Strong 4Q helps Simmons Canada to 9.3% profit gain in yr.
By Michael J. Knell -- Furniture Today, March 20, 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 revenues of C$30.5 million were up 4.4% from the same period the prior year. Net income rose 18.3% to C$2.4 million or 30 cents per trust unit from C$2 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 Terry Pace, president and CEO of Simmons Canada.
Revenues for the year were C$128.8 million, essentially flat with 2003. Net income, however, rose 9.3% to C$10.2 million from C$9.4 million a year ago.
Cash distributions to unit holders in the year totaled C$8.3 million or C$1.08 per trust unit, up from C$7.9 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 Pace. "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 January Toronto market, 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.
| SCI Income Trust (a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Year ended 12/31 | 2004 | 2003 | Change |
| (a) In Canadian dollars. |
|||
| Revenues | C$128,788,000 | C$129,032,000 | (0.2%) |
| Operating income | 16,276,000 | 14,881,000 | 9.4% |
| Net income | 10,237,000 | 9,364,000 | 9.3% |
| Earnings per unit | 1.32 | 1.21 | 9.1% |
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12/07/2002
