La-Z-Boy Reports Fourth-Quarter Profit
MONROE, Mich.,
Fiscal 2009 fourth quarter highlights:
-- Income from continuing operations was $0.10 per share versus a loss of
$0.09 per share in last year's fourth quarter, despite a 23% decline
in net sales, reflecting ongoing macroeconomic challenges
-- The company generated $34 million in cash from operating activities
and reduced debt by $28 million
-- Net debt at year end was less than $44 million - the lowest level the
company experienced in this decade
-- The retail segment's performance improved - operating loss reduced by
$5 million on a 21% sales decline
Net sales for the fourth quarter were
For the full fiscal 2009 year,
Wholesale Segments
For the fiscal 2009 fourth quarter, sales in the company's upholstery
segment decreased 22.5% to
Darrow commented, "Our operating margin performance in our upholstery
segment demonstrates the efficiencies with which we are running our business.
On a significant decline in volume, we not only operated with a 9% margin, but
improved our operating performance quarter over quarter. This is a testament
to the number of changes we have made to our manufacturing structure. In
addition to the benefits derived from cellular production at our
Darrow continued, "In our casegoods business, we made the decision to
consolidate our two separate manufacturing operations into one facility in
Hudson, NC. We will close our plant in North Wilkesboro, NC and convert it to
a finished-goods warehouse and vacate a leased warehouse operation in
Statesville, NC. These moves will take place over a nine-month period and,
when completed, will provide an annual cost savings of approximately
In fiscal 2009, the La-Z-Boy Furniture Galleries(R) store system, which includes both company-owned and independent-licensed stores, opened six new stores, relocated and/or remodeled nine and closed 21, bringing the total store count to 320, of which 224 are in the New Generation format. For fiscal 2010, the network plans to be opportunistic in opening or relocating stores and anticipates closing five to 10 stores.
System-wide, for the fiscal 2009 fourth quarter, including company-owned and independent-licensed stores, same-store written sales, which the company tracks as an indicator of retail activity, were down 16.4%. Total written sales, which include new and closed stores, were down 20.6%.
Retail
For the quarter, retail sales were
Balance Sheet
During the fourth quarter,
Business Outlook
Darrow stated, "We anticipate business conditions to remain difficult throughout the year and are structuring our business accordingly. Should conditions change in either direction, we will react swiftly and make the necessary changes to our operating structure. Due to seasonality factors and plant shutdowns for vacation and maintenance, the summer period is usually the slowest for the furniture industry and, historically, our first quarter, which ends in July, is typically the weakest in terms of sales and profits."
Conference Call
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) continued
economic recession and decline in our stock price; (c) changes in
demographics; (d) further changes in residential housing and commercial real
estate market; (e) the impact of terrorism or war; (f) continued energy and
other commodity price changes; (g) the impact of logistics on imports; (h) the
impact of interest rate changes; (i) changes in currency exchange rates; (j)
competitive factors; (k) operating factors, such as supply, labor or
distribution disruptions including changes in operating conditions or costs;
(l) effects of restructuring actions; (m) changes in the domestic or
international regulatory environment; (n) ability to implement global sourcing
organization strategies; (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 and leather sets domestically or abroad; (r) continued decline
in the credit market and potential impacts on our customers and suppliers; (s)
unanticipated labor/industrial actions; (t) those matters discussed in Item 1A
of our fiscal 2009 Annual Report and factors relating to acquisitions and
other factors identified from time-to-time in our reports filed with the
Additional Information
This news release is just one part of
http://www.la-z-boy.com/about/investorRelations/IR_email_alerts.aspx.
Background Information
The corporation's proprietary distribution network is dedicated
exclusively to selling
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited Unaudited
(Amounts in For the Quarter Ended For the Year Ended
thousands, except 4/25/2009 4/26/2008 4/25/2009 4/26/2008
per share data) (13 weeks) (13 weeks) (52 weeks) (52 weeks)
Sales $284,498 $368,030 $1,226,674 $1,450,941
Cost of sales
Cost of goods sold 192,937 260,777
Restructuring 123 2,610 9,818 5,057
Total cost of sales 193,060 263,387 887,907 1,056,713
Gross profit 91,438 104,643 338,767 394,228
Selling, general and
administrative 87,140 102,192 375,011 399,470
Restructuring 433 632 2,642 3,078
Write-down of
long-lived assets 467 - 7,503 -
Write-down of
intangibles - 2,617 47,677 8,426
Operating income
(loss) 3,398 (798) (94,066) (16,746)
Interest expense 1,049 7,534 5,581 13,899
Income from Continued
Dumping and Subsidy
Offset Act, net - - 8,124 7,147
Interest income 619 575 2,504 3,614
Other income (expense),
net (23) 691 (7,998) 5,393
Income (loss) from
continuing
operations before
income taxes 2,945 (7,066) (97,017) (14,491)
Income tax (benefit)
expense (2,378) (2,595) 24,330 (6,954)
Income (loss) from
continuing
operations 5,323 (4,471) (121,347) (7,537)
Income (loss) from
discontinued
operations (net of
tax) - 50 - (6,000)
Net income (loss) $5,323 $(4,421) $(121,347) $(13,537)
Basic average shares 52,035 51,425 51,460 51,408
Basic income (loss)
from continuing
operations per share
Discontinued
operations per share
(net of tax) - - - (0.11)
Basic net income
(loss) per share
Diluted average shares 52,035 51,425 51,460 51,408
Diluted income (loss)
from continuing
operations per share
Discontinued
operations per share
(net of tax) - - - (0.11)
Diluted net income
(loss) per share
Dividends paid per share $-
LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
As of
(Amounts in thousands, except par value)
Current assets
Cash and equivalents $17,364 $14,476
Restricted cash 18,713 506
Receivables, net of allowance of
$28,385 in 2009 and $17,942 in 2008 147,858 200,422
Inventories, net 140,178 178,361
Deferred income taxes - current 795 12,398
Other current assets 22,872 21,325
Total current assets 347,780 427,488
Property, plant and equipment, net 150,234 171,001
Deferred income taxes - long term - 26,922
Goodwill - 47,233
Trade names 3,100 9,006
Other long-term assets, net of allowance
of
Total assets $552,545 $768,870
Current liabilities
Current portion of long-term debt $8,724 $4,792
Accounts payable 41,571 56,421
Accrued expenses and other current
liabilities 75,733 102,700
Total current liabilities 126,028 163,913
Long-term debt 52,148 99,578
Deferred income taxes 724 -
Other long-term liabilities 67,912 54,783
Contingencies and commitments - -
Shareholders' equity
Common shares,$1 par value - 150,000 authorized; 51,478 outstanding in 2009 and 51,428 outstanding in 2008 51,478 51,428 Capital in excess of par value 205,945 209,388 Retained earnings 70,769 190,215 Accumulated other comprehensive (loss) (22,459) (435) Total shareholders' equity 305,733 450,596 Total liabilities and shareholders' equity $552,545 $768,870 LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited Quarter Unaudited Year Ended Ended (Amounts in thousands) 4/25/2009 4/26/2008 4/25/2009 4/26/2008 Cash flows from operating activities Net income (loss) $5,323 $(4,421) $(121,347) $(13,537) Adjustments to reconcile net income (loss) to cash provided by operating activities (Gain) loss on sale of assets (106) 270 (2,813) 270 Write-down of investments - - 5,140 - Write-down of intangibles - 2,617 47,677 8,426 Write-down of long-lived assets 467 - 7,503 - Write-down of assets from businesses held for sale (net of tax) - - - 2,159 (Gain) loss on sale of discontinued operations (net of tax) - (198) - 3,696 Restructuring 556 3,242 12,460 8,135 Provision for doubtful accounts 6,815 2,177 25,254 8,550 Depreciation and amortization 5,709 6,190 23,479 24,696 Stock-based compensation expense 952 1,362 3,819 4,527 Change in receivables 3,909 11,715 27,223 20,956 Change in inventories 29,615 5,574 36,995 23,471 Change in payables (8,120) (5,287) (14,544) (10,394) Change in other assets and liabilities (12,076) (7,038) (37,961) (25,689) Change in deferred taxes 623 (3,557) 38,803 (6,027) Total adjustments 28,344 17,067 173,035 62,776 Net cash provided by operating activities 33,667 12,646 51,688 49,239 Cash flows from
investing activities
Proceeds from disposals
of assets 1,229 1,023 9,060 8,761
Proceeds from sale of
discontinued operations - - - 4,169
Capital expenditures (1,546) (6,548) (15,625) (27,386)
Purchases of investments (735) (5,485) (11,330) (34,562)
Proceeds from sales of
investments 12,794 5,338 34,675 35,580
Change in restricted
cash (10,543) 1,321 (18,207) 160
Change in other
long-term assets (235) (2,791) (581) (705)
Net cash provided by
(used for) investing
activities 964 (7,142) (2,008) (13,983)
Cash flows from
financing activities
Proceeds from debt 336 92,470 50,794 93,861
Payments on debt (28,100) (142,578) (92,139) (144,790)
Stock issued/(canceled)
for stock and employee
benefit plans - (140) - (269)
Dividends paid 11 (2,076) (5,177) (20,746)
Net cash used for
financing activities (27,753) (52,324) (46,522) (71,944)
Effect of exchange rate
changes on cash and
equivalents (30) (52) (901) 109
Change in cash and
equivalents 6,848 (46,872) 2,257 (36,579)
Cash acquired from
consolidation of VIEs - - 631 -
Cash and equivalents at
beginning of period 10,516 61,348 14,476 51,055
Cash and equivalents at
end of period $17,364 $14,476 $17,364 $14,476
LA-Z-BOY INCORPORATED
Segment Information
Unaudited Unaudited
For the Quarter Ended For the Year Ended
4/25/2009 4/26/2008 4/25/2009 4/26/2008
(Amounts in thousands) (13 weeks) (13 weeks) (52 weeks) (52 weeks)
Sales
Upholstery Group $214,952 $277,458 $899,204 $1,084,418
Casegoods Group 39,290 48,770 178,000 213,896
Retail Group 38,430 48,902 160,838 190,180
VIEs/Eliminations (8,174) (7,100) (11,368) (37,553)
Consolidated $284,498 $368,030 $1,226,674 $1,450,941
Operating income (loss)
Upholstery Group $19,373 $22,961 $35,410 $70,332
Casegoods Group (1,265) 1,752 554 10,151
Retail Group (7,332) (12,565) (34,841) (40,265)
Corporate and Other* (6,355) (7,087) (27,549) (40,403)
Restructuring (556) (3,242) (12,460) (8,135)
Long-lived asset
write-down (467) - (7,503) -
Intangible write-down - (2,617) (47,677) (8,426)
Consolidated $3,398 $(798) $(94,066) $(16,746)
* Variable Interest Entities ("VIEs") are included in corporate and other.
LA-Z-BOY INCORPORATED
Unaudited Quarterly Financial Data
(Dollar amounts in
thousands, except per
share data) 7/26/2008 10/25/2008 1/24/2009 4/25/2009
Fiscal Quarter Ended (13 weeks) (13 weeks) (13 weeks) (13 weeks)
Sales $321,652 $331,948 $288,576 $284,498
Cost of sales
Cost of goods sold 235,115 242,681 207,356 192,937
Restructuring 5,795 2,236 1,664 123
Total cost of sales 240,910 244,917 209,020 193,060
Gross profit 80,742 87,031 79,556 91,438
Selling, general and
administrative 91,837 101,942 94,092 87,140
Restructuring 781 687 741 433
Write-down of
long-lived assets - - 7,036 467
Write-down of
intangibles 1,292 408 45,977 -
Operating income
(loss) (13,168) (16,006) (68,290) 3,398
Interest expense 1,495 1,651 1,386 1,049
Income from Continued
Dumping and Subsidy
Offset Act, net - - 8,124 -
Interest income 932 630 323 619
Other income (expense),
net 143 (685) (7,433) (23)
Pretax income (loss) (13,588) (17,712) (68,662) 2,945
Income tax expense (benefit) (5,044) 36,032 (4,280) (2,378)
Net income (loss) $(8,544) $(53,744) $(64,382) $5,323
Diluted weighted
average shares
outstanding 51,428 51,458 51,475 52,035
Diluted net income
(loss) per share $(0.17) $(1.04) $(1.25) $0.10
LA-Z-BOY INCORPORATED
Unaudited Quarterly Financial Data
(Dollar amounts in
thousands, except
per share data) 7/28/2007 10/27/2007 1/26/2008 4/26/2008
Fiscal Quarter Ended (13 weeks) (13 weeks) (13 weeks) (13 weeks)
Sales $344,396 $365,434 $373,081 $368,030
Cost of sales
Cost of goods sold 259,143 266,658 265,078 260,777
Restructuring 2,561 518 (632) 2,610
Total cost of sales 261,704 267,176 264,446 263,387
Gross profit 82,692 98,258 108,635 104,643
Selling, general and
administrative 94,508 98,098 104,672 102,192
Restructuring 1,120 449 877 632
Write-down of
intangibles - 5,809 - 2,617
Operating income
(loss) (12,936) (6,098) 3,086 (798)
Interest expense 2,097 2,120 2,148 7,534
Income from Continued
Dumping and Subsidy
Offset Act, net - - 7,147 -
Interest income 882 1,023 1,134 575
Other income, net 566 351 3,785 691
Income (loss) from
continuing
operations before
income taxes (13,585) (6,844) 13,004 (7,066)
Income tax expense
(benefit) (5,043) (3,192) 3,876 (2,595)
Income (loss) from
continuing
operations (8,542) (3,652) 9,128 (4,471)
Income (loss) from
discontinued
operations (net of tax) (152) (6,282) 384 50
Net income (loss) $(8,694) $(9,934) $9,512 $(4,421)
Diluted weighted
average shares
outstanding 51,380 51,410 51,590 51,425
Diluted income (loss)
from continuing
operations per share $(0.17) $(0.07) $0.18 $(0.09)
Diluted net income
(loss) per share $(0.17) $(0.19) $0.18 $(0.09)
SOURCELa-Z-Boy Incorporated -0-06/15/2009 /CONTACT: Kathy Liebmann,La-Z-Boy Incorporated , +1-734-241-2438, kathy.liebmann@la-z-boy.com/ /Web Site: http://www.la-z-boy.com / (LZB LZB) CO:La-Z-Boy Incorporated ST:Michigan IN: FRNREA SU : ERN ERP CCA PR -- DE32436 -- 873606/15/2009 16:27 EDT http://www.prnewswire.com