Tempur Sealy International, Inc. (TPX) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 31, 2017

Earnings Press Release
10-K Annual Report
10-K YoY Changes
Tempur Sealy International, Inc.
Ticker: TPX CIK: 1206264

TEMPUR SEALY REPORTS FOURTH QUARTER AND FULL YEAR 2017 RESULTS

- Full Year Financial Results at High End of Guidance Range

- Gross Margin Expanded 100 Basis Points in the Fourth Quarter versus Prior Year, Highest Level Since Sealy Acquisition

- Direct Sales in North America Increased 56% in Fourth Quarter

LEXINGTON, KY, February 22, 2018 - Tempur Sealy International, Inc. (NYSE: TPX) today announced financial results for the fourth quarter and year ended December 31, 2017. The Company also issued financial guidance for the full year 2018.

FOURTH QUARTER 2017 FINANCIAL SUMMARY⁽¹⁾


•	Total net sales decreased 15.9% to $648.2 million from $771.1 million in the fourth quarter of 2016. On a constant currency basis⁽²⁾, total net sales decreased 17.0%, with a decrease of 22.6% in the North America business segment and an increase of 6.5% in the International business segment.


•	Gross margin under U.S. generally accepted accounting principles ("GAAP") increased to 42.2% as compared to 41.2% in the fourth quarter of 2016.


•	GAAP operating income was $79.0 million as compared to $103.4 million in the fourth quarter of 2016. Adjusted operating income⁽²⁾ was $84.5 million as compared to $112.0 million in the fourth quarter of 2016.


•	GAAP net income was $49.7 million as compared to $52.9 million in the fourth quarter of 2016. Adjusted net income⁽²⁾was $43.4 million as compared to $66.5 million in the fourth quarter of 2016.


•	Earnings before interest, tax, depreciation and amortization ("EBITDA")⁽²⁾was $106.6 million as compared to $126.0 million for the fourth quarter of 2016. Adjusted EBITDA⁽²⁾was $112.3 million as compared to $137.9 million in the fourth quarter of 2016.


•	GAAP earnings per diluted share ("EPS") was $0.91 as compared to $0.94 in the fourth quarter of 2016. Adjusted EPS⁽²⁾ was $0.79 as compared to $1.18 in the fourth quarter of 2016.


•	The Company recorded a net income tax benefit of $23.8 million related to the enactment of the Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform"). This is comprised of a $69.7 million deferred tax benefit related to the reduction in the U.S. income tax rate, net of a one-time tax charge for transition tax on foreign subsidiary earnings of $45.9 million.


•	The Company ended the fourth quarter of 2017 with total debt and consolidated funded debt less qualified cash⁽²⁾of $1.8 billion. Leverage based on the ratio of consolidated funded debt less qualified cash to adjusted EBITDA⁽²⁾ was 3.91 times for the trailing twelve months ended December 31, 2017.

FULL YEAR 2017 FINANCIAL SUMMARY⁽¹⁾


•	Total net sales decreased 12.0% to $2,754.4 million from $3,128.9 million in 2016.


•	GAAP gross margin was 41.4% as compared to 41.8% in 2016. Adjusted gross margin⁽²⁾ was 42.0% as compared to 41.9% in 2016.


•	GAAP operating income was $289.7 million as compared to $411.4 million in 2016. Adjusted operating income⁽²⁾ was $326.5 million, or 11.9% of net sales, as compared to $425.0 million, or 13.6% of net sales, in 2016.


•	GAAP net income was $152.7 million as compared to $191.6 million in 2016. Adjusted net income⁽²⁾was $175.2 million as compared to $242.4 million in 2016.


•	EBITDA⁽²⁾ was $403.0 million as compared to $506.7 million in 2016. Adjusted EBITDA⁽²⁾ was $448.5 million as compared to $521.6 million in 2016.


•	GAAP EPS was $2.79 as compared to $3.20 in 2016. Adjusted EPS⁽²⁾was $3.20 as compared to $4.05 in 2016.


•	Operating cash flow for the full year 2017 was $222.9 million as compared to $165.5 million in 2016.

(1) All amounts presented for 2016 reflect revisions to correct certain immaterial errors related to a subsidiary in Latin America.

(2) 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, February 22, 2018 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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