Core Viewpoint - Leggett & Platt is set to release its first quarter earnings results on April 28, 2025, followed by a conference call on April 29, 2025, to discuss various financial and operational aspects [1][2]. Company Overview - Leggett & Platt (NYSE: LEG) is a diversified manufacturer with a history of 142 years, producing a wide range of engineered components and products for homes and automobiles [3]. - The company is a leading supplier in several markets, including bedding components, automotive seat systems, furniture components, flooring underlayment, hydraulic cylinders, and aerospace tubing [3]. Earnings Call Details - The earnings release and financial summary slides will be available on the Investor Relations section of the company's website shortly after market close on April 28, 2025 [2]. - The conference call will be accessible via webcast and can be joined by dialing 201-689-8341, with no passcode required [2].

Investment Rating - The report suggests a positive outlook for the aerospace and defense sectors, highlighting potential investment opportunities in companies like Howmet Aerospace, Loar Holdings, and Raytheon Technologies [6][7]. Core Insights - The AI data center sector is experiencing significant investment, with major companies like Microsoft and Meta planning to invest over $345 billion in AI infrastructure by 2025, indicating a potential bubble in the market [2][23]. - The aerospace industry is showing signs of recovery, with Airbus delivering approximately 70 aircraft in March, reflecting an 11% year-on-year increase [29]. - The defense sector is witnessing substantial contracts, such as Lockheed Martin receiving a $4.94 billion contract for precision strike missiles, indicating strong government spending in defense [35]. Summary by Sections Global Market Review - The U.S. stock market has shown a cautious sentiment, with the S&P 500 index declining over 1% recently, reflecting a risk-off attitude among investors [13]. Infrastructure - The AI data center sector is facing risks of overheating, with significant investments planned by major tech companies [23]. - The PJM Interconnection has released a reliability resource plan to ensure new power plants can connect to the grid efficiently [26]. - Poland is advised to delay the closure of coal plants to avoid a power shortage by 2030 [27]. Industrial Equipment - The price index for electric motors and generators in the U.S. has shown a year-on-year increase of 26% [20]. - China's transformer exports in early 2025 saw a significant increase of 48% year-on-year, indicating strong demand [57]. Energy - U.S. electricity prices have decreased by 35.5% recently, while the market for natural gas is showing mixed signals [5]. - The average spot price for uranium in the global market has decreased by 7.9% month-on-month [4]. Aerospace - The price index for aircraft engines and components has remained stable, with a year-on-year increase of 6.2% [31]. - The aerospace sector is actively pursuing sustainable development, facing challenges in achieving net-zero emissions [29]. Defense - The U.S. government defense spending price index has shown a year-on-year increase of 2.1% [36]. - The defense industry is experiencing a surge in contract awards, particularly in precision strike and unmanned systems [35].

Core Insights - Leggett & Platt has agreed to sell its Aerospace Products Group to Tinicum Incorporated for a cash price of $285 million, with expected after-tax proceeds of approximately $240 million [1][2]. Company Overview - Leggett & Platt is a diversified manufacturer with a history of 142 years, producing a wide range of engineered components and products for homes and automobiles [4]. - The Aerospace Products Group specializes in complex tube and duct assemblies for commercial and military aircraft and space launch vehicles, generating net trade sales of $190 million in 2024 [2]. Transaction Details - The transaction is anticipated to close in 2025, pending regulatory approvals and other customary conditions [1]. - Lazard is acting as the exclusive financial advisor, while Freshfields is the legal advisor for Leggett & Platt in this transaction [3]. Strategic Context - This divestiture is part of Leggett & Platt's ongoing strategic business review to assess long-term business fit [2]. - Full year guidance for 2025, excluding the Aerospace Products Group, will be provided after the transaction closes [3].

Group 1 - LEG Immobilien is identified as an interesting value play in the European real estate sector, particularly due to its focus on the residential market and attractive valuation [1] - The article suggests that the overall sector has not been performing well, which may present opportunities for value investors [1] Group 2 - The author has extensive experience in the financial markets, specifically in portfolio management, which adds credibility to the analysis presented [1]

Business Strategy and Operations - The company is exploring the potential sale of its Aerospace business as part of a strategic review for long-term growth opportunities[31]. - The company did not acquire any businesses in 2024 or 2023, maintaining its current portfolio[32]. - The company launched CombiCore in 2023 and a pre-foam encased product in 2024, enhancing its product offerings in the mattress segment[51]. - The company has consolidated 14 production and distribution facilities in the Bedding Products segment and expects further consolidations in 2025, primarily in Specialty Foam[82]. - The company expects to achieve full implementation of manufacturing efficiency improvements in its Hydraulic Cylinders business by 2025[83]. Financial Performance and Projections - The Bedding Group accounted for 40% of trade sales in 2024, down from 46% in 2022, indicating a shift in market demand[43]. - The company expects overall demand in 2025 to be down modestly from 2024 levels due to economic factors impacting market demand, including housing turnover and consumer confidence[65]. - The 2024 Restructuring Plan incurred total costs of $48 million in 2024, with estimates for 2025 costs ranging from $30 to $40 million[84]. - The company anticipates an EBIT benefit of $55 to $60 million from the 2024 Restructuring Plan in 2025[84]. - Sales attrition related to the restructuring plan is estimated at $60 million for 2025[84]. Innovation and Intellectual Property - The company had 1,281 patents issued and 503 patents in process as of December 31, 2024, indicating a strong focus on innovation[49]. Labor and Employment - The company had approximately 17,700 employees at year-end 2024, with 14% represented by labor unions[54]. - The company did not experience any material work stoppage related to labor contract negotiations during 2024[54]. - The company has a 100% internal promotion rate for corporate officer positions over the last three years, indicating strong succession development[64]. Market and Competitive Environment - The company is facing competitive pressure from foreign competitors, which has led to adjustments in pricing and the development of new proprietary products[68]. - The company faces competitive pressure from lower-priced imports of mattresses and innersprings, which have adversely affected market share and earnings[121]. - Tariffs imposed by the U.S. government on steel and aluminum could lead to lower margins and lost sales, impacting overall results of operations[133]. Supply Chain and Operational Challenges - The company has experienced supply chain disruptions impacting manufacturing processes, financial condition, and cash flows due to various factors including foam chemical shortages and semiconductor shortages[76]. - The company faced potential supply chain disruptions due to geopolitical risks, particularly concerning semiconductor supply from Taiwan and China[99]. Financial Condition and Debt - The total long-term debt as of December 31, 2024, was $1,862.8 million, an increase from $1,679.6 million in 2023[357]. - The weighted average interest rate for commercial paper outstanding was 5.6% for the year ended December 31, 2024, compared to 5.2% for 2023[357]. - The fair value of fixed-rate debt was approximately $245 million less than carrying value at December 31, 2024, compared to $175 million less at December 31, 2023[356]. Asset Management and Impairments - Goodwill and other intangible assets represented $935 million, or 26% of total assets, as of December 31, 2024[103]. - The company recorded impairments of $588 million in its Bedding segment and $44 million each in the Work Furniture and Hydraulic Cylinders segments in 2024[105]. - A non-cash pretax charge of $444 million for long-lived asset impairments was recognized in the Bedding Products segment during the fourth quarter of 2023[108]. Risk Factors - Increased compliance costs and potential liabilities related to environmental regulations could negatively impact the company's financial condition and competitive position[140]. - Cybersecurity risks remain a concern, with potential disruptions to operations and financial results due to technology failures or breaches[128]. - The evolving landscape of privacy and data protection regulations could impose additional compliance obligations, adversely affecting the company's operations and reputation[137]. - The company faces transition risks related to reducing its carbon footprint, which could materially affect its business and financial condition[141]. - Increased scrutiny from stakeholders regarding sustainability practices could negatively impact the company's liquidity and stock price[143]. International Operations - In 2024, the company reported that 35% of its trade sales were related to products manufactured outside the United States, with the Specialized Products segment having a higher percentage at 84% to 86%[38]. - As of December 31, 2024, the company operated 119 manufacturing facilities across 18 countries, with 40% of sales generated outside the United States[91][97]. - The company's net investment in foreign operations with functional currencies other than the U.S. dollar totaled $1,022.8 million as of December 31, 2024, down from $1,202.1 million in 2023[360]. - In 2024, 40% of the company's sales were generated from international operations, exposing it to foreign currency exchange rate risks[127]. Cash Flow and Dividends - The company reduced its quarterly cash dividend per share, indicating potential for further reductions or suspension based on financial conditions and cash needs[116]. - The company experienced a bad debt expense of $6 million in 2024, with an allowance for doubtful accounts for trade receivables totaling $14 million[102]. Insurance and Weather-Related Costs - The company has experienced increased costs of property insurance due to severe weather-related incidents, although these costs have not been material to its financial condition[94].

Company Overview - Leggett & Platt (NYSE: LEG) is a diversified manufacturer with 142 years of history, producing a wide range of engineered components and products for homes and automobiles [2] - The company is a leading supplier in various sectors, including bedding components, automotive seat systems, furniture components, geo components, flooring underlayment, hydraulic cylinders, and aerospace tubing [2] Dividend Announcement - Leggett & Platt's Board of Directors declared a dividend of $0.05 per share for the first quarter of 2025 [1] - The dividend is scheduled to be paid on April 15, 2025, to shareholders of record as of March 14, 2025 [1]

Group 1 - Leggett & Platt, Incorporated (NYSE: LEG) has accumulated know-how over approximately 142 years in the United States and is currently making significant efforts to remain competitive [1] - The company is undergoing substantial reorganization efforts to enhance its market position [1] Group 2 - The analyst has a beneficial long position in the shares of LEG through stock ownership, options, or other derivatives [2] - The article expresses the analyst's own opinions and is not compensated for it, aside from Seeking Alpha [2]

Financial Data and Key Metrics Changes - Fourth quarter sales were $1.1 billion, down 5% compared to Q4 2023, primarily due to weak demand in residential markets and automotive sectors [27][29] - Full year 2024 sales decreased 7% to $4.4 billion, with EBIT down $340 million largely due to $676 million in goodwill impairment charges [29][30] - Adjusted EPS for 2024 was $1.05, a 24% decrease from 2023 adjusted EPS of $1.39 [30] - Operating cash flow was $306 million, a decrease of $191 million versus 2023 [31] Business Line Data and Key Metrics Changes - Sales in the bedding products segment decreased 6% in Q4 2024, specialized products declined 5%, and furniture, flooring, and textile products were down 4% [28] - For the full year, bedding products faced a decline primarily due to restructuring-related sales attrition and lower volume in adjustable beds [20][30] - The specialized products segment is expected to see mid-single-digit declines in 2025, influenced by automotive and hydraulic cylinder demand [22][24] Market Data and Key Metrics Changes - The U.S. mattress market was likely down low single digits in 2024, with domestic production down mid-single digits [19] - In 2025, market volume is expected to be flat, with domestic production down low to mid-single digits [20] - The automotive market is projected to face lower volume year over year due to softness in demand and challenges from Chinese EV manufacturers [22][24] Company Strategy and Development Direction - The company is focusing on balance sheet strength, operational efficiency, and margin improvement while exploring a potential sale of its aerospace business [25] - Continued product innovation and strong customer relationships are prioritized to navigate demand pressures [25] - Restructuring activities are expected to continue throughout 2025, with a focus on improving manufacturing efficiency and reducing costs [14][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for recovery in the bedding market despite ongoing demand challenges [18][43] - Concerns were raised about consumer confidence, inflation, and affordability issues impacting demand in 2025 [100][112] - The company anticipates that macroeconomic factors will continue to influence performance, with no significant improvement expected in 2025 compared to 2024 [100][112] Other Important Information - The company reduced total debt by $126 million in 2024, ending the year with total liquidity of $793 million [32][33] - Restructuring costs for 2025 are expected to be approximately $30 million, with total restructuring costs projected to range from $80 million to $90 million [35][36] - The company expects to generate $15 million to $40 million in cash proceeds from real estate sales associated with the restructuring plan [38] Q&A Session Summary Question: Can you discuss the dynamics between imports and U.S. production in the bedding market? - Management highlighted that imported innersprings are significantly impacting the market, with nearly 50% of units sold through online platforms [49][50] Question: What is driving the increased expectations for EBIT benefits from restructuring? - Management credited the hard work of teams executing the restructuring plan, with potential upside in contribution margins as manufacturing efficiency improves [55][56] Question: How should we think about margins for the segments in 2025? - Margins are expected to improve in bedding despite volume declines, while specialized products are anticipated to remain flat [58][59] Question: What are the expectations for the bedding market in 2025? - The company expects a mid-single-digit decline in bedding demand, influenced by restructuring-related sales attrition and lower volume in adjustable beds [20][22] Question: Can you elaborate on the automotive market dynamics? - Management noted that the automotive sector is facing challenges due to a shift towards Chinese EV manufacturers and a decline in multinational production [22][134] Question: How is the company addressing tariff impacts? - Management is closely monitoring tariff impacts on steel pricing and downstream products, which could affect competitiveness [77][116]

Company Overview - Leggett & Platt (LEG) is currently rated with a Zacks Rank of 2 (Buy) and has a Value grade of A [3][6] - The stock is trading at a P/E ratio of 8.05, significantly lower than the industry average P/E of 10.94 [3] Valuation Metrics - LEG's P/B ratio stands at 1.76, which is attractive compared to the industry's average P/B of 1.93 [4] - The stock has a P/S ratio of 0.31, compared to the industry's average P/S of 0.41, indicating strong sales performance relative to its price [5] Investment Potential - The combination of LEG's low valuation metrics and strong earnings outlook suggests that the stock is likely undervalued at the moment, making it an impressive value stock [6]

Fourth Quarter 2024 Summary Financial Information and Restructuring Update February 13, 2025 Forward-Looking Statements Statements in this presentation that are not historical in nature are "forward-looking." These statements are identified either by the context in which they appear or by use of words such as "anticipate," "estimate," "expect," "guidance," "may," "plan," or the like. These statements include, but are not limited to, future EPS, adjusted EPS, sales, volume for the Company and per segment, ra ...