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Tempur-Pedic's 2005 sales up 22.2%, earnings 32.4%

Profit at high end of forecast

Larry Thomas -- Furniture Today, January 27, 2006

LEXINGTON, Ky. -- Tempur-Pedic, the largest U.S. producer of visco-elastic foam mattresses and pillows, said net sales were up 22.2% in 2005 while net income rose 32.4%.

The company said worldwide sales totaled $836.7 million for the year, compared with $684.9 million in 2004. Net income of $99.3 million or 97 cents per share was up from $75 million or 73 cents per share in 2004.

Those totals include U.S. mattress sales of $391.9 million in 2005 and $302.5 million in 2004.

“It was a solid year with continued growth in net sales and earnings,” said CEO Robert Trussell Jr. “We were very pleased to deliver earnings per share at the high end of our expectations, even though sales were less than guidance.”

The company said sales were less than expected in the fourth quarter because higher raw materials and transportation costs may have driven some consumers to the sidelines.

And executives believe the growth will continue at a somewhat slower pace in 2006, leading them to delay the planned opening of a second U.S. factory in Albuquerque, N.M. The plant, originally set to open in July, is now scheduled for a November or December opening, executives said Thursday during a conference call with securities analysts.

Tempur-Pedic President H. Thomas Bryant told analysts the company has embarked on several initiatives to accelerate its U.S. sales growth.

Steps include an increase in marketing spending, a doubling of its research and development expenditures, and a beefed-up sales force to market two new mattresses the company is introducing at next week’s Las Vegas Market.

Fourth-quarter worldwide sales rose 8.7% to $215.6 million while net income jumped 27% to $30.4 million or 30 cents per share.

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