Tax bill leads to $2 million quarterly loss for Tempur-Pedic
Larry Thomas -- Furniture Today, October 24, 2012
LEXINGTON, Ky. — Bedding major Tempur-Pedic recorded a rare net loss in the third quarter as worldwide sales fell 9.2%.
The company said the loss of $2.02 million or 3 cents per share was due largely to a $41.9 million income tax provision for earnings from foreign operations that will be brought back into the U.S. in the near future.
In addition, about $2.43 million in costs related to Tempur-Pedic's proposed acquisition of Sealy were charged against earnings.
Worldwide sales for the quarter ended Sept. 30 were $347.9 million, down 9.2% from $383.1 million in last year's third quarter.
The company said North American mattress sales - its largest business segment - tumbled 15% to $164.3 million.
The most recent quarterly loss compares with net income of $61.9 million or 90 cents per share in last year's third quarter.
"Changes in the competitive environment that we experienced during the second quarter in North American continued to have an adverse impact on our third quarter performance," said Mark Sarvary, CEO. "We recently launched a broad series of new initiatives in response to the new competitive landscape in North America, and while it remains early, we are seeing some stabilization as a result."
He said the initiatives are more expensive than originally anticipated, "but we are committed to returning to growth."
Tempur-Pedic also cut its 2012 sales and earnings projections for the second time this year. The new projections put sales at about $1.4 billion and earnings of about $2.55 per share. Those are down from July projections of $1.43 billion in sales and earnings of about $2.80 per share.
For the first nine months of 2012, worldwide sales totaled $1.06 billion, down 1% from $1.05 billion in the same period in 2011.
Nine-month net income totaled $83.3 million or $1.31 per share.For the first nine months of last year, net income was $163.3 million or $2.34 per share.