Tempur Loses Large Contract
Chairman and CEO Scott Thompson commented, “Over the course of the week, we conducted discussions with representatives of Mattress Firm and Steinhoff, and we considered their request for a significant change in economic terms. Ultimately, we concluded that it was in the long-term interest of all of our stakeholders to terminate our contracts with Mattress Firm. This enables us to immediately reorient our employees and resources to support retail partners that exhibit a long-term commitment to Tempur Sealy’s brands.”
Thompson continued, “Tempur Sealy is the premium bedding leader, with the most recognized brands in the mattress sector and industry-leading product innovation. We remain committed to maintaining our leadership position and to collaborating with our strong global network of retail partners to create value for both our customers and our shareholders.”
The Company expects to report record financial results for the fourth quarter of 2016 and for the full year. For the fourth quarter 2016, the Company expects to report total net sales of approximately $770 million, a slight increase versus the prior year, GAAP net income of $61 to $63 million, and adjusted EBITDA(1) of $135 to $138 million.
For the full year 2016, the Company expects to report total net sales of approximately $3,127 million, a decrease of 1% versus the prior year, GAAP net income of $200 to $202 million, and adjusted EBITDA(1) of $519 to $522 million. The Company noted that this financial information is preliminary and is subject to among other things completion of the Company’s audited financial statements for 2016.
For the full year 2016, the Company’s net sales to Mattress Firm were approximately 21% on a worldwide basis which includes sales to HMK Mattress Holding, LLC (“Sleepy’s”). The Company’s sales to Mattress Firm declined approximately 11% in 2016 as compared to 2015, including sales to Sleepy’s in both years. As previously disclosed, Mattress Firm was acquired by Steinhoff in September 2016. All other Steinhoff-owned entities represented less than 0.5% of the Company’s total net sales in 2016.
Excluding sales to Mattress Firm and Sleepy’s, the Company expects that its net sales increased as compared to the prior year by approximately 4% and 2% in the fourth quarter and full year 2016, respectively.
As previously announced, Tempur Sealy is scheduled to report fourth quarter and full year 2016 financial results on February 16, 2017. The Company will hold a conference call to discuss those results at 8:00 a.m. Eastern Time.