-----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, LebSeKS/oZ7QER3Es3/yKTiT4p5Cxppga6kmHlnt1P0wrZlihIf0XxW/rAYyhIsM H7yjPYh13Sjd/ZMvKu7a8Q== 0000057131-97-000002.txt : 19970225 0000057131-97-000002.hdr.sgml : 19970225 ACCESSION NUMBER: 0000057131-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970125 FILED AS OF DATE: 19970205 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LA-Z-BOY INCORP 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: 97518690 BUSINESS ADDRESS: STREET 1: 1284 N TELEGRAPH RD CITY: MONROE STATE: MI ZIP: 48162 BUSINESS PHONE: 3132414414 FORMER COMPANY: FORMER CONFORMED NAME: LA Z BOY CHAIR CO DATE OF NAME CHANGE: 19920703 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 January 25, 1997 COMMISSION FILE NUMBER 1-9656 LA-Z-BOY INCORPORATED (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 LA-Z-BOY CHAIR COMPANY 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 25, 1997 Common Shares, $1.00 par value 17,960,888 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 February 5, 1997 and are incorporated herein by reference. LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Unaudited, dollar amounts in thousands) Three Months Ended Nine Months Ended ------------------- ------------------ Jan. 25, Jan. 27 Jan. 25, Jan. 27, 1997 1996 1997 1996 -------- -------- ------- -------- Cash Flows from Operating Activities Net income $9,801 $7,784 $29,651 $25,215 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 5,189 4,886 15,215 14,305 Change in receivables 37,106 36,039 27,312 22,362 Change in inventories (1,978) (4,871) (12,994) (8,101) Change in other assets and liab. (11,979) (6,871) (1,035) (796) Change in deferred taxes (439) (770) 1,317 (1,659) --------- -------- -------- -------- Total adjustments 27,899 28,413 27,181 26,111 --------- -------- -------- -------- Cash Provided by Operating Activities 37,700 36,197 56,832 51,326 Cash Flows from Investing Activities Proceeds from disposals of assets (167) 193 554 971 Capital expenditures (4,580) (3,351) (12,803) (12,590) Change in other investments (571) (2,918) (6,013) (1,830) ---------- -------- ------- ------- Cash Used for Investing Activities (5,318) (6,076) (18,262) (13,449) Cash Flows from Financing Activities Short-term debt - 280 - 280 Long-term debt - - - - Retirements of debt (64) (65) (3,068) (10,616) Capital leases - - - 1,161 Capital lease principal payments (509) (578) (1,587) (1,655) Stock for stock option plans 1,005 428 2,851 2,503 Stock for 401(k) employee plans 276 344 944 987 Purchase of La-Z-Boy stock (6,993) (52) (17,361) (4,485) Payment of cash dividends (3,446) (3,523) (9,909) (10,183) ---------- -------- -------- -------- Cash Used for Financing Activities (9,731) (3,166) (28,130) (22,008) Effect of exch. rate changes on cash (53) (69) 54 (87) ---------- -------- -------- -------- Net change in cash and equivalents 22,598 26,886 10,494 15,782 Cash and equiv. at beginning of period 14,956 15,944 27,060 27,048 ---------- -------- -------- -------- Cash and equiv. at end of period $37,554 $42,830 $37,554 $42,830 ========== ======== ======== ======== Cash paid during period - Income taxes $12,461 $11,668 $23,231 $20,479 - Interest $948 $923 $2,918 $3,434 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 INCORPORATED 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 1996 Annual Report filed with the Securities and Exchange Commission. The financial information included herein, other than the consolidated condensed balance sheet as of April 27, 1996, 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 25, 1997 has been derived from, but does not include all the disclosures contained in, the audited consolidated financial statements for the year ended April 27, 1996. 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 26, 1997. 3. Commitments and Contingencies There has been no significant change from the prior fiscal year end audited financial statements. LA-Z-BOY INCORPORATED 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 16% and a current ratio of 3.4 to 1 at the end of the third quarter. At April 27, 1996, the debt to capital percentage was 17% and the current ratio was 3.5 to 1. At the end of the preceding year's third quarter, the debt to capital percentage was 18% and the current ratio was 3.6 to 1. As of January 25, 1997, there was $87 million of unused lines of credit available under several credit arrangements. Approximately 19% 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 6. Exhibits and Reports on Form 8-K (a) (27) Financial Data Schedule (EDGAR only) (99) News Release and Financial Information Release: re Actual third quarter results and Management Discussion dated February 5, 1997. 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 January 25, 1997 to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY INCORPORATED (Registrant) /s/ James J. Korsnack Date February 5, 1997 James J. Korsnack Corporate Controller EX-27 2
5 1,000 9-MOS APR-26-1997 JAN-25-1997 37,554 0 177,933 0 92,185 331,496 115,167 159,852 517,244 96,960 0 17,961 0 0 327,953 517,244 718,362 718,362 532,913 532,913 136,125 0 3,300 49,229 19,578 29,651 0 0 0 29,651 1.63 1.63 Receivables are reported net of allowances for doubtful accounts on the Statement of Financial Position.
EX-99 3 NEWS RELEASE ------------ HIGHER SALES AND EARNINGS FOR LA-Z-BOY MONROE, MI., February 5, 1997: For its 1997 fiscal third quarter ended January 25, 1997, La-Z-Boy Incorporated continued to improve its sales and profits compared to last year. This was the sixth consecutive quarterly im- provement. Third quarter sales rose 8% and net income per share increased $0.12 to $0.54. FINANCIAL DETAILS THIRD QUARTER sales were $245 million vs. last year's $226 million, an increase of 8%. Third quarter operating profit rose 13% to $15.8 million vs. last year's $14.0 million. Net income rose 26% to $9.8 million vs. last year's $7.8 million. Net income per share increased 29% to $0.54 vs. $0.42 last year. For the NINE MONTHS ended 1/25/97 sales were up 6% to $718 million vs. $680 million. Operating profit rose 12% to $49.3 million vs. $44.2 million in last year's first nine months. Net income rose 18% to $29.7 million vs. $25.2 million. Net income per share was up 20% to $1.63 vs. $1.36. CHAIRMAN COMMENTS La-Z-Boy Chairman and President Charles T. Knabusch said, "Third quarter sales were higher than our earlier expectations and are giving us more encouragement that fourth quarter sales could match the year to date increase." COMMUNICATIONS AND MARKETING La-Z-Boy Incorporated recently launched its own website on the ever ex- panding World Wide Web. The site address is www.lazboy.com and is designed to provide product, decorating, company dealer locations and financial in- formation to consumers, shareholders and the investment community. The La-Z-Boy/Plymouth Road Home Sweepstakes is underway at all partici- pating La-Z-Boy residential dealers. Consumers can enter to win one of two 1997 Plymouth and Grand Voyager minivans along with other great La-Z-Boy product prize packages. Supported by print advertising in both Parade and Better Homes and Gardens magazines, the sweepstakes has been designed to generate retail traffic into participating La-Z-Boy retailers during January and February. DIVIDENDS As announced earlier, La-Z-Boy's quarterly dividends were increased to $0.21 from $0.19 per share for shareholders of record 2/20/97 for payment 3/10/97. REDUCTIONS TO SHARES OUTSTANDING Due to stock buybacks exceeding issuances of stock, the number of shares outstanding continued to decline at the end of the third quarter. Outstanding shares were 18.562 million at 4/95, 18.385 at 4/96, 18.207 at 7/96, 18.135 at 10/96 and 17.961 at 1/97. MORE INFORMATION La-Z-Boy's 10-Q filing includes a full income statement, balance sheet, cash flow statement and additional management discussion. This information can be found in the SEC's EDGAR databases or at www.lazboy.com. See www.lzbcontract.com and www.hammary.com. for more information on these two of La-Z-Boy's six operating divisions. NYSE & PSE: LZB Contact: Gene Hardy (313) 241-4306 02/05/97 La-Z-Boy Incorporated Financial Information Release 1 of 3 CONSOLIDATED STATEMENT OF INCOME (Amounts in thousands, except per share data) THIRD QUARTER ENDED (UNAUDITED) --------------------------------------------- Percent of Sales Jan. 25, Jan. 27, % Over ---------------- 1997 1996 (Under) 1997 1996 -------- -------- ------- ------ ------ Sales $244,581 $226,354 8% 100.0% 100.0% Cost of sales 180,979 170,602 6% 74.0% 75.4% -------- -------- ------- ------ ------ Gross profit 63,602 55,752 14% 26.0% 24.6% S, G & A 47,765 41,783 14% 19.5% 18.4% -------- -------- ------- ------ ------ Operating profit 15,837 13,969 13% 6.5% 6.2% Interest expense 1,096 1,217 -10% 0.4% 0.5% Interest income 430 390 10% 0.2% 0.2% Other income 639 436 47% 0.2% 0.1% -------- -------- ------- ------ ------ Pretax income 15,810 13,578 16% 6.5% 6.0% Income taxes 6,009 5,794 4% 38.0%* 42.7%* -------- -------- ------- ------ ----- Net income $9,801 $7,784 26% 4.0% 3.4% ======== ======== ======= ====== ====== Average shares 18,086 18,533 -2% Earnings per share $0.54 $0.42 29% Dividends per share $0.19 $0.19 0% NINE MONTHS ENDED (UNAUDITED) --------------------------------------------- Percent of Sales Jan. 25, Jan. 27, % Over ---------------- 1997 1996 (Under) 1997 1996 -------- -------- ------- ------ ------ Sales $718,362 $680,431 6% 100.0% 100.0% Cost of sales 532,913 510,624 4% 74.2% 75.0% -------- -------- ------- ------ ------ Gross profit 185,449 169,807 9% 25.8% 25.0% S, G & A 136,125 125,625 8% 18.9% 18.5% -------- -------- ------- ------ ------ Operating profit 49,324 44,182 12% 6.9% 6.5% Interest expense 3,300 4,118 -20% 0.5% 0.6% Interest income 1,260 1,330 -5% 0.2% 0.2% Other income 1,945 1,287 51% 0.3% 0.2% -------- -------- ------- ------ ------ Pretax income 49,229 42,681 15% 6.9% 6.3% Income taxes 19,578 17,466 12% 39.8%* 40.9%* -------- -------- ------- ------ ----- Net income $29,651 $25,215 18% 4.1% 3.7% ======== ======== ======= ====== ====== Average shares 18,168 18,509 -2% Earnings per share $1.63 $1.36 20% Dividends per share $0.57 $0.55 4% * As a percent of pretax income, not sales. 02/05/97 La-Z-Boy Incorporated Financial Information Release 2 of 3 CONSOLIDATED BALANCE SHEET (Dollars in thousands) Unaudited Increase ------------------ (Decrease) Audited Jan. 25, Jan. 27, --------------- April 27, 1997 1996 Dollars Percent 1996 -------- -------- ------- ------- ------- Current assets Cash & equivalents $37,554 $42,830 ($5,276) -12% $27,060 Receivables 177,933 170,576 7,357 4% 206,430 Inventories Raw materials 41,235 42,623 (1,388) -3% 37,274 Work-in-process 39,868 37,071 2,797 8% 35,241 Finished goods 33,010 32,423 587 2% 28,333 -------- -------- ------- ------- ------- FIFO inventories 114,113 112,117 1,996 2% 100,848 Excess of FIFO over LIFO (21,928) (22,925) 997 4% (21,656) -------- -------- ------- ------- -------- Total inventories 92,185 89,192 2,993 3% 79,192 Deferred income taxes 19,732 19,841 (109) -1% 19,271 Other current assets 4,092 4,160 (68) -2% 5,148 -------- -------- ------- ------- -------- Total current assets 331,496 326,599 4,897 1% 337,101 Property, plant & equipment 115,167 116,098 (931) -1% 116,199 Goodwill 39,117 40,688 (1,571) -4% 40,359 Other long-term assets 31,464 22,584 8,880 39% 23,887 -------- -------- ------- ------- ------ Total assets $517,244 $505,969 $11,275 2% $517,546 ======== ======== ======= ======= ======== Unaudited Increase ----------------- (Decrease) Audited Jan. 25, Jan. 27, --------------- April 27, 1997 1996 Dollars Percent 1996 -------- -------- ------- ------- ------ Current liabilities Credit lines - $280 ($280) N/M - Current portion - l/t debt $4,625 5,658 (1,033) -18% $5,625 Current portion - captl leases 2,067 2,198 (131) -6% 2,114 Accounts payable 33,941 33,187 754 2% 30,997 Payroll/other comp 30,961 26,945 4,016 15% 34,609 Estimated income taxes 2,741 3,361 (620) -18% 5,572 Other current liabilities 22,625 20,276 2,349 12% 17,601 -------- -------- ------- ------- ------ Total current liabilities 96,960 91,905 5,055 6% 96,518 Long-term debt 55,007 59,551 (4,544) -8% 57,075 Capital leases 2,679 4,684 (2,005) -43% 4,219 Deferred income taxes 5,808 6,550 (742) -11% 6,663 Other long-term liabilities 10,876 9,617 1,259 13% 9,695 Commitments & contingencies Shareholders' equity 17,960,888 shares, $1.00 par 17,961 18,538 (577) -3% 18,385 Capital in excess of par 27,733 27,867 (134) 0% 28,016 Retained earnings 300,861 288,136 12,725 4% 297,750 Currency translation (641) (879) 238 27% (775) -------- -------- ------- ------- ------ Total shareholders' equity 345,914 333,662 12,252 4% 343,376 -------- -------- ------- ------- ------- Total liabilities and shareholders' equity $517,244 $505,969 $11,275 2% $517,546 ======== ======== ======= ======= ======== 02/05/97 La-Z-Boy Incorporated Financial Information Release Page 3 of 3 OVERALL: Refer to today's press release for additional information. GROSS PROFIT: Third quarter gross profit improved to 26.0% of sales from 24.6% of sales last year. Most of this increase was due to margin improvements at the England/Corsair, Canadian and La-Z-Boy Business Furniture Group divisions. Increased unit volume coupled with reduced material and overhead costs ac- counted for the majority of this improvement. S, G & A: Third quarter S, G & A increased to 19.5% of sales vs. 18.4% last year primarily due to increased costs for employee bonuses and incentives. In addition, various selling related expenses increased and several one-time items occurred in the quarter including the costs of moving the Kincaid di- vision offices into a new building. S, G & A as a percent of sales is not expected to decline below last year's level in the fourth quarter. INCOME TAXES: Third quarter income tax expense as a percent of pretax income was 38.0% vs. 42.7% last year. The Canadian division results for the quarter were favorable, reversing some of the unfavorable tax impacts recorded in prior quarters. The prior year Canadian division results were unfavorable, generating unfavorable tax impacts. In addition, the benefits of some efforts to reduce tax expense were recorded during the quarter. The Canadian division results are expected to remain favorable compared to last year in the fourth quarter and efforts to reduce tax expense will continue. As a result, the fourth quarter tax rate should be lower than the prior year. OTHER LONG-TERM ASSETS: Other long-term assets increased 39% from last year. A major reason for the increase was an investment in the international area. Most of the remaining increase relates to various proprietary store related financing activities. -----END PRIVACY-ENHANCED MESSAGE-----