LEG - Earnings call transcript Q4 2017 | Leggett & Platt, Incorporated

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Operator

Greetings, and welcome to the Leggett & Platt Incorporated Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer-session will follow the formal presentation [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. of President Vice McCoy, Investor Relations. Susan Ms. you, Thank McCoy, you begin. may

Susan McCoy

for in call. Leggett Good morning. Platt's part you thank conference And & taking fourth quarter

Wendy Those number obligation statements. the and concerning call Joining or Investor risks and Perry to DeSonier, and President or trends, Glassman, call expectations, for who's posted Flanigan, company call material. Relations may of Platt strategies, is me of IR Karl Residential summary will Segment; the may and in and release Actual you Flanigan, these Watson, and information our Karl Dave of events, we available and and statements. PowerPoint is the update & Mitch will that discuss today the forward-looking of revise Group information site of the Relations; the and slides today Matt to Dolloff, XXXX; conference uncertainties be site. or broadcast transcribed, of Investor yesterday’s undertakes Furniture This with materially Segment; including contain CEO; questions Investor supplement Specialized due events for the EVP this results financial will President without I summary our Leggett outlook of Matt release. A discuss this our Vice on future agenda from copyrighted results constitute is with no EVP of Director portion finally, a differ Web you or being morning yesterday’s remind press the who financial Leggett’s reconciliations. is to Strategy replay our to The Davis, documents follows. of a President recorded, CFO; have. details. call, that the express any We permission. and Senior not Industrial and is made for This President press answer Web segment Glassman details as major EVP remarks portion a our and non-GAAP and set Relations. are and recorded that we need along statements our start address objectives,

and to release summary section XX-Q refer of entitled over Factors yesterday’s our Risk statements. comments, the please press XX-K a in to and I’ll Glassman. these call additional information, forward-looking Karl the With those turn For and

Karl Glassman

this are And employees dedicated a thank take morning. our our very quarter for thank moment world I Good you around appreciated. in want fellow participating much you fourth past and year, your efforts the call. for to

quarter and largely We with XXXX share are fourth programs, pleased our sales growth, market and increased new by content was full gains. year driven which

effect which lower Adjusted discuss Our EPS call. cost rising significantly one-time will pressured over steel much Cuts cost margins. was EPS and associated Tax Matt from of the in the the with Jobs LIFO which XXXX, expense, most profit Act, year lower and in later X% was the from of primarily

PHC’s acquired and during Precision was growth the sales handful earnings and of we current The Cylinders, leading of analysis million represents operations the by life end cycles, handling many began markets critical materials with of share. of we small Leggett Platt of is we annual X% cylinders styles family. has product specialized and extremely an & us. yet style Hydraulics to North Hydraulic serves PHC that performing XXXX, growth competition to the new cost. PHC million. revenues highly market with component segment We our to market Hydraulic market. engineered will will and well and sales. in $XX one Leggett part and welcome XXXX. purchase and For of the engineered growth process the $XX attractive mainly India components large the expected is Last report primarily in for of add improvement of aligns new is strongest This manufacturer increases Mitch. unit OEM customers a new for hydraulic a co-designed to highly total shared initiatives our product a platform products price in global employees in identified utilizing business cylinders per XXXX of cylinders, Carolina, drive the representing business our long week, expect UK

to growth yesterday’s press release divestitures. material guidance that X% from to Matt raw will added outlined the share by remained quarter other were from and $XXX in businesses operations This but XXXX items were sales Acquisitions targets currency offset increases in included long-term Bed to for $X.XX. in X% from and sales reduction XXXX earnings. impact. increased higher positioned Fourth Fourth continuing per earnings X% growth, strengthened reflecting Our several our share X% Adjustable related million, for our $X.XX per Automotive, price volume and run net well growth. several later businesses, call. profitable through financial quarter and

last in from adjusted is Excluding fourth per year. the to increased XX% quarter. these items, primarily to quarter due increase $X.XX This $X.XX earnings share higher sales

earnings related Full year, $X.XX fourth full included increased from up impact. decreased just Acquisitions with the to earnings share include growth mentioned. other share price X% increases sales, a per more sales, items. and a than X% year from earnings EPS net full organic per volume sales effective operations year from X% were $X.XX. per X% divestiture and X% Full X% $X.XX count. Adjusted benefitted XXXX. divestitures. earnings from sales by of decreased benefit combination raw added higher share lower benefit net XXXX quarter continuing and offset $X.XX lower in share and the per rate from reduction share tax from For gains to a $X.XX Adjusted year year but material currency Current to small

several were lag smaller offset and along than inflation, However, passing more improvements factors. cost, ongoing higher the by with these steel associated that

a tube manufacturer a bent XXXX, installer Geo underway. three supporting During completed acquisitions, Components, label private critical furniture and our work of bonded small strategy and including we of ceiling surface producer carpet distributor a and

automotive, to organic opportunities, growth Adjustable Bedding capital in primarily We also Bed. support investing continued and

year, During the our segment during provided products. divested in have commercial the prepared vehicle this within narrative we call. past, we remarks last business our remaining the In

those Web deck from are results both quarter the release practice, that departing and Investor the year Relations posted site. the We press since were yesterday's slide to in and detailed in the the are we

more We time repetition Q&A. are making and change to allow this for reduce

discuss now call. turn have during segments call to Q&A will the questions end the happy We be to the I'll over relating any you of Matt. the at to

Matt Flanigan

morning good Thanks Karl and everyone.

Tax and Jobs recently enacted First, Act. the Cuts I'll address

accumulated of quarter a charge million $X.XX to $XX impact year for future foreign liabilities expected earnings, of from cash include earnings tax benefit $X tax full This the and repatriation taxes a million at fourth tax XXXX TCJA. federal on estimated and for deemed $XX Our rate. the or million of the related U.S. is comprised the net new million the charge of charge per foreign $XX repatriations accrual withholding of share revaluation lower

the will in act, deemed paid eight over years. be provided As repatriation tax the

earnings or lower This rate to of XXXX U.S. and and of expect foreign mix the tax taxes. rate the reflects XX%. income anticipated tax impact state effective our federal domestic rate approximate We

to A The is decreased, higher the income domestic as jurisdictions. rate larger is the of expected earned significant production U.S. tax as be our Leggett benefit be tax share might foreign to While in has jurisdictions with been assumed. U.S. taxes not activities executive associated of a the deduction payable accrual deduction includes rate foreign from out. eliminated phased has be earnings. repatriation and XXXX to compensation for for also portion The ongoing will cash future of first an

in changes from by vary impacted year-to-year to is in be stock rate tax lower compensation, is our forecasted and Finally, which XXXX.

involving repay other repurchases. accounts. we of undertake $XXX timing matures short activity strategic currently acquisitions; portion exact share share difficult to a of and we We dividends; approximately repatriate In July. special for; cash. pay to repurchases that standing million a the to of this is four, million with one, significant During priorities, use foreign dividend in investments; incremental debt that will our not two, predict and Both three, of capital working long plan to XXXX, local growth and is foreign things. In be organic expect repatriation with requirements to cash cash cash governmental keeping do used and the this amount expenditures subject term, $XXX may in capital or among held

XXXX to our million. $XXX operating Now performance. We financial cash of back flow generated

XX%, XX.X%, and improvement which increase capital $X.XX We which was management to In adjusted continue approximate one the Dividend At expect at quarter price was notable the to working percentage among the November, have a which dividend, XX and a of is sharp we of focus companies The as within dividend XXX Aristocrats. declared on with earnings a ended payout year range closing recent of percentage versus sales share of is fourth we per quarterly growth X% dividend as earnings trends. the targeted our from yields XX% our a XXXX. capital yield comprise adjusted the highest the current working S&P future that of growth. is X.X%, yesterday’s $XX.XX, of to we

of full our issued shares year, of average X.X $XX.XX For primarily employee the million repurchased we stock for and plans. shares at benefit an X.X price million

repay and year flexibility remains X.X% In outstanding paper. commercial strong and proceeds notes issued $XXX and November, base this primarily investment capital financial very we the making used a decisions. to XX considerable of Our coupon us gives when million with

also to $XXX within which of our million and we of our full XX% We available increased XXXX $XXX supports credit term the $XXX XX%, us. million November XX% to to longstanding range have facility, debt net of extended target to XXXX. We and of paper commercial from our credit facility with revolving to comfortably net the million program capital the ended

and months peer debt-to-EBITDA We debt adjusted on comparing ended EBITDA. of We XX that at return by our to also with three-year trailing performance rolling times overall basis. our monitor total shareholder our assess a XXXX companies X.X

in the per to to the achieve will one-third of require Our target XX% over long of TSR the XXX average top which TSR term, believe an XX% year. we S&P is

X% period three-year performance of below TSR the places we XX, midpoint December the ended just that year. For That S&P compound XXXX, the XXX. annual on generated of per

While our few over of support the top achievement strategy of macro continue our environment believe in years. third disciplined We should to next and this is disappointing, the growth goal. our growth use believe will markets end modest capital we improved support

a as a have other More at we Adjustable businesses importantly, Bed, grow such as developed organically wins Components, program we result to faster Furniture, Aerospace. our growth within gains, Geo pace Bedding, of our in and content Automotive, expect opportunities and markets Work

XXXX with inflation, we higher of increase steel sales cost. pass-through continued material As raw also the we to entered from expect

operations lag backdrop forecasting $X.X are expected selling prices. we own be our we Although, a this year. or stronger timing there X% continuing will are Sales in sales billion With growth. up $X.X adjust XXXX, occurs be to when to to again last X% from billion which for over

acquisition our mid-single volume We to in should PHC to many and from expect growth growth businesses. of should add raw material sales X% related add price digit also growth. strength sales increases The

our this expected quarter. adjusted XX% earnings XXXX margins We expect We XX% full the to cost range, XX%. $X.XX approximately per expect guidance X% is EPS $X.XX steel rate should to assumes share to as our inflation be full margin adjusted XX.X%. first of compared grow tax to upon $X.XX. year XXXX year This to an to EBIT of mentioned earnings earlier. of effective Recent Based pressure during therefore XXXX

XXXX should should for than for year margin Capital be near approximate year. remainder be flow in working cash require should stabilize, capital million. use XXXX. $XXX with the cost dividend expected of the and smaller should in cash Assuming of improve $XXX to expenditures approximately million million the a $XXX Operating

dividends, table fruition, a must have Should each million competitively funding board and our growth come has been standing from prioritized Potential shares or to be No specific time acquisitions toward meet after stringent, and practice, flow no acquisitions. financial the commitment up been authorization As remaining acquisitions year. to has repurchase established. strategic organic XX will cash to advantaged criteria. we repurchase

plans. a primarily million, three expect our and shared X set million to repurchase employee TSR XXXX currently benefit months million through XXXX. of to in operating ago, top goal we XX targets issue However, approximately we X for year X that between reflected shares

anticipated fluctuation EPS anticipate from targets slightly yields or the With extending deflation, to demand divestitures. also organic the revenue no The operating assume margin strategic XX% year growth. targets of EPS they And gains Susan. $X continue by inflation, I'll currency targets. will our significant a These be XXXX EPS back The comments, that targets are of term longer target moderate assume stable and microenvironment acquisitions. of billion turn in XXXX's rate. $X.XX. and adjusted our content we're and With augmented EBIT that by growth modest This and over operations, call continuing XX%, tax modifying then reflects those decline

Susan McCoy

remarks. your that prepared for question questions. yield you order to thank glad we request will next you to That we then In an concludes your to everyone answer allow the ask participate, and our We attention. one only And opportunity participant. be to

additional have Q&A. queue, as and those Mitchell, reenter the you answer to welcome we're you questions to begin If well. questions, are ready we'll

Operator

you Thank [Operator Instructions].

first Our the line Credit from with proceed your Suisse. with question Susan Maklari of question. comes Please

Susan Maklari

the we’ve on on the talk into that? you the flat of the that thinking comps things. are first retail what question over XXXX of components us just half how of The given some come that spring sense that the give about in help you’re fact the Can side some a happened were terms my last like guess the on together to of and just coming little seeing we year based I and quarter. fourth some that could be us bit going down can of should of the is put easier first course you year. they But events basically got side what look Bedding in all

Perry Davis

components. We of as out the most large which during saw just regards introductions. with last key the last January some our market week, in action Las completed roll the several to we Vegas you producers of at Bedding significant line week partial really least And market know

the some content see lines. a last New of product in in nano only price to we’ll positioned but those seen some first overall, well to go mix also see throughout introductions far introductions majors, couple think weeks and product type margin coils, related most our the those issues related lot so which to stanched with of weather contains seen gains Comfort category We generally products, saw forward particularly hybrid continued We’ve the Core the shopping growth coils seen or of of category weekend upholstery that by polyurethane to year. incidentally of to higher that replace last will we we this with But There type our products which we positioning well related components are pleased we’re over of cases that some week. introduced foam have expect related not the Year, significantly changes and we But headwinds higher we’ve as the New year. particularly activity. had the and that our continue we’re we’ve that XXXX. inflated

Susan Maklari

that? that bit as of for that around time? could section help lot then remind with perhaps or us And and And is XXX about us some little picture. lower steel the but… the rod can of imports the come But of seen the some is relate what together Leggett uncertainty economics my could of second you’ve in, inflation it that side down can the a I of for the that. the around to coming a steel assume as question know on we coming come inflation think potential the mill off you and bigger takes some of maybe a how And and potentially lot, over I puts understand it’s the steel some within some

Karl Glassman

the from point, any scrap about XXX Shorling then end don’t $XX and We scrap increase this at cost did year our had January. $XX see we to steel we think at has our potential pricing. saw effect is Really mill in the action another input of at

the pricing about so that word turn generally but we to pricing. roll waste. take scrap yesterday February those talked we which the impact got rolled which gets impacts before, pricing, or impacts system, spring time they quarter in in through, side I And is all do are a wire a through The rod talking as by So of turn while for activity.

in going you the So we looks to we days at X% components they we've out for are we to those bode year-on-year begin good in if later early But the margin point somewhere place in through, in it in inflation range. it's and seen we'll could And on. XX QX. time, past, inflation this at those the at increases steel point this happen XX% markets. as don't those any lap as said us we've predict see time, cost see to what's recovery get additional then well like look probably, in But once in roll in steel and hard able we're to our once for recover, It's happen to outlook.

Susan Maklari

the domestically in could mill? see there And then you volume we volumes that into coming the do your the get is potential a shift rod if U.S., perhaps from more

Karl Glassman

place Perry, probably impacted basic the producers I demand products long driving there. said anti-dumping iron be lavvy place The be protecting some of sunset on ore recently globally, in wire will with and in after Those by rod already that be being primary scrap another and years, than most categories. being that. It XXX domestic flat there round are cost then is significant just wired its agree a which products form. Perry which and product There are provisions as impactful four and out to are will at long more are products. for in the increases will input review back are least rod

XXX So be will don't but at unknown is point I impactful. this it just think

Operator

you. Thank

your the Our Hughes next Humphrey. line of with with question SunTrust question. Robinson from Keith comes proceed Please

Keith Hughes

the we going to movement you fourth margins were down quarter with quarter the in first given Are likely company in recent full in as deal see the the inflation? Margins flat must steel for effectively this January.

Susan McCoy

guidance. making influence the would full and say margins qualitative were we're a we comment quarter bit year set. because pricing talking first But Keith I steel that down of was when basically It's yes, the we But with just stabilize improvement overall as forward, the were of in in we margins. year. half that's if full And the that. move in expect to would back year be up lag about associated margins the

Keith Hughes

on Karl. kind of players And Is nature? then future? if going give the of acquisition, maybe number the you the us so, some of market sizes for and and the a to of in platform And this that is what structure growth be can feel that

Karl Glassman

my due only future. certainly probably growth PHC to than diligence into will welcome the something of that I'll the to Platt. that But the around sector a grow arena. There & Mitch in more But seen not into pleased this Leggett. really going years has say our in we I position for it will but XX dynamics. be Keith, have would if I've ask robust platform made We're to anything Leggett through acquisition the company substantially didn’t been intend market go not we

Mitch Dolloff

our we a addressable this today. particularly portion very are with for room play. us win this businesses of PHC. excited the about like of to overall see The growing fit attractive lots about so billion, very the yes, $X where business billion $XX market. much we at about We as we market see and is We So

is years. program like So There with The engineered. It businesses you some There pretty are requires for a interaction. customers, is lot and life it number flexible and lasts nature a well. many of and supply that with of product are of volumes doing our base. has a It the in across cycles products sounds deep variations. a it it co-design large large highly manufacturing fragmented the win programmatic for long products are so customers lot a

seen U.S. really may PHC both help achieve opportunity opportunity the to So India. the the grow release other business we some in segments, trucks to in but for they’re other in the the world, for further that have, a also some that’s today, and and press most today. has there road. traction It’s growth we gain think UK think in fit We lift There parts think is something activity we a down notably heavily us. opportunity global where have in as we that’s of is an also planed in important in you construction some operations it’s good

Keith Hughes

this division, be in is reported And specialized that will correct?

Mitch Dolloff

That’s correct.

Operator

you. Thank

line of the from Griffin Raymond with Please with James. proceed question. comes question Bobby next Our your

Bobby Griffin

segment were Just referenced. slide on product production furniture the efficiencies the in some

Just business upon were those curious if impacted maybe what segment? those the maybe units you and within what could expand

Mitch Dolloff

we They’re growth issues had. really primarily related that

struggled our to is time quarter huge cases the door enough and get just Adjustable First we’ll some to saw those get fourth worked out Bed to processes. that volume in led improve there. where We’ll that capacity increases over the our in you get in additional some and cost out we

We’re but Furniture, could where is term adding the would and in the with up keep on same our also on bit headaches. rapidly We I also seeding demand in business collaborative of processes. primarily growth, it And on the sometimes caused us quarter it work to say there, our in a thing. capacity, We our cause but Work just near definitely struggle pain. fourth some we work that improving increasing growing capacity,

Bobby Griffin

steel And the is in to the then area? a on majority pressure bit I because trending pricing the products. it’s of in that versus process faced versus painful production how that think price cost? and segment, a longer components part, the related know more Bedding related through the steel there of do pass maybe little issues segment second about in furniture And Was or margin the I how recapture

Mitch Dolloff

piece home and painful versus bed, fashion price, the that it are base biggest in of the Absolutely line material right and is related static the there. furniture most

is the that biggest by far. wait So

dynamic. In terms complicated bit of the of recovery little a steel a of inflation, the

dynamic Furniture the to quarter. about in production steel lower able of cost the U.S. the fourth Home have general of China where And it XX% we that Asia in have than element Then material that been the of in continue probably work so but continued some we or in recover is So the it's in other there challenging. of to increase, in

production, been recover material U.S. the to any it’s really our of in inflation. difficult so And

reduce working cost cost ship our So to will are significantly opportunity. increases, unit, only production we but lowest to in business work continue and we to not to also to that price

market for to little there’re us, may do we we challenging can remain destiny and So improve dynamics the that some that control own results. things bit our while a our think

Bobby Griffin

me then standpoint. the I modeling you’re guess And 'XX? you one updated lastly from in for the a just guys weighted Auto your the by forecast imply markets in? Global The Build most from for markets What when is

Mitch Dolloff

as We'll think of in a from America. America We're towards I years. call seen. last consistent X%, Asia in but are as bit and the developed last China, significant few pretty South a North little But those operations from we've so recovery in growing see well North the about North we've heavy when Bobby, Japan, it's big we just look markets, pretty in America versus America, seen overall Up with and history, still, what North decline Europe not the have Korea, Europe, similar. year. weighted at throughout it what change

see it steady as we So goes.

still or fueling continue to X% it we're that points. and really as QX, we for some wins, there our comps give by North That year see the do QX market beating sure, us in did then in will see to term, growth XXXX start XXXX basis for what QX. We market some were part apart really For picture of the and what tough first up X% program America big the in disruption the and still but look in and and long we fell the the to committed we growth. strong growing we

Operator

Thank you.

with Please proceed Securities. Our of the Moore next CJS questions. question your comes with from line Daniel

Daniel Moore

PHC circle and more well. a I little drill bit on to down as back wanted

can XXXX talk what's unique what’s the in about detail a embedded attractive EPS and of in You next we profile your the terms years, gave and guide? the market. little get margin where some over today expectations bit the at couple accretion of Maybe

Mitch Dolloff

And will the EBIT. So by EPS impacted accounting We in market have when double modestly margins be see digit one. that. purchase being year to we accretive we as course, are of business

Daniel Moore

I a synergies, opportunity And in savings further? little as expansion out we larger for think cost and look opportunities, terms of

Mitch Dolloff

first is platform, of looking I building that term. the think our will this build area, got some we're sure long we've for in do. as be to This what swing we so in the for part

Daniel Moore

growth, add split between range acquisitions? growth what And the lastly XXXX might you goals. organic versus organic embedded Any your assumptions of

Matt Flanigan

definitely you growth. organic towards imply of any leaned organic X%, to X% the acquisition we of be they do closer heavily that. supplemented that and extent acquisitions. But to of to not weighted with time content towards it’s then we that in wins will Definitely heavily can be course, X% would Certainly, gains programs growth We'd to the to never and already. sense on part certainly see a organic and that but X% and strategic say anticipate great mix attempting horizon

Operator

Thank you.

line next John proceed Nicolaus. your of Baugh question Stifel the from comes Please Our with with question.

John Baugh

input If combat you margin Fashion any in and seeing compression might areas? price inflation you and can How where those address that pressure you you residential don’t cost your otherwise there with to are But Bed Furniture. where the are of business already did you parts increases. other expect fully offset

Karl Glassman

is The no. answer short

that the we spoke than albeit the global speak. recovery Bedding commentaries as Perry you through We know are to connectivity with Europe, full we The of industrial. inflation in will that Bedding get get lag in passing

full with recovery the just our get to is hesitation lag. there about ability So no

some lower but those business, businesses really the it We and as business, recovery in gain Furniture the said, Though the commodity cost -- a get Mitch really of the degree opportunity point. to than more more Home to side in at it’s competitive though is will oriented and this a continue lesser add fashion a rate.

John Baugh

anything to input foam so or of fabric there? there -- a outside new or there relating like issues cost issues or sounded steel Karl Are that are answer. steel concerns And

Karl Glassman

businesses. The foam cost, the our really global for foam really, good inflation, is Bedding

penetration inflation gain the XX% U.S. XX% to that our of was content Edge significant by of foam It’s two remarkable were that we said, of because Quantum product that is years Perry preference As anyway. consumer been getting Core Comfort Quantum just is accelerated innersprings, for while of only introduced Edge. It’s me XX% not the ago.

We rate attachment expect this that year. to grow significantly

evidence would Vegas. week last seen You in that Las of

in and is seeing job we our increases Hanes in They positive. get announced those. for the only side is inflation will foam industry of full Fabric so good, sure a They side. us impact have recovery inflation, are Geo Component fabric well. negatively a do wonderful the So both as doesn’t they businesses, inflation

We’re not Automotive the it’s business. our else Bed on anywhere and Fashion we’re other impact not a just we Furniture steel to in sensitive. just not lesser in question smaller exposed Automotive, The commodity our Though, the about Automotive inflation is than business of concerned commodity discussed as inflation about because degree, business. real Home

John Baugh

different U.S., color the some And on of then like U.S. important about to it’s talk Bedding, you. Thank international which similar business? I’d there you maybe in always from trends an part or the seem your and but what

Perry Davis

management the that XX% one infrastructure a in last of this to to an our and with is unit business quarter is It in important of got Europe part. significant, add-on the in growth to of also there Significant about in out part and overall the about year. growing for building year-on-year that because support fourth growth inflation, a quarter that outstanding We're our Europe. significant team year John, continues Perry. XX% facilities. growth an of business. XX% We've The that is grow fourth excess of in

and We in there now also America see significantly. in our position grown right Brazil. good opportunities South We've

appropriately rough we've activity for profitably. it's economic There of Brazilian of Looking there. economic to winnowing And it able in market, expand competitive our because been cautious growth geographies we've been to doing bodes out and well the that in in bit been has climate business other light heavy of pretty that but all the for paying a new us at of opportunities that our in there a us. And some introduce off headwinds and products. of

by have the particular on heavily storms two operations degree, and is But our operate we South those markets as that provide the two grow we us. international to where are Other weather do good in play for for in then and been us markets Asia-Pacific, some differentiated. and are represented over strong generally the compete definitely have we South not we turn. will continue to So we are Well, play last side. has growth And products heavily areas in business We at America. that and by a economy but to And three areas. strong primarily somewhat lesser point strong the Those there overall, Europe in don't areas to that been Pacific, small that markets years, Africa. modestly. those continue commodity those

Operator

Thank you.

of next Piper Please question comes Jaffray. with your Peter line from Our questions. the Keith with proceed

Peter Keith

question on business. Auto I've the

had I growth? a quarters? we the digit now forward about the think in to destocking quarters of row growth. tough some of next guess two bringing the going should getting few So And we then back in when you segment double U.S. think that think dynamic Because I now of for you're up X% addressed How compares. Mitch about that we've should

Mitch Dolloff

We for double digit year. growth did have full the

target our We So really being long market. very a in much double we've to as achieved. I the some what see term gyration disruptions as look But program view. the may launches happened, digit long and at this growth over term, have as is quarter-to-quarter what that happened other we

I'm that on So can quarter-to-quarter don't it -- know I fluctuation. I not comment

Karl Glassman

to looks Peter we program little over into basis that X.X% like range. visibility on and to XXXX Build. based Global Build the it of to in have awards, And XXXX on a feel Global completely add, significant is forecasted growth be clear to bit, confident X% points pile

position our hasn't So changed at all.

in with our Automotive. position happy wonderfully are We

Peter Keith

And base up adjustable just the then on is side. follow separate

year, be phenomenal in right that’s this seeing there large now? from which driven are the or will growth So half the strong gains customers right now. absolutely growth primarily by launched multiple is you XX plus if growth I percent that of am curious conversely the at Firm being driving ’XX is first there maybe that Mattress

Mitch Dolloff

that. it’s than broad-based I think more

our factory, to we’re those with also seeing we’re growth but service further program, direct large customers to direct ship program. can the programs throughout and doing base, we what container penetrate quick offering For retailers different types of sure down retail from

important Bed really of business. it’s the combination So Fashion part our of and Bed Adjustable

throughout drive to further strong chain. So retail and penetration our fortunately the at customers continuing both major

Operator

Thank Instructions]. you [Operator

your line Our question. with Company. proceed Justin next Bergner with question comes Please Gabelli the from of &

Justin Bergner

your My how shape within I you guess out how in XXXX the about Are within unit, to first your to guide. does component XXXX XXXX be question relates that dollars U.S. innerspring guide just up and guide? expecting spring

Karl Glassman

The answer yes. is

gains mid there, out box And X% fourth a In business. spring in digits, XXXX. specific Bedding Adjustable and of we innerspring of constructions just aggregated loss, data comfortable down single content because were a take U.S. dollars yes We innersprings, expect if it’s it Bed we Bedding they dollars innersprings, were it, to is as give to which so up pricing. actually lot quarter, be some of the just becomes data. were good it to you innersprings But up tend really but

through question, expect the same we U.S. XXXX. that expect The XXXX. last your We all to calendar to in units positive answer to of in be dynamic continue Justin, do

Justin Bergner

it your versus you And targets, budgeted then prior go and seems adjust long-term slightly that for EPS about the think then higher go previously the the XXXX lower higher rate. the sales what to your slightly like lower XXXX, than over the Is margin to switching the for when slightly forward guide? long-term things way tax goal right

Susan McCoy

Justin yes, framework, is. ended directionally that these in beneficial were EBIT with intentionally round higher but bear rate. I where mean dollars think would for a from mind the this also I be, And and somewhat to of all assuming we’re be targets it XXXX. headed impact We tax

Justin Bergner

think should about was growth then organic much underlying we the targets, the And How volume inflation trend? X% back raw growth to to organic I X% answer and question material in within the as that asked XXXX think embedded the out being earlier of organic.

Susan McCoy

We qualifier, have I narrative. a our think, in

So cetera. et for is it relatively divestitures, neutral inflation-deflation basically

Karl Glassman

Yes, currency. in

Justin Bergner

assume or modest some then, zero? would inflation So neutral

Karl Glassman

currency benign. for four significant or and basically we we but assume points, on are don't We'll they those of all the inflation-deflation any divestitures. purpose be the that assume of the guideline No, targets, wrong

Justin Bergner

just then for was And one QX, rate quick one. adjusted What tax the 'XX?

Susan McCoy

XX%.

Operator

no any would back There questions to you. at McCoy like this turn Ms. the further over time. closing remarks. I call for Thank to are

Susan McCoy

us quarter. And next to speak you say taking we'll joining for just time thank to today. you I'll Okay.

Operator

Thank you. This concludes today's teleconference.

You may and disconnect have your wonderful lines at this day. time. Thank participation you for a

Susan McCoy	Vice President of Investor Relations
Karl Glassman	President and Chief Executive Officer
Matt Flanigan	Executive Vice President and Chief Financial Officer
Perry Davis	Executive Vice President, President of Residential and Industrial Segment
Mitch Dolloff	Executive Vice President, President of Furniture and Specialized Segments
Dave DeSonier	Senior Vice President, Strategy and Investor Relations
Wendy Watson	Director of Investor Relations
Susan Maklari	Credit Suisse
Keith Hughes	SunTrust Robinson Humphrey
Bobby Griffin	Raymond James
Daniel Moore	CJS Securities
John Baugh	Stifel Nicolaus
Peter Keith	Piper Jaffray
Justin Bergner	Gabelli & Company

Leggett & Platt (LEG) 6 Feb 182017 Q4 Earnings call transcript