CARTHAGE, Mo., Sept 13, 2010 / Today, Leggett & Platt (NYSE: LEG) announced that it has sold its Storage Products business to SPG International, LLC. The sale completes the divestiture program, a significant part of the company's strategic realignment first introduced to investors in November 2007.
Since implementation of the new strategy, Leggett has sold seven business units for a combined $433 million of after tax cash proceeds, exceeding the original $400 million goal. The divestiture program has reshaped Leggett & Platt by narrowing the company's primary focus to businesses with distinct competitive advantages, value-added engineering and manufacturing operations, and significant barriers to entry.
CEO and President David S. Haffner commented, "The successful completion of our divestiture program played a crucial role in enabling us to keep our promise to shareholders: it provided cash that we have used to repurchase shares of our stock, increase quarterly dividends, and further strengthen our balance sheet. Since implementing our new strategy at the beginning of 2008, we have generated Total Shareholder Return of 42%, placing us in the top 5% of the S&P 500 companies."
"Leggett is a smaller company today, with over $3 billion of revenue expected in 2010, compared to $5.5 billion at our peak. Approximately one-half of that sales decrease resulted from the divestiture program, and the other half was due to the economic downturn. The benefit of our focused approach is evidenced by improving margins despite the significant, economy-induced sales decline. We are well poised to benefit when the economy recovers, and have ample production capacity that should generate healthy incremental margins as sales rebound."
Going forward, Leggett will continue to actively manage its business portfolio, and will assign each business unit's role (Grow, Core, Fix, or Divest) as part of the company's annual strategic planning process. Currently, no additional material business units are slated for divestiture.
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.
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