Tempur Sealy Announces New Long-Term Capital Allocation Strategy
The strong financial results reflect the investments the Company has made in its products, brands, customer service, and manufacturing operations over the last five years. These investments and the Company's omni-channel strategy position
The long-term capital allocation strategy includes the following key components:
- The Company intends to initiate a quarterly cash dividend beginning in early 2021 targeting an annual distribution to its stockholders of approximately 15% of net income. The Company believes the planned dividend will provide an appropriate return to income investors.
- The Board of Directors has increased the existing authorization under the Company's share repurchase program by approximately
$170 millionto $300 million. The Company is targeting the repurchase of at least 3% of shares outstanding annually, subject to market conditions, funded by operating cash flow. Since 2016, the Company has repurchased about 21% of its shares outstanding.
- The Board of Directors has declared a four-for-one stock split, which will be effected in the fourth quarter of 2020 and should make our common shares more accessible to new investors and improve trading liquidity.
The four-for-one stock split will be effected through a stock dividend entitling each shareholder of record on
The Company expects to provide additional details regarding the Company's initiation of a quarterly dividend on the fourth quarter 2020 earnings call in early 2021.
Non-GAAP Financial Measures
For additional information regarding adjusted EBITDA, please refer to the reconciliations and other information included in the Company's
This press release may be deemed to include statements that are "forward-looking" within the meaning of the federal securities laws, which include information concerning one or more of the Company's plans, objectives, goals, strategies, and other information that is not historical information. When used in this release, the words "expects", "intends", "believes", "should", "targets", "will", and variations of such words or similar expressions are intended to identify such statements. Any forward-looking statements contained herein are based upon current expectations and beliefs and various anticipated assumptions. These forward-looking statements include, without limitation, statements relating to the Company's quarterly cash dividend, the expected timing and impact of the stock split, the Company's share repurchase targets, and the Company's beliefs regarding the impact of its enhanced capital allocation strategy. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct.
Numerous factors, many of which are beyond the Company's control, could cause actual results to differ materially from any that may be expressed herein as forward-looking statements. These risk factors include the duration, scope and severity of COVID-19 and its effects on the Company's business and operations, including the disruption or delay of production and delivery of materials and products in the Company's supply chain; uncertainties arising from global events; and general economic, financial and industry conditions, particularly conditions relating to liquidity, financial performance and related credit issues present in the retail sector. Other potential risk factors include the risk factors discussed under the heading "Risk Factors" in Part I, ITEM 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, ITEM 1A of the Company's Quarterly Report on Form 10-Q for the quarter ended
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