CARTHAGE, Mo., Oct. 10,
2022 /PRNewswire/ --
- Full year 2022 sales guidance lowered to $5.1–$5.2 billion
- Full year 2022 EPS guidance reduced to $2.30–$2.45
- Acquired a Hydraulic Cylinders business and two Textiles
businesses
Diversified manufacturer Leggett & Platt lowered its
full-year 2022 guidance:
- Sales guidance now $5.1 to
$5.2 billion (vs prior $5.2–$5.4 billion)
-
- Decrease is primarily due to lower volume than previously
expected
- EPS guidance now $2.30 to
$2.45 (vs prior $2.65–$2.80)
-
- Decrease is primarily from lower volume, reduced production,
slower than anticipated cost recovery in Automotive, and
operational inefficiencies in Specialty Foam
- Expect sequential improvement from 3Q to 4Q
- Based upon this guidance, EBIT margin range should be 9.5% to
10.0% (vs prior 10.5%–10.7%)
- Cash from operations expected to be $400 to $450
million (vs prior $550–$600 million)
President and CEO Mitch Dolloff
commented, "The increasingly challenged global economic environment
and consumer backdrop is expected to result in lower than
previously anticipated sales and earnings in the third and fourth
quarters of 2022. Demand in the U.S. bedding market is fairly
stable but remains at relatively weak levels as industry headwinds
persist, including inflationary and monetary policy impacts on
consumer spending and consumer sentiment as well as higher
inventory levels. Given the bedding demand environment and slowing
market for steel generally, we are cutting production in our Rod
and Wire businesses to reduce inventory.
"Our Specialty Foam business has experienced larger demand
impacts as a result of previous pandemic-related supply issues and
channel specific pressures. Lower demand in Specialty Foam in
combination with operational inefficiencies, which are being
addressed by continuing integration work, are taking longer than
originally expected to resolve.
"Demand in International Bedding has declined more significantly
amid geopolitical and macroeconomic disruptions in Europe. Home Furniture demand has softened
significantly in the last few months with slower consumer demand
and excess inventory at retail.
"Volume and cost recovery are improving sequentially in
Automotive, but at a slower rate than anticipated. While improving
year-over-year, industry production forecasts remain dynamic as
supply chain and geopolitical impacts bring continued
volatility.
"We continue to focus on things we can control and are taking
action to mitigate the impact of these challenges by aligning
costs, production levels, and inventory with demand; evaluating
near-term opportunities with our customers and working with them on
new product developments; and continuing to build out 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."
In late August, Leggett & Platt acquired a leading global
manufacturer of hydraulic cylinders for heavy construction
machinery. The company has manufacturing facilities in Eschwege,
Germany and Ningbo, China and a distribution facility in
Halifax, Pennsylvania with
combined 2021 sales of approximately $65
million. Also, in late August, the Company acquired a
converter of construction fabrics for the furniture and bedding
industries located in Shannon,
Mississippi. On October 3,
Leggett & Platt acquired a distributor of geo components
located in Ottawa, Canada. Each of
these Textiles businesses have annual sales under $10 million.
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FOR MORE INFORMATION: Visit Leggett's website at
www.leggett.com.
COMPANY DESCRIPTION: 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 139-year-old Company is comprised of 15
business units, approximately 20,000 employees and 130
manufacturing facilities located in 17 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
amount of the Company's forecasted 2022 full-year sales, EPS, EBIT
margin, cash from operations, and the improvement of EPS from 3Q to
4Q. 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: the adverse 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; the demand for our
products and our customers' products; growth rates in the
industries in which we participate and opportunities in those
industries; our manufacturing facilities' ability to remain fully
operational and obtain necessary raw materials and parts, maintain
appropriate labor levels and ship finished products to customers;
the impairment of goodwill and long-lived assets;
restructuring-related costs; our ability to access the commercial
paper market or borrow under our revolving credit facility,
including compliance with restrictive covenants that may limit our
operational flexibility and our ability to timely pay our debt;
adverse impact from supply chain disruptions; our ability to manage
working capital; increases or decreases in our capital needs, 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; cost and availability of raw materials
(including semiconductors and chemicals) due to supply chain
disruptions or otherwise; labor and energy costs; cash generation
sufficient to pay the dividend; cash repatriation from foreign
accounts; our ability to pass along raw material cost increases
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 grow the
profitability of acquired companies; political risks; changing tax
rates; increased trade costs; risks related to operating in foreign
countries; cybersecurity breaches; customer losses and
insolvencies; disruption to our steel rod mill and other operations
and supply chain because of severe weather-related events, natural
disaster, fire, explosion, terrorism, pandemic, governmental action
or labor strikes; foreign currency fluctuation; the amount of share
repurchases; the imposition or continuation of anti-dumping duties
on innersprings, steel wire rod and mattresses; data privacy;
climate change compliance costs and market, technological and
reputational impacts; our ESG obligations; litigation risks; and
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 of Investor Relations
Cassie J. Branscum, Senior Director
of Investor Relations
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SOURCE Leggett & Platt