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 HIGH POINT, N.C., Oct. 22 /PRNewswire/ -- LADD Furniture, Inc. (NASDAQ-NMS: LADF) today reported that net sales for the third quarter ended Oct. 2, 1993 increased to $127.3 million this year from $124.6 million in 1992. Net sales for the first nine months of 1993 rose to $397.3 million from $367.7 million in the same period of 1992. Net earnings for this year's third quarter declined to $431,000 or $.02 per share, from $777,000 or $.03 per share a year earlier. For the first nine months, net earnings increased 42 percent, to $4.5 million from $3.2 million in 1992. Per share net earnings for the first nine months increased 33 percent, to $.20 from $.15 a year earlier. The 1992 third quarter and nine-month operating results have been restated to reflect LADD's adoption of Statement of Financial Accounting Standards (SFAS) 109, "Accounting for Income Taxes."
 Commenting on these results, LADD chairman and chief executive officer Richard R. Allen noted that sales and earnings for the first nine months of 1993 remained above their year-earlier levels, despite a relatively weak third quarter this year. Allen said that LADD's third quarter operating performance was adversely affected by a combination of soft consumer demand for higher-priced furniture products, plant downtime taken to control inventories, manufacturing inefficiencies in certain plants and expenses incurred in liquidating discontinued product lines.
 "During this year's third quarter," Allen said, "we initiated several strategic actions to redeploy selected Virginia-based manufacturing assets in order to improve LADD's fundamental long-term profitability. In late June, our American of Martinsville (`AOM') contract business announced a $9 million expansion of its manufacturing operations in Martinsville, Va., consisting of a 100,000 square foot addition to the Martinsville facility and the installation of new, highly-automated production equipment. When this project is completed, all of AOM's contract furniture manufacturing operations will be consolidated into the Martinsville plant. In mid-August, we announced the merger of our AOM residential casegoods business into American Drew and, in connection with that move, discontinued a number of unprofitable residential casegoods lines. These inventories are now in the process of being liquidated. And, in early September, we announced the planned investment of $6 million in LADD's Marion, Va., plant for modernization and the installation of new, automated equipment to manufacture products for the Design Horizons division of Lea Industries."
 Allen continued: "Finally, we have recently initiated a $4 million project which will convert the Chilhowie, Va., plant formerly operated by AOM-Contract to the production of Lea Industries' bedroom and correlated furniture products. Taken together, these strategic actions are designed to reduce overhead and operating costs and reposition highly productive manufacturing assets into those operating units where additional capacity is required to meet current and anticipated growth. When fully implemented, these moves should significantly improve LADD's overall profitability. In the meantime, these actions are causing production inefficiencies within the affected plants and are negatively impacting manufacturing margins."
 Senior vice president and chief financial officer William S. Creekmuir said LADD's long-term debt was $107 million at the end of the third quarter -- $3.5 million below the mid-year 1993 level -- representing 38.3 percent of total capitalization at that date. He noted that the company's inventories were reduced during the quarter by over $3 million, and said additional inventory reductions are anticipated in the final three months of the year.
 Elaborating on the capital expenditures referred to above, Creekmuir said: "We have already spent a total of $16.6 million on capital projects through this year's first nine months and expect the full year 1993 total to exceed $20 million, compared with $9 million in capital spending for all of 1992. While some of these projects are having a short-term negative impact on LADD's operating efficiency, we are excited about the longer-term benefits that will be realized as a direct result of this accelerated capital investment program."
 Headquartered in High Point, N.C., LADD is the fourth largest North American manufacturer of residential furniture and a leading supplier of contract furniture to the guest room, government and health care markets domestically and abroad. LADD sells its broad range of wood, upholstered and metal furniture products under the major brand names American Drew, American of Martinsville, Barclay, Brown Jordan, Clayton Marcus, Daystrom, Fournier, Lea Industries and Pennsylvania House, and markets these products worldwide through LADD International. LADD also owns and operates two support companies, Lea Lumber & Plywood and LADD Transportation. LADD's stock is traded on the over-the-counter National Market System under the NASDAQ symbol LADF.
 Condensed Consolidated Statements Of Earnings (Unaudited)
 Quarter Ended
 Oct. 2, 1993 Sept. 26, 1992(A)
 Net sales $127,297,000 124,610,000
 Earnings before interest
 and income taxes 2,519,000 3,042,000
 Interest expense 1,379,000 1,543,000
 Earnings before income taxes 1,140,000 1,499,000
 Income tax expense 709,000 722,000
 Net earnings $431,000 777,000
 Net earnings per common share $ 0.02 0.03
 Weighted average number of
 common shares outstanding 23,060,462 23,016,054
 Nine Months Ended
 Oct. 2, 1993 Sept. 26, 1992(A)
 Net sales $397,265,000 367,663,000
 Earnings before interest
 and income taxes 12,208,000 11,319,000
 Interest expense 4,144,000 5,871,000
 Earnings before income taxes 8,064,000 5,448,000
 Income tax expense 3,533,000 2,248,000
 Net earnings $ 4,531,000 3,200,000
 Net earnings per common share $ 0.20 0.15
 Weighted average number of
 common shares outstanding 23,051,364 20,875,363
 (A) Both 1992 periods have been restated to reflect the adoption of SFAS 109, "Accounting for Income Taxes," effective Jan. 1, 1989.
 -0- 10/22/93
 /CONTACT: John J. Ong of LADD Furniture, 919-888-6353/

CO: LADD Furniture, Inc. ST: North Carolina IN: REA SU: ERN

SB-CM -- CH007 -- 5750 10/22/93 13:03 EDT
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Publication:PR Newswire
Date:Oct 22, 1993

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