Leggett & Platt Reports 3Q EPS Of $.61 (Continuing Ops) And 6% Sales Growth
- 3Q sales were
$1.01 billion , a 6% increase versus 3Q 2016; unit volume grew 4% - 3Q EPS from Continuing Operations was
$.61 - 2017 Continuing Ops EPS guidance narrowed to
$2.49 - 2.54 ; sales guidance narrowed to$3.95 - 4.0 billion - 2017 adjusted1 Continuing Ops EPS guidance narrowed to
$2.45 - 2.50
Diversified manufacturer
Third quarter earnings from Continuing Operations were
As previously reported, effective
CEO Comments
President and CEO
"For a decade now our primary financial goal has been to achieve Total Shareholder Return (TSR) that ranks within the top third of the
"We are maintaining our strong financial base. Net debt to net capital1 was 38% at quarter end, near the top of our 30% ‑ 40% target range, reflecting working capital investment, stock repurchases, and acquisitions. At quarter end, the company's debt was 2.1 times its trailing 12-month adjusted1 EBITDA."
Dividends and Stock Repurchases
In August,
At yesterday's closing share price of
During the third quarter the company repurchased 0.9 million shares of its stock at an average price of
2017 EPS and Sales Guidance Narrowed
2017 Continuing Operations EPS guidance is narrowed to
2017 EPS, $/share: |
First |
3Q |
4Q |
Full Year |
Half |
Guidance |
Guidance |
||
EPS, as reported |
1.26 |
.60 |
.62-.67 |
2.48-2.53 |
Discontinued Operations |
-- |
(.01) |
-- |
(.01) |
Continuing Operations |
1.26 |
.61 |
.62-.67 |
2.49-2.54 |
Adjustments |
||||
CVP Divestiture Loss |
-- |
(.02) |
-- |
(.02) |
Tax Benefit of CVP Divestiture |
-- |
.04 |
.02 |
.06 |
3Q Impairment of Small Operation |
-- |
(.02) |
-- |
(.02) |
Sale of Real Estate |
-- |
-- |
.11 |
.11 |
Pension Settlement Charge |
-- |
-- |
(.09) |
(.09) |
Total Adjustments |
-- |
-- |
.04 |
.04 |
Continuing Operations, adjusted |
1.26 |
.61 |
.58-.63 |
2.45-2.50 |
Net Sales, Continuing Ops, $billion |
1.95 |
1.01 |
.99-1.04 |
3.95-4.00 |
Adjusted1 Continuing Operations EPS guidance is narrowed to
Implied in full-year guidance is fourth quarter adjusted1 EPS of
Cash from operations is expected to approximate
The company's top priorities for use of cash are organic growth, dividends, and strategic acquisitions. After funding those priorities, if there is cash available, the company generally intends to repurchase its stock (rather than repay debt early or stockpile cash). Management has standing authorization from the Board of Directors to buy up to 10 million shares each year; however, no specific repurchase commitment or timetable has been established.
SEGMENT RESULTS – Third Quarter 2017 (versus the same period in 2016)
Change to Segment Reporting – Effective
Residential Products – Total sales increased
Industrial Products - Total sales decreased
Furniture Products – Total sales increased
Specialized Products – Total sales increased
Slides and Conference Call
A 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
Fourth quarter results will be released after the market closes on
FOR MORE INFORMATION: Visit Leggett's website at www.leggett.com.
COMPANY DESCRIPTION: At
FORWARD-LOOKING STATEMENTS: Statements in this release that are not historical in nature are "forward-looking." These statements involve uncertainties and risks, including the company's ability to achieve its longer-term operating targets and generate average annual TSR of 11%-14%, price and product competition from foreign and domestic competitors, the amount of share repurchases, changes in demand for the company's products, cost and availability of raw materials and labor, fuel and energy costs, future growth of acquired companies, general economic conditions, possible goodwill or other asset impairment, foreign currency fluctuation, litigation risks, and other factors described in the company's Forms 10-K and 10-Q. Any forward-looking statement reflects only the company's beliefs when the statement is made. Actual results could differ materially from expectations, and the company undertakes no duty to update these statements.
CONTACT: Investor Relations, (417) 358-8131 or invest@leggett.com
1 Please refer to the attached tables for non-GAAP reconciliations.
LEGGETT & PLATT |
October 26, 2017 |
|||||||||||
RESULTS OF OPERATIONS |
THIRD QUARTER |
YEAR TO DATE |
||||||||||
(In millions, except per share data) |
2017 |
2016 |
Change |
2017 |
2016 |
Change |
||||||
Net sales (from continuing operations) |
$ 1,009.7 |
$ 948.9 |
6% |
$2,959.3 |
$2,846.2 |
4% |
||||||
Cost of goods sold |
793.9 |
721.5 |
2,287.4 |
2,151.2 |
||||||||
Gross profit |
215.8 |
227.4 |
(5%) |
671.9 |
695.0 |
|||||||
Selling & administrative expenses |
95.7 |
93.9 |
2% |
307.1 |
298.7 |
3% |
||||||
Amortization |
6.2 |
5.2 |
16.0 |
15.1 |
||||||||
Other expense (income), net |
4.7 |
(1.9) |
1.4 |
(22.6) |
||||||||
Earnings before interest and taxes |
109.2 |
130.2 |
(16%) |
347.4 |
403.8 |
(14%) |
||||||
Net interest expense |
8.5 |
9.0 |
26.0 |
26.7 |
||||||||
Earnings before income taxes |
100.7 |
121.2 |
321.4 |
377.1 |
||||||||
Income taxes |
17.2 |
27.6 |
64.2 |
93.0 |
||||||||
Net earnings from continuing operations |
83.5 |
93.6 |
257.2 |
284.1 |
||||||||
Discontinued operations, net of tax |
(0.9) |
--- |
(0.9) |
20.4 |
||||||||
Net earnings |
82.6 |
93.6 |
256.3 |
304.5 |
||||||||
Less net income from non-controlling interest |
- |
(0.1) |
- |
(0.3) |
||||||||
Net earnings attributable to L&P |
$ 82.6 |
$ 93.5 |
(12%) |
$ 256.3 |
$ 304.2 |
|||||||
Earnings per diluted share |
||||||||||||
From continuing operations |
$0.61 |
$0.67 |
(9%) |
$1.87 |
$2.02 |
(7%) |
||||||
From discontinued operations |
($0.01) |
$0.00 |
($0.01) |
$0.15 |
||||||||
Net earnings per diluted share |
$0.60 |
$0.67 |
(10%) |
$1.86 |
$2.17 |
|||||||
Shares outstanding |
||||||||||||
Common stock (at end of period) |
131.8 |
133.7 |
(1.4%) |
131.8 |
133.7 |
|||||||
Basic (average for period) |
135.7 |
137.4 |
136.1 |
138.1 |
||||||||
Diluted (average for period) |
136.9 |
139.4 |
(1.8%) |
137.5 |
140.2 |
|||||||
CASH FLOW |
THIRD QUARTER |
YEAR TO DATE |
||||||||||
(In millions) |
2017 |
2016 |
Change |
2017 |
2016 |
Change |
||||||
Net earnings |
$ 82.6 |
$ 93.6 |
$ 256.3 |
$ 304.5 |
||||||||
Depreciation and amortization |
32.2 |
29.2 |
94.4 |
86.4 |
||||||||
Working capital decrease (increase) |
(8.1) |
(10.3) |
(117.7) |
(35.8) |
||||||||
Impairments |
4.5 |
0.3 |
4.6 |
4.0 |
||||||||
Other operating activity |
(5.8) |
10.8 |
23.9 |
26.6 |
||||||||
Net Cash from Operating Activity |
$ 105.4 |
$ 123.6 |
(15%) |
$ 261.5 |
$ 385.7 |
(32%) |
||||||
Additions to PP&E |
(39.9) |
(25.2) |
(119.0) |
(83.1) |
43% |
|||||||
Purchase of companies, net of cash |
(0.2) |
(11.1) |
(39.0) |
(28.0) |
||||||||
Proceeds from business and asset sales |
11.0 |
0.2 |
12.6 |
54.2 |
||||||||
Dividends paid |
(47.6) |
(45.5) |
(138.0) |
(132.0) |
||||||||
Repurchase of common stock, net |
(41.5) |
(16.6) |
(154.8) |
(177.4) |
||||||||
Additions (payments) to debt, net |
13.4 |
8.2 |
228.4 |
96.8 |
||||||||
Other |
7.2 |
(1.1) |
9.3 |
(52.1) |
||||||||
Increase (Decr.) in Cash & Equiv. |
$ 7.8 |
$ 32.5 |
$ 61.0 |
$ 64.1 |
||||||||
FINANCIAL POSITION |
30-Sep |
|||||||||||
(In millions) |
2017 |
2016 |
Change |
|||||||||
Cash and equivalents |
$ 342.9 |
$ 317.3 |
||||||||||
Receivables |
585.8 |
543.8 |
||||||||||
Inventories |
558.0 |
518.6 |
||||||||||
Held for sale |
10.7 |
0.0 |
||||||||||
Other current assets |
52.3 |
33.6 |
||||||||||
Total current assets |
1,549.7 |
1,413.3 |
10% |
|||||||||
Net fixed assets |
644.3 |
554.1 |
||||||||||
Held for sale |
12.7 |
14.8 |
||||||||||
Goodwill and other assets |
1,117.0 |
1,088.1 |
||||||||||
TOTAL ASSETS |
$ 3,323.7 |
$ 3,070.3 |
8% |
|||||||||
Trade accounts payable |
$ 381.8 |
$ 334.9 |
||||||||||
Current debt maturities |
153.3 |
1.0 |
||||||||||
Held for sale |
2.1 |
0.0 |
||||||||||
Other current liabilities |
354.3 |
351.0 |
||||||||||
Total current liabilities |
891.5 |
686.9 |
30% |
|||||||||
Long term debt |
1,044.4 |
1,055.4 |
(1%) |
|||||||||
Deferred taxes and other liabilities |
215.0 |
224.4 |
||||||||||
Equity |
1,172.8 |
1,103.6 |
6% |
|||||||||
Total Capitalization |
2,432.2 |
2,383.4 |
2% |
|||||||||
TOTAL LIABILITIES & EQUITY |
$ 3,323.7 |
$ 3,070.3 |
8% |
LEGGETT & PLATT |
October 26, 2017 |
|||||||||||
SEGMENT RESULTS1 |
THIRD QUARTER |
YEAR TO DATE |
||||||||||
(In millions) |
2017 |
2016 |
Change |
2017 |
2016 |
Change |
||||||
External Sales |
||||||||||||
Residential Products |
$ 426.7 |
$ 403.2 |
5.8% |
$ 1,225.8 |
$ 1,201.4 |
2.0% |
||||||
Industrial Products |
71.2 |
71.4 |
(0.3%) |
216.9 |
228.4 |
(5.0%) |
||||||
Furniture Products |
284.0 |
254.6 |
11.5% |
816.0 |
741.5 |
10.0% |
||||||
Specialized Products |
227.8 |
219.7 |
3.7% |
700.6 |
674.9 |
3.8% |
||||||
Total |
$ 1,009.7 |
$ 948.9 |
6.4% |
$ 2,959.3 |
$ 2,846.2 |
4.0% |
||||||
Inter-Segment Sales |
||||||||||||
Residential Products |
$ 4.5 |
$ 4.1 |
$ 13.5 |
$ 13.2 |
||||||||
Industrial Products |
63.8 |
73.3 |
192.7 |
223.6 |
||||||||
Furniture Products |
3.7 |
11.2 |
14.4 |
49.5 |
||||||||
Specialized Products |
1.9 |
1.5 |
5.5 |
5.0 |
||||||||
Total |
$ 73.9 |
$ 90.1 |
$ 226.1 |
$ 291.3 |
||||||||
Total Sales (External + Inter-segment) |
||||||||||||
Residential Products |
$ 431.2 |
$ 407.3 |
5.9% |
$ 1,239.3 |
$ 1,214.6 |
2.0% |
||||||
Industrial Products |
135.0 |
144.7 |
(6.7%) |
409.6 |
452.0 |
(9.4%) |
||||||
Furniture Products |
287.7 |
265.8 |
8.2% |
830.4 |
791.0 |
5.0% |
||||||
Specialized Products |
229.7 |
221.2 |
3.8% |
706.1 |
679.9 |
3.9% |
||||||
Total |
$ 1,083.6 |
$ 1,039.0 |
4.3% |
$ 3,185.4 |
$ 3,137.5 |
1.5% |
||||||
EBIT |
||||||||||||
Residential Products |
$ 50.5 |
$ 45.1 |
12% |
$ 143.2 |
$ 130.4 |
10% |
||||||
Industrial Products |
1.1 |
16.9 |
(93%) |
17.0 |
50.0 |
(66%) |
||||||
Furniture Products |
24.5 |
26.4 |
(7%) |
65.1 |
82.5 |
(21%) |
||||||
Specialized Products |
34.2 |
40.6 |
(16%) |
121.3 |
138.8 |
(13%) |
||||||
Intersegment eliminations and other |
(1.1) |
1.2 |
0.8 |
2.1 |
||||||||
Total |
$ 109.2 |
$ 130.2 |
(16%) |
$ 347.4 |
$ 403.8 |
(14%) |
||||||
EBIT Margin 2 |
Basis Pts |
Basis Pts |
||||||||||
Residential Products |
11.7% |
11.1% |
60 |
11.6% |
10.7% |
90 |
||||||
Industrial Products |
0.8% |
11.7% |
(1090) |
4.2% |
11.1% |
(690) |
||||||
Furniture Products |
8.5% |
9.9% |
(140) |
7.8% |
10.4% |
(260) |
||||||
Specialized Products |
14.9% |
18.4% |
(350) |
17.2% |
20.4% |
(320) |
||||||
Overall from Continuing Operations |
10.8% |
13.7% |
(290) |
11.7% |
14.2% |
(250) |
||||||
LAST SIX QUARTERS |
2016 |
2017 |
||||||||||
Selected Figures |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
||||||
Net Sales ($ million) |
959 |
949 |
904 |
960 |
989 |
1,010 |
||||||
Sales Growth (vs. prior year) |
(4%) |
(6%) |
(4%) |
2% |
3% |
6% |
||||||
Unit Volume Growth (same locations, vs. prior year) |
2% |
(1%) |
1% |
4% |
2% |
4% |
||||||
Adjusted EBIT 3 |
132 |
130 |
103 |
116 |
122 |
117 |
||||||
Cash from Operations ($ million) |
151 |
124 |
167 |
58 |
98 |
105 |
||||||
Adjusted EBITDA (trailing twelve months) 3 |
645 |
634 |
607 |
598 |
591 |
581 |
||||||
(Long term debt + current maturities) / Adj. EBITDA 3,4 |
1.6 |
1.7 |
1.6 |
1.9 |
2.0 |
2.1 |
||||||
Same Location Sales (vs. prior year) |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
||||||
Residential Products |
(4%) |
(8%) |
(9%) |
(2%) |
(3%) |
2% |
||||||
Industrial Products |
(13%) |
(8%) |
(4%) |
(4%) |
1% |
(3%) |
||||||
Furniture Products |
(8%) |
(5%) |
(2%) |
(0%) |
6% |
7% |
||||||
Specialized Products |
10% |
7% |
8% |
9% |
5% |
9% |
||||||
Overall from Continuing Operations |
(1%) |
(2%) |
(1%) |
4% |
4% |
6% |
1Segment information reflects the Q1 2017 segment changes. |
||||||||||||
2Segment margins calculated on Total Sales. Overall company margin calculated on External Sales. |
||||||||||||
3Refer to next page for non-GAAP reconciliations. |
||||||||||||
4EBITDA based on trailing twelve months. |
LEGGETT & PLATT |
October 26, 2017 |
|||||||||||
RECONCILIATION OF REPORTED (GAAP) TO ADJUSTED (Non-GAAP) FINANCIAL MEASURES 8 |
||||||||||||
2016 |
2017 |
|||||||||||
Non-GAAP adjustments, Continuing Ops 5 |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
||||||
Gain / loss on sale of operations |
(11.2) |
- |
(15.7) |
- |
- |
3.3 |
||||||
Goodwill and related asset impairment |
3.7 |
- |
- |
- |
- |
4.6 |
||||||
Benefit from litigation settlement proceeds |
(6.9) |
- |
- |
- |
- |
- |
||||||
Non-GAAP adjustments (pre-tax) |
(14.4) |
- |
(15.7) |
- |
- |
7.9 |
||||||
Income tax impact of items above |
5.4 |
- |
6.5 |
- |
- |
(2.8) |
||||||
Tax benefit of CVP divestiture |
- |
- |
- |
- |
- |
(5.7) |
||||||
Non-GAAP adjustments (after tax) |
(9.0) |
- |
(9.2) |
- |
- |
(0.6) |
||||||
Diluted shares outstanding |
140.1 |
139.4 |
139.2 |
138.1 |
137.4 |
136.9 |
||||||
EPS impact of non-GAAP adjustments |
(0.06) |
- |
(0.07) |
- |
- |
(0.00) |
||||||
Adjusted EBIT, Margin, and EPS 5 |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
||||||
EBIT (earnings before interest and taxes) |
146.5 |
130.2 |
118.2 |
115.9 |
122.3 |
109.2 |
||||||
Non-GAAP adjustments (pre-tax) |
(14.4) |
- |
(15.7) |
- |
- |
7.9 |
||||||
Adjusted EBIT ($ millions) |
132.1 |
130.2 |
102.5 |
115.9 |
122.3 |
117.1 |
||||||
Net sales from continuing operations |
959 |
949 |
904 |
960 |
989 |
1,010 |
||||||
EBIT margin |
15.3% |
13.7% |
13.1% |
12.1% |
12.4% |
10.8% |
||||||
Adjusted EBIT margin |
13.8% |
13.7% |
11.3% |
12.1% |
12.4% |
11.6% |
||||||
Diluted EPS from Continuing Operations |
0.72 |
0.67 |
0.60 |
0.62 |
0.64 |
0.61 |
||||||
EPS impact of non-GAAP adjustments |
(0.06) |
- |
(0.07) |
- |
- |
(0.00) |
||||||
Adjusted EPS ($) |
0.66 |
0.67 |
0.53 |
0.62 |
0.64 |
0.61 |
||||||
Net Debt to Net Capital 6 |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
||||||
Long term debt |
1044 |
1055 |
956 |
1120 |
1184 |
1044 |
||||||
Current debt maturities |
4 |
1 |
4 |
3 |
3 |
153 |
||||||
Total Debt |
1048 |
1056 |
960 |
1123 |
1187 |
1198 |
||||||
Less cash and equivalents |
(285) |
(317) |
(282) |
(269) |
(335) |
(343) |
||||||
Net Debt |
763 |
739 |
678 |
854 |
852 |
855 |
||||||
Total capitalization |
2333 |
2383 |
2278 |
2403 |
2540 |
2432 |
||||||
Current debt maturities |
4 |
1 |
4 |
3 |
3 |
153 |
||||||
Less cash and equivalents |
(285) |
(317) |
(282) |
(269) |
(335) |
(343) |
||||||
Net Capital |
2052 |
2067 |
2000 |
2137 |
2208 |
2243 |
||||||
Long Term Debt to Total Capital |
45% |
44% |
42% |
47% |
47% |
43% |
||||||
Net Debt to Net Capital |
37% |
36% |
34% |
40% |
39% |
38% |
||||||
Total Debt to EBITDA 7 |
2Q |
3Q |
4Q |
1Q |
2Q |
3Q |
||||||
Total Debt |
1048 |
1056 |
960 |
1123 |
1187 |
1198 |
||||||
EBIT |
146.5 |
130.2 |
118.2 |
115.9 |
122.3 |
109.2 |
||||||
Depreciation and Amortization |
28.9 |
29.2 |
29.0 |
30.3 |
31.9 |
32.2 |
||||||
EBITDA |
175.4 |
159.4 |
147.2 |
146.2 |
154.2 |
141.4 |
||||||
Non-GAAP adjustments (pre-tax) |
(14.4) |
- |
(15.7) |
- |
- |
7.9 |
||||||
Adjusted EBITDA ($ millions) |
161.0 |
159.4 |
131.5 |
146.2 |
154.2 |
149.3 |
||||||
Adjusted EBITDA, trailing 12 months |
645 |
634 |
607 |
598 |
591 |
581 |
||||||
Total Debt / Adjusted 12-month EBITDA |
1.6 |
1.7 |
1.6 |
1.9 |
2.0 |
2.1 |
5Management and investors use these measures as supplemental information to assess operational performance. |
||||||||||||
6 These calculations portray debt position if the company was to use its cash to pay down debt. Management and investors use this ratio to track leverage trends across time periods with variable levels of cash. |
||||||||||||
7 Management and investors use this ratio as supplemental information to assess ability to pay off debt. |
||||||||||||
8Calculations impacted by rounding. |
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