Simmons sales rise 13.4%
By Larry Thomas -- Furniture Today, May 21, 2007
Atlanta — Buoyed by an 11.2% increase in units sold, bedding major Simmons said first-quarter sales were 13.4% ahead of last year's first quarter.
Net income, however, fell more than 31%, due largely to costs stemming from the rollout of its new Beautyrest line.
Sales in the quarter totaled $267.4 million, compared with $235.9 million in the first quarter of 2006. Net income in the first quarter was $4.4 million, down from $6.4 million last year. The most recent quarter included about $11 million in costs related to the rollout.
Last year's first quarter included $18.9 million in sales from Sleep Country USA, a retail chain Simmons sold last August. This year's first quarter included $29.4 million in sales from the company's Canadian operations, which Simmons acquired in November.
U.S. wholesale sales were 9.8% ahead of last year's first quarter, said Simmons Chairman Charlie Eitel.
"The strong sales momentum we had in 2006 continued into the first quarter of 2007," he said. "The rollout of our new Beautyrest product line, which is being well received by dealers and consumers alike ... will be completed by early June."
During a conference call with securities analysts, Eitel said much of the company's recent growth is due to increased sales to existing Simmons dealers.
"All I know is that our beds are flying off the floor, and we're running everything (at our factories) wide open," he told analysts.
He said the company has gained market share in each the past five quarters and estimated that Simmons' market share is slightly more than 15%.
| Simmons | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 3/31 | 2007 | 2006 | Change |
| (a) Includes reorganization expense including management severance of $620,000 in the 2007 period and $1.5 million in the 2006 period, management fees of $465,000 in the 2007 period and $420,000 in the 2006 period, conversion costs associated with meeting new flammability standard of $913,000 in the 2007 period, and transaction related expenditures of $585,000 in the 2007 period. | |||
| Sales | $267,406,000 | $235,867,000 | 13.4% |
| Operating income | 23,483,000 | 28,522,000 | (17.7%) |
| Net income (a) | 4,413,000 | 6,433,000 | (31.4%) |
