Sealy Posts Sales Growth of 10.2% in the First Quarter

Furniture World News

Sealy Mattress Corporation reported net sales of $395.7 million for the quarter ended February 26, 2006, an increase of 10.2% from $359.0 million for the same period a year earlier. Gross profit was $176.7 million or 44.7% of sales as compared with $159.1 or 44.3% of sales for the same period a year earlier. Net income was $24.3 million, compared with $21.9 million from the same period a year ago an increase of 11.2%. Adjusted EBITDA(1), as defined in the credit agreement governing the senior secured credit facilities of Sealy Mattress Company, a wholly-owned subsidiary, was $63.9 million for the quarter ended February 26, 2006 compared with $59.6 million a year earlier, an increase of 7.2%. "We are pleased with our start to 2006," said David J. McIlquham, Sealy's Chairman and Chief Executive Officer. "During the quarter we saw continued strong consumer demand for our brands worldwide. In addition, we completed the majority of the Stearns & Foster product rollout and introduced the new Posturepedic line to retailers at the Las Vegas Furniture Market in January 2006. The rollout of the new Posturepedic line began in late March and should be complete by the end of our fourth quarter." On April 12, 2006, Sealy Mattress Corporation's parent company, Sealy Corporation, completed an initial public offering ("IPO") of its common stock. Approximately $82.5 million of the net proceeds received by Sealy Corporation from the IPO will be contributed to Sealy Mattress Corporation to be used as follows: (i) approximately $54.3 million to retire approximately $48.5 million aggregate principal amount of the Company's 8.25% Senior Subordinated Notes (the "Notes") due in 2014, along with prepayment penalties and accrued interest thereon; (ii) $11.0 million to terminate the management services agreement with Kohlberg Kravis Roberts & Co. L.P.; and (iii) approximately $17.2 million to pay a transaction-related bonus to members of management. Sealy is the largest bedding manufacturer in the world with sales of nearly $1.5 billion in 2005. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy (R), Sealy Posturepedic(R), Stearns & Foster (R), and Bassett (R) brands. Sealy has the largest market share and highest consumer awareness of any bedding brand in North America. Domestically, Sealy has 25 plants and sells its products to 2,900 customers with more than 7,000 retail outlets. Sealy is also a leading supplier to the hospitality industry. For more information, please visit www.sealy.com.