Press Releases
| Leggett & Platt Posts Second Quarter EPS of $.34 |
|
CARTHAGE, Mo., July 22, 2010 /PRNewswire via COMTEX/ --
Diversified manufacturer Leggett & Platt reported second quarter earnings per diluted share of $.34. In the second quarter of 2009, earnings were $.12 per share (including a $.04 per share non-cash write-down of a note received in the 2008 aluminum segment divestiture). Earnings increased primarily as a result of higher sales. Sales from Continuing Operations were $874 million, 15% (or $117 million) higher than in the second quarter of 2009. Unit volumes improved approximately 14%. Progress Continuing President and CEO David S. Haffner commented, "We are encouraged to see continued sales growth. This quarter's 15% growth, and the associated higher capacity utilization, led to meaningful earnings improvement. Gross margin was again over 20%, and EBIT margin approached 10%. As a result, we are raising our full year sales and EPS guidance; the new ranges are basically equivalent to the upper half of our prior ranges. Additionally, our cash flow remains strong and debt levels remain low. We acknowledge the recent weakness in both investor and consumer sentiment, but remain guardedly optimistic. "Near term, growth should significantly exceed our 4-5% long-term goal as the economy recovers. With our excess production capacity, sales can rebound approximately 25%-33% (to $4 billion or more) before we anticipate the need for significant capital investment. We expect an incremental margin of 25-35% as unit volumes increase, at least until sales exceed $4 billion; as a result, EBIT margin should improve notably as sales grow. "Long term, we believe that modest sales growth, continued margin improvement, our dividend yield, and stock buybacks will enable us to achieve our goal of generating Total Shareholder Return (TSR) that ranks within the top 1/3 of the S&P 500. Since implementing our new strategy two and one-half years ago, we have achieved TSR(1) of 36%, which ranks within the top 5% of all S&P 500 companies. TSR for the S&P 500 index was negative 23% over that identical time period." Dividend and Stock Repurchases In May, Leggett & Platt's Board of Directors declared a $.26 second quarter dividend, one cent higher than last year's second quarter dividend. Thus, 2010 is on track to mark the 39th consecutive annual dividend increase for the company, with a compound annual growth rate of approximately 14% during that period. At yesterday's closing share price of $20.54, the indicated annual dividend of $1.04 per share generates a dividend yield of 5.1%. During the second quarter, the company repurchased 2.3 million shares of its stock at an average price of $23.17 per share, and issued 1.0 million shares. During the first half of 2010, the company repurchased 4.2 million shares and issued 2.0 million shares; as a result, shares outstanding decreased to 146.6 million (which is 16%, or 28 million shares, lower than it was three years ago). For the full year, the company anticipates repurchasing a total of 5 to 7 million shares of its stock (subject to the amount of cash flow generated from operations, stock price fluctuations, and other potential uses of cash) and issuing approximately 3 million shares (primarily for employee purchases of stock, either directly or through option exercise). As a result, the number of outstanding shares is anticipated to decline by up to 4 million shares (or 3%) during 2010. The company has standing authorization from the Board of Directors to repurchase up to 10 million shares each year, but has established no specific repurchase commitment or timetable. 2010 Outlook Improved Leggett anticipates full year 2010 sales of approximately $3.2 - 3.4 billion, and EPS of $1.10 - 1.30. At the midpoint of its sales and EPS guidance the company would generate an EBIT margin of about 9.4%. The lower end of the ranges allow for some weakening in the economy. Cash from operations should exceed $300 million for the full year. Uses of cash include approximately $75 million for capital expenditures and $155 million for dividends. LIFO All of Leggett's segments use the FIFO (first-in, first-out) method for valuing inventories. An adjustment is made at the corporate level to convert about 60% of the inventories to the LIFO (last-in, first-out) method. Since the LIFO benefit is not recorded at the segment level, 2009 segment EBIT margins were unusually low. Earnings for the second quarter 2010 reflect a LIFO expense of $2.2 million, compared to a LIFO benefit of $19.0 million in 2Q 2009. Furthermore, LIFO created significant variability in 2009 quarterly earnings. Steel deflation negatively impacted segment earnings for the first half of 2009. This impact was offset by a LIFO benefit at the corporate level, but that benefit was spread across all four quarters. As a result, the LIFO benefit in 3Q 2009 was $16.0 million, and in 4Q 2009 was $14.8 million. LIFO-related impacts are not anticipated to be as significant during 2010. SEGMENT RESULTS - Second Quarter 2010 (versus 2Q 2009) Residential Furnishings - Total sales increased $37 million, or 9%, as a result of improved market demand; unit volume increased 8%. EBIT (earnings before interest and income taxes) increased $21 million due to improved sales, price discipline, and cost structure improvements. Commercial Fixturing & Components - Total sales increased $10 million, or 8%, due to new programs with office furniture manufacturers and our strong position with value-oriented retailers. EBIT increased $7 million due to sales growth and cost reductions. Industrial Materials - Total sales increased $42 million, or 28%; unit volume was 20% higher, and was augmented by higher unit prices (from steel inflation). EBIT increased $3 million, with the impact of higher volume largely offset by lower metal margins (reflecting higher costs for scrap steel). Specialized Products - Total sales increased $36 million, or 30%, largely due to significantly improved automotive demand. EBIT increased $17 million due to higher volume and cost reductions. Slides and Conference Call A set of slides containing summary financial information is available from the Investor Relations section of Leggett's website at www.leggett.com. Management will host a conference call at 8:00 a.m. Central (9:00 a.m. Eastern) on Friday, July 23 to discuss quarterly results, annual guidance, and related matters. The webcast can be accessed (live or replay) from Leggett's website. The dial-in number is (201) 689-8341; there is no passcode. Third quarter results will be released after the market closes on October 21; a conference call will occur the next day. FOR MORE INFORMATION: Visit Leggett's website at www.leggett.com. COMPANY DESCRIPTION: Leggett & Platt (NYSE: LEG) is a diversified manufacturer (and member of the S&P 500) that conceives, designs and produces a broad variety of engineered components and products that can be found in most homes, offices, and automobiles. The company serves a broad suite of customers that comprise a "Who's Who" of U.S. manufacturers and retailers. The 127-year-old firm is comprised of 19 business units, 20,000 employee-partners, and more than 140 manufacturing facilities located in 18 countries. Leggett & Platt is the leading U.S. manufacturer of: a) components for residential furniture and bedding; b) components for office furniture; c) drawn steel wire; d) automotive seat support and lumbar systems; e) carpet underlay; f) power foundations; and g) bedding industry machinery. FORWARD-LOOKING STATEMENTS: Statements in this release that are not historical in nature are "forward-looking." These statements involve uncertainties and risks, including the company's ability to improve operations and realize cost savings, price and product competition from foreign and domestic competitors, changes in demand for the company's products, cost and availability of raw materials and labor, fuel and energy costs, future growth of acquired companies, general economic conditions, foreign currency fluctuation, litigation risks, and other factors described in the company's Form 10-K. Any forward-looking statement reflects only the company's beliefs when the statement is made. Actual results could differ materially from expectations, and the company undertakes no duty to update these statements. (1) TSR = (Change in Stock Price + Dividends Received) / Beginning Stock Price; assumes dividends are reinvested; measured from 12-31-07 through 7-21-10. LEGGETT & PLATT July 22, 2010
-------------
RESULTS OF OPERATIONS SECOND QUARTER
--------------------- --------------
(In millions, except per share
data) 2010 2009 Change
------------------------------ ---- ---- ------
Net sales (from continuing
operations) $874.3 $757.4 15%
Cost of goods sold 694.6 610.2
----- -----
Gross profit 179.7 147.2
Selling & administrative
expenses 88.8 89.0 (0%)
Amortization 4.9 5.5
Other expense (income), net 0.9 11.9
--- ----
Earnings before interest and
taxes 85.1 40.8 109%
Net interest expense 8.0 8.1
--- ---
Earnings before income taxes 77.1 32.7
Income taxes 23.5 13.6
---- ----
Net earnings from continuing
operations 53.6 19.1
Discontinued operations, net
of tax (1) 0.5 0.1
--- ---
Net earnings 54.1 19.2
Less net income from non-
controlling interest (1.4) (0.2)
---- ----
Net earnings attributable to
L&P $52.7 $19.0 177%
===== =====
Earnings per diluted share
From continuing operations $0.34 $0.12
From discontinued operations $0.00 $0.00
Net earnings per diluted share $0.34 $0.12 192%
Shares outstanding
Common stock (at end of
period) 146.6 156.3
Basic (average for period) 151.5 161.5
Diluted (average for period) 153.8 161.8
CASH FLOW SECOND QUARTER
--------- --------------
(In millions) 2010 2009 Change
------------- ---- ---- ------
Net earnings $54.1 $19.2
Depreciation and amortization 29.3 33.4
Working capital decrease
(increase) (30.4) 88.4
Asset Impairment 0.0 0.3
Other operating activity 13.8 32.3
---- ----
Net Cash from Operating
Activity $66.8 $173.6 (62%)
Additions to PP&E (16.5) (29.8) (45%)
Purchase of companies, net of
cash 0.0 0.0
Proceeds from asset sales 0.8 2.8
Dividends paid (38.5) (39.2)
Repurchase of common stock,
net (39.8) (11.6)
Additions (payments) to debt,
net 27.0 (41.2)
Other (3.5) 7.4
---- ---
Increase (Decr.) in Cash &
Equiv. $(3.7) $62.0
===== =====
FINANCIAL POSITION 30-Jun
------------------ ------
(In millions) 2010 2009 Change
------------- ---- ---- ------
Cash and equivalents $243.5 $222.2
Receivables 537.2 492.7
Inventories 451.5 411.1
Held for sale 18.7 25.3
Other current assets 56.1 68.9
---- ----
Total current assets 1,307.0 1,220.2 7%
Net fixed assets 624.6 685.6
Held for sale 27.3 32.4
Goodwill and other assets 1,120.4 1,131.2
------- -------
TOTAL ASSETS $3,079.3 $3,069.4 0%
======== ========
Trade accounts payable $256.9 $186.4
Current debt maturities 10.0 17.0
Held for sale 5.0 5.6
Other current liabilities 299.7 293.3
----- -----
Total current liabilities 571.6 502.3 14%
Long term debt 854.8 772.8 11%
Deferred taxes and other
liabilities 164.6 128.6
Equity 1,488.3 1,665.7 (11%)
------- -------
Total Capitalization 2,507.7 2,567.1
TOTAL LIABILITIES & EQUITY $3,079.3 $3,069.4
======== ========
RESULTS OF OPERATIONS YEAR TO DATE
--------------------- ------------
(In millions, except per share
data) 2010 2009 Change
------------------------------ ---- ---- ------
Net sales (from continuing
operations) 1,690.7 $1,475.5 15%
Cost of goods sold 1,345.5 1,203.3
------- -------
Gross profit 345.2 272.2
Selling & administrative
expenses 181.1 190.9 (5%)
Amortization 9.9 9.8
Other expense (income), net (8.1) 12.8
---- ----
Earnings before interest and
taxes 162.3 58.7 176%
Net interest expense 16.2 16.0
---- ----
Earnings before income taxes 146.1 42.7
Income taxes 45.0 20.3
---- ----
Net earnings from continuing
operations 101.1 22.4
Discontinued operations, net
of tax (1) (0.1) (0.2)
---- ----
Net earnings 101.0 22.2
Less net income from non-
controlling interest (3.2) 0.1
---- ---
Net earnings attributable to
L&P $97.8 $22.3 339%
===== =====
Earnings per diluted share
From continuing operations $0.64 $0.14
From discontinued operations ($0.00) $0.00
Net earnings per diluted share $0.63 $0.14 360%
Shares outstanding
Common stock (at end of
period) 146.6 156.3
Basic (average for period) 152.0 161.3
Diluted (average for period) 154.1 161.6
CASH FLOW YEAR TO DATE
--------- ------------
(In millions) 2010 2009 Change
------------- ---- ---- ------
Net earnings $101.0 $22.2
Depreciation and amortization 61.2 64.8
Working capital decrease
(increase) (70.3) 139.9
Asset Impairment 2.3 0.7
Other operating activity 23.7 60.8
---- ----
Net Cash from Operating
Activity $117.9 $288.4 (59%)
Additions to PP&E (30.0) (51.5) (42%)
Purchase of companies, net of
cash (0.4) (0.3)
Proceeds from asset sales 10.8 5.8
Dividends paid (77.2) (78.3)
Repurchase of common stock,
net (71.8) (26.0)
Additions (payments) to debt,
net 42.5 (92.7)
Other (8.8) 12.1
---- ----
Increase (Decr.) in Cash &
Equiv. $(17.0) $57.5
====== =====
FINANCIAL POSITION
------------------
(In millions)
-------------
Cash and equivalents
Receivables
Inventories
Held for sale
Other current assets
Total current assets
Net fixed assets
Held for sale
Goodwill and other assets
TOTAL ASSETS
Trade accounts payable
Current debt maturities
Held for sale
Other current liabilities
Total current liabilities
Long term debt
Deferred taxes and other
liabilities
Equity
Total Capitalization
TOTAL LIABILITIES & EQUITY
(1) Primarily includes: Coated Fabrics (formerly in Residential
Furnishings); Storage Products (formerly in Commercial Fixturing &
Components).
LEGGETT & PLATT July 22, 2010
-------------
SEGMENT RESULTS SECOND QUARTER
--------------- --------------
(In millions) 2010 2009 Change
---- ---- ------
External Sales
--------------
Residential Furnishings $455.4 $418.3 8.9%
Commercial Fixturing &
Components 140.7 130.6 7.7%
Industrial Materials 132.3 102.9 28.6%
Specialized Products 145.9 105.6 38.2%
Total $874.3 $757.4 15.4%
====== ====== ====
Inter-Segment Sales
-------------------
Residential Furnishings $2.0 $2.0
Commercial Fixturing &
Components 1.1 0.8
Industrial Materials 62.4 49.6
Specialized Products 10.1 14.3
Total $75.6 $66.7
===== =====
Total Sales
-----------
Residential Furnishings $457.4 $420.3 8.8%
Commercial Fixturing &
Components 141.8 131.4 7.9%
Industrial Materials 194.7 152.5 27.7%
Specialized Products 156.0 119.9 30.1%
Total $949.9 $824.1 15.3%
====== ====== ====
EBIT
----
Residential Furnishings $44.9 $24.1 86%
Commercial Fixturing &
Components 8.7 1.7 412%
Industrial Materials 16.8 13.8 22%
Specialized Products 18.8 1.7 1006%
Intersegment eliminations and
other (1.9) (19.5)
Change in LIFO reserve (2.2) 19.0
Total $85.1 $40.8 109%
===== ===== ===
Basis
EBIT Margin (1) Pts
--------------- ------
Residential Furnishings 9.8% 5.7% 410
Commercial Fixturing &
Components 6.1% 1.3% 480
Industrial Materials 8.6% 9.0% (40)
Specialized Products 12.1% 1.4% 1070
Overall from Continuing
Operations 9.7% 5.4% 430
=== === ===
SEGMENT RESULTS YEAR TO DATE
--------------- ------------
(In millions) 2010 2009 Change
---- ---- ------
External Sales
--------------
Residential Furnishings $887.7 $829.9 7.0%
Commercial Fixturing &
Components 281.4 245.0 14.9%
Industrial Materials 247.6 207.2 19.5%
Specialized Products 274.0 193.4 41.7%
Total $1,690.7 $1,475.5 14.6%
======== ======== ====
Inter-Segment Sales
-------------------
Residential Furnishings $4.1 $4.4
Commercial Fixturing &
Components 2.1 1.9
Industrial Materials 124.2 110.2
Specialized Products 18.4 30.9
Total $148.8 $147.4
====== ======
Total Sales
-----------
Residential Furnishings $891.8 $834.3 6.9%
Commercial Fixturing &
Components 283.5 246.9 14.8%
Industrial Materials 371.8 317.4 17.1%
Specialized Products 292.4 224.3 30.4%
Total $1,839.5 $1,622.9 13.3%
======== ======== ====
EBIT
----
Residential Furnishings $94.0 $17.0 453%
Commercial Fixturing &
Components 16.6 (1.6) 1138%
Industrial Materials 30.2 26.8 13%
Specialized Products 27.2 (6.8) 500%
Intersegment eliminations and
other (1.4) (12.7)
Change in LIFO reserve (4.3) 36.0
Total $162.3 $58.7 176%
====== ===== ===
Basis
EBIT Margin (1) Pts
--------------- ------
Residential Furnishings 10.5% 2.0% 850
Commercial Fixturing &
Components 5.9% (0.6%) 650
Industrial Materials 8.1% 8.4% (30)
Specialized Products 9.3% (3.0%) 1230
Overall from Continuing
Operations 9.6% 4.0% 560
=== === ===
LAST SIX QUARTERS 2009
----------------- ----
Selected Figures 1Q 2Q 3Q 4Q
---------------- --- --- --- ---
Trade Sales ($ million) 718 757 810 770
Sales Growth (vs. prior year) (28.1%) (28.8%) (28.5%) (12.8%)
EBIT ($ million) 18 41 95 77
EBIT Margin 2.5% 5.4% 11.7% 10.0%
Net Earnings -excludes
discontinued oper. ($m) 4 19 55 41
Net Margin -excludes
discontinued operations 0.6% 2.5% 6.8% 5.3%
EPS -continuing operations
(diluted) $0.02 $0.12 $0.34 $0.26
Cash from Operations ($
million) 115 174 142 135
Net Debt to Net Capitalization
------------------------------
Long term debt 793 773 772 789
Current debt maturities 17 17 2 10
Less cash and equivalents (160) (222) (221) (260)
---- ---- ---- ----
Net Debt 650 568 553 539
=== === === ===
Total capitalization 2531 2567 2556 2526
Current debt maturities 17 17 2 10
Less cash and equivalents (160) (222) (221) (260)
---- ---- ---- ----
Net Capitalization 2388 2362 2337 2276
==== ==== ==== ====
Long Term Debt to Total
Capitalization 31.3% 30.1% 30.2% 31.2%
Net Debt to Net Capital 27.2% 24.0% 23.7% 23.7%
LAST SIX QUARTERS 2010
----------------- ----
Selected Figures 1Q 2Q
---------------- --- ---
Trade Sales ($ million) 816 874
Sales Growth (vs. prior year) 13.7% 15.4%
EBIT ($ million) 77 85
EBIT Margin 9.5% 9.7%
Net Earnings -excludes
discontinued oper. ($m) 46 52
Net Margin -excludes
discontinued operations 5.6% 6.0%
EPS -continuing operations
(diluted) $0.30 $0.34
Cash from Operations ($
million) 51 67
Net Debt to Net Capitalization
------------------------------
Long term debt 822 855
Current debt maturities 10 10
Less cash and equivalents (247) (244)
---- ----
Net Debt 585 621
=== ===
Total capitalization 2524 2508
Current debt maturities 10 10
Less cash and equivalents (247) (244)
---- ----
Net Capitalization 2287 2274
==== ====
Long Term Debt to Total
Capitalization 32.6% 34.1%
Net Debt to Net Capital 25.6% 27.3%
Management uses Net Debt to Net Capital to track leverage trends
across time periods with variable levels of cash.
Same Location Sales (vs. prior 2009
year) ----
1Q 2Q 3Q 4Q
------------------------------ --- --- --- ---
Residential Furnishings (19%) (23%) (23%) (9%)
Commercial Fixturing &
Components (38%) (29%) (28%) (25%)
Industrial Materials (22%) (38%) (41%) (26%)
Specialized Products (38%) (33%) (27%) (6%)
Overall from Continuing
Operations (27%) (28%) (28%) (13%)
Same Location Sales (vs. prior 2010
year) ----
1Q 2Q
------------------------------ --- ---
Residential Furnishings 5% 9%
Commercial Fixturing &
Components 23% 8%
Industrial Materials 8% 29%
Specialized Products 31% 30%
Overall from Continuing
Operations 14% 16%
(1) Segment margins calculated on Total Sales. Overall company
margin calculated on External Sales.
nm = not meaningful
CONTACT: Investor Relations, (417) 358-8131 or [email protected] David M. DeSonier, Vice President of Strategy and Investor Relations Susan R. McCoy, Director of Investor Relations SOURCE Leggett & Platt Incorporated |
Have something to say? Share your thoughts with us in the comments below.