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Sealy reports Q3 fiscal 2008 results
08 Oct '08
5 min read
These factors were partially offset by an increase in material costs, including inflation on steel and foam, deleveraging of overhead expense on lower volumes and a pre-tax charge of $1.4 million related to the Company's exit of the air bed business. Internationally, gross margins declined primarily due to deleveraging of manufacturing expenses on lower volumes.
Selling, general, and administrative (SG&A) expenses were $132.9 million, a decrease of $7.2 million versus the comparable period a year earlier.
As a percentage of net sales, SG&A expenses were 32.8% in the third quarter of 2008 compared to 31.4% in the third quarter of 2007.
The reduction in the amount of SG&A expenses is primarily due to a $6.3 million decline in volume-driven variable expenses. In addition, the Company benefited from the implementation of cost saving initiatives which generated a $5.3 million decline in fixed expenses.
Actions taken to reduce costs in the third quarter of 2008 included a reduction in promotional expenses due to a more efficient new product launch, decreases in salary and fringe benefit-related costs, and reduced spending on professional services and other discretionary items.
These were partially offset by an increase in advertising costs related to the launch of the Company's national advertising program.
During the three months ended August 31, 2008, the Company also recorded a $2.4 million restructuring charge related to the closure of select Company facilities.
Net sales for the nine months ended August 31, 2008 decreased 7.0% to $1,172.3 million from $1,260.8 million for the comparable period a year earlier.
Gross profit was $465.7 million, or 39.7% of net sales, versus $529.7 million, or 42.0% of net sales, for the comparable period a year earlier.
Net income was $39.1 million or $0.42 per diluted share versus net income of $62.2 million or $0.64 per diluted share for the comparable period a year earlier.
As of August 31, 2008, the Company's debt net of cash was $748.9 million, a reduction of $42.7 million compared to debt net of cash as of the quarter ended August 26, 2007.
Selling, general, and administrative (SG&A) expenses were $132.9 million, a decrease of $7.2 million versus the comparable period a year earlier.
As a percentage of net sales, SG&A expenses were 32.8% in the third quarter of 2008 compared to 31.4% in the third quarter of 2007.
The reduction in the amount of SG&A expenses is primarily due to a $6.3 million decline in volume-driven variable expenses. In addition, the Company benefited from the implementation of cost saving initiatives which generated a $5.3 million decline in fixed expenses.
Actions taken to reduce costs in the third quarter of 2008 included a reduction in promotional expenses due to a more efficient new product launch, decreases in salary and fringe benefit-related costs, and reduced spending on professional services and other discretionary items.
These were partially offset by an increase in advertising costs related to the launch of the Company's national advertising program.
During the three months ended August 31, 2008, the Company also recorded a $2.4 million restructuring charge related to the closure of select Company facilities.
Net sales for the nine months ended August 31, 2008 decreased 7.0% to $1,172.3 million from $1,260.8 million for the comparable period a year earlier.
Gross profit was $465.7 million, or 39.7% of net sales, versus $529.7 million, or 42.0% of net sales, for the comparable period a year earlier.
Net income was $39.1 million or $0.42 per diluted share versus net income of $62.2 million or $0.64 per diluted share for the comparable period a year earlier.
As of August 31, 2008, the Company's debt net of cash was $748.9 million, a reduction of $42.7 million compared to debt net of cash as of the quarter ended August 26, 2007.
Sealy Corporation
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