Tempur-Pedic 1Q sales rise 16.4%; profits up 10.7%
By Furniture Today Staff -- Furniture Today, April 30, 2007
Lexington, Ky. — Strong consumer demand pushed first-quarter sales up 16.4% for visco-elastic foam bedding producer and direct marketer Tempur-Pedic, the company reported.
The company said sales grew to $266 million from $228.6 million in the year-ago quarter.
Net income in the quarter came to $29.8 million, compared with $26.9 million in the 2006 first quarter, a 10.7% gain. The latest quarter's profits were affected by stock-based compensation expenses, which increased 127% to $1.8 million in the quarter, and non-recurring charges of $1.8 million for payroll taxes associated with the exercise of certain executive stock options.
In addition, Tempur-Pedic took a bad-debt charge of $1.3 million in the latest quarter to account for the bankruptcy of a U.S. customer.
The company said it had growth across all product and geographic segments. Worldwide mattress revenues rose 16%. U.S. mattress revenues grew by the same percentage, driven by 13% unit growth. Pillow sales rose 23% worldwide, with unit growth of 20%.
President and CEO Thomas Bryant said the company's new manufacturing facility in Albuquerque, N.M., had a smooth startup, with production ahead of expectations.
"However, we believe our first-quarter results were somewhat moderated by limitations on U.S. capacity," Bryant said. "Throughout much of the first quarter, our U.S. business experienced mattress shortages resulting from strong consumer demand, low levels of inventory at the beginning of the year and capacity constraints."
He said the company limited the opening of new accounts to minimize back orders for existing customers. He added the new plant is allowing the company to build inventory and eliminate back orders.
| Tempur-Pedic | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 3/31 | 2007 | 2006 | Change |
| (a) Based on average shares outstanding of 85.8 million in the 2007 quarter and 93.1 million in the 2006 quarter. | |||
| Sales | $266,032,000 | $228,586,000 | 16.4% |
| Operating income | 54,869,000 | 47,905,000 | 14.5% |
| Net income | 29,780,000 | 26,893,000 | 10.7% |
| Earnings per share (a) | 0.35 | 0.29 | 20.7% |
