Leggett's bottom line continues with its impressive performance in
the final quarter of 2014 as well on the back of enhanced sales and
lower LIFO expenses. Further, the company hopes to generate greater
sales, achieve higher operating margin and deliver record earnings
in 2015. We commend Leggett's consistent endeavors to keep itself
on the growth trajectory through acquisitions that would augment
its top-line performance over the long term. We are also impressed
with the company's strong financial base that enables it to
undertake profitable ventures and return value to shareholders.
Further, the company's sustained focus on launching new products
and divesting non-performing businesses bode well for its growth.
Therefore, we retain our long-term Outperform recommendation on the
Headquartered in Carthage, MO, Leggett and Platt Inc. is a
global manufacturer that conceives, designs, and produces a wide
variety of engineered components and products found in many homes,
offices, retail stores, and automobiles. The company's most
important product lines include components for residential
furniture and bedding, retail store fixtures and point of purchase
displays, as well as office furniture. In addition, Leggett makes
non-automotive aluminum dye castings, drawn wire steel, automotive
seat and lumber systems, as well as bedding industry machinery. The
company has 130 production facilities located in 18 countries. The
company reports its operating results under the following
Residential Furnishings manufactures a range of components used
by bedding and upholstered furniture manufacturers in their
finished products. This division also supplies carpet cushions,
adjustable beds, ornamental beds and geo components. In fiscal
2014, this segment contributed approximately 53% to total
Specialized Products division produces lumber systems and wire
components used by automotive seating manufactures. This segment
also manufactures racks, and shelving and cabinets used to outfit
service vans. In fiscal 2014, this segment contributed nearly 21%
Industrial Materials segment produces and provides steel rods,
drawn steel wires, steel billets and welded steel tubing to its
customers. In fiscal 2014, this segment contributed about 21% to
Commercial Fixturing & Components segment manufactures
retail store fixtures and point of purchase displays. The segment
also produces chair controls, bases and other components for office
furniture manufacturers. In fiscal 2014, this segment contributed
approximately 5% to revenues.
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