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) October 16, 2008
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):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
|
Item
2.02 Results from Operations and Financial
Condition
|
On October 16, 2008, Tempur-Pedic
International Inc. (the “Company”) issued a press release to announce its
financial results for the third quarter ended September 30, 2008. The Company
also announced revised financial guidance for the 2008 fiscal year. This press
release is furnished herewith as Exhibit 99.1 and incorporated by reference
herein.
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
7.01 Regulation FD
Disclosure
|
The information furnished under Item
2.02 of this Form 8-K, including Exhibit 99.1 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 October 16, 2008, entitled “Tempur-Pedic Reports Third
Quarter Earnings”
|
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: October
16, 2008
|
|||
| Tempur-Pedic International Inc. | |||
|
|
By:
|
/s/ Dale E. Williams | |
| Name: Dale E. Williams | |||
| Title: Executive Vice President, Chief Financial Officer & Secretary | |||
|
EXHIBIT
INDEX
|
|
Exhibit
|
Description
|
|
99.1
|
Press
Release dated October 16, 2008, entitled “Tempur-Pedic Reports Third
Quarter Earnings”
|
TEMPUR-PEDIC REPORTS THIRD QUARTER EARNINGS
|
|
|
-
Reports EPS of $0.32 As Challenging Economic Environment
Continues
|
|
|
|
-
Generates Record Quarterly Operating Cash
Flow
|
|
|
|
-
Announces Initiatives to Further Strengthen Financial
Flexibility
|
|
|
|
-
Lowers 2008 Financial Guidance
|
LEXINGTON, KY, October 16,
2008 – Tempur-Pedic International Inc. (NYSE: TPX), the leading
manufacturer, marketer and distributor of premium mattresses and pillows
worldwide, today announced financial results for the third quarter ended
September 30, 2008. The Company also announced a series of initiatives to
further strengthen its industry-leading financial flexibility, including a
repatriation of foreign earnings and a suspension of its cash dividend, with
such funds redirected to reduce debt. The Company also announced revised
financial guidance for 2008.
THIRD
QUARTER FINANCIAL SUMMARY
|
·
|
Earnings
per share (EPS) were $0.32 per diluted share in the third quarter of 2008
as compared to $0.49 per diluted share in the third quarter of 2007. The
Company reported net income of $24.1 million for the third quarter of 2008
as compared to $38.8 million in the third quarter of
2007.
|
|
·
|
Net
sales declined 14% to $252.8 million in the third quarter of 2008 from
$294.1 million in the third quarter of 2007. Net sales in the domestic
segment declined 17%, while international segment net sales declined 7%.
On a constant currency basis, international segment net sales decreased
13%.
|
|
·
|
Mattress
units declined 15% globally. Mattress units declined 18% domestically and
10% internationally. Pillow units declined 10% globally. Pillow units
declined 18% domestically and were relatively unchanged
internationally.
|
|
·
|
Gross
profit margin was 41.7% as compared to 48.2% in the third quarter of 2007.
The gross profit margin declined as a result of significant weakness in
the high margin Direct channel, increased commodity costs and fixed cost
de-leverage related to lower volumes, partially offset by improved
manufacturing productivity.
|
|
·
|
Operating
profit margin was 17.0% as compared to 23.0% in the third quarter of 2007.
Operating profit margin decline resulted from gross profit margin declines
partially offset by reductions in operating expenses. The Company recorded
an incremental $1.0 million of bad debt expense related to a specific
customer bankruptcy.
|
|
·
|
Reflecting
the Company’s focus on improving working capital, operating cash flow
increased 30% to $72.6 million in the third quarter of 2008 from $55.7
million in the third quarter of 2007. During the quarter, the Company
reduced inventories by $23.8 million to $69.7
million.
|
|
·
|
During
the quarter, the Company reduced Total Debt by $37.8 million to $518.8
million. In addition, the Company increased its cash balance by $19.3
million to $87.7 million. As of September 30, 2008, the Company’s ratio of
total Funded Debt to EBITDA was 2.45 times, well within the covenant in
its credit facility that this ratio will not exceed 3.00 times. For
additional information about EBITDA and Funded Debt (which are non-GAAP
measures), please refer to the reconciliation and other information
included in the attached schedule.
|
Chief
Executive Officer Mark Sarvary commented, “During the third quarter we executed
well. The economic climate worsened and we responded quickly to improve
earnings. We reduced our operating expenses and improved our balance sheet by
substantially reducing debt.
“Having
said that, we are facing the most challenging economic environment in memory,
and we see no reason to assume the economic climate will recover in the short
term. Therefore, we are taking actions now to further improve our financial
flexibility and strengthen the business. I am confident that when the economic
climate improves, this great company will be exceptionally well
positioned.”
Initiatives
to Further Strengthen Financial Flexibility
The
Company announced it plans to repatriate approximately $140 million of foreign
earnings. This will enable the Company to immediately utilize its $75 million
cash held abroad to reduce its outstanding debt. It will also shift some of its
domestic segment leverage to the international segment, thereby allowing for
more rapid overall debt reduction going forward from cash flow in both its
domestic and international segments. The Company anticipates recording a tax
charge of approximately $13 million in the fourth quarter related to the
repatriation, with the final tax effect to be based on the timing and amount of
the actual distribution.
The
Company also announced it will suspend its cash dividend and redirect those
funds to reduce debt. The Company further announced it will continue to reduce
capital expenditures, drive working capital efficiencies and minimize
discretionary spending.
Chief
Financial Officer Dale Williams commented, “We are pleased with our cash flows
and I would like to credit our operating teams around the world for their
efforts in this area. Through a repatriation of foreign earnings, suspending the
dividend, and modest debt rebalancing between our domestic and international
segments, we will reduce debt faster.
Williams
continued, “These actions coupled with working capital and expense management
should give us the flexibility to operate without risk of breaching our credit
facility covenants even if the market continues to deteriorate, while ensuring
our ability to invest in marketing and R&D. Although we believe
de-leveraging is the prudent course in this environment, we will continue to
have access to substantial incremental borrowing capacity under our existing
revolving credit facility and will be able to access this liquidity in the
future as appropriate to invest in such activities as growth initiatives and
stock buybacks.”
2008
Financial Guidance
Given the
extraordinary macro economic events of recent weeks, the Company now believes
fourth quarter sales will fall below prior expectations and has revised full
year 2008 guidance for net sales and earnings per share. It currently expects
net sales for 2008 to range from $930 million to $950 million. It currently
expects EPS for 2008 to range from $0.90 to $1.00 per diluted share. This
guidance does not take into account a potential tax charge related to the
proposed repatriation of foreign earnings discussed above. The Company noted 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 to discuss financial results
today, October 16, 2008 at 5:00 p.m. Eastern Time. The dial-in number for the
conference call is 888-438-5525. The call is also being webcast and can be
accessed on the investor relations section of the Company’s website,
www.tempurpedic.com.
For those
who cannot listen to the live broadcast, a telephone replay of the call will be
available from October 16, 2008 at 8:00 p.m. Eastern Time through October 23,
2008. To listen to the replay, dial 888-203-1112, participant code
7441183.
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. These forward-looking statements
include without limitation statements relating to the Company’s plans
to further improve financial flexibility and the business, including plans
to repatriate earnings, suspend its dividend, increase
leverage internationally and pay down domestic debt, improve working capital
and manage its capital expenditures and discretionary spending; the
Company’s strength and positioning in the future; the Company’s ability to
remain in compliance with its credit facility covenants and access borrowings in
the future; and the Company’s expectations regarding net sales and earnings per
share for 2008. All forward looking statements 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,
financial and industry conditions, particularly in the retail sector,
as well as consumer confidence; the Company’s ability to reduce expenses to
align with reduced sales levels; 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 increase sales productivity within
existing retail accounts and to further penetrate the US retail channel,
including the timing of opening or expanding within large retail accounts; the
Company’s ability to address issues in certain underperforming international
markets; the Company’s ability to continuously improve and expand its product
line, maintain efficient, timely and cost-effective production and delivery of
its products, and manage its growth; changes in foreign tax rates, including the
ability to utilize tax loss carry forwards; 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
mattresses and pillows made from its proprietary TEMPUR® pressure-relieving
material. It is the worldwide leader in premium sleep, the fastest growing
segment of the estimated $13 billion global mattress market. The Company is
focused on developing, manufacturing and marketing advanced sleep surfaces that
help improve the quality of life for people around the world. The Company’s
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.
Investor
Relations Contact:
Barry
Hytinen
Vice
President, Investor Relations and Financial Planning & Analysis
800-805-3635
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated
Statements of Income
(In
thousands, except per share amounts)
|
Three
Months Ended
|
Nine
Months Ended
|
||||||||||||||
|
September
30,
|
September
30,
|
||||||||||||||
|
2008
|
2007
|
Chg
%
|
2008
|
2007
|
Chg
%
|
||||||||||
|
Net
sales
|
$
|
252,814
|
$
|
294,094
|
(14)%
|
$
|
738,697
|
$
|
817,768
|
(10)%
|
|||||
|
Cost
of sales
|
147,323
|
152,484
|
419,109
|
423,930
|
|||||||||||
|
Gross
profit
|
105,491
|
141,610
|
(26)%
|
319,588
|
393,838
|
(19)%
|
|||||||||
|
Selling
and marketing expenses
|
39,956
|
48,830
|
137,906
|
144,630
|
|||||||||||
|
General
and administrative expenses and other
|
22,644
|
25,231
|
73,139
|
72,775
|
|||||||||||
|
Operating
income
|
42,891
|
67,549
|
(37)%
|
108,543
|
176,433
|
(39)%
|
|||||||||
|
Other
income (expense), net:
|
|||||||||||||||
|
Interest
expense, net
|
(6,294
|
)
|
(8,261
|
)
|
(19,630
|
)
|
(21,394
|
)
|
|||||||
|
Other
income (expense), net
|
96
|
(33
|
)
|
(995
|
)
|
(536
|
)
|
||||||||
|
Total
other expense
|
(6,198
|
)
|
(8,294
|
)
|
(20,625
|
)
|
(21,930
|
)
|
|||||||
|
Income
before income taxes
|
36,693
|
59,255
|
(38)%
|
87,918
|
154,503
|
(43)%
|
|||||||||
|
Income
tax provision
|
12,622
|
20,437
|
30,105
|
52,974
|
|||||||||||
|
Net
income
|
$
|
24,071
|
$
|
38,818
|
(38)%
|
$
|
57,813
|
$
|
101,529
|
(43)%
|
|||||
|
Earnings
per common share:
|
|||||||||||||||
|
Basic
|
$
|
0.32
|
$
|
0.50
|
$
|
0.77
|
$
|
1.25
|
|||||||
|
Diluted
|
$
|
0.32
|
$
|
0.49
|
$
|
0.77
|
$
|
1.22
|
|||||||
|
Weighted
average per common share outstanding:
|
|||||||||||||||
|
Basic
|
74,815
|
77,725
|
74,704
|
81,522
|
|||||||||||
|
Diluted
|
74,992
|
79,173
|
74,944
|
83,069
|
|||||||||||
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated
Balance Sheets
(In
thousands, except per share amounts)
|
September
30,
|
December
31,
|
||||||||
|
2008
|
2007
|
Chg
%
|
|||||||
|
ASSETS
|
|||||||||
|
Current
Assets:
|
|||||||||
|
Cash
and cash equivalents
|
$
|
87,677
|
$
|
33,315
|
|||||
|
Accounts
receivable, net
|
137,112
|
163,730
|
|||||||
|
Inventories
|
69,703
|
106,533
|
|||||||
|
Prepaid
expenses and other current assets
|
10,922
|
11,133
|
|||||||
|
Deferred
income taxes
|
14,725
|
11,924
|
|||||||
|
Total
Current Assets
|
320,139
|
326,635
|
(2)%
|
||||||
|
Property,
plant and equipment, net
|
190,714
|
208,370
|
|||||||
|
Goodwill
|
199,523
|
198,286
|
|||||||
|
Other
intangible assets, net
|
67,157
|
68,755
|
|||||||
|
Deferred
financing costs and other non-current assets
|
4,785
|
4,386
|
|||||||
|
Total
Assets
|
$
|
782,318
|
$
|
806,432
|
(3)%
|
||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||
|
Current
Liabilities:
|
|||||||||
|
Accounts
payable
|
$
|
56,159
|
$
|
56,206
|
|||||
|
Accrued
expenses and other
|
74,184
|
66,080
|
|||||||
|
Income
taxes payable
|
15,997
|
4,060
|
|||||||
|
Current
portion of long-term debt
|
—
|
288
|
|||||||
|
Total
Current Liabilities
|
146,340
|
126,634
|
16%
|
||||||
|
Long-term
debt
|
518,750
|
601,756
|
|||||||
|
Deferred
income taxes
|
30,404
|
29,645
|
|||||||
|
Other
non-current liabilities
|
2,410
|
259
|
|||||||
|
Total
Liabilities
|
697,904
|
758,294
|
(8)%
|
||||||
|
Stockholders’
Equity:
|
|||||||||
|
Common
stock, $.01 par value; 300,000 shares authorized;
99,215 shares issued as of September 30, 2008 and December 31,
2007
|
992
|
992
|
|||||||
|
Additional
paid in capital
|
289,011
|
283,564
|
|||||||
|
Retained
earnings
|
280,367
|
241,812
|
|||||||
|
Accumulated
other comprehensive income
|
2,443
|
13,550
|
|||||||
|
Treasury
stock, at cost; 24,382 and 24,681 shares as of September 30, 2008 and
December 31, 2007, respectively
|
(488,399
|
)
|
(491,780
|
)
|
|||||
|
Total
Stockholders’ Equity
|
84,414
|
48,138
|
75%
|
||||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
782,318
|
$
|
806,432
|
(3)%
|
||||
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated
Statement of Cash Flows
(In
thousands)
|
Nine
Months Ended
|
|||||||||
|
September
30,
|
|||||||||
|
2008
|
2007
|
Chg
%
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||
|
Net
income
|
$
|
57,813
|
$
|
101,529
|
|||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||||
|
Depreciation
and amortization
|
24,847
|
25,326
|
|||||||
|
Amortization
of deferred financing costs
|
888
|
845
|
|||||||
|
Amortization
of stock-based compensation
|
6,101
|
5,081
|
|||||||
|
Allowance
for doubtful accounts
|
5,859
|
4,541
|
|||||||
|
Deferred
income taxes
|
(1,634
|
)
|
(3,101
|
)
|
|||||
|
Foreign
currency adjustments
|
74
|
661
|
|||||||
|
Loss
on sale of equipment and other
|
679
|
101
|
|||||||
|
Changes
in operating assets and liabilities:
|
|||||||||
|
Accounts
receivable
|
18,600
|
(22,585
|
)
|
||||||
|
Inventories
|
36,680
|
(14,228
|
)
|
||||||
|
Prepaid
expenses and other current assets
|
(1,287
|
)
|
(5,035
|
)
|
|||||
|
Accounts
payable
|
(149
|
)
|
10,250
|
||||||
|
Accrued
expenses and other
|
8,301
|
10,636
|
|||||||
|
Income
taxes
|
12,142
|
15,839
|
|||||||
|
Net
cash provided by operating activities
|
168,914
|
129,860
|
30%
|
||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||
|
Payments
for trademarks and other intellectual property
|
(600
|
)
|
(636
|
)
|
|||||
|
Purchases
of property, plant and equipment
|
(7,844
|
)
|
(8,181
|
)
|
|||||
|
Acquisition
of businesses
|
(1,529
|
)
|
(5,756
|
)
|
|||||
|
Proceeds
from sale of equipment
|
172
|
135
|
|||||||
|
Net
cash used by investing activities
|
(9,801
|
)
|
(14,438
|
)
|
32%
|
||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||
|
Proceeds
from long-term revolving credit facility
|
65,429
|
347,547
|
|||||||
|
Repayments
of long-term revolving credit facility
|
(89,691
|
)
|
(119,293
|
)
|
|||||
|
Repayments
of long-term debt
|
(1,359
|
)
|
(45,416
|
)
|
|||||
|
Proceeds
from Series A Industrial Revenue Bonds
|
—
|
15,385
|
|||||||
|
Repayments
of Series A Industrial Revenue Bonds
|
(57,785
|
)
|
(5,765
|
)
|
|||||
|
Common
stock issued, including reissuances of treasury
stock
|
695
|
8,078
|
|||||||
|
Excess
tax benefit from stock based compensation
|
301
|
10,025
|
|||||||
|
Treasury
stock repurchased
|
—
|
(299,998
|
)
|
||||||
|
Dividends
paid to stockholders
|
(17,933
|
)
|
(17,895
|
)
|
|||||
|
Payments
for deferred financing costs
|
(14
|
)
|
(1,530
|
)
|
|||||
|
Net
cash used by financing activities
|
(100,357
|
)
|
(108,862
|
)
|
8%
|
||||
|
NET
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(4,394
|
)
|
1,232
|
||||||
|
Increase
in cash and cash equivalents
|
54,362
|
7,792
|
|||||||
|
CASH
AND CASH EQUIVALENTS, beginning of period
|
33,315
|
15,788
|
|||||||
|
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
87,677
|
$
|
23,580
|
272%
|
||||
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 third quarter of 2008 compared to 2007:
|
($
in thousands)
|
||||||||||||||||||||||||
|
CONSOLIDATED
|
DOMESTIC
|
INTERNATIONAL
|
||||||||||||||||||||||
|
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
||||||||||||||||||||||
|
September
30,
|
September
30,
|
September
30,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
|
By
Sales Channel
|
||||||||||||||||||||||||
|
Retail
|
$ | 216,226 | $ | 251,452 | $ | 147,992 | $ | 177,372 | $ | 68,234 | $ | 74,080 | ||||||||||||
|
Direct
|
11,230 | 18,009 | 9,169 | 15,140 | 2,061 | 2,869 | ||||||||||||||||||
|
Healthcare
|
11,636 | 12,384 | 3,727 | 4,222 | 7,909 | 8,162 | ||||||||||||||||||
|
Third
Party
|
13,722 | 12,249 | 5,000 | 3,717 | 8,722 | 8,532 | ||||||||||||||||||
|
Total
|
$ | 252,814 | $ | 294,094 | $ | 165,888 | $ | 200,451 | $ | 86,926 | $ | 93,643 | ||||||||||||
Summary
of Product Sales
A summary
of net sales by product is reported below:
|
($
in thousands)
|
||||||||||||||||||||||||
|
CONSOLIDATED
|
DOMESTIC
|
INTERNATIONAL
|
||||||||||||||||||||||
|
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
||||||||||||||||||||||
|
September
30,
|
September
30,
|
September
30,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
|
Net
Sales
|
||||||||||||||||||||||||
|
Mattresses
|
$ | 174,869 | $ | 207,341 | $ | 121,356 | $ | 149,221 | $ | 53,513 | $ | 58,120 | ||||||||||||
|
Pillows
|
31,414 | 34,418 | 14,476 | 17,960 | 16,938 | 16,458 | ||||||||||||||||||
|
Other
|
46,531 | 52,335 | 30,056 | 33,270 | 16,475 | 19,065 | ||||||||||||||||||
|
Total
|
$ | 252,814 | $ | 294,094 | $ | 165,888 | $ | 200,451 | $ | 86,926 | $ | 93,643 | ||||||||||||
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Reconciliation
of EBITDA to Net Income and Funded Debt to Total Debt
Non-GAAP
Measures
(In
thousands)
The
Company provides information regarding EBITDA and Funded Debt which are not
recognized terms under GAAP (Generally Accepted Accounting Principles) and do
not purport to be alternatives to net income as a measure of operating
performance or Total Debt. Because not all companies use identical
calculations, these presentations may not be comparable to other similarly
titled measures of other companies. A reconciliation of EBITDA to the Company’s
Net income and Funded Debt to Total Debt are provided
below. Management believes that the use of these non-GAAP financial
measures provides investors with additional useful information with respect to
the terms of the Company’s credit facility.
Reconciliation
of EBITDA to Net Income
The
following table sets forth the reconciliation of the Company’s reported Net
Income for the three months ended December 31, 2007 and the nine months ended
September 30, 2008 to the calculation of EBITDA for the twelve months ended
September 30, 2008:
|
Three
Months Ended
|
Nine
Months Ended
|
Twelve
Months Ended
|
||||||||||
|
December
31, 2007
|
September
30, 2008
|
September
30, 2008
|
||||||||||
|
Net
Income
|
$ | 39,930 | $ | 57,813 | $ | 97,743 | ||||||
|
Plus:
|
||||||||||||
|
Interest
Expense
|
9,090 | 19,630 | 28,720 | |||||||||
|
Income
taxes
|
18,441 | 30,105 | 48,546 | |||||||||
|
Depreciation
& Amortization
|
9,736 | 30,948 | 40,684 | |||||||||
|
EBITDA
|
$ | 77,197 | $ | 138,496 | $ | 215,693 | ||||||
Reconciliation
of Funded Debt to Total Debt
The
following table sets forth the reconciliation of the Company’s reported Total
Debt to the calculation of Funded Debt:
|
September
30, 2008
|
||||
|
Total
Debt
|
$ | 518,750 | ||
|
Letters
of Credit outstanding
|
9,898 | |||
|
Funded
Debt
|
$ | 528,648 | ||
Calculation
of Funded Debt to EBITDA
|
For
the twelve months ended
|
||||
|
September
30, 2008
|
||||
|
Funded
Debt
|
$ | 528,648 | ||
|
EBITDA
|
215,693 | |||
|
2.45
times
|
||||