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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) July 17, 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)
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
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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 July 17, 1997, the Registrant issued a press release
reporting its 1997 second quarter results of operations. The press release is
attached hereto as Exhibit 10.1 and supplemental financial data submitted to
stock analysts is attached 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 July 17, 1997.
10.2 Supplemental Financial Data submitted to
stock analysts dated July 17, 1997.
2
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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: July 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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(LADD FURNITURE, INC. LOGO) NEWS RELEASE
One Plaza Center Box HP3
High Point, NC 27261-1500 FOR IMMEDIATE RELEASE
July 17, 1997
Contact: John J. Ong
(910) 888-6353
E-mail: [email protected]
LADD'S SECOND QUARTER EARNINGS INCREASE 42%
HIGH POINT, NC -- LADD Furniture, Inc. today reported second quarter
net earnings of $1.7 million, an increase of 42 percent over the year-earlier
quarter's $1.2 million. On a per share basis, second quarter net earnings rose
40 percent, to $0.21 this year from $0.15 in fiscal 1996. For the first six
months, net earnings totaled $2.2 million or $0.28 per share this year, which
compares with a net loss of $5.8 million or $0.76 per share in the same period
of fiscal 1996.
Net sales increased 2 percent for the second quarter, to $125.6
million, and declined by 4 percent for the first six months, to $248.9 million.
However, the 1996 sales include shipments made by former LADD companies which
were subsequently divested and, on an "ongoing company" basis, 1997 net sales
increased by 6 percent for the second quarter and by 2 percent for the first
six months, as compared against the same periods of fiscal 1996.
Commenting on these results, LADD president and CEO Fred L. Schuermann,
Jr. said that business conditions remained subdued in the residential furniture
industry during the second quarter. Schuermann said, "Furniture retailers
around the country reported generally small same store sales gains or, in some
cases, outright declines for the quarter. Our residential furniture companies
were affected by this industry sluggishness during the second quarter, but our
American of Martinsville contract furniture business enjoyed record sales for
the period." He added, "We are very pleased with the earnings progress we
made during this year's second quarter," pointing out that the 1996 second
quarter earnings included a net pretax gain of approximately $3.9 million,
principally relating to LADD's termination of its retiree health care plan
effective July 1, 1996. "In other words," Schuermann said, "the fundamental
second quarter earnings improvement compared to a year earlier was in excess of
$5.5 million before taxes."
Commenting on the outlook for the remainder of 1997, Schuermann said,
"Our order backlog increased by 11 percent during the second quarter, primarily
representing follow-through orders from the outstanding April furniture market
our residential casegoods and upholstery companies enjoyed this year in
High Point. This favorable backlog position should have a positive impact on
our overall 1997 second half results."
- over -
The LADD family of fine furniture companies
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Lea Industries * American Drew * Clayton Marcus
Barclay * American of Martinsville * Pennsylvania House * Pilliod
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Executive vice president and chief financial officer William S.
Creekmuir reported that LADD's total debt declined to $127.9 million at
June 28, 1997 from $129.4 million three months earlier. "This continued the
company's recent quarterly debt reduction trend," Creekmuir said, adding,
"paying down debt and reducing LADD's financial leverage remains one of
management's highest priorities, along with continuing to improve the
company's gross profit margin." Creekmuir added that the gross margin rose
to 19.3% in the second quarter of 1997 from 17.8% in the first quarter.
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 to 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 the company's new product introductions, 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
June 29, 1996 June 28, 1997
Net sales (1) $ 123,483,000 125,572,000
Earnings before interest
and income taxes 4,115,000 5,424,000
Interest expense 3,058,000 2,719,000
Earnings before income taxes 1,057,000 2,705,000
Income tax expense (benefit) (108,000) 1,055,000
Net earnings $ 1,165,000 1,650,000
Net earnings per common share $ 0.15 0.21
Weighted average number of
common shares outstanding 7,722,837 7,737,217
26 Weeks Ended
June 29, 1996 June 28, 1997
Net sales (1) $ 258,743,000 248,940,000
Earnings (loss) before interest
and income taxes (4,884,000) 9,282,000
Interest expense 5,718,000 5,724,000
Earnings (loss) before income taxes (10,602,000) 3,558,000
Income tax expense (benefit) (4,772,000) 1,388,000
Net earnings (loss) $ (5,830,000) 2,170,000
Net earnings (loss) per common share $ (0.76) 0.28
Weighted average number of
common shares outstanding 7,723,803 7,728,392
The 1996 six-month results reflect the company's sale of its Fournier Furniture
business effective February 26, 1996. The 1996 second quarter and six-month
results include the company's Daystrom business, which was liquidated during the
second half of 1996.
(1) Net sales by business group Second Quarter First Six Months
were as follows (000's): 1996 1997 1996 1997
Casegoods $ 67,403 67,622 139,746 136,172
Upholstery 30,611 29,141 65,380 60,714
Contract 20,782 28,809 38,328 52,054
Divestiture companies 4,687 -- 15,289 --
Total 123,483 125,572 258,743 248,940
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LADD FURNITURE, INC. AND SUBSIDIARIES - Supplemental Financial Data
July 17, 1997 CONTACT: John J. Ong, CFA (910) 888-6353
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
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<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
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 135,260 123,483 120,447 118,267 123,368 125,572
Cost of sales 116,038 100,220 99,369 95,955 101,437 101,393
Gross profit 19,222 23,263 21,078 22,312 21,931 24,179
Selling, general and administrative expenses 21,788 19,110 16,852 16,613 17,552 18,561
Restructuring expense 5,149 (279) (892) (547) -- --
Operating income (loss) (7,715) 4,432 5,118 6,246 4,379 5,618
Other deductions:
Interest expense 2,660 3,058 3,182 3,169 3,005 2,719
Other deductions (income), net 1,284 317 (1,343) 141 521 194
3,944 3,375 1,839 3,310 3,526 2,913
Earnings (loss) before income taxes (11,659) 1,057 3,279 2,936 853 2,705
Income tax expense (benefit) (4,664) (108) 1,477 1,343 333 1,055
Net earnings (loss) $ (6,995) 1,165 1,802 1,593 520 1,650
Net earnings (loss) per common share $ (0.91) 0.15 0.23 0.21 0.07 0.21
Weighted average number of common
shares outstanding 7,725 7,723 7,721 7,720 7,720 7,737
</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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<CAPTION>
Dollar amounts in thousands 3/30/96 6/29/96 9/28/96 12/28/96 3/29/97 6/28/97
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash $ 1,049 430 1,713 469 151 191
Trade accounts receivable, net 77,579 72,429 75,736 66,730 72,786 71,016
Inventories 92,707 95,715 87,749 85,920 89,260 97,091
Prepaid expenses and other current assets 19,731 16,647 8,211 5,768 6,831 7,536
Total current assets 191,066 185,221 173,409 158,887 169,028 175,834
Property, plant and equipment, net 82,652 82,633 78,543 74,729 68,580 67,648
Intangible and other assets, net 78,900 79,996 81,088 81,415 80,551 79,668
$352,618 347,850 333,040 315,031 318,159 323,150
Liabilities and Shareholders' Equity Current liabilities:
Current installments of long-term debt $ 3,563 3,511 5,136 5,093 6,676 6,633
Short-term bank borrowings 5,000 -- -- -- -- --
Trade accounts payable 25,984 31,373 27,766 24,358 25,120 26,807
Accrued expenses and other current liabilities 32,620 32,858 29,371 30,696 33,552 30,030
Total current liabilities 67,167 67,742 62,273 60,147 65,348 63,470
Long-term debt, excluding current installments 148,687 149,637 138,234 125,859 122,694 121,231
Deferred and other liabilities 17,549 10,045 10,258 5,125 5,639 12,027
Total liabilities 233,403 227,424 210,765 191,131 193,681 196,728
Total shareholders' equity 119,215 120,426 122,275 123,900 124,478 126,422
$352,618 347,850 333,040 315,031 318,159 323,150
</TABLE>
* 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.
