Leggett & Platt Reports $.63 EPS, A First Quarter Record
- 1Q EPS was
$.63 , a first quarter record and 26% improvement versus 1Q 2015 - 1Q sales were
$938 million , a 3% decrease versus 1Q 2015 due to commodity deflation and divestitures - EBIT margin improved to 13.5%, a 190 basis point gain over 1Q last year
- Raising EPS guidance; anticipate record continuing ops EPS of
$2.40 - 2.60 on sales of$3.9 - 4.1 billion
Diversified manufacturer
Sales from continuing operations were
EBIT margin improved 190 basis points versus first quarter last year, from 11.6% to 13.5%, as a result of higher unit volume, efficiency improvements, and continued portfolio management.
CEO Comments
President and CEO
"Overall unit volume grew 4% during the quarter, despite short-term demand softness in certain of our residential end markets. We continue to benefit from ongoing content gains and new program awards in our Automotive business, the bedding market's shift to Comfort Core springs, and demand strength in our Adjustable Bed unit.
"Our primary financial goal is to achieve Total Shareholder Return (TSR1) that ranks in the top third of the
"We are achieving these results while maintaining our strong financial base. We ended the quarter with over
Dividends, and Stock Repurchases
In February,
At yesterday's closing share price of
During the first quarter the company purchased 2.5 million shares of its stock at an average price of
Increasing 2016 Continuing Operations EPS Guidance to
With strong first quarter earnings, the company is raising EPS guidance by
Sales guidance is unchanged at
Based upon this guidance, 2016 EBIT margin should be equivalent to, or slightly above, 2015's adjusted EBIT margin of 12.9%. The benefit to margin from higher unit volume should be partially offset by non-recurrence of the 2015 pricing lag.
Discontinued operations EPS for 2016 is forecast at
Cash from operations is expected to be approximately
The company's top priorities for use of cash are organic growth, dividends, and strategic acquisitions. After funding those priorities, if there is still 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. The company expects to repurchase 4-5 million shares in 2016, and issue about 2 million shares, primarily for employee benefit plans.
SEGMENT RESULTS – First Quarter 2016 (versus the same period in 2015)
Residential Furnishings – Total sales decreased
Commercial Products – Total sales increased
Industrial Materials – Total sales decreased
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
Second quarter results will be released after the market closes on Thursday, July 28, with a conference call the next morning.
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 improve operations and realize cost savings, 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, 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 Form 10-K. 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 TSR = (Change in Stock Price + Dividends) / Beginning Stock Price; assumes dividends are reinvested.
2 To aid understanding of underlying operational profitability, adjusted EBITDA excludes a foam litigation expense accrual of
LEGGETT & PLATT |
||||||
RESULTS OF OPERATIONS 1 |
FIRST QUARTER |
|||||
(In millions, except per share data) |
2016 |
2015 |
Change |
|||
Net sales (from continuing operations) |
$ 938.4 |
$ 966.2 |
(3%) |
|||
Cost of goods sold |
704.8 |
748.4 |
||||
Gross profit |
233.6 |
217.8 |
7% |
|||
Selling & administrative expenses |
105.1 |
97.5 |
8% |
|||
Amortization |
5.1 |
5.2 |
||||
Other expense (income), net |
(3.7) |
3.4 |
||||
Earnings before interest and taxes |
127.1 |
111.7 |
14% |
|||
Net interest expense |
8.4 |
9.7 |
||||
Earnings before income taxes |
118.7 |
102.0 |
||||
Income taxes |
27.7 |
28.7 |
||||
Net earnings from continuing operations |
91.0 |
73.3 |
||||
Discontinued operations, net of tax |
0.1 |
(0.5) |
||||
Net earnings |
91.1 |
72.8 |
||||
Less net income from non-controlling interest |
(1.6) |
(1.1) |
||||
Net earnings attributable to L&P |
$ 89.5 |
$ 71.7 |
25% |
|||
Earnings per diluted share |
||||||
From continuing operations |
$0.63 |
$0.50 |
26% |
|||
From discontinued operations |
$0.00 |
($0.00) |
||||
Net earnings per diluted share |
$0.63 |
$0.50 |
26% |
|||
Shares outstanding |
||||||
Common stock (at end of period) |
134.2 |
137.8 |
(2.6%) |
|||
Basic (average for period) |
139.1 |
141.9 |
||||
Diluted (average for period) |
141.2 |
143.8 |
(1.8%) |
|||
CASH FLOW |
FIRST QUARTER |
|||||
(In millions) |
2016 |
2015 |
Change |
|||
Net earnings |
$ 91.1 |
$ 72.8 |
||||
Depreciation and amortization |
28.3 |
29.6 |
||||
Working capital decrease (increase) |
(26.7) |
(94.3) |
||||
Impairments |
0.0 |
5.9 |
||||
Other operating activity |
18.6 |
18.1 |
||||
Net Cash from Operating Activity |
$ 111.3 |
$ 32.1 |
247% |
|||
Additions to PP&E |
(27.7) |
(21.7) |
||||
Purchase of companies, net of cash |
(16.4) |
(12.2) |
||||
Proceeds from asset sales |
2.3 |
6.3 |
||||
Dividends paid |
(43.5) |
(42.7) |
||||
Repurchase of common stock, net |
(105.4) |
(60.4) |
||||
Additions (payments) to debt, net |
80.8 |
30.7 |
||||
Other |
(4.4) |
(2.7) |
||||
Increase (Decr.) in Cash & Equiv. |
$ (3.0) |
$ (70.6) |
||||
FINANCIAL POSITION |
31-Mar |
|||||
(In millions) |
2016 |
2015 |
Change |
|||
Cash and equivalents |
$ 250.2 |
$ 262.2 |
||||
Receivables |
531.3 |
532.0 |
||||
Inventories |
522.1 |
506.0 |
||||
Held for sale |
5.7 |
30.0 |
||||
Other current assets |
32.6 |
78.8 |
||||
Total current assets |
1,341.9 |
1,409.0 |
(5%) |
|||
Net fixed assets |
554.7 |
523.1 |
||||
Held for sale |
20.0 |
35.9 |
||||
Goodwill and other assets |
1,107.8 |
1,130.6 |
||||
TOTAL ASSETS |
$ 3,024.4 |
$ 3,098.6 |
(2%) |
|||
Trade accounts payable |
$ 332.1 |
$ 357.5 |
||||
Current debt maturities |
3.5 |
202.2 |
||||
Held for sale |
2.7 |
11.3 |
||||
Other current liabilities |
341.7 |
382.1 |
||||
Total current liabilities |
680.0 |
953.1 |
(29%) |
|||
Long term debt |
1,032.0 |
793.4 |
30% |
|||
Deferred taxes and other liabilities |
221.2 |
235.7 |
||||
Equity |
1,091.2 |
1,116.4 |
(2%) |
|||
Total Capitalization |
2,344.4 |
2,145.5 |
9% |
|||
TOTAL LIABILITIES & EQUITY |
$ 3,024.4 |
$ 3,098.6 |
(2%) |
|||
LEGGETT & PLATT |
||||||
SEGMENT RESULTS1 |
FIRST QUARTER |
|||||
(In millions) |
2016 |
2015 |
Change |
|||
External Sales |
||||||
Residential Furnishings |
$ 481.4 |
$ 506.0 |
(4.9%) |
|||
Commercial Products |
141.3 |
123.5 |
14.4% |
|||
Industrial Materials |
77.1 |
117.7 |
(34.5%) |
|||
Specialized Products |
238.6 |
219.0 |
8.9% |
|||
Total |
$ 938.4 |
$ 966.2 |
(2.9%) |
|||
Total Sales (External + Inter-Segment) |
||||||
Residential Furnishings |
$ 488.9 |
$ 513.6 |
(4.8%) |
|||
Commercial Products |
161.5 |
141.0 |
14.5% |
|||
Industrial Materials |
157.2 |
219.2 |
(28.3%) |
|||
Specialized Products |
249.0 |
228.5 |
9.0% |
|||
Total |
$ 1,056.6 |
$ 1,102.3 |
(4.1%) |
|||
EBIT |
||||||
Residential Furnishings |
$ 47.7 |
$ 52.1 |
(8%) |
|||
Commercial Products |
13.8 |
8.0 |
73% |
|||
Industrial Materials |
20.1 |
8.0 |
151% |
|||
Specialized Products |
46.3 |
39.3 |
18% |
|||
Intersegment eliminations and other |
(0.8) |
(0.7) |
(14%) |
|||
Change in LIFO reserve |
0.0 |
5.0 |
(100%) |
|||
Total |
$ 127.1 |
$ 111.7 |
14% |
|||
EBIT Margin 2 |
Basis Pts |
|||||
Residential Furnishings |
9.8% |
10.1% |
(30) |
|||
Commercial Products |
8.5% |
5.7% |
280 |
|||
Industrial Materials |
12.8% |
3.6% |
920 |
|||
Specialized Products |
18.6% |
17.2% |
140 |
|||
Overall from Continuing Operations |
13.5% |
11.6% |
190 |
LAST SIX QUARTERS |
2014 |
2015 |
2016 |
|||||||||
Selected Figures |
4Q |
1Q |
2Q |
3Q |
4Q |
1Q |
||||||
Net Sales ($ million) |
953 |
966 |
997 |
1009 |
945 |
938 |
||||||
Sales Growth (vs. prior year) |
11% |
10% |
4% |
1% |
(1%) |
(3%) |
||||||
Adjusted EBIT 3 |
90 |
112 |
121 |
142 |
130 |
127 |
||||||
Cash from Operations ($ million) |
166 |
32 |
95 |
130 |
102 |
111 |
||||||
Adjusted EBIT Margin3 |
9.5% |
11.6% |
12.1% |
14.0% |
13.8% |
13.5% |
||||||
Adjusted EPS - continuing operations (diluted)3 |
$0.41 |
$0.50 |
$0.53 |
$0.67 |
$0.64 |
$0.63 |
||||||
Adjusted EBITDA (trailing twelve months) 4 |
503 |
529 |
545 |
579 |
617 |
632 |
||||||
(Long term debt + current maturities) / Adj. EBITDA4 |
1.9 |
1.9 |
1.9 |
1.7 |
1.5 |
1.6 |
||||||
Net Debt to Net Capitalization |
||||||||||||
Long term debt |
762 |
793 |
827 |
985 |
942 |
1032 |
||||||
Current debt maturities |
202 |
202 |
202 |
3 |
3 |
4 |
||||||
Less cash and equivalents |
(333) |
(262) |
(275) |
(251) |
(253) |
(250) |
||||||
Net Debt |
631 |
733 |
754 |
737 |
692 |
785 |
||||||
Total capitalization |
2143 |
2146 |
2175 |
2311 |
2263 |
2344 |
||||||
Current debt maturities |
202 |
202 |
202 |
3 |
3 |
4 |
||||||
Less cash and equivalents |
(333) |
(262) |
(275) |
(251) |
(253) |
(250) |
||||||
Net Capitalization |
2012 |
2086 |
2102 |
2063 |
2013 |
2098 |
||||||
Long Term Debt to Total Capitalization |
35% |
37% |
38% |
43% |
42% |
44% |
||||||
Net Debt to Net Capital |
31% |
35% |
36% |
36% |
34% |
37% |
||||||
Management uses Net Debt to Net Capital to track leverage trends across time periods with variable levels of cash. |
||||||||||||
Same Location Sales (vs. prior year) |
4Q |
1Q |
2Q |
3Q |
4Q |
1Q |
||||||
Residential Furnishings |
9% |
9% |
2% |
(2%) |
(3%) |
(5%) |
||||||
Commercial Products |
24% |
17% |
18% |
15% |
(1%) |
7% |
||||||
Industrial Materials |
9% |
12% |
(4%) |
(10%) |
(16%) |
(19%) |
||||||
Specialized Products |
6% |
6% |
0% |
5% |
7% |
10% |
||||||
Overall from Continuing Operations |
6% |
6% |
(1%) |
(1%) |
(2%) |
(1%) |
||||||
1Segment information the 4Q 2015 move of the logistics operations from Residential Furnishings to Industrial Materials. |
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2Segment margins calculated on Total Sales. Overall company margin calculated on External Sales. |
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3Excludes litigation accruals of $22m pretax ($.09/share) in 4Q'14, $1.5m pretax (< $.01/share) in 2Q'15, and $4m pretax ($.02/share) in 4Q'15; excludes $12m pretax ($.05/share) one-time noncash pension buyout charge in 4Q'15. |
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4EBITDA based on trailing twelve months. Excludes items in Footnote 3. |
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