Sealy Acquisition Costs Slash Tempur-Pedic Net in Q1
May 3, 2013,
LEXINGTON, Ky.-Expenses related to the company's merger with Sealy played a significant role in the 77.8 percent slide in net income for Tempur-Pedic in its first quarter.
Net income in the quarter, which ended on March 31, was $12.5 million. The Sealy acquisition resulted in $16 million of transaction and integration costs, which had a hand in beefing up Tempur-Pedic's selling, marketing, general and administrative expenses by 21.4 percent in dollars and 601 basis points as a percentage of sales, to 37.2 percent.
With Sealy now in the Tempur-Pedic fold, the company said it expects net sales for all of 2013 to total $2.5 billion. Mark Sarvary, Tempur-Pedic's CEO, said, "The integration is progressing smoothly and as planned. We remain confident in realizing cost synergies in excess of $40 million by the third full year, and continue to be very excited about the significant opportunity for revenue synergies."