LADD First Quarter Earnings Jump 52 Percent

Furniture World Magazine

LADD Furniture, Inc. reported that its net earnings for the first quarter of fiscal 1999 rose 52 percent, to $3.6 million, from $2.4 million in the first quarter of 1998. Fully diluted net earnings per share for the quarter rose 50 percent, to $0.45 in 1999, from $0.30 per share a year earlier. Total first quarter net sales rose 7 percent from a year earlier, to $157.1 million in 1999 from $147.4 million in 1998, with residential furniture sales increasing 4 percent and contract sales rising 16 percent. LADD chairman, president and CEO Fred L. Schuermann, Jr. said he was very pleased with the sales gains for the quarter, particularly since LADD's sales in the first three months of 1998 had been unusually strong. "Equally gratifying," Schuermann said, "is the fact that our year-over-year profitability continued to improve, with first quarter gross margin rising to 19.2% in 1999 from 18. 1 % in 1998 and 17.8% in 1997 -extending our three-plus year trend of steadily improving financial results." Schuermann noted that, due to seasonality factors primarily affecting the contract business, LADD's sales and profit margins are normally at their lowest in the first quarter of each year. "In addition to the sales increase and the improved gross margin," he said, "first quarter profits were also helped by a 21 percent decline in first quarter interest expense as a result of further debt reduction and lower interest rates." Schuermann said LADD's total debt was reduced by a little over $2 million during the first quarter, despite a $3.7 million increase in net working capital during the quarter. "In short," he said, "we again made substantial progress in the first quarter against all three of our primary financial objectives by virtue of increasing our sales, improving our profit margins and reducing our debt." Commenting on the overall tone of business, Schuermann said, "The current year has started out well for our industry, and furniture retailers around the country have been experiencing fairly robust consumer demand. The economic and financial variables which influence consumer furniture buying patterns are all positive at this point, along with consumer confidence itself - as measured by the monthly Conference Board survey. As a result, we currently see no reason why our industry should not enjoy another excellent year in 1999. 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, 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 governmental 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 wwwladdfurniture.com.