Violations May Be Clarified.
The City Council is scheduled
to meet this evening in City Hall for their
regular meeting at 7:30 p.m.
The agenda includes the first
reading of two bills concerning parking. Council
bill 09-29 clarifies the current ordinance that
prohibits any standing vehicles on public streets
for more than forty-eight hours. The new bill
specifies that an abandoned vehicle shall be
"any vehicle which is disabled or cannot be
driven on the City Street or Highways of the
State for whatever reason."
Council Bill 09-30 would
establish a fine for parking in a handicapped
space without a parking place card issued by the
State of Missouri. Currently there is no fine for
the offense in the Carthage Code. The Council
Bill would make the minimum fine for the
violation $50. It would also extend the
jurisdiction of the Police Department to include
private property parking facilities. Violators
could be towed and be responsible for any charges
incurred along with the fine.
-- 1Q EPS of $.06 per share;
sales from Continuing Operations were $718
million, 28% lower than in prior year.
-- 1Q cash flow from operations
of $115 million, 116% higher than in prior year.
-- 2009 EPS guidance of $.60 -
$.90, on $2.9 - 3.3 billion of sales from
Leggett & Platt reported first quarter
earnings of $.06 per share. In the first quarter
of 2008, earnings from Continuing Operations were
$.23 per share. The year-over-year reduction in
quarterly earnings was primarily due to lower
unit sales volumes, which were partially offset
by improved margins on selected products as a
result of better pricing discipline. First
quarter sales from Continuing Operations were
$718 million, 28% lower than last years
sales of $998 million, due to extremely weak
First quarter cash flow from
operations was $115 million, as efforts to reduce
working capital contributed significantly to cash
flow. Net debt-to-capital was 27.1%, well below
the companys target range of 30-40%. The
first quarter tax rate was 52%, atypically high
due to the low level and mix of earnings among
various tax jurisdictions; the 2009 full year tax
rate is now anticipated to be approximately 39%.
Strategic Progress Amid
President and CEO David S.
Haffner commented, "First quarter earnings
were in line with what we anticipated; however,
market demand was weaker than we expected, and
was the driving force behind the year-over-year
reduction in earnings. In addition, as
anticipated, first quarter earnings were
significantly impacted by steel deflation (as
inventory valuation and selling prices reflected
lower steel costs). This impact should be
essentially offset by a LIFO benefit over the
course of the full year, but the timing mismatch
of these two offsetting items depressed first
quarter earnings and will also impact 2Q, though
to a lesser extent.
"We continue to experience
very weak demand across our markets. For many of
our businesses, demand seems to have stabilized
during the first quarter, albeit at levels below
what we anticipated. Office furniture volume
continues to decline, consistent with industry
trends. Though data for our markets affords only
limited visibility, based upon first quarter
sales and current demand levels we have reduced
our guidance for the full year.
primary strategic objective is to consistently
achieve Total Shareholder Return (TSR(1)) within
the top 1/3 of the S&P 500. From January 1,
2008 through April 21, 2009 we posted TSR of
negative 8%(2); our performance for that period,
though disappointing, ranks within the top 9% of
the S&P 500 companies. We believe that our
TSR would be much lower had we not implemented,
and made significant progress on, our revised
Strong Financial Position
Leggett & Platt remains
well situated to weather the current challenging
economic environment, even if it lasts for an
extended period. The company is in an extremely
strong financial position with: i) nearly $600
million available under its existing commercial
paper program and revolver facility, ii) net
debt-to-capital well below the companys
long-term target, and iii) no significant
long-term debt maturing until 2012.
The company expects, even under
current market conditions, to continue to fund
both capital expenditures and quarterly dividends
from operating cash flow.
Dividend and Stock
During the quarter Leggett
declared a $.25 dividend. At yesterdays
closing share price of $14.75, the indicated
annual dividend of $1.00 per share generates a
dividend yield of 6.8%.
During the first quarter, the
company repurchased 1.3 million shares of its
stock at an average of $13.26 per share, and
issued 2.2 million shares through employee
benefit plans. As a result, shares outstanding
increased by 0.9 million shares to 156.7 million.
2009 Outlook: $.60 to $.90
Earnings per share (from
Continuing Operations) for the full year 2009 are
expected to be $.60 - $.90. Earnings should
benefit from previous closures of
poorly-performing operations, reduced overhead
spending, and lower commodity costs.
Quarterly earnings will be
highly variable. The first half of 2009 is being
negatively impacted by steel deflation (as
inventory valuation and selling prices reflect
lower steel costs). This impact should be
essentially offset for the full year by a LIFO
benefit; Leggett is now forecasting $68 million
of LIFO benefit for the year, and anticipates
recognizing approximately $17 million in each
quarter. As a result of the mismatch in timing of
these two offsetting items, earnings for the
remaining quarters should improve.
Full year sales (from
Continuing Operations) are projected to be
$2.9-3.3 billion, or 19%-29% lower than in 2008.
This reduction from prior guidance reflects
anticipated continuation of extremely weak market
Leggett expects 2009 cash
requirements for dividends (approximately $155
million) and capital expenditures (about $100
million) to be funded solely from operating cash
flow, which is anticipated to exceed $300
million. The company still intends to use excess
cash flow primarily to repurchase shares of its
stock; however, the company may complete those
purchases at a slower pace than previously
anticipated, depending on the outlook for the
economy. Management has a standing authorization
from the Board of Directors to purchase up to 10
million shares annually.
All of Leggetts segments
use the FIFO (first-in, first-out) method for
valuing inventories. An adjustment is made at the
corporate level to convert about 60% of the
inventories to the LIFO (last-in, first-out)
method. Since the LIFO benefit is not recorded at
the segment level, 2009 segment EBIT margins will
be unusually low. Steel cost decreases in 1Q 2009
were significant, and contributed to an
anticipated LIFO benefit of $68 million for the
full year (for Continuing Operations), which
contrasts with $62 million of LIFO expense in
2008. Earnings for the first quarter reflect a
LIFO benefit of $17.0 million, compared to LIFO
expense of $3.6 million in 1Q 2008.
SEGMENT RESULTS - First Quarter
2009 (versus 1Q 2008)
Residential Furnishings - Total
sales from Continuing Operations decreased $109
million, or 21%. Extremely weak market demand
more than offset inflation-related price
increases and market share gains in specific
product categories. EBIT (earnings before
interest and income taxes) from Continuing
Operations decreased $36 million, with the income
impact of significantly lower unit volumes
partially offset by cost reductions.
Commercial Fixturing &
Components - Total sales from Continuing
Operations decreased $77 million, or 40%, due to
the companys decision to walk away from
sales with unacceptable profit margins, market
softness in office furniture components, and
reduced capital spending by retailers. EBIT from
Continuing Operations decreased $11 million.
Industrial Materials - Total
sales decreased $48 million, or 22%, as a result
of weak demand. EBIT decreased $6 million
primarily due to lower sales.
Specialized Products - Total
sales from Continuing Operations decreased $65
million, or 38%. Weak global demand in all parts
of the segment - automotive, machinery, and
commercial vehicle products - led to the decline.
EBIT from Continuing Operations declined $24
million due to lower sales.