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 first quarter the Company repaid $3.7 million of its term loan. The increase in net debt is primarily attributable to reduced operating margins combined with an increase in working capital during the quarter. For the first quarter of 2005, Simmons' working capital (see the Supplemental Information to this press release) as a percentage of net sales for the trailing twelve months was 2.4% compared to 2.1% at the end of 2004.
Conclusion
The Company will webcast its 2005 first quarter financial results via a conference call on Wednesday, May 11, 2005, beginning at 11:00 a.m. Eastern Time. The webcast will be available at the Company's website http://www.simmons.com and will also be available for replay through May 25, 2005.
Atlanta-based Simmons Bedding Company is one of the world's largest mattress manufacturers, manufacturing and marketing a broad range of products including Beautyrest, BackCaretyrtyrest, BackCare, BackCare Kids, Olympic Queen, Deep Sleep and HealthSmart. The Company operates 17 conventional bedding manufacturing facilities and three juvenile bedding manufacturing facilities across the United States and Puerto Rico. Simmons is committed to developing superior mattresses and promoting a higher quality sleep for consumers around the world.
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