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Sealy Reports Net Sales Increase

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Sealy Corporation announced results for its first quarter of fiscal 2007. Net sales for the fiscal quarter ended February 25, 2007 increased 4.3% to $412.6 million from $395.7 million for the comparable period a year earlier on unit volume growth of 12.2%. Partially offsetting this increase was a 7.1% decrease in average unit selling price (AUSP). International net sales increased $14.7 million or 18.1% to $95.9 million. This translates to a 14.8% increase excluding the effects of currency fluctuation. The increase internationally represents a 33.2% increase in unit volume, partially offset by a decrease in AUSP primarily due to strategic pricing actions in Canada and increased sales of lower priced OEM products in Europe. Domestic net sales increased $2.1 million to $316.7 million on a 4.5% increase in volume, partially offset by a 3.7% decrease in AUSP. The increase in volume is primarily attributable to the strong growth of promotional and specialty bedding products. The decrease in AUSP is due to the higher volume of promotional bedding sales and strategic pricing actions on selected Stearns & Foster and TrueForm products. First quarter gross profit was $177.3 million, or 43.0% of sales, versus $176.7 million, or 44.7% of sales, for the comparable period a year earlier. The decline in gross profit as a percentage of sales was driven by a planned increase in sales of lower margin promotional products, strategic pricing actions, the additional product costs required to bring the majority of our products in compliance with the July 2007 flame retardant regulations and the startup costs associated with the Company's new latex facility in Mountain Top, Pennsylvania. These factors were partially offset by continued improvements in manufacturing efficiencies. Net income for the first quarter increased 7.2% to $24.6 million versus $23.0 million for the comparable period a year ago. Earnings per fully diluted share were $0.26. "As we anticipated and communicated over the past few quarters, the momentum in domestic volume that has been building continued during the first quarter as unit growth turned positive, due primarily to strength in our promotional and specialty product lines," said David J. McIlquham, Sealy's Chairman and Chief Executive Officer. "We are also pleased with the ongoing superior performance in our international markets as we build demand for our brands around the world. We are enthusiastic about the arrival onto our customers' floors, beginning this quarter, of the innovative products which we introduced in January at the Las Vegas Furniture Market. This, combined with the start-up of our new domestic latex facility, the further integration of the new North American management team, and the expansion of our "lean" manufacturing program, should allow Sealy to continue to grow its market share and cash flow." As of February 25, 2007, Sealy's cash and cash equivalent balance was $31.8 million versus $13.8 million as of February 26, 2006. The Company's debt net of cash was $803.0 million at February 25, 2007, compared to net debt of $958.2 million at the same time in the prior year. About Sealy: Sealy is the largest bedding manufacturer in the world with sales of approximately $1.6 billion in 2006. 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 operates 26 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy 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 http://www.sealy.com/.

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