Leggett & Platt 2nd-quarter sales lifted by adjustable bases

Leading industry supplier Leggett & Platt Inc. posted sales of $989 million in the second fiscal quarter, a 3% increase compared with the same period in 2016.

The Carthage, Missouri-based company cited earnings per share of $0.64 on second-quarter net earnings of $87.6 million, which declined 28% compared with second-quarter 2016.

“The growth we experienced in the first quarter continued into the second, with organic sales growing 4% during 2Q from both volume gains and inflation,” said Karl Glassman, L&P president and chief executive officer. “This is a welcome change after two years of reported quarterly sales declines in 2015 and 2016.   

“Unit volume grew 2% in the second quarter, and 4% in the first quarter. The sequential decrease is attributable to demand softness in some end markets and stronger comps in 2Q last year. For the full year we are lowering our sales guidance range by $50 million, or approximately 1%. We now expect full-year sales of $3.9 billion to $4 billion, and 4% to 7% sales growth. Given the lower sales expectation, we are also reducing the midpoint of our full-year EPS guidance by $.05, to $2.60 (from $2.65).

“We are achieving these results while maintaining our strong financial base. Net debt to net capital was 39% at quarter end, near the top of our 30% to 40% target range, reflecting working capital investment, stock repurchases and increased acquisition activity. At quarter end, the company’s debt was two times its trailing 12-month adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).”

Second-quarter sales in the Furniture Products segment, which includes adjustable bases and beds and the Fashion Bed Group, increased 7%, primarily due to gains in adjustable bases and beds. Earnings before interest and taxes decreased $4 million due to an unfavorable sales mix and raw material cost increases, L&P said.

Total sales decreased 7% in the Industrial Products segment, which includes steel rod and wire, due to divestitures completed in 2016. EBIT decreased $6 million due to the lag in recovering higher steel costs, the company said.

In the Residential Products segment, which includes bedding components, foam, other bedding-related products, Spuhl AG wire-forming machinery and Global Systems Group, total sales were flat. Acquisitions contributed 3% to sales growth, while same-location sales declined 3%. EBIT decreased $2 million; however, last year second-quarter EBIT included a $7 million litigation gain. Setting aside that gain, EBIT improved due to pricing discipline and a favorable sales mix, L&P said.

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