| BRIEFLY | |
| L&P full-year results | |
| Net sales | $3.782 billion |
| Adjusted earnings per share | $1.78 |
| Residential Furnishings Segment sales | Up 13% |
| Industrial Materials Segment sales | Up 3% |
| L&P fourth-quarter results | |
| Net sales (from continuing operations) | $953.3 million |
| Adjusted earnings per share | $0.41 |
| Residential Furnishings Segment sales | Up 21.1% |
| Industrial Materials Segment sales | Down 8.5% |
Industry supplier Leggett & Platt, with headquarters in Carthage, Missouri, reported that strong full-year sales growth in 2014 yielded record adjusted earnings per share of $1.78, a 19% increase compared with full-year 2013 adjusted EPS.
L&P full-year net income was $101.2 million on net sales of $3.782 billion, a 49% decrease and 9% increase, respectively, compared with 2013. 2014 earnings were impacted by several unusual items, including a noncash impairment charge of $108 million, litigation costs, a loss on the divestiture of its store fixtures business, and an operating loss from discontinued operations, the company said.
Total sales in L&P’s Residential Furnishings Segment, which includes bedding components, adjustable beds, foam and other bedding-related products, increased to $256 million, or 13%, in full-year 2014. Same location sales increased 9%, due to growth in most product categories, and acquisitions added 4% to sales. Earnings before interest and taxes (EBIT) decreased $8 million, with the higher sales more than offset by $54 million in litigation costs, L&P said.
In July, L&P acquired Tempur Sealy’s three U.S. innerspring component production facilities, and became the mattress major’s exclusive long-term supplier in the U.S. and Canada of wire-based innersprings.
Total sales in the Industrial Materials Segment, which includes mattress-manufacturing equipment, increased by $21 million, or 3%, largely from acquisitions. EBIT decreased $16 million, or 22%, due to reduced margins on metal, weather-related costs and inefficiencies early in 2014, the company said.
Commenting on the results, David Haffner, L&P board chair and chief executive officer said, “In 2014, Leggett & Platt achieved strong volume gains and improved margins, which contributed to record adjusted EPS, a record stock price, and superb (total shareholder return). Our stock price rose 38% in 2014, from approximately $31 to $43, with much of the increase occurring in the fourth quarter. Including dividends, our 2014 TSR was 43%, which ranked in the top 7% of the S&P 500 companies. As we begin 2015 we continue to experience strong demand for our products, and are optimistic about what we can achieve this year.
“Our primary goal, which is unchanged since 2007, is to generate TSR that ranks within the top third of the S&P 500 companies over rolling three-year periods. … For the three-year period ending 2014, we surpassed our goal by generating TSR in the top quarter of the S&P500. Over those three years, Leggett stockholders doubled their money and received a compound TSR of 28% annually, assuming dividends were reinvested.”
Sales from continuing operations in the fourth quarter grew 11%, to $953.3 million. Same location sales grew 6% due in large part to growth in the company’s Residential Furnishings business. Sales in the Residential Furnishings Segment increased 21.1% to 573.9. Fourth-quarter sales in the Industrial Materials Segment declined 8.5% to $ 134.2 million as compared with the prior-year quarter.
Fourth-quarter adjusted EPS from continuing operations was $.41, an 8% increase compared with $.38 in the prior year. This adjusted EPS increase reflects strong sales growth and reduced LIFO (last in, first out) expense, partially offset by a higher adjusted tax rate and a large accrual ($.08 per share) for TSR-driven and other stock-based long-term incentive compensation plans, as a result of the significant increase in Leggett’s stock price relative to the market during the fourth quarter.
Fourth quarter EPS, unadjusted, was $.14, including the litigation accrual, loss on divestiture, and discontinued operations loss. Fourth-quarter 2013 EPS was $.04, including a noncash impairment and discontinued operations loss.
For 2015, the company expects additional sales growth, EBIT margin improvement and record operating EPS. L&P projects 2015 continuing operations’ sales of $3.9-$4.1 billion, an increase of between 3%-8% growth, and EPS of $1.90-$2.10.
