Unit volumes were flat to positive across the majority of the company and the strongest growth continuing -- with the strongest growth continuing to come from our automotive and adjustable bed businesses. EBIT increased and EBIT margins improved both year-over-year and sequentially to 9.2% during the quarter. Earnings are benefiting, as expected, from higher unit volumes and the cost savings associated with the restructuring activities we initiated in late 2011. In addition, the Western Pneumatic Tube acquisition that we completed in January is exceeding our expectation for strong operating performance. We are very pleased with the return we're generating on this investment.
Reflecting our broad focus on returns, we ended the quarter with working capital at 12% of annualized sales. Current liabilities include $41 million associated with an interest rate swap that we entered in 2010. Excluding this item, working capital was 13.1% of annualized sales, well below our 15% target. Cash from operations was strong during the quarter at $81 million. We expect operating cash for the full year of approximately $350 million, which had once again comfortably exceed the amount required to fund capital expenditures and dividends.
Capital expenditures should be approximately $90 million this year and dividends should require about $160 million. We continue to maintain our strong financial base and ended the second quarter with net debt at 33% of net capital, which is within our long-term target range of 30% to 40%.
In May, we declared a quarterly dividend of $0.28 per share. 2012 marks the 41st consecutive annual dividend increase for the company, a record we plan to extend. At yesterday's closing price of $22.49, the current dividend yield is 5%. Leggett possesses the highest dividend yield among all of the S&P 500 dividend aristocrats that have over 30 consecutive annual dividend increases.Given the cash outlay earlier in the year to acquire Western Pneumatic Tube, we did not complete any open market purchases of our stock during the second quarter. However, consistent with our stated priorities for the use of excess cash flow, we expect eventually to resume buying back our stock subject to the outlook for the economy, our level of cash generation and other potential opportunities to strategically grow the company. Read the rest of this transcript for free on seekingalpha.com
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV