LEGGETT & PLATT INC [LEG] Filings

10-Q 1 leg-20240930.htm FORM 10-Q leg-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-07845

LEGGETT & PLATT, INCORPORATED

(Exact name of registrant as specified in its charter)


Missouri		44-0324630
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1 Leggett Road
Carthage,	Missouri	64836
(Address of principal executive offices)		(Zip Code)

(417) 358-8131

Registrant’s telephone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $.01 par value	LEG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Common stock outstanding as of November 1, 2024: 134,294,816

LEGGETT & PLATT, INCORPORATED—10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS


		Page Number
	Forward-Looking Statements	1

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements.
	Consolidated Condensed Balance Sheets at September 30, 2024 and December 31, 2023	3
	Consolidated Condensed Statements of Operations for the three and nine months ended September 30, 2024 and 2023	4
	Consolidated Condensed Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023	5
	Consolidated Condensed Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	6
	Consolidated Condensed Statements of Changes in Equity for the three and nine months ended September 30, 2024 and 2023	7
	Notes to Consolidated Condensed Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	44
Item 4.	Controls and Procedures.	44

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	45
Item 1A.	Risk Factors.	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	56
Item 5.	Other Information.	57
Item 6.	Exhibits.	58

SIGNATURES		59

Forward-Looking Statements

This report may contain “forward-looking” statements including, but not limited to: projections of our revenue, income, earnings, capital expenditures, dividends, product demand, capital structure, cash flows, interest costs, the payment of cash dividends, metal margins, cash repatriation, tax impacts, effective tax rate, maintenance of commercial paper indebtedness, litigation expense, acquisition or disposition activity, collectability of receivables, ability to issue debt in the capital markets, cybersecurity protections and costs, future cash expenditures, realization of pricing change impacts, antidumping determinations, amortization expense, source of funds to retire notes, uses of cash, our technological competitiveness, compiling a GHG emissions inventory, geography of sales origination, hedge accounting treatment, unauthorized use of artificial intelligence, industry demand projections, impact of accounts receivable and payable programs, cost of property insurance, access to liquidity, compliance with debt covenants, raw material and parts availability and pricing, supply chain disruptions, labor, raw material and part shortages, inventory levels, climate-related targets and costs, goodwill or other asset impairment; possible plans, goals, objectives, prospects, strategies, or trends concerning future operations; statements concerning future economic performance; items related to the restructuring plan (the “Restructuring Plan” or “Plan”) such as estimates of the amounts, types, and timing of facility closures, restructuring-related costs (cash and non-cash including inventory obsolescence) and impairment charges, sales reduction, proceeds from the sale of facilities, and EBIT benefit; and the underlying assumptions relating to forward-looking statements. These statements are identified by the context in which they appear or words such as “anticipate,” “believe,” “estimate,” “expect,” “guidance,” “intend,” “may,” “plan,” or the like. All forward-looking statements, whether written or oral, and whether made by us or on our behalf, are expressly qualified by the cautionary statements described herein. Any forward-looking statement reflects only the beliefs of Leggett & Platt at the time the statement is made, and is subject to risks, uncertainties, and developments, which might cause actual events or results to differ materially from those envisioned in any forward-looking statement. Moreover, we do not have, and do not undertake, any duty to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement was made. Forward-looking statements should not be relied upon as a prediction of actual future events, objectives, strategies, trends, or results.

Readers should review Item 1A Risk Factors in our Form 10-K filed February 27, 2024 and in this Form 10-Q for a description of factors that could cause actual events or results to differ materially from forward-looking statements. It is not possible to anticipate and list all risks, uncertainties, and developments which may cause actual events or results to differ materially from forward-looking statements. However, some of these risks and uncertainties include:

•our Restructuring Plan cost estimates may change; our ability to implement the Plan or sell real estate and obtain expected proceeds in a timely manner; the impact on relationships with employees, customers, and vendors; and other restructuring, impairment, and related costs in addition to the Plan;

•delays and non-delivery of raw materials, parts, and finished products in our supply chain from fire, explosion, terrorism, geopolitical conflicts, government action, labor strikes (including the U.S. and Canadian longshoremen strikes), delivery port shutdowns, trade tensions, trucking constraints, pandemics, vendor quality issues, and non-compliance with laws;

•our product demand, growth rates and reduced opportunities in the industries in which we participate;

•consumer confidence, housing turnover, employment levels, interest rates, and trends in capital spending;

•the loss of business with customers;

•impairment of goodwill and long-lived assets;

•our ability to manage working capital;

•our ability to borrow under our credit facility and comply with restrictive covenants;

•our ability to simplify our portfolio through our strategic review;

•compliance with environmental and climate change laws, including the cost, market, technological, and reputational impacts;

•the direct and indirect physical effects of climate change, including severe weather-related events, natural disasters, and changes in climate patterns, on our markets, operations, supply chains, and results;

•inability to collect receivables due to customer financial difficulties or insolvency;

•inflationary and deflationary impacts on raw materials, wage rates and energy costs, and availability and pricing of steel scrap and rod, chemicals, and semiconductors;

•our market share in goods and services we sell or provide;

•our ability to pass along cost increases through increased selling prices;

•price and product competition from Asian, European, Mexican, and domestic competitors;

•our ability to maintain profit margins if our customers change the quantity and mix of our products;

•our ability to access the commercial paper market and debt markets and increased borrowing costs due to credit rating changes;

•adverse changes in political risk and U.S. or foreign laws, regulations, or legal systems (including tax and trade laws);

•the realization of deferred tax assets and challenges to tax positions pursuant to ongoing or future audits;

•cash repatriation from foreign accounts;

•the enforcement of antidumping and countervailing duties on the import of innersprings, steel wire rod, and finished mattresses;

•tariffs imposed by the U.S. government resulting in increased costs of imported purchases;

•the disruption of the semiconductor industry and our global operations generally from conflict between China and Taiwan;

•the development of commercially viable and innovative products;

•the functioning of our internal business processes and information systems through technology failures;

•cybersecurity incidents on our business, financial results, supplier or customer relationships, cybersecurity protection and remediation costs, legal costs, insurance premiums, competitiveness, and reputation;

•the unauthorized use of artificial intelligence that could expose Company information, infringe intellectual property rights, violate privacy laws, and harm our reputation;

•environmental, social, and governance responsibilities;

•litigation risks including antitrust, intellectual property, personal injury, contract disputes, product liability and warranty, taxation, patent, climate change, environmental, and workers’ compensation;

•business disruptions to our steel rod mill, including a lack of adequate supply of steel scrap;

•foreign operating risks, including credit, intellectual property rights, exchange rates, taxation, labor strikes, customs and shipping rates, asset seizure, business licensing, land use requirements, and inconsistent enforcement of laws;

•controls regarding the exportation of semiconductor chips and equipment to China;

•privacy and data protection regulations; and

•continuation of cash dividends on our common stock.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

LEGGETT & PLATT, INCORPORATED

Consolidated Condensed Balance Sheets

(Unaudited)


(Amounts in millions)	September 30, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	277.2	$	365.5
Trade receivables, net	583.9		564.9
Other receivables, net	54.2		72.4
Inventories	754.4		819.7
Prepaid expenses and other current assets	64.8		58.9

Total current assets	1,734.5		1,881.4
Property, Plant and Equipment—at cost
Machinery and equipment	1,485.0		1,488.3
Buildings and other	807.9		820.3
Land	39.6		42.8
Total property, plant and equipment	2,332.5		2,351.4
Less accumulated depreciation	1,583.6		1,570.2
Net property, plant and equipment	748.9		781.2
Other Assets
Goodwill	814.7		1,489.8
Other intangibles, net	151.4		167.5
Operating lease right-of-use assets	188.2		193.2
Sundry	142.4		121.4

Total other assets	1,296.7		1,971.9
TOTAL ASSETS	$	3,780.1	$	4,634.5

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt and current maturities of long-term debt	$	301.1	$	308.0
Current portion of operating lease liabilities	53.7		57.3
Accounts payable	516.0		536.2
Accrued expenses	249.3		256.8
Other current liabilities	51.6		104.3

Total current liabilities	1,171.7		1,262.6
Long-term Liabilities
Long-term debt	1,578.2		1,679.6
Operating lease liabilities	143.3		150.5
Other long-term liabilities	90.1		106.6
Deferred income taxes	55.0		101.2
Total long-term liabilities	1,866.6		2,037.9
Commitments and Contingencies
Equity
Common stock	2.0		2.0
Additional contributed capital	570.8		575.8
Retained earnings	2,057.3		2,661.1
Accumulated other comprehensive loss	(54.2)		(43.7)
Treasury stock	(1,834.9)		(1,861.9)
Total Leggett & Platt, Inc. equity	741.0		1,333.3
Noncontrolling interest	.8		.7
Total equity	741.8		1,334.0
TOTAL LIABILITIES AND EQUITY	$	3,780.1	$	4,634.5

See accompanying notes to consolidated condensed financial statements.

LEGGETT & PLATT, INCORPORATED

Consolidated Condensed Statements of Operations

(Unaudited)


	Nine Months Ended				Three Months Ended
	September 30,				September 30,
(Amounts in millions, except per share data)	2024		2023		2024		2023
Net trade sales	$	3,327.2	$	3,610.2	$	1,101.7	$	1,175.4
Cost of goods sold	2,753.7		2,956.2		901.1		961.1
Gross profit	573.5		654.0		200.6		214.3
Selling and administrative expenses	384.4		344.3		127.0		109.1
Amortization of intangibles	16.8		51.6		7.2		17.9
Impairments	678.5		—		.6		—

Net gain on disposal of assets	(31.1)		(9.1)		(14.1)		(5.5)
Other (income) expense, net	(1.5)		(9.2)		2.2		1.4
Earnings (loss) before interest and income taxes	(473.6)		276.4		77.7		91.4
Interest expense	65.0		67.2		21.0		22.0
Interest income	4.4		3.7		1.0		1.5
Earnings (loss) before income taxes	(534.2)		212.9		57.7		70.9
Income taxes	(8.6)		52.3		12.8		18.0


Net earnings (loss)	(525.6)		160.6		44.9		52.9
(Earnings) attributable to noncontrolling interest, net of tax	(.1)		(.1)		—		(.1)
Net earnings (loss) attributable to Leggett & Platt, Inc. common shareholders	$	(525.7)	$	160.5	$	44.9	$	52.8







Net earnings (loss) per share attributable to Leggett & Platt, Inc. common shareholders
Basic	$	(3.83)	$	1.18	$	.33	$	.39
Diluted	$	(3.83)	$	1.18	$	.33	$	.39

Weighted average shares outstanding
Basic	137.2		136.2		137.4		136.4
Diluted	137.2		136.5		138.0		136.8

See accompanying notes to consolidated condensed financial statements.

LEGGETT & PLATT, INCORPORATED

Consolidated Condensed Statements of Comprehensive Income (Loss)

(Unaudited)


	Nine Months Ended				Three Months Ended
	September 30,				September 30,
(Amounts in millions)	2024		2023		2024		2023
Net earnings (loss)	$	(525.6)	$	160.6	$	44.9	$	52.9
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(7.9)		(3.3)		33.0		(26.2)
Cash flow hedges	(2.9)		(.5)		—		(2.2)
Defined benefit pension plans	.3		.6		(.1)		.3
Other comprehensive income (loss), net of tax	(10.5)		(3.2)		32.9		(28.1)
Comprehensive income (loss)	(536.1)		157.4		77.8		24.8
Add: comprehensive income attributable to noncontrolling interest	(.1)		(.1)		(.1)		(.2)
Comprehensive income (loss) attributable to Leggett & Platt, Inc.	$	(536.2)	$	157.3	$	77.7	$	24.6

See accompanying notes to consolidated condensed financial statements.

LEGGETT & PLATT, INCORPORATED

Consolidated Condensed Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(Amounts in millions)	2024		2023
Operating Activities
Net earnings (loss)	$	(525.6)	$	160.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	83.8		81.2
Amortization of intangibles and supply agreements	18.1		53.9
Long-lived asset impairment	3.2		—
Goodwill impairment	675.3		—
Increase (decrease) in provision for losses on accounts and notes receivable	8.5		(6.0)
Write-down of inventories	25.3		4.9
Net gain from disposal of assets	(31.1)		(9.1)

Deferred income tax benefit	(55.3)		(17.3)
Stock-based compensation	22.2		21.7


Other, net	(11.9)		8.9
Changes in working capital, excluding effects from acquisitions and divestitures:
Accounts and other receivables	(13.9)		(23.3)
Inventories	40.5		66.5
Other current assets	(4.8)		(6.0)
Accounts payable	(20.8)		19.4
Accrued expenses and other current liabilities	(30.1)		(4.3)
Net Cash Provided by Operating Activities	183.4		351.1
Investing Activities
Additions to property, plant and equipment	(59.8)		(90.4)

Proceeds from disposals of assets	40.6		13.2

Other, net	.4		(.2)
Net Cash Used for Investing Activities	(18.8)		(77.4)
Financing Activities
Additions to long-term debt	—		.7
Payments on long-term debt	(.1)		(1.1)
Change in commercial paper and short-term debt	(110.2)		(121.3)

Dividends paid	(129.7)		(178.1)

Purchases of common stock	(4.5)		(5.5)


Other, net	(2.1)		(5.5)
Net Cash Used for Financing Activities	(246.6)		(310.8)
Effect of Exchange Rate Changes on Cash	(6.3)		(5.5)
Decrease in Cash and Cash Equivalents	(88.3)		(42.6)
Cash and Cash Equivalents—January 1,	365.5		316.5
Cash and Cash Equivalents—September 30,	$	277.2	$	273.9

See accompanying notes to consolidated condensed financial statements.

LEGGETT & PLATT, INCORPORATED

Consolidated Condensed Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2024
	Common Stock & Additional Contributed Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interest		Total Equity
Beginning balance, July 1, 2024	$	573.8	$	2,019.3	$	(87.0)	$	(1,838.5)	$	.7	$	668.3


Net earnings (loss)	—		44.9		—		—		—		44.9

Dividends declared (See Note D)	.1		(6.9)		—		—		—		(6.8)

Treasury stock purchased	—		—		—		(.2)		—		(.2)
Treasury stock issued	(2.9)		—		—		3.8		—		.9
Other comprehensive income (loss), net of tax (See Note L)	—		—		32.8		—		.1		32.9
Stock-based compensation transactions, net of tax	1.8		—		—		—		—		1.8

Ending balance, September 30, 2024	$	572.8	$	2,057.3	$	(54.2)	$	(1,834.9)	$	.8	$	741.8


	Three Months Ended September 30, 2023
	Common Stock & Additional Contributed Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interest		Total Equity
Beginning balance, July 1, 2023	$	572.2	$	3,031.2	$	(68.5)	$	(1,866.9)	$	.6	$	1,668.6


Net earnings (loss)	—		52.8		—		—		.1		52.9
Dividends declared (See Note D)	1.4		(62.7)		—		—		—		(61.3)

Treasury stock purchased	—		—		—		(.6)		—		(.6)
Treasury stock issued	(1.4)		—		—		2.6		—		1.2
Other comprehensive income (loss), net of tax (See Note L)	—		—		(28.2)		—		.1		(28.1)
Stock-based compensation transactions, net of tax	3.2		—		—		—		—		3.2

Ending balance, September 30, 2023	$	575.4	$	3,021.3	$	(96.7)	$	(1,864.9)	$	.8	$	1,635.9

LEGGETT & PLATT, INCORPORATED

Consolidated Condensed Statements of Changes in Equity—(Continued)

(Unaudited)


	Nine Months Ended September 30, 2024
	Common Stock & Additional Contributed Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interest		Total Equity
Beginning balance, January 1, 2024	$	577.8	$	2,661.1	$	(43.7)	$	(1,861.9)	$	.7	$	1,334.0


Net earnings (loss)	—		(525.7)		—		—		.1		(525.6)

Dividends declared (See Note D)	3.1		(78.1)		—		—		—		(75.0)

Treasury stock purchased	—		—		—		(4.5)		—		(4.5)
Treasury stock issued	(27.4)		—		—		31.5		—		4.1
Other comprehensive income (loss), net of tax (See Note L)	—		—		(10.5)		—		—		(10.5)
Stock-based compensation transactions, net of tax	19.3		—		—		—		—		19.3

Ending balance, September 30, 2024	$	572.8	$	2,057.3	$	(54.2)	$	(1,834.9)	$	.8	$	741.8


	Nine Months Ended September 30, 2023
	Common Stock & Additional Contributed Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Noncontrolling Interest		Total Equity
Beginning balance, January 1, 2023	$	570.5	$	3,046.0	$	(93.5)	$	(1,882.3)	$	.7	$	1,641.4


Net earnings (loss)	—		160.5		—		—		.1		160.6

Dividends declared (See Note D)	4.2		(185.2)		—		—		—		(181.0)

Treasury stock purchased	—		—				(5.9)		—		(5.9)
Treasury stock issued	(18.7)		—		—		23.3		—		4.6
Other comprehensive income (loss), net of tax (See Note L)	—		—		(3.2)		—		—		(3.2)
Stock-based compensation transactions, net of tax	19.4		—		—		—		—		19.4

Ending balance, September 30, 2023	$	575.4	$	3,021.3	$	(96.7)	$	(1,864.9)	$	.8	$	1,635.9

See accompanying notes to consolidated condensed financial statements.

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements

(Unaudited)

(Amounts in millions, except per share data)

A—Interim Presentation

The interim financial statements of Leggett & Platt, Incorporated (we, us, or our) included herein have not been audited by an independent registered public accounting firm. The statements include all adjustments, including normal recurring accruals, which management considers necessary for a fair statement of our financial position and operating results for the periods presented. We have prepared the statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. The operating results for interim periods are not necessarily indicative of results to be expected for an entire year.

The December 31, 2023 financial position data included herein was derived from the audited consolidated financial statements, but does not include all disclosures required by GAAP.

Accounts Receivable and Accounts Payable Programs

We participate in trade receivables sales programs in combination with third-party banking institutions and certain customers. Under each of these programs, we sell our entire interest in the trade receivable for 100% of face value, less a discount. Because control of the sold receivable is transferred to the buyer at the time of sale, accounts receivable balances sold are removed from the Consolidated Condensed Balance Sheets and the related proceeds are reported as cash provided by operating activities in the Consolidated Condensed Statements of Cash Flows. We had approximately $45.0 and $60.0 of trade receivables that were sold and removed from our balance sheets at September 30, 2024 and December 31, 2023, respectively.

We sometimes utilize third-party programs that allow our suppliers to be paid earlier at a discount or for a fee. While these programs assist us in negotiating payment terms with our suppliers, we continue to make payments based on our customary terms. A supplier can elect to take payment from a third party earlier with a discount, and in that case, we pay the third party on the original due date of the invoice. Contracts with our suppliers are negotiated independently of supplier participation in the programs, and we cannot increase payment terms pursuant to the programs. The accounts payable associated with the third-party programs, which remain on our Consolidated Condensed Balance Sheets, were approximately $100.0 at September 30, 2024 and $105.0 at December 31, 2023, respectively.

The above items encompass multiple individual programs that are utilized as tools in our cash flow management, and we offer them as options to facilitate customer and vendor operating cycles. Because many of these programs operate independently, and a cessation of all these programs at the same time is not reasonably likely, we do not expect changes in these programs to have a material impact on our operating cash flows or liquidity.

New Accounting Guidance

The Financial Accounting Standards Board (FASB) regularly issues updates to the FASB Accounting Standards Codification that are communicated through issuance of an Accounting Standards Update (ASU). Below is a summary of the ASUs effective for future periods that are most relevant to our financial statements:

Not yet adopted

•ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”: This ASU requires additional disclosures about reportable segments' expenses and other items on an interim and annual basis. This guidance will be effective for annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025. We are currently evaluating the impact of adopting this guidance.

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

•ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”: This ASU requires disclosure of specific categories in the rate reconciliation and income taxes paid disaggregated by jurisdiction. This guidance will be effective for annual periods beginning January 1, 2025. We are currently evaluating the impact of adopting this guidance.

•ASU 2024-03 "Income Statement (Subtopic 220-40)—Reporting Comprehensive Income—Expense Disaggregation Disclosures": This ASU requires disaggregated disclosures for specific categories such as inventory purchases, employee compensation, depreciation, and amortization, as well as other qualitative descriptions.

This guidance will be effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. We are currently evaluating the impact of adopting this guidance.

The FASB has issued accounting guidance, in addition to the issuances discussed above, effective for current and future periods. This guidance did not have a material impact on our current financial statements, and we do not believe it will have a material impact on our future financial statements.

B—Revenue

Revenue by Product Family

We disaggregate revenue by customer group, which is the same as our product families for each of our segments, as we believe this best depicts how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. For information on our segment structure, see Note C.


	Nine Months Ended September 30,				Three Months Ended September 30,
	2024		2023		2024		2023
Bedding Products
Bedding Group	$	1,331.5	$	1,516.2	$	445.5	$	483.3


Specialized Products
Automotive Group	629.5		657.5		204.6		223.7
Aerospace Products Group	138.0		113.9		44.9		37.9
Hydraulic Cylinders Group	167.9		189.9		50.4		57.8
	935.4		961.3		299.9		319.4

Furniture, Flooring & Textile Products
Home Furniture Group	207.5		226.8		65.6		72.4
Work Furniture Group	207.2		205.0		67.9		65.2
Flooring & Textile Products Group	645.6		700.9		222.8		235.1
	1,060.3		1,132.7		356.3		372.7
	$	3,327.2	$	3,610.2	$	1,101.7	$	1,175.4

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

C—Segment Information

We have three operating segments that supply a wide range of products:

•Bedding Products: This segment supplies a variety of components and machinery used by bedding manufacturers in the production and assembly of their finished products, as well as produces private label finished mattresses and adjustable bed bases. This segment is also vertically integrated into the production and supply of specialty foam chemicals, steel rod, and drawn steel wire to our own operations and to external customers. We also supply steel rod and wire to trade customers that operate in a broad range of markets.

•Specialized Products: From this segment, we supply lumbar support systems, seat suspension systems, motors and actuators, and control cables used by automotive manufacturers. We also produce and distribute tubing and tube assemblies for the aerospace industry and engineered hydraulic cylinders used in the material-handling and heavy construction industries.

•Furniture, Flooring & Textile Products: Operations in this segment supply a wide range of components for residential and work furniture manufacturers, as well as select lines of private label finished furniture. We also produce or distribute carpet cushion, hard surface flooring underlayment, and textile and geo components.

Our reportable segments are the same as our operating segments, which also correspond with our management organizational structure. Our Bedding Products and Furniture, Flooring & Textile Products segments have an executive vice president who has accountability to, and maintains regular contact with, our CEO, who is the chief operating decision maker (CODM). With the retirement of our Specialized Products segment executive vice president in April 2024, our CEO became acting segment manager on a temporary basis for this segment until a permanent replacement is named. The operating results and financial information reported through the segment structure are regularly reviewed and used by the CODM to evaluate segment performance, allocate overall resources, and determine management incentive compensation.

The accounting principles used in the preparation of the segment information are the same as those used for the consolidated financial statements. We evaluate performance based on Earnings Before Interest and Taxes (EBIT). Intersegment sales are made primarily at prices that approximate market-based selling prices. Centrally incurred costs are allocated to the segments based on estimates of services used by the segment. Certain of our general and administrative costs and miscellaneous corporate income and expenses are allocated to the segments based on sales or other appropriate metrics. These allocated corporate costs include depreciation and other costs and income related to assets that are not allocated or otherwise included in the segment assets.

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

A summary of segment results is shown in the following tables:


	Trade 1 Sales		Inter- Segment Sales		Total Sales		EBIT		Depreciation and Amortization
Three Months Ended September 30, 2024
Bedding Products 2	$	445.5	$	6.1	$	451.6	$	25.5	$	14.8
Specialized Products	299.9		1.5		301.4		24.8		11.0
Furniture, Flooring & Textile Products	356.3		2.1		358.4		27.4		5.4
Intersegment eliminations and other 3							—		5.2
	$	1,101.7	$	9.7	$	1,111.4	$	77.7	$	36.4
Three Months Ended September 30, 2023
Bedding Products	$	483.3	$	7.4	$	490.7	$	31.1	$	26.2
Specialized Products	319.4		.3		319.7		31.2		10.7
Furniture, Flooring & Textile Products	372.7		2.8		375.5		29.5		5.5
Intersegment eliminations and other 3							(.4)		2.6
	$	1,175.4	$	10.5	$	1,185.9	$	91.4	$	45.0


	Trade 1 Sales		Inter- Segment Sales		Total Sales		EBIT		Depreciation and Amortization
Nine Months Ended September 30, 2024
Bedding Products 2,4	$	1,331.5	$	19.0	$	1,350.5	$	(550.6)	$	43.7
Specialized Products 4	935.4		3.2		938.6		39.0		31.4
Furniture, Flooring & Textile Products 4	1,060.3		7.6		1,067.9		41.6		16.2
Intersegment eliminations and other 3							(3.6)		10.6
	$	3,327.2	$	29.8	$	3,357.0	$	(473.6)	$	101.9
Nine Months Ended September 30, 2023
Bedding Products	$	1,516.2	$	25.5	$	1,541.7	$	87.4	$	77.3
Specialized Products	961.3		1.2		962.5		93.0		31.7
Furniture, Flooring & Textile Products	1,132.7		9.3		1,142.0		96.7		17.0
Intersegment eliminations and other 3							(.7)		9.1
	$	3,610.2	$	36.0	$	3,646.2	$	276.4	$	135.1

1 See Note B for revenue by product family.

2 The lower amortization expense in the three and nine months ended September 30, 2024 is due to the fourth quarter 2023 long-lived asset impairment.

3 Depreciation and Amortization: Other relates to non-operating assets (assets not included in segment assets) and is allocated to segment EBIT as discussed above.

4 EBIT for the nine months ended September 30, 2024 includes $675.3 of goodwill impairments as discussed in Note F.

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

Average assets for our segments are shown in the table below and reflect the basis for return measures used by management to evaluate segment performance. These segment totals include the average of both working capital (all current assets and current liabilities) plus net property, plant and equipment.


Average Assets by Segment	September 30, 2024		December 31, 2023
Bedding Products	$	755.8	$	815.2
Specialized Products	399.4		398.6
Furniture, Flooring & Textile Products	354.4		390.3

Average current liabilities included in segment numbers above	688.3		736.1
Unallocated assets 1	1,608.6		2,403.2
Difference between average assets and period-end balance sheet	(26.4)		(108.9)
Total assets	$	3,780.1	$	4,634.5

1 Unallocated assets consist primarily of goodwill, other intangibles, cash, and deferred tax assets. The September 30, 2024 unallocated assets reflects the $675.3 goodwill impairment as discussed in Note F.

D—Earnings (Loss) Per Share (EPS)

Basic and diluted earnings (loss) per share were calculated as follows:


	Nine Months Ended September 30,				Three Months Ended September 30,
	2024		2023		2024		2023
Net earnings (loss)
Net earnings (loss)	$	(525.6)	$	160.6	$	44.9	$	52.9
Earnings attributable to noncontrolling interest, net of tax	(.1)		(.1)		—		(.1)


Net earnings (loss) attributable to Leggett & Platt, Inc. common shareholders	$	(525.7)	$	160.5	$	44.9	$	52.8

Weighted average number of shares (in millions)
Weighted average number of common shares used in basic EPS	137.2		136.2		137.4		136.4
Dilutive effect of stock-based compensation	—		.3		.6		.4
Weighted average number of common shares and dilutive potential common shares used in diluted EPS	137.2		136.5		138.0		136.8

Basic and diluted EPS



Basic EPS attributable to Leggett & Platt common shareholders	$	(3.83)	$	1.18	$	.33	$	.39




Diluted EPS attributable to Leggett & Platt common shareholders	$	(3.83)	$	1.18	$	.33	$	.39

Other information
Anti-dilutive shares excluded from diluted EPS computation	.5		.5		.5		.5

Cash dividends declared per share	$	.56	$	1.36	$	.05	$	.46

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

E—Restructuring and Related Activities

In the first quarter of 2024, we committed to a restructuring plan, primarily associated with our Bedding Products segment and, to a lesser extent, our Furniture, Flooring & Textile Products segment (the “Restructuring Plan” or “Plan”), which is expected to be substantially complete by the end of 2025. The Plan was expanded in the second quarter of 2024 to include a restructuring opportunity within the Specialized Products segment and in the third quarter of 2024 to include the general and administrative cost structure initiatives.

Over the course of the restructuring timeline, we plan to consolidate between 15 and 20 production and distribution facilities (out of 50) in the Bedding Products segment and a small number of production facilities in the Furniture, Flooring & Textile Products segment. Our total costs for this Plan are expected to be between $65.0 and $85.0, of which $40.0 to $50.0 are anticipated to be incurred in 2024 and the remainder in 2025. As of September 30, 2024, we have incurred costs of $34.3.

The following table presents all restructuring and restructuring-related activity and impairments associated with the Plan and $1.0 of restructuring-related costs incurred in the third quarter of 2024 due to exploring a potential sale of our Aerospace business. This business has not reached the criteria to be classified as held for sale.


	Total Amount Expected to be Incurred	Nine Months Ended September 30, 2024		Three Months Ended September 30, 2024

Net restructuring and restructuring-related	$40.0 to $55.0	$	31.1	$	11.7
Impairment costs associated with this plan (See Note F)	25.0 to 30.0	3.2		.6
	$65.0 to $85.0	$	34.3	$	12.3

Amount of total that represents net cash charges	$30.0 to $40.0	$	26.6	$	11.0

The table below presents all 2024 restructuring and restructuring-related activity. Restructuring and restructuring-related activity for 2023 was $2.7 and was not associated with any formal plan.


	Income Statement Presentation	Nine Months Ended September 30, 2024		Three Months Ended September 30, 2024
Restructuring costs:
Termination benefits, relocation, and other restructuring costs	Other (income) expense, net	$	16.5		$	4.8
Restructuring-related costs (gains):

Inventory obsolescence and other	Cost of goods sold	4.5			.7

Professional services and other	Selling and administrative expenses	11.7			6.3


Gain on sale of equipment	Net gain on disposal of assets	(1.6)			(.1)
Total restructuring-related costs		14.6			6.9
Total net restructuring and restructuring-related costs		$	31.1		$	11.7
Amount of total that represents net cash charges		$	26.6		$	11.0

Net restructuring and restructuring-related costs by segment were as follows:


	Nine Months Ended September 30, 2024		Three Months Ended September 30, 2024
Bedding Products	$	24.0		$	7.4
Specialized Products	5.1			3.8
Furniture, Flooring & Textile Products	2.0			.5
Total net restructuring and restructuring-related costs	$	31.1		$	11.7

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

In August 2024, we recognized gains from the sale of real estate associated with the Plan of $14.0 within the Bedding Products segment. These gains are not reflected in the tables above.

The accrued liability associated with the Plan consisted of the following:


	Balance at December 31, 2023		Add: 2024 Charges		Less: 2024 Payments		Balance at September 30, 2024
Termination benefits	$	—	$	6.1	$	4.5	$	1.6

Relocation and other restructuring costs	—		10.4		10.3		.1
Total	$	—	$	16.5	$	14.8	$	1.7

F—Impairment Charges

Pretax impairment charges are reported in “Impairments” in the Consolidated Statements of Operations and are summarized in the table below. There were no impairment charges in the three and nine months ended September 30, 2023.


	Nine Months Ended September 30, 2024						Three Months Ended September 30, 2024
	Goodwill Impairment		Other Long-Lived Assets Impairments		Total Impairments			Goodwill Impairment		Other Long-Lived Assets Impairments		Total Impairments
Bedding Products	$	587.2	$	3.2	$	590.4		$	—	$	.6	$	.6
Specialized Products	43.6		—		43.6			—		—		—
Furniture, Flooring & Textile Products	44.5		—		44.5			—		—		—

Total impairment charges	$	675.3	$	3.2	$	678.5		$	—	$	.6	$	.6

Goodwill Impairment Testing

We test goodwill for impairment at the reporting unit level (the business groups that are one level below the operating segments) when triggering events occur, or at least annually. We perform our annual goodwill impairment testing in the second quarter. The 2023 goodwill impairment testing indicated no impairments.

The 2024 annual goodwill impairment testing performed in the second quarter resulted in a $675.3 non-cash goodwill impairment charge related to the reporting units noted below. There were no triggering events or impairments indicated in the three months ending September 30, 2024.


Reporting Unit	Segment	Nine Months Ended September 30, 2024
Bedding	Bedding Products	$	587.2
Work Furniture	Furniture, Flooring & Textile Products	44.5
Hydraulic Cylinders	Specialized Products	43.6
		$	675.3

In general, the fair values for our reporting units decreased versus prior year due to macroeconomic pressures, including low demand, particularly in residential end markets. The fair values of our reporting units were reconciled to our consolidated market capitalization, which decreased due to the significant decline in stock price during the second quarter of 2024. Our closing stock price per share was $26.17 on December 29, 2023, $19.15 on March 28, 2024, and $11.46 on June 28, 2024. The impairment was concluded in connection with the preparation of the second quarter financial statements. If actual results differ materially from estimates used in our calculations, we could incur future impairment charges.

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

The fair values of our reporting units in relation to their respective carrying values and significant assumptions used are presented in the tables below. The 2024 information excludes Hydraulic Cylinders, as this unit had no goodwill remaining after the second quarter 2024 impairment.


2024
Fair Value over Carrying Value divided by Carrying Value	September 30, 2024 Goodwill Value		Compound Annual Growth Rate (CAGR) Range for Sales	Terminal Values Long-term Growth Rate for Debt-Free Cash Flow		Discount Rate Ranges
Less than 50% 1	$	442.9	(1)% - 12%	3	%	14% - 17%

101% - 300%	371.8		3 - 7	3		14

	$	814.7	(1)% - 12%	3	%	14% - 17%


2023
Fair Value over Carrying Value divided by Carrying Value	December 31, 2023 Goodwill Value		CAGR Range for Sales	Terminal Values Long-term Growth Rate for Debt-Free Cash Flow		Discount Rate Ranges
Less than 50% 1	$	1,018.1	1% - 17%	3	%	10-12%
50% - 100%	99.6		<1	3		8
101% - 300%	372.1		3 - 6	3		8-10

	$	1,489.8	<1% - 17%	3	%	8% - 12%

1 This category includes Bedding, Aerospace, and Work Furniture for 2024 and Bedding, Aerospace, and Hydraulic Cylinders for 2023.

• The fair value of our Bedding reporting unit was less than its carrying value at our second quarter 2024 testing date, resulting in a partial goodwill impairment as discussed above. Fair value exceeded carrying value by 40% at our second quarter 2023 testing date. There was a triggering event in the fourth quarter of 2023 for this reporting unit due to certain customers' efforts to improve their financial position by moving their business to or exploring alternate suppliers. Accordingly, we performed a goodwill impairment test at that time, which indicated no goodwill impairment, but fair value in excess of carrying value had decreased to 19%. Goodwill associated with this reporting unit was $319.8 at September 30, 2024 and $906.5 at December 31, 2023.

• The fair value of our Aerospace reporting unit exceeded its carrying value by 21% at our second quarter 2024 testing date as compared to 44% in 2023. Goodwill associated with this reporting unit was $67.7 at September 30, 2024 and $67.0 at December 31, 2023.

• The fair value of our Work Furniture reporting unit was less than its carrying value at our second quarter 2024 testing date, resulting in a partial goodwill impairment, as discussed above. Fair value exceeded carrying value by 74% at our second quarter 2023 testing date. Goodwill associated with this reporting unit was $55.4 at September 30, 2024 and $99.6 at December 31, 2023.

• The fair value of our Hydraulic Cylinders reporting unit was less than its carrying value at our second quarter 2024 testing date, resulting in a full goodwill impairment, as discussed above. Fair value exceeded carrying value by 18% at our second quarter 2023 testing date. Goodwill associated with this reporting unit was $44.6 at December 31, 2023.

Other long-lived assets

We review material intangibles mid-year and other long-lived assets for recoverability at year end and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

All long-lived asset impairment charges for the three and nine months ended September 30, 2024 were related to the Restructuring Plan. For details, please see Note E.

LEGGETT & PLATT, INCORPORATED

Notes to Consolidated Condensed Financial Statements—(Continued)

(Unaudited)

G—Accounts and Other Receivables

Accounts and other receivables consisted of the following:


	September 30, 2024				December 31, 2023
	Current		Long-term		Current		Long-term
Total trade receivables	$	601.0	$	—	$	575.4	$	—
Allowance for doubtful accounts - trade receivables	(17.1)		—		(10.5)		—
Trade receivables, net	$	583.9	$	—	$	564.9	$	—


Taxes receivable, including income taxes	$	3.6	$	—	$	3.1	$	—
Value-added taxes (VAT) recoverable 1	39.6		6.1		56.6		—
Other receivables	11.0		4.7		12.7		1.2

Other receivables, net	$	54.2	$	10.8	$	72.4	$	1.2

1 This includes recoverable amounts from various countries, including Mexico, where we have experienced VAT refund delays from the Mexican government. We believe these are fully collectible, and our recent discussions with the government have resulted in an updated timeline for resolution. As a result, we have classified $6.1 as long-term as of September 30, 2024. The aggregate of current and long-term balances of Mexico VAT recoverable was $35.9 and $48.2 at September 30, 2024 and December 31, 2023, respectively.

Activity related to the allowance for doubtful accounts is reflected below:


	Balance at December 31, 2023		Change in Provision		Less: Net Charge-offs/ (Recoveries) and Other		Balance at September 30, 2024




Total allowance for doubtful accounts on trade receivables	$	10.5	$	8.5	$	1.9	$	17.1

H—Inventories

The following table recaps the components of inventory for each period presented:


	September 30, 2024		December 31, 2023
Finished goods	$	326.4	$	361.3
Work in process	74.7		73.5
Raw materials and supplies	353.3		384.9