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La-Z-Boy Management Discusses Q4 2012 Results - Earnings Call Transcript

And with that, let me turn over the call to Kurt Darrow, La-Z-Boy's Chairman, President and Chief Executive Officer. Kurt?

Kurt L. Darrow

Thank you, Kathy, and good morning, everyone, and thank you for joining us on our call this morning. Yesterday afternoon, we reported our fourth quarter and full year results for fiscal 2012. Before talking about the quarter specifically, I would like to take a moment to recap some of the highlights for the year.

First, our growth initiatives. On a comparable 52-week basis, we increased our sales about 6%. As you will recall, fiscal 2011 was a 53-week year. For the year, same-store written sales for the 312 La-Z-Boy Furniture Galleries stores increased 9.4%. We developed and introduced a new concept store and opened 4 stores in that format. In total, across the La-Z-Boy Furniture Gallery network, we added 8 stores throughout the year and remodeled and relocated several others.

We continued to move our company-owned retail segment towards profitability and improved our operating results by about 50%. We increased our market share, we maintained our focus on innovation and introduced compelling, stylish and on-trend products that were well received by our customers, and we announced a strategic agreement with Kuka Home, one of China's largest upholstery producers and retailers, to develop the La-Z-Boy brand in mainland China.

On the operations side, our Mexico-based cut-and-sew facility is producing efficiently and we achieved our anticipated savings for the year. And with our lean journey permeating all facets of our operations and becoming a part of our corporate culture's DNA, our operations are running efficiently and continuing to reduce costs.

And finally, on the financial side, we posted a 92% increase in our operating income. We eliminated our final consolidated VIE, we generated strong cash flows and we strengthened our balance sheet by increasing our cash and paying off our revolving line of credit.

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