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CARTHAGE, Mo., July 31, 2023 /PRNewswire/ --
President and CEO Mitch Dolloff commented, "Second quarter earnings were in line with expectations on lower than anticipated sales. We saw sustained strength in the Specialized Products segment results although weak consumer demand continued to affect results in the Bedding Products and Furniture, Flooring & Textile Products segments.
"We are lowering our full year guidance to reflect continued volatility in the macroeconomic environment and low visibility in several of our end markets. Our previous guidance anticipated a modest improvement in residential end markets in the second half of the year. We are encouraged by the continued recovery in our industrial businesses but have yet to see an upward trajectory in residential end markets.
"We are maintaining our emphasis on improving areas within our control and proactively addressing the effects of the macroeconomic impacts on our business. Our employees are doing an excellent job engaging with our customers on new product opportunities and driving operational efficiency and strong cash management. Our focused execution and enduring fundamentals position Leggett for long-term success."
SECOND QUARTER RESULTS
Second quarter sales were $1.22 billion, an 8% decrease versus second quarter last year.
Second quarter EBIT was $96 million, down $47 million or 33% from second quarter 2022 EBIT, and adjusted1 EBIT was $92 million, a $51 million decrease.
Second quarter EPS was $.40, a $.30 decrease versus second quarter 2022 EPS. Second quarter adjusted1 EPS was $.38, down $.32 versus second quarter 2022 EPS. EPS decreased primarily from volume declines, lower metal margin, higher tax rate ($.02/share), and higher interest expense ($.01/share).
DEBT, CASH FLOW, AND LIQUIDITY
DIVIDEND
STOCK REPURCHASES
2023 GUIDANCE
SEGMENT RESULTS – Second Quarter 2023 (versus 2Q 2022)
Bedding Products –
Specialized Products –
Furniture, Flooring & Textile Products –
SLIDES AND CONFERENCE CALL
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 7:30 a.m.Central (8:30 a.m. Eastern) on Tuesday, August 1. The webcast can be accessed from Leggett's website. The dial-in number is (201) 689-8341; there is no passcode.
FOR MORE INFORMATION: Visit Leggett's website at www.leggett.com.
COMPANY DESCRIPTION: Leggett & Platt (NYSE: LEG) is a diversified manufacturer that designs and produces a broad variety of engineered components and products that can be found in many homes and automobiles. The 140-year-old Company is comprised of 15 business units, approximately 20,000 employees, and 135 manufacturing facilities located in 18 countries.
Leggett & Platt is the leading U.S.-based manufacturer of: a) bedding components; b) automotive seat support and lumbar systems; c) specialty bedding foams and private label finished mattresses; d) components for home furniture and work furniture; e) flooring underlayment; f) adjustable beds; and g) bedding industry machinery.
FORWARD-LOOKING STATEMENTS: This press release contains "forward-looking statements," including, but not limited to the amount of the Company's forecasted 2023 full-year volume; volume in residential end markets; insurance proceeds from tornado damage; acquisition sales growth; sales, EPS, adjusted EPS; capital expenditures; depreciation and amortization; net interest expense; fully diluted shares; operating cash flow; EBIT margin; adjusted EBIT margin; effective tax rate; amount of dividends; raw material related price decreases; currency impact; volume in each of the Company's segments; and minimal acquisitions and share repurchases. Such forward-looking statements are expressly qualified by the cautionary statements described in this provision and reflect only the beliefs of Leggett at the time the statement is made. Because all forward-looking statements deal with the future, they are subject to risks, uncertainties and developments which might cause actual events or results to differ materially from those envisioned or reflected in any forward-looking statement. Moreover, we do not have, and do not undertake, any duty to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement was made. Some of these risks and uncertainties include: the adverse impact on our sales, earnings, our liquidity impacting our ability to pay our obligations as they come due, margins, cash flow, costs, and financial condition caused by: the Russian invasion of Ukraine; global inflationary and deflationary impacts; macro-economic impacts; the demand for our products and our customers' products; growth rates in the industries in which we participate and opportunities in those industries; our manufacturing facilities' ability to remain fully operational and obtain necessary raw materials and parts, maintain appropriate labor levels and ship finished products to customers; the impairment of goodwill and long-lived assets; restructuring-related costs; our ability to access the commercial paper market or borrow under our revolving credit facility, including compliance with restrictive covenants that may limit our operational flexibility and our ability to timely pay our debt; adverse impact from supply chain shortages and disruptions; our ability to manage working capital; increases or decreases in our capital needs, which may vary depending on acquisition or divestiture activity; our ability to collect trade receivables; market conditions; price and product competition from foreign and domestic competitors; cost and availability of raw materials due to supply chain disruptions or otherwise; labor and energy costs; cash generation sufficient to pay the dividend; cash repatriation from foreign accounts; our ability to pass along raw material cost increases through increased selling prices; conflict between China and Taiwan; our ability to maintain profit margins if customers change the quantity or mix of our components in their finished products; our ability to maintain and grow the profitability of acquired companies; political risks; changing tax rates; increased trade costs; risks related to operating in foreign countries; cybersecurity incidents; customer bankruptcies, losses and insolvencies; disruption to our steel rod mill and other operations and supply chain because of severe weather-related events, natural disaster, fire, explosion, terrorism, pandemic, governmental action or labor strikes; ability to develop innovative products; bank failures; foreign currency fluctuation; the amount of share repurchases; the imposition or continuation of anti-dumping duties on innersprings, steel wire rod and mattresses; data privacy; climate change compliance costs and regulatory, market, technological and reputational impacts; our ESG obligations; litigation risks; and risk factors in the "Forward-Looking Statements" and "Risk Factors" sections in Leggett's most recent Form 10-K and Form 10-Q filed with the SEC.
CONTACT: Investor Relations, (417) 358-8131 or invest@leggett.comSusan R. McCoy, Senior Vice President, Investor RelationsCassie J. Branscum, Senior Director, Investor RelationsKolina A. Talbert, Manager, Investor Relations
1 Please refer to attached tables for Non-GAAP Reconciliations2 Trade sales excluding acquisitions/divestitures in the last 12 months
LEGGETT & PLATT | Page 5 of 7 | July 31, 2023 | ||||||||||
RESULTS OF OPERATIONS | SECOND QUARTER | YEAR TO DATE | ||||||||||
(In millions, except per share data) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Trade sales | $ 1,221.2 | $ 1,334.2 | (8) % | $ 2,434.8 | $ 2,656.5 | (8) % | ||||||
Cost of goods sold | 1,000.1 | 1,065.8 | 1,995.1 | 2,120.8 | ||||||||
Gross profit | 221.1 | 268.4 | (18) % | 439.7 | 535.7 | (18) % | ||||||
Selling & administrative expenses | 119.2 | 105.4 | 13 % | 235.2 | 217.1 | 8 % | ||||||
Amortization | 16.8 | 16.4 | 33.7 | 33.4 | ||||||||
Other (income) expense, net | (10.6) | 3.6 | (14.2) | 4.6 | ||||||||
Earnings before interest and taxes | 95.7 | 143.0 | (33) % | 185.0 | ` | 280.6 | (34) % | |||||
Net interest expense | 22.0 | 20.0 | 43.0 | 39.5 | ||||||||
Earnings before income taxes | 73.7 | 123.0 | 142.0 | 241.1 | ||||||||
Income taxes | 19.5 | 27.8 | 34.3 | 55.5 | ||||||||
Net earnings | 54.2 | 95.2 | 107.7 | 185.6 | ||||||||
Less net income from noncontrolling interest | — | — | — | — | ||||||||
Net Earnings Attributable to L&P | $ 54.2 | $ 95.2 | (43) % | $ 107.7 | $ 185.6 | (42) % | ||||||
Earnings per diluted share | ||||||||||||
Net earnings per diluted share | $ 0.40 | $ 0.70 | (43) % | $ 0.79 | $ 1.36 | (42) % | ||||||
Shares outstanding | ||||||||||||
Common stock (at end of period) | 133.2 | 132.6 | 0.5 % | 133.2 | 132.6 | 0.5 % | ||||||
Basic (average for period) | 136.2 | 136.3 | 136.1 | 136.4 | ||||||||
Diluted (average for period) | 136.6 | 136.7 | (0.1) % | 136.4 | 136.8 | (0.3) % | ||||||
CASH FLOW | SECOND QUARTER | YEAR TO DATE | ||||||||||
(In millions) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Net earnings | $ 54.2 | $ 95.2 | $ 107.7 | $ 185.6 | ||||||||
Depreciation and amortization | 44.7 | 44.5 | 90.1 | 90.2 | ||||||||
Working capital decrease (increase) | 11.0 | (55.7) | (7.8) | (170.1) | ||||||||
Impairments | — | — | — | — | ||||||||
Other operating activities | 0.7 | 5.8 | 17.3 | 23.1 | ||||||||
Net Cash from Operating Activities | $ 110.6 | $ 89.8 | 23 % | $ 207.3 | $ 128.8 | 61 % | ||||||
Additions to PP&E | (30.5) | (22.1) | (68.2) | (40.8) | ||||||||
Purchase of companies, net of cash | — | — | — | — | ||||||||
Proceeds from disposals of assets and businesses | 4.8 | 0.3 | 5.3 | 2.7 | ||||||||
Dividends paid | (58.6) | (56.1) | (116.9) | (112.1) | ||||||||
Repurchase of common stock, net | (0.1) | (35.3) | (5.3) | (56.9) | ||||||||
Additions (payments) to debt, net | (90.2) | (18.5) | (61.7) | 2.4 | ||||||||
Other | (8.1) | (15.5) | (4.6) | (15.9) | ||||||||
Increase (Decrease) in Cash & Equivalents | $ (72.1) | $ (57.4) | $ (44.1) | $ (91.8) | ||||||||
FINANCIAL POSITION | Jun 30, | Dec 31, | ||||||||||
(In millions) | 2023 | 2022 | Change | |||||||||
Cash and equivalents | $ 272.4 | $ 316.5 | ||||||||||
Receivables | 702.7 | 675.0 | ||||||||||
Inventories | 857.8 | 907.5 | ||||||||||
Other current assets | 72.9 | 59.0 | ||||||||||
Total current assets | 1,905.8 | 1,958.0 | (3) % | |||||||||
Net fixed assets | 789.2 | 772.4 | ||||||||||
Operating lease right-of-use assets | 212.0 | 195.0 | ||||||||||
Goodwill | 1,477.1 | 1,474.4 | ||||||||||
Intangible assets and deferred costs, both at net | 760.2 | 786.3 | ||||||||||
TOTAL ASSETS | $ 5,144.3 | $ 5,186.1 | (1) % | |||||||||
Trade accounts payable | $ 507.4 | $ 518.4 | ||||||||||
Current debt maturities | 8.2 | 9.4 | ||||||||||
Current operating lease liabilities | 56.3 | 49.5 | ||||||||||
Other current liabilities | 383.7 | 390.8 | ||||||||||
Total current liabilities | 955.6 | 968.1 | (1) % | |||||||||
Long-term debt | 2,016.4 | 2,074.2 | (3) % | |||||||||
Operating lease liabilities | 167.2 | 153.6 | ||||||||||
Deferred taxes and other liabilities | 336.5 | 348.8 | ||||||||||
Equity | 1,668.6 | 1,641.4 | 2 % | |||||||||
Total Capitalization | 4,188.7 | 4,218.0 | (1) % | |||||||||
TOTAL LIABILITIES & EQUITY | $ 5,144.3 | $ 5,186.1 | (1) % | |||||||||
LEGGETT & PLATT | Page 6 of 7 | July 31, 2023 | ||||||||||
SEGMENT RESULTS 1 | SECOND QUARTER | YEAR TO DATE | ||||||||||
(In millions) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Bedding Products | ||||||||||||
Trade sales | $ 504.4 | $ 612.5 | (18) % | $ 1,032.9 | $ 1,251.9 | (17) % | ||||||
EBIT | 23.0 | 69.1 | (67) % | 56.3 | 145.3 | (61) % | ||||||
EBIT margin | 4.6 % | 11.3 % | -670 bps | 2 | 5.5 % | 11.6 % | -610 bps | |||||
Gain from net insurance proceeds from tornado damage | (0.6) | — | (0.6) | — | ||||||||
Adjusted EBIT3 | 22.4 | 69.1 | (68) % | 55.7 | 145.3 | (62) % | ||||||
Adjusted EBIT margin3 | 4.4 % | 11.3 % | -690 bps | 5.4 % | 11.6 % | -620 bps | ||||||
Depreciation and amortization | 25.5 | 26.2 | 51.1 | 52.4 | ||||||||
Adjusted EBITDA | 47.9 | 95.3 | (50) % | 106.8 | 197.7 | (46) % | ||||||
Adjusted EBITDA margin | 9.5 % | 15.6 % | -610 bps | 10.3 % | 15.8 % | -550 bps | ||||||
Specialized Products | ||||||||||||
Trade sales | $ 321.2 | $ 260.1 | 23 % | $ 641.9 | $ 524.2 | 22 % | ||||||
EBIT | 33.1 | 21.4 | 55 % | 61.8 | 41.7 | 48 % | ||||||
EBIT margin | 10.3 % | 8.2 % | 210 bps | 9.6 % | 8.0 % | 160 bps | ||||||
Depreciation and amortization | 10.3 | 9.9 | 21.0 | 20.7 | ||||||||
EBITDA | 43.4 | 31.3 | 39 % | 82.8 | 62.4 | 33 % | ||||||
EBITDA margin | 13.5 % | 12.0 % | 150 bps | 12.9 % | 11.9 % | 100 bps | ||||||
Furniture, Flooring & Textile Products | ||||||||||||
Trade sales | $ 395.6 | $ 461.6 | (14) % | $ 760.0 | $ 880.4 | (14) % | ||||||
EBIT | 38.9 | 51.3 | (24) % | 67.2 | 94.0 | (29) % | ||||||
EBIT margin | 9.8 % | 11.1 % | -130 bps | 8.8 % | 10.7 % | -190 bps | ||||||
Gain from net insurance proceeds from tornado damage | (3.0) | — | (3.0) | — | ||||||||
Adjusted EBIT3 | 35.9 | 51.3 | (30) % | 64.2 | 94.0 | (32) % | ||||||
Adjusted EBIT Margin3 | 9.1 % | 11.1 % | -200 bps | 8.4 % | 10.7 % | -230 bps | ||||||
Depreciation and amortization | 5.7 | 5.9 | 11.5 | 11.8 | ||||||||
Adjusted EBITDA | 41.6 | 57.2 | (27) % | 75.7 | 105.8 | (28) % | ||||||
Adjusted EBITDA margin | 10.5 % | 12.4 % | -190 bps | 10.0 % | 12.0 % | -200 bps | ||||||
Total Company | ||||||||||||
Trade sales | $ 1,221.2 | $ 1,334.2 | (8) % | $ 2,434.8 | $ 2,656.5 | (8) % | ||||||
EBIT - segments | 95.0 | 141.8 | (33) % | 185.3 | 281.0 | (34) % | ||||||
Intersegment eliminations and other | 0.7 | 1.2 | (0.3) | (0.4) | ||||||||
EBIT | 95.7 | 143.0 | (33) % | 185.0 | 280.6 | (34) % | ||||||
EBIT margin | 7.8 % | 10.7 % | -290 bps | 7.6 % | 10.6 % | -300 bps | ||||||
Gain from net insurance proceeds from tornado damage3 | (3.6) | — | (3.6) | — | ||||||||
Adjusted EBIT 3 | 92.1 | 143.0 | (36) % | 181.4 | 280.6 | (35) % | ||||||
Adjusted EBIT margin3 | 7.5 % | 10.7 % | -320 bps | 7.5 % | 10.6 % | -310 bps | ||||||
Depreciation and amortization - segments | 41.5 | 42.0 | 83.6 | 84.9 | ||||||||
Depreciation and amortization - unallocated 4 | 3.2 | 2.5 | 6.5 | 5.3 | ||||||||
Adjusted EBITDA | $ 136.8 | $ 187.5 | (27) % | $ 271.5 | $ 370.8 | (27) % | ||||||
Adjusted EBITDA margin | 11.2 % | 14.1 % | -290 bps | 11.2 % | 14.0 % | -280 bps | ||||||
LAST SIX QUARTERS | 2022 | 2023 | ||||||||||
Selected Figures (In Millions) | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | ||||||
Trade sales | 1,322.3 | 1,334.2 | 1,294.4 | 1,195.8 | 1,213.6 | 1,221.2 | ||||||
Sales growth (vs. prior year) | 15 % | 5 % | (2) % | (10) % | (8) % | (8) % | ||||||
Volume growth (same locations vs. prior year) | (4) % | (6) % | (8) % | (12) % | (7) % | (6) % | ||||||
Adjusted EBIT3 | 137.6 | 143.0 | 113.2 | 91.2 | 89.3 | 92.1 | ||||||
Cash from operations | 39.0 | 89.8 | 65.5 | 247.1 | 96.7 | 110.6 | ||||||
Adjusted EBITDA (trailing twelve months) 3 | 764.6 | 760.3 | 726.8 | 664.8 | 616.2 | 565.5 | ||||||
(Long-term debt + current maturities - cash and equivalents) / adj. EBITDA 3,5 | 2.32 | 2.39 | 2.63 | 2.66 | 2.88 | 3.10 | ||||||
Organic Sales (Vs. Prior Year) 6 | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | ||||||
Bedding Products | 16 % | — % | (12) % | (19) % | (17) % | (18) % | ||||||
Specialized Products | 2 % | 8 % | 19 % | 5 % | 8 % | 12 % | ||||||
Furniture, Flooring & Textile Products | 17 % | 10 % | — % | (13) % | (15) % | (16) % | ||||||
Overall | 13 % | 5 % | (3) % | (12) % | (11) % | (11) % | ||||||
1Segment and overall company margins calculated on net trade sales. | ||||||||||||
2bps = basis points; a unit of measure equal to 1/100th of 1%. | ||||||||||||
3Refer to next page for non-GAAP reconciliations. | ||||||||||||
4Consists primarily of depreciation of non-operating assets. | ||||||||||||
5EBITDA based on trailing twelve months. | ||||||||||||
6Trade sales excluding sales attributable to acquisitions and divestitures consummated in the last 12 months. | ||||||||||||
LEGGETT & PLATT | Page 7 of 7 | July 31, 2023 | ||||||||||
RECONCILIATION OF REPORTED (GAAP) TO ADJUSTED (Non-GAAP) FINANCIAL MEASURES 10 | ||||||||||||
Non-GAAP Adjustments 7 | 2022 | 2023 | ||||||||||
(In millions, except per share data) | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | ||||||
Gain from net insurance proceeds from tornado damage | — | — | — | — | — | (3.6) | ||||||
Non-GAAP Adjustments (Pretax)8 | — | — | — | — | — | (3.6) | ||||||
Income tax impact | — | — | — | — | — | 0.9 | ||||||
Non-GAAP Adjustments (After Tax) | — | — | — | — | — | (2.7) | ||||||
Diluted shares outstanding | 136.9 | 136.7 | 136.1 | 136.1 | 136.3 | 136.6 | ||||||
EPS Impact of Non-GAAP Adjustments | — | — | — | — | — | (0.02) | ||||||
Adjusted EBIT, EBITDA, Margin, and EPS 7 | 2022 | 2023 | ||||||||||
(In millions, except per share data) | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | ||||||
Trade sales | 1,322.3 | 1,334.2 | 1,294.4 | 1,195.8 | 1,213.6 | 1,221.2 | ||||||
EBIT (earnings before interest and taxes) | 137.6 | 143.0 | 113.2 | 91.2 | 89.3 | 95.7 | ||||||
Non-GAAP adjustments (pretax) | — | — | — | — | — | (3.6) | ||||||
Adjusted EBIT | 137.6 | 143.0 | 113.2 | 91.2 | 89.3 | 92.1 | ||||||
EBIT margin | 10.4 % | 10.7 % | 8.7 % | 7.6 % | 7.4 % | 7.8 % | ||||||
Adjusted EBIT Margin | 10.4 % | 10.7 % | 8.7 % | 7.6 % | 7.4 % | 7.5 % | ||||||
EBIT | 137.6 | 143.0 | 113.2 | 91.2 | 89.3 | 95.7 | ||||||
Depreciation and amortization | 45.7 | 44.5 | 44.1 | 45.5 | 45.4 | 44.7 | ||||||
EBITDA | 183.3 | 187.5 | 157.3 | 136.7 | 134.7 | 140.4 | ||||||
Non-GAAP adjustments (pretax) | — | — | — | — | — | (3.6) | ||||||
Adjusted EBITDA | 183.3 | 187.5 | 157.3 | 136.7 | 134.7 | 136.8 | ||||||
EBITDA margin | 13.9 % | 14.1 % | 12.2 % | 11.4 % | 11.1 % | 11.5 % | ||||||
Adjusted EBITDA Margin | 13.9 % | 14.1 % | 12.2 % | 11.4 % | 11.1 % | 11.2 % | ||||||
Diluted EPS | 0.66 | 0.70 | 0.52 | 0.39 | 0.39 | 0.40 | ||||||
EPS impact of non-GAAP adjustments | — | — | — | — | — | (0.02) | ||||||
Adjusted EPS | 0.66 | 0.70 | 0.52 | 0.39 | 0.39 | 0.38 | ||||||
Net Debt to Adjusted EBITDA 9 | 2022 | 2023 | ||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | |||||||
Total debt | 2,104.4 | 2,090.8 | 2,141.0 | 2,083.6 | 2,117.8 | 2,024.6 | ||||||
Less: cash and equivalents | (327.3) | (269.9) | (226.2) | (316.5) | (344.5) | (272.4) | ||||||
Net debt | 1,777.1 | 1,820.9 | 1,914.8 | 1,767.1 | 1,773.3 | 1,752.2 | ||||||
Adjusted EBITDA, trailing 12 months | 764.6 | 760.3 | 726.8 | 664.8 | 616.2 | 565.5 | ||||||
Net Debt / 12-month Adjusted EBITDA | 2.32 | 2.39 | 2.63 | 2.66 | 2.88 | 3.10 | ||||||
7Management and investors use these measures as supplemental information to assess operational performance. | ||||||||||||
8The ($3.6) 2023 non-GAAP adjustment is included in the Other (income) expense, netline on the income statement. | ||||||||||||
9Management and investors use this ratio as supplemental information to assess ability to pay off debt. These ratios are calculated differently than the Company's credit facility covenant ratio. | ||||||||||||
10Calculations impacted by rounding. | ||||||||||||
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SOURCE Leggett & Platt
