Tempur Sealy(TPX) - 2024 Q4 - Annual Results

Financial Performance - Fourth Quarter 2024 Net Sales increased 3.2% to $1,207.9 million compared to $1,170.5 million in the fourth quarter of 2023[3] - Fourth Quarter 2024 Adjusted EPS increased 13.2% to $0.60 compared to $0.53 in the fourth quarter of 2023[3] - Consolidated net income decreased 6.7% to $71.9 million compared to $77.1 million in the fourth quarter of 2023[10] - Basic earnings per share for Q4 2024 was $0.41, down 8.9% from $0.45 in Q4 2023[24] - For the three months ended December 31, 2024, the adjusted net income was $107.2 million, an increase of 14.0% compared to $93.9 million for the same period in 2023[38] - The adjusted earnings per share (EPS) for Q4 2024 was $0.60, up from $0.53 in Q4 2023, reflecting a growth of 13.2%[38] - For the full year 2024, the adjusted net income reached $455.1 million, representing a 6.9% increase from $425.6 million in 2023[40] - The adjusted EPS for the year ended December 31, 2024, was $2.55, compared to $2.40 in 2023, marking a 6.3% increase[40] Sales and Revenue - International net sales increased 14.1% to $313.8 million, driven by successful new product launches[8] - North America net sales remained consistent at $894.1 million, with a slight decrease of 0.1% compared to the fourth quarter of 2023[7] - Net sales for Q4 2024 reached $1,207.9 million, a 3.2% increase from $1,170.5 million in Q4 2023[24] - For the full year 2024, the net sales totaled $4,930.9 million, an increase from $4,800.0 million in 2023[48] - Net sales for the full year 2023 reached $4,925.4 million, with a gross profit of $2,128.7 million, representing a gross margin of 43.2%[50] Profitability - Gross profit for the year ended December 31, 2024, was $2,180.1 million, reflecting a 2.4% increase from $2,128.7 million in 2023[24] - Operating income for Q4 2024 was $127.6 million, up 4.7% from $121.9 million in Q4 2023[24] - The adjusted gross profit for Q4 2024 was $546.6 million, with an adjusted gross margin of 45.3%, compared to $517.1 million and 44.2% in Q4 2023[43] - The gross profit for the full year 2024 was $2,180.1 million, with a gross margin of 44.2%, compared to $2,000.0 million and 42.5% in 2023[48] - Adjusted gross profit for the year was $2,152.2 million, with an adjusted gross margin of 43.7%[50] - Operating income for the full year was $607.2 million, translating to an operating margin of 12.3%[50] - Adjusted operating income increased to $695.1 million, with an adjusted operating margin of 14.1%[50] Debt and Cash Flow - The Company ended the fourth quarter of 2024 with total debt of $3.8 billion and a leverage ratio of 2.31 times[10] - Cash and cash equivalents rose to $1,709.7 million by the end of 2024, compared to $74.9 million at the end of 2023[28] - Net cash provided by operating activities for the year ended December 31, 2024, was $666.5 million, an increase from $570.3 million in 2023[28] - For the year ended December 31, 2024, adjusted EBITDA was reported at $923.8 million, with total debt net at $3,809.9 million[54] - The ratio of consolidated indebtedness less netted cash to adjusted EBITDA was 2.31 times, well below the 5.00 times limit set by the 2023 Credit Agreement[56] Dividends and Future Projections - The Company announced a 15% increase in quarterly cash dividend to $0.15 per share, marking the fifth increase in recent years[11] - For 2025, the Company expects adjusted EPS between $2.60 to $3.00, representing a 10% increase from the prior year[12] - The Company targets mid single-digit sales growth starting in 2026, with adjusted EPS projected to reach approximately $4.85 by 2028[15] Acquisitions and Costs - The Company completed the acquisition of Mattress Firm on February 5, 2025, positioning itself as the world's largest bedding company[5] - The company incurred transaction costs of $47.8 million for the year ended December 31, 2024, slightly down from $49.0 million in 2023[40] - The company incurred $12.0 million in transaction costs related to the acquisition of Mattress Firm in Q4 2024[60] - Transition charges of $26.7 million were recorded due to a customer's acquisition affecting OEM distribution[60] - Cybersecurity event costs amounted to $14.3 million for the year 2023, with a recovery of $4.9 million from insurance claims in Q4 2024[60] - Operational start-up costs for capacity expansion in the U.S. totaled $3.1 million for the year ended 2024[60]