<PAGE>
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 10, 1998
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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)
4620 Grandover Parkway, P.O. Box 26777,
Greensboro, North Carolina 27417-6777
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (336) 294-5233
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One Plaza Center, Box HP-3. High Point, North Carolina 27261-1500
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(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 10, 1998, the Registrant issued a press release
reporting its 1997 fourth quarter and full year results of operations. The press
release is attached hereto as Exhibit 10.1 and the supplemental financial data
submitted to stock analysts is attached as Exhibit 10.2.
Effective November 24, 1997, the Registrant relocated its
executive offices to 4620 Grandover Parkway, Greensboro, North Carolina, 27407
from One Plaza Center, Box HP-3, High Point, North Carolina, 27261.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Exhibits
10.1 Press Release dated February 10, 1998.
2
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10.2 Supplemental Financial Data submitted to
stock analysts dated February 10, 1998.
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: February 19, 1998 By: /s/William S. Creekmuir
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William S. Creekmuir
Title: Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
NEWS RELEASE
FOR IMMEDIATE RELEASE
LADD February 10, 1998
Furniture, Inc.
Contact: John J. Ong
4620 Grandover Parkway, P.O. Box 26777 (336) 315-4049
Greensboro, NC 27417-6777 E-mail: [email protected]
LADD REPORTS STRONG 1997 FOURTH QUARTER
AND IMPROVED FULL YEAR OPERATING RESULTS
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GREENSBORO, NC--LADD Furniture, Inc. today reported significantly improved
earnings for both the final quarter of fiscal 1997 and the full year, as fourth
quarter net sales rose 24 percent from a year earlier, to $146.6 million, and
full year sales increased 6 percent, to $525.5 million. Excluding former
LADD businesses which were divested during 1996, full year 1997 net sales
increased 9 percent compared to the prior year.
Net earnings for the final three months of 1997 totaled $2.4 million, or
$.31 per share, up from $1.6 million, or $0.21 per share in the year-earlier
quarter--a 51 percent increase in total dollar earnings and a 48 percent
increase on a per share basis. For the full year 1997, net earnings rose to
$6.3 million, or $0.81 per share, compared to a loss of $2.4 million, or
$0.32 per share in the prior year.
LADD president and CEO Fred Schuermann said the fourth quarter sales gain
was helped by an extra week in the 1997 fiscal period, and an almost 50%
sales increase recorded by the company's American of Martinsville Contract
furniture business. "But we also achieved strong growth for the fourth quarter
in our residential furniture sales," Schuermann said. "Even after adjusting for
the extra week in 1997's fiscal fourth quarter, our residential casegoods and
upholstery volumes each increased in the 9-10 percent range compared to the
final three months of 1996. We attribute this accelerated top line growth to a
series of very successful new product introductions throughout LADD last year,
in addition to a somewhat improved industry environment in the final quarter."
He continued, "I am pleased to report that 1997 was LADD's most
profitable year since 1989. This is a tribute to the combined efforts and hard
work last year of our management team and our more than 6,000 employees.
Although progress has been achieved, we still have a long way to go. But I
strongly believe the LADD turnaround is gaining momentum, and that we are on
course to achieve significantly improved operating results in 1998 and beyond.
Our primary focus will continue to be on strengthening and improving our
product line, our marketing efforts, our quality standards and our customer
satisfaction levels. Additionally, we are quite encouraged by the order
improvement that has characterized the U.S. retail furniture business in the
past month or so." Schuermann also noted that, despite the strong shipment
levels of the fourth quarter, LADD's backlog at year-end 1997 was 30 percent
higher than it was at the start of the year.
-over-
The LADD family of fine furniture companies
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Lea Industries o American Drew o Clayton Marcus
Barclay o American of Martinsville o Pennsylvania House o Pilliod
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LADD executive vice president and CFO William S. Creekmuir reported that
the company's total debt at the end of 1997 was $125.4 million, down from $131.0
million at the start of the year and said, "The strengthening of our balance
sheet continues to be a primary management objective for 1998, along with
enhancing our market position within the industry and profitably growing our
existing furniture brands." Creekmuir said total inventories were reduced by
almost $2 million during the final quarter of 1997, "And, importantly," he
concluded, "shareholders' equity increased by $7 million during 1997, to $130.9
million at year-end. This marked the first such yearly increase for the
company's shareowners since fiscal 1994."
Headquartered in Greensboro, 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 assisted-living facilities, retirement homes and governmental
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 a more robust retailing climate and the company's new product
introductions, and the resulting contribution to improved operating results, in
addition to those factors set forth in the company's required filings with the
U.S. Securities and Exchange Commission.
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
company's website at @www.laddfurniture.com ("company news").
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LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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13 Weeks Ended 14 Weeks Ended
Dec. 28, 1996 Jan. 3, 1998
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Net sales* $118,267,000 146,625,000
Earnings before interest
and income taxes 6,105,000 6,592,000
Interest expense 3,169,000 2,817,000
Earnings before income taxes 2,936,000 3,775,000
Income tax expense 1,343,000 1,371,000
Net earnings $1,593,000 2,404,000
Net earnings per common share $ 0.21 0.31
Net earnings per common share
--diluted $ 0.20 0.31
Weighted average number of
common shares outstanding 7,719,567 7,760,329
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52 Weeks Ended 53 Weeks Ended
Dec. 28, 1996 Jan. 3, 1998
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Net sales* $497,457,000 525,500,000
Earnings before interest
and income taxes 7,682,000 21,423,000
Interest expense 12,069,000 11,242,000
Earnings (loss) before income taxes (4,387,000) 10,181,000
Income tax expense (benefit) (1,952,000) 3,869,000
Net earnings (loss) $(2,435,000) 6,312,000
Net earnings (loss) per
common share $ (0.32) 0.81
Net earnings (loss) per common
share--diluted $ (0.32) 0.81
Weighted average number of
common shares outstanding 7,722,085 7,743,986
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Fourth Quarter Full Year
1996 1997 1996 1997
*Net sales by business group
were as follows (000's):
Casegoods $ 66,161 78,094 277,356 286,334
Upholstery 28,911 33,960 124,340 122,691
Contract 23,195 34,571 80,215 116,475
Divestiture companies -- -- 15,546 --
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Total $118,267 146,625 497,457 525,500
======== ======= ======= =======
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NOTES: Results for the quarter ended December 28, 1996 included a $547 thousand
pretax restructuring credit and a $738 thousand pretax benefit resulting from
the termination of the company's defined employee benefit plans. In addition,
the 1996 fourth quarter and year-to-date results have been restated to reflect
the change in inventory accounting from the LIFO method to the FIFO method of
one of the company's business units.
Results for the year ended December 28, 1996 included the following pretax
items: a $3.4 million restructuring charge; a $738 thousand benefit 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 of the company's
divested businesses.
LADD FURNITURE, INC. AND SUBSIDIARIES--SUPPLEMENTAL FINANCIAL DATA
February 10, 1998 CONTACT: John J. Ong, CFA (336) 315-4049
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Quarters Years
Ended Ended
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IN THOUSANDS, EXCEPT PER SHARE DATA 12/28/96 1/3/98 12/28/96 1/3/98
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<S> <C> <C> <C> <C>
Net sales $118,267 146,625 $497,457 525,500
Cost of sales 95,955 119,429 411,582 429,050
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Gross profit 22,312 27,196 85,875 96,450
Selling, general and administrative expenses 16,613 20,328 74,363 74,235
Restructuring expense (547) -- 3,431 --
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Operating income 6,246 6,868 8,081 22,215
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Other deductions:
Interest expense 3,169 2,817 12,069 11,242
Other, net 141 276 399 792
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3,310 3,093 12,468 12,034
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Earnings (loss) before income taxes 2,936 3,775 (4,387) 10,181
Income tax expense (benefit) 1,343 1,371 (1,952) 3,869
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Net earnings (loss) $ 1,593 2,404 $ (2,435) 6,312
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Net earnings (loss) per common share $ 0.21 0.31 $ (0.32) 0.81
Net earnings (loss) per common share - diluted $ 0.20 0.31 $ (0.32) 0.81
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Weighted average number of common
shares outstanding 7,720 7,760 7,722 7,744
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</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS 12/28/96 9/27/97 1/3/98
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<S> <C> <C> <C>
ASSETS
Current assets:
Cash $ 469 659 75
Trade accounts receivable, net 66,730 83,865 83,297
Inventories, net 85,920 94,819 93,189
Prepaid expenses and other current assets 5,768 6,923 8,016
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Total current assets 158,887 186,266 184,577
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Property, plant and equipment, net 74,729 66,708 67,530
Intangible and other assets, net 81,415 77,796 77,083
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$ 315,031 330,770 329,190
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 5,093 4,965 6,807
Trade accounts payable 24,358 27,080 29,488
Accrued expenses and other current liabilities 30,696 36,203 31,952
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Total current liabilities 60,147 68,248 68,247
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Long-term debt, excluding current installments 125,859 123,565 118,586
Deferred and other liabilities 5,125 10,481 11,432
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Total liabilities 191,131 202,294 198,265
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Total shareholders' equity 123,900 128,476 130,925
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$ 315,031 330,770 329,190
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</TABLE>
NOTES: Results for the quarter ended December 28, 1996 included a $547 thousand
pretax restructuring credit and a $738 thousand pretax benefit resulting from
the termination of the company's defined employee benefit plans. In addition,
the 1996 fourth quarter and year-to-date results have been restated to reflect
the change in inventory accounting from the LIFO method to the FIFO method of
one of the company's business units.
Results for the year ended December 28, 1996 included the following pretax
items: a $3.4 million restructuring charge; a $738 thousand benefit 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 of the company's
divested businesses.
