May 7, 2019

Tempur Sealy to test bed-in-a-box concept

May 7, 2019 11:21 AM ET|About: Tempur Sealy Internationa… (TPX)|By: Clark Schultz, SA News Editor

Tempur Sealy International (TPX -1%) is introducing its first bed-in-a-box product as part of a test.

The Tempur-Cloud will range in price from $1,499 for a twin to $2,199 for a king.

Initially, the product will be sold at TempurCloud.com and not at stores.

“This largely is a play for convenience,” says Tempur Sealy North America President Rick Anderson on the strategy.

https://seekingalpha.com/news/3459957-tempur-sealy-test-bed-box-concept#email_link

May 3, 2019

Dow Results

First Quarter 2019 Results for Materials Science Division¹ of DowDuPont

Thu May 2, 2019 6:02 AM|Business Wire|About: DOW

Net Sales Decreased 10% to $10.8B, In-Line with Guidance
Op. EBITDA Declined 24% to $1.9B, In-Line with Guidance
Delivered >$125MM of Cost Synergy Savings; Cost Synergy Run-Rate of $1.365B

MIDLAND, Mich.–(BUSINESS WIRE)–

Dow:

First Quarter Financial Highlights

Net sales decreased 10 percent to $10.8 billion, in-line with the division’s modeling guidance. This compares to net sales of $12.0 billion in the year-ago period.
Volume grew 1 percent from the year-ago period, as gains in Industrial Intermediates & Infrastructure (up 6 percent) and Performance Materials & Coatings (up 1 percent) more than offset a decline in Packaging & Specialty Plastics (down 2 percent), which was driven by lower sales of Hydrocarbons & Energy co-products.
Local price declined 9 percent from the year-ago period, with declines in all segments except Performance Materials & Coatings, which was flat. The decrease was primarily driven by lower polyethylene, isocyanates, and hydrocarbon co-products. Currency decreased sales by 2 percent, driven primarily by Europe, Middle East & Africa (EMEA) and Asia Pacific.
Equity losses for the quarter were $10 million, compared to equity earnings of $208 million in the year-ago period. The reduction was primarily driven by margin compression in monoethylene glycol (MEG) and polyethylene at the Kuwait joint ventures and isocyanates at the Sadara joint venture.
Operating EBITDA² was $1.9 billion, down 24 percent from the year-ago period and in-line with the division’s modeling guidance. Margin compression in polyethylene, isocyanates and siloxanes as well as lower equity earnings more than offset: volume gains, including in silicones, polyurethanes and packaging applications; cost synergy savings; and contributions from new capacity on the U.S. Gulf Coast.
The division achieved year-over-year cost synergy savings of more than $125 million in the quarter and since merger close has now delivered nearly $1 billion of cumulative savings. The division exited the first quarter at a $1.365 billion annual cost synergy run-rate.
In addition to the previously announced $3 billion open share repurchase program, on April 11, 2019 the Dow Board of Directors declared a dividend of $0.70 per share to be paid on June 14, 2019 to stockholders of record as of May 31, 2019, which reconfirms Dow’s commitment to an industry-leading dividend to its shareholders.

CEO Quote

“We successfully separated from DowDuPont on April 1, and are moving forward as the new Dow – a materials science leader well positioned to operate more productively, invest more prudently, grow more profitably and deliver higher returns to shareholders,” said Jim Fitterling, chief executive officer of Dow. “In the quarter, Dow showed its resilience. We achieved demand growth in differentiated silicones, polyurethane systems and packaging. We also continued to streamline our cost structure, delivering more than $125 million of cost synergies in the quarter and reaching a $1.365 billion cost synergy run-rate. We have nearly $400 million of additional cost synergy savings to deliver, as well as more than $200 million of remaining stranded cost removal, as separation of all three DowDuPont divisions is completed. These operational levers helped us moderate the impact of margin compression and discrete headwinds in our intermediate products.”

First Quarter Segment Highlights

Performance Materials & Coatings

Performance Materials & Coatings net sales were $2.3 billion, down 2 percent versus the year-ago period. Volume increased 1 percent, with growth in Asia Pacific and EMEA, and price was flat with the year-ago period. Currency decreased sales by 3 percent.

Consumer Solutions sales were flat with the year-ago period as gains in volume and local price were offset by currency headwinds in EMEA and Asia Pacific. The business reported local price and volume increases in all regions for its differentiated silicones products. These gains were partially offset by year-over-year price declines in siloxanes intermediates.

Coatings & Performance Monomers reported a sales decline on lower volume, local price and currency, in part due to shedding of lower margin business and weather-related delays to seasonal demand in the U.S. & Canada and EMEA regions.

Operating EBITDA was $481 million, down 18 percent from operating EBITDA of $586 million in the year-ago period, primarily due to lower prices for siloxanes and shipping restrictions from a Performance Monomers facility in Deer Park, Texas, due to a fire at a nearby third-party storage and terminal facility.

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure net sales were $3.4 billion, down 8 percent versus the year-ago period. Volume grew 6 percent, with gains in all regions. Local price declined 11 percent with decreases in all regions and both businesses. Currency decreased sales by 3 percent.

Polyurethanes & CAV sales declined, primarily driven by lower year-over-year isocyanates pricing, which were partially offset by higher volumes in all regions.

Industrial Solutions reported lower sales in all regions, driven by lower local price and currency headwinds in most regions. The business grew volume, driven by gains in EMEA and U.S. & Canada for industrial and oil and gas applications, as well as on strong demand for de-icing fluids, lubricants and fuels.

Equity losses for the segment were $48 million, compared with equity earnings of $149 million in the year-ago period. The year-over-year decline was driven by increased equity losses from the Sadara joint venture, driven by margin compression in isocyanates products, as well as lower margins for MEG produced by the Kuwait joint ventures.

Operating EBITDA was $448 million, down 31 percent from operating EBITDA of $654 million in the year-ago period. The decline in earnings was primarily due to lower equity earnings, as well as margin compression in isocyanates products.

https://seekingalpha.com/pr/17496640-first-quarter-2019-results-materials-science-division-dowdupont

May 3, 2019

Dow Results

First Quarter 2019 Results for Materials Science Division¹ of DowDuPont

Thu May 2, 2019 6:02 AM|Business Wire|About: DOW

Net Sales Decreased 10% to $10.8B, In-Line with Guidance
Op. EBITDA Declined 24% to $1.9B, In-Line with Guidance
Delivered >$125MM of Cost Synergy Savings; Cost Synergy Run-Rate of $1.365B

MIDLAND, Mich.–(BUSINESS WIRE)–

Dow:

First Quarter Financial Highlights

Net sales decreased 10 percent to $10.8 billion, in-line with the division’s modeling guidance. This compares to net sales of $12.0 billion in the year-ago period.
Volume grew 1 percent from the year-ago period, as gains in Industrial Intermediates & Infrastructure (up 6 percent) and Performance Materials & Coatings (up 1 percent) more than offset a decline in Packaging & Specialty Plastics (down 2 percent), which was driven by lower sales of Hydrocarbons & Energy co-products.
Local price declined 9 percent from the year-ago period, with declines in all segments except Performance Materials & Coatings, which was flat. The decrease was primarily driven by lower polyethylene, isocyanates, and hydrocarbon co-products. Currency decreased sales by 2 percent, driven primarily by Europe, Middle East & Africa (EMEA) and Asia Pacific.
Equity losses for the quarter were $10 million, compared to equity earnings of $208 million in the year-ago period. The reduction was primarily driven by margin compression in monoethylene glycol (MEG) and polyethylene at the Kuwait joint ventures and isocyanates at the Sadara joint venture.
Operating EBITDA² was $1.9 billion, down 24 percent from the year-ago period and in-line with the division’s modeling guidance. Margin compression in polyethylene, isocyanates and siloxanes as well as lower equity earnings more than offset: volume gains, including in silicones, polyurethanes and packaging applications; cost synergy savings; and contributions from new capacity on the U.S. Gulf Coast.
The division achieved year-over-year cost synergy savings of more than $125 million in the quarter and since merger close has now delivered nearly $1 billion of cumulative savings. The division exited the first quarter at a $1.365 billion annual cost synergy run-rate.
In addition to the previously announced $3 billion open share repurchase program, on April 11, 2019 the Dow Board of Directors declared a dividend of $0.70 per share to be paid on June 14, 2019 to stockholders of record as of May 31, 2019, which reconfirms Dow’s commitment to an industry-leading dividend to its shareholders.

CEO Quote

“We successfully separated from DowDuPont on April 1, and are moving forward as the new Dow – a materials science leader well positioned to operate more productively, invest more prudently, grow more profitably and deliver higher returns to shareholders,” said Jim Fitterling, chief executive officer of Dow. “In the quarter, Dow showed its resilience. We achieved demand growth in differentiated silicones, polyurethane systems and packaging. We also continued to streamline our cost structure, delivering more than $125 million of cost synergies in the quarter and reaching a $1.365 billion cost synergy run-rate. We have nearly $400 million of additional cost synergy savings to deliver, as well as more than $200 million of remaining stranded cost removal, as separation of all three DowDuPont divisions is completed. These operational levers helped us moderate the impact of margin compression and discrete headwinds in our intermediate products.”

First Quarter Segment Highlights

Performance Materials & Coatings

Performance Materials & Coatings net sales were $2.3 billion, down 2 percent versus the year-ago period. Volume increased 1 percent, with growth in Asia Pacific and EMEA, and price was flat with the year-ago period. Currency decreased sales by 3 percent.

Consumer Solutions sales were flat with the year-ago period as gains in volume and local price were offset by currency headwinds in EMEA and Asia Pacific. The business reported local price and volume increases in all regions for its differentiated silicones products. These gains were partially offset by year-over-year price declines in siloxanes intermediates.

Coatings & Performance Monomers reported a sales decline on lower volume, local price and currency, in part due to shedding of lower margin business and weather-related delays to seasonal demand in the U.S. & Canada and EMEA regions.

Operating EBITDA was $481 million, down 18 percent from operating EBITDA of $586 million in the year-ago period, primarily due to lower prices for siloxanes and shipping restrictions from a Performance Monomers facility in Deer Park, Texas, due to a fire at a nearby third-party storage and terminal facility.

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure net sales were $3.4 billion, down 8 percent versus the year-ago period. Volume grew 6 percent, with gains in all regions. Local price declined 11 percent with decreases in all regions and both businesses. Currency decreased sales by 3 percent.

Polyurethanes & CAV sales declined, primarily driven by lower year-over-year isocyanates pricing, which were partially offset by higher volumes in all regions.

Industrial Solutions reported lower sales in all regions, driven by lower local price and currency headwinds in most regions. The business grew volume, driven by gains in EMEA and U.S. & Canada for industrial and oil and gas applications, as well as on strong demand for de-icing fluids, lubricants and fuels.

Equity losses for the segment were $48 million, compared with equity earnings of $149 million in the year-ago period. The year-over-year decline was driven by increased equity losses from the Sadara joint venture, driven by margin compression in isocyanates products, as well as lower margins for MEG produced by the Kuwait joint ventures.

Operating EBITDA was $448 million, down 31 percent from operating EBITDA of $654 million in the year-ago period. The decline in earnings was primarily due to lower equity earnings, as well as margin compression in isocyanates products.

https://seekingalpha.com/pr/17496640-first-quarter-2019-results-materials-science-division-dowdupont

May 3, 2019

Tempur Sealy Results

Tempur Sealy Reports First Quarter 2019 Results

Thu May 2, 2019 6:45 AM|PR Newswire|About: TPX

– Direct Sales Increased 38%, North America Direct Sales Increased 36%

– Net Income Increased 23%, EPS Increased 21%

– Increased Full Year 2019 Guidance

PR NewswireLEXINGTON, Ky., May 2, 2019 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the first quarter ended March 31, 2019. The Company also revised its financial guidance for the full year 2019.

FIRST QUARTER 2019 FINANCIAL SUMMARY⁽¹⁾

Total net sales increased 8.4% to $690.9 million as compared to $637.4 million in the first quarter of 2018. On a constant currency basis⁽²⁾, total net sales increased 10.4%, with an increase of 12.7% in the North America business segment and an increase of 3.0% in the International business segment.
Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 40.8% as compared to 41.5% in the first quarter of 2018.
GAAP operating income increased 8.6% to $60.5 million as compared to $55.7 million in the first quarter of 2018. Operating income in the first quarter of 2019 included $3.3 million of acquisition-related and other costs. Adjusted operating income⁽²⁾ increased 14.5% to $63.8 million as compared to $55.7 million in the first quarter of 2018. The Company had no adjustments to operating income in the first quarter of 2018.
GAAP net income increased 22.9% to $28.4 million as compared to $23.1 million in the first quarter of 2018. Adjusted net income⁽²⁾ increased 18.7% to $29.8 million as compared to $25.1 million in the first quarter of 2018.
Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽²⁾increased 16.2% to $96.3 million as compared to $82.9 million for the first quarter of 2018. Adjusted EBITDA⁽²⁾ increased 8.3% to $92.8 million as compared to $85.7 million in the first quarter of 2018. In the first quarter of 2019, EBITDA⁽²⁾ included other income of $7.2 million related to the sale of a certain interest in the Company’s Asia-Pacific joint venture. EBITDA⁽²⁾ also included transaction costs of $3.3 million in the first quarter of 2019.
GAAP earnings per diluted share (“EPS”) increased 21.4% to $0.51 as compared to $0.42 in the first quarter of 2018. Adjusted EPS⁽²⁾ increased 17.4% to $0.54 as compared to $0.46 in the first quarter of 2018.

KEY HIGHLIGHTS

(in millions, except percentages and per common share amounts)	Three Months Ended				% Reported Change		% Constant Currency Change⁽²⁾
	March 31, 2019		March 31, 2018		% Reported Change		% Constant Currency Change⁽²⁾
Net sales	$	690.9	$	637.4	8.4	%	10.4	%
Net income	28.4		23.1		22.9	%	34.6	%
EBITDA ⁽²⁾	96.3		82.9		16.2	%	21.1	%
Adjusted EBITDA ⁽²⁾	92.8		85.7		8.3	%	13.1	%
EPS	0.51		0.42		21.4	%	33.3	%
Adjusted EPS ⁽²⁾	0.54		0.46		17.4	%	28.3	%

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “The strength of our brands and product, supported by the power of our world-wide omni-distribution strategy, drove our operating results. North America was a major highlight with outstanding growth in our Tempur-Pedic products and a solid performance by Sealy and Stearns & Foster products. While we recently introduced the most innovative product suite in our company’s history, we will be in market testing new revolutionary products that we expect will extend our leadership position. This aligns to our initiative to provide the most innovative bedding solutions in the world. Additionally, we continue to make progress toward optimizing our omni-distribution model, as we expanded both in wholesale and direct channels. A highlight for the quarter was global direct to consumer which grew to a record $75 million in the quarter while expanding margin. This channel represented 11% of global revenues.”

(1) All amounts presented for 2018 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 12.2% to $544.0 million as compared to $485.0 million in the first quarter of 2018. On a constant currency basis⁽²⁾, North America net sales increased 12.7% as compared to the first quarter of 2018. GAAP gross margin was 37.6% as compared to 37.9% in the first quarter of 2018. GAAP operating margin was 11.8% as compared to 11.1% in the first quarter of 2018.

North America net sales through the wholesale channel increased $47.8 million, or 10.5%, to $501.8 million as compared to the first quarter of 2018. North America net sales through the direct channel increased $11.2 million, or 36.1%, to $42.2 million, as compared to the first quarter of 2018, driven primarily by growth from expanded retail stores.

North America gross margin declined 30 basis points as compared to the first quarter of 2018. The decline was primarily driven by commodity cost inflation, increased floor model expenses and unfavorable merchandising mix. These were partially offset by brand mix and favorable pricing. North America operating margin improved 70 basis points as compared to the first quarter of 2018. The improvement in operating margin was driven by operating expense leverage, which was partially offset by the decline in gross margin.

International net sales decreased 3.6% to $146.9 million as compared to $152.4 million in the first quarter of 2018. On a constant currency basis⁽²⁾, International net sales increased 3.0% as compared to the first quarter of 2018. GAAP gross margin was 52.7% as compared to 53.0% in the first quarter of 2018. GAAP operating margin was 17.2% as compared to 18.8% in the first quarter of 2018.

International net sales through the wholesale channel decreased $15.0 million, or 11.6%, to $114.1 million as compared to the first quarter of 2018. International net sales through the direct channel increased $9.5 million, or 40.8%, to $32.8 million as compared to the first quarter of 2018.

International gross margin declined 30 basis points as compared to gross margin for the first quarter of 2018. The decline in gross margin was primarily driven by unfavorable foreign exchange. The decline was partially offset by operational improvements. International adjusted operating margin⁽²⁾ declined 140 basis points as compared to operating margin in the first quarter of 2018. The decline was driven by operating expense deleverage, unfavorable performance in the Asia-Pacific joint venture and the decline in gross margin.

Corporate operating expense increased to $29.0 million as compared to $27.0 million in the first quarter of 2018. Corporate adjusted operating expense ⁽²⁾decreased to $26.0 million as compared to corporate operating expense of $27.0 million in the first quarter of 2018.

https://seekingalpha.com/pr/17496707-tempur-sealy-reports-first-quarter-2019-results

May 3, 2019

Tempur Sealy Results

Tempur Sealy Reports First Quarter 2019 Results

Thu May 2, 2019 6:45 AM|PR Newswire|About: TPX

– Direct Sales Increased 38%, North America Direct Sales Increased 36%

– Net Income Increased 23%, EPS Increased 21%

– Increased Full Year 2019 Guidance

PR NewswireLEXINGTON, Ky., May 2, 2019 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the first quarter ended March 31, 2019. The Company also revised its financial guidance for the full year 2019.

FIRST QUARTER 2019 FINANCIAL SUMMARY⁽¹⁾

Total net sales increased 8.4% to $690.9 million as compared to $637.4 million in the first quarter of 2018. On a constant currency basis⁽²⁾, total net sales increased 10.4%, with an increase of 12.7% in the North America business segment and an increase of 3.0% in the International business segment.
Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 40.8% as compared to 41.5% in the first quarter of 2018.
GAAP operating income increased 8.6% to $60.5 million as compared to $55.7 million in the first quarter of 2018. Operating income in the first quarter of 2019 included $3.3 million of acquisition-related and other costs. Adjusted operating income⁽²⁾ increased 14.5% to $63.8 million as compared to $55.7 million in the first quarter of 2018. The Company had no adjustments to operating income in the first quarter of 2018.
GAAP net income increased 22.9% to $28.4 million as compared to $23.1 million in the first quarter of 2018. Adjusted net income⁽²⁾ increased 18.7% to $29.8 million as compared to $25.1 million in the first quarter of 2018.
Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽²⁾increased 16.2% to $96.3 million as compared to $82.9 million for the first quarter of 2018. Adjusted EBITDA⁽²⁾ increased 8.3% to $92.8 million as compared to $85.7 million in the first quarter of 2018. In the first quarter of 2019, EBITDA⁽²⁾ included other income of $7.2 million related to the sale of a certain interest in the Company’s Asia-Pacific joint venture. EBITDA⁽²⁾ also included transaction costs of $3.3 million in the first quarter of 2019.
GAAP earnings per diluted share (“EPS”) increased 21.4% to $0.51 as compared to $0.42 in the first quarter of 2018. Adjusted EPS⁽²⁾ increased 17.4% to $0.54 as compared to $0.46 in the first quarter of 2018.

KEY HIGHLIGHTS

(in millions, except percentages and per common share amounts)	Three Months Ended				% Reported Change		% Constant Currency Change⁽²⁾
	March 31, 2019		March 31, 2018		% Reported Change		% Constant Currency Change⁽²⁾
Net sales	$	690.9	$	637.4	8.4	%	10.4	%
Net income	28.4		23.1		22.9	%	34.6	%
EBITDA ⁽²⁾	96.3		82.9		16.2	%	21.1	%
Adjusted EBITDA ⁽²⁾	92.8		85.7		8.3	%	13.1	%
EPS	0.51		0.42		21.4	%	33.3	%
Adjusted EPS ⁽²⁾	0.54		0.46		17.4	%	28.3	%