CARTHAGE, Mo., October 10, 2022 /PRNewswire/ —
- Sales forecast for the full year 2022 lowered to $5$0.1 to $5.2 billion
- EPS forecasts for the year 2022 reduced to $2.30–$2.45
- Acquisition of a Hydraulic Cylinders activity and two Textiles activities
Diversified manufacturer Leggett & Platt has lowered its forecast for 2022:
- Selling tips now $5.1 at $5.2 billion (compared to before $5$0.2 to $5.4 billion)
- The decline is mainly due to a lower than expected volume
- EPS tips now $2.30 at $2.45 (compared to before $2$0.65 to $2.80)
- The decrease was primarily due to lower volume, reduced production, slower than expected cost recovery in Automotive and operational inefficiencies in Specialty Foam
- Expect sequential improvement from 3rd to 4th trimester
- Based on these forecasts, the EBIT margin range is expected to be 9.5% to 10.0% (vs. 10.5% to 10.7% previously)
- Operating cash should be $400 at $450 million (compared to previous $550-600 million)
President and CEO Mitch Dolloff commented, “The increasingly challenging global economic environment and consumer backdrop are expected to result in lower-than-previously-expected sales and earnings in the third and fourth quarters of 2022. Demand in the US bedding market is fairly stable but remains at relatively low levels as industry headwinds persist, including the impacts of inflation and monetary policy on consumer spending and consumer sentiment as well as higher inventory levels. n the environment of bedding demand and the slowdown in the steel market in general, we are reducing production in our Rod and Wire businesses to reduce inventory.
“Our Specialty Foam business has seen larger demand impacts due to pandemic-related supply issues and channel-specific pressures. Lower demand for Specialty Foam, combined with operational inefficiencies, which are being resolved by further integration work, takes longer than originally expected to resolve.
“International bedding demand declined more significantly amid geopolitical and macroeconomic disruptions in Europe. Demand for home furnishings has slowed significantly in recent months due to slowing consumer demand and excess inventory at retailers.
“Volume and cost recovery are improving sequentially in automotive, but at a slower pace than expected. Although improving year-over-year, industry production guidance remain dynamic as supply chain and geopolitical impacts drive continued volatility.
“We continue to focus on the things we can control and are taking steps to mitigate the impact of these challenges by aligning costs, production levels and inventory with demand; assessing near-term opportunities with our customers and working with them on the development of new products; and continuing to grow our existing businesses through acquisitions. Our strong balance sheet and cash flow give us confidence in our ability to navigate challenging markets while investing in long-term opportunities.
At the end of August, Leggett & Platt acquired one of the world’s leading manufacturers of hydraulic cylinders for heavy construction machinery. The company has manufacturing facilities in Eschwege, Germany and Ningbo, China and a distribution facility at Halifax, Pennsylvania with combined sales in 2021 of approximately $65 million. In addition, at the end of August, the Company acquired a converter of construction fabrics for the furniture and bedding industries located in Shannon, Mississippi. On October 3Leggett & Platt has acquired a geocomponent distributor located in Ottawa, Canada. Each of these textile companies has an annual turnover of less than $10 million.
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FOR MORE INFORMATION: Visit the Leggett website at www.leggett.com.
BUSINESS DESCRIPTION: Leggett & Platt (NYSE: LEG) is a diversified manufacturer that designs and produces a wide variety of engineered components and products found in most homes and automobiles. The 139-year-old company comprises 15 business units, approximately 20,000 employees and 130 manufacturing plants located in 17 countries.
Leggett & Platt is America’s leading manufacturer of: a) bedding components; b) automotive seat supports and lumbar systems; c) specialty bedding foams and house brand finished mattresses; d) components for household furniture and work furniture; e) flooring underlayment; f) adjustable beds; and (g) machinery for the bedding industry.
FORWARD-LOOKING STATEMENTS: This press release contains “forward-looking statements”, including, but not limited to, full-year 2022 expected sales amount, EPS, EBIT margin, operating cash flow and BPA improvement compared to 3T to 4Q. These forward-looking statements are expressly qualified by the cautionary statements described in this provision and reflect only the beliefs of Leggett or its management at the time the statement is made. Because all forward-looking statements address the future, they are subject to risks, uncertainties and developments that could cause actual events or results to differ materially from those contemplated or reflected in any forward-looking statement. Further, we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date the statement was made, and we do not undertake to do so. Some of these risks and uncertainties include: the negative impact on our sales, earnings, liquidity, margins, cash flow, costs and financial condition caused by: the Russian invasion of Ukraine; global inflationary impacts; macro-economic impacts; the COVID-19 pandemic; demand for our products and the products of our customers; growth rates in the industries in which we participate and opportunities in those industries; the ability of our manufacturing facilities to remain fully operational and to obtain necessary raw materials and parts, maintain appropriate levels of labor and ship finished goods to customers; impairment of goodwill and long-lived assets; restructuring costs; our ability to access the commercial paper market or to borrow under our revolving credit facility, including compliance with covenants that may limit our operational flexibility and our ability to repay our debt in a timely manner; the negative impact of supply chain disruptions; our ability to manage working capital; increases or decreases in our capital requirements, which may vary depending on acquisition or divestiture activity; our capital expenditures; our ability to collect trade receivables; market conditions; price and product competition from foreign and domestic competitors; the cost and availability of raw materials (including semiconductors and chemicals) due to supply chain or other disruptions; labor and energy costs; generation of sufficient cash to pay the dividend; cash repatriation from foreign accounts; our ability to pass on increases in the cost of raw materials through increased selling prices; our ability to maintain profit margins if customers change the quantity or mix of our components in their finished products; our ability to maintain and increase the profitability of acquired companies; political risks; change in tax rates; increased business costs; risks associated with operating abroad; cybersecurity vulnerabilities; customer losses and insolvencies; disruption to our steel bar plant and other operations and supply chain due to severe weather events, natural disaster, fire, explosion, terrorism, a pandemic, government action or labor strike; foreign currency fluctuation; the amount of share buybacks; the imposition or continuation of anti-dumping duties on springs, steel wire rod and mattresses; data confidentiality; climate change compliance costs and impacts on market, technology and reputation; our ESG obligations; litigation risks; and the risk factors in the “Forward-Looking Statements” and “Risk Factors” sections in Leggett’s most recent Forms 10-K and 10-Q reports filed with the SEC.
CONTACT: Investor Relations, (417) 358-8131 or [email protected]
Susan R. McCoySenior Vice President of Investor Relations
Cassie J. Branscumsenior director of investor relations
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