Exhibit 10.1
LADD FURNITURE, INC. NEWS RELEASE
FOR IMMEDIATE RELEASE
October 17, 1996
One Plaza Center Box HP3 Contact: John J. Ong
High Point, NC 27261-1500 (910) 888-6353
E-mail: ong@nr.infi.net
LADD REPORTS $1.8 MILLION PROFIT FOR THIRD QUARTER
HIGH POINT, NC - LADD Furniture, Inc. today reported net earnings of $1.8
million or $0.23 per share for this year's third quarter, up from 1996's
second quarter net earnings of $1.2 million or $0.15 per share. In the third
quarter of 1995, the company earned $1.9 million or $0.24 per share. Net sales
for this year's third quarter totaled $124.1 million, down from $159.1 million
in the same period of fiscal 1995, with most of the decline resulting from
LADD's divestiture of several of its business units in late 1995 and early
1996.
LADD president and CEO Fred L. Schuermann, Jr. said, "Excluding the
divestiture companies, our 1996 third quarter net sales increased slightly
compared to those of the prior quarter." He noted, "We have had several
nonrecurring transactions during the past two quarters which make LADD's
reported results difficult to evaluate. In this year's second quarter, we
recorded a substantial nonrecurring gain resulting from the curtailment of the
company's retiree health care plan, and then during the September quarter we
recorded a gain of $1.7 million in conjunction with the settlement of a long-
standing insurance claim. When our results are adjusted to exclude these two
nonrecurring items, along with the operations of our divested companies and the
various restructuring costs we have incurred, LADD's pretax profit was $3.7
million higher in the third quarter of this year than in the second quarter of
fiscal 1996."
Schuermann added, "I am encouraged that this increase in LADD' s
profitability was accomplished despite an overall flat sales environment, and
I am particularly pleased with the continuing progress this management team is
achieving during 1996 throughout the company. In addition," he concluded, "the
general tone of business in the residential furniture industry has improved in
the last month or so. This should bode well for the International Home
Furnishings Market which began here in High Point today. We are very excited
with the products we will be presenting during the market this week and next."
LADD executive vice president and chief financial officer William S.
Creekmuir said he was pleased to report that the company's total debt was
reduced by $9.8 million during the third quarter, to $143.4 million as of
September 28, 1996. Creekmuir noted
- 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
that, during the second and third quarters combined, the total debt reduction
was $13.9 million. "Equally important," he said, "our inventories declined by
$8.0 million in the third quarter." He said total inventories were $86.4
million as of September 28, 1996, down from $94.4 million three months earlier.
Headquartered in High Point, NC, LADD is one of the largest North American
manufacturers of residential furniture. The company 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
SEPT. 28, 1996 SEPT. 30, 1995
Net sales $ 124,094,000 159,144,000
Earnings before interest
and income taxes 6,461,000 5,030,000
Interest expense 3,182,000 2,997,000
Earnings before income taxes 3,279,000 2,033,000
Income tax expense 1,477,000 142,000
Net earnings $ 1,802,000 1,891,000
Net earnings per common share $ 0.23 0.24
Weighted average number of
common shares outstanding 7,721,165 7,725,805
39 WEEKS ENDED
SEPT. 28, 1996(A) SEPT. 30, 1995(B)
Net sales $ 390,034,000 461,521,000
Earnings (loss) before interest
and income taxes 1,577,000 (33,353,000)
Interest expense 8,900,000 8,646,000
Loss before income taxes (7,323,000) (41,999,000)
Income tax benefit 3,295,000 16,591,000
Net loss $ (4,028,000) (25,408,000)
Net loss per common share $ (0.52) (3.29)
Weighted average number of
common shares outstanding 7,722,924 7,718,722
NOTES:
(A) THE 1996 NINE-MONTH RESULTS INCLUDE A PRETAX RESTRUCTURING CHARGE OF $4.0
MILLION. (B) THE 1995 NINE-MONTH RESULTS INCLUDE A PRETAX RESTRUCTURING CHARGE
OF $25.7 MILLION AND A NON-CASH CHARGE OF $10.2 MILLION.