##### 



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




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##### 



®
  Casegoods
   Retail
    New Credit Facility




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##### 



Balance Sheet
  Business Outlook
  Forward-looking Information




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##### 



Additional 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
 Third Quarter Ended% Over
    
    
    Percent of Sales(Unaudited, amounts in thousands, except per share data)
    
    01/26/08
    
    
    01/27/07
    
    
    (Under)
    
    
    01/26/08
    
    
    01/27/07Sales
    
    $
    373,081
    
    
    $
    404,845
    
    
    
    -7.8
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of salesCost of goods sold
    
    
    265,078
    
    
    
    291,322
    
    
    
    -9.0
    %
    
    
    71.1
    %
    
    
    72.0
    %Restructuring
    
    
    (632
    )
    
    
    
    
    
    
    
    
    
    
    -0.2
    %
    
    
    Total cost of sales
    
    
    264,446
    
    
    
    291,322
    
    
    
    -9.2
    %
    
    
    70.9
    %
    
    
    72.0
    %Gross profit
    
    
    108,635
    
    
    
    113,523
    
    
    
    -4.3
    %
    
    
    29.1
    %
    
    
    28.0
    %Selling, general and
administrative
    
    
    104,672
    
    
    
    101,213
    
    
    
    3.4
    %
    
    
    28.1
    %
    
    
    25.0
    %Restructuring
    
    
    877
    
    
    
    2,855
    
    
    
    -69.3
    %
    
    
    0.2
    %
    
    
    0.7
    %Operating income
    
    
    3,086
    
    
    
    9,455
    
    
    
    -67.4
    %
    
    
    0.8
    %
    
    
    2.3
    %Interest expense
    
    
    2,148
    
    
    
    2,750
    
    
    
    -21.9
    %
    
    
    0.6
    %
    
    
    0.7
    %Income from Continued Dumping and
Subsidy Offset Act, net
    
    
    7,147
    
    
    
    3,430
    
    
    
    108.4
    %
    
    
    1.9
    %
    
    
    0.8
    %Other income, net
    
    
    4,919
    
    
    
    1,633
    
    
    
    201.2
    %
    
    
    1.3
    %
    
    
    0.4
    %Income from continuing
operations before income taxes
    
    
    13,004
    
    
    
    11,768
    
    
    
    10.5
    %
    
    
    3.5
    %
    
    
    2.9
    %Income tax expense
    
    
    3,876
    
    
    
    4,823
    
    
    
    -19.6
    %
    
    
    29.8
    %*
    
    
    41.0
    %*Income from continuing
operations
    
    
    9,128
    
    
    
    6,945
    
    
    
    31.4
    %
    
    
    2.4
    %
    
    
    1.7
    %Income (loss) from
discontinued operations (net
of tax)
    
    
    384
    
    
    
    (14,766
    )
    
    
    102.6
    %
    
    
    0.1
    %
    
    
    -3.6
    %Net income (loss)
    
    $
    9,512
    
    
    $
    (7,821
    )
    
    
    221.6
    %
    
    
    2.5
    %
    
    
    -1.9
    %Basic average shares
    
    
    51,417
    
    
    
    51,367Basic income from
continuing operations per share
    
    $
    0.18
    
    
    $
    0.14Discontinued operations per share
(net of tax)
    
    $
    0.01
    
    
    $
    (0.29
    )Basic net income (loss) per share
    
    $
    0.19
    
    
    $
    (0.15
    )Diluted average shares
    
    
    51,590
    
    
    
    51,609Diluted income from continuing
operations per share
    
    $
    0.18
    
    
    $
    0.14Discontinued operations per share
(net of tax)
    
    $
    
    
    
    $
    (0.29
    )Diluted net income (loss) per
share
    
    $
    0.18
    
    
    $
    (0.15
    )Dividends paid per share
    
    $
    0.12
    
    
    $
    0.12
 
 *
    
    As a percent of pretax income, not sales.




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##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
 Nine Months Ended%Over
    
    
    Percent of Sales(Unaudited, amounts in thousands, except per share data)
    
    01/26/08
    
    
    01/27/07
    
    
    (Under)
    
    
    01/26/08
    
    
    01/27/07Sales
    
    $
    1,082,911
    
    
    $
    1,213,382
    
    
    
    -10.8
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of salesCost of goods sold
    
    
    790,879
    
    
    
    893,681
    
    
    
    -11.5
    %
    
    
    73.0
    %
    
    
    73.7
    %Restructuring
    
    
    2,447
    
    
    
    (400
    )
    
    
    711.8
    %
    
    
    0.2
    %
    
    
    Total cost of sales
    
    
    793,326
    
    
    
    893,281
    
    
    
    -11.2
    %
    
    
    73.3
    %
    
    
    73.6
    %Gross profit
    
    
    289,585
    
    
    
    320,101
    
    
    
    -9.5
    %
    
    
    26.7
    %
    
    
    26.4
    %Selling, general and
administrative
    
    
    297,278
    
    
    
    295,783
    
    
    
    0.5
    %
    
    
    27.5
    %
    
    
    24.4
    %Write-down of intangibles
    
    
    5,809
    
    
    
    
    
    
    
    
    
    
    
    0.5
    %
    
    
    Restructuring
    
    
    2,446
    
    
    
    5,120
    
    
    
    -52.2
    %
    
    
    0.2
    %
    
    
    0.4
    %Operating income (loss)
    
    
    (15,948
    )
    
    
    19,198
    
    
    
    -183.1
    %
    
    
    -1.5
    %
    
    
    1.6
    %Interest expense
    
    
    6,365
    
    
    
    7,890
    
    
    
    -19.3
    %
    
    
    0.6
    %
    
    
    0.7
    %Income from Continued
Dumping and Subsidy Offset
Act, net
    
    
    7,147
    
    
    
    3,430
    
    
    
    108.4
    %
    
    
    0.7
    %
    
    
    0.3
    %Other income, net
    
    
    7,740
    
    
    
    3,252
    
    
    
    138.0
    %
    
    
    0.7
    %
    
    
    0.3
    %Income (loss) from
continuing operations
before income taxes
    
    
    (7,426
    )
    
    
    17,990
    
    
    
    -141.3
    %
    
    
    -0.7
    %
    
    
    1.5
    %Income tax expense (benefit)
    
    
    (4,359
    )
    
    
    6,658
    
    
    
    -165.5
    %
    
    
    58.7
    %*
    
    
    37.0
    %*Income (loss) from
continuing operations
    
    
    (3,067
    )
    
    
    11,332
    
    
    
    -127.1
    %
    
    
    -0.3
    %
    
    
    0.9
    %Loss from discontinued
operations (net of tax)
    
    
    (6,050
    )
    
    
    (14,904
    )
    
    
    59.4
    %
    
    
    -0.6
    %
    
    
    -1.2
    %Net Loss
    
    $
    (9,117
    )
    
    $
    (3,572
    )
    
    
    -155.2
    %
    
    
    -0.8
    %
    
    
    -0.3
    %Basic average shares
    
    
    51,402
    
    
    
    51,509Basic income (loss) from
continuing operations per
share
    
    $
    (0.06
    )
    
    $
    0.22Discontinued operations per
share (net of tax)
    
    $
    (0.12
    )
    
    $
    (0.29
    )Basic net loss per share
    
    $
    (0.18
    )
    
    $
    (0.07
    )Diluted average shares
    
    
    51,402
    
    
    
    51,743Diluted income (loss) from
continuing operations per
share
    
    $
    (0.06
    )
    
    $
    0.22Discontinued operations per
share (net of tax)
    
    $
    (0.12
    )
    
    $
    (0.29
    )Diluted net loss per share
    
    $
    (0.18
    )
    
    $
    (0.07
    )Dividends paid per share
    
    $
    0.36
    
    
    $
    0.36
 
 *
    
    As a percent of pretax income, not sales.




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##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED BALANCE SHEET
 Increase/(Decrease)(Unaudited, amounts in thousands)
    
    01/26/08
    
    
    01/27/07
    
    
    Dollars
    
    
    Percent
    
    
    4/28/07Current assetsCash and equivalents
    
    $
    63,175
    
    
    $
    17,484
    
    
    $
    45,691
    
    
    
    261.3
    %
    
    $
    51,721Receivables, net
    
    
    214,088
    
    
    
    217,103
    
    
    
    (3,015
    )
    
    
    -1.4
    %
    
    
    230,399Inventories, net
    
    
    183,935
    
    
    
    214,151
    
    
    
    (30,216
    )
    
    
    -14.1
    %
    
    
    197,790Deferred income taxescurrent
    
    
    16,696
    
    
    
    31,369
    
    
    
    (14,673
    )
    
    
    -46.8
    %
    
    
    17,283Assets of discontinued operations
    
    
    278
    
    
    
    39,354
    
    
    
    (39,076
    )
    
    
    -99.3
    %
    
    
    24,278Other current assets
    
    
    23,309
    
    
    
    24,847
    
    
    
    (1,538
    )
    
    
    -6.2
    %
    
    
    19,327Total current assets
    
    
    501,481
    
    
    
    544,308
    
    
    
    (42,827
    )
    
    
    -7.9
    %
    
    
    540,798Property, plant and equipment, net
    
    
    179,282
    
    
    
    192,382
    
    
    
    (13,100
    )
    
    
    -6.8
    %
    
    
    183,218Deferred income taxeslong term
    
    
    24,574
    
    
    
    
    
    
    
    24,574
    
    
    
    
    
    
    
    15,380Goodwill
    
    
    49,850
    
    
    
    55,409
    
    
    
    (5,559
    )
    
    
    -10.0
    %
    
    
    55,659Trade names
    
    
    9,006
    
    
    
    9,472
    
    
    
    (466
    )
    
    
    -4.9
    %
    
    
    9,472Other long-term assets
    
    
    74,585
    
    
    
    87,339
    
    
    
    (12,754
    )
    
    
    -14.6
    %
    
    
    74,164Total assets
    
    $
    838,778
    
    
    $
    888,910
    
    
    $
    (50,132
    )
    
    
    -5.6
    %
    
    $
    878,691Current liabilitiesShort-term borrowings
    
    $
    
    
    
    $
    15,702
    
    
    $
    (15,702
    )
    
    
    -100.0
    %
    
    $
    Current portion of long-term debt
    
    
    4,154
    
    
    
    3,487
    
    
    
    667
    
    
    
    19.1
    %
    
    
    38,076Accounts payable
    
    
    61,683
    
    
    
    58,405
    
    
    
    3,278
    
    
    
    5.6
    %
    
    
    66,242Liabilities of discontinued operations
    
    
    916
    
    
    
    5,681
    
    
    
    (4,765
    )
    
    
    -83.9
    %
    
    
    3,843Accrued expenses and other current
liabilities
    
    
    103,387
    
    
    
    105,636
    
    
    
    (2,249
    )
    
    
    -2.1
    %
    
    
    118,591Deferred income taxes
    
    
    669
    
    
    
    
    
    
    
    669
    
    
    
    
    
    
    
    Total current liabilities
    
    
    170,809
    
    
    
    188,911
    
    
    
    (18,102
    )
    
    
    -9.6
    %
    
    
    226,752Long-term debt
    
    
    146,415
    
    
    
    148,773
    
    
    
    (2,358
    )
    
    
    -1.6
    %
    
    
    113,172Income taxes payable  long term
    
    
    4,332
    
    
    
    9,605
    
    
    
    (5,273
    )
    
    
    -54.9
    %
    
    
    Other long-term liabilities
    
    
    61,609
    
    
    
    54,961
    
    
    
    6,648
    
    
    
    12.1
    %
    
    
    53,419Contingencies and commitments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shareholders equityCommon shares, $1 par value
    
    
    51,417
    
    
    
    51,372
    
    
    
    45
    
    
    
    0.1
    %
    
    
    51,377Capital in excess of par value
    
    
    207,954
    
    
    
    207,184
    
    
    
    770
    
    
    
    0.4
    %
    
    
    208,283Retained earnings
    
    
    196,935
    
    
    
    222,601
    
    
    
    (25,666
    )
    
    
    -11.5
    %
    
    
    223,896Accumulated other comprehensive income (loss)
    
    
    (693
    )
    
    
    5,503
    
    
    
    (6,196
    )
    
    
    -112.6
    %
    
    
    1,792Total shareholders equity
    
    
    455,613
    
    
    
    486,660
    
    
    
    (31,047
    )
    
    
    -6.4
    %
    
    
    485,348Total liabilities and shareholders equity
    
    $
    838,778
    
    
    $
    888,910
    
    
    $
    (50,132
    )
    
    
    -5.6
    %
    
    $
    878,691




---



##### 



LA-Z-BOY INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
 Third Quarter Ended
    
    
    Nine Months Ended(Unaudited, amounts in thousands)
    
    01/26/08
    
    
    01/27/07
    
    
    01/26/08
    
    
    01/27/07Cash flows from operating
activitiesNet income (loss)
    
    $
    9,512
    
    
    $
    (7,821
    )
    
    $
    (9,117
    )
    
    $
    (3,572
    )Adjustments to reconcile net
income (loss) to cash used for
operating activitiesGain (loss) on sale of
discontinued operations (net of
tax)
    
    
    (96
    )
    
    
    
    
    
    
    3,894
    
    
    
    (1,280
    )Write-down of assets of
businesses held for sale (net
of tax)
    
    
    
    
    
    
    13,674
    
    
    
    2,159
    
    
    
    13,674Write-down of intangibles (net
of tax)
    
    
    
    
    
    
    
    
    
    
    3,689
    
    
    
    Restructuring
    
    
    245
    
    
    
    2,855
    
    
    
    4,893
    
    
    
    4,720Provision for doubtful accounts
    
    
    2,754
    
    
    
    84
    
    
    
    6,373
    
    
    
    2,891Depreciation and amortization
    
    
    6,193
    
    
    
    6,233
    
    
    
    18,506
    
    
    
    20,122Stock-based compensation expense
    
    
    1,303
    
    
    
    479
    
    
    
    3,165
    
    
    
    3,211Change in receivables
    
    
    53
    
    
    
    22,633
    
    
    
    9,241
    
    
    
    19,688Change in inventories
    
    
    8,645
    
    
    
    2,808
    
    
    
    17,897
    
    
    
    (14,309
    )Change in payables
    
    
    9,161
    
    
    
    (9,849
    )
    
    
    (5,107
    )
    
    
    (19,228
    )Change in other assets and
liabilities
    
    
    147
    
    
    
    106
    
    
    
    (16,530
    )
    
    
    (15,464
    )Change in deferred taxes
    
    
    3,676
    
    
    
    (2,270
    )
    
    
    (2,470
    )
    
    
    (9,036
    )Total adjustments
    
    
    32,081
    
    
    
    36,753
    
    
    
    45,710
    
    
    
    4,989Net cash provided by operating
activities
    
    
    41,593
    
    
    
    28,932
    
    
    
    36,593
    
    
    
    1,417Cash flows from investing
activitiesProceeds from disposals of
assets
    
    
    456
    
    
    
    314
    
    
    
    7,738
    
    
    
    25,276Proceeds from sale of
discontinued operations
    
    
    150
    
    
    
    
    
    
    
    4,169
    
    
    
    33,166Capital expenditures
    
    
    (5,239
    )
    
    
    (5,984
    )
    
    
    (20,838
    )
    
    
    (20,994
    )Purchases of investments
    
    
    (15,807
    )
    
    
    (5,069
    )
    
    
    (29,077
    )
    
    
    (13,461
    )Proceeds from sales of
investments
    
    
    15,649
    
    
    
    3,817
    
    
    
    30,242
    
    
    
    11,834Change in other long-term assets
    
    
    1,701
    
    
    
    539
    
    
    
    2,086
    
    
    
    343Net cash provided by (used
for) investing activities
    
    
    (3,090
    )
    
    
    (6,383
    )
    
    
    (5,680
    )
    
    
    36,164Cash flows from financing
activitiesProceeds from debt
    
    
    574
    
    
    
    12,577
    
    
    
    1,391
    
    
    
    91,252Payments on debt
    
    
    (974
    )
    
    
    (32,540
    )
    
    
    (2,212
    )
    
    
    (111,220
    )Stock issued for stock and
employee benefit plans
    
    
    (13
    )
    
    
    567
    
    
    
    (129
    )
    
    
    1,333Repurchases of common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,947
    )Dividends paid
    
    
    (6,229
    )
    
    
    (6,212
    )
    
    
    (18,670
    )
    
    
    (18,674
    )Net cash used for financing
activities
    
    
    (6,642
    )
    
    
    (25,608
    )
    
    
    (19,620
    )
    
    
    (44,256
    )Effect of exchange rate changes on
cash and equivalents
    
    
    (1,378
    )
    
    
    14
    
    
    
    161
    
    
    
    70Change in cash and equivalents
    
    
    30,483
    
    
    
    (3,045
    )
    
    
    11,454
    
    
    
    (6,605
    )Cash and equivalents at beginning
of period
    
    
    32,692
    
    
    
    20,529
    
    
    
    51,721
    
    
    
    24,089Cash and equivalents at end of
period
    
    $
    63,175
    
    
    $
    17,484
    
    
    $
    63,175
    
    
    $
    17,484Cash paid (net of refunds) during
period  income taxes
    
    $
    (4,336
    )
    
    $
    558
    
    
    $
    (443
    )
    
    $
    17,655Cash paid during period  interest
    
    $
    2,652
    
    
    $
    2,911
    
    
    $
    6,057
    
    
    $
    7,769




---



##### 



LA-Z-BOY INCORPORATED
Segment Information
 Third Quarter Ended
    
    
    Nine Months Ended01/26/08
    
    
    01/27/07
    
    
    01/26/08
    
    
    01/27/07(Unaudited, amounts in thousands)
    
    (13 weeks)
    
    
    (13 weeks)
    
    
    (39 weeks)
    
    
    (39 weeks)SalesUpholstery Group
    
    $
    282,453
    
    
    $
    293,709
    
    
    $
    806,959
    
    
    $
    893,704Casegoods Group
    
    
    52,660
    
    
    
    63,127
    
    
    
    165,126
    
    
    
    198,317Retail Group
    
    
    49,884
    
    
    
    61,149
    
    
    
    141,278
    
    
    
    165,838VIEs/Eliminations
    
    
    (11,916
    )
    
    
    (13,140
    )
    
    
    (30,452
    )
    
    
    (44,477
    )Consolidated
    
    $
    373,081
    
    
    $
    404,845
    
    
    $
    1,082,911
    
    
    $
    1,213,382Operating income (loss)Upholstery Group
    
    $
    19,467
    
    
    $
    22,651
    
    
    $
    47,370
    
    
    $
    60,438Casegoods Group
    
    
    2,222
    
    
    
    5,721
    
    
    
    8,399
    
    
    
    15,163Retail Group
    
    
    (8,507
    )
    
    
    (6,738
    )
    
    
    (27,700
    )
    
    
    (23,222
    )Corporate and Other*
    
    
    (9,851
    )
    
    
    (9,324
    )
    
    
    (33,315
    )
    
    
    (28,461
    )Intangible write-down
    
    
    
    
    
    
    
    
    
    
    (5,809
    )
    
    
    Restructuring
    
    
    (245
    )
    
    
    (2,855
    )
    
    
    (4,893
    )
    
    
    (4,720
    )$
    3,086
    
    
    $
    9,455
    
    
    $
    (15,948
    )
    
    $
    19,198
 
 *
    
    Variable Interest Entities (VIEs) are included in corporate and other.