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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) February 11, 1997
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LADD FURNITURE, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-11577 56-1311320
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(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
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(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.)
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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 February 11, 1997, the Registrant issued a press release
reporting its results of operations for its fourth quarter and fiscal year
ended December 28, 1996. The press release is attached hereto as
Exhibit 10.1 and supplemental financial data submitted to the stock analysts is
attached hereto as Exhibit 10.2.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Exhibits
10.1 Press Release dated February 11, 1997.
10.2 Supplemental Financial Data submitted to
stock analysts dated February 11, 1997.
ITEM 8. CHANGE IN FISCAL YEAR.
Not Applicable.
2
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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: February 12, 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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LADD NEWS RELEASE
Furniture, Inc. FOR IMMEDIATE RELEASE
February 11, 1997
One Plaza Center Box HP3 Contact: John J. Ong
High Point, NC 27261-1500 (910) 888-6353
E-mail: [email protected]
LADD REPORTS $1.6 MILLION PROFIT FOR FOURTH QUARTER
HIGH POINT, NC -- LADD Furniture, Inc. today reported net earnings of
$1.6 million or $0.20 per share for the final quarter of 1996, up from $218,000
or $0.03 per share in the comparable 1995 quarter. Fourth quarter net sales
totaled $118.3 million, in fiscal 1996, down from $149.3 million in the same
period of 1995. All of this year-over-year decline was due to LADD's divestiture
of several of its business units in late 1995 and early 1996, and on an "ongoing
company" basis, fourth quarter net sales for 1996 were actually slightly above
those of the year-earlier period.
For the full year, LADD lost $2.5 million or $0.32 per share in 1996,
compared to a net loss of $25.2 million or $3.26 per share in 1995. The full
year net losses in both years were largely attributable to substantial
nonrecurring charges recorded in the first quarter of 1996 and in the second
quarter of 1995. These charges were incurred in connection with the
above-mentioned divestitures and with the restructuring of some of LADD's
"ongoing" businesses in the second half of 1995 and in early 1996. Net sales for
all of 1996 declined to $497.5 million from $599.2 million in 1995, largely due
to the divestiture of the former LADD business units. Effective with this
report, LADD has also reclassified the accounting treatment of its
transportation operations for prior periods, which has the effect of reducing
both previously-reported net sales and cost of goods sold, while increasing
"other income". This change in financial reporting has been made so that the
company's net sales and cost of goods sold will better reflect the results of
the company's basic business - the manufacturing and marketing of furniture.
LADD president and CEO Fred L. Schuermann, Jr. said, "Excluding the
divestiture companies, our 1996 fourth quarter net sales declined slightly
compared to those of the prior quarter, and were about the same as in the year's
second quarter." He noted, "Despite this flat sales trend, we were able to
achieve consecutive quarterly improvement during 1996 in operating results,
after adjusting for the divested LADD business units and a number of
nonrecurring transactions that occurred throughout 1996." He continued, "I am
very pleased with the progress our management team accomplished during 1996 in
fundamentally strengthening the market position, profitability and financial
strength of LADD and its three furniture operating groups-residential casegoods,
residential upholstery and contract sales."
-over-
The LADD family of fine furniture companies
Lea Industries o American Drew o Clayton Marcus
Barclay o American of Martinsville o Pennsylvania House o Pilliod
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Schuermann added, "Although the general tone of business in the
residential furniture industry improved late in 1996, allowing us to enjoy an
excellent October furniture market, the retail part of the business has softened
again recently. As a result, our incoming orders in the past several months have
generally been lackluster, except in the contract market, which continues to
exhibit remarkable strength."
Executive vice president and chief financial officer William S.
Creekmuir reported that LADD's total debt was reduced by $12.4 million during
the fourth quarter, to $131.0 million as of December 28, 1996. Creekmuir added,
"During the last three quarters of 1996 combined, the company's total debt was
reduced by over $26 million. Our operating company executives also did an
excellent job in the aggregate of reducing inventories during 1996." He pointed
out that LADD's total inventories dropped to $84.5 million at the end of 1996
from the mid-1996 peak of $94.4.
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 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 National Market under the
symbol LADF.
TABLE FOLLOWS
# # # # # # #
NOTE: To receive fax copies of recent LADD news releases free of charge, 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
Dec. 30, 1995 Dec. 28, 1996
Net sales $ 149,336,000 118,267,000
Earnings before interest
and income taxes 1,725,000 5,990,000
Interest expense 3,152,000 3,169,000
Earnings (loss) before income taxes (1,427,000) 2,821,000
Income tax expense (benefit) (1,645,000) 1,263,000
Net earnings $ 218,000 1,558,000
Net earnings per common share $ 0.03 0.20
Weighted average number of
common shares outstanding 7,726,967 7,719,567
52 Weeks Ended
Dec. 30, 1995 Dec. 28, 1996
Net sales $ 599,203,000 497,457,000
Earnings (loss) before interest
and income taxes (31,628,000) 7,567,000
Interest expense 11,798,000 12,069,000
Loss before income taxes (43,426,000) (4,502,000)
Income tax benefit 18,236,000 2,032,000
Net loss $ (25,190,000) (2,470,000)
Net loss per common share $ (3.26) (0.32)
Weighted average number of
common shares outstanding 7,720,783 7,722,085
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LADD FURNITURE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(PRELIMINARY AND UNAUDITED)
The company divested four former business units ("businesses held for
sale") between December 1995 and December 1996. The net sales, cost of goods
sold, selling, general and administrative (SG&A) expenses and other operating
results from these former business units are included in the respective lines of
the company's operating statements for all periods prior to their divestiture.
These former business units have been reflected in the company's balance sheets
since mid-1995 in the aggregate as a one-line net item, "businesses held for
sale."
Effective December 28, 1996, all prior-period LADD Furniture, Inc.
operating results have been restated to reclassify the company's transportation
operations as "other income, net" in order to reflect the company's operating
profit as deriving from its basic business, the manufacturing and marketing of
residential and contract furniture. This accounting change has the effect on
previously-reported operating results of reducing both net sales and cost of
goods sold, while increasing "other income, net."
Results for the quarter ended December 28, 1996 include the following
pretax items: a $547 thousand restructuring credit and a $738 thousand benefit
resulting from the termination of the company's defined employee benefit plans.
Results for the quarter ended December 30, 1995 include $576 thousand in the
form of a pretax restructuring credit.
Results for the year ended December 28, 1996 include the
following pretax items: a $3.4 million restructuring charge, a
$738 thousand curtailment gain resulting from the termination of the company's
defined employee benefit plans; a $4.2 million credit resulting from the
termination of the company's retiree health care plan; a $1.7 million credit
resulting from the settlement of an outstanding insurance claim; and $3.4
million in losses from operations for the "businesses held for sale." Results
for the year ended December 30, 1995 include the following pretax items: a $25.1
million restructuring charge and a $10.2 million non-cash charge to increase
reserves for slow-moving and discontinued inventories, provide for potential bad
debts and recognize other liabilities.
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LADD FURNITURE, INC. AND SUBSIDIARIES - Supplemental Financial Data
February 11, 1997 CONTACT: John J. Ong, CFA (910) 888-6353
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRELIMINARY AND UNAUDITED)
<TABLE>
<CAPTION>
Quarters Ended Years Ended
In thousands, except per share data 12/30/95 12/28/96 12/30/95 12/28/96
<S> <C> <C> <C> <C>
Net sales $ 149,336 118,267 $ 599,203 497,457
Cost of sales 122,070 96,070 502,999 411,697
Gross profit 27,266 22,197 96,204 85,760
Selling, general and administrative expenses 25,792 16,613 101,345 74,363
Restructuring expense (576) (547) 25,120 3,431
Operating income (loss) 2,050 6,131 (30,261) 7,966
Other deductions:
Interest expense 3,152 3,169 11,798 12,069
Other, net 325 141 1,367 399
3,477 3,310 13,165 12,468
Earnings (loss) before income taxes (1,427) 2,821 (43,426) (4,502)
Income tax expense (benefit) (1,645) 1,263 (18,236) (2,032)
Net earnings (loss) $ 218 1,558 $ (25,190) (2,470)
Net earnings (loss) per common share $ 0.03 0.20 %(3.26) (0.32)
Weighted average number of common
shares outstanding 7,727 7,720 7,721 7,722
</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS (PRELIMINARY AND UNAUDITED)
<TABLE>
<CAPTION>
Dollar amounts in thousands 12/30/95* 9/28/96 12/28/96
<S> <C> <C> <C>
Assets
Current assets:
Cash $ 1,272 1,713 469
Trade accounts receivable, net 38,288* 75,736 66,730
Inventories, net 89,466 86,428 84,484
Prepaid expenses and other current assets 13,663 8,337 5,768
Total current assets 142,689 172,214 157,451
Property, plant and equipment, net 82,586 78,543 74,729
Businesses held for sale, net 8,052 -- --
Intangible and other assets, net 79,659 81,088 81,415
$312,986 331,845 313,595
Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long-term debt $ 309 5,136 5,093
Short-term bank borrowings 3,037 -- --
Trade accounts payable 28,419 27,766 24,358
Accrued expenses and other current liabilities 31,396 28,965 30,084
Total current liabilities 63,161 61,867 59,535
Long-term debt, excluding current installments 112,598* 138,234 125,859
Deferred and other liabilities 12,030 10,258 5,125
Total liabilities 187,789 210,359 190,519
Total shareholders' equity 125,197 121,486 123,076
$312,986 331,845 313,595
</TABLE>
* These items reflect the effect of $36 million in financing proceeds from the
company's accounts receivable securitization program, which was subsequently
terminated on March 28, 1996.
