CARTHAGE, Mo., July 29, 2019 /PRNewswire/ --
- 2Q sales grew 10%, to $1.21
billion
- 2Q EPS was $.64, an increase of
$.01 vs 2Q18
- 2Q cash flow from operations was a strong $172 million
- 2019 guidance lowered: sales of $4.7-$4.85 billion;
EPS of $2.30-$2.50; adjusted EPS of $2.40-$2.60
Diversified manufacturer Leggett & Platt
reported second quarter 2019 sales of $1.21 billion, a 10% increase versus second
quarter last year.
- Acquisitions added 16% to sales growth (ECS and other smaller
acquisitions)
- Organic sales were down 6%:
-
- Volume down 6%, 3% from exited business
- Currency impact -2%
- Raw material-related selling price increases +2%
Second quarter EBIT was $136
million, up $15 million or 12%
from second quarter last year.
- EBIT included $12 million of
amortization expense from the ECS acquisition
- EBIT margin was 11.2%, up from 11.0% in the second quarter of
2018
Second quarter EPS was $.64, an increase of $.01 versus 2018. The increase reflects
higher EBIT mostly offset by higher interest expense ($.05/share) and a higher tax rate ($.03/share).
Restructuring:
- There were no significant restructuring-related charges in the
second quarter
- Full year restructuring-related charges are expected to be
approximately $17 million
($.10/share)
-
- $6 million cash and $11 million non-cash
CEO Comments
President and CEO Karl G. Glassman commented, "Sales grew 10% in
the second quarter, primarily from the ECS acquisition. Sales also
increased from continued market share and content gains in U.S.
Spring, which was up 4% in the quarter, but this improvement was
more than offset by lower volume from business exited in our
Furniture Products segment, weak trade demand in the Industrial
Products segment, and softer demand in Automotive.
"Second quarter EBIT increased a notable $15 million over second quarter last year,
primarily from lower raw material costs (including LIFO benefit),
and the ECS acquisition. However, these increases were
partially offset by lower volume in several businesses and other
smaller items.
"For the full year, sales growth will benefit significantly from
the ECS acquisition. In addition, we continue to expect sales
growth in Automotive, U.S. Spring, Aerospace, Hydraulic Cylinders,
and Work Furniture, more than offset by the exit of both Fashion
Bed and lower margin business in Home Furniture. We
anticipate improved EBIT from higher sales and decreasing steel
costs (including LIFO benefit).
"Demand for our Bedding products remains strong and will benefit
from the preliminary dumping duties on Chinese mattresses that were
recently imposed by the Department of Commerce. These rates
range from 69% to 1,732% and should allow domestic mattress
producers to compete on a more level playing field. We
anticipate a final determination in the matter by the end of the
year.
"We are pleased with the progress of the restructuring activity
we initiated in the fourth quarter of 2018 in our Home Furniture
and Fashion Bed businesses. The most significant elements of
both plans are behind us and we expect to be substantially complete
by the end of the third quarter."
Debt and Cash Flow
- Debt was 3.45x trailing 12-month pro forma adjusted[1] EBITDA;
we expect to be at our target level of debt to trailing 12-months
adjusted EBITDA of approximately 2.5x by end of 2020
- At the end of the second quarter, $866
million was available under the commercial paper
program
- Operating cash flow was $172
million in the second quarter, an increase of $92 million versus second quarter last year
Dividends
- Leggett & Platt's Board of Directors declared a
$.40 second quarter dividend,
two cents higher than last
year
Stock Repurchases
- Consistent with our commitment to delever, we repurchased a de
minimis number of shares surrendered for employee benefit
plans
- Issued .2 million shares through employee benefit plans and
option exercises
- Shares outstanding at the end of the second quarter were 131.4
million
2019 Guidance
- Full year 2019 sales and EPS guidance lowered
- Sales are expected to be $4.7-$4.85 billion,
an increase of 10-14% versus 2018
-
- Organic sales are expected to decline -1% to -5%, including -3%
from exited business
- Acquisitions should add 15% to sales; including approximately
$600 million from ECS (commencing
from the January 16th
acquisition date)
- EPS is expected to be $2.30-$2.50,
including approximately $.10 per
share of restructuring-related costs
-
- Versus 2018, EPS reflects decreasing steel costs (including
LIFO benefit), partially offset by lower organic sales and a higher
tax rate
- Adjusted EPS is expected to be $2.40-$2.60
- ECS is expected to be neutral to EPS in 2019
- Based on this guidance range, EBIT margin should be 10.7-11.1%;
adjusted EBIT margin should be
11.1-11.4%
- Operating cash flow should approximate $550 million
- Prior Guidance:
-
- Sales: $4.95-$5.1 billion
- EPS: $2.35-$2.55; adjusted EPS: $2.45-$2.65
LIFO
- In the second quarter of 2019, lower steel costs resulted in a
LIFO benefit of $10.4 million
(pretax)
- In the second quarter of 2018, increasing steel costs resulted
in LIFO expense of $12.8 million
(pretax)
SEGMENT RESULTS – Second Quarter 2019 (versus 2Q
2018)
Residential Products –
- Total sales grew 38%; acquisitions added 39%
- Organic sales decreased 1%
- Volume was down 2%, with continued market share and content
gains in U.S. Spring offset by declines in other businesses
- Raw material-related price increases, net of currency impact,
added 1% to sales
- EBIT increased $4 million, with
earnings from the ECS acquisition (after $12
million of amortization expense) partially offset by lower
volume
Industrial Products –
- Total sales decreased 9%, with lower steel rod and wire volume
(-17%) partially offset by raw material-related selling price
increases implemented in 2018 (8%)
- EBIT increased $16 million,
primarily from lower steel costs (including LIFO benefit)
Furniture Products –
- Total sales were down 11%
- Volume decreased 11%, from our decision to exit Fashion Bed and
planned declines in Home Furniture
- Raw material-related selling price increases were offset by a
negative currency impact
- EBIT increased $5 million,
primarily from improved pricing combined with lower raw material
costs (including LIFO benefit) and lower fixed costs attributable
to restructuring activity
Specialized Products –
- Total sales decreased 3%
- Currency impact, net of raw material-related price increases in
Hydraulic Cylinders, decreased sales 3%
- Volume was flat, with growth in Aerospace offset by softer
demand in the automotive market
- EBIT decreased $10 million,
primarily from lower volume in Automotive, negative currency
impact, and new program ramp up costs in Aerospace
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, July 30. 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, October 28, 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 136-year-old diversified manufacturer that designs and
produces engineered products found in most homes and automobiles.
The Company is comprised of 15 business units, 23,000
employee-partners, and 145 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; g) high-carbon drawn
steel wire; and h) bedding industry machinery.
FORWARD-LOOKING STATEMENTS: This press release contains
"forward-looking statements," including, but not limited to, the
2019 sales and annualized sales of ECS; the acceleration of our
Bedding businesses' sales; our ability to deleverage to a target
level ratio of debt to trailing 12-months EBITDA of approximately
2.5 by year-end 2020; the Company's 2019 EPS, adjusted EPS, sales,
sales growth, EBIT margin, adjusted EBIT margin, cash from
operations, the amount of cash repatriated from offshore accounts,
capital expenditures, dividends, dividend payout ratio,
depreciation and amortization, net interest expense, tax rate and
the amount of fully diluted shares; our ability to increase the
dividend; and the amount and timing of 2019 restructuring-related
charges related to the Fashion Bed and Home Furniture businesses
(Restructuring Plan). 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) uncertainty of the expected financial performance of
ECS following the acquisition; (ii) failure to realize the
anticipated benefits of the ECS acquisition, including as a result
of delay in integrating the businesses of ECS; (iii) difficulties
and delays in achieving revenue synergies of ECS; (iv) inability to
retain and hire key personnel and maintain relationships with
customers and suppliers of ECS; (v) the Company's and ECS's ability
to achieve their respective operating targets; (vi) increases or
decreases in our capital needs, which may vary depending on a
variety of factors, including, without limitation, any other
acquisition or divestiture activity and our working capital needs;
(vii) market conditions; (viii) alternative capital market
opportunities, including, without limitation, the relative
attractiveness of longer-term debt financing or equity financing;
(ix) the impact of the Tax Cuts and Jobs Act, price and product
competition from foreign and domestic competitors, changes in
demand for the Company's products, cost and availability of raw
materials and labor, fuel and energy costs, general economic
conditions, possible goodwill or other asset impairment, foreign
currency fluctuation, litigation risks; (x) the preliminary nature
of the estimates related to the Restructuring Plan, and the
possibility that all or some of the estimates may change as the
Company's analysis develops, additional information is obtained,
and the Company's efforts to downsize or consolidate any business
progresses; (xi) our ability to timely implement the
Restructuring Plan in a manner that will positively impact our
financial condition and results of operations; (xii) the
impact of the Restructuring Plan on the Company's relationships
with its employees, major customers and vendors; and (xiii) other
risk factors detailed from time to time in Leggett's 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, Director, Investor
Relations
Cassie J. Branscum, Manager,
Investor Relations
1 Please refer to attached tables
for non-GAAP reconciliations.
LEGGETT &
PLATT
|
RESULTS OF
OPERATIONS
|
|
SECOND
QUARTER
|
|
YEAR TO
DATE
|
|
(In millions, except
per share data)
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|
Net
sales
|
|
$
1,213.2
|
|
$
1,102.5
|
|
10%
|
|
$
2,368.3
|
|
$
2,131.3
|
|
11%
|
|
Cost of goods
sold
|
|
943.5
|
|
871.5
|
|
|
|
1,865.6
|
|
1,682.9
|
|
|
|
Gross
profit
|
|
269.7
|
|
231.0
|
|
17%
|
|
502.7
|
|
448.4
|
|
12%
|
|
Selling &
administrative expenses
|
|
118.3
|
|
107.8
|
|
10%
|
|
236.9
|
|
212.5
|
|
11%
|
|
Amortization
|
|
16.9
|
|
5.1
|
|
|
|
31.0
|
|
10.1
|
|
|
|
Other expense
(income), net
|
|
(1.5)
|
|
(3.0)
|
|
|
|
0.6
|
|
(2.7)
|
|
|
|
Earnings
before interest and taxes
|
|
136.0
|
|
121.1
|
|
12%
|
|
234.2
|
|
228.5
|
|
2%
|
|
Net interest
expense
|
|
21.9
|
|
13.6
|
|
|
|
41.9
|
|
25.6
|
|
|
|
Earnings
before income taxes
|
|
114.1
|
|
107.5
|
|
|
|
192.3
|
|
202.9
|
|
|
|
Income
taxes
|
|
27.8
|
|
22.4
|
|
|
|
44.9
|
|
39.9
|
|
|
|
Net
earnings
|
|
86.3
|
|
85.1
|
|
|
|
147.4
|
|
163.0
|
|
|
|
Less net income from
non-controlling interest
|
|
(0.1)
|
|
(0.1)
|
|
|
|
-
|
|
(0.1)
|
|
|
|
Net
earnings attributable to L&P
|
|
$
86.2
|
|
$
85.0
|
|
1%
|
|
$
147.4
|
|
$
162.9
|
|
(10%)
|
|
Earnings per diluted
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
diluted share
|
|
$0.64
|
|
$0.63
|
|
2%
|
|
$1.09
|
|
$1.20
|
|
(9%)
|
|
Shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock (at end of period)
|
|
131.4
|
|
130.1
|
|
1.0%
|
|
131.4
|
|
130.1
|
|
|
|
Basic
(average for period)
|
|
134.7
|
|
134.1
|
|
|
|
134.5
|
|
134.7
|
|
|
|
Diluted
(average for period)
|
|
135.2
|
|
135.0
|
|
0.1%
|
|
135.1
|
|
135.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOW
|
|
SECOND
QUARTER
|
|
YEAR TO
DATE
|
|
(In
millions)
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|
Net
earnings
|
|
$
86.3
|
|
$
85.1
|
|
|
|
$
147.4
|
|
$
163.0
|
|
|
|
Depreciation and
amortization
|
|
50.0
|
|
33.8
|
|
|
|
96.3
|
|
67.2
|
|
|
|
Working capital
decrease (increase)
|
|
17.0
|
|
(55.5)
|
|
|
|
(75.8)
|
|
(133.4)
|
|
|
|
Impairments
|
|
1.4
|
|
0.0
|
|
|
|
4.3
|
|
0.2
|
|
|
|
Other operating
activity
|
|
17.6
|
|
17.1
|
|
|
|
31.5
|
|
27.6
|
|
|
|
Net
Cash from Operating Activity
|
|
$
172.3
|
|
$
80.5
|
|
114%
|
|
$
203.7
|
|
$
124.6
|
|
63%
|
|
Additions to
PP&E
|
|
(38.7)
|
|
(40.9)
|
|
|
|
(70.5)
|
|
(81.2)
|
|
(13%)
|
|
Purchase of
companies, net of cash
|
|
-
|
|
(4.4)
|
|
|
|
(1,244.3)
|
|
(90.2)
|
|
|
|
Proceeds from
business and asset sales
|
|
1.8
|
|
0.3
|
|
|
|
2.0
|
|
1.9
|
|
|
|
Dividends
paid
|
|
(49.8)
|
|
(47.3)
|
|
|
|
(99.4)
|
|
(94.8)
|
|
|
|
Repurchase of common
stock, net
|
|
(0.3)
|
|
(52.4)
|
|
|
|
(2.3)
|
|
(107.3)
|
|
|
|
Additions (payments)
to debt, net
|
|
(48.4)
|
|
46.2
|
|
|
|
1,240.9
|
|
190.0
|
|
|
|
Other
|
|
(10.5)
|
|
(30.2)
|
|
|
|
(8.5)
|
|
(22.7)
|
|
|
|
Increase (Decr.) in Cash & Equiv.
|
|
$
26.4
|
|
$
(48.2)
|
|
|
|
$
21.6
|
|
$
(79.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL
POSITION
|
|
30-Jun
|
|
|
|
|
|
|
|
(In
millions)
|
|
2019
|
|
2018
|
|
Change
|
|
|
|
|
|
|
|
Cash and
equivalents
|
|
$
289.7
|
|
$
446.4
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
700.3
|
|
649.8
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
656.7
|
|
634.2
|
|
|
|
|
|
|
|
|
|
Other current
assets
|
|
56.3
|
|
52.4
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
1,703.0
|
|
1,782.8
|
|
(4%)
|
|
|
|
|
|
|
|
Net fixed
assets
|
|
817.9
|
|
709.3
|
|
|
|
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
169.8
|
|
—
|
|
|
|
|
|
|
|
|
|
Goodwill and other
assets
|
|
2,311.3
|
|
1,151.9
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
5,002.0
|
|
$
3,644.0
|
|
37%
|
|
|
|
|
|
|
|
Trade accounts
payable
|
|
$
452.9
|
|
$
450.6
|
|
|
|
|
|
|
|
|
|
Current debt
maturities
|
|
51.3
|
|
153.7
|
|
|
|
|
|
|
|
|
|
Current operating
lease liabilities
|
|
38.5
|
|
—
|
|
|
|
|
|
|
|
|
|
Other current
liabilities
|
|
357.6
|
|
332.6
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
900.3
|
|
936.9
|
|
(4%)
|
|
|
|
|
|
|
|
Long-term
debt
|
|
2,363.5
|
|
1,298.0
|
|
82%
|
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
131.4
|
|
—
|
|
|
|
|
|
|
|
|
|
Deferred taxes and
other liabilities
|
|
368.0
|
|
280.5
|
|
|
|
|
|
|
|
|
|
Equity
|
|
1,238.8
|
|
1,128.6
|
|
10%
|
|
|
|
|
|
|
|
Total
Capitalization
|
|
4,101.7
|
|
2,707.1
|
|
52%
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES & EQUITY
|
|
$
5,002.0
|
|
$
3,644.0
|
|
37%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEGGETT &
PLATT
|
SEGMENT
RESULTS1
|
|
SECOND
QUARTER
|
|
YEAR TO
DATE
|
|
(In
millions)
|
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
|
Residential
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External
Sales
|
|
$
606.7
|
|
$
438.8
|
|
38.3%
|
|
$
1,143.1
|
|
$
836.9
|
|
36.6%
|
|
Total Sales (External
+ Inter-segment)
|
|
610.3
|
|
443.5
|
|
37.6%
|
|
1,149.5
|
|
846.2
|
|
35.8%
|
|
EBIT
|
|
44.4
|
|
40.0
|
|
11%
|
|
76.3
|
|
75.0
|
|
2%
|
|
EBIT
Margin
|
|
7.3%
|
|
9.0%
|
|
(170)
bps
|
2
|
6.6%
|
|
8.9%
|
|
(230)
bps
|
2
|
Restructuring-related charges
|
|
—
|
|
—
|
|
|
|
0.1
|
|
—
|
|
|
|
ECS
transaction costs
|
|
—
|
|
—
|
|
|
|
0.9
|
|
—
|
|
|
|
Adjusted
EBIT
|
|
44.4
|
|
40.0
|
|
11%
|
|
77.3
|
|
75.0
|
|
3%
|
|
Adjusted EBIT
Margin
|
|
7.3%
|
|
9.0%
|
|
(170)
bps
|
|
6.7%
|
|
8.9%
|
|
(220)
bps
|
|
Depreciation and amortization
|
|
26.0
|
|
11.7
|
|
|
|
49.2
|
|
23.0
|
|
|
|
Adjusted
EBITDA
|
|
70.4
|
|
51.7
|
|
36%
|
|
126.5
|
|
98.0
|
|
29%
|
|
Adjusted EBITDA
Margin
|
|
11.5%
|
|
11.7%
|
|
(20)
bps
|
|
11.0%
|
|
11.6%
|
|
(60)
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External
Sales
|
|
$
80.4
|
|
$
96.4
|
|
(16.6%)
|
|
$
169.5
|
|
$
178.4
|
|
(5.0%)
|
|
Total Sales (External
+ Inter-segment)
|
|
156.0
|
|
170.5
|
|
(8.5%)
|
|
324.0
|
|
322.9
|
|
0.3%
|
|
EBIT
|
|
29.2
|
|
13.4
|
|
118%
|
|
53.3
|
|
22.4
|
|
138%
|
|
EBIT
Margin
|
|
18.7%
|
|
7.9%
|
|
1080
bps
|
|
16.5%
|
|
6.9%
|
|
960
bps
|
|
Depreciation and amortization
|
|
2.8
|
|
2.5
|
|
|
|
5.4
|
|
5.1
|
|
|
|
EBITDA
|
|
32.0
|
|
15.9
|
|
101%
|
|
58.7
|
|
27.5
|
|
113%
|
|
EBITDA
Margin
|
|
20.5%
|
|
9.3%
|
|
1120
bps
|
|
18.1%
|
|
8.5%
|
|
960
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External
Sales
|
|
$
259.1
|
|
$
291.4
|
|
(11.1%)
|
|
$
525.8
|
|
$
572.7
|
|
(8.2%)
|
|
Total Sales (External
+ Inter-segment)
|
|
261.3
|
|
295.0
|
|
(11.4%)
|
|
531.0
|
|
579.2
|
|
(8.3%)
|
|
EBIT
|
|
20.9
|
|
16.3
|
|
28%
|
|
27.3
|
|
34.3
|
|
(20%)
|
|
EBIT
Margin
|
|
8.0%
|
|
5.5%
|
|
250
bps
|
|
5.1%
|
|
5.9%
|
|
(80)
bps
|
|
Restructuring-related charges
|
|
—
|
|
—
|
|
|
|
6.2
|
|
—
|
|
|
|
Adjusted
EBIT
|
|
20.9
|
|
16.3
|
|
28%
|
|
33.5
|
|
34.3
|
|
(2%)
|
|
Adjusted EBIT
Margin
|
|
8.0%
|
|
5.5%
|
|
250
bps
|
|
6.3%
|
|
5.9%
|
|
40
bps
|
|
Depreciation and amortization
|
|
4.0
|
|
4.4
|
|
|
|
8.0
|
|
8.7
|
|
|
|
Adjusted
EBITDA
|
|
24.9
|
|
20.7
|
|
20%
|
|
41.5
|
|
43.0
|
|
(3%)
|
|
Adjusted EBITDA
Margin
|
|
9.5%
|
|
7.0%
|
|
250
bps
|
|
7.8%
|
|
7.4%
|
|
40
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialized
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External
Sales
|
|
$
267.0
|
|
$
275.9
|
|
(3.2%)
|
|
$
529.9
|
|
$
543.3
|
|
(2.5%)
|
|
Total Sales (External
+ Inter-segment)
|
|
267.7
|
|
276.5
|
|
(3.2%)
|
|
531.5
|
|
544.6
|
|
(2.4%)
|
|
EBIT
|
|
41.5
|
|
51.9
|
|
(20%)
|
|
77.2
|
|
98.0
|
|
(21%)
|
|
EBIT
Margin
|
|
15.5%
|
|
18.8%
|
|
(330)
bps
|
|
14.5%
|
|
18.0%
|
|
(350)
bps
|
|
Depreciation and amortization
|
|
10.4
|
|
9.8
|
|
|
|
20.6
|
|
18.9
|
|
|
|
EBITDA
|
|
51.9
|
|
61.7
|
|
(16%)
|
|
97.8
|
|
116.9
|
|
(16%)
|
|
EBITDA
Margin
|
|
19.4%
|
|
22.3%
|
|
(290)
bps
|
|
18.4%
|
|
21.5%
|
|
(310)
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External
Sales
|
|
$
1,213.2
|
|
$
1,102.5
|
|
10.0%
|
|
$
2,368.3
|
|
$
2,131.3
|
|
11.1%
|
|
EBIT -
segments
|
|
136.0
|
|
121.6
|
|
12%
|
|
234.1
|
|
229.7
|
|
2%
|
|
Intersegment eliminations and other
|
|
—
|
|
(0.5)
|
|
|
|
0.1
|
|
(1.2)
|
|
|
|
EBIT
|
|
136.0
|
|
121.1
|
|
12%
|
|
234.2
|
|
228.5
|
|
2%
|
|
EBIT
Margin
|
|
11.2%
|
|
11.0%
|
|
20
bps
|
|
9.9%
|
|
10.7%
|
|
(80)
bps
|
|
Restructuring-related charges 3
|
|
—
|
|
—
|
|
|
|
6.3
|
|
—
|
|
|
|
ECS
transaction costs 3
|
|
—
|
|
—
|
|
|
|
0.9
|
|
—
|
|
|
|
Adjusted EBIT
3
|
|
136.0
|
|
121.1
|
|
12%
|
|
241.4
|
|
228.5
|
|
6%
|
|
Adjusted EBIT
Margin
|
|
11.2%
|
|
11.0%
|
|
20
bps
|
|
10.2%
|
|
10.7%
|
|
(50)
bps
|
|
Depreciation and amortization - segments
|
|
43.2
|
|
28.4
|
|
|
|
83.2
|
|
55.7
|
|
|
|
Depreciation and amortization - unallocated 4
|
|
6.8
|
|
5.4
|
|
|
|
13.1
|
|
11.4
|
|
|
|
Adjusted EBITDA
3
|
|
186.0
|
|
154.9
|
|
20%
|
|
337.7
|
|
295.6
|
|
14%
|
|
Adjusted EBITDA
Margin
|
|
15.3%
|
|
14.0%
|
|
130
bps
|
|
14.3%
|
|
13.9%
|
|
40
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LAST SIX
QUARTERS
|
|
2018
|
|
2019
|
|
Selected
Figures
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Net Sales ($
million)
|
|
1,029
|
|
1,102
|
|
1,092
|
|
1,047
|
|
1,155
|
|
1,213
|
|
Sales Growth (vs.
prior year)
|
|
7%
|
|
11%
|
|
8%
|
|
6%
|
|
12%
|
|
10%
|
|
Volume Growth (same
locations vs. prior year)
|
|
1%
|
|
6%
|
|
3%
|
|
—%
|
|
(3%)
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT
3
|
|
107
|
|
121
|
|
124
|
|
120
|
|
105
|
|
136
|
|
Cash from Operations
($ million)
|
|
44
|
|
81
|
|
127
|
|
189
|
|
31
|
|
172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(trailing twelve months) 3
|
|
588
|
|
589
|
|
598
|
|
609
|
|
620
|
|
651
|
|
(Long-term debt +
current maturities) / Adj. EBITDA 3,5
|
|
2.4
|
|
2.5
|
|
2.3
|
|
1.9
|
|
4.0
|
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Organic Sales (vs.
prior year)
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Residential
Products
|
|
1%
|
|
7%
|
|
3%
|
|
5%
|
|
3%
|
|
(1%)
|
|
Industrial
Products
|
|
13%
|
|
23%
|
|
28%
|
|
22%
|
|
10%
|
|
(9%)
|
|
Furniture
Products
|
|
3%
|
|
9%
|
|
4%
|
|
(1%)
|
|
(5%)
|
|
(11%)
|
|
Specialized
Products
|
|
11%
|
|
11%
|
|
3%
|
|
—%
|
|
(5%)
|
|
(3%)
|
|
Overall
|
|
6%
|
|
10%
|
|
6%
|
|
3%
|
|
(1%)
|
|
(6%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Segment
margins calculated on Total Sales. Overall company
margin calculated on External Sales.
|
2bps =
basis points; a unit of measure equal to 1/100thof
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEGGETT &
PLATT
|
RECONCILIATION OF
REPORTED (GAAP) TO ADJUSTED (Non-GAAP) FINANCIAL MEASURES
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2019
|
|
Non-GAAP
adjustments 6
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Restructuring-related
charges
|
|
-
|
|
-
|
|
-
|
|
16.3
|
|
6.3
|
|
-
|
|
Note
impairment
|
|
-
|
|
-
|
|
-
|
|
15.9
|
|
-
|
|
-
|
|
ECS transaction
costs
|
|
-
|
|
-
|
|
-
|
|
6.9
|
|
0.9
|
|
-
|
|
Non-GAAP
adjustments (pretax) 7
|
|
-
|
|
-
|
|
-
|
|
39.1
|
|
7.2
|
|
-
|
|
Income tax
impact
|
|
-
|
|
-
|
|
-
|
|
(7.5)
|
|
(1.8)
|
|
-
|
|
Tax Cuts and Jobs Act
impact
|
|
-
|
|
-
|
|
(1.8)
|
|
-
|
|
-
|
|
-
|
|
Non-GAAP
adjustments (after tax)
|
|
-
|
|
-
|
|
(1.8)
|
|
31.6
|
|
5.4
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
|
136.3
|
|
135.0
|
|
134.7
|
|
134.7
|
|
135.0
|
|
135.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS impact of
non-GAAP adjustments
|
|
-
|
|
-
|
|
(0.01)
|
|
0.23
|
|
0.04
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2019
|
|
Adjusted EBIT,
EBITDA, Margin, and EPS 6
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Net
sales
|
|
1,029
|
|
1,102
|
|
1,092
|
|
1,047
|
|
1,155
|
|
1,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (earnings before
interest and taxes)
|
|
107.4
|
|
121.1
|
|
124.4
|
|
84.0
|
|
98.2
|
|
136.0
|
|
Non-GAAP adjustments
(pretax and excluding interest) 8
|
|
-
|
|
-
|
|
-
|
|
36.0
|
|
7.2
|
|
-
|
|
Adjusted EBIT ($
millions)
|
|
107.4
|
|
121.1
|
|
124.4
|
|
120.0
|
|
105.4
|
|
136.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
margin
|
|
10.4%
|
|
11.0%
|
|
11.4%
|
|
8.0%
|
|
8.5%
|
|
11.2%
|
|
Adjusted EBIT
margin
|
|
10.4%
|
|
11.0%
|
|
11.4%
|
|
11.5%
|
|
9.1%
|
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
107.4
|
|
121.1
|
|
124.4
|
|
84.0
|
|
98.2
|
|
136.0
|
|
Depreciation and
Amortization
|
|
33.4
|
|
33.8
|
|
33.8
|
|
35.1
|
|
46.3
|
|
50.0
|
|
EBITDA
|
|
140.8
|
|
154.9
|
|
158.2
|
|
119.1
|
|
144.5
|
|
186.0
|
|
Non-GAAP adjustments
(pretax and excluding interest) 8
|
|
-
|
|
-
|
|
-
|
|
36.0
|
|
7.2
|
|
-
|
|
Adjusted EBITDA ($
millions)
|
|
140.8
|
|
154.9
|
|
158.2
|
|
155.1
|
|
151.7
|
|
186.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
margin
|
|
13.7%
|
|
14.1%
|
|
14.5%
|
|
11.4%
|
|
12.5%
|
|
15.3%
|
|
Adjusted EBITDA
margin
|
|
13.7%
|
|
14.1%
|
|
14.5%
|
|
14.8%
|
|
13.1%
|
|
15.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS
|
|
0.57
|
|
0.63
|
|
0.67
|
|
0.39
|
|
0.45
|
|
0.64
|
|
EPS impact of
non-GAAP adjustments
|
|
-
|
|
-
|
|
(0.01)
|
|
0.23
|
|
0.04
|
|
-
|
|
Adjusted EPS
($)
|
|
0.57
|
|
0.63
|
|
0.66
|
|
0.62
|
|
0.49
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2019
|
|
Total Debt to
Adjusted EBITDA 9
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
1Q
|
|
2Q
|
|
Total Debt
|
|
1,393
|
|
1,452
|
|
1,357
|
|
1,169
|
|
2,461
|
|
2,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA,
trailing 12 months
|
|
588
|
|
589
|
|
598
|
|
609
|
|
620
|
|
651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt /
Leggett Reported 12-month Adjusted EBITDA
|
|
2.4
|
|
2.5
|
|
2.3
|
|
1.9
|
|
4.0
|
|
3.7
|
|
Total Debt /
Leggett and ECS 12-month Pro Forma Adjusted EBITDA
10
|
|
|
|
|
|
|
|
|
|
3.56
|
|
3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6Management and investors use these
measures as supplemental information to assess operational
performance.
|
|
|
|
|
|
|
|
|
7The
non-GAAP adjustments affected various line items on the income
statement. Details by quarter: 4Q 2018: $4.4 million COGS,
$19.6 million SG&A,
$11.9 million other expense, $3.2 million interest
expense. 1Q 2019: $2.4 million COGS, $0.9 million SG&A,
$3.9 million other expense.
|
|
84Q 2018
excludes $3.2 million of financing-related charges recognized in
interest 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, 2019 and June 30, 2019 is presented in the table
below. Because the increase in
total debt from December 31, 2018 to June 30,
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, 2019 and June 30, 2019 in the total debt
/ 12-month adjusted EBITDA calculation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECS
pre-acquisition adjusted EBITDA from:
|
|
|
|
|
|
|
|
|
|
4/1/18 –
1/16/19
|
|
7/1/18 –
1/16/19
|
|
Net
earnings
|
|
|
|
|
|
|
|
|
|
12
|
|
6
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
33
|
|
22
|
|
Taxes
|
|
|
|
|
|
|
|
|
|
6
|
|
4
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
51
|
|
32
|
|
Depreciation and
Amortization
|
|
|
|
|
|
|
|
|
|
14
|
|
10
|
|
Change in control
bonus
|
|
|
|
|
|
|
|
|
|
7
|
|
7
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
72
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leggett
Adjusted EBITDA, trailing 12 months (including ECS from January 16,
2019)
|
|
|
|
|
|
|
|
|
620
|
|
651
|
|
ECS
pre-acquisition adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
72
|
|
49
|
|
Leggett
and ECS Pro Forma Adjusted EBITDA, trailing 12 months
|
|
|
|
|
|
|
|
|
|
692
|
|
700
|
|
Total Debt
/ Leggett and ECS 12-month Pro Forma Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
3.56
|
|
3.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11Calculations impacted by
rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/leggett--platt-reports-2q-results-300892625.html
SOURCE Leggett & Platt