Leggett & Platt Reports Record 1Q Results

• Record 1Q sales¹ of $1.32 billion, a 15% increase vs 1Q21
• Record 1Q EBIT of $138 million, up $10 million vs 1Q21
• Record 1Q EPS of $.66, an increase of $.02 vs 1Q21
• 2022 guidance unchanged: sales of $5.3–$5.6 billion; EPS of $2.70–$3.00

Diversified manufacturer Leggett & Platt reported record first quarter sales¹ of $1.32 billion, a 15% increase versus first quarter last year.

• Organic sales² were up 13%
  • Volume was down 4%, primarily from demand softness in U.S. and European bedding markets, partially offset by growth in our Work Furniture, Aerospace, and Hydraulic Cylinders businesses
  • Raw material-related selling price increases added 18% to sales
  • Currency impact decreased sales 1%
• Acquisitions, net of divestitures, increased sales 2%

First quarter EBIT was $138 million, a first quarter record. EBIT was up $10 million or 8% from first quarter 2021 EBIT.

• EBIT increased primarily from metal margin expansion in our Steel Rod business and pricing discipline in the Furniture, Flooring & Textile Products segment, partially offset by lower volume primarily in the Bedding segment, higher raw material and transportation costs in Automotive generally, and production inefficiencies and related premium freight costs in a North American Automotive facility
• EBIT margin was 10.4%, down from 11.1% in the first quarter of 2021

First quarter EPS was $.66, also a first quarter record. EPS increased $.02 versus first quarter 2021 EPS, reflecting higher EBIT partially offset by higher tax rate ($.03/share) and interest expense ($.01/share).

CEO Comments

President and CEO Mitch Dolloff commented, “We delivered another quarter of record sales¹ and EPS, as well as improved cash from operations.  Our employees around the world once again successfully managed an incredibly dynamic operating environment. Our full year guidance remains unchanged as we balance strong first quarter results, which were in line with our expectations, with continuing macro market uncertainties, including supply chain constraints, inflation, tighter monetary policy, the invasion of Ukraine, and COVID lockdowns in China.

“The hard work and dedication of our employees have positioned us well, both competitively and financially, to capitalize on long-term opportunities in our various end markets. Our enduring fundamentals give us confidence in our ability to continue creating long-term value for our shareholders.”

Debt, Cash Flow, and Liquidity

• Net Debt³ was 2.32x trailing 12-month adjusted EBITDA³
• Operating cash flow was $39 million in the first quarter, an increase of $50 million versus first quarter 2021, primarily from lower working capital increases this year as we began to return to more normal levels of inventory
• Capital expenditures were $19 million
• Total liquidity was $1.5 billion

Dividend

• In February, Leggett & Platt’s Board of Directors declared a $.42 first quarter dividend, two cents higher than last year’s first quarter dividend
• At an annual indicated dividend of $1.68 per share, the yield is 4.7% based upon Friday’s closing stock price of $35.63 per share

Stock Repurchases

• Repurchased .6 million shares at an average price of $37.17
• Issued .7 million shares through employee benefit plans
• Shares outstanding at the end of the first quarter were 133.5 million

2022 Guidance

• Full year 2022 sales and EPS guidance unchanged
• Sales are expected to be $5.3–$5.6 billion, +4% to +10% versus 2021
  • Volume is expected to be roughly flat, with:
    • Flat to down mid-single digits in Bedding Products Segment
    • Up mid- to high-single digits in Specialized Products Segment
    • Roughly flat in Furniture, Flooring & Textile Products Segment
  • Raw material-related price increases expected to add sales growth
  • Small acquisitions completed in 2021, net of divestitures, expected to add 1%
• EPS is expected to be $2.70–$3.00
• Based on this framework, EBIT margin should be 10.5% to 11.0%
• Additional expectations unchanged:
  • Depreciation and amortization $200 million
  • Net interest expense $80 million
  • Effective tax rate 23%
  • Operating cash flow approximately $600 million
  • Capital expenditures $150 million
  • Dividends $230 million
  • Fully diluted shares 137 million
  • Share repurchases to offset share issuances

Segment Results – First Quarter 2022 (versus 1Q 2021)

Bedding Products –

• Trade sales increased 19%
  • Volume decreased 9%, primarily due to demand softness in U.S. and European bedding markets
  • Raw material-related selling price increases added 26%
  • Currency impact decreased sales 1%
  • Acquisitions, net of divestitures, added 3% to sales growth
    • The Kayfoam acquisition completed in June 2021 contributed 4% to sales
    • Divestitures of small operations in Drawn Wire and International Bedding decreased sales by 1%
• EBIT increased $12 million, primarily from higher metal margin, partially offset by lower volume and lower overhead absorption as production and inventory levels were adjusted to meet reduced demand

Specialized Products –

• Trade sales increased 2%
  • Volume increased 3% from sales growth in Aerospace and Hydraulic Cylinders, partially offset by slightly lower sales in Automotive due to multiple supply chain constraints impacting global automotive production
  • Raw material-related price increases in Hydraulic Cylinders added 1%
  • Currency impact decreased sales 2%
• EBIT decreased $15 million, primarily from higher raw material and transportation costs in Automotive generally, and production inefficiencies and related premium freight costs in a North American Automotive facility

Furniture, Flooring & Textile Products –

• Trade sales increased 17%
  • Volume was flat, with growth in Work Furniture offset by declines in Flooring, Textiles, and Home Furniture
  • Raw material-related selling price increases added 17%
• EBIT increased $14 million, primarily from pricing discipline

For the complete press release, click here.

About Leggett & Platt

Leggett & Platt (NYSE: LEG) is a diversified manufacturer that designs and produces a broad variety of engineered components and products that can be found in most homes and automobiles. The 138-year-old Company is comprised of 15 business units, 20,000 employee-partners, and 135 manufacturing facilities located in 17 countries. Leggett & Platt is a member of the S&P 500 and the S&P 500 Dividend Aristocrats, and is one of Fortune’s World’s Most Admired Companies.

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