SELECT COMFORT ANNOUNCES FOURTH-QUARTER AND FULL-YEAR 2015 RESULTS
Enterprise Resource Planning (ERP) system implementation impacts Q4 results by $0.43 per share
Reports fourth-quarter net loss of $0.42 per share and full-year earnings of $0.97 per share
Repurchased $98 million of the company's common stock in 2015 versus $45 million in 2014
Provides 2016 outlook
MINNEAPOLIS - (Feb. 11, 2016) - Select Comfort Corporation (NASDAQ: SCSS) today reported fourth-quarter and full-year 2015 results for the period ended Jan. 2, 2016.
"The transition from our 20-year-old legacy systems to a fully integrated ERP platform has been more challenging with far greater customer and financial impacts than we anticipated. Many of our customers endured delays and delivery reschedules as we ramped up the new system. These results are not acceptable to us," said Shelly Ibach, president and chief executive officer of Select Comfort. "We have made major progress resolving technical and operational issues. Plants have increased production levels ahead of current demand and operational and customer service levels have significantly improved. We expect to leverage this critical investment for improved profitability in the back-half of 2016 as planned. Our competitive advantages and strategic direction remain on track to achieve our commitment of earnings per share of $2.75 by 2019.”
Please refer to the last table in this news release for supplemental financial information that summarizes discrete items affecting 2015 fourth-quarter results and our 2016 outlook.
Fourth-quarter Results Overview
Net sales decreased 33% to $215 million, with comparable sales down 30%, reflecting approximately $84 million in sales disruption from the ERP system implementation. Note that the prior year’s fourth quarter also included an extra week of sales
Net loss per diluted share of $0.42, including $0.43 per share for lost sales and operational inefficiencies related to the ERP system implementation, compared with earnings per share of $0.35 last year
Full-year Results Overview
Net sales in 2015 were $1.21 billion, an increase of 5%, or 7% when excluding the extra week from 2014
Earnings per diluted share of $0.97, compared to $1.25 in 2014. Note that 2014 fourth-quarter earnings per share included 10 cents of combined one-time benefits from the extra week and legal settlement
Generated $133 million of EBITDA, invested $86 million in capital projects, $57 million to acquire BAM Labs and returned $98 million to shareholders through share repurchases, up from $45 million in 2014
The company expects to generate full-year 2016 GAAP earnings per diluted share of between $1.25 and $1.45, a 29% to 49% increase versus full-year 2015 earnings per diluted share of $0.97. The outlook assumes low-teen sales growth for the full-year, with low-single digit growth in the first half of the year, followed by stronger growth in the back-half of the year. Our 2016 outlook includes an estimated $0.25 to $0.30 EPS reduction related to the ERP transition (largely in the first quarter), including $40 to $50 million of estimated sales impact. The outlook assumes a 10% increase in store count in 2016, compared with 5% store count growth in 2015. The company anticipates 2016 capital expenditures will be approximately $70 million. The outlook does not contemplate a worsening of the consumer spending environment.
The following information was filed by Select Comfort Corp (SCSS) on Thursday, February 11, 2016 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.
View differences made from one year to another to evaluate Select Comfort Corp's financial trajectory
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Ticker: SCSS CIK: 827187 Form Type:10-K Annual Report Accession Number: 0000827187-16-000073 Submitted to the SEC: Tue Mar 01 2016 5:09:13 PM EST Accepted by the SEC: Tue Mar 01 2016 Period: Saturday, January 2, 2016 Industry: Household Furniture