0-25121
|
41-1597886
|
|
(Commission File No.)
|
(IRS Employer Identification No.)
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
(c)
|
Exhibits.
|
Exhibit 99.1
|
Press Release, dated July 20, 2011
|
SELECT COMFORT CORPORATION
|
||
(Registrant) | ||
Dated: July 20, 2011
|
By:
|
/s/ Mark A. Kimball |
Mark A. Kimball
|
||
Title: | Senior Vice President |
Exhibit No.
|
Description of Exhibit
|
Press Release, dated July 20, 2011
|
Media Contact: | Investor Contact: |
Gabby Nelson | Wendy Schoppert |
(763) 551-7460 | (763) 551-7498 |
gabby.nelson@selectcomfort.com | investorrelations@selectcomfort.com |
|
·
|
Sets Record Second-quarter Operating Income and Margin
|
|
·
|
Raises 2011 Guidance
|
SELECT COMFORT CORPORATION
|
AND SUBSIDIARIES
|
Consolidated Statements of Operations
|
(unaudited – in thousands, except per share amounts)
|
Three Months Ended | ||||||||||||||||
July 2, 2011 | % of Net Sales | July 3, 2010 | % of Net Sales | |||||||||||||
Net sales
|
$ | 161,462 | 100.0 | % | $ | 138,952 | 100.0 | % | ||||||||
Cost of sales
|
58,958 | 36.5 | % | 52,487 | 37.8 | % | ||||||||||
Gross profit
|
102,504 | 63.5 | % | 86,465 | 62.2 | % | ||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
70,517 | 43.7 | % | 62,981 | 45.3 | % | ||||||||||
General and administrative
|
13,120 | 8.1 | % | 12,934 | 9.3 | % | ||||||||||
Research and development
|
1,223 | 0.8 | % | 613 | 0.4 | % | ||||||||||
Asset impairment charges
|
18 | 0.0 | % | - | 0.0 | % | ||||||||||
Total operating expenses
|
84,878 | 52.6 | % | 76,528 | 55.1 | % | ||||||||||
Operating income
|
17,626 | 10.9 | % | 9,937 | 7.2 | % | ||||||||||
Interest expense / other
|
(30 | ) | 0.0 | % | (56 | ) | 0.0 | % | ||||||||
Income before income taxes
|
17,596 | 10.9 | % | 9,881 | 7.1 | % | ||||||||||
Income tax expense
|
6,307 | 3.9 | % | 3,679 | 2.6 | % | ||||||||||
Net income
|
$ | 11,289 | 7.0 | % | $ | 6,202 | 4.5 | % | ||||||||
Net income per share – basic
|
$ | 0.21 | $ | 0.12 | ||||||||||||
Net income per share – diluted
|
$ | 0.20 | $ | 0.11 | ||||||||||||
Reconciliation of weighted-average shares outstanding:
|
||||||||||||||||
Basic weighted-average shares outstanding
|
54,958 | 53,911 | ||||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Options
|
911 | 903 | ||||||||||||||
Restricted shares
|
538 | 439 | ||||||||||||||
Diluted weighted-average shares outstanding
|
56,407 | 55,253 |
SELECT COMFORT CORPORATION
|
AND SUBSIDIARIES
|
Consolidated Statements of Operations
|
(unaudited – in thousands, except per share amounts)
|
Six Months Ended
|
||||||||||||||||
July 2, 2011 | % of Net Sales | July 3, 2010 | % of Net Sales | |||||||||||||
Net sales
|
$ | 354,530 | 100.0 | % | $ | 296,905 | 100.0 | % | ||||||||
Cost of sales
|
128,925 | 36.4 | % | 112,356 | 37.8 | % | ||||||||||
Gross profit
|
225,605 | 63.6 | % | 184,549 | 62.2 | % | ||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
150,788 | 42.5 | % | 133,073 | 44.8 | % | ||||||||||
General and administrative
|
28,743 | 8.1 | % | 26,083 | 8.8 | % | ||||||||||
Research and development
|
1,954 | 0.6 | % | 1,267 | 0.4 | % | ||||||||||
Asset impairment charges
|
96 | 0.0 | % | - | 0.0 | % | ||||||||||
Total operating expenses
|
181,581 | 51.2 | % | 160,423 | 54.0 | % | ||||||||||
Operating income
|
44,024 | 12.4 | % | 24,126 | 8.1 | % | ||||||||||
Interest expense / other
|
(60 | ) | 0.0 | % | (1,776 | ) | (0.6 | %) | ||||||||
Income before income taxes
|
43,964 | 12.4 | % | 22,350 | 7.5 | % | ||||||||||
Income tax expense
|
16,092 | 4.5 | % | 8,388 | 2.8 | % | ||||||||||
Net income
|
$ | 27,872 | 7.9 | % | $ | 13,962 | 4.7 | % | ||||||||
Net income per share – basic
|
$ | 0.51 | $ | 0.26 | ||||||||||||
Net income per share – diluted
|
$ | 0.50 | $ | 0.25 | ||||||||||||
Reconciliation of weighted-average shares outstanding:
|
||||||||||||||||
Basic weighted-average shares outstanding
|
54,842 | 53,763 | ||||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Options
|
762 | 971 | ||||||||||||||
Restricted shares
|
553 | 452 | ||||||||||||||
Diluted weighted-average shares outstanding
|
56,157 | 55,186 |
AND SUBSIDIARIES
|
Consolidated Balance Sheets
|
(in thousands, except per share amounts)
|
subject to reclassification
|
(unaudited) | ||||||||
July 2,
2011
|
January 1,
2011
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 57,645 | $ | 76,016 | ||||
Marketable debt securities – current
|
19,980 | - | ||||||
Accounts receivable, net of allowance for doubtful accounts of $306 and $302, respectively
|
7,134 | 9,909 | ||||||
Inventories
|
20,579 | 19,647 | ||||||
Prepaid expenses
|
7,740 | 6,388 | ||||||
Deferred income taxes
|
4,149 | 4,297 | ||||||
Other current assets
|
4,728 | 652 | ||||||
Total current assets
|
121,955 | 116,909 | ||||||
Marketable debt securities – non-current
|
20,012 | - | ||||||
Property and equipment, net
|
36,232 | 32,953 | ||||||
Deferred income taxes
|
12,563 | 15,965 | ||||||
Other assets
|
4,518 | 4,130 | ||||||
Total assets
|
$ | 195,280 | $ | 169,957 | ||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 40,171 | $ | 42,025 | ||||
Customer prepayments
|
10,493 | 12,944 | ||||||
Compensation and benefits
|
21,854 | 24,857 | ||||||
Taxes and withholding
|
4,531 | 5,359 | ||||||
Other current liabilities
|
13,159 | 11,671 | ||||||
Total current liabilities
|
90,208 | 96,856 | ||||||
Non-current liabilities:
|
||||||||
Warranty liabilities
|
2,444 | 2,815 | ||||||
Other long-term liabilities
|
12,941 | 12,309 | ||||||
Total non-current liabilities
|
15,385 | 15,124 | ||||||
Total liabilities
|
105,593 | 111,980 | ||||||
Shareholders’ equity:
|
||||||||
Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding
|
- | - | ||||||
Common stock, $0.01 par value; 142,500 shares authorized, 55,991 and 55,455 shares issued and outstanding, respectively
|
560 | 555 | ||||||
Additional paid-in capital
|
40,659 | 36,799 | ||||||
Retained earnings
|
48,495 | 20,623 | ||||||
Accumulated other comprehensive loss
|
(27 | ) | - | |||||
Total shareholders’ equity
|
89,687 | 57,977 | ||||||
Total liabilities and shareholders’ equity
|
$ | 195,280 | $ | 169,957 |
SELECT COMFORT CORPORATION
|
AND SUBSIDIARIES
|
Consolidated Statements of Cash Flows
|
(unaudited - in thousands)
|
subject to reclassification
|
Six Months Ended | ||||||||
July 2, 2011 |
July 3, 2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 27,872 | $ | 13,962 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
6,386 | 8,139 | ||||||
Stock-based compensation
|
2,256 | 1,491 | ||||||
Net disposals and impairments of assets
|
89 | (2 | ) | |||||
Excess tax benefits from stock-based compensation
|
(1,132 | ) | (901 | ) | ||||
Deferred income taxes
|
2,819 | (1,363 | ) | |||||
Change in operating assets and liabilities:
|
||||||||
Accounts receivable
|
2,775 | 3,596 | ||||||
Inventories
|
(932 | ) | (790 | ) | ||||
Income taxes
|
1,181 | 2,059 | ||||||
Prepaid expenses and other assets
|
(3,212 | ) | 33 | |||||
Accounts payable
|
(682 | ) | (1,126 | ) | ||||
Customer prepayments
|
(2,451 | ) | (284 | ) | ||||
Accrued compensation and benefits
|
(2,716 | ) | 4,578 | |||||
Other taxes and withholding
|
(320 | ) | (618 | ) | ||||
Warranty liabilities
|
(314 | ) | (96 | ) | ||||
Other accruals and liabilities
|
2,066 | (89 | ) | |||||
Net cash provided by operating activities
|
33,685 | 28,589 | ||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(9,585 | ) | (1,744 | ) | ||||
Proceeds from sales of property and equipment
|
7 | 3 | ||||||
Investments in marketable debt securities
|
(40,021 | ) | - | |||||
Increase in restricted cash
|
(2,650 | ) | - | |||||
Net cash used in investing activities
|
(52,249 | ) | (1,741 | ) | ||||
Cash flows from financing activities:
|
||||||||
Net decrease in short-term borrowings
|
(1,500 | ) | (1,573 | ) | ||||
Repurchases of common stock
|
(309 | ) | (1,360 | ) | ||||
Proceeds from issuance of common stock
|
870 | 120 | ||||||
Excess tax benefits from stock-based compensation
|
1,132 | 901 | ||||||
Debt issuance costs
|
- | (139 | ) | |||||
Net cash provided by (used in) financing activities
|
193 | (2,051 | ) | |||||
Net (decrease) increase in cash and cash equivalents
|
(18,371 | ) | 24,797 | |||||
Cash and cash equivalents, at beginning of period
|
76,016 | 12,184 | ||||||
Cash and cash equivalents, at end of period
|
$ | 57,645 | $ | 36,981 |
SELECT COMFORT CORPORATION
|
AND SUBSIDIARIES
|
Supplemental Financial Information
|
(unaudited)
|
Three Months Ended | Six Months Ended | |||||||||||||||
July 2, 2011 | July 3, 2010 | July 2, 2011 | July 3, 2010 | |||||||||||||
Percent of sales:
|
||||||||||||||||
Retail
|
87.1 | % | 82.3 | % | 86.8 | % | 82.9 | % | ||||||||
Direct and E-Commerce
|
8.7 | % | 11.7 | % | 9.1 | % | 11.7 | % | ||||||||
Wholesale
|
4.2 | % | 6.0 | % | 4.1 | % | 5.4 | % | ||||||||
Total
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Sales growth rates:
|
||||||||||||||||
Retail comparable-store sales
|
25 | % | 28 | % | 28 | % | 29 | % | ||||||||
Direct and E-Commerce
|
(13 | %) | 6 | % | (8 | %) | 11 | % | ||||||||
Company-Controlled comparable sales change
|
20 | % | 25 | % | 23 | % | 25 | % | ||||||||
Net closed stores/other
|
(2 | %) | (7 | %) | (2 | %) | (6 | %) | ||||||||
Total Company-Controlled Channels
|
18 | % | 18 | % | 21 | % | 19 | % | ||||||||
Wholesale
|
(19 | %) | (18 | %) | (8 | %) | (31 | %) | ||||||||
Total
|
16 | % | 15 | % | 19 | % | 14 | % | ||||||||
Stores open:
|
||||||||||||||||
Beginning of period
|
375 | 399 | 386 | 403 | ||||||||||||
Opened
|
5 | - | 6 | - | ||||||||||||
Closed
|
(5 | ) | (4 | ) | (17 | ) | (8 | ) | ||||||||
End of period
|
375 | 395 | 375 | 395 | ||||||||||||
Other metrics:
|
||||||||||||||||
Average sales per store ($ in 000's)1
|
$ | 1,492 | $ | 1,192 | ||||||||||||
Average sales per square foot1
|
$ | 998 | $ | 810 | ||||||||||||
Stores > $1 million net sales1
|
85 | % | 64 | % | ||||||||||||
Average mattress sales per mattress unit - Company Controlled Channels2
|
$ | 2,223 | $ | 2,027 | $ | 2,157 | $ | 1,986 |
Three Months Ended
|
Trailing-Twelve Months Ended | |||||||||||||||
July 2, 2011
|
July 3, 2010
|
July 2, 2011
|
July 3, 2010
|
|||||||||||||
Net income
|
$ | 11,289 | $ | 6,202 | $ | 45,478 | $ | 56,170 | ||||||||
Income tax expense (benefit)
|
6,307 | 3,679 | 26,625 | (17,098 | ) | |||||||||||
Interest expense
|
64 | 70 | 279 | 4,532 | ||||||||||||
Depreciation and amortization
|
3,210 | 3,228 | 12,815 | 14,934 | ||||||||||||
Stock-based compensation
|
1,122 | 729 | 4,727 | 2,898 | ||||||||||||
Asset impairments
|
18 | - | 356 | 199 | ||||||||||||
EBITDA
|
$ | 22,010 | $ | 13,908 | $ | 90,280 | $ | 61,635 |
Note -
|
Our EBITDA calculation is considered a non-GAAP financial measure and is not in accordance with, or preferable to, "as reported," or GAAP financial data. However, we are providing this information as we believe it facilitates analysis of the Company's financial performance by investors and financial analysts.
|