Leggett & Platt Reports 1Q 2025 Results

1Q sales of $1.0 billion, a 7% decrease vs 1Q24

1Q EPS of $.22, 1Q adjusted¹ EPS of $.24, a $.01 increase vs adjusted¹ 1Q24 EPS

1Q operating cash flow of $7 million, a $13 million increase vs 1Q24

2025 guidance sales and adjusted EPS unchanged: sales of $4.0–$4.3 billion, EPS of $.85–$1.26; adjusted EPS of $1.00–$1.20

President and CEO Karl Glassman commented, “We are pleased to report better than anticipated first quarter earnings. Our earnings improvement is a testament to the excellent execution of our restructuring plan and operational efficiency improvement initiatives, as well as disciplined cost management. As we navigate the complex and fluid tariff environment, we are mitigating impacts while pursuing any opportunities to capture increased demand for domestically produced products. While we expect that tariffs overall may be a net positive for our business, we are concerned about potential negative effects on inflation, consumer confidence, and discretionary demand.

“Now more than ever, we are committed to our strategic priorities of strengthening our balance sheet, improving profitability and operational efficiency, and positioning the company for long-term growth. Our restructuring plan continues to make progress, and in early March we divested a small U.S. machinery business. As part of our ongoing strategic portfolio review, we recently signed an agreement to sell our Aerospace business, which we expect to close this year.

“Given our conservative outlook due to macroeconomic uncertainties as we entered the year and despite the current trade policy uncertainties, we are maintaining our sales and adjusted EPS guidance for 2025. Although the domestic bedding industry is now expected to be more challenged than previously anticipated, the resulting lower volume will likely be offset primarily by steel-related tariff benefits. Our business is resilient, and with the support of our dedicated employees, we remain confident in our ability to successfully execute our strategic priorities and deliver long-term shareholder value.”

First Quarter Results

First quarter sales were $1.0 billion, a 7%² decrease versus first quarter 2024

• Organic sales³ were down 7%
  • Volume was down 5%, primarily from continued weak demand in residential end markets, soft demand in Automotive and Hydraulic Cylinders, the expected exit of a customer in Specialty Foam, and restructuring-related sales attrition. These declines were partially offset by higher trade rod and wire sales and growth in Textiles and Aerospace.
  • Raw material-related selling price decreases reduced sales 1%
  • Currency impact reduced sales 1%

First quarter EBIT was $63 million, flat to first quarter 2024 EBIT. Adjusted¹ EBIT was $67 million, a $3 million increase from first quarter 2024 adjusted¹ EBIT.

• 1Q 2025 adjustments include: $7 million of restructuring charges and a $3 million gain from the sale of real estate
• 1Q 2024 adjustments include: $11 million of restructuring charges, an $8 million gain from the sale of real estate, and a $2 million gain on net insurance proceeds from tornado damage
• Adjusted¹ EBIT increased primarily from restructuring benefit, operational efficiency improvements, and disciplined cost management partially offset by lower volume and metal margin compression.

EBIT margin was 6.2%, up from 5.7% in the first quarter of 2024, and adjusted¹ EBIT margin was 6.5%, up from 5.8%.

First quarter EPS was $.22, a $.01 decrease versus first quarter 2024 EPS of $.23. First quarter adjusted¹ EPS was $.24, up $.01 versus first quarter 2024 adjusted¹ EPS of $.23.

Debt, Cash Flow, and Liquidity

• Net Debt¹ was 3.77x trailing 12-month adjusted EBITDA¹
• Debt at March 31
  • Total debt of $1.9 billion, including $440 million of commercial paper outstanding
• Operating cash flow was $7 million in the first quarter, an increase of $13 million versus first quarter 2024, primarily driven by a smaller use of working capital
• Capital expenditures were $13 million
• Dividends were $7 million
  • In February, Leggett & Platt’s Board of Directors declared a first quarter dividend of $.05 per share, a decrease of $.41 per share versus last year’s first quarter dividend
• Total liquidity was $817 million at March 31
  • $413 million cash on hand
  • $404 million in capacity remaining under revolving credit facility

Restructuring Plan Update

• Restructuring plan estimates unchanged
• Annualized EBIT benefit of $60–$70 million expected to be realized after initiatives are fully implemented
  • Realized $14 million of incremental⁴ EBIT benefit in first quarter 2025
  • Expect approximately $35–$40 million of incremental⁴ EBIT benefit to be realized in 2025 and approximately $5–$10 million of incremental⁴ EBIT benefit in 2026
• Anticipate approximately $80 million of annual sales attrition after initiatives are fully implemented
  • Realized $14 million of sales attrition in first quarter 2025, including $3 million from the divestiture of a small U.S. machinery business in our Bedding Products segment
  • Expect approximately $45 million of incremental⁴ sales attrition in 2025 and approximately $20 million of incremental⁴ sales attrition in 2026
• Also expect to receive $60–$80 million of cash from the sale of real estate associated with the plan
  • Of the remaining $40–$60 million of cash proceeds, anticipate $15–$40 million in 2025 with the balance in 2026 due to timing of listing properties
• Expect restructuring and restructuring-related costs from inception of $80–$90 million
  • Anticipate cash restructuring and restructuring-related costs of $45–$50 million
  • Expect non-cash restructuring and restructuring-related costs to be $35–$40 million

2025 Guidance

• Sales and adjusted EPS is unchanged and contemplates owning Aerospace for the full year
• Sales are expected to be $4.0–$4.3 billion, down 2% to 9% versus 2024
  • Volume is now expected to be down low to high-single digits (versus prior guidance of down low to mid-single digits)
  • Volume at the midpoint:
    • Down low double digits in Bedding Products segment
    • Down mid-single digits in Specialized Products segment
    • Down low single digits in Furniture, Flooring & Textile Products segment
  • Raw material-related price increases, net of currency impact, is expected to be flat to a low single digit increase to sales (versus prior guidance of a low single digit reduction to sales)
• EPS is expected to be $0.85–$1.26
  • Earnings expectations include:
    • $.16 to $.22 per share impact from restructuring costs
    • $.07 to $.22 per share gain from sales of real estate, consisting of real estate exited from restructuring initiatives and idle real estate
• Adjusted EPS is expected to be $1.00–$1.20
  • At the midpoint, increase versus 2024 due primarily to restructuring benefit, operational efficiency improvements, and metal margin expansion, partially offset by lower volume
• Based on this framework, 2025 EBIT margin is expected to be 5.8%–7.1%; adjusted EBIT margin is expected to be 6.4%–6.8%
• Additional expectations:
  • Depreciation and amortization $135 million
  • Net interest expense $70 million
  • Effective tax rate 25%
  • Fully diluted shares 139 million
  • Operating cash flow $275–$325 million
  • Capital expenditures $100 million
  • Minimal acquisitions and share repurchases
    • Following the anticipated divestiture of Aerospace and deleveraging later this year, we may adjust our near-term capital allocation priorities, including share repurchases, particularly if our share price remains depressed

Segment Results

First Quarter 2025 (versus 1Q 2024)

Bedding Products

• Trade sales decreased 13%
  • Volume decreased 10%, primarily due to demand softness in U.S. and European bedding markets, the expected exit of a customer in Specialty Foam, and restructuring-related sales attrition, partially offset by higher trade rod and wire sales
  • Raw material-related selling price decreases and currency impact reduced sales 2%
  • Divestiture of a small U.S. machinery business, as part of our restructuring plan, reduced sales 1%
• EBIT decreased $6 million and adjusted¹ EBIT decreased $4 million,
  • 1Q 2025 adjustment includes: $3 million of restructuring charges
  • 1Q 2024 adjustments include: $9 million of restructuring charges and an $8 million gain from the sale of real estate
• Adjusted¹ EBIT decreased primarily from lower volume and metal margin compression, partially offset by restructuring benefit

Specialized Products

• Trade sales decreased 5%
  • Volume decreased 4% from declines in Automotive and Hydraulic Cylinders, partially offset by growth in Aerospace
  • Raw material-related selling price increases added 1% to sales
  • Currency impact reduced sales 2%
• EBIT increased $5 million, primarily from disciplined cost management, operational efficiency improvements, and restructuring benefit partially offset by $3 million of restructuring charges and lower volume
• Adjusted¹ EBIT increased $8 million, primarily from disciplined cost management, operational efficiency improvements, and restructuring benefit partially offset by lower volume

Furniture, Flooring & Textile Products

• Trade sales decreased 1%
  • Volume increased 2%, from growth in Textiles partially offset by continued weak demand in residential end markets
  • Raw material-related selling price decreases reduced sales 2%
  • Currency impact reduced sales 1%
• EBIT increased $1 million and adjusted¹ EBIT decreased $1 million
  • 1Q 2025 adjustment includes: a $3 million gain on the sale of real estate
  • 1Q 2024 adjustments include: $2 million of restructuring charges and a $2 million gain on net insurance proceeds from tornado damage
• Adjusted¹ EBIT decreased primarily from raw material-related pricing adjustments partially offset by higher volume

For the full first quarter results, 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 many homes and automobiles. The 142-year-old Company is a leading supplier of bedding components and private label finished goods; automotive seat comfort and convenience systems; home and work furniture components; geo components; flooring underlayment; hydraulic cylinders for material handling and heavy construction applications; and aerospace tubing and fabricated assemblies.

Contact:

Cassie J. Branscum – Vice President, Investor Relations – (417) 358-8131 – invest@leggett.com

Source: Leggett & Platt, Incorporated