“We achieved significant growth in 2012, unprecedented in our industry, as we drove net sales by 43.1% to above the $1 billion mark and increased our store base by 45.0% to over 1,000 store units. We also delivered meaningful year-over-year increases across key financial metrics, including a 50.6% increase in Adjusted operating income and 6.1% comparable-store sales growth during our first full year as a public company,” remarked Steve Stagner, Mattress Firm’s president and chief executive officer. “Overall, fiscal 2012 was a record year for Mattress Firm; an impressive accomplishment in light of the challenges associated with adding 328 stores, including 242 stores through accretive acquisitions. Looking to 2013, with the integration of the acquired stores substantially complete, we expect to drive sales and operating margin expansion from the ongoing sales growth of acquired stores, which will be enhanced as we pass the anniversary dates of our 2012 acquisitions. We envision that this growth, combined with a third consecutive year of opening more than 100 organic new stores in line with the continued execution of our relative market share strategy of penetrating markets, will further strengthen and fortify our leadership positions. We are extremely excited about our potential for fiscal 2013 and believe we are well positioned to drive additional value for our shareholders as we move through the year.”Fourth Quarter Financial Summary
- Net sales for the fourth fiscal quarter increased 37.0% to $258.2 million, reflecting incremental sales from new and acquired stores, offset by a comparable-store sales decline of 1.6%.
- Opened 30 new stores, closed 11, and acquired 27 former Mattress Source stores in December 2012, bringing the total number of Company-operated stores to 1,057 as of the end of the fiscal year.
- Income from operations was $17.2 million. Excluding $4.3 million of acquisition-related costs, impairment charges and debt amendment expenses, Adjusted income from operations was $21.5 million, representing an increase of $5.8 million, or 37.0%, over Adjusted income from operations for the comparable prior year period. Please refer to “Reconciliation of Reported (GAAP) to Adjusted Statements of Operations Data” for a reconciliation of income from operations to Adjusted income from operations and other information.
- Adjusted operating margin remained unchanged at 8.3% of net sales as compared to the same quarter of fiscal 2011, and consisted of a 230 basis-point improvement in general and administrative expense leverage, offset by a 200 basis-point decrease in gross margin from lower sales productivity of acquired stores, a 20 basis point decline in franchise fees due to the Company growing its sales at a rate faster than the franchise base, and 10 basis-points of deleverage in other expense categories.
- Net income was $7.6 million and GAAP EPS was $0.22. Excluding $2.4 million, net of income taxes, of acquisition-related costs and impairment charges and other costs, Adjusted net income was $10.0 million and Adjusted EPS was $0.30, representing increases of approximately 43.0% over Adjusted net income and Adjusted EPS for the comparable prior year period. Please refer to “Reconciliation of Reported (GAAP) to Adjusted Statements of Operations Data” for a reconciliation net income and GAAP EPS to Adjusted net income and Adjusted EPS, respectively, and other information.