Tempur-Pedic Posts First Quarter Income of $33.2 Million

April 20, 2010  by in UnCategorized   

By Home Furnishings Business in Bedding on April 21, 2010 Bedding supplier Tempur-Pedic (NYSE: TPX) reported net income of $33.2 million for the first quarter ended March 31, compared to $13.3 million during the same quarter last year.

Sales for the quarter were $253.9 million, an increase of 43 percent from the $177.1 million reported in the first quarter of last year. In addition to its earnings, the company announced a $100 million share repurchase program.

"We are very pleased with our first quarter results€”we have increased sales and grown our market share while improving both our gross and operating margins," said Mark Savary, chief executive officer. "Our investments in marketing and research and development are driving our sales momentum and we believe they will continue to do so in the future."

During the first quarter of 2010, the company purchased 3.7 million shares of its common stock at an average price of $27.07 for a total cost of $100 million.

The board of directors has authorized a new share repurchase program of up to an incremental $100 million. Stock repurchases under this program may be made through open market transactions, negotiated purchases or otherwise, at times and in such amounts as management and a committee of the board deem appropriate.

The timing and number of shares repurchased will depend on different factors including price, financing and regulatory requirements and other market conditions. Repurchases may also be made under a Rule 10b5-1 plan, which would allow shares to be repurchased when Tempur-Pedic might otherwise be precluded from doing so under insider trading laws. This share repurchase program replaces the company's prior share repurchase authorization, and may be limited, suspended or terminated at any time without prior notice.

"In addition to our increased financial guidance for 2010 we believe we are well-positioned for substantial growth in sales, earnings and cash flow, with limited capital expenditures, over the next several years," said Dale Williams, chief financial officer. "After considerable evaluation of our capital structure, we continue to view share repurchases as an excellent means to return value to shareholders over the long term."

Looking forward, the company increased its 2010 guidance for net sales and earnings per share. Tempur-Pedic expects net sales for the year to range from $1.02 billion to $1.06 billion with earnings per share to range from $1.70 to $1.85.