Sleep Number Corp (SNBR) 10-K Annual Report February 2019

•	Net sales increased 13% (up 11% adjusted); net sales for the second half of 2018 increased 8% (up 12% adjusted); see Reconciliation of Non-GAAP Financial Measures tables on page 10

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Operating income increased to $38 million, or 9.3% of net sales, a 380 basis-point rate improvement versus the prior year’s fourth quarter

•	Earnings per diluted share increased 108% to $0.81 (up 76% adjusted); earnings per diluted share for the second half of 2018 increased 31% (up 48% adjusted); see Reconciliation of Non-GAAP Financial Measures tables on page 10

“Our purpose-driven brand and our revolutionary new 360^® smart beds are driving enthusiastic consumer engagement and accelerated performance, including 12% adjusted net sales growth and 48% adjusted EPS growth for the second half of 2018,” stated Shelly Ibach, President and CEO. “We expect this trajectory to continue in 2019 as we advance our initiatives to drive demand, leverage our business model and deploy capital efficiently.”

Full-year Statement of Operations Review

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Net sales increased 6% to $1.53 billion in 2018, including a 3% comparable sales gain and 3 percentage points of growth from new stores

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Operating income increased to $92 million, or 6.0% of net sales, while absorbing approximately $16 million of 360 smart bed transition impacts

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Earnings per diluted share increased 24% to $1.92, compared with $1.55 for 2017

Cash Flows and Balance Sheet Review

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Generated $132 million of operating cash flows in 2018

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Invested $46 million in capital expenditures, with $481 million of capital invested in the business over the past six years, in addition to building essential infrastructure and growth driving capabilities

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Increased share repurchases 86% to $279 million in 2018, bringing total cash returned to shareholders to $738 million over the past six years

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As of December 29, 2018, the remaining authorization under our Board-approved share repurchase program was $186 million which is sufficient to support 2019 planned repurchases of $125 to $145 million

•	Return on invested capital (ROIC) was 16.0% for the year, which compares favorably to our high single-digit weighted average cost of capital

•	On February 11, 2019, we amended our revolving credit facility to increase our aggregate availability from $300 million to $450 million. The credit agreement matures in February 2024

Financial Outlook

The company expects to generate full-year 2019 earnings per diluted share of between $2.25 and $2.75, a 17% to 43% increase versus full-year 2018 earnings per diluted share of $1.92. The outlook assumes 6% to 10% net sales growth for 2019. The 2019 outlook assumes an estimated effective income tax rate of 24.5%, compared to 19.6% for 2018. The company anticipates 2019 capital expenditures to be $50 to $60 million.

The following information was filed by Sleep Number Corp (SNBR) on Wednesday, February 13, 2019 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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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Sleep Number Corp provided additional information to their SEC Filing as exhibits

Exhibit 10.29: Material Contract

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: SNBR
CIK: 827187
Form Type: 10-K Annual Report
Accession Number: 0001564590-19-004499
Submitted to the SEC: Tue Feb 26 2019 4:40:35 PM EST
Accepted by the SEC: Tue Feb 26 2019
Period: Saturday, December 29, 2018
Industry: Household Furniture