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Leggett & Platt sees market improvement & sales growth during Q1
Apr '10
Leggett & Platt posts first quarter EPS of $.29. 1Q EPS of $.29; sales of $816 million, 14% higher than in prior year. Repurchased 2.0 million shares during the quarter; outstanding shares declined to 147.8 million.Ended first quarter with net debt at 25.6% of net capital, below 30% - 40% target range.Raising 2010 EPS guidance to $.95 - 1.30, on sales of $3.1 - 3.4 billion.

Diversified manufacturer Leggett & Platt reported first quarter earnings per diluted share of $.29. Earnings from Continuing Operations were $.30 per share, including a $.03 per share net benefit from unusual items (a $.05 per share benefit associated with the sale of a building, and several smaller items that net to a $.02 per share expense). In the first quarter of 2009, earnings were $.02 per share (including a $.04 per share expense associated with a significant customer bankruptcy). Earnings increased primarily as a result of higher sales, cost structure improvements, and pricing discipline.

Sales from Continuing Operations were $816 million, 14% higher than in the first quarter of 2009; unit volumes improved approximately 18%, but were partially offset by reduced prices associated with steel-related deflation that largely occurred during the first half of 2009.

Markets Improving
President and CEO David S. Haffner commented, "We are encouraged to see market improvement and sales growth during the first quarter. That growth, combined with last year's significant cost reduction efforts, led to meaningful earnings improvement. Gross margin remained over 20%, despite a noteworthy increase in steel costs during the first quarter.

"Our balance sheet and cash flow remain strong. We maintain significant financial flexibility; we have lower net debt (in dollars) than for most of the past decade, no significant fixed-term debt maturing until 2013, and over $400 million available in our commercial paper program.

"Strategically, we have essentially concluded the first part of the three-part strategic plan we announced in November 2007, having successfully refocused the company by divesting low-performing businesses. We've also made substantial progress on the second step of the plan - to improve margins and returns on the businesses we have kept - despite significant declines in market demand. Margins should continue to increase as the economy improves.

"The third step of our strategy is to grow the company at 4-5% per year, on average, over the long term. For the next couple of years, gradual market recovery should provide ample growth, and we should benefit significantly from our advantaged competitive positions, improved cost structure, and spare production capacity. Longer term, we aim for growth to come from development and commercialization of innovative new products, and from identification of and expansion into potential new growth platforms.

"While operating under our new strategy, we have achieved Total Shareholder Return (TSR(1)) of 49% over the last 28 months, which ranks within the top 4% of all S&P 500 companies. TSR for the S&P 500 index was negative 13% over that identical time period."

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