Leggett & Platt(US:LEG)2025-10-31 16:02Financial Performance - Trade sales for Q3 2025 were $1,036 million, a decrease of 6% compared to Q3 2024, and $3,117 million for the first nine months of 2025, down from $3,327 million in the same period of 2024[97]. - EBIT for Q3 2025 was $171 million, up $93 million year-over-year, and $324 million for the first nine months, an increase of $798 million compared to the same period in 2024[98]. - EPS for Q3 2025 was $0.91, compared to $0.33 in Q3 2024, and $1.51 for the first nine months, up from $(3.83) in the same period of 2024[99]. - Operating cash flow increased by $33 million to $217 million in the first nine months of 2025 compared to the same period in 2024[100]. - For the nine months ended September 30, 2025, net earnings were $210.3 million, a significant improvement from a net loss of $525.6 million in the same period of 2024[1]. - EBIT increased by $624 million, primarily due to the non-recurrence of a $587 million non-cash goodwill impairment charge and metal margin expansion[2]. - EPS for the first nine months of 2025 improved to $1.51, compared to a loss of $3.83 in the same period of 2024, reflecting higher EBIT[169]. Restructuring and Operational Changes - The company expects to consolidate between 15 and 20 production and distribution facilities as part of its 2024 restructuring plan, primarily in the Bedding Products segment[128]. - The company consolidated 14 production and distribution facilities, including exiting the Mexican innerspring operation and downsizing the Chinese innerspring operation[132]. - Total restructuring and restructuring-related costs for the nine months ended September 30, 2025, were $15 million, comprising $11 million in cash and $4 million in non-cash charges[138]. - The company expects an annualized EBIT benefit of $60–$70 million after restructuring initiatives are fully implemented[134]. - Anticipated annual sales attrition is approximately $60 million after initiatives are fully implemented[135]. Sales and Market Trends - The Bedding Products segment contributed 38% of trade sales in the first nine months of 2025, while Specialized Products and Furniture, Flooring & Textile Products contributed 28% and 34%, respectively[105][106][107]. - Trade sales in the Bedding Products segment decreased by $43 million, or 10%, in Q3 2025, with organic sales down 9% due to customer weakness and restructuring-related attrition[177]. - Specialized Products trade sales decreased by $54 million, or 6%, with organic sales down 4% and volume down 5% due to declines in Automotive and Hydraulic Cylinders[3]. - The domestic mattress industry is expected to experience volatility due to industry bankruptcies, consolidations, and import pressure[142]. - The company is exploring alternative sales channels, including private-label initiatives, to expand market position and profitability[161]. Financial Position and Cash Management - The company had cash and cash equivalents of $461 million as of September 30, 2025, primarily held in international accounts[9]. - The company plans to use cash flow from operations to reduce net debt while considering small strategic acquisitions and share repurchases[10]. - Capital expenditures are expected to be lower at $60-$70 million in 2025, with $38 million spent as of September 30, 2025[217]. - Total debt excluding credit facility/commercial paper was $1,497.2 million as of September 30, 2025, compared to $1,496.1 million at December 31, 2024[223]. - The company had $460.7 million in cash and cash equivalents as of September 30, 2025, up from $350.2 million at December 31, 2024[223]. - The average interest rate on total long-term debt was 3.8% as of September 30, 2025[223]. Strategic Initiatives and Future Outlook - The company is actively evaluating the impact of tariffs and counter-tariffs on its operations, with a focus on mitigating potential negative effects[117]. - The company continues to evaluate further restructuring opportunities beyond the 2024 Plan, which may incur additional costs[140]. - The company plans to set an emissions reduction goal by the end of 2025 or early 2026, with key initiatives including developing emissions reduction pathways and undertaking a Scope 3 emissions inventory[248]. - The company experienced supply shortages in chemicals due to severe weather-related impacts, which constrained overall mattress production in the bedding industry[243]. - Cybersecurity risks have increased due to remote access and sophisticated attacks, potentially affecting the company's operations and financial condition[251]. Environmental and Compliance Considerations - The company's total GHG emissions at the end of 2024 were approximately 21% lower than the baseline year of 2019, primarily due to decreased production levels[247]. - The company’s GHG emissions reduction strategy will evolve, with more specific information expected by the end of 2025 or early 2026[249]. - The company has not experienced material climate-related compliance costs to date but is evaluating opportunities to reduce emissions as part of its sustainability strategy[246].