October 30, 2023

L&P Results

LEGGETT & PLATT REPORTS 3Q RESULTS

Oct. 30, 2023 4:10 PM ETLeggett & Platt, Incorporated (LEG)

CARTHAGE, Mo., Oct. 30, 2023 /PRNewswire/ —

• 3Q sales of $1.18 billion, a 9% decrease vs 3Q22
• 3Q EPS of $.39, a decrease of $.13 vs 3Q22; 3Q adjusted¹ EPS of $.36, down $.16 vs 3Q22
• 3Q cash from operations of $144 million, a $78 million increase vs 3Q22
• 2023 guidance lowered: sales of $4.7–$4.75 billion; EPS of $1.45–$1.55, adjusted¹ EPS of $1.35–$1.45

President and CEO Mitch Dolloff commented, “I would like to thank our employees for their tremendous efforts in what was another challenging quarter. Ongoing weak demand impacted our Bedding Products and Furniture, Flooring, & Textile Products segments but was partially offset by continued demand strength in our Specialized Products segment.

“We are lowering our full year guidance to reflect continued volatility in the macroeconomic environment, continued low consumer demand in residential end markets, and the modest impact we have experienced so far from the UAW strike on several North American automakers. The UAW strike had minimal impact on our Automotive business in the third quarter. So far in the fourth quarter, the sales impact has been approximately $5 million, which may not be indicative of future impacts. Due to uncertainties around the duration and severity of the strike, our updated full year guidance does not include impacts beyond what we have experienced so far.

“We are focused on anticipating and adapting to market changes, improving operating efficiency, driving strong cash management, and engaging with our customers on new product opportunities. We are evaluating opportunities across our businesses, including further integration of our specialty foam and innerspring operations, that are expected to support improved profitability, a strong balance sheet, and continued shareholder returns.”   

THIRD QUARTER RESULTS

Third quarter sales were $1.18 billion, a 9% decrease versus third quarter last year.

• Organic sales² were down 11%
  • Volume was down 6%, primarily from demand softness in domestic residential end markets, partially offset by growth in our Aerospace and Automotive businesses
  • Raw material-related selling price decreases, net of currency benefit, reduced sales 5%
• Acquisitions increased sales 2%

Third quarter EBIT was $91 million, down $22 million or 19% from third quarter 2022 EBIT, and adjusted¹ EBIT was $86 million, a $27 million decrease.

• EBIT and adjusted¹ EBIT decreased primarily from lower metal margin in our Steel Rod business and lower volume in residential end markets. These decreases were partially offset by lower incentive compensation and lower bad debt expense.
  • 3Q 2023 adjustment is for a $5 million gain from a real estate sale within our Bedding segment
• EBIT margin was 7.8% and adjusted¹ EBIT margin was 7.3%, down from 8.7% in the third quarter of 2022

Third quarter EPS was $.39, a $.13 decrease versus third quarter 2022 EPS. Third quarter adjusted¹ EPS was $.36, down $.16 versus third quarter 2022 EPS.

DEBT, CASH FLOW, AND LIQUIDITY

• Net Debt¹ was 3.15x trailing 12-month adjusted EBITDA¹
• Debt at September 30
  • Total debt of $2.0 billion, including $171 million of commercial paper outstanding
  • No significant maturities until November 2024
• Operating cash flow was $144 million in the third quarter, an increase of $78 million versus third quarter 2022, reflecting working capital improvements partially offset by lower earnings
• Capital expenditures were $22 million
• Total liquidity was $595 million at September 30
  • $274 million cash on hand
  • $321 million in capacity remaining under revolving credit facility

DIVIDEND

• In August, Leggett & Platt’s (LEG) Board of Directors declared a $.46 per share third quarter dividend, two cents higher than last year’s third quarter dividend

STOCK REPURCHASES

• Net issuances of .1 million shares through employee benefit plans
• Shares outstanding at the end of the third quarter were 133.3 million

2023 GUIDANCE

• Full year 2023 sales and EPS guidance lowered. Guidance does not include impacts from the UAW strike beyond what we have experienced so far due to uncertainties around the duration and severity of the strike.
• Sales are expected to be $4.7–$4.75 billion, -8% to -9% versus 2022
  • Volume at the midpoint expected to be down mid-single digits:
    • Down high single digits in Bedding Products Segment
    • Up high single digits in Specialized Products Segment
    • Down low double digits in Furniture, Flooring & Textile Products Segment
  • Raw material-related price decreases and currency impact combined expected to reduce sales mid-single digits
  • Acquisitions completed in 2022 expected to add ~2% to sales
• EPS is expected to be $1.45–$1.55
  • Decrease is primarily from lower expected volume in our Furniture, Flooring & Textile Products and Bedding Products segments
  • Includes anticipated gain from net insurance proceeds from tornado damage of ~$.07 per share and gain on the sale of real estate of $.03 per share
• Adjusted EPS is expected to be $1.35–$1.45
• Based on this framework, EBIT margin should be 7.4%–7.7%; adjusted EBIT margin should be 7.0%–7.3%
• Additional expectations:
  • Depreciation and amortization $185 million
  • Net interest expense $85 million
  • Effective tax rate 24%
  • Fully diluted shares 137 million
  • Operating cash flow $450–$500 million
  • Capital expenditures $110–$130 million
  • Dividends $240 million
  • Minimal acquisitions and share repurchases
• Implied 4Q Guidance:
  • Sales: $1.09–$1.14 billion
  • EPS: $.27–$.37
  • Adjusted EPS: $.22–$.32
• Prior Full Year Guidance:
  • Sales: $4.75–$4.95 billion
  • EPS: $1.50–$1.70
  • Adjusted EPS: $1.45–$1.65

SEGMENT RESULTS – Third Quarter 2023 (versus 3Q 2022)

Bedding Products –

• Trade sales decreased 17%
  • Volume decreased 8%, primarily due to demand softness in domestic markets
  • Raw material-related selling price decreases reduced sales 10%
  • Currency benefit increased sales 1%
• EBIT decreased $13 million, primarily from lower metal margin and lower volume, partially offset by a $5 million gain from a real estate sale

Specialized Products –

• Trade sales increased 10%
  • Volume increased 3% from growth in Aerospace and Automotive
  • Raw material-related selling price decreases were offset by currency benefit
  • Hydraulic Cylinders acquisition completed in August 2022 added 7%
• EBIT was flat on higher sales primarily offset by consolidation costs at an Automotive facility and the lag associated with passing through raw material-related pricing changes in Hydraulic Cylinders

Furniture, Flooring & Textile Products –

• Trade sales decreased 11%
  • Volume decreased 11%, with declines across the segment
  • Raw material-related selling price decreases, net of currency benefit, reduced sales 3%
  • Textiles acquisitions added 3%
• EBIT decreased $9 million, primarily from lower volume

SLIDES AND CONFERENCE CALL

A set of slides containing summary financial information is available from the Investor Relations section of Leggett’s website at www.leggett.com. Management will host a conference call at 7:30 a.m. Central (8:30 a.m. Eastern) on Tuesday, October 31. The webcast can be accessed from Leggett’s website. The dial-in number is (201) 689-8341; there is no passcode. 

https://seekingalpha.com/pr/19515358-leggett-and-platt-reports-3q-results?mailingid=33195773&messageid=2900&serial=33195773.1278

October 30, 2023

Mattress Recycling Update

Bye Bye Mattress tops the 1.5 million mark for Connecticut mattresses recycled

Sarah Houlton

Connecticut, US – In the eight years since the Mattress Recycling Council’s Bye Bye Mattress program started up in Connecticut, it has kept more than 1.5 million mattresses out of landfill. Placed end to end, MRC said, the mattresses would stretch all the way along the US east coast, from the very north of Maine to Key West in the south of Florida.

In the last fiscal year alone, almost 200,000 mattresses and box springs were recycled. The recycling rate was also increased, to 75%, with 3.75kT of foam, steel, fibre and wood being processed into new products. More than 24kT of materials have now been diverted from landfill in the eight years the program has been running.

“We also cultivated more participation from mattress retailers and other types of businesses that have large amounts of mattresses to recycle at once,” said Dan McGowan, MRC’s north-east programme coordinator. “The mattresses we collect are recycled locally, providing jobs and turning valuable materials into new products like carpet padding and a variety of steel products.”

https://www.utech-polyurethane.com/news/bye-bye-mattress-tops-15-million-mark-connecticut-mattresses-recycled

October 29, 2023

Klaussner Assets Headed for Liquidation

Klaussner Furniture assets to be liquidated

By Larry Adams

October 26, 2023 | 11:16 am CDT

The disposition firm will negotiate sales with Klaussner’s existing customers, who are already familiar with the current models and styles available. In addition, SB360 will expand outreach to other national and regional furniture retailers.

Photo By Klaussner

BOSTON — A leading asset disposition and advisory firm has been selected as the exclusive agent for the disposition of finished goods, work-in-process inventory, and raw materials for Klaussner Furniture Industries, Inc., Asheboro, North Carolina.

The engagement of SB360 Capital Partners will aid the wind-down of operations following the closure of Klaussner’s facilities in August.

Established in 1963, Klaussner Furniture Industries is headquartered in Asheboro and operates multiple manufacturing facilities and distribution centers across the United States. The company offers an expansive assortment of value-driven furniture products, including sofas, recliners, sectionals, bedroom sets, and dining room furniture.

SB360 Capital Partners has a track record of successfully assisting companies in various industries, from retail to manufacturing, with their inventory disposition needs. The firm’s direct furniture affiliations and extensive furniture experience will be pivotal to optimizing the outcome of selling Klaussner’s inventory. SB360 has worked with many well-known furniture retailers and manufacturers, including recent transactions with United Furniture Industries (Lane), Thomasville, Henredon, Drexel, Broyhill, Art Van, and Loves Furniture.

As Klaussner’s products are highly desirable, SB360 will negotiate sales with Klaussner’s existing customers, who are already familiar with the current models and styles available. In addition, SB360 will expand outreach to other national and regional furniture retailers and wholesale distributors. For inventory and merchandise inquiries, please email info@klaussnerliquidation.com.

“Klaussner’s products are sold by major retailers and furniture dealers across the country,” said Aaron Miller, President of SB360 Capital Partners. “This is an opportunity for those retailers to expand their in-stock Klaussner offering and provide customers with a value proposition that will be meaningful as we head into the holiday season.”

Prior to the  company’s closure, Klaussner was ranked #36 on the FDMC 300 list of top North American wood products manufacturers with $347 million in 2022 sales.

https://www.woodworkingnetwork.com/news/woodworking-industry-news/klaussner-furniture-assets-be-liquidated-0

October 29, 2023

Recticel Results

Recticel Trading update third quarter 2023

Regulated information, Brussels, 27/10/2023 — 06:55 CET, 27.10.2023

• Third quarter net sales decrease from € 160.2 million in 2022 to € 132.3 million (-17.5%) in 2023
• Year-to-date September net sales decrease from € 447.5 million in 2022 to € 398.4 million (-11.0%) in 2023
• Net cash position: € 155.6 million (30 June 2023: net cash position € 142.3 million ; 31 December 2022: net financial debt of € 250.0 million)
• Divestment of the 33% share in Orsa Foam completed on 11 October 2023 and first instalment received

Jan Vergote (CEO Recticel): “European construction markets have further contracted throughout the third quarter of 2023.

Compared to the first half of 2023, our Insulated Panels activity has increased volumes and profitability generally in line with our previous outlook and will also enter 2024 with a stronger order book then at the start of 2023.

On the contrary, our Insulation Boards activity has been confronted with additional margin pressure, severely impacting profitability.

These market trends have been observed now in all European countries and our teams are working on several projects to compensate for these shortfalls going into 2024, as no material improvement in market conditions is expected.

Our net cash position has further improved to € 155.6 million since June 2023, linked to disciplined working capital management, some M&A related incoming payments and positive interest income. We continue to further explore several acquisition opportunities to enhance our market and segment positions in Europe.”

OUTLOOK

While Insulated Panels has improved its performance compared to the first half of 2023, Insulation Boards’ profitability has further deteriorated due to increased competition in depressed markets.

In this context, we have to adjust our guidance downwards and expect our full year 2023 Adjusted EBITDA to come out between € 35-40 million.

https://www.recticel.com/recticel-trading-update-third-quarter-2023.html

October 26, 2023

Durable Goods Orders Increase in September

US Durable Goods Orders Soared In September By Most In Over 3 Years

by Tyler Durden

Thursday, Oct 26, 2023 – 08:50 AM

After two straight months of declines, preliminary durables goods orders for September soared 4.7% MoM (far higher than the 1.8% expected), lifting orders by 6.0% YoY…

Source: Bloomberg

That is the biggest MoM jump since July 2020.

Orders ex-transports rose just 0.5% MoM and ex-defense soared 5.8% MoM.

Defense spending tumbled 14.4% MoM but non-defense aircraft spending soared 92.5% MoM…

Source: Bloomberg

Finally, as a reminder, this data is all nominal – i.e not adjusted for inflation.

https://www.zerohedge.com/economics/us-durable-goods-orders-soared-september-most-over-3-years