CARTHAGE, MO -- Diversified manufacturer Leggett & Platt, whose holdings include furniture hardware and store fixture manufacturing, reported second quarter 2011 sales of $945 million, up 8% versus the prior year.
The company noted that its sales growth has resulted in "little incremental profit" due to inflation from price increases implemented to recover higher costs; currency exchange rates, which accounted for 6% growth; and trade sales at the company's steel mill, which provided 2% growth. Volumes declined in several key residential markets as a result of weak consumer demand, but Leggett & Platt said it experienced continued to grow in automotive and office components.
Leggett & Platt President and CEO David Haffner said, "Operationally, it was a reasonably good quarter. Gross profit improved by $2 million versus second quarter last year, despite lack of demand growth. EBIT, however, was lower than in 2010 due to unusually high SG&A costs, which included items that will not recur. We continue to strive for annual SG&A costs at or below 10% of sales.
"When demand improves, given our spare production capacity, our sales can rebound to nearly $4.5 billion without the need for significant investment in plant expansion. As a result, we have meaningful operating leverage that should benefit future earnings," Haffner said.
Leggett & Platt said it anticipates 2011 sales of approximately $3.5-3.7 billion, an increase of 4% to 10% versus 2010, including expected inflation of approximately 4%.
Posted by Rich Christianson
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