News Release
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STRONGER SALES AND EARNINGS FOR LA-Z-BOY
MONROE, MI., May 30, 1996: For its 1996 fiscal fourth quarter and year ended
April 27, 1996, La-Z-Boy Chair Company continued to improve its sales and
profits compared to last year. Fourth quarter sales rose 14% and net income
increased 10%. For the year, sales were up 11% and net income was up 8%.
Financial Details:
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1996 Fourth Quarter sales were $267 million vs. last year's $234 million,
an increase of 14%. Comparable sales--after including England/Corsair's sales
on a pro forma basis in last year's sales, increased 2%. England/Corsair was
acquired at the beginning of fiscal 1996 and is a separate operating division.
Fourth quarter net income rose 10% to $14.0 million vs. last year's $12.7
million. Net income per share increased to $0.76 vs. $0.71 last year.
1996 full year sales were $947 million vs. last year's $850 million, an
increase of 11%. Comparable sales (including England/Corsair) were about 1%
less than last year's level. Net income was up 8% to $39.3 million vs. last
year's $36.3 million. Net income per share increased 5% to $2.12 from $2.01
last year.
Chairman Comments:
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La-Z-Boy Chairman and President Charles T. Knabusch said, "We finished our
1996 fiscal year with record sales overall, and comparable sales up 2% from last
year's strong fourth quarter. This was a marked improvement from the third
quarter in which comparable sales declined 4%.
"On the profit side, we showed a 10% gain over last year's strong fourth
quarter, and finished the year with record earnings of $2.12 per share.
"At the recent international home furnishings trade show in High Point,
N.C., La-Z-Boy's Hammary and Kincaid divisions successfully launched an
extensive new product group they developed in a exclusive arrangement
with Ducks Unlimited, a national conservation and wildlife organization. Our
newest TV advertising campaign also is being acclaimed for featuring wildlife
in the form of two playful raccoons. And, from its start in early 1995, our
national TV advertising has generated some 400,000 responses from American
consumers."
A continuing upgrading of Residential Division Showcase Shoppes to
larger, more comprehensive La-Z-Boy Furniture Galleries stores, plus the
opening of new Furniture Galleries in the key market areas is equipping
La-Z-Boy with one of the residential furniture industry's most powerful
proprietary distribution networks. The company's first overseas Furniture
Galleries store is scheduled to open this fall.
More:
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The rate of incoming sales orders in recent weeks has been above the
rate for the similar period last year. Sales backlogs generally are lower,
due in part to La-Z-Boy's success in filling sales orders more promptly.
La-Z-Boy's Form 8-K filed with the SEC (and available on EDGAR) includes a
full income statement, balance sheet, cash flow statement, additional management
discussion and financial sections of the annual report.
NYSE & PSE: LZB Contact: Jim Korsnack (313) 241-4208
La-Z-Boy Chair Company Financial Information Release 1 of 3
CONSOLIDATED STATEMENT OF INCOME 5/30/96
(Amounts in thousands, except per share data)
FOURTH QUARTER ENDED (UNAUDITED)
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Amounts
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Apr. 27, Apr. 29, Percent of Sales
1996 1995 % Over ----------------
(13 weeks)(13 weeks) (Under) 1996 1995
--------- -------- ------- ------- -------
Sales $266,832 $234,484 14% 100.0% 100.0%
Cost of sales 194,755 170,985 14% 73.0% 72.9%
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Gross profit 72,077 63,499 14% 27.0% 27.1%
S, G & A 48,751 42,364 15% 18.3% 18.1%
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Operating profit 23,326 21,135 10% 8.7% 9.0%
Interest expense 1,188 879 35% 0.4% 0.4%
Interest Income 645 626 3% 0.2% 0.3%
Other income 736 526 40% 0.3% 0.2%
--------- -------- ------- ------- -------
Pretax income 23,519 21,408 10% 8.8% 9.1%
Income taxes 9,481 8,675 9% 40.3%* 40.5%*
--------- -------- ------- ------- -------
Net income $14,038 $12,733 10% 5.3% 5.4%
========= ======== ======= ======= =======
Average shares 18,457 17,927 3%
Net income per share $0.76 $0.71 7%
Dividends per share $0.19 $0.17 12%
TWELVE MONTHS ENDED (AUDITED)
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Amounts
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Apr. 27, Apr. 29, Percent of Sales
1996 1995 % Over ----------------
(52 weeks) (52 weeks) (Under) 1996 1995
-------- -------- ------- ------- -------
Sales $947,263 $850,271 11%* 100.0% 100.0%
Cost of sales 705,379 629,222 12% 74.5% 74.0%
-------- -------- ------- ------- -------
Gross profit 241,884 221,049 9% 25.5% 26.0%
S,G & A 174,376 158,551 10% 18.4% 18.6%
-------- -------- ------- ------- -------
Operating profit 67,508 62,498 8% 7.1% 7.4%
Interest expense 5,306 3,334 59% 0.6% 0.4%
Interest Income 1,975 1,628 21% 0.2% 0.2%
Other income 2,023 1,229 65% 0.3% 0.1%
-------- -------- ------- ------- -------
Pretax income 66,200 62,021 7% 7.0% 7.3%
Income taxes 26,947 25,719 5% 40.7%* 41.5%*
-------- -------- ------- ------- -------
Net income $39,253 $36,302 8% 4.1% 4.3%
======== ======== ======= ======= =======
Average shares 18,498 18,044 3%
Net income per share $2.12 $2.01 5%
Dividends per share $0.74 $0.68 9%
* As a percent of pretax income, not sales.
England/Corsair was included in the fourth quarter and twelve months ended April
27, 1996 results, but not in the fourth quarter and twelve months ended April
29, 1995 results.
La-Z-Boy Chair Company Financial Information Release 2 of 3
CONSOLIDATED BALANCE SHEET 5/30/96
(Dollars in thousands)
Audited Increase
------------------- (Decrease)
Apr. 27, Apr. 29, -----------------
1996 1995 Dollars Percent
--------- --------- --------- -------
Current assets
Cash & equivalents $27,060 $27,048 12 0%
Receivables 206,430 192,938 13,492 7%
Inventories
Raw materials 37,274 39,604 (2,330) -6%
Work-in-process 35,241 35,036 205 1%
Finished goods 28,333 29,051 (718) -2%
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FIFO inventories 100,848 103,691 (2,843) -3%
Excess of FIFO over LIFO (21,656) (22,600) 944 4%
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Total inventories 79,192 81,091 (1,899) -2%
Deferred income taxes 19,271 18,242 1,029 6%
Other current assets 5,148 6,081 (933) -15%
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Total current assets 337,101 325,400 11,701 4%
Property, plant & equipment 116,199 117,175 (976) -1%
Goodwill 40,359 41,701 (1,342) -3%
Other long-term assets 23,887 19,542 4,345 22%
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Total assets $517,546 $503,818 $13,728 3%
========= ========= ========= ========
Audited Increase
------------------- (Decrease)
Apr. 27, Apr. 29, -----------------
1996 1995 Dollars Percent
--------- --------- --------- -------
Current liabilities
Current portion-l/t debt $5,625 $4,676 $949 20%
Current portion-cap. leases 2,114 2,078 36 2%
Accounts payable 30,997 29,323 1,674 6%
Payroll/Other Comp. 34,609 31,845 2,764 9%
Estimated income taxes 5,572 4,855 717 15%
Other current liabilities 17,601 15,343 2,258 15%
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Total current liabilities 96,518 88,120 8,398 10%
Long-term debt 57,075 71,149 (14,074) -20%
Capital leases 4,219 5,298 (1,079) -20%
Deferred income taxes 6,663 6,610 53 1%
Other long-term liabilities 9,695 9,001 694 8%
Shareholders' equity
18,385,041 shares, $1.00 par 18,385 18,562 (177) -1%
Capital in excess of par 28,016 28,085 (69) 0%
Retained earnings 297,750 277,738 20,012 7%
Currency translation (775) (745) (30) -4%
--------- --------- --------- -------
Total shareholders' equity 343,376 323,640 19,736 6%
--------- --------- --------- -------
Total liabilities and
shareholders' equity $517,546 $503,818 $13,728 3%
========= ========= ========= =======
La-Z-Boy Chair Company Financial Information Release 3 of 3
5/30/96
Overall:
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Refer to today's press release for additional information.
Gross Profit:
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The fourth quarter gross profit of 27.0% of sales was slightly lower than last
years' 27.1% of sales. The decline was primarily due to the inclusion of the
historically lower gross profit of England/Corsair (E/C). The E/C effect was
partially offset by the favorable effect of the sales growth in the quarter
exceeding the twelve month growth rate.
S, G and A:
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The S, G & A as a percent of sales of 18.3% in the fourth quarter was up from
18.1% last year. In the previous quarters, S, G & A as a percent of sales had
been lower than the prior year due to the inclusion of E/C which has
historically incurred lower S, G & A expense. In the fourth quarter, a one-
time year-to-date reclassification of expense occurred increasing S, G & A
by 0.4 points as a percent of sales. The offset was to sales. In addition,
a one-time amortization adjustment increased S, G & A by 0.3 points as a
percent of sales.
Other Income:
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Other income in the fourth quarter exceeded last year largely due to gains on
the sale of some assets of the health-care trust fund.
Receivables:
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At the end of the fourth quarter, receivables were up 7% from the prior year on
a 2% increase in comparable fourth quarter sales. The Company attributes this
growth in receivables to the past year's uncertain economic climate, to some
extended terms offered last winter, and to some temporary slowdowns in payments.
Inventories:
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The raw materials inventories at the end of the fourth quarter were 6% lower
than the prior year. Lumber, leather and fabric inventories were down from
last year. In addition , the leather and fabric inventories declined in the
fourth quarter from the end of the third quarter as expected.