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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) October 13, 1999
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LADD FURNITURE, INC.
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(Exact name of registrant as specified in its charter)
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North Carolina 0-11577 56-1311320
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<S> <C> <C>
(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 October 13, 1999, the Registrant issued a press release reporting
its 1999 third quarter results of operations. The press release is attached
hereto as Exhibit 99.1 and the supplemental financial data submitted to stock
analysts is attached as Exhibit 99.2.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Exhibits
99.1 Press Release dated October 13, 1999.
99.2 Supplemental Financial Data submitted to stock analysts
dated October 13, 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: October 14, 1999 By: /s/ William S. Creekmuir
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William S. Creekmuir
Title: Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
4
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EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
October 13, 1999
[LADD LOGO]
Contact: John J. Ong
4620 Grandover Parkway * Box 26777 (336) 315-4059
Greensboro, NC 27417-6777 e-mail: [email protected]
LADD FURNITURE'S THIRD QUARTER EARNINGS RISE 35 PERCENT
GREENSBORO, NC. - LADD Furniture, Inc. reported today that its net income
for the third quarter of fiscal 1999 rose 35 percent, to $4.5 million, or $0.56
per share on a diluted basis, from $3.3 million, or $0.41 per diluted share, in
the same period of fiscal 1998. Third quarter net sales rose 5 percent, to
$150.7 million, from $142.9 million a year earlier, consisting of a 4 percent
gain in residential furniture sales and a 12 percent increase in contract
("commercial") furniture sales.
For the first nine months, net earnings rose 45 percent, to $12.4 million,
or $1.55 per diluted share, from $8.5 million, or $1.06 per diluted share, in
the same period of fiscal 1998. Net sales for the first nine months of 1999 rose
8 percent compared to the same period of 1998, with residential volume up 6
percent and contract sales rising 17 percent.
LADD chairman, president and CEO Fred L. Schuermann, Jr. said he was very
pleased to report another strong quarter for LADD. "Our net earnings in this
year's third quarter earnings reached their highest level since the second
quarter of 1989," he said, "continuing the strong quarter-over-quarter
improvement we have achieved during the last three-plus years." He continued,
"Although our factories suffered little physical damage from the two major
hurricanes which battered the eastern United States during the latter part of
the third quarter, shipments for the quarter were definitely reduced by flooded
roadways, as well as by weather-related downtime at several of our plants."
Commenting on the overall tone of business, Schuermann said, "The
residential furniture industry is continuing to benefit from a strong U.S.
economy and robust consumer demand for a wide variety of goods and services,
including home furnishings. Although July was a slow month, order rates picked
up significantly later in the period. As a result, we ended the third quarter
with a 9 percent jump in residential furniture orders compared to the same
period of 1998, and our residential furniture backlog increased 7 percent during
the quarter." He added, "We are looking forward to the
-over-
The LADD family of fine furniture brands
Lea * American Drew * Clayton Marcus * HickoryMark
Barclay * American of Martinsville * Pennsylvania House * Pilliod
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Fall International Home Furnishings Market, which continues through much of
next week in High Point, NC, and believe we have another strong assortment of
new products to offer our retail dealers."
Referring to the recently-announced plan for LADD to be merged into La-Z-Boy
Incorporated on the basis of 1.18 shares of La-Z-Boy common stock for each share
of LADD common stock, Schuermann said, "If LADD's shareholders approve the
transaction and we receive the required regulatory approval, we anticipate that
the combination of our two companies will be completed sometime in late December
of this year or January of next year."
LADD executive vice president and CFO William S. Creekmuir noted that
despite a $2.5 million increase in net working capital during the most recent
quarter and a $9.5 million increase in total assets, LADD's total debt was
basically unchanged from its mid-year 1999 level of $101.7 million. "Moreover,"
he said, "debt reduction thus far in 1999 has been a significant factor in
LADD's earnings improvement for both the third quarter and first nine months of
this year, as interest expense declined by 24 percent for the quarter and 22
percent for the nine months, compared to the respective periods of 1998." He
noted that LADD's total debt ratio (total debt as a percentage of total debt
plus shareholders' equity) was 39.4% at the end of this year's third quarter -
its lowest level since 1992.
Headquartered in Greensboro, NC, LADD is one of the largest residential
furniture manufacturers in North America. The company markets its wide range of
bedroom, dining room, occasional and upholstered furniture domestically under
the major brand names American Drew, Barclay, Clayton Marcus, HickoryMark, 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 government 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.
# # # # # # #
TABLE FOLLOWS
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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 a continuation of robust
consumer demand for home furnishings, and the company's ability to continue its
sales growth, further improve its profitability and reduce its debt, and the
completion of the planned merger into La-Z-Boy Incorporated, in addition to
those factors set forth in the company's required filings with the U.S.
Securities and Exchange Commission.
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LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
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13 Wks. Ended 13 Wks. Ended
Oct. 2, 1999 Oct. 3, 1998
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Net sales (1).......................... $150,651,000 142,896,000
Earnings before interest
and income taxes...................... 8,814,000 7,656,000
Interest expense....................... 1,695,000 2,220,000
Earnings before income taxes (2)....... 7,119,000 5,436,000
Income tax expense..................... 2,634,000 2,117,000
Net earnings........................... $ 4,485,000 3,319,000
Net earnings per common share--basic... $ 0.57 0.42
Net earnings per common share--diluted. 0.56 0.41
Weighted average number of
common shares outstanding--diluted.... 7,999,512 8,033,934
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39 Wks. Ended 39 Wks. Ended
Oct. 2, 1999 Oct, 3, 1998
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Net sales (1).......................... $ 460,810,000 425,810,000
Earnings before interest
and income taxes...................... 25,250,000 21,183,000
Interest expense....................... 5,570,000 7,175,000
Earnings before income taxes (2)....... 19,680,000 14,008,000
Income tax expense..................... 7,282,000 5,460,000
Net earnings........................... $ 12,398,000 8,548,000
Net earnings per common share--basic... $ 1.58 1.10
Net earnings per common share--diluted. 1.55 1.06
Weighted average number of
common shares outstanding--diluted.... 7,979,300 8,074,229
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13 Wks. 13 Wks. 39 Wks. 39 Wks.
(1) Net sales by segment (000's): 10/2/99 10/3/98 10/2/99 10/3/98
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Residential.......................................... $115,764 111,831 349,169 329,996
Contract............................................. 34,887 31,065 111,641 95,814
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Total............................................... $150,651 142,896 460,810 425,810
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13 Wks. 13 Wks. 39 Wks. 39 Wks.
(2) Earnings before income taxes by segment (000's): 10/2/99 10/3/98 10/2/99 10/3/98
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Residential.......................................... $4,127 4,267 12,979 10,665
Contract............................................. 3,955 2,609 10,638 7,707
Corporate............................................ (963) (1,440) (3,937) (4,364)
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Total............................................... $7,119 5,436 19,680 14,008
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EXHIBIT 99.2
LADD FURNITURE, INC. AND SUBSIDIARIES -- SUPPLEMENTAL FINANCIAL DATA
OCTOBER 13, 1999 CONTACT: JOHN J. ONG, CFA (336) 315-4049
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
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Quarters Ended
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In thousands, except or share data 10/2/99 7/3/99 4/3/99 1/2/99 10/3/98 7/4/98 4/4/98
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<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $150,651 153,015 157,144 145,253 142,896 135,505 147,409
Cost of sales 120,751 122,043 126,973 116,713 115,160 108,173 120,733
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Gross profit 29,900 30,972 30,171 28,540 27,736 27,332 26,676
Selling, general and administrative expenses 20,973 22,423 22,416 20,286 19,932 19,947 20,350
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Operating income 8,927 8,549 7,755 8,254 7,804 7,385 6,326
Other deductions:
Interest expense 1,695 1,827 2,048 2,123 2,220 2,371 2,584
Other expense (income), net 113 (37) (95) 43 148 310 (126)
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1,808 1,790 1,953 2,166 2,368 2,681 2,458
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Earnings before income taxes 7,119 6,759 5,802 6,088 5,436 4,704 3,868
Income tax expense 2,634 2,443 2,205 2,377 2,117 1,835 1,508
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Net earnings $ 4,485 4,316 3,597 3,711 3,319 2,869 2,360
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Net earnings per common share - basic $ 0.57 0.55 0.46 0.47 0.42 0.37 0.30
Net earnings per common share - diluted $ 0.56 0.54 0.45 0.47 0.41 0.35 0.30
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Weighted average number of common
shares outstanding - basic 7,831 7,830 7,840 7,831 7,831 7,812 7,760
Weighted average number of common
shares outstanding - diluted 8,000 7,981 7,951 7,922 8,034 8,165 7,940
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CONDENSED CONSOLIDATED BALANCE SHEETS (PRELIMINARY AND UNAUDITED)
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Dollar amounts in thousands 10/2/99 7/3/99 4/3/99 1/2/99 10/3/98 7/4/98 4/4/98
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ASSETS
Current assets:
Cash $ 137 196 147 110 156 89 114
Trade accounts receivable 96,113 90,361 99,008 90,286 94,861 85,253 91,709
Inventories 106,400 105,789 103,699 98,798 103,353 102,129 95,101
Prepaid expenses and other current assets 9,609 8,999 8,168 8,771 7,124 9,514 8,646
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Total current assets 212,259 205,345 211,022 197,965 205,494 196,985 195,570
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Property, plant and equipment 66,828 64,917 65,408 66,297 66,189 66,406 66,255
Intangible and other assets 71,231 70,568 70,907 72,703 73,836 74,431 76,333
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$350,318 340,830 347,337 336,965 345,519 337,822 338,158
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 6,590 6,590 6,590 6,590 6,590 6,590 11,476
Trade accounts payable 36,202 32,487 36,339 31,296 36,982 36,317 37,217
Accrued expenses and other current liabilities 42,679 41,999 41,710 37,384 38,617 35,252 33,925
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Total current liabilities 85,471 81,076 84,639 75,270 82,189 78,159 82,618
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Long-term debt, excluding current installments 95,365 95,110 102,420 104,585 109,540 109,629 109,390
Deferred and other liabilities 12,521 12,294 12,107 12,589 13,067 12,657 12,826
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Total liabilities 193,357 188,480 199,166 192,444 204,796 200,445 204,834
-------- ------- ------- ------- ------- ------- -------
Total shareholders' equity 156,961 152,350 148,171 144,521 140,723 137,377 133,324
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$350,318 340,830 347,337 336,965 345,519 337,822 338,158
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