Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
For Quarter Ended Commission File Number
March 31, 1995 1-7845
------------------- ------------------------
LEGGETT & PLATT, INCORPORATED
(Exact name of registrant as specified in its charter)
Missouri 44-0324630
- ------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
No. 1 Leggett Road
Carthage, Missouri 64836
-------------------- --------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (417) 358-8131
---------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
Common stock outstanding as of May 1, 1995: 41,831,070
<PAGE>
PART I. FINANCIAL INFORMATION
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
ITEM I. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(Amounts in millions)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ -----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3.1 $ 2.7
Accounts and notes receivable 283.2 261.8
Allowance for doubtful accounts (8.9) (7.5)
Inventories 277.9 255.5
Other current assets 34.1 32.2
---------- ----------
Total current assets 589.4 544.7
PROPERTY, PLANT & EQUIPMENT, NET 410.9 396.0
OTHER ASSETS
Excess cost of purchased companies over
net assets acquired, less accumulated
amortization of $15.2 in 1995
and $14.4 in 1994 114.3 115.1
Other intangibles, less accumulated
amortization of $13.6 in 1995
and $12.5 in 1994 26.2 27.4
Sundry 35.8 36.7
---------- ----------
Total other assets 176.3 179.2
---------- ----------
TOTAL ASSETS $ 1,176.6 $ 1,119.9
========== ==========
CURRENT LIABILITIES
Accounts and notes payable $ 100.9 $ 89.9
Accrued expenses 119.7 106.0
Other current liabilities 35.5 37.0
---------- ----------
Total current liabilities 256.1 232.9
LONG-TERM DEBT 206.7 204.9
OTHER LIABILITIES 16.5 14.7
DEFERRED INCOME TAXES 43.7 42.2
SHAREHOLDERS' EQUITY
Common stock .4 .4
Additional contributed capital 137.7 134.7
Retained earnings 522.0 496.5
Cumulative translation adjustment (6.1) (6.1)
Less treasury stock (0.4) (0.3)
---------- ----------
Total shareholders' equity 653.6 625.2
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,176.6 $ 1,119.9
========== ==========
</TABLE>
Items excluded are either not applicable or de minimis in amount and,
therefore, are not shown separately.
See accompanying notes to consolidated condensed financial statements.
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in millions, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1995 1994
---------- ----------
<S> <C> <C>
Net sales $ 523.1 $ 434.6
Cost of goods sold 401.2 336.0
--------- ---------
Gross profit 121.9 98.6
Selling, distribution and
administrative expenses 63.5 52.7
Interest expense 3.0 1.9
Other deductions, net 1.2 1.2
--------- ---------
Earnings before income taxes 54.2 42.8
Income taxes 21.3 16.8
--------- ---------
NET EARNINGS $ 32.9 $ 26.0
========= =========
Earnings Per Share (Exhibit 11) $ 0.78 $ 0.63
Cash Dividends Declared Per Share $ 0.18 $ 0.15
Average Common and Common
Equivalent Shares Outstanding 42.2 41.4
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in millions) Three Months Ended
March 31,
----------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net Earnings $ 32.9 $ 26.0
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation 14.3 11.0
Amortization 2.1 1.9
Deferred income tax benefit (1.6) (0.1)
Other 1.0 0.7
Other changes, net of effects from
purchases of companies
Increase in accounts receivable, net (20.8) (29.3)
Increase in inventories (20.3) (1.4)
Increase in other current assets (1.8) (2.9)
Increase in current liabilities 28.7 27.8
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 34.5 33.7
INVESTING ACTIVITIES
Additions to property, plant and equipment (26.5) (13.9)
Purchases of companies, net of cash acquired (1.6) -
Other 1.0 0.2
------- -------
NET CASH USED FOR INVESTING ACTIVITIES (27.1) (13.7)
FINANCING ACTIVITIES
Additions to debt 10.2 0.1
Payments on debt (8.9) (12.9)
Dividends paid (7.5) (6.1)
Other (0.8) (0.7)
------- -------
NET CASH USED FOR FINANCING ACTIVITIES (7.0) (19.6)
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS 0.4 0.4
CASH AND CASH EQUIVALENTS - January 1, 2.7 0.4
------- -------
CASH AND CASH EQUIVALENTS - March 31, $ 3.1 $ 0.8
======= =======
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Amounts in millions)
1. STATEMENT
In the opinion of management, the accompanying consolidated condensed
financial statements contain all adjustments necessary for a fair
statement of results of operations and financial position of Leggett &
Platt, Incorporated and Consolidated Subsidiaries (the "Company"). The
consolidated condensed financial statements include accounts of the
Company and its majority-owned subsidiaries.
2. INVENTORIES
Inventories using principally the Last-In, First-Out (LIFO) cost method
comprised the following:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
At First-In, First-Out (FIFO) cost
Finished goods $ 143.4 $ 134.5
Work in process 34.8 32.1
Raw materials 121.2 103.1
-------- --------
299.4 269.7
Excess of FIFO cost over LIFO cost 21.5 14.2
-------- --------
$ 277.9 $ 255.5
======== ========
</TABLE>
3. PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment comprised the following:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Property, plant and equipment, at cost $ 726.8 $ 699.5
Less accumulated depreciation 315.9 303.5
-------- --------
$ 410.9 $ 396.0
======== ========
</TABLE>
4. LOAN AGREEMENTS
In connection with various notes payable, the related loan agreements,
among other restrictions, limit the amount of additional debt, require
working capital to be maintained at specified amounts, and restrict
payment of dividends. Unrestricted retained earnings available for
dividends at March 31, 1995 were approximately $186.5.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Capital Resources and Liquidity
- --------------------------------
The Company's capitalization at March 31, 1995 and December 31, 1994 is
shown in millions of dollars in the table below. The amount of additional
capital available through the Company's revolving bank credit agreements
and commercial paper program is also shown, along with the amount of cash
and cash equivalents.
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Long-term debt outstanding:
Scheduled maturities $ 146.9 $ 146.6
Revolving credit/commercial paper 59.8 58.3
------- -------
Total long-term debt 206.7 204.9
Shareholders' equity 653.6 625.2
Unused committed credit 165.2 156.7
Cash and cash equivalents 3.1 2.7
</TABLE>
In the first quarter of 1995, capital investments to modernize and expand
capacity internally were $26.5 million. The Company also purchased
certain assets of one small business for $1.6 million, net of cash
acquired. Total long-term debt at March 31, 1995 increased only slightly
from the end of 1994 as funds for these investments were largely provided
by first quarter operating activities.
Working capital at quarter-end was $333.3 million, up from $311.8 million
at the end of 1994. Total current assets increased $44.7 million, due
primarily to increases in trade accounts and notes receivable and
inventories. Total current liabilities increased $23.2 million. These
increases primarily reflected higher sales and production volumes during
the first three months of 1995 as well as normal recurring liabilities
with funding requirements later in the year. There was no short-term debt
outstanding at the end of the quarter or at year end.
Results of Operations
- ----------------------
The Company had record first quarter sales and earnings in 1995. Sales
were $523.1 million (up 20%) and earnings were $.78 per share (up 24%) ---
both compared with the first quarter of 1994.
The Company's first quarter sales reflected a continuing benefit from
acquisitions and internal growth. In line with management's previous
expectations, the Company's sales growth rate has recently begun to
moderate as overall economic activity has begun to soften. Excluding
acquisitions, sales increased 6% in the first quarter.
<PAGE>
The Company's earnings growth continued to exceed sales growth as year-
to-year comparisons of net profit margins remained favorable. In the
first quarter of 1995 and the last three quarters of 1994, net profit
margins were 6.3% of sales. This compares with a net profit margin of 6.0%
in the first quarter of 1994.
The following table shows various measures of earnings, as a percentage of
sales, in the first quarters of 1995 and 1994. It also shows the Company's
effective income tax rate in each respective period.
<TABLE>
<CAPTION>
Quarter Ended
March 31,
1995 1994
------ ------
<S> <C> <C>
Gross profit margin 23.3% 22.7%
Pre-tax profit margin 10.4 9.8
Net profit margin 6.3 6.0
Effective income tax rate 39.3 39.3
</TABLE>
The increase in the 1995 net profit margin primarily reflected an
improvement in the gross profit margin. Although the Company experienced
increasing prices for raw materials, these increased costs were
approximately offset by modest selling price increases, some of which
became effective near the end of 1994. In addition, the improvement in
the gross profit margin continued to reflect efficiencies gained on
increased sales and production. For the full year in 1994, the gross
profit margin was 23.1% of sales.
An increase in interest expense for the first quarter of 1995 compared
to 1994 primarily reflected increased borrowings for acquisitions, most of
which were completed during the second and third quarters of 1994. The
effective income tax rate was constant quarter to quarter.
With continuing earnings growth and a strong financial position, the Board
of Directors in February 1995 increased the first quarter cash dividend on
the Company's common stock to $.18 per share, up 20% over the first quarter
dividend of $.15 per share in 1994.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibit 11 - Computations of Earnings Per Share
(B) Exhibit 27 - Financial Data Schedule
(C) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEGGETT & PLATT, INCORPORATED
DATE: May 11, 1995 By: /s/ HARRY M. CORNELL
------------------------
Harry M. Cornell, Jr.
Chairman of the Board
and Chief Executive Officer
DATE: May 11, 1995 By: /s/ MICHAEL A. GLAUBER
------------------------
Michael A. Glauber
Senior Vice President,
Finance and Administration
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
11 Computations of Earnings Per Share 11
27 Financial Data Schedule 12
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES Exhibit 11
COMPUTATIONS OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
(Amounts in millions, except
per share data)
Three Months Ended
March 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
EARNINGS PER SHARE
Weighted average number of
common shares outstanding 41.6 40.7
Dilution from outstanding stock
options-computed using the
"treasury stock" method 0.6 0.7
------ ------
Weighted average number of
common shares outstanding
as adjusted 42.2 41.4
====== ======
Net Earnings $ 32.9 $ 26.0
====== ======
Earnings Per Share $ 0.78 $ 0.63
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 3100
<SECURITIES> 0
<RECEIVABLES> 283200
<ALLOWANCES> 8900
<INVENTORY> 277900
<CURRENT-ASSETS> 589400
<PP&E> 726800
<DEPRECIATION> 315900
<TOTAL-ASSETS> 1176600
<CURRENT-LIABILITIES> 256100
<BONDS> 206700
<COMMON> 400
0
0
<OTHER-SE> 653200
<TOTAL-LIABILITY-AND-EQUITY> 1176600
<SALES> 523100
<TOTAL-REVENUES> 523100
<CGS> 401200
<TOTAL-COSTS> 401200
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3000
<INCOME-PRETAX> 54200
<INCOME-TAX> 21300
<INCOME-CONTINUING> 32900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32900
<EPS-PRIMARY> 0.78
<EPS-DILUTED> 0
</TABLE>
