Mattress major Tempur Sealy International Inc., with headquarters in Lexington, Kentucky, reported a net sales increase for full-year 2015—5.4% to $3.15 billion, compared with 2014.
On a constant-currency basis, total net sales increased 9.4%, with growth in both the North America and international business segments.
For the full year, the company posted net income of $73.5 million, a 32.5% decrease compared with the previous year. Earnings before interest, tax, depreciation and amortization increased 9.4% to $388.9 million, compared with 2014.
Full-year gross margin using generally accepted accounting principles was 39.6%, compared with 38.5% in 2014.
Earnings per share in 2015 were $1.17, a 33% decline compared with 2014 EPS.
In the fourth quarter, Tempur Sealy reported total net sales increased 2.9% to $767.3 million. On a constant-currency basis, total net sales increased 6.7%, with growth in both the North America and international business segments.
The company posted a GAAP net income loss of $11.3 million in the fourth quarter, compared with net income of $46.6 million in the fourth quarter of 2014. The loss partly reflected a balance sheet charge related to an ongoing tax dispute with Denmark.
“As a result of certain events that occurred during the fourth quarter of 2015, the company recorded a change in estimate of its uncertain tax position regarding the previously disclosed Danish tax matter of approximately $60.7 million,” Tempur Sealy said. “The company will continue discussions with both U.S. and Danish tax authorities in an attempt to resolve this matter.”
EBITDA increased 2.8% to $115.1 million, compared with the prior-year quarter.
Gross margin (GAAP) was 40.8%, compared with 39.5% in the fourth quarter of 2014.
Diluted shares (GAAP) posted an $0.18 loss, compared with EPS of $0.75 in the fourth quarter of 2014. Adjusted EPS increased 15.1% to $0.99.
The company’s business segments include North America and international. Corporate operating expenses are not included in either of the business segments.
In the fourth quarter, North America net sales increased 3.8% to $611.6 million. On a constant-currency basis, North America net sales increased 5.3%. GAAP gross margin was 38.7%, as compared to 35.6% in the fourth quarter of 2014.
International net sales decreased 0.4% to $155.7 million, compared with the fourth quarter of 2014. On a constant-currency basis, international net sales increased 12.1%. GAAP gross margin was 49.3%, as compared to 53.8% in the fourth quarter of 2014.
Tempur Sealy also announced a $200 million share repurchase program and issued financial guidance for the full year 2016. It currently expects adjusted EBITDA to range from $500 million to $550 million, which includes approximately $10 million of unfavorable foreign currency impact based on forecasted exchange rates.
“Overall, the worldwide markets for our products feel solid and the team has made progress towards our goals,” said Scott Thompson, Tempur Sealy chair and chief executive officer. “Fourth-quarter adjusted EBITDA growth of 14% in a relatively low octane economic environment is more evidence of the positive attributes of the bedding industry in general and the strength of company’s business model specifically.”
