<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarter ended AUGUST 31, 1994 Commission file number 1-8738
------------------------ ------
SEALY CORPORATION*
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-3284147
- - -------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
520 PIKE STREET
SEATTLE, WASHINGTON 98101
- - -------------------------- --------------------------------
(Address of principal (Zip Code)
executive offices)*
Registrant's telephone number, including area code (206) 625-1233
----------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
The number of shares of the registrant's common stock outstanding as of
SEPTEMBER 30, 1994 was 29,434,330 .
- - ------------------ -----------
* All corporate and administrative services are provided by Sealy, Inc., 10th
Floor Halle Building, 1228 Euclid Avenue, Cleveland, Ohio 44115.
================================================================================
<PAGE> 2
<TABLE>
PART I. FINANCIAL INFORMATION
-------------------------------
ITEM 1 - FINANCIAL STATEMENTS
SEALY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
AUGUST 31,
1994 1993
------------------------
<S> <C> <C>
Net sales $193,624 $189,943
-------- --------
Costs and expenses:
Cost of goods sold 102,206 99,142
Selling, general and administrative 57,634 57,258
Amortization of intangibles 3,517 3,900
Interest expense, net 7,776 8,872
-------- --------
171,133 169,172
------- -------
Income before income tax 22,491 20,771
Income tax 9,029 8,273
-------- --------
Net income $ 13,462 $ 12,498
======== ==========
Earnings per common share $ .44 $ .41
Weighted average number of common
shares and share equivalents outstanding
during period 30,768 30,457
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
2
<PAGE> 3
<TABLE>
SEALY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<CAPTION>
SUCCESSOR PRE-SUCCESSOR
----------------------------------- --------------
NINE MONTHS SEVEN MONTHS TWO MONTHS
ENDED ENDED ENDED
AUGUST 31, AUGUST 31, JANUARY 31,
1994 1993 1993
--------------- ---------------- --------------
<S> <C> <C> <C>
Net sales $525,982 $404,880 $103,492
-------- -------- --------
Costs and expenses:
Cost of goods sold 278,740 214,529 57,110
Selling, general and administrative 164,051 127,731 34,597
Amortization of intangibles 10,546 9,151 2,473
Interest expense, net 25,585 21,954 6,675
-------- -------- --------
478,922 373,365 100,855
------- ------- -------
Income before income tax
and extraordinary item 47,060 31,515 2,637
Income tax 19,841 13,559 1,660
------- -------- -------
Income before extraordinary item 27,219 17,956 977
Extraordinary loss from early
extinguishment of debt (net of
income taxes of $1,504) - 2,919 -
----------- ------- -----------
Net income $ 27,219 $15,037 $ 977
======== ======= =========
Earnings per common share:
Income before extraordinary item $ .89 $ .59 $ .03
Extraordinary loss - (.09) -
---------- ------- --------
Net income per common share $ .89 $ .50 $ .03
========= ======= =======
Weighted average number of common
shares and share equivalents outstanding
during period 30,642 30,325 30,062
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE> 4
<TABLE>
SEALY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<CAPTION>
AUGUST 31, NOVEMBER 30,
1994 1993
-------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 17,931 $ 20,919
Accounts receivable, less allowance for doubtful
accounts (1994 - $8,726; 1993 - $7,650) 90,731 72,128
Inventories 40,431 41,745
Prepaid expenses and taxes 19,047 23,261
-------- --------
168,140 158,053
Property, plant and equipment -- at cost 152,725 147,333
Less accumulated depreciation 14,163 7,228
-------- --------
138,562 140,105
Other assets:
Goodwill and other intangibles -
net of accumulated amortization
(1994 - $22,299; 1993 - $11,780) 496,931 507,450
Debt issuance costs and other assets 16,604 17,499
-------- ---------
513,535 524,949
-------- --------
$820,237 $823,107
======== ========
</TABLE>
4
<PAGE> 5
<TABLE>
SEALY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<CAPTION>
AUGUST 31, NOVEMBER 30,
1994 1993
--------------- -----------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion -- long-term obligations $ 12,519 $ 21,728
Accounts payable 32,528 28,603
Accrued interest payable 6,673 3,474
Accrued plant consolidation 4,365 7,341
Other accrued expenses 47,146 54,148
------- -------
103,231 115,294
Long-term obligations 354,587 384,451
Other noncurrent liabilities 14,643 17,160
Deferred income taxes 33,360 21,857
Stockholders' equity:
Common stock 295 295
Additional paid-in capital 263,746 260,581
Retained earnings 51,944 24,725
Foreign currency translation adjustment (1,569) (1,256)
------- -------
314,416 284,345
Commitments and contingencies
------- -------
$820,237 $823,107
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
5
<PAGE> 6
<TABLE>
SEALY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<CAPTION>
SUCCESSOR PRE-SUCCESSOR
--------------------------------- -------------
NINE MONTHS SEVEN MONTHS TWO MONTHS
ENDED ENDED ENDED
AUGUST 31, AUGUST 31, JANUARY 31,
1994 1993 1993
-------------- -------------- -------------
<S> <C> <C> <C>
Net cash provided by (used in)
operating activities $ 42,383 $56,129 $(1,277)
------- ------- --------
Net cash used in investing activities:
Property, plant and equipment, net (5,392) (7,643) (3,082)
-------- ------- --------
Financing activities:
Proceeds from bank loans and sale
of 9 1/2% Senior Subordinated
Notes due 2003 $ - $450,000 $ -
Repayment of prior bank loan and
12.4% Senior Subordinated
Notes due 2001 - (433,320) -
Debt issuance costs (906) (17,449) -
Other long term obligations, net (39,073) (32,821) 2,667
--------- -------- -------
Net cash (used in) provided by
financing activities $ (39,979) $(33,590) $ 2,667
--------- ---------- -------
Change in cash and cash equivalents (2,988) 14,896 (1,692)
Cash and cash equivalents:
Beginning of period 20,919 11,057 12,749
------- ------- -------
End of period $ 17,931 $25,953 $11,057
======= ======= =======
Supplemental disclosures:
- - -------------------------
Taxes paid, net $ 4,598 $ 2,356 $ 895
Interest paid $ 20,702 $13,759 $ 1,037
======= ======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE> 7
SEALY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1994, SEVEN MONTHS ENDED AUGUST, 1993
AND TWO MONTHS ENDED JANUARY 31, 1993
================================================================================
NOTE A -- ACCOUNTING FOR THE TRANSACTION AND BASIS OF PRESENTATION
This report covers Sealy Corporation and its subsidiaries (collectively, the
"Company").
The accompanying unaudited condensed consolidated financial statements
should be read together with the Company's Annual Report on Form 10-K for the
year ended November 30, 1993.
On February 12, 1993, a group of investors led by Zell/Chilmark Fund L.P., a
Delaware limited partnership, acquired the Company for $250.0 million (the
"Acquisition"). The Company employed the purchase method of accounting for the
Acquisition, the effect of which changed the basis of certain assets and
liabilities, including deferred income taxes, goodwill, property, plant and
equipment and stockholders' equity. As a result of the purchase accounting
adjustments, the financials for the nine months ended August 31, 1994 and the
seven months ended August 31, 1993 (the "Successor Financials") are not
comparable to the financials for the two months ended January 31, 1993 (the
"Pre-Successor Financials") presented herein.
The accompanying unaudited condensed consolidated financial statements
contain all adjustments which, in the opinion of management, are necessary to
present fairly the financial position of the Company at August 31, 1994, and
its results of operations and cash flows for the periods presented herein. All
adjustments in the periods presented herein are normal and recurring in nature.
The November 30, 1993 condensed consolidated balance sheet included herein is
derived from the audited consolidated balance sheet as of November 30, 1993.
NOTE B -- INVENTORIES
The major components of inventories were as follows:
<TABLE>
<CAPTION>
AUGUST 31, NOVEMBER 30,
1994 1993
------------- --------------
(IN THOUSANDS)
<S> <C> <C>
Raw materials $30,578 $31,573
Work in process 3,663 3,782
Finished goods 6,190 6,390
------- -------
$40,431 $41,745
======= =======
</TABLE>
7
<PAGE> 8
SEALY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1994, SEVEN MONTHS ENDED AUGUST, 1993
AND TWO MONTHS ENDED JANUARY 31, 1993
================================================================================
<TABLE>
<CAPTION>
NOTE C -- LONG-TERM OBLIGATIONS
AUGUST 31, NOVEMBER 30,
1994 1993
------------ --------------
(IN THOUSANDS)
<S> <C> <C>
Secured Credit Agreement:
Revolving Credit Facility $ - $ 3,000
Term Loan Facility - 196,774
Restated Credit Agreement:
Revolving Credit Facility 31,000 -
Term Loan Facility 130,000 -
9 1/2% Senior Subordinated Notes Due 2003 200,000 200,000
Other 6,106 6,405
-------- --------
367,106 406,179
Less current portion 12,519 21,728
-------- --------
$354,587 $384,451
======== ========
</TABLE>
On May 27, 1994, the Company entered into a restated secured credit
agreement (the "Restated Credit Agreement") with a majority of its then current
group of senior lenders (the "Senior Lenders"), which modified the terms of its
existing secured credit agreement (the "Secured Credit Agreement") by reducing
the amounts available under its existing term loan facilities thereunder from
an aggregate of $250 million to a single facility of $150 million (the "Term
Loan Facility") and by increasing the amount available under its existing
revolving credit facility thereunder from $75 million to $125 million (the
"Revolving Credit Facility"). At the time the Company entered into the
Restated Credit Agreement, it repaid $33 million of indebtedness outstanding
under its existing term loan facilities with additional borrowings of $33
million under the Revolving Credit Facility.
The Restated Credit Agreement provides for loans of up to $275 million and
consists of the $125 million Revolving Credit Facility and the $150 million
Term Loan Facility. The Revolving Credit Facility provides for a $30 million
discretionary letter of credit facility ("Letters of Credit") and a
discretionary swing loan facility of up to $5 million ("Swing Loans"). The
Revolving Credit Facility terminates and is due and payable on November 30,
1999.
The Term Loan Facility is a $150 million term loan with a final maturity
of November 30, 1999 and amortizes in uneven fiscal quarterly principal
payments aggregating $20 million in each of the fiscal years ending November
30, 1994 and 1995, $25 million in each of the fiscal years ending November 30,
1996 and 1997 and $30 million in each of the fiscal years ending November 30,
1998 and 1999.
Under the terms of the Restated Credit Agreement, the Company is initially
obligated to pay a commitment fee rate of 0.375% per annum on the unused
portion of the Revolving Credit Facility. The fee, which is payable quarterly
in arrears, is reduced or increased depending on certain financial ratios.
8
<PAGE> 9
SEALY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED AUGUST 31, 1994, SEVEN MONTHS ENDED AUGUST, 1993
AND TWO MONTHS ENDED JANUARY 31, 1993
================================================================================
The May 27, 1994 refinancing lowered the Company's contractual interest rates
and debt service obligations. Two separate interest rate options exist under
the Restated Credit Agreement and are available to the Company at its option as
follows:
(a) A Floating Rate which is the greater of
(i) A Corporate Base Rate plus an applicable margin or
(ii) A Federal Funds Rate plus 0.25% and an applicable margin; or
(b) A Eurodollar Rate plus an applicable margin.
The applicable margin is initially zero for the Floating Rate option and
1.25% for the Eurodollar Rate option. The applicable margin is reduced or
increased depending on certain financial ratios.
In addition, certain other provisions of the Restated Credit Agreement
were amended to provide more flexibility to the Company relating to, among
other things, investments, capital expenditures and incurrence of debt.
During the nine months ended August 31, 1994, the maximum amount
outstanding under the revolving credit facility pursuant to either the Restated
Credit Agreement or the Secured Credit Agreement, excluding outstanding Letters
of Credit, was $33 million. At August 31, 1994, the Company had approximately
$84 million available under the Revolving Credit Facility, with $31 million
outstanding and Letters of Credit issued totalling approximately $10 million.
All obligations of the Company to the Senior Lenders are jointly and
severally guaranteed by each direct and indirect domestic subsidiary of the
Company and secured by first priority liens on and security interests in
substantially all of the assets of the Company and its domestic subsidiaries
and by first priority pledges of substantially all of the capital stock of most
of the subsidiaries of the Company.
NOTE D -- CONTINGENCIES
Sealy Corporation and one of its subsidiaries are parties to an
Administrative Consent Order (the "ACO") issued by the New Jersey Department of
Environmental Protection and Energy (the "Department"), dating back to 1989,
which requires that soil and groundwater sampling be conducted to determine the
extent of environmental contamination found at a closed plant owned by the
subsidiary in South Brunswick, New Jersey. The Company does not believe that
any of its manufacturing processes was a source of any of the contaminants
found to exist above regulatory acceptable levels in the groundwater, and the
Company is exploring other possible sources of the contamination, including
former owners of the facility. As the current owners of the facility, however,
the Company and its subsidiary are primarily responsible for site investigation
and any necessary clean-up plan approved by the Department under the terms of
the ACO. The Company has established an accrual for further site
investigation and remediation. However, because of the nature of certain of
the contaminants found, their geological location in fractured bedrock, the
lack of any accepted technology for successfully remediating the contamination,
as well as additional factors, including the uncertainties surrounding the
nature and application of environmental regulations, the practical and
technical difficulties in obtaining complete delineation of the contamination,
the level of clean-up that may be required, if any, or the technology that
could be involved, and the possible involvement of other potentially
responsible parties, the Company cannot presently predict the ultimate cost to
remediate this facility and there can be no assurance that the Company will not
incur material liability with respect to this matter. Based on the facts
currently known by the Company, management believes that the accrual is
adequate to cover the Company's probable liability and does not believe that
resolution of this matter will have a material adverse effect on the Company's
financial position or future operations.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
The Company employed the purchase method of accounting for the Acquisition
in February 1993. In accordance with generally accepted accounting principles,
the post-Acquisition financials for the nine months ended August 31, 1994 and
the seven months ended August 31, 1993, presented in Part I, Item 1 herein, are
not comparable to the pre-Acquisition financials for the two months ended
January 31, 1993. The application of purchase accounting for the Acquisition
resulted in changes in the valuation of certain assets and liabilities, the
effect of which had a slight change in the amount of depreciation and
amortization in the post-Acquisition financials when compared with amounts in
the pre-Acquisition Financials.
RESULTS OF OPERATIONS
For ease of reference in the following Nine Month table, the results of
operations of the Company for the seven months ended August 31, 1993 have been
arithmetically combined with the two months ended January 31, 1993.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
AUGUST 31, AUGUST 31,
--------------------------- --------------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $193.6 $190.0 $525.9 $508.4
------ ------ ------ ------
Cost and expenses:
Cost of goods sold 102.2 99.2 278.7 271.7
Selling, general and
administrative 57.7 57.3 164.1 162.3
Amortization of intangibles 3.5 3.9 10.5 11.6
Interest expense, net 7.8 8.8 25.6 28.6
------ ------ ------ ------
171.2 169.2 478.9 474.2
----- ----- ----- ------
Income before income tax
and extraordinary item 22.4 20.8 47.0 34.2
Income tax 9.0 8.3 19.8 15.3
------ ------ ------ -----
Income before extraordinary item 13.4 12.5 27.2 18.9
Extraordinary item - - - 2.9
-------- -------- -------- ------
Net income $ 13.4 $ 12.5 $ 27.2 $ 16.0
====== ====== ====== ======
</TABLE>
THREE AND NINE MONTHS ENDED AUGUST 31, 1994 AND 1993
NET SALES. Net Sales increased $3.6 million (1.9%) and $17.5 million
(3.5%), for the three and nine months ended August 31, 1994, respectively. The
Company's sales increase for the nine months ended August 31, 1994 was due
primarily to a 7.9% increase in conventional bedding average unit selling price
primarily attributable to a shift in sales to higher priced Posturepedic
products, partially offset by a 3.4% overall decline in unit shipments
primarily in the low end promotional and private label bedding lines. In
addition, sales of wood furniture products, which increased 35.2%, more than
offset the loss of sales resulting from the Company's decision in the prior
year to discontinue the manufacture and sale of waterbed products.
During the third quarter of 1994, the Company ceased substantially all of
its manufacturing of private label bedding for Sears, Roebuck and Co.
("Sears"). Although there can be no assurances, management believes that
continued consumer acceptance of the Company's Posturepedic line, as well as
improved operating efficiencies, will result in the decision by Sears not
having a material adverse impact on the Company's profitability.
10
<PAGE> 11
COST OF GOODS SOLD. As a percentage of net sales, cost of goods sold for
the three months ended August 31, 1994 increased 0.6 percentage point due
primarily to sales price rollbacks on certain Sealy bedding lines and
transitional inefficiencies resulting from plant shutdowns and the transfer of
business to ongoing facilities. Cost of goods sold for the nine months ended
August 31, 1994 decreased 0.4 percentage point due to an improved product mix,
improved raw material management and manufacturing overhead cost control.
SELLING, GENERAL AND ADMINISTRATIVE . As a percentage of sales, selling,
general and administrative expenses for the three and nine months ended August
31, 1994 declined 0.3 and 0.7 percentage point to 29.8% and 31.2%,
respectively. The Company's continued marketing emphasis focused on increasing
the brand loyalty of its products through more extensive national advertising
has resulted in a $4.5 million increase in national advertising expense
compared to the nine month period a year ago. This increase was offset, in
part, by a decline of $2.1 million in sales employment costs resulting from a
consolidation of the Sealy and Stearns & Foster salesforces.
Through the nine months ended August 31, 1994, the Company has incurred
non-cash charges of $3.1 million in connection with the Performance Share Plan
(the "Plan") pursuant to which certain members of management were granted
performance share units, each representing the right to receive, after November
30, 1996, up to one Share of the Company to the extent the Company meets
defined cumulative cash flow targets over a five-year period. So long as the
Plan is in effect, the Company is expected to incur additional non-cash charges
in future years, based on (a) the fair market value of such Shares, (b) the
number of performance share units outstanding, and (c) management's estimate of
cumulative cash flow during the measurement period. In addition, the amount of
non-cash compensation expense recorded in the future will be adjusted to give
cumulative effect to any change in the expense recorded in prior reporting
periods resulting from (i) subsequent increases or decreases in the fair value
of the Shares and/or in the number of performance share units outstanding since
such reporting period, and (ii) any change in management's estimate of its
ability to achieve the defined cumulative cash flow targets.
INTEREST EXPENSE, NET. Interest expense, net for the three and nine
months ended August 31, 1994 decreased 0.7% ($1.1 million) and 0.7% ($3.0
million), respectively, due primarily to a net reduction of approximately $70
million in total indebtedness and a reduction in interest rates as a result of
refinancings in May 1993 and May 1994.
INCOME TAX. The Company's effective income tax rates differ from the
Federal statutory rate because of the application of purchase accounting,
certain foreign tax rate differentials and state and local taxes.
NET INCOME. For the reasons set forth above, net income as a percentage
of sales improved 0.4 and 2.0 percentage points or approximately $0.9 and $11.2
million for the three and nine months ended August 31, 1994, respectively.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended August 31, 1994, the Company's principal
source of funds consisted of cash flow from operating activities. Its
principal uses of funds consisted of payments of principal, interest and
capital expenditures. Capital expenditures totalled $7.8 million for the nine
months. Management believes that annual capital expenditure limitations in its
Restated Credit Agreement will not significantly inhibit the Company from
meeting its ongoing operating needs. At August 31, 1994, the Company had
approximately $84 million available under the Revolving Credit Facility, with
$31 million outstanding, and Letters of Credit issued totalling approximately
$10 million. The Company's net weighted average borrowing cost was 8.4% for
the nine months ended August 31, 1994.
On May 27, 1994, the Company entered into a Restated Credit Agreement with
a majority of its then current group of Senior Lenders, which modified the
terms of its Secured Credit Agreement by reducing the amounts available under
its existing term loan facilities thereunder from an aggregate of $250 million
to a single facility of $150 million (the "Term Loan Facility") and by
increasing the amount available under its existing revolving credit facility
thereunder from $75 million to $125 million (the "Revolving Credit Facility").
At the time the Company entered into the Restated Credit Agreement, it repaid
$33 million of indebtedness outstanding under its existing term loan facilities
with additional
11
<PAGE> 12
borrowings of $33 million under the Revolving Credit Facility. The Restated
Credit Agreement provides for loans of up to $275 million and consists of the
$125 million Revolving Credit Facility and the $150 million Term Loan Facility.
The Revolving Credit Facility terminates and is due and payable on November 30,
1999.
The Company believes this refinancing will result in reduced interest
expense of up to $1.1 million in the second half of fiscal1994 and anticipates
future savings over the remaining term of the Restated Credit Agreement. The
refinancing also provides the Company with certain less restrictive covenants
and greater financial flexibility in the management of cash.
Management believes that the Company will have the necessary liquidity for
the next several years to fund its expected capital expenditures, obligations
under its Restated Credit Agreement and subordinated note indenture,
environmental liabilities, if any, and for other needs required to manage its
business, through cash flow from operations, availability under the Revolving
Credit Facility, and additional flexibility to expand borrowing capacity.
12
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- - --------------------------
See Note D to the Condensed Consolidated Financial Statements, Part I,
Item 1 included herein.
Item 5. Other Information
- - --------------------------
None
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibits
Financial Data Schedule - Exhibit 27
(b) Reports on Form 8-K
None
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Sealy Corporation has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SEALY CORPORATION
By: /s/ Jesse E. Hogan
------------------------
Jesse E. Hogan
Senior Vice President and
Chief Financial Officer
(Duly Authorized and
Principal Financial Officer)
Date: October 14, 1994
14
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000748015
<NAME> SEALY CORP
<MULTIPLIER> 1000
<CURRENCY> US. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-START> DEC-01-1993
<PERIOD-END> AUG-31-1994
<EXCHANGE-RATE> 1
<CASH> 5,170
<SECURITIES> 12,761
<RECEIVABLES> 99,457
<ALLOWANCES> 8,726
<INVENTORY> 40,431
<CURRENT-ASSETS> 168,140
<PP&E> 152,725
<DEPRECIATION> 14,163
<TOTAL-ASSETS> 820,237
<CURRENT-LIABILITIES> 103,231
<BONDS> 354,587
<COMMON> 295
0
0
<OTHER-SE> 314,121
<TOTAL-LIABILITY-AND-EQUITY> 820,237
<SALES> 525,982
<TOTAL-REVENUES> 525,982
<CGS> 278,740
<TOTAL-COSTS> 278,740
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,585
<INCOME-PRETAX> 47,060
<INCOME-TAX> 19,841
<INCOME-CONTINUING> 27,219
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,219
<EPS-PRIMARY> .89
<EPS-DILUTED> .89
</TABLE>
