USA : Tempur-Pedic delivers solid performance in Q1

Tempur-Pedic International Inc announced earnings for the first quarter ended March 31, 2007. In addition, the Company increased full year 2007 earnings per share guidance.

First Quarter 2007 Financial Summary:
Earnings per share (EPS) increased 21% to $0.35 per diluted share in the first quarter of 2007 as compared to $0.29 per diluted share in the first quarter of 2006.

Net sales rose 16% to $266.0 million in the first quarter of 2007 from $228.6 million in the first quarter of 2006. Retail sales increased 19% worldwide. Domestic retail sales increased 20% and international retail sales increased 19%. Sales in the U.S. furniture and bedding retail channel, a component of Domestic retail, were especially strong, up 25%.

The Company achieved growth across all products and geographic segments. Worldwide mattress revenue increased 16%. Domestic mattress revenue increased 16% driven by 13% unit volume growth. Pillow sales rose 23% worldwide driven by unit volume growth of 20%.

For the first quarter of 2007, the Company reported net income of $29.8 million as compared to $26.9 million in the first quarter of 2006. Net income results include stock-based compensation expense, which increased 127% to $1.8 million in the first quarter of 2007. First quarter results also include non- recurring charges of $1.8 million for payroll taxes associated with the exercise of certain executive stock options.

In addition, subsequent to quarter end, the Company was notified of a bankruptcy filing by a U.S. customer and has recorded bad debt expense of $1.3 million in the first quarter related to this matter.

President and Chief Executive Officer H. Thomas Bryant commented, "Tempur- Pedic International delivered a very solid quarter during what continues to be a challenging environment for the bedding industry."

"Our new manufacturing facility in Albuquerque experienced a smooth start- up and production ramped up ahead of our expectations. However, we believe our first quarter results were somewhat moderated by limitations on U.S. capacity and certain non-recurring charges."

"Throughout much of the first quarter, our U.S. business experienced mattress shortages resulting from strong consumer demand, low levels of inventory at the beginning of the year and capacity constraints. In addition, in order to minimize backorders for our existing retail partners, we limited the opening of new accounts such that our total U.S. door count is unchanged from the prior quarter."

"By late March, the Albuquerque plant had considerably expanded its throughput which allowed us to build inventory and eliminate backorders. As a result, we believe we have ample levels of mattress inventory and capacity to meet U.S. demand going forward."