Leggett & Platt (LEG) 2 May 232023 Q1 Earnings call transcript

Greetings, and welcome to the Leggett & Platt First Quarter 2023 Earnings Call and Webcast. At this time all participants are in a listen-only mode. A brief question-and-answer will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Susan McCoy, Senior Vice President of Investor Relations for Leggett & Platt. you. Thank

begin. may You

thank quarter taking conference and & in Platt's first call. you morning part for Leggett Good

On the Steve Products the call and Hagale, CEO; Director President Jeff Executive today Senior President segment; Furniture, are Mitch Executive and and Products President Cassie Dolloff, Flooring Vice Vice and Branscum, and segments; Specialized President Beddings CFO; of Henderson, Textile Vice Tate, Executive Products Manager of IR; me. today and President Talbert, working Tyson and of Strategy XXXX of Business segment's joining is working in be recently the us Kolina served the roles, various in and Relations, time first Investor Intelligence directly and for Leggett and Cassie team. will has Bedding with most who Kolina President with joined

to newest We have IR. the Kolina of as member are excited

IR financial contain including the call yesterday's the along expressed set information press cover portion financial not any broadcast We that questions of call, Jeff on answer outlook demand is release PowerPoint portion our IR being segment call summary discuss this This agenda conference start is non-GAAP information website in details. Platt and a have. summary release This is recorded for The available recorded copyrighted will details a we discuss the the this and documents to we is and XXXX, yesterday's operating and with with slides call our will made without follows. transcribed, reconciliations. Leggett will points group you & Those supplement of and the permission. main or material. the trends, of press and address may Mitch be our from for replay website. A as of posted morning Leggett's results for

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

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

I'll Mitch. to now call turn the over

and morning call. participating thank in Good you our quarter first for

decreases current consumer our quarter its last quarter results. EBIT environment anticipated, and was results the negatively were expected, were million per $X.XX. Sales global versus impacted $X.XX quarter the Sales were down results first share than on first These impact As first record in $XX better quarter and earnings versus the but declined was macroeconomic year. partially cylinders. X% billion, hydraulic added in and demand volume lower from residential by The rod margin and price EBIT Acquisitions versus steel in lower end raw year, business. XX% driven decreased sales. primarily currency offset X% was from volume, prior impact. material-related metal aerospace in automotive, growth continued XXXX to decline our markets, lower volume softness by and

of the result impacts, a XX.X% X.X%, of margin EBIT was from these first As quarter XXXX. down in

versus Earnings first XXXX. decreased XX% per share quarter

First than were quarter anticipated. earnings better

was XXXX. million. bad Those largely to and several million debt lower $XX insurance compensation, and other lower acquisition Cash pandemic-related year cost contingent to the with $XX purchase from prior flow first quarter expense, price versus liability a associated reduction operations reimbursements. million, a $XX factors, up with included were expenses While expectations, in lower operating totaling claims due were results incentive other medical line favorable approximately our trends,

Our with results first better than full as uncertainty. continuing quarter we expected guidance balance range macroeconomic unchanged year remains

to of markets. businesses, and portfolio navigate diverse help employees and challenging position us ingenuity continue of our the Our solid financial agility

market of of on appears the with levels results versus at Moving half consistent the those Sales U.S. our stabilized XX% in outlook. were have quarter in in experienced XXXX. bedding second segment Bedding to and low to segment down Products Demand XXXX. first

least was of half at XX% We U.S. first the Spring the potential expect in the domestic modest with which of demand the year second to comparable the believe Volume half the market. to down mattress for in year. current the through in remain levels is increases we quarter, at first

demand production business in increase with in consistent lower assumed U.S. XXXX, output we inventory is limiting year expect relatively after demand align Although to spring to levels. last our

XXXX, production to Similar steel approximately is expected historical remain to below rod levels. XX%

across believe be it we should However, consistent relatively quarters.

to We demand. expect trade higher lower internal offset consumption

cost As and expected, narrow as moderately begun softened. to has prices increased scrap metal margin steel

steel margin the mid-teens metal to it's down to market, we be predict difficult While changes versus in XXXX. anticipate

also reduce we metal pricing actions higher to and across rod conversion in to current taken support levels elevated segment However, brought demand. to levels costs. we needed the line expect back to inventory have historically The with due margins remain have at those

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

from to sales share practices demand. components. loss inefficiency from finished in of material decline, Improving from the brands native the with challenge earnings customers outsized consumer a a privacy small The digitally demand from number shortages chemical the and performance on surge a that priority. laws constraints two of top during servicing market emerged remaining amid bedding we is to impact driven shifting pandemic and changes specialty and general goods of foam About of challenges some as thirds customers by the remains cash the in result of those prioritize relate primarily low

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

our strong has by a specialty team supported Our foam opportunities technologies. of pipeline

will our highest specialty management. confident focused segment in improvement foam that also improvements sales in and and We material level and of are business We on are for margins through process profitable material placing the both on driving attention growth equipment drive long-term our changes. remain

consistent part XXXX, with year. in Specialized our growth automotive completed major X% of of for the in April quarter last Sales forecast forecast first versus segment industry increased global quarter. production in Products shows Cylinders the Hydraulic August acquisition last XX% The XXXX, from in approximately markets in

make supply automotive bring impacts expect and geopolitical move dynamic across further expect business continued as to we to XXXX. we macroeconomic different automotive chain, year-over-year, continuing progress in volatility is Cost improving recovery While and industry regions. as remain production through we our

equipment is cylinders issues impact expected and at order Supply construction our hydraulic have segments strong to business, In to expect both customers' labor throughout of production. XXXX. the Market remain is strong remain accelerated recovery strong moderated, continued and quarter. levels. is handling of but heavy in in in Demand to expand assemblies recover end chain tube duct in our ability and welded strong material the expected remained the demand Demand pre-pandemic XXXX. by backlogs production products fabricated we seamless and XXXX. demand elevated market still throughout for End-market levels to Aerospace

Sales slow versus volume in down the Products our the Home converting. XXXX. Furniture, fabric also demand modestly remained demand segment Textile end XX% softness high outperforming Flooring with This and impacted quarter furniture during quarter middle in low points. & were price first

improving soften. demand While as levels and slowed across in exposure soft we demand sales and remain the inventory reduction expect residential remains the through demand furniture products inventory half Work volume high, of continues. the as lower to XXXX quarter market for least consumer continued with contract market first at first decreased

of XXXX. demand at to the for remain expect levels We remainder these

improvement market Flooring and home residential housing due In improved, products, has a remained demand but Hospitality slowing demand activity. pre-pandemic lower soft remains to levels. below

to the for components, construction civil over the support expected years. soft few seasonally demand is in quarter solid, spending particularly first geo remains is market. Infrastructure demand help next the While

are are We improving on mitigate and impacts that on things can businesses. we the focused the control continuing macroeconomic to our

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

enables and Our allows economic company to us our financial success. discipline periods to uncertainty long-term us of for manage withstand

year, turn our to Last opportunities first ESG you Jeff, that materiality sustainability Before report. we conducted drive most issued we third In our of the mid-April for would on I call of our assessment update to some I our will year, the over company. to value activities. like identify this

the collection efforts a continuing management actions our and broader to and move and skills communicating into our of we support year XXXX, assessment a and contribute including standards enhance ESG reporting process, efforts, heightened establishing targets, meeting assurance We're roadmap improve we dedicated in data the culture. gas and businesses, cybersecurity will advancing inclusion, to diversity through controls. targets, to emissions goals advance continuing As company-wide Thanks our limited including third-party emphasis and infrastructure ESG of systems data proud include in our our social developing publicly critical and equity and sustainability and modernizing advancements activities data, climate-related progress supplier to made key our that to this goals, our teams. our ESG greenhouse our of and our upgrading our labor obtaining of on have us and building

navigating macroeconomic while making capabilities significant in a these progress life, are to bringing environment. We challenging

Jeff. now call the I'll turn to over

we everyone. of generated cash $XX million, generated lower a In Thank earnings. from million cash the XXXX. good of for and than you, quarter, quarter use offset Mitch, million much in capital, morning, operations working reflects This first by increase $XX partially smaller higher first we $XX

of is of environment. to adjusted to XX.X%. a operations quarter XXXX. We sales $XXX from the still demand elements manage with percentage ended closely million We in Cash annualized lower all continue in $XXX to capital working be of expected the working current as million capital

repurchases dividends, Our and with They growth, funding cash. of funding include paying for unchanged. priorities use order acquisitions priority, remain an cash long-term organic available share strategic

first yields price, our dividend of dividend Friday's of X.X% higher closing In per annual first February, At the than dividend of among based kings. indicated our the the declared $X.XX an $X.XX X% quarter highest year's or dividend. quarter yield Directors is Board of share, upon one last $X.XX,

EBITDA of outstanding November significant quarter We was to adjusted with commercial first ended twelve-month maturity of $XXX trailing paper debt X.XX end. billion, Net $X.X XXXX. times no until million total including quarter and at debt

$XXX million at hand our in million under XX, comprised Total remaining cash credit million and revolving liquidity capacity on March of $XXX $XXX was facility.

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

are Flooring to Mitch markets. XXXX the $X.X & single $X.X versus Bedding billion across digits, down XXXX single billion down and to earlier, reflecting our to guidance guidance, XXXX, XXXX range digits. down be down moving to year to single digits. is low X% at up high continued Furniture, stated be up full low With macro midpoint our Now guidance expected digits, or unchanged. remains Products Products, X% our as Textile uncertainty Specialized sales single Volume Products expected the low of

Cylinders Automotive, rod expected Components, and bed home furniture, furniture, work continue in and and Geo is expected of in growth drawn Aerospace, wire. should declines deflation reduce to assumes Volume approximately in of XXXX guidance growth is The also to expected impact digits in and XXXX. add X% currency in mid-single the completed acquisitions combined steel sales to adjustable sales Hydraulic with trade sales

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

some per EBIT Rod deflation. our be in range share margin to lower in guidance primarily X%. midpoint expected metal reflects $X.XX. XXXX our our pressure and X.X% The be is to are business, year earnings pricing volume Steel in XXXX full of to the from of expected margins this $X.XX businesses range moderate upon Based framework, to lower

guidance interest of net million; Earnings and approximately per XX%; year and depreciation $XXX million; share rate amortization assumes tax diluted $XXX effective million. $XX full expense shares of of a fully of approximately

we to $XXX For for and versus share million dividends $XXX acquisitions million, approximately and prior repurchases. approximately of $XXX the year spending expect million XXXX, approximately capital $XXX of full of minimal expenditures guidance million

our we still in remain as In efficiency to the The closing, focus our discipline. disciplined capital Leggett approach. our and operating team customers, macroeconomic while challenging, on our agile the well as continues working around is world environment

through progress, strong creating navigate to cash for our and value is positioned uncertainty us we our Leggett our on market a As shareholders. focus confidence to continue with in enduring keen fundamentals generation, ability give long-term well

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

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

question. Goldman Instructions] Please [Operator first line comes question with proceed with Maklari Susan your Thank Sachs. you. of Our from the

Good you. Thank everyone. morning

morning. Good

the My Mitch, there. is question, segment on in first Specialized

this all that across the further of you next? what three gains and for continue bit saw you're into nice thinking those segment to of from talk recover those end businesses. markets margin in Can perhaps we some about balance how that maybe even through go lift of of You volumes mean will a as as year here? the a And

with volume question, great much. all gains Hydraulic Automotive, Yes, about Aerospace so Thank and we Yes, seen across XX% Cylinders. significant businesses in had in XX% in Susan. three you up X%;

continuing but or Aerospace. just see to XXX% output we're of of XXX% in impact Hydraulic production take area. OEMs starting So that Automotive life. dynamic, great recovery to the place, we've normal but to Cylinders we're the a improve. coming to improved Like in that quickly, post-pandemic, And bit seen particularly remains course, comes back nothing And see in seeing from to really

in The outlook is little X% for Automotive major or up production volumes a more. about markets

We volatility across that in regions. and holding continue been for I to X% few to see different range, we've we next expect overall, some that X.X% But think continue years. to the

last was get XXXX. we the there below production in tailwinds time, But increase. for As that production my view, really is where about some talked still won't it we to until think years over We XXXX. in provides next several outlook

in long. the Hydraulic in Aerospace, really us getting both heavy I or about think, in Similarly, to said, And of for equipment I levels and getting back construction see sort XXXX. as pre-pandemic material see handling Cylinders levels we pre-pandemic is backlog to industry the back

benefit Absolutely operational So forward. Automotive, that talked on on our an We've going segment impact U.S. increased progress particularly here. in have making the And some about that margins will there. will significantly. we're the volume issues,

I opportunities, think we improve frankly, in efficiency. those businesses three our to of all operating have

So into – up levels, this back we to make get that we'll and be our able trip. historical think, margins to I to really like closer

I you there anything missed? Steve, that would add

You the there, long-term if only backlogs did Mitch. a we certainly, go I pretty actually stable. Aerospace, for growth. been back to there have pretty good They to are would job say

continue certainly XXXX. long the for see that five to and growth Aero we should and term, seen last for has year-on-year through expect growth we quarters, So the that

us early back Hydraulics, still into material backlog just shifting spending is this should is and there infrastructure then possibly side on Hydraulics, something the And last starting significant of there, And to to through that's year. which year handling, next hit. really then Construction

along to going and mentioned way. expect on tailwind Fairly as be to the we things well. we're a margins as these businesses. this, And So, doing that through optimistic as improve

X.X% there? months second ago Okay, XX.X% bridge of guide operating to longer-term to that year so. to back thank roles you is, out is XX.X%? question you. two to kind help the what to the And year, given do to see Mitch, guided us I margin That's very relative the this for you can the will get us, expect range helpful. And which then this you've my what guess, or you that X% But play that targets? you end What put to at that are different to to of those come you've need in getting there, businesses segments in

far. I Susan. by say is the question great another would Yes, biggest impact volume

And Automotive still talked Textiles – Aerospace and furniture in there. much of as fortunately, volume and, and course, rod Specialized, down, And least so, in in not both home pre-pandemic down. Geo of spring down volumes see, then course, it at improving some but We we it's quite as just of furniture we well of in across in below units, stronger about, Flooring too. there, norms probably as side. see terms in with even rod, Furniture, & Flooring mattress trade work Bedding volume

be will the biggest volume So, driver.

of a have a drag We've before standpoint. impact been Right? along cost done pass percentages. with job the but of a margin inflation margins The our has on terrific talked from our a about me just has commodity on drag teams increases, it come percentage

levels. to our costs for like the Specialty provides help We've bit our we little and to and continuing through also continuing optimize to business think work do have in automation. efficiency think in talked to I capacity drive us, output targeted us will Automotive. back get reducing improving a those I our opportunities things But operating about Phone

those the us. always table for think on I are

the add that to discipline, I list. think, pricing our I would Maintaining

terrific teams to but be we've we've done as think will time, gone inflationary gone a as I through lessons learned job continuing to this hold the we've on important. have the that that through

continuing capabilities. less And to our then value and we're at we limiting provide things historically, today, more fixed sure our maybe provided but look value that that evolve always make costs

typically drive differentiating a our little with long new higher in with come Our to bases innovation, think with and it ability ultimately, the opportunities our new deliver then margins, I term, provides us right? it's that customers. will products customer has bit And to it.

from on with are think, market can't that can broadly, big other the our the the volumes my things while look drivers we control us, I all So, make really those right? doable looking more for are that have We macroeconomic perspective, that improve we for customers. those progress but also opportunities we're to for

I'm Can the you. helpful or to has more so very been there industry, on that's Thank here, the in in is are squeeze cash events Mitch. one cash how end thinking capabilities even of in color, bit month just the focus you which what's being bit liquidity. up currently a the more with and last weaker Okay, reflected maybe you going talk banking a in generation business? things about than flows the if

priorities And And any bit the allocation? also you're about uses the a more the how up priorities how cash? of coming there? those you're just for leverage about With thinking target thinking recently, capital for key

Okay. Yes, thanks, Susan.

Well, for cash continue think, in many with In to have years. we're We're short, great better our ability place do year strong has very cash for not our in think stable question. to coming working a our really much confident I I into been the managing priorities capital. a job many, changed. great have Another inventories and deliver of They use flow.

full and here. let me the to question Jeff, let you will But you, I turn it answer over

positioned continued XXXX. year, into to have especially off Mitch important Susan The going Susan. I to an half team that demonstrate Thanks, capital inventory the us back where has here. side well even element is and on going good what of the morning, Yes, think, last working exactly is latter Yes. Mitch, I there, the think started management

on lot gives ability our range in focus generate articulated flow working $XXX the to million million. $XXX that to sharp the us capital of So we've cash a confidence here

exceeded flow years, do as If cash dividends investment that we confident our our XXXX. in you ability our in XX very are past CapEx again has to recall, and XX well – over as the our in

Our maturity of revolver a not until our XXXX. us debt is gives and million due flexibility lot of November $XXX next of

a generation allocation, in able traditionally flow our cash Mitch in So we're downturns. from consistent. as a position mentioned we capital perspective, been liquidity have really to still terms it's strong demonstrate economic very and again and of And good

the very good be something minimal to We're year. in. very dividend have well confidence to to in during that ability conservative Our repurchases able of acquisitions we and as of is as the fund the course going be share terms

we we've have part target, your externally on a not if appropriate question But a we been net we at Second yet target that this target of terms point. very leverage debt debt in X.X the leverage consistent basis, basis of would an be here to – said were you consider. still around times a total on recall, communicated

net X.X – So on us long-term can basis times somewhere debt you long-term expect to from a below on a for standpoint. a be

That's you. Thank very color, Okay. Jeff. helpful

Susan. you, Thank

you. Thank

of question Hughes with Our Truist with question. comes from Keith the next line Securities. your Please proceed

Thank you correct? to heavily Is talk bring demand think and products for you channel your most below on components. of you to inventoried would would inventory. you. home running just a while down Could couple little a business, A be furniture are more Furniture the you'd that In assume that questions. refer what

lower the I then And that's let down. jump the – higher. retail; coming I'll in at and market. to mean started the such there resulted those the in talking think But inventory market coming surge a They're get high channel. about they're throughout Steve, it's pandemic, is inventories midpoint to we I you here. They're think right. probably of Yes, in the then at and after backlog down I eliminated post were

it's So sort demand. of having on just a weight

the as and outlook of in pretty increase volumes go the the we been is levels, we'll we Bedding. into environment, production think steady improve to half continue it's it like back will I year. low that at But talked about the start a a from inventory to bit see

fill to like you'd details in? other any Steve, But

Yes, not much more. too

something more inventories in say. kind then would I think certain than have and And a remaining range, lower there. normal little levels indicator retail down in were sales the the of there. high dropped April as manufacturer I an March are wholesale to areas

rebound but essentially... year, have So little we cautiously worked later That's a are a to for are the those be bit to in through. optimistic inventories going

Okay.

over a the bring in that shift and in not of at inventory market? me Bedding lot Let down to you levels channel. producing inventory are Or But demand? having Bedding to are you your

That's will answer. want question. if great to I love to a Tyson know

situation were in Good to good wasn't sure than the just inventories making quickly. started that were excessive higher support down shift after a pretty as inventory the demand year did have but of customers. morning. in building in Last it we XXXX, part levels we was we our needed last to of We place

through So towards constrain levels. we the last course the production But really, as the pretty year did demand the place. we a good up below end even our of in of ended year, we got year the low

back chain produce a And product to even we demand And to actually, make in consistent the certain took first to have inventory the year inventories ended get we didn't And had days has cases, quarter, maintained steel when levels. feel moved level, as and at full more the as to pretty through we've actually specific comfortable. shipment place our in though that We a to just well. categories even we through Sterling, place. we've a above good sure value out

at to whatever we flexibility So for be. just feel have point, needs this like producing we good demand

year. Okay. final the down it down Bedding. one quarter was were much The were first that in and Spring of just U.S. question about And XX%. They units on last

I have market, there? you happening to what's the zero. have about thought Can of come that closer talk would would flattening down the Given

last we the Sure. quarter year, the downward are first on about trend. Really, still if we of think

market. of business been first the level demand for look first in the the but really, highest stable. second Really year from and the through so year internal last year year, the quarter the both even for as And we has pretty the of this end had was our full quarter at the quarter also that we for

it's we So quarter the been after first pretty picture. year, a consistent really, saw last that in downshift

Thank you. Okay.

Yes, tough at time. caught so this the comp

Right.

Okay. Thank you.

Thank you.

Our Please line next with Raymond with of James. question. Bobby the proceed from question Griffin comes your

Good Bobby. morning,

to Thanks talk kind bit questions. versus your one guess, environment little for first a taking about of of when just my I last. view Mitch, spoke our the today we

quarter we delivered some when kind in this some year the a came ago? but the things read left Should in extra it that, Or than spoke guidance? just the that guys today You months conservatism baking cost of few into same. maybe upside through the of level that favor, the environment tougher in is of is an we

great question. Bobby, Yes,

has out and Bedding I our uncertainty talked in us demand is everybody it's last But that in is think improvements concerns And Specialized. about recessionary relatively with levels in a being substantial call, the but has of Certainly, lower there. is something Furniture, a there's going after we at into see to pushes that, so but pretty – that more as banking be keep maintained about as it earnings environment, just and crisis about we unknown, when the or consistent right? talk stable there we and consistent. saying think that we've I it relatively

the give else it's don't really an in. and I We'll have came feel those since from the pretty costs quarter-to-quarter, those economic QX that. online. with perspective just that of us in changed really varied that we was that of a operating still on just quarter. fairly out that of, hey, as we we've probably the Everything like range uncertainty They sort non-operating up issued a benefited a our because helped were the So think in really has that's view We of mentioned, I our costs but there our broad first guidance little impact of bit view consumer, us much think guidance. but outperformance initially

just a maybe you're then about the seeing ticked the spending can And standpoint? versus little bit, we I started CapEx a little a how midpoint out what up you year their talk just guess of Okay. from bit secondly, capital

Yes, change. really, we've through. great allocate question. It's able a eased chain big constraints our bit some of just it – moving make able But we've hasn't to really and changed cash. supply these that not on to that how some it we get the And have more seen progress a just projects them been it's

So we of just have list. have getting that those be progress I quarter several pretty our items first we made would – a in last than We're think on over in list consistent think the the I we moving quarters. CapEx more

we little a guidance it so $XXX give ourselves in range was the to it thought there. making appropriate And to between on from somewhere million, million $XXX

it'll the little out play over a So we'll but see progress. just still it we rest of bit make more the year,

quarter about teeing is a the at I the year EBIT Or mind? for think still XQ Okay. And in the up we for then or the guess, Jeff on do within be to the models the lastly guidance? for when look we quarterly year we and keep watermark me, expect Susan, should another basis, is guide low just there

Jeff. I am sorry,

sorry. from been margin I'm standpoint, That's a little a bit

Yes.

We little expect quarter half in said. we that's the first than the do second first we stronger to of the be expected, bit year. what and back would quarter similar expect in So came of quarter then we improvement a

earnings to that's relative the year. similar into quarter so development, quarterly with to comment then made the just quarter the relative move will and quarter second follow fourth be the of sequential improvement of sales, we margins And from thinking third as cadence I first about into seasonality to the sequential quarter. you back half and a second the, quarter first So bit think should I normal

forward. luck of going Best here, Okay.

Bobby. you, Thank

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

for Thank the Good everyone. taking morning Hi. you. questions. Thanks

characterized as want but and industry know short-term of discussion couple the just I'm of you've commentary and residential the been chatter I curious in the does that I for the guess it's saying of I there this demand or a stable the there if apologize kind of beginning the nature the things think seeing months. markets, So down in two over be But weakening stable, I a last last of of since to months, lot you're seem to the hanging months. two if I question, last of you're on narrow end kind are to even the year? around

I little on But detail stable. home Steve and I'll pretty think dig Tyson, a we're furniture. you let too that saying into on is more

Hi, Peter. Sure.

There but quarter in where in the downs the total, over things. with the quarter end first through pretty line of what been year months, the second saw we has the it's year. saw from For we been last much ups and of some

of March, April last anything just It bit a the like had saw too falling end within of we that it March. nothing off where a where things bit see significant. or a kind a but end the it of but reasonable range than year soften that, wasn't or trend of softening did continuation it's of the towards of a softer been was Towards a been, bit, over still cliff so.

tough of really to few kind seasonality the in looking And the November some and are last at of year for weak of looked which comparing October, as it patterns the this weeks at said we've of we've always month we'll range. also back but same little it at months. that for do feel been least of year, like a where and kind anyway. really, last It's we with is And while, more back April a normal in get

watch and information a where more of of continue we'll we'll ring nature, it's of goes. but not seasonal we type same too industry to but lot that make been see We soften, it's start to it. it a So significant, think of

helpful. That's Okay.

I on it's material particularly about Bedding just or price wanted guess to are most raw understand the some thing the least they're us emerging other declines. The deflation the perhaps was segment. Bedding, Maybe ask you I significant? within of and where focused help where the significant declines could

Peter. Sure,

I the the point think part deck, presentation to deck changes. of slides the you I'd that organic and include the that are volume

you that can there. as stand areas of the a it part think see I price really changes. couple of There's out

last moderation the was hasn't you last And the couple Since specialty down. of really moderate, it of steep costs early years, year. in the if then, be would chemical in over first XXXX, the seen been back a The peak foam. they've as been cost late think we've part but coming period

at I up costs being about system its way historic we've And a pretty pretty but down this inventory chemicals both it in going quick before, manner. moved high think makes in still levels. and the customers overall, going publicly see we'd But talked chemical foam pretty through our and to specialty quickly

the and reason that's that's we've where first. change, that's So biggest through why come seen the

Rod Steel in about time be there would area last demand first you if biggest for robust of and year or environment this year, second a think rod. the last quarter trade The pretty was

trade. comparison And in were sell big and it. for to was what products have of just softer softening had in that the first we tough some the market we prices for the need pretty so It and was for we selling, a we the quarter pretty a there seen this the in year,

from but than the in of just second would far be a total area categories, most Bedding so There's a the And significant those the significant standpoint, mixture Group. other in product within less the of terms two deflation dollar change. total price that

we but the – down do to are look sort here. standpoint, if Steel not the of we bit levels see see Rod rod at indicated a So the prices that we from

billet is up. right, basically the and mix that impact of higher because of sales, shows Some

different of That's a look Yes. about sell that we Mitch, category. it And just does Steel couple think do great get products you because talked Rod a quarters point, little confusing the a ago. because at within when we it I

or the within the billets. to as last Sort that we pretty of fewer an of sold we there of And there was will big the product. called year. a semifinished products rod have was a pickup businesses cut that first least trade sell our bill of that tons of option offset quarter rod preferred of option And lower-value sales in this

properly, like, And the it then shows just were line sales just foam demand It volumes the deck. looks I guess, if in reading a year-on-year. it in were Helpful. Tyson, flat the the XX%. Okay. maybe, the And looking specialty the down or I'm at document,

imply down XX% foam? So in does that were prices

going Its there saw selling to market make customers. like remains things of what and The did we're the lot mattress level, year. digitally some toppers, rod. like a the mattresses. back of especially most in within there native the is up and lower challenging accessories like we where But what segment last is fewer focused with we different that. volumes of But It's we that Roughly – are mix kind foam. to It flat. but were specialty from is difference that products, pillows value bedding

would and teams lower a what volume. is what can, it job but are selling the doing product difference up of making than value normally we was sell the So that a they some good in

Makes sense.

having was banking some customers' one and Susan's orders Okay. question where and concern down who with of wanted are we a tightening of of liquidity, get with the standards. more ask, around reduced liquidity Leggett's inventory. your I particularly but maybe your some and question about And small tighter smaller seeing some more hearing draw and any then lending to clients little no earlier as it standards they're the crisis that lending customers, risk small cautious? related of to Certainly, companies last to you concerned your around Are

so manage think, every good to them, of for become from bit impact I limit, you some when pandemic question. good what and that that a and day, pay about March great But sometimes what side And process we really the I'll the XXXX part in they credit managing right? to any delivering chime are sure really, to as sales a we do we've to credit have flexibility. the we to best Yes, can kicked and maintain we make our little if about can we customers just but attentive on we in it's to talk we've a – the and of managing been for our we're Tyson, can do developed feel that where volumes. see and

about Tyson, volume? that? on any think you impact And what So do

do significant, been It with that but a process tight or some where to too are some And for Mitch, it's couple that especially deal it the to of what customers we'll do Yes. make But of more the longer I you way. have we watch hasn't said, had probably getting probably sure can right a it's reality if we more near years work it's watch of something we'll been be with. in that it like out term, is albeit, the seeing stays demand closely, is, just a cooperative of a it environment now. kind to we something do like just the see closely, more we've having to plans that of think that

Yes.

feedback appreciate very all the Thank Okay. you much. today. I

All right. you, Peter. Thank

you. Thank

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

to on situation. which Peter's one to going ironically Thank price/cost of wanted you. back the now, is I follow-up questions

You you're price, in to about the of seems Bedding. quarter. mentioned some getting as the you ability Specialized, get that's to one, But little starting continue working. bit to are of It first you which those see deflationary think that pressures in in more a like

time coming businesses over about through as that some on will think then costs think segments? how and you bit, to two, and flattening there ability hold updates And price down we initiative. the do that in this out of flow different and any maybe Just the a

question. great Yes,

we right, you're make are to on cost recovery. continuing So Automotive the progress

from, about XX% it's about target, recovery now. little to things a I as right, of But change. we've think, a think moving bit I we've gone XX%

but multiple could still a remind future. be that, making that increases. And in It cost ways in reductions we have price in could progress. are through reducing so just to it And be way comes go, the

about – but feel good So progress our there.

environment. a some those a but bit, not of this trends through radically. been we've great managing team And have down The inflationary talked little as about done has inflationary job today, of coming back

inventory. that a if a effectively with need – we think those There's contract customers it's been we've be do. so based. portion, such that Spring about reductions, particularly course, our we And Bedding, U.S. and the the price along is managed pass business to And way the we large in fair of of in which probably our in

and on that's show been more fair passing But those we, our And way just bit, so whether think, a less will margins. comes little good of through reduce and down very like there's we'll around a process very there, down, the as some products. right? up drag really I It's leverage us. And a do deflation history in that for commodity or

costs the to – fixed probably we are at I think more And as there level. Specialized, be. the pricing is I a tends think input little bit the higher see that

dynamic little we'll a to there. it's of So well. been that see, benefit as bit bit little a provide maybe Hard still

Textiles And those and job businesses, of our good then Flooring you've those some around basis a more pricing there. our little on pricing a to done of and bit & particularly some more discipline holding are Furniture, near-term things,

mind a inflationary about fall have time. downturn, would concerned when which really in not we I'm So earlier the been my – big on

Now go it. But can manage it we things seems some some continue of go to – to I these down. moderating think up like it's through and

other we consumer move issues or that consumer starting from And terms you from bit and your customers not but to are think about on And talked in was on April. out your willingness or going Do consumer or some the some there, of as into they're further Bedding come that maybe one items? that That's which a of hearing holding is last is sector. in of these influenced well, Okay. out of just March you that cloud businesses helpful. to horizon in other you in what back banking question, sort any softening and then the was Bedding, their by not watching just in and spend out ability late go the on confidence and as

in we've precise think pretty Bedding And residential bit across product I that back which saw consistent. been probably bit but furniture better answer would sense. that a little – bit home seen don't hiring is a Tyson, to, well. little the some think but wish a markets, as you come in back the I well, the of I of it's optimism makes many know, think question, I think let our little of totally more we I up I market, – as And But hold Susan. great I in That knew a And year. jump example, the a the half with for think I

Yes.

quarters question. essential I else I But to also a inflation continues don't long-term talked our their been. And impact durable they continue about relatively greater One spend they situation lines big or that we've to are our in within that four can really feel about but we've Mitch. levels customers pretty than – we've watch The have so, about and have the think it thinking the still want consumers dollars. great all has thing continuing a and one day, now the it. time the every the about of had But where the sticky especially shocks on up. consumer have think the are low a of to to and push and answer, overall, been stable there probably of we're good just where would all to out economy buy that just the additional be goods it's we something had how pops just just I that has question. it's purchases, banking time, health business

last guidance add We don't I there's than anything think out I normal is Nobles. really some there have the point, would Yes. thing big And question. that this negative just broader at but see because that's the we that, why our

color good Okay. and luck the you everything. thank for Well, all with

Susan. thank so you Okay, much,

back question-and-answer and Thank Ladies final floor I'll any turn for Ms. our that gentlemen, the session. concludes to you. McCoy comments.

joining talk for you today. quarter. us We'll you again to Thank next

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

conference. Thank you. This concludes today's

time. this your You at Thank disconnect your may for you lines participation.