(LADD FURNITURE, INC. LOGO) NEWS RELEASE
One Plaza Center Box HP3
High Point, NC 27261-1500 FOR IMMEDIATE RELEASE
July 17, 1997
Contact: John J. Ong
(910) 888-6353
E-mail: ong@nr.infi.net
LADD'S SECOND QUARTER EARNINGS INCREASE 42%
HIGH POINT, NC -- LADD Furniture, Inc. today reported second quarter
net earnings of $1.7 million, an increase of 42 percent over the year-earlier
quarter's $1.2 million. On a per share basis, second quarter net earnings rose
40 percent, to $0.21 this year from $0.15 in fiscal 1996. For the first six
months, net earnings totaled $2.2 million or $0.28 per share this year, which
compares with a net loss of $5.8 million or $0.76 per share in the same period
of fiscal 1996.
Net sales increased 2 percent for the second quarter, to $125.6
million, and declined by 4 percent for the first six months, to $248.9 million.
However, the 1996 sales include shipments made by former LADD companies which
were subsequently divested and, on an "ongoing company" basis, 1997 net sales
increased by 6 percent for the second quarter and by 2 percent for the first
six months, as compared against the same periods of fiscal 1996.
Commenting on these results, LADD president and CEO Fred L. Schuermann,
Jr. said that business conditions remained subdued in the residential furniture
industry during the second quarter. Schuermann said, "Furniture retailers
around the country reported generally small same store sales gains or, in some
cases, outright declines for the quarter. Our residential furniture companies
were affected by this industry sluggishness during the second quarter, but our
American of Martinsville contract furniture business enjoyed record sales for
the period." He added, "We are very pleased with the earnings progress we
made during this year's second quarter," pointing out that the 1996 second
quarter earnings included a net pretax gain of approximately $3.9 million,
principally relating to LADD's termination of its retiree health care plan
effective July 1, 1996. "In other words," Schuermann said, "the fundamental
second quarter earnings improvement compared to a year earlier was in excess of
$5.5 million before taxes."
Commenting on the outlook for the remainder of 1997, Schuermann said,
"Our order backlog increased by 11 percent during the second quarter, primarily
representing follow-through orders from the outstanding April furniture market
our residential casegoods and upholstery companies enjoyed this year in
High Point. This favorable backlog position should have a positive impact on
our overall 1997 second half results."
- over -
The LADD family of fine furniture companies
-------------------------------------------
Lea Industries * American Drew * Clayton Marcus
Barclay * American of Martinsville * Pennsylvania House * Pilliod
Executive vice president and chief financial officer William S.
Creekmuir reported that LADD's total debt declined to $127.9 million at
June 28, 1997 from $129.4 million three months earlier. "This continued the
company's recent quarterly debt reduction trend," Creekmuir said, adding,
"paying down debt and reducing LADD's financial leverage remains one of
management's highest priorities, along with continuing to improve the
company's gross profit margin." Creekmuir added that the gross margin rose
to 19.3% in the second quarter of 1997 from 17.8% in the first quarter.
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, Barclay, Clayton Marcus, 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 and assisted-living facilities, retirement
homes and to governmental and university dormitory markets. LADD also owns and
operates LADD Transportation, a support company. LADD's stock is traded on the
Nasdaq Stock Market under the symbol LADF.
TABLE FOLLOWS
# # # # # # #
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 that could cause
actual results to differ materially from those expressed or implied in the
forward-looking statements. Such factors include anticipated sales growth
resulting from the company's new product introductions, in addition to those
factors set forth in Item 7 ("Management's Discussion and Analysis") in the
company's Form 10-K report for the year ended December 28, 1996.
NOTE: To receive fax copies of recent LADD news releases at no cost, just
dial 800-758-5804, extension 501325. These releases are also available via the
Internet @www.prnewswire.com ("company news").
LADD FURNITURE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (PRELIMINARY AND UNAUDITED)
13 Weeks Ended
June 29, 1996 June 28, 1997
Net sales (1) $ 123,483,000 125,572,000
Earnings before interest
and income taxes 4,115,000 5,424,000
Interest expense 3,058,000 2,719,000
Earnings before income taxes 1,057,000 2,705,000
Income tax expense (benefit) (108,000) 1,055,000
Net earnings $ 1,165,000 1,650,000
Net earnings per common share $ 0.15 0.21
Weighted average number of
common shares outstanding 7,722,837 7,737,217
26 Weeks Ended
June 29, 1996 June 28, 1997
Net sales (1) $ 258,743,000 248,940,000
Earnings (loss) before interest
and income taxes (4,884,000) 9,282,000
Interest expense 5,718,000 5,724,000
Earnings (loss) before income taxes (10,602,000) 3,558,000
Income tax expense (benefit) (4,772,000) 1,388,000
Net earnings (loss) $ (5,830,000) 2,170,000
Net earnings (loss) per common share $ (0.76) 0.28
Weighted average number of
common shares outstanding 7,723,803 7,728,392
The 1996 six-month results reflect the company's sale of its Fournier Furniture
business effective February 26, 1996. The 1996 second quarter and six-month
results include the company's Daystrom business, which was liquidated during the
second half of 1996.
(1) Net sales by business group Second Quarter First Six Months
were as follows (000's): 1996 1997 1996 1997
Casegoods $ 67,403 67,622 139,746 136,172
Upholstery 30,611 29,141 65,380 60,714
Contract 20,782 28,809 38,328 52,054
Divestiture companies 4,687 -- 15,289 --
Total 123,483 125,572 258,743 248,940