MONROE, Mich. - Storm clouds were brewing outside the headquarters of La-Z-Boy, Inc., here yesterday just as top executives began explaining the huge fiscal first-quarter net loss that the nation's No. 1 furniture maker had posted hours earlier.
But nary a complaint was heard from shareholders at the company's annual meeting as they heard a detailed account of the positive changes La-Z-Boy has made over the last year, and how the company is poised to take quick advantage of a turnaround in the U.S. economy.
``We are extremely excited about our future,'' said Gerald Kiser, La-Z-Boy president and chief executive officer. ``... We are not what we were a year ago.''
The company, he said, is no longer 15 separate companies with their own agendas, but rather two groups working for a common purpose. It reported $2 billion in annual sales.
La-Z-Boy has become a leaner company with strong brand names, a successful new ad slogan, manageable debt, and a strong chance to improve its operating margins this fiscal year, he explained.
After the meeting, Mr. Kiser said this summer's sales results have been mixed, with La-Z-Boy experiencing a surprising surge in upholstered furniture like its well-known recliners, but decreases in its wooden furniture sets.
“I think it's a sign that people are likely to replace a favorite piece of furniture in their home, but at this time they are reluctant to commit to a $20,000 dining room set,'' Mr. Kiser said.
However, the fact that people are still furniture shopping at all - La-Z-Boy upholstered-furniture sales rose 19 percent in the first fiscal quarter, which ended July 27 - despite the lag in the economy since Sept. 11 is very encouraging to the furniture industry, he said.
Kurt Darrow, president of La-Z-Boy's residential division, said the company has opened 20 resdesigned stores and is converting existing showrooms to the new format.
It plans to remodel 240 sites and build on 120 vacant sites. The Toledo store on Monroe Street is expected to be converted within five months, Mr. Darrow said.
La-Z-Boy has new products and designs to unveil at the annual furniture show in October in Highpoint, N.C., including a new line of chairs that will recline, massage, and inflate/deflate at the touch of a button, Mr. Darrow said.
Mr. Kiser expects the company to have solid quarters for the rest of the year.
La-Z-Boy's would have had a profit for the first quarter had the company not taken a large write-down for accounting rules that began Jan. 1 regarding the companies it bought.
The write-down totaled $59.8 million, or $1.01 a share, which produced a quarterly net loss of $40.7 million, or 69 cents a share, compared with a profit of $2.8 million, or 5 cents a share, for the same period a year earlier. Without the write-down, La-Z-Boy would have earned $19.1 million, or 32 cents a share, in what is usually a slow sales period.
The company's stock closed yesterday at $22.60, up $1.17 a share, on the New York Stock Exchange.
After the shareholder meeting, the firm declared a quarterly cash dividend of 10 cents per share, payable Sept. 10 to shareholders of record Aug. 26. Its directors also authorized the repurchase of up to an additional 6 million shares of common stock to complement a previous authorized stock repurchase of up to 4 million shares in February.