LEXINGTON, Ky. (April 19, 2012) — Tempur-Pedic International Inc. (NYSE: TPX), the leading manufacturer, marketer and distributor of premium mattresses and pillows worldwide, today announced financial results for the first quarter ended March 31, 2012. The company also confirmed financial guidance for 2012.
First quarter financial summary
• Earnings per diluted share (EPS) were $0.86 in the first quarter of 2012 as compared to EPS of $0.68 per diluted share in the first quarter of 2011. The company reported net income of $56.2 million for the first quarter of 2012 as compared to net income of $48.3 million in the first quarter of 2011. First quarter net income had a net benefit of $2 million from the resolution of foreign tax matters.
• Net sales increased 18 percent to $384.4 million in the first quarter of 2012 from $325.8 million in the first quarter of 2011. On a constant currency basis, net sales increased 19 percent. Net sales in the North American segment increased 17 percent and international segment net sales increased 19 percent. On a constant currency basis, international segment net sales increased 22 percent.
• Mattress sales increased 18 percent globally. Mattress sales increased 15 percent in the North American segment and increased 26 percent in the international segment. On a constant currency basis, international mattress sales increased 29 percent. Pillow sales increased 20 percent globally. Pillow sales increased 22 percent in North America and 17 percent internationally. On a constant currency basis, international pillow sales increased 19 percent.
• Gross profit margin was 53.6 percent as compared to 52.3 percent in the first quarter of 2011. The gross profit margin increased as a result of improved efficiencies in manufacturing and distribution and fixed cost leverage related to higher production volumes, partially offset by higher new product costs.
• Operating profit margin was 22.4 percent as compared to 23.1 percent in the first quarter of 2011 reflecting the company’s strategic investments to drive growth, including brand advertising.
• Tempu-Pedic generated $44.6 million of operating cash flow as compared to $55.7 million in the first quarter of 2011.
• During the first quarter of 2012, the company purchased 0.2 million shares of its common stock for a total cost of $12 million. As of March 31, 2012, the company had $238 million available under its existing share repurchase authorization.
“In the first quarter we delivered solid financial performance, enhanced our product range with the introduction of TEMPUR-Simplicity and increased our investment in advertising by 37 percent to $47 million. We are excited about the rollout of our new dealer programs beginning in the second quarter,” said Chief Executive Officer Mark Sarvary.
Financial guidance
The company confirmed its full year 2012 guidance for net sales and earnings per share. It expects net sales for 2012 to range from $1.60 billion to $1.65 billion. It expects EPS for 2012 to range from $3.80 to $3.95 per diluted share. The company noted its expectations are based on information available at the time of this release, and are subject to changing conditions, many of which are outside the company’s control. The company noted its EPS guidance does not assume any benefit from a potential further reduction in shares outstanding related to its share repurchase program.
Tempur-Pedic International Inc. manufactures and distributes mattresses and pillows made from its proprietary TEMPUR® pressure-relieving material. The company’s products are currently sold in more than 80 countries. World headquarters for Tempur-Pedic International is in Lexington, Ky.
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