Those charges will also be recognized in fourth quarter results, and the company will provide details of the amounts when earnings are released on January 24.
The company anticipates some further divestiture and restructuring-related costs in 2008, but expects the amounts to be significantly lower than those in the fourth quarter. Leggett will provide estimates of these 2008 costs when guidance is issued on January 24; however, the company does not intend to forecast potential gains or losses on sales of the businesses being divested.
Leggett anticipates fourth quarter sales of approximately $1.23 billion, in line with October guidance. Softer than expected sales in U.S. residential-related markets have been offset by demand strength in other areas, including certain international markets and the Fleet portion of the company's domestic Commercial Vehicle Products business. Fourth quarter sales are expected to decline 3% from 4Q 2006 (excluding the discontinued Prime Foam operations).
President and CEO David S. Haffner commented, "Many of our domestic markets remain challenging. As we near completion of the 2008 operating budgets, we see no major catalysts to appreciably alter demand trends in the near-term. However, we are making substantial progress on the factors we control.
The divestitures that we announced in November are progressing. We have engaged investment bankers to assist with the sale of the Aluminum Products segment and three of the other business units. We expect all seven divestitures to be completed during 2008, resulting in after-tax proceeds of approximately $400 million (tax effect should be minimal).
Given the current level of market interest in small-to-mid size transactions, the normalized earnings and cash flow of these business units, and the value of tangible assets associated with these operations, we believe our expectations are reasonable.
Leggett & Platt Incorporated
marketing@alchempro.com
