In November of 2007, we outlined major changes in our longstanding strategy and refocused the company on Total Shareholder Return, or TSR1.
What we said then:
Our goal was to deliver TSR in the top third of the S&P 500.
Our priorities were: 1) Focus the portfolio; 2) Improve the businesses we keep;
and 3) Grow revenue long-term at 4-5%.
What we have accomplished since:
1) Narrowed portfolio from 28 business units to 17 business units
2) Increased adjusted2 EBIT margin from 8.7% to 13.1%
Our nine-year TSR (2007-2016) ranked in the top 9% of the S&P 500. We successfully executed Focus and Improve – we’re now turning more attention to Growth.
1 TSR = (change in stock price + dividends)/beginning stock price; assumes dividends are reinvested.
2 Please refer to Non-GAAP Reconciliations page.
Why change the formula?
Moderately higher revenue growth will be required as opportunities to further expand margins become more challenging. We’ve been achieving sales growth in the 6-9% range during the past few years after adjusting for divestitures, deflation, and currency. We are focused on ensuring that profitable growth continues.
More comfort and convenience features in cars that involve our lumbars, cables, motors, and actuators. This allows us to grow our business without a dramatic increase in vehicle sales.
Priorities for use of cash are unchanged – 1) fund capital expenditures; 2) increase dividend; 3) fund selective growth; and 4) repurchase stock with excess cash.
Unwavering commitment to dividend growth – which should more closely align with earnings growth now that we are in the payout target range (50-60% of earnings).
Long-held priority on balance sheet strength – allows us to capture attractive investment opportunities.
Pictured above, the clay sculpture of Mr. Cornell’s likeness, which was designed by Andy Thomas of Carthage, MO. The life-sized bronze statue will welcome guests at the front entry of the Corporate Headquarters.
Our Company bears the name of its co-founders J.P. Leggett and C.B. Platt. But the
leader responsible for making Leggett & Platt a name known around the world is
Harry M. Cornell, Jr.
“Success is founded on a constant state of discontentment interrupted by brief periods of satisfaction on the completion of a job particularly well done.”
Those who worked with Harry during his four decades of leadership of Leggett & Platt would have seen this unattributed quote prominently displayed in his office or, more likely, would have heard Harry repeat the saying from time to time. It perfectly describes the recurring cycle of drive leading to success, leading to renewed drive to achieve even greater success, throughout his tenure as CEO.
Harry’s vision, determination, and business acumen transformed Leggett & Platt from a closely held company with four manufacturing facilities generating $7 million in sales into a member of the S&P 500 with sales of $3.8 billion, creating thousands of jobs in communities around the world.
So, it’s entirely fitting that on May 16, 2016, we proudly honored Harry with the dedication of the Company’s world headquarters in Carthage, Missouri, as the Cornell Campus.