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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ /(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________________ to ___________________
Commission File Number 1-7845
LEGGETT & PLATT, INCORPORATED
(Exact name of Registrant as specified in its charter)
MISSOURI 44-0324630
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization) identification no.)
NO. 1--LEGGETT ROAD 64836
CARTHAGE, MISSOURI (Zip code)
(Address of principal executive
offices) (Zip code)
Registrant's telephone number, including area code: (417) 358-8131
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Common Stock, New York Stock Exchange
$.01 par value Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /X/[X] No / /[_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. / /[_]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $1,582,608,398.$1,699,573,419.
There were 40,733,06683,972,743 shares of the Registrant's common stock outstanding as
of February 25, 1994.23, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held May 11, 1994,15, 1996, are incorporated by reference
into Part III of this report.
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS.General Development of Business. The Company is a manufacturer. It was
incorporated in 1901 as the successor to a partnership formed in 1883 at
Carthage, Missouri. That partnership was a pioneer in the manufacture and sale
of steel coil bedsprings. The Company manufactures, markets and distributes a
broad range of engineered products for the home, office, institutional and
commercial furnishings industry and specialized markets. Products produced and
sold for the furnishings industry constitute the largest portion of the
Company's business. These include primarilymany different components that are used as
material parts by companies makingmanufacturers of bedding, furniture and bedding for homes, offices and institutions. Also
in the furnishings area, theother furnishings. The
Company also produces and sells some finished furniture
and carpet cushioning materials. In addition, a group of diversified products is
produced and sold. The Company believes it is the largest producer of a diverse
range of furniture and bedding components in the United States.furnishings
industry. The term "Company," unless the context requires otherwise, refers to
Leggett & Platt, Incorporated and its majority owned subsidiaries.
The Company completed severaleight acquisitions during 1993, primarily businesses
engaged in manufacturing components1995 in exchange for
the furnishings industryapproximately $28.7 million in cash (net of cash acquired) and raw
materials used by the Company in the manufacture679,448 shares of
its products.
In September 1993 the Company acquired Hanes Holding Company ("Hanes"),
headquartered in Winston-Salem, North Carolina. Hanes is a converter and
distributor of woven and nonwoven construction fabrics, primarily in the
furnishings industry. Hanes also is a commission dye/finisher of nonfashion
fabrics for the furnishings and apparel industries. Immediately followingcommon stock. The acquisitions expanded the Company's acquisition of Hanes, the Company (through Hanes) completed the
acquisition of VWR Textiles & Supplies, Inc., which converts and distributes
woven and nonwoven construction fabrics and manufactures other soft goods
components for sale to manufacturers of furniture and bedding.
Also, in September 1993 the Company acquired full ownership of several wire
drawing mills which had been previously jointly owned.
For further information concerning acquisitions referenceannual sales base by
approximately $80 million. Reference is also made to Note BC of the Notes to
Consolidated Financial Statements.
PRODUCTS AND MARKET.Statements for further information about the Company's
acquisitions.
Customers, Market and Products. The Company has several thousand
customers, most of which are manufacturers of finished furnishings. The Company
is engaged primarily innot dependent upon any single customer or any few customers. A large number
of the manufacture
and distribution of components used by companies that manufacture furniture and
bedding for homes, offices and institutions. Manufacturers of finished furniture
and bedding use many component parts which can be standardized and more
efficiently produced in volumes beyond the individual needs of most such
manufacturers. It is this market for component parts which the Company serves
through its furniture and bedding component product lines.
The Company's componentsfurnishings customers manufacture finished bedding (mattresses
and boxsprings), or upholstered and non-upholstered furniture and other finished products for sale to
wholesalers, retailers,home, office,
institutions and others. Historically,commercial applications.
Over the furnishings
industry has been highly fragmented and included many relatively small
companies, widely dispersed geographically. Althoughlast few years there has been a trend toward consolidation in
the furnishings industry. However, the furnishings industry generally continues
to be highly fragmented and includes many relatively small companies, widely
dispersed geographically.
Outside the furnishings industry, the industry asCompany's customers participate
in a whole
remains fragmented to a substantial degree.number of different specialized or niche markets for consumer and
industrial products. These customers have requirements for various aluminum die
castings, components for automotive seating and sound insulation, various kinds
and sizes of steel wire and steel tubing, non-fashion fabrics, cushioning
materials, and specialized equipment and proprietary motion controls for
manufacturing machinery.
The Company's component products are sold and distributed primarily through the Company'sits
own sales personnel.
In addition toThe Company's furnishings products include a broad line of components
used as material parts by manufacturers that make finished products. Examples of
furnishings components manufactured by the Company include innerspring and
boxspring units for mattresses and boxsprings; foam, textile, fiber and other
cushioning materials for bedding and furniture; springs and seating suspensions
for furniture; steel mechanisms and hardware for reclining chairs, sleeper sofas
and other types of motion furniture; chair controls, aluminum, steel and plastic
bases and columns for office furniture; non-fashion construction fabrics and
other furniture supplies.
The Company's diverse range of components gives its furnishings
manufacturer-customers access to a single source for many of their component
needs. For example, a manufacturer of bedding can come to the Company for
almost every component part of a mattress and boxspring except the upholstering
material. This same principle holds true for manufacturers of other furnishings
such as upholstered motion chairs, sofas and loveseats and office chairs.
Because the Company has the advantage of long production runs and numerous
production and assembly locations, it can produce component products more
efficiently than its customers. Therefore, components customers can focus on
the design, style and marketing of their various furnishings products, rather
than the production of many standardized components.
1
The Company also manufactures and sells some select lines of finished
products for the furnishings industry. These finished products include sleep-related finished furniturecarpet
underlay and carpet cushioning materials.non-skid area rug pads, metal shelving, point-of-purchase displays
and other commercial fixtures, bed frames, daybeds, bunk beds, headboards,
adjustable electric beds, and fashion beds. Some of the finished furniture
products areproduced by the Company is sold to bedding and furniture manufacturers whichthat
resell the finished furniture under their own labels to wholesalers or retailers.
Certain finished furniture, such as bed frames, fashion beds, daybeds and other
select items, are also sold by the Company directly to retailers. The
Company's carpet cushioning materialsCertain
shelving, displays and fixtures are sold primarilydirectly to floor covering
distributors with some direct contract sales.
1
The following list is representativeend users of the principal products produced by
the Company in the furnishings industry:
BEDDING COMPONENTS
Lectro-LOK-R-, Web-LOK-TM-, LOK-Fast-TM-,
Flex-Deck-TM-, and Semiflex-TM- boxspring
components
Edge and corner stabilizer spring supports
Foam and fiber cushioning materials
Gribetz computerized single needle (Class V)
and multi-needle chain stitch (Class I-IV)
quilting machinery, material handling
systems, panel cutters, tape edge and
border serging machines
Hanes construction fabrics
Mira-Coil-R-, Super-Lastic-R-,
Lura-Flex-TM-, Hinge Flex-TM-, and
Ever-Flex-TM- innerspring assemblies for
mattresses
Mounted and crated boxsprings and foundation
units
Nova-Bond-R- and other insulator pads for
mattresses and boxsprings
Perm-A-Lator-R-, Plasteel-R-,
Posturizer-TM-, Flexnet-TM- and other
mattress insulators
Spring and basic wire
Synthetic, wool, cotton, and silk cushioning
materials
Wood frames and dimension lumber for
boxspring frames
FINISHED PRODUCTS
Bed frames
Bunk beds made of wood and steel
Daybeds made of brass and wood
Electric beds
Genuine Brass, Lustre Brass-R- and other
metal fashion beds and headboards
Pedestal bed bases
DURAPLUSH-TM-, Permaloom-R- and other carpet
cushioning materials
Rollaway beds
Trundle beds
Wood headboards
FURNITURE COMPONENTS
Chair controls, casters and other components
for office furniture
ClassicTouch-TM- and Modular Wallhugger-R-
mechanisms for motion upholstered groups
Coil-Flex-TM- and ModuCoil-R- spring
assemblies for upholstered furniture
Components for office panel systems
Die cast aluminum, fabricated steel, and
injection molded plastic bases for office
furniture and dinettes
Flex-Cord-R- paper covered wire
Hanes construction fabrics
Mechanisms for adjustable height work tables
MPI/No-Sag-R- and other foam cushioning
No-Sag-R- seating systems and clips
Metal bed rails for bedroom suites
Molded plastic recliner handles and other
plastic furniture components
No-Sag-R- rocker springs
Perm-A-Lator-R- wire seating insulators
Perma-eze-R- seat and back springs
PETCO weltcord and furniture edgings
Ring-Flex-R- polyethylene foam edgings
SOFA PLUS-TM-, MAX-R-, and Classic-TM-
Series sofa sleeper mechanisms
Spring wire
Swivel, rocker and glider components for
motion furniture
Synthetic fiber, densified fiber batting,
seat pads and other cushioning materials
System Seating-TM-, Seat Pleaser-R- and
other furniture coils and accessories
Tackit-TM- tackstrips
Wallhugger-R- and Concept-TM- mechanisms for
reclining chairs
Webline-TM- seating systems
Welded steel tubingproducts.
Outside the furnishings industry, the Company produces and sells a
number of different products for home,various consumer and industrial and commercial uses a diversified line of components and other
products made principally from steel, steel wire, aluminum, plastics, textile
fibers and woven and nonwoven fabrics. The Company's diversifiedmarkets. These
products require manufacturing technologies similar to those used in making
furniture and
bedding componentsfurnishings products and certain raw materials which the Company produces for
its own use. 2
The following list is representativeExamples of the Company's principal diversified
products:
DIVERSIFIED PRODUCTS
Aluminumthese diverse products include: (i) aluminum die
cast custom productscastings sold to manufacturers of small to mid size gasoline engines, large and
mid range diesel engines, motorcycles, and recreational boats and motors; (ii)
non-fashion fabrics sold to apparel manufacturers; (iii) bale-tie machinery and
parts and galvanized wire sold to customers who compact, bale and recycle solid
waste; (iv) seating components and systems and sound insulation materials sold
to automotive suppliers; (v) steel wire and welded steel tubing sold to
manufacturers of a wide range of industrial and consumer products; (vi) non-skid
pads and textile fibers sold to manufacturers of various consumer goods
requiring cushioning materials; (vii) aluminum ingot Cyclo-Index-R-sold to manufacturers of
aluminum products; (viii) motion controls for manufacturing equipment; (ix)
quilting machinery and materials handling equipment Flex-O-Lators-R-sold to manufacturers of
consumer products; and No-Sag-R- automotive
seat suspension systems
Gribetz single needle quilters, multi-needle
chain stitch quilters, and panel cutters
Hanes industrial and apparel fabrics
Industrial wire
Injection(x) injection molded plastic products
Mechanical springs
Metal and wire shelving for utility vehicles
and consumer products
Point-of-purchase display racks
Sound insulation materials
Specialty foam products
Textile fiber wiping cloths and other
products
Welded steel tubingproducts.
The table below sets out further information concerning sales of each
class of the Company's products:
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SUMMARY OF SALES
1993-1988
(Dollar amounts in millions) 1995 1994 1993 1992 1991 1990 1989 1988
------------ ------------ ------------ ------------ ------------ -----------
(DOLLAR AMOUNTS IN MILLIONS)
AMOUNT
Furnishings Products
Bedding Components..............Components $ 558.4 $ 534.5 $ 471.1
$ 409.8 $ 364.9 $ 358.4 $ 323.4 $ 257.3
Furniture Components............ 405.4 345.5 326.9 357.6 332.7 256.5Components 575.7 513.4 412.0
Finished Products............... 271.3 258.8 250.9 244.4 198.7 152.3
------------ ------------ ------------ ------------ ------------ -----------Products 424.0 350.3 312.7
-------- -------- --------
Total Furnishings Products.......... 1,147.8 1,014.1 942.7 960.4 854.8 666.1Products 1,558.1 1,398.2 1,195.8
Diversified Products.............. 378.9 300.9 278.7 270.9 262.6 193.2
------------ ------------ ------------ ------------ ------------ -----------Products 501.2 459.9 330.9
-------- -------- --------
Net Sales..................... $ 1,526.7 $ 1,315.0 $ 1,221.4 $ 1,231.3 $ 1,117.4 $ 859.3
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
PERCENT OF TOTAL
Furnishings Products
Bedding Components.............. 30.9% 31.1% 29.9% 29.1% 28.9% 29.9%
Furniture Components............ 26.5 26.3 26.8 29.0 29.8 29.9
Finished Products............... 17.8 19.7 20.5 19.9 17.8 17.7
------------ ------------ ------------ ------------ ------------ -----------
Total Furnishings Products.......... 75.2 77.1 77.2 78.0 76.5 77.5
Diversified Products.............. 24.8 22.9 22.8 22.0 23.5 22.5
------------ ------------ ------------ ------------ ------------ -----------
Net Sales..................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
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Previously reported amounts have been restated to reflect pooling of interests
acquisitions.Sales $2,059.3 $1,858.1 $1,526.7
======== ======== ========
Reference is also made to Note IJ of the Notes to Consolidated
Financial Statements for further segment information.
The Company's international division is involved primarily in the sale
of machinery and equipment designed to manufacture the Company's Mira-Coil-R-
(Continuous Coil) innersprings
and certain other spring products and the licensing of patents owned and
presently maintained by the Company in a number
of foreign countries. The Company also sells quilting machines and similar
equipment and certain other component products in some foreign countries. Foreign sales are a
minor portion of the Company's business.
3
CUSTOMERS.Raw Materials. The Company has several thousand customers, mostuses a variety of which are
engagedraw materials in
manufacturing finished bedding and furnitureits products. NoneSome of the
Company's customers account for as much as 10% of sales and, in management's
opinion, the loss of any single customer would not have a material adverse
effect on the Company's business as a whole.
SOURCES OF RAW MATERIALS. Steel rod (from which steel wire is drawn) and
coil steel are the Company's most important raw materials. Other raw materials
used by the Company include steel rod from which steel wire is drawn, coil steel, woven and
nonwoven fabrics, aluminum ingot, aluminum scrap, angle steel,iron, sheet steel,
various woods,dimension lumber, textile scrap, foam chemicals, foam scrap, woven and
nonwoven fabrics and plastic.
Substantially all of the Company's requirements for steel wire, an important
componentmaterial in many of the Company's products, are supplied by Company-owned wire
drawing mills. A substantial portion of the steel rod used by these wire drawing
mills is purchased pursuant to a rod supply agreement with a major steel rod
producer. The Company also produces, at various locations, for its own
consumption and for sale to customers not affiliated with the Company, slit coil
steel, welded steel tubing, textile fibers, dimension lumber and aluminum ingot.
Numerous supply sources
2
for the raw materials used by the Company are available. The Company did not
experience any significant shortages of raw materials during the past year.
PATENTS: RESEARCH AND DEVELOPMENT.Patents and Trademarks. The Company holds numerous patents concerning
its various product lines. No single patent or group of patents is material to
the Company's business as a whole. TheExamples of the Company's more significant
trademarks include those listed with the Company's principal products.LOK-Fast(TM) and DYNA-Lock(TM) (boxspring components),
Mira-Coil(R) and Lura-Flex(TM) (mattress innersprings); Nova-Bond(R) and
Flexnet(TM) (insulators for mattresses); ADJUSTA-MAGIC (adjustable electric
beds); Wallhugger(R) and Hi-Style(TM) (recliner chairs); Modu Max(TM) (sofa
sleeper mechanism); FastLoc(TM) (sofa component); Gribetz, WBSCO and Cyclo-
Index (machinery).
Research and Development. The Company maintains research, engineering
and testing centers at Carthage, Missouri, and also does research and
development work at several of its other facilities. The Company is unable to
precisely calculate the cost of research and development since the personnel
involved in product and machinery development also spend portions of their time
in other areas. However, the Company believes that the cost of research and
development approximatedwas approximately $7 million in 1995, $6 million in 1994 and $5
million in each of the last three years.
EMPLOYEES.1993.
Employees. The Company has approximately 13,00016,600 employees of whom
approximately 10,00012,800 are engaged in production. Approximately 40%35% of the
Company's production employees are represented by labor unions.
The Company did not experience any material work stoppage related to
the negotiation of contracts with labor unions during 1993.1995. Management is not
aware of any circumstancecircumstances which isare likely to result in a material work
stoppage related to the negotiations of any contracts expiring during 1994.
COMPETITION. The markets for components and other products the Company
produces are highly competitive in all aspects.1996.
Competition. There are numerousmany companies offering products which compete
with those products offeredmanufactured and sold by the Company. The markets for the Company's
products are highly competitive in all aspects. Given the diverse range of
components and other products produced by the Company, believesthe number of other
companies competing with respect to any class or type of components or other
products varies over the Company's product range. There are also a number of
maker-users (vertically integrated manufacturers) of many of the products the
Company manufactures. The primary competitive factors in the Company's business
are price, product quality and customer service. To the best of the Company's
knowledge, it is the largest supplier in the United States of a diverse range of
furniture and bedding components to the furnishings industry.
GOVERNMENT REGULATION.Backlog. The Company's relationship with its customers and its
manufacturing and inventory practices do not provide for the traditional backlog
associated with some manufacturing entities and no backlog data is regularly
prepared or used by management.
Government Regulation. The Company's various operations are subject
to federal, state, and local laws and regulations related to the protection of
the environment, worker safety, and other matters. Environmental regulations
include those relating to air and water emissions, underground storage tanks,
waste handling, and the like. While the Company cannot forecast policies that
may be adopted by various regulatory agencies, management believes that
compliance with these various laws and regulations will not have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.
From time to time, the Company is involved in proceedings or takes remedial or
other actions, relatingrelated to
environmental matters. In one instance, the United States Environmental
Protection Agency ("EPA") has directed(EPA) ordered one of the Company's subsidiaries to investigate
potential releases into the environment and, if necessary, to perform corrective
action. The subsidiary successfully appealed the EPA's action.order. On February 4,June 27,
1994, the EPA Environmental Appeals Board
4
remanded the matterindicated it planned to issue a new, similar order. The
subsidiary, the EPA and the Florida Department of Environmental Protection
(FDEP) are negotiating an agreement to investigate and, if necessary, take
corrective action to resolve the dispute. Estimated costs to perform an agreed
upon investigation and any related corrective actions are not material and have
been provided for further proceedings.in the financial statements as of December 31, 1995. If
current negotiations with the EPA and the FDEP are unsuccessful, and the EPA
issues a new order, the subsidiary expects it would appeal the new order. If
this appeal is unsuccessful, the costs to perform any required investigation
and, if necessary, corrective action cannot be reasonably estimated. One-half of
any costs, associated with any such investigation or corrective actionincluding the costs of voluntary actions, would be reimbursed to the
Company under a contractual obligation of a former joint owner of the
subsidiary. The outcome of this matter cannot be reasonably predicted.
Accordingly, noNo provision for the costcosts of performing investigation
3
and corrective action beyond any requiredagreed upon investigation and remediation
mentioned above has been recorded in the Company's financial statements. If any
such additional investigation and corrective action has been recorded on the books of the Company. Managementis required, management
believes the cost to perform any investigation and corrective action, if
eventually required, will not havepossibility of a material adverse effect on the Company's
consolidated financial condition or results of operations of the Company.is remote.
ITEM 2. PROPERTIES
The Company owns or leaseshas approximately 150 facilities throughout170 locations in North America,
including 32 states in the United States and Canada. Its corporate headquarters is located in Carthage,
Missouri.States. The Company's most important physical
properties are its owned or
leased manufacturing plants. SuchThese manufacturing plants include five
wire drawing mills, in
Missouri, Florida, Kentucky, Indiana and Massachusetts;three welded steel tubing mills in Mississippi and Tennessee; and an aluminum smelting plant in Alabama.
Allapproximately 60 major
manufacturing facilities. The balance of these mills manufacture some products which are either transferred to and
used by the Company's other manufacturing plants,locations are engaged in
assembly, warehousing, sales, administration or are sold to others. Other
major manufacturing plants are located in Alabama, Arkansas, California,
Georgia, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Mississippi,
Missouri, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Wisconsin,research and Canada.development. In
addition, the Company owns or leases a large number of other
facilitieshas several locations in foreign countries. Its corporate
headquarters are located in approximately 30 states utilized mainly for assembly,
warehousing and distribution of Company products.Carthage, Missouri.
Most of the Company's major manufacturing plants are owned by the
Company. The Company or
are held under operating leases. Leases expire at various dates through 2010.also conducts certain of its operations in leased premises.
Terms of the leases, including purchase options, renewals and maintenance costs,
vary by lease. For additional information regarding lease obligations, reference
is made to Note EF of the Notes to Consolidated Financial Statements.
The Company's machinery, equipment and buildings are maintainedProperties of the Company include facilities which, in good
condition andthe opinion of
management, are suitable and adequate for the manufacture, assembly and
distribution of its current operations.products. These properties are located to allow for quick
and efficient deliveries and necessary service to the Company's diverse customer
base.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in numerous ordinary, routine workers' compensation, product
liability, vehicle accident, employment termination, and other claims and legal
proceedings, the resolution of which Managementmanagement believes will not have a
material adverse effect on the consolidated financial condition or results of
operations of the Company.Company in the ordinary course of business.
The Company is presently party to a small number of proceedings in
which a governmental authority is a party and which involve provisions enacted
regulating the discharge of materials into the environment. These proceedings
deal primarily with waste disposal site remediation. Management believes that
potential monetary sanctions, if imposed in any or all of these proceedings, or
any capital expenditures or operating expenses attributable to these
proceedings, will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company.
The EPA has alleged
that two of the Company's facilities in Grafton, Wisconsin violated wastewater
pretreatment requirements under the Clean Water Act. No action is pending. The
EPA has not requested any specific relief, but has indicated it intends to bring
an action. Management believes the cost to resolve this matter will not have a
material adverse effect on the consolidated financial condition or results of
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
54
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
Leggett & Platt'sThe Company's common stock is listed on The New York and Pacific Stock
Exchanges with the trading symbol LEG. The table below highlights quarterly and
annual stock market information for the last two years.
PRICE RANGE
-------------------- VOLUME OF DIVIDEND
HIGH LOW SHARES TRADED DECLAREDPrice Range
---------------- Volume of Dividend
High Low Shares Traded Declared
------- ------- ------------- --------- --------- ------------- -----------
1993:1995
Fourth Quarter..................................Quarter $26.875 $19.875 10,968,900 $ 50.000 $ 40.500 3,338,100 $ .14.10
Third Quarter................................... 46.750 37.000 4,463,200 .14Quarter 26.438 21.750 11,293,000 .10
Second Quarter.................................. 39.125 32.875 3,073,400 .13Quarter 22.438 18.813 10,907,000 .09
First Quarter................................... 39.625 34.125 3,897,300 .13Quarter 21.438 17.000 9,863,400 .09
For the Year.................................... 50.000 32.875 14,772,000 .54
1992:Year 26.875 17.000 43,032,300 .38
1994
Fourth Quarter.................................. $ 34.250 $ 23.375 5,063,100 $ .12Quarter $18.938 $16.688 8,249,800 $.080
Third Quarter................................... 25.250 21.875 3,427,600 .12Quarter 20.000 16.625 13,432,600 .080
Second Quarter.................................. 26.063 21.250 8,665,400 .11Quarter 22.750 17.750 11,431,200 .075
First Quarter................................... 23.500 19.125 5,492,400 .11Quarter 24.750 20.813 8,839,400 .075
For the Year.................................... 34.250 19.125 22,648,500 .46Year 24.750 16.625 41,953,000 .31
Price and volume data reflect composite transactions and closing prices as reported
daily by The Wall Street Journal adjusted, as appropriate, forJournal. Adjustments have been made to reflect a
2-for-1September 15, 1995 two-for-one stock split on June 15, 1992.split.
At February 25, 1994March 1, 1996 the Company had approximately 6,9699,403 shareholders of record.
5
ITEM 6. SELECTED FINANCIAL DATA
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
1995 1994 1993 1992 1991
1990 1989
---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)-------- -------- -------- -------- --------
(Dollar amounts in millions,
except per share data)
SUMMARY OF OPERATIONS
Net sales......................................... $ 1,526.7 $ 1,315.0 $ 1,221.4 $ 1,231.3 $ 1,117.4sales............................. $2,059.3 $1,858.1 $1,526.7 $1,315.0 $1,221.4
Earnings from continuing operations...............operations... 134.9 115.4 85.9 65.4 40.0
30.2 48.9
Earnings per share................................ 2.09 1.64 1.08share.................... 1.59 1.39 1.04 .82 1.34.54
Cash dividends declared per share................. .54 .46 .43 .42 .37
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------share..... .38 .31 .27 .23 .22
SUMMARY OF FINANCIAL POSITION
Total assets......................................assets.......................... $1,218.3 $1,119.9 $ 901.9 $ 772.0 $ 746.7
$ 768.8 $ 662.6
Long-term debt....................................debt........................ 191.9 204.9 165.8 147.9 232.7 269.4 205.0
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
Results of operations for 1990 reflect a restructuring charge of $20.3
pre-tax and $14.3 after tax, or $.39 per share.
Previously reported per share amounts have been restated to reflect a September
15, 1995 two-for-one stock split.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's previously issued financial statementsPreviously reported share and per share amounts have been restated to
reflect pooling of interests acquisitions. Therefore, the following discussion
and analysis reflects the Company's capital resources and liquidity and results
of operations as restated for these acquisitions.
6
a September 15, 1995 two-for-one stock split.
CAPITAL RESOURCES AND LIQUIDITY
The Company's financial position reflects several important principles
and guidelines of management's capital policy. These include management's belief
that corporate liquidity must always be adequate to support the Company's
projected internal growth rate. At the same time, liquidity must assure
management that the Company will be able to withstand any amount of financial
adversity that can reasonably be anticipated. Management also intends to direct
capital to strategic acquisitions and other investments that provide additional
opportunities for expansion and enhanced profitability.
Financial planning to meet these needs reflects management's belief
that the Company should never be forced to expand its capital resources, whether
debt or equity, at a time not of its choosing. Management also believes that
financial flexibility is more important than maximization of earnings per share
through excessive leverage. The Company's primary source of capital to meet these objectives is from
internally generated funds. Operating activities provided $349.1 million in cash
during the last three years. An additional $3.5 million in cash was generated
from the issuance of the Company's common stock. Cash dividends paid on the
stock were $57.2 million and repurchases of stock for the Company's treasury
totaled $3.2 million during the three year period.
ManagementTherefore, management continuously provides for
available credit in excess of the
Company's worst-case projections. Policy guidelines provide thatprojected cash needs and has maintained a
guideline for long-term debt composedas a percentage of two "layers", will normally be maintainedtotal capitalization in a range
of 30% to 40%.
Internally generated funds provided $521.9 million in capital during
the last three years. Long-term debt outstanding was 19% of total capitalization.capitalization
at the end of 1995 and 23% at the end of the prior two years. Obligations having
scheduled maturities are the base "layer" of the Company's debt capital. At the
end of 1993,1995, these obligations totaled $122.3$174.4 million, consisting primarily of
privately placed institutional loansmedium-term notes and tax-exempt industrial development bonds.
At the end of 1992,1994, debt with scheduled maturities totaled $112.5$146.6 million, which
was downup from $135.4$122.3 million a year earlier.
Near the endDuring each of the third quarter of 1993,last two years, the Company issued $50$25 million in
unsecured privately placed debt under a medium-term note program. The notes
issued in 1995 mature in ten years and have a fixed interest rate of 7.0%. The
1994 notes were issued with average lives of eight years and fixed interest
rates averaging 7.6%. Proceeds from these notes were used to repay a portion of
the Company's revolving credit. In 1993, the Company issued $50 million of
medium-term notes. These notes were issued with average lives of approximately
nine years and fixed interest rates
6
averaging 5.8%. Debt of a company acquired in a September 1993 pooling of
interests transaction was repaid with the majority of the proceeds from these
notes.
In 1992, the Company also issued approximately $26 million of medium-term
notes near the beginning of the fourth quarter. These notes were issued with
average lives of approximately five years and fixed interest rates averaging
6.15%. Proceeds from the notes issued in 1992 were used to repay debt
outstanding under the Company's revolving bank credit agreements.November 1994, Standard & Poor's and Moody's, the nations twonation's leading
debt rating agencies, both increased their ratings of the Company's senior debt in July 1992.debt.
Standard & Poor's increased its rating to A-A from BBB+A-, and Moody's increased its
rating to A3A2 from Baa1. In March 1992, substantially all of the $40 million of 6 1/2%
convertible subordinated debentures, which had been outstanding at the end of
1991, were converted into 2.1 million shares of the Company's common stock. The
resulting increase in shareholders' equity enhanced the Company's flexibility in
capital management and increased yearly after-tax cash flow by approximately $.7
million.A3.
The Company's second "layer" of debt capital consists of revolving
credit agreements with sixseven banks. Over the years, management has renegotiated
these bank credit agreements and established a commercial paper program to keep
pace with the Company's projected growth and to maintain a highly flexible sourcesources
of debt capital. When utilized, theThe credit under these agreements isarrangements has been a long-term
obligation. At the same time,If needed, however, the credit is also available for short-term
borrowings and repayments. In 1993, there was
$43.5 million in revolving debt outstanding at the end of the year, up from
$35.4 million in 1992. At the end of 1991, $97.31995, there was $17.5 million in
revolving debtdebt/commercial paper outstanding, down from $58.3 million in 1994 and
$43.5 million in 1993. This decrease was outstanding. The 1993 increase in revolving debt reflected a portionresult of funds
borrowed to finance cash acquisitions inrepayments from the
third quarter. Inproceeds made available through the fourth
quarterissuance of 1993 and prior to recent acquisitions, revolving bank debt was
reduced withmedium-term notes. Also,
internally generated funds.funds were used, as available, to reduce debt outstanding
during the last three years. Additional details of long-term debt outstanding,
including scheduled maturities, and the revolving credit and commercial paper are
discussed in Note D of the Notes to Consolidated Financial Statements.
7
Net capital investments to modernize and expand manufacturing capacity
internally totaled $109.0 million in the last three years. During this period,
acquisitions accounted for by the purchase method of accounting involved a net
cash investment of $93.3 million, plus an assumption of $5.7 million in
long-term debt of the acquired businesses. In addition, the Company issued 1.8
million shares of common stock in three acquisitions accounted for as poolings
of interests during this period.
The largest acquisitions were completed during the third quarter of 1993. On
September 1, the Company acquired Hanes Holding Company for 1.6 million shares
of common stock, in a pooling of interests, and purchased VWR Textiles &
Supplies, Inc. (through Hanes) for $26 million in cash. The Company also
purchased full ownership of several wire drawing mills, which previously had
been jointly owned. This transaction involved $33 million, plus the assumption
of $3.6 million in long-term debt. Additional details of acquisitions are
discussed in Note BE of the Notes to Consolidated Financial Statements.
The following table shows, in millions, the Company's capitalization
at the end of the three most recent years. It also shows the amount of
additional capital available through the revolving bank credit agreements andagreements. In
addition, the Company's
commercial paper program. The amountamounts of cash and cash equivalents is alsoare shown.
1995 1994 1993
1992 1991
--------- --------- --------------- ------ ------
Long-term debt outstanding:
Scheduled maturities.......................................... $ 122.3 $ 112.5 $ 135.4maturities $174.4 $146.6 $122.3
Revolving credit..............................................credit/commercial paper 17.5 58.3 43.5
35.4 97.3
--------- --------- --------------- ------ ------
Total long-term debt........................................debt 191.9 204.9 165.8
147.9 232.7
Shareholders' equity............................................equity 734.1 625.2 515.6 441.6 346.3
Unused committed credit.........................................credit 200.0 156.7 116.5 139.6 77.7
Cash and cash equivalents.......................................equivalents 6.7 2.7 .4 5.2 12.6
Net capital investments to modernize and expand manufacturing capacity
internally totaled $230.6 million in the last three years. In 1996, management
anticipates internal investments will be at levels approximating those of 1995.
During the last three years, the Company also employed $185.5 million in cash
(net of cash acquired) and issued 5.2 million shares of common stock in
acquisitions. During 1995, the Company acquired eight businesses for $28.7
million in cash (net of cash acquired) and .7 million shares of common stock.
Additional details of acquisitions are discussed in Note C of the Notes to
Consolidated Financial Statements. Purchases of common stock for the Company's
treasury totaled $24.5 million in 1995 and $1.2 million the preceding two years.
These purchases were made primarily for employee stock plans and, in 1995, to
replace shares issued in purchase acquisitions. Cash dividends on the Company's
common stock in the last three years totaled $78.4 million.
The Company has substantial capital resources to support projected
internal cash needs and additional acquisitions consistent with management's
goals and objectives. In addition, the additionalCompany has the availability of short-termshort-
term uncommitted credit from several banks. However, there was no short-term
debt outstanding at the end of any of the last three years.
The Company has substantial capital resources to
support additional capital investments at or above recent levels.
Working capital increased $32.5$107.7 million in the last three years. To
gain additional flexibility in capital management and to improve the rate of
return on shareholders' equity, the Company continuously seeks efficient use of
working capital. The following table shows the annual turnover on average year-endyear-
end working capital, trade receivables and inventories. The ratios may be
affected by the timing of the Company's acquisitions.
7
1995 1994 1993
1992 1991
---------- ---------- -------------- ---- ----
Working capital turnover (excluding cash
and cash equivalents)......................... 6.4x 6.4x 6.1x 5.8x 5.4x
Trade receivables turnover..........................................turnover................ 8.1 8.2 8.3
8.3 8.2
Inventory turnover.................................................. 5.7 5.4 5.0turnover........................ 5.9 6.2 6.0
Future commitments under lease obligations are described in Note EF and
contingent obligations in connection with environmental matters are discussed in Note JK of the Notes to Consolidated
Financial Statements.
RESULTS OF OPERATIONS
The results of operations during the last three years reflect various
elements of the Company's long-term growth strategy, along with general trends
in the economy and the furnishings industry.markets the Company serves. The Company's growth
strategy continues to include both internal programs and acquisitions which
broaden product lines and provide for increased market penetration and operating
efficiencies. With a continuing emphasis on the development of new and improved
products and advancements in production technology,technologies, the Company is able to
consistently offer high quality products, competitively priced.
8
During 1995, demand was mixed in the various furnishings markets the
Company serves. Industry sales and shipments of office, institutional and
commercial furnishings generally strengthened. By contrast, industry sales and
shipments of residential furniture softened during the year in response to
weakening retail sales. The demand for bedding products, however, was generally
stronger than the demand for most other kinds of residential furniture.
Additionally, in contrast to 1994, industry sales and shipments of furniture and
bedding experienced a more normal seasonal slowdown near the end of 1995. These
two markets previously had experienced above average growth in each of the three
preceding years. The Company's strongest percentage growth in 1995 sales
continued to come from niche markets for specialized furnishings and other
diversified products.
Trends in the general economy were favorable during the last twothree
years. EconomicIn 1995, economic growth moderated. By contrast, 1994 economic growth
increased in the fourth quarter of 1993, following more modest
growth during most of the year. Consumer confidence also improved near the end
ofas the year and final demand for durable goods, including furniture and
bedding, generally remained stronger than the demand for non-durable goods.
Consumers reacted favorably to lower long-term interest rates and increased
availability of credit.progressed. In 1992, a post-election recovery in consumer confidence
quickly led to increased consumer spending and accelerated1993, growth in the
economy. However, compared with previous first year recoveries from recessionary
lows, economic improvement was modest during most of 1992. During 1991, the
economy began to recover from recessionary lowsyear, but increased in the fourth quarter.
Management expects modest economic growth in 1996, with only modest
inflation. While severe winter weather impacted business early in the year,
when the war
in the Middle East ended and consumer confidence temporarily improved. Consumer
confidence soon turned back down and the pace of overall business remained
depressed at the end of 1991.
Demand in the furnishings industry followed a pattern similar to the general
economy during the last three years. Annual growth in retail sales and
manufacturers' shipments of bedding and furniture was somewhat stronger in 1993
than in 1992. Increased consumer spending near the end of the last two years
helped offset some of the seasonal slowdown in demand for bedding, furniture and
other furnishings the industry normally experiences. In 1991, industry sales and
shipments reached recessionary lows in the first quarter, and recovered slowly
during the remainder of the year.
Management is anticipating further modest growth in the economy and the
markets the Company serves in 1994. Severe winter weather and the California
earthquake have impacted overall business activity at the beginning of the year,
in several parts of the country. However,management believes these areshould be temporary adversities. Management is cautious in its outlook for business generally, primarily because
of concerns about higher income tax rates, proposals for governmental health
care programs, and inflationary trends.
Inflation in the United States generally remained modest during the last
three years. However, the Company experienced renewed inflation in prices for
raw materials, principally steel and wire, throughout 1993. Modest price
increases were implemented on some Company products during the second and third
quarters of 1993 to help offset earlier cost increases and the renewed inflation
in prices for raw materials. However, some of this inflation has not yet been
reflected inalso
believes the Company's selling prices. Therefore, the Company is continuing
to experience cost/price pressures in affected product lines. In 1992, the
Company was able to refrain from raising prices, as previously weaker economic
conditions had reduced inflationprospects for most raw materials. During 1991, the
Company implemented modest price increases on some products in the second
quarter. Prices for urethane foam products were raised more than others, in
response to the 1990 acceleration in prices for petrochemicals.long-term profitable growth remain
attractive.
The Company's consolidated net sales increased 11% in 19911995, 22% in
1994, and 16% in 1993, when compared with prior years. Roughly three-fourths of
the increase for 1995, one-half for 1994 and two-thirds for 1993 resulted from
acquisitions, with the remainder coming from internal growth. These increases in
internal growth primarily reflected higher unit volumes.
In response to increasing prices for raw materials, the Company
implemented some increases in selling prices, primarily in 1994 and 1993. While
the percentages and timing varied considerably, the largest 1994 increases were
modestly reduced afterconcentrated in aluminum products. In 1993, the mid-year divestitureincreases were concentrated in
steel and wire products. However, some of certain urethane foam operations. At the same time,1993 and additional 1994 cost
increases for steel and wire products were not passed along in the Company's
profitability improved through the partial elimination of the
operating losses these operations experienced in 1990. The operating results of
the Company's restructured Fashion Bed Group, which manufactures sleep-related
finished furniture, also began to improve nearselling prices until the end of 1992. In 1993,1994, or the Company's overall profitability reflected improved efficiencies in the remaining
foam operations. The Fashion Bed Group also attained improved efficiencies in
1993, but continues to perform below management's expectations.
The Company's consolidated net sales in 1993 increased 16% over the prior
year. Excluding acquisitions accounted for as purchases, sales increased 10%,
reflecting higher unit volumes and modestly higher prices on some products. In
1992, consolidated net sales increased 8% over 1991, due almost entirely to
higher unit volumes. Sales, excluding purchase acquisitions and divestitures,
also increased 8% in 1992.
9first half of 1995.
8
The following table shows various measures of earnings as a percentage
of sales for the last three years. It also shows the effective income tax rate
and the coverage of interest expense by pre-tax earnings plus interest.
1995 1994 1993
1992 1991
----------- ----------- ----------------- ------ ------
Gross profit margin...............................................margin.................... 23.8% 23.1% 22.9% 22.8% 21.4%
Pre-tax profit margin.............................................margin.................. 10.7 10.2 9.2 8.1 5.4
Net profit margin.................................................margin...................... 6.6 6.2 5.6 5.0 3.3
Effective income tax rate.........................................rate.............. 38.9 39.1 38.5 39.439.1
Interest coverage ratio...........................................ratio................ 20.2x 20.3x 14.8x 8.9x 4.3x
The Company's profit margins like sales, continued to improve since 1991.
In 1993,improved in each of the last three years.
Increased margins for 1995 primarily reflect an improvement in the gross profit
marginmargin. This improvement was substantially unchanged from 1992.
Operatingdue primarily to the Company's continuing growth in
niche markets with above average margins, increased production efficiencies resulting from increased sales and
production, cost cutting, and constant attention to cost containment were largely offset by
inflation in prices for some key raw materials. Reflecting this inflation, LIFO
expense reduced thecontainment.
The 1994 gross profit margin by 0.2%increased slightly from 1993, primarily
reflecting improved market conditions in 1993.the aluminum and foam industries and
gains in overall manufacturing efficiencies on higher volume. These favorable
factors more than offset cost/price pressures the Company continued to
experience in operations producing steel products. The pre-tax profit margin in
1994 increased to 10.2%. This experience wasimprovement reflected a 0.4% reduction in contrast to the previous two years, when LIFOtotal
selling, distribution and administrative expenses, as a percentage of sales. In
addition, interest expense and other deductions, net of other income, decreased
slightly increased gross
profit margins. The replacement costas a percentage of the LIFO inventory is discussed in Note
A of the Notes to Consolidated Financial Statements.sales.
The 1993 pre-tax profit margin increased to 9.2% of sales. This
improvement primarily reflected a 0.7% reduction in selling, distribution and
administrative expenses, as a percentage of sales. Increased efficiencies and
reduced bad debt expense contributed to the improvement in operating expense
ratios. These factors and a slight increase in other income more than offset one
time charges related to recent acquisitions and the Company's implementation of new
accounting statements issued by the Financial Accounting Standards Board.
The
new accounting statements are mentioned separately at the end of this
discussion, and in Note A of the Notes to Consolidated Financial Statements.
Interest expense, as a percentage of sales, was reduced 0.4% in 1993 and further
improved the pre-tax profit margin. Reduced debt outstanding (before recent1993
acquisitions) and lower interest rates were reflected in this improvement.
The effective 1995 income tax rate wasdecreased slightly to 38.9%, when
compared to 39.1% in 1993, up from 38.5% in 1992. In
the third quarter of 1993, corporate federal income tax rates were increased
from 34% to 35%, retroactive to January 1, 1993. Additional details of income
taxes for the last three years are discussed in Note Hboth of the Notes to
Consolidated Financial Statements.
In 1992, the gross profit margin increased to 22.8% of sales. This 1.4%
increase over 1991 primarily reflected an improvement in operating efficiencies
and earlier cost cutting at many locations.
The 1992 pre-tax profit margin increased to 8.1% of sales. In addition to
the improvement in the gross profit margin, the pre-tax margin benefitted from a
0.7% reduction in selling, distribution and administrative expenses, as a
percentage of sales. Improved operating efficiencies and reduced bad debt
expense were reflected in the lower 1992 operating expense ratios.
Interest expense, as a percentage of sales, was reduced 0.6% in 1992 and
further improved the pre-tax profit margin. Reduced debt outstanding and lower
interest rates both contributed to this improvement, which was partially offset
by an increase in other deductions, net of other income. The 1992 earnings
contribution from associated (50% owned) companies was down modestly from 1991.preceding two years.
STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS NOT YET ADOPTED
The Company adopted three accounting statements in 1993 issued by the
Financial Accounting Standards Board. The new statements included
Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting121, which the
Company will adopt in 1996, establishes accounting standards for Postretirement Benefits Other Than Pensions;"the impairment
of long-lived assets and certain other intangible assets. Management is
currently analyzing the impact of the adoption of SFAS No. 109, "Accounting for
Income Taxes;" and121, but does not
anticipate any material impact on the Company's consolidated financial
statements.
SFAS No. 112, "Employers' Accounting123, "Accounting For Stock-Based Compensation," establishes
financial accounting and reporting standards for Postemployment
10
Benefits."stock-based employee
compensation plans. SFAS No. 123 permits, as one alternative, the use of
existing accounting rules for such plans. The Company fully expensed any previously unrecorded liabilities
related to these accounting statementswill adopt this
alternative in 1993. The1996 and, therefore, SFAS No. 123 will have no effect on the
Company's consolidated financial statements, contrary to those of many other companies, have not been impacted in
any significant way byexcept for the implementation of the new accounting rules. All new
accounting statements issued by the Financial Accounting Standards Board that
could impact the Company were fully implemented by the end of 1993.additional required
disclosures.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and supplementary data included
in this Report begin on page 14.13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
119
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Reference is made to the sectionssection entitled "Election of Directors" and
"Compliance Withwith Section 16(a) of the Securities Exchange Act of 1934" in the
Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 11, 1994,15, 1996, said sectionsections being incorporated by
reference, for a description of the directors of the Company.
The following table sets forth the names, ages and positions of all
executive officers of the Company. Executive officers are elected annually by
the Board of Directors at the first meeting of directors following the Annual
Meeting of Shareholders.
The description of the executive officers of the Company is as
follows:
NAME AGE POSITION
- --------------------------- --- -------------------------------------------------------------------------------
Harry M. Cornell, Jr. 65 Chairman of the Board and Chief Executive Officer
Felix E. Wright 58 President, Chief Operating Officer and Director
Roger D. Gladden 48 Senior Vice President and President -- Commercial Products Group
Michael A. Glauber 51 Senior Vice President, Finance and Administration (Principal Financial Officer
and Principal Accounting Officer)
David S. Haffner 41 Senior Vice President and President -- Furniture and AutomotiveNAME AGE POSITION
---- --- --------
Harry M. Cornell, Jr. 67 Chairman of the Board and Chief
Executive Officer
Felix E. Wright 60 President, Chief Operating Officer
and Director
Roger D. Gladden 50 Senior Vice President and President--
Commercial Products Group
Michael A. Glauber 53 Senior Vice President, Finance and
Administration (Principal Financial
Officer and Principal Accounting
Officer)
David S. Haffner 43 Executive Vice President and Director
Jerry H. Hudkins 60 Vice President and President--Wire Group
Robert A. Jefferies, Jr. 54 Senior Vice President, Mergers,
Acquisitions and Strategic Planning and
Director
Ernest C. Jett 50 Vice President, Secretary and Managing
Director, Legal Department
Duane W. Potter 64 Senior Vice President and President--
Foam Components Group
Robert A. Jefferies, Jr. 52 Senior Vice President, Mergers, Acquisitions and Strategic Planning and
Director
Duane W. Potter 62 Senior Vice President and President -- Bedding Components Group
Thomas D. Sherman 49 Vice President, General Counsel and Secretary
Subject to the employment agreements and severance benefit agreements
listed as Exhibits to this Report, officers serve at the pleasure of the Board
of Directors.
Harry M. Cornell, Jr. has served as the Company's Chief Executive
Officer, Chairman of the Board and Chairman of the Board's Executive Committee
for more than the last five years.
Felix E. Wright was elected President in 1985 and has served as the Company's President and Chief
Operating Officer since 1979.for more than the last five years.
Roger D. Gladden was elected Senior Vice President in 1992. Mr. GladdenHe has
been President -- CommercialPresident--Commercial Products Group since 1984 and previously served as
Vice President -- Administration.President--Administration.
Michael A. Glauber was electedhas served as the Company's Senior Vice President,
Finance and Administration in 1990. Mr. Glauber was elected Vice President -- Finance in
1979 and Vice President -- Finance and Treasurer in 1980.for more than the last five years.
David S. Haffner was elected Executive Vice President in 1995. He
previously served as Senior Vice President and President --
FurniturePresident--Furniture and
Automotive Components Group in 1992. Mr. Haffner was appointed
President -- Furniturefrom 1992 to 1995 and as President--Furniture
Components Group in 1985 and was elected Vice President of the Company in 1985.from 1985 to 1992.
Jerry H. Hudkins has served the Company as Vice President and
President--Wire Group for more than the last five years.
10
Robert A. Jefferies, Jr. was electedhas served as the Company's Senior Vice
President, Mergers, Acquisitions and Strategic Planning in 1990. Mr. Jefferies formerly served asfor more than the last
five years.
Ernest C. Jett was elected Vice President and Secretary in 1995. He
previously served the Senior Vice President,Company as Assistant General Counsel from 1979 to 1995 and
Secretaryas Managing Director of the Company from 1977 through 1992.Legal Department since 1991.
Duane W. Potter was elected Vice President in 1978 and Senior Vice President in 1983. Mr. Potter has been President -- Beddingand President--Foam
Components Group since 1985.
Thomas D. Sherman, prior to joining the Company on January 1, 1993,in 1995. He previously served as Senior Vice President General Counsel and
SecretaryPresident--Bedding Components Group from 1983 to Coca-Cola Enterprises Inc.
and engaged in the private practice of law.
12
1995.
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation and Related Matters" in
the Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 11, 1994,15, 1996, is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Ownership of Common Stock" in the Company's
definitive Proxy Statement for the Company's Annual Meeting of Shareholders to
be held on May 11, 1994,15, 1996, is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The subsection entitled "Related Transactions" of the section entitled
"Executive Compensation and Related Matters" in the Company's definitive Proxy
Statement for the Company's Annual Meeting of Shareholders to be held on May 11,
199415,
1996 is incorporated by reference.
11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
1. FINANCIAL STATEMENTSFinancial Statements and Financial Statement Schedule Covered by
Report of Independent Accountants
The Financial Statements listed below are included in this Report:
-. Consolidated Statements of Earnings for each of the years in
the three year period ended December 31, 1993
-1995
. Consolidated Balance Sheets at December 31, 19931995 and 1992
-1994
. Consolidated Statements of Cash Flows for each of the years in
the three year period ended December 31, 1995
. Consolidated Statements of Changes in Shareholders' Equity for
each of the years in the three year period ended December 31,
1993
-1995
. Notes to Consolidated Financial Statements
of Cash Flows. Schedule for each of the years in the three year period ended
December 31, 19931995
II - Notes to Consolidated Financial Statements
- Report of Independent Accountants
2. FINANCIAL STATEMENT SCHEDULES
Reports of Independent Accountants on Financial Statement Schedules
Schedules (at December 31, 1993 and 1992, and for each of the years in the
three year period ended December 31, 1993)
V -- Property, Plant and Equipment
VI -- Accumulated Depreciation, Depletion and Amortization of Property, Plant
and Equipment
VIII -- Valuation and Qualifying Accounts and Reserves
X -- Supplementary Income Statement Information
All other information schedules have been omitted as the required
information is inapplicable, not required, or the information is included in the
financial statements or notes thereto.
3. EXHIBITS --2. Exhibits - See Exhibit Index.
4. REPORTS ON FORM3. Reports on Form 8-K FILED DURING THE LAST QUARTER OF 1993:filed during the last quarter of 1995: None.
1312
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
PAGE
---------
Quarterly Summary of Earnings.............................................................................. 15
Consolidated Statements of Earnings........................................................................ 16
Consolidated Balance Sheets................................................................................ 17
Consolidated Statements of Changes in Shareholders' Equity................................................. 18
Consolidated Statements of Cash Flows...................................................................... 19
Notes to Consolidated Financial Statements................................................................. 20
Report of Independent Accountants..........................................................................Page
----
Quarterly Summary of Earnings.............................................. 14
Consolidated Statements of Earnings........................................ 15
Consolidated Balance Sheets................................................ 16
Consolidated Statements of Cash Flows...................................... 17
Consolidated Statements of Changes in Shareholders' Equity................. 18
Notes to Consolidated Financial Statements................................. 19
Report of Independent Accountants.......................................... 29
1413
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
QUARTERLY SUMMARY OF EARNINGS
Leggett & Platt, Incorporated and Subsidiaries
(Unaudited)
(Dollar amounts in millions, except per share data)
QUARTER
------------------------------------------------------
FIRST SECOND THIRD FOURTH TOTAL
--------- --------- --------- --------- ----------
(UNAUDITED)
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)Year ended December 31, 1995 First Second Third Fourth Total
Net sales $523.1 $517.7 $523.6 $494.9 $2,059.3
Gross profit 121.9 123.2 123.9 122.0 491.0
Earnings before income taxes 54.2 54.2 57.1 55.2 220.7
Net earnings 32.9 33.0 34.8 34.2 134.9
====== ====== ====== ====== ========
Earnings per share $ .39 $ .39 $ .41 $ .40 $ 1.59
====== ====== ====== ====== ========
Year ended December 31, 19931994
Net sales................................................. $ 363.0 $ 371.7 $ 395.4 $ 396.6 $ 1,526.7sales $434.6 $448.8 $482.6 $492.1 $1,858.1
Gross profit.............................................. 82.5 85.4 91.1 90.0 349.0profit 98.6 104.3 110.6 115.5 429.0
Earnings before income taxes.............................. 32.1 34.4 37.1 37.4 141.0taxes 42.8 46.6 49.9 50.2 189.5
Net earnings.............................................. 19.6 21.0 22.3 23.0 85.9
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------earnings 26.0 28.2 30.2 31.0 115.4
====== ====== ====== ====== ========
Earnings per share........................................share $ .48.32 $ .51.34 $ .54.36 $ .56.37 $ 2.09
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------1.39
====== ====== ====== ====== ========
Previously reported per share amounts have been restated to reflect a September
15, 1995 two-for-one stock split.
14
CONSOLIDATED STATEMENTS OF EARNINGS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
Year ended December 31 1992
Net sales................................................. $ 320.5 $ 320.1 $ 340.6 $ 333.8 $ 1,315.0
Gross profit.............................................. 72.3 73.1 78.3 76.2 299.9
Earnings before income taxes.............................. 23.5 24.8 30.6 27.5 106.4
Net earnings.............................................. 14.5 15.6 18.8 16.5 65.4
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
Earnings per share........................................ $ .37 $ .39 $ .47 $ .41 $ 1.64
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of interests
acquisitions.
15
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
YEAR ENDED DECEMBER 31
1995 1994 1993 1992 1991
---------- ---------- ----------
(DOLLAR AMOUNTS IN MILLIONS,
EXCEPT PER SHARE DATA)
Net sales........................................................... $ 1,526.7 $ 1,315.0 $ 1,221.4sales $2,059.3 $1,858.1 $1,526.7
Cost of goods sold..................................................sold 1,568.3 1,429.1 1,177.7
1,015.1 959.7
---------- ---------- ------------------ -------- --------
Gross profit......................................................profit 491.0 429.0 349.0 299.9 261.7
Selling, distribution and administrative expenses...................expenses 254.8 227.0 192.4
175.2 171.2
Interest expense....................................................expense 11.5 9.8 10.2
13.5 19.9
Other (income) and deductions, net..................................net of other income 4.0 2.7 5.4
4.8 4.6
---------- ---------- ------------------ -------- --------
Earnings before income taxes......................................taxes 220.7 189.5 141.0
106.4 66.0
Income taxes........................................................taxes 85.8 74.1 55.1
41.0 26.0
---------- ---------- ------------------ -------- --------
Net Earnings......................................................earnings $ 134.9 $ 115.4 $ 85.9
======== ======== ========
Earnings per share $ 65.41.59 $ 40.0
---------- ---------- ----------
---------- ---------- ----------
Earnings Per Share................................................1.39 $ 2.091.04
======== ======== ========
The accompanying notes are an integral part of these financial statements.
15
CONSOLIDATED BALANCE SHEETS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions)
December 31 1995 1994
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1.646.7 $ 1.08
---------- ---------- ----------
---------- ---------- ----------2.7
Trade receivables, less allowance of $7.5 in 1995 and 1994 248.0 245.3
Other receivables 6.2 9.0
Inventories
Finished goods 153.7 134.5
Work in process 32.2 32.1
Raw materials and supplies 110.7 103.1
LIFO reserve (19.8) (14.2)
-------- --------
Total inventories 276.8 255.5
Other current assets 34.2 32.2
-------- --------
Total current assets 571.9 544.7
PROPERTY, PLANT AND EQUIPMENT - AT COST
Machinery and equipment 515.7 430.1
Buildings and other 268.9 246.9
Land 23.8 22.5
-------- --------
808.4 699.5
Less accumulated depreciation 356.6 303.5
-------- --------
Net property, plant and equipment 451.8 396.0
OTHER ASSETS
Excess cost of purchased companies over net assets acquired,
less accumulated amortization of $17.8 in 1995 and $14.4 in 1994 133.6 115.1
Other intangibles, less accumulated amortization of $15.6 in 1995 and $12.5 in 1994 22.2 27.4
Sundry 38.8 36.7
-------- --------
Total other assets 194.6 179.2
-------- --------
TOTAL ASSETS $1,218.3 $1,119.9
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 4.0 $ 3.9
Accounts payable 90.4 89.9
Income taxes 7.3 9.5
Accrued expenses 105.3 96.5
Other current liabilities 19.8 33.1
-------- --------
Total current liabilities 226.8 232.9
LONG-TERM DEBT 191.9 204.9
OTHER LIABILITIES 17.7 14.7
DEFERRED INCOME TAXES 47.8 42.2
SHAREHOLDERS' EQUITY
Capital stock
Preferred stock - authorized, 100,000,000 shares; none issued
Common stock - authorized, 300,000,000 shares of $.01 par value; issued
84,405,384 and 41,608,174 shares in 1995 and 1994, respectively .8 .4
Additional contributed capital 155.0 134.7
Retained earnings 598.0 496.5
Cumulative translation adjustment (5.0) (6.1)
Less treasury stock - at cost (644,539 and 11,065 shares in 1995 and 1994 respectively) (14.7) (.3)
-------- --------
Total shareholders' equity 734.1 625.2
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,218.3 $1,119.9
======== ========
The accompanying notes are an integral part of these financial statements.
16
LEGGETTCONSOLIDATED STATEMENTS OF CASH FLOWS
Leggett & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31
ASSETSPlatt, Incorporated and Subsidiaries
(Dollar amounts in millions)
Year ended December 31 1995 1994 1993 1992
--------- ---------
(DOLLAR AMOUNTS IN
MILLIONS)
Current Assets
OPERATING ACTIVITIES
Net earnings $ 134.9 $ 115.4 $ 85.9
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation 58.0 48.8 39.1
Amortization 9.1 8.1 6.2
Deferred income tax (benefit) expense (.6) (6.6) 8.6
Other (.2) 2.0 (.9)
Other changes, net of effects from
purchases of companies
Decrease (increase) in accounts receivable, net 11.4 (29.1) (9.2)
Increase in inventories (14.8) (22.2) (4.4)
Increase in other current assets (.7) (4.9) (2.9)
Increase in current liabilities 6.1 61.5 23.3
------- ------- -------
Net Cash and cash equivalents..................................................................... $ .4 $ 5.2
Trade receivables, less allowance of $7.2 in 1993 and $7.1 in 1992............................ 194.6 161.2
Other receivables............................................................................. 10.1 10.6
Inventories
Finished goods.............................................................................. 113.3 104.1
Work in process............................................................................. 23.8 22.4
Raw materials............................................................................... 82.2 64.7
LIFO reserve................................................................................ (10.2) (7.4)
--------- ---------
Total inventories......................................................................... 209.1 183.8
Other current assets.......................................................................... 21.4 17.6
--------- ---------
Total current assets...................................................................... 435.6 378.4
Property, Plant and Equipment -- at cost
Machinery and equipment....................................................................... 346.5 280.4
Buildings, leasehold improvements and other................................................... 204.9 179.8
Land.......................................................................................... 19.8 17.8
--------- ---------
571.2 478.0
Less accumulated depreciation and amortization................................................ 258.1 218.3
--------- ---------
NetProvided by Operating Activities 203.2 173.0 145.7
INVESTING ACTIVITIES
Additions to property, plant and equipment......................................................... 313.1 259.7equipment (93.9) (88.5) (54.2)
Purchases of companies, net of cash acquired (28.7) (78.8) (78.0)
Other Assets
Excess cost(.6) .7 2.8
------- ------- -------
Net Cash Used for Investing Activities (123.2) (166.6) (129.4)
FINANCING ACTIVITIES
Additions to debt 62.5 49.1 58.1
Payments on debt (83.2) (29.6) (57.8)
Dividends paid (31.9) (25.4) (21.1)
Sales of purchasedcommon stock 3.0 2.2 1.6
Purchases of common stock (24.5) (1.1) (.1)
Other (1.9) .7 (1.8)
------- ------- -------
Net Cash Used for Financing Activities (76.0) (4.1) (21.1)
------- ------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4.0 2.3 (4.8)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2.7 .4 5.2
------- ------- -------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 6.7 $ 2.7 $ .4
======= ======= =======
SUPPLEMENTAL INFORMATION
Interest paid $ 11.0 $ 9.2 $ 16.7
Income taxes paid 87.4 68.1 45.3
Liabilities assumed of acquired companies over net assets acquired, less accumulated amortization of
$11.4 in 1993 and $9.2 in 1992............................................................... 93.0 78.1
Other intangibles, less accumulated amortization of $11.3 in 1993 and $12.9 in 1992........... 25.7 11.1
Sundry........................................................................................ 34.5 44.7
--------- ---------
Total other assets........................................................................ 153.2 133.9
--------- ---------
TOTAL ASSETS.................................................................................... $ 901.9 $ 772.0
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt.......................................................... $ 1.4 $ 9.5
Accounts payable.............................................................................. 74.1 49.9
Income taxes.................................................................................. 1.6 4.3
Accrued expenses.............................................................................. 65.3 53.4
Other current liabilities..................................................................... 23.8 23.9
--------- ---------
Total current liabilities................................................................. 166.2 141.0
Long-Term Debt.................................................................................. 165.8 147.9
Other Liabilities............................................................................... 11.1 8.2
Deferred Income Taxes........................................................................... 43.2 33.3
Shareholders' Equity
Capital stock
Preferred stock -- authorized, 100,000,000 shares; none issued..............................20.2 40.4 21.8
Common stock -- authorized, 300,000,000 shares of $.01 par value at December 31, 1993 and
100,000,000 shares of $1.00 par value at December 31, 1992; issued 40,325,961 and
39,949,647 shares in 1993 and 1992, respectively........................................... .4 39.9
Additional contributed capital................................................................ 117.3 70.6
Retained earnings............................................................................. 401.0 336.2
Cumulative translation adjustment............................................................. (2.8) (.8)
Less treasuryfor acquired companies 8.2 13.8 2.0
Stock issued for employee stock -- at cost (7,578 and 136,196 shares in 1993 and 1992, respectively)...... (.3) (4.3)
--------- ---------
Total shareholders' equity.................................................................. 515.6 441.6
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...................................................... $ 901.9 $ 772.0
--------- ---------
--------- ---------plans 17.4 8.2 6.6
======= ======= =======
The accompanying notes are an integral part of these financial statements.
17
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Leggett & Platt, Incorporated and Subsidiaries
ADDITIONAL CUMULATIVE TREASURY STOCK
COMMON CONTRIBUTED RETAINED TRANSLATION ---------------------
STOCK CAPITAL EARNINGS ADJUSTMENT COST SHARES
----------- ----------- ----------- ------------- --------- ----------
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)(Dollar amounts in millions, except per share data)
Additional Cumulative Treasury Stock
Common Contributed Retained Translation --------------------
Stock Capital Earnings Adjustment Cost Shares
Balances -- JanuaryBALANCES - JANUARY 1, 1991..................1993 $ 19.439.9 $ 40.570.6 $336.2 $ 262.7(.8) $ .6 $ (6.8) 279,305(4.3) 136,196
Common stock issued, primarily for
employee stock plans (376,314 shares) .2 6.2
Treasury stock sold.......................... .3 5.1 (207,126)issued for acquired companies
and employee stock plans (.3) 5.6 (168,717)
Treasury stock purchased..................... (.6) 18,518purchased, primarily
for employee stock plans (1.6) 40,099
Tax benefit related to stock options......... .1options 1.1
Change in par value of common stock (39.7) 39.7
Translation adjustment....................... .2adjustment (2.0)
Net earnings for the year.................... 40.0year 85.9
Cash dividends declared ($.43.27 per share)..... (15.2)
----------- ----------- ----------- (21.1)
------ ------ -------- ----- --------- ----------
Balances -- December------ --------
BALANCES - DECEMBER 31, 1991................ 19.4 40.9 287.5 .8 (2.3) 90,6971993 .4 117.3 401.0 (2.8) (.3) 7,578
Common stock issued (1,629,297for acquired companies
and employee stock plans (1,282,213 shares)....... 1.6 47.3 17.0
Treasury stock sold.......................... .1 4.0 (149,000)issued for employee stock plans (.1) 2.1 (47,773)
Treasury stock purchased..................... (6.0) 187,824purchased, primarily
for employee stock plans (2.1) 51,260
Tax benefit related to stock options......... 1.2options .5
Translation adjustment (3.3)
Retained earnings of pooled
companies at date of acquisition 5.5
Net earnings for the year 115.4
Cash dividends declared ($.31 per share) (25.4)
------ ------ -------- ----- ------ --------
BALANCES - DECEMBER 31, 1994 .4 134.7 496.5 (6.1) (.3) 11,065
Common stock issued for acquired companies
and employee stock plans (602,264 shares) 22.5
Treasury stock issued for employee stock plans (2.3) 11.4 (372,906)
Treasury stock purchased, primarily for employee
stock plans and to replace shares issued
for purchased companies (25.8) 887,712
Tax benefit related to stock options .5
Additional shares issued in two-for-one stock
split effected in the form of a stock dividend
JuneSeptember 15, 1992 (18,932,2391995 (42,194,946 shares)..................................... 18.9 (18.9) 6,675 .4 (.4) 118,668
Translation adjustment....................... (1.6)adjustment 1.1
Retained earnings of pooled
company at date of acquisition.............................. .6acquisition (1.5)
Net earnings for the year.................... 65.4year 134.9
Cash dividends declared ($.46.38 per share)..... (17.3)
----------- ----------- ----------- (31.9)
------ ------ -------- ----- --------- ----------
Balances -- December------ --------
BALANCES - DECEMBER 31, 1992................ 39.9 70.6 336.2 (.8) (4.3) 136,196
Common stock issued (376,314 shares)......... .2 6.2
Treasury stock sold.......................... (.3) 5.6 (168,745)
Treasury stock purchased..................... (1.6) 40,127
Change in par value of
common stock................................ (39.7) 39.7
Tax benefit related to stock options......... 1.1
Translation adjustment....................... (2.0)
Net earnings for the year.................... 85.9
Cash dividends declared ($.54 per share)..... (21.1)
----------- ----------- ----------- ----- --------- ----------
Balances -- December 31, 1993................1995 $ .4 $ 117.3 $ 401.0 $ (2.8) $ (.3) 7,578
----------- ----------- ----------- ----- --------- ----------
----------- ----------- ----------- ----- --------- ----------.8 $155.0 $598.0 $(5.0) $(14.7) 644,539
====== ====== ======== ===== ====== ========
The accompanying notes are an integral part of these financial statements.
18
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
--------- --------- ---------
(DOLLAR AMOUNTS IN MILLIONS)
Operating Activities
Net earnings.................................................................... $ 85.9 $ 65.4 $ 40.0
Adjustments to reconcile net earnings to net cash provided by operating
activities
Depreciation and amortization................................................. 45.3 42.6 41.4
LIFO expense (income)......................................................... 2.4 (1.1) (.1)
Deferred income taxes......................................................... 8.6 (2.4) 3.3
Pension income from defined benefit plans..................................... (2.0) (2.1) (1.2)
(Gain) loss on sale of operating assets....................................... (.7) 1.5 .4
Other......................................................................... 1.8 2.2 (1.4)
Other changes, net of effects from purchases of companies
(Increase) decrease in accounts receivable, net............................. (9.2) (24.1) 17.3
(Increase) decrease in inventories at FIFO cost............................. (6.8) (7.2) 21.0
(Increase) decrease in other current assets................................. (2.9) .8 2.5
Increase (decrease) in accounts payable, accrued expenses and other current
liabilities................................................................ 23.3 24.8 (20.2)
--------- --------- ---------
Net Cash Provided by Operating Activities................................... 145.7 100.4 103.0
Investing Activities
Additions to property, plant and equipment...................................... (54.2) (35.8) (36.5)
Proceeds from sales of property, plant and equipment............................ 2.8 9.9 4.8
Purchases of companies, net of cash acquired.................................... (78.0) (5.8) (9.5)
Increase in other assets........................................................ -- (3.5) (.5)
--------- --------- ---------
Net Cash Used for Investing Activities...................................... (129.4) (35.2) (41.7)
Financing Activities
Additions to debt............................................................... 58.1 35.9 2.3
Payments on debt................................................................ (57.8) (85.4) (39.0)
Dividends paid.................................................................. (21.1) (21.1) (15.0)
Sales of common stock........................................................... 1.6 1.5 .4
Repurchases of common stock..................................................... (.1) (3.1) --
Other........................................................................... (1.8) (.4) (2.3)
--------- --------- ---------
Net Cash Used for Financing Activities...................................... (21.1) (72.6) (53.6)
--------- --------- ---------
(Decrease) Increase in Cash and Cash Equivalents............................ (4.8) (7.4) 7.7
Cash and Cash Equivalents -- Beginning of Year.................................... 5.2 12.6 4.9
--------- --------- ---------
Cash and Cash Equivalents -- End of Year.......................................... $ .4 $ 5.2 $ 12.6
--------- --------- ---------
--------- --------- ---------
Supplemental Information
Interest paid..................................................................... $ 16.7 $ 12.7 $ 19.9
Income taxes paid................................................................. 45.3 43.6 23.8
Liabilities assumed of purchased companies........................................ 21.8 -- .7
Common stock issued for conversion of debentures.................................. -- 39.9 --
Long-term notes received from sales of assets..................................... -- -- 10.2
--------- --------- ---------
--------- --------- ---------
The accompanying notes are an integral part of these financial statements.
19
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
DECEMBERLeggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
December 31, 1995, 1994 and 1993
1992 AND 1991
A -- SUMMARYA-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Leggett & Platt, Incorporated and its majority-owned
subsidiaries (the Company). The Company's previously issued financial statements
have been restated to reflect pooling of interests acquisitions as discussed in
Note B. All significant intercompany transactions and
accounts have been eliminated in consolidation.
CASH EQUIVALENTS: Cash equivalents include cash in excess of daily
requirements which is invested in various financial instruments with original
maturities of three months or less.
INVENTORIES: All inventories are stated at the lower of cost or market. Cost
includes materials, labor and production overhead. Cost is determined by the
last-in, first-out (LIFO) method for approximately 70% of the inventories at
December 31, 19931995 and 1992.1994. The first-in, first-out (FIFO) method is used for
the remainder. The FIFO cost of inventories at December 31, 19931995 and 19921994
approximated replacement cost.
DEPRECIATION, AMORTIZATION AND AMORTIZATION:ASSET REALIZATION: Property, plant and
equipment and other
intangibles are depreciated or amortized over their estimated lives, principally by the straight-line method. The rates of
depreciation range from 8.3% to 25% for machinery and equipment, 2.5% to 6.7%
for buildings and 12.5% to 33% for other items. Accelerated methods are used
for tax purposes. The excess cost of purchased companies over net assets
acquired is amortized by the straight-line method over forty years. Other
intangibles are amortized by the straight-line method over their estimated
lives. Assets subject to periodic depreciation or amortization are evaluated
for probable realization, and appropriate adjustment of their carrying value is
made when realization is not assured. The excess cost of purchased companies
over net assets acquired is evaluated using estimated undiscounted cash flows
over the remaining amortization period.
COMPUTATIONS OF EARNINGS PER SHARE: Earnings per share is based on the
weighted average number of common and common equivalent shares outstanding.
Common stock equivalents result from the assumed issuance of shares under stock
option plans.
CONCENTRATION OF CREDIT RISK:RISKS, EXPOSURES AND FINANCIAL INSTRUMENTS: The
Company specializes in manufacturing, marketing, and distributing components and
other related products for the furnishings industry and diversified markets.
The Company's operations are principally in the United States, although the
Company also has subsidiaries in Canada and Europe.
The Company performs ongoing credit evaluations of its customers' financial
conditions and, generally, requires no collateral from its customers, some of
which are highly leveraged. The Company maintains allowances for potential
credit losses and such losses have generally have been within management's
expectations.
FAIR VALUE OF FINANCIAL INSTRUMENTS:From time to time, the Company will enter into forward exchange contracts to
hedge equipment purchase commitments in foreign currencies. The amounts
outstanding under the forward contracts at any point in time are not significant
to the Company. The Company has minimal continuing exposures to other foreign
currency transactions and interest rate fluctuations, none of which have been
hedged by the use of derivative instruments.
The carrying value of the Company'scash and short-term financial instruments approximates
market value.
ACCOUNTING STANDARDS ADOPTED: During 1993,fair value due to the short maturity of those instruments. The carrying value
of long-term debt approximates fair value due to the use of variable interest
rates and fixed rate debt which approximates current interest rates.
OTHER RISKS: The Company obtains insurance for worker's compensation,
automobile, product and general liability, property loss and medical claims.
However, the Company adopted three new
statements issuedhas elected to retain a significant portion of expected
losses through the use of deductibles. Provisions for losses expected under
these programs are recorded based upon the Company's estimates of the aggregate
liability for claims incurred. These estimates utilize the Company's prior
experience and actuarial assumptions that are provided by the Financial Accounting Standards Board. TheseCompany's
insurance carrier.
ESTIMATES: The preparation of financial statements were: 1) Statementin conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of Financial Accounting Standards (SFAS) No. 106, "Employers'
Accountingassets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
INCOME TAXES: The Company provides for Postretirement Benefits Other Than Pensions;" 2) SFAS No. 109,
"Accounting for Income Taxes;"taxes on undistributed earnings of
subsidiaries where appropriate. The tax effect of most such distributions would
be significantly offset by available foreign tax credits.
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and 3) SFAS No. 112, "Employers' Accounting for
Postemployment Benefits." The adoptionSubsidiaries
B-STOCK SPLIT
On September 15, 1995, the Company distributed a two-for-one stock split in
the form of a stock dividend. All references to the number of shares and per
share amounts have been restated to reflect the split, except on the
Consolidated Statements of Changes in Shareholders' Equity. In these
statements, didshares issued and purchased prior to September 15, 1995 are
reflected on a pre-split basis.
C-ACQUISITIONS
During 1995, the Company acquired the assets of seven companies that primarily
manufacture and distribute components to the furnishings industry. These
transactions, accounted for as purchases, resulted in the use of $28.7 in cash,
net of cash acquired, and 354,448 shares of common stock. The Company also
issued 325,000 shares of common stock to acquire a business in a transaction
accounted for as a pooling of interests. This company manufactures and
distributes formed wire products to the furnishings industry. The Company
elected not have a
materialto restate its financial statements as the effect onof the Company's financial position orpooling was
not material. Pro forma results of operations.
RECLASSIFICATIONS: Certain reclassifications have been madeoperations for the twelve months ended
December 31, 1995 and 1994 are not materially different from the amounts
reflected in the accompanying financial statements.
During 1994, the Company acquired certain assets of eight companies in
exchange for $78.8 in cash, net of cash acquired, and 44,756 shares of common
stock in transactions accounted for as purchases. These companies primarily
specialize in manufacturing and distributing components and certain other
products to the prior
years' consolidatedfurnishings industry. The Company also issued 1,156,872 shares
of common stock to acquire two companies during the year in transactions
accounted for as poolings of interests. The Company elected not to restate its
financial statements to conformas the effect of the poolings was not material. The pooled
companies specialize in manufacturing and distributing point-of-purchase store
displays and other formed wire products to the 1993 presentation.
B -- ACQUISITIONSfurnishings and diversified
industries.
In September 1993, the Company issued 1,579,3543,158,708 shares of common stock to
acquire Hanes Holding Company (Hanes) in a transaction accounted for as a
pooling of interests. Options to purchase an additional 45,743 shares of common
stock were also extended by the Company in substitution for previously existing
options. Hanes' business consists of converting and distributing
woven and nonwoven construction fabrics, primarily in the furnishings industry.
In addition, Hanes is a 20
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B -- ACQUISITIONS (CONTINUED)
commission dye/finisher of non-fashion fabrics for the
furnishings and apparel industries. In another pooling of interests
transaction, the Company issued 68,788137,576 shares of common stock to acquire a
company whose business is manufacturing furniture components for the furnishings
industry. Previously
issuedPrior year financial statements have beenwere restated to reflect the poolings. Separate
resultsfor these poolings of
operations for the years ended December 31, 1993, 1992 and 1991 are
as follows:
1993 1992 1991
---------- ---------- ----------
Net sales:
Leggett & Platt................................................ $ 1,350.8 $ 1,170.5 $ 1,081.8
Pooled Companies............................................... 175.9 144.5 139.6
---------- ---------- ----------
Combined................................................... $ 1,526.7 $ 1,315.0 $ 1,221.4
---------- ---------- ----------
---------- ---------- ----------
Net earnings:
Leggett & Platt................................................ $ 82.8 $ 62.5 $ 39.4
Pooled Companies............................................... 3.1 2.9 .6
---------- ---------- ----------
Combined................................................... $ 85.9 $ 65.4 $ 40.0
---------- ---------- ----------
---------- ---------- ----------
interests.
In September 1993, the Company acquired VWR Textiles & Supplies Inc. (through
Hanes) which converts and distributes construction fabrics and manufactures and
distributes other soft goods components to the furnishings industry. The
purchase price of this acquisition was approximately $26.0.$26. Also in 1993, the
Company acquired full ownership of several wire drawing mills which previously
had been jointly owned. This transaction involved $33.0$33 in cash and the
assumption of approximately $3.6 of long termlong-term debt. In addition, the Company
acquired several smaller companies during 1993 which primarily manufacture and
distribute products to the furnishings industry.
The following unaudited pro
forma information shows the results of operations for the years ended December
31, 1993 and 1992 as though the 1993 acquisitions accounted for as purchases had
occurred on January 1 of each year presented. These pro forma amounts reflect
purchase accounting adjustments, interest on incremental borrowings and the tax
effects thereof. This pro forma financial information is not necessarily
indicative of either results of operations that would have occurred had the
purchases been made on January 1 of each year or of future results of the
combined companies.
1993 1992
---------- ----------
Net sales.................................................................... $ 1,620.5 $ 1,471.5
Net earnings................................................................. 88.6 69.6
Earnings per share........................................................... 2.15 1.75
During 1992, the Company acquired the assets of one small company that
primarily manufactures bedding and furniture components for the furnishings
industry. The purchase price of this acquisition was approximately $5.8.
Assuming this acquisition had occurred at the beginning of the year, it would
not have had a material impact on net sales, net earnings or earnings per share.
Also during 1992, the Company acquired a business accounted for as a pooling
of interests. The business primarily manufactures bedding and furniture
components for the furnishings industry. In exchange for all of the outstanding
capital stock of the business, the Company issued 100,903 shares of its common
stock. The Company elected not to restate prior year's financial statements as
the effect was immaterial.
During 1991, the Company acquired the assets of two small companies that
primarily manufacture bedding and furniture components for the furnishings
industry. The purchase price of these acquisitions was approximately $10.0.
Assuming these acquisitions had occurred at the beginning of the year, they
would not have had a material impact on net sales, net earnings or earnings per
share.
21
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B -- ACQUISITIONS (CONTINUED)
The above acquisitions, except for the 1993 and 1992 poolings, have been
accounted for as purchases, and, where applicable, the excess of the total
acquisition cost over the fair value of the net assets acquired is being
amortized by the straight-line method over forty years. The results of operations of these acquired companies, sinceexcept the dates of acquisition1993
poolings, have been included in the consolidated financial statements.
The purchase prices as originally reported representstatements since the
initial amountsdates of cashacquisition.
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and common stock of the Company issued at the time of the acquisitions.
Some purchase agreements also contain provisions for additional payments if
certain minimum earnings requirements are met. All such provisions expired
during 1993. Amounts earned under the terms of the agreements are recorded as
increases in the excess of the total acquisition cost over the fair value of the
net assets acquired. Such additional payments were approximately $6.4 and $2.7
during 1993 and 1992, respectively.
C -- ACCRUEDSubsidiaries
D-ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at December 31 consist of
the following:
1993 1992
--------- ---------1995 1994
Accrued expenses
Wages and commissions payable.......................................................payable $ 19.127.7 $ 15.5
Self27.7
Worker's compensation, medical, auto
and product liability insurance costs................................................................ 22.0 16.0
Other............................................................................... 24.2 21.9
--------- ---------36.2 33.0
Sales promotions 12.2 10.4
Other 29.2 25.4
------ ------
$105.3 $ 65.3 $ 53.4
--------- ---------
--------- ---------96.5
====== ======
Other current liabilities
Outstanding checks in excess of book balances.......................................balances $ 13.114.5 $ 13.9
Other............................................................................... 10.7 10.0
--------- ---------26.1
Other 5.3 7.0
------ ------
$ 23.819.8 $ 23.9
--------- ---------
--------- ---------33.1
====== ======
D -- LONG-TERME-LONG-TERM DEBT
Long-term debt, weighted average interest rates and due dates at
December 31 consists of the following:are as follows:
1993 1992
--------- ---------1995 1994
Medium-term notes, fixed interest rates of 6.5% and 6.4%
for 1995 and 1994, respectively, due dates through 2008 $127.5 $103.5
Revolving credit agreements, with floatingvariable interest rates ranging from 3% to 5%..... $ 43.5 $ 35.4of
6.5% for 1994 - 43.3
Commercial paper, variable interest rates of
6.0% and 6.1% for 1995 and 1994, respectively,
due dates in 1996 and 1995 17.5 15.0
Industrial development bonds, with floatingvariable interest rates ranging from 2% to 6%of
5.5% and 6.1% for 1995 and 1994, respectively,
due dates through 2030............................................................2030 34.4 32.3 38.7
Industrial development bonds, with fixed interest rates ranging from 7% to 8%of
6.9% for 1995 and 1994, due dates through 2009............................................................ 7.6 .7
Medium-term notes with fixed interest rates ranging from 5% to 6% and due dates
through 2008...................................................................... 78.5 28.5
Notes to insurance company with fixed interest rates ranging from 12% to 16%....... -- 49.12024 5.2 5.5
Other, partially secured........................................................... 5.3 5.0
--------- ---------
167.2 157.4secured 11.3 9.2
------ ------
195.9 208.8
Less current maturities............................................................ 1.4 9.5
--------- ---------
$ 165.8 $ 147.9
--------- ---------
--------- ---------maturities 4.0 3.9
------ ------
$191.9 $204.9
====== ======
2221
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
D -- LONG-TERM(Continued)
Leggett & Platt, Incorporated and Subsidiaries
E-LONG-TERM DEBT (CONTINUED)
The revolving credit agreements provide for a maximum line of credit of
$160.0.$200. For any revolving credit agreement, the Company may elect to pay interest
based on 1) the bank's base lending rate, 2) LIBOR, 3) an adjusted certificate
of deposit rate, or 4) the money market rate, as specified in the revolving
agreements. AnyCertain agreements contain provisions under which outstanding
balances at the end of the third year of
the revolving credit agreements may be converted into term loans payable
in ten equal semi-annual installments. CommitmentThese agreements provide for annual
commitment fees during the revolving agreement period areof 3/16 of 1% per annum of the
unused credit line, payable on a quarterly basis. Other agreements contain no
term loan provisions and will terminate at the end of five years at which time
all outstanding balances will become due. Annual facility fees on these
agreements are 1/10 of 1% of the total credit line, payable on a quarterly
basis.
Commercial paper is classified as long-term debt since the Company intends
to refinance it on a long-term basis either through continued issuance or unused
credit available under the revolving credit agreements.
The revolving credit agreements and certain other long-term debt contain
restrictive covenants which, among other restrictions, limit the amount of
additional debt, require working capital to be maintained at specified amounts
and restrict payments of dividends. Unrestricted retained earnings available for
dividends at December 31, 19931995 were approximately $137.1.$205.9.
Maturities of long-term debt for each of the five years following 19931995 are:
YEAR ENDED DECEMBERYear ended December 31
- -------------------------------------------------------------------------------------
1994.................................................................................1996 $ 1.4
1995................................................................................. 6.8
1996................................................................................. 12.4
1997................................................................................. 34.7
1998................................................................................. 21.84.0
1997 26.4
1998 13.7
1999 11.3
2000 38.9
E -- LEASEF-LEASE OBLIGATIONS
The Company conducts certain of its operations in leased premises and also
leases most of its automotive and trucking equipment and some other assets.
Terms of the leases, including purchase options, renewals and maintenance costs,
vary by lease.
Total rental expense entering into the determination of results of
operations was approximately$18.7, $18 and $17.4 $16.8 and $17.0 for the years ended December 31, 1993, 19921995, 1994
and 1991,1993, respectively.
Future minimum rental commitments for all long-term noncancelable operating
leases are as follows:
YEAR ENDED DECEMBERYear ended December 31
- -------------------------------------------------------------------------------------
1994................................................................................. $ 6.6
1995................................................................................. 4.3
1996................................................................................. 2.5
1997.................................................................................1996 $10.8
1997 7.6
1998 4.7
1999 2.8
2000 1.3
Later years 1.5
1998................................................................................. .5
Later years.......................................................................... .5
---------
$ 15.9
---------
--------------
$28.7
=====
The above lease obligations expire at various dates through 2010. Certain
leases contain renewal and/or purchase options. Aggregate rental commitments
above include renewal amounts where it is the intention of the Company to renew
the lease.
F -- CAPITAL22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
G-CAPITAL STOCK
At December 31, 1993,1995, the Company had 1,724,9736,464,552 common shares authorized
for issuance under stock option plans. AllGenerally, options are granted at not
less than quoted market value on the date of grant and generally become exercisable in
varying installments, beginning 6 to 18 months after the date of grant. 23
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
F -- CAPITAL STOCK (CONTINUED)However,
options have been granted at less than market value to replace existing options
of an acquired company or in lieu of compensation. Options outstanding at
December 31, 1995 that were granted at less than market value were 491,114.
Options exercisable were 1,656,270, 1,077,572 and 621,998 at December 31, 1995,
1994 and 1993, respectively.
Other data regarding the Company's stock options is summarized below:
PER
SHARE
SHARES PRICE TOTAL
----------- --------- ---------Per
share
Shares price Total
Outstanding at January 1, 1992...................................................... 953,6911993 3,064,840 $ 7-18 $ 11.0
Granted............................................................ 959,377 19-23 21.8
Exercised.......................................................... (375,848) 8-17 (4.1)
Forfeited.......................................................... (4,800) 11-23 (.1)
-----------3-12 $28.6
Granted 340,382 16-22 6.8
Exercised (508,264) 3-12 (3.1)
Forfeited (59,786) 5-21 (.6)
--------- --------------- -----
Outstanding at December 31, 1992.................................................... 1,532,420 7-23 28.6
Granted............................................................ 170,191 33-43 6.8
Exercised.......................................................... (254,132) 7-23 (3.1)
Forfeited.......................................................... (29,893) 11-42 (.6)
-----------1993 2,837,172 3-22 31.7
Granted 368,862 1-22 3.3
Exercised (320,064) 1-12 (2.5)
Forfeited (104,714) 7-21 (1.4)
--------- --------------- -----
Outstanding at December 31, 1993.................................................... 1,418,586 $ 7-43 $ 31.7
-----------1994 2,781,256 1-22 31.1
Granted 344,800 1-25 3.2
Exercised (418,533) 1-22 (4.4)
Forfeited (75,134) 11-22 (1.2)
--------- ---------
----------- --------- ---------
Exercisable------ -----
Outstanding at December 31, 1993.................................................... 310,999
-----------
-----------1995 2,632,389 $ 1-25 $28.7
=========== ====== =====
The Company has also authorized shares for issuance in connection with
certain employee stock benefit plans discussed in Note G.H.
In 1993, the Company's shareholders approved an amendment to the Company's
Restated Articles of Incorporation reducing the par value of Common Stock to
$.01 from $1. The amendment provided that the stated capital of the Company
would not be affected as of the date of the amendment. Accordingly, stated
capital of the Company exceeds the amount reported as common stock in the
financial statements by approximately $39.
In 1989, the Company declared a dividend distribution of one preferred
stock purchase right (a Right) for each share of common stock. The Rights are
attached to and traded with the Company's common stock. The Rights may only
become exercisable under certain circumstances involving actual or potential
acquisitions of the Company's common stock. Depending upon the circumstances, if
the Rights become exercisable, the holder may be entitled to purchase shares of
Series A junior preferred stock of the Company, shares of the Company's common
stock or shares of common stock of the acquiring entity. The Rights remain in
existence until February 15, 1999, unless they are exercised, exchanged or
redeemed at an earlier date.
On May 12, 1993 the Company's shareholders approved an amendment to the
Company's Restated Articles of Incorporation increasing authorized Common Stock
to 300,000,000 shares from 100,000,000 shares23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and reducing the par value of
Common Stock to $.01 from $1.00. The amendment provided that the stated capital
of the Company would not be affected as of the date of the amendment.
Accordingly, stated capital of the Company exceeds the amount reported as common
stock in the financial statements by approximately $39.0.
G -- EMPLOYEESubsidiaries
H-EMPLOYEE BENEFIT PLANS
The Company sponsors contributory and non-contributory pension and
retirement plans. Substantially all employees, other than union employees
covered by multiemployer plans under collective bargaining agreements, are
eligible to participate in the plans. Retirement benefits under the contributory
plans are based on career average earnings. Retirement benefits under the non-contributorynon-
contributory plans are based on years of service, employees' average
compensation and social security benefits. It is the Company's policy to fund
actuarially determined costs as accrued.
24
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G -- EMPLOYEE BENEFIT PLANS (CONTINUED)
Information at December 31, 1993, 19921995, 1994 and 19911993 as to the funded status of
Company sponsored defined benefit plans, net pension income from the plans for
the years then ended and weighted average assumptions used in the calculations
are as follows:
1995 1994 1993 1992 1991
----------- ----------- -----------
Funded Status
Actuarial present value
of benefit obligations
Vested benefits............................................. $ (46.3) $ (37.2) $ (31.9)benefits $(58.8) $(50.5) $(46.3)
Nonvested benefits..........................................benefits (.6) (.4) (.7)
----------- ----------- -----------(.6) (.6)
------ ------ ------
Accumulated benefit obligations...............................obligations (59.4) (51.1) (46.9) (37.6) (32.6)
Provision for future
compensation increases...................increases (3.1) (3.6) (3.3)
(3.7) (5.4)
----------- ----------- ----------------- ------ ------
Projected benefit obligations.................................obligations (62.5) (54.7) (50.2) (41.3) (38.0)
Plan assets at fair value.....................................value 87.1 75.2 78.1
65.7 58.7
----------- ----------- ----------------- ------ ------
Plan assets in excess of projected
benefit obligations........obligations 24.6 20.5 27.9 24.4 20.7
Unrecognized net experience gain..............................gain (3.4) (.4) (9.6) (7.4) (5.2)
Unrecognized net transition asset.............................asset (3.4) (4.1) (4.6)
(5.3) (5.9)
----------- ----------- ----------------- ------ ------
Prepaid pension costs included
in other assets................assets $ 17.8 $ 16.0 $ 13.7
$ 11.7 $ 9.6
----------- ----------- -----------
----------- ----------- -----------====== ====== ======
Components of Pension Income (Expense)
Service cost..................................................cost $ (.8) $ (1.3) $ (.9)
$ (.4) $ (.5)
Interest cost.................................................cost (4.1) (3.5) (3.3) (3.0) (2.8)
Actual return on plan assets..................................assets 12.5 (1.9) 12.8 6.9 13.6
Net amortization and deferral.................................deferral (5.8) 9.0 (6.6)
(1.4) (9.1)
----------- ----------- ----------------- ------ ------
Net pension income from
defined benefit plans.................plans $ 1.8 $ 2.3 $ 2.0
$ 2.1 $ 1.2
----------- ----------- -----------
----------- ----------- -----------====== ====== ======
Weighted Average Assumptions
Discount rate.................................................rate 7.25% 8.36% 8.56%7.50% 7.25%
Rate of increase in
compensation levels.......................levels 5.18% 5.17% 5.14% 5.17% 5.15%
Expected long-term rate of
return on plan assets..............assets 8.00% 8.00% 8.37%
----------- ----------- -----------
----------- ----------- -----------8.00%
====== ====== ======
24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
H-EMPLOYEE BENEFIT PLANS (CONTINUED)
Plan assets are invested in a diversified portfolio of equity, debt and
government securities, including 294,000588,000 shares of the Company's common stock at
December 31, 1993.1995.
Contributions to union sponsored, multiemployer pension plans were $.2 $.2in
1995, 1994 and $.4 in 1993, 1992 and 1991, respectively.1993. These plans are not administered by the Company and
contributions are determined in accordance with provisions of negotiated labor
contracts. As of 1993,1995, the actuarially computed values of vested benefits for
these plans were equal to or less than the net assets of the plans. Therefore,
the Company would have no withdrawal liability. However, the Company has no
present intention of withdrawing from any of these plans, nor has the Company
been informed that there is any intention to terminate such plans.
Net pension income, (expense), including Company sponsored defined benefit plans,
multiemployer plans and other plans, was $.2, $.9 and $.7 $.8in 1995, 1994 and
$(.4) in 1993, 1992
and 1991, respectively.
The Company also has a contributory stock purchase/stock bonus plan (SPSB
Plan), a non-qualified executive stock purchase program (ESPP) and an employees'
discount stock plan (DSP). The SPSB Plan provides Company pre-tax contributions
of 50% of the amount of employee contributions. The ESPP provides cash payments
of 50% of the employees' contributions, along with an additional payment to
assist employees in paying taxes on the cash payments. TheseTo the extent possible,
contributions to the ESPP are invested in the Company's common stock through the
DSP. In addition, the Company matches its
25
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G -- EMPLOYEE BENEFIT PLANS (CONTINUED) contributions when certain
profitability levels, as defined in the SPSB Plan and the ESPP, have been
attained. The Company's total contributions to the SPSB Plan and the ESPP were
$4.3, $3.3 and $2.5 $2.2for 1995, 1994 and $2.0 for 1993, 1992 and 1991, respectively.
Under the DSP, eligible employees may purchase a maximum of 4,000,0008,000,000
shares of Company common stock. The purchase price per share is 85% of the
closing market price on the last business day of each month. Shares purchased
under the DSP were 181,306, 237,713506,613, 415,408 and 267,212362,612 during 1993, 19921995, 1994 and 1991,1993,
respectively. Purchase prices ranged from $12$15 to $43$21 per share. Since inception
of the DSP in 1982, a total of 2,120,4135,162,847 shares have been purchased by
employees.
H -- INCOMEI-INCOME TAXES
The components of earnings before income taxes are as follows:
YEAR ENDED DECEMBERYear ended December 31 -------------------------------1995 1994 1993 1992 1991
--------- --------- ---------
Domestic.................................................................. $ 128.7 $ 97.6 $ 60.9
Foreign...................................................................Domestic $198.9 $172.7 $128.7
Foreign 21.8 16.8 12.3
8.8 5.1
--------- --------- ---------
$ 141.0 $ 106.4 $ 66.0
--------- --------- ---------
--------- --------- ---------
------ ------ ------
$220.7 $189.5 $141.0
====== ====== ======
Income tax expense is comprised of the following components:
YEAR ENDED DECEMBERYear ended December 31 -------------------------------1995 1994 1993
1992 1991
--------- --------- ---------
Current
Federal....................................................................Federal $ 69.5 $ 63.2 $ 34.5
$ 31.7 $ 17.7
State and local............................................................local 9.5 10.9 7.4
7.7 3.1
Foreign....................................................................Foreign 7.4 6.6 4.6
4.0 1.9
--------- --------- --------------- ------ ------
86.4 80.7 46.5
43.4 22.7
Deferred
Federal....................................................................Federal (2.5) (6.2) 7.2 (1.6) 2.8
State and local............................................................local 1.3 .1 1.4
(.4) .4
Foreign.................................................................... -- (.4) .1
--------- --------- ---------Foreign .6 (.5) -
------ ------ ------
(.6) (6.6) 8.6
(2.4) 3.3
--------- --------- --------------- ------ ------
$ 85.8 $ 74.1 $ 55.1
$ 41.0 $ 26.0
--------- --------- ---------
--------- --------- ---------====== ====== ======
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
I-INCOME TAXES (CONTINUED)
Deferred income taxes are provided for the temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities. The major temporary differences that give rise to deferred tax
assets or liabilities at December 31, 19931995 and 19921994 are as follows:
DECEMBERDecember 31 --------------------
1993 1992
--------- ---------1995 1994
Property, plant and equipment....................................................... $ (31.6) $ (29.2)equipment $(34.1) $(32.6)
Accrued expenses.................................................................... 14.4 9.5expenses 30.6 23.0
Prepaid pension cost................................................................ (5.4)cost (6.9) (6.1)
Intangible assets (3.6) (4.6)
Intangible assets................................................................... (7.7) --
Other, net.......................................................................... (1.0) 1.8
--------- ---------
$ (31.3) $ (22.5)
--------- ---------
--------- ---------net (11.3) (4.3)
------ ------
$(25.3) $(24.6)
====== ======
26
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
H -- INCOME TAXES (CONTINUED)
Deferred tax assets and liabilities included in the consolidated balance
sheetssheet are as follows:
DECEMBERDecember 31 --------------------
1993 1992
--------- ---------1995 1994
Other current assets................................................................assets $ 11.922.5 $ 10.817.6
Deferred income taxes............................................................... (43.2) (33.3)
--------- ---------
$ (31.3) $ (22.5)
--------- ---------
--------- ---------taxes (47.8) (42.2)
------ ------
$(25.3) $(24.6)
====== ======
Income tax expense, as a percentage of earnings before income taxes,
differs from the statutory federal income tax rate as follows:
YEAR ENDED DECEMBERYear ended December 31 -------------------------------------1995 1994 1993 1992 1991
----------- ----------- -----------
Statutory federal income tax rate.................................rate 35.0% 34.0% 34.0%35.0% 35.0%
Increases (decreases) in rate resulting from
State taxes, net of federal benefit.............................benefit 3.4 3.8 4.0
4.5 3.5
Restructuring benefit........................................... -- (1.8) --
Non-deductible expenses, primarily goodwill..................... .7 .9 1.3
Other........................................................... (.6) .9 .6
--- --- ---Other .5 .3 .1
---- ---- ----
Effective tax rate................................................rate 38.9% 39.1% 38.5% 39.4%
--- --- ---
--- --- ---39.1%
==== ==== ====
Tax benefits of approximately $2.0 associated with the Company's
restructuring charge were not recognized during 1990. These tax benefits became
available during 199226
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and were recognized accordingly.
I -- INDUSTRYSubsidiaries
J-INDUSTRY SEGMENT INFORMATION
The Company's operations principally consist of the manufacturing, ofmarketing
and distributing components and related finished products for the furnishings
industry. In addition, the Company supplies a diversified group of industries
with products which are similar in manufacturing technology to its furnishings
operations. Other than furnishings, no industry segment is significant.
The Company's products are sold primarily through its own sales personnel to
customers in all states of the United States. Foreign sales are a minor portion
of the Company's business. No single customer accounts for as much as 10% of
sales.
Operating profit is determined by deducting from net sales the cost of
goods sold and the selling, distribution, administrative and other expenses
attributable to the segment operations. Corporate expenses not allocated to the
segments include corporate general and administrative expenses, interest expense
and certain other income and deduction items which are incidental to the
Company's operations. Capital expenditures, as defined herein, include amounts
relating to acquisitions as well as internal expenditures. The identifiable
assets of industry segments are those used in the Company's 27
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
I -- INDUSTRY SEGMENT INFORMATION (CONTINUED)
operations of each
segment. Corporate identifiable assets include cash, land, buildings and
equipment used in conjunction with corporate activities and sundry assets.
Financial information by segment is as follows:
YEAR ENDED DECEMBERFurnishings
Year ended December 31 ---------------------------------------------------
FURNISHINGS
PRODUCTS DIVERSIFIED CORPORATE CONSOLIDATED
----------- ----------- ----------- ------------Products Diversified Corporate Consolidated
1995
Net sales $1,558.1 $501.2 $ - $2,059.3
Operating profit 195.1 50.5 (24.9) 220.7
Capital expenditures 86.0 22.8 4.2 113.0
Depreciation and amortization expense 51.2 13.4 2.5 67.1
Identifiable assets 935.5 234.8 48.0 1,218.3
1994
Net sales $1,398.2 $459.9 $ - $1,858.1
Operating profit 153.4 54.7 (18.6) 189.5
Capital expenditures 91.5 30.1 3.9 125.5
Depreciation and amortization expense 42.8 12.2 1.9 56.9
Identifiable assets 834.2 244.6 41.1 1,119.9
1993
Net sales......................................................sales $1,195.8 $330.9 $ 1,147.8 $ 378.9 $ -- $ 1,526.7- $1,526.7
Operating profit............................................... 126.8 36.1profit 129.0 33.9 (21.9) 141.0
Capital expenditures........................................... 63.3 22.0expenditures 68.4 16.9 3.0 88.3
Depreciation and amortization expense.......................... 35.3 8.6expense 35.9 8.0 1.4 45.3
Identifiable assets............................................ 684.3 177.9assets 710.8 151.4 39.7 901.9
1992
Net sales...................................................... $ 1,014.1 $ 300.9 $ -- $ 1,315.0
Operating profit............................................... 103.8 27.8 (25.2) 106.4
Capital expenditures........................................... 31.2 6.4 3.0 40.6
Depreciation and amortization expense.......................... 33.5 7.4 1.7 42.6
Identifiable assets............................................ 576.9 140.4 54.7 772.0
1991
Net sales...................................................... $ 942.7 $ 278.7 $ -- $ 1,221.4
Operating profit............................................... 73.6 22.1 (29.7) 66.0
Capital expenditures........................................... 29.9 5.2 7.7 42.8
Depreciation and amortization expense.......................... 31.8 8.1 1.5 41.4
Identifiable assets............................................ 555.2 125.8 65.7 746.7
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
J -- CONTINGENCIES27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
K-CONTINGENCIES
From time to time, the Company is involved in proceedings related to
environmental matters. In one instance, the United States Environmental
Protection Agency ("EPA") has directed(EPA) ordered one of the Company's subsidiaries to investigate
potential releases into the environment and, if necessary, to perform corrective
action. The subsidiary successfully appealed the EPA's actionorder. On June 27,
1994, the EPA indicated it planned to issue a new, similar order. The
subsidiary, the EPA and the outcome cannot be reasonably predicted. CostsFlorida Department of Environmental Protection
(FDEP) are negotiating an agreement to investigate and, if necessary, take
corrective action to resolve the dispute. Estimated costs to perform an agreed
upon investigation and any related corrective actions are not material and have
been provided for in the actions directed byfinancial statements as of December 31, 1995.
If current negotiations with the EPA and the FDEP are unsuccessful, and the
EPA issues a new order, the subsidiary expects it would appeal the new order.
If this appeal is unsuccessful, the costs to perform any required investigation
and, if the outcome is unfavorable,necessary, corrective action cannot be reasonably estimated. One-half
of any such costs, including the costs of voluntary actions, would be reimbursed to
the Company under a contractual obligation of a former joint owner of the
subsidiary. No provision for the costs of performing investigation and
corrective action if ultimately required, havebeyond any agreed upon investigation and remediation mentioned
above has been recorded in the Company's financial statements. If any such
additional investigation and corrective action is required, management believes
the possibility of
incurring unreimbursed costs, with a material adverse effect on the Company's consolidated
financial condition or results of operations is remote.
28
REPORT OF INDEPENDENT ACCOUNTANTS
Leggett & Platt, Incorporated and Subsidiaries
To the Board of Directors and Shareholders of Leggett & Platt, Incorporated:
In our opinion, the accompanying consolidated balance sheets andfinancial statements listed in the related
consolidated statements of earnings, changes in shareholders' equity and of cash
flowsindex appearing
under Item 14 on page 12 present fairly, in all material respects, the financial
position of Leggett & Platt, Incorporated and its subsidiariesSubsidiaries at December 31, 19931995
and 1992,1994, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 19931995 in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
St. Louis, Missouri
February 17, 19948, 1996
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: March 28, 1994
LEGGETT & PLATT, INCORPORATED
Dated: March 28, 1996
By: ____/s/__HARRY/s/ HARRY M. CORNELL, JR.____JR.
----------------------------
Harry M. Cornell, Jr.
CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICERChairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- --------------------------- ----- ----
(A)(a) PRINCIPAL EXECUTIVE OFFICER:
/s/HARRY M. CORNELL, JR. Chairman of the Board and Chief March 28, 1996
-------------------------- Executive Officer
Harry M. Cornell, Jr.
Executive Officer and Director March 28, 1994
(B)(b) PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER:
/s/MICHAEL A. GLAUBER Senior Vice President, Finance & March 28, 1996
-------------------------- Administration
Michael A. Glauber
Administration March 28, 1994
(C)(c) DIRECTORS:
HERBERT C. CASTEEL*
Herbert C. CasteelRAYMOND F. BENTELE* Director
--------------------------
Raymond F. Bentele
ROBERT TED ENLOE, III* Director
--------------------------
Robert Ted Enloe, III
Director
RICHARD T. FISHER* Director
--------------------------
Richard T. Fisher Director
FRANK E. FORD, JR.*
Frank E. Ford, Jr. Director
ROBERT A. JEFFERIES, JR.*
Robert A. Jefferies, Jr. Director
ALEXANDER M. LEVINE*
Alexander M. Levine Director
30
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- --------------------------- ----- ----
JAMES C. MCCORMICK*
James C. McCormickFRANK E. FORD, JR.* Director
--------------------------
Frank E. Ford, Jr.
DAVID S. HAFFNER* Director
--------------------------
David S. Haffner
ROBERT A. JEFFERIES, JR.* Director
--------------------------
Robert A. Jefferies, Jr.
ALEXANDER M. LEVINE* Director
--------------------------
Alexander M. Levine
RICHARD L. PEARSALL* Director
--------------------------
Richard L. Pearsall Director
MAURICE E. PURNELL, JR.* Director
--------------------------
Maurice E. Purnell, Jr.
Director
FELIX E. WRIGHT* Director
--------------------------
Felix E. Wright
Director
*By/s/* By /s/ ERNEST C. JETT March 28, 1996
-------------------------
Ernest C. Jett
Attorney-in-Fact pursuant to Power of
Attorney dated March, 28, 1994
dated as of February 9, 19941996
31
EXHIBIT INDEXLEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the three years ended December 31, 1995
(Amounts in millions)
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.Column A Column B Column C Column D Column E
-------- ---------- ---------- ---------- ----------
Additions
Charged
Balance at to Costs Balance at
Beginning of and End of
Description Period Expenses Deductions Period
- --------------- ------------ --------------------------------------------------------------------------------------- ---------- ---------- --------
Year ended December 31, 1995
Allowance for doubtful receivables.. $7.5 $5.8 $5.8 (A) $7.5
==== ==== ==== ====
Year ended December 31, 1994
Allowance for doubtful receivables.. $7.2 $5.7 $5.4 (A) $7.5
==== ==== ==== ====
Year ended December 31, 1993
Allowance for doubtful receivables.. $7.1 $2.8 $2.7 (A) $7.2
==== ==== ==== ====
- --------------------------------------
(A) Uncollectible accounts charged off, net of recoveries.
32
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- ----------
3.1 -- The Restated Articles of Incorporation of the Company,
filed as Exhibit 3 to Registrant's Form 10-Q for the
quarter ended June 30, 1987, are incorporated by
reference.
3.2 -- Amendment to Restated Articles of Incorporation of the Company, filed as Exhibit 3.1 to
Form S-4 (Registration No. 33-66238 which was filed with the the Securities and
Exchange Commission on July 19, 1993), is incorporated by reference.
3.3 -- By-Laws of the Company as amended and restated as of August 11, 1993, filed as Exhibit
3.2 to Registrant's Form 10-Q for the quarter ended June 30, 1993, are incorporated by
reference.
4.1 -- Article III of Registrant's Restated Articles of Incorporation, filed as Exhibit 3.1
above, is incorporated by reference.
4.2 -- Rights Agreement dated February 15, 1989 between Registrant and The Chase Manhattan
Bank, N.A., pertaining to preferred stock rights distributed by Registrant, filed as
Exhibit 1 to Registrant's Form 8-A dated February 15, 1989, is incorporated by
reference. Certificate dated June 19, 1992 regarding May 13, 1992 stock split, filed as
Exhibit 4.2 of Registrant's Form 10-K for the year ended December 31, 1992, is
incorporated by reference.
4.2A -- Letter Agreement dated December 18, 1991 between Registrant and Mellon Securities Trust
Company ("Mellon") relating to appointment of Mellon as Rights Agent under the Rights
Agreement, filed as Exhibit 4.2A to Registrant's Form 10-K for the year ended December
31, 1991, is incorporated by reference.
10.1(1) -- Employment Agreement between the Company and Mr. Cornell dated May 9, 1979, as amended,
filed as Exhibit 10.1 to Registrant's Form 10-K for the year ended December 31, 1989,
and Amendment No. 3 to Employment Agreement dated March 15, 1993, filed as Exhibit 10.1
to Registrant's Form 10-K for the year ended December 31, 1992, are incorporated by
reference.
10.2(1) -- Employment Agreement between the Company and Mr. Wright dated May 1, 1981, as amended,
filed as Exhibit 10.2 to Registrant's Form 10-K for the year ended December 31, 1989,
is incorporated by reference.
10.3(1) -- Employment Agreement between the Company and Mr. Jefferies dated November 7, 1990,
filed as Exhibit 10.3 to Registrant's Form 10-K for the year ended December 31, 1990,
and Amendment No. 1 to Employment Agreement dated January 1, 1993, filed as Exhibit
10.3 to Registrant's Form 10-K for the year ended December 31, 1992, are incorporated
by reference.
10.4(1) -- Reference is made to Exhibits 10(a), 10(b) and 10(c) of Registrant's Form 8-K dated
June 5, 1984 for a copy of the Severance Benefit Agreements between the Company and
Harry M. Cornell, Jr., Felix E. Wright and Robert A. Jefferies, Jr., respectively,
dated May 9, 1984, which are incorporated by
reference.
323.2 Amendment to Restated Articles of Incorporation of the
Company, filed as Exhibit 3.1 to Form S-4 (Registration
No. 33-66238 which was filed with the Securities and
Exchange Commission on July 19, 1993), is incorporated
by reference.
3.3 By-Laws of the Company as amended and restated as of
August 11, 1993, filed as Exhibit 3.2 to Registrant's
Form 10-Q for the quarter ended June 30, 1993, are
incorporated by reference.
4.1 Article III of Registrant's Restated Articles of
Incorporation, filed as Exhibit 3.1 above, is
incorporated by reference.
4.2 Rights Agreement dated February 15, 1989 between
Registrant and The Chase Manhattan Bank, N.A.,
pertaining to preferred stock rights distributed by
Registrant, filed as Exhibit 1 to Registrant's Form
8-A dated February 15, 1989, and Amendment No. 1 to
Rights Agreement dated August 29, 1994, filed as
Exhibit 3 to Registrant's Form 8-A/A dated
September 8, 1994, are incorporated by reference.
4.2A Letter Agreement dated December 18, 1991 between
Registrant and Mellon Securities Trust Company
("Mellon") relating to appointment of Mellon as Rights
Agent under the Rights Agreement, filed as Exhibit
4.2A to Registrant's Form 10-K for the year ended
December 31, 1991, is incorporated by reference.
10.1/1/ Employment Agreement between the Company and Mr.
Cornell dated May 9, 1979, as amended, filed as
Exhibit 10.1 to Registrant's Form 10-K for the year
ended December 31, 1989, and Letter Agreement dated
March 15, 1993 amending Section 2.2 of Employment
Agreement, filed as Exhibit 10.1 to Registrant's Form
10-K for the year ended December 31, 1992, are
incorporated by reference.
10.1A/1/ Letter Agreement dated February 15, 1996 amending
Section 6.3 of Employment Agreement dated May 9, 1979
between the Company and Mr. Cornell.
10.2/1/ Employment Agreement between the Company and Mr.
Wright dated May 1, 1981, as amended, filed as Exhibit
10.2 to Registrant's Form 10-K for the year ended
December 31, 1989, is incorporated by reference.
33
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ --------------------------------------------------------------------------------------- ----------
10.6(1) -- Reference is made to Exhibit C to Registrant's definitive Proxy Statement dated March
31, 1989 used in conjunction with Registrant's Annual Meeting of Shareholders held on
May 10, 198910.3/1/ Employment Agreement between the Company and Mr.
Jefferies dated November 7, 1990, filed as Exhibit
10.3 to Registrant's Form 10-K for the year ended
December 31, 1990, and Amendment No. 1 to Employment
Agreement dated January 1, 1993, filed as Exhibit 10.3
to Registrant's Form 10-K for the year ended December
31, 1992, are incorporated by reference.
10.4/1/ Severance Benefit Agreement between the Company and
Harry M. Cornell, Jr. dated May 9, 1984 filed as
Exhibit 10.4 to Registrant's Form 10-K for the year
ended December 31, 1994, is incorporated by reference.
10.5/1/ Severance Benefit Agreement between the Company and
Felix E. Wright dated May 9, 1984 filed as Exhibit
10.5 to Registrant's Form 10-K for the year ended
December 31, 1994, is incorporated by reference.
10.6/1/ Severance Benefit Agreement between the Company and
Robert A. Jefferies, Jr. dated May 9, 1984 filed as
Exhibit 10.6 to Registrant's Form 10-K for the year
ended December 31, 1994, is incorporated by reference.
10.7/1/ Reference is made to Appendix A to Registrant's
definitive Proxy Statement dated April 4, 1994 used in
conjunction with Registrant's Annual Meeting of
Shareholders held on May 11, 1994 for a copy of the
Company's 1989 Flexible Stock Plan, as amended, which
is incorporated by reference.
10.8/1/ Summary description of the Company's Key Management
Incentive Compensation Plan, which is
incorporated by reference.
10.7(1) -- Summary description of the Company's Key Management Incentive Compensation Plan.
10.8(1) -- Reference is made to description of certain long-term disability arrangements between
Registrant and its salaried employees filed as Exhibit 10.7 of
Registrant's Form 10-K
for the year ended December 31, 1991, which is incorporated by reference.
10.9(1) -- Reference is made to Exhibit D to Registrant's definitive Proxy Statement dated April
1, 1986 used in conjunction with Registrant's Annual Meeting of Shareholders held on
May 7, 1986 for a copy of the form of Indemnification Agreement approved by the
shareholders of Registrant and entered into between Registrant and each of its
directors and executive officers, which is incorporated by reference.
10.10(1) -- Registrant's Director Stock Option Plan, filed as Appendix A to Registrant's definitive
Proxy Statement dated March 31, 1989 used in conjunction with Registrant's Annual
Meeting of Shareholders held on May 10, 1989, and Amendment to Director Stock Option
Plan dated May 13, 1992, filed as Exhibit 10.10 to Registrant's Form 10-K for the year
ended December 31, 1992, are incorporated by reference.
10.11(1) -- Employment Agreement dated April 14, 1989 between Registrant and Alexander M. Levine,
filed as Exhibit 10.10 of Registrant's Form 10-K for the year ended December 31, 1989,
is incorporated by reference.
10.12(1) -- Reference is made to Leggett & Platt, Incorporated Executive Stock Purchase Program
adopted June 6, 1989 under the Company's 1989 Flexible Stock Plan, and effective as of
July 1, 1989, as amended on November 13, 1991, filed as Exhibit 10.11 of Registrant's
Form 10-K for the year ended December 31, 1991, which is incorporated by reference.
10.14(1) -- Stock Award Agreement dated July 27, 1992 between Registrant and Felix E. Wright, filed
as Exhibit 10.14 of Registrant's Form 10-K for the year ended December 31, 1992, is
incorporated by reference.
10.15(1) -- Stock Award Agreement dated August 21, 1992, between Registrant and Robert A.
Jefferies, Jr., filed as Exhibit 10.15 of Registrant's Form 10-K for the year ended
December 31, 1992, is incorporated by reference.
10.16(1) -- Stock Award Agreement dated October 2, 1992, between Registrant and Duane W. Potter,
filed as Exhibit 10.16 of Registrant's Form 10-K for the year ended December 31, 1992,
is incorporated by reference.
10.17(1) -- Stock Award Agreement dated December 20, 1992 between Registrant and Harry M. Cornell,
Jr., filed as Exhibit 10.17 of Registrant's Form 10-K for the year ended December 31,
1992, is incorporated by reference.
10.18(1) -- Stock Award Agreement dated July 27, 1993 between Registrant and Felix E. Wright.
33
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ------------ --------------------------------------------------------------------------------------- ----------
10.19(1) -- Stock Award Agreement dated December 20, 1993 between Registrant and Harry M. Cornell,
Jr.
10.20(1) -- Deferred Compensation Plan adopted by Registrant's Board of Directors and offered to
executives of Registrant.
11 -- Statement of Computation of Earnings Per Common Share.
21 -- Schedule of Subsidiaries of Registrant.
23 -- Consent of Independent Accountants.
24 -- Power of Attorney executed by members of the Company's Board of Directors regarding
this Form 10-K and certain registration statements.
- ------------------------
(1) Denotes management contract or compensatory plan or arrangement.
34
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Shareholders of
Leggett & Platt, Incorporated:
Our audits of the consolidated financial statements referred to in our
report dated February 17, 1994, appearing on page 29 of Leggett & Platt,
Incorporated's Annual Report on Form 10-K for the year ended December 31,
1993, also included an auditis incorporated by reference.
10.9/1/ Reference is made to description of certain long-term
disability arrangements between Registrant and its
salaried employees filed as Exhibit 10.7 of
Registrant's Form 10-K for the Financialyear ended December 31,
1991, which is incorporated by reference.
10.10/1/ Form of Indemnification Agreement approved by the
shareholders of Registrant and entered into between
Registrant and each of its directors and executive
officers.
10.11/1/ Registrant's Director Stock Option Plan, filed as
Appendix A to Registrant's definitive Proxy Statement
Schedules listed in Item 14-2
in Part IV of this Form 10-K. In our opinion, these Financial Statement
Schedules present fairly, in all material respects, the information set forth
therein when readdated March 31, 1989 used in conjunction with
Registrant's Annual Meeting of Shareholders held on
May 10, 1989, and Amendment to Director Stock Option
Plan dated May 13, 1992, filed as Exhibit 10.10 to
Registrant's Form 10-K for the related consolidated financial
statements.
PRICE WATERHOUSE
St. Louis, Missouri
February 17, 1994
35
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN B COLUMN E COLUMN F
------------ COLUMN C ----------------- -----------
COLUMN A BALANCE AT ------------- COLUMN D OTHER CHANGES ADD BALANCE AT
- ------------------------------------------ BEGINNING OF ADDITIONS ------------- (DEDUCT) END OF
CLASSIFICATION PERIOD AT COST RETIREMENTS (A),(B),(C),(D) PERIOD (E)
- ------------------------------------------ ------------ ------------- ------------- ----------------- -----------
Machinery and equipment................... $ 280.4 $ 59.7 $ 4.8 $ 11.2 $ 346.5
Buildings................................. 126.8 17.0 2.6 3.5 144.7
Automotive and trucks..................... 19.7 4.3 2.2 -- 21.8
Office furniture and fixtures............. 22.0 4.7 .8 .1 26.0
Leasehold improvements and other.......... 11.3 .9 .1 .3 12.4
Land...................................... 17.8 1.7 .4 .7 19.8
------------ ----- ----- ----- -----------
$ 478.0 $ 88.3 $ 10.9 $ 15.8 $ 571.2
------------ ----- ----- ----- -----------
------------ ----- ----- ----- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred from Sundry Assets
and subsequently retired.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
(D) Reclass of the Company's investment in the property, plant and equipment
of Adcom Wire, at the date of acquisition, from Sundry Assets.
(E) Property, plant and equipment are depreciated by the straight-line method.
Generally, the rates of depreciation range from 2.5% to 6.7% for
buildings, 8.3% to 25% for machinery and equipment, 20% to 33.3% for
automotive and trucks and 12.5% to 33.3% for office furniture and
fixtures. Leasehold improvements are depreciated over the term of the
lease.
36
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBERyear ended December 31,
1992, (AMOUNTS IN MILLIONS)
COLUMN B COLUMN E COLUMN F
------------ COLUMN C --------------- -----------
COLUMN A BALANCE AT ----------- COLUMN D OTHER CHANGES BALANCE AT
- ---------------------------------------- BEGINNING OF ADDITIONS ------------- ADD (DEDUCT) END OF
CLASSIFICATION PERIOD AT COST RETIREMENTS (A),(B),(C) PERIOD (D)
- ---------------------------------------- ------------ ----------- ------------- --------------- -----------
Machinery and equipment................. $ 261.4 $ 27.8 $ 7.0 $ (1.8) $ 280.4
Buildings............................... 125.4 4.0 1.3 (1.3) 126.8
Automotive and trucks................... 19.9 4.4 4.6 -- 19.7
Office furniture and fixtures........... 19.2 3.4 .6 -- 22.0
Leasehold improvements and other........ 13.4 .6 .1 (2.6) 11.3
Land.................................... 16.2 .4 .3 1.5 17.8
------------ ----- ----- ----- -----------
$ 455.5 $ 40.6 $ 13.9 $ (4.2) $ 478.0
------------ ----- ----- ----- -----------
------------ ----- ----- ----- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred to Sundry Assets.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
(D) Property, plant and equipment are depreciated by the straight-line method.
Generally, the rates of depreciation range from 2.5% to 6.7% for
buildings, 8.3% to 25% for machinery and equipment, 20% to 33.3% for
automotive and trucks and 12.5% to 33.3% for office furniture and
fixtures. Leasehold improvements are depreciated over the term of the
lease.
37
LEGGETTare incorporated by reference.
10.12/1/ Reference is made to Leggett & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBERPlatt, Incorporated
Executive Stock Purchase Program adopted June 6, 1989
under the Company's 1989 Flexible Stock Plan, and
effective as of July 1, 1989, as amended on November
13, 1991, filed as Exhibit 10.11 of Registrant's Form
10-K for the year ended December 31, 1991, (AMOUNTS IN MILLIONS)
COLUMN B COLUMN E COLUMN F
------------ COLUMN C ----------------- -----------
COLUMN A BALANCE AT ------------- COLUMN D OTHER CHANGES BALANCE AT
- --------------------------------------------- BEGINNING OF ADDITIONS AT ------------- ADD (DEDUCT) END OF
CLASSIFICATION PERIOD COST RETIREMENTS (A),(B) PERIOD (C)
- --------------------------------------------- ------------ ------------- ------------- ----------------- -----------
Machinery and equipment...................... $ 243.5 $ 20.4 $ 4.3 $ 1.8 $ 261.4
Buildings.................................... 106.8 15.4 2.3 5.5 125.4
Automotive and trucks........................ 19.5 3.4 3.3 .3 19.9
Office furniture and fixtures................ 18.0 2.3 .8 (.3) 19.2
Leasehold improvements and other............. 13.5 .7 .2 (.6) 13.4
Land......................................... 15.3 .6 .6 .9 16.2
------------ ----- ----- --- -----------
$ 416.6 $ 42.8 $ 11.5 $ 7.6 $ 455.5
------------ ----- ----- --- -----------
------------ ----- ----- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Changes in account classification and transfers between accounts.
(B) Net change due to revised purchase price allocation and transfers from
Sundry Assets.
(C) Property, plant and equipment are depreciated by the straight-line method.
Generally, the rates of depreciation range from 2.5% to 6.7% for
buildings, 8.3% to 25% for machinery and equipment, 20% to 33.3% for
automotive and trucks and 12.5% to 33.3% for office furniture and
fixtures. Leasehold improvements are depreciated over the term of the
lease.
38which is
incorporated by reference.
10.13/1/ Stock Award Agreement dated December 20, 1994 between
the Company and Harry M. Cornell, Jr., filed as
Exhibit 10.17 of Registrant's Form 10-K for the year
ended December 31, 1994, is incorporated by reference.
34
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E COLUMN F
------------ ADDITIONS ----------------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D OTHER CHANGES ADD BALANCE AT
- ---------------------------------------- BEGINNING OF COSTS AND ------------- (DEDUCT) END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS (A),(B),(C),(D) PERIOD
- ---------------------------------------- ------------ ----------- ------------- ----------------- -----------
Machinery and equipment................. $ 154.8 $ 27.1 $ 3.9 $ 7.2 $ 185.2
Buildings............................... 31.7 5.2 .4 .1 36.6
Automotive and trucks................... 11.9 3.0 1.8 -- 13.1
Office furniture and fixtures........... 11.1 2.6 .7 .1 13.1
Leasehold improvements and other........ 8.8 1.2 .1 .2 10.1
------------ ----- --- --- -----------
$ 218.3 $ 39.1 $ 6.9 $ 7.6 $ 258.1
------------ ----- --- --- -----------
------------ ----- --- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred from Sundry Assets
and subsequently retired.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
(D) Reclass of the Company's investment in the property, plant and equipment
of Adcom Wire, at the date of acquisition, from Sundry Assets.
39
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1992
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E COLUMN F
------------ ADDITIONS ----------------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D OTHER CHANGES BALANCE AT
- ---------------------------------------------- BEGINNING OF COSTS AND ------------- ADD (DEDUCT) END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS (A), (B), (C) PERIOD
- ---------------------------------------------- ------------ ----------- ------------- ----------------- -----------
Machinery and equipment....................... $ 135.5 $ 25.6 $ 5.4 $ (.9) $ 154.8
Buildings..................................... 27.1 4.8 .3 .1 31.7
Automotive and trucks......................... 12.7 2.8 3.7 .1 11.9
Office furniture and fixtures................. 9.4 2.1 .4 -- 11.1
Leasehold improvements and other.............. 7.4 1.3 -- .1 8.8
------------ ----- --- --- -----------
$ 192.1 $ 36.6 $ 9.8 $ (.6) $ 218.3
------------ ----- --- --- -----------
------------ ----- --- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Property no longer used in operations was transferred to Other Assets.
(B) Changes in account classification and transfers between accounts.
(C) Change in the foreign currency exchange rate.
40
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1991
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E COLUMN F
------------ ADDITIONS ----------------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D OTHER CHANGES ADD BALANCE AT
- ---------------------------------------- BEGINNING OF COSTS AND ------------- (DEDUCT) END OF
DESCRIPTION PERIOD EXPENSES RETIREMENTS (A),(B),(C) PERIOD
- ---------------------------------------- ------------ ----------- ------------- ----------------- -----------
Machinery and equipment................. $ 112.8 $ 24.3 $ 2.9 $ 1.3 $ 135.5
Buildings............................... 21.7 4.4 .3 1.3 27.1
Automotive and trucks................... 12.0 2.7 2.3 .3 12.7
Office furniture and fixtures........... 8.0 2.0 .6 -- 9.4
Leasehold improvements and other........ 6.4 1.2 .2 -- 7.4
------------ ----- --- --- -----------
$ 160.9 $ 34.6 $ 6.3 $ 2.9 $ 192.1
------------ ----- --- --- -----------
------------ ----- --- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Changes in account classification and transfers between accounts.
(B) Transfers from Sundry Assets.
(C) Certain reclassifications have been made to conform to the 1992
presentation.
41
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN C
COLUMN B ----------- COLUMN E
------------ ADDITIONS -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D BALANCE AT
- ----------------------------------------------------------- BEGINNING OF COSTS AND -------------- END OF
DESCRIPTION PERIOD EXPENSES DEDUCTIONS PERIOD
- ----------------------------------------------------------- ------------ ----------- -------------- -----------
Year ended December 31, 1993...............................
Valuation reserve for non-operating Sundry Assets........ $ 2.7 $ .2 $ 1.2(A) $ 1.7
------------ ----- --- -----------
------------ ----- --- -----------
Allowance for doubtful receivables....................... $ 7.1 $ 2.8 $ 2.7(B) $ 7.2
------------ ----- --- -----------
------------ ----- --- -----------
Year ended December 31, 1992
Valuation reserve for non-operating Sundry Assets........ $ 1.1 $ 1.6 $ -- $ 2.7
------------ ----- --- -----------
------------ ----- --- -----------
Allowance for doubtful receivables....................... $ 8.2 $ 3.6 $ 4.7(B) $ 7.1
------------ ----- --- -----------
------------ ----- --- -----------
Year ended December 31, 1991
Valuation reserve for non-operating Sundry Assets........ $ 1.2 $ .7 $ .8(A) $ 1.1
------------ ----- --- -----------
------------ ----- --- -----------
Allowance for doubtful receivables....................... $ 6.3 $ 8.1 $ 6.2(B) $ 8.2
------------ ----- --- -----------
------------ ----- --- -----------
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Portion of reserve balance associated with assets disposed.
(B) Uncollectible accounts charged off, net of recoveries.
42
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE THREE YEARS ENDED DECEMBER 31, 1993
(AMOUNTS IN MILLIONS)
COLUMN B
-------------------------------
CHARGED TO COSTS
COLUMN A AND EXPENSES
- ----------------------------------------------------------------------- -------------------------------
ITEM (A) 1993 1992 1991
- ----------------------------------------------------------------------- --------- --------- ---------
Maintenance and repairs................................................ $ 26.4 $ 24.0 $ 23.7
- ------------------------
Previously reported amounts have been restated to reflect pooling of
interests acquisitions.
(A) Royalties, advertising costs, taxes (other than payroll and income taxes)
and depreciation and amortization of intangible assets are not reported
because they are less than 1% of total sales and revenues.
4310.14/1/ Stock Award Agreement dated August 1, 1995 between the
Company and Felix E. Wright.
10.15/1/ Stock Award Agreement dated August 1, 1995 between the
Company and Duane W. Potter.
10.16/1/ Stock Award Agreement dated August 1, 1995 between the
Company and David S. Haffner.
10.17/1/ Stock Award Agreement dated December 28, 1995 between
the Company and Harry M. Cornell, Jr.
10.18/1/ Summary description of the Company's Deferred
Compensation Program.
11 Statement of Computation of Earnings Per Common Share.
21 Schedule of Subsidiaries of Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney executed by members of the Company's
Board of Directors regarding this Form 10-K and
certain registration statements.
27 Financial Data Schedule
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1. Denotes management contract or compensatory plan or arrangement.
35