Tempur Sealy International, Inc. (TPX) SEC Filing 10-Q Quarterly report for the period ending Saturday, September 30, 2017

Earnings Press Release
10-Q Quarterly Report
10-Q QoQ Changes
Tempur Sealy International, Inc.
Ticker: TPX CIK: 1206264

TEMPUR SEALY REPORTS THIRD QUARTER 2017 RESULTS

- Net Sales in North America Declined, Tempur-Pedic Sales Increased 26% Excluding Mattress Firm

- Increased Financial Guidance to $435 to $450 Million of Adjusted EBITDA in 2017

LEXINGTON, KY, November 2, 2017 - Tempur Sealy International, Inc. (NYSE: TPX) today announced financial results for the third quarter ended September 30, 2017. The Company also increased its financial guidance for the full year 2017.

THIRD QUARTER 2017 FINANCIAL SUMMARY


•	Total net sales decreased 12.9% to $724.8 million from $832.4 million in the third quarter of 2016. On a constant currency basis⁽¹⁾, total net sales decreased 13.3%, with a decrease of 17.2% in the North America business segment and an increase of 7.0% in the International business segment.


•	Gross margin under U.S. generally accepted accounting principles ("GAAP") was 43.1% as compared to 43.5% in the third quarter of 2016.


•	GAAP operating income decreased 27.8% to $94.6 million as compared to $131.1 million in the third quarter of 2016. Adjusted operating income⁽¹⁾ decreased 23.6% to $100.1 million as compared to $131.1 million in the third quarter of 2016.


•	GAAP net income decreased 42.7% to $44.6 million as compared to $77.8 million in the third quarter of 2016. Adjusted net income⁽¹⁾decreased 29.4% to $54.9 million as compared to $77.8 million in the third quarter of 2016.


•	Earnings before interest, tax, depreciation and amortization ("EBITDA")⁽¹⁾decreased 20.1% to $123.8 million as compared to $155.0 million for the third quarter of 2016. Adjusted EBITDA⁽¹⁾decreased 16.6% to $129.3 million as compared to $155.0 million in the third quarter of 2016.


•	GAAP earnings per diluted share ("EPS") decreased 38.6% to $0.81 as compared to $1.32 in the third quarter of 2016. Adjusted EPS⁽¹⁾ decreased 24.2% to $1.00 as compared to $1.32 in the third quarter of 2016.


•	Net cash provided by operating activities was $127.3 million as compared to $57.9 million in the third quarter of 2016. The Company generated $109.8 million of free cash flow⁽¹⁾ in the third quarter as compared to $40.3 million in the third quarter of 2016.


•	The Company ended the third quarter of 2017 with total debt and consolidated funded debt less qualified cash⁽¹⁾of $1.8 billion. Leverage based on the ratio of consolidated funded debt less qualified cash to adjusted EBITDA⁽¹⁾ was 3.70 times for the trailing twelve months ended September 30, 2017.

KEY HIGHLIGHTS



(in millions, except percentages and per common share amounts)	Three Months Ended				% Change		% Change Constant Currency ⁽¹⁾
	September 30, 2017		September 30, 2016		% Change		% Change Constant Currency ⁽¹⁾
Net sales	$	724.8	$	832.4	(12.9	)%	(13.3	)%
Net income	44.6		77.8		(42.7	)%	(43.3	)%
Adjusted net income ⁽¹⁾	54.9		77.8		(29.4	)%	(30.1	)%
EPS	0.81		1.32		(38.6	)%	(39.4	)%
Adjusted EPS ⁽¹⁾	1.00		1.32		(24.2	)%	(25.0	)%
EBITDA ⁽¹⁾	123.8		155.0		(20.1	)%	(20.6	)%
Adjusted EBITDA ⁽¹⁾	129.3		155.0		(16.6	)%	(17.1	)%

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "The team generated one of the highest cash flow quarters in our company's history despite several challenges including a significant change in our distribution network, three hurricanes, and commodity inflation. Looking ahead, our robust pipeline of innovation provides the foundation for new products next year, especially an exciting new Tempur-Pedic line in North America. These products, combined with our new multi-channel advertising campaigns will reinforce our leadership position in premium bedding, provide our retailer partners with a competitive advantage to grow their revenue and earnings, and simplify the consumers' retail experience."

(1) This is a non-GAAP financial measure. Please refer to "Non-GAAP Financial Measures and Constant Currency Information" below.

The following information was filed by Tempur Sealy International, Inc. (TPX) on Thursday, November 2, 2017 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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