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La-Z-Boy Reports Fiscal 2009 First-Quarter ResultsMONROE, Mich., Aug. 19 /PRNewswire-FirstCall/ -- La-Z-Boy Incorporated (NYSE: LZB) today reported its operating results for the fiscal first quarter ended July 26, 2008. Net sales for the quarter were Upholstery For the fiscal 2009 first quarter, sales in the company's upholstery
segment decreased 6.9% to During the quarter, the company incurred restructuring charges related to the closure of itsTremonton, Utah facility and began the liquidation of its United Kingdom import and distribution operation, as it transitions to a licensing agreement with a new partner. There was also an intangible write- down of goodwill associated with the company's U.K. operation. The company's newMexico cut-and-sewn operation is on schedule to be completed in time for production to begin in February 2009. For the fiscal 2009 first quarter, the La-Z-Boy Furniture Galleries(R) store system, which includes both company-owned and independent-licensed stores, opened one new store, relocated and/or remodeled two and closed three, bringing the total store count to 333, of which 217 are in the New Generation format. For the remainder of fiscal 2009, the network plans to open 12 New Generation format La-Z-Boy Furniture Galleries(R) stores (four new stores and eight will be either remodels or relocations) and will close nine to 12. In the second quarter of fiscal 2009, the network plans to open one new store, relocate one and close three stores. System-wide, for the second calendar quarter of 2008, including company- owned and independent-licensed stores, same-store written sales, which the company tracks as an indicator of retail activity, were down 1.9%. Total written sales, which include new stores, were down 1.6%. Casegoods For the 2009 first quarter, casegoods sales were Retail For the quarter, retail sales were During the first quarter, the company's retail segment did not open, remodel or relocate any company-owned stores and it closed one store. At the end of the first quarter, the company owned 69 stores, including 56 in the New Generation format, or 81% versus 69 company-owned stores last year at this time, of which 48, or 70%, were in the new format. For the second quarter of fiscal 2009, the company-owned segment plans to open one new store and relocate one. Balance Sheet The company's debt-to-capitalization ratio stood at 18.5% at the end of
the first quarter compared with 24.4% a year ago. Additionally, the company
reduced its inventories and receivables by Business Outlook Commenting on the company's business outlook, Darrow said: "The overall macroeconomic environment continues to be challenging. Increased oil prices, higher interest rates and a depressed housing market, combined with low consumer confidence levels, are having an effect on the home furnishings industry across the board. We remain committed to running our business with the greatest efficiency possible and believe we have the opportunity to improve our performance. As we announced last quarter, due to seasonality issues and the way in which our fiscal year (May through April) rolls out, we anticipate the second half of our fiscal year to be operationally stronger than the first half." Forward-looking Information Any forward-looking statements contained in this news release are based on current information and assumptions and represent management's best judgment at the present time. Actual results could differ materially from those anticipated or projected due to a number of factors. These factors include, but are not limited to: (a) changes in consumer confidence; (b) changes in demographics; (c) further changes in the housing market; (d) the impact of terrorism or war; (e) continued energy price changes; (f) the impact of logistics on imports; (g) the impact of interest rate changes; (h) changes in currency exchange rates; (i) competitive factors; (j) operating factors, such as supply, labor or distribution disruptions including changes in operating conditions or costs; (k) effects of restructuring actions; (l) changes in the domestic or international regulatory environment; (m) ability to implement global sourcing organization strategies; (n) fair value changes to our intangible assets due to actual results differing from projected; (o) the impact of adopting new accounting principles; (p) the impact from natural events such as hurricanes, earthquakes and tornadoes; (q) the ability to procure fabric rolls and leather hides or cut and sewn fabric sets domestically or abroad; (r) continued decline in the credit market and potential impacts on our customers; (s) those matters discussed in Item 1A of our fiscal 2008 Annual Report and factors relating to acquisitions and other factors identified from time to time in our reports filed with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements, either to reflect new developments or for any other reason. Additional Information This news release is just one part of La-Z-Boy's financial disclosures and should be read in conjunction with other information filed with the Securities and Exchange Commission, which is available at http://www.la-z- boy.com/about/investorRelations/sec_filings.aspx. Investors and others wishing to be notified of future La-Z-Boy news releases, SEC filings and quarterly investor conference calls may sign up at: http://www.la-z-boy.com/about/investorRelations/IR_email_alerts.aspx . Background Information La-Z-Boy Incorporated is one of the world's leading residential furniture producers, marketing furniture for every room of the home. The La-Z-Boy Upholstery Group companies are Bauhaus,England and La-Z-Boy. The La-Z-Boy Casegoods Group companies are American Drew/Lea, Hammary and Kincaid. The corporation's proprietary distribution network is dedicated exclusively to selling La-Z-Boy Incorporated products and brands, and includes 333 stand-alone La-Z-Boy Furniture Galleries(R) stores, 21 La-Z-Boy In-Store Galleries and 387 Comfort Studios, in addition to in-store gallery programs at the company's Kincaid,England and Lea operating units. According to industry trade publication In Furniture, the La-Z-Boy Furniture Galleries retail network isNorth America's largest single-brand furniture retailer. Additional information is available at http://www.la-z-boy.com/.
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
First Quarter Ended
(Unaudited, amounts in thousands, except
per share data) 7/26/08 7/28/07
Sales $321,652 $344,396
Cost of sales
Cost of goods sold 235,115 259,143
Restructuring 5,795 2,561
Total cost of sales 240,910 261,704
Gross profit 80,742 82,692
Selling, general and administrative 91,837 94,508
Write-down of intangibles 1,292 -
Restructuring 781 1,120
Operating loss (13,168) (12,936)
Interest expense 1,495 2,097
Interest income 932 882
Other income, net 143 566
Loss from continuing operations before
income taxes (13,588) (13,585)
Income tax benefit (5,044) (5,043)
Loss from continuing operations (8,544) (8,542)
Loss from discontinued operations (net of tax) -- (152)
Net loss $(8,544) $(8,694)
Basic average shares 51,428 51,380
Basic loss from continuing operations per share $(0.17) $(0.17)
Discontinued operations per share (net of tax) -- --
Basic net loss per share $(0.17) $(0.17)
Diluted average shares 51,428 51,380
Diluted loss from continuing operations per share $(0.17) $(0.17)
Discontinued operations per share (net of tax) -- --
Diluted net loss per share $(0.17) $(0.17)
Dividends paid per share $0.04 $0.12
LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
(Unaudited, amounts in thousands) 7/26/08 4/26/08
Current assets
Cash and equivalents $11,110 $14,982
Receivables, net 180,311 200,422
Inventories, net 167,455 178,361
Deferred income taxes-current 12,306 12,398
Assets of discontinued operations -- --
Other current assets 25,907 21,325
Total current assets 397,089 427,488
Property, plant and equipment, net 170,235 171,001
Deferred income taxes-long term 25,853 26,922
Goodwill 45,941 47,233
Trade names 9,006 9,006
Other long-term assets 84,805 87,220
Total assets $732,929 $768,870
Current liabilities
Current portion of long-term debt $9,086 $4,792
Accounts payable 49,973 56,421
Accrued expenses and other current liabilities 88,655 102,700
Total current liabilities 147,714 163,913
Long-term debt 90,618 99,578
Other long-term liabilities 54,553 54,783
Contingencies and commitments -- --
Shareholders' equity
Common shares, $1 par value 51,428 51,428
Capital in excess of par value 202,562 209,388
Retained earnings 187,289 190,215
Accumulated other comprehensive income (1,235) (435)
Total shareholders' equity 440,044 450,596
Total liabilities and shareholders' equity $732,929 $768,870
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
First Quarter Ended
(Unaudited, amounts in thousands) 7/26/08 7/28/07
Cash flows from operating activities
Net loss $(8,544) $(8,694)
Adjustments to reconcile net loss
to cash provided by (used for)
operating activities
(Gain)/loss on sale of discontinued
operations (net of tax) (2,066) 52
Write-down of intangibles 1,292 --
Restructuring 6,576 3,681
Provision for doubtful accounts 4,203 2,114
Depreciation and amortization 5,954 6,220
Stock-based compensation expense 869 861
Change in receivables 14,170 22,597
Change in inventories 10,906 (6,071)
Change in payables (6,448) (15,473)
Change in other assets and liabilities (23,632) (23,298)
Change in deferred taxes 1,161 (1,475)
Total adjustments 12,985 (10,792)
Net cash provided by (used for)
operating activities 4,441 (19,486)
Cash flows from investing activities
Proceeds from disposals of assets 4,981 6,415
Capital expenditures (7,372) (9,629)
Purchases of investments (5,449) (6,622)
Proceeds from sales of investments 5,794 6,792
Change in other long-term assets 71 20
Net cash used for investing activities (1,975) (3,024)
Cash flows from financing activities
Proceeds from debt 14,635 705
Payments on debt (18,857) (900)
Stock issued for stock and employee
benefit plans (2) (22)
Dividends paid (2,075) (6,209)
Net cash used for financing activities (6,299) (6,426)
Effect of exchange rate changes on cash
and equivalents (39) 1,001
Change in cash and equivalents (3,872) (27,935)
Cash and equivalents at beginning of period 14,982 51,721
Cash and equivalents at end of period $11,110 $23,786
Cash paid (net of refunds) during period -
income taxes $923 $3,135
Cash paid during period - interest $1,126 $1,910
LA-Z-BOY INCORPORATED
Segment Information
(Unaudited, amounts in thousands)
First Quarter Ended
(Unaudited amounts in thousands) 7/26/08 7/28/07
(13 weeks) (13 weeks)
Sales
Upholstery Group $237,118 $254,757
Casegoods Group 48,121 53,574
Retail Group 42,427 45,231
VIEs/Eliminations (6,014) (9,166)
Consolidated $321,652 $344,396
Operating income (loss)
Upholstery Group $9,857 $8,867
Casegoods Group 1,377 2,600
Retail Group (10,010) (10,074)
Corporate and Other* (6,524) (10,648)
Restructuring (6,576) (3,681)
Intangible Write-down (1,292) --
$(13,168) $(12,936)
* Variable Interest Entities ("VIEs") are included in corporate and
other.
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