Fourth Quarter Sales Up 25% and EPS Up 27% at $0.84; New $250 Million Share Repurchase Program
LEXINGTON, Ky. (Jan. 24, 2012) PRNewswire — Tempur-Pedic International Inc. (NYSE: TPX), the leading manufacturer, marketer and distributor of premium mattresses and pillows worldwide, today announced financial results for the fourth quarter and year ended December 31, 2011. The Company also announced a $250 million share repurchase program and issued financial guidance for 2012.
FOURTH QUARTER FINANCIAL SUMMARY
Earnings per diluted share (EPS) were $0.84 in the fourth quarter of 2011 as compared to EPS of $0.66 per diluted share in the fourth quarter of 2010. The Company reported net income of $56.3 million for the fourth quarter of 2011 as compared to net income of $46.3 million in the fourth quarter of 2010.
Net sales increased 25% to $366.8 million in the fourth quarter of 2011 from $292.7 million in the fourth quarter of 2010. On a constant currency basis, net sales increased 24%. Net sales in the North American segment increased 26% and international segment net sales increased 25%. On a constant currency basis, international segment net sales increased 21%.
Mattress sales increased 26% globally. Mattress sales increased 24% in the North American segment and increased 33% in the international segment. On a constant currency basis, international mattress sales increased 29%. Pillow sales increased 16% globally. Pillow sales increased 15% in North America and 17% internationally. On a constant currency basis, international pillow sales increased 13%.
Gross profit margin was 52.1% as compared to 51.9% in the fourth quarter of 2010. The gross profit margin increased as a result of favorable mix, improved efficiencies in manufacturing and distribution, and fixed cost leverage related to higher production volumes, partially offset by higher commodity costs and costs associated with US shipments to support the Company’s Danish manufacturing facility.
Operating profit margin was 23.4% as compared to 24.5% in the fourth quarter of 2010 reflecting the Company’s strategic investments to drive growth, including brand advertising.
The Company generated $69.7 million of operating cash flow as compared to $44.5 million in the fourth quarter of 2010.
During the fourth quarter of 2011, the Company purchased 2.3 million shares of its common stock for a total cost of $128.5 million.
FULL YEAR FINANCIAL SUMMARY
Earnings per share (EPS) were $3.18 per diluted share for the full year 2011 as compared to EPS of $2.16 per diluted share for the full year 2010. The Company reported net income of $219.6 million for the full year 2011 as compared to net income of $157.1 million for the full year 2010.
Net sales increased 28% to $1,417.9 million for the full year 2011 from $1,105.4 million for the full year 2010. On a constant currency basis, net sales increased 25%. Net sales in the North American segment increased 30% and international segment net sales increased 24%. On a constant currency basis, international segment net sales increased 16%.
Gross profit margin was 52.4% for the full year 2011 as compared to 50.2% for the full year 2010. The gross profit margin increased as a result of favorable mix, improved efficiencies in manufacturing and distribution, and fixed cost leverage related to higher production volumes, partially offset by higher commodity costs, new product introductions, and costs associated with US shipments to support the Company’s Danish manufacturing facility.
Operating profit margin was 24.0% as compared to 22.2% for the full year 2010.
The Company generated $248.7 million of operating cash flow as compared to $184.1 million for the full year 2010.
During 2011, the Company purchased 6.5 million shares of its common stock for a total cost of $368.5 million.
Chief Executive Officer Mark Sarvary commented, “In 2011, we delivered strong financial performance, strengthened our competitiveness and implemented a range of strategic growth initiatives. Over the next year, we plan to increase our rate of investment in areas that will drive growth including a major new product launch, increased advertising, and expanded distribution. In addition, to ensure Tempur continues to deliver the best sleep, our R team is focused on executing a broad technology strategy that includes a focus on improving existing product performance and lowering costs as well as another major new product launch in 2013.”
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