FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 1995 Commission File No. 0-11577
LADD FURNITURE, INC.
(Exact name of registrant as specified in charter)
North Carolina 56-1311320
(State or other juris- (I.R.S. Employer
diction of incorpora- Identification No.)
tion or organization)
One Plaza Center, Box HP-3, High Point, North Carolina 27261-1500
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (910) 889-0333
---------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes x No
----------------------
As of November 13, 1995 there were 7,726,906 shares of Common Stock
($.30 par value) of the registrant outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the thirteen weeks and thirty-nine weeks
ended Sept. 30, 1995 and Oct. 1, 1994
(Amounts in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
13 Weeks Ended 39 Weeks Ended
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $ 159,144 153,182 461,521 445,403
Cost of sales 130,549 123,640 390,601 359,752
Gross profit 28,595 29,542 70,920 85,651
Selling, general and
administrative expenses 23,402 23,562 75,553 69,127
Restructuring expense (Note 2) - - 25,696 -
Operating income (loss) 5,193 5,980 (30,329) 16,524
Other deductions:
Interest expense 2,997 2,328 8,646 6,168
Other, net 163 445 3,024 921
3,160 2,773 11,670 7,089
Earnings (loss) before
income taxes 2,033 3,207 (41,999) 9,435
Income tax expense (benefit) 142 962 (16,591) 2,830
Net earnings (loss) $ 1,891 2,245 (25,408) 6,605
Net earnings (loss) per
common share $ 0.24 0.29 (3.29) 0.86
Weighted average number of
common shares outstanding 7,726 7,700 7,719 7,696
</TABLE>
2
<PAGE>
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1995 and December 31, 1994
(Amounts in thousands, except share data)
ASSETS
<TABLE>
<CAPTION> September 30,
1995 December 31,
(Unaudited) 1994*
-------------- ------------
<S> <C> <C>
Current assets:
Cash $ 2,913 576
Trade accounts receivable, less allowances for
doubtful receivables, discounts, returns and
allowances of $3,867 and $4,294, respectively 45,337 52,735
Inventories (Note 3) 86,313 122,083
Prepaid expenses and other current assets 10,520 10,053
Total current assets 145,083 185,447
Property, plant and equipment, net 82,567 109,522
Businesses held for sale, net (Note 2) 32,587 -
Intangible and other assets, net 76,631 83,847
$336,868 378,816
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt (Note 5) $ 558 687
Short-term bank borrowings (Note 5) 2,450 5,000
Trade accounts payable 26,517 28,360
Accrued expenses and other current liabilities 30,629 27,715
Total current liabilities 60,154 61,762
Long-term debt, excluding current
installments (Note 5) 140,182 143,584
Deferred compensation and other liabilities 7,053 6,316
Deferred income taxes 4,255 15,248
Total liabilities 211,644 226,910
Shareholders' equity:
Preferred stock of $100 par value. Authorized
500,000 shares; no shares issued - -
Common stock of $.30 par value. Authorized
50,000,000 shares; issued 7,726,906 and
7,700,151 shares, respectively (Note 4) 2,318 2,310
Additional paid-in capital 49,905 49,516
Currency translation adjustment - (208)
Retained earnings 73,959 101,105
126,182 152,723
Less unamortized value of restricted stock (958) (817)
Total shareholders' equity 125,224 151,906
$336,868 378,816
</TABLE>
* Derived from the Company's 1994 Annual Report.
3
<PAGE>
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the thirty-nine weeks ended Sept. 30, 1995 and Oct. 1, 1994
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
39 Weeks Ended
-------------------------------------------------
Sept. 30, Oct. 1,
1995 1994
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $(25,408) 6,605
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities:
Depreciation of property, plant and equipment 9,891 10,247
Amortization 2,954 2,176
Restructuring expense 25,696 -
Provision for losses on trade accounts receivable 2,422 2,332
Gain on sales of property, plant and equipment (373) (171)
Provision for deferred income taxes (15,526) (199)
Increase (decrease) in deferred compensation and
other liabilities 737 (416)
Change in assets and liabilities, net of effects
from purchase of Pilliod Furniture in 1994 and classification of
businesses held for sale in 1995:
Increase in trade accounts receivable (15,554) (11,965)
(Increase) decrease in inventories 10,999 (8,794)
(Increase) decrease in prepaid expenses and
other current assets 2,424 (4,063)
Decrease in trade accounts payable 1,887 1,097
Increase in accrued expenses and other
current liabilities 5,915 4,861
Total adjustments 31,472 (4,895)
Net cash provided by operating activities 6,064 1,710
Cash flows from investing activities:
Acquisition of Pilliod Furniture, net of cash
acquired - (23,847)
Additions to property, plant and equipment (8,557) (25,776)
Proceeds from sales of property, plant and equipment 170 914
Additions to other assets (1,678) (394)
Net cash used in investing activities (10,065) (49,103)
Cash flows from financing activities:
Proceeds from long-term borrowings 231 27,511
Proceeds from (repayments of) short-term bank borrowings (2,550) 25,600
Proceeds from sales of trade accounts receivable 7,515 34,000
Proceeds from sale leaseback of equipment 6,691 -
Principal payments of long-term debt (3,762) (35,345)
Proceeds from common stock issued 8 23
Dividends paid (1,738) (2,078)
Net cash provided by financing activites 6,395 49,711
Effect of exchange rate changes on cash (57) (22)
Net increase in cash 2,337 2,296
Cash at beginning of period 576 1,350
Cash at end of period $ 2,913 3,646
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ 8,487 5,242
Cash paid during the period for income taxes 327 1,999
</TABLE>
4
<PAGE>
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Amounts in thousands, except share data)
<TABLE>
<CAPTION>
Currency Unamortized
Number Additional trans- value of Total
of shares Common paid-in lation Retained restricted shareholders'
issued stock capital adjustment earnings stock equity
--------- --------- ---------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1994 ... 7,688,719 $ 2,306 49,186 (170) 99,568 (787) 150,103
Shares issued in connection
with incentive stock
option plan ............. 782 -- 19 -- -- -- 19
Repurchase of restricted
stock ................... (6,142) (1) (170) -- -- 170 (1)
Shares issued in connection
with and amortization of
employee restricted
stock awards ............ 16,792 5 481 -- -- (200) 286
Currency translation
adjustment .............. -- -- -- (38) -- -- (38)
Net earnings .............. -- -- -- -- 4,308 -- 4,308
Dividends paid ............ -- -- -- -- (2,771) -- (2,771)
BALANCE AT DECEMBER 31, 1994 . 7,700,151 2,310 49,516 (208) 101,105 (817) 151,906
Repurchase of restricted
stock ................... (2,452) (1) (68) -- -- 68 (1)
Shares issued in connection
with and amortization of
employee restricted
stock awards ............ 29,207 9 457 -- -- (209) 257
Currency translation
adjustment .............. -- -- -- (57) -- -- (57)
Reclassification to
businesses held for sale -- -- -- 265 -- -- 265
Net loss .................. -- -- -- -- (25,408) -- (25,408)
Dividends paid ............ -- -- -- -- (1,738) -- (1,738)
BALANCE AT SEPTEMBER 30, 1995
(UNAUDITED) ............... 7,726,906 $ 2,318 49,905 0 73,959 (958) 125,224
</TABLE>
5
<PAGE>
Notes:
(1) Quarterly Financial Data
The quarterly consolidated financial data are unaudited but
include, in the opinion of management, all adjustments necessary for
a fair statement of the operating results for the interim periods
indicated. During the second quarter of 1995, a $10.2 million
non-cash charge was recorded to write-off bank financing fees and
increase reserves for slow moving and discontinued inventories,
potential bad debts and other liabilities recognized during the
second quarter. All other adjustments are of a normal recurring
nature except as disclosed in Note 2 to the financial statements.
(2) Restructuring
In June 1995, the Company recorded a $25.7 million non-cash
restructuring charge. The restructuring charge resulted from the
Company's plan to divest four operating companies (businesses
held for sale), close four Company-owned retail stores and
reorganize the remaining companies to improve operating
performance. The restructuring charge consisted of: (a) $19.5
million to write-down the businesses held for sale to the lower
of carrying value or estimated fair value, net of disposition
expenses; (b) $3.3 million to increase reserves for costs
associated with closing four retail stores (principally lease
termination costs); (c) $1.7 million to write-down selected
machinery to estimated fair value as a result of changes in
manufacturing processes; and (d) $1.2 million to provide for
severance expense and other costs. In connection with recording
the restructuring charge, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of (FAS 121). Adoption of FAS 121 was not material
and had no effect on earlier interim periods.
The following unaudited pro forma information shows consolidated
operating results for the periods presented as though the Company
had divested the four businesses held for sale as of January 1,
1994, and excluding the restructuring expense recorded during
the second quarter of 1995 (in thousands):
<TABLE>
<CAPTION>
13 Weeks Ended 39 Weeks Ended
Sept. 30, Oct. 1, Sept. 30, Oct 1,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $132,695 124,801 380,808 359,285
Earnings (loss) before
interest and income taxes 3,632 5,102 (5,818) 11,740
</TABLE>
6
<PAGE>
The Company expects that the businesses held for sale will be
sold by the end of the first quarter of 1996. The Company intends
to use the net cash proceeds realized from selling these businesses
to reduce long-term debt.
The following unaudited information shows the components
included in businesses held for sale at September 30, 1995 (in
thousands):
<TABLE>
<S> <C>
Current assets $ 38,349
Property, plant and equipment, net 17,152
Other noncurrent assets 5,275
Current liabilities (9,057)
Currency translation adjustment 265
Total assets, net 51,984
Reserve for loss (19,397)
Businesses held for sale $ 32,587
</TABLE>
(3) Inventories
A summary of inventories follows (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Inventories on the FIFO cost method:
Finished goods $ 51,308 65,046
Work in process 15,134 23,084
Raw materials and supplies 31,288 47,997
Total inventories on
the FIFO cost method 97,730 136,127
Less adjustments of certain inven-
tories to the LIFO cost method (11,417) (14,044)
$ 86,313 122,083
</TABLE>
At September 30, 1995, inventories totaling $24.8 million were
included in businesses held for sale in the consolidated balance
sheet.
(4) Reverse Stock Split
On May 12, 1995, shareholders approved a one-for-three reverse
split of the Company's common stock which became effective May
16, 1995. This reverse split increased the par value of the
common stock to $0.30 per share from $0.10 per share and decreased
the issued shares to 7,725,236 from 23,171,799 prior to the reverse
split. All per share data presented in the accompanying consolidated
financial statements have been restated for the one-for-three stock split.
7
<PAGE>
(5) Amendment of Long-Term Credit Facility
Effective August 14, 1995, the Company's $190.0 million long-term
credit facility was amended (the Amended Facility). Borrowings
under the Amended Facility bear interest at rates selected
periodically by the Company of LIBOR (5.95% at September 30, 1995)
plus 1 1/4% to 2 3/4%, prime (8.75% at September 30, 1995) plus
1/4% to 1 3/4%, or at a lesser rate based on the availability of
bank funds. Under the Amended Facility, the Company pays a
commitment fee of % to 1/2% per annum on the unused portion of the
revolving credit loan.
The pricing of the Amended Facility is determined by a ratio of
debt levels to cash flows, as specified. For the period August
14, 1995 through April 1996, the Amended Facility will bear
interest at LIBOR plus 2 1/4% or prime plus 1 1/4%, and the Company
will pay a commitment fee of 1/2%. However, if prior to April 1,
1996 the Company reduces its debt levels by $20.0 million or $40.0
million from the cash proceeds of the sale of companies as
discussed in Note 2, the interest rate on the Amended Facility
will be reduced by % or 1/4%, respectively.
Prior to the amendment, borrowings under the facility included
interest at rates selected periodically by the Company of LIBOR
plus %, prime or at a lesser rate based on the availability of bank
funds. Commitment fees under this prior facility were 1/4% per
annum on the unused portion of the revolving credit loan.
At current borrowing levels and interest rates, the effect of the
Amended Facility will be to lower profit before income taxes by
approximately $1.9 million annually. In connection with amending
the long-term credit facility the Company charged to operations
approximately $525,000 in unamortized financing fees during the
thirty-nine weeks ended September 30, 1995.
Borrowings under the Amended Facility are unsecured but will become
subject to a lien on substantially all the assets of the Company
effective March 30, 1996 if the term loan component of the
facility has not been reduced by $40.0 million by that date. The
Amended Facility requires the maintenance of certain ratios
pertaining to shareholders' equity, operating earnings, and
operating cash flows and contains covenants which relate to
future borrowings, liens on assets, specified amounts of
consolidated net worth and capital spending, and the operations of
the Company. At September 30, 1995, the Company was in compliance
with covenants under the Amended Facility.
8
<PAGE>
(6) Subsequent Event
On November 7, 1995 the Company signed a definitive agreement to
sell 100 percent of the stock of its wholly-owned subsidiary, Brown
Jordan Company, and related intellectual property to BJCL, Inc.
for $28.6 million in cash, subject to certain working capital
adjustments. The transaction is expected to be concluded during
December 1995, following regulatory approval and the completion of
financing arrangements.
Additionally, on November 6, 1995 the Company signed a definitive
agreement to sell the operating assets of its Lea Lumber & Plywood
division for cash to Lea Lumber & Plywood, LLC. The transaction is
expected to be completed by the end of 1995.
The anticipated net proceeds from the sale of Brown Jordan and Lea Lumber &
Plywood are not less than the value of the related assets recorded
at September 30, 1995.
9
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table sets forth the percentage relationship of
net sales to certain items included in the Consolidated Statements of
Operations:
<TABLE>
<CAPTION>
13 Weeks Ended 39 Weeks Ended
Sept. 30, Oct. 1, Sept. 30, Oct. 1,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 82.0 80.7 84. 680.8
Gross profit 18.0 19.3 15.4 19.2
Selling, general and
administrative expenses 14.7 15.4 16.4 15.5
Restructuring expense - - 5.6 -
Operating income (loss) 3.3 3.9 (6.6) 3.7
Other deductions
Interest expense 1.9 1.5 1.9 1.4
Other, net 0.1 .3 .6 .2
2.0 1.8 2.5 1.6
Earnings (loss) before
income taxes 1.3 2.1 (9.1) 2.1
Income tax expense (benefit) 0.1 .6 (3.6) .6
Net earnings (loss) 1.2% 1.5% (5.5)% 1.5%
</TABLE>
Net sales for the third quarter and first nine months of 1995
were $159.1 million and $461.5 million, respectively, compared with
$153.2 million and $445.4 million during the comparable 1994 periods.
Net sales in 1995 increased from prior year levels by 3.9% for the
third quarter and 3.6% for the year-to-date. The increases in the
third quarter and year-to-date sales were primarily due to higher
sales achieved by the Company's upholstery and contract businesses. On
a pro forma basis, assuming the acquisition of Pilliod Furniture, Inc.
had occurred at the beginning of fiscal year 1994, the 1995
year-to-date net sales increase would have been 1.9%.
Cost of sales as a percentage of net sales increased to 82.0% for
the third quarter of 1995 and 84.6% for the year-to-date, from 80.7%
and 80.8%, respectively, in 1994. This increase resulted in a decrease
in the gross profit margin to 18.0% for the third quarter and 15.4% for
the year-to-date, from 19.3% and 19.2%, respectively, in 1994. The
increase in the cost of sales for the year-to-date was primarily
attributable to a $5.3 million non-cash 1995 second quarter charge to
increase reserves for slow-moving and discontinued inventories.
The charge was recorded as a result of a change in industry
conditions requiring further discounting for sale of such goods. Gross
margins in the third quarter and first nine months of 1995 were
negatively impacted by high raw material costs and plant downtime.
Additionally, due to the recent sluggish sales pace
10
<PAGE>
in the casegoods portion of the furniture industry, promotional
discounts offered in reaction to competitive industry pricing also
reduced the 1995 third quarter and year-to-date gross margins.
Selling, general and administrative (SG&A) expenses decreased to
14.7% of net sales for the third quarter of 1995 from 15.4% for the
same period in 1994, while first nine months SG&A expenses increased
to 16.4% from 15.5% in 1994. SG&A expense for the first nine months of
1995 included non-cash charges totalling $2.3 million to increase bad debt
reserves due to current industry conditions and to provide for other
miscellaneous expenses, without which, 1995 year-to-date SG&A
expenses would have been 15.9% of net sales. The decrease in the
current quarter's SG&A expense from the year-earlier period is a
result of ongoing cost control efforts.
The $25.7 million restructuring expense incurred in the second
quarter of 1995 resulted from the Company's plans to divest four
operating companies and restructure its remaining operating companies to
improve operating performance. As set forth in Note 2, these reserves
included a non-cash charge to write-down the businesses held for sale
to the lower of carrying value or estimated fair value; provide for
expected losses from the closing of four Company-owned retail
stores; write-down selected machinery due to changes in manufacturing
processes; and provide for severance expense and other costs.
Other deductions were 2.0% of net sales for the third quarter and
2.5% for the first nine months of 1995, compared to 1.8% and 1.6%,
respectively, in 1994. The increase in other deductions for both
periods was primarily due to increased interest expense resulting from
higher average outstanding borrowings and an increase of over 2% in
the average quarterly and first nine months interest rates
compared to the same periods of 1994. Included in other
deductions in the first nine months of 1995 were non-cash charges
totaling $2.2 million, attributable to the write off of bank
financing fees and other noncurrent assets and the recognition of
other liabilities.
The significant pre-tax operating loss recorded for the first
nine months of 1995, as well as the anticipated realization of the
restructuring charges, other temporary differences and tax credits,
caused the current year effective income tax rate to rise to 39.5%,
as compared with 30% for the year-earlier period. Because of the
significance of the anticipated 1995 net operating loss (which will be
carried back three years and then forward 15 years or until used in
full) the recognition of the rate-reducing benefits of previously
initiated tax planning efforts has been deferred until realization is
reasonably assured. The third quarter effective income tax rate of 7.0%
results from a cumulative adjustment of the 38.0% tax rate, estimated at June
30, 1995, to the current estimated annual tax rate of 39.5%.
The Company's net earnings were $1.9 million, or $0.24 per share,
for the third quarter of 1995, compared with $2.3 million, or $.29 per
share for the same quarter of 1994. The nine months net loss was $25.4
million, or $3.29 per share for 1995, compared with net earnings of
$6.6 million, or $.86 per share, for 1994.
11
<PAGE>
Liquidity and Capital Resources
The Company's current ratio at September 30, 1995 was 2.4 to 1
compared to 3.0 to 1 at December 31, 1994. Net working capital totaled
$84.9 million at September 30, 1995, down from $123.7 million at
December 31, 1994. The declines in the current ratio and net working
capital were primarily attributable to the reclassification of the
current assets and liabilities of the companies to be divested to a
noncurrent asset, businesses held for sale. Exclusive of this
reclassification and the $5.3 million increase in reserves
recorded in the second quarter of 1995 for slow moving and discontinued
inventories, September 30, 1995 inventories declined by an additional
$5.7 million from December 31, 1994 as a result of shipments and plant
downtown taken during the year.
During the first nine months of 1995, the Company generated cash
from net earnings (loss) plus depreciation, amortization and
restructuring expense of $13.1 million compared to $19.0 million in
1994. The cash generated in the first nine months of 1995 and 1994 was
utilized to fund working capital needs and capital expenditures.
During the first nine months of 1995, capital spending totaled
$8.6 million compared to $25.8 million during the same period in
1994. Capital expenditures in the first nine months of 1995 were
funded largely by cash generated from operations and a decrease in
working capital. A majority of the capital spent during the first
nine months of 1995 was to complete capital projects initiated in
1994 and early 1995.
During 1995, the Company's short-term bank borrowings declined
$2.6 million, while long-term borrowings declined $3.5 million.
Moreover, total debt has declined by more than $15.0 million during the
past six months. The decrease in total debt resulted from working
capital reductions and a $6.7 million sale/leaseback of selected
machinery and equipment. The Company had $140.2 million of
outstanding long-term borrowings at September 30, 1995, representing
50.8% of total capitalization at that date, compared to $143.6 million
or 45.3% of total capitalization at December 31, 1994. At September 30,
1995, the Company had $54.6 million in unused long-term revolving bank
credit lines, of which $14.6 million was available to meet future cash
requirements.
On August 14, 1995, the Company's long-term credit facility was
amended as discussed in Note 5. The amended long-term credit facility
will result in higher interest expense for the Company for the
foreseeable future. At current borrowing levels and interest rates,
the effect of the Amended Facility would be to lower profit before
income taxes by approximately $1.9 million annually. At September 30,
1995, the Company was in compliance with all covenants under the
Amended Facility.
12
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
On August 14, 1995 the Company entered into the Third
Amendment to Amended and Restated Credit Agreement with
Nationsbank, N.A. (Carolinas), as agent, amending
various financial covenants, increasing the interest
rates applicable to borrowings, providing for prepayment
of term loan borrowings upon divesture of certain
operating units of the Company, and providing for the
possible pledging of essentially all of the assets of the
Company and its subsidiaries as security for the borrowings,
if the term loan is not reduced by $40.0 million prior to
March 30, 1996.
On November 7, 1995 the Company signed a definitive
agreement to sell 100 percent of the stock of its
wholly-owned subsidiary, Brown Jordan Company, and related
intellectual property to BJCL, Inc. for $28.6 million in
cash, subject to certain working capital
adjustments. The transaction is expected to be concluded
during December 1995, following regulatory approval and
the completion of financing arrangements.
Additionally, on November 6, 1995 the Company signed a
definitive agreement to sell the operating assets of its
Lea Lumber & Plywood division for cash to Lea Lumber &
Plywood, LLC. The transaction is expected to be completed
by the end of 1995.
The anticipated net proceeds from the sale of Brown Jordan and Lea
Lumber & Plywood are not less than the value of the related
assets recorded at September 30, 1995.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Presss release dated November 8, 1995 regarding
the sale of Brown Jordan Company.
10.2 Press release dated November 7, 1995 regarding
the sale of Lea Lumber & Plywood.
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
LADD Furniture, Inc.
Date: November 14, 1995 By: s/William S. Creekmuir
William S. Creekmuir
Senior Vice President
and Chief Financial Officer
14
<PAGE>
<PAGE>
EXHIBIT 10.1
(LADD Furniture Inc. NEWS RELEASE
LOGO appears here) November 8, 1995
One Plaza Center Box HP3 Contact: John J. Ong
High Point, NC 27261-1500 (910) 888-6353
LADD AGREES TO SELL BROWN JORDAN COMPANY
HIGH POINT, NC--LADD Furniture, Inc. chairman and CEO Richard R.
Allen announced today that LADD has signed a definitive agreement to
sell 100 percent of the stock of its wholly-owned subsidiary, Brown
Jordan Company, to BJCL, Inc. for $28.6 million in cash, subject to
certain closing working capital adjustments. BJCL, Inc. is a corporation
controlled by Hancock Park Associates, an investment firm headquartered
in Los Angeles, CA.
In June of this year, LADD announced plans to divest four of its
operating companies, including Brown Jordan, in order to reduce debt and
focus management efforts on improving profitability. Brown Jordan is a
leading U.S. manufacturer of high quality, premium-priced outdoor and
indoor leisure furniture, with manufacturing facilities in El Monte, CA,
Newport, AR and Juarez, Mexico. The Brown Jordan transaction is expected
to be concluded during December 1995, following regulatory approval and
the completion of financing arrangements.
Commenting on today's announcement, Allen said, "Brown Jordan
has been a successful and profitable company since joining LADD in 1989.
However," he continued, "LADD's strategic emphasis over the next several
years is expected to be focused on wood and upholstered indoor furniture
for the residential and contract markets, rather than the seasonal
outdoor furniture business."
Allen added, "We are very pleased to have reached this agreement
with a buyer who is committed to the growth and continued success of
Brown Jordan." Allen noted that Hancock Park owns and operates eight
decentralized businesses, and has compiled a highly successful track
record with its previous investments.
Allen said proceeds from the sale, net of expenses, will be
used to reduce LADD's long-term debt. Yesterday, LADD announced the
signing of an agreement to sell its Lea Lumber & Plywood division,
another of the four operating units it plans to divest.
Headquartered in High Point, NC, LADD is one of the largest
North American manufacturers of residential furniture. After the
divestitures mentioned above, LADD will continue to market its wide
range of wood and upholstered furniture domestically
- - over -
The LADD family of fine furniture companies
Lea Industries (bullet) American Drew (bullet) Daystrom (bullet) Clayton
Marcus (bullet) Barclay American of Martinsville (bullet) Brown Jordan (bullet)
Kenbridge (bullet) Pennsylvania House (bullet) Fournier (bullet) Pilliod
<PAGE>
under the major brand names of American Drew, American of Martinsville,
Barclay, Clayton Marcus, Design Horizons, Kenbridge, Lea, Pennsylvania
House and Pilliod, and to export these same brand name products
worldwide through LADD International. LADD, under the American of
Martinsvillename, is also one of the world's leading suppliers of guest
room furniture to the hotel/motel industry, as well as to health care
facilities, retirement homes, and governmental and university dormitory
customers. LADD also owns and operates LADD Transportation, a support
company. LADD's stock is traded on the Nasdaq National Market under the
symbol LADF.
# # # # # # #
<PAGE>
EXHIBIT 10.2
(LADD Furniture, Inc. NEWS RELEASE
LOGO appears here) November 7, 1995
One Plaza Center Box HP3 Contact: John J. Ong
High Point, NC 27261-1500 (910) 888-6353
LADD AGREES TO SELL LEA LUMBER & PLYWOOD DIVISION
HIGH POINT, NC--LADD Furniture, Inc. chairman and CEO Richard R.
Allen announced today that LADD has signed a definitive agreement to
sell the operating assets of its Lea Lumber & Plywood division to Lea
Lumber & Plywood, LLC, an affiliated company of The Springfield Group.
The Springfield Group is one of the largest privately-held manufacturers
of softwood and hardwood veneers for the engineered wood products
industry. It is a major supplier of green and dry veneers to the
rapidly-growing laminated veneer lumber ("LVL") industry. The company
has six facilities in western Oregon and one in Fitzgerald, Georgia.
In June of this year, LADD announced plans to divest four of its
operating companies, including Lea Lumber & Plywood, in order to reduce
debt and focus management efforts on improving profitability. Lea Lumber
& Plywood is an eastern North Carolina manufacturer of cut-to-size
plywood parts for sale to furniture manufacturers and a variety of other
manufacturing industries. The Lea Lumber & Plywood transaction is
expected to be completed by the end of 1995.
Commenting on today's announcement, Allen said "We are very
pleased to have reached this agreement with a buyer who is committed to
the forest products business. Lea Lumber & Plywood has been a successful
company during the past few years and has earned a great reputation as a
reliable supplier of cut-to-size plywood parts. I am confident that, as
part of The Springfield Group, Lea Lumber & Plywood will grow and
prosper with continued excellent service and value to its customers."
Allen added that, upon the completion of the sale of Lea Lumber,
the net proceeds will be used to reduce LADD's long-term debt.
Headquartered in High Point, NC, LADD is one of the largest
North American manufacturers of residential furniture. After the
divestitures mentioned above, LADD will continue to market its wide
range of residential wood and upholstered furniture domestically under
the major brand names of American Drew, American of Martinsville,
Barclay, Clayton Marcus, Design Horizons, Kenbridge, Lea, Pennsylvania
House and Pilliod, and to export these same brand name products
worldwide through LADD International. LADD, under the American of
Martinsvillename, is also one of the world's leading suppliers of guest
room furniture to the hotel/motel industry, as well as to health care
facilities, retirement homes, and governmental and university dormitory
customers. LADD also owns and operates LADD Transportation, a support
company. LADD's stock is traded on the Nasdaq National Market under the
symbol LADF.
The LADD family of fine furniture companies
Lea Industries (bullet) American Drew (bullet) Daystrom (bullet)
Clayton Marcus (bullet) Barclay American of Martinsville (bullet) Brown Jordan
(bullet) Kenbridge (bullet) Pennsylvania House (bullet) Fournier (bullet)
Pilliod
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