Industry supplier Leggett & Platt, with headquarters in Carthage, Missouri, reported net sales from continuing operations in its second quarter of $1,002 million, a 4% increase as compared with the second quarter of 2013.
| BRIEFLY | |
| L&P second-quarter results | |
| Net sales | $1,002 million |
| Residential furnishings total sales | $536 million |
| Specialized products total sales | $230.8 million |
Total sales from continuing operations in L&P’s residential furnishings division, which includes domestic bedding products, were $536 million, a 9.7% increase over the prior-year quarter.
Total sales from continuing operations in the specialized products division, which includes the Global Systems Group machinery division, were $230.8 million, a 10.7% increase as compared with the second quarter of 2013. The company attributed the growth to its automotive components business.
During the second quarter, L&P reported an impairment charge of $108.5 million for its store fixtures group. The charge reflects the write off of the goodwill associated with the group. The impact on earnings per share was about $0.65 per share. The company said it is exploring its options, including possible divestiture of the group.
EBIT (earnings before interest and income taxes), excluding the impairment, improved as compared with the previous year, with the income from broad-based sales growth offset by weak store-fixture demand and the nonrecurrence of last year’s $4 million gain from asset sales.
“For the first time in quite a while we experienced meaningful broadbased growth—averaging about 10%—across the bulk of the company,” said David Haffner, L&P board chair and chief executive officer. “In contrast, sales declined sharply in both the store fixtures and CVP units, moderating aggregate second quarter growth for the entire company to 4%.
“Much more positively, on July 1 we announced that we are now the exclusive long-term supplier in the U.S. and Canada of mattress innersprings for Tempur Sealy, and of box springs for Sealy,” Haffner added. “Sales should immediately increase by about 2%, or approximately $80 million annually, and be neutral to EPS over the first twelve months as we execute the integration plan. … Given the impairment charge, the acquisition of Tempur Sealy’s innerspring plants, and the normal seasonality of our businesses, we ended the quarter with net debt to net capital at 35.6%, comfortably in the middle of our long-term 30% to 40% target range.”
Incorporating the $0.65 non-cash impairment, the company projects 2014 EPS of $1.05 to $1.20. Cash from operations in 2014 is projected to exceed $350 million. 2014 sales are forecast to be from $3.88 billion to $3.98 billion.
