Tempur Sealy Reviews Third Quarter Outcomes

– Consolidated Gross sales Decreased 5.5%, Direct Channel Gross sales Elevated 8.1%

– Reviews EPS of $0.75 and Adjusted EPS⁽¹⁾ of $0.78

– Declares Fourth Quarter Dividend of $0.10 per share

LEXINGTON, Ky., Nov. 3, 2022 /PRNewswire/ — Tempur Sealy Worldwide, Inc. (NYSE: TPX) introduced monetary outcomes for the third quarter ended September 30, 2022. The Firm additionally issued up to date monetary steerage for the total yr 2022.

THIRD QUARTER 2022 FINANCIAL SUMMARY

• Complete web gross sales decreased 5.5% to $1,283.3 million as in comparison with $1,358.3 million within the third quarter of 2021. On a continuing forex foundation⁽¹⁾, complete web gross sales decreased 3.1%, with a lower of 5.4% within the North America enterprise phase and a rise of seven.4% within the Worldwide enterprise phase.
• Gross margin was 42.2% as in comparison with 42.5% within the third quarter of 2021. Adjusted gross margin⁽¹⁾ was 42.5% within the third quarter of 2022. There have been no changes to gross margin within the third quarter of 2021.
• Working earnings decreased 19.5% to $201.0 million as in comparison with $249.8 million within the third quarter of 2021. Adjusted working earnings⁽¹⁾ was $206.7 million as in comparison with $252.1 million within the third quarter of 2021.
• Web earnings decreased 25.2% to $132.7 million as in comparison with $177.4 million within the third quarter of 2021. Adjusted web earnings⁽¹⁾ decreased 23.3% to $137.8 million as in comparison with $179.6 million within the third quarter of 2021.
• Earnings earlier than curiosity, tax, depreciation and amortization (“EBITDA”)⁽¹⁾ decreased 16.9% to $245.4 million as in comparison with $295.2 million within the third quarter of 2021. Adjusted EBITDA⁽¹⁾ decreased 15.4% to $251.9 million as in comparison with $297.6 million within the third quarter of 2021.
• Earnings per diluted share (“EPS”) decreased 13.8% to $0.75 as in comparison with $0.87 within the third quarter of 2021. Adjusted EPS⁽¹⁾ decreased 11.4% to $0.78 as in comparison with $0.88 within the third quarter of 2021.

KEY HIGHLIGHTS

Firm Chairman and CEO Scott Thompson commented, “Our third quarter outcomes exhibit the continued energy of our enterprise mannequin and industry-leading merchandise, as they mitigated the unfavorable overseas change dynamic and general difficult working surroundings within the quarter. We carried out largely in-line with our expectations whereas working via these headwinds. Over the past couple quarters, we now have prolonged some capital challenge timelines, and trimmed across the edges, slicing again on anticipated hiring and bills. Going ahead, we are going to preserve the present working surroundings in thoughts as we drive our aggressive benefits to outperform the worldwide bedding market and place ourselves properly for the market’s eventual normalization.”

Enterprise Section Highlights

The Firm’s enterprise segments embody North America and Worldwide. Company working bills should not included in both of the enterprise segments and are introduced individually as a reconciling merchandise to consolidated outcomes.

North America web gross sales decreased 5.6% to $1,057.7 million as in comparison with $1,120.0 million within the third quarter of 2021. On a continuing forex foundation⁽¹⁾, North America web gross sales decreased 5.4% as in comparison with the third quarter of 2021. Gross margin was 39.8% as in comparison with 39.9% within the third quarter of 2021. Adjusted gross margin⁽¹⁾ was 40.2% within the third quarter of 2022. There have been no changes to gross margin within the third quarter of 2021. Working margin was 19.4% as in comparison with 21.2% within the third quarter of 2021. Adjusted working margin⁽¹⁾ was 19.8% within the third quarter of 2022. There have been no changes to working margin within the third quarter of 2021.

North America web gross sales via the wholesale channel decreased $73.1 million, or 7.4%, to $918.1 million, as in comparison with the third quarter of 2021, primarily pushed by macroeconomic pressures impacting U.S. client conduct. North America web gross sales via the direct channel elevated $10.8 million, or 8.4%, to $139.6 million, as in comparison with the third quarter of 2021.

North America adjusted gross margin⁽¹⁾ improved 30 foundation factors as in comparison with gross margin in the third quarter of 2021. The development was primarily pushed by pricing actions to offset commodity inflation and favorable model combine, partially offset by operational investments to service our prospects. North America adjusted working margin⁽¹⁾ declined 140 foundation factors as in comparison with working margin within the third quarter of 2021. The decline was primarily pushed by promoting investments and working expense deleverage partially offset by the development in gross margin.

Worldwide web gross sales decreased 5.3% to $225.6 million as in comparison with $238.3 million within the third quarter of 2021. On a continuing forex foundation⁽¹⁾, Worldwide web gross sales elevated 7.4% as in comparison with the third quarter of 2021. Gross margin was 53.4% as in comparison with 54.6% within the third quarter of 2021. Working margin was 14.5% as in comparison with 21.1% within the third quarter of 2021. Adjusted working margin⁽¹⁾ was 14.7% as in comparison with 22.1% within the third quarter of 2021.

Worldwide web gross sales via the wholesale channel decreased $22.9 million, or 21.2%, to $85.1 million as in comparison with the third quarter of 2021. Worldwide web gross sales via the direct channel elevated $10.2 million, or 7.8%, to $140.5 million as in comparison with the third quarter of 2021. Within the third quarter of 2022, Worldwide web gross sales decreased $30 million as a result of unfavorable overseas change.

Worldwide gross margin declined 120 foundation factors as in comparison with the third quarter of 2021. The decline was primarily pushed by the acquisition of Goals driving unfavorable combine, and overseas forex change charges. Goals’ margin profile is decrease than our historic Worldwide margins as they promote a wide range of merchandise throughout a variety of value factors. Worldwide adjusted working margin⁽¹⁾ declined 740 foundation factors as in comparison with the third quarter of 2021. The decline was primarily pushed by working expense deleverage, the decline in gross margin, and Asia three way partnership efficiency as a result of COVID-19 associated shutdowns.

Company working expense was $36.6 million, in line with the third quarter of 2021.

Consolidated web earnings decreased 25.2% to $132.7 million as in comparison with $177.4 million within the third quarter of 2021. Adjusted web earnings⁽¹⁾ decreased 23.3% to $137.8 million as in comparison with $179.6 million within the third quarter of 2021. EPS decreased 13.8% to $0.75 as in comparison with $0.87 within the third quarter of 2021. Adjusted EPS⁽¹⁾ decreased 11.4% to $0.78 as in comparison with $0.88 within the third quarter of 2021.

The Firm ended the third quarter of 2022 with complete debt of $2.8 billion and consolidated indebtedness much less netted money⁽¹⁾ of $2.7 billion. Leverage based mostly on the ratio of consolidated indebtedness much less netted money⁽¹⁾ to adjusted EBITDA⁽¹⁾ was 2.77 occasions for the trailing twelve months ended September 30, 2022.

Through the third quarter of 2022, the Firm repurchased 1.0 million shares of its widespread inventory for a complete price of $25.2 million. Over the past twelve months, the Firm has repurchased 24.1 million shares of its widespread inventory for a complete price of $887.7 million. As of September 30, 2022, the Firm had roughly $809.5 million obtainable beneath its current share repurchase authorization.

Moreover, at this time the Firm introduced that its Board of Administrators declared a quarterly money dividend of $0.10 per share, payable on December 1, 2022, to shareholders of document on the shut of enterprise on November 17, 2022.

Firm Chairman and CEO Scott Thompson commented, “Total, we’re happy with each our quarterly outcomes and the progress we now have made on our long-term initiatives, in opposition to an evolving macroeconomic backdrop. We enter this advanced macro interval with retailers typically in fine condition, a powerful aggressive place, and new modern merchandise to launch. We’re watching macro developments carefully and adjusting to the market situations, whereas staying aggressive and on technique.”

Monetary Steerage

The Firm has up to date its earnings steerage for the total yr 2022 and at the moment expects an adjusted EPS⁽¹⁾ vary of $2.50 to $2.60. This contemplates the Firm’s present outlook for full yr 2022 consolidated gross sales to be flat to prior yr.

The Firm famous that its expectations are based mostly on info obtainable on the time of this launch, and are topic to altering situations and dangers, a lot of that are exterior the Firm’s management.

Convention Name Info

Tempur Sealy Worldwide, Inc. will host a dwell convention name to debate monetary outcomes at this time, November 3, 2022, at 8:00 a.m. Japanese Time. The decision will likely be webcast and could be accessed on the Firm’s investor relations web site at investor.tempursealy.com. After the convention name, a webcast replay will stay obtainable on the investor relations part of the Firm’s web site for 30 days. 

Non-GAAP Monetary Measures and Fixed Foreign money Info

For extra info concerning EBITDA, adjusted EBITDA, adjusted EPS, adjusted web earnings, adjusted gross revenue, adjusted gross margin, adjusted working earnings (expense), adjusted working margin, consolidated indebtedness and consolidated indebtedness much less netted money (all of that are non-GAAP monetary measures), please check with the reconciliations and different info included within the connected schedules. For info on the methodology used to current info on a continuing forex foundation, please check with “Fixed Foreign money Info” included within the connected schedules.

The  Firm is unable to reconcile ahead–wanting adjusted EPS, a non–GAAP monetary measure, to EPS, its most instantly comparable ahead–wanting GAAP monetary measure, with out unreasonable efforts, as a result of the Firm is at the moment unable to foretell with an affordable diploma of certainty the kind and extent of sure objects that may be anticipated to impression EPS in 2022.

Ahead-Wanting Statements

This press launch accommodates statements which may be characterised as “forward-looking,” throughout the which means of the federal securities legal guidelines. Such statements would possibly embody info regarding a number of of the Firm’s plans, steerage, goals, objectives, methods, and different info that isn’t historic info. When used on this launch, the phrases “assumes,” “estimates,” “expects,” “steerage,” “anticipates,” “would possibly,” “tasks,” “plans,” “proposed,” “targets,” “intends,” “believes,” “will” and variations of such phrases or related expressions are supposed to establish forward-looking statements. These forward-looking statements embody, with out limitation, statements referring to the Firm’s quarterly money dividend, the Firm’s share repurchase targets, the Firm’s expectations concerning provide chain disruptions, geopolitical occasions together with the battle in Ukraine, the macroeconomic surroundings, overseas change charges and fluctuations in such charges, COVID-19 associated disruptions, web gross sales for 2022, EBITDA and Adjusted EBITDA for 2022, and EPS and Adjusted EPS for 2022 and subsequent intervals and the Firm’s expectations for growing gross sales development, product launches, anticipated hiring and promoting, capital challenge timelines, channel development, acquisitions and commodities outlook. Any forward-looking statements contained herein are based mostly upon present expectations and beliefs and varied assumptions. There could be no assurance that the Firm will notice these expectations, meet its steerage, or that these beliefs will show appropriate.

Quite a few components, a lot of that are past the Firm’s management, may trigger precise outcomes to vary materially from any which may be expressed herein as forward-looking statements. These potential dangers embody the components mentioned within the Firm’s Annual Report on Kind 10-Ok for the yr ended December 31, 2021 and within the Firm’s Quarterly Reviews on Kind 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022. There could also be different components that will trigger the Firm’s precise outcomes to vary materially from the forward-looking statements. The Firm undertakes no obligation to replace any forward-looking assertion to replicate occasions or circumstances after the date on which such assertion is made.

About Tempur Sealy Worldwide, Inc.

Tempur Sealy is dedicated to enhancing the sleep of extra individuals, each evening, all all over the world. As a number one designer, producer, distributor and retailer of bedding merchandise worldwide, we all know how essential a very good evening of sleep is to general well being and wellness. Using over a century of data and industry-leading innovation, we ship award-winning merchandise that present breakthrough sleep options to shoppers in over 100 nations.

Our extremely acknowledged manufacturers embody Tempur-Pedic®, Sealy® and Stearns & Foster® and our widespread non-branded choices include value-focused personal label and OEM merchandise. At Tempur Sealy we perceive the significance of assembly our prospects wherever and nevertheless they wish to store and have developed a strong omni-channel retail technique. Our merchandise enable for complementary merchandising methods and are offered via third-party retailers, our 650+ Firm-owned shops worldwide and our e-commerce channels.  With the vary of our choices and number of buying choices, we’re devoted to persevering with to show our mission to enhance the sleep of extra individuals, each evening, all all over the world right into a actuality.

Importantly, we’re dedicated to finishing up our world accountability to guard the surroundings and the communities wherein we function. As a part of that dedication, we now have established the purpose of attaining carbon neutrality for our world wholly owned operations by 2040.

Investor Relations Contact:

Aubrey Moore
Investor Relations
Tempur Sealy Worldwide, Inc.
800-805-3635
[email protected]

(1) It is a non-GAAP monetary measure. Please check with “Non-GAAP Monetary Measures and Fixed Foreign money Info” under.

Abstract of Channel Gross sales

The next desk highlights web gross sales info, by channel and by enterprise phase, for the three months ended September 30, 2022 and 2021:

TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES

Reconciliation of Non-GAAP Monetary Measures

(in tens of millions, besides percentages, ratios and per widespread share quantities)

The Firm gives info concerning adjusted web earnings, adjusted EPS, adjusted gross revenue, adjusted gross margin, adjusted working earnings (expense), adjusted working margin, EBITDA, adjusted EBITDA, consolidated indebtedness and consolidated indebtedness much less netted money, which aren’t acknowledged phrases beneath GAAP and don’t purport to be alternate options to web earnings, earnings per share, or a substitute for complete debt as a measure of liquidity. The Firm believes these non-GAAP monetary measures present buyers with efficiency measures that higher replicate the Firm’s underlying operations and tendencies, offering a perspective not instantly obvious from web earnings, gross revenue, gross margin, working earnings (expense) and working margin. The changes administration makes to derive the non-GAAP monetary measures embody changes to exclude objects that will trigger short-term fluctuations within the nearest GAAP monetary measure, however which administration doesn’t contemplate to be the elemental attributes or main drivers of the Firm’s enterprise.

The Firm believes that exclusion of these things assists in offering a extra full understanding of the Firm’s underlying outcomes from persevering with operations and tendencies, and administration makes use of these measures together with the corresponding GAAP monetary measures to handle the Firm’s enterprise, to judge its consolidated and enterprise phase efficiency in comparison with prior intervals and {the marketplace}, to determine operational objectives and to supply continuity to buyers for comparability functions. Limitations related to using these non-GAAP monetary measures embody that these measures don’t current all the quantities related to the Firm’s outcomes as decided in accordance with GAAP. These non-GAAP monetary measures must be thought-about supplemental in nature and shouldn’t be construed as extra vital than comparable monetary measures outlined by GAAP. As a result of not all corporations use an identical calculations, these displays is probably not akin to different equally titled measures of different corporations. For extra details about these non-GAAP monetary measures and a reconciliation to the closest GAAP monetary measure, please check with the reconciliations on the next pages.

Fixed Foreign money Info

On this press launch the Firm refers to, and in different press releases and different communications with buyers the Firm could check with, web gross sales, earnings or different historic monetary info on a “fixed forex foundation,” which is a non-GAAP monetary measure. These references to fixed forex don’t embody operational impacts that would outcome from fluctuations in overseas forex charges. To offer info on a continuing forex foundation, the relevant monetary outcomes are adjusted based mostly on a easy mathematical mannequin that interprets present interval ends in native forex utilizing the comparable prior corresponding interval’s forex conversion fee. This strategy is used for nations the place the purposeful forex is the native nation forex. This info is supplied in order that sure monetary outcomes could be considered with out the impression of fluctuations in overseas forex charges, thereby facilitating period-to-period comparisons of enterprise efficiency.

Adjusted Web Revenue and Adjusted EPS

A reconciliation of reported web earnings to adjusted web earnings and the calculation of adjusted EPS is supplied under. Administration believes that using these non-GAAP monetary measures gives buyers with extra helpful info with respect to the impression of assorted changes as described within the footnotes on the finish of this launch.

The next desk units forth the reconciliation of the Firm’s reported web earnings to adjusted web earnings and the calculation of adjusted EPS for the three months ended September 30, 2022 and 2021:

Adjusted Gross Revenue, Adjusted Gross Margin, Adjusted Working Revenue (Expense) and Adjusted Working Margin

A reconciliation of gross revenue and gross margin to adjusted gross revenue and adjusted gross margin, respectively, and working earnings (expense) and working margin to adjusted working earnings (expense) and adjusted working margin, respectively, are supplied under. Administration believes that using these non-GAAP monetary measures gives buyers with extra helpful info with respect to the impression of assorted changes as described within the footnotes on the finish of this launch.

The next desk units forth the reconciliation of the Firm’s reported gross revenue and working earnings (expense) to the calculation of adjusted gross revenue and adjusted working earnings (expense) for the three months ended September 30, 2022.

The next desk units forth the Firm’s reported gross revenue and the reconciliation of the Firm’s working earnings (expense) to the calculation of adjusted working earnings (expense) for the three months ended September 30, 2021. The Firm had no changes to gross revenue for the three months ended September 30, 2021.

EBITDA, Adjusted EBITDA and Consolidated Indebtedness much less Netted Money

The next reconciliations are supplied under:

• Web earnings to EBITDA and adjusted EBITDA
• Ratio of consolidated indebtedness much less netted money to adjusted EBITDA
• Complete debt, web to consolidated indebtedness much less netted money

Administration believes that presenting these non-GAAP measures gives buyers with helpful info with respect to the Firm’s working efficiency, money movement era and comparisons from interval to interval, in addition to common details about the Firm’s leverage.

The Firm’s credit score settlement (the “2019 Credit score Settlement”) gives the definition of adjusted EBITDA. Accordingly, the Firm presents adjusted EBITDA to supply info concerning the Firm’s compliance with necessities beneath the 2019 Credit score Settlement.

The next desk units forth the reconciliation of the Firm’s reported web earnings to the calculations of EBITDA and adjusted EBITDA for the three months ended September 30, 2022 and 2021:

The next desk units forth the reconciliation of the Firm’s web earnings to the calculations of EBITDA and adjusted EBITDA for the trailing twelve months ended September 30, 2022:

Beneath the 2019 Credit score Settlement, the definition of adjusted EBITDA accommodates sure restrictions that restrict changes to web earnings when calculating adjusted EBITDA. For the trailing twelve months ended September 30, 2022, the Firm’s changes to web earnings when calculating adjusted EBITDA didn’t exceed the allowable quantity beneath the 2019 Credit score Settlement.

The ratio of consolidated indebtedness much less netted money to adjusted EBITDA is 2.77 occasions for the trailing twelve months ended September 30, 2022. The 2019 Credit score Settlement requires the Firm to take care of a ratio of consolidated indebtedness much less netted money to adjusted EBITDA of lower than 5.00:1.00 occasions.

The next desk units forth the reconciliation of the Firm’s reported complete debt to the calculation of consolidated indebtedness much less netted money as of September 30, 2022. “Consolidated Indebtedness” and “Netted Money” are phrases used within the 2019 Credit score Settlement for functions of sure monetary covenants.

Footnotes:

SOURCE Tempur Sealy Worldwide, Inc.