LA-Z-BOY
INCORPORATED
|
(Exact
name of registrant as specified in its
charter)
|
MICHIGAN
|
38-0751137
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
|
1284
North Telegraph Road, Monroe, Michigan
|
48162-3390
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
None
|
(Former
name, former address and former fiscal year, if changed since last
report.)
|
Class
|
Outstanding at November 10,
2009
|
|
Common
Shares, $1.00 par value
|
51,546,055
|
Page
Number(s)
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3-4
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9-10
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11-12
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12-13
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13-15
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15-16
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17-18
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19-20
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20
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21-22
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23-30
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30-33
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33-35
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35
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35
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36
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36
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36
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37
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37
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38
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39
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Second Quarter Ended
|
||||||||
(Unaudited, amounts in thousands, except per share
data)
|
10/24/09
|
10/25/08
|
||||||
Sales
|
$ | 300,707 | $ | 331,948 | ||||
Cost
of sales
|
||||||||
Cost
of goods sold
|
204,962 | 243,090 | ||||||
Restructuring
|
663 | 2,236 | ||||||
Total
cost of sales
|
205,625 | 245,326 | ||||||
Gross
profit
|
95,082 | 86,622 | ||||||
Selling,
general and administrative
|
84,697 | 101,499 | ||||||
Write-down
of goodwill
|
— | 408 | ||||||
Restructuring
|
520 | 687 | ||||||
Operating
income (loss)
|
9,865 | (15,972 | ) | |||||
Interest
expense
|
831 | 1,651 | ||||||
Interest
income
|
199 | 630 | ||||||
Other
income (expense), net
|
236 | (685 | ) | |||||
Earnings
(loss) before income taxes
|
9,469 | (17,678 | ) | |||||
Income
tax expense
|
3,762 | 36,032 | ||||||
Net
income (loss)
|
5,707 | (53,710 | ) | |||||
Net
(income) loss attributable to noncontrolling interests
|
200 | (34 | ) | |||||
Net
income (loss) attributable to La-Z-Boy Incorporated
|
$ | 5,907 | $ | (53,744 | ) | |||
Basic
average shares
|
51,527 | 51,458 | ||||||
Basic
net income (loss) attributable to La-Z-Boy Incorporated per
share
|
$ | 0.11 | $ | (1.05 | ) | |||
Diluted
average shares
|
51,755 | 51,458 | ||||||
Diluted
net income (loss) attributable to La-Z-Boy Incorporated per
share
|
$ | 0.11 | $ | (1.05 | ) | |||
Dividends
paid per share
|
$ | — | $ | 0.04 |
Six Months Ended
|
||||||||
(Unaudited, amounts in thousands, except per share
data)
|
10/24/09
|
10/25/08
|
||||||
Sales
|
$ | 563,378 | $ | 653,600 | ||||
Cost
of sales
|
||||||||
Cost
of goods sold
|
386,511 | 478,685 | ||||||
Restructuring
|
1,399 | 8,032 | ||||||
Total
cost of sales
|
387,910 | 486,717 | ||||||
Gross
profit
|
175,468 | 166,883 | ||||||
Selling,
general and administrative
|
162,153 | 192,770 | ||||||
Write-down
of goodwill
|
— | 1,700 | ||||||
Restructuring
|
821 | 1,467 | ||||||
Operating
income (loss)
|
12,494 | (29,054 | ) | |||||
Interest
expense
|
1,810 | 3,146 | ||||||
Interest
income
|
475 | 1,562 | ||||||
Other
income (expense), net
|
945 | (541 | ) | |||||
Earnings
(loss) before income taxes
|
12,104 | (31,179 | ) | |||||
Income
tax expense
|
4,201 | 30,988 | ||||||
Net
income (loss)
|
7,903 | (62,167 | ) | |||||
Net
(income) attributable to noncontrolling interests
|
(13 | ) | (121 | ) | ||||
Net
income (loss) attributable to La-Z-Boy Incorporated
|
$ | 7,890 | $ | (62,288 | ) | |||
Basic
average shares
|
51,503 | 51,443 | ||||||
Basic
net income (loss) attributable to La-Z-Boy Incorporated per
share
|
$ | 0.15 | $ | (1.21 | ) | |||
Diluted
average shares
|
51,551 | 51,443 | ||||||
Diluted
net income (loss) attributable to La-Z-Boy Incorporated per
share
|
$ | 0.15 | $ | (1.21 | ) | |||
Dividends
paid per share
|
$ | — | $ | 0.08 |
(Unaudited, amounts in
thousands)
|
10/24/09
|
4/25/09
|
||||||
Current
assets
|
||||||||
Cash
and equivalents
|
$ | 59,037 | $ | 17,364 | ||||
Restricted
cash
|
500 | 18,713 | ||||||
Receivables,
net of allowance of $25,195 at 10/24/09 and $28,385 at
4/25/09
|
162,878 | 147,858 | ||||||
Inventories,
net
|
138,946 | 140,178 | ||||||
Deferred
income taxes—current
|
795 | 795 | ||||||
Other
current assets
|
15,956 | 22,872 | ||||||
Total
current assets
|
378,112 | 347,780 | ||||||
Property,
plant and equipment, net
|
142,704 | 150,234 | ||||||
Trade
names
|
3,100 | 3,100 | ||||||
Other
long-term assets
|
48,183 | 51,431 | ||||||
Total
assets
|
$ | 572,099 | $ | 552,545 | ||||
Current
liabilities
|
||||||||
Current
portion of long-term debt
|
$ | 2,067 | $ | 8,724 | ||||
Accounts
payable
|
46,318 | 41,571 | ||||||
Accrued
expenses and other current liabilities
|
86,167 | 75,733 | ||||||
Total
current liabilities
|
134,552 | 126,028 | ||||||
Long-term
debt
|
46,911 | 52,148 | ||||||
Deferred
income taxes
|
724 | 724 | ||||||
Other
long-term liabilities
|
67,950 | 63,875 | ||||||
Contingencies
and commitments
|
— | — | ||||||
Equity
|
||||||||
La-Z-Boy
Incorporated shareholders’ equity:
|
||||||||
Common
shares, $1 par value
|
51,546 | 51,478 | ||||||
Capital
in excess of par value
|
199,585 | 205,945 | ||||||
Retained
earnings
|
87,342 | 70,769 | ||||||
Accumulated
other comprehensive loss
|
(20,955 | ) | (22,698 | ) | ||||
Total
La-Z-Boy Incorporated shareholders' equity
|
317,518 | 305,494 | ||||||
Noncontrolling
interests
|
4,444 | 4,276 | ||||||
Total
equity
|
321,962 | 309,770 | ||||||
Total
liabilities and equity
|
$ | 572,099 | $ | 552,545 |
Second Quarter Ended
|
Six Months Ended
|
|||||||||||||||
(Unaudited, amounts in thousands)
|
10/24/09
|
10/25/08
|
10/24/09
|
10/25/08
|
||||||||||||
Cash
flows from operating activities
|
||||||||||||||||
Net
income (loss)
|
$ | 5,707 | $ | (53,710 | ) | $ | 7,903 | $ | (62,167 | ) | ||||||
Adjustments
to reconcile net income (loss) to cash provided by (used for) operating
activities
|
||||||||||||||||
Gain
on sale of assets
|
(75 | ) | (604 | ) | (88 | ) | (2,670 | ) | ||||||||
Write-down
of long-lived assets
|
200 | — | 200 | — | ||||||||||||
Write-down
of goodwill
|
— | 408 | — | 1,700 | ||||||||||||
Restructuring
|
1,183 | 2,923 | 2,220 | 9,499 | ||||||||||||
Provision
for doubtful accounts
|
2,152 | 4,797 | 4,514 | 9,000 | ||||||||||||
Depreciation
and amortization
|
6,135 | 5,989 | 12,244 | 11,943 | ||||||||||||
Stock-based
compensation expense
|
1,621 | 986 | 2,628 | 1,855 | ||||||||||||
Change
in receivables
|
(26,484 | ) | (22,261 | ) | (17,586 | ) | (8,091 | ) | ||||||||
Change
in inventories
|
3,329 | (63 | ) | 1,231 | 10,843 | |||||||||||
Change
in other assets
|
11,106 | 2,272 | 6,439 | (529 | ) | |||||||||||
Change
in payables
|
7,073 | 8,375 | 4,747 | 1,927 | ||||||||||||
Change
in other liabilities
|
10,282 | (5,199 | ) | 11,553 | (26,117 | ) | ||||||||||
Change
in deferred taxes
|
(8 | ) | 41,677 | — | 42,838 | |||||||||||
Total
adjustments
|
16,514 | 39,300 | 28,102 | 52,198 | ||||||||||||
Net
cash provided by (used for) operating activities
|
22,221 | (14,410 | ) | 36,005 | (9,969 | ) | ||||||||||
Cash
flows from investing activities
|
||||||||||||||||
Proceeds
from disposals of assets
|
230 | 2,805 | 1,916 | 7,786 | ||||||||||||
Capital
expenditures
|
(1,340 | ) | (2,618 | ) | (2,779 | ) | (9,990 | ) | ||||||||
Purchases
of investments
|
(1,338 | ) | (3,516 | ) | (2,537 | ) | (8,965 | ) | ||||||||
Proceeds
from sales of investments
|
1,445 | 5,233 | 4,109 | 11,027 | ||||||||||||
Change
in restricted cash
|
— | (2,668 | ) | 17,007 | (2,956 | ) | ||||||||||
Change
in other long-term assets
|
29 | 158 | 14 | 229 | ||||||||||||
Net
cash provided by (used for) investing activities
|
(974 | ) | (606 | ) | 17,730 | (2,869 | ) | |||||||||
Cash
flows from financing activities
|
||||||||||||||||
Proceeds
from debt
|
10,213 | 24,831 | 20,673 | 39,466 | ||||||||||||
Payments
on debt
|
(10,408 | ) | (6,430 | ) | (32,567 | ) | (25,287 | ) | ||||||||
Dividends
paid
|
— | (2,074 | ) | — | (4,151 | ) | ||||||||||
Net
cash provided by (used for) financing activities
|
(195 | ) | 16,327 | (11,894 | ) | 10,028 | ||||||||||
Effect
of exchange rate changes on cash and equivalents
|
(348 | ) | (604 | ) | (168 | ) | (643 | ) | ||||||||
Change
in cash and equivalents
|
20,704 | 707 | 41,673 | (3,453 | ) | |||||||||||
Cash
and equivalents at beginning of period
|
38,333 | 10,317 | 17,364 | 14,477 | ||||||||||||
Cash
and equivalents at end of period
|
$ | 59,037 | $ | 11,024 | $ | 59,037 | $ | 11,024 | ||||||||
Cash
paid (net of refunds) during period – income taxes
|
$ | (13,348 | ) | $ | (719 | ) | $ | (13,082 | ) | $ | 204 | |||||
Cash
paid during period - interest
|
$ | 563 | $ | 1,287 | $ | 1,288 | $ | 2,413 |
(Unaudited, amounts in thousands)
|
Common
Shares
|
Capital in
Excess of Par
Value
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Non-
Controlling
Interests
|
Total
|
||||||||||||||||||
At
April 26, 2008
|
$ | 51,428 | $ | 209,388 | $ | 190,215 | $ | (227 | ) | $ | 2,582 | $ | 453,386 | |||||||||||
Comprehensive
loss
|
||||||||||||||||||||||||
Net
income (loss)
|
(121,347 | ) | 121 | |||||||||||||||||||||
Unrealized
loss on marketable securities arising during the period (net of tax of
$0.4 million)
|
(4,332 | ) | ||||||||||||||||||||||
Reclassification
adjustment for loss on marketable securities included in net
loss
|
5,180 | |||||||||||||||||||||||
Translation
adjustment
|
(622 | ) | 447 | |||||||||||||||||||||
Change
in fair value of cash flow hedge
|
(723 | ) | ||||||||||||||||||||||
Net
actuarial (loss)
|
(21,974 | ) | ||||||||||||||||||||||
Total
comprehensive loss
|
(143,250 | ) | ||||||||||||||||||||||
Stock
issued for stock and employee benefit plans, net of
cancellations
|
50 | (7,262 | ) | 7,078 | (134 | ) | ||||||||||||||||||
Stock
option, restricted stock and performance based stock
expense
|
3,819 | 3,819 | ||||||||||||||||||||||
Change
in noncontrolling interest upon consolidation of VIE and other changes in
noncontrolling interests
|
1,126 | 1,126 | ||||||||||||||||||||||
Dividends
paid
|
(5,177 | ) | (5,177 | ) | ||||||||||||||||||||
At
April 25, 2009
|
51,478 | 205,945 | 70,769 | (22,698 | ) | 4,276 | 309,770 | |||||||||||||||||
Comprehensive
income
|
||||||||||||||||||||||||
Net
income
|
7,890 | 13 | ||||||||||||||||||||||
Unrealized
gain on marketable securities arising during the period
|
1,626 | |||||||||||||||||||||||
Reclassification
adjustment for gain on marketable securities included in net
income
|
(88 | ) | ||||||||||||||||||||||
Translation
adjustment
|
(850 | ) | 155 | |||||||||||||||||||||
Net
pension amortization
|
1,054 | |||||||||||||||||||||||
Change
in fair value of cash flow hedge
|
1 | |||||||||||||||||||||||
Total
comprehensive income
|
9,801 | |||||||||||||||||||||||
Stock
issued for stock and employee benefit plans, net of
cancellations
|
68 | (8,976 | ) | 8,683 | (225 | ) | ||||||||||||||||||
Stock
option, restricted stock and performance based stock
expense
|
2,616 | 2,616 | ||||||||||||||||||||||
At
October 24, 2009
|
$ | 51,546 | $ | 199,585 | $ | 87,342 | $ | (20,955 | ) | $ | 4,444 | $ | 321,962 |
A
summary of inventories is as
follows:
|
(Unaudited, amounts in
thousands)
|
10/24/09
|
4/25/09
|
||||||
Raw
materials
|
$ | 60,804 | $ | 53,498 | ||||
Work
in process
|
11,702 | 11,281 | ||||||
Finished
goods
|
92,188 | 101,147 | ||||||
FIFO
inventories
|
164,694 | 165,926 | ||||||
Excess
of FIFO over LIFO
|
(25,748 | ) | (25,748 | ) | ||||
Inventories,
net
|
$ | 138,946 | $ | 140,178 |
Second Quarter Ended
|
Six Months Ended
|
|||||||||||||||
(Unaudited, amounts in thousands)
|
10/24/09
|
10/25/08
|
10/24/09
|
10/25/08
|
||||||||||||
Service
cost
|
$ | 261 | $ | 328 | $ | 522 | $ | 656 | ||||||||
Interest
cost
|
1,400 | 1,359 | 2,800 | 2,718 | ||||||||||||
Expected
return on plan assets
|
(1,206 | ) | (1,728 | ) | (2,412 | ) | (3,456 | ) | ||||||||
Net
amortization
|
527 | — | 1,054 | — | ||||||||||||
Net
periodic pension cost (benefit)
|
$ | 982 | $ | (41 | ) | $ | 1,964 | $ | (82 | ) |
Second Quarter Ended
|
Six Months Ended
|
|||||||||||||||
(Unaudited, amounts in thousands)
|
10/24/09
|
10/25/08
|
10/24/09
|
10/25/08
|
||||||||||||
Balance
as of the beginning of the period
|
$ | 14,297 | $ | 14,645 | $ | 14,394 | $ | 14,334 | ||||||||
Accruals
during the period
|
3,383 | 3,993 | 6,720 | 8,097 | ||||||||||||
Settlements
during the period
|
(3,387 | ) | (4,201 | ) | (6,821 | ) | (7,994 | ) | ||||||||
Balance
as of the end of the period
|
$ | 14,293 | $ | 14,437 | $ | 14,293 | $ | 14,437 |
Second Quarter Ended
|
||||||||||||||||||||||||
10/24/09
|
10/25/08
|
|||||||||||||||||||||||
(Unaudited, amounts in thousands)
|
Attributable
to La-Z-Boy
Incorporated
|
Non-
controlling
Interest
|
Total
|
Attributable
to La-Z-Boy
Incorporated
|
Non-
controlling
Interest
|
Total
|
||||||||||||||||||
Net
income (loss)
|
$ | 5,907 | $ | (200 | ) | $ | 5,707 | $ | (53,744 | ) | $ | 34 | $ | (53,710 | ) | |||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||
Translation
adjustment
|
(130 | ) | 41 | (89 | ) | (1,129 | ) | 1,370 | 241 | |||||||||||||||
Change
in fair value of cash flow hedge
|
15 | — | 15 | (502 | ) | — | (502 | ) | ||||||||||||||||
Net
pension amortization
|
527 | — | 527 | — | — | — | ||||||||||||||||||
Unrealized
gains/(losses) on marketable securities arising during the
period
|
692 | — | 692 | (4,034 | ) | — | (4,034 | ) | ||||||||||||||||
Total
comprehensive income (loss)
|
$ | 7,011 | $ | (159 | ) | $ | 6,852 | $ | (59,409 | ) | $ | 1,404 | $ | (58,005 | ) |
Six Months Ended
|
||||||||||||||||||||||||
10/24/09
|
10/25/08
|
|||||||||||||||||||||||
(Unaudited, amounts in thousands)
|
Attributable
to La-Z-Boy
Incorporated
|
Non-
controlling
Interest
|
Total
|
Attributable
to La-Z-Boy
Incorporated
|
Non-
controlling
Interest
|
Total
|
||||||||||||||||||
Net
income (loss)
|
$ | 7,890 | $ | 13 | $ | 7,903 | $ | (62,288 | ) | $ | 121 | $ | (62,167 | ) | ||||||||||
Other
comprehensive income (loss):
|
||||||||||||||||||||||||
Translation
adjustment
|
(850 | ) | 155 | (695 | ) | (1,302 | ) | 1,211 | (91 | ) | ||||||||||||||
Change
in fair value of cash flow hedge
|
1 | — | 1 | (224 | ) | — | (224 | ) | ||||||||||||||||
Net
pension amortization
|
1,054 | — | 1,054 | — | — | — | ||||||||||||||||||
Unrealized
gains/(losses) on marketable securities arising during the
period
|
1,538 | — | 1,538 | (4,780 | ) | — | (4,780 | ) | ||||||||||||||||
Total
comprehensive income (loss)
|
$ | 9,633 | $ | 168 | $ | 9,801 | $ | (68,594 | ) | $ | 1,332 | $ | (67,262 | ) |
Second Quarter Ended
|
Six Months Ended
|
|||||||||||||||
(Unaudited, amounts in thousands)
|
10/24/09
(13 weeks)
|
10/25/08
(13 weeks)
|
10/24/09
(26 weeks)
|
10/25/08
(26 weeks)
|
||||||||||||
Sales
|
||||||||||||||||
Upholstery
Group
|
$ | 232,780 | $ | 247,934 | $ | 429,472 | $ | 485,052 | ||||||||
Casegoods
Group
|
37,302 | 48,473 | 73,167 | 96,594 | ||||||||||||
Retail
Group
|
38,014 | 39,484 | 73,976 | 81,911 | ||||||||||||
VIEs
|
12,248 | 11,793 | 23,987 | 25,871 | ||||||||||||
Other/eliminations
|
(19,637 | ) | (15,736 | ) | (37,224 | ) | (35,828 | ) | ||||||||
Consolidated
|
$ | 300,707 | $ | 331,948 | $ | 563,378 | $ | 653,600 | ||||||||
Operating
income (loss)
|
||||||||||||||||
Upholstery
Group
|
$ | 25,359 | $ | 8,338 | $ | 41,649 | $ | 18,194 | ||||||||
Casegoods
Group
|
(184 | ) | 755 | (305 | ) | 2,132 | ||||||||||
Retail
Group
|
(5,301 | ) | (10,391 | ) | (10,969 | ) | (20,401 | ) | ||||||||
VIEs
|
(402 | ) | (2,621 | ) | (137 | ) | (3,709 | ) | ||||||||
Corporate
and Other
|
(8,424 | ) | (8,722 | ) | (15,524 | ) | (14,071 | ) | ||||||||
Goodwill
write-down
|
— | (408 | ) | — | (1,700 | ) | ||||||||||
Restructuring
|
(1,183 | ) | (2,923 | ) | (2,220 | ) | (9,499 | ) | ||||||||
$ | 9,865 | $ | (15,972 | ) | $ | 12,494 | $ | (29,054 | ) |
Fiscal 2010
|
||||||||||||||||
(Unaudited, amounts in thousands)
|
4/25/09
Balance
|
Charges to
Expense *
|
Cash
Payments
or Asset
Write-Offs
|
10/24/09
Balance
|
||||||||||||
Severance and benefit-related costs
|
$ | 2,022 | $ | (30 | ) | $ | (777 | ) | $ | 1,215 | ||||||
Contract
termination costs
|
530 | 821 | (669 | ) | 682 | |||||||||||
Other
|
— | 1,429 | (1,429 | ) | — | |||||||||||
Total
restructuring
|
$ | 2,552 | $ | 2,220 | $ | (2,875 | ) | $ | 1,897 |
*
|
Charges
to expense include $0.1 million of non-cash charges for contract
termination
costs.
|
Fiscal 2009
|
||||||||||||||||
(Unaudited, amounts in thousands)
|
4/26/08
Balance
|
Charges to
Expense **
|
Cash
Payments
or Asset
Write-Offs
|
4/25/09
Balance
|
||||||||||||
Severance
and benefit-related costs
|
$ | 2,842 | $ | 4,149 | $ | (4,969 | ) | $ | 2,022 | |||||||
Fixed
asset write-downs, net of gains
|
— | 512 | (512 | ) | — | |||||||||||
Contract
termination costs
|
939 | 1,528 | (1,937 | ) | 530 | |||||||||||
Other
|
— | 6,271 | (6,271 | ) | — | |||||||||||
Total
restructuring
|
$ | 3,781 | $ | 12,460 | $ | (13,689 | ) | $ | 2,552 |
**
|
Charges
to expense include $1.8 million of non-cash charges for contract
termination costs, fixed asset and inventory
write-downs. Inventory write-downs of $1.2 million are included
in “Other.”
|
As of
|
||||||||||||||||
(Unaudited, amounts in
thousands)
|
10/24/09
|
4/25/09
|
||||||||||||||
Current
assets
|
$ | 17,967 | $ | 16,220 | ||||||||||||
Other
long-term assets
|
13,427 | 13,132 | ||||||||||||||
Total
assets
|
$ | 31,394 | $ | 29,352 | ||||||||||||
Current
liabilities
|
$ | 7,898 | $ | 5,983 | ||||||||||||
Other
long-term liabilities
|
2,969 | 3,085 | ||||||||||||||
Total
liabilities
|
$ | 10,867 | $ | 9,068 | ||||||||||||
Second Quarter Ended
|
Six Months Ended
|
|||||||||||||||
(Unaudited, amounts in thousands
)
|
10/24/09
|
10/25/08
|
10/24/09
|
10/25/08
|
||||||||||||
Net
sales, net of inter-company eliminations
|
$ | 12,248 | $ | 11,793 | $ | 23,987 | $ | 25,871 | ||||||||
Net
loss
|
$ | (514 | ) | $ | (2,444 | ) | $ | (411 | ) | $ | (3,503 | ) | ||||
Second Quarter
Ended
|
Six Months
Ended
|
|||||||||||||||
(Unaudited, amounts in thousands)
|
10/24/09
|
10/25/08
|
10/24/09
|
10/25/08
|
||||||||||||
Numerator (basic and diluted):
|
||||||||||||||||
Net
income (loss) attributable to La-Z-Boy Incorporated
|
$ | 5,907 | $ | (53,744 | ) | $ | 7,890 | $ | (62,288 | ) | ||||||
Income
allocated to participating securities
|
(122 | ) | — | (141 | ) | — | ||||||||||
Dividends
on participating securities
|
— | (32 | ) | — | (53 | ) | ||||||||||
Net
income (loss) available to common shareholders
|
$ | 5,785 | $ | (53,776 | ) | $ | 7,749 | $ | (62,341 | ) |
Second Quarter
Ended
|
Six Months
Ended
|
|||||||||||||||
(Unaudited, amounts in thousands)
|
10/24/09
|
10/25/08
|
10/24/09
|
10/25/08
|
||||||||||||
Denominator:
|
||||||||||||||||
Basic
common shares (based upon weighted average)
|
51,527 | 51,458 | 51,503 | 51,443 | ||||||||||||
Add:
|
||||||||||||||||
Stock
option dilution
|
228 | — | 48 | — | ||||||||||||
Diluted
common shares
|
51,755 | 51,458 | 51,551 | 51,443 |
|
·
|
Level 1 —
Financial assets and liabilities whose values are based on unadjusted
quoted market prices for identical assets and liabilities in an active
market that we have the ability to
access.
|
·
|
Level 2 —
Financial assets and liabilities whose values are based on quoted prices
in markets that are not active or model inputs that are observable for
substantially the full term of the asset or
liability.
|
|
·
|
Level 3 —
Financial assets and liabilities whose values are based on prices or
valuation techniques that require inputs that are both unobservable and
significant to the overall fair value
measurement.
|
Fair Value Measurements
|
||||||||||||
(Unaudited, amounts in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Assets
|
||||||||||||
Available-for-sale
securities
|
$ | 8,230 | $ | 2,266 | $ | — | ||||||
Liabilities
|
||||||||||||
Interest
rate swap
|
— | (721 | ) | — | ||||||||
Total
|
$ | 8,230 | $ | 1,545 | $ | — |
future
income, margins and cash flows
|
future
economic performance
|
|
future
growth
|
industry
and importing trends
|
|
adequacy
and cost of financial resources
|
|
management
plans
|
Quarter Ended
|
||||||||||||
(Unaudited, amounts in thousands, except per
share amounts and percentages)
|
10/24/09
|
10/25/08
|
Percent
change
|
|||||||||
Upholstery
sales
|
$ | 232,780 | $ | 247,934 | (6.1 | )% | ||||||
Casegoods
sales
|
37,302 | 48,473 | (23.0 | )% | ||||||||
Retail
sales
|
38,014 | 39,484 | (3.7 | )% | ||||||||
VIE
sales
|
12,248 | 11,793 | 3.9 | % | ||||||||
Other/eliminations
|
(19,637 | ) | (15,736 | ) | (24.8 | )% | ||||||
Consolidated
sales
|
$ | 300,707 | $ | 331,948 | (9.4 | )% | ||||||
Consolidated
gross profit
|
$ | 95,082 | $ | 86,622 | 9.8 | % | ||||||
Consolidated
gross margin
|
31.6 | % | 26.1 | % | ||||||||
Consolidated
S,G&A
|
$ | 84,697 | $ | 101,499 | (16.6 | )% | ||||||
S,G&A
as a percent of sales
|
28.2 | % | 30.6 | % | ||||||||
Upholstery
operating income
|
$ | 25,359 | $ | 8,338 | 204.1 | % | ||||||
Casegoods
operating income (loss)
|
(184 | ) | 755 | (124.4 | )% | |||||||
Retail
operating loss
|
(5,301 | ) | (10,391 | ) | 49.0 | % | ||||||
VIE
operating loss
|
(402 | ) | (2,621 | ) | 84.7 | % | ||||||
Corporate
and other
|
(8,424 | ) | (8,722 | ) | 3.4 | % | ||||||
Goodwill
write-down
|
— | (408 | ) | 100.0 | % | |||||||
Restructuring
|
(1,183 | ) | (2,923 | ) | 59.5 | % | ||||||
Consolidated
operating income (loss)
|
$ | 9,865 | $ | (15,972 | ) | 161.8 | % | |||||
Upholstery
operating margin
|
10.9 | % | 3.4 | % | ||||||||
Casegoods
operating margin
|
(0.5 | )% | 1.6 | % | ||||||||
Retail
operating margin
|
(13.9 | )% | (26.3 | )% | ||||||||
Consolidated
operating margin
|
3.3 | % | (4.8 | )% | ||||||||
Net
income (loss) attributable to La-Z-Boy Incorporated
|
$ | 5,907 | $ | (53,744 | ) | |||||||
Net
income (loss) per share attributable to La-Z-Boy
Incorporated
|
$ | 0.11 | $ | (1.05 | ) |
Six Months Ended
|
||||||||||||
(Amounts in thousands, except per share amounts
and percentages)
|
10/24/09
|
10/25/08
|
Percent
change
|
|||||||||
Upholstery
sales
|
$ | 429,472 | $ | 485,052 | (11.5 | )% | ||||||
Casegoods
sales
|
73,167 | 96,594 | (24.3 | )% | ||||||||
Retail
sales
|
73,976 | 81,911 | (9.7 | )% | ||||||||
VIE
sales
|
23,987 | 25,871 | (7.3 | )% | ||||||||
Other/eliminations
|
(37,224 | ) | (35,828 | ) | (3.9 | )% | ||||||
Consolidated
sales
|
$ | 563,378 | $ | 653,600 | (13.8 | )% | ||||||
Consolidated
gross profit
|
$ | 175,468 | $ | 166,883 | 5.1 | % | ||||||
Consolidated
gross margin
|
31.1 | % | 25.5 | % | ||||||||
Consolidated
S,G&A
|
$ | 162,153 | $ | 192,770 | (15.9 | )% | ||||||
S,G&A
as a percent of sales
|
28.8 | % | 29.5 | % | ||||||||
Upholstery
operating income
|
$ | 41,649 | $ | 18,194 | 128.9 | % | ||||||
Casegoods
operating income (loss)
|
(305 | ) | 2,132 | (114.3 | )% | |||||||
Retail
operating loss
|
(10,969 | ) | (20,401 | ) | 46.2 | % | ||||||
VIEs
operating loss
|
(137 | ) | (3,709 | ) | 96.3 | % | ||||||
Corporate
and other
|
(15,524 | ) | (14,071 | ) | (10.3 | )% | ||||||
Goodwill
write-down
|
— | (1,700 | ) | 100.0 | % | |||||||
Restructuring
|
(2,220 | ) | (9,499 | ) | 76.6 | % | ||||||
Consolidated
operating income (loss)
|
$ | 12,494 | $ | (29,054 | ) | 143.0 | % | |||||
Upholstery
operating margin
|
9.7 | % | 3.8 | % | ||||||||
Casegoods
operating margin
|
(0.4 | )% | 2.2 | % | ||||||||
Retail
operating margin
|
(14.8 | )% | (24.9 | )% | ||||||||
Consolidated
operating margin
|
2.2 | % | (4.4 | )% | ||||||||
Net
income (loss) attributable to La-Z-Boy Incorporated
|
$ | 7,890 | $ | (62,288 | ) | |||||||
Net
income (loss) per share attributable to La-Z-Boy
Incorporated
|
$ | 0.15 | $ | (1.21 | ) |
Cash Flows Provided By (Used For)
|
Six Months Ended
|
|||||||
(Unaudited, amounts in
thousands)
|
10/24/09
|
10/25/08
|
||||||
Operating
activities
|
||||||||
Net
income (loss)
|
$ | 7,903 | $ | (62,167 | ) | |||
Non-cash
add backs and changes in deferred taxes
|
19,498 | 64,666 | ||||||
Restructuring
|
2,220 | 9,499 | ||||||
Working
capital
|
6,384 | (21,967 | ) | |||||
Cash
provided by (used for) operating activities
|
36,005 | (9,969 | ) | |||||
Investing
activities
|
17,730 | (2,869 | ) | |||||
Financing
activities
|
||||||||
Net
increase (decrease) in debt
|
(11,894 | ) | 14,179 | |||||
Other
financing activities, mainly dividends
|
— | (4,151 | ) | |||||
Cash
provided by (used for) financing activities
|
(11,894 | ) | 10,028 | |||||
Exchange
rate changes
|
(168 | ) | (643 | ) | ||||
Net
increase (decrease) in cash and equivalents
|
$ | 41,673 | $ | (3,453 | ) |
Fiscal 2010
|
||||||||||||||||
(Unaudited, amounts in thousands)
|
4/25/09
Balance
|
Charges to
Expense *
|
Cash
Payments
or Asset
Write-Offs
|
10/24/09
Balance
|
||||||||||||
Severance
and benefit-related costs
|
$ | 2,022 | $ | (30 | ) | $ | (777 | ) | $ | 1,215 | ||||||
Contract
termination costs
|
530 | 821 | (669 | ) | 682 | |||||||||||
Other
|
— | 1,429 | (1,429 | ) | — | |||||||||||
Total
restructuring
|
$ | 2,552 | $ | 2,220 | $ | (2,875 | ) | $ | 1,897 |
Fiscal 2009
|
||||||||||||||||
(Unaudited, amounts in thousands)
|
4/26/08
Balance
|
Charges to
Expense **
|
Cash
Payments
or Asset
Write-Offs
|
4/25/09
Balance
|
||||||||||||
Severance
and benefit-related costs
|
$ | 2,842 | $ | 4,149 | $ | (4,969 | ) | $ | 2,022 | |||||||
Fixed
asset write-downs, net of gains
|
— | 512 | (512 | ) | — | |||||||||||
Contract
termination costs
|
939 | 1,528 | (1,937 | ) | 530 | |||||||||||
Other
|
— | 6,271 | (6,271 | ) | — | |||||||||||
Total
restructuring
|
$ | 3,781 | $ | 12,460 | $ | (13,689 | ) | $ | 2,552 |
Proposal
Election of Directors for terms expiring
in 2012:
|
Shares
Voted
In Favor
|
Percent
Shares
In Favor
|
Shares
Withheld
|
|||||||||
John
H. Foss
|
43,251,478 | 97.4 | % | 1,141,859 | ||||||||
Janet
E. Kerr
|
43,316,124 | 97.6 | % | 1,077,213 | ||||||||
Nido
R. Qubein
|
42,858,074 | 96.6 | % | 1,535,263 |
Proposal
Election of a Director for a term
expiring in 2010:
|
Shares
Voted
In Favor
|
Percent
Shares
In Favor
|
Shares
Withheld
|
|||||||||
Richard
M. Gabrys
|
39,894,714 | 89.9 | % | 4,498,623 | ||||||||
Directors whose term in office continued after the
annual meeting:
|
||||||||||||
Kurt
L. Darrow
|
||||||||||||
David
K. Hehl
|
||||||||||||
James
W. Johnston
|
||||||||||||
H.
George Levy, M.D.
|
||||||||||||
Rocque
E. Lipford
|
||||||||||||
W.
Alan McCollough
|
||||||||||||
Jack
L. Thompson
|
Proposal
|
Shares
Voted
In Favor
|
Shares
Voted
Against
|
Shares
Abstained
|
Broker
Non-Votes
|
||||||||||||
Ratify
the selection of the independent registered public accounting firm for FYE
2010 (1)
|
43,807,956 | 405,799 | 179,582 | — |
|
(1)
|
Approval
required affirmative votes of majority of shares voted on
proposal.
|
Exhibit
Number
|
Description
|
|
(10.1)*
|
2005
La-Z-Boy Incorporated Executive Deferred Compensation Plan as amended and
restated effective November 18, 2008
|
|
(31.1)
|
Certifications
of Chief Executive Officer pursuant to Rule 13a-14(a)
|
|
(31.2)
|
Certifications
of Chief Financial Officer pursuant to Rule 13a-14(a)
|
|
(32)
|
|
Certifications
of Executive Officers pursuant to 18 U.S.C. Section
1350(b)
|
*
|
Indicates
a management contract or compensatory plan or arrangement under which a
director or executive officer may receive
benefits.
|
LA-Z-BOY INCORPORATED
|
|
(Registrant)
|
BY: /s/ Margaret L.
Mueller
|
|
Margaret
L. Mueller
|
|
Corporate
Controller
|
|
On
behalf of the registrant and as
|
|
Chief
Accounting Officer
|