Sealy 1Q earnings up 7.2%
By Furniture Today Staff -- Furniture Today, April 8, 2007
Archdale, N.C. — Bedding major Sealy Corp. said first-quarter earnings rose 7.2% on a 4.3% increase in sales.
Much of the sales growth came in its international division, where shipments were 18.1% ahead of the previous year's first quarter and unit volume jumped 33.2%.
Domestically, net sales were only 0.7% ahead of the comparable period a year ago, despite a 4.5% increase in unit volume.
"The momentum in domestic volume ... continued during the first quarter as unit growth turned positive, due primarily to the strength in our promotional and specialty bedding product lines," said David McIlquham, chairman and CEO.
Pricing pressures in the promotional line, however, squeezed margins. For the quarter, the gross margin stood at 43%, compared with 44.7% in last year's first quarter.
Total sales for the quarter ended Feb. 25 were $412.6 million, and net income was $24.6 million or 26 cents per share.
During a conference call with securities analysts, McIlquham said Sealy's specialty bedding products also performed well during the quarter.
Some of the strongest demand was registered for its latex foam products, and he said the company's new latex plant in Mountain Top, Pa., recently began production. The plant should be operating on a three-shift production schedule by the end of the third quarter, he said.
| Sealy | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 2/25 | 2007 | 2006 | Change |
| (a) Includes royalty income, net of royalty expenses, of $5.3 million in the 2007 quarter and $3.7 million in the 2006 quarter Also includes a charge of $287,000 in the 2006 quarter for the cumulative effect of an accounting change. (b) Based on average shares outstanding of 96.6 million in the 2007 quarter and 76.4 million in the 2006 quarter. | |||
| Sales | 412,567,000 | 395,735,000 | 4.3% |
| Operating income | 50,361,000 | 53,093,000 | (4.6%) |
| Net income (a) | 24,634,000 | 22,972,000 | 7.2% |
| Earnings per share (b) | 0.26 | 0.30 | (13.3%) |
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