Mattress major Tempur Sealy International, with headquarters in Lexington, Kentucky, reported net income in the first quarter, ended March 31, of $39.6 million, a 69.2% jump, compared with the first quarter of 2015. Total net sales decreased 2.5% to $721 million.
| Briefly | |
| First-quarter results | |
| Net income | $39.6 million |
| Net sales | $721 million |
| Gross margin | 40.4% |
| Operating income | $76.7 million |
| Earnings per share | $0.63 |
Gross margin (under U.S. generally accepted accounting principles) was 40.4%, compared with 38.5% in 2015, and GAAP operating income was $76.7 million, a 41% increase. GAAP earnings per diluted share were $0.63.
Earnings before interest, tax, depreciation and amortization were $102 million, a 34.4% increase compared with the prior-year quarter.
North American net sales decreased 2.4% to $580 million in the first quarter. The company attributed the decline to softness in the overall bedding market and the impact of new product transitions.
International net sales decreased 3% to $141 million; on a constant currency basis, they decreased 5.9%.
“We are very pleased with our results as we grew adjusted EBITDA 15% and adjusted EPS 24%, while increasing direct advertising and marketing investments, and launching new industry leading products worldwide,” said Scott Thompson, chairman and chief executive officer. “Overall, plant operations improved and adjusted operating margin expanded 200 basis points. The team is focused on continuing to improve operations, and we are all striving to achieve our targets.”
The company ended the quarter with consolidated funded debt, less qualified cash, of $1.5 billion. On April 7, it completed the closing of $1.1 billion in senior secured credit facilities, including a $500 million revolving credit facility, a $500 million term-loan facility and $100 million delayed-draw term loan facility.
“We are pleased to announce this refinancing, which lowers our borrowing costs, extends debt maturities, and provides the company with increased flexibility to manage its capital structure, Thompson said.
