TRINITY, N.C., Jan. 18, 2012 /PRNewswire/ -- Sealy
Corporation (NYSE: ZZ), a leading global bedding manufacturer,
today announced results for its fiscal fourth quarter
2011.
Fiscal 2011 4th Quarter Recap for Continuing Operations
- Net sales decreased by $27.3
million to $269.3 million,
compared to the same prior year quarter.
- Gross profit decreased by $24.8
million to $98.1 million
compared to the same prior year quarter.
- Income from operations decreased by $25.1 million to $3.7
million compared to the same prior year quarter.
- Net loss from continuing operations was $(14.0) million or $(0.14) per diluted share, compared to net income
from continuing operations of $3.5
million or $0.03 per diluted
share in the prior year quarter. The corresponding share
counts for 2011 and 2010 fourth quarter EPS were 100.9 million and
296.2 million, respectively. For further information on the
calculation of diluted shares, please see the attached
Reconciliation of Fully Diluted Sharecount schedule.
- Adjusted EBITDA decreased by $24.7
million to $15.1 million
compared to the same prior year quarter.
"We were disappointed with our performance in the fourth quarter
and the full fiscal year 2011," stated Larry Rogers, Sealy's President and Chief
Executive Officer. "These results were not in line with the
goals that we set forth in the beginning of 2011 and we are making
operational changes to improve our future business
results."
Fiscal 2011 Fourth Quarter Results
Total U.S. net sales decreased 9.6% to $203.0 million from the fourth quarter of fiscal
2010. Excluding third party sales from the component plants,
wholesale unit volume decreased 5.7%. The decrease in unit volume
was driven primarily by a decrease in sales of products at lower
price points due to increased competition. Net sales were
also unfavorably impacted by a change in estimates for
non-warrantable product returns and an increase in subsidies
charged as deductions to revenues, partially offset by reductions
in Cost of Goods Sold ("COGS") and Selling, General and
Administrative ("SG&A") expenses. For further information
on the changes in Net Sales, COGS and SG&A, please see the
attached Reconciliation of Certain Fourth Quarter Financial Results
to Prior Year schedule.
International net sales decreased $5.7
million, or 7.9%, from the fourth quarter of fiscal 2010 to
$66.3 million. The decrease in
international net sales was primarily due to lower sales in the
Canadian market which saw a decline in unit volume of lower priced,
Sealy promotional product and reduced promotional activity for
Posturepedic. Excluding the effects of currency fluctuation,
international net sales decreased 6.4% from the fourth quarter of
fiscal 2010.
Gross profit for the fourth fiscal quarter decreased by
$24.8 million to $98.1 million from the prior year quarter.
Gross margin decreased 5.0 percentage points to 36.4%. The decrease
as a percentage of net sales was primarily due to a decrease in
gross profit margin in the U.S. and Canadian operations. U.S.
gross profit margin decreased 5.8 percentage points to 35.0%.
Higher raw material and other inflation, especially related to foam
and steel, negatively impacted gross margin by 3.5 percentage
points. The above mentioned shift in subsidies and higher
product launch costs associated with the Next Generation Stearns
& Foster line further reduced gross margin.
Selling, general, and administrative expenses were $98.9 million for the fourth quarter of fiscal
2011, a decrease of $0.1 million
versus the comparable period a year earlier. As a percentage of net
sales, this expense was 36.7% and 33.4% for the quarters ended
November 27, 2011 and November 28, 2010, respectively, an increase of
3.3 percentage points. The increase as a percentage of sales
was primarily a result of deleveraging of the fixed cost structure
along with higher advertising costs.
Income from operations for the fourth quarter decreased
$25.1 million to $3.7 million.
Net loss from continuing operations for the fourth quarter was
$(0.14) per diluted share. Net
loss from discontinued operations for the period was $(0.01) per diluted share. As described
below, the net loss from discontinued operations includes the
operational results related to the European and Brazilian
businesses and the related losses on disposition.
Cash flow from operations was $26.9
million driven primarily by improvements in working
capital.
Fiscal 2011 Full Year Results
Net sales for the fiscal year ended November 28, 2011 increased 1.0% to $1,230.2 million from $1,219.5 million for the prior fiscal year. Gross
profit was $478.7 million, or 38.9%
of net sales, versus $509.5 million,
or 41.8% of net sales, for the prior fiscal year. For the
2011 fiscal year, net loss from continuing operations was
$(5.7) million, net loss from
discontinued operations was $(4.2)
million and net loss for the fiscal year was $(9.9) million. Adjusted EBITDA decreased
29.0% to $126.3 million, or 10.3% of
net sales, from $177.9 million, or
14.6% of net sales, in the prior fiscal year. For further
information on the change in Adjusted EBITDA, please see the
attached Reconciliation of 2011 Adjusted EBITDA to Prior Year
schedule.
As of November 28, 2011, the
Company's debt net of cash was $683.9
million and Net Debt to Adjusted EBITDA ratio (excluding the
Convertible Payment In Kind Notes) was 3.95x.
"As we look forward into 2012, we expect the industry to
continue to experience higher growth in upper and lower priced
product rather than growth in products at the middle price
points. Accordingly, we are focused on a successful launch of
our Next Generation Stearns & Foster and the development of our
new Specialty Division at the upper price points of the market and
recapturing momentum at the lower price points. We are also
continuing our successful digital marketing strategy and driving
growth across our multiple business models in the international
markets. With new organizational and operational changes being
implemented across our business we believe we are positioned to
improve sales and Adjusted EBITDA performance in 2012," concluded
Mr. Rogers.
Results from Discontinued Operations
During the fourth quarter of 2010, the company divested the
assets of its manufacturing operations in France and Italy, which represented all of the assets in
its Europe segment. In
addition, the company discontinued manufacturing operations in
Brazil. The company has transitioned to a license arrangement
with third parties in both of these markets. These businesses
are accounted for as discontinued operations, and accordingly, the
company has reclassified its financial data for all periods
presented to reflect these actions. Unless otherwise noted,
the reported financial data pertains to Sealy's continuing
operations.
Non-GAAP Measures
Sealy provides information regarding Adjusted EBITDA and
Adjusted EBITDA Margin which are not recognized terms under GAAP
(Generally Accepted Accounting Principles) and do not purport to be
alternatives to operating income or net income as a measure of
operating performance or to cash flows from operating activities as
a measure of liquidity. The Company presents Adjusted EBITDA,
because the covenants contained in the Company's senior debt
agreements are based upon these measures and Adjusted EBITDA is a
material component of those covenants. Additionally, management
uses Adjusted EBITDA to evaluate the Company's operating
performance. The Company also presents Adjusted EBITDA
margin, which is Adjusted EBITDA reflected as a percentage of net
sales because it believes that this measure provides useful
incremental information to investors regarding the Company's
operating performance. Additionally, these measures are not
intended to be measures of available cash flow for management's
discretionary use, as these measures do not consider certain cash
requirements such as interest payments, tax payments and debt
service requirements. Because not all companies use identical
calculations, this presentation may not be comparable to other
similarly titled measures of other companies. A
reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to the
Company's net income is provided in the attached
schedule.
Additionally, the Company provides certain information on a
constant currency basis which reflects a comparison of current
period results translated at the prior period currency rates.
This information is provided because the Company believes that it
provides useful incremental information to investors regarding the
Company's operating performance.
Conference Call
The Company will hold a conference call today to discuss its
fiscal fourth quarter 2011 results at 5:00
p.m. (Eastern Standard Time). The conference call can
be accessed live over the phone by dialing 1-877-941-4774, or for
international callers, 1-480-629-9760. A replay will be available
one hour after the call and can be accessed by dialing
1-877-870-5176, or for international callers, 1-858-384-5517. The
passcode for the live call and the replay is 4501834. The replay
will be available until January 25,
2012.
Interested investors and other parties may also listen to a
simultaneous webcast of the conference call by logging onto the
Investors section of the Company's website at www.sealy.com. The
on-line replay will be available for a limited time beginning
immediately following the call in the Investors section of the
Company's website at www.sealy.com.
About Sealy
Sealy owns one of the largest bedding brands in the world, with
sales of $1.2 billion in fiscal 2011.
The Company manufactures and markets a broad range of mattresses
and foundations under the Sealy(R), Sealy Posturepedic(R), Sealy
Embody(TM), Stearns & Foster(R), and Bassett(R) brands. Sealy
operates 25 plants in North
America, and has the largest market share and highest
consumer awareness of any bedding brand on the continent. In
the United States, Sealy sells its
products to approximately 3,000 customers with more than 7,000
retail outlets. Sealy is also a leading supplier to the hospitality
industry. For more information, please visit
www.sealy.com.
This document contains forward-looking statements within the
meaning of the safe harbor provisions of the Securities Litigation
Reform Act of 1995. Terms such as "expect," "believe," "continue,"
and "grow," as well as similar comments, are forward-looking in
nature. Although the Company believes its growth plans are based
upon reasonable assumptions, it can give no assurances that such
expectations can be attained. Factors that could cause actual
results to differ materially from the Company's expectations
include: general business and economic conditions, competitive
factors, raw materials purchasing, and fluctuations in demand.
Please refer to the Company's Securities and Exchange Commission
filings for further information.
The condensed consolidated statements of operations and related
information presented below have been adjusted for discontinued
operations presentation for all periods presented. However,
the condensed consolidated balance sheets and statements of cash
flows have not been adjusted for such presentation.
|
|
|
|
SEALY
CORPORATION
|
|
CONDENSED CONSOLIDATED BALANCE
SHEET
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
November 27,
|
|
November 28,
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and
equivalents
|
$
107,975
|
|
$
109,255
|
|
|
Accounts
receivable, net of allowances for bad debts, cash discounts and
returns
|
126,494
|
|
140,778
|
|
|
Inventories
|
57,002
|
|
57,178
|
|
|
Other
current assets
|
29,275
|
|
19,543
|
|
|
Deferred
income tax assets
|
21,349
|
|
19,127
|
|
Total
current assets
|
342,095
|
|
345,881
|
|
Property,
plant and equipment - at cost
|
406,115
|
|
385,470
|
|
Less
accumulated depreciation
|
(239,370)
|
|
(217,398)
|
|
|
166,745
|
|
168,072
|
|
Other
assets:
|
|
|
|
|
|
Goodwill
|
361,026
|
|
361,958
|
|
|
Intangible
assets, net
|
1,116
|
|
1,387
|
|
|
Deferred
income tax assets
|
1,772
|
|
6,140
|
|
|
Other
assets, including debt issuance costs, net
|
46,440
|
|
53,319
|
|
|
410,354
|
|
422,804
|
|
Total
assets
|
$
919,194
|
|
$
936,757
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Current
portion - long-term obligations
|
$
1,584
|
|
$
2,166
|
|
|
Accounts
payable
|
68,774
|
|
66,507
|
|
|
Accrued
incentives and advertising
|
26,038
|
|
34,510
|
|
|
Accrued
compensation
|
17,601
|
|
22,390
|
|
|
Accrued
interest
|
14,074
|
|
14,359
|
|
|
Other
accrued liabilities
|
28,426
|
|
37,198
|
|
Total
current liabilities
|
156,497
|
|
177,130
|
|
Long-term
obligations, net of current portion
|
790,297
|
|
793,084
|
|
Other
liabilities
|
52,415
|
|
53,357
|
|
Deferred
income tax liabilities
|
549
|
|
825
|
|
|
|
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
Common
stock
|
1,010
|
|
979
|
|
|
Additional
paid-in capital
|
935,512
|
|
911,066
|
|
|
Accumulated deficit
|
(1,016,577)
|
|
(1,006,689)
|
|
|
Accumulated other comprehensive income
|
(509)
|
|
7,005
|
|
Total
shareholders' deficit
|
(80,564)
|
|
(87,639)
|
|
Total
liabilities and shareholders' deficit
|
$
919,194
|
|
$
936,757
|
|
|
|
|
|
|
SEALY CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(In
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
November 27,
|
November 28,
|
|
|
|
2011
|
2010
|
|
|
|
|
|
|
Net
sales
|
$
269,259
|
|
$
296,554
|
Cost of
goods sold
|
171,135
|
|
173,676
|
|
|
|
|
|
|
|
Gross
profit
|
98,124
|
|
122,878
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
98,927
|
|
98,991
|
Amortization expense
|
72
|
|
72
|
Royalty
income, net of royalty expense
|
(4,617)
|
|
(5,058)
|
|
|
|
|
|
|
|
|
Income
from operations
|
3,742
|
|
28,873
|
|
|
|
|
|
|
Interest
expense
|
22,434
|
|
21,341
|
Refinancing and extinguishment of debt
|
(42)
|
|
-
|
Other
income, net
|
(114)
|
|
(68)
|
|
|
|
|
|
|
|
|
(Loss)
income before income taxes
|
(18,536)
|
|
7,600
|
Income tax
(benefit) provision
|
(3,675)
|
|
5,018
|
Equity in
earnings of unconsolidated affiliates
|
836
|
|
909
|
|
|
Income
from continuing operations
|
(14,025)
|
|
3,491
|
Loss from
discontinued operations
|
(1,182)
|
|
(7,971)
|
|
|
Net
loss
|
$
(15,207)
|
|
$
(4,480)
|
|
|
|
|
|
|
Earnings
(loss) per common share—Basic
|
|
|
|
|
|
Income
(loss) from continuing operations per common share
|
$
(0.14)
|
|
$
0.04
|
|
|
Loss from
discontinued operations per common share
|
(0.01)
|
|
(0.08)
|
(Loss)
earnings per common share—Basic
|
$
(0.15)
|
|
$
(0.04)
|
|
|
|
|
|
|
Earnings
(loss) per common share—Diluted
|
|
|
|
|
|
Income
(loss) from continuing operations per common share
|
$
(0.14)
|
|
$
0.03
|
|
|
Loss from
discontinued operations per common share
|
(0.01)
|
|
(0.03)
|
Earnings
(loss) per common share—Diluted
|
$
(0.15)
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding:
|
|
|
|
|
Basic
|
100,865
|
|
97,579
|
|
Diluted
|
100,865
|
|
296,156
|
|
|
|
|
|
|
|
SEALY CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(In
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
|
November 27,
|
|
November 28,
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Net
sales
|
$
1,230,151
|
|
$
1,219,471
|
Cost of
goods sold
|
751,449
|
|
709,971
|
|
|
|
|
|
Gross
profit
|
478,702
|
|
509,500
|
|
|
|
|
Selling,
general and administrative expenses
|
414,235
|
|
398,053
|
Amortization expense
|
289
|
|
289
|
Royalty
income, net of royalty expense
|
(19,413)
|
|
(17,529)
|
|
|
|
|
|
|
Income
from operations
|
83,591
|
|
128,687
|
|
|
|
|
Interest
expense
|
87,743
|
|
85,617
|
Refinancing and extinguishment of debt
|
1,222
|
|
3,759
|
Other
income, net
|
(451)
|
|
(226)
|
|
|
|
|
|
|
(Loss)
income before income taxes
|
(4,923)
|
|
39,537
|
Income tax
provision
|
4,104
|
|
18,488
|
Equity in
earnings of unconsolidated affiliates
|
3,371
|
|
3,611
|
|
|
Income
(loss) from continuing operations
|
(5,656)
|
|
24,660
|
Loss from
discontinued operations
|
(4,232)
|
|
(38,399)
|
|
|
Net
loss
|
$
(9,888)
|
|
$
(13,739)
|
|
|
|
|
Earnings
(loss) per common share—Basic
|
|
|
|
|
|
Income
(loss) from continuing operations per common share
|
$
(0.06)
|
|
$
0.26
|
|
|
Loss from
discontinued operations per common share
|
(0.04)
|
|
(0.40)
|
(Loss)
earnings per common share—Basic
|
$
(0.10)
|
|
$
(0.14)
|
|
|
|
|
Earnings
(loss) per common share—Diluted
|
|
|
|
|
|
Income
(loss) from continuing operations per common share
|
$
(0.06)
|
|
$
0.14
|
|
|
Loss from
discontinued operations per common share
|
(0.04)
|
|
(0.13)
|
Earnings
(loss) per common share—Diluted
|
$
(0.10)
|
|
$
0.01
|
|
|
|
|
|
Weighted
average number of common shares outstanding:
|
|
|
|
|
Basic
|
99,261
|
|
95,934
|
|
Diluted
|
99,261
|
|
289,857
|
|
|
|
|
|
|
SEALY
CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(in
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
|
|
|
November 27,
|
|
November 28,
|
|
|
|
|
|
2011
|
|
2010
|
Operating
activities:
|
|
|
|
|
Net
loss
|
$
(9,888)
|
|
$
(13,739)
|
|
Adjustments to reconcile net income to
|
|
|
|
|
net
cash provided by (used in) operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
24,234
|
|
28,676
|
|
|
Deferred
income taxes
|
1,905
|
|
1,121
|
|
|
Amortization of deferred gain on
sale-leaseback
|
(624)
|
|
(646)
|
|
|
Paid in
kind interest on convertible notes
|
19,994
|
|
16,109
|
|
|
Amortization of discount on new senior secured
notes
|
1,485
|
|
1,431
|
|
|
Amortization of debt issuance costs and
other
|
4,673
|
|
4,750
|
|
|
Impairment
charges
|
288
|
|
22,963
|
|
|
Share-based compensation
|
13,243
|
|
15,864
|
|
|
Excess tax
benefits from share-based payment arrangements
|
-
|
|
(417)
|
|
|
(Gain)
loss on sale of assets
|
(215)
|
|
260
|
|
|
Write-off
of debt issuance costs related to debt extinguishments
|
643
|
|
2,709
|
|
|
Loss on
repurchase of senior notes
|
300
|
|
1,050
|
|
|
Dividends
received from unconsolidated affiliates
|
1,011
|
|
-
|
|
|
Equity in
earnings of unconsolidated affiliates
|
(3,371)
|
|
-
|
|
|
Loss on
disposition of subsidiary
|
206
|
|
2,399
|
|
|
Other,
net
|
(2,217)
|
|
2,618
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
Accounts
receivable
|
10,296
|
|
(3,226)
|
|
|
Inventories
|
(666)
|
|
(12,115)
|
|
|
Prepaid
expenses and other current assets
|
(6,418)
|
|
(3,628)
|
|
|
Other
assets
|
4,271
|
|
(3,791)
|
|
|
Accounts
payable
|
4,774
|
|
(4,873)
|
|
|
Accrued
expenses
|
(24,382)
|
|
(8,711)
|
|
|
Other
liabilities
|
(5,790)
|
|
(338)
|
Net cash
provided by operating activities
|
33,752
|
|
48,466
|
Investing
activities:
|
|
|
|
|
Purchase
of property, plant and equipment
|
(22,408)
|
|
(16,578)
|
|
Proceeds
from sale of property, plant and equipment
|
227
|
|
124
|
|
Net
proceeds (outflow) from disposition of subsidiary
|
-
|
|
(340)
|
|
Repayments
of loans and capital from unconsolidated affiliate
|
-
|
|
3,205
|
|
|
|
|
Net cash
used in investing activities
|
(22,181)
|
|
(13,589)
|
Financing
activities:
|
|
|
|
|
Proceeds
from issuance of long-term obligations
|
3,387
|
|
4,702
|
|
Repayments
of long-term obligations
|
(4,619)
|
|
(15,068)
|
|
Repayment
of senior secured notes, including premium of $300 and
$1,050
|
(10,300)
|
|
(36,050)
|
|
Repurchase
of common stock associated with vesting of employee share-based
awards
|
(3,746)
|
|
(4,806)
|
|
Exercise
of employee stock options, including related excess tax
benefits
|
630
|
|
714
|
|
Debt
issuance costs
|
(147)
|
|
-
|
|
Other
|
(34)
|
|
(8)
|
|
|
|
|
Net cash
used in financing activities
|
(14,829)
|
|
(50,516)
|
Effect of
exchange rate changes on cash
|
1,978
|
|
(6,533)
|
Change in
cash and equivalents
|
(1,280)
|
|
(22,172)
|
Cash and
equivalents:
|
|
|
|
|
Beginning
of period
|
109,255
|
|
131,427
|
|
|
|
|
|
|
|
|
|
End of
period
|
$
107,975
|
|
$
109,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF EBITDA TO NET
INCOME
|
NON
GAAP MEASURES
|
|
|
|
Three
Months Ended:
|
|
Twelve
Months Ended:
|
|
|
November 27,
|
|
November 28,
|
|
November 27,
|
|
November 28,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(in
thousands)
|
(percentage of net sales)
|
|
(in
thousands)
|
(percentage of net sales)
|
|
(in
thousands)
|
(percentage of net sales)
|
|
(in
thousands)
|
(percentage of net sales)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
(15,207)
|
-5.6%
|
|
$
(4,480)
|
-1.5%
|
|
$
(9,888)
|
-0.8%
|
|
$
(13,739)
|
-1.1%
|
Interest
expense
|
|
22,434
|
8.3%
|
|
21,341
|
7.2%
|
|
87,743
|
7.1%
|
|
85,617
|
7.0%
|
Income
taxes
|
|
(3,675)
|
-1.4%
|
|
5,018
|
1.7%
|
|
4,104
|
0.3%
|
|
18,488
|
1.5%
|
Depreciation and
amortization (a)
|
|
6,233
|
2.3%
|
|
6,231
|
2.1%
|
|
24,234
|
2.0%
|
|
25,664
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,785
|
3.6%
|
|
28,110
|
9.5%
|
|
106,193
|
8.6%
|
|
116,030
|
9.5%
|
Adjustments for debt covenants:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing charges
|
|
-
|
0.0%
|
|
-
|
0.0%
|
|
1,222
|
0.1%
|
|
3,759
|
0.3%
|
|
Non-cash
compensation
|
|
4,004
|
1.5%
|
|
3,103
|
1.0%
|
|
13,243
|
1.1%
|
|
15,862
|
1.3%
|
|
KKR
consulting fees
|
|
322
|
0.1%
|
|
456
|
0.2%
|
|
1,303
|
0.1%
|
|
1,881
|
0.2%
|
|
Severance
charges
|
|
-
|
0.0%
|
|
242
|
0.1%
|
|
-
|
0.0%
|
|
2,150
|
0.2%
|
|
Discontinued operations
|
|
891
|
0.3%
|
|
7,971
|
2.7%
|
|
4,232
|
0.3%
|
|
38,399
|
3.1%
|
|
Other
(various) (b)
|
|
105
|
0.0%
|
|
(29)
|
0.0%
|
|
102
|
0.0%
|
|
(196)
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
15,107
|
5.6%
|
|
$
39,853
|
13.4%
|
|
$
126,295
|
10.3%
|
|
$
177,885
|
14.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
Excludes depreciation from discontinued operations
|
(b)
Consists of various immaterial adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sealy
Corporation
|
|
Reconciliation of 2011 Adjusted EBITDA to Prior
Year (in Millions)
|
|
|
|
|
|
|
Adjusted
EBITDA fiscal year end 2010
|
|
$
177.9
|
|
|
|
|
|
|
Less:
|
|
|
|
|
Product
launch cost and national advertising
|
(28.2)
|
|
|
|
Material
and other inflation
|
(27.8)
|
|
|
|
International
|
(6.4)
|
(62.4)
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
Other
|
|
10.8
|
|
|
|
|
|
|
Adjusted
EBITDA fiscal year end 2011
|
|
$
126.3
|
|
|
|
|
|
Sealy
Corporation
|
Reconciliation of Certain Fourth Quarter Financial
Results to Prior Year (in Millions)
|
|
|
|
|
|
Increase / (Decrease)
|
|
|
Net
|
|
Gross
|
|
SG&A
|
|
Adjusted
|
|
|
Sales
|
|
Profit
|
|
Costs
|
|
EBITDA*
|
Three
Months Ended November 28, 2010
|
|
$
296.6
|
|
$
122.9
|
|
$
99.0
|
|
$
39.9
|
|
|
|
|
|
|
|
|
|
Domestic:
|
|
|
|
|
|
|
|
|
Volume/Price
|
|
(5.8)
|
|
(0.4)
|
|
(1.3)
|
|
0.9
|
Subsidy
Impact
|
|
(9.7)
|
|
(9.7)
|
|
(5.0)
|
|
(4.7)
|
Non
Warrantable Product Returns
|
|
(4.7)
|
|
(1.7)
|
|
-
|
|
(1.7)
|
|
|
|
|
|
|
|
|
|
Material
& Other Inflation
|
|
-
|
|
(7.1)
|
|
1.2
|
|
(8.3)
|
|
|
|
|
|
|
|
|
|
Fixed
SG&A
|
|
-
|
|
-
|
|
0.9
|
|
(0.9)
|
Bad
debt
|
|
-
|
|
-
|
|
(2.3)
|
|
2.3
|
Non Cash
Compensation
|
|
-
|
|
-
|
|
0.9
|
|
-
|
|
|
|
|
|
|
|
|
|
Product
Launch Cost & National Advertising
|
|
(1.2)
|
|
(1.2)
|
|
2.5
|
|
(3.7)
|
|
|
|
|
|
|
|
|
|
Other
|
|
(0.2)
|
|
(0.6)
|
|
0.9
|
|
(2.5)
|
|
|
|
|
|
|
|
|
|
International
|
|
(5.7)
|
|
(4.1)
|
|
2.1
|
|
(6.2)
|
|
|
|
|
|
|
|
|
|
Three
Months Ended November 27, 2011
|
|
$
269.3
|
|
$
98.1
|
|
$
98.9
|
|
$
15.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Some of
the reconciliation items are not included in the definition of
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
Sealy
Corporation
|
|
|
|
|
|
|
|
|
Share
Count Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended:
|
|
|
November 27, 2011
|
|
November 28, 2010
|
|
November 27, 2011
|
|
November 28, 2010
|
|
|
(in
thousands)
|
|
(in
thousands)
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income
from continuing operations, as reported
|
|
$
(14,025)
|
|
$
3,491
|
|
$
(5,656)
|
|
$
24,660
|
Net income
attributable to participating securities
|
|
26
|
|
(3)
|
|
10
|
|
(57)
|
Interest
on convertible notes
|
|
-
|
|
4,180
|
|
-
|
|
16,109
|
Net income
from continuing operations available to common
shareholders
|
|
$
(13,999)
|
|
$
7,668
|
|
$
(5,646)
|
|
$
40,712
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Denominator for basic earnings per share—weighted
average shares
|
|
100,865
|
|
97,579
|
|
99,261
|
|
95,934
|
Effect of
dilutive securities:
|
|
|
|
|
|
|
|
|
Convertible debt
|
|
-
|
|
189,047
|
|
-
|
|
183,615
|
Stock
options
|
|
-
|
|
992
|
|
-
|
|
1,087
|
Restricted
share units
|
|
-
|
|
8,151
|
|
-
|
|
8,865
|
Other
|
|
-
|
|
387
|
|
-
|
|
356
|
Denominator for diluted earnings per share—adjusted
weighted average shares and assumed conversions
|
|
100,865
|
|
296,156
|
|
99,261
|
|
289,857
|
|
|
|
|
|
|
|
|
|
Sealy
Corporation
|
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Twelve
Months Ended:
|
|
November 27, 2011
|
|
November 28, 2010
|
|
November 27, 2011
|
|
November 28, 2010
|
|
(in
thousands)
|
|
(in
thousands)
|
Cash
interest expense
|
$
15,445
|
|
$
15,646
|
|
$
61,591
|
|
$
63,121
|
Non-cash
interest expense
|
6,988
|
|
5,695
|
|
26,152
|
|
22,496
|
Total
interest expense
|
$
22,433
|
|
$
21,341
|
|
$
87,743
|
|
$
85,617
|
|
|
|
|
|
|
|
|
SOURCE Sealy Corporation