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Sealy Corporation (ZZ) announced its financial results on Tuesday for its third quarter ended August 30, 2009.
Net sales for the third quarter were $349.6 million compared to $405.0 million in the same prior year period. Net income for the third quarter was $12.1 million, or $0.05 per share, versus net income of $10.9 million, or $0.12 per share, for the comparable prior year period. This met analysts estimates for net income of $0.05 per share.
Larry Rogers, Sealy's President and CEO, commented in a conference call, "Our operating and financial performance continued to improve in Q3 despite challenging market conditions. Our gross margins improved due to lower material costs and production efficiency gains. Our aggressive cost reduction initiatives continued to transform our company into a leaner a more productive business with a great deal of leverage when industry fundamentals improve. We also achieved our highest adjusted EBITDA margin in ten quarters."
He continued, "We continued to see excitement surrounding our new products. Our successful product launches have helped consistently narrow revenue declines over the last three quarters, and we believe that we are gaining domestic market share.
Jeffrey Ackerman, CFO of Sealy, noted, "Our consolidated SG&A expenses improved by 17% over the comparable period of last year."
Me Rogers concluded, "Our confidence in the long term viability of our industry has not wavered. The mattress industry has historically seen strong growth coming out of recessionary periods, as mattresses will always be a necessary purchase for consumers. Despite not having seen sufficient evidence to call an industry turnaround, we do feel that consumers are beginning to recover, and we are feeling more positive regarding bedding demand."
Piper Jaffrey believes Sealy's business trends and visibility are improving following the Company's in-line quarter. The firm raised its target on shares to $4 from $3 and reiterated its Overweight rating.
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