Financial Performance & Outlook - First quarter 2025 sales reached $1 billion, with an adjusted EBIT of $67 million (6.5% margin) and adjusted EBITDA of $98 million (9.6% margin)[29] - The company anticipates 2025 sales between $4 billion and $4.3 billion, a decrease of 2% to 9% compared to 2024, and adjusted EPS between $1 and $1.20[31, 32] - Operating cash for 2025 is projected to be between $275 million and $325 million[33] Segment Performance - Bedding Products segment expects a volume decrease in the low double digits at the midpoint for 2025[36] - Specialized Products segment anticipates a volume decrease in the mid-single digits at the midpoint for 2025[37] - Furniture, Flooring & Textile Products segment projects a volume decrease in the low single digits at the midpoint for 2025[38] Strategic Initiatives - The company's restructuring plan is on track to realize a $55 million to $60 million EBIT benefit in 2025[57] - Restructuring sales attrition is estimated at approximately $60 million in 2025[57] - The company has signed an agreement to exit the Aerospace business, expected to close in the second half of 2025[57] Tariff Impacts & Mitigation - The company is actively pursuing opportunities to capture demand for domestically-produced products and sourcing from lowest total cost countries to mitigate tariff impacts[51] - Foreign direct sourcing exposure is approximately $400 million annually before tariff implementation[49] Bedding Market Trends - The domestic mattress market experienced a 20% demand decline from 2021 to 2024, while domestic production declined 35% due to import market share growth[88]

Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence, including daily updates, access to the Zacks Rank, and Equity Research reports [1][2] - The service includes the Zacks Style Scores, which are designed to help investors select stocks with the highest potential to outperform the market in the short term [2][9] Group 2: Zacks Style Scores - The Zacks Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - The Value Score identifies undervalued stocks using financial ratios like P/E and Price/Cash Flow [3] - The Growth Score assesses stocks based on projected earnings and sales growth [4] - The Momentum Score evaluates stocks based on price trends and earnings estimate changes [5] - The VGM Score combines all three styles to highlight stocks with the best overall potential [6] Group 3: Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in stock selection [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [8] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [10] Group 4: Company Spotlight - Leggett & Platt - Leggett & Platt Inc. is a global manufacturer based in Carthage, MO, producing a variety of engineered components for homes, offices, and automobiles [12] - The company currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of A, indicating solid performance potential [12] - Leggett & Platt is particularly appealing to growth investors, with a Growth Style Score of B and a forecasted year-over-year earnings growth of 5.7% for the current fiscal year [13] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.02 to $1.11 per share [13]

Part I - Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements.) Presents Q1 2025 unaudited condensed consolidated financial statements, including balance sheet, income, cash flows, and key notes [Consolidated Financial Statements Overview](index=5&type=section&id=Consolidated%20Financial%20Statements) Summarizes the company's Q1 2025 financial performance, balance sheet, and cash flow activities Q1 2025 Key Financial Results | Financial Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | | :--- | :--- | :--- | | Net Trade Sales | $1,022.1 Million | $1,096.9 Million | | Gross Profit | $190.0 Million | $186.4 Million | | EBIT | $62.9 Million | $63.0 Million | | Net Earnings | $30.6 Million | $31.6 Million | | Diluted EPS | $0.22 | $0.23 | Balance Sheet Summary (as of March 31, 2025) | Account | Amount (Millions) | | :--- | :--- | | Total Current Assets | $1,784.1 | | Total Assets | $3,748.9 | | Total Current Liabilities | $810.4 | | Total Liabilities | $3,001.3 | | Total Equity | $747.6 | Cash Flow Summary (Three Months Ended March 31, 2025) | Cash Flow Activity | Amount (Millions) | | :--- | :--- | | Net Cash from Operating Activities | $6.8 | | Net Cash Used for Investing Activities | ($6.1) | | Net Cash Provided by Financing Activities | $60.0 | | **Increase in Cash and Cash Equivalents** | **$62.4** | [Note B: Revenue](index=11&type=section&id=B%E2%80%94Revenue) Details the company's revenue disaggregation by product family for Q1 2025 and Q1 2024 Revenue by Product Family (Three Months Ended March 31) | Product Family | 2025 (Millions) | 2024 (Millions) | | :--- | :--- | :--- | | **Bedding Products** | $390.7 | $448.0 | | **Specialized Products** | $300.1 | $315.9 | | Automotive Group | $197.2 | $210.9 | | Aerospace Products Group | $53.0 | $45.6 | | Hydraulic Cylinders Group | $49.9 | $59.4 | | **Furniture, Flooring & Textile Products** | $331.3 | $333.0 | | **Total** | **$1,022.1** | **$1,096.9** | [Note C: Segment Information](index=12&type=section&id=C%E2%80%94Segment%20Information) Outlines the company's operating segments and their financial performance - The company operates and reports across three segments: Bedding Products, Specialized Products, and Furniture, Flooring & Textile Products[37](index=37&type=chunk)[39](index=39&type=chunk) Segment EBIT (Three Months Ended March 31) | Segment | 2025 EBIT (Millions) | 2024 EBIT (Millions) | | :--- | :--- | :--- | | Bedding Products | $9.6 | $15.7 | | Specialized Products | $28.4 | $23.7 | | Furniture, Flooring & Textile Products | $24.8 | $23.6 | | **Total Segment EBIT** | **$62.8** | **$63.0** | [Note E: Restructuring and Related Activities](index=14&type=section&id=E%E2%80%94Restructuring%20and%20Related%20Activities) Details the ongoing 2024 Restructuring Plan, its scope, expected completion, and associated costs - The company is executing a 2024 Restructuring Plan, primarily in the Bedding Products segment, which involves consolidating 15 to 20 production and distribution facilities. The plan is expected to be substantially complete by the end of 2025[45](index=45&type=chunk)[46](index=46&type=chunk) 2024 Restructuring Plan Costs | Cost Type | Expected Total (Millions) | Incurred to Date (Millions) | Incurred Q1 2025 (Millions) | | :--- | :--- | :--- | :--- | | Net Restructuring & Related | $60.0 - $70.0 | $48.8 | $5.2 | | Goodwill & Asset Impairment | ~$20.0 | $4.5 | $0.3 | | **Total** | **$80.0 - $90.0** | **$53.3** | **$5.5** | - Additional restructuring costs of **$1.4 Million** were incurred in Q1 2025 related to the pending sale of the Aerospace business[48](index=48&type=chunk) [Note L: Assets Held For Sale and Divestitures](index=21&type=section&id=L%E2%80%94Assets%20Held%20For%20Sale%20and%20Divestitures) Details the planned divestiture of the Aerospace Products Group, including sale terms and assets held for sale - On April 2, 2025, the company signed an agreement to sell its Aerospace Products Group for a cash price of **$285.0 Million**, subject to adjustments. The group was classified as held for sale at March 31, 2025[70](index=70&type=chunk) Net Assets Held for Sale (as of March 31, 2025) | Category | Amount (Millions) | | :--- | :--- | | Total assets held for sale | $229.0 | | Total liabilities held for sale | $41.7 | | **Net assets held for sale** | **$187.3** | - The Aerospace Products Group generated external sales of **$53.0 Million** and pretax earnings of **$7.2 Million** in Q1 2025[72](index=72&type=chunk) [Management's Discussion and Analysis (MD&A)](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses Q1 2025 financial results, key business factors, segment performance, liquidity, and capital structure [Q1 2025 Highlights](index=23&type=section&id=Highlights) Summarizes key financial and operational highlights for Q1 2025, including sales, EPS, divestiture, and dividend - Q1 2025 trade sales were **$1.022 Billion**, a **7% decrease YoY**[78](index=78&type=chunk) - EPS was **$0.22**, compared to **$0.23 in Q1 2024**, including a **$0.04 restructuring charge** and a **$0.02 real estate sale gain** in Q1 2025[78](index=78&type=chunk) - An agreement was reached to sell the Aerospace Products Group for **$285 Million**, with expected after-tax proceeds of approximately **$240 Million**[80](index=80&type=chunk)[97](index=97&type=chunk) - The quarterly dividend was declared at **$0.05 per share**, a significant reduction from **$0.46** in the prior year's first quarter[82](index=82&type=chunk) [Major Factors Impacting Business](index=24&type=section&id=Major%20Factors%20That%20Impact%20Our%20Business) Discusses key factors impacting the business, including restructuring, market demand, competition, and goodwill impairment risks - The 2024 Restructuring Plan is progressing, with an expected annualized EBIT benefit of **$60–$70 Million** and annual sales attrition of **~$80 Million** once fully implemented[111](index=111&type=chunk)[112](index=112&type=chunk) - Market demand is expected to be down in 2025 from 2024 levels due to a dynamic macroeconomic environment, particularly weak residential end markets and automotive industry volatility[119](index=119&type=chunk)[121](index=121&type=chunk) - The company faces pressure from foreign competitors but maintains competitiveness through efficiency, vertical integration, and logistics, supported by extended antidumping duties on mattresses and innersprings[131](index=131&type=chunk)[134](index=134&type=chunk) - Goodwill impairment testing in Q2 2024 resulted in significant write-downs, with a sustained lower stock price potentially leading to further material impairment in Q2 2025[101](index=101&type=chunk)[103](index=103&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Analyzes Q1 2025 operational results, detailing changes in trade sales, EBIT, and segment performance drivers - Q1 2025 trade sales decreased **7% YoY** to **$1,022.1 Million**, driven by **5% volume decline**, **1% raw material price decreases**, and **1% currency impact**[140](index=140&type=chunk) - EBIT was flat YoY at **$63 Million**, with restructuring and cost management benefits offset by lower volume, metal margin compression, and reduced asset sale gains[141](index=141&type=chunk) Segment Performance (Q1 2025 vs Q1 2024) | Segment | Sales Change | EBIT Change (Millions) | Key Drivers | | :--- | :--- | :--- | :--- | | Bedding Products | -13% | -$6.1 Million | Lower volume, metal margin compression, partially offset by restructuring benefits. | | Specialized Products | -5% | +$4.7 Million | Cost management and efficiency improvements offset lower volume. | | Furniture, Flooring & Textile | -1% | +$1.2 Million | Gain on real estate sale and higher volume offset by pricing adjustments. | [Liquidity and Capitalization](index=33&type=section&id=Liquidity%20and%20Capitalization) Assesses the company's liquidity and capital structure, including cash, operating cash flow, debt, and capital allocation - Cash and cash equivalents were **$413 Million** at quarter-end, with most funds held by foreign operations, incurring approximately **$22 Million** in withholding taxes upon repatriation[156](index=156&type=chunk)[157](index=157&type=chunk) - Operating cash flow was **$7 Million**, an increase of **$13 Million YoY**, primarily due to a smaller use of working capital[82](index=82&type=chunk)[158](index=158&type=chunk) Working Capital Metrics (Days) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | DSO | 46 | 44 | 48 | | DIO | 73 | 77 | 81 | | DPO | 52 | 52 | 50 | - Total debt stands at **$1.9 Billion**. The company has a **$1.2 Billion** commercial paper program, with **$440 Million** outstanding and **$404 Million** available borrowing capacity as of March 31, 2025[175](index=175&type=chunk)[184](index=184&type=chunk)[188](index=188&type=chunk) - Near-term cash use priority is to deleverage the balance sheet, while long-term priorities include growth and shareholder returns, with minimal share repurchases expected for the remainder of 2025[176](index=176&type=chunk)[181](index=181&type=chunk) Part II - Other Information [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings.) Details ongoing legal matters, primarily focusing on antidumping and countervailing duty petitions related to mattresses - Antidumping duty orders on mattresses from China were extended, with duties up to **1,731%** remaining in place[218](index=218&type=chunk) - In July 2023, petitions were filed alleging mattress dumping from 12 additional countries, leading to preliminary injury determinations by the ITC and preliminary duties by the DOC[220](index=220&type=chunk)[221](index=221&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors.) Updates key business risks, including restructuring plan failure, credit rating impact, goodwill impairment, and debt covenant non-compliance - **Restructuring Risk:** The 2024 Restructuring Plan may not achieve intended outcomes, with potential changes to cost, benefit, and asset sale estimates impacting financial results[227](index=227&type=chunk)[234](index=234&type=chunk) - **Financial Risk:** Recent credit rating downgrades could adversely affect capital market access and increase borrowing costs, potentially forcing reliance on the credit facility at higher rates[238](index=238&type=chunk) - **Impairment Risk:** Significant goodwill and long-lived assets exist on the balance sheet, with a sustained low stock price potentially leading to a material goodwill impairment charge in Q2 2025[241](index=241&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) - **Covenant Risk:** Reduced earnings could limit borrowing capacity under the credit facility's leverage ratio covenant, with a breach potentially triggering default, accelerating debt, and severely impacting liquidity[247](index=247&type=chunk)[250](index=250&type=chunk)[252](index=252&type=chunk) [Issuer Purchases of Equity Securities](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Reports on issuer purchases of equity securities, noting no repurchases in Q1 2025 despite a standing Board authorization - No shares of the company's common stock were repurchased during the three months ended March 31, 2025[270](index=270&type=chunk) - The Board has a standing authorization to repurchase up to **10 Million shares** each calendar year, in place since 2004 and including 2025[272](index=272&type=chunk)

Group 1 - The Board of Directors of Leggett & Platt declared a dividend of $0.05 per share for the second quarter of 2025, payable on July 15, 2025, to shareholders of record on June 13, 2025 [1] - The annual meeting of shareholders resulted in the election of eight nominees as directors, ratification of PricewaterhouseCoopers as the independent registered public accountant for 2025, endorsement of executive compensation, and approval of the amendment and restatement of the Flexible Stock Plan [2] - Manuel Fernandez and Mark Blinn retired from the Board of Directors prior to the annual meeting, leading to a reduction in the number of directors from ten to eight [3] Group 2 - Karl Glassman, the Board Chairman, President & CEO, expressed gratitude towards the retiring directors for their service and contributions to the company [4] - The company, Leggett & Platt, is a diversified manufacturer with a 142-year history, producing a wide range of engineered components and products for homes and automobiles [5]

Group 1 - Leggett & Platt (NYSE: LEG) stock has decreased by 23.5% since the last analysis, despite a strong recovery of over 30% following the release of Q1 earnings [1] Group 2 - The analysis indicates a focus on fundamental valuation, aiming to identify undervalued stocks with growth potential [2]

Core Viewpoint - Leggett & Platt, Incorporated (LEG) reported mixed first-quarter 2025 results, with earnings exceeding expectations while revenues fell short, reflecting ongoing demand softness in key markets [1][2][4]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were 24 cents, surpassing the consensus estimate of 23 cents by 4.3%, and up from 23 cents in the same quarter last year [4]. - Net trade sales totaled $1.022 billion, missing the consensus mark of $1.028 billion by 0.5%, and representing a 7% decline from $1.097 billion in the prior-year quarter [4]. - Adjusted EBIT increased 4.6% to $66.6 million from $63.7 million year-over-year, driven by restructuring benefits and operational efficiency improvements [5]. - Adjusted EBIT margin expanded 70 basis points to 6.5% from 5.8% in the year-ago quarter, while adjusted EBITDA margin grew 80 basis points to 9.6% [5]. Segment Performance - Bedding Products segment saw a 13% decline in net trade sales to $390.7 million, with a volume drop of 10% attributed to demand softness in U.S. and European markets [6]. - Specialized Products segment's trade sales decreased 5% to $300.1 million, with a volume decline of 4% due to reduced demand in Automotive and Hydraulic Cylinders [8]. - Furniture, Flooring & Textile Products segment reported a 1% decline in trade sales to $331.3 million, with a volume increase of 2% driven by growth in Textiles [10]. Guidance and Outlook - The company maintained its full-year sales guidance of $4-$4.3 billion, indicating a 2-9% decline year-over-year, with updated expectations for volume declines in key segments [14][15]. - Adjusted EPS is anticipated to be between $1 and $1.20, reflecting an increase at the midpoint compared to 2024, driven by restructuring benefits [16]. - The company expects adjusted EBIT margin to be in the range of 6.4-6.8% for the year [16]. Financial Position - As of March 31, 2025, the company had $817 million in liquidity, with cash and equivalents of $412.6 million, up from $350.2 million at the end of 2024 [12]. - Long-term debt increased to $1.94 billion from $1.86 billion at the end of 2024, with a trailing 12-month net debt-to-adjusted EBITDA ratio of 3.77x [12].

Leggett & Platt (LEG) Q1 2025 Earnings Call April 29, 2025 01:27 PM ET Speaker0 Greetings, and welcome to the Leggett and Platt First Quarter twenty twenty five Webcast and Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kathy Branscombe, VP of Investor Relations. Thank you, Ms. Branscombe. You may begin. ...

Financial Data and Key Metrics Changes - First quarter sales were $1 billion, down 7% compared to the first quarter of 2024, attributed to weak demand in residential markets and automotive [20][21] - First quarter EBIT was $63 million, with adjusted EBIT at $67 million, up $3 million from the previous year due to restructuring benefits and operational efficiency [22][23] - First quarter earnings per share (EPS) was $0.22, with adjusted EPS at $0.24, a 4% increase from the previous year [22][23] - Total debt at the end of the first quarter was $1.9 billion, with total liquidity of $817 million [24] Business Line Data and Key Metrics Changes - Sales in the bedding products segment decreased by 13%, while specialized products declined by 5% and furniture, flooring, and textile products were down 1% [20] - U.S. mattress production was down low double digits, with total mattress consumption down high single to low double digits [21] - The geo components business experienced better-than-expected growth in the civil construction sector [22] Market Data and Key Metrics Changes - Approximately 60% of trade revenues are produced and consumed in the U.S., with another 8% produced abroad and consumed in the U.S. [9] - The company expects the mattress market to decline mid-single digits in 2025, with domestic production down mid to high single digits [21] Company Strategy and Development Direction - The company is focused on strengthening its balance sheet, improving profitability, and operational efficiency while navigating a complex tariff environment [18][19] - A strategic business review is ongoing, with plans to divest non-core businesses, including the aerospace segment, expected to close this year [8][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and demand volatility, emphasizing the importance of restructuring benefits [19][31] - Concerns were raised about tariffs potentially driving inflation and impacting consumer confidence and demand [10][18] Other Important Information - The company is targeting a long-term leverage ratio of two times and plans to use cash from real estate sales and divestitures for debt reduction [25][29] - The restructuring plan is expected to yield significant benefits as demand recovers in the markets served [38][39] Q&A Session Summary Question: Can you talk about the restructuring benefits expected for this year? - Management indicated that restructuring benefits will continue to roll through the year, with potential upside as demand recovers [38][39] Question: Did you see any pull forward in consumer demand due to tariffs? - Management could not identify significant pull forward in demand, although some customers may have sold products out of inventory in anticipation of tariffs [42][42] Question: What is the outlook for the aerospace segment post-divestiture? - Specific guidance on the aerospace segment will be provided after the sale closes, but first quarter sales were $53 million with EBIT of $7 million [48][50] Question: How are margins expected to change across segments this year? - Margins are expected to improve in bedding and specialized products, while furniture, flooring, and textiles are expected to decline slightly [51] Question: What is the impact of tariffs on the mattress market? - The company noted that tariffs could raise prices in the sub-$500 mattress market, but the impact remains uncertain due to various market dynamics [80][82]

Financial Performance - Q1 2025 sales were $1.022 billion, a 7% decrease compared to Q1 2024's $1.097 billion[8] - Volume decreased by 5%[7] - Raw material-related price decreases and currency impact reduced sales by 2%[9] - Adjusted EBIT for Q1 2025 was $67 million, a $3 million increase compared to Q1 2024's $64 million[8, 9] - Adjusted EBIT margin increased by 70 bps to 6.5%[7, 8] - Adjusted EPS increased by $0.01 to $0.24[7, 8] - Cash flow from operations increased by $13 million to $7 million[7, 8] Guidance - 2025 sales guidance remains unchanged at $4.0–$4.3 billion, a potential decrease of 2% to 9% versus 2024[7, 15] - Adjusted EPS guidance remains unchanged at $1.00–$1.20[7, 16] - Operating cash flow is projected to be $275–$325 million[7] Restructuring Plan - The restructuring plan is expected to provide an EBIT benefit of $35-$40 million in 2025, with a full plan run rate of $60-$70 million[42] - Sales attrition from the restructuring is estimated at ~$45 million in 2025, with a full plan run rate of ~$80 million[42] - The company anticipates $15-$40 million in cash from real estate sales in 2025, with a total plan estimate of $60-$80 million[42]

Core Insights - Legget & Platt reported revenue of $1.02 billion for the quarter ended March 2025, reflecting a 6.8% decline year-over-year and a slight miss of 0.53% against the Zacks Consensus Estimate of $1.03 billion [1] - The company's EPS was $0.24, which is an increase from $0.23 in the same quarter last year, resulting in a positive surprise of 4.35% compared to the consensus estimate of $0.23 [1] Revenue and Earnings Performance - The change in organic sales for Bedding Products was -12%, significantly worse than the estimated -4% [4] - Specialized Products saw a -5% change in organic sales, compared to an average estimate of -3.1% [4] - Furniture, Flooring, and Textile Products experienced a -1% change in organic sales, better than the estimated -5.4% [4] - Overall change in organic sales was -7%, against an estimate of -5.6% [4] Trade Sales and EBIT Analysis - Trade sales for Furniture, Flooring, and Textile Products were reported at $331.30 million, exceeding the average estimate of $322.63 million, with a year-over-year change of -0.5% [4] - Trade sales for Specialized Products were $300.10 million, slightly above the average estimate of $298.78 million, reflecting a -5% year-over-year change [4] - Trade sales for Bedding Products were $390.70 million, below the average estimate of $409.90 million, indicating a -12.8% year-over-year decline [4] - EBIT for Bedding Products was $9.60 million, significantly lower than the average estimate of $18.65 million [4] - EBIT for Specialized Products was $28.40 million, surpassing the average estimate of $20.42 million [4] - Adjusted EBIT for Specialized Products was $31.80 million, exceeding the average estimate of $23 million [4] - Adjusted EBIT for Bedding Products was $13 million, below the average estimate of $16.45 million [4] - Adjusted EBIT for Furniture, Flooring, and Textile Products was $21.70 million, above the average estimate of $18.90 million [4] Stock Performance - Legget & Platt's shares have returned -8.7% over the past month, compared to a -4.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]