Sealy reports $3.5m profit from continuing operations
Larry Thomas -- Furniture Today, February 1, 2011
ARCHDALE, N.C. — Despite a decline in U.S. sales, bedding major Sealy recorded a profit from continuing operations of $3.5 million for its fourth fiscal quarter.
The company said worldwide sales rose 0.4% to $296.6 million in the quarter ended Nov. 28, but U.S. sales fell 3.6% to $224.6 million.
The U.S. sales figure included a decline of 1.7% in unit volume and a decline of 1.8% in the average unit selling price.
The quarterly profit from continuing operations, which equals 3 cents per fully diluted share, is a 23.6% jump from a profit from continuing operations of $2.83 million or 2 cents per diluted share in the same period a year ago.
Sealy sold its operations in Europe and Brazil last year, and results from those businesses aren't included in the continuing operations numbers. Including all operations, Sealy posted a net loss of $4.5 million in the quarter.
Larry Rogers, president and CEO, said the drop is U.S. sales was due largely to heavier discounting and a greater mix of promotionally priced bedding.
During a conference call with securities analysts, Rogers said he expects a revamped Posturepedic line, which will be introduced this week at the Las Vegas Market, will boost the company's U.S. sales and result in market-share gains in the second half of 2011.
Posturepedic typically accounts for about half of Sealy's domestic sales.
The new line, with retail price points of $699 to $2,399 in queen, features a titanium innerspring unit that he says is twice a strong as a conventional steel unit.
It will be backed with a $10 million advertising campaign that will include television spots, point-of-sale materials and digital media ads, Rogers told analysts.
For the fiscal year ended Nov. 28, Sealy had worldwide sales of $1.22 billion, up 3.8% from $1.17 billion for the year ended Nov. 29, 2009.
Net income from continuing operations was $24.7 million, or 14 cents per diluted share, for the year. That's up from $22.9 million, or 15 cents per diluted share, the pervious year.
Including a $38.4 million loss from discontinued operations, Sealy had a net loss of $13.7 million for the year. The previous year, the company recorded net income of $13.5 million, including a $9.4 million loss from discontinued operations.
Sealy | |||
Quarter ended 11/28 | 2010 | 2009 | Change |
Sales | $296,554,000 | $295,451,000 | 0.4% |
Operating income | 23,887,000 | 16,632,000 | 43.6% |
Net income (a) | (4,480,000) | 2,574,000 | - |
Earnings per share (b) | 0.00 | 0.02 | - |
Quarter ended 11/28 | 2010 | 2009 | Change |
Sales | $1,219,471,000 | $1,174,581,000 | 3.8% |
Operating income | 111,447,000 | 104,972,000 | 6.2% |
Net income (c) | (13,739,000) | 13,485,000 | - |
Earnings per share (d) | 0.01 | 0.10 | (90.0%) |
(a) Includes goodwill impairment of $1.12 million in 2009, royalty income of $5.06 million in 2010 and $4.26 million in 2009, and income tax benefit of $4.68 million in 2009. (b) Includes interest on convertible notes of $4.18 million in 2010 and $3.5 million in 2009. (c) Includes goodwill impairment $1.19 million in 2009, royalty income of $17.5 million in 2010 and $16.4 million in 2009, refinancing expenses of $3.76 million in 2010 and $17.4 million in 2009, and income tax benefit of $1.38 million in 2009. (d) Includes interest on convertible notes of $16.1 million in 2010 and $5.32 million in 2009. | |||
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