Leggett & Platt Announces Record Full-Year EPS
- 2015 continuing operations adjusted1 EPS was a record
$2.34 , a 31% improvement over 2014 - Three-year TSR2 ending
12-31-2015 ranks in the top third of theS&P 500 companies - 2015 continuing operations sales grew 4%
- 2015 continuing operations adjusted1 EBIT margin improved 270 basis points to 12.9%
- 4Q continuing operations adjusted3 EPS grew 56% to
$.64 - 2016 continuing operations EPS guidance is
$2.30 – 2.50 on sales of$3.9 – 4.1 billion
Diversified manufacturer
Full-year EPS, without adjustments, improved to a record
Fourth Quarter |
Full Year |
||||||||
EPS, $/share: |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
|||
Continuing Operations, adjusted |
.64 |
.41 |
56% |
2.34 |
1.78 |
31% |
|||
Lump Sum Pension Buyout |
(.05) |
-- |
(.05) |
-- |
|||||
Foam Litigation Accrual |
(.02) |
(.09) |
(.02) |
(.23) |
|||||
Continuing Operations |
.57 |
.32 |
2.27 |
1.55 |
|||||
Discontinued Operations, adjusted |
-- |
(.03) |
.01 |
(.04) |
|||||
Divestiture Loss |
-- |
(.03) |
-- |
(.03) |
|||||
Noncash Impairment: Store Fixtures |
-- |
-- |
-- |
(.65) |
|||||
Foam Litigation Accrual |
-- |
(.12) |
-- |
(.15) |
|||||
EPS, as reported |
.57 |
.14 |
2.28 |
.68 |
|||||
Net Sales, Continuing Ops, $m |
945 |
953 |
(1)% |
3,917 |
3,782 |
4% |
Full-year sales from continuing operations were
Fourth Quarter Results
Fourth quarter adjusted3 EPS from continuing operations was
Fourth quarter 2015 EPS, unadjusted, was
Fourth quarter 2015 sales from continuing operations declined 1% versus the prior year. Unit volume grew 3% and acquisitions added 1% to sales; these gains were offset by a 5% decline caused by raw material-related price deflation and currency impacts.
CEO Comments
President and CEO
"Our stock's 2015 TSR was 1.4%, which slightly beat the TSR of the
"During 2015, continuing operations posted 4% sales growth, meeting our 4-5% annual growth target. Strong unit volume growth was partially offset by raw material-related deflation and currency. Continuing operations' adjusted EBIT margin was 12.9%, the highest since 1999; margin improved by 270 basis points versus the prior year.
"Portfolio management remains a strategic priority. Over the past few years, we have enhanced our business portfolio and improved margins by growing our stronger businesses, and by exiting businesses that struggled to consistently deliver acceptable margins and returns. In March, we acquired a European private-label manufacturer of high-end upholstered furniture for office, commercial, and other settings. During 2015, we completed divestitures of several relatively small operations including our Steel Tubing business, two final Store Fixtures operations, and a small piece of the Commercial Vehicle Products business.
"Looking forward, we expect strong unit volume growth in 2016 across a number of our businesses. A good portion of the growth is from new product introductions and the resultant market share gains. In addition, broad economic factors – including consumer confidence, housing turnover, and reduced energy prices – are providing favorable trends that should result in end market growth. With this anticipated growth, we expect that in 2016 we will again achieve strong continuing operations' sales, margin, and EPS."
Cash Flow, Dividends and Stock Repurchases
The company generated
2015 marked the company's 44th consecutive annual dividend increase, with a compound annual growth rate of 13% over that period. Only one other
At Friday's closing share price of
The company repurchased 4.3 million shares of its stock during 2015, and issued 2.2 million shares. Issuances were largely related to employee benefit plans and stock option exercises.
Anticipating 2016 EPS of
For 2016, the company expects that sales growth will lead to another year of strong earnings per share. EPS is expected to be
Based upon this sales guidance, 2016 EBIT margin is expected to approximate 2015's adjusted EBIT margin. The benefit to margin from higher unit volume is anticipated to be largely offset by non-recurrence of the 2015 pricing lag. This guidance framework assumes that commodity prices (primarily steel) stabilize near current levels.
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.
LIFO
All of Leggett's operating segments use the first-in, first out (FIFO) method for valuing inventory. An adjustment is made at the corporate level (i.e., outside the segments) to convert about 50% of the inventories to the last-in, first-out (LIFO) method. These are primarily the company's domestic, steel-related inventories. For 2015, lower commodity costs resulted in a LIFO benefit of
SEGMENT RESULTS – Full Year 2015 (versus 2014)
Residential Furnishings – Total sales increased
Commercial Products – Total sales increased
Industrial Materials – Total sales decreased
Specialized Products – Total sales increased
SEGMENT RESULTS – Fourth Quarter 2015 (versus 4Q 2014)
Residential Furnishings – Total sales decreased
Commercial Products – Total sales increased
Industrial Materials – Total sales decreased
Specialized Products – Total sales increased
Conference Call at
Management will host a conference call at
First quarter results will be released after the market closes on
FOR MORE INFORMATION: Visit Leggett's website at www.leggett.com.
COMPANY DESCRIPTION: For over 130 years
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.
1To aid understanding of underlying operational profitability, adjusted continuing operations figures exclude: foam litigation accruals of
2 TSR = (Change in Stock Price + Dividends) / Beginning Stock Price; assumes dividends are reinvested.
3 To aid understanding of underlying operational profitability, adjusted continuing operations figures exclude: foam litigation accruals of
RESULTS OF OPERATIONS |
FOURTH QUARTER |
YEAR TO DATE |
||||||||||
(In millions, except per share data) |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||||
Net sales (from continuing operations) |
$944.6 |
$953.3 |
(1%) |
$3,917.2 |
$3,782.3 |
4% |
||||||
Cost of goods sold |
711.0 |
749.5 |
2,994.0 |
2,991.9 |
||||||||
Gross profit |
233.6 |
203.8 |
923.2 |
790.4 |
||||||||
Selling & administrative expenses |
115.9 |
132.0 |
(12%) |
416.9 |
449.6 |
(7%) |
||||||
Amortization |
5.2 |
5.2 |
20.8 |
19.7 |
||||||||
Other expense (income), net |
(1.6) |
(1.5) |
(1.0) |
(10.4) |
||||||||
Earnings before interest and taxes |
114.1 |
68.1 |
68% |
486.5 |
331.5 |
47% |
||||||
Net interest expense |
7.6 |
9.1 |
36.7 |
36.0 |
||||||||
Earnings before income taxes |
106.5 |
59.0 |
449.8 |
295.5 |
||||||||
Income taxes |
24.7 |
12.8 |
121.8 |
70.3 |
||||||||
Net earnings from continuing operations |
81.8 |
46.2 |
328.0 |
225.2 |
||||||||
Discontinued operations, net of tax |
0.0 |
(24.6) |
1.2 |
(124.0) |
||||||||
Net earnings |
81.8 |
21.6 |
329.2 |
101.2 |
||||||||
Less net income from non-controlling interest |
(1.3) |
(1.0) |
(4.1) |
(3.2) |
||||||||
Net earnings attributable to L&P |
$ 80.5 |
$ 20.6 |
$ 325.1 |
$ 98.0 |
||||||||
Earnings per diluted share |
||||||||||||
From continuing operations |
$0.57 |
$0.32 |
78% |
$2.27 |
$1.55 |
46% |
||||||
From discontinued operations |
$0.00 |
($0.17) |
$0.01 |
($0.87) |
||||||||
Net earnings per diluted share |
$0.57 |
$0.14 |
$2.28 |
$0.68 |
||||||||
Shares outstanding |
||||||||||||
Common stock (at end of period) |
135.6 |
137.8 |
135.6 |
137.8 |
||||||||
Basic (average for period) |
139.9 |
141.0 |
140.9 |
141.4 |
||||||||
Diluted (average for period) |
141.9 |
143.1 |
142.9 |
143.2 |
||||||||
CASH FLOW |
FOURTH QUARTER |
YEAR TO DATE |
||||||||||
(In millions) |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||||
Net earnings |
$ 81.8 |
$ 21.6 |
$ 329.2 |
$ 101.2 |
||||||||
Depreciation and amortization |
28.2 |
30.3 |
113.2 |
117.9 |
||||||||
Working capital decrease (increase) |
(60.1) |
112.7 |
(170.8) |
53.6 |
||||||||
Impairments |
0.0 |
0.2 |
6.5 |
109.3 |
||||||||
Other operating activity |
52.4 |
1.4 |
81.0 |
(0.1) |
||||||||
Net Cash from Operating Activity |
$ 102.3 |
$ 166.2 |
(38%) |
$ 359.1 |
$ 381.9 |
(6%) |
||||||
Additions to PP&E |
(24.7) |
(31.1) |
(103.2) |
(94.1) |
10% |
|||||||
Purchase of companies, net of cash |
0.0 |
(0.2) |
(11.1) |
(70.4) |
||||||||
Proceeds from asset sales |
33.6 |
64.5 |
51.4 |
76.5 |
||||||||
Dividends paid |
(43.6) |
(42.6) |
(171.6) |
(167.5) |
||||||||
Repurchase of common stock, net |
(27.8) |
(15.4) |
(183.2) |
(127.9) |
||||||||
Additions (payments) to debt, net |
(28.5) |
(45.8) |
(3.3) |
87.0 |
||||||||
Other |
(9.3) |
(5.7) |
(17.7) |
(25.4) |
||||||||
Increase (Decr.) in Cash & Equiv. |
$ 2.0 |
$ 89.9 |
$ (79.6) |
$ 60.1 |
||||||||
FINANCIAL POSITION |
31-Dec |
|||||||||||
(In millions) |
2015 |
2014 |
Change |
|||||||||
Cash and equivalents |
$253.2 |
$332.8 |
||||||||||
Receivables |
520.2 |
523.3 |
||||||||||
Inventories |
504.6 |
481.4 |
||||||||||
Held for sale |
0.0 |
10.4 |
||||||||||
Other current assets |
33.2 |
81.4 |
||||||||||
Total current assets |
1,311.2 |
1,429.3 |
(8%) |
|||||||||
Net fixed assets |
540.8 |
548.8 |
||||||||||
Held for sale |
8.4 |
22.4 |
||||||||||
Goodwill and other assets |
1,107.2 |
1,140.1 |
||||||||||
TOTAL ASSETS |
$2,967.6 |
$3,140.6 |
(6%) |
|||||||||
Trade accounts payable |
$307.2 |
$369.8 |
||||||||||
Current debt maturities |
3.4 |
201.7 |
||||||||||
Held for sale |
0.0 |
5.4 |
||||||||||
Other current liabilities |
390.6 |
415.3 |
||||||||||
Total current liabilities |
701.2 |
992.2 |
(29%) |
|||||||||
Long term debt |
945.4 |
766.7 |
23% |
|||||||||
Deferred taxes and other liabilities |
223.3 |
226.8 |
||||||||||
Equity |
1,097.7 |
1,154.9 |
(5%) |
|||||||||
Total Capitalization |
2,266.4 |
2,148.4 |
||||||||||
TOTAL LIABILITIES & EQUITY |
$2,967.6 |
$3,140.6 |
SEGMENT RESULTS 1 |
FOURTH QUARTER |
YEAR TO DATE |
||||||||||
(In millions) |
2015 |
2014 |
Change |
2015 |
2014 |
Change |
||||||
External Sales |
||||||||||||
Residential Furnishings |
$ 490.3 |
$ 503.6 |
(2.6%) |
$2,036.2 |
$1,937.4 |
5.1% |
||||||
Commercial Products |
130.7 |
123.8 |
5.6% |
539.8 |
471.6 |
14.5% |
||||||
Industrial Materials |
91.4 |
107.1 |
(14.7%) |
427.6 |
492.0 |
(13.1%) |
||||||
Specialized Products |
232.2 |
218.8 |
6.1% |
913.6 |
881.3 |
3.7% |
||||||
Total |
$ 944.6 |
$ 953.3 |
(0.9%) |
$3,917.2 |
$3,782.3 |
3.6% |
||||||
Total Sales (External + Inter-segment) |
||||||||||||
Residential Furnishings |
$ 496.1 |
$ 508.8 |
(2.5%) |
$2,064.0 |
$1,957.6 |
5.4% |
||||||
Commercial Products |
151.7 |
138.3 |
9.7% |
623.3 |
515.4 |
20.9% |
||||||
Industrial Materials |
166.0 |
196.7 |
(15.6%) |
776.6 |
813.3 |
(4.5%) |
||||||
Specialized Products |
243.2 |
227.4 |
6.9% |
954.7 |
914.2 |
4.4% |
||||||
Total |
$1,057.0 |
$1,071.2 |
(1.3%) |
$4,418.6 |
$4,200.5 |
5.2% |
||||||
EBIT |
||||||||||||
Residential Furnishings |
$ 44.0 |
$ 16.4 |
168% |
$ 205.0 |
$ 135.7 |
51% |
||||||
Commercial Products |
9.0 |
8.1 |
11% |
42.3 |
30.9 |
37% |
||||||
Industrial Materials |
11.9 |
10.4 |
14% |
50.4 |
43.2 |
17% |
||||||
Specialized Products |
40.6 |
32.3 |
26% |
155.6 |
125.4 |
24% |
||||||
Intersegment eliminations and other |
(14.5) |
0.2 |
(13.2) |
(2.8) |
||||||||
Change in LIFO reserve |
23.1 |
0.7 |
46.4 |
(0.9) |
||||||||
Total |
$ 114.1 |
$ 68.1 |
68% |
$ 486.5 |
$ 331.5 |
47% |
||||||
EBIT Margin 2 |
Basis Pts |
Basis Pts |
||||||||||
Residential Furnishings |
8.9% |
3.2% |
570 |
9.9% |
6.9% |
300 |
||||||
Commercial Products |
5.9% |
5.9% |
0 |
6.8% |
6.0% |
80 |
||||||
Industrial Materials |
7.2% |
5.3% |
190 |
6.5% |
5.3% |
120 |
||||||
Specialized Products |
16.7% |
14.2% |
250 |
16.3% |
13.7% |
260 |
||||||
Overall from Continuing Operations |
12.1% |
7.1% |
500 |
12.4% |
8.8% |
360 |
||||||
LAST SIX QUARTERS |
2014 |
2015 |
||||||||||
Selected Figures |
3Q |
4Q |
1Q |
2Q |
3Q |
4Q |
||||||
Net Sales ($ million) |
997 |
953 |
966 |
997 |
1,009 |
945 |
||||||
Sales Growth (vs. prior year) |
14% |
11% |
10% |
4% |
1% |
(1%) |
||||||
Adjusted EBIT 3 |
107 |
90 |
112 |
121 |
142 |
130 |
||||||
Cash from Operations ($ million) |
132 |
166 |
32 |
95 |
130 |
102 |
||||||
Adjusted EBIT Margin3 |
10.7% |
9.5% |
11.6% |
12.1% |
14.0% |
13.8% |
||||||
Adjusted EPS - continuing operations (diluted)3 |
$0.51 |
$0.41 |
$0.50 |
$0.53 |
$0.67 |
$0.64 |
||||||
Adjusted EBITDA (trailing twelve months) 4 |
489 |
503 |
529 |
545 |
579 |
617 |
||||||
(Long term debt + current maturities) / Adj. EBITDA4 |
2.0 |
1.9 |
1.9 |
1.9 |
1.7 |
1.5 |
||||||
Net Debt to Net Capitalization |
||||||||||||
Long term debt |
619 |
767 |
798 |
832 |
989 |
945 |
||||||
Current debt maturities |
382 |
202 |
202 |
202 |
3 |
3 |
||||||
Less cash and equivalents |
(243) |
(333) |
(262) |
(275) |
(251) |
(253) |
||||||
Net Debt |
758 |
636 |
738 |
758 |
741 |
696 |
||||||
Total capitalization |
2040 |
2148 |
2150 |
2180 |
2315 |
2266 |
||||||
Current debt maturities |
382 |
202 |
202 |
202 |
3 |
3 |
||||||
Less cash and equivalents |
(243) |
(333) |
(262) |
(275) |
(251) |
(253) |
||||||
Net Capitalization |
2179 |
2017 |
2090 |
2106 |
2067 |
2017 |
||||||
Long Term Debt to Total Capitalization |
30% |
36% |
37% |
38% |
43% |
42% |
||||||
Net Debt to Net Capital |
35% |
32% |
35% |
36% |
36% |
34% |
||||||
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) |
3Q |
4Q |
1Q |
2Q |
3Q |
4Q |
||||||
Residential Furnishings |
13% |
9% |
9% |
2% |
(2%) |
(3%) |
||||||
Commercial Products |
10% |
24% |
17% |
18% |
15% |
(1%) |
||||||
Industrial Materials |
9% |
9% |
12% |
(4%) |
(10%) |
(16%) |
||||||
Specialized Products |
12% |
6% |
6% |
0% |
5% |
7% |
||||||
Overall from Continuing Operations |
9% |
6% |
6% |
(1%) |
(1%) |
(2%) |
||||||
1Segment information reflects new segment structure adopted 1Q 2015, and the 4Q 2015 move of the logistics operations from Residential Furnishings to Industrial Materials. |
||||||||||||
2Segment margins calculated on Total Sales. Overall company margin calculated on External Sales. |
||||||||||||
3Excludes litigation accruals of $32m pretax ($.14/share) in 3Q'14, $22m pretax ($.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. |
||||||||||||
4EBITDA based on trailing twelve months. Excludes $67m CVP impairment in 4Q 2013, and items in Footnote 3. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/leggett--platt-announces-record-full-year-eps-300213088.html
SOURCE
Investor Relations, (417) 358-8131 or invest@leggett.com, David M. DeSonier, Senior Vice President of Corporate Strategy and Investor Relations, Susan R. McCoy, Vice President of Investor Relations