Sealy sales soar 33% in quarter but expenses lead to loss

Larry Thomas -- Furniture Today, January 24, 2013

ARCHDALE, N.C. — Bedding major Sealy Corp. said sales jumped 33% in the fiscal fourth quarter, but the company recorded a net loss of $2.8 million due to expenses from its pending acquisition by Tempur-Pedic and other one-time costs.

Part of the sales increase - about 13.8% of the growth - was attributed to an extra week in the most recent quarter. But the company also said its new Optimum by Sealy Posturepedic and Next Generation Stearns & Foster product lines drove most of the growth because of their higher price points in the marketplace.

Sales for the quarter ended Dec. 2 totaled $358.1 million, up from $269.3 million in the quarter ended Nov. 27, 2011.

In the U.S., sales rose 32.9% to $269.7 million. The figure included a 13.3% increase in wholesale unit volume and a 15.8% jump in the average unit selling price.

International sales rose 33.3% to $88.4 million. The company said sales were especially strong in Canada, Mexico and South America.

"We were pleased with our performance in 2012 as we continued to execute on our strategic initiatives," said Larry Rogers, president and CEO. "Strong product offerings in both the specialty and innerspring lines, compelling advertising and continued financial discipline led to these financial results and we are working to ensure these trends continue."

The net loss for the quarter, which equals 3 cents per share, included $2.54 million in costs related to the Tempur-Pedic deal; $2.42 million in restructuring expenses; and $4.42 million in income tax on repatriation of foreign earnings.

Without those one-time expenses, Sealy said it would have recorded net income of 4 cents per share.

The most recent quarterly loss was well below the net loss of $15.2 million or 15 cents per share recorded in the quarter ended Nov. 27, 2011.

For the 53-week fiscal year ended Dec. 2, sales were $1.35 billion, an increase of 9.6% from $1.23 billion in the 52-week fiscal year ended Nov. 27, 2011.

Sealy recorded net income of $10,000, which was break-even on a per-share basis, in the most recent fiscal year. The previous fiscal year it had a net loss of $9.89 million or 10 cents per share.