MONROE, Mich. - La-Z-Boy Incorporated (NYSE: LZB) reported today that in the trial of a lawsuit pending in the U.S. District Court for the Southern District of Florida, the jury returned a verdict against the company finding damages of approximately $5.8 million. The court has not entered judgment on the verdict and has not yet ruled on the Company's affirmative defenses.
The lawsuit arises from a contract dispute over whether a 2002 contract requires the Company to pay royalties on certain of its power products. The Company strongly believes that it fully complied with all contractual requirements and while it prevailed with respect to some products, the jury found the Company responsible for royalties on others. Oral argument on the Company's affirmative defenses has begun and is currently expected to be completed in April.
In June, the Company will report in a Form 10-K to be filed with the U.S. Securities and Exchange Commission the Company's financial results for the fiscal year ending April 30, 2016. If, prior to the Company's filing, the Company does not prevail on its affirmative defenses and the court enters a judgment based on the jury's verdict, the Company's financial results for the year would reflect a pre-tax accrual of $5.8 million, or approximately $0.07 per diluted share, in connection with this litigation. The jury's award applied to certain products that the Company sold from calendar 2012 through early 2016. If judgment were ultimately entered based on the jury's verdict and upheld through any post-trial motions and appeals, the Company would owe royalties on future sales of those products through the end of calendar 2021.
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