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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 4, 1999
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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)
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4620 Grandover Parkway, P.O. Box 26777, Greensboro, North Carolina 27417-6777
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(Address of principal executive offices) (Zip Code)
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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 February 4, 1999, the Registrant issued a press release reporting
its 1998 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.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Exhibits
10.1 Press Release dated February 4, 1999.
10.2 Supplemental Financial Data submitted to stock analysts dated
February 4, 1999.
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: February 5, 1999 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
NEWS RELEASE
FOR IMMEDIATE RELEASE
[LADD FURNITURE, INC. LOGO] February 4, 1999
Contact John: J. Ong
4620 Grandover Parkway - Box 2677 (336) 315-4049
Greensboro, NC 27417-6777 e-mail: [email protected]
LADD REPORTS 54 PERCENT GAIN IN FOURTH QUARTER EARNINGS
GREENSBORO, NC - LADD Furniture, Inc. reported today that its net
earnings for the fourth quarter of fiscal 1998 rose 54 percent, to $3.7 million,
from $2.4 million in the final quarter of fiscal 1997. Fourth quarter net
earnings per share (fully diluted) rose 52 percent, to $0.47 in 1998, from $0.31
per share in 1997's fourth quarter. For the full year 1998, net earnings
increased 94 percent, to $12.3 million, from the prior year's $6.3 million.
Earnings per share (fully diluted) rose 89 percent in fiscal 1998, to $1.53,
from the prior year's $0.81.
Total net sales for fiscal 1998 rose 9 percent. However, fiscal 1998
contained the normal 52 weeks, whereas the prior fiscal year contained 53 weeks
- - a peculiarity of LADD's fiscal calendar year which occurs once every five or
six years. Adjusting for this weekly differential, the 1998 sales gain was 11
percent. Total residential furniture sales for the year increased 8 percent,
adjusted for the weekly differential, while contract furniture sales rose 19
percent on the same basis.
LADD chairman, president and CEO Fred L. Schuermann, Jr. said the
company's gross profit margin for the year rose to 19.3% from fiscal 1997's
18.4%, and the operating margin increased to 5.2% of net sales, from 4.2% the
year before. Total debt was reduced by a little over $14 million, or 11 percent,
during the year, and interest expense declined 17 percent
Schuermann said, "I am pleased with the financial progress LADD
achieved last year. Our 1998 operating margin was the best since 1989. Earnings
before interest, taxes, depreciation and amortization ("EBITDA") increased 22
percent last year, to $43.4 million. This represented 7.6% of net sales which,
although still below our objective of 10%, was LADD's highest EBITDA return
since 1990. The 1998 net earnings to sales ratio was its highest of any year in
the 1990's, and total debt outstanding at year-end 1998 reached its lowest
dollar level in five years."
-more-
[Letterhead]
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Schuermann continued, "The LADD management team believes that these
encouraging signs of the company's recent financial progress provide conclusive
proof that are on the right track. We also believe that considerable room
remains for further improvement in all these financial measures from current
levels." Commenting on the outlook for the furniture industry in 1999,
Schuermann said, "Most forecasters are expecting 1999 to show a moderating trend
for our industry, as compared to the very strong growth experienced in 1998. But
we would not be at all surprised to see the industry enjoy a better than
currently expected year in 1999, in view of all the positive external forces
presently influencing American homeowners and consumers. We are extremely
excited with LADD's outlook for the coming year, in terms of continued sales
growth and further profitability improvement."
Headquartered in Greensboro, NC, LADD is one of the largest
residential furniture manufacturers in North America. The company markets its
wide range of 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, doing business as American of Martinsville, is also one of
the world's leading suppliers of guest room furniture to the hospitality
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 Market under the symbol LADF and
information on the company can be found on the Internet at
www.laddfurniture.com.
# # # # # # #
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 the company's ability to
continue its sales growth and further improve its profitability, in addition to
those factors set forth in the company's required filings with the U.S.
Securities and Exchange Commission.
TABLE FOLLOWS
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EXHIBIT 10.1
LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
<TABLE>
<CAPTION>
13 Wks. Ended 14 Wks. Ended
Jan. 2, 1999 Jan. 3, 1998
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<S> <C> <C>
Net sales(1) $145,253,000 146,625,000
Earnings before interest
and income taxes 8,211,000 6,592,000
Interest expense 2,123,000 2,817,000
Earnings before income taxes 6,088,000 3,775,000
Income tax expense 2,377,000 1,371,000
Net earnings $ 3,711,000 2,404,000
Net earnings per common share - basic $ 0.47 0.31
Net earnings per common share - diluted 0.47 0.31
Weighted average number of
common shares outstanding - diluted 7,922,300 7,872,100
</TABLE>
<TABLE>
<CAPTION>
52 Wks. Ended 53 Wks. Ended
Jan. 2, 1999 Jan. 3, 1998
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<S> <C> <C>
Net sales(1) $571,063,000 525,500,000
Earnings before interest
and income taxes 29,394,000 21,423,000
Interest expense 9,298,000 11,242,000
Earnings before income taxes 20,096,000 10,181,000
Income tax expense 7,837,000 3,869,000
Net earnings $ 12,259,000 6,312,000
Net earnings per common share - basic $ 1.57 0.81
Net earnings per common share - diluted 1.53 0.81
Weighted average number of
common shares outstanding - diluted 8,017,304 7,838,747
</TABLE>
<TABLE>
<CAPTION>
(1) Net sales by segment 13 Wks. 14 Wks. 52 Wks. 53 Wks.
were as follows (000's): 1/2/99 1/3/98 1/2/99 1/3/98
------ ------ ------ ------
<S> <C> <C> <C> <C>
Residential $105,370 112,054 435,366 409,025
Contract 39,883 34,571 135,697 116,475
-------- ------- ------- -------
Total $145,253 146,625 571,063 525,500
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</TABLE>
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EXHIBIT 10.2
LADD FURNITURE, INC. AND SUBSIDIARIES - Supplemental Financial Data
February 4, 1999 CONTACT: John J. Ong, CFA (336) 315-4049
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
<TABLE>
<CAPTION>
13 Wks. Ended 14 Wks. Ended 52 Wks. Ended 53 Wks. Ended
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In thousands, except per share data 1/2/99 1/3/98 1/2/99 1/3/98
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<S> <C> <C> <C> <C>
Net sales $145,253 146,625 $571,063 525,500
Cost of sales 116,713 119,429 460,779 429,050
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Gross profit 28,540 27,196 110,284 96,450
Selling, general and administrative expenses 20,286 20,328 80,515 74,235
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Operating income 8,254 6,868 29,769 22,215
Other deductions:
Interest expense 2,123 2,817 9,298 11,242
Other, net 43 276 375 792
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2,166 3,093 9,673 12,034
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Earnings before income taxes 6,088 3,775 20,096 10,181
Income tax expense 2,377 1,371 7,837 3,869
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Net earnings $ 3,711 2,404 $ 12,259 6,312
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Net earnings per common share - basic $ 0.47 0.31 $ 1.57 0.81
Net earnings per common share - diluted 0.47 0.31 1.53 0.81
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Weighted average number of common
shares outstanding - diluted 7,922 7,872 8,017 7,839
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</TABLE>
CONDENSED CONSOLIDATED BALANCE SHEETS (PRELIMINARY AND UNAUDITED)
<TABLE>
<CAPTION>
Dollar amounts in thousands 1/2/99 10/3/98 1/3/98
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<S> <C> <C> <C>
Assets
Current assets:
Cash $ 110 156 75
Trade accounts receivable, net 90,286 94,861 83,297
Inventories, net 98,798 103,353 93,189
Prepaid expenses and other current assets 8,771 7,124 8,016
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Total current assets 197,965 205,494 184,577
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Property, plant and equipment, net 66,297 66,189 67,530
Intangible and other assets, net 72,703 73,836 77,083
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$336,965 345,519 329,190
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Liabilities and Shareholders' Equity
Current liabilities:
Current installments of long-term debt $ 6,590 6,590 6,807
Trade accounts payable 31,296 36,982 29,488
Accrued expenses and other current liabilities 37,384 38,617 31,952
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Total current liabilities 75,270 82,189 68,247
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Long-term debt, excluding current installments 104,585 109,540 118,586
Deferred and other liabilities 12,589 13,067 11,432
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Total liabilities 192,444 204,796 198,265
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Total shareholders' equity 144,521 140,723 130,925
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$336,965 345,519 329,190
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</TABLE>
