Simmons posts first-quarter loss of $3.2M
By Larry Thomas -- Furniture Today, July 6, 2009
ATLANTA — Bedding major Simmons, which is in the midst of a financial restructuring, reported a first-quarter net loss of $3.2 million as sales fell 19.6%.
The loss, which included $7.4 million in restructuring costs, reversed a profit of $2.5 million in last year's first quarter.
“While our sales performance was in line with our expectations, it was our cost reduction efforts that highlighted our performance,” said Steve Fendrich, president and CEO.
Worldwide sales for the quarter ended March 28 totaled $222.6 million, compared with $276.9 million in the same period in 2008.
Domestic bedding sales fell 16.9% to $203.6 million. The company said domestic unit volume was down 18.2%, but the average unit selling price was up 1%.
“We have significantly reduced our cost structure over the past year, and I am very proud of how the team at Simmons has performed in very tough circumstances,” Fendrich said. “We remain focused on providing the most relevant products for our customers and we will continue to develop new products to help make our dealers more successful.”
Fendrich noted that gross margin for the quarter was 42.6%, compared with 39.6% in last year's first quarter.
The company also said its adjusted earnings before interest, taxes, depreciation and amortization rose to $35.3 million, or 15.9% of sales, in the recent quarter from $33 million, or 11.9% of sales, a year ago.
Simmons, which has more than $980 million in debt, has been operating since last fall under a series of forbearance agreements from its senior lenders and holders of its senior subordinated notes. The agreements were put in place after the company failed to comply with some of its loan covenants and missed payments on the notes. The most recent agreements expire Aug. 14.
Simmons
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| (a) Includes licensing revenues of $2.1 million in the 2009 quarter and $2.6 million in the 2008 quarter. Also includes financial reorganization charges of $7.4 million in the 2009 quarter. |
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| Quarter ended 5/28 | 2009 | 2008 | Change |
| Sales | $222,567,000 | $276,881,000 | (19.6%) |
| Operating income | 18,188,000 | 21,123,000 | (13.9%) |
| Net income (a) | (3,221,000) | 2,515,000 | — |
| Earnings per share | NA | NA | NA |
