CARTHAGE, Mo.-Net income for Leggett & Platt in its first quarter finished at $45 million, relatively flat with the bottom line from last year’s first quarter.
As explained by David Haffner, the company’s president and CEO, rising raw materials costs negated a healthy gain in net sales for the first quarter. Leggett & Platt’s gross margin lost 130 basis points to 19 percent. Net sales rose 10 percent to $895.8 million, with much of the gain coming from an increase of 28 percent in sales of specialized products and a 19 percent pickup in sales of industrial materials.
Selling, general and administrative expenses fell 4 percent on a dollar basis. As a percentage of sales, SG&A dropped 62 basis points to 10.7 percent.
Haffner said Leggett & Platt instituted price increases in the first quarter, which he hoped will improve margins in the quarters to come. He said the company is in step three of its three-part strategic plan begun three years ago. In steps one and two, Leggett & Platt divested underperforming businesses and made progress in improving margins and returns. “The third step envisions growth of 4 to 5 percent per year, on average,” he said.