EXHIBIT 99.1
[LETTERHEAD OF LEGGETT & PLATT]
FOR IMMEDIATE RELEASE: APRIL 16, 2003
LEGGETT REPORTS $.25 FIRST QUARTER EARNINGS
Carthage, MO, April 16 ---
. First quarter 2003 EPS at $.25, in line with prior guidance.
. Earnings are 3 cents, or 11%, lower than 1Q 2002 primarily due to
higher energy costs.
. 1Q revenues of $1.04 billion; organic sales growth of 1.5% versus 1Q
2002.
. $377 million of cash on hand; net debt-to-cap below 25%.
. 2003 guidance narrowed: EPS of $1.15-$1.30, on 0%-4% organic sales
growth.
. 2Q 2003 guidance: EPS of $.27-$.32 on sales of $1.05-1.10 billion.
Fortune 500 diversified manufacturer Leggett & Platt reported first quarter
earnings of $.25 per diluted share, in line with guidance issued earlier in the
quarter. Higher energy costs impacted earnings by approximately 3 cents per
share, and led to an 11% decline from 1Q 2002 earnings of $.28. Sales were $1.04
billion. Both total sales and same location sales increased 1.5% over the first
quarter of 2002, as $15 million in sales from acquisitions were offset by
revenue decreases arising from recent divestitures.
Management Comments
Felix E. Wright, Chairman and CEO said, "This was a challenging quarter. Despite
sales growth and cost structure improvement, earnings per share declined about
11%. Energy costs played a large role, but are expected to become less of a
factor as we move into the summer.
"Consumer demand for bedding and residential furniture was lackluster this
quarter. For the first time in over a year sales declined in our Residential
Segment. In the Commercial Segment, demand for both retail store fixtures and
commercial office furniture components remains weak. In contrast, the Aluminum
Segment doubled earnings and posted a double-digit margin, as it continued to
benefit from sales growth, market share gains, and efficiency improvements.
"In February we announced a first quarter dividend of $.13 per share, an 8%
increase over the same quarter one year earlier. At an indicated annual rate of
$.52 per share (and a current yield of 2.6%), 2003 should mark 32 consecutive
years of dividend increase for Leggett, at a compound annual growth rate of 15%.
We believe this to be the best dividend record among the Fortune 500.
"In March we issued $200 million of new debt, taking advantage of the current
low interest rates, locking in a 4.7% rate on these 10-year notes. This was an
opportunistic move, as we have no specific immediate need for the cash. We
intend to use the proceeds for general corporate purposes, which may include the
repayment or refinancing of existing debt, stock repurchases, and/or the
financing of future acquisitions."
Second Quarter and Full Year Outlook
Market demand, and its impact on sales revenue, remains the biggest single lever
affecting Leggett's earnings. With the first quarter completed, the company is
slightly narrowing its 2003 sales growth forecast (excluding acquisitions) to a
range of zero to 4%. This sales range yields earnings guidance of $1.15-$1.30
per share for the full year.
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Typically, in the second quarter, Leggett sees about a $50 million sequential
increase in sales (versus first quarter). All else being equal, this would
equate to about a 5 cent per share sequential increase in earnings. Given
current uncertainty about consumer sentiment and the underlying strength of the
economy, it is difficult to accurately forecast second quarter sales. That said,
the company anticipates sales between $1.05 and $1.10 billion for the second
quarter. Based on this sales range, Leggett expects earnings of $.27-$.32 per
share for the second quarter.
Management will discuss these results at 8:00 a.m. Central (9am Eastern) on
Thursday, April 17. The teleconference can be accessed (live or replay) from the
Investor Relations section of Leggett's website at www.leggett.com. The dial-in
number is (303) 262-2075. Second quarter results will be released on July 16,
with a conference call on July 17.
SEGMENT RESULTS - First Quarter 2003 (versus the same quarter one year ago)
Residential Furnishings - Total sales decreased 0.7%. Same location sales
decreased 1.4%, but were partially offset by acquisitions. EBIT (earnings
before interest and income taxes) decreased $12.2 million, or 20%, due to
higher energy and raw material costs, reduced production (and lower overhead
absorption), absence of last year's partial reversal of Canadian lumber duty
accruals, and change in sales mix. Market demand for bedding components
declined in the quarter, and is still down; however, demand for upholstered
furniture components was basically unchanged from last year's strong first
quarter levels. Many analysts believe there is pent up demand for furniture
and bedding, as consumers have yet to fully furnish homes acquired in the last
few years at historically low interest rates.
Commercial Fixturing and Components - Total sales increased 1.0%, as
acquisitions augmented the 0.3% increase in same location sales. Steep
declines in market demand have moderated, as evidenced by the company's first
same location growth quarter in over two years. Nevertheless, demand remains
at very depressed levels as retailers, telecom customers, and brand product
manufacturers continue to postpone spending for fixtures and displays. Some
analysts believe that, once the economy recovers, there could be a significant
wave of new spending because retailers have been postponing store fixture
purchases (both for new stores and refurbishment of old stores) for over two
years. Finally, market demand for office and contract furniture components
remains soft. EBIT decreased $2.7 million, due in part to increased energy and
raw material costs, and changes in product mix.
Aluminum Products - Total sales decreased 1.5%. Same location sales increased
8.0%, but were more than offset by three recent divestitures. Following two
years of reduced same location sales caused by decreased market demand, same
location sales have now grown each of the last four quarters, at an average of
12.5%. Importantly, recent sales growth is attributable to market share gains,
as overall market demand has not improved appreciably. The company divested
three operations during 2002; these firms collectively had revenues of about
$40 million annually, but did not contribute significantly to EBIT. EBIT
increased $7.3 million for the quarter, or 118%, due to higher same location
sales, absence of last year's obsolescence charges, and cost management
efforts.
Industrial Materials - Total sales increased 1.4%, as acquisitions more than
offset a 2.7% decline in same location sales. EBIT declined $7.4 million, or
48%, due in large part to start up costs (of $5.1 million, as anticipated) at
the Sterling Steel rod mill. Higher steel prices, higher energy costs, and
lower production and sales also reduced EBIT. The reductions were partly
offset by a $2.6 million gain on sale of a tube fabrication business.
Specialized Products - Total sales increased $18.6 million, or 21.7%. Same
location sales increased 20.8% in response to higher demand for both machinery
and automotive components. EBIT increased $2.1 million, or 24%, with
sales-related earnings increases partially offset by several small items,
including sales mix and start up costs associated with production of
wide-format digital printing equipment.
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COMPANY DESCRIPTION: Leggett & Platt (NYSE: LEG) is a Fortune 500 diversified
manufacturer that conceives, designs and produces a broad variety of engineered
components and products for customers worldwide. The company is composed of 29
business units, 31,000 employee-partners, and more than 300 facilities located
in 18 countries. Leggett believes it has the best Fortune 500 dividend growth
record (32 consecutive annual increases at 15% CAGR). The company has grown
sales and earnings at a 15% annual average since going public in 1967,
consistently posts top quartile performance among the Fortune 500, and sets a
high standard for financial transparency and quality of earnings.
Leggett & Platt is North America's leading independent manufacturer of the
following: a) retail store fixtures and point of purchase displays; b)
components for residential furniture and bedding; c) components for office
furniture; d) non-automotive aluminum die castings; e) drawn steel wire; f)
automotive seat support and lumbar systems; and g) bedding industry machinery
for wire forming, sewing and quilting. Primary raw materials include steel and
aluminum. Main operations include metal stamping, forming, casting, machining,
coating, welding, wire drawing, and assembly.
SAFE HARBOR: This news release includes "forward-looking" statements that
involve uncertainties and risks. Actual results could differ materially from the
company's expectations, and the company undertakes no obligation to update or
revise these forward-looking statements. Factors that could cause such
differences include the company's ability to improve operations and realize cost
savings, competitive and general economic conditions, future growth of acquired
companies, and other risks described in the company's Annual Report or Form
10-K.
CONTACT: Investor Relations, (417) 358-8131 or invest@leggett.com
David M. DeSonier, Vice President, or Susan R. McCoy, Director
FOR MORE INFORMATION: Visit Leggett's website at www.leggett.com.
Page 4 of 6
LEGGETT & PLATT April 16, 2003
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS FIRST QUARTER
- --------------------------------------------- --------------------------------
(in millions, except per share data.) 2003 2002 Change
- --------------------------------------------- ---------- ---------- --------
Net sales $ 1,037.6 $ 1,022.7 1.5%
Cost of goods sold 856.3 823.6 4.0%
---------- ----------
Gross profit 181.3 199.1
Selling & administrative expenses 97.2 97.6 (0%)
Other deductions, net of income (1.0) 4.1
---------- ----------
Earnings before interest and taxes 85.1 97.4 (13%)
Interest expense 9.9 11.3
Interest income 1.4 1.3
---------- ----------
Earnings before income taxes 76.6 87.4
Income taxes 27.2 31.2
---------- ----------
Net earnings $ 49.4 $ 56.2 (12%)
========== ==========
Earnings per share
Basic $ 0.25 $ 0.28
Diluted $ 0.25 $ 0.28 (11%)
Average shares outstanding
Basic 197.6 199.5
Diluted 197.8 200.7
- --------------------------------------------------------------------------------
CASH FLOW FIRST QUARTER
- --------------------------------------------- --------------------------------
(in millions.) 2003 2002 Change
- --------------------------------------------- ---------- ---------- --------
Net Earnings $ 49.4 $ 56.2
Depreciation and Amortization 40.3 38.3
Working Capital decrease (increase) (39.4) 15.4
Other operating activity (1.0) (2.3)
---------- ----------
Net Cash from Operating Activity $ 49.3 $ 107.6 (54%)
Additions to PP&E (33.0) (24.7) 34%
Purchase of companies, net of cash (3.9) (9.6) (59%)
Additions (payments) to Debt, net 148.5 (4.3)
Dividends paid (25.3) (23.6)
Repurchase of Common Stock, net (30.6) (13.0)
Other 46.8 6.5
---------- ----------
Increase (Decr.) in Cash & Equiv. $ 151.8 $ 38.9
========== ==========
- --------------------------------------------------------------------------------
FINANCIAL POSITION March 31
- --------------------------------------------- --------------------------------
(in millions.) 2003 2002 Change
- --------------------------------------------- ---------- ---------- --------
Cash and equivalents $ 376.8 $ 226.1
Receivables 640.2 635.7 1%
Inventories 667.8 588.6 13%
Other current assets 69.3 74.3
---------- ----------
Total current assets 1,754.1 1,524.7
Net fixed assets 959.8 951.4 1%
Other assets 1,015.2 1,021.2 (1%)
---------- ----------
TOTAL ASSETS $ 3,729.1 $ 3,497.3
========== ==========
Trade accounts payable $ 218.0 $ 193.1 13%
Current debt maturities 78.0 5.8
Other current liabilities 317.0 326.3 (3%)
---------- ----------
Total current liabilities 613.0 525.2 17%
Long term debt 997.3 966.0 3%
Deferred taxes and other liabilities 117.9 109.2
Shareholders' equity * 2,000.9 1,896.9 5%
---------- ----------
Total Capitalization 3,116.1 2,972.1
---------- ----------
TOTAL LIABILITIES & EQUITY $ 3,729.1 $ 3,497.3
========== ==========
Working capital (excl cash & curr. debt) $ 842.3 $ 779.2 8%
Debt to Total Cap (net of cash & curr. debt) 24.8% 27.1%
* In accordance with Financial Accounting Standard No. 130, comprehensive
earnings were $67.2 and $54.6 for the three months ending March 31, 2003 and
2002, respectively.
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LEGGETT & PLATT April 16, 2003
- ---------------------------------------------------------------------------------------------------
SEGMENT RESULTS FIRST QUARTER
- --------------------------------------------------- ---------------------------------------------
(in millions.) 2003 2002** Change
------------- -------------- --------------
External Sales
- -------------------------------------------
Residential Furnishings $ 530.6 $ 533.5 (0.5%)
Commercial Fixturing & Components 201.8 200.6 0.6%
Aluminum Products 125.6 127.2 (1.3%)
Industrial Materials 91.1 86.0 5.9%
Specialized Products 88.5 75.4 17.4%
------------ ------------- ------------
Total $ 1,037.6 $ 1,022.7 1.5%
============ ============= ============
Inter-Segment Sales
- -------------------------------------------
Residential Furnishings $ 2.8 $ 3.7
Commercial Fixturing & Components 2.3 1.4
Aluminum Products 3.1 3.5
Industrial Materials 55.7 58.8
Specialized Products 15.9 10.4
------------ -------------
Total $ 79.8 $ 77.8
============ =============
Total Sales
- -------------------------------------------
Residential Furnishings $ 533.4 $ 537.2 (0.7%)
Commercial Fixturing & Components 204.1 202.0 1.0%
Aluminum Products 128.7 130.7 (1.5%)
Industrial Materials 146.8 144.8 1.4%
Specialized Products 104.4 85.8 21.7%
------------ ------------- ------------
Total $ 1,117.4 $ 1,100.5 1.5%
============ ============= ============
EBIT
- -------------------------------------------
Residential Furnishings $ 49.9 $ 62.1 (20%)
Commercial Fixturing & Components 5.9 8.6 (31%)
Aluminum Products 13.5 6.2 118%
Industrial Materials 8.0 15.4 (48%)
Specialized Products 10.9 8.8 24%
Intersegment eliminations (3.1) (2.0)
Change in LIFO reserve 0.0 (1.7)
------------ ------------- ------------
Total $ 85.1 $ 97.4 (13%)
============ ============= ============
------------
EBIT Margin * Basis Pts
- ------------------------------------------- ------------
Residential Furnishings 9.4% 11.6% (220)
Commercial Fixturing & Components 2.9% 4.3% (140)
Aluminum Products 10.5% 4.7% 580
Industrial Materials 5.4% 10.6% (520)
Specialized Products 10.4% 10.3% 10
------------ ------------- ------------
Overall 8.2% 9.5% (130)
============ ============= ============
* Segment margins calculated on Total Sales. Overall company margin calculated
on External Sales.
** Segment figures for 2002 are restated for an organizational move of two small
operations from Specialized to Residential.
- -----------------------------------------------------------------------------------------------------------------------------------
LAST SIX QUARTERS 2001 2002 2003
- --------------------------------------------------- ------------ ------------------------------------------------ ------------
4Q 1Q 2Q 3Q 4Q 1Q
------------ ------------------------------------------------ ------------
Selected Figures
- ---------------------------------------------------
Trade Sales ($ million) 969 1,023 1,115 1,121 1,013 1,038
Same Location Sales Growth (vs. prior year) (8.4%) (6.7%) 3.8% 2.6% 3.2% 1.5%
EBIT ($ million) 66.9 97.4 118.3 100.3 84.6 85.1
EBIT Margin 6.9% 9.5% 10.6% 8.9% 8.4% 8.2%
Net Earnings ($ million) 35.4 56.2 70.3 57.7 48.9 49.4
Net Margin 3.7% 5.5% 6.3% 5.1% 4.8% 4.8%
EPS (diluted) $0.18 $ 0.28 $ 0.35 $ 0.29 $ 0.25 $0.25
Cash from Operations ($ million) 121 108 84 140 125 49
Debt to Total Cap (net of cash & curr. debt) 29% 27% 27% 26% 25% 25%
------------ ------------------------------------------------ ------------
Same Location Sales (vs. prior year) 4Q 1Q 2Q 3Q 4Q 1Q
- --------------------------------------------------- ------------ ------------------------------------------------ ------------
Residential Furnishings (2.7%) 0.1% 6.1% 2.5% 2.4% (1.4%)
Commercial Fixturing & Components (21.8%) (23.2%) (7.6%) (3.8%) (2.3%) 0.3%
Aluminum Products (18.7%) (2.5%) 13.5% 8.1% 20.3% 8.0%
Industrial Materials (2.4%) 0.2% 7.1% 6.0% (3.1%) (2.7%)
Specialized Products 1.3% (11.2%) 5.6% 12.0% 9.4% 20.8%
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REGULATION G REQUIREMENT:
RECONCILIATION OF FINANCIAL INFORMATION
CALCULATION OF "WORKING CAPITAL" AND "DEBT TO TOTAL CAPITAL"
IN FINANCIAL SCHEDULES
In the previous schedules, Working Capital excludes cash. In addition, in the
Debt to Total Capital ratio, debt is reduced by the amount of cash on hand. The
Company has a considerable amount of cash beyond its current needs. Because this
cash is readily available to repay debt, the Company believes that these
adjustments result in figures that more appropriately reflect its working
capital position and financial leverage.
Working Capital also excludes current debt (resulting in a higher working
capital figure). The Debt to Total Capital calculation includes current debt
(resulting in a higher debt figure). Current debt is viewed by the Company as
part of total debt, and is treated in these calculations as if it were part of
long term debt. The Company has traditionally refinanced current debt, and has
sufficient credit facilities in place to do so. Due to the Company's current
cash position, its intention is to repay the existing current debt at maturity;
the debt is therefore classified on the Balance Sheet as current. The Company
believes that these adjustments result in figures that more appropriately
reflect its working capital position and financial leverage.
The calculations are made as follows:
Working Capital: 2003 2002
- ---------------- ---- ----
Current Assets $ 1,754.1 $ 1,524.7
Current Liabilities 613.0 525.2
--------------------------
Working Capital 1,141.1 999.5
Eliminate Cash (376.8) (226.1)
Eliminate Current Debt 78.0 5.8
--------------------------
Working Capital, After Adjustments $ 842.3 $ 779.2
--------------------------
Quarterly Sales $ 1,037.6 $ 1,022.7
--------------------------
Working Capital as a Percent of Annualized Sales
Before Adjustments 27.5% 24.4%
Per Attached Schedules 20.3% 19.0%
Debt To Total Capital: 2003 2002
- ---------------------- ---- ----
Long-Term Debt $ 997.3 $ 966.0
Current Debt Maturities 78.0 5.8
Excess Cash (376.8) (226.1)
--------------------------
Net Debt, After Adjustments $ 698.5 $ 745.7
--------------------------
Deferred Taxes and Other Liab. 117.9 109.2
Shareholders Equity 2,000.9 1,896.9
--------------------------
Total Capital $ 3,116.1 $ 2,972.1
--------------------------
Current Debt Maturities 78.0 5.8
Excess Cash (376.8) (226.1)
--------------------------
Total Capital, After Adjustments $ 2,817.3 $ 2,751.8
--------------------------
Debt to Total Capital
Before Adjustments 32.0% 32.5%
Per Attached Schedules 24.8% 27.1%