Posted on 08/09/2004 4:19:36 PM PDT by lelio
Furniture giant La-Z-Boy Inc. announced plans to close three manufacturing plants and idle a fourth, laying off at least 645 workers and taking a $13 million pretax charge against earnings this year as it accelerates its shift to more foreign production.
La-Z-Boy said it was taking the actions at its wood-furniture factories in the wake of preliminary U.S. antidumping tariffs against Chinese producers of wood bedroom furniture. Those tariffs were too low to alter the industry's domestic manufacturing glut, the company said.
La-Z-Boy said it plans to cease production at its Pennsylvania House plant in Lewisburg, Pa., and at a nearby dining room chair assembly plant in White Deer, Pa., late this year. Closing those plants and associated warehouses in Pennsylvania will result in layoffs affecting 425, or 15 percent of the company's employees who produce wood furniture, La-Z-Boy said.
In addition, La-Z-Boy plans to idle by mid-September a Kincaid wood-furniture plant in Hudson, N.C., that employs 120. La-Z-Boy said layoffs of those workers would be temporary until the company can determine how much domestic demand it needs for wood products.
La-Z-Boy will also close a Booneville, Miss., plant producing England brand upholstered furniture and a warehouse that had recently produced Clayton Marcus furniture. The England plant employed 100. A La-Z-Boy spokesman wasn't immediately available to provide the total number of workers at warehouses that will be closed.
La-Z-Boy said its fiscal first-quarter earnings, also released Monday, included a non-cash charge of $10.4 million, or 12 cents a share, related to the restructuring. For the full year, restructuring charges are expected to be $13 million before taxes, or 16 cents a share after taxes, La-Z-Boy said.
"Though we remain committed to limited domestic production where design and price points allow us to be competitive, we are intensifying our effort to be a cost competitive global manufacturer and sourcing company," said La-Z-Boy president and chief executive Kurt Darrow.
La-Z-Boy swung to a loss of $3.5 million, or 7 cents a share in the first quarter ended July 26, compared with net income of $5.8 million, or 11 cents a share, in the same period a year earlier. Sales rose 3.3 percent to $466 million, but poor plant utilization and rising raw material costs hurt operating margins, the company said.
Besides the restructuring charge of 12 cents a share, the latest quarter's results included an after-tax loss of 4 cents a share related to a change in accounting. Results a year earlier included 7 cents a share in restructuring charges.
Excluding these items, earnings came to 9 cents a share. Analysts, on average, had expected earnings of 12 cents a share, according to Thomson First Call.
La-Z-Boy, based in Monroe, Mich., is the second-largest U.S. furniture company after Furniture Brands International Inc. In addition to its namesake brand recliners and other upholstered furniture, the company makes furniture under such brands as Pennsylvania House, Kincaid, Hammary and Lea. Wood-furniture generates about 23 percent of annual sales and upholstered products generate about 77 percent.
The company released its earnings report Monday after financial markets closed.
Shares of La-Z-Boy closed at $16.66, up 24 cents, or 1.5 percent, on the New York Stock Exchange. The stock was down 16 cents, or 1 percent, at $16.50 in after-hours trading.
Did they lay off the raccoons, too?
Foreign production means poorer quality.
If that's what consumers want...
True, not that theirs was that great in the first place.
I was told I couldn't receive it till late August because the entire plant closes in July for vacation. (maybe the saleslady said the plant closes for 2 weeks, not sure). But in mid-September, Oct, and Nov, I was still calling to find out when the chair would be delivered. We got it before Christmas.
Hey, you must be the guy in India who got Willie Green's gig when it was outsourced (c8
"We were told that we never even cut the wood until the chair was ordered."
That coincides with what the saleslady told me, and I thought it was just another excuse for why it took so long to get the chair. (Which by the way, my husband loves!! The leather is like buttah!)
We have 20-year-old Pennsylvania House cherry furniture - pricy but excellent. About ten years ago my husband predicted that furniture like it would become too expensive to make and sell in the US and we'd all be stuck with IKEA and Chinese assemble yourself stuff. When the sofas gave in to kids and dogs, I didn't even look at Pennsylvania House but we found some really nice leather ones made in Arizona. Still cost $3000 each.
No, they'll all be masseuses.
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