UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 13, 2006
TEMPUR-PEDIC INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-31922 | 33-1022198 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
1713 Jaggie Fox Way
Lexington, Kentucky 40511
(Address of principal executive offices) (Zip Code)
(800) 878-8889
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 701. Regulation FD Disclosure
Attached as Exhibit 99.1 to this report and furnished under this Item 7.01 are copies of slides to be used in investor presentations by Tempur-Pedic International Inc.
The information in this report (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit | Description | |
| 99.1 | Tempur-Pedic International Inc. March 2006 Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 13, 2006
| Tempur-Pedic International Inc. | ||
| By: |
/s/ Robert B. Trussell, Jr. | |
| Name: |
Robert B. Trussell, Jr. | |
| Title: |
Chief Executive Officer | |
EXHIBIT INDEX
| Exhibit | Description | |
| 99.1 | Tempur-Pedic International Inc. March 2006 Presentation |
Exhibit 99.1
TEMPUR-PEDIC®
Investor Presentation
March 2006
TPX LISTED NYSE.
TEMPUR-PEDIC®
PRESSURE RELIEVING
SWEDISH MATTRESSES AND PILLOWS
Changing the way the world sleeps!™
Forward-Looking Statements
This presentation may contain “forward-looking statements” which include information concerning the Company’s plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. When used in this presentation, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including without limitation, initiatives to increase sales, the rollout and market acceptance of new products, initiatives to generate productivity improvements and reduce costs, the Company’s intention to repurchase shares of its common stock from time to time under its share repurchase program, and management’s expectations regarding its net sales, pro forma and GAAP net income and capital expenditures for 2006, are based upon current expectations and beliefs and various assumptions. There can are be no assurance that the Company will realize these expectations or that these beliefs will prove correct.
There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained in this presentation. Numerous factors, many of which are beyond the Company’s control, could cause actual results to differ materially from those expressed as forward-looking statements. These risk factors include general economic and industry conditions and consumer confidence; uncertainties arising from global events; consumer acceptance of the Company’s products; industry competition; the efficiency and effectiveness of the Company’s advertising campaigns and other marketing programs; the Company’s ability to further penetrate the US retail furniture channel, including the timing of opening or expanding within large retail accounts; the Company’s ability retail to continuously improve its product line, maintain efficient, timely and cost-effective production and delivery of its products, and manage its growth; rising commodity costs; the market price for the Company’s common stock prevailing from time to time; and the nature of other investment opportunities presented to the Company from time to time. Additional information concerning these and other risks and uncertainties are discussed in the Company’s filings with the Securities and Exchange Commission, including without limitation the Company’s annual report on Form 10-K under the headings “Special Note Regarding Forward-Looking Statements” and “Risk Factors”. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statements for any reason, including to reflect events or circumstances after the date on which such reason, statements are made or to reflect the occurrence of anticipated or unanticipated events or circumstances.
Non-GAAP Financial Information
This presentation includes certain “non-GAAP financial measures”, including pro forma net income per share. Information relating to these non-GAAP financial measures, including a presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and a reconciliation of the differences between presented the non-GAAP financial measures and the most directly comparable financial measures calculated and presented in accordance with GAAP, are included at the end of this presentation.
TEMPUR-PEDIC®
International Inc.
TEMPUR-PEDIC®
International Inc.
Tom Bryant
President
TEMPUR-PEDIC®
International Inc.
2
Business Review
Leading producer of premium mattresses and pillows
Proprietary formula and manufacturing process
#1 visco-elastic market share
Highest profitability in our industry
Global sales under the “TEMPUR™” and “Tempur-Pedic™” trademarks
Truly international with sales in 60 countries through 4 diverse channels
39% CAGR in the four years ending December 31, 2005
22% growth in 2005
Premium segment (>$1,000) of ~$12 billion global wholesale mattress market
Believe premium represents ~50% of the U.S. market
Fastest-growing segment
TEMPURTM products provide greater overall comfort and better quality sleep
Temperature-sensitive and contours more naturally to the body
Recommended by more than 25,000 healthcare professionals
TEMPUR-PEDIC®
International Inc.
3
Seasoned Management Team
Name
Position
Prior Experience
Prior Experience Consumer Products
Inter’l
Bob Trussell
Tom Bryant
Dale Williams
Matt Clift
David Montgomery
CEO, Founder
President
CFO
EVP, Operations
EVP, International
Founded Tempur-Pedic 1992
Extensive entrepreneurial career
CEO, Stairmaster Sports & Medical Products
President, Dunlop Maxfli
Johnson & Johnson (13 years)
CFO, Honeywell Control Products
CFO, Saga Systems
CFO, GE Information Services; (15 years at GE)
VP/GM Lexmark International
Lexmark/IBM (23 years)
President, Rubbermaid Europe
VP, Black & Decker Europe, Middle East, Africa
TEMPUR-PEDIC®
International Inc.
4
Product Overview
TEMPUR-PEDIC®
International Inc.
5
Tempur-Pedic Swedish Sleep System
Therapeutic Benefits
Excellent Pressure & Pain Management
Manages pressure over the entire mattress surface
Open Cell Technology
Unlike water, air and foam products, Tempur material promotes airflow
Body Conforming & Support
Neck and spine supported in the correct anatomical position
Safe and Healthy
Antimicrobial and hypoallergenic
Resistant to dust mites, household allergens and mold
Maintenance Free
Never needs to be turned or serviced
TEMPUR-PEDIC®
International Inc.
6
Diversity Across Products
Mattresses
2005 Sales: $566.5 million (68% of Total)
Queen Retail Price Point: $1,199 – $3,199
| Pillows |
|
2005 Sales: $126.2 million (15% of Total)
Retail Price: $70 – $165
Adjustable Beds / Other
2005 Sales: $144.0 million (17% of Total)
Retail Price:
Adjustable Beds: $1,300 – $2,800
Other: $35 – $150
TEMPUR-PEDIC®
International Inc.
7
Extending Our Product Line
The RhapsodyBed by Tempur-Pedic™
Features Tempur HD™ - latest formulation
Cover features micro-fiber suede sides and TEMPUR-Tex™
Queen SRP: $2,399
Shipping ~April ‘06
The GrandBed by Tempur-Pedic™
7 layer mattress featuring Tempur-HD™
New level of luxury with silk-blended cover
Queen SRP: $5,499
Shipping ~April ‘06
TEMPUR-PEDIC®
International Inc.
8
Vertically Integrated Business Model
TEMPUR-PEDIC®
International Inc.
9
Manufacturing Facilities
Denmark (500K sq ft)
Duffield, VA (500K sq ft)
Global, vertically integrated manufacturer
State of the art, highly automated, ISO-certified plants
>$200 million invested
Albuquerque, NM (750K sq ft)
Note: New Mexico facility under construction and expected to open by year end 2006
10
Brand Building
TEMPUR-PEDIC®
International Inc.
11
Cost Effective Advertising to Build Global Brand
Tempur-Pedic’s national advertising campaign drives over 4.3 billion consumer “impressions” per month
Television
> 2.8 billion “impressions” per month
High profile events: The Apprentice, Oscar’s, Emmy’s, Grammy’s
CNN
DISCOVERY.
TLC LIFE UNSCRIPTED
abc family
E
Magazines
> 900 million “impressions” per month
Better Homes and Gardens®
Consumers Digest Online
Forbes
Newsweek
U.S.News
a WORLD REPORT
Radio
> 600 million “impressions” per month
Includes national spots on such shows as: The Radio Factor with Bill O’Reilly, Westwood One, Dr. Laura, Dr. Joy Browne and WOR with John Gambling
Newspapers
> 80 million “impressions” per month
THE WALL STREET JOURNAL
USA TODAY
TEMPUR-PEDIC®
International Inc.
12
Continue to Build Global Brand
Clear, product-oriented advertising and credible consumer endorsement communicate the Tempur-Pedic proposition
Better Sleep Better Health Better Bed
The Weightless Comfort of Tempur-Pedic!
In a recent survey, 92% of our enthusiastic owners report sleeping better and waking more refreshed!
Our sleep technology is recognized by NASA and raved about by the media. And ours is the only mattress recommended worldwide by more than 25,000 medical professionals.
Yet this miracle has to be felt to be believed.
While the thick, arrale pads that cover most mattresses are necessary to keep the hard steel springs inside, they create a hammock effect outside—and can actually cause pressure points. Inside our bed, billions of microporoscopic memory cells function as “molecular springs” that contour precisely to your every curve and angle.
Tempur-Pedic’s Swedish scientists used NASA’s early anti-G-force research in invest Temper” pressure relieving material—a remarkable new kind of viscoelastic bedding that rerrcly in body mass and temperature. It automatically adjusts to your exact shape and weight. And it’s the reason why millions of Americans are falling in love with the first really new bed in 75 years our high tech Weightless Sleep marvel.
No wonder, 9 out of 10 enthusiastic Tempur-Pedic owners go out of their way to recommend our Swedish Sleep System to friends and family. Please telephone us toll-free, without the slightest obligation, for your FREE DEMONSTRATION KIT.
TEMPUR-PEDIC®
PRESSURE RELIEVING
SWEDISH MATTERESSES AND PILLOWS
Changing the way the world sleeps
FREE VIDEO/FREE SAMPLE/FREE INFO
800-955-4051
Call today or send fax 866-795-9367
I’ve slept on air, springs, water and memory foams...
nothing beats my Tempur-Pedic!
Often imitated.. never duplicated…
Tempur-Pedic makes other beds obsolete…
You’ve got to feel this miracle to believe it!
You’ll enjoy luxurious comfort and rejuvenating sleep—like you’ve never experienced before with Tempur-Pedic’s breakthrough technology.
Utilizing the natural principals of physics this bed gives you the energizing lift of “weightless” sleep. Unlike the thick padding and steel springs of conventional mattresses—that can actually cause painful pressure points—inside this bed billions of memory cells absorb and redistribute your weight. No settings or controls, no heated water, no bottoming out on inferior foam. Temur-Pedie has only one moving part—YOU!
Using NASA’s anti-G-force research, our scientists perfected TEMPUR’ pressure-relieving material—a remarkable viscoelastic sleep surface that reacts to you—using your body’s weight and temperature. It automatically conforms to your exact shape—surrounding you in extraordinary comfort…every time you lie down…in any position.
Contouring precisely to your every curve… your muscles relax… you’re perfectly supported... you’re snuggled into a customized cradle of deep sleep with less disturbance…and you wake totally refreshed in the morning.
No wonder, Tempur-Pedic is the first mattress to be commended by the Arthritis Foundation and the ONLY one recommended worldwide by more than 25,000 medical professionals.
TEMPUR-PEDIC®
PRESSURE RELIEVING
SWEDISH MATTERESSES AND PILLOWS
Changing the way the world sleeps
© Copyright 2005 by Tempur-Pedic Direct Response, Inc. All Rights Reserved. Purchase components not included.
Free Sample Free info Free Tryout Certificate
Call Now for your FREE DEMO KIT!
888-241-2111
Call toll-free or send a fax 866-795-9367
TEMPUR-PEDIC®
International Inc.
13
Recommending Tempur-Pedic
Almost all of our customers have recommended Tempur-Pedic, with about two-thirds reporting that they recommended Tempur-Pedic one to five times.
42% of retail customers report that someone purchased a Tempur-Pedic mattress as a result of their recommendation.
100%
80%
60%
40%
20%
0%
95%
Recommended Tempur-Pedic
65%
1-5 times
18%
6-10 times
17%
11+ times
42%
Purchase resulted from recommendation
Source: Independent survey commissioned by Tempur-Pedic
14
Retailer Feedback on Tempur-Pedic
Tempur-Pedic commissioned recent third party survey of mattress retailers. Retailers provided wide-ranging feedback on variety of issues, including the following:
Tempur-Pedic is the brand with the highest profit margins
Brand consumers ask about most
Easiest brand to sell
Retailers generate significantly more of their total sales from Tempur-Pedic than its relative floor space
Original Bed has generated additional sales
TEMPUR-PEDIC®
International Inc.
15
TEMPUR-PEDIC®
International Inc.
Dale Williams
SVP and Chief Financial Officer
TEMPUR-PEDIC®
International Inc.
16
Mattresses Key Growth Driver
Established Accounts + Targeted New Stores
Increasing slots per store
Growing brand awareness
31% Growth in ‘05
Mattress Revenues
($ in millions)
$600
$550
$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
48% 4 Yr CAGR
$116.8
$156.0
$268.2
$433.3
$566.5
2001
2002
2003
2004
2005
Notes:
1. Growth in the first half of 2005 was much higher than growth in the second half of 2005.
2. For a complete discussion of the Company’s financial performance for 2005, please refer to the Management’s Discussion and Analysis section of the Company’s Form 10K for 2005
TEMPUR-PEDIC®
International Inc.
17
Growing Net Sales and Profitability
Historical Net Sales
($ in millions)
Net Sales
$800
$700
$600
$500
$400
$300
$200
$100
$0
39% 4 Yr CAGR
$221.5
$298.0
$479.1
$684.9
$836.7
2001
2002
2003
2004
2005
Historical Operating Income(1)
($ in millions)
Operating Income
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
58% 4 Yr CAGR
$30.4
$39.4
$97.1
$151.0
$190.9
2001
2002
2003
2004
2005
1. Includes $9.8 million in non-cash charges for the two months ended December 31, 2002 relating to the step-up in inventory as of November 1, 2002 relating to the Tempur acquisition. The year ended December 31, 2003 includes $4.1 million in compensation expense relating to stock option grants and acceleration. 2004 includes $5.4 million in compensation expense relating to stock option grants and acceleration and $0.9 million in fees related to secondary offering. 2005 includes $2.4 million in compensation expense relating to stock option grants.
2. For a complete discussion of the Company’s financial performance for 2005, please refer to the Management’s Discussion and Analysis section of the Company’s Form 10K for 2005
TEMPUR-PEDIC®
International Inc.
18
Cash Flow from Operations
Growth of operating cash flows
Business model generates significant operating cash flows
Identified key initiatives to continue to improve cash flow
Operating Cash Flows
($ in millions)
$100
$80
$60
$40
$20
$0
51% 4 Yr CAGR
$19.7
$35.1
$47.0
$77.0
$102.2
2001
2002
2003
2004
2005
Note: For a complete discussion of the Company’s financial performance for 2005, please refer to the Management’s Discussion and Analysis section of the Company’s Form 10K for 2005
TEMPUR-PEDIC®
International Inc.
19
Earnings Per Share Growth
Pro-Forma EPS
$ 1.20
$ 1.00
$ 0.80
$ 0.60
$ 0.40
$ 0.20
$ 0.00
$0.82
$1.07
2004
2005
30% Growth
GAAP EPS
$ 1.20
$ 1.00
$ 0.80
$ 0.60
$ 0.40
$ 0.20
$ 0.00
$0.73
$0.97
2004
2005
33% Growth
Note: For a complete reconciliation of Pro-Forma to GAAP earnings per share, please see reconciliation at end of presentation.
TEMPUR-PEDIC®
International Inc.
20
Investment Highlights
Global footprint
Worldwide brand recognition
Superior product offering
Favorable secular demand trends
Diversified business model
Track record of profitable growth
TEMPUR-PEDIC®
International Inc.
21
Supplemental Information
To further provide investors useful information, pro forma net income is presented and represents the Company’s GAAP net income before income tax expense on repatriation of foreign dividend, income tax benefit from a favorable state tax ruling, non-cash stock-based compensation expense, and loss on debt extinguishment for the twelve months ended December 31, 2005.
The Company believes that excluding the above items provide a measure that is more representative of ongoing costs and therefore more comparable to the Company’s historical operations. The following is a reconciliation of GAAP net income per share to pro forma net income per share.
TEMPUR-PEDIC®
International Inc..
22
Reconciliation of Net Income per Share to Pro forma Net Income per Share
(Amounts are per Share)
Year to Date
GAAP Net Income per Share, Diluted
Income Tax provision on Repatriation
Income Tax benefit on state tax ruling
Stock-based compensation expense
Secondary public offerring expense
Loss on debt extinguishment and transaction expenses, net of tax
Proforma Net Income per Share, Diluted
Dec. 31, 2005
Dec. 31, 2004
$ 0.97
$ 0.73
$ 0.07
$ -
$ (0.01)
$ -
$ 0.02
$ 0.05
$ -
$ 0.01
$ 0.02
$ 0.03
$ 1.07
$ 0.82
23
TEMPUR-PEDIC®
Investor Presentation
March 2006
TPX LISTED NYSE.
TEMPUR-PEDIC®
PRESSURE RELIEVING
SWEDISH MATTRESSES AND PILLOWS
Changing the way the world sleeps!TM