LADD operating companies, LADD Transportation
provides approximately 30% of LADD's out-bound shipping
requirements for finished products and also hauls a portion of
the Company's in-bound raw materials and supplies. LADD
Transportation has received certain contract carrier rights from
the Interstate Commerce Commission and markets its transportation
services to independent customers.
Marketing and Major Customers
The Company's operating entities generally market under
their own trade names. The general marketing practice followed
in the furniture industry and by the Company is to exhibit
products at national and regional furniture markets.
Internationally, the Company markets its products primarily
through LADD International, a corporate marketing unit formed to
coordinate the worldwide marketing efforts of LADD's operating
companies.
The Company also sells its furniture products directly and
through approximately 425 independent sales representatives to a
broad variety of customers, including retail furniture chains,
national general retailers, department stores, independent
furniture retailers, mail orderglass, steel, steel
springs, aluminum, and high pressure laminates. The wood species
include cherry, oak, maple, white pine, poplar, and other
American species, and imports such as rattan, guatambue and
mahogany. The Company believes that its sources of supply for
these materials are adequate and that it is not dependent on any
one supplier. However, in 1992 and 1993, dramatic escalation of
costs of certain lumber species such as cherry and maple
negatively impacted the Company's gross margins.
The Company's plants are heated by furnaces using gas, fuel
oil, wood waste, and other scrap material as energy sources. The
furnaces located at a majority of the wood manufacturing plants
have been adapted so that they can use alternate energy sources,
and the Company has been able to fuel these furnaces principally
by wood wastes. The Company's plants use electrical energy
purchased from local