Mattress major Tempur Sealy International Inc. reported net income for full-year 2016 was $202.1 million, a 175% increase compared with 2015.
Using generally accepted accounting principles, total net sales decreased slightly, by 0.8%, to $3.1 billion. On a constant currency basis, total net sales increased 0.7%, with growth in both the North American and international business segments, the Lexington, Kentucky-based company said.
Earnings before interest, tax, depreciation and amortization set a new record for the company, increasing 31.3% to $510.8 million, compared with the prior year.
Earnings per share for 2016 were $3.38, compared with $1.17 in 2015.
Full-year GAAP gross margin widened to 41.9%, compared with 39.6% in 2015. GAAP operating income grew 34.4% to $415.5 million. Adjusted operating income was $425 million, or 13.6% of net sales, compared with 11.9% of net sales in the prior year.
“Overall the worldwide markets for our products are solid, and the team remains focused on our long-term initiatives,” said Scott Thompson, Tempur Sealy chair and chief executive officer. “Our fourth-quarter adjusted EPS growth of 19% is evidence of the strength of the company’s brands and business model, even against a relatively muted bedding industry.”
In the fourth quarter, ended Dec. 31, the mattress maker beat Wall Street analysts’ expectations on earnings and revenue.
Adjusted net income grew 6.1% to $66.5 million on revenues that edged up 0.3% to $769.5 million, compared with the prior-year period.
GAAP net income was $63.4 million, compared with a net loss of $11.3 million in the prior-year quarter. The company’s fourth-quarter 2015 earnings were impacted by a $60.7 million tax charge related to a Danish tax matter.
GAAP gross margin for the quarter widened slightly to 41.5%, compared with 40.8% in the previous year.
Fourth-quarter EBITDA increased 13% to $130.1 million, a new record for the company.
GAAP operating income grew 17.1% to $107.5 million, or 14 % of net sales. It included $8.3 million of restructuring costs and $3.8 million related to performance-based stock compensation. Operating income in the prior-year quarter included $19.4 million in restructuring costs, executive management transition, integration and other costs.
GAAP earnings per diluted share were $1.12, compared with a loss of $0.18 in the fourth quarter of 2015. Adjusted EPS increased 19.2% to $1.18, compared with $0.99 in the fourth quarter of 2015.
Segment results for the fourth quarter included a 1.9% rise in North America net sales to $623.4 million, and a drop in international segment net sales of 6.2% to $146.1 million. On a constant currency basis, international net sales increased 0.9%.
Tempur Sealy repurchased 3.5 million shares of its common stock in the fourth quarter at a cost of $215.3 million. With $67 million left in its share buyback program at the end of the quarter, Tempur Sealy added $200 million to the program Feb. 13. Since 2016, Tempur Sealy has repurchased approximately 9.4 million shares at a cost of $573 million.
