What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-12 · 237 added, 100 removed, 546 unchanged (38% of the section changed)

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

($ in millions, except per common share amounts)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net sales $ 1,880.8 $ 1,233.6 $ 3,485.5 $ 2,423.0

3 unchanged sentences

General, administrative and other expenses 175.9 107.8 385.4 228.8

Loss on disposal of business 13.9 — 13.9 —

Equity income in earnings of unconsolidated affiliates ( 3.0 ) ( 3.1 ) ( 7.8 ) ( 8.0 )

4 unchanged sentences

Total other expense, net 77.2 32.8 139.7 66.8

(Loss) income before income taxes ( 49.3 ) 97.5

Income tax benefit (provision) 16.5 ( 20.7 )

Net (loss) income before non-controlling interest ( 32.8 ) 76.8

Income before income taxes 102.7 140.5 53.4 238.0

Income tax (provision) benefit ( 3.2 ) ( 34.0 ) 13.3 ( 54.7 )

Net income before non-controlling interest 99.5 106.5 66.7 183.3

Net income attributable to non-controlling interest 0.5 0.4 0.8 0.9

Net (loss) income attributable to Somnigroup International Inc.

Net income attributable to Somnigroup International Inc.

$ 99.0 $ 106.1 $ 65.9 $ 182.4

(Loss) earnings per common share:

Earnings per common share:

Basic $ 0.47 $ 0.61 $ 0.33 $ 1.05

6 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

Three Months Ended

Net (loss) income before non-controlling interest $ ( 32.8 ) $ 76.8

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Net income before non-controlling interest $ 99.5 $ 106.5 $ 66.7 $ 183.3

Other comprehensive income (loss), net of tax:

2 unchanged sentences

Other comprehensive income (loss), net of tax 68.8 ( 7.5 ) 99.1 ( 23.3 )

Comprehensive (loss) income ( 2.5 ) 61.0

Comprehensive income 168.3 99.0 165.8 160.0

Comprehensive income attributable to non-controlling interest 0.5 0.4 0.8 0.9

Comprehensive (loss) income attributable to Somnigroup International Inc.

Comprehensive income attributable to Somnigroup International Inc.

$ 167.8 $ 98.6 $ 165.0 $ 159.1

4 unchanged sentences

($ in millions)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

ASSETS (unaudited)

4 unchanged sentences

Prepaid expenses and other current assets 219.4 96.5

Assets held for sale 92.7 —

Total Current Assets 1,388.0 1,065.4

14 unchanged sentences

Income taxes payable 17.6 9.6

Liabilities held for sale 68.8 —

Total Current Liabilities 1,682.5 960.3

12 unchanged sentences

($ in millions) (unaudited)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Somnigroup International Inc.

2 unchanged sentences

Shares Issued At Par Shares Issued At Cost Additional Paid in Capital Retained Earnings

Balance as of December 31, 2024

Balance as of March 31, 2025

$ 8.6 283.8 $ 2.8 75.2 $ ( 1,675.1 ) $ 1,063.3 $ 3,507.2 $ ( 156.5 ) $ 2,741.7

Net loss ( 33.1 ) ( 33.1 )

Net income 99.0 99.0

Net income attributable to non-controlling interest 0.5 —

Dividend paid to non-controlling interest in subsidiary ( 0.2 ) —

Foreign currency adjustments, net of tax 68.8 68.8

Dividends declared on common stock ($ 0.15 per share)

( 31.7 ) ( 31.7 )

Exercise of stock options ( 2.7 ) 103.7 ( 55.6 ) 48.1

Issuances of PRSUs and RSUs

— 0.8 ( 0.8 ) —

Treasury stock repurchased - PRSU/RSU releases 1.4 ( 94.9 ) ( 94.9 )

Amortization of unearned stock-based compensation

Balance as of June 30, 2025

$ 8.9 283.8 $ 2.8 73.9 $ ( 1,665.5 ) $ 1,017.0 $ 3,574.5 $ ( 87.7 ) $ 2,841.1

Three Months Ended June 30, 2024

Somnigroup International Inc.

Stockholders' Equity

Non-controlling Interest Common Stock Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders'

Shares Issued At Par Shares Issued At Cost Additional Paid in Capital Retained Earnings

Balance as of March 31, 2024

$ 8.8 283.8 $ 2.8 110.2 $ ( 3,332.6 ) $ 476.4 $ 3,332.5 $ ( 152.5 ) $ 326.6

Net income 106.1 106.1

Net income attributable to non-controlling interest 0.4 —

Dividend paid to non-controlling interest in subsidiary ( 0.3 ) —

Foreign currency adjustments, net of tax ( 7.5 ) ( 7.5 )

Dividends declared on common stock ($ 0.13 per share)

( 22.9 ) ( 22.9 )

Exercise of stock options — 0.1 ( 0.1 ) —

Issuances of PRSUs and RSUs

— 1.5 ( 1.5 ) —

Treasury stock repurchased - PRSU/RSU releases — — —

Amortization of unearned stock-based compensation

Balance as of June 30, 2024

$ 8.9 283.8 $ 2.8 110.2 $ ( 3,331.0 ) $ 484.3 $ 3,415.7 $ ( 160.0 ) $ 411.8

See accompanying Notes to Condensed Consolidated Financial Statements .

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)

($ in millions)

Six Months Ended June 30, 2025

Somnigroup International Inc.

Stockholders' Equity

Non-controlling Interest Common Stock Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders'

Shares Issued At Par Shares Issued At Cost Additional Paid in Capital Retained Earnings

Balance as of December 31, 2024

$ 9.3 283.8 $ 2.8 110.2 $ ( 3,330.0 ) $ 501.2 $ 3,571.8 $ ( 186.8 ) $ 559.0

Net income 65.9 65.9

Net income attributable to non-controlling interests 0.8 —

Dividend paid to non-controlling interest in subsidiary ( 1.2 ) —

Adjustment to pension liability, net of tax 0.6 0.6

9 unchanged sentences

Amortization of unearned stock-based compensation

Balance as of March 31, 2025

Balance as of June 30, 2025

$ 8.9 283.8 $ 2.8 73.9 $ ( 1,665.5 ) $ 1,017.0 $ 3,574.5 $ ( 87.7 ) $ 2,841.1

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Somnigroup International Inc.

Stockholders' Equity

Non-controlling Interest Common Stock Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders'

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

2 unchanged sentences

Net income 182.4 182.4

Net income attributable to non-controlling interest 0.5 —

Net income attributable to non-controlling interests 0.9 —

Dividend paid to non-controlling interest in subsidiary ( 2.0 ) —

8 unchanged sentences

Amortization of unearned stock-based compensation

Balance as of March 31, 2024

Balance as of June 30, 2024

$ 8.9 283.8 $ 2.8 110.2 $ ( 3,331.0 ) $ 484.3 $ 3,415.7 $ ( 160.0 ) $ 411.8

4 unchanged sentences

($ in millions)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income before non-controlling interest $ ( 32.8 ) $ 76.8

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income before non-controlling interest $ 66.7 $ 183.3

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 116.2 79.7

5 unchanged sentences

Equity income in earnings of unconsolidated affiliates ( 7.8 ) ( 8.0 )

Loss on disposal of business 13.9 —

Foreign currency adjustments and other 4.4 0.5

46 unchanged sentences

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 (Loss) 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.

8 unchanged sentences

Total cash, cash equivalents and restricted cash consisted of the following:

March 31, December 31,

June 30, December 31,

(in millions) 2025 2024

7 unchanged sentences

Inventories are stated at the lower of cost or net realizable value, determined by either the first-in, first-out method or the weighted average cost method, depending on reportable segment , and consist of the following:

March 31, December 31,

June 30, December 31,

(in millions) 2025 2024

8 unchanged sentences

The Company considers the impact of recoverable salvage value on warranty costs in determining its estimate of future warranty obligations.

The Company had the following activity for its accrued warranty expense from December 31, 2024 to March 31, 2025:

The Company had the following activity for its accrued warranty expense from December 31, 2024 to June 30, 2025:

(in millions)

3 unchanged sentences

Warranties charged to accrual ( 9.5 )

Balance as of March 31, 2025 $ 58.6

As of March 31, 2025 and December 31, 2024, $ 22.4 million and $ 15.3 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $ 36.2 million and $ 18.3 million of accrued warranty expense is included in other non-current liabilities on the Company's accompanying Condensed Consolidated Balance Sheets, respectively.

Balance as of June 30, 2025 $ 59.6

As of June 30, 2025 and December 31, 2024, $ 24.0 million and $ 15.3 million of accrued warranty expense is included as a component of accrued expenses and other current liabilities and $ 35.6 million and $ 18.3 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 .

2 unchanged sentences

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.

As of March 31, 2025, the Company's accounts receivable were substantially current.

As of June 30, 2025, the Company's accounts receivable were substantially current.

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.

1 unchanged sentence

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, 2024 to March 31, 2025:

The Company had the following activity for its allowance for credit losses from December 31, 2024 to June 30, 2025:

(in millions)

2 unchanged sentences

Write-offs charged against the allowance ( 39.9 )

Balance as of March 31, 2025

Balance as of June 30, 2025

SOMNIGROUP INTERNATIONAL INC.

7 unchanged sentences

The fair values of these material financial instruments are as follows:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

2029 Senior Notes $ 765.2 $ 739.1

7 unchanged sentences

Additionally, cost of sales include royalties that the Company pays to other entities for the use of their names on products produced by the Company.

Royalty expense is not material to the Company's Condensed Consolidated Statements of (Loss) Income.

Royalty expense is not material to the Company's Condensed Consolidated Statements of Income.

Prior to the Mattress Firm Acquisition, the Company recorded retail store occupancy costs in selling and marketing expenses.

For the three months ended March 31, 2024, retail store occupancy costs of $ 38.3 million were reclassified to cost of sales in the accompanying consolidated financial statements and notes thereto to conform to the current period presentation.

For the three and six months ended June 30, 2024, retail store occupancy costs of $ 36.7 million and $ 74.9 million, respectively, were reclassified to cost of sales in the accompanying consolidated financial statements and notes thereto to conform to the current period presentation.

(h) Vendor Incentives.

12 unchanged sentences

(2) Net Sales

The following table presents the Company's disaggregated revenue by channel and geographical region, including a reconciliation of disaggregated revenue by segment, for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

(in millions) Tempur Sealy North America Tempur Sealy International Mattress Firm Consolidated Tempur Sealy North America Tempur Sealy International Mattress Firm Consolidated

8 unchanged sentences

Substantially all revenue is associated with bedding product sales.

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

(in millions) Tempur Sealy North America Tempur Sealy International Mattress Firm Consolidated Tempur Sealy North America Tempur Sealy International Mattress Firm Consolidated

Wholesale $ 1,118.5 $ 222.9 $ — $ 1,341.4 $ 1,631.7 $ 204.6 $ — $ 1,836.3

Direct 226.1 375.5 1,542.5 2,144.1 247.8 338.9 — 586.7

Net sales $ 1,344.6 $ 598.4 $ 1,542.5 $ 3,485.5 $ 1,879.5 $ 543.5 $ — $ 2,423.0

Tempur Sealy North America Tempur Sealy International Mattress Firm Consolidated Tempur Sealy North America Tempur Sealy International Mattress Firm Consolidated

Geographical region

United States $ 1,221.4 $ — $ 1,542.5 $ 2,763.9 $ 1,736.4 $ — $ — $ 1,736.4

All other 123.2 598.4 — 721.6 143.1 543.5 — 686.6

Net sales $ 1,344.6 $ 598.4 $ 1,542.5 $ 3,485.5 $ 1,879.5 $ 543.5 $ — $ 2,423.0

Substantially all revenue is associated with bedding product sales.

SOMNIGROUP INTERNATIONAL INC.

11 unchanged sentences

The Company accounted for this transaction as a business combination in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations .

Mattress Firm's financial results for the period from February 5, 2025 through March 31, 2025 (the "stub period") are included in the Company's Condensed Consolidated Financial Statements for the three months ended March 31, 2025.

Mattress Firm's financial results for the periods from April 1, 2025 through June 30, 2025 and February 5, 2025 through June 30, 2025 (the "stub period") are included in the Company's Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025, respectively.

On May 1, 2025, the Company completed the previously announced divestiture of 73 Mattress Firm retail locations and the Company's Sleep Outfitters subsidiary, which includes 103 specialty mattress retail locations and seven distribution centers to MW SO Holdings Company, LLC ("Mattress Warehouse").

The Company does not expect the divestiture to have a material impact on its results of operations.

In the three months ended June 30, 2025, the Company recorded a $ 13.9 million loss on disposal of business associated with the divestiture, net of proceeds of $ 9.0 million.

The Company does not expect the divestiture to have a material impact on its results of operations for the twelve months ended December 31, 2025.

The divestiture of Sleep Outfitters was not classified as assets and liabilities held for sale in the Company's Consolidated Balance Sheets as of December 31, 2024 due to the Mattress Firm Acquisition being contingent upon regulatory approval and the potential for the Company's plan of divestiture to change.

The divestiture of Sleep Outfitters was classified as assets and liabilities held for sale within the Tempur Sealy North America segment, and the divestiture of 73 Mattress Firm retail locations was classified as assets and liabilities held for sale within the Mattress Firm segment, both of which are included in the Company's accompanying Condensed Consolidated Balance Sheets as of March 31, 2025.

Preliminary Purchase Price Consideration

17 unchanged sentences

The components of the preliminary purchase price allocation are as follows:

(in millions) February 5, 2025

(in millions) Initial Allocation of Consideration Measurement

Adjustments Updated Preliminary Allocation

Accounts receivable, net $ 43.1 $ ( 1.6 ) $ 41.5

20 unchanged sentences

Total consideration transferred $ 5,418.7 $ ( 10.5 ) $ 5,408.2

(1) Represents valuation adjustments to operating leases and property and equipment during the measurement period.

(2) Represents the income tax effect for the preliminary purchase price allocation adjustments.

The fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available to management at the time the unaudited condensed consolidated financial statements were prepared.

The Company will finalize the valuation and complete the purchase price allocation as soon as practical, but no later than the measurement period of one year from the Mattress Firm Acquisition date.

The most significant open items included the estimation of certain long-lived assets and the accounting for income taxes as management is awaiting additional information to complete its assessment of these matters.

The most significant open items include the estimation of certain long-lived assets and the accounting for income taxes as management is awaiting additional information to complete its assessment of these matters.

Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date.

9 unchanged sentences

Transaction Costs

The Company incurred $ 50.2 million and $ 14.8 million of transaction costs related to the Mattress Firm Acquisition during the three months ended March 31, 2025 and 2024, respectively.

The Company incurred an immaterial amount of transaction costs related to the Mattress Firm Acquisition during the three months ended June 30, 2025, and $ 7.3 million in the three months ended June 30, 2024.

The Company incurred $ 50.2 million of transaction costs related to the Mattress Firm Acquisition during the six months ended June 30, 2025 compared to $ 22.1 million in the six months ended June 30, 2024.

Transaction costs primarily included legal and professional fees associated with the Mattress Firm Acquisition.

Consolidated Results of Operations

The business acquired in the Mattress Firm Acquisition contributed revenue of $ 593.7 million and net income of $ 0.8 million for the three months ended March 31, 2025.

The business acquired in the Mattress Firm Acquisition contributed revenue of $ 948.8 million and $ 1,542.5 million for the three and six months ended June 30, 2025, respectively and contributed net income of $ 52.3 million and $ 53.1 million for the three and six months ended June 30, 2025, respectively.

Unaudited Pro Forma Financial Information

1 unchanged sentence

Pro forma results do not include the effect of any future synergies anticipated to be achieved from the acquisition, and accordingly, are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the date indicated or that may result in the future.

Three Months Ended March 31,

(unaudited) (unaudited)

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2024 2025 2024

Pro forma net sales $ 1,880.8 $ 1,994.4 $ 3,752.6 $ 3,919.6

Pro forma net loss $ ( 241.1 ) $ ( 33.7 )

Pro forma net income (loss) $ 99.0 $ 117.3 $ ( 129.8 ) $ 83.6

SOMNIGROUP INTERNATIONAL INC.

2 unchanged sentences

The pro forma amounts have been calculated after applying the Company’s accounting policies and by including the results of Mattress Firm, and adjusting the combined results to give effect to the following, as if the acquisition had been consummated on January 1, 2024, together with the consequential tax effects thereon:

Three Months Ended March 31,

(in millions) 2025 2024

(unaudited) Three months ended Six months ended

(in millions) June 30, 2024 June 30, 2025 June 30, 2024

Pro Forma Adjustments to Net Sales, as Reported:

2 unchanged sentences

Total adjustments to net sales $ 760.8 $ 267.1 $ 1,496.6

Pro Forma Adjustments to Net (Loss) Income, as Reported:

Mattress Firm pre-acquisition (loss) earnings (1)

Pro Forma Adjustments to Net Income (Loss), as Reported:

Mattress Firm pre-acquisition earnings (loss) (1)

$ 32.2 $ ( 318.3 ) $ 51.3

9 unchanged sentences

7.0 ( 20.4 ) 27.4

Total adjustments to net loss $ ( 208.0 ) $ ( 110.0 )

(1) For the three months ended March 31, 2025, Mattress Firm pre-acquisition loss included a one-time charge of $ 340.5 million related to stock-based compensation expense recognized when the Mattress Firm Acquisition became probable.

Total adjustments to net income (loss) $ 11.2 $ ( 195.7 ) $ ( 98.8 )

(1) For the six months ended June 30, 2025, Mattress Firm pre-acquisition loss included a one-time charge of $ 340.5 million related to stock-based compensation expense recognized when the Mattress Firm Acquisition became probable.

(2) Represents $ 50.2 million of transaction costs for professional fees incurred by the Company in connection with the Mattress Firm Acquisition, which were reclassified to the prior year presented in accordance with ASC 805.

2 unchanged sentences

(5) Represents the net effect of interest expense on borrowings associated with the Mattress Firm Acquisition.

(6) Represents the income tax (provision) benefit for the above pro forma adjustments, which applies an estimated blended statutory income tax rate of 25.0 %.

(6) Represents the income tax benefit (provision) for the above pro forma adjustments, which applies an estimated blended statutory income tax rate of 25.0 %.

The following summarizes changes to the Company's goodwill, by segment:

3 unchanged sentences

Foreign currency translation and other 4.1 38.4 — 42.5

Balance as of March 31, 2025 $ 601.0 $ 476.6 $ 3,473.0 $ 4,550.6

Balance as of June 30, 2025 $ 607.2 $ 502.0 $ 3,476.0 $ 4,585.2

SOMNIGROUP INTERNATIONAL INC.

2 unchanged sentences

Debt for the Company consists of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in millions, except percentages) Amount Rate Amount Rate Maturity Date

14 unchanged sentences

Total long-term debt, net $ 4,803.3 $ 3,740.4

(1) Interest at SOFR index plus 10 basis points of credit spread adjustment, plus applicable margin of 1.250 % as of March 31, 2025 and December 31, 2024.

(2) Interest at SOFR index plus applicable margin of 2.500 % as of March 31, 2025 and December 31, 2024.

(1) Interest at SOFR index plus 10 basis points of credit spread adjustment, plus applicable margin of 1.625 % as of June 30, 2025.

(2) Interest at SOFR index plus 10 basis points of credit spread adjustment, plus applicable margin of 1.250 % as of December 31, 2024.

(3) Term B Interest at SOFR index plus applicable margin of 2.250 % as of June 30, 2025.

(4) Term B Interest at SOFR index plus applicable margin of 2.500 % as of December 31, 2024.

(5) Interest at one month SOFR index plus 10 basis points of credit spread adjustment, plus 85 basis points.

(6) New finance lease obligations are a non-cash financing activity.

As of March 31, 2025, the Company was in compliance with all applicable debt covenants.

As of June 30, 2025, the Company was in compliance with all applicable debt covenants.

2023 Credit Agreement

18 unchanged sentences

In addition, approximately $ 1,592.0 million of proceeds in respect of the Term B Loan were released from escrow.

The proceeds of these financings were collectively used to fund a portion of the cash consideration for the acquisition, the repayment of Mattress Firm's debt and the payment of certain fees and expenses related to the acquisition.

The Company had outstanding borrowings of $ 481.0 million under the revolving credit facility as of March 31, 2025.

Total availability under the revolving facility was $ 708.3 million, after a $ 0.7 million reduction for outstanding letters of credit, as of March 31, 2025.

The proceeds of these

financings were collectively used to fund a portion of the cash consideration for the acquisition, the repayment of Mattress Firm's debt and the payment of certain fees and expenses related to the acquisition.

On June 24, 2025, the Company and certain other parties thereto entered into an Amendment No.

4 ("Amendment No.

4") to the Company's 2023 Credit Agreement.

Amendment No.

4 repriced the Company's existing Term B Loan due October 2031 by reducing the applicable margin on the Term B Loan by 0.25 % to (i) a base rate plus an applicable margin of 1.25 %, (ii) a Term SOFR rate plus an applicable margin of 2.25 % or (iii) a Daily Simple SOFR rate plus an applicable margin of 2.25 %, subject, in each case, to an additional 0.25 % rate reduction based on the Company's consolidated total leverage ratio.

In connection with the repricing, the Company prepaid $ 100.0 million of the outstanding Term B Loan (including accrued and unpaid interest in respect thereof) with cash proceeds from a borrowing under the revolving credit facility under the 2023 Credit Agreement.

The repriced Term B Loan is subject to a prepayment premium in connection with certain repricing transactions that may occur on or prior to the six-month anniversary of Amendment No.

The Company had outstanding borrowings of $ 481.5 million under the revolving credit facility as of June 30, 2025.

Total availability under the revolving facility was $ 707.7 million, after a $ 0.8 million reduction for outstanding letters of credit, as of June 30, 2025.

Securitized Debt

The Company and certain of its subsidiaries are party to a securitization transaction with respect to certain accounts receivable due to the Company and certain of its subsidiaries (as amended, the "Accounts Receivable Securitization").

As of March 31, 2025, there was no availability under the Accounts Receivable Securitization.

As of June 30, 2025, there was no availability under the Accounts Receivable Securitization.

While subject to a $ 150.0 million overall limit, the availability of revolving loans varies over the course of the year based on the seasonality of the Company's accounts receivable.

Future Obligations

As of June 30, 2025, the scheduled maturities of long-term debt outstanding, excluding finance lease obligations, for each of the next five years and thereafter are as follows:

(in millions)

Remainder of 2025 $ 56.4

Thereafter 2,262.4

(1) Total future obligations excludes $ 35.1 million of outstanding letters of credit issued by various financial institutions, including $ 0.8 million associated with the 2023 Credit Facility.

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

(6) Stockholders' Equity

(a) Treasury Stock.

As of March 31, 2025, the Company had approximately $ 774.5 million remaining under its share repurchase authorization.

The Company did not repurchase shares under the program during the three months ended March 31, 2025 or 2024, respectively.

In addition, the Company acquired 0.7 million and 0.9 million shares upon the vesting of certain restricted stock units ("RSUs") and performance restricted stock units ("PRSUs"), which were withheld to satisfy tax withholding obligations during each of the three months ended March 31, 2025 and 2024, respectively.

The shares withheld were valued at the closing price of the stock on the New York Stock Exchange on the vesting date or first business day prior to vesting, resulting in $ 37.5 million and $ 43.8 million in treasury stock acquired during the three months ended March 31, 2025 and 2024, respectively.

As of June 30, 2025, the Company had approximately $ 774.5 million remaining under its share repurchase authorization.

The Company did not repurchase shares under the program during the three and six months ended June 30, 2025 or 2024.

In addition, the Company acquired 1.4 million and an insignificant amount of shares upon the exercise of stock options, the vesting of certain restricted stock units ("RSUs") and performance restricted stock units ("PRSUs"), which were withheld to satisfy tax withholding obligations during the three months ended June 30, 2025 and 2024, respectively.

The shares withheld were valued at the closing price of the stock on the New York Stock Exchange on the vesting date or first business day prior to vesting, resulting in $ 94.9 million in treasury stock acquired during the three months ended June 30, 2025, and an immaterial amount for the three months ended June 30, 2024.

The Company acquired 2.1 million and 0.9 million shares during the six months ended June 30, 2025 and 2024, respectively, resulting in $ 132.4 million and $ 43.8 million for the six months ended June 30, 2025 and 2024, respectively.

(b) Accumulated Other Comprehensive Loss ("AOCL").

AOCL consisted of the following:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions) 2025 2024 2025 2024

8 unchanged sentences

Net change from period revaluations (2)

— — 0.6 ( 0.3 )

Balance at end of period $ 1.0 $ ( 1.5 ) $ 1.0 $ ( 1.5 )

1 unchanged sentence

(2) In 2025 and 2024, there were no tax impacts related to pension adjustments.

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

(7) Other Items

1 unchanged sentence

Accrued expenses and other current liabilities consisted of the following:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Wages and benefits $ 145.7 $ 81.7

5 unchanged sentences

$ 692.0 $ 393.9

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

(8) Stock-Based Compensation

The Company's stock-based compensation expense for the three months ended March 31, 2025 and 2024 included PRSUs, RSUs and non-qualified stock options.

The Company's stock-based compensation expense for the three and six months ended June 30, 2025 and 2024 included PRSUs, RSUs and non-qualified stock options.

A summary of the Company's stock-based compensation expense is presented in the following table:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2024 2025 2024

6 unchanged sentences

During the first quarter of 2025, the Company granted PRSUs as a component of the long-term incentive plan ("2025 PRSUs").

The Company has recorded stock-based compensation expense related to the 2025 PRSUs during the three months ended March 31, 2025, as it was probable that the Company would achieve the specified performance targets for the performance period.

The Company has recorded stock-based compensation expense related to the 2025 PRSUs during the three and six months ended June 30, 2025, as it was probable that the Company would achieve the specified performance targets for the performance period.

(9) Commitments and Contingencies

5 unchanged sentences

(10) Income Taxes

The Company's effective tax rates for the three months ended March 31, 2025 and 2024 were 33.5 % and 21.2 %, respectively.

The Company's effective tax rates for the three months ended March 31, 2025 and 2024 differed from the U.S.

The Company's effective tax rates for the three months ended June 30, 2025 and 2024 were 3.1 % and 24.2 %, respectively.

The Company's effective tax rates for the six months ended June 30, 2025 and 2024 were ( 24.9 )% and 23.0 %, respectively.

The Company's effective tax rates for the three and six months ended June 30, 2025 and 2024 differed from the U.S.

federal statutory rate of 21.0% principally due to subpart F income (i.e., global intangible low-taxed income, or "GILTI," earned by the Company's foreign subsidiaries), foreign income tax rate differentials, state and local taxes, changes in the Company's uncertain tax positions, the excess tax benefit related to stock-based compensation and certain other permanent items.

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

The OECD (Organization for Economic Co-operation and Development) has proposed a global minimum effective tax of 15.0% on income arising in each jurisdiction ("Pillar 2") that has been agreed upon in principle by over 140 countries.

3 unchanged sentences

In 2025, the Company does not expect Pillar 2 to have a material impact on its financial results.

On July 4, 2025, the Tax Act was signed into law.

While the Tax Act has multiple provisions that may impact the Company, guidance on the potentially relevant provisions has not been released by Congress or the Treasury department.

As such, it is unclear at this time what, if any, impact the Tax Act will have on the Company's income tax rate and associated financial results.

The Company will continue to evaluate the impact as further information becomes available.

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

(11) Earnings Per Common Share

The following table sets forth the components of the numerator and denominator for the computation of basic and diluted earnings per share for net income attributable to Somnigroup International Inc.:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

(in millions, except per common share amounts) 2025 2024 2025 2024

Net (loss) income attributable to Somnigroup International Inc.

Net income attributable to Somnigroup International Inc.

$ 99.0 $ 106.1 $ 65.9 $ 182.4

2 unchanged sentences

Denominator for diluted earnings per common share-adjusted weighted average shares 212.4 178.0 205.7 178.0

Basic (loss) earnings per common share $ ( 0.17 ) $ 0.44

Diluted (loss) earnings per common share $ ( 0.17 ) $ 0.43

Basic earnings per common share $ 0.47 $ 0.61 $ 0.33 $ 1.05

Diluted earnings per common share $ 0.47 $ 0.60 $ 0.32 $ 1.02

The Company excludes shares issuable upon exercise of outstanding stock options from the diluted earnings per common share computation because their exercise price was greater than the average market price of Somnigroup International Inc.'s common stock or they were otherwise anti-dilutive.

As a result, the Company excluded an immaterial amount of shares for the three months ended March 31, 2025 and 2024.

As a result, the Company excluded an immaterial amount of shares for the three and six months ended June 30, 2025, and an immaterial amount of shares for the three and six months ended June 30, 2024.

Holders of non-vested stock-based compensation awards do not have voting rights but do participate in dividend equivalents distributed upon the award vesting.

10 unchanged sentences

Inter-segment sales are made primarily at prices that approximate market-based selling prices.

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

The following table summarizes total assets by segment:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Tempur Sealy North America $ 5,970.9 $ 5,575.2

4 unchanged sentences

Total assets $ 11,376.2 $ 5,980.4

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

The following table summarizes property, plant and equipment, net, by segment:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Tempur Sealy North America $ 628.2 $ 687.7

4 unchanged sentences

The following table summarizes operating lease right-of-use assets by segment:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Tempur Sealy North America $ 341.2 $ 407.1

3 unchanged sentences

Total operating lease right-of-use assets $ 1,840.3 $ 598.8

The following table summarizes segment information for the three months ended June 30, 2025:

(in millions) Tempur Sealy North America Tempur Sealy International Mattress Firm Corporate Eliminations Consolidated

Net sales $ 638.4 $ 293.6 $ 948.8 $ — $ — $ 1,880.8

Inter-segment sales 263.5 0.1 — — ( 263.6 ) —

Total net sales and inter-segment sales $ 901.9 $ 293.7 $ 948.8 $ — $ ( 263.6 ) $ 1,880.8

Inter-segment royalty expense (income) 11.1 ( 11.1 ) — — — —

Gross profit 348.2 141.6 337.4 — — 827.2

Advertising expense 103.3 24.1 62.1 — — 189.5

Other selling and marketing expense 64.0 50.9 151.8 4.3 — 271.0

General, administrative and other expenses 41.0 29.8 56.2 48.9 — 175.9

Loss on disposal of business 9.8 — 4.1 — — 13.9

Equity income in earnings of unconsolidated affiliates — ( 3.0 ) — — — ( 3.0 )

Operating income (loss) 130.1 39.8 63.2 ( 53.2 ) — 179.9

Interest expense, net 72.5

Other expense, net 4.7

Income before income taxes 102.7

Depreciation and amortization (1)

$ 30.2 $ 7.7 $ 17.9 $ 12.8 $ — $ 68.6

Capital expenditures 3.3 7.9 23.6 1.9 — 36.7

(1) Depreciation and amortization includes stock-based compensation amortization expense.

SOMNIGROUP INTERNATIONAL INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

The following table summarizes segment information for the three months ended March 31, 2025:

The following table summarizes segment information for the three months ended June 30, 2024:

(in millions) Tempur Sealy North America Tempur Sealy International Corporate Eliminations Consolidated

Net sales $ 978.4 $ 255.2 $ — $ — $ 1,233.6

Inter-segment sales 0.2 — — ( 0.2 ) —

Total net sales and inter-segment sales $ 978.6 $ 255.2 $ — $ ( 0.2 ) $ 1,233.6

Inter-segment royalty expense (income) 9.3 ( 9.3 ) — — —

Gross profit 393.7 123.9 — — 517.6

Advertising expense 98.5 20.8 — — 119.3

Other selling and marketing expense 69.1 47.0 4.2 — 120.3

General, administrative and other expenses 45.7 27.4 34.7 — 107.8

Equity income in earnings of unconsolidated affiliates — ( 3.1 ) — — ( 3.1 )

Operating income (loss) 180.4 31.8 ( 38.9 ) — 173.3

Interest expense, net 33.4

Other income, net ( 0.6 )

Income before income taxes 140.5

Depreciation and amortization (1)

$ 31.5 $ 6.7 $ 11.8 $ — $ 50.0

Capital expenditures 16.0 8.9 3.6 — 28.5

(1) Depreciation and amortization includes stock-based compensation amortization expense.

SOMNIGROUP INTERNATIONAL INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

The following table summarizes segment information for the six months ended June 30, 2025:

(in millions) Tempur Sealy North America Tempur Sealy International Mattress Firm Corporate Eliminations Consolidated

7 unchanged sentences

General, administrative and other expenses 89.1 60.5 105.5 130.3 — 385.4

Loss on disposal of business 9.8 — 4.1 — — 13.9

Equity income in earnings of unconsolidated affiliates — ( 7.8 ) — — — ( 7.8 )

1 unchanged sentence

Interest expense, net 133.8

Other expense, net 1.2

Income (loss) before income taxes 39.1 52.5 9.2 ( 150.1 ) — ( 49.3 )

Other income, net 5.9

Income before income taxes 53.4

Depreciation and amortization (1)

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (unaudited) (continued)

The following table summarizes segment information for the three months ended March 31, 2024:

The following table summarizes segment information for the six months ended June 30, 2024:

(in millions) Tempur Sealy North America Tempur Sealy International Corporate Eliminations Consolidated

11 unchanged sentences

Other income, net ( 0.9 )

Income (loss) before income taxes 131.4 47.7 ( 81.6 ) — 97.5

Income before income taxes 238.0

Depreciation and amortization (1)

4 unchanged sentences

(in millions)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

United States

4 unchanged sentences

The following table summarizes operating lease right-of-use assets by geographic region:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

United States $ 1,611.0 $ 401.0

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements