Leggett & Platt Reports Record Fourth Quarter and Full Year Results

President and CEO Mitch Dolloff commented, “We are pleased to have delivered record¹ full year results in 2021 despite a myriad of macro market challenges, including supply chain issues related to semiconductor shortages, foam chemical shortages, labor availability, and transportation challenges, as well as higher costs associated with each of these issues. We also delivered record¹ quarterly sales and solid operating results in the fourth quarter. Despite these ongoing challenges, including inflation and a likely shift to tighter monetary policy, we expect continued improvement in 2022 as conditions gradually stabilize and growth continues in our businesses most negatively impacted by the pandemic.

• 4Q sales were a quarterly record¹ $1.333 billion, a 13% increase vs 4Q20
• 4Q EPS was $.77, a decrease of $.02 vs 4Q20
• 2021 sales were a record¹ $5.073 billion, a 19% increase vs 2020
• 2021 EPS was a record $2.94 and 2021 adjusted² EPS was a record $2.78; both increases vs 2020
• 2021 cash flow from operations was $271 million
• 2022 guidance: sales of $5.3–$5.6 billion and EPS of $2.70–$3.00

“In addition to record results, Leggett achieved several milestones in 2021. We increased our dividend for the 50^th consecutive year, honoring our commitment to return value to our shareholders. We strengthened our balance sheet by extending our debt maturity profile with the issuance of 30-year notes. We completed three small acquisitions that expanded our capabilities in International Bedding, Aerospace, and Work Furniture. Leggett remains well-positioned, both competitively and financially, to capitalize on long-term opportunities in our various end markets. Our enduring fundamentals give us confidence in our ability to continue creating long-term value for our shareholders.

“Finally, I would like to thank our employees for their tremendous contributions in another challenging year. Your collaboration, agility, dedication, and commitment to our values drive our success.”

Fourth Quarter Results

Fourth quarter 2021 sales a record¹ $1.333 billion; increased 13% versus fourth quarter 2020.

• Organic sales³ were up 11%
  • Volume was down 5% largely due to supply chain constraints impacting the Automotive and Bedding markets, and demand softness in U.S. and European bedding markets later in the quarter
  • Raw material-related selling price increases added 16% to sales growth
• Acquisitions added 2% to sales

Fourth quarter EBIT was $152 million, down $4 million or 2% from fourth quarter 2020.

• EBIT declined primarily from lower volume, partially offset by metal margin expansion in our Steel Rod business and pricing discipline
• EBIT margin was 11.4%, down from 13.2% in the fourth quarter of 2020

Fourth quarter EPS was $.77, a $.02 decrease versus fourth quarter 2020 due to lower EBIT.

Full Year Results

2021 sales a record¹ $5.073 billion; increased 19% versus 2020.

• Organic sales increased 18%
  • Volume up 4% largely due to recovery from COVID-19 impacts experienced in the first half of 2020
  • Raw material-related selling price increases added 13% to sales growth
  • Currency benefit added 1%
• Acquisitions, net of small divestitures, added 1% to sales

2021 EBIT was $596 million, up $188 million or 46% from 2020, and adjusted² EBIT was $568 million, a $115 million or 25% increase versus 2020.

• EBIT and adjusted² EBIT increased primarily as a result of increased volume, higher metal margins, and pricing discipline
  • 2021 adjustment was a $28 million gain on the sale of real estate associated with our exited Fashion Bed business
  • 2020 adjustments were: $25 million goodwill impairment charge related to our Hydraulic Cylinders business; an $8 million impairment charge related to a note receivable; $8 million of restructuring-related charges; and a $4 million charge to write off stock associated with a prior year divestiture
  • Maintained approximately $80 million of the approximate $90 million fixed cost savings taken in 2020
• EBIT margin was 11.7%, up from 9.5% in 2020, and adjusted² EBIT margin was 11.2%, an increase from 10.6% in 2020

2021 EPS was a record $2.94, an increase of $1.08 versus 2020. Full year adjusted² EPS was a record $2.78, an increase of $.62, reflecting higher adjusted² EBIT.

2021 Debt, Cash Flow, and Liquidity

• Issued $500 million 30-year, 3.5% notes
• Net debt² was 2.29x trailing 12-month adjusted EBITDA² at year-end
• Operating cash flow was $271 million, down from $603 million in 2020
  • Decrease driven by inflationary impact and planned investments in inventory
• Capital expenditures were $107 million
• Total liquidity was $1.6 billion at year-end

Dividend

• Dividends were $1.66 per share in 2021, up $.06 from $1.60 per share in 2020
• In November, Leggett & Platt’s Board of Directors declared a $.42 fourth quarter dividend, $.02 higher than last year’s fourth quarter dividend
• At an annual indicated dividend of $1.68 per share, the yield is 4.4% based upon Friday’s closing stock price of $37.88 per share

2022 Guidance

• Sales are expected to be $5.3–$5.6 billion, +4% to +10% versus 2021
  • Volume expected to be flat to up mid-single digits
  • Raw material-related price increases expected to add sales growth
  • Small acquisitions completed in 2021 expected to add 1%
• EPS is expected to be $2.70–$3.00
• Based on this framework, EBIT margin should be 10.5% to 11.0%
• Additional expectations:
  • Depreciation and amortization $200 million
  • Net interest expense $80 million
  • Effective tax rate 23%
  • Fully diluted shares 137 million
  • Operating cash flow approximately $600 million
  • Capital expenditures $150 million
  • Dividends $230 million

Segment Results – Fourth Quarter 2021 (versus 4Q 2020)

Bedding Products –

• Trade sales grew 18%; Organic sales were up 15%
  • Volume decreased 10% primarily from challenges with chemical and labor availability in the U.S. market early in the quarter, and softness in U.S. and European market demand which developed later in the quarter
  • Raw material-related selling price increases added 25%
  • Kayfoam acquisition, net of small divestitures, added 3%
• EBIT increased $7 million, primarily from higher metal margin and pricing discipline; increases partially offset by lower volume, investments to maintain labor, and higher transportation costs

Specialized Products –

• Trade sales decreased 3%; Organic sales were down 4%
  • Volume decreased 5% from lower sales in Automotive due to semiconductor shortages impacting global automotive production, partially offset by sales growth in Hydraulic Cylinders and Aerospace
  • Raw material-related selling price increases and currency benefit added 1%
  • Small Aerospace acquisition added 1%
• EBIT decreased $21 million, primarily from lower volume and higher raw material and transportation costs in Automotive

Furniture, Flooring & Textile Products –

• Trade sales increased 17%
  • Volume increased 1%, with growth in Work Furniture partially offset by declines in Flooring and Textiles
  • Raw material-related selling price increases added 16%
• EBIT increased $10 million, primarily from pricing discipline

Segment Results – Full Year 2021 (versus 2020)

Bedding Products –

• Trade sales increased 20%, entirely from raw material-related price increases
  • Volume was flat; growth in Adjustable Bed, Rod and Wire trade sales, and International Bedding was offset by declines in Specialty Foam and U.S. Spring that resulted primarily from supply chain constraints in the overall U.S. bedding market
  • Kayfoam acquisition added 2% but was offset by small divestitures
• EBIT increased $129 million, primarily from higher metal margin, pricing discipline, gain from sale of real estate associated with exited Fashion Bed business ($28 million), and non-recurrence of prior year note impairment ($8 million) and restructuring-related charges ($3 million); increases partially offset by production inefficiencies driven by supply chain constraints, and higher transportation costs

Specialized Products –

• Trade sales increased 12%; organic sales increased 11%
  • Volume increased 7%; growth in Automotive (in the first half of 2021) and Hydraulic Cylinders was partially offset by decline in Aerospace
  • Currency benefit increased sales 4%
  • Small Aerospace acquisition added 1%
• EBIT increased $24 million, primarily from higher volume and the non-recurrence of prior year goodwill impairment charge ($25 million) in Hydraulic Cylinders and restructuring-related charges ($4 million); increases partially offset by higher raw material and transportation costs

Furniture, Flooring & Textile Products –

• Trade sales increased 20%
  • Volume increased 9%; growth was led by Home Furniture, Work Furniture, and Geo Components
  • Raw material-related selling price increases and currency benefit added 11%
• EBIT increased $33 million, primarily from higher volume, pricing discipline, and non-recurrence of prior year restructuring-related charges ($1 million)

For the full press release, click here.

About Leggett & Platt

Leggett & Platt (NYSE: LEG) is a diversified manufacturer that designs and produces a broad variety of engineered components and products that can be found in most homes and automobiles. The 138-year-old Company is comprised of 15 business units, 20,000 employee-partners, and 135 manufacturing facilities located in 17 countries. Leggett & Platt is a member of the S&P 500 and the S&P 500 Dividend Aristocrats, and is one of Fortune’s World’s Most Admired Companies.

Leggett & Platt is the leading U.S.-based manufacturer of: a) bedding components; b) automotive seat support and lumbar systems; c) specialty bedding foams and private label finished mattresses; d) components for home furniture and work furniture; e) flooring underlayment; f) adjustable beds; and g) bedding industry machinery.

Contact:

Susan R. McCoy – Senior Vice President Investor Relations – invest@leggett.com – (417) 358-8131

Source: Leggett & Platt, Incorporated