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William Blair & Company Initiates Coverage of Tempur-Pedic International Inc. With Outperform Rating.

CHICAGO -- William Blair
People:
  • William M. Blair, investment banker from Chicago
  • William J. L. Blair, Tony Blair's brother
  • William W. Blair (1828–1896), leader in the Reorganized Church of Jesus Christ of Latter Day Saints (RLDS Church)
 & Company initiated research coverage of Tempur-Pedic International Inc. (NYSE NYSE

See: New York Stock Exchange
: TPX TPX - Terminal Productivity eXecutive ) ($34.80), the leader in specialty sleep products, with an Outperform Outperform

An analyst recommendation meaning a stock is expected to do slightly better than the market return.

Notes:
Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy.
 rating and Aggressive Growth company profile.

Analyst Jack Murphy The name Jack Murphy can refer to:
  • Jack Roland Murphy (born 1938), a convicted robber and murderer
  • Jack Murphy (sportswriter) (1923-1980), a former San Diego sportswriter and brother of Bob Murphy
  • Jack M. Murphy, a Lieutenant Governor of Idaho
 estimated that the company, which manufactures, markets, and distributes premium mattresses and pillows made of the proprietary pressure-relieving TEMPUR material, would earn $1.74 per share in 2007 and $2.12 per share in 2008.

"We believe Tempur-Pedic's differentiated product, growing brand awareness, and strong relationships with retailers and distributors support continued growth in the company's 8% share of the $7 billion U.S. bedding industry and growth from a midsingle-digit international market share," Murphy said.

"We expect margins to expand by approximately 300 basis points over the long term, driven by production efficiency, distribution gains, sourcing, and leverage of fixed expenses. Free cash flow and return on invested capital of 25% are set to improve following the completion of a third manufacturing facility in early 2007," he added. "We believe the company should enjoy several years of profitable growth. We expect long-term Long-term

Three or more years. In the context of accounting, more than 1 year.


long-term

1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term.
 sales growth of 12% to be driven largely by wholesale sales to retailers. Assuming scale-driven margin gains and share repurchases Share Repurchase

A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued.
, our long-term EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format.  growth estimate is 15%-16%."

William Blair & Company, L.L.C. has received compensation for investment banking services from the company within the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next 3 months.

William Blair & Company, L.L.C. (www.williamblair.com) is a Chicago-based investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost. We place a high value on the enduring nature of our client relationships, the quality of our products and services, and the continuity and integrity of our people.

For important disclosures and information regarding the firm's rating system, valuation methods and potential conflicts of interest, please visit: http://www.williamblair.com/Pages/news_story_dept.asp?uid=1284&depID=4

Additional information is available upon request.
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Publication:Business Wire
Article Type:Company overview
Date:Oct 31, 2007
Words:372
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