Leggett & Platt (LEG) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales were $1.1 billion, down 6% year-over-year, with volume down 4% and persistent weak demand in residential, automotive, and specialty segments.

• Adjusted EPS for Q3 was $0.32, down from $0.36 in Q3 2023; reported EPS was $0.33.

• A $675 million non-cash goodwill impairment in 2024 drove a net loss for the nine months.

• Restructuring and efficiency initiatives are progressing, with $124 million debt paid down in Q3 and facility consolidations across all segments.

• Strategic review underway, including potential sale of the Aerospace business and a sharply reduced dividend to prioritize deleveraging.

Financial highlights

• Q3 2024 sales: $1,102 million, down 6% year-over-year; YTD sales: $3,327 million, down 8%.

• Q3 EBIT was $78 million, down 15% year-over-year; adjusted EBIT was $76 million, down $10 million; adjusted EBIT margin was 6.9%.

• Q3 adjusted EBITDA was $112 million, down 14% year-over-year; margin was 10.2%.

• Operating cash flow for Q3 was $95 million, down $48 million year-over-year; YTD operating cash flow was $183 million, down $168 million.

• Net debt to adjusted EBITDA was 3.78x at quarter end; total debt $1.9 billion, cash $277 million, liquidity $748 million.

Outlook and guidance

• 2024 sales guidance lowered to $4.3–$4.4 billion, down 7–9% from 2023; volume expected down mid-single digits across all segments.

• Full-year adjusted EPS now expected at $1.00–$1.10, down from prior $1.10–$1.25; reported EPS expected to be a loss of $3.56–$3.71 due to impairment.

• Adjusted EBIT margin guidance reduced to 6.0–6.4%.

• Operating cash flow for 2024 expected at $300 million; capex $100 million; dividends $135 million.

• Restructuring plan expected to be substantially complete by end of 2025, with annualized EBIT benefit of $50–$60 million.