L&P 4Q sales dip 2.2%; refund boosts income
Larry Thomas -- Furniture Today, February 4, 2007
Carthage, Mo. — Leggett & Platt, the largest supplier of furniture and bedding components, said fourth-quarter sales fell 2.2% but net income jumped 54.5%.
The company said the income jump was due to a one-time gain from a refund of Canadian lumber duties, as well as lower restructuring costs and other expenses.
Fourth-quarter companywide sales totaled $1.31 billion, compared with $1.34 billion in the 2005 fourth quarter. Net income was $70 million, or 38 cents per share, compared with $45.3 million, or 24 cents per share, in the same period in 2005.
The only business segment to record a fourth-quarter sales gain was the aluminum products segment, which eked out a 0.2% increase. The company's largest segment, residential furnishings, had a sales decline of 3.1% to $659.5 million.
For the year, total sales rose 3.9% from 2005 to $5.5 billion. Net income for the year was $300.3 million, or $1.61 per share, a 19.5% increase over 2005, when income amounted to $251.3 million, or $1.30 per share.
The residential furnishings segment, which includes bedding and upholstered furniture components, had 2006 sales of $2.8 billion, a 5.6% increase over 2005 that was largely attributed to acquisitions.
During a conference call with securities analysts, Leggett executives said demand for bedding components was weak throughout 2006, and was especially soft the last four months of the year.
Karl Glassman, executive vice president of operations, said bedding components sales also were hampered by price competition and customers buying lower-priced products.
"We have aggressively protected our bedding market share," Glassman told analysts. "We are forecasting unit growth for 2007."
Glassman said sales of upholstered furniture components such as springs and reclining chair mechanisms grew last year, and are forecast to show more growth this year.
| Leggett & Platt | |||
|---|---|---|---|
| Owns Fashion Bed Group (Berkshire, Dresher and J/B Ross), Harris-Hub, Duro-Metal, Bedline and L&P Consumer Products Division | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/31 | 2006 | 2005 | Change |
| (a) Based on average shares outstanding of 184.8 million in the 2006 quarter, 189 million in the 2005 quarter, 186.8 million in the 2006 year and 193.6 million in the 2005 year. |
|||
| Sales | $1,310,500,000 | $1,339,600,000 | (2.2%) |
| Operating income | 124,000,000 | 97,000,000 | 27.8% |
| Net income | 70,000,000 | 45,300,000 | 54.5% |
| Earnings per share (a) | 0.38 | 0.24 | 58.3% |
| Year ended 12/31 | 2006 | 2005 | Change |
| Sales | $5,505,400,000 | $5,299,300,000 | 3.9% |
| Operating income | 508,900,000 | 444,000,000 | 14.6% |
| Net income | 300,300,000 | 251,300,000 | 19.5% |
| Earnings per share (a) | 1.61 | 1.30 | 23.8% |
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