LA-Z-BOY INC

Our sources of liquidity include cash and cash equivalents, short-term and long-term investments, cash from operations, and amounts available under our credit facility. We believe these sources remain adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, and fulfill other cash requirements for day-to-day operations and capital expenditures, including fiscal 2025 contractual obligations.

We had cash, cash equivalents and restricted cash of $303.1 million at October 26, 2024, compared with $341.1 million at April 27, 2024. In addition, we had investments to enhance our returns on cash of $2.4 million at October 26, 2024, compared with $6.8 million at April 27, 2024.

The following table illustrates the main components of our cash flows:

Operating Activities

During the first six months of fiscal 2025, net cash provided by operating activities was $68.3 million, an increase of $11.4 million compared with the same period a year ago. The year over year increase was primarily due to a smaller reduction in customer deposits along with a lower incentive compensation payout in fiscal 2025 relative to the prior year. Our cash provided by operating activities in fiscal 2025 was primarily attributable to net income, adjusted for non-cash items, partially offset by an increase in inventory balances.

Investing Activities

During the first six months of fiscal 2025, net cash used for investing activities was $45.5 million, an increase of $20.2 million compared with the same period a year ago, primarily due to cash used for acquisitions and increased capital expenditures. Cash used for investing activities in fiscal 2025 included the following:

•Cash used for capital expenditures in the period was $32.8 million compared with $26.5 million during the first six months of fiscal 2024, which was primarily related to La-Z-Boy Furniture Galleries® (new stores and remodels), manufacturing-related investments, and market showroom upgrades. We anticipate that spending on these items will continue in fiscal 2025 with full year fiscal 2025 capital expenditures expected to be in the range of $70 to $80 million. We have no material contractual commitments outstanding for future capital expenditures.

•Cash used for acquisitions was $17.8 million, primarily related to the acquisition of the Melbourne and Cocoa, Florida and Davenport, Iowa retail businesses.

•Proceeds from the sale of investments, net of investment purchases, were $4.9 million.

Financing Activities

On October 15, 2021, we entered into a five-year $200 million unsecured revolving credit facility (as amended, the “Credit Facility”). Borrowings under the Credit Facility may be used by the Company for general corporate purposes. We may increase the size of the facility, either in the form of additional revolving commitments or new term loans, subject to the discretion of each lender to participate in such an increase, up to an additional amount of $100 million. The Credit Facility will mature on October 15, 2026 and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions. As of October 26, 2024, we have no borrowings outstanding under the Credit Facility.

The Credit Facility contains certain restrictive loan covenants, including, among others, financial covenants requiring a maximum consolidated net lease adjusted leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as customary covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of certain assets. As of October 26, 2024, we were in compliance with our financial covenants under the Credit Facility. We believe our cash and cash equivalents, short-term investments, and cash from operations, in addition to our available Credit Facility, will provide adequate liquidity for our business operations over the next 12 months.

During the first six months of fiscal 2025, net cash used for financing activities was $61.7 million, an increase of $17.8 million compared with the same period a year ago, primarily due to higher share repurchases, partially offset by proceeds from exercised stock options. In addition, our cash used for financing activities in fiscal 2024 included holdback payments of $5.0 million for a prior period acquisition. Cash used for financing activities in fiscal 2025 included the following:

•Our board of directors has authorized the repurchase of company stock and we spent $53.1 million in the first six months of fiscal 2025 to repurchase 1.4 million shares. As of October 26, 2024, 4.3 million shares remained available for repurchase pursuant to this authorization. With the operating cash flows we anticipate generating in fiscal 2025, we expect to continue repurchasing Company stock subject to market conditions and other factors as deemed relevant by our board of directors.

•Cash paid to our shareholders in quarterly dividends was $16.7 million. Our board of directors has sole authority to determine if and when we will declare future dividends and on what terms. We expect the board to continue declaring regular quarterly cash dividends for the foreseeable future, but it may discontinue doing so at any time at the board's discretion.

•Proceeds from exercised stock options, net of stock issued and taxes withheld as part of our employee benefit plans, were $9.9 million.

Exchange Rate Changes

Due to changes in exchange rates, our cash, cash equivalents, and restricted cash increased by $0.9 million for the six months ended October 26, 2024. These changes impacted our cash balances held in Canada, Thailand, and the United Kingdom.

Other

During the second quarter of fiscal 2025, there were no material changes to the information about our contractual obligations and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended April 27, 2024. We do not expect our continuing compliance with existing federal, state and local statutes dealing with protection of the environment to have a material effect on our capital expenditures, earnings, competitive position or liquidity.