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) April 27, 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 7.01 | Regulation FD Disclosure |
Attached as Exhibit 99.1 to this report and furnished under this Item 7.01 are copies of slides 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. May 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: April 27, 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. May 2006 Presentation | |
 Investor Presentation May 2006 Exhibit 99.1 |
 1 1 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, GAAP net income and capital expenditures for 2006, are based upon current expectations and beliefs and various assumptions. There can 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; the effects of changes in foreign exchange rates on the Company’s reported earnings; 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 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 statements are made or to reflect the occurrence of anticipated or unanticipated events or circumstances. |
 2 2 Tom Bryant CEO & President |
 3 3 Business Review 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 over 70 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 TEMPUR™ 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 |
 4 4 Seasoned Management Team Consumer Name Position Prior Experience Products Inter'l Tom Bryant CEO & President CEO, Stairmaster Sports & Medical Products President, Dunlop Maxfli Johnson & Johnson (13 years) Dale Williams CFO CFO, Honeywell Control Products CFO, Saga Systems CFO, GE Information Services; (15 years at GE) Matt Clift EVP, Operations VP/GM Lexmark International Lexmark/IBM (23 years) David Montgomery EVP, International President, Rubbermaid Europe VP, Black & Decker Europe, Middle East, Africa Prior Experience |
 5 5 Product Overview |
 6 6 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 |
 7 7 Diversity Across Products Diversity Across Products 1Q06 Sales: $40.2 million (18% of Total) Retail Price: – Adjustable Beds: $1,300 – $2,800 – Other: $35 – $150 1Q06 Sales: $28.5 million (12% of Total) Retail Price: $70 – $165 1Q06 Sales: $159.9 million (70% of Total) Queen Retail Price Point: $1,199 – $5,499 Pillows Adjustable Beds / Other Mattresses |
 8 8 Extending Our Product Line The GrandBed by Tempur-Pedic™ 7 layer mattress featuring Tempur-HD™ New level of luxury with silk-blended cover Queen SRP: $5,499 The RhapsodyBed by Tempur-Pedic™ Features Tempur HD™ - latest formulation Cover features micro-fiber suede sides and TEMPUR-Tex™ Queen SRP: $2,399 |
 9 9 Vertically Integrated Business Model |
 10 10 Global, vertically integrated manufacturer State of the art, highly automated, ISO-certified plants >$200 million invested Denmark (500K sq ft) Duffield, VA (500K sq ft) Albuquerque, NM (750K sq ft) Manufacturing Facilities Note: New Mexico facility under construction and expected to open by year
end 2006 |
 11 11 Brand Building |
 12 12 > 80 million “impressions” per month > 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 > 900 million “impressions” per month > 2.8 billion “impressions” per month High profile events: The Apprentice, Oscar’s, Emmy’s, Grammy’s Newspapers Television Radio Magazines Cost Effective Advertising to Build Global Brand Tempur-Pedic’s national advertising campaign drives over 4.3 billion consumer “impressions” per month |
 13 13 Continue to Build Global Brand Total Brand Awareness: 78% up from 60% in two years ___________________________ Note: Total brand awareness for mattresses based on study commissioned by
Tempur-Pedic and completed in the first quarter of each year. |
 14 14 Source: Independent survey commissioned by Tempur-Pedic Almost all of our customers have recommended Tempur-Pedic, with about Almost all of our customers have recommended Tempur-Pedic, with about two-thirds reporting that they recommended Tempur-Pedic one to five times.
two-thirds reporting that they recommended Tempur-Pedic one to five
times. 42% of retail customers report that someone purchased a
Tempur-Pedic 42% of retail customers report that someone purchased a
Tempur-Pedic mattress as a result of their recommendation. mattress as a result of their recommendation. Customer Passion Customer Passion 95% 65% 18% 17% 42% 0% 20% 40% 60% 80% 100% Recommended Tempur-Pedic 1-5 times 6-10 times 11+ times Purchase resulted from recommendation |
 15 15 Retailer Feedback on Tempur-Pedic Retailer Feedback on Tempur-Pedic Tempur-Pedic is the brand with the highest Tempur-Pedic is the brand with the highest profit margins profit margins Brand consumers ask about most Brand consumers ask about most Easiest Easiest brand to sell brand to sell Retailers generate significantly more of their Retailers generate significantly more of their total sales total sales from Tempur-Pedic than its relative from Tempur-Pedic than its relative floor space floor space Tempur-Pedic commissioned recent third party survey of mattress retailers. Retailers
provided wide-ranging feedback on variety of issues, including the
following: |
 16 16 Dale Williams SVP and Chief Financial Officer |
 17 17 $116.8 $156.0 $268.2 $433.3 $566.5 $159.9 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 2004 2004 Mattresses Key Growth Driver Mattresses Key Growth Driver Mattress Revenues 2001 2001 2002 2002 2003 2003 Established Accounts + Targeted Established Accounts + Targeted New Stores New Stores Increasing slots per store Increasing slots per store Growing brand awareness Growing brand awareness 31% Growth in ‘05 31% Growth in ‘05 ($ in millions) 2005 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. For a discussion of the Company’s performance for Q1 2006, please refer to the Company’s earnings
release included in the Company’s 8-K dated April 20, 2006. 1Q06 1Q06 |
 18 18 Historical Net Sales Historical Operating Income (1) Growing Net Sales and Profitability Growing Net Sales and Profitability $221.5 $298.0 $479.1 $684.9 $836.7 $228.6 $0 $100 $200 $300 $400 $500 $600 $700 $800 Net Sales ($ in millions) $30.4 $39.4 $97.1 $151.0 $190.9 $47.2 $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Operating Income ___________________________ 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. 1Q06 includes $0.6 million in compensation expense relating to stock options and FAS123R. 2. For a complete discussion of the Company’s financial performance for 2005, please
refer to the Management’s Discussion and Analysis section of the Company’s Form 10K for 2005. For a discussion of the Company’s performance for Q1 2006, please refer to the Company’s earnings release included in
the Company’s 8-K dated April 20, 2006. ($ in millions) 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 1Q06 1Q06 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 1Q06 1Q06 |
 19 19 $19.7 $35.1 $47.0 $77.0 $102.2 $51.6 $0 $20 $40 $60 $80 $100 Cash Flow from Operations Cash Flow from Operations Operating Cash Flows Growth of operating cash flows Growth of operating cash flows Business model generates Business model generates significant operating cash flows significant operating cash flows Identified key initiatives to Identified key initiatives to continue to improve cash flow continue to improve cash flow ($ in millions) 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. For a discussion of the Company’s performance for Q1 2006, please refer to the Company’s earnings release included in the Company’s 8-K dated April 20, 2006. 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 1Q06 1Q06 |
 20 20 Investment Highlights Investment Highlights #1 In The Fast Growing Viscoelastic Market #1 In The Premium Mattress Market #1 In The Premium Pillow Market #1 In International Operations of All U.S. Bedding Manufacturers #1 In The Industry For Profitability #1 In U.S. Consumer Referrals for Mattresses 4 #1 In Retail Sales And Profit Per Sq Ft 4 ___________________________ 1. Based on net sales, including management’s estimates of sales by companies that do not publicly report sales of viscoelastic mattresses and pillows, premium mattress and premium pillows. 2. Based on total company-owned foreign operations by U.S. based bedding manufacturers, including management’s estimates for companies that do not publicly report such information. 3. Based on total net income for all publicly reporting US mattress manufacturers. 4. Based on independent survey(s) commissioned by Tempur-Pedic and management estimates. 1 1 1 2 3 |
 Investor Presentation May 2006 |