L&P 3Q sales dip 3.1%
By Furniture Today Staff -- Furniture Today, October 21, 2007
Carthage, Mo. — Citing continued weakness in its markets, components giant Leggett & Platt said third-quarter sales of $1.33 billion were down 3.1% from the comparable period last year, while earnings tumbled 21.8% to $65.7 million.
"We expect this market softness to continue through the fourth quarter," said President and CEO David Haffner.
Leggett is forecasting earnings of 18 cents to 26 cents per share in the fourth quarter, after a charge of seven cents per share for restructuring-related costs, compared with earnings of 38 cents per share in 2006's final period.
Sales from continuing operations are projected at about $1.23 billion, down about 3% from a year earlier.
Meanwhile, Haffner said management is nearing completion of its "in-depth strategic review of our business portfolio" and will report results to its board in early November. The company intends to release its strategic plan Nov. 13 and discuss it with institutional investors in New York the following day.
In the third quarter, the company said, same-location sales declined 5% from a year ago, partly offset by a 2% net increase in revenue from acquisitions.
"Our balance sheet and cash flow continue to be very strong," said Haffner, adding Leggett expects to generate about $650 million in cash this year, which it will spend on dividends, maintenance capital, share buybacks and growth. Leggett said it bought back 5 million shares in the third period, the highest quarterly total in company history.
In the residential furnishings segment, third-quarter sales from continuing operations declined by 7.1% from a year earlier to $621.2 million, the company said. Acquisitions added about $9 million to sales but were more than offset by an 8% decline in same-location sales. Earnings before interest and taxes in the segment fell 35% to $52.6 million.
Karl Glassman, executive vice president and chief operating officer, said demand continues to be soft in the U.S. bedding and furniture markets but is strong outside the country.
He described bedding as "extremely soft," noting that domestic bedding component sales slid 3.2% during the quarter. "The top end of the bedding industry is soft," he said. "The middle is softer yet."
| 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 9/30 | 2007 | 2006 | Change |
| (a) Includes net earnings from discontinued operations of $2.9 million in the 2006 quarter, $13.4 million in the 2007 nine months and $11.4 million in the 2006 nine months. (b) Based on average shares outstanding of 177.4 million in the 2007 quarter, 186.3 million in the 2006 quarter, 181.2 million in the 2007 nine months and 187.4 million in the 2006 nine months. |
|||
| Sales | $1,326,100,000 | $1,367,900,000 | (3.1%) |
| Operating income | 113,800,000 | 133,300,000 | (14.6%) |
| Net income (a) | 65,700,000 | 84,000,000 | (21.8%) |
| Earnings per share (b) | 0.37 | 0.45 | (17.8%) |
| 9 months ended 9/30 | 2007 | 2006 | Change |
| Sales | $3,936,500,000 | $4,047,300,000 | (2.7%) |
| Operating income | 321,500,000 | 366,700,000 | (12.3%) |
| Net income (a) | 201,400,000 | 230,300,000 | (12.5%) |
| Earnings per share (b) | 1.11 | 1.23 | (9.8%) |
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