LEG - Earnings call transcript Q2 2019 | Leggett & Platt, Incorporated

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Operator

Greetings and welcome to the Leggett & Platt Second Quarter 2019 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, Wendy Watson, Director of Investor Relations. you. Thank Ms. begin. may you Watson,

Wendy Watson

Vice morning Cassie and & Officer today part Leggett Operating Flanigan, for Karl Mitch Investor McCoy, Financial the Dolloff, EVP thank Manager Products and second quarter Residential you Chief Executive Matt Platt CEO; me President taking Branscum, Perry and Industrial Furniture and Relations; Senior conference Chief Glassman, Officer; in EVP Davis, and Good President Products call. are Specialized of and the Susan Vice Products of President and and President segment; IR. Products segment; President of With of

will agenda start financial our address for this with The points details morning XXXX. will of outlook summary follows: Matt the main Karl yesterday's call discuss our a in we and is for made as release; press

the Finally, that will questions any group have. you may answer

recorded A is This or & This posted permission. expressed call being available Leggett's portion website. not We of and we material. broadcast, Those be may yesterday's conference supplement for transcribed, Relations summary information recorded website from PowerPoint details. the of replay is our copyrighted IR Leggett call is without Platt with the slides and on discuss financial including release call non-GAAP the Investor reconciliations. segment set to that a information portion contain the this press along of documents

these or the events, remind statements. I revise company results today differ trends may obligation strategies, objectives, to expectations, and results, due that uncertainties. or of need update forward-looking to future undertakes risks And you Actual events to concerning a materially constitute statements. remarks or no number

the entitled in yesterday's additional and forward-looking press our Risk XX-K For release a of these XX-Q information, please summary refer statements. and to section and Factors

over to turn the now I'll Karl. call

Karl Glassman

for Good participating second call. thank morning you in quarter and our

the leader on good global his missed next and a for friend. of He and Perry year. First, personally contributions with too be and him is service bedding detail congratulate & four numerous today. Davis decades want will to thank a within announced dedicated professionally. is his retirement to to Perry Leggett nearly Leggett Platt I industry both early Perry

Spring to the This continuing where trade we quarter up sales and in in Furniture by also Yesterday, second billion. increased quarter. Products XX% exited X%. other weak increased in our lower Growth more was from demand were demand share ECS Sales offset Products Industrial acquisitions U.S. than smaller in in $X.XX and content was volume the from and softer sales from market gains segment, Automotive. reported XX% segment business

X% X% XXXX. exited down declined volume in Negative related accounted selling material implemented The with X%. business decline. increases for currency sales offset Organic of impact the raw

benefit or to including quarter year Second $XX the even LIFO $XXX the $XX after material over EBIT and XX% increased million second the raw lower expense. acquisition cost ECS of million last amortization from primarily million quarter

These increases businesses in several and lower other were partially offset by items. volume the impact smaller from

quarter basis increased Second XX.X%. to margin points EBIT XX

and over XXX quarter the to XX.X%. quarter basis increased XXXX million points margin million $XX $XXX to increased Second EBITDA of EBITDA second

second in quarter delayed year related ECS markets material raw non-bedding the develop at primarily year, volume, sales higher expected of We programs weakness items sales. sales a from tax quarter reduced previously not reduction as price as Second mentioned, some decreases. lower last or and to a rate. well effective full combination our lower did and from guidance $X.XX expense up by were per due of organic impacted The share were higher $X.XX ECS than our earnings the low is selling that interest and

operations. have our We to production some also shifted Spring U.S.

expected the rod for previously lower wire. primarily lower and trade organic than year steel Automotive market full from demand in reduction is The guidance and production in sales

Work in and the full of year Automotive, headwind Cylinders steel-related quarter But and currency Spring, these you Furniture. the operating we In year to Even expect details on with in year. I addition, the wanted in we later back U.S. be growth changes, several full record discuss expect price half sales a items will selling Aerospace, to to continue in Hydraulic call. as guidance first. cash Matt the our as near update well operational decreases

dumping violate We impose This mattresses matter anticipate matter Commerce end States of more X,XXX%. in determination the received playing news should Chinese laws We were preliminary trade year. a in to a antidumping prices allow the on mattress to antidumping being field. preliminary imported The the industry's final sold positive range a determination that the to Department duties quarter, the Mattress related XX% made at and on mattresses. level the compete of from domestic that United that producers by

continue forward. the going us We Bedding combined strength ECS traditional our opportunities about of it excited in to the and business presents for be

elements we with Furniture and us complete In plans Home, The from be attributable the margin of our already restructuring significant the activities behind and as are businesses, expect end raw the lower well. positive are Fashion most restructuring fixed going by improved the are to material substantially the a seeing both very quarter. up of EBIT from Bed third to in pricing cost EBIT We and lower the and cost. restructuring impact second well quarter as

million year related full million with We is charges $XX $XX which non-cash. continue of to restructuring of expect

half year Europe, XXXX you global XXXX. both be on wanted full Based and South down to with major also is first the expected the vehicle which down flat forecast, and be the the half to the X% latest of now and America, is for X% North on update Korea year. is second the in production markets of Automotive to market. Year-to-date, production China, the Japan expected are We in

sales outperform production While business will to we significantly market. and global forecasted originally will lower to be our expect continue Automotive significantly than the tamper growth, our

turn the will Matt. I to over now call

Matt Flanigan

A at million from million sales second our performance. XX.X%, of the a adjusted record reflected quarter and from capital cash by Karl, last for and $X sequentially operating focus increase $XXX flow was improved XQ last year's capital Thanks, working morning, second working and levels quarter, a year's $XX quarter. flow percentage everyone. quarter versus this our first good which second all-time the upon of keen was of as year in an and cash quarter Operating both million within

We continue expect to our full million. cash operating year to $XXX approximate flow

the is in are require line capital We XX-month our We $XXX with expenditure from million. of year with estimate cash. full $XXX which adjusted trailing at our deleveraging Dividend to pro our decreasing X.XX of right $XXX million times ended expectations our debt EBITDA, should prior quarter million plans. forma

brought cash to expect offshore additional return end. in XXXX before back year We $XXX have million of so and an far million $XX

to lowering be we sales billion guidance As billion announced Full are for XX% EPS add yesterday, our up we XX%. or to sales $X.XX should over to year $X.X and last XX% Acquisitions are XXXX. year. expected

organic X% X% including a X% down from expect to be business. to exited We reduction sales

by Our than Including per $X.XX to has restructuring therefore decreasing expected offset now $X.XX costs is full $X.XX. sales, is been approximately per per decrease adjusted cost. $X.XX steel nickel This be $X.XX range share to year share earnings of due a lower expected share. is guidance to the partially reduced by to and related EPS and

effective margin net be and full year amortization fully year adjusted of shares framework, tax to $XX of full $XXX EPS EBIT million, also approximately interest assumes depreciation $XXX This full million XX.X%. upon diluted million. XX.X% rate guidance of Based this should year of our XX%, guidance and a

call With those back comments, Wendy. I'll the to turn over

Wendy Watson

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

answer as queue well. have are you you questions to questions will we those reenter additional If the welcome and

to Q&A session. ready the we're Dana, begin

Operator

[Operator the line CJS Instructions] Daniel from Securities. your Please Our first with Moore question of with question. proceed comes

Daniel Moore

the congratulations Thanks initial for deltas you for magnitude? relative order meeting bucket you be raws, to a -- your sense Good maybe of order FX, forward of it focus Perry. key guidance two us us it looking Wanted maybe to rank to or the topline industrial to one rank elements to of kind kind And the shortly. possible at give gave taking is a guide, with just those biggest of the questions. auto the vision, Look number the on morning. to things; extend lower

Susan McCoy

that I by saying start named, originally we would we've businesses we've than auto lower Dan, you got that, down these got again all of declines expected.

deflation currency headwind. We expected on have more our be -- a impact sales I'm inflation originally sorry continues we than to and

else? business well as Karl Perry industrial steel you I have named, wire in or and demand also, And rod is that softening that I or other of know anything don't market then, think are The one well. Mitch businesses we

Perry Davis

it -- than And ECS thought. point. softer is Yes. this impacts weighing ECS that at have originally Although obviously Right? in deflation expectation stabilized appears

barring to second expect forward So unforeseen circumstances be going year, the we any half relatively of stable. that

Daniel Moore

your other going And to do expect for we business? bedding one it Chinese rules, antidumping for of what can. to about imports overall type us that can impact incremental Shifting frame help Helpful. is to supply speak of as if potential those gears, on translate I you growth am I the have think you XXXX? the in possible that

Karl Glassman

the Vietnam math down some is places units. capacity that manufacturing Chinese that has don't tough in been China We by we're last were have imports in so the because admittedly published XX% that Dan in which near in know data do early it's like May the had. There process. upshift

it actually been To start a XXX,XXX pieces and the units last capacity. averaged as was much in surge, month Chinese XXX,XXX May written has the build some they about that frame to which year mattresses Vietnam

We facts of July. up positive mattress June first anti-dumping. to the inner the positive U.S. know of and of think some We We anti-dumping. range are benefit coming are three that is sales is ECS of our were in are XX% from spring that do we XX% some What that think in unit the sales in year-to-date. the know weeks

-- as their be that growth in direction, going challenge. have a forward has to back moving than of really kind greater an half anecdotal. expectation it's Things is quantify will to are the But worked We that in it of try inventory of out. bit Chinese a mattresses but right so the the

Daniel Moore

color. for be as Understood. growth you. helpful? And I would on the that That’s have if Appreciate organic quarter Thank it. ECS out good sneak volume you

Susan McCoy

that We don't detail, have Dan.

Operator

your with James. proceed of next Budd Our comes line question Raymond the question. with Bugatch Please from

Budd Bugatch

for substituting Budd Bobby in market. the for Vegas It's who's

Karl Glassman

I Bugatch morning, change. thought Budd, Budd. hear goodness, My I substituting never Budd Griffin. for that Bobby things Good would

Budd Bugatch

Things Perry, you. wishes Things and best And congratulations Karl. improve, to improve.

your resemble I think I remark.

Perry Davis

Budd. Thanks,

Budd Bugatch

a $XX know, pinpoint on guidance decrease. of the we us I to million a But that kind thinking than into some too. of more I is to it. went we maybe $X.XX guess, maybe was you my higher Then I of I detail that go of numbers Susan, level to deflation get greater bit those changes little in got its and you give decrease the the either want numbers? you've numerical give numerical heard ranges know have can ECS. to hoping back of of some kind sales guidance only But detail that. Can expected. I so that. I changes

as how much into of this And I'll just all and secondly the about of health changes? of and consumer this that well factors says of guidance what economy the health these the does ask the

Susan McCoy

offset talked the leaves year is if and as go say plus will hugely that of from -- the We That of before and not minus out raw full organic minus to are minus would X materials those but probably exclusively two that I X volume X a the expect around is not expectation combined not we is inflation/deflation to if guidance. negative. FBG factors Fashion, as about for far the minus currency Furniture volume. exited that midpoint the not X negative X Budd, Bed largely slightly our and numbers effect What organic that businesses. be Home and range the relative to largely our -- at

the comfortably a last in we quarter Remember quarters, be net that were the factors year second we driven that's but two flat this year increases. allow in probably and numeric they That's the to were quarter we're in lower have a price something beginning by third in lot to to two to still first been of anniversary that's and the reference so This fact then as turn and but that decreases fourth to far the increases than selling really were by slightly the net year's went we of year. the details we those going and negative amount or implementing last X% not up position to say.

Karl Glassman

healthy. few that's too The in Industrial think deal we the U.S. but demand on its and there -- is rod, consumer -- wire too And country us chasing to downshift from U.S. is this surprise opportunities. the industrial demand is consumer in capacity health the that Budd, Products of that's in reasonably the much really

interest We and no have that's trade commentary.

interest no need in less business returns exists. of to steel have why not we than that's tons at reasonable we So Steel selling the don't

a but sales, in the pull-off reasonably We're on think for of that's again, demand, consumer greater the So is it world consumer the the U.S. We is the healthiest sure. commentary U.S. European – the our isn't softness market certainly in which hurt seeing some consumer. markets. and Asian healthy

Budd Bugatch

expect for a have those Automotive such I and us you little those disappointment where that – kind develop? a Big the a expand bit profitable – to Mitch forward if in ask give to a business weak? Automotive just on you? can And situation headwinds growing that's to could just going that markets of see on what where read turned Maybe

Mitch Dolloff

is forecast impacts Budd. the decline another and continued asking. outlook. And to This big our July, for element Yeah. took in month-over-month Sure, Thanks another Mitch. that's which step certainly has downward production

place IHS production optimistic think at and forecast. more realistic on our talking feels the a now I I'm with forecast like not own. it about the we're less

where So second flat as now half now a XXXX the of half XXXX. forecast, of basically as with well the of first the place as Karl second the market year the the forecast is half for mentioned, production

comps, when impactful, the you quite at So right. look it's

X% XXXX first from The was half. second half about of down the

well, take facing comps, less continues it, for changed. But hasn't very our very it are business our still we – difficult perform with now long-term pleased and we outlook to So

something get think basis X,XXX I see be we'll over market our to to I to XXX. able with that this not in to the XXX disruption market full the to target, we points get to likely year, the think we're closer but

I incredibly but the point, And not us two as done the say strong stronger of or really impact of us to I see taking good in we've seen up even and as simply half a So comps profitability on business half this this that, seen program we've job market. the more at anything back for the we this this offset launches in business that back do slow think the team the continues two, some – of has very One reallocating, that place take volume the see are being out would don't we good easier. I of EBIT here the the difficult will And the that as environment on from a optimistic program factors. in said, be for of very, traditional anticipate bit back growth also standpoint. year. a from chunk based huge. new of an half decline the overly the we cost

have helps? So – a that outlook. and you then Hope positive very

Budd Bugatch

talk didn't you thing were One wins. about project

decreased You talk about little year? that. normally they Have a bit this

Mitch Dolloff

the comparison awards are the the – project The for year. as the meaningful typically hard. launch year-over-year we've won back basis. on really program There's year that heavy lumpy. of a last But about not years. over it's a and But half No. – of weighted years before, next They're million over couple we've $XXX in new very last the said six awards for will

the have visibility for don't that a really expect to we change. So long-term and good we

Karl Glassman

our for year a was win team. XXXX record And

Mitch Dolloff

Well, a for we've had been quite consecutive record while win that's years around.

So…

Karl Glassman

Yeah.

just… up stacking on keep they Sorry

Budd Bugatch

Thank you.

Operator

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

Keith Hughes

couple Thank A questions. you. of

I'm confused Automotive. a little still in First,

you in So assuming year-over-year? saying? what your that you're you're bit little of guidance a XXXX in the second up are Is half

Mitch Dolloff

second up somewhat half year-over-year. in Yes, the Keith. We're

Keith Hughes

Okay.

picture… the just bigger So

Mitch Dolloff

down. the market slightly up For end the being year, slightly up full with we

Keith Hughes

Okay.

So first be – out? about year you in X% work getting half. you how X% the were How a for the seems like are you to bit would down down that little does

Mitch Dolloff

You're in X% right half. we're that the about down first

be that X% We be for full than up more expect to up and year. about the

Keith Hughes

to high to have the up be half digits would second mean correct? in year you'd that mid So of single

Mitch Dolloff

correct. That's

Keith Hughes

Okay.

Karl Glassman

costs are up… the Remember

Mitch Dolloff

as cost the into Remember comes play Yeah. well.

are well. in the more the in second that but half. both I easier the first up half we factor the explain that's So comps, have But didn't very you than

Keith Hughes

back So, basis XXX XXX back is that gets that to right, basis global this build, regularly -- you to above the math? points, points

Mitch Dolloff

Exactly. Yeah, that's right.

Keith Hughes

first spread first second So, it -- and for of what's your really XXXX? of into there’s that I the reaccelerate probability really half what's assuming the -- What period XXXX of in way And half of time? guess XXXX, down. half to back come causing happened during

Mitch Dolloff

-- of it's an on market, had the WLTP emissions phenomenon. not tough parts that Brexit on of the in different and in so right, standards put it's to which it, impact lot really but particular a overall that a I Europe, going of impact programs, certain had think cause disproportionate you finger things impacts -- kind impact you market disruption on

Then you had impact decline dispute significant trade China the and there.

standards You emission had slowed that of there this has recent acceleration really sales.

then the concerns impact, You the tariff and North America. in just had

guide we're as So, a just well. work picked sort long-term of basis, compare very quarter-to-quarter big sort we post. a picture to a on this way metric detailed in doesn't it of And -- inherently

We unit And lag not sales in were inherently vehicles the a our comparing dollars, our market or not supply units. to unit time our chain. dollars, there's of production

the comparison, long-term just is our So, and growth expectation the we meant is the size and it we participate market, the this but where look market we the growth an at hey, rates rates it's the say, within are have to inherently really win of that and imperfect business. where in about that for we

Keith Hughes

your new to that pick normal? a kind -- already points -- you've cause that it of X,XXX? Is points and haven't XXX, there is while above. the something would reaccelerate back you in basis that to Or really basis you that something X,XXX the been And used, XXX Okay. well, you as -- a like

Mitch Dolloff

a market like the little worse. I'd to normal market, right? bit the hard It's it's month getting been know is what doing see new a been in every when to

I'd basis I So, about be think points it. realistic say, stand our we're X,XXX behind target, but still we'll

it, be you. by So, if a of the come get need stand adjust stability we'll period for it. ones we in to to and to now, But we first to back

Keith Hughes

of maths a me you of to some going couple what There out rolled a then of switching adjustables were Adjustable the points Okay. was And the quarter. on adjustables. sort Can in feel so. that industry or market? numbers think you finally in week a is up give

Mitch Dolloff

a Keith. Yeah. good question, That's

we basis, -- based industry think numbers think a on about think basis, numbers. XX% I I are that the quarter down the think calendar industry about industry know that down a the on lot in was that's the than calendar remember year-over-year, a industry X% was lagged. we numbers I But and less first QX.

think industry things that a we time. of on high to We I going quarter that I for that. the really think numbers back think were a they the if there's And are million really, period look seems couple for which at something units, at XXXX, of of second that impact like

think to comparison the a year-over-year large degree. So that's I throwing off probably

don't mean They critical, There's be codes. is to multiple around. difficult. easy And data the I isn't task. get I import shifted say Tracking this an HTS

anything -- negative reporting. like certainly don't So haven't believe we industry I the impact is we -- seen

-- think there. So, we we data a there's just problem

Keith Hughes

Okay. right. Thank you. All

Mitch Dolloff

Thanks, Keith.

Operator

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

John Baugh

hear experiment. on congrats Susan good voice. the your Perry, And to morning. Good

Susan McCoy

you. Thank

Perry Davis

Thanks.

John Baugh

the know I'm more terms And your I cost of I on really goods of timing deflation, the in is the of be words, simple, neutral. you don't impacting question of the earnings, the particularly what sold, might these those other some work shortfall it's items. the which was wondering, but thinking of revenue items? affected deflating through in all

obviously, as being curious impact -- could I But out ECS being to would earnings. be soft guess and I'm soft if great. would parse that you So auto that

Susan McCoy

pricing Yes. lags materials direction. up, there. or so the caught work much. squeeze going it often typically of lag, not And There's going in more -- raw can a prices and down, directions coming Deflation, the costs opposite a with a bit our both with typically,

in would the quarter. in at big first we a have this would been estimate. uptick benefit obviously, recognizing took where time we have year seen full earlier, quarter LIFO our swing our first Its You a versus actually

built our helped full year it's earnings So now and into the that too. forecast

operations not on this it's positive Now have offsetting deflation within a a that LIFO far the for standing us volume, been so unique net so to there -- its dynamics that's has obviously, out going year. own. And creature is It's for happening the not.

Karl Glassman

positive it's much our the see But a impacted so been -- on cost has as and the But a the business, structure a healthier job bottom a restructuring that's business future for priced walking to good from restructuring being is it's a really impact the Home away business. line and low-margin forecast and recent has team much on good unacceptable than forward, task. working perspective been team a that that has Furniture well kind of thankless positively going past. healthier in is from really it the thing, done

John Baugh

But short-term? assume on volume that's And your you apologize addressed a if of a be or dynamics not relevant about business walk little what deflation, something. some this. -- Did there then to you've minutes couple slide, there Could specific the was you something of program on more referencing you the join was and that shortfall bit ECS, through see delays late, expectation. there to

Perry Davis

Yes, John.

that forecast have top have either going of heavily more altogether. line -- delayed deflation effects couple of weighted we kind experienced a of seen also we programs in canceled going we'll forward. or those QX, that forward, So And see our a have definitely we've been reset

about customers, As around those you and and don't of of talk also. some there's shifts a there's takes in but been that of us, some puts business and know, the marketplace we impact specifically of lot

marketplace. in some have seen ECS of growth we've non-bedding we related one unforeseen a not the that some furniture, the would business of where little the we that's part that weakness earlier experienced and is, expected bit the in things was to then, that but And automotive, have primarily furniture

making moved also, mattresses. the growth that The digits then, case half been finished the back plus that business in the expect portion actually double and busy we're has is there's We've -- quite to a year. we some that we're and demand expected capacity both production And in be to foam hybrid compressed of a have can of and we facility half that the seeing of Spring and strength into continued demand the mattresses. we make side, where hybrids U.S. going in over where back

John Baugh

if or -- to up, follow their wanted of ones customer common either found there just -- programs, particularly maybe you was price, canceled delayed a is they you didn't that Perry, were on business diversify the were a those some the were or get to theme? there -- expected common get, that some some lower supply, you

Perry Davis

I'd is there's on guess, be that, where a side, component ECS what expectation side. John, on we up feel that the I there'll lowered pick the like balancing a say,

look a I so So though, business get elsewhere -- continue it primarily Spring mattress it and pick the shifts think comes that healthy if really to we of the cadence on up as like will finished back shift on-balance, obviously, through at finished And quicker. the said, it's a product quite it side, half We I some situation. ECS. in

John Baugh

luck. Thanks. Good

Operator

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

Bobby Friedner

actually everyone. Peter. It's Hey, Bobby Friedner good for on morning

LIFO first Just standpoint benefit you and QX there benefit LIFO benefit, nice Thanks. what's steel from talk looks a a was the Can to few for for quarters. wanted inflation baked on QX? into guidance QX in in follow-up a now time like

Susan McCoy

would $XX.X so half Peter is year and progresses that up, double that equal We'll book and at yet now amount about portions $XX look haven't can of million the the whatever Yes. in $XX.X million, full quarters. it an we expect estimate go full year booked we our as could will down, change, to go assume our at have remaining year estimate. likely could to million, booked, continue we you

Karl Glassman

activity. as important earlier a accounting not said to that is LIFO And remember it's Bobby that discrete Susan

a So, there in FIFO related the is operations. impact

in not quarter, matches not it's because FIFO the time a on LIFO gift Over correlated perfectly from FIFO side. but it's each is So, time, there's a over offset. heaven up like

challenge to So, were year-on-year because it -- environment. steel gets to we comparisons in and XXXX get XXXX, be increasing a an be in

opposite to But flipped environment, on Now, the -- the related then time. impact we a that true on FIFO impact has it impact makes decreasing any up LIFO over so sense. opposite and they if steel

Bobby Friedner

I from year? it. to just I QX. for How if nicely the about color. in exited from be the the down on impact EBIT your furniture we business. sales of can margins the the the noticed should on in swung QX Thanks up Got for half overall impact back of both and exited And more one thinking businesses

Mitch Dolloff

is Mitch. this Bobby,

impact back I the perspective maybe think in pretty perspective. and from probably I we a see bit pretty improvement similar the similar of from half year margin a little think sales a of

the executing cost has the of parts. a mentioned, Karl As team done and moving job through overhead great both out big taking planning and that and plan

fashion little a the of portion inventory wind that It's there. a us. have tricky behind as are moved down good elements bed, we through we've riskiest the very So, we

as a home and on expect from But So, compare bit -- lower that the home the of I we'll the half. definitely sales we side half half first furniture furniture that year. see second see back in the less we'll decline

So, half. similar first in probably we've seen I pretty think the to what

Bobby Friedner

Thanks right. a and All guys good lot luck.

Karl Glassman

Thank you.

Operator

question comes the Our from of next line Please Hardt. with your question. Hardt Monness with proceed Herbert Crespi

Herbert Hardt

morning. Good

Karl Glassman

morning, Herb. Good

Herbert Hardt

XX% Boeing I is up your of is One this given Aerospace having, problems -- noticed was the quarter, those any given I that you but actually with involved programs? are two questions. all

Mitch Dolloff

does but We not Mitch. huge This on impact involvement us. it have there, do is have Herb. morning, Good

production of yet. we so chain seen was haven't As to you XX anyway, mentioned, per down month from reduction Boeing's rate really struggling keep XX%. the that The about up rate reduced with supply to about XX, so the production impact

continues who this to right continues early a XXXX at will knows resume than now, expectation point, on to this drag in stretch It people the late but or right? If XXXX, deliveries bit. longer expect,

So, about so month us about million $X be or per we platform, would million to sell $X on so annually. reduction that the XX%

the impact good a huge content we alternatives. have and on not Airbus So,

there. performance that's part So, good driving good the of what's

Herbert Hardt

other drift. and you. year, well retail erosion? room into My you we up industrial let's question do Thank been assume doesn't margin's tends you've as to go hold for next that, have as much is, expecting as How

squeezing good continues there the Is cost to a really over months of the kind You're at XX out. next if lot say left drift? world

Karl Glassman

compliment. that answer. the appreciate I And the actually is Herb,

good in a teams lot XXXX, are environment. really Unfortunately, in XXXX. a downshift learned we Our

in healthier was lot place portfolio, And all is a our and now the today restructuring and it that's real XXXX difference business, than the our taking between of XXXX parts is then.

perspective We product long-term we from So, efficiency can reasons. CapEx a absolutely -- cost development, take for compromise won't out.

one of is wonderful out. very perspective. cost manage the opportunity that's about take additional there's a from Leggett So to an things yes, But long-term we

The downshift other historically there in a generation. cash significant happens improvement is been thing in that has

doesn't cash actually in become So, helps. it compromised, it

So, downshift important solid. us dividend forward. to very It's is going in absolutely a

So, yeah, Mitch, Automotive skills. good relearn want don't those skills, to I we to. think that's we point. a those how learn But know

Mitch Dolloff

Yeah. XXXX What -- left we has XXXX, impact never of the our mind.

mind. we've as with we've capacity in in the so, And Asia, that new the downturn particularly grown plants that and business, done adding

centers where support to And our so to regional them of smaller, purposely not can. to lot we have we from to customers them be sized close some overheads be a

do to action So, if that. we we'll need there, take

Matt Flanigan

just to amplify Herb, I'll said. And add Karl this what Matt. is

our XQ the You had heard best that, performance had, XQ mentioned best us XXXX. ever in within in may experienced, the was ever their flow cash performance just we've was remarks million we prepared have $X we operating

our a ability And absolutely home would in again notable phenomenon. when soft to bring things and unwind we that of because that do cash it's get And way.

Herbert Hardt

much. Thank Okay. very you

Mitch Dolloff

Herb. Thanks,

Operator

closing to no time. turn are at like Wendy for comments. I would further questions There to back the floor over And this Watson

Wendy Watson

everybody. next quarter. you you we'll Thank to talk And again

Leggett & Platt (LEG) 30 Jul 192019 Q2 Earnings call transcript