Select Comfort Corp (SCSS) SEC Filing 10-K Annual report for the fiscal year ending Saturday, January 3, 2015

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Select Comfort Corp
Ticker: SCSS CIK: 827187

Exhibit 99.1

FOR IMMEDIATE RELEASE

SELECT COMFORT ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2014 RESULTS

Provides 2015 and long-term outlook


•	Fourth-quarter net sales increased 40% to $322 million, including a 22% company-controlled comparable sales gain


•	Fourth-quarter EPS increased 192% to $0.35 and full-year EPS increased 16% to $1.25


•	2015 outlook of $1.30 per diluted share and 2019 outlook of $2.75 per diluted share

MINNEAPOLIS - (Feb. 11, 2015) - Select Comfort Corporation (NASDAQ: SCSS) today reported fourth-quarter and full-year 2014 results for the period ended Jan. 3, 2015. Net sales increased 40% in the quarter, with 22% comparable sales growth and 10 percentage points (ppt.) of growth from the extra week in the fourth quarter. Fourth-quarter earnings of $0.35 per diluted share increased 192% compared to the prior year, including $0.06 related to the additional week in the quarter.

“Our fourth-quarter and full-year 2014 results reflect a strong consumer response to the combination of proprietary sleep innovations, effective marketing and exclusive distribution,” said Shelly Ibach, president and CEO of Select Comfort. “Our consumer-driven innovation strategy, advantaged business model and capital discipline position the company to deliver sustainable profitable growth and more than double earnings per share to $2.75 by fiscal 2019.”

Fourth Quarter Statement of Operations Overview


•	Net sales increased 40% to $322 million, compared to $231 million in the fourth quarter of 2013. Comparable sales increased 22%, new stores added 9 ppt. of growth, and the additional week in the fourth quarter added 10 ppt. of growth.


•	Gross profit increased 38% to $194 million. Gross margin was 60.4% compared to 60.9% last year, reflecting a higher mix of our new FlexFit™ adjustable bases and demand-driven logistics costs.


•	Operating expenses totaled $167 million, or 51.7% of net sales, compared to $131 million, or 56.7% of net sales, for the same period last year. The year-over-year expense increase included variable expenses on higher sales, spending to support growth initiatives, and expenses related to the additional week in the fourth quarter, partly offset by a $3.5 million legal settlement benefit.


•	Operating income totaled $28 million, compared to $10 million in the prior year.


•	Earnings per diluted share were $0.35, a 192% increase over the prior year. Excluding the benefit of $0.06 related to the additional week in the quarter and $0.04 related to a favorable legal settlement, earnings per diluted share grew 108%.

Full-year Statement of Operations Review


•	Net sales in 2014 were $1.16 billion, an increase of 20%, including 12% from comparable stores, compared to $960 million in 2013.


•	Earnings per diluted share increased 16% to $1.25, compared to $1.08 in 2013.

Cash Flows and Balance Sheet Review


•	Net cash provided by operating activities was $144 million for full-year 2014, compared to $88 million for the prior year.


•	Capital expenditures for 2014 were $77 million, consistent with the prior year.


•	The company repurchased $15 million, or 0.6 million shares, of its common stock in the fourth quarter. Since reinitiating share repurchases in April 2012, the company has repurchased 5.1 million shares at an average cost of $22.40 per share, returning $115 million or 124% of free cash flows to shareholders.


•	As of the end of the quarter, the company had cash, cash equivalents and marketable debt securities, less customer prepayments, of $137 million.

The following information was filed by Select Comfort Corp (SCSS) on Wednesday, February 11, 2015 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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