-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fqGt+1cVBQ4cpY012u4YpJUYvAnUeoB6Zn+tzZwLt2AoeDsozu5Vf5ejRrycRkGd i3KZIPEhDWgpL3PkYvf5nw== 0000057131-95-000020.txt : 19950615 0000057131-95-000020.hdr.sgml : 19950615 ACCESSION NUMBER: 0000057131-95-000020 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950128 FILED AS OF DATE: 19950320 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LA Z BOY CHAIR CO CENTRAL INDEX KEY: 0000057131 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 380751137 STATE OF INCORPORATION: MI FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09656 FILM NUMBER: 95521870 BUSINESS ADDRESS: STREET 1: 1284 N TELEGRAPH RD CITY: MONROE STATE: MI ZIP: 48161-3390 BUSINESS PHONE: 3132414414 10-Q/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 FORM 10-Q/A (Amendment No. 1) to Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR QUARTER ENDED January 28, 1995 COMMISSION FILE NUMBER 1-9656 LA-Z-BOY CHAIR COMPANY (Exact name of registrant as specified in its charter) MICHIGAN 38-0751137 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1284 North Telegraph Road, Monroe, Michigan 48161-3390 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (313) 241-4414 None Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each issuer's classes of common stock, as of the last practicable date: Class Outstanding at January 28, 1995 Common Shares, $1.00 par value 17,968,660 Part I, Part II item 1 and Part II item 6 are amended in their entirety as set forth below. Part I. Financial Information Item 1 Consolidated Financial Statements La-Z-Boy Chair Company CONSOLIDATED SUMMARY OF OPERATIONS (Amounts in thousands, except per share data) THIRD QUARTER ENDED (UNAUDITED) ---------------------------------------------- Amounts ------------------ Percent of Sales Jan. 28, Jan. 22, % Over ---------------- 1995 1994 (Under) 1995 1994 -------- -------- ------- ------- ------- Sales $210,814 $192,648 9% 100.0% 100.0% Cost of sales 157,767 141,771 11% 74.8% 73.6% -------- -------- ------- ------- ------- Gross profit 53,047 50,877 4% 25.2% 26.4% S, G & A 39,616 37,136 7% 18.8% 19.3% -------- -------- ------- ------- ------- Operating profit 13,431 13,741 -2% 6.4% 7.1% Interest expense 1,041 682 53% 0.5% 0.4% Other income 298 412 -28% 0.1% 0.3% -------- -------- ------- ------- ------- Pretax income 12,688 13,471 -6% 6.0% 7.0% Income taxes 5,467 5,483 -0% 43.1%** 40.7%** -------- -------- ------- ------- ------- Net income $7,221 $7,988 -10% 3.4% 4.1% ======== ======== ======= ======= ======= Average shares 17,968 18,302 -2% Earnings per share $0.40 $0.44 -9% Dividends per share $0.17 $0.17 0% ** As a percent of pretax income, not sales. Note: Acquisition amortization of $259 for both periods has been reclassified from other income to S, G & A. La-Z-Boy Chair Company CONSOLIDATED SUMMARY OF OPERATIONS (Amounts in thousands, except per share data) NINE MONTHS ENDED (UNAUDITED) ---------------------------------------------- Amounts ------------------ Percent of Sales Jan. 28, Jan. 22, % Over ---------------- 1995 1994 (Under) 1995 1994 -------- -------- ------- ------- ------- Sales $615,787 $563,788 9% 100.0% 100.0% Cost of sales 458,237 416,978 10% 74.4% 74.0% -------- -------- ------- ------- ------- Gross profit 157,550 146,810 7% 25.6% 26.0% S,G & A 116,187 109,109 6% 18.9% 19.3% -------- -------- ------- ------- ------- Operating profit 41,363 37,701 10% 6.7% 6.7% Interest expense 2,455 2,178 13% 0.4% 0.4% Other income 1,705 1,800 -5% 0.3% 0.3% -------- -------- ------- ------- ------- Pretax income 40,613 37,323 9% 6.6% 6.6% Income taxes 17,044 14,946 14% 42.0%** 40.0%** -------- -------- ------- ------- ------- Income before acctg. change 23,569 22,377 5% 3.8% 4.0% Accounting change - 3,352 N/A - 0.6% -------- -------- ------- ------- ------- Net income $23,569 $25,729 -8% 3.8% 4.6% ======== ======== ======= ======= ======= Average shares 18,083 18,257 -1% Earnings per share: - ------------------- Income before acctg. change $1.30 $1.23 6% Accounting change - 0.18 N/A -------- -------- ------- Net income $1.30 $1.41 -8% ======== ======== ======= Dividends per share $0.51 $0.47 9% ** As a percent of pretax income, not sales. Note: Acquisition amortization of $779 for both periods has been reclassified from other income to S, G & A. La-Z-Boy Chair Company CONSOLIDATED BALANCE SHEET (Dollars in thousands) Unaudited Increase ------------------ (Decrease) Audited Jan. 28, Jan. 22, ---------------- April 30, 1995 1994 Dollars Percent 1994 -------- -------- ------- ------- --------- Current Assets Cash & equivalents $41,552 $32,402 $9,150 28% $25,926 Receivables 166,506 153,003 13,503 9% 183,115 Inventories Raw materials 36,362 33,259 3,103 9% 31,867 Work-in-process 33,574 32,063 1,511 5% 29,325 Finished goods 26,732 29,698 (2,966) -10% 26,676 -------- -------- ------- ------- -------- FIFO inventories 96,668 95,020 1,648 2% 87,868 Excess of FIFO over LIFO (21,034) (18,170) (2,864) -16% (20,632) -------- -------- ------- ------- --------- Total inventories 75,634 76,850 (1,216) -2% 67,236 Deferred income taxes 17,820 13,720 4,100 30% 15,160 Other current assets 5,084 5,614 (530) -9% 4,148 -------- -------- ------- ------- --------- Total Current Assets 306,596 281,589 25,007 9% 295,585 Property, plant & equipment 97,552 93,889 3,663 4% 94,277 Goodwill 20,085 20,991 (906) -4% 20,752 Other long-term assets 17,191 18,541 (1,350) -7% 19,639 -------- -------- ------- ------- --------- Total Assets $441,424 $415,010 $26,414 6% $430,253 ======== ======== ======= ======= ========= Certain prior year balance sheet items have been reclassed for comparability to the current year. La-Z-Boy Chair Company CONSOLIDATED BALANCE SHEET (Dollars in thousands) Unaudited Increase ------------------ (Decrease) Audited Jan. 28, Jan. 22, ---------------- April 30, 1995 1994 Dollars Percent 1994 -------- -------- ------- ------- --------- Current Liabilities Current portion of L/T debt $1,875 $2,875 ($1,000) -35% 2,875 Accounts payable 29,761 22,740 7,021 31% 21,552 Payroll/benefits 26,750 23,283 3,467 15% 29,453 Estimated income taxes 803 3,148 (2,345) -74% 3,882 Other current liabilities 16,975 16,511 464 3% 13,701 -------- -------- ------- ------- --------- Total Current Liabilities 76,164 68,557 7,607 11% 71,463 Long-term debt 56,245 52,495 3,750 7% 52,495 Deferred income taxes 6,424 6,455 (31) -0% 6,949 Other long-term liabilities 8,170 7,579 591 8% 8,435 Shareholders' Equity 17,968,660 shares, $1.00 par 17,969 18,320 (351) -2% 18,287 Capital in excess of par 10,464 9,596 868 9% 10,147 Retained earnings 267,014 252,550 14,464 6% 263,348 Currency translation (1,026) (542) (484) -89% (871) -------- -------- ------- ------- --------- Total Shareholders' Equity 294,421 279,924 14,497 5% 290,911 -------- -------- ------- ------- --------- Total Liabilities and Shareholders' Equity $441,424 $415,010 $26,414 6% $430,253 ======== ======== ======= ======= ========= Certain prior year balance sheet items have been reclassed for comparability to the current year. LA-Z-BOY CHAIR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Unaudited, dollar amounts in thousands) Three Months Ended Nine Months Ended ------------------- ------------------- Jan. 28, Jan. 22, Jan. 28, Jan. 22, 1995 1994 1995 1994 --------- --------- --------- --------- Cash Flows from Operating Activities Net income $7,221 $7,988 $23,569 $25,729 Adjustments to reconcile net income to net cash provided by operating activities Accounting change 0 0 0 (3,352) Depreciation and amortization 3,829 3,580 11,151 10,254 Change in receivables 26,498 28,387 16,609 16,947 Change in inventories 173 (1,460) (8,398) (16,364) Change in other assets and liab. (183) (7,523) 2,858 (7,122) Change in deferred taxes (2,310) 3 (3,185) 382 --------- --------- --------- --------- Total adjustments 28,007 22,987 19,035 745 --------- --------- --------- --------- Cash Provided by Operating Activities 35,228 30,975 42,604 26,474 Cash Flows from Investing Activities Proceeds from disposals of assets 104 79 1,338 146 Capital expenditures (4,691) (4,069) (15,179) (13,283) Change in other investments 1,607 (234) 1,073 (3,311) --------- --------- --------- --------- Cash Used for Investing Activities (2,980) (4,224) (12,768) (16,448) Cash Flows from Financing Activities Short-term debt 0 0 261 441 Long-term debt 0 0 7,500 0 Change in unexpended IRB funds 680 0 (59) 0 Retirements of debt 0 (530) (5,011) (983) Sale of stock under stock option plans 194 456 1,551 1,683 Stock for 401(k) employee plans 349 707 1,179 2,073 Purchase of La-Z-Boy stock (994) (261) (10,345) (857) Payment of cash dividends (3,056) (3,109) (9,232) (8,576) --------- --------- --------- --------- Cash Used for Financing Activities (2,827) (2,737) (14,156) (6,219) Effect of exch. rate changes on cash (168) 23 (54) (213) --------- --------- --------- --------- Net change in cash and equivalents 29,253 24,037 15,626 3,594 Cash and equiv. at beginning of period 12,299 8,365 25,926 28,808 --------- --------- --------- --------- Cash and equiv. at end of period $41,552 $32,402 $41,552 $32,402 ========= ========= ========= ========= Cash paid during period - Income taxes $10,923 $6,542 $22,776 $20,269 - Interest $944 $522 $2,362 $1,945 For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements. Certain prior year balance sheet items have been reclassed for comparability to the current year. LA-Z-BOY CHAIR COMPANY AND OPERATING DIVISIONS NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation --------------------- The financial information is prepared in conformity with generally accepted accounting principles and such principles are applied on a basis consistent with those reflected in the 1994 Annual Report filed with the Securities and Exchange Commission. The financial information included herein, other than the consolidated condensed balance sheet as of April 30, 1994, has been prepared by management without audit by independent certified public accountants who do not express an opinion thereon. The consolidated condensed balance sheet as of January 28, 1995 has been derived from, but does not include all the disclosures contained in, the audited consolidated financial statements for the year ended April 30, 1994. The information furnished includes all adjustments and accruals consisting only of normal recurring accrual adjustments which are, in the opinion of management, necessary for a fair presentation of results for the interim period. 2. Interim Results --------------- The foregoing interim results are not necessarily indicative of the results of operations for the full fiscal year ending April 29, 1995. 3. Commitments and Contingencies ----------------------------- There has been no significant change from the prior fiscal year end audited financial statements. Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Due to the cyclical nature of the Company's business, comparison of operations between the most recently completed quarter and the immediate preceding quarter would not be meaningful and could be misleading to the reader of these financial statements. La-Z-Boy Chair Company's 1995 fiscal third quarter that ended January 28, 1995 set a third quarter record with sales up 9%. Net income per share was 9% lower than last year's third quarter. The third quarter and nine months ended sales both increased 9%. Management believes the increases were primarily the result of the general economic recovery and were roughly equal to growth in the U.S. Furniture industry. Price increases were generally in the 1-3% range and the remainder of the increases were primarily due to volume increases. The decline in the Canadian exchange rate from last year in the third quarter and nine months ended reduced the sales increase by .3 points. Sales do not include any acquired companies, so the third quarter and nine months improvements of 9% were all internally generated. Excluding exchange rate fluctuations sales increased in each period at all five operating divisions with particular strength at Hammary. In general, incoming sales orders and backlogs as of February 15, 1995 continue to be good. For the nine month period ended gross profit as a percent of sales (margins) dropped from 26.0% last year to 25.6%. The majority of the decrease in nine month margins occurred in the third quarter. Gross profit as a percent of sales (margins) dropped from 26.4% in last year's third quarter to 25.2% primarily due to cost increases. The third quarter's health-care costs were about 25% higher that last year. Adverse selection and provider cost shifting are thought to have caused the 25% jump. Fourth quarter health-care costs are expected to be roughly equal to last year's quarter on a per week basis. (Last year's fourth quarter had high health-care costs). Costs of leather, fabric, cartoning and premium (not frame stock) woods were measurably up and are not expected to decline. Cartoning is expected to further increase in cost in the fourth quarter of fiscal 1995. Factory wage costs were up but were within expectations. The next wage increase is scheduled to occur in the residential division at 3/1/95 and is expected to be moderate. To a lesser extent, 1995's third quarter margins were unfavorably impacted approximately .1 points by incentives and costs associated with the introduction of new contract products as well as an unfavorable Canadian/U.S. dollar exchange rate. The contract items are not expected to impact the upcoming fourth quarter as much as the third quarter. Canadian exchange rate gross margin impacts are expected to continue unless the Canadian dollar strengthens. The costs and anticipated higher sales associated with La-Z-Boy's new TV advertising campaign will affect the company's financial results in the fourth quarter and beyond. The national campaign is part of a long-term effort believed to be necessary to further expand the company's marketshare by repositioning La-Z-Boy as a complete furniture resource. The third quarter and nine months ended S, G & A expenses increased 7% and 6% respectively from the prior year largely due to the increase in sales. S, G & A expenses have been slightly less than what was expected before the year started. This was primarily in the selling expenses area. With the new TV advertising program, fourth quarter S, G & A expenses are expected to exceed both last year and expectation before the year started. The increase in interest expense for the quarter and nine months ended was primarily due to higher interest rates. Other income for the third quarter was down from the prior year primarily due to Canadian exchange impacts. This was partially offset by increased interest income due to increased investments and higher interest rates. The Canadian dollar impacts are due to revaluations of trade and other cash-type intercompany balances at the end of each quarter and only change or cause P&L impacts if the Canadian/U.S. dollar exchange rate changes from the end of one quarter to the end of the next consecutive quarter. That is, unfavorable P&L impacts will not occur in the fourth quarter if the rate stays the same or strengthens (from Canada's perspective). Income taxes as a percent of pretax profit was higher than last year for both the quarter and nine months ended primarily due to unfavorable tax situations at La-Z-Boy's Canadian operating division. The higher tax rates may continue in the fourth quarter. The estimated income taxes liability was $2.3 million less at the end of January, 1995 compared to January, 1994. The January, 1994 balance was overstated and corrected in the fourth quarter last year with the offsetting adjustment to deferred taxes. Since last year, the company has also settled several audits and tax disputes which resulted in a significant reduction in the estimated income taxes liability. The deferred income taxes asset was higher at the end of January, 1995 compared to January, 1994 due to the increase in expenses which were deducted for book purposes but cannot currently be deducted for tax purposes like accrued bad debts expenses. As mentioned above, a major new TV advertising program began in February. This program is intended to increase sales over the longer term. Effects on sales in the shorter term (the next few quarters) are difficult to predict but sales increases and other related favorable management actions may not be enough to cover the net additional costs of the TV program. Raw materials were up 9% vs. last year. About half of the increase was in fabric and leather; and although it was higher than desired, plans are in place for a reduction by April, 1995. Lumber was planned to increase as part of seasonal purchasing and should be declining soon. Finished goods declined 10%, roughly as planned. On hand balances should be leveling off although efforts are still underway to reduce balances longer term. The 89% decrease in the balance sheet currency translation adjustment from 1/22/94 to 1/28/95 was due to the decline in the Canadian exchange rate from .7627 to .7069 (Canadian dollar to U.S. dollar ratio). This reduced the present valuation of investments in the Canadian division. The Company's strong financial position is reflected in the debt to capital percentage of 16% and a current ratio of 4.0 to 1 at the end of the third quarter. At April 30, 1994, the debt to capital percentage was 17% and the current ratio was 4.1 to 1. At the end of the preceding year's third quarter, the debt to capital percentage was 17% and the current ratio was 3.8 to 1. As of January 28, 1995, there was $62 million of unused lines of credit available under several credit arrangements. Approximately 28% of the 2 million shares of Company stock authorized for purchase on the open market are still available for purchase by the Company. The Company plans to be in the market for its shares as changes in its stock price and other factors present appropriate opportunities. PART II. OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- Not applicable. Item 6. Exhibits and Reports on Form 8-K. - ------------------------------------------ (a)(1)(2) Amended and Restated Reorganization Agreement and the Amended and Restated Plan of Merger among La-Z-Boy Chair Company, LZB Acquisition, Inc. and England/Corsair, Inc. (Filed as annexes A and B to Form S-4 (Commission File 33-57623) and incorporated herein by reference). (27) Financial Data Schedule (EDGAR only) (b) An 8-K was filed on January 13, 1995 discussing the agreement to acquire England/Corsair, Inc. An 8-K was filed on January 27, 1995 discussing third quarter sales and profits. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY CHAIR COMPANY (Registrant) Date: March 20, 1995 James J. Korsnack Corporate Controller EX-27 2
5 1,000 Apr-29-1995 Jan-28-1995 9-MOS 41,552 0 184,486 17,980 75,634 306,596 215,850 118,298 441,424 76,164 0 17,969 0 0 276,452 441,424 615,787 615,787 458,237 458,237 116,187 0 2,455 40,613 17,044 23,569 0 0 0 23,569 1.30 1.30
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