La-Z-Boy posts $7.8M 3Q loss
By Larry Thomas -- Furniture Today, February 18, 2007
Monroe, Mich. — La-Z-Boy posted a net loss of $7.8 million in its third quarter ended Jan. 27 as sales slid 9.6%.
The company, which said last week it was selling its Sam Moore, Clayton Marcus and Pennsylvania House units, said much of the loss was attributable to those operations, as well as to company-owned dedicated stores, which incurred an operating loss of $6.7 million.
"The retail environment remains extremely difficult," said President and CEO Kurt Darrow. "But against that backdrop, we were pleased with our wholesale business performance."
Total sales for the quarter were $403.9 million, compared with $446.6 million in the quarter ended Jan. 28, 2006.
The net loss, which equals 15 cents per share, included losses of $14.8 million related to the three companies marked for sale, as well as its American of Martinsville contract furniture business, which was sold last July.
The losses included write-downs in the value of various intangible and fixed assets.
Taking out the losses from those companies, which have been classified as "discontinued operations" for accounting purposes, La-Z-Boy would have had net income of $6.9 million or 13 cents per share in its third quarter.
For the nine months, the four discontinued units had sales of $99.4 million, a decline of more than 63% from the previous year's nine months. Those sales figures are not included in the companywide numbers.
The latest quarter's net loss was partially offset by the $3.4 million the company received during the quarter in antidumping duties, paid by importers of Chinese-made wood bedroom furniture.
In the comparable quarter last year, La-Z-Boy had net income of $10.5 million or 20 cents per share.
In the most recent quarter, sales from its upholstery segment were off 11.8%, and case goods sales were off 14.6%.
Sales from company-owned stores were $61.1 million, compared with $57.4 million in the same quarter last year. The company didn't disclose comparable-store sales for its own stores, but said they were off 8.3% for the entire La-Z-Boy Furniture Galleries network in the fourth calendar quarter.
For the nine months, total sales declined 2.8% to $1.21 billion, and the company recorded a net loss of $3.6 million or 7 cents per share. In the first nine months of the previous fiscal year, La-Z-Boy had net income of $7.2 million or 14 cents per share.
| La-Z-Boy | |||
|---|---|---|---|
| Owns Alexvale, American Drew, Bauhaus, Clayton Marcus, England, Hammary, Kincaid, Lea, Pennsylvania House and Sam Moore | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 1/27 | 2007 | 2006 | Change |
| (a) Includes pretax restructuring charges of $2.9 million in the 2007 quarter, $4.7 million in the 2007 nine months, $594,000 in the 2006 quarter and $8.4 million in the 2006 nine months. Includes after-tax losses from discontinued operations of $14.7 million in the 2007 quarter and $14.4 million in the 2007 nine months, and earnings from discontinued operations of $487,000 in the 2006 quarter and $442,000 in the 2006 nine months. | |||
| Sales | $403,874,000 | $446,614,000 | (9.6%) |
| Operating income | 11,945,000 | 18,282,000 | (34.7%) |
| Net income (a) | (7,821,000) | 10,468,000 | |
| Earnings per share | (0.15) | 0.20 | |
| 9 months ended 1/27 | 2007 | 2006 | Change |
| Sales | $1,210,353,000 | $1,245,636,000 | (2.8%) |
| Operating income | 22,824,000 | 26,464,000 | (13.8%) |
| Net income (a) | (3,572,000) | 7,229,000 | |
| Earnings per share | (0.07) | 0.14 | |
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