Leggett & Platt EPS Breaks First Quarter Earnings Record

Industry supplier Leggett & Platt announced first-quarter earnings per share of $0.63 on net earnings of $89.5, a 26% increase and 25% increase, respectively, compared with the first quarter of 2015. EPS represented a first-quarter record for the Carthage, Missouri-based company.

First quarter sales declined 3% to $938 million due to raw material-related price deflation and divestitures, L&P said.

BRIEFLY
First-quarter snapshot
Net earnings $89.5 million
Net earnings per share $0.63
Sales $938 million
Segment sales
Commercial Products +15%
Industrial materials -28%
Residential Furnishings -5%

Margins on earnings before interest and taxes grew 190 basis points to 13.5%, as a result of higher unit volume, efficiency improvements and continued portfolio management, according to the company.

First-quarter sales in the Residential Furnishings segment, which includes bedding components, foam and other bedding-related products, declined 5%, by $25 million.

Sales in Commercial Products, which includes adjustable beds and the Fashion Bed Group, increased by $21 million, a 15% increase compared with the prior-year quarter.

In the Industrial Materials segment total sales decreased $62 million, or 28%. Same location sales declined due to steel-related price deflation and lower volume on drawn wire sales, L&P said. And, its divestiture of its steel tubing business in December 2015 reduced sales by $25 million.

“We are very pleased with our start to 2016,” said Karl Glassman, L&P president and chief executive officer. “During the first quarter we generated volume gains and improved margins, strong cash flow from operations and record first quarter EPS. For the full year, we expect to achieve similar results: strong EBIT margin, significantly improved operating cash flow, and record EPS.

“Overall unit volume grew 4% during the quarter, despite short-term demand softness in certain of our residential end markets. We continue to benefit from ongoing content gains and new program awards in our Automotive business, the bedding market’s shift to Comfort Core springs, and demand strength in our Adjustable Bed unit.

“We ended the quarter with over $300 million available through our commercial paper program. Net debt to net capital was 37%, comfortably within our 30% to 40% target range. At quarter end, the company’s debt was 1.6 times its trailing 12-month adjusted EBITDA.”

The company reiterated its 2016 sales guidance of $3.9 billion to $4.1 billion, which equates to overall growth between zero and 5%.

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