The decrease in the wholesale bedding segment gross margin was partially offset by an increase in the retail bedding segment gross margin. Simmons' operating income was $13.0 million for the first quarter of 2005, compared to $17.3 million for the first quarter of 2004.
The Company's net income was $0.5 million for the first quarter of 2005 compared to $4.0 million for the first quarter of 2004. For the first quarter of 2005, adjusted EBITDA was $20.0 million compared to $37.3 million for the first quarter of 2004, a 46.4% decrease.
Simmons' Chairman and Chief Executive Officer, Charlie Eitel, said, "We are disappointed in our first quarter operating results. Although increases in certain selling, general and administrative expenses during the quarter were anticipated in light of planned spending, such as our national advertising campaign, our decline in sales was unexpected.
Sales of our 2005 product line, introduced in late 2004, did not meet our expectations. We have
taken measures which we believe will strengthen the line through introduction of additional products, and have adjusted our prices for certain products accordingly. Our retailers have been very supportive of the changes made to our product line."
Balance Sheet Items
Net debt (total debt of $748.4 million less cash of $17.8 million) totaled $730.6 million as of March 26, 2005, an increase of $2.3 million during the first quarter. During the fs unexpected.
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