ISPA Reports Slower Sales for Third Quarter 2006.

Forecast Reports Steady Rise Through '08

ALEXANDRIA, Va. -- Results from the September industry survey of 19 leading U.S. mattress producers just released by the International Sleep Products Association (ISPA), show wholesale revenues of $1.104 billion and total unit shipments of 5.3 million in third quarter 2006. The latest survey results from this industry sample show dollars grew 6.9%, while unit shipments declined 3.1% compared to third quarter 2005 figures, for a quarterly AUSP increase of 9.4%.

Over the three-year period 2003 through 2005, the average annual growth rate for the domestic mattress trade was 2.8% for unit shipments and 10.2% in wholesale revenues. Unit shipments have been slowing since the first quarter of this year, and ISPA's October 2006 forecast predicts unit shipments will essentially be flat in 2006, increasing only 0.5% over full year 2005 unit shipments of 42.8 million. This represents the lowest annual rate of growth since 2001. Extrapolating the third-quarter data to the total industry, ISPA expects 2006 wholesale revenues to increase by 7.5% to $6.8 billion. Wholesale revenues have increased every year since 2001, primarily due to increased demand for high-end products priced above $1,000 plus other favorable economic and demographic trends.

A declining growth rate in unit shipments suggests consumers are being squeezed by higher gasoline prices and increased interest rates, which have dampened durable goods purchases such as furniture and bedding. Consumer expenditures are also impacted by increased mortgage rates and a recession in the housing sector. While this unit volume trend is expected to continue through 2006, ISPA's forecast predicts higher growth rates in 2007 and 2008, to approximately 45 million unit shipments and a steady rise in wholesale revenues that top $8 billion by the end of 2008. It is anticipated that a drop in gasoline prices and a mid-2007 decline in interest rates will allow consumers to re-channel their resources into purchase of new bedding products.

"ISPA has published data on the domestic mattress trade since the early 1980s. The overall picture is one of slow but solid growth for the bedding industry, with average annual dollar growth rates of 6.5% for the past 20 years," said Dick Doyle, ISPA president and CEO. "The September figures, which represent 61% of industry sales and 48% of unit shipments, are consistent with the trends predicted by our econometric model for the entire industry. This model statistically links the bedding industry with the larger home furnishings market and the national economy, and it's combined with insight and up-to-the-minute market movements observed by seasoned industry analysts."

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According to the September report, the leading producers shipped 2.5 million innerspring mattresses versus 274,251 non-innerspring products. The dollar value of those mattresses was $618.7 million and $229.6 million respectively. Shipments of innerspring mattresses dropped while non-innerspring product shipments grew on average nearly 25% when compared to the third 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 the first nine months of 2006, 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 wwww.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.