-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cns7GtO+ZssQ1zeIWVDQUEOyM3rFnhQmykAM3YcrZb2nZ9Zkjrttq4jKipPYvBSj Rv0yiTrU5Ld8U2fmG26JmA== 0000057131-95-000054.txt : 19951119 0000057131-95-000054.hdr.sgml : 19951119 ACCESSION NUMBER: 0000057131-95-000054 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951028 FILED AS OF DATE: 19951114 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 SEC ACT: 1934 Act SEC FILE NUMBER: 001-09656 FILM NUMBER: 95592989 BUSINESS ADDRESS: STREET 1: 1284 N TELEGRAPH RD CITY: MONROE STATE: MI ZIP: 48161-3390 BUSINESS PHONE: 3132414414 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-1004 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 FOR QUARTER ENDED October 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 48162-3390 (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 Oct. 28, 1995 Common Shares, $1.00 par value 18,525,490 Part I. Financial Information The Consolidated Balance Sheet and Consolidated Statement of Income required for Part I are contained in the Registrant's Financial Information Release dated November 14, 1995 and are incorporated herein by reference. 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 Six Months Ended ------------------ ----------------- Oct. 28, Oct. 29, Oct. 28, Oct. 29, 1995 1994 1995 1994 ------- -------- ------- -------- Cash Flows from Operating Activities Net income $14,256 $12,078 $17,431 $16,348 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 4,735 3,590 9,419 7,322 Change in receivables (51,526) (43,798) (13,677) (9,889) Change in inventories 1,163 621 (3,230) (8,571) Change in other assets and liab. 21,921 15,134 6,075 3,041 Change in deferred taxes (889) (875) (889) (875) -------- -------- -------- -------- Total adjustments (24,596) (25,328) (2,302) (8,972) -------- -------- -------- -------- Cash Provided by Operating Activities (10,340) (13,250) 15,129 7,376 Cash Flows from Investing Activities Proceeds from disposals of assets 645 1,210 778 1,234 Capital expenditures (6,079) (4,498) (9,239) (10,488) Change in other investments 129 (75) 1,088 (534) --------- -------- -------- -------- Cash Used for Investing Activities (5,305) (3,363) (7,373) (9,788) Cash Flows from Financing Activities Short-term debt - 261 - 261 Long-term debt - - - 7,500 Capital lease obligations 1,161 - 1,161 - Change in unexpended IRB funds - 1,827 - (739) Retirements of debt (6,479) (261) (10,551) (5,011) Capital lease principal payments (560) - (1,077) - Sale of stock under stock option plans 807 1,154 2,075 1,357 Stock for 401(k) employee plans 338 429 643 830 Purchase of La-Z-Boy stock (41) (2,742) (4,433) (9,351) Payment of cash dividends (3,505) (3,067) (6,660) (6,176) --------- -------- -------- -------- Cash Used for Financing Activities (8,279) (2,399) (18,842) (11,329) Effect of exch. rate changes on cash 60 131 (18) 114 --------- -------- -------- -------- Net change in cash and equivalents (23,864) (18,881) (11,104) (13,627) Cash and equiv. at beginning of period 39,808 31,180 27,048 25,926 --------- -------- -------- -------- Cash and equiv. at end of period $15,944 $12,299 $15,944 $12,299 ========= ======== ======== ======== Cash paid during period - Income taxes $7,154 $8,980 $8,811 $11,853 - Interest $1,401 $816 $2,511 $1,418 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. 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 1995 Annual Report filed with the Securities and Exchange Commission. The financial information included herein, other than the consolidated condensed balance sheet as of April 29, 1995, 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 October 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 29, 1995. 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 27, 1996. 3. Commitments and Contingencies ----------------------------- There has been no significant change from the prior fiscal year end audited financial statements. LA-Z-BOY CHAIR COMPANY AND OPERATING DIVISIONS MANAGEMENT DISCUSSION 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. For further Management Discussion, see attached Exhibit 99. The Company's strong financial position is reflected in the debt to capital percentage of 18% and a current ratio of 3.3 to 1 at the end of the second quarter. At April 29, 1995, the debt to capital percentage was 20% and the current ratio was 3.7 to 1. At the end of the preceding year's second quarter, the debt to capital percentage was 17% and the current ratio was 3.8 to 1. As of October 28, 1995, there was $62 million of unused lines of credit available under several credit arrangements. Approximately 44% of the 3 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 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ The Annual Meeting of Stockholders of La-Z-Boy Chair Company was held on July 31, 1995, for the purposes of electing four members to the board of directors. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities and Exchange Act of 1934 and there was no solicitation in opposition of Management's solicitations. All of Management's nominees for directors as listed in the proxy statement were elected. Item 6. Exhibits and Reports on Form 8-K. - ------------------------------------------ (a)(27) Financial Data Schedule (EDGAR only) (99) News Release and Financial Information Release: re Actual second quarter results and Management Discussion dated November 14, 1995. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the Quarterly Report on Form 10-Q for the quarter ended October 28, 1995 to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY CHAIR COMPANY (Registrant) Date: November 14, 1995 James J. Korsnack Corporate Controller EX-27 2
5 1,000 APR-27-1996 OCT-28-1995 6-MOS 15,944 0 225,290 18,675 84,321 333,623 117,790 141,169 511,530 102,154 0 18,525 0 0 310,597 511,530 454,077 454,077 340,022 340,022 83,842 0 2,901 29,103 11,672 17,431 0 0 0 17,431 .94 .94
EX-99 3 News Release LA-Z-BOY'S SECOND QUARTER SALES AND EARNINGS STRENGTHENED; REACHED RECORD LEVELS MONROE, MI., November 14, 1995: For its 1996 fiscal second quarter and half year ended October 28, 1995, La-Z-Boy Chair Company set records for sales and profits (excluding changes in accounting). Second quarter sales rose 12% as reported or 1% on a comparable basis (which includes a recently acquired company's sales as if they were in last year's results). Second quarter earnings per share were 15% more than last year's record second quarter. Financial Details 1996 SECOND QUARTER sales were $258 million vs. $231 million, an increase of 12%. Comparable sales--that is, including England/Corsair's sales on a pro forma basis in last year's sales, rose 1%. England/Corsair was acquired at the beginning of fiscal 1996 and is a separate operating division. Second quarter net income rose 18% to $14.3 million vs. $12.1 million last year. Net income per share increased 15% to $0.77 vs. $0.67 last year. 1996 FIRST HALF reported sales were $454 million vs. $405 million, an increase of 12%. Comparable sales were similar to last year's first half sales. Net income was up 7% to $17.4 million vs. $16.3 million. Net income per share increased 4% to $0.94 from $0.90 in last year's first half. Chairman Comments La-Z-Boy Chairman and President Charles T. Knabusch said, "Second quarter profit strengthened significantly on a relatively minor increase in comparable sales. The retail environment will continue to be challenging for us looking through at least the end of our third quarter but we are seeing some good things affecting profit margins as a result of our employees cost control efforts, merchandising, and marketing." With respect to marketing and other non-financial items, Mr. Knabusch said, "The third flight of national advertising for La-Z-Boy ran in connection with the kickoff of the new television season in September and October. Response to the commercials continues to be strong with well over 270,000 consumer phone calls being generated during calendar year 1995. Those 270,000 consumers not only received a La-Z-Boy decorating guide, but also received the name of our nearest authorized La-Z-Boy dealer. "At this October's High Point, N.C. furniture market, La-Z-Boy received the ARROS award from Home Furnishings Executive magazine for the third consecutive year. This award is voted upon by home furnishings retailers across the country and La-Z-Boy swept the upholstery category being named best for overall product, for delivery and for dealer support. "At the High Point market, Patrick H. Norton, senior vice president of sales and marketing, was inducted into the American Furniture Hall of Fame. Mr. Norton was the third La-Z-Boy executive to be so honored, following company founders Edward Knabusch and Edwin Shoemaker." More In general, sales backlogs, as of this press release date, were at a lower level than at a similar time a year ago. However, the rate of incoming sales orders in recent weeks has been about the same as the similar period of last year. For more details please see La-Z-Boy's Form 10-Q filed with the SEC (available on EDGAR) which includes, among other things, a full income statement, balance sheet, cash flow statement and more management discussion. NYSE & PSE: LZB Contact: Jim Korsnack (313) 241-4208 11/14/95 La-Z-Boy Chair Company Financial Information Release 1 of 3 CONSOLIDATED STATEMENT OF INCOME (Amounts in thousands, except per share data) SECOND QUARTER ENDED (UNAUDITED) ---------------------------------------------- Percent of Sales Oct. 28, Oct. 29, % Over ---------------- 1995 1994 (Under) 1995 1994 -------- -------- ------- ------- ------- Sales $258,320 $230,586 12% 100.0% 100.0% Cost of sales 188,644 166,816 13% 73.0% 72.3% -------- -------- ------- ------- ------- Gross profit 69,676 63,770 9% 27.0% 27.7% S, G & A 45,905 43,539 5% 17.8% 18.9% -------- -------- ------- ------- ------- Operating profit 23,771 20,231 17% 9.2% 8.8% Interest expense 1,437 752 91% 0.6% 0.3% Interest income 484 355 36% 0.2% 0.2% Other income 476 506 -6% 0.2% 0.1% -------- -------- ------- ------- ------- Pretax income 23,294 20,340 15% 9.0% 8.8% Income taxes 9,038 8,262 9% 38.8%* 40.6%* -------- -------- ------- ------- ------- Net income $14,256 $12,078 18% 5.5% 5.2% ======== ======== ======= ======= ======= Average shares 18,497 18,028 3% Earnings per share $0.77 $0.67 15% Dividends per share $0.19 $0.17 12% SIX MONTHS ENDED (UNAUDITED) ---------------------------------------------- Percent of Sales Oct. 28, Oct. 29, % Over ---------------- 1995 1994 (Under) 1995 1994 -------- -------- ------- ------- ------- Sales $454,077 $404,973 12% 100.0% 100.0% Cost of sales 340,022 300,470 13% 74.9% 74.2% -------- -------- ------- ------- ------- Gross profit 114,055 104,503 9% 25.1% 25.8% S, G & A 83,842 76,571 9% 18.4% 18.9% -------- -------- ------- ------- ------- Operating profit 30,213 27,932 8% 6.7% 6.9% Interest expense 2,901 1,414 105% 0.6% 0.3% Interest income 940 628 50% 0.2% 0.2% Other income 851 779 9% 0.1% 0.1% -------- -------- ------- ------- ------- Pretax income 29,103 27,925 4% 6.4% 6.9% Income taxes 11,672 11,577 1% 40.1%* 41.5%* -------- -------- ------- ------- ------- Net income $17,431 $16,348 7% 3.8% 4.0% ======== ======== ======= ======= ======= Average shares 18,496 18,140 2% Earnings per share $0.94 $0.90 4% Dividends per share $0.36 $0.34 6% * As a percent of pretax income, not sales. Acquisition amortization of $260 for the second quarter and $520 for the six months ended October 29, 1994 has been reclassified from other income to selling, general and administrative. England/Corsair was included in the second quarter and six months ended October 28, 1995 results, but not in the second quarter and six months ended October 29, 1994 results. 11/14/95 La-Z-Boy Chair Company Financial Information Release 2 of 3 CONSOLIDATED BALANCE SHEET (Dollars in thousands) Unaudited Increase ------------------ (Decrease) Audited Oct. 28, Oct. 29, ---------------- April 29, 1995 1994 Dollars Percent 1995 -------- -------- ------- ------- --------- Current assets Cash & equivalents $15,944 $12,299 $3,645 30% $27,048 Receivables 206,615 193,004 13,611 7% 192,938 Inventories Raw materials 37,938 35,561 2,377 7% 39,604 Work-in-process 36,130 33,302 2,828 8% 35,036 Finished goods 33,075 27,885 5,190 19% 29,051 -------- -------- ------- ------- -------- FIFO inventories 107,143 96,748 10,395 11% 103,691 Excess of FIFO over LIFO (22,822) (20,941) (1,881) -9% (22,600) -------- -------- ------- ------- -------- Total inventories 84,321 75,807 8,514 11% 81,091 Deferred income taxes 19,131 15,849 3,282 21% 18,242 Other current assets 7,612 8,735 (1,123) -13% 6,081 -------- -------- ------- ------- -------- Total current assets 333,623 305,694 27,929 9% 325,400 Property, plant & equipment 117,790 96,663 21,127 22% 117,175 Goodwill 41,094 20,307 20,787 102% 41,701 Other long-term assets 19,023 19,850 (827) -4% 19,542 -------- -------- ------- ------- -------- Total assets $511,530 $442,514 $69,016 16% $503,818 ======== ======== ======= ======= ======== Unaudited Increase ----------------- (Decrease) Audited Oct. 28, Oct. 29, ----------------- April 29, 1995 1994 Dollars Percent 1995 ------- ------- ------- ------- -------- Current liabilities Current portion of l/t debt $5,658 $1,875 $3,783 202% $4,676 Current portion - captl leases 2,198 - 2,198 N/M 2,078 Accounts payable 34,774 27,170 7,604 28% 29,323 Payroll/benefits 29,968 28,561 1,407 5% 31,845 Estimated income taxes 8,524 3,940 4,584 116% 4,855 Other current liabilities 21,032 18,605 2,427 13% 15,343 -------- -------- ------- ------- --------- Total current liabilities 102,154 80,151 22,003 27% 88,120 Long-term debt 59,616 56,245 3,371 6% 71,149 Capital leases 5,261 - 5,261 N/M 5,298 Deferred income taxes 6,610 6,763 (153) -2% 6,610 Other long-term liabilities 8,767 8,286 481 6% 9,001 Shareholders' equity 18,525,490 shares, $1.00 par 18,525 17,975 550 3% 18,562 Capital in excess of par 27,705 10,412 17,293 166% 28,085 Retained earnings 283,686 263,342 20,344 8% 277,738 Currency translation (794) (660) (134) -20% (745) -------- -------- ------- ------- --------- Total shareholders' equity 329,122 291,069 38,053 13% 323,640 -------- -------- ------- ------- --------- Total liabilities and shareholders' equity $511,530 $442,514 $69,016 16% $503,818 ======== ======== ======= ======= ========= The Oct. 28, 1995 and the April 29, 1995 balance sheets include E/C's assets and liabilities. The Oct. 29, 1994 balance sheet does not include E/C and is not comparable to the other periods. 11/14/95 La-Z-Boy Chair Company Financial Information Release Page 3 of 3 Overall: Refer to today's press release for additional information. Gross profit: Second quarter gross profit was 27.0% of sales vs. 27.7% of sales last year. The decline of 0.7 points was primarily due to the inclusion of the historically lower than average gross profit of England/Corsair (E/C). This impact is expected to continue throughout the fiscal year. S, G & A: Second quarter S, G & A was 17.8% of sales vs. 18.9% of sales last year. The decline of 1.1 points was primarily due to the inclusion of the historically lower than average S, G & A of E/C. This impact is expected to continue throughout the fiscal year. In addition, bonus and incentive expenses were lower. Operating profit margin: Second quarter operating profit was 9.2% of sales vs. 8.8% of sales last year. The 0.4 point increase was primarily due to profitability improvements in upholstery operating divisions. The largest division, U.S. Residential, improved primarily due to productivity improvements, selling price increases and reduced health-care expenses. This improvement is expected to continue but is sensitive to changes in sales volume and other factors. The Contract Division also improved and is expected to continue improving into the third quarter. In addition, the Canadian Division improved in the second quarter vs. last year but third quarter results are expected to be below prior year's level. Income taxes: Second quarter income tax expense as a percent of pretax income was 38.8% vs. 40.6%. The 1.8 point decline was primarily due to the favorable results of the Canadian Division reversing some of the unfavorable tax impacts recorded in prior quarters. The third quarter is not expected to be favorably affected to this degree. In addition, the overall tax rate of the other divisions is lower than the prior year's rate. Inventories: At the end of the second quarter, total FIFO inventories were 11% higher than at the same time last year almost entirely due to recently acquired E/C whose inventories were not included in last year's figures. Overall, finished goods inventories increased 19% largely due to the inclusion of E/C. Debt: Long-term debt declined $6 million in the second quarter. This was debt of E/C and was retired early to reduce interest expense. Share repurchase: During the second quarter, the Board of Directors authorized the repurchase of an additional 1 million shares of company stock, bringing the total authorized but not yet repurchased level to 1.3 million shares. -----END PRIVACY-ENHANCED MESSAGE-----