Tempur Sealy International Inc. (NYSE:TPX) Q4 2014 Earnings Conference Call - Final Transcript

Feb 05, 2015 • 05:00 pm ET


Tempur Sealy International Inc. (NYSE:TPX) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen and welcome to the Tempur Sealy Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder today's conference call is being recorded.

I would now like to turn the conference over to Mr. Mark Rupe. Sir, you may begin.

Mark Rupe

Thanks, Candice and good evening, everyone. Thank you for participating in today's call. Joining me in our Lexington headquarters are Mark Sarvary, President and CEO; and Dale Williams, EVP and CFO. After our prepared remarks, we will open the call for Q&A.

(Forward-looking cautionary statements)

And as a reminder we are hosting an Investor Day in New York City on February 18th. The event will begin at 10 AM and will include presentations from our CEO, Mark Sarvary, our COO Tim Yaggi as well as our President of International David Montgomery and our CFO, Dale Williams. If you are interested in attending please send an email to investor.relations@tempursealy.com. Attendance must be confirmed in advance.

With that introduction, I will turn the call over to Mark Sarvary.

Mark Sarvary

Thanks Mark. Good evening, everyone and thanks for joining us. Today I'll provide a brief overview of our performance in the fourth quarter and full year and we'll then discuss our plans and outlook for 2015 and beyond. Dale will then provide details on the fourth quarter and full year financial results and 2015 guidance. We ended the year with a solid fourth quarter performance. In the US, both Tempur and Sealy sales grew double digit and all five of our US brands grew in this period, a testament to the complementary nature of our portfolio. The success of our new products and effective marketing investments were the key drivers of growth.

Sales outside of the US were strong in Asia Pacific and Latin America. The strengthening of the US dollar turned sales increases in Europe and Canada to declines when translated and also impacted earnings to a greater extent in the quarter than we had forecast. In total, our net sales increased 9.9% and adjusted EPS increased 30%. On a normalized basis correcting for currency, sales would have increased approximately 12.8% and adjusted EPS would have increased approximately 39%.

Looking in 2014 as a whole, this was a year in which a lot was accomplished. We launched a record number of new products in the first half of 2014 and the rollout execution went quite well. Furthermore these new products were very successful. Consumers and retailers unlike responded very positively to them and to our marketing programs. This drove considerable growth of Stearns & Foster and Sealy and returned Tempur Pedic to growth, which led to US market share gains for the Tempur Sealy portfolio as a whole. In addition we gained share in several key international markets including Argentina, Japan and the UK.

We also positioned ourselves for future growth. In 2014, we acquired