Good day, ladies and gentlemen, and welcome to the Tempur-Pedic Second Quarter 2011 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. And now I'll turn the conference over to Barry Hytinen. Please begin.

Thanks, Tyrone, and thank you, everyone, for participating in today's call. Joining me in our Lexington headquarters are Mark Sarvary, President and CFO; and Dale Williams, Executive Vice President and Chief Financial Officer. After prepared remarks, we will open the call for Q&A. Forward-looking statements that we make during this call are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements, including the company’s expectations regarding sales and earnings, involve uncertainties. Actual results may differ due to a variety of factors that could adversely affect the company’s business. The factors that could cause actual results to differ materially from those identified include: economic, competitive, operating and other factors discussed in the press release issued today. These factors are also discussed in the company’s SEC filings, including the company’s annual report on Form 10-K under the headings, Special Note Regarding Forward-Looking Statements and Risk Factors. Any forward-looking statements speaks only as of the date on which it is made. The company undertakes no obligations to update any forward-looking statements. The press release, which contains a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures, is posted on the company’s website at tempurpedic.com and filed with the SEC. And now with that introduction, it's my pleasure to turn the call over to Mark.

Thanks, Barry. Good evening, everyone, and thanks for joining us. Today, I'll provide an overview of our performance in the second quarter and an update on our strategic focus areas. Dale will then provide a detailed review of financial results, as well as our updated financial guidance. We are pleased with our second quarter performance, both in the U.S. and internationally. Sales are up 30% from last year and earnings per share were up 65%. In the U.S. and in all the countries where we have reliable data, TEMPUR outgrew the industry. Our market share is growing globally. Gross margin improved by over 400 basis points year-over-year, the result of favorable mix and continued focus on productivity programs and fixed cost leverage. The gross margin improvement allowed us to maintain our commitment to significant investment in marketing, while still expanding operating margin to 24%. As a result of our strong performance in the first half of 2011, and our expectations for the remainder of the year, we are increasing our financial guidance, and Dale will provide details later. Now, I'd like to provide updates on our strategic initiatives. First, the progress that we've made to ensure there's a TEMPUR mattress and pillow that appeals to everyone. In our international markets, the Cloud launch is progressing nicely throughout much of Europe and is beginning in Asia, and we are receiving very positive feedback both from retailers and consumers. In the U.S., we're seeing positive trends in the early days of the Contour rollout, which began distribution in June. Contour is a newly designed line that replaces our TEMPUR Collection for those consumers who prefer the traditional TEMPUR feel. The Contour is planned to roll out quickly, likely complete in advance of the Labor Day shopping period. Also, late in the year,…

Thanks, Mark. I'll focus my commentary on the second quarter financial results and our updated 2011 guidance. In total, second quarter net sales were $342 million, an increase of 30%. On a constant currency basis, sales were up 25%. North American sales increased 29% and international sales were up 34%. On a constant currency basis, our international sales increased 18%, reflecting the positive trends Mark referenced relating to investments in marketing and new products. By channel, in North American retail, net sales were $227 million, an increase of 31%. Internationally, retail sales were up 35% to $72 million. On a product basis, mattresses were up 30% driven by 19% increase in units. North American mattress sales increased 28%, on a 20% increase in units. The increased average in selling price reflects favorable price and mix, partially offset by our close out and increased floor model discounts. In the International segment, mattress sales increased 37%. On a constant-currency basis, international mattress sales were up 20%. International mattress units increased 16%. In total, pillows were up 25%, driven by a 16% increase in units. North American pillow sales increased 19% on unit growth of 18%. International pillow sales were up 31% on a 14% volume increase. On a constant-currency basis, pillows sales internationally increased by 15%. Sales of our other product category, which includes items that are normally sold along with the mattress, were up 34%. Gross margin for the quarter was 52.9%, up 420 basis points year-on-year, and 60 basis points sequentially. On a year-over-year basis, the gross margin improvement related to a variety of factors including favorable mix, our ongoing productivity programs generated improved efficiencies in manufacturing and distribution and fixed cost leverage related to higher production volumes. Partially offsetting these benefits were higher commodity costs and new product launches.…

[Operator Instructions] Our first question is from Brad Thomas of KeyBanc Capital Markets.

Want to just first ask about the Cloud launch internationally. Mark, you mentioned that it was progressing nicely. I was wondering if you could provide a little bit more color in terms of what you were seeing in terms of slot growth in the markets that you've rolled out the product, and what level of sales lift you've seen in those markets?

I mean, we are generally getting not quite. Yes, 2 slots extra from the rollout of the Cloud. So with the 3 products, we're getting generally 2 new slots. And we're getting -- it's still early so it's hard to tell exactly what is the level of incremental. But frankly, it looks pretty good. It looks very similar to what we saw in the U.S. The relative proportion of business that's coming from the Cloud and from the old products is comparable to what we saw with the Cloud here. And that's at something of the order of 50% incremental, 50% or 60% incremental. It's too early to say if that's absolutely going to be the case, but that's what we are seeing so far.

And then in addition to the slot growth, are you seeing a similar lift in terms of your sales in the stores that have had Cloud added in them?

Well, yes, as I said, we're getting the additional slots, and the sales we're getting from that are driving incremental sales. And the answer is yes. Yes, we are getting incremental sales.

Great. And then just a follow-up on the outlook for your input cost. Last quarter, when you gave guidance for oil was it $115 a barrel and have been trending in an upward direction. We're now lower than that, and it hopefully seems to be a little bit more of a benign outlook and you're closer to the point where you would have an idea of what your chemical could cost to the end of the year. What's your expectations at this point for raw materials?

Well, actually our outlook for raw materials hasn't changed much. Our third quarter raw materials are basically locked-in at this point. There's always a slight delay on the upside, on the pricing. So the price increases that we got kind of late in the quarter were what we were expecting to get. So as we sit here today, if oil continues to stay at the more moderate level, we would hope to possibly see some benefit later in the year, but we haven't seen any downward pressure yet or downward opportunity yet on chemical pricing. So our outlook for that has not changed. We did -- we were able to delay it a little bit, so we had a little less impact in the second quarter on chemicals than we were expecting. But those chemical prices are in place now. Certainly, we'll work every day to try to knock them back down, if oil stays with -- in a more moderate level. But it's not always -- as we've often said, our chemical prices are not always moving directly with oil.

Our next question is from Budd Bugatch of Raymond James.

Mark, Dale and Barry, this is actually Chad pinch hitting for Budd. First question, Mark, I think in your commentary you alluded to, obviously, market share gains in the U.S. as well as internationally. I mean, we have a pretty good feel for what the overall market is doing here in the U.S., but could you give us a sense for how you're up 18% in local currency compares to the overall market, or at least some of the key overall markets, that you're rolling out Cloud in?

If you look across the markets, a lot of major markets, quite frankly, most of them are flat or down. And if you look at Germany, the U.K., certainly France, it's sort of -- it is a very tough environment out there. In Spain, it really is tough. And we're doing -- we're doing quite well compared to an industry that is really not doing very well. Obviously, the whole economy in Europe is suffering. Our other businesses in Japan and in Australia, there too, while not as terrible as it is in Europe. There's weak environment and we're doing better. In fact, in Japan, it's really quite bad. So I would say that the compare, if you look at how we're doing relative to the U.S., here at least, there is some growth in the industry, and the rest of the world where we're competing, there is little or none or negative.

Okay. And I guess turning back to the U.S., you alluded to kind of a choppy macro environment and commentary from retailers that traffic has gotten more variable. Have you seen any signs of slowing? Can you give us a sense of how things progressed through the quarter? What business trends look like in early July?

Let me start, and then I think Dale's got a bit more detail. But let me just give you a top line on this. The second half of the quarter, we saw a little bit of strengthening relative to the first half of the quarter. So it kind of got better. But I think the point is you picked up on this is quite right, which is there has been a choppiness. Retailers are saying that literally from day to day, they'll have a good day and then a bad day. They'll have a good weekend and then a bad weekend. And we've heard this from retailers across the country, and we see it from our results. It's sort of, choppy is the right word. And while -- so far this quarter, trends are consistent with what we've been seeing. We continue to see the choppiness. So I don't know, Dale, is there anything you want to add?

No, I think that's -- that covers it.

Okay. And the last one for me, I guess within the U.S., could you tell us what the U.S. furniture and bedding sales were during the quarter, and is there any variance between what you're seeing from full-line furniture stores versus bedding specialists?

The furniture and bedding sales in the quarter were 212.6. And in terms of bedding, specialists versus furniture, we've seen strength on both sides.

[Operator Instructions] Our next question is from Mark Rupe of Longbow Research.

Just on the rollout of the Cloud international, I know you commented kind of maybe from a macro level or from a higher level, but is there any kind of learnings that you found on kind of on a market-by-market basis as you've rolled this out. I know that each of the markets are very different, but is there anything that kind of surprise you one way or another on the Cloud rollout?

You're quite right to say that each of the markets are different. That is true, and I think that there are different sort of variety of reasons. One is the fundamental reasons, the difference is, because almost without exception, every country has a unique retail environment, so that the German retail environment is not totally the same as the French, and not at all the same as the U.K. and so on. So that how we -- the method that it rolls out and the challenges and so on are different by every country, and we've had to customize how we've launched within each country. What is interesting is that obviously, the Cloud bed is a TEMPUR bed that has a softer initial feel. And we had expected a greater degree of variability and how appealing that would be in different countries. A lot of country -- people perceive that some countries prefer to sleep on firmer beds than others, for example. And we found a lot less variability in that than we had thought. So what people profess to like the best and what they actually like the best is [indiscernible] -- what they actually like is more consistent across the countries. There are some outliers. China was different. But fundamentally, across the main European countries, there's more consistency in consumers' preference than I would have guessed.

Okay, perfect. And then on the media spend, I know you cited a fairly significant increase, was that weighted a lot more towards internationally? Is there a number you can point there?

Yes, our overall media spend in the U.S., we saw a media spend increase about 43% on a year-over-year basis internationally, we increased that 84%. So like we said, we're investing internationally.

How much -- [indiscernible] we invested in the U.S.

Yes, I mean, the total media spend for the quarter was right about $36 million. And that was about $10 million in international and the balance in the U.S. So it's a -- we've stepped up investment here, as well as internationally, and we're seeing very positive results from that, actually, in both segments.

That's perfect. And then you called out a price increase on the Contour and the Contour Select. Correct me if I'm wrong, but is that incremental to what you had previously thought on rolling them out when you rolled it out?

We haven't communicated it before, but we've always anticipated doing it. It was -- we introduced -- the prices that we introduced were essentially to be consistent with the products that they were replacing. Now that that replacement has essentially orbit through, we're going to make sure that the products are priced comparably with the other lines and most notably the Cloud. Joseph Altobello - Oppenheimer & Co. Inc.: Okay, perfect. And then just lastly, you called out some new concepts you're looking at for 2012. Without going out into details, did you mention that it was across all product offerings and all regions? Or is there one particular area that you see might have the most meaningful, I guess, hole to fill, if you will?

I don't want to go into great details. First of all, I don't want to go into great details for obvious reasons. But secondly, it is a broad brush. A, it is broad; and B, it is not a single thing.

. Our next question is from John Baugh of Stifel, Nicolaus. John Baugh - Stifel, Nicolaus & Co., Inc.: I was just curious on the Contour rollout and the impact it had on Q2, whether that's -- if you could quantify that and will the impact be lower in Q3 than Q2?

We've got about 40% to 45% of the rollout of the Contour done in Q2. So a little bit higher rollout in Q3. However, the overall impact of the program will be moderate a little bit, because obviously in Q2 on top of the roll out, you also had the discontinuance of the old TEMPUR line, so you had the closeout going on. Now it spilled over a little bit into July, and certainly you can still find that while supplies last, but we're basically out of those now. So from an overall standpoint, Q3, we'll see a little bit more impact of Contour rollout, but a little less impact from the closeout. However, as I stated before, chemicals are going to be up. So I wouldn't be looking for a big growth in gross margins here in Q3. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And then on the -- Dale, on the compensation, you mentioned that in Q2 it's spiking. Does that catch you up for the whole year? How do we think about modeling Q3 and Q4 year-over-year from that line item?

Basically on the 2010 old tip [ph] program, by stepping up to the max payout, the charge we took in 2Q, which you'll find in the Q and it's published tomorrow, was about $1.8 million. However, that gets us current through the second quarter. From catch up for 2010 and the first of 2011, we would see on an ongoing increase in the accrual rate on that particular program of about $300,000 a quarter.

Our next question is from Bob Drbul of Barclays.

Couple of questions I have for you. First, on the international side, can you talk a little bit about the extra club, how you're doing internationally, some of the sort of historical products?

Well, I mean, the growth is coming from the Cloud, or part of the growth is coming from the Cloud. But by no means all of it. And a lot of the growth that will be coming, we're -- well, we are attributing a great deal of the growth that we're getting, which will by nature comes from what you're calling historic business, is driven by the advertising. So we're actually seeing quite good growth in our older products as well as the Cloud.

Yes, I think it's important to remember, Bob, that the Cloud rollout is still progressing. We got it into the Germanic regions right at the end of the first quarter. So in the second quarter, those were the primary countries, Germany, Austria, Switzerland, Benelux. Those were the primary countries selling the Cloud. As the quarter progressed, we got it into kind of Southern Europe, Spain, France, Italy, but not a lot of impact from those countries in the second quarter.

Okay. And can you talk a little bit about in terms of the gross margins within the third quarter, from a mix perspective, when you look at what you guys just delivered in terms of gross margin and the mix benefit, should there be much of a change for the rest of the year on mix?

Well, there's a slight change because as we get past the rollout of the Contour, the margin on the Contour is a little better than what it's replacing. The Cloud Luxe continues to perform very well. That's the 2 primary mix drivers that we'll see in the back half. But beyond that, not a huge change in mix.

And are you seeing any price resistance through any portion of the portfolio over the year on the price increases?

No. I mean, no, we haven't yet. No.

Our next question is from Joe Altobello of Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc.: Thanks. Good afternoon, guys. First question, just a quick one, we've not fully anniversaried the Cloud launch in the U.S., correct?

The Cloud Supreme was launched in the fourth quarter of '09. The base Cloud was launched in the first quarter of 2010, so that's been fully anniversaried. The Luxe, though, is launched late third quarter, early fourth quarter of 2010, so we haven't anniversaried the Luxe yet. Joseph Altobello - Oppenheimer & Co. Inc.: Okay, perfect. And then in terms of the pockets of opportunity that I think Mark referred to earlier, and I understand he doesn't want to go into too much detail there. But sort of a longer-term question, is that all in bedding or are there other opportunities for the TEMPUR material beyond just mattresses and pillows, for example?

There are opportunities for the TEMPUR material, we are in bedding. But frankly, there's opportunities in bedding and that's where we're focused first. We still have a very small unit share. And so we see enormous potential for growth within the bedding industry, and that is where our focus is. Joseph Altobello - Oppenheimer & Co. Inc.: Okay, got it. And just one last one. In terms of the new product launch scheduled for 2012, would those be incremental to your existing SKUs or would they be replacing older lines?

I'm not going to go into details at this stage. Joseph Altobello - Oppenheimer & Co. Inc.: Okay, okay. And actually I lied, just one more if I could. Most of the growth recently has come slots or new slots as well as higher priced products. Your door growth, obviously, has slowed in recent years. Is there a thought to reaccelerating door growth? Or are we going to continue to see additional slot as the key driver of that?

If I may, I would -- I mean, while what you say is true, that slots are growing, we think of it another way. We think of what percentage of the consumers are coming over. And the reason that the slots grow is because the retailer is justified to carry additional products, additional TEMPUR products because an appropriate proportion of their sales come from that range. But what that means is we're getting more consumers to buy our products. And so the question really, or what we think about it, is what proportion or what targets of consumers are we not yet meeting the needs of? So I would say that, yes, there's likely to be more slot growth but I would say that the productivity per slot is still something we're very proud of [ph].

[Operator Instructions] Our next question is from Jon Andersen of William Blair. Jon Andersen - William Blair & Company L.L.C.: I was just wondering if you could refresh my memory on the geographic mix. Are your margins higher outside North America than inside North America, and as the international business, presumably, the growth rate accelerates or we saw it began to accelerate in the second quarter, does that become a favorable driver of gross margin as well?

Yes, Jon, just a quick recap. Internationally, our gross margins are higher than they are in the U.S. And operationally, they're -- it varies a little bit, quarter-to-quarter. But they're 68 to 100 basis points higher internationally from an operational standpoint. Now that's driven by 2 things like most consumer product companies, our price is a little bit higher internationally. The other thing that drives that is the products themselves. As we've often said people in the U.S. like big, thick, fat mattresses. People internationally, don't. So for even a comparably priced mattress, it might be -- it's likely to be thinner in the international markets, therefore, less material in it. So, we have kind of nice combination there internationally where we've got pulled with higher pricing, as well as a little bit lower cost because there's less material in the product. So as the international business growth rate picks up, obviously, we're still in a position where the U.S. growth rate on a constant-currency basis is growing faster, so right now we're really experiencing negative mix. But should the day come, when the day comes that the international growth rate starts exceeding the U.S. growth rate, that would be an additional benefit to overall company margin. Jon Andersen - William Blair & Company L.L.C.: That's helpful. And where are you currently in terms of capacity utilization? I think last time I heard, in the low 40s. And any update on kind of the progress against the multiyear kind of cost savings or productivity program would be helpful.

From a capacity standpoint, we're still, I would say, in the mid-40s. I don't have an exact number in front of me. But that feels right based on where we're tracking, and the volume growth we've seen. On the overall productivity program, as I said, that's been a key driver of our gross margin growth, the productivity initiatives, cover a gamut of areas, it's not just -- we're not talking here of just labor productivity, we're talking machine productivity, we're talking throughput productivity. A key driver is yields. You start with a certain poundage of chemicals and how much good product you get out the back. And then we've made tremendous progress over the last several years in terms of improving yields. And then, it also invokes the whole supply chain in terms of getting more efficient distribution network, in terms of getting more efficient purchasing. So the productivity program has been a tremendous boost to the business from a cost management standpoint and gross margin improvement standpoint. And it's got a long way to go. It's now -- originally it was set up as a 4-year program. Well, the program is not ending anytime soon. It's now part of the fabric and framework of the business. Jon Andersen - William Blair & Company L.L.C.: Okay. And on the Ergo adjustable base, I think you began some advertising for the first time earlier this year. I think you've garnered some incremental distribution and done some training in-store. Are you continuing to see positive progression in terms of the attach rates there? And how would you kind of characterize the opportunity there going forward?

Yes, and it is the focus. And we did the advertising and we are focusing our training particularly for the retail sales, the people who are in the sales teams and then the retailers. And it's paying dividends. Consumers are increasingly buying adjustable bases, our Ergo bases, with the Tempur-Pedic beds. And it's one of these things where our consumers are -- we have very, very high satisfaction rates with -- consumer satisfaction rate of people who buy our beds. But people who buy our beds with an adjustable base have in fact even higher satisfaction rates, and they're very satisfied with the bases. So these adjustable bases are very powerful thing for the consumer. But there are also obviously a good thing for the retailers and for us in terms of increasing the value of the customer. And so we are focused on it and it continues to grow, and it is something that has been important in the first half and will continue to be. Jon Andersen - William Blair & Company L.L.C.: Perfect. One last one if I could. Mark, I think you mentioned Cloud beginning to roll out in Asia. I just wanted to make sure I heard that right then and if there's any color you can provide us there in terms of your update to your China plan, so it would be helpful.

No, it isn't. It's rolling out in Asia. It's in Japan and it's in Australia and it's in China, too. So it is rolling out there, and it is doing well. So it's at as early of the stage as it is in the rest of Europe, but it's so far so good.

Our next question is from Joshua Pollard of Goldman Sachs.

My first question is how much higher are the anticipated margins on your new and redesigned pillows versus the current company average?

Well, compared to our current pillows, the new pillows are in the same ballpark as what we currently have on pillows. Pillows are our highest margin product category. So hardly much better than that, but they're in the same ballpark as what we're currently getting on pillows.

And as you guys look at your overall product suite, is there any anticipation that with this new pillow product, pillows as a percent of total sales could actually pick up? Or is there enough product and pricing changes that from a sales perspective, you guys won't expect much of a change?

Pillows are an important thing for us for several reasons. One, because people love our pillows. And two, as Dale said, they're a good -- they are high-margin products. But one of the things that's particularly good about pillows is that people who own a Tempur-Pedic pillow are much more likely to buy a Tempur-Pedic mattress. So we see them as a very good seeding tool from our marketing point of view. So we're keen to get the number of people who have Tempur-Pedic pillows to grow. And that is part of what the initiative that we'll be launching in Vegas next week is. It's to broaden the range, maintain the margins, but broaden the range to appeal to a wider range of people so that we can get -- so obviously we can sell more, but also so we can continue to see people's affiliation with Tempur-Pedic. So it will grow. It is our expectation that it will grow as a percentage. But I wouldn't see that that's going to change the dynamics of the business on its own. It's not something that's going to change the models in the near term.

That's very clear. Two more of very quick ones. One, on commodity costs in the first half, could you just quantify how much your total commodity cost that was up first half of 2011 versus first half of 2010?

Yes, in the first half, commodity costs were up in the mid to upper single digits. And on our last call, I said for the year we're expecting it to be up in the low double digits for the full year. So obviously, that's expecting increase, much higher commodity cost in the back half. And as I said earlier, we've seen those commodity cost come in, but we're also hopeful, but not expecting. But we will be working diligently to try to improve that. Since oil has moderated a little bit, it seems to have stabilized a little bit.

Last question, is there any way you could actually quantify the impact of the TEMPUR product model close out in the quarter?

Not a lot. There is some minor discount that was shared between us and the retailers. But it wasn't a big impact on the quarter.

Our next question is from Keith Hughes of SunTrust.

Just one question. You were speaking earlier about other product, or other areas to address the product. Given your focus internationally, are we going to the next several years to see more international-only products? Or is it going to be kind of a global approach of what you introduce?

In general, we are becoming -- it is going to be a more global approach for the simple reason that we want to make sure that our R&D people are focused against things which have the biggest bang for the buck. So there are a lot of things that we can -- are looking at. I'm assuming, we're going to put our primary emphasis on those things that have the widest application. So that's the first truth. There are, as I said in my comments, there are -- the collection in Europe is slightly different than the collection in the U.S. Overtime, I anticipate these will become more similar. But it is not something we're going to rush to do. Right now, we have good business models, a good range of products in both areas. But for the future, in the longer run, I see it becoming more -- coming together more.

And one other one. Historically, you've really gone down to the low end of the industry in the United States in terms of the price of products. Has that view changed at all?

Obviously [indiscernible] from time to time, and we've always said that the premium part of the domestic industry is where we're always focused, and it is still a very big part. And we still have a relatively small share. So we see enormous opportunity in the premium mattress in the U.S., and the same is true in the rest of the world. So really, that hasn't changed.

Our next question is from Rob Straus of Gilford Securities.

Just a couple of questions here, a lot has been asked already. Dale, to start, I just want a quick number. On the R&D spend in the quarter, what was that?

I don't have that right in front of me, hang on one -- ask your second question. I'll come back.

Okay, that's fine. And Mark, there was a question earlier asked about the Cloud rollout into Asia. I recall, if correct, your expectations for your Cloud rollout in Europe was a little bit different than that in the U.S. So I would ask, what is your Cloud expectation rollout for Asia as compared to your experiences in both, now, Europe and the U.S.?

Asia is obviously a very broad thing. Australia, I would say is essentially similar to the U.S. I mean, it's not exactly -- for any Australians on the phone, I apologize. But my point is, in broad terms, as a market, our sales in Australia are very comparable in terms of their mix to what they are in America. Japan is obviously a different market. Obviously, a lot of people in Japan sleep on futons till this day, I mean a very large proportion. So our sales are quite different in Japan, much of a greater proportion of pillows and so on. However -- well, the Cloud is being well accepted. So far it's very early, but I see it's doing quite well. In China, it's a bit different. The people there, sleep on very different things. So the Cloud is there and doing okay. I anticipate, at this very early stage, that it's not going to be as big of a business there as our base business, but it's too early to say. But if you ask me right this minute, that's the perception at this moment.

And Rob, on R&D for the quarter, R&D was $2.6 million.

And Mark, I guess that kind of leads me to the next question, just to kind of understand Europe a little bit more. When you consider what you're doing behind the scenes in your R&D program, what are you kind of thinking about when it comes to Asia and all of those different consumer preferences that you just described? And I guess, I'm still thinking primarily product segment-wise, mattresses and pillows, not beyond that.

We, as I said to an earlier question, we are obviously focused on those things, given that we have limited resources and we want to focus on the things that have the biggest bang for the buck. We're going to be biased to what things that can be applied broadly across the globe. There are examples of things and things that we do have on our docket, again I won't get into the detail, which have particular focus in some areas of the world. And if -- that may well -- from time to time, that may make sense. But I think the biggest learning that we've all had over the last few years is that there's more similarity than there is difference. And so that there's more value here in focusing on those things that we can do generally, especially when it comes to developing new technologies, than there is for doing things that are country-specific.

And then I guess, one of the previous comments I think that you had stated was regarding some survey work or maybe as focus groups, and maybe it was in relation to the Cloud rollout in Europe where you said something like what people thought that they've liked didn't necessarily come true when they actually purchased a mattress. And thus, I think the Cloud has outperformed even your expectations in Europe. When you think about that experience, if I have that right, and you continue to do your focused work and your focus group work and your surveys, how do you then consider how consumers are responding to these surveys, if you know there's a little bit of movement in opinion versus what they actually would like?

It's an interesting -- you're right, and you did remember right. The fundamental breakdown is if you ask people, they use words to describe what they would like. Because some people -- and particularly in the U.S., they would say they love a bed that is soft and embracing, that they really feel wrapped around by, almost hugged by. In Europe, people will say, I don't want a bed like that at all. I want a firm bed. So if they're using words, they describe a bed in a way that is what they think they like. But if you -- and we do this all the time now, if you put a sheet over a bed and ask people to lie on it and say rank that on points of out 10, their scores are very different to what they've said in words. And so what we increasingly do now with our testing is to not ask people in words. We conduct extensive research now where we have beds, all covered with white sheets. And we have large groups of people testing them and then ranking them up on a rating. And then asking them what they think they like and then trying to correlate what people say they think, and what they actually like. And we're enhancing that by actually getting sensory work done by people who are trained in this, who can actually systematically describe the difference in how beds feel. It's actually a more complicated problem than you would guess. But in any case, it is something we're very dedicated to. And what we are not doing is taking it first blush to what people say they prefer.

And just last question, regarding the new pillow rollout that you're going to have at the Las Vegas show, is that rollout going to be kind of stepped through countries? Or is that going to sort of go globally and blanket the world?

Initially, that's going to be a U.S.-focused launch. The thing that we're going to show in Vegas -- remember, there are trade shows around the world. The Vegas one is an American one. And this product line is initially focused on the U.S.

Our next question is from Joan Storms of Wedbush Securities.

Just a couple of quick questions. On the marketing, obviously your campaign in the U.S. is built upon ask me and then some work with more specific products including the Cloud and then the Ergo. So I was wondering if you could give us any hints on where the evolution of that marketing campaign may be going, or where you may be looking at going forward?

Well, first of all, we do at this stage intend to evolve that campaign. So we like that campaign. It's doing very well for us. It really captures the core message that we want to communicate, which is that we're encouraging people to ask other people to ask on the web about Tempur-Pedic because obviously the recommendations that they always see is one of our core assets. We are in fact -- we are in fact creating new spots. And frankly, I don't want to share them. Forgive me, but I just don't want to share them with you right now. We are -- but they're going to be tied to some of our focus areas for promotions and so on in the fourth quarter. So forgive me, but I don't want to share them right now.

Okay. And then just a housekeeping question, if you don't have it now, we can talk offline. But just on the 200 doors with most of those being international, can you break down like how many opened in the first half and then I can figure out the second half?

Joan, you've heard that slightly differently, I think. We opened about 50 in the quarter internationally and the rest were in the North American segments.

So it's 200 in the quarter.

Yes.

Okay, okay. And so for the year? Projections?

Projections, we generally don't give projections on doors, Joan, from a standpoint of because it's so fact- and circumstances-determined. But yes, Mark mentioned we're in the process of opening some additional accounts and we cannot update that on a quarterly basis.

Our next question is from Eric Hollowaty of Stephens Inc.

Dale, can you help us think about growth rates in North America versus International going forward? And is it likely that we could see International segment sales growth in percentage terms outpace North America by perhaps the end of this year? Or how should we think about that?

What we said at the start of the year, and really we haven't changed that outlook, was that we expected in the first -- for the year, the U.S. would grow faster than international would for the year. But we expected the international growth rate to improve and ramp throughout the year, because of payback on the marketing investments that we're making and with the launch and rollout of the Cloud and it gets to more and more markets and has more impact. So our expectation was that we would see an increasing growth rate in the international business, but for the year, this year, we're looking for the U.S. business to still outgrow the international business. In the future, beyond this year, yes, we would love to see the international business continue to see a ramp in its growth rate, and we think long-term that potential is that we could start to see a gradual shift back in terms of balance of revenue. Right now, we're running about 70% U.S. or North America, and 30% international. Not too many years ago, it was more 2/3, 1/3. And when I came to the company 8 years ago, it was almost 50/50. So over the long, long term, we would expect international with some of the market opportunities that are out there and some of the emerging markets to outpace the U.S. business in latter years.

This ends the Q&A portion of today's call. I would like to turn the conference over to the company for any closing remarks.

Thanks, everybody, and we look forward to talking with you again in October when we'll review the third quarter. Thanks for joining us this evening.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect and have a wonderful day.