Leggett & Platt(LEG) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter sales were $939 million, an 11% decrease compared to the fourth quarter of 2024[4] - Fourth quarter EBIT was $32 million, down from $44 million in the fourth quarter of 2024, with adjusted EBIT at $48 million, an $8 million decrease[5] - Full year 2025 sales totaled $4.05 billion, a 7% decrease from 2024, with operating cash flow of $338 million, an increase of $33 million from 2024[9] - Divestitures decreased sales by 5% in the fourth quarter, with organic sales down 6% due to weak demand in residential markets and supply chain disruptions[6] - Trade sales decreased by 11% in Q4 2025 compared to Q4 2024, with a total year-to-date decrease of 7%[34] - Volume decreased by 15% primarily due to sales weakness at specific customers and retailer merchandising changes[25] - Cash from operations for the fourth quarter was $95.5 million, down from $122.3 million in the previous year[36] - Organic sales growth for the overall company was reported at a decline of 6% year-over-year in the fourth quarter[36] Earnings and Margins - The EBIT margin for the fourth quarter was 3.4%, down from 4.1% in the fourth quarter of 2024, while adjusted EBIT margin was 5.1%, down from 5.3%[7] - Adjusted EBIT for the fourth quarter was $47.9 million, a decrease of 14% from $55.6 million year-over-year[36] - Adjusted EBITDA for the fourth quarter was $79.6 million, down 11% from $89.7 million in the prior year[36] - EBIT margin for the total company decreased to 3.4% from 4.1% year-over-year, reflecting a decline of 70 basis points[35] - Adjusted EPS is projected to be between $1.00 and $1.20, reflecting an increase due to operational efficiency improvements and favorable sales mix[25] - EBIT margin for 2026 is anticipated to be between 5.9% and 7.8%, with adjusted EBIT margin expected to be between 6.3% and 7.0%[25] Debt and Liquidity - The company reduced its debt by $376 million in 2025, achieving a net debt leverage ratio of 2.4x, moving towards a long-term target of 2.0x[3] - Total liquidity at year-end was $1,296 million, including $587 million in cash and $709 million in available capacity under the revolving credit facility[20] - Long-term debt decreased by 20% to $1.496 billion, contributing to improved financial stability[34] - Total current liabilities decreased by 8% to $775 million, reflecting effective cost management strategies[34] - The company reported a net debt of $1,513.9 million for 2024, with a net debt to adjusted EBITDA ratio of 3.76[39] - The total debt for 2024 is reported at $1,864.1 million, with cash and equivalents of $(350.2) million[39] Restructuring and Future Guidance - The restructuring plan launched in early 2024 was substantially completed by the end of 2025, resulting in greater EBIT benefits with lower costs than expected[4] - Restructuring costs are expected to impact earnings by $0.02 to $0.11 per share, primarily from cost improvement and footprint optimization initiatives[25] - The company anticipates an additional $20–$30 million of cash proceeds from real estate sales in 2026[20] - 2026 guidance projects sales between $3.8 billion and $4.0 billion, with EPS expected to be between $0.92 and $1.38[21] - The company expects to incur costs related to the unsolicited offer evaluation of Somnigroup amounting to $3.4 million in 2025[40] Segment Performance - Bedding Products segment trade sales fell by 11% to $373.8 million, with an EBIT margin improvement to 6.8% from 0.4%[35] - Specialized Products segment trade sales decreased by 21% to $240.7 million, while EBIT margin improved to 10.1% from 8.4%[35] - Furniture, Flooring & Textile Products segment trade sales declined by 3% to $324.1 million, with EBIT margin dropping to 2.3% from 5.0%[35] Non-GAAP Adjustments - Non-GAAP adjustments (after tax) for 2024 total $655.7 million, significantly impacting the EPS[39] - Goodwill impairment for 2024 is recorded at $676.0 million, indicating a substantial non-cash charge[39] - The company anticipates a restructuring-related charge of $49.8 million for 2024, reflecting ongoing operational adjustments[39]