LEG - Earnings call transcript Q4 2024 | Leggett & Platt, Incorporated

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Operator

Greetings, and welcome to the Leggett & Platt Fourth Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Cassie Branscum, Vice President, Investor Relations. Cassie, please go ahead.

Cassie Branscum

Good morning, and welcome to Leggett & Platt's Fourth Quarter and Full Year 2024 Earnings Call. Products call Hagale, Karl segment; Kolina into President the the Burns, CEO; Sam Talbert, on and of Tyson Flooring Relations. CFO; the Specialized Manager me of today segment; Glassman, are Ben Smith, Textile Investor With Products Furniture, and and Bedding Products

XXXX have. guidance or recorded and may results being Leggett morning and cover questions the our for additional call group will demand transcribed, Platt The Karl trends recorded and broadcast our answer as any priorities will our a without & discuss is you our The agenda This be is including update, is for highlights copyrighted our and restructuring will material. Ben conference express XXXX, operating call call not this and details follows: from XXXX, financial and for permission.

the A contain documents segment our section Relations a Those Investor supplement section replay of call, yesterday's IR restructuring we on including details set the website, slides this available press a be reconciliations. website. the non-GAAP along discuss of update. with posted financial and information, of will to on and We information our summary release that

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

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

Karl Glassman

call thank and you today. Good for joining our morning,

Specialized projects in businesses. like of Sam has specialized promoted versed to improvement products would in mid-XXXX efficiency been driving each the has Smith, in already of I is well who segment. congratulate instrumental been Sam since and President operational to Products First, these

to Furniture, I deeply of dedication as products. was Executive Flooring hard change and and his the a XXXX a on drive President to for Vice daunting announced smaller that significant Additionally, and continue improve primarily year restructuring President am we and continue macro role who furniture grateful in even Bedding a plan our company, Last of and he of actions will work environment. show textile Products our segment January, for and focused employees products. in home our in flooring with the resiliency

later advancing did expanded results Throughout administrative hydraulic We general expectations. the plan improvements job or and cylinders structure. the in exceeded an and in cost excellent plan consistently activity teams our our year, include our to met driving restructuring and the that

our range estimate million sales to within We a million. million latest benefit realized total costs in line initial $XX of million $XX $XX from initiated attrition of We our expected including G&A the $XX expectations fourth of $XX expectation $X of our well million actions EBIT to restructuring quarter below of and We we $XX our million. and of exceeded $XX had million. of million million in incurred $XX with

real initial innerspring restructuring-related Furniture closed XX by We bedding line latest We above with $X X other production but expectations, X and consolidated estimate locations. estate shifted proceeds cash to sales, Home successfully our footprint our interruptions. facilities $XX facility of to realized We our locations. reduced We million U.S. customer and with in million. of our manufacturing in

restructuring solid progress facility completed and on we X closed in initiatives X that substantially restructuring cylinders. Phase and We in hydraulic made in flooring activity of business products

X continue the foam. As completed initiatives, work of and will activity finalizing to activities expect we of Phase by primarily expected, XXXX, complete, products, throughout is but specialty flooring other X will Phase in restructuring year-end. still in restructuring continue are Innerspring restructuring all be In we through facility bedding, consolidations

cylinders, healthy extensive implemented fully a execute and required by hydraulic Despite year-end. a improvement to activities to few demand we the manufacturing challenges areas our recognize from focus businesses. pipelines remains deep be on product product sales In product a like effort last core innovation teams I'd have our across to expected complex are of and development year. and efficiency strength growth restructuring plan, outstanding

our our Core OEM we In bedding Combicore, unit saw these case Comfort launched reflecting products, provide and EcoBase including the continued pre-foam-in customers. of adoption semi-finished recently our value products, products

multiple foam We in incorporated OEMs as Innerspring and mattress innovative technologies leading with line they also specialty product partnered refreshes.

products innovation flooring see products, and Make strategy, success focused which Wish partnered Foundation and of our with product Our with launch support their the be A new these portion will to trend-setting be carpet used Home A that will XXXX. cushion on end introductions to organization sales its through branded with team sold team focuses to missions. partnership product Furniture continued the In customers. the of

business core generated and converting including in which modest business offset Components hospitality, markets. in fabric building residential growth and year-over-year, pipeline project Finally, markets, robust to partially our weakness achieved products growth filtration, our helped Geo

the home under issues sales our further as ongoing multi-decade near ahead, year pressure expect at remain existing and lows, face and affordability we Looking demand remain uncertainty about consumers to inflation.

factors have eventually recovery we by sustained been will the for which term, macro impacted recent In our these in residential to businesses, long drivers lead in these most years. multiyear believe a improvement

demand to Turning expectations. market trends and

bifurcated The sales become U.S. digits production XXXX up and imports the mattresses price mid-tier low digits opening in market last likely for imported high-volume few was with domestic single down OEMs. pressured digits. online and the in cheap mattress points dominated market low mid-single In years, traditional single domestic of has consumption increasingly have down mattress

be flat for a be midpoint domestic assumes production we segment digits as continued exit will major XXXX. is our in with specialty expected digits lapping digits foam The adjustable customer guidance in lower this the industry restructuring-related automotive of sales expect Bedding markets primarily low low down result and volume mid-single in single be volume from of year, Demand to will XXXX, global mid-single forecast pressure. market down import In to attrition at production down of a Products our the bed.

to multinational related to share America expectations in EV of continue to Delays changing combustion an uncertainty the impact to the EV at EV Volatility Europe manufacturers industry. OEM and engines market challenges transitions additional North internal programs will likely in and OEM demand. of growth layer in program Chinese

to issues. consumer guidance lower down downs trade as mix segment Specialized our year. industry by of digits demand at and midpoint softness expect Our product the expected volume Products customer be further automotive, this In we compounded is is mid-single affordability related to year-over-year

programs years below phased is levels revenue recent of from revenue older programs new awarded the annual being in Additionally, out.

XXXX. be expected demand to experience in partially our continue is to expect hydraulic at cylinders Furniture, offset and business be in Textile the but Flooring in weak guidance in and We by demand Aerospace. in will be automotive will face of segment Products soft this midpoint growth we continued anticipate Hydraulic In low residential our demand, single our down digits cylinders to businesses textiles stable. demand segments, should that headwinds continue to

to position efficiency our reduction. prioritize to pressure, another year improvement strong estate cash plan cash changes Activities sales balance the growth. debt divestitures the these to from continuing that company margin strength, sale flow continue work driving to review we and include: real profitable demand for navigate portfolio support business, we including a and any sheet operational and long-term of and accelerate of exploration aerospace using of initiatives our As

consumer Pursuing our and tariff innovation plans and needs threats. and businesses, relationships risk to product identifying solve and customer operational automation driving and mitigation to activities improvement across customer cultivating strong proactively related

significant the call to driving over turn XXXX of XXXX that to by encouraged progress confident in in beyond. I'll and made in the Ben. continue the and are are We our we ability now teams progress

Benjamin Burns

a specialty in with trade modest and improvement the demand soft demand Fourth foam exit in resulting Thank the and strength in quarter were everyone. and offset wire $X.X markets, X% demand billion, you, aerospace, quarter continued down of Karl, good residential rod automotive volume from end partially hydraulic textiles, XXXX, morning, fourth our along of and in sales and cylinders, expected versus weak declines. customer

primarily Compared sales EBIT were down $XX in was quarter our offset by and declined partially $XX Textile million Flooring and segment $XX fourth down to million, in was Furniture, specialized items, margin improvements Bedding X%. versus operational amortization products and in fourth metal XXXX, to compression, X%. smaller Fourth Products expense, EBIT Products due quarter Sales lower efficiency adjusted and benefit. other quarter volume restructuring million lower XXXX, X%, decreased sales and

EPS an adjusted EPS On $X.XX. fourth from quarter $X.XX decrease was basis, XXXX adjusted share fourth a per quarter of XX% was $X.XX. earnings quarter Fourth

automotive and raw exit half For from softening end continued cylinders the sales specialty the markets, material-related in phone primarily in selling demand year to X% $X.X XXXX price and year, demand of residential in weak customer, decreases. the expected decreased of a full the second hydraulic billion

stronger in charges. operational EBIT benefit. and trade sales These goodwill unfavorable debt improved $XXX other $XXX decreased as decreased efficiency offset restructuring pricing declines material-related expense, and impairment bad were rod items margin offset partially million primarily demand mix, in sales by from and higher volume improvements aerospace. $XX primarily $XXX amortization expense Adjusted raw million, million metal lower and from million, adjustments, to EBIT lower compression and such partially medical, by

of million, EPS by XXXX. year In decrease outstanding. debt $XXX was from XXXX, We cash $X.X as from a working of driven primarily $X.XX. million of benefit in capital. a including loss was to lower annualized less XXXX sales XX% $X.XX $XXX and $XXX was points $XXX billion, and decrease operating EPS a XXXX. versus of reduced We decrease basis paper ended adjusted earnings a of commercial million million This capital XX a of working total versus year EPS adjusted flow Full was adjusted with by $X.XX, XXXX the percentage of XX.X%, decrease

in commercial program. repaid trailing EBITDA our decreased million at X.Xx to matured XX-month year-end. November notes As that planned, debt with to Net adjusted we $XXX of paper

was revolving capacity liquidity of credit facility. cash XX, on million, total million remaining in our million under As $XXX of and comprised of $XXX hand December $XXX

In the uptick of to seasonality working year due long-term anticipate of to XXXX, investments. earlier toward leverage we but an and leverage our expect normal in in lower target continue moving earnings Xx capital

continue a lower to the our previously for potential and in to proceeds divestitures the allocated As term. Cash year a funding any deleveraging quarterly reduction full this and will sales accelerate along at debt we dividend, be efforts from used near organic estate prioritize be real dividend. reminder, will first with growth as our

and plan cash our last strategic However, significant repurchases. year. remain on of progress dividends priorities earlier, organic use our funding growth, long-term returning through cash made share Karl consistent: restructuring we and for shareholders to funding mentioned Carl acquisitions

Our follows. financial impacts as current expectations are plan for restructuring

million. $XX Total are approximately we our costs $XX expected still versus costs This from $XX prior restructuring of All $XX are incurred million to our by year, now estimate restructuring $XX range to $XX to million. estimate million expect expected million to be million $XX $XX of costs of to XXXX. end versus the of prior million to million

with of $X additional We an and expect benefit million incremental million to in of million approximately to improvements benefit EBIT XXXX. each quarter $XX million in $XX XXXX $XX

expect all Total annualized We million to million XXXX. initiatives is an now annual compared estimate restructuring attrition both to implemented G&A in are restructuring million fully related million benefit the $XX to million. once $XX and attrition incremental EBIT with benefit We $XX is in of be related anticipate and $XX benefit. related XXXX hydraulic additional to The approximately cylinders still of XXXX initiatives. in in our sales $XX million approximately million $XX to of $XX increase our sales late to prior cost in expected plane activities in

to end due between to the million proceeds million being year Total listing our properties. $XX be $XX real timing from proceeds of are the cash in sales plan we expectation Finally, with associated real generate the by in complete still to to and expected prior $XX XXXX of estate this restructuring-related the of balance million the sale expect substantially estate with of versus million. XXXX $XX

digits to and X% to are mid-single sales $X.X volume $X.X single products Volume products. down furniture, down down low and digits at be to down specialized digits low products, bedding billion We XXXX in mid-single versus in mid-single be billion is XXXX. textile X% with expected the to midpoint, down to digits flooring in expected or

restructuring $X.XX $X share gain to digits. in be improvements benefit Deflation $X.XX. to single adjusted share reflects combined and $X.XX partially to low from real per the share by $X.XX per The expected XXXX Full from midpoint share sales of restructuring $X.XX reduce sale operational estate. offset approximately increased are volume. earnings year are are be expected per costs to including lower efficiency per earnings currency and negative impact to to $X.XX expected $X.XX, to of

XXXX our in quarters. EBIT seasonality normal be year X.X%. seasonal expect to range first the with this million fourth results due from $XXX We of to upon XXXX be in typical first in with earnings to factors. Based and adjusted full the to is to expected and low X.X% expected sales our the XXXX lower margin guidance Cash operations $XXX is year point quarter million framework, representing

While not anticipate flow to sharp continue working from year, will we a do generation. benefit this capital a cash focus have on we

Our include impact. not any for does current XXXX tariff guidance net

are alternative continue are production. scenarios teams to evaluating geographic Our suppliers qualifying and potential in analyze shifts multiple tariff

and purchases furniture, this from work tariff selling products impacts products containing exposure customers direct foreign-produced foreign-produced Indirectly, components our significant tariff bed U.S. from face their significant and automotive, most or importing from most the at furniture our in time production the home adjustable China. into textiles includes Our our Mexico

back extent of to teams duration, remains the With I'll on uncertain, remarks. final the opportunities. and our call for turn Karl over that, are magnitude tariffs capitalize hard risks ensure minimize While we and to working

Karl Glassman

Thank you, Ben.

and challenges your doing to the about I that stakeholders, these to execute demand each our initiatives we drive other you expect progress you're all optimistic to external in for key initiatives. investors, am employees, anticipate day our you to we thank make we as and forward for Although our our XXXX, this customers company thank patience again, support on year

Operator, Q&A. confident actions the I begin and are that are shareholder we ready improve to taking value. profitability create will long-term we that now am

Operator

[Operator Goldman Instructions] Susan Our Maklari from Sachs. first question is coming from

Susan Maklari

In the the the the bifurcation with about bit dynamics to I you mid relative your a price U.S. higher points? want market to lower start you relative on comments, the in imports mentioned to production. more things. between bedding of talk side and betting Can end that

for as start of could mean return And the market see Leggett to what and off moving for the things trough? and that perhaps perhaps we do demand the

Karl Glassman

try being to that the imported answer don't happy to magnitude the are I community Susan, inner sold investment the the Yes. on springs that. think marketplaces. understands of that primarily

it folks. Wayfair, was XX% it call near At of those So end approaching Amazon, of the year, the units.

it's So significant.

and not price. So there's call then kind would a in the low then up this some there's a of and much it step there's end, throwaway in middle mattress,

it you perceived starts haven't of be get Queen the that to to about stop you if to would the and points then then it already Queen there. muddied But purchases. and mid price the at customers low end So to then this with end the a degree end, expand up. $XXX high low the there's gap at from about by different Tyson and They're I X $XXX

J. Hagale

the dynamic imported But especially the sure, the relates to really for not question dealt interesting an is is we've for as It's past been a level period the time if And some potential recovery. it's -- there the it in implications recoveries. you is bedding in replacement purchase, that mattresses that finished with we've a this some necessary. that deferrable about but just market, think of slowdown in

think through pressures type with while. and just me Karl level will with move some I of purchase, been inflationary distraction the probably consumers, And there's for disposable get some more towards of said, like a this other

as out. plays with But longer I of consumers for see replacement. that way it back it the a it comfort term will market we get see product more how expectation recover, interesting want be you'll buying quality the to and to into one look at So is does think cycle

optimism a higher and moving little price for towards recovery back bit So points. mid more give us

Susan Maklari

those some that? moving see there. nice driving what's in And it's on do I to color. think that's the no to great you about then deed continue we EBIT you really more for upside the the restructuring, bit good maybe on increasing see Okay. goes on period a expectations benefit could to perhaps Can to all little the through? And is, That's work going guess coming you benefits talk of

Karl Glassman

it's our Susan, restructuring stop point, were mean, to to first And The very, I've be And very it's a heavy off, I your and thank a activities good and lift. teams. to got question. and continue the a now execution more work. long have time, people our for than flawless. just been has been been terrific a sometimes at have painful, And such but it year done

our Spring be that. should assets, efficient Theoretically, think across footprint. we there's high volume shrunk the now through some is as these upside. we've XX% we more end When margins term, of have In businesses. we long of example said the U.S. run can overhead contribution XX% historically contribution on our If all manufacturing to an more

So at volume. this we're we just need point, optimistic, but

Susan Maklari

Okay.

That's look we walk the how quarter us Ben. bit one Ben, we helpful. through seasonality thinking segments for you're you about that flowing be And how your Okay. or as mentioned should a can through. then XXXX, those for about to in maybe thinking -- first you quarter, fourth margins the just commentary, about

a year. talked of to us And quarter full all you leverage through first that? about you walk bit the also relative just Can

Benjamin Burns

Sure thanks for Yes. Susan question. the and thing

First, let with for me segment. and expectations midpoints the start the margin volume for

expect despite we'd volumes being, basis for we margins to about mid-single would points. be down digits. up be XXX But expect So to that,

around expect On to we'd down be products specialized volumes mid-single side, the digits.

remain margins And single we low to points be expect side, again, that, about basis flat. the expect Furniture, And down XX and despite we'll be then and there. down to will that volumes expect digits margins Flooring Textile on would

historically. business to we've relates As a seen the seasonality our for that typical it quarters, we expect

in I QX. things would earnings. we'll some QX compared sales normal also have also seasonality, QX be earnings from say and QX to that and to a lower other and QX, may impact in So addition that we to as expect perspective

that comp got awards expect eligible. our got the number as would higher high some retirement that expense we of immediately. normal stock come one, happens, we've through. We've vest who incentive And when plans folks we are have a So

So in of the we quarter. recognize a expense level higher first

Also forward of some potential expect bad -- from possibly to tariffs. ahead and pull QX impacting see QX some into QX weather some

So all impact the all that through we bottom first of line. things in related flow, that quarter cash obviously incentive as cash have well. as that needs quarter. to relates impacts it also higher Susan, the first some then And those in payments would the cash, our to come And

And then we of sales our QX, as go expect as level little we those really XQ and inventories But bit as see I higher through mentioned we'd for before, is quarters. higher our XQ to investment a prepare higher quarters. sales in

drive So cash flow. see has also all to early year the part over here of that little high said, impact maybe you year. leverage, the an of that course of of our we then our ability in impact uptick on to a where And expect leverage the continuing but in confidence down leverage will like would have bit

Susan Maklari

the back Okay. I'll get in queue.

Operator

Next coming James. Bobby question from Raymond is Griffin from

Robert Griffin

I to the I restructuring. betting progress of guess, Karl, lot made on start want a on

by know to being kind used And make capacity of pitch standpoint cash fully that the be XX maybe I whole how we needs value works where of the with is -- the know new I in talk think locations. steel footprint of that kind So from that works. flow the you sterling and and footprint Can reduced with about Leggett a line to that facility like asset integrated.

these -- talk footprint manufacturing with new new just that. is where maybe to and journey the work we are of going that So how all about in

Karl Glassman

Tyson, the tariff if the reciprocal you you in on if of on mind, has the positive it. and on on comment Yes, sort potential it the we mill, and kind then impact negative unravel probable the And steel but mind, included steel of don't that, impact products. theoretically Tyson, that take don't

So that, mind. you unwind all if don't

J. Hagale

But There Obviously, rod we It's fixed there. in continue to conversations just mill. Sure to as lot we've more are about -- need thing. running trend the now sterling of of trade of the similar right the cost full of definitely you're as do talked expect a need in given what would we calls to our full. a moving past pieces right. nature run possible some and and future

we right that. profitable to standpoint. We've been that it really plants, strong and still you doing a as pricing innerspring have of the as for they're our we've continue well geographic But they're good larger historic focus with on relates business to job footprint, as innerspring locations we as the in and late running still from positioned that sure to now same they're still discipline can. had, make outlets mentioned, the but have a

locations. probably the wire our to is really frame. into other time remaining in a just right customers difference spot of same are on the but distribution do mills consolidating you'd good Our see in facilities, larger our And the and some distribution it service

Going other also back had to that of things Karl a referenced. couple

wire In efforts us. trade -- full. think to would than mixes XX% those and some at contribution us you running back different margin terms about spring, XX% historically. applications mentioned, that more still range But a keep like looking be restructuring Those with seen to good I of rod if mills the we've to is range for historic with

to So be just something that factor would in. also

tariff U.S., from steel conversations think and as pricing that least a far, tariff with we're positive then for seen development doesn't so it with probably applications. cover what in to But But at And closely. Sterling just the it's to the we've well. would about, certainly something it's watching impacts, downstream that apply finally,

other as could have to price on not products to do putting potentially at U.S. increasing to limited market. the more global for It's or for pressure think well. steel an you the between would like that downstream create and interesting and what pricing likely products, competitiveness probably steel just inner springs least about gap in things and So gap

be that an steel would that pricing get the is of but something it offset positivity would So any that to we closely, from mill. we watch definitely

going on So that's a there. lot lot a but -- apologize, I

Robert Griffin

contribution a helpful. margin No, just aspect. that's up follow And on the maybe

sales with trade the used rely depending maybe just we versus does to you bring the on historically right? the XX% you're business, guess is are theoretically that more and XX% than I spread between this could Rod to closer what I that scrap, guess, and If to change having what on

J. Hagale

I that and that. yes, trade the variables Bobby. into mean I higher definitely end the think the But would the would rod would Yes, range. that's some -- wire bring that there's But bring spring, down right, impact on definitely of end. closer lower

I think lots that's safe assumption. play a But at variables of there.

Robert Griffin

side. Okay. guess but for is worth I industry. with guess, a I spring the bedding And customer, then, I year can in maybe there side some -- down maybe of point the -- guys' we sales for the of Karl, domestic the think sticking or mid-single-digit there can we decline kind were your unpack mentioned so. probably XX%, volumes a restructuring you

and a just there that Leggett's whatnot? at of do what is XXXX volumes domestic you little on where of journey maybe basically and or we bit go the can manufacturing, we think will spring look can So spread delta for U.S. between unpack kind consumption the what

Karl Glassman

of a there's puts and Bobby, takes. Yes. lot

we with side. we that So some previously units flat a lost from regaining are the Innerspring share call of

anniversaried customer. of whole of until the loss billet up. first all impact foam won't the the We rod and as roll end sales you mix of wire haven't quarter. the segment that also fully happen of The the and That

up positioned the all in need teams just we gone where just that situation a confident the order efforts we're this we're is really well dressed kind of order it and I'm ready volume. volume. Any more at point. through is good some a that need We go. to have But So

J. Hagale

can a Yes. if in And for little jump on Karl, that, just bit Bobby. add to I more

about I numbers If manufacturing Comfort but spring, track But also. Core kind were the to have been. that's you continue volumes our specific talked market this has you where volume referencing looked at to before, the what and and XXXX we've think of domestic

the really that has coil we've Where kind lower the in on a to that think of and attributing -- and finished a I market earlier what with and really bite of talked end open owning develop the been for of really about lot U.S., mattress the open large lot we're mattresses that's we imported taking gap coil. the a the application of seen

part moving our kind to So of of volume of and kind versus market what it's the that moving that's category number preference is just away of a of lot import expectations. consumer then is the which and influencing showing detracts from finished mattress. away more and addressable that market grids, product kind And from an

most some the probably And a Karl dynamics coils of Comfort year. point kind well. above tracking at moving the with part, of for more but covered the grids, open at year, and continuation it then But or similar Core of kind of and of bottom reaching some this

Robert Griffin

then the it that or one is you're in the back guess customer sales business green that looks the looks that probably industry for out even And it there quarter. if a sheets And Is there the ex did I one like the to seeing fair? volume 'XX outperformed rough like if standpoint from phone, try specialty the loss? of to numbers what ISPA customer industry, using I'm just some

J. Hagale

been talked progress important for don't then our retail I there, and us it's that. it diversify really don't know -- that's helping some but offset bankruptcies. customer heavily some if Bobby, the and other we've Seeing base, shoots, to green that customer leaning we've term loss about we and probably of on

and foam selling specialty the offset of components Also well. of loss even that some some also some -- specialty been customer. are helps have us more the helping those factors as and But mix we chemicals

Robert Griffin

appreciate the time. good. I Very Okay.

has just here time segment, helpful, much one luck and best this been so spending to but for Sorry on year. all start the

Operator

Securities. Keith question Hughes from Next Truist coming is from

Unknown Analyst

your the Karl, customer I adjustable question beds, wanted there? bit. about the what delta embedding between little But a customer. Bill going the on about loss dig XXXX and the is the In Bobby's restructuring. to that's sales into. of What's something talked delta X, phone said This negative industry Large we you the guide, flat and on

Karl Glassman

There's and on somewhat we XXXX, selling actually than In end the a of is a product mix end. faster issue units dollars. negative were higher the positive at on rate promotional

anything. as much as mix it's So

Unknown Analyst

mix that continue. that going that saying? negative -- you're what think you mix So to is Is

Karl Glassman

were that demand. on the people about macroeconomic we are we Based know factors I look at, that all concerned optimistic.

be thinking in little state It's -- macroeconomic some to guidance our And don't conservative. and may so. We they're is of think not consumer, issues. a call the the was that critical related on company based a

look make affordability interest They the the sure policy. housing issues. rate leveling inflation, weakening, are that understands issues we consumer rates low want household out, around that I like government things XX-year and company reigniting confidence increasing listener not they're uncertainty to that turnover at, and

all and that we that would take perspective. make together, XXXX you XXXX significantly macro from than don't So a better anything see

good I really are control. the teams what pieces we managing think control, but we external can't doing job can of our a

Unknown Analyst

that to Well, I underperforming you're -- mean, those going saying what very guide just the betting based reasons. that's specific on for industry. be mean, you're I for

issue part of I that's mean the on going here, correct?

Karl Glassman

detailed, any? is, think you a at a at I If as we've But of look correct. it's that's spring it mix. all. a perspective, segment, industry it at Some U.S. the it when as in I But underperformed we lot from look aggregate Keith, of think then we don't Tyson,

J. Hagale

Yes.

little it walk to Keith. a bit through more, Just

offset foam definitely activity the an restructuring related what Core the market. some we've of specialty I've activity restructuring talked Comfort been cooling in products. open also just some attrition before, customer of grids, impactful, other kind from Lapping but not product some So where to with of that's to with headwinds the then so about much is the of sales our exit -- from and and the

our then our market growth. would and segment semi-finished the and between being Bedding be offset the expectations sales. also major And some product the factors But of on our by those delta

Unknown Analyst

talks up the confused for same adjustable year. being it in off fourth volume slides, the bed in quarter about being XX% XX%, on sales and the because the full still I'm

You to units. about said are referring some something What we positive there?

J. Hagale

Yes, more Keith. the calculate average units. Really just price lower a that. it's of It selling higher unit so we actual mix than way is basis

Operator

is from question Peter coming from Piper Next Sandler. Keith

Peter Keith

it optimism. your Las the you few lot furniture players felt recent to I And one good market of better you like because maybe talk industry ago. maybe A lot tone were of felt trend months. like Las a trends election, and X over the since say, about at could a hoping let's for in see Vegas bedding the was months, weeks generally was just getting sense of cautious the industry of last market Vegas at

with QX volume then kind your guiding the consistent you're in pretty in yet for same QX were And of trend and trends XXXX.

So is maybe doing on context feedback results and what the and market, put just provide into some industry your you QX that heard you what at outlook. think

Karl Glassman

you. Peter, thank Yes,

post-election aggregate, home Black at say If in we December Friday, would October strong. bedding abnormally strengthen soft. certainly residential into you November was actually the look extremely markets was moving and furniture, so and

theoretic same So alluded to potential trend you was related some that. there that do we tariffs. that forward of demand saw that and to. We don't a know pull have concern yet We

in see all there Vegas will We'll to. think I bedding be that optimistic macro Las example, promotional we're that drivers refreshes momentum was positive to spoke things together, all think those together. I concerned strong those We periods. what around There we think happens. product continue optimism I an back because that as agree. new people are Retailers about of was by But being certainly, nature.

holidays. as So significant Day, that, President's weekend of we'll anything the those troughs do don't that challenging expect happens the continue we of what between see consumer. are there but health will this example an because but And with

Peter Keith

to flat. wanted then tariffs I was wire and issue. the back enough. maybe scrap circle Okay. to Fair rod hold it's better. thinking But I with are tariff your on prices And -- that understand is to always just your this industrial And business going trying

So is wire and in prices up. will then you're rod the steady go holding stuff and buying

which shouldn't help margins. XXXX, overall EBIT in turn expand could in margin So in theory, metal your

Benjamin Burns

problem answer Yes. happened with yes. is tariffs. what X of The round economic then the and That's basic demand. became Peter, it's supply

So call of There's Europe European the then or lack on it prices, competitive. China, for lower attacks not of administration U.S. those prices products so the steel it U.S. matter. steel downstream up, demand products yield is downstream domestic go a doesn't input an steel based until

we into mills. the components steel offset the United benefit Those that and get flow the States then at

it see So inputs. work our metal not everything bedding in it will but see it related home country see furniture, across the to in you'll products, furniture, only you'll

you've downstream X/X of manage the the only got got equation. You've to or

really were not its these -- if we works. a because U.S. the placed are that's But well way only But we manufacturer, tariffs in do itself, would mill be agree. steel steel essence, The in world it's pure-play saying protectionism. we the

Peter Keith

maybe just And Okay. just to down. distill that

So tariffs. it benefit, margin a the a but could be of volume headwinds as result

it make just So simplistic. very

aware been products very issues vocal you on in. with well embedding import the about guys we issue have lastly, imports. around coming And of pretty this foam bed-in-the-box And the Okay. are --

you're big something, about missing first coil, open mattresses. like finished but innerspring talking time is Maybe feel this with headwinds the I

duties that just new a So impact dynamic innerspring on emerged of antidumping wide this have countries, a that beds? are on quarters? beds or does on or recent is any finished that has the that And the months number is foam in

J. Hagale

import. whether seen innerspring it's up the being And countries way yes, no, it dynamic. think definitely impactful no, sprouting now. on a they list new coverage But are we we most for or foam it's don't low now, we part the at Well, have it's imported countries a different import wide characterize is you. but new of the I -- Maybe an end, Peter, the and mean, finished pretty mattresses

whether so a or an innerspring mattress foam imported And mattress. it's

are the of coil end that's priced on open at products. impact the both we biggest having where They low market, extreme the and think it's basically the

open is Comfort trend. of coil long-term in which conversion to the that also So a Core,

Operator

Susan from Next question follow-up Sachs. is Maklari Goldman from a

Susan Maklari

segment and some dynamics the to in the hydraulics about talk thinking businesses? the some bit specialized. growth in auto headwinds the forecast? of I that that wanted about that relative with conversation there a Can those you differing In in just building to about be are your we shift aerospace. And comments, different more to in how you how emerging is should trends talk mentioned

Benjamin Burns

Susan. I'm was Thanks, to any Sam get going that he sure wasn't questions. worried Yes.

up. you're -- Sam So

Unknown Executive

Susan. Thanks, you, Karl. Okay. Thank

I'll off aerospace. So start with

that In Hydraulics. continue forward. problems same the we're industry going really year-over-year are there legged being anticipate we problems facing there. 'XX, the some in of Our demand were and that. to a not run dump volumes up problems and specific Their Karl mentioned that earlier really, really substantial articulated and in of in or saw demand, that's what's And up demand macro all 'XX forklift truck 'XX, happening we really problems. and cylinder Hydraulics.

was up a kind And water a a standpoint of from what us volume that set high mark for in 'XX.

So when we really couple those downstream that of customers were dropped hit much demand developed of pretty coming off. OEMs XX, years backlogs from the the gone. have And the over those

rapidly and rapidly turned to around OEMs really the around year. demand got for us the that worse throughout for turn So

Now right of our year, before the the we orders end saw stabilize.

And so still far they're this stable. year,

little time a And now feedback to demand comp the is environment We going OEMs to see the environment, think it a how it's from a you I from instead more year that really off a ended but falling year flatter rate. the of demand in bit we're lower if we up. stronger. that about And think holds at a started perspective, volume take

and are of about customer we're So the kind He talked reduction mix. skip to of I'll Chinese manufacturers facing. then And that's growth volume the automotive. EV to why the And anticipating the over continued multinationals referred Karl challenges there.

looked you. help think XX, of what market to like terms unpack will major like and I'd versus that just 'XX overall in the I production bit a that in So little

producing And all market, all Japan in and Europe, excluding that the players. because major in North major sell produced by we But Russia, cars China, are encompasses Chinese America, Russia, don't cars I mean, Korea. in that and multinationals that are

about So or X.X 'XX, versus production dropped 'XX. units million the total in major X.X% market

lot going I'm I'll at summarize you, but to numbers of throw it. So a

the another for by China's last And about production year. was by And about multinationals if the mix you about those the at by look up OEMs level million shrank and units were OEMs And X.X units were China, the we if up about X%. driven were step really what happened every Chinese And down and except region, China down million. inside at look manufacturers. EV region, XXX,XXX or down and $X step by Chinese

to million. production the So all market by that, $X.X major summarize down was

The the up million. Chinese really were manufacturers by $X.X EV driven

by And half data of that we that anticipate what and the means through units all everybody is XXXX that was follows second the strongest XXXX. So half follow. X else to in million X% we we down XXXX. in about the of world saw market we saw from that comes the shift or And what second in

our EV the with with question. JV with are have directly me content situations that in players ahead their content and the Chinese multinationals Chinese China we And been have And really this higher faced facing levels impact partners content have well new do the us. struggles answer multinationals our Yes, than with and EV is players. but their the and go let publicized and

shift had And shift is little And a market fast. the was support it, I and it's government world, really all been consumer way the impactful. kind and It rest early And mentioned Karl that's In was the part been of very of down to pronounced shift China, mentioned level. that from strong manufacturers it bit the start. ICE that of EV. stop it the from the

also OEMs led an issue, And vehicles. affordability brakes Carl of a gives market that some mentioned, to little the bit Hopefully, or little a be EV And as that's trade the of to on downs delays launches kind product there? the better program insight tap that's decontenting. as just to led continues to and you

Susan Maklari

maybe Yes. last that see No, year. just you that's this on which the potential inflation step think you that when it one more year? we is we different some about question, there incredibly this coming helpful, back have is overall could and And then trends Sam. macro into the going And and out

to ability through you businesses, about imply handle end pressure how and could their thinking markets. that willingness for price or various these that come could the this and what some consumer-focused demand even are their list your of city across across Just

Benjamin Burns

be biggest as you that our concern of what get could poor it alluded to concern relative is what health consumer, believe that we year a the the we to see We'll unfolds. Susan, worse. that's with have

sell, volume sensitive. deferrable. them of Our businesses, our that most Most are I base volume. That's concern every, call asset much the is -- very you our we that it, products hit we on need not but so mean of

demand. in them to their correlated own of are Some housing

and Consumer is is And us. inflation to So as consumer confidence reignited. have seen drop important it's rates a interest challenge. flattened confidence you've

So that a manage to everything internally. concern. just can continue We'll it's we

Susan Maklari

Yes.

speaking now I I'll with gotten there, all time, up Well, Okay. luck I that. everyone appreciate think some it wrap has that good everything.

Benjamin Burns

Thank giving for shot, everybody you. a Susan. Thanks

Operator

I'd our closing floor like comments. end question-and-answer for back session. reached any to further or turn over We've of the

Cassie Branscum

Thank you have & for joining Leggett everybody, us a great interest and in and Platt, weekend. your

Operator

and Thank webcast. you. conclude That teleconference today's does

participation line time, day. today. at your disconnect for your you a may We have You thank and this wonderful

Leggett & Platt (LEG) 14 Feb 252024 Q4 Earnings call transcript