| BRIEFLY | |
| L&P full-year results | |
| Net sales | $3.746 billion |
| Adjusted earnings per share | $1.54 |
| Residential Furnishings Segment sales | Up 3.3% |
| Industrial Materials Segment sales | Down 3.1% |
| L&P fourth-quarter results | |
| Net sales | $896.8 million |
| Earnings per share | $0.35 |
| Residential Furnishings Segment sales | Up 6.2% |
| Industrial Materials Segment sales | Up 5.8% |
Furniture and mattress industry supplier Leggett & Platt, with headquarters in Carthage, Mo., reported sales from continuing operations for fiscal 2013 were $3.746 billion, a 1% increase as compared with full-year 2012. The increase was a result of acquisitions, the company said.
Same location sales were flat, with unit volume increasing 1%, but offset by reduced rod mill trade sales. Leggett & Platt reported EBIT (earnings before interest and income taxes) from underlying operations was essentially unchanged from 2012 to 2013.
Full-year adjusted earnings per share were a record $1.54, a 5% increase as compared with adjusted EPS for full-year 2012, according to the company. Without adjustments, full-year EPS declined to $1.34 in 2013, from $1.70 in 2012, but includes several unusual items, the company said. 2013 EPS includes a fourth-quarter noncash impairment charge of $.31 (or $67 million pre-tax), a third-quarter acquisition-related benefit of $0.06, and net earnings of $0.05 from discontinued operations. 2012 EPS includes a fourth-quarter unusual tax benefit of $0.18 and net earnings of $0.05 from discontinued operations.
Total sales for 2013 in L&P’s Residential Furnishings Segment, which includes bedding components, adjustable beds, foam and other bedding-related products, increased 3.3% to $63 million, largely from growth in the carpet underlay business, but this was partially offset by a decline in the adjustable bed business. L&P said EBIT increased $18 million, primarily due to higher sales in certain product categories, cost improvements, and favorable product mix in the U.S. spring business.
Total sales in the Industrial Materials Segment, which includes mattress manufacturing equipment, decreased 3.1% to $27 million, due to lower trade sales from the steel mill, and steel-related price deflation, partially offset by revenue increases from acquisition activity, the company said. EBIT increased $6 million; the absence of acquisition-related costs at Western Pneumatic Tube and earnings from other acquisitions more than offset the effect of lower metal margins in the second half of 2013.
“Though the economy held sales growth to a modest 1% in 2013 our continuing operations set a new record for adjusted EPS, beating the record set last year,” said David Haffner, L&P board chair and chief executive officer. “We generated cash from operations well in excess of our dividend and capital requirements, as we’ve done for over 20 years. We completed two additional, small acquisitions to augment our new aerospace tubing business and we repurchased 6 million of our shares, reducing share count by 2%.
“During 2013 we pursued the sale of our Commercial Vehicle Products business unit,” Haffner added. “As we progressed through the fourth quarter, it became apparent that the market value of the unit had declined. We recorded a $67 million noncash charge in the quarter to align the business unit’s book value with its market value. This accounting adjustment reduced fourth quarter and full year EPS by $.31.”
Sales from continuing operations for the fourth-quarter of 2013 were $896.8 million, a 5% increase as compared with the fourth-quarter of 2012, representing the company’s strongest quarterly growth for the year. Unit volumes increased 3%, and acquisitions added 2% to sales.
Fourth-quarter adjusted EPS was $0.35, a 9% increase compared with the prior-year quarter. Without adjustments, fourth-quarter 2013 EPS was $0.04, but included a $.31 noncash impairment charge.
In the final quarter of 2013, EBIT was negatively impacted by an unexpected increase in steel costs, resulting in a larger than expected LIFO (last in, first out) expense of $12 million in the quarter. L&P said the EPS impact of the LIFO expense was essentially offset by several favorable fourth-quarter tax items. The company said it is implementing price increases to recover the higher steel costs and expects to realize a benefit in the first half of 2014 that offsets fourth quarter LIFO expense.
Sales in the Residential Furnishings Segment increased 6.2% to $482.8 million in the fourth quarter. Fourth-quarter sales in the Industrial Materials Segment rose 5.8% to $197.9 million as compared with the prior-year quarter.
In 2014, L&P said it expects accelerated sales growth, EBIT margin expansion and record operating EPS. The company projects 2014 sales to be from $3.85 billion to $4.05 billion, an increase of 3% to 8% as compared with 2013; and EPS of $1.65 to $1.85. The company said it continues to retain more production capacity than it currently utilizes; thus, as the economy improves, sales can expand by approximately $400 million with little need for capital investment.
