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EXHIBIT 99.1
SIMMONS COMPANY THIRD QUARTER SALES SOAR 32%
ADJUSTED EBITDA GAIN 31%
ATLANTA, GA (November 7, 2000) - Simmons Company reported today that net sales
for the third quarter ended September 30, 2000 increased 31.7% to $227.8
million, as compared to $173.0 million for the same period a year ago. Net sales
for the nine months ended September 30, 2000 rose 19.0% to $555.7 million, as
compared to $467.0 million for the same period a year ago.
For the third quarter of 2000, adjusted EBITDA increased 30.6%, to
$27.9 million, compared to $21.3 million in the prior year period. For the first
nine months of 2000, adjusted EBITDA totaled $52.0 million, a 25.0 % increase
over the total for the first nine months of 1999 of $41.6 million.
Simmons Chairman and CEO Charlie Eitel said the third quarter sales
gain was helped by an extra week in the 2000 fiscal period. "Even after
adjusting for the extra week in the current quarter, our sales growth for the
quarter was approximately 22.3% compared to a year ago. We are pleased with the
top-line growth improvement achieved during the third quarter."
He continued, "I am pleased to report that the combined efforts and
hard work of our more than 3,000 associates is gaining momentum. Our focus will
continue to be on delivering a better night's sleep for our consumer customers
by continuing to lead the industry in product design. We are very excited about
the introduction at the October International Home Furnishings Market of our new
Simmons Olympic(R) Queen (6" wider than a standard queen), the first new size
mattress to be offered since Simmons introduced the Queen and King in 1958. We
have also received very strong placements of our new BackCare(R) 2001 line, also
launched at the International Home Furnishings Market. By the end of 2000, all
of Simmons products will be built so they will never have to be flipped, a
feature to which consumers have shown an overwhelming acceptance."
Commenting on the overall tone of business, Eitel said, "We are pleased
that our growth is being shared with our retailers, providing them with an
opportunity to benefit from Simmons' new product innovations. Although sales in
certain sectors of the home furnishings industry have shown softness in the
recent quarter, our business remains very good in spite of a significant decline
in sales to Heilig-Meyers, who filed for bankruptcy in August."
The Company will webcast its third quarter 2000 financial results
conference call on Wednesday, November 8, 2000. The webcast will begin at 10:00
a.m. EST and will be available at http:www.simmons.com. The webcast will also be
available for replay through December 8, 2000.
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Maker of Beautyrest(R), BackCare(R), DreamScapes(TM), and Deep
Sleep(R), Atlanta-based Simmons Company employs more than 3,000 people and
operates 18 plants throughout the United States and Puerto Rico. Simmons is
committed to helping consumers attain a higher quality of sleep and supports its
mission through a Better Sleep Through Science(TM) philosophy, which includes
developing superior mattresses and promoting a sound, smart sleep routine. For
more information, consumers and customers can visit the Company's website at
www.simmons.com.
FORWARD-LOOKING STATEMENTS: This news release contains forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, such as, among others, statements relating to future operating results and
customer acceptance of our products. Such statements are dependent on a number
of factors, which could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. Such factors include the
Company's ability to continue its sales growth and further improve its
profitability, in addition to those factors identified from time to time in the
Company's required filings with the U.S. Securities and Exchange Commission.
CONTACT: William S. Creekmuir, Executive Vice President and CFO - 770-512-7700
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<TABLE>
<CAPTION>
SIMMONS COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
($ millions)
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THIRD QUARTER
September 30, September 25,
2000 1999
(14 weeks) (13 weeks)
---------- ---------
<S> <C> <C>
Net sales $ 227,819 $ 172,964
Cost of products sold 125,662 98,133
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Gross margin 102,157 74,831
Operating expenses
Selling, general and administrative expenses 82,357 56,249
ESOP expense 1,675 1,792
Amortization of intangibles 2,110 1,907
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Operating income 16,015 14,883
Interest expense, net 9,285 8,098
Other expense, net 438 408
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Loss before income taxes 6,292 6,377
Income tax provision 13,983 2,624
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Net income (loss) $ (7,691) $ 3,753
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Adjusted EBITDA* $ 27,856 $ 21,336
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<CAPTION>
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FIRST NINE MONTHS
September 30, September 25,
2000 1999
(40 weeks) (39 weeks)
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<S> <C> <C>
Net sales $ 555,724 $ 467,001
Cost of products sold 312,603 267,620
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Gross margin 243,121 199,381
Operating expenses
Selling, general and administrative expenses 209,717 165,701
ESOP expense 5,339 5,377
Management compensation-severance related 3,777 --
Amortization of intangibles 6,241 5,721
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Operating income 18,047 22,582
Interest expense, net 26,594 24,115
Other expense, net 1,340 1,267
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Loss before extraordinary item and income
taxes (9,887) (2,800)
Income tax benefit (1,337) (1,358)
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Loss before extraordinary item (8,550) (1,442)
Extraordinary item -- 2,173
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Net loss $ (8,550) (3,615)
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Adjusted EBITDA* $ 52,004 $ 41,621
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</TABLE>
(*) Adjusted EBITDA represents earnings before interest, income tax,
depreciation and amortization expense and excludes for the third quarter
a $3.1 million charge, in the aggregate, based on a decision by
management to cease further direct investment into retail distribution;
an increase of $1.8 million in bad debt reserve related to the
Heilig-Meyers bankruptcy filing; and a cash operating loss of $0.4
million related to Gallery Corp. For the nine months adjusted EBITDA
excludes charges of $3.8 million related to severance; charges of $7.8
million, in the aggregate, based on a decision by manangement to cease
further direct investment into retail distribution; an increase of $1.8
million in bad debt reserve related to the Heilig-Meyers bankruptcy
filing; and a cash operating loss of $0.9 million related to Gallery
Corp.
