Sealy 4Q sales climb 8.4%
By Larry Thomas -- Furniture Today, February 25, 2007
Archdale, N.C. — Spurred by significant growth in its international and specialty bedding businesses, mattress producer Sealy Corp. said sales in its fourth quarter were 8.4% above the comparable period in 2005.
International sales, which accounted for just under 30% of Sealy's total, leaped 26.1% in the quarter ended Nov. 26, while domestic sales rose 2.8% despite a slight decline in units.
Additionally, net income increased by over 40%, even though the company had one-time expenses of $5.9 million related to the launch of its new product line.
Worldwide sales in the quarter totaled $395.3 million, up from $364.6 million for the same period in 2005. Net income for the world's largest bedding producer came to $21.5 million, compared with $15.2 million in last year's final quarter.
"I am pleased with our achievements in 2006, including over 20% growth in our international markets, a near doubling of our specialty business, and an improving trend in domestic unit shipments," said Chairman and CEO Dave McIlquham. "We accomplished this despite a challenging industry and competitive environment during a year in which we also completed the biggest product transition in the company's history."
During a conference call with securities analysts, McIlquham said Sealy's specialty bedding business has been helped by the recent startup of a latex production plant in Pennsylvania and a recent price cut implemented on portions of its memory foam line.
He said the company's domestic innerspring business remains soft, reflecting an industry trend, and said he doubts the situation will change before the second half of the year. Domestic unit shipments were off 1.6% in the quarter, a much smaller decline than in the previous two quarters, he noted.
"We are pleased, although still very cautious, about the positive trends in our domestic unit volume," McIlquham said.
For the year, worldwide sales totaled $1.6 billion, an increase of 7.7% from $1.5 billion in fiscal 2005. Net income for the year totaled $74 million or 83 cents per share, compared with $68.5 million or 91 cents per share, the previous year, when Sealy had far fewer shares outstanding.
The fiscal 2006 results included $28.5 million in expenses for its initial public stock offering, as well as $9.9 million in refinancing costs.
| Sealy | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Year ended 11/26 | 2006 | 2005 | Change |
| (a) Includes pretax expense of $28.5 million in the 2006 year associated with the initial public offering of stock. Also includes pretax expenses for debt extinguishment and refinancing of $9.9 million in the 2006 year and $6.2 million in the 2005 year. (b) Based on average shares outstanding of 89.6 million in the 2006 year and 75.4 million in the 2005 year. |
|||
| Sales | $1,582,843,000 | $1,469,574,000 | 7.7% |
| Operating income | 208,302,000 | 195,315,000 | 6.6% |
| Net income (a) | 73,967,000 | 68,479,000 | 8.0% |
| Earnings per share (b) | 0.83 | 0.91 | (8.8%) |
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