— Furniture Today,
LEXINGTON, Ky. — Strong consumer demand pushed first-quarter sales ahead 16% for visco-elastic foam


bedding leader Tempur-Pedic, the company reported late yesterday.

Earnings per share shot up 21% to 35 cents in the quarter, compared to first-quarter 2013 EPS of 29 cents.

The company, which makes visco-elastic pillows and related products in addition to mattresses, said net sales grew to $266 million in the quarter from $228.6 million in the year-ago quarter.

Net income for the quarter came to $29.8 million, compared to $26.9 million in the first quarter of 2013. The latest quarter’s profits were affected by stock-based compensation expense, which increased 127% to $1.8 million in the quarter. First-quarter results also include non-recurring charges of $1.8 million for payroll taxes associated with the exercise of certain executive stock options.

In addition, subsequent to the quarter’s end, Tempur-Pedic was notified of a bankruptcy by a U.S. customer, and recorded a bad-debt charge of $1.3 million in the first quarter.

The company said U.S. sales increased 20%, despite low inventories, and international sales rose 19% in the first quarter. Sales in the U.S. furniture and bedding retail channel were especially strong, the company said, up 25%.

Tempur-Pedic said it achieved growth across all product and geographic segments. Worldwide mattress revenue increased 16%. Domestic mattress revenue grew by the same percentage, driven by 13% unit volume growth. Pillow sales rose 23% worldwide, with unit growth of 20%.

“Tempur-Pedic International delivered a very solid quarter during what continues to be a challenging environment for the bedding industry,” said President and CEO Thomas Bryant.

Bryant said the company’s new manufacturing facility in Albuquerque, N.M., had a smooth start-up, with production ahead of expectations.

“However, we believe our first-quarter results were somewhat moderated by limitations on U.S. capacity and certain non-recurring chargers,” he said. “Throughout much of the first quarter, our U.S. business experienced mattress shortages resulting from strong consumer demand, low levels of inventory at the beginning of the year and capacity constraints.”

He said the company limited the opening of new accounts to minimize back orders for existing customers. He added the new plant is allowing the company to build inventory and eliminate back orders.

“As a result,” Bryant said, “we believe we have ample levels of mattress inventory and capacity to meet U.S. demand going forward.” That progress will allow the company to roll out its new SymphonyBed in the second quarter, he said.