Leggett & Platt (LEG) 7 Feb 232022 Q4 Earnings call transcript

Greetings, and welcome to the Leggett & Platt Fourth Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Susan McCoy, Senior Vice President of Investor Relations. you. Thank

begin. may You

thank Conference taking Call. and Platt's in Fourth Quarter you morning, part for Leggett Good

CFO; of Vice On the President President Specialized segments; Tate, Cassie and Tyson and and call Products Bedding CEO; Henderson, IR. the today and Senior Vice Branscum, Jeff Products Executive are and Furniture, Hagale, Vice segment; Textile of Senior and of President President Mitch Flooring Dollof, Steve Director the Executive Products President and President

this morning with Jeff call operating you questions as group follows: the The points address start our agenda demand in will have. discuss is Mitch will details the and will release our a main answer trends. for financial results and and of outlook any summary cover and yesterday's for we made press XXXX

conference the portion permission. recorded is material. without call Leggett may and or Platt replay be A website. being is our This & IR broadcast is transcribed, of from recorded Leggett’s copyrighted not expressed call This for available

We slides we the release including of supplement details. information website documents set Leggett's this and on financial a posted yesterday’s PowerPoint – of Those portion non-GAAP the contain along with reconciliations. press summary the information, segment to call, discuss that of IR

and materially you differ I company due results objectives, undertakes strategies, to constitute revise concerning number need trends the to these that may update future or a remind risks or or no results forward-looking today remarks expectations, uncertainties, and events statements. events, obligation statements. to of Actual

and entitled Statements. the sections XX-K most refer factors additional please in yesterday’s of Forward-Looking and Risk to press recent risk summary release our these Factors and a subsequent XX-Q For in information,

the turn Mitch. now call to I’ll over

the thank in our in diverse deliver and residential markets. call. results and us solid end ingenuity for & and agility XXXX strong businesses, fourth morning demand despite Platt quarter cash our of helped in discipline you employees Good portfolio of Leggett participating weak

of of currency to price X%. flat, X% $X.XX continuing XXXX growth. raw declines negative Organic selling by a Acquisitions, billion, primarily offset record volume in acquisitions. operations of impact sales were X%, from sales of from to net and divestitures, added with X% grew increases material-related Sales X% of

partially softness Volume decrease raw in in from segment. growth in pricing These absorption Rod and EBIT million, versus and of a Furniture, was million by end by specialty Textile partially offset demand EBIT, automotive. markets. inefficiencies reduced markets, lower industrial and higher driven the inefficiencies declines transportation volume, residential in $XX overhead decreases foam, automotive offset EBIT decrease lower were production, XXXX in metal in material million business by primarily Flooring from Products $XXX XXXX a and margin were end XXXX adjusted and and operational discipline operational $XXX and expansion versus of Steel costs our

X.X%, XXXX's EPS $X.XX XX.X%. adjusted of per XX.X% down a EBIT in XXXX of of XXXX share decrease EBIT EPS from decrease EBIT margin Earnings XX% $X.XX, $X.XX. XX% margin versus and adjusted of a of versus was margin and in of was

XXXX. The versus global negatively its flow consumer on Cash impact current quarter the fourth increase million, our a environment $XXX operations macroeconomic was results. XX% from and impacted

price fourth were partially offset per Sales impact, were raw currency Sales increases. primarily earnings $X.XX. in EBIT and and quarter was volume the XX% was million, lower billion, share down $X.X quarter from versus by $XX material-related XXXX,

driven growth end residential softness volume by continued by Acquisitions offset and markets, hydraulic cylinders. in to demand sales. decline added automotive, partially aerospace, was X% in The

offset reduce margin volume declines primarily Rod and XXXX, EBIT by absorption were These inventory below expansion. from we metal cut lower versus fourth lower quarter intentionally partially as business overhead Steel to production in XX% decreased our demand levels.

XX% quarter of versus inflation, from fourth XX.X% share As XXXX. decreased in quarter and X.X%, was Earnings margin a impacts fourth EBIT result of the down per these XXXX.

million. During the leading in China, heavy In completed equipment of manufacturer cylinders four and for Germany, we with Cylinders platform the into in a segment year, with construction us market acquisitions. brings approximately equipment. late Hydraulic in August, annualized aligns trends that growth This global we hydraulic operations builds and attractive an our the scale and acquired strategic of and $XXX sales US well of acquisition autonomous automation

Also under acquired for annual that distributes furniture $XX textiles small bedding we million. and and in August, industries sales business a the fabrics with converts construction

of control, and sales and erosion combined In storm acquired management, million. early products approximately used October applications with water distributor two we mid-December, various of Canadian-based other for $XX

strategic business and acquisitions over through that the have in years supply expanded attractive textiles textile expertise We leverage small chain our successfully markets. end

segments. the segment spending decreased fourth in the Bedding year. and bedding persisted. full market during quarter to softened X% quarter the consumer on for of down on moving versus XXXX fourth as in our the were Products Now, macroeconomic Demand Sales XX% impacts US

We in the XXXX consistent experienced modest the second of and increases of year. year in expect the demand volumes with sequential continuing to half first with half consistent in relatively remain the levels in XXXX

the was pandemic Volume mid-single-digit mattress supply volatile comparable market. environment. to has Spring estimate that we the shortages, share related two domestic a a share in to US despite mattress market the early of is loss our in XXXX, which stable down last innerspring After remained XX% in years over the

demand in rod in we limiting XXXX benefit output Although, year. is with align the expect earnings trade in wire Strong increase the and consistent lower first half to inventory XXXX, provided of demand production levels. demand after to assumed for

the trade demand a slowed inventory. half considerably of in as result, However, significantly And production XXXX. we cut raw reduce back to

XXXX levels. be in XXXX in is well but remain Steel normal below rod to with line production expected

in margin prices year as latter but earnings internal to metal a the to lesser trade of demand. offset lower benefit Increased expect the extent provided throughout soften. higher year part consumption the We steel

pricing, While continued anticipate we it is steel in softening difficult predict to XXXX.

months, XXXX relatively stabilized with we rod pricing to due be bedding metal recent and XXXX. costs. expect demand at European remain elevated in levels in conversion to we margins in flat historically However, and higher expect Demand has to

in we the across to levels The support those brought segment XXXX in took back with inventory line reduce current actions needed to have demand.

changing are focused we on have to demand, we capacity requirements. to remain quickly prepared respond place, customer servicing we the in and With

segment XXXX was specialty experienced result challenge of quarter significantly and at business. two-thirds impacted foam dropped foam the throughout remained year in levels in About specialty the earnings by low earnings XXXX. demand, our fourth Full of of a in were difficulties quickly which XXXX depressed

areas. impacted Demand was from three

demand general being surges decline first XX% the and XXXX The of shortages in in bedding chemical approximately XXXX, and following market XXXX.

in and to And customer of finished channel-focused. than cases. to in a more to some number small suffered finally, which share brands, cash privacy goods was production specialty loss digitally from goods Finished the second consumer we foam laws with native sales constraints. shifting weighted market declined due heaviest components changes is The in customers from overall

course Specialty chemical Foam we the were inflation producers, through phone costs historically experienced also XXXX, earnings XXXX. remained by all Like the impacted significant in high at other and chemical volatile supply of environment. levels

of level foam costs, greater the even and pouring of importance normal. material is converting than additionally, Given

operated efficiency because in service the levels. of first demand need and Between target priority material integration have high we customers. However, XXXX to became not at paused chemical customers, our servicing and shortages,

detrimental impact at inefficiencies had on earnings. costs chemical Material these a high

are with continued specialty While phone, it making demand in will improvements especially environment, some challenging see in time progress. the take plan confident our we're to and recovery

placing sales our in are also on growth of team pipeline on a equipment our opportunities the Specialty improvement by segment and our driving has Specialty of level process through remain margins and for Foam technologies. We've and in focused changes. drive confident influenced Our Foam improvements profitable management. business material We attention will that strong both long-term material short-term highest

in global approximately up Specialized major growth for automotive versus production January shows fourth Sales X% increased in and the XXXX the for Products XX% year. in of full our forecast The XX% markets segment XXXX. quarter were

is forecast in year-over-year, bring XXXX. improving dynamic remain geopolitical, automotive continued Cost macroeconomic, make and impacts While automotive, we chain, further industry volatility. progress recovery to production as supply and in could continuing expect COVID

In in strong expect demand XXXX. our Aerospace business, we continued

market in creating material and remain back slowing heavy half some both the eased. industry. Demand segments volatility year backlogs in and as hydraulic market equipment into and labor remain the with across first strong the the shortages cylinders XXXX potential handling to some elevated material of levels. raw is are strong the backlogs at However, order is End construction half in expected demand of

versus Sales the market, slowed demand of in XX% our and backlogs down X% Textile up customer and high fourth of Furniture Furniture, both the the for end segment Products quarter were been depleted. largely quarter Flooring & at mid- and Home XXXX year. during full have the

weak in price across Demand customers inventory working fabric demand softness lower are and points This price to remained points at reduce also impacted volume extremely levels. converting. all

volume first market lower half XXXX. of the at We least expect through

as quarter slowed fourth for to with exposure residential sales Work demand in the Furniture decreased continued demand and contract soften. products

trend to into continue this XXXX. expect We

and home improvement modestly demand In levels. well Flooring has demand activity. lower residential pre-pandemic remains market with improving, Hospitality is below but Products, slowing slowly softened the housing

XXXX, retail. the remains to Geo heading Components demand in in civil somewhat construction extent market a particularly lesser solid and into

XXXX, impacts can mitigate on on focused the continuing things we through our move control we and are the As we improving business. that of to challenges market

on new improving on strong working focus and continuing cash product management. We our our operating with are efficiency, opportunities, customers driving

strength successfully challenging long-term Our gives in to while ability confidence us opportunities. financial in markets, investing our navigate

tenacity, and long-term our your driving like Finally, strength, thank would I to employees for dedication results. to

drive to of the company success. our results our despite Each values circumstances. is challenging to ingenuity required forward to and you collaboration, Your commitment key macroeconomic our continued in agility

over turn Jeff. I'll the call now to

efforts inventory in to XXXX, XXXX, operations generated current Working reflects XXXX but of partially increased million, for and we This efforts reflective increased lesser to we purchases higher due a XXXX smaller in morning as improvement to use Thank cash depletion to inventory capital, good you, of much to Mitch working everyone. offset by levels accounts million lower in by XXXX. from a reduce as restocking much This earnings. significantly $XXX due volume payable extent was cash following our of demand. partially lower slowed levels. decrease more offset $XXX inventory generated large $XXX and return than in increase million capital the a in we In

in softer adjusted We working to Cash of as be focus operations working $XXX on continue a from capital we to optimizing million percentage sales the of million year as XXXX in is $XXX XX.X%. environment. a macroeconomic ended capital with to annualized expected

consistent Total They funding priority, were and cash XXXX use reflecting capital for growth, acquisitions strategic future unchanged. priorities a while with are for available include expenditures long-term our investing funding share organic repurchases order an paying $XXX spending. and controlling of million, of dividends in the balance Our cash.

quarter fourth raised shareholders. quarterly a declared In dividend in XXXX, X% last commitment to or for the dividend dividend. share, to ongoing annual value $X.XX of November, of our return higher consecutive $X.XX than Directors our Board year's honoring We XXst our year our per

the discussed price, annual $X.XX, an based acquisitions one upon year the highest for used We of million the indicated four among At earlier. Friday's strategic dividend that kings. of Mitch closing is yield the during $XX dividend X.X% the

With the cash share the deleveraging we accomplished past one repurchases returned of years, as in our XXXX. uses of over few

an billion. X.X times, August. We with ended X.X% liquidity the repurchase to we to of used EBITDA commercial million million of trailing program and debt our $XXX million XX-year shares bonds We the XX-month year, that year X.XX adjusted paper During net of used to $XX at $X price in of $XX.XX. total repay average matured

balanced financial investment base our a capital remain and strength cash and balance and sheet disciplined focused when We making on capital maintaining generation strong deploying while manner. us in Our flexibility gives decisions.

and in and to deflation year full single XXXX. low XXXX impact of to digits. midpoint sales digits, add down low is the currency mid-single reflecting single to the digits be down single to up sales growth or billion Furniture, XXXX, low The acquisitions expected Volume products $X.X XXXX also bedding high down expected at guidance combined in to X% specialized macro approximately the in X% moving billion XXXX Products be reduce Textile sales assumes products single should Flooring and digits across to of guidance X% markets. versus our our up to guidance. $X.X are expected down Now with digits is uncertainty

continue with automotive, cylinders declines home sales in expected in of Volume work Wire. bed, Rod adjustable expected growth aerospace, Steel trade is components and furniture, and and furniture, geo to Drawn hydraulic

demand stable businesses, bedding continued low generally levels. other We expect reflecting volume our in

moderate $X.XX. $X.XX XXXX in our primarily The Steel our be per from in are range deflation. and in the pricing to midpoint lower of volume some metal business, lower Rod to share earnings margins pressure of businesses, reflects expected

approximately of Based XXXX $XXX $XX amortization diluted year million, is per XX%, upon $XXX year EBIT range margin X.X% shares to and of of guidance depreciation million. this assumes and tax expense of to rate full expected guidance framework, effective approximately X%. be net a our full share fully million, Earnings interest

the expenditures million approximately XXXX. line and are conserving as $XXX share acquisitions focus we year Dividends approximately of spending to For in repurchases XXXX, we million, minimal expect be for on capital $XXX with and full of expected cash.

not we're quarterly in providing normal down earnings XXXX, meaningfully guidance, of performance-based as quarter quarter, highest well timing we to which the due be primarily some the as while accruals, to businesses. versus do first our And typically seasonality expect fourth first of are in quarter compensation

expect We normal of higher with of the the earnings and second quarters the year. seasonality continuation in third

macroeconomic these challenging, year, half challenges continued with first the remains Leggett discipline. environment and in In to closing, navigate of especially while well-positioned the financial operating the is

creating to generation our shareholders. value strong on We give are our keenly continue and ability confidence fundamentals enduring for cash us our in long-term focused

the over back turn I'll call comments, those to Susan. With

We thank Operator, to and we're for session. your prepared attention, answer Q&A be That your concludes begin questions. ready we'll you to our remarks. the glad

Thank you.

will Our your from line a Instructions] questions We of proceed now the question. question-and-answer Please session. conducting Goldman first [Operator Sachs. with be Maklari One with come Susan

Good you. morning everyone. Thank

Good morning Susan.

My be in prepared that you details us it year, the you're a the changes something sense of thinking more process? you you Specialty is -- that the how about When a of efforts for that about event? it some give the that where results those later was are and perhaps of you think in thank think through helpful. I starting very flow this Foam the through will within is we can to making, all XXXX walk And question be to you and or comments, should of benefits

comments. are clarification recovery you've and on with I'll know in was long, place. comment diligently know you really the we Yes, to Susan, been the assess that's I thanks there Tyson, I a and put some great there. listening provide on some question, but we it to try for wanted in team ECS. let working and where plans

thanks start our with good morning Susan. of plans. Sure, and, commercial I'll side the

in and environment, done As was our good in a slow tough job especially at noted but in the diversify our commercial environment team to the it's historically, building our business has weighted a slow even prerecorded our customer pipeline remarks, base. looking where really we've demand opportunities commercial

feel good near-term some about slowness, just market with despite our So pipeline headwinds there. the overall I

to working to differentiation more returning are got of able their we're chemicals and foam and short, because well. we development just formulations eased to return technologies. make our as our pivot some specialty had especially, And other team as customers our of introductions, really have When looking in constraints servicing really our continue have at been our as returned resources interested to looking on to at our we've customers product really back to spend customers. But able that and time improved sure and and get new to have could those

of we some developing half awarded. But as and the from of technologies demand business into full year, coming the benefit but with overall, the fact I throughout and in have, benefits year. to start quality that opportunities see We'll that feel I using also of pipeline, those back were about probably part the the projects some leads those year, the and both we're So of still, the being our specialty the as well. from phone next good our think, of are slow

about the in from that The being well, the of some together commercial and also on way. it. we came about team through side challenges there, we've put things, good mentioned the along the feel the acquisition filling how along that's gaps feel which working team as I both with So, operations, that's

leadership. with place our operational So we're in good a

the Some – before taking the to But about and that those our see just underway, really out phone through – brought of improved IT I we've steps year. would umbrella. able as being not under move about, also being We're I the well, control, of realistic specialty the business. install the now think, system investing IT really and get just all we'll overall And back rolling across we're as already data good our hold talked system about feel we're I being on companies time cautious to heavy process think there. things we integration L&P frame I focus to four the of but the and that's take but an

over arrive. We made on also, pandemic investments efficiency But lot us of focused automation couple the equipment control times during the last are investments pretty starting equipment, a long. in to and of especially is years, lead helping material that like

will start and it they to up, integrated full if up to show running it even and So get take time some to efficiency.

back would our equipment year, next we'll into more the year I benefits and this of start say So to half see investments. of from

that how frame the I a was but out. operational So commercial bit know of things a a to rolling you little reference, give both and lot, on just just side are

that's gets following today for that Yeah. And especially outlook for in these thinking are endpoint? where about top this thinking business. on how XXXX, think some No, thoughts seasonality When I path parts bedding the you on think we of helpful. the year? about of are getting company-specific as are the through, where that you dynamics up us we very be to on of should to coming some relate any it Thank gave that, do of the from as that the to and that you about margins How normal margin that the different about eventually we guess you. of cadence does of segment

what precisely year. some happens predict That's in rod it's that And would you over volume biggest like the difficult probably detail share? us, from have of we – the for that to anticipated contraction the of biggest biggest a think course that there really is any have the do be spread. or impact. to Cassie, scratch I Susan, impact you'd the one

Okay.

comment. just seasonal also also, And we well. last But to also talked And was normal soft, intentional as inventory. demand more we but do really we about returning patterns. one over down market the were the bringing course more of before year, as the Yes, see about this our

year. Our did production in job slow that, even that that we demand environment, reason could team which tough level our the demand to in pushing the really below through end is of good do so the was a control but towards a

to to we're I So, back place and be overhead we we even a better seasonal producing have recovery. back get think should as patterns, more year this and

So, challenge year. the that was a real over us for last

the of Yes, particularly end at the year.

think I Tyson. that's great a point,

looked but rod lower if So, of at year, the last pretty than being we as big a with said, you strong the even half a to year the the little trade high to volume, we levels first consistent, now the longer, much the we're bit had the it, year, but half we lower little part right? right, And first overall similar, as be more that call last anticipating just or more really -- similarly, then And year. similar. and in of opposed of had production

normalized just more it a than what think would I last hopefully be So, bit we year. saw

Susan quarter return for year. bedding more true Okay, your that the a Susan with question. margin patterns to very lower helpful. through expectations first that’s the company specific about talked move with little overall bit we Yes. seasonal on as a We holds

third has their all seasonal quarter. bedding been helps quarter that historically again, with, treat So, highest

what as move a So, a step-up year we we're perspective, the margin through percentage showing. margins in from

Okay.

I'll in helpful. the very back That's queue. you. Thank get Okay.

Thank you.

with Our your from questions. Please the with proceed Keith come Securities. of next Hughes questions line Truist

year the the a into planning start you had Rod playing quarter? the you guess Are curtailments that in see I Is you. first quarter. still slow first to role? Thank the to indicated Production

that Tyson, Good morning handle you let I'll one. question. Keith, good

really Keith. the this really playing year. something morning throughout Good that’s Sure. point Keith at Yes, we're

slow, back half demand As we and got the back the of we we to more year. into had XXXX take saw actions trade in aggressive half

especially and third pulling fourth the towards really it heavily our was fourth production So, in down, weighted the quarter. quarter and

year. things So, balanced overall, be standpoint more to we throughout the expect production total of this relatively evenly from a through the year, course but consistent

way because XXXX XXXX. we Tyson, it to increased XXXX, lower looked So, it strong first significantly production. fourth sequentially we it? at But in would was from we at QX see from quarter that looked so Is in production the of to think quarter if right about it if the year-over-year, see we

that's I way think about right the think to it.

Okay.

business. is seasonal that's so to EPS be case, a your change another if first, the comes the I'm the the confused much And are in why be margin in a metal little with first from down some like that. But so the seasonality production the steps going seems offsetting EPS lot it always lower, seasonally, the quarter? down you -- Is would assuming given higher

some first expect especially Ukraine, in last the -- the the to part last constraints in overall we're expecting and just modest capacity of experiencing up we well, in to margin, overall and Versus really are conflict year, starting decline higher market of drove year the when metal things year. compared part first

So less half relatively margin. and the than last our still we of modest, look metal at it's year, first overall when production but

guidance the you And the what for assuming deteriorate you end through the are all the up at And those end do year? assuming margins metal of they for XXXX, year? of Okay. kind are

Sure.

at the the of It's full as years. year, over course down compression. the we in through so couple in last difficult But down be hard So we move all the XXXX year. really modestly to on of margin we predict. for total, now the yes, looked been expect have some basis, a would the that especially if It's year, we modest XXXX percentage it's the year through to mid-teens. versus And right

mid-teens. Down

that? of Okay. emphasis on the second year the there half more Is an of in

back the more, still relatively as get of Slightly through we but consistent year. the half

Okay.

quarter the But the in should. a and we fourth continuing expand contracted get like. to guess, saw to I bit first deeper probably in a quarters, I markets little metal little three – And here, then

fourth in percentage the XX quarter.

Exactly.

So moderating. that's tanking, that just was

year, of think got the fourth predict, because quarter as And conversion quite higher there bringing and or bit to overall going a right. That's as soft a down, People demand. end a in just been steel the costs was a little I inventories especially of been XXXX, off to tough scrap high. was was bringing might little uncertainty. people up, indicator remain little difficult started consumers market we an has be have inventory Prices

and So, but it's still trying pretty to right, dynamic that's predict, Mitch.

to particularly – what So low the at had end pretty call saw in so pass three, a But be the kind the EPS here. reduction? of range, – drivers sorry for of to one would one, you we list biggest those final the reduction it's two, question, from if substantial for that, what the

Cassie, to guys want take that? Susan, you

to always, as is metal that. Keith, trying what's and the volume with we're nobody margin driver predict frankly, happening knows

then So also built drops we But forecast. into have if than expecting, our it downsize. the we're more meaningful assumption that's

number some be Is statement? maybe would and secondary and would one be deflation things a fair then So metal like drivers. volume margin that

That's up, Yes, that's it That's be we've with could fair where And could be It this got range. a wide it down. in greatest leads such volume. uncertainty statement. environment. exists definitely amount probably a why the of

Thanks much. right. All Okay. very

you, Keith. Thank

you. Thank

Our next questions with come with questions. Please from proceed the line Bobby your James. Griffin Raymond of

surprised little and there But of questions. assumption first, where know products a that in specialized is for Good them guess, the margins. sequentially. down predict, the despite appreciate journey a I wanted Mitch, about what better guidance. but and the taking understand bit everybody. are ask recovery of Thanks detail morning, hard volume you little step kind of Always a cost to for see guys what's moving helpful admittedly to kind was that segment. in the sequentially lot metal inside around I the to to underlying I my XXXX. back is I there on the embedded I

each businesses? in a company business on kind at Can and rate. to talk So, those very maybe the journey and XXXX of you margins guys about that given back different recovering in to do the you be trying are the would for where high drivers just get able what you to the those of be used how kind is of margins

Bobby. morning And join Steve, then Good few make invite a Sure. well. I'll you but in comments, as to

a sure. little So, yes, it for is dynamic bit

to go those three businesses gains into we continue XXXX. We all expect strong and specialized and continue volume across the of as see to

some in We where costs, little particularly we've were China restrictions a we premiums impacts fourth also but when material as the and we labor inflation, working higher you lifted. definitely mentioned, in some COVID had bit had in had increased particularly been on quarter those, automotive, overtime the

large impacted for then us is employees who that pretty And in that there of to -- the the our to the much. to overtime we certainly led work, not rest surge -- there come of additional outbreak like so had and And had be country were some those.

So, was that a a bit there. one-off of

balance that. talked really and team a challenging there. that to But The detail in about with to XXXX. accomplish. XX% would We've progress overall, done I close to has go confident good a thing to in of about much don't we to but it pricing I say recovered continue ability XX% make we're we want we automotive in our in recovery, got in made job, recovery. come we expect the to too here, the it's the cost have good that I'd progress great say

low supply really as so levels the continue level well, age inventories high that to in very but see XX at see which for making year-over-year, is the the or and years be continued From good, in continues US. throughout chain markets major outlook production automotive around about were shortages the at right? forecast vehicles the progress, to X.X% progress. chain to There's labor OEM be supply It dynamic, rates

XXXX. So, major is just below XXXX XXXX, for forecast million. it's I good. that, the is back folks a the to kind that to at which But that look $XX would X% we still about year, if the production vehicles XX XXXX outlook actually million is of improving market three just down that I years in We think in X% see to growth next to remind forecasted for

So, below automotive I were recovery market. the is where provide tailwind we we're But still does the long-term a pre for in it pandemic. think what

strong a Cylinders, benefit backlogs seen we've I Hydraulic our in the think for there. strong business and think, I really that's,

We hard lead-times those for and fast, also is long as let although and let there. in chime rambling that all of up especially think you demand well. But outlook anything strong see really me three the pause time start with we in the those tailwinds for my see it's there positive Steve, us. businesses to Aerospace, I very

Good morning Bobby.

I to challenges, continue Mitch, as Hydraulics, and their year. recover hit we most seen it. continue of that we have think, production OEMs expect the In orders to the through you increase

will year. have of did that as Mitch with. hopeful a team of that said, good the we a And half carry into few operational has the that, we're job dealing on done challenges really the second

there So, in looking continues growth for air travel aerospace, recover. to continued

We until XXXX. travel business don't see recovering

types other So, performance but has alluded same definitely the times operation and the automotive lead short we're kind and long-term changes respond, some seeing look fundamentals Aerospace. that of, making the to things in as to of growth order challenging to the are Mitch up it there's tailwinds cancellations, chain, really and for back similar continued are of ramp there supply they there, across it's still kind to, as

million a on context below pre-COVID, million, $XXX it's this XXXX. And and to Mitch, two Thank you. I I'm a further, is to of just going there that's million just And asking just on $XXX well detail. $XXX period I going CapEx business, that in I on years at And D&A. little not maybe the thinking CapEx, come running in to appreciate capital have spending? the out was think catch-up we're guess a least year

more the the or the is we changed, capital to little a capital business of that have just of catch-up kind economy not So here going bit spend much, the be period are there kind a requirements side? as on has to where if improves, as

Yeah, see there's Thanks that. asking that's big that, a great question, for catch-up. I a Bobby. don't

kind constraining We critical been of any haven't investment.

we've to like, that had had In think fact, do. investment example, for some and things to IT we've our we those are critical that increase

to continue so. We do

I historically comes bedding use think biggest the historically, as well. US CapEx Spring in of

little little think we don't more can a do I efficiently. We'll we but capacity so, managing bit of to think in a continue differently. we done that do good in we've innovation. that invest that, a bit or job Not

be volatility of new automotive. has been impact as of starting in out less all there's been think so programs been And and would well. pushed one And then second that the I there the has some just the with part

going to frame. whole So but to it's the like just pushed out. It's it's get time change not going

double in just little get one investment change going don't It's time to frame you bit. a the So year. the

will negatively I see any stronger don't big back think to that as we will catch-up So probably environment, impact big us. surge CapEx, increase or we I our get but growth

of the I you. luck. details Thank best appreciate and

Thanks, Bobby.

proceed is the question. line Peter with you. next [Operator your Sandler. with from Keith Piper Thank Our come Please Instructions] question of

morning. Matt for is taking question. for Peter. on Good our Thanks This Egger

to just with dollars First compare what you curious off to can for versus we historically happened price we're what change? first would happens accounting commodity led the my you me, gross what Leggett And see to maybe one. now if decreases? profit see That's expect

we've for be of I Okay. as about talked can Thanks. part right, and it Good years turn of for piece. to part. LIFO in or think on, general, throughout has question. then over the most it amounts, last inflation And in I'll easy But couple the Susan Cassie, on occurred take the largely that but it passing we passing dollar successful the the

that's on had so our margin. a And drag

margin see in we I same our deflation, change, see customers. think that our but and as we We along a profile. to we big that see dollar shouldn't pass So impact

minuses. pluses There's some and

around we've basis, we we shape. sometimes reflect it dollar is to timing of same lot the Some should don't add as on we've think part, we're work. our and it kind have. thing largely particularly a inventory timing contractual expect most anything inflation But overall, They inventory how around to and stand we how well. to that or the--? of would on what been as you spin for agreements that, bit very moves in I see have passed on the of done a see on deflation Cassie, that little we've up commenting the what through Susan, And good of a high-cost that

is an the favorite LIFO directionally expense a would It's as deflationary actually predictable will, topic. in generate predictably, benefit. it our without in generate LIFO environment. fail, inflationary environment Yes. very

So, deal anymore. level, And don't to what that's just with expect. we to thankfully, have that high

chop then of explain the us the year-over-year you and starting through off. maybe Thanks. And segment walk Furniture to why Furniture can kind Great. in are volumes secondly,

mean Yes, last sure. new of in be across to over I have that we -- Steve, soften and -- year, I'll to industry. big we after in a ask Furniture Home year couple it's jump not really That's this that shouldn't really you dynamics. there. news. saw surge a the But in of beginning the really we saw

that the XXXX recovery being a then the recovering Furniture, really we see the quarter. soft, if strong which quarters contract started look had is probably where at saw Work fourth change three first after and the And business, so we in to slowdown in then of been

in the I'll been biggest let chime change But well. So, Steve, that's there. as you

from Home answer lower much, retail Yes, morning. Furniture much is the demand. a perspective, good thanks Yes,

in what drop, And inventory we to drop points high then in had further to So, earlier worked and of but off the half fairly level. XXXX, a mid demand to we the low and normalized XXXX return seen significant here saw and see led end those the hopefully first couldn't we even be expected. that's more we than which levels, start price some we expect to

Americas, on perspective. is return to residential that add a more And particularly of to And Work slowdown a you in then they're and little can from the incoming retail are lower demand. declines reporting saw perspective, Mitch the trends, of volume from surge Home worked really which bit and top now by contract way a office and as Furniture that of its that's that Furniture spoke the customers we orders. our back driven seeing that's office lowering to they said, level that And through,

Work Furniture So, impacting time. two issues are in those point at are this the big that

X% this if for America I was about this down which would remember or Yes. Steve, be North right, forecast, so year. for

Yes, X% or X%.

yes. Yes,

with with Home in fabric side before, along dynamics moves Textiles So so of And also as we've industry the our Bedding and mentioned Furniture. line largely converting business unfortunately. there,

see that, of component we strong industry into side textiles be by the geo be not is that But we does -- continue to what So, to go down. XXXX. driven and we as that see

Great. all. Thank you

Thank you.

Thank you.

with come proceed your Maklari the question. next of with Please questions line Goldman Sachs. Our Susan from

this input seeing bit questions. is puts and first Thank sense But on And a And in the about margins? My metal takes what across maybe actually you. inputs, us the upside, costs. can you a how the question touched we've XXXX? you're of there especially various give on the of for you're thinking

some I see it. Yeah, a moderating. we really bit across deflation see anywhere see in little we to Maybe of. join think in. Susan, of that significant we can a but I'll then fact, really to things, don't and that inflation I general make you Steve tie asked think declines board, But in kicking any comment the

so costs And for levels we little or starting different I commodity but neutralizing the anything? remains are or in just – down at to huge remain bit, huge, think – think part, anything generally are Tyson, I elevated see but it a chemicals don't large declines, you'd see come

Those re-fractories but our in predict said, the converting because Mostly significantly the been difficult and to part into everything same and cost rod, conversion not well. electrodes have just of that margins. we about consumables the of to why scrap But metal bit that's input as quite what you is increased a goes reason everything as Mitch, energy else costs, just talked little the else. costs, that the cost,

go it predict. to all difficult of increasing are overall input when items So into our those becomes even costs well, as

what certain issues, some will that see stable. there's it's of a costs but some I to and costs. of chemicals still lot energy global difficult been chemicals, the general types On cliff it you because exactly overall those but to high, said, of capacity as of overall, relatively the agree land, well. the in off with market of being constraints not same dropping those a moderation seen around in produce makes just Mitch, still we've where some But some moderation

Yeah.

Thanks. Steve, up change would don't but think lot specialized Flooring And & be that add? little I pretty more you bit a anything much Okay. of a can that that we holds across dynamic, in Textile there. see Maybe

or relatively certain said, of resins, chemicals other No. remain of of types signs at have few steel, just I are that reality level. talk turn point. but outside stabilizing, down, lot this say of but Tyson most into inputs haven't an the them at deflation a of coming would There's of things seen elevated we like we but seen

And think about uses there? Okay. talk of think there the have you XXXX? commentary other flow cash have is that which of out of or pipeline any to generate perhaps in this even together? we the on guide some about I the EPS cash one just ability opportunities of that And year then that small on the maybe money? side put more, things. the about Can you you is cash, did several And you coming acquisitions How how uses the when

in That's uses. Sure. a generation. come flow confident chime question, really you the great Yeah. feel But about first ask to Susan, And Susan. I then cash our Jeff, I'll and on the in

think saw think lot low, like inflation that. stability levels I we volume businesses, things this our And though as talked we You see we bit with year. about I even us a feel more of a and little

– good even of job the part has particular, maintain in crisis, the working in managing first and our management, done just to it improving capital, incredible done as – that spot. the as we've we a really, team pandemic continue So hit an receivables we in our really the

we demand second cash and from a standpoint. mill right how work us lot quarter got a out time to the with about of to year, margin standpoint, our in place painful certainly the talked – the through flow half fourth inventory down of of was it the an rod taking levels, from they but in bring slower and to the We the align can inventory particularly

So hopefully manage a we're to easier that position then bit there. bit a capital. be I arena, And little starting will a little good it in think working volatile really less

especially. So, I inventory, suspect

see less there. to volatility expect I So,

buying the other ended we noticed probably as down not significantly we're down payables surprising, and thing then And as were inventory, you less. the our year taking is we're right, that

from I think that. in capital manage good very to a So, a standpoint, working position we're

continue through we wish cash more company. While we had to they'll the drive volume,

in were where expect we pretty XXXX. to be with CapEx, it Jeff consistent And our mentioned we

And So, to let acquisitions time that plans turn funding Jeff, missed. the or think we focus repurchases have on over this don't it at I big you for continue any to dividend. I share me anything

good and Mitch Thanks Susan. morning

which you that would as cash Susan, I of and make. to the as well operating flow cash as our Just history the other our company's have support, ability talked CapEx look we we at a that the couple needed spend of we operating exceed dividend comments to flow when did out past to able replenish the of XX the about year XXXX. not exceed have inventory, with XX been was one that years in we earlier

a that we've to demonstrate trend So, able do so. strong to ability being got of

earlier, $XXX the mentioned reasonably side, CapEx as Mitch guiding feel there million the that we're with towards. comfortable And we on

in of acquisitions, our terms we on In spent $XX XXXX million acquisitions.

$XX You XXXX can number that XXXX, in expect XXXX expect you million can that spent lower definitely number we share lower And in on to to be as be and in well. repurchases.

year. well So, as as activity the participation in M&A we minimal share definitely discussed remarks, in the prepared upcoming as around repurchases activity for

good you Thank and Okay. very luck. much,

you. Thank

Susan. Thanks

no turn McCoy closing there comments. any time, Susan further at over for this the to now you. questions Thank are would like to back floor I

after speak again results. May Xnd report We'll you first quarter on to we for joining you Thank us today.

If in yesterday's questions, release. using contact press information us please you. the have Thank you

does This you. teleconference. conclude Thank today's

of your may the day. rest your at You time. disconnect participation for lines your this enjoy Thank you and