• GAAP EPS from Continuing Operations of $0.21; Adj. EPS Increases 35% to $0.74
• GAAP Net Income from Continuing Operations of $535MM; Op. EBITDA Up 19% to $3.8B
• Net Sales Up 10% to $20.1B; Volume and Local Price Gains in All Divisions and All Regions
• Announces New $3B Stock Buyback Program, Expected to be Complete by First Spin
• Increases Cost Synergy Target to $3.6B; Raises Expected YoY Savings to $1.5B
• Reaffirms FY18 Adj. EPS Guidance: Up Low-20s Percent

MIDLAND, Mich. & WILMINGTON, Del.–(BUSINESS WIRE)– DowDuPont (DWDP):

Third Quarter Financial Highlights

• GAAP earnings per share from continuing operations was $0.21. Adjusted earnings¹ per share increased 35 percent to $0.74, compared with pro forma adjusted earnings¹ per share in the year-ago period of $0.55. Adjusted earnings per share excludes significant items in the quarter totaling net charges of $0.42 per share and an $0.11 per share charge for DuPont amortization of intangible assets.
• Net sales increased 10 percent to $20.1 billion with gains in all divisions and all regions, from pro forma net sales of $18.3 billion in the year-ago period. Net sales grew double-digits in Asia Pacific and high single digits in all other regions.
• Volume grew 5 percent on a pro forma basis from the year-ago period, with gains in all divisions and all regions, led by double-digit growth in Asia Pacific and Latin America.
• Local price rose 5 percent on a pro forma basis, with gains in all divisions and all regions.
• Operating EBITDA¹ increased 19 percent on a pro forma basis from the year-ago period to $3.8 billion. Operating EBITDA drivers in the quarter included local price and volume gains, cost synergies and lower pension/OPEB costs², which more than offset the impact of higher raw material costs and a headwind from currency.
• DowDuPont achieved cost synergy savings of more than $450 million in the quarter, and since merger close has now delivered more than $1.3 billion of cumulative savings. The Company also delivered a cost synergy run-rate of greater than $2.5 billion in the quarter, exceeding its Year 1 cost synergy run-rate target of 75 percent of the $3.3 billion.
• DowDuPont is announcing today a new share repurchase program of $3 billion, which it expects to complete by the first intended spin. In addition, the Company is increasing its cost synergy commitment to $3.6 billion from $3.3 billion and increasing the expected 2018 year-over-year savings to $1.5 billion from $1.4 billion.
• Cash flow from operations was a use of cash of $0.3 billion and included discretionary pension contributions of approximately $2.2 billion. Excluding these discretionary contributions, cash flow from operations would have been $1.9 billion.
• The Company returned nearly $2 billion to shareholders in the quarter through dividends ($0.9 billion) and share repurchases ($1 billion). Since merger close, DowDuPont has returned $7.5 billion to shareholders.

CEO Quote

“Our teams generated strong gains in volume, price and operating EBITDA by continuing to execute our growth strategy, capture cost synergies and drive productivity improvements,” said Ed Breen, chief executive officer of DowDuPont. “Organic sales rose 10 percent, equally driven by volume and local price as customer demand remained strong. We delivered our year-over-year cost synergies and we are again raising our target, now to $3.6 billion. We are also reaffirming our full year 2018 EPS guidance provided in August with our second quarter earnings announcement. Each division is performing well, and we remain on track to complete the intended separations, beginning with Materials Science on April 1, followed by Agriculture and Specialty Products on June 1.”

Third Quarter Division Highlights

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure reported net sales of $3.8 billion, up 18 percent from pro forma net sales of $3.2 billion in the year-ago period, with growth in all regions and double-digit increases in Asia Pacific, United States & Canada, and Latin America. Volume grew 14 percent, with gains in all regions. Local price rose 5 percent, with gains in most regions, led by a double-digit increase in United States & Canada. Currency was a 1 percent headwind.

Polyurethanes & CAV delivered sales gains in all regions, driven by volume and local price gains in most regions, more than offsetting easing isocyanate prices. The volume increase was led by Asia Pacific and EMEA. Industrial Solutions reported double-digit sales growth, driven by volume and local price gains in all regions. Volume growth was led by gains in industrial specialties, with double-digit growth in intermediates for crop defense; energy heat management; and food and feed manufacturing. Volume gains in both Polyurethanes & CAV and Industrial Solutions were further supported by increased supply from the Sadara joint venture.

Operating EBITDA in the third quarter was $654 million, down 3 percent from pro forma operating EBITDA of $676 million in the year-ago period. Rising raw material costs, the easing of isocyanate margins, and an unplanned outage associated with an isocyanates facility on the U.S. Gulf Coast more than offset local price and volume gains, as well as cost synergies.

Equity earnings for the segment totaled $54 million, compared with pro forma equity earnings of $41 million in the year-ago period. The year-over-year growth was driven by higher monoethylene glycol (MEG) pricing that benefited the Kuwait joint ventures.

https://seekingalpha.com/pr/17318813-dowdupont-reports-third-quarter-2018-results

• GAAP EPS from Continuing Operations of $0.21; Adj. EPS Increases 35% to $0.74
• GAAP Net Income from Continuing Operations of $535MM; Op. EBITDA Up 19% to $3.8B
• Net Sales Up 10% to $20.1B; Volume and Local Price Gains in All Divisions and All Regions
• Announces New $3B Stock Buyback Program, Expected to be Complete by First Spin
• Increases Cost Synergy Target to $3.6B; Raises Expected YoY Savings to $1.5B
• Reaffirms FY18 Adj. EPS Guidance: Up Low-20s Percent

MIDLAND, Mich. & WILMINGTON, Del.–(BUSINESS WIRE)– DowDuPont (DWDP):

Third Quarter Financial Highlights

• GAAP earnings per share from continuing operations was $0.21. Adjusted earnings¹ per share increased 35 percent to $0.74, compared with pro forma adjusted earnings¹ per share in the year-ago period of $0.55. Adjusted earnings per share excludes significant items in the quarter totaling net charges of $0.42 per share and an $0.11 per share charge for DuPont amortization of intangible assets.
• Net sales increased 10 percent to $20.1 billion with gains in all divisions and all regions, from pro forma net sales of $18.3 billion in the year-ago period. Net sales grew double-digits in Asia Pacific and high single digits in all other regions.
• Volume grew 5 percent on a pro forma basis from the year-ago period, with gains in all divisions and all regions, led by double-digit growth in Asia Pacific and Latin America.
• Local price rose 5 percent on a pro forma basis, with gains in all divisions and all regions.
• Operating EBITDA¹ increased 19 percent on a pro forma basis from the year-ago period to $3.8 billion. Operating EBITDA drivers in the quarter included local price and volume gains, cost synergies and lower pension/OPEB costs², which more than offset the impact of higher raw material costs and a headwind from currency.
• DowDuPont achieved cost synergy savings of more than $450 million in the quarter, and since merger close has now delivered more than $1.3 billion of cumulative savings. The Company also delivered a cost synergy run-rate of greater than $2.5 billion in the quarter, exceeding its Year 1 cost synergy run-rate target of 75 percent of the $3.3 billion.
• DowDuPont is announcing today a new share repurchase program of $3 billion, which it expects to complete by the first intended spin. In addition, the Company is increasing its cost synergy commitment to $3.6 billion from $3.3 billion and increasing the expected 2018 year-over-year savings to $1.5 billion from $1.4 billion.
• Cash flow from operations was a use of cash of $0.3 billion and included discretionary pension contributions of approximately $2.2 billion. Excluding these discretionary contributions, cash flow from operations would have been $1.9 billion.
• The Company returned nearly $2 billion to shareholders in the quarter through dividends ($0.9 billion) and share repurchases ($1 billion). Since merger close, DowDuPont has returned $7.5 billion to shareholders.

CEO Quote

“Our teams generated strong gains in volume, price and operating EBITDA by continuing to execute our growth strategy, capture cost synergies and drive productivity improvements,” said Ed Breen, chief executive officer of DowDuPont. “Organic sales rose 10 percent, equally driven by volume and local price as customer demand remained strong. We delivered our year-over-year cost synergies and we are again raising our target, now to $3.6 billion. We are also reaffirming our full year 2018 EPS guidance provided in August with our second quarter earnings announcement. Each division is performing well, and we remain on track to complete the intended separations, beginning with Materials Science on April 1, followed by Agriculture and Specialty Products on June 1.”

Third Quarter Division Highlights

Industrial Intermediates & Infrastructure

Industrial Intermediates & Infrastructure reported net sales of $3.8 billion, up 18 percent from pro forma net sales of $3.2 billion in the year-ago period, with growth in all regions and double-digit increases in Asia Pacific, United States & Canada, and Latin America. Volume grew 14 percent, with gains in all regions. Local price rose 5 percent, with gains in most regions, led by a double-digit increase in United States & Canada. Currency was a 1 percent headwind.

Polyurethanes & CAV delivered sales gains in all regions, driven by volume and local price gains in most regions, more than offsetting easing isocyanate prices. The volume increase was led by Asia Pacific and EMEA. Industrial Solutions reported double-digit sales growth, driven by volume and local price gains in all regions. Volume growth was led by gains in industrial specialties, with double-digit growth in intermediates for crop defense; energy heat management; and food and feed manufacturing. Volume gains in both Polyurethanes & CAV and Industrial Solutions were further supported by increased supply from the Sadara joint venture.

Operating EBITDA in the third quarter was $654 million, down 3 percent from pro forma operating EBITDA of $676 million in the year-ago period. Rising raw material costs, the easing of isocyanate margins, and an unplanned outage associated with an isocyanates facility on the U.S. Gulf Coast more than offset local price and volume gains, as well as cost synergies.

Equity earnings for the segment totaled $54 million, compared with pro forma equity earnings of $41 million in the year-ago period. The year-over-year growth was driven by higher monoethylene glycol (MEG) pricing that benefited the Kuwait joint ventures.

https://seekingalpha.com/pr/17318813-dowdupont-reports-third-quarter-2018-results

– Direct Sales Increased 29%, Net Sales Increased 2.5%

PR NewswireLEXINGTON, Ky., Nov. 1, 2018 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the third quarter ended September 30, 2018. The Company also updated its financial guidance for the full year 2018.

THIRD QUARTER 2018 FINANCIAL SUMMARY⁽¹⁾

• Total net sales increased 2.5% to $729.5 million as compared to $711.5 million in the third quarter of 2017. On a constant currency basis⁽²⁾, total net sales increased 3.4%, with an increase of 3.0% in the North America business segment and an increase of 4.9% in the International business segment.
• Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 41.1% as compared to 43.1% in the third quarter of 2017. Gross margin in the third quarter of 2018 included $4.9 million of restructuring charges and $3.7 million of supply chain transition costs. Adjusted gross margin⁽²⁾ was 42.3% as compared to 43.3% in the third quarter of 2017.
• GAAP operating income decreased 12.9% to $84.7 million as compared to $97.3 million in the third quarter of 2017. Operating income in the third quarter of 2018 included $9.4 million of restructuring charges and $3.7 million of supply chain transition costs. Adjusted operating income⁽²⁾ decreased 2.5% to $97.8 million as compared to $100.3 million in the third quarter of 2017.
• GAAP net income decreased 5.2% to $42.3 million as compared to $44.6 million in the third quarter of 2017.Adjusted net income⁽²⁾ increased 0.9% to $56.1 million as compared to $55.6 million in the third quarter of 2017.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽²⁾ decreased 1.5% to $112.7 million as compared to $114.4 million for the third quarter of 2017. Adjusted EBITDA⁽²⁾ decreased 1.3% to $127.7 million as compared to $129.4 million in the third quarter of 2017.
• GAAP earnings per diluted share (“EPS”) decreased 4.9% to $0.77 as compared to $0.81 in the third quarter of 2017. Adjusted EPS⁽²⁾ increased 1.0% to $1.02 as compared to $1.01 in the third quarter of 2017.

KEY HIGHLIGHTS

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “Our recent Tempur-Pedic and Sealy Hybrid product introductions have been the best-received in the company’s history, and have gained significant share in the marketplace.  Tempur-Pedic mattress units accelerated during the quarter, with growth of 29% in North America.  In North America, we are currently rolling out our higher-end Tempur LuxeAdapt product, and in early 2019 our Breeze products will be launched, rounding out our completely new line of Tempur-Pedic mattresses. The team is confident that the combination of these innovative new products, our expanding direct to consumer business, and our ongoing productivity initiatives will continue to enhance our world wide competitive position.”

(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 2.6% to $595.8 million as compared to $580.6 million in the third quarter of 2017. On a constant currency basis⁽²⁾, North America net sales increased 3.0% as compared to the third quarter of 2017. GAAP gross margin was 38.5% as compared to 41.1% in the third quarter of 2017. GAAP operating margin was 13.7% as compared to 17.2% in the third quarter of 2017.

North America net sales through the wholesale channel increased $6.3 million to $553.6 million. North America net sales through the direct channel increased $8.9 million, or 26.7%, to $42.2 million, as compared to the third quarter of 2017, driven primarily by growth from expanded retail stores.

North America adjusted gross margin⁽²⁾ declined 130 basis points as compared to the third quarter of 2017. The decline was driven primarily by commodity cost inflation and unfavorable Tempur product mix. These were partially offset by favorable brand mix, pricing and operational improvements. North America adjusted operating margin⁽²⁾ declined 150 basis points as compared to the third quarter of 2017. The decline in adjusted operating margin⁽²⁾ was primarily driven by the decline in adjusted gross margin⁽²⁾.

International net sales increased 2.1% to $133.7 million as compared to $130.9 million in the third quarter of 2017. On a constant currency basis⁽²⁾, International net sales increased 4.9% as compared to the third quarter of 2017. Gross margin was 53.0% as compared to 52.4% in the third quarter of 2017. GAAP operating margin was 19.3% as compared to 18.0% in the third quarter of 2017.

International net sales through the wholesale channel decreased $3.6 million to $107.3 million and net sales through the direct channel increased $6.4 million, or 32.0%, to $26.4 million as compared to the third quarter of 2017.

International gross margin improved 60 basis points as compared to gross margin for the third quarter of 2017. The improvement in gross margin was driven primarily by the change in classification of royalty income due to the adoption of new revenue recognition guidance and operational improvements. These were partially offset by unfavorable mix, foreign exchange and commodity cost inflation. International adjusted operating margin⁽²⁾ improved 20 basis points as compared to the third quarter of 2017. The improvement was driven by favorable operating expense leverage and the improvement in gross margin, offset by the change in classification of royalty income due to the adoption of new revenue recognition guidance.

Corporate operating expense decreased to $23.0 million as compared to $25.9 million in the third quarter of 2017.

https://seekingalpha.com/pr/17319002-tempur-sealy-reports-third-quarter-2018-results

– Direct Sales Increased 29%, Net Sales Increased 2.5%

PR NewswireLEXINGTON, Ky., Nov. 1, 2018 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) announced financial results for the third quarter ended September 30, 2018. The Company also updated its financial guidance for the full year 2018.

THIRD QUARTER 2018 FINANCIAL SUMMARY⁽¹⁾

• Total net sales increased 2.5% to $729.5 million as compared to $711.5 million in the third quarter of 2017. On a constant currency basis⁽²⁾, total net sales increased 3.4%, with an increase of 3.0% in the North America business segment and an increase of 4.9% in the International business segment.
• Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 41.1% as compared to 43.1% in the third quarter of 2017. Gross margin in the third quarter of 2018 included $4.9 million of restructuring charges and $3.7 million of supply chain transition costs. Adjusted gross margin⁽²⁾ was 42.3% as compared to 43.3% in the third quarter of 2017.
• GAAP operating income decreased 12.9% to $84.7 million as compared to $97.3 million in the third quarter of 2017. Operating income in the third quarter of 2018 included $9.4 million of restructuring charges and $3.7 million of supply chain transition costs. Adjusted operating income⁽²⁾ decreased 2.5% to $97.8 million as compared to $100.3 million in the third quarter of 2017.
• GAAP net income decreased 5.2% to $42.3 million as compared to $44.6 million in the third quarter of 2017.Adjusted net income⁽²⁾ increased 0.9% to $56.1 million as compared to $55.6 million in the third quarter of 2017.
• Earnings before interest, tax, depreciation and amortization (“EBITDA”)⁽²⁾ decreased 1.5% to $112.7 million as compared to $114.4 million for the third quarter of 2017. Adjusted EBITDA⁽²⁾ decreased 1.3% to $127.7 million as compared to $129.4 million in the third quarter of 2017.
• GAAP earnings per diluted share (“EPS”) decreased 4.9% to $0.77 as compared to $0.81 in the third quarter of 2017. Adjusted EPS⁽²⁾ increased 1.0% to $1.02 as compared to $1.01 in the third quarter of 2017.

KEY HIGHLIGHTS

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “Our recent Tempur-Pedic and Sealy Hybrid product introductions have been the best-received in the company’s history, and have gained significant share in the marketplace.  Tempur-Pedic mattress units accelerated during the quarter, with growth of 29% in North America.  In North America, we are currently rolling out our higher-end Tempur LuxeAdapt product, and in early 2019 our Breeze products will be launched, rounding out our completely new line of Tempur-Pedic mattresses. The team is confident that the combination of these innovative new products, our expanding direct to consumer business, and our ongoing productivity initiatives will continue to enhance our world wide competitive position.”

(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 2.6% to $595.8 million as compared to $580.6 million in the third quarter of 2017. On a constant currency basis⁽²⁾, North America net sales increased 3.0% as compared to the third quarter of 2017. GAAP gross margin was 38.5% as compared to 41.1% in the third quarter of 2017. GAAP operating margin was 13.7% as compared to 17.2% in the third quarter of 2017.

North America net sales through the wholesale channel increased $6.3 million to $553.6 million. North America net sales through the direct channel increased $8.9 million, or 26.7%, to $42.2 million, as compared to the third quarter of 2017, driven primarily by growth from expanded retail stores.

North America adjusted gross margin⁽²⁾ declined 130 basis points as compared to the third quarter of 2017. The decline was driven primarily by commodity cost inflation and unfavorable Tempur product mix. These were partially offset by favorable brand mix, pricing and operational improvements. North America adjusted operating margin⁽²⁾ declined 150 basis points as compared to the third quarter of 2017. The decline in adjusted operating margin⁽²⁾ was primarily driven by the decline in adjusted gross margin⁽²⁾.

International net sales increased 2.1% to $133.7 million as compared to $130.9 million in the third quarter of 2017. On a constant currency basis⁽²⁾, International net sales increased 4.9% as compared to the third quarter of 2017. Gross margin was 53.0% as compared to 52.4% in the third quarter of 2017. GAAP operating margin was 19.3% as compared to 18.0% in the third quarter of 2017.

International net sales through the wholesale channel decreased $3.6 million to $107.3 million and net sales through the direct channel increased $6.4 million, or 32.0%, to $26.4 million as compared to the third quarter of 2017.

International gross margin improved 60 basis points as compared to gross margin for the third quarter of 2017. The improvement in gross margin was driven primarily by the change in classification of royalty income due to the adoption of new revenue recognition guidance and operational improvements. These were partially offset by unfavorable mix, foreign exchange and commodity cost inflation. International adjusted operating margin⁽²⁾ improved 20 basis points as compared to the third quarter of 2017. The improvement was driven by favorable operating expense leverage and the improvement in gross margin, offset by the change in classification of royalty income due to the adoption of new revenue recognition guidance.

Corporate operating expense decreased to $23.0 million as compared to $25.9 million in the third quarter of 2017.

https://seekingalpha.com/pr/17319002-tempur-sealy-reports-third-quarter-2018-results