Leggett & Platt Reports Second Quater Lower Sales & Earnings

- 2Q EPS of $.12 per share; includes unusual charge of $.04 per share related to a 2008 divestiture.

- Sales from Continuing Operations were $757 million, 29% lower than in prior year.

- Cash flow from operations was $174 million for 2Q, $288 million for the first half of 2009.

- 2009 EPS guidance (for Continuing Operations) of $.55 - $.70, on approximately $3.0 billion of sales.

Diversified manufacturer Leggett & Platt reported second quarter earnings from Continuing Operations of $.12 per share. In the second quarter of 2008, earnings from Continuing Operations were $.25 per share. The year-over-year reduction in quarterly earnings was due to lower sales and an $11 million ($.04 per share) non-cash write-down of the note received in last year’s aluminum segment divestiture. Second quarter sales from Continuing Operations were $757 million, 29% lower than last year’s sales of $1.06 billion due to weak market demand.

Second quarter cash flow from operations was $174 million, largely as a result of efforts to reduce working capital. The second quarter tax rate was 42%, atypically high due to the low level and mix of earnings among various tax jurisdictions; the 2009 full year tax rate is anticipated to be approximately 39%.

President and CEO David S. Haffner commented, "Operationally, we are seeing significant benefit from our efforts over the last three quarters. Despite an anticipated full year sales decline of about 25%, gross margin is increasing. Gross margin for 2009 should approach 20%, a significant improvement over recent years, due to our cost containment efforts, headcount reduction, facility consolidations and dispositions.

"Our already strong balance sheet improved further during the quarter. Net debt declined to just 24% of net capital (versus 32% one year ago), well below our 30-40% long-term target range. We have no commercial paper outstanding (but have $600 million available), and have no significant long-term debt maturing until 2013. During the quarter our cash balance grew and working capital decreased.

"Operating cash flow for the first half of 2009 was $288 million, more than sufficient to fully fund this entire year’s dividends (approximately $155 million) and capital expenditures (about $100 million). For 2009, operating cash flow will readily exceed our prior target of $300 million and should surpass $400 million.

"Over the long term, we still intend to use a significant share of excess cash flow to repurchase our stock. In January we announced our intent to purchase 4 million shares during 2009, and at mid-year we are on track with that objective. We are purposely repurchasing stock at a slower pace than in 2008, because we consider it prudent to conserve cash given the current macroeconomic uncertainties. 2 of 5

"Weak demand continues across our markets, and shows few signs of imminent improvement. Even so, we are extremely well positioned, from both balance sheet and cost structure perspectives, to ride out the demand downturn. Our primary financial goal, adopted in late 2007, is to achieve Total Shareholder Return (TSR1) within the top 1/3 of the S&P 500. As measured from the end of 2007, our TSR performance places us within the top 7% of the S&P 500 companies as of yesterday’s market close."

1 TSR = (Change in Stock Price + Dividends Received) / Beginning Stock Price

During the quarter Leggett declared a $.25 dividend. At yesterday’s closing share price of $15.94, the indicated annual dividend of $1.00 per share generates a dividend yield of 6.3%.

During the second quarter, the company repurchased 0.8 million shares of its stock at an average of $14.64 per share, and issued 0.4 million shares through employee benefit plans. As a result, shares outstanding decreased by 0.4 million shares to 156.3 million.

Late in the quarter Leggett learned that the aluminum operations divested in July 2008 needed a capital infusion from the buyer due to deterioration in business conditions. This led to a reduction in value of the note Leggett accepted as partial payment last summer. As explained in the company’s Form 8-K filed on July 7, Leggett accepted a more subordinate position in the capital structure of the divested operations. These events resulted in a $10.6 million non-cash reduction in EBIT for the quarter, but will also yield a $6.4 million cash flow benefit later this year (from a reduction in taxes). Excluding this non-cash charge, 2Q earnings would have been $.16 per share.

Leggett projects full year sales (from Continuing Operations) of approximately $3.0 billion (prior guidance was $2.9-$3.3 billion). Sales for the first half of the year were $1.48 billion; typically, Leggett’s sales for the second half of the year are approximately equivalent to sales for the first half.

Earnings per share (from Continuing Operations) for the full year 2009 are expected to be $.55 - $.70. The reduction in earnings guidance (versus the prior $.60 - $.90 expectation) stems from two sources. First, sales are now projected to be in the lower portion of the prior guidance range. Second, two significant, unanticipated, and unusual items – the bad debt expense associated with a customer bankruptcy and the divestiture note write-down – cause an $.08 reduction to the guidance range.

Earnings for the first half of the year were $.14 per share ($.02 in 1Q, $.12 in 2Q); earnings for the second half of the year are anticipated to be $.41 - $.56. The first half of 2009 was negatively impacted by steel deflation (as inventory valuation and selling prices reflected lower steel costs); this impact is not anticipated to recur during the second half of the year. Additional improvement for the remainder of the year should result from reduced bad debt expenses, non-recurrence of the divestiture note write-down, and cost reduction initiatives.

All of Leggett’s segments use the FIFO (first-in, first-out) method for valuing inventories. An adjustment is made at the corporate level to convert about 60% of the inventories to the LIFO (last-in, first-out) method. Since the LIFO benefit is not recorded at the segment level, 2009 segment EBIT margins will be unusually low. Steel cost decreases contribute to an anticipated LIFO benefit of $72 million for the full year (for Continuing Operations), which contrasts with $62 million of LIFO expense in 2008. Earnings for the second quarter reflect a LIFO benefit of $19.0 million, compared to LIFO expense of $11.5 million in 2Q 2008. 3 of 5

Residential Furnishings – Total sales from Continuing Operations decreased $138 million, or 25%. Weak market demand more than offset inflation-related price increases and market share gains in specific product categories. EBIT (earnings before interest and income taxes) from Continuing Operations decreased $25 million, with the income impact of significantly lower unit volumes partially offset by cost reductions.

Commercial Fixturing & Components – Total sales from Continuing Operations decreased $53 million, or 29%, due to the company’s decision to walk away from sales with unacceptable profit margins, market softness in office furniture components, and reduced spending by retailers. EBIT from Continuing Operations decreased $7 million.

Industrial Materials – Total sales decreased $95 million, or 38%, as a result of weak demand and lower steel prices. EBIT decreased $9 million due to lower sales, and was partially offset by cost reductions.

Specialized Products – Total sales from Continuing Operations decreased $60 million, or 33%. Weak global demand in all parts of the segment – automotive, machinery, and commercial vehicle products – led to the decline. EBIT from Continuing Operations declined $14 million due to lower sales, and was partially offset by cost reductions.

A set of slides containing summary financial information is available from the Investor Relations section of Leggett’s website at www.leggett.com. Management will host a conference call at 8:00 a.m. Central (9:00 a.m. Eastern) on July 24. The webcast can be accessed (live or replay) from Leggett’s website. The dial-in number is (201) 689-8341; there is no passcode. Third quarter results will be released after the market closes on Thursday, October 22, 2009, with a conference call the next morning.

FOR MORE INFORMATION: Visit Leggett’s website at www.leggett.com.