Sleep Number Corporation · NASDAQ:SNBR
Sleep Number — Select Comfort — Investor Presentation (March 2011)
18 slides from Sleep Number's investor presentation, Mar 7, 2011
Slide 1: Select Comfort March 2011
> select “¥ com March 2011
Slide 2: Forward Looking Statements
Forward Looking Statements Statements used in this news release relating to future plans, events, financial results or performance are forward-looking statements subject to certain risks and uncertainties including, among others, such factors as current general and industry economic trends; consumer
Slide 3: Investment Highlights
Investment Highlights • Unique and Advantaged Business Model – Adjustable firmness mattress - individual control of comfort – Only vertically integrated mattress manufacturer and retailer • Second largest retailer, fifth largest manufacturer • Significant Growth Opportunity – Industry sustains >5% a
Slide 4: Differentiated Product that Satisfies Consumer Needs
Differentiated Product that Satisfies Consumer Needs • Push button control of sleep surface - Provides for individualized comfort based on present need - 9 out of 10 couples prefer different firmness settings • Scientifically proven benefits - Third-party studies show improved sleep quality and redu
Slide 5: Innovation Series
Innovation Series • Good, Better, Best product line presentation • 20+ years proven technology • Competitive value - promoted pricing starts at $599 (Queen mattress) Affordable for a Broad Range of Consumers Sleep Number Bed Series & Models (Queen Sets) Classic Series c2 $999 c3 $1,299 c4 $1,599 Per
Slide 6: Differentiated Distribution = Positive End to End Brand Experience
Differentiated Distribution = Positive End to End Brand Experience • 380 Stores nationwide – Primarily mall based – Supported by internet and call center sales • Knowledgeable “Sleep Experts” = best in class store experience • National customer service network and in-home delivery and set-up
Slide 7: Differentiated Supply Chain: Flexible and Cash Advantaged
• Two plants - Columbia, SC and Salt Lake City, UT - Sew covers and assemble pumps, outsource major components - 10 Hubs and 111 spokes support national distribution - Build to order, JIT inventory translates to minimal inventory (15 turns in manufacturing) • Negative 30 day cash conversion cycle -
Slide 8: Sleep Number Competes in the Industry Sweet Spot
Sleep Number Competes in the Industry Sweet Spot 30 years of consistent industry growth (6% CAGR). Macro trends toward better sleep. 1. Total Wholesale Sales based on ISPA 2009 Annual Report and ISPA Oct. 2010 Forecast 2. Premium and specialty percentages for 2010-2012 are company estimates Wholesal
Slide 9: 2011 - Focused on Acceleration and Market Share Growth
2011 - Focused on Acceleration and Market Share Growth • Awareness and Consideration – Product is superior, but too few know about it or where to find it • Market-by-Market Development – National presence with relatively low market share, particularly in under-stored/under-aware markets • Customer E
Slide 10: Awareness Gaps - Both Product and Exclusive Distribution
Awareness Gaps - Both Product and Exclusive Distribution Unaided Brand Awareness Unaided Store Awareness Brand Store Source: Company Survey
Slide 11: Strategies to Boost Product and Store Consideration
Strategies to Boost Product and Store Consideration • Accelerating Media Growth – +15% in 2011 – Local and national approach – Expanded digital investment • Non-mall Pilot – Testing “Billboard” affect of high traffic locations – 20 Non-mall stores by year end • New Media Creative – Highlights what i
Slide 12: Market Performance Demonstrates Success … And Opportunity
Market Performance Demonstrates Success … And Opportunity
Slide 13: Piloting Acceleration of Local Markets - Proving Cost Effective Formula
Piloting Acceleration of Local Markets - Proving Cost Effective Formula What • Three year goals – Double market share to >10% – Achieve above average market profit rate How • Aggressive media investment – Compete on share of voice • Real estate – Reposition existing stores to align to target custome
Slide 14: Solid Execution Has Returned Company to Growth
Solid Execution Has Returned Company to Growth Solid Sales Growth (1 Year & 2 Year Comps) (TTM$ in mm) *As adjusted for one time items in 2008/2009 Significant Returns in 2010: ROA 23%, ROE 78%
Slide 15: Favorable Store Economics Provide Margin Upside
Favorable Store Economics Provide Margin Upside Net Sales Per Store (TTM$ in 000’s) Planning 5% Store Growth Beginning in 2012 * Excluding national media and customer support Average Store $2MM Store
Slide 16: Strong Cash Flow and Debt Free Balance Sheet
Strong Cash Flow and Debt Free Balance Sheet Self funding cash model - longer term opportunity to return cash to shareholders
Slide 17: Summary - Select Comfort Offers a Unique Opportunity for Profitable Growth
• Proven success with key strategic assets – Unique product – Strong brand – Advantaged business model – Growing industry • Unique time and opportunity for the company – Success of last 24 months has company positioned for growth – Solid balance sheet - flexibility to invest – Focused on key opportu
Slide 18: select a comfort.
select a comfort. CREATOR OF THE SLEEP NUMBER’ BED