Leggett & Platt quarterly sales fall 29%

Carthage-based Leggett & Platt posted $757 million in sales during the second quarter, a 29 percent decline from the same quarter last year, which company officials attribute to weak demand.

The diversified manufacturer had net earnings of $19.2 million for the quarter, compared to $48 million a year ago, according to the company's earnings release Thursday. Earnings per share were 12 cents, compared to 25 cents in second-quarter 2008.

Aside from lower sales, earnings were negatively affected during the quarter when Leggett learned that the aluminum division it divested last year needed a capital infusion from the buyer because of deteriorating business conditions. This led to an $11 million, or 4 cents per share, noncash write-down of the note Leggett received for the sale, but should result in a $6.4 million cash flow benefit later this year from a reduction in taxes, according to the release.

Cash flow from operations was $174 million during the quarter and $288 million for the first six months of the year, which will cover the entire year's dividends, which are about $155 million, and capital expenditures, which are about $100 million. Leggett officials said they intend to use the excess of cash flow to continue repurchasing stock as part of its plan to buy 4 million shares in 2009.

Net debt declined to 24 percent of net capital for the quarter, compared to 32 percent a year ago.

"Weak demand continues across our markets, and shows few signs of imminent improvement," President and CEO David S. Haffner said in the release. "Even so, we are extremely well positioned, from both balance sheet and cost structure perspectives, to ride out the demand downturn."

Leggett officials expect the year to bring an approximately 25 percent decline in sales, but gross margin should approach 20 percent, according to the release. The company's earning guidance for 2009 is between 55 cents per share and 70 cents per share.

Shares (NYSE: LEG) closed Thursday at $16.50 and were trading down at $15.80 at 9:45 this morning. The 52-week range is $10.03 to $24.60.