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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 14, 1999
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LADD FURNITURE, INC.
(Exact name of registrant as specified in its charter)
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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 July 14, 1999, the Registrant issued a press release reporting its
1999 second 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 July 14, 1999.
99.2 Supplemental Financial Data submitted to stock
analysts dated July 14, 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: July 15, 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 99.1
LADD FURNITURE, INC.
4620 Grandover Parkway - Box 26777
Greensboro, NC 27417-6777
NEWS RELEASE
FOR IMMEDIATE RELEASE
July 14, 1999
Contact: John J. Ong
(336) 315-4049
e-mail: [email protected]
LADD'S QUARTERLY EARNINGS HIGHEST IN TEN YEARS
GREENSBORO, NC -- LADD Furniture, Inc. reported today that its diluted net
earnings per share for the second quarter of fiscal 1999 surged 54 percent, to
$0.54 per share, from $0.35 per share in the same period 1998. Net income for
the second quarter rose 50 percent, to $4.3 million, from 1998's $2.9 million,
while total second quarter net sales rose 13 percent, to $153.0 million, from
$135.5 million in 1998. LADD's residential furniture sales for the second
quarter increased 10 percent on a year-over-year basis and contract furniture
sales rose 21 percent.
For the first six months, net earnings also rose more than 50 percent,
both in absolute dollars and on a per share basis, as net income for the first
half of 1999 jumped to $7.9 million, or $0.99 per diluted share, from $5.2
million, or $0.65 per diluted share, in the year-earlier period. First half net
sales increased 10 percent, with residential volume up 7 percent and contract
sales rising 19 percent.
Chairman, president and CEO Fred L. Schuermann, Jr. said he was very
pleased to note that LADD's net earnings in the most recent quarter reached
their highest dollar level since the second quarter of 1989. "This represents
another milestone on the road back to the position of industry prominence LADD
enjoyed in the 1980's. As gratifying as the profit improvement was,'' he added,
"I am equally pleased with the strong top line sales growth our various
furniture brands achieved in the latest quarter. In the 13 years I've been
associated with LADD, I can honestly say I have never seen a more exciting
assortment of products than we have right now. This is a tremendous tribute to
the outstanding team of sales, marketing and manufacturing executives we
currently have in place throughout the company.''
Commenting on the overall tone of business, Schuermann said, "The
excellent housing and economic environment of the past three years is finally
beginning to show up in retail sales of furniture, and our industry is
currently in the midst of one of its better historical growth periods. I fully
expect to see these positive trends extend well into next year.''
-over-
The LADD family of fine furniture companies
Lea Industries - American Drew - Clayton Marcus
Barclay - American of Martinsville - Pennsylvania House - Pilliod
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LADD executive vice president and CFO William S. Creekmuir noted that the
first half gross margin improved to 19.7% this year from 19.1% in 1998, and said
the company also made further progress during the first six months in improving
its balance sheet and financial position. "Total debt has been reduced by $9.5
million since the end of 1998, to $101.7 million at mid-year 1999, despite our
open market repurchase of 27,000 shares of LADD stock - 17,000 shares in the
first quarter and 10,000 shares in the second quarter. The debt reduction,
coupled with continuing growth in LADD's shareholders' equity, produced a total
debt ratio at July 3, 1999 of 40.0%. This leverage ratio is heading down
steadily toward management's 30% goal." He concluded, "In short, LADD's
financial strength has improved remarkably since 1995."
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
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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 the company's ability to
continue its sales growth, further improve its profitability and reduce its
debt, 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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LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
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13 Wks. Ended 13 Wks. Ended
July 3, 1999 July 4, 1998
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Net sales (1) $ 153,015,000 $ 135,505,000
Earnings before interest and income taxes 8,586,000 7,075,000
Interest expense 1,827,000 2,371,000
Earnings before income taxes (2) 6,759,000 4,704,000
Income tax expense 2,443,000 1,835,000
Net earnings $ 4,316,000 2,869,000
Net earnings per common share - basic $ 0.55 0.37
Net earnings per common share - diluted 0.54 0.35
Weighted average number of
common shares outstanding - diluted 7,981,300 8,165,428
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26 Wks. Ended 26 Wks. Ended
July 3, 1999 July 4, 1998
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Net sales (1) $ 310,159,000 282,914,000
Earnings before interest and income taxes 16,436,000 13,527,000
Interest expense 3,875,000 4,955,000
Earnings before income taxes (2) 12,561,000 8,572,000
Income tax expense 4,648,000 3,343,000
Net earnings $ 7,913,000 5,229,000
Net earnings per common share - basic $ 1.01 0.67
Net earnings per common share - diluted 0.99 0.65
Weighted average number of
common shares outstanding - diluted 7,968,162 8,056,010
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13 Wks. 13 Wks. 26 Wks. 26 Wks.
(1) Net sales by segment (000's): 7/3/99 7/4/98 7/3/99 7/4/98
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Residential $114,202 103,460 233,405 218,165
Contract 38,813 32,045 76,754 64,749
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Total $153,015 135,505 310,159 282,914
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13 Wks. 13 Wks. 26 Wks. 26 Wks.
(2) Earnings before income taxes by segment (000's): 7/3/99 7/4/98 7/3/99 7/4/98
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Residential $ 4,368 3,016 8,852 6,398
Contract 4,000 3,037 6,683 5,098
Corporate (1,609) (1,349) (2,974) (2,924)
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Total $ 6,759 4,704 12,561 8,572
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Exhibit 99.2
LADD FURNITURE, INC. AND SUBSIDIARIES - SUPPLEMENTAL FINANCIAL DATA
July 14, 1999 CONTACT: John J. Ong, CFA (336) 315-4049
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (PRELIMINARY AND UNAUDITED)
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Quarters Ended
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In thousands, except per share data 7/3/99 4/3/99 1/2/99 10/3/98 7/4/98 4/4/98
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Net sales $153,015 157,144 145,253 142,896 135,505 147,409
Cost of sales 122,043 126,973 116,713 115,160 108,173 120,733
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Gross profit 30,972 30,171 28,540 27,736 27,332 26,676
Selling, general and administrative expenses 22,423 22,416 20,286 19,932 19,947 20,350
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Operating income 8,549 7,755 8,254 7,804 7,385 6,326
Other deductions:
Interest expense 1,827 2,048 2,123 2,220 2,371 2,584
Other expense (income), net (37) (95) 43 148 310 (126)
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1,790 1,953 2,166 2,368 2,681 2,458
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Earnings before income taxes 6,759 5,802 6,088 5,436 4,704 3,868
Income tax expense 2,443 2,205 2,377 2,117 1,835 1,508
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Net earnings $ 4,316 3,597 3,711 3,319 2,869 2,360
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Net earnings per common share - basic $ 0.55 0.46 0.47 0.42 0.37 0.30
Net earnings per common share - diluted $ 0.54 0.45 0.47 0.41 0.35 0.30
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Weighted average number of common
shares outstanding - basic 7,830 7,840 7,831 7,831 7,812 7,760
Weighted average number of common
shares outstanding - diluted 7,981 7,951 7,922 8,034 8,165 7,940
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CONDENSED CONSOLIDATED BALANCE SHEETS (PRELIMINARY AND UNAUDITED)
Dollar amounts in thousands 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 $ 196 147 110 156 89 114
Trade accounts receivable 90,361 99,008 90,286 94,861 85,253 91,709
Inventories 105,789 103,699 98,798 103,353 102,129 95,101
Prepaid expenses and other current assets 8,999 8,168 8,771 7,124 9,514 8,646
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Total current assets 205,345 211,022 197,965 205,494 196,985 195,570
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Property, plant and equipment 64,917 65,408 66,297 66,189 66,406 66,255
Intangible and other assets 70,568 70,907 72,703 73,836 74,431 76,333
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$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 11,476
Trade accounts payable 32,487 36,339 31,296 36,982 36,317 37,217
Accrued expenses and other current
liabilities 41,999 41,710 37,384 38,617 35,252 33,925
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Total current liabilities 81,076 84,639 75,270 82,189 78,159 82,618
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Long-term debt, excluding current
installments 95,110 102,420 104,585 109,540 109,629 109,390
Deferred and other liabilities 12,294 12,107 12,589 13,067 12,657 12,826
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Total liabilities 188,480 199,166 192,444 204,796 200,445 204,834
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Total shareholders' equity 152,350 148,171 144,521 140,723 137,377 133,324
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$340,830 347,337 336,965 345,519 337,822 338,158
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