Tempur Sealy Q4'13 net income dips 2.55%

07 Feb '14

5 min read

“Our Company accomplished a great deal in 2013 - we successfully completed the Sealy acquisition in March and since then have integrated all of the key functions, which has led to greater cost synergies than initially projected. We enter 2014 unified and coordinated and expect to further execute on each of our four key strategic growth initiatives.

“Our recent new product introductions in Tempur North America, Sealy and Tempur International are just a few of the initiatives we have in place to drive growth in 2014."

FULL YEAR FINANCIAL SUMMARY

GAAP EPS for the full year 2013 were $1.20 compared to GAAP EPS of $1.70 for the full year 2012.

The 2013 results include results for Sealy from March 18, 2013, the acquisition date, and also reflect transaction and integration costs related to the acquisition of Sealy, interest fees related to the Company's refinancing of its Term A Facility and Term B loans under its senior secured credit facility, as well as tax provision adjustments related to the repatriation of foreign earnings utilized in connection with the Sealy acquisition.

2012 GAAP EPS reflects the tax expense recorded in connection with the anticipated repatriation of foreign earnings together with certain transaction and integration costs related to the Sealy acquisition, and other restructuring costs.

Adjusted EPS were $2.38 for the full year 2013 as compared to adjusted EPS of $2.61 for the full year 2012.

GAAP net income for the full year 2013 was $74.0 million as compared to GAAP net income of $106.8 million for the full year 2012. The Company reported adjusted net income of $146.4 million for the full year 2013 as compared to adjusted net income of $164.1 million for the full year 2012.

Total net sales increased 75.7% to $2,464.3 million for the full year 2013 from $1,402.9 million for the full year 2012. The net sales increase was due to the inclusion of $1,114.7 million of Sealy net sales for the period of March 18, 2013 to December 31, 2013. Gross profit margin was 41.2% as compared to 50.9% for the full year 2012.

The gross profit margin decreased primarily as a result of the inclusion of Sealy, which has lower margins than the Tempur North America and Tempur International segments, and changes in product mix, offset partially by lower sourcing costs.

Operating income was $243.8 million as compared to $248.3 million for the full year 2012. Operating income for the full year 2013 included $44.6 million of transaction and integration costs related to the Sealy acquisition. Excluding these costs, the higher operating income reflects the inclusion of Sealy.

Tempur Sealy

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