Tempur Sealy International, Inc. (TPX) Special Call Transcript

TempurSealyInternational,Inc.(NYSE:TPX)SpecialCallJuly8,20248:00AMET CompanyParticipants AubreyMoore-InvestorRelations ScottThompson-Chairman,President&ChiefExecutiveOfficer ConferenceCallParticipantsOperator Goodday,everyoneandwelcometotoday'sTempurSealyInternationalBusinessUpdateCall.Atthistime,allparticipantsareinalisten-onlymode.Pleasenote,thiscallisbeingrecorded.Iwillbestandingbyifyoushouldneedanyassistance. ItisnowmypleasuretoturntheconferenceovertoAubreyMoore,InvestorRelations. AubreyMoore Thankyou,operator.Goodmorning,everyone,andthankyouforparticipatingintoday'scall.I'mjoinedtodaybyScottThompson,Chairman,President,andCEO. Thiscallincludesforward-lookingstatementsthataresubjecttotheSafeHarborprovisionsofthePrivateSecuritiesLitigationReformActof1995.Theseforward-lookingstatementsinvolveuncertainties,andactualresultsmaydiffermateriallyduetoavarietyoffactorsthatcouldadverselyaffectthecompany'sbusiness. Thesefactorsarediscussedinthecompany'sSECfilings,includingitsannualreportsonForm10-KandquarterlyreportsonForm10-Q.Anyforward-lookingstatementspeaksonlyasofthedateonwhichitismade. Thecompanyundertakesnoobligationtoupdateanyforward-lookingstatements.Ourcommentswillsupplementthedetailedinformationprovidedinthepressrelease. Andnowwiththatintroduction,IwillturnthecallovertoScott. ScottThompson Thankyou,Aubrey.Goodmorning,everyone.Andthankyouforjoiningusonourcalltoday.Asweannouncedlastweek,theFTChasinitiatedlitigationtochallengethecombinationofTempurSealyandMattressFirm.Wefeltthatsharingabitmoreinformationwouldbebeneficial,notjustforinvestors,butalsoforouremployees andMattressFirmÂ’semployeeswhodrivethecompany'ssuccesses.We'reworkinghardtoproperlyandtimelycommunicateaconsistentmessagetoallinterestedparties. So,I'dliketotakeamomenttosharesomeremarksonthecurrentsituation,butasI'msureyou'llunderstand,asthisacquisitionisbeingchallengedincourt,thecompany'scommentaryislimited.We'vereceivedsomequestionsviaemailandwe'lladdressthemasappropriatetowardstheendofthecall.Additionally,weareinaquietperiodregardingmarketconditionsandearnings,soI'llnotbeabletocommentonthosetopics.Weexpecttoreportsecond-quarterearningsinthecomingweeks. Turningtothetopicofthecalltoday,we'vebeenworkingconstructivelywiththeFTCtosecureregulatory approvalforthistransactionforoverayear.Sincecomplyingwiththeagency'ssecondrequestonNovember17,2023,wehavevoluntarilygrantedtheFTCsixextensionsoftimetocompleteitsreview.TheFTChasakeyroleasaregulatorybody,andweappreciatetheirextensiveefforttounderstandtheindustryandthetransaction.WhilewespentmoretimeinFTCstaffreviewthanweplanned,wefeltitwasappropriategiventheirimportantjob.WearedisappointedbytheFTC'sposition,buthavealwaysbelievedthistransactionisconsistentwiththelaw,andinthecurrentregulatoryenvironment,we'repreparedforthisstep. Thebeddingindustryishighlycompetitive,offeringconsumersadiverseselectionofproducts,brands,pricepoints,andpurchasingchannels.Brick-and-mortarretailersanddirect-to-consumerbeddingbrandssellmillionsofbeddingproductsonlineeachyear.Infact,webelievee-commerce,whichincludesmattressesatallpricepoints,isthefastestgrowingchannelinourindustry.Ourownwebsitesprovideclearproofpointoftheabilitytosellhigh-endbeddingonline.Additionally,therearethousandsofbrick-and-mortarstoresacrosstheUnitedStateswhereconsumerscanpurchasebeddingproducts,onlyasmallfractionofwhichareoperatedbyMattress Firm.AquickGoogleSearchorevendrivingdownthestreetpresentsnumerousbeddingdistributionoptions.Weremainconfidentthatourcombinationwillunlockincrementalbenefitsforallstakeholders. Inparticular,weareconfidentthatthecombinationwilldriveexceptionalbenefitstoconsumers.MattressFirm'sstrongretailpresencecomplementsTempurSealy'smanufacturingcapability,whichfacilitatesmoretargetedinnovation,improvesthecustomerexperience,andensureshighquality,durableproducts. Additionally,weexpecttoachievecostsynergiesbyleveragingourglobalscaleandverticallyintegratedinfrastructuretodriveefficienciesthroughlogistics,productlifecyclemanagement,manufacturingoptimization,andsourcinginitiatives.AllofthesefactorsallowustofurtherexecuteonTempurSealy'smissiontoimprove sleepofmorepeople'slivesthroughsleep. Wemanufacture100%ofourmattressesweselldomesticallyintheUnitedStates.Letmerereadthatforyou.Wemanufacture100%ofourmattressesweselldomesticallyintheUnitedStates.Supportingthousandsofjobsacross38statesandterritories,wedisagreewiththeFTCÂ’sstatementthatthetransactionmayharmtheU.S.workforce.We'vehadextensivediscussionsaboutthistransactionwithourlaborunionsrepresentingour employees,andthemajorityoftheunionssubmittedletterstosupportthetransactionreflectingtheirbeliefthatthetransactionwillbenefittheirmembersandnotadverselyimpactworkersofotherbeddingcompaniesthattheyrepresent.Noneoftheunionsrepresentingouremployeeshaveexpressedoppositiontothetransaction. Letmebeclearfromthestart.WehaveplannedforandpubliclystatedthatweseeMattressFirmasamulti-brandedbeddingretailer.They'vebeenavaluedretailpartnerformorethan35years,andweknowoneoftheirmanystrengthsistheirdiverseoffering,whi