SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR QUARTER ENDED October 23, 1999January 22, 2000 COMMISSION FILE NUMBER 1-9656
LA-Z-BOY INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MICHIGAN 38-0751137
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1284 North Telegraph Road, Monroe, Michigan 48162-3390
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (734) 241-4414
None
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Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each issuer's classes of common
stock, as of the last practicable date:
Class Outstanding at October 23, 1999January 22, 2000
- ------------------------------ ------------------------------------------------------------------ -------------------------------
Common Shares, $1.00 par value 52,143,405
152,544,083
Part I - FINANCIALPART I-FINANCIAL INFORMATION
Item 1. Financial Statements
-------------------------------------------------------------------------------
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
(Amounts in thousands, except per share data)
SECOND QUARTER ENDED
------------------------------------------------
(UNAUDITED)
------------------- Percent ofThird Quarter Ended Nine Months Ended
(Unaudited) (Unaudited)
----------------------- -----------------------
Jan. 22, Jan. 23, Jan. 22, Jan. 23,
2000 1999 2000 1999
---------- ---------- ---------- ----------
Sales Oct. 23, Oct. 24, % Over --------------
1999 1998 (Under) 1999 1998
-------- -------- -------- ----- -----
Sales $387,736 $334,831 16% 100.0% 100.0%$ 376,872 $ 318,105 $1,086,267 $ 921,816
Cost of sales 286,520 245,062 17% 73.9% 73.2%
-------- -------- -------- ----- -----281,358 230,923 808,904 681,416
---------- ---------- ---------- ----------
Gross profit 101,216 89,769 13% 26.1% 26.8%95,514 87,182 277,363 240,400
Selling, general &and
administrative 62,920 59,510 6% 16.2% 17.8%
-------- -------- -------- ----- -----62,226 58,758 184,122 169,556
---------- ---------- ---------- ----------
Operating profit 38,296 30,259 27% 9.9% 9.0%33,288 28,424 93,241 70,844
Interest expense 1,866 1,164 60% 0.5% 0.3%2,128 1,110 5,433 3,461
Interest income 610 471 30% 0.2% 0.1%320 430 1,526 1,478
Other income 927 865 7% 0.2% 0.3%
-------- -------- -------- ----- -----1,317 962 3,025 2,182
---------- ---------- ---------- ----------
Pretax income 37,967 30,431 25% 9.8% 9.1%32,797 28,706 92,359 71,043
Income tax expense 14,697 11,984 23% 38.7% * 39.4% *
-------- -------- -------- ----- -----11,460 10,978 34,459 27,684
---------- ---------- ---------- ----------
Net income $ 23,27021,337 $ 18,447 26% 6.0% 5.5%
======== ======== ======== ===== =====17,728 $ 57,900 $ 43,359
========== ========== ========== ==========
Basic earnings per share $ 0.41 $ 0.34 $ 1.11 $ 0.82
Diluted earnings per share $ 0.41 $ 0.33 $ 1.10 $ 0.81
Diluted average shares 52,625 53,425 -1%
Diluted EPS $0.44 $0.35 26%
Basic EPS $0.44 $0.35 26%52,274 52,925 52,498 53,331
Dividends per share $0.08 $0.08 0%
SIX MONTHS ENDED
--------------------------------------------------
(UNAUDITED)
------------------- Percent of Sales
Oct. 23, Oct. 24, % Over ----------------
1999 1998 (Under) 1999 1998
-------- -------- -------- ------- -----
Sales $709,395 $603,711 18% 100.0% 100.0%
Cost of sales 527,546 450,493 17% 74.4% 74.6%
-------- -------- -------- ------- -----
Gross profit 181,849 153,218 19% 25.6% 25.4%
Selling, general &
administrative 121,896 110,798 10% 17.1% 18.4%
-------- -------- -------- ------- -----
Operating profit 59,953 42,420 41% 8.5% 7.0%
Interest expense 3,305 2,351 41% 0.5% 0.4%
Interest income 1,206 1,048 15% 0.2% 0.2%
Other income 1,708 1,220 40% 0.2% 0.2%
-------- -------- -------- ------- -----
Pretax income 59,562 42,337 41% 8.4% 7.0%
Income tax expense 22,999 16,706 38% 38.6% * 39.5% *
-------- -------- -------- ------- -----
Net income $ 36,5630.08 $ 25,631 43% 5.2% 4.2%
======== ======== ======== ======= =====
Diluted average shares 52,610 53,543 -2%
Diluted EPS $0.69 $0.48 44%
Basic EPS $0.70 $0.48 46%
Dividends per share $0.16 $0.15 7%
* As a percent of pretax income, not sales.0.08 $ 0.24 $ 0.23
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
2
LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
(Amounts in thousands, except par value)
Unaudited Increase
------------------------------------------- (Decrease) Audited
Oct.Jan. 22, Jan. 23, Oct. 24, ----------------------------------------- Apr. 24,
2000 1999 1998 Dollars Percent 1999
--------- --------- -------- ---------------- ---------
Current assets
Cash & equivalents $ 12,76916,531 $ 22,72144,037 ($ 9,952) -44%27,506) -62% $ 33,550
Receivables 281,651 256,328 25,323 10%268,165 228,820 39,345 17% 265,157
Inventories
Raw materials 56,139 47,847 8,292 17%58,711 52,122 6,589 13% 47,197
Work-in-process 43,354 39,118 4,236 11%47,181 41,271 5,910 14% 37,447
Finished goods 43,388 35,627 7,761 22%46,298 36,984 9,314 25% 34,920
--------- --------- --------- ----------------- ---------
FIFO inventories 142,881 122,592 20,289152,190 130,377 21,813 17% 119,564
Excess of FIFO over LIFO (23,303) (22,712) (591)(23,405) (22,780) (625) -3% (23,053)
--------- --------- --------- ----------------- ---------
Total inventories 119,578 99,880 19,698128,785 107,597 21,188 20% 96,511
Deferred income taxes 22,660 19,396 3,264 17%24,062 18,936 5,126 27% 20,028
Other current assets 11,510 5,889 5,621 95%10,176 4,672 5,504 118% 10,342
--------- --------- --------- ----------------- ---------
Total current assets 448,168 404,214 43,954447,719 404,062 43,657 11% 425,588
Property, plant & equipment, net 143,006 119,660 23,346 20%147,080 121,135 25,945 21% 125,989
Goodwill 89,271 48,017 41,254 86%102,301 47,501 54,800 115% 46,985
Other long-term assets 39,719 29,847 9,872 33%43,805 29,139 14,666 50% 31,230
--------- --------- --------- ----------------- ---------
Total assets $ 720,164740,905 $ 601,738601,837 $ 118,426 20%139,068 23% $ 629,792
========= ========= ========= ================= =========
Current liabilities
Current portion - long-term debt $ 1,5851,629 $ 4,7264,647 ($ 3,141) -66%3,018) -65% $ 2,001
Current portion - capital leases 844 1,099 (255) -23% 784
Accounts payable 59,506 50,693 8,813 17%57,893 48,952 8,941 18% 45,419
Payroll/other compensation 44,641 39,063 5,578 14%44,261 39,316 4,945 13% 53,697
Income taxes 5,818 6,885 (1,067) -15%2,136 4,596 (2,460) -54% 4,103
Other current liabilities 29,393 26,491 2,902 11%28,201 24,917 3,284 13% 26,424
--------- --------- --------- ----------------- ---------
Total current liabilities 141,787 128,957 12,830 10%134,964 123,527 11,437 9% 132,428
Long-term debt 119,594 63,319 56,275 89%121,264 63,279 57,985 92% 62,469
Capital leases 1,485 300 1,185 395%1,983 204 1,779 872% 219
Deferred income taxes 4,995 5,454 (459) -8%5,380 5,459 (79) -1% 5,697
Other long-term liabilities 14,554 11,912 2,642 22%16,702 12,551 4,151 33% 14,064
Commitments & contingencies
Shareholders' equity
Common shares, $1 par 52,143 52,909 (766) -1%52,544 52,397 147 0% 52,340
Capital in excess of par 32,543 30,328 2,215 7%35,099 30,441 4,658 15% 31,582
Retained earnings 354,795 310,417 44,378 14%374,429 316,158 58,271 18% 332,934
Currency translation (1,732) (1,858) 126 7%(1,460) (2,179) 719 33% (1,941)
--------- --------- --------- ----------------- ---------
Total shareholders' equity 437,749 391,796 45,953 12%460,612 396,817 63,795 16% 414,915
Total liabilities and
--------- --------- --------- ----------------- ---------
shareholders' equity $720,164 $ 601,738740,905 $ 118,426 20% $629,792601,837 $ 139,068 23% $ 629,792
========= ========= ========= ================= =========
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
3
LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENTSSTATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED, DOLLAR AMOUNTS IN THOUSANDS)(Unaudited, dollar amounts in thousands)
Three Months Ended SixNine Months Ended
----------------------- -----------------------
October-------------------- --------------------
Jan. 22, Jan. 23, October 24, OctoberJan. 22, Jan. 23,
October 24,2000 1999 19982000 1999
1998
---------- ------------ ---------- ------------------ -------- -------- --------
Cash Flows from Operating Activities
Net income $23,270 $18,447 $36,563 $25,631$ 21,337 $ 17,728 $ 57,900 $ 43,359
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 6,348 5,936 12,128 11,3536,833 5,709 18,961 17,062
Change in receivables (57,931) (60,025) (7,931) (17,454)16,172 27,209 8,241 9,755
Change in inventories (6,365) 1,393 (17,979) (7,975)(1,091) (7,718) (19,070) (15,693)
Change in other assets and liabilities 17,657 31,233 261 21,424(12,915) (3,124) (12,654) 18,300
Change in deferred taxes (2,575) (2,815) (2,554) (2,742)
---------- ------------ ---------- ----------(563) 465 (3,117) (2,277)
-------- -------- -------- --------
Total adjustments (42,866) (24,278) (16,075) 4,606
---------- ------------ ---------- ----------8,436 22,541 (7,639) 27,147
-------- -------- -------- --------
Cash Provided/(Used)Provided by Operating Activities (19,596) (5,831) 20,488 30,23729,773 40,269 50,261 70,506
Cash Flows from Investing Activities
Proceeds from disposals of assets 483 88 550 293240 20 790 313
Capital expenditures (8,384) (4,128) (21,952) (8,233)(6,849) (6,749) (28,801) (14,982)
Acquisition of operating division, net of cash
acquired (365) - (58,681) -(2,099) -- (60,780) --
Change in other investments (2,147) (537) (2,313) (2,427)
---------- ------------ ---------- ----------(3,726) 700 (6,039) (1,727)
-------- -------- -------- --------
Cash Used forby Investing Activities (10,413) (4,577) (82,396) (10,367)(12,434) (6,029) (94,830) (16,396)
Cash Flows from Financing Activities
Long term debt - --- -- 57,000 ---
Retirements of debt (102) (120) (2,806) (3,211)(792) (119) (3,598) (3,330)
Capital leases 935 - 935 -722 -- 1,657 --
Capital lease principal payments (116) (361) (202) (803)(440) (96) (642) (899)
Stock for stock option plans 2,012 3,237 4,183 4,688219 226 4,402 4,914
Stock for 401(k) employee plans 512 458 1,199 837612 545 1,811 1,382
Purchase of La-Z-Boy stock (4,804) (11,160) (10,946) (18,763)(9,916) (8,931) (20,862) (27,694)
Payment of cash dividends (4,189) (4,263) (8,374) (8,006)
---------- ------------ ---------- ----------(4,170) (4,216) (12,544) (12,222)
-------- -------- -------- --------
Cash Provided/(Used) forby Financing Activities (5,752) (12,209) 40,989 (25,258)(13,765) (12,591) 27,224 (37,849)
Effect of exchange rate changes on cash 426 (281) 138 (591)
---------- ------------ ---------- ----------188 (333) 326 (924)
-------- -------- -------- --------
Net change in cash and equivalents (35,335) (22,898) (20,781) (5,979)3,762 21,316 (17,019) 15,337
Cash and equivalents at begin.beginning of period 48,104 45,61912,769 22,721 33,550 28,700
---------- ------------ ---------- ------------------ -------- -------- --------
Cash and equivalents at end of period $12,769 $22,721 $12,769 $22,721
========== ============ ========== ==========$ 16,531 $ 44,037 $ 16,531 $ 44,037
======== ======== ======== ========
Cash paid during period -Income taxes $21,018 $7,403 $23,307 $7,878$ 15,957 $ 10,620 $ 39,264 $ 18,498
-Interest $2,180 $588 $2,666 $1,131$ 1,478 $ 1,631 $ 4,144 $ 2,762
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months
or less to be cash equivalents.
The accompanying Notes to Consolidated Financial Statements are an
integral part of these statements.
4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The financial information is prepared in conformity with generally accepted
accounting principles and such principles are applied on a basis consistent
with those reflected in the Company's 1999 Annual Report on Form 10-K, as
amended, filed with the Securities and Exchange Commission. The financial
information included herein, other than the consolidated balance sheet as
of April 24, 1999, has been prepared by management without audit by
independent certified public accountants. The consolidated balance sheetsheets
as of OctoberJanuary 22, 2000 and January 23, 1999 and October
24, 1998 have been prepared on a basis
consistent with, but doesdo not include all the disclosures contained in, the
audited consolidated financial statements for the year ended April 24,
1999. The information furnished includes all adjustments and accruals
consisting only of normal recurring accrual adjustments which are, in the
opinion of management, necessary for a fair presentation of results for the
interim period.
2. Interim Results
The foregoing interim results are not necessarily indicative of the results
of operations for the full fiscal year ending April 29, 2000.
3. Earnings per Share
Basic earnings per share is computed using the weighted-average number of
shares outstanding during the period. Diluted earnings per share uses the
weighted-average number of shares outstanding during the period plus the
additional common shares that would be outstanding if the dilutive
potential common shares issuable under employee stock options were issued.
Three Months SixNine Months
Ended Ended
----------------- -----------------
Oct.-------------------- --------------------
Jan. 22, Jan. 23, Oct. 24, Oct.Jan. 22, Jan. 23, Oct. 24,
(Amounts in thousands) 2000 1999 19982000 1999
1998
- ---------------------- -------- -------- -------- -------------------------------- --------- --------- --------- ---------
Weighted average common
shares outstanding (basic) 52,324 53,121 52,305 53,25052,088 52,680 52,232 53,061
Effect of options 301 304 305 293
-------- -------- -------- --------186 245 266 270
--------- --------- --------- ---------
Weighted average common
shares outstanding (diluted) 52,625 53,425 52,610 53,543
======== ======== ======== ========
552,274 52,925 52,498 53,331
========= ========= ========= =========
4. Segment Information
The Company's reportable operating segments are Residential upholstery and
Residential casegoods. Financial results of the Company's operating
segments for the three and sixnine months ended OctoberJanuary 22, 2000 and January
23, 1999 and October 24, 1998 are as follows:
Three Months Ended Six Months Ended
---------------------- ----------------------
Oct.
Three Months Ended Nine Months Ended
-------------------------- --------------------------
Jan. 22, Jan. 23, Jan. 22, Jan. 23, Oct. 24, Oct. 23, Oct. 24,
(Amounts in thousands) 2000 1999 2000 1999
- --------------------------- ----------- ----------- ----------- -----------
Net revenues
Residential upholstery $ 310,191 $ 252,536 $ 879,465 $ 721,897
Residential casegoods 50,488 47,129 154,551 145,018
Other 41,848 40,202 125,448 108,291
Eliminations (25,655) (21,762) (73,197) (53,390)
=========== =========== =========== ===========
Consolidated $ 376,872 $ 318,105 $ 1,086,267 $ 921,816
=========== =========== =========== ===========
Operating profit
Residential upholstery $ 30,358 $ 25,888 $ 83,433 $ 65,441
Residential casegoods 3,596 2,335 13,223 7,656
Other 491 359 1,655 635
Unallocated corporate
costs & eliminations (1,157) (158) (5,070) (2,888)
=========== =========== =========== ===========
Consolidated $ 33,288 $ 28,424 $ 93,241 $ 70,844
=========== =========== =========== ===========
5. Subsequent Event On January 27, 2000, the shareholders of LADD Furniture,
Inc., then a publicly traded furniture manufacturer, approved a
stock-for-stock-merger of a La-Z-Boy acquisition subsidiary into LADD. The
merger became effective January 29, 2000. When the merger became effective, LADD
became a wholly-owned subsidiary of La-Z-Boy Incorporated; the holders of LADD
stock received in thousands)consideration for their LADD shares, approximately 9.2 million
shares of La-Z-Boy common stock (valued at approximately $191 million); and the
LADD employee options then outstanding were replaced by options on approximately
984 thousand La-Z-Boy common shares. LADD's sales for its fiscal year ended
January 2, 1999 1998 1999 1998
- ---------------------- --------- --------- --------- ---------
Net revenues
Residential upholstery $ 314,186 $ 262,727 $ 569,274 $ 469,361
Residential casegoods 53,810 52,314 104,063 97,889
Other 45,023 38,595 83,600 68,089
Eliminations (25,283) (18,805) (47,542) (31,628)
--------- --------- --------- ---------
Consolidated $ 387,736 $ 334,831 $ 709,395 $ 603,711
========= ========= ========= =========
Operating profit
Residential upholstery $ 34,483 $ 27,862 $ 53,075 $ 39,553
Residential casegoods 4,533 2,741 9,627 5,321
Other 734 1,054 1,164 277
Unallocated corporate
costs & eliminations (1,454) (1,398) (3,913) (2,731)
--------- --------- --------- ---------
Consolidated $ 38,296 $ 30,259 $ 59,953 $ 42,420
========= ========= ========= =========were approximately $571 million. After giving effect to the
merger, the transaction results in the former LADD shareholders owning
approximately 15% of La-Z-Boy's outstanding common stock.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Cautionary Statement Concerning Forward-Looking Statements
This document contains forward-looking statements that are subject to risks and
uncertainties. Generally, forward-looking statements include information
concerning possible or assumed future actions, events or results of operations.
More specifically, forward-looking statements include the information in this
document regarding:
future income and margins future economic performance
growth future acquisitionsindustry trends
adequacy and cost of financial resources management plans
industry trends year 2000 readiness
Forward-looking statements also include those preceded or followed by the words
"anticipates," "believes," "estimates," "hopes," "plans," " intends" and
"expects" or similar expressions. With respect to all forward-looking
statements, the Company claims the 6
protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.
The reader should understand that the following important factors, in addition to those discussed elsewhere
in this document,as well as
others, could affect the Company's future results and could cause those results
or other outcomes to differ materially from those expressed or implied in
forward-looking statements:
Economic and Industry Conditions
* materially adverse changes in economic and industry conditions
and customer demand generally or in the markets served by our companythe
Company
* supply and demand for and pricing of supplies and components
* availability of qualified labor
* changes in demographics and consumer preferences or demands for
the Company's products
* the impact of e-commerce oron the distribution of the Company's
products
* changes in the availability or cost of capital
Competitive Factors
* the competitiveness of foreign-made products
* the actions of competitors
* new manufacturing technologies
* industry consolidation
Operating Factors
* supply, labor, or distribution disruptions
* technical difficulties, including the inability of material customers and
suppliers to replace, modify or upgrade computer programs in order to
adequately address year 2000 concerns
* acquisitions or divestitures
* changes in operating conditions and costs
* changes in regulatory environment
Factors Relating to PendingRecent Acquisitions
* whether the acquisitions will be consummated and, if they are, whether
they will yield the benefits the Company anticipates
* theintegration challenges inherent in diverting management's focus and resources
from other strategic opportunities and fromor operational matters during
the integration process
* experienced employees leaving for other positions
7
Recent and Pending Acquisitions
The Company acquired Bauhaus USA, Inc., a manufacturer of upholstered furniture
primarily marketed to department stores, on June 1, 1999 for approximately $57
million in cash. Bauhaus' operations are included in the Company's results for
the entire quarter ended October 23, 1999January 22, 2000 and for approximately fiveeight of the
sixnine months ended on that date, but not in the comparable periods of the prior
fiscal year.
On September 28, 1999, theThe Company signed a definitive agreement to acquire LADD
Furniture, Inc., a publicly traded furniture manufacturer, in a stock-for-stock
merger in which LADD shareholders would receive approximately 9.2 million shares
of La-Z-Boy common stock (excluding shares issuable on the exercise of LADD
stock options) valued at approximately $191 million as of that date. LADD's
sales for its fiscal year ended January 2, 1999 were approximately $571
million. The transaction would result in the former LADD shareholders owning
approximately 15% of the Company's outstanding common stock. It is subject to
approval by LADD's shareholders.
On November 11, 1999, the Company signed a definitive agreement to acquireacquired Alexvale Furniture, Inc., a manufacturer of medium priced
upholstered furniture, on December 28, 1999 for a combination of cash and
La-Z-Boy common stock. Alexvale's sales for its fiscal year ended April 30, 1999
were approximately $61 million. The transaction
is subject to regulatory approval.
BothAlexvale's operations are included in the
Company's results for approximately one month of the quarter ended January 22,
2000, but not in the comparable period of the prior fiscal year.
Because the LADD and the Alexvale acquisitions are expectedacquisition, which is to be consummated
during the current quarter, and both will be accounted for as purchases. If
completed, these acquisitions (especially LADD) will result in substantial
changesa purchase, was
consummated on January 29, 2000, no LADD financial results are included in the
Company's assets, liabilitiesresults for the quarter and future results of operations.
Detailed information about LADD is publicly available in the reports and proxy
statements it has filed with the SEC. Additional information about the LADD
acquisition will be contained in the registration statement on Form S-4 that
La-Z-Boy will file with the SEC to register the stock issuable to LADD
shareholders in the merger. Except where expressly stated otherwise, the
discussion that follows does not include any anticipated results of the pending
acquisitions.nine month periods ended January 22, 2000.
Results of Operations
Quarter Ended Oct. 23, 1999Jan. 22, 2000 Compared to Quarter Ended Oct. 24, 1998Jan. 23, 1999
Income Statement Analysis
Third Quarter Ended
------------------------------------
FY00
Over % of Sales
(Under) ----------------------
FY99 2000 1999
---------- ---------- ----------
Sales 18% 100.0% 100.0%
Cost of sales 22% 74.7% 72.6%
---------- ---------- ----------
Gross profit 10% 25.3% 27.4%
Selling, general and
administrative 6% 16.5% 18.5%
---------- ---------- ----------
Operating profit 17% 8.8% 8.9%
Interest expense 92% 0.6% 0.3%
Interest income (26%) 0.1% 0.1%
Other income 37% 0.4% 0.3%
---------- ---------- ----------
Pretax income 14% 8.7% 9.0%
Income tax expense 4% 34.9%* 38.2%*
---------- ---------- ----------
Net income 20% 5.7% 5.6%
========== ========== ==========
Basic earnings per share 21%
Diluted earnings per share 24%
Dividends per share 0%
* As a percent of pretax income, not sales.
Segment Analysis
Third Quarter Ended
---------------------------------------------------------------------
Net Revenues Operating Profit
----------------------------------- -------------------------------
FY00 FY00
Over % of Total Over % of Revenues
(Under) ---------------------- (Under) ------------------
FY99 FY00 FY99 FY99 FY00 FY99
---------- ---------- --------- ---------- -------- --------
Residential upholstery 23% 82.3% 79.4% 17% 9.8% 10.3%
Residential casegoods 7% 13.4% 14.8% 54% 7.1% 5.0%
Other 4% 11.1% 12.6% (94%) 1.2% 0.9%
Unallocated corporate
costs & eliminations 18% (6.8%) (6.8%) N/A N/A N/A
---------- ---------- --------- ---------- -------- --------
Consolidated 18% 100.0% 100.0% 17% 8.8% 8.9%
========== ========== ========= ========== ======== ========
Sales in the secondthird quarter of fiscal year 2000 were up 16%18% over the prior year's
secondthird quarter. Roughly half of the increase was caused by the acquisition of
Bauhaus and most ofBauhaus. "Other" sales were only up 4% due mainly to lower than average contract
sales for the remaining increase was also in the
upholstery segment. Casegoods sales increased 3% compared to last year. Sales
growth in casegoods was less than in the upholstery segment primarily due to
product availability problems and some order weakness. Other sales increased
17%, primarily due to stronger sales at La-Z-Boy retail outlets.
Excluding the effects of the Bauhaus acquisition, the current quarter's results
to date and incoming sales orders indicate that third quarter sales should
increase over the prior year,
8
but at a slower rate than in the second quarter. This continues a trend from
the first quarter, and the trend is expected to continue into the fourth quarter
as well. This trend of declining sales increases is in part due to very strong
prior year sales performance and in part because of slowing growth of U.S.
furniture sales generally.
Gross profit margin decreased to 26.1%25.3% of sales from 26.8%27.4% of sales in last
year's secondthird quarter on a 16%an 18% increase in sales and a 14%15% increase in unit
volume. HigherOne factor affecting the decline was a below average gross profit margin
at Bauhaus. However, the primary reason for the gross profit margin decline was
unfavorable labor and overhead costs were incurred during the quarter as a
result ofassociated with improving plant floor
layouts to accommodatelayouts. Plant floor disruptions caused by creating additional product lines
and to implement lean manufacturing processes. While causing short-term
disruptions and increased plant labor and overhead costs, these changes are
expected to generate long-termmajor upholstery
production capacity, without the need for
additional facilities. In addition, significantinstallation of an improved lumber processing system,
and the implementation of upholstery related plant floor process improvements
have been more severe, and have been more prolonged than previously estimated.
The employee training costs were
incurred for new hires, especially in sewingacquiring and upholstery. It has become
increasingly difficult to acquire and retainretaining labor in a low
unemployment environment. These laborenvironment are still present. As expected, the cost of plywood did
decline and overheadthe cost trends are expectedof cardboard packaging did increase compared to continue into
the third quarter, but to a lesser degree than experienced in the second
quarter.
Gross profit margin was also somewhat impacted by increased costs for plywood
and cardboard packaging during the second quarter, which were only partially
offset by decreased cost for leather. Costs for plywood in the third quarter are
expected to decrease but costs for cardboard packaging are expected to continue
to increase. Foam (polyurethane) costs could rise during calendar year 2000 if
oil prices continue to rise. Fabric prices also could be impacted by higher oil
prices, although no increases are presently being experienced. La-Z-Boy
typically renegotiates its foam contracts in December on a calendar year basis.
Fabric prices are typically negotiated throughout the year. Foam and fabric
comprise about 5% and 20%, respectively, of total costs in the upholstery
segment.
SecondThird quarter selling, general and administrative expenses decreased to 16.2%16.5% of
sales from 17.8%18.5% last year. Information technology,Bonus related, bad debt and selling expenses as a
percent of sales were below the prior year. This favorable trend
is expectedAlso, Bauhaus' selling, general and
administrative expenses were measurably lower than the Company's average. In
addition to continue throughout fiscal year 2000.the above, many other selling, general and administrative expenses
were flat or increased at a rate less than the sales increase. These reductions
more than offset an increase in accrued warranty expense.
Operating profit as a percent of sales declined from 10.3% to 9.8% in the
upholstery segment. Improvements in La-Z-Boy Canada Ltd. were more than offset
by declines in the U.S. Residential and England/Corsair divisions. Most of the
declines in these two divisions were in the gross margin area as described
above. However, advertising and higher other selling, general and administrative
costs at England/Corsair also contributed to the decline even though sales
significantly increased. Operating profit as a percent of sales improved from
5.2%5.0% to 8.4%7.1% in the casegoods segment and from 10.6% to 11.0% in the upholstery segment. This continues a trend from the first quarter where casegoods profitability has
increased at a rate faster than upholstery,and
second quarters, although, casegoods' absolute level of profitability is still
less than upholstery. The primary reasons for the improvement in secondthird quarter
profitability in the casegoods segment were a lower level of selling price
incentives and reductions in selling, generaladvertising and administrativeshowroom renovation expenses.
Interest expense as a percent of sales increased from 0.3% last year to 0.5%0.6% due
to financing obtained in the first quarter for the acquisition of Bauhaus.
Income tax expense as a percent of pretax income declined to 38.7%34.9% from 39.4%38.2%
last year. Canadian operating results forduring the second quarter were favorable
comparedyear have shown significant
improvements thus allowing the Company to last
9
year's second quarter. Since our Canadian operation hasreverse valuation allowances
associated with net operating loss
carryforwards to offset income, this resulted in a decrease tolosses during the second
quarter effective tax rate.
Sixthird quarter.
Nine Months Ended Oct.Jan. 22, 2000 Compared to Nine Months Ended Jan. 23, 1999
Compared to SixIncome Statement Analysis
Nine Months Ended
Oct. 24, 1998-------------------------------------
FY00
Over % of Sales
(Under) ----------------------
FY99 2000 1999
---------- --------- ----------
Sales 18% 100.0% 100.0%
Cost of sales 19% 74.5% 73.9%
---------- --------- ----------
Gross profit 15% 25.5% 26.1%
Selling, general and
administrative 9% 16.9% 18.4%
---------- --------- ----------
Operating profit 32% 8.6% 7.7%
Interest expense 57% 0.5% 0.4%
Interest income 3% 0.1% 0.2%
Other income 39% 0.3% 0.2%
---------- --------- ----------
Pretax income 30% 8.5% 7.7%
Income tax expense 24% 37.3%* 39.0%*
========== ========= ==========
Net income 34% 5.3% 4.7%
========== ========= ==========
Basic earnings per share 35%
Diluted earnings per shares 36%
Dividends per share 4%
* As a percent of pretax income, not sales.
Segment Analysis
Nine Months Ended
------------------------------------------------------------------------
Net Revenues Operating Profit
------------------------------------ --------------------------------
FY00 FY00
Over % of Total Over % of Revenues
(Under) ---------------------- (Under) -------------------
FY99 FY00 FY99 FY99 FY00 FY99
---------- ---------- ---------- ---------- -------- ---------
Residential upholstery 22% 81.0% 78.3% 28% 9.5% 9.1%
Residential casegoods 7% 14.2% 15.7% 73% 8.6% 5.3%
Other 16% 11.5% 11.7% 87% 1.3% 0.6%
Unallocated corporate
costs & eliminations 37% (6.7%) (5.8%) N/A N/A N/A
---------- ---------- ---------- ---------- -------- ---------
Consolidated 18% 100.0% 100.0% 32% 8.6% 7.7%
========== ========== ========== ========== ======== =========
Sales in the sixnine months ended October 23, 1999January 22, 2000 were up 18% over the prior year.
Roughly 6%7% of the 18% sales increase was caused by the June 1, 1999 acquisition of
Bauhaus,
which occurred in June, 1999. Most of the remaining increase was in the
upholstery segment. Casegoods sales increased 6% compared to last year.Bauhaus.
Gross profit margin increaseddecreased to 25.6%25.5% of sales from 25.4%26.1% of sales in first
six months of the last fiscal year on an 18%
increase in sales and a 17%16% increase in unit volume. The favorable effect of
fixed cost absorption was more than offset in part
by the higher labor and overhead
costs as a result ofassociated with improving plant floor layouts to accommodate additional
product lines and implement lean manufacturing processes. The gross profit
margin was also somewhat impacted by increased costscost for plywood and cardboard
packaging, which were only partially offset by decreased costs for leather. In
addition, the below average gross profit margin at Bauhaus also had a negative
impact on the consolidated gross profit margin.
For the sixnine months ended October 23, 1999,January 22, 2000, selling, general and administrative
expenses decreased to 17.1%16.9% of sales from 18.4% last year. InformationBonus related,
information technology, bad debt and selling expenses as a percent of sales were
below the prior year. In addition to the above, many other selling, general and
administrative expenses were flat or increased at a rate less than the sales
increase. These reductions more than offset an increase in accrued warranty
expense.
Operating profit as a percent of sales improved from 5.4%9.1% to 9.3%9.5% in the
upholstery segment. The favorable first and second quarter impacts more than
offset the unfavorable third quarter impacts. Operating profit as a percent of
sales improved from 5.3% to 8.6% in the casegoods segment. This improvement in
profitability in the casegoods segment was mainly due to lower levels of selling
price incentives and 8.4% to 9.3%reductions in the upholstery segment.advertising and showroom renovation expenses.
Interest expense as a percent of sales increased from 0.4% last year to 0.5% due
to financing obtained in the first quarter for the acquisition of Bauhaus.
Income tax expense as a percent of pretax income declined to 38.6%37.3% from 39.5%39.0%
last year caused by the favorable Canadian operating results previously
discussed.discussed in the third quarter analysis.
Liquidity and Capital Resources
Cash flows from operations amounted to $20.5$50.3 million in the first sixnine months of
fiscal year 2000 compared to $30.2$70.5 million in the prior year. Capital
expenditures, dividends and stock repurchases totaled approximately $41$62 million
during the sixnine month period, while cash and cash equivalents decreased by $20.8$17.0
million.
Total FIFO inventory at October 23, 1999January 22, 2000 was 20%27% higher than at the end of
fiscal 1999 and 17% higher than at the end of last year's secondthird quarter. Of this
increase, 7% was due to the acquisition of Bauhaus, 6% was due to the
acquisition of Bauhaus, 6%Alexvale and 3% was an increase in finished goods to support
additional sales volumes, and the remaindervolume.
The increase in other long term assets was primarily a raw material and work-in-process increase fordue to the start upCompany's
additional investments to help support sales growth of a new
upholstery plant.
10
the retail market.
The Company's financial strength is reflected in two commonly used ratios, the
current ratio (current assets divided by current liabilities) and the
debt-to-capital ratio (total debt divided by shareholders' equity plus total
debt). Total debt is defined as current portion -of long-term debt plus current
portion -of capital leases plus long-term debt plus capital leases. The Company's
current ratio was 3.23.3 to 1 at October 23, 1999 andJanuary 22, 2000, 3.2 to 1 at the end of fiscal
1999 and 3.13.3 to 1 at the end of last year's secondthird quarter. At October 23, 1999,January 22, 2000,
the debt to capital ratio was 22%21%, compared to 14% at the end of fiscal 1999 and
15% at the end of last year's secondthird quarter.
As of October 23, 1999,January 22, 2000, the Company had $113$100 million of unused lines of credit
available under several credit arrangements. To finance the acquisition of
Bauhaus on June 1, 1999, the Company borrowed $57 million, which is expected to
bewas replaced on
December 29, 1999 by a borrowing under the Company'sits $75 million unsecured revolving
credit line. The Alexvale acquisition will requirerequired approximately $2.2 million for
the cash portion of the purchase price, which the Company intends to finance by borrowing
under onepaid out of its credit lines or from cash flow
from operations. Alexvale has
approximately $4 million of outstanding debt.
LADD has aOn January 31, 2000, the Company terminated LADD's $175 million
asset-based credit facility maturing on July 12, 2001.
As of October 2, 1999, LADD's outstanding borrowings under this credit facility
were $97.5 million, and its remaining availability under its borrowing base
formula was $41.2 million. The Company intends to terminate the $175 million
LADD credit facility at closing of the merger transaction and paypaid off all borrowings, under this credit facility by borrowing underwhich totaled about $106 million,
with an unsecured $150 million bridge loan facility currently being negotiated that would maturewith a current borrowing
rate of LIBOR plus 0.75% which matures June 29, 2001. At October 2, 1999, LADD's total debt was approximately $102 million. In addition, LADD finances
a significant amount of machinery and equipment through operating lease lines.lines
which La-Z-Boy has guaranteed. As of January 31, 2000, the Company has
guaranteed $10 million on these operating leases.
The Company's capital expenditures during the sixnine months ended October 23, 1999January 22, 2000
were $22$28.8 million. Without regard to the pending LADD and Alexvale acquisitions,
the Company would expect to make capital expenditures of approximately $8 to $12
million during the remainder of fiscal year 2000 and approximately $25 to $35
million in fiscal year 2001. Taking the capital expenditure needs of LADD and
Alexvale into account, the Company expects to spend approximately $14 to $18
million during the remainder of fiscal year 2000 and approximately $45 to $55
million in fiscal year 2001. The Company does not currently have any material
commitments for capital expenditures.
As of November 27, 1999,January 22, 2000, approximately 6%4% of the 12 million shares of Company
stock authorized for purchase on the open market was still available for
purchase by the Company.
As of the filing date of this Form 10-Q, the Company's year 2000 remediation
program is complete and business operations have not been adversely affected by
year 2000 matters. Total expenditures by the Company on the year 2000 program
were just under $11 million.
Outlook
Comparable sales growth is moderating primarily due to exceptionally strong
results in last year's fourth quarter. Excluding the extra week in this year's
fourth quarter, comparable sales are expected to be roughly equal to those in
the prior year's fourth quarter.
Cost trends affecting gross margin in the areas of unfavorable plant floor
disruptions, employee training costs and cardboard costs and favorable plywood
costs as experienced in the third quarter are expected to continue into the
fourth quarter. By the first or second quarter of fiscal 2001, management
expects a significant improvement in these unfavorable cost areas not only due
to the absence of the initial start-up costs but also due to the benefits from
the process improvements.
Selling, general and administrative expenses as a percent of sales are expected
to remain below the prior year in the next quarter.
Interest expense is expected to remain substantially higher for the foreseeable
future.
No major price increases or decreases to purchased parts and raw materials are
expected in the near term.
The Company intends to pay off all borrowings under the $75 million unsecured
revolving credit line and the $150 million bridge loan facility by the end of
April using a new $250 million syndicated credit facility, the terms of which
are currently being negotiated. Total debt is not expected to be substantially
increased or decreased in the near future.
The Company expects capital expenditures of approximately $8 to $12 million
during the fourth quarter. Fiscal year 2001 capital expenditure estimates are
not yet available. The estimates are currently being developed and will include
the three companies acquired during this fiscal year. The Company does not
be purchasing shares from the date
of the mailing of the proxycurrently have any material commitments for capital expenditures.
The Company expects to LADD's shareholders through the
shareholder meeting date, but the Company otherwise expectscontinue to be in the open market for purchasing its
shares from time to time as changes in its stock price and other factors present
appropriate opportunities.
La-Z-Boy's cash on hand is generally lower
during the October through January part of the year. La-Z-Boy is prepared to
borrow funds in order to repurchase shares during this period if necessary. Such
borrowings would be expected to be from La-Z-Boy's credit lines and would be
expected to be repaid from cash flow from operations after the cyclical low
period is over.
11
The Company expects to meet its cash needs for pending acquisitions, capital expenditures, stock
repurchases and dividends during the remainder of the fiscal year 2000 and fiscal
year 2001 from cash generated by operations and borrowings under available lines
of credit.
Year 2000
The year 2000 issue arises from the use of two-digit date fields used in
computer programs, which may cause problems as the year changes from 1999 to
2000. These problems could cause disruptions of operations or processing of
transactions.
To address the year 2000 challenge, the Company establishedAs a year 2000 Program
Office guided by a steering committee consisting of senior executive management.
This office serves as the central coordination point for all year 2000
compliance efforts. The scoperesult of the Company's year 2000 project includes
information technology systems and non-information technology systems as well as
third party readiness. The Company is substantially on schedule with regard to
its internal plan and believes it is taking the steps necessary to minimize the
impact of the year 2000 challenge.
The Company's process for addressing the year 2000 consisted of a five-step
approach. The inventory phase was a comprehensive survey and collection of
information technology and non-information technology systems potentially
affected by the year 2000 issue. The assessment phase was a detailed analysis
and review of each identified system to determine whether or not the year 2000
issue may impact the system. The remediation phase included repair, replacement
or retirement of systems to eliminate year 2000 issues identified in the
assessment phase. The testing phase validated that each system functioned
properly using future date scenarios. The implementation phase consisted of
migrating remediated systems into production usage.
To date, the Company has not experienced any significant material mishaps
attributed to the year 2000 issue. Failure dates were identified for information
technology and non-information technology systems and these have been used as
year 2000 project deadlines. As projects have progressed, plans have been
adjusted accordingly taking into consideration failure dates.
The challenges the Company faces with regard to its information technology
systems include upgrading of operating systems, hardware and software and
modifying order entry and invoicing programs. The Company has taken all
reasonable steps necessary to ensure critical information technology systems
are compliant and compatible. The Company has completed the inventory,
assessment, remediation, testing and implementation phases for information
technology systems that handle approximately 97% of consolidated sales. For the
remaining information technology systems, the Company has completed the
inventory, assessment and remediation phases and has substantially completed the
testing and implementation phases. However, additional testing is needed to
confirm the year 2000 readiness of these systems and it may not be possible to
complete this testing by calendar year end. Contingency plans have been created
for these systems. These plans include manual processes and calculations,
alternative back-up systems and alternative payroll
12
calculations. The Company intends to continue testing for specific date
impacts through the end of calendar year 1999.
The primary challenges the Company faced with regard to its non-information
technology systems related to plant floor machinery and facility related items.
For these systems, the inventory, assessment, remediation, testing and
implementation phases have been completed. The Company believes these systems to
be compliant and compatible.
The table that follows provides more information about these systems.
La-Z-Boy Incorporated Year 2000 Information Technology and Non-Information Technology Critical Systems and Phase Completion Detail
Division Phase
IT and non-IT System Inventory Assessment Remediation Testing Implementation
- ------------------------------------ --------- ---------- ----------- ------- --------------
LA-Z-BOY--RESIDENTIAL,
BUSINESS FURNITURE GROUP
Order Processing / Invoicing C C C C C
Inventory Management / Purchasing C C C C C
Payroll / Human Resources C C C C C
Financials (AR, Cash, AP, GL, FA) C C C C C
Local Area Network C C C C C
Mainframe System C C C C C
Plant Floor Equipment C C C C C
Manufacturing Execution System C C C C C
ENGLAND/CORSAIR
Order Processing / Invoicing C C C C C
Inventory Management / Purchasing C C C C C
Payroll / Human Resources C C C C C
Financials (AR, Cash, AP, GL, FA) C C C C C
Mainframe System C C C C C
Local Area Network C C C C C
Plant Floor Equipment C C C C C
KINCAID
Order Processing / Invoicing C C C C C
Inventory Management / Purchasing C C C C C
Payroll / Human Resources C C C C C
Financials (AR, Cash, AP, GL, FA) C C C C C
AS/400 System C C C C C
Local Area Network C C C C C
Plant Floor Equipment C C C C C
BAUHAUS USA
Order Processing / Invoicing C C C C C
Inventory Management / Purchasing C C C C C
Payroll / Human Resources C C C C C
Financials (AR, Cash, AP, GL, FA) C C C C C
AS/400 System C C C C C
Plant Floor Equipment C C C C C
13
HAMMARY
Order Processing / Invoicing C C C C C
Inventory Management / Purchasing C C C C C
Payroll / Human Resources C C C C C
Financials (AR, Cash, AP, GL, FA) C C C C C
Local Area Network C C C C C
Mainframe System C C C C C
Plant Floor Equipment C C C C C
SAM MOORE
Order Processing / Invoicing C C C 12-31-1999* 12-31-1999*
Inventory Management / Purchasing - Uph. C C C 12-31-1999* 12-31-1999*
Inventory Management - Frame C C C 12-31-1999** 12-31-1999**
Payroll / Human Resources - Uph. C C C 12-31-1999* 12-31-1999*
Time and Attendance / Payroll - Frame C C C 12-31-1999** 12-31-1999**
Financials (AR, Cash, AP, GL, FA) C C C 12-31-1999* 12-31-1999*
Mid-Range Computer System C C C C C
Local Area Network C C C C C
Plant Floor Equipment C C C C C
CENTURION
Order Processing / Invoicing C C C C C
Inventory Management / Purchasing C C C C C
Payroll / Human Resources C C C C C
Financials (AR, Cash, AP, GL, FA) C C C C C
Local Area Network C C C C C
Plant Floor Equipment C C C C C
C - Phase has been completed as of the date of filing.
* - Original target completion dated 11-30-1999.
** - Original target completion dated 12-10-1999.
With respect to third party readiness, the Company is continuing to work with
customers, suppliers and service providers to prevent disruption of business
activities. The Company is using multiple approaches to determine compliance,
such as written communication, oral communication and website disclosure
reviews, based on the priority assigned to the third party. For critical third
parties, oral communications have been the primary means to obtain compliance
information. Based on communications with these third parties, the Company
believes that all critical third parties will be sufficiently prepared for the
year 2000 or the Company has made or is in the process of making alternative
plans.
While the Company believes that it is preparing adequately for all year 2000
concerns, the year 2000 computer date changeover will be a unique event that by
its nature involves many unknowns. Internal or external system failures may
still occur, and it is possible that some of them could have a material adverse
effect onLADD acquisition, the Company's assets, liabilities and
results of operations liquidityfor its fourth quarter and future periods will differ
substantially from those in comparable prior periods. Detailed information about
LADD's historical operations and financial condition. The Companyresults is continuingpublicly available in the
reports and proxy statements it has filed with the SEC. Additional information
about the LADD acquisition is contained in the Form S-4 registration statement
that La-Z-Boy filed with the SEC to assessregister the operational risks relatedstock to be issued to LADD
shareholders as merger consideration.
Subsequent to the year 2000 issue. TheLADD acquisition, the Company believes that the most likely worst case
scenario would be business interruptions caused by third party failures. The
Company has developed contingency plans for issues of concern relating to
critical third party providers. These plans include building inventory levels
and/or using alternate sources. The Company also has developed contingency plans
for its own information technology and non-information technology systems. For
the information technology systems, these plans
14
include advance printing of production information, alternative back-up systems,
possible delays in monthly closing cycles and rolling back of dates. For the
non-information technology systems, specifically plant floor equipment, the
contingency plans include forward advancement of dates and/or rolling back of
dates. The Company intends to refine its contingency plans through the end of
calendar year 1999. The Company estimates that total year 2000 related costs will be between $11 and $12 million. To date,reporting the Company has spent
approximately $10.5 million. Includedresults of
an additional business segment, a contract segment. The contract business
segment markets its products to dealers or directly to customers in the total estimated expenditures are
both remediationoffice,
hospitality and in some cases, enhancementhealthcare industries or improvement related costs
that cannot easilyother non residential "business"
furniture customers. LADD has a large contract division called American of
Martinsville (AOM). For segment disclosure purposes, AOM's operations will be
separated from remediation costs. The Company had
previously planned some of these enhancements or improvements and merely
accelerated them as a means to address year 2000 challenges.combined with the La-Z-Boy contract division (which presently is included under
"Other").
Item 3: Quantitative & Qualitative Disclosures About Market Risk
No information is presented in response to this item because the Company has no
material market risk relating to derivative financial instruments, derivative
commodity instruments or other financial instruments.
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
(c) On December 28, 1999, La-Z-Boy issued an aggregate 879,331 of
its common shares to the former owners of the Alexvale
companies, as part of the consideration paid to them in the
Alexvale acquisition. The shares issued in this transaction
were not registered under the Securities Act of 1933, in
reliance on the private placement exemption afforded by
Section 4(2) of the Securities Act and Rule 506 of SEC
Regulation D.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(2)Exhibit No. Description
(4) $150 million Credit Agreement dated as of January 28, 2000,
among La-Z-Boy Incorporated, The Banks Listed Therein and
Wachovia Bank, N.A. as agent (filed herewith).
(10) Amendment No. 1, dated as of December 13, 1999, to Agreement
and Plan of Merger dated as of September 28, 1999 among La-Z-Boy Incorporated, LZB
Acquisition Corp., and LADD Furniture, Inc. and La-Z-Boy Incorporated and LZB Acquisition
Corp. and the exhibits to such Agreement, followed by List of
Schedules to the Agreement (The schedules themselves are omitted
from this exhibit; however, La-Z-Boy Incorporated will provide a
copy of any omitted schedule to the Securities and Exchange
Commission upon its request.) This document is incorporatedInc (Incorporated by
reference to an exhibit to the La-Z-Boy IncorporatedLa-Z-Boy's Form 8-K
dated September 28, 1999 (Commission File No. 1-9656).S-4 Registration
Statement filed December 15, 1999; registration no. 333-92763)
(27) Financial Data Schedule (EDGAR only).
15
(99) La-Z-Boy Incorporated Replacement Plan for LADD Stock Options
(Incorporated by reference to an exhibit to La-Z-Boy's Form
S-8 Registration Statement filed January 28, 2000;
registration no. 333-95651)
(b) Reports on Form 8-K
A Form 8-K dated September 28,concerning the Company's second quarter financial results
as of October 23, 1999 was filed with the SEC on September 30,November 3, 1999. The Form 8-K reported the entry into the merger
agreement with LADD Furniture, Inc. and filed the agreement. The
Company's press release and the agreement were filed as exhibits to
the Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LA-Z-BOY INCORPORATED
(Registrant)
Date DecemberFebruary 7, 19992000 /s/Gene M. Hardy
----------------------------------------------------------
Gene M. Hardy
Secretary and Treasurer
EXHIBIT INDEX
(2)Exhibit Index
(4) $150 million Credit Agreement dated as of January 28, 2000,
among La-Z-Boy Incorporated, The Banks Listed Therein
and Wachovia Bank, N.A. as agent (filed herewith).
(10) Amendment No. 1, dated as of December 13, 1999, to
Agreement and Plan of Merger dated as of September 28, 1999 among La-Z-Boy Incorporated,
LZB Acquisition Corp., and LADD Furniture, Inc. and La-Z-Boy Incorporated and LZB Acquisition
Corp. and the exhibits to such Agreement, followed by List of
Schedules to the Agreement (The schedules themselves are omitted
from this exhibit; however, La-Z-Boy Incorporated will provide a
copy of any omitted schedule to the Securities and Exchange
Commission upon its request.) This document is incorporated(Incorporated
by reference to an exhibit to the La-Z-Boy IncorporatedLa-Z-Boy's Form 8-K
dated September 28, 1999 (Commission File No. 1-9656).S-4
Registration Statement filed December 15, 1999;
registration no. 333-92763)
(27) Financial Data Schedule (EDGAR only).
16
(99) La-Z-Boy Incorporated Replacement Plan for LADD Stock
Options (Incorporated by reference to an exhibit to
La-Z-Boy's Form S-8 Registration Statement filed January
28, 2000; registration no. 333-95651)