CARTHAGE, Mo., Aug. 3, 2020 /PRNewswire/ --
- 2Q sales were down 30% vs 2Q19, significantly impacted by the
COVID-19 pandemic
- 2Q EPS was ($.05), a decrease of
$.69 vs 2Q19; 2Q adjusted1
EPS was $.16, down $.48 vs 2Q19
- Liquidity at June 30, 2020 was
$1.3 billion
- Board declared third quarter dividend of $.40 per share
Diversified manufacturer Leggett & Platt reported second
quarter sales of $845 million, a
30% decrease versus second quarter last year.
- Organic sales were down 31%:
-
- Volume was down 29%2, largely due to the economic
impact of COVID-19
- Raw material-related selling price decreases and negative
currency impact reduced sales 2%
- Acquisitions added 1% to sales growth
Second quarter EBIT was $23
million, down $113 million or
83% from second quarter last year, and adjusted1
EBIT was $51 million, an
$85 million decrease.
- EBIT and adjusted1 EBIT declined primarily as a
result of lower volume, partially offset by fixed cost
reductions
-
- 2Q 2020 adjustments include a $25
million non-cash goodwill impairment charge related to our
Hydraulic Cylinders business and $3
million of restructuring charges primarily from
pandemic-related cost reductions
- EBIT margin was 2.7% and adjusted1 EBIT margin was
6.0%, down from 11.2% in the second quarter of 2019
- There was no LIFO benefit or expense in the second
quarter of 2020, versus a benefit of $10.4
million (pretax) in the second quarter of 2019
Second quarter EPS was a loss of $.05, a $.69
decrease versus second quarter 2019, and included a goodwill
impairment charge of $.19 and
restructuring charges of $.02.
Second quarter adjusted1 EPS was $.16, a decrease of $.48, primarily from lower EBIT.
Debt, Cash Flow and Dividend
- Net Debt was 3.10x trailing 12-month
adjusted1 EBITDA
- Operating cash flow was $112
million in the second quarter, a decrease of $60 million versus second quarter last year
primarily from lower earnings
- Second quarter dividend was $.40, equal to last year's second quarter
dividend
CEO COMMENTS
Chairman and CEO Karl Glassman
commented, "Our second quarter results were significantly impacted
by the economic effects of the COVID-19 pandemic. We were
pleased to see sales improve sequentially throughout the quarter as
demand improved in most of our markets. The swift cost reduction
actions implemented at the onset of the pandemic helped to mitigate
some of the earnings impact from lower demand levels.
"We continue to see demand recovering through July, although at
varied rates across our markets and geographies given the ongoing
effects of the pandemic and continuing economic uncertainty.
We have improved our liquidity and will continue to carefully
manage our cash and expenses. We are committed to maintaining
our strong balance sheet, investment grade credit rating, and
position as a Dividend Aristocrat.
"Our focus remains on the health and safety of our employees and
their families, along with our customers, suppliers and communities
we serve around the world. I am extremely proud of how our
employees are working together to keep each other safe and healthy
while serving our customers during this challenging time.
"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. We are dedicated to our long-term
vision for the Company and are confident that we will emerge from
this crisis strong and focused on the future."
COVID-19 IMPACT
- Sales improved sequentially throughout the quarter after
hitting their lowest point in early April, and continued to improve
in the first three weeks of Q3 to levels near the prior year
- Cost structure is 75% variable and 25% fixed
- Aligning variable cost structure to demand levels
- Fixed cost reductions are expected to drive 2020 savings of
~$100 million
- Actions taken to optimize cash flow include:
-
- Closely monitoring accounts receivable and collections
- Controlling inventory
- Reducing capital expenditures
LIQUIDITY AND BALANCE SHEET
- $1.3 billion of liquidity at
June 30
-
- $209 million of cash on hand
- $1.1 billion in capacity
remaining under revolving credit facility
- Debt at June 30
-
- Long term debt of $2.1 billion,
including $102 million of commercial
paper outstanding
- No significant maturities until August
2022
- Amended existing credit agreement on May
6, 2020 to allow for additional liquidity
-
- Financial covenant amended from a calculation of total debt to
trailing 12-months EBITDA to net debt to trailing 12-months
EBITDA
- Covenant requires net debt to remain below 4.75x the trailing
12-months EBITDA through March 31,
2021. The ratio is then reduced by 0.5x every quarter
through December 31, 2021 and
thereafter remains at 3.25x.
DIVIDEND
- The Company's Board of Directors declared third quarter
dividend of $.40, equal to the
dividend declared in the third quarter of 2019
- Dividend will be paid on October 15,
2020 to shareholders of record on September 15, 2020
- At an annual indicated dividend of $1.60 per share, the yield is 4.0%, based upon
Friday's closing stock price of $40.09 per share; one of the highest yields among
the S&P 500 Dividend Aristocrats
GUIDANCE
- Company is not providing guidance at this time given continued
macroeconomic uncertainty related to the effects of COVID-19
USES OF CASH
- Remaining 2020 debt maturities of $25
million; no significant maturities until August 2022
- Anticipating capital expenditures of approximately $60 million for the year
- Expecting 2020 dividends of approximately $210 million
- Limiting acquisitions
SEGMENT RESULTS – Second Quarter 2020 (versus 2Q
2019)
Bedding Products –
- Trade sales were down 28%
- Volume was down 25%, primarily from COVID-related demand
declines and exited volume in Fashion Bed and Drawn Wire
- Raw material-related price decreases and currency impact
reduced sales 3%
- EBIT decreased $45 million,
primarily from lower volume and lower metal margin in our rod mill,
partially offset by fixed cost reductions
Specialized Products –
- Trade sales decreased 47%
- Volume was down 46%, primarily from COVID-related demand
declines
- Currency impact decreased sales 1%
- EBIT decreased $61 million,
primarily from lower volume and the $25
million goodwill impairment charge in Hydraulic Cylinders,
partially offset by fixed cost reductions
Furniture, Flooring & Textile Products –
- Trade sales were down 22%
- Organic sales decreased 25%
-
- Volume decreased 24%, primarily from COVID-related demand
declines
- Raw material-related selling price decreases and currency
impact reduced sales 1%
- A small Geo Components acquisition completed in December 2019 added 3% to sales
- EBIT decreased $8 million,
primarily from lower volume, partially offset by fixed cost
reductions and lower raw material costs
SLIDES AND CONFERENCE CALL
A set of slides containing summary financial information is
available from the Investor Relations section of Leggett's website
at www.leggett.com. Management will host a conference call at
7:30 a.m. Central
(8:30 a.m. Eastern) on Tuesday, August 4. The webcast can be accessed
from Leggett's website. The dial-in number is (201) 689-8341; there
is no passcode.
Third quarter results will be released after the
market closes on Monday, November 2,
with a conference call the next morning.
FOR MORE INFORMATION: Visit Leggett's website at
www.leggett.com.
COMPANY DESCRIPTION: 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.
FORWARD-LOOKING STATEMENTS: This press release contains
"forward-looking statements," including, but not limited to, the
continued improvement of our demand; annualized savings from
deploying cost savings measures, including fixed cost actions; the
ability to maintain a strong liquidity and cash position; the
amount of repatriated cash; the amount of capital expenditures;
limiting acquisitions; our ability to collect receivables within
their terms; our ability to manage inventory; and the amount of
borrowing capacity under our commercial paper program and credit
facility. Such 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
deal with the future, they are subject to risks, uncertainties and
developments which might cause actual events or results to differ
materially from those envisioned or reflected in any
forward-looking statement. Moreover, we do not have, and do not
undertake, any duty to update or revise any forward-looking
statement to reflect events or circumstances after the date on
which the statement was made. Some of these risks and uncertainties
include: (i) the adverse impact on our sales, earnings, liquidity,
cash flow and financial condition caused by the COVID-19 pandemic
which has and could continue to materially negatively impact (a)
the demand for our products and our customers' products, growth
rates in the industries in which we participate, and opportunities
in those industries (b) our manufacturing facilities' ability to
remain open, or to re-open if closed (either from the lack of
demand or mandatory governmental closure), obtain necessary raw
materials and parts, maintain appropriate labor levels and ship
finished products to customers, (c) operating costs related to pay
and benefits for our terminated employees, (d) our ability to
collect trade and other notes receivables in accordance with their
terms due to customer bankruptcy, financial difficulties or
insolvency; (e) impairment of goodwill and long-lived assets,
(f) restructuring-related costs, and (g) our ability to access the
commercial paper market or borrow under our revolving credit
facility, including our ability to comply with the restrictive
covenants in our credit facility that may limit our operational
flexibility and our ability to pay our debt when it comes due; (ii)
the Company's ability to achieve its operating targets; (iii)
increases or decreases in our capital needs, which may vary
depending on acquisition or divestiture activity, our working
capital needs and capital expenditures; (iv) market conditions; (v)
price and product competition from foreign and domestic
competitors, (vi) cost and availability of raw materials and labor,
fuel and energy costs, (vii) our ability to generate cash
sufficient to pay the dividend, (viii) our ability to repatriate
cash from offshore accounts; (ix) net interest expense, tax rates,
increased trade costs, cybersecurity breaches, customer losses and
insolvencies, disruption to our steel rod mill, foreign currency
fluctuation, the amount of fully diluted shares, depreciation and
amortization, and litigation risks; (x) the preliminary nature of
savings estimates; and (xi) other risk factors in the
"Forward-Looking Statements" and "Risk Factors" sections in
Leggett's most recent Form 10-K and Form 10-Q reports filed with
the SEC.
CONTACT: Investor Relations,
(417) 358-8131 or invest@leggett.com
Susan R. McCoy, Senior Vice
President, Investor Relations
Wendy M. Watson, Vice President,
Investor Relations
Cassie J. Branscum, Senior Director,
Investor Relations
Tarah L. Sherwood, Director,
Investor Relations
1 Please refer to attached tables for Non-GAAP
Reconciliations
2 2% of volume decline attributable to exited
business
LEGGETT &
PLATT
|
|
|
|
|
|
|
|
|
RESULTS OF
OPERATIONS
|
|
SECOND
QUARTER
|
|
YEAR TO
DATE
|
(In millions, except
per share data)
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Net trade
sales
|
|
$
845.1
|
|
$1,213.2
|
|
(30)%
|
|
$1,890.6
|
|
$2,368.3
|
|
(20)%
|
Cost of goods
sold
|
|
698.8
|
|
943.5
|
|
|
|
1,521.5
|
|
1,865.6
|
|
|
Gross
profit
|
|
146.3
|
|
269.7
|
|
(46)%
|
|
369.1
|
|
502.7
|
|
(27)%
|
Selling &
administrative expenses
|
|
97.2
|
|
118.3
|
|
(18)%
|
|
215.0
|
|
236.9
|
|
(9)%
|
Amortization
|
|
16.3
|
|
16.9
|
|
|
|
32.7
|
|
31.0
|
|
|
Other expense
(income), net
|
|
10.0
|
|
(1.5)
|
|
|
|
17.9
|
|
0.6
|
|
|
Earnings
before interest and taxes
|
|
22.8
|
|
136.0
|
|
(83)%
|
|
103.5
|
`
|
234.2
|
|
(56)%
|
Net interest
expense
|
|
20.4
|
|
21.9
|
|
|
|
40.4
|
|
41.9
|
|
|
Earnings
before income taxes
|
|
2.4
|
|
114.1
|
|
|
|
63.1
|
|
192.3
|
|
|
Income
taxes
|
|
8.5
|
|
27.8
|
|
|
|
23.5
|
|
44.9
|
|
|
Net
earnings
|
|
(6.1)
|
|
86.3
|
|
|
|
39.6
|
|
147.4
|
|
|
Less net income from
non-controlling interest
|
|
-
|
|
(0.1)
|
|
|
|
-
|
|
-
|
|
|
Net
earnings attributable to L&P
|
|
$
(6.1)
|
|
$
86.2
|
|
(107)%
|
|
$
39.6
|
|
$
147.4
|
|
(73)%
|
Earnings per diluted
share
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
|
$
(0.05)
|
|
$0.64
|
|
(108)%
|
|
$
0.29
|
|
$
1.09
|
|
(73)%
|
Shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock (at end of period)
|
|
132.3
|
|
131.4
|
|
0.7 %
|
|
132.3
|
|
131.4
|
|
0.7 %
|
Basic
(average for period)
|
|
135.7
|
|
134.7
|
|
|
|
135.5
|
|
134.5
|
|
|
Diluted
(average for period)
|
|
135.7
|
|
135.2
|
|
0.4 %
|
|
135.7
|
|
135.1
|
|
0.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOW
|
|
SECOND
QUARTER
|
|
YEAR TO
DATE
|
(In
millions)
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Net
earnings
|
|
$
(6.1)
|
|
$
86.3
|
|
|
|
$
39.6
|
|
$
147.4
|
|
|
Depreciation and
amortization
|
|
46.5
|
|
50.0
|
|
|
|
94.0
|
|
96.3
|
|
|
Working capital
decrease (increase)
|
|
22.0
|
|
17.0
|
|
|
|
(87.4)
|
|
(75.8)
|
|
|
Impairments
|
|
25.9
|
|
1.4
|
|
|
|
29.4
|
|
4.3
|
|
|
Other operating
activity
|
|
23.8
|
|
17.6
|
|
|
|
46.9
|
|
31.5
|
|
|
Net
Cash from Operating Activity
|
|
$
112.1
|
|
$
172.3
|
|
(35)%
|
|
$
122.5
|
|
$
203.7
|
|
(40)%
|
Additions to
PP&E
|
|
(18.8)
|
|
(38.7)
|
|
|
|
(43.0)
|
|
(70.5)
|
|
|
Purchase of
companies, net of cash
|
|
-
|
|
-
|
|
|
|
-
|
|
(1,244.3)
|
|
|
Proceeds from
business and asset sales
|
|
2.9
|
|
1.8
|
|
|
|
3.6
|
|
2.0
|
|
|
Dividends
paid
|
|
(52.9)
|
|
(49.8)
|
|
|
|
(105.6)
|
|
(99.4)
|
|
|
Repurchase of common
stock, net
|
|
-
|
|
(0.3)
|
|
|
|
(7.6)
|
|
(2.3)
|
|
|
Additions (payments)
to debt, net
|
|
(332.1)
|
|
(48.4)
|
|
|
|
8.0
|
|
1,240.9
|
|
|
Other
|
|
(8.2)
|
|
(10.5)
|
|
|
|
(16.7)
|
|
(8.5)
|
|
|
Increase (Decr.) in Cash & Equiv.
|
|
$
(297.0)
|
|
$
26.4
|
|
|
|
$
(38.8)
|
|
$
21.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
POSITION
|
|
30-Jun
|
|
|
|
|
|
|
(In
millions)
|
|
2020
|
|
2019
|
|
Change
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
208.8
|
|
$
289.7
|
|
|
|
|
|
|
|
|
Receivables
|
|
577.3
|
|
700.3
|
|
|
|
|
|
|
|
|
Inventories
|
|
574.1
|
|
656.7
|
|
|
|
|
|
|
|
|
Other current
assets
|
|
50.1
|
|
56.3
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
1,410.3
|
|
1,703.0
|
|
(17)%
|
|
|
|
|
|
|
Net fixed
assets
|
|
797.4
|
|
817.9
|
|
|
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
167.9
|
|
169.8
|
|
|
|
|
|
|
|
|
Goodwill
|
|
1,373.5
|
|
1,398.4
|
|
|
|
|
|
|
|
|
Intangible assets and
deferred costs
|
|
833.0
|
|
912.9
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$4,582.1
|
|
$5,002.0
|
|
(8)%
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
361.4
|
|
$
452.9
|
|
|
|
|
|
|
|
|
Current debt
maturities
|
|
51.1
|
|
51.3
|
|
|
|
|
|
|
|
|
Current operating
lease liabilities
|
|
41.8
|
|
38.5
|
|
|
|
|
|
|
|
|
Other current
liabilities
|
|
321.2
|
|
357.6
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
775.5
|
|
900.3
|
|
(14)%
|
|
|
|
|
|
|
Long-term
debt
|
|
2,083.2
|
|
2,363.5
|
|
(12)%
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
128.6
|
|
131.4
|
|
|
|
|
|
|
|
|
Deferred taxes and
other liabilities
|
|
380.2
|
|
368.0
|
|
|
|
|
|
|
|
|
Equity
|
|
1,214.6
|
|
1,238.8
|
|
(2)%
|
|
|
|
|
|
|
Total
Capitalization
|
|
3,806.6
|
|
4,101.7
|
|
(7)%
|
|
|
|
|
|
|
TOTAL
LIABILITIES & EQUITY
|
|
$4,582.1
|
|
$5,002.0
|
|
(8)%
|
|
|
|
|
|
|
LEGGETT &
PLATT
|
|
|
|
|
|
|
|
|
|
SEGMENT
RESULTS1
|
|
SECOND
QUARTER
|
|
YEAR TO
DATE
|
|
(In
millions)
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
|
Bedding
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
Sales
|
|
$
410.6
|
|
$
568.4
|
|
(28)%
|
|
$
901.2
|
|
$1,122.7
|
|
(20)%
|
|
EBIT
|
|
18.6
|
|
63.5
|
|
(71)%
|
|
48.6
|
|
107.6
|
|
(55)%
|
|
EBIT
Margin
|
|
4.5%
|
|
11.2%
|
|
-670
bps
|
2
|
5.4%
|
|
9.6%
|
|
-420
bps
|
2
|
Note
impairment
|
|
-
|
|
-
|
|
|
|
8.4
|
|
-
|
|
|
|
Restructuring-related
charges
|
|
2.6
|
|
(1.5)
|
|
|
|
2.6
|
|
4.1
|
|
|
|
ECS transaction
costs
|
|
-
|
|
-
|
|
|
|
-
|
|
0.9
|
|
|
|
Adjusted
EBIT
|
|
21.2
|
|
62.0
|
|
(66)%
|
|
59.6
|
|
112.6
|
|
(47)%
|
|
Adjusted EBIT
Margin
|
|
5.2%
|
|
10.9%
|
|
-570
bps
|
|
6.6%
|
|
10.0%
|
|
-340
bps
|
|
Depreciation and amortization
|
|
26.3
|
|
28.2
|
|
|
|
53.1
|
|
53.0
|
|
|
|
Adjusted
EBITDA
|
|
47.5
|
|
90.2
|
|
(47)%
|
|
112.7
|
|
165.6
|
|
(32)%
|
|
Adjusted EBITDA
Margin
|
|
11.6%
|
|
15.9%
|
|
-430
bps
|
|
12.5%
|
|
14.8%
|
|
-230
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialized
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
Sales
|
|
$
140.8
|
|
$
267.0
|
|
(47)%
|
|
$
375.3
|
|
$
529.9
|
|
(29)%
|
|
EBIT
|
|
(19.7)
|
|
41.5
|
|
(147)%
|
|
8.0
|
|
77.2
|
|
(90)%
|
|
EBIT
Margin
|
|
-14.0%
|
|
15.5%
|
|
-2,950
bps
|
|
2.1%
|
|
14.6%
|
|
-1,250
bps
|
|
Goodwill
impairment
|
|
25.4
|
|
-
|
|
|
|
25.4
|
|
-
|
|
|
|
Adjusted
EBIT
|
|
5.7
|
|
41.5
|
|
(86)%
|
|
33.4
|
|
77.2
|
|
(57)%
|
|
Adjusted EBIT
Margin
|
|
4.0%
|
|
15.5%
|
|
-1,150
bps
|
|
8.9%
|
|
14.6%
|
|
-570
bps
|
|
Depreciation and amortization
|
|
10.6
|
|
10.4
|
|
|
|
21.8
|
|
20.6
|
|
|
|
Adjusted
EBITDA
|
|
16.3
|
|
51.9
|
|
(69)%
|
|
55.2
|
|
97.8
|
|
(44)%
|
|
Adjusted EBITDA
Margin
|
|
11.6%
|
|
19.4%
|
|
-780
bps
|
|
14.7%
|
|
18.5%
|
|
-380
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture,
Flooring & Textile Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
Sales
|
|
$
293.7
|
|
$
377.8
|
|
(22)%
|
|
$
614.1
|
|
$
715.7
|
|
(14)%
|
|
EBIT
|
|
23.4
|
|
31.5
|
|
(26)%
|
|
49.9
|
|
49.9
|
|
- %
|
|
EBIT
Margin
|
|
8.0%
|
|
8.3%
|
|
-30
bps
|
|
8.1%
|
|
7.0%
|
|
110
bps
|
|
Restructuring-related charges
|
|
0.3
|
|
1.5
|
|
|
|
0.3
|
|
2.2
|
|
|
|
Adjusted
EBIT
|
|
23.7
|
|
33.0
|
|
(28)%
|
|
50.2
|
|
52.1
|
|
(4)%
|
|
Adjusted EBIT
Margin
|
|
8.1%
|
|
8.7%
|
|
-60
bps
|
|
8.2%
|
|
7.3%
|
|
90
bps
|
|
Depreciation and amortization
|
|
6.3
|
|
6.7
|
|
|
|
12.8
|
|
13.3
|
|
|
|
Adjusted
EBITDA
|
|
30.0
|
|
39.7
|
|
(24)%
|
|
63.0
|
|
65.4
|
|
(4)%
|
|
Adjusted EBITDA
Margin
|
|
10.2%
|
|
10.5%
|
|
-30
bps
|
|
10.3%
|
|
9.1%
|
|
120
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Trade
Sales
|
|
$
845.1
|
|
$1,213.2
|
|
(30)%
|
|
$1,890.6
|
|
$2,368.3
|
|
(20)%
|
|
EBIT -
segments
|
|
22.3
|
|
136.5
|
|
(84)%
|
|
106.5
|
|
234.7
|
|
(55)%
|
|
Intersegment eliminations and other
|
|
0.5
|
|
(0.5)
|
|
|
|
(3.0)
|
|
(0.5)
|
|
|
|
EBIT
|
|
22.8
|
|
136.0
|
|
(83)%
|
|
103.5
|
|
234.2
|
|
(56)%
|
|
EBIT
Margin
|
|
2.7%
|
|
11.2%
|
|
-850
bps
|
|
5.5%
|
|
9.9%
|
|
-440
bps
|
|
Goodwill impairment
3
|
|
25.4
|
|
-
|
|
|
|
25.4
|
|
-
|
|
|
|
Restructuring-related
charges3
|
|
2.9
|
|
-
|
|
|
|
2.9
|
|
6.3
|
|
|
|
Note impairment
3
|
|
-
|
|
-
|
|
|
|
8.4
|
|
-
|
|
|
|
Stock write-off from
prior year divestiture 3
|
|
-
|
|
-
|
|
|
|
3.5
|
|
-
|
|
|
|
ECS transaction costs
3
|
|
-
|
|
-
|
|
|
|
-
|
|
0.9
|
|
|
|
Adjusted EBIT
3
|
|
51.1
|
|
136.0
|
|
(62)%
|
|
143.7
|
|
241.4
|
|
(40)%
|
|
Adjusted EBIT
Margin 3
|
|
6.0%
|
|
11.2%
|
|
-520
bps
|
|
7.6%
|
|
10.2%
|
|
-260
bps
|
|
Depreciation and amortization - segments
|
|
43.2
|
|
45.3
|
|
|
|
87.7
|
|
86.9
|
|
|
|
Depreciation and amortization - unallocated 4
|
|
3.3
|
|
4.7
|
|
|
|
6.3
|
|
9.4
|
|
|
|
Adjusted EBITDA
3
|
|
$
97.6
|
|
$
186.0
|
|
(48)%
|
|
$
237.7
|
|
$
337.7
|
|
(30)%
|
|
Adjusted EBITDA
Margin 3
|
|
11.5%
|
|
15.3%
|
|
-380
bps
|
|
12.6%
|
|
14.3%
|
|
-170
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LAST SIX
QUARTERS
|
|
2019
|
|
2020
|
|
Selected
Figures
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Net Trade Sales ($
million)
|
|
1,155.1
|
|
1,213.2
|
|
1,239.3
|
|
1,144.9
|
|
1,045.5
|
|
845.1
|
|
Sales Growth (vs.
prior year)
|
|
12 %
|
|
10 %
|
|
14 %
|
|
9 %
|
|
(9)%
|
|
(30)%
|
|
Volume Growth (same
locations vs. prior year)
|
|
(3)%
|
|
(6)%
|
|
(1)%
|
|
(1)%
|
|
(9)%
|
|
(29)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
3
|
|
105.4
|
|
136.0
|
|
147.9
|
|
140.1
|
|
92.6
|
|
51.1
|
|
Cash from Operations
($ million)
|
|
31.4
|
|
172.3
|
|
212.9
|
|
251.4
|
|
10.4
|
|
112.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(trailing twelve months) 3
|
|
619.9
|
|
651.0
|
|
689.1
|
|
721.3
|
|
709.7
|
|
621.3
|
|
(Long-term debt +
current maturities - cash & equivalents) / Adj. EBITDA
3,5
|
|
3.55
|
|
3.26
|
|
2.91
|
|
2.59
|
|
2.76
|
|
3.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales (vs.
prior year) 6
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Bedding
Products
|
|
4 %
|
|
(8)%
|
|
(9)%
|
|
(10)%
|
|
(15)%
|
|
(28)%
|
|
Specialized
Products
|
|
(5)%
|
|
(3)%
|
|
5 %
|
|
4 %
|
|
(11)%
|
|
(47)%
|
|
Furniture, Flooring
and Textile Products
|
|
(3)%
|
|
(4)%
|
|
1 %
|
|
(2)%
|
|
(7)%
|
|
(25)%
|
|
Overall
|
|
(1)%
|
|
(6)%
|
|
(2)%
|
|
(4)%
|
|
(12)%
|
|
(31)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Segment
and overall company margins calculated on Trade sales.
|
|
2bps =
basis points; a unit of measure equal to 1/100th of 1%.
|
|
3Refer to
next page for non-GAAP reconciliations.
|
|
4Consists
primarily of depreciation of non-operating assets and amortization
of debt issuance costs.
|
|
5EBITDA
based on trailing twelve months.
|
|
6Trade
sales excluding sales attributable to acquisitions and divestitures
consummated in the last 12 months.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEGGETT &
PLATT
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
REPORTED (GAAP) TO ADJUSTED (Non-GAAP) FINANCIAL MEASURES
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Non-GAAP
adjustments 7
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Goodwill
impairment
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
25.4
|
|
Note
impairment
|
|
-
|
|
-
|
|
-
|
|
-
|
|
8.4
|
|
-
|
|
Stock write-off from
prior year divestiture
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3.5
|
|
-
|
|
Restructuring-related
charges
|
|
6.3
|
|
-
|
|
3.8
|
|
5.0
|
|
-
|
|
2.9
|
|
ECS transaction
costs
|
|
0.9
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Non-GAAP
adjustments (pretax) 8
|
|
7.2
|
|
-
|
|
3.8
|
|
5.0
|
|
11.9
|
|
28.3
|
|
Income tax
impact
|
|
(1.8)
|
|
-
|
|
(0.4)
|
|
(0.1)
|
|
(2.9)
|
|
(0.4)
|
|
Non-GAAP
adjustments (after tax)
|
|
5.4
|
|
-
|
|
3.4
|
|
4.9
|
|
9.0
|
|
27.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
|
135.0
|
|
135.2
|
|
135.4
|
|
135.8
|
|
135.6
|
|
135.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS impact of
non-GAAP adjustments
|
|
0.04
|
|
-
|
|
0.02
|
|
0.04
|
|
0.07
|
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Adjusted EBIT,
EBITDA, Margin, and EPS 7
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Net trade
sales
|
|
1,155.1
|
|
1,213.2
|
|
1,239.3
|
|
1,144.9
|
|
1,045.5
|
|
845.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (earnings before
interest and taxes)
|
|
98.2
|
|
136.0
|
|
144.1
|
|
135.1
|
|
80.7
|
|
22.8
|
|
Non-GAAP adjustments
(pretax and excluding interest)
|
|
7.2
|
|
-
|
|
3.8
|
|
5.0
|
|
11.9
|
|
28.3
|
|
Adjusted EBIT ($
millions)
|
|
105.4
|
|
136.0
|
|
147.9
|
|
140.1
|
|
92.6
|
|
51.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
margin
|
|
8.5%
|
|
11.2%
|
|
11.6%
|
|
11.8%
|
|
7.7%
|
|
2.7%
|
|
Adjusted EBIT
margin
|
|
9.1%
|
|
11.2%
|
|
11.9%
|
|
12.2%
|
|
8.9%
|
|
6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
98.2
|
|
136.0
|
|
144.1
|
|
135.1
|
|
80.7
|
|
22.8
|
|
Depreciation and
Amortization
|
|
46.3
|
|
50.0
|
|
48.4
|
|
47.2
|
|
47.5
|
|
46.5
|
|
EBITDA
|
|
144.5
|
|
186.0
|
|
192.5
|
|
182.3
|
|
128.2
|
|
69.3
|
|
Non-GAAP adjustments
(pretax and excluding interest)
|
|
7.2
|
|
-
|
|
3.8
|
|
5.0
|
|
11.9
|
|
28.3
|
|
Adjusted EBITDA ($
millions)
|
|
151.7
|
|
186.0
|
|
196.3
|
|
187.3
|
|
140.1
|
|
97.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
margin
|
|
12.5%
|
|
15.3%
|
|
15.5%
|
|
15.9%
|
|
12.3%
|
|
8.2%
|
|
Adjusted EBITDA
margin
|
|
13.1%
|
|
15.3%
|
|
15.8%
|
|
16.4%
|
|
13.4%
|
|
11.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
0.45
|
|
0.64
|
|
0.74
|
|
0.64
|
|
0.34
|
|
(0.05)
|
|
EPS impact of
non-GAAP adjustments
|
|
0.04
|
|
-
|
|
0.02
|
|
0.04
|
|
0.07
|
|
0.21
|
|
Adjusted EPS
($)
|
|
0.49
|
|
0.64
|
|
0.76
|
|
0.68
|
|
0.41
|
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2020
|
|
Net Debt to
Adjusted EBITDA 9
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Total Debt
|
|
2,461.0
|
|
2,414.8
|
|
2,248.3
|
|
2,117.6
|
|
2,466.4
|
|
2,134.3
|
|
Less: Cash and
equivalents
|
|
(263.3)
|
|
(289.7)
|
|
(242.0)
|
|
(247.6)
|
|
(505.8)
|
|
(208.8)
|
|
Net Debt
|
|
2,197.7
|
|
2,125.1
|
|
2,006.3
|
|
1,870.0
|
|
1,960.6
|
|
1,925.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA,
trailing 12 months
|
|
619.9
|
|
651.0
|
|
689.1
|
|
721.3
|
|
709.7
|
|
621.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt / Leggett
Reported 12-month Adjusted EBITDA
|
|
3.55
|
|
3.26
|
|
2.91
|
|
2.59
|
|
2.76
|
|
3.10
|
|
Net Debt / Leggett
and ECS 12-month Pro Forma Adjusted EBITDA
10
|
|
3.18
|
|
3.04
|
|
2.81
|
|
2.59
|
|
|
|
|
|
|
7Management and investors use these
measures as supplemental information to assess operational
performance.
|
8The
non-GAAP adjustments affected various line items on the income
statement. Details by quarter: 1Q 2019: $2.4 million COGS,
$0.9 million SG&A, $3.9 million other expense.
2Q 2019: ($1.5) million COGS, $1.5 million other
expense. 3Q 2019: ($0.9) million COGS, $4.7 million other
expense. 4Q 2019: $5.0 million other expense. 1Q 2020:
$8.4 million
SG&A, $3.5 million other expense. 2Q 2020:
$0.5 COGS, $27.8 million other expense.
|
9Management and investors use this ratio
as supplemental information to assess ability to pay off
debt. These ratios are calculated differently than the
Company's credit facility
covenant ratio.
|
10The
Leggett and ECS pro forma adjusted EBITDA for the 12 months ended
March 31, June 30, September 30, and December 31, 2019 is
presented in the table below. Because the
increase in debt from December 31, 2018 to
December 31, 2019 was directly attributable to the ECS acquisition,
we believe it is more meaningful to investors to include ECS's
pre-acquisition adjusted EBITDA for the
trailing 12 months ended March 31, June 30, September 30, and
December 31, 2019 in the net debt / 12-month adjusted EBITDA
calculation.
|
ECS
pre-acquisition adjusted EBITDA from:
|
|
4/1/18 –
1/16/19
|
|
7/1/18 –
1/16/19
|
|
10/1/18 –
1/16/19
|
|
1/1/19 –
1/16/19
|
Net
earnings
|
|
12
|
|
6
|
|
-
|
|
(1)
|
Interest
expense
|
|
33
|
|
22
|
|
12
|
|
1
|
Taxes
|
|
6
|
|
4
|
|
1
|
|
0
|
EBIT
|
|
51
|
|
32
|
|
13
|
|
-
|
Depreciation and
Amortization
|
|
14
|
|
10
|
|
5
|
|
1
|
Change in control
bonus
|
|
7
|
|
7
|
|
7
|
|
-
|
EBITDA
|
|
72
|
|
49
|
|
25
|
|
1
|
|
|
|
|
|
|
|
|
|
Leggett
Adjusted EBITDA, trailing 12 months (including ECS from January 16,
2019)
|
620
|
|
651
|
|
689
|
|
721
|
ECS
pre-acquisition adjusted EBITDA
|
|
72
|
|
49
|
|
25
|
|
1
|
Leggett
and ECS Pro Forma Adjusted EBITDA, trailing 12 months
|
|
692
|
|
700
|
|
714
|
|
722
|
Net Debt /
Leggett and ECS 12-month Pro Forma Adjusted EBITDA
|
|
3.18
|
|
3.04
|
|
2.81
|
|
2.59
|
|
11Calculations impacted by
rounding.
|
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SOURCE Leggett & Platt