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): July 18, 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 1.01 Entry into a Material Definitive Agreement.
On July 18, 2006, Tempur-Pedic International Inc. (the “Company”) entered into an Employment and Non-Competition Agreement (the “Employment Agreement”) with Richard Anderson, Executive Vice President and President, North America of the Company. On July 18, 2006, the Compensation Committee of the Board of Directors granted Mr. Anderson an option to acquire up to one hundred thousand (100,000) shares of Company’s common stock, $0.01 par value per share (the “Option Award”).
The Employment Agreement is effective as of July 18, 2006, the date of Mr. Anderson’s appointment as Executive Vice President and President, North America of the Company, for an initial one year term and will automatically renew for one year periods subject to a ninety (90) days notice of decision not renew by either the Company or Mr. Anderson. The Employment Agreement provides for, among other things, an initial base salary of $300,000 per year, eligibility to earn an annual performance based bonus targeted to be an amount equal to fifty percent (50%) of the base salary for that year, and a $600.00 per month automobile allowance. In addition, Mr. Anderson agreed not to compete with the Company during his employment with the Company and for two years following his termination of employment and not to solicit any employees of the Company for two years after the termination of employment.
The Option Award grants Mr. Anderson an option to purchase one hundred thousand (100,000) shares of the Company’s common stock, $0.01 par value per share, at an exercise price of $13.16, subject to the applicable vesting schedule. The vesting schedule provides that twenty-five percent (25%) of the shares shall become exercisable on the first anniversary of the Option Award, and for every annual anniversary date thereafter, twenty-five percent (25%) of such shares shall become exercisable until all shares have vested.
Item 2.02 Results from Operations and Financial Condition
On July 20, 2006, the Company issued a press release to announce its financial results for the second quarter ended June 30, 2006. This press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.
The information in Item 2.02 of 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 7.01. Regulation FD Disclosure
On July 20, 2006, the Company issued a press release announcing the appointment of Mr. Anderson as Executive Vice President and President, North America of the Company. A copy of this press release is furnished as Exhibit 99.2 to this report.
The information filed under Item 1.01 and furnished under Item 2.02 of this Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, is hereby incorporated by reference under this Item 7.01 as if fully set forth herein.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit | Description | |
| 99.1 | Press Release dated July 20, 2006, entitled “Tempur-Pedic Reports Second Quarter EPS Up 25% to $0.30” | |
| 99.2 | Press Release dated July 20, 2006, entitled “Tempur-Pedic Announces Rick Anderson as EVP and President, North America” | |
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: July 20, 2006
| Tempur-Pedic International Inc. | ||
| By: | /s/ H. Thomas Bryant | |
| Name: | H. Thomas Bryant | |
| Title: | President and Chief Executive Officer | |
EXHIBIT INDEX
| Exhibit | Description | |
| 99.1 | Press Release dated July 20, 2006, entitled “Tempur-Pedic Reports Second Quarter EPS Up 25% to $0.30” | |
| 99.2 | Press Release dated July 20, 2006, entitled “Tempur-Pedic Announces Rick Anderson as EVP and President, North America” | |
Exhibit 99.1
Contact: Tempur-Pedic Investor Relations, 800-805-3635
TEMPUR-PEDIC REPORTS SECOND QUARTER EPS UP 25% TO $0.30
– Net Sales Up 14% to $219 million
– Increases Full Year 2006 Earnings Per Share Guidance
LEXINGTON, KY, July 20, 2006 – Tempur-Pedic International Inc. (NYSE: TPX), the leading manufacturer, marketer and distributor of viscoelastic and premium mattresses and pillows worldwide, today announced net sales and earnings for the second quarter ended June 30, 2006.
Second Quarter 2006 Summary
| • | Net sales rose 14% to $219.0 million from $192.6 million in the second quarter of 2005. Retail channel sales increased 21% in the U.S. and 21% worldwide. Sales in the U.S. furniture retail channel were especially strong, with an increase of 29%. Sales in the international retail channel increased 20%. |
| • | Earnings per share (EPS) rose 25% to $0.30 per diluted share in the second quarter of 2006 from $0.24 per diluted share in the second quarter of 2005. Share repurchases completed in the second quarter of 2006 contributed less than half a cent to second quarter 2006 fully diluted EPS. |
| • | Worldwide, mattress unit growth increased 17%. Domestic mattress unit growth was especially strong increasing 22%. |
| • | Cash flow provided by operations increased to $35.0 million in the second quarter of 2006 from $15.0 million in the second quarter of 2005. The increase was principally driven by improved working capital. For the six months ended June 30, 2006, cash flow provided by operations increased to $86.5 million from $49.1 million for the six months ended June 30, 2005. |
| • | The Company made a voluntary prepayment of $20.5 million on its European term loan, in excess of its scheduled principal payment of $4.9 million, for a total principal reduction of $25.4 million. This is the second consecutive quarter during which the Company has made a voluntary prepayment in excess of $20 million on its European term loan. |
| • | During the second quarter, the Company purchased 3.3 million shares of its common stock at a total cost of $45.8 million. |
President and Chief Executive Officer H. Thomas Bryant commented, “Tempur-Pedic International turned in another solid quarter of net sales and earnings in the second quarter. We believe the initiatives we put in place to accelerate growth are gaining momentum and we are succeeding in our efforts to control costs. In addition, we continued to selectively add high quality retail partner stores reflecting our strategy to ensure improved established account and new store productivity.
Bryant continued, “We benefited from ongoing efforts to improve the overall financial strength of the business in the second quarter. Strong performance throughout our operations generated significantly improved mattress unit growth, working capital and productivity.
“Late in the second quarter, we began shipping our two new high-end U.S. mattresses, ‘The GrandBed by Tempur-Pedic™’ and ‘The RhapsodyBed by Tempur-Pedic™’. Dealer interest in both models has exceeded our expectations and we experienced stock outs. As a result, we had to allocate new products to select dealers. We anticipate fulfilling these orders in the third quarter.
“In July, we began shipping the redesigned Classic model following a successful close-out program on remaining inventory of the old Classic. Dealer and consumer interest for all of our new models continues to be strong and we currently expect to expand floor space throughout the second half of the year.
“Internationally, we continue to experience strong mattress growth across our retail markets. Our premium products are enjoyed by consumers throughout the world, and, in fact, we believe no U.S. bedding manufacturer has more substantial company-owned foreign operations than Tempur-Pedic. Reflecting international strength, we voluntarily prepaid $20.5 million on our European term loan, which coupled with our scheduled principal payment reduced international debt by $25.4 million.”
Chief Financial Officer Dale Williams noted, “While our strategy for growth through retail and mattress share gains has been effective, we continue to be affected by channel and product mix. Direct sales are down and pillow sales are flat versus prior year, which has negative implications for gross margin. In addition, gross margin was slightly impacted by the close-out of the old Classic. However, initiatives to generate productivity improvements and cost reductions throughout our manufacturing and supply chain operations have yielded significant benefits. As a result of these initiatives, we currently expect gross margin to improve during the second half of the year.”
Bryant concluded, “The viscoelastic bedding category created by Tempur-Pedic 15 years ago continues to expand and take market share from innerspring mattress manufacturers. As Tempur-Pedic scales toward our goal of becoming the world’s largest mattress manufacturer, we will continue to ensure we have the business infrastructure and management team aligned to support this growth. To that end, I am pleased to announce the appointment of Rick Anderson to the newly created position of Executive Vice President and President, North America. Rick brings more than 23 years of global management, marketing and sales experience. In this new role, Rick will lead our North American sales and marketing organizations.”
Share Repurchase Program
During the second quarter of 2006, the Company purchased 3.3 million shares of its common stock for a total cost of $45.8 million. From the commencement of the repurchase program on October 20, 2005 through the end of the second quarter of 2006, the Company has purchased 18.1 million shares of its common stock for a total cost of $220.0 million.
2006 Guidance
The Company confirmed its previous guidance for net sales and increased guidance for GAAP diluted earnings per share for full year 2006. The Company continues to expect full year 2006 net sales to range from $940.0 million to $970.0 million, an increase of 12% to 16% over 2005. The Company increased its full year 2006 guidance for GAAP diluted earnings per share to reflect shares repurchased during the second quarter of 2006, interest expense on associated borrowings and charges related to recent incentive stock option grants. Compared to the Company’s previous GAAP EPS guidance of $1.24 to $1.29, the Company currently expects GAAP diluted earnings per share for 2006 to range from $1.26 to $1.31, which would represent an increase of 30% to 35% over the Company’s GAAP EPS for 2005. The Company also notes that its expectations are based on information available at the time of this release, and are subject to changing conditions, many of which are outside the Company’s control.
Conference Call Information
Tempur-Pedic International will host a live conference call with President and Chief Executive Officer H. Thomas Bryant, and Chief Financial Officer Dale Williams to discuss second quarter financial results today, July 20, 2006 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The dial-in number for the conference call is 866-825-3209, conference ID#19456521. The call is also being webcast, and can be accessed at http://www.tempurpedic.com/ir.
For those who cannot listen to the live broadcast, a replay of the call will be available from July 20, 2006 at 8:00 p.m. Eastern Time through July 27, 2006. To listen to the telephone replay, dial 888-286-8010, conference ID #17893545.
An archived webcast will also be available on the Tempur-Pedic International investor relations website at http://www.tempurpedic.com/ir.
Forward-looking Statements
This release contains “forward-looking statements,” within the meaning of federal securities laws, which include information concerning one or more of the Company’s plans, objectives, goals, strategies, and other information that is not historical information. When used in this release, the words “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, statements relating to the impact of initiatives to accelerate growth and maintain costs, the rollout and market acceptance of new products, and expectations regarding floor expansion in the retail channel, gross margin improvement and net sales and net income 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 release. 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; and rising commodity costs. 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.
About the Company
Tempur-Pedic International Inc. (NYSE: TPX) manufactures and distributes Swedish Mattresses and Neck Pillows™ made from its TEMPUR® pressure-relieving material: a proprietary material that conforms to the body to provide support and help alleviate pressure points. Products are currently sold in over 70 countries under the TEMPUR® and Tempur-Pedic® brand names. World headquarters for Tempur-Pedic International is in Lexington, KY. For more information, visit http://www.tempurpedic.com or call 800-805-3635.
TEMPUR-PEDIC INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share amounts)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||||||||
| 2006 | 2005 | Chg % | 2006 | 2005 | Chg % | |||||||||||||||||
| Net sales |
$ | 218,962 | $ | 192,615 | 14 | % | $ | 447,548 | $ | 414,994 | 8 | % | ||||||||||
| Cost of sales |
112,446 | 94,080 | 229,778 | 202,216 | ||||||||||||||||||
| Gross profit |
106,516 | 98,535 | 8 | % | 217,770 | 212,778 | 2 | % | ||||||||||||||
| Selling and marketing expenses |
40,353 | 38,149 | 85,095 | 83,118 | ||||||||||||||||||
| General and administrative expenses |
17,950 | 15,276 | 36,405 | 34,366 | ||||||||||||||||||
| Research and development expenses |
951 | 513 | 1,791 | 1,317 | ||||||||||||||||||
| Operating income |
47,262 | 44,597 | 6 | % | 94,479 | 93,977 | 1 | % | ||||||||||||||
| Other income (expense), net: |
||||||||||||||||||||||
| Interest expense, net |
(6,217 | ) | (4,864 | ) | (10,674 | ) | (10,227 | ) | ||||||||||||||
| Loss on extinguishment of debt |
— | — | — | (717 | ) | |||||||||||||||||
| Other income (expense), net |
(55 | ) | 412 | (148 | ) | 327 | ||||||||||||||||
| Total other expense |
(6,272 | ) | (4,452 | ) | (10,822 | ) | (10,617 | ) | ||||||||||||||
| Income before income taxes |
40,990 | 40,145 | 83,657 | 83,360 | ||||||||||||||||||
| Income tax provision |
14,878 | 15,295 | 30,652 | 31,760 | ||||||||||||||||||
| Net income |
$ | 26,112 | $ | 24,850 | 5 | % | $ | 53,005 | $ | 51,600 | 3 | % | ||||||||||
| Earnings per share: |
||||||||||||||||||||||
| Basic |
$ | 0.31 | $ | 0.25 | $ | 0.61 | $ | 0.52 | ||||||||||||||
| Diluted |
$ | 0.30 | $ | 0.24 | $ | 0.59 | $ | 0.50 | ||||||||||||||
| Weighted average shares outstanding: |
||||||||||||||||||||||
| Basic |
84,377 | 98,792 | 86,848 | 98,607 | ||||||||||||||||||
| Diluted |
87,460 | 103,431 | 90,246 | 103,315 | ||||||||||||||||||
TEMPUR-PEDIC INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share amounts)
| June 30, 2006 |
December 31, 2005 |
Chg % | |||||||||
| ASSETS |
|||||||||||
| Current Assets: |
|||||||||||
| Cash and cash equivalents |
$ | 15,812 | $ | 17,855 | |||||||
| Accounts receivable, net |
123,916 | 111,726 | |||||||||
| Inventories |
71,773 | 81,064 | |||||||||
| Prepaid expenses and other current assets |
11,336 | 11,072 | |||||||||
| Income taxes receivable |
— | 19 | |||||||||
| Deferred income taxes |
7,819 | 6,532 | |||||||||
| Total Current Assets |
230,656 | 228,268 | 1 | % | |||||||
| Property, plant and equipment, net |
206,519 | 193,224 | |||||||||
| Goodwill |
200,045 | 199,962 | |||||||||
| Other intangible assets, net |
72,414 | 73,908 | |||||||||
| Deferred financing and other non-current assets, net |
6,969 | 6,949 | |||||||||
| Total Assets |
$ | 716,603 | $ | 702,311 | 2 | % | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||
| Current Liabilities: |
|||||||||||
| Accounts payable |
$ | 37,590 | $ | 33,639 | |||||||
| Accrued expenses and other |
63,276 | 56,570 | |||||||||
| Income taxes payable |
12,410 | — | |||||||||
| Current portion of long-term debt |
22,673 | 30,770 | |||||||||
| Total Current Liabilities |
135,949 | 120,979 | 12 | % | |||||||
| Long-term debt |
394,461 | 313,711 | |||||||||
| Deferred income taxes |
39,262 | 40,386 | |||||||||
| Other non-current liabilities |
720 | 906 | |||||||||
| Total Liabilities |
570,392 | 475,982 | 20 | % | |||||||
| Stockholders’ Equity: |
|||||||||||
| Common stock, $.01 par value; 300,000 shares authorized; 99,215 shares issued as of June 30, 2006 and December 31, 2005 |
992 | 992 | |||||||||
| Additional paid in capital |
261,092 | 255,369 | |||||||||
| Deferred stock compensation, net of amortization of $13,219 and $12,312 as of June 30, 2006 and December 31, 2005, respectively |
(1,289 | ) | (2,196 | ) | |||||||
| Retained earnings |
84,179 | 46,245 | |||||||||
| Accumulated other comprehensive income |
2,293 | 1,137 | |||||||||
| Treasury stock, at cost; 16,362 and 6,767 shares as of June 30, 2006 and December 31, 2005, respectively |
(201,056 | ) | (75,218 | ) | |||||||
| Total Stockholders’ Equity |
146,211 | 226,329 | (35 | )% | |||||||
| Total Liabilities and Stockholders’ Equity |
$ | 716,603 | $ | 702,311 | 2 | % | |||||
TEMPUR-PEDIC INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(In thousands)
| Six Months Ended June 30, |
|||||||||||
| 2006 | 2005 | Chg % | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||||||
| Net income |
$ | 53,005 | $ | 51,600 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||
| Depreciation and amortization |
12,373 | 12,590 | |||||||||
| Amortization of deferred financing costs |
820 | 1,303 | |||||||||
| Loss on extinguishment of debt |
— | 717 | |||||||||
| Amortization of stock-based compensation |
1,504 | 1,649 | |||||||||
| Allowance for doubtful accounts |
1,491 | 1,310 | |||||||||
| Deferred income taxes |
(2,411 | ) | (1,561 | ) | |||||||
| Foreign currency adjustments |
274 | 194 | |||||||||
| Loss on sale of equipment and other |
288 | 575 | |||||||||
| Changes in operating assets and liabilities: |
|||||||||||
| Accounts receivable |
(9,516 | ) | (9,114 | ) | |||||||
| Inventories |
10,871 | (18,057 | ) | ||||||||
| Prepaid expenses and other current assets |
72 | 1,133 | |||||||||
| Accounts payable |
2,231 | (1,597 | ) | ||||||||
| Accrued expenses and other |
3,575 | (4,983 | ) | ||||||||
| Income taxes payable/receivable |
11,933 | 13,365 | |||||||||
| Net cash provided by operating activities |
86,510 | 49,124 | 76 | % | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||||||
| Payments for trademarks and other intellectual property |
(503 | ) | (1,138 | ) | |||||||
| Purchases of property, plant and equipment |
(18,561 | ) | (48,726 | ) | |||||||
| Proceeds from sale of equipment |
31 | 182 | |||||||||
| Net cash used by investing activities |
(19,033 | ) | (49,682 | ) | 62 | % | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||||||
| Proceeds from long-term revolving credit facility |
133,500 | 53,000 | |||||||||
| Repayments of long-term revolving credit facility |
(13,000 | ) | (17,000 | ) | |||||||
| Repayments of long-term debt |
(52,873 | ) | (32,276 | ) | |||||||
| Repayments of Series A Industrial Revenue Bonds |
(1,920 | ) | — | ||||||||
| Common stock issued, including reissuances of treasury stock |
2,851 | 1,697 | |||||||||
| Excess tax benefit from stock based compensation |
5,140 | — | |||||||||
| Treasury stock repurchased |
(144,000 | ) | — | ||||||||
| Payments for deferred financing costs |
(702 | ) | — | ||||||||
| Net cash (used) / provided by financing activities |
(71,004 | ) | 5,421 | (1410 | )% | ||||||
| NET EFFECT OF EXCHANGE RATE CHANGES ON CASH |
1,484 | (5,063 | ) | ||||||||
| Decrease in cash and cash equivalents |
(2,043 | ) | (200 | ) | |||||||
| CASH AND CASH EQUIVALENTS, beginning of period |
17,855 | 28,368 | |||||||||
| CASH AND CASH EQUIVALENTS, end of period |
$ | 15,812 | $ | 28,168 | (44 | )% | |||||
Summary of Channel Sales
The Company generates sales through four distribution channels: retail, direct, healthcare and third party. The retail channel sells to furniture, specialty and department stores globally. The direct channel sells directly to consumers. The healthcare channel sells to hospitals, nursing homes, healthcare professionals and medical retailers. The third party channel sells to distributors in countries where Tempur-Pedic International does not operate its own distribution company.
The following table highlights net sales information, by channel and by segment, for the second quarter of 2006 compared to 2005:
($ in thousands)
| CONSOLIDATED | DOMESTIC | INTERNATIONAL | ||||||||||||||||
| Three Months Ended June 30, |
Three Months Ended June 30, |
Three Months Ended June 30, | ||||||||||||||||
| 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||
| By Sales Channel |
||||||||||||||||||
| Retail |
$ | 173,351 | $ | 143,642 | $ | 117,634 | $ | 97,109 | $ | 55,717 | $ | 46,533 | ||||||
| Direct |
20,353 | 26,166 | 18,125 | 22,222 | 2,228 | 3,944 | ||||||||||||
| Healthcare |
10,204 | 10,605 | 2,924 | 2,594 | 7,280 | 8,011 | ||||||||||||
| Third Party |
15,054 | 12,202 | 3,983 | 2,129 | 11,071 | 10,073 | ||||||||||||
| Total |
$ | 218,962 | $ | 192,615 | $ | 142,666 | $ | 124,054 | $ | 76,296 | $ | 68,561 | ||||||
Summary of Product Sales
A summary of net sales by product is reported below:
($ in thousands)
| CONSOLIDATED | DOMESTIC | INTERNATIONAL | ||||||||||||||||
| Three Months Ended June 30, |
Three Months Ended June 30, |
Three Months Ended June 30, | ||||||||||||||||
| 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | |||||||||||||
| Net Sales |
||||||||||||||||||
| Mattresses |
$ | 149,870 | $ | 130,788 | $ | 105,149 | $ | 91,022 | $ | 44,721 | $ | 39,766 | ||||||
| Pillows |
29,050 | 28,579 | 12,625 | 12,010 | 16,425 | 16,569 | ||||||||||||
| Other |
40,042 | 33,248 | 24,892 | 21,022 | 15,150 | 12,226 | ||||||||||||
| Total |
$ | 218,962 | $ | 192,615 | $ | 142,666 | $ | 124,054 | $ | 76,296 | $ | 68,561 | ||||||
| Units Sold(1) |
||||||||||||||||||
| Mattresses |
178,742 | 152,837 | 105,115 | 86,436 | 73,627 | 66,401 | ||||||||||||
| Pillows |
575,044 | 585,257 | 244,280 | 252,327 | 330,764 | 332,930 | ||||||||||||
| (1) | Units sold represent net sales after consideration of returned mattresses and pillows and excludes units shipped to fulfill warranty claims and promotional activities. |
EXHIBIT 99.2
Investor Relations Contact:
Tempur-Pedic Investor Relations
800-805-3635
Press Contact:
Amy Page: amy.page@edelman.com
404-262-3000
Tempur-Pedic Announces Rick Anderson as EVP and President, North America
Gillette veteran brings 20+ years of retail and brand management experience
LEXINGTON, Ky., July 20, 2006 – Tempur-Pedic International Inc. (NYSE: TPX), the leading manufacturer, marketer and distributor of viscoelastic and premium mattresses and pillows worldwide, today announced Rick Anderson, consumer sales and marketing veteran, has joined Tempur-Pedic as Executive Vice President and President, North America. Anderson joins Tempur-Pedic from Procter & Gamble after a long career with The Gillette Company, which became part of P&G in 2005.
In this newly created position, Anderson will report directly to Chief Executive Officer H. Thomas Bryant and be responsible for the strategic leadership and operating results of Tempur-Pedic’s business in North America. Anderson’s responsibilities as President, North America will include consumer marketing, sales, and Tempur-Pedic Medical, Inc.
“As Tempur-Pedic continues to drive market growth through product innovation and advanced bedding technologies, it is extremely valuable to have someone with Rick’s consumer product experience join the Tempur-Pedic management team,” said Bryant. ”Rick has an outstanding track record in the consumer products market with a breadth of marketing and sales experience, a proven record of brand building results, and an outstanding commitment to organizational excellence. We believe he will have an immediate, positive influence on our North American operations.”
Anderson brings to Tempur-Pedic more than 23 years of international and domestic management, marketing and sales experience. At Gillette, Anderson played a critical role, most recently as vice president marketing for Oral-B and Braun in North America. Previously, Anderson was vice president of global business management for Duracell, overseeing consumer marketing, branding, product development and strategic planning worldwide.
“Tempur-Pedic is a brand I have long admired for its product innovation, customer loyalty and market development,” Anderson said. “Tempur-Pedic has outstanding products and technology, increasing brand awareness, and an industry-leading sales and marketing organization. I see strong prospects to build on the company’s momentum and enthusiastically look forward to being a part of Tempur-Pedic’s future.”
Anderson holds graduate and undergraduate degrees from Virginia Tech.
Forward-looking Statements
This release contains “forward-looking statements,” within the meaning of federal securities laws, which include information concerning one or more of the Company’s plans, objectives, goals, strategies, and other information that is not historical information. When used in this release, the words “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, statements relating to the impact of Rick Anderson’s influence on North American operations and the prospects for building on the Company’s momentum, 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 release. 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; and rising commodity costs. 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.
About the Company
Tempur-Pedic International Inc. (NYSE: TPX) manufacturers and distributes Swedish Mattresses and Neck PillowsTM made from its TEMPUR® pressure-relieving material: a proprietary material that conforms to the body to provide support and help alleviate pressure points. Products are currently sold in over 70 countries under the TEMPUR® and Tempur-Pedic® brand names. World headquarters for Tempur-Pedic International is in Lexington, KY. For more information, visit www.tempurpedic.com or call 800-805-3635.
Tempur-Pedic®, TEMPUR®, and Swedish Sleep Systems® are registered trademarks of Tempur-Pedic International in the U.S. and in other countries. Other brand names, products and trademarks are property of their respective owners.
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