Tempur Sealy Results
Reports Record Second Quarter Operating Income Growth of 93%
LEXINGTON, Ky., July 28, 2016 /PRNewswire/ — Tempur Sealy International, Inc. (TPX) (NYSE: TPX) today announced financial results for the second quarter ended June 30, 2016. The Company also updated financial guidance for the full year 2016.
SECOND QUARTER 2016 FINANCIAL SUMMARY
- Total net sales increased 5.2% to $804.4 million from $764.4 million in the second quarter of 2015. On a constant currency basis(1), total net sales increased 6.6%, with an increase of 6.4% in the North America business segment and an increase of 7.6% in the International business segment.
- Gross margin under U.S. generally accepted accounting principles (“GAAP”) was 41.9% as compared to 38.9% in the second quarter of 2015.
- GAAP operating income increased 92.7% to $100.2 million as compared to $52.0 million in the second quarter of 2015. Operating income in the second quarter of 2016 included $1.0 million of integration costs. Operating income in the second quarter of 2015 included $6.7 million of integration costs and $11.7 million of additional costs related to the Company’s 2015 Annual Meeting and related executive management transition and retention compensation. Adjusted operating income(1) increased 43.8% to $101.2 million, or 12.6% of net sales, as compared to $70.4 million, or 9.2% of net sales, in the second quarter of 2015.
- GAAP net income increased 0.5% to $21.3 million as compared to $21.2 million in the second quarter of 2015. The Company incurred a $47.2 million loss on extinguishment of debt associated with the completion of a new credit facility and new senior notes offering in the second quarter of 2016 and related repayment of existing debt. Adjusted net income(1) increased 67.3% to $55.7 million as compared to $33.3 million in the second quarter of 2015.
- Earnings before interest, tax, depreciation and amortization (“EBITDA”)(1) increased 61.7% to $123.7 million as compared to $76.5 million for the second quarter of 2015. Adjusted EBITDA(1) increased 38.1% to $124.7 million as compared to $90.3 million in the second quarter of 2015.
- GAAP earnings per diluted share (“EPS”) was $0.35 as compared to $0.34 in the second quarter of 2015. Adjusted EPS(1) increased 73.6% to $0.92 as compared to adjusted EPS(1) of $0.53 in the second quarter of 2015.
- The Company ended the second quarter of 2016 with consolidated funded debt less qualified cash(1) of $1.6 billion. Leverage based on the ratio of consolidated funded debt less qualified cash to Adjusted EBITDA(1) was 3.18 times for the trailing twelve months ended June 30, 2016 as compared to 3.77 times for the trailing twelve months ended June 30, 2015.
- During the second quarter of 2016, the Company repurchased 2.1 million shares of its common stock for a total cost of $122 million. As of June 30, 2016, the Company had $178 million available under its existing share repurchase authorization. In a separate press release issued today, Tempur Sealy International announced that its Board of Directors authorized an additional $200 million to its existing share repurchase authorization.
Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, “Thanks to the hard work of our more than 7,000 associates worldwide, the Company had an excellent quarter. We are gaining traction toward the goals we have set. Adjusted EBITDA and gross margins have increased for the third consecutive quarter, adjusted EPS is up 74%. We are improving operating leverage, continuing to invest heavily in our brands, expanding distribution, and successfully servicing our retailers and direct customers. By continuing to strengthen our iconic brands, drive higher ROIC and enhance our competitive cost position, we are positioning the Company well to deliver for our investors and other stakeholders for years to come.”
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