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Sealy revenue up 3% in yr.

By Furniture Today Staff -- Furniture Today, March 9, 2003

Archdale, N.C. — Aided by a double-digit jump in international sales, bedding industry sales leader Sealy Inc. reported revenues rose 3% to $1.2 billion in its fiscal year ended Dec. 1.

Domestic sales, which don't include revenue from its lone U.S. bedding licensee in Paterson, N.J., essentially were flat for the year, rising 0.6% to $972.4 million.

Excluding charges for liquidating common shares, the company earned a profit $16.9 million in fiscal 2002, compared with a net loss of $20.8 million for the year ended Dec. 2, 2001. Sealy also said earnings before interest, taxes, depreciation and amortization rose 16.1% to $119.2 million.

"In spite of the challenging economic environment, we recorded another year of record sales, delivered a strong operating profit ... and paid down over $42 million of debt," said David McIlquham, president and chief executive officer.

Sales for the fourth quarter, which was one week shorter than the fourth quarter of 2001, dropped 9.8% to $284 million.

Sealy's 2001 and 2002 sales figures reflect an accounting change requiring manufacturers to reduce net sales by the amount of cash incentives given to retailers. Such incentives had been classified as marketing and selling expenses. Sealy said the accounting change reduced net sales by $51.5 million in 2002 and $42.7 million in 2001.

The company also noted that its most recent year was a 53-week fiscal year. Excluding the effect of the extra week, total sales rose 5.3%.

Sealy's income would have been higher than the reported $16.9 million had it not been for several one-time charges, some stemming from the closing of two factories and the divestiture of Mattress Firm, a retail affiliate.

Sealy
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
Year ended 12/1	2002	2001	Change
(a) After liquidation preference charges for common shares of $18.6 million in the 2002 year and $16.9 million in the 2001 year; includes pretax plant closing and restructuring charges of $2.8 million in the 2002 year and $1.2 million in the 2001 year. The 2002 year also includes a $771,000 pretax charge for stock-based compensation. The 2001 year also includes a $2.7 million pretax credit on the reversal of a stock-based compensation charge, a $4.4 million pretax asset impairment charge, a $679,000 extraordinary loss on the early extinquishment of debt and a $152,000 extraordinary gain, the cumulative effect of an accounting principle change.
Sales	$1,189,168,000	$1,154,053,000	3.0%
Operating income	99,040,000	98,608,000	0.4%
Net income(a)	(1,679,000)	(37,675,000)	—
Earnings per share	(0.05)	(1.21)	—

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