* First-quarter adj earnings $0.62/share
* Net sales rise 1.5 pct to $390.1 mln
* Sees full-year adj earnings $2.75/shr on sales of $2.5 bln
* Shares fall 2 percent after market
By Aditi Shrivastava
May 2 Mattress maker Tempur-Pedic International
Inc's first-quarter revenue fell 11 percent, excluding
its recent Sealy's acquisition, hurt by a decline in sales at
its core North America business.
Shares of Lexington, Kentucky-based Tempur-Pedic fell 2
percent in after-hours trading, after the company reported lower
earnings for the first quarter.
Tempur-Pedic completed the purchase of Sealy on March 18 and
its total quarterly sales rose just 1.5 percent to $390.1
million, even including $46.7 million from the newly purchased
Tempur-Pedic's North America sales fell 16 percent to $225.9
million. Excluding Sealy, Tempur-Pedic's gross profit margin
decreased to 51.7 percent from 53.6 percent, hurt by increased
promotions and discounts.
Shares in the company, to be renamed Tempur Sealy Corp, have
jumped 55 percent since it announced its Sealy acquisition in
The purchase brought expertise and strong brands to
Tempur-Pedic, including Sealy Posturepedic and Stearns & Foster,
and helped the mattress maker recapture lost market share.
But Tempur-Pedic said net income fell to $12.5 million, or
20 cents per share, in the quarter ended March 31, from $56.2
million, or 86 cents per share, a year earlier.
Excluding integration costs related to the acquisition and
certain tax items, the company earned 62 cents per share.
Tempur-Pedic raised its full-year earnings guidance to $2.75
per share on revenue of $2.5 billion from $2.55 per share on
$1.4 billion, taking into account its acquisition of Sealy.
Tempur expects to realize about $15 million in cost
synergies in 2013 from combining the mattress companies.
"In 2013, we plan to invest some of the upside realized from
the cost synergies back into our business, including investing
more in advertising and marketing," Chief Financial Officer Dale
Williams said on a conference call with analysts.
For the quarter ended March 3, Sealy's net sales rose 8.8
percent to $339.6 million, which Gilford Securities analyst
Robert Straus said were "strong" results.
Rival Select Comfort Corp, the maker of Sleep
Number mattresses, last month reported lower-than-expected
quarterly earnings, hurt by a shift in advertising strategy, and
cut its profit outlook.