CARTHAGE, MO -

•1Q EPS was $.37, a 12% increase versus the prior year

•1Q sales were $919 million, 1% lower than in prior year

•Raising low end of 2014 EPS guidance; anticipate EPS of $1.70 - 1.85 on sales of $3.85 - 4.05 billion

Diversified manufacturer Leggett & Platt reported earnings of $.37 per share, a first quarter record for EPS from Continuing Operations. In 2013, first quarter EPS was $.33. The 2014 EPS improvement reflects an improved mix of sales across business units and a modest gain on sale of a building. These factors were partially offset by the earnings impact of lower same location sales.

First quarter 2014 sales were $919 million, a 1% (or $14 million) decrease versus the prior year. Same location sales declined 3% due to lower volumes in Store Fixtures and Commercial Vehicle Products, and weather-related demand weakness in several other businesses during the first two months of the year. Acquisitions improved sales by 2%.

EBIT margin improved 50 basis points versus first quarter last year, from 8.5% to 9.0%. Excluding the gain on sale of a building, margin remained at the percentage level achieved in the first quarter 2013, despite lower sales.

CEO Comments

Board Chair and CEO David S. Haffner commented, "In spite of the unusually harsh weather, we are pleased with our start to 2014. Though sales declined, our EBIT margin held ground, and we exited the quarter with improving demand. We are sufficiently encouraged by recent strength in key markets to raise the low end of our EPS guidance.

"Since 2007, our primary long-term financial goal has been to consistently rank in the top third of the S&P 500 companies for Total Shareholder Return (TSR[1]) as measured over rolling 3-year periods. For the three year period that began January 1, 2012, we have so far (over the last 28 months) generated TSR performance that places us just above the midpoint of the S&P 500 companies, but shy of our goal.

"We continue to maintain our strong financial base. At quarter's end we had over $450 million available under our existing commercial paper program. We ended the quarter with net debt to net capital at 31.5%, near the conservative end of our long-term 30%-40% target range.

"Given anticipated sales growth, in 2014 we expect another year of record earnings from Continuing Operations. And as we look beyond 2014, we are encouraged by the positive momentum of several businesses including Automotive, Aerospace, Bedding, Furniture, and Office."

Dividends and Stock Repurchases

In February, Leggett & Platt's Board of Directors declared a $.30 first quarter dividend, one cent higher than last year's first quarter dividend. Thus, 2014 marks the 43rd consecutive annual dividend increase for the company, with a compound annual growth rate of 13%. Only one other S&P 500 company can claim as high a rate of dividend growth for as many years. Leggett & Platt is proud of its dividend record, and plans to continue it.

At yesterday's closing share price of $33.39, the indicated annual dividend of $1.20 per share generates a dividend yield of 3.6%, the fourth-highest dividend yield among the 54 stocks of the S&P 500 Dividend Aristocrats.

During the first quarter the company purchased 1.5 million shares of its stock at an average price of $30.25, and issued 1.0 million shares. Shares outstanding decreased by 0.5 million, to 138.9 million.

2014 Guidance Narrowed

For 2014, Leggett anticipates accelerated sales growth, EBIT margin improvement, and record operating EPS. The company is raising the low end of its prior EPS guidance, and now projects 2014 EPS of $1.70 - 1.85 on sales of $3.85 - 4.05 billion, or 3% - 8% growth.

Cash from operations in 2014 should again exceed $350 million. Capital expenditures are expected to be roughly $100 million, and dividend payments should approximate $170 million.

As has been the company's practice, after funding dividends and capital expenditures, any remaining cash flow will likely be targeted toward acquisitions or stock repurchases. Potential acquisitions must meet stringent strategic and financial criteria; should no acquisitions come to fruition, the company has standing authorization from the Board of Directors to repurchase up to 10 million shares each year. No specific share repurchase commitment or timetable has been established; however, the company currently anticipates the purchase of between 3 and 6 million shares during 2014, and the issuance of approximately 2 million shares via employee benefit plans.

Over the last few years, Leggett & Platt significantly reduced its fixed cost structure, but purposely retained spare production capacity. Accordingly, unit sales volumes can rebound appreciably without the need for large capital investment. As a result, the company has meaningful operating leverage that should significantly benefit future earnings as market demand rebounds.

SEGMENT RESULTS – First Quarter 2014 (versus the same period in 2013)

Residential Furnishings – Total sales increased $12 million, or 2%, with volume growth in Furniture Components and International Spring partially offset by soft demand in U.S. Spring. EBIT (earnings before interest and income taxes) increased $9 million primarily due to higher sales and cost improvements. A $4 million gain on sale of a building in 2014 was largely offset by the non-recurrence of last year's $3 million hurricane-related insurance gain.

Commercial Fixturing & Components – Total sales decreased $26 million, or 22% largely due to the non-recurrence, as anticipated, of certain major Store Fixture retailer programs in early 2013. EBIT declined $4 million due to lower sales.

Industrial Materials – Total sales decreased $12 million, or 5%, largely from lower unit volumes in wire and rod. EBIT decreased $11 million from lower sales, reduced metal margin, and weather-related cost impacts.

Specialized Products – Total sales increased $12 million, or 6%, due to strong demand for the company's Automotive components; this was partially offset by reduced sales in the CVP business. EBIT increased $9 million due to increased sales and non-recurrence of a $5 million litigation accrual last year.

Source: Leggett & Platt