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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) October 16, 1997
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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)
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One Plaza Center, Box HP-3, High Point, North Carolina 27261-1500
(Address of principal executive offices) (Zip Code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (910) 889-0333
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N/A
(Former name or former address, if changed since last report.)
1
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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.
On October 16, 1997, the Registrant issued a press release
reporting its 1997 third quarter results of operations. The press release is
attached hereto as Exhibit 10.1, the supplemental financial data submitted to
stock analysts is attached as Exhibit 10.2, and pro forma adjusted third quarter
1996 schedule submitted to stock analysts is attached as Exhibit 10.3.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Exhibits
10.1 Press Release dated October 16, 1997.
10.2 Supplemental Financial Data submitted to
stock analysts dated October 16, 1997.
2
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10.3 Pro forma adjusted third quarter 1996
schedule submitted to stock analysts.
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
3
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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: October 22, 1997 By: /s/William S. Creekmuir
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William S. Creekmuir
Title: Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
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NEWS RELEASE
FOR IMMEDIATE RELEASE
October 16, 1997
Contact: John J. Ong
(910) 888-6353
E-mail: [email protected]
(LADD Furniture, Inc. Logo Goes Here}
One Plaza Center Box HP3
High Point, NC 27261-1500
LADD REPORTS SIGNIFICANTLY IMPROVED
THIRD QUARTER OPERATING RESULTS
HIGH POINT, NC -- LADD Furniture, Inc. today reported 1997 fiscal third
quarter net sales of $129.9 million, an increase of 8 percent over the 1996
third quarter's $120.4 million. This year's third quarter net earnings totaled
$1.7 million, or $0.22 per share, compared to $1.8 million or $0.23 per share,
in the year-earlier quarter.
"On the surface, our third quarter earnings would appear to have been
basically unchanged," said LADD president and CEO Fred Schuermann, "However, the
1996 third quarter results included several nonrecurring items associated with
our company's 1995-96 restructuring actions, in addition to a significant
one-time insurance recovery. Excluding these items," Schuermann explained,
"LADD's comparable third quarter profit before income taxes nearly tripled, to
$2.8 million this year from $1.0 million in 1996."
For the first nine months of fiscal 1997, LADD earned $3.9 million
after taxes, or $0.50 per share, compared to a net loss of $4.0 million, or
$0.52 per share in the same period of fiscal 1996. Net sales for the nine months
totaled $378.9 million, compared to $379.2 million a year earlier. Excluding
revenues of businesses which were subsequently divested, 1997 nine-month net
sales increased 4 percent compared to the 1996 period.
Schuermann continued, "While I am pleased with LADD's continuing
year-over-year improvement in profitability, the third quarter was a
disappointing one relative to our expectations at the start of the quarter.
Somewhat surprisingly, the nationwide retail furniture environment remained very
soft throughout most of this year's third quarter," he said, "which hampered our
results."
Schuermann noted that LADD's American of Martinsville contract
furniture division continues to record very strong sales gains, and added that
the tone of business for the rest of LADD's residential furniture companies has
improved markedly in recent weeks. "Our order backlog increased by $10 million
from the end of June to the end of September," Schuermann said, "and we are
anticipating an improvement in the overall retailing environment during the
remainder of 1997. This should be reflected at the Fall International Home
Furnishings Market, which began today in High Point." He concluded, "We feel the
LADD companies have a strong overall lineup of new product offerings for this
market, including Lea's Stars & Stripes youth bedroom furniture introduction and
the new Pennsylvania House eclectic furnishings collection of casegoods and
upholstery - a collaboration with world-famous designer Bill Blass."
- over -
The LADD family of fine furniture companies
Lea Industries * American Drew * Clayton Marcus
Barclay * American of Martinsville * Pennsylvania House * Pilliod
LADD executive vice president and CFO William S. Creekmuir reported
that LADD's inventories declined by $2.3 million during the third quarter, but
that trade accounts receivable increased by almost $13 million in the same
period. "July and August were slow shipping months for us," Creekmuir said, "but
this was followed by a very strong rebound in September." He added, "Even though
LADD's net working capital rose almost $6 million in the third quarter, total
debt increased less than $700,000 from the mid-year 1997 level and was about $15
million lower than at the end of last year's third quarter." Creekmuir said the
company anticipates that both inventories and debt will be reduced in the final
quarter of this year.
Headquartered in High Point, NC, LADD is one of the largest North
American manufacturers of residential furniture. The company markets its wide
range of residential wood and upholstered furniture domestically under the major
brand names American Drew, Barclay, Clayton Marcus, 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 and assisted-living facilities, retirement homes and
governmental and university dormitory markets. LADD also owns and operates LADD
Transportation, a support company. LADD's stock is traded on the Nasdaq Stock
Market under the symbol LADF.
TABLE FOLLOWS
# # # # # # #
FORWARD-LOOKING STATEMENTS: This news release contains forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. Such statements are dependent on a number of factors that could cause
actual results to differ materially from those expressed or implied in the
forward-looking statements. Such factors include anticipated sales growth
resulting from an improved retailing climate and the company's new product
introductions, and anticipated reductions in inventory and debt levels, in
addition to those factors set forth in Item 7 ("Management's Discussion and
Analysis") in the company's Form 10-K report for the year ended December 28,
1996.
NOTE: To receive fax copies of recent LADD news releases at no cost, just
dial 800-758-5804, extension 501325. These releases are also available via the
Internet @www.prnewswire.com ("company news").
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LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRELIMINARY AND UNAUDITED)
13 Weeks Ended
Sept. 28, 1996(a) Sept. 27, 1997
Net sales* $ 120,447,000 129,935,000
Earnings before interest
and income taxes 6,461,000 5,549,000
Interest expense 3,182,000 2,701,000
Earnings before income taxes 3,279,000 2,848,000
Income tax expense 1,477,000 1,110,000
Net earnings $ 1,802,000 1,738,000
Net earnings per common share $ 0.23 0.22
Weighted average number of
common shares outstanding 7,721,165 7,757,573
39 Weeks Ended
Sept. 28, 1996(a,b) Sept. 27, 1997
Net sales* $ 379,190,000 378,875,000
Earnings before interest
and income taxes 1,577,000 14,831,000
Interest expense 8,900,000 8,425,000
Earnings (loss) before income taxes (7,323,000) 6,406,000
Income tax expense (benefit) (3,295,000) 2,498,000
Net earnings (loss) $ (4,028,000) 3,908,000
Net earnings (loss) per common share $ (0.52) 0.50
Weighted average number of
common shares outstanding 7,722,924 7,738,119
NOTES: (a) The 1996 third quarter and nine-month results include $1.7
million of pretax income resulting from the settlement of a long-standing
insurance claim and a $0.9 million pretax credit to restructuring expense. (b)
The 1996 nine-month results include a pretax restructuring charge of $4.0
million and a $4.2 million pretax gain resulting from the company's curtailment
of its post-retirement benefit plan.
*Net sales by business group Third Quarter First Nine Months
were as follows (000's): 1996 1997 1996 1997
Casegoods $ 71,449 72,068 211,195 208,240
Upholstery 30,049 28,017 95,429 88,731
Contract 18,692 29,850 57,020 81,904
Divestiture companies 257 -- 15,546 --
Total $120,447 129,935 379,190 378,875
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LADD FURNITURE, INC. AND SUBSIDIARIES - Supplemental Financial Data
October 16,1997 CONTACT: John J. Ong, CFA (910) 888-6353
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Quarters Ended*
In thousands, except
per share data 3/30/96 6/29/96 9/28/96 12/28/96 3/29/97 6/28/97 9/27/97
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $ 135,260 123,483 120,447 118,267 123,368 125,572 129,935
Cost of sales 116,038 100,220 99,369 95,955 101,437 101,393 106,791
Gross profit 19,222 23,263 21,078 22,312 21,931 24,179 23,144
Selling, general and
administrative expenses 21,788 19,110 16,852 16,613 17,552 18,561 17,794
Restructuring expense 5,149 (279) (892) (547) -- -- --
Operating income
(loss) (7,715) 4,432 5,118 6,246 4,379 5,618 5,350
Other deductions:
Interest expense 2,660 3,058 3,182 3,169 3,005 2,719 2,701
Other deductions
(income), net 1,284 317 (1,343) 141 521 194 (199)
3,944 3,375 1,839 3,310 3,526 2,913 2,502
Earnings (loss) before
income taxes (11,659) 1,057 3,279 2,936 853 2,705 2,848
Income tax expense
(benefit) (4,664) (108) 1,477 1,343 333 1,055 1,110
Net earnings (loss) $ (6,995) 1,165 1,802 1,593 520 1,650 1,738
Net earnings (loss) per
common share $ (0.91) 0.15 0.23 0.21 0.07 0.21 0.22
Weighted average number
of common
shares outstanding 7,725 7,723 7,721 7,720 7,720 7,737 7,758
</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
Dollar amounts in thousands 3/30/96 6/29/96 9/28/96 12/28/96 3/29/97 6/28/97 9/27/97
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash $ 1,049 430 1,713 469 151 191 659
Trade accounts receivable,
net 77,579 72,429 75,736 66,730 72,786 71,016 83,865
Inventories 92,707 95,715 87,749 85,920 89,260 97,091 94,819
Prepaid expenses and other
current assets 19,731 16,647 8,211 5,768 6,831 7,536 6,923
Total current assets 191,066 185,221 173,409 158,887 169,028 175,834 186,266
Property, plant and equipment, net 82,652 82,633 78,543 74,729 68,580 67,648 66,708
Intangible and other assets, net 78,900 79,996 81,088 81,415 80,551 79,668 77,796
$ 352,618 347,850 333,040 315,031 318,159 323,150 330,770
Liabilities and Shareholders'
Equity
Current liabilities:
Current installments of
long-term debt $ 3,563 3,511 5,136 5,093 6,676 6,633 4,965
Short-term bank borrowings 5,000 -- -- -- -- -- --
Trade accounts payable 25,984 31,373 27,766 24,358 25,120 26,807 27,080
Accrued expenses and other
current liabilities 32,620 32,858 29,371 30,696 33,552 30,030 36,203
Total current liabilities 67,167 67,742 62,273 60,147 65,348 63,470 68,248
Long-term debt, excluding
current installments 148,687 149,637 138,234 125,859 122,694 121,231 123,565
Deferred and other liabilities 17,549 10,045 10,258 5,125 5,639 12,027 10,481
Total liabilities 233,403 227,424 210,765 191,131 193,681 196,728 202,294
Total shareholders'
equity 119,215 120,426 122,275 123,900 124,478 126,422 128,476
$ 352,618 347,850 333,040 315,031 318,159 323,150 330,770
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* The 1996 quarterly results reflect the company's sale of its Fournier
Furniture business effective February 26, 1996, and the liquidation of its
Daystrom Furniture business during the second half of the year. During the
second quarter of 1997, one of the company's business units changed its
inventory accounting from the LIFO method to the FIFO method. The effect on the
company's consolidated results of operations was immaterial. All quarterly
information presented here has been restated to reflect this accounting change.
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LADD Furniture, Inc.
PROFORMA ADJUSTED EARNINGS SCHEDULE
OCTOBER 16, 1997 (UNAUDITED)
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<CAPTION>
REPORTED DAYSTROM & PRO FORMA
IN THOUSANDS 3RD QTR UNUSUAL 3RD QTR 3RD QTR
1996 ADJ. 1996 1997
-------- -------- -------- ----
<S> <C> <C> <C> <C>
Net Sales $120,447 120,447 129,935
Daystrom Net Sales -- 257 (257) --
-------- -------- -------
Adjusted Net Sales 120,447 120,190 129,935
Earnings Before Interest & Taxes 6,461 6,461 5,549
Daystrom Operating Loss -- (297) 297 --
Restructuring Credit -- 892 (892) --
Insurance Proceeds -- 1,650 (1,650) --
-------- -------- --------
Adjusted EBIT 6,461 4,216 5,549
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Adjusted EBIT to Net Sales 5.36% 3.51% 4.27%
Interest Expense 3,182 3,182 2,701
-------- -------- ---------
Profit Before Taxes $ 3,279 1,034 2,848
======== ======== =========
Weighted average number of
common shares outstanding 7,721 7,721 7,758
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