Tempur-Pedic Reports Record Third Quarter 2010 Sales and Earnings

Tempur-Pedic International Inc. TPX, the leading manufacturer, marketer and distributor of premium mattresses and pillows worldwide, today announced financial results for the third quarter ended September 30, 2010. The Company also increased full year 2010 financial guidance and expanded its share repurchase authorization. Financial Summary * Earnings per share (EPS) were $0.62 per diluted share in the third quarter of 2010 as compared to $0.34 per diluted share in the third quarter of 2009. The Company reported net income of $44.2 million for the third quarter of 2010 as compared to $25.7 million in the third quarter of 2009. * Net sales increased 32% to $295.8 million in the third quarter of 2010 from $224.1 million in the third quarter of 2009. On a constant currency basis, net sales increased 34%. Net sales in the North American segment increased 47%, while International segment net sales increased 4%. On a constant currency basis, International segment net sales increased 11%. * Mattress sales increased 33% globally. Mattress sales increased 46% in the North American segment and 3% in the International segment. On a constant currency basis, International mattress sales increased 10%. Pillow sales increased 20% globally. Pillow sales increased 39% in North America and 3% internationally. On a constant currency basis, International pillow sales increased 7%. Other product sales increased 37% globally. Other product sales increased 52% in North America and 8% internationally. On a constant currency basis, International other product sales increased 15%. * Gross profit margin was 51.0% as compared to 47.6% in the third quarter of 2009. The gross profit margin increased as a result of fixed cost leverage, improved efficiencies in manufacturing, and favorable product and channel mix, partially offset by higher commodity costs and geographic mix. * Operating profit margin was 23.0% as compared to 19.0% in the third quarter of 2009. The increase was driven by gross profit margin and operating expense leverage. * The Company generated $71.9 million of operating cash flow as compared to $55.0 million in the third quarter of 2009.