Leggett & Platt, Incorporated

Greetings and welcome to the Leggett and Platt Second Quarter Conference Call and Webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host. Susan McCoy. Thank you, Susan McCoy. You may begin.

Good morning, and thank you for taking part in Leggett and Platt's second quarter conference call. As with last quarter, we are conducting the call from different locations. Please bear with us if you experience minor delays or mixed audio quality. On the call today are Carl Glassman, Chairman and CEO, Mitch Dulles, President and COO, Jeff Tate, Executive Vice President and CFO, Steve Henderson, EVP and President of the Specialized Products and Furniture, Flooring, and Textile Products segment, Wendy Watson, Vice President of IR, and Cassie Branscombe, recently promoted to Senior Director of IR. Before I proceed with the agenda, I wanted to let you know that today, after 22 years at Leggett & Platt, Wendy will be leaving the company. Wendy began her career with Leggett in 1998 and joined the IR team in early 2017. She has done outstanding work in the IR role and brought tremendous value to Leggett in all of her past roles. Please join me in congratulating Wendy on her outstanding career with Leggett. We wish her great success as she moves on to a new exciting opportunity and the next stage of her career. She will be sincerely missed. Joining us for the first time today is Tara Sherwood, Director of IR. He will be working directly with Cassie and me. Tara has been with Leggett since 2007 and has a strong background in accounting and financial analysis. Tara has held roles in internal audit and corporate development, where she participated in some of the largest transactions in our history, including the acquisition and integration of ECF last year. We are excited to have Tara as the newest member of our IR team. The agenda for our call this morning is as follows. Carl will start with a statement of the main points we made in yesterday's press release, Mitch will discuss demand trends and the status of our operations amidst the many complexities driven by the COVID-19 pandemic, and Jeff will discuss financial details. This conference call is being recorded for Leggett and 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 investor relations portion of the website yesterday's press release and a set of PowerPoint slides that contain summary detail of the key information we're sharing with you this morning, along with our regular quarterly financial information and segment details. Those documents supplement the information we discuss on this call, including non-GAAP reconciliations. 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. For a summary of these risk factors and additional information, please refer to yesterday's press release and the sections in our most recent 10-K and subsequent 10-Q entitled risk factors and forward-looking statements. I'll now turn the call over to Carl.

Good morning, and thank you for participating in our second quarter call. As we reported yesterday, second quarter sales were $845 million, down 30% versus the second quarter of 2019. EBIT decreased in the quarter versus second quarter last year, primarily due to lower demand. A non-cash goodwill impairment charge in our hydraulic cylinders business reduced second quarter EBIT by $25 million. EBIT was further reduced by approximately $3 million of restructuring charges incurred primarily from pandemic-related cost reductions. Second quarter earnings per share were a $0.05 loss, including $0.19 per share from the impairment charge and $0.02 per share from the restructuring. Adjusted EPS was $0.16 down from $0.64 in 2019. Our second quarter results were significantly impacted by the COVID-19 pandemic. We were pleased to see sales improve sequentially throughout the quarter as demand improved in most of our markets. The swift cost reduction actions implemented at the onset of the pandemic helped to mitigate some of the earnings impact from lower demand levels. We continued to experience demand recovery throughout July, although it varied rates across our markets and geographies given the ongoing effects of the pandemic and continuing economic uncertainty. We have improved our liquidity and we continue to carefully manage our cash and balance sheet. We also reported yesterday that our board of directors declared a 40 cent per share third quarter dividend. We recognize the importance of the dividend to our shareholders and our liquidity supports this decision. Our first priority remains the health and safety of our employees and their families, along with our customers and suppliers and the communities we serve around the world. As Mitch will describe in more detail, we are focused on creating a safe work environment. I am extremely proud of how our employees are working together to keep each other safe and healthy while serving our customers during this challenging time. Our long-term fundamentals have not changed. We continue to be leaders in most of our markets, focused on innovation and working closely with our customers to provide more of what they need to be successful. Our capabilities are unmatched in our large and expanding addressable markets. The diversity of our businesses makes us stronger. We have an outstanding track record of strong cash flow, and we remain committed to our long-standing transparency and financial discipline. We are dedicated to our long-term vision for the company, and we are confident that we will emerge from this crisis strong and focused on the future. I'll now turn the call over to Mitch.