ATLANTA–Simmons said it expects its third-quarter net sales to be off from 10 percent to 13 percent, compared to the third quarter of 2007.
Third-quarter net sales should total from $273 million to $278 million, Simmons said in the statement. Also, adjusted earnings before interest, depreciation and ammortization should reach between $31 million and $34 million, down by from 10 percent to 18 percent from last year’s third quarter. The company added that its adjusted EBITDA has suffered in part from a bad-debt expense of $3.6 million stemming from the Chapter 11 bankruptcy filing by Mattress Discounters, the East Coast mattress retail chain.
Simmons also said it has notified its senior lenders under its senior credit facility that it does not expect to be in compliance with the maximum leverage ratio covenant, as set forth in the senior credit facility of Sept. 27 of this year. The company is now seeking to amend this facility with the consent of its senior lenders, to waive the Sept. 27 covenant breach and to change covenants for future maximum leverage ratio and minimum cash interest coverage. As of Sept. 27, Simmons’ total debt was $984 million.