Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TEMPUR SEALY INTERNATIONAL, INC. | d504903d8k.htm |
| EX-4.4 - EX-4.4 - TEMPUR SEALY INTERNATIONAL, INC. | d504903dex44.htm |
| EX-4.1 - EX-4.1 - TEMPUR SEALY INTERNATIONAL, INC. | d504903dex41.htm |
| EX-4.5 - EX-4.5 - TEMPUR SEALY INTERNATIONAL, INC. | d504903dex45.htm |
| EX-99.1 - EX-99.1 - TEMPUR SEALY INTERNATIONAL, INC. | d504903dex991.htm |
 Tempur-Pedic International
Investor Presentation
March 2013
1
Exhibit 99.2 |
 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, and TEMPUR-Traditional Pillow are trademarks, trade names or service marks of Tempur-Pedic
International Inc. and its subsidiaries.
Sealy, Sealy Posturepedic, Stearns & Foster, and Optimum
are trademarks, trade names or service marks of Sealy Corporation and its subsidiaries. All other trademarks, trade names and service marks in
this presentation are the property of the respective owners.
Forward-Looking Statements
2
This presentation 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," “proposed,”
"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 Tempur-Pedic’s or Sealy’s
expectations regarding the opportunities and strengths of the combined company,
anticipated cost and revenue synergies, the strategic rationale for the
combination, 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 the ability to
successfully integrate Sealy into Tempur-Pedic’s operations and realize synergies from the
proposed transaction; general economic, financial and industry conditions,
particularly in the retail sector, as well as consumer confidence and the
availability of consumer financing; uncertainties arising from global events; the
effects of changes in foreign exchange rates on the combined company's
reported earnings; consumer acceptance of the combined company's
products; industry competition; the efficiency and effectiveness of the combined
company's advertising campaigns and other marketing programs; the combined
company's ability to increase sales productivity within existing retail
accounts and to further penetrate the combined company's domestic retail channel,
including the timing of opening or expanding within large retail accounts;
the combined company's ability to address issues in certain underperforming international markets; the combined 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; rising commodity costs; the effect of future legislative, regulatory
or tax changes; and the possibility that one or more former Sealy stockholders will
pursue their rights to an appraisal action in Delaware relating to the Sealy
merger. 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. |
 3
Best of Both |
 Strong,
Established Management Team 4
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 Brands
The most iconic and globally recognized brands in the industry
Strong brand recognition across North America, South America, Europe, Asia, and
Australia Complementary Product Offering
Products for almost every consumer preference and price point
Tempur-Pedic’s visco-elastic mattresses, adjustable bases and
pillows Sealy’s innerspring and hybrid mattresses
Ability to leverage R&D to develop innovative new products
Truly Global Footprint
Tempur-Pedic: Strong presence in North America, Europe, and Asia
Sealy: Well represented in U.S., Canada, Mexico, Argentina, and Asia
Significant Value Creation
Cost synergy estimate in excess of $40 million by the third year
Attractive upside from revenue synergies across organizations
Strong Financial Characteristics
Significant cash flow characteristics will enable rapid deleveraging
Ability to invest in key growth areas
5 |
 Comprehensive Portfolio of Iconic Brands
Source:
2012
Mattress
Industry
Consumer
Research
–
U.S.
Market
Total Brand Awareness
Future Purchase Interest
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
2004
2006
2008
2010
2012
Leading Brand Awareness with Highest Intent to Purchase
6 |
 Net
Sales Breakdown Geography
7
FY12 Total Net Sales $1.4 Billion
Mattresses
Pillows
Other
North America
International
FY12 Total Net Sales $1.3 Billion
United States
Canada
Other
Innerspring
Specialty
Other
15%
8%
77%
Product
FY12 Total Net Sales $1.4 Billion
FY12 U.S. Net Sales $1.0 Billion
2%
12%
86%
67%
11%
22%
69%
31%
Last 12-months ended December 31, 2012 for Tempur-Pedic and December 2, 2012 for Sealy. For a
discussion of performance, please refer to the 10Q and 10K filings. |
 Range
Of Products 8
Innerspring
Hybrid
Visco
Foundations
Pillows
Accessories
Sealy
Stearns & Foster
Sealy Posturepedic
Sealy Posturepedic
Sealy Posturepedic
TEMPUR-Choice
TEMPUR-Rhapsody
Breeze
Optimum by Sealy
Posturepedic
TEMPUR-Cloud
Luxe
Sealy Foundation
TEMPUR-Ergo Premier Adjustable Base
TEMPUR-Neck
Pillow
TEMPUR-Traditional
Pillow
The CampusTopper
By Tempur-Pedic
TEMPUR Slippers |
 9
1
Retail list price point for queen set. Note: TEMPUR-Choice Collection
expected availability 2Q 2013. 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
U.S.
Mattress
Brand
Portfolio
by
Retail
Price
Points
1 |
 1
Last
12-months
ended
December
31,
2012
for
Tempur-Pedic
and
December
2,
2012
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 Sales
Retail Doors
Broadens presence across price points and
technologies
World-class innovation capabilities
Highly complementary geographic footprint
Furniture and bedding retailers
Department stores
Warehouse / club stores
Company-owned flagship stores
Direct to consumer
Hospitality
$2.7
$1.4
$1.3
14,450
16,700
10
($ in billions)
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
TPX
ZZ
LTM
Broad Customer Base
2
Global
Scale
1
North America
Int’l
North America
Int’l
0
5,000
10,000
15,000
20,000
TPX
ZZ
1 |
 A
Truly Global Company Tempur-Pedic and/or Sealy Presence
Source: Company data. Presence includes subsidiaries, joint ventures, third party,
and licensee markets. 11 |
 Attractive Upside from Cost Synergies
Cost Synergies
Sourcing/Manufacturing
Raw materials
Foundations
Adjustable Bases
Covers
Warehouse/Distribution
Improved route efficiency
Potential to integrate distribution
Backhaul/returns
Corporate Expenses
Streamline corporate administration
Professional fees
Indirect sourcing
In Excess of $40 Million Expected By Third Year
12
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 brands
Leverage collective IP and technology
Leverage Sealy’s competency in Club,
Department Stores, and Hospitality
Leverage 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)
13 |
 Financial Overview |
 15
Use of Non-GAAP Financial Measures
Tempur-Pedic International Inc. (the “Company”) has presented the
following non-GAAP financial measures in this presentation: adjusted
EBITDA of each of the Company 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
Tempur-Pedic’s and Sealy’s GAAP financial measures for the periods presented, are set forth on slide 17.
The
Company
believes
the
use
of
these
non-GAAP
financial
measures
are
useful
to
investors
in
comparing
the
results
of
operations
for
comparable periods by eliminating certain of the more significant effects of
adjusted EBITDA. These measures also reflect how the Company and Sealy
manage their businesses internally. In addition to the adjustments included in the calculation of the Company’s
non-GAAP
adjusted
EBITDA
eliminates
the
effects
of
financing,
income
taxes
and
the
accounting
effects
of
capital
spending
and
acquisitions.
As
with
the
items
eliminated
in
its
calculation
of
non-GAAP
adjusted
EBITDA,
these
items
may
vary
for
different
companies for reasons unrelated to the overall operating performance of a
company’s business. When analyzing Tempur-Pedic’s,
Sealy’s and the combined company’s operating performance, investors
should not consider these non-GAAP financial measures as a substitute
for comparable measures in accordance with GAAP. |
 ($
in millions) Adj. EBITDA & Adj. EBITDA Margin
2
Net Sales
1
1
16
($ in millions)
2
Adjusted EBITDA Margin reflects Adjusted EBITDA (slide 17) divided by the LTM combined net sales. 1
Last 12-months ended December 31, 2012 for Tempur-Pedic and December 2, 2012 for
Sealy (reflecting simple combination of both companies’ results, without any Regulation S-X Article 11 adjustments).
2009
TPX
2010
TPX
2011
TPX
2012
TPX
LTM
Combined
2009
TPX
2010
TPX
2011
TPX
2012
TPX
LTM
Combined
Tempur-Pedic
and
LTM
Combined
1
Financial
Overview |
 17
Adjusted EBITDA Reconciliation
1
Last
12-months
ended
December
31,
2012
for
Tempur-Pedic
and
December
2,
2012
for
Sealy
(reflecting
simple
combination
of
both
companies’
results,
without
any
Regulation
S-X
Article
11
adjustments).
LTM Combined Adjusted EBITDA
($ in millions)
2
Includes Comfort Revolution acquisition costs, noncontrolling interest, and various
immaterial adjustments. Tempur-Pedic
1
Sealy
1
Combined
1
Net income (loss)
$106.8
($1.2)
$105.6
Interest expense
18.8
89.3
108.1
Income taxes
122.4
12.5
134.9
Depreciation and amortization
42.0
26.4
68.4
EBITDA
$290.0
$127.1
$417.1
Transaction costs
8.9
2.5
11.4
Integration costs
2.2
2.2
Refinancing charges
3.7
3.7
Non-cash compensation
8.1
8.1
Restructuring and impairment related charges
1.5
2.4
3.9
Discontinued operations
2.0
2.0
Other
2
4.3
4.3
Adjusted EBITDA
$302.6
$150.1
$452.7 |