Tempur Sealy International, Inc. (TPX) SEC Filing 10-Q Quarterly report for the period ending Sunday, March 31, 2019

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

TEMPUR SEALY REPORTS FIRST QUARTER 2019 RESULTS

- Net Sales Increased 8%, Tempur North America Sales Increased 37%

- Direct Sales Increased 38%, North America Direct Sales Increased 36%

- Net Income Increased 23%, EPS Increased 21%

- Increased Full Year 2019 Guidance

LEXINGTON, KY, May 2, 2019 - Tempur Sealy International, Inc. (NYSE: TPX) announced financial results for the first quarter ended March 31, 2019. The Company also revised its financial guidance for the full year 2019.

FIRST QUARTER 2019 FINANCIAL SUMMARY⁽¹⁾


•	Total net sales increased 8.4% to $690.9 million as compared to $637.4 million in the first quarter of 2018. On a constant currency basis⁽²⁾, total net sales increased 10.4%, with an increase of 12.7% in the North America business segment and an increase of 3.0% in the International business segment.


•	Gross margin under U.S. generally accepted accounting principles ("GAAP") was 40.8% as compared to 41.5% in the first quarter of 2018.

•

GAAP operating income increased 8.6% to $60.5 million as compared to $55.7 million in the first quarter of 2018. Operating income in the first quarter of 2019 included $3.3 million of acquisition-related and other costs. Adjusted operating income⁽²⁾ increased 14.5% to $63.8 million as compared to $55.7 million in the first quarter of 2018. The Company had no adjustments to operating income in the first quarter of 2018.


•	GAAP net income increased 22.9% to $28.4 million as compared to $23.1 million in the first quarter of 2018. Adjusted net income⁽²⁾ increased 18.7% to $29.8 million as compared to $25.1 million in the first quarter of 2018.

•

Earnings before interest, tax, depreciation and amortization ("EBITDA")⁽²⁾increased 16.2% to $96.3 million as compared to $82.9 million for the first quarter of 2018. Adjusted EBITDA⁽²⁾ increased 8.3% to $92.8 million as compared to $85.7 million in the first quarter of 2018. In the first quarter of 2019, EBITDA⁽²⁾ included other income of $7.2 million related to the sale of a certain interest in the Company's Asia-Pacific joint venture. EBITDA⁽²⁾ also included transaction costs of $3.3 million in the first quarter of 2019.


•	GAAP earnings per diluted share ("EPS") increased 21.4% to $0.51 as compared to $0.42 in the first quarter of 2018. Adjusted EPS⁽²⁾ increased 17.4% to $0.54 as compared to $0.46 in the first quarter of 2018.

KEY HIGHLIGHTS



(in millions, except percentages and per common share amounts)	Three Months Ended				% Reported Change		% Constant Currency Change⁽²⁾
	March 31, 2019		March 31, 2018		% Reported Change		% Constant Currency Change⁽²⁾
Net sales	$	690.9	$	637.4	8.4	%	10.4	%
Net income	28.4		23.1		22.9	%	34.6	%
EBITDA ⁽²⁾	96.3		82.9		16.2	%	21.1	%
Adjusted EBITDA ⁽²⁾	92.8		85.7		8.3	%	13.1	%
EPS	0.51		0.42		21.4	%	33.3	%
Adjusted EPS ⁽²⁾	0.54		0.46		17.4	%	28.3	%

Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "The strength of our brands and product, supported by the power of our world-wide omni-distribution strategy, drove our operating results. North America was a major highlight with outstanding growth in our Tempur-Pedic products and a solid performance by Sealy and Stearns & Foster products. While we recently introduced the most innovative product suite in our company’s history, we will be in market testing new revolutionary products that we expect will extend our leadership position. This aligns to our initiative to provide the most innovative bedding solutions in the world. Additionally, we continue to make progress toward optimizing our omni-distribution model, as we expanded both in wholesale and direct channels. A highlight for the quarter was global direct to consumer which grew to a record $75 million in the quarter while expanding margin. This channel represented 11% of global revenues."

(1) All amounts presented for 2018 reflect reclassifications to previously reported amounts to adjust for discontinued operations.

(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, May 2, 2019 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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