Leggett & Platt Updates on COVID-19 Impacts, Liquidity & More

Diversified manufacturer Leggett & Platt (the “Company”) reported its first quarter 2020 results of operations, impacts from the COVID-19 pandemic on its business, and responsive actions.

CEO Comments

Chairman and CEO Karl Glassman commented, “I want to thank our employees and acknowledge their dedication and effort as we face unprecedented change from the COVID-19 pandemic.  Our first priority is the health and safety of our employees and their families, along with our customers, suppliers and the communities we serve around the world. We have taken early and decisive action to protect our employees and ensure as safe a work environment as we possibly can.

“Like so many in our community and around the world, we are facing significant business challenges as a result of the COVID-19 pandemic.  These extraordinary circumstances have forced us to make very difficult decisions as we take steps to reduce costs during this period of drastic decreases in demand. We rapidly deployed cost savings measures across the Company, significantly reducing production levels and enacting temporary layoffs. We are also aggressively reducing fixed costs and cutting capital spending.

“Our long-term fundamentals have not changed. We continue to be leaders in most of our markets, focused on innovation and working closely with our customers to provide more of what they need to be successful. Our capabilities are unmatched in our large and expanding addressable markets. The diversity of our businesses makes us stronger. We have an outstanding track record of strong cash flow and we remain committed to our long-standing transparency and financial discipline. We are focused on doing everything we can to return our employees to work.  We are confident we will emerge from this crisis in a very strong position.”

COVID-19 Response and Impact

Focus on protecting our employees:

– Crisis response team dedicated to helping our business leaders respond to workplace health and safety issues and protocols, interpret government orders and secure personal protective equipment
– Developed comprehensive plan for safe and productive long-term operation

Sales trends:

– Average weekly sales in 2019 and through first 11 weeks of 2020 ~$90 million
– Significant declines in last two weeks of Q1, with sales down ~40% of weekly average
– First three weeks of Q2, sales down ~50% vs. weekly average

Cost structure 75% variable, 25% fixed

Aligned variable cost structure to current demand levels

Fixed cost reductions, expected to drive 2020 savings of $130?$150 million:

– Eliminated non-essential expenses
– Postponed major projects
– Reduced executive officer and Board compensation

Focus on preserving capital and protecting financial well-being of company in uncertain environment

Optimizing cash flow:

– Closely monitoring accounts receivable and collections
– Controlling inventory
– Reducing capital expenditures

Liquidity and Balance Sheet

Carefully monitoring liquidity and cash position:

– $734 million of liquidity at March 31

– $506 million of cash on hand

– $228 million in capacity remaining under revolver

Debt at March 31:

– LT debt of $2.4 billion, including $422 million of commercial paper outstanding
– No significant maturities until August 2022

Commercial paper outstanding and capacity at May 1:

– $278 million of commercial paper outstanding
– Weighted average interest rate of 2.53% and weighted average maturity of ~48 days
– $372 million in capacity remaining under revolver

Currently in process with our banks to amend the covenant in our revolving credit facility

For the full first quarter results, click here.

About Leggett & Platt

At Leggett & Platt (NYSE: LEG), we create innovative products that enhance people’s lives, generate exceptional returns for our shareholders, and provide sought-after jobs in communities around the world. L&P is a 137-year-old diversified manufacturer that designs and produces engineered products found in most homes and automobiles. The Company is comprised of 15 business units and 140 manufacturing facilities located in 18 countries. Leggett & Platt is the leading U.S.-based manufacturer of: a) bedding components; b) automotive seat support and lumbar systems; c) specialty bedding foams and private-label finished mattresses; d) components for home furniture and work furniture; e) flooring underlayment; f) adjustable beds; and g) bedding industry machinery.

Contact:

Susan R. McCoy – Senior Vice President Investor Relations – invest@leggett.com – (417) 358-8131

Source: Leggett & Platt, Incorporated