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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 20, 1998
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LADD FURNITURE, INC.
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(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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(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 20, 1998, the Registrant issued a press release reporting its
1998 second quarter 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.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Exhibits
10.1 Press Release dated July 20, 1998
10.2 Supplemental Financial Data submitted to stock analysts
dated July 20, 1998.
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 21, 1998 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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EXHIBIT 10.1
[LADD LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
JULY 20, 1998
CONTACT: JOHN J. ONG
(336) 315-4049
E-MAIL: [email protected]
LADD SECOND QUARTER EARNINGS UP 74%
SIX-MONTH PROFITS JUMP 141%
GREENSBORO, NC -- LADD Furniture, Inc. today reported that its net
earnings for the second quarter of fiscal 1998 jumped 74 percent from the
year-earlier quarter, on a sales increase of 8 percent. For the fiscal second
quarter ended July 4, 1998, LADD earned $2.9 million, or $0.35 per share
(diluted), as compared to $1.7 million, or $0.21 per share (diluted) in last
year's second quarter. Net sales for the second quarter totaled $135.5
million, as compared to $125.6 million for last year's comparable period. For
the first six months, net sales rose 14%, to $282.9 million this year, from
$248.9 million in 1997. Profits for this year's first six months were sharply
ahead of the comparable 1997 level, as net earnings totaled $5.2 million, or
$0.65 per share (diluted), for the six months ended July 4, 1998 - compared with
$2.2 million, or $0.28 per share (diluted).
LADD chairman and CEO Fred L. Schuermann, Jr. said he was pleased with the
quarter's profit improvement. "We achieved meaningful margin progress in the
second quarter," Schuermann said, "which enabled net earnings to increase
substantially faster than our sales growth during the period." He noted, that
for the second quarter, LADD's total residential casegoods (wood furniture)
sales increased 9 percent from a year earlier, while residential upholstery
sales edged up 2 percent, and contract furniture volume gained 11 percent.
"Our order backlog remains healthy," Schuermann said, "and we are looking
forward to third quarter shipments of the exciting new products we introduced
at the April home furnishings market."
He concluded, "Although we are pleased with the 14% sales growth achieved
in the first half of 1998, incoming order rates in the second quarter were
below what we had expected at the beginning of the period, and were roughly
flat compared to a year earlier. However, we expect our industry to continue
growing over the remainder of 1998 and into 1999, and we feel strongly that LADD
is well-positioned to participate fully in this trend. Our primary operating
objectives for the company continue to be profitability improvement, debt
reduction, and solidly-grounded sales growth for our existing furniture brands."
-more-
[LADD LETTERHEAD]
<PAGE> 2
Executive vice president and chief financial officer William S. Creekmuir
reported that total debt at mid-year stood at $116.2 million and represented a
leverage ratio (total debt as a percentage of total debt plus shareholders'
equity) of 45.8%. Creekmuir noted that this was a decline of $9.2 million from
the debt level at the beginning of fiscal 1998, and a decline of $4.6 million
from the prior quarter. "We are continuing the trend of debt reduction which
began early in 1996 while simultaneously increasing shareholders' equity,"
Creekmuir said, "and, as a result, we are moving steadily toward our overall
leverage objectives." He added that, due to a combination of lower
indebtedness and reduced interest rates, LADD's interest expense declined
$348,000 or 13 percent in this year's second quarter compared to a year
earlier, and was down $769,000, also a 13 percent reduction, through the first
six months of fiscal 1998.
Headquartered in Greensboro, NC, LADD is one of the largest North American
residential furniture manufacturers. 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 products worldwide through LADD International.
LADD's contract sales group, manufactured under the American Martinsville
name, is also one of the world's leading suppliers of guest room furniture to
the hotel industry, as well as to assisted-living (retirement) facilities and
governmental 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 and information on the company can be found on the Internet at
www.laddfurniture.com.
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 which 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 industry growth and the company's new product introductions, 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 free of charge, just
dial 800-758-5804, extension 501325. These releases are also available via the
company's Internet site at www.laddfurniture.com ("company news").
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LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
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<TABLE>
<CAPTION>
13 Weeks Ended
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June 28, 1997 July 4, 1998
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<S> <C> <C>
Net sales (1) $ 125,572,000 135,505,000
Earnings before interest and income taxes 5,424,000 7,075,000
Interest expense 2,719,000 2,371,000
Earnings before interest and income taxes 2,705,000 4,704,000
Income tax expense 1,055,000 1,835,000
Net earnings $ 1,650,000 2,869,000
Net earnings per common share - basic $ 0.21 0.37
Net earnings per common share - diluted $ 0.21 0.35
Weighted average number of
common shares outstanding 7,737,217 7,812,039
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</TABLE>
<TABLE>
<CAPTION>
26 Weeks Ended
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June 28, 1997 July 4, 1998
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<S> <C> <C>
Net sales (1) $ 248,940,000 282,914,000
Earnings before interest and income taxes 9,282,000 13,527,000
Interest expense 5,724,000 4,955,000
Earnings before interest and income taxes 3,558,000 8,572,000
Income tax expense 1,388,000 3,343,000
Net earnings $ 2,170,000 5,229,000
Net earnings per common share - basic $ 0.28 0.67
Net earnings per common share - diluted $ 0.28 0.65
Weighted average number of
common shares outstanding 7,728,392 7,785,997
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</TABLE>
<TABLE>
<CAPTION>
(1) Net sales by business group Second Quarter First Six Months
were as follows (000's): 1997 1998 1997 1998
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<S> <C> <C> <C> <C>
Residential Casegoods $ 67,622 73,678 136,172 154,260
Residential Upholstery 29,141 29,782 60,714 63,905
Contract Sales 28,809 32,045 52,054 64,749
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Total $125,572 135,505 248,940 282,914
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</TABLE>
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EXHIBIT 10.2
LADD FURNITURE, INC. AND SUBSIDIARIES - SUPPLEMENTAL FINANCIAL DATA
JULY 20, 1998 CONTACT: JOHN J. ONG, CFA (336) 315-4049
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
<TABLE>
<CAPTION>
QUARTERS ENDED
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In thousands, except per share data 3/29/97 6/28/97 9/27/97 1/3/98 4/4/98 7/4/98
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<S> <C> <C> <C> <C> <C> <C>
Net sales $123,368 125,572 129,935 146,625 147,409 135,505
Cost of sales 101,437 101,393 106,791 119,429 120,733 108,173
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Gross Profit 21,931 24,179 23,144 27,196 26,676 27,332
Selling, general and administrative expenses 17,552 18,561 17,794 20,328 20,350 19,947
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Operating income 4,379 5,618 5,350 6,868 6,326 7,385
Other deductions:
Interest expense 3,005 2,719 2,701 2,817 2,584 2,371
Other expense (income), net 521 194 (199) 276 (126) 310
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3,526 2,913 2,502 3,093 2,458 2,681
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Earnings before income taxes 853 2,705 2,848 3,775 3,868 4,704
Income tax expense 333 1,055 1,110 1,371 1,508 1,835
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Net earnings $ 520 1,650 1,738 2,404 2,360 2,869
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Net earnings per common share-basic $ 0.07 0.21 0.22 0.31 0.30 0.37
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Net earnings per common share-diluted $ 0.07 0.21 0.22 0.31 0.30 0.35
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Weighted average number of common
shares outstanding 7,720 7,737 7,758 7,760 7,760 7,812
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</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
Dollar amounts in thousands 3/29/97 6/28/97 9/27/97 1/3/98 4/4/98 7/4/98
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<S> <C> <C> <C> <C> <C> <C>
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ASSETS
Current assets:
Cash $ 151 191 659 75 114 89
Trade accounts receivable 72,786 71,016 83,865 83,297 91,709 85,253
Inventories 89,260 97,091 94,819 93,189 95,101 102,129
Prepaid expenses and other current assets 6,831 7,536 6,923 8,016 8,646 9,514
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Total current assets 169,028 175,834 186,266 184,577 195,570 196,985
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Property, plant and equipment 68,580 67,648 66,708 67,530 66,255 66,406
Intangible and other assets 80,551 79,668 77,796 77,083 76,333 74,431
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$318,159 323,150 330,770 329,190 338,158 337,822
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 6,676 6,633 4,965 6,807 11,476 6,590
Trade accounts payable 25,120 26,807 27,080 29,488 37,217 36,317
Accrued expenses and other current liabilities 33,552 30,030 36,203 31,952 33,925 35,252
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Total current liabilities 65,348 63,470 68,248 68,247 82,618 78,159
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Long-term debt, excluding current installments 122,694 121,231 123,565 118,586 109,390 109,629
Deferred and other liabilities 5,639 12,027 10,481 11,432 12,826 12,657
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Total liabilities 193,681 196,728 202,294 198,265 204,834 200,445
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Total shareholders' equity 124,478 126,422 128,476 130,925 133,324 137,377
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$318,159 323,150 330,770 329,190 338,158 337,822
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</TABLE>
