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 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
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 October 25, 1997
- ------------------------------ -------------------------------
Common Shares, $1.00 par value 17,828,415
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 4, 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 Six Months Ended
------------------ ----------------
Oct. 25, Oct. 26 Oct. 25 Oct. 26
1997 1996 1997 1996
--------- -------- ------- --------
Cash Flows from Operating Activities
Net income $16,822 $15,252 $18,548 $19,850
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 5,195 5,171 10,068 10,026
Change in receivables (52,888) (54,729) (3,986) (9,794)
Change in inventories 6,416 1,912 (7,742) (11,016)
Change in other assets and liab. 25,967 30,194 10,744 10,944
Change in deferred taxes (1,960) (878) (1,960) (878)
--------- -------- -------- --------
Total adjustments (17,270) (18,330) 7,124 (718)
--------- -------- -------- --------
Cash Provided by Operating
Activities (448) (3,078) 25,672 19,132
Cash Flows from Investing Activities
Proceeds from disposals of assets 76 608 392 721
Capital expenditures (5,775) (3,643) (11,343) (8,223)
Change in other investments 159 179 (288) (5,442)
--------- -------- -------- --------
Cash Used for Investing Activities (5,540) (2,856) (11,239) (12,944)
Cash Flows from Financing Activities
Short-term debt - - - -
Long-term debt - - - -
Retirements of debt (116) (64) (2,041) (3,004)
Capital leases - -
Capital lease principal payments (513) (513) (1,040) (1,078)
Stock for stock option plans 1,091 376 3,103 1,846
Stock for 401(k) employee plans 283 285 686 668
Purchase of La-Z-Boy stock (6,973) (3,242) (9,397) (10,368)
Payment of cash dividends (3,775) (2,981) (7,543) (6,463)
---------- -------- -------- ---------
Cash Used for Financing Activities (10,003) (6,139) (16,232) (18,399)
Effect of exch. rate changes on cash 62 159 98 107
--------- -------- -------- ---------
Net change in cash and equivalents (15,929) (11,914) (1,701) (12,104)
Cash and equiv. beginning of period 39,610 26,870 25,382 27,060
---------- ------- -------- ---------
Cash and equiv. at end of period $23,681 $14,956 23,681 14,956
========= ======== ======== =========
Cash paid during period - Income taxes $6,222 $8,513 $7,663 $10,770
- Interest $955 $1,137 $1,794 $1,970
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 1997 Annual Report filed with the
Securities and Exchange Commission. The financial information included
herein, other than the consolidated balance sheet as of April 26, 1997, has
been prepared by management without audit by independent certified public
accountants who do not express an opinion thereon. The consolidated
balance sheet as of October 25, 1997 has been prepared on a basis consistent
with but does not include all the disclosures contained in, the audited
consolidated financial statements for the year ended April 26, 1997. 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 25, 1998.
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.(a)
The Company's strong financial position is reflected in the debt to capital
percentage of 14% and a current ratio of 3.2 to 1 at the end of the Second
quarter. At April 26, 1997, the debt to capital percentage was 15% and the
current ratio was 3.5 to 1. At the end of the preceding year's Second
quarter, the debt to capital percentage was 16% and the current ratio was
3.2 to 1. As of October 25, 1997, there was $63 million of unused lines of
credit available under several credit arrangements.
Approximately 30% of the 4 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 5. Other Information
- --------------------------
On October 29, 1997, The Board of Directors of La-Z-Boy Incorporated
announced that Gerald L. Kiser has been named President and Chief
Operating Officer of the Company. The Board of Directors named
Patrick H. Norton to Chairman of the Board of the company. Mr. Kiser was
promoted from Executive Vice President and Chief Operating Officer.
Mr. Norton will continue to direct all sales and marketing activities.
For Further detail, see attached exhibit 99.(b)
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a)(3i) Restated Articles of incorporation as filed with the state
of Michigan, on September 18,1997.
(3ii) By-Laws of la-Z-Boy Incorporated
(27) Financial Data Schedule (EDGAR only).
(99) (a) News Release and Financial Information Release: re Actual second
quarter results and Management Discussion dated November 4, 1997
(filed herewith).
(99) (b) News Release: re Changes in Management of Registrant dated
October 29, 1997 (filed herewith).
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 25, 1997 to be signed on its behalf by the undersigned
thereunto duly authorized.
LA-Z-BOY INCORPORATED
(Registrant)
/s/G.M. Hardy
Date November 4, 1997 -----------------------------
Gene M. Hardy
Secretary and Treasurer
(Principal Accounting Officer)