| BRIEFLY | |
| Tempur-Pedic’s first quarter | |
| Net sales | $390.1 million |
| Net income | $12.5 million |
| Gross profit margin | 48.3% |
Lexington, Ky.-based Tempur-Pedic International, which ended its first quarter of 2013 on March 31, completed its acquisition of mattress major Sealy Inc. on March 18. Tempur-Pedic’s first-quarter results include Sealy’s operations from March 18 through March 31.
Net sales for the quarter were $390.1 million, an increase of 1.5% over the prior-year quarter. The net sales increase was due to the inclusion of $46.7 million of Sealy sales. Excluding Sealy, net sales were $343.4 million, a decrease of 10.7%.
GAAP (generally accepted accounting principles) net income decreased to $12.5 million from $56.2 million in the prior-year quarter.
Gross profit margin was 48.3%. Excluding Sealy, Tempur-Pedic gross profit margin decreased to 51.7%, compared with 53.6% in the first quarter of 2012. The Tempur-Pedic decrease was due primarily to product mix, deleverage, and increased promotions and discounts, partially offset by lower commodity costs and geographic mix, the company said.
Operating income was $44.3 million, or 11.4% of net sales in the first quarter. Operating income included $16 million of transaction and integration costs related to the Sealy acquisition. Excluding Sealy, Tempur-Pedic operating income was $47.2 million, compared with $86.1 million in the prior-year quarter. The decrease reflects the reduced gross margin and deleverage of certain operating expenses related to lower sales, the company said.
Adjusted earnings before interest, taxes, depreciation and amortization for the first quarter was $76.8 million, compared with $98.7 million in the first quarter of 2012.
“We are pleased to have completed the acquisition of Sealy in March,” said Mark Sarvary, Tempur-Pedic International chief executive officer. “The integration is progressing smoothly and as planned. We remain confident in realizing cost synergies in excess of $40 million by the third full year and continue to be very excited about the significant opportunity for revenue synergies. Our performance during the first quarter was in line with our projections, and we expect positive net sales growth for the balance of the year.”
