Leggett & Platt Reports Significant Financial Challenges, Decline in Revenue and Net Income

Leggett & Platt, Incorporated reported significant financial challenges in its 10-Q filing for the nine months ended September 30, 2024. The company experienced a notable decline in total revenue, which fell to $3,327.2 million from $3,610.2 million in the same period of 2023, marking an 8% decrease. This decline was attributed to weak demand in residential markets, particularly affecting the Bedding Products segment, which saw a 12% drop in trade sales.

The company's gross profit also decreased, falling to $573.5 million from $654.0 million year-over-year. Selling and administrative expenses rose to $384.4 million, up from $344.3 million, contributing to a substantial loss before interest and taxes of $(473.6) million, compared to a profit of $276.4 million in the previous year. The net loss attributable to common shareholders was $(525.7) million, a stark contrast to the $160.5 million profit reported in 2023, resulting in a loss per share of $(3.83) compared to earnings of $1.18 in the prior year.

A significant factor in the financial downturn was a non-cash goodwill impairment charge of $675.3 million, primarily due to macroeconomic pressures and low demand in key markets. The company's total assets decreased to $3,780.1 million from $4,634.5 million at the end of 2023, with goodwill dropping from $1,489.8 million to $814.7 million.

In response to these challenges, Leggett & Platt initiated a restructuring plan in early 2024, primarily targeting the Bedding Products segment. The plan, which is expected to be completed by the end of 2025, aims to consolidate between 15 and 20 production and distribution facilities. The total costs associated with this restructuring are projected to be between $65 million and $85 million, with $34.3 million already incurred as of September 30, 2024.

The company also reported a decrease in total equity, which fell to $741.0 million from $1,333.3 million at the end of 2023. Cash and cash equivalents decreased to $277.2 million from $365.5 million, reflecting ongoing liquidity challenges. Additionally, the company declared a reduced quarterly dividend of $0.05 per share, down from $0.46 in the previous year, as part of its strategy to enhance financial stability.

Overall, Leggett & Platt's performance in 2024 has been significantly impacted by market conditions, leading to strategic restructuring efforts aimed at improving operational efficiency and financial health.