Succession planning is important to our company and, with two members of our Board retiring next year, the Board believes it prudent to bring in Janet at this time to ensure continuity as the company navigates its way through a challenging period.
James W. Johnston, Chairman, La-Z-Boy Incorporated

Professor Janet Kerr

Kerr, 54, is a Professor of Law and the Executive Director and Founder of the Geoffrey H. Palmer Center for Entrepreneurship and the Law at Pepperdine University School of Law. She is a Member of the Governance Exchange Advisory Council of ISS/Risk Metrics and is also a member of the Board of Directors of CKE Restaurants, Inc., a New York Stock Exchange-listed company, where she is Chairperson of the Corporate Governance Committee and a member of the Compensation Committee.

James W. Johnston, Chairman of La-Z-Boy Incorporated, said Kerr, "...brings a wealth of experience in corporate governance matters and has prior public- and private-company board experience, which will serve our company well."

Kurt Darrow, President and Chief Executive Officer of La-Z-Boy, said, "In addition to her legal background and expertise in corporate governance, she has been a success in various entrepreneurial endeavors, allowing her to bring a unique perspective to our company. Further, her retail experience as an Audit Committee member of Tilly's, a clothing retailer, will be beneficial as the retail component of our business becomes more important."

Johnston added, "Succession planning is important to our company and, with two members of our Board retiring next year, the Board believes it prudent to bring in Janet at this time to ensure continuity as the company navigates its way through a challenging period. We are delighted to have someone of Janet's caliber working with us and her various skill sets will complement those of our other board members."

Professor Kerr is a member of the State Bars of California and New York. She is the founder of several technology companies, including X-Labs, which was co-owned with HRL (Hughes Research Laboratories), is a world-renowned author and lecturer on securities and corporate governance matters and has worked as a staff attorney for the Securities and Exchange Commission. Among her many other significant accomplishments, Kerr serves as a consultant to the U.S. Department of Commerce and numerous countries, such as China, France and Thailand, on various issues relating to commerce with the United States and entrepreneurial strategies. She earned a B.A., summa cum laude, and a J.D. from Pepperdine University, as well as an L.L.M. in corporate law from New York University School of Law.

La-Z-Boy also reported reported that net sales for the company's fiscal third quarter ended January 24, 2009 were $288.6 million, down 23% compared with the prior year's third quarter. The company posted a net loss of $64.4 million, or $1.25 per share.

Kurt L. Darrow, La-Z-Boy's President and Chief Executive Officer, said: "In what remains an extraordinarily challenging demand environment for furniture, on a 23%, or $85 million, sales decline, we limited our adjusted operating loss to $5.4 million, reflecting the many structural changes we have made to our business. Importantly, in the third quarter, we generated cash from operations, reduced our debt, improved our liquidity, reduced our retail losses and maintained our focus on strategic projects.

"We are managing our business aggressively. In November, we reacted quickly and decisively to the rapid deterioration in sales trends experienced during October, and, we have continued to make changes to the business model on a monthly basis to align our operating platform with order trends. Since November, we removed approximately $60 million in structural costs on an annual basis from our operations in the form of personnel reductions, the closure of a Bauhaus upholstery manufacturing facility, changes to our employee benefit plans and other cost reductions across the entire company. Compared with year-ago levels, our employment has decreased by 24%, or approximately 2,500 people."

Darrow continued, "With a significant decline in volume for the quarter, without the one-time adjustment to sales and operating income that impacted the segment, the upholstery operation would have been profitable, reflecting the improvements we have made to our operating structure, particularly those derived from cellular manufacturing. Additionally, most of the bad debt charge for the quarter resided in the upholstery group, further affecting its results. Going forward, we expect to see further progress in the segment's performance with an increasing number of custom-order cut-and-sewn kits coming from Mexico. We are pleased to report we opened the Mexican cut-and-sew facility last month on time and on budget."

Darrow added, "Our casegoods segment's business model is predicated upon the ability to deliver products in two weeks or less. As retail demand slowed during the quarter, we experienced cancellations or postponements of orders from large dealers and reluctance to purchase stock inventory. As a result of the 20% decline in sales experienced during the quarter, the casegoods segment operated essentially at a break-even level. Moving forward, our team is continuing to work on a smaller but more productive product line and align the cost structure of the business to the current economic challenges."