LEG - Earnings call transcript Q4 2021 | Leggett & Platt, Incorporated

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Operator

Greetings, and welcome to the Leggett & Platt 4Q 2021 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. President Relations. Vice Senior McCoy, of Investor Susan Thank you. Ms. you begin. may McCoy

Susan McCoy

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

risks update results undertakes and expectations, as may uncertainties, Senior the supplement and This Flooring you posted may portion outlook company these call Vice results President Platt objectives, the a materially no the President Jeff on copyrighted the of or discuss COO; information agenda trends. President President or remarks discuss is made material. strategies, Senior set a XXXX. is Director is that website & including revise summary of portion with press slides will President Mitch information group Vice from Products today for we Actual contain or website. statements. conference and Cassie number operating the Products permission. main A obligation and CFO; call to questions our future Tate, morning in Bedding forward-looking financial follows. of IR a for we and Leggett our segment; demand differ and along is will to not Specialized reconciliations. this replay call, available events, recorded this Furniture, Hagale, be and events statements. details. And IR you being Leggett's to release Mitch the Executive and of cover due will of Executive broadcast of Vice to Textile the with points and The Products documents the constitute without We have. that transcribed, any On need and call Henderson, Steve and for This Branscum, results express or answer summary financial start yesterday's yesterday's and non-GAAP the call Those and of details segment; are recorded that President today concerning release press address IR. of the I Jeff PowerPoint our remind Dolloff, Tyson segment and trends

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

Mitch Dolloff

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

for automotive challenging our commitment and in Manager, Hagale, who to EPS. employees. participant our and Director, two will and XXXX, want Human joining their inclusive been our I to shareholders. achievements Equity President XXth would business, First, our added our In Products Tyson segment We Sustainability served of the created Officer, sustainability including another We XX value increased roles I'd on and Bedding and and regular promoted report. for is dedicated workplace previously company innovative increasing demonstrating long-tenured Tyson Diversity tremendous Chief our ESG. and Inclusion our ensuring lead newly Bedding driving are Resources to today of several year. Products furniture for Tyson consecutive employees responsibility bedding, thank our We and XX,XXX Leggett calls. Sonia be us not record corporate safe a Tyson these creating like all possible in years year. for sales to first areas. and products & over Platt contributions milestones. attained lead first in Q&A a various issued be Smith employees our customers our in without Those to And dividend segment. our We achieved positions to development sustainable for outstanding our the has welcome inaugural our Hagale participate with first to our

pass-through record XXXX sales operations fourth commitment grew reported of in of collaboration, Yesterday, fourth success. XXXX, and offset of XX%. $X.XX. were we drive XX% significant of inflation increased of EPS increased and agility, the pre-pandemic to continuing dedication per and volume and quarter EBITDA businesses. results in up trade values adjusted reflect Sales comparing several of the from to our the lower in by quarter $XXX partially $X.XX versus share million XXXX our our adjusted When quarterly earnings XX% quarter Your sales of billion XX%, EBIT

mill year XX%. increased combination XXXX, And full discipline. EPS increased volume expanded and X% year and EPS XX% sales the adjusted material-related $X.XX. pre-pandemic comparing benefits. EPS increases, from in EBITDA metal and pandemic-related of $X.XX recovery currency declines of X%, increased adjusted EBIT and For XXXX sales a price Full to was XXXX increased in volume $X.XX increased margins primarily increase a gains rod raw EPS from XX% our XX% EBIT of When billion to XX% grew the XXXX, trade from pricing was sales adjusted adjusted $X.XX. versus results adjusted

navigate and negatively by to the of policy, pandemic. monetary we tighter in market likely chain challenges expect to a stabilize and growth impacted to continues macro our XXXX businesses supply we conditions improvements shift While a continue as see including number most constraints, in inflation

due the US chemical impacted periods chemicals market automotive the due XXXX. operations in later cylinders. fourth transportation offset fabrics. year margins quarter. the year December. and Despite EBITDA improved EBITDA November, quarter XXXX quarter lower in price volume by US labor XXXX expanded automotive reasonable partially volume in in down in the aerospace XX% lower Sales up the our early and selling cost Bedding recent on chemicals used XXXX months, and challenges in Supply we segment in still offset XX% up steel, by Products margins labor lower year material-related hydraulic the demand, improved the aerospace. quarter in Specialized fourth our margins non-woven and segment softening October in was in growth but and fourth softness the growth of volume one from and over European over with investments X% Rod due in specialty our demand from levels were of the were developed was Products were increases to our fourth market foam in quarter partially automotive which production In and primarily and cylinders in expect Adjusted from the volume, down availability negatively versus versus from inflation Moving XXXX lower quarter and raw in in quarter the fourth maintain Volume down XXXX periods. Sales two quarter in one our fixed to to were our taken both segment primarily costs. segments. business actions year of metal versus in to XXXX primarily Steel two hydraulic in down and from in primarily to fourth and in XXXX. from Sales business higher X% and

improved at sequentially third the fourth vehicle the negatively from remains industry strong levels. quarter, demand vehicle low impacted shortages semiconductor quarter. inventory production and remains record While production Consumer levels in

Industry recovery to production for see products forecasts in aerospace and fourth tube for As stabilize pre-pandemic levels improving fabricated the XXXX. and second see assemblies should of business in our half the to supply we In through began demand industry welded be debt demand to XXXX. continue indicate seamless begin recovery the continuing at chains quarter.

to We in XXXX. recovery see expect continued

to travel, However -- cylinders anticipated hydraulic industry XXXX. pandemic-related demand sorry not in the of supply air is disruption order high. industry market chain in XXXX from strong with the aircraft return to in impact lingering the demand resulting and until XXXX and levels backlogs the is buildup remain inventories End

hampered chain supply of OEM ramp-up global labor the our to production. availability customers However, constraints ability and has

in volume our cost quarter expect XXXX, from margins EBITDA last Sales price taken partially Converting. one by price Products in Components raw up by period increases declined volume and fourth XXXX, versus partially as increases. in Flooring primarily Flooring our and segment material-related fourth primarily Textile year Sales Flooring increase segment from volume sales partially to offset We offset products. primarily year versus and up fixed material-related Fabric by volume Furniture, and offset growth were Furniture, products quarter XX% raw Geo lower Work Furniture selling year. & selling the in two from were in Home XX% actions over in production lower the recovery OEM volume increases lower and

as We continued XXXX, expect strength in Home business customer Furniture in backlogs elevated. our remained

market. Chinese to residential pre-pandemic So far slowed, Furniture in use avoid the levels Chinese the sold early are quarantines. Year most products and for has longer New with and to holidays anticipated manufacturers contract steady Work recovered year demand for demand sales this COVID-related taking improving as market

and businesses strong returned as one We residential products, Volume of labor transportation Flooring Fabric limited periods, two-year expect hospitality to the in segment EBITDA work continues in employees as the hybrid below due the from availability discipline. back gradually market after office. and XXXX. sales disruptions. products have half quarter remains a relatively primarily modest improve levels. to Volume level residential in over the in was return demand down and Converting while margins and pre-pandemic demand contract XXXX, remained normalized In well to experiencing Geo pandemic-related opportunities Components more strong, improved pricing the the our in remain to growth and

million reduced quarter overall, fourth the took cost the quarter XXXX. our versus XXXX approximately company For the we fixed by $XX actions cost in fourth of

XXXX, to full cost adding remains in year to approximately of long-term various controlling million future in approximately end necessary financially, on our million opportunities of and by focused support markets. our both capitalize $XX We growth maintained competitively on fixed costs actions the costs opportunities. positioned taken as only Leggett For we fixed well remain $XX the XXXX.

our XXXX in year our Jeff Our guidance enduring for details ability us discuss will financial creating give XXXX. continue for now shareholders. our fundamentals value to and confidence long-term full

Jeff Tate

cash were of rod the our until previously inventory anticipated. to previously inventory first large XXXX, XXXX. quarter mill good cash capital driven operating severe In $XXX percentage and with Bedding replacement and morning, Mitch, very main capital steel $XXX XX.X%. postpone lower the expected a market one-year than at you, impacts spring XXXX, everyone. businesses, a the strong adjusted full the from ended factors levels U.S. investments in With XXXX. leading million demand year-end These along million in year at This softening following of of rod, of annualized the quarter furnace was for the primarily Thank of operations by versus levels We sales as rebuild higher the year working generated were XXXX. our planned working to and inflationary with decrease reheat in flow our wire fourth in in XXXX, decision to depletion than we

of we addition, $XXX offshore brought back XXXX. In in million cash

inflationary significant to year's from approximately as of million work our we levels. right-size expect We and operations past are to cash not inventory in impacts anticipated $XXX XXXX, this recur

declared year fourth Our X.X% a of last return paying long-term closing controlling priorities annual in $XXX We quarter the future, cash. organic ongoing available higher include, value Friday's of for balance honoring an dividend. is our At in to dividends, of raised price priority, for million, repurchases XXXX share commitment strategic use quarter yield spending. shareholders. $X.XX, to November, our XXth unchanged. year's while investing and They of funding growth, Directors the order with cash our were fourth for consecutive $XX.XX. Board of $X.XX dividend dividend, a dividend $X.XX than capital acquisitions our based In in expenditures the upon XXXX, our indicated reflecting Total the funding of are annual

commitment supplier a In leading quarter, we tubing kings. work residential foam Poland now second joints and In to systems, located of of XXXX, mattresses a used From specializes a select military has in acquired specialty an referred are and And for and applications. of result space been the many companies over in local Kayfoam in perspective bit office decades, ducting a acquired strategic businesses. finally, metallic we U.K. a Aerospace finished customers flexible as and to member a acquisition commercial during this components of business in located our primarily of dividend provider in three metal and we that operation. important serving furniture we As group that Ireland. the U.K. furniture manufacturer acquired small

repay with to also million. approximately limited million We Specialty operation XXXX. divested issued and X.XX in our small XX-year share of In Consistent $XXX we outstanding proceeds were Drawn plan to November, a deleveraging some net notes with with X.X% trailing sales adjusted used of XX-month debt the EBITDA ended business in paper. commercial Wire We $XX of of repurchases annual XXXX our times. Wire

efforts a deleveraging focused making positions We and our and while near- base, and remain investment on the through capital in us along financial and generation and cash strong long-term Our when deploying gives acquisitions. capture over us manner organically disciplined flexibility both last opportunities with that reducing debt two decisions. years, to balanced capital growth

to Now expected to X% XXXX. most should to $X.X Products XXXX guidance the the negatively Acquisitions up X% sales continued from add guidance, growth in continued in the growth or increases XXXX mid-single-digit XXXX. segment in XXXX. XXXX moving are primarily is This billion in raw be the in reflects flat billion expected recovery effects were that pandemic. to to growth sales by impacted businesses XX% from $X.X implemented of Specialized to price Volume impact volume inflationary material-related over and

million, range earnings are reflects increased to of cost the absorption of modestly, and our to effective Earnings share and overhead per We volume higher per this inventory expense partially levels. to also improved XXX year margins XX%, million of to Rod we guidance midpoint in and The full shares rate operating Based in business assumes our range stabilized approximate interest metal tax Steel expand expect framework, approximately year guidance $X.XX reduced XXXX labor diluted million. $XXX adjusted and in margin and as $X. offset EBIT depreciation XXXX by to should bedding. be full of XX.X% be expected share fully amortization our conditions right-size transportation demand XX%. $XX a upon net

results. Dividends expenditures should I'll the turn those would For year of over I efforts the thank to issuances. world call XXXX million around $XXX also of million. With to this $XXX to we tremendous the closing, employees our all your for Susan. XXXX, expect share offset deliver capital comments share back approximate and past safely record full approximately to repurchases In year like

Susan McCoy

group prepared attention. Operator, That We questions. to be as thank begin Q&A we'll ready we're remarks. answer to And answers your our your session, for Mitch concludes the direct our questions. you glad will Q&A. the your

Operator

you. Thank

a question first We be the The Raymond is Instructions] conducting James. will Griffin ahead. go now Please [Operator Bobby of from question-and-answer with session. line

Bobby Griffin

CEO. listening. Good you of family as And for you want your next first for congrats and call morning taking And questions. on wish chapter is the sure just best luck Mitch, Thank to your retirement. everybody. I I'm the you my Carl, Carl in

Mitch Dolloff

very Bobby. morning, Good you Thank much.

Bobby Griffin

Absolutely.

then about question I So high-level question more I guess my first the have one quarter well. as and

volume? we're the of quarter? the on in get of it's And XQ? great can that you and a little reported that volumes fourth costs much and from itself, supply dive maybe a quarter expect challenges a the questions the few maybe how of the you guess bit kind a I Understanding, little on but Just performance were did what that, in during did market into the hard getting spring to versus share sense intersprings for then your today elaborate on businesses XQ? your chain here market's

Mitch Dolloff

an quarter, unseasonably We Yes. the fourth When the morning. for we expecting that Thanks really we this there to on that holding it the bedding out our and didn't side to happened. sure backlog that kind to was we we inventory on and as be and prove labor can make talked were call we figured important third strong in -- the Bobby. that us our on would customers support to quarter topic be how mentioned of were be

a with Certainly happy right. So that, share is out of if we and we There's have a yet. to available, perspective you're think good you. information not data lot but the pretty that not there we're

a you So I into there. dig lot don't that. there's Tyson, why know

Tyson Hagale

good Thanks morning, sure. and Yes, Bobby. Mitch

year-over-year And of [indiscernible] due of will But of even issues. that, And show And market is lower contribute through fourth that, few units being declines that number lack things to and start I'll would we that third this see that X%. X. slowdown another surprisingly of combining expectation have we'll in year with walk But don't the expectation the we when inflation our And chain that or supply see would to quarter And overall X won't look pieces. stimulus and And the some data quarter surge, be Mitch and consumer said, a to trend see quarter probably reasons probably fourth demand. in total, directional in down so. round produced continued just that, some any US year-over-year. our this between as just and try quarter. some we to started those some move in and me COVID it from at of create you like to not through a Let sentiment, another headwinds. week all almost for third we

is year-over-year But overall we do I US hard the feel to it single-digit exactly, the move good say think fourth on would the slowdown that get read I'm produced where high as fourth sure the expect So in probably a decline quarter. quarter. between we'll did occur that through imports. probably and we would we land? not But combination

is, it and greater part move second probably the overall our The that as than to our are market. I'll through sales difference decline relates

The first the market. slowed and Thinking our constraints of part the the the especially we especially some foam. And we of that really slowdown when did the the our pretty about the chemicals business, we November to of November continued improved quarter, have end chain is, the as quarter end through and the related is to of we end year. to towards started But had slowdown. some we December. through got we just as probably positions, moved as before supply believe we October consistently the our and moved as see and in being the through down constraints move we and But inventory rest within position customers

the through couple referenced the a go third I'll in that that first intersprings, But in share would seen and that. would we've this be The reasons couple of of share you range. mid-single-digit we And some declines part parts. a say for

I about good voluntarily to decline on it's that part some but dealing in shortage customers that big from coming or couple part business business nonwovens been then XXXX imports. talked we part, of of also that came been imports still overtime. feel on lower-margin impact the at we're closely make the months just our both being watching that seen that XXXX. decline add that from we've imports we've trend supply over as start And But previous But regaining of exited forced really at X/X that calls. saw of think a the to that trend just cost last A of that six about to started our XXXX, disruptions began X/X of so and beginning increase related now. from up. that end of about And labor, the the do the some really sourcing with decisions and early complexity we've of has the and of to the

specialty to move allocations decisions we as different. outsized demand the available, to XXXX make bit it it because had a with. intersprings the things some but tougher those in really some related that year had to constraints The customers of towards to intersprings and a constraints. the foam will as it's comparisons a we and little had We foam, pretty had we timing through to our it And is we had had later had the story was just that than again deal relates sourcing and date but the at XXXX. really of it chemicals strong end business As came with of chemicals business similar end that we at did

we regain but about going overall do we that as can position share, it time work that. our the to some able relates do it to good we feel being think every take So is to in

Bobby Griffin

-- just you you assume Okay. XXXX guide -- no -- the what's back my more interspring Maybe question. gain I'll just the it guidance that, or that for bedding unpack assumed back does you're is in That's helpful. referencing, save and jump bleed? But more in just one further assume and follow-up quick high-level queue or when and there's is does share that you're share the in

Tyson Hagale

At expect We -- this share and still good feel chains Things for XXXX, improve. years. strong couple demand. supply been the we overall point, the stabilizing no have about of the for business fundamentals last overall And the bleed. of further

we feel get year the generally So we will level, that as do through XXXX. pretty better reasonable things low up just at probably from move a single-digits

Mitch Dolloff

a quick. just to couple Maybe add there Yes. things of real

foam some side service remember we our On a the away as business shifted right, on as to as try bud and of is that bit, bedding we the production that, down from too, quite side. much could

side the And us. products. to of interspring on the that, on on higher-end reduction then pretty flat end, where most impactful the open on side Comfort the right volume that's we're So products lower is the Core the coil

that year flows So into all well, next right? as our for expectations

Bobby Griffin

Okay. of good. Thank Very in best queue I’ll and and turn it jump you back else. somebody to XXXX. luck over in here

Tyson Hagale

Thank Bobby. you,

Operator

Susan you. Maklari the line of is The from Please go Sachs. ahead. Thank Goldman question with next

Susan Maklari

morning, and congratulations as to let Thank just you. like on listening I'm first me everyone of you question who of bedding add Carl side My sure continuing is is said. things. Bobby well my kind the and Good Mitch,

you as to to some those you you that that that? would together? how expect over share of time. talked coming of obviously highlight regain taking on? you're that fact do And there, about the thinking to should specific regain be some look incrementally you the that to we talk efforts You've Can Anything

Mitch Dolloff

But overall. Yes. lot And to a been you but of market impact I the in the of one. versus take impact a But volatility the there. the this you let little probably our dynamics I it's think Tyson, worth see it. don't customers of into noncontract I'll here us, Certainly, just some our has with remember share the there's that that's contribution too of the bit contract some digging think, biggest -- --

Tyson Hagale

heavily in we've to things that. I be in the our it also previous sure. in mentioned big Mitch calls, to be for our talked And about to of demand Thanks, to and Mitch. Yes the been those not in the up especially but suit customers products some Core and some invested part And production. trained needs we efficient produce rebuilt bigger is our and mean of business. force have only US. more a we've of continue was Comfort of the capacity, that part of That see it. the US. our here good of domestically It's our at part a able bigger level a And labor

And so we feel like we're well positioned for that part especially.

So, work will to some time also inventory take it's been been when I all way Demand, amount a of And on mentioned, a period time, system. that of retail. It's something there's tremendous slower. some the that through dealing of inflation to in time through. to through of there's top take the it, work Like we've at being part going it. to

something that's that. to like we're have we're through, going So, positioned to to do but well work we feel

Mitch Dolloff

and when shortages back. the right, in we first, supply had nonwoven we hit demand Yes. -- I were mean, or surge

up. to struggling We shortages and we're chemical the market added so capacity labor to And that overall. keep and nobody affect expected

that And decisions had helps that. through it that some and place importing, now, to think think made it right allocation, our those early -- supply they maintaining of bit But while and difficulty I took in of taken were elsewhere our remember, very we've so, come I primarily capacity. So, to in of hit XXXX, the decisions right? because frankly our as -- especially cost so about to secure position customers of a thoughtful it's on to is the And work a inventory as well. kind time little the

Susan Maklari

Okay. market. in metal next from That's commodity year you my very past and benefited question obviously those underlying moves margins helpful this color. the And is the then

forward the And dynamic there's especially is to ahead? you into you steel things. XXXX, thinking look Anything a products, as impacting lot of as changing in year come you can broader some of been that obviously, that's of about, seeing you're we you're how this 'XX? As and year? the imports talk for movement sort Anything rolled industry, to it relates for that of those that

Mitch Dolloff

Yes. Thanks, Susan.

of I'll with we're see and spread a Tyson, more. talk let sort very you little this a any it But high position we think So, I starting year the don't decline. really at bit rapid to

dynamics are the think for probably I favorable that pretty market there us.

Tyson Hagale

Mitch. both through use things, supply really it right, Demand from of overall is we capacity was like inventory. lot That's the overall demand. XXXX. conditions just then mean, to just extremely with some just inflation products, And was moving but of as part the got And constrained, and that high, also is saw through a for the also supply I Yes. a of we existed. outages rebuild and big

even And that to early so, really into this the of continued year, year and of as holding. part we got the part late we've see

balanced. average have But said, point it actually, Mitch this we slightly to unwind. have timing So demand see And we of become predict supply the be will of actually the for at difficult in see rapid we those XXXX because some increases, on that. XXXX. than changes the it's don't as year any really full we like point, higher how more going to to at things I mean, do and that expect

Mitch Dolloff

Yes.

So color more that. a on little maybe just

We stays second the an guests pretty said, think there's it's ahead I half an over at So But estimate strong position the to estimating, average of on in the maintains a Really, it in elevated today. guess, bit of well, the state first our least just -- little year. kind half And through maybe, of some normal time. that as year. to of down XXXX. -- Hard you degree that's still of ahead of return just know. a it declines to

Susan Maklari

you. Got

or points, thinking myriad especially, furniture? across in about a question? any you're things, look you of There's and been and food, Just a higher-priced Anything some lot overall products Okay. related -- feeling of the of consumer exposed of you're side spend color your a products here, the from of all sense the more at types are one your think customers, that sneak foam kinds some continue inflation and talk any or And hearing continue higher-level to consumer you the talk across your areas in the even spend how to those just year? of to face business the things, I to things. energy, just lot to we your When and of levels your the a about on as to furniture, today of consumer, demand? they ability ability health on then, and within how mid-priced those their can bedding various general bedding, this as they're more can consumers' lower of maybe, price

Mitch Dolloff

inflation think see Yes. question. And think, probably, right? on more household that starting lower we're And that with high those that with of I think, stimulus lower it But the me side. I some some to products. think savings the faced and this to of really evaporating emerging bedding would sense to that rate, that kind particularly range side And particularly lower if logically the of see makes now mid on impact starting about levels it I impact some to I That's sense, you than ultimately emerging. wage were have seen think kind anywhere it's early bedding on, at else. makes a great We're of

yet markets. today the other our haven't Furniture, Home side, Work the seen we or On really that in Furniture

think to happens. see I we'll So continue what

policy course, to going does there's tighter see that we'll monetary to likely be and a Of forward what inflation.

certainly, any the the maybe bit I a be of part there's as means, so, first the not And go instability, there'll the a big of year. anticipating that we but consumer and first think from pullback we're quarter little by through

Susan Maklari

Yes.

luck. color, the appreciate Mitch, for Thanks And Okay. good it.

Mitch Dolloff

very you much. Thank

Operator

Thank from question The Please with you. Truist. go Keith ahead. Hughes next is

Keith Hughes

And volume -- specialized in you're volume talk shaping to about in more -- how segments half of you be that is I year you. how to Is you the on you viewing something second business half second can I improving. that it mid-single-digit want heard specifically be Thank the leader guidance do growth? about all going the more of I Specialized, to In to the weighted? talk just anticipate think, up? your growth. talk flat

Mitch Dolloff

specialized recovery Good automotive continued aerospace cylinders, a question. Yes, definitely in products. Yes. great Thanks. see the businesses morning, and That's Keith. within hydraulic we

bit about little a first. talk me Let automotive

while, the a something for down U.S., is like really XX demand consumer consumer constrained been think. the strong, is really there's days inventory that think to we in very we low, So

a all course. semiconductor just of of the it's so, shortage And result

year still rest really in this we point low recovered little improving production quarter. of of so, but it this we year, first the a pretty through do this as the quarter in tough quarter And fourth third of go we overall saw next in Probably year. as industry, bit the see the

that volume impact on of have large. the so impact margins And positive in very really that our is And automotive a on business. will

into And go I'll to So the expect expect you And over, cylinders hydraulic cylinders think you is help lift we add I see Aerospace Steve, market. to color half back on aerospace improve do strong us Steve, the and the as hydraulic year. little bit. we truck of this let in the that that in comment any I'll like. other let we backlog you'd a market very there but

Steve Henderson

push to But believe in leads the Yes. recovery. XXXX bit. consecutive record see is I said them the the seen growth. to struggling still -- of a month a OEMs would Mitch And of the But continue had later our us and demand couple their are the to for we'll certainly increase we've into say, US on from to as a sales growth XX customers backlog years. high the output little sitting

they're definitely take of bit improving. if all the longer. In able to So the new Aerospace, there, basically are demand build segments it Obviously, little once produce. will aerospace will a you is

we wins. our content nearly mainly time. Assembly finally, plus seeing supply at business point in now this is Europe, recovery starts recovery tube recovered, market are in the with And

as positive. that's we mentioned, to still. play to out XXXX going fully take through that's So But

Keith Hughes

is particularly from and be they like to that automotive Is negative today? the sounds units is better for along. out going you sit start in year goes the right? growth as my it going where specialized back division this question, get going is to again best So, And XXXX to

Mitch Dolloff

that Yes, right. Keith, I that probably think is

through the growth finally. the fighting that I opportunity was and see think now a bit starting of impacted And quarter you're year. as issues little right to through specialized, transportation in we probably the most recover think inflation the see is rest I and it the negatively expectation our it some is biggest and the volume recover, in down sequentially still we'll ticking then first

Keith Hughes

Okay. Thank you.

Mitch Dolloff

you. Thank

Operator

from with question the Keith is Thank Please you. The ahead. line next Peter Instructions] go [Operator of Sandler. Piper

Peter Keith

positioning? I'm as Thanks, to the be we Maybe that adjustments Susan, any Mitch, good going not into congratulations. to moving team just morning. company well as very but could picture, articulate And and the you Mitch Bobby there. doing strategy Hi. expect chair hope is or with big CEO

Mitch Dolloff

last did. and way that to or grateful you. with we over so worked years three Carl Good the really thank have the I'm morning, Peter

really felt this are We to also gave continued that to have he that prepared I think making manage do growth And in to market-facing infrastructure changes able rare and a to it. really focus the been opportunity we for talent properly, start viewpoint be and our I seen that in our sort planning drive insights to we're development. pretty me in into that transition. to customer that that needed than sure on investment them consumer very rather company want do underway, do? honing innovation driving to you've a the make one, now have our So already and really day I product be grateful and and I'm future. to still for and Those what really of underway global the It's around to it say but position outlook maintaining to

more addressable some us we taking the last So, expand that view opportunities. things the I and how activities our changes businesses the the think years, it's really you've growth in over already our place it's markets that several seen of gives

no So, big shift.

share dividend, growth, to excess commitment on cash on on our increasing the the and strategic acquisitions focus right Our with capital remains repurchases. same, organic allocation

accelerated I major but we any So don't progress. think, continued shift, hopefully and see

Peter Keith

summary. good didn't a thing shareholder the would total The be you That's Okay. targeted mention return. one

this So, at XX% late to out guys be you in XXXX laid to XX%.

kind So, that Jeff seems single-digit guidance bit just outlook, the could question inventory pressure. some labor regard a then looking like then secondarily EPS EPS two-part still the and TSR? transportation little there's low Maybe absorption. nuanced to margin the at calls this. It of growth. on And XXXX for with this the Is targeted a unpack that

Mitch Dolloff

Yes.

I'll when we thought But our that XXX put over of of third mean chain Let the yes XX% high-level still set all thought the and the Jeff volatility -- we have away I top me had you. out last moved some those would comments give target. the we -- there that turn us constraints around top that in to we bit around I goal had lot over from demand, haven't S&P supply and to of XX% years that's I'll inflation, S&P we've and dynamics couple certainly it have mean little impact. changed the things a of around a an target. then but

-- inflation. I think raw us the done do that. drive to material elements on pass to to to that is critical for continue We've

We some customers to be labor a importantly labor but investment will want inflation and short to in continued wage able we most be in have And service and continue markets to as that to little learned bit we we've supply. -- expect dynamic. is that our

on we'll it. we that do where so hold need to And to some investments to make

in as in on And bedding XXXX, up. after that we as primarily market course this inventory. are Of impact went we as the we costs at through the well issues transportation inflationary rebuilding inventories that the look were short year

we'll taking we As some be of year this forward look into that down.

certainly switch to we'll we it as overhead a some little recovery building impact from So, inventory taking from down have bit.

it Jeff are or my mind. ping add on? that you me let probably in I to think drivers turn over you. But Anything main up would the those me

Jeff Tate

Mitch. Thanks

we that's well. pretty at look morning sizable labor to what be in volatile as very Peter, Mitch mentioned, from I And labor I going as transportation perspective. there and around year-over-year think obviously we to covered at throughout Good be that to and were do expect we we a year. in levels. transportation the Peter. needed the costs our But guidance, look our would to and mean we you we're tough I replenish XXXX -- those as knowing intentional predict say be it inventory to assuming

intentional the our versus which our absorption existing certain we're very lower overhead increasing to inventory therefore work because out be of for will inventory to some the will obviously have level We production year, on certain that reduced ship at as levels of recovery products. we points going throughout

an on earlier. And you're impact seeing what for so guidance as our XXXX that you have mentioned in will

Peter Keith

and phrasing makes you to a where single-digit you're going Okay, betting that's don't on the question the in Certainly, the And you was used end. I automotive think year other mind I yet outlook. down think guess low into negative saying at the bedding one maybe side could stabilized helpful. sense. lot high are volume of the environment I units we're also that ask if weakness a if improvement just the on I

down up year to in bedding the with and to backdrop? first improvement frame of maybe half that expect half are normalized Do you a So, to for us your the outlook. the get going then second be units in there's kind

Mitch Dolloff

be a I see we that year the little expect the of would what to one. part first Tyson let first I ahead. I'll think we bit you during But But the take quarter, mean go Yes. softer.

Tyson Hagale

the the are see on bit And expectations the as that existed our part through -- year. mean cycle business. will is just the early the fourth that feel high track carryover softness already of that in we of Mitch. the improve third like seasonally we Yes. And I the some of more kind in things now the do getting point. year That's just we right quarter right with And from back little of stabilize we're the a normal quarter.

more And little to get so then second expect do back first you is things bit little a then but normal. we weaker, rebuild half a the can

Mitch Dolloff

this underlying still the right? mean at point I And picture big factors Yes. remain healthy

Tyson Hagale

are sleep is of part bedding focus some on buyers. right. a I There's too. mattresses and -- health good with the using that's and mean been trends and and that housing still younger big people home of Yes wellness

fundamental in the of drivers place uncertainty short-term of some despite and a like spending. feel still the some good do we are -- consumers around So, even

Peter Keith

Okay, very much. good. Thanks so

Mitch Dolloff

Peter. you, Thank

Operator

Griffin Thank the you. James. line from next go Bobby The with is ahead. question Raymond of Please

Bobby Griffin

XX% about that's just with look Hey, and level. the and and you at bit & furniture bedding something first a but today a same see When revenue do mix revenue of been Mitch. about of mix Platt, making Maybe base, four about different, years two, in question roughly revenue When to little diversify at or you up the today? do specialized business see high the changing so Peter's come the or the a you you rest. further think three, Leggett for on

Mitch Dolloff

a Yeah, question. that's Bobby interesting great and really

market grow at then I ECS with label the the it's opportunities -- industry great do goods. components the really issues. and that's for of significant sort think have private we of I the also addressable if have growth we've to have the lot And long-term that a through But and automotive. finished Europe, pandemic we had thing in look in similarly think that to be us. tailwind we in bedding opportunities really But strong of been certainly, there. course or a think that a we able in as and whether that larger to markets, those shift about Kayfoam particularly, with has really disrupted there's semiconductor business And

turned kind that able restructuring around. some of businesses growth in have if think to have of drivers. bedding from businesses and back And and up come businesses cylinders around coming today our room still still about Home think really same went back. very so not the see and hydraulic We have very strong. you continue We growing, to other but to those to the newer in our market automotive, some and then the And after we that hydraulic smaller to them aerospace. very be opportunities probably growth get cylinders through we a scale. have invest have difficult growth place came some furniture, primary also you that we'll it But we as performing those and well

business well. textiles growing as our seen You've

see right, bedding helpful mix, diversification tailwinds this year, we'll So maybe opportunities that have have specialized but the the we And for across the is in It's overall, I shift important multiple businesses. for we continue more to major normalized Bobby. we from and in I market think do I don't think us, but see should it growth see to product businesses as any the that grow.

that. maintain to look we So

Bobby Griffin

just business or starting then it And come and would team on, adding other worked acquisitions? Kayfoam of look the you with leverage as Okay. to and another adjacent some tuck-in have with is unit, the seen we've you down, as more at

Mitch Dolloff

That's Yeah. a question. great

more our dedicated I long-term, add-on our see that we the acquisitions we're to growth. capabilities. I for out would footprint think think in build that now or But

pressure will. knowing critical management us. ongoing to We're that and leverage so we fit grateful is good look the with that we'll that long and right that run, new about continue and the same opportunities portfolio that means we that And about are that away. out need as lucky go recovering our that I think portfolio opportunities feel don't I feel at also anything over are do our position we that don't thoughtful I But management be you for world stay run to And good have for fits us. us and to said. doesn't the

Bobby Griffin

you All call CEO. have taken right. Appreciate, unless ones as That’s helpful. high-levels these first very

for answering them. thanks So

Mitch Dolloff

Yeah. Thank Bobby. you,

Operator

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

Mitch Dolloff

you are Susan there?

Susan McCoy

your time. sorry appreciate Thank you joining phone for on I'm us was my today. We mute.

May on results. again you Xrd after we to first our talk report will We quarter

Operator

concludes you. teleconference. Thank today's This

lines time. participation. your disconnect Thank your may You at this you for

Leggett & Platt (LEG) 8 Feb 222021 Q4 Earnings call transcript