Sealy sales up 8.6% but year ends with loss
By Furniture Today Staff -- Furniture Today, March 10, 2002
ARCHDALE, N.C — ARCHDALE, N.C — Buoyed by several recent overseas acquisitions, bedding major Sealy said sales rose 8.6% in the fiscal year ended Dec. 2. But various writeoffs and one-time charges led to a net loss of $37.7 million for the year, compared with net income of $15.3 million the previous year.
Sealy's earnings before interest, taxes, depreciation and amortization fell nearly 50% to $100.7 million.
"Despite a difficult economic environment, we were able to accomplish many of our goals," said Sealy Chairman Ron Jones. "Additionally, we took steps in 2001 to build a foundation upon which Sealy can more aggressively take advantage of an economic recovery."
Total sales came to $1.2 billion, of which $1.003 billion represented U.S. sales. Domestic sales were 1.6%, or $16.1 million, above the previous fiscal year, with $9.8 million of that increase attributable to the acquisition of the Bassett bedding brand in 2000.
International sales were boosted by last year's acquisition of Sapsa Bedding, Europe's largest latex producer, and the 2000 acquisition or Rozen SRL in Argentina. However, Rozen also wound up hurting Sealy's earnings, as the company took a $4.4 million charge in the fourth quarter due to the deteriorating economy in Argentina.
Other one-time charges included a third-quarter bad debt charge of $4.2 million related to the bankruptcy of HomeLife Furniture. Sealy also took a third-quarter writedown of $26.3 million representing a reduction of the value of its investment in Mattress Holdings International, which owns minority stakes in sleep shop chains Mattress Discounters and Malachi Mattress, the licensor for Mattress Firm stores.
In its Form 10-K filed with the Securities and Exchange Commission, Sealy said it had sales of $151 million to the two Mattress Holdings affiliates, roughly 15% of total U.S. sales.
| Year ended 12/2(a) | 2001 | 2000 | Change | |
|---|---|---|---|---|
| Sales | $1,196,749,000 | $1,101,542,000 | 8.6% | |
| Operating income | 98,608,000 | 131,245,000 | (24.9%) | |
| Net income | (b)(37,675,000) | (c)15,332,000 | — | |
| (a) The 2001 year is 53 weeks; the 2000 year is 52 weeks. (b) After liquidation of L&M common shares; includes a $2.7 million pretax credit for stock-based compensation, $11.7 million in royalty income, a $1.2 million pretax restructuring charge, a $4.4 million pretax asset impairment charge, a $679,000 extraordinary loss on the early retirement of debt and a $152,000 extraordinary gain, the cumulative effect of an accounting principle charge. (c) After liquidation of L&M common shares; includes a $6.8 million pretax charge for stock-based compensation and $11.4 million in royalty income. | ||||
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