Diversified manufacturer Leggett & Platt reported first quarter 2019 sales of $1.16 billion, a 12 percent increase versus first quarter last year. In a press release, the company said volume was down 3 percent, with growth in US Spring more than offset by declines in Fashion Bed, Home Furniture and Automotive. Raw material-related selling price increases of 4 percent were partially offset by a negative currency impact of 2 percent.
The company said first quarter EBIT decreased $9 million and adjusted EBIT decreased $2 million. EBIT benefited from improved metal margins at the steel rod mill and the ECS acquisition's earnings (even after $14 million of purchase accounting charges). However, the company said these increases were more than offset by declines in Automotive, Fashion Bed, Flooring Products, and Adjustable Bed. EBIT margin was 8.5 percent and adjusted EBIT margin was 9.1 percent. In the first quarter of 2018, EBIT margin was 10.4 percent.
First quarter earnings per share reached $0.45. First quarter adjusted EPS was $0.49, a decrease of $0.08 versus 2018.
President and CEO Karl G. Glassman commented, “In the fourth quarter of 2018 we initiated restructuring activity in our Home Furniture and Fashion Bed businesses. We are exiting low margin business, reducing operating costs, and eliminating excess capacity in our Home Furniture business which should be substantially complete by the end of the second quarter. In late March, we announced the closure of the Fashion Bed business which should be substantially complete by the end of the third quarter.”
As for a full-year 2019 guidance, Glassman said, “Our 2019 guidance is unchanged. As mentioned, sales growth will benefit significantly from the ECS acquisition. In addition, we continue to expect sales growth in Automotive, US Spring, Aerospace, Hydraulic Cylinders, and Work Furniture, largely offset by our decision to exit Fashion Bed and planned declines in Home Furniture. We anticipate improved earnings for the full year from higher sales and moderating steel inflation.”
The company expects 2019 sales to reach $4.95-$5.1 billion, an increase of 16-19 percent versus 2018. The company said ECS acquisition should add approximately $650 million to sales (commencing from the January 16, 2019 acquisition date). In addition, organic sales growth is expected to be flat to +3 percent. Earnings per share is expected to be $2.35-$2.55.”