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) June 26, 2013
TEMPUR SEALY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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001-31922
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33-1022198
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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1000 Tempur 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 7.01. | Regulation FD Disclosure |
On June 26, 2013, Tempur Sealy International, Inc. (the “Company”) will present at the Oppenheimer Conference (the “Conference”). Attached as Exhibit 99.1 to this report and furnished under this Item 7.01 are copies of slides used by the Company at the Conference.
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.
(d) Exhibits
| Exhibit | Description |
| 99.1 | Tempur Sealy International, Inc. Investor Presentation |
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.
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Date: June 26, 2013
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Tempur-Pedic International Inc.
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By:
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/s/ DALE E WILLIAMS
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Name: Dale E. Williams
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Title: Executive Vice President and Chief Financial Officer
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EXHIBIT INDEX
| Exhibit | Description |
| 99.1 | Tempur Sealy International, Inc. Investor Presentation |
Exhibit 99.1
Tempur Sealy International, Inc.Oppenheimer Consumer ConferenceJune 26, 2013 *
Forward-Looking Statements This investor presentation contains "forward-looking statements," within the meaning of federal securities laws, which include information concerning one or more of the objectives, goals, strategies, and other information of Tempur Sealy International, Inc. (the “Company”) that is not historical information. When used in this investor 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. These forward-looking statements include, without limitation, statements relating to the Company’s expectations regarding the opportunities and strengths of the combined company, anticipated cost and revenue synergies, and the strategic rationale for the combination with Sealy Corporation (“Sealy”), including expectations regarding product offerings, growth opportunities, value creation, and financial strength. 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. 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 risks associated with the Company’s new capital structure and increased debt level; the ability to successfully integrate Sealy into the Company’s operations and realize cost and revenue synergies and other benefits from the transaction; general economic, financial and industry conditions, particularly in the retail sector, as well as consumer confidence and the availability of consumer financing; changes in interest rates; 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 Company’s retail channel, including the timing of opening or expanding within large retail accounts; the Company’s ability to expand brand awareness, distribution and new products; 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; the effects of strategic investments on the Company’s operations; changes in foreign tax rates and changes in tax laws generally, including the ability to utilize tax loss carry forwards; the outcome of various pending tax audits or other tax proceedings; changing commodity costs; the risk that the Company’s final purchase price allocation relating to the Sealy acquisition could be significantly different from the Company’s initial estimated purchase price allocation; and the effect of future legislative or regulatory changes. 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 in the Company’s annual report on Form 10-K and quarterly report on Form 10-Q for the 2013 first quarter, under the headings "Special Note Regarding Forward-Looking Statements" and/or "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. Note Regarding Trademarks, Trade Names and Service Marks: Tempur, Tempur-Pedic, TEMPUR-Cloud Collection, TEMPUR-Cloud Select, TEMPUR-Cloud Supreme, TEMPUR-Cloud Supreme Breeze, TEMPUR-Cloud Luxe, TEMPUR-Cloud Allura, TEMPUR-Cloud Luxe Breeze, TEMPUR-Choice Collection, TEMPUR-Choice Supreme, TEMPUR-Choice Luxe, TEMPUR-Weightless Collection, TEMPUR-Weightless Select, TEMPUR-Weightless Supreme, TEMPUR-Contour Collection, TEMPUR-Contour, TEMPUR-Contour Select, TEMPUR-Contour Signature, TEMPUR-Rhapsody, TEMPUR-Rhapsody Breeze, TEMPUR-Allura, GrandBed, TEMPUR-Simplicity Collection, TEMPUR Original Collection, TEMPUR Sensation Collection, TEMPUR-Ergo Advanced System, TEMPUR-Ergo Premier, TEMPUR-Cloud Pillow, TEMPUR-Neck Pillow, TEMPUR-Symphony Pillow, TEMPUR-Comfort Pillow, TEMPUR-Rhapsody Pillow, TEMPUR-Traditional Pillow, Sealy, Sealy Posturepedic, Stearns & Foster, and Optimum are trademarks, trade names or service marks of Tempur Sealy International, Inc. and its subsidiaries. All other trademarks, trade names and service marks in this presentation are the property of the respective owners. *
* Best of Both
Strong, Established Management Team * Prior Experience Prior Experience Years with Name Position Prior Experience Consumer Products Inter'l Tempur or Sealy Mark Sarvary President and CEO President, Campbell Soup North America CEO, J. Crew Group √ √ 5 President, Stouffer's Frozen Food Division at Nestle David Montgomery EVP and President, President, Rubbermaid Europe International VP, Black & Decker Europe, Middle East, Africa √ √ 10 Larry Rogers CEO of Sealy President and CEO, Sealy Corporation President, Sealy North America √ √ 33 President, Sealy International Dale Williams EVP and CFO CFO, Honeywell Control Products CFO, Saga Systems √ √ 10 CFO, GE Information Systems Tim Yaggi COO Group President, Masco Corporation Joined EVP, Whirlpool Corporation √ √ 2013 Norelco (Philips)
Strategic Benefits of Combination Comprehensive Portfolio of Iconic BrandsThe most iconic and globally recognized brands in the industryStrong brand recognition across North America, South America, Europe, Asia, and AustraliaComplementary Product OfferingProducts for almost every consumer preference and price pointTempur-Pedic’s visco-elastic mattresses, adjustable bases and pillowsSealy’s innerspring and hybrid mattressesAbility to leverage R&D to develop innovative new productsTruly Global FootprintTempur-Pedic: Strong presence in North America, Europe, and AsiaSealy: Well represented in U.S., Canada, Mexico, Argentina, and AsiaSignificant Value CreationCost synergy estimate in excess of $40 million by the third yearAttractive upside from revenue synergies across organizationsStrong Financial CharacteristicsSignificant cash flow characteristics will enable rapid deleveragingAbility to invest in key growth areas *
Comprehensive Portfolio of Iconic Brands Source: 2012 Mattress Industry Consumer Research – U.S. Market Total Brand Awareness Future Purchase Interest 20042006200820102012 20042006200820102012 20042006200820102012 20042006200820102012 20042006200820102012 20042006200820102012 20042006200820102012 20042006200820102012 Leading Brand Awareness with Highest Intent to Purchase *
Range Of Products * Innerspring Hybrid Visco Foundations Pillows Accessories Sealy Stearns & Foster Sealy Posturepedic Sealy Posturepedic Sealy Posturepedic TEMPUR-Choice TEMPUR-Rhapsody Breeze Optimum by SealyPosturepedic TEMPUR-CloudLuxe Sealy Foundation TEMPUR-Ergo Premier Adjustable Base TEMPUR-Neck Pillow TEMPUR-Traditional Pillow The CampusTopperBy Tempur-Pedic TEMPUR Slippers
* U.S. Mattress Brand Portfolio by Retail Price Points1 1 Retail list price point for queen set. Mattress Segmentation $2,499-$7,999 $3,499-$3,999 $1,999-$4,999 $2,199-$2,699 $1,399 $1,399-$4,499 $1,299-$3,799 $599-$1,799 $399-$699
1 Last 12-months ended March 31, 2013 for Tempur-Pedic and March 3, 2013 for Sealy (reflecting simple combination of both companies’ results, without any Regulation S-X Article 11 adjustments). 2 Management estimates. Highly Complementary Global and Channel Footprint Last 12-Months Net Sales1 Retail Doors Broadens presence across price points and technologiesWorld-class innovation capabilitiesHighly complementary geographic footprint Furniture and bedding retailersDepartment storesWarehouse / club storesCompany-owned flagship storesDirect to consumerHospitality $2.7 $1.4 $1.4 Global Scale 1 Broad Customer Base 2 14,450 16,700 * ($ in billions)
A Truly Global Company ` Tempur-Pedic and/or Sealy Presence Source: Company data. Presence includes subsidiaries, joint ventures, third party, and licensee markets. *
Attractive Upside from Cost Synergies Cost Synergies Sourcing/Manufacturing Raw materialsFoundationsAdjustable BasesCovers Warehouse/Distribution Improved route efficiencyPotential to integrate distributionBackhaul/returns Corporate Expenses Streamline corporate administration Professional feesIndirect sourcing $15 Million Expected in 2013, In Excess of $40 Million Expected By Third Year * Note: Management estimates.
Attractive Upside from Revenue Synergies Revenue Synergies Brands / Technology Channels Global Markets New Product Categories Increased investment and innovation in Sealy and Tempur-Pedic brandsLeverage collective IP and technology Leverage Sealy’s competency in Club, Department Stores, and HospitalityLeverage Tempur’s capabilities in Direct and eCommerce Utilize Tempur-Pedic’s and Sealy’s collective strengths in International markets Leverage brand portfolio to expand into new categories (outside of mattresses) *
Financial Overview
* Use of Non-GAAP Financial Measures Tempur Sealy International, Inc. (the “Company”) has presented the following non-GAAP financial measures in this presentation: adjusted EBITDA of each of the Company (which only includes results for the legacy Tempur-Pedic business for the periods prior to March 18, 2013) and Sealy, and adjusted EBITDA of the combined company. The Company and Sealy each define its non-GAAP adjusted EBITDA to exclude the following: (1) interest expense, net; (2) provision for income taxes; and (3) depreciation and amortization expense. The Company and Sealy also exclude certain unusual items and other adjustments permitted in calculating its respective debt covenants in its debt agreements. The reconciliations of these historical non-GAAP measures to each of the Company’s and Sealy’s GAAP financial measures for the periods presented, are set forth on slide 16. The Company believes that the use of these non-GAAP financial measures provides investors with additional useful information with respect to the impact of various costs associated with the acquisition of Sealy. A reconciliation of EBITDA and adjusted EBITDA to the Company’s net income and a reconciliation of total debt to consolidated funded debt are provided in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, which is available on the Company’s website and on the SEC’s website. The Company believes that the use of EBITDA, adjusted EBITDA and funded debt also provides investors with useful information with respect to the terms of the Company’s new debt agreements and the Company’s compliance with key financial covenants. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.
03/31/2012 03/31/2013 Q1 2012 Q1 2013 % ∆ TPX North America $269 $226 (16.0%) TPX International 115 118 1.8% Net Sales $384 $390 1.5% Gross Profit 206 188 (8.5%) % Margin 53.6% 48.3% Adjusted EBITDA $99 $77 (22.2%) % Margin 25.7% 19.7% FCF (2) 38 0 Q1 2013 Summary Results * Q1 2013 vs. Q1 2012 Tempur-Pedic sales decreased in North America (16.0%) and increased 1.8% InternationallyIntroduced Choice Collection, as well as the new Ergo Premier adjustable base, a Cloud Luxe Breeze and the Cloud Allura at the January Vegas Bedding ShowRollout of Ergo Premier adjustable base started late in 1st quarter, with bulk of floor models shipping during 2nd quarterChoice Collection is initially comprised of 2 mattress models, priced at higher end of Company price range; started shipping in 2QSealy also introduced its new Sealy Posturepedic line, as well as several new Stearns & Foster productsGross margin contraction was primarily due to product mix and increased promotions and discounts which were partially offset by lower commodity costs and positive geographic mixLower operating income driven by reduced gross margin and deleverage of certain operating expenses related to lower sales Commentary Financials ($ in millions) Sealy(1) -- 47 -- Net Income $56 $38 (32.2%) (3) EBIT $86 $44 (48.5%) % Margin 22.4% 11.4% Source: Company filings. Represents Sealy operations from March 18, 2013 – March 31, 2013. 2012 periods do not include any Sealy results of operations.Free cash flow defined as operating cash flow minus capital expenditures.Reflects adjusted Net Income as provided in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.
* Adjusted EBITDA Reconciliation For more information regarding EBTIDA and these adjustments please refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 (reflecting simple combination of both companies’ results, without any Regulation S-X Article 11 adjustments). 1 Last 12-months ended March 31, 2013 for Tempur-Pedic and March 3, 2013 for Sealy. LTM Combined Adjusted EBITDA ($ in millions)