From Home Furnishing Business
Tempur Sealy Sales up 12.5% in Q3
GAAP net income in the third quarter was $37.1 million, down from $40.2 million a year ago; and adjusted third-quarter net income of $54.8 million for the third quarter of 2014 was up 22 percent. The 2014 results reflect a discrete tax item associated with the repatriation of foreign earnings. The 2014 and 2013 results reflect integration and transaction costs, and certain non-recurring interest expense and financing costs.
The gross profit margin decreased primarily as a result of lower Sealy and Tempur International gross profit margins, offset partially by an increase in Tempur North America's gross profit margin.
"Overall we are pleased with our third quarter performance," said Tempur Sealy CEO Mark Sarvary. "We executed well on our strategic initiatives which led to better than expected sales and a solid increase in earnings. Tempur North America in particular performed very well, achieving record quarterly sales and a significant improvement in operating margin. Both Sealy and Tempur International sales grew well, but their margins were below plan and constrained our overall profitability. In addition, our year-to-date operating cash flow of $181 million has allowed us to significantly reduce our total debt."
Tempur North America net sales increased 15.8 percent to $280.6 million in the third quarter of 2014. Tempur International net sales rose 10.9 percent to $114.5 million.
Sealy net sales increased 10.9 percent to $432.3 million in the third quarter.
Looking ahead, Tempur Sealy gave the following guidance:
* Net sales to range from $2.97 billion to $3 billion.
* Adjusted EBITDA to range from $405 million to $415 million.
* Adjusted EPS to range from $2.60 to $2.70 per diluted share.