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Much progress despite weak economy - Leggett & Platt
Jan '10
4Q EPS of $.23; sales were $770 million, 13% lower than in prior year.4Q adjusted EPS from Continuing Operations of $.30, excluding an unusual international tax item.Full year earnings of $.70 per share; sales were $3.06 billion, 25% lower than in the prior year.Full year adjusted EPS from Continuing Operations of $.86, excluding unusual items.Cash flow from operations of $565 million for the full year, the second-highest level ever.Repurchased 4.1 million shares during the quarter; net debt remained at 23.7% of net capital.2010 EPS guidance of $.75 - 1.15, on sales of $2.9 - 3.3 billion.

Diversified manufacturer Leggett & Platt reported fourth quarter earnings per diluted share of $.23. Earnings from Continuing Operations, adjusted to exclude an unusual tax item, were $.30 per share. In the fourth quarter of 2008, adjusted earnings from Continuing Operations were $.03 per share. Earnings improved, despite lower sales, as a result of cost reduction efforts, pricing discipline, and a $.06 per share LIFO benefit. Sales from Continuing Operations were $770 million, 13% lower than in the fourth quarter of 2008, with steel-related price deflation accounting for the bulk of the decline; unit volumes declined approximately 3%.

Full Year Financial Results

Full year reported EPS was $.70 (including $.12 per share of expenses due to three items: tax adjustments resulting from Mexican tax law changes, bad debt expense related to a specific customer bankruptcy, and the write-down of a note associated with the Aluminum Segment divestiture). Per share adjusted earnings from Continuing Operations were $.86 for the full year, a 2% decrease vs 2008; cost structure improvements and pricing discipline nearly offset the earnings impact of extremely weak market demand. Full year sales from Continuing Operations decreased 25% to $3.06 billion, largely due to unit volume decline.

The company generated $565 million of cash from operations during 2009, the second-highest level ever, reflecting targeted efforts to optimize working capital. Major uses of cash included $240 million to fund dividends and capital requirements, $188 million (net) to purchase Leggett stock, and $64 million (net) to reduce debt. Net debt to net capital was 23.7% at year end, well below the company's 30% - 40% target range.

Much Progress Despite Weak Economy

President and CEO David S. Haffner commented, "For the full year, Continuing Operations EPS was relatively unchanged from the prior year, despite a $1 billion (or 25%) decline in sales that was primarily market-driven. Our significant cost reduction efforts and pricing discipline allowed us to sustain EPS and improve margins, despite the weak economy. Full year gross margin was 20.6%, the highest level since the year 2000. Full year EBIT margin was 7.5%, an improvement of 180 basis points over 2008. I am extremely pleased with our employees' accomplishments in the face of such economic headwind.

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