Leggett & Platt Incorporated : Q1 2025 Leggett & Platt Earnings Presentation 402.5 KB

Published: 2025-04-28 16:36:25 ET LEG

First Quarter 2025

Summary Financial Information, Tariff Overview and Restructuring Update

April 28, 2025

Financial Summary

Overview

Q1 sales of $1.0 billion, a 7% decrease vs Q1-24

Volume was down 5%

Raw material-related price decreases reduced sales 1%

Currency impact reduced sales 1%

Q1 adjusted1 EBIT of $67 million, up $3 million vs Q1-24 adjusted1 EBIT

Adjusted1 EBIT margin of 6.5%, up 70 bps vs Q1-24 adjusted1 EBIT margin

Q1 adjusted1 EPS of $.24, up $.01 vs Q1-24 adjusted1 EPS of $.23

Q1 cash flow of $7 million, up $13 million vs Q1-24

2025 sales and adjusted EPS guidance unchanged

Sales: $4.0-$4.3 billion

Adjusted EPS: $1.00-$1.20

Cash Flow: $275-$325 million

Q1 2025 Financial Highlights

$'s in millions

(except EPS)

Reported

Q1-25

Adj.1

Adj.1 Q1-25

Reported

Q1-24

Adj.1

Adj.1 Q1-24

Change

Sales

$1,022

$1,097

(7)%

EBIT

EBIT Margin

6.2%

6.5%

5.7%

5.8%

70 bps

EPS

.22

.02

.24

.23

Cash from Operations

211%

(6)

EBITDA

EBITDA margin

9.2%

9.6%

8.7%

8.8%

80 bps

¹ See slide 28 for non-GAAP adjustments

Q1 2025 Sales & Adjusted EBIT Bridge

Divestitures

(3)

Adjusted 1st Qtr 2024 Sales

$1,094

Approx volume decrease

(52)

(5)%

Approx raw material-related pricing and currency impact

(20)

(2)%

Organic Sales

(72)

(7)%

Acquisitions

1st Qtr 2025

$1,022

(7)%

Adjusted EBIT 1:

Margin

1st

Qtr 2024

$64

5.8%

Sales:

1st Qtr 2024

mln $'s

% change

$1,097

Primarily from restructuring benefit, operational efficiency improvements, and disciplined cost management partially

offset by lower volume and metal margin compression 3

1st Qtr 2025 $67 6.5%

Q1 2025 Earnings

$'s in millions

(except EPS)

Reported

Q1-25

Adj.1

Adj.1 Q1-25

Reported

Q1-24

Adj.1

Adj.1 Q1-24

Change

EBIT

$63

$67

$63

$64

Net interest

Pre-tax earnings

14%

Income taxes

Tax rate

32.4%

25.5%

Net earnings

Noncontrolling interests

Net earnings attributable to L&P

EPS

$.22

$.02

$.24

$.23

¹ See slide 28 for non-GAAP adjustments

Adjusted Working Capital

$'s in millions2

3/31

2025

12/31 3/31

2024 2024

Cash & equivalents Accounts receivable, net Inventories, net

Other current assets Total current assets

Current debt maturities

Current operating lease liabilities Accounts payable

Accrued and other current liabilities

Total current liabilities

$413 558

678

135

$350 559

723

1,691

(1)

(53)

(498)

(294)

(846)

$361 635

807

1,784

1,860

(1)

(52)

(477)

(281)

(304)

(58)

(496)

(331)

(810)

(1,188)

Working capital

974

844 672

% of annualized sales ¹

23.8%

20.0% 15.3%

W/C, excl. cash & current debt/lease

614

549 673

% of annualized sales ¹

15.0%

13.0% 15.3%

¹ Annualized sales: 1Q25: $1,022x4=$4,088; 4Q24: $1,056x4=$4,226; 1Q24: 1,097x4=$4,388

2Calculations impacted by rounding

Net Debt to Adjusted EBITDA

$'s in millions

3/31

2025

12/31 3/31

2024 2024

Long-term debt Current maturities Total debt

Less: Cash & equivalents

Net debt

$1,935

$1,863

1,864

(350)

1,514

$1,773

304

2,077

(361)

1,936

(413)

1,524

1,715

EBIT, trailing 12 months

Depreciation & amortization

(430)

135

(430)

136

(294)

696

403

(117)

167

EBITDA

Non-GAAP adjustments (pretax) 1

Adjusted EBITDA1, trailing 12 months

(295)

699

425

404

475

3.61x

3.76x

3.77x

Net debt to 12-month adjusted EBITDA 2

¹ 3/31/25 Non-GAAP include $676 goodwill impairment charges, $46 restructuring charges, $4 CEO transition compensation costs, and ($26) gain on sale of real estate; 12/31/24 Non-GAAP adjustments include $676 goodwill impairment charges, $50 restructuring charges, $4 CEO transition compensation costs, ($31) gain on sale of real estate, and ($2) gain from net insurance proceeds; 3/31/24 Non-GAAP adjustments include $444 long-lived asset impairment, $11 restructuring charges, ($19) gain on sale of real estate, and ($11) gain from net insurance proceeds. For additional non-GAAP reconciliation information, see page 8 of the press release.

2 Calculated differently than the Company's credit facility covenant ratio.

Cash Flow

$'s in millions

1stQtr

2025

2024

Net earnings

$31

$32

D&A

Impairment, write-offs & other

Other non-cash

(2)

Changes in working capital:

Accounts receivable

(27)

(29)

Inventory

(12)

Other current assets

Accounts payable

(5)

(36)

Other current liabilities

(25)

(20)

Cash from operations

(6)

Capital expenditures

Acquisitions

Dividends

Share repurchases (issuances), net

Proceeds from asset sales

Additions (repayments) of debt, net

2025 Sales and Adj. EPS Guidance Unchanged

Sales: $4.0-$4.3 billion; down 2% to 9% versus 2024

Expect demand to remain pressured due to economic uncertainty and restructuring-related sales attrition

Volume is now expected to be down low to high-single digits vs prior guidance of down low to mid-single digits

Volume at the midpoint:

Down low double digits in Bedding Products Segment (vs mid-single digits)

Down mid-single digits in Specialized Products Segment

Down low single digits in Furniture, Flooring & Textile Products Segment

Raw material-related price increases, net of currency impact, expected to be flat to a low single digit increase to sales (vs a low single digit reduction to sales)

Assumptions modified due to lower anticipated volume in our domestic bedding business offset primarily by higher

U.S. rod and wire prices benefitting from steel-related tariffs

Adjusted EPS: $1.00-$1.20

At the midpoint, increase versus 2024 due primarily to restructuring benefit, operational efficiency improvements, and metal margin expansion partially offset by lower volume

Implied adjusted EBIT margin of 6.4%-6.8%

2025 Guidance (continued)

Depreciation and amortization ~$135 million

Net interest expense ~$70 million

Tax rate ~25%

Diluted shares ~139 million

Operating cash $275-$325 million

Cap-ex ~$100 million

Minimal acquisitions and share repurchases

Following the anticipated divestiture of Aerospace and deleveraging later this year, we may adjust our near-term capital allocation priorities, including share repurchases, particularly if our share price remains depressed

Tariff Overview

Tariff Impacts

As the leading domestic manufacturer of innersprings, we are strategically positioned to take on new customers shifting from imports

US Spring

Significant global sourcing with ability to resource to lowest total cost regions

Well positioned to serve customers that may face supply disruption from their existing vendors

Textiles

Mainly domestic business with immaterial exposure to imported raw materials

Flooring

SE Asian competitors are advantaged compared to us and Chinese customers

We are establishing SE Asian production to reduce impact from China tariffs

Home Furniture

Automotive

Largest indirect exposure; limited direct exposure

Expect further disruption and reduced demand as additional tariffs are implemented

Significant sourcing exposure on imported finished product and components, including electronics from China

Domestic product disadvantaged vs import competitors

Adjustable Bed

Limited exposure on imported chemicals; currently excluded from tariffs

Identifying alternative sources for materials most impacted by tariffs

Specialty Foam

Primarily sells to customers in region of production

Little direct sourcing of foreign materials

No significant impacts expected

Aerospace

Some sourcing exposure and sales from foreign locations into U.S.

Opportunities to serve customers desiring domestically-produced finished furniture and components

Work Furniture

Domestic steel tariffs have led to expanded metal margins which are a benefit to us

Seeking opportunities to serve new customers

Rod & Wire

Sources some finished product and components from intercompany and trade suppliers in Asia

Domestic production provides an advantage vs some competitors

Hydraulic Cylinders

Tariff Mitigation Strategy and Risks

Mitigation Strategies

Sourcing product domestically or from alternative lowest total cost countries

Shifting production to take advantage of our global footprint

Passing along price increases where necessary

Heightened sensitivity on inventory management

Potential Risks

↓ Rise in inflation in the near term

↓ Decline in consumer confidence

↓ Decrease in consumer demand

↓ Disruptions to global supply chains

Foreign Direct Sourcing Exposure by Country

~$400m annual spend (prior to tariff implementation)

Other 5%

China 25%

Mexico 30%

Europe 10%

Other Asia* 30%

We are actively pursuing opportunities to capture demand where interest for domestically-produced products has increased

Restructuring Update

Restructuring Initiatives

2024 Accomplishments Q1 2025 Progress

Bedding Products

Reduced footprint by 14 locations (10 in U.S. Spring, 3 in Specialty Foam, 1 in Adjustable Bed)

Consolidated all domestic innerspring production into 4 remaining locations

Exited Mexican innerspring operation

Downsized Chinese innerspring operation

Sold 2 properties

Furniture, Flooring & Textile Products

Closed 1 facility in Home Furniture

Closed 1 facility in Flooring Products and substantially completed Phase 1 of Flooring Products restructuring

Specialized Products

Initiated Hydraulic Cylinders restructuring

Corporate

Reduced G&A cost structure

Bedding Products

Divested a small U.S. machinery business

Consolidated 1 Specialty Foam production facility

Furniture, Flooring & Textile Products

Launched phase 2 of Flooring products restructuring

Specialized Products

Continued to make progress on the Hydraulic Cylinders restructuring

Additional Expectations

Bedding Products

Substantially complete Specialty Foam consolidation

Furniture, Flooring & Textile Products

Complete Phase 2 of Flooring Products restructuring

Specialized Products

Complete Hydraulic Cylinders restructuring

Restructuring Plan Financial Update

2024

Actuals

Q1 2024

Q1 2025

Incremental1

2025

Incremental1 Estimates

2025

Run Rate Estimates

Full Plan Run Rate Estimates

Sales Attrition

$15m

$14m

~$45m

~$60m

~$80m

EBIT Benefit

$22m

<$1m

$14m

$35-$40m

~$55-$60m

$60-$70m

2024 Actuals

Q1 2025

2025 Estima

tes Total Plan Estimates

Cash from Real Estate

$20m

$15-$40m

$60-$80m

Restructuring and Restructuring-Related Costs

$48m

$6m

$30-$40m

$80-$90m

Cash

$30m

$5m

$15-$20m

$45-$50m

Non-cash

$18m

$1m

$15-$20m

$35-$40m

Segment Detail

Q1 2025 Segment Summary

Q1-25

Organic Sales Growth 1, 2

Q1-25 Adj. EBIT 2

Margin

∆ vs Q1-24 Adj. EBIT 2

Margin

Q1-25 Adj. EBITDA 2

Margin

∆ vs Q1-24 Adj. EBITDA 2

Margin

Bedding Products

(12)%

3.3%

-50 bps

6.7%

-40 bps

Specialized Products

(5)%

10.6%

+310 bps

14.1%

+340 bps

Furniture, Flooring &

(1)%

6.5%

-40 bps

8.0%

-50 bps

Textile Products

Total Consolidated (7)% 6.5% +70 bps 9.6% +80 bps

1 Includes raw material-related selling price impact and currency impact

2 See slides 21, 23, 25, and 28 for non-GAAP reconciliations

Bedding Products

Trade Sales

mln $'s

% change

1st Qtr 2024

$448

Divestitures

(3)

(1)%

Adjusted 1st Qtr 2024 Sales

445

Organic Sales 1

(54)

(12)%

1st Qtr 2025

$391

(13)%

1 Lower volume (10)% and raw material-related selling price decreases and currency impact (2)%

mln $'s

Adj. EBIT2

margin

D&A

Adj.

EBITDA2

Adj. EBITDA2

margin

1st Qtr 2024

$17

3.8%

$15

$32

7.1%

Change 3

(4)

(2)

(6)

1st Qtr 2025

$13

3.3%

$13

$26

6.7%

2 Adjusted to exclude restructuring charges $9m and gain on sale of real estate ($8m) in 1Q24 and restructuring charges $3m in 1Q25

3 Calculations impacted by rounding

Bedding - Key Points

Q1 organic sales were down 12%:

Volume decreased 10%, primarily due to demand softness in U.S. and European bedding markets, the expected exit of a customer in Specialty Foam, and restructuring-related sales attrition partially offset by higher trade rod and wire sales

Raw material-related selling price decreases and currency reduced sales 2%

Divestiture of a small U.S. machinery business, as part of our restructuring plan, reduced sales 1%

Sales trends:

Organic Sales

Volume1

Steel Rod

34%

33%

Drawn Wire

10%

U.S. Spring 2

(20)%

(18)%

Specialty Foam 2,3

(17)%

(15)%

Adjustable Bed 2

(21)%

International Bedding

(9)%

(5)%

1 Volume represents organic sales excluding raw material-related selling price impact and currency impact

2 Restructuring-related sales attrition: U.S. Spring (3)%, Specialty Foam (2)%, Adjustable Bed (1)%

3 Sales decline attributed to exit of customer (10)%

Q1 adjusted EBIT primarily decreased from lower volume and metal margin compression, partially offset with restructuring

Specialized Products

Trade Sales

mln $'s

% change

1st Qtr 2024

Organic Sales 1

1st Qtr 2025

$316 (16)

$300

(5)%

1 Lower volume (4)%, currency impact (2)%, and raw material-related selling price increases 1%

mln $'s

Adj. EBIT2

margin

D&A

Adj.

EBITDA2

Adj. EBITDA2

margin

1st Qtr 2024

$24

7.5%

$10

$34

10.7%

Change 3

1st Qtr 2025

$32

10.6%

$10

$42

14.1%

2 Adjusted to exclude restructuring charges $3m in 1Q25

3 Calculations impacted by rounding

Specialized - Key Points

Q1 organic sales were down 5%:

Volume decreased 4% from declines in Automotive and Hydraulic Cylinders partially offset with growth in Aerospace

Raw material-related selling price increases added 1% to sales

Currency impact reduced sales 2%

Sales trends:

Organic Sales

Volume1

Automotive

(7)%

(5)%

Aerospace

16%

15%

Hydraulic Cylinders

(16)%

1 Volume represents organic sales excluding raw material-related selling price impact and currency impact

Q1 adjusted EBIT increased primarily from disciplined cost management, operational efficiency improvements, and restructuring benefit partially offset by lower volume

Furniture, Flooring & Textile Products

Trade Sales

mln $'s

% change

1st Qtr 2024

Organic Sales 1

1st Qtr 2025

$333

(2)

$331

(1)%

1 Higher volume 2%, raw material-related price decreases (2)%, and currency impact (1)%

mln $'s

Adj. EBIT2

margin

D&A

Adj.

EBITDA2

Adj. EBITDA2

margin

1st Qtr 2024

$23

6.9%

$28

8.5%

Change 3

(1)

(2)

1st Qtr 2025

$22

6.5%

$27

8.0%

2 Adjusted to exclude restructuring charges $2m and gain from net insurance proceeds ($2m) in 1Q24 and gain on sale of real estate ($3m) in 1Q25

3 Calculations impacted by rounding

Furniture, Flooring & Textile - Key Points

Q1 organic sales were down 1%:

Volume increased 2% from growth in Textiles partially offset by continued weak demand in residential end markets

Raw material-related selling price decreases reduced sales 2%

Currency impact reduced sales 1%

Sales trends:

Organic Sales

Volume1

Home Furniture 2

(6)%

(5)%

Work Furniture

(3)%

(1)%

Flooring 2

(5)%

(2)%

Textiles

1 Volume represents organic sales excluding raw material-related selling price impact and currency impact

2 Restructuring-related sales attrition: Home Furniture (4)%, Flooring (2)%

Q1 adjusted EBIT decreased primarily from raw-material related pricing adjustments partially offset with higher volume

Ticker: LEG (NYSE) Website: https://www.leggett.com Email: [email protected] Phone: (417) 358-8131

Cassie Branscum

Vice President, Investor Relations

Katelyn Pierce

Analyst, Investor Relations

Webcast replay and Company Fact Book are available at https://www.leggett.com

Non-GAAP Adjustments

Q1-24

Q1-25

$'s in millions

(except EPS)

Non-GAAP Adjustments1,2

Restructuring, restructuring-related and impairment charges 3

$11

Gain on sale of idle real estate 4

(3)

(8)

Gain from net insurance proceeds from tornado damage 4

(2)

Non-GAAP adjustments (pre-tax)

Income tax impact

Non-GAAP adjustments (after tax)

Diluted shares outstanding

138.6

137.3

EPS impact of non-GAAP adjustments

$.02

$.00

1For additional non-GAAP reconciliation information, see page 8 of the press release

2Calculations impacted by rounding

3Restructuring charges affected the following line items on the income statement: Q1-25 - COGS <$1, SG&A $2, Other (income) expense $5; Q1-24 - COGS $2, SG&A $1, Other (income) expense $8

4Adjustments affected the Other (income) expense line on the income statement: Q1-25 ($3); Q1-24 ($10)

Disclaimer

Leggett & Platt Inc. published this content on April 28, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2025 at 20:34 UTC.