TEMPUR SEALY INTERNATIONAL, INC. (NYSE:TPX) Files An 8-K Material Impairments
Item 7.01 Material Impairments.
On January11, 2019, Innovative Mattress Solutions, LLC (“iMS”), a customer of Tempur Sealy International, Inc. (the “Company”), filed a voluntary petition in U.S. Bankruptcy Court for the Eastern District of Kentucky (“Bankruptcy Court”) seeking relief under Chapter 11 of the U.S. Bankruptcy Code (the “iMS Chapter 11 Proceedings”). In connection with the iMS Chapter 11 Proceedings, on January9, 2019, the Company determined that it will record a charge of approximately $21million associated with certain iMS-related assets, primarily made up of trade and other receivables, in the fourth quarter of 2018. No future cash expenditures are anticipated as a result of the fourth quarter charge.
Item 7.01 Regulation FD Disclosure.
On January11, 2019, the Company distributed a press release (the“Press Release”) announcing that the Company agreed, subject to Bankruptcy Court approval, to provide the DIP Financing (as defined below) to iMS in connection with the iMS Chapter 11 Proceedings and its plan to review strategic alternatives related to iMS during the iMS Chapter 11 Proceedings. A copy of the Press Release is furnished as Exhibit99.1 hereto.
The information disclosed to this Item 7.01 (including Exhibit99.1) 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 any such filing.
Item 7.01 Other Events.
On January11, 2019, the Company agreed to provide debtor-in-possession (“DIP”) financing to iMS to facilitate the iMS Chapter 11 Proceedings. Subject to approval by the Bankruptcy Court, (i) the Company has agreed to make available a revolving credit facility to iMS in the aggregate amount of up to $14million (the “DIP Financing”); (ii)the DIP Financing will bear interest at the 3-month London Interbank Offered Rate (LIBOR) plus 10% per annum, payable along with principal on the maturity date of the DIP Financing, which, to the agreed upon terms, could be triggered by specified events but in any case not later than 120days after the filing of iMS’ bankruptcy petition, subject to extension and (iii) the DIP Financing will be secured by a lien on all of the assets of iMS and its subsidiaries and affiliates and will be subject to customary conditions, representations and warranties, covenants and events of default. We cannot provide any assurance that the Bankruptcy Court will approve the DIP Financing on the terms described above, or at all.
Item 7.01 Financial Statements and Exhibits.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K (this “Report”) contains statements that may be characterized as “forward-looking” within the meaning of the federal securities laws, which includes 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 Report, the words “expects,” “anticipates,” “will,” “plan” and variations of such words or similar expressions are intended to identify such statements. These forward-looking statements include, without limitation, statements relating to the Company’s expectations regarding iMS’ ongoing
operations and its plans to optimize its portfolio of retail locations, the causes, length and outcome of the iMS Chapter11 Proceedings, the Company’s review of strategic alternatives related to iMS, and the impact of the iMS bankruptcy on the Company’s results of operation, liquidity or financial position. Any forward-looking statements contained herein 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 any that may be expressed as forward-looking statements in this Report. These risk factors include risks associated with the causes, length and outcome of the iMS Chapter 11 Proceedings; the approval of the DIP Financing by the Bankruptcy Court; the performance of iMS’ on-going operations, including its ability to exit underperforming locations, retain employees, suppliers and customers, and conduct business as usual; iMS’ ability to fund its on-going operations through the DIP Financing; iMS’ use of the funds anticipated to be received in the DIP Financing; iMS’ ability to control costs during the iMS Chapter11 Proceedings; the outcome of the Company’s review of strategic alternatives related to iMS; general economic, financial and industry conditions, particularly conditions relating to the financial performance and related credit issues present in the retail sector, as well as consumer confidence and the availability of consumer financing; changes in interest rates; the impact of the macroeconomic environment in both the U.S. and internationally on iMS and the Company; uncertainties arising from national and global events; industry competition; the effects of consolidation of retailers on revenues and costs; and consumer acceptance and changes in demand for the Company’s products.
Other potential risk factors include the risk factors discussed under the heading “Risk Factors” under ITEM 1A of Part 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018. There may be other factors that may cause actual results to differ materially from the forward-looking statements in this Report. The Company undertakes no obligation to update any forward-looking statement contained herein to reflect events or circumstances after the date on which such statement is made.
TEMPUR SEALY INTERNATIONAL, INC. Exhibit
EX-99.1 2 form8-kjanuary112019exhibi.htm EXHIBIT 99.1 Exhibit Exhibit 99.1TEMPUR SEALY AGREES TO PROVIDE DEBTOR-IN-POSSESSION FINANCING TO INNOVATIVE MATTRESS SOLUTIONSFinancing to enable the bankruptcy process of a long-time Tempur Sealy retailerLEXINGTON,…
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About TEMPUR SEALY INTERNATIONAL, INC. (NYSE:TPX)
Tempur Sealy International, Inc. is a bedding provider. The Company develops, manufactures, markets and distributes bedding products. It operates in two segments: North America, which consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the United States and Canada, and International, which consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America. Its brands include TEMPUR, Tempur-Pedic, Sealy, Sealy Posturepedic, Optimum and Stearns & Foster. It sells products through over two distribution channels in each segment: retail (furniture and bedding retailers, department stores, specialty retailers and warehouse clubs), and other (direct-to-consumer through e-commerce platforms, company-owned stores and call centers, third-party distributors, hospitality and healthcare customers).