Sealy 4Q sales rise
By Furniture Today Staff -- Furniture Today, February 11, 2008
Trinity, N.C. — Sealy's sales were up 11.6% in the fourth quarter, but earnings fell 20.3% from the same period a year ago as the company's average unit selling price declined and it spent $7.3 million on flame-retardant materials.
Sales in the quarter came to $441.3 million, up from $395.3 million a year earlier. The 2007 quarter was 13 weeks, one week longer than the 2006 period, and the extra week contributed net sales of $32.3 million, the company said.
Unit sales were up 20.1% in the quarter but the average unit selling price was down 7%. The company attributed the decline to an increase in the share of sales from the Sealy Posturepedic Reserve beds and "pricing actions" on the Sealy Posturepedic True-Form mattresses.
"In 2007, we executed well on key strategies which we believe are going to be critical to our ongoing success, including driving unit volume and protecting valuable real estate on our retailers' floors," said David McIlquham, Sealy chairman and CEO. "However, it was a challenging year for Sealy as our fiscal 2007 financial results did not meet our expectations."
He said a "difficult consumer spending environment" and commodity cost pressures are expected to continue for the next few quarters.
Domestic net sales rose by $26.8 million or 9.4% to $311.4 million on a 12.5% increase in unit volume, offset by a 2.8% decrease in average unit selling price. The extra week in 2007 contributed $26.2 million in sales.
International sales increased $19.2 million or 17.3% to $129.9 million.
For the full year, sales rose 7.5% to $1.7 billion and earnings were up 7.3% to $79.4 million.
| Sealy | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/2 | 2007 | 2006 | Change |
| (a) Includes pretax royalty income of $5.1 million in the 2007 quarter, $7.6 million in the 2006 quarter, $18.6 million in the 2007 year and $18.9 million in the 2006 year. Also includes pretax debt extinguishment and refinancing expenses of $937,000 in the 2007 quarter, $37,000 in the 2006 quarter, $1.2 million in the 2007 year and $9.9 million in the 2006 year, plus an after-tax expense for the effect of a change in an accounting principle of $287,000 in the 2006 year. (b) Based on average shares outstanding of 95.7 million in the 2007 quarter, 96.7 million in the 2006 quarter, 96.3 million in the 2007 year and 89.6 million in the 2006 year. | |||
| Sales | $441,290,000 | $395,272,000 | 11.6% |
| Operating income | 36,864,000 | 51,768,000 | (28.8%) |
| Net income (a) | 17,135,000 | 21,501,000 | (20.3%) |
| Earnings per share (b) | 0.18 | 0.22 | (18.2%) |
| Year ended 12/2 | 2007 | 2006 | Change |
| Sales | $1,702,065,000 | $1,582,843,000 | 7.5% |
| Operating income | 164,002,000 | 208,302,000 | (21.3%) |
| Net income (a) | 79,373,000 | 73,967,000 | 7.3% |
| Earnings per share (b) | 0.82 | 0.83 | (1.2%) |
