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) January 22, 2009
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 January 22, 2009, Tempur-Pedic
International Inc. (the “Company”) issued a press release to announce its
financial results for the fourth quarter, ended December 31, 2008 and the full
year, ended December 31, 2008. The Company also issued full year 2009 guidance
for net sales and earnings per share. A copy of 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
|
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: January
22, 2009
|
|||
| 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
|
TEMPUR-PEDIC
REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS
|
|
|
-
Reports Fourth Quarter Adjusted EPS of $0.17; GAAP EPS of
$0.01
|
LEXINGTON, KY, January 22,
2009 – Tempur-Pedic International Inc.
(NYSE: TPX), the leading manufacturer, marketer and distributor of premium
mattresses and pillows worldwide, today announced financial results for the
fourth quarter and year ended December 31, 2008. The Company also announced
financial guidance for 2009.
FOURTH
QUARTER FINANCIAL SUMMARY
| ● |
Adjusted
earnings per share (EPS) were $0.17 per diluted share in the fourth
quarter of 2008 as compared to GAAP EPS of $0.52 per diluted share in the
fourth quarter of 2007. GAAP EPS in the fourth quarter of 2008 was $0.01,
and reflects the tax provision related to the previously announced
repatriation of foreign earnings. The Company reported adjusted net income
of $12.7 million for the fourth quarter of 2008 as compared to GAAP net
income of $39.9 million in the fourth quarter of 2007. GAAP net income in
the fourth quarter of 2008 was $1.1 million. For additional information
regarding adjusted EPS and adjusted net income (which are non-GAAP
measures), please refer to the reconciliation and other information
included in the attached
schedule.
|
| ● |
Net
sales declined 35% to $189.1 million in the fourth quarter of 2008 from
$289.0 million in the fourth quarter of 2007. Net sales in the domestic
segment declined 39%, while international segment net sales declined 27%.
On a constant currency basis, international segment net sales decreased
19%.
|
| ● |
Mattress
units declined 31% globally. Mattress units declined 39% domestically and
21% internationally. Pillow units declined 37% globally. Pillow units
declined 48% domestically and 24%
internationally.
|
| ● |
Gross
profit margin was 43.0% as compared to 48.8% in the fourth quarter of
2007. The gross profit margin declined as a result of increased commodity
costs, fixed cost de-leverage related to lower production volumes, and a
significant net sales decline in the higher margin Direct channel,
partially offset by efficiencies in manufacturing
productivity.
|
| ● |
Operating
profit margin was 13.4% as compared to 23.4% in the fourth quarter of
2007. Operating profit margin decline resulted from gross profit margin
declines and operating expense de-leverage related to lower sales levels.
The Company reduced operating expenses by $17.3 million to $56.0 million
in the fourth quarter of 2008 from $73.3 million in the fourth quarter of
2007.
|
| ● |
Reflecting
the Company’s continued focus on generating cash, operating cash flow
increased to $29.5 million in the fourth quarter of 2008 from a use of
$3.5 million in the fourth quarter of
2007.
|
| ● |
During
the quarter, the Company reduced Total debt by $99.4 million to $419.3
million. As of December 31, 2008, the Company’s ratio of Funded debt to
EBITDA was 2.44 times, well within the covenant in its credit facility,
which requires that this ratio 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.
|
| ● |
During
the quarter, the Company executed the first phase of its previously
announced repatriation of foreign earnings. Currently, the Company
anticipates repatriating approximately $150.0 million, up from the
previously announced $140.0 million. The Company has recorded an $11.6
million tax provision associated with the entire $150.0 million
repatriation initiative.
|
FULL
YEAR 2008 FINANCIAL SUMMARY
| ● |
Adjusted earnings per share (EPS) were $0.94
per dilueted share for the full year 2008 as compared to GAAP EPS of $1.74
per diluted share for the full year 2007. GAAP EPS was $0.79 for the full
year 2008, and includes the tax provision effect related to the previously
announced repatriation of foreign
earnings.
|
| ● |
Net sales declined 16% to $927.8 million for
the full year 2008 from $1,106.7 million for the full year 2007. Net sales
in the domestic segment declined 21%, while international segment net
sales declined 6%. On a constant currency basis, international segment net
sales decreased 11%.
|
| ● |
Operating cash flow was $198.4 million for the
full year 2008 up from $126.4 million for the full year
2007.
|
| ● |
For the full year 2008, the Company lowered
Total debt by $182.7 million to $419.3
million.
|
Chief
Executive Officer Mark Sarvary commented, “During the fourth quarter we executed
well in a challenging environment. While consumer spending worsened, we
responded quickly to improve earnings. At the same time we substantially
improved our balance sheet through a focus on working capital and other cash
generating initiatives, including our repatriation. As a result we enter 2009
well positioned financially."
Mr.
Sarvary concluded, “As we continue to face this challenging economic environment
our goal is to further strengthen our competitive position. Across our
operations, we are taking steps to improve margins and reduce costs. At the same
time we are focused on a series of strategic initiatives to drive sales in the
short term and to position us for growth when the economy
recovers.”
Chief
Financial Officer Dale Williams commented, “In this economic environment, sales
visibility is low. We have established our 2009 sales guidance assuming unit
volumes will not improve from the fourth quarter rate coupled with a modest
benefit from seasonality and price increases. We are positioned to improve gross
margins through productivity and easing commodity costs. We project we will
remain in compliance with the covenants in our credit facility.”
2009
Financial Guidance
The
Company issued full year 2009 guidance for net sales and earnings per share. It
currently expects net sales for 2009 to range from $770 million to $790 million.
It currently expects EPS for 2009 to range from $0.70 to $0.90 per diluted
share. 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, January 22, 2009 at 5:00 p.m. Eastern Time. The dial-in number for the
conference call is 888-203-7667. 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 January 22, 2009 at 8:00 p.m. Eastern Time through January 29,
2009. To listen to the replay, dial 888-203-1112, participant code
4171447.
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 repatriate foreign
earnings and further improve financial flexibility and its business; the
Company’s initiatives to drive sales and position the Company for growth; and
the Company’s expectations regarding net sales and earnings per share for 2009.
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 and the availability of consumer financing; 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 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
Consolidated
Statements of Income
(In
thousands, except per share amounts)
|
Three
Months Ended
|
Twelve
Months Ended
|
||||||||||||||
|
December
31,
|
December
31,
|
||||||||||||||
|
2008
|
2007
|
Chg
%
|
2008
|
2007
|
Chg
%
|
||||||||||
|
Net
sales
|
$
|
189,121
|
$
|
288,954
|
(35)%
|
$
|
927,818
|
$
|
1,106,722
|
(16)%
|
|||||
|
Cost
of sales
|
107,752
|
147,966
|
526,861
|
571,896
|
|||||||||||
|
Gross
profit
|
81,369
|
140,988
|
(42)%
|
400,957
|
534,826
|
(25)%
|
|||||||||
|
Selling
and marketing expenses
|
34,444
|
48,944
|
172,350
|
193,574
|
|||||||||||
|
General,
administrative and other expenses
|
21,604
|
24,363
|
94,743
|
97,138
|
|||||||||||
|
Operating
income
|
25,321
|
67,681
|
(63)%
|
133,864
|
244,114
|
(45)%
|
|||||||||
|
Other
expense, net:
|
|||||||||||||||
|
Interest
expense, net
|
(5,493
|
)
|
(9,090
|
)
|
(25,123
|
)
|
(30,484
|
)
|
|||||||
|
Other
expense, net
|
(324
|
)
|
(220
|
)
|
(1,319
|
)
|
(756
|
)
|
|||||||
|
Total
other expense
|
(5,817
|
)
|
(9,310
|
)
|
(26,442
|
)
|
(31,240
|
)
|
|||||||
|
Income
before income taxes
|
19,504
|
58,371
|
(67)%
|
107,422
|
212,874
|
(50)%
|
|||||||||
|
Income
tax provision
|
18,449
|
18,441
|
48,554
|
71,415
|
|||||||||||
|
Net
income
|
$
|
1,055
|
$
|
39,930
|
(97)%
|
$
|
58,868
|
$
|
141,459
|
(58)%
|
|||||
|
Earnings
per common share:
|
|||||||||||||||
|
Basic
|
$
|
0.01
|
$
|
0.53
|
$
|
0.79
|
$
|
1.77
|
|||||||
|
Diluted
|
$
|
0.01
|
$
|
0.52
|
$
|
0.79
|
$
|
1.74
|
|||||||
|
Weighted
average common shares outstanding:
|
|||||||||||||||
|
Basic
|
74,833
|
74,815
|
74,737
|
79,831
|
|||||||||||
|
Diluted
|
74,920
|
76,190
|
74,909
|
81,256
|
|||||||||||
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated
Balance Sheets
(In
thousands)
|
December
31,
|
December
31,
|
||||||||
|
2008
|
2007
|
Chg
%
|
|||||||
|
ASSETS
|
|||||||||
|
Current
Assets:
|
|||||||||
|
Cash
and cash equivalents
|
$
|
15,385
|
$
|
33,315
|
|||||
|
Accounts
receivable, net
|
99,811
|
163,730
|
|||||||
|
Inventories
|
60,497
|
106,533
|
|||||||
|
Prepaid
expenses and other current assets
|
9,233
|
11,133
|
|||||||
|
Deferred
income taxes
|
11,888
|
11,924
|
|||||||
|
Total
Current Assets
|
196,814
|
326,635
|
(40)%
|
||||||
|
Property,
plant and equipment, net
|
185,843
|
208,370
|
|||||||
|
Goodwill
|
192,569
|
198,286
|
|||||||
|
Other
intangible assets, net
|
66,823
|
68,755
|
|||||||
|
Deferred
financing costs and other non-current assets
|
4,482
|
4,386
|
|||||||
|
Total
Assets
|
$
|
646,531
|
$
|
806,432
|
(20)%
|
||||
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||
|
Current
Liabilities:
|
|||||||||
|
Accounts
payable
|
$
|
41,355
|
$
|
56,206
|
|||||
|
Accrued
expenses and other current liabilities
|
65,316
|
66,080
|
|||||||
|
Income
taxes payable
|
7,783
|
4,060
|
|||||||
|
Current
portion of long-term debt
|
—
|
288
|
|||||||
|
Total
Current Liabilities
|
114,454
|
126,634
|
(10)%
|
||||||
|
Long-term
debt
|
419,341
|
601,756
|
|||||||
|
Deferred
income taxes
|
28,371
|
29,645
|
|||||||
|
Other
non-current liabilities
|
11,922
|
259
|
|||||||
|
Total
Liabilities
|
574,088
|
758,294
|
(24)%
|
||||||
|
Stockholders’
Equity:
|
|||||||||
|
Common
stock, $.01 par value; 300,000 shares authorized;
99,215 shares issued as of December 31, 2008 and December 31,
2007
|
992
|
992
|
|||||||
|
Additional
paid in capital
|
291,018
|
283,564
|
|||||||
|
Retained
earnings
|
281,422
|
241,812
|
|||||||
|
Accumulated
other comprehensive (loss)/income
|
(12,590
|
) |
13,550
|
||||||
|
Treasury
stock, at cost; 24,382 and 24,681 shares as of December 31, 2008 and
December 31, 2007, respectively
|
(488,399
|
) |
(491,780
|
) | |||||
|
Total
Stockholders’ Equity
|
72,443
|
48,138
|
51%
|
||||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
646,531
|
$
|
806,432
|
(20)%
|
||||
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Consolidated
Statement of Cash Flows
(In
thousands)
|
Twelve
Months Ended
|
|
||||||
|
December
31,
|
|||||||
|
2008
|
2007
|
||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
|
Net
income
|
$
|
58,868
|
$
|
141,459
|
|||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
|
Depreciation
and amortization
|
32,756
|
33,414
|
|||||
|
Amortization
of deferred financing costs
|
1,060
|
1,029
|
|||||
|
Amortization
of stock-based compensation
|
8,041
|
6,728
|
|||||
|
Bad
debt expense
|
8,110
|
5,997
|
|||||
|
Deferred
income taxes
|
2,423
|
(8,961
|
)
|
||||
|
Foreign
currency adjustments
|
(1,183
|
)
|
423
|
||||
|
Loss
on sale of equipment
|
666
|
324
|
|||||
|
Changes
in operating assets and liabilities:
|
|||||||
|
Accounts
receivable
|
51,231
|
(20,536
|
)
|
||||
|
Inventories
|
45,758
|
(38,216
|
)
|
||||
|
Prepaid
expenses and other current assets
|
1,695
|
(3,226
|
)
|
||||
|
Accounts
payable
|
(15,676
|
)
|
1,861
|
||||
|
Accrued
expenses and other current liabilities
|
535
|
3,532
|
|||||
|
Income
taxes
|
4,110
|
2,533
|
|||||
|
Net
cash provided by operating activities
|
198,394
|
126,361
|
|||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
|
Payments
for trademarks and other intellectual property
|
(870
|
)
|
(1,057
|
)
|
|||
|
Purchases
of property, plant and equipment
|
(10,494
|
)
|
(16,149
|
)
|
|||
|
Acquisition
of businesses, net of cash acquired
|
(1,529
|
)
|
(5,805
|
)
|
|||
|
Proceeds
from sale of equipment
|
384
|
140
|
|||||
|
Proceeds
from escrow settlement
|
7,141
|
—
|
|||||
|
Net
cash used by investing activities
|
(5,368
|
)
|
(22,871
|
)
|
|||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
|
Proceeds
from long-term revolving credit facility
|
127,383
|
420,547
|
|||||
|
Repayments
of long-term revolving credit facility
|
(251,536
|
)
|
(146,293
|
)
|
|||
|
Repayments
of long-term debt
|
(1,359
|
)
|
(45,488
|
)
|
|||
|
Proceeds
from Series A Industrial Revenue Bonds
|
—
|
15,380
|
|||||
|
Repayments
of Series A Industrial Revenue Bonds
|
(57,785
|
)
|
(5,760
|
)
|
|||
|
Proceeds from the issuance of common
stock
|
695
|
8,175
|
|||||
|
Excess
tax benefit from stock based compensation
|
399
|
11,073
|
|||||
|
Treasury
stock repurchased
|
—
|
(319,884
|
)
|
||||
|
Dividends
paid to stockholders
|
(17,933
|
)
|
(23,811
|
)
|
|||
|
Payments
for deferred financing costs and other
|
(14
|
)
|
(1,581
|
)
|
|||
|
Net
cash used by financing activities
|
(200,150
|
)
|
(87,642
|
)
|
|||
|
NET
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
(10,806
|
)
|
1,679
|
||||
|
(Decrease)
increase in cash and cash equivalents
|
(17,930
|
)
|
17,527
|
||||
|
CASH
AND CASH EQUIVALENTS, beginning of period
|
33,315
|
15,788
|
|||||
|
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
15,385
|
$
|
33,315
|
|||
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 fourth quarter of 2008 compared to 2007:
|
($
in thousands)
|
||||||||||||||||||||||||
|
CONSOLIDATED
|
DOMESTIC
|
INTERNATIONAL
|
||||||||||||||||||||||
|
Three
Months Ended
|
Three
Months Ended
|
Three
Months Ended
|
||||||||||||||||||||||
|
December
31,
|
December
31,
|
December
31,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
|
Retail
|
$ | 157,652 | $ | 238,556 | $ | 93,332 | $ | 153,498 | $ | 64,320 | $ | 85,058 | ||||||||||||
|
Direct
|
10,098 | 18,996 | 8,496 | 16,084 | 1,602 | 2,912 | ||||||||||||||||||
|
Healthcare
|
10,638 | 15,434 | 3,226 | 4,897 | 7,412 | 10,537 | ||||||||||||||||||
|
Third
Party
|
10,733 | 15,968 | 3,342 | 4,295 | 7,391 | 11,673 | ||||||||||||||||||
|
Total
|
$ | 189,121 | $ | 288,954 | $ | 108,396 | $ | 178,774 | $ | 80,725 | $ | 110,180 | ||||||||||||
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
|
||||||||||||||||||||||
|
December
31,
|
December
31,
|
December
31,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
|
Mattresses
|
$ | 124,755 | $ | 196,614 | $ | 75,695 | $ | 129,054 | $ | 49,060 | $ | 67,560 | ||||||||||||
|
Pillows
|
25,990 | 41,020 | 10,591 | 19,987 | 15,399 | 21,033 | ||||||||||||||||||
|
Other
|
38,376 | 51,320 | 22,110 | 29,733 | 16,266 | 21,587 | ||||||||||||||||||
|
Total
|
$ | 189,121 | $ | 288,954 | $ | 108,396 | $ | 178,774 | $ | 80,725 | $ | 110,180 | ||||||||||||
Summary
of Channel Sales
The
following table highlights net sales information, by channel and by segment, for
the full year of 2008 compared to 2007:
|
($
in thousands)
|
||||||||||||||||||||||||
|
CONSOLIDATED
|
DOMESTIC
|
INTERNATIONAL
|
||||||||||||||||||||||
|
Twelve
Months Ended
|
Twelve
Months Ended
|
Twelve
Months Ended
|
||||||||||||||||||||||
|
December
31,
|
December
31,
|
December
31,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
|
Retail
|
$ | 781,105 | $ | 919,913 | $ | 500,513 | $ | 625,904 | $ | 280,592 | $ | 294,009 | ||||||||||||
|
Direct
|
47,597 | 79,748 | 39,666 | 68,865 | 7,931 | 10,883 | ||||||||||||||||||
|
Healthcare
|
47,087 | 50,846 | 15,276 | 15,725 | 31,811 | 35,121 | ||||||||||||||||||
|
Third
Party
|
52,029 | 56,215 | 15,249 | 14,855 | 36,780 | 41,360 | ||||||||||||||||||
|
Total
|
$ | 927,818 | $ | 1,106,722 | $ | 570,704 | $ | 725,349 | $ | 357,114 | $ | 381,373 | ||||||||||||
Summary
of Product Sales
A summary
of net sales by product is reported below:
|
($
in thousands)
|
||||||||||||||||||||||||
|
CONSOLIDATED
|
DOMESTIC
|
INTERNATIONAL
|
||||||||||||||||||||||
|
Twelve
Months Ended
|
Twelve
Months Ended
|
Twelve
Months Ended
|
||||||||||||||||||||||
|
December
31,
|
December
31,
|
December
31,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
|
Mattresses
|
$ | 631,308 | $ | 768,530 | $ | 412,295 | $ | 535,706 | $ | 219,013 | $ | 232,824 | ||||||||||||
|
Pillows
|
117,900 | 142,114 | 50,772 | 68,342 | 67,128 | 73,772 | ||||||||||||||||||
|
Other
|
178,610 | 196,078 | 107,637 | 121,301 | 70,973 | 74,777 | ||||||||||||||||||
|
Total
|
$ | 927,818 | $ | 1,106,722 | $ | 570,704 | $ | 725,349 | $ | 357,114 | $ | 381,373 | ||||||||||||
TEMPUR-PEDIC
INTERNATIONAL INC. AND SUBSIDIARIES
Reconciliation
of Adjusted Net income, Adjusted Earnings per share,
EBITDA
to Net Income and Funded debt to Total debt
Non-GAAP
Measures
(In
thousands, except per share amounts)
The
Company provides information regarding Adjusted Net income, Adjusted Earnings
per share, 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 Adjusted Net income, Adjusted Earnings per share and EBITDA to
the Company’s Net income and Earnings per share and a reconciliation of 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 impact of the repatriation of foreign earnings.
Management also believes that the use of EBITDA and Funded debt provides
investors with useful information with respect to the terms of the Company’s
credit facility.
Reconciliation
of Adjusted Net income to Net income
The
following table sets forth the reconciliation of the Company’s reported Net
income for the twelve months ended December 31, 2008 to the calculation of
Adjusted Net income for the three and twelve months ended December 31,
2008:
|
Three
Months Ended
|
Twelve
Months Ended
|
|||||||
|
December
31, 2008
|
December
31, 2008
|
|||||||
|
GAAP
Net income
|
$ | 1,055 | $ | 58,868 | ||||
|
Plus:
|
||||||||
|
Tax
provision related to repatriation
of foreign earnings
|
11,631 | 11,631 | ||||||
|
Adjusted
Net income
|
$ | 12,686 | $ | 70,499 | ||||
|
GAAP
Earnings per share, diluted
|
$ | 0.01 | $ | 0.79 | ||||
|
Tax
provision related to repatriation
of foreign earnings
|
0.16 | 0.15 | ||||||
|
Adjusted
Earnings per share, diluted
|
$ | 0.17 | $ | 0.94 | ||||
Reconciliation
of EBITDA to Net income
The
following table sets forth the reconciliation of the Company’s reported Net
income for the twelve months ended December 31, 2008 to the calculation of
EBITDA for the twelve months ended December 31, 2008:
|
Twelve
Months Ended
|
||||
|
December
31, 2008
|
||||
|
GAAP
Net income
|
$ | 58,868 | ||
|
Plus:
|
||||
|
Interest
expense
|
25,123 | |||
|
Income
taxes
|
48,554 | |||
|
Depreciation
& Amortization
|
40,797 | |||
|
EBITDA
|
$ | 173,342 | ||
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:
|
As
of
|
||||
|
December
31, 2008
|
||||
|
GAAP
basis Total debt
|
$ | 419,341 | ||
|
Plus:
|
||||
|
Letters
of credit outstanding
|
2,871 | |||
|
Funded
debt
|
$ | 422,212 | ||
Calculation
of Funded debt to EBITDA
|
As
of
|
||||
|
December
31, 2008
|
||||
|
Funded
debt
|
$ | 422,212 | ||
|
EBITDA
|
173,342 | |||
|
2.44
times
|
||||