L&P 2006 Sales Hit $5.5 Billion

January 25, 2007  by in UnCategorized   

By Home Furnishings Business in on January 2007 Leggett & Platt chalked up record sales of $5.5 billion in 2006, 3.9 percent increase over 2005, despite a 2.2 percent decline in fourth-quarter sales to $1.3 billion.

The key supplier to the bedding and residential furnishings sectors, among others, reported earnings of $0.38 per diluted share for the fourth quarter--compared to $0.24 in fourth-quarter 2005--which include 5 cents per share of non-recurring income from recouping a duty on Canadian lumber imports.

Full year earnings per share increased to $1.61 in 2006 from $1.30 in 2005. Annual earnings include $0.05 of net non-recurring income in 2006, and $0.20 of net non-recurring expense in 2005, so most of the earnings improvement is attributable to non-recurring items. Those included lower restructuring-related expenses, non-recurrence of 2005’s abnormally high workers’ compensation costs, and reimbursement of Canadian lumber duty. Earnings also benefited from restructuring-related operational improvements, income from recent acquisitions, and reduced share count; offsetting items include changes in product mix, price competition, and higher interest expense.

2006: Accomplishments and Disappointments

David S. Haffner, President and CEO said, “Fourth quarter sales and earnings were in line with the expectations we shared in October, even though sales were toward the lower end of our guidance. Operationally, we are progressing as expected.

“During 2006 Leggett attained record sales and earnings, completed the restructuring we began in 2005, improved cash from operations, updated our growth and margin targets, filled several newly-created business development and product development positions, increased the dividend for the 35th consecutive year, and bought back 3% of our stock.

“We continue to have a strong balance sheet, and plenty of cash to fund the growth we contemplate. Over the past 5 years we’ve generated over $2 billion of cash from operating activity,” said David Haffner, president and CEO. “For the near future, after funding maintenance capital and dividends, we expect annually to have $400-450 million of cash available for investment in growth initiatives. Unused cash flow, if any, is anticipated to be spent on stock repurchase.”

L&P’s Residential Furnishings business fell $21 million, or 3 percent, in fourth quarter 2006, compared to the prior-year period. Acquisitions, net of restructuring and divestitures, added $11 million to sales, but were more than offset by a 5 percent decline in same-location sales. Earnings before interest and income taxes in the residential segment increased $38 million, or 112 percent, primarily attributable to reimbursement of the duty on Canadian lumber, reduced restructuring-related costs, and lower workers’ compensation costs.

For 2006, Residential Furnishings increased sale $147 million, or 6 percent, largely due to acquisitions. Same location sales increased 1 percent, with inflation more than offsetting unit declines. EBIT increased $107 million, or 63 percent, primarily due to recovery of the duty on Canadian lumber, operational benefits from restructuring, lower restructuring-related costs, earnings from acquired companies, higher sales and lower workers’ compensation costs.