FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 28, 1996 Commission File No. 0-11577
LADD FURNITURE, INC.
(Exact name of registrant as specified in charter)
North Carolina 56-1311320
(State or other juris- (I.R.S. Employer
diction of incorpora- Identification No.)
tion or organization)
One Plaza Center, Box HP-3, High Point, North Carolina 27261-1500
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (910) 889-0333
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No ____
As of November 11, 1996 there were 7,719,567 shares of Common Stock ($.30 par
value) of the registrant outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the thirteen weeks and thirty-nine weeks ended Sept. 28, 1996 and
Sept. 30, 1995
(Amounts in thousands, except per share data)
(Unaudited)
13 Weeks Ended 39 Weeks Ended
------------------------- -----------------------
Sept. 28, Sept. 30, Sept. 28, Sept. 30,
1996 1995 1996 1995
----------- ----------- ---------- -----------
Net sales $ 124,094 159,144 390,034 461,521
Cost of sales 102,585 130,549 325,402 390,601
----------- ----------- ---------- -----------
Gross profit 21,509 28,595 64,632 70,920
Selling, general and
administrative expenses 16,852 23,402 57,750 75,553
Restructuring expense (Note 2) (892) - 3,978 25,696
--------- ----------- ---------- -----------
Operating income (loss) 5,549 5,193 2,904 (30,329)
--------- ----------- ---------- -----------
Other deductions:
Interest expense 3,182 2,997 8,900 8,646
Other expense (income) (912) 163 1,327 3,024
--------- ----------- ---------- -----------
2,270 3,160 10,227 11,670
--------- ----------- ---------- -----------
Earnings (loss) before income taxes 3,279 2,033 (7,323) (41,999)
Income tax expense (benefit) 1,477 142 (3,295) (16,591)
--------- ----------- ---------- -----------
Net earnings (loss) $ 1,802 1,891 (4,028) (25,408)
========= =========== ========== ===========
Net earnings (loss) per common share $ 0.23 0.24 (0.52) (3.29)
Weighted average number of
common shares outstanding 7,721 7,726 7,723 7,719
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 28, 1996 and December 30, 1995
(Amounts in thousands, except share data)
ASSETS
Sept. 28,
1996 December 30,
(Unaudited) 1995 *
---------------- ----------------
Current assets:
Cash $ 1,713 1,272
Trade accounts receivable, less allowances
for doubtful receivables, discounts,
returns and allowances of $3,166 and $4,057,
respectively 75,736 38,288
Inventories 86,428 89,466
Prepaid expenses and other current assets 8,337 13,663
------------- ----------------
Total current assets 172,214 142,689
------------- ----------------
Property, plant and equipment, net 78,543 82,586
Businesses held for sale, net - 8,052
Intangible and other assets, net 81,088 79,659
------------- ----------------
$ 331,845 312,986
============= ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 5,136 309
Short-term bank borrowings - 3,037
Trade accounts payable 27,766 28,419
Accrued expenses and other current liabilities 28,965 31,396
------------- --------------
Total current liabilities 61,867 63,161
------------- --------------
Long-term debt, excluding current installments 138,234 112,598
Deferred compensation and other liabilities 2,653 6,593
Deferred income taxes 7,605 5,437
------------- --------------
Total liabilities 210,359 187,789
------------- --------------
Shareholders' equity:
Preferred stock of $100 par value. Authorized
500,000 shares; no shares issued - -
Common stock of $.30 par value. Authorized
50,000,000 shares; issued 7,719,567 and
7,726,993 shares, respectively 2,316 2,318
Additional paid-in capital 49,736 49,905
Retained earnings 69,801 73,829
------------- --------------
121,853 126,052
Less unamortized value of restricted stock (367) (855)
------------- --------------
Total shareholders' equity 121,486 125,197
------------- --------------
$ 331,845 312,986
============= ==============
* Derived from the Company's 1995 audited Consolidated Financial Statements.
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the thirty-nine weeks ended September 28, 1996 and September 30, 1995
(Amounts in thousands)
(Unaudited)
39 Weeks Ended
--------------------------
Sept. 28, Sept. 30,
1996 1995
------------ -----------
Cash flows from operating activities:
Net loss $ (4,028) (25,408)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation of property, plant and equipment 8,137 9,891
Amortization 3,363 2,954
Restructuring expense 3,978 25,696
Provision for losses on trade accounts receivable 3,296 2,422
Gains on sales of property, plant and equipment (115) (373)
Provision for deferred income taxes 538 (15,526)
Increase (decrease) in deferred compensation and
other liabilities (2,753) 737
Change in assets and liabilities, net of divestitures
and classification of businesses held for sale:
Increase in trade accounts receivable (3,258) (15,554)
Decrease in inventories 3,473 10,999
Decrease in prepaid expenses and other
current assets 3,567 2,424
Increase (decrease) in trade accounts payable (330) 1,887
Increase (decrease) in accrued expenses and other
current liabilities (1,423) 5,915
------------ -----------
Total adjustments 18,473 31,472
------------ -----------
Net cash provided by operating activities 14,445 6,064
------------ -----------
Cash flows from investing activities:
Additions to property, plant and equipment (6,877) (8,557)
Purchase of leased manufacturing equipment (4,648) -
Proceeds from sales of property, plant and equipment 235 170
Proceeds from sale of business, net of transaction expenses 5,284 -
Proceeds from sales of idle assets 1,250 -
Additions to other assets (3,088) (1,678)
------------ -----------
Net cash used in investing activities (7,844) (10,065)
------------ -----------
Cash flows from financing activities:
Proceeds from long-term borrowings 137,837 231
Repayments of short-term bank borrowings - (2,550)
Proceeds from (repayments of) sales of accounts receivable (36,000) 7,515
Proceeds from sale/leaseback of equipment 2,614 6,691
Principal payments of long-term debt (110,430) (3,762)
Dividends paid - (1,738)
Other (171) 8
------------ -----------
Net cash provided by (used in) financing activites (6,150) 6,395
------------ -----------
Effect of exchange rate changes on cash (10) (57)
------------ -----------
Net increase in cash 441 2,337
Cash at beginning of period 1,272 576
------------ -----------
Cash at end of period $ 1,713 2,913
============ ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ 8,906 8,487
Cash paid (net refunds received) for income taxes (7,418) 327
============ ===========
LADD FURNITURE, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Amounts in thousands, except share data)
Currency Unamortized
Number Additional trans- value of Total
of shares Common paid-in lation Retained restricted shareholders'
issued stock capital adjustment earnings stock equity
------------ -------- ----------- ---------- --------- ----------- -------------
BALANCE AT DECEMBER 31, 1994 7,700,151 $ 2,310 49,516 (208) 101,105 (817) 151,906
Purchase of restricted
stock (2,452) (1) (68) - - 68 (1)
Shares issued in connection
with and amortization of
employee restricted
stock awards 29,294 9 457 - - (106) 360
Currency translation
adjustment - - - (66) - - (66)
Reclassification to businesses
held for sale - - - 274 - - 274
Net loss - - - - (25,190) - (25,190)
Dividends paid - - - - (2,086) - (2,086)
-------------- -------- ---------- --------- ----------- ---------- -----------
BALANCE AT DECEMBER 30, 1995 7,726,993 2,318 49,905 0 73,829 (855) 125,197
Purchase of restricted
stock (7,426) (2) (169) - - 169 (2)
Amortization of employee
restricted stock awards - - - - - 319 319
Net loss - - - - (4,028) - (4,028)
-------------- -------- ---------- --------- ----------- ---------- -----------
BALANCE AT SEPTEMBER 28, 1996
(UNAUDITED) 7,719,567 $ 2,316 49,736 0 69,801 (367) 121,486
============== ======== ========== ========= =========== ========== ===========
Notes:
(1) Quarterly Financial Data
The quarterly consolidated financial data are unaudited but include, in
the opinion of management, all adjustments necessary for a fair
statement of the operating results for the interim periods indicated.
All adjustments are of a normal recurring nature except as disclosed in
Notes 2 and 5 to the financial statements.
(2) Restructuring
In June 1995, the Company recorded a $25.7 million non-cash
restructuring charge. The restructuring charge resulted from the
Company's decision to divest four operating companies (businesses held
for sale), close four Company-owned retail stores and reorganize the
remaining companies to improve operating performance. During the first
quarter of 1996, the Company recorded a $5.1 million non-cash
restructuring charge resulting from the continued reorganization of the
Company's remaining businesses and the further write-down of the
Company's businesses sold or held for sale to their estimated fair
value, less disposition costs. The restructuring charge in the first
quarter of 1996 was a result of: (i) the Company's decision to
liquidate Daystrom Furniture; (ii) a shortfall in the net proceeds
anticipated from selling Fournier Furniture; and (iii) additional
severance expense relating to the continued restructuring of the
Company's remaining businesses. The severance expense included a
$130,000 adjustment to shareholders' equity for the vesting of
restricted stock.
During the second and third quarters of 1996, the estimated liquidation
value of Daystrom Furniture, one of the four businesses identified for
divestiture in 1995, was further adjusted by credits to restructuring
expense. Additionally in the third quarter of 1996, the Company
negotiated a cash settlement related to leases of its former retail
stores, which resulted in a $466,000 credit to restructuring expense.
Further, as a result of the decision to liquidate the assets of
Daystrom Furniture, the reserves related to the write-down of
Daystrom's net assets to their estimated fair value were reclassified
to the appropriate asset and liability accounts as follows (i)
$1,950,000 to accrue for severance, environmental clean-up costs, plant
closing costs and other miscellaneous expenses and (ii) $440,000 to
provide for estimated bad debts. Additionally, Daystrom's net property,
plant and equipment was reclassified to "Intangible and other assets"
and recorded at its estimated liquidation value.
The following unaudited pro forma information shows consolidated
operating results for the periods presented as though the Company had
divested the four businesses and closed its company-owned retail stores
as of January 1, 1995, excluding the restructuring expense recorded
during the second quarter of 1995 and the first nine months of 1996:
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13 Weeks Ended 39 Weeks Ended
Sept 28, Sept 30, Sept 28, Sept 30,
1996 1995 1996 1995
-------- -------- ------- -------
Net sales $ 123,840 130,956 374,521 377,257
Earnings (loss) before
interest and income taxes 5,866 3,632 9,006 (5,449)
The costs charged against restructuring reserves during the first nine
months of 1996 are as follows (in thousands):
Restructuring reserves, December 30, 1995 $ 3,964
First quarter 1996 reserve additions 815
Second quarter 1996 Daystrom reclassification 2,390
Third quarter 1996 reversal of restructuring
reserve (666)
Costs:
Write-off leasehold improvements (129)
Lease termination costs (724)
Severance payments (1,942)
Other (838)
Restructuring reserves, September 28, 1996 $ 2,870
(3) Inventories
A summary of inventories follows (in thousands):
September 28, December 30,
1996 1995
Inventories on the FIFO cost method:
Finished goods $ 47,286 50,847
Work in process 13,933 17,165
Raw materials and supplies 37,084 33,140
------------ ------------
Total inventories on
the FIFO cost method 98,303 101,152
Less adjustments of certain inven-
tories to the LIFO cost method (11,875) (11,686)
------------ ------------
$ 86,428 89,466
============ ============
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(4) Trade Accounts Receivable Securitization Program
On March 28, 1996, the Company's trade accounts receivable
securitization program (the Securitization Program) was terminated. The
funds previously provided by the Securitization Program were replaced
by borrowings available under the revolving credit line of the
Company's bank credit facility. At December 30, 1995, trade accounts
receivable sold under the Securitization Program and excluded from the
consolidated balance sheet totaled $36.0 million.
(5) Postretirement Benefits Other Than Pensions
On May 10, 1996, the Company curtailed the postretirement features of
its health care benefit program, effective July 1, 1996, in an effort
to reduce operating costs. The effect of this action was to eliminate
the Company's financial obligation for postretirement healthcare costs.
As a result of the benefit curtailment, the Company eliminated during
the second quarter of 1996 a noncurrent liability of approximately $4.2
million which existed at March 30, 1996 resulting in a credit to
operating income ($3.7 million to cost of sales and $0.5 million to
selling, general and administrative expense). The remaining liability
balance at that time of approximately $1.1 million was reclassified as
a current liability. The curtailment of retiree health care benefits
will result in an annual cost savings of over $2.0 million, of which
approximately $1.2 million will be cash.
(6) Loan and Security Agreement
On July 12, 1996, the Company entered into a $190.0 million long-term
secured credit facility (the Facility) which consists of a $125.0
million three-year revolving credit loan and a $65.0 million term loan.
The term loan portion of the Facility will be repaid in quarterly
installments of $1,625,000 commencing January 1, 1997.
Borrowings under the revolving credit loan and the term loan bear
interest at rates selected periodically by the Company of LIBOR plus
2.75% and 3.00%, respectively, or prime plus 1.75% and 2.00%,
respectively. At September 28, 1996, LIBOR was 5.625% and the prime
rate was 8.25%. Under the Facility, the Company pays a commitment fee
of 1/2% per annum on the unused portion of the revolving credit
facility. In connection with the refinancing, the Company incurred fees
and expenses aggregating approximately $4.0 million which will be
amortized over the terms of the Facility. At current borrowing levels
and market interest rates, the effect of the Facility will be to
increase interest expense and lower profit before income taxes by
approximately $1.0 million annually.
The Facility is secured by substantially all the existing and hereafter
acquired assets of the Company. Availability on the revolving credit
loan is determined by levels of eligible inventory and eligible trade
accounts receivable of the Company. The Facility
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contains customary covenants for asset based loans which restrict
future borrowings, dividends and capital spending; require maintenance
of a minimum net worth; and include financial covenant ratios related
to cash flow, earnings and debt. At September 28, 1996, the Company's
availability for future borrowings under its revolving credit loan
totalled $25.3 million.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of net sales
to certain items included in the Consolidated Statements of Operations:
13 Weeks Ended 39 Weeks Ended
------------------ ----------------
Sept 28, Sept 30, Sept 28, Sept 30,
1996 1995 1996 1995
-------- -------- ------- -------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 82.7 82.0 83.4 84.6
------ ------ ------ ------
Gross profit 17.3 18.0 16.6 15.4
Selling, general and
administrative expenses 13.6 14.7 14.8 16.4
Restructuring expense (0.7) - 1.0 5.6
------ ------ ------ ------
Operating income (loss) 4.4 3.3 0.8 (6.6)
------ ------ ------ ------
Other deductions (income):
Interest expense 2.5 1.9 2.3 1.9
Other, net (0.7) 0.1 .3 .6
------ ------ ------ ------
1.8 2.0 2.6 2.5
------ ------ ------ ------
Earnings (loss) before
income taxes 2.6 1.3 (1.8) (9.1)
Income tax expense (benefit) 1.2 0.1 (0.8) (3.6)
------ ------ ------ ------
Net earnings (loss) 1.4% 1.2% (1.0)% (5.5)%
====== ====== ====== ======
Net sales for the third quarter and first nine months of 1996 were
$124.1 million and $390.0 million, respectively, compared with $159.1 million
and $461.5 million during the comparable 1995 periods. Net sales in 1996
decreased from prior year levels primarily due to the sale of Brown Jordan
Company and Lea Lumber and Plywood as of December 29, 1995, the sale of Fournier
Furniture as of February 26, 1996, and the liquidation of the assets of Daystrom
Furniture beginning in July 1996. On a pro forma basis, excluding the four
divestiture companies and the company-owned retail stores, 1996 third quarter
and year-to-date net sales would have decreased from prior year levels by
approximately 5.4% and 0.7%, respectively. This decrease in pro forma sales is
primarily due to lower sales of the Company's promotional and upper priced
casegoods operations.
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Cost of sales as a percentage of net sales increased to 82.7% for the
third quarter of 1996 and decreased to 83.4% for the year-to-date, compared to
82.0% and 84.6%, respectively, in 1995. This resulted in a decrease in gross
profit margins to 17.3% for the third quarter and an increase to 16.6% for the
year-to-date, from 18.0% and 15.4%, respectively, in 1995. The decrease in the
third quarter gross profit margins was primarily due to the inclusion of Brown
Jordan and Lea Lumber & Plywood operating results in the 1995 year-to-date
results. The decrease in cost of sales for the year-to-date was partially
attributable to a $3.7 million non-cash credit to operations resulting from the
Company's curtailment of retiree health care benefits (see note 5). This credit
to operations was somewhat offset during the second quarter by additional
reserves recorded for discontinued products, and depressed gross margins
relating to the liquidation of Daystrom Furniture's inventory.
Selling, general and administrative (SG&A) expenses decreased to 13.6%
of net sales for the third quarter of 1996 from 14.7% for the same period in
1995, while SG&A expenses for the first nine months decreased to 14.8% from
16.4% in 1995. The lower third quarter 1996 SG&A expense reflects benefits from
cost saving actions initiated by the Company during the first quarter of 1996.
These actions included a reduction in salaried employees, consolidation of
certain administrative functions, and cutbacks in advertising expense. Included
in the first nine months SG&A expenses of 1995 was a $2.3 million non-cash
charge to increase bad debt reserves, and to provide for other miscellaneous
expenses.
During the first quarter of 1996, a $5.1 non-cash restructuring charge
was recorded as a result of: (i) the Company's decision to liquidate Daystrom
Furniture; (ii) a shortfall in the actual versus anticipated net proceeds from
selling Fournier Furniture; and (iii) additional severance expense relating to
the continued restructuring of the Company's remaining businesses. A
restructuring credit of $0.3 and $0.9 million was recorded in the second and
third quarter of 1996, respectively.
The $25.7 million restructuring expense incurred in the second quarter
of 1995 resulted from the Company's decision to divest four of its operating
companies and restructure the remaining operating companies in order to improve
their operating performance. The reserves included a non-cash charge to
write-down the businesses held for sale to the lower of carrying value or
estimated fair value; to provide for expected losses from the closing of four
Company-owned retail stores; to write down discontinued machinery due to changes
in manufacturing processes; and to provide for anticipated severance expense and
other costs.
Other deductions were 1.8% of net sales for the third quarter and 2.6%
for the first nine months of 1996, compared to 2.0% and 2.5%, respectively, in
1995. The third quarter decrease was primary due $1.7 million of income relating
to the settlement of a long-standing insurance claim, offset by an increase in
amortization expense and an increase in interest expense. Other deductions for
the first nine months of 1995 also included non-cash charges totaling $2.2
million attributable to the
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write-off of unamortized bank financing fees and other noncurrent assets, and
the recognition of other liabilities.
During the first nine months, the Company's loss before income taxes was
$7.3 million in 1996, compared to a loss of $42.0 million in 1995. The Company's
estimated annual effective income tax rate for the first nine months of 1996
increased to 45.0% from the 39.5% annual rate estimated in the first nine months
of 1995. The difference in the tax rates for the respective periods result from
various permanent taxable income, deductions, or credit items that increase or
decrease the normal U.S. Federal tax rate of 34.0% when applied to the Company's
estimated annualized pre-tax income or loss during each interim period, or
actual annual pre-tax income or loss in the case of each fiscal year end.
The Company's net income was $1.8 million, or $0.23 per share, for the
third quarter of 1996, compared with net income of $1.9 million, or $0.24 share
for the same quarter of 1995. The first nine months net loss was $4.0 million,
or $0.52 per share for 1996, compared with a net loss of $25.4 million, or $3.29
per share, for 1995.
LIQUIDITY AND CAPITAL RESOURCES
On July 12, 1996, the Company completed the refinancing of its long-term
and short-term bank credit facility. The new credit facility (the Facility)
consists of a $125.0 million three-year revolving credit loan and a $65.0
million term loan. The Facility is secured by substantially all the assets of
the Company, including equipment, inventory, receivables and real property.
Borrowings under the Facility bear interest at rates selected periodically by
the Company of LIBOR plus 2.75% or prime plus 1.75% for the revolving credit
loan and LIBOR plus 3.00% or prime plus 2.00% for the term loan at September 28,
1996. At current borrowing levels and market interest rates, expected interest
expense under the Facility will lower profit before income taxes by
approximately $1.0 million annually. The term loan under the Facility will be
repaid in quarterly installments of $1,625,000 commencing January 1, 1997. In
anticipation of the refinancing, $890,000 of unamortized financing costs were
charged to operations during the first quarter of 1996. In connection with the
refinancing, the Company incurred fees and expenses aggregating approximately
$4.0 million which will be amortized over the terms of the Facility.
Effective March 28, 1996, the Company's trade accounts receivable
securitization program was terminated in anticipation of refinancing the
Company's then existing long-term credit facility. At December 30, 1995, the
Company had generated cash of $36.0 million from the securitization program
which was subsequently replaced with borrowings under the Company's long-term
credit facility.
Primarily as a result of refinancing the accounts receivable
securitization program with long-term debt, the current ratio at September 28,
1996 increased to 2.8 to 1 from 2.3 to 1 at December 30, 1995, and net working
capital increased to $110.3 million from $79.5 million between the same two
dates.
-11-
During the first nine months, the Company generated cash from operating
activities of $14.4 million in 1996, compared to $6.1 million in 1995. The cash
generated during the first nine months of 1996 and 1995 were primarily from the
net loss plus depreciation, amortization, and restructuring expense and a
reduction in working capital needs. Additionally, cash was generated during the
third quarter of 1996 from a $2.6 million sale/leaseback of selected machinery
and equipment.
During the first nine months of 1996, capital spending totaled $6.9
million, down from $8.6 million during the same period in 1995. Total 1996
capital expenditures are expected to be below the current annual depreciation
rate of almost $11.0 million. The majority of the capital spending during the
first nine months of both 1995 and 1996 was to complete previously initiated
capital projects.
At September 28, 1996, the Company had $137.6 million of bank borrowings
outstanding, comprised of a $65.0 million secured term loan and a $72.6 million
secured revolving credit loan. Additionally at September 28, 1996, the Company
had approximately $5.8 million outstanding in other long-term indebtedness,
primarily consisting of fixed-rate industrial revenue bonds. Total long and
short-term debt (funded debt) represented 52.1% of total capitalization at
September 28, 1996, compared to 45.8% of total capitalization at December 30,
1995. At September 28, 1996, the Company had $45.4 million in unused long-term
revolving bank credit lines, of which $25.3 million was currently available to
meet future cash requirements.
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PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On July 12, 1996, the Company entered into a $190.0 million
long-term secured credit facility (the Facility) which
consists of a $125.0 million three-year revolving credit loan
and a $65.0 million term loan. The term loan portion of the
Facility will be repaid in quarterly installments of
$1,625,000 commencing January 1, 1997.
Borrowings under the revolving credit loan and the term loan
bear interest at rates selected periodically by the Company of
LIBOR plus 2.75% and 3.00%, respectively, or prime plus 1.75%
and 2.00%, respectively. Under the Facility, the Company pays
a commitment fee of 1/2% per annum on the unused portion of
the revolving credit facility. In connection with the
refinancing, the Company incurred fees and expenses
aggregating approximately $4.0 million which will be amortized
over the terms of the Facility. At current borrowing levels
and market interest rates, the effect of the Facility will be
to increase interest expense and lower profit before income
taxes by approximately $1.0 million annually.
The Facility is secured by substantially all the existing and
hereafter acquired assets of the Company. Availability on the
revolving credit loan is determined by levels of eligible
inventory and eligible trade accounts receivable of the
Company. The Facility contains customary covenants for asset
based loans which restrict future borrowings, dividends and
capital spending; require maintenance of a minimum net worth;
and include financial covenant ratios related to cash flow,
earnings and debt.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Amendment No. 1 to Loan and Security
Agreement dated as of July 12, 1996 among
LADD Furniture, Inc., certain of its
subsidiaries, the financial institutions
party thereto from time to time as the
lenders, NationsBank, N.A. (South) and Fleet
Capital Corporation as the "Co-Agents," and
NationsBank, N.A. (South), as agent for the
lenders.
10.2 Amendment No. 2 to Loan and Security
Agreement dated as of July 12, 1996 among
LADD Furniture, Inc., certain of its
subsidiaries, the financial institutions
party thereto from time to time as the
lenders, NationsBank, N.A. (South) and Fleet
Capital
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Corporation as the "Co-Agents," and
NationsBank, N.A. (South), as agent for the
lenders.
10.3 Equipment Leasing Agreement dated as of
September 19, 1996 between BTM Financial &
Leasing Corporation B-4 and the Company.
(b) Reports on Form 8-K
On July 24, 1996, the Company filed with the
Commission a Form 8-K dated July 18, 1996 which
reported under Item 5 (i) Loan and Security Agreement
dated as of July 12, 1996 among LADD Furniture, Inc.,
certain of its subsidiaries, the financial
institutions party thereto from time to time as the
lenders, NationsBank, N.A. (South) and Fleet Capital
Corporation as the "Co-Agents," and NationsBank, N.A.
(South), as agent for the lenders; (ii) Press Release
dated July 18, 1996 reporting the closing and funding
of the Loan and Security Agreement; and (iii) Press
Release dated July 22, 1996 reporting the second
quarter earnings of the Company.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LADD Furniture, Inc.
Date: November 11, 1996 By: s/William S. Creekmuir
----------------------
William S. Creekmuir
Executive Vice President
and Chief Financial Officer
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