CARTHAGE, Mo. – Diversified manufacturer Leggett & Platt said first quarter sales decreased 9%.
Volume was down 9%, largely from COVID-19 impacts in the last two weeks of the quarter, the company reported.
Sales remained at weekly average levels that were consistent with 2019 through mid-March, while the rapid declines in last two weeks of the first quarter have stabilized through the first three weeks of the second quarter and are currently at approximately 55% of average levels, officials said.
The company said it has undertaken aggressive cost reductions, aligned its variable cost structure to current demand levels, eliminated non-essential expenses and expects full year fixed cost reductions of $130 million to $150 million.
The company reported liquidity, as of March 31, of $734 million, with $506 million of cash and $228 million in available capacity under its commercial paper program, backed by a revolving credit facility.
L&P has reduced its full year capital expenditure budget by over 60% to $60 million and is halting acquisitions, the company said.
“Like so many in our community and around the world, we are facing significant business challenges as a result of the COVID-19 pandemic,” said Karl Glassman, L&P’s chairman and CEO. “These extraordinary circumstances have forced us to make very difficult decisions as we take steps to reduce costs during this period of drastic decreases in demand. We rapidly deployed cost savings measures across the company, significantly reducing production levels and enacting temporary layoffs. We are also aggressively reducing fixed costs and cutting capital spending.
“Our long-term fundamentals have not changed,” he continued. “We continue to be leaders in most of our markets, focused on innovation and working closely with our customers to provide more of what they need to be successful. Our capabilities are unmatched in our large and expanding addressable markets. The diversity of our businesses makes us stronger. We have an outstanding track record of strong cash flow and we remain committed to our long-standing transparency and financial discipline. We are focused on doing everything we can to return our employees to work. We are confident we will emerge from this crisis in a very strong position.”
Trade sales in the bedding products segment were down 11% in the first quarter, while organic sales decreased 15%, the company said.