Leggett & Platt announces Restructuring Plan

Diversified manufacturer Leggett & Platt announced that it is implementing a Restructuring Plan primarily in its Bedding Products segment and to a lesser extent, in its Furniture, Flooring & Textile Products segment. In response to evolving markets, the Company is taking actions to improve manufacturing and distribution efficiency, advance its product strategy, and further support customer needs. The major Bedding Products initiatives that are part of the Restructuring Plan include: Refocusing Strategy on innovative, higher-value content, driven by customer and end-consumer needs; Optimizing Manufacturing and Distribution Footprint to consolidate certain locations across the Bedding Products segment, reducing manufacturing and distribution footprint of 50 facilities to approximately 30 to 35 facilities. In Furniture, Flooring & Textile Products the company plans to consolidate a small number of production facilities in Home Furniture and Flooring Products to better align capacity with regional demand and drive operating efficiencies. In total, the initiatives are expected to reduce annual sales by approximately $100M and generate $40M-$50M in EBIT benefit on an annualized run-rate basis when fully implemented in late 2025, with some of the benefit starting to be realized in the second half of 2024. Additionally, the company anticipates receiving approximately $60M-$80M in net cash proceeds from the sale of real estate associated with the initiatives, with transactions largely complete by the end of 2025. The company expects to incur restructuring and restructuring-related costs of $65M-$85M, of which approximately half are anticipated to be incurred in 2024 and the remainder in 2025. This includes $30M-$40M in cash costs, the majority of which are anticipated to be incurred in 2024. In the first half of 2024, the company anticipates $20M-$25M of restructuring and restructuring-related costs. The company withdrew the previously stated Total Shareholder Return goal of 1%-14% and financial targets, including revenue growth, EBIT margin, and dividend payout ratio. Revised financial targets will be issued at a future date. In addition, but unrelated to the Restructuring Plan, the company is impairing an estimated $450M of long-lived assets associated with prior year acquisitions in the Bedding Products segment. Prolonged weak demand and changing market dynamics have created disruption and financial instability for some of our customers.