From Home Furnishing Business
Leggett & Platt Records 8.9% Sales Increase in Q4
Leggett & Platt (NYSE: LEG) said fourth-quarter sales rose 8.9% to $984.5 million, but profits tumbled 56% due largely to one-time charges related to recently-enacted changes in corporate tax rates.
Net income, including the one-time charges, totaled $36.3 million or 27 cents per share. That was down from $81.6 million or 59 cents per share in the fourth quarter of 2016.
However, the most recent figures included net charges of 37 cents per share related to tax bill, including the repatriation of about $300 million in cash currently held in foreign accounts.
Leggett & Platt’s adjusted earnings, which include charges related to the tax bill and a one-time gain of 11 cents per share from the sale of real estate, totaled 59 cents per share.
The company, a major supplier of furniture and bedding components and finished furniture, said the timing and exact amounts of cash that will be returned to the U.S. is hard to predict, but said the money would be used to fuel organic growth, dividends, strategic acquisitions and share repurchases. However, officials emphasized the company does not plan to pay a special dividend or make significant additional share repurchases with the money.
For the 2017 calendar year, sales rose 5.2% to $3.94 billion.
Full-year earnings totaled $292.6 million or $2.13 per share. That was down from $385.8 million or $2.76 per share in 2016. Adjusted earnings for 2017, which include the fourth-quarter tax charges, were $2.46 per share.
"We are pleased to have delivered 9% sales growth in the fourth quarter and 5% sales growth for the full year,” said Karl Glassman, president and CEO. “This growth came primarily from new programs and added content in Automotive and market share gains in Adjustable Bed.”
He said several other businesses, including European Spring, Geo Components, Work Furniture, and Aerospace also contributed to sales growth.
“Weak demand in our U.S. spring business was largely offset by increased content as we continue to place higher value components in more of the mattresses that our customers produce,” Glassman added.
He said the company is expecting stronger sales growth in 2018 from its automotive, bedding, adjustable bed, work furniture, aerospace, and geo components businesses.
Sales for the year are projected to be $4.2 billion to $4.3 billion, an increase of 6% to 9% from 2017.
Earnings from continuing operations are projected at $2.65 to $2.85 per share, a figure that assumes an effective tax rate of 22%.