ISPA Reports Slower Sales for Fourth Quarter 2006.

ALEXANDRIA, Va. -- Results from the December industry survey sample of 19 leading U.S. mattress producers, just released by the International Sleep Products Association (ISPA), show wholesale revenues of $970 million and total unit shipments of 4.6 million in fourth quarter 2006. The latest survey results from this industry sample show dollars grew 2.1%, while unit shipments declined 1.8% compared to fourth quarter 2005 figures, for a quarterly AUSP increase of nearly 4.0%. Complete details on the full industry's performance for '06 will be available in ISPA's 2006 Mattress Industry Overview, due out this spring.

Based on the survey results, unit shipments for the full-year 2006 were down 1.1% from 2005, offset by a healthy increase of 6.4% for wholesale revenues. These results suggest average annual growth rates for the three-year period 2004 through 2006 totaled 2.0% for unit shipments and 9.7% for wholesale revenues, continuing a strong industry trend whereby wholesale revenues have increased every year since 2001. The sustained industry performance is attributed to increased demand for high-end products priced above $1,000 plus other favorable economic and demographic trends.

The decline in unit shipments for 2006 reflects negative year-over-year unit comparisons in six of the twelve months, including a five-month trend beginning in August. This trend suggests consumer demand for durable goods purchases such as furniture and bedding continues to be squeezed by economic factors, such as increased mortgage rates, a recession in the housing sector, higher energy prices and increased interest rates.

Compared to 2006 results, ISPA's latest forecast predicts higher growth rates for 2007 and 2008. Unit shipments for 2007 and 2008 are predicted to grow 1.5% and 3.0%, respectively. And growth in value of bedding sales is projected at 8.5% and 8.0% over this two-year period. Economic factors including more stable gasoline prices and expected decline in interest rates are forecasted to improved consumer demand for new bedding products.

"The general picture is one of steady growth, with average annual dollar growth rates of 6.5% for the last 20 years," said Dick Doyle, ISPA president and CEO. "This latest report is consistent with the trends predicted by our econometric model for the entire industry, which statistically links the bedding industry to the larger home furnishings market and the national economy."

"Along with our member companies, ISPA continues to actively support an expanded mattress market and promote overall sales," Doyle added. "Our Better Sleep Council's consumer research and education programs have been significantly expanded this year, and we continue to support the mattress retail community with vital consumer information through our acclaimed Sleep Savvy magazine," he added.

According to the latest report, the leading producers shipped 2.1 million innerspring mattresses versus 259,000 non-innerspring products during the fourth quarter of 2006. The dollar value of those mattresses was $529.0 million and $218.1 million, respectively. Shipments of innerspring mattresses dropped 3.8%, while non-innerspring product shipments grew on average nearly 8.3% when compared to the fourth quarter of 2005.

In regional terms, the South continues to lead in number of units shipped and wholesale dollar value, followed by the West, the North Central and the Northeast regions. The South and North Central regions experienced a decline in shipments for the 12 months of 2006 (compared to full year 2005), but all regions enjoyed dollar growth in mattress shipments for the same period.

ISPA publishes the most complete and accurate data available on the U.S. mattress industry. The statistics package includes monthly reports on mattress and foundation shipments, a two-year forecast issued bi-annually, and an annual report of sales statistics, which includes AUSP, size, regional and innerspring vs. non-innerspring breakouts, twenty-year trends for unit shipments and wholesale dollars, price point data and more. To subscribe to these exclusive reports, visit www.sleepproducts.org or contact Jane Oseth at 703-683-8371, extension 1130.

About ISPA

Established in 1915, the International Sleep Products Association, www.sleepproducts.org is the trade organization for mattress manufacturers and their component suppliers around the world. ISPA hosts the biennial ISPA EXPO trade show and publishes BedTimes and Sleep Savvy magazines.