Opinion ID: 2982900
Heading Depth: 2
Heading Rank: 7

Heading: April 19 Earnings Call

Text: Shortly after the company issued the press release reaffirming its full-year guidance, Sarvary and Williams answered several questions about competition during an earnings call with industry analysts. Sarvary acknowledged from the outset that the company faced “significant new competitive launches and aggressive price promotion in the industry[] as it has moved increasingly toward non-spring mattresses.” (R. 91-20, Apr. 19, 2012 Earnings Call Tr. at 4.) One analyst asked whether increased competition influenced the decision to adhere to their original guidance after a better-than-expected first quarter: I think you’ve had some branded competition in this space for almost a year now. Is there something that’s changed in the landscape in the last three months or so? Is the competition getting more price-competitive? Have there been new entrants in the last three months? Or, has something changed recently that’s caused you to tone down your comments today? (Id. at 10.) Sarvary responded that “there’s been competition forever, and the competition, we’ve always said, is very strong,” and suggested that the company’s competitors were “very promotional and very focused on price.” (Id.) Another analyst pressed Williams and Sarvary to address whether they thought the growing demand for specialty mattresses reflected a “different approach that’s being taken by some of your competitors.” (Id. at 12–13.) Sarvary replied that the trend “provides us an opportunity” and “it’s happening something like we expected.” (Id. at 13.) Relying on Helwig, the pension funds argue that Williams and Sarvary incurred a duty to disclose Serta’s adverse effect on Tempur-Pedic’s sales when they chose to speak about competition on April 19. But they fail to explain how statements acknowledging “significant - 16 - Case No. 14-5696 Pension Fund Grp. et al. v. Tempur-Pedic Int’l, Inc. et al. new competitive launches” and “strong competition” required them to also disclose Serta’s specific effects on their business. Helwig requires defendants to disclose information “essential to complete a picture they had only partially revealed.” 251 F.3d at 560. Here, Williams and Sarvary spoke fully when they acknowledged increased competition; they were not required to mention specific competitors to avoid misleading investors.