Leggett & Platt sales up in 2nd quarter but forecast down for year

L&P results
Net sales $959 million
Earnings per share $0.48
Residential Furnishings Segment sales Up 3%
Industrial Materials Segment sales Down 7%

Mattress and furniture industry supplier Leggett & Platt Inc., with headquarters in Carthage, Mo., reported sales from continuing operations were $959 million in the second quarter of fiscal 2013, up 3% from second-quarter 2012.

Same location sales increased 2%, with a 3% increase in unit volume partially offset by lower rod mill trade sales, according to the company. Acquisitions increased sales by nearly 1%.

Second-quarter earnings per diluted share were $0.48, compared with $0.45 in the second quarter of last year. Earnings per share from continuing operations were $0.44 in the second quarter, compared with $0.39 during the same period in 2012. L&P attributed the quarterly earnings increase primarily to higher unit volume.

Total sales in L&P’s Residential Furnishings Segment, which includes bedding components, adjustable beds, foam and other bedding-related products, increased 3% to $14 million. The company attributed the increase to higher unit volumes and raw material-related price increases. EBIT (earnings before interest and income taxes) increased $2 million—from higher unit volume, favorable product mix in U.S. innersprings and gains from building sales. L&P said these were partially offset by margin compression in fabric converting.

Total sales in the Industrial Materials Segment, which includes mattress manufacturing equipment, decreased $17 million, or 7%. Same location sales declined 9%, due in roughly equal parts to reduced trade sales at its rod mill and steel-related price deflation, according to L&P. EBIT improved by $4 million, primarily due to the absence of last year’s $2 million of acquisition-related costs, gains from equipment sales and earnings from small acquisitions.

In May, L&P declared a $0.29 second-quarter dividend, 1 cent higher than last year’s second-quarter dividend. It marked the 42nd consecutive annual dividend increase for the company.

Commenting on the results, L&P Chief Executive Officer David Haffner, said, “Second-quarter EPS from continuing operations improved…versus the same quarter last year. Sales grew 3% and our EBIT margin increased by 100 basis points to 10.3%. These improvements occurred despite sluggish demand in certain of our end markets, which led us to reduce full year sales and EPS guidance.”

For 2013, L&P expects annual sales growth between 1% and 4%, a reduction from prior guidance of 2% to 6%. The company estimates full-year sales will be from $3.75 to $3.85 billion and earnings per share are expected to be from $1.55 to $1.70. Earnings per share guidance for continuing operations is $1.50 to $1.65.


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