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TEMPUR SEALY REPORTS FIRST QUARTER 2018 RESULTS
- Net Sales Declined, Increased 3% Excluding Mattress Firm
- North American Direct Sales Increased Approximately 30%
- International Sales Increased 17%

LEXINGTON, KY, May 3, 2018 - Tempur Sealy International, Inc. (NYSE: TPX) today announced financial results for the first quarter ended March 31, 2018. The Company also reaffirmed its financial guidance for the full year 2018.

FIRST QUARTER 2018 FINANCIAL SUMMARY

Total net sales decreased 10.3% to $648.0 million from $722.1 million in the first quarter of 2017. On a constant currency basis, total net sales decreased 12.2%, with a decrease of 17.1% in the North America business segment and an increase of 8.2% in the International business segment. Total net sales in the first quarter of 2017 included $94.5 million in sales to Mattress Firm Inc. ("Mattress Firm").
Gross margin under U.S. generally accepted accounting principles ("GAAP") was 41.3% as compared to 39.7% in the first quarter of 2017, which included $11.5 million of charges associated with the termination of the relationship with Mattress Firm. Gross margin was 41.3% as compared to adjusted gross margin(1)  of 41.3% in the first quarter of 2017. 
GAAP operating income decreased to $53.9 million as compared to $59.5 million in the first quarter of 2017, which included $25.9 million of net charges associated with the Mattress Firm termination. GAAP operating income decreased to $53.9 million as compared to adjusted operating income(1)  of $85.4 million in the first quarter of 2017.
GAAP net income decreased to $23.1 million as compared to $33.9 million in the first quarter of 2017. GAAP net income decreased to $23.1 million as compared to adjusted net income(1)  of $52.2 million in the first quarter of 2017.
Earnings before interest, tax, depreciation and amortization ("EBITDA")(1)  decreased to $83.2 million as compared to $86.8 million for the first quarter of 2017, which includes $34.3 million of charges related to the Mattress Firm termination. EBITDA(1)  decreased to $83.2 million as compared to adjusted EBITDA(1)  of $121.1 million in the first quarter of 2017.
GAAP earnings per diluted share ("EPS") decreased to $0.42 as compared to $0.62 in the first quarter of 2017. EPS decreased to $0.42 as compared to adjusted EPS(1) of $0.96 in the first quarter of 2017.

KEY HIGHLIGHTS
(in millions, except percentages and per common share amounts)
Three Months Ended
 
% Change
 
% Change Constant Currency (1)
March 31, 2018
 
March 31, 2017
Net sales
$
648.0

 
$
722.1

 
(10.3
)%
 
(12.2
)%
EBITDA (1)
83.2

 
86.8

 
(4.1
)%
 
(8.9
)%
Adjusted EBITDA (1)
83.2

 
121.1

 
(31.3
)%
 
(34.7
)%


Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "Over the last twelve months, the team has made considerable progress towards resetting the foundation of our Company. We have enhanced our relationships with a diversified base of retail partners, we have expanded our owned store footprint and online presence, we are in the process of meaningfully enhancing our product portfolio, and we continue to be laser-focused on shareholder value. Our flexible operating model and productivity initiatives were on full display in the first quarter, as we maintained our gross margins despite planned sales declines after the termination with our largest account last year and cost pressures from commodities. With a new suite of bedding products and an intense focus on execution, Tempur Sealy is well positioned to increase earnings and create long-term shareholder value.”


  


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

The following information was filed by Tempur Sealy International, Inc. (TPX) on Thursday, May 3, 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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