Sealy Announces First Quarter Results

Furniture World Magazine

Sealy Corporation, the world’s largest manufacturer of bedding products, announced record first quarter results, with sales of $300.9 million, a 13.2 percent increase over $265.8 million for the same period a year ago. For the quarter ended March 3, 2002, the company’s gross profit margin increased to 45.2 percent from 45.0 percent last year. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) for the first quarter rose 12.6 percent to $40.9 million, compared with $36.3 million a year earlier. Sealy experienced sales growth in both its domestic and international operations. Sales in the United States were $248.7 million, up 5.5 percent from last year. Sales outside the United States reached $52.2 million for the quarter, an increase of 73.5 percent from the first quarter of 2001. International sales for the quarter included $17.8 million for SAPSA Bedding, the European company acquired by Sealy in April 2001. International sales (excluding SAPSA) increased 14.5 percent. The company also reported that its gross profit margin in the United States during the first quarter increased to 46.7 percent from 45.6 percent last year. The company attributed the improvement primarily to the fact that sales of Sealy Posturepedic and Stearns & Foster products represented a greater percentage of total sales. Gross profit margin for Sealy’s international operations declined to 38.0 percent from 40.5 percent during the first quarter last year. The decline resulted principally because the SAPSA business currently carries a lower gross margin rate than the company’s other international businesses and from the deteriorating economic environment in Argentina. Selling, general and administrative expense was 34.2 percent of sales during the first quarter, largely unchanged from last year. The company recognized $2.1 million of additional bad debt expense during the quarter as it continued to build its allowance for doubtful accounts to reflect on-going uncertainty about the timing of the economic recovery in the United States. "We were very pleased with our first quarter results," said Ron Jones, chairman and chief executive officer of Sealy Corporation. "We continued to grow significantly faster than the U.S bedding market, and to increase our market share. We experienced increases in both unit sales and average unit selling price in the U.S." "Our investments in new product introductions in the Sealy Posturepedic and Stearns & Foster lines have paid strong dividends in terms of sales growth and improved profitability. We believe that we are well positioned to take advantage of the economic turnaround." Sealy Corporation is the largest manufacturer of bedding in the world with sales of over $1 billion in 2001. In the United States, Sealy serves more than 7,000 retail outlets in all 50 states. Including its subsidiaries, Sealy has 31 manufacturing plants and over 6,000 employees in the United States, Canada, France, Italy, Argentina, Brazil, and Mexico. There are a total of 11 international licensees operating in Australia, Israel, Jamaica, Dominican Republic, Saudi Arabia, Japan, New Zealand, Thailand, South Africa, the Bahamas and the United Kingdom. The Company produces and sells a complete line of mattresses and foundations, including those marketed under such leading brand names as Sealy®, Sealy Posturepedic®, Stearns & Foster®, and Bassett®. For more information, please visit www.sealy.com.