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Tempur-Pedic sales tumble 35% in fourth quarter

But company still earns $1.1 million profit

Larry Thomas -- Furniture Today, January 23, 2009

LEXINGTON, Ky. — Specialty bedding producer Tempur-Pedic said fourth-quarter sales tumbled 35%, but the company still managed a profit of slightly more than $1 million.

The company, which produces high-end mattresses and pillows made of visco-elastic foam, said it maintained strong operating cash flow despite the sales slump, and said it paid back nearly $100 million of its debt.

"During the fourth quarter, we executed well in a challenging environment," said Mark Sarvary, CEO. "While consumer spending worsened, we responded quickly to improve earnings."

Worldwide sales totaled $189.1 million in the most recent quarter, compared with $289 million in the fourth quarter of 2007.

The company's domestic business fared worse, with a sales decline of 39%. International sales were 27% below the same period in 2007.

Mattress sales, meanwhile, plunged 41% domestically, and domestic mattress units were down 39%.

Despite all that, Tempur-Pedic earned a quarterly profit of $1.1 million or 1 cent per share. In the fourth quarter of 2007, profits were $39.9 million or 52 cents per share.

Sarvary noted that operating cash flow was $29.5 million in the quarter, compared with a negative cash flow of $3.5 million in the fourth quarter of 2007.

For all of 2008, sales fell 16% to $927.8 million. Domestic mattress sales fell 23% to $412.3 million.

Full-year earnings totaled $58.9 million or 79 cents per share. That's a 58% drop from 2007, when earnings were $141.5 million or $1.74 per share.

The company said it is projecting 2009 sales at $770 million to $790 million, which is approximately 15% to 17% below 2008.

This year's earnings are projected at 70 cents to 90 cents per share.

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Tempur-Pedic earns profit as sales fall 34.5%

Jan 26, 2009

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