tpx-202109300001206264December 312021Q3falsehttp://fasb.org/us-gaap/2021-01-31#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2021-01-31#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#LongTermDebtAndCapitalLeaseObligationsCurrenthttp://fasb.org/us-gaap/2021-01-31#LongTermDebtAndCapitalLeaseObligationsCurrenthttp://fasb.org/us-gaap/2021-01-31#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2021-01-31#LongTermDebtAndCapitalLeaseObligations00012062642021-01-012021-09-30xbrli:shares00012062642021-10-28iso4217:USD00012062642021-07-012021-09-3000012062642020-07-012020-09-3000012062642020-01-012020-09-30iso4217:USDxbrli:shares00012062642021-09-3000012062642020-12-3100012062642021-06-300001206264us-gaap:CommonStockMember2021-06-300001206264us-gaap:TreasuryStockMember2021-06-300001206264us-gaap:AdditionalPaidInCapitalMember2021-06-300001206264us-gaap:RetainedEarningsMember2021-06-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001206264us-gaap:RetainedEarningsMember2021-07-012021-09-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001206264us-gaap:TreasuryStockMember2021-07-012021-09-300001206264us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001206264us-gaap:CommonStockMember2021-09-300001206264us-gaap:TreasuryStockMember2021-09-300001206264us-gaap:AdditionalPaidInCapitalMember2021-09-300001206264us-gaap:RetainedEarningsMember2021-09-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000012062642020-06-300001206264us-gaap:CommonStockMember2020-06-300001206264us-gaap:TreasuryStockMember2020-06-300001206264us-gaap:AdditionalPaidInCapitalMember2020-06-300001206264us-gaap:RetainedEarningsMember2020-06-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001206264us-gaap:NoncontrollingInterestMember2020-06-300001206264us-gaap:RetainedEarningsMember2020-07-012020-09-300001206264us-gaap:NoncontrollingInterestMember2020-07-012020-09-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001206264us-gaap:TreasuryStockMember2020-07-012020-09-300001206264us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-3000012062642020-09-300001206264us-gaap:CommonStockMember2020-09-300001206264us-gaap:TreasuryStockMember2020-09-300001206264us-gaap:AdditionalPaidInCapitalMember2020-09-300001206264us-gaap:RetainedEarningsMember2020-09-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001206264us-gaap:NoncontrollingInterestMember2020-09-300001206264us-gaap:CommonStockMember2020-12-310001206264us-gaap:TreasuryStockMember2020-12-310001206264us-gaap:AdditionalPaidInCapitalMember2020-12-310001206264us-gaap:RetainedEarningsMember2020-12-310001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001206264us-gaap:NoncontrollingInterestMember2020-12-310001206264us-gaap:RetainedEarningsMember2021-01-012021-09-300001206264us-gaap:NoncontrollingInterestMember2021-01-012021-09-300001206264us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300001206264us-gaap:TreasuryStockMember2021-01-012021-09-300001206264us-gaap:NoncontrollingInterestMember2021-09-3000012062642019-12-310001206264us-gaap:CommonStockMember2019-12-310001206264us-gaap:TreasuryStockMember2019-12-310001206264us-gaap:AdditionalPaidInCapitalMember2019-12-310001206264us-gaap:RetainedEarningsMember2019-12-310001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001206264us-gaap:NoncontrollingInterestMember2019-12-310001206264us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001206264us-gaap:AccumulatedOtherComprehensiveIncomeMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001206264srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001206264us-gaap:RetainedEarningsMember2020-01-012020-09-300001206264us-gaap:NoncontrollingInterestMember2020-01-012020-09-300001206264us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300001206264us-gaap:TreasuryStockMember2020-01-012020-09-300001206264us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-30tpx:channelxbrli:pure0001206264us-gaap:SalesReturnsAndAllowancesMember2020-12-310001206264us-gaap:SalesReturnsAndAllowancesMember2021-01-012021-09-300001206264us-gaap:SalesReturnsAndAllowancesMember2021-09-300001206264tpx:AccruedExpensesAndOtherCurrentLiabilitiesMember2021-09-300001206264tpx:AccruedExpensesAndOtherCurrentLiabilitiesMember2020-12-310001206264us-gaap:OtherNoncurrentLiabilitiesMember2021-09-300001206264us-gaap:OtherNoncurrentLiabilitiesMember2020-12-310001206264tpx:NorthAmericaSegmentMembertpx:MattressesMembersrt:MinimumMember2021-01-012021-09-300001206264srt:MaximumMembertpx:NorthAmericaSegmentMembertpx:MattressesMember2021-01-012021-09-300001206264tpx:NonproratedMembertpx:NorthAmericaSegmentMembertpx:MattressesMembersrt:MinimumMember2021-01-012021-09-300001206264srt:MaximumMembertpx:NonproratedMembertpx:NorthAmericaSegmentMembertpx:MattressesMember2021-01-012021-09-300001206264tpx:MattressesMembersrt:MinimumMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264srt:MaximumMembertpx:MattressesMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264tpx:NonproratedMembertpx:MattressesMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264tpx:MattressesMembertpx:ProratedMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264tpx:NorthAmericaSegmentMembertpx:PillowsTwoMember2021-01-012021-09-300001206264us-gaap:WarrantyReservesMember2020-12-310001206264us-gaap:WarrantyReservesMember2021-01-012021-09-300001206264us-gaap:WarrantyReservesMember2021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:WholesaleMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMembertpx:InternationalSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:WholesaleMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMembertpx:InternationalSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelDirectlyToConsumerMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelDirectlyToConsumerMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:BeddingProductsMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembertpx:BeddingProductsMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:BeddingProductsMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:BeddingProductsMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembertpx:BeddingProductsMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:BeddingProductsMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:NorthAmericaSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:InternationalSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:NorthAmericaSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:InternationalSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembercountry:US2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembercountry:US2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembercountry:US2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembercountry:US2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembercountry:US2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembercountry:US2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:NorthAmericaSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:InternationalSegmentMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2021-07-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:NorthAmericaSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:InternationalSegmentMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2020-07-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:WholesaleMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:WholesaleMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMembertpx:InternationalSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:WholesaleMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelDirectlyToConsumerMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMemberus-gaap:SalesChannelDirectlyToConsumerMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:SalesChannelDirectlyToConsumerMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:BeddingProductsMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembertpx:BeddingProductsMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:BeddingProductsMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMembertpx:BeddingProductsMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembertpx:BeddingProductsMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:BeddingProductsMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:NorthAmericaSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:NorthAmericaSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMembertpx:InternationalSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:ProductsOtherMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembercountry:US2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembercountry:US2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMembercountry:US2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMembercountry:US2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:NorthAmericaSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2021-01-012021-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:NorthAmericaSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMembertpx:InternationalSegmentMember2020-01-012020-09-300001206264us-gaap:OperatingSegmentsMemberus-gaap:NonUsMember2020-01-012020-09-300001206264tpx:DreamsTopcoLimitedMember2021-08-022021-08-020001206264tpx:DreamsTopcoLimitedMember2021-08-02tpx:retailLocation0001206264tpx:NorthAmericaSegmentMember2020-12-310001206264tpx:InternationalSegmentMember2020-12-310001206264tpx:NorthAmericaSegmentMember2021-01-012021-09-300001206264tpx:InternationalSegmentMember2021-01-012021-09-300001206264tpx:NorthAmericaSegmentMember2021-09-300001206264tpx:InternationalSegmentMember2021-09-300001206264tpx:TermFacilityMembertpx:A2019CreditAgreementMember2021-09-300001206264tpx:TermFacilityMembertpx:A2019CreditAgreementMember2020-12-310001206264us-gaap:RevolvingCreditFacilityMembertpx:A2019CreditAgreementMember2021-09-300001206264us-gaap:RevolvingCreditFacilityMembertpx:A2019CreditAgreementMember2020-12-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Member2020-12-310001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2020-12-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Member2020-12-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2023Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2023Member2020-12-310001206264us-gaap:SecuredDebtMember2021-09-300001206264us-gaap:SecuredDebtMember2020-12-310001206264tpx:OtherBorrowingsMember2021-09-300001206264tpx:OtherBorrowingsMember2020-12-310001206264tpx:TermFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMembertpx:A2019CreditAgreementMember2021-01-012021-09-300001206264us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMembertpx:A2019CreditAgreementMember2021-01-012021-09-300001206264tpx:TermFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMembertpx:A2019CreditAgreementMember2020-01-012020-12-310001206264us-gaap:RevolvingCreditFacilityMemberus-gaap:LondonInterbankOfferedRateLIBORMembertpx:A2019CreditAgreementMember2020-01-012020-12-310001206264us-gaap:SecuredDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-01-012021-09-300001206264us-gaap:SecuredDebtMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-01-012020-12-310001206264us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembertpx:A2019CreditAgreementMember2019-10-160001206264us-gaap:LineOfCreditMembertpx:TermLoanFacilityMembertpx:A2019CreditAgreementMember2019-10-160001206264tpx:IncrementalFacilityMemberus-gaap:LineOfCreditMembertpx:A2019CreditAgreementMember2019-10-160001206264us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMembertpx:A2019CreditAgreementMember2019-10-160001206264us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembertpx:A2019CreditAgreementMember2021-02-020001206264us-gaap:LineOfCreditMembertpx:A2019CreditAgreementMember2021-09-300001206264us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMembertpx:A2019CreditAgreementMember2021-01-012021-09-300001206264tpx:DelayedDrawTermLoanMemberus-gaap:LineOfCreditMembertpx:A2019CreditAgreementMember2021-05-260001206264tpx:DelayedDrawTermLoanMemberus-gaap:LineOfCreditMembertpx:A2019CreditAgreementMember2021-07-302021-07-300001206264tpx:AccountsReceivableSecuritizationMemberus-gaap:SecuredDebtMember2021-09-300001206264tpx:AccountsReceivableSecuritizationMemberus-gaap:SecuredDebtMember2021-04-060001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Member2021-09-240001206264us-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodOneMembertpx:SeniorNotesDue2031Member2021-01-012021-09-300001206264us-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Member2021-01-012021-09-300001206264us-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMembertpx:SeniorNotesDue2031Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Memberus-gaap:DebtInstrumentRedemptionPeriodFourMember2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Member2021-01-012021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Member2021-07-012021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2021-03-250001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodOneMember2021-01-012021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:SeniorNotesMember2021-01-012021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMember2021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodFourMember2021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2021-01-012021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2021-01-012021-03-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Member2021-06-152021-06-150001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Member2021-01-012021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Member2020-11-092021-06-150001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2023Member2020-11-092020-11-090001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2023Member2021-01-012021-03-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2023Memberus-gaap:FairValueInputsLevel2Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2023Memberus-gaap:FairValueInputsLevel2Member2020-12-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Memberus-gaap:FairValueInputsLevel2Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2026Memberus-gaap:FairValueInputsLevel2Member2020-12-310001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-09-300001206264tpx:SeniorNotesDue2029Memberus-gaap:SeniorNotesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Memberus-gaap:FairValueInputsLevel2Member2021-09-300001206264us-gaap:SeniorNotesMembertpx:SeniorNotesDue2031Memberus-gaap:FairValueInputsLevel2Member2020-12-3100012062642021-02-2800012062642021-04-300001206264tpx:February2017ProgramMember2021-09-300001206264us-gaap:SubsequentEventMember2021-10-280001206264tpx:PerformanceBasedRestrictedStockUnitsMember2021-07-012021-09-300001206264tpx:PerformanceBasedRestrictedStockUnitsMember2020-07-012020-09-300001206264tpx:PerformanceBasedRestrictedStockUnitsMember2021-01-012021-09-300001206264tpx:PerformanceBasedRestrictedStockUnitsMember2020-01-012020-09-300001206264us-gaap:AccumulatedTranslationAdjustmentMember2021-06-300001206264us-gaap:AccumulatedTranslationAdjustmentMember2020-06-300001206264us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001206264us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001206264us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300001206264us-gaap:AccumulatedTranslationAdjustmentMember2020-09-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-06-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-06-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-07-012021-09-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-07-012020-09-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-09-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-09-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-09-300001206264us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-09-300001206264us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-09-300001206264us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-09-300001206264us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001206264us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001206264us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001206264us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001206264tpx:RestrictedStockUnitsAndDeferredStockUnitsMember2021-07-012021-09-300001206264tpx:RestrictedStockUnitsAndDeferredStockUnitsMember2020-07-012020-09-300001206264tpx:RestrictedStockUnitsAndDeferredStockUnitsMember2021-01-012021-09-300001206264tpx:RestrictedStockUnitsAndDeferredStockUnitsMember2020-01-012020-09-30iso4217:DKK0001206264tpx:TaxYearsAfter2011Memberus-gaap:ForeignCountryMembertpx:DanishTaxAuthoritySKATMember2021-09-300001206264tpx:TaxYearsAfter2011Memberus-gaap:ForeignCountryMembertpx:DanishTaxAuthoritySKATMember2020-12-310001206264us-gaap:ForeignCountryMembertpx:DanishTaxAuthoritySKATMemberus-gaap:TaxYear2015Member2021-07-012021-09-300001206264us-gaap:ForeignCountryMembertpx:DanishTaxAuthoritySKATMembertpx:TaxYear2012Through2014Member2021-07-012021-09-300001206264us-gaap:ForeignCountryMembertpx:DanishTaxAuthoritySKATMember2021-07-012021-09-300001206264us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-09-300001206264us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-12-310001206264us-gaap:OtherNoncurrentAssetsMember2021-09-300001206264us-gaap:OtherNoncurrentAssetsMember2020-12-31tpx:segment0001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMember2021-09-300001206264us-gaap:OperatingSegmentsMembertpx:NorthAmericaSegmentMember2020-12-310001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMember2021-09-300001206264us-gaap:OperatingSegmentsMembertpx:InternationalSegmentMember2020-12-310001206264us-gaap:CorporateNonSegmentMember2021-09-300001206264us-gaap:CorporateNonSegmentMember2020-12-310001206264us-gaap:IntersegmentEliminationMember2021-09-300001206264us-gaap:IntersegmentEliminationMember2020-12-310001206264us-gaap:OperatingSegmentsMember2021-09-300001206264us-gaap:OperatingSegmentsMember2020-12-310001206264us-gaap:IntersegmentEliminationMembertpx:NorthAmericaSegmentMember2021-07-012021-09-300001206264us-gaap:IntersegmentEliminationMembertpx:InternationalSegmentMember2021-07-012021-09-300001206264us-gaap:IntersegmentEliminationMember2021-07-012021-09-300001206264us-gaap:CorporateNonSegmentMember2021-07-012021-09-300001206264us-gaap:IntersegmentEliminationMembertpx:NorthAmericaSegmentMember2020-07-012020-09-300001206264us-gaap:IntersegmentEliminationMembertpx:InternationalSegmentMember2020-07-012020-09-300001206264us-gaap:IntersegmentEliminationMember2020-07-012020-09-300001206264us-gaap:CorporateNonSegmentMember2020-07-012020-09-300001206264us-gaap:IntersegmentEliminationMembertpx:NorthAmericaSegmentMember2021-01-012021-09-300001206264us-gaap:IntersegmentEliminationMembertpx:InternationalSegmentMember2021-01-012021-09-300001206264us-gaap:IntersegmentEliminationMember2021-01-012021-09-300001206264us-gaap:CorporateNonSegmentMember2021-01-012021-09-300001206264us-gaap:IntersegmentEliminationMembertpx:NorthAmericaSegmentMember2020-01-012020-09-300001206264us-gaap:IntersegmentEliminationMembertpx:InternationalSegmentMember2020-01-012020-09-300001206264us-gaap:IntersegmentEliminationMember2020-01-012020-09-300001206264us-gaap:CorporateNonSegmentMember2020-01-012020-09-300001206264country:US2021-09-300001206264country:US2020-12-310001206264us-gaap:NonUsMember2021-09-300001206264us-gaap:NonUsMember2020-12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 001-31922
TEMPUR SEALY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter) | | | | | | | | |
Delaware | | 33-1022198 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
1000 Tempur Way
Lexington, Kentucky 40511
(Address of principal executive offices)
Registrant’s telephone number, including area code: (800) 878-8889
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
Title of each class | Trading Symbol(s) | Name of exchange on which registered |
Common Stock, $0.01 par value | TPX | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
Large accelerated filer | Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging Growth Company |
x | o | o | ☐ | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ý
The number of shares outstanding of the registrant’s common stock as of October 28, 2021 was 192,510,074 shares.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, (this "Report"), including the information incorporated by reference herein, contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which includes information concerning one or more of our plans; objectives; goals; strategies and other information that is not historical information. Many of these statements appear, in particular, under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part I, ITEM 2 of this Report. When used in this Report, the words "assumes," "estimates," "expects," "guidance," "anticipates," "might," "projects," "predicts," "plans," "proposed," "targets," "intends," "believes," "will," "may," "could," "is likely to" and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon our expectations and beliefs and various assumptions. There can be no assurance that we will realize our expectations or that our 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 as forward-looking statements in this Report. These risk factors include the impact of the macroeconomic environment in both the U.S. and internationally on our business segments and expectations regarding growth of the mattress industry; uncertainties arising from global events, natural disasters or pandemics; risks associated with the duration, scope and severity of COVID-19 and its effects on our business and operations, including the disruption or delay of production and delivery of materials and products in our supply chain; the impact of travel bans, work-from-home policies, or shelter-in-place orders; a temporary or prolonged shutdown of manufacturing facilities or retail stores and decreased retail traffic; the effects of strategic investments on our operations, including our efforts to expand our global market share; expectations regarding the Dreams acquisition; the ability to develop and successfully launch new products; the efficiency and effectiveness of our advertising campaigns and other marketing programs; the ability to increase sales productivity within existing retail accounts and to further penetrate the retail channel, including the timing of opening or expanding within large retail accounts and the timing and success of product launches, and the related expenses and life cycles of such products; the ability to continuously improve and expand our product line; the effects of consolidation of retailers on revenues and costs; competition in our industry; consumer acceptance of our products; general economic, financial and industry conditions, particularly conditions relating to liquidity, financial performance and related credit issues present in the retail sector; financial distress among our business partners, customers and competitors, and financial solvency and related problems experienced by other market participants, any of which may be amplified by the effects of COVID-19; our reliance on information technology and the associated risks involving potential security lapses and/or cyber-based attacks; the outcome of pending tax audits or other tax, regulatory or investigation proceedings and pending litigation; changes in foreign tax rates and changes in tax laws generally, including the ability to utilize tax loss carryforwards; market disruptions related to COVID-19 which may frustrate our ability to access financing on acceptable terms or at all; our capital structure and debt level, including our ability to meet financial obligations and continue to comply with the terms and financial ratio covenants of our credit facilities; changes in interest rates; effects of changes in foreign exchange rates on our reported earnings; changing commodity costs; expectations regarding our target leverage, our share repurchase program and quarterly cash dividend; sales fluctuations due to seasonality; the effect of future legislative or regulatory changes, including changes in international trade duties, tariffs and other aspects of international trade policy; our ability to protect our intellectual property; and disruptions to the implementation of our strategic priorities and business plan caused by changes in our executive management team.
Other potential risk factors include the risk factors discussed under the heading "Risk Factors" in Part I, ITEM 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Annual Report"). In addition, there may be other factors that may cause our actual results to differ materially from the forward-looking statements.
All forward-looking statements attributable to us apply only as of the date of this Report and are expressly qualified in their entirety by the cautionary statements included in this Report. Except as may be required by law, we undertake no obligation to publicly update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise.
When used in this Report, except as specifically noted otherwise, the term "Tempur Sealy International" refers to Tempur Sealy International, Inc. only, and the terms "Company," "we," "our," "ours" and "us" refer to Tempur Sealy International, Inc. and its consolidated subsidiaries. When used in this Report, the term "Tempur" may refer to Tempur-branded products and the term "Sealy" may refer to Sealy-branded products or to Sealy Corporation and its historical subsidiaries, in all cases as the context requires. In addition, when used in this Report, "2019 Credit Agreement" refers to the Company's senior credit facility entered into in 2019; "2023 Senior Notes" refers to the 5.625% senior notes due 2023 issued in 2015; "2026 Senior Notes" refers to the 5.50% senior notes due 2026 issued in 2016; "2029 Senior Notes" refers to the 4.00% senior notes due 2029 issued in 2021; and "2031 Senior Notes" refers to the 3.875% senior notes due 2031 issued in 2021.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ in millions, except per common share amounts)
(unaudited) | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Net sales | $ | 1,358.3 | | | $ | 1,132.3 | | | $ | 3,571.2 | | | $ | 2,619.9 | |
Cost of sales | 781.2 | | | 602.1 | | | 2,017.0 | | | 1,466.7 | |
Gross profit | 577.1 | | | 530.2 | | | 1,554.2 | | | 1,153.2 | |
Selling and marketing expenses | 243.8 | | | 229.7 | | | 658.3 | | | 535.8 | |
General, administrative and other expenses | 90.3 | | | 125.1 | | | 254.9 | | | 288.1 | |
| | | | | | | |
Equity income in earnings of unconsolidated affiliates | (6.8) | | | (4.8) | | | (20.5) | | | (9.6) | |
Operating income | 249.8 | | | 180.2 | | | 661.5 | | | 338.9 | |
| | | | | | | |
Other expense, net: | | | | | | | |
Interest expense, net | 13.5 | | | 20.1 | | | 45.8 | | | 61.0 | |
Loss on extinguishment of debt | — | | | 0.9 | | | 23.0 | | | 0.9 | |
Other expense (income), net | 0.1 | | | (0.5) | | | (0.3) | | | 0.3 | |
Total other expense, net | 13.6 | | | 20.5 | | | 68.5 | | | 62.2 | |
| | | | | | | |
Income from continuing operations before income taxes | 236.2 | | | 159.7 | | | 593.0 | | | 276.7 | |
Income tax provision | (58.7) | | | (40.3) | | | (143.9) | | | (73.2) | |
Income from continuing operations | 177.5 | | | 119.4 | | | 449.1 | | | 203.5 | |
(Loss) income from discontinued operations, net of tax | (0.1) | | | 2.4 | | | (0.6) | | | 1.3 | |
Net income before non-controlling interests | 177.4 | | | 121.8 | | | 448.5 | | | 204.8 | |
Less: Net income (loss) attributable to non-controlling interests | — | | | 0.4 | | | (0.2) | | | 0.7 | |
Net income attributable to Tempur Sealy International, Inc. | $ | 177.4 | | | $ | 121.4 | | | $ | 448.7 | | | $ | 204.1 | |
| | | | | | | |
Earnings per common share: | | | | | | | |
| | | | | | | |
Basic | | | | | | | |
Earnings per share for continuing operations | $ | 0.91 | | | $ | 0.58 | | | $ | 2.26 | | | $ | 0.97 | |
Earnings per share for discontinued operations | — | | | 0.01 | | | — | | | 0.01 | |
Earnings per share | $ | 0.91 | | | $ | 0.59 | | | $ | 2.26 | | | $ | 0.98 | |
| | | | | | | |
Diluted | | | | | | | |
Earnings per share for continuing operations | $ | 0.87 | | | $ | 0.56 | | | $ | 2.18 | | | $ | 0.96 | |
Earnings per share for discontinued operations | — | | | 0.01 | | | — | | | 0.01 | |
Earnings per share | $ | 0.87 | | | $ | 0.57 | | | $ | 2.18 | | | $ | 0.97 | |
| | | | | | | |
Weighted average common shares outstanding: | | | | | | | |
Basic | 195.8 | | | 206.4 | | | 198.9 | | | 208.8 | |
Diluted | 203.4 | | | 211.6 | | | 205.9 | | | 211.6 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in millions)
(unaudited) | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
Net income before non-controlling interests | $ | 177.4 | | | $ | 121.8 | | | $ | 448.5 | | | $ | 204.8 | |
Other comprehensive income, net of tax: | | | | | | | |
Foreign currency translation adjustments | (29.9) | | | 12.1 | | | (34.0) | | | (0.2) | |
| | | | | | | |
Other comprehensive (loss) income, net of tax | (29.9) | | | 12.1 | | | (34.0) | | | (0.2) | |
Comprehensive income | 147.5 | | | 133.9 | | | 414.5 | | | 204.6 | |
Less: Comprehensive income (loss) attributable to non-controlling interests | — | | | 0.4 | | | (0.2) | | | 0.7 | |
Comprehensive income attributable to Tempur Sealy International, Inc. | $ | 147.5 | | | $ | 133.5 | | | $ | 414.7 | | | $ | 203.9 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions) | | | | | | | | | | | |
| September 30, 2021 | | December 31, 2020 |
ASSETS | (Unaudited) | | |
| | | |
Current Assets: | | | |
Cash and cash equivalents | $ | 503.3 | | | $ | 65.0 | |
Accounts receivable, net | 510.2 | | | 383.7 | |
Inventories | 384.9 | | | 312.1 | |
Prepaid expenses and other current assets | 84.4 | | | 207.6 | |
Total Current Assets | 1,482.8 | | | 968.4 | |
Property, plant and equipment, net | 556.6 | | | 507.9 | |
Goodwill | 1,082.1 | | | 766.3 | |
Other intangible assets, net | 755.7 | | | 630.1 | |
Operating lease right-of-use assets | 464.5 | | | 304.3 | |
Deferred income taxes | 17.3 | | | 13.5 | |
Other non-current assets | 108.3 | | | 118.1 | |
Total Assets | $ | 4,467.3 | | | $ | 3,308.6 | |
| | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
| | | |
Current Liabilities: | | | |
Accounts payable | $ | 463.4 | | | $ | 324.1 | |
Accrued expenses and other current liabilities | 602.7 | | | 585.1 | |
Current portion of long-term debt | 53.0 | | | 43.9 | |
Income taxes payable | 40.3 | | | 21.7 | |
Total Current Liabilities | 1,159.4 | | | 974.8 | |
Long-term debt, net | 2,285.8 | | | 1,323.0 | |
Long-term operating lease obligations | 413.5 | | | 275.1 | |
Deferred income taxes | 96.6 | | | 90.4 | |
Other non-current liabilities | 141.0 | | | 131.8 | |
Total Liabilities | 4,096.3 | | | 2,795.1 | |
| | | |
| | | |
| | | |
Redeemable non-controlling interest | 8.5 | | | 8.9 | |
| | | |
| | | |
| | | |
Total Stockholders' Equity | 362.5 | | | 504.6 | |
Total Liabilities, Redeemable Non-Controlling Interest and Stockholders' Equity | $ | 4,467.3 | | | $ | 3,308.6 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
($ in millions)
(unaudited)
Three Months Ended September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Tempur Sealy International, Inc. Stockholders' Equity | | | | | | |
| Redeemable Non-controlling Interest | | Common Stock | | Treasury Stock | | | | | | Accumulated Other Comprehensive Loss | | | | Total Stockholders' Equity | | |
| | Shares Issued | | At Par | | Shares Issued | | At Cost | | Additional Paid in Capital | | Retained Earnings | | | | | |
Balance as of June 30, 2021 | $ | 8.5 | | | 283.8 | | | $ | 2.8 | | | 87.3 | | | $ | (2,416.6) | | | $ | 597.1 | | | $ | 2,287.9 | | | $ | (69.6) | | | | | $ | 401.6 | | | |
Net income | | | | | | | | | | | | | 177.4 | | | | | | | 177.4 | | | |
Net loss attributable to non-controlling interest | — | | | | | | | | | | | | | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Foreign currency adjustments, net of tax | | | | | | | | | | | | | | | (29.9) | | | | | (29.9) | | | |
| | | | | | | | | | | | | | | | | | | | | |
Exercise of stock options | | | | | | | (0.4) | | | 10.7 | | | (4.8) | | | | | | | | | 5.9 | | | |
Dividends declared on common stock ($0.09 per share) | | | | | | | | | | | | | (18.3) | | | | | | | (18.3) | | | |
Issuances of PRSUs, RSUs, and DSUs | | | | | | | — | | | 0.4 | | | (0.4) | | | | | | | | | — | | | |
Treasury stock repurchased | | | | | | | 4.1 | | | (190.0) | | | | | | | | | | | (190.0) | | | |
Treasury stock repurchased - PRSU/RSU releases | | | | | | | — | | | (0.3) | | | | | | | | | | | (0.3) | | | |
Amortization of unearned stock-based compensation | | | | | | | | | | | 16.1 | | | | | | | | | 16.1 | | | |
| | | | | | | | | | | | | | | | | | | | | |
Balance, September 30, 2021 | $ | 8.5 | | | 283.8 | | | $ | 2.8 | | | 91.0 | | | $ | (2,595.8) | | | $ | 608.0 | | | $ | 2,447.0 | | | $ | (99.5) | | | | | $ | 362.5 | | | |
Three Months Ended September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Tempur Sealy International, Inc. Stockholders' Equity | | | | | | |
| Redeemable Non-controlling Interest | | Common Stock | | Treasury Stock | | | | | | Accumulated Other Comprehensive Loss | | Non-controlling Interest in Subsidiaries | | Total Stockholders' Equity | | |
| | Shares Issued | | At Par | | Shares Issued | | At Cost | | Additional Paid in Capital | | Retained Earnings | | | | | |
Balance as of June 30, 2020 | $ | 8.7 | | | 283.8 | | | $ | 2.8 | | | 77.4 | | | $ | (2,026.3) | | | $ | 584.2 | | | $ | 1,779.5 | | | $ | (100.0) | | | $ | 0.8 | | | $ | 241.0 | | | |
| | | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | | | | | | | 121.4 | | | | | | | 121.4 | | | |
Net income attributable to non-controlling interests | 0.2 | | | | | | | | | | | | | | | | | 0.2 | | | 0.2 | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Foreign currency adjustments, net of tax | | | | | | | | | | | | | | | 12.1 | | | | | 12.1 | | | |
Exercise of stock options | | | | | | | — | | | 0.2 | | | 0.7 | | | | | | | | | 0.9 | | | |
Issuances of PRSUs, RSUs, and DSUs | | | | | | | — | | | 0.1 | | | (0.1) | | | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | |
Treasury stock repurchased - PRSU/RSU releases | | | | | | | — | | | (0.1) | | | | | | | | | | | (0.1) | | | |
Amortization of unearned stock-based compensation | | | | | | | | | | | 71.8 | | | | | | | | | 71.8 | | | |
| | | | | | | | | | | | | | | | | | | | | |
Balance, September 30, 2020 | $ | 8.9 | | | 283.8 | | | $ | 2.8 | | | 77.4 | | | $ | (2,026.1) | | | $ | 656.6 | | | $ | 1,900.9 | | | $ | (87.9) | | | $ | 1.0 | | | $ | 447.3 | | | |
See accompanying Notes to Condensed Consolidated Financial Statements.
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
(in millions) (unaudited)
Nine Months Ended September 30, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Tempur Sealy International, Inc. Stockholders' Equity | | | | |
| Redeemable Non-controlling Interest | | Common Stock | | Treasury Stock | | | | | | Accumulated Other Comprehensive Loss | | Non-controlling Interest in Subsidiaries | | Total Stockholders' Equity |
| | Shares Issued | | At Par | | Shares Issued | | At Cost | | Additional Paid in Capital | | Retained Earnings | | | |
Balance as of December 31, 2020 | $ | 8.9 | | | 283.8 | | | $ | 2.8 | | | 78.9 | | | $ | (2,096.8) | | | $ | 617.5 | | | $ | 2,045.6 | | | $ | (65.5) | | | $ | 1.0 | | | $ | 504.6 | |
Net income | | | | | | | | | | | | | 448.7 | | | | | | | 448.7 | |
Net (loss) income attributable to non-controlling interests | (0.4) | | | | | | | | | | | | | | | | | 0.2 | | | 0.2 | |
| | | | | | | | | | | | | | | | | | | |
Purchase of remaining interest in subsidiary | | | | | | | | | | | (3.4) | | | | | | | (1.2) | | | (4.6) | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Foreign currency adjustments, net of tax | | | | | | | | | | | | | | | (34.0) | | | | | (34.0) | |
Exercise of stock options | | | | | | | (0.9) | | | 25.0 | | | (10.6) | | | | | | | | | 14.4 | |
Dividends declared on common stock | | | | | | | | | | | | | (47.3) | | | | | | | (47.3) | |
Issuances of RSUs | | | | | | | (1.6) | | | 41.8 | | | (41.8) | | | | | | | | | — | |
Treasury stock repurchased | | | | | | | 14.1 | | | (551.4) | | | | | | | | | | | (551.4) | |
Treasury stock repurchased - PRSU/RSU/DSU releases | | | | | | | 0.5 | | (14.4) | | | | | | | | | | | (14.4) | |
Amortization of unearned stock-based compensation | | | | | | | | | | | 46.3 | | | | | | | | | 46.3 | |
| | | | | | | | | | | | | | | | | | | |
Balance, September 30, 2021 | $ | 8.5 | | | 283.8 | | | $ | 2.8 | | | 91.0 | | | $ | (2,595.8) | | | $ | 608.0 | | | $ | 2,447.0 | | | $ | (99.5) | | | $ | — | | | $ | 362.5 | |
Nine Months Ended September 30, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Tempur Sealy International, Inc. Stockholders' Equity | | | | | | |
| Redeemable Non-controlling Interest | | Common Stock | | Treasury Stock | | | | | | Accumulated Other Comprehensive Loss | | Non-controlling Interest in Subsidiaries | | Total Stockholders' Equity | | |
| | Shares Issued | | At Par | | Shares Issued | | At Cost | | Additional Paid in Capital | | Retained Earnings | | | | | |
Balance as of December 31, 2019 | $ | — | | | 283.8 | | | $ | 2.8 | | | 75.1 | | | $ | (1,832.8) | | | $ | 573.9 | | | $ | 1,703.3 | | | $ | (87.7) | | | $ | 0.9 | | | $ | 360.4 | | | |
Adoption of accounting standard effective January 1, 2020 | | | | | | | | | | | | | (6.5) | | | | | | | (6.5) | | | |
Net income | | | | | | | | | | | | | 204.1 | | | | | | | 204.1 | | | |
Net income attributable to non-controlling interests | 0.6 | | | | | | | | | | | | | | | | | 0.1 | | | 0.1 | | | |
Acquisition of non-controlling interest in subsidiary | 8.4 | | | | | | | | | | | | | | | | | | — | | | |
Dividend paid to noncontrolling interest in subsidiary | (0.1) | | | | | | | | | | | | | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | |
Foreign currency adjustments, net of tax | | | | | | | | | | | | | | | (0.2) | | | | | (0.2) | | | |
Exercise of stock options | | | | | | | — | | | 0.5 | | | 1.9 | | | | | | | | | 2.4 | | | |
Issuances of PRSUs, RSUs, and DSUs | | | | | | | (0.4) | | | 5.8 | | | (5.8) | | | | | | | | | — | | | |
Treasury stock repurchased | | | | | | | 2.6 | | | (187.5) | | | | | | | | | | | (187.5) | | | |
Treasury stock repurchased - PRSU/RSU/DSU releases | | | | | | | 0.1 | | (12.1) | | | | | | | | | | | (12.1) | | | |
Amortization of unearned stock-based compensation | | | | | | | | | | | 86.6 | | | | | | | | | 86.6 | | | |
| | | | | | | | | | | | | | | | | | | | | |
Balance, September 30, 2020 | $ | 8.9 | | | 283.8 | | | $ | 2.8 | | | 77.4 | | | $ | (2,026.1) | | | $ | 656.6 | | | $ | 1,900.9 | | | $ | (87.9) | | | $ | 1.0 | | | $ | 447.3 | | | |
See accompanying Notes to Condensed Consolidated Financial Statements.
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions) (unaudited) | | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
| 2021 | | 2020 |
CASH FLOWS FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS: | | | |
Net income before non-controlling interests | $ | 448.5 | | | $ | 204.8 | |
Loss (income) from discontinued operations, net of tax | 0.6 | | | (1.3) | |
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | | | |
Depreciation and amortization | 82.5 | | | 72.5 | |
Amortization of stock-based compensation | 46.3 | | | 86.6 | |
Amortization of deferred financing costs | 1.9 | | | 2.6 | |
Bad debt expense | 2.4 | | | 32.8 | |
Deferred income taxes | 2.0 | | | (23.4) | |
Dividends received from unconsolidated affiliates | 18.2 | | | 15.8 | |
Equity income in earnings of unconsolidated affiliates | (20.5) | | | (9.6) | |
Loss on extinguishment of debt | 3.0 | | | 0.9 | |
Foreign currency adjustments and other | 1.0 | | | 0.4 | |
Changes in operating assets and liabilities, net of effect of business acquisitions | 11.6 | | | 115.8 | |
Net cash provided by operating activities from continuing operations | 597.5 | | | 497.9 | |
| | | |
CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS: | | | |
Purchases of property, plant and equipment | (82.1) | | | (73.6) | |
Acquisitions, net of cash acquired | (426.0) | | | (37.9) | |
| | | |
Other | 0.1 | | | 0.1 | |
Net cash used in investing activities from continuing operations | (508.0) | | | (111.4) | |
| | | |
CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS: | | | |
Proceeds from borrowings under long-term debt obligations | 3,664.2 | | | 1,073.9 | |
Repayments of borrowings under long-term debt obligations | (2,675.8) | | | (1,094.9) | |
Proceeds from exercise of stock options | 14.4 | | | 2.4 | |
Treasury stock repurchased | (565.8) | | | (199.6) | |
Dividends paid | (45.8) | | | — | |
Payments of deferred financing costs | (25.3) | | | (1.4) | |
Repayments of finance lease obligations and other | (9.5) | | | (8.9) | |
Net cash provided by (used in) financing activities from continuing operations | 356.4 | | | (228.5) | |
| | | |
Net cash provided by continuing operations | 445.9 | | | 158.0 | |
| | | |
| | | |
| | | |
| | | |
| | | |
Net operating cash flows (used in) provided by discontinued operations | (0.8) | | | 1.5 | |
| | | |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (6.8) | | | 4.8 | |
Increase in cash and cash equivalents | 438.3 | | | 164.3 | |
CASH AND CASH EQUIVALENTS, beginning of period | 65.0 | | | 64.9 | |
CASH AND CASH EQUIVALENTS, end of period | $ | 503.3 | | | $ | 229.2 | |
| | | |
| | | |
| | | |
Supplemental cash flow information: | | | |
Cash paid during the period for: | | | |
Interest | $ | 32.8 | | | $ | 46.1 | |
Income taxes, net of refunds | $ | 115.0 | | | $ | 47.0 | |
See accompanying Notes to Condensed Consolidated Financial Statements.
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited)
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation and Description of Business. Tempur Sealy International, Inc., a Delaware corporation, together with its subsidiaries, is a U.S. based, multinational company. The term "Tempur Sealy International" refers to Tempur Sealy International, Inc. only, and the term "Company" refers to Tempur Sealy International, Inc. and its consolidated subsidiaries.
The Company designs, manufactures and distributes bedding products, which include mattresses, foundations and adjustable bases, and other products, which include pillows and other accessories. The Company also derives income from royalties by licensing Sealy® and Stearns & Foster® brands, technology and trademarks to other manufacturers. The Company sells its products through two sales channels: Wholesale and Direct.
The Company has ownership interests in United Kingdom and Asia-Pacific joint ventures to develop markets for Sealy® branded products in those regions. The Company's ownership interest in each of these joint ventures is 50.0%. The equity method of accounting is used for these joint ventures, over which the Company has significant influence but does not have control, and consolidation is not otherwise required. The Company's equity in the net income and losses of these investments is reported in equity income in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Income.
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and include all of the information and disclosures required by generally accepted accounting principles in the United States ("GAAP") for interim financial reporting. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements of the Company and related footnotes for the year ended December 31, 2020, included in the 2020 Annual Report filed with the Securities and Exchange Commission on February 19, 2021.
The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. It is the opinion of management that all necessary adjustments for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.
(b) Inventories. Inventories are stated at the lower of cost and net realizable value, determined by the first-in, first-out method, and consist of the following:
| | | | | | | | | | | |
| September 30, | | December 31, |
(in millions) | 2021 | | 2020 |
Finished goods | $ | 211.2 | | | $ | 170.2 | |
Work-in-process | 11.0 | | | 12.6 | |
Raw materials and supplies | 162.7 | | | 129.3 | |
| $ | 384.9 | | | $ | 312.1 | |
(c) Accrued Sales Returns. The Company allows product returns through certain sales channels and on certain products. Estimated sales returns are provided at the time of sale based on historical sales channel return rates. Estimated future obligations related to these products are provided by a reduction of sales in the period in which the revenue is recognized. The Company considers the impact of recoverable salvage value on sales returns by segment in determining its estimate of future sales returns. Accrued sales returns are included in accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets.
The Company had the following activity for sales returns from December 31, 2020 to September 30, 2021:
| | | | | |
(in millions) | |
Balance as of December 31, 2020 | $ | 44.9 | |
Amounts accrued | 105.2 | |
Returns charged to accrual | (101.8) | |
Balance as of September 30, 2021 | $ | 48.3 | |
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)
As of September 30, 2021 and December 31, 2020, $32.8 million and $31.6 million of accrued sales returns are included as a component of accrued expenses and other current liabilities and $15.5 million and $13.3 million of accrued sales returns are included in other non-current liabilities on the Company's accompanying Condensed Consolidated Balance Sheets, respectively.
(d) Warranties. The Company provides warranties on certain products, which vary by segment, product and brand. Estimates of warranty expenses are based primarily on historical claims experience and product testing. Estimated future obligations related to these products are charged to cost of sales in the period in which the related revenue is recognized. The Company considers the impact of recoverable salvage value on warranty costs in determining its estimate of future warranty obligations.
The Company provides warranties on mattresses with varying warranty terms. Tempur-Pedic mattresses sold in the North America segment and all Sealy mattresses have warranty terms ranging from 10 to 25 years, generally non-prorated for the first 10 to 15 years and then prorated for the balance of the warranty term. Tempur-Pedic mattresses sold in the International segment have warranty terms ranging from 5 to 15 years, non-prorated for the first 5 years and then prorated on a straight-line basis for the last 10 years of the warranty term. Tempur-Pedic pillows have a warranty term of 3 years, non-prorated.
The Company had the following activity for its accrued warranty expense from December 31, 2020 to September 30, 2021:
| | | | | |
(in millions) | |
Balance as of December 31, 2020 | $ | 44.2 | |
Amounts accrued | 19.4 | |
Warranties charged to accrual | (16.5) | |
Balance as of September 30, 2021 | $ | 47.1 | |
As of September 30, 2021 and December 31, 2020, $22.6 million and $20.3 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $24.5 million and $23.9 million of accrued warranty expense is included in other non-current liabilities on the Company's accompanying Condensed Consolidated Balance Sheets, respectively.
(e) Allowance for Credit Losses. The allowance for credit losses is the Company's best estimate of the amount of expected lifetime credit losses in the Company's accounts receivable. The Company regularly reviews the adequacy of its allowance for credit losses. The Company estimates losses over the contractual life using assumptions to capture the risk of loss, even if remote, based principally on how long a receivable has been outstanding. Account balances are charged off against the allowance for credit losses after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. As of September 30, 2021, the Company's accounts receivable were substantially current. Other factors considered include historical write-off experience, current economic conditions and also factors such as customer credit, past transaction history with the customer and changes in customer payment terms. The allowance for credit losses is included in accounts receivable, net in the accompanying Condensed Consolidated Balance Sheets.
The Company had the following activity for its allowance for credit losses from December 31, 2020 to September 30, 2021:
| | | | | | | | |
(in millions) | | |
Balance as of December 31, 2020 | | $ | 71.6 | |
Amounts accrued | | 2.4 | |
Write-offs charged against the allowance | | (4.5) | |
Balance as of September 30, 2021 | | $ | 69.5 | |
TEMPUR SEALY INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)
(2) Net Sales
The following table presents the Company's disaggregated revenue by channel, product and geographical region, including a reconciliation of disaggregated revenue by segment, for the three months ended September 30, 2021 and 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2021 | | Three Months Ended September 30, 2020 |
(in millions) | North America | | International | | Consolidated | | North America | | International | | Consolidated |
Channel | | | | | | | | | | | |
Wholesale | $ | 991.2 | | | $ | 108.0 | | | $ | 1,099.2 | | | $ | 887.1 | | | $ | 100.1 | | | $ | 987.2 | |
Direct | 128.8 | | | 130.3 | | | 259.1 | | | 107.6 | | | 37.5 | | | 145.1 | |
Net sales | $ | 1,120.0 | | | $ | 238.3 | | | $ | 1,358.3 | | | $ | 994.7 | | | $ | 137.6 | | | $ | 1,132.3 | |
| | | | | | | | | | | |
| North America | | International | | Consolidated | | North America | | International | | Consolidated |
Product | | | | | | | | | | | |
Bedding | $ | 1,047.1 | | | $ | 197.4 | | | $ | 1,244.5 | | | $ | 929.2 | | | $ | 106.0 | | | $ | 1,035.2 | |
Other | 72.9 | | | 40.9 | | | 113.8 | | | 65.5 | | | 31.6 | | | 97.1 | |
Net sales | $ | 1,120.0 | | | $ | 238.3 | | | $ | 1,358.3 | | | $ | 994.7 | | | $ | 137.6 | | | $ | 1,132.3 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| North America | | International | | Consolidated | | North America | | International | | Consolidated |
Geographical region | | | | | | | | | | | |
United States | $ | 1,018.8 | | | $ | — | | | $ | 1,018.8 | | | $ | 904.3 | | | $ | — | | | $ | 904.3 | |
| | | | | | | | | | | |
All Other | 101.2 | | | 238.3 | | | 339.5 | | | 90.4 | | | 137.6 | | | 228.0 | |
Net sales | $ | 1,120.0 | | | $ | 238.3 | | | $ | 1,358.3 | | | $ | 994.7 | | | $ | 137.6 | | | $ | 1,132.3 | |
The following table presents the Company's disaggregated revenue by channel, product and geographical region, including a reconciliation of disaggregated revenue by segment, for the nine months ended September 30, 2021 and 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2021 | | Nine Months Ended September 30, 2020 |
(in millions) | North America | | International | | Consolidated | | North America | | International | | Consolidated |
Channel | | | | | | | | | | | |
Wholesale | $ | 2,647.5 | | | $ | 338.5 | | | $ | 2,986.0 | | | $ | 2,014.6 | | | $ | 258.7 | | | $ | 2,273.3 | |
Direct | 369.6 | | | 215.6 | | | 585.2 | | | 251.0 | | | 95.6 | | | 346.6 | |
Net sales | $ | 3,017.1 | | | $ | 554.1 | | | $ | 3,571.2 | | | $ | 2,265.6 | | | $ | 354.3 | | | $ | 2,619.9 | |
| | | | | | | | | | | |
| North America | | International | | Consolidated | | North America | | International | | Consolidated |
Product | | | | | | | | | | | |
Bedding | $ | 2,839.9 | | | $ | 438.0 | | | $ | 3,277.9 | | | $ | 2,124.4 | | | $ | 273.1 | | | $ | 2,397.5 | |
Other | 177.2 | | | 116.1 | | | 293.3 | | | 141.2 | | | 81.2 | | | 222.4 | |
Net sales | $ | 3,017.1 | | | $ | 554.1 | | | $ | 3,571.2 | | | $ | 2,265.6 | | | $ | 354.3 | | | $ | 2,619.9 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | |