Welcome to the La-Z-Boy Incorporated fiscal 2009 third quarter conference call. (Operator Instructions) It is now my pleasure to introduce your host, Kathy Liebmann, Director, Investor Relations, and Corporate Communications for La-Z-Boy Incorporated.

Good morning everyone and thank you for joining us on this morning’s call to discuss our fiscal 2009 third quarter results. With us today are Kurt Darrow, La-Z-Boy’s President and Chief Executive Officer and Mike Riccio our Chief Financial Officer. Kurt will begin today’s call and then Mike will speak about the financials and the more unusual items of the quarter. Following Kurt’s concluding remarks we will open the call to questions. These regular quarterly investor conference calls are one of La-Z-Boy’s primary vehicles to provide guidance and to communicate with investors about the company’s current operations and future prospects. We will make forward-looking statements during this call, so I will repeat our usual Safe Harbor remarks. While these statements reflect the best judgment of management at the present time, they are subject to numerous future risks and uncertainties as detailed in our regular SEC filings and they may differ materially from actual results due to a wide range of factors. We undertake no obligation to update any forward-looking statements made during this call. And with that, let me turn over the call to Kurt Darrow, La-Z-Boy’s President, and Chief Executive Officer.

Thank you Kathy, good morning everyone. Yesterday afternoon we reported our third quarter results which included a number of large and unusual primarily noncash charges. These charges clouded the company’s actual operating performance in what continues to be a very difficult environment due to macroeconomic conditions. Mike will walk you through the various charges in just a moment, but before that I want to make several points which I believe speak to the progress we’ve made in changing our operating model and how those changes position us to weather the storm and operate efficiently in this environment. First without the various noncash charges, an $85 million or 23% decline in sales, our adjusted operating loss was limited to $5.4 million. Second we generated $28 million in cash from operations during the period even though our inventories increased 3%. Third we paid down our debt by $28 million. Over the past 12 months we have decreased our total debt by more then $60 million. And finally we believe we have the ability and resources to navigate through the changing marketplace. We have over $300 million in tangible net assets and with the many changes made to our business model over the past several years, we have built a strong and competitive infrastructure, one that requires minimal capital expenditures in the foreseeable future. Importantly we will continue to make the necessary changes to our business structure and property position La-Z-Boy for success in what we believe will be a protracted recession. I will turn the call over to Mike now so he can walk through the various charges for this quarter.

Thank you Kurt, we reported net sales of $288.6 million, down 22.7% from year ago levels and a net loss of $1.25 per share. Let me comment on the unusual items for the period so you can understand how we get to the adjusted operating loss of $5.4 million. I would like to note that we included a chart in our press release to illustrate the impact of the various noncash accounting charges and adjustments. These adjustments are in dollar terms rather then per share terms as it is difficult to apply our current effective tax rate to the charges to calculate a per share figure. Due to the dramatic changes in the stock and credit markets the impact of the economic conditions to our business and the condition of the banking industry and the overall squeeze on global liquidity the pressure on our long-lived assets and intangible assets has grown. With our market cap below the company’s book value the requirements to test the valuation of our intangible assets was triggered earlier then our usual fourth quarter annual testing. The result has been a significant impairment of our goodwill and trade name valuations mainly due to the decrease in our market capitalization over the past couple of months, our discount rate increased when calculating our enterprise value using the discounted cash flow methodology. This was the largest factor in the impairment charge during the quarter. In addition the significant reduction in our market capitalization caused us to test the recoverability of our long-lived assets. The result was an impairment of some of our fixed assets in our retail group. For the quarter we had an intangible write-down of $46 million and a $7 million impairment of property, plant, and equipment. After recording these impairments the remaining balance of our…

Clearly this has been a difficult period for everyone operating in our industry. Rising unemployment levels coupled with declining consumer confidence do not bode well for the furniture industry. Last fall when there was a precipitous curtailment of demand following the collapse of the financial and credit markets our management team reacted swiftly and made immediate changes to our operating structure beginning in early November. Every month since then we have continued to make adjustments. Since that time we have removed approximately $60 million of annual structural costs from the business in the form of employment reductions, changes to employee benefit plans, including our bonus programs, 401K matching and profit sharing plan, and the closure of a Bauhaus Upholstery facility. Every person remaining in our organization is focused on customer satisfaction, cost control, and productivity. In our upholstery segment our sales declined 29.5% to $199 million for the quarter and our operating margin was a negative 1%. Had we not had the adjustment to sales and profits resulting from the shift in the warehouse structure, we’d have been profitable even on the significant decline in volume. This is a testament to the many changes we have made to our operating structure not the least of which was the conversion of our La-Z-Boy branded facilities to the cellular production process. Additionally as Mike spoke about earlier we incurred a significant charge for bad debt which primarily related to the upholstery segment and impacted its performance. There are two major strategic initiatives afoot within our upholstery operation, our new cut-and-sew facility in Mexico, and our warehouse system. Last month we opened the Mexican based cut-and-sew facility and I’m pleased to say it opened on time and on budget. Today we have 140 people working there and have hired almost 100 additional people…

(Operator Instructions) Your first question comes from the line of Budd Bugatch - Raymond James

I want to make sure I understand the retail Op margin, the warehouse change, you say it effected the upholstery by $3.3 million and $12 million of sales, what impact would it have had if it were accounted for the old way on the retail segment.

We’ve also made a lot of changes within the warehouse structure by eliminating some duplicate cost and taking out some people, so we’re in the middle of that transition at this period of time but obviously some of the savings that we had in the retail section what was attributable to changing the warehouse but I would say its about half and half to some of the other things we’ve done.

So about half of the $3 million impact on the upholstery segment is, would have been if you had left under the retail operation, your retail margins would have been $3 million, or $1.5 million less.

No, the $3.3 million is just the, when we sell to our different divisions, we have to account for whatever that profit was in inventory. The $3.3 million is just the [limiting] the profit and inventory. It’s a one-time charge, it has nothing to do with the warehouse operations. That is just moving the inventory back onto upholstery’s books and taking the profit out of the inventory that was in there, that we eliminated in consolidation, that has nothing to do with the operations of the warehouse. The going forward will be what the cost of the operations of the warehouse are versus what we’re charging retail for that.

So its actually unsold inventory that you had shipped to the warehouses that had been in, underneath the retail segments that you had to report it as intercompany sales or intercompany profit.

Exactly.

So there’s nothing to read that this change had any impact on the retail operating margins themselves. That’s what I’m trying to get to.

I would answer it this way, there were three substantial improvements this quarter in our retail business, and they probably all had close to equal weight. One was an improved gross margin, two was more effective marketing spend, and three was the warehouses. And collectively they make up not only the $1.5 million improvement but also the recovery of the lost profit on the lost sales that we would have had a higher [degradation] had we not had all those changes.

So what you’re telling me is the warehouse operation by itself is still operating at a loss. If it was a standalone business its not a profitable business and so by removing that from the retail, you removed that drag.

Yes, but I would tell you in, and its our intention within the next six months maybe a bit earlier, as we bring in some more dealers into the warehouse system it will be self sustaining.

The beginning cash on the cash flow statement does not jive with the ending cash for the second quarter on the Q, its about $600,000 different, what did we miss here.

You’re talking—

When your looking at the cash flow statement, your cash and equivalents at the beginning of the period show a $15.116 million, and at the ending cash in the second quarter Q was $14.400 million and I’m confused as to what changed that difference.

I’ll have to get back to you on that. I don’t have the last quarter’s Q in front of me. I don’t have an answer for you on that.

You talk about an allowance for doubtful accounts I think of $35.8 million and on the balance sheet it shows $31 and I suspect that’s down another long-term asset so if you could break out for us, I guess other long-term assets include notes receivable or you may have converted some dealers’ accounts receivable to longer term notes.

Right, that is correct.

So what portion of that $66.9 million might that be.

It’s a little more then a third of it I would say. Our notes together, I’m just trying to think of that, I don’t know if we have that disclosure anywhere else. I would say about 40% of that balance, I’ll have to confirm that with you. But just in round numbers, about 40% of that balance in other is notes.

And finally the goodwill is left of $5 million, $5.1 million, what’s that associated with, is that [Kincaid], or is that.

That’s a VIE.

That’s the VIE.

Yes sir.

That’s the only thing left in goodwill.

Yes sir, that is all.

And that [passed the test], what was the discount rate, what if the discount rate change due, how much was it.

There’s a, the things that triggered the test for our company owned goodwill was the market cap change. The VIE is not part of the market cap so we’ll have to reevaluate that within the fourth quarter.

So do you think that’s likely to get written down.

You know I don’t know, because there are a lot of different factors that effect that and the same discount rates won’t be applied to the VIE as they are for the company. It’s a little odd duck to analyze that since we don’t own them.

And since if these were not on the books, you wouldn’t have this goodwill on the books and the goodwill would essentially be zero.

Correct.

Your next question comes from the line of Matt McCall – BB&T Capital Matt McCall – BB&T Capital: You talked about the retail changes and you gave a broad look, any more details you can pass along there and then more specifically the impact of the new initiatives on the break-even point of that business.

I think we covered most of that in our comments either in our press release or my comments, we are managing the business more aggressively. We have some outside retailers who have joined our organization in terms of leadership and in running some of the markets. And so every aspect of the business is being looked at. Changes are being made. The significant ones were in the three areas that I talked about, the gross margin, the marketing and the warehousing and we can continue to make some progress in that regard. However as I stated on the last call, without more volume we will not be in a position to break-even in that business and the break-evens are continuing to come down as we make changes to the operating model but we need some top line longer term to have it be a profitable business but in the meantime we believe we can make reasonable progress in losing less money in that business on a go forward basis. Matt McCall – BB&T Capital: I think in the past Kurt you may have talked about a volume increase that was necessary to get to break-even so that volume increase has improved I guess or decreased but you can’t talk how much or—

We may be able to do that in a quarter or so once we understand the new run rate of our operating expenses but I don’t want to speculate on that right now. Matt McCall – BB&T Capital: And then you mentioned the casegoods business being impacted by the desire for lower inventory levels, any way you could quantify the impact in Q3 of the de-stocking. It sounds like there’s, that you have occurring in that business.

Well the primary issue is with a 10 to 12 week supply chain and when business stopped in October as fast as it did, it came down, we had anticipated better business in the fall. Business through late summer and early September had been tracking to plan. And so you have that supply chain coming over from primarily Asia in our case and you just can’t put the brakes on. The dealers can put the brakes on buying it from you, but you have to take it in and so we’ve done that and we’ve got inventory in all of our groups, both our best sellers and our slow sellers, and so we’re going to go through a process of curtailing a lot of our purchases and systematically move that inventory through our sales the next 90, 120 days to get our inventories back in line. Matt McCall – BB&T Capital: On the covenants, the excess availability can you quantify what that excess availability is at the end of the quarter.

Yes, it will be in our 10-Q when we file it a bit later, its $57.2 million is the excess availability. Its pretty much flat with last quarter’s.

Your next question is a follow-up from the line of Budd Bugatch - Raymond James

Could you go over the tax situation, I know that you showed a modest tax benefit and I thought that deferred taxes had all been eliminated or allowance for so that there wasn’t to be as much tax and its complicated, but can you—

I can give you some clarity on that but let me answer your other question first, it seems like we’ve done some of this stuff years ago, in the Toronto market we combined the dealers up there and we now have one VIE, but we can’t show the consolidated cash on the balance sheet as an addition to cash, so we had to show it as opening cash, so I didn’t show that $600,000 as cash flow from operations. That’s the difference in the cash.

So you have to restate the cash essentially.

Yes, so that we don’t show it in the number, I could have put it as a separate line items that said opening balance of cash consolidated or something, but we just showed it as one line item.

So before it was incorporated into last quarter’s balance sheet in a VIE in a different classification.

No it was a non consolidated VIE. What I mean by that is we had, our Toronto market is split in half. And now its one market, one person runs the entire market. So that’s what we tried to explain that we have a couple more stores that were added into that VIE. It’s the same VIE but it’s the Toronto market. But its just that we had his books added on to ours and so it’s a, its one of those things that you don’t get that much clarity in the accounting standards on but the $631,000 is the cash that was on his books that we had to then put on as we consolidated and so we would not show the effect of additional cash running through our cash flow.

So it was his beginning cash.

Yes.

We had two dealers in Toronto, one was a VIE, one was not. The previous gentleman who operated the stores as VIE has left, the two operations became one and the business that was not a VIE is now as the combined entity.

And now a consolidated VIE.

Yes, that’s correct.

Is there any more VIEs or it just, he just took one of your VIEs, took over some other stores.

Yes, in that market, correct.

How many total VIEs do you have now.

Still the same four. Did I make you forget your question?

No, that is really, that’s not the most easiest explanation for a small amount of money.

That is correct. On the tax, the tax the way it works on the trade names is, where the goodwill is normally not deductible for tax purposes trade names, the accounting standards will require us to put a deferred tax liability when we booked the trade names. So we did have some deferred tax liability since those trade names were on our books. When we wrote the trade names off we had to then take the benefit from those off our deferred tax liability and show them on our P&L. So that is the bulk of that benefit recorded in this quarter, mainly relating to the trade names and the way we recorded some of the goodwill, but that $4 million benefit is mainly due to the intangible asset write-offs.

So that’s not a continuing thing, we’re not going to see, if you have “a clean quarter”, in the fourth quarter you’ll essentially have, the only tax issues will be [inaudible] state tax issues.

That is my hypothesis right now unless something else changes that I’m not aware of.

[inaudible] a little bit if you would, the idea of taking the higher allowance out of the operating loss number.

Here’s what that was trying to do, and that’s why we put selective items in there, we’re trying to show the large noncash changes over last year so that like yourself could understand what the components were in there and then if you decided not to put them in your analysis I have no issue with that but it was such a significant increase over last year in comparing that we just wanted to illustrate that in the numbers.

Can you quantify the number of dealers that might have been impacted on that.

There are several, its, we tried to quantify the markets that were causing the largest problem.

Because in the past you would have taken operating income from those sales of those items, [to] those dealers.

You’re correct but we just tried to give some quantification how large it was this time not really trying to say it was an unusual item or a one time, that’s not my intent.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you everyone for participating on our call this morning. Should you have follow-up questions, please give me a call, I will be available today.