Sleep Country Canada sales, earnings jump
By Michael J. Knell -- Furniture Today, March 14, 2005
Toronto — Increases in market share and unit sales in the fourth quarter and year drove double-digit jumps in sales and earnings for Sleep Country Canada, the country's largest specialty bedding retailer.
Fourth-quarter revenues rose 14.1% to C$50.4 million from C$44.2 million in 2003's final quarter. Net earnings leaped 69.7% to C$4.3 million from the prior period's C$2.6 million. Same-store sales increased 8.5%.
For the year, revenues sprinted to C$195.4 million, up 18.1% over 2003. Parent Sleep Country Income Fund reported 2003 revenues of C$123.7 million, covering the period from April 15, the day the fund went public, to Dec. 31, 2003.
Net earnings in 2004 were C$19 million. The company didn't provide comparable figures for all of 2003, but reported net income of C$10.6 million from April 15 to Dec. 31.
Earnings before interest, taxes, depreciation and amortization advanced 26.4% to C$28.4 million for the year. Management believes EBITDA is a better measure of company performance.
CEO Stephen Gunn said, "We ended 2004 in our best financial condition ever, with C$5.8 million more in cash than a year earlier, despite two distribution increases."
President Christine Magee said, "We continue to see strong performance from existing and new in-fill stores, with strong comparable-store sales growth of 12.3% for the year. Overall, the number of mattress sets delivered increased by 14.1% in 2004 compared to 2003."
"We believe we have achieved significant market share gains, (with) our gains greater than those achieved by the industry as a whole," Gunn said.
Fourth-quarter EBITDA declined to C$5.9 million from C$6.5 million a year ago due to a special one-time bonus accrued in the fourth quarter to be paid to all Sleep Country employees. Without the bonus, EBITDA in the latest quarter would have been C$7.2 million.
Magee said the bonus averaged C$1,500 per employee.
In the fourth quarter, three stores were opened in metro Toronto. At year's end, the company had 95 stores in seven regions, compared to 87 units a year earlier. Sleep Country remains on track to enter the Winnipeg, Manitoba, market in fall 2005, and to open as many as seven in-fill stores elsewhere.
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