Leggett & Platt Announces Performance Improvement Plan

Leggett & Platt announced a four-point tactical plan aimed at significantly improving operational performance, margins, and shareholder return. As part of this plan, Leggett is authorized to repurchase up to 10 million shares of stock, which equates to approximately 5% of the outstanding share base.

Mr. Felix E. Wright, CEO of Leggett & Platt, summarized the plan as follows: "First, we will work diligently to fix problems in businesses that are performing below expectations. Second, we will consolidate, close, or exit businesses that can't be fixed. Third, we will reduce acquisitions and capital spending in operational areas that are under-performing. And finally, we intend to use excess cash flow to repurchase shares of our stock."

Acquisitions will continue within the businesses that are performing well, and annualized sales growth from future acquisitions will likely be in the 3-5% range. As performance improves, margin expansion is expected to result in earnings growth that exceeds total sales growth.

Mr. Wright went on to say, "This is not a strategic change in our long-term growth plans. This is a tactical shift to accomplish two things. First, it gives management of under-performing operations time to devote their full attention to correcting problems, without the demands that additional acquisitions bring. Second, it frees up cash to repurchase what we believe are extremely undervalued shares, without requiring that we significantly lever the balance sheet. Strategically, we plan to return to our traditional level of acquisition expenditures, and the resultant top and bottom line growth, once operational performance improves."