The Urethane Blog
Jim Fitterling
Industrial Intermediates and Infrastructure operating EBIT was $175 million, down from the year ago period, as demand growth in the Industrial Solutions business was more than offset by market compression in polyurethane application, as well as equity losses.
The segment also benefited from lower year-over-year planned maintenance turnaround costs. The Polyurethane and Construction Chemicals business reported lower net sales, primarily driven by a lower global energy prices and decreased demand, particularly in furniture and bedding, automotive, appliance and aircraft deicing applications.
Also, we are taking actions to idle facilities or reduce operating rates in line with demand trends in the U.S., Europe and Latin America. We are working with our customers to get orders placed with enough lead times, so that we can make the best asset decisions across our network and manage bottlenecks in the supply chain to deliver products where it’s needed.
Our polyurethanes business has strong participation in Durable Goods segments, such as automotives, furniture and bedding, appliances and construction. These segments are being heavily impacted by government mandated shutdowns around the world, as a result, we are running our polyurethanes assets including propylene oxide and MDI at reduced operating rates.
And in silicones, we are running reduced rates across our global grid of siloxane trains and our Zhangjiagang production facility in China will remain down on an extended plant turnaround into May. We also benefit from full flexibility at our silicones finishing asset allowing us to quickly respond to demand in all formulated silicones applications around the world.
We are taking these actions with a thoughtful approach that will allow us to quickly respond as demand improves when economies around the world reopen, and while the timing and shape of a recovery remain uncertain these actions position Dow to emerge even stronger when the global economy rebound.
John Roberts
Thank you. And you all sound pretty well here, as well. So I am glad to hear that. Can you comment on other industry closures you might be seeing? We don’t usually think of Dow’s high cost although ethane is kind of flipped here currently, but, are we seeing other closures we haven’t heard about yet from competitors in the marketplace?
Jim Fitterling
Yes, John. Thanks for the question. We are not closing the high cost assets. We are closing the balance demand. So, look, all of these are reasonable cost assets, but the reality is, there has been a pretty significant amount of industrial capacity shutdown on the downstream. And so, we don’t feel like in this environment, really ploughing a lot of material into inventory is the right thing to do.
So, that’s why we are dialing back the capacity. I have seen some delays and indefinite suspensions of projects, there was one this week in Ohio, the Thai project that was going to go ahead. So, we are starting to see some of those kinds of announcements. We are seeing reduced rates across polyurethanes, across the globe basically and we’ve got polyurethanes MDI capacity down in China right now, not us, but competitors do.
Really to balance out the fact that downstream automotive and appliances and construction for insulation materials has been slow. So I think that’s what you are seeing. I think it has less to do with the cost position and more to do with the supply demand.
Arun Viswanathan
Hey, good morning. Thanks a lot. Thanks for what you are doing on the frontlines, as well. I guess, I just wanted to ask about both polyethylene and polyurethanes. Both markets has gone through some structural changes here polyethylene on the feedstock side and potentially demand side. Polyurethanes on the demand side with reduced demand for consumer discretionary items.
I guess, would you agree with those characterizations and I guess, when you think about that, thinking longer-term, do you foresee any changes in your strategy and polyurethane as you talked about adding Systems Houses and PE, you talked about selling. Are those still valid in this environment? Have you seen new customers trade down or change their strategy, as well? Thanks.
Jim Fitterling
Arun, I think, we’ll get back to the growth playbook as we mentioned in the script. And I think it’s just a matter of timing here. So, it doesn’t make sense right now to continue to plough cash and capacity when the demand in Europe and North America and Latin America has slowed down, because people are staying at home.
So that’s why we are taking some of the actions that we are taking right now. It’s just to balance that demand. But that demand will come back. People are not going to stay at home forever. We are helping governments right now with safe ways to return to work and we are operating safely. 14,000 Dow people go to the sites every day and we are operating safely and people are healthy.
So, we know it can be done. But it’s just going to take some time before the consumer confidence to come back and that’s why we are doing what we are doing. Downstream, expansions in our Industrial Solutions and in our Functional Silicones products are still continuing. Systems House will come back as the automotive business and the Installation and Construction business comes back and we’ll continue to look at downstream on plastics.
https://seekingalpha.com/article/4341619-dow-inc-dow-ceo-jim-fitterling-on-q1-2020-results-earnings-call-transcript?part=single
May 1, 2020
Huntsman Announces First Quarter 2020 Earnings; A Strong Balance Sheet with Robust Liquidity
THE WOODLANDS, Texas, May 1, 2020 /PRNewswire/ —
First Quarter Highlights
- First quarter 2020 net income of $708 million compared to $131 million in the prior year period; first quarter 2020 diluted earnings per share of $3.16 compared to $0.51 in the prior year period.
- First quarter 2020 adjusted net income of $65 million compared to $85 million in the prior year period; first quarter 2020 adjusted diluted earnings per share of $0.29 compared to $0.36 in the prior year period.
- First quarter 2020 adjusted EBITDA of $165 million compared to $204 million in the prior year period.
- First quarter 2020 net cash used in operating activities was $40 million. Free cash flow was a use of $101 million for the first quarter 2020.
- Balance sheet remains strong with a net leverage of 0.7x and total liquidity for the Company is approximately $2.9 billion. First quarter 2020 share repurchases of approximately 5.4 million shares for approximately $96 million.
- The Icynene-Lapolla acquisition closed on February 20, 2020, which approximately doubled our existing global spray polyurethane foam insulation business. Our recently announced acquisition of CVC Thermoset Specialties on March 16, 2020, is on track to close by mid-year.
| Three months ended | ||||
| March 31, | ||||
| In millions, except per share amounts | 2020 | 2019 | ||
| Revenues | $ 1,593 | $ 1,669 | ||
| Net income | $ 708 | $ 131 | ||
| Adjusted net income(1) | $ 65 | $ 85 | ||
| Diluted income per share | $ 3.16 | $ 0.51 | ||
| Adjusted diluted income per share(1) | $ 0.29 | $ 0.36 | ||
| Adjusted EBITDA(1) | $ 165 | $ 204 | ||
| Net cash used in operating activities from continuing operations | $ (40) | $ (40) | ||
| Free cash flow from continuing operations(2) | $ (101) | $ (101) | ||
| See end of press release for footnote explanations and reconciliations of non-GAAP measures. | ||||
Huntsman Corporation (HUN) today reported first quarter 2020 results with revenues of $1,593 million, net income of $708 million, adjusted net income of $65 million and adjusted EBITDA of $165 million.
Peter R. Huntsman, Chairman, President and CEO, commented:
“Fortunately, we have been well prepared for this global economic crisis. The ongoing transformation of our business has made us a much better Company. Our balance sheet is stronger than ever before, with significant cash and robust liquidity. Visibility has at no time been more difficult, but our portfolio of businesses has never been more differentiated. In this environment we are laser focused on what is in our control and protecting our balance sheet strength. Having learned from prior crises, we preemptively reduced unnecessary inventories and are reducing capital spending this year by 30%, or approximately $90 million, by delaying discretionary spending. We have proactively taken other measures, including suspending share repurchases, and various cost reduction measures yielding immediate benefit. We will accelerate our plans to achieve synergies with our recent and pending strategic bolt-on acquisitions and aggressively press forward with the global scale up of our differentiated platform. Our Company is ready and able to take advantage of opportunities to come, and I am confident that Huntsman will emerge from this global crisis a stronger Company.”
Segment Analysis for 1Q20 Compared to 1Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the three months ended March 31, 2020 compared to the same period of 2019 was due to lower MDI average selling prices and modestly lower overall polyurethanes sales volumes. MDI average selling prices decreased primarily due to a decline in component MDI selling prices in China and Europe. Overall polyurethanes sales volumes decreased slightly primarily due to decreased demand across most major markets, partially offset by modest growth in MDI sales volumes. The decrease in segment adjusted EBITDA was primarily due to lower MDI margins driven by lower MDI pricing, partially offset by higher MDI sales volumes.
https://seekingalpha.com/pr/17855827-huntsman-announces-first-quarter-2020-earnings-strong-balance-sheet-robust-liquidity
May 1, 2020
Huntsman Announces First Quarter 2020 Earnings; A Strong Balance Sheet with Robust Liquidity
THE WOODLANDS, Texas, May 1, 2020 /PRNewswire/ —
First Quarter Highlights
- First quarter 2020 net income of $708 million compared to $131 million in the prior year period; first quarter 2020 diluted earnings per share of $3.16 compared to $0.51 in the prior year period.
- First quarter 2020 adjusted net income of $65 million compared to $85 million in the prior year period; first quarter 2020 adjusted diluted earnings per share of $0.29 compared to $0.36 in the prior year period.
- First quarter 2020 adjusted EBITDA of $165 million compared to $204 million in the prior year period.
- First quarter 2020 net cash used in operating activities was $40 million. Free cash flow was a use of $101 million for the first quarter 2020.
- Balance sheet remains strong with a net leverage of 0.7x and total liquidity for the Company is approximately $2.9 billion. First quarter 2020 share repurchases of approximately 5.4 million shares for approximately $96 million.
- The Icynene-Lapolla acquisition closed on February 20, 2020, which approximately doubled our existing global spray polyurethane foam insulation business. Our recently announced acquisition of CVC Thermoset Specialties on March 16, 2020, is on track to close by mid-year.
| Three months ended | ||||
| March 31, | ||||
| In millions, except per share amounts | 2020 | 2019 | ||
| Revenues | $ 1,593 | $ 1,669 | ||
| Net income | $ 708 | $ 131 | ||
| Adjusted net income(1) | $ 65 | $ 85 | ||
| Diluted income per share | $ 3.16 | $ 0.51 | ||
| Adjusted diluted income per share(1) | $ 0.29 | $ 0.36 | ||
| Adjusted EBITDA(1) | $ 165 | $ 204 | ||
| Net cash used in operating activities from continuing operations | $ (40) | $ (40) | ||
| Free cash flow from continuing operations(2) | $ (101) | $ (101) | ||
| See end of press release for footnote explanations and reconciliations of non-GAAP measures. | ||||
Huntsman Corporation (HUN) today reported first quarter 2020 results with revenues of $1,593 million, net income of $708 million, adjusted net income of $65 million and adjusted EBITDA of $165 million.
Peter R. Huntsman, Chairman, President and CEO, commented:
“Fortunately, we have been well prepared for this global economic crisis. The ongoing transformation of our business has made us a much better Company. Our balance sheet is stronger than ever before, with significant cash and robust liquidity. Visibility has at no time been more difficult, but our portfolio of businesses has never been more differentiated. In this environment we are laser focused on what is in our control and protecting our balance sheet strength. Having learned from prior crises, we preemptively reduced unnecessary inventories and are reducing capital spending this year by 30%, or approximately $90 million, by delaying discretionary spending. We have proactively taken other measures, including suspending share repurchases, and various cost reduction measures yielding immediate benefit. We will accelerate our plans to achieve synergies with our recent and pending strategic bolt-on acquisitions and aggressively press forward with the global scale up of our differentiated platform. Our Company is ready and able to take advantage of opportunities to come, and I am confident that Huntsman will emerge from this global crisis a stronger Company.”
Segment Analysis for 1Q20 Compared to 1Q19
Polyurethanes
The decrease in revenues in our Polyurethanes segment for the three months ended March 31, 2020 compared to the same period of 2019 was due to lower MDI average selling prices and modestly lower overall polyurethanes sales volumes. MDI average selling prices decreased primarily due to a decline in component MDI selling prices in China and Europe. Overall polyurethanes sales volumes decreased slightly primarily due to decreased demand across most major markets, partially offset by modest growth in MDI sales volumes. The decrease in segment adjusted EBITDA was primarily due to lower MDI margins driven by lower MDI pricing, partially offset by higher MDI sales volumes.
https://seekingalpha.com/pr/17855827-huntsman-announces-first-quarter-2020-earnings-strong-balance-sheet-robust-liquidity
April 30, 2020
Tempur Sealy Reports Record First Quarter 2020 results
– Net Income Increased 110%, EPS Increased 118%
– Leverage Ratio Declined by Over 20% Compared to Prior Year
PR NewswireLEXINGTON, Ky., April 30, 2020 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the first quarter ended March 31, 2020. As previously announced, the Company has withdrawn its previously-issued full-year financial guidance for 2020 and will not provide updated full-year financial guidance until the operating environment becomes clear.
FIRST QUARTER 2020 FINANCIAL SUMMARY
- Total net sales increased 19.0% to $822.4 million as compared to $690.9 million in the first quarter of 2019. On a constant currency basis(1), total net sales increased 19.8%, with an increase of 24.5% in the North America business segment and an increase of 2.0% in the International business segment.
- Gross margin was 43.4% as compared to 40.8% in the first quarter of 2019.
- Operating income increased 74.0% to $105.3 million as compared to $60.5 million in the first quarter of 2019. Operating income in the first quarter of 2020 included $11.7 million of charges associated with a wholesale customer bankruptcy. Adjusted operating income(1) increased 89.3% to $120.8 million as compared to $63.8 million in the first quarter of 2019.
- Net income increased 110.2% to $59.7 million as compared to $28.4 million in the first quarter of 2019. Adjusted net income(1) increased 143.3% to $72.5 million as compared to $29.8 million in the first quarter of 2019.
- Earnings before interest, tax, depreciation and amortization (“EBITDA”)(1) increased 39.7% to $134.5 million as compared to $96.3 million for the first quarter of 2019. Adjusted EBITDA(1) increased 62.9% to $151.2 million as compared to $92.8 million in the first quarter of 2019.
- Earnings per diluted share (“EPS”) increased 117.6% to $1.11 as compared to $0.51 in the first quarter of 2019. Adjusted EPS(1) increased 148.1% to $1.34 as compared to $0.54 in the first quarter of 2019.
- For the trailing twelve months ended March 31, 2020, leverage based on the ratio of consolidated indebtedness less netted cash(1) to adjusted EBITDA(1) was 3.03 times as compared to 3.84 times in the corresponding prior year period.
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 a robust 24.5% to $677.2 million as compared to $544.0 million in the first quarter of 2019. On a constant currency basis(1), North America net sales increased 24.5% as compared to the first quarter of 2019. Gross margin was 40.9% as compared to 37.6% in the first quarter of 2019. Operating margin was 15.0% as compared to 11.8% in the first quarter of 2019. Adjusted operating margin(1) was 16.9% in the first quarter of 2020.
North America net sales through the wholesale channel increased $107.8 million, or 21.5%, to $609.6 million as compared to the first quarter of 2019, primarily driven by the expansion of our retail distribution network. North America net sales through the direct channel increased $25.4 million, or 60.2%, to $67.6 million, as compared to the first quarter of 2019, primarily driven by growth from company-owned stores, which includes the acquisition of Sleep Outfitters. North America net sales through the direct channel, excluding Sleep Outfitters, increased approximately 20% as compared to the first quarter of 2019.
Company Chairman and CEO Scott Thompson commented, “We are very pleased with the way our online business has performed in response to market changes post COVID-19 with growth exceeding 100% in April in the U.S. market. This again points out the strength of our go-to-market strategy of being wherever the customer wants to shop.”
North America gross margin improved 330 basis points as compared to the first quarter of 2019. The improvement was primarily driven by favorable fixed cost leverage on higher unit volume, lower commodity costs and decreased floor model expenses. North America adjusted operating margin(1) improved 510 basis points as compared to the first quarter of 2019. The improvement in adjusted operating margin(1) was primarily driven by the improvement in gross margin and operating expense leverage.
International net sales decreased 1.2% to $145.2 million as compared to $146.9 million in the first quarter of 2019. On a constant currency basis(1), International net sales increased 2.0% as compared to the first quarter of 2019. Gross margin was 55.0% as compared to 52.7% in the first quarter of 2019. Operating margin was 18.3% as compared to 17.2% in the first quarter of 2019. Adjusted operating margin(1) was 19.9% as compared to 17.4% in the first quarter of 2019.
International net sales through the wholesale channel decreased $1.3 million, or 1.1%, to $112.8 million as compared to the first quarter of 2019. International net sales through the direct channel decreased $0.4 million, or 1.2%, to $32.4 million as compared to the first quarter of 2019.
International gross margin improved 230 basis points as compared to the first quarter of 2019. The improvement was primarily driven by operational improvements, favorable country mix and lower commodity costs. International adjusted operating margin(1) improved 250 basis points as compared to the first quarter of 2019. The improvement was primarily driven by the improvement in gross margin and favorable operating expense leverage, partially offset by the performance of the Asia joint venture as a result of the reduction in contributions from its operations in China.
Corporate operating expense decreased to $22.7 million as compared to $29.0 million in the first quarter of 2019. Corporate adjusted operating expense(1) was $26.0 million in the first quarter of 2019.
The Company ended the first quarter of 2020 with total debt of $1.9 billion and consolidated indebtedness less netted cash(1) of $1.7 billion. Leverage based on the ratio of consolidated indebtedness less netted cash(1) to adjusted EBITDA(1) was 3.03 times for the trailing twelve months ended March 31, 2020. During the first quarter of 2020, the Company repurchased 2.6 million shares of its common stock for a total cost of $187.5 million, under its share repurchase program. On March 27, 2020, the Company announced that it had ceased all share repurchase activity. As of March 31, 2020, the Company had approximately $131.3 million available under its existing share repurchase authorization.
Consolidated net income increased 110.2% to $59.7 million as compared to $28.4 million in the first quarter of 2019. Adjusted net income(1) increased 143.3% to $72.5 million as compared to $29.8 million in the first quarter of 2019. EPS increased 117.6% to $1.11 as compared to $0.51 in the first quarter of 2019. Adjusted EPS(1) increased 148.1% to $1.34 as compared to $0.54 in the first quarter of 2019.
COVID-19 Business Update
The Company is studying, responding, and optimizing its operations related to the challenges from the novel coronavirus (“COVID-19”) crisis. The Company has taken and continues to take precautionary measures to mitigate health risks during the evolving situation resulting from COVID-19. In addition, the Company is working with various government and healthcare organizations to provide products and services in this time of crisis.
The Company has experienced a major reduction in total net sales since COVID-19 began materially impacting our business in mid-March. Order trends were down 80% for a few days in early April with second quarter to date 2020 orders down approximately 55% as compared to the same period in 2019. The business has a highly variable cost structure that naturally adjusts with changes in sales. However, given the sudden and significant change in volume, actions were quickly implemented to further mitigate the financial impact. These actions included reducing expenses by approximately $300 million on an annualized basis. Additionally, the Company ceased share repurchases, began supporting medical relief efforts and increased support for charitable organizations.
The Company has no significant debt maturities until 2023 and has approximately $300 million of liquidity, including $197 million of cash on hand as of March 31, 2020 and approximately $100 million available under its revolving credit facility. The Company does not see material issues with any debt agreements based on current known facts and circumstances. However, given the uncertainty of this crisis, the Company has initiated discussions with commercial banks to secure additional short-term liquidity.
Company Chairman and CEO Scott Thompson commented, “These are truly unprecedented times as we move from a record first quarter to a very challenging second quarter. The negative impact from COVID-19 is expected to result in an operating loss and negative EBITDA in the second quarter. Despite this challenging environment, we believe that our consumer-preferred products and brands, our compelling marketing, and our powerful omni-channel distribution platform make Tempur Sealy uniquely well-positioned to withstand these headwinds. We feel confident that our strong position in the industry and our resilient workforce will ensure that we emerge from the current challenge in an even stronger competitive position within the global market.”
https://seekingalpha.com/pr/17854001-tempur-sealy-reports-record-first-quarter-2020-results
April 30, 2020
Tempur Sealy Reports Record First Quarter 2020 results
– Net Income Increased 110%, EPS Increased 118%
– Leverage Ratio Declined by Over 20% Compared to Prior Year
PR NewswireLEXINGTON, Ky., April 30, 2020 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the first quarter ended March 31, 2020. As previously announced, the Company has withdrawn its previously-issued full-year financial guidance for 2020 and will not provide updated full-year financial guidance until the operating environment becomes clear.
FIRST QUARTER 2020 FINANCIAL SUMMARY
- Total net sales increased 19.0% to $822.4 million as compared to $690.9 million in the first quarter of 2019. On a constant currency basis(1), total net sales increased 19.8%, with an increase of 24.5% in the North America business segment and an increase of 2.0% in the International business segment.
- Gross margin was 43.4% as compared to 40.8% in the first quarter of 2019.
- Operating income increased 74.0% to $105.3 million as compared to $60.5 million in the first quarter of 2019. Operating income in the first quarter of 2020 included $11.7 million of charges associated with a wholesale customer bankruptcy. Adjusted operating income(1) increased 89.3% to $120.8 million as compared to $63.8 million in the first quarter of 2019.
- Net income increased 110.2% to $59.7 million as compared to $28.4 million in the first quarter of 2019. Adjusted net income(1) increased 143.3% to $72.5 million as compared to $29.8 million in the first quarter of 2019.
- Earnings before interest, tax, depreciation and amortization (“EBITDA”)(1) increased 39.7% to $134.5 million as compared to $96.3 million for the first quarter of 2019. Adjusted EBITDA(1) increased 62.9% to $151.2 million as compared to $92.8 million in the first quarter of 2019.
- Earnings per diluted share (“EPS”) increased 117.6% to $1.11 as compared to $0.51 in the first quarter of 2019. Adjusted EPS(1) increased 148.1% to $1.34 as compared to $0.54 in the first quarter of 2019.
- For the trailing twelve months ended March 31, 2020, leverage based on the ratio of consolidated indebtedness less netted cash(1) to adjusted EBITDA(1) was 3.03 times as compared to 3.84 times in the corresponding prior year period.
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 a robust 24.5% to $677.2 million as compared to $544.0 million in the first quarter of 2019. On a constant currency basis(1), North America net sales increased 24.5% as compared to the first quarter of 2019. Gross margin was 40.9% as compared to 37.6% in the first quarter of 2019. Operating margin was 15.0% as compared to 11.8% in the first quarter of 2019. Adjusted operating margin(1) was 16.9% in the first quarter of 2020.
North America net sales through the wholesale channel increased $107.8 million, or 21.5%, to $609.6 million as compared to the first quarter of 2019, primarily driven by the expansion of our retail distribution network. North America net sales through the direct channel increased $25.4 million, or 60.2%, to $67.6 million, as compared to the first quarter of 2019, primarily driven by growth from company-owned stores, which includes the acquisition of Sleep Outfitters. North America net sales through the direct channel, excluding Sleep Outfitters, increased approximately 20% as compared to the first quarter of 2019.
Company Chairman and CEO Scott Thompson commented, “We are very pleased with the way our online business has performed in response to market changes post COVID-19 with growth exceeding 100% in April in the U.S. market. This again points out the strength of our go-to-market strategy of being wherever the customer wants to shop.”
North America gross margin improved 330 basis points as compared to the first quarter of 2019. The improvement was primarily driven by favorable fixed cost leverage on higher unit volume, lower commodity costs and decreased floor model expenses. North America adjusted operating margin(1) improved 510 basis points as compared to the first quarter of 2019. The improvement in adjusted operating margin(1) was primarily driven by the improvement in gross margin and operating expense leverage.
International net sales decreased 1.2% to $145.2 million as compared to $146.9 million in the first quarter of 2019. On a constant currency basis(1), International net sales increased 2.0% as compared to the first quarter of 2019. Gross margin was 55.0% as compared to 52.7% in the first quarter of 2019. Operating margin was 18.3% as compared to 17.2% in the first quarter of 2019. Adjusted operating margin(1) was 19.9% as compared to 17.4% in the first quarter of 2019.
International net sales through the wholesale channel decreased $1.3 million, or 1.1%, to $112.8 million as compared to the first quarter of 2019. International net sales through the direct channel decreased $0.4 million, or 1.2%, to $32.4 million as compared to the first quarter of 2019.
International gross margin improved 230 basis points as compared to the first quarter of 2019. The improvement was primarily driven by operational improvements, favorable country mix and lower commodity costs. International adjusted operating margin(1) improved 250 basis points as compared to the first quarter of 2019. The improvement was primarily driven by the improvement in gross margin and favorable operating expense leverage, partially offset by the performance of the Asia joint venture as a result of the reduction in contributions from its operations in China.
Corporate operating expense decreased to $22.7 million as compared to $29.0 million in the first quarter of 2019. Corporate adjusted operating expense(1) was $26.0 million in the first quarter of 2019.
The Company ended the first quarter of 2020 with total debt of $1.9 billion and consolidated indebtedness less netted cash(1) of $1.7 billion. Leverage based on the ratio of consolidated indebtedness less netted cash(1) to adjusted EBITDA(1) was 3.03 times for the trailing twelve months ended March 31, 2020. During the first quarter of 2020, the Company repurchased 2.6 million shares of its common stock for a total cost of $187.5 million, under its share repurchase program. On March 27, 2020, the Company announced that it had ceased all share repurchase activity. As of March 31, 2020, the Company had approximately $131.3 million available under its existing share repurchase authorization.
Consolidated net income increased 110.2% to $59.7 million as compared to $28.4 million in the first quarter of 2019. Adjusted net income(1) increased 143.3% to $72.5 million as compared to $29.8 million in the first quarter of 2019. EPS increased 117.6% to $1.11 as compared to $0.51 in the first quarter of 2019. Adjusted EPS(1) increased 148.1% to $1.34 as compared to $0.54 in the first quarter of 2019.
COVID-19 Business Update
The Company is studying, responding, and optimizing its operations related to the challenges from the novel coronavirus (“COVID-19”) crisis. The Company has taken and continues to take precautionary measures to mitigate health risks during the evolving situation resulting from COVID-19. In addition, the Company is working with various government and healthcare organizations to provide products and services in this time of crisis.
The Company has experienced a major reduction in total net sales since COVID-19 began materially impacting our business in mid-March. Order trends were down 80% for a few days in early April with second quarter to date 2020 orders down approximately 55% as compared to the same period in 2019. The business has a highly variable cost structure that naturally adjusts with changes in sales. However, given the sudden and significant change in volume, actions were quickly implemented to further mitigate the financial impact. These actions included reducing expenses by approximately $300 million on an annualized basis. Additionally, the Company ceased share repurchases, began supporting medical relief efforts and increased support for charitable organizations.
The Company has no significant debt maturities until 2023 and has approximately $300 million of liquidity, including $197 million of cash on hand as of March 31, 2020 and approximately $100 million available under its revolving credit facility. The Company does not see material issues with any debt agreements based on current known facts and circumstances. However, given the uncertainty of this crisis, the Company has initiated discussions with commercial banks to secure additional short-term liquidity.
Company Chairman and CEO Scott Thompson commented, “These are truly unprecedented times as we move from a record first quarter to a very challenging second quarter. The negative impact from COVID-19 is expected to result in an operating loss and negative EBITDA in the second quarter. Despite this challenging environment, we believe that our consumer-preferred products and brands, our compelling marketing, and our powerful omni-channel distribution platform make Tempur Sealy uniquely well-positioned to withstand these headwinds. We feel confident that our strong position in the industry and our resilient workforce will ensure that we emerge from the current challenge in an even stronger competitive position within the global market.”
https://seekingalpha.com/pr/17854001-tempur-sealy-reports-record-first-quarter-2020-results
Everchem Updates Archive 
Sign Up for Email Updates