##### 



NEWS RELEASE
 Contact: Kathy Liebmann
    
    (734) 241-2438
    
    kathy.liebmann@la-z-boy.com
 LA-Z-BOY REPORTS FISCAL 2008 SECOND-QUARTER RESULTS
   Upholstery




---



##### 



Casegoods
   Retail




---



##### 



Restructuring
  Businesses Held for Sale
  Balance Sheet
   Business Outlook
  Forward-looking Information




---



##### 



http://www.la-z-boy.com/about/investorRelations/sec_filings.aspx
 http://www.la-z-boy.com/about/investorRelations/IR_email_alerts.aspx
 Background Information
  In Furniture http://www.la-z-boy.com/




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##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
 Second Quarter EndedPercent of Sales(Unaudited, amounts in thousands, except
    
    
    
    
    
    
    
    
    
    % Overper share data)
    
    10/27/07
    
    
    10/28/06
    
    
    (Under)
    
    
    10/27/07
    
    
    10/28/06Sales
    
    $
    365,434
    
    
    $
    414,614
    
    
    
    -11.9
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of salesCost of goods sold
    
    
    266,658
    
    
    
    306,351
    
    
    
    -13.0
    %
    
    
    73.0
    %
    
    
    73.9
    %Restructuring
    
    
    518
    
    
    
    (400
    )
    
    
    -229.5
    %
    
    
    0.1
    %
    
    
    -0.1
    %Total cost of sales
    
    
    267,176
    
    
    
    305,951
    
    
    
    -12.7
    %
    
    
    73.1
    %
    
    
    73.8
    %Gross profit
    
    
    98,258
    
    
    
    108,663
    
    
    
    -9.6
    %
    
    
    26.9
    %
    
    
    26.2
    %Selling, general and
administrative
    
    
    98,098
    
    
    
    99,887
    
    
    
    -1.8
    %
    
    
    26.8
    %
    
    
    24.1
    %Write-down of intangibles
    
    
    5,809
    
    
    
    
    
    
    
    N/M
    
    
    
    1.6
    %
    
    
    Restructuring
    
    
    449
    
    
    
    2,265
    
    
    
    -80.2
    %
    
    
    0.1
    %
    
    
    0.5
    %Operating income (loss)
    
    
    (6,098
    )
    
    
    6,511
    
    
    
    -193.7
    %
    
    
    -1.7
    %
    
    
    1.6
    %Interest expense
    
    
    2,120
    
    
    
    2,614
    
    
    
    -18.9
    %
    
    
    0.6
    %
    
    
    0.6
    %Other income, net
    
    
    1,374
    
    
    
    1,348
    
    
    
    1.9
    %
    
    
    0.4
    %
    
    
    0.3
    %Income (loss) from continuing
operations before income taxes
    
    
    (6,844
    )
    
    
    5,245
    
    
    
    -230.5
    %
    
    
    -1.9
    %
    
    
    1.3
    %Income tax expense (benefit)
    
    
    (3,192
    )
    
    
    1,949
    
    
    
    -263.8
    %
    
    
    46.6
    %*
    
    
    37.2
    %*Income (loss) from continuing
operations
    
    
    (3,652
    )
    
    
    3,296
    
    
    
    -210.8
    %
    
    
    -1.0
    %
    
    
    0.8
    %Loss from discontinued
operations (net of tax)
    
    
    (6,282
    )
    
    
    (1,342
    )
    
    
    -368.1
    %
    
    
    -1.7
    %
    
    
    -0.3
    %Net income (loss)
    
    $
    (9,934
    )
    
    $
    1,954
    
    
    
    -608.4
    %
    
    
    -2.7
    %
    
    
    0.5
    %Basic average shares
    
    
    51,410
    
    
    
    51,373Basic income (loss) from
continuing operations per share
    
    $
    (0.07
    )
    
    $
    0.06Discontinued operations per share
(net of tax)
    
    $
    (0.12
    )
    
    $
    (0.02
    )Basic net income (loss) per share
    
    $
    (0.19
    )
    
    $
    0.04Diluted average shares
    
    
    51,410
    
    
    
    51,639Diluted income (loss) from
continuing operations per share
    
    $
    (0.07
    )
    
    $
    0.06Discontinued operations per share
(net of tax)
    
    $
    (0.12
    )
    
    $
    (0.02
    )Diluted net income (loss) per share
    
    $
    (0.19
    )
    
    $
    0.04Dividends paid per share
    
    $
    0.12
    
    
    $
    0.12
 
 *
    
    As a percent of pretax income, not sales.N/M
    
    = not meaningful




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##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
 Six Months EndedPercent of Sales(Unaudited, amounts in thousands, except
    
    
    
    
    
    
    
    
    
    % Overper share data)
    
    10/27/07
    
    
    10/28/06
    
    
    (Under)
    
    
    10/27/07
    
    
    10/28/06Sales
    
    $
    709,830
    
    
    $
    808,537
    
    
    
    -12.2
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of salesCost of goods sold
    
    
    525,801
    
    
    
    602,359
    
    
    
    -12.7
    %
    
    
    74.1
    %
    
    
    74.5
    %Restructuring
    
    
    3,079
    
    
    
    (400
    )
    
    
    -869.8
    %
    
    
    0.4
    %
    
    
    Total cost of sales
    
    
    528,880
    
    
    
    601,959
    
    
    
    -12.1
    %
    
    
    74.5
    %
    
    
    74.5
    %Gross profit
    
    
    180,950
    
    
    
    206,578
    
    
    
    -12.4
    %
    
    
    25.5
    %
    
    
    25.5
    %Selling, general and
administrative
    
    
    192,606
    
    
    
    194,570
    
    
    
    -1.0
    %
    
    
    27.1
    %
    
    
    24.1
    %Write-down of intangibles
    
    
    5,809
    
    
    
    
    
    
    
    N/M
    
    
    
    0.8
    %
    
    
    Restructuring
    
    
    1,569
    
    
    
    2,265
    
    
    
    -30.7
    %
    
    
    0.2
    %
    
    
    0.3
    %Operating income (loss)
    
    
    (19,034
    )
    
    
    9,743
    
    
    
    -295.4
    %
    
    
    -2.7
    %
    
    
    1.2
    %Interest expense
    
    
    4,217
    
    
    
    5,140
    
    
    
    -18.0
    %
    
    
    0.6
    %
    
    
    0.6
    %Other income, net
    
    
    2,822
    
    
    
    1,618
    
    
    
    74.4
    %
    
    
    0.4
    %
    
    
    0.2
    %Income (loss) from continuing
operations before income taxes
    
    
    (20,429
    )
    
    
    6,221
    
    
    
    -428.4
    %
    
    
    -2.9
    %
    
    
    0.8
    %Income tax expense (benefit)
    
    
    (8,235
    )
    
    
    1,833
    
    
    
    -549.3
    %
    
    
    40.3
    %*
    
    
    29.5
    %*Income (loss) from continuing
operations
    
    
    (12,194
    )
    
    
    4,388
    
    
    
    -377.9
    %
    
    
    -1.7
    %
    
    
    0.5
    %Loss from discontinued
operations (net of tax)
    
    
    (6,434
    )
    
    
    (139
    )
    
    
    N/M
    %
    
    
    -0.9
    %
    
    
    Net income (loss)
    
    $
    (18,628
    )
    
    $
    4,249
    
    
    
    -538.4
    %
    
    
    -2.6
    %
    
    
    0.5
    %Basic average shares
    
    
    51,395
    
    
    
    51,580Basic income (loss) from
continuing operations per share
    
    $
    (0.24
    )
    
    $
    0.08Discontinued operations per share
(net of tax)
    
    $
    (0.12
    )
    
    
    Basic net income (loss) per share
    
    $
    (0.36
    )
    
    $
    0.08Diluted average shares
    
    
    51,395
    
    
    
    51,806Diluted income (loss) from
continuing operations per share
    
    $
    (0.24
    )
    
    $
    0.08Discontinued operations per share
(net of tax)
    
    $
    (0.12
    )
    
    
    Diluted net income (loss) per share
    
    $
    (0.36
    )
    
    $
    0.08Dividends paid per share
    
    $
    0.24
    
    
    $
    0.24
 
 *
    
    As a percent of pretax income, not sales.N/M
    
    = not meaningful




---



##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
 Increase/(Decrease)(Unaudited, amounts in thousands)
    
    10/27/07
    
    
    10/28/06
    
    
    Dollars
    
    
    Percent
    
    
    4/28/07Current assetsCash and equivalents
    
    $
    32,692
    
    
    $
    20,529
    
    
    $
    12,163
    
    
    
    59.2
    %
    
    $
    51,721Receivables, net
    
    
    215,275
    
    
    
    253,519
    
    
    
    (38,244
    )
    
    
    -15.1
    %
    
    
    230,399Inventories, net
    
    
    190,985
    
    
    
    237,885
    
    
    
    (46,900
    )
    
    
    -19.7
    %
    
    
    197,790Deferred income taxescurrent
    
    
    14,337
    
    
    
    16,043
    
    
    
    (1,706
    )
    
    
    -10.6
    %
    
    
    17,283Assets of discontinued operations
    
    
    3,634
    
    
    
    
    
    
    
    3,634
    
    
    
    N/M
    
    
    
    24,278Other current assets
    
    
    27,073
    
    
    
    29,076
    
    
    
    (2,003
    )
    
    
    -6.9
    %
    
    
    19,327Total current assets
    
    
    483,996
    
    
    
    557,052
    
    
    
    (73,056
    )
    
    
    -13.1
    %
    
    
    540,798Property, plant and equipment, net
    
    
    180,912
    
    
    
    204,904
    
    
    
    (23,992
    )
    
    
    -11.7
    %
    
    
    183,218Deferred income taxeslong term
    
    
    25,608
    
    
    
    3,451
    
    
    
    22,157
    
    
    
    N/M
    
    
    
    15,380Goodwill
    
    
    49,850
    
    
    
    62,736
    
    
    
    (12,886
    )
    
    
    -20.5
    %
    
    
    55,659Trade names
    
    
    9,006
    
    
    
    18,794
    
    
    
    (9,788
    )
    
    
    -52.1
    %
    
    
    9,472Other long-term assets
    
    
    76,545
    
    
    
    80,166
    
    
    
    (3,621
    )
    
    
    -4.5
    %
    
    
    74,164Total assets
    
    $
    825,917
    
    
    $
    927,103
    
    
    $
    (101,186
    )
    
    
    -10.9
    %
    
    $
    878,691Current liabilitiesShort-term borrowings
    
    $
    
    
    
    $
    35,000
    
    
    $
    (35,000
    )
    
    
    -100.0
    %
    
    $
    Current portion of long-term debt
    
    
    38,353
    
    
    
    3,295
    
    
    
    35,058
    
    
    
    N/M
    
    
    
    37,688Accounts payable
    
    
    54,194
    
    
    
    72,308
    
    
    
    (18,114
    )
    
    
    -25.1
    %
    
    
    68,089Liabilities of discontinued operations
    
    
    1,664
    
    
    
    
    
    
    
    1,664
    
    
    
    N/M
    
    
    
    3,843Accrued expenses and other current
liabilities
    
    
    103,130
    
    
    
    114,762
    
    
    
    (11,632
    )
    
    
    -10.1
    %
    
    
    118,590Total current liabilities
    
    
    197,341
    
    
    
    225,365
    
    
    
    (28,024
    )
    
    
    -12.4
    %
    
    
    228,210Long-term debt
    
    
    110,774
    
    
    
    147,799
    
    
    
    (37,025
    )
    
    
    -25.1
    %
    
    
    111,714Income taxes payable  long term
    
    
    7,084
    
    
    
    
    
    
    
    7,084
    
    
    
    N/M
    
    
    
    Other long-term liabilities
    
    
    56,474
    
    
    
    54,920
    
    
    
    1,554
    
    
    
    2.8
    %
    
    
    53,419Contingencies and commitments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shareholders equityCommon shares, $1 par value
    
    
    51,416
    
    
    
    51,364
    
    
    
    52
    
    
    
    0.1
    %
    
    
    51,377Capital in excess of par value
    
    
    206,636
    
    
    
    206,145
    
    
    
    491
    
    
    
    0.2
    %
    
    
    208,283Retained earnings
    
    
    193,681
    
    
    
    236,635
    
    
    
    (42,954
    )
    
    
    -18.2
    %
    
    
    223,896Accumulated other comprehensive income
    
    
    2,511
    
    
    
    4,875
    
    
    
    (2,364
    )
    
    
    -48.5
    %
    
    
    1,792Total shareholders equity
    
    
    454,244
    
    
    
    499,019
    
    
    
    (44,775
    )
    
    
    -9.0
    %
    
    
    485,348Total liabilities and shareholders equity
    
    $
    825,917
    
    
    $
    927,103
    
    
    $
    (101,186
    )
    
    
    -10.9
    %
    
    $
    878,691




---



##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
 Second Quarter Ended
    
    
    Six Months Ended(Unaudited, amounts in thousands)
    
    10/27/07
    
    
    10/28/06
    
    
    10/27/07
    
    
    10/28/06Cash flows from operating activitiesNet income (loss)
    
    $
    (9,934
    )
    
    $
    1,954
    
    
    $
    (18,628
    )
    
    $
    4,249Adjustments to reconcile net
income (loss) to cash used for
operating activitiesLoss (gain) on sale of
discontinued operations (net of
tax)
    
    
    3,990
    
    
    
    
    
    
    
    3,990
    
    
    
    (1,280
    )Write-down of businesses held for
sale (net of tax)
    
    
    2,159
    
    
    
    
    
    
    
    2,159
    
    
    
    Write-down of intangibles (net of
tax)
    
    
    3,689
    
    
    
    
    
    
    
    3,689
    
    
    
    Restructuring
    
    
    967
    
    
    
    1,865
    
    
    
    4,648
    
    
    
    1,865Provision for doubtful accounts
    
    
    1,505
    
    
    
    1,643
    
    
    
    3,619
    
    
    
    2,807Depreciation and amortization
    
    
    6,093
    
    
    
    6,809
    
    
    
    12,313
    
    
    
    13,889Stock-based compensation expense
    
    
    1,001
    
    
    
    1,861
    
    
    
    1,862
    
    
    
    2,732Change in receivables
    
    
    (13,409
    )
    
    
    (24,228
    )
    
    
    9,188
    
    
    
    (2,945
    )Change in inventories
    
    
    15,323
    
    
    
    873
    
    
    
    9,252
    
    
    
    (17,117
    )Change in payables
    
    
    1,000
    
    
    
    (2,060
    )
    
    
    (14,414
    )
    
    
    (9,379
    )Change in other assets and
liabilities
    
    
    6,568
    
    
    
    (8,623
    )
    
    
    (16,678
    )
    
    
    (15,570
    )Change in deferred taxes
    
    
    (4,671
    )
    
    
    (3,110
    )
    
    
    (6,146
    )
    
    
    (6,766
    )Total adjustments
    
    
    24,215
    
    
    
    (24,970
    )
    
    
    13,482
    
    
    
    (31,764
    )Net cash provided by (used for)
operating activities
    
    
    14,281
    
    
    
    (23,016
    )
    
    
    (5,146
    )
    
    
    (27,515
    )Cash flows from investing activitiesProceeds from disposals of assets
    
    
    867
    
    
    
    3,633
    
    
    
    7,282
    
    
    
    24,962Proceeds from sale of
discontinued operations
    
    
    4,019
    
    
    
    3,184
    
    
    
    4,019
    
    
    
    33,166Capital expenditures
    
    
    (5,970
    )
    
    
    (5,767
    )
    
    
    (15,599
    )
    
    
    (15,010
    )Purchases of investments
    
    
    (6,648
    )
    
    
    (2,760
    )
    
    
    (13,270
    )
    
    
    (8,392
    )Proceeds from sales of investments
    
    
    7,801
    
    
    
    2,320
    
    
    
    14,593
    
    
    
    8,017Change in other long-term assets
    
    
    365
    
    
    
    (701
    )
    
    
    385
    
    
    
    (196
    )Net cash provided by (used
for) investing activities
    
    
    434
    
    
    
    (91
    )
    
    
    (2,590
    )
    
    
    42,547Cash flows from financing activitiesProceeds from debt
    
    
    171
    
    
    
    56,276
    
    
    
    817
    
    
    
    78,675Payments on debt
    
    
    (192
    )
    
    
    (31,266
    )
    
    
    (1,092
    )
    
    
    (78,680
    )Stock issued for stock and
employee benefit plans
    
    
    (94
    )
    
    
    (342
    )
    
    
    (116
    )
    
    
    766Repurchases of common stock
    
    
    
    
    
    
    (3,261
    )
    
    
    
    
    
    
    (6,947
    )Dividends paid
    
    
    (6,232
    )
    
    
    (6,213
    )
    
    
    (12,441
    )
    
    
    (12,462
    )Net cash provided by (used
for) financing activities
    
    
    (6,347
    )
    
    
    15,194
    
    
    
    (12,832
    )
    
    
    (18,648
    )Effect of exchange rate changes on
cash and equivalents
    
    
    538
    
    
    
    49
    
    
    
    1,539
    
    
    
    56Change in cash and equivalents
    
    
    8,906
    
    
    
    (7,864
    )
    
    
    (19,029
    )
    
    
    (3,560
    )Cash and equivalents at beginning of
period
    
    
    23,786
    
    
    
    28,393
    
    
    
    51,721
    
    
    
    24,089Cash and equivalents at end of period
    
    $
    32,692
    
    
    $
    20,529
    
    
    $
    32,692
    
    
    $
    20,529Cash paid (net of refunds) during
period  income taxes
    
    $
    758
    
    
    $
    16,889
    
    
    $
    3,893
    
    
    $
    17,097Cash paid during period  interest
    
    $
    1,495
    
    
    $
    1,748
    
    
    $
    3,405
    
    
    $
    4,660




---



##### 



LA-Z-BOY INCORPORATED
SEGMENT INFORMATION
 Second Quarter Ended
    
    
    Six Months Ended10/27/07
    
    
    10/28/06
    
    
    10/27/07
    
    
    10/28/06(Amounts in thousands)
    
    (13 weeks)
    
    
    (13 weeks)
    
    
    (26 weeks)
    
    
    (26 weeks)SalesUpholstery Group
    
    $
    269,749
    
    
    $
    304,598
    
    
    $
    524,506
    
    
    $
    599,995Casegoods Group
    
    
    58,892
    
    
    
    74,164
    
    
    
    112,466
    
    
    
    135,190Retail Group
    
    
    46,163
    
    
    
    52,485
    
    
    
    91,394
    
    
    
    104,689VIEs/Eliminations
    
    
    (9,370
    )
    
    
    (16,633
    )
    
    
    (18,536
    )
    
    
    (31,337
    )Consolidated
    
    $
    365,434
    
    
    $
    414,614
    
    
    $
    709,830
    
    
    $
    808,537Operating income (loss)Upholstery Group
    
    $
    19,036
    
    
    $
    20,162
    
    
    $
    27,903
    
    
    $
    37,787Casegoods Group
    
    
    3,577
    
    
    
    6,200
    
    
    
    6,177
    
    
    
    9,442Retail Group
    
    
    (9,119
    )
    
    
    (8,769
    )
    
    
    (19,193
    )
    
    
    (16,484
    )Corporate and Other*
    
    
    (12,816
    )
    
    
    (9,217
    )
    
    
    (23,464
    )
    
    
    (19,137
    )Intangible write-down
    
    
    (5,809
    )
    
    
    
    
    
    
    (5,809
    )
    
    
    Restructuring
    
    
    (967
    )
    
    
    (1,865
    )
    
    
    (4,648
    )
    
    
    (1,865
    )$
    (6,098
    )
    
    $
    6,511
    
    
    $
    (19,034
    )
    
    $
    9,743
 
 *
    
    Variable Interest Entities (VIEs) are included in corporate and other.