UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 14, 2014
LEGGETT & PLATT, INCORPORATED
(Exact name of registrant as specified in its charter)
| Missouri | 001-07845 | 44-0324630 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| No. 1 Leggett Road, Carthage, MO | 64836 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 417-358-8131
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On July 14, 2014, Leggett & Platt, Incorporated issued a press release announcing that it had concluded that an impairment of goodwill exists with respect to its Store Fixtures group. The goodwill impairment will be included in the financial results of the Company for the second quarter ended June 30, 2014. The press release is attached as Exhibit 99.1 and is incorporated herein by reference.
The information included in Item 2.06 below is incorporated into this item by reference.
The information included in Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any document filed under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 2.06 Material Impairments.
On July 14, 2014, the Company’s management concluded that under generally accepted accounting principles an impairment charge is required relating to the goodwill of its Store Fixtures group, which is part of the Commercial Fixturing & Components Segment. We estimate the non-cash charge will be $108 million (pre-tax) and will be recorded in the second quarter 2014 financial results. The impairment charge reflects the complete write-off of the goodwill associated with the Store Fixtures group and, at this time, is not expected to result in future cash expenditures.
The Store Fixtures group is dependent upon capital spending by retailers on both new stores and remodeling of existing stores. Although 2012 performance was better than expected, 2013 performance fell short of expectations. Because of the seasonal nature of the fixture & display industry (where revenue and profitability are typically expected to increase in the second and third quarters assuming the normal historical pattern of heavy shipments during these months) we reasonably anticipated being awarded significant customer orders in the second quarter of 2014. However, as the second quarter progressed, anticipated orders did not materialize and the Store Fixtures group business deteriorated, most pronounced in May and June. As part of our normal second quarter annual goodwill impairment review we concluded that an impairment charge was required. This stems from our lower current expectations of future revenue and profitability, reflecting reduced market demand for the shelving, counters, showcases and garment racks the Store Fixtures group supplies to major retailers.
The Company has engaged an investment banker and is exploring strategic alternatives regarding the Store Fixtures group, including the possibility of divestiture of this business.
Forward-Looking Statements. This report, and our other public disclosures, whether written or oral, may contain “forward-looking statements” including, but not limited to, the estimates of amounts of impairment charges related to the Store Fixtures group, and the strategic alternatives chosen for the Store Fixtures group. These statements are identified either by the context in which they appear or by use of words such as “anticipated,” “believe,” “estimate,” “expected,” “expectations,” “intends,” “may,” “plans,” “should” or the like. All such forward-looking statements are expressly qualified by the cautionary statements described in this provision. Any forward-looking statement reflects only the beliefs of the Company or its management at the time the statement is made. Because all forward-looking statements deal with the future, they are subject to risks, uncertainties and developments which might cause actual events or results to differ materially from those envisioned or reflected in any forward-looking statement. Moreover, we do not have, and do not undertake, any duty to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement was made. For all of these reasons, forward-looking statements should not be relied upon as a prediction of actual future events, objectives, strategies, trends or results. It is not possible to anticipate and list all risks, uncertainties and developments which may cause actual events or results to differ from forward-looking statements. However, some of these risks and uncertainties include: (i) the preliminary nature of the impairment estimates associated with the Store Fixture group and the possibility the estimates may change as the Company’s analysis develops and additional information is obtained; (ii) a further decline or improvement in the long-term outlook for the Store Fixtures group; (iii) the pursuit of different strategic
alternatives for the Store Fixtures group; (iv) the possibility of long-lived asset impairment associated with the Store Fixtures group; (v) the underlying assumptions relating to the forward-looking statements; and (vi) other factors described under “Forward-Looking Statements” and “Risk Factors” in the Company’s Form 10-K filed February 26, 2014, as updated by the Company’s Form 10-Q.
Item 7.01 Regulation FD Disclosure.
The information contained in Exhibit 99.1 attached hereto is incorporated into this item by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
Description | |
| 99.1 | Press Release dated July 14, 2014 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LEGGETT & PLATT, INCORPORATED | ||||||
| Date: July 14, 2014 | By: | /s/ JOHN G. MOORE | ||||
| John G. Moore | ||||||
| Senior Vice President - Chief Legal & HR Officer and Secretary | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press Release dated July 14, 2014 | |
Exhibit 99.1
FOR IMMEDIATE RELEASE: JULY 14, 2014
LEGGETT & PLATT TO RECORD NON-CASH IMPAIRMENT IN STORE FIXTURES
Carthage, MO, July 14, 2014 ---
| • | 2Q non-cash goodwill impairment charge of $108 million (pre-tax) |
| • | 2Q EPS impact of $.65 per share |
| • | Apart from this charge, underlying guidance for 2014 was not updated |
| • | Company has engaged an investment banker to help explore strategic alternatives for its Store Fixtures business, including possible divestiture |
Leggett & Platt expects to record a $108 million pre-tax, non-cash goodwill impairment charge for the second quarter. This charge reflects the complete write off of the goodwill associated with the Store Fixtures group, which is part of the Commercial Fixturing & Components segment. The EPS impact of the non-cash charge is expected to be 65 cents per share. Apart from this impairment, the company has made no update to the underlying full year EPS guidance issued in April.
As previously disclosed, the Store Fixtures group’s 2013 performance fell short of expectations. Performance did not rebound during the second quarter of 2014 as expected, with the deterioration of revenue and profitability most pronounced in May and June. Consequently, it has become apparent that the current market value of the Store Fixtures unit has fallen below its recorded book value. This stems from lower current expectations of future revenue and profitability, reflecting reduced market demand for the shelving, counters, showcases and garment racks the company supplies to major retailers.
The company has engaged an investment banker and is exploring strategic alternatives, including the possible divestiture of this business unit.
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FOR MORE INFORMATION: Visit Leggett’s website at www.leggett.com.
COMPANY DESCRIPTION: Leggett & Platt (NYSE: LEG) is a diversified manufacturer (and member of the S&P 500) that conceives, designs and produces a variety of engineered components and products that can be found in most homes, offices, and automobiles. The 131-year-old firm is comprised of 19 business units, 19,000 employee-partners, and 130 manufacturing facilities located in 18 countries.
Leggett & Platt is the leading U.S. manufacturer of: a) components for residential furniture and bedding; b) office furniture components; c) drawn steel wire; d) automotive seat support and lumbar systems; e) carpet underlay; f) adjustable bed bases; and g) bedding industry machinery.
FORWARD-LOOKING STATEMENTS: Statements in this release that are not historical in nature are “forward-looking.” These statements are identified either by the context in which they appear or by use of words such as “expected” or “expects.” These statements involve uncertainties and risks, including the preliminary nature of estimates related to goodwill impairment and the possibility that the estimates may change as the company’s analysis develops and additional information is obtained, the possibility of long-lived asset impairment associated with the Store Fixtures business, the pursuit of different strategic alternatives for the Store Fixtures business, 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, 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
| • | David M. DeSonier, Senior Vice President of Strategy and Investor Relations |
| • | Susan R. McCoy, Staff Vice President of Investor Relations |