|Net earnings||$119.8 million|
|Net earnings per share||$0.87|
|Net sales||$958.9 million|
In the second fiscal quarter of 2016, industry supplier Leggett & Platt Inc. reported net earnings of $119.8 million, a 53% increase compared with the same quarter in the previous year.
Earnings per share were $0.87 and adjusted EPS from continuing operations were a record $0.66.
The Carthage, Missouri-based company attributed these results to higher unit sales volume, a favorable product mix, operational improvements, a lower tax rate and a reduced share count.
Despite a 2% sales volume gain, net sales in the second quarter declined 4% to $958.9 million, due to divestitures, raw material-related price deflation and currency impacts, the company said.
“We continue to be pleased with our operational progress in 2016, despite softer than forecasted volume growth,” said Karl Glassman, L&P president and chief executive officer. “During the second quarter, we generated higher margins, strong cash flow from operations, and record second-quarter EPS. For the full year, we expect to achieve similar results: strong EBIT (earnings before interest and taxes) margin, significant growth in operating cash flow and record EPS.”
“Cash flow from operations, at $262 million for the first half of the year, was more than double the comparable amount from last year, in part due to the litigation settlement proceeds (related to L&P’s former Prime Foam business),” Glassman said. “For the full year, we expect cash from operations to exceed $500 million.”
Sales in the Commercial Products Segment, which includes adjustable beds and the Fashion Bed Group, were $153.1 million, a 4% decline compared with the prior-year quarter.
In the Industrial Materials Segment, which includes steel rod and wire, total sales declined 25%, to $150.1 million.
Second-quarter sales in the Residential Furnishings Segment, which includes bedding components, foam, other bedding-related products and Spuhl AG wire-forming machinery, declined 6% to $493.6 million.
In the Specialized Products Segment, which includes Global Systems Group, sales increased 9% to $265.5 million.
L&P updated its guidance and now projects full-year sales of $3.9 billion—basically flat compared with 2015. It also narrowed its 2016 EPS guidance from $2.45 to $2.60.
“We continue to actively manage our portfolio of businesses,” Glassman said. “During the second quarter, we divested two small businesses that collectively produce about $80 million of annual sales, for total cash proceeds of $47 million. In addition, during the quarter, we spent $35 million to buy out the minority interest in an Asian automotive joint venture that we have controlled and operated for several years.”
“Our primary financial goal is to achieve total shareholder return that ranks in the top third of the S&P 500 over rolling three-year periods. … (Our) performance places L&P within the top 6% of the S&P 500,” he concluded.