The Joplin Globe, Joplin, MO

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June 22, 2010

La-Z-Boy reports brisk sales

Staff Writer From staff reports

NEOSHO, Mo. — La-Z-Boy, one of the largest employers in Neosho, last week reported higher sales for both its fourth quarter and fiscal year.

Net income and earnings per share also rose for both periods, but the company warned about tough times ahead because of waning consumer confidence.

Net income for the fourth quarter, which ended April 24, came to nearly $13.7 million, or 26 cents per share, on sales of $310.7 million. That compares with a net income of nearly $5.2 million, or 10 cents per share, on sales of $284.5 million for the same period one year earlier.

Net income for the full year came to $32.5 million, or 62 cents per share, on sales of $1.18 billion, compared with a net loss of $122.7 million, or $2.39 per share, on sales of $1.23 billion a year earlier.

Fourth-quarter sales were up 9.2 percent for the company overall, with the sharpest growth seen by La-Z-Boy’s upholstery segment, which includes the Neosho plant. The upholstery segment saw growth of 12.2 percent.

“The performance in our upholstery segment was largely fueled by the cellular production process that we implemented throughout our La-Z-Boy branded facilities,” Kurt Darrow, the president and CEO, said in a statement. “Although a capital-intensive and lengthy undertaking over a three-year period, it has enhanced the efficiencies of our operations, even in the lower volume environment in which we are operating.”

The company also said in a statement that it plans to realize “significant cost savings” by transferring some of its cutting and sewing operations to Mexico.

Darrow said the case goods side of the business, which includes dining room tables and bedroom sets, continues to struggle because consumers are postponing large-ticket purchases.

But, because of cost saving measures, that segment came close to breaking even for the quarter and the year, La-Z-Boy reported.

The fourth-quarter results included restructuring charges stemming from the consolidation of two La-Z-Boy plants and the closing of some of the company’s own stores.

“While our results and other public data points indicate the beginning of improved industry conditions, we remain cautious going into fiscal 2011,” Darrow said in a statement. “Sales growth and cost savings initiatives will need to be balanced against various macroeconomic factors, including relatively low consumer confidence levels, ongoing high unemployment and volatility within the housing market, as well as headwinds relating to raw material price increases versus last year.”



 

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