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 July 26, 1997 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 None 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 July 26, 1997 - ------------------------------ ---------------------------- Common Shares, $1.00 par value 17,974,876
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 August 5, 1997 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 ------------------ July 26, July 27 1997 1996 --------- -------- Cash Flows from Operating Activities Net income $1,726 $4,598 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 4,873 4,855 Change in receivables 48,902 44,935 Change in inventories (14,158) (12,928) Change in other assets and liab. (15,223) (19,250)* Change in deferred taxes - - --------- -------- Total adjustments 24,394 17,612 * --------- -------- Cash Provided by Operating Activities 26,120 22,210 * Cash Flows from Investing Activities Proceeds from disposals of assets 316 113 Capital expenditures (5,568) (4,580) Change in other investments (447) (5,621) ---------- -------- Cash Used for Investing Activities (5,699) (10,088)* Cash Flows from Financing Activities Short-term debt - - Long-term debt - - Retirements of debt (1,925) (2,940) Capital leases - - Capital lease principal payments (527) (565) Stock for stock option plans 2,012 1,470 Stock for 401(k) employee plans 403 383 Purchase of La-Z-Boy stock (2,424) (7,126) Payment of cash dividends (3,768) (3,482) ---------- -------- Cash Used for Financing Activities (6,229) (12,260)* Effect of exch. rate changes on cash 36 (52)* ---------- -------- Net change in cash and equivalents 14,228 (190) Cash and equiv. at beginning of period 25,382 27,060 ---------- -------- Cash and equiv. at end of period $39,610 $26,870 ========== ======== Cash paid during period - Income taxes $1,441 $2,257 - Interest $839 $833 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. * These numbers have changed slightly from what was reported in the first quarter last year. They have been corrected as a reclass error.
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 1997 Annual Report filed with the Securities and Exchange Commission. The financial information included herein, other than the consolidated condensed balance sheet as of April 26, 1997, 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 July 26, 1997 has been derived from, but does not include all the disclosures contain- ed in, the audited consolidated financial statements for the year ended April 26, 1997. 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 25, 1998. 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 La-Z-Boy's sales and profits historically have been weakest in the first quarter of the fiscal year due to the Company's two-week vacation shutdown which coincides with the slowest sales period. Therefore, first quarter comparison to the prior year's first quarter may not be indicative of trends that will continue in the remaining quarters of the fiscal year. 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 14% and a current ratio of 3.9 to 1 at the end of the first quarter. At April 26, 1997, the debt to capital percentage was 15% and the current ratio was 3.5 to 1. At the end of the preceding year's first quarter, the debt to capital percentage was 16% and the current ratio was 3.9 to 1. As of July 26, 1997, there was $62 million of unused lines of credit available under several credit arrangements. Approximately 35% of the 4 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 a Vote of Security Holders - ------------------------------------------------------------ The Annual Meeting of Shareholders of La-Z-Boy Incorporated was held on July 28, 1997, for the purposes of electing three members to the board of directors as well as considering and acting upon proposals to approve the La-Z-Boy Incorporated 1997 Incentive Stock Option Plan and the 1997 Restricted Share Plan. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities and Exchange Act of 1934 and there was no solicitation in opposition to Management's solicitations. The Shareholders elected all of Management's nominees for directors as listed in the proxy statement and approved the La-Z-Boy Incorporated 1997 Incentive Stock Option Plan and the 1997 Restricted Share Plan. The distribution of shareholders' votes was as follows: Shares Voted Shares Election of Directors: In Favor Withheld ------------- ------------- Lorne G. Stevens 16,258,184 247,157 Patrick H. Norton 16,096,638 408,703 Frederick H. Jackson 16,200,120 305,221 Adoption of the La-Z-Boy Incorporated 1997 Incentive Stock Option Plan: Shares Voted in Favor 14,919,016 Shares Voted Against 1,283,984 Abstentions 302,341 Adoption of the La-Z-Boy Incorporated 1997 Restricted Share Plan: Shares Voted in Favor 15,155,433 Shares Voted Against 1,034,844 Abstentions 315,064 Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a)(10i) La-Z-Boy Incorporated 1997 Incentive Stock Option Plan (filed as Exhibit A to the registrant's proxy (Commission File No. 1-9656) dated June 27, 1997)is incorporated herein by reference. (10ii) La-Z-Boy Incorporated 1997 Restricted Share Plan (filed as Exhibit B to the registrant's proxy (Commission File No. 1-9656) dated June 27, 1997)is incorporated herein by reference. (27) Financial Data Schedule (EDGAR only). (99) News Release and Financial Information Release: re Actual first quarter results and Management Discussion dated August 5, 1997 (filed herewith). (b) An 8-K was filed on May 13, 1997 to disclose an exchange of 33,718 shares of La-Z-Boy Incorporated Common Shares for 1,078,976 ordinary shares of Centurion Furniture plc, a corporation incorporated in England and Wales, not already owned by the Company. This exchange brought the registrant's ownership in Centurion Furniture, plc to 99.6%. 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 July 26, 1997 to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY INCORPORATED (Registrant) /s/G.M. Hardy Date August 5, 1997 ----------------------------- Gene M. Hardy Secretary and Treasurer (Principal Accounting Officer)