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 JANUARY 24, 1998 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 (734) 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 January 24, 1998 - ------------------------------ ------------------------------- Common Shares, $1.00 par value 17,856,292
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 February 3, 1998 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 Nine Months Ended ------------------ ----------------- Jan. 24, Jan. 25 Jan. 24 Jan. 25 1998 1997 1998 1997 --------- -------- ------- -------- Cash Flows from Operating Activities Net income $11,459 $9,801 $30,007 $29,651 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 5,140 5,189 15,208 15,215 Change in receivables 22,393 37,106 18,407 27,312 Change in inventories (2,485) (1,978) (10,227) (12,994) Change in other assets and liab. (8,607) (11,979) 2,137 (1,035) Change in deferred taxes (2,553) (439) (4,513) (1,317) --------- -------- -------- -------- Total adjustments 13,888 27,899 21,012 27,181 --------- -------- -------- -------- Cash Provided by Operating Activities 25,347 37,700 51,019 56,832 Cash Flows from Investing Activities Proceeds from disposals of assets 1,108 (167) 1,500 554 Capital expenditures (4,218) (4,580) (15,561) (12,803) Change in other investments (419) (571) (707) (6,013) --------- -------- -------- -------- Cash Used for Investing Activities (3,529) (5,318) (14,768) (18,262) Cash Flows from Financing Activities Short-term debt - - - - Long-term debt - - - - Retirements of debt (2,428) (64) (4,469) (3,068) Capital leases - - - - Capital lease principal payments (507) (509) (1,547) (1,587) Stock for stock option plans 2,299 1,005 5,402 2,851 Stock for 401(k) employee plans 417 276 1,103 944 Purchase of La-Z-Boy stock (3,086) (6,993) (12,483) (17,361) Payment of cash dividends (3,749) (3,446) (11,292) (9,909) ---------- -------- -------- --------- Cash Used for Financing Activities (7,054) (9,731) (23,286) (28,130) Effect of exch. rate changes on cash (233) (53) (135) 54 --------- -------- -------- --------- Net change in cash and equivalents 14,531 22,598 12,830 10,494 Cash and equiv. beginning of period 23,681 14,956 25,382 27,060 ---------- ------- -------- --------- Cash and equiv. at end of period $38,212 $37,554 38,212 37,554 ========= ======== ======== ========= Cash paid during period - Income taxes $14,345 $12,461 $22,008 $23,231 - Interest $1,016 $948 $2,810 $2,918 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 January 24, 1998 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 13% and a current ratio of 3.3 to 1 at the end of the third 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 Third quarter, the debt to capital percentage was 16% and the current ratio was 3.4 to 1. As of January 24, 1998, there was $63 million of unused lines of credit available under several credit arrangements. Cash flow from the change in receivables was about $15 million less in the third quarter this year vs. last year. This is primarily due to differences in the timing and volume of shipments. At the end of January this year there were substantially more dollars outstanding (not yet due) and the amounts past due were actually less than the prior year. Approximately 29% 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 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (27) Financial Data Schedule (EDGAR only). (99) (a) News Release and Financial Information Release: re Actual third quarter results and Management Discussion dated February 3, 1997 (filed herewith). 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 January 24, 1998 to be signed on its behalf by the undersigned thereunto duly authorized. LA-Z-BOY INCORPORATED (Registrant) /s/G.M. Hardy Date February 3, 1998 ----------------------------- Gene M. Hardy Secretary and Treasurer (Principal Accounting Officer)