La-Z-Boy
Annual Report 2005

Plain-text annual report

LZB371 05AR_FINAL 7/14/05 10:39 AM Page 1 2 0 0 5 A N N U A L R E P O R T LZB371 05AR_FINAL 7/14/05 10:39 AM Page 2 CORPORATE OVERVIEW AND FINANCIAL HIGHLIGHTS With annual sales of over $2 billion, La-Z-Boy Incorporated is one of the world’s leading marketers and manufacturers of residential furniture and the leading global producer of reclining chairs. Our La-Z-Boy® brand is the most preferred brand in home furnishings* and the company’s La-Z-Boy Furniture Galleries® store network is the industry’s largest single-source furniture retailer in North America.** Through its operating units, La-Z-Boy Incorporated offers furniture for every room of the home, as well as for the hospitality and assisted- living industries and government installations. 00 Maggie recliner by La-Z-Boy THE LA-Z-BOY INCORPORATED SHAREHOLDERS MEETING Tuesday, August 23, 11:00 a.m. EDT, La-Z-Boy Auditorium, 1284 N. Telegraph Road, Monroe, Michigan USA *2004 InFurniture Brand Survey and 2003 Home Furnishings News Brand Survey **2004 InFurniture Single Brand Store Study LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 3 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Portofina console from the Profiles™ Collection by American Drew 01 One of the world’s leading residential furniture producers. 1 8 1 , 2 $ 2 0 1 , 2 $ 4 6 0 2 $ , 8 4 0 2 $ , 2 5 9 , 1 $ . 4 6 9 $ . 4 0 7 $ 1 . 4 6 $ 1 . 3 3 $ 9 . 1 $ 2005 UPHOLSTERY/CASEGOODS SALES MIX 76% Upholstery 22% Casegoods 2% Other 01 02 03 04 05 01 02 03 04 05 SALES Amounts in millions INCOME FROM CONTINUING OPERATIONS Amounts in millions LZB371 05AR_FINAL 7/14/05 10:39 AM Page 4 A MARKETER, MANUFACTURER AND DISTRIBUTOR OF UPHOLSTERED PRODUCT UPHOLSTERY La-Z-Boy Incorporated is committed to maintaining our leadership position as a top marketer, manufacturer and distributor of upholstered furniture. We are implementing faster lead times across the company to better meet our dealers’ and consumers’ ever-rising expectations. We also have successfully integrated global sourcing for many leather and fabric covers into our product mix, providing wider audience reach and expanding our position, particularly in the fast-growing leather category. Additionally, we continue to focus on differentiating ourselves by providing customer-driven services, including in-home design, wide product selections and improved shopping experience at retail. VALUE AT EVERY PRICE POINT. Offerings include fabric and leather reclining and nonreclining chairs, motion and stationary sofas, sleep sofas, loveseats, chaises and ottomans from our Upholstery Group companies: BAUHAUS CLAYTON MARCUS ENGLAND LA-Z-BOY LA-Z-BOY UK SAM MOORE 02 Todd Oldham by La-Z-Boy collection Dexter sofa LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 5 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Cobra chair and ottoman by Sam Moore La-Z-Boy remains North America’s largest 03 upholstery provider of stylish, comfortable and innovative products. STYLISH INNOVATION. Throughout our history, La-Z-Boy Incorporated has focused on innovation and offering a variety of styles for all consumers. The successful introduction of Ultra Plush seating to the one and only La-Z-Boy® recliner gave us another edge in this increasingly competitive category, which we continue to lead. At England, we introduced seat and back cushions available in three firmness levels to customize the feel, and at Sam Moore, we provide consumers a choice of 22 different finishes for exposed woods on their chairs. Stylish innovation also plays a crucial role in our leadership position, with the versatile Todd Oldham by La-Z-Boy and Clayton Marcus Gracious Living™ collections drawing in the high-style customer looking for the feel of fashion. LZB371 05AR_FINAL 7/14/05 10:39 AM Page 6 A MARKETER, DISTRIBUTOR AND IMPORTER OF CASEGOODS CASEGOODS 04 La-Z-Boy Incorporated is a leading marketer, distributor and importer of casegoods. Today, we are on track to have more than 75% of our residential casegoods products imported, allowing us to meet the value demands of our consumers while increasing our efficiencies. Our focus on shortening lead times and improving reliability throughout the organization is supported by a new, centralized distribution center which will reduce delivery times and costs, along with improving customer service. Three U.S. manufacturing facilities remain for the production of hospitality, youth furniture and solid wood bedroom products. ACC ENTS FOR EVERY RO OM. Offerings include veneered and solid wood dining room furniture, youth and adult bedroom furniture, occasional tables, chests, home office furniture, entertainment c e nt e r s, a c c e nt p i e c e s a n d hospitality furniture from our Casegoods Group of companies: AMERICAN DREW AMERICAN OF MARTINSVILLE HAMMARY KINCAID LEA PENNSYLVANIA HOUSE Collonade Cellarette cabinet by Kincaid LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 7 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT 05 La-Z-Boy Kidz™ bed and bedding by Lea A globally integrated supply chain designed to deliver superb product to our consumers at a great value. MARKETING EXCELLENCE. Our Casegoods companies have attracted new customers through marketing excellence and superior products designed to fit a variety of lifestyles. For example, Pennsylvania House evokes a nostalgic connection to simpler times with its Summer Retreat® collection. Hammary recently introduced three distinctive furniture groups in partnership with the National Trust for Historic Preservation®, while Kincaid has expanded its reach into more transitional styling, including the multifunctional Collonade (pictured left) featuring a wine cooler. LZB371 05AR_FINAL 7/14/05 10:39 AM Page 8 THE LEADING PROPRIETARY FURNITURE RETAILER RETAIL SYSTEM Already one of the most successful and largest single-source proprietary furniture networks in North America, the La-Z-Boy Furniture Galleries® store system continues to grow in strength and numbers. Today, there are 334 stores across the U.S. and Canada, including 109 stores featuring our New Generation format. Introduced in 2001, New Generation La-Z-Boy Furniture Galleries® stores offer wider product selections and an improved shopping experience, including in-home design service that helps create loyal customers and higher sales per customer. These stores generate more sales volume than the previous format, so accelerated conversion to this format continues to be a top priority. We expect to have more than 400 stores, with at least 250 in the New Generation format, by the end of calendar year 2007. Additionally, our company-owned La-Z-Boy Furniture Galleries® stores, which now total 61 locations, remain a priority in those markets where we are focusing to expand our level of penetration. 360 270 180 90 0 S E R O T S F O R E B M U N 96 97 98 99 00 01 02 03 04 05 CALENDAR YEAR LA-Z-BOY FURNITURE GALLERIES® STORE GROWTH 06 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 9 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Our successful proprietary retail formula is being applied to stand-alone Kincaid® and England™ stores as well, providing customized shopping experiences and more effective brand building. Kincaid has opened 17 freestanding stores, with plans to open four new stores in fiscal year 2006. England has added six new prototype stores for a total of 11 proprietary stores, and plans to add another six to eight in the next year. La-Z-Boy Furniture Galleries® Stores England™ Stores Kincaid® Stores The La-Z-Boy Furniture Galleries® store system is the largest proprietary furniture program in North America with 334 stores, and its growth is accelerating. 07 FURNITURE GALLERIES EXCELLENCE. The new Furniture Galleries Excellence program is giving our proprietary dealers a set of tools to help accelerate their continuous improvement efforts and help increase consistency among the network, so customers enjoy the same superior La-Z-Boy® experience from one store to the next. Developed in conjunction with La-Z-Boy® store owners and operators, the Furniture Galleries Excellence program sets performance benchmarks in five key areas and provides process improvement guidance and best practice sharing . Encompassing financial goals such as total sales per customer and average transaction price, as well as service-driven statistics such as perfect delivery percentage, this system is designed to help dealers sell more furniture, delight more customers and make more profit. LZB371 05AR_FINAL 7/14/05 10:39 AM Page 10 REACHING CUSTOMERS THROUGH EVERY AVAILABLE CHANNEL DISTRIBUTION La-Z-Boy is intensely focused on maintaining its already strong distribution through general dealers and in-store galleries, which are dedicated and branded areas located within independent furniture retailers. This distribution provides us great insight into all types of customer needs. The 4,500 locations, which are represented by department stores, regional chain stores and independent furniture stores, serve a wide variety of market niches, which ensures that La-Z-Boy® products are easily available to consumers and provides us with information about the competitive landscape. The process of updating our branding in more than 330 in-store La-Z-Boy Gallery® locations continues in an effort to deliver a consistent La-Z-Boy® brand experience in this key distribution channel. This channel also has proven successful for several other La-Z-Boy companies, including Kincaid, which has a network of 126 in-store galleries; Pennsylvania House, which has 133 in-store galleries; Clayton Marcus, which continues to grow both of its in-store programs, Color Studiosm and Home Expressionssm; and Lea with La-Z-Boy Kidz™ Galleries. All told, our proprietary presence in stand-alone stores and in-store galleries totals over 2,200 stores and over 10 million square feet across North America. 08 NEW ADDITIONS. Several new major customers were added to our La-Z-Boy® branded business this year, including a major regional department store chain on the East Coast with 39 stores, a predominant furniture retailer in San Diego with five stores, a national department store in the United States with 162 locations and the largest Canadian retailer of furniture and appliances with 57 stores. LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 11 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Catalogs are another fast-growing distribution channel. Sam Moore reaches several million affluent consumers through its placement in high-circulation mail-order books like the Sundance Catalog. Responding to consumer demand for more choice, speed-to-market and product value. 09 Raymour & Flanigan® Furniture and Havertys® Furniture are just two examples of retailers that sell products from several La-Z-Boy companies. LZB371 05AR_FINAL 7/14/05 10:39 AM Page 12 ANTICIPATING CONSUMER DEMAND IN COLOR, STYLE, FUNCTION AND EXPERIENCE CUSTOMERS FOR LIFE At La-Z-Boy Incorporated, our goal is to build lifelong relationships with customers, keeping them satisfied at every point of contact. We are committed to learning all about customer living, shopping and buying habits so we can evolve our product selection, services and shopping experience to create customers for life, one exceptional experience at a time. This focus can be seen in every New Generation La-Z-Boy Furniture Galleries® store where the Design Center welcomes shoppers with professional design consultants, inspiration, answers and helpful assistance. Each center also features the interactive La-Z-Boy Screen Test® system, which allows customers to design their own furniture by showing any La-Z-Boy® upholstered product in their choice of hundreds of fabric and leather covers. For customers looking to shop in the convenience of their home, La-Z-Boy Furniture Galleries® stores also offer in-home design assistance. Additionally, our Consumer Satisfaction Program tracks customer perceptions at every touch point, from furniture quality to service and delivery, and enables us to respond with improved products and services. 10 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 13 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT England is 98.5% on time with a promise of custom-built furniture delivered to the home within 21 days. 11 SIMPLER, FASTER AND MORE AFFORDABLE. Instant gratification is a way of life, which means today’s consumers want their furniture faster than ever. La-Z-Boy Incorporated responds with some of the quickest delivery programs in the industry. England is 98.5% on time with its promise of custom-built furniture delivered to the home within 21 days. The Kincaid 8-in-8 program lets customers select any one of eight popular sofa frames and fabrics that it will ship in eight days or less, and Signature Selects® sofas and chairs from La-Z-Boy offers quick-ship fabric and frame combinations. Part of creating customers for life is making their shopping experiences as easy as possible. The Kincaid Keys to the Store program allows customers to collect favorite fabric swatches and product information cards on a handy key chain that they can take home to help them make more informed, confident decisions. Similarly, La-Z-Boy Furniture Galleries® stores’ customers can print out and keep customized brochures featuring their product and fabric preferences. England now gives upholstery pieces the same price, no matter what fabric is selected, making pricing easier for customers. LZB371 05AR_FINAL 7/14/05 10:39 AM Page 14 LEVERAGE AND EXTEND THE POWER OF LA-Z-BOY THE BRAND Consumers clearly have great affection for the La-Z-Boy® brand, which is ranked the top brand in furniture and the number three brand in the home, based on both awareness and preference.* This is a major advantage in the very fragmented furniture industry. To maintain our leadership position, we continue to focus on reinforcing our unparalleled La-Z-Boy brand story by establishing a unified look and messages across all markets through advertising, public relations and in-store marketing materials. Consumers saw the message of La-Z-Boy style more than three billion times last year through our New Look of Comfort and Todd Oldham by La-Z-Boy national advertising campaigns. Innovative public relations initiatives further drove our brand building in fiscal year 2005, with messages delivered an additional one billion times through newspaper stories, magazine articles and television segments. 12 Annabel sofa from Inspired Living™ by La-Z-Boy *2003 Home Furnishings News Brand Survey LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 15 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Award-winning lazboy.com. By 2009, 77% of U.S. households will have regular online access, and 40% will shop online.* Currently, more than 30% of all La-Z-Boy consumers use the Web for information prior to purchase. 13 La-Z-Boy® strengthened its position as the #1 brand in furniture. LEVERAGING THE BRAND. La-Z-Boy is continually leveraging the power of our brand to achieve growth objectives by extending our reach into new consumer categories. The Todd Oldham by La-Z-Boy collection has pulled younger, more style-conscious consumers into stores. Lea is benefiting from the power of the brand by applying the name La-Z-Boy Kidz™ to its youth furniture. Our New Generation La-Z-Boy Furniture Galleries® stores are the retail embodiment of the brand, designed to deliver the ultimate brand experience, while our online brand representation, lazboy.com, has become a significant destination for furniture shoppers. *Forrester US eCommerce Overview, August 2004 LZB371 05AR_FINAL 7/14/05 10:39 AM Page 16 A L E T T E R T O O U R SHAREHOLDERS Fiscal year 2005 has been a challenging one for La-Z-Boy, but at the same time, a pivotal one. We were pleased with the very significant progress we made throughout the year in the transition to our updated business model, although we were disappointed with our financial results. Our new model represents a meaningful departure from our historical focus on simply manufacturing and marketing upholstered and casegoods furniture, and the transition has not been without its difficulties. Nonetheless, we are well on our way to realizing the benefits this strategic platform will provide, as was evidenced by our continually improving operating profitability in every successive quarter of fiscal year 2005. FISCAL YEAR 2005 FINANCIAL RESULTS Our revenues grew 4.9% to $2.05 billion, driven primarily by our upholstery business, which increased 3.6% to $1.55 billion. Our casegoods business remained basically flat at $455 million, which was a welcome improvement after several years of declining volume. This was directly a result of the efforts put forth in our transition to an import-driven casegoods model. Lastly, our operating profit margin increased to 3.1%, up from 1.4% in fiscal year 2004, in spite of unprecedented raw material price increases, particularly in steel. BUSINESS MODEL Our business model has three core elements: 1 To remain the industry’s leading marketer and manufacturer of upholstered product; 2 To be a marketer, distributor and importer of casegoods products, and; 3 To be the leading proprietary furniture retailer in North America. 14 1QHT-A chaise by Bauhaus LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Upholstery: Industry Leading Marketer and Manufacturer La-Z-Boy is the world’s largest upholstered furniture manufacturer with the most powerful brand name in furniture and one of the best-known brands in the home. We intend to leverage the power of the La-Z-Boy brand across our businesses and to extend that power into other categories where our core equity of comfort is a key consumer need. In addition, we continue to significantly broaden the appeal of our products and expand our market share through a powerful integrated marketing system and by delivering a broader and more stylish line of upholstered furniture to our customers through multiple distribution channels. Our strong and proven proprietary distribution system is one of the few coexisting successfully with other retail channels. By leveraging and building on these strengths, we will remain the industry leading manufacturer and marketer of upholstered furniture. We must, however, ensure that our products are competitive and that we have an efficient, lean and globally integrated supply chain. At La-Z-Boy, we believe in order to do this we must both improve our domestic manufacturing capabilities as well as accelerate our integration of imported parts and finished products. As a result, at our manufacturing facilities, we’re critically examining and changing numerous processes, using lean and cellular concepts to increase productivity, quality and shorten delivery times for our products. Additionally, we are importing a greater quantity of cut and sewn leather and fabric sets, enabling us to capture more value at key price points. Our objective is to return to our historic operating margins of 8-10% in the upholstery business, assuming raw material prices stabilize or decrease in the coming year. As we critically examined our upholstery business model during the year, we concluded that our expertise, as well as our business model, is centered on providing furnishings for the home. This led to our decision to sell our La-Z-Boy Contract business, which simply did not have the scale of the major office furniture players and was not a large enough component of our overall business to justify our corporate attention and resources. This enables us to sharpen our focus on home furnishings. We express our sincere appreciation to all the people who have been involved with this business over the past several decades for their effort and energy. Casegoods: Marketer, Distributor and Importer Our focus in casegoods will primarily be as a marketer, distributor and importer. This represents a significant shift LZB371 05AR_FINAL 7/14/05 10:39 AM Page 17 LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Underlying everything we do is a focus on and knowledge of our consumers and their needs. We intend for every part of our business to create an intensified focus on the consumer, from designing products with their needs in mind to developing a unique, memorable and consistent shopping experience in our stores. We recently implemented a customer satisfaction system which surveys over 80,000 customers each year to determine what they like and don’t like about their total furniture experience with La-Z-Boy. Our La-Z-Boy Furniture Galleries® store network made solid progress on the retail front in fiscal year 2005, building on our successful New Generation store format introduced in 2001. These stores continue to generate increased traffic levels, higher average sales per square foot and greater total sales volumes than our older format stores. This year, 41 total store projects were completed, including 17 new stores and the conversion or relocation of 24 existing stores to the new format. We also closed seven nonproductive stores during the fiscal year and transitioned two poorly performing markets to new ownership. This brings our total year-end store count to 334, with 109 of those being in the New Generation format. From a corporate-ownership perspective, we have also made substantial progress. We acquired three markets – Chicago, Pittsburgh and Connecticut – consisting of 21 stores. Overall, in our corporate-owned markets, we opened three new stores and converted three stores to the New Generation format. With these acquisitions and new stores, we now own 61 stores in seven primary markets, compared to 36 stores at the beginning of the year. The businesses we’ve absorbed need substantial work in order for them to achieve an operating level consistent with our performance expectations. Typically, these operations tend to have stores with dated physical structures in substandard locations, and it will take time to relocate and upgrade these stores. Given the size and scope of these key markets, these efforts will provide significant returns in the future as we continue to build out our retail network. We’re also making great strides in improving the tools we provide our proprietary retailers, from enhanced marketing materials to consumer satisfaction data to benchmarking information and more. We’re confident that all of these efforts will enable us to deliver on our objective of ultimately obtaining operating margins in line with other publicly traded furniture retailers. It should be understood that retail margins are typically less than we would earn from manufacturing and distribution activity. However, the retail business requires less capital investment than manufacturing, which will allow us to earn an acceptable return on our invested capital. Continuous Improvement The nature of today’s intensely competitive environment dictates that we must create a culture which is relentlessly 15 Kanson cocktail table by Hammary for this segment, given that just a couple of years ago, we were manufacturing 75% of our residential products domestically and are now trending to importing over 75%. The focus of this business will be on the rapid development and introduction of new products based on a greater understanding of our customers’ needs, with more attention on effective marketing and merchandising of products. After several years of closing facilities in this group, we now have three domestic casegoods facilities, each serving a specific product category. Supporting these efforts, we have a global sourcing operation, with a little over half of this staff working on the ground in China, enabling us to gain efficiencies as we consolidate shipments of our products. We continue to expand our sourcing and direct container capabilities with first-tier suppliers. We’ve also integrated a centralized distribution facility to service the logistical needs of an import model. It supports distribution for American Drew, Lea and Pennsylvania House products and will enable us to reduce cycle times, increase inventory turns and enhance customer service. We have an objective of increasing our operating margins in casegoods to the range of 4-6% and have higher margin expectations longer-term. Our import model, combined with a renewed focus on the top line through new products, innovative designs, inventory management and effective sales and marketing programs, makes us confident we will achieve our targets. Retail: Leading Proprietary Furniture Retailer We intend to strengthen our position as the leading proprietary furniture retailer in the industry. We have a great deal of experience in retailing, having first entered proprietary retail in the late 1970s with our La-Z-Boy Showcase Shoppes®. This retail model continues to improve as we drive its evolution to meet changing retail and consumer preferences and expansion targets. We’re also intensifying the role we play in the acceleration of growth in our proprietary store system, particularly in the Top 25 retail markets in North America, in order to achieve our desired market penetration levels. LZB371 05AR_FINAL 7/14/05 10:39 AM Page 18 focused on driving continuous improvement in everything we do. We need continuous improvement in our cost structure, speed-to-market and quality in order to compete globally. To help lead this effort, we recently established a corporate process improvement role to spearhead our overall efforts. In addition, we are hiring continuous improvement and lean champions in all of our factories to accelerate our efforts at the shop floor level. There is no question that the key to making the three elements of our business model thrive, as well as our overall success, is our people. We are intensely focused and committed to having the right people with the appropriate experience and skill sets deployed throughout our organization. In addition, we have also developed and implemented much more rigorous and disciplined human resources processes, including succession planning, performance management and leadership development programs to ensure we effectively identify and develop our future leaders. Finally, in the area of information technology, we are focused on making the most of the data we collect at retail to make sure we are satisfying consumer demands and understanding and forecasting changing demand trends. With this in mind, we are developing and implementing a common point-of- sale retail system across all of our company-owned stores, enabling us to manage these stores as a unified chain, on a common platform with consistent data, rather than as independent markets. 16 improving our processes and result in efficiencies. We are pleased to present unqualified reports from both management and PricewaterhouseCoopers, which appear in the financial section of this report. Holliday Slipper chair from New Standards: The Steve Tyrell Collection™ by Pennsylvania House LOOKING AHEAD In closing, we are pleased with the progress we made in transitioning to our new business model, in spite of a very tough environment. We have significantly evolved our organization and will continue to embrace change to ensure our leadership in a very competitive industry. We remain convinced that our new business model is creating a strong foundation for growth and positions us to compete profitably. This transition is not without its challenges, and we thank our shareholders, board of directors and employees for your continued support. We are confident that the positive actions we have taken will position us for a successful future. Kurt L. Darrow President and Chief Executive Officer Patrick H. Norton Chairman of the Board SARBANES-OXLEY We also need to discuss another large focus for us this year, which was the significant investment we made in time and financial resources to implement the SEC’s regulations around Management’s Report on Internal Controls over Financial Reporting, Section 404 of the Sarbanes-Oxley Act of 2002. This task was monumental, requiring our people to undertake the documentation and testing of our internal controls. Our take- away was that your company has a high degree of integrity a n d t ra n s p a re n c y w h i c h t h e A c t i s attempting to create. Hopefully long-term, this compliance will a s s i s t u s i n o u r continual focus on LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT LZB371 05AR_FINAL 7/14/05 10:39 AM Page 19 BOARD OF DIRECTORS CORPORATE EXECUTIVES DIVISIONAL EXECUTIVES LA-Z-BOY INCORPORATED 2005 ANNUAL REPORT Kurt L. Darrow President and Chief Executive Officer La-Z-Boy Incorporated John H. Foss Retired Manufacturing Financial Executive David K. Hehl Partner, Cooley Hehl Wohlgamuth & Carlton, P.L.L.C. James W. Johnston Private Investor Dr. H. George Levy Otorhinolaryngologist CEO of EndueNet, Inc. Rocque E. Lipford Senior Principal Miller, Canfield, Paddock and Stone, P.L.C. Donald L. Mitchell Retired Furniture Executive Patrick H. Norton Chairman of the Board La-Z-Boy Incorporated Helen O. Petrauskas Retired Automotive Executive Jack L. Thompson Chairman of the Board The Plastics Group, Inc. INVESTOR INFORMATION Corporate Headquarters La-Z-Boy Incorporated 1284 North Telegraph Road Monroe, MI 48162-3390 734-242-1444 www.lazboy.com Dividend Reinvestment Plan A brochure is available on the La-Z-Boy Dividend Reinvestment Plan. It explains how shareholders may increase their investment in the stock of the company. Write to Investor Relations. Upholstery Segment Thomas Brown Managing Director La-Z-Boy International Michael C. Moldenhauer President, Sam Moore Furniture Steven W. Pilgrim President, Bauhaus Casegoods Segment Noel L. Chitwood President, American of Martinsville David M. Sowinski President, Pennsylvania House John V. Labarowski President, Hammary Furniture R. Jack Richardson, Jr. President, American Drew and Lea Industries Patrick H. Norton Chairman of the Board Kurt L. Darrow President and Chief Executive Officer Rodney D. England Senior VP and President Non-Branded Upholstery Product Steven M. Kincaid Senior VP and President Casegoods Product David M. Risley Senior VP and Chief Financial Officer James P. Klarr Secretary and Corporate Counsel Mark A. Stegeman VP and Treasurer Roger L. Miller VP Process Improvement Louis M. Riccio, Jr. VP and Corporate Controller Steven P. Rindskopf VP Corporate Human Resources Otis S. Sawyer VP and Chief Information Officer 00 Investor Relations and Financial Reports We will provide the Form 10-K to any shareholder who requests it. Security analysts, shareholders and investors may request information from: Investor Relations La-Z-Boy Incorporated 1284 North Telegraph Road Monroe, MI 48162-3390 investorrelations@lazboy.com Stock Exchange La-Z-Boy Incorporated common shares are traded on the New York Stock Exchange and the Pacific Exchange under the symbol LZB. Shareholder Services Inquiries regarding the Dividend Reinvestment Plan, dividend payments, stock transfer requirements, address changes and account consolidations should be addressed to the company’s stock transfer agent and registrar: American Stock Transfer & Trust Company 59 Maiden Lane New York, NY 10038 212-936-5100 800-937-5449 www.amstock.com Except as noted, all designated trademarks and service marks utilized in this report are owned by La-Z-Boy Incorporated or its subsidiary companies. Todd Oldham is a registered trademark of L-7 Designs, Inc. Patent pending. Sundance Catalog images used with permission, © Sundance Holdings Group, LLC 2005. Havertys is a registered trademark of Havertys Furniture Companies, Inc. ©2005 La-Z-Boy Incorporated LZB371 05AR_FINAL 7/14/05 10:39 AM Page 20 LA-Z-BOY COMPANIES ONLINE lazboy.com americandrew.com americanofmartinsville.com bauhaususa.com claytonmarcus.com englandinc.net hammary.com kincaidfurniture.com leafurniture.com pennsylvaniahouse.com sammoore.com la-z-boy.co.uk La-Z-Boy Incorporated, 1284 North Telegraph Road, Monroe, Michigan 48162 • Items shown on cover (from top): Daphne, Adina, Forester, Mia and Annabel sofas by La-Z-Boy 

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