Leggett & Platt reports 29% decline in 2Q sales
Furniture supplier's earnings drop 58%
-- Kids Today, 7/27/2009 2:10:00 PM
CARTHAGE, Mo. – Diversified manufacturer Leggett & Platt reported a 29% decline in second-quarter sales and a 58% decline in net earnings. The company noted “weak market demand” for its products.
L&P said sales for the quarter from continuing operations were $757 million, with net earnings from continuing operations of $19 million. It said the lower earnings were due to lower sales and an $11 million non-cash writedown on the note received in a divestiture last year.
President and CEO David Haffner said: “Operationally, we are seeing significant benefit from our efforts over the last three quarters. Despite an anticipated full-year sales decline of about 25%, gross margin is increasing. Gross margin for 2009 should approach 20%, a significant improvement over recent years, due to our cost containment efforts, headcount reduction, facility consolidations and dispositions.”
In the residential furnishings segment, U.S. spring sales were down 18% in the quarter, with innerspring units declining by 20%. Boxspring units were down by 25%. Furniture shipments were down by 29%, with hardware units declining by 22%.
The company said that bedding and furniture demand appears to have stabilized.
Haffner said that the company’s balance sheet improved during the quarter. Net debt declined to 24% of net capital, and the company has no significant long-term debt maturing until 2013. During the quarter, cash balances grew and working capital decreased, he said.
“Weak demand continues across our markets, and shows few signs of imminent improvement,” Haffner said. “Even so, we are extremely well positioned, from both balance sheet and cost structure perspectives, to ride out the demand downturn.”
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