Sealy (ZZ) posted a 98% plunge in second-quarter profit as it recognized costs related to its initial public offering.
The Archdale, N.C., bedding maker made $126,000, or less than a penny a share, for the quarter ended May 28. That's down from the year-ago $6.4 million, or 9 cents a share.
Latest-quarter numbers included pretax costs of $21 million, or 24 cents a diluted share, related to its April IPO and related debt repayment. Second-quarter results also include $6.4 million of incremental cost related to the launch of Sealy's new products and $1.5 million of incremental expense for stock options vs. the comparable prior-year period. Year-ago results included pretax costs of $3.7 million related to debt refinancing. Analysts surveyed by Thomson Financial were looking for a latest-quarter profit of 18 cents a share.
Sales rose 6% from a year ago to $377 million. Domestic net sales rose 2.5% to $291.5 million, as average unit selling price improved 9% and unit volume declined 5.9%. International net sales increased 19%, 17.4% on a constant-currency basis, to $85.2 million. There, unit volume rose 12.2% and average unit selling price added 6%.
"We are pleased with our results for the quarter and the progress we have made on our new product introductions. The Stearns & Foster roll-out is complete and approximately half of the new Posturepedic product has been rolled out," said CEO David J. McIlquham. "As we have previously communicated, product upgrade cycles typically impact unit volumes in the short term as our retail partners transition the beds on their selling floors. Over the long term, such new product innovation is an important driver of our growth. This process is expected to last until the beginning of the fourth quarter domestically and is already complete in some of our international businesses that introduced major new lines in the first quarter of 2006."
On Thursday, shares of Sealy rose 7 cents to $12.56.