In the second quarter and first half of this year our business operated at record sales levels despite a relatively soft home furnishings sales environment.
Charlie Eitel, CEO. Simmons

Simmons Company reported a record sales increase of 15.2% for the quarter ended June 30, 2007. Quarterly sales increased to $277.9 million compared to $241.2 million for the same period last year.

Simmons' domestic sales growth compared to 2006 was primarily attributable to an increase in conventional bedding units sold of 10.8%, or $23.1 million, and an increase in conventional bedding average unit selling price ("AUSP") of 0.2%, or approximately $0.5 million.

Despite the strong sales growth, gross profit for the second quarter of 2007 decreased to $106.1 million, or 38.2% of net sales, from $109.2 million, or 45.3% of net sales, for the same period of 2006.  Simmons' Chairman and Chief Executive Officer Charlie Eitel said margins in the first half of 2007 were negatively impacted by roll out costs and bringing products into compliance with the U.S. Consumer Product Safety Commission's new regulations relating to open flame resistance standards which became effective July 1, 2007.

"In the second quarter and first half of this year our business operated at record sales levels despite a relatively soft home furnishings sales environment. Our year-to-date sales growth of 14.3% has been driven principally by effective marketing and our decision to be competitive at a broad range of retail price points. This has resulted in strong demand for our U.S. products, especially our Beautyrest brand, and we believe a sizable gain in market share," said CEO Eitel.