L&P 2nd Quarter Results Hampered by Pandemic

Reflecting significant impacts from the COVID-19 pandemic, industry supplier Leggett & Platt Inc. posted second-quarter sales of $845 million, down 30% from the second quarter of fiscal 2019. Organic sales declined 31%, with acquisitions adding 1% sales growth.

The Carthage, Missouri-based company posted a $0.05 loss per share on losses of $8.1 million in the second quarter of 2020. This compares with earnings per share of $0.64 on $86.3 million in revenue in the second quarter of 2019. 

The company paid a second-quarter dividend of $0.40 per share, equal to last year’s second-quarter dividend. The L&P board declared a third-quarter dividend of $0.40 per share. At an annual indicated dividend of $1.60 per share, the yield is 4%, one of the highest yields among the S&P 500 Dividend Aristocrats, L&P said.

Liquidity as of June 30 was $1.3 billion. Operating cash flow was $112 million in the second quarter, a decrease of $60 million compared with the same period in 2019, primarily from lower earnings. 

Sales improved sequentially throughout the quarter after hitting their lowest point in early April, and continued to improve in the first three weeks of the third quarter to levels near the prior year, L&P said.

Second-quarter sales in all business segments saw steep declines primarily due to the COVID-19 pandemic: Bedding Products (-28%); Furniture, Flooring & Textile Products (-22%); and Specialty Products (-47%).

“We were pleased to see sales improve sequentially throughout the quarter as demand improved in most of our markets,” said Karl Glassman, chair and chief executive officer. “The swift cost reduction actions implemented at the onset of the pandemic helped to mitigate some of the earnings impact from lower demand levels. … We continue to see demand recovering through July, although at varied rates across our markets. … We have improved our liquidity and will continue to carefully manage our cash and expenses.”

The company did not provide earnings guidance due to continuing economic uncertainty.

The bedding segment “has seen the strongest recovery in demand,” Glassman said in an Aug. 7 article in The Joplin Globe. “Things got so soft in April that we pulled down production; we were working off of inventory. And then, the second week of May, we started to see a surge of bedding demand in the U.S., not knowing if it was stimulus-related or if it was a buildup to Memorial Day. At that point, we didn’t know if it was a head fake, to be real honest with you. But demand has continued to be extremely strong. Interesting data point: In the month of June, we shipped more innersprings in that month than any month in Leggett’s history, which is remarkable considering the backdrop.”