Tempur Sealy International announced financial results for the third quarter ended September 30, 2015. Total net sales increased 6.4% to $880 million from $827.4 million in Q3 2014.
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On a constant currency basis, total net sales increased 10.6%, with growth in both the North America and International business segments.
Gross margin under GAAP was 40.9% as compared to 38.5% in the third quarter of 2014. Adjusted gross margin was 41.3% as compared to 38.8% in the third quarter of 2014.
Earnings before interest, tax, depreciation and amortization (EBITDA) increased 14.3% to $121.4 million as compared to $106.2 million for the third quarter of 2014. Adjusted EBITDA increased 19.1% to $142.3 million as compared to $119.5 million for the third quarter of 2014.
GAAP operating income was $110.9 million as compared to $87.1 million in the third quarter of 2014. Operating income included $5.5 million of integration costs, $5.2 million of additional costs related to executive management transition and related retention compensation and $2.4 million of restructuring costs.
Operating income in the third quarter of 2014 included $10.9 million of integration and financing costs. Adjusted operating income was $124.0 million, or 14.1% of net sales, as compared to $98.0 million, or 11.8% of net sales in the third quarter of 2014.
GAAP Earnings per diluted share ("EPS") increased to $0.64 as compared to $0.60 in the third quarter of 2014. Adjusted EPS increased 26.1% to $1.11 as compared to adjusted EPS of $0.88 in the third quarter of 2014. On a constant currency basis, adjusted EPS increased 36.4%.
The Company ended the third quarter of 2015 with consolidated funded debt less qualified cash of $1.4 billion. The ratio of consolidated funded debt less qualified cash to EBITDA, calculated in accordance with the Company's senior secured credit facility, was 3.53 times. In addition, leverage based on the ratio of consolidated funded debt less qualified cash to Adjusted EBITDA was 3.30 times. ■