NYSE & PSE: LZB News Release Contact: Jim Korsnack
(313) 241-4208
LA-Z-BOY'S SECOND QUARTER SALES AND MARGINS IMPROVE
MONROE, MI., November 15, 1994: La-Z-Boy Chair Company's 1995 fiscal second
quarter that ended October 29, 1994 set a second quarter record with sales up
10%, and net income per share up 18% compared to the prior year's second
quarter.
Financial Details
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1995 SECOND QUARTER sales grew to $231 million vs. $209 million, an increase
of 10%. Last year's second quarter sales were up 19% over the preceding year.
Net income for the quarter rose to $12.1 million from $10.4 million last year
for an overall gain of 16%, and a per share gain of 18% or $.67 per share vs.
$.57.
1995 FIRST HALF sales were $405 million, 9% more than last year's $371
million. Excluding the effect of a year-earlier tax accounting change, net
income was $16.3 million, up 14% from the prior year's $14.4 million, or $.90
per share vs. $.79.
After an accounting change, which was unrelated to operations but which raised
last year's first half net income 23%, fiscal 1995 first half net income of
$16.3 million compares to $17.7 million, or $.90 per share vs. $.97 last year.
Television Advertising Campaign
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At the recently completed High Point Home Furnishings Market, La-Z-Boy
unveiled its planned January launch of a new consumer advertising program
designed to reposition La-Z-Boy as America's preeminent resource for living
room and family room furniture. This new campaign is scheduled to be carried
on prime time television beginning January 30th and is La-Z-Boy's first use
of national television since 1989.
Chairman Comments
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La-Z-Boy Chairman and President Charles T. Knabusch said, "Most of our
dealers enjoyed strong business in recent months. The La-Z-Boy proprietary
store business also remains strong, validating the direction and programs
we've undertaken.
Mr. Knabusch said, "With the growth La-Z-Boy has experienced in all
categories, particularly major upholstery, it became evident that we needed
to expand our presentation so retailers could be exposed to the depth and
breadth of the La-Z-Boy line. As a result, we enlarged our High Point
showroom presentation from 29,000 square feet to nearly 60,000 square feet.
The expansion of our showroom, coupled with the new advertising program,
resulted in an overwhelmingly positive response from our dealers. We
anticipate that our placements of major upholstery on retail floors will
increase measurably in the coming months."
Form 10-Q on EDGAR
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La-Z-Boy has electronically filed its second quarter FORM 10-Q with the
Securities and Exchange Commission via their EDGAR system. Among other
things, this filing includes the balance sheet, income statement and cash
flow statement and additional management discussion.
La-Z-Boy Chair Company Financial Information Release 1 of 4
CONSOLIDATED SUMMARY OF OPERATIONS 11/15/94
(Amounts in thousands, except per share data)
SECOND QUARTER ENDED (UNAUDITED)
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Amounts
------------------ Percent of Sales
Oct. 29, Oct. 23, % Over ----------------
1994 1993 (Under) 1994 1993
-------- -------- ------- ------- -------
Sales $230,586 $209,044 10% 100.0% 100.0%
Cost of sales 166,816 152,160 10% 72.3% 72.8%
-------- -------- ------- ------- -------
Gross profit 63,770 56,884 12% 27.7% 27.2%
S, G & A 43,279 39,204 10% 18.8% 18.7%
-------- -------- ------- ------- -------
Operating profit 20,491 17,680 16% 8.9% 8.5%
Interest expense 752 776 -3% 0.3% 0.4%
Other income 601 411 46% 0.2% 0.2%
-------- -------- ------- ------- -------
Pretax income 20,340 17,315 17% 8.8% 8.3%
Income taxes 8,262 6,900 20% 40.6%** 39.8%**
-------- -------- ------- ------- -------
Net income $12,078 $10,415 16% 5.2% 5.0%
======== ======== ======= ======= =======
Average shares 18,028 18,259 -1%
Earnings per share $0.67 $0.57 18%
Dividends per share $0.17 $0.15 13%
** As a percent of pretax income, not sales.
La-Z-Boy Chair Company Financial Information Release 2 of 4
CONSOLIDATED SUMMARY OF OPERATIONS 11/15/94
(Amounts in thousands, except per share data)
SIX MONTHS ENDED (UNAUDITED)
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Amounts
------------------ Percent of Sales
Oct. 29, Oct. 23, % Over ----------------
1994 1993 (Under) 1994 1993
-------- -------- ------- ------- -------
Sales $404,973 $371,140 9% 100.0% 100.0%
Cost of sales 300,470 275,207 9% 74.2% 74.2%
-------- -------- ------- ------- -------
Gross profit 104,503 95,933 9% 25.8% 25.8%
S,G & A 76,051 71,453 6% 18.8% 19.2%
-------- -------- ------- ------- -------
Operating profit 28,452 24,480 16% 7.0% 6.6%
Interest expense 1,414 1,496 -5% 0.3% 0.4%
Other income 887 868 2% 0.2% 0.2%
-------- -------- ------- ------- -------
Pretax income 27,925 23,852 17% 6.9% 6.4%
Income taxes 11,577 9,463 22% 41.5%** 39.7%**
-------- -------- ------- ------- -------
Income before acctg. change 16,348 14,389 14% 4.0% 3.9%
Accounting change - 3,352 N/A - 0.9%
-------- -------- ------- ------- -------
Net income $16,348 $17,741 -8% 4.0% 4.8%
======== ======== ======= ======= =======
Average shares 18,140 18,236 -1%
Earnings per share:
- -------------------
Income before acctg. change $0.90 $0.79 14%
Accounting change - 0.18 N/A
-------- -------- -------
Net income $0.90 $0.97 -7%
======== ======== =======
Dividends per share $0.34 $0.30 13%
** As a percent of pretax income, not sales.
La-Z-Boy Chair Company Financial Information Release 3 of 4
CONSOLIDATED BALANCE SHEET 11/15/94
(Dollars in thousands)
Unaudited Increase
------------------ (Decrease) Audited
Oct. 29, Oct. 23, ---------------- April 30,
1994 1993 Dollars Percent 1994
-------- -------- ------- ------- ---------
Current Assets
Cash & equivalents $12,299 $8,365 $3,934 47% $25,926
Receivables 193,004 181,390 11,614 6% 183,115
Inventories
Raw materials 35,561 33,696 1,865 6% 31,867
Work-in-process 33,302 31,126 2,176 7% 29,325
Finished goods 27,885 28,530 (645) -2% 26,676
-------- -------- ------- ------- --------
FIFO inventories 96,748 93,352 3,396 4% 87,868
Excess of FIFO over LIFO (20,941) (17,961) (2,980) -17% (20,632)
-------- -------- ------- ------- ---------
Total inventories 75,807 75,391 416 1% 67,236
Deferred income taxes 15,849 13,720 2,129 16% 15,160
Other current assets 8,735 6,486 2,249 35% 4,148
-------- -------- ------- ------- ---------
Total Current Assets 305,694 285,352 20,342 7% 295,585
Property, plant & equipment 96,663 93,337 3,326 4% 94,277
Goodwill 20,307 21,213 (906) -4% 20,752
Other long-term assets 19,850 18,451 1,399 8% 19,639
-------- -------- ------- ------- ---------
Total Assets $442,514 $418,353 $24,161 6% $430,253
======== ======== ======= ======= =========
Certain prior year balance sheet items have been reclassed for comparability
to the current year.
La-Z-Boy Chair Company Financial Information Release 4 of 4
CONSOLIDATED BALANCE SHEET 11/15/94
(Dollars in thousands)
Unaudited Increase
------------------ (Decrease) Audited
Oct. 29, Oct. 23, ---------------- April 30,
1994 1993 Dollars Percent 1994
-------- -------- ------- ------- ---------
Current Liabilities
Short-term debt $0 $441 ($441) -100% $0
Current portion of L/T debt 1,875 2,964 (1,089) -37% 2,875
Accounts payable 27,170 28,508 (1,338) -5% 21,552
Payroll/benefits 28,561 25,125 3,436 14% 29,453
Estimated income taxes 3,940 4,207 (267) -6% 3,882
Other current liabilities 18,605 16,823 1,782 11% 13,701
-------- -------- ------- ------- ---------
Total Current Liabilities 80,151 78,068 2,083 3% 71,463
Long-term debt 56,245 52,495 3,750 7% 52,495
Deferred income taxes 6,763 6,452 311 5% 6,949
Other long-term liabilities 8,286 7,160 1,126 16% 8,435
Shareholders' Equity
17,975,406 shares, $1.00 par 17,975 18,284 (309) -2% 18,287
Capital in excess of par 10,412 9,192 1,220 13% 10,147
Retained earnings 263,342 247,217 16,125 7% 263,348
Currency translation (660) (515) (145) -28% (871)
-------- -------- ------- ------- ---------
Total Shareholders' Equity 291,069 274,178 16,891 6% 290,911
-------- -------- ------- ------- ---------
Total Liabilities and
Shareholders' Equity $442,514 $418,353 $24,161 6% $430,253
======== ======== ======= ======= =========
Certain prior year balance sheet items have been reclassed for comparability
to the current year.