Leggett & Platt sales dip slightly in third quarter

BRIEFLY
Leggett & Platt results
Net sales $957.7
Earnings per share $0.49
Residential Furnishings Segment sales Up 6%
Industrial Materials Segment sales Down 4%

Industry supplier Leggett & Platt announced sales from continuing operations were $957.7 million in the third quarter of 2013, a 2% decrease as compared with the same quarter of 2012.

Same location sales decreased 3%, due primarily to lower store fixture unit volume, according to the company. Acquisitions during the third quarter increased sales by 1%.

Third-quarter earnings per share were $0.49, compared with $0.45 in the third quarter of last year. Results for this quarter include an unusual $0.06 EPS benefit from an acquisition purchased at a negotiated price less than the accounting fair value of net assets, Leggett & Platt said.

Total sales in L&P’s Residential Furnishings Segment, which includes bedding components, adjustable beds, foam and other bedding-related products, increased $27 million, or 6%. The company attributed the increase to higher unit volumes and raw material-related price increases in carpet underlay. Earnings before interest and income taxes increased $7 million primarily due to higher unit volume.

Total sales in the Industrial Materials Segment, which includes mattress manufacturing equipment, decreased $10 million, or 4%. Same-location sales declined 10% with roughly one-half of that reduction caused by reduced trade sales at the rod mill, and the remainder from steel-related price deflation and lower unit volume, L&P said. EBIT declined $3 million, primarily due to lower sales and reduced metal margins.

In August, L&P declared a $0.30 quarterly dividend. The third quarter marks the 42nd consecutive annual dividend increase with a compound annual growth rate of 13%, the company said.

“In general, the third quarter remained sluggish as companies and consumers wrestled with the effects of continuing governmental gridlock and its associated uncertainty,” said David Haffner, L&P chief executive officer. “Even so, we are pleased with the progress made in many of our operating units. Our sales decline primarily reflects the nonrecurrence of one major retailer’s large store fixture programs concentrated in the third quarter last year…partially offset by sales gains in automotive and carpet underlay business units…During the quarter we acquired an aerospace tubing manufacturer based in France, producing roughly $40 million of annual revenue…we now have four companies that provide titanium, nickel allow and stainless steel welded and seamless tubing and sub-assembles for aerospace. These operations should generate revenue of approximately $120 million.”

“We continue to maintain our strong financial base,” Haffner added. “At quarter’s end we had nearly $500 million available under our existing commercial paper program. We ended the quarter with net debt to net capital at 27.9%, the lowest level in over two years and conservatively below our long-term 30%-40% target range.”

For 2013, L&P expects annual sales growth of 1%, or full-year sales of $3.75 billion, at the lower end of its prior sales guidance from $3.75 billion to $3.85 billion. Full-year earnings per share are expected to be $1.61 to $1.66. Continuing operations EPS guidance, adjusted to exclude the $0.06 benefit from the third-quarter acquisition, has been narrowed to $1.50 to $1.55, versus prior guidance of $1.50 to $1.65.