Sealy Corp happy with good sales & earnings results

13 Apr '06

3 min read

Sealy Corporation, through its subsidiaries, is the largest bedding producer in North America and produces a diversified line of mattress and foundation products reported net sales of $395.7 million for the quarter ended February 26, 2006, an increase of 10.2 percent from $359.0 million for the same period a year earlier.

Gross profit was $176.7 million or 44.7 percent of sales as compared with $159.1 or 44.3 percent of sales for the same period a year earlier. Net income was $24.3 million, compared with $21.9 million from the same period a year ago an increase of 11.2 percent.

Adjusted EBITDA(1), as defined in the credit agreement governing the senior secured credit facilities of Sealy Mattress Company, a wholly-owned subsidiary, was $63.9 million for the quarter ended February 26, 2006 compared with $59.6 million a year earlier, an increase of 7.2 percent.

On April 12, 2006, Sealy Mattress Corporation's parent company, Sealy Corporation, completed an initial public offering ("IPO") of its common stock. Approximately $82.5 million of the net proceeds received by Sealy Corporation from the IPO will be contributed to Sealy Mattress Corporation to be used as follows:

(i) approximately $54.3 million to retire approximately $48.5 million aggregate principal amount of the Company's 8.25 percent Senior Subordinated Notes (the "Notes") due in 2014, along with prepayment penalties and accrued interest thereon;

(ii) $11.0 million to terminate the management services agreement with Kohlberg Kravis Roberts & Co. L.P.; and (iii) approximately $17.2 million to pay a transaction-related bonus to members of management.

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