LEXINGTON, Ky., Feb. 16,
2017 /PRNewswire/ -- Tempur Sealy International, Inc. (NYSE:
TPX) today announced financial results for the fourth quarter
and year ended December 31, 2016. The Company also issued
financial guidance for the full year 2017.
KEY HIGHLIGHTS
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
(in millions,
except
percentages and per common
share amounts)
|
2016
|
|
2015
|
|
%
Change
|
|
% Change
Constant
Currency(1)
|
|
2016
|
|
2015
|
|
%
Change
|
|
% Change
Constant
Currency(1)
|
Net sales
|
$
|
769.5
|
|
|
$
|
767.3
|
|
|
0.3
|
%
|
|
1.7
|
%
|
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
(0.8)
|
%
|
|
0.7
|
%
|
Net income
(loss)
|
63.4
|
|
|
(11.3)
|
|
|
661.1
|
%
|
|
671.7
|
%
|
|
202.1
|
|
|
73.5
|
|
|
175.0
|
%
|
|
184.4
|
%
|
EPS
|
1.12
|
|
|
(0.18)
|
|
|
722.2
|
%
|
|
733.3
|
%
|
|
3.38
|
|
|
1.17
|
|
|
188.9
|
%
|
|
199.1
|
%
|
Adjusted
EPS(1)
|
1.18
|
|
|
0.99
|
|
|
19.2
|
%
|
|
21.2
|
%
|
|
4.05
|
|
|
3.19
|
|
|
27.0
|
%
|
|
30.7
|
%
|
EBITDA(1)
|
130.1
|
|
|
115.1
|
|
|
13.0
|
%
|
|
14.6
|
%
|
|
510.8
|
|
|
388.9
|
|
|
31.3
|
%
|
|
34.1
|
%
|
Adjusted
EBITDA(1)
|
137.9
|
|
|
132.7
|
|
|
3.9
|
%
|
|
5.3
|
%
|
|
521.6
|
|
|
455.8
|
|
|
14.4
|
%
|
|
16.8
|
%
|
FOURTH QUARTER 2016 FINANCIAL SUMMARY
- Total net sales increased 0.3% to $769.5
million from $767.3 million in
the fourth quarter of 2015. On a constant currency
basis(1), total net sales increased 1.7%, with an
increase of 1.9% in the North
America business segment and an increase of 0.9% in the
International business segment.
- Gross margin under U.S. generally accepted accounting
principles ("GAAP") was 41.5% as compared to 40.8% in the fourth
quarter of 2015.
- GAAP net income was $63.4 million
as compared to a net loss of $(11.3)
million for the fourth quarter of 2015. In the fourth
quarter of 2015, the Company recorded a $60.7 million tax charge related to its Danish
tax matter. Adjusted net income(1) increased 6.1% to
$66.5 million as compared to adjusted
net income of $62.7 million in the
fourth quarter of 2015.
- Earnings before interest, tax, depreciation and amortization
("EBITDA")(1) increased 13.0% to $130.1 million as compared to $115.1 million for the fourth quarter of 2015.
Adjusted EBITDA(1) increased 3.9% to a record
$137.9 million as compared to
adjusted EBITDA(1) of $132.7
million in the fourth quarter of 2015.
- GAAP operating income increased 17.1% to $107.5 million, or 14.0% of net sales, as
compared to $91.8 million, or 12.0%
of net sales, in the fourth quarter of 2015. Operating income in
the fourth quarter of 2016 included $8.3
million of restructuring costs and $3.8 million of benefit related to
performance-based stock compensation. Operating income in the
fourth quarter of 2015 included $19.4
million of restructuring costs, executive management
transition, integration and other costs. Adjusted operating
income(1) was $112.0
million, or 14.6% of net sales, as compared to adjusted
operating income of $111.2 million,
or 14.5% of net sales, in the fourth quarter of 2015.
- GAAP earnings per diluted share ("EPS") was $1.12 as compared to a loss of $(0.18) in the fourth quarter of 2015. Adjusted
EPS(1) increased 19.2% to $1.18, as compared to adjusted EPS of
$0.99 in the fourth quarter of
2015.
- During the fourth quarter of 2016, the Company repurchased 3.5
million shares of its common stock for a total cost of $215.3 million. As of December 31, 2016, the Company had approximately
$67 million available under its
existing share repurchase authorization.
- The Company ended the fourth quarter of 2016 with consolidated
funded debt less qualified cash(1) of $1.9 billion. In addition, leverage based on the
ratio of consolidated funded debt less qualified cash to adjusted
EBITDA(1) was 3.60 times, with no significant off
balance sheet liability.
Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "Overall the worldwide
markets for our products are solid and the Team remains focused on
our long-term initiatives. Our fourth quarter adjusted EPS growth
of 19% is evidence of the strength of Company's Brands, and
business model, even against a relatively muted bedding
industry."
(1) This is a non-GAAP financial measure. Please
refer to "Non-GAAP Financial Measures and Constant Currency
Information" below.
FULL YEAR 2016 FINANCIAL SUMMARY
- Total net sales decreased 0.8% to $3,127.3 million from $3,151.2 million in 2015. On a constant currency
basis(1), total net sales increased 0.7%, with growth in
both the North America and
International business segments.
- GAAP gross margin was 41.9% as compared to 39.6% in 2015.
Adjusted gross margin(1) was 41.9% as compared to 40.1%
in 2015.
- GAAP net income was $202.1
million as compared to $73.5
million in 2015. Adjusted net income(1) was
$242.4 million as compared to
$199.9 million in 2015.
- EBITDA(1) increased 31.3% to $510.8 million as compared to $388.9 million in 2015. Adjusted
EBITDA(1) increased 14.4% to a record $521.6 million as compared to $455.8 million in 2015.
- GAAP operating income increased 34.4% to $415.5 million, as compared to $309.1 million in 2015. Adjusted operating
income(1) was $425.0
million, or 13.6% of net sales, as compared to $373.8 million, or 11.9% of net sales, in
2015.
- GAAP EPS was $3.38 as compared to
$1.17 in 2015. Adjusted
EPS(1) increased 27.0% to a record $4.05 as compared to adjusted EPS of $3.19 in 2015. On a constant currency basis,
adjusted EPS increased 30.7%.
- Operating cash flow for the full year 2016 was $165.5 million compared to $234.2 million in 2015.
Fourth Quarter Business Segment Highlights
The Company's business segments include North America and International. Corporate
operating expenses are not included in either of the business
segments and are presented separately as a reconciling item to
consolidated results.
North America net
sales increased 1.9% to $623.4
million from $611.6 million in
the fourth quarter of 2015. On a constant currency
basis(1), North America
net sales increased 1.9%. GAAP gross margin was 39.4% as compared
to 38.7% in the fourth quarter of 2015. GAAP operating margin was
16.5% as compared to 15.5% in the fourth quarter of 2015, driven
primarily by gross margin improvement.
North America adjusted gross
margin(1) improved 60 basis points to 39.5% as compared
to 38.9% in the fourth quarter of 2015. Gross margin improvements
were primarily driven by operational improvements, pricing actions,
and favorable mix, partially offset by product launch costs.
North America adjusted operating
margin(1) declined to 16.7% as compared to 16.8% in the
fourth quarter of 2015 primarily driven by increased product launch
expense.
International net
sales decreased 6.2% to $146.1 million from $155.7
million in the fourth quarter of 2015. On a constant
currency basis(1), International net sales increased
0.9%. GAAP gross margin was 50.6% as compared to 49.3% in the
fourth quarter of 2015. GAAP operating margin was 18.2% as compared
to 17.3% in the fourth quarter 2015, driven primarily by the
increase in gross margin.
International adjusted gross margin(1) increased 150
basis points to 51.3% as compared to 49.8% in the fourth quarter of
2015. The increase in gross margin was primarily driven by
operational improvements and channel mix. International adjusted
operating margin(1) increased to 22.2% as compared to
20.0% in the fourth quarter of 2015, primarily driven by improved
gross margin and lower operating expenses.
Corporate GAAP operating expense decreased 26.2% to
$22.0 million from $29.8 million in the fourth quarter of 2015. In
the fourth quarter of 2016, the Company recorded $1.6 million of restructuring costs and
$3.8 million of benefit related to
performance-based stock compensation. In the fourth quarter of
2015, the Company recorded $6.9
million of additional costs related to executive management
transition, integration, and other costs. Corporate adjusted
operating expense(1) increased 5.7% to $24.2 million as compared to $22.9 million in the fourth quarter of 2015.
(1) This is a non-GAAP financial measure. Please
refer to "Non-GAAP Financial Measures and Constant Currency
Information" below.
Balance Sheet
As of December 31, 2016, the Company reported $65.7 million in cash and cash equivalents and
$1.9 billion in total debt, as
compared to $153.9 million in cash
and cash equivalents and $1.5 billion
in total debt as of December 31,
2015.
Financial Guidance
For the full year 2017, the Company currently expects adjusted
EBITDA(1) to range from $400
million to $450 million, which includes
approximately $15 million of unfavorable commodity
inflation and $12 million of
unfavorable foreign currency impact.
The Company noted its expectations are based on information
available at the time of this release, and are subject to changing
conditions, many of which are outside the Company's control.
The Company also noted that its 2017 outlook for adjusted EBITDA
is a non-GAAP financial measure that excludes or has otherwise been
adjusted for items impacting comparability. The Company
further noted that it is unable to reconcile this forward-looking
non-GAAP financial measure to GAAP net income, its most directly
comparable forward-looking GAAP financial measure, without
unreasonable efforts, because the Company is currently unable to
predict with a reasonable degree of certainty the type and extent
of certain items that would be expected to impact GAAP net income
in 2017 but would not impact adjusted EBITDA. These items that
impact comparability may include restructuring activities, the
impact of the recent termination of contracts with Mattress Firm,
foreign currency exchange rates, income taxes, and other
items. The unavailable information could have a significant
impact on the Company's full year 2017 GAAP financial results.
(1) This is a non-GAAP financial measure. Please
refer to "Non-GAAP Financial Measures and Constant Currency
Information" below.
Conference Call Information
Tempur Sealy International, Inc. will host a live conference
call to discuss financial results today, February 16, 2017 at
8:00 a.m. Eastern Time. The dial-in
number for the conference call is 800-850-2903. The dial-in number
for international callers is 224-357-2399. The call is also being
webcast and can be accessed on the investor relations section of
the Company's website, http://www.tempursealy.com. After the
conference call, a webcast replay will remain available on the
investor relations section of the Company's website for 30
days.
Non-GAAP Financial Measures and Constant Currency
Information
For additional information regarding adjusted net income,
adjusted EPS, adjusted gross profit, adjusted gross margin,
adjusted operating income (expense), adjusted operating margin,
EBITDA, adjusted EBITDA, consolidated funded debt, and consolidated
funded debt less qualified cash (all of which are non-GAAP
financial measures), please refer to the reconciliations and other
information included in the attached schedules. For information on
the methodology used to present information on a constant currency
basis, please refer to "Constant Currency Information" included in
the attached schedules.
Forward-looking Statements
This press release contains "forward-looking statements," within
the meaning of the federal securities laws, which include
information concerning one or more of the Company's plans,
objectives, goals, strategies, and other information that is not
historical information. When used in this release, the words
"estimates," "expects," "guidance," "anticipates," "projects,"
"plans," "proposed," "intends," "believes," and variations of such
words or similar expressions are intended to identify
forward-looking statements. These forward-looking statements
include, without limitation, statements relating to the Company's
expectations regarding adjusted EBITDA for 2017 and performance
generally for 2017 and subsequent periods. All forward-looking
statements are based upon current expectations and beliefs and
various assumptions. There can be no assurance that the Company
will realize these expectations or that these beliefs will prove
correct.
Numerous factors, many of which are beyond the Company's
control, could cause actual results to differ materially from those
expressed as forward-looking statements. These risk factors include
risks associated with the termination of the Company's relationship
with Mattress Firm; risks associated with the Company's capital
structure and debt level; general economic, financial and industry
conditions, particularly in the retail sector, as well as consumer
confidence and the availability of consumer financing; changes in
product and channel mix and the impact on the Company's gross
margin; changes in interest rates; the impact of the macroeconomic
environment in both the U.S. and internationally on the Company's
business segments; uncertainties arising from global events; the
effects of changes in foreign exchange rates on the Company's
reported earnings; consumer acceptance of the Company's products;
industry competition; the efficiency and effectiveness of the
Company's advertising campaigns and other marketing programs; the
Company's ability to increase sales productivity within existing
retail accounts and to further penetrate the Company's retail
channel, including the timing of opening or expanding within large
retail accounts and the timing and success of product launches; the
effects of consolidation of retailers on revenues and costs;
changes in demand for the Company's products by significant
retailer customers; the Company's ability to expand brand
awareness, distribution and new products; the Company's ability to
continuously improve and expand its product line, maintain
efficient, timely and cost-effective production and delivery of its
products, and manage its growth; the effects of strategic
investments on the Company's operations; changes in foreign tax
rates and changes in tax laws generally, including the ability to
utilize tax loss carry forwards; the outcome of various pending tax
audits or other tax, regulatory or investigation proceedings;
changing commodity costs; the effect of future legislative or
regulatory changes; and disruptions to the implementation of the
Company's strategic priorities and business plan caused by abrupt
changes in the Company's senior management team and Board of
Directors.
Other potential risk factors include the risk factors discussed
under the heading "Risk Factors" under ITEM 1A of Part 1 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 2015. There may be other
factors that may cause the Company's actual results to differ
materially from the forward-looking statements. The Company
undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such
statement is made.
About Tempur Sealy International, Inc.
Tempur Sealy International, Inc. (NYSE: TPX) is the world's
largest bedding provider. Tempur Sealy International, Inc.
develops, manufactures and markets mattresses, foundations, pillows
and other products. The Company's brand portfolio includes many
highly recognized brands, including TEMPUR®, Tempur-Pedic®, Sealy®,
Sealy Posturepedic® and Stearns & Foster®. World headquarters
for Tempur Sealy International, Inc. is in Lexington, KY. For more information,
visit http://www.tempursealy.com or call 800-805-3635.
Investor Relations Contact:
Aubrey Moore
Investor Relations
Tempur Sealy International, Inc.
800-805-3635
Investor.relations@tempursealy.com
TEMPUR SEALY
INTERNATIONAL, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Operations
|
(in millions,
except per common share amounts)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
|
|
Year
Ended
|
|
|
|
December
31,
|
|
Chg
%
|
|
December
31,
|
|
Chg
%
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
Net sales
|
$
|
769.5
|
|
|
$
|
767.3
|
|
|
0.3%
|
|
$
|
3,127.3
|
|
|
$
|
3,151.2
|
|
|
(0.8)%
|
Cost of
sales
|
450.1
|
|
|
454.2
|
|
|
|
|
1,817.9
|
|
|
1,902.3
|
|
|
|
Gross
profit
|
319.4
|
|
|
313.1
|
|
|
2.0%
|
|
1,309.4
|
|
|
1,248.9
|
|
|
4.8%
|
Selling and marketing
expenses
|
150.4
|
|
|
150.0
|
|
|
|
|
648.5
|
|
|
648.0
|
|
|
|
General,
administrative and other expenses
|
70.6
|
|
|
79.4
|
|
|
|
|
278.2
|
|
|
322.0
|
|
|
|
Equity income in
earnings of unconsolidated affiliates
|
(4.7)
|
|
|
(3.5)
|
|
|
|
|
(13.3)
|
|
|
(11.9)
|
|
|
|
Royalty income, net
of royalty expense
|
(4.4)
|
|
|
(4.6)
|
|
|
|
|
(19.5)
|
|
|
(18.3)
|
|
|
|
Operating
income
|
107.5
|
|
|
91.8
|
|
|
17.1%
|
|
415.5
|
|
|
309.1
|
|
|
34.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
20.2
|
|
|
22.0
|
|
|
|
|
85.2
|
|
|
96.1
|
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
|
|
47.2
|
|
|
—
|
|
|
|
Other (income)
expense, net
|
(0.2)
|
|
|
0.2
|
|
|
|
|
(0.2)
|
|
|
12.9
|
|
|
|
Total other
expense
|
20.0
|
|
|
22.2
|
|
|
|
|
132.2
|
|
|
109.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
87.5
|
|
|
69.6
|
|
|
25.7%
|
|
283.3
|
|
|
200.1
|
|
|
41.6%
|
Income tax
provision
|
(26.6)
|
|
|
(81.8)
|
|
|
|
|
(86.8)
|
|
|
(125.4)
|
|
|
|
Net income (loss)
before non-controlling interests
|
60.9
|
|
|
(12.2)
|
|
|
599.2%
|
|
196.5
|
|
|
74.7
|
|
|
163.1%
|
Less: Net (loss)
income attributable to non-controlling interests
(1)
|
(2.5)
|
|
|
(0.9)
|
|
|
|
|
(5.6)
|
|
|
1.2
|
|
|
|
Net income (loss)
attributable to Tempur Sealy International, Inc.
|
$
|
63.4
|
|
|
$
|
(11.3)
|
|
|
661.1%
|
|
$
|
202.1
|
|
|
$
|
73.5
|
|
|
175.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.14
|
|
|
$
|
(0.18)
|
|
|
|
|
$
|
3.43
|
|
|
$
|
1.19
|
|
|
|
Diluted
|
$
|
1.12
|
|
|
$
|
(0.18)
|
|
|
722.2%
|
|
$
|
3.38
|
|
|
$
|
1.17
|
|
|
188.9%
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
55.8
|
|
|
62.3
|
|
|
|
|
59.0
|
|
|
61.7
|
|
|
|
Diluted
|
56.5
|
|
|
62.3
|
|
|
|
|
59.8
|
|
|
62.6
|
|
|
|
TEMPUR SEALY INTERNATIONAL, INC. AND
SUBSIDIARIES
|
Consolidated
Balance Sheet
|
(in
millions)
|
|
|
December 31,
2016
|
|
December 31,
2015
|
ASSETS
|
(unaudited)
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
Cash and
cash equivalents
|
$
|
65.7
|
|
|
$
|
153.9
|
|
Accounts
receivable, net
|
345.1
|
|
|
379.4
|
|
Inventories, net
|
196.8
|
|
|
199.2
|
|
Prepaid
expenses and other current assets
|
63.9
|
|
|
76.6
|
|
Total Current
Assets
|
671.5
|
|
|
809.1
|
|
Property, plant and equipment, net
|
422.2
|
|
|
361.7
|
|
Goodwill
|
722.5
|
|
|
709.4
|
|
Other
intangible assets, net
|
678.7
|
|
|
695.4
|
|
Deferred
income taxes
|
22.5
|
|
|
12.2
|
|
Other
non-current assets
|
185.2
|
|
|
67.7
|
|
Total
Assets
|
$
|
2,702.6
|
|
|
$
|
2,655.5
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
219.3
|
|
|
$
|
266.3
|
|
Accrued
expenses and other current liabilities
|
250.1
|
|
|
254.0
|
|
Income
taxes payable
|
5.8
|
|
|
11.2
|
|
Current
portion of long-term debt
|
70.3
|
|
|
181.5
|
|
Total Current
Liabilities
|
545.5
|
|
|
713.0
|
|
Long-term debt, net
|
1,817.8
|
|
|
1,273.3
|
|
Deferred
income taxes
|
174.6
|
|
|
195.4
|
|
Other
non-current liabilities
|
169.3
|
|
|
171.2
|
|
Total
Liabilities
|
2,707.2
|
|
|
2,352.9
|
|
|
|
|
|
Redeemable
non-controlling interest
|
7.6
|
|
|
12.4
|
|
|
|
|
|
Stockholders'
(Deficit) Equity:
|
|
|
|
Common stock, $0.01
par value; 300.0 million shares authorized; 99.2 million shares
issued as of December 31, 2016 and 2015
|
1.0
|
|
|
1.0
|
|
Additional paid in
capital
|
492.8
|
|
|
463.4
|
|
Retained
earnings
|
1,312.4
|
|
|
1,110.3
|
|
Accumulated other
comprehensive loss
|
(121.4)
|
|
|
(110.1)
|
|
Treasury stock at
cost; 44.8 million and 36.8 million shares as of December 31, 2016
and 2015, respectively
|
(1,700.0)
|
|
|
(1,174.4)
|
|
Total stockholders'
(deficit) equity, net of non-controlling interests in
subsidiaries
|
(15.2)
|
|
|
290.2
|
|
Non-controlling
interest in subsidiaries
|
3.0
|
|
|
—
|
|
Total Stockholders'
(Deficit) Equity
|
(12.2)
|
|
|
290.2
|
|
Total Liabilities,
Redeemable Non-Controlling Interest and Stockholders' (Deficit)
Equity
|
$
|
2,702.6
|
|
|
$
|
2,655.5
|
|
TEMPUR SEALY
INTERNATIONAL, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(in
millions)
|
(unaudited)
|
|
|
Year
Ended
|
|
December
31,
|
|
2016
|
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Net income before
non-controlling interest
|
$
|
196.5
|
|
|
$
|
74.7
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
and amortization
|
73.3
|
|
|
71.4
|
|
Amortization
of stock-based compensation
|
16.2
|
|
|
22.5
|
|
Amortization
of deferred financing costs
|
3.5
|
|
|
20.3
|
|
Bad debt
expense
|
4.2
|
|
|
6.9
|
|
Deferred
income taxes
|
(31.1)
|
|
|
(21.3)
|
|
Dividends
received from unconsolidated affiliates
|
10.8
|
|
|
9.1
|
|
Equity income
in earnings of unconsolidated affiliates
|
(13.3)
|
|
|
(11.9)
|
|
Non-cash
interest expense on 8.0% Sealy Notes
|
4.0
|
|
|
6.3
|
|
Loss on
extinguishment of debt
|
47.2
|
|
|
—
|
|
Loss on sale
of assets
|
1.3
|
|
|
1.5
|
|
Foreign
currency adjustments and other
|
(0.5)
|
|
|
5.5
|
|
Changes in
operating assets and liabilities
|
|
|
|
Accounts
receivable
|
17.3
|
|
|
(35.3)
|
|
Inventories
|
1.5
|
|
|
10.7
|
|
Prepaid
expenses and other assets
|
(124.4)
|
|
|
(58.7)
|
|
Accounts
payable
|
(47.8)
|
|
|
46.1
|
|
Accrued
expenses and other
|
3.5
|
|
|
90.3
|
|
Income
taxes
|
3.3
|
|
|
(3.9)
|
|
Net cash provided by
operating activities
|
165.5
|
|
|
234.2
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of
property, plant and equipment
|
(62.4)
|
|
|
(65.9)
|
|
Proceeds from
disposition of business and other
|
—
|
|
|
6.2
|
|
Net cash used in
investing activities
|
(62.4)
|
|
|
(59.7)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Proceeds from
borrowings under long-term debt obligations
|
2,233.3
|
|
|
863.5
|
|
Repayments of
borrowings under long-term debt obligations
|
(1,867.7)
|
|
|
(988.3)
|
|
Proceeds from
exercise of stock options
|
15.7
|
|
|
20.4
|
|
Excess tax benefit
from stock-based compensation
|
7.0
|
|
|
21.8
|
|
Treasury stock
repurchased
|
(535.0)
|
|
|
(1.3)
|
|
Payment of deferred
financing costs
|
(6.9)
|
|
|
(8.0)
|
|
Fees paid to
lenders
|
(7.8)
|
|
|
—
|
|
Call premium on 2020
Senior Notes
|
(23.6)
|
|
|
—
|
|
Proceeds from
purchase of treasury shares by CEO
|
—
|
|
|
5.0
|
|
Other
|
(0.1)
|
|
|
(3.8)
|
|
Net cash used in
financing activities
|
(185.1)
|
|
|
(90.7)
|
|
NET EFFECT OF
EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
(6.2)
|
|
|
7.6
|
|
(Decrease) increase
in cash and cash equivalents
|
(88.2)
|
|
|
91.4
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
153.9
|
|
|
62.5
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
65.7
|
|
|
$
|
153.9
|
|
Summary of Channel Sales
The following table highlights net sales information, by channel
and by business segment, for the three months ended December
31, 2016 and 2015:
|
Three Months Ended
December 31,
|
(in
millions)
|
Consolidated
|
|
North
America
|
|
International
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Retail
(1)
|
$
|
679.6
|
|
|
$
|
694.4
|
|
|
$
|
576.1
|
|
|
$
|
580.1
|
|
|
$
|
103.5
|
|
|
$
|
114.3
|
|
Other
(2)
|
89.9
|
|
|
72.9
|
|
|
47.3
|
|
|
31.5
|
|
|
42.6
|
|
|
41.4
|
|
|
$
|
769.5
|
|
|
$
|
767.3
|
|
|
$
|
623.4
|
|
|
$
|
611.6
|
|
|
$
|
146.1
|
|
|
$
|
155.7
|
|
|
|
(1)
|
The Retail channel
includes furniture and bedding retailers, department stores,
specialty retailers and warehouse clubs.
|
(2)
|
The Other channel
includes direct-to-consumer, third party distributors, hospitality
and healthcare customers.
|
Summary of Product Sales
The following table highlights net sales information, by product
and by business segment, for the three months ended December
31, 2016 and 2015:
|
Three Months Ended
December 31,
|
(in
millions)
|
Consolidated
|
|
North
America
|
|
International
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Bedding
(1)
|
$
|
705.5
|
|
|
$
|
699.1
|
|
|
$
|
589.6
|
|
|
$
|
574.7
|
|
|
$
|
115.9
|
|
|
$
|
124.4
|
|
Other
(2)
|
64.0
|
|
|
68.2
|
|
|
33.8
|
|
|
36.9
|
|
|
30.2
|
|
|
31.3
|
|
|
$
|
769.5
|
|
|
$
|
767.3
|
|
|
$
|
623.4
|
|
|
$
|
611.6
|
|
|
$
|
146.1
|
|
|
$
|
155.7
|
|
|
|
(1)
|
Bedding products
include mattresses, foundations, and adjustable
foundations.
|
(2)
|
Other products
include pillows and various other comfort products.
|
TEMPUR SEALY INTERNATIONAL, INC. AND
SUBSIDIARIES
Reconciliation of Non-GAAP
Measures
(in millions, except percentages, ratios and per
common share amounts)
The Company provides information regarding adjusted net income,
adjusted EPS, adjusted gross profit, adjusted gross margin,
adjusted operating income (expense), adjusted operating margin,
EBITDA, adjusted EBITDA, consolidated funded debt and consolidated
funded debt less qualified cash, which are not recognized terms
under U.S. GAAP and do not purport to be alternatives to net income
and earnings per share as a measure of operating performance or
total debt. The Company believes these non-GAAP measures provide
investors with performance measures that better reflect the
Company's underlying operations and trends, including trends in
changes in margin and operating expenses, providing a perspective
not immediately apparent from net income and operating income. The
adjustments management makes to derive the non-GAAP measures
include adjustments to exclude items that may cause short-term
fluctuations in the nearest GAAP measure, but which management does
not consider to be the fundamental attributes or primary drivers of
its business, including restructuring costs associated with
headcount reductions and store closures, stock compensation
benefits representing changes in estimate to reduce accumulated
performance based stock compensation amortization, costs associated
with the completion of the 2016 Credit Agreement and 2026 Senior
Notes offering in the second quarter of 2016, costs associated with
its 2013 acquisition of Sealy Corporation and its subsidiaries
("Sealy Acquisition") and the exclusion of other costs associated
with the 2015 Annual Meeting (including executive management
transition and retention compensation), legal settlements, and
other costs.
The Company believes that exclusion of these items assists in
providing a more complete understanding of the Company's underlying
results from continuing operations and trends, and management uses
these measures along with the corresponding GAAP financial measures
to manage the Company's business, to evaluate its consolidated and
business segment performance compared to prior periods and the
marketplace, to establish operational goals and management
incentive goals, and to provide continuity to investors for
comparability purposes. Limitations associated with the use of
these non-GAAP measures include that these measures do not present
all of the amounts associated with our results as determined in
accordance with GAAP and these non-GAAP measures should be
considered supplemental in nature and should not be construed as
more significant than comparable measures defined by GAAP. Because
not all companies use identical calculations, these presentations
may not be comparable to other similarly titled measures of other
companies. For more information about these non-GAAP measures and a
reconciliation to the nearest GAAP measure, please refer to the
reconciliations on the following pages.
Constant Currency Information
In this press release the Company refers to, and in other press
releases and other communications with investors the Company may
refer to, net sales or earnings or other historical financial
information on a "constant currency basis," which is a non-GAAP
financial measure. These references to constant currency basis do
not include operational impacts that could result from fluctuations
in foreign currency rates. To provide information on a constant
currency basis, the applicable financial results are adjusted based
on a simple mathematical model that translates current period
results in local currency using the comparable prior corresponding
period's currency conversion rate. This approach is used for
countries where the functional currency is the local country
currency. This information is provided so that certain financial
results can be viewed without the impact of fluctuations in foreign
currency rates, thereby facilitating period-to-period comparisons
of business performance.
Adjusted Net Income and Adjusted EPS
A reconciliation of GAAP net income to adjusted net income and a
calculation of adjusted EPS is provided below. Management believes
that the use of these non-GAAP financial measures provides
investors with additional useful information with respect to the
impact of various adjustments as described in the footnotes at the
end of this release.
The following table sets forth the reconciliation of the
Company's GAAP net income (loss) to adjusted net income and a
calculation of adjusted EPS for the three months
ended December 31, 2016 and 2015:
|
Three Months
Ended
|
(in millions,
except per share amounts)
|
December 31,
2016
|
|
December 31,
2015
|
GAAP net income
(loss)
|
$
|
63.4
|
|
|
$
|
(11.3)
|
|
Integration costs
(1)
|
—
|
|
|
4.3
|
|
Executive management
transition and retention compensation (2)
|
—
|
|
|
3.5
|
|
Pension settlement
(3)
|
—
|
|
|
1.3
|
|
Restructuring costs
(4)
|
8.3
|
|
|
11.1
|
|
Stock compensation
benefit (5)
|
(3.8)
|
|
|
—
|
|
Redemption value
adjustment on redeemable non-controlling interest
(6)
|
—
|
|
|
(1.8)
|
|
Tax adjustments
(7)
|
(1.4)
|
|
|
55.6
|
|
Adjusted net
income
|
$
|
66.5
|
|
|
$
|
62.7
|
|
|
|
|
|
Adjusted earnings per
common share, diluted
|
$
|
1.18
|
|
|
$
|
0.99
|
|
|
|
|
|
Diluted shares
outstanding
|
56.5
|
|
|
63.1
|
|
The following table sets forth the reconciliation of the
Company's GAAP net income to adjusted net income and a calculation
of adjusted EPS for the year ended December 31, 2016 and
2015:
|
Year
Ended
|
(in millions,
except per share amounts)
|
December 31,
2016
|
|
December 31,
2015
|
GAAP net
income
|
$
|
202.1
|
|
|
$
|
73.5
|
|
Integration costs
(1)
|
2.0
|
|
|
28.7
|
|
German legal
settlement (8)
|
—
|
|
|
17.6
|
|
Executive management
transition and retention compensation (2)
|
3.0
|
|
|
16.2
|
|
Restructuring costs
(4)
|
8.3
|
|
|
13.5
|
|
Stock compensation
benefit (5)
|
(3.8)
|
|
|
—
|
|
Interest expense and
financing costs (9)
|
2.1
|
|
|
12.0
|
|
Other income
(10)
|
—
|
|
|
(9.5)
|
|
2015 Annual Meeting
costs (11)
|
—
|
|
|
6.3
|
|
Pension settlement
(3)
|
—
|
|
|
1.3
|
|
Loss on
extinguishment of debt (12)
|
47.2
|
|
|
—
|
|
Tax adjustments
(7)
|
(18.5)
|
|
|
40.3
|
|
Adjusted net
income
|
$
|
242.4
|
|
|
$
|
199.9
|
|
|
|
|
|
Adjusted earnings per
share, diluted
|
$
|
4.05
|
|
|
$
|
3.19
|
|
|
|
|
|
Diluted shares
outstanding
|
59.8
|
|
|
62.6
|
|
Please refer to Footnotes at the end of this release.
Adjusted Gross Profit and Gross Margin and Adjusted Operating
Income (Expense) and Operating Margin
A reconciliation of GAAP gross profit and gross margin to
adjusted gross profit and gross margin, respectively, and GAAP
operating income (expense) and operating margin to adjusted
operating income (expense) and operating margin, respectively, is
provided below. Management believes that the use of these non-GAAP
financial measures provides investors with additional useful
information with respect to the impact of various adjustments as
described in the footnotes at the end of this release.
The following table sets forth the reconciliation of the
Company's reported GAAP gross profit and operating income (expense)
to the calculation of adjusted gross profit and operating income
(expense) for the three months ended December 31, 2016:
|
4Q
16
|
(in millions,
except percentages)
|
Consolidated
|
|
Margin
|
|
North
America (13)
|
|
Margin
|
|
International (14)
|
|
Margin
|
|
Corporate (15)
|
Net sales
|
$
|
769.5
|
|
|
|
|
$
|
623.4
|
|
|
|
|
$
|
146.1
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
319.4
|
|
|
41.5
|
%
|
|
$
|
245.5
|
|
|
39.4
|
%
|
|
$
|
73.9
|
|
|
50.6
|
%
|
|
$
|
—
|
|
Adjustments
|
1.8
|
|
|
|
|
0.8
|
|
|
|
|
1.0
|
|
|
|
|
—
|
|
Adjusted gross
profit
|
$
|
321.2
|
|
|
41.7
|
%
|
|
$
|
246.3
|
|
|
39.5
|
%
|
|
$
|
74.9
|
|
|
51.3
|
%
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(expense)
|
$
|
107.5
|
|
|
14.0
|
%
|
|
$
|
102.9
|
|
|
16.5
|
%
|
|
$
|
26.6
|
|
|
18.2
|
%
|
|
$
|
(22.0)
|
|
Adjustments
|
4.5
|
|
|
|
|
0.9
|
|
|
|
|
5.8
|
|
|
|
|
(2.2)
|
|
Adjusted operating
income (expense)
|
$
|
112.0
|
|
|
14.6
|
%
|
|
$
|
103.8
|
|
|
16.7
|
%
|
|
$
|
32.4
|
|
|
22.2
|
%
|
|
$
|
(24.2)
|
|
The following table sets forth the reconciliation of the
Company's reported GAAP gross profit and operating income (expense)
to the calculation of adjusted gross profit and operating income
(expense) for the three months ended December 31, 2015:
|
4Q
15
|
(in millions,
except percentages)
|
Consolidated
|
|
Margin
|
|
North
America (16)
|
|
Margin
|
|
International (17)
|
|
Margin
|
|
Corporate (18)
|
Net sales
|
$
|
767.3
|
|
|
|
|
$
|
611.6
|
|
|
|
|
$
|
155.7
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
313.1
|
|
|
40.8
|
%
|
|
$
|
236.4
|
|
|
38.7
|
%
|
|
$
|
76.7
|
|
|
49.3
|
%
|
|
$
|
—
|
|
Adjustments
|
2.1
|
|
|
|
|
1.3
|
|
|
|
|
0.8
|
|
|
|
|
—
|
|
Adjusted gross
profit
|
$
|
315.2
|
|
|
41.1
|
%
|
|
$
|
237.7
|
|
|
38.9
|
%
|
|
$
|
77.5
|
|
|
49.8
|
%
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(expense)
|
$
|
91.8
|
|
|
12.0
|
%
|
|
$
|
94.7
|
|
|
15.5
|
%
|
|
$
|
26.9
|
|
|
17.3
|
%
|
|
$
|
(29.8)
|
|
Adjustments
|
19.4
|
|
|
|
|
8.3
|
|
|
|
|
4.2
|
|
|
|
|
6.9
|
|
Adjusted operating
income (expense)
|
$
|
111.2
|
|
|
14.5
|
%
|
|
$
|
103.0
|
|
|
16.8
|
%
|
|
$
|
31.1
|
|
|
20.0
|
%
|
|
$
|
(22.9)
|
|
Please refer to Footnotes at the end of this release.
The following table sets forth the reconciliation of the
Company's reported GAAP gross profit and operating income (expense)
to the calculation of adjusted gross profit and operating income
(expense) for the year ended December 31, 2016:
|
FULL YEAR
2016
|
(in millions,
except percentages)
|
Consolidated
|
|
Margin
|
|
North
America
(19)
|
|
Margin
|
|
International
(14)
|
|
Margin
|
|
Corporate
(20)
|
Net sales
|
$
|
3,127.3
|
|
|
|
|
$
|
2,570.1
|
|
|
|
|
$
|
557.2
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
1,309.4
|
|
|
41.9
|
%
|
|
$
|
1,017.4
|
|
|
39.6
|
%
|
|
$
|
292.0
|
|
|
52.4
|
%
|
|
$
|
—
|
|
Adjustments
|
2.1
|
|
|
|
|
1.0
|
|
|
|
|
1.1
|
|
|
|
|
—
|
|
Adjusted gross
profit
|
$
|
1,311.5
|
|
|
41.9
|
%
|
|
$
|
1,018.4
|
|
|
39.6
|
%
|
|
$
|
293.1
|
|
|
52.6
|
%
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(expense)
|
$
|
415.5
|
|
|
13.3
|
%
|
|
$
|
411.8
|
|
|
16.0
|
%
|
|
$
|
102.7
|
|
|
18.4
|
%
|
|
$
|
(99.0)
|
|
Adjustments
|
9.5
|
|
|
|
|
1.6
|
|
|
|
|
5.8
|
|
|
|
|
2.1
|
|
Adjusted operating
income (expense)
|
$
|
425.0
|
|
|
13.6
|
%
|
|
$
|
413.4
|
|
|
16.1
|
%
|
|
$
|
108.5
|
|
|
19.5
|
%
|
|
$
|
(96.9)
|
|
The following table sets forth the reconciliation of the
Company's reported GAAP gross profit and operating income (expense)
to the calculation of adjusted gross profit and operating income
(expense) for the year ended December 31, 2015:
|
FULL YEAR
2015
|
(in millions,
except percentages)
|
Consolidated
|
|
Margin
|
|
North
America
(21)
|
|
Margin
|
|
International
(22)
|
|
Margin
|
|
Corporate
(23)
|
Net sales
|
$
|
3,151.2
|
|
|
|
|
$
|
2,577.2
|
|
|
|
|
$
|
574.0
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
$
|
1,248.9
|
|
|
39.6
|
%
|
|
$
|
954.6
|
|
|
37.0
|
%
|
|
$
|
294.3
|
|
|
51.3
|
%
|
|
$
|
—
|
|
Adjustments
|
15.4
|
|
|
|
|
12.6
|
|
|
|
|
2.8
|
|
|
|
|
—
|
|
Adjusted gross
profit
|
$
|
1,264.3
|
|
|
40.1
|
%
|
|
$
|
967.2
|
|
|
37.5
|
%
|
|
$
|
297.1
|
|
|
51.8
|
%
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(expense)
|
$
|
309.1
|
|
|
9.8
|
%
|
|
$
|
335.6
|
|
|
13.0
|
%
|
|
$
|
98.9
|
|
|
17.2
|
%
|
|
$
|
(125.4)
|
|
Adjustments
|
64.7
|
|
|
|
|
25.5
|
|
|
|
|
8.8
|
|
|
|
|
30.4
|
|
Adjusted operating
income (expense)
|
$
|
373.8
|
|
|
11.9
|
%
|
|
$
|
361.1
|
|
|
14.0
|
%
|
|
$
|
107.7
|
|
|
18.8
|
%
|
|
$
|
(95.0)
|
|
EBITDA, Adjusted EBITDA and Consolidated funded debt less
qualified cash
The following reconciliations are provided below:
- GAAP net income to EBITDA and adjusted EBITDA
- Total debt to consolidated funded debt less qualified cash
- Ratio of consolidated funded debt less qualified cash to
adjusted EBITDA
Management believes that presenting these non-GAAP measures
provides investors with useful information with respect to the
Company's operating performance and comparisons from period to
period, as well as general information about the Company's progress
in reducing its leverage.
Please refer to Footnotes at the end of this release.
The following table sets forth the reconciliation of the
Company's reported GAAP net income (loss) to the calculations of
EBITDA and adjusted EBITDA for the three months
ended December 31, 2016 and 2015:
|
Three Months
Ended
|
(in
millions)
|
December 31,
2016
|
|
December 31,
2015
|
GAAP net income
(loss)
|
$
|
63.4
|
|
|
$
|
(11.3)
|
|
Interest
expense
|
20.2
|
|
|
22.0
|
|
Income
taxes
|
26.6
|
|
|
81.8
|
|
Depreciation and
amortization
|
19.9
|
|
|
22.6
|
|
EBITDA
|
$
|
130.1
|
|
|
$
|
115.1
|
|
Adjustments:
|
|
|
|
Integration costs
(1)
|
—
|
|
|
4.3
|
|
Executive management
transition and retention compensation (2)
|
—
|
|
|
3.4
|
|
Pension settlement
(3)
|
—
|
|
|
1.3
|
|
Restructuring costs
(4)
|
7.8
|
|
|
9.7
|
|
Redemption value
adjustment on redeemable non-controlling interest, net of tax
(6)
|
—
|
|
|
(1.1)
|
|
Adjusted
EBITDA
|
$
|
137.9
|
|
|
$
|
132.7
|
|
The following table sets forth the reconciliation of the
Company's net income to the calculations of EBITDA and adjusted
EBITDA for the year ended December 31, 2016 and 2015:
|
|
Year
Ended
|
(in
millions)
|
|
December 31,
2016
|
|
December 31,
2015
|
GAAP net
income
|
|
$
|
202.1
|
|
|
$
|
73.5
|
|
Interest
expense
|
|
85.2
|
|
|
96.1
|
|
Loss on
extinguishment of debt
|
|
47.2
|
|
|
—
|
|
Income
taxes
|
|
86.8
|
|
|
125.4
|
|
Depreciation and
amortization
|
|
89.5
|
|
|
93.9
|
|
EBITDA
|
|
$
|
510.8
|
|
|
$
|
388.9
|
|
Adjustments:
|
|
|
|
|
Restructuring costs
(4)
|
|
7.8
|
|
|
11.9
|
|
Integration costs
(1)
|
|
2.0
|
|
|
28.6
|
|
Executive management
transition and retention compensation (2)
|
|
1.0
|
|
|
10.7
|
|
Pension settlement
(3)
|
|
—
|
|
|
1.3
|
|
Other income
(10)
|
|
—
|
|
|
(9.5)
|
|
German legal
settlement (8)
|
|
—
|
|
|
17.6
|
|
2015 Annual Meeting
costs (11)
|
|
—
|
|
|
6.3
|
|
Adjusted
EBITDA
|
|
$
|
521.6
|
|
|
$
|
455.8
|
|
|
|
|
|
|
Consolidated funded
debt less qualified cash
|
|
$
|
1,879.5
|
|
|
$
|
1,358.3
|
|
|
|
|
|
|
Ratio of consolidated
funded debt less qualified cash to Adjusted EBITDA
|
|
3.60 times
|
|
|
2.98 times
|
|
Under the Company's 2016 Credit Agreement, adjusted EBITDA
contains certain restrictions that limit adjustments to GAAP net
income when calculating adjusted EBITDA. For the twelve months
ended December 31, 2016 and 2015, the
Company's adjustments to GAAP net income when calculating adjusted
EBITDA did not exceed the allowable amount under the 2016 Credit
Agreement.
The ratio of adjusted EBITDA under the Company's 2016 Credit
Agreement to consolidated funded debt less qualified cash is 3.60
times for the trailing twelve months ending December 31, 2016. The Company's current senior
credit facility (the "2016 Credit Agreement") requires the Company
to maintain a ratio of consolidated funded debt less qualified cash
to Adjusted EBITDA of less than 5.00:1.00 times.
Please refer to Footnotes at the end of this release.
The following table sets forth the reconciliation of the
Company's reported total debt to the calculation of consolidated
funded debt less qualified cash as of December 31, 2016 and
2015. "Consolidated funded debt" and "qualified cash" are terms
used in the Company's 2016 Credit Agreement and the Company's prior
senior credit facility (the "2012 Credit Agreement") for purposes
of certain financial covenants.
(in
millions)
|
December 31,
2016
|
|
December 31,
2015
|
Total debt,
net
|
$
|
1,888.1
|
|
|
$
|
1,454.8
|
|
Plus: Deferred
financing costs (24)
|
12.9
|
|
|
24.8
|
|
Total debt
|
1,901.0
|
|
|
1,479.6
|
|
Plus: Letters of
credit outstanding
|
23.0
|
|
|
19.8
|
|
Consolidated funded
debt
|
$
|
1,924.0
|
|
|
$
|
1,499.4
|
|
Less:
|
|
|
|
Domestic qualified
cash (25)
|
12.7
|
|
|
121.8
|
|
Foreign qualified
cash (25)
|
31.8
|
|
|
19.3
|
|
Consolidated funded
debt less qualified cash
|
$
|
1,879.5
|
|
|
$
|
1,358.3
|
|
Footnotes:
(1)
|
Integration costs
represents costs, including legal fees, professional fees,
compensation costs and other charges related to the transition of
manufacturing facilities, and other costs related to the continued
alignment of the North America business segment related to the
Sealy Acquisition.
|
(2)
|
Executive management
transition and retention compensation represents certain costs
associated with the transition of certain of the Company's
executive officers following the 2015 Annual Meeting.
|
(3)
|
Pension settlement
represents pension expense recorded in conjunction with a
settlement offered to terminated, vested participants in a defined
benefit pension plan.
|
(4)
|
Restructuring costs
represents costs associated with headcount reduction and store
closures.
|
(5)
|
Stock compensation
benefit represents the fourth quarter change in estimate to reduce
accumulated performance based stock compensation amortization to
actual cost based on financial results for the year ended December
31, 2016.
|
(6)
|
As of December 31,
2015, the redemption value exceeded the accumulated earnings of the
Company's redeemable non-controlling interest in Comfort
Revolution, LLC. The redemption value adjustment on redeemable
non-controlling interest represents a $1.1 million adjustment, net
of tax, to decrease the carrying value of the Company's redeemable
non-controlling interest in Comfort Revolution LLC.
|
(7)
|
Tax adjustments
represents adjustments associated with the aforementioned items and
other discrete income tax events.
|
(8)
|
German legal
settlement represents the previously announced €15.5 million ($17.6
million) settlement the Company reached in 2015 with the German
Foreign Cartel Office ("FCO") to fully resolve the FCO's antitrust
investigation, and related legal fees.
|
(9)
|
Interest expense and
financing costs in 2015 represents non-cash interest costs related
to the accelerated amortization of deferred financing costs
associated with the $493.8 million voluntary prepayment of the
Company's term loans, subsequent to the issuance by the Company of
$450 million aggregate principal amount of 5.625% senior notes due
2023. Interest expense in 2016 represents incremental interest
incurred upon the senior notes due 2026 sold in the second quarter
of 2016 and the senior notes due 2020, which were repaid with the
proceeds of the new senior notes due 2026.
|
(10)
|
Other income includes
income from a partial settlement of a legal dispute.
|
(11)
|
2015 Annual Meeting
costs represent additional costs related to the Company's 2015
Annual Meeting and related issues.
|
(12)
|
Loss on
extinguishment of debt represents costs associated with the
completion of a new credit facility and senior notes offering in
the second quarter of 2016.
|
(13)
|
Adjustments for the
North America business segment represents restructuring costs
primarily related to the early termination of certain leased
facilities.
|
(14)
|
Adjustments for the
International business segment represents restructuring costs
related to headcount reduction and store closures.
|
(15)
|
Adjustments for
Corporate are primarily related to stock compensation benefit,
which represents the reduction of performance based stock
compensation amortization based on financial results for the year
ended December 31, 2016. This benefit is offset by restructuring
costs related to headcount reductions.
|
(16)
|
Adjustments for the
North America business segment represents integration costs, which
include compensation costs, professional fees and other charges
related to the transition of manufacturing facilities and
distribution network, and other costs to support the continued
alignment of the North America business segment related to the
Sealy Acquisition, certain restructuring costs, pension settlement
costs as well as executive management retention compensation
incurred in connection with executive management
transition.
|
(17)
|
Adjustments for the
International business segment represents certain restructuring
costs as well as executive management retention compensation
incurred in connection with executive management
transition.
|
(18)
|
Adjustments for
Corporate represents integration costs which include legal fees,
professional fees and other charges to align the business related
to the Sealy Acquisition, certain restructuring costs as well as
executive management transition expense and related retention
compensation.
|
(19)
|
Adjustments for the
North America business segment represents integration costs, which
include professional fees, compensation costs and other charges
related to the transition of manufacturing facilities, and other
costs to support the continued alignment of the North America
business related to the Sealy Acquisition. In addition,
restructuring costs were incurred for the early termination of
certain leased facilities.
|
(20)
|
Adjustments for
Corporate represents executive management transition and retention
costs, integration costs which include professional fees and other
charges to align the business related to the Sealy Acquisition, and
restructuring costs related to headcount reductions . In
addition, the Company recognized a stock compensation benefit,
which represents the reduction of performance based stock
compensation amortization based on financial results for the year
ended December 31, 2016.
|
(21)
|
Adjustments for the
North America business segment represent integration costs, which
include professional fees, compensation costs and other charges
related to the transition of manufacturing facilities, and other
costs to support the continued alignment of the North America
business related to the Sealy Acquisition, certain restructuring
costs, pension settlement costs, as well as executive management
transition and retention costs.
|
(22)
|
Adjustments for the
International business segment represent certain restructuring
costs, as well as executive management transition and retention
costs.
|
(23)
|
Adjustments for
Corporate represent executive management transition and retention
costs, integration costs which include professional fees and other
charges to align the business related to the Sealy Acquisition,
certain restructuring costs, as well as executive management
transition and retention costs.
|
(24)
|
The Company presents
deferred financing costs as a direct reduction from the carrying
amount of the related debt in the Consolidated Balance Sheets. For
purposes of determining total debt for financial covenants, the
Company has added these costs back to total debt, net as calculated
per the Consolidated Balance Sheet.
|
(25)
|
Qualified cash as
defined in the 2016 Credit Agreement and 2012 Credit Agreement
equals 100.0% of unrestricted domestic cash plus 60.0% of
unrestricted foreign cash. For purposes of calculating leverage
ratios, qualified cash is capped at $150.0 million.
|
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visit:http://www.prnewswire.com/news-releases/tempur-sealy-reports-record-fourth-quarter-and-full-year-2016-results-300408514.html
SOURCE Tempur Sealy International, Inc.