Tempur-Pedic earns profit as sales fall 34.5%
By Larry Thomas -- Furniture Today, January 26, 2009
LEXINGTON, Ky. — Specialty bedding producer Tempur-Pedic said fourth-quarter sales tumbled 34.5%, 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 16.2% 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 58.4% 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.
| Quarter ended 12/31 | 2008 | 2007 | Change |
|---|---|---|---|
| Sales | $189,121,000 | $288,954,000 | (34.5%) |
| Operating income | 25,321,000 | 67,681,000 | (62.6%) |
| Net income | 1,055,000 | 39,930,000 | (97.4%) |
| Earnings per share | 0.01 | 0.52 | (98.1%) |
| Sales | $927,818,000 | $1,106,722,000 | (16.2%) |
| Operating income | 133,864,000 | 244,114,000 | (45.2%) |
| Net income | 58,868,000 | 141,459,000 | (58.4%) |
| Earnings per share | 0.79 | 1.74 | (54.6%) |
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