Tempur-Pedic 2Q profit falls 38.6% as sales dip
By Larry Thomas -- Furniture Today, July 28, 2008
LEXINGTON, Ky. — Specialty bedding producer Tempur-Pedic said its second-quarter profits tumbled 38.6% as its domestic and international business continued to weaken.
Sales for the quarter ended June 30 were 7.4% below the same period a year ago.
The company, which specializes in visco-elastic foam mattresses and pillows, also reduced its sales and earnings guidance for the remainder of the year.
“We are mindful of macroeconomic conditions, including low consumer confidence generally, and that our retail partners report traffic continues to be down sharply,” said Dale Williams, executive vice president and chief financial officer. “During the balance of 2008, we will continue to drive working capital improvements and anticipate reducing debt.”
Worldwide sales for the most recent quarter totaled $238.7 million, down from $257.6 million in last year’s second quarter. Domestic mattress sales, which make up about 45% of the total, were $108.4 million, a drop of 14.6% from the same period last year.
Net income totaled $20.2 million or 27 cents per share. That’s down from $32.9 million or 39 cents per share in last year’s second quarter.
For the first six months of the year, sales fell 7.2% to $485.9 million and net income slid 46.2% to $33.7 million or 45 cents per share.
Thomas Bryant, president and CEO, said the company will continue to focus on improving working capital and reducing debt.
“We continue to implement our plan to align variable costs with sales expectations, reduce fixed costs and improve productivity in our factories,” Bryant said, noting that debt was reduced by more than $40 million during the quarter.
The company now says it expects sales for the full year to be $980 million to $1.02 billion. That’s down from April’s projection of $1.01 billion to $1.07 billion, and a decrease of 8% to 11% from 2007.
Full-year earnings are now projected to be $1.05 to $1.20 per share. That’s down from the April projection of $1.20 to $1.45 per share. In 2007, the company earned $1.74 per share.
| Tempur-Pedic | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| (a) Based on average shares outstanding of 74.9 million in the 2008 quarter, 84.2 million in the 2007 quarter, 74.9 million in the 2008 six months and 85 million in the 2007 six months. | |||
| Quarter ended 6/30 | 2008 | 2007 | Change |
| Sales | $238,661,000 | $257,642,000 | (7.4%) |
| Operating income | 36,319,000 | 55,130,000 | (34.1%) |
| Net income | 20,228,000 | 32,931,000 | (38.6%) |
| Earnings per share (a) | 0.27 | 0.39 | (30.8%) |
| 6 months ended 6/30 | 2008 | 2007 | Change |
| Sales | $485,883,000 | $523,674,000 | (7.2%) |
| Operating income | 65,652,000 | 108,884,000 | (39.7%) |
| Net income | 33,742,000 | 62,711,000 | (46.2%) |
| Earnings per share (a) | 0.45 | 0.74 | (39.2%) |
