SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 28, 1996
LADD FURNITURE, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-11577 56-1311320
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of Incorporation)
One Plaza Center, Box HP-3, High Point, North Carolina 27261-1500
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (910) 889-0333
N/A
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 1. Changes in Control of Registrant.
Not Applicable.
ITEM 2. Acquisition or Disposition of Assets.
Not Applicable.
ITEM 3. Bankruptcy or Receivership.
Not Applicable.
ITEM 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
ITEM 5. Other Events.
(a) Termination of accounts receivable securitization program: On March
28, 1996, LADD Furniture, Inc. (the "Registrant") terminated its trade accounts
receivable securitization program (the "Securitization Program"). The funds
provided by the Securitization Program will be replaced by borrowings under the
revolving credit line of the Registrant's existing long-term credit facility.
(b) Waiver of debt covenants and amendment of credit facility: On March
29, 1996 and April 30, 1996, the Registrant obtained waivers of violations of
financial covenants contained in the Amended and Restated Credit Agreement with
NationsBank, N.A., as Agent, dated October 19, 1994, as amended (the "Credit
Facility") which would occur for the quarter ended March 30, 1996. Under the
terms of the Credit Facility, the Registrant has granted a security interest in
substantially all of its personal property assets to the Agent to secure its
obligations under the Credit Facility. The Registrant has also obtained a waiver
of a requirement contained in the Credit Facility to pledge the Registrant's
interests in real estate to secure the obligations under the Credit Facility.
The waiver relating to pledging the real estate assets is effective
until May 15, 1996. Should the Registrant fail to repay all obligations under
the Credit Facility by May 15, 1996, the Registrant may be required to execute
and deliver documents within 30 days necessary to provide a perfected lien on
all material parcels of real estate owned by the Registrant or its subsidiaries
as security for the obligations under the Credit Facility. Management believes
2
<PAGE>
that the planned refinancing will be finalized prior to June 15, 1996, and the
existing Credit Facility will be repaid in full at that time.
(c) Release of first quarter results of operations: On April 22, 1996,
the Registrant reported its first quarter 1996 fiscal year results of
operations. See the press release and accompanying attachments as referenced
from Item 7.
ITEM 6. Resignations of Registrant's Directors.
Not Applicable.
ITEM 7. Financial Statements and Exhibits.
a) Exhibits
10.1 Release and Termination Agreement dated
March 28, 1996 among LADD Furniture, Inc.,
LADD Funding Corporation and Enterprise
Funding Corporation.
10.2 Amendment and Waiver Agreement among LADD
Furniture, Inc., NationsBank, N.A. f/k/a
NationsBank, N.A. (Carolinas), f/k/a
NationsBank of North Carolina, N.A., as
Agent, certain identified guarantors and
certain identified banks, dated March 29,
1996.
10.3 Press Release dated April 22, 1996 and
accompanying attachments.
ITEM 8. Change in Fiscal Year.
Not Applicable.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LADD FURNITURE, INC.
Date: May 8, 1996 By: /s/William S. Creekmuir
-----------------------
William S. Creekmuir
Title: Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
RELEASE AND TERMINATION AGREEMENT
This RELEASE AND TERMINATION AGREEMENT (this "Agreement"),
dated as of March 28, 1996, between LADD FUNDING CORPORATION, a Delaware
corporation, as transferor (the "Transferor"), LADD FURNITURE, INC., a North
Carolina corporation ("LADD"), as collection agent (in such capacity, the
"Collection Agent"), and ENTERPRISE FUNDING CORPORATION, a Delaware corporation
(the "Company").
W I T N E S S E T H:
WHEREAS, the Transferor, the Collection Agent and the Company
entered into a Transfer and Administration Agreement dated as of March 30, 1995
(as such agreement may have been amended to the date hereof, the "Transfer
Agreement") (all capitalized terms used herein and not defined herein are used
as defined in the Transfer Agreement); and
WHEREAS, the parties to the Transfer Agreement have agreed to
terminate the Transfer Agreement upon the terms hereof.
NOW, THEREFORE, it is hereby agreed by and among the parties
hereto as follows:
Section 1. Termination and Release. Upon the receipt by the
Company from the Transferor of $11,734,352.15 in immediately available funds in
payment in full of the Aggregate Unpaids (as defined in the Transfer Agreement)
and any other amounts owing under the Transfer Agreement (i) the Transfer
Agreement, the Transfer Certificate and the Company Certificate shall be
terminated as of the receipt by the Company of the aforementioned funds,
provided however that those provisions of the Transfer Agreement which by their
terms survive any termination of such agreement shall so survive and (ii) the
Company hereby (effective upon receipt of the aforementioned funds) releases and
conveys to the Transferor, without recourse, all of its right, title and
interest (including the Transferred Interest), including any security interest,
in the Receivables and any other property conveyed to it under the Transfer
Agreement, including without limitation any interest in, to and under the
Purchase Agreement and the Designated Subsidiaries Receivables Purchase
Agreement. Upon such termination, the Percentage Factor shall be recalculated
and shall equal zero.
Section 2. Further Assurances. The Company agrees that, at the
Transferor's expense, it will promptly execute and deliver all further
instruments and documents (to be prepared by the Transferor) and take all
further actions as the Transferor may reasonably request in order to release its
interest (including the Transferred Interest) in the Receivables and any other
property conveyed to it under the Transfer Agreement and to otherwise terminate
the arrangements contemplated by the Transfer Agreement,
<PAGE>
including but not limited to, consenting to the terminating of the Lock Box
Agreements. Without limiting the foregoing, the Company will execute and deliver
to the Transferor such financing statements or amendments thereto or assignments
thereof as may be reasonably requested by the Transferor to evidence its release
of its interest (including the Transferred Interest) in the Receivables and any
other property conveyed to the Company under the Transfer Agreement.
Section 3. Earnings to Transferor. The Company will use its
good faith efforts to invest the funds received by it pursuant to Section 1
hereof until such time as such funds are utilized to pay maturing Commercial
Paper, it being understood that all of such funds will be invested, from time to
time, in investments maturing on the business day preceding each maturity of the
Commercial Paper issued in connection with the Transfer Agreement. After the
payment in full of all Commercial Paper issued by the Company in connection with
the Transfer Agreement, the Company shall remit to the Transferor the amount
reasonably determined by the Administrative Agent to be the amount of earnings
received by the Company on such funds, net of appropriate investment expenses.
Section 4. Purchase Agreement. LADD agrees that prior to April
25, 1996 it shall take no action to cause the dissolution of the Transferor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Collection Agent, LADD
and the Company each have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
LADD FUNDING CORPORATION,
as Transferor
By: _______________________________
Name:
Title:
ENTERPRISE FUNDING CORPORATION,
as Company
By: _______________________________
Name:
Title:
LADD FURNITURE, INC.,
individually and
as Collection Agent
By: _______________________________
Name:
Title:
3
<PAGE>
AMENDMENT AND WAIVER AGREEMENT
THIS AMENDMENT AND WAIVER AGREEMENT (this "Agreement"), dated as of
March 29, 1996, is entered into among LADD Furniture, Inc. (the "Company"),
NationsBank, N.A. f/k/a NationsBank, N.A. (Carolinas) f/k/a NationsBank of North
Carolina, N.A., as Agent (the "Agent"), the guarantors identified as such on the
signature pages attached hereto (the "Guarantors"), and the banks identified as
such on the signature pages hereto (the "Banks"). Terms used but not otherwise
defined herein shall have the meanings provided in the Credit Agreement (as
defined below).
RECITALS
A. The Company, the Guarantors, the Banks and the Agent entered into
that certain Amended and Restated Credit Agreement dated as of October 19, 1994,
that certain First Amendment to Amended and Restated Credit Agreement dated as
of February 16, 1995, that certain Second Amendment to Amended and Restated
Credit Agreement dated as of March 30, 1995 and that certain Third Amendment to
Amended and Restated Credit Agreement (the "Third Amendment") dated as of August
15, 1995 (collectively, the "Credit Agreement").
B. The Company has informed the Agent that an Event of Default may
exist under the terms of the Credit Agreement due to the Company's failure to be
in compliance with Section 8.12 of the Credit Agreement for the Quarterly Date
ending closest to March 31, 1996 (the "March 31 Financial Covenant Default").
C. Pursuant to the terms of the Third Amendment, the Company and the
other Obligors (i) executed and delivered certain security agreements, pledge
agreements and UCC financing statements that were placed into escrow and (ii)
agreed, if the Term Loan was not reduced to $35,000,000 or less prior to March
31, 1996, to (a) allow the release of the documents set forth in (i) above and
(b) pledge to the Banks all of their interests in real estate, in each case to
secure their obligations under the Credit Agreement and the other Basic
Documents.
D. The Company has entered into a proposal letter with NationsBank,
N.A. (South) and Fleet Capital Corporation the terms of which would provide new
financing to the Obligors to enable them to pay the Loans under the Credit
Agreement in full.
E. The Company has requested that the Banks (i) waive their right to
enforce any of their rights and remedies under the Credit Agreement with respect
to the March 31 Financial Covenant Default and (ii) postpone the requirement
that the Obligors pledge their interests in real estate to the Banks.
<PAGE>
F. The Company has leased equipment and other property (together with
all accessories, parts, repairs, replacements, substitutions, attachments,
modifications, additions, improvements, upgrades and accessions of, to or upon
said property, and all proceeds, including insurance proceeds, thereof and
therefrom, the "Leased Equipment") pursuant to certain Equipment Leasing
Agreements (together with any similar agreements executed subsequent to the date
of this Agreement, the "Equipment Leasing Agreements") with BOT Financial
Corporation ("BOT") and Unionbanc Leasing Corporation ("Unionbanc") and has
requested that the Banks acknowledge that (i) to the extent the Equipment
Leasing Agreements constitute leases of the Leased Equipment, the Company does
not have any ownership interest in the Leased Equipment and, therefore, the
Banks do not, and upon the fulfillment of the actions contemplated by paragraph
2(a) this Agreement will not, have a security interest in such Leased Equipment,
(ii) to the extent the Equipment Leasing Agreements constitute financings
secured by the Leased Equipment, any security interest that the Banks may now or
hereafter have in such Leased Equipment or any part thereof is and will be
junior and subordinated as to priority to that of BOT and Unionbanc, as
applicable, and (iii) in the event of any default by the Company under any of
the Equipment Leasing Agreements, BOT or Unionbanc, as applicable, may exercise
any and all of its remedies under said Equipment Leasing Agreements, or at law,
in equity or in bankruptcy, including the right to repossess and dispose of the
Leased Equipment, without notice to, or the consent of, the Banks or the Agent.
G. The Banks have agreed to execute and deliver this
Agreement on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Consent and Waiver. Subject to the provisions hereof, the Banks
hereby waive the rights and remedies which the Banks would otherwise have with
respect to the March 31 Financial Covenant Default. This is a limited one-time
waiver and does not (a) modify or amend Section 8.12 of the Credit Agreement,
(b) allow the Company to be in violation of Section 8.12 of the Credit Agreement
for any other Quarterly Date or (c) constitute a waiver of any other Default or
Event of Default that otherwise may exist under the terms of the Credit
Agreement.
2. Covenants and Agreements.
(a) Each Obligor agrees that, (i) pursuant to that Escrow
Agreement dated as of September 12, 1995 (the "Escrow Agreement") among
the Company, the Agent, the Guarantors identified as such on the
signature pages thereto and
- 2 -
<PAGE>
NationsBank, N.A. f/k/a NationsBank, N.A. (Carolinas), as escrow agent
(the "Escrow Agent"), instructions shall be given to the Escrow Agent
to deliver and release the Escrow Documents (as defined in the Escrow
Agreement) to the Agent on March 31, 1996 (or the first Business Day
thereafter), (ii) the Agent will file those Escrow Documents that
consist of UCC financing statements in the appropriate filing offices,
(iii) each Obligor will execute and deliver to the Agent all other
documents and take all further action as the Agent shall reasonably
request in order to grant a perfected lien to the Banks in all of the
personal property assets of each Obligor including all stock of any
Subsidiaries of any Obligor and (iv) any fees and expenses incurred in
connection with the foregoing shall be for the account of the Company.
(b) Notwithstanding the provisions of the Third Amendment, the
Banks agree that the Obligors shall not be required, at this time, to
pledge their interests in real estate to the Banks to secure their
obligations under the Credit Agreement and the other Basic Documents.
If, however, by May 15, 1996, the Obligors have not repaid the Loans in
full and satisfied all of their obligations under or with respect to
the Credit Agreement and the other Basic Documents, then each Obligor
shall within 30 days after requested (i) execute and deliver to the
Agent mortgages, deeds of trusts, deeds to secure debt or such other
documents as are necessary to provide the Banks with a perfected lien
on each parcel of real estate owned by such Obligor, (ii) execute and
deliver to the Agent (to the extent permitted) leasehold mortgages on
all material real property leased by such Obligor, (iii) provide such
appraisals, environmental reports, title insurance and other documents
or information regarding its real property as reasonably requested by
the Agent and (iv) assist in obtaining legal opinions from local
counsel in each state where the real property of such Obligor is
located as to the enforceability of such mortgage documents. It is
understood that failure of the Agent and the Banks to timely obtain
(i), (ii), (iii) and (iv) above shall constitute an Event of Default.
3. Acknowledgement. The Banks acknowledge that (i) to the extent the
Equipment Leasing Agreements constitute leases of the Leased Equipment, the
Company does not have any ownership interest in the Leased Equipment and,
therefore, the Banks do not, and upon the fulfillment of the actions
contemplated by paragraph 2(a) of this Agreement will not, have a security
interest in such Leased Equipment, (ii) to the extent the Equipment Leasing
Agreements constitute financings secured by the Leased Equipment, any security
interest that the Banks may now or hereafter have in such Leased Equipment or
any part thereof is and will be junior and subordinated as to priority to that
of BOT and Unionbanc, as applicable, and (iii) in the event of any default by
the Company under any of the Equipment Leasing
- 3 -
<PAGE>
Agreements, BOT or Unionbanc, as applicable, may exercise any and all of its
remedies under said Equipment Leasing Agreements, or at law, in equity or in
bankruptcy, including the right to repossess and dispose of the Leased
Equipment, without notice to, or the consent of, the Banks or the Agent. The
Banks (A) authorize the Agent to acknowledge in writing to BOT and Unionbanc, as
applicable, the terms of this paragraph 3 and (B) agree that the Agent may
execute and deliver all further instruments and documents and take such further
reasonable action that may be necessary to carry out the intent of this
paragraph.
4. Condition Precedent. This Agreement shall not be effective until the
Agent has received copies of this Agreement duly executed by the Obligors and
the Majority Banks.
5. Liens. The Company and the Guarantors, as applicable, affirm the
liens and security interests created and granted in the Credit Agreement and the
other Basic Documents and agree that this Agreement shall in no manner adversely
affect or impair such liens and security interests.
6. Representations and Warranties. The Company hereby represents and
warrants to the Banks and the Agent that (a) no Default or Event of Default
exists and is continuing under the Credit Agreement except as is being waived
pursuant to paragraph 1 above; (b) the Company has no claims, counterclaims,
offsets, credits or defenses to the Basic Documents and the performance of its
obligations thereunder, or if the Company has any such claims, counterclaims,
offsets, credits or defenses to the Basic Documents or any transaction related
to the Basic Documents, the same are hereby waived, relinquished and released in
consideration of the Banks' execution and delivery of this Agreement; (c) since
the date of the last financial statements of the Company delivered to the Banks,
no material adverse change has occurred in the business, financial condition or
prospects of the Company other than as previously disclosed to the Banks and (d)
the Company has sold, and no longer has any ownership interest in, the Leased
Equipment described in the Equipment Leasing Agreements, including, without
limitation, the Leased Equipment described on Schedules A1 and A2 hereto.
7. Acknowledgment of Guarantors. The Guarantors acknowledge and consent
to all of the terms and conditions of this Agreement and agree that this
Agreement and all documents executed in connection herewith do not operate to
reduce or discharge the Guarantors' obligations under the Credit Agreement or
the other Basic Documents. The Guarantors acknowledge and agree that the
Guarantors have no claims, counterclaims, offsets, credits or defenses to the
Basic Documents and the performance of the Guarantors' obligations thereunder,
or if Guarantors did have any such claims, counterclaims, offsets, credits or
defenses to the Basic Documents or any transaction related to the Basic
Documents, the same are hereby waived, relinquished and released in
consideration of the Banks' execution and delivery of this Agreement.
- 4 -
<PAGE>
8. No Other Changes. Except as expressly modified and amended in this
Agreement, all of the terms, provisions and conditions of the Basic Documents
shall remain unchanged.
9. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which taken together shall constitute one and the same instrument.
10. ENTIRETY. THIS AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER BASIC
DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER
HEREOF. THESE BASIC DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
[Remainder of Page Intentionally Left Blank]
- 5 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY
ATTEST: LADD FURNITURE, INC.
By:____________________ By:_____________________________
Assistant Secretary William S. Creekmuir
Executive Vice President and
Chief Financial Officer
(corporate seal)
GUARANTORS
ATTEST: PENNSYLVANIA HOUSE, INC.
By:_____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: CLAYTON-MARCUS COMPANY, INC.
By:____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: LADD CONTRACT SALES CORPORATION
By:_____________________ By:_______________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
- 6 -
<PAGE>
ATTEST: BARCLAY FURNITURE CO.
By:______________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: AMERICAN FURNITURE COMPANY,
INCORPORATED
By:_____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: PILLIOD FURNITURE, INC.
By:_____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: LEA INDUSTRIES, INC.
(a North Carolina corporation)
By:_____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
- 7 -
<PAGE>
BANKS
NATIONSBANK, N.A. f/k/a
NATIONSBANK, N.A. (CAROLINAS) f/k/a
NATIONSBANK OF NORTH CAROLINA, N.A.
as Agent and as a Bank
By:_____________________________
Richard G. Parkhurst, Jr.
Vice President
CIBC INC.
By:_____________________________
Name:___________________________
Title:__________________________
CREDITANSTALT CORPORATE FINANCE,
INC.
By:_____________________________
Name:___________________________
Title:__________________________
WACHOVIA BANK OF NORTH CAROLINA,
N.A.
By:_____________________________
Name:___________________________
Title:__________________________
ABN AMRO BANK N.A.
By:_____________________________
Name:___________________________
Title:__________________________
BRANCH BANK AND TRUST COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
COMMONWEALTH BANK, a division of
MERIDIAN BANK
By:_____________________________
Name:___________________________
Title:__________________________
- 8 -
<PAGE>
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:_____________________________
Name:___________________________
Title:__________________________
PNC BANK, NATIONAL ASSOCIATION
By:_____________________________
Name:___________________________
Title:__________________________
NBD BANK f/k/a NBD BANK, N.A.
By:_____________________________
Name:___________________________
Title:__________________________
- 9 -
(LADD LOGO) NEWS RELEASE
One Plaza Center Box HP3 FOR IMMEDIATE RELEASE
High Point, NC 27261-1500 April 22, 1996
Contact: John J. Ong
(910) 888-6353
E-mail: [email protected]
LADD REPORTS FIRST QUARTER LOSS
HIGH POINT, NC -- LADD Furniture, Inc. today reported that net
sales for the first quarter of fiscal 1996 declined to $138.8 million from
$153.4 million in the same period of fiscal 1995. LADD president and chief
executive officer Fred L. Schuermann, Jr., said the sales decline was
entirely due to LADD's divestiture of several of its business units during
late 1995 and early 1996. "Excluding the four divestiture companies,"
Schuermann said, "our net sales increased by $1.0 million compared to the
first quarter of 1995, and rose $4.3 million over last year's fourth quarter
level. And, considering the very weak start 1996 got off to at the retail
level, we are pleased with our overall first quarter sales performance."
LADD incurred a net loss of $7.0 million in this year's first
quarter, compared to net earnings of $24,000 in the year-earlier period. Accor-
ding to Schuermann, the 1996 quarterly loss includes a number of items which
complicate analysis of the period's results. These items relate to LADD's
divestiture program, the anticipated shutdown of the Daystrom Furniture
business, further restructuring of some LADD operations undertaken by the new
corporate management team which took office on January 1, 1996, and a planned
refinancing of the company's overall bank credit facility.
Schuermann noted that a $5.1 million pretax restructuring expense
was incurred in the first quarter. "This expense primarily reflected a
shortfall in the net proceeds anticipated from selling our Fournier and
Daystrom units, plus an additional $1 million for the further restructuring
of our casegoods and upholstery groups, primarily in the form of severance
accruals," he said, adding, "We have thus far been unable to consummate the
sale of Daystrom Furniture, and we will accordingly initiate the legal steps
required to close the company by July of this year." Schuermann said this
decision required additional charges to write Daystrom's assets down to their
estimated liquidation value and provide for the anticipated costs of
liquidating the company. He noted that it is still possible that Daystrom may
be sold. "In that case," he said, "some of the liquidation accrual made
during the first quarter may be subsequently reversed."
- MORE -
The LADD family of fine furniture companies
Lea Industries (Bullet) American Drew (Bullet) Clayton Marcus (Bullet) Barclay
Amercian of Martinsville (Bullet) Kenbridge (Bullet) Pennsylvania House (Bullet)
Pilliod
<PAGE>
"Additionally," Schuermann said, "although we sold our Fournier
Furniture business on February 26, 1996, Fournier's operating losses were
included in LADD's consolidated operating results until that time, and
Daystrom's operating losses were included in our consolidated results for the
entire first quarter. In combination, these losses reduced LADD's first
quarter operating income by a total of about $2.4 million."
He concluded, "While the actions undertaken by the new management
team during the first quarter resulted in substantial short-term expense, we
believe they are necessary steps and have laid the groundwork for renewed
progress and profitability for the company as a whole. I remain very positive
about the management team and the steps all of us are taking together to
restore LADD to a position of preeminence in our industry."
LADD executive vice president and chief financial officer William
S. Creekmuir noted that the company's total debt increased by $41.3 million
during the first quarter, primarily due to the termination of LADD's accounts
receivable securitization program in anticipation of the refinancing of the
company's bank credit facility. "In anticipation of refinancing, the company
wrote off $890,000 in financing fees during the first quarter," Creekmuir
said.
On another topic, Creekmuir said that U.S. retail furniture sales
have shown some recent improvement, following the disruptions caused by
severe winter weather in the first two months of the year, and noted,
"Dealers attending the International Home Furnishings Market, which started
here in High Point last week, are considerably more upbeat than they were as
recently as a month ago. While the furniture market is not yet over at this
point, it looks to us as though the ongoing LADD furniture businesses are
enjoying a very good overall market, in terms of both dealer attendance and
order commitments."
Headquartered in High Point, NC, LADD is one of the largest North
American manufacturers of residential furniture. LADD markets its wide range
of residential wood and upholstered furniture domestically under the major
brand names American Drew, American of Martinsville, Barclay, Clayton Marcus,
Kenbridge, Lea, Pennsylvania House and Pilliod, and exports these same brand
name products worldwide through LADD International. Under the American of
Martinsville name, LADD 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 and retirement homes, and to governmental and university dormitory
markets. LADD also owns and operates LADD Transportation, a support company.
LADD's stock is traded on the Nasdaq National Market under the symbol LADF.
TABLE FOLLOWS
NOTE: To receive fax copies of other recent LADD news releases free of
charge, dial 800-758-5804, extension 501325. These same news releases are
also available on the Internet @ www.prnewswire.com ("Company news").
<PAGE>
LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRELIMINARY AND UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED
MAR. 30 , 1996 APRIL 1, 1995
<S> <C> <C>
Net sales $ 138,844,000 153,388,000
Restructuring expense 5,149,000 --
Earnings (loss) before interest and income taxes (8,999,000) 2,838,000
Interest expense 2,660,000 2,803,000
Earnings (loss) before income taxes (11,659,000) 35,000
Income tax expense (benefit) (4,664,000) 11,000
Net earnings (loss) $ (6,995,000) 24,000
Net earnings (loss) per common share $ (0.91) 0.00
Weighted average number of
common shares outstanding 7,724,259 7,705,024
</TABLE>
SHARE AND PER SHARE DATA HAVE BEEN ADJUSTED FOR A 1-FOR-3 REVERSE STOCK SPLIT
WHICH BECAME EFFECTIVE MAY 16, 1995.
THE 1996 FIRST QUARTER RESULTS REFLECT THE COMPANY'S SALE OF ITS BROWN JORDAN
AND LEA LUMBER & PLYWOOD BUSINESSES EFFECTIVE DECEMBER 29, 1995, AND ITS
FOURNIER FURNITURE BUSINESS EFFECTIVE FEBRUARY 26, 1996.
<PAGE>
LADD FURNITURE, INC. AND SUBSIDIARIES - Supplemental Financial Data
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
QUARTERS ENDED
IN THOUSANDS, EXCEPT PER SHARE DATA 3/30/96* 12/30/95 9/30/95 7/1/95** 4/1/95
<S> <C> <C> <C> <C> <C>
Net sales $138,844 152,981 159,144 148,989 153,388
Cost of sales 119,264 125,379 130,549 133,492 126,560
Gross profit 19,580 27,602 28,595 15,497 26,828
Selling, general and administrative expenses 21,788 25,792 23,402 28,335 23,816
Restructuring expense 5,149 (576) -- 25,696 --
Operating income (loss) (7,357) 2,386 5,193 (38,534) 3,012
Other deductions:
Interest expense 2,660 3,152 2,997 2,846 2,803
Other, net 1,642 661 163 2,687 174
4,302 3,813 3,160 5,533 2,977
Earnings (loss) before income taxes (11,659) (1,427) 2,033 (44,067) 35
Income tax expense (benefit) (4,664) (1,645) 142 (16,744) 11
Net earnings (loss) $ (6,995) 218 1,891 (27,323) 24
Net earnings (loss) per common share $ (0.91) 0.03 0.24 (3.54) 0.00
Weighted average number of common
shares outstanding 7,725 7,729 7,726 7,725 7,705
</TABLE>
*THE 1996 FIRST QUARTER RESULTS REFLECT THE COMPANY'S SALE OF ITS BROWN
JORDAN AND LEA LUMBER & PLYWOOD BUSINESSES EFFECTIVE DECEMBER 29, 1995, AND
ITS FOURNIER FURNITURE BUSINESS EFFECTIVE FEBRUARY 26, 1996. ** THE 1995
SECOND QUARTER FIGURES INCLUDE A PRETAX NON-CASH CHARGE OF $10.2 MILLION, IN
ADDITION TO THE $25.7 MILLION PRETAX RESTRUCTURING CHARGE SHOWN.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS 3/30/96 12/30/95 9/30/95 7/1/95 4/1/95
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 1,049 1,272 2,913 1,406 1,787
Trade accounts receivable, net 77,579 38,288 45,337 41,347 59,767
Inventories 91,386 89,466 86,313 91,127 124,181
Prepaid expenses and other current assets 20,263 13,663 10,520 11,670 10,515
Total current assets 190,277 142,689 145,083 145,550 196,250
Property, plant and equipment, net 82,652 82,586 82,567 83,826 109,014
Businesses held for sale, net -- 8,052 32,587 31,184 --
Intangible and other assets, net 78,900 79,659 76,631 76,515 83,792
$351,829 312,986 336,868 337,075 389,056
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 3,563 309 558 618 657
Short-term bank borrowings 5,000 3,037 2,450 1,950 5,025
Trade accounts payable 25,984 28,419 26,517 24,059 25,041
Accrued expenses and other current liabilities 32,620 31,396 30,629 29,814 32,267
Total current liabilities 67,167 63,161 60,154 56,441 62,990
Long-term debt, excluding current installments 148,687 112,598 140,182 145,287 153,102
Deferred compensation and other liabilities 8,211 6,593 7,053 7,000 6,402
Deferred income taxes 9,338 5,437 4,255 4,769 15,386
Total liabilities 233,403 187,789 211,644 213,497 237,880
Total shareholders' equity 118,426 125,197 125,224 123,578 151,176
$351,829 312,986 336,868 337,075 389,056
</TABLE>
ALL SHARE AND PER SHARE DATA HAVE BEEN RESTATED TO REFLECT A 1-FOR-3 REVERSE
SPLIT OF LADD'S COMMON STOCK, WHICH BECAME EFFECTIVE ON MAY 16, 1995. THE
PERIOD ENDED MARCH 30, 1996 REFLECTS THE TERMINATION OF THE COMPANY'S ACCOUNTS
RECEIVABLE SECURITIZATION PROGRAM EFFECTIVE MARCH 28, 1996.
<PAGE>
