NEWS RELEASE
FOR IMMEDIATE RELEASE
July 22, 1996
(LADD Furniture, Inc. logo appears here) Contact: John J. Ong
One Plaza Center Box HP3 (910) 888-6353
High Point, NC 27261-1500 E-mail: ong@nr.infi.net
LADD REPORTS $1.2 MILLION SECOND QUARTER PROFIT
HIGH POINT, NC LADD Furniture, Inc. today reported a net profit of
$1.2 million or $0.15 per share for this year's second quarter, compared to a
net loss of $27.3 million or $3.54 per share in the same quarter of fiscal 1995.
The year-earlier loss included a pretax restructuring charge of $25.7 million
and a pretax non-cash charge of $10.2 million. Net sales for this year's second
quarter declined to $127.1 million from $149.0 million in the same period of
fiscal 1995, with the decline resulting from LADD's divestiture of several of
its business units during late 1995 and early 1996.
For the first six months of 1996, net sales declined to $265.9
million from $302.4 million a year earlier, reflecting the absence of the
divested businesses from this year's sales figures. A net loss of $5.8 million
or $0.76 per share was incurred in the first half of 1996, compared to a
year-earlier net loss of $27.3 million or $3.54 per share.
LADD president and CEO Fred L. Schuermann, Jr. said, "Excluding the
four divestiture companies, our 1996 second quarter net sales increased slightly
to $122.4 million from $120.9 million in the same quarter of 1995. According to
Schuermann, LADD's 1996 second quarter results were affected by a number of
factors, including a gain realized as a result of the company's
previously-announced curtailment of its retiree health care insurance program,
partially offset by increased bad debt reserves and allowances for potential
losses on discontinued products.
"Overall," Schuermann said, "we made significant progress toward
turning LADD's operating results around during the second quarter. We expect to
see further improvement in operating results in forthcoming quarters,
particularly as some of our recent cost reduction and management reorganization
actions begin to positively affect the company's profit margins." Schuermann
expressed some disappointment with the current trend of U.S. furniture sales,
noting that a number of retailers continued to report declining same store sales
through mid-year. "We hope this is only a temporary lull," Schuermann said, "and
that recent strength in U.S. housing activity will begin to translate into
improved consumer demand for furniture in the second half of the year."
- OVER -
The LADD family of fine furniture companies
Lea Industries (BULLET) American Drew (BULLET) Clayton Marcus (BULLET) Barclay
American of Martinsville (BULLET) Kenbridge (BULLET)
Pennsylvania House (BULLET) Pilliod
Schuermann added that LADD has been unable to consummate the sale of
its Daystrom Furniture operation as an ongoing business, and said the previously
announced close-down of the company is nearing completion. "We are expecting to
be able to collect Daystrom's receivables and sell its equipment during the
third quarter of this year, and we will also sell the Daystrom plant, although
this will probably take additional time," he said.
Executive vice president and chief financial officer William S.
Creekmuir said he was pleased that the company's total debt was reduced by $4.1
million during the second quarter. Creekmuir also noted that LADD last week
completed a new $190 million secured bank financing agreement, which was used to
refinance the company's outstanding bank debt and provide additional liquidity.
The facility consists of a $125 million three-year revolving credit facility and
a $65 million term loan. Creekmuir said, "This new financing arrangement
represents a strong vote of confidence on the part of the lending group in
LADD's management team and our future plans." He concluded, "At current
borrowing levels, the company's interest expense will increase marginally under
the new credit facility."
Headquartered in High Point, NC, LADD is one of the largest North
American manufacturers of residential furniture. LADD markets its wide range of
residential wood and upholstered furniture domestically under the major brand
names American Drew, American of Martinsville, Barclay, Clayton Marcus,
Kenbridge, 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 to health care
facilities, retirement homes and governmental and university dormitory 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.
TABLE FOLLOWS
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LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRELIMINARY AND UNAUDITED)
13 WEEKS ENDED
JUNE 29, 1996 JULY 1, 1995
Net sales $127,096,000 148,989,000
Earnings (loss) before interest
and income taxes 4,115,000 (41,221,000)
Interest expense 3,058,000 2,846,000
Earnings (loss) before income taxes 1,057,000 (44,067,000)
Income tax benefit 108,000 16,744,000
Net earnings (loss) $ 1,165,000 (27,323,000)
Net earnings (loss) per common share $ 0.15 (3.54)
Weighted average number of
common shares outstanding 7,722,837 7,725,236
26 WEEKS ENDED
JUNE 29, 1996(A) JULY 1, 1995(B)
Net sales $265,940,000 302,377,000
Loss before interest
and income taxes 4,884,000 38,383,000
Interest expense 5,718,000 5,649,000
Loss before income taxes 10,602,000 44,032,000
Income tax benefit 4,772,000 16,733,000
Net loss $ 5,830,000 27,299,000
Net loss per common share $ 0.76 3.54
Weighted average number of
common shares outstanding 7,723,803 7,715,180
NOTES:
(A) THE 1996 SIX MONTH FIGURES INCLUDE A PRETAX RESTRUCTURING CHARGE
OF $4.9 MILLION.
(B) THE 1995 SIX MONTH FIGURES INCLUDE A PRETAX RESTRUCTURING CHARGE
OF $25.7 MILLION AND A NON-CASH CHARGE OF $10.2 MILLION.
-over-
LADD FURNITURE, INC. AND SUBSIDIARIES - SUPPLEMENTAL FINANCIAL DATA
JULY 22, 1996 CONTACT: JOHN J. ONG, CFA (910) 888-6353
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
QUARTERS ENDED
IN THOUSANDS, EXCEPT PER SHARE DATA 6/29/96* 3/30/96* 12/30/95 9/30/95 7/1/95** 4/1/95
Net sales $ 127,096 138,844 152,981 159,144 148,989 153,388
Cost of sales 103,553 119,264 125,379 130,549 133,492 126,560
Gross profit 23,543 19,580 27,602 28,595 15,497 26,828
Selling, general and administrative expenses 19,110 21,788 25,792 23,402 28,335 23,816
Restructuring expense (279) 5,149 (576) -- 25,696 --
Operating income (loss) 4,712 (7,357) 2,386 5,193 (38,534) 3,012
Other deductions:
Interest expense 3,058 2,660 3,152 2,997 2,846 2,803
Other, net 597 1,642 661 163 2,687 174
3,655 4,302 3,813 3,160 5,533 2,977
Earnings (loss) before income taxes 1,057 (11,659) (1,427) 2,033 (44,067) 35
Income tax expense (benefit) (108) (4,664) (1,645) 142 (16,744) 11
Net earnings (loss) $ 1,165 (6,995) 218 1,891 (27,323) 24
Net earnings (loss) per common share $ 0.15 (0.91) 0.03 0.24 (3.54) 0.00
Weighted average number of common
shares outstanding 7,723 7,725 7,729 7,726 7,725 7,705
*THE 1996 QUARTERLY RESULTS REFLECT THE COMPANY'S SALE OF ITS BROWN JORDAN
AND LEA LUMBER & PLYWOOD BUSINESSES EFFECTIVE DECEMBER 29, 1995, AND ITS
FOURNIER FURNITURE BUSINESS EFFECTIVE FEBRUARY 26, 1996.
** THE 1995 SECOND QUARTER FIGURES INCLUDE A PRETAX NON-CASH CHARGE OF $10.2
MILLION, IN ADDITION TO THE $25.7 MILLION PRETAX RESTRUCTURING CHARGE SHOWN.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DOLLAR AMOUNTS IN THOUSANDS 6/29/96 3/30/96 12/30/95 9/30/95 7/1/95 4/1/95
ASSETS
Current assets:
Cash $ 430 1,049 1,272 2,913 1,406 1,787
Trade accounts receivable, net 72,429 77,579 38,288 45,337 41,347 59,767
Inventories 94,394 91,386 89,466 86,313 91,127 124,181
Prepaid expenses and other current assets 17,179 20,263 13,663 10,520 11,670 10,515
Total current assets 184,432 190,277 142,689 145,083 145,550 196,250
Property, plant and equipment, net 82,633 82,652 82,586 82,567 83,826 109,014
Businesses held for sale, net -- -- 8,052 32,587 31,184 --
Intangible and other assets, net 79,996 78,900 79,659 76,631 76,515 83,792
$347,061 351,829 312,986 336,868 337,075 389,056
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 3,511 3,563 309 558 618 657
Short-term bank borrowings 5,000 5,000 3,037 2,450 1,950 5,025
Trade accounts payable 31,373 25,984 28,419 26,517 24,059 25,041
Accrued expenses and other current liabilities 32,861 32,620 31,396 30,629 29,814 32,267
Total current liabilities 72,745 67,167 63,161 60,154 56,441 62,990
Long-term debt, excluding current installments 144,637 148,687 112,598 140,182 145,287 153,102
Deferred compensation and other liabilities 2,515 8,211 6,593 7,053 7,000 6,402
Deferred income taxes 7,530 9,338 5,437 4,255 4,769 15,386
Total liabilities 227,427 233,403 187,789 211,644 213,497 237,880
Total shareholders' equity 119,634 118,426 125,197 125,224 123,578 151,176
$347,061 351,829 312,986 336,868 337,075 389,056
ALL SHARE AND PER SHARE DATA HAVE BEEN RESTATED TO REFLECT A 1-FOR-3 REVERSE
SPLIT OF LADD'S COMMON STOCK, WHICH BECAME EFFECTIVE ON MAY 16, 1995. THE PERIOD
ENDED MARCH 30, 1996 REFLECTS THE TERMINATION OF THE COMPANY'S ACCOUNTS
RECEIVABLE SECURITIZATION PROGRAM EFFECTIVE MARCH 28, 1996.