La-Z-Boy posts profit of $5.3 million in 4Q
By Larry Thomas -- Furniture Today, June 22, 2009
Monroe, Mich. — Despite a 22.7% drop in sales, La-Z-Boy recorded a profit of $5.3 million in the quarter ended April 25.
It was the first quarterly profit in more than a year for the upholstery and case goods giant, which has been hit hard by the recession and subsequent decline in consumer spending.
"We were profitable during the quarter on a sales decline of $84 million, as the operating environment continues to be very difficult," said Kurt Darrow, president and CEO. "This is a direct result of the decisive actions taken and the significant changes made in our cost structure over past year, coupled with the ongoing execution of strategic initiatives that will continue to increase the company's operating efficiencies."
Sales for the quarter — the last quarter of La-Z-Boy's fiscal year — totaled $284.5 million.
The most recent quarter's net income compared with a net loss of $4.4 million in the fourth quarter of the previous fiscal year.
La-Z-Boy's last profitable quarter before this one was the three months ended Jan. 26, 2008, when the company earned $9.5 million or 18 cents per share.
In the latest quarter, sales in its upholstery group fell 22.5% to $215 million, but the business had an operating profit of $19.4 million.
Case goods sales tumbled 19.4% to $39.3 million and the group had an operating loss of $1.3 million.
Sales at its company-owned retail stores, meanwhile, were off 21.4% and the group recorded an operating loss of $7.3 million. The loss, however, was 41% smaller than the operating loss recorded a year ago.
"I am pleased with the progress our team is making in stemming the losses in the segment," Darrow said of the retail business. "We believe that even in a lower-volume environment, we can continue to improve the segment's operating performance."
For the fiscal year ended April 25, total sales fell 15.5% to $1.2 billion.
And despite the profitable fourth quarter, La-Z-Boy recorded a net loss of $121.3 million or $2.36 per share for the year.
The full-year results were affected by a $47.7 million writedown in the value of intangibles, most of which was taken in the third fiscal quarter.
The third quarter also included $8.1 million in added revenue from U.S. antidumping duties on Chinese-made bedroom furniture.
La-Z-Boy
Owns American Drew, Bauhaus, England, Hammary, Kincaid and Lea
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 4/25 | 2009 | 2008 | Change |
| (a) Includes restructuring charges of $556,000 in the 2009 quarter, $3.2 million in the 2008 quarter, $12.5 million in the 2009 year and $8.1 million in the 2008 year; also includes charges for writedown of long-lived assets of $467,000 in the 2009 quarter and $7.5 million in the 2009 year; charges for writedown of intangibles of $2.6 million in the 2008 quarter, $47.7 million in the 2009 year and $8.4 million in the 2008 year; income from Continued Dumping and Subsidy Offset Act of $8.1 million in the 2009 year and $7.1 million in the 2008 year; income from discontinued operations of $50,000 in the 2008 quarter and a loss from discontinued operations of $6 million in the 2008 year. |
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| Sales | $284,498,000 | $368,030,000 | (22.7%) |
| Operating income | 4,421,000 | 5,061,000 | (12.6%) |
| Net income (a) | 5,323,000 | (4,421,000) | — |
| Earnings per share | 0.10 | (0.09) | — |
| Year ended 4/25 | 2009 | 2008 | Change |
| Sales | $1,226,674,000 | $1,450,941,000 | (15.5%) |
| Operating income | (26,426,000) | (185,000) | — |
| Net income (a) | (121,347,000) | (13,537,000) | — |
| Earnings per share | (2.36) | (0.26) | — |
