Leggett Responds To Higher Steel Costs

Felix Wright, chairman and CEO, commented: "We continue to see significant increases in steel costs, with steel scrap prices approaching record highs. Worldwide demand for steel has risen sharply over the past few months, driven to a large degree by industrial growth in China and a broadening recovery in U.S. manufacturing. The U.S. steel industry has reduced productive capacity over the past two years through plant closings and bankruptcies. These rationalizations, coupled with a weaker dollar, have reduced the supply of steel available in the U.S. market.

"Our customers are long-term partners. We value those relationships and we have taken steps over the past three years to help them control their costs. In many cases, we delayed passing along the higher prices that we paid for raw materials, energy, and other items. During times like these, when we see rapid cost increases, we have no choice but to recover these costs. We have begun notifying our customers and will implement these new prices in early 2004. The price increases will affect 25-30 percent of Leggett's volume and will vary by product line, but will range from 4-6 percent."