-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PB5lCTLvZ8yd+T2hcG463I5S0E4qkRoM6PLvSHUrcYgFUPrVbfuzvYl3PTBCIEcn dlwTMXEo+L0Fmvl41uDHHw== 0001275287-05-001390.txt : 20050421 0001275287-05-001390.hdr.sgml : 20050421 20050421161404 ACCESSION NUMBER: 0001275287-05-001390 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050421 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050421 DATE AS OF CHANGE: 20050421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPUR PEDIC INTERNATIONAL INC CENTRAL INDEX KEY: 0001206264 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 331022198 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31922 FILM NUMBER: 05764954 BUSINESS ADDRESS: STREET 1: 1713 JAGGIE FOX WAY CITY: LEXINGTON STATE: KY ZIP: 40511 BUSINESS PHONE: 859-514-4757 FORMER COMPANY: FORMER CONFORMED NAME: TWI HOLDINGS INC DATE OF NAME CHANGE: 20021119 8-K 1 tp2482.txt ================================================================================ 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) April 21, 2005 TEMPUR-PEDIC INTERNATIONAL INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 001-31922 33-1022198 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation) 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 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 21, 2005, Tempur-Pedic International Inc. issued a press release to announce its financial results for the first quarter ended March 31, 2005, including certain non-GAAP financial results, and to raise its guidance for the full year 2005. This press release includes reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures and 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 "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing 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. (a) Financial Statements of Businesses Acquired. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. 99.1. Press release dated April 21, 2005 titled "Tempur-Pedic International Achieves 45% Net Sales Increase and Record Earnings in First Quarter of 2005". 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: April 21, 2005 Tempur-Pedic International Inc. By: /s/ Robert B. Trussell, Jr --------------------------------- Name: Robert B. Trussell, Jr. Title: Chief Executive Officer EXHIBIT INDEX Exhibit Description - ------- ---------------------------------------------------------------------- 99.1 Press release dated April 21, 2005, titled "Tempur-Pedic International Achieves 45% Net Sales Increase and Record Earnings in First Quarter of 2005". EX-99.1 2 tp2482ex991.txt Exhibit 99.1 TEMPUR-PEDIC INTERNATIONAL ACHIEVES 45% NET SALES INCREASE AND RECORD EARNINGS IN FIRST QUARTER OF 2005 PRO FORMA NET INCOME INCREASES 66% TO $0.27 PER DILUTED SHARE, GAAP NET INCOME INCREASES 127% TO $0.26 PER DILUTED SHARE COMPANY RAISES SALES AND EARNINGS GUIDANCE FOR 2005 LEXINGTON, KY, April 21, 2005 - Tempur-Pedic International Inc. (NYSE: TPX), the market-leading manufacturer, marketer and distributor of premium mattresses and pillows worldwide, today announced record net sales and earnings for the first quarter ended March 31, 2005. FIRST QUARTER 2005 HIGHLIGHTS o Pro forma net income rose 66% to $27.5 million, or $0.27 per diluted share, from $16.6 million, or $0.16 per diluted share, in the first quarter of 2004. The Company reported net income under GAAP of $26.8 million, or $0.26 per diluted share, compared to $11.8 million, or $0.11 per diluted share, in the first quarter of 2004, an increase in net income of 127%. o Net sales rose 45% to $222.4 million from $153.1 million in the first quarter of 2004. o Operating margin increased to 22% from 20% in the first quarter of 2004. o The Company's retail channel continued its strong growth, with net sales rising 62% worldwide. Sales in the U.S. retail channel were especially strong, increasing 74%. o Worldwide, mattress net sales increased 65% on unit growth of 51%. Chief Executive Officer Robert B. Trussell, Jr. commented, "Tempur-Pedic International turned in another stellar performance in the first quarter of 2005, with our best quarter ever in terms of net sales and earnings, as we continued to drive growth through the successful expansion of our retail channel. The key elements of Tempur-Pedic's strategy - our superior products, unique marketing model and expanding distribution capacity - all played an important role in the Company's outstanding performance. We believe we have put all the pieces in place to deliver sustained growth and capitalize on the huge market opportunity that we believe exists in the premium bedding category." President H. Thomas Bryant added, "During the seasonally strong first quarter, Tempur-Pedic continued to generate strong growth in our established accounts and added approximately 330 net furniture retail stores in the U.S., substantially exceeding our target number. These factors combined to increase U.S. furniture retail store sales 91% to $93.4 million for the quarter. In addition, internationally, we added approximately 170 net furniture retail stores. We were also pleased to see signs that the visco-elastic category as a whole is continuing to expand. We believe the superiority of our proprietary Tempur(R) material, combined with the Company's role as `first-mover' in the category, is helping us solidify Tempur-Pedic's worldwide leadership position as the overall market continues to grow. "In addition to generating exceptional financial results, we made excellent progress in our new product initiatives during the past several months. In January, we began delivering our futon product to Japan's large department stores, where the Company's sales representatives are beginning to introduce customers to the features and attributes of this new product. Initial reaction to the futon has been very positive and our next step will be to expand distribution to bedding and futon stores. "More recently, we unveiled `The EuroBed by Tempur-Pedic(TM),' a unique new sleep system that recognizes how important design elements have become in the bedroom. `The EuroBed by Tempur-Pedic(TM)', which represents an important addition to the growing array of products our Company offers, received an enthusiastic response when it was introduced in the U.S. in April this year. The new offering will start shipping in the U.S. in June. "During the first quarter, we increased our advertising spend as planned to continue driving sales and expanding Tempur-Pedic's brand awareness, including a new marketing campaign focused on our pillow offerings. Finally, construction of our new manufacturing facility in Albuquerque, New Mexico proceeded on schedule. We expect the 750,000 square foot factory, which will play a key role in fulfilling the growing demand for Tempur-Pedic's products in North America, to begin operations in the second quarter of 2006." For a complete discussion of pro forma adjustments, see the Supplemental Information included later in this press release. 2005 GUIDANCE Given the Company's strong performance in the first quarter of 2005 and its continued positive outlook for the year, Tempur-Pedic International is increasing the full-year guidance it previously provided for 2005. The Company now expects net sales for 2005 to range from $880 million - $890 million, rather than being in the vicinity of $880 million. It currently expects pro forma diluted net income to range between $1.10 to $1.13 rather than being in the vicinity of $1.10. It also currently expects GAAP diluted earnings per share to range between $1.08 to $1.11 rather than being approximately $1.08. The Company 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 As previously announced, Tempur-Pedic International will host a live conference call featuring Chief Executive Officer Robert Trussell, Jr., President H. Thomas Bryant, and Chief Financial Officer Dale Williams to discuss first quarter financial results today, April 21, 2005 at 5:00 p.m. Eastern Time (2 p.m. Pacific Time). The dial-in number for the conference call is 706-634-0167. 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 April 21, 2005 at 8:00 p.m. Eastern Time through April 28, 2005. To listen to the telephone replay, dial 706-645-9291, conference ID #5309320. 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," which include information concerning one or more of the Company's plans, objectives, goals, strategies, future revenues and performance, capital expenditures, financing needs 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, management's expectations regarding continued growth and its net sales and pro forma and GAAP net income for 2005, the construction of its Albuquerque facility and the timing of new products, 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. Certain of these risk factors 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 "Business-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 to reflect events or circumstances after the date on which it is 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(TM) made from its proprietary Tempur(R) pressure-relieving material: a visco-elastic material that conforms to the body to provide support and help alleviate pressure points. Products are currently sold in 60 countries under the Tempur(R) and Tempur-Pedic(R) brand names. World headquarters for Tempur-Pedic International are 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
Three Months Ended March 31, --------------------------- ($ in thousands, except per share data) 2005 2004 Chg % - --------------------------------------- ------------ ------------ ------------ Net sales $ 222,379 $ 153,123 45% Cost of sales 108,136 71,784 ------------ ------------ Gross profit 114,243 81,339 40% Selling expenses 44,969 34,955 General and administrative expenses 19,090 15,362 Research and development expenses 804 488 ------------ ------------ Operating income 49,380 30,534 62% Other income (expense), net: Interest expense, net (5,363) (6,094) Loss on debt extinguishment (717) (5,381) Other income (expense), net (85) 80 ------------ ------------ Total other expense, net (6,165) (11,395) Income before income taxes 43,215 19,139 Income tax provision 16,465 7,368 ------------ ------------ Net Income $ 26,750 $ 11,771 127% ============ ============ Basic earnings per share $ 0.27 $ 0.12 125% Diluted earnings per share $ 0.26 $ 0.11 136% Dilutive weighted average shares outstanding (in thousands) 103,392 103,074
SUPPLEMENTAL INFORMATION PRO FORMA NET INCOME AND OTHER FINANCIAL DATA To further provide investors useful information, pro forma net income is presented and represents the Company's GAAP net income before non-cash stock-based compensation expense of $0.7 million and $1.5 million for the three months ended March 31, 2005 and 2004, respectively. In addition, for the three months ended March 31, 2004, GAAP net income includes, and pro forma net income excludes, a loss on debt extinguishment totaling $3.3 million, net of tax, relating to the early write-off of capitalized deferred financing costs subsequent to the repayment of the associated debt. The Company believes that excluding non-cash stock-based compensation expense and loss on debt extinguishment provides a measure that is more representative of ongoing costs and therefore more comparable to the Company's historical operations. The following is a reconciliation of GAAP net income to pro forma net income and per share amounts: TEMPUR-PEDIC INTERNATIONAL INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO PRO FORMA NET INCOME, AND OTHER FINANCIAL DATA Three Months Ended March 31, --------------------------- ($ in thousands, except per share data) 2005 2004 - --------------------------------------------- ------------ ------------ GAAP net income $ 26,750 $ 11,771 Non-cash stock-based compensation expense 775 1,499 Loss on debt extinguishment, net of tax - 3,309 ------------ ------------ Pro forma net income $ 27,525 $ 16,579 ============ ============ GAAP net income per share, diluted $ 0.26 $ 0.11 Pro forma net income per share, diluted $ 0.27 $ 0.16 Other financial data Depreciation and amortization $ 7,414 $ 6,894 Net debt $ 247,527 $ 298,222 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 first quarter of 2005 compared to 2004:
CONSOLIDATED DOMESTIC INTERNATIONAL Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, --------------------------- --------------------------- --------------------------- ($ in thousands) 2005 2004 2005 2004 2005 2004 - -------------------- ------------ ------------ ------------ ------------ ------------ ------------ By Sales Channel Retail $ 169,309 $ 104,657 $ 117,185 $ 67,480 $ 52,124 $ 37,177 Direct 28,569 24,979 25,366 21,469 3,203 3,510 Healthcare 12,752 11,841 3,025 2,835 9,727 9,006 Third Party 11,749 11,646 2,354 1,174 9,395 10,472 ------------ ------------ ------------ ------------ ------------ ------------ Total $ 222,379 $ 153,123 $ 147,930 $ 92,958 $ 74,449 $ 60,165 ============ ============ ============ ============ ============ ============ By Segment Domestic $ 147,930 $ 92,958 International 74,449 60,165 ------------ ------------ Total $ 222,379 $ 153,123 ============ ============
SUMMARY OF PRODUCT SALES A summary of net sales by product is reported below:
CONSOLIDATED DOMESTIC INTERNATIONAL Three Months Ended Three Months Ended Three Months Ended March 31, March 31, March 31, --------------------------- --------------------------- --------------------------- ($ in thousands) 2005 2004 2005 2004 2005 2004 - -------------------- ------------ ------------ ------------ ------------ ------------ ------------ Net Sales Mattresses $ 154,092 $ 93,180 $ 111,056 $ 64,656 $ 43,036 $ 28,524 Pillows 33,331 34,852 13,797 12,262 19,534 22,590 Other 34,956 25,091 23,077 16,040 11,879 9,051 ------------ ------------ ------------ ------------ ------------ ------------ Total $ 222,379 $ 153,123 $ 147,930 $ 92,958 $ 74,449 $ 60,165 ============ ============ ============ ============ ============ ============ Units Sold(1) Mattresses 184,319 121,995 111,813 70,940 72,506 51,055 Pillows 630,261 704,099 258,132 252,617 372,129 451,482
(1) Units sold represent net sales after consideration of returned mattresses and pillows and excludes units shipped to fulfill warranty claims and promotional activities. -----END PRIVACY-ENHANCED MESSAGE-----