to furniture retailers. Casegoods product includes bedroom, dining room, entertainment centers, occasional pieces and some manufactured coordinated upholstered furniture. 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.

Retail Segment.    The Retail segment consists of 124 company-owned La-Z-Boy Furniture Galleries® stores. During fiscal 2016, fiscal 2015, and fiscal 2014, we acquired La-Z-Boy Furniture Galleries® stores in various markets. All of these acquired stores were previously independently owned and operated (see Note 2 for more detail related to these acquisitions). The Retail segment sells upholstered furniture, and some casegoods and other accessories, to end consumers through the retail network.

Restructuring.    During fiscal 2014, we committed to a restructuring of our casegoods business to transition to an all-import model for our wood furniture. In fiscal 2016 and fiscal 2014, we recorded restructuring charges of $0.6 million and $4.8 million, respectively, and restructuring income of $0.4 million in fiscal 2015, related to continuing operations (see Note 3 for additional information). We do not include restructuring costs in the results of our reportable segments.

The accounting policies of the operating segments are the same as those described in Note 1. We account for intersegment revenue transactions between our segments consistent with independent third party transactions, that is, at current market prices. As a result, the manufacturing profit related to sales to our Retail segment is included within the appropriate Upholstery or Casegoods segment. Operating income realized on intersegment revenue transactions is therefore generally consistent with the operating income realized on our revenue from independent third party transactions. Segment operating income is based on profit or loss from operations before interest expense, interest income, income from continued dumping and subsidy offset act, other income (expense) and income taxes. Identifiable assets are cash and equivalents, notes and accounts receivable, net inventories, net property, plant and equipment, goodwill and other intangible assets. Our unallocated assets include deferred income taxes, corporate assets (including a portion of cash and equivalents), and various other assets. Sales are attributed to countries on the basis of the customer's location.

	Year Ended
(Amounts in thousands)	4/30/2016			4/25/2015			4/26/2014
Sales
Upholstery segment:
Sales to external customers	$	1,027,615		$	990,237		$	959,118
Intersegment sales		188,190			161,565			139,932
Upholstery segment sales		1,215,805			1,151,802			1,099,050
Casegoods segment:
Sales to external customers		92,601			98,886			97,095
Intersegment sales		9,939			10,827			9,657
Casegoods segment sales		102,540			109,713			106,752
Retail segment sales		402,479			333,978			298,642
Corporate and Other:
Sales to external customers		2,703			2,294			2,463
Intersegment sales		3,720			—			—
Corporate and Other sales		6,423			2,294			2,463
Eliminations		(201,849	)		(172,392	)		(149,589	)
Consolidated sales	$	1,525,398		$	1,425,395		$	1,357,318
Operating Income (Loss)
Upholstery segment	$	134,193		$	121,403		$	117,688
Casegoods segment		7,734			6,408			3,397
Retail segment		25,567			11,466			11,128
Restructuring		(579	)		371			(4,839	)
Corporate and Other		(44,526	)		(36,483	)		(38,078	)
Consolidated operating income		122,389			103,165			89,296
Interest expense		486			523			548
Interest income		827			1,030			761
Income from Continued Dumping and Subsidy Offset Act, net		102			1,212			—
Other income, net		2,211			744			2,050
Income from continuing operations before income taxes	$	125,043		$	105,628		$	91,559
Depreciation and Amortization
Upholstery segment	$	13,559		$	12,669		$	13,778
Casegoods segment		874			813			1,171
Retail segment		2,800			2,910			2,520
Corporate and Other		9,284			5,891			5,566
Consolidated depreciation and amortization	$	26,517		$	22,283		$	23,035
Capital Expenditures
Upholstery segment	$	14,744		$	14,979		$	6,579
Casegoods segment		562			1,149			149
Retail segment		3,245			2,993			4,379
Corporate and Other		6,133			51,198			22,623
Consolidated capital expenditures	$	24,684		$	70,319		$	33,730
Assets
Upholstery segment	$	323,411		$	317,102		$	305,814
Casegoods segment		51,165			48,403			53,299
Retail segment		146,963			126,189			119,816
Unallocated assets		278,490			282,910			292,366
Consolidated assets	$	800,029		$	774,604		$	771,295
Long-Lived Assets by Geographic Location
Domestic	$	211,021		$	187,224		$	147,538
International		7,443			8,359			6,805
Consolidated long-lived assets	$	218,464		$	195,583		$	154,343
Sales by Country
United States		89	%		87	%		86	%
Canada		7	%		7	%		8	%
Other		4	%		6	%		6	%
Total		100	%		100	%		100	%