CARTHAGE, Mo.-A one-time charge of $108 million put Leggett & Platt’s second-quarter bottom line in the red to the tune of $23.9 million. Last year, the company posted second-quarter net income of $71.3 million.
The company recorded the pre-tax, non-cash impairment charge to write off all of the goodwill associated with its Store Fixtures group. David S. Haffner, Leggett & Platt’s chairman and CEO, said the demand outlook for this group and its Commercial Vehicle Products units has been weak. “We have engaged an investment banker and are exploring strategic alternatives for (the Store Fixtures group), including possible divestiture,” Haffner said.
Net sales in the quarter, which ended on June 30, rose 4.5 percent to $1 billion. Leggett & Platt reported strong volume gains in most of its residential categories, along with the office furniture and automotive segments. The large sales dropoffs in Store Fixtures and Commercial Vehicle Products offset these gains.
Second-quarter gross margin fell 28 basis points to 20.5 percent. Selling, general and administrative expenses were up 1 percent in dollars but down 34 basis points as a percentage of sales, to 10 percent.
Looking ahead, Haffner said Leggett & Platt is “encouraged” by the forward momentum in its automotive, aerospace, bedding, home furniture and office furniture businesses. “Given anticipated sales growth, in 2014 we expect another year of record adjusted earnings from continuing operations,” he said.