Tempur-Pedic earnings rise 6.7% despite sales decline
CEO says company's margins improved in third quarter
Larry Thomas -- Furniture Today, October 16, 2009
LEXINGTON, Ky. — Bedding major Tempur-Pedic said its third-quarter sales fell 11.4% from a year ago, but earnings rose 6.7% due largely to improved production efficiencies and lower commodity costs.The company, which specializes in visco-elastic foam mattresses and pillows, said the results demonstrate the effectiveness of several strategic initiatives that have kept costs in check and improved cash flow.
"Our margins have improved," said Mark Sarvary, CEO. "Our results continue to demonstrate the company's strong cash flow."
Sarvary said debt was reduced by $54 million to $315 million during the quarter, and said $100 million in debt has been repaid thus far in 2009.
Worldwide sales for the quarter ended Sept. 30 totaled $224.1 million, down from $252.8 million in last year's third quarter. Domestic mattress sales, Tempur-Pedic's largest business segment, fell 15% to $103.1 million.
Net income for the quarter totaled $25.7 million or 34 cents per share, up from $24.1 million or 32 cents per share in the same quarter last year.
Sales for the first nine months of 2009 were off 20.6% to $586.4 million, while nine-month earnings fell 3.3% to $55.9 million or 74 cents per share.
Tempur-Pedic said it expects to have earnings of $1 to $1.05 per share for the full year. That's up from a July estimate of 70 cents to 90 cents per share.
The company also said it is projecting sales of $790 million to $805 million for the year. The July estimate was $700 million to $740 million.
"Our recent product introductions and our new advertising campaign, combined with continued productivity improvements will allow us to build on this performance as we move into 2010," Sarvary said.
