Previous Statements by LEG
» Leggett & Platt Q1 2010 Earnings Conference Call
» Leggett & Platt Inc. Q4 2009 Earnings Call Transcript
» Leggett & Platt Inc. Q3 2009 Earnings Call Transcript
I need to remind you that remarks today concerning future expectations, events, objectives, strategies, trends or results constitute forward-looking statements. Actual results or events may differ materially due to a number of risks and uncertainties, and the company undertakes no obligation to update or revise these statements. For a summary of these risk factors and additional information, please refer to yesterday's press release and the section in our 10-K entitled Forward-Looking Statements.I'll now turn the call over to Dave Haffner. Dav e Haffner Good morning, and thank you for participating in our call. We are very pleased with the second quarter results we reported yesterday. For the quarter, sales from continuing operations increased 15% over the prior year. Unit volumes grew approximately 14% during the quarter, reflecting improved demand and market share gains in certain businesses. Sales also increased slightly during the quarter as a result of price increases implemented to recover higher steel cost. Second quarter 2010 earnings from continuing operations improved significantly to $0.34 per share. In the second quarter of 2009, earnings from continuing operations were $0.12 per share and included a $0.04 per share charge related to the write-down of a divestiture note. The year-over-year earnings increased primarily reflects higher sales and the associated improvement in capacity utilization. We've continued to keep a tight hold on fixed cost as sales have increased. As anticipated, the incremental unit volume we realized in the second quarter generated contribution margins in line with our approximate 30% expectation. This further reinforces our confidence in the company's earnings potential as markets rebound in the future. The company's primary financial objective is to consistently achieve total shareholder return within the top one third of the S&P 500. From the first of January of 2008 through the 21 st of July, 2010, we posted TSR of 36% which ranks in the top 5% of the S&P 500. We continued to be very comfortable with our strong financial profile. We ended the quarter with net debt at 27.3% of net capital, which is below our long-term targeted range of 30% to 40%. We currently have approximately $350 million available and nearly two years remaining on our $600 million bank facility. And we have no significant fixed-term debt maturities until 2013. Our cash balance at the end of the second quarter was $244 million. We generated $67 million of cash from operations during the quarter. Working capital remains at a favorable 14% of sales and reflects our ongoing focus on optimizing returns.
We purchased approximately 2.3 million shares of our stock during the quarter at an average price of $23.17 per share. We also declared a second quarter dividend of $0.26 per share. At yesterday's closing price of $21.32, the current dividend yield is 4.9%. The dividend remains a key component in achieving our TSR goal.As has consistently been the case for many years, we expect operating cash in 2010 to comfortably exceed the amount required to fund dividends and capital expenditures. For the full year, we expect operating cash to exceed $300 million. Capital expenditures for the year should approximate $75 million and dividends will require about $155 million. With those comments, I'll turn the call over to Karl who will provide some operating highlights. Karl? Karl Glassman Thank you, Dave. Good morning. I'd like to quickly discuss a few major topics. You will find segment details in yesterday's press release and in the slide presentation on our website that David DeSonier mentioned earlier. Second quarter sales increased 9% in our Residential Furnishing segment, reflecting unit volume growth in several key businesses. In our U.S. Spring business, Innerspring unit volumes increase approximately 5% from the second quarter as a result of improved market demand. Box spring units grew approximately 10% during the quarter reflecting improved demand and market share gains. Unit volumes in our Furniture Component business increased significantly in the second quarter due to market share gains and ongoing market strength in motion upholstery. Read the rest of this transcript for free on seekingalpha.com