Diversified wire product manufacturer Leggett & Platt reported fourth quarter 2018 sales of $1.05 billion, a 6 percent increase versus fourth quarter last year. The company said in a statement that volumes were flat, and raw material-related price increases added 3 percent to sales growth and acquisitions also added 3 percent. Fourth quarter EPS was $.39. Fourth quarter adjusted EPS was $.62, a 5 percent increase versus 2017, primarily due to improved metal margins at the company’s steel rod mill.
Full-year sales grew 8 percent, to $4.27 billion, and same location sales increased 6 percent. Volume grew 3 percent, with gains in Automotive, Bedding, Adjustable Bed, Work Furniture, and Aerospace partially offset by declines in other businesses, primarily Home Furniture, Fashion Bed, and Flooring Products. Raw material-related price increases and currency impact added 3 percent. Acquisitions, net of 2017 divestitures, contributed 2 percent to sales growth.
Full-year 2018 EPS from continuing operations was $2.26. Full-year adjusted EPS from continuing operations increased 1 percent to $2.48. EPS benefitted from improved metal margins at our steel rod mill and higher sales. However, these improvements were largely offset by higher raw material costs (including LIFO expense), the lag associated with passing along ongoing inflation, and weak performance in Home Furniture and Fashion Bed. EBIT margin was 10.2 percent and adjusted EBIT margin was 11.1 percent. In 2017, EBIT margin (both reported and adjusted) was 11.9 percent.
As for an outlook, the company said, "Looking forward, 2019 sales growth will benefit significantly from the ECS acquisition. We also expect sales growth in Automotive, US Spring, Aerospace and Hydraulic Cylinders, partially offset by planned declines in Fashion Bed and Home Furniture related to restructuring activity and from less promotional activity in Adjustable Bed. With the realization of higher sales and moderating steel inflation, we anticipate improved earnings in the coming year.”
The company said 2019 sales are expected to be $4.95-$5.1 billion, an increase of 16-19 percent versus 2018. The ECS acquisition should add approximately $675 million to sales. EPS is expected to be $2.35-$2.55, including approximately $.10 per share of restructuring-related costs.