Ladd reports 4th quarter revenue decline; plans to acquire Pilliod.
Allen cited the discontinuation of certain American of Martinsville residential furniture lines, and, continued sales weakness at Pennsylvania House -- LADD's upper medium-priced furniture manufacturing company as reasons for the decline.
He said the surge in housing activity and increased consumer confidence will help to improve future sales.
Allen said LADD also expects its 1994 profitability to benefit from plant restructuring in Virginia, a $20 million-plus capital investment program, better industry pricing, and the acquisition of Pilliod Cabinet Co.
The estimated $54 million acquisition of Pilliod was expected to be completed in January. The purchase price includes about $30 million in debt LADD will assume. The transaction is subject to the satisfactory completion of environmental and financial due diligence and approval under the Hart, Scott Rodino Act. Pilliod was recently cited by the U.S. Environmental Protection Agency for missing a deadline for reporting toxic chemicals and has proposed fining the company $67,909. A decision on whether the fine will be approved is still under negotiation.
Pilliod has annual sales of $80 million, employs approximately 1,000 people and operates plants in Nicholas, S.C.; Selma, Ala.; and Swanton, Ohio. It makes promotionally priced residential wood furniture under the Pilliod and Symmetry brand names.
LADD also has been restructuring a number of its plants. In late June, American of Martinsville (AOM) announced a $9 million expansion of its manufacturing operations in Martinsville, Va. The expansion consists of a 100,000-square-foot addition to its facility and installation of new highly automated production equipment. When completed, all of AOM's contract furniture manufacturing operations will be consolidated into the Martinsville plant.
LADD also merged its AOM case-goods business into American Drew and discontinued a number of unprofitable residential case-goods lines. The company is planning on investing $6 million at it's Marion, Va., plant and $4 million at its Chilhowie, Va., plant which will then be used to produce bedroom and correlated furniture products under LADD's Lea Industries division.
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|Title Annotation:||Ladd Furniture Inc.; Pilliod Co.|
|Publication:||Wood & Wood Products|
|Date:||Feb 1, 1994|
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