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La-Z-Boy posts $195,000 loss

Larry Thomas -- Furniture Today, September 9, 2010

MONROE, Mich. - La-Z-Boy swung to a net loss of $195,000 in the first fiscal quarter as the upholstery and case good major was hampered by rising raw materials prices and shipping delays from Mexico and Asia.
Sales for the quarter ended July 24 were $263.3 million, less than 1% ahead of the same quarter last year.
"Our results for the quarter were impacted by a confluence of factors," said Kurt Darrow, president and CEO. "These issues, including higher raw material costs, supply chain disruptions, storms which delayed shipping from our Mexico cut-and-sew operation, and inefficiencies in Mexico as we transition all custom cut-andsewn product from our U.S. operations, have abated somewhat and are not anticipated to impact our results throughout the remainder of the year to the extent they did this quarter."

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 7/24	2010	2009	Change
Sales	$263,313,000	$262,671,000	0.2%
Operating income	(907,000)	3,500,000	-
Net income (a)	(195,000)	1,983,000	-
Earnings per share	0.00	0.04	-
(a) Includes restructuring charges of $186,000 in the 2010 quarter and $1 million in the 2009 quarter. Excludes net loss attributable to noncontrolling interests of $384,000 in the 2010 quarter.

      The supply chain disruptions had the biggest impact on the upholstery segment, which recorded sales of $201.9 million, a 2.7% increase from the same quarter last year. The segment's operating margin slipped to 5%. It stood at 8.3% in last year's first fiscal quarter.
      Darrow said flooding from hurricane Alex in Mexico caused delays in shipping cut-and-sewn kits to U.S. factories - a problem that was compounded by delays in receiving fabric from Asian suppliers. He said the problems "were not systemic to our business and we believe our facilities will operate with the efficiencies demonstrated over the past year."
      Sales in the case goods segment were $36.9 million, up 2.7% from $35.9 million in the same quarter last year. That segment recorded operating income of $1.58 million, reversing an operating loss of $121,000 in the comparable quarter last year.
      Sales at company-owned retail stores fell 1.8% to $35.3 million, but the segment cut its operating loss to $4.92 million. It was $5.67 million in the same quarter last year.

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La-Z-Boy posts $195,000 loss, citing rising prices, shipping delays

Aug 18, 2010

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