Minnesota | 41-1597886 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
1001 Third Avenue South | ||
Minneapolis, Minnesota | 55404 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer o | ||
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company o | |
Emerging growth company o |
Page | ||
Item 1. | Financial Statements (unaudited) | |
Condensed Consolidated Statements of Shareholders' (Deficit) Equity | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
June 30, 2018 | December 30, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,407 | $ | 3,651 | |||
Accounts receivable, net of allowance for doubtful accounts of $547 and $714, respectively | 22,065 | 19,312 | |||||
Inventories | 90,241 | 84,298 | |||||
Income taxes receivable | 6,527 | — | |||||
Prepaid expenses | 10,580 | 17,565 | |||||
Other current assets | 26,399 | 27,665 | |||||
Total current assets | 158,219 | 152,491 | |||||
Non-current assets: | |||||||
Property and equipment, net | 202,378 | 208,646 | |||||
Goodwill and intangible assets, net | 76,497 | 77,588 | |||||
Deferred income taxes | — | 2,625 | |||||
Other non-current assets | 33,256 | 30,484 | |||||
Total assets | $ | 470,350 | $ | 471,834 | |||
Liabilities and Shareholders’ (Deficit) Equity | |||||||
Current liabilities: | |||||||
Borrowings under revolving credit facility | $ | 182,500 | $ | 24,500 | |||
Accounts payable | 100,996 | 129,194 | |||||
Customer prepayments | 28,136 | 27,767 | |||||
Accrued sales returns | 16,527 | 19,270 | |||||
Compensation and benefits | 24,688 | 34,602 | |||||
Taxes and withholding | 9,078 | 24,234 | |||||
Other current liabilities | 48,065 | 46,822 | |||||
Total current liabilities | 409,990 | 306,389 | |||||
Non-current liabilities: | |||||||
Deferred income taxes | 4,587 | — | |||||
Other non-current liabilities | 76,927 | 76,289 | |||||
Total liabilities | 491,504 | 382,678 | |||||
Shareholders’ (deficit) equity: | |||||||
Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding | — | — | |||||
Common stock, $0.01 par value; 142,500 shares authorized, 34,893 and 38,813 shares issued and outstanding, respectively | 349 | 388 | |||||
Additional paid-in capital | — | — | |||||
(Accumulated deficit) retained earnings | (21,503 | ) | 88,768 | ||||
Total shareholders’ (deficit) equity | (21,154 | ) | 89,156 | ||||
Total liabilities and shareholders’ (deficit) equity | $ | 470,350 | $ | 471,834 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | ||||||||||||
Net sales | $ | 316,338 | $ | 284,673 | $ | 704,971 | $ | 678,572 | |||||||
Cost of sales | 127,450 | 108,054 | 278,606 | 255,494 | |||||||||||
Gross profit | 188,888 | 176,619 | 426,365 | 423,078 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 151,106 | 144,498 | 323,023 | 313,764 | |||||||||||
General and administrative | 28,828 | 28,819 | 60,562 | 62,588 | |||||||||||
Research and development | 6,868 | 6,363 | 13,793 | 13,959 | |||||||||||
Total operating expenses | 186,802 | 179,680 | 397,378 | 390,311 | |||||||||||
Operating income (loss) | 2,086 | (3,061 | ) | 28,987 | 32,767 | ||||||||||
Other expense, net | 1,453 | 282 | 1,978 | 420 | |||||||||||
Income (loss) before income taxes | 633 | (3,343 | ) | 27,009 | 32,347 | ||||||||||
Income tax (benefit) expense | (3,111 | ) | (2,565 | ) | 2,717 | 8,664 | |||||||||
Net income (loss) | $ | 3,744 | $ | (778 | ) | $ | 24,292 | $ | 23,683 | ||||||
Basic net income (loss) per share: | |||||||||||||||
Net income (loss) per share – basic | $ | 0.10 | $ | (0.02 | ) | $ | 0.65 | $ | 0.56 | ||||||
Weighted-average shares – basic | 36,138 | 41,716 | 37,191 | 42,233 | |||||||||||
Diluted net income (loss) per share: | |||||||||||||||
Net income (loss) per share – diluted | $ | 0.10 | $ | (0.02 | ) | $ | 0.64 | $ | 0.55 | ||||||
Weighted-average shares – diluted | 36,844 | 41,716 | 38,096 | 43,080 |
Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total | |||||||||||||||
Shares | Amount | |||||||||||||||||
Balance at December 30, 2017 | 38,813 | $ | 388 | $ | — | $ | 88,768 | $ | 89,156 | |||||||||
Net income | — | — | — | 24,292 | 24,292 | |||||||||||||
Exercise of common stock options | 124 | 1 | 1,595 | — | 1,596 | |||||||||||||
Stock-based compensation | 254 | 3 | 6,739 | — | 6,742 | |||||||||||||
Repurchases of common stock | (4,298 | ) | (43 | ) | (8,334 | ) | (134,563 | ) | (142,940 | ) | ||||||||
Balance at June 30, 2018 | 34,893 | $ | 349 | $ | — | $ | (21,503 | ) | $ | (21,154 | ) |
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 24,292 | $ | 23,683 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 31,089 | 31,177 | |||||
Stock-based compensation | 6,742 | 7,876 | |||||
Net loss on disposals and impairments of assets | 15 | 2 | |||||
Deferred income taxes | 7,212 | 4,974 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (2,753 | ) | (4,781 | ) | |||
Inventories | (5,943 | ) | 5,170 | ||||
Income taxes | (19,075 | ) | (14,532 | ) | |||
Prepaid expenses and other assets | 8,242 | 2,110 | |||||
Accounts payable | (4,859 | ) | 11,858 | ||||
Customer prepayments | 369 | 19,518 | |||||
Accrued compensation and benefits | (9,944 | ) | 9,834 | ||||
Other taxes and withholding | (2,608 | ) | (6,032 | ) | |||
Other accruals and liabilities | (3,648 | ) | (2,050 | ) | |||
Net cash provided by operating activities | 29,131 | 88,807 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (21,341 | ) | (27,132 | ) | |||
Proceeds from sales of property and equipment | 70 | — | |||||
Net cash used in investing activities | (21,271 | ) | (27,132 | ) | |||
Cash flows from financing activities: | |||||||
Repurchases of common stock | (142,940 | ) | (80,094 | ) | |||
Net increase in short-term borrowings | 133,253 | 3,098 | |||||
Proceeds from issuance of common stock | 1,596 | 2,654 | |||||
Debt issuance costs | (1,013 | ) | (10 | ) | |||
Net cash used in financing activities | (9,104 | ) | (74,352 | ) | |||
Net decrease in cash, cash equivalents and restricted cash | (1,244 | ) | (12,677 | ) | |||
Cash, cash equivalents and restricted cash, at beginning of period | 3,651 | 14,759 | |||||
Cash, cash equivalents and restricted cash, at end of period | $ | 2,407 | $ | 2,082 |
Three Months Ended | Six Months Ended | |||||||
June 30, 2018 | June 30, 2018 | |||||||
Retail | $ | 286,853 | $ | 642,922 | ||||
Online and phone | 24,927 | 52,894 | ||||||
Company-Controlled channel | 311,780 | 695,816 | ||||||
Wholesale/Other channel | 4,558 | 9,155 | ||||||
Total | $ | 316,338 | $ | 704,971 |
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Balance at beginning of year | $ | 19,270 | $ | 15,222 | |||
Additions that reduce net sales | 36,555 | 32,434 | |||||
Deductions from reserves | (39,298 | ) | (35,054 | ) | |||
Balance at end of period | $ | 16,527 | $ | 12,602 |
June 30, 2018 | December 30, 2017 | ||||||
Raw materials | $ | 4,285 | $ | 6,577 | |||
Work in progress | 214 | 170 | |||||
Finished goods | 85,742 | 77,551 | |||||
$ | 90,241 | $ | 84,298 |
June 30, 2018 | December 30, 2017 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Developed technologies | $ | 18,851 | $ | 7,796 | $ | 18,851 | $ | 6,705 | |||||||
Trade names/trademarks | 101 | 101 | 101 | 101 | |||||||||||
$ | 18,952 | $ | 7,897 | $ | 18,952 | $ | 6,806 |
June 30, 2018 | December 30, 2017 | ||||||
Outstanding borrowings | $ | 182,500 | $ | 24,500 | |||
Outstanding letters of credit | $ | 3,450 | $ | 3,150 | |||
Additional borrowing capacity | $ | 114,050 | $ | 125,500 | |||
Weighted-average interest rate | 3.6 | % | 3.1 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||||||
Amount repurchased under Board-approved share repurchase program | $ | 65,000 | $ | 25,000 | $ | 140,000 | $ | 75,000 | ||||||||
Amount repurchased in connection with the vesting of employee restricted stock grants | 292 | 300 | 2,940 | 5,094 | ||||||||||||
Total amount repurchased | $ | 65,292 | $ | 25,300 | $ | 142,940 | $ | 80,094 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||||||
Stock awards | $ | 2,996 | $ | 3,584 | $ | 5,488 | $ | 6,720 | ||||||||
Stock options | 662 | 588 | 1,254 | 1,156 | ||||||||||||
Total stock-based compensation expense | 3,658 | 4,172 | 6,742 | 7,876 | ||||||||||||
Income tax benefit | 896 | 1,406 | 1,652 | 2,654 | ||||||||||||
Total stock-based compensation expense, net of tax | $ | 2,762 | $ | 2,766 | $ | 5,090 | $ | 5,222 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | ||||||||||||
Interest expense | $ | (1,454 | ) | $ | (288 | ) | $ | (1,981 | ) | $ | (470 | ) | |||
Interest income | 1 | 6 | 3 | 50 | |||||||||||
Other expense, net | $ | (1,453 | ) | $ | (282 | ) | $ | (1,978 | ) | $ | (420 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | ||||||||||||
Net income (loss) | $ | 3,744 | $ | (778 | ) | $ | 24,292 | $ | 23,683 | ||||||
Reconciliation of weighted-average shares outstanding: | |||||||||||||||
Basic weighted-average shares outstanding | 36,138 | 41,716 | 37,191 | 42,233 | |||||||||||
Dilutive effect of stock-based awards | 706 | — | 905 | 847 | |||||||||||
Diluted weighted-average shares outstanding | 36,844 | 41,716 | 38,096 | 43,080 | |||||||||||
Net income (loss) per share – basic | $ | 0.10 | $ | (0.02 | ) | $ | 0.65 | $ | 0.56 | ||||||
Net income (loss) per share – diluted | $ | 0.10 | $ | (0.02 | ) | $ | 0.64 | $ | 0.55 |
Six Months Ended | |||||||
June 30, 2018 | July 1, 2017 | ||||||
Balance at beginning of year | $ | 9,320 | $ | 8,633 | |||
Additions charged to costs and expenses for current-year sales | 6,106 | 4,243 | |||||
Deductions from reserves | (5,790 | ) | (3,665 | ) | |||
Changes in liability for pre-existing warranties during the current year, including expirations | 132 | (55 | ) | ||||
Balance at end of period | $ | 9,768 | $ | 9,156 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Risk Factors |
• | Company Overview |
• | Results of Operations |
• | Liquidity and Capital Resources |
• | Non-GAAP Data |
• | Off-Balance-Sheet Arrangements and Contractual Obligations |
• | Critical Accounting Policies |
• | Current and future general and industry economic trends and consumer confidence; |
• | The effectiveness of our marketing messages; |
• | The efficiency of our advertising and promotional efforts; |
• | Our ability to execute our Company-Controlled distribution strategy; |
• | Our ability to achieve and maintain acceptable levels of product and service quality, and acceptable product return and warranty claims rates; |
• | Our ability to continue to improve and expand our product line, and consumer acceptance of our products, product quality, innovation and brand image; |
• | Industry competition, the emergence of additional competitive products and the adequacy of our intellectual property rights to protect our products and brand from competitive or infringing activities; |
• | The potential for claims that our products, processes, advertising or trademarks infringe the intellectual property rights of others; |
• | Availability of attractive and cost-effective consumer credit options; |
• | Shortages in supply due to “just-in-time” manufacturing processes with minimal levels of inventory utilized for some of our products, or due to global shortages of electronic componentry; |
• | Our dependence on significant suppliers and our ability to maintain relationships with key suppliers, including several sole-source suppliers; |
• | Rising commodity costs and other inflationary pressures; |
• | Risks inherent in global sourcing activities, including the potential for shortages in supply; |
• | Risks of disruption in the operation of either of our two main manufacturing facilities; |
• | Increasing government regulation and the costs of compliance and risks of non-compliance with existing and new regulations; |
• | Pending or unforeseen litigation and the potential for adverse publicity associated with litigation; |
• | The adequacy of our management information systems to meet the evolving needs of our business and existing and evolving regulatory standards applicable to data privacy and security; |
• | The costs and potential disruptions to our business related to upgrading our management information systems; |
• | The vulnerability of our management information systems to attacks by hackers or other cyber threats that could compromise the security of our systems, result in a data breach or disrupt our business; and |
• | Our ability to attract, retain and motivate qualified management, executive and other key employees, including qualified retail sales professionals and managers. |
• | Net sales for the three months ended June 30, 2018 increased 11% to $316 million, compared with $285 million for the same period one year ago. Net sales for the comparable period one year ago were affected by an approximately $25 million shift in sales from our second quarter to our third quarter as a result of a delay in deliveries and shipments related to an inventory shortage at a new supplier. |
• | The 11% sales increase resulted from a 9% comparable sales increase in our Company-Controlled channel and 3 percentage points (ppt.) of growth from sales generated by 16 net new stores opened in the past 12 months. |
• | The transition to our full line of Sleep Number 360® smart beds continued during the quarter and is now complete. In May 2017, we began selling our i7 and i10 smart beds. We launched a third smart bed model (the p6) in December 2017. In April 2018, we |
• | Sales per store (Company-Controlled channel sales for stores open at least one year) on a trailing twelve-month basis for the period ended June 30, 2018 totaled $2.6 million, 4% higher than the same period one-year ago. |
• | Operating income for the three months ended June 30, 2018 was $2 million, a $5 million increase from an operating loss of $3 million for the prior-year period. Our operating income rate increased to 0.7% of net sales, compared with an operating loss rate of 1.1% of net sales for the same period last year. The current-period's operating income rate benefited from operating expense controls and sales leverage which mitigated the lower gross profit rate. Prior year's operating loss was affected by the sales shift discussed above. |
• | Net income for the three months ended June 30, 2018 was $4 million, or $0.10 per diluted share, compared with a net loss of $1 million, or $(0.02) per diluted share, for the same period one year ago. The current quarter includes a one-time tax planning benefit of $2.9 million, or $0.08 per diluted share, associated with the new Tax Cuts and Jobs Act. |
• | Cash provided by operating activities totaled $29 million for the six months ended June 30, 2018, compared with $89 million for the same period one year ago. The largest drivers in the year-over-year change in operating cash flows resulted from the timing of performance-based incentive compensation payments and expenses, fluctuations in customer prepayments resulting from higher than normal prepayments at July 1, 2017 (delayed deliveries and shipments due to an inventory shortage from one of our new suppliers) and year-over-year changes in inventory levels. Investing activities for the current-year period included $21 million of property and equipment purchases, compared with $27 million for the same period last year. |
• | At June 30, 2018, cash and cash equivalents totaled $2 million and we ended the quarter with $183 million of borrowings under our $300 million revolving credit facility. |
• | In the second quarter of 2018, we repurchased 2.1 million shares of our common stock under our Board-approved share repurchase program at a cost of $65 million (an average of $30.36 per share). As of June 30, 2018, the remaining authorization under our Board-approved share repurchase program was $325 million. |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||||||||||||||||||
Net sales | $ | 316.3 | 100.0 | % | $ | 284.7 | 100.0 | % | $ | 705.0 | 100.0 | % | $ | 678.6 | 100.0 | % | ||||||||||||
Cost of sales | 127.5 | 40.3 | % | 108.1 | 38.0 | % | 278.6 | 39.5 | % | 255.5 | 37.7 | % | ||||||||||||||||
Gross profit | 188.9 | 59.7 | % | 176.6 | 62.0 | % | 426.4 | 60.5 | % | 423.1 | 62.3 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Sales and marketing | 151.1 | 47.8 | % | 144.5 | 50.8 | % | 323.0 | 45.8 | % | 313.8 | 46.2 | % | ||||||||||||||||
General and administrative | 28.8 | 9.1 | % | 28.8 | 10.1 | % | 60.6 | 8.6 | % | 62.6 | 9.2 | % | ||||||||||||||||
Research and development | 6.9 | 2.2 | % | 6.4 | 2.2 | % | 13.8 | 2.0 | % | 14.0 | 2.1 | % | ||||||||||||||||
Total operating expenses | 186.8 | 59.1 | % | 179.7 | 63.1 | % | 397.4 | 56.4 | % | 390.3 | 57.5 | % | ||||||||||||||||
Operating income | 2.1 | 0.7 | % | (3.1 | ) | (1.1 | %) | 29.0 | 4.1 | % | 32.8 | 4.8 | % | |||||||||||||||
Other expense, net | 1.5 | 0.5 | % | 0.3 | 0.1 | % | 2.0 | 0.3 | % | 0.4 | 0.1 | % | ||||||||||||||||
Income before income taxes | 0.6 | 0.2 | % | (3.3 | ) | (1.2 | %) | 27.0 | 3.8 | % | 32.3 | 4.8 | % | |||||||||||||||
Income tax (benefit) expense | (3.1 | ) | (1.0 | %) | (2.6 | ) | (0.9 | %) | 2.7 | 0.4 | % | 8.7 | 1.3 | % | ||||||||||||||
Net income | $ | 3.7 | 1.2 | % | $ | (0.8 | ) | (0.3 | %) | $ | 24.3 | 3.4 | % | $ | 23.7 | 3.5 | % | |||||||||||
Net income per share: | ||||||||||||||||||||||||||||
Basic | $ | 0.10 | $ | (0.02 | ) | $ | 0.65 | $ | 0.56 | |||||||||||||||||||
Diluted | $ | 0.10 | $ | (0.02 | ) | $ | 0.64 | $ | 0.55 | |||||||||||||||||||
Weighted-average number of common shares: | ||||||||||||||||||||||||||||
Basic | 36.1 | 41.7 | 37.2 | 42.2 | ||||||||||||||||||||||||
Diluted | 36.8 | 41.7 | 38.1 | 43.1 |
Three Months Ended | Six Months Ended | |||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||
Company-Controlled channel | 98.6 | % | 97.7 | % | 98.7 | % | 98.0 | % | ||||
Wholesale/Other channel | 1.4 | % | 2.3 | % | 1.3 | % | 2.0 | % | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended | Six Months Ended | |||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||
Sales change rates: | ||||||||||||
Retail comparable-store sales(1) | 8 | % | (6 | %) | 1 | % | (1 | %) | ||||
Online and phone | 19 | % | 26 | % | 12 | % | 22 | % | ||||
Company-Controlled comparable sales change | 9 | % | (4 | %) | 2 | % | 0 | % | ||||
Net opened/closed stores | 3 | % | 8 | % | 3 | % | 9 | % | ||||
Total Company-Controlled channel | 12 | % | 4 | % | 5 | % | 9 | % | ||||
Wholesale/Other channel | (29 | %) | (31 | %) | (33 | %) | (27 | %) | ||||
Total net sales change | 11 | % | 3 | % | 4 | % | 8 | % |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||||||
Average sales per store(1) ($ in thousands) | $ | 2,645 | $ | 2,535 | ||||||||||||
Average sales per square foot(1) | $ | 985 | $ | 983 | ||||||||||||
Stores > $1 million in net sales(2) | 98 | % | 97 | % | ||||||||||||
Stores > $2 million in net sales(2) | 63 | % | 58 | % | ||||||||||||
Average revenue per mattress unit – Company-Controlled channel(3) | $ | 4,508 | $ | 4,306 | $ | 4,459 | $ | 4,155 |
Three Months Ended | Six Months Ended | |||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||
Beginning of period | 558 | 546 | 556 | 540 | ||||||||
Opened | 11 | 8 | 24 | 24 | ||||||||
Closed | (4 | ) | (5 | ) | (15 | ) | (15 | ) | ||||
End of period | 565 | 549 | 565 | 549 |
Six Months Ended | ||||||||
June 30, 2018 | July 1, 2017 | |||||||
Total cash provided by (used in): | ||||||||
Operating activities | $ | 29.1 | $ | 88.8 | ||||
Investing activities | (21.3 | ) | (27.1 | ) | ||||
Financing activities | (9.1 | ) | (74.4 | ) | ||||
Net decrease in cash, cash equivalents and restricted cash | $ | (1.2 | ) | $ | (12.7 | ) |
Three Months Ended | Trailing-Twelve Months Ended | |||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||||||
Net income (loss) | $ | 3,744 | $ | (778 | ) | $ | 65,686 | $ | 60,715 | |||||||
Income tax (benefit) expense | (3,111 | ) | (2,565 | ) | 20,014 | 25,597 | ||||||||||
Interest expense | 1,454 | 288 | 2,486 | 924 | ||||||||||||
Depreciation and amortization | 15,326 | 14,918 | 60,945 | 60,170 | ||||||||||||
Stock-based compensation | 3,658 | 4,172 | 14,629 | 12,231 | ||||||||||||
Asset impairments | 85 | 2 | 327 | 47 | ||||||||||||
Adjusted EBITDA | $ | 21,156 | $ | 16,037 | $ | 164,087 | $ | 159,684 |
Six Months Ended | Trailing-Twelve Months Ended | |||||||||||||||
June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017 | |||||||||||||
Net cash provided by operating activities | $ | 29,131 | $ | 88,807 | $ | 112,931 | $ | 193,332 | ||||||||
Subtract: Purchases of property and equipment | 21,341 | 27,132 | 54,038 | 61,220 | ||||||||||||
Free cash flow | $ | 7,790 | $ | 61,675 | $ | 58,893 | $ | 132,112 |
Trailing-Twelve Months Ended | ||||||||
June 30, 2018 | July 1, 2017 | |||||||
Net operating profit after taxes (NOPAT) | ||||||||
Operating income | $ | 88,135 | $ | 87,124 | ||||
Add: Rent expense(1) | 76,215 | 70,815 | ||||||
Add: Interest income | 50 | 112 | ||||||
Less: Depreciation on capitalized operating leases(2) | (19,640 | ) | (17,956 | ) | ||||
Less: Income taxes(3) | (43,934 | ) | (46,095 | ) | ||||
NOPAT | $ | 100,826 | $ | 94,000 | ||||
Average invested capital | ||||||||
Total equity | $ | (21,154 | ) | $ | 114,439 | |||
Add: Long-term debt(4) | 183,405 | — | ||||||
Add: Capitalized operating lease obligations(5) | 609,720 | 566,520 | ||||||
Total invested capital at end of period | $ | 771,971 | $ | 680,959 | ||||
Average invested capital(6) | $ | 705,575 | $ | 690,524 | ||||
Return on invested capital (ROIC)(7) | 14.3 | % | 13.6 | % |
(a) – (b) | Not applicable. |
(c) | Issuer Purchases of Equity Securities |
Fiscal Period | Total Number of Shares Purchased(1)(2) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(3) | ||||||||||
April 1, 2018 through April 28, 2018 | 616,438 | $ | 33.19 | 610,258 | $ | 369,757,000 | ||||||||
April 29, 2018 through May 26, 2018 | 712,304 | 28.60 | 711,933 | 349,396,000 | ||||||||||
May 27, 2018 through June 30, 2018 | 820,816 | 29.80 | 818,559 | 325,000,000 | ||||||||||
Total | 2,149,558 | $ | 30.37 | 2,140,750 | $ | 325,000,000 |
(1) | Under our Board-approved $500 million share repurchase program, we repurchased 2,140,750 shares of our common stock at a cost of $65 million (based on trade dates) during the three months ended June 30, 2018. |
(2) | In connection with the vesting of employee restricted stock grants, we also repurchased 8,808 shares of our common stock at a cost of $0.3 million during the three months ended June 30, 2018. |
(3) | There is no expiration date governing the period over which we can repurchase shares under our Board-approved share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status. |
Exhibit Number | Description | Method of Filing | ||
10.1 | Filed herewith | |||
31.1 | Filed herewith | |||
31.2 | Filed herewith | |||
32.1 | Furnished herewith(2) | |||
32.2 | Furnished herewith(2) | |||
101 | The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2018, filed with the SEC on August 3, 2018, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets as of June 30, 2018 and December 30, 2017; (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and July 1, 2017; (iii) Condensed Consolidated Statement of Shareholders' (Deficit) Equity for the six months ended June 30, 2018; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and July 1, 2017; and (v) Notes to Condensed Consolidated Financial Statements. | Filed herewith |
SLEEP NUMBER CORPORATION | |||||
(Registrant) | |||||
Dated: | August 3, 2018 | By: | /s/ Shelly R. Ibach | ||
Shelly R. Ibach | |||||
Chief Executive Officer | |||||
(principal executive officer) | |||||
By: | /s/ Robert J. Poirier | ||||
Robert J. Poirier | |||||
Chief Accounting Officer | |||||
(principal accounting officer) |
I. | AMENDMENTS TO THE AGREEMENT |
(d) | Credit Criteria for Internet and Telephone Sales. Bank will use commercially reasonable efforts XXXX. Bank’s credit criteria for the Internet and telephone channels XXXX. From time to time, Retailer may XXXX. |
(a) | Bank initially will make available under the Program those credit-based promotions and corresponding Retailer Fee Percentages described on the attached Schedule 6(a). Subject to the qualifications set forth below in this 6(a), Retailer shall have the right to reduce any Retailer Fee Percentage on Schedule 6(a) (as the same may be adjusted from time to time pursuant to Section 6(c) or Section 6(e)) so as to reduce such Retailer Fee Percentage by XXXX below the Retailer Fee Percentage actually set forth on such Schedule (each such reduced rate is referred to as a “Special Discount Rate”); provided, that (i) such reduction shall be subject to the Special Discount Cap (as defined below), and (ii) for clarity, the application of XXXX reduction shall in no way result in any Retailer |
(c) | (i) At the end of the XXXX and each XXXX thereafter, Bank and Retailer will review and evaluate the effectiveness of the Program generally (including the credit-based promotion sales mix, the overall level of sales charged to Accounts, and Account fraud and credit losses during such period), as well as the performance of each credit-based promotion during such period. Based on such review, Bank may, after consultation with and notice to Retailer, adjust the Retailer Fee Percentages and, for any credit-based promotion, terminate such promotion or adjust the Retailer Fee Percentage applicable thereto. In addition, Retailer acknowledges that Bank may modify, terminate, or replace one or more credit-based promotions due to changes in applicable law (including Regulation Z) or regulatory guidance. Notwithstanding the foregoing, Bank may review and adjust the Retailer Fee Percentages applicable to internet and telephone sales at the end of the XXXX and XXXX thereafter after complying with consultation and notice requirements of this section. As used herein XXXX means the XXXX commencing on the Effective Date and each such XXXX thereafter during the term hereof and any shorter prior from the beginning of a XXXX until the termination of this Agreement. |
(a) | This Agreement shall continue until the end of the day on December 31, 2023 (the “Term”). |
SYNCHRONY BANK By: /s/ Anthony S. Foster Its: SVP | SLEEP NUMBER CORPORATION SELECT COMFORT RETAIL CORPORATION By: /s/ Andy Carlin Its: EVP/Chief Sales and Services Officer |
Promotion | Retailer Fee Percentage | |
Retail | Telephone/Internet | |
6 Month WPDI | XXXX | XXXX |
12 Month WPDI | XXXX | XXXX |
13 Month WPDI | XXXX | XXXX |
14 Month WPDI | XXXX | XXXX |
15 Month WPDI | XXXX | XXXX |
16 Month WPDI | XXXX | XXXX |
17 Month WPDI | XXXX | XXXX |
18 Month WPDI | XXXX | XXXX |
19 Month WPDI | XXXX | XXXX |
20 Month WPDI | XXXX | XXXX |
21 Month WPDI | XXXX | XXXX |
22 Month WPDI | XXXX | XXXX |
23 Month WPDI | XXXX | XXXX |
24 Month WPDI | XXXX | XXXX |
18 Month EPNI | XXXX | XXXX |
24 Month EPNI | XXXX | XXXX |
25 Month EPNI | XXXX | XXXX |
26 Month EPNI | XXXX | XXXX |
27 Month EPNI | XXXX | XXXX |
28 Month EPNI | XXXX | XXXX |
29 Month EPNI | XXXX | XXXX |
30 Month EPNI | XXXX | XXXX |
31 Month EPNI | XXXX | XXXX |
32 Month EPNI | XXXX | XXXX |
33 Month EPNI | XXXX | XXXX |
34 Month EPNI | XXXX | XXXX |
35 Month EPNI | XXXX | XXXX |
36 Month EPNI | XXXX | XXXX |
48 Month EPNI | XXXX | XXXX |
60 Month EPNI | XXXX | XXXX |
60 Month Fixed Pay @ 5.99% | XXXX | XXXX |
72 Month Fixed Pay @ 5.99% | XXXX | XXXX |
1. | I have reviewed this quarterly report on Form 10-Q of Sleep Number Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 3, 2018 | ||
/s/ Shelly R. Ibach | |||
Shelly R. Ibach | |||
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Sleep Number Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 3, 2018 | ||
/s/ David R. Callen | |||
David R. Callen | |||
Senior Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 3, 2018 | ||
/s/ Shelly R. Ibach | |||
Shelly R. Ibach | |||
Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 3, 2018 | ||
/s/ David R. Callen | |||
David R. Callen | |||
Senior Vice President and Chief Financial Officer |
CL/[H^4=\U]\_ [_ ()_>$OA';1K;Z=9VX7! M*PQ!0Q]^Y_'->\:1H=KH=JL-K"L<:C "BOC\[X\Q6+@Z.&7LXO=W]Y_/I\M? M,^JR?@?"82:K8C]Y);:>ZOEU^>GD4_!/@VU\%:+%9VL:HL:@<#K6Q117P9]P M%%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4 M444 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% !11 M10 4444 %%%% !1UHHH 8XYI^,444 %%%% !1110 4444 %%%% !1110 444 L4 %%%% !1110 4444 %%%% !1110 4444 %%%% !1110 4444 %%%% '_]D! end
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2018
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SLEEP NUMBER CORP |
Entity Central Index Key | 0000827187 |
Current Fiscal Year End Date | --12-29 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 34,893,000 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 30, 2017 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 547 | $ 714 |
Shareholders’ (deficit) equity: | ||
Undesignated preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Undesignated preferred stock, shares issued (in shares) | 0 | 0 |
Undesignated preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 142,500,000 | 142,500,000 |
Common stock, shares issued (in shares) | 34,893,000 | 38,813,000 |
Common stock, shares outstanding (in shares) | 34,893,000 | 38,813,000 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Income Statement [Abstract] | ||||
Net sales | $ 316,338 | $ 284,673 | $ 704,971 | $ 678,572 |
Cost of sales | 127,450 | 108,054 | 278,606 | 255,494 |
Gross profit | 188,888 | 176,619 | 426,365 | 423,078 |
Operating expenses: | ||||
Sales and marketing | 151,106 | 144,498 | 323,023 | 313,764 |
General and administrative | 28,828 | 28,819 | 60,562 | 62,588 |
Research and development | 6,868 | 6,363 | 13,793 | 13,959 |
Total operating expenses | 186,802 | 179,680 | 397,378 | 390,311 |
Operating income (loss) | 2,086 | (3,061) | 28,987 | 32,767 |
Other expense, net | 1,453 | 282 | 1,978 | 420 |
Income (loss) before income taxes | 633 | (3,343) | 27,009 | 32,347 |
Income tax (benefit) expense | (3,111) | (2,565) | 2,717 | 8,664 |
Net income (loss) | $ 3,744 | $ (778) | $ 24,292 | $ 23,683 |
Basic net income (loss) per share: | ||||
Net income (loss) per share – basic | $ 0.10 | $ (0.02) | $ 0.65 | $ 0.56 |
Weighted-average shares – basic | 36,138,000 | 41,716,000 | 37,191,000 | 42,233,000 |
Diluted net income (loss) per share: | ||||
Net income (loss) per share – diluted | $ 0.10 | $ (0.02) | $ 0.64 | $ 0.55 |
Weighted-average shares – diluted | 36,844,000 | 41,716,000 | 38,096,000 | 43,080,000 |
Consolidated Statement of Shareholders' Equity - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands |
Total |
Common Stock [Member] |
Additional Paid-In Capital [Member] |
Retained Earnings [Member] |
---|---|---|---|---|
Balance (in shares) at Dec. 30, 2017 | 38,813,000 | 38,813,000 | ||
Balance at Dec. 30, 2017 | $ 89,156 | $ 388 | $ 0 | $ 88,768 |
Net income | 24,292 | 24,292 | ||
Exercise of common stock options (in shares) | 124,000 | |||
Exercise of common stock options | 1,596 | $ 1 | 1,595 | 0 |
Stock-based compensation (in shares) | 254,000 | |||
Stock-based compensation | 6,742 | $ 3 | 6,739 | 0 |
Repurchases of common stock (in shares) | (4,298,000) | |||
Repurchases of common stock | $ (142,940) | $ (43) | (8,334) | (134,563) |
Balance (in shares) at Jun. 30, 2018 | 34,893,000 | 34,893,000 | ||
Balance at Jun. 30, 2018 | $ (21,154) | $ 349 | $ 0 | $ (21,503) |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Business and Summary of Significant Accounting Policies Business & Basis of Presentation We prepared the condensed consolidated financial statements as of and for the three and six months ended June 30, 2018 of Sleep Number Corporation and 100%-owned subsidiaries (Sleep Number or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position as of June 30, 2018 and December 30, 2017, and the consolidated results of operations and cash flows for the periods presented. Our historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with our most recent audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2017 and other recent filings with the SEC. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the consolidated financial statements in future periods. Our critical accounting policies consist of stock-based compensation, goodwill and indefinite-lived intangible assets, warranty liabilities and revenue recognition. The condensed consolidated financial statements include the accounts of Sleep Number Corporation and our 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. New Accounting Pronouncements Recently Adopted Accounting Guidance Adoption of ASC Topic 230, Restricted Cash Effective December 31, 2017, we adopted ASC Topic 230, Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. Amounts for prior periods have been retrospectively adjusted to conform to the current period presentation. Adoption of ASC Topic 606, Revenue from Contracts with Customers On December 31, 2017, we adopted ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of December 30, 2017. Results for reporting periods beginning after December 30, 2017 are presented under the new guidance, while prior period amounts are not restated. The cumulative effect of the changes made to our consolidated balance sheet as of December 31, 2017 resulting from the adoption of the new revenue guidance was not material and did not impact opening retained earnings. The impact on the timing of net sales for the three and six months ended June 30, 2018, as a result of applying the new guidance, was not material. Practical expedients and exemptions permissible under ASC Topic 606 that we elected are as follows: we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. See Note 2, Revenue Recognition, for further details regarding our revenue recognition policy. Accounting Guidance Issued but Not Yet Adopted as of June 30, 2018 In February 2016, the FASB issued ASC Topic 842, Leases, that requires most leases to be recognized on the balance sheet and expands disclosure requirements. The provisions of this new guidance permit us to utilize a prospective approach, with elective reliefs. We are the lessee under various agreements for facilities and equipment that are currently accounted for as operating leases. This new guidance is effective for us beginning December 30, 2018 and we are in the process of implementing a new lease accounting system in connection with the adoption. While we expect a material impact to our consolidated balance sheet as a result of the adoption of this new guidance, we continue to evaluate the effect of the new standard on our consolidated financial statements and related disclosures. We also expect that adoption of the new guidance will require changes to our internal controls over financial reporting. |
Revenue Recognition |
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Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue recognized excludes sales taxes. Amounts billed to customers for delivery and setup are included in net sales. For most products, we require payment before the products or services are delivered to the customer. Our beds sold with SleepIQ® technology contain multiple performance obligations including the bed and SleepIQ’s hardware and software. We analyze our multiple performance obligation(s) to determine whether they are distinct and can be separated or whether they must be accounted for as a single performance obligation. We determined that the beds sold with the SleepIQ technology have two performance obligations consisting of: (i) the bed; and (ii) SleepIQ's hardware and software. SleepIQ’s hardware and software are not separable as the hardware and related software are not sold separately and the software is integral to the hardware’s functionality. We determine the transaction price for multiple performance obligations based on their relative standalone selling prices. The performance obligation related to the bed is satisfied at a point in time. The performance obligation related to SleepIQ technology is satisfied over time based on the ongoing access and usage by the customer of software essential to the functionality of SleepIQ technology. The deferred revenue and costs related to SleepIQ technology are recognized on a straight-line basis over the product’s estimated life of four years because our inputs are generally expended evenly throughout the performance period. At June 30, 2018 and December 30, 2017, we had deferred contract liabilities of $71 million and $73 million, of which $31 million and $30 million are included in other current liabilities, respectively, and $40 million and $43 million are included in other non-current liabilities, respectively, in our consolidated balance sheets. We also had deferred contract assets of $45 million and $43 million, of which $19 million and $17 million are included in other current assets, respectively, and $26 million and $26 million are included in other non-current assets, respectively, in our consolidated balance sheets. During the three and six months ended June 30, 2018, we recognized revenue of $8 million and $16 million, respectively, that was included in the deferred contract liability balance at the beginning of the period. Revenue from goods and services transferred to customers at a point in time accounted for approximately 97% and 98% of our revenues for the three and six months ended June 30, 2018, respectively. Net sales from each of our channels was as follows (in thousands):
Obligation for Sales Returns We accept sales returns during a 100-night trial period. Accrued sales returns represents a refund liability for the amount of consideration that we do not expect to be entitled to because it will be refunded to customers. The refund liability estimate is based on historical return rates and is adjusted for any current trends as appropriate. Each reporting period we remeasure the liability to reflect changes in the estimate, with a corresponding adjustment to net sales. The activity in the sales returns liability account was as follows (in thousands):
|
Fair Value Measurements |
6 Months Ended |
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Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements At June 30, 2018 and December 30, 2017, we had $5 million and $4 million, respectively, of debt and equity securities that fund our deferred compensation plan and are classified in other non-current assets. We also had corresponding deferred compensation plan liabilities of $5 million and $4 million at June 30, 2018 and December 30, 2017, respectively, which are included in other non-current liabilities. The majority of the debt and equity securities are Level 1 as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. Unrealized gains/(losses) on the debt and equity securities offset those associated with the corresponding deferred compensation plan liabilities. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of the following (in thousands):
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Goodwill and Intangible Assets |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets, Net Goodwill and Indefinite-Lived Intangible Assets Goodwill was $64 million at June 30, 2018 and December 30, 2017. Indefinite-lived trade name/trademarks totaled $1.4 million at June 30, 2018 and December 30, 2017. Definite-Lived Intangible Assets The following table provides the gross carrying amount and related accumulated amortization of our definite-lived intangible assets (in thousands):
Amortization expense for the three months ended June 30, 2018 and July 1, 2017, was $0.5 million and $0.5 million, respectively. Amortization expense for the six months ended June 30, 2018 and July 1, 2017, was $1.1 million and $2.1 million, respectively. |
Credit Agreement |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Credit Agreement Our $300 million credit facility is for general corporate purposes and is also utilized to meet our seasonal working capital requirements. The credit agreement provides the lenders with a collateral security interest in substantially all of our assets and those of our subsidiaries and requires us to comply with, among other things, a maximum leverage ratio and a minimum interest coverage ratio. Under the terms of the credit agreement we pay a variable rate of interest and a commitment fee based on our leverage ratio. The credit agreement includes an accordion feature which allows us to increase the amount of the credit facility from $300 million to $450 million, subject to lenders' approval. The credit agreement matures in February 2023. We were in compliance with all financial covenants as of June 30, 2018. The following tables summarizes our borrowings under the credit facility ($ in thousands):
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Repurchase of Common Stock |
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Repurchase of Common Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of Common Stock | Repurchase of Common Stock Repurchases of our common stock were as follows (in thousands):
As of June 30, 2018, the remaining authorization under our Board-approved share repurchase program was $325 million. There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is first charged to additional paid-in capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to (accumulated deficit) retained earnings. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Expense Total stock-based compensation expense was as follows (in thousands):
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Profit Sharing and 401(k) Plan |
6 Months Ended |
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Jun. 30, 2018 | |
Profit Sharing and 401 (k) Plan [Abstract] | |
Profit Sharing and 401(k) Plan | Profit Sharing and 401(k) Plan Under our profit sharing and 401(k) plan, eligible employees may defer up to 50% of their compensation on a pre-tax basis, subject to Internal Revenue Service limitations. Each pay period, we may make a discretionary contribution equal to a percentage of the employee’s contribution. During the three months ended June 30, 2018 and July 1, 2017, our contributions, net of forfeitures, were $1.3 million and $1.2 million, respectively. During the six months ended June 30, 2018 and July 1, 2017, our contributions, net of forfeitures, were $2.7 million and $2.5 million, respectively. |
Other (Expense) Income, Net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Expense, Net | Other Expense, Net Other expense, net, consisted of the following (in thousands):
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Net Income Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Common Share | Net Income (Loss) per Common Share The components of basic and diluted net income (loss) per share were as follows (in thousands, except per share amounts):
For the three months ended June 30, 2018 and the six months ended June 30, 2018 and July 1, 2017, anti-dilutive stock-based awards excluded from the diluted net income per share calculations were immaterial. For the three months ended July 1, 2017, potentially dilutive stock-based awards have been excluded from the calculation of diluted weighted-average shares outstanding, as their inclusion would have had an anti-dilutive effect on our net loss per diluted share. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2018 | |
Income Taxes [Abstract] | |
Income Tax Disclosure [Text Block] | Income Taxes As a result of the enactment of the Tax Cuts and Jobs Act (TCJA), we recorded a provisional tax benefit of $1.7 million in the fourth quarter of 2017 based on our initial analysis of the TCJA using the best information and estimates available. During the second quarter 2018, we updated our provisional tax benefit based on new information, including a tax planning analysis, and recorded an additional $2.9 million provisional tax benefit. Due to the significant complexity of the TCJA, anticipated further guidance from the U.S. Treasury, the potential for additional guidance from the SEC/ FASB, or other new information becoming available, our provisional tax benefit may be further adjusted during 2018. Our provisional estimate is expected to be finalized no later than the fourth quarter of 2018. Further guidance and additional information regarding the TCJA may also impact our 2018 effective income tax rate, exclusive of any adjustment to the provisional tax benefit. |
Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Warranty Liabilities The activity in the accrued warranty liabilities account was as follows (in thousands):
Legal Proceedings We are involved from time to time in various legal proceedings arising in the ordinary course of our business, including primarily commercial, product liability, employment and intellectual property claims. In accordance with generally accepted accounting principles in the United States, we record a liability in our consolidated financial statements with respect to any of these matters when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. With respect to currently pending legal proceedings, we have not established an estimated range of reasonably possible additional losses either because we believe that we have valid defenses to claims asserted against us or the proceeding has not advanced to a stage of discovery that would enable us to establish an estimate. We currently do not expect the outcome of these matters to have a material effect on our consolidated results of operations, financial position or cash flows. Litigation, however, is inherently unpredictable, and it is possible that the ultimate outcome of one or more claims asserted against us could adversely impact our consolidated results of operations, financial position or cash flows. We expense legal costs as incurred. On January 12, 2015, Plaintiffs David and Katina Spade commenced a purported class action lawsuit in New Jersey state court against Sleep Number alleging that Sleep Number violated New Jersey consumer statutes by failing to provide to purchasing consumers certain disclosures required by the New Jersey Furniture Regulations. It is undisputed that plaintiffs suffered no actual damages or in any way relied upon or were impacted by the alleged omissions. Nonetheless, on behalf of a purported class of New Jersey purchasers of Sleep Number beds and bases, plaintiffs seek to recover a $100 statutory fine for each alleged omission, along with attorneys’ fees and costs. Sleep Number removed the case to the United States District Court for the District of New Jersey, which subsequently granted Sleep Number’s motion to dismiss. Plaintiffs appealed to the United States Court of Appeals for the Third Circuit, which certified two questions of law to the New Jersey Supreme Court relating to whether plaintiffs who have suffered no actual injury may bring claims. The New Jersey Supreme Court accepted the certified questions and on April 16, 2018, ruled in our favor on one of the two questions, holding that a consumer only has standing to bring a claim under the relevant statute if the consumer has been harmed by the defendant's conduct. The Third Circuit has remanded the case to the federal district court for further analysis consistent with the New Jersey Supreme Court’s opinion. As a result, we expect that the federal district court will dismiss any claims that Plaintiffs attempt to pursue consistent with the guidance set forth by the New Jersey Supreme Court. |
Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation, Policy | We prepared the condensed consolidated financial statements as of and for the three and six months ended June 30, 2018 of Sleep Number Corporation and 100%-owned subsidiaries (Sleep Number or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position as of June 30, 2018 and December 30, 2017, and the consolidated results of operations and cash flows for the periods presented. Our historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with our most recent audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2017 and other recent filings with the SEC. |
Use of Estimates, Policy | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the consolidated financial statements in future periods. Our critical accounting policies consist of stock-based compensation, goodwill and indefinite-lived intangible assets, warranty liabilities and revenue recognition. |
Consolidation, Policy | The condensed consolidated financial statements include the accounts of Sleep Number Corporation and our 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. |
New Accounting Pronouncements, Policy | New Accounting Pronouncements Recently Adopted Accounting Guidance Adoption of ASC Topic 230, Restricted Cash Effective December 31, 2017, we adopted ASC Topic 230, Restricted Cash, which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. Amounts for prior periods have been retrospectively adjusted to conform to the current period presentation. Adoption of ASC Topic 606, Revenue from Contracts with Customers On December 31, 2017, we adopted ASC Topic 606, Revenue from Contracts with Customers, using the modified retrospective method applied to those contracts which were not completed as of December 30, 2017. Results for reporting periods beginning after December 30, 2017 are presented under the new guidance, while prior period amounts are not restated. The cumulative effect of the changes made to our consolidated balance sheet as of December 31, 2017 resulting from the adoption of the new revenue guidance was not material and did not impact opening retained earnings. The impact on the timing of net sales for the three and six months ended June 30, 2018, as a result of applying the new guidance, was not material. Practical expedients and exemptions permissible under ASC Topic 606 that we elected are as follows: we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. See Note 2, Revenue Recognition, for further details regarding our revenue recognition policy. Accounting Guidance Issued but Not Yet Adopted as of June 30, 2018 In February 2016, the FASB issued ASC Topic 842, Leases, that requires most leases to be recognized on the balance sheet and expands disclosure requirements. The provisions of this new guidance permit us to utilize a prospective approach, with elective reliefs. We are the lessee under various agreements for facilities and equipment that are currently accounted for as operating leases. This new guidance is effective for us beginning December 30, 2018 and we are in the process of implementing a new lease accounting system in connection with the adoption. While we expect a material impact to our consolidated balance sheet as a result of the adoption of this new guidance, we continue to evaluate the effect of the new standard on our consolidated financial statements and related disclosures. We also expect that adoption of the new guidance will require changes to our internal controls over financial reporting. |
Revenue Recognition, Policy [Policy Text Block] | We recognize revenue when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue recognized excludes sales taxes. Amounts billed to customers for delivery and setup are included in net sales. For most products, we require payment before the products or services are delivered to the customer. Our beds sold with SleepIQ® technology contain multiple performance obligations including the bed and SleepIQ’s hardware and software. We analyze our multiple performance obligation(s) to determine whether they are distinct and can be separated or whether they must be accounted for as a single performance obligation. We determined that the beds sold with the SleepIQ technology have two performance obligations consisting of: (i) the bed; and (ii) SleepIQ's hardware and software. SleepIQ’s hardware and software are not separable as the hardware and related software are not sold separately and the software is integral to the hardware’s functionality. We determine the transaction price for multiple performance obligations based on their relative standalone selling prices. The performance obligation related to the bed is satisfied at a point in time. The performance obligation related to SleepIQ technology is satisfied over time based on the ongoing access and usage by the customer of software essential to the functionality of SleepIQ technology. The deferred revenue and costs related to SleepIQ technology are recognized on a straight-line basis over the product’s estimated life of four years because our inputs are generally expended evenly throughout the performance period. At June 30, 2018 and December 30, 2017, we had deferred contract liabilities of $71 million and $73 million, of which $31 million and $30 million are included in other current liabilities, respectively, and $40 million and $43 million are included in other non-current liabilities, respectively, in our consolidated balance sheets. We also had deferred contract assets of $45 million and $43 million, of which $19 million and $17 million are included in other current assets, respectively, and $26 million and $26 million are included in other non-current assets, respectively, in our consolidated balance sheets. During the three and six months ended June 30, 2018, we recognized revenue of $8 million and $16 million, respectively, that was included in the deferred contract liability balance at the beginning of the period. Revenue from goods and services transferred to customers at a point in time accounted for approximately 97% and 98% of our revenues for the three and six months ended June 30, 2018, respectively. We accept sales returns during a 100-night trial period. Accrued sales returns represents a refund liability for the amount of consideration that we do not expect to be entitled to because it will be refunded to customers. The refund liability estimate is based on historical return rates and is adjusted for any current trends as appropriate. Each reporting period we remeasure the liability to reflect changes in the estimate, with a corresponding adjustment to net sales. |
Stockholders' Equity, Policy | There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of stock repurchases is first charged to additional paid-in capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to (accumulated deficit) retained earnings. |
Profit Sharing and 401(k) Plan Policy | Under our profit sharing and 401(k) plan, eligible employees may defer up to 50% of their compensation on a pre-tax basis, subject to Internal Revenue Service limitations. Each pay period, we may make a discretionary contribution equal to a percentage of the employee’s contribution. |
Revenue Recognition (Tables) |
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Revenue Recognition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | Net sales from each of our channels was as follows (in thousands):
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Schedule of Sales Return Liability [Table Text Block] | The activity in the sales returns liability account was as follows (in thousands):
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following (in thousands):
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Goodwill and Intangible Assets (Tables) |
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Definite-Lived Intangible Assets | The following table provides the gross carrying amount and related accumulated amortization of our definite-lived intangible assets (in thousands):
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Credit Agreement Credit Agreement (Tables) |
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Schedule of Short-term Debt [Table Text Block] | The following tables summarizes our borrowings under the credit facility ($ in thousands):
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Repurchase of Common Stock (Tables) |
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Repurchase of Common Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of Common Stock | Repurchases of our common stock were as follows (in thousands):
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Stock-Based Compensation (Tables) |
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Stock-Based Compensation | Total stock-based compensation expense was as follows (in thousands):
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Other (Expense) Income, Net (Tables) |
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Other Expense, Net | Other expense, net, consisted of the following (in thousands):
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Net Income Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Common Share | The components of basic and diluted net income (loss) per share were as follows (in thousands, except per share amounts):
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Commitments and Contingencies (Tables) |
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Warranty Liabilities | The activity in the accrued warranty liabilities account was as follows (in thousands):
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Revenue Recognition (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
Dec. 30, 2017 |
|
Deferred Revenue Arrangement [Line Items] | |||
Deferred Revenue | $ 71 | $ 71 | $ 73 |
Deferred Costs | 45 | 45 | 43 |
Revenue recognized, included in beginning deferred revenue balance | 8 | $ 16 | |
Nonsoftware Service, Support and Maintenance Arrangement [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Product's Estimated Life | 4 years | ||
Other Current Liabilities [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred Revenue, Current | 31 | $ 31 | 30 |
Other Noncurrent Liabilities [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred Revenue, Noncurrent | 40 | 40 | 43 |
Other Current Assets [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred Costs, Current | 19 | 19 | 17 |
Other Noncurrent Assets [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Deferred Costs, Noncurrent | $ 26 | $ 26 | $ 26 |
Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 316,338 | $ 704,971 |
Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Percent of revenue recognized at a point in time | 97.00% | 98.00% |
Wholesale/Other channel [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 4,558 | $ 9,155 |
Company-Controlled channel [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 311,780 | 695,816 |
Online and phone [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 24,927 | 52,894 |
Retail [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 286,853 | $ 642,922 |
Revenue Recognition Sales Returns (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Sales Return Liability [Roll Forward] | ||
Balance at beginning of year | $ 19,270 | $ 15,222 |
Additions that reduce net sales | 36,555 | 32,434 |
Deductions from reserves | (39,298) | (35,054) |
Balance at end of period | $ 16,527 | $ 12,602 |
Fair Value Measurements (Details) - Recurring [Member] - Level 1 [Member] - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 30, 2017 |
---|---|---|
Other Assets [Member] | Available-for-sale Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities assets funding the deferred compensation plan | $ 5 | $ 4 |
Other Noncurrent Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan liability | $ 5 | $ 4 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 30, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,285 | $ 6,577 |
Work in progress | 214 | 170 |
Finished goods | 85,742 | 77,551 |
Inventories | $ 90,241 | $ 84,298 |
Goodwill and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2018 |
Dec. 30, 2017 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 64.0 | $ 64.0 |
Trade Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived trade name/trademarks | $ 1.4 | $ 1.4 |
Goodwill and Intangible Assets Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 30, 2017 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Definite-Lived Intangible Assets | $ 18,952 | $ 18,952 |
Definite-Lived Intangible Assets, Accumulated Amortization | 7,897 | 6,806 |
Developed Technologies [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-Lived Intangible Assets | 18,851 | 18,851 |
Definite-Lived Intangible Assets, Accumulated Amortization | 7,796 | 6,705 |
Trade names/trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Definite-Lived Intangible Assets | 101 | 101 |
Definite-Lived Intangible Assets, Accumulated Amortization | $ 101 | $ 101 |
Goodwill and Intangible Assets Amortization Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense definite-lived intangible assets | $ 0.5 | $ 1.1 | $ 0.5 | $ 2.1 |
Credit Agreement (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Dec. 30, 2017 |
|
Line of Credit Facility [Line Items] | ||
Borrowings under revolving credit facility | $ 182,500 | $ 24,500 |
February 2018 Amendment [Member] | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | 300,000 | |
Maximum Borrowing Capacity | $ 450,000 | |
Expiration Date | Feb. 14, 2023 | |
Borrowings under revolving credit facility | $ 182,500 | |
Letters of Credit Outstanding | 3,450 | |
Remaining Borrowing Capacity | $ 114,050 | |
Weighted-Average Interest Rate at Period End | 3.60% | |
March 2017 Amendment [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowings under revolving credit facility | 24,500 | |
Letters of Credit Outstanding | 3,150 | |
Remaining Borrowing Capacity | $ 125,500 | |
Weighted-Average Interest Rate at Period End | 3.10% |
Repurchase of Common Stock (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Repurchase of Common Stock [Abstract] | ||||
Amount repurchased under Board-approved share repurchase program | $ 65,000 | $ 25,000 | $ 140,000 | $ 75,000 |
Amount repurchased in connection with the vesting of employee restricted stock grants | 292 | 300 | 2,940 | 5,094 |
Total amount repurchased | 65,292 | $ 25,300 | 142,940 | $ 80,094 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 325,000 | $ 325,000 |
Stock-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Total stock-based compensation expense | $ 3,658 | $ 4,172 | $ 6,742 | $ 7,876 |
Income tax benefit | 896 | 1,406 | 1,652 | 2,654 |
Total stock-based compensation expense, net of tax | 2,762 | 2,766 | 5,090 | 5,222 |
Stock awards [Member] | ||||
Total stock-based compensation expense | 2,996 | 3,584 | 5,488 | 6,720 |
Stock Options [Member] | ||||
Total stock-based compensation expense | $ 662 | $ 588 | $ 1,254 | $ 1,156 |
Profit Sharing and 401(k) Plan (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Defined Contribution Plan Disclosure [Line Items] | ||||
Employee compensation deferral (in hundredths) | 50.00% | |||
Employer Contributions | $ 1.3 | $ 1.2 | $ 2.7 | $ 2.5 |
Other (Expense) Income, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Other Income and Expenses [Abstract] | ||||
Interest expense | $ (1,454) | $ (288) | $ (1,981) | $ (470) |
Interest income | 1 | 6 | 3 | 50 |
Other expense, net | $ (1,453) | $ (282) | $ (1,978) | $ (420) |
Net Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Net Income per Common Share [Abstract] | ||||
Net income | $ 3,744 | $ (778) | $ 24,292 | $ 23,683 |
Basic weighted-average shares outstanding | 36,138,000 | 41,716,000 | 37,191,000 | 42,233,000 |
Dilutive effect of stock-based awards | 706,000 | 0 | 905,000 | 847,000 |
Diluted weighted-average shares outstanding | 36,844,000 | 41,716,000 | 38,096,000 | 43,080,000 |
Net income per share – basic (in USD per share) | $ 0.10 | $ (0.02) | $ 0.65 | $ 0.56 |
Net income per share – diluted (in USD per share) | $ 0.10 | $ (0.02) | $ 0.64 | $ 0.55 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2018 |
Dec. 30, 2017 |
|
Income Taxes [Abstract] | ||
2017 TCJA Provisional Tax Benefit | $ 2.9 | $ 1.7 |
Commitments and Contingencies Warranty Liabilities (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 01, 2017 |
|
Warranty Liabilities [Roll Forward] | ||
Balance at beginning of year | $ 9,320 | $ 8,633 |
Additions charged to costs and expenses for current-year sales | 6,106 | 4,243 |
Deductions from reserves | (5,790) | (3,665) |
Changes in liability for pre-existing warranties during the current year, including expirations | 132 | (55) |
Balance at end of period | $ 9,768 | $ 9,156 |
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