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Sleep Number Corp (SNBR) SEC Filing 10-Q Quarterly report for the period ending Saturday, September 26, 2020

Sleep Number Corp

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

SLEEP NUMBER ANNOUNCES RECORD THIRD QUARTER 2020 RESULTS

Third quarter net sales grew 12% to a record $531 million, with demand growth of 16%
Third quarter operating income grew 78% and diluted EPS grew 90% to a record $1.79
Generated a 51% increase in year-to-date operating cash flows, and a trailing twelve-months ROIC of 20.8%
Provides 2020 earnings outlook of approximately $4.00 per diluted share, a 48% increase versus full-year 2019 earnings per diluted share of $2.70, on estimated net sales growth of 7% to 8%

MINNEAPOLIS – (October 14, 2020) – Sleep Number Corporation (Nasdaq: SNBR) today reported results for the quarter ended September 26, 2020.

"Our exceptional third quarter performance reflects the ongoing relevance of our life-changing 360® smart beds as consumers deepen their understanding of the importance of quality sleep to their overall health and wellness,” said Shelly Ibach, President and CEO. “For the third consecutive year, since transitioning to our smart beds, our Q3 results reflect double-digit demand growth. We again demonstrated the resilience of our vertical business model through our top and bottom-line performance and a trailing twelve months ROIC of nearly 21%. I am thankful for our team's amazing dedication to our mission, their ingenuity and how they keep each other safe, healthy and happy. Driven by our purpose, we are accelerating our strategic initiatives, strengthening our competitive advantages and creating meaningful value for our customers, team, business partners and shareholders.”

Third Quarter Overview
Net sales increased 12% to $531 million, including an 11% comparable sales gain; online and phone sales were up 111% versus the prior year and represented 14% of net sales
Gross profit rate increased 70 basis points (bp) to 63.1% of net sales compared with 62.4% for the same period last year
Operating income increased 78% to $70 million, or 13.1% of net sales, up 490 bp versus the prior year’s third quarter
Earnings per diluted share increased 90% to $1.79, compared with $0.94 for the prior year


Cash Flows and Liquidity Review
Generated $287 million in net cash from operating activities for the first nine months of 2020, up 51% versus last year, with year-to-date operating free cash flows of $259 million, up 81% versus prior year
Invested $28 million in year-to-date capital expenditures compared to $47 million for the prior year period
Return on invested capital (ROIC) of 20.8% for the trailing twelve-month period, up 240 bp versus the prior year comparable period
Cash and liquidity available under our credit facility, before letters of credit, was $418 million at the end of the third quarter, up $180 million from the same period last year; repaid $75 million, 364-day term loan six months early and removed related LIBOR floor and share repurchase restriction
Leverage ratio was 1.9x EBITDAR at the end of the third quarter, compared with 2.6x for the same period last year

Financial Outlook
The company expects to generate full-year 2020 earnings per diluted share of approximately $4.00, which would represent a 48% increase versus full-year 2019 earnings per diluted share of $2.70. The outlook assumes 7% to 8% net sales growth for 2020, including an estimated two percentage points of growth and approximately 25 cents per share from the 53rd week. The company also intends to resume share repurchases in the fourth quarter and to operate, over time, with leverage of 2.5x to 3.0x EBITDAR, with seasonal fluctuations expected.



The following information was filed by Sleep Number Corp (SNBR) on Wednesday, October 14, 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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Inside Sleep Number Corp's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Cover Page
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
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 (Details)
Business And Summary Of Significant Accounting Policies (Policies)
Commitments And Contingencies
Commitments And Contingencies (Details)
Commitments And Contingencies (Tables)
Covid-19 Pandemic
Covid-19 Pandemic (Details)
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 (Details)
Inventories (Tables)
Leases
Leases (Tables)
Leases - Additional Information (Details)
Leases - Schedule Of Maturities Of Operating Lease Liabilities (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 (Details)
Net Income Per Common Share (Tables)
Profit Sharing And 401(K) Plan
Profit Sharing And 401(K) Plan (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 (Details)
Stock-Based Compensation Expense (Tables)
Ticker: SNBR
CIK: 827187
Form Type: 10-Q Quarterly Report
Accession Number: 0000827187-20-000046
Submitted to the SEC: Fri Oct 23 2020 4:23:19 PM EST
Accepted by the SEC: Fri Oct 23 2020
Period: Saturday, September 26, 2020
Industry: Household Furniture

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