Mattress Discounters 3Q sales slip 4.3%
By Furniture Today Staff -- Furniture Today, November 18, 2001
UPPER MARLBORO, Md. — UPPER MARLBORO, Md. — Mattress Discounters, the nation's biggest chain of sleep shops, said third-quarter sales at its 289 stores slipped 4.3% from a year earlier.
The company, whose recent financial problems have been aggravated by the slumping economy, said the sales decline led to a pretax loss of $4.0 million. Its net loss for the quarter was $102.9 million, due largely to a noncash writeoff of some $99 million worth of deferred tax credits.
Retail sales for the three months ended Sept. 29 totaled $68.9 million, down from $72 million in last year's third quarter. Total sales, including revenues from its mattress manufacturing plants, came to $69.1 million, down from $73.4 million a year ago.
Currently, nearly all bedding produced at its factories is private-label merchandise for Mattress Discounters stores. The company was a major supplier of private-label bedding to Heilig-Meyers before that retailer filed for Chapter 11 bankruptcy protection and closed most of its stores.
In its Form 10-Q filed with the Securities and Exchange Commission, Mattress Discounters said it suffered same-store sales declines in most of the 14 markets where it has stores. The company sold all stores in the Denver market earlier this year, and its financial statement included an operating loss of $1.2 million from those stores for the first nine months of 2001.
At the end of the quarter, the company was not in compliance with several financial convenants in its senior credit agreement, but said it was negotiating with lenders to change the terms of the agreement.
| Quarter ended 9/29 | 2001 | 2000 | Change |
|---|---|---|---|
| Sales | $69,092,000 | $73,367,000 | (5.8%) |
| Operating income | 1,269,000 | 7,782,000 | (83.7%) |
| Net income | (102,941,000) | 1,128,000 | — |
| 9 months ended 9/29 | 2001 | 2000 | Change |
| Sales | $190,554,000 | $212,530,000 | (10.3%) |
| Operating income | (2,553,000) | 17,055,000 | — |
| Net income | (a)(113,826,000) | 954,000 | — |
| (a) Includes a $1.7 million pretax loss on the disposal of assets and a $1.6 million pretax reserve for a Heilig-Meyers receivable. | |||
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