Sleep Number Corp (SNBR) SEC Filing 10-K Annual report for the fiscal year ending Saturday, December 30, 2017

Earnings Press Release
10-K Annual Report
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Sleep Number Corp
Ticker: SNBR CIK: 827187

Exhibit 99.1

FOR IMMEDIATE RELEASE

SLEEP NUMBER ANNNOUNCES RECORD FOURTH-QUARTER AND FULL-YEAR 2017 RESULTS


•	Fourth-quarter net sales grew 16% to $363 million, with full-year net sales up 10% to a record $1.44 billion


•	Reported 2017 EPS growth of 41% to $1.55, including fourth-quarter EPS of $0.39


•	Generated record full-year operating free cash flow of $113 million


•	Increased its revolving credit facility from $153 million to $300 million


•	Provides 2018 earnings outlook of $1.70 to $2.00 per diluted share, an increase of 10% to 29% versus 2017

MINNEAPOLIS - (February 15, 2018) - Sleep Number Corporation (NASDAQ: SNBR) today reported record results for the year ended December 30, 2017, including fourth-quarter results which exceeded expectations.

“Our consumer innovation strategy delivered market share growth and accelerated returns in 2017,” said Shelly Ibach, president and chief executive officer of Sleep Number. “Consumers are embracing the sleep and wellness benefits of our revolutionary Sleep Number 360™ smart bed. We look forward to having our full line of smart beds in market by mid-year 2018 and continuing to advance our supply chain initiatives for greater efficiency.”

Fourth-quarter Statement of Operations Review


•	Net sales increased 16% to $363 million, including a 12% comparable sales increase and 4 percentage points (ppt) of growth from stores opened in the last twelve months


•	Operating income increased 31% to $20 million, or 5.5% of net sales, a 60 basis-point rate improvement versus the prior year’s fourth quarter


•	Earnings per diluted share increased 56% to $0.39, including 6 cents of tax benefits primarily due to application of the Tax Cuts and Jobs Act enacted in December 2017

Full-year Statement of Operations Review


•	Net sales increased 10% to $1.44 billion in 2017, including a 4% comparable sales gain and 7 ppt of growth from new stores


•	Operating income increased 20% to $92 million, or 6.4% of net sales, a 60 basis-point rate improvement versus the prior year


•	Earnings per diluted share increased 41% to $1.55, compared to $1.10 in 2016, including 6 cents of tax benefits primarily due to application of the Tax Cuts and Jobs Act enacted in December 2017

Cash Flows and Balance Sheet Review


•	Operating cash flows increased 14% to a record $173 million, compared with $152 million in 2016


•	Invested $60 million in capital expenditures, compared with $58 million in 2016, with $487 million invested in the business over the past six years in the form of capital expenditures and acquisitions


•	Increased share repurchases 20% to $150 million in 2017, bringing total returns to shareholders to $488 million over the past six years; $465 million remains available under our share repurchase authorization


•	Return on invested capital (ROIC) was 14.3% for the year, well above our weighted average cost of capital


•	On February 14, 2018 we amended our revolving credit facility to increase our net aggregate availability from $153 million to $300 million. We maintained the 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

Financial Outlook

The company expects to generate full-year 2018 earnings per diluted share of between $1.70 and $2.00, a 10% to 29% increase versus full-year 2017 earnings per diluted share of $1.55. The outlook assumes mid-to- high single digit sales growth for 2018. The 2018 outlook assumes an estimated effective income tax rate of 25%, based on the new tax legislation enacted in December 2017. The company anticipates 2018 capital expenditures to be approximately $50 million. Our outlook contemplates a slow growth economy.

The following information was filed by Sleep Number Corp (SNBR) on Thursday, February 15, 2018 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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