禮恩派 (LEG) 2023 Q2 法說會逐字稿

Greetings, and welcome to the LEG 2Q 2023 Webcast and Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎參加 LEG 2023 年第二季度網絡廣播和收益電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Susan McCoy, SP, Investor Relations. Thank you. You may begin.

現在我很高興向大家介紹主持人蘇珊·麥考伊 (Susan McCoy)，她是投資者關係部 SP。謝謝。你可以開始了。

Good morning, and thank you for taking part in Leggett & Platt's Second Quarter Conference Call. On the call today are Mitch Dolloff, President and CEO; Ben Burns, Executive Vice President and CFO; and Steve Henderson, Executive Vice President and President of the Specialized Products and Furniture Boring and Textile Products segments; Tyson Hagale, Executive Vice President and President of the Bedding Products segment; Cassie Branscum, Senior Director of IR; and Kolina Talbert, Manager of IR.

早上好，感謝您參加 Leggett & Platt 第二季度電話會議。今天參加電話會議的是總裁兼首席執行官 Mitch Dolloff； Ben Burns，執行副總裁兼首席財務官； Steve Henderson，執行副總裁兼特種產品和家具鑽孔及紡織產品部門總裁； Tyson Hagale，執行副總裁兼床上用品部門總裁； Cassie Branscum，IR 高級總監；以及 IR 經理 Kolina Talbert。

The agenda for our call this morning is as follows: Mitch will start with a summary of the main points we made in yesterday's press release and discuss operating results and demand trends. Ben will cover financial details and address our outlook for 2023, and the group will answer any questions you have.

我們今天上午的電話會議議程如下：米奇將首先總結我們在昨天的新聞稿中提出的要點，並討論經營業績和需求趨勢。 Ben 將介紹財務細節並闡述我們對 2023 年的展望，該小組將回答您的任何問題。

This conference call is being recorded for Leggett & Platt and is copyrighted material. This call may not be transcribed, recorded or broadcast without our express permission. A replay is available from the IR portion of Leggett's website. We posted to the IR portion of the website yesterday's press release and the set of PowerPoint slides that contain summary financial information along with segment details. Those documents supplement the information we discuss on this call, including non-GAAP reconciliations.

本次電話會議由禮恩派 (Leggett & Platt) 錄製，屬於受版權保護的材料。未經我們明確許可，不得轉錄、錄製或廣播本次通話。 Leggett 網站的 IR 部分提供重播。我們在網站的投資者關係部分發布了昨天的新聞稿和一組 PowerPoint 幻燈片，其中包含摘要財務信息以及部門詳細信息。這些文件補充了我們在本次電話會議中討論的信息，包括非公認會計準則調節表。

I need to remind you that remarks today concerning future expectations, events, objectives, strategies, trends or results constitute forward-looking statements. Actual results or events may differ materially due to a number of risks and uncertainties, and the company undertakes no obligation to update or revise these statements.

我需要提醒您，今天有關未來預期、事件、目標、戰略、趨勢或結果的言論構成前瞻性陳述。由於許多風險和不確定性，實際結果或事件可能存在重大差異，公司不承擔更新或修改這些聲明的義務。

For a summary of these risk factors and additional information, please refer to yesterday's press release in the sections in our most recent 10-K and subsequent 10-Q entitled Risk Factors and forward-looking statements.

有關這些風險因素和其他信息的摘要，請參閱我們最近的 10-K 和隨後的 10-Q 標題為“風險因素和前瞻性陳述”的部分中的昨天新聞稿。

I'll now turn the call over to Mitch.

我現在將電話轉給米奇。

Good morning, and thank you for participating in our second quarter call. First, I would like to welcome Ben Burns, who stepped into the CFO role effective June 21. Ben has been with the company for 20 years and previously led our internal audit department, served as our Treasurer and most recently led our business support services functions, including procurement, logistics and risk.

早上好，感謝您參加我們的第二季度電話會議。首先，我要歡迎 Ben Burns，他於 6 月 21 日就任首席財務官一職。Ben 在公司工作了 20 年，之前領導過我們的內部審計部門，擔任過我們的財務主管，最近領導過我們的業務支持服務職能部門，包括採購、物流和風險。

Ben brings a deep knowledge of our business, strong financial capabilities and an ability to drive change that has benefited and will continue to benefit Leggett & Platt.

Ben 對我們的業務有著深入的了解、強大的財務能力以及推動變革的能力，這些已經並將繼續使 Leggett & Platt 受益。

Now turning to second quarter results. Sales in the quarter were down 8% versus second quarter 2022 from lower volume and raw material-related price decreases. Acquisitions added 3% to sales. The volume decline was driven by continued demand softness in residential end markets, partially offset by growth in automotive, aerospace and hydraulic cylinders.

現在轉向第二季度業績。由於銷量下降和原材料相關價格下降，本季度銷售額較 2022 年第二季度下降 8%。收購使銷售額增加了 3%。銷量下降的原因是住宅終端市場需求持續疲軟，但部分被汽車、航空航天和液壓缸的增長所抵消。

Second quarter earnings per share were $0.40. This included $4 million or $0.02 per share of gain from the net insurance proceeds from April tornado damage at a shared home furniture and bedding manufacturing facility. Excluding this item, adjusted earnings per share were $0.38. Earnings decreased primarily from lower volume in residential end markets and lower metal margin in our steel rod business.

第二季度每股收益為 0.40 美元。其中包括 4 月份龍捲風對共享家具和床上用品製造工廠造成的損失的淨保險收益收益，其中 400 萬美元或每股 0.02 美元。不計此項目，調整後每股收益為 0.38 美元。盈利下降主要是由於住宅終端市場銷量下降以及我們的鋼棒業務金屬利潤率下降。

Cash flow from operations was $111 million, up $21 million versus second quarter of 2022. We are lowering our full year guidance to reflect continued volatility in macroeconomic environment and low visibility in several of our end markets. Our previous guidance anticipated a modest improvement in residential end markets in the second half of the year. We are encouraged by the continued recovery in our industrial businesses, but have yet to see an upward trajectory in the residential markets.

運營現金流為 1.11 億美元，比 2022 年第二季度增加 2100 萬美元。我們正在降低全年指導，以反映宏觀經濟環境的持續波動以及幾個終端市場的低能見度。我們之前的指引預計下半年住宅終端市場將略有改善。我們對工業業務的持續復甦感到鼓舞，但尚未看到住宅市場的上升軌跡。

Moving on to our business segment results and outlook. Sales in our Bedding Products segment were down 18%. We previously expected 2023 market volume to be flat with modest improvement in the back half of the year. Although the market improved sequentially in May and June from seasonal lows in April, the second quarter was weaker than expected. In addition, signals from the broad market and customers are less optimistic than earlier in the year.

接下來是我們業務部門的業績和前景。我們的床上用品部門的銷售額下降了 18%。我們此前預計 2023 年市場成交量將持平，下半年將略有改善。儘管 5 月和 6 月市場較 4 月的季節性低點環比有所改善，但第二季度的表現弱於預期。此外，來自廣泛市場和客戶的信號不如今年早些時候樂觀。

We now expect demand to remain at or slightly below current levels. This suggests volume in the back half of the year will be down mid-single digits, and full year mattress consumption will be down high single digits versus 2022. This estimate results in consumption down 25% to 30% from the 2021 peak and at levels comparable to 2016.

我們現在預計需求將保持在或略低於當前水平。這表明今年下半年的銷量將下降中個位數，全年床墊消費量將比 2022 年下降高個位數。這一估計導致消費量較 2021 年峰值下降 25% 至 30%，並保持在水平水平與2016年相比。

In the quarter, our volume generally tracked the overall market, but there is some variability within specific product categories. Trade rod and wire volume declined year-over-year as industrial demand was strong until the third quarter of last year. Steel rod production through the first half of the year was consistent with initial plans. However, full year production is now expected to be approximately 25% below historical levels to align with demand versus our previous expectations of 20% below historical levels.

在本季度，我們的銷量總體上跟踪了整個市場，但特定產品類別之間存在一些變化。由於去年第三季度之前工業需求強勁，棒材和線材貿易量同比下降。上半年鋼棒產量與最初計劃一致。然而，目前預計全年產量將比歷史水平低約 25%，以適應需求，而我們之前的預期是比歷史水平低 20%。

Volume in U.S. spring was down 13% in the second quarter. Comfort Core unit volumes declined versus last year, but tracked near or positive to the overall market. Lower-priced open coil innersprings and wire foundations declined more, which we believe is indicative of broader market trends.

第二季度美國春季銷量下降 13%。 Comfort Core 單位銷量與去年相比有所下降，但接近或正向整體市場走勢。價格較低的開式線圈內置彈簧和鋼絲底座跌幅更大，我們認為這表明了更廣泛的市場趨勢。

Volume in Specialty Foam was up 8%. Successful efforts to diversify our customer base led to growth in finished mattress units and accessories such as mattress toppers.

特種泡沫銷量增長 8%。我們的客戶群多元化的成功努力導致了成品床墊單元和床墊罩等配件的增長。

As expected, metal margin narrowed in the first half of the year, and we still anticipate metal margin to be down mid-teens versus 2022.

正如預期，上半年金屬利潤率收窄，我們仍預計金屬利潤率將較 2022 年下降 15%左右。

Market volume continues to be the greatest headwind and impact to earnings and margin. However, our teams continue to work to improve internal capabilities and bring value to our customers despite the challenging environment.

市場容量仍然是對盈利和利潤率影響最大的阻力。然而，儘管環境充滿挑戰，我們的團隊仍繼續努力提高內部能力，為客戶帶來價值。

In recent years, we've strategically shifted our focus in the bedding market by expanding product capabilities and growing content at attractive price points. Our innerspring components business has moved more towards mid- to higher end price points and greater content within each unit.

近年來，我們通過擴大產品能力並以有吸引力的價格點增加內容，戰略性地將重點轉移到床上用品市場。我們的內置彈簧組件業務已更多地向中高端價格點和每個單元內的更多內容邁進。

Our Specialty Foam business allows us to produce specialty foam components and finished products for our branded partners. Consumer interest in adjustable beds continues to grow, providing us with an additional opportunity to increase content. This strategic approach enables us to innovate high-quality differentiated products for our customers and improve comfort for the end consumer.

我們的特種泡沫業務使我們能夠為我們的品牌合作夥伴生產特種泡沫組件和成品。消費者對可調節床的興趣持續增長，為我們提供了增加內容的額外機會。這種戰略方法使我們能夠為客戶創新高質量的差異化產品，並提高最終消費者的舒適度。

We intend to grow our market share and increase profitability by focusing on 3 key areas. First, we will continue to pursue opportunities to enhance our value proposition by offering product differentiation and reducing total mattress production costs for our OEM customers. For example, our new combination pocket combines perimeter Edge innersprings and specialty foam to create a fabric in case innerspring and foam column that minimizes motion disturbance from a sleeping partner and improves airflow.

我們打算通過重點關註三個關鍵領域來擴大市場份額並提高盈利能力。首先，我們將繼續尋求機會，通過為 OEM 客戶提供產品差異化和降低床墊總生產成本來增強我們的價值主張。例如，我們的新型組合口袋將 Perimeter Edge 內置彈簧和特種泡沫相結合，形成內置彈簧和泡沫柱的織物，最大限度地減少睡眠夥伴的運動干擾並改善氣流。

Eco-Base is another new product that allows our customers to streamline their manufacturing process, lower cost and reduced environmental impact by replacing commodity-based foam with a lighter polyester nonwoven material under a Comfort Core unit.

Eco-Base 是另一款新產品，通過在 Comfort Core 單元下用更輕的聚酯非織造材料取代商品泡沫，使我們的客戶能夠簡化製造流程、降低成本並減少對環境的影響。

Our second area of focus is improving specialty foams performance and continuing to improve costs. Continued integration of our foam and innerspring operations will drive opportunities for manufacturing savings and product development gains. And our third area of focus is maintaining our production flexibility and ensuring appropriate levels of inventory.

我們的第二個重點領域是提高特種泡沫性能並持續降低成本。我們的泡沫和內置彈簧業務的持續整合將帶來製造成本節約和產品開發收益的機會。我們的第三個重點領域是保持生產靈活性並確保適當的庫存水平。

Our competitive position is unique, from our vertical integration of steel rod and wire, specialty polyols and additives and efficient and flexible machine technology to innovative products that service our customers anywhere in the value chain, our bedding business is well positioned to bring value to our customers and end consumers.

我們的競爭地位是獨一無二的，從我們對鋼棒和線材、特種多元醇和添加劑以及高效靈活的機器技術的垂直整合，到為價值鏈中任何地方的客戶提供服務的創新產品，我們的床上用品業務處於有利地位，可以為我們的客戶帶來價值。客戶和最終消費者。

Sales in our Specialized Products segment increased 23% versus second quarter of 2022, driven by the Hydraulic Cylinders acquisition completed in August of last year and continued recovery in all 3 businesses. The July forecast for global automotive production shows 6.5% growth in the major markets in 2023 as the industry has seen stronger production recovery and inventory restocking than anticipated earlier in the year, while improving automotive industry production remains dynamic, supply chain, macroeconomic and geopolitical impacts bring volatility across different regions. Cost recovery is continuing in our automotive business, and we expect to make further progress as we move through the second half of the year.

受去年 8 月完成的液壓缸收購以及所有 3 項業務持續復甦的推動，我們的專業產品部門的銷售額較 2022 年第二季度增長了 23%。 7月份對全球汽車產量的預測顯示，2023年主要市場將增長6.5%，因為該行業的生產復甦和庫存補貨比今年早些時候的預期更為強勁，同時汽車行業產量的改善仍然充滿活力，供應鏈、宏觀經濟和地緣政治影響帶來不同地區的波動。我們的汽車業務正在繼續進行成本回收，我們預計下半年將取得進一步進展。

Strong end market demand in Hydraulic Cylinders is expected through the remainder of the year. Order backlogs in the Material Handling and heavy construction equipment market segments remain at elevated levels, but it started to moderate as our customer supply chain and labor issues have improved, allowing them to increase production levels.

預計今年剩餘時間液壓缸的終端市場需求將保持強勁。物料搬運和重型建築設備市場的訂單積壓仍處於較高水平，但隨著我們的客戶供應鍊和勞動力問題的改善，訂單積壓開始放緩，使他們能夠提高生產水平。

In our Aerospace business, we expect strong demand in the second half of the year as industry recovery continues. OEM backlogs remain strong. However, build rates fluctuate based on supply chain availability.

在我們的航空航天業務中，隨著行業持續復甦，我們預計下半年需求將強勁。 OEM 訂單積壓依然強勁。然而，構建率會根據供應鏈的可用性而波動。

Sales in our Furniture, Flooring and Textile Products segment were down 14% versus second quarter of 2022. Home furniture demand remained slow during the quarter with high-end price point softening. The lower demand also impacted volume in fabric converting. While inventory levels across the market continue to improve, we expect demand to remain soft through the third quarter with the potential for some improvement in the fourth quarter.

與 2022 年第二季度相比，我們的家具、地板和紡織產品部門的銷售額下降了 14%。本季度家用家具需求仍然緩慢，高端價格點疲軟。需求下降也影響了面料加工量。儘管整個市場的庫存水平繼續改善，但我們預計第三季度需求將保持疲軟，第四季度可能會有所改善。

Work Furniture demand for both contract and residential end-use products remained at low levels consistent with previous quarters. We expect demand to continue at these levels for the rest of the year.

合同和住宅最終用途產品的工作家具需求與前幾個季度一樣保持在較低水平。我們預計今年剩餘時間需求將繼續保持在這些水平。

In Flooring products, residential demand improved sequentially, but remained slow in what is typically a seasonally stronger quarter, largely due to softer remodeling activity. Hospitality demand continues to improve, but remains below pre-pandemic levels.

在地板產品方面，住宅需求環比有所改善，但在通常季節性強勁的季度中仍然緩慢，這主要是由於改造活動疲軟。酒店需求持續改善，但仍低於大流行前的水平。

In Geo Components, we expect slower demand in the back half of the year as home improvement retail has softened and civil construction is slower than anticipated. We are maintaining our emphasis on improving areas within our control and proactively addressing the effects of the macroeconomic impacts on our businesses.

在地理組件方面，我們預計下半年需求將放緩，因為家居裝修零售疲軟且土木建築施工速度慢於預期。我們仍將重點放在改善我們控制範圍內的領域，並積極應對宏觀經濟對我們業務的影響。

Our employees have done an excellent job in driving these efforts, which include engaging with our customers on new product opportunities, some of which we mentioned earlier in our Bedding segment commentary, improving operating efficiency as we have done in a North American automotive facility as progress continues in specialty foam and driving strong cash management as demonstrated by our working capital improvement and year-to-date operating cash flow of $207 million. Our focused execution and enduring fundamentals position Leggett & Platt for long-term success.

我們的員工在推動這些努力方面做得非常出色，其中包括與我們的客戶就新產品機會進行互動（其中一些我們之前在床上用品部門評論中提到過），提高了運營效率，就像我們在北美汽車工廠所做的那樣我們的營運資本改善和年初至今 2.07 億美元的運營現金流證明了我們繼續致力於特種泡沫領域並推動強有力的現金管理。我們專注的執行力和持久的基本面使 Leggett & Platt 能夠取得長期成功。

I'll now turn the call over to Ben.

我現在將電話轉給本。

Thank you, Mitch, and good morning, everyone. In second quarter, we generated cash from operations of $111 million, $21 million higher than the $90 million we generated in the second quarter of 2022. This increase reflects working capital improvements, partially offset by lower earnings. We continue to closely control all elements of working capital. We ended the quarter with adjusted working capital as a percentage of annualized sales of 15.2%. Cash from operations is still expected to be $450 million to $500 million in 2023.

謝謝你，米奇，大家早上好。第二季度，我們從運營中產生了 1.11 億美元的現金，比 2022 年第二季度的 9000 萬美元增加了 2100 萬美元。這一增長反映了營運資本的改善，但部分被收入下降所抵消。我們繼續密切控制營運資金的所有要素。本季度結束時，調整後的營運資本佔年化銷售額的百分比為 15.2%。預計 2023 年運營現金仍為 4.5 億至 5 億美元。

We ended second quarter with total debt of $2 billion, including $224 million of commercial paper outstanding and no significant maturities until November 2024. Net debt to trailing 12-month adjusted EBITDA was 3.1x at quarter end. The ratio has increased as EBITDA has declined in recent quarters, but we expect to continue to comfortably meet our debt covenant requirements and maintain sufficient liquidity. We are focused on maintaining investment-grade debt ratings and expect this ratio to improve as earnings increase over time and we will use excess cash to pay down debt.

第二季度末，我們的總債務為 20 億美元，其中包括 2.24 億美元的未償商業票據，並且在 2024 年 11 月之前沒有重大到期。截至季度末，淨債務與過去 12 個月調整後 EBITDA 的比率為 3.1 倍。隨著近幾個季度 EBITDA 下降，該比率有所上升，但我們預計將繼續輕鬆滿足我們的債務契約要求並保持充足的流動性。我們專注於維持投資級債務評級，並預計隨著收益隨著時間的推移而增加，這一比率將會改善，我們將使用多餘的現金來償還債務。

Total liquidity was $632 million at June 30, comprised of $272 million of cash on hand and $360 million in capacity remaining under our revolving credit facility. In May, our Board of Directors increased the second quarter dividend to $0.46 per share, $0.02 or 4.5% higher than last year's second quarter dividend. At an annual indicated dividend of $1.84, the yield of 6.2% based upon Friday's closing price, one of the highest yields among the dividend kings.

截至 6 月 30 日，流動性總額為 6.32 億美元，其中包括 2.72 億美元的手頭現金和 3.6 億美元的循環信貸額度下的剩餘能力。 5 月份，我們的董事會將第二季度股息提高至每股 0.46 美元，比去年第二季度股息高出 0.02 美元，即 4.5%。年度指示股息為 1.84 美元，按週五收盤價計算，收益率為 6.2%，是股息之王中收益率最高的之一。

This year marks our 52nd consecutive year of annual increases. We continue to deploy our cash in a balanced and disciplined manner. For the full year 2023, we expect capital expenditures of approximately $100 million to $130 million, dividends of approximately $240 million and minimal spending for acquisitions and share repurchases as we prioritize debt reduction in the near term.

今年是我們連續 52 年實現年度增長。我們繼續以平衡和有紀律的方式部署我們的現金。 2023 年全年，我們預計資本支出約為 1 億至 1.3 億美元，股息約為 2.4 億美元，收購和股票回購支出最低，因為我們短期內優先考慮削減債務。

Our long-term priorities for uses of cash remain unchanged. They include in order of priority, funding organic growth, paying dividends, funding strategic acquisitions and repurchasing shares with available cash.

我們使用現金的長期優先事項保持不變。按優先順序排列，包括為有機增長提供資金、支付股息、為戰略收購提供資金以及用可用現金回購股票。

As announced yesterday, we are lowering our full year sales and earnings guidance. 2023 sales are now expected to be $4.75 billion to $4.95 billion or down 4% to 8% versus 2022. The guidance reflects volumes at the midpoint down mid-single digits with Bedding Products down mid- to high single digits, specialized products up high single digits and Furniture, Flooring and Textile Products down mid- to high single digits.

正如昨天宣布的，我們將降低全年銷售額和盈利指引。目前預計 2023 年銷售額為 47.5 億美元至 49.5 億美元，較 2022 年下降 4% 至 8%。該指引反映銷量中點下降中個位數，其中床上用品下降中個位數至高個位數，專業產品上升高個位數家具、地板和紡織產品下降了中高個位數。

The guidance also assumes the impact of deflation and currency combined is expected to reduce sales mid-single digits and acquisitions completed in 2022 should add approximately 3% to sales in 2023.

該指引還假設，通貨緊縮和貨幣匯率的綜合影響預計將使銷售額減少中個位數，2022 年完成的收購將使 2023 年銷售額增加約 3%。

2023 earnings per share are now expected to be in the range of $1.50 to $1.70, including approximately $0.05 per share of gain from net insurance proceeds we expect to recognize for the year.

目前預計 2023 年每股收益將在 1.50 美元至 1.70 美元之間，其中包括我們預計今年將確認的淨保險收益收益，每股約 0.05 美元。

Full year adjusted earnings per share are now expected to be $1.45 to $1.65, with the decrease versus prior guidance, primarily reflecting lower expected volume in residential end markets. EPS guidance assumes a full year effective tax rate of 24%, depreciation and amortization of approximately $200 million, net interest expense of approximately $85 million and fully diluted shares of $137 million. Based upon this guidance framework, our full year adjusted EBIT margin range is expected to be 7.3% to 7.7%. EBIT margins continue to be pressured by several factors with the largest being lower volume primarily in our residential end markets, operational inefficiencies and specialty foam and the inflationary impact on margin percentages as we raised selling prices to recover higher input costs.

目前預計全年調整後每股收益為 1.45 美元至 1.65 美元，較之前的指引有所下降，主要反映了住宅終端市場的預期銷量下降。 EPS指引假設全年有效稅率為24%，折舊和攤銷約為2億美元，淨利息支出約為8500萬美元，完全稀釋後的股份為1.37億美元。根據這一指導框架，我們全年調整後的息稅前利潤率範圍預計為 7.3% 至 7.7%。息稅前利潤率繼續受到多種因素的壓力，其中最大的因素是我們的住宅終端市場的銷量下降、運營效率低下和特種泡沫，以及我們提高銷售價格以收回更高的投入成本時對利潤率的通脹影響。

Important drivers of margin improvement going forward will be stronger volume, continued efficiency and cost improvements and pricing discipline as raw material costs fluctuate.

隨著原材料成本波動，未來利潤率改善的重要驅動力將是銷量增加、持續效率和成本改善以及定價紀律。

Longer term, we expect innovation to drive our margins higher as we work closely with our customers to develop differentiated products. We are committed to maintaining our long-held financial strength. This discipline along with the tenacity and dedication of our employees allows us to navigate uncertain times and capture long-term opportunities.

從長遠來看，隨著我們與客戶密切合作開發差異化產品，我們預計創新將提高我們的利潤率。我們致力於維持我們長期持有的財務實力。這種紀律以及員工的堅韌和奉獻精神使我們能夠度過不確定的時期並抓住長期機會。

With those comments, I'll turn the call back over to Susan.

有了這些評論，我會將電話轉回給蘇珊。

That concludes our prepared remarks. We thank you for your attention, and we're glad to answer your questions. Operator, we're ready to begin the Q&A session.

我們準備好的發言到此結束。感謝您的關注，我們很高興回答您的問題。接線員，我們準備開始問答環節了。

(Operator Instructions) The first question is from Susan Maklari of Goldman Sachs.

（操作員說明）第一個問題來自高盛的 Susan Maklari。

My first question is on the bedding business. It's encouraging to hear you talk about some of the new products and some of the innovation that is coming out. As you think about the recovery in that business, can you talk a bit about the role that those new products might play? And how -- what stage of their life cycles those are in? And how we should be thinking about the potential ramp there?

我的第一個問題是關於床上用品業務。聽到您談論一些新產品和即將出現的創新，我感到很鼓舞。當您思考該業務的複蘇時，您能否談談這些新產品可能發揮的作用？它們處於生命週期的哪個階段？我們應該如何考慮那裡的潛在增長？

Yes. Very good question. Thanks for asking that. Tyson, I'll let you take that one.

是的。非常好的問題。謝謝你這麼問。泰森，我讓你拿走那個。

Good morning, Susan, and thanks for the question. Those are products that Mitch covered in his opening comments that we've been working on for a while. I think we've talked about this in some of our past conference calls that during the pandemic, there was a heavy, heavy focus on supply. And then as the supply chain started to get more stable, we had more interest from some of our customers on working on new products. And so those are still both early life cycle products. They've been in our pipeline for a while, but they are now being commercialized. We are selling them into the market. It will -- so they're still early stage. It will take time for them to grow, but there's good strong customer interest in those products.

早上好，蘇珊，謝謝你的提問。這些是米奇在他的開場評論中介紹的產品，我們已經研究了一段時間。我想我們在過去的一些電話會議中已經討論過這一點，在大流行期間，我們非常非常關注供應。然後，隨著供應鏈開始變得更加穩定，我們的一些客戶對開發新產品產生了更大的興趣。因此，這些仍然是早期生命週期產品。它們已經在我們的管道中有一段時間了，但現在正在商業化。我們正在將它們出售到市場上。會的——所以它們仍處於早期階段。他們的成長需要時間，但客戶對這些產品有著濃厚的興趣。

But we're also very mindful of as we ramp those up that we want to support our customers really well, as we roll them out. So I'd say a gradual improvement, but they're good examples of the types of innovation that we've worked on for a long time.

但當我們增加這些功能時，我們也非常注意，當我們推出這些功能時，我們希望能夠很好地支持我們的客戶。所以我想說的是逐步改進，但它們是我們長期以來致力於創新類型的好例子。

If you think back historically, it's a continuation of where we've been with the growth of Comfort Core and then perimeter Edge, Comfort Core and then now products like combination pocket and eco-based, where we're adding content, not just to add it, but it adds differentiation or more comfort for end consumers, but also value for our OEM customers, where we can help them either reduce labor cost or additional content to make products more easy to manufacture. So I think it's a continuation of where we've been hedging for a long time, and we continue to add those types of products into our pipeline.

如果你回顧歷史，這是我們一直以來的發展的延續，隨著 Comfort Core 的發展，然後是 Perimeter Edge、Comfort Core，然後是現在的組合口袋和生態型產品，我們在這些產品中添加內容，而不僅僅是為了添加它，但它為最終消費者增加了差異化或更多舒適度，同時也為我們的 OEM 客戶帶來了價值，我們可以幫助他們降低勞動力成本或增加內容，使產品更易於製造。所以我認為這是我們長期以來對沖的延續，我們繼續將這些類型的產品添加到我們的管道中。

Another area that Mitch didn't mention, but I think I'd like to add is innovation from our specialty foam business as well. We have some good products in the pipeline there that both help with the weight of specialty foam products and then also sustainability. So those are also products that we can add into either component form or finished products through specialty foam. And all of these are pretty technical and goes well with our integration all the way back to our machine business because they are pretty complicated in things that we have to apply machine technology all the way through our manufacturing to provide a good product for our customers.

米奇沒有提到但我想補充的另一個領域是我們特種泡沫業務的創新。我們正在開發一些優質產品，這些產品既有助於減輕特種泡沫產品的重量，又有助於可持續性。因此，我們也可以通過特種泡沫將這些產品添加到組件形式或成品中。所有這些都非常技術性，並且與我們的集成一直很好地回到我們的機器業務，因為它們非常複雜，我們必須在整個製造過程中應用機器技術，以便為我們的客戶提供優質的產品。

Okay. That's great color, Tyson. And then maybe switching gears a bit and thinking about the specialized segment. You did see a nice recovery there. It sounds like auto production is slow, but surely coming back. As you think about the different geographies and the different stages of the global macros are perhaps in as it relates to auto, how are you thinking about the further trajectory of that? And -- are there any areas that are perhaps leading versus lagging where you can continue to see a nice lift as things sort of move along?

好的。這顏色真棒，泰森。然後也許會稍微轉換一下思路，思考一下專業領域。你確實看到那裡恢復得很好。聽起來汽車生產速度很慢，但肯定會回來。當您考慮與汽車相關的全球宏觀的不同地理位置和不同階段時，您如何考慮其進一步的發展軌跡？而且，是否有任何領域可能領先而不是落後，隨著事情的發展，您可以繼續看到良好的提升？

Yes. Thanks, Susan. It has been a little bit dynamic across different regions for a while now. I'd say that probably the case that North America and Europe are the most stable right now, and we see continued improvement, and it's really been in China and Asia where it's been a little bit more volatile.

是的。謝謝，蘇珊。一段時間以來，不同地區的情況都有些動態。我想說，北美和歐洲目前可能是最穩定的，我們看到持續改善，而中國和亞洲的情況確實更加不穩定。

You've seen some of the shift to EVs especially in China that has created a little bit of disruption. But the outlook is still very strong. The year-over-year production change for this year is now up to about 6.5% based on the IHS data, and that's up from little over 4% back in April when we were there. So I think that also indicates some of the dynamics that we've seen, right? And that does create some inefficiencies occasionally, and there's still some supply chain issues. But as you said, it is getting better.

您已經看到一些向電動汽車的轉變，尤其是在中國，這造成了一些破壞。但前景仍然非常強勁。根據 IHS 數據，今年的產量同比變化目前高達 6.5% 左右，而 4 月份我們在那裡時的產量略高於 4%。所以我認為這也表明了我們所看到的一些動態，對嗎？這偶爾會造成一些低效率，而且仍然存在一些供應鏈問題。但正如你所說，情況正在好轉。

I think the longer-term outlook over the next 4 years or so is a CAGR of just under 3%, maybe, and so I think there is continued growth out there and will be continued stay -- stability and, frankly, opportunities for us to increase operational efficiency there too. So in 2019, total production was about 75 million vehicles in the major markets. And the latest forecast indicates we get there in 2026. So we still have some room to improve.

我認為未來 4 年左右的長期前景可能是複合年增長率略低於 3%，所以我認為那裡會持續增長並將繼續保持穩定，坦率地說，這對我們來說是機會也提高運營效率。因此，2019年主要市場的總產量約為7500萬輛。最新預測表明我們將在 2026 年實現這一目標。因此我們仍有一些改進的空間。

Okay. That's perfect. And then I'm going to sneak one more in, which is welcome Ben and congrats on your new role. Perhaps you can tell us as you take on the role of CFO, what will be different? What will stay the same? And perhaps anything that you're more focused on as you come into this new position?

好的。那很完美。然後我要再偷偷地介紹一下，歡迎本，並祝賀你擔任新角色。也許您可以告訴我們，當您擔任 CFO 時，會有什麼不同？什麼會保持不變？也許當您進入這個新職位時，您更關注的是什麼？

Yes. Thanks, Susan. Thanks for the comments. Yes, I'd say just very excited to step into this role and appreciate to have the opportunity to serve as our CFO. Some things that I think will stay the same. Clearly, our high level of integrity, transparency and access for the investment community. Really, I'm very aligned with Leggett's values or more personal values. So those are really important to me. Also, you'll see a commitment to our disciplined uses of cash that will not change, so that will be very consistent.

是的。謝謝，蘇珊。感謝您的評論。是的，我想說非常高興能夠擔任這個角色，並很高興有機會擔任我們的首席財務官。我認為有些事情會保持不變。顯然，我們對投資界的誠信、透明度和准入水平很高。確實，我非常認同禮恩派的價值觀或更個人化的價值觀。所以這些對我來說真的很重要。此外，您還會看到我們對嚴格使用現金的承諾不會改變，因此將非常一致。

Also I have a strong focus on driving shareholder value, driving strong cash flow and really being focused on margin improvement.

此外，我還非常注重推動股東價值、推動強勁的現金流以及真正關注利潤率的提高。

As I come into this role and think about how I can drive some value, I think about developing very close connection with our businesses, really a partnership and driving results. I have some strong relationships with our business leaders that I've developed over the years in some prior roles and really look forward to just partnering with those leaders and collaborating with them and just thinking about how it can best help serve them in their businesses.

當我擔任這個角色並思考如何推動一些價值時，我考慮與我們的業務建立非常密切的聯繫，真正的合作夥伴關係並推動成果。我與我們的業務領導者建立了一些牢固的關係，這些關係是我多年來在之前的一些職位中建立的，我真的很期待與這些領導者合作並與他們合作，並思考如何最好地幫助他們在業務中服務。

I'll also be focused on working with our teams and thinking about how we modernize our finance function and really looking to drive efficiencies, and then over time, thinking about how do we add technology and make better use of that so that we can spend more time thinking about value creation and how we drive that and just optimizing those routine process, so we don't spend quite as much time on them.

我還將專注於與我們的團隊合作，思考如何實現財務職能現代化並真正尋求提高效率，然後隨著時間的推移，思考如何添加技術並更好地利用技術，以便我們可以花更多的時間思考價值創造以及我們如何推動價值創造，並優化這些日常流程，因此我們不會在它們上花費太多時間。

So really excited to jump in and get to work, and I appreciate the question.

能夠投入工作真的很興奮，我很欣賞這個問題。

The next question is from Bobby Griffin of Raymond James.

下一個問題來自雷蒙德·詹姆斯的鮑比·格里芬。

First up for me, I wanted to maybe go back to the Bedding Products segment and kind of just understand a little bit more of the margin drivers there. I know there's kind of basically 2 aspects going on. We had a little bit lower year-over-year metal margins as well as some pretty significant volume decline. So, when you look at the compression in EBIT margins in that business in the quarter, can you maybe help just provide some color on the biggest driver? Was it 2/3 volume and 1/3 the metal margins or is it even more volume related? Just trying to get some context around the impact from really the volume declines.

首先對我來說，我想也許回到床上用品領域，稍微了解一下那裡的利潤驅動因素。我知道基本上有兩個方面正在發生。我們的金屬利潤率同比略有下降，而且銷量也出現了相當大的下降。因此，當您查看本季度該業務的息稅前利潤率壓縮情況時，您能否幫忙提供一些關於最大驅動因素的信息？是 2/3 的交易量和 1/3 的金屬利潤，還是與交易量的關係更大？只是想了解一下成交量下降帶來的實際影響。

Sure. Bobby, this is Tyson. So year-over-year, it's more heavily weighted towards metal margin, probably the inverse of what you threw out. So middle margin, the majority are probably approaching 2/3 of the remaining 1/3 being volume.

當然。鮑比，這是泰森。因此，與去年同期相比，它對金屬利潤的權重更大，可能與你放棄的相反。所以中間利潤，大多數可能接近剩餘 1/3 的 2/3 是成交量。

Okay. And then when -- Tyson, when we think about that, I mean, the metal margin is still pretty elevated versus historical standard, so I guess the next question off of that because my guess of 2/3, 1/3 was backwards. I mean how do we protect margins? If we are moving our way back towards maybe a little bit more of a historical standard because that is a pretty sizable impact.

好的。然後，泰森，當我們考慮這一點時，我的意思是，與歷史標準相比，金屬利潤率仍然相當高，所以我猜下一個問題是因為我對 2/3、1/3 的猜測是倒退的。我的意思是我們如何保護利潤？如果我們要回到歷史標準，因為這是一個相當大的影響。

Sure. And at this point, we've talked about this in the past as well. We have seen metal margins start to decline versus last year, it's down somewhere mid-teens, which is pretty close to our expectation that we shared at the beginning of the year. .

當然。在這一點上，我們過去也討論過這個問題。我們看到金屬利潤率與去年相比開始下降，下降到十幾歲左右，這與我們年初的預期非常接近。 。

At this point, our thought is that we'll probably see the remainder of the year to be at pretty steady levels. When we see a change in rod pricing, it's pretty well mirrored by scrap. Part of that is being driven just by some of the industry dynamics around increased conversion costs, just inflation in utilities, labor, other consumables, and then just the general supply and demand environment around steel products in the U.S.

目前，我們的想法是，我們可能會看到今年剩餘時間保持在相當穩定的水平。當我們看到棒材價格發生變化時，廢鋼也很好地反映了這一變化。部分原因是圍繞轉換成本增加的一些行業動態，公用事業、勞動力和其他消費品的通脹，以及美國鋼鐵產品的總體供需環境。

So we still think through the last half of the year, we see some consistency there. But longer term, really hard to predict. But we have a lot of things that we're working on around improving profits and margins. The #1 been hit it, and I know we've talked about this for a while, but it's by far volume. That's the biggest driver and -- that we have around profitability and margins.

所以我們仍然思考今年下半年，我們看到了一些一致性。但從長遠來看，真的很難預測。但我們正在努力提高利潤和利潤率。排名第一的已經達到了，我知道我們已經討論過這個問題有一段時間了，但到目前為止還只是數量。這是我們圍繞盈利能力和利潤率實現的最大驅動力。

Additionally, we've covered this before, too, but operational improvements in ECS, also another big area for some work. We've taken a lot of actions so far even as the market has been soft. Our U.S. Spring business has been busy reducing both fixed and semi-variable costs. A lot of those, we think will stick even as volume improves. We started making some progress around our material cost in our Specialty Foam business, and also diversifying some of our customer base. So those are things that even in the short run, we feel like we're going to start getting some benefit from.

此外，我們之前也介紹過這一點，但 ECS 的操作改進也是一些工作的另一個重要領域。到目前為止，即使市場疲軟，我們也採取了很多行動。我們的美國春季業務一直致力於降低固定和半可變成本。我們認為，即使交易量有所改善，其中很多仍將持續存在。我們開始在特種泡沫業務的材料成本方面取得一些進展，並使我們的一些客戶群多樣化。因此，即使在短期內，我們也覺得我們將開始從中受益。

And we have had some salaried headcount reductions as well as some small facility consolidations, nothing that would impair our ability to support our customers, but just help us manage and reduce costs.

我們削減了一些帶薪員工人數，並進行了一些小型設施整合，這不會削弱我們支持客戶的能力，而只會幫助我們管理和降低成本。

We still have a lot of opportunities through operational improvements at ECS that we're working hard on. Our teams are really working through root causes and just finding different ways to reduce some of our costs and then additional synergies in both development and cost savings through U.S. Spring and ECS. So we have a lot of things that we're working on to help us with those things, and we're confident we'll get back to the profitability levels we've had in the past.

通過我們正在努力改進 ECS 的運營，我們仍然有很多機會。我們的團隊正在真正解決根本原因，只是尋找不同的方法來降低我們的一些成本，然後通過 U.S. Spring 和 ECS 在開發和成本節約方面產生額外的協同效應。因此，我們正在做很多事情來幫助我們解決這些問題，我們有信心我們將恢復到過去的盈利水平。

Okay. I appreciate that. And maybe my second question, I think Tyson is probably might stay with you, too, because it is on ECS. But is the volume growth actually surprised me was pretty nice this quarter at 8%, was there -- is the operational inefficiencies is really more on cost? Or was there some uniqueness this quarter from a volume standpoint that might not be valuable for us to kind of read that 8% as a true number?

好的。我很感激。也許我的第二個問題，我認為泰森可能也會留在你身邊，因為它在 ECS 上。但是，本季度銷量增長 8% 相當不錯，真的讓我感到驚訝嗎？運營效率低下是否真的更多地取決於成本？或者從數量的角度來看，本季度是否有一些獨特之處，對於我們將 8% 視為真實數字可能沒有價值？

No. We are seeing volume improvements. As we've talked about, the diversification of our customer business is important. As we saw the market softened across betting, it was even more severe for ECS, just where we're aligned with our customers, more on the digitally native customers that had an even greater decline overall in the market than the rest.

不。我們看到銷量有所改善。正如我們所討論的，我們客戶業務的多元化非常重要。當我們看到博彩市場疲軟時，ECS 的情況更加嚴峻，我們與客戶保持一致，更多的是數字原生客戶，他們在市場上的整體下滑幅度比其他客戶更大。

So a lot of our efforts in trying to partner with some new customers, even as the market slow has allowed us to grow our business. And though it's going to take a while for things to really recover just given the softness, we are seeing volume improvements from where we have been.

因此，即使市場放緩，我們仍努力與一些新客戶合作，從而使我們的業務得以發展。儘管考慮到經濟疲軟，情況需要一段時間才能真正恢復，但我們看到成交量較之前有所改善。

And we are making some improvements, most specifically on material costs, but we also have some offsets to that. We're obviously looking at the long run, so we are taking on some onetime costs as we start up some new equipment and programs and go through some facility changes. They're also impacting us in the short run, but we think will pay off in the long run.

我們正在做出一些改進，特別是在材料成本方面，但我們也對此進行了一些補償。顯然，我們著眼於長期，因此，當我們啟動一些新設備和項目並進行一些設施改造時，我們會承擔一些一次性成本。它們也會在短期內影響我們，但我們認為從長遠來看會得到回報。

On the volume side, right, we still have ways to go to make up that D&B volume that's declining, but the new programs, as you talked about, that's an opportunity. It's both in finished mattresses as well as accessories, right?

在銷量方面，我們仍然有辦法彌補 D&B 銷量的下降，但正如您所說，新計劃是一個機會。它既存在於成品床墊中，也存在於配件中，對吧？

And I guess lastly for me is just on the balance sheet. You guys missed about in the prepared remarks, leverage ticked up a tiny bit with the corresponding EBITDA. But you're kind of guiding for some cash flow here for the back half of the year. Do you have any type of near-term target? Is it possible to see the net leverage get back under 3x by the end of the year? Or any type of commentary you want to add there?

我想最後對我來說只是在資產負債表上。你們在準備好的評論中錯過了，槓桿率與相應的 EBITDA 略有上升。但你在某種程度上為今年下半年的一些現金流提供了指導。您有任何類型的近期目標嗎？年底淨槓桿率有可能回到3倍以下嗎？或者您想在那裡添加任何類型的評論？

Yes, Ben, I'll let you take that one and note too that that's our covenant calculation on leverage is a little bit different, too, right?

是的，本，我會讓你接受這個，並請注意，我們對槓桿的契約計算也有點不同，對嗎？

Yes. It's a great question. So, Yes. We'd say we're near the peak of our leverage, we think, and a potential to go up maybe modestly in the third quarter, but really in a similar range. And then we'd expect that ratio to begin to improve by the end of the year and continue to improve into 2024.

是的。這是一個很好的問題。所以，是的。我們認為，我們的槓桿率已接近峰值，第三季度可能會小幅上升，但實際上處於相似的範圍內。我們預計這一比率將在今年年底開始改善，並持續改善到 2024 年。

And as Mitch just mentioned, our debt covenant calculation is a bit different than what we report publicly and just a little bit more favorable for us. So there's a little bit more headroom there than the 3.1x measure would indicate, so but we don't have a specific target right now, but we are committed to being a strong investment-grade company, which, in our view, from a long-term perspective means having net debt-to-EBITDA in the 2.5x and under range.

正如米奇剛才提到的，我們的債務契約計算與我們公開報告的有所不同，只是對我們更有利一些。因此，這裡的空間比 3.1 倍衡量標準所顯示的要多一些，所以但我們現在沒有具體的目標，但我們致力於成為一家強大的投資級公司，在我們看來，從長期視角意味著淨債務與 EBITDA 之比在 2.5 倍及以下範圍內。

Okay. I appreciate the details and all the transparency, best luck here in the third quarter.

好的。我很欣賞細節和所有的透明度，祝第三季度好運。

The next question is from Keith Hughes of Truist Securities.

下一個問題來自 Truist Securities 的 Keith Hughes。

My question is in Bedding Products as well. In terms of pricing, second half of the year. We're going to see similar declines than what we saw in the first half. I guess my question is how are you expecting steel to play out?

我的問題也涉及床上用品。在定價方面，下半年。我們將看到與上半年類似的下降。我想我的問題是你預計鋼鐵業的表現如何？

Keith, this is Tyson. Yes. So just like what we covered with Bobby, probably still some continuation of where we've been in terms of metal margin. As we see some deflation in rod costs that passed through to innersprings, we've seen mirrored cost in scrap. So we see more of a continuation of our trend around metal margin. You can see in the supplemental slides, the deflation that we've seen in chemical costs, low teens overall versus last year. At this point, we see that being pretty stable. Many reps are down kind of tends to be passed through pricing there as well.

基思，這是泰森。是的。因此，就像我們在 Bobby 中介紹的那樣，可能仍然是我們在金屬利潤方面的延續。當我們看到桿成本的一些下降傳遞到內置彈簧時，我們也看到了廢品成本的鏡像。因此，我們看到金屬利潤率的趨勢將會延續。您可以在補充幻燈片中看到，我們在化學品成本方面看到了通貨緊縮，總體與去年相比低了十幾歲。在這一點上，我們看到它相當穩定。許多銷售代表的業績下降也往往是通過定價來傳遞的。

Pricing impacts from steel. There, we have a large portion, the majority of our business covered by contracts where indexes to manage our pricing, and for those that aren't, we'll be going down would cost just as we were going up.

鋼鐵價格的影響。在那裡，我們有很大一部分，我們的大部分業務都由合同覆蓋，其中索引來管理我們的定價，而對於那些沒有的人，我們將下降，成本就像我們上升一樣。

So you haven't anniversaried the decline. I guess I'm just trying to figure out when this is going to trend down towards 0.

所以你還沒有經歷衰退週年紀念日。我想我只是想弄清楚這個數字什麼時候會下降到 0。

I think we still have a long way. I mean, I'd say both on rod pricing, chemical pricing are still way, way above, I think, pre-pandemic kind of levels, is that right, Tyson?

我認為我們還有很長的路要走。我的意思是，我認為棒材定價和化學品定價仍然遠遠高於大流行前的水平，對嗎，泰森？

That's right. And for sure, on metal margins, if you think about this time last year, we were still seeing increasing rod pricing and just overall steel cost in the market didn't really start to see the declines happen until late third quarter and fourth quarter.

這是正確的。當然，就金屬利潤而言，如果你想想去年的這個時候，我們仍然看到棒材價格不斷上漲，而市場上的整體鋼鐵成本直到第三季度末和第四季度才真正開始出現下降。

Yes. And I guess I would say if we have to guess that it seems like we're seeing some modest deflation, but not radical moves for the most part. We see some things going up and down. A good example would be hot rolled steel. We use a lot of it in our home furniture business. For example, in the first quarter, it went up quite a bit. And then in second quarter, it's come back down, not quite as much. So I think we'd see specialty chemicals tend to be a little bit volatile, but I would say that things have normalized a little bit. They continue to move probably a little bit more down than up, but not in really radical ways.

是的。我想我會說，如果我們不得不猜測，我們似乎看到了一些溫和的通貨緊縮，但在大多數情況下都沒有出現激進的舉動。我們看到一些事情有起有落。一個很好的例子是熱軋鋼。我們在家具業務中大量使用它。例如，第一季度，它上漲了很多。然後在第二季度，它又回落了，但幅度沒有那麼大。因此，我認為我們會看到特種化學品往往會有點波動，但我想說，情況已經正常化了一點。他們繼續下跌的幅度可能比上漲的幅度要大一些，但並不是以真正激進的方式。

Okay. And one other question, if I look at your commentary for the year in Bedding Products, versus furniture, flooring and textiles. It does look like in the second half that furniture, flooring and textiles is trending towards a flat or low single-digit decline number. But Bedding space is still pretty weak. It seems unusual those 2 categories are moving in different directions. So number one, is that correct directionally? And what do you think the difference between them is?

好的。還有一個問題，如果我看一下您對今年床上用品、家具、地板和紡織品的評論。看起來下半年家具、地板和紡織品的銷量確實呈持平或低個位數下降的趨勢。但床上用品空間仍然相當薄弱。這兩個類別朝著不同的方向發展似乎很不尋常。那麼第一，方向正確嗎？您認為它們之間的區別是什麼？

Yes. Steve, I'll let you jump in here as well. But I think it's a little bit more to do with our portfolio. We have a pretty diverse portfolio in FF&T. So home furniture, I think, is moving pretty close to the Bedding market, very much residential end market. Work Furniture is a little bit different. It is some residential, but also some office-based products. And so it's down probably after coming back to life. Last year, it fell down and is pretty low.

是的。史蒂夫，我也讓你跳到這裡。但我認為這與我們的投資組合有更多關係。我們在 FF&T 領域擁有相當多樣化的產品組合。因此，我認為，家用家具正在非常接近床上用品市場，非常接近住宅終端市場。工作家具有點不同。它有一些住宅，也有一些辦公為主的產品。所以復活後它可能會下降。去年，它下降了，而且很低。

But then flooring and our textile businesses are quite a bit different. And so flooring, I think, a little bit stronger. We're not seeing the same kind of increase that we would normally see seasonally, but it's holding up. We see some other areas, they are doing better.

但地板和我們的紡織業務有很大不同。所以我認為地板要堅固一點。我們沒有看到通常季節性的增長，但它仍在持續。我們看到其他一些領域，他們做得更好。

Textiles for a big portion of that is the Geo components that is more almost industrial facing, so civil construction, private construction, things like that. So I think that's probably what drives most of the change.

其中很大一部分紡織品是面向工業的地理組件，例如土木建築、私人建築等。所以我認為這可能是推動大部分變化的原因。

The next question is from Peter Keith of Piper Sandler.

下一個問題來自 Piper Sandler 的 Peter Keith。

Just looking at maybe the weakness in the furniture and bedding segments that's resulting in the guide down, it looks like the volume trends came in pretty similar to Q1, but curious what the trends looked like through the quarter? Did it kind of hold at a pretty consistent level? Or was there any improvement as the quarter progressed?

只要看看家具和床上用品領域的疲軟可能導致指南下降，看起來銷量趨勢與第一季度非常相似，但好奇整個季度的趨勢是什麼樣的？它是否保持在相當一致的水平？或者隨著本季度的進展有任何改善嗎？

Tyson, why don't you take that.

泰森，你為什麼不接受這個呢？

Sure. I'll jump in on the bedding part of that first. I think what we saw is probably what's been reported more broadly in the market. Actually, even on our last conference call, we talked about April, which was our expectation being seasonally down, and it was. But then we did see sequential improvement as we went through the quarter.

當然。我將首先討論床上用品部分。我認為我們所看到的可能是市場上更廣泛報導的內容。事實上，即使在我們上次的電話會議上，我們也談到了四月份的情況，我們的預期是季節性下降的，事實確實如此。但隨著本季度的進展，我們確實看到了連續的改善。

So April was down more towards the levels that we saw in October, November of last year. And then May and June improved from that point more to the levels that we've seen, both back in the first quarter and probably third quarter of last year. So it didn't peak out at levels that offset the softness in April, but just back more to the sort of the steady state that we've been in for a while.

因此，4 月份的跌幅更大，接近去年 10 月、11 月的水平。然後 5 月和 6 月從那時起進一步改善到我們看到的水平，無論是在去年第一季度還是可能在去年第三季度。因此，它並沒有達到抵消四月份疲軟水平的峰值，而只是回到了我們一段時間以來一直處於的穩定狀態。

And I think the end consumer demand would be very similar in furniture and bedding, but some of the market changes might be a little bit different. Steve, anything you'd like to add there on home furniture?

我認為最終消費者對家具和床上用品的需求會非常相似，但一些市場變化可能會有點不同。史蒂夫，您想在家具上添加什麼嗎？

I would just say though when the quarter started, the low end to mid-end been low for a month, but the high end was hanging in there. And probably over the course of the quarter, we saw that start to decline as well through the quarter, I would say. And then just recently starting to feel like we're probably at the bottom bouncing around and seeing a little bit of increase in the lower end of the market. So kind of started out a little stronger, got a little weak and then to end into the third quarter getting a little stronger in terms of demand. But we think that's primarily due to the inventory that was in the channel that's now being depleted.

我只想說，儘管在本季度開始時，低端到中端已經持續了一個月的低點，但高端仍然存在。我想說，可能在整個季度中，我們看到這一數字也開始下降。然後就在最近，我們開始感覺我們可能正處於底部反彈，並看到低端市場略有增長。因此，一開始有點強，然後有點弱，然後到第三季度結束時，需求變得有點強。但我們認為這主要是由於渠道中的庫存現已耗盡。

Yes. I think, Steve, the other thing I would add too is we had the benefit of backlogs particularly at the higher end for quite a while. And as -- now I think worn out pretty much. And so what is sales to us, deliveries to our customers that -- I think that tailwind evaporated.

是的。我想，史蒂夫，我還要補充的另一件事是，我們在相當長一段時間內受益於積壓，尤其是高端產品。現在我認為已經很疲憊了。那麼對我們的銷售、對客戶的交付是什麼——我認為順風已經消失了。

Okay. Yes, I was going to ask about the home furniture decline. So I think you've addressed that. So maybe I'll pivot to the bedding and the spring declines. I guess down U.S. Spring volume down 13%, pretty similar to Q1 on a volume basis. It does seem like the industry has gotten better in Q2 and maybe even continues to get better here with Q3. Your volumes are kind of holding steady. Is there a customer mix issue within Springs? Is there some share loss? Can you just help us frame up why the volume trends aren't trending towards less negative?

好的。是的，我想問一下家具下降的情況。所以我認為你已經解決了這個問題。所以也許我會轉向床上用品，彈簧會下降。我估計美國春季銷量下降了 13%，與第一季度的銷量非常相似。該行業似乎在第二季度確實變得更好，甚至可能在第三季度繼續變得更好。你們的銷量保持穩定。 Springs 內部是否存在客戶混合問題？是否有一些股份損失？您能幫我們解釋一下為什麼成交量趨勢沒有趨於負面的趨勢嗎？

Sure. I'll jump back in here, Peter. So the way we look at it is things are pretty consistent. Looking across the market, overall, I think we would see things pretty similar broadly in the market with kind of where we've been trending. I talked about the April weakness.

當然。我會跳回到這裡，彼得。所以我們看待它的方式是非常一致的。縱觀整個市場，總體而言，我認為我們會在市場上看到與我們一直在發展的趨勢非常相似的情況。我談到了四月份的疲軟。

The signals that we've been getting from our customers is less optimistic for the back half of the year. I think entering the year, there was optimism that we would start seeing some modest improvement from kind of where we were at least the last part of last year and the early part of this year. But especially with the modest Memorial Day and fourth of July, that seemed to dampen the expectations for a lot of improvement in the back half.

我們從客戶那裡得到的信號對於今年下半年來說並不樂觀。我認為進入今年，人們樂觀地認為，我們將開始看到至少從去年下半年和今年年初的情況來看，出現了一些適度的改善。但尤其是在陣亡將士紀念日和七月四日這兩個不太重要的日子裡，這似乎削弱了人們對後半段出現大幅改善的預期。

But within our business, no, I don't think there's a customer mix change, just within our products, Mitch covered in his opening comments, but open coil and grids from a volume standpoint are more adversely impacted than Comfort Core. I think that's both some consumer -- in consumer preference and also just pressure on the lowest end of the market. So I think the mix within our product categories is probably more of an issue than any type of customer mix.

但在我們的業務中，不，我不認為客戶組合發生了變化，只是在我們的產品中，米奇在他的開場評論中談到，但從銷量的角度來看，開放式線圈和網格比 Comfort Core 受到的不利影響更大。我認為這既是一些消費者的偏好，也是對最低端市場的壓力。因此，我認為我們的產品類別中的組合可能比任何類型的客戶組合都更重要。

Okay. And the last question I had was just on the inventory levels that you have and just thinking about maybe some of the cash flow opportunities. Do you have potential inventory reduction ahead? I know you're kind of in a low sales base right now, but your inventory turns are far below pre-pandemic levels. So wondering what you think about the status of inventory and bringing that down.

好的。我的最後一個問題只是關於您擁有的庫存水平，並且只是考慮一些現金流機會。您未來是否有可能減少庫存？我知道你們現在的銷售基礎較低，但你們的庫存周轉率遠遠低於大流行前的水平。所以想知道您對庫存狀況的看法並降低庫存狀況。

Good question, Peter. I think that's something that's always very focused on our mind as we focus on cash management. So Ben, I'll let you share your thoughts there.

好問題，彼得。我認為，當我們專注於現金管理時，這始終是我們非常關注的事情。所以本，我會讓你在那里分享你的想法。

Yes. Thanks, Peter. Yes. I think for us, from an inventory perspective, you know the past few years have been very dynamic as we've had volatility in demand levels, supply chain challenges, our inventory balances have gone up over the last couple of years. And then as we saw demand start to taper down a little bit in the back half of last year and continued into this year, we've had some great work by our teams to work with those inventory levels down while still maintaining that ability to serve our customers in a good way.

是的。謝謝，彼得。是的。我認為對我們來說，從庫存的角度來看，過去幾年非常活躍，因為我們的需求水平波動，供應鏈​​面臨挑戰，我們的庫存餘額在過去幾年有所增加。然後，當我們看到需求在去年下半年開始略有下降並持續到今年時，我們的團隊做了一些出色的工作，在降低庫存水平的同時仍然保持服務能力我們的客戶以良好的方式。

We have worked it down sequentially for a number of quarters now. But we also believe that there is a little bit more opportunity left there. So we'll continue to focus on it. We think we can drive some cash through that. And we also pay attention to all the elements of working capital. So I think our AR is in really good shape right now. Our teams have done a good job of keeping that current.

我們已經連續幾個季度對其進行了研究。但我們也相信那裡還有更多的機會。所以我們將繼續關注它。我們認為我們可以通過這個獲得一些現金。我們也關注營運資金的所有要素。所以我認為我們的 AR 目前狀況非常好。我們的團隊在保持這一點方面做得很好。

Accounts payable are down a little bit, just mainly due to the lower volumes, but it's something we'll continue to focus on and really look at that as a way to drive cash and then use that cash to stay disciplined with our uses of cash. So organic growth, funding the dividends, and then what you'll see is minimal spend on acquisitions and share repurchases in the near term, but we'll use that excess cash to prioritize paying down debt, and that really supports our commitment to being a strong investment-grade company.

應付賬款略有下降，主要是由於數量減少，但這是我們將繼續關注的事情，並真正將其視為推動現金的一種方式，然後利用這些現金來保持現金使用的紀律。因此，有機增長，為股息提供資金，然後你會看到短期內收購和股票回購的支出最少，但我們將使用多餘的現金來優先償還債務，這確實支持了我們的承諾一家實力雄厚的投資級公司。

We have a follow-up question from Susan Maklari of Goldman Sachs.

高盛的蘇珊·馬克拉里 (Susan Maklari) 向我們提出了後續問題。

I just wanted to go back to the specialized segment. When you think about the improvement in the margin that you did see this quarter back to that low double-digit range, and you look out and you think about some of the changes that have come through in that segment specifically with some of the acquisitions you've done more recently and things that are sort of changing the profile of that business. How do you think about where those margins will go over time? And what is the role of the changing profile of that within the eventual sort of target relative to perhaps where we've been in the past.

我只是想回到專業領域。當你想到本季度利潤率的改善時，你確實看到回到了兩位數的低位區間，你會留意並思考該細分市場中發生的一些變化，特別是通過你的一些收購最近所做的事情在某種程度上改變了該企業的形象。您如何看待這些利潤隨著時間的推移將走向何方？相對於我們過去的情況，在最終目標中，這種變化的作用是什麼？

Thanks, Susan, and Steve I'll let you chime in here, too. I think you're right that the difference of the portfolio within specialized does have some impact. Certainly, those acquisitions add some more depreciation and amortization, so EBIT and EBITDA look different. But particularly in this downturn time, aerospace had been a really big drag. While the volume was so low, we saw struggles in automotive and then some of the inefficiencies that we talked about. But you see the margins improving. We think it may not be perfectly sequential that every quarter it gets better. But we do believe that we'll continue to improve over the long term.

謝謝蘇珊和史蒂夫，我也讓你們插話一下。我認為你是對的，專業領域內的投資組合差異確實會產生一些影響。當然，這些收購增加了更多的折舊和攤銷，因此 EBIT 和 EBITDA 看起來有所不同。但尤其是在這個經濟低迷時期，航空航天業確實是一個很大的拖累。雖然銷量如此之低，但我們看到了汽車行業的困境，以及我們談到的一些低效率問題。但你會看到利潤率有所提高。我們認為每個季度都會變得更好，這可能不是完全連續的。但我們確實相信，從長遠來看，我們將繼續進步。

I know that we'll get back to the peaks that we had when automotive was -- that's a huge, huge growth pattern and the largest part of the segment by far, it's still the largest part, but not the same share as it had before. But I think that we'll continue to see movement up hopefully somewhere into the teens at least, but not making any prediction at this point.

我知道我們會回到汽車行業當時的巔峰——這是一個巨大的增長模式，是迄今為止該領域最大的部分，它仍然是最大的部分，但所佔的份額與以前不同前。但我認為我們將繼續看到至少在十幾歲的某個地方的進展，但目前還沒有做出任何預測。

But I think that we do have opportunities both for continued growth in all 3 businesses over the long term, well positioned strategically and also opportunities to get back -- to improve operational efficiency as we continue to grow those businesses.

但我認為，從長遠來看，我們確實有機會在所有三項業務中持續增長，在戰略上處於有利地位，也有機會在我們繼續發展這些業務的同時提高運營效率。

Steve, anything you would add there?

史蒂夫，你還有什麼要補充的嗎？

No, just, I think there's also opportunities for us to continue to improve margins as those volumes increase. There's still some lack of consistency in order of patterns and other things that are driving costs to our operations. And as those line out, we should expect to see those -- the costs associated with those go away to some margin expansion there as well as some new product developments, particularly in hydraulics over the longer term.

不，只是，我認為隨著銷量的增加，我們還有機會繼續提高利潤率。模式順序和其他因素仍然缺乏一致性，從而增加了我們的運營成本。正如這些所列出的那樣，我們應該期望看到這些 - 與這些相關的成本會消失在一些利潤擴張以及一些新產品開發中，特別是在長期的液壓領域。

Okay. Okay. That's helpful. And then we've touched on this in a lot of ways in this call, but maybe thinking about just the differences that you're seeing across consumer or residential end markets relative to the industrial pieces of the business.

好的。好的。這很有幫助。然後，我們在這次電話會議中以多種方式談到了這一點，但也許只是考慮一下您在消費者或住宅終端市場中看到的相對於工業業務的差異。

One of the interesting dynamics is that within bedding, especially, the rate of promotions is still fairly low. And we've seen that normalize in some of the other categories that we cover that are consumer related and have that sort of promotional element to them. Any thoughts on what you're hearing from your customers as it relates to sort of the broader state of the consumer? And perhaps anything that they're looking to do to help entice them or to help drive that traffic a bit?

有趣的動態之一是，尤其是在床上用品領域，促銷率仍然相當低。我們已經看到，在我們涵蓋的其他一些與消費者相關的類別中，這種情況已經正常化，並且具有此類促銷元素。對於您從客戶那裡聽到的與更廣泛的消費者狀況相關的信息，您有什麼想法嗎？也許他們希望採取任何措施來吸引他們或幫助增加流量？

And then I guess anything that you're also seeing broadly as you think about the recovery potential in consumer and that longer-term track for industrial, do you think they'll continue to sort of both move forward? Or are there any puts and takes that you would highlight?

然後我想，當您考慮消費者的複蘇潛力和工業的長期發展軌跡時，您也廣泛看到了任何事情，您認為它們會繼續向前發展嗎？或者您有什麼要強調的看跌期權嗎？

Yes. Thanks, Susan. So Tyson, I'll comment a little bit on some of the broader issues and let you come back to some of the promotional activity there.

是的。謝謝，蘇珊。泰森，我將就一些更廣泛的問題發表一些評論，然後讓您回到那裡的一些促銷活動。

So I think that it's a great question because it highlights the diversification of our portfolio. So while we see this lower activity in our more consumer durables facing markets, the industrial businesses have done really well and they are improving. And I think hopefully we'll get back into growth mode and not just recovery book before too long. So they want to emphasize that, that is a key element of our portfolio management.

所以我認為這是一個很好的問題，因為它凸顯了我們投資組合的多元化。因此，雖然我們看到耐用消費品市場的活動減少，但工業企業的表現確實很好，而且正在改善。我認為希望我們很快就能回到增長模式，而不僅僅是恢復模式。所以他們想強調，這是我們投資組合管理的關鍵要素。

And then secondly, I think it's an interesting question. If you think about the health of the consumer, I think it's fairly strong at this point as we've seen inflation easing and job market remaining strong and wages improving. But the focus is on consumer spending is really remains on services, on consumables and other than durable goods. And that's really the drag that we're seeing on our furniture, flooring and bedding more residential end markets.

其次，我認為這是一個有趣的問題。如果你考慮一下消費者的健康狀況，我認為目前消費者的健康狀況相當強勁，因為我們看到通脹有所緩和，就業市場保持強勁，工資也有所提高。但消費者支出的重點實際上仍然是服務、消費品和耐用品以外的支出。這確實是我們在家具、地板和床上用品更多住宅終端市場上看到的拖累。

I'd say the possibility of achieving a soft landing and avoiding a broader recession is still out there in the narrative, and maybe even becoming more likely. And if that's the case, hopefully, consumer spending comes back into residential end markets before too long, but I think it's really difficult to predict the time line at this point. I think that -- I would agree that we have seen promotions lower. And I'm not -- I think that just hasn't been very effective, I think, is my take on it.

我想說，實現軟著陸並避免更廣泛的衰退的可能性仍然存在，甚至可能變得更有可能。如果是這樣的話，希望消費者支出很快就會回到住宅終端市場，但我認為目前很難預測時間線。我認為——我同意我們的促銷活動有所減少。我不是——我認為這並不是很有效，我認為這是我的看法。

What do you think, Tyson?

泰森，你覺得怎麼樣？

Yes, I agree with everything you just said, Mitch, I mean, going back to sort of the consumer sentiment and where consumers want to spend their dollars is sort of a huge question for our industry. And we went through a period of time where promotions weren't necessary at all when everybody was spending on the home and focused on buying home-related goods and then it shifted quickly. It does feel like we're back to at least the seasonal promotional periods, but there's probably still some more room to go to get back to more of the typical types of promotions.

是的，我同意你剛才所說的一切，米奇，我的意思是，回到消費者情緒以及消費者想要把錢花在哪裡對我們行業來說是一個巨大的問題。我們經歷了一段時期，當每個人都在房屋上花錢並專注於購買與房屋相關的商品時，促銷根本沒有必要，然後它很快就發生了變化。確實感覺我們至少回到了季節性促銷期，但可能還有更多的空間可以回到更多典型的促銷類型。

Some things that -- I guess I've already talked a little bit about what's caused us to remove the optimism for the back half of the year, but some things that give us a little more confidence. Mitch talked about the maybe potential for a soft landing, improving consumer sentiment, even though it is still at relatively low levels, some stability in the housing market. I mean, those are typically things that act as a tailwind for the bedding market.

有些事情——我想我已經談過一些導致我們消除下半年樂觀情緒的原因，但有些事情給了我們更多的信心。米奇談到了軟著陸的潛力，改善了消費者信心，儘管其仍處於相對較低的水平，房地產市場也有一定的穩定性。我的意思是，這些通常是床上用品市場的推動力。

But I think both us and our customers are waiting to see some real pickup and shift back from spending on services and travel, things like that back into spending on the home and getting more of a tailwind. Because at this point, I do feel like we are creating pent-up demand. Any type of pull forward has probably been extinguished. And at this point, it's probably more creating pent-up demand rather than even neutralizing now.

但我認為我們和我們的客戶都在等待看到一些真正的回升，並從服務和旅行等方面的支出轉向家庭支出，並獲得更多的順風車。因為在這一點上，我確實覺得我們正在創造被壓抑的需求。任何類型的前進動力都可能已經消失。在這一點上，它可能更多的是創造被壓抑的需求，而不是現在消除需求。

Yes. Okay. Thanks for the color and good luck with everything.

是的。好的。感謝您的顏色，祝一切順利。

Thank you, Susan.

謝謝你，蘇珊。

There are no further questions at this time. I would like to turn the floor back over to Susan McCoy for closing comments. Please go ahead, ma'am.

目前沒有其他問題。我想將發言權交還給蘇珊·麥考伊以徵求結束意見。請繼續，女士。

Thank you for joining us today. We'll talk to you again next quarter. If you have questions, please contact us using the information in yesterday's press release. Thanks.

感謝您今天加入我們。我們將在下個季度再次與您交談。如果您有疑問，請使用昨天新聞稿中的信息與我們聯繫。謝謝。

That concludes today's conference. Thank you for joining us. You may now disconnect your lines.

今天的會議到此結束。感謝您加入我們。您現在可以斷開線路。