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 2027 contractual obligations.

We had cash and cash equivalents of $267.3 million at July 25, 2026, compared with $303.2 million at April 25, 2026. In addition, we had investments to enhance our returns on cash of $5.4 million at July 25, 2026, compared with $5.5 million at April 25, 2026.

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

Operating Activities

During the first quarter of fiscal 2027, net cash provided by operating activities was $15.6 million, primarily attributable to net income, adjusted for non-cash items, and improvements in working capital, partially offset by the payout of our fiscal 2026 incentive compensation award and a $10.9 million lump-sum payment to participants to terminate our non-qualified legacy acquired retirement plan (funded by cash proceeds from the sale of investments). Net cash provided by operating activities in first quarter of fiscal 2027 was $20.6 million lower than the same period a year ago primarily due to lower net income, adjusted for non-cash items and the lump-sum payments to participants to terminate our non-qualified legacy acquired retirement plan.

Investing Activities

During the first quarter of fiscal 2027, net cash used for investing activities was $13.0 million, a decrease of $5.8 million compared with the same period a year ago, due to proceeds from the sale of investments and proceeds from the divestiture of our Casegoods wholesale business, partially offset by increased cash paid for acquisitions along with increased capital expenditures. Cash used for investing activities in fiscal 2027 included the following:

•Cash used for capital expenditures in the period was $23.3 million, which was primarily related to our distribution and home delivery transformation, manufacturing-related investments, and La-Z-Boy Stores (new stores and remodels). We anticipate that spending on these items will continue, with full year fiscal 2027 capital expenditures expected to be in the range of $90 to $110 million. We have no material contractual commitments outstanding for future capital expenditures.

•Cash used for acquisitions was $15.7 million, related to the acquisition of the retail business in the Gulf Coast region.

•Proceeds from the sale of investments were $18.5 million, primarily to fund the lump-sum payments to participants to terminate our non-qualified legacy acquired retirement plan.

•Proceeds from the sale of assets were $7.5 million, primarily from the divestiture of our Casegoods wholesale business.

Financing Activities

During the first quarter of fiscal 2027, net cash used for financing activities was $38.1 million, an increase of $10.4 million compared with the same period a year ago, primarily due to an increase in share repurchases, partially offset by proceeds from exercised stock options. Cash used for financing activities in fiscal 2027 included the following:

•Cash paid to repurchase 0.7 million shares of company stock was $25.1 million. In April 2026, our board of directors rescinded the remaining repurchase authorization as of May 14, 2026, and established a new stock repurchase program, effective as of May 14, 2026, authorizing the repurchase of up to $300 million of Company stock. The new authorization does not have an expiration date. As of July 25, 2026, the maximum dollar value of shares that remained under the current repurchase program was approximately $291.2 million. With the operating cash flows we anticipate generating in fiscal 2027, 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 $9.7 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.

•Cash paid for tax withholding on stock issued as part of our employee benefit plans, net of proceeds from exercised stock options, was $3.1 million.

On October 15, 2021, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, the other agents and lenders named therein and the other parties thereto (as amended prior to July 1, 2025, the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility in an aggregate principal amount of $200 million, which includes a $50 million letter of credit sub-limit (the “Credit Facility”).

On July 1, 2025, we entered into an amendment to the Credit Agreement (the “Credit Agreement Amendment”). The Credit Agreement Amendment, among other things, (i) extended the maturity date of the Credit Facility from October 15, 2026 to July 1, 2030, (ii) increased the accordion basket for additional revolving commitments and/or incremental term loans from $100 million to $125 million, (iii) removed the secured overnight financing rate (“SOFR”) credit spread adjustment, and (iv) decreased the consolidated fixed charge coverage ratio required to be satisfied under the Company’s financial covenant.

Borrowings under the Credit Facility may be used by the Company for general corporate purposes. The Credit Facility will mature on July 1, 2030, and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions.

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 July 25, 2026, we have no borrowings outstanding under the Credit Facility and 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.

Exchange Rate Changes

Due to changes in exchange rates, our cash and cash equivalents decreased by $0.5 million for the quarter ended July 25, 2026. These changes impacted our cash balances held in Canada and Thailand.

Other

During the first quarter of fiscal 2027, 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 25, 2026. 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.