– Tempur-Pedic Mattress Units Grew 36% in North America in the Fourth Quarter

– Company Settled All Litigation with Mattress Firm

PR NewswireLEXINGTON, Ky., Feb. 14, 2019 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the fourth quarter and year ended December 31, 2018. The Company also issued financial guidance for the full year 2019.

FOURTH QUARTER 2018 FINANCIAL SUMMARY⁽¹⁾

• Total net sales increased 7.1% to $676.1 million as compared to $631.4 million in the fourth quarter of 2017. On a constant currency basis⁽²⁾, total net sales increased 8.2%, with an increase of 9.1% in the North America business segment and an increase of 5.2% in the International business segment.
• Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 41.9% as compared to 42.4% in the fourth quarter of 2017. Adjusted gross margin⁽²⁾ was 42.4% in the fourth quarters of 2018 and 2017.
• GAAP operating income decreased 29.7% to $57.9 million, or 8.6% of net sales, as compared to $82.4 million, or 13.1% of net sales, in the fourth quarter of 2017. Operating income in the fourth quarter included $21.2 million of charges associated with a wholesale customer bankruptcy and other adjustments. Adjusted operating income⁽²⁾ increased 9.0% to $90.8 million, or 13.4% of net sales, as compared to $83.3 million, or 13.2% of net sales, in the fourth quarter of 2017.
• GAAP net income decreased 74.6% to $12.3 million as compared to $48.4 million in the fourth quarter of 2017. Adjusted net income⁽²⁾ increased 4.0% to $49.7 million as compared to $47.8 million in the fourth quarter of 2017.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽²⁾ decreased 16.2% to $77.9 million as compared to $93.0 million for the fourth quarter of 2017. Adjusted EBITDA⁽²⁾ increased 5.5% to $117.9 million as compared to $111.8 million in the fourth quarter of 2017.
• GAAP earnings per diluted share (“EPS”) decreased to $0.22 as compared to $0.88 in the fourth quarter of 2017. Adjusted EPS⁽²⁾ increased 3.4% to $0.90 as compared to $0.87 in the fourth quarter of 2017.
• The Company ended the fourth quarter of 2018 with total debt of $1.7 billion and consolidated funded debt less qualified cash⁽²⁾ of $1.6 billion. Leverage based on the ratio of consolidated funded debt less qualified cash to adjusted EBITDA⁽²⁾ was 3.87 times for the trailing twelve months ended December 31, 2018.

FULL YEAR 2018 FINANCIAL SUMMARY⁽¹⁾

• Total net sales increased 0.1% to $2,702.9 million from $2,700.6 million in 2017.
• GAAP gross margin was 41.5% in both 2018 and 2017. Adjusted gross margin⁽²⁾ was 41.9% as compared to 42.0% in 2017.
• GAAP operating income was $256.3 million, or 9.5% of net sales, as compared to $295.5 million, or 10.9% of net sales, in 2017. Adjusted operating income⁽²⁾ was $307.6 million, or 11.4% of net sales, as compared to $325.3 million, or 12.0% of net sales, in 2017.
• GAAP net income was $100.5 million as compared to $151.4 million in 2017. Adjusted net income⁽²⁾ was $163.0 million as compared to $179.2 million in 2017.
• GAAP EPS was $1.82 as compared to $2.77 in 2017. Adjusted EPS⁽²⁾ was $2.96 as compared to $3.28 in 2017.

(1) All amounts presented for 2017 reflect reclassifications to previously reported amounts to adjust for discontinued operations.
(2) This is a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures and Constant Currency Information” below.

KEY HIGHLIGHTS

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “In 2018, we successfully launched our new Tempur-Pedic Adapt line of products to expand our market share in the competitive $2000 to $3000 price band. Going into 2019, we look forward to completing the North American Tempur-Pedic rollout with our highly anticipated Tempur Breeze line of products, as well as, launching our entirely new line of Stearns & Foster products. We believe these launches in 2019 will solidify our market position in premium bedding. We believe our focus on delivering high quality bedding products, improving the reach and effectiveness of our marketing, expanding our omni-channel strategy, and pursuing on-going productivity initiatives sets the company up for future earnings growth.”

(1) All amounts presented for 2017 reflect reclassifications to previously reported amounts to adjust for discontinued operations.
(2) This is a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures and Constant Currency Information” below.

Business Segment Highlights

The Company’s business segments include North America and International. Corporate operating expenses are not included in either of the business segments and are presented separately as a reconciling item to consolidated results.

North America net sales increased 8.7% to $527.6 million as compared to $485.5 million in the fourth quarter of 2017. On a constant currency basis⁽²⁾, North America net sales increased 9.1% as compared to the fourth quarter of 2017. GAAP gross margin was 39.2% as compared to 39.8% in the fourth quarter of 2017. GAAP operating margin was 9.5% as compared to 13.7% in the fourth quarter of 2017.

North America net sales through the wholesale channel increased $36.1 million, or 8.0%, to $487.2 million. North America net sales through the direct channel increased $6.0 million, or 17.4%, to $40.4 million, as compared to the fourth quarter of 2017, driven primarily by growth from expanded retail stores.

North America adjusted gross margin⁽²⁾ was flat as compared to the fourth quarter of 2017. This was driven primarily by favorable pricing and brand mix, which were offset by commodity cost inflation, unfavorable Tempur product mix and increased floor model expenses. North America adjusted operating margin⁽²⁾ improved 40 basis points as compared to the fourth quarter of 2017. The improvement in adjusted operating margin was driven by operating expense leverage.

International net sales increased 1.8% to $148.5 million as compared to $145.9 million in the fourth quarter of 2017. On a constant currency basis⁽²⁾, International net sales increased 5.2% as compared to the fourth quarter of 2017. Gross margin was 51.5% as compared to 51.1% in the fourth quarter of 2017. GAAP operating margin was 21.6% as compared to 25.0% in the fourth quarter of 2017.

International net sales through the wholesale channel decreased $4.6 million, or 3.7%, to $119.3 million and net sales through the direct channel increased $7.2 million, or 32.7%, to $29.2 million as compared to the fourth quarter of 2017.

International adjusted gross margin⁽²⁾ improved 60 basis points as compared to the fourth quarter of 2017. The improvement was driven primarily by the change in classification of royalty income due to the adoption of new revenue recognition guidance and operational improvements. International adjusted operating margin⁽²⁾ declined 20 basis points as compared to the fourth quarter of 2017. The decline was driven by the change in classification of royalty income due to the adoption of new revenue recognition guidance, offset by favorable operating expense leverage, improvement in gross margin and improved performance by the Asia joint venture.

Corporate operating expense increased to $24.1 million as compared to $20.5 million in the fourth quarter of 2017.

https://seekingalpha.com/pr/17412406-tempur-sealy-reports-fourth-quarter-full-year-2018-results

– Tempur-Pedic Mattress Units Grew 36% in North America in the Fourth Quarter

– Company Settled All Litigation with Mattress Firm

PR NewswireLEXINGTON, Ky., Feb. 14, 2019 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the fourth quarter and year ended December 31, 2018. The Company also issued financial guidance for the full year 2019.

FOURTH QUARTER 2018 FINANCIAL SUMMARY⁽¹⁾

• Total net sales increased 7.1% to $676.1 million as compared to $631.4 million in the fourth quarter of 2017. On a constant currency basis⁽²⁾, total net sales increased 8.2%, with an increase of 9.1% in the North America business segment and an increase of 5.2% in the International business segment.
• Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 41.9% as compared to 42.4% in the fourth quarter of 2017. Adjusted gross margin⁽²⁾ was 42.4% in the fourth quarters of 2018 and 2017.
• GAAP operating income decreased 29.7% to $57.9 million, or 8.6% of net sales, as compared to $82.4 million, or 13.1% of net sales, in the fourth quarter of 2017. Operating income in the fourth quarter included $21.2 million of charges associated with a wholesale customer bankruptcy and other adjustments. Adjusted operating income⁽²⁾ increased 9.0% to $90.8 million, or 13.4% of net sales, as compared to $83.3 million, or 13.2% of net sales, in the fourth quarter of 2017.
• GAAP net income decreased 74.6% to $12.3 million as compared to $48.4 million in the fourth quarter of 2017. Adjusted net income⁽²⁾ increased 4.0% to $49.7 million as compared to $47.8 million in the fourth quarter of 2017.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽²⁾ decreased 16.2% to $77.9 million as compared to $93.0 million for the fourth quarter of 2017. Adjusted EBITDA⁽²⁾ increased 5.5% to $117.9 million as compared to $111.8 million in the fourth quarter of 2017.
• GAAP earnings per diluted share (“EPS”) decreased to $0.22 as compared to $0.88 in the fourth quarter of 2017. Adjusted EPS⁽²⁾ increased 3.4% to $0.90 as compared to $0.87 in the fourth quarter of 2017.
• The Company ended the fourth quarter of 2018 with total debt of $1.7 billion and consolidated funded debt less qualified cash⁽²⁾ of $1.6 billion. Leverage based on the ratio of consolidated funded debt less qualified cash to adjusted EBITDA⁽²⁾ was 3.87 times for the trailing twelve months ended December 31, 2018.

FULL YEAR 2018 FINANCIAL SUMMARY⁽¹⁾

• Total net sales increased 0.1% to $2,702.9 million from $2,700.6 million in 2017.
• GAAP gross margin was 41.5% in both 2018 and 2017. Adjusted gross margin⁽²⁾ was 41.9% as compared to 42.0% in 2017.
• GAAP operating income was $256.3 million, or 9.5% of net sales, as compared to $295.5 million, or 10.9% of net sales, in 2017. Adjusted operating income⁽²⁾ was $307.6 million, or 11.4% of net sales, as compared to $325.3 million, or 12.0% of net sales, in 2017.
• GAAP net income was $100.5 million as compared to $151.4 million in 2017. Adjusted net income⁽²⁾ was $163.0 million as compared to $179.2 million in 2017.
• GAAP EPS was $1.82 as compared to $2.77 in 2017. Adjusted EPS⁽²⁾ was $2.96 as compared to $3.28 in 2017.

(1) All amounts presented for 2017 reflect reclassifications to previously reported amounts to adjust for discontinued operations.
(2) This is a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures and Constant Currency Information” below.

KEY HIGHLIGHTS

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “In 2018, we successfully launched our new Tempur-Pedic Adapt line of products to expand our market share in the competitive $2000 to $3000 price band. Going into 2019, we look forward to completing the North American Tempur-Pedic rollout with our highly anticipated Tempur Breeze line of products, as well as, launching our entirely new line of Stearns & Foster products. We believe these launches in 2019 will solidify our market position in premium bedding. We believe our focus on delivering high quality bedding products, improving the reach and effectiveness of our marketing, expanding our omni-channel strategy, and pursuing on-going productivity initiatives sets the company up for future earnings growth.”

(1) All amounts presented for 2017 reflect reclassifications to previously reported amounts to adjust for discontinued operations.
(2) This is a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures and Constant Currency Information” below.

Business Segment Highlights

The Company’s business segments include North America and International. Corporate operating expenses are not included in either of the business segments and are presented separately as a reconciling item to consolidated results.

North America net sales increased 8.7% to $527.6 million as compared to $485.5 million in the fourth quarter of 2017. On a constant currency basis⁽²⁾, North America net sales increased 9.1% as compared to the fourth quarter of 2017. GAAP gross margin was 39.2% as compared to 39.8% in the fourth quarter of 2017. GAAP operating margin was 9.5% as compared to 13.7% in the fourth quarter of 2017.

North America net sales through the wholesale channel increased $36.1 million, or 8.0%, to $487.2 million. North America net sales through the direct channel increased $6.0 million, or 17.4%, to $40.4 million, as compared to the fourth quarter of 2017, driven primarily by growth from expanded retail stores.

North America adjusted gross margin⁽²⁾ was flat as compared to the fourth quarter of 2017. This was driven primarily by favorable pricing and brand mix, which were offset by commodity cost inflation, unfavorable Tempur product mix and increased floor model expenses. North America adjusted operating margin⁽²⁾ improved 40 basis points as compared to the fourth quarter of 2017. The improvement in adjusted operating margin was driven by operating expense leverage.

International net sales increased 1.8% to $148.5 million as compared to $145.9 million in the fourth quarter of 2017. On a constant currency basis⁽²⁾, International net sales increased 5.2% as compared to the fourth quarter of 2017. Gross margin was 51.5% as compared to 51.1% in the fourth quarter of 2017. GAAP operating margin was 21.6% as compared to 25.0% in the fourth quarter of 2017.

International net sales through the wholesale channel decreased $4.6 million, or 3.7%, to $119.3 million and net sales through the direct channel increased $7.2 million, or 32.7%, to $29.2 million as compared to the fourth quarter of 2017.

International adjusted gross margin⁽²⁾ improved 60 basis points as compared to the fourth quarter of 2017. The improvement was driven primarily by the change in classification of royalty income due to the adoption of new revenue recognition guidance and operational improvements. International adjusted operating margin⁽²⁾ declined 20 basis points as compared to the fourth quarter of 2017. The decline was driven by the change in classification of royalty income due to the adoption of new revenue recognition guidance, offset by favorable operating expense leverage, improvement in gross margin and improved performance by the Asia joint venture.

Corporate operating expense increased to $24.1 million as compared to $20.5 million in the fourth quarter of 2017.

https://seekingalpha.com/pr/17412406-tempur-sealy-reports-fourth-quarter-full-year-2018-results

THE WOODLANDS, Texas, Feb. 12, 2019 /PRNewswire/ —

Full Year 2018 and Fourth Quarter Highlights

• 2018 net income of $650 million compared to $741 million in the prior year; 2018 diluted earnings per share of $1.39 compared to $2.61 in the prior year.
• 2018 adjusted net income of $808 million compared to $604 million in the prior year; 2018 adjusted diluted earnings per share of $3.34 compared to $2.48 in the prior year.
• 2018 adjusted EBITDA of $1,469 million compared to $1,259 million in the prior year.
• Fourth quarter net loss of $315 million compared to net income of $287 million in the prior year period; Fourth quarter diluted loss per share of $1.43 compared to diluted earnings per share of $1.00 in the prior year period.
• Fourth quarter adjusted net income of $123 million compared to $186 million in the prior year period; Fourth quarter adjusted diluted earnings per share of $0.52 compared to $0.76 in the prior year period.
• Fourth quarter adjusted EBITDA of $275 million compared to $360 million in the prior year period.
• 2018 net cash provided by operating activities was $963 million. Free cash flow generation was $651 million.
• Balance sheet remains strong with a net leverage of 1.3x.
• 2018 share repurchases of approximately 10.4 million shares for approximately $276 million.

Huntsman Corporation (HUN) today reported fourth quarter 2018 results with revenues of $2,236 million, net loss of $315 million, adjusted net income of $123 million and adjusted EBITDA of $275 million.

Peter R. Huntsman, Chairman, President and CEO, commented:

“2018 was another successful year for Huntsman as we reported record earnings and consistent robust free cash flow.  We continued to expand in our downstream and differentiated businesses both through internal investments and bolt-on acquisitions. We reinforced our investment grade level balance sheet by entering into an expanded $1.2 billion senior unsecured revolver, and we remain well within investment grade metrics with a 1.3x net leverage ratio.  We also significantly enhanced our capital return to shareholders this past year by increasing our regular quarterly dividend by 30% and repurchasing over 10 million shares for approximately $276 million.

“In spite of strong customer destocking brought about by seasonal slowness, falling crude prices and economic uncertainties, our results reflect one of our strongest fourth quarters in our history.  We will continue to globalize recent investments, focus on our higher growth markets, and expand on our downstream businesses. We will also continue to make key investments to support our core long-term growth, such as building a new MDI splitter at our Geismar, Louisiana facility to support differentiated downstream growth, make additional bolt-on acquisitions as appropriate, and continue a balanced opportunistic approach to share buy-backs.  2019 will be another year of strong free cash flow generation and growth in our downstream businesses.”

Segment Analysis for 4Q18 Compared to 4Q17

Polyurethanes

The decrease in revenue in our Polyurethanes segment for the three months ended December 31, 2018 compared to the same period in 2017 was primarily due to lower MDI average selling prices partially offset by higher sales volumes.  MDI average selling prices decreased primarily due to a decline in component MDI selling prices in China and Europe.  MDI sales volumes increased due to the start-up of our new Chinese MDI facility in 2018 and the acquisition of Demilec, a North American polyurethane spray foam company, in April 2018. The decrease in adjusted EBITDA was primarily due to lower MDI margins driven by pricing, partially offset with higher sales volumes.

https://seekingalpha.com/pr/17408782-huntsman-announces-record-full-year-2018-earnings-strong-consistent-cash-flow