Tempur Sealy International, Inc. (TPX) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2014

Earnings Press Release
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Tempur Sealy International, Inc.
Ticker: TPX CIK: 1206264

TEMPUR SEALY REPORTS FOURTH QUARTER AND FULL YEAR 2014 RESULTS

– Reports Fourth Quarter GAAP EPS of $0.75; Adjusted EPS of $0.86

– Issues Financial Guidance for 2015

LEXINGTON, KY, February 5, 2015 – Tempur Sealy International, Inc. (NYSE: TPX), the world’s largest bedding provider, today announced financial results for the fourth quarter and year ended December 31, 2014. The Company also issued financial guidance for 2015.

FOURTH QUARTER FINANCIAL SUMMARY

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Earnings per diluted share (“EPS”) under U.S. generally accepted accounting principles (“GAAP”) in the fourth quarter of 2014 were $0.75 compared to GAAP EPS of $0.44 in the fourth quarter of 2013. The 2014 results reflect integration costs, and certain non-recurring items, including financing costs and income from a partial settlement of a legal dispute. The 2013 results reflect integration costs, transaction costs and financing costs related to the Company’s refinancing a portion of its senior secured credit facility.

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Adjusted EPS (which is a non-GAAP measure) increased 30% to $0.86 in the fourth quarter of 2014 as compared to adjusted EPS of $0.66 in the fourth quarter of 2013. Unfavorable foreign exchange impacted adjusted EPS by $0.06 in the fourth quarter of 2014 as compared to the fourth quarter of 2013. For additional information regarding adjusted EPS, adjusted net income and constant currency (which are non-GAAP measures), please refer to the reconciliations and other information included in the attached schedules.


•	GAAP net income in the fourth quarter of 2014 was $46.6 million as compared to GAAP net income of $27.5 million for the fourth quarter of 2013. The Company reported adjusted net income of $53.2 million for the fourth quarter of 2014 as compared to adjusted net income of $41.1 million for the fourth quarter of 2013.


•	Total net sales increased 9.9% to $745.5 million in the fourth quarter of 2014 from $678.1 million in the fourth quarter of 2013. On a constant currency basis, fourth quarter net sales increased 12.8%. The net sales increase was driven by growth in each of the Company's three business segments.


•	Gross margin in the fourth quarter of 2014 was 39.5% as compared to 40.2% in the fourth quarter of 2013, with slightly lower margins in each of the Company's three business segments.

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Operating income in the fourth quarter of 2014 was $76.5 million as compared to $74.1 million in the fourth quarter of 2013. Operating income in the fourth quarter of 2014 included $18.9 million of integration costs related to the Sealy acquisition and $1.0 million of financing costs related to the October 2014 amendment to the Company's senior secured credit facility. The fourth quarter of 2013 included $8.2 million of transaction and integration costs related to the Sealy acquisition.


•	EBITDA for the fourth quarter of 2014 was $112.0 million as compared to $97.4 million for the fourth quarter of 2013. Adjusted EBITDA (this and EBITDA are non-GAAP measures) for the fourth quarter of 2014 was $116.0 million as compared to $104.2 million for the fourth quarter of 2013.

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The Company ended the quarter with consolidated funded debt less qualified cash of $1.6 billion. The ratio of consolidated funded debt less qualified cash to adjusted EBITDA was 3.89 times, calculated in accordance with the Company’s senior secured credit facility. For additional information regarding EBITDA, adjusted EBITDA and consolidated funded debt less qualified cash (which are non-GAAP measures) please refer to the reconciliations and other information included in the attached schedules.

Tempur Sealy International, Inc. CEO Mark Sarvary commented, "In 2014 strong sales growth was driven by new products and effective marketing, particularly in the US, and we broadened our distribution throughout the world. We generated operating cash flow of $225 million and significantly reduced our total debt. We are confident that 2015 will be another year of solid sales and earnings growth, although unfavorable foreign exchange will be even more significant in 2015 than it was in 2014."

The following information was filed by Tempur Sealy International, Inc. (TPX) on Thursday, February 5, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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