Financial Data and Key Metrics Changes - Third quarter sales were just over $1 billion, down 6% year-over-year, primarily due to soft demand in residential end markets and sales attrition from the divestiture of the aerospace business [8][11] - Third quarter EBIT was $171 million, and adjusted EBIT was $73 million, a $3 million decrease year-over-year, primarily from lower volume [11] - Third quarter earnings per share were $0.91, with adjusted EPS at $0.29, a $0.03 decrease year-over-year [11] - Operating cash flow for the third quarter was $126 million, an increase of $30 million compared to the third quarter of 2023 [11][12] - Total debt was reduced by $296 million in the third quarter, bringing total debt reduction for the year to $367 million [11][12] Business Line Data and Key Metrics Changes - Bedding product sales decreased 10% year-over-year but improved 3% sequentially [8] - Specialized product sales declined 7%, while furniture, flooring, and textile product sales were flat year-over-year [8] - U.S. mattress industry production improved sequentially but remained negative year-over-year, with total market consumption expected to decline low single digits for the full year [9][10] Market Data and Key Metrics Changes - The U.S. spring unit volume was in line with mattress consumption and domestic production volumes, both estimated to have declined low single digits [8] - Domestic mattress production improved sequentially, marking the second consecutive quarter of improvement, but remained negative year-over-year [9] - The automotive supply chain risks, including availability of aluminum and semiconductors, have begun impacting the industry, although no material impact has been experienced to date [10] Company Strategy and Development Direction - The company is reaffirming the midpoint of its full-year sales and adjusted EPS guidance, with sales expected to be $4.0 billion-$4.1 billion, down 6%-9% versus 2024 [14] - The restructuring plan is nearing completion, with expected annualized EBIT benefits of $60 million-$70 million [13][14] - The company aims to focus on organic growth, funding strategic acquisitions, and returning cash to shareholders through dividends and share repurchases [15][57] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about tariffs potentially driving inflation and impacting consumer confidence and demand [6][7] - The company remains focused on providing high-quality, innovative products while navigating a dynamic operating environment [7][16] - Management highlighted a robust innovation pipeline and partnerships with customers to develop products tailored to market needs [16][17] Other Important Information - The company completed the divestiture of its aerospace business, using proceeds to pay down commercial paper and reduce net debt [4][5] - Total liquidity at the end of the quarter was $974 million, comprised of $461 million in cash and $513 million in revolving credit capacity [13] Q&A Session Summary Question: Benefits from cost actions and restructuring - Management noted that restructuring efforts are meeting or exceeding expectations, with no customer disruptions and a projected annualized EBIT benefit of $60 million-$70 million [22][24] Question: Demand environment in bedding - Management characterized the market as stable, with sequential improvement in sales, but acknowledged ongoing challenges from macroeconomic factors [26][30] Question: Capital expenditure plans for 2026 - Management indicated that normalized CapEx is expected to be around $100 million, with ongoing funding for growth initiatives [32] Question: Segment margins for the year - Bedding segment margins are expected to be up 200 basis points, while specialized segments are projected to increase by 50 basis points [33] Question: Growth opportunities post-restructuring - Management sees significant growth potential in finished bedding and innovation, with a focus on private label products [52][53] Question: Future trajectory of textiles business - Management highlighted the potential for bolt-on acquisitions in textiles, leveraging successful past strategies [76][77]