Segment Information

12 Months Ended

Apr. 26, 2014

Segment Information [Abstract]

Segment Information

Note 18: Segment Information

Our reportable operating segments are the Upholstery segment, the Casegoods segment and the Retail segment. During fiscal 2014, we sold our Bauhaus business unit and classified Lea Industries as held for sale. These operating units are presented as discontinued operations and prior financial information was restated for the change in composition of our Upholstery and Casegoods segments. Income statement information presented below is restated accordingly.

Upholstery Segment. The Upholstery segment consists of two operating units, La-Z-Boy and England. This segment manufactures or 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 Comfort Studios® locations, major dealers and other independent retailers.

Casegoods Segment. The Casegoods segment consists of three brands: American Drew, Hammary, and Kincaid. This segment sells imported or manufactured wood furniture to furniture retailers. Casegoods product includes bedroom, dining room, entertainment centers, occasional pieces and some coordinated upholstered furniture. The Casegoods segment sells to major dealers and other independent retailers.

Retail Segment. The Retail segment consists of 101 company-owned La-Z-Boy Furniture Galleries® stores in 12 primary markets. During the second quarter of fiscal 2014, we acquired three La-Z-Boy Furniture Galleries® stores in the Las Vegas market that were previously independently owned and operated. During the third quarter of fiscal 2014 we acquired two La-Z-Boy Furniture Galleries® stores in northeast Ohio that were previously independently owned and operated. The Retail segment sells upholstered furniture, in addition to some casegoods and other accessories, to the end consumer through the retail network.

Restructuring. During the fourth quarter of fiscal 2014, we committed to a restructuring of our casegoods business to transition to an all-import model for our wood furniture, and recorded a restructuring charge of $4.8 million in continuing operations, primarily related to fixed asset and inventory write-downs. During fiscal 2013, we recorded a restructuring charge of $2.6 million in continuing operations, mainly related to fixed asset and inventory write-downs related to the closure of our lumber processing operation in our Casegoods segment. See Note 3 for further details of this restructuring. We do not include restructuring costs in the results of our reportable segments.

We have no customer that individually represents more than 3% of our consolidated or Upholstery segment’s sales or more than 5% of our Casegoods segment’s sales in fiscal 2014.

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), business held for sale, and various other assets. Sales are attributed to countries on the basis of the customer’s location.

(Amounts in thousands)	4/26/2014			4/27/2013			4/28/2012
Sales
Upholstery segment:
Sales to external customers	$	959,118		$	902,454		$	834,468
Intersegment sales		139,932			127,311			103,592
Upholstery segment sales		1,099,050			1,029,765			938,060
Casegoods segment:
Sales to external customers		97,095			104,387			105,551
Intersegment sales		9,657			8,140			6,106
Casegoods segment sales		106,752			112,527			111,657
Retail segment sales		298,642			264,723			215,490
VIEs, net of intercompany sales eliminations		—			—			8,840
Corporate and Other		2,463			2,313			2,356
Eliminations		(149,589	)		(135,451	)		(109,698	)
Consolidated sales	$	1,357,318		$	1,273,877		$	1,166,705

Operating Income (Loss)
Upholstery segment	$	117,688		$	95,571		$	81,015
Casegoods segment		3,397			3,703			5,396
Retail segment		11,128			4,099			(7,819	)
VIEs		—			—			959
Restructuring		(4,839	)		(2,631	)		(281	)
Corporate and Other		(38,078	)		(33,139	)		(30,573	)
Consolidated operating income	$	89,296		$	67,603		$	48,697
Depreciation and Amortization
Upholstery segment	$	13,778		$	14,275		$	12,519
Casegoods segment		1,171			1,338			1,575
Retail segment		2,520			2,676			2,832
VIEs		—			—			149
Corporate and Other		5,566			4,674			6,234
Consolidated depreciation and amortization	$	23,035		$	22,963		$	23,309

Capital Expenditures
Upholstery segment	$	6,579	$	9,857	$	7,261
Casegoods segment		149		1,058		897
Retail segment		4,379		4,251		1,848
VIEs		—		—		543
Corporate and Other		22,623		10,218		4,969
Consolidated capital expenditures	$	33,730	$	25,384	$	15,518
Assets
Upholstery segment	$	305,814	$	296,108	$	303,537
Casegoods segment		53,299		70,147		73,888
Retail segment		119,816		73,496		49,818
Unallocated assets		292,366		280,620		258,496
Consolidated assets	$	771,295	$	720,371	$	685,739

(Amounts in thousands)	4/26/2014			4/27/2013			4/28/2012
Long-Lived Assets by Geographic Location
Domestic	$	147,538		$	133,208		$	114,979
International		6,805			8,168			8,345
Consolidated long-lived assets	$	154,343		$	141,376		$	123,324
Sales by Country
United States		86	%		86	%		86	%
Canada		8	%		9	%		9	%
Other		6	%		5	%		5	%
Total		100	%		100	%		100	%