Simmons turns profit as sales drop
By Furniture Today Staff -- Furniture Today, November 11, 2001
Atlanta — Simmons Co.'s third-quarter sales tumbled 21.4%, but the bedding producer turned a profit by carefully watching expenses and reducing operating costs.
Net income of $5.1 million for the quarter ended Sept. 29 compares with a loss of $7.7 million for the third quarter of 2000.
Sales for the quarter totaled $177.6 million. This year's third quarter was one week longer than the third quarter of 2000, and Simmons said sales dropped 15.3% when adjusted for the extra week.
Chairman Charlie Eitel said that, given the weak economy and the bankruptcies of three major customers in the past year, he was pleased with the results. "In my opinion, this country is in a recession," he said during a conference call with securities analysts.
Eitel said the three defunct retailers — Montgomery Ward, Heilig-Meyers and HomeLife — represented 12.8% of sales in last year's third quarter. In the meantime, Simmons has opened about 500 new accounts representing 800 stores, and no retailer accounts for more than 4% of total sales, he said.
"Because of the success we had last year with the Beautyrest 2000, we had some very tough top-line comparisons," Eitel said, noting gross margin increased for the 11th straight quarter, due to lower raw materials and labor costs.
| Simmons | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| 13 weeks ended 9/29 (a) | 2001 | 2000 | Change |
| (a) The 2001 periods are 13 and 39 weeks; the 2000 periods are 14 and 40 weeks. (b) After foreign currency translation losses of $44,000 in the 2001 13 weeks, $16,000 in the 2000 14 weeks, $52,000 in the 2001 39 weeks and $23,000 in the 2000 40 weeks; includes pretax ESOP expense charges of $647,000 in the 2001 13 weeks, $1.7 million in the 2000 14 weeks, $1.9 million in the 2001 39 weeks and $5.3 million in the 2000 40 weeks. The 2000 40 weeks also includes a $3.8 million pretax charge for management severance-related compensation and a $1.3 million income tax benefit. |
|||
| Sales | $177,638,000 | $225,928,000 | (21.4%) |
| Operating income | 21,155,000 | 19,800,000 | 6.8% |
| Net income (b) | 5,099,000 | (7,707,000) | ------- |
| 39 weeks ended 9/29 (a) | 2001 | 2000 | Change |
| Sales | $517,736,000 | $551,249,000 | (6.1%) |
| Operating income | 39,718,000 | 33,404,000 | 18.9% |
| Net income (b) | 2,417,000 | (8,573,000) | ------- |
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