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Diversified manufacturer Leggett & Platt reported fourth quarter 2019 sales of $1.14 billion, a 9% increase versus fourth quarter last year.
Fourth quarter EBIT was $135 million, up $51 million or 61% from fourth quarter last year, and adjusted1 EBIT was $140 million, a $20 million or 17% increase.
Fourth quarter EPS was $.64, an increase of $.25 versus fourth quarter 2018. Adjusted1 EPS was $.68, an increase of $.06, and reflects higher adjusted1 EBIT partially offset by higher interest expense ($.04/share) and a higher tax rate ($.02/share).
Full-Year Results:2019 sales of $4.75 billion, an 11% increase versus last year
2019 EBIT was $513 million, up $76 million or 18% from 2018, and adjusted1 EBIT was $529 million, a $56 million or 12% increase.
2019 EPS was $2.47, an increase of $.21 versus 2018. Full-year adjusted1 EPS was $2.57, an increase of $.09, and reflects higher adjusted1 EBIT partially offset by higher interest expense largely due to the ECS acquisition ($.20/share) and a higher tax rate ($.04/share).
Adjustments to Earnings:
CEO CommentsChairman and CEO Karl G. Glassman commented, “In 2019, our employees achieved several milestones including the acquisition of ECS, the largest acquisition in Company history, record cash flow from operations, and our 48th consecutive annual dividend increase. We also announced organizational changes, including segment realignment, effective January 1, 2020, and key executive and board appointments.
“Portfolio management remains a strategic priority. Over the past several years we have enhanced our business portfolio and improved margins by growing our stronger businesses and exiting or restructuring businesses that consistently struggled to deliver acceptable margins and returns. During 2019 we acquired two businesses: ECS, which contributed meaningfully to EBIT and operating cash flow, and a small Geo Components operation. We also completed the restructuring of Home Furniture and the exit of Fashion Bed.
“During 2019, sales grew 11% primarily from the ECS acquisition. Sales were stronger in U.S. Spring, Automotive, Work Furniture and Aerospace but these improvements were more than offset by planned lower volume from business exited in Fashion Bed and Home Furniture and weak trade demand in the Industrial Products segment. Full year adjusted1 EBIT increased $56 million over 2018, primarily from the ECS acquisition, lower raw material costs including LIFO benefit, and improved earnings performance in Furniture Products.
“In 2020, we expect mid-single-digit volume growth from Automotive, U.S. Spring, ECS, Aerospace, Geo Components and Work Furniture, to be offset by further year-over-year sales declines from exited business in Fashion Bed and Home Furniture, continued weak trade demand for steel rod and wire and raw material-related selling price decreases which began in the second half of 2019. Prior year acquisitions should add 1% to sales growth. Earnings growth in Automotive, U.S Spring, ECS and several of our businesses is expected to be more than offset by increasing steel costs, including the non-recurrence of 2019’s LIFO benefit, and investments to support future growth.”
Debt and Cash Flow
SEGMENT RESULTS – Fourth Quarter 2019 (versus 4Q 2018)Residential Products –
Industrial Products –
Furniture Products –
Specialized Products –
SEGMENT RESULTS – Full Year 2019 (versus 2018)Residential Products –
Slides and Conference CallA set of slides containing summary financial information is available from the Investor Relations section of Leggett’s website at www.leggett.com. Management will host a conference call at 7:30 a.m. Central (8:30 a.m. Eastern) on Tuesday, February 4. The webcast can be accessed from Leggett’s website. The dial-in number is (201) 689-8341; there is no passcode.
First quarter results will be released after the market closes on Monday, May 4, with a conference call the next morning.
FOR MORE INFORMATION: Visit Leggett’s website at www.leggett.com.
COMPANY DESCRIPTION: At Leggett & Platt (NYSE: LEG), we create innovative products that enhance people’s lives, generate exceptional returns for our shareholders, and provide sought-after jobs in communities around the world. L&P is a 137-year-old diversified manufacturer that designs and produces engineered products found in most homes and automobiles. The Company is comprised of 15 business units, 22,000 employee-partners, and 140 manufacturing facilities located in 18 countries.
Leggett & Platt is the leading U.S.-based manufacturer of: a) bedding components; b) automotive seat support and lumbar systems; c) specialty bedding foams and private-label finished mattresses; d) components for home furniture and work furniture; e) flooring underlayment; f) adjustable beds; and g) bedding industry machinery.
FORWARD-LOOKING STATEMENTS: This press release contains “forward-looking statements,” including, but not limited to, the 2020 total sales, organic sales, volume growth from Automotive, U.S. Spring, ECS, Aerospace, Geo Components and Work Furniture, volume, annualized sales added by acquisitions, EPS, sales growth, improved EBIT, EBIT margin, cash from operations, decreasing steel costs, depreciation and amortization, net interest, effective tax rate, fully diluted shares, capital expenditures; and our ability to deleverage to a ratio of debt to trailing 12-months adjusted EBITDA of approximately 2.5 by year-end 2020. Such forward-looking statements are expressly qualified by the cautionary statements described in this provision and reflect only the beliefs of Leggett or its management at the time the statement is made. Because all forward-looking statements deal with the future, they are subject to risks, uncertainties and developments which might cause actual events or results to differ materially from those envisioned or reflected in any forward-looking statement. Moreover, we do not have, and do not undertake, any duty to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement was made. Some of these risks and uncertainties include: (i) the Company’s ability to achieve its operating targets; (ii) inability to comply with the restrictive covenants in the Company’s credit agreement; (iii) increases or decreases in our capital needs, which may vary depending on acquisition or divestiture activity, our working capital needs and capital expenditures; (iv) market conditions; (v) price and product competition from foreign and domestic competitors, changes in demand for the Company’s products, cost and availability of raw materials and labor, fuel and energy costs, our ability to increase the dividend, our ability to repatriate cash from offshore accounts, net interest expense, tax rates, increased trade costs, cybersecurity breaches, customer losses and insolvencies, disruption to our steel rod mill, climate change regulations, environmental, social and governance risks, general economic conditions, possible goodwill or other asset impairment, foreign currency fluctuation, the amount of fully diluted shares, depreciation and amortization, and litigation risks; and (vi) other risk factors in the “Forward-Looking Statements” and “Risk Factors” sections in Leggett’s most recent Form 10-K and subsequent Form 10-Q reports filed with the SEC.