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 30, 2009
TEMPUR-PEDIC
INTERNATIONAL INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
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001-31922
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33-1022198
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
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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
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Exhibit
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Description
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99.1
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Tempur-Pedic
International Inc. First Quarter 2009 Investor
Presentation
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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
30, 2009
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Tempur-Pedic
International Inc.
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|||
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By:
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/s/
Dale E. Williams
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Name:
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Dale
E. Williams
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Title:
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Executive
Vice President, Chief Financial Officer &
Secretary
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EXHIBIT
INDEX
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Exhibit
|
Description
|
|
Tempur-Pedic
International Inc. First Quarter 2009 Investor
Presentation
|
Investor Presentation
1Q09
1Q09
2
Forward-Looking
Statements
This
presentation may contain “forward-looking statements,” within the meaning of
federal securities laws, which include information
concerning the Company’s plans, objectives, goals, strategies, future revenues or performance, 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, the Company’s expectations regarding improving the quality and range of existing products,
improving transportation and network design increasing brand awareness and adding new marketing initiatives, international and domestic
growth opportunities, increasing effectiveness with retailers, increasing market share, improving gross margin strengthening direct channel
and online sales efforts, , consumer preferences and behavior, meeting financial obligations, cost and operating expense reductions and
cash flow generation, 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.
concerning the Company’s plans, objectives, goals, strategies, future revenues or performance, 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, the Company’s expectations regarding improving the quality and range of existing products,
improving transportation and network design increasing brand awareness and adding new marketing initiatives, international and domestic
growth opportunities, increasing effectiveness with retailers, increasing market share, improving gross margin strengthening direct channel
and online sales efforts, , consumer preferences and behavior, meeting financial obligations, cost and operating expense reductions and
cash flow generation, 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,
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 U.S. retail furniture channel, including the timing of opening or expanding within large retail
accounts; the Company’s dependence on its significant customers; the Company’s ability to address issues in certain underperforming
international markets; 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; changes in foreign tax rates, including the ability to utilize tax loss carry forwards; rising
commodity costs; the Company’s ability to retain members of its senior management team; the effects of increased interest rates; 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.
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,
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 U.S. retail furniture channel, including the timing of opening or expanding within large retail
accounts; the Company’s dependence on its significant customers; the Company’s ability to address issues in certain underperforming
international markets; 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; changes in foreign tax rates, including the ability to utilize tax loss carry forwards; rising
commodity costs; the Company’s ability to retain members of its senior management team; the effects of increased interest rates; 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.
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.
Mark
Sarvary, President & CEO
4
u Mattress industry
experiencing unprecedented downturn, though the market remains
large (~$13 billion worldwide wholesale)
large (~$13 billion worldwide wholesale)
u 2008 represents by
far the worst year on record for the bedding industry
u 4Q industry sales
volume sharply lower
u Consumer credit,
while still available, has tightened
u Retailer
bankruptcies continue
u Many competitors in
financial distress
Industry
Situational Assessment
5
u Great company with
great potential
u Strong brand, highly
valued by consumer and customers
u Brand recognition
comparable to leading S brands
u Extremely satisfied
consumers who act as enthusiastic promoters
u Most profitable and
best financially positioned mattress company
u Leading share in the
specialty market
u Unique marketing
brings consumers to retail asking for the product
u Advantaged business
structure
u Single product
line
u Global
reach
u Unique pricing and
promotion
u Vertically
integrated
u Differentiated
R&D
Tempur-Pedic
Situational Assessment
6
u Strong management
team with >130 years running large, international businesses
Management
Team
7
u For the short term,
focused on costs and cash flow to ensure we come out of the
current economic environment much stronger than our competitors
current economic environment much stronger than our competitors
u Full compliance with
debt covenants
u Continue to improve
cost structure and set stage for a stronger base in 2010
u Opportunities exist
in both gross margin and operating expenses
u Improve share versus
our relevant competitive set, primarily premium and specialty
u Maintain flexibility
to respond to economic change
u Set stage for growth
in 2010 and beyond
Near-term
Priorities
8
u In 2009, we will set
the stage for growth with focus on key strategic initiatives
u Drive gross margin
improvement
uUtilization rates,
network re-design, sourcing, commodity costs
u Improve
effectiveness with retail customers
uArm retailers with
ready-made advertising to tie our marketing with theirs
u Improve the quality
and range of products
uUtilizing consumer
research to design products for specific consumer needs,
improve existing product line and optimize communications
improve existing product line and optimize communications
u Strengthened direct
response channel
uInvest and
strengthen our on-line presence
u Expand international
household penetration
uStrengthen product
innovation, work closer with retail customers, increased
marketing investment
marketing investment
Long-term
Initiatives
9
u 2008 and current
economic environment is unprecedented
u Current environment
is not the “new normal”
u Great company with
great potential
u For the short term,
focused on costs and cash flow to emerge stronger
u Management is
simultaneously working on initiatives that will enable us to re-ignite
growth when the market recovers
growth when the market recovers
Summary
Dale
Williams, CFO
11
u Planning ’09 volumes
flat to 4Q08
u Pricing
opportunities
u Improving
effectiveness with retailers
u International
household penetration
($
in millions)
For
a discussion of the Company’s performance, please refer to the Company’s press
release for 4Q08 results and the Company’s prior 10K and 10Q
filings.
Net
Sales
12
u Easing commodity
costs
u Transportation &
network redesign
u Operating expense
reductions
u Sourcing
For
a discussion of the Company’s performance, please refer to the Company’s press
release for 4Q08 results and the Company’s prior 10K and 10Q
filings.
Operating
Margin
13
u Receivables
management
u Reduced
inventories
u Repatriation
initiative
($
in millions)
For
a discussion of the Company’s performance, please refer to the Company’s press
release for 4Q08 results and the Company’s prior 10K and 10Q
filings.
Operating
Cash Flow
14
u 3.0x covenant
through July 2012 (maturity)
u Despite economic
environment, held covenant ratio flat in 2H08
u Substantial covenant
cushion
u Anticipate
de-leverage in 2009
($
in millions)
Funded
Debt to EBITDA Covenant
Notes:
1. For
a discussion of the Company’s performance, please refer to the Company’s press
release for 4Q08 results and the Company’s prior 10K and 10Q
filings
2. Please
see appendix for a reconciliation of GAAP to Non-GAAP measures and calculation
of Funded Debt to EBITDA ratio.
15
u Strong
brand
u Leading share in the
Specialty segment
u Most profitable
mattress company
u Credit facility
covenant cushion
u Initiatives to drive
long-term growth of sales and earnings
Conclusion
Appendix
17
Reconciliation
of EBITDA to Net Income and Funded debt to Total debt
Non-GAAP
Measures
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 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 terms of the Company’s credit facility.
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 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 terms of the Company’s credit facility.
The
following tables set forth the reconciliation of the Company’s reported Net
income to the calculation of EBITDA and the reconciliation of the Company’s
reported
Total debt to the calculation of Funded debt:
Total debt to the calculation of Funded debt:
GAAP
to Non-GAAP Reconciliations