La-Z-Boy Announces Moves to Strengthen and Re-Align Business

La-Z-Boy Incorporated (“La-Z-Boy” or the “Company”), a global leader in residential furniture, today announced initiatives designed to strengthen the company and position it to thrive in the new external environment, marked by COVID-19. Effective immediately, the company will reduce its global workforce by about 10%, or approximately 850 employees, across its manufacturing, retail and corporate locations, including the closure of its Newton, Mississippi upholstery manufacturing facility. Production will be shifted to available capacity at the company’s Dayton, Tennessee, Neosho, Missouri, and Siloam Springs, Arkansas plants. These changes are expected to leverage efficiencies across the business, improve competitiveness and position the company to drive long-term value for all stakeholders.

The company’s Newton upholstery plant, built in 1960, employs about 300 people, accounts for approximately 10% of the La-Z-Boy branded business total upholstery production, and manufactures La-Z-Boy recliners, motion sofas and classics (high-leg recliners). The Newton-based integrated internal supply functions will remain in operation. Approximately 170 individuals work across these areas and will remain with the company.

Kurt L. Darrow, Chairman, President and Chief Executive Officer of La-Z-Boy Incorporated, said: “The COVID-19 pandemic has had a far-reaching impact. We responded quickly in March with our COVID-19 Action Plan to ensure the health, safety and well-being of our employees, customers and the communities in which we operate, while managing short-term liquidity. As a result, we are confident we will emerge from the crisis with strength and remain a leader in the industry. Since restarting production at the majority of our plants at the end of April, we have steadily increased production and continue to bring back more employees to meet demand. As more states open and allow our retail partners to re-engage with their customers, we anticipate a stepped process of increasing production and bringing additional employees back to work.”

Darrow added, “However, it is now appropriate to leverage the efficiencies we have created across the company and right size our business for the long term given the impact of COVID-19 on the state of the economy, with wide-sweeping unemployment levels and the uncertain timing of a full economic recovery. With approximately 4.5 million square feet of remaining highly productive manufacturing space across the La-Z-Boy enterprise, we are confident we will continue to provide excellent service to our dealers and their customers. Still, these are difficult decisions to make and we deeply regret the impact they will have on those employees who are affected. We greatly appreciate the contribution of each employee and thank them for their years of dedicated service.”

La-Z-Boy expects to incur approximately $5 million to $7 million in fiscal 2021 of one-time pre-tax charges related to these moves, the majority of which will be realized in the first quarter and will be excluded from Non-GAAP results.

The company plans to release its fiscal 2020 fourth-quarter and full-year results after the close of market on June 23, 2020.

About La-Z-Boy

La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew®, Hammary®, and Kincaid®. The company-owned Retail segment includes 155 of the 355 La-Z-Boy Furniture Galleries® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture. The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 355 stand-alone La-Z-Boy Furniture Galleries® stores and 559 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at http://www.la-z-boy.com/.

Contact:

Kathy Liebmann – kathy.liebmann@la-z-boy.com – (734) 241-2438

Source: La-Z-Boy Incorporated