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 September 30, 1998
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
September 30, 1998 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 November 1, 1998: 196,825,010
<PAGE>
PART I. FINANCIAL INFORMATION
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
(Amounts in millions) September 30, December 31,
1998 1997
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 42.3 $ 7.7
Accounts and notes receivable 577.1 450.1
Allowance for doubtful accounts (15.5) (11.5)
Inventories 471.0 433.2
Other current assets 63.7 65.1
- -----------------------------------------------------------------------------
Total current assets 1,138.6 944.6
PROPERTY, PLANT & EQUIPMENT, NET 803.8 693.2
OTHER ASSETS
Excess cost of purchased companies over
net assets acquired, less accumulated
amortization of $47.4 in 1998
and $38.2 in 1997 456.6 394.0
Other intangibles, less accumulated
amortization of $29.0 in 1998
and $24.1 in 1997 31.6 31.6
Sundry 52.2 42.9
- -----------------------------------------------------------------------------
Total other assets 540.4 468.5
- -----------------------------------------------------------------------------
TOTAL ASSETS $ 2,482.8 $ 2,106.3
=============================================================================
CURRENT LIABILITIES
Accounts and notes payable $ 154.1 $ 128.7
Accrued expenses 171.6 166.4
Other current liabilities 65.9 77.4
- -----------------------------------------------------------------------------
Total current liabilities 391.6 372.5
LONG-TERM DEBT 585.1 466.2
OTHER LIABILITIES 47.2 40.8
DEFERRED INCOME TAXES 68.9 52.8
SHAREHOLDERS' EQUITY
Common stock 2.0 1.0
Additional contributed capital 393.6 311.9
Retained earnings 1,013.1 871.3
Accumulated other comprehensive income (17.4) (10.1)
Treasury stock (1.3) (.1)
- -----------------------------------------------------------------------------
Total shareholders' equity 1,390.0 1,174.0
- -----------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,482.8 $ 2,106.3
=============================================================================
</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)
<TABLE>
<CAPTION>
(Amounts in millions, except per share data)
Nine Months Ended Three Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 2,532.7 $ 2,141.4 $ 884.1 $ 747.0
Cost of goods sold 1,882.3 1,599.3 655.3 558.5
- ----------------------------------------------------------------------------
Gross profit 650.4 542.1 228.8 188.5
Selling, distribution and
administrative expenses 313.5 262.1 109.9 91.8
Interest expense 28.7 23.3 9.9 8.0
Other deductions (income), net 10.3 10.8 4.6 4.8
- ----------------------------------------------------------------------------
Earnings before income taxes 297.9 245.9 104.4 83.9
Income taxes 111.4 92.7 39.2 31.1
- ----------------------------------------------------------------------------
NET EARNINGS $ 186.5 $ 153.2 $ 65.2 $ 52.8
============================================================================
Earnings Per Share
Basic $ .94 $ .81 $ .33 $ .27
Diluted $ .93 $ .80 $ .32 $ .27
Cash Dividends Declared
Per Share $ .235 $ .20 $ .08 $ .07
Average Shares Outstanding
Basic 197.9 189.1 198.3 192.9
Diluted 200.6 192.0 201.1 196.3
</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) Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES
Net Earnings $ 186.5 $ 153.2
Adjustments to reconcile net earnings to
net cash provided by operating activities
Depreciation 77.0 64.5
Amortization 15.4 12.0
Other 13.2 2.7
Other changes, net of effects
from purchases of companies
Increase in accounts receivable, net (87.0) (88.8)
Decrease in inventories 7.1 3.1
Increase in other current assets (3.5) (7.0)
Increase in current liabilities 15.2 70.3
- ---------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 223.9 210.0
INVESTING ACTIVITIES
Additions to property, plant and equipment (102.1) (86.7)
Purchases of companies, net of cash acquired (89.9) (149.1)
Other .1 4.6
- ---------------------------------------------------------------------------
NET CASH USED FOR INVESTING ACTIVITIES (191.9) (231.2)
FINANCING ACTIVITIES
Additions to debt 262.7 208.6
Payments on debt (193.3) (134.7)
Dividends paid (59.9) (48.6)
Other (6.9) 1.7
- ---------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2.6 27.0
- ---------------------------------------------------------------------------
INCREASE IN CASH AND CASH EQUIVALENTS 34.6 5.8
CASH AND CASH EQUIVALENTS - January 1, 7.7 3.7
- ---------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS - September 30, $ 42.3 $ 9.5
===========================================================================
</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").
2. STOCK SPLIT
On May 13, 1998, the Board of Directors of the Company declared a two-for-one
stock split in the form of a stock dividend for shareholders of record on May
29, 1998. The shares were distributed to shareholders on June 15, 1998. All
references to share and per share amounts in the accompanying financial
statements have been restated to reflect the split.
3. INVENTORIES
Inventories, using principally the Last-In, First-Out (LIFO) cost method,
comprised the following:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
At First-In, First-Out (FIFO) cost
Finished goods $ 234.0 $ 228.0
Work in process 60.7 50.3
Raw materials 186.5 170.0
- ---------------------------------------------------------------------------
481.2 448.3
Excess of FIFO cost over LIFO cost 10.2 15.1
- ---------------------------------------------------------------------------
$ 471.0 $ 433.2
===========================================================================
</TABLE>
4. PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment comprised the following:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
Property, plant and equipment, at cost $ 1,394.3 $ 1,212.3
Less accumulated depreciation 590.5 519.1
- ---------------------------------------------------------------------------
$ 803.8 $ 693.2
===========================================================================
</TABLE>
5. COMPREHENSIVE INCOME
In accordance with the provisions of Financial Accounting Standard No. 130,
the Company has elected to report comprehensive income in its Statement of
Changes in Shareholders' Equity. For the nine months ending September 30, 1998
and 1997, comprehensive income was $179.2 and $153.4, respectively.
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS-CONTINUED
(Unaudited)
6. EARNINGS PER SHARE
Basic and diluted earnings per share were calculated as follows:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Basic
Weighted average shares
outstanding, including
shares issuable for
little or no cash 197.9 189.1 198.3 192.9
============================================================================
Net earnings $ 186.5 $ 153.2 $ 65.2 $ 52.8
============================================================================
Earnings per share - basic $ .94 $ .81 $ .33 $ .27
============================================================================
Diluted
Weighted average shares
outstanding, including
shares issuable for
little or no cash 197.9 189.1 198.3 192.9
Additional dilutive shares
principally from the
assumed exercise of
outstanding stock options 2.7 2.9 2.8 3.4
- ----------------------------------------------------------------------------
200.6 192.0 201.1 196.3
============================================================================
Net earnings $ 186.5 $ 153.2 $ 65.2 $ 52.8
============================================================================
Earnings per share - diluted $ .93 $ .80 $ .32 $ .27
============================================================================
</TABLE>
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS-CONTINUED
(Unaudited)
7. CONTINGENCIES
The Company is involved in various legal proceedings including matters which
involve claims against the Company under employment, intellectual property,
environmental and other laws. When it appears probable in management's
judgement that the Company will incur monetary damages or other costs in
connection with such claims and proceedings, and the costs can be reasonably
estimated, appropriate liabilities are recorded in the financial statements
and charges are made against earnings. No claim or proceeding has resulted in
a material charge against earnings, nor are the total liabilities recorded
material to the Company's financial position. While the results of any
ultimate resolution cannot be predicted, management believes the possibility
of a material adverse effect on the Company's consolidated financial position,
results of operations and cash flows from these claims and proceedings is
remote. The more significant claims and proceedings are briefly described in
the following paragraphs.
One of the Company's subsidiaries is performing an environmental investigation
at a Florida plant site pursuant to a negotiation with local and Federal
environmental authorities. The costs of the investigation and any remediation
actions will be shared equally by the Company and a former joint owner of the
plant site.
One of the Company's subsidiaries is involved in an unfair labor complaint
filed by the National Labor Relations Board prior to the Company's acquisition
of the subsidiary. An administrative decision has been rendered against the
subsidiary, which was recently upheld by the courts. The Company is currently
pursuing actions to resolve this matter.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
All share and per share amounts have been adjusted for the stock split
discussed in Item I, Note 2.
Capital Resources and Liquidity
- --------------------------------
The Company's total capitalization at September 30, 1998 and December 31, 1997
is shown in the table below. The table also shows the amount of unused
committed credit available through the Company's revolving bank credit
agreements.
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
(Dollar amounts in millions)
Long-term debt outstanding:
Scheduled maturities $ 585.1 $ 402.9
Average interest rates 6.6% 6.8%
Average maturities in years 6.1 6.3
Revolving credit/commercial paper - 63.3
--------------------------------------------------------------------------
Total long-term debt 585.1 466.2
Deferred income taxes and other liabilities 116.1 93.6
Shareholders' equity 1,390.0 1,174.0
--------------------------------------------------------------------------
Total capitalization $ 2,091.2 $ 1,733.8
==========================================================================
Unused committed credit $ 300.0 $ 240.0
</TABLE>
The Company's internal investments to modernize and expand manufacturing
capacity were $102.1 million in the first nine months of 1998. The Company
also invested $89.9 million in cash (net of cash acquired) and issued 2.9
million shares of common stock and common stock equivalents to make 15
acquisitions. Cash provided by operating activities provided the funds
required for these investments.
The Company issued $176 million in privately placed medium-term notes during
the first half of 1998. These notes have fixed interest rates averaging 6.2%
and maturities averaging just over seven years. Proceeds from the notes were
used to repay commercial paper outstanding. There was no revolving credit or
commercial paper outstanding at the end of this year's third quarter. During
the quarter, the total amount of committed credit available through the
revolving bank credit agreements was increased to $300 million, up from $240
million. The Company's senior debt rating was upgraded to single A+ from
single A by Standard & Poor's in April.
Working capital at September 30, 1998 was $747.0 million, up from $572.1
million at year-end. Total current assets increased $194.0 million, due
primarily to increases in accounts and notes receivable and inventories
attributable to increased sales and acquisitions. Cash and cash equivalents
also increased, more than offsetting a decrease in other current assets. Total
current liabilities increased $19.1 million, due primarily to an increase in
accounts and notes payable.
<PAGE>
In addition to unused committed credit, the Company has the availability of
short-term uncommitted credit from several banks. However, there was no
short-term bank debt outstanding on September 30, 1998, or at the end of 1997.
Given this strong financial position and the continuing strong coverage of
interest expense, the Company has substantial capital resources and
flexibility to provide for projected internal cash needs and additional
acquisitions consistent with management's goals and objectives.
Results of Operations
- -----------------------
The Company's continuing growth resulted in record sales and earnings for the
first nine months of 1998. Sales increased to $2.53 billion (up 18.3%) and net
earnings grew to $186.5 million (up 21.7%), both compared with the first nine
months of 1997. Earnings per diluted share increased to $.93 (up 16.3%),
also compared with the first nine months of 1997.
Results for this year's third quarter also increased to record levels. Sales
of $884.1 million were up 18.4%, net earnings of $65.2 million were up 23.5%,
and earnings per diluted share of $.32 were up 18.5%, all compared with the
third quarter of 1997.
Increased 1998 sales reflected ongoing benefits from acquisitions and internal
improvements. Acquisitions continued to account for more of the sales growth
than other factors. The balance of the sales growth primarily reflected
increased unit volumes. While internal improvements were broadly based, the
Company's aluminum operations experienced some temporary disruptions. These
disruptions primarily reflect (i) dislocations in the market for die cast
components the Company makes and sells to manufacturers of gas barbecue
grills; and (ii) the Company's reduced production and sales of aluminum ingot
due to lower market prices and reduced availability of aluminum scrap used to
make this raw material.
Net earnings have continued to increase faster than sales due to a slight
improvement in 1998 profit margins. The following table shows various measures
of earnings as a percentage of sales for the first nine months and the third
quarter in both of the last two years. It also shows the effective income tax
rate and the coverage of interest expense by pre-tax earnings plus interest
for each respective period.
<TABLE>
<CAPTION>
Nine Months Ended Quarter Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Gross profit margin 25.7% 25.3% 25.9% 25.2%
Pre-tax profit margin 11.8 11.5 11.8 11.2
Net profit margin 7.4 7.2 7.4 7.1
Effective income tax rate 37.4 37.7 37.5 37.1
Interest coverage ratio 11.4x 11.6x 11.5x 11.5x
</TABLE>
Improvements in 1998 gross profit margins reflected increased sales and
efficiencies in many operations and reduced costs for some raw materials.
These favorable factors were partially offset by higher 1998 operating expense
ratios. Thus, pre-tax and net profit margins improved slightly less than
gross profit margins. The net profit margin in the first nine months of 1998
also benefited from a slightly lower effective income tax rate. In the third
quarter, the tax rate was slightly higher in 1998.
<PAGE>
This year's growth in earnings per share has been somewhat lower than the
growth in net earnings due to the issuance of shares in the Company's
acquisition program and employee stock benefit plans. The Board of Directors
has authorized management, in its discretion, to buy shares of the Company's
stock and maintain a treasury share balance up to 500,000 shares for use in
employee benefit plans. In the past two months, approximately 280,000 shares
have been purchased on the open market for an average cost of $19.62 per
share. The authorization allows management to continue buying shares for
benefit plans, and to repurchase additional shares issued in future
acquisitions accounted for as purchases.
Consistent cash flow, a conservative capital policy and the success of
management's long-term strategy have allowed the Company to sustain a 27-year
record of increasing dividends. Dividends declared in the first three quarters
of 1998 totaled $.235 per share. Quarterly rates were increased to $.075 per
share in February and $.08 per share in May. The third quarter dividend of
$.08 per share was paid on September 15, 1998 to shareholders of record on
August 21, 1998.
Statements of Financial Accounting Standards Not Yet Adopted
- -------------------------------------------------------------
The Financial Accounting Standards Board (FASB) issued a new accounting
standard on "Accounting For Derivative Instruments and Hedging Activities"
(FASB No. 133). This new standard was issued in June 1998 and will become
effective in the Company's financial statements for the year 2000. Management
is currently analyzing the impact of the adoption of FASB No. 133, but does
not anticipate any material impact on the Company's consolidated financial
statements.
Discussion of Year 2000 Issues
- -------------------------------
The "Year 2000" issue refers to older computer programs that used only two
digits to represent the year, rather than four digits. As a result, these
older computer programs may not process information or otherwise function
properly when using the year "2000", since that year will be indistinguishable
from the year "1900". These computer programs are found in information
processing applications and in timing devices for certain machinery and
equipment.
To monitor Year 2000 issues, the Company implemented a Corporate level Year
2000 Steering Committee (the Steering Committee). The Steering Committee
meets regularly to review the Company's progress, and to consider other
actions that may be necessary for Year 2000 issues.
In addition, the Company has engaged a large, reputable consulting firm to
perform certain procedures to review the Company's planning, implementation
and readiness for the Year 2000 issues at certain major locations. The
results of the consulting firm's preliminary study have been reviewed by the
Company's Audit Committee of the Board of Directors. The Company has
responded, or is in the process of responding, to any additional issues raised
by the consulting firm's study. In early 1999, the consulting firm will
update its evaluation of the Company's readiness and response to Year 2000
issues.
The Company recognized the Year 2000 issue several years ago, and has been
working since to correct this problem in its computer systems. The majority
of the Company's information processing is centralized at its Corporate
Offices. All of these critical central systems have been converted to Year
2000 compliant software, and individual system testing is either complete or
in progress. The remaining testing will be complete by the First Quarter of
1999.
<PAGE>
Many of the Company's international and certain domestic operations do not use
some or any of the Corporate Office centralized systems. All of these non-
central system locations have active projects underway to convert their
systems to Year 2000 compliant software by no later than the Third Quarter
1999. Adequate testing of these non-central system conversions is also
expected to be completed by that date.
In total, combining both locations on central and non-central systems,
management estimates that the Year 2000 systems conversion effort is currently
over 70% complete.
All locations of the Company have been instructed to review their facilities
for Year 2000 issues. Potential internal and third-party risks were
identified for the operating locations to consider. Inventories of computer
equipment, communications with key suppliers, correspondence with customers,
obtaining machinery and equipment compliance certificates and other facility
testing related to Year 2000 issues is in various stages of completion at the
Company's approximately 300 locations around the world. These efforts are
expected to be complete at all significant locations prior to the year 2000.
Since the Company has been working on Year 2000 issues for several years, the
costs of mitigating these issues, which costs have not been material in the
past, were expensed in ongoing operations. No material costs are expected
from the remaining Year 2000 compliance efforts. It is not practical to
segregate past or anticipated capital expenditures between Year 2000
compliance and expenditures which occur normally to keep operations
technologically competitive. However, management believes that past or
expected future capital requirements related to Year 2000 compliance issues
are insignificant to its operations.
The Company manufactures a broad line of products in over 150 major
manufacturing sites around the world. Raw materials and critical outside
services are generally available from numerous supply sources including, in
some cases, the Company's own vertically integrated operations. The Company's
revenues are not dependent upon any single customer or any few customers.
Therefore, the impact to the Company of any individual operating location or
third-party risk involving Year 2000 is relatively small. It is reasonable to
assume that the Company will experience a few, hopefully isolated,
disturbances to its operations early in the year 2000. While reasonable
actions have been taken, and will continue to be taken in the future, to
mitigate such disruption, the magnitude of all Year 2000 disturbances cannot
be predicted. In addition, any widespread Year 2000 failures, particularly in
North America, in industries such as financial services, communications,
transportation and electrical or other utilities could significantly and
adversely impact the Company's operations.
The Company does not, at this time, have an overall "contingency plan" to
address Year 2000 disturbances. Efforts to date have been concentrated on
mitigating such disturbances. The Steering Committee plans in 1999 to discuss
and evaluate the reasonable potential risks, and determine the extent of
contingency planning and resources that are appropriate. Any such contingency
actions and resources would be planned to be in place in sufficient time for
the year 2000.
Forward-Looking Statements
- ----------------------------
This report and other public reports or statements made from time to time by
the Company or its management may contain "forward-looking" statements
concerning possible future events, objectives, strategies, trends or results.
Such statements are identified either by the context in which they appear or
by use of words such as "anticipate," "believe," "estimate," "expect," or the
like.
<PAGE>
Readers are cautioned that any forward-looking statement reflects only the
beliefs of the Company or its management at the time the statement is made.
In addition, readers should keep in mind that, because all forward-looking
statements deal with the future, they are subject to risks, uncertainties and
developments which might cause actual events or results to differ materially
from those envisioned or reflected in any forward-looking statement.
Moreover, the Company does not have and does not undertake any duty to update
any forward-looking statement to reflect events or circumstances after the
date on which the statement was made. For all of these reasons, forward-
looking statements should not be relied upon as a prediction of actual future
events, objectives, strategies, trends or results.
It is not possible to anticipate and list all of the risks, uncertainties and
developments which may affect the future operations or performance of the
Company, or which otherwise may cause actual events or results to differ from
forward-looking statements. However, some of these risks and uncertainties
include the following: general economic and market conditions and risks, such
as the rate of economic growth in the United States, inflation, government
regulation, interest rates, taxation, and the like; risks and uncertainties
which could affect industries or markets in which the Company participates,
such as growth rates and opportunities in those industries, or changes in
demand for certain products, etc.; and factors which could impact costs,
including but not limited to the availability and pricing of raw materials,
the availability of labor and wage rates, and fuel and energy costs. As
indicated above, the consequences of the Year 2000 issues cannot be accurately
predicted; therefore, actual consequences will remain at least to some extent
uncertain.
<PAGE>
ITEM 3. DISCLOSURES ABOUT MARKET RISK
(Unaudited)
(Amounts in millions)
INTEREST RATE SENSITIVITY
The Company has debt obligations sensitive to changes in interest rates. The
Company has no other significant financial instruments sensitive to changes in
interest rates. The Company has not in the past used any derivative financial
instruments to hedge its exposure to interest rate changes. Substantially all
of the Company's debt is denominated in United States dollars. The fair value
of variable rate debt is not significantly different from its recorded amount.
The fair value of fixed rate debt is calculated using the U.S. Treasury Bond
rate as of September 30, 1998 for similar remaining maturities, plus an
estimated "spread" over such Treasury securities representing the Company's
interest costs under its medium-term note program. The fair value of fixed
rate debt approximated $556 at September 30, 1998, as compared to $360 at
December 31, 1997.
EXCHANGE RATE SENSITIVITY
The Company has not typically hedged foreign currency exposures related to
transactions denominated in other than its functional currencies, although
such transactions have not been material in the past. The Company does hedge
firm commitments for certain machinery purchases, and occasionally may hedge
amounts due in foreign currencies related to its acquisition program. The
decision by management to hedge any such transactions is made on a case-by-case
basis. The amount of forward contracts outstanding at September 30, 1998
was not significant.
The Company views its investment in foreign subsidiaries as a long-term
commitment and does not hedge any translation exposures. The investment in a
foreign subsidiary may take the form of either permanent capital or notes.
The Company's net investment (excluding goodwill) in foreign subsidiaries
subject to translation exposure was $230 at September 30, 1998, as compared to
$182 at December 31, 1997.
COMMODITY PRICE SENSITIVITY
The Company does not use derivative commodity instruments to hedge its
exposures to changes in commodity prices. The principal commodity price
exposure is aluminum, of which the Company had an estimated $44 (at cost) in
inventory at September 30, 1998. The Company has purchasing procedures and
arrangements with customers to mitigate its exposure to aluminum price
changes. No other commodity exposures are significant to the Company.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibit 27 - Financial Data Schedule
(B) 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: November 12, 1998 By: /s/ HARRY M. CORNELL, JR.
Harry M. Cornell, Jr.
Chairman of the Board
and Chief Executive Officer
DATE: November 12, 1998 By: /s/ MICHAEL A. GLAUBER
Michael A. Glauber
Senior Vice President,
Finance and Administration
<PAGE>
EXHIBIT INDEX
Exhibit Page
27 Financial Data Schedule 17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 42300
<SECURITIES> 0
<RECEIVABLES> 577100
<ALLOWANCES> 15500
<INVENTORY> 471000
<CURRENT-ASSETS> 1138600
<PP&E> 1394300
<DEPRECIATION> 590500
<TOTAL-ASSETS> 2482800
<CURRENT-LIABILITIES> 391600
<BONDS> 585100
0
0
<COMMON> 2000
<OTHER-SE> 1388000
<TOTAL-LIABILITY-AND-EQUITY> 2482800
<SALES> 2532700
<TOTAL-REVENUES> 2532700
<CGS> 1882300
<TOTAL-COSTS> 1882300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28700
<INCOME-PRETAX> 297900
<INCOME-TAX> 111400
<INCOME-CONTINUING> 186500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 186500
<EPS-PRIMARY> .94
<EPS-DILUTED> .93
</TABLE>
