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Larry Thomas

Leggett & Platt sales flat but earnings up sharply in fourth quarter

CARTHAGE, Mo. — Furniture and bedding components supplier Leggett & Platt said fourth-quarter sales were essentially even with the previous year's fourth quarter, but profits were well ahead of the comparable period due largely to unit volume growth and a one-time tax benefit.

Net income totaled $73.5 million or 50 cents per share, up from $8.7 million or 6 cents per share in the final quarter of 2011.

The company said the most recent quarter included a tax benefit of about $27 million or 18 cents per share, from the elimination of a valuation allowance on its deferred Canadian tax assets.

Last year's fourth quarter included a restructuring charge of 16 cents per share. Excluding the 2012 tax benefit and 2011 restructuring charge, Leggett said earnings per share rose to 32 cents per share from 22 cents per share in last year's fourth quarter.

Worldwide sales totaled $853 million for the quarter, compared with $854.1 million in the same quarter in 2011. Sales in the company's residential furnishings segment were up 4.2% to $454.8 million.

For the full year, sales were $3.72 billion, an increase of 2.3% from $3.64 billion in 2011. Of that total, the residential furnishings segment registered an increase of 3.7% to $1.9 billion.

The company said unit volume was up 3% and acquisitions (net of divestitures) contributed 1% to sales. Those increases were partially offset by lower rod mill trade sales and changes in currency rates.

Net income for 2012 was $248.2 million or $1.70 per share. That was up from $153.3 million or $1.04 per share in 2011.

"Operationally, I'm very satisfied with the notable progress we made during 2012," said David Haffner, president and CEO. "Though the economy held sales growth to a modest level, we significantly improved EBIT (earnings before interest and taxes) and expanded EBIT margin by 270 basis points."

He also said the company generated "more than enough cash from operations to readily fund dividends and capital expenditures" and noted that Leggett continues to maintain excess production capacity. The excess capacity will position the company for earnings growth as the economy expands, he said.

For 2013, Leggett is forecasting sales of $3.75 billion to $3.95 billion, an increase of 1% to 6%. Earnings per share are projected at $1.50 to $1.75.

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