New Leggett & Platt Strategy Means Downsizing

Carthage, MO, November 14, 2007--Leggett & Platt is narrowing its focus by eliminating over one-fifth of its portfolio. Leggett said it also intends to return more cash to shareholders, and pursue disciplined growth.


“Our shareholder returns have suffered for the past few years, as part of our portfolio has dragged us down,” said CEO David Haffner.


“We are correcting that by divesting several of our businesses. These are tough decisions we don't make lightly because they affect many of our employee-partners; however, these actions are required to bring about a stronger, better performing, and more focused Leggett & Platt."


The company's new, primary objective is for its stock return to grow 12%-15%, with dividends, over the long term, which should place Leggett in the top third among the S&P 500.


Revenue growth, long held as a primary goal, will now be viewed as one of several means to improve stock price growth


The company is modifying its incentive plans to emphasize the new strategy.


Leggett said it will cut about $1.2 billion of its revenue base by eliminating some businesses.


The largest portion of the revenue reduction (approximately $900 million) will come from divestiture of the Aluminum Products segment and six additional business units.


The company said it expects to generate about $400 million from the sales.


The company also expects to continue repurchasing shares, and has a standing 10 million shares per calendar year authorization from the board.


Leggett said it expects significant restructuring-related charges.


Related Topics:Leggett & Platt