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Sleep Number Corp (SNBR) SEC Filing 10-Q Quarterly report for the period ending Saturday, March 28, 2020

Sleep Number Corp

CIK: 827187 Ticker: SNBR
Exhibit 99.1
snbrlogojpg1.jpg
FOR IMMEDIATE RELEASE

SLEEP NUMBER ANNOUNCES FIRST QUARTER 2020 RESULTS
First quarter net sales increased 11% to $473 million
First quarter diluted EPS grew 70% to a record $1.36
Executing more than $250 million of cost and capital deployment actions to support business continuity
Cash at quarter end of $239 million, with additional cash funding of $75 million on April 3rd
MINNEAPOLIS – (April 22, 2020) – Sleep Number Corporation (Nasdaq: SNBR) today reported results for the quarter ended March 28, 2020.
“As a purpose driven company, Sleep Number has been intently focused on keeping our team members safe, serving our customers and ensuring our business continuity during this time of uncertainty and disruption created by the COVID-19 pandemic,” stated Shelly Ibach, President and CEO. “Our record first quarter performance reflects the exceptional consumer demand for our life-changing 360® smart beds, our significant competitive advantages and strong business fundamentals. We are effectively managing the near-term challenges caused by the pandemic. The measures we have taken in recent weeks, combined with our team’s agility, resilience and innovation, give me great confidence in our ability to rebound with strength as this crisis abates and the economy recovers.”

First Quarter Overview
Net sales increased 11% to $473 million, including a 7% comparable sales gain and 5 percentage points of growth from new stores
Gross profit rate increased 240 basis points (bp) to 63.9% of net sales
Operating income increased 61% to $53 million, or 11.2% of net sales, up 350 bp versus the prior year’s first quarter while investing in growth drivers, including 25% higher year-over-year R&D spending
Earnings per diluted share increased 70% to a record $1.36, while absorbing 11 cents of year-over-year income tax rate headwind
Cash Flows and Liquidity Review
Generated $85 million in net cash from operating activities, up 25% versus the prior year; trailing twelve-month net cash from operating activities of $206 million grew 37% versus prior year comparable period
Reduced 2020 planned capital expenditures to approximately $35 million versus previous plan of $60 million, with $10 million incurred in the first quarter
As previously disclosed, we suspended share repurchases for balance of the year
Leverage ratio of 2.6x EBITDAR at the end of the first quarter (covenant maximum of 4.5x)
Return on invested capital (ROIC) increased to 19.1% for the trailing twelve-month period, up 260 bp versus the prior year comparable period
Cash at end of first quarter of $239 million, including drawing down the remaining availability under our revolving credit facility on March 17th; on April 3rd we added $75 million additional cash through an incremental term loan under the credit facility’s $150 million accordion

COVID-19 Update
The company has taken decisive actions to manage liquidity and costs through the challenging economic environment caused by COVID-19. The pandemic and ensuing government restrictions have resulted in the temporary closure of most of our retail stores since mid-March. The company took immediate measures to preserve cash: suspended share repurchases for the balance of the year, significantly reduced capital expenditures, compensation, benefits and discretionary spending, and temporarily furloughed 40% of its team members, with approximately another 30% working reduced hours. These actions are collectively expected to result in more than $250 million of reduced cash spending versus plan in 2020.

Financial Outlook
The company remains focused on managing liquidity and balance sheet strength, and expects to meet its liquidity needs from operating cash flow and its existing credit facilities. On March 23, 2020, the company 


The following information was filed by Sleep Number Corp (SNBR) on Wednesday, April 22, 2020 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Cover Page
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Statement Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Operations (Unaudited)
Condensed Consolidated Statements Of Shareholders' (Deficit) (Unaudited)
Business And Summary Of Significant Accounting Policies
Business And Summary Of Significant Accounting Policies (Policies)
Commitments And Contingencies
Commitments And Contingencies (Tables)
Commitments And Contingencies Warranty Liabilities (Details)
Covid-19 Pandemic
Credit Agreement
Credit Agreement (Tables)
Credit Agreement - Additional Information (Details)
Credit Agreement - Schedule Of Borrowings Under Credit Facility (Details)
Fair Value Measurements
Fair Value Measurements (Details)
Goodwill And Intangible Assets, Net
Goodwill And Intangible Assets, Net (Tables)
Goodwill And Intangible Assets, Net - Additional Information (Details)
Goodwill And Intangible Assets- Annual Amortization For Definite-Lived Intangible (Details)
Inventories
Inventories (Tables)
Inventories - Schedule Of Inventories (Details)
Leases
Leases (Tables)
Leases - Additional Information (Details)
Leases - Schedule Of Maturities Of Operating Lease Liabilities And Aggregate Future Commitments Under Operating Leases (Details)
Leases - Schedule Of Operating Lease Costs (Details)
Leases - Schedule Of Other Information Related Operating Leases (Details)
Net Income Per Common Share
Net Income Per Common Share (Tables)
Net Income Per Common Share - Components Of Basic And Diluted Net Income Per Share (Details)
Profit Sharing And 401(K) Plan
Profit Sharing And 401(K) Plan - Additional Information (Details)
Repurchases Of Common Stock
Repurchases Of Common Stock (Tables)
Repurchases Of Common Stock - Additional Information (Details)
Repurchases Of Common Stock - Schedule Of Repurchase Of Common Stock (Details)
Revenue Recognition
Revenue Recognition (Tables)
Revenue Recognition - Additional Information (Details)
Revenue Recognition - Disaggregation Of Revenue (Details)
Revenue Recognition - Schedule Of Deferred Contract Assets And Deferred Contract Liabilities (Details)
Revenue Recognition - Schedule Of Sales Return Liability (Details)
Stock-Based Compensation Expense
Stock-Based Compensation Expense (Tables)
Stock-Based Compensation Expense - Schedule Of Stock-Based Compensation Expense (Details)
Ticker: SNBR
CIK: 827187
Form Type: 10-Q Quarterly Report
Accession Number: 0000827187-20-000016
Submitted to the SEC: Fri May 01 2020 4:13:20 PM EST
Accepted by the SEC: Fri May 01 2020
Period: Saturday, March 28, 2020
Industry: Household Furniture

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