Tempur Sealy Q1 Net Up 119.2 Percent
Posted on May 2, 2014 by
LEXINGTON, Ky.-With the integration of Sealy into the former Tempur-Pedic still ongoing, Tempur Sealy posted a 119.2 percent gain in net income in its fiscal first quarter, totaling $27.4 million.
The company closed the Sealy acquisition in March of last year, and the comparisons between the two quarters include Sealy's numbers from March 18 through March 31 of last year. Net sales in this year's quarter, which ended on March 31, reached $701.9 million, up 79.9 percent from last year's quarter.
Parsing out the sales in a conference call yesterday to financial analysts, Dale Williams, Tempur Sealy's executive vice president and chief financial officer, said sales in the Tempur North America segment declined by 5.7 percent, due to the severe weather through much of the nation in January and February. Sealy's sales totaled $363.2 million, compared to $46.7 million in the 13-day period in last year's first quarter, Williams said.
Gross margin was down 990 basis points to 38.4 percent. Selling, general and administrative expenses rose 47 percent in dollars but fell 681 basis points as a percentage of sales, to 30.4 percent.
Summing up during the conference call, Mark Sarvary, Tempur Sealy's president and CEO, said the company is pleased with the performance of the combined mattress vendors. "We still see many opportunities to create additional leverage, and we're aggressively pursuing them," Sarvary said. "Cost synergies are being realized to plan, and we are now beginning to see the benefits from revenue synergy."
In a separate statement, Tempur Sealy said it has agreed to acquire the brand rights to Sealy in continental Europe (excluding the United Kingdom) from the brand's former licensee (unnamed in the statement). Financial terms were not disclosed, and the transaction is expected to close in the fiscal second quarter.