L&P bad debt cost up $8.5M due to Spring Air
Staff -- Furniture Today, May 18, 2009
Carthage, Mo. — Leggett & Platt said it has increased its bad debt expense by $8.5 million to reflect its credit exposure with Spring Air, which closed its corporate-owned plants this month.
Leggett said the move will reduce its first-quarter earnings from 6 cents to 2 cents per share. The company had previously reported earnings of $8.9 million on April 22, so the restatement will cut the quarterly profit to roughly $3 million.
In a statement, L&P said it had previously established a "significant bad debt reserve" for Consolidated Bedding, the primary Spring Air manufacturer, but it needed to increase the amount to cover its full exposure.
"Leggett believes that the Consolidated Bedding volume of business will likely be dispersed among Leggett & Platt's other customers," the company said in a press release.
In another move, L&P said it had elected Robert E. Brunner, executive vice president of Illinois Tool Works, to its board. He will serve on the audit committee, and fills a vacancy created when the board was expanded to 10 members.
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