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 25, 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 October 25, 1997 - ------------------------------ ------------------------------- Common Shares, $1.00 par value 17,828,415
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 4, 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 Six Months Ended ------------------ ---------------- Oct. 25, Oct. 26 Oct. 25 Oct. 26 1997 1996 1997 1996 --------- -------- ------- -------- Cash Flows from Operating Activities Net income $16,822 $15,252 $18,548 $19,850 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 5,195 5,171 10,068 10,026 Change in receivables (52,888) (54,729) (3,986) (9,794) Change in inventories 6,416 1,912 (7,742) (11,016) Change in other assets and liab. 25,967 30,194 10,744 10,944 Change in deferred taxes (1,960) (878) (1,960) (878) --------- -------- -------- -------- Total adjustments (17,270) (18,330) 7,124 (718) --------- -------- -------- -------- Cash Provided by Operating Activities (448) (3,078) 25,672 19,132 Cash Flows from Investing Activities Proceeds from disposals of assets 76 608 392 721 Capital expenditures (5,775) (3,643) (11,343) (8,223) Change in other investments 159 179 (288) (5,442) --------- -------- -------- -------- Cash Used for Investing Activities (5,540) (2,856) (11,239) (12,944) Cash Flows from Financing Activities Short-term debt - - - - Long-term debt - - - - Retirements of debt (116) (64) (2,041) (3,004) Capital leases - - Capital lease principal payments (513) (513) (1,040) (1,078) Stock for stock option plans 1,091 376 3,103 1,846 Stock for 401(k) employee plans 283 285 686 668 Purchase of La-Z-Boy stock (6,973) (3,242) (9,397) (10,368) Payment of cash dividends (3,775) (2,981) (7,543) (6,463) ---------- -------- -------- --------- Cash Used for Financing Activities (10,003) (6,139) (16,232) (18,399) Effect of exch. rate changes on cash 62 159 98 107 --------- -------- -------- --------- Net change in cash and equivalents (15,929) (11,914) (1,701) (12,104) Cash and equiv. beginning of period 39,610 26,870 25,382 27,060 ---------- ------- -------- --------- Cash and equiv. at end of period $23,681 $14,956 23,681 14,956 ========= ======== ======== ========= Cash paid during period - Income taxes $6,222 $8,513 $7,663 $10,770 - Interest $955 $1,137 $1,794 $1,970 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 1997 Annual Report filed with the Securities and Exchange Commission. The financial information included herein, other than the consolidated 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 balance sheet as of October 25, 1997 has been prepared on a basis consistent with but does not include all the disclosures contained 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 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.(a) The Company's strong financial position is reflected in the debt to capital percentage of 14% and a current ratio of 3.2 to 1 at the end of the Second 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 Second quarter, the debt to capital percentage was 16% and the current ratio was 3.2 to 1. As of October 25, 1997, there was $63 million of unused lines of credit available under several credit arrangements. Approximately 30% 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 5. Other Information - -------------------------- On October 29, 1997, The Board of Directors of La-Z-Boy Incorporated announced that Gerald L. Kiser has been named President and Chief Operating Officer of the Company. The Board of Directors named Patrick H. Norton to Chairman of the Board of the company. Mr. Kiser was promoted from Executive Vice President and Chief Operating Officer. Mr. Norton will continue to direct all sales and marketing activities. For Further detail, see attached exhibit 99.(b) Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a)(3i) Restated Articles of incorporation as filed with the state of Michigan, on September 18,1997. (3ii) By-Laws of la-Z-Boy Incorporated (27) Financial Data Schedule (EDGAR only). (99) (a) News Release and Financial Information Release: re Actual second quarter results and Management Discussion dated November 4, 1997 (filed herewith). (99) (b) News Release: re Changes in Management of Registrant dated October 29, 1997. 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 25, 1997 to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY INCORPORATED (Registrant) /s/G.M. Hardy Date November 4, 1997 ----------------------------- Gene M. Hardy Secretary and Treasurer (Principal Accounting Officer)