Leggett & Platt Inc. (LEG, Financial) filed Quarterly Report for the period ended 2009-09-30.
Leggett & Platt Inc. is one of the leading manufacturers of engineered products serving several major markets. Sales and production are focused on residential furnishings commercial furnishings aluminum products industrial materials and specialized products. The company has facilities throughout North America and in numerous international locations. (Company Press Release) Leggett & Platt Inc. has a market cap of $3.01 billion; its shares were traded at around $19.29 with a P/E ratio of 32.8 and P/S ratio of 0.7. The dividend yield of Leggett & Platt Inc. stocks is 5.4%. Leggett & Platt Inc. had an annual average earning growth of 0.3% over the past 10 years.
Late in the second quarter of 2009, the Company learned that the aluminum operations divested in July 2008 needed a capital infusion due to deterioration in business conditions and determined that the collectability of the promissory note was not reasonably assured. The write-down of the note resulted in a $10.6 million non-cash reduction in EBIT ($.04 per share after tax) for the second quarter reported in Other expense (income), net on the Consolidated Condensed Statements of Operations, and generated a $6.4 million cash flow benefit in the last half of this year due to lower taxes. On June 30, 2009, the Company surrendered the promissory note, and in exchange, received $15 million face amount (fair value of $3.5 million) of redeemable preferred stock in the divested operations. Management believes it was in the best interest of the Company to accept the preferred stock in exchange for the promissory note due to the higher likelihood of recovery resulting from the modification to the buyers capital structure.
All of our segments use the first-in, first-out (FIFO) method for valuing inventory. In our consolidated financials, an adjustment is made at the corporate level (i.e. outside the segments) to convert about 60% of our inventories to the last-in, first-out (LIFO) method. Steel cost decreases contribute to an anticipated full year LIFO benefit of $69 million (for continuing operations). Of this annual benefit, $16.0 million was recognized in the third quarter of 2009 (versus LIFO expense of $19.7 million in the third quarter of 2008). A LIFO benefit of $52.0 million was recognized in the nine months ended September 30, 2009 (versus LIFO expense of $34.8 million in the nine months ending September 30, 2008). Our LIFO estimate for the full year incorporates certain assumptions about year-end steel prices and inventory levels (both are very difficult to accurately predict). Therefore, LIFO benefit for the full year could be significantly different from that currently estimated. Any further change in the annual estimate of LIFO benefit will be reflected in the fourth quarter. See Note 6 of the Notes to Consolidated Condensed Financial Statements for further discussion of inventories.
A summary of the segment results (in millions) from continuing operations for the quarters ended September 30, 2009 and September 30, 2008 are shown in the following tables. To comply with FASB guidance for presentation of noncontrolling interest discussed in New Accounting Guidance on page 32, EBIT (earnings before interest and income taxes) amounts for 2008 have been retrospectively adjusted to include noncontrolling interest. (Commercial Fixturing & Components EBIT from $9.2 million to $9.3 million; Specialized Products EBIT from $10.8 million to $11.8 million).
Earnings (losses) from discontinued operations are presented net of tax on the Consolidated Condensed Statements of Operations. Losses from discontinued operations in the third quarter of 2009 were $.5 million, compared to losses from discontinued operations of $15.7 million in the third quarter of 2008. The 2008 amount included $21.6 million ($25.6 million pre-tax) related to goodwill and asset impairments, partially offset by a $7.4 million gain after taxes from the completion of four targeted divestitures (Aluminum Products, Wood Products, Plastics and the dealer portion of Commercial Vehicle Products).
A summary of the segment results (in millions) from continuing operations for the nine months ended September 30, 2009 and September 30, 2008 are shown in the following tables. To comply with FASB guidance for presentation of noncontrolling interest discussed in New Accounting Guidance on page 32, EBIT amounts for 2008 have been retrospectively adjusted to include noncontrolling interest. (Commercial Fixturing & Components EBIT from $25.5 million to $26.0 million; Specialized Products EBIT from $39.1 million to $42.6 million).
Read the The complete ReportLEG is in the portfolios of Arnold Van Den Berg of Century Management, John Keeley of Keeley Fund Management, Richard Aster Jr of Meridian Fund.
Leggett & Platt Inc. is one of the leading manufacturers of engineered products serving several major markets. Sales and production are focused on residential furnishings commercial furnishings aluminum products industrial materials and specialized products. The company has facilities throughout North America and in numerous international locations. (Company Press Release) Leggett & Platt Inc. has a market cap of $3.01 billion; its shares were traded at around $19.29 with a P/E ratio of 32.8 and P/S ratio of 0.7. The dividend yield of Leggett & Platt Inc. stocks is 5.4%. Leggett & Platt Inc. had an annual average earning growth of 0.3% over the past 10 years.
Highlight of Business Operations:
Exit activities associated with the 2007 Strategic Plan discussed in Note 3 of the Notes to Consolidated Condensed Financial Statements were substantially complete by the end of 2008. We incurred $1 million and $41 million of restructuring-related and asset impairment costs related to this plan in the first nine months of 2009 and 2008, respectively. To date, we have incurred total costs associated with this plan of $341 million ($154 million in continuing operations and $187 million in discontinued operations) and do not anticipate additional significant charges. Other asset impairments and restructuring-related charges incurred outside of the strategic plan for the third quarters of 2009 and 2008 were not significant. For more information about restructuring, see Note 4 of the Notes to Consolidated Condensed Financial Statements.Late in the second quarter of 2009, the Company learned that the aluminum operations divested in July 2008 needed a capital infusion due to deterioration in business conditions and determined that the collectability of the promissory note was not reasonably assured. The write-down of the note resulted in a $10.6 million non-cash reduction in EBIT ($.04 per share after tax) for the second quarter reported in Other expense (income), net on the Consolidated Condensed Statements of Operations, and generated a $6.4 million cash flow benefit in the last half of this year due to lower taxes. On June 30, 2009, the Company surrendered the promissory note, and in exchange, received $15 million face amount (fair value of $3.5 million) of redeemable preferred stock in the divested operations. Management believes it was in the best interest of the Company to accept the preferred stock in exchange for the promissory note due to the higher likelihood of recovery resulting from the modification to the buyers capital structure.
All of our segments use the first-in, first-out (FIFO) method for valuing inventory. In our consolidated financials, an adjustment is made at the corporate level (i.e. outside the segments) to convert about 60% of our inventories to the last-in, first-out (LIFO) method. Steel cost decreases contribute to an anticipated full year LIFO benefit of $69 million (for continuing operations). Of this annual benefit, $16.0 million was recognized in the third quarter of 2009 (versus LIFO expense of $19.7 million in the third quarter of 2008). A LIFO benefit of $52.0 million was recognized in the nine months ended September 30, 2009 (versus LIFO expense of $34.8 million in the nine months ending September 30, 2008). Our LIFO estimate for the full year incorporates certain assumptions about year-end steel prices and inventory levels (both are very difficult to accurately predict). Therefore, LIFO benefit for the full year could be significantly different from that currently estimated. Any further change in the annual estimate of LIFO benefit will be reflected in the fourth quarter. See Note 6 of the Notes to Consolidated Condensed Financial Statements for further discussion of inventories.
A summary of the segment results (in millions) from continuing operations for the quarters ended September 30, 2009 and September 30, 2008 are shown in the following tables. To comply with FASB guidance for presentation of noncontrolling interest discussed in New Accounting Guidance on page 32, EBIT (earnings before interest and income taxes) amounts for 2008 have been retrospectively adjusted to include noncontrolling interest. (Commercial Fixturing & Components EBIT from $9.2 million to $9.3 million; Specialized Products EBIT from $10.8 million to $11.8 million).
Earnings (losses) from discontinued operations are presented net of tax on the Consolidated Condensed Statements of Operations. Losses from discontinued operations in the third quarter of 2009 were $.5 million, compared to losses from discontinued operations of $15.7 million in the third quarter of 2008. The 2008 amount included $21.6 million ($25.6 million pre-tax) related to goodwill and asset impairments, partially offset by a $7.4 million gain after taxes from the completion of four targeted divestitures (Aluminum Products, Wood Products, Plastics and the dealer portion of Commercial Vehicle Products).
A summary of the segment results (in millions) from continuing operations for the nine months ended September 30, 2009 and September 30, 2008 are shown in the following tables. To comply with FASB guidance for presentation of noncontrolling interest discussed in New Accounting Guidance on page 32, EBIT amounts for 2008 have been retrospectively adjusted to include noncontrolling interest. (Commercial Fixturing & Components EBIT from $25.5 million to $26.0 million; Specialized Products EBIT from $39.1 million to $42.6 million).
Read the The complete ReportLEG is in the portfolios of Arnold Van Den Berg of Century Management, John Keeley of Keeley Fund Management, Richard Aster Jr of Meridian Fund.
