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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________________ to ___________________
Commission File Number 1-7845
LEGGETT & PLATT, INCORPORATED
(Exact name of Registrant as specified in its charter)
MISSOURI 44-0324630
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
NO. 1--LEGGETT ROAD 64836
CARTHAGE, MISSOURI
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (417) 358-8131
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Common Stock, New York Stock Exchange
$.01 par value Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. / /
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $1,582,608,398.
There were 40,733,066 shares of the Registrant's common stock outstanding as
of February 25, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held May 11, 1994, are incorporated by reference
into Part III of this report.
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS. The Company was incorporated in 1901 as
the successor to a partnership formed in 1883 at Carthage, Missouri. That
partnership was a pioneer in the manufacture and sale of steel coil bedsprings.
Products produced and sold for the furnishings industry constitute the largest
portion of the Company's business. These include primarily components used by
companies making furniture and bedding for homes, offices and institutions. Also
in the furnishings area, the Company produces and sells some finished furniture
and carpet cushioning materials. In addition, a group of diversified products is
produced and sold. The Company believes it is the largest producer of a diverse
range of furniture and bedding components in the United States. The term
"Company," unless the context requires otherwise, refers to Leggett & Platt,
Incorporated and its majority owned subsidiaries.
The Company completed several acquisitions during 1993, primarily businesses
engaged in manufacturing components for the furnishings industry and raw
materials used by the Company in the manufacture of its products.
In September 1993 the Company acquired Hanes Holding Company ("Hanes"),
headquartered in Winston-Salem, North Carolina. Hanes is a converter and
distributor of woven and nonwoven construction fabrics, primarily in the
furnishings industry. Hanes also is a commission dye/finisher of nonfashion
fabrics for the furnishings and apparel industries. Immediately following the
Company's acquisition of Hanes, the Company (through Hanes) completed the
acquisition of VWR Textiles & Supplies, Inc., which converts and distributes
woven and nonwoven construction fabrics and manufactures other soft goods
components for sale to manufacturers of furniture and bedding.
Also, in September 1993 the Company acquired full ownership of several wire
drawing mills which had been previously jointly owned.
For further information concerning acquisitions reference is made to Note B
of the Notes to Consolidated Financial Statements.
PRODUCTS AND MARKET. The Company is engaged primarily in the manufacture
and distribution of components used by companies that manufacture furniture and
bedding for homes, offices and institutions. Manufacturers of finished furniture
and bedding use many component parts which can be standardized and more
efficiently produced in volumes beyond the individual needs of most such
manufacturers. It is this market for component parts which the Company serves
through its furniture and bedding component product lines.
The Company's components customers manufacture bedding (mattresses and
boxsprings), upholstered furniture and other finished products for sale to
wholesalers, retailers, institutions and others. Historically, the furnishings
industry has been highly fragmented and included many relatively small
companies, widely dispersed geographically. Although there has been a trend
toward consolidation in the furnishings industry, the industry as a whole
remains fragmented to a substantial degree.
The Company's component products are sold and distributed primarily through
the Company's sales personnel.
In addition to components, the Company manufactures and sells finished
products for the furnishings industry. These finished products include
sleep-related finished furniture and carpet cushioning materials. Some of the
finished furniture products are sold to bedding and furniture manufacturers
which resell the finished furniture under their own labels to wholesalers or
retailers. Certain finished furniture such as bed frames, fashion beds, daybeds
and other select items are also sold by the Company directly to retailers. The
Company's carpet cushioning materials are sold primarily to floor covering
distributors with some direct contract sales.
1
The following list is representative of the principal products produced by
the Company in the furnishings industry:
BEDDING COMPONENTS
Lectro-LOK-R-, Web-LOK-TM-, LOK-Fast-TM-,
Flex-Deck-TM-, and Semiflex-TM- boxspring
components
Edge and corner stabilizer spring supports
Foam and fiber cushioning materials
Gribetz computerized single needle (Class V)
and multi-needle chain stitch (Class I-IV)
quilting machinery, material handling
systems, panel cutters, tape edge and
border serging machines
Hanes construction fabrics
Mira-Coil-R-, Super-Lastic-R-,
Lura-Flex-TM-, Hinge Flex-TM-, and
Ever-Flex-TM- innerspring assemblies for
mattresses
Mounted and crated boxsprings and foundation
units
Nova-Bond-R- and other insulator pads for
mattresses and boxsprings
Perm-A-Lator-R-, Plasteel-R-,
Posturizer-TM-, Flexnet-TM- and other
mattress insulators
Spring and basic wire
Synthetic, wool, cotton, and silk cushioning
materials
Wood frames and dimension lumber for
boxspring frames
FINISHED PRODUCTS
Bed frames
Bunk beds made of wood and steel
Daybeds made of brass and wood
Electric beds
Genuine Brass, Lustre Brass-R- and other
metal fashion beds and headboards
Pedestal bed bases
DURAPLUSH-TM-, Permaloom-R- and other carpet
cushioning materials
Rollaway beds
Trundle beds
Wood headboards
FURNITURE COMPONENTS
Chair controls, casters and other components
for office furniture
ClassicTouch-TM- and Modular Wallhugger-R-
mechanisms for motion upholstered groups
Coil-Flex-TM- and ModuCoil-R- spring
assemblies for upholstered furniture
Components for office panel systems
Die cast aluminum, fabricated steel, and
injection molded plastic bases for office
furniture and dinettes
Flex-Cord-R- paper covered wire
Hanes construction fabrics
Mechanisms for adjustable height work tables
MPI/No-Sag-R- and other foam cushioning
No-Sag-R- seating systems and clips
Metal bed rails for bedroom suites
Molded plastic recliner handles and other
plastic furniture components
No-Sag-R- rocker springs
Perm-A-Lator-R- wire seating insulators
Perma-eze-R- seat and back springs
PETCO weltcord and furniture edgings
Ring-Flex-R- polyethylene foam edgings
SOFA PLUS-TM-, MAX-R-, and Classic-TM-
Series sofa sleeper mechanisms
Spring wire
Swivel, rocker and glider components for
motion furniture
Synthetic fiber, densified fiber batting,
seat pads and other cushioning materials
System Seating-TM-, Seat Pleaser-R- and
other furniture coils and accessories
Tackit-TM- tackstrips
Wallhugger-R- and Concept-TM- mechanisms for
reclining chairs
Webline-TM- seating systems
Welded steel tubing
Outside the furnishings industry, the Company produces and sells for home,
industrial and commercial uses a diversified line of components and other
products made principally from steel, steel wire, aluminum, plastics, textile
fibers and woven and nonwoven fabrics. The Company's diversified products
require manufacturing technologies similar to those used in making furniture and
bedding components and certain raw materials which the Company produces for its
own use.
2
The following list is representative of the Company's principal diversified
products:
DIVERSIFIED PRODUCTS
Aluminum die cast custom products and
aluminum ingot
Cyclo-Index-R- motion controls for
manufacturing equipment
Flex-O-Lators-R- and No-Sag-R- automotive
seat suspension systems
Gribetz single needle quilters, multi-needle
chain stitch quilters, and panel cutters
Hanes industrial and apparel fabrics
Industrial wire
Injection molded plastic products
Mechanical springs
Metal and wire shelving for utility vehicles
and consumer products
Point-of-purchase display racks
Sound insulation materials
Specialty foam products
Textile fiber wiping cloths and other
products
Welded steel tubing
The table below sets out further information concerning sales of each class
of the Company's products:
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SUMMARY OF SALES 1993-1988
1993 1992 1991 1990 1989 1988
------------ ------------ ------------ ------------ ------------ -----------
(DOLLAR AMOUNTS IN MILLIONS)
AMOUNT
Furnishings Products
Bedding Components.............. $ 471.1 $ 409.8 $ 364.9 $ 358.4 $ 323.4 $ 257.3
Furniture Components............ 405.4 345.5 326.9 357.6 332.7 256.5
Finished Products............... 271.3 258.8 250.9 244.4 198.7 152.3
------------ ------------ ------------ ------------ ------------ -----------
Total Furnishings Products.......... 1,147.8 1,014.1 942.7 960.4 854.8 666.1
Diversified Products.............. 378.9 300.9 278.7 270.9 262.6 193.2
------------ ------------ ------------ ------------ ------------ -----------
Net Sales..................... $ 1,526.7 $ 1,315.0 $ 1,221.4 $ 1,231.3 $ 1,117.4 $ 859.3
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
PERCENT OF TOTAL
Furnishings Products
Bedding Components.............. 30.9% 31.1% 29.9% 29.1% 28.9% 29.9%
Furniture Components............ 26.5 26.3 26.8 29.0 29.8 29.9
Finished Products............... 17.8 19.7 20.5 19.9 17.8 17.7
------------ ------------ ------------ ------------ ------------ -----------
Total Furnishings Products.......... 75.2 77.1 77.2 78.0 76.5 77.5
Diversified Products.............. 24.8 22.9 22.8 22.0 23.5 22.5
------------ ------------ ------------ ------------ ------------ -----------
Net Sales..................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
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Previously reported amounts have been restated to reflect pooling of interests
acquisitions.
Reference is also made to Note I of the Notes to Consolidated Financial
Statements for further segment information.
The Company's international division is involved primarily in the sale of
machinery and equipment designed to manufacture the Company's Mira-Coil-R-
(Continuous Coil) innersprings and certain other spring products and the
licensing of patents owned and presently maintained by the Company in a number
of foreign countries. The Company also sells quilting machines and similar
equipment and certain other component products in some foreign countries.
Foreign sales are a minor portion of the Company's business.
3
CUSTOMERS. The Company has several thousand customers, most of which are
engaged in manufacturing finished bedding and furniture products. None of the
Company's customers account for as much as 10% of sales and, in management's
opinion, the loss of any single customer would not have a material adverse
effect on the Company's business as a whole.
SOURCES OF RAW MATERIALS. Steel rod (from which steel wire is drawn) and
coil steel are the Company's most important raw materials. Other raw materials
used by the Company include aluminum ingot, aluminum scrap, angle steel, sheet
steel, various woods, textile scrap, foam chemicals, foam scrap, woven and
nonwoven fabrics and plastic.
Substantially all of the Company's requirements for steel wire, an important
component in many of the Company's products, are supplied by Company-owned wire
drawing mills. A substantial portion of the steel rod used by these wire drawing
mills is purchased pursuant to a rod supply agreement with a major steel rod
producer. The Company also produces, at various locations, for its own
consumption and for sale to customers not affiliated with the Company, slit coil
steel, welded steel tubing, textile fibers, dimension lumber and aluminum ingot.
Numerous supply sources for the raw materials used by the Company are
available. The Company did not experience any significant shortages of raw
materials during the past year.
PATENTS: RESEARCH AND DEVELOPMENT. The Company holds numerous patents
concerning its various product lines. No single patent or group of patents is
material to the Company's business as a whole. The Company's more significant
trademarks include those listed with the Company's principal products.
The Company maintains research, engineering and testing centers at Carthage,
Missouri, and also does research and development work at several of its other
facilities. The Company is unable to precisely calculate the cost of research
and development since the personnel involved in product and machinery
development also spend portions of their time in other areas. However, the
Company believes that the cost of research and development approximated $5
million in each of the last three years.
EMPLOYEES. The Company has approximately 13,000 employees of whom
approximately 10,000 are engaged in production. Approximately 40% of the
Company's production employees are represented by labor unions.
The Company did not experience any material work stoppage related to the
negotiation of contracts with labor unions during 1993. Management is not aware
of any circumstance which is likely to result in a material work stoppage
related to the negotiations of any contracts expiring during 1994.
COMPETITION. The markets for components and other products the Company
produces are highly competitive in all aspects. There are numerous companies
offering products which compete with those products offered by the Company. The
Company believes it is the largest supplier in the United States of a diverse
range of furniture and bedding components to the furnishings industry.
GOVERNMENT REGULATION. The Company's various operations are subject to
federal, state, and local laws and regulations related to the protection of the
environment, worker safety, and other matters. Environmental regulations include
those relating to air and water emissions, underground storage tanks, waste
handling, and the like. While the Company cannot forecast policies that may be
adopted by various regulatory agencies, management believes that compliance with
these various laws and regulations will not have a material adverse effect on
the consolidated financial condition or results of operations of the Company.
From time to time, the Company is involved in proceedings, or takes remedial or
other actions, relating to environmental matters. In one instance, the United
States Environmental Protection Agency ("EPA") has directed one of the Company's
subsidiaries to investigate potential releases into the environment and, if
necessary, to perform corrective action. The subsidiary appealed the EPA's
action. On February 4, 1994, the EPA Environmental Appeals Board
4
remanded the matter to the EPA for further proceedings. One-half of any costs
associated with any such investigation or corrective action would be reimbursed
to the Company under a contractual obligation of a former joint owner of the
subsidiary. The outcome of this matter cannot be reasonably predicted.
Accordingly, no provision for the cost of performing any required investigation
and corrective action has been recorded on the books of the Company. Management
believes the cost to perform any investigation and corrective action, if
eventually required, will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company.
ITEM 2. PROPERTIES
The Company owns or leases approximately 150 facilities throughout the
United States and Canada. Its corporate headquarters is located in Carthage,
Missouri. The Company's most important physical properties are its owned or
leased manufacturing plants. Such plants include five wire drawing mills in
Missouri, Florida, Kentucky, Indiana and Massachusetts; welded steel tubing
mills in Mississippi and Tennessee; and an aluminum smelting plant in Alabama.
All of these mills manufacture some products which are either transferred to and
used by the Company's other manufacturing plants, or are sold to others. Other
major manufacturing plants are located in Alabama, Arkansas, California,
Georgia, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Mississippi,
Missouri, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Wisconsin, and
Canada. In addition, the Company owns or leases a large number of other
facilities located in approximately 30 states utilized mainly for assembly,
warehousing and distribution of Company products.
Most of the Company's major manufacturing plants are owned by the Company or
are held under operating leases. Leases expire at various dates through 2010.
For additional information regarding lease obligations, reference is made to
Note E of the Notes to Consolidated Financial Statements.
The Company's machinery, equipment and buildings are maintained in good
condition and are suitable for its current operations.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in numerous ordinary, routine workers'
compensation, product liability, vehicle accident, employment termination, and
other claims and legal proceedings, the resolution of which Management believes
will not have a material adverse effect on the consolidated financial condition
or results of operations of the Company.
The Company is presently party to a small number of proceedings in which a
governmental authority is a party and which involve provisions enacted
regulating the discharge of materials into the environment. These proceedings
deal primarily with waste disposal site remediation. Management believes that
potential monetary sanctions, if imposed in any or all of these proceedings, or
any capital expenditures or operating expenses attributable to these
proceedings, will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company. The EPA has alleged
that two of the Company's facilities in Grafton, Wisconsin violated wastewater
pretreatment requirements under the Clean Water Act. No action is pending. The
EPA has not requested any specific relief, but has indicated it intends to bring
an action. Management believes the cost to resolve this matter will not have a
material adverse effect on the consolidated financial condition or results of
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
5
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED SHAREHOLDER MATTERS
Leggett & Platt's common stock is listed on The New York and Pacific Stock
Exchanges with the trading symbol LEG. The table below highlights quarterly and
annual stock market information for the last two years.
PRICE RANGE
-------------------- VOLUME OF DIVIDEND
HIGH LOW SHARES TRADED DECLARED
--------- --------- ------------- -----------
1993:
Fourth Quarter.................................. $ 50.000 $ 40.500 3,338,100 $ .14
Third Quarter................................... 46.750 37.000 4,463,200 .14
Second Quarter.................................. 39.125 32.875 3,073,400 .13
First Quarter................................... 39.625 34.125 3,897,300 .13
For the Year.................................... 50.000 32.875 14,772,000 .54
1992:
Fourth Quarter.................................. $ 34.250 $ 23.375 5,063,100 $ .12
Third Quarter................................... 25.250 21.875 3,427,600 .12
Second Quarter.................................. 26.063 21.250 8,665,400 .11
First Quarter................................... 23.500 19.125 5,492,400 .11
For the Year.................................... 34.250 19.125 22,648,500 .46
Price and volume data reflect composite transactions and closing prices as
reported daily by The Wall Street Journal adjusted, as appropriate, for a
2-for-1 stock split on June 15, 1992.
At February 25, 1994 the Company had approximately 6,969 shareholders of
record.
ITEM 6. SELECTED FINANCIAL DATA
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
SUMMARY OF OPERATIONS
Net sales......................................... $ 1,526.7 $ 1,315.0 $ 1,221.4 $ 1,231.3 $ 1,117.4
Earnings from continuing operations............... 85.9 65.4 40.0 30.2 48.9
Earnings per share................................ 2.09 1.64 1.08 .82 1.34
Cash dividends declared per share................. .54 .46 .43 .42 .37
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
SUMMARY OF FINANCIAL POSITION
Total assets...................................... $ 901.9 $ 772.0 $ 746.7 $ 768.8 $ 662.6
Long-term debt.................................... 165.8 147.9 232.7 269.4 205.0
---------- ---------- ---------- ---------- ----------
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Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
Results of operations for 1990 reflect a restructuring charge of $20.3
pre-tax and $14.3 after tax, or $.39 per share.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's previously issued financial statements have been restated to
reflect pooling of interests acquisitions. Therefore, the following discussion
and analysis reflects the Company's capital resources and liquidity and results
of operations as restated for these acquisitions.
6
CAPITAL RESOURCES AND LIQUIDITY
The Company's financial position reflects several important principles and
guidelines of management's capital policy. These include management's belief
that corporate liquidity must always be adequate to support the Company's
projected internal growth rate. At the same time, liquidity must assure
management that the Company will be able to withstand any amount of financial
adversity that can reasonably be anticipated. Management also intends to direct
capital to strategic acquisitions and other investments that provide additional
opportunities for expansion and enhanced profitability.
Financial planning to meet these needs reflects management's belief that the
Company should never be forced to expand its capital resources, whether debt or
equity, at a time not of its choosing. Management also believes that financial
flexibility is more important than maximization of earnings through excessive
leverage.
The Company's primary source of capital to meet these objectives is from
internally generated funds. Operating activities provided $349.1 million in cash
during the last three years. An additional $3.5 million in cash was generated
from the issuance of the Company's common stock. Cash dividends paid on the
stock were $57.2 million and repurchases of stock for the Company's treasury
totaled $3.2 million during the three year period.
Management continuously provides for available credit in excess of the
Company's worst-case projections. Policy guidelines provide that long-term debt,
composed of two "layers", will normally be maintained in a range of 30% to 40%
of total capitalization. Obligations having scheduled maturities are the base
"layer" of debt capital. At the end of 1993, these obligations totaled $122.3
million, consisting primarily of privately placed institutional loans and
tax-exempt industrial development bonds. At the end of 1992, debt with scheduled
maturities totaled $112.5 million, which was down from $135.4 million a year
earlier.
Near the end of the third quarter of 1993, the Company issued $50 million in
unsecured privately placed debt under a medium-term note program. These notes
were issued with average lives of approximately nine years and fixed interest
rates averaging 5.8%. Debt of a company acquired in a September pooling of
interests transaction was repaid with the majority of the proceeds from these
notes. In 1992, the Company also issued approximately $26 million of medium-term
notes near the beginning of the fourth quarter. These notes were issued with
average lives of approximately five years and fixed interest rates averaging
6.15%. Proceeds from the notes issued in 1992 were used to repay debt
outstanding under the Company's revolving bank credit agreements.
Standard & Poor's and Moody's, the nations two leading debt rating agencies,
both increased their ratings of the Company's senior debt in July 1992. Standard
& Poor's increased its rating to A- from BBB+, and Moody's increased its rating
to A3 from Baa1. In March 1992, substantially all of the $40 million of 6 1/2%
convertible subordinated debentures, which had been outstanding at the end of
1991, were converted into 2.1 million shares of the Company's common stock. The
resulting increase in shareholders' equity enhanced the Company's flexibility in
capital management and increased yearly after-tax cash flow by approximately $.7
million.
The Company's second "layer" of debt capital consists of revolving credit
agreements with six banks. Over the years, management has renegotiated these
bank credit agreements to keep pace with the Company's projected growth and to
maintain a highly flexible source of debt capital. When utilized, the credit
under these agreements is a long-term obligation. At the same time, however, the
credit is available for short-term borrowings and repayments. In 1993, there was
$43.5 million in revolving debt outstanding at the end of the year, up from
$35.4 million in 1992. At the end of 1991, $97.3 million in revolving debt was
outstanding. The 1993 increase in revolving debt reflected a portion of funds
borrowed to finance cash acquisitions in the third quarter. In the fourth
quarter of 1993 and prior to recent acquisitions, revolving bank debt was
reduced with internally generated funds. Additional details of long-term debt
outstanding, including scheduled maturities and the revolving credit, are
discussed in Note D of the Notes to Consolidated Financial Statements.
7
Net capital investments to modernize and expand manufacturing capacity
internally totaled $109.0 million in the last three years. During this period,
acquisitions accounted for by the purchase method of accounting involved a net
cash investment of $93.3 million, plus an assumption of $5.7 million in
long-term debt of the acquired businesses. In addition, the Company issued 1.8
million shares of common stock in three acquisitions accounted for as poolings
of interests during this period.
The largest acquisitions were completed during the third quarter of 1993. On
September 1, the Company acquired Hanes Holding Company for 1.6 million shares
of common stock, in a pooling of interests, and purchased VWR Textiles &
Supplies, Inc. (through Hanes) for $26 million in cash. The Company also
purchased full ownership of several wire drawing mills, which previously had
been jointly owned. This transaction involved $33 million, plus the assumption
of $3.6 million in long-term debt. Additional details of acquisitions are
discussed in Note B of the Notes to Consolidated Financial Statements.
The following table shows, in millions, the Company's capitalization at the
end of the three most recent years. It also shows the amount of additional
capital available through the revolving bank credit agreements and the Company's
commercial paper program. The amount of cash and cash equivalents is also shown.
1993 1992 1991
--------- --------- ---------
Long-term debt outstanding:
Scheduled maturities.......................................... $ 122.3 $ 112.5 $ 135.4
Revolving credit.............................................. 43.5 35.4 97.3
--------- --------- ---------
Total long-term debt........................................ 165.8 147.9 232.7
Shareholders' equity............................................ 515.6 441.6 346.3
Unused committed credit......................................... 116.5 139.6 77.7
Cash and cash equivalents....................................... .4 5.2 12.6
The Company has the additional availability of short-term uncommitted credit
from several banks. However, there was no short-term debt outstanding at the end
of any of the last three years. The Company has substantial capital resources to
support additional capital investments at or above recent levels.
Working capital increased $32.5 million in the last three years. To gain
additional flexibility in capital management and to improve the rate of return
on shareholders' equity, the Company continuously seeks efficient use of working
capital. The following table shows the annual turnover on average year-end
working capital, trade receivables and inventories.
1993 1992 1991
---------- ---------- ----------
Working capital turnover (excluding cash and cash equivalents)...... 6.1x 5.8x 5.4x
Trade receivables turnover.......................................... 8.3 8.3 8.2
Inventory turnover.................................................. 5.7 5.4 5.0
Future commitments under lease obligations are described in Note E and
contingent obligations in connection with environmental matters are discussed in
Note J of the Notes to Consolidated Financial Statements.
RESULTS OF OPERATIONS
The results of operations during the last three years reflect various
elements of the Company's long-term growth strategy, along with general trends
in the economy and the furnishings industry. The Company's growth strategy
continues to include both internal programs and acquisitions, which broaden
product lines and provide for increased market penetration and operating
efficiencies. With a continuing emphasis on the development of new and improved
products and advancements in production technology, the Company is able to
consistently offer high quality products, competitively priced.
8
Trends in the general economy were favorable during the last two years.
Economic growth increased in the fourth quarter of 1993, following more modest
growth during most of the year. Consumer confidence also improved near the end
of the year, and final demand for durable goods, including furniture and
bedding, generally remained stronger than the demand for non-durable goods.
Consumers reacted favorably to lower long-term interest rates and increased
availability of credit. In 1992, a post-election recovery in consumer confidence
quickly led to increased consumer spending and accelerated growth in the
economy. However, compared with previous first year recoveries from recessionary
lows, economic improvement was modest during most of 1992. During 1991, the
economy began to recover from recessionary lows early in the year, when the war
in the Middle East ended and consumer confidence temporarily improved. Consumer
confidence soon turned back down and the pace of overall business remained
depressed at the end of 1991.
Demand in the furnishings industry followed a pattern similar to the general
economy during the last three years. Annual growth in retail sales and
manufacturers' shipments of bedding and furniture was somewhat stronger in 1993
than in 1992. Increased consumer spending near the end of the last two years
helped offset some of the seasonal slowdown in demand for bedding, furniture and
other furnishings the industry normally experiences. In 1991, industry sales and
shipments reached recessionary lows in the first quarter, and recovered slowly
during the remainder of the year.
Management is anticipating further modest growth in the economy and the
markets the Company serves in 1994. Severe winter weather and the California
earthquake have impacted overall business activity at the beginning of the year,
in several parts of the country. However, these are temporary adversities.
Management is cautious in its outlook for business generally, primarily because
of concerns about higher income tax rates, proposals for governmental health
care programs, and inflationary trends.
Inflation in the United States generally remained modest during the last
three years. However, the Company experienced renewed inflation in prices for
raw materials, principally steel and wire, throughout 1993. Modest price
increases were implemented on some Company products during the second and third
quarters of 1993 to help offset earlier cost increases and the renewed inflation
in prices for raw materials. However, some of this inflation has not yet been
reflected in the Company's selling prices. Therefore, the Company is continuing
to experience cost/price pressures in affected product lines. In 1992, the
Company was able to refrain from raising prices, as previously weaker economic
conditions had reduced inflation for most raw materials. During 1991, the
Company implemented modest price increases on some products in the second
quarter. Prices for urethane foam products were raised more than others, in
response to the 1990 acceleration in prices for petrochemicals.
The Company's consolidated net sales in 1991 were modestly reduced after the
mid-year divestiture of certain urethane foam operations. At the same time, the
Company's profitability improved through the partial elimination of the
operating losses these operations experienced in 1990. The operating results of
the Company's restructured Fashion Bed Group, which manufactures sleep-related
finished furniture, also began to improve near the end of 1992. In 1993, the
Company's overall profitability reflected improved efficiencies in the remaining
foam operations. The Fashion Bed Group also attained improved efficiencies in
1993, but continues to perform below management's expectations.
The Company's consolidated net sales in 1993 increased 16% over the prior
year. Excluding acquisitions accounted for as purchases, sales increased 10%,
reflecting higher unit volumes and modestly higher prices on some products. In
1992, consolidated net sales increased 8% over 1991, due almost entirely to
higher unit volumes. Sales, excluding purchase acquisitions and divestitures,
also increased 8% in 1992.
9
The following table shows various measures of earnings as a percentage of
sales for the last three years. It also shows the effective income tax rate and
the coverage of interest expense by pre-tax earnings plus interest.
1993 1992 1991
----------- ----------- -----------
Gross profit margin............................................... 22.9% 22.8% 21.4%
Pre-tax profit margin............................................. 9.2 8.1 5.4
Net profit margin................................................. 5.6 5.0 3.3
Effective income tax rate......................................... 39.1 38.5 39.4
Interest coverage ratio........................................... 14.8x 8.9x 4.3x
The Company's profit margins, like sales, continued to improve since 1991.
In 1993, the gross profit margin was substantially unchanged from 1992.
Operating efficiencies resulting from increased sales and production, cost
cutting, and constant attention to cost containment were largely offset by
inflation in prices for some key raw materials. Reflecting this inflation, LIFO
expense reduced the gross profit margin by 0.2% in 1993. This experience was in
contrast to the previous two years, when LIFO income slightly increased gross
profit margins. The replacement cost of the LIFO inventory is discussed in Note
A of the Notes to Consolidated Financial Statements.
The 1993 pre-tax profit margin increased to 9.2% of sales. This improvement
primarily reflected a 0.7% reduction in selling, distribution and administrative
expenses, as a percentage of sales. Increased efficiencies and reduced bad debt
expense contributed to the improvement in operating expense ratios. These
factors and a slight increase in other income more than offset one time charges
related to recent acquisitions and the Company's implementation of new
accounting statements issued by the Financial Accounting Standards Board. The
new accounting statements are mentioned separately at the end of this
discussion, and in Note A of the Notes to Consolidated Financial Statements.
Interest expense, as a percentage of sales, was reduced 0.4% in 1993 and
further improved the pre-tax profit margin. Reduced debt outstanding (before
recent acquisitions) and lower interest rates were reflected in this
improvement.
The effective income tax rate was 39.1% in 1993, up from 38.5% in 1992. In
the third quarter of 1993, corporate federal income tax rates were increased
from 34% to 35%, retroactive to January 1, 1993. Additional details of income
taxes for the last three years are discussed in Note H of the Notes to
Consolidated Financial Statements.
In 1992, the gross profit margin increased to 22.8% of sales. This 1.4%
increase over 1991 primarily reflected an improvement in operating efficiencies
and earlier cost cutting at many locations.
The 1992 pre-tax profit margin increased to 8.1% of sales. In addition to
the improvement in the gross profit margin, the pre-tax margin benefitted from a
0.7% reduction in selling, distribution and administrative expenses, as a
percentage of sales. Improved operating efficiencies and reduced bad debt
expense were reflected in the lower 1992 operating expense ratios.
Interest expense, as a percentage of sales, was reduced 0.6% in 1992 and
further improved the pre-tax profit margin. Reduced debt outstanding and lower
interest rates both contributed to this improvement, which was partially offset
by an increase in other deductions, net of other income. The 1992 earnings
contribution from associated (50% owned) companies was down modestly from 1991.
STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS ADOPTED
The Company adopted three accounting statements in 1993 issued by the
Financial Accounting Standards Board. The new statements included Statement of
Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions;" SFAS No. 109, "Accounting for
Income Taxes;" and SFAS No. 112, "Employers' Accounting for Postemployment
10
Benefits." The Company fully expensed any previously unrecorded liabilities
related to these accounting statements in 1993. The Company's financial
statements, contrary to those of many other companies, have not been impacted in
any significant way by the implementation of the new accounting rules. All new
accounting statements issued by the Financial Accounting Standards Board that
could impact the Company were fully implemented by the end of 1993.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and supplementary data included in
this Report begin on page 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
11
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Reference is made to the sections entitled "Election of Directors" and
"Compliance With Section 16(a) of the Securities Exchange Act of 1934" in the
Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 11, 1994, said section being incorporated by
reference, for a description of the directors of the Company.
The following table sets forth the names, ages and positions of all
executive officers of the Company. Executive officers are elected annually by
the Board of Directors at the first meeting of directors following the Annual
Meeting of Shareholders.
The description of the executive officers of the Company is as follows:
NAME AGE POSITION
- --------------------------- --- -------------------------------------------------------------------------------
Harry M. Cornell, Jr. 65 Chairman of the Board and Chief Executive Officer
Felix E. Wright 58 President, Chief Operating Officer and Director
Roger D. Gladden 48 Senior Vice President and President -- Commercial Products Group
Michael A. Glauber 51 Senior Vice President, Finance and Administration (Principal Financial Officer
and Principal Accounting Officer)
David S. Haffner 41 Senior Vice President and President -- Furniture and Automotive Components
Group
Robert A. Jefferies, Jr. 52 Senior Vice President, Mergers, Acquisitions and Strategic Planning and
Director
Duane W. Potter 62 Senior Vice President and President -- Bedding Components Group
Thomas D. Sherman 49 Vice President, General Counsel and Secretary
Subject to the employment agreements and severance benefit agreements listed
as Exhibits to this Report, officers serve at the pleasure of the Board of
Directors.
Harry M. Cornell, Jr. has served as the Company's Chief Executive Officer,
Chairman of the Board and Chairman of the Board's Executive Committee for more
than the last five years.
Felix E. Wright was elected President in 1985 and has served as Chief
Operating Officer since 1979.
Roger D. Gladden was elected Senior Vice President in 1992. Mr. Gladden has
been President -- Commercial Products Group since 1984 and previously served as
Vice President -- Administration.
Michael A. Glauber was elected Senior Vice President, Finance and
Administration in 1990. Mr. Glauber was elected Vice President -- Finance in
1979 and Vice President -- Finance and Treasurer in 1980.
David S. Haffner was elected Senior Vice President and President --
Furniture and Automotive Components Group in 1992. Mr. Haffner was appointed
President -- Furniture Components Group in 1985 and was elected Vice President
of the Company in 1985.
Robert A. Jefferies, Jr. was elected Senior Vice President, Mergers,
Acquisitions and Strategic Planning in 1990. Mr. Jefferies formerly served as
Vice President and the Senior Vice President, General Counsel and Secretary of
the Company from 1977 through 1992.
Duane W. Potter was elected Vice President in 1978 and Senior Vice President
in 1983. Mr. Potter has been President -- Bedding Components Group since 1985.
Thomas D. Sherman, prior to joining the Company on January 1, 1993, served
as Vice President, General Counsel and Secretary to Coca-Cola Enterprises Inc.
and engaged in the private practice of law.
12
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation and Related Matters" in the
Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 11, 1994, is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Ownership of Common Stock" in the Company's definitive
Proxy Statement for the Company's Annual Meeting of Shareholders to be held on
May 11, 1994, is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The subsection entitled "Related Transactions" of the section entitled
"Executive Compensation and Related Matters" in the Company's definitive Proxy
Statement for the Company's Annual Meeting of Shareholders to be held on May 11,
1994 is incorporated by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
1. FINANCIAL STATEMENTS
The Financial Statements listed below are included in this Report:
- Consolidated Statements of Earnings for each of the years in the three
year period ended December 31, 1993
- Consolidated Balance Sheets at December 31, 1993 and 1992
- Consolidated Statements of Changes in Shareholders' Equity for each of the
years in the three year period ended December 31, 1993
- Consolidated Statements of Cash Flows for each of the years in the three
year period ended December 31, 1993
- Notes to Consolidated Financial Statements
- Report of Independent Accountants
2. FINANCIAL STATEMENT SCHEDULES
Reports of Independent Accountants on Financial Statement Schedules
Schedules (at December 31, 1993 and 1992, and for each of the years in the
three year period ended December 31, 1993)
V -- Property, Plant and Equipment
VI -- Accumulated Depreciation, Depletion and Amortization of Property, Plant
and Equipment
VIII -- Valuation and Qualifying Accounts and Reserves
X -- Supplementary Income Statement Information
All other information schedules have been omitted as the required
information is inapplicable, not required, or the information is included in the
financial statements or notes thereto.
3. EXHIBITS -- See Exhibit Index.
4. REPORTS ON FORM 8-K FILED DURING THE LAST QUARTER OF 1993: None.
13
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
PAGE
---------
Quarterly Summary of Earnings.............................................................................. 15
Consolidated Statements of Earnings........................................................................ 16
Consolidated Balance Sheets................................................................................ 17
Consolidated Statements of Changes in Shareholders' Equity................................................. 18
Consolidated Statements of Cash Flows...................................................................... 19
Notes to Consolidated Financial Statements................................................................. 20
Report of Independent Accountants.......................................................................... 29
14
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
QUARTERLY SUMMARY OF EARNINGS
QUARTER
------------------------------------------------------
FIRST SECOND THIRD FOURTH TOTAL
--------- --------- --------- --------- ----------
(UNAUDITED)
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
Year ended December 31, 1993
Net sales................................................. $ 363.0 $ 371.7 $ 395.4 $ 396.6 $ 1,526.7
Gross profit.............................................. 82.5 85.4 91.1 90.0 349.0
Earnings before income taxes.............................. 32.1 34.4 37.1 37.4 141.0
Net earnings.............................................. 19.6 21.0 22.3 23.0 85.9
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
Earnings per share........................................ $ .48 $ .51 $ .54 $ .56 $ 2.09
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
Year ended December 31, 1992
Net sales................................................. $ 320.5 $ 320.1 $ 340.6 $ 333.8 $ 1,315.0
Gross profit.............................................. 72.3 73.1 78.3 76.2 299.9
Earnings before income taxes.............................. 23.5 24.8 30.6 27.5 106.4
Net earnings.............................................. 14.5 15.6 18.8 16.5 65.4
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
Earnings per share........................................ $ .37 $ .39 $ .47 $ .41 $ 1.64
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of interests
acquisitions.
15
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
YEAR ENDED DECEMBER 31
1993 1992 1991
---------- ---------- ----------
(DOLLAR AMOUNTS IN MILLIONS,
EXCEPT PER SHARE DATA)
Net sales........................................................... $ 1,526.7 $ 1,315.0 $ 1,221.4
Cost of goods sold.................................................. 1,177.7 1,015.1 959.7
---------- ---------- ----------
Gross profit...................................................... 349.0 299.9 261.7
Selling, distribution and administrative expenses................... 192.4 175.2 171.2
Interest expense.................................................... 10.2 13.5 19.9
Other (income) and deductions, net.................................. 5.4 4.8 4.6
---------- ---------- ----------
Earnings before income taxes...................................... 141.0 106.4 66.0
Income taxes........................................................ 55.1 41.0 26.0
---------- ---------- ----------
Net Earnings...................................................... $ 85.9 $ 65.4 $ 40.0
---------- ---------- ----------
---------- ---------- ----------
Earnings Per Share................................................ $ 2.09 $ 1.64 $ 1.08
---------- ---------- ----------
---------- ---------- ----------
The accompanying notes are an integral part of these financial statements.
16
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
ASSETS
1993 1992
--------- ---------
(DOLLAR AMOUNTS IN
MILLIONS)
Current Assets
Cash and cash equivalents..................................................................... $ .4 $ 5.2
Trade receivables, less allowance of $7.2 in 1993 and $7.1 in 1992............................ 194.6 161.2
Other receivables............................................................................. 10.1 10.6
Inventories
Finished goods.............................................................................. 113.3 104.1
Work in process............................................................................. 23.8 22.4
Raw materials............................................................................... 82.2 64.7
LIFO reserve................................................................................ (10.2) (7.4)
--------- ---------
Total inventories......................................................................... 209.1 183.8
Other current assets.......................................................................... 21.4 17.6
--------- ---------
Total current assets...................................................................... 435.6 378.4
Property, Plant and Equipment -- at cost
Machinery and equipment....................................................................... 346.5 280.4
Buildings, leasehold improvements and other................................................... 204.9 179.8
Land.......................................................................................... 19.8 17.8
--------- ---------
571.2 478.0
Less accumulated depreciation and amortization................................................ 258.1 218.3
--------- ---------
Net property, plant and equipment......................................................... 313.1 259.7
Other Assets
Excess cost of purchased companies over net assets acquired, less accumulated amortization of
$11.4 in 1993 and $9.2 in 1992............................................................... 93.0 78.1
Other intangibles, less accumulated amortization of $11.3 in 1993 and $12.9 in 1992........... 25.7 11.1
Sundry........................................................................................ 34.5 44.7
--------- ---------
Total other assets........................................................................ 153.2 133.9
--------- ---------
TOTAL ASSETS.................................................................................... $ 901.9 $ 772.0
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt.......................................................... $ 1.4 $ 9.5
Accounts payable.............................................................................. 74.1 49.9
Income taxes.................................................................................. 1.6 4.3
Accrued expenses.............................................................................. 65.3 53.4
Other current liabilities..................................................................... 23.8 23.9
--------- ---------
Total current liabilities................................................................. 166.2 141.0
Long-Term Debt.................................................................................. 165.8 147.9
Other Liabilities............................................................................... 11.1 8.2
Deferred Income Taxes........................................................................... 43.2 33.3
Shareholders' Equity
Capital stock
Preferred stock -- authorized, 100,000,000 shares; none issued..............................
Common stock -- authorized, 300,000,000 shares of $.01 par value at December 31, 1993 and
100,000,000 shares of $1.00 par value at December 31, 1992; issued 40,325,961 and
39,949,647 shares in 1993 and 1992, respectively........................................... .4 39.9
Additional contributed capital................................................................ 117.3 70.6
Retained earnings............................................................................. 401.0 336.2
Cumulative translation adjustment............................................................. (2.8) (.8)
Less treasury stock -- at cost (7,578 and 136,196 shares in 1993 and 1992, respectively)...... (.3) (4.3)
--------- ---------
Total shareholders' equity.................................................................. 515.6 441.6
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...................................................... $ 901.9 $ 772.0
--------- ---------
--------- ---------
The accompanying notes are an integral part of these financial statements.
17
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
ADDITIONAL CUMULATIVE TREASURY STOCK
COMMON CONTRIBUTED RETAINED TRANSLATION ---------------------
STOCK CAPITAL EARNINGS ADJUSTMENT COST SHARES
----------- ----------- ----------- ------------- --------- ----------
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
Balances -- January 1, 1991.................. $ 19.4 $ 40.5 $ 262.7 $ .6 $ (6.8) 279,305
Treasury stock sold.......................... .3 5.1 (207,126)
Treasury stock purchased..................... (.6) 18,518
Tax benefit related to stock options......... .1
Translation adjustment....................... .2
Net earnings for the year.................... 40.0
Cash dividends declared ($.43 per share)..... (15.2)
----------- ----------- ----------- ----- --------- ----------
Balances -- December 31, 1991................ 19.4 40.9 287.5 .8 (2.3) 90,697
Common stock issued (1,629,297 shares)....... 1.6 47.3
Treasury stock sold.......................... .1 4.0 (149,000)
Treasury stock purchased..................... (6.0) 187,824
Tax benefit related to stock options......... 1.2
Additional shares issued in two-for-one stock
split effected in the form of a stock
dividend June 15, 1992 (18,932,239
shares)..................................... 18.9 (18.9) 6,675
Translation adjustment....................... (1.6)
Retained earnings of pooled company at date
of acquisition.............................. .6
Net earnings for the year.................... 65.4
Cash dividends declared ($.46 per share)..... (17.3)
----------- ----------- ----------- ----- --------- ----------
Balances -- December 31, 1992................ 39.9 70.6 336.2 (.8) (4.3) 136,196
Common stock issued (376,314 shares)......... .2 6.2
Treasury stock sold.......................... (.3) 5.6 (168,745)
Treasury stock purchased..................... (1.6) 40,127
Change in par value of
common stock................................ (39.7) 39.7
Tax benefit related to stock options......... 1.1
Translation adjustment....................... (2.0)
Net earnings for the year.................... 85.9
Cash dividends declared ($.54 per share)..... (21.1)
----------- ----------- ----------- ----- --------- ----------
Balances -- December 31, 1993................ $ .4 $ 117.3 $ 401.0 $ (2.8) $ (.3) 7,578
----------- ----------- ----------- ----- --------- ----------
----------- ----------- ----------- ----- --------- ----------
The accompanying notes are an integral part of these financial statements.
18
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
(DOLLAR AMOUNTS IN MILLIONS)
Operating Activities
Net earnings.................................................................... $ 85.9 $ 65.4 $ 40.0
Adjustments to reconcile net earnings to net cash provided by operating
activities
Depreciation and amortization................................................. 45.3 42.6 41.4
LIFO expense (income)......................................................... 2.4 (1.1) (.1)
Deferred income taxes......................................................... 8.6 (2.4) 3.3
Pension income from defined benefit plans..................................... (2.0) (2.1) (1.2)
(Gain) loss on sale of operating assets....................................... (.7) 1.5 .4
Other......................................................................... 1.8 2.2 (1.4)
Other changes, net of effects from purchases of companies
(Increase) decrease in accounts receivable, net............................. (9.2) (24.1) 17.3
(Increase) decrease in inventories at FIFO cost............................. (6.8) (7.2) 21.0
(Increase) decrease in other current assets................................. (2.9) .8 2.5
Increase (decrease) in accounts payable, accrued expenses and other current
liabilities................................................................ 23.3 24.8 (20.2)
--------- --------- ---------
Net Cash Provided by Operating Activities................................... 145.7 100.4 103.0
Investing Activities
Additions to property, plant and equipment...................................... (54.2) (35.8) (36.5)
Proceeds from sales of property, plant and equipment............................ 2.8 9.9 4.8
Purchases of companies, net of cash acquired.................................... (78.0) (5.8) (9.5)
Increase in other assets........................................................ -- (3.5) (.5)
--------- --------- ---------
Net Cash Used for Investing Activities...................................... (129.4) (35.2) (41.7)
Financing Activities
Additions to debt............................................................... 58.1 35.9 2.3
Payments on debt................................................................ (57.8) (85.4) (39.0)
Dividends paid.................................................................. (21.1) (21.1) (15.0)
Sales of common stock........................................................... 1.6 1.5 .4
Repurchases of common stock..................................................... (.1) (3.1) --
Other........................................................................... (1.8) (.4) (2.3)
--------- --------- ---------
Net Cash Used for Financing Activities...................................... (21.1) (72.6) (53.6)
--------- --------- ---------
(Decrease) Increase in Cash and Cash Equivalents............................ (4.8) (7.4) 7.7
Cash and Cash Equivalents -- Beginning of Year.................................... 5.2 12.6 4.9
--------- --------- ---------
Cash and Cash Equivalents -- End of Year.......................................... $ .4 $ 5.2 $ 12.6
--------- --------- ---------
--------- --------- ---------
Supplemental Information
Interest paid..................................................................... $ 16.7 $ 12.7 $ 19.9
Income taxes paid................................................................. 45.3 43.6 23.8
Liabilities assumed of purchased companies........................................ 21.8 -- .7
Common stock issued for conversion of debentures.................................. -- 39.9 --
Long-term notes received from sales of assets..................................... -- -- 10.2
--------- --------- ---------
--------- --------- ---------
The accompanying notes are an integral part of these financial statements.
19
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
DECEMBER 31, 1993, 1992 AND 1991
A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Leggett & Platt, Incorporated and its majority-owned
subsidiaries (the Company). The Company's previously issued financial statements
have been restated to reflect pooling of interests acquisitions as discussed in
Note B. All significant intercompany transactions and accounts have been
eliminated in consolidation.
CASH EQUIVALENTS: Cash equivalents include cash in excess of daily
requirements which is invested in various financial instruments with maturities
of three months or less.
INVENTORIES: All inventories are stated at the lower of cost or market.
Cost includes materials, labor and production overhead. Cost is determined by
the last-in, first-out (LIFO) method for approximately 70% of the inventories at
December 31, 1993 and 1992. The first-in, first-out (FIFO) method is used for
the remainder. The FIFO cost of inventories at December 31, 1993 and 1992
approximated replacement cost.
DEPRECIATION AND AMORTIZATION: Property, plant and equipment and other
intangibles are depreciated or amortized over their estimated lives, principally
by the straight-line method. Accelerated methods are used for tax purposes. The
excess cost of purchased companies over net assets acquired is amortized by the
straight-line method over forty years.
COMPUTATIONS OF EARNINGS PER SHARE: Earnings per share is based on the
weighted average number of common and common equivalent shares outstanding.
Common stock equivalents result from the assumed issuance of shares under stock
option plans.
CONCENTRATION OF CREDIT RISK: The Company specializes in manufacturing,
marketing and distributing components and other related products for the
furnishings industry and diversified markets. The Company performs ongoing
credit evaluations of its customers' financial conditions and, generally,
requires no collateral from its customers, some of which are highly leveraged.
The Company maintains allowances for potential credit losses and such losses
generally have been within management's expectations.
FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying value of the Company's
financial instruments approximates market value.
ACCOUNTING STANDARDS ADOPTED: During 1993, the Company adopted three new
statements issued by the Financial Accounting Standards Board. These statements
were: 1) Statement of Financial Accounting Standards (SFAS) No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions;" 2) SFAS No. 109,
"Accounting for Income Taxes;" and 3) SFAS No. 112, "Employers' Accounting for
Postemployment Benefits." The adoption of these statements did not have a
material effect on the Company's financial position or results of operations.
RECLASSIFICATIONS: Certain reclassifications have been made to the prior
years' consolidated financial statements to conform to the 1993 presentation.
B -- ACQUISITIONS
In September 1993, the Company issued 1,579,354 shares of common stock to
acquire Hanes Holding Company (Hanes) in a transaction accounted for as a
pooling of interests. Options to purchase an additional 45,743 shares of common
stock were also extended by the Company in substitution for previously existing
options. Hanes' business consists of converting and distributing woven and
nonwoven construction fabrics, primarily in the furnishings industry. In
addition, Hanes is a
20
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B -- ACQUISITIONS (CONTINUED)
commission dye/finisher of non-fashion fabrics for the furnishings and apparel
industries. In another pooling of interests transaction, the Company issued
68,788 shares of common stock to acquire a company whose business is
manufacturing furniture components for the furnishings industry. Previously
issued financial statements have been restated to reflect the poolings. Separate
results of operations for the years ended December 31, 1993, 1992 and 1991 are
as follows:
1993 1992 1991
---------- ---------- ----------
Net sales:
Leggett & Platt................................................ $ 1,350.8 $ 1,170.5 $ 1,081.8
Pooled Companies............................................... 175.9 144.5 139.6
---------- ---------- ----------
Combined................................................... $ 1,526.7 $ 1,315.0 $ 1,221.4
---------- ---------- ----------
---------- ---------- ----------
Net earnings:
Leggett & Platt................................................ $ 82.8 $ 62.5 $ 39.4
Pooled Companies............................................... 3.1 2.9 .6
---------- ---------- ----------
Combined................................................... $ 85.9 $ 65.4 $ 40.0
---------- ---------- ----------
---------- ---------- ----------
In September 1993, the Company acquired VWR Textiles & Supplies, Inc.
(through Hanes) which converts and distributes construction fabrics and
manufactures and distributes other soft goods components to the furnishings
industry. The purchase price of this acquisition was approximately $26.0. Also
in 1993, the Company acquired full ownership of several wire drawing mills which
previously had been jointly owned. This transaction involved $33.0 in cash and
the assumption of approximately $3.6 of long term debt. In addition, the Company
acquired several smaller companies during 1993 which primarily manufacture and
distribute products to the furnishings industry. The following unaudited pro
forma information shows the results of operations for the years ended December
31, 1993 and 1992 as though the 1993 acquisitions accounted for as purchases had
occurred on January 1 of each year presented. These pro forma amounts reflect
purchase accounting adjustments, interest on incremental borrowings and the tax
effects thereof. This pro forma financial information is not necessarily
indicative of either results of operations that would have occurred had the
purchases been made on January 1 of each year or of future results of the
combined companies.
1993 1992
---------- ----------
Net sales.................................................................... $ 1,620.5 $ 1,471.5
Net earnings................................................................. 88.6 69.6
Earnings per share........................................................... 2.15 1.75
During 1992, the Company acquired the assets of one small company that
primarily manufactures bedding and furniture components for the furnishings
industry. The purchase price of this acquisition was approximately $5.8.
Assuming this acquisition had occurred at the beginning of the year, it would
not have had a material impact on net sales, net earnings or earnings per share.
Also during 1992, the Company acquired a business accounted for as a pooling
of interests. The business primarily manufactures bedding and furniture
components for the furnishings industry. In exchange for all of the outstanding
capital stock of the business, the Company issued 100,903 shares of its common
stock. The Company elected not to restate prior year's financial statements as
the effect was immaterial.
During 1991, the Company acquired the assets of two small companies that
primarily manufacture bedding and furniture components for the furnishings
industry. The purchase price of these acquisitions was approximately $10.0.
Assuming these acquisitions had occurred at the beginning of the year, they
would not have had a material impact on net sales, net earnings or earnings per
share.
21
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B -- ACQUISITIONS (CONTINUED)
The above acquisitions, except for the 1993 and 1992 poolings, have been
accounted for as purchases, and, where applicable, the excess of the total
acquisition cost over the fair value of the net assets acquired is being
amortized by the straight-line method over forty years. The results of
operations of these companies since the dates of acquisition have been included
in the consolidated financial statements.
The purchase prices as originally reported represent the initial amounts of
cash and common stock of the Company issued at the time of the acquisitions.
Some purchase agreements also contain provisions for additional payments if
certain minimum earnings requirements are met. All such provisions expired
during 1993. Amounts earned under the terms of the agreements are recorded as
increases in the excess of the total acquisition cost over the fair value of the
net assets acquired. Such additional payments were approximately $6.4 and $2.7
during 1993 and 1992, respectively.
C -- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at December 31 consist of the
following:
1993 1992
--------- ---------
Accrued expenses
Wages and commissions payable....................................................... $ 19.1 $ 15.5
Self insurance costs................................................................ 22.0 16.0
Other............................................................................... 24.2 21.9
--------- ---------
$ 65.3 $ 53.4
--------- ---------
--------- ---------
Other current liabilities
Outstanding checks in excess of book balances....................................... $ 13.1 $ 13.9
Other............................................................................... 10.7 10.0
--------- ---------
$ 23.8 $ 23.9
--------- ---------
--------- ---------
D -- LONG-TERM DEBT
Long-term debt at December 31 consists of the following:
1993 1992
--------- ---------
Revolving credit agreements with floating interest rates ranging from 3% to 5%..... $ 43.5 $ 35.4
Industrial development bonds with floating interest rates ranging from 2% to 6% and
due dates through 2030............................................................ 32.3 38.7
Industrial development bonds with fixed interest rates ranging from 7% to 8% and
due dates through 2009............................................................ 7.6 .7
Medium-term notes with fixed interest rates ranging from 5% to 6% and due dates
through 2008...................................................................... 78.5 28.5
Notes to insurance company with fixed interest rates ranging from 12% to 16%....... -- 49.1
Other, partially secured........................................................... 5.3 5.0
--------- ---------
167.2 157.4
Less current maturities............................................................ 1.4 9.5
--------- ---------
$ 165.8 $ 147.9
--------- ---------
--------- ---------
22
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D -- LONG-TERM DEBT (CONTINUED)
The revolving credit agreements provide for a maximum line of credit of
$160.0. For any revolving credit agreement, the Company may elect to pay
interest based on 1) the bank's base lending rate, 2) LIBOR, 3) an adjusted
certificate of deposit rate, or 4) the money market rate, as specified in the
revolving agreements. Any outstanding balances at the end of the third year of
the revolving credit agreements may be converted into term loans payable in ten
equal semi-annual installments. Commitment fees during the revolving agreement
period are 3/16 of 1% per annum of the unused credit line, payable on a
quarterly basis.
The revolving credit agreements and certain other long-term debt contain
restrictive covenants which, among other restrictions, limit the amount of
additional debt, require working capital to be maintained at specified amounts
and restrict payments of dividends. Unrestricted retained earnings available for
dividends at December 31, 1993 were approximately $137.1.
Maturities of long-term debt for each of the five years following 1993 are:
YEAR ENDED DECEMBER 31
- -------------------------------------------------------------------------------------
1994................................................................................. $ 1.4
1995................................................................................. 6.8
1996................................................................................. 12.4
1997................................................................................. 34.7
1998................................................................................. 21.8
E -- LEASE OBLIGATIONS
The Company conducts certain of its operations in leased premises and also
leases most of its automotive and trucking equipment and some other assets.
Terms of the leases, including purchase options, renewals and maintenance costs,
vary by lease. Total rental expense entering into the determination of results
of operations was approximately $17.4, $16.8 and $17.0 for the years ended
December 31, 1993, 1992 and 1991, respectively. Future minimum rental
commitments for all long-term noncancelable operating leases are as follows:
YEAR ENDED DECEMBER 31
- -------------------------------------------------------------------------------------
1994................................................................................. $ 6.6
1995................................................................................. 4.3
1996................................................................................. 2.5
1997................................................................................. 1.5
1998................................................................................. .5
Later years.......................................................................... .5
---------
$ 15.9
---------
---------
The above lease obligations expire at various dates through 2010. Certain
leases contain renewal and/or purchase options. Aggregate rental commitments
above include renewal amounts where it is the intention of the Company to renew
the lease.
F -- CAPITAL STOCK
At December 31, 1993, the Company had 1,724,973 common shares authorized for
issuance under stock option plans. All options are granted at not less than
quoted market value on the date of grant and generally become exercisable in
varying installments, beginning 6 to 18 months after the date of grant.
23
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
F -- CAPITAL STOCK (CONTINUED)
Other data regarding the Company's stock options is summarized below:
PER
SHARE
SHARES PRICE TOTAL
----------- --------- ---------
Outstanding at
January 1, 1992...................................................... 953,691 $ 7-18 $ 11.0
Granted............................................................ 959,377 19-23 21.8
Exercised.......................................................... (375,848) 8-17 (4.1)
Forfeited.......................................................... (4,800) 11-23 (.1)
----------- --------- ---------
Outstanding at
December 31, 1992.................................................... 1,532,420 7-23 28.6
Granted............................................................ 170,191 33-43 6.8
Exercised.......................................................... (254,132) 7-23 (3.1)
Forfeited.......................................................... (29,893) 11-42 (.6)
----------- --------- ---------
Outstanding at
December 31, 1993.................................................... 1,418,586 $ 7-43 $ 31.7
----------- --------- ---------
----------- --------- ---------
Exercisable at
December 31, 1993.................................................... 310,999
-----------
-----------
The Company has also authorized shares for issuance in connection with
certain employee stock benefit plans discussed in Note G.
In 1989, the Company declared a dividend distribution of one preferred stock
purchase right (a Right) for each share of common stock. The Rights are attached
to and traded with the Company's common stock. The Rights may only become
exercisable under certain circumstances involving actual or potential
acquisitions of the Company's common stock. Depending upon the circumstances, if
the Rights become exercisable, the holder may be entitled to purchase shares of
Series A junior preferred stock of the Company, shares of the Company's common
stock or shares of common stock of the acquiring entity. The Rights remain in
existence until February 15, 1999, unless they are exercised, exchanged or
redeemed at an earlier date.
On May 12, 1993 the Company's shareholders approved an amendment to the
Company's Restated Articles of Incorporation increasing authorized Common Stock
to 300,000,000 shares from 100,000,000 shares and reducing the par value of
Common Stock to $.01 from $1.00. The amendment provided that the stated capital
of the Company would not be affected as of the date of the amendment.
Accordingly, stated capital of the Company exceeds the amount reported as common
stock in the financial statements by approximately $39.0.
G -- EMPLOYEE BENEFIT PLANS
The Company sponsors contributory and non-contributory pension and
retirement plans. Substantially all employees, other than union employees
covered by multiemployer plans under collective bargaining agreements, are
eligible to participate in the plans. Retirement benefits under the contributory
plans are based on career average earnings. Retirement benefits under the
non-contributory plans are based on years of service, employees' average
compensation and social security benefits. It is the Company's policy to fund
actuarially determined costs as accrued.
24
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G -- EMPLOYEE BENEFIT PLANS (CONTINUED)
Information at December 31, 1993, 1992 and 1991 as to the funded status of
Company sponsored defined benefit plans, net pension income from the plans for
the years then ended and weighted average assumptions used in the calculations
are as follows:
1993 1992 1991
----------- ----------- -----------
Funded Status
Actuarial present value of benefit obligations
Vested benefits............................................. $ (46.3) $ (37.2) $ (31.9)
Nonvested benefits.......................................... (.6) (.4) (.7)
----------- ----------- -----------
Accumulated benefit obligations............................... (46.9) (37.6) (32.6)
Provision for future compensation increases................... (3.3) (3.7) (5.4)
----------- ----------- -----------
Projected benefit obligations................................. (50.2) (41.3) (38.0)
Plan assets at fair value..................................... 78.1 65.7 58.7
----------- ----------- -----------
Plan assets in excess of projected benefit obligations........ 27.9 24.4 20.7
Unrecognized net experience gain.............................. (9.6) (7.4) (5.2)
Unrecognized net transition asset............................. (4.6) (5.3) (5.9)
----------- ----------- -----------
Prepaid pension costs included in other assets................ $ 13.7 $ 11.7 $ 9.6
----------- ----------- -----------
----------- ----------- -----------
Components of Pension Income (Expense)
Service cost.................................................. $ (.9) $ (.4) $ (.5)
Interest cost................................................. (3.3) (3.0) (2.8)
Actual return on plan assets.................................. 12.8 6.9 13.6
Net amortization and deferral................................. (6.6) (1.4) (9.1)
----------- ----------- -----------
Net pension income from defined benefit plans................. $ 2.0 $ 2.1 $ 1.2
----------- ----------- -----------
----------- ----------- -----------
Weighted Average Assumptions
Discount rate................................................. 7.25% 8.36% 8.56%
Rate of increase in compensation levels....................... 5.14% 5.17% 5.15%
Expected long-term rate of return on plan assets.............. 8.00% 8.00% 8.37%
----------- ----------- -----------
----------- ----------- -----------
Plan assets are invested in a diversified portfolio of equity, debt and
government securities, including 294,000 shares of the Company's common stock at
December 31, 1993.
Contributions to union sponsored, multiemployer pension plans were $.2, $.2
and $.4 in 1993, 1992 and 1991, respectively. These plans are not administered
by the Company and contributions are determined in accordance with provisions of
negotiated labor contracts. As of 1993, the actuarially computed values of
vested benefits for these plans were equal to or less than the net assets of the
plans. Therefore, the Company would have no withdrawal liability. However, the
Company has no present intention of withdrawing from any of these plans, nor has
the Company been informed that there is any intention to terminate such plans.
Net pension income (expense), including Company sponsored defined benefit
plans, multiemployer plans and other plans, was $.7, $.8 and $(.4) in 1993, 1992
and 1991, respectively.
The Company also has a contributory stock purchase/stock bonus plan (SPSB
Plan), a non-qualified executive stock purchase program (ESPP) and an employees'
discount stock plan (DSP). The SPSB Plan provides Company pre-tax contributions
of 50% of the amount of employee contributions. The ESPP provides cash payments
of 50% of the employees' contributions, along with an additional payment to
assist employees in paying taxes on the cash payments. These contributions to
the ESPP are invested in the Company's common stock through the DSP. In
addition, the Company matches its
25
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G -- EMPLOYEE BENEFIT PLANS (CONTINUED)
contributions when certain profitability levels, as defined in the SPSB Plan and
the ESPP, have been attained. The Company's total contributions to the SPSB Plan
and the ESPP were $2.5, $2.2 and $2.0 for 1993, 1992 and 1991, respectively.
Under the DSP, eligible employees may purchase a maximum of 4,000,000 shares
of Company common stock. The purchase price per share is 85% of the closing
market price on the last business day of each month. Shares purchased under the
DSP were 181,306, 237,713 and 267,212 during 1993, 1992 and 1991, respectively.
Purchase prices ranged from $12 to $43 per share. Since inception of the DSP in
1982, a total of 2,120,413 shares have been purchased by employees.
H -- INCOME TAXES
The components of earnings before income taxes are as follows:
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
Domestic.................................................................. $ 128.7 $ 97.6 $ 60.9
Foreign................................................................... 12.3 8.8 5.1
--------- --------- ---------
$ 141.0 $ 106.4 $ 66.0
--------- --------- ---------
--------- --------- ---------
Income tax expense is comprised of the following components:
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
Current
Federal.................................................................... $ 34.5 $ 31.7 $ 17.7
State and local............................................................ 7.4 7.7 3.1
Foreign.................................................................... 4.6 4.0 1.9
--------- --------- ---------
46.5 43.4 22.7
Deferred
Federal.................................................................... 7.2 (1.6) 2.8
State and local............................................................ 1.4 (.4) .4
Foreign.................................................................... -- (.4) .1
--------- --------- ---------
8.6 (2.4) 3.3
--------- --------- ---------
$ 55.1 $ 41.0 $ 26.0
--------- --------- ---------
--------- --------- ---------
Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities. The major temporary differences that give rise to deferred tax
assets or liabilities at December 31, 1993 and 1992 are as follows:
DECEMBER 31,
--------------------
1993 1992
--------- ---------
Property, plant and equipment....................................................... $ (31.6) $ (29.2)
Accrued expenses.................................................................... 14.4 9.5
Prepaid pension cost................................................................ (5.4) (4.6)
Intangible assets................................................................... (7.7) --
Other, net.......................................................................... (1.0) 1.8
--------- ---------
$ (31.3) $ (22.5)
--------- ---------
--------- ---------
26
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H -- INCOME TAXES (CONTINUED)
Deferred tax assets and liabilities included in the consolidated balance
sheets are as follows:
DECEMBER 31,
--------------------
1993 1992
--------- ---------
Other current assets................................................................ $ 11.9 $ 10.8
Deferred income taxes............................................................... (43.2) (33.3)
--------- ---------
$ (31.3) $ (22.5)
--------- ---------
--------- ---------
Income tax expense, as a percentage of earnings before income taxes, differs
from the statutory federal income tax rate as follows:
YEAR ENDED DECEMBER 31,
-------------------------------------
1993 1992 1991
----------- ----------- -----------
Statutory federal income tax rate................................. 35.0% 34.0% 34.0%
Increases (decreases) in rate resulting from
State taxes, net of federal benefit............................. 4.0 4.5 3.5
Restructuring benefit........................................... -- (1.8) --
Non-deductible expenses, primarily goodwill..................... .7 .9 1.3
Other........................................................... (.6) .9 .6
--- --- ---
Effective tax rate................................................ 39.1% 38.5% 39.4%
--- --- ---
--- --- ---
Tax benefits of approximately $2.0 associated with the Company's
restructuring charge were not recognized during 1990. These tax benefits became
available during 1992 and were recognized accordingly.
I -- INDUSTRY SEGMENT INFORMATION
The Company's operations principally consist of the manufacturing of
components and related finished products for the furnishings industry. In
addition, the Company supplies a diversified group of industries with products
which are similar in manufacturing technology to its furnishings operations.
Other than furnishings, no industry segment is significant.
The Company's products are sold primarily through its own sales personnel to
customers in all states of the United States. Foreign sales are a minor portion
of the Company's business. No single customer accounts for as much as 10% of
sales.
Operating profit is determined by deducting from net sales the cost of goods
sold and the selling, distribution, administrative and other expenses
attributable to the segment operations. Corporate expenses not allocated to the
segments include corporate general and administrative expenses, interest expense
and certain other income and deduction items which are incidental to the
Company's operations. Capital expenditures, as defined herein, include amounts
relating to acquisitions as well as internal expenditures. The identifiable
assets of industry segments are those used in the Company's
27
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I -- INDUSTRY SEGMENT INFORMATION (CONTINUED)
operations of each segment. Corporate identifiable assets include cash, land,
buildings and equipment used in conjunction with corporate activities, and
sundry assets. Financial information by segment is as follows:
YEAR ENDED DECEMBER 31,
---------------------------------------------------
FURNISHINGS
PRODUCTS DIVERSIFIED CORPORATE CONSOLIDATED
----------- ----------- ----------- ------------
1993
Net sales...................................................... $ 1,147.8 $ 378.9 $ -- $ 1,526.7
Operating profit............................................... 126.8 36.1 (21.9) 141.0
Capital expenditures........................................... 63.3 22.0 3.0 88.3
Depreciation and amortization expense.......................... 35.3 8.6 1.4 45.3
Identifiable assets............................................ 684.3 177.9 39.7 901.9
1992
Net sales...................................................... $ 1,014.1 $ 300.9 $ -- $ 1,315.0
Operating profit............................................... 103.8 27.8 (25.2) 106.4
Capital expenditures........................................... 31.2 6.4 3.0 40.6
Depreciation and amortization expense.......................... 33.5 7.4 1.7 42.6
Identifiable assets............................................ 576.9 140.4 54.7 772.0
1991
Net sales...................................................... $ 942.7 $ 278.7 $ -- $ 1,221.4
Operating profit............................................... 73.6 22.1 (29.7) 66.0
Capital expenditures........................................... 29.9 5.2 7.7 42.8
Depreciation and amortization expense.......................... 31.8 8.1 1.5 41.4
Identifiable assets............................................ 555.2 125.8 65.7 746.7
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
J -- CONTINGENCIES
From time to time, the Company is involved in proceedings related to
environmental matters. In one instance, the United States Environmental
Protection Agency ("EPA") has directed one of the Company's subsidiaries to
investigate potential releases into the environment and, if necessary, to
perform corrective action. The subsidiary appealed the EPA's action and the
outcome cannot be reasonably predicted. Costs to perform the actions directed by
the EPA, if the outcome is unfavorable, cannot be reasonably estimated. One-half
of any such costs would be reimbursed to the Company under a contractual
obligation of a former joint owner of the subsidiary. No provision for costs of
performing investigation and corrective action, if ultimately required, have
been recorded in the Company's financial statements. If any such investigation
and corrective action is required, management believes the possibility of
incurring unreimbursed costs, with a material adverse effect on the Company's
consolidated financial condition or results of operations, is remote.
28
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Leggett & Platt, Incorporated:
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, changes in shareholders' equity and of cash
flows present fairly, in all material respects, the financial position of
Leggett & Platt, Incorporated and its subsidiaries at December 31, 1993 and
1992, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
St. Louis, Missouri
February 17, 1994
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 28, 1994
LEGGETT & PLATT, INCORPORATED
By: ____/s/__HARRY M. CORNELL, JR.____
Harry M. Cornell, Jr.
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- ------------------
(A) PRINCIPAL EXECUTIVE OFFICER:
/s/HARRY M. CORNELL, JR. Chairman of the Board, Chief
Harry M. Cornell, Jr. Executive Officer and Director March 28, 1994
(B) PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER:
/s/MICHAEL A. GLAUBER Senior Vice President, Finance &
Michael A. Glauber Administration March 28, 1994
(C) DIRECTORS:
HERBERT C. CASTEEL*
Herbert C. Casteel Director
ROBERT TED ENLOE, III*
Robert Ted Enloe, III Director
RICHARD T. FISHER*
Richard T. Fisher Director
FRANK E. FORD, JR.*
Frank E. Ford, Jr. Director
ROBERT A. JEFFERIES, JR.*
Robert A. Jefferies, Jr. Director
ALEXANDER M. LEVINE*
Alexander M. Levine Director
30
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- ------------------
JAMES C. MCCORMICK*
James C. McCormick Director
RICHARD L. PEARSALL*
Richard L. Pearsall Director
MAURICE E. PURNELL, JR.*
Maurice E. Purnell, Jr. Director
FELIX E. WRIGHT*
Felix E. Wright Director
*By/s/ERNEST C. JETT
Attorney-in-Fact pursuant to
Power of Attorney March 28, 1994
dated as of February 9, 1994
31
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ --------------------------------------------------------------------------------------- ----------
3.1 -- The Restated Articles of Incorporation of the Company, filed as Exhibit 3 to
Registrant's Form 10-Q for the quarter ended June 30, 1987, are incorporated by
reference.
3.2 -- Amendment to Restated Articles of Incorporation of the Company, filed as Exhibit 3.1 to
Form S-4 (Registration No. 33-66238 which was filed with the the Securities and
Exchange Commission on July 19, 1993), is incorporated by reference.
3.3 -- By-Laws of the Company as amended and restated as of August 11, 1993, filed as Exhibit
3.2 to Registrant's Form 10-Q for the quarter ended June 30, 1993, are incorporated by
reference.
4.1 -- Article III of Registrant's Restated Articles of Incorporation, filed as Exhibit 3.1
above, is incorporated by reference.
4.2 -- Rights Agreement dated February 15, 1989 between Registrant and The Chase Manhattan
Bank, N.A., pertaining to preferred stock rights distributed by Registrant, filed as
Exhibit 1 to Registrant's Form 8-A dated February 15, 1989, is incorporated by
reference. Certificate dated June 19, 1992 regarding May 13, 1992 stock split, filed as
Exhibit 4.2 of Registrant's Form 10-K for the year ended December 31, 1992, is
incorporated by reference.
4.2A -- Letter Agreement dated December 18, 1991 between Registrant and Mellon Securities Trust
Company ("Mellon") relating to appointment of Mellon as Rights Agent under the Rights
Agreement, filed as Exhibit 4.2A to Registrant's Form 10-K for the year ended December
31, 1991, is incorporated by reference.
10.1(1) -- Employment Agreement between the Company and Mr. Cornell dated May 9, 1979, as amended,
filed as Exhibit 10.1 to Registrant's Form 10-K for the year ended December 31, 1989,
and Amendment No. 3 to Employment Agreement dated March 15, 1993, filed as Exhibit 10.1
to Registrant's Form 10-K for the year ended December 31, 1992, are incorporated by
reference.
10.2(1) -- Employment Agreement between the Company and Mr. Wright dated May 1, 1981, as amended,
filed as Exhibit 10.2 to Registrant's Form 10-K for the year ended December 31, 1989,
is incorporated by reference.
10.3(1) -- Employment Agreement between the Company and Mr. Jefferies dated November 7, 1990,
filed as Exhibit 10.3 to Registrant's Form 10-K for the year ended December 31, 1990,
and Amendment No. 1 to Employment Agreement dated January 1, 1993, filed as Exhibit
10.3 to Registrant's Form 10-K for the year ended December 31, 1992, are incorporated
by reference.
10.4(1) -- Reference is made to Exhibits 10(a), 10(b) and 10(c) of Registrant's Form 8-K dated
June 5, 1984 for a copy of the Severance Benefit Agreements between the Company and
Harry M. Cornell, Jr., Felix E. Wright and Robert A. Jefferies, Jr., respectively,
dated May 9, 1984, which are incorporated by reference.
32
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ --------------------------------------------------------------------------------------- ----------
10.6(1) -- Reference is made to Exhibit C to Registrant's definitive Proxy Statement dated March
31, 1989 used in conjunction with Registrant's Annual Meeting of Shareholders held on
May 10, 1989 for a copy of the Company's 1989 Flexible Stock Plan, which is
incorporated by reference.
10.7(1) -- Summary description of the Company's Key Management Incentive Compensation Plan.
10.8(1) -- Reference is made to description of certain long-term disability arrangements between
Registrant and its salaried employees filed as Exhibit 10.7 of Registrant's Form 10-K
for the year ended December 31, 1991, which is incorporated by reference.
10.9(1) -- Reference is made to Exhibit D to Registrant's definitive Proxy Statement dated April
1, 1986 used in conjunction with Registrant's Annual Meeting of Shareholders held on
May 7, 1986 for a copy of the form of Indemnification Agreement approved by the
shareholders of Registrant and entered into between Registrant and each of its
directors and executive officers, which is incorporated by reference.
10.10(1) -- Registrant's Director Stock Option Plan, filed as Appendix A to Registrant's definitive
Proxy Statement dated March 31, 1989 used in conjunction with Registrant's Annual
Meeting of Shareholders held on May 10, 1989, and Amendment to Director Stock Option
Plan dated May 13, 1992, filed as Exhibit 10.10 to Registrant's Form 10-K for the year
ended December 31, 1992, are incorporated by reference.
10.11(1) -- Employment Agreement dated April 14, 1989 between Registrant and Alexander M. Levine,
filed as Exhibit 10.10 of Registrant's Form 10-K for the year ended December 31, 1989,
is incorporated by reference.
10.12(1) -- Reference is made to Leggett & Platt, Incorporated Executive Stock Purchase Program
adopted June 6, 1989 under the Company's 1989 Flexible Stock Plan, and effective as of
July 1, 1989, as amended on November 13, 1991, filed as Exhibit 10.11 of Registrant's
Form 10-K for the year ended December 31, 1991, which is incorporated by reference.
10.14(1) -- Stock Award Agreement dated July 27, 1992 between Registrant and Felix E. Wright, filed
as Exhibit 10.14 of Registrant's Form 10-K for the year ended December 31, 1992, is
incorporated by reference.
10.15(1) -- Stock Award Agreement dated August 21, 1992, between Registrant and Robert A.
Jefferies, Jr., filed as Exhibit 10.15 of Registrant's Form 10-K for the year ended
December 31, 1992, is incorporated by reference.
10.16(1) -- Stock Award Agreement dated October 2, 1992, between Registrant and Duane W. Potter,
filed as Exhibit 10.16 of Registrant's Form 10-K for the year ended December 31, 1992,
is incorporated by reference.
10.17(1) -- Stock Award Agreement dated December 20, 1992 between Registrant and Harry M. Cornell,
Jr., filed as Exhibit 10.17 of Registrant's Form 10-K for the year ended December 31,
1992, is incorporated by reference.
10.18(1) -- Stock Award Agreement dated July 27, 1993 between Registrant and Felix E. Wright.
33
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ --------------------------------------------------------------------------------------- ----------
10.19(1) -- Stock Award Agreement dated December 20, 1993 between Registrant and Harry M. Cornell,
Jr.
10.20(1) -- Deferred Compensation Plan adopted by Registrant's Board of Directors and offered to
executives of Registrant.
11 -- Statement of Computation of Earnings Per Common Share.
21 -- Schedule of Subsidiaries of Registrant.
23 -- Consent of Independent Accountants.
24 -- Power of Attorney executed by members of the Company's Board of Directors regarding
this Form 10-K and certain registration statements.
- ------------------------
(1) Denotes management contract or compensatory plan or arrangement.
34
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Shareholders of
Leggett & Platt, Incorporated:
Our audits of the consolidated financial statements referred to in our
report dated February 17, 1994, appearing on page 29 of Leggett & Platt,
Incorporated's Annual Report on Form 10-K for the year ended December 31, 1993,
also included an audit of the Financial Statement Schedules listed in Item 14-2
in Part IV of this Form 10-K. In our opinion, these Financial Statement
Schedules present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
PRICE WATERHOUSE
St. Louis, Missouri
February 17, 1994
35
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN B COLUMN E COLUMN F
------------ COLUMN C ----------------- -----------
COLUMN A BALANCE AT ------------- COLUMN D OTHER CHANGES ADD BALANCE AT
- ------------------------------------------ BEGINNING OF ADDITIONS ------------- (DEDUCT) END OF
CLASSIFICATION PERIOD AT COST RETIREMENTS (A),(B),(C),(D) PERIOD (E)
- ------------------------------------------ ------------ ------------- ------------- ----------------- -----------
Machinery and equipment................... $ 280.4 $ 59.7 $ 4.8 $ 11.2 $ 346.5
Buildings................................. 126.8 17.0 2.6 3.5 144.7
Automotive and trucks..................... 19.7 4.3 2.2 -- 21.8
Office furniture and fixtures............. 22.0 4.7 .8 .1 26.0
Leasehold improvements and other.......... 11.3 .9 .1 .3 12.4
Land...................................... 17.8 1.7 .4 .7 19.8
------------ ----- ----- ----- -----------
$ 478.0 $ 88.3 $ 10.9 $ 15.8 $ 571.2
------------ ----- ----- ----- -----------
------------ ----- ----- ----- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred from Sundry Assets
and subsequently retired.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
(D) Reclass of the Company's investment in the property, plant and equipment
of Adcom Wire, at the date of acquisition, from Sundry Assets.
(E) Property, plant and equipment are depreciated by the straight-line method.
Generally, the rates of depreciation range from 2.5% to 6.7% for
buildings, 8.3% to 25% for machinery and equipment, 20% to 33.3% for
automotive and trucks and 12.5% to 33.3% for office furniture and
fixtures. Leasehold improvements are depreciated over the term of the
lease.
36
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1992
(AMOUNTS IN MILLIONS)
COLUMN B COLUMN E COLUMN F
------------ COLUMN C --------------- -----------
COLUMN A BALANCE AT ----------- COLUMN D OTHER CHANGES BALANCE AT
- ---------------------------------------- BEGINNING OF ADDITIONS ------------- ADD (DEDUCT) END OF
CLASSIFICATION PERIOD AT COST RETIREMENTS (A),(B),(C) PERIOD (D)
- ---------------------------------------- ------------ ----------- ------------- --------------- -----------
Machinery and equipment................. $ 261.4 $ 27.8 $ 7.0 $ (1.8) $ 280.4
Buildings............................... 125.4 4.0 1.3 (1.3) 126.8
Automotive and trucks................... 19.9 4.4 4.6 -- 19.7
Office furniture and fixtures........... 19.2 3.4 .6 -- 22.0
Leasehold improvements and other........ 13.4 .6 .1 (2.6) 11.3
Land.................................... 16.2 .4 .3 1.5 17.8
------------ ----- ----- ----- -----------
$ 455.5 $ 40.6 $ 13.9 $ (4.2) $ 478.0
------------ ----- ----- ----- -----------
------------ ----- ----- ----- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred to Sundry Assets.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
(D) Property, plant and equipment are depreciated by the straight-line method.
Generally, the rates of depreciation range from 2.5% to 6.7% for
buildings, 8.3% to 25% for machinery and equipment, 20% to 33.3% for
automotive and trucks and 12.5% to 33.3% for office furniture and
fixtures. Leasehold improvements are depreciated over the term of the
lease.
37
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1991
(AMOUNTS IN MILLIONS)
COLUMN B COLUMN E COLUMN F
------------ COLUMN C ----------------- -----------
COLUMN A BALANCE AT ------------- COLUMN D OTHER CHANGES BALANCE AT
- --------------------------------------------- BEGINNING OF ADDITIONS AT ------------- ADD (DEDUCT) END OF
CLASSIFICATION PERIOD COST RETIREMENTS (A),(B) PERIOD (C)
- --------------------------------------------- ------------ ------------- ------------- ----------------- -----------
Machinery and equipment...................... $ 243.5 $ 20.4 $ 4.3 $ 1.8 $ 261.4
Buildings.................................... 106.8 15.4 2.3 5.5 125.4
Automotive and trucks........................ 19.5 3.4 3.3 .3 19.9
Office furniture and fixtures................ 18.0 2.3 .8 (.3) 19.2
Leasehold improvements and other............. 13.5 .7 .2 (.6) 13.4
Land......................................... 15.3 .6 .6 .9 16.2
------------ ----- ----- --- -----------
$ 416.6 $ 42.8 $ 11.5 $ 7.6 $ 455.5
------------ ----- ----- --- -----------
------------ ----- ----- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Changes in account classification and transfers between accounts.
(B) Net change due to revised purchase price allocation and transfers from
Sundry Assets.
(C) Property, plant and equipment are depreciated by the straight-line method.
Generally, the rates of depreciation range from 2.5% to 6.7% for
buildings, 8.3% to 25% for machinery and equipment, 20% to 33.3% for
automotive and trucks and 12.5% to 33.3% for office furniture and
fixtures. Leasehold improvements are depreciated over the term of the
lease.
38
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E COLUMN F
------------ ADDITIONS ----------------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D OTHER CHANGES ADD BALANCE AT
- ---------------------------------------- BEGINNING OF COSTS AND ------------- (DEDUCT) END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS (A),(B),(C),(D) PERIOD
- ---------------------------------------- ------------ ----------- ------------- ----------------- -----------
Machinery and equipment................. $ 154.8 $ 27.1 $ 3.9 $ 7.2 $ 185.2
Buildings............................... 31.7 5.2 .4 .1 36.6
Automotive and trucks................... 11.9 3.0 1.8 -- 13.1
Office furniture and fixtures........... 11.1 2.6 .7 .1 13.1
Leasehold improvements and other........ 8.8 1.2 .1 .2 10.1
------------ ----- --- --- -----------
$ 218.3 $ 39.1 $ 6.9 $ 7.6 $ 258.1
------------ ----- --- --- -----------
------------ ----- --- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred from Sundry Assets
and subsequently retired.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
(D) Reclass of the Company's investment in the property, plant and equipment
of Adcom Wire, at the date of acquisition, from Sundry Assets.
39
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1992
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E COLUMN F
------------ ADDITIONS ----------------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D OTHER CHANGES BALANCE AT
- ---------------------------------------------- BEGINNING OF COSTS AND ------------- ADD (DEDUCT) END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS (A), (B), (C) PERIOD
- ---------------------------------------------- ------------ ----------- ------------- ----------------- -----------
Machinery and equipment....................... $ 135.5 $ 25.6 $ 5.4 $ (.9) $ 154.8
Buildings..................................... 27.1 4.8 .3 .1 31.7
Automotive and trucks......................... 12.7 2.8 3.7 .1 11.9
Office furniture and fixtures................. 9.4 2.1 .4 -- 11.1
Leasehold improvements and other.............. 7.4 1.3 -- .1 8.8
------------ ----- --- --- -----------
$ 192.1 $ 36.6 $ 9.8 $ (.6) $ 218.3
------------ ----- --- --- -----------
------------ ----- --- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred to Other Assets.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
40
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1991
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E COLUMN F
------------ ADDITIONS ----------------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D OTHER CHANGES ADD BALANCE AT
- ---------------------------------------- BEGINNING OF COSTS AND ------------- (DEDUCT) END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS (A),(B),(C) PERIOD
- ---------------------------------------- ------------ ----------- ------------- ----------------- -----------
Machinery and equipment................. $ 112.8 $ 24.3 $ 2.9 $ 1.3 $ 135.5
Buildings............................... 21.7 4.4 .3 1.3 27.1
Automotive and trucks................... 12.0 2.7 2.3 .3 12.7
Office furniture and fixtures........... 8.0 2.0 .6 -- 9.4
Leasehold improvements and other........ 6.4 1.2 .2 -- 7.4
------------ ----- --- --- -----------
$ 160.9 $ 34.6 $ 6.3 $ 2.9 $ 192.1
------------ ----- --- --- -----------
------------ ----- --- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Changes in account classification and transfers between accounts.
(B) Transfers from Sundry Assets.
(C) Certain reclassifications have been made to conform to the 1992
presentation.
41
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E
------------ ADDITIONS -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D BALANCE AT
- ----------------------------------------------------------- BEGINNING OF COSTS AND -------------- END OF
DESCRIPTION PERIOD EXPENSES DEDUCTIONS PERIOD
- ----------------------------------------------------------- ------------ ----------- -------------- -----------
Year ended December 31, 1993...............................
Valuation reserve for non-operating Sundry Assets........ $ 2.7 $ .2 $ 1.2(A) $ 1.7
------------ ----- --- -----------
------------ ----- --- -----------
Allowance for doubtful receivables....................... $ 7.1 $ 2.8 $ 2.7(B) $ 7.2
------------ ----- --- -----------
------------ ----- --- -----------
Year ended December 31, 1992
Valuation reserve for non-operating Sundry Assets........ $ 1.1 $ 1.6 $ -- $ 2.7
------------ ----- --- -----------
------------ ----- --- -----------
Allowance for doubtful receivables....................... $ 8.2 $ 3.6 $ 4.7(B) $ 7.1
------------ ----- --- -----------
------------ ----- --- -----------
Year ended December 31, 1991
Valuation reserve for non-operating Sundry Assets........ $ 1.2 $ .7 $ .8(A) $ 1.1
------------ ----- --- -----------
------------ ----- --- -----------
Allowance for doubtful receivables....................... $ 6.3 $ 8.1 $ 6.2(B) $ 8.2
------------ ----- --- -----------
------------ ----- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Portion of reserve balance associated with assets disposed.
(B) Uncollectible accounts charged off, net of recoveries.
42
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN B
-------------------------------
CHARGED TO COSTS
COLUMN A AND EXPENSES
- ----------------------------------------------------------------------- -------------------------------
ITEM (A) 1993 1992 1991
- ----------------------------------------------------------------------- --------- --------- ---------
Maintenance and repairs................................................ $ 26.4 $ 24.0 $ 23.7
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Royalties, advertising costs, taxes (other than payroll and income taxes)
and depreciation and amortization of intangible assets are not reported
because they are less than 1% of total sales and revenues.
43
KEY MANAGEMENT INCENTIVE COMPENSATION PLAN
SUMMARY
The Company has a Key Management Incentive Compensation Plan (the
"Plan") which was implemented to provide additional incentive to the
participants to achieve Company objectives. The Plan is administered under
the direction of the Compensation Committee of the Board of Directors.
For participants at profit centers, awards are based on a combination of
(I) profit center achievement of budgeted operating income objectives;
(II) corporate performance as measured by after-tax returns on adjusted
average equity ("ROAAE") and earnings before interest and taxes ("EBIT")
returns on adjusted net assets ("ROANA"); and (III) individual performance.
For participants on the Corporate staff, awards are based on corporate
performance (as defined above in item (II)), except that a 10% discretionary
portion is based on individual performance.
Minimum ROAAE and ROANA levels must be achieved before any part of the
corporate portion of awards is payable. As the Company's performance improves
beyond the established minimums, the size of the participant's bonus
increases. Total bonuses to all plan participants may not exceed 4% of EBIT.
STOCK AWARD AGREEMENT
Leggett & Platt, Incorporated (the "COMPANY") and Felix E. Wright (the
"PARTICIPANT") agree as of July 27, 1993 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "STOCK AWARD" or "AWARD" and
collectively "STOCK AWARDS" or "AWARDS") constitute "OTHER STOCK BASED AWARDS"
under the Company's 1989 Flexible Stock Plan (the "PLAN") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("SHARES") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to
Participant upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning August 6, 1993 and
ending December 24, 1993.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $1,097.
The awards made under this Section are individually and collectively
called the "BASIC STOCK AWARD."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1993 the Committee
will grant a one-time "ADDITIONAL STOCK AWARD" to Participant if (I) Participant
remains a full-time executive of an Employer as of December 31, 1993 or has
terminated his employment before December 31, 1993 because of permanent and
total disability, retirement or death and (II) the Company has met the 1993
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
-1-
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
Participant elects to have income taxes withheld from
---------- all cash dividends on Company Shares.
X Participant elects not to have income taxes withheld
---------- from all cash dividends on Company Shares.
(CHECK ONE OF TWO ABOVE.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "PARTICIPANT'S INVESTMENTS." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1992. All cash
transmitted will be invested by the Company in the same manner as cash
dividends from Company Shares and thereupon shall constitute and remain a
portion of Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all
Common Stock shall normally be issued in the name of the Participant only.
However, if the Participant so requests, certificates will be issued (I) in the
name of the Participant and the Participant's spouse as tenants by the entirety,
or (II) in the name of the Participant and any other person designated by the
Participant as joint tenants with right of survivorship. Any such issuance will
be in accordance with such guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in
the Committee's sole and absolute discretion, certificates for Common Stock may
be issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
-2-
Irrespective of the names (other than the Participant's)
appearing on any certificates for Common Stock, such certificates shall remain
subject to all of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred,
pledged or otherwise disposed of by the Participant or any other holder thereof
until it is no longer subject to repurchase pursuant to Section 13 and until the
earlier of (I) the Participant's death, total and permanent disability,
retirement or other termination of employment, or (II) such time as the
Committee shall determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock
is no longer nontransferable, certificates for such Common Stock may be held by
the Company or such other person or entity as the Committee shall select and may
be marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted
from time to time to substitute certificates for Common Stock already owned by
the Participant and not subject to this Agreement for a like number of Common
Stock certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OF CUSTODIAL ACCOUNT. The Committee shall have the right at
any time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates
for any reason, no further installment of any Basic Stock Awards which is
payable in installments shall be made. If the Participant's employment
terminates for any reason prior to December 31 of any year, any Additional Stock
Award for the year which has not been paid will be forfeited unless (A) such
termination (I) was because of permanent and total disability or death or
(II) occurred on or after the Participant attained 60 years of age or attained
55 years of age and had been employed by an Employer for at least 5 continuous
years or (B) the Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit
-3-
of the Company, the Participant and their respective successors, assigns, heirs
and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTIONS TO REPURCHASE. The Company shall have an option to buy all
of a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within 60 days following the Participant's termination of employment. The above
option applied only to a Participant (A) who is under age 60 when his employment
terminates, (B) who has been employed by an Employer for less than 5 continuous
years when his employment terminates AND (C) whose employment is terminated for
a reason other than permanent and total disability or death. For purposes of
determining a Participant's length of employment, employment with an Employer
prior to the time that it became an Employer shall be disregarded. Without, in
any way, limiting the provisions of Section 8, in order to facilitate the
Company's exercise of the foregoing option, the Participant shall, as a
condition to receiving an Award, execute such stock and other assignments and
other documents of transfer as the Committee shall request at any time.
Notwithstanding the foregoing, the decision as to whether to exercise the option
granted by this Section 13 shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
s/Felix E. Wright By: s/Robert A. Jefferies, Jr.
- ------------------------------------------ -------------------------------
Participant Senior Vice President
-4-
STOCK AWARD AGREEMENT
Leggett & Platt, Incorporated (the "Company") and Harry M. Cornell, Jr.
(the "Participant") agree as of December 20, 1993 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the
Additional Stock Award provided for below (individually "Stock Award" or
"Award" and collectively "Stock Awards" or "Awards") constitute "Other Stock
Based Awards" under the Company's 1989 Flexible Stock Plan (the "Plan") and
are granted to Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted
in the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to
Participant upon request.
Capitalized terms used in this Agreement, if not defined herein,
shall have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards
of Common Stock of the Company, such awards to be made beginning January 7,
1994 and ending December 23, 1994.
On or before March 31, 1994 (and as early as December 20, 1993),
the Committee will grant a one-time Basic Stock Award to Participant providing
Participant remains a full-time executive of an Employer on that date.
Each bi-weekly Basic Stock Award and the one-time Basic Stock
Award will be in whole (not fractional) Shares having a fair market value on
the date the Award is made that is as close as possible to 7.34% of each
installment of Participant's biweekly pay in the case of the biweekly Basic
Stock Award and 7.16% of Participants incentive pay in the case of his
one-time Basic Stock Award. The parties to this Agreement agree that the
immediately preceding percentages may be adjusted upward or downward as
necessary by the Company to reflect any changes in federal, state or local tax
rates.
The awards made under this Section are individually and
collectively called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1995 the
Committee will grant a one-time "Additional Stock Award" to Participant if (i)
Participant remains a full-time executive of an Employer as of December 31, 1994
or has terminated his employment before December 31, 1994 because of permanent
and total disability, retirement or death and (ii) the Company has met the 1994
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
1
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic
Stock Awards received by Participant during calendar year 1994 plus any Basic
Awards on compensation or incentive bonuses accelerated from 1994 into 1993.
The fair market value of each Basic Stock Award shall be determined as of the
date such Award is made.
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS
_________ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld
_________ from all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all
cash dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares
(plus any interest thereon) in such debt or equity issues, mutual funds,
annuity contracts and/or other investments as shall be agreeable to
Participant and the Committee. Such investments together with all proceeds
thereof and increments thereto are collectively called "Participant's
Investments." In no event will Participant's Investments include the
Company's Common Stock or the Company's preferred stock or any debt
instruments convertible into such Common Stock or preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during
the period of this Agreement shall not be less than 1% nor more than 10% of
Participant's gross cash compensation for the calendar year 1993. All cash
transmitted will be invested by the Company in the same manner as cash
dividends from Company Shares and thereupon shall constitute and remain a
portion of Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of
this Agreement dealing with Common Stock and certificates therefore shall
apply with like force to Participant's Investments and certificates or other
evidences of Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award
shall be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all
Common Stock shall normally be issued in the name of the Participant only.
However, if the Participant so request, certificates will be issued (i) in the
name of the Participant and the Participant's spouse as tenants by the
entirety, or (ii) in the name of the Participant and any other person
designated by the Participant
2
as joint tenants with right of survivorship. Any such issuance will be in
accordance with such guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in
the Committee's sole and absolute discretion, certificates for Common Stock
may be issued in the name of a person other than the Participant. Any such
issuance shall be on such terms and conditions as the Committee may deem
appropriate.
Irrespective of the names (other than the Participant's) appearing
on any certificates for Common Stock, such certificates shall remain subject
to all of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred,
pledged or otherwise disposed of by the Participant or any other holder
thereof until it is no longer subject to repurchase pursuant to Section 13 and
until the earlier of (i) the Participant's death, total and permanent
disability, retirement, or other termination of employment or (ii) such time
as the Committee shall determine.
In addition Participant may not sell or otherwise dispose of any
shares of Common Stock awarded under this Agreement unless the shares have
been held for at least six months after the date of the Award.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock
is no longer nontransferable, certificates for such Common Stock may be held
by the Company or such other person or entity as the Committee shall select
and may be marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted
from time to time to substitute certificates for Common Stock already owned by
the Participant and not subject to this Agreement for a like number of Common
Stock certificates which have been held for at least six months from the date
that they were awarded. Participant shall also be permitted from time to time
to substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The Committee shall have the right
at any time to establish a trust, custodial account or other arrangement to
hold certificates for Common Stock which is nontransferable upon such terms as
it deems appropriate and which are not in conflict with the Plan or this
Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of
the Company described in Section 3.3 of the Plan, the Committee shall have the
right to make such amendments to this Agreement as it shall deem necessary to
carry out the purposes of this Agreement.
3
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment
terminates for any reason, no further installment of any Basic Stock Award
which is payable in installments shall be made. If the Participant's
employment terminates for any reason prior to December 31 of any year, any
Additional Stock Award for that year which has not been paid will be forfeited
unless (a) such termination (i) was because of permanent and total disability
or death or (ii) occurred on or after the Participant attained 60 years of age
or attained 55 years of age and had been employed by an Employer for at least
5 continuous years or (b) the Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs, and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other
document shall require the grant to participant of additional Awards or any
other Benefit under the Plan or prohibit any other Benefit which is granted
from being a different Benefit or from being granted on different and/or
additional terms and conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon
the Participant any right of continued employment nor shall it interfere in
any way with the right of the Employer to terminate the Participant's
employment at any time (subject to any employment contract that might exist
between Participant and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy
all of a Participant's Common Stock obtained directly through a Stock Award.
The option price shall be $1, and the option must be exercised by the
Committee within 60 days following the Participant's termination of
employment. The above option applies only to a Participant (a) who is under
age 60 when his employment terminates, (b) who has been employed by an
Employer for less than 5 continuous years when his employment terminates AND
(c) whose employment is terminated for a reason other than permanent and total
disability or death. For purposes of determining a Participant's length of
employment, employment with an Employer prior to the time that it became an
Employer shall be disregarded. Without, in any way, limiting the provisions
of Section 8, in order to facilitate the Company's exercise of the foregoing
option, the Participant shall, as a condition to receiving an Award, execute
such stock and other assignments and other documents of transfer as the
Committee shall request at any time. Notwithstanding the foregoing, the
decision as to whether to exercise the option granted by this Section 13 shall
be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ Harry M. Cornell By: /s/ Robert A. Jefferies
- ----------------------------------- ------------------------------------
Participant Senior Vice President
4
LEGGETT & PLATT, INCORPORATED
DEFERRED COMPENSATION AGREEMENT
This agreement ("Agreement") is made between Leggett & Platt, Incorporated
or its affiliates ("Company") and the executive named below ("Executive").
1. PURPOSE. The purpose of this Agreement is to allow Executive the
opportunity to defer payment of salary, awards and other earnings as set forth
on Exhibit A hereto (collectively "Earnings").
2. DEFERRAL. Executive irrevocably elects to defer payment of those
Earnings set forth on Exhibit A hereto ("Deferral Election Form"). Executive
shall submit an executed and completed Deferral Election Form to the Staff
Vice President-Personnel ("Administrator") prior to the time such Earnings
would have otherwise been paid but for such election. The extent of the
deferral, the terms and increments of payment of the Earnings shall be as set
forth on the Deferral Election Form and this Agreement.
3. ESTABLISHMENT OF ACCOUNT. The Administrator shall establish an account
on the Company's books to which the Earnings, and interest thereon as set
forth in Exhibit B shall be credited ("Account"). The establishment of such
Account shall not constitute a trust or a fiduciary relationship.
4. VESTING. The amount credited to the Account shall be at all times and in
all events one hundred percent (100%) vested in Executive.
5. EXECUTIVE'S RIGHTS UNSECURED. The right of Executive to receive any
unpaid portion of the Account shall be an unsecured claim against the general
assets of the Company. The Company's obligation under this Agreement is a
mere promise to pay money.
6. ADMINISTRATION. This Agreement shall be administered by a Deferred
Compensation Committee ("Committee") consisting of the Compensation Committee
of the Company. The Administrator will be responsible for administering this
Agreement under the direction, control and supervision of the Committee. The
Committee shall have the authority to adopt rules and regulations for carrying
out the Agreement and discretionary authority to interpret, construe and
implement the provisions hereof. The decisions of the Committee, including,
but not limited to, interpretations and determination of amounts due under this
Agreement (which shall be made in the manner, and in accordance with
procedures, required by law), shall be final and binding on all parties. The
Committee shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to such Committee member's own gross misconduct.
7. PAYMENT OF EXECUTIVE'S ACCOUNT. Notwithstanding anything contained in
the Deferral Election Form, the amount credited to each Executive's Account
shall be paid as provided below:
a. TERMINATION. In the event Executive's employment is terminated for
reasons other than death, retirement or disability, Executive shall
receive the balance in his Account in a lump sum payment as soon as
reasonably practical after such termination.
b. DISABILITY. In the event Executive is determined to be totally and
permanently disabled by the Committee, Executive shall receive the
balance in his Account in a lump sum payment as soon as
reasonably practical after the Administrator has made a
determination of such disability.
c. DEATH. In the event of Executive's death, the balance in the
Executive's account shall be paid in a lump sum payment to
participant's beneficiary or estate as soon as reasonably
practical thereafter.
8. DISCRETIONARY PAYMENTS. Notwithstanding any other provision of this
Agreement or the Deferral Election Form, the Committee may in its sole
discretion at any time during the first calendar quarter of 1994, make a full
lump sum payment (i) to Executive or (ii) in the case of Executive's death to
Executive's estate or beneficiary who would otherwise be entitled to receive
such amount in installments.
In addition at any time following a request by Executive or Executive's
successor, the Committee may at its sole discretion make a full lump sum
payment or partial lump sum payment to Executive or Executive's estate or
beneficiary.
9. DESIGNATION OF BENEFICIARY. Executive may file with the Administrator a
form provided by the Administrator designating one or more beneficiaries to
whom payments hereunder shall be made in the event of Executive's death.
Executive may change or revoke a designation of a beneficiary at any time or
from time to time without obtaining the consent of the beneficiary and the
Company shall have no duty to notify such person of the change. A change of
beneficiary shall be made by completing a form provided by the Administrator.
If notice of beneficiary is not on file with the Administrator or if no
person designated by Executive is living at the time of the Executive's
death, then the Executive's estate shall be deemed to be his designated
beneficiary for the purposes hereof.
10. NOT ASSIGNABLE. The right of an Executive to receive any unpaid portion
of the Executive's Account shall not be assigned, transferred, pledged or
encumbered or be subject in any manner to alienation or anticipation.
11. CONFLICT OF DOCUMENTS. In the event of any conflict between the Deferral
Election Form and this Agreement, this Agreement shall control.
12. INCOME AND PAYROLL TAX WITHHOLDING. The Company shall withhold from
Earnings any taxes required to be withheld for federal, state or local
governmental purposes.
13. NO CONTRACT OF EMPLOYMENT. This Agreement does not constitute a contract
of employment.
14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns and to Executive, his
heirs, executors, administrators and legal assigns.
This Agreement has been executed by Executive and Company on the date set
forth below.
________________________________ Dated:__________, 1993
EXECUTIVE
LEGGETT & PLATT, INCORPORATED
By: ______________________________
Title: ______________________________
EXHIBIT A
LEGGETT & PLATT, INCORPORATED
DEFERRED COMPENSATION AGREEMENT
DEFERRAL ELECTION FORM
1994 SALARY
Amount or Percentage $ _______________ or __________%
Form of Payment _____________________________
Date of Payment(s) _____________________________
Length of Payment _____________________________
1994 ANNUAL SALARY INCREASE
Amount or Percentage $ _______________ or __________%
Form of Payment _____________________________
Date of Payment(s) _____________________________
Length of Payment _____________________________
MANAGEMENT INCENTIVE AWARD
(normally payable 2/94)
Amount or Percentage $ ______________ or __________%
Form of Payment ____________________________
Date of Payment(s) ____________________________
Length of Payment ____________________________
OTHER EARNINGS
(Other earnings that Executive desires to defer shall be set forth in
an addendum to this Exhibit A.)
BENEFICIARY DESIGNATION ____________________________
Name ________________________________ Signature _____________________________
EXPLANATIONS ON NEXT PAGE
AMOUNTS Must be even multiple of $100; minimum $1,000
PERCENTAGES Must be between 1% and 100%
FORM OF PAYMENT Choices: A. Lump Sum
B. Annual Installments
C. Quarterly Installments
DATE OF PAYMENT Date on which benefits commence. Payment dates
may be different for each type of compensation
deferred.
Specified Date--must be two or more years after
the end of the calendar year for which the
election is in effect. (I.E., cannot begin
before January 1, 1997)
LENGTH OF PAYMENT Number of years benefits are paid. (If lump sum
payment is elected, this would not be
applicable).
EXHIBIT B
RATES OF INTEREST
3 years -- 6%
5 years -- 6.7%
7 years -- 7%
10 years -- 7.2%
NOTE: Rates of interest for periods different from those set forth above
shall be determined by the Senior Vice President, Finance and
Administration in a manner generally consistent with the determination
of the above rates. In the event Executive does not elect a lump sum
payment, interest will be calculated based on the average life of the
loan.
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES Exhibit 11
COMPUTATIONS OF EARNINGS PER SHARE
(Amounts in millions, except per share data)
Year Ended December 31,
-------------------------------
1993 1992 1991
-------------------------------
EARNINGS PER SHARE
Weighted average number of common
shares outstanding . . . . . . . . . 40.1 39.1 36.7
Dilution from outstanding stock
options-computed using the
"treasury stock" method. . . . . . . .7 .5 .3
Dilution from shares issuable
under contingent earnout
agreement . . . . . . . . . . . . . . .3 .2 .1
-------------------------------
Weighted average number of common
shares outstanding as adjusted . . . . 41.1 39.8 37.1
-------------------------------
-------------------------------
Net Earnings . . . . . . . . . . . . . . $ 85.9 $ 65.4 $ 40.0
-------------------------------
-------------------------------
Earnings Per Share . . . . . . . . . . . $ 2.09 $ 1.64 $ 1.08
-------------------------------
-------------------------------
NOTE: Previously reported amounts have been restated to reflect
acquisitions accounted for as poolings of interests as
discussed in Note B of Notes to Consolidated Financial Statements.
EXHIBIT 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
Percentage of Voting
Name and State of Organization Securities or Interest
- ------------------------------ ----------------------
Adcom Wire, a Florida partnership,
d/b/a Adcom Wire Company 100%
(owned 50% by L&P Acquisition Company - 8
and 50% by Leggett Wire Company, both
Delaware corporations)
Berkshire Furniture Co., Inc. 100%
a Delaware corporation
Bois J.L.P. Inc. 100%
a Canadian corporation
Collier-Keyworth, Inc. 100%
a North Carolina corporation
Crest-Foam Corp. 100%
a New Jersey corporation
Crest-Hood Foam Company, Inc. 100%
a Delaware corporation
Northfield Metal Products (1994) Ltd./Metaux
Northfield (1994) Ltee 100%
a Canadian corporation
Dresher, Inc. 100%
a Delaware corporation
Elbe Vlees B.V. 100%
a Netherlands corporation
Gribetz International, Inc. 100%
a Delaware corporation
Gribetz Threads, Inc. 100%
a Florida corporation
Hanes Companies, Inc. 100%
a North Carolina corporation
Hanes Converting Company of New York, Inc. 100%
a North Carolina corporation
Percentage of Voting
Name and State of Organization Securities or Interest
- ------------------------------ ----------------------
L and P Mexico, S.A. DE C.V. 100%
a Mexican corporation
L&P Acquisition Company - 8 100%
a Delaware corporation
L&P Automotive Holdings Company 100%
a Delaware corporation
L&P International Holdings Company 100%
a Delaware corporation
L&P Property Management Company 100%
an Illinois corporation
L & P Transportation Co. 100%
a Delaware corporation
L&P Western Spring Co. 100%
a Delaware corporation
Leggett And Platt International Corporation 100%
a Missouri corporation
Leggett & Platt Foreign Sales Corporation 100%
a Barbados corporation
Leggett & Platt International Development Co. 100%
a Delaware corporation
Leggett & Platt U.K. Limited 100%
an United Kingdom corporation
Leggett Wire Company 100%
a Delaware corporation
Masterblend, Inc. 100%
a Mississippi corporation
Multilastic Limited 100%
an United Kingdom corporation
Percentage of Voting
Name and State of Organization Securities or Interest
- ------------------------------ ----------------------
Leggett & Platt Canada Ltd. 100%
a Canadian corporation
No-Sag Spring Company, Limited 100%
a Canadian corporation
Steiner-Liff Textile Products Co. 100%
a Tennessee corporation
Stylelander Metal Stamping, Inc. 100%
a Mississippi corporation
Weber Plastics Co. Ltd. 100%
an Ontario corporation
Young Spring & Wire Company 100%
a Delaware corporation
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements of Leggett & Platt, Incorporated, listed below, of our report dated
February 17, 1994 appearing on page 29 of Leggett & Platt, Incorporated's
Annual Report on Form 10-K for the year ended December 31, 1993. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedules, which is included in this Form 10-K.
1. Post-Effective Amendment No. 1 to Form S-8, Registration No. 33-15441,
filed August 29, 1989.
2. Form S-8, Registration No. 33-44224, filed November 27, 1991.
3. Form S-8, Registration No. 33-45334, filed January 27, 1992.
4. Form S-8, Registration No. 33-45335, filed January 27, 1992.
5. Form S-8, Registration No. 33-45336, filed January 27, 1992.
6. Form S-8, Registration No. 33-67910, filed August 26, 1993.
/s/ Price Waterhouse
PRICE WATERHOUSE
St. Louis, Missouri
March 18, 1994
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors of
LEGGETT & PLATT, INCORPORATED, a Missouri corporation (the "CORPORATION") does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr., and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to sign in the name of and on behalf of the
undersigned directors of the Corporation and to file with the Securities &
Exchange Commission the Corporation's Annual Report on Form 10K for the fiscal
year ended December 31, 1993 and any other documents or further Amendments to
said Annual Report, and to take such other action, all as said attorneys-in-
fact, or any one of them, deem necessary or advisable to the end that such
Annual Report or amendments thereto in respect of same, shall comply with the
Securities Exchange Act of 1934, as amended, and the applicable rules of the
Securities and Exchange Commission thereunder; and does hereby ratify and
confirm all that said attorneys-in-fact, and each of them, may do by virtue
hereof.
Additionally, each of the undersigned directors of the Corporation does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr. and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to, from time to time, sign in the name of
and on behalf of the undersigned directors of the Corporation and to file with
the Securities & Exchange Commission Registration Statements with respect to the
Corporation's common stock, $.01 par value, and the Preferred Stock Purchase
Rights attached to and trading with such Common Stock to be sold in secondary
offerings by shareholders of the Company and any other documents or further
Amendments or Post Effective Amendments to such Registration Statements and to
take such other action, all as said attorneys-in-fact, or any one of them, deem
necessary or advisable and does hereby ratify and confirm all that said
attorneys-in-fact, and each of them, may do by virtue hereof.
Additionally, each of the undersigned directors of the Corporation does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr. and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to, from time to time, sign in the name of
and on behalf of the undersigned directors of the Corporation and file with the
Securities & Exchange Commission Registration Statements with respect to
securities (including the Corporation's common stock, $.01 par value, and the
Preferred Stock Purchase Rights attached to and trading with such Common Stock)
to be sold pursuant to the Corporation's Restated Employee Stock Purchase/Stock
Bonus Plan, 1989 Discount Stock Plan, 1989 Flexible Stock Plan, Directors Stock
Option Plan and any other employee benefit plans of the Corporation adopted or
approved during calendar year 1994 and any other documents or further Amendments
or post Effective Amendments to such Registration Statements (or any previous
registration statements filed as respects any of the above-mentioned Plans) and
to take such other action, all as said attorneys-in-fact, or any one of them,
deem necessary or advisable and does hereby ratify and confirm all that said
attorneys-in-fact, and each of them, may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney or
a counterpart hereof, as of the 9th day of February, 1994.
/s/ Herbert C. Casteel /s/ Robert A. Jefferies, Jr.
- --------------------------------- ---------------------------------
Herbert C. Casteel Robert A. Jefferies, Jr.
/s/ Harry M. Cornell, Jr. /s/ Alexander M. Levine
- --------------------------------- ---------------------------------
Harry M. Cornell, Jr. Alexander M. Levine
/s/ Robert Ted Enloe, III /s/ James C. McCormick
- --------------------------------- ---------------------------------
Robert Ted Enloe, III James C. McCormick
/s/ Richard T. Fisher /s/ Richard L. Pearsall
- --------------------------------- ---------------------------------
Richard T. Fisher Richard L. Pearsall
/s/ Frank E. Ford, Jr. /s/ Maurice E. Purnell, Jr.
- --------------------------------- ---------------------------------
Frank E. Ford, Jr. Maurice E. Purnell, Jr.
/s/ Felix E. Wright
---------------------------------
Felix E. Wright
