L&P 1Q sales slip, but profit climbs 21.9%
By Larry Thomas -- Furniture Today, May 6, 2007
Carthage, Mo. — Leggett & Platt, the largest supplier of furniture and bedding components, said first-quarter sales fell 2.2% but net income was 21.9% ahead of last year's first quarter.
The company said sales were weak in most of the home-related, aluminum and retail markets it serves. However, its machinery and commercial vehicle businesses, as well as certain international markets, showed some strength.
"We continue to benefit from the restructuring we completed last summer, and we are attaining the expected operational progress despite market weakness," said David Haffner, president and CEO.
Net sales for the quarter were $1.29 billion, while net income came to $75.7 million.
The most recent quarter included income of 7 cents per share from its furniture and bedding foam business, which was sold during the quarter. Last year's first quarter included restructuring charges of 4 cents per share and income of 3 cents per share from the foam business.
Residential furnishings, the largest of Leggett's five business segments, recorded sales of $681.3 million, a decline of 2.6% from last year's first quarter. Only one of the five segments — specialized products — had a sales gain for the quarter.
Karl Glassman, executive vice president and chief operating officer, said the furniture and bedding markets are stronger internationally than domestically. He said in a conference call with securities analysts that bedding components sales, for example, declined in the low single digits domestically, but were up 7% to 10% in offshore markets.
"The first quarter was a departure from what we experienced in the last couple of years in that bedding was okay. It wasn't terribly strong, but it wasn't weak," Glassman told analysts. "But furniture weakened by comparison."
Leggett is projecting total sales from continuing operations to rise 2% to about $5.4 billion in 2007. However, earnings per share are projected at $1.65 to $1.85 — five cents below the earnings guidance issued in January.
The company said the reduction is due to increased steel costs and soft business conditions that are lasting longer than previously expected.
| 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 3/31 | 2007 | 2006 | Change |
| (a) Includes net earnings from discontinued operations of $13.1 million in the 2007 quarter and $5.3 million in the 2006 quarter. (b) Based on average shares outstanding of 183.7 million in the 2007 period and 188.2 million in the 2006 period. |
|||
| Sales | $1,294,300,000 | $1,323,800,000 | (2.2%) |
| Operating income | 106,900,000 | 107,900,000 | (0.9%) |
| Net income (a) | 75,700,000 | 62,100,000 | 21.9% |
| Earnings per share (b) | 0.41 | 0.33 | 24.2% |
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Leggett & Platt sales dip, but earnings rise sharply
Apr 23, 2007
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