La-Z-Boy posts $4.2M loss in 4Q
By Larry Thomas -- Furniture Today, June 23, 2008
MONROE, Mich. — La-Z-Boy, struggling with both its wholesale and retail businesses, reported a net loss of $4.4 million or 9 cents per share in the fourth quarter of its fiscal year on a 9.8% decline in sales.
In the same quarter last year, the third-largest U.S. furniture resource recorded a profit of $7.7 million or 15 cents per share.
Net sales for the quarter ended April 26 were $368 million, compared with $408.1 million in the same quarter last year.
Sales declined in the company’s case goods and upholstery wholesale segments, as well as its company-owned La-Z-Boy Furniture Galleries stores. Upholstery sales fell 8.9% to $277.5 million, while case goods sales dropped 24.3% to $48.8 million. Sales at company-owned stores, meanwhile, fell 10.2% to $48.9 million.
The upholstery and case goods segments did post operating profits for the quarter, and the upholstery segment’s operating margin increased to 8.3% from 6% in last year’s fourth fiscal quarter.
The retail segment posted a $10.2 million operating loss in the quarter, and President and CEO Kurt Darrow said the company is continuing to squeeze costs out of that business by consolidating warehousing and computer systems.
“We have removed considerable costs from our retail segment, but to make this business profitable we need to drive the top line,” Darrow said during a conference call with securities analysts. “Every person in our retail organization is focused on that objective.”
This year’s fourth-quarter results include one-time restructuring charges of 4 cents per share and a one-time charge of 7 cents per share stemming from a February debt refinancing.
For the fiscal year, sales dropped 10.5% to $1.45 billion. The company’s net loss for the year came to $13.5 million or 26 cents per share. The previous year, La-Z-Boy had net income of $4.1 million or 8 cents per share.
Darrow said the company is forecasting a sales decrease of 3% to 7% for the current fiscal year, which began April 27. Earnings are projected to be 15 cents to 25 cents per share, not including one-time charges or potential income from antidumping duties.
The company received $7.15 million in antidumping duties, paid by importers of wood bedroom furniture from China, in the most recent fiscal year.
| 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. | |||
| (a) Includes restructuring expense of $632,000 in the 2008 quarter, $2.5 million in the 2007 quarter, $3.1 million in the 2008 year and $7.7 million in the 2007 year. Includes expense for writedown of intangibles of $2.6 million in the 2008 quarter and $8.4 million in the 2008 year. Includes antidumping duty income of $7.1 million in the 2008 year and $3.4 million in the 2007 year. Includes income from discontinued operations of $50,000 in the 2008 quarter, and losses from discontinued operations of $724,000 in the 2007 quarter, $6 million in the 2008 year and $15.6 million in the 2007 year. Also includes income tax benefit of $2.6 million in the 2008 quarter and $7 million in the 2008 year, and income tax expense of $3.4 million in the 2007 quarter and $10.1 million in the 2007 year. | |||
| 13 weeks ended 4/26 | 2008 | 2007 | Change |
| Sales | $368,030,000 | $408,078,000 | (9.8%) |
| Operating income | 5,061,000 | 19,070,000 | (73.5%) |
| Net income | (4,421,000) | 7,711,000 | — |
| Earnings per share | (0.09) | 0.15 | — |
| 52 weeks ended 4/26 | 2008 | 2007 | Change |
| Sales | $1,450,941,000 | $1,621,460,000 | (10.5%) |
| Operating income | (185,000) | 42,988,000 | — |
| Net income | (13,537,000) | 4,139,000 | — |
| Earnings per share | (0.26) | 0.08 | — |
