Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Leggett & Platt Inc. (NYSE:LEG)

Q3 2009 Earnings Call

October 23, 2009 9:00 am ET

Executives

David DeSonier – Vice President of Strategy and Investor Relations

David Haffner – President, Chief Executive Officer

Matthew Flanigan – Chief Financial Officer

Karl Glassman – Chief Operating Officer

Susan McCoy – Director Investor Relations

Analysts

Budd Bugatch – Raymond James

Keith Hughes – Suntrust Robinson Humphrey

John Baugh – Stifel Nicolaus

Mark Rupe – Longbow Research

Michael Smith – Kansas City Capital

[Justin Marr – Lord Abbott]

[Brian DeRubio – Yield Capital Appreciation Partners]

Operator

Welcome to the Leggitt & Platt third quarter 2009 earnings. (Operator Instructions) It is now my pleasure to introduce your host, Dave DeSonier, Vice President of Strategy and Investor Relations for Leggitt & Platt.

David DeSonier

Good morning and thank you for joining us. With me today are the following; Dave Haffner, our CEO and President, Karl Glassman, our Chief Operating Officer, Matt Flanigan, our CFO and Susan McCoy, our Director of Investor Relations.

The agenda for the call is as follows; Dave Haffner will start with a summary of the major statements we made in yesterday’s press release. Karl Glassman will provide operating highlights, Dave will then address our outlook for the remainder of the year, and finally, the group will answer any questions you have.

This conference is being recorded for Leggitt & Platt and is copywrited material. This call may not be transcribed or recorded or broadcast without our express permission. A reply is available from the IR portion of Leggett’s website.

Yesterday we posted to the investor relations portion of the website a set of PowerPoint slides that contain summary financial information. Those slides are intended to supplement the information we discuss on this call.

I need to remind you that remarks today concerning future expectations, events, objectives, strategies, trends or results constitute forward-looking statements. Actual results or events may differ materially due to a number of risks and uncertainties and the company undertakes no obligation to update or revise these statements.

For a summary of these risk factors and additional information, please refer to yesterday’s press release and the section in our 10-K entitled Forward-looking statements.

I’ll now turn the call over to Dave Haffner

David Haffner

Good morning and thank you for participating in our call. We are pleased with the third quarter results we reported yesterday in what continues to be a very challenging operating environment. Sales from continuing operations decreased 28% versus the third quarter of 2008 reflecting weak global markets, steel related price deflation and our decision to exit some specific customer programs with unacceptable margins.

Despite this significant sales decline, third quarter earnings per share from continuing operations increased by $0.05 to $0.34 per share versus $0.29 in the third quarter of 2008. This improvement reflects several factors including ongoing benefits from the past year’s cost reduction initiatives, pricing discipline, a net LIFO benefit and the absence of last year’s unusual tax items.

The company’s primary financial objective is to consistently achieve total shareholder return within the top one-third of the S&P 500. From January 1, 2008 through October 21, 2009 we posted TSR of 23% which ranks in the top 3% of the S&P 500.

Last year we made significant progress on the first phase of our strategic plan. We have completed six of the seven targeted divestitures and received proceeds in excess of our expectations. We have returned more cash to investors through a combination of higher dividends and share repurchases and we have implemented a rigorous strategic planning process to help guide future investment decisions.

Our primary focus this year has been on margin improvement which we believe represents a substantial opportunity for creating shareholder value over the next few years.

We continued to show margin progress in the third quarter despite weak markets. Third quarter gross margin excluding the net LIFO benefit was 21.8%. For the full year we expect gross margins to approximate 20%, a level we have not achieved since 2001.

Third quarter EBIT margin excluding the net LIFO benefit was 10.4%. Since fourth quarter margins are seasonally lower than third quarter, we expect EBIT margins for the last half of 2009 to be roughly 8.5% to 9% after adjusting for that LIFO impact.

Throughout this year we discussed the quarterly mismatch in the recognition of LIFO benefits versus the FIFO impact associated with consumption of higher steel costs that we have in inventory or on order at the beginning of 2009. In the first and second quarter, we consumed the majority of the higher cost steel, but recognized only half of the offsetting LIFO benefit.

Therefore, first half reported earnings were unusually low. In contrast, second half reported earnings will be unusually high. In the third quarter we consumed the remainder of the higher cost steel inventory which was approximately $5 million and recognized a LIFO benefit of $60 million. This resulted in a net $11 million benefit to third quarter earnings.

In the fourth quarter, we expect to recognize an additional $17 million LIFO benefit with no offsetting FIFO impact. We continue to discuss this issue because it’s critical in understanding the quarterly pattern and variability in this year’s operating margins.

However, full year margins require no special consideration for these items. For the full year we expect the LIFO and the FIFO impacts to roughly offset.

The margin improvements we are reporting reflect substantial operational progress through a combination of aggressive cost containment efforts, head count reductions, facility consolidations and dispositions that we’ve made over the past several quarters in an environment where our sales for the year are expected to be down approximately 25%.

We should exit 2009 with an EBIT margin run rate of the 8.5% to 9% that I mentioned before and for 2010 expect EBIT margins to exceed 9% even if sales were to remain flat. With market recovery, we believe the $2.00 of EPS is achievable by 2012.

We base this expectation on the following assumptions; an EBIT margin of 8.5% to 9% as we exit 2009, an economic recovery driven increase in sales to approximately $3.6 billion by 2012, a contribution margin of 25% to 35% from those incremental sales and stock repurchases.

During the quarter, we generated $142 million of cash from operations reflecting improved earnings and our focus on working capital optimization. Year to date, we’ve generate $430 million of operating cash which readily exceeds our initial full year target of $300 million.

Reflecting confidence in our strategic progress, margin improvement, strong cash generation and some stability that we believe has developed in our markets, in August we increased our quarterly dividend by $0.01 to $0.26 per share. At yesterday’s closing price of $19.41, the current dividend yield is 5.4%.

We also used $80 million to repurchase 4.4 million shares of our stock during the third quarter at an average price per share of $18.40. Our financial profile remains very strong.

Even with the increase of share repurchases, we ended the quarter of net debt to net capital of 23.7%, down slightly from the end of the second quarter and well below the low end of our long term targeted range of 30% to 40%.

We have no significant maturities of fixed term debt until 2013 and our cash balance remains steady at $222 million. Operating cash flow in past years has consistently exceeded the amount required to fund both dividends and capital expenditures.

For the full year this year we now expect to generate more than $500 million of operating cash or more than double the $250 needed to fund annual dividends and capital expenditures combined.

With those comments, I’ll turn the call over to Karl Glassman who will provide some operating highlights.

Karl Glassman

Good morning. I’d like to quickly discuss a few major topics. You will find segment highlights in yesterday’s press release and in the slide presentation on our website that Dave DeSonier mentioned earlier.

Market demand remains weak. In the majority of our residential markets demand stabilized earlier this year. We experienced a seasonal increase in the third quarter as typically occurs albeit from very depressed levels.

We believe that units in the U.S. bedding industry were down approximately 15% in the third quarter and units in the U.S. furniture industry were likely down 15% to 20%. The 24% sales decline we reported in our residential segment for the third quarter reflects lower unit volumes and steel related price deflation.

Unit volumes in our bedding and furniture businesses decreased to a lesser extent than the market during the third quarter due to market share gains. We have yet to see clear signs that our residential markets are improving appreciably and are continuing to forecast off demand for the balance of the year.

Fourth quarter comparisons in terms of unit volumes become much easier. But last year’s price increases were not fully implemented until late third quarter so the current quarter will be our most difficult comparison from the standpoint of pricing.

The office furniture industry remains very weak. Industry data indicates this market is off roughly 35%. We are watching with caution, but the rate of descent has slowed in recent months and we’re hopeful the industry may be approaching bottom. This business generally trails our other markets into a downturn and typically stabilizes and recovers somewhat later as well.

Our store fixtures business has experienced relatively solid demand this year which in part reflects the fact that we are well placed with our value oriented retailers. Third quarter is a seasonal high for this business and fourth quarter is typically the seasonal low.

In automotive, global production rates have improved since mid year and are expected to remain well above those in the first half of 2009 when the industry was under producing sales in an effort to reduce vehicle inventories.

The actions we’ve taken to reduce overhead cost and eliminate poorly performing operations are offsetting much of the impact from lower sales. Cost containment and working capital management remain top priorities. As Dave mentioned, evidence of this focus is reflected in our improving gross margins and strong cash flow.

In addition, segment EBIT margins increased versus third quarter of 2008 in three of the four segments, a significant accomplishment in this demand environment. Margins improved 300 basis points in the commercial segment, reflecting the past year’s efforts to narrow the scope and improve operations within our store fixtures unit.

Residential margins improved sequentially, but declined versus relatively strong performance a year ago. Margins in each of the segments continue to benefit from the past year’s cost improvement initiatives.

In the third quarter we had realized much, but not all, of the positive impact from these actions. Although we don’t know when our markets will recover, at some point demand will strengthen. Consumers still use and will ultimately need to replace the end products that our components go into whether it’s a set of bedding, an upholstered chair or a vehicle.

Leggett is extremely well positioned from both a cost and market share standpoint to benefit when that occurs. With those comments, I’ll turn the call back over to Dave.

David Haffner

As we announced in yesterday’s press release, sales from continuing operations for the full year are projected to be approximately $3 billion or about 25% lower than in 2008. Full year earnings from continuing operations are now expected to be between $0.65 and $0.75 per share.

The increase in our estimate primarily reflects improved margin expectations. As a reminder, full year guidance includes $0.08 of unusual expenses that were incurred earlier this year and explained in the July earnings release.

And with those final comments, I’ll turn the call back over to David DeSonier.

David DeSonier

That concludes our prepared remarks. We appreciate your attention and we will be glad to try to answer your questions. In order to allow everyone an opportunity to participate, we request that you ask your single best question and then voluntarily yield to the next participant. If you have additional question, please re-enter the queue and we’ll answer all the questions that you have. We’re ready to begin the Q&A.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Budd Bugatch – Raymond James.

Budd Bugatch – Raymond James

I think in your remarks Karl, you said that you’ve gotten some but not all of the restructuring savings showing up in the third quarter. What’s left to get and can you quantify that for us and how should we think about that for the fourth quarter and then 2010.

Karl Glassman

We continue to work on our cost structure and we certainly have not received the full benefit of all of those activities. Some of those activities continued in the third quarter. As a matter of fact restructuring cost, while we don’t call it out anymore was between $0.01 and $0.02 split primarily between residential and commercial.

Those activities continue but at a much lesser rate than they have historically, so as next year rolls out we’ll start to anniversary some of those benefits. We’re continuing to be frugal, appropriately so on our spending. We have not seen the benefit yet.

Budd Bugatch – Raymond James

And did you quantify that for us, or can you give us an increment benefit. What would you see? Does that factor above the 25% contribution margin target?

Karl Glassman

I did not quantify it and can’t but I do think it certainly is a contributor to the incremental margin. We can speculate is it 25% to 35%. I personally think its 30% or north of that, but we’ll see.

Operator

Your next question comes from Keith Hughes – Suntrust Robinson Humphrey.

Keith Hughes – Suntrust Robinson Humphrey

You talked; it was either in the slides or in the release about the revenue that has been lost this year that you voluntarily exited. How much of that would be in the residential division and how much in the commercial division.

Susan McCoy

Most of that is in commercial, somewhere in the 100 to 125 range. There’s a little bit in a couple of the other segments as well. Residential would be most of the remaining 50 but not all of the remaining 50 of that.

Keith Hughes – Suntrust Robinson Humphrey

In Slide 12 on residential, you talk about U.S. spring dollars down 20%, inner spring units down 12% and box spring units down 4%. There’s a lot spread between those numbers. Could you give us some color of what you think is going on?

Karl Glassman

There’s two things. In my comments you remember that we said that 3Q ’09, we were at our selling price peak really that really is fourth quarter, but we were moving into it, passing through significant inflation last year.

There has been a little deflation that started to hit us, certainly voluntary, but it was based on cost reductions, primarily steel based that started in the first quarter of this year, so some of it is selling price on a specific SKU, but a good bit of it is mix.

As our customers mixed down in this tough economic environment that we’re seeing a less rich mix from a sales standpoint, therefore affecting our dollars is a different rate than our pieces.

Keith Hughes – Suntrust Robinson Humphrey

And the box spring is doing so much better than inner spring unit. Is that market share gains?

Karl Glassman

Yes it is. You may remember that we effectively changed specifications with Sealy so that the main contributor to that is third quarter we had for the first quarter this year, had full benefit of that where Sealy has moved to a more efficient manufactured product that has a much higher content of our product. It’s a fully assembled product that we sell them as opposed to their historic partial assembly of components.

Keith Hughes – Suntrust Robinson Humphrey

When do you anniversary that?

Karl Glassman

We started to see some of the benefit in early, at the end of the first quarter of this year, ramped up in the second, fully in place in the third.

Operator

Your next question comes from John Baugh – Stifel Nicolaus.

John Baugh – Stifel Nicolaus

Could you address the scrap rod spread, where it was this quarter, where it was a year ago quarter and a guess as to where you think it might go going forward, and then some help on how we think about revenues next year compared to the year 2009 as it relates to steel deflation and how just if we sold the exact same number of units, how pricing would affect the revenue.

Karl Glassman

What’s happened with spread is it’s dropped significantly as scrap costs have dropped. Certainly so have selling prices, but that spread is quite a bit narrower now than it was a year ago now. What happened was scrap, when you look on a go forward basis, scrap jumped pretty significantly in September, and then in October we expect our average to retreat back to the August level.

So we would expect the spread going forward to be maybe slightly richer than it would have been in the third quarter.

David Haffner

It’s an excellent question. Looking into the future, effectively what sort of part inflation or deflation might play on the top line? We don’t know is the answer. However, my sense is that as business does pick up, demand will pick up. We’ll see some upward bias in some of those raw materials and therefore we’ll pass that inflation if it so happens through. At this point we don’t see it as a significant inflation potential, but we just don’t know.

Operator

Your next question comes from Mark Rupe – Longbow Research.

Mark Rupe – Longbow Research

When you come out of this kind of downturn how are you positioned in some of your markets? I know that with the anti dumping on the value side I would think you’d have more share coming out this time versus maybe the last time. Any comment on that would be great.

David Haffner

We certainly don’t want to sound overly optimistic or bragadocious but we like very much the position we’re in in all of our markets. As you know, we either lead or very close to the top of the pack of all the suppliers in all the various markets that we participate in.

We also have some significant advantages in some of the cost profiles that we enjoy because of our vertical backward integration if you will. So we’re in a wonderful position when things turn around. But again, we’re just guardedly optimistic about when that significant turnaround is going to happen.

Karl Glassman

I would agree. We enhanced our market position through this downturn in really every market that we participate in other than store fixtures. In that market we voluntarily gave up some market share for improved profitability and a narrower focus on steel versus wood. So we reiterate what Dave said, we like our position. A little bit of volume right now through this lower cost structure would feel really good.

David Haffner

I guess the other thing I’d add to it is that I know you and the rest of the people that know us well, I understand and recognize the tough decisions we’ve made through consolidations and cost containment so the margins which we’re enjoying now at these low revenue levels, when that incremental volume does come back, we should enjoy margins that we haven’t seen in a very long time.

Then the last thing I would mention is that it should not require much in the way of capital expenditure to add productive capacity. We were at about $1.4 billion with the consolidated group of manufacturing sites that we have, and so in theory we could bring back that $1 billion worth of revenue assuming an approximate stable product mix without having to make additional manufacturing capacity investments.

Operator

Your next question comes from Michael Smith – Kansas City Capital.

Michael Smith – Kansas City Capital

If you’re right on the economy and it recovers in 2011/2012 how much of what you’re furloughed in terms of people and facilities would you have to bring back or how much margin expansion could we expect in those two years?

David Haffner

I hate to be repetitive but we really haven’t attempted to project revenues in excess of that $4 billion in 2012. If it happens, it would be wonderful and we stand ready of course to add productive capacity where we need to, but at this point we’re trying to stay relatively conservative and just looking at our earnings leverage or power based upon about a 20% increase in top line from $3 billion to $3.6 billion over that period of time.

Some folks are of the opinion that we’re being too conservative and I hope that is correct. But we should be able to service somewhere between $4 billion and $4.5 billion worth of demand with the current mix that we have and the incremental margins, I’m on Karl’s side. I think they have a three handle, at least somewhere 30% or north.

Operator

Your next question comes from [Justin Marr – Lord Abbott]

[Justin Marr – Lord Abbott]

A follow up on the sales sequentially, I suspect most of us on the outside looking in are marginally disappointed that there wasn’t a little bit better lift. You alluded to it a little bit on the resi side. What might be helpful is how much of it was deflation as you alluded to, units a little bit better than the industry and then a component of that how much exit business you walked away from.

Susan McCoy

On the deflation side, third quarter versus third quarter a year ago, that’s primarily in industrial and residential. Where industrial sales were down 41%, more than half of that was price. So the unit decline in that segment was kind of mid to high teen level which probably ought to make sense given the fact that we’ve talked about bedding and furniture and automotive all being down in the 15% to 20% range and those are the main markets that that business will supply.

Residential is the other place where we had price deflation and volume there, we reported minus 23% to 24%. Volume there is down again kind of mid teens level, so the rest of that is price.

[Justin Marr – Lord Abbott]

How does that compare to second quarter as opposed to year over year. I’m just trying to understand how much sequential lift.

Susan McCoy

We had a lot more price deflation in the third quarter year over year than we did in the second quarter year over year and that’s because last year if you’ll remember we were ramping up price significantly in the second quarter and the third quarter. So actually, second quarter, and I’m pulling from memory now, in residential we were still positive year over year on the pricing side.

In industrial, we’ve started to give back so it’s still somewhat negative, but not to the tune to what we’ve experienced here in the third quarter.

[Justin Marr – Lord Abbott]

So you do feel like you’re getting reasonable volume improvement, kind off the cyclical lows of the spring. Fourth quarter, if my math is right it shows about a 19% decline again top line, and you mentioned that that’s your hardest price compare I think I heard you say just because that’s when increased were fully instituted? Is that kind of 50/50 if we think about it? Is volume closer to down maybe 10% with the balance being price or is that too much?

Karl Glassman

Our fourth quarter guidance is in the 15% range negative. I think that it depends on mix. It depends on the business, but there will be more deflation certainly as a percentage of total in the fourth quarter than in the third because we were at the pricing peak.

In our residential businesses it’s possible in my mind that we would be positive on units so this is just one bullet point, but through the first 14 shipping days of October, we’re about 10% positive on air spring units. I don’t have the dollar number. We would be negative from a dollar standpoint because of that deflationary aspect.

I would expect to start to mirror that in many of our markets. We are up against such easy comps, and you will see that deflationary impact in 1Q 2010 also. And then that would be about the end of it.

Operator

Your next question comes from [Brian DeRubio – Yield Capital Appreciation Partners]

[Brian DeRubio – Yield Capital Appreciation Partners]

If you look at the sales growth that you’re projecting between now and 2012, the 20% essential implies 6.25% annual growth rate. I know things never go linear but most people would argue that’s probably grown above nominal GDP growth for the next couple of years here in the U.S. Give us some comfort that given all the cyclical challenges that we’re facing that you’re actually going to be able to hit that $3.6 billion number and in light quite frankly the fact that you’ve missed some of your targets over the last few years.

David Haffner

You calculation must have the same algorithm as our calculators. You’re correct. We’re down significantly in these various industries that we serve significantly from what we would call a normal demand position.

Historically too, whenever there’s been a recession, there’s been a more robust demand in the early aftermath of the recession than normal. So it’s anybody’s guess. We believe it’s realistic if not conservative. We won’t know until 2012 if we’re correct, but we think this is reasonable and realistic.

Relative to the fact that we’ve missed some previous estimates, duly noted.

Karl Glassman

I would add that if you look at the negative GDP rate over the last few quarters and compare it to us down that 28%, it’s a sign that we’re in consumer discretionary sectors. The products that we sell are wearing out every minute of every day. They’re replenishment. They’re need type products.

We have typically seen a bounce back as the consumer starts to get a little bit more confident and they start to understand the discomfort of their current sleep set or bed or whatever that set of circumstances is, so we expect to have historically outperformed GDP out of each one of these cycles.

And understanding the consumer credit availability and all of those macro concerns that we all have, but it’s a signal of the sector that we play in.

Matthew Flanigan

I would just add that as we begin this year, our estimate which clearly turned out to wrong for revenue in 2009 was to be about $3.5 billion to $3.6 billion. So as we flash forward to 2012, getting back to something like what we thought would occur this year, also doesn’t seem to be too far reaching.

Operator

Your next question comes from Budd Bugatch – Raymond James.

Budd Bugatch – Raymond James

Karl you mentioned that bedding units went positive in October, up about 10%. Do you care to give us a guess on when furniture units as well and how long that may persist?

Karl Glassman

I don’t have contemporary data on furniture units, but furniture units I would say are slightly positive. And I apologize we don’t have the real time data in furniture that we have in bedding. The furniture unit as you well know is much more difficult to calculate than a bedding unit, but just because of the diversity of the product line. But it is positive.

Budd Bugatch – Raymond James

And the persistence of positive, will it be this quarter or do you think bedspring units turn positive and is that an industry, do you think the industry is going to turn positive this quarter too?

Karl Glassman

I’m afraid to even speculate on what I think. The industry is dealing with the same weak comps that we are. And again, speculation that I would expect that the industry would be slightly positive in pieces but it’s a person’s guess.

It’s I think probable in my mind that we will be positive on units. We are in a better market position to day than we were a year ago today.

Budd Bugatch – Raymond James

Susan, if I heard you right, you said about $100 million, $135 million in residential was price related reduction in volume and $65 million or thereabouts in industrial. What was the walk away business in the business in the quarter in commercial?

Susan McCoy

We don’t quantify that by the quarter. I apologize for that but the $175 million for the year is what we’ve shared externally.

Karl Glassman

Of that $175 million about $125 million was commercial so when you think of the third quarter being a commercial peak, Susan’s right. We haven’t calculated it, but that’s a way to look at it.

Budd Bugatch – Raymond James

I know you’re involved e-couple in a detailed strategic reviews. I actually saw the first residential application after market just concluded. Can you give us a feel for where you are on the strat plan reviews and any conclusions that you could share?

David Haffner

Right after this conference call, we’re going into a deep dive for one of our business units and will be the second strategic review. That whole process of strategic analysis is getting well entrenched within all of the business units. I complement Karl and the segment heads for embracing it the way they have.

We’re also this upcoming year now going to integrate the early part of the strategic plan into the actual budget. So we’re making that somewhat heroic and necessary change there. Very pleased, in two words relative to the strategic plans.

Regarding e-couple, we continue to be very encouraged with that technology and the consortium, the members of the consortium continue to grow and all of the major players and hand held wireless telephones and cameras and things like that are participants. We expect to start to commercialize the sale of primary coils sometime now and the end of the year.

Operator

Your next question comes from John Baugh – Stifel Nicolaus.

John Baugh – Stifel Nicolaus

Simmons was in forbearance forever so I doubt it caught you by surprise they’re filing. I’m just curious how you’re handling that and what if any impact there is financially. And then a comment on share repurchases. They jumped dramatically from the pace of the first half of the year. If you could just talk generally, I think you have $120 million left of the cash that you had originally embarked used to buy stock back. You talked about using all of that and some rough time frame.

Karl Glassman

As it related to Simmons, as you know when Simmons made their announcement a few weeks ago that they planned to file bankruptcy and emerge with a new parent, that they very publicly stated that their intention through that filing was to pay all of their suppliers. So we feel good about that.

We do not believe that there will be any financial impact to us at all. So it kind of remains business as usual. They’re current on every one of their payables, at least to us and I believe to all others, so we feel very good about that relationship.

Matthew Flanigan

On share repurchase, we continue to see it as a pretty compelling investment opportunity. We still have latitude to purchase four million shares in this quarter that we’re in. With regard to the 10 million share authorization that the Board gives us each year, assuming that we do that, we’d spend about a little over $80 million to do so. We think that’s probably a pretty good investment.

Operator

Your next question comes from [Justin Marr – Lord Abbott]

[Justin Marr – Lord Abbott]

The LIFO/FICO flow, was that about what you expect? I know you talked about the $70 million to $75 million that was just going to be over the four quarters, but in terms of the FIFO impact, has that moderated faster than you expected or is that as you flow through the third quarter and the fourth quarter, is that kind of what you thought?

Matthew Flanigan

It’s about what we thought. We thought there would be a little bit more to crawl into the third quarter and it did at about $5 million. There won’t be any in the fourth quarter and for the full year our estimate is about $70 million and that’s frankly about what we’ve been thinking for several months now.

[Justin Marr – Lord Abbott]

On a follow up on the deflation question, you seemingly won’t get credit for these goals until top line is kind of moving along with the bottom line. Do you think we’re still going to see negative compares on the top line through the first quarter and then the second quarter hopefully all things being equal, that’s when we turn the corner or is there a possibility that it could happen sooner?

Susan McCoy

Probably first quarter next year because the price would be negative and hopefully we’d be in a position to start to show some positive comps on the top line.

Operator

Mr. DeSonier there are no further questions at this time. I would like to turn the floor back over to you for closing comments.

David DeSonier

We’ll just say thank you. We appreciate you participation and we’ll talk to you again next quarter.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Leggett & Platt Inc. Q3 2009 Earnings Call Transcript
This Transcript
All Transcripts