La-Z-Boy Incorporated (NYSE:LZB) Q4 2016 Earnings Conference Call - Final Transcript

Jun 22, 2016 • 08:30 am ET


La-Z-Boy Incorporated (NYSE:LZB) Q4 2016 Earnings Conference Call - Final Transcript


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Greetings and welcome to the La-Z-Boy Incorporated Fiscal 2016 Fourth Quarter and Full Year Results Conference Call.

At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

(Operator Instructions)

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Miss Kathy Liebmann, Director IR and Corporate Communications. Thank you, Miss Liebmann; you may begin.

Kathy Liebmann

Thank you, Michelle.

Good morning and thank you for joining us to discuss our fiscal 2016 fourth quarter and full year results.

With us today are Kurt Darrow, La-Z-Boy's Chairman, President and Chief Executive Officer; and Mike Riccio, our Chief Financial Officer. Kurt will begin today's call, and then Mike will speak about the financials before turning the call back to Kurt for his concluding remarks. We will then open the call to questions.

A telephone replay of the call will be available for one week beginning this afternoon. Slides will accompany this presentation and are available for viewing through our website link. These regular quarterly investor conference calls are one of La-Z-Boy's primary vehicles to communicate with investors about the Company's current operations and future prospects.

(Forward-Looking Cautionary Statements)

And with that, let me turn over the call to Kurt Darrow, La-Z-Boy's Chairman, President and Chief Executive Officer. Kurt?

Kurt Darrow

Thank you, Kathy, and good morning, everyone.

Yesterday afternoon, we reported excellent results for fiscal 2016 and the fourth quarter. We continue to make strong progress in the execution of our strategic growth initiatives, while improving the efficiencies of our operations and this translated into the fifth consecutive year of sales and operating income increases. We are also delivering on our corporate vision to enrich people's lives by turning houses into homes. By providing great product, services, comfort and quality with the ability to satisfy both our shareholders and customers simultaneously giving us tremendous satisfaction.

Before reviewing the quarter, I would like to run through the highlights of the full fiscal 2016 year. As a note, fiscal 2016 included 53 weeks with the additional week having an approximate 2 percentage point impact. For those of you new to our story, our fiscal year ends on the last Saturday of April and every five or six years due to the way the calendar works we have an extra week in our fiscal year.

For fiscal 2016, our sales increased 7%. With improved efficiencies, our operating margin reached 8% for the year, the highest in 13 years and diluted earnings per share increased 21.1% to $1.55 despite the impact of the previously announced $0.07 per share charge related to a pending legal matter. This charge impacted our consolidated operating margin by 0.4 percentage points.

Over the past five years our EPS has increased 278% and in addition to operating cash flow exceeding $100 million this year our balance sheet remains very strong with $112 million of cash on hand, access to additional lines of credit and virtually no debt giving