Leggett & Platt (LEG) 2 Aug 242024 Q2 Earnings call transcript

Greetings, and welcome to the Leggett & Platt Second Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Cassie Branscum, Vice President of Investor Relations. Thank you. Please go ahead.

Good morning, and welcome to Leggett & Platt's Second Quarter 2024 Earnings Call. the call Tyson Karl Bedding Talbert, Hagale, Sam President the Ben CEO; Products Manager on Textile Smith, CFO; & Burns, President of of me Investor today and Glassman, are and segment; Products Relations. With segment; Flooring Kolina Furniture, of the

section reconciliations. Remarks set summary press the the yesterday's strategies, results forward-looking may company of statements. information undertakes trends Actual update documents to revise events, being and follows: a expectations, and to website demand our agenda will any for constitute posted or trends. of events copyrighted today supplement address The answer as cover of along section information, we restructuring our to financial slides questions We of restructuring these on not additional broadcast will you've. This our differ and call A conference expressed update. XXXX, with segment Those on non-GAAP results call, discuss our our This & group is this call IR uncertainties, will be for or results website. or including a financial Ben available due call and the the including details, is current replay a and update our future this statements. Investor our is materially recorded number operating be or concerning for the and outlook without recorded Relations morning objectives, Platt details transcribed, risks may a that no Karl discuss and priorities obligation Leggett revised material. release and contain permission. and will

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

team hit May, role the with centered stakeholders, external outlook. My quick improved initiatives clear thank longer-term today. Good there business. our the of have accountability our spent tackle Upon call focusing transparent to identifying our late morning, you people and and in those returning ground a near-term amount around time I opportunities and wins and ensuring on projects, are for CEO running with for both to priorities significant to empowering the our joining and lines acting are and urgency communication of for underway profitability activities across a with and drive sense time internal

Leggett increasing the He joined years with forward. Sam of roles time of business each held already our and ago has has operational spent emphasize assisting will as our tremendous to near strategic want in remain earnings last improvements operational me well priorities. as Specialized with forward. segment. I I'm ensuring call Products that quarter's has company I'm stay we've our a business pleased team on that also lead the share strong on note, that to help to will continue focused with And that Cassie and the move in to to & I'd participate Furthermore, joining function. Sam call us Smith, welcome Products to calls will segment XX collaborating teams Furniture business. responsibility regular segment amount the the to efficiency be midterm the Furniture, Textiles management and on Sam participant IR President going these is a a discussed of like on within to within today. the priorities Home Flooring to Q&A decided the several of

opportunities. profitable margins our and liquidity, the structure As cost sheet optimizing balance are: administrative improving general for by our growth and and company strengthening priorities a reminder, those positioning operations and

we you decision last As our dividend. reduce know, announced to the quarter,

our that remain it foundation. reduction the course strength, was help maintaining it Directors will and of the Although dividend a of and We right action. financial our was difficult Board decision, to solidify agreed committed management long-held the unanimously

priority. Shareholder capital returns also remain an allocation long-term important

down paying to to businesses, on is frequently capital invest return the in repurchases more we to focus debt near-term utilize in expect share our our and to shareholders. future, continuing While

our work innerspring to The continue track, early the quarter, of there no toward ensure that innerspring all has restructuring the job this of restructuring production. schedule production some plan elements working are and completed and third execution a and initiatives. The process, through team during transition profitability progressing is are of We disruptions of other with facilities. In our plan customers improved on operational plan fantastic restructuring and spring done we improvement we exceeding ahead to shifted U.S. expectations. now will In remaining majority Spring first Bedding efficiency gains. anticipate innerspring the Spring. year-end. our that flow our of complete Products, X incremental into by expected we be half, facilities drive sales activities larger expect within improvements minimal Through we've to the attrition volume remaining through than improved demand efficiency future within anticipate We're our seeing earlier also U.S. in and

Foam complete should be innerspring well within are additional downsizing Specialty underway. We've operation process in completed We be and Bedding by anticipate are substantially we've year-end. by actions our that the XXXX. Restructuring end complete of small restructuring activities Internationally, facility consolidations still and closed Chinese will operation. X X all

In restructuring the initiatives Furniture, Flooring & on track. are Textile also Products segment,

end Furniture of Home essentially of Phase the complete, and complete is restructuring we to X our Flooring activity restructuring by year. products Our expect the

will in of up Our XXXX. Flooring the second activity half ramp in phase of restructuring first products

opportunity we've across As we a operational continue company, Products the small restructuring identified drive our Specialized initiated within and improvements to segment.

this team a operating that and returns Our administrative the We services. shared to optimistic the structure G&A we're profitability we thorough and review our manufacturing is structure second our general units efficiency cost and analysis of corporate completed working previously of the and remain across optimization Hydraulic Cylinders potential shared business improvements. from increase activity. In quarter, a we initiating about through

identify to greatest changes to the resources. organizational and working improvement, for organized are processes teams our necessary streamline further Now, design opportunities projects and

Foam higher-valued, path finished forward. innerspring investment is to remain business, long-term Components. We're and leverages ahead, innovation Specialty refocused the key Bedding, growth which in and right including and Geo in our Looking confident we strategy, products, our Automotive committed to target that Bedding our semi-finished

Our and capture to and healthy business further our remains additional products motors we in both geographic growth in lines has opportunities comfort Components expect growth convenience potential and footprint. we as Automotive and our expand product Geo such as business and actuators

currently each we're vision. we're rightful strategic a our and portfolio, how each if business long-term of review owner of fits the our ourselves diverse conducting asking Additionally, one into

future as continues. we portfolio plan As quarters, G&A of make emerging. We'll and our progress sharper restructuring and view our review, details share coming gaining in improvement and through work visibility we work initiatives, including in our operational the continue additional our analysis, is a we'll

mid future of Leggett and perseverance. vision, expect Platt fully the our next and sharing anticipate also long-term hard will you comprehensive and profitable. To that We an thank We updated for year. work more & employees, your focused financial be including targets more

are our long-term positioning Your success. company efforts for

Now key our turning trends demand markets. to in

Our the beginning XXXX and quarter. earnings lower second quarter sales of anticipated at adjusted were the than

and due we'd adjusted deflation. than continued and demand be expect debt expense, bad softer to year in outperformed Excluding reserves sales expectations. increased higher multiple earnings originally to now We inventory material have raw write-downs end and lower industry estimated our XXXX full markets

to weak Demand purchases. in as markets delay consumers discretionary big-ticket residential our continue end remains

XX both and harmed pleased we're the and United backdrop domestic level of playing made industry States many with a that third antidumping Against United participants States of financially believe from field the Commission Commerce industry domestic We of the the current determinations International have manufacturers. the mattress deserves Trade recently Department and regarding by into case. countries demand. year foreign and dumped U.S. mattresses Additionally, imported a the furniture bedding diminished stressed a have amid further market demand, consumer are low producers

triple of May, early mattress digits. Since both dumping orders published digits for the countries, mid-single X down XXXX DOC U.S. for ITC quarter X.X% and this The second has finalized in in the XX remaining has We and X estimate the orders consumption all countries from versus first September. expected final market are year. to final rates countries ranging half was for

volumes volume While Specialty attrition. be We units inventory resulting XXXX the buildup high including loss from and consumption down digits year year-to-date, remain customer expect XXXX sales still our likely below Products Foam factors, will to industry down single due segment's full the to have a landed of expect late digits. in import year company-specific is through. In restructuring-related mid-single being last Bedding still in half, we mattress worked levels, second fallen

offset rod applications non-bedding expected trade for planned are sales of impact sales partially the to Higher-than-expected attrition.

Excluding steel expected are to industry low the sales global automotive related mattress rod, driven be digits. The Bedding experiencing is by several to volatility, down double Products directly market factors.

global longer lines. than our combustion are programs resulted planned, in both and differences vehicles, combustion to and launches program While the shift leading in has EVs in electric to engine for utilized delayed time running internal internal geographic engine products

cost with the transition Europe challenges. to Meanwhile, North vehicles while grappling Asia, remains forward, has America indecisive. In surged and affordability electric is

exports, if Chinese will in increases and is new responded market driving tariffs, entrants market Chinese to new introducing imports. of this Europe the growth disruption. is Chinese the to has yet Additionally, Europe, be of seen pace by particularly but slow further

Light XXXX. in to down is digits markets vehicle production versus be major single low expected

assumption We the production change expect is vehicles. of related line outperformance. mix will growth previous products automotive our of unfavorable in electric our driven business the with versus This be largely global by Chinese to

and releases Finally, full civil sales expect our construction to single both We originally down than retail experienced have in recently sluggish low business civil the retail year project anticipated. has weaker construction market been volume and Geo be Components now digits. sales

operating most significant efficiency second earnings, this well and our maintain headwind recovers. I'll we'll year. call update pricing over drive review continue recovery to discipline opportunities growth to a to volumes quarter capture revised to the While foundation, margin outlook and the near turn profitable Ben details, low for in initiatives financial improve be to will the now restructuring to term. positioned With our the demand be as

Thank morning, good Karl, and you, everyone.

the billion, second price residential primarily material-related X% of $X.X were raw end from down sales declines, decreases. markets quarter in and volume versus selling XXXX Second quarter

segment loss a actually quarter Foam, expected The quarter. began to XXXX, sales back the in Specialty Products of which half decreased our Compared Bedding to within XX%. impact customer second we second XXXX, the in of

declined Excluding high this sales would change, segment single digits. have

sales & Specialized X%. in Products Furniture, year-over-year, sales Products flat in quarter were Textile Second down were Flooring and

market a million, concluded and conditions. loss charge. from existed Second quarter goodwill connection quarter an the current In of that EBIT financial primarily the price XXXX we second as in impairment the an result analysis was noncash decline with a impairment impairment of of million a and significant performed $XXX stock preparation statements, $XXX

in primarily goodwill other adjustments write-downs outlined lower partially down higher benefit. efficiency inventory restructuring volume, million, lower due bad was amortization Excluding versus $XX raw items second offset quarter $XX to and charge the reserves million impairment improvements by release, adjusted and yesterday's reserves, operational pricing press EBIT expense, debt material-related and increased XXXX, and

loss from $X.XX, a EPS per XXXX was second EPS On $X.XX. earnings quarter decrease $X.XX. share of adjusted a XX% quarter quarter Second were basis, adjusted an second of

term, near continuing prioritizing the always, In organic growth. debt reduction, fund we're while As on focused we're cash generation. to

of of $XX of second second the basis million working million, operating the ended outstanding. Net expectation strategic debt Our in quarter flow X.XXx quarter with improvement growth, hitting XXXX. an are priorities XXXX. at end in driven returning to to organic the offset through of capital shareholders for $XXX percentage million trailing the be XXXX. second This $XXX long-term quarter was annualized by cash cash decrease $XXX versus share to and including a billion, expected $X from cash EBITDA XX.X% primarily is was use the was with Cash dividends XX-month $XX quarter, funding to paper funding repurchases. In as total acquisitions of of million second peak versus operations improvement. by decrease leverage quarter. lower working points line sales adjusted and partially ended second in earnings, million with We quarter still debt XX commercial of our quarter adjusted of capital and We a

covenant cash $XX long-term for accelerate idle as target million reminder, more use to we anticipated our debt the along our remain begin of dividend from allocated $XX In estate restructuring-related progressing third Xx we toward ratio, covenant million total Xx below leverage to real favorable the the we leverage proceeds a of previously sales and expect XXXX is reduction. with calculation to publicly reported quarter, than our comfortably ratio. As and

million predominantly and facility. million expect to XX, still $XXX commercial capacity cash remaining million credit was repay to revolving June on paper under in $XXX of at Total X.X% XX-year of We hand notes of our $XXX in use our program $XXX comprised maturing million November. liquidity

activity earlier, now mentioned doing excellent With providing related an team an of Karl estimated the plan. We of XXXX. X plan. late reduce job executing financial run to restructuring annualized the we're initiatives run metrics million sales are As the some all on implemented that months our these now is will and complete, We estimate will fully by initiatives originally annualized be once $XX complete. sales on on rate approximately an an rate basis approximately basis million that expect $XXX in after impact less attrition update

noncash and $XX going associated with are sales we're $XX in also million, million, sales million and of be in million estimate EBIT million our costs XXXX, expect benefit The now of cash a We the XXXX estimate our of $XX attrition For second we as approximately and quarter. of perspective, initiatives generated $XX revising midpoint. than a This cost generate real that $XX well. of lowering our narrowing in an quarter, $XX impacts with believe $X in costs. In comprised through still in $X balance the we'd proceeds once and late reflects of costs attrition still XXXX. fully to realized are strong $XX million benefits and flowing estate expect will to sales originally anticipated initial changes sales million earlier plan, $X but in XXXX of adjusted remains reserves slightly Previously, EPS to will million EBIT in to change EBIT realized from XXXX. We million million implemented higher plan the realized we discipline. with of continued to be reserves, benefit realized XXXX estate are believe million restructuring XXXX lower operational bad pricing $XX plan of the $XX estimate now are the total of to million to track to $XX on by sell the $XX range, to write-downs during sales in or no partially in proceeds up benefit million sooner improvements expected. million XXXX. We're additional and assumed total second annualized million, were and million and inventory the volume, in from timing related $XX increased million related restructuring guidance the costs. our resulting restructuring plan quarter offset debt million Restructuring million to from properties $XX Real our total versus of to and $X $XX execution cash $X million lower guidance restructuring expect there in efficiency than $XX

reflects X% expected Bedding $X.X now the loss to low a to Textile are are guidance Products compared lower prior to billion. XXXX volumes our volume and billion X% restructuring to mid-single down and sales billion $X.XX to per to be $X.XX digits with and in Specialized of pressure. expected down guidance goodwill are down prior the and $X.XX Furniture, versus impairment earnings our costs estate The to deflationary XXXX flat digits $X.X low high segments single gains other digits a is Products, decrease guidance to charges, $X.XX digits. XXXX and noncash real midpoint of including or of share be prior versus the expected Volume our expected billion to outlined single of in $X.XX, low down expected single charge, currency $X.XX of in combined impact press at our yesterday's versus Flooring reduce across in be release. to Products. loss certain Deflation to sales

$X.XX Full versus per $X.XX $X.XX. share expected $X.XX to our year of are to be adjusted earnings guidance to prior

of As expected our X.X%. versus prior EBIT be range to X.X% to to full our result, adjusted XXXX a margin X.X% year X.X% guidance is

to are efforts. beginning look the We management, day benefits the on effective those we're you and forward this updating I'll call in through work diligently progress to coming and strategic further with these each working over profitability turn the improve our of to teams cost see Our to initiatives comments, quarters. With Cassie. back

you, to Thank ready Operator, begin we're Ben. Q&A.

Instructions] Our from Maklari coming today first question Sachs. is [Operator Goldman Susan of

back, Welcome Karl.

Thank you.

you good speak anyway. I to But think it's back. be good to it's to

It's to back. good you to hear these on happy It's calls have to good back. you again. We're be

the talking are of that really at good areas lot job, the things Leggett. and a happening think, did You focus a us I of through

As positioning you've business about several on priorities you're of think things the especially as quarters? and at this stepped about thinking you back How your you're the can the that what talk are the focused this point? role, into clear you next about

really terrific restructuring have through remarkable It's size be just with more urgency lacking improve time, to to is they've lift to now. with it a is and supported really heavy restructuring that's and really important. wins We're really transparent important probably time, and you incredibly U.S. is of a in with in environment that's -- have to also know quick the It's that as done Yes. important, think together. At job I the get and plan community people to what where we're Staying they're tackling is the make our you, all profitability. as when same this activities. phase the that about those but we're on and the blocking establishing is. do of investment employees and we're Spring never just that plan scope than the first focused the our to and kind that pleased of more that also to truly sense a Tyson our with tough same transparency quickly empowering to at And important. be of is really team required decisions a can't accountability continue in maybe the his always was

stickiness the share customers responsibility of important and really kind us and for Phase us. that time, involved our kind they staying customer through of with going forward. And talking X innovation relationship analysis to same innovation. The at always always, is the our that with in of product So relationships prioritizing

of portfolio lot spending time kind -- Leggett we of on be management remain a in X does review time, it's dealing the should in. from with What's growth in look positioning? trying that now? same and our a of We're businesses in really that. time spend profitable accelerate we to a terms what of What also we balancing like then And businesses what at So that. lot the years

to with question, to more But done pleased on. was for of more going It's interacting I So long-winded, there's team a thanks Susan. occasion. lot been typical there's lot good rising work, sorry, there. of work come. I a style. and Leggett the be I'm couldn't the so But really the how kind but is There's

No, that was a Bedding good together. coming things Very more maybe specifically. shifting answer, and how hear great to it's to encouraging. are And

moving You in some parts mentioned there's been there. that

course, some a can the the the bit some Specialized share and efforts products talk revitalize Maybe with Of new a loss was in of through of other regain of Leggett's your the and help you that there customer piece. Foam about to going customers. overall gain for of we especially Foam existing those perhaps come What some and momentum? how over Specialized mean within shift Bedding piece? and maybe as that think And these the time that those things going about mix volumes together should to how

a question. you're Well, complex at asking a master

So therefore, at off. it I'm handing a master

team remarkable. easy XXXX through the manage the was in through literally are in ask been Susan, right change. answer all And life. to that I've what to industry going retrospect, before changes is you of the you, is industry, and unprecedented. of now many of I I do, compared XXXX But listeners I'll Tyson So know to bedding rate the managing that the the now They're around my terms tell question. through right through know that

to please with that that Tyson giant said, all of So try ball. unravel

the question. I Sure. appreciate Thanks, Karl.

their right with of projects. long-term start time Let by that the go working spring innovation projects are to teams segment, a opportunities. volume few of extremely group percentage high our critical true it's but through saying with with busy now our really launch several things And really on resources high our most on and are a are spending and and across specifically committed our development I'll customers working me you.

critical is how like we So our and this another. service partners. And both our -- they're in on this depend Karl customers. one really said, with and is function work critical really, a for We really us together

we've And Karl extremely it's encouraging in of Eco-Base labor the Right Despite this so on market. And really projects really with challenges work thing for this helps this getting term really that ComfortCore would now, us outlined, and even in bit a is like them. ignoring not foam second these talked really a be, any it the encased is the unit for and projects. competitive. just category, production. thing. critical. these opportunities that is past of and And And and And encouraging tough is competitive. for it's we're current through to always sign are little a calls us that a And our really make some we've sense in some our automated about manufacturing the efficient both short customers Core us opportunities innovation

and And that so our them chance gives to work we can to tough tools a in that market these a some help really we've us customers with share. regain some even environment are

the So than And some really, finished mentioned the several this are and some for an mattress customer. volume our us and loss did the work result that, earlier of did label well. And hard term selling you we ECS, important without accessories, last in have with that, the a can seen teams components projects, you we customer expected lot ECS a of and at second have from things of short then commercial improvement quarter, customers. really base, the see those But it's as in specifically year-over-year, we've quarters. diversifying private say I'll for and

some see in back the of benefits So that And half the been we've that year. lot of the a through effort. of more we'll seeing grow

Specialty the some we've there. work when to And pipeline. With We of in Foam. more in of be do and that things ups will some there said, the we're also lot that impacts have a downs middle restructuring

part good add, really, working been I'd Specialty be we're that come has really they've team sharing that some And development of making. And recent Foam, our as with and go, of busy the feel are couple the So trade that and we're it been excited about. some a of about products Peterson there customers as at -- chemical will also well. they're but on some they've our progress hard things projects excited about, with shows

progress well. as good a that's So

all to together, and think market I but that guess long-term challenging that's I all So in long that some overnight, and of know a that pay dividends will will working us really with things of encouraging it's new customers not tie our for developments exciting them. I this us are answer, even a benefit and us on some that

Okay. of I demand there. came and They That's you I where even seeing at FF&T. in and then bit in basis the one a was was the had a nice ahead a to sure with points touch was spot we about ability about think They even I they're in want just talk great volumes And get success color. make were. up Can quarter, tough those it, continue level want with that in margin bright on it's to the environment? just and Their very this execute down we that that more to and this XX year-over-year, to margin. because

are the you'd, his But Those don't Sam, appreciate don't job. why Yes, Sam, a Sam well if team businesses really great doing -- you are managed. respond? accolades. why you the really and

it. Sure, for Really Susan. Karl. Thanks question, appreciate the

over that commodity wild that but be some have and last always us these we've leaders. really the drops teams good, great even the businesses. say costs, things seen volume, taught just and spikes X we've They've freight these years, me across let been manufacturing great off, with leaders better all rates, costs, to in got the first So some

to quickly we're in really going from to where we decision cost costs and and term. to like to learned that cost very in are go right teams deliver go done really to learned some perspective. where themselves with have Flooring they of the efforts difficult control of Home think we've hard what their a how all believe that example, We've deliver with what to these now on For kind we're our through ourselves, on. working really in make and and to conversations We we gained I margin mitigate really near as lot vendors. really a our we how essentially in how finished learned control increases in going customers hard Furniture. We've our abilities of the of could are to volumes restructuring the and learned with where And analyze to some they confidence to anticipate a things, need

I our what's this on pricing see growing deliver are us and that allowed really to these a So great environment. discipline think abilities tough confidence you great, in really

overall bottom we're becoming more focused I better more leaders. So line, agile, think and really business

to we're use So on upside. I positively start think the going able learned do to better, and when volumes be getting we've to these skills our grow that confidence

to a we're a really us lot the from lot that looks magnitude better. because perspective, appropriately speculate early to handle position the but a better handling I it's like in too what downside made think upside

James. coming is from question Next Bobby of Raymond Griffin

good to Karl, And again. to talk you

goes ways. It's same, Thanks, Yes. Bobby. both

to and initiative. you visually. IR very It's restructuring you details kind slides laid the to thank all helpful team the on of Cassie, the that in And out for see

it. appreciate I So

You're welcome.

of I guess start kind me, Europe. for need maybe shifts And the first EVs, go with others, to going for adoption in debate I those? U.S. investments a Auto is to faster obviously opportunities lot still kind some up different COVID in the the is between on the a inventory impact. in slower from the how in Karl, just I maybe of might of entrants areas, levels where on is And going where guess was maybe there there the business unpack Leggett Chinese where positioned or the of Can you maybe be? those and dynamics actually,

challenge. markets, automotive Yes, the a of global a question. Bobby. is many Thanks for of our Like bit

demand said, region shows the but EV from the for in markets perspective down very X%. on we global a business. good forecast probably industry what in build not us, a that's adoption so As And different, is it good global depending in. you IHS is total the current Overall, major operate you very that know, as

We appropriate. probably of readjusted in as than probably There's as shifted it We've current think again. more down that will guidance. our our XQ a be hockey that's a in embedded and stick release thinking,

because we programs vehicles of certain want we adoption with acceleration biggest, we teams there's than take of it's a mechanical is lesser those where BYD ICE we position. Chinese, take on Our down our sales certainly But are originally we've elongated on them strong an have of in legacy and number that very the the do in EV our are at anticipated less down, lumbars, make which profitability a heavy to it but that rate because very, content there. When others. to dollars And a weighted forecast in model. do very margins dealing I per models, markets market have unit profit the sales EV clear each on content are

in lesser dollars So in many profitability price, really programs. selling absolute those higher of

So it's complicated.

consumer North As think, years. XX.X the don't same trained anyone regards to to time, The really vehicle. autos for wait are life What's the average But I been longer post-COVID are the I normal? -- grow. a knows. America inventories has is to in inventories in starting auto think even at U.S.,

So historic high. that's at a

the day, how That's vehicle but Chinese at really but affordability the new down strong, So an trade of what's issue. affordability of in is some problem. a hellaciously it's Europe with out? electrification, Really, the sorts upstarts the too expensive. happening with end all to that probably an there's Buying is

earlier. that unravels. hands we'll as think into I said see our well, plays whole how I the But thing as

curious I'm the that compression. again, some the appreciate good. dynamics kind segment. And into kind of saw one Very I then metal dovetails margin But there. that. Bedding just maybe there's of

your coming back would, had really is there spreads high to and us Just some a been or come kind the some just what closer this some view, that normalization, more like tariff maybe we're anything normal? in some we protections of than either typically for to to in to about? imports caused has in dynamics the of think Or changes there they

me clean can Tyson Yes, up.

is Furniture, probably domestically more normalization. or It's not it's just of change not just a I driven -- shrinking lack it's a just and demand demand There's all at by the markets, just think normalization. protection import spread all. Bedding in but across that obviously, no of

talked steel Normalization, excessive difference Yes. Karl. it, compared history the I we and prices of that late some Europe. to and market we about at probably and year. accordingly And with you last between remember there totally saw was U.S. least our businesses an Bobby, in adjusted agree

impacts. already a with had lot seeing totally coming price yes, downstream but our the pandemic just businesses, of normalization COVID of I off through agree we kind normalization of started kind Karl, of the and So

one that. Karl, then Appreciate maybe, more. And

probably the to Just I to or where given little of -- this the have the your you markets 'XX Like optimization. would was what's talked of P&L. about there that, hurdles the just this the on back, end in a on remarks a get on how prepared been line kind of nice doing bit go 'XX rates over president, portfolio kind margins impact where that hurdle these good and macro were do or you had I raised levels? in portfolio context is guess are ask Because when do of on patience wanted you guys the of just and some kind some optimization a remember maybe I that? debating

at run to through in Kleiboeker, -- good and question. do that. We Bobby, remember certainly There all helping frame time was was that Yes, of it. how Ryan strategy involved who

And Leggett at done. So them we're from work out. profitability potential forecast perspective, what from forecast them is to is growth years -- we from trying to of and trying do perspective. A to these but today, good fit lot we're businesses, a look X a a

I under our we divestitures any potential divulge smaller, an until LOI. By the focused history, future. think expect more don't we're a you in that company should

a So to there's lot activity. come, there's of more but

I appreciate the it. during Best of year. the luck the here, rest and process of

Thank Bobby. Yes. you,

coming Securities. The next Hughes Truist from Keith question of is

second that Building on that some on more in likely Or half this year, moves. seen if probably year? be answer, last of the occur? could to portfolio we you next think see Karl, in that Is something fact, in do

to get I'd of processes. just early through these a think next long probably year. takes It some time

businesses our geographically, are multiproduct. of complex Some very

of So say yes, I'd next year. first half

this is like you I've at went in And through XXXX, seen the on point. very much table one the everything

some have managed. other significant to that the core healthy company need are be some forward. are are good alternative There Automotive, tell the businesses going Bedding growth. are the comments, there's Those to continue businesses that being lean Geo prepared is Textiles we're we We generators. into, are evaluated. well our you I'd that of going and businesses well that to markets managed, really say some great that Everything to businesses performers, those other In and all businesses Textiles, cash

those are. fit, and balance screen execute of the is So there's that. a potential ability our to whatever in markets all of Really, growth

little Okay. the little Furniture was a a and question earlier, bit, in the to Flooring down volume was And But Flooring. & Textiles, on that Furniture, particularly not bit. price down much quarter, the the

you Just If there? portfolio is pricing? is about, what's that some market the just there dynamics change impacting kind talk Or price? pressure could of and that's

with call need aerospace of pandemic because over had generally, to Oh interesting across But pricing But through deliver is are They post what's passing the general comment a board. prices automotive. the most out a the I an to couple time and commodity boy, portfolio. hard do happening Keith, businesses, all it's customer. falling is trying question, of inflation cost cost to reductions, and

time demand materials. through that a they So it's difficult pass meeting frame when hard kind them time were for having in of to

and of able Now with that retrospectively a They've businesses have kind some gone prices. up of done they've demand. both back those keep to of job better customer being increased

we've correlated But of margins commodities those highly to company, both businesses. generally X across being the in softer. So enhanced it's

that and Okay. And I to? what Home be referring is Furniture, assume would is the that you're that Foam --

bit little bit A of a Textiles. little year-on-year. of Bedding Yes. It's Yes.

from [Operator Sandler. is Piper Keith Instructions] The question next coming Peter of

to nice me, for hear again, Karl, your And voice.

some answered areas But you in around wanted Susan's at this think question I other I So the of already focus. ways, to your angle. from question to it look

in, the recent do when company? and you've think have Leggett you from away & issues been years As the you've biggest in against Platt challenges what been come

with because continuing to certainly urgency Yes. to having and staying involved I away, of it's really question an been haven't interesting sense a decisions. That's an ability relationships. make But transparent, I be and think

focus. not I laying our tough, think areas environment, of tough mean, are the kind environment And that teams I anybody. a on a operating key those blame in. are tough it's it's of

And and to tough the as trees. able see think to it so force that's it's be kind much Sometimes, -- stand back just the as of from I anything, Peter.

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been So whipsaw the tough. has effect

issues future it's think the and trying perspective. a guide dealing to with So at from then I just hand

bedding. think always QX? unit respect I Okay. guess in guess, -- opinion And mid-single-digit you did And it with the better, it seeing anything on do far Has then what think get seeing? think I industry QX, worse? there people about, you I declines. your are was know you got you're been I talked throughout And I it so

of half quarter on was last first in quarter, changed kind the tone same. a from a our of year. had call positive more probably second the units back of sequentially, think this -- we'd aggressive I more have is What's

it's industry tough. going and the realization tough, has think the come to continue be it's -- that there to I to

the trying cost bottom. kind election of attention each way. Based that and very really feels Advertising, affordability time the advertising at history, that uses really when this a tease issues. the favorable industry of is nothing's the about industry. bouncing there consumer's to keep years get are about it to We some difficult changed. availability So not advertising, phrase bedding other -- are And along the of on

we to the full -- changed back in why mid-single half soft update half. digits, year the to easier little So down that back we've a that be comps yes, that's get kind acknowledging our bit of expect to the say

And also, want to a I Okay. follow-up margin. on ask metal

quantify today sounds pressure way to the a of there you now than couple the guidance? it XXXX? that's is seeing margin impact what metal then versus like thought Is So where to months margin little your ago. And -- any metal more a that

decompartmentalize in say compression metal margin XXXX, it's degree. imputed certainly not I'd XXXX. But that to significant. don't as to it's Compared we to than -- guidance, regards yes, the higher that And no,

Okay. Fair enough.

Lastly the Automotive. on

calling from out the dynamics So of I EVs. various and, headwinds some guess, Chinese demand on entrants disruption the around

margins As segment the Do think for more transitory. both? structural do you Specialized they terms those seem as more or to a you those, think being little about or challenges bit maybe in about and not perhaps sales

is go our it It's car American change. a transitory, that affordability faster car I auto recent global does rate this year remember a so business and affordability Automotive I affordability, statistic. agree affordability not at this in very small But That's probably lack back interesting, is they're or think really North that business. a purely to than issues. And an time consumer that's sold any not of history. And issue. far a preference much

on of bottom more line pressure line for it and is So top sure. a

on is basis, better continue smaller position of Our because as I the the be well first really to it. top earlier, some line of more value I whole kind I the but we're The a But chain. maturity of job then said of terrific is just our do teams absolutely line, the those programs. absolute maturity executing. of, going line the vehicles, across those percentage time to said the because placed Automotive a And the competitive well lack as programs probably bottom of on fluently, I said on basis, the those. top placed We're market it dollar with of less, of and an guess,

of a Maklari coming Goldman question is Sachs. Susan from next The follow-up

have X more Karl. is.... just One for I you,

in conversation. Ben I'm trying get to this

ask get get can Ben Ben we we'll We'll one Ben -- Well, in it. too. Okay.

you. Good. anxious. Good. He's Thank

Yes.

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on It's positive. yesterday formations The a job news of isn't concern.

heading recession. health Some consumer is into but economist, of an of The I'm believing we're that certainly the -- not yes, the some weak.

for that you As -- are the softness the some and top leg a as lot the those the of bedding, softening. recovery to speak customers. of on a pandemic of of of certainly The know, we our read-through feeling time first seems post bit little K K-shaped seems economists be ultra financed. We purchases see to, the side premium premium of a can

really rate none and think that what differently, household that's said formation, and So changes bedding -- confidence. that know don't adjustment, consumer I of the anything happens moves. Fed you the drives makes That changes. household a Fed until And until

Okay.

following on too. that, maybe And Okay. then up

do about industrial consumer, those how we about also lot You've tailwind some the been could at about headwinds that a what macro talk -- restructuring year, help And as businesses move mean relation how for this of it business? the working macro think coming of back the but a could through to in to you does well? this having Fed in you. lot think of with do start you half plan If the

team these Absolutely. Sam's volume assets Tyson that through always what's now. really all same really And the It thing. spring you appropriate We happening what quick. Volume bit Bedding. businesses a and good really, good, know very to plants. have That's does I'll through many in the comments some volume a And you little our is gets what. characteristics. the ago has now, put really tell done what of

at would So welcomed this be needed is and point. volume

Yes.

Ben And ask Okay. All right. now question. we'll

I appreciate it.

we There go. Okay.

in that's that a tough? things about little on of actually you saw a there stay sources quarter. if just able working talk even nice you be some Ben, in think going continuing Can despite and the everything the benefits to bit how this improvement capital you about Okay. get to

Sure, Yes. Susan.

really been I now. We've think while that down. our comes of most the from benefit a doing bringing for inventories nicely

some Our that it has good a And job. improvement. teams doing on provided are and really focused

done in expect capital a I as job. the we of us an million the second seen more. was yet benefits $XX we of We've a -- But slightly, think don't through the debt, back good lot working And go nice. year, from half quarter, the dividend we've reduce the our we about, reduction, point cash also I'm that up which the debt the did haven't free think in make paid sorry, that we to second in whole out even the really, earnings quarter, start will we will -- quarter. the to third though I'd the cash dividend impact flow. that the debt. One dividend as drive the start reducing I'd We will thing majority the I'd first And really we quarter second lower of use in declared help talked quarter.

higher from was perspective, still monetizing that a job of estate a really burden, last properties. is I'd So these have a bit cash of great some our teams obviously. And little done the then thing real mention

$XX million So estate I'm generated properties But not generate half the we're $XX we estate proceeds first real accelerate in the there. can seeing year, restructuring-related or sorry, -- in year, million we some where project. restructuring to the to properties back of the of $XX and were related proceeds real million of the the from real that of half in the estate

on cash the So we these progress our generation that back real make start to half as feel about debt now reduction. good we and in estate sales

Yes.

to million And you're the that with Okay. going that? being about cash all $XXX operating Can And about following maintain headwinds $XXX down up guide volumes what's facing. you taking guide to into even on these that? flow talk that, talking you actually weak, the incrementally, ability maintained the at million,

Yes.

-- things business think, good here there's we've about couple we'll volume that, utilize as cash ability being well. will focus our recently. a then continue benefit business, to I of to to the be ourselves capital. really that, of a working challenge had drive seeing restructuring there, really just move them is the the we for able efficiently start big think The said, I but thing. Like through we'll and talked that do we've to here and a to on I a on And continue focus big to

Yes.

guys. luck, right. Well, there All good I'll end Okay. and it

Susan. Thank you,

Thanks, Susan.

over Thank like for the turn you. closing to At Ms. to back floor this time, Branscum I'd comments.

your for you quarter. and in interest We'll Platt. next you us joining to Leggett talk & Thank great today a weekend. Have

Ladies concludes participation. event. and for you gentlemen, This today's thank your

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