Leggett & Platt’s profits decline

Despite higher first-quarter sales, Leggett & Platt Inc. (NYSE: LEG) reported a drop in net income.

Earnings were $61.2 million, a 21% decrease compared with $77.9 million in first-quarter 2018. Diluted share earnings fell to 45 cents from 57 cents a year earlier, according to a news release.

Leggett & Platt CEO Karl Glassman said first-quarter sales growth of 12% — to $1.2 billion — was largely the result of the company closing on its $1.3 billion purchase of Newnan, Georgia-based Elite Comfort Solutions Inc. in January. He also cited spring- and steel-related business growth, before tempering the top-line revenue.

“These improvements were more than offset by our decision to exit the fashion bed business, exchange rate impact and softer demand in automotive, and volume we chose to exit in our home furniture business,” Glassman said in the release, referring to a restructuring plan set in motion late last year.

“As anticipated, earnings in the first quarter included a nonrecurring purchase accounting charge related to acquired inventories of $5 million,” he added.

First-quarter financial notes:
• The company issued $500 million in notes after borrowing the same amount for the ECS acquisition.
• The board set a 38-cent first-quarter dividend, marking the 48th consecutive annual increase.
• Residential products, the company’s best-performing unit, boosted sales by nearly 34% to $539.2 million.

Leggett & Platt kept its 2019 projections unchanged, estimating sales of $4.95 billion-$5.1 billion for the year, according to the release.

As of March 31, the company’s assets were roughly $5 billion. The Carthage-based manufacturer of engineered components and products for homes, offices and vehicles employed 23,000 people in 18 countries at the end of the quarter.

LEG shares were trading at $39.96 as of 8:56 a.m., compared with a 52-week range of $33.48 to $46.71.