LEG - Earnings call transcript Q2 2018 | Leggett & Platt, Incorporated

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Operator

Greetings, and welcome to the Leggett & Platt Incorporated Second Quarter 2018 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. pleasure your my Ms. now is to host, introduce It Investor Wendy of Watson, Director Relations. you. Thank

You may begin.

Wendy Watson

issue. in of Cassie with also Branscum in our and roles Cassie a working Relations acquisitions several operations and Products Mitch our Furniture us team to the call. at for thank past financial taking due Vice Susan Dolloff, of is and Wendy diligence, the you & the pertaining for and and XXXX divestitures. today’s and analysis. the CEO; and Product today morning, Residential office Good for me strong President Products President of President with is Susan and the Glassman, CFO; works quarter Investor Specialized background and Investor With call. and has call. Perry on IR. year has are of EVP She Karl start to the Platt's has President Flanigan, Manager is us Vice Products our lead segments of and and Relations the been held part joined a conference with not Segment. Industrial our I at McCoy, and of She Leggett Development since directly Cassie Investor Corporate today many accounting department our Director am years one as of of and a those controller medical-related businesses Executive Watson, Matt EVP Relations. with of me President second as acquisition out joining Leggett in Davis, for

today’s the questions is will and IR for this newest to our copyrighted This any yesterday’s Flanigan excited or our and This available are call of finally, Glassman address that with major be Leggett is our recorded, as morning the of discuss Karl not is The statements expressed conference we answer may agenda financial in of the press for non-GAAP Matt IR follows: our being start Those Group Leggett’s the to discussed made summary that to of have release. A will material. Company the team. set a will the of call the Relations or risks We XXXX; release on call or member along posted events, remainder a without as Cassie details website permission. I and differ recorded from of is documents number replay concerning to you forward-looking outlook undertakes to broadcast for remind may statements. transcribed, have. Platt including materially Investor & or statements. obligation yesterday’s no strategies, expectations, information portion revise a the that the remarks these contain objectives, future We website. supplement we update trends, information any segment this and reconciliations. uncertainties of results summary you need and details. results due constitute events Actual slides with PowerPoint financial portion press and call,

and release additional to these Factors and and to Karl. Statements entitled press XX-Qs our please I’ll Forward-Looking of summary Factors. a and turn sections the refer For yesterday’s Risk over call now in the information, XX-K Risk

Karl Glassman

sales participating strong you Yesterday reported in second growth. quarter we our for Thank morning. call. quarterly Good

currency from growth sales added approximately sales to Second increases volume growth sales quarter to a and a sales and increase price billion. X%. prior year impact. X% raw Organic material-related by also reflecting Acquisitions XX%, benefit divestitures XX% grew $X.X while X% reduced X%

from market and XX% in U.S. Comfort U.S. in from units innerspring the quarter and Spring, in quarter direct-to-consumer in performance X% sales gains Work mattress in X% in Spring. strong up XX% in Organic in growth share several Bed, with Furniture were grew came XX% businesses. sales Components, XX% Core Adjustable Our in Geo Automotive, traditional the second brands. Notably

in perimeter full content $XXX $XX To increasing gain to capital Core continue our million, estimates through mattresses customers’ growth, expenditures Bed these although Edge earnings primarily call. excited are cost and approximately we and to these Quantum year guidance our Comfort our XXXX million We are opportunities. in business full later year for start-up will recently will accommodate higher new our in this new by products. the spring to associated value will ongoing sales due there awarded be Bedding with earnings, Adjustable we and significant our that programs discuss Matt very business, sales affect about

lag. year. primarily but with Second pricing Products call, our margins quarter passing recover lag worked compress XX-day through Furniture first last earnings the in costs. in the higher Residential pricing explained our This had fully steel second second costs, $X.XX we effect associated due earnings per along our increases went steel the quarter Price were quarter segments. into from typical margins the continuing affected quarter higher would quarter and and $X.XX we not during our to down to In EBIT $X.XX, share inflation

increase While metal our If in steel our cost our scrap businesses. half increase prices stable with the wire second in raw XXXX, a recover – mill margins of steel and not majority and consuming margins accelerated. in improvement scrap EBIT steel at quarter, Products The further steel Industrial prices margin scrap the rod the corresponding cost should rod segment. relatively were scrap do of costs further between in improved the

which in continued increase our the Home utilizes U.S. has business in flat to steel price However, Furniture

competition we implemented higher price our increases, ability offshore recover cost While fully business. to in this have limits

operations since to Last production apply addressed the lower I input briefly China tariffs have list products We proposed. that early in of from costs. the to products our reduction tariffs Section on of a announced been XXX of a steel and continue year, Section duty quarter, potential focus on advantage XXX transferring Chinese XX% long to take time, cost that some

turn to our to over have not Matt. but are might them We through what negative, the the effects now do determine call on working operations, list expect and these I’ll material. to positive tariffs both be

Matt Flanigan

Thanks, year lowered versus last quarter everyone. should and morning, full now flow support Accordingly, at from cash a ended capital good year by quarter, of sales. now working million $XXX as adjusted year annualized reflecting expenditures $XX we operating $XXX mentioned, $XXX percentage of million quarter cash Cash about sales $XX as increased approximate million. our in to our second operations have operating Dividend second to estimate XX.X%. was the of is million working the higher Karl, $XX capital million We the investment a this and year. expect Karl full decrease and with estimate cash million require

organic acquisitions. After priorities top and use if cash strategic these there to priorities, generally cash still remain growth, As we dividends, repurchase of for available, our stock. intend funding always, is

PHC slightly of metrics stock investment XX of XX% repurchases gives expect $XXX total to strong X.X and and XX.X%, decisions. with cash in the to first above these to half us months making We considerable the approximately times flexibility remains the working second investment for Our debt quarter or when our net $XXX repatriate year. XX% increased Both range our of of million recent capital typically repatriated and acquisition. the trailing capital EBITDA. target net reflects higher capital in financial base million and and cash adjusted currently the quarter of the year this full offshore ended of was debt We

range year our unit. sales business are despite due we in XX% demand the Full growth billion an $X.XX Bed represents for be yesterday, expected sales announced between versus we Home are Furniture in softness XXXX. sales to billion. businesses lower our our in Fashion $X.XX lowering in sales Bed, strong our than XXXX to This that $X.XX some Adjustable retailers guidance reported year-over-year to anticipated and of and previously As to billion major increase of X% now and

positive continue We volume currency mid-single-digit price well are expect net increases raw strength growth. to divestitures businesses, of and growth expected from sales impact. to in X% Acquisitions, as material-related to add several as a

back main two, We inflation our to ability fully from prior recover Based year per over full new are cost EPS and $X.XX in should of lower full Home also margins number EBIT in between to versus are increases; our year year Beds. Wendy. our and steel turn XX.X% cost limits number continued XX% assumes share. range, and sales startup comments, impact be The costs the three, Bedding three guidance expect to $X.XX share changes be and lowering in $X.XX our and With to tax those earnings EPS to Adjustable of full programs year $X.XX competition I’ll one, now call expectations, XX.X% our upon per full offshore this approximate range rate. an Furniture, guidance XXXX guidance now

Wendy Watson

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

you have to and If are Michelle, reenter as begin we session. please ready the the well. we will Q&A answer questions, those additional queue questions

Operator

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

Susan Maklari

morning, Thank you. Good everyone.

Karl Glassman

Good morning, Susan.

Matt Flanigan

Good morning.

Susan Maklari

color you around, of a together the operations? obviously bit think about shifting the few over in sort timeline give some I should you on how is quarters? moving the with question us parts those that you more Home business. mentioned, first My little can And terms guess, we of Furniture where of are coming next

Mitch Dolloff

Mitch is This Dolloff. Susan. Sure,

that’s if and there So, price split sort of side okay, demand the of into parts side. is inflation two then when we steel the in the sort it

actually the year. demand sales business, the the the on business two we end factors. year of based expecting be are then, we’ve really were we at up slightly reduced expecting on our the over So, outlook Since side, QX,

low generally as is demand margins is first market in weak we shed second just industry some the loss of and accounts. the share The

we produce make we price it. products as going if willing not not pursued So, we to are money to are on increases,

raw increase and Karl while lower the In QX, And we passed material competition some – offshore recover U.S. on the the material about still effect our QX to that price side, impact cost EBIT we’ve fully our to limits had on cost. cost of had as inflation. raw higher then, ability XX% definitely in So, the along continue mentioned, implemented demand outlook. increases,

had we that our gap adversely. impacted a So still year-over-year earnings

and been increase operations but still China. production somewhat cost to Chinese have those we of gap. of half of we’ll we’ve overhead tooled US the of we and mean our and for time, year, are to the recovery of many a think In some the input our In expect lower the both take advantage operating products, We costs. our in up in transferring cases, reducing back already to products

So moving we as we can. are ratably products those as

but at working those on some also are are we still offline, We looking capacity taking studies.

cost as the back to the of global labor year. we the our as through steel, half transportation impacts. well So, footprint manage that unfold optimize expect we’ll In currency and to longer-term,

So, I restructuring goal be particularly XXXX. the think, to substantially of half we’ve but done with to still whatever the end made into the back activity quarter, the more in we second in progress, of year, early have our work good the by do have we year, is

Susan Maklari

Gotcha.

little how more a may together? And it then, that’s timing then, you that coming next us from are on investments through, be of the support that The I that my – programs will revenue bit in give offsetting making new we Okay, million how question about helpful. is that? to come and can that for think around detail should And the come will the some Bedding. $XX the are you guess, and

Perry Davis

able least share. part been Susan, some this is at that. of I Perry address, pick additional We’ve Davis. of to kind up

regularly, to box In now be are to gains content bed supplying several addition about we we to products the entities. talk that of the pleased

had foam new all are that been We Others, introducing a who have beds lines. beds, foam, actually formerly hybrid transitioning product. some are now that to some

that’s cases, In a So it’s Quantum Comfort Comfort Edge Core lot a Core. of product.

shifts continual we not mix, only business to mix. shifts but new picked as our So, up, at we look our to

need capabilities. continue likely have grow we with the that to more assets to our assets to the and as favored in add into We We of we’re business. and will this XXXX through year production look invest those enhance remainder

Karl Glassman

narrative Perry’s additional this then because there is great Industrial the that, segment, spot company, is on, well. Susan, that opportunity Materials as for which upstream into And to to add a the flows volume

high carbon, Comfort high wire. So, Core, know as you is quality

with of costs are a So is of that number through There and associated them. the is program grade chain new is accretive. produced the product startup there really every value

Matt Flanigan

to to are just of And and the we the about two tied like I $XX And the is pieces add in about. places $XX number, of pieces million elsewhere, capital, of mentioned, $XX the tail which Again, bedding at Perry the million to – just already which end a million we commentary little Bed-related of excited very Adjustable that big ask third activity. capital. a two-thirds about relative Susan, Karl is our then increased. the those mean, our few or you that but touched associated I spend that with shareholders’ that are really specific

Susan Maklari

Gotcha.

thank color Okay, luck. and for good you very the much

Karl Glassman

Susan. Thanks,

Operator

Thank you.

next comes your Financial. Our James Please Griffin question Raymond proceed from question. with Bobby with

Robert Griffin

Thank you on and congrats everybody volume quarter. morning to good a and good

Karl Glassman

Bobby. Nice,

Robert Griffin

is of first can’t It’s quarters you that XXXX? Furniture the it’s weakness a now, maybe going Group. end you you end-dynamic given kind versus If to as on type want that anyway higher there move question lower-end the as of stabilizing how what’s us kind a weakness at or or issues about do we Home understand I the stabilize that, help guess, of perspective. that I kind in couple on competitor follow-up kind the then, of we’ve And the the see been seen of way top-line more market. well, in Susan’s can into

Mitch Dolloff

Bobby. I’ll Okay, Mitch. at is take again. This that shot a

So, I into but China, in the guess, cost some the both US lower dynamic we see industry. side finished both the weakness, furniture the on definitely US really from motion the today, created China and in coming disruption actually has of of more

So, the of related motion is most I the really – our think softness hardware to us. for most of

That and well. wires, into side of stabilized components that pretty US another have other has that We variety sleep of business goods, the go distributes of mainly business to singulars manufacturers. boxes, finished that a side

that’s cost the well motion on reduce shifting of real competitive as side, to where can and means, production So, our effort more taking become organization, move optimize production as to much a is as to we cost as to to that out the China. more

XXXX, and – we progress would be far be can just think we so we we more in go made competitive. position So, to into think at a - we as we that that, cost simply make head better

Karl Glassman

bit to shape value-added in It’s as are is Mitch’s protected low-end of United we equipment not you going Bobby, if add-on the to a continuing of lot XX% business, commodity stratification there on price out are know, commodity product that’s look is, about side to the little has earlier the it competitive, of that sales products, IP high-end is no versus you really at with the is, in that become the cost of our the statement the product. good on grow, steel a to And to with a – that volume States delta just margin we in do associated China. to it. very

So, expect we where shrink, focused business mechanism the to Furniture hardware to can more and would be definitely the value. and side in - Home expect add areas I on significant especially

Mitch Dolloff

was have we’ve back making towards where rightsizing say along sort to as Yes, that’s QX, that’s it that and within bit way and QX disruption lines. a way but great in I mentioned of Bobby that – the the it those half, a in seen of little our

Robert Griffin

guess, And program, how in around understand or but we more seeing slowdown I lastly to of relates the are or bit support growth the there? better clarity in investments a better then, coming to guess inside second of maybe particularly the from the little me on program is, capital I program kind down new just Thank the the help a ramp of it trying us to old Bed Maybe Adjustable you. the little half. bit an kind get in a wind and

Mitch Dolloff

Bobby. Okay,

Karl Glassman

that morning. I of lot having But… leaving a a Bed story. is is saying Adjustable wonderful our fun story am Mitch this

Mitch Dolloff

sort of that’s if answer okay. of and question, that both let me, parts Yes,

year-over-year in our And were and XX%. be north XX% QX. up sales in expect year year-over-year we QX sales XX% So, our full growth Adjustable to XXXX Bed well of

Karl said, as story. very a positive So,

even finished strong, we forecasts As in I that, were QX, our hindsight. too than customer stronger guess

us XX to so talking back led to we our year-over-year us now. that still bringing are And the – XXXX. a growth that about back outlook cut XX plus on XX But bit to percent for

think bit way north I confusing, it. very slightly a growth good, So, strong know at think But of the to it’s I little XX%. less about is at it’s but still

Karl Glassman

we believe category continue to grow. will the And

or heard the other grew their XX% – day on that quarter. You’ve adjustable Tempur the second yesterday business call in Sealy’s bed that

XXX. fully mattress say Sleep You those that market both frank be category. is we real firm and in is there are they half also advertising to back heard Number are the The is, engaged the really about of growing are now optimistic and to committed awareness. What customer is providers

a will at continue just forecasted. the we grow had business So, originally lesser than rate to

is And a need long-term we us. is really but capital, because just categories bit invest to it it confusing, believe outstanding for to an grow. continue to – to is continue are So we the going story we

Robert Griffin

it appreciate extra I all I the much but Thank on there, I the mean, you. too pick detail. if color. Mitch, do appreciate

Karl Glassman

It’s just And congratulations him, good all Bobby. Bobby, the for on on a personal from us, of training promotion. note actually,

Operator

you. Thank

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

Justin Bergner

Good Karl. to best morning, all and Good Susan. the morning, Matt

Karl Glassman

Thanks, well. as Justin. you morning to Good

Justin Bergner

terms wanted sales start-up are on the better say costs, prices I the drivers, that just of of understanding and guide in safe of change Home to the ranked those sort steel in is sort Furniture then start-off guidance to order the of the of bridge, expectations, lower the three earnings magnitude it in or…

Matt Flanigan

Yes.

Karl Glassman

Yes.

Matt Flanigan

certainly The relative them, for you sure. draft litany number down in importance. they of one, as order and there were yes, Yes, sequence in is the sales and then,

Justin Bergner

are basically about guess, that, for guide are of by X%? the segment lowering and revenue lowering that furniture centered X%. guide you sort the that’s then, sales sales And Okay. If your down entirely mean, I by you about draft, products I around

Matt Flanigan

mentioned a two-thirds hardware bit midpoint third are to again, pieces main tad sales less, and just But about. the about quite relative the are about drop the a the the Adjustable maybe there. sales bulk which, that just story associated hardware-related. with general Bed dynamics a The Mitch is you heard furniture furniture in two Those of

Karl Glassman

embodied therefore that segment. Furniture point So, correct. is your Products in It’s

Justin Bergner

on this specialized trying products these are Okay. Or had I contributors year? part of out the there the And meeting well. positive positive is, guess, figure then, seems final versus business of of of guess, be And out lot that pretty in the some is, to question offsets the sort aren’t set am in expectations? the residential sort in business what I firing I your guidance to earlier to early that expectations strength you or is a

Karl Glassman

As a way on to XX a are that that we was our units guidance your There well. – good earlier of that matter based performance. to of it. fact, – in that’s business there our put is continuation XX extremely wonderful had are performing earlier – a guidance point, outsize But stories of

that number second were our definitely little albeit with tax a interest right So, but offset help, rate quarter, expected, a we we by bit on of expense.

just So, forecasted. we XQ turned out as had

guess So when growing quarter guidance the taken units we from Well, a quarter. task little end the expected were and they our based that we on grow a comfortable at that grow would perspective bit in first the we we that second that, X% in said the have of was I future would units mid-single-digits.

unchanged these Adjustable two is other Bed. slight guidance than in Home headwinds of Furniture and our the change So,

Justin Bergner

Thank Okay. you.

Karl Glassman

Thank welcome. are you. You

Operator

you. Thank

with Please Daniel comes your question Securities. from with Our proceed CJS next Moore question.

Daniel Moore

three the expect half into terms XXXX? you the in maybe a year And the can you the the the are do what Thank second EPS linger it’s know to startup referring of of quick and color. and that impact you morning. guide, for the Good but follow-up. those to number in quantify to time cost I

Karl Glassman

good a of Bed to are old there the margin be remerchandized the ramp remerchandized bit this And a of the really line. We that embedded of time which needs the and growth as of costs aged and of large that an every little little remerchandising Bedding Adjustable program line programs and business. program startup pressure a a the new sellout in our a are opportunity. is The had is is

will two We see issue. continue really one-time primary to not the be no, and XXXX event. expect a So, drivers we a do those that as this are they

Daniel Moore

million the elevated CapEx. don’t Very helpful. a I little A It know, but want XXXX similar with bit of question like sounds moving is guide, to $XXX into you get to take state. roll that an about? might to programs year? for your give this come off think are or prior back year and to guide decent runrate Or a might where there was this

Karl Glassman

I – I year hope don’t it shareholders. I looks there well if But market know know, and coy continued But program how CapEx next know. Dan, it’s wins. – is our like just I I of because the would invested share don’t XXXX monies at don’t know. I really that gains to for be the question. CapEx indicative rate, not same being that because that just – with don’t you, XXXX, our I hope are answer are

Mitch Dolloff

lot where Yes, to guess. like I $XXX we we our there Mitch, pin for XXX think it’s the starting million. is wouldn’t now started at a know as up of in early try the probably, guess this year starts bias that closer $XXX level million certainly at at as my today, million would this to But be, probably down might here from Since a a you mix. again, is but upon just moved It as too coming really that million we Dan, Karl start to to things XXXX best that $XXX million, year, $XXX best again, our the it’s sit said, organic add be are to might that. based guess,

Daniel Moore

Very helpful.

performance it’s couple you if now to of your on the comment Lastly, been PHC, quarters for that portfolio a in the relative of expectations? a had

Mitch Dolloff

is there, terrific pleased fit very in doing are Feel and team. and Europe. us. into a about management cultural job Leggett US both great the PHC’s been systems. in good a We’ve the Demand again. business has industry very Dolloff, in well our that integrated are Mitch the is with this Sure, very very, They strong

with keep little to bit We demand. are struggling a

the think I chain is. supply whole

for inefficiency, got overtime, problem to of extra very little little bit a bit a but it’s solve. positive of we’ve a us So

expect we even We capacity there. some that expansions may make

business. pleased very very, that overall, So, with

Daniel Moore

as Very obviously, best along well. And you. Susan the Thank good. to please pass do

Karl Glassman

Thank We’ll Dan. is listening do feeling you, she listeners, now. the tell that right I all and the will love. certainly is She

for you thank So, that.

Operator

Thank you.

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

Keith Hughes

to the again, I where big willing to Furniture, down problem from but go have back demand or to on picture Home this this of you. pricing Thank where a a just has at to this US a is is low-end make not from are consumers go the you gone just market perspective, and the money? markets just

Mitch Dolloff

is Hey, Mitch. Keith. This

I bit of is, think both, the answer little a right.

So, there very also, the Karl expansion is demand the there furniture. as on hardware there particularly consumers mentioned, in weak US motion at is Furniture and low-end, Home is

Keith Hughes

has There upholster a just are motion for buying time. been that long as consumers big much furniture So, now. part other not of

Mitch Dolloff

price I going I point think see side, motion end. think really that much, but low it’s the is think so that that I to still on there we the demand

is. So think really issue where I that’s the where

Keith Hughes

to just And Okay. be XX something the seen – the guidance, about X% the and on need you in – guidance assuming on be clear range? the up Furniture the would - half similar you XX% you first up Adjustables are are to first percent are down to Home half about in in and the under results numbers,

Karl Glassman

half year, yes softer back last say, an strong easier a has Adjustables. really would half. comp on They going Home had first Furniture I forward. a

think that. I I haven’t dug right. But that’s

Keith Hughes

going to down. It be clearly is

down, right? it’s be going are to assuming You

Karl Glassman

Yes.

Mitch Dolloff

year-over-year. Home Furniture, see I’d being and about Yes, it down X%

Keith Hughes

you. Thank

Wendy Watson

for Adjustables, low-single-digits. would that Keith, that said, particularly now up the we would growth the based be And say we segment strong have full high-single-digits would segment, in on up year for and

Keith Hughes

I which sorry, is am segment up?

Wendy Watson

Furniture.

Keith Hughes

Furniture.

Thank you. right. All Okay.

Karl Glassman

Thank you.

Mitch Dolloff

Thanks, Keith.

Operator

Thank you.

comes Stifel. Please with with John your proceed next Our Baugh from question. question

John Baugh

Good morning Susan, to there best. change? LIFO Cassie, year impact any Timing I outlook first for and question right is the the to guess, is, the from the my welcome team in. and all the

Matt Flanigan

our $XX.X update, LIFO we estimate as year Well, know, million. to you John, full essentially

after we the out that’s bit So, quarter. than more started a first quite

XX-ish or. to closer – are We

So ramp we up inflationary with we keeping environment and see. that the

we So the to perfect what is for well we out course, of million that plugged is expense third million as full a see turns that if and be in have the full expectation half, $XX year. in refresh you year quarter, we’ll XXs LIFO $XX to the once about time, get point And the know, of us for estimate that both terms the in that and into obviously thought if adjust inventory a rest yes, we’ll now tell days it crisis market is and earnings as the our the for accordingly. correct ago. higher And what levels XX in of at that into than in baked guidance then that updated But, we it’s year. of it’s the significantly assumption back

John Baugh

translated from versus look so, at impact we as ago, correctly? LIFO So, is negative there guidance today, a reserve a I higher the XX-days or do not understand that

Matt Flanigan

yes. is, No, there for sure

John Baugh

scrap outlook good of between back I – the in relates anything How to And year question changed that and the that? all that’s half. or understand in for the rod. on what quickly if it rest as spread does worked then, the Okay. same is the and quarter how second bad But, gets

Perry Davis

obviously pricing spreads, that at those has do XXX as growth tariffs. of progressed. taken because of reduced. domestic to of they more products to rod that. good imported marketplace right and rod have part of John, kind of They’ve years most effectively year. so, has scrap the cited able for the the a rod eliminated, and been the pretty able The are this been supply. rods have been through push dumping pricing power, But the strength it’s slack running excess were pick first the and end The They producers that of Perry. right is and that longer the now. in pretty It’s XXX%, is been have so increases supplement year Yes, cases buyers able lot the their and choices and this those in not picture thread but actions suppliers in the to their tariffs and Part and of of with from the up – domestic in part the the to by now. last of to to increases eliminated a imports some all no full They hold look rod

that of over sustainable how we steel is a we It’s forward? hard won’t So, see it’s going rod the next several weakness the that months. markets market, to but suspect gauge, lot in the

John Baugh

Okay.

me. to just prices inflating if really up wrong, steel, issue had this you sum tell can’t the please steel with raise flat got So furniture there. and We’ve

reserve. so or then playing issue out we ago. So would far and that’s days LIFO less XX have But is somewhat scrap guessed as more have spread higher one you the rods

Perry Davis

Yes, that’s a higher It we going first took might at our to I in about maybe in million we last LIFO half actually have $XX.X year right. first LIFO, back months But, this we as expense of million. little $X.X what thought six the time. release, the than year, think said

there expense So right there the half of the first LIFO company. delta year in in is $XX.X the for million

Matt Flanigan

of for LIFO XX John, the are I bit everybody our full ago expectations but more year. here. talk to LIFO And am increase compared we lot been than I sure, out $XX know, little has the days aware and a in million

given think was $XX quarter. the how mix, – of ingredients last of So, end up do – estimate beginning it’s what of know or you have is have those more to where the what from last quarter we all we if now gone, much the want at our million at in

John Baugh

none might I your wrong, this and open changes guess, Karl too your that then, king pivoting Perry. is Bedding there for for of question Bedding had dumping that I points Thank there that the – be price guidance entry assumes great. we filed. I If Okay. a coil me, to guidance producers a on was give trend correct Domestic assume or would you dumping whatever result you. quickly, is, of and petition but going know your what in the a Is anything there when is as is, petition? And

Karl Glassman

not. we that If our of happens, it’s going We anything Yes, will John. address now, don’t that There not forecast looking forward. any include is into at baked but time, it forward. that in right

John Baugh

you Great. Thank good the color and luck. for

Karl Glassman

John. you, Thank

Operator

Jaffray. Piper of the Please comes your proceed with question line next Our with Instructions] question. Keith [Operator from Peter

Peter Keith

feel and look Hi. wanted I to to Thanks, notable guess Susan. good as morning interpsring being growth I unit going this visibility you like the now that business such positive corner turned to positive at year-on-year? have could business and gains Karl, some the Perry the you to continue callout. some and everyone do with and that, run you’ve forward, share certainly Bedding hi, that content

Perry Davis

half looked continue will. we a import situation. amount have lot mid we value to upper-ends. open by changes But, to of and the Bedding minute are back last for we year, last that business. believe We of think of core going and cannibalization comments, in the business, unit mix some more that coming become tremendous We the coil have a end higher a getting pretty and the back higher there that the past now volume the some, has so The we for than disruption yes, year. right year we kind historically to had happen half We our where that lower of market back at are on yes, the we are is we ago John’s have the interpsrings. is today, a – Obviously, upbeat And of believe that looking the products been market to in that just about we that. it lapped than probably programs of part due produced suffering that now,

Peter Keith

Okay, fantastic.

for last question on Second dynamics. me just question steel maybe last John’s filling and the around

Can favorable recent in within together, favorable that this talking months am that around understand, your anticipating it the back and guess, between or the you could I I spreads been about your how this help in scrap. are very norm? could If spread play out us half have pieces the advantage spread maintained thoughts is guidance, you to historical So point? the year putting rod more you also the revert of from

Karl Glassman

the to marketplace we basically, this that spreads are remain dynamics in are. of year. forecasting so But, spoke the wrong, how kind point, for ago. are a remainder we of few one is matter say going a can will We – believe where today, where up thing that, minutes of sustainable given today we as it’s I wrong just degree the sure, we the at is There are you be through to we at the are

kind Perry fool’s because steel I place petitions year, we late up admit anti-dumping in last into game. that pile and negative end it next of in we the of related that, year a to will awarded outsized You expect that LIFO dynamics as offset is see XXXX to the the that market to won’t spread forecasting as put steel guidance, said Peter, be along today. not and but giving we impact the But have were

But dynamics So, what long-term greater market I I am. just higher the a spread. support declared

Peter Keith

best Okay, appreciate insights I and the terrific. luck. of

Karl Glassman

Peter. Thanks,

Operator

Thank you.

from proceed next Hardt. Hardt Our question comes Please with Crespi question. with your and Herbert Monness

Herbert Hardt

morning. Good

Karl Glassman

morning, Hardt. Good

Herbert Hardt

is, demand Actually best One just the given And order the not commentary two but questions. business recent changes on months, the in patterns. well. as to tariffs Susan, and

cycle is the change there expectations? often gets highlighted as length in, and any own your You’ve things of in the specked

Mitch Dolloff

don’t your in question. there in long-term. our Herb, think change this No, is Mitch. I for Thanks expectations is the any

year-over-year we sales mentioned, up XX% benefit. after were the in As QX removing currency

So, in goal meeting points XX% a in exceeding see the longer-term. to in a of of XX%. confident in we that target production around we by And XXXX growth and remain basis vehicle XXXX as our

year-over-year Japan, percentage, for X% in choppiness huge growth that that’s it for some healthy while major about next on China, forecast over build is is million of vehicles. the and Europe Korea a US, remain there XX several very years and not South markets, the XXXX for While at a and rate at

more higher markets, in the lot vehicles is growth a closer X%. to rate road. in developing results on the The even is it press So, rate –

around market brings the X%. to global that total So

that’s how XX%. to our So get we XX%

usually visibility, we we that programs off. win our award of have on cycle years As to give for of you some years. that. good new programs are six run is target. old winning mentioned, after There business long-term meet typically us confidence coming programs launch and and have sufficient about to we And dying two about We the do exceptions to sort

I think million I in have mentioned before that in XXXX, we $XXX won awards. new over

I market seen in requirements economy OEMs’ we fuel mentioned releases were you news think, last in trade some the have there days in And wars, few and that new standards, mixed. earnings recent Now, the pretty that XX%. choppiness is of are and Japan online may long-term Korea XX% still goal remain coming little our But to South Europe, create bit to testing short-term. that a in committed of fuel the may

in positive other fundamental changes we but two, the long-term. just the quarter are we So, the temporary issues or any don’t of fundamentally, sort see in the the way may business push or negative that on really in demand one business, some

Herbert Hardt

Thank you My what for you. the used second question implications word and paying is, are repatriation that? tax cash the back of

Matt Flanigan

but of to this net Basically, Hardt Doing bringing question, and the started planning the cash beginning Good are tax Matt. of keeping back is year, incurred is cash to or cost at no tax onshore. incremental at We with TCJA, we Herb, beginning the happen. back the that - lot the out getting a make of year. there that

come half would planning million may you the cause year. again, saying this We with We this $XXX million that of mostly most recall, coordinating back. thought back to As $XXX we’ll and about the bring year. back the of in estimated

bit of the quite you earlier, a we quarter. As million in got $XXX it second read, came actually back

schedule, in to right of a us compared of TCJA we what up on that it’s ahead that all at is just and when anymore upshot with So, they not causing track, to true I in bit believe put fact little all, reform. the tax is had

Herbert Hardt

very you much. Thank

Karl Glassman

Thanks, Herb.

Operator

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

Karl Glassman

thank you participating, go ahead, for yes, Yes, Wendy.

Wendy Watson

you we’ll talk Thank and next you all participating to quarter. for

Karl Glassman

Thank you everyone.

Operator

today’s teleconference. you. Thank concludes This

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

Leggett & Platt (LEG) 27 Jul 182018 Q2 Earnings call transcript