L&P's sales edge up, net income drops 12%
By Furniture Today Staff -- Furniture Today, April 21, 2003
Carthage, Mo. — Leggett & Platt, the furniture industry's largest components supplier, said first-quarter sales edged up 1.5%, but net income dropped 12.1% due to higher energy costs.
The company said sales increased in its commercial fixtures, industrial materials and specialized products divisions, but declined 0.7% in its residential furnishings division, whose products include furniture and bedding components.
"This has been a very difficult period, and many of our businesses are facing significant challenges," said Felix Wright, chairman and chief executive officer. "But we are in a strong position to capitalize on future business opportunities."
Total sales were $1.04 billion for the quarter ended March 31, up from $1.02 billion in last year's first quarter. Net income was $49.4 million, or 25 cents per share, compared with $56.2 million, or 28 cents per share, a year earlier.
During a conference call with securities analysts, Leggett & Platt executives cited weak consumer demand for bedding as the main reason for the sales decline in its residential furnishings segment.
David Haffner, president and chief operating officer, said bedding unit sales in the U.S. declined "in the high single digits" during the quarter, while sales of upholstered furniture components held steady against a strong first quarter of 2002.
"We believe there is significant pent-up demand for furniture and bedding," Haffner said, noting that severe winter weather, worries about the war and weak economic fundamentals have kept consumers out of furniture stores for months.
Wright told analysts he isn't looking for much improvement in the second quarter, but he believes there will be an uptick in both bedding and furniture in the third and fourth quarters.
He said Leggett's total sales, not including acquisitions, will decline 1% to 6% in the second quarter, but said sales growth for the year could reach 4% if the second-half pickup does materialize.
| Legget & Platt | |||
|---|---|---|---|
| Owns Fashion Bed Group (Berkshire, Dresher and J/B Ross), Harris-Hub, Duro-Metal, Bedline and L&P Consumer Products Division | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 3/31 | 2003 | 2002 | Change |
| Sales | $1,037,600,000 | $1,022,700,000 | 1.5% |
| Operating income | 84,100,000 | 101,500,000 | (17.1%) |
| Net income | 49,400,000 | 56,200,000 | (12.1%) |
| Earnings per share | 0.25 | 0.28 | (10.7%) |
