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 26, 1996 COMMISSION FILE NUMBER 1-9656 LA-Z-BOY INCORPORATED (Exact name of registrant as specified in its charter) MICHIGAN 38-0751137 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1284 North Telegraph Road, Monroe, Michigan 48162-3390 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (313) 241-4414 LA-Z-BOY CHAIR COMPANY 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 26, 1996 Common Shares, $1.00 par value 18,135,052
Part I. Financial Information The Consolidated Balance Sheet and Consolidated Statement of Income required for Part I are contained in the Registrant's Financial Information Release dated November 12, 1996 and are incorporated herein by reference.
LA-Z-BOY INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Unaudited, dollar amounts in thousands) Three Months Ended Six Months Ended ------------------- ------------------ Oct. 26, Oct. 28 Oct. 26, Oct. 28, 1996 1995 1996 1995 -------- -------- ------- -------- Cash Flows from Operating Activities Net income $15,252 $14,256 $19,850 $17,431 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 5,171 4,735 10,026 9,419 Change in receivables (54,729) (51,526) (9,794) (13,677) Change in inventories 1,912 1,163 (11,016) (3,230) Change in other assets and liab. 30,194 21,921 10,944 6,075 Change in deferred taxes (878) (889) (878) (889) --------- -------- -------- -------- Total adjustments (18,330) (24,596) (718) (2,302) --------- -------- -------- -------- Cash Provided by Operating Activities (3,078) (10,340) 19,132 15,129 Cash Flows from Investing Activities Proceeds from disposals of assets 608 645 721 778 Capital expenditures (3,643) (6,079) (8,223) (9,239) Change in other investments 179 129 (5,442) 1,088 ---------- -------- ------- ------- Cash Used for Investing Activities (2,856) (5,305) (12,944) (7,373) Cash Flows from Financing Activities Short-term debt - - - - Long-term debt - - - - Retirements of debt (64) (6,479) (3,004) (10,551) Capital leases - 1,161 - 1,161 Capital lease principal payments (513) (560) (1,078) (1,077) Stock for stock option plans 376 807 1,846 2,075 Stock for 401(k) employee plans 285 338 668 643 Purchase of La-Z-Boy stock (3,242) (41) (10,368) (4,433) Payment of cash dividends (2,981) (3,505) (6,463) (6,660) ---------- -------- -------- -------- Cash Used for Financing Activities (6,139) (8,279) (18,399) (18,842) Effect of exch. rate changes on cash 159 60 107 (18) ---------- -------- -------- -------- Net change in cash and equivalents (11,914) (23,864) (12,104) (11,104) Cash and equiv. at beginning of period 26,870 39,808 27,060 27,048 ---------- -------- -------- -------- Cash and equiv. at end of period $14,956 $15,944 $14,956 $15,944 ========== ======== ======== ======== Cash paid during period - Income taxes $8,513 $7,154 $10,770 $8,811 - Interest $1,137 $1,401 $1,970 $2,511 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 Condensed Consolidated Financial Statements are an integral part of these statements.
LA-Z-BOY INCORPORATED AND OPERATING DIVISIONS NOTES TO CONDENSED 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 1996 Annual Report filed with the Securities and Exchange Commission. The financial information included herein, other than the consolidated condensed balance sheet as of April 27, 1996, has been prepared by management without audit by independent certified public accountants who do not express an opinion thereon. The consolidated condensed balance sheet as of October 26, 1996 has been derived from, but does not include all the disclosures contained in, the audited consolidated financial statements for the year ended April 27, 1996. 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 26, 1997. 3. Commitments and Contingencies There has been no significant change from the prior fiscal year end audited financial statements. LA-Z-BOY INCORPORATED AND OPERATING DIVISIONS MANAGEMENT DISCUSSION Due to the cyclical nature of the Company's business, comparison of operations between the most recently completed quarter and the immediate preceding quarter would not be meaningful and could be misleading to the reader of these financial statements. For further Management Discussion, see attached Exhibit 99 The Company's strong financial position is reflected in the debt to capital percentage of 16% and a current ratio of 3.2 to 1 at the end of the second quarter. At April 27, 1996, the debt to capital percentage was 17% and the current ratio was 3.5 to 1. At the end of the preceding year's second quarter, the debt to capital percentage was 18% and the current ratio was 3.3 to 1. As of October 26, 1996, there was $87 million of unused lines of credit available under several credit arrangements. Approximately 26% of the 3 million shares of Company stock authorized for purchase on the open market are still available for purchase by the Company. The Company plans to be in the market for its shares as changes in its stock price and other factors present appropriate opportunities. PART II. OTHER INFORMATION Item 4. Submission of Matters to Vote of Security Holders At the annual meeting of shareholders held on July 29, 1996, three directors were elected, the amendment and restatement of the Company's 1993 Performance-Based Stock Plan was approved, and the proposal to adopt an amendment to the Company's Articles of Incorporation to change the Company's name to "La-Z-Boy Incorporated", was approved. The distribution of shareholders' votes was as follows: Shares Voted Shares Election of Directors: In Favor Withheld ------------ -------- Charles T. Knabusch 15,880,885 278,054 John F. Weaver 15,881,210 277,729 Warren W. Gruber 15,854,284 304,655 James W. Johnston 15,883,390 275,549 Amendment and restatement of the 1993 Performance-Based Stock Plan: Shares Voted in Favor 15,586,901 Shares Voted Against 413,245 Abstentions 158,793 Adoption of the Amendment of Articles of Incorporation to Change the Company name to "La-Z-Boy Incorporated": Shares Voted in Favor 15,981,422 Shares Voted Against 108,389 Abstentions* 2,196,710 * Abstentions includes 2,127,582 shares that were not voted which, under Michigan law on amendments to the Articles of Incorporation, must be counted. Item 6. Exhibits and Reports on Form 8-K (a) (3i) Restated Articles of incorporation as filed with the state of Michigan, on September 18, 1996, (3ii) By-laws of La-Z-Boy Incorporated (27) Financial Data Schedule (EDGAR only) (99) News Release and Financial Information Release: re Actual second quarter results and Management Discussion dated November 12, 1996. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused the Quarterly Report on Form 10-Q for the quarter ended October 26, 1996 to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY INCORPORATED (Registrant) /s/ James J. Korsnack Date November 12, 1996 James J. Korsnack Corporate Controller