La-Z-Boy Posts $5.3 Million Profit for 4th Quarter
June 16, 2009
La-Z-Boy (LZB) reported a $5.3 million profit from continuing operations for the fourth quarter ended April 25. That's compared to a $4.5 million loss during the same period last year.
In early trading this morning, La-Z-Boy shares were trading around $4.44, up more than 21 percent from a close of $3.64 yesterday.
In addition, the company generated $34 million in cash from operating activities and reduced debt by $28 million in the quarter. Sales for the quarter were $284.5 million, down 23 percent compared with the prior year's fourth quarter.
"We were profitable during the quarter on a sales decline of $84 million as the operating environment continues to be very difficult," said Kurt L. Darrow, President and Chief Executive Officer of La-Z-Boy. "This is the direct result of the decisive actions taken and the significant changes made to our cost structure over the past year, coupled with the ongoing execution of strategic initiatives that will continue to increase the company's operating efficiencies. ... Going forward, we will maintain our aggressive stance in managing our business and, with our new infrastructure, I am confident La-Z-Boy Incorporated will emerge from this difficult macroeconomic period as a stronger and more competitive entity."
For fiscal 2009, La-Z-Boy Incorporated reported sales of $1.2 billion, down 15.5 percent from $1.5 billion in the prior-year period. The company posted a loss from continuing operations of $121.3 million, compared to a loss of $7.5 million.
The 2009 full-year results include income of $0.16 per share related to anti-dumping monies received on bedroom furniture imported from China, a restructuring charge of $0.24 per share related to various plant, warehouse facilities and retail store closures, a non-cash intangible write-down of $0.85 per share relating to goodwill and trade names and a $0.15 per share non-cash impairment of long-lived assets relating to the company's retail operation. The company's full-year results also include a non-cash $0.74 per-share charge recognized in the second quarter of fiscal 2009 for a valuation allowance against the company's deferred tax assets.
For the quarter, upholstery sales were down 22.5 percent to $215 million, compared with $277.5 million in the same quarter last year. Fourth quarter case goods sales were $39.3 million, a 19.4 percent decrease from $48.8 million in the previous year's quarter.
Darrow said the company continues to work on manufacturing efficiencies in the company's upholstery and case goods factories.
"In our case goods business, we made the decision to consolidate our two separate manufacturing operations into one facility in Hudson, N.C.," he said. "We will close our plant in North Wilkesboro, N.C., and convert it to a finished-goods warehouse and vacate a leased warehouse operation in Statesville, N.C. These moves will take place over a nine-month period and, when completed, will provide an annual cost savings of approximately $5 to $6 million, based on current volume. Additionally, we are narrowing the number of collections we offer to focus on our best sellers and a core group of products. As a result, during the quarter, the operating margin for the segment was negatively impacted by higher-than-usual discounting of certain product to reduce inventory levels and generate cash."
In early trading this morning, La-Z-Boy shares were trading around $4.44, up more than 21 percent from a close of $3.64 yesterday.
In addition, the company generated $34 million in cash from operating activities and reduced debt by $28 million in the quarter. Sales for the quarter were $284.5 million, down 23 percent compared with the prior year's fourth quarter.
"We were profitable during the quarter on a sales decline of $84 million as the operating environment continues to be very difficult," said Kurt L. Darrow, President and Chief Executive Officer of La-Z-Boy. "This is the direct result of the decisive actions taken and the significant changes made to our cost structure over the past year, coupled with the ongoing execution of strategic initiatives that will continue to increase the company's operating efficiencies. ... Going forward, we will maintain our aggressive stance in managing our business and, with our new infrastructure, I am confident La-Z-Boy Incorporated will emerge from this difficult macroeconomic period as a stronger and more competitive entity."
For fiscal 2009, La-Z-Boy Incorporated reported sales of $1.2 billion, down 15.5 percent from $1.5 billion in the prior-year period. The company posted a loss from continuing operations of $121.3 million, compared to a loss of $7.5 million.
The 2009 full-year results include income of $0.16 per share related to anti-dumping monies received on bedroom furniture imported from China, a restructuring charge of $0.24 per share related to various plant, warehouse facilities and retail store closures, a non-cash intangible write-down of $0.85 per share relating to goodwill and trade names and a $0.15 per share non-cash impairment of long-lived assets relating to the company's retail operation. The company's full-year results also include a non-cash $0.74 per-share charge recognized in the second quarter of fiscal 2009 for a valuation allowance against the company's deferred tax assets.
For the quarter, upholstery sales were down 22.5 percent to $215 million, compared with $277.5 million in the same quarter last year. Fourth quarter case goods sales were $39.3 million, a 19.4 percent decrease from $48.8 million in the previous year's quarter.
Darrow said the company continues to work on manufacturing efficiencies in the company's upholstery and case goods factories.
"In our case goods business, we made the decision to consolidate our two separate manufacturing operations into one facility in Hudson, N.C.," he said. "We will close our plant in North Wilkesboro, N.C., and convert it to a finished-goods warehouse and vacate a leased warehouse operation in Statesville, N.C. These moves will take place over a nine-month period and, when completed, will provide an annual cost savings of approximately $5 to $6 million, based on current volume. Additionally, we are narrowing the number of collections we offer to focus on our best sellers and a core group of products. As a result, during the quarter, the operating margin for the segment was negatively impacted by higher-than-usual discounting of certain product to reduce inventory levels and generate cash."
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