L&P Reports Earnings Tumble

Leggett & Platt (Carthage, Mo.), the diversified manufacturer that controls the largest store fixture manufacturing operation in the industry, has reported an overall 34 percent earnings tumble and a 5.5 percent sales decrease for its second quarter ending June 30, 2001.

The company announced that sales growth from acquisitions was more than offset by a 12 percent decline in same-location sales as weak market demand continued to impact its five business segments (Residential Furnishings, Commercial Furnishings, Aluminum Products, Industrial Materials and Specialized Products). “Production was down significantly from last year,” said the company announcement, “resulting in reduced plant utilization and overhead absorption, and significantly impacting profit margins and earnings.

“Sequentially, sales declined 1.7 percent from first quarter; however, earnings improved 10.7 percent, or 2.5 cents per share, from first quarter's $.23 per diluted share.”

“Though results are well below last year's record second quarter performance,” said president and ceo Felix Wright, “we are pleased by the improvement in margin and earnings versus the first quarter, especially in light of the sequential sales decline. We are guardedly optimistic that our earnings bottomed in the first quarter, and that second quarter will prove to be the bottom in sales.

“Since September,” Wright continued, “we have consolidated or sold 10 facilities, restructured other operations, reduced full-time-equivalent headcount by almost 3000, and reduced capital and acquisition spending. Our long-term goals remain unchanged — we continue to target sales and earnings growth of 15 percent on average, return on equity in the high teens and a debt level around 30-40 percent of total capitalization. The company is well situated to capitalize on an improving economy when it develops.”

By segments, L&P reported that total sales for Residential Furnishings decreased 6.7 percent; for Aluminum Products, down 15.1 percent; for Industrial Materials, down 11.9%; for Specialized Products, total sales increased 28.6 percent, due to acquisitions, but same-location sales declined 4.4 percent; and for Commercial Furnishings, sales dropped 4.4 percent. The store fixture operations are part of the Commercial Furnishings division.