Good morning, ladies and gentlemen. Welcome to the La-Z-Boy’s fiscal 2010 fourth quarter and year-end conference call. (Operator instructions) It is now my pleasure to introduce Ms. Kathy Liebmann, Director of Investor Relations for La-Z-Boy Incorporated. Thank you, Ms. Liebmann, you may now begin.

Thank you, Rob. Good morning everyone. Thank you for joining us to discuss our fiscal 2010 fourth quarter and year-end’s results. Present on the call this morning 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 before turning the call back to Kurt for his concluding remarks. We will then open the call to questions. As is our custom, the time allotted for this call is one hour. A telephone replay of the call will be available for one week beginning this afternoon. These regular quarterly investor conference calls are one of La-Z-Boy’s primary vehicles 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. Kurt?

Thank you, Kathy, and good morning everyone. Yesterday afternoon we reported our fourth quarter results for fiscal 2010. For the quarter we earned $0.26 on a sales increase of 9.2%. For the year we earned $0.62 on a 3.9% decline in sales. From an operating environment perspective, fiscal 2010 was undoubtedly one of the most challenging years our company has faced at its 82 year history. However, it was also the year when the transformation of our company came to fruition. Our performance for the full year, where we generally outpaced our peer group demonstrates the success of our strategic initiatives, La-Z-Boy’s resiliency in a difficult market, and our ability to adapt to change. Today, we are a much stronger company, one that is equipped to operate in the dynamic marketplace and one with a focus on growing the top line profitably. Before going through a review of our operating segments, I would like to take a moment to the recap a number of the strategic initiatives and changes our company has gone through over the past several years to give you a context or perspective for our operating structure today. In addition to our focus on lean manufacturing, thriving in this environment is also dependent upon the ability to be nimble and be willing to make difficult decisions. As I mentioned earlier, the ability to adapt is critical in the furniture industry. The business has undergone a sea change over the past decade, and not only does it differ from what it once was in terms of the way we manufacture and sell furniture, but in 10 years it probably won't look like it does today. I have to credit my team for embracing the challenges, developing creative solutions, and adapting our business to what is and what will…

Thank you, Kurt. For the fourth quarter, La-Z-Boy reported sales of $310.7 million and earnings of $13.7 million or $0.26 per share compared with the earnings of $5.2 million or $0.10 per share in last year’s fourth quarter. Our results for the period include a $0.01 per share restructuring charge, primarily associated with the consolidation of the company’s Casegoods facilities, an income of $0.04 per share related to a reversal of valuation reserves on deferred taxes. Since our valuation reserves are based on each separate tax jurisdiction, reversals of valuation reserves are based on whether it is more likely than not that we will be able to now use the deferred tax assets. Additionally, based on current expectations, we anticipate reversing most of our Federal tax valuation reserves during the latter part of fiscal year 2011. For the full fiscal 2010 year, we reported sales of 1.18 million and earned 32.5 million or $0.62 per share versus a loss of 122.7 million or a loss of $2.39 per share in fiscal 2009. Fiscal 2010’s full-year results include $0.04 per share in restructuring related to the consolidation of the company's Casegoods facilities, as well as costs associated with the previously announced store closures in the company's retail segment. Income of $0.04 per share related to the previously mentioned reversal of valuation reserves on deferred taxes, an income of $0.05 per share in anti-dumping duties received on wood bedroom furniture imported from China. The last years result’s included a number of charges. We had a restructuring charge of $0.24 related to various plant warehouse and retail store closures, a non-cash intangible write-down of $0.85 per share relating to goodwill and trade names, and a $0.15 per share non-cash impairment of long-lived assets related to our retail segment. We also had a $0.74…

Thank you, Mike. We are cautiously optimistic the industry has bottomed out and we're seeing some signs based on our traffic, our written orders, the strength of our Upholstery sales, and some other public data points. However, we do remain concerned about the overall macroeconomic environment, which is still plagued by high unemployment, low consumer confidence, and an unstable housing market. That said, our challenge for all of fiscal 2011 will be to strike the right balance of sales growth and cost reductions against the increased raw material and employee benefit cost, as well as these macroeconomic headwinds. Overall, we are confident that our operating structure, strong brand, and vast network of distribution properly positions us for sustained growth and profitability and we believe La-Z-Boy has the wherewithal and staying power to meet the challenges that may come before us. I would like to take this opportunity to thank our shareholders, customers and suppliers for their support during what was a difficult year, and I would especially like to thank our employees in our various sales organizations. Our team worked together over the course of the past year to execute many important projects that turned this company around, and I deeply appreciate their commitment and dedication to La-Z-Boy Incorporated. We thank you for being on the call today and your interest in La-Z-Boy, and I will now turn things back to Kathy.

Thank you, Kurt. We will begin the question-and-answer period now. Rob, please review the instructions for getting into the queue to ask questions.

Thank you. (Operator instructions) Thank you. Our first question is coming from the line of Budd Bugatch with Raymond James. Please proceed with your question sir. Budd Bugatch – Raymond James & Associates: Good morning, Kurt. Good morning, Mike. Good morning, Kathy.

Hi, Budd. Budd Bugatch – Raymond James & Associates: A couple of questions. And first, thank you for the incremental information on the incremental margin. That's quite helpful. You talked about the incremental costs, raw material costs, and I assume that that's in addition to the incremental margin costs, but are you taking actions, and if I missed that, please help me to overcome that in terms of pricing or other factors that you can do to mitigate that?

Budd, I would answer that question in the following, we are seeing a lot of volatility in the pricing of raw materials. As an example, we paid in May about 40% plus more from plywood than we did in March, but now that has dropped back down another 15% here in June, and we're trying to get some clarity into the longevity of these up and down. There seemed to be some concern that there wasn't enough capacity on some of these raw materials. More capacity has been brought on. Raw materials are coming down. So as I said in my remarks, we are trying to strike the right balance. If the raw materials stay at a certain level, we believe with our cost saving initiatives and our growth we can overcome them. If they get to a different level, obviously, we will have to take some price increases to mitigate that. We are watching it very closely, and we will probably have to make those decisions in the next month or so about what to do there, but we are conscious of the ebbs and flows of what is going on. Budd Bugatch – Raymond James & Associates: What's a good way to think about what level over which you might have to raise prices? Is it half of that – half of the projected increase?

I think – our answer to that is it would have to be more than half of that projected increase for us to have to move forward. We still have a lot of cost savings projects outside of Mexico that are coming online, and as we detailed in our public comments, the acceleration of our cost savings programs, particularly as they relate to things that are dependent on volume accelerate in the second half of the year. So we're trying to watch the timing of those, and the timing of the materials, and I don't want to really pick a number there, but certainly we have an idea where that is. Budd Bugatch – Raymond James & Associates: Okay, and talking about Mexico, you had previously said about $20 million of savings, and here I think you've characterized it as $15 million to $17 million, based on the current level of volume.

Yes. Budd Bugatch – Raymond James & Associates: Which has been increasing, so how should we think about that for fiscal 2011?

Well, let me take you back to when we made the decision. Budd if you go back to the date we announced this, which was April of 2008. At the time we said that we were going to save $25 million in total with the two announcements we made. One was the closure of Tremonton; one was the opening and transition of our Mexican facility. We said that $5 million of that $25 million was as a result of the closing of the Utah plant. And at the time we were doing – the volume we were doing in our anticipated volume made up the other $20 million. Our volume from that level of slightly two years ago is down about 17%. So you take the 17% away from the $20 million, and you get into the range we are giving. So it has nothing to do with not getting the cost we want. It all has to do with the size of volume that we're running through the facility. Budd Bugatch – Raymond James & Associates: Okay. And you think that will accelerate as the year goes on, and how will that rate?

Well, I think the volume will accelerate as a typical year for us. It has historically been given that the back half of the year is stronger than the first, and also I think will become more efficient and more productive at the facility as they get more time under their belt and more training and more experience. Budd Bugatch – Raymond James & Associates: Okay, just my last area of inquiry has to do about retail. You gave us, I think, 2.5% comparable store sales increase for the system, and I think that was lower than what we saw in the previous quarter, although the hurdle rate was somewhat less onerous. Are we seeing a retail slowdown, and is that something we should be worried about?

Budd, I think there would be two factors there. One, in our own company retail performance, this seemed like a long time ago, but you will remember on our call last quarter, we missed a pretty good opportunity over President’s weekend because most of our stores are on the East Coast, and they were really inundated with snow. And I think the rate of improvement in the retail business probably since the 1st of April has mitigated to somewhat of a flat line from where it was increasing through the holiday season. So I think it is a mixture of a few things. Budd Bugatch – Raymond James & Associates: Okay, thank you and good luck, and we'll look forward to talking to you soon.

Very good. Thank you, Budd.

Thank you. Our next question is from the line of Matt McCall with BB&T Capital Markets. Please proceed with your question. Matt McCall – BB&T Capital Markets: Thanks, good morning, everybody.

Hi, Matt.

Hi, Matt. Matt McCall – BB&T Capital Markets: So, I think I want to – you might have just answered this last one, but I wanted to ask about the trends in June. Did you just say that since April you've seen, what was that? You said the rate of improvement had flat lined, so you'll start seeing growth?

I didn’t make any comment about June Matt. I'm just saying that, you know, our bias is this – the business trends and the economy is not going to jump up and be robust overnight. So, we are looking at a slow, gradual improvement in the economy, and that relates to our business. And we are going now into the seasonally slower months of the year. And even though they are compared against that from a year ago, we're just not seeing any indication that overnight business is going to get substantially better. Matt McCall – BB&T Capital Markets: Okay, that's fair, and just another follow-up. You said – I understand the way the math works and the 17% volume decline, why you've taken that cost savings or projected cost savings down. Just to make sure I understood one comment, does that incorporate the seasonality? So basically, you're saying this year based on current levels running the seasonality forward, we expect $15 million to $17 million, is that the way to look at that, or is it on today's volume? I just got lost there in the seasonality comment.

No, it would be our internal projections on what we think our volume is going to be for all of fiscal ’11 compared to fiscal ’10, and it would ramp up accordingly, but no, it is not based on the first quarter's volume. It is based on our projection of what our full year volume would be and how many units we would actually manufacture in the Mexico facility. Matt McCall – BB&T Capital Markets: And so that – you said you're down 17% from that level, so, I'm not trying to get any insight into this year, I'm trying to make sure I understand – down 17%, and use that as the justification for the lower projected cost savings, so that assumes really no growth this year in that facility, yes?

No, let me try to help you with the math. I said we were down 17% from the level that we pegged, when we announced the move to Mexico, and at that time our volume was better, and that time was before the fall of ’08. At that time we had projections for growth. So when we met the projections on $20 million of savings in Mexico, it was based on one set of assumptions about volume. Today we're running about 17% lower than that projection. It has nothing to do with how we ran last year, what we're going to do this year. It is from that starting point 2.5 years ago.

And we're not making any projections right now on what our sales growth is, and not going to be this year Matt. We are just – remember we're just saying that because our first quarter is normally our lowest level quarter, you can't just divide our savings by four. You have to take into account the seasonality as well. That is what I am trying to explain [ph]. Matt McCall – BB&T Capital Markets: I got you. The confusing part for me is, you were saying $15 million to $17 million, you have to base that on some type of – some type of top line, and –

And we have. We are just not going to tell you what that is. Matt McCall – BB&T Capital Markets: Right, but then you referenced the 17%, that's where I – you see where I'm getting locked up? I'll move on.

Okay. Matt McCall – BB&T Capital Markets: So, the contribution margin commentary was helpful. Can you provide any further detail by segment? The number seems to make sense and it sounds like there's some – just to clarify, I guess, the first part, there are some assumed raw material inflationary pressures, some employee cost pressures baked in, and Mike, I think you said the low end of the range would see more pressure there. Any more commentary around the different segments, and, just, I don't know, directionally, any more help you can provide there?

The only comment I would add to that Matt is we would continue to think about next year still having stronger sales increases in Upholstery than Casegoods. I still think Casegoods is going to lag Upholstery in the industry, and therefore with our numbers, I think Casegoods will start to improve where they have been going backwards here. I'm talking again about the industry, but I don't think they are going to rapidly change overnight, and they have been on a two or three-year decline here overall. So I still think the Upholstery business has a little more upside for next year than the Casegoods business.

And the only reason for the range – I mean the discussion I gave on that is Casegoods, as we purchased a lot of our finished goods there is not as much variability in our plant pickup or other costs associated with it. So there is not as much variability on increased volume, whereas in the Upholstery side we have more operations, there is more variability as we increase growth. And then retail, obviously we get both the retail and the Upholstery sales there. So that is why the range has a slight went up [ph] in a range like that. Matt McCall – BB&T Capital Markets: Right, and to Kurt's point, the Upholstery segment is expected to be a little stronger, and you just stated, I think, that the incremental margin is likely a little stronger there, so maybe that 20% to 30% now seems a little conservative based on those assumptions. It sounds like there's a pretty strong fixed-cost aspect of that business, despite the cellular effort, so, in fact, the question is – is there any further comment by segment that you can provide on the contribution margin front?

No, I don't think there is – this was our best attempt Matt, and the other thing, you know, we don't have a crystal ball and right now it is raw materials. We have given you a range on what we think it could be, you know, and realistically it could be 20% more than that or it could be 20% less than that. We're giving you our best thought at this time with what we know, but I have to take the heads that what we know is not a long term pricing arrangement with any of our raw material suppliers. You don't get 6 and 9 in yearly contracts in today's market. So, in best we have a 60 or 90 day contract and visibility on this. So, (inaudible) about what perhaps the back half of the year is going to look like in raw materials, but as I said on the last call, if there is more demand for raw materials, it must mean the economy is improving a little bit. Then there is more need for things, and so that would be a good sign. This is a very liquid situation right now, and we're trying to manage it to the best of our ability. Matt McCall – BB&T Capital Markets: Thanks for taking the questions. Not trying to be hard, just trying to get an understanding. Thank you all.

We understand.

Our next question is coming from the line of Todd Schwartzman with Sidoti & Company. Please proceed with your questions. Todd Schwartzman – Sidoti & Company: Hi, good morning, folks.

Good morning Todd. Todd Schwartzman – Sidoti & Company: First, Kurt, on the input prices, the example that you gave of plywood seems to really speak to volatility as much as anything else. Is there any single raw material or category that has been more problematic in recent months, that has increased slowly or steadily, that led you to issue that kind of caution for at least the first quarter?

Well, I think there is a couple of issues here Todd that we try to lay out in both Mike’s comments and our press release. You got to remember we're going against in the first quarter, we are not going forward yet, we're going against the first quarter of year ago, when the raw materials were at their lowest point that we have seen in the last five quarters. So raw materials went up, particularly in the second half of last year, and we paid more for raw materials in the third quarter than we did in the second, and we paid more for the fourth quarter than we did in the third. So, sequentially we have been seeing that happening. But now you are comparing the first quarter of our new year to last year's first quarter and the delta change on that is the most significant we've seen in the last 5 quarters, and I intentionally used the example of plywood, because it has been the most volatile, but there is no major component of our raw material that hasn't had some increase. Todd Schwartzman – Sidoti & Company: Got it, but as the year plays out, I would suspect, based on what we're seeing now with energy prices, the various poly prices would not be expected to be too problematic, or that that – I realize that's subject to change, but is that a fair assessment?

That would be a good thing to see, and that is why we don't want to overreact to do structurally or price increase wise, or anything until we get some – a little more clarity on what that looks like. Todd Schwartzman – Sidoti & Company: Okay, and also if you could speak to the level, year-over-year, of promotional activity both in Q4 as well as your expectations for 2011?

You have to help me Todd, define what you mean by promotional activity? Todd Schwartzman – Sidoti & Company: Selling price discounts.

Well, you know it varies by business group and by time of the year. I don't think it is really a whole lot – it is a whole lot different as far as discounts. What I would add is that and we're starting to see this shift back a little bit, but for the majority of last year across all of our companies, we sold a little higher percentage of the starting third of our lines than we did in the previous year. So all the commentary about the customer looking for value, the customer wanting to be cautious with their spending, so we had a little shift in selling a little bit lower priced items in general. Not that we took a lot of discounts, it is just our mix shifted more in line with the front third of our lines in our offerings. Todd Schwartzman – Sidoti & Company: Okay, and with the supply chain, are you seeing any delays at all in containers coming from Asia?

That is a very good question Todd, we're seeing delays everywhere. We are seeing delays on containers. We are seeing delays from China from lack of available workforce. Again it is a very fluid situation right now, and we had numerous things that are happening and the reliability of our supply chain today is not ideal. A condition of recovering from what happened 18 months ago and trying to get everybody to understand what is the new operating norm, what is the new level. People cut back quickly, they are really reluctant to add back unless they see sustainability and everybody has got a different view of the world. So that is causing these disruptions from time to time in all types of different supply categories. Todd Schwartzman – Sidoti & Company: Is inventory where you want it right now, particularly on the Casegoods side?

I think Mike’s comment about our inventory in line with sales; we did a lot of work in the last 18 months to get our inventories in line. We took our medicine on some of our old inventory and flushed it out. Our discounting, particularly on our Casegoods business won’t be as high this year as it was last year. So yes, we feel reasonably good about our inventory levels, the quality of our inventory today and the work our team has done the last year in managing that process. Todd Schwartzman – Sidoti & Company: And on the Upholstery side, what's your average delivery time these days for a custom Upholstery?

That goes back to my earlier – if we have the materials it’s pretty good. If we don’t have the fabric and leather it’s pretty bad. So – but it’s – you know, it’s not an issue with our – it’s everything where it’s only supposed to. We have available inventory of the fabric and leather. We can ship Upholstery goods in three of four weeks consistently. Todd Schwartzman – Sidoti & Company: And what percentage of finished goods do you have the – all the necessary components for?

It changes so rapidly and some of it is demand, some of it is forecasting, some of it is supplier, and it varies by company. So I don’t really have that number, but I would just say it’s not where we wanted to be overall, but we think before we head into the fall that we’ve made some moves to have our service levels be back to normal, and we’re cleaning up some of the delays we’ve had over the summer. Todd Schwartzman – Sidoti & Company: Okay, and Mike, I'm not sure if you quantified in your prepared remarks, but I was curious about the level of SG&A in the fourth quarter that was bonus or otherwise performance-based, or just in general, you know, non-recurring, going forward?

I did not – we don’t – we have not gone into that kind of detail on that. We do have some comments in our (inaudible) annual report in the 10-K relating to some of the costs in corporate and other that has adjusted for. I think it’s – I think we’ve talked about it being about $5 million to $6 million cost over the full year in that or that section of our income. But, it has been no significant number in the given quarter that would be a callout. It does affect our SG&A, but I’ve not given any clarity on that. It’s not something that I would callout every quarter, although for the full year it’s obviously something that we talked about for the cost. Todd Schwartzman – Sidoti & Company: Perfect. Thank you very much.

Okay.

Thank you. (Operator instructions) Our next question is from the line of Stanley Elliott of Stifel Nicolaus. Please proceed with your questions. Stanley Elliott – Stifel Nicolaus: Good morning, thank you all for taking my call. A quick question on the Casegoods side, it looked like revenues were up sequentially, but the losses were down. Was that due mainly to the consolidation that you guys have gone with the manufacturing operations?

I think it’s a number of things. I think the consolidation had some impact. I think in the fourth quarter we also consolidated our Hammary reorganization into the Drew/Lea organization, and moved out some inventory there as well. And so I think we took most of the last year to get the cost structure of our Casegoods business in line with the volume they are doing today and the combinations of the three moves we made with manufacturing, the warehousing, and the consolidation of Hammary we think puts us on a platform or even at this volume we should be able to start earning some operating income in that segment. Stanley Elliott – Stifel Nicolaus: As far as the commentary on the $5 million of annual savings, have you guys broken out how much was realized this past year, or is that going to be a $5 million net number for next year?

No that’s a 12 month number from when we started the various things and it’s kind of a fluid number. We combined the two facilities, manufacturing facilities starting in the third quarter of last year, and when you start up new product lines in a factory that they never made some orders, there is inefficiencies and things going on early on. And so that took a while to absorb, and we probably got some benefit of that in the fourth quarter as they got more and more efficient, and the other big component of that is we did not vacate our leased warehouse until the end of April, and so we are just starting to get the benefit from that. So the $4 million to $5 million is not all coming in fiscal ’11 to tell you exactly what was in fiscal ’10. I just will be guessing at that and I don’t want to do that. Stanley Elliott – Stifel Nicolaus: Okay, fair enough. And lastly, are there any updates on the CDSOA? I think there was a case that was unrelated to furniture that was scheduled to go to the Supreme Court and did not end up getting heard by the Court, and I was wondering how – if anything is new on that front.

That’s a very good question. It’s a very complex situation and I don’t want to put myself [ph] as an expert in this, but you are correct in what you stated. There was from a different industry the third appeal on the anti-dumping case. I think it was in ball bearings and the Supreme Court refused to see it. Now if there was no other legal challenges what that would indicate is that a number of – a lot of the money that has been setting aside waiting for these legal rulings would begin to be paid out, but there could be other challenges, there could be other rulings, there could be things we don’t know about, and one thing that we learned going through this process, if you are dealing with a government, things don’t happen quickly. So, you know, we don’t put that in any of our forecast, we don’t put that in any. We would just continue along the business of trying to make irregardless of that money our Casegoods business profitable, but obviously we believe as one of the petitioners, we believe that the Supreme Court’s decision not to hear the case was a correct one, but how that manifests itself and when there will be (inaudible) and everything frankly your guess right now Stanley is as good as mine. Stanley Elliott – Stifel Nicolaus: Great. That's all I had. Thank you very much, and good luck.

Thank you.

Thank you.

Thank you. There are no further questions at this time. I’d like to turn the floor back to management for closing comments.

Thank you everyone for being on the call this morning. If you have follow-up questions, please give me a call. I will be available this afternoon. Have a good day.

And this concludes today’s teleconference.