Kathy Liebmann – Director of Investor Relations Kurt L. Darrow – President, Chief Executive Officer Louis M. Riccio Jr. – Chief Financial Officer

Analyst for Budd Bugatch - Raymond James John Baugh - Stifel Nicolaus & Company, Inc. Todd A. Schwartzman - Sidoti & Company, LLC Matthew McCall - BB&T Capital Markets Barry Vogel - Barry Vogel and Associates [Straf Meter] – Scopia Capital

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

Thank you, Everett. Good morning everyone and thank you for joining us to discuss our fiscal 2010 third quarter 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, 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. The 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? Kurt L. Darrow: Thank you, Kathy. Good morning everyone and thanks for joining us this morning. Yesterday afternoon we reported our third quarter results for fiscal 2010. What a difference a year makes. We were pleased to report not only our fourth consecutive quarter of profitability, but an increase in our consolidated sales of almost 6%, led by an adjusted 11% sales increase in the Upholstery segment. While the operating environment remains challenging, we are beginning to see some encouraging signs. Whether or not they are sustainable is uncertain, but regardless of the environment we will insure we manage our cost structure, maximize our marketing initiatives, maintain our commitment to value, quality, comfort and innovation, while insuring the strength of our balance sheet to give the company the flexibility and maneuverability it needs. We have done a lot over the last several years to bring us to this point. We executed against the set of strategic initiatives that greatly enhanced the efficiencies of our operation. We made many very difficult decisions the last 18 months that reduced our cost structure. And with other strategic initiatives underway, we are poised to garner additional benefits going forward. We are also fortunate with the respect of being primary an Upholstery manufacturer. As you know, Upholstery tends to be more resilient during challenging economic times due to our lower price point compared to Casegoods. And we operate in the mid-price segment of the market, which is a good place to be, particularly right now. But we are not just any Upholstery manufacturer. La-Z-Boy is the best known brand in the business, a company with more than 80 years of brand strength and heritage. And most importantly, it is a brand that people trust, which is very meaningful during difficult times. We have done a lot of blocking and tackling over the last several years and we’ll continue to manage the business aggressively. However, our core focus today is on increasing sales to profitably grow our company across all business segments. Other highlights for the quarter include per share earnings of $0.21, an 11.1% operating margin in the Upholstery Group, a 42% decrease in the Retail segment’s loss, $22.7 million in cash generated from operations, an increase in our cash position to $80 million. In our Upholstery business, the improvement in strength of our operating margin demonstrates the efficiencies with which we are running our operations. With much of that contribution stemming from the La-Z-Boy branded business, it is a credit to the cellular manufacturing structure we put in place. While an expensive process requiring almost three years of implementation, it is bearing fruit and we are manufacturing furniture faster and with better quality at a much lower cost. Our other Upholstery operations, while not utilizing the cellular platform, have also made changes to their operating models and are contributing to the segment’s performance in both sales and operating profit. Our Mexico cut and sew center is on target to be transitioned for all custom fabric kits by the end of this fiscal year and we expect to realize a portion of the estimated $20 million in annual savings in our fourth quarter, with the remainder realized in fiscal 2011. We continue to make further progress on our regional distribution center program and will open a fifth facility in southern California in May. This will replace three independent dealer warehouses, two in the Los Angeles area and one in Las Vegas, and will service 23 stores. Once the distribution center is open and fully operational, our five warehouses will serve 68 company owned stores and 46 dealer owned and operated stores. This equates to 37% of our overall store population, and as we move forward with our regional distribution center initiative this number will continue to grow. Although too early to consider our same-store sales figures for the quarter a trend, we do find them encouraging. More importantly, we believe they are indicative of La-Z-Boy increasing its market share. Throughout the past year, we have maintained our marketing initiatives while many of our competitors pulled back. By highlighting the value, comfort and quality attributes of our brand, as well as the La-Z-Boy Furniture Gallery Store as a destination in which to shop, we are driving additional traffic to the store system. At the same time, when many furniture retailers throughout the country are closing their doors, our advertising program is working to keep the name La-Z-Boy top of mind. Now let me spend a few moments talking about our Casegoods operations. As I have discussed in many forms this past year in general, Casegoods were much harder hit by the economic downturn, given the generally higher cost associated with groups of wood furniture versus upholstery pieces. However, for the quarter on a double digit sales decline, we did generate a small profit. Last fall we completed the consolidation of our two manufacturing facilities and are on schedule to transition our leased warehouse operation to a company owned facility this spring. Based on current volume, these move will save the company $5 million per year, with a small portion of that benefit realized in the third quarter. Additionally, three weeks ago we announced that we are consolidating our American Drew/Lea and Hammery operations to give us further operational efficiencies and the ability to leverage our global supply chain. Our Casegoods team is resolute in their efforts to find ways to reduce costs and improve the performance of the business while working to strengthen their product design, development and marketing initiatives. During our last call we highlighted the introduction of the Nickelodeon Rooms by Lea collection, which was introduced at the October market. As we noted at that time, customer response was enthusiastic and we began shipping that collection this month. In our Retail segment we continue to make solid progress and improve the operating performance of the segment by reducing our quarter over quarter loss by 42% or $3 million. The Retail team is doing an excellent job in improving our gross margin, exhibiting tight expense controls and increasing the average ticket. As I mentioned earlier, we have maintained our marketing initiatives targeted at driving traffic to the stores, and with several events throughout the quarter we did experience a lift in traffic. Importantly, our team was successful in converting that traffic to sales, utilizing a number of tools and techniques developed by our organization this past year. Our fixed costs continue to be high in the Retail segment given our lease structure and the expensive markets in which we operate, and an increase in volume is necessary to make our Retail segment profitable. However, as we think about our integrated Retail model, with the incremental improvements each quarter in our Upholstery margins and our decreasing Retail losses, we continue to move closer to a cash flow breakeven point for the combined entity. And now I will turn the call over to Mike to discuss our numbers in more detail. Louis M. Riccio Jr.: Thanks, Kurt. This quarter, La-Z-Boy reported sales of $305.1 million and earnings of $11 million or $0.21 per share. This compares with a loss of $64.5 million or a loss of $1.25 per share in last year’s third quarter. As Kurt said, what a difference a year makes. Our results for the current period included a $0.01 per share restructuring charge, primarily associated with the consolidation of the company’s Casegoods facilities and the previously announced store closures within the company’s Retail segment. And our results also included income of $0.05 per share reflecting anti-dumping duties received on imports of Chinese wood bedroom furniture. Because of the unusual items included in last year’s third quarter results, year-over-year comparisons are difficult, but I will outline the components included in last year’s third quarter. We had a non-cash write-down of $46 million for the intangible assets, and a non-cash $7 million impairment of property, plant and equipment. These charges reflected the weakness in the financial and credit markets during the time, which caused the company’s marketed capitalization to fall below its book value and triggered the requirement to test the valuation of the company’s long lived assets. They also had a $5.1 million write-down of investments and income of $8.1 million in anti-dumping duties. We continue to focus on reducing our effective tax rate for the year by accelerating expenses for tax purposes when possible, which resulted in a tax rate of 37.4% for the third quarter. Going forward, we expect our effective tax rate to be in the range of 38 to 39%. Now let’s shift to the balance sheet. During the quarter we maintained our working capital level; increased our cash by $20 million to $80 million, leaving us with a net cash position; decreased our debt to capital ratio to 12.8%; and maintained the availability on our credit line, which at the end of the third quarter stood at $84.4 million. As we reported when we entered into our credit agreement almost two years ago, our excess availability fluctuates based on our outstanding borrowings, eligible receivables in inventory, among other factors such as outstanding letters of credit. La-Z-Boy has always taken a conservative stance with respect to our balance sheet, and we remain committed to maintaining its strength to allow the corporation the greatest flexibility, particularly if we experience another severe market downturn. Our inventories for the quarter increased slightly in anticipation of the Chinese New Year, when many of our suppliers close their facilities to celebrate the holiday. In order to insure there’s no disruption in service to our customers, we typically order more rolled goods, cut-and-sew kits and wood furniture ahead of the holiday. Our capital expenditures year-to-date were $5.7 million and for the full fiscal year 2010 we expect them to be in the range of $13 to $15 million. Capital expenditures are primarily related to IT upgrades, our cut-and-sew center in Mexico, transportation equipment and ongoing maintenance of our facilities. Depreciation and amortization is estimated to remain in the $23 to $25 million range. And I will now turn the call back to Kurt for some closing remarks. Kurt L. Darrow: : Thanks, Mike. While the industry is certainly not out of the woods yet, we do see some encouraging signs with respect to the growth in our Upholstery business, stronger written sales and the improvement in our retail performance. While too early to predict an economic recovery, we believe we are well positioned to capitalize on any uptick in business. Across our various operating companies, La-Z-Boy Incorporated has a broad product offering, targeted for the mid-price customer. We are an efficient manufacturer with the strongest brand in the industry and have a vast distribution network to which to sell and market our various products. We look forward to better times ahead for our industry and maintaining our leadership position. We want to thank you for your interest in La-Z-Boy today and for being on our call. I will now turn things back to Kathy for the question-and-answer period.

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

Thank you ma’am. (Operator Instructions) Your first question comes from Analyst for Budd Bugatch - Raymond James. Analyst for Budd Bugatch - Raymond James: I was wondering, Kurt, if you could maybe, you talked about it in the release kind of improving traffic trends at Retail. Could you comment maybe a little bit more broadly on just the health of the Retail network and what are you seeing in terms of the dispersion of performance maybe geographically? And what markets are doing better than others? Kind of what’s the range from the better performing areas versus the worse performing. Kurt L. Darrow: I’ll take a stab at that, Chad. You saw from our same-store sales releases for the quarter and for the year that there’s progress being made the farther we get away from the fall of 2008. For the balance of 2009 the middle part of the country, probably from Minnesota through Texas, performed better than either coast. We certainly had the problems that we’ve talked about many times before in California, Arizona, Nevada, Florida and Michigan for other reasons. Probably the part of our business in the store business that remained the strongest throughout last year was Canada. And then when we start to get some wind behind our sales we have snow up and down the East Coast, which has caused a number of our stores to be closed off and on here the last couple of weeks. So it’s an evolving trend. We have pockets of good business and pockets of business that’s a little more challenging, but overall 300 plus stores are all improving it seems a little bit every week, every quarter, and heading in the right direction. Analyst for Budd Bugatch - Raymond James: I guess another question in regard to the savings from Mexico, we talked about a $20 million annualized run rate with some benefits beginning in the fiscal fourth quarter. Do we think about that as kind of the full $5 million quarterly run rate in Q4 or does it start off below that and then we ramp up as we move into the next fiscal year? How do we think about that for modeling? Kurt L. Darrow: We would advise you, Chad, to think about it in your latter statement. Both with the Mexico transition and with our warehouse transition, depending on how fast we get everything completed, the change in the people issue that happens with these changes, any clean up costs we have by exiting places. So you’ll start seeing a progression and then as you head into next year, our efficiencies in our Mexican cut and sew operation should improve as the year goes on. So I would think it would not be right to take a straight line, $5 million per quarter approach to this. It’ll kind of build to a crescendo as the year progresses. Budd Bugatch - Raymond James: Kurt, in past calls you’ve talked about needing to get about a 20 to 25% volume increase to get you to breakeven in the Retail segment. Is that still kind of the right neighborhood? Is that the right way to think about it or could you give us an update there? Kurt L. Darrow: That number is still fairly relevant, Chad. We did make some progress this quarter on improving our gross margin and continued on our tight cost controls but that 20, 25% range is still where we need to be to have a solid Retail business. Budd Bugatch - Raymond James: I think I read in the Q that raw materials were about a 2.1% gross margin benefit year-over-year. As we look forward, kind of how does that play out? Does that become a headwind in Q4 or early next year? Could you give us a sense of what you’re seeing and feeling there? Louis M. Riccio Jr.: Yes. Our bias on raw materials right now is they are better than they were a year ago but actually they’re up sequentially from last quarter and we would think they would continue to slightly edge up here as we head into the fourth quarter and head into next year. In our particular situation in certain of our companies with certain of our commodities, we have contracts that protects us for a certain period of time and other places we don’t. So it’s very hard to quantify, but I don’t think you can assume that raw materials are going to stay at the suppressed levels here as we roll out the next 12, 15 months.

Your next question comes from John Baugh - Stifel Nicolaus & Company, Inc. John Baugh - Stifel Nicolaus & Company, Inc.: Kurt, this is a tough one, but do you have any sense in, just talking Upholstery now, what comparable companies in your price point, what the industry did? You mentioned you’re taking share. I totally agree with that statement. You were up 17% in the segment. I can’t believe the industry where your peak was up close to that. Any sense of what you think the industry again and your relevant competition might have done or is doing? Kurt L. Darrow: Well, John, just a couple of comments there. One, our Upholstery business after the adjustment we made on how we handle our company owned distribution centers, our adjusted Upholstery sales were up 11%. It’s still a damn good number but it wasn’t the 17 as reported on the financials. And you know we can only base some of our comments on what gets reported publicly. Some of our competitors don’t break out their sales by company or by product line. But a lot of our data comes from conversations with our major customers, how much their business is up compared to how much their La-Z-Boy business is up. We look at our same-store sales compared to the other companies that have reported their same-store sales and believe ours is ahead of that, so it’s too early really to have hard data on the last three months of what the industry is doing. And as you know with the dominance of the private companies in our industry, particularly in the Upholstery area, it’s hard to get a real handle on it. But given our reported growth in our Upholstery sales, our same-store sales increase and what we hear from our major customers, La-Z-Boy in a lot of places is performing better than the norm. John Baugh - Stifel Nicolaus & Company, Inc.: Then you made a comment about written sales being stronger. I assume that’s a different metric than the reported comp or if I’m mistaken correct me on that, but any color on the difference between what you shipped versus what you wrote. Kurt L. Darrow: Yes. I would tell you that through the holiday season and through January was very positive for us, and in all three of our business segments our written business was above the delivered business that we had in the quarter. So this is just an example, so if we delivered 5% more business in a segment, our written business could have been up as much as 8 or 9%. But in all three segments, we sold more than we got delivered in the quarter. John Baugh - Stifel Nicolaus & Company, Inc.: And then on the retail front, nice progress there and the revenues were dead flat year on year and yet you picked up $3 or $4 million of EBIT. We’ve had two quarters now in a row where we’re roughly $40 million, well you were $38 the last quarter but how do we think about going forward are there additional cost cuts or if we were to model just $40 million of revenue, this is kind of the range of unit loss that we’re looking at. Kurt L. Darrow: We’ve had that question before, John, and I think the way to think about it is our team is being relentless in trying to find ways to do both things, to both increase their sales and control their costs. I think what we’ve tried to tell people is there’s not the low hanging fruit, there’s not the size of the savings that we’ve exhibited the last four or five quarters and we’re starting to anniversary the quarters where we started to show the big savings. So there are some areas that we can continue to save a little money and again there’s some work we can continue to do on our gross margins, but I don’t want there to be any mistake that we cannot cost cut our way to profitability in this model. We need a combination of continued cost discipline but to increase volume and could we do a little better than what we did this quarter? Absolutely. Would it get us profitable without more sales? Absolutely not. John Baugh - Stifel Nicolaus & Company, Inc.: You commented about this $20 million savings with the cut and sew operation in Mexico was done, I can’t remember, at least a year or maybe longer ago. And it was based on the volume assumption. We’ve subsequently went down from that volume assumption. We’re now coming back up. Where are we relative to that comment of $20 million you’re stilling talking about? Are we at sufficient volume levels where we’ll see all of that savings? Are we looking at a total incremental of $20 million, however long it takes to achieve from sort of the trailing 12 month numbers as a starting point? Louis M. Riccio Jr.: Good question and that’s a moving target as we look at this going forward, but the components of the savings primarily was the differential in labor cost and the savings on duties we were paying at the time and bringing in fabric rolls and leather hides into this country. I think one of the unanswered questions about our long term contributions of Mexico has to do with the fact that we are transitioning out of our U.S. facilities our custom cut and sew volume today. But we probably are sending some marginal volume over to Asia that we run some risk on obsolescence and things of that nature. And so some of that we could potentially bring back to Mexico, given the ebb and flow of costs and transportation and time, so we haven’t put a line in the sand and said Mexico is only going to do custom orders. It could do some other things. We will still most likely be buying our high volume items from Asia in kits that are fairly predictable but as we get into more decorative colors and things of that nature, we’ll probably do more of that in the Mexico facility. As the business comes back up, depending on how much we balance out our demand from Asia and Mexico, that number could be short 10% or it could be up 10%, John, just depending on where that volume ends up over the next 18, 24 months.

Your next question comes from Todd A. Schwartzman - Sidoti & Company, LLC. Todd A. Schwartzman - Sidoti & Company, LLC: Kurt, you had mentioned an increase in average ticket at Retail for Q3. Can we get you to quantify that? Kurt L. Darrow: I don’t think we want to do that, Todd, because you know there’s a lot of factors involved in these. We’re trying to give you some directional numbers and I think to understand that our written business in Retail was up more than our delivered business in the quarter, our traffic was up and our ticket was up are all good indicators. But I don’t want to start quantifying that until we get a little more stability in the business. Todd A. Schwartzman - Sidoti & Company, LLC: At the same time were there any specific items that sold especially well in the quarter? And maybe you can talk about the starting price points of those and what the mix was in terms of leather versus fabric. Kurt L. Darrow: We have not seen a big shift in the leather versus fabric percentage and we have not really changed the advertised opening price points that we offer our customers through the La-Z-Boy program. I would say that our mix the last 12 months has shifted a little bit more. We’re selling a little higher percentage of our total mix in chairs. I think people need some relaxation during their stresses and so there’s a little bit more tendency to buy our chairs. And with all of our businesses, and I think this is indicative of the times and throughout the industry, there’s a little higher percentage of business going through the front third of your product assortment. If you think about a good, better, best and the relationship between those segments of your business, we’re selling a little bit more of the good as opposed to what we would with a little bit better times. But it isn’t anything dramatic, but we just see some trends heading in that direction. Todd A. Schwartzman - Sidoti & Company, LLC: If the fabric, leather ratio has been fairly constant with that 11% normalized growth for the segment for Upholstery, were people buying more items or how would you account for the increase in revenue? Kurt L. Darrow: Our targets in our stores, our selling philosophy is trying to get a higher share of wallet and trying to add on pieces to the room. So when we sell a sofa and loveseat, certainly our selling process is to try to get the tables, lamps, accessories and all of that together. And our percentage of our in home business was also up for the quarter. But we want both customers. We want the customers who want just the one item and wants the comfortable chair to watch TV in and we want the customer who’s trying to redo her entire room. But our sales staff and the disciplines we have in the stores with our buying guides and our processes are just getting better every quarter, at trying to expand the ticket and trying to make sure the customer realizes all that we have to offer in the stores. Todd A. Schwartzman - Sidoti & Company, LLC: And what about Presidents weekend? What did you see there traffic wise? What were people buying? Kurt L. Darrow: I saw too much damn snow. Todd A. Schwartzman - Sidoti & Company, LLC: That was my next question. How should we think about that? Kurt L. Darrow: Well, we should think that it isn’t good. You know we had stores that we had to remove snow from the roofs or we couldn’t open them. And in fact the predominance of the company owned stores on the East Coast where all the snow hit, it wasn’t great timing. You know, we can work our way out of it. We’re behind a little bit in our deliveries to our customers because we can’t get into their homes at all, but suffice to say when our largest region of our company owned business is the Baltimore, Washington, Virginia area and those stores in a given two week period were probably closed four, five days, it probably will have an impact. Todd A. Schwartzman - Sidoti & Company, LLC: And as a result of all that, are you extending any promotions from last week? Kurt L. Darrow: Well, we come right off of the Presidents Day sale and into another sale period this weekend. So yes, we won’t take our foot off the gas pedal but it isn’t the same as the holiday. Our premise is one of the things about a holiday, you get people off of work and they have time to shop and if you miss on those, those are hard to make up. So we’re going to by and far try to find a way to make some of that back but it’s not always repeatable. Todd A. Schwartzman - Sidoti & Company, LLC: What about CDSOA? What do you expect in terms of additional payments if any, assuming your share remains the same? Kurt L. Darrow: Well, Todd, that’s a very long answer that I don’t want to go into the whole detail here on the call but there’s a case going in front of the Supreme Court for anti-dumping in general. It’s not specific to the furniture business but they’re trying to sort out this disagreement between petitioners and non-petitioners. And the government in a lot of industries has money set aside waiting the outcome of whether or not the Supreme Court will hear the non-petitioners motion, which has already been denied by two lower courts. And it’s a significant amount of money, it’s over I think $120 or $130 million in just the furniture business alone and that is the critical decision that will get made and depending on the decision, the petitioners could be receiving a lot of money or that money could be going to the non-petitioners. And we don’t have a position on it right now. We just have to wait for the judicial system to work its way through. Todd A. Schwartzman - Sidoti & Company, LLC: And just to refresh my memory, what’s been your percentage of the previous distribution? Kurt L. Darrow: Well, it varies every year based on your qualifying expenditures. And for us, too, it varies now because at one point we owned American and Martinsdale and we had a certain percentage of the anti-dumping monies that was attributable to that. And that is waning as we go forward so it depends on who else is still manufacturing wood bedroom here in the United States. It depends on their share of the pie. So that number has fluctuated every year, based on a number of competitive factors. Todd A. Schwartzman - Sidoti & Company, LLC: Lastly, what level of cash generation or signs of further stabilization or improvement in the business do you think your board would need to see before reinstating the dividend? Kurt L. Darrow: Well our board reviews our progress and our dividend decision every quarter and we talk about the various tipping points and we talk about various strategies. And it would be wrong of me, Todd, to make a prediction but we feel good with the progress we’ve made but we’re also still close to the time when things were very, very difficult. And so I think we have to see some more sustainable signs and a little less worried consumer and a little more available credit and a little less unemployment before we’re going to feel that there’s a steadiness to this business that we can count on.

Your next question comes from Matthew McCall - BB&T Capital Markets. Matthew McCall - BB&T Capital Markets: I just want to go back to some of the cost savings. You did say I think that there was a little bit of Mexico in Q3, I’m sorry, you’re going to see some of that in Q4 but you saw some Casegoods savings in Q3. Anything besides the Casegoods savings that was an incremental driver of profitability versus what you saw in Q2 outside of volume? Louis M. Riccio Jr.: : Well I think the other thing that was significant between the two quarters was there was a $1 million improvement in our bad debts. I wouldn’t expect that to continue every quarter but that would also contribute to the incremental improvement. Matthew McCall - BB&T Capital Markets: The incremental margin is pretty strong if you adjust for some of those items. As we start to see some improvement and I know we’re going to see a seasonally softer period but we saw some seasonal improvement and we saw some nice flow through, any more commentary on what we should expect from a segment perspective? Specifically Upholstery is where I’m curious about what the incremental margin could be on some growth. Kurt L. Darrow: Matt, I think this quarter was one of the reasons why we haven’t been willing to give you a percentage or an absolute on an incremental margin because I think until we get all of our moving parts settled down, until we get our one Casegoods facility making all the product and having its inefficiencies behind it, once we get the Casegoods warehouse moved, once we get Mexico fully transitioned, once we get to a more stable operating environment ourselves and an economy that we have more predictability, we’ll be able to give you a little bit tighter range on what we believe incremental margins are. For right now, we still have a lot of moving parts and the timing exactly of when that all happens is difficult to pin down. And we’re just a little reluctant to give you a number and then miss it one side or the other and have to go into all the explanation. So it was a incremental improvement this quarter that I’m pretty sure we can’t continue at 80%. Matthew McCall - BB&T Capital Markets: One remedy for that is maybe a range, maybe give a range, and it would be wide. Kurt L. Darrow: We will when we think the time is appropriate. Matthew McCall - BB&T Capital Markets: You mentioned American Drew and the Lea consolidation. Have you talked about any incremental savings there or is that lumped in with the $5 million that you’ve already talked about? Kurt L. Darrow: No, American Drew and Lea are one company today and that is we’re rolling in Hammery into that organization so our American Drew Lea/Hammery Casegood Group by the same management, the same supply chain team and everything would offer a full array of Casegoods products; bedroom, dining room, occasional and youth. And so it will be one company that covers the gamut there. And because of some timing issues, because of some things we’re dealing with merging two organizations and employee issues, we have not quantified what we think the savings will be. We’ll probably do that at year end, but that was not included in the original $5 million savings. That was attributable to the consolidation of the two plants and the movement of the warehouse. Matthew McCall - BB&T Capital Markets: What was the recognized Casegoods savings in Q3? Kurt L. Darrow: We went ahead, and we’ve been making both the American Drew bedroom and the Kincaid bedroom in our Hudson facility and it’s been about four or five months as we’ve been doing our efficiencies at making that new product at Hudson have gotten better, and that is where we picked up the efficiencies. But we won’t give you a specific number on that. But that was part of the reason that on less sales for the quarter, the Casegoods business made a slight profit and last quarter they lost a little bit of money. And part of that change was the consolidation of facilities. Matthew McCall - BB&T Capital Markets: I just want to clarify the savings that you quantified for Mexico. Is the $20 million that’s remaining solely related to the elimination of the [redemic] costs? Or are you also baking in there the ultimate reason to do the move and that’s labor cost savings? Does that $20 million encompass all of that? Kurt L. Darrow: Yes. The $20 million includes a component of the labor savings of having our U.S. cut and sew operations ceased at all five of our plants and it also had a component of duties that we were paying duties on rolled fabric and leather hides coming straight to the U.S. When that product now comes into Mexico and you put labor onto it and turn it into a kit, there’s no duty on that. And that was 20, 25% of the savings.

Your next question comes from Barry Vogel - Barry Vogel and Associates. Barry Vogel - Barry Vogel and Associates: In terms of closed stores, can you tell us how many closed stores there are and what was the negative impact on an operating income basis in the third quarter and the nine months because of closed stores? Kurt L. Darrow: Barry, in our accompanying home Retail area we have two less stores than we had a year ago. And to quantify the improvement on that, I don’t have that in front of me. And overall from our peak we’ve closed around, give or take 10%, we’ve closed around 25 stores if you go back 18 months in the entire system. But the company from this point a year ago has only exited two stores and they were older stores that we hadn’t remodeled. One was in Chicago and one was in the greater Philadelphia area and that’s the only difference in our store count. Louis M. Riccio Jr.: And we closed no stores during the current quarter. There was no significant change in our store count. I think it was 308, wasn’t it? So we had no significant store changes during the quarter to speak of. Barry Vogel - Barry Vogel and Associates: Does it look like you’re not going to close any more company owned stores? Kurt L. Darrow: Well, that would all depend, Barry, on the lease situation. We do have a few stores that we decided, because of its either location or size or whatever, that we didn’t upgrade to the new model. Some of those leases are running out this year and next and we could be closing those stores. But concurrently we could be opening a new one five miles away or in a different market and it is not our intention to continue to downsize our store count. In fact in two or three of our markets we need additional stores to get the operating leverage that would be beneficial to us. And we’re out looking in a couple of markets. We’re trying to judge the peak and valley to the commercial real estate markets but it is not our intention to keep shrinking our store base. Barry Vogel - Barry Vogel and Associates: On the balance sheet, Mike, do you have a liability for the closed stores that are currently not operating? Louis M. Riccio Jr.: Yes we do. And most of that expense is going through restructuring. But we had to record a one time charge on the net present value of those store leases based on how far out they are on the ones that we closed. It’s not a significant amount anymore. It ends up being about $0.01 a quarter or less and the liability is reducing as we’re getting to the end of those leases on several of those cases. It’s not a significant number anymore for us. Barry Vogel - Barry Vogel and Associates: Can you give us some idea the negative impact on the Mexican start up in the first nine months of the year? Kurt L. Darrow: You are persistent, Barry, but we’re not going to disclose that. It was dual costs. We were operating our Mexican facility and keeping our U.S. facilities open to provide service to our customers as we went through the transition but we’re not going to quantify that at this time.

Your next question comes from [Straf Meter] – Scopia Capital. [Straf Meter] – Scopia Capital: What was the advertising expense for the quarter? Louis M. Riccio Jr.: We don’t disclose advertising on a quarterly basis. It’s just an annual disclosure for us. I don’t have that on the top of my head but we’re not outside the realm of where we were last year on our advertising. We fluctuate some within the quarters based on our renewed holiday picks but nothing outside the ordinary. [Straf Meter] – Scopia Capital: In the last 10-Q you gave a pretty good breakout of the bridge from the increase in your gross margin on a year-over-year basis. I think last quarter you were up something like 500 basis points. This year you’re up 400 basis points. Could you walk us through that same bridge on how much was from pricing versus raw ingredients and that sort of thing? Louis M. Riccio Jr.: In our 10-Q we give that same information for the quarter. Let me just get to that real quick. My memory won’t give me the numbers exactly. For the quarter it’s 2.6% for the efficiencies from the plants, 2.1 for raw materials. Now that’s based on last year, not sequentially. And then 0.5% for restructuring are the main components that we gave out. [Straf Meter] – Scopia Capital: Is that offset by Mexican? Louis M. Riccio Jr.: You know, it’s offset by a myriad of things. We didn’t go into any discussion. I mean I’m sure mix has something to do with this but there’s nothing significant enough for us to. Kurt L. Darrow: There’s nothing of a magnitude in the things we called out. [Straf Meter] – Scopia Capital: I’m just trying to understand, so if I look at the eliminations line and your segment information table, it decreased from negative $7.7 million to negative $21.8 million and I think part of that you talked about was $12 million of the way you accounted for sales, I guess previously. What’s the other $2 million delta in the increase in eliminations in the quarter? Louis M. Riccio Jr.: Well, and the $12 million is just a one time thing because of the switch we made. The other couple million is just timing differences of when we’re selling to our other segments from either Upholstery or Casegoods. There’s nothing significant in there for us to discuss.

Thank you, ladies and gentlemen. We have no further questions. At this time I’d like to turn the conference back to management.

Thank you everybody for participating in our call this morning. Should you have any follow up questions please give a call and we’ll be happy to go over them with you. Bye bye. Kurt L. Darrow: Thanks.

Ladies and gentlemen, this concludes today’s teleconference and you may disconnect your lines at this time. Thank you for your participation.