Simmons Canada notes strong 4Q
Revenue rises 4.5%
Michael Knell -- Furniture Today, March 8, 2005
MISSISSAUGA, Ontario -- A robust fourth quarter coupled with determined efforts to contain costs led to improved profits on relatively flat sales last year for SCI Income Trust, parent of bedding major Simmons Canada.
Fourth quarter revenue of C$30.5 million was up about 4.5% from the same period the prior year. Net income rose 18.3%, to C$2.39 million or 30 cents per trust unit from C$2.02 million or 26 cents per unit.
“Our fourth quarter was particularly strong with bedding volumes and sales exceeding last year’s fourth quarter by 8% and 4%, respectively,” said
Revenue for the year was C$128.8 million, essentially flat with 2003. Net income, however, rose 9.4% to C$10.2 million or C$1.32 per trust unit.
Cash distributions to unit holders for the year total C$8.35 million or C$1.08 per trust unit, up from C$7.88 million or C$1.02 per trust unit paid in 2003.
“Although revenue growth was challenged by continued retail pricing pressures and aggressive competitive activity, our net income grew due to favorable product mix, reduced manufacturing costs and favorable foreign exchange on importation of raw materials,” said Terry Pace, president and CEO of Simmons Canada. “This performance would have been even better except for the impact of significant increases in steel costs during 2004 and higher pension and regulatory costs.”
Thanks to strong retail reaction to Simmons Canada’s offerings at the Canadian Home Furnishings Market in January, Pace said he is confident about the company’s prospects for 2005. New products included the redesigned Beautyrest mattress with the Evolution non-flip pocket coil.
“We believe this new patent pending technology is a significant addition to an already outstanding product lineup,” he said.
Simmons Canada distributes bedding and contracts the manufacture of Hide-A-Bed convertible sofas and other upholstery products and furniture.
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