LADD Reports Strong 1997 Fourth Quarter And Improved Full Year Operating Results

Furniture World Magazine

LADD Furniture, Inc. reported significantly improved earnings for both the final quarter of fiscal 1997 and the full year, as fourth quarter net sales rose 24 percent from a year earlier, to $146.6 million, and full year sales increased 6 percent, to $525.5 million. Excluding former LADD businesses which were divested during 1996, full year 1997 net sales increased 9 percent compared to the prior year. Net earnings for the final three months of 1997 totaled $2.4 million, or $.31 per share, up from $1.6 million, or $0.21 per share in the year-earlier quarter - a 51 percent increase in total dollar earnings and a 48 percent increase on a per share basis. For the full year 1997, net earnings rose to $6.3 million, or $0.81 per share, compared to a loss of $2.4 million, or $0.32 per share in the prior year. LADD president and CEO Fred Schuermann said the fourth quarter sales gain was helped by an extra week in the 1997 fiscal period, and an almost 50% sales increase recorded by the company's American of Martinsville Contract furniture business. "But we also achieved strong growth for the fourth quarter in our residential furniture sales," Schuermann said. "Even after adjusting for the extra week in 1997's fiscal fourth quarter, our residential casegoods and upholstery volumes each increased in the 9-10 percent range compared to the final three months of 1996. We attribute this accelerated top line growth to a series of very successful new product introductions throughout LADD last year, in addition to a somewhat improved industry environment in the final quarter." He continued, "I am pleased to report that 1997 was LADD's most profitable year since 1989. This is a tribute to the combined efforts and hard work last year of our management team and our more than 6,000 employees. Although progress has been achieved, we still have a long way to go. But I strongly believe the LADD turnaround is gaining momentum, and that we are on course to achieve significantly improved operating results in 1998 and beyond. Our primary focus will continue to be on strengthening and improving our product line, our marketing efforts, our quality standards and our customer satisfaction levels. Additionally, we are quite encouraged by the order improvement that has characterized the U.S. retail furniture business in the past month or so." Schuermann also noted that, despite the strong shipment levels of the fourth quarter, LADD's backlog at year-end 1997 was 30 percent higher than it was at the start of the year. LADD executive vice president and CFO William S. Creekmuir reported that the company's total debt at the end of 1997 was $125.4 million, down from $131.0 million at the start of the year and said, "The strengthening of our balance sheet continues to be a primary management objective for 1998, along with enhancing our market position within the industry and profitably growing our existing furniture brands." Creekmu* said total inventories were reduced by almost $2 million during the final quarter of 1997, "And, importantly," he concluded, "shareholders' equity increased by $7 million during 1997, to $130.9 million at year-end. This marked the first such yearly increase for the company's share owners since fiscal 1994." Headquartered in Greensboro, 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 assisted-living facilities, retirement homes and governmental 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. For more information contact: E-mail: jong@laddnet.com