La-Z-Boy announced on Sunday that they will close all manufacturing operations in the United States, which includes La-Z-Boy Midwest in Neosho with approximately 800 employees.
MONROE, Mich., March 29, 2020 (GLOBE NEWSWIRE) -- La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, today announced its response to the COVID-19 crisis. The company is taking the following actions based on its on-going assessment of the accelerating spread of the coronavirus and to ensure the well-being of its employees and their families, its customers and the communities where it operates:
Temporary closure of its U.S. manufacturing facilities, effective immediately, to be re-evaluated on April 13, 2020
Temporary closure of all company-owned La-Z-Boy Furniture Galleries® stores is in process, with 130 of 155 stores currently closed
Temporary closure of its Regional Distribution Centers once in-process orders are delivered
During this time, the company remains committed to serving its customers at La-Z-Boy.com and Joybird.com. Customers may still place orders which will be delivered when operations resume.
In light of these temporary closures, the company is taking the following measured actions to facilitate a strong ramp up once it resumes operations:
The furlough of approximately 6,800 employees, or approximately 70% of its global workforce
A salary reduction of 50% for senior management and 25% for salaried employees until further notice; additionally, the board of directors will forego the cash portion of its compensation until further notice
A freeze of the company’s 401(k) match
Elimination of all non-essential operating expenses and capital expenditures
Elimination of the June quarterly dividend and termination of the share repurchase program indefinitely to prioritize near-term financial flexibility
In addition to almost $200 million in cash, cash equivalents, restricted cash, and investments on hand, to strengthen its financial position and preserve liquidity, the company has proactively drawn $75 million under its $150 million revolving credit facility.
Kurt L. Darrow, Chairman, President and Chief Executive Officer, of La-Z-Boy Incorporated, said: "As we move through this unprecedented global pandemic, keeping our employees, customers and the communities in which we operate safe and healthy is of paramount importance. Throughout this period, La-Z-Boy has followed all government regulations and recommendations and implemented best-practice health and safety protocols. At this time, the company is not aware of any confirmed coronavirus cases across the enterprise and will continue our efforts to keep facilities clean and safe. However, our leadership team has determined that more significant measures are necessary to protect the health and safety of our employees, and to assist in the national effort to combat the spread of COVID-19. We will continue to assess the evolving situation to determine the cadence to re-start operations and open stores. During this challenging time, we will focus on managing our business to preserve cash and to ensure the continued liquidity of the company.
“While the decisions made were extremely difficult and we deeply regret the impact they will have on those affected and their families, they are deemed necessary as we face one of the most challenging periods in our history. Moving forward, with a strong financial foundation, the powerful La-Z-Boy brand, and our dedicated and hard-working people, I am confident the company will weather this storm. Although the path forward will likely be complex and unpredictable, we expect to return to full operations when the crisis lifts, and emerge with strength,” Darrow concluded.
The company plans to report its fiscal 2020 fourth-quarter and full-year results in the second half of June, and will update the investment community with more details on its various initiatives at that time. Until that time, the company undertakes no obligation to update the investment community.
La-Z-Boy remains committed to paying dividends over the long-term and will seek to resume dividends as business conditions improve. Likewise, the company will reinstate share repurchases when it deems appropriate.